Thanks @earlyrise
It makes much more sense now. Never mind @DaLatta I got the figures. Thanks.
The trade payables is 786 K, and as @DaLatta says, the increase could very well be because of Mitchell. Still, this should be manageable with our 4 million in isolation.
The provision for tax apparently pertains to the tax in relation to a capital gain on the transfer of mining rights. As mentioned there (PG 32), the seller, the buyer or the entity holding the mining rights have joint and several liability for the payment of tax, and hence liability has been recognized of 2.15 million. Due to the uncertainty of the amount payable a tax provision has not been recognised for a liability which may be as high as approximately $5.5 million, if unpaid by the seller. The primary obligation to pay the capital gains tax is vendor’s and accordingly, any capital gains tax paid by the minority shareholders of Grafex Limitada will reduce the joint and several capital gains tax liability.
I wonder if this is the source of our troubles, as the Mitchell Drilling amount should ideally be included in above trade payables of 786 K, and I would have thought that it should have been covered in the 4 million funds we have.
BB’s payment is the 3rd major amount which would not be included there, as proforma statement of financial position is as of June 2015. This was one of the easily avoidable liabilities if we had continued with the existing status quo, and as can be clearly seen here, it was the hasty decision to terminate BB when we had no funds that has put in a soup.
Of them, BB’s amount is definitely a liability now, and Mitchell would definitely be one too.
With regards to the tax, as mentioned above, the primary obligation to pay is that of Grafex. So I wonder if they’ve refused to pay or something of the sort. Again, did the liability amount increase to 5.5 million, etc. as mentioned above? If that happened, then we would be insolvent. Mentioned that there is some uncertainty as to whether the capital gains tax regime is applicable prior to 1 January 2015, and talks were on. Maybe something further materialized with the talks that we were not aware of?
Yeah ER, it would have been good to read the financials. Last year’s were signed off in March; so we would have had 2015’s very soon, if this would not have happened.
Just a note over here – As can be seen, above amounts although seeming big are routine amounts and most companies which go into admin, normally go into admin due to crushing debt (loans incurred towards plant construction running into tens/ hundreds of millions, etc., huge trade payables once business is fully set up, etc.).
Above case of Mitchell Drilling would have been a normal one in the course of business and really should have been planned for. Liability of BB as mentioned above was a completely avoidable one and TON has brought in on itself. Lastly, the Moz tax one is a complex one and a complete wild card. Remains to be seen if that was the biggie.
Anyway, we’ll hopefully find out more info in time; so we’re just speculating till then. But if it is a matter of TON falling just 1-2 million dollars shot (which looks to be the case at first glance), then theoretically couldn't TON obtain the funds again? However, it is not going to be easy considering the huge loss of credibility in recent times and already poor recent capital raise, and we'll probably need a white knight.......or a dark knight!
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Thanks @earlyrise It makes much more sense now. Never mind...
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