This a legal & accounting standard requirement when the net assets of a firm + reasonably anticipated profit do not cover the next 12 months of operations. These judgments are based on historic performance, not future promises or possibilities. The historic performance of 4DS is that it does not cover costs through sales, but rather through CR's, so this is essentially saying that a CR will be needed if the firm is to continue for the next 12 months as it has for the last several years.
The auditing standard requires an auditor to audit on the basis of what is called "going concern" which underpins the value of assets used in the statements. This assumes that assets are disposed of in the normal course of business rather than in a fire-sale when a business is wound up or liquidated, hence if a firm does not have the resources to last for 12 months (i.e. until the next audit) without the injection of more funds (eg. a CR, etc) necessitating a wind up of the firm then the basis for asset values is potentially flawed and the valuation used to calculate net assets could be wrong.
Given these kinds of firms regularly go back to market and raise more funds as required this kind of notice is a formality, unless you believe the market will not be prepared to inject additional funds through a CR.
It is also worth noting that many assets such as patents are impossible to accurately value until they are sold or licensed, so the asset values could be just as easily undervalued as overvalued in the balance sheet.
Essentially the notice is a legal formality unless you believe there will be some reason why the firm will not be able to raise the additional funds required to operate through the next 12 months either through a CR, issuing debt, achieving sales, or acquisition, etc.
4DS Price at posting:
13.0¢ Sentiment: Buy Disclosure: Held
