9year low..., page-48

Neo - you ask a good question. I really don't think much of the IP- but that is definitely a subjective assessment.

So this is how I see the financial situation.

I'm really thinking a cap raise will have to happen in the next twelve months. The last cap raise less than two years ago was done with cash at about $30m, and they raised $80m or so.

Net cash is probably currently about $43m incl NQ and the finance lease. Total cash about $75m. Probably there will be current liabs of $6m or so at any one time.

Monthly cashflow is about -$10 pq or so after gov rebates etc. So about 12months until net cash is zero at this rate, and we probably don't want to get to $0 net cash.

What are Novaquest's covenants or requirements? Even if they are expecting a 20% return? We don't know - but you need to factor something in. It would not be silly to assume there will be a minimum cash holding pre-requisite at least as a trigger for some event. I have fears that NQ funding is quite a desperate move, as the cost of the finance is likely quite punitive. What would you charge somebody for that deal if it was your money? 20%?

PXS spends $6m pq before any R and D is allowed for. That looks terrible to me. Management could be perceived as being ill-disciplined with investor's cash by some.

I think management will be looking at the next binary event with some trepidation, and might even raise capital before that. However I think they will feel it wise to reduce the cashburn somewhat to get an underwriter interested in a cap raise with favourable terms and conditions.

Otherwise they might take a punt on the FDA outcome? What might be the outcome of low net cash, high quarterly costs, covenants on funding, and no US market?

So this really really is a spec and a punt. The revenues are immaterial at this stage. Hopefully things go PXS's way.