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Going Concern Analysis
6 Months Ended
Jun. 30, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Going Concern Analysis

Note 2 – Going Concern Analysis

 

Going Concern Analysis

 

The Company had a net loss from operations of $3,177,956 and $1,182,246 for the six months ended June 30, 2017 and the year ended December 31, 2016, respectively. As a result, prior to the Bristol financing (as described below), these conditions had raised substantial doubt regarding our ability to continue as a going concern beyond August 2018. As of June 30, 2017, we had cash and working capital deficit (excluding the derivative liability) of $2,918,778 and $189,128, respectively.

 

Effective December 1, 2016, upon the Board of Directors of the Company receiving an independent third-party fairness opinion, the Company entered into the Purchase Agreement with Bristol Investment Fund, Ltd. (the “Purchaser”), an entity controlled by the Chairman of the Company’s Board of Directors, pursuant to which the Company sold to the Purchaser, for a cash purchase price of $2,500,000, securities comprising: (i) the Debenture, (ii) Series A Warrants, and (iii) Series B Warrants. Pursuant to the Purchase Agreement, the Company paid $25,000 to the Purchaser and issue to the Purchaser 500,000 shares of Common Stock with a grant date fair value of $85,000 to cover the Purchaser’s legal fees.

 

If necessary, management also believes that it is probable that external sources of debt and/or equity financing could be obtained based on management’s history of being able to raise capital coupled with current favorable market conditions. As a result of management’s plans, the Company believes the initial conditions which raised substantial doubt regarding the ability to continue as a going concern have been alleviated. Therefore, the accompanying condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern.

 

The condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the matters discussed herein. While the Company believes in the viability of management’s strategy to generate sufficient revenue, control costs and the ability to raise additional funds if necessary, there can be no assurances to that effect. The Company’s ability to continue as a going concern is dependent upon the ability to further implement the business plan, generate sufficient revenues and to control operating expenses.