Going Concern and Management's Plans

6 Months Ended

Jun. 30, 2016

Going Concern and Management's Plans [Text Block]

2. Going Concern and Management’s Plans

For the six months ended June 30, 2016 and 2015, the Company incurred net losses of approximately $3.9 million and $4.2 million, respectively, and cash used in operations was approximately $4.1 million and $3.9 million, respectively. Further, the Company had net current liabilities of $8.7 million as of June 30, 2016 and accumulated deficit of approximately $90.2 million and $82.5 million as of June 30, 2016 and 2015, respectively, due to recurring losses since the inception of our business.

The Company must continue to rely on proceeds from debt and equity issuances to pay for ongoing operating expenses in order to execute its business plan. On March 28, 2016, the Company completed a common stock financing for $10.0 million. On July 6, 2016, the Company entered into a Common Stock Purchase Agreement with Seven Star Works Co. Ltd. (“SSW”) for a common stock financing of $4.0 million, and on August 11, 2016, the Company entered into a Common Stock Purchase Agreement with Harvest Alternative Investment Opportunities SPC (“Harvest”) for a common stock financing of $4.0 million. Although the Company believes it has the ability to raise funds by issuing debt or equity instruments, additional financing may not be available to the Company on terms acceptable to the Company or at all or such resources may not be received in a timely manner.

These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements have been prepared assuming that the Company will continue as a going concern and, accordingly, do not include any adjustments that might result from the outcome of this uncertainty.