Going Concern - Auditors

Apologies for this new thread.

I note that in their 2021 Report, the Auditors (RSM) noted Going Concern as a Key Audit Matter (KAM) as follows:.

KEY AUDIT MATTER

Going Concern

Refer to Note 1 in the financial statements

Historically, the consolidated entity has been lossmaking, has significant cash outflows and is dependent on continued support from investors
through ongoing capital raises to fund research and development activities during its current research and development phase. We note key financial indicators such as loss-making, operating cash outflows of $5.1m (net of R&D refund) for 12 months.

The consolidated entity had cash reserves of approximately $13.4m as at 31 December 2021. We note that the consolidated entity’s forecasted cash burn rate for the coming financial year is approximately $18.3m.

We identified going concern as a key audit matter as it relies on existing cash reserves to cover necessary expenditure and future activities.

Our audit procedures included, among others:
- reviewing the current financial position of the consolidated entity;
- reviewing ASX announcements, board minutes and all other relevant documentation to assess the entities progress with its research activities;
- reviewing managements’ forecasts for the expected results for a period of twelve months from the date of signing the financial statements, including assessing the accuracy and the assumptions used;
- understanding the forecast expenditure committed and what could be considered discretionary; and
- considering potential downside scenarios and the resultant impact on available funds.

Imagion Biosystems Limited
Notes to the Financial Statements
For the year ended 31 December 2021

(1) b) Going Concern

The financial statements have been prepared on the going concern basis, which contemplates continuity of normal business activities and the realisation of assets and discharge of liabilities in the normal course of business.

As disclosed in the financial statements, the consolidated entity incurred a loss of $6,024,706 (2020: $5,364,007), and had net cash outflows from operating activities of $5,068,492 (2020: $4,623,090) for the year ended 31 December 2021. The consolidated entity is still in the product development phase recording minimal sales revenue, consequently it is dependent on external funding to cover ongoing product development and has forecast losses for the next financial year

Despite this financial position, the Directors believe that there are reasonable grounds to believe that the consolidated entity will be able to continue as a going concern after considering the following factors:

• The consolidated entity has a strong working capital position of $12,993,094 to meet its short‐term requirements for the coming financial year;
• The consolidated entity has a proven record of being able to raise funds to support its ongoing activities including successfully raising $14.8 million (net of costs) during 2020 from a combination of rights issues, placements and exercises of options;
• The consolidated entity received $5.5 million in funds upon the exercise of listed options in 2021; and
• The consolidated entity has historically received some cost relief through the receipt of research & development income tax incentives and the directors expect this to continue.

My apols for all the reading. I'm not up to date on all this but does anybody know if the company has announced any recent credit raising initiatives, given the Auditors flagged Going Concern as a Key Audit Matter. What sort of CR would be successful. Could it be a joint partner injecting capital?
Thanks in anticipation.
Stretguy.