GE – the bills need to be paid.
If MZEI had firm sales contracts in hand, final payment for the equipment would likely follow within 30 days after delivery. In any event, the company is purposefully running on very thin cash so as not to dilute shareholders more than is necessary through the issuance of PPLs. If and when sales occur, then there will be some modest cash flow from those sales. Figure about $130-$140K per each of the 6 available units {the cost of the units has already been incurred from a cash perspective}. During the call, DE stated that the units were being prepped (as I recall, to Europe – which would be consistent with MS’ comments about Norwegian interest). So, until those units are sold, delivered and payment is remitted, PPLs need to be issued. That has been a fact of life for this company forever.
I have every expectation that management fully understands that neither PPLs nor modest cash flow from limited sales {near-term such cash flow is limited by the 6 available units and the build time for any new orders} are the answer to meeting cash needs over the next 12-24 months. Based upon what was stated, I have every expectation that some of the preferred share authorization will be issued when 1) the company receives FDA clearance and the buyer of the preferred shares can be more assured of progress {this also serves shareholder interests as the pricing for the Preferreds should presumably be higher, reflecting the FDA approval}, or 2) when a co-development deal is reached with a more substantial international partner (it would have been nice to have gained better insight into EMA’s efforts after 4 months of work). I would expect the capital raised from either of these activities to be several million dollars, such that management can build out a modest team and more aggressively pursue some of the initiatives spoken of.
BTW, MZEI’s prior PPL offering documents didn’t contain financial projections. Those documents don’t contain any more information than is otherwise public. The buyer is receiving a discounted price for the sake of being locked up for a year + by the time the broker dealer, working with the transfer agent, makes the shares free-trading. The buy-sell-buy cycle of some PPL investors is good for them and doesn’t harm the company. For those suggesting otherwise, the basis of same would appear to be nothing more than jealousy. With the share price being low and volatile, there is less financial incentive for this activity. Similarly, to the extent PPLs are available, as all conference call attendees were made aware of, there is no skin off of shareholder’s noses for management to likewise participate in the purchase of PPLs. I would have more concern if they did not. Other than Hoyt’s recent sales, managerial/BOD sales of shares has been virtually non-existent for years.
