Strike,

No criticism through hindsight by me; if you read my posts on Raging Bull and Agoracom you will discover that I have addressed your questions.

As regards your comment "I am fairly sure that Merck was convinced that the CGNH beads were much superior to the existing beads on the market" I think you are correct. But your understanding of the commercial terms of the deal is flawed.

IMO Merck executed the deal with Cardiogenics as

1. they hoped to produce an "exclusive" version of Cardiogenics' paramagnetic beads by adding their proprietary coating process.to the beads
2. they would be launching their exclusive "propietary paramagnetic" bead into a market that Cardiogenics had "shaken" with the publication of statistically significant clinical trial data proving the beads performed as promised.

Unfortunately Merck was unable to satisfactorily coat the beads to quality standards and Cardiogenics failed to produce the promised clinical data. Thus "killing" the timing for this commercial deal but note that Merck has not terminated the deal. IMO Merck remains hopeful that Cardiogenics will demonstrate the superiority of the silver coated paramagnetic beads via head-to-head clinical trials.

The options you suggested for Merck IMO remain viable but only after Cardiogenics' produces the clinical data demonstrating the beads perform as promised and the commercial potential for the beads becomes reality. Then IMO Merck could very well seek to buy Cardiogenics' subsidiary and strive to establish exclusivity for silver coated beads in the marketplace.

The price of Cardiogenics' stock is IMO a more relevant statement about the confidence the financial markets have in Dr G and his team to manage the needs of Cardiogenics than the sample of shareholders with whom you spoke.

As for your statement "..I would raise the capital needed on a piece meal basis" - Dr G and his team having been following that strategy. You should ask your sample of share holders if they would prefer to follow your "piecemeal stategy" or have raised sufficient cash under the terms negotiated with Saunders. Dr G and his team has "managed" Cardiogenics into a position where the dilution will be at what you describe as "rock bottom" share prices.

IMO and experience such piecemeal strategies have been the downfall of many entrepreneurial companies - the greed of the Founders and early investors prevent them from following a reasonable financing strategy. Resulting in diminished ownership for these individuals, while enabling investors like Saunders to capture large ownership positions well below fair market value.

Ante