Ann: Trading Halt, page-48

The following is an extract from The Company half yearly report just released:

Notes to the Financial Statement

1.Significant Accounting Policies

para 2

Going Concern.
The financial statements have been prepared on the going concern basis, which contemplatescontinuity of normal business activities and the realisation of assets and discharge of liabilitiesin the normal course of business.As disclosed in the financial statements, for the six months ended 31 December 2023, theGroup incurred a loss after tax of $1,571,566 and reported net cash used in operating activitiesof $1,396,352.Accordingly, the above matters give rise to a material uncertainty with respect to the Group’sability to continue as a going concern and therefore its ability to realise its assets and settle itsliabilities in the ordinary course of business and at the amounts set out in the financialstatements.

That was signed off by the Managing Director, who followed with an opinion that the Company would not trigger the operational uncertainty. A matter of faith that, because the retained funds in the Company have been going backwards year after year.

That was what the auditor picked up and by doing so reinforced it.

Simple, straightforward interpretation of the facts.

Mind you, if it hadn't come from management and appeared as a finding of the audit alone, impressions would have been a lot worse.

What will be very interesting now is how the new cash raising tackles not only repairing a balance sheet but trims the sails so the same management sparked slow death spiral doesn't repeat itself.