Replies to post #243537 on Blum Holdings Inc (BLMH)

[Murph12779]

No opinion here... facts. Outstanding shares almost used up, net losses of 7 million+ in Q3 expected in Q4, cash sits at 6 million. This company is SOL unless it either A) issues more stock (dilution) or B) performs a R/S and utilizes the authorized shares to dilute (a R/S only shrinks the outstanding shares according to the proposal, not the authorized of 990 million)

[Magnum7419]

Here is why he and others are concerned IMHO

" Accordingly, a reverse stock split will have the effect of creating additional unissued and unreserved shares of our Common Stock. We have no current arrangements or understandings providing for the issuance of any of the additional authorized and unreserved shares of our Common Stock that would be available as a result of a proposed reverse stock split. However, these additional shares may be used by us for various purposes in the future without further stockholder approval (subject to applicable law), including, among other things: (i) raising capital necessary to fund our future operations, (ii) providing equity compensation to our employees, executive officers, directors, and consultants, (iii) entering into collaborations and other strategic relationships, (iv) expanding our business through the acquisition of other businesses or products, (v) declaring of stock splits, and (v) declaring of stock dividends."







http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=11547345

From Page 31
20. SUBSEQUENT EVENTS

Issuances of Debt and Warrants:
On July 25, 2016, the Company issued a demand promissory note in favor of Dominion Capital LLC ("Dominion") in the amount of $750,000. The principal and interest under the demand note is due and payable on demand, but in no case later than July 23, 2018. Payment may be made in either cash or shares of the Company's common stock, at Dominion's option. Dominion may also, at its option, convert the demand note into a subsequent securities offering that is undertaken by the Company. Interest accrues at the simple rate of one percent (12%). The Company received the $750,000 on July 25, 2016. Dominion also received warrants to acquire up to 533,714 shares of common stock at $0.35 per share. The warrants have a four year term. Dominion has the right to cashless exercise of the warrants if at the time of exercise there is no effective registration statement for the underlying common stock.
On August 12, 2016, the Company issued a demand promissory note in favor of Dominion Capital LLC ("Dominion") in the amount of $1,000,000. The principal and interest under the demand note is due and payable on demand, but in no case later than August 12, 2018. Payment may be made in either cash or shares of the Company's common stock, at Dominion's option. Dominion may also, at its option, convert the demand note into a subsequent securities offering that is undertaken by the Company. Interest accrues at the simple rate of one percent (12%). The Company received the $1,000,000 on August 12, 2016. Dominion also received warrants to acquire up to 714,286 shares of common stock at $0.44 per share. The warrants have a four-year term. Dominion has the right to cashless exercise of the warrants if at the time of exercise there is no effective registration statement for the underlying common stock.

"Issuances of Warrants:
On August 12, 2016, the Company issued warrants in favor of Dominion to acquire up to 500,000 shares common stock at $0.44 per share. The warrants have a four-year term. Dominion has the right to cashless exercise of the warrants if at the time of exercise there is no effective registration statement for the underlying common stock. The warrants were issued as consideration for the Company's default of a $500,000 note dated December 14, 2015. The default was as a result of the Company not having sufficient shares of common stock to issue to Dominion upon its conversion of the note.

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"The Company is a party to the following transactions with Martin Kaufman and Salwa Ibrahim, each of whom beneficially owns more than 5% of our outstanding Common Stock.

An entity owned 100% by Mr. Kaufman and Mr. Ibrahim owns the property where the Company’s Blum Oakland facility is located. That entity leases the property to an unaffiliated third party for $16,000 per month. The Company subleases the property from the third party for $28,840 per month.

The Company pays $24,000 per month in rent for the property where its Oakland, California cultivation facility is located to an entity owned 50% by Mr. Kaufman and Ms. Ibrahim .

The Company pays $24,000 per month in rent for the property where its San Leandro, California dispensary and production facility is located to an entity owned 50% by Mr. Kaufman and Ms. Ibrahim.

The Company pays approximately $35,000 per month to an entity owned 50% by Mr. Kaufman to provide security at the property where its Blum Oakland facility is located.

During the twelve months ended December 31, 2016, the Company purchased $76,638 in products from an entity owned 9% by Mr. Kaufman".



http://ih.advfn.com/p.php?pid=nmona&article=75337470 see page 12