Helix Technologies Inc. (fka HLIX)

[NobleRoman]

Helix Addresses Dilution

First, congrats on the baby girl, Hidden. Sorry for all the graffitti. Believe, I'm able to legally erase 50% of it. The rest falls through loopholes. At least, I'm going to suggest no more rif raf allowed in the conference calls. That's going to be one of my suggestions when I submit my questions.

Now, to Helix. I didn't notice an 8K filing last week.

https://www.otcmarkets.com/filing/html?id=14269030&guid=XTbFU6aQxAozZ3h

It addresses 4 dilutive notes that were up for maturity this month. I'll just post one from that filing and juxtapose it on the original note, which is similar to all 4.

The amendment states:

On July 9, 2020, Helix Technologies, Inc. (the “Company”) entered into a First Amendment to 10% Fixed Convertible Promissory Note to the note dated October 11, 2019. The amendment reduces the “guaranteed” interest rate from 10% to 9% per annum, the conversion price was reduced to the lesser of $0.11 or 70% of the average of the five lowest daily VWAPs of the Company’s common stock during the 15 consecutive trading days prior to the date on which the holder elects to convert all or part of the note and the maturity date is extended to June 26, 2021.

And that addresses this note from the last 10Q:


On October 11, 2019, the Company entered into a $450,000 Fixed Convertible Promissory Note (“Note Thirteen”) with the investor. The investor provided the Company with $427,500 in cash proceeds, which was received by the Company during the period ended December 31, 2019. The additional $22,500 was retained by the investor for due diligence and legal bills for the transaction and was recorded as a debt discount. Note Thirteen will mature on July 11, 2020 and bear interest at a rate of 10% per annum, payable by the Company in cash. The principal balance of Note Thirteen is convertible at the election of the investor, in whole or in part, at any time or from time to time, into the Company’s common stock at $0.90 per share for the first 6 months and thereafter at the lower of $0.90 per share or at 70% of the average of the five lowest daily VWAPs of the Company’s common stock during the 15 consecutive trading days prior to the date on which the investor elects to convert all or part of Note Thirteen. In conjunction with Note Thirteen, the Company issued a warrant to the investor to purchase 25,000 shares of the Company’s common stock at $1.00 per share.

It's not good, but it's better. These toxic debt holders have a good hand over us. And it won't clear out for a year as I was saying. And then this pushes some of it out a year futher.

That's bascially saying, rather than convert (which would have happened this week) and short our stock, give us some more time please and will make it worth your while. So, the holder loses nothing. He can still convert at a 70% discount. Instant 30% return to him to sell at market. And the lower the price, the greater the conversion, and hence the greater dilution.

HOWEVER, by extending it out a year, he gets a floor of .11. And so do we. In fact, I put in a limit order of .11 today for 20,000 shares. It didn't get filled yet. This confirms the good price of .11 to me. Not only did an institutional investor get a price of .11 for restricted shares last month, giving us over $1M, but this sets a nice floor for these note holders.

Now they can convert next year at .11. Which is great if the stock is $1.00 Or 50 cents. That's better than a 70% conversion. That's much better return for them. But dilutive for us, unless we can consolidate this in the extended time. And IFFF it drops below .11 before maturity next year, they still get their 70% discount. 70% below .11 is not as good as anything up there above .15. Anything at all above .15 for them is better. So, they lose nothing. Can't complain, Not great, but a lot better.

So, we have a year to get cash positive and rely on ourselves and/or get a big capital injection at much better terms and consolidate all of that debt as I see it.

The other 3 amendments are basically the same as the above. And we got a little reduction in interest too, which is nice in and of itself.

So, I'm going to buy at .11 and have the same price as the accredited investors that are restrictged, and this nice conversion price that is set in stone if the stock is over .15. Anything less, they can revert back to their old formula, but I'm sure they'd rather take a wait and see approach since it's better to convert at .11 on a higher price. The higher the price, the better the return for them. Now there is some better alignment of interests. They lose nothing, and stand to gain everything. I like that deal! Good for all parties. I'd rather be the note holders, but .11 works too! I might just throw inthe towel and just go for .12 tomorrow. We'll see. What the heck.