FMK. Yes, I am sure there are additional sources of capital (and I am sure that Shaar Fund would love to get its paw in the game), but from reading the 8-k you must come back with the impression at least that all these "available" sources are of the "floorless" kind, not straight debt or equity, otherwise, the provisions for granting CC the same "discounts" and "conversion provisions" as any future lender would not be in place, the document would have simply called for prohibition of granting any other lender terms that are better then those granted CC.
As for the 1800 batteries (or cell?) and the $2.5 vs $1.65, I would wait until these numbers become the "written record" of the company to make it "Torah from Sinai". The oral lore of the company has not been too good in the past and the markets will probably take the stand "Show me".
Frankly, if all the dilution one is to expect is to 40 MM shares, the story is still good if indeed they can reach what you believe will be eventually 3 MM laptops or more and 10 MM cellular batteries eventually. I fear that it is possible that they will not be in full production for another 12 months and require an additional $5 to 10 MM in capital equipment raising their cash requirements before they can access the IDB $40 MM. If that happens, it would mean that they will need at least another $15 to 20 MM in financing. If this eventuality becomes reality (and I sure hope it does not), you may see the floorless in full swing and end up with more then 100 MM shares. Do not tell me it is completely impossible, I would put on that scenario a probability of 30% and consider this "generous".
Zeev |
