Compensated Awareness Post View
Disclaimer
GLUC CEO RESPONSE: Convertible Notes
1) First, the last Convertible Note issued by GLUC was April 1, 2016. Since that date, GLUC has utilized non-convertible (non-equity) straight interest Notes (largely to fund inventory). The reason is that, unlike most OTCPK/QB companies, GLUC has generated real cash flow to fund its operations.
2) There is currently $159,220 in principal outstanding on Convertible Notes issued April 1, 2016 and prior (excluding CEO related party Notes, as reported on most recent 10-Q Balance Sheet). 86% of this total…$138,249…stems from Convertible Notes issued by the old BISU in fiscal 2014 and prior years. However, regardless of when issued and whether by BISU or GLUC, the fact is EVERY Convertible Note issued (a) provided the investor in the Convertible Note only a small discount to the trading market when issued and (b) was unequivocally and categorically not "toxic" (financing). Here is the proof of both these two assertions:
a. Below are the unadjusted high/low stock prices for BISU from OTCMarkets.com for fiscal 2014.
2014 Qtr 1
HIGH 0.044
LOW 0.018
2014 Qtr 2
HIGH 0.025
LOW 0.0081
2014 Qtr 3
HIGH 0.023
LOW 0.0055
2014 Qtr 4
HIGH 0.18
LOW 0.003
b. The data above proves the Convertible Notes in question on this IHUB Board were priced at a (very) small discount to the High/Low stock prices traders were buying and selling BISU for in the market, when issued.
c. All Convertible Notes issued by BISU (or GLUC) have "fixed" conversion prices (vs. conversion prices "floating" on a percentage discount to the trading market - which is "toxic" financing because it provides the investor with downside protection in the form ever greater amounts stock issued on each conversion should trading prices decline - which generates a derivative liability on a Balance Sheet - which is every investor's warning sign of "toxic" financing). Because the Convertible Notes in question on this Board were issued with "fixed" conversion prices, the investor who invested the capital in return for these Convertible Notes was "at risk" of loss (perhaps total loss) if the business prospects and/or market liquidity for BISU deteriorated. Again, for emphasis - the investor in the Convertible Notes faced the same risks any regular market trader faced. In fact, its questionable this investor in these Convertible Notes received any benefit at all (let alone a "toxic" financing!) over regular traders for his capital injection to BISU because of (a) the small discount to prevailing market prices, (b) the legal fees, (c) the brokerage deposit fees, (d) the clearing fees, (e) the transfer agent fees, and (f) the 6/12-month holding period; (b) through (f) all associated with the restricted stock inherent in a Convertible Note investment.
3) As mentioned, since April 2016, GLUC has utilized interest-only financing...and this financing in two cases has been negotiated by GLUC on extraordinarily favorable terms. The proof of this assertion is as follows:
a. GLUC's financing arrangement with CITIBANK which provides 1-week payment on GLUC invoices at a discount rate (an interest rate based upon small LIBOR premium) comparable, or better, than New York Stock Exchange (NYSE) listed companies could negotiate.
b. GLUC's recently announced Revolving Line of Credit which provides non-convertible straight 10% interest financing for inventory.
4) Lastly, it is important for all shareholders and potential investors in GLUC to know it is a top priority for GLUC to reduce all liabilities, including Convertible Notes. And more importantly than good intentions, GLUC has made clear progress as proven by 10-Qs/10-Ks. Accounts Payable has declined substantially since current CEO took over. Various interest-only Notes have been paid in full and just under $20,000 in the Convertible Notes in question on this Board, has been retired.
