capital raising: we saw it coming and want it, page-8

CFU management have continued to move forward and strengthen their position. But I don't think anyone would say they are in the position they expected, as I suspect their Melbourne facility was able to meet the current demand of Gennex fuel cells. Their German facility, which my mate commissioned has not been utilised to the level you would have expected.

At the end of 2008 they said they need to sell about 3,000 units to break even and expected to be doing that by end of 2010. We have missed that by 12 months. And i think its going to be at least another 6 before we can even entertain the idea that they will have their heads above water

Not trying to rain on anyone's parade. But I already have waaaay too many shares in this speculative company to just cough up more money at this SP...so considering that the book is about to close on 2012 its time for a major re-think on my behalf.

BlueGen
So an MOU is just that. Its not a firm contract for Jabil to be making these units. So it will probably be another 6 months before orders are large enough to warrant that scale of contract manufacture and Jabil have tooled up and qualified their process. This is the big thing. To qualify and commission their assembly will take a set period of time and until I hear that this milestone has been achieved I think this is a work in progress thing. That means BlueGen is still going to be a low volume thing for the near future

But thats ok. CFU make Gennex Fuel Cells, not BlueGen units. Their factory is ready to make Gennex units, all they need is capital for material and orders.

So how are their orders going?

1) Nothing from Eon. Depite being one of their oldest partners, they are only a few months away from losing the rights they acquired by funding development of the fully integrated mCHP. Thats assuming talk of 2012 means early 2012. It could be late 2012, it has never been accurately defined. The last I read Eon were due to deploy two units for trial in the UK around about now. Still no announcement that it has happened. In the past Eon have trialled units for 12-24 months. So not sure this is going to see developments anytime soon. It makes me think by 2012 they mean late 2012.

2) Nothing from Paloma in Japan who have been evaluating the mCHP systems for the Japanese market since Jan 2008. Yet Panasonic with their more expensive units and other technology mCHP seem to be meeting the market and CFU unable to penetrate.

3) Since mid 2009 they have been developing the mCHP with GDF Suez in France and no news on this front some 27 months on. We were told that the unit would have CE approval by Sep 2011 yet we have heard nothing, so I can only assume they have problems with either performance, accreditation or the relationship. Otherwise we would have had a reminder that this is on the cusp of happening.

4) EWE have come to the party with a conditional sale of 200 units. Only they didn't spring their own money on this...rather it was all German Govt money so it shows they are still aways from committing with their own money/strategy. Early next year we will hear about the performance of the original batch and perhaps the remainder of the 200 order will be installed. But again, if the trial units under test are not going to be completely installed until end of 2012 you can only hazard a guess when CFU could see volume orders from EWE.

What is not clear to me is whether all integrated mCHP units require CE approval? If so that means that based on the EWE order only those made in partnership with Bruns Heiztechni in Germany have CE approval. Since UK and France have not even got CE approval or put them into field trials...well. What is the timeline.

Please feel free to shoot holes in my thinking...personally I am at a bit of a loss why they need 30 million if things are about to roll ahead. Especially since they only need to sell 3,000units to break even...yet are claiming they will have orders for 1,000 BlueGen units by end of the year?!?!?!