Hmm, interesting, but if it was because of me I apparently did not describe my concern well or they didn't read my post well, or they are trying to pull a Jedi mind trick on us.
I understand that CoolTech is the one who decides when and how much money to request from BellRidge. So CoolTech says "Yo, Bellridge I need $100k." tomorrow. BellRidge says "here you go". At that point BellRidge can choose to get back that $100k they gave CoolTech by selling shares. It is solely up to them. But before the updated S-1 they could not make that request unless the stock prices was at least 0.06 cents.
So with respect to their blog, I completely agree with the first two sentences below, but the third sentence is horse stuff. Their decision to remove the 0.06 floor is a meaningful financial event. That is why they legally had to resubmit the altered S-1.
"Bellridge has no call right. It has no power to convert on its own. And there is no obligation for us to even use the ELOC. The obligation resides solely with Bellridge to issue funds when we provide a drawdown notice.Therefore, the recent amendment of the ELOC stock purchase agreement removing the threshold conversion floor of $0.06 per share has no impact."
If they have decided it will NEVER be in there best interest, and they will NEVER use it when the subsequent sell off that Bellridge may chose to do could push the stock below the $0.06 floor than they wouldn't of wasted the time, resources, and resulting negative perception to investors to remove it. I can't see any conclusion other than they have decided it will, or could become in their best interest to request funds from Bellridge when the stock is near or below 0.06.
That said I also agree with the statement they follow up with in the blog, "If and when we use the ELOC, it will be when the stock is at a price that makes financial sense for us to issue a drawdown notice. We have no interest in diluting shares without benefitting the company nor enabling anyone to drive the price of our stock down."
If they have/discover a problem with their product that prevents them from completing it by the 60 day deadline and they will need $$ to try to address the problem. Rather than waste time running around looking for more investors who will likely drive a very hard bargain and while the 60 day clock is ticking, they will turn to Bellridge, request the money even if it it means Bellridge at that point can decide to sell shares to cover the $$ provided to CoolTech. Because to fulfill a short-term need for $$ to meet a deadline associated with a potentially multi-million deal makes "financial sense" and that dilution will "benefit the company".
So in my opinion the jest of their blog post is to say "we are not crooks, nor are we stupid, and we going to make the best financial decisions we can to ensure the financial success of this company".
Well, shoot I knew that (BTW, saying they aren't stupid isn't the same as saying they haven't made mistakes and shown poor judgement, and saying they are not crooks is not the same as saying they don't mislead and withhold information).
What I don't know is why did they decide they needed to remove the floor? I also don't know the status of their upgrade and whether they have the funds needed to complete it or they are still short of dollars.
I also now fear they still haven't gotten that money they could need which resulted in their decision to remove the floor. So while I was starting to breath a bit easier with the decreased downward pressure on the stock, now I am back to thinking another shoe is going to drop in the next month or so.
I am editing this after the original post. Making it long, but wanted this thought in with the other thoughts. If they do need funds to complete their products within the 60 day deadline, then removing the 0.06 limit is the right decision. If they ultimately get the product to market the drop in price is not a big deal. For those considering starting a small investment (I'm not suggesting anyone should average down) what looks like a likely sell off in the next month would be a good time to consider it. The possible pay off being this latest contract is the closest the company has ever been to seeing real revenue.
