Going Concern

3 Months Ended

Sep. 30, 2011

Going Concern

Going Concern

3. Going Concern

The primary source of financing for the Company since its inception has been through the issuance of equity and debt securities. The accompanying financial statements have been prepared assuming the Company will continue as a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. As of September 30, 2011, the Company has a stockholders’ deficit of $5,887,321.  Management recognizes it will be necessary to continue to generate positive cash flow from operations and have availability to other sources of capital to continue as a going concern and has implemented measures to increase profitability and has committed to sell or has sold certain operations, using such sale proceeds to repay debt. Additionally, management believes the acquisition of new, more profitable operations in new lines of business and the further reduction of certain operating expenses will have positive impact on cash flow. Management also recognizes that its inability to repay outstanding debt could result in foreclosure on the assets of the Company.

As mentioned above, the Company sold certain of its subsidiaries and used the proceeds to repay debt. On August 19, 2011, the Company closed the sale of Nexus and used $1,733,917 from the sale proceeds to repay debt. On October 31, 2011, the Company closed the sale of Safety and used $12,651,910 from the sale proceeds to repay debt (see Note 14 - Subsequent Events). After the debt repayments indicated above, the Company has outstanding debt of approximately $5,985,000 at October 31, 2011.

Forbearance Agreement with YAGlobal Investments, L.P.

On October 26, 2011, YA agreed to a extention of the forbearance agreement until April 30, 2012 on the balance of the remaining debt owed them. If the Company is unable to repay this debt or reach an agreement with YA as to other alternatives to satisfy this debt, and a foreclosure were to take place, it would have a material adverse effect on the Company’s continuing operations, its liquidity, its capital resources and its stockholders.

As a condition to the entry to the Agreement, the Company has undertaken to cause its subsidiaries, PMX and CSS to enter into an agreement pursuant to which they will guarantee the Company’s obligations to the Lender and grant a security interest in their assets.

During the course of fiscal year 2012, it remains management’s intention to continue to explore all options available to the Company to repay its remaining debt in full, convert the debt to equity, undertaking private placements of its securities and making significant expense reductions where ever possible.