Ann: Appendix 4E & 31 December 2017 Financial Report, page-95

People see this on p26. Bit of a concern (no pun intended).

(a) Going concern
The financial statements have been prepared on the going concern basis, which contemplates continuity of normal business activities and
realisation of assets and discharges of liabilities in the ordinary course of business.
As disclosed in the financial statements, the Group incurred a net loss of $8,828,576 and had net cash outflows from operating activities
of $6,626,307 for the six-months ended 31 December 2017. As at that date, the Group had cash balances of $8,254,823 and net working
capital of $6,787,203 For the December 2017 quarter, the Group was in breach of an EBITDA covenant in relation to its PFG loan.
Consequently, the loan became payable on demand and is disclosed as a current financial liability. The Company received a waiver of the
loan breach and has renegotiated its loan covenants for the 2018 calendar year.
The Directors believe that it is reasonably foreseeable that the Group will continue as a going concern and that it is appropriate to adopt
the going concern basis in the preparation of the financial report after consideration of the following factors:
• New partnerships and alliances for ADAPT and TAVR products
• Contract wins for the infusion business
• Securing an external source of funding for Admedus Vaccines or a partial divestment of its interest in Admedus Vaccines
• Access to a $5 million working capital revolving finance facility, subject to meeting a minimum borrowing base threshold and
providing representations and warranties, that was entered into during the period and is available for 36 months from first
draw down
• Positive net working capital and cash balances totalling $6,787,203
• New product lines such as CardioCel® Neo, VascuCel®,CardioCel® 3D and TAVR that are at varying stages of introduction in our
existing markets
• New markets for the Groups ADAPT® products including India, Australia, China, Mexico, Philippines, Taiwan, Vietnam, Turkey,
Thailand, Japan and Spain
• Monitoring, management and containment of discretionary costs, including R&D costs, and capital expenditures
• The Group’s cash flow forecasts that incorporates some but not all of the above factors, thus providing some upside sensitivity,
indicated that the Group will be in a positive cash position during the period of twelve months from the date of approval of
this report
The ability of the Company and the Group to continue as going concerns and fund the path to profitability is dependent upon securing
additional funds in the coming months from amongst a range of sources/opportunities including securing an external source of funding
for Admedus Vaccines or a partial divestment of its interest in Admedus Vaccines, issuing new equity and/or drawing on debt facilities.
The Directors believe that the Company and Group has the capacity to raise equity finance.
Notwithstanding the above factors, as a company moving towards profitability dependent upon continuing support from current
shareholders and financiers, should the Company and the Group not receive the forecast cash inflows and additional funding referred
to above there are material uncertainties as to whether the Company and the Group will be able to continue as going concerns and
therefore, whether they will realise their assets and extinguish their liabilities in the normal course of business and at the amounts
stated in the financial report.
The financial report does not include adjustments relating to the recoverability and classification of recorded asset amounts nor to the
amounts and classification of liabilities that might be necessary should the Company and Group not continue as going concerns.