Cool Technologies Inc (WARM)

[kayak_wench]

If this gets down to 0.06 or lower I might have to pick up a few more shares. It is possible if they need to raise cash that it could take a pretty good dip in the next month or two. That is if there isn't new news in the meantime. At some point the news of the recent agreement will take hold, but it hasn't yet. Maybe it won't be until they get dollars in hand. Perhaps the market doesn't believe there will be any follow through. If there had just been a PR I would be suspicious, but the 8-K which detailed the specifics with dates and costs changes that. Plus this is the first purchase from someone other than an insider. Craftsmen CEO joined the board before buying his 10. The specified deliver dates worked into the schedule means they have to follow through (unlike any of the previous orders). Craftsmen Ind. was named one of the sites that will be building these trucks so their investment/participation looks to be paying off for him.

The only way this fails is if the product doesn't perform. But CoolTech has many people on the board heavily invested who were responsible for bring Ford trucks to market. They understand the need to have a fully developed product before putting it in the market. I believe that is why we still don't have a completed product. I think these board members have kept Hassett from calling any truck to date done (even though I think Hassett himself thought it was good enough...referring to work truck show 2014).

On a side note the revenue stream noted of 17 to 22 million seems high. That is about 72k per MG kit. That doesn't sound like competitive costs compared to tow behinds from what I can see on the web.

Back of the envelope calculations puts the revenue stream as described with 25 units per month at about $5.5 million per quarter. At best I think CoolTech would see a third of that as income or 1.8 million (but I'm making that up..I have no idea). So with more sales they will have to figure out how to increase production. Hopefully that becomes a problem they have to solve soon.

Such a large order with deliver spread over 10 months good thing. It allows them to build a backlog of orders that will justify their scaling up production. It also allows them to easily product a few one-offs for private purchases of orders of 5 or fewer kits. They don't want to invest in the production capability beyond 25 per month without additional large orders. Thankfully they have people involved that have worked the high production arena. Knowing they should have income of about 5 million (hopefully this is a conservative estimate) from April for the next year should stabilize price. Even assuming they dilute to 200 million shares that is a nice PE from where we sit today.

I personally be watching for a sign that they are doing a BellRidge cash raid and be looking for a dip. But for me it will have to be much closer to 0.06. That is the current price that BellRidge will buy so I'm guessing barring some other source of dilution that will be a reasonable floor to shoot for.