Wow! After extending the closing date of the Convertable Note...

Wow! After extending the closing date of the Convertable Note Offer, NSP now cancels it completely. Clearly even at 14% there was no support. The 31 March options expired worthless and the company is in financial straits. The cost of the prospectus was wasted. The SPP seems a desperate measure as the previous one was not well supported and the share price collapsed afterwards.

The biggest millstone that the company has is the rental contract for the building it occupies at $1M per year. It was forced to take this on as a condition of separating from LFE. It is high quality medlab space of which it needs only half the area. They desperately need a co-tenant. All this is occurring while the company is still in start up mode. If it can leap over this hurdle NSP should do very well. The product lines are good, the production quality has more than doubled, the overseas distribution network is being rolled out, and the innovative instrument lines are getting closer to market ready stage. There has been some excellent publicity for the SpermSep as a research novelty but NSP's name has not been attached to it thus far so that no benefit flowed to the share price.

Nevertheless, management maintains that NSP Gel sales should reach breakeven status this June. Considering its history and NSP's close links with the LFE debacle it would be understandable that shareholders are sceptical. The SPP is limited in that the largest shareholders can still only subscribe $5000 max and nonshareholders are excluded. Perhaps the reasoning is that so long as the fundraising is sufficient for a few months NSP can then claim that it has been profitable for a Quarter. It is a difficult situation.

Juke