Cash flow positive this year? Oh yeah.....From the Prospectus...

Cash flow positive this year? Oh yeah.....

From the Prospectus Risk Section:

5.1 Working capital Eden’s expenses currently exceed the income which is being generated by its US and Indian subsidiaries from sales of EdenCrete®, EdenCrete®Pz, EdenCrete®Pz7 and OptiBlend®. The funds which are being raised under this Prospectus will be augmented by ongoing sales funds which will be received by Eden’s subsidiaries.

The Company’s US subsidiary has borrowed US $5.8 million from iBorrow REIT (“iBorrow Loan”), the term of which expires on 7 August 2024. The iBorrow Loan is secured by all three of the Company’s US subsidiary’s commercial properties in the USA and is guaranteed by the Company.

The Company’s US subsidiary has been endeavouring to sell, for the past two years, its 65-acre industrial property in Augusta, Georgia, USA. The Company expects that, if this property is sold, the net proceeds of sale will extinguish a significant portion of the iBorrow Loan. There is a significant risk that this property will not be sold prior to 7 August 2024. Furthermore, there is a risk that the Company may not be able to extend, refinance or otherwise meet the obligations of the settlement of the iBorrow loan. If that risk transpires, iBorrow may institute enforcement action under the iBorrow Loan agreement, including taking steps to sell all three of the Company’s US subsidiary’s industrial properties in the USA and pursuing the Company under its guarantee.

The Company has also borrowed $3,817,979 (as at 31 May 2024) from Noble (“Noble Loan”). The Noble Loan is unsecured and at call. There is a risk that Noble may call on its loan.

The Company is seeking to raise sufficient funds pursuant to this Rights Issue, which assuming it is fully subscribed, the Augusta, Georgia property is sold and the net proceeds of sale reduce or extinguish a significant portion of the amount owing under the iBorrow Loan before it matures, and sales revenue remains at current levels, would cover approximately 6 months of working capital requirements.

However, even if these assumptions are achieved, unless sales increase sufficiently above current levels, the Company is unlikely to be able to achieve financial self-sufficiency prior to this capital being exhausted. The Company is therefore likely to have to raise further capital or borrow further funds prior to this capital being exhausted, and/or sell one of its other two US properties which are located in Littleton, Colorado.

If the Rights Issue is not fully subscribed, or if the Company needs to repay any amounts owing under the iBorrow Loan or Noble Loan, the Company will have to raise further capital before the expiration of the 6month period referred to above.