This could change, but I would assume they convert
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Posted On: 10/25/2019 2:34:33 AM
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This could change, but I would assume they convert all debt, preferred, AP etc. into common stock as it transfers over to preferred shares. Right now the AS for common is 800 million. I think it's reasonable to assume, given the recent settlement of the lawsuit, that debt is exchanged at 10 cents a share-ish. If this is ballpark then filling out the existing 800 is reasonable.
250M shares common today + 350M shares common to be converted from debt + 300M shares common to be converted for existing AMBS preferred stock today.
Therefore, at some discount, since we have to wait 3 years and there's always execution/legal risk, shares are worth some discounted percent of 100M/800M
Which is $0.125 12 1/2 cents at some discount.
As of today, Emerald has, whattaya know, 100M preferred shares authorized and unissued. So...
Based on the loose info we have, I would guess these shares will be redeemable under a participatory framework. Meaning the company can buy back whatever preferred shares we're issued in 2022 and we probably cannot convert until 2022 or even later, and the value they will pay us will be based on clinical progress and bio business milestones, but not to be less than $100M. This gives them protection from us routing the stock price while current ownership launches, allows them to build a few years of cash from which to pay us, forces us to convert at a higher price if they are successful selling their gummies and making bio progress.
Things to think about when getting preferred. What are the companies assets? Is there debt? What priority of preferred are we? Are the preferred shares cumulative? Are we/how are we being paid dividends for milestones and royalties? Is it adjustable? PArticipating? Will EMOR make these redeemable/callable? Do we get voting rights? Is it convertible? Do we have any right of refusal? Liquidation preference?
I cannot wait to see this tender.
250M shares common today + 350M shares common to be converted from debt + 300M shares common to be converted for existing AMBS preferred stock today.
Therefore, at some discount, since we have to wait 3 years and there's always execution/legal risk, shares are worth some discounted percent of 100M/800M
Which is $0.125 12 1/2 cents at some discount.
As of today, Emerald has, whattaya know, 100M preferred shares authorized and unissued. So...
Based on the loose info we have, I would guess these shares will be redeemable under a participatory framework. Meaning the company can buy back whatever preferred shares we're issued in 2022 and we probably cannot convert until 2022 or even later, and the value they will pay us will be based on clinical progress and bio business milestones, but not to be less than $100M. This gives them protection from us routing the stock price while current ownership launches, allows them to build a few years of cash from which to pay us, forces us to convert at a higher price if they are successful selling their gummies and making bio progress.
Things to think about when getting preferred. What are the companies assets? Is there debt? What priority of preferred are we? Are the preferred shares cumulative? Are we/how are we being paid dividends for milestones and royalties? Is it adjustable? PArticipating? Will EMOR make these redeemable/callable? Do we get voting rights? Is it convertible? Do we have any right of refusal? Liquidation preference?
I cannot wait to see this tender.
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