Ann: Administrators Appointed, page-8

GolfR32

You say P1 is still operating. I would express the state of P1 differently - that it is still in existence. I have no idea whether it is operating at this moment.

I have no inside information about why CQA ditched P1, but I note that. CQA told the ASX on 28 Nov that:

By the end of September 2014 the Company was positioned to complete the proposed acquisition of Priority subject to a number of negotiated conditions precedent being met by Priority. By the end of October 2014, despite our best endeavours, it became obvious that Priority could not satisfy the conditions precedent. The Company, acting upon legal advice, abandoned the proposed acquisition of Priority.

You invite me to say why that was a good decision for CQA shareholders. Perhaps the board of CQA decided that if it went into administration it didn't want to make things worse by saddling itself with P1's dreadful accounts.

Dreadful? Yes, IMO. Look at P1's accounts for the year ended June 2014.

http://tinyurl.com/kd5zq9v

* A loss of $733,062.

* Total assets of a mere $28,448.

* Total liabilities of a whopping $648,715.

* Accumulated losses of $3,748,918.

* Cashflow negative by $6,599 [I didn't spot a reference to any receipts from customers].

Finally, and perhaps most worrying of all for CQA, is William Buck the auditors extraordinary report in P1's accounts. It should be read in full, but it closes with these remarks on not being able to determine whether P1 is a going concern.

As a result of our inability to obtain sufficient appropriate audit evidence in relation to these matters, we have therefore been unable to obtain sufficient appropriate audit evidence to determine whether a material uncertainty exists and accordingly whether the Company's [sic] has the ability to continue as a going concern for a period of at least 12 months from the date of the audit report. . . . Accordingly, we do not express an opinion on the financial report.

I have never read anything like that before. You say maybe P1 was afraid that CQA was in dire financial straits. I say that maybe CQA was afraid that P1 was in dire financial straits.