RE:Financial statement is a concernscienceguy36 wrote: Just doing my due diligence as was thinking of buying this stock but now holding off as posted on Cedar the last financial statement is a concern even though they just raised $23 million in share allotment. Reconnaissance Energy Africa Ltd (formerly Lund Enterprises Corp.) Consolidated Financial Statements December 31, 2019 Material Uncertainty related to Going Concern We draw attention to Note 1 in the financial statements, which indicates that the Company incurred a net loss of $3,121,578 during the year ended December 31, 2019. As stated in Note 1, this event or condition, along with other matters as set forth in Note 1, indicate that a material uncertainty exists that may cast significant doubt on the Companys ability to continue as a going concern. Our opinion is not modified in respect of this matter. These consolidated financial statements (Financial Statements) have been prepared on a going concern basis, which assumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business in the foreseeable future. The Company incurred a net loss of $3,121,578 and as at December 31, 2019, has a working capital of $2,177,127 and a cash balance of $2,547,025. The Companys ability to continue as a going concern is dependent on managements ability to identify additional sources of capital and to raise sufficient resources to fund on-going operating expenses and commitments. Although management has been successful in raising capital in the past, there is no assurance these initiatives will be successful in the future. These conditions indicate the existence of material uncertainties that may cast significant doubt regarding the applicability of the going concern assumption. These Financial Statements do not give effect to adjustments that would be necessary to the carrying values and classification of assets and liabilities should the Company be unable to continue as a going concern. As always due your own due diligence
Granted they will be burning a lot of cash once they start drilling but 8 years of cushion at the previous year's burn rate is hardly anything to be concerned about.