msc future, page-10

re: independent valuation It's never been about the valuation of MSC.
It's whether they will continue as a going concern.

The equipment and goodwill are worth very little if receivers are called in. And the fire sale funds will go to employees and note holders. Ordinary shareholders are well down the list and I believe would recieve nothing if wound up.

Now, can they continue?
MSC is certainly walking the a tight line. I worked out a cash burn rate of about $1.5M/month based on expenditures for employees, purchases and financial charges.
So let's look at two scenarios:
One full participation = $7M in funds less charges
let's say $6.5M available, less $3M to pay notes, leaves $3.5M to pay the bills, that's 2.5 months of operations to generate cash flow break even. Can they do it?

2nd situation is much worse: underwritten plus marginal participation from shareholders reaping say $4M less costs, or $3.5M available. That pays off the notes, leaving pocket money to run the company.

Now then, we still have the cornell facility of $8M which would be taken for shares at a discounted rate.

This must be considered thier last ditch saving mechanism as it would dilute the company so greatly as to make it impossible to continue because when activated the share price will not be anywhere near the paltry 1 cent it is today. Therefore we will not be diluted by 100%, but more like 200% dilution, meaning we'll own only one third what we own today.

On the positive side, Yes, if they can get some money flowing into the confers, and continue to do that, then maybe the company could be worth the sort of money shown in the Hall Chadwicks valuation.

IN the meanwhile we are gambling on losing the lot.
What I would like explained is how come they booked less money on product sales this last year then in 2005! I thought sales were increasing?

Comments?