´óÏó´«Ã½

After a clearly nervous pitch for his sealed plastic wine goblet, leisure industry expert Deborah Meaden asks James about his customer base.

So far James has just trialled his invention at two one-off pop concerts and at each he sold between 20,000 and 23,000 units.

She then asks whether the packaging can be branded and James replies that it can. He is already in talks with a world leading brand and the implications for his business is that they are "possibly offering us 3 million units".

Deborah is troubled by the word "possibly" but James has a letter of intent that he offers Deborah to read.

While she does so, James Caan asks about the production costs and the Surrey based entrepreneur replies that each goblet costs him 38p to produce and he sells it to wine brand owners for 53p. They then distribute it.

James wants to know what would happen to James's projections if his deal with the leading brand fell through and the entrepreneur admits that if it did he would be reliant on another known label that might want to market between 1.5 or 2 milliion units. He admits this would deflate his projected profits by 50%.

James remains concerned that he is basing his evaluation on the back of his letter of intent.

Duncan Bannatyne is concerned copycat rivals could steal sales away. He questions the soundness of James's patent application as neither plastic goblets, wine, nor the seal that is put on the goblet is patentable.

James insists his patent application covers the process of putting an inert gas into the wine before it is sealed (and so offering a 12 month shelf-life) and that this is unique - and patentable.

Peter Jones wants to know if the patent is registered or pending and James replies that he only submitted the application in the last three weeks and is not expecting it to be granted for between 12 and 18 months.

This is unacceptable to Duncan. He cannot understand why he has gone into production before submitting an patent application and worse is to follow.

Deborah Meaden has been scrutinising the letter of intent James has presented and concludes that at no point does it state "I intend to place an order with you". This isn't a letter of intent in Deborah's understanding of the term.

James Caan asks that given James's evaluation is based on a letter of intent that is now worthless, how can he as a venture capitalist be expected to value a business on the basis of some vague verbal indication of interest. Surely he would be better to make that evaluation on the basis of tangible numbers and orders. Since he cannot in this case, he is out.

Deborah Meaden concurs. Since James's pitch was dependent on a letter of intent that is not what it seems, she too is out.

Theo Paphitis is concerned about the robustness of the patent application - what if he gave James the £250,000 he is seeking and the Patent Office rejects his application?

Duncan interjects and suggests that James knows his patent won't stand up.

The clearly faltering entrepreneur suggests his business advocate Ian Belcher may be able to reassure both Dragons on this point.

Ian enters the Den but is only able to confirm what the Dragons already know - James has no concrete orders whatsoever.

Duncan concludes that people simply are not prepared to buy wine by the glass in plastic glasses with a seal on top - for both aesthetic and financial reasons then, he is out.

Peter Jones confesses to being disappointed. If James had arrived in the Den and admitted he only had a verbal arrangement that might make the Dragons money, he might have viewed the proposition more sympathetically. As it is he thinks James has asked for a ridiculous sum of money and for that reason he is out.

Theo terminates James's miserable time in the Den by pointing out that he could not invest in a business where the patent application was so recent and so prone to objections. It would involve a degree of risk he would not be prepared to take. For those reasons he is out.

The deal done in the Den:

No investment.