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See the below from the last half year report (page 18):

Non-current Liabilities:
Performance fees receivable – Blue Sky managed funds $37,13,000 (an Increase of $8,293,000)
Receivables from Blue Sky managed funds $22,521,000 (an increase of $2,885,000)

As Blue Sky operate on an accrual basis, once they earn the fee (ie, the assets of the fund get re-valued upward), they are entitled to the fees, however they do not get paid until they realise the cash, hence why they are in the non-current liabilities. So they put the number into their revenue and call it earnings for that year.

None of the above is untoward or inappropriate, thats just how accounting works. HOWEVER, if the assets that have been re-valued cannot be realised - they never get paid the fees.

So of the $8,524,000 of profit reported in the last half year report, $11,178,000 hasn't been collected and they do not anticipate that they will collect it within 12 months. So essentially if you ignore the "paper profits" from funds, the business lost $2,654,000 for the first 6 months of the year - hence why Glaucus has targeted this company for a short.