sp .003 , smart move vic, page-6

The consolidation needs to happen.. in fact the stock will struggle without it happening as there won't be sufficient turnover of shares (in terms of value).

Let me try to explain.

With 7.2B shares on issue:
- @ $0.003, MSC has a market cap of $21.6m.
- @ $0.004, MSC has a market cap of $28.8m.
- @ $0.005, MSC has a market cap of $36.0m.

Now this is too much of a change in value to be buying and selling. To have proper liquidity people need to be happy to buy and sell. Someone who is happy to pay a value of $23m, is not going to buy at $0.004 which implies a value of $29m. Likewise, someone who is happy to sell at $24m, is probably not going to sell at $0.003 as this only implies a value of $21.6m. There is no way for these buyers and sellers to transact without not being happy.

With a 1 for 50 consolidation the market capitalisation SHOULD NOT change. (I emphasise should not, but often it does slightly change).

At 1 for 50 consolidation and 144m shares on issue (assuming there was exactly 7.2B pre-consolidation), the shares should have a value of $0.15.

Now at this level of shares, the market cap of MSC is:
- @ $0.145 = $20.88m
- @ $0.150 = $21.60m
- @ $0.155 = $22.32m

There is going to be a lot more liquidity/trading at this level which enables the traders/shareholders to move through the shares, hopefully allowing MSC to eventually settle at higher levels.

Announcements then should have an impact on the stock, so as you are only asking for a c.3% change in value rather than c.33% change in value at the current level.

I have said it before, but larger share price increases will only come once MSC starts delivering actual cashflow.

There is still significant confusion as to what rights MSC actually have. As I understand it MSC is not really selling much (if any) product at the moment. There is product being sold, but I think it is being sold by Descrete. This does prove that the product works and people are buying it.

MSC appear to have rights to the technology in a 50/50 JV vehicle (with Descrete) for the commercial use of the product in certain countries (appears to have huge market sizes in those countries). Now MSC needs to generate some real sales and cashflow. Given the commercial sensitivities around announcing product sales and values, I don't expect MSC to reveal too much information about particular sales. There would be significant commercial value to MSC in not revealing pricing information to customers based on what other customers are paying.

Sales then need to turn into profits. There has always been a question over the profitability of mining at Skardon River, however it is not clear how much, if any, Skardon River Kaolin is required in the Descrete Green Cement product. Ultimately it doesn't really matter if there is none... so long as MSC is able to make money.

Without a float of ACC I think MSC holders will need to wait 6, but probably 12 months, before getting some decent information on progress. A float of ACC may prove value of the business and therefore increase MSC shareprice if ACC is floated at a value greater than the market currently attributes its value.

Cheers
Marvin