Note 17 - Going Concern
The Company has incurred significant losses over the last three years and has a significant accumulated deficit. These operating losses create an uncertainty about the Company’s ability to continue as a going concern for a period of twelve months from the date these unaudited condensed consolidated financial statements are issued. Management has evaluated whether the unaudited condensed consolidated financial statements should be presented as a going concern which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.
The unaudited condensed consolidated financial statements have been prepared on a going concern basis. In making this assessment, management conducted a comprehensive review of the Company’s affairs including, but not limited to:
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The Company’s financial position at June 30, 2019 which includes $0.6 million of working capital; |
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Significant events and transactions the Company has entered into, including and through the date the unaudited condensed consolidated financial statements were available to be issued; |
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The loss from operations includes $4.2 million related to non-cash stock compensation; |
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Sales and profitability forecasts for the Company for the next financial year; |
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The continued support of the Company’s members and lenders. |
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The repayment of the line of credit with proceeds from a new $6.2 million loan. To address the future additional funding requirements members have undertaken the following initiatives: |
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To continue to monitor the Company’s ongoing working capital requirements and minimum expenditure commitments; |
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Continue their focus on maintaining an appropriate level of corporate overhead in line with the Company’s available cash resources. |
Management is confident that it will be able to meet its minimum expenditure commitments and support its planned level of overhead expenditures. There can be no assurance however that the Company will be able to raise additional capital when needed, or at terms deemed acceptable, if at all. The accompanying unaudited condensed consolidated financial statements do not include any adjustments related to the recoverability and classification of asset amounts or the classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
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