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Operating Matters and Liquidity
9 Months Ended
Sep. 30, 2011
Operating Matters and Liquidity
Note 2—Operating Matters and Liquidity

The Company has experienced net operating losses since its inception through September 30, 2011, including a net loss of $3.6 million for the nine months then ended, contributing to an accumulated deficit of $101 million as of September 30, 2011. The Company has borrowings of $11.0 million at September 30, 2011 and $3.3 million of available funds under its line of credit with Pyxis Innovations Inc., an affiliate of Alticor (“Pyxis”). Borrowings under the line of credit become due on June 30, 2012.

The Company continues to take steps to further reduce operating costs including consulting, research and personnel expenses. In addition the Company has reduced its costs of processing genetic tests in its laboratory by working with suppliers to develop more efficient raw materials such as equipment processing plates. The Company’s current laboratory space is deemed to be adequate and able to process high volumes of genetic tests.

The Company expects that its current and anticipated financial resources, including the $3.3 million available under its credit facility with Pyxis, are adequate to maintain current and planned operations through June 30, 2012, however, if the Company is not successful in capital raising efforts, partnering negotiations, extending the due date of its debt or in generating additional revenues, it will not be able to fund operations beyond June 30, 2012. The Company continues to attempt to raise additional capital, seek additional streams of revenue, extend the due date of its debt and improve sales with new and existing channels. The Company expects to meet its goals in these areas and generate the additional cash needed to fund operations into 2013 and beyond, however, there can be no assurance that it will be able to do so.
 
The ability of the Company to realize the carrying value of its fixed assets and intangible assets depends on its ability to successfully execute on its long-term business plan. As noted in the preceding paragraph, the Company needs to generate additional funds in order to meet its financial obligations beyond June 30, 2012. If it is unsuccessful in doing so, the Company may not be able to realize the carrying value of its fixed assets and intangible assets.