Pending sales update, page-4

Hard to say futurenow....its a bit of a gamble on this one, but lets look between the lines a little.

The chairman, as well as the manufacturer have given loans to the company. If it goes belly up they won't be re-paid.

The board are not currently paid. If it goes under they wont be remunerated for their time.

Unless there is something underhanded going on (which I don't) then I think they have confidence that things will be OK.

The Blood collection device (BCD) (which as I understand, is currently with Sol for marketing) market in the US is worth $350m per year. If we can get 5% of that market would be approx. $17 m for a year (or approx. $1.5m for the month). I don't know what MGZ's share of sales would be...lets say 15 cents in the dollar as royalty, that would be $approx. $2.5m. Now lets add a conservative PE ratio of 7, that would give a market cap approx. $19m, or about 2.2 x current cap, which equals about 18 cents per share.

Now, ignoring the time it takes for market penetration - which may affect the first month sales (time for customer stock to run down etc) I'd think that 5% market share were pretty conservative for a product that is purportedly better, safer and cheaper. So for the year end we may well expect a higher market share than that - and we might also expect sales in markets other than the US. The hypothetic value above is therefore erring on the side of pessimistic caution (albeit based on my own back of the envelope and unsupported assumptions).

Secondly, the company is very, very closely held - any major holder bailing with a volume of 175,000 shares at 8.5 cents would not be achieving much, particularly given the next closest buyer is at 6 cents (and volume of 455 shares).

In short, we are locked in now - but I think that the confidence shown by the chairman, board and manufacturer put the balance of probabilities on our side. If I'm wrong it will probably be bust however. GLTA, should be an interesting next couple of days as we wait