give away prices, page-11

re: still looks expensive given risk Hi Ousia,

Your decision to sell after the CVT announcement was obviously the correct one (given the opportunity to buy back at the current price) and I agree there are larger holders who are now selling who probably are taking a similar view to yourself, that the risk is now too great.

However, there was a cross-trade of 1 million shares that went through last week at 17.5c, so that was obviously bought by someone with an opposite view.

I also agree that if the results of the silicon chip version are not clearly a success in the next 6 months then that is likely the end for AMBRI.

Obviously the path for AMBRI has not been easy, they started out to try and do it all themselves and have had to take on partners to help, so the potential returns in the long-term have been diluted. I don't have a big issue with this. Things evolve based on what is learned over time and who's to say where AMBRI might evolve to in the next 10 years.

But the fact remains that this partnership approach, with BEL so far, has worked well. What AMBRI could only have achieved through obtaining research grants, or self-funded only some many years into the future based on Sensidx profitablility, has now been done.

You are making two claims that to me seem based on information that is not available to the market.

Firstly, that the plastic cartridge was never likely to be successful. My understanding is that the results obtained with the TR plate before insertion into the cartridge where acceptable but they had a degradation at the time of insertion. To me this does not seem a lost cause at all.

Secondly, that AMBRI and BEL have some new second agreement that is disadvantageous to AMBRI. This claim seems to be coming from thin air, what evidence have you for making this claim? They have an R&D agreement, they decide what work needs doing, who is best placed to do it and share the costs. Yes, Dow Corning and Genencor are probably providing intellectual property to the 2nd generation cartridge, but surely this would have been negotiated at the start, so the notion that BEL now has some enhanced leverage over AMBRI seems fanciful to me. If there has been a renegotiation of the agreement then there would have been an announcement to the market. In fact the public statements have been the exact opposite of what you are claiming, that AMBRI is very happy with the way the collaboration has progressed. There was a review meeting recently, but this, as far as I know, was more a technical one.

Looking at the plastic cartridge, you claim that scale up was impossible and that refrigerated storage was a negative. As for scale up, the redesign and addition of the TR plate feature was, I assume, partly done to assist in manufacture (also quality control) so where does your evidence for this claim come from and what is it based on? As for refrigerated storage; this was a problem, the company have stated that 1 month refrigerated storage was achieved and this seems reasonable to me. Subsequently they have stated that room temperature storage is possible (the announcement is a bit ambiguous I admit). You seem be implying that this room temperature storage feature was not available for use by AMBRI, the announcement does not support this, nor does logic, given that they have a collaborative R&D agreement.

If the silicon based version works better then the plastic cartridge version probably does become redundant. You say that this was wasted money. I do not agree, the process of developing the SensiDx has been multi-facted and much of what was developed and learned in the process will be useful. The key to this technology is to get the production processes so refined that they can turn out nearly identical sensors in the thousands, this is the goal that has been worked on for the last year and significant progress made. The fact that the cartridge did not get the CVT results desired in the hospital evaluation is significant, but how significant is still an open question for me.

Turning to the risk going forward, I have asked the company for some idea at to the risks associated with this new path, given that they stated that the CVT results "considerably reduced" the risks going forward to commercialisation. All they were prepared to say was that as the chip format is a different design they can not be sure that it will not have some issues. As I stated in a previous post, I am reasonably confident, (but was confident with CVT being achieved as well)

Weighed against the risk are the potential benefits:
(1) Consistency of manufacture should be improved through the use standard chip manufacturing techniques; (2) The sensor will be cheaper; (3) Multi-array capability for testing a single sample; (4) Convergence with the format needs of BEL; (5) Probable improvement in sensitivity and lower variability of readings.

As for your calculations on the likely share price scenarios going forward. If AMBRI are able to show 6 functional tests on a chip format, then I think that will be impressive enough to go back to the market for more money at a reasonable price. More money has always been needed for worldwide roll-out.

You perhaps have more insight here, but contrast the technology situation now with what the situation at the last capital raising at 20c. Then they only had an instrument, a non-functional cartridge and some blue-sky (in the form of the new BEL alliance).

The critical thing is what is the competition for this technology, there are competitors but if AMBRI and BEL get the silicon version going as they expect then I believe, for the reasons above, they have a very good competitive position. You then have to balance the time to commercial release with the future sales and royalties prospects after that. To me this still seems a good prospect. I don't think the split between AMBRI and BEL in terms of consumer vs human medical professional has changed. The significant change for AMBRI is the need to take on partners to fund specific test development and I think this reduces risk more than it cuts into potential rewards for AMBRI

So finally we come to the question of wether the 6 silicon based test versions can be achieved in 6 months. I feel reasonanbly confident on this for the main reason that there will be a lot of effort put into it and that I assume the major issues are behind. I don't think anyone is desperate as you imply, just making pragmatic business decisions to change direction based on new information.

As for tax-loss selling are you talking June next year? There is alot of time for positive announcements between now and then?