QXL, the one-time star internet company, yesterday admitted that its cash crisis meant it is now relying on a series of tax rebates to stay in business.
The listed online auction group said that its status as a "going concern" was dependent not only on the tax money but also on a number of other factors going its way.
Reporting an £18.7m loss for the year ended 31 March, QXL warned that there was "fundamental uncertainty" about all these assumptions, which include current trading trends continuing and further cost-savings from a restructuring programme coming through.
The company, once worth well over a £1bn, is now worth just £1.2m.
Robert Dighero, chief financial officer, said that although the company's cash position was "tight", it would not be able to continue to trade as a going concern if it was close to insolvency.
"If we believed there was no prospect of profitability, we'd be making a different statement," he said.
He said the company was hoping for tax rebates and credits from a number of countries, including the UK. He added that the total money due was in the "hundreds of thousands ... but that sum was quite a lot of money for a company in our cash position".
QXL had a cash balance of £2.7m on 31 March. The cash burn rate for the last reported quarter was £2m, leaving the company with little cash now. QXL insisted that its underlying business was "strong", with three of the 11 European countries in which it operates - Denmark, Norway and Switzerland - in profit.
The company was forced to exclude the results from its profitable Polish business from the figures reported yesterday, following a legal dispute over who owns that venture. QXL said it had been "defrauded". QXL's group management authorised the local managers in Poland to issue shares in that country's business. The local managers then issued stock to themselves and now claim ownership of 92 per cent of the Polish entity. There is a criminal and civil case going on in Poland over the disputed ownership.
QXL said that, if its short-term assumptions do not work out, it will have to sell assets - it is thought that it could only sell its operations in the three profitable countries.
Mr Dighero said that additional funding from third parties was also a possibility - he said that QXL's predicament gave investors the opportunity to "get in cheap".