brainytoys teetering on the edge

Brainytoys teetering on the edge
27-October-08 by Rebecca Lawson


O'Connor-based Brainytoys Ltd is teetering on the brink of collapse with the stock's September quarterly in the red as a capital injection deadline looms.

The company today reported a net operating cash flow loss of $88,000 while total operating and investing cash flows were at a loss of $1.15 million.

Cash at the end of the September was at minus $61,000.

Last week the company advised that it had been progressing arrangements for a "significant" capital raising either through US sources, which includes a $US4 million mezzanine loan from Blackwater Capital Partners, or by Pitt Capital Partners in Australia.

Brainytoys said if the capital raising falls through and asset sales sold for a satisfactory value are not concluded by November 14, the directors expect to appoint a voluntary administrator.

The November 14 deadline is also the settlement date for Brainytoys $US4.5 million acquisition of US company Marshmallow Fun Assets.