Ann: Appointment of Non-Executive Director-CM8.AX, page-21

1. 1. 
      
      The Company also has a covenant relating to annualised Consolidated EBITDA tested quarterly (calculating annual Consolidated EBITDA by multiplying a relevant quarter by four) to the effect that annual Consolidated EBITDA must be (EBITDA Covenant):
      
   
   
   
   The EUR equivalent of USD 7 million (equivalent to approximately AUD 9,456,904.24 at the Exchange Rate) as at the date of the Note Subscription Agreements, where the outstanding Loan Amount is more than EUR 5 million (which is, as at the exchange rate on 27 June 2016, equivalent to approximately AUD 7,433,440.89);
   
   1. 
      Four times $2.2m= $8.8m
      
      There's some forex changes since this publication, so my guess it is they are toeing the line at $2.2m, or maybe this result meets requirements and is by design. (Excess put back in to the business.)
      
      If the Company breaches the EBITDA Covenant, it has a number of opportunities to cure this breach. Only when the implied cumulative annual shortfall is the EUR equivalent of USD 1.75 million (equivalent to approximately AUD 2,364,226.06 at the Exchange Rate) as at the date of the Note Subscription Agreements, will this be an immediate event of default.
      
   
   My interpretation of it is that last quarter would have put them close, they have a US $1.75m buffer after this though so it's not a major at this stage.
   Im not sure if outstanding loan amount relates to drawn down or total.
   
   There's a few options to rectify it if it did happen and there's bound to be a lot of fine print.
   I could be reading it wrong so don't take this as advice, but I would want clarity from management before giving this a decent nudge as I don't trust management.
   
   I like the company and can guarantee Dom is working hard but too much risk until they addresses what is actually going on- if they care that is.
   
   This company is so hard to judge, and this poor quarter might simply be the calm before the storm.
   
   Glta