Ann: Metgasco to acquire renewable hydrogen production technology, page-26

Stage 1
Metgasco will provide Patriot with certain logistical and financial support , (including a modest secured working capital facility)

I find it strange that they did not quantify the value of this "financial support", even if it is "modest". How much is "modest"? Logistical support can also cost big money, especially in today's post-Covid environment. This is new, unproven technology with considerable execution risk. If Patriot's gassifier proves to be financially unviable, we're on the hook for all of stage one's unquantified logistical and financial costs, and stage two's cost ($750k). Leaving stage one costs unquantified is not an ideal outcome IMHO.

a valuation of $5.9m (net of stage one and two financial investments)

What does "net" mean in this case? To me it means $5.9m after deducting stage one and two costs, and if that is the case the total cost is unknown because stage one costs are currently unquantified, but it will be more than $6.65m. Hopefully I'm reading that wrong though, and it's $5.9m in total costs.

One other concern I have is that this is a sell-out by private equity. That's a huge red flag to me because they almost always sell out for a reason, more than often to lump the purchaser with a lemon (Myer and Qantas are great examples). Furthermore, why would any company, let alone private equity, sell out right before they get there first product up and running? If they had confidence in the technology, one would think they'd commission their first gassifier, prove its commercial viability, and then sell the now-derisked company at a higher valuation. Selling out that this stage of development is another red flag IMH.

KCE has signed an MOU with Patriot Hydrogen for 75 Patriot Units

75 units sounds great, but this is just an MOU, so if you place any confidence in this MOU becoming binding then I have a bridge to sell you. In particular, MOUs in the hydrogen space are worth about as much as a roll of toilet paper, IMHO.

Admittedly, the last 10 years of BS I've experienced on the ASX have encouraged me to take a "glass half empty" approach to these types of transactions. On the plus side, I'll give credit to MEL for limiting the downside risk with appropriate Stage three conditions precedent, and MEL management are a cut above the rest, in general, so I have some confidence they've done their homework.