1. They will use a shelf offering for the MMJ sub. -- to pay everything back. Since Gelpid (the MMJ business) issued roughly $5MM in debt to GDSM and they are going to do it all internally to then spin the company out with a shelf offering that will raise capital to play Gelpid back and to give Gelpid initial cash flow. Effectively there is not debt burden assumed by GDSM in this scenario. This is the only way for Gelpid to really get their $5MM back.
From PR February 18:
"legal discussions are occurring to determine the best strategy for establishing a subsidiary, spinning it off and arranging a registered shelf offering;"
2. The PR states from today that the land lease purchases (for wholesale supply and distribution) will be financed via private investor capital:
"Given the capital required to pursue this strategy, the Company, via its subsidiary, would propose to be the general partner and raise capital from private investors. Obviously, the Company would retain an interest and control the brand."
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