No sufficient funds to cover working cap expenditures 2020Material Uncertainty Related to Going Concern
I draw attention to Note 1 in the financial statements, which indicates that the Company incurred a net loss of $5,146,870 during the period ended December 31, 2019 and, as of that date, the Company had not yet achieved profitable operations, had accumulated losses of $15,779,705 since its inception, and expects to incur further losses in the development of its business. As stated in Note 1, these events or conditions, along with other matters as set forth in Note 1, indicate that a material uncertainty exists that may cast significant doubt on the Company’s ability to continue as a going concern. My opinion is not modified in respect of this matter.
SUMMARY
$5.15 million LOSS in 2019
$6.49 million in liabilities ! that leads to a working capital deficit of $6 million ! How are they going to pay the bills with only $86,499 CASH ???
$526,000 revenue and that's only from grants (taxpayer money)! they haven't sold a single battery!
Marketing expense: $1,121,020 WOW their marketing expenses ten-folded from 2018!!!
Interest expense: $601,891 that tripled!
Compensation paid to key management: $887,197 tripled as well!
OVERALL PERFORMANCE
The Company’s operations are not currently revenue generating and the Company will need to continue to rely on its ability to obtain the necessary financing through grants and other financings to complete the development of zinc-air flow batteries.
To date the Company has been funded through government grants and shareholder funding for research and development. As at December 31, 2019 the Company did not have sufficient funds to cover working capital expenditures for the next 12 months. The Company will need additional funding to continue the development of its zinc-air technology. Zinc8 has no capital commitments for the next 12 months, and in order to execute the Company’s business strategy the Company will need to continue capital development through research and development. The Company expects to fund its future capital requirements through additional government grants and shareholder funding.
As at December 31, 2019, the Company had an accumulated deficit of $15,779,705 (December 31, 2018 - $10,632,835) and expects to incur further losses in the development of its business, all of which casts significant doubt about the Company’s ability to continue as a going concern. The continued operations of the Company are dependent on its ability to generate future cash flow or obtain additional financing. Management is of the opinion that sufficient working capital will be obtained from external financing and loans from a shareholder of the Company to meet the Company’s liabilities and commitments as they become due, although there is a risk that additional financing will not be available on a timely basis or on terms acceptable to the Company.