Let's see, where do I even begin. Let me address your points one by one.
The owners of most startups are likely going to be selling Private Placements to raise capital and to make a profit. This is true. Owners need capital to build the business. But Breathtec, according to their most recently released financial statements as at May 31, 2016 (link), had $1.89M cash on hand. This would appear to me to be ample capital for the company's medium-term goals. Why would a responsible Board of Directors (BOD) that is looking out for the shareholder's interests issue 14.5M new shares and warrants at the all time lowest share price of the company's short trading history to raise an additional $1.09M? And let's say for argument's sake that they needed the additional capital. Why was the PP announced Oct 18, after the shares collapsed from mid-September's high of C$0.30 to October's low of ~C$0.10 (see YTD chart chart)? Why announce a new financing at the lowest point in the company's short trading history unless you are in dire need for cash (clearly not the case here)? Also, why restrict that financing only to a select few individuals unless you are trying to help out your inner circle get cheap shares so they can dump it on the open market after 4 months to the poor retail investors that are led to believe a pipe dream about the future of the company? I contacted management directly and asked to participate and was told one day after it was announced that the PP was all placed and it was done to bring in a group that will add a lot of value. Well, looking at the group that received an allocation in the PP (List of investors in November BTH PP), it isn't entirely clear which group will add a lot of value. Perhaps it's "UTAH MINERAL RESOURCES LLC" who took down 1M shares or maybe it is "HOMSI, Yazan" of Saudi Ariabia who took down 215K shares? The rest all look like friends and family of management that live in the greater Vancouver area and represent fast money that will likely flip penny stocks on the TSX Venture or CSE for a quick profit. I don't believe for a second that the shares (and warrants) bought in this latest PP won't be sold quickly even with a meager 10 cent fluctuation in the share price. Even if you assume they needed the capital, a company with proper governance would have declared a PP at a price closer to where it was trading then, say 10 or 12 cents and open it up to interested parties that were negatively impacted by the selloff. My personal suspicion is that it was leaked to key friends and family that a PP was coming and those parties dumped their shares thereby causing the massive drop (from 21 cents to 12 cents) on Oct 7 with 4.6M shares traded knowing full well that they could buy the same shares a few weeks later at a hugely discounted price of 7.5 cents that ordinary investors could not participate in.
1. Pro: raises lots of capital very quickly. Clearly this is true. But see my comments above regarding doing so in a responsible manner where the interests of existing shareholders are top of mind. If the company needs funds, what you need to do is lay out your case for why you need the funds and investors have the opportunity to buy in to support the cause. It's all about good corporate governance. Breathtec doesn't have it and with the number of shares held by insiders, I doubt it will have good governance any time soon. Unfortunately the unsuspecting retail investor will lose out.
2. Pro: puts a significant amount of stock with those having a vested interest. This too is true. I was encouraged to see Guy LaTorre participate in this PP. And for what it's worth, I have a lot of respect for Guy LaTorre and what he has done with the operating side of the company since he has come on board. He is the right person for the CEO role. However, I don't believe the financing was done with the shareholder's interest in mind. Those that had the opportunity to participate have very little risk if any. They all now have shares with an ACB of 7.5 cents. How strong is that temptation to sell at 100% gain in 4 months when the shares are at 15 cents given that a commercial product is years away. Besides, they can just buy more shares on the next PP that the company announces to friends and family only.
3. Pro: stabilize stock price. This is wrong - it will not be the case with the group of investors that participated in the latest PP. What management should have done is have some long term biomedical funds invest. That would have stabilized the share price because those investors don't care about a double or triple. They want to hold for 5 years and get a 10 bagger. The group that bought the PP see this as a way to make a fast buck. Watch the share price around the end of March and then tell me how much the PP has stabilized the price. Also, with the 15 cent warrants, the overhang will persist on any price advance above that level.
With the above said, I am surprised that anyone is putting money into BLO / BLOZF (which has the same individual at the top and same style of operating as BTH / BTHCF).
Look, I am not trying to bash the shares. As I have said before, I own BTH at much higher prices than the current level. I simply refuse to play management's game and have my money support the price so management's friends and family can sell their paper at higher prices. I am disappointed and frankly disgusted with how the company has been run. I'm still looking for where to lodge a formal complaint.
Ok this has become a bit of a rant and for that I apologize. Like AMG said, we are all entitled to our opinions. I have given you mine.