Summary of Draft Financial Statements as at $31$ December $2023($full year$)$

Statement of Profit and Loss

Sales $$19,543,000$

Cost of sales $($$$8,779,000)$

Operating costs $($$$13,048,000)$

Net operating loss $($$$2,284,000)$

Statement of Financial position

Current assets $$9,879,000$

Non$-$current assets $$18,000,000$

Total assets $$27,879,000$

Current liabilities $$10,627,000$

Non$-$current liabilities $$8,676,000$

Total Liabilities $$19,303,000$

Net assets $$8,576,000$

Represented by:

Equity:

Shareholders funds $$2,343,476$

Retained earnings$*$ $$6,232,524$

Total Equity $$8,576,000$

$*$ After deducting the current year loss of $$2,284,000.$

The company has adopted the model constitution in the regulations as its own constitution.

Given the above financial position of WT as at $31$December $2023$ it is clear to the Board and senior management that the company needs an injection of funds urgently.

Thomas has indicated that WT only has sufficient cash at bank to fund $3$ months of operations. The amount of funds needed is approximately $$8,000,000$ to $$12,000,000.$ If the funds do not arise then there is a risk the company could be insolvent.

The Board has spoken to all the shareholders and they are reluctant to provide additional investment, given that their initial investment was at a price higher than the current market share price.

Issues they seek advice on:

$1.$ Can the company go to the public and ask for additional investors?

$2.$ Are there alternative forms of equity or debt investment options that the company could consider which would raise the funds needed.

$3.$ One large financial institution $($introduced by Carlo$)$ has indicated they are prepared to provide some of the funds as debt in exchange for personal guarantee as well as the assets of the company as security. What is the impact on the directors if they provide the personal guarantee and the company cannot pay their debt back. Are all the directors liable or only the executive directors?

$4.$ If the company can not pay the loan back to the Bank, what are the options for the Bank to try and recover their money?