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Note 2. Financial Condition
9 Months Ended
Sep. 30, 2013
Financial Condition [Abstract]  
Financial Condition [Text Block]

2.   Financial Condition. Our viability as a company is dependent upon successful commercialization of products resulting from its research and product development activities. However, our inability to commercialize a product has had a profoundly negative impact on the financial condition of the Company. On October 31, 2013 (the Petition Date), Amarillo Biosciences, Inc. (AMAR, ABI or the Company) filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code (the Bankruptcy Code), in the United States Bankruptcy Court for the Northern District of Texas (the Bankruptcy Court or the Court). The Chapter 11 Case number is 13-20393-11.


No assurance can be given as to the value, if any, that may be ascribed to the Debtor’s various pre-petition liabilities and other securities. The Company cannot predict what the ultimate value of any of its securities may be and it remains too early to determine whether holders of any such securities will receive any distribution in the Debtor’s reorganization. In particular, in most cases under Chapter 11 of the Bankruptcy Code, holders of equity securities receive little or no recovery of value from their investment. Accordingly, the Debtors urge that caution be exercised with respect to existing and future investments in any of these securities or other Debtor claims. On November 4, 2013, the Company’s common stock began trading under the symbol “AMARQ” on the OTCQB marketplace, operated by OTC Markets Group (www.otcmarkets.com).


The Company is currently operating as “a debtor in possession” (DIP) under the jurisdiction of the Bankruptcy Court and the applicable provisions of the Bankruptcy Code. In general, a debtor in possession under the Bankruptcy Code, the Debtor is authorized to continue to operate as an ongoing business but may not engage in transactions outside the ordinary course of business without the prior approval of the Bankruptcy Court. The Bankruptcy Code enables the Company to continue to operate its business without interruption and the Bankruptcy Court will be asked to grant additional relief covering, among other things, obligations to (i) employees, (ii) taxing authorities, (iii) insurance providers, and (vi) certain vendors deemed critical to the Debtor’s operations.


Under Section 362 of the Bankruptcy Code, the commencement of a Chapter 11 case automatically stays most creditor actions against the Debtor’s property.


Court filings and claims information are available at http://www.upshotservices.com/amarillobiosciences. See also “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Chapter 11 Proceedings” for further information regarding the Chapter 11 Cases. Commercialization of a product or products will require significant development, laboratory and clinical testing and capital investment prior to obtaining regulatory approval to commercially market our product(s). Continued losses and lack of liquidity indicate that we were having great difficulty being able to continue as a going concern. The ability to continue as a going concern is dependent upon confirmation of an executable Plan of Reorganization by the Court and approval of creditors. A major component of the plan is recapitalization of the Company.