XML 47 R8.htm IDEA: XBRL DOCUMENT v3.19.3.a.u2
Going Concern and Management's Plans
6 Months Ended
Dec. 31, 2019
Going Concern and Management's Plans [Abstract]  
GOING CONCERN AND MANAGEMENT'S PLANS

(2) GOING CONCERN AND MANAGEMENT'S PLANS

 

The accompanying financial statements are prepared assuming the Company will continue as a going concern. As of December 31, 2019, the Company had an accumulated deficit of $133,604,128, a stockholders' deficit of $1,244,462 and a working capital deficiency of $963,072. For the six months ended December 31, 2019, net loss totaled $532,448. The net cash used in operating activities for the six months ended December 31, 2019 totaled $301,320. These matters raise substantial doubt about the Company's ability to continue as a going concern for a period of twelve months from the date these financial statements are issued. The ability of the Company to continue as a going concern is dependent upon increasing sales and obtaining additional capital and financing. While the Company believes in the viability of its strategy to increase sales volume and in its ability to raise additional funds, there can be no assurances to that effect. The Company received CTLM® CFDA approval effective November 16, 2018 to November 15, 2023 as disclosed in the Company's Form 8-K filing on December 11, 2018. However, there can be no assurance that we will obtain U.S. Food and Drug Administration ("FDA") marketing or other new international marketing clearances, that the CTLM® will achieve market acceptance or that sufficient revenues will be generated from sales of the CTLM® to allow us to operate profitably. If our majority shareholder Viable International Investments, LLC ("Viable") fails to continue funding, the Company would be materially adversely affected and may have to cease operations due to a lack of funding. These matters affect the Company's liquidity profile, and management's plans in those regards are discussed in the paragraphs that follow.

 

During fiscal year 2020, we anticipate that losses from operations will continue until we begin to generate revenues through the sales of CTLM® systems in China. These losses will be primarily due to an anticipated increase in marketing, manufacturing and operational expenses associated with the international commercialization of the CTLM®, expenses associated with FDA approval processes, and the costs associated with advanced product development activities.

 

The Company's next focus, after having obtained CFDA approval in China, is on obtaining marketing clearance of its CTLM® Breast Imaging System through the FDA. The premarket approval ("PMA") process for U.S. marketing clearance is expected to take longer than the Chinese process and will resume after successful marketing and sales of CTLM® systems in China. Sales revenues in China are not expected to begin until the second or third quarter of fiscal 2020. No sales in other countries are expected in the near future and until after obtaining FDA marketing clearance.

 

In analyzing the regulatory path forward, timeline, and costs associated with the level of effort required to upgrade the Company's Quality Management System, we have decided not to renew our CE mark (required for sales in the European Union) for this year and to consider reapplying in 2 to 3 years to avoid these regulatory fees. We will maintain our ISO 13485:2016 certification which will allow us to pursue FDA marketing clearance and the CE Mark in the future.

 

On October 23, 2019, the Company entered into a consulting agreement ("the Agreement") effective as of November 1, 2019, with Dr. Huabei Jiang to serve as IDSI's Chief Scientific Consultant. Pursuant to the Agreement, Dr. Jiang is focusing on improving the technical performance and image quality of IDSI's Computed Tomography Laser Mammography (CTLM®) breast imaging device. The details of the Agreement were disclosed on the Form 8-K filed with the SEC on October 29, 2019.

 

The Company's ability to continue as a going concern and its future success is dependent upon its ability to raise additional capital in the near term to: (1) satisfy its current obligations, (2) continue its research and development efforts, and (3) successfully develop, market, and sell its products. The Company believes that it will be able to complete the necessary steps in order to meet its cash flow requirements throughout fiscal 2020 and continue its development and commercialization efforts. However, there can be no assurance that IDSI will generate sufficient revenue to provide positive cash flows from operations or that sufficient capital will be available, when required, to permit the Company to realize its plans. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.