well we have a month to decide! the interesting point is that...

well we have a month to decide! the interesting point is that the share price has gone down which tends to indicate that there arent alot of people on the sideline interested in buying ahead of the 9th to get in on the 1 for 4 at 10.8 cents offer.

I do understand the concerns expressed by those who see this as simply a ploy to keep the doors open so management and and the director can count on some cash for another year. I am not that cynical! Time will tell if you are right or not. I personally get the sense that things are moving in the direction of larger orders and the company is making sure it can cope with such a development.

A lack of financial and manufacturing capacity to handle large orders is a major obstacle to securing a big order from a large properly run company. Big businesses are happy to dabble in R&D etc, but when it comes to hitching the wagon to something new, the risk management boffins are all over it. A small unproven company with limited capital is very unlikely to win a billion dollar deal from anyone.

If E.on were to commit to 100,000 units over 6 years, at present prices, the deal would be about $4,000,000,000. CFU has been aiming for a unit price around $8,000. If they achieve this, such a deal would be worth $800,000,000. I am not saying E.on are on-board or ever will be on-board. But, in the context to that sort of deal, CFU is a minnow, and until the announcements of the last week, there must have been serious questions about whether it really had the financial and manufacturing capacity to turn out more than 10,000 units a year or say 1,000 units per month.

For what it is worth, if I were a large utility looking at placing an order that would underpin the success of CFU, I would do a collateral deal. I would insist on 15% of the company at say 10-12 cents. It would have two effects. It would provide them with the working capital to meet my orders and give me a good share of the upside.

Maybe a potential customer is one the the sophisticated investors in the UK. Who knows?