Replies to post #24917 on Unique Logistics International Inc (UNQL)

[LJ-Bodhi]

This actually is fun for me to explain the basics of the UNQL share structure. It is not that difficult to understand.

Correct, there are 5 million Authorized preferred shares and 1 million preferred shares have already been issued. Bingo.

Correct, there were 130k of the 1 million preferred shares issued as Series A preferred shares:

Front Four Management got 50k
Lucosky Brookman got 30k
Southridge LLC got 30k
David Briones got 20k

Look....50 + 30 + 30 + 20 = 130. There are 130k Series A preferred shares issued to those 4 people/entities. They OWN those shares. And every single one of those preferred shares has a real world value of common shares. Specifically, 1 preferred share is freely convertible into 6,547 common shares. Get it yet? 130k preferred shares are convertible to 851,110,000 common shares. YES, there is currently an 800m AS limit. But these 130k preferred shares most certainly have value to those owners. And they will convert their preferred shares into common shares, and then sell those common shares on the open market for real cash in due course. We all understand there is CURRENTLY an AS of 800m, so no need to repeat that simple fact over and over again. However, there are 130k Series A preferred shares issued that are convertible into 850m common shares....at some future point down the road.

Next, there were 870k Series B preferred shares issued when UNQL went public. Those are the rest of the 1 million total preferred shares. 130k + 870k = 1 million. See?

Sunandan Ray got around 717k Series B preferred shares and Great Eagle Freight got the other 153k.

Only Ray has converted Series B preferred shares to date. He immediately converted 30k for 197m common shares upon UNQL going public, and then another 19,200 last August, 2021 for 125m more common shares. That is why he now owns 322m common shares. 49,200 preferred shares times 6,547 equals 322 million. Understand how that works?

Ray still owns around 667,800 Series B preferred shares convertible into.....wait for it.....multiply by 6,547....convertible into 4.4 billion common shares. No need to repeat the 800m AS limit. We get it. But, when that AS limit raises over time, or there are reverse splits, there will be more room for Ray to convert more of his preferred shares into those 4.4 billion common shares. Over time. Yes, over time. He owns them.

And of course, Great Eagle will convert their 153k Series B preferred shares over time as well. Nothing yet. Yet. But their 153k are eventually convertible into just over 1 billion common shares. Still following? Not converted yet. But CAN be converted down the road. They own those shares.

Finally, there are the Series C and D preferred shares recently created by the December Exchange Agreement with Trillium and 3a Capital.

3a Capital got 195 Series C preferred shares. These have a different conversion rate. We learned from the last 10Q in April that Trillium converted 5 of these (Series D for them) preferred shares for 6.2 million common shares EACH. Still following? 3a Capital owns 195 Series C preferred shares convertible into 1.2 billion common shares. 195 x 6,200,000 = 1.2 billion. Got it?

Trillium got 192 Series D preferred shares. They converted 5 of those for around 32m common shares on April 5. IT'S STATED IN BLACK AND WHITE IN THE SUBSEQUENT EVENTS SECTION OF THE APRIL 10Q. So, that means Trillium now owns 187 Series D preferred shares convertible into another 1.16 billion more common shares. Let's not repeat the obvious over and over though. Yes, there is only an 800m Authorized Shares limit now. We all should understand that. Now, there is a limit, a cap, a max of 800m Authorized Shares. We all totally understand.

But.....does everyone ALSO understand that there are ALL OF THESE BILLIONS of shares just waiting and ready to be converted once the Authorized Shares are raised again?!?! The company already raised them from 500m to 800m. Anyone can guess how high the next rsise will be. I won't guess, and will just wait.

The proposed reverse split was in a range of 300-400 current shares to get 1 new share. Let's use 400. That means the 687m current OS become 1.7m Outstanding Shares after the split. Next, 800m AS should drop to 2m new AS after the split, since you divide by 400. But, what some folks can't seem to understand no matter how many times it gets explained, the company is proposing to have 250m Authorized Shares after the split. Maybe read this paragraph 10 times until it sinks in. Instead of only 2m AS post-split (which would keep the limit on crushing conversions) the company said they will RAISE the AS to 250m post-split. This does not mean the AS gets lowered from 800m to 250m. It means with only 1.7m Outstanding Shares post-split, there would be plenty of room for the preferred shares to be converted. See, you divide those 8.5 billion by the same 400 to understand those preferred shares are convertible into 21m shares. The system of math I know confirms 21m is waaayyyyy less than 250m Authorized Shares.

If anyone doesn't understand, so be it. Because It Is What It Is.