Post by
tamaracktop on Apr 01, 2023 11:17am
just the facts
For those that don't read financials. I didn't write this, the company's auditors did: Raymond Chabot Grant Thornton LLP Suite 2000 National Bank Tower 600 De La Gauchetire Street West Montral, Quebec H3B 4L8 T 514-878-2691 Going concern The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company has incurred operating losses and negative cash flows from operations and, as a result, has an accumulated deficit as of December 31, 2022. These conditions, along with other matters as set forth in Note 2, indicate the existence of a material uncertainty that may cast significant doubt about the Companys ability to continue operating as a going concern. Management's plans in regard to these matters are also described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. The Company has incurred, in the last years, operating losses and negative cash flows from operations, and as a result, the Company has an accumulated deficit of $93,384,858 as at December 31, 2022 ($61,217,831 as at December 31, 2021). Furthermore, there have been unexpected delays in the collection of certain accounts receivable from contracts closed in a prior year. This has resulted in a shortfall in cash flows from operating activities that would be used in funding the Companys operations. As at December 31, 2022, the Company has working capital of $1,650,709 ($14,006,785 as at December 31, 2021) including cash and cash equivalents of $3,445,649 ($12,202,513 as at December 31, 2021). The working capital is net of an allowance for credit losses amounting to $5,023,283 ($520,000 as at December 31, 2021) as further described in notes 9 and 10. The Companys business plan is dependent upon the successful completion of contracts and also the receipt of payments from certain contracts closed in a prior year and expects these payments to be made during fiscal 2023, as well as the achievement of profitable operations through the signing, completion and delivery of additional contracts or a reduction in certain operating expenses. In the absence of this, the Company is dependent upon raising additional funds to finance operations within and beyond the next twelve months. The Company has been successful in securing financing in the past and has relied upon external financing to fund its operations, primarily through the issuance of equity, debt and convertible debentures. The Company completed a private placement in October 2022 for an amount of $1,318,980 and also completed another private placement in March 2023 for $5,000,000 (see note 33). While the Company has been successful in securing financing, raising additional funds is dependent on a number of factors, some of which are outside the Companys control, and therefore there is no assurance that it will be able to do so in the future or that these sources will be available to the Company or that they will be available on terms which are acceptable to the Company. These conditions indicate the existence of a material uncertainty that may cast significant doubt about the Companys ability to continue operating as a going concern.