Chances of coming out of suspension on 1 July, page-7

@Bi_Winning

So...got some time to quickly go thru some of the Fin data again.

Snapshot as follows:

	Column 1	Column 2	Column 3
0	March Qtrly	COH	$354k
1	June Qtr	F/Cast Outflow	$120k
2	End June	Expected Position	$234k
3	Receivable	WBT Loan (part?)	$988k

Now - the main real question is how much R&D did WBT get back? We can assume (right or wrong) that it may not have been over the $988k amount as the March Qtrly stated:

The refund will in part be used to settle existing creditors, partially repay the
current Nemex loan and make necessary amendments to the Wavefront
technology in relation to the International Centre for Biometric Research at
Purdue University (“Purdue ICBR”) validation report.

Therefore would suggest the Refund cannot fully cover existing Creditors inc. NXR and cover costs for further amendments.

Either way you look at it, NXR should in theory have around $230k+ end of June at least and assumed reasonably more, once part loan repayment made. If expected normal Qtrly cash burn is $120k then will still have approx. 2 more Qtrs of cash left even without any R&D money.

Now....from the Half Yearly in Dec there was a pertinent point made as follows:

The Group has a 40% investment in Wavefront which is recorded at its equity accounted carrying value of $1,688,301 together with a loan receivable of $988,560. In accordance with relevant accounting standards, the Directors have considered the existence of any indicators of impairment in relation to both the investment and the loan.

On 24 November 2015, the Group announced that Purdue ICBR had completed testing Wavefront’s system and was unable to independently validate and report on the performance metrics without further in-depth analysis of the Wavefront software. Wavefront has advised Nemex that it intends to review and amend the system software to ensure it provides data output in a typical format and will then reprocess data from its previous internal and the recent external testing with a view to undertaking further
independent validation at Purdue ICBR.

In January 2016, Wavefront advised NXR that it had lodged its taxation return and an application for a cash refund under the Federal Government’s Research and Development (R&D) Tax Incentive Scheme (Scheme) in respect of the year ended 30 June 2015 which will in part be used to settle existing creditors, partially repay the Nemex loan and make necessary amendments to the Wavefront technology in relation to the Purdue validation.

The Directors will continue to monitor progress on the independent Wavefront validation and will continually assess the existence of any indications of impairment. The Directors advise that if the reprocessing of data and generation of data output in a typical format and completion of further independent testing is not successful, it is likely that the investment and the loan will be significantly impaired.

So...the 2 bold statements need to be adhered to (supposedly) and that IF they are across the testing and there is failure already then I suspect they should under the Accounting requirements & disclosure (yes...I know there doesn't seem a lot of that recent months - but if no material changes then essentially they don't have to advise anything unfortunately - so.....is no news actually bad news??? ) write down the loan as impaired and possibly advise the mkt?

Or maybe they will do that with the Qtrly...maybe that is why the Susp timed to end (?) in line with the Qtrly Reporting - so could be good or bad at this stage? Up to now the loan & investment has not been viewed as impaired, even as at the last Qtrly, although they knew it didn't make a first pass on the testing at that point. They obviously still believe that refinements are possible to rectify?

Irrespective of cash and even of a positive outcome with testing, there will still be the need for a CR at some point IMO. Is a positive in there though as it will still invoke the 51% controlling interest. Reason as follows - need to convert the WBT debt but also pay another $761k to get the 51%:

The Company has an option to increase its shareholding in WBT to 51% pursuant to the subscription agreement through the conversion of the loans to equity and the payment of a further $761,440 as at 31 December 2015.

Hope that helps a little for the time being while we restart the countdown again till begin of July...