IMO, the material issue here IS NOT whether they can or do announce new contracts before Xmas. The only reason why this may be relevant short term is if the contract is going to be collateral for a loan or it gives Lord comfort to hold-off on demanding payment of the note.
The material issue is the convertible note, and cash resources more generally. They had cash of $1.353 million at the end of the September quarter. They were operating cash negative in the quarter to the tune of $1.474m and they made a loss of $300k in the quarter. At a quess, I assume they need in excess of $1m in the bank to run the business, and this is probably well short of the mark given what we have seen over the past 12 months or so.
What happens if repayment is demanded on the note, and the company doesn't have the cash to pay?
If they can scrape together the cash to pay the note, then will they have any cash left to run the business let alone fund growth?
I assume D day is 1 January 2011 given this is the options expiry date.
In short, more interested in how they are going to address this issue than any contract announcements.
Disclosure: Very small holding for a capital raising
AHL Price at posting:
0.7¢ Sentiment: None Disclosure: Held
