Vince - I agree with your math re: capital problems +/- year-end if there are no sales and no EPA approval. I’m sure other shareholders and the BOD know the math also. With a 6-month lock-up period, even the prior PPL flippers (funders) are going to stay away from MZEI. That will leave the interim PPL funding in the hands of the real die hard investors, likely purchased at a very discounted price.
The wildcards remain, 1) can MZEI sell the 6 inventoried units and thereby buy some time; 2) will the EPA make its determination in time to bolster the share price and allow remaining PPLs to be sold at a more favorable price than they can be now.
Considering it will take 2-3 months to process the notice and proxies for a shareholder meeting, if we get neither sales nor EPA by +/- the end of September, the BOD will have some very real decisions to make. Absent an EPA denial, I don’t think shareholders can get much more upset with the situation and a shareholder meeting will just be the ticket to vent one’s spleen and hopefully bring forth some alternative competencies.
I think it’s clear that management has avoided shareholder accountability (no shareholder meeting in years). Even should unissued share authorization diminish to near zero, will they still avoid shareholders by doing something (sale, debt w/patent collateral, JV, ???). It’s hard to know what these folks will do. Understanding that the bigger shareholders are on the board, have relatives therewith, or otherwise have the ear of management, a shareholder meeting won’t necessarily result in the turning out of the BOD. Irrespective, the process would surely be messy.
Can Ed actually sell some machines? Who knows?
Can the EPA consultants frame the possibility if not probability of gaining EPA approval by the end of September? Maybe? If Ed is right that the EPA matters can get ironed out in the ‘near-term’, then that would seem possible (all the more reason to communicate/update the status with the EPA). My sense is that EPA is more important than Canadian sales as I would expect that with EPA approval, Caponi would come in and buy 4-6 test machines for his hospitals, giving MZEI some breathing room while negotiations with suitors transpire. Apart from selling the inventoried units, cash flow resulting from sales following EPA approval is likely 3-4 months deferred as machines are built, shipped, invoiced and collections are made.
Also, don’t forget that for the time being, the financial statements are showing a creditor position of some insiders (principally Ed and Jill). Who owns the intellectual property if MZEI goes BK? All the more reason for the other BOD members to step up their game.
