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Going Concern
9 Months Ended
Jun. 30, 2012
Going Concern [Text Block]

Note 10.                 Going Concern


The accompanying condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate our continuation as a going concern. Since inception, we have reported net losses, including losses of approximately $1.6 million and $5.2 million during the years ended September 30, 2011 and 2010, respectively. We have reported a net loss of $316,483 during the nine months ended June 30, 2012. We expect to report net losses in the foreseeable future until we are able to generate meaningful cash revenues from operations. At June 30, 2012, our working capital deficit and accumulated deficit were approximately $1.1 million and $55.5 million, respectively. Net cash used by operating activities was $1,194,439 during the nine months ended June 30, 2012, compared to $560,150 for the nine months ended June 30, 2011. During the nine months ended June 30, 2012, we have funded our operations through sales of our common stock in the amount of $1,050,520, preferred stock in the amount of $660,935, and proceeds from notes payable in the amount of $53,000.


Investment funds received have been insufficient to continue certain operating activities, which has led to postponement in the deployment of our business strategy and the scaling back of research and development activities. We continue at reduced staffing levels as we focus on raising capital and engaging prospective customers. Without additional funding, our cash is estimated to support our operations through October 2012. These factors raise substantial doubt about our ability to continue as a going concern. There is no assurance that our efforts to procure financing will provide adequate cash to execute our business plan and satisfy our working capital requirements in sufficient amounts or with favorable terms. Without the needed funding or adequate cash flow from operations, we may be forced to curtail our development or cease our operations altogether, which may include seeking protection under the bankruptcy laws. The accompanying condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or amounts and classifications of liabilities that may result from the outcome of this uncertainty.