SINGAPORE (July 3): The board of Informatics Education has expressed confidence of the company’s ability to continue as a going concern.

The is in response to the group’s auditors, Ernst and Young after it recently expressed uncertainty regarding the group’s ability to continue as a going concern after examining its FY18 financial statements.

The board of Informatics said it had received a letter of undertaking from indirect controlling shareholder Tan Sri Vincent Tan Chee Yioun to provide financial support of up to $5 million until June 30, 2019.

Tan is also the founder of Malaysia-listed Berjaya Corporation.

In addition, Informatics is also pursuing new and profitable revenue streams to generate cashflow growth, streamline processes and leveraging on technology to achieve learner management structure and cost efficiency, it has the ability to continue as a going concern.

For FY18, EY had reported that the group has generated negative operating cash flow of $5.03 million and incurred a net loss of about $5.82 million.

As at Mar 31, the company is in a net current liabilities of $5.29 million, compared to $4.09 million a year ago, as well as a net liabilities position of $5.26 million from $0.87 million last year. EY says that these factors indicate the existence of a material uncertainty,

In addition, EY noted that the group’s gross balance of trade receivables amounted to $1.53 million, against which allowance for doubtful debts of $0.75 million was made.

Informatics was placed under the Singapore Exchange’s (SGX) watch-list on Dec 4 and has been given 36 months to restore its financial health and meet the relevant requirements.

The group may apply to remove itself from the watch-list it its earnings for the most recent full year consolidated audited accounts has an average daily market cap of $40 million or more over the last six months.

As at 12.15pm, shares in Informatics are trading at 6.9 cents.