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SLA - SILK LASER AUSTRALIA LIMITED


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1. It is possible to conclude on the basis of the information provided that if the Company were to continue to expend cash at the rate for the quarter indicated by the Appendix 4C, the Company may not have sufficient cash to fund its activities through the next 2 quarters. Is this the case, or are there other factors that should be taken into account in assessing the Company's position?

The cash burn rate for the December quarter was impacted by legal fees incurred in defending the legal action commenced by BioProspect Limited in the second half of 2010. The legal costs should be offset against the proceeds received from the disposal of 45,000,000 BioProspect shares issued under the agreement. The receipt of $324,000 is recorded at line 1.10(b) in the December return.
The dispute was finalised following court directed mediation in late October 2010. Solagran advised the market in its announcement of 4 November 2010 that all conditions relating to the settlement with BioProspect had been finalised.

2. Does the Company expect that in the future it will have negative operating cash flows similar to that reported in the Appendix 4C for the quarter and, if so, what steps has it taken to ensure that it has sufficient funds in order to continue its operations at that rate?

Solagran estimates that the negative operating cashflows for the March and June quarters will be lower than the December quarter due to the following:

ï‚· Increased revenues from the sale of Solagran's registered pharmaceutical product, Ropren, due to the price decrease announced in December 2010 and increased awareness of the product in the Russian Federation.

ï‚· Revenue from the sale of Bioeffective A in Australia, New Zealand, Malaysia and the United Arab Emirates. The first order was delivered to Malaysia in the last quarter of 2010 and the initial order from the UAE will be dispatched this quarter. Solagran expects continued growth in revenue from Bioeffective A as it expands the applications and market for the product.

ï‚· Revenues generated from the introduction of the Pine Pure range into Indonesia forecast to occur by mid-2011.

ï‚· Significant reduction in legal costs following the settlement of the BioProspect dispute.

3. To what extent have the Company's actual revenues and expenses in the quarter, as reported in the Appendix 4C, matched the Company's anticipated revenues and expenses for that reporting period?

Revenue and expenses for the December quarter were in line with Solagran's expectations.

4. If the Company's actual revenues and expenses are not substantially in accordance with the Company's anticipated revenues and expenses, when did the Company become aware that its revenues and expenses would not substantially match the anticipated revenues and expenses? You may wish to outline any circumstances that may have had an effect on the Company's revenues and expenses.

Not applicable

5. Can the Company confirm that it is in compliance with the listing rules, and in particular, listing rule 3.1?

The Company confirms it remains in compliance with Listing Rule 3.1

6. Please comment on the Company's compliance with listing rule 12.2, with reference to the matter discussed in the note to the rule.

Solagran considers it is in compliance with ASX Listing Rule 12.2 having regard to the composition of its balance sheet, relative size of liabilities and access to funds.

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The most interesting thing about the reply to the ASX is the comment regarding Bio A and the UAE

 

"the initial order from the UAE will be dispatched this quarter"

I wonder who placed the order????

And they cant dispatch the order until approval for Bio A has been granted, so we must be very very very close to approval. :lol:

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I personally think that the UAE side of things can be very big for the company.

 

As for the negative quarters, I would say alot depends on whether the alcoholics programme gets up and running, the success or otherwise of the federal and state auctions, and not to mention any Bio A US NDI approval.

These variables probably make it too hard to say with certainty one way or another, so probably best to err on the side of caution/conservatism.

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you could be right. but if the slow take up of ropren in russia is anything to go by, it could be quite some time before we see any decent cashflows from UAE.

Would be nice to know what sized order of bio a was made for malaysia.

 

the all important Market Update announcement is so badly needed right now.

 

you cant change the past, but it would have been appreciated if they erred on the side of conservatisim in regards to making outlandish claims all those years ago.

The windscreen is much larger than the rearview mirror :happy:

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As you would be aware Ropren in Russia and Bio A in the UAE are two very different beasts.

 

While there have been many many delays in getting Ropren to market, at least the company has demonstrated the ability to successfully navigate the minefield that is new product registration.

 

They have done this in Russia with Ropren, Bio A in Oz and Malaysia, and soon to be Pine Pure in Indonesia and of course Bio A in UAE.

 

I still believe that a market update will come out shortly, especially given Vagif is back and the company has been silent for about 6 weeks.

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Agreed - Pine Pure will be SLA's first OTC produts... which has the ability to grow quicker in the short term than its BioA and Ropren counterparts. Pine Pure will be sold in Salim's stores... which are the largest group of businesses in Indonesia. So SLA could not have teamed up with a better partner to launch Bioeffective products. Could also be a big winner.

 

If you want to listen to the big V - for those who missed it... the 2UE website has uploaded the program for Saturday.

 

Enjoy

 

http://www.2ue.com.au/healthyliving

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