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Going Concern
6 Months Ended
Jul. 31, 2012
Going Concern

3.       Going Concern

 

The Company's condensed consolidated financial statements are prepared using the generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has generated a net loss from operations of $63,026 and $116,179 for the three and six months ended July 31, 2012 respectively, compared to a net loss from operations of $83,339 and $270,783 for the three and six months ended July 31, 2011, respectively. As of July 31, 2012 the Company has an accumulated deficit of $5,477,889 and a total stockholders’ deficit of $3,608,107.

 

The financial statements do not include any adjustments relating to the recoverability and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

 

To date the Company has funded its operations from internally generated cash flow and external sources, the proceeds from the Senior Secured Note and the convertible notes which have provided funds for near-term operations and growth. The current operating plan indicates that losses from operations may be incurred for all of fiscal 2013, the maturing of $270,000 of Senior Secured Notes on September 15, 2012 and October 15, 2012, and the maturing of $1,250,000 in 10% Senior Subordinated Convertible Notes on January 31, 2013. Consequently, we may not have sufficient liquidity necessary to sustain operations for the next twelve months and this raises substantial doubt that we will be able to continue as a going concern. The Company intends to seek to raise additional capital through public or private equity financings, partnerships, joint ventures, disposition of assets, debt financings, bank borrowings or other sources of financing.

 

No assurances can be made that management will be successful in achieving its plan. If the Company is not able to raise substantial additional capital in a timely manner, the Company may be forced to cease operations.