At the initial meeting of creditors, the administators said a second meeting would be held to decide on October 7 to decide on whether Ellume would be wound up, or the company executed a deed of agreement or the administration of the company was ended.

The Brisbane based Ellume, which had previously won a major contract in the US to distribute its over the counter Covid test kit, collapsed earlier this month with suggestions that a recall on its kits may have been to blame for major increase in costs. It also had to deal with the US Government distributing free test kits.

FTI said it had undertaken an urgent assessment of the company’s cash flow position and forecast liquidity requirements to support continued operations during the voluntary administration period. It continued to operate on a business as usual basis with a view to either recapitalizing it via a deed of company arrangement or as a “going concern” sale.

It had also undertaken urgent negotiations with third party funding options and signed a funding agreement.

It has also liaised with the its American subsidiary regarding its contract with the US Government about ongoing production and was awaiting a reply.

FTI found the company’s assets were $1.5 million in cash, $37 million in plant and equipment and about $600,000 from debtors. Its liabilities were $1.69 million owed to employees, $89 million to convertible noteholders and $49 million to creditors.

Its next steps were a possible sale of the company while it awaits a response from the US Government.

Ellume was founded by former Caboolture Hospital medic, Dr Sean Parsons.