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QT Vascular says it will continue as going concern
DESPITE a vague hint of possible doubt from its auditor over whether former market darling QT Vascular can continue as a going concern, the medical devices company has said that it still can.
Catalist-listed QT Vascular noted in a Singapore Exchange filing on Wednesday that its independent auditor, KPMG, had included an "emphasis of matter" in its independent auditor's report on the group's financial statements for the year ended Dec 31, 2015.
KPMG had said, in a section titled "Emphasis of matter", that "without qualifying our opinion, we draw attention to Note 2 to the financial statements which indicates that the financial statements have been prepared on a going concern basis notwithstanding the net loss of US$53,050,000 for the current year, the deficiency in net assets of US$13,686,000 and the net current liabilities of US$23,972,000 as of 31 December 2015".
The auditor stopped there without elaborating.
In response to the emphasis, QT Vascular said in its statement that its negative working capital was mainly due to the recognition of a legal liability provision of US$23.4 million in relation to a judgement but that the group was appealing against this judgement.
Management has "critically assessed" the group's cash flow forecasts for the next 12 months and "concluded that there will be sufficient cash flows and resources to allow the group to continue its operations and meet its obligations for the foreseeable future", it added.
The stock rose 0.1 Singapore cent to close at S$0.103 on Wednesday before the announcement.