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

As of June 30, 2017, we had $1,097,000 of cash and a working capital deficit of $8,667,000. Our cash balance as of June 30, 2017 includes restricted cash of $18,000 (as discussed in Note 4). For the six months ended June 30, 2017, we incurred a net loss of $1,258,000 and generated net cash provided by operating activities of $29,000. We generated cash flow from operations even though we incurred a net loss as our net loss includes non-cash operating expenses that are added back to our cash flow from operations (as shown on the condensed consolidated statements of cash flows). A substantial portion of our cash flow from operations has been dedicated to the payment of interest on our indebtedness, thereby reducing our ability to use our cash flow to fund our operations, capital expenditures and investments in sales and marketing. For the six months ended June 30, 2017 and 2016, our cash flow from operations was reduced by $542,000 and $563,000, respectively, for interest payments on our indebtedness.

On July 31, 2017, the Company completed a recapitalization of its existing debt obligations as described further in Note 6 (the “Debt Recapitalization”). As a result of the Debt Recapitalization, the Company eliminated $9,362,000 of debt and accrued interest obligations and improved its working capital position as of July 31, 2017. After completion of the Debt Recapitalization, the Company’s cash position was approximately $1,270,000 as of July 31, 2017. The Company anticipates continued declines in its revenue and reduced cash flow from operations that will require additional capital to fund investments in product development, sales and marketing expenses and capital expenditures to reverse its revenue trends. Therefore, the Company plans to raise capital in one or more offerings. There can be no assurance we will succeed in raising necessary capital or that any such offering will be on terms acceptable to the Company. If we cannot raise additional capital on terms acceptable to us, it could have a material adverse effect on the Company. The factors discussed above raise substantial doubt as to our ability to continue as a going concern. The accompanying condensed consolidated financial statements do not include any adjustments that might result from these uncertainties.