cmq cashed up, page-2

It is cash but with major strings attached.

- Interest of 8.5%p.a to be paid quarterly.

- Significant shareholder dilution if conversion from bonds->shares takes place.

- Chemeq must confirm orders of 40,000 litres of product by 30 September 2005 or pay the money back.

- Unconditional APVMA licence by 31st May 2005 or pay the money back.

- Successful commercial scale trials by 31st May 2005.

- Approval in Australia by 30th April 2006.

The company has never stated how many kg or litres the 'South African' order is for. This makes it difficult to be sure, but my guess is $1.5M order value = 1.5tonnes of product.

This gives them 30,000 litres.

There is an Australian company interested in buying but it looks like they'll need to wait for the Australian approval that is to come in 2006 - making it unlikely for the product to be presold to them by September.

It would appear on this very sketchy analysis that selling 40,000 litres of the product is an issue, but not a major hurdle.

So the question is, can they get their plant be approved by 31st May? Should be an interesting couple of months for shareholders.


I don't hold, but watch diligently,

Joel