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Going Concern Matters
6 Months Ended
Jun. 30, 2011
Going Concern Matters [Abstract]  
Going Concern [Text Block]
Note I – Going Concern Matters

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.  As shown in the financial statements, we incurred losses in the first six months of 2011 and 2010 of $1,598,000 and $1,257,000, respectively.  Additionally, we incurred losses from operations in the years of 2010 and 2009 of $2.4 million and $2.7 million, respectively.  The continuing losses raise substantial doubt about our ability to continue operating as a going concern..

We are currently working with a number of large customers who are using our technologies to evaluate their microdisplay production or are evaluating our technology for the inspection of LCD displays and components.  We expect that additional sales orders will be placed by these customers in the fourth quarter of 2011 and into 2012, provided that markets for these products continue to grow and the customers continue to have interest in our technology-assisted inspection systems.  Ultimately, our ability to continue as a going concern will be dependent on these large companies getting their emerging display technology products into high volume production and placing sales orders with us for inspection products to support that production.  However, there can be no assurance that we will be succesful in securing sales orders sufficient to continue operating as a going concern.

From November 2006 through August 25, 2011, we have used $9,719,804 of Class 2 and Class 3 Notes to fund operations.  $4,953,632 are Class 3 Notes, all of which are in default as of September 1, 2011.  $4,766,172 are Class 2 Notes,  $290,000 of which are in default as of September 1, 2011. We continue to need need to negotiate forbearance or a cure of the defaults and continue to need to raise additional funds for operations in the third quarter of 2011.  Certain note holders have continued to fund operations while their notes are in default, but the limited basis of the funding is causing us to fall behind with vendors not essential to our daily operations or production. We have $158,120 of over 90 days in accounts payable as of June 30, 2011.  We are presently negotiating potential orders that would allow us to deliver $2,000,000 to $2,500,000 of inspection systems in the fourth quarter of 2011 and throughout 2012.  Management believes there are opportuinities with other customers for additional orders that would allow us to maintain that pace through 2012. We have already raised $387,000 in operating capital in the third quarter and if these orders were to materialize we expect that we will need to raise up to an additional $500,000 of operating capital through November of 2011 to ramp up production and support and to get to the cash flow from the orders.  If the anticipated orders do not materialize, we will need to raise up to $2,500,000 to fund operations through the third quarter of 2012 and continue to defer interest and principle payments on existing debt to continue to fund operations.  These levels of required capital may be beyond the means of existing noteholders and would cause us to seek new investors, which could result in a restructuring of current positions.

For further information regarding our obligations, see Note C – Long Term Debt and Other Financing Arrangements and Note J – Subsequent Events.

The financial statements do not include any adjustments that might be necessary should we be unable to continue as a going concern.