financial position of ckk

In my opinion CKK's financial position is very strong and does not give any value to IP that the company holds.

A capital raising will not be on the cards until there is a need to mass produce the drill rigs.

Here's my logic:

Cash at end of period: $8.8 million

minus $1.9M for oil & gas modification gives $6.9M cash after mods. Note: 330K has been spent on 'physical non current assets', which could be part of the $1.9M to be spent on mods.

During the quarter wages & admin were $0.94 M/quarter

Therefore we have cash to cover wages, admin and corporate for 7.3 quarters. Plenty in my opinion. Hopefully corporate could be reduced as I presume some of this was spent raising funds.

Conclusions: No capital raising until we need more drills for growth = no nasty surprises = increasing confidence = increasing sp

Now for some back of the envelop market cap analysis.

Market Cap: $22M

Cash: $9M
Debt: $3M (i'll account for notes here, im not sure of accuracy but im pretty sure its ball park)

Market cap minus (Cash - debt) equals $16M

This is not too much more than it costs to build the drill!

Conclusion: Little value put on IP held by company = small downside risk.

However the market moves in mysterious ways.

I am still confident in my investment despite the slugishness of the company. We have cash backing, confirmation that the drill works and a contract that promises work beyond completion. At some stage CKKs higher profile may even enable CLRS to get some traction. Remember a company isn't going to put something that adds complication down a multi-million dollar hole if they don't have some interest in the outcome!

I definetly think the sun is about to rise on CKK and holders will be more than handsomely rewarded.