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LIQUIDITY AND MANAGEMENT'S PLAN
9 Months Ended
Jun. 30, 2017
Liquidity And Management Plan [Abstract]  
LIQUIDITY AND MANAGEMENT'S PLAN

NOTE B — LIQUIDITY AND MANAGEMENT’S PLAN

 

The Company has recurring net losses, which have resulted in an accumulated deficit of $233,818,477 as of June 30, 2017. The Company incurred a net loss of $10,001,089 and generated negative operating cash flow of $6,565,280 for the nine month period ended June 30, 2017. The Company also had working capital of $5,738,584 and cash and cash equivalents of $2,402,809 as of June 30, 2017. The Company’s current capital resources include cash and cash equivalents, accounts receivable, and inventories. Historically, the Company has financed its operations principally from the sale of equity securities. As discussed in Note E, on November 7, 2016, the Company closed a private placement of common stock and warrants to purchase common stock, for aggregate gross proceeds of $5 million, before deducting placement agent fees and offering expenses. Total net proceeds were approximately $4.3 million. On June 28, 2017, the Company entered into subscription agreements in connection with a private placement of common stock for aggregate gross proceeds of $1,805,000. Total net proceeds were approximately $1,771,000. Included in the aggregate proceeds was $1,505,000 in stock subscriptions receivable as of June 30, 2017. Proceeds of $505,000 related to the stock subscriptions receivable were received from July 1, 2017 through the date of filing of this Form 10-Q, and therefore were reflected as an asset in the condensed consolidated balance sheet. The Company agreed to extend the payment term of $1,000,000 with respect to one investor for an additional 30 days to August 28, 2017, and therefore this amount is reflected as a reduction of stockholders’ equity in the condensed consolidated balance sheet.

 

The Company expects to finance operations and capital expenditures primarily through cash received from the November 2016 and June 2017 private placements, and the collection of its current accounts receivables. The Company estimates that it will have sufficient cash and cash equivalents to fund operations for the next twelve months from the balance sheet date.

 

The Company may require additional funds to expand the marketing and complete the continued development of its products, product manufacturing, and to fund expected additional losses from operations, until revenues are sufficient to cover the Company’s operating expenses. If revenues are not sufficient to cover the Company's operating expenses, and if the Company is not successful in obtaining necessary additional financing, it will most likely be forced to reduce operations.