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Note 1. Organization and Basis of Presentation: Substantial Doubt about Going Concern (Policies)
9 Months Ended
Sep. 30, 2016
Policies  
Substantial Doubt about Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.  The Company has negative working capital of approximately $2,737,000 at September 30, 2016, and has incurred recurring losses and negative cash flow from operations for the nine months ended September 30, 2016 and years ended December 31, 2015 and 2014.  Moreover, while the Company expects to arrange for financing with lending institutions, there can be no assurances that the Company will have the ability to do so.  The Company has borrowed money from third parties and related parties and expects to be able to generate future cash from the exercises of common stock options and warrants, new debt and equity issuances.  The Company has substantially slowed payments to trade vendors, and has renegotiated payment terms with several existing and prior vendors to lengthen the time and/or reduce the amount of cash to repay these trade payables.  In 2014, 2015 and early 2016, the Company issued new equity for total cash realized of approximately $1.4 million.  In 2013, 2014 and again in 2015, the Company modified all outstanding warrants to enhance their exercisability and realized a total of $246,000 in exercises in 2013 and 2014.  In October 2015, the Company extended the expiration date of all outstanding warrants for exactly one year.  Beginning in March 2014, the Company’s operations in Volusia County, Florida, which at the time represented substantially all of its revenue, were voluntarily delayed while the Company employed additional personnel and moved assets to its new site in Bradley, Florida.  When operations resumed in Bradley in June 2014, this reduction in revenue materially reduced available cash to fund current or prior expenses incurred, and has remained at this lower level or decreased over subsequent periods to date.

 

For the next twelve months the Company expects to have adequate cash to sufficiently fund operations from cash generated from equity and convertible debt issuances, exercises of outstanding warrants and options and by focusing on existing and expected new sources of revenue, though there can be no assurances the Company will do so.  The Company continues to pursue opportunities with strategic partners for the development and commercialization of the N-Viro Fuel technology both domestically and internationally.  In addition, the Company is focusing on the development of regional biosolids processing facilities, and currently is in negotiations with potential partners to permit and develop independent, regional facilities.  First, the Company requires a funding source to enable the development of processing facilities, and expect this to happen by early 2017 at an estimated cost of $100,000.  Within six months after financing, the Company expects sales of new equipment and other sources of up-front revenue to provide additional sources of revenue, with the start up of the facility in late 2017, then to increase capacity to planned levels and full production by the beginning of 2018.  At that time the Company expects these new facilities to provide adequate levels of cash to fund operations without additional equity or debt issuances.  These factors raise substantial doubt about the Company’s ability to continue as a going concern.