Ann: March 2014 NEWSLETTER , page-23

Interesting & powerfully phrased read.

Re Cash Flow/Raising. Operational outflow in 2013 was $12.9 million, adding back Government Grants (see Accounts, Cashflow Note). During 2014, according to the Newsletter, POH expect to have $15.8 million available:-

'At the end of December 2013 the Company held $8.8 million in cash and cash equivalents.With the federal R&D tax rebates and the continuing recovery of misappropriated funds,Phosphagenics expects to receive over
$7 million in 2014.'

So they expect to have very little more than enough cash to see them into 2015, at 2013 rate of expenditure. No company can go that close to the wire. So a cash generation seems essential before the end of Q3.

This may come through a commercial deal:-

'Our Board will focus on re-building the Company’s credibility, moving the Company toward a significant licensing deal and growing the Company’s cash flow by
pushing more resources into revenue growth.' The emphasis on discussions with US pharma across a number of programs for short/medium term revenue opportunities is also striking.

Given the tight timescales, however, the odds must be on a fundraising to tide them over. Is that a huge negative?Over the longer term a successful breakout would deliver large returns. Pity about dilution, but there we are.

In his summary, as in the Accounts, Rosen sounds the clarion:-

'We look forward – with renewed determination,
excitement and focus – to a successful 2014.'

One thing is sure. We'll finallyl know by the end of this year whether it's a flyer or a dog.