Lignol Energy Corporation V.LEC

Cash Burn an Issue...

[2guys]

For the moment anyway.  They're either going to have to go to the markets or hopefully they get the funding from the DOE in the US.

Would be quite the no brainer if they had substantial cash in the bank, but at the moment, that's the primary risk I see in this investment.

[chalkmarks]

Cash burn has always been the issue with LEC, and most other junior industrials.In my view they have been remarkable in their year by year ability to continue to meet various benchmarks to qualify for the renewal and expansion of the research and other grants. Those who remember the Tech Bubble circa '98-2000 will recall how quickly the IPO money vanished for most start-ups - up in smoke then

[TheRock07]

2guys, can you read ?They are fully funded for all activities thru to Oct of this year and expect that addiitonal grants will be rec'd over the next feww months  to fund them thru to the end of the fiscal year, when the funding grants are renewed for 2012.The DOE  residual grant of $28.5 million is conditional on a 30 % external investment but that where the JV partner comes in......

[M101]

sort of tangential to this topic but...Does anyone know if or how this grant funding eventually affects a revenue model? Certainly there are strings but as far as I've read they are in the nature of being subject to development of fixed assets and demonstration of technology rather than making any claim on future profits or the use of patents.

[2guys]

I agree with you TheRock, it's as you say, and expectation that grants will be renewed for 2012, so we shouldn't take it for granted that it's sure thing.If it was, LEC wouldn't be trading for under .20 would it?  That's my point.  Have a great lesson, as for me, I'll be attending reading classes.  atb

[SlumdogMillionaire]

I would have to disagree. Lignol posted a profit last quarter because they are doing such a good job managing their grants. They make no revenue as of this moment. I have a feeling for the first time ever that's going to be changing within the next year or so.