Syft wants cash for growth
Cash-strapped Syft Technologies is planning a rights issue it hopes will raise up to $3 million to help speed up production and make it easier to sell its "sniffer" devices.
At the moment there is a four-month lead time to build one of its gas analysis devices that can detect chemicals in gases and test air quality.
Chief executive Doug Hastie said the company needed the extra funding to buy more materials to enable it to speed up production.
Last year Syft was producing one machine every two months. It was now able to produce two machines per month, and wanted to increase that further, but needed funding to do so.
The company needed to reduce that four-month lead time to keep customers happy.
"Customers would be comfortable with a two-month lead time," Hastie said.
"At the moment it's hard for us to sell more machines with that long lead time."
It had not yet deterred potential buyers but if Syft continued to be able to produce only two machines per month the lead time would extend to five or six months and that would put buyers off, he said.
If the company did not raise the funds it sought the company could still continue, but growth would be slower because sales would be constrained.
Asked whether shareholders were likely to support the rights issue given the company's poor performance over the years, Hastie said he thought the company had a "good story" now.
"Because we've got sales and we've got confirmed orders, and the money's not to do more development but to hopefully get more sales."
A lot of growth was coming from the container testing market.
This calendar year Syft had sold or had confirmed orders for nine machines in that space.
Hastie said last month the company could break even for the year by the end of May.
Last month Syft had five confirmed orders and Hastie thought the break-even point of 10 or 11 sales could be reached by the end of May. Since then the company had secured another three orders.
Syft's shares were taken off the Unlisted platform in late 2009 to reduce costs and are now trading through Polson Higgs for around two cents a share. The shares were originally issued at 8 cents per share.