re: is it going to go under Not likely to be going under... yet....

re: is it going to go under Not likely to be going under... yet. With reduced cash burn they should have enough funding for at least 12 months. But the clock is now ticking, they only have this much time to:

* Get some sales! Real, paid sales, not just stock sent to distributors

Without that they won't be able to achieve the next hurdle:

*convince a manufacturer to invest the tens of $millions required to build a plant to make the stuff for them

Even if they can achieve both of these, it's going to take more than 12 months for a new plant to be constructed and come on line.

They are unlikely to be self funding from their own plant until that happens.

It has now been revealed that they are getting $35 per litre from the distributors, so with a nameplate output of 360,000 litres a year they could get a maximum of $12.6mil revenue per year. IF they are able to produce at nameplate capacity AND sell 100% of that output.

With the new structure, staff cost likely to be about $5 mil, interest on the bonds at $5.1mil, other admin/running costs likely to be at least $2mil. So there's the revenue all gone already, and we haven't even deducted the cost of the raw materials yet, which they have not disclosed.

Also without sales, they are very unlikely to be able to raise more funds to tide them over until any other manufacturing capability comes on line. With the bondholders having secured the assets and able to demand their $60mil back in March 2008, any money raised between now and then is at risk of being spirited away to those bondholders and not for the ultimate benefit of shareholders. The assets being secured means that all avenues of raising debt finance are now closed.

With all these issues, I'm just amazed how many people are stepping up and buying shares at 25c!