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LIQUIDITY AND MANAGEMENT'S PLAN
9 Months Ended
Jun. 30, 2019
Liquidity And Managements 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 $255,271,848 as of June 30, 2019. The Company incurred a net loss of $7,398,988 and incurred negative operating cash flow of $5,085,130 for the nine month period ended June 30, 2019. The Company also had working capital deficiency of $368,799 and cash and cash equivalents of $507,146 as of June 30, 2019. These factors raise substantial doubt about the Company’s ability to continue as a going concern for one year from the issuance of the financial statements. The ability of the Company to continue as a going concern is dependent on the Company’s ability to further implement its business plan, raise capital, and generate revenues. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

 

On July 17, 2019, the Company closed $1.5 million in gross proceeds in secured convertible notes (the “July 2019 Notes”), and simultaneously amended the terms of its secured convertible notes issued on August 31, 2018 and November 29, 2018 (“the Existing Notes”) to, among other amendments, reduce the conversion price of the Existing Notes to $0.54 to have the same conversion price of the July 2019 Notes and to facilitate their conversion into equity. The July 2019 Notes and the Existing Notes have a maturity date of November 28, 2021. Under the terms of the July 2019 Notes, the investor retains the option to make additional investments in the Notes over the next 90 calendar days. The Company expects to use the net proceeds for general corporate purposes. See “Note E – Secured Convertible Notes Payable” for more information.

 

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 and equity-linked securities.

 

On January 29, 2019 and January 30, 2019 the Company received written notices from the Listing Qualifications Department of The NASDAQ Stock Market LLC (“Nasdaq”) notifying it that the Company was not in compliance with the minimum bid price requirement as well as the market value of listed securities requirement, or the alternative standards of Nasdaq Listing Rule 5550(b)(1) or 5550(b)(3) which require the Company to have minimum stockholders equity of $2.5 million or for it to have had net income from continuing operations of at least $500,000 in the latest fiscal year or in two of the last three fiscal years. Both notification letters state that the Company has 180 calendar days, or until July 29, 2019 to regain compliance. There is the possibility for an additional 180-day compliance period for the minimum bid price compliance violation. However, no additional compliance period is applicable to the market value of listed securities or alternative standards noncompliance.

 

On July 30, 2019, the Company, received written notice from Nasdaq indicating that, based upon the Company’s continued non-compliance with the minimum bid price and $35 million market value of listed securities requirements, as set forth in Nasdaq Listing Rules 5550(a)(2) and 5550(b)(2), respectively, as of July 29, 2019, the staff of Nasdaq (the “Staff”) had determined to delist the Company’s securities (including its common stock, $0.001 par value (“Common Stock”) and listed warrants) from The Nasdaq Capital Market unless the Company timely requests a hearing before the Nasdaq Hearings Panel (the “Panel”). The Company requested a hearing before the Panel, which stays any further action by the Staff at least pending the ultimate conclusion of the hearing process. During the pendency of the requested hearing before the Panel, the Company’s listed securities will remain listed on Nasdaq. The hearing is scheduled for September 19, 2019.

 

The Company is diligently working to evidence compliance with all applicable requirements for continued listing on The Nasdaq Capital Market and intends to submit a plan to that effect to the Panel as part of the hearing process; however, there can be no assurance that the Panel will grant the Company’s request for continued listing on Nasdaq or that the Company will be able to regain compliance with the applicable listing criteria within the period of time that may be granted by the Panel.