Medical Monitors Limited
Suite 407 Office Tower
Westfield Eastgardens
Eastgardens NSW 2036 Australia
Tel 02 9344 8100 Fax 02 9344 8200
3 February 2005
Company Announcements Office
Australian Stock Exchange Ltd
Sydney 2000
Dear Sirs
Status of R&D Start Concessional Loan from Commonwealth
The Company wishes to update the market on recent developments affecting the R&D
Start Concessional Loan (“R&D Loan”) granted to the Company’s wholly owned
subsidiary, Heart Monitors Pty Ltd by the former Industry Research and Development
Board, an agency of the Commonwealth. Refer page 25, item 15 of the Company’s 2004
Annual Report.
The R&D Loan, originally $490,500, was granted to Heart Monitors in 1998/99 for the
purposes of development of the MICRO electrocardiogram recorder and associated
monitoring service (“Project”). The Project was successfully completed with the MICRO
being listed as a finalist in the Australian Design 2000 Awards. Subsequent attempts to
develop a profitable business in Australia based on the MICRO were not successful.
However the experience and knowledge gained through the Project was valuable in the
development of later electrocardiogram monitoring devices and services for Australian
and international markets.
As repayment instalments became payable under the R&D Loan from March 2002
onwards, Heart Monitors wrote to the Commonwealth on a number of occasions
requesting deferral of payment and later conversion of the R&D Loan to a grant.
In June 2004 the Commonwealth (AusIndustry) wrote to Heart Monitors seeking
repayment of the R&D Loan but also provided information regarding the appropriate
mechanism for seeking ‘waiver of the debt’. The power to waive such a debt pursuant to
the Financial Management & Accountability Act 1997, is vested in the Minister for
Finance.
In October 2004 Heart Monitors Pty Ltd formally applied to the Commonwealth for a
waiver of the R&D Loan debt (now approximately $540,000 including interest).
Medical Monitors Limited
Suite 407 Office Tower
Westfield Eastgardens
Eastgardens NSW 2036 Australia
Tel 02 9344 8100 Fax 02 9344 8200
Since that time, Heart Monitors has been assisting the Commonwealth in its
determination as to whether to waive the debt, by providing extensive background
information in relation to the Project, R&D Loan and Heart Monitors.
In the course of discussions with the Commonwealth, regarding the provided background
information, the Commonwealth has indicated that, notwithstanding the application for
waiver of the debt, it considers the debt to be due and payable in whole.
Based on its discussions with the Commonwealth the Company understands that the
application for waiver of the debt is currently being considered and the Company has
been advised that the Commonwealth is unlikely to seek recovery of the R&D Loan debt
until the request for waiver has been finally determined.
The Company will keep the market informed as to the progress and status of the request
for waiver, and believes that Heart Monitors would be able to make arrangements to
repay the R&D Loan debt should the waiver application not succeed. The resolution of
this matter may take in the order of a further 3 months before a determination is made.
Dr Allan Shell
Managing Director
sb2000 thinks thta at the moment its a last ditch attempt to avoid repaying that R and D loan - that said the government should puruse the full loan as a normal course of business or ask for a equity stake via the issue of new shares in the business via its superannuation fund which can then be onsold ?
MDM
medical monitors limited
