wrecked train, page-4

The rise yesterday was just on the back of the DOW rising Friday.

Limited time, only thing I want to see in these statements is the going concern note, ha and boy this is the largest one I have ever seen!!

Interesting stuff in there
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(ii) Going concern
These abridged financial statements have been prepared on a going concern basis. After consideration of the restructuring initiatives discussed below (including the directors‟ belief that agreement will be reached with the Group's senior lenders and that appropriate other restructuring activities will be completed), as well as the Group's expected financial performance for FY11, the directors are of the opinion that the Group will be able to continue to pay all of its debts as and when they fall due and accordingly the abridged financial statements are correctly prepared on a going concern basis.
The directors note that the initiatives discussed below are still in the process of being planned, negotiated and/or implemented. The Group may not implement all of the stated initiatives and, with the exception of the restructuring of the Group's senior debt facilities, it is not necessary for the Group to implement all of these initiatives to continue as a going concern. However, if the Group is unable to reach agreement with its senior lenders and to complete some of the other restructuring initiatives, it will not be able to continue as a going concern.
Owing to the recent trading position of the Group, a restructuring of the Group‟s senior debt facilities is required, including a resetting of future covenants and the provision of additional borrowing capacity into FY11. In June 2010, the Group commenced constructive discussions in connection with potential debt and equity capital raising strategies for the Group and the Group's prospective financing requirements, including a restructuring of the senior debt facilities with the senior lenders and their advisors. These discussions have been progressing to the satisfaction of the Group in accordance with a timetable agreed between the Group and its senior lenders. The directors believe that the Group will be able to reach agreement with the lenders on the required amendments to the senior debt facilities.
In addition, the Group has undertaken a review of its capital structure with the assistance of financial and legal advisers. As a result, the Group is currently engaged in discussions with a number of prospective strategic and institutional investors related to a possible significant investment of some kind in the Group. These discussions are at varying stages and their timing and outcome of each is uncertain. The directors will continue to monitor the appropriate course of action to take with respect to the Group‟s capital structure.
As announced to the market on 7 July 2010, the Group has secured a $30 million equity line of credit with US-based investment fund YA Global Master SPV Ltd. Under this facility, the Group may issue ordinary shares to YA Global Master SPV Ltd at any time before July 2015 up to a total value of $30 million and in tranches with a value of up to $2.5 million. This equity facility was secured by the Group to give it flexibility in cash management pending the completion of the other capital restructuring initiatives. To date, approximately $4.58 million has been raised under this equity facility.
The Group has undertaken a review of its business activities, and is in the process of implementing certain operational cost-cutting initiatives which will enable the Group to increase its margins and earnings. These operational cost-cutting initiatives include simplification of the Group's organisational structure, reductions on product portfolio size to enable the Group to optimally develop its key product offerings and reductions in expenditure for various overheads and professional services in the United Kingdom. The Group has commenced implementing these operational cost-cutting initiatives and the Group‟s cost structure is expected to fall significantly through FY11.
In connection with this review, the Group is considering the disposal of certain assets and has commenced the sales process with a number of purchasers. No legally binding sale documentation has been agreed and there is no assurance that any sale transactions will occur. No adjustments have been made to the abridged financial statements relating to the recoverability and reclassification of recorded asset amounts and classification of liabilities that might be necessary should the Group not continue as a going concern.