Quarterly report pursuant to sections 13 or 15(d)

2. Going Concern

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2. Going Concern
6 Months Ended
Jun. 30, 2013
Notes to Financial Statements  
2. Going Concern

 

2.   Going Concern

 

At June 30, 2013, the Company had a working capital deficit of $5.5 million and an accumulated deficit of $154.6 million.  The Company has continued to sustain losses from operations and has not generated positive cash flow from operations since inception.  During the six months ended June 30, 2013, the Company raised approximately $1.6 million, net of expenses, from the sale of its equity securities.  In addition, as more fully described in note 7, at various times subsequent to May 15, 2013 the Company was not in compliance with one of the covenants contained in its senior lending agreement, for which the Company entered into a waiver and amendment agreement on August 14, 2013. This agreement reduced the minimum cash balance requirement under the terms of  the senior lending agreement from $1 million to $0.5 million for the period between May 15, 2013 and August 31, 2013, after which time the minimum cash balance requirement reverts to $1.0 million. The Company cannot provide any assurances if and when it will be able to attain profitability.  These conditions, among others, raise substantial doubt about the Company’s ability to continue operations as a going concern.  No adjustment has been made in the condensed consolidated interim financial statements to the amounts and classification of assets and liabilities which could result should the Company be unable to continue as a going concern.