Larry, from examining the numbers available, I think there is a window of at least three months of cash shortages (assuming IDB comes on board once $4 MM are shipped). If I remember correctly, Berg has committed only $2.5 of his promised $10 MM (I should add that the financing activities in the quarter ending September raised $12.5 MM and since CC was $7.5 MM, Berg's contribution might have been $5 MM, but I have no way to ascertain that from other documents), thus if Berg commits the balance of his $10, that could carry us to the middle of the second quarter.
Under these assumptions (Berg putting in another $7.5 MM in the next two months) getting through to the "promised land" (IDB financing) is "doable", but it does leave very little "margin for error".
Some people asked if it is a good short here, well if someone is so inclined, I believe we are near the top of a trading range, so shorting here ($7.25 to $7.5) could be a valid strategy, but I would use a very close stop loss, a break and close above $8 could get the stock all the way to challenge it's high, and the reward right now is just a decline to the bottom of the current trading range around $5. Sure, it can break $5 and then who knows how low it might go. The risk/reward on the short side is not particularly great since this stock moves on news/rumors of news rather then on well documented progress.
Zeev |
