Ann: Quarterly Activities/Appendix 4C Cash Flow Report, page-6

Pretty staggered that the Directors are persevering with this. I wonder whether they would have any personal liability to the ITO if the company went into receivership? Can't think of any other reason that they would keep going.

The ASX continuous disclosure requirement makes this report a self-fulfilling death spiral.

- its now unlikely that RAN could pass the due diligence assessment of the procurement department at any potential (or existing) large customer. Even if it did, there is no way the customer would pay for pallets up-front so even if it were able to secure a large order, RAN would have to front the production costs, and there are no funds to do this.

- hard to raise any debt (even invoice factoring) or capital funding due to the uncertainty around the ITO debt.

- may not have the resources to fight the ITO. Up-front legal fees would probably exceed the company's cash resources.

- unlikely to be able to sell the Australian business for more than a pittance. It only cost $400K in the first place and has drastically under-performed, so what would it be worth even if it were saleable?

As far as solvency goes, my understanding is that its a bit of a subjective assessment ("can pay debts as and when they fall due"). RAN obviously can't meet the ITO assessed debts, but they could claim that the tax advice received means that its unlikely that such debts would ever be payable, so on this basis the directors assess the company as "solvent". However, if management decided RAN doesn't have the resources to fight the ITO, then there would be no way of avoiding the debts and the company would be "insolvent".

If Jenkins and his mates really believed in the long term potential of the company and there were only vanilla creditors, they could tip the company into administration, allow the administrators to work out that creditors may only receive 10c in the dollar (for example), offer a DOCA that gives creditors 20c in the dollar (for example), buy back the entire company debt-free, de-list it, and go on their merry way. But this brings me back to my original point - there may be a personal liability to the ITO even if the "limited liability" company is bankrupted ...