[After CB Issuance] HumanN Scores Big with CB Issued a Year Ago for Resort Business

Issuing 10 Billion KRW Scale CB While Purchasing Gapyeong Real Estate
H Property & Service Sells 90% of CB Received from Real Estate Sale in One Year
Entry No.1 Association Holds 5 Billion KRW Scale 10th Series CB

[Asia Economy Reporter Hyungsoo Park] HumanN (formerly Glosfer Labs) is seeing continued conversion requests for convertible bonds (CB) issued last January when it newly launched its resort business. The company used convertible bonds to cover the acquisition cost of land and buildings in Gapyeong, Gyeonggi Province, and investors are expected to achieve returns exceeding 200% within a year.

According to the Financial Supervisory Service's electronic disclosure system on the 5th, conversion rights for HumanN convertible bonds worth 2.8 billion KRW were exercised this month. HumanN's closing price the previous day was 13,850 KRW. Investors exercising their conversion rights can receive one share of HumanN common stock at 4,290 KRW, potentially earning over 8,000 KRW per share. Since the listing date is on the 24th, the profit scale may vary.

Earlier, last January, HumanN issued the 10th series convertible bonds worth 10 billion KRW to EH Property & Service. While acquiring land and buildings in Haenghyeon-ri, Sang-myeon, Gapyeong-gun, Gyeonggi Province, the interim payment of 10 billion KRW was offset with convertible bonds. The remaining balance of 3.86 billion KRW was paid in cash.

The convertible bonds have a maturity interest rate of 3%, and conversion rights can be exercised from January 30, 2021, to December 30, 2022. The initial conversion price was 500 KRW at issuance, but due to HumanN's capital reduction and paid-in capital increase over the past year, the current conversion price has changed to 4,290 KRW.

After acquiring the convertible bonds, EH Property & Service settled 4.16 billion KRW worth of convertible bonds through in-kind payment. Subsequently, through exchanges, in-kind settlements, and over-the-counter sales, the amount of convertible bonds held decreased to 460 million KRW. They liquidated 840,000 shares of convertible bonds, converting them into 4.6 billion KRW in cash. Last month, an investor who purchased convertible bonds from HumanN over-the-counter is expected to realize profits from the rise in HumanN's stock price. Entry No.1 Association disclosed that it holds 5 billion KRW worth of 10th series HumanN convertible bonds through over-the-counter purchases.

HumanN remodeled the building purchased from EH Property & Service until July last year. As a new business, it started operating a family hotel called 'Over the Mountain' in Gapyeong-gun, Gyeonggi Province. HumanN explained that the family hotel is located at the foot of Chukryeongsan, known for its beautiful mountain scenery, and offers accommodation facilities comparable to a 5-star hotel. Over the Mountain has a total of 28 rooms across six different room types.

According to HumanN's Q3 quarterly report last year, the resort business division recorded sales of 192.89 million KRW and an operating profit of 49.21 million KRW. The resort business division's assets amounted to 11.4 billion KRW, with liabilities of 9 billion KRW.

On the 7th of last month, HumanN held an extraordinary general meeting of shareholders and approved agenda items including a company name change, new internal director appointments, and additional business objectives. To expand its business scope, vaccine manufacturing and distribution, as well as pharmaceutical research and development, were added. Dmitry Kurish, a professor in the Bio Healthcare division at Skolkovo Institute of Science and Technology in Russia; Heejin Kim, CEO of Hannam Verti Development; and Guseonghak, head of Glosfer Labs, were newly appointed as directors. The company name was changed from Glosfer Labs to HumanN.