baptism of fire

Once again the "Smart State" proves it is anything but smart.

So how is CXY going to navigate itself out of this mess? The best description comes from the prospectus lodged on 1/9.

From Section 6.1 p11

- $1.3 million in cash at bank. This does not include cash deposits pledged as security for bank guarantee and credit card facilities.

- end of September 2010 will have approximately $135,000 left in the bank.

- the Company has estimated that the Kingaroy project will remain on care and maintenance for approximately three months.

- During this period, the Company predicts a funding requirement of approximately $1,325,000.

- the Company has access to finance under the YA Facility .... funds are made available to the Company in exchange for the Company issuing new Shares.

- The YA Facility is conditional and there are several specified circumstances ... which constitute events of default. Should such an event occur, YA may elect to withhold funding and/or terminate the YA Facility where any event (or series of events) occurs which ... is likely to have a material adverse effect on the Company's ability to carry on its business as it is currently being conducted, or on the Company's business, assets, value, operations, prospects or financial or other condition, ..... where the Companys Shares are subject to further suspension from trading on the ASX for five days or more in aggregate; Furthermore, in the event that the Companys Shares trade below .... (presently AUD 0.03) at any time during a pricing period, the amount of funding available can be reduced at the election of YA. There is the potential that the funding available under a particular advance notice could be reduced to zero.

[Translation: YA Facility will probably not deliver]

- However, the Company is looking to access additional funding from other sources.

- The Company will initially seek to undertake a placement of new Shares to the value of approximately $500,000 to $600,000 in September 2010 and a share purchase plan offering to shareholders in October 2010.

- If, for whatever reason, adequate funding is not able to be accessed, the Company will not be able to operate as a going concern and the Company may need to be placed into voluntary administration.