It will be interesting to see the final result of the capital...

It will be interesting to see the final result of the capital raising.

Seems like they have Kazacos and Walker already committed to the rights issue - which with their combined approx 30% ownership gives AYG at least between $1.7-$1.8m cash just through those two.

The other $1.3m or so from Walker gets them up to $3m cash injection.

I am a little dubious as to much else being raised - simply that a lot of the other shareholders won't take up rights at $0.007 when it seems most shares are recently changing hands at $0.006 on market. But that probably does not matter too much anyway with the $3m supposedly raised already.

The $3m co-incidentally ties in with what Kazacos loaned to AYG in recent months - however can't see them paying off that loan until they have enough to cover working capital for a while. Kazacos may just have to too wait.

Certainly strengthens current position for AYG and reduces risk of going down the gurglar in the short term. Gives them enough time to work out if it is simply cyclical business conditions that have caused the problems, or whether the business model just doesn't work. That is a luxury that a lot of companies do not have - being bankrolled in this fashion.

The more concerning thing is the continued cashflow performance. Operating at $3.3m cashflow deficit for the third quarter is not great (see quarterly cashflow report released 2 May).

Until there is sustained positive cashflow performance, everything else that happens within the company from raising capital, buying business's etc could be irrelevant from a share price perspective.

Raising cash is great in delaying the liklihood of the company bust - but they are 12 months into the model and are not making money. I am all for strategic plans and promoting organic growth and all the other groovy things executives like to spruik - however more than anything I want to see a business that operates cashflow positively.

If you cannot deliver that, then you are simply buying time until you voluntarily go into administration or a creditor puts you there.

They have had 12 months, I think realistically there is another 12 months left to guage whether the AYG business model actually stands up in the current difficult business environment. In particular the next quarterly cashflow report needs to be positive (July release) otherwise I think they will have left their run too late.