I think the REAL issue with this fund raising is it won't be the last and CFU know it, yet they talk of "cash will last all of this year" as if it won't need any more cash 6-7 months down the line! As I said in previous posts, the burn rate is far too high for the performance of the company and there are far too many staff, even for the level of production CFU will have even in 18 months time.
CFU say "The Company expects that, with the addition of these funds, it will have sufficient working capital to meet its needs through to the end of calendar year 2013."
On 31 March 2013 they had cash of £2,458,535. Add the £5m placing Add tax rebate of £3.3m Total £10,758,535
Current cash burn rate is £8,541,465 in 6 months (March quarterly report).
£1,423,577.5 burnt per month
£10,758,535 will therefore last 7.5 months
But as with this and the last fund raising, they will need to raise cash at least 2-3 months before they run out, so the next fund raising can be expected in just 5 months time! .. 5 MONTHS TIME!!
I expect to see the same fun and games for holders around 2 October 2013!
From and including: Friday, May 3, 2013 To and including: Wednesday, October 2, 2013 It is 153 days from the start date to the end date, end date included. Or 5 months including the end date
I suggest you all go back through the past 5 years of RNS and see how many times you can spot the same bullish statements as below from CFU, that have not yet transpired into the blue sky they promised, then figure on another £5m fund raising in 5 months time on the same basis as today's. By the time CFU reaches break-even(supposing they do in mid-2016) it will have run up debt of £50m which will take at least another 5 years to pay back from the profits.
"Having proved the commercialisation of our technology we are now rapidly moving towards a major increase in the volumes sold by the Company. This fund raise will allow us to meet the working capital requirements of the initial phase of this ramp up and the Board considers that it would be in the best interests of shareholders to raise these funds in this manner to allow the Company to take advantage of these opportunities."
CFU Price at posting:
4.5¢ Sentiment: ST Sell Disclosure: Not Held
