With EBITDA now expected to be circa $10m and typical commercial...

With EBITDA now expected to be circa $10m and typical commercial lending covenants of 2.25 x EBITDA they would be in the firing line. The prospectus (IPO) had debt covenants as 2.25 x EBITDA and a shareholders equity ratio of 0.45 (shareholders equity / total assets).

Also any further writeoffs (goodwill) will reduce total assets and thus shareholders equity. In this regard the carrying value of the goodwill is predicated on annual sales growth of 3%.