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NOTE 4 GOING CONCERN
6 Months Ended
Jun. 30, 2011
Liquidity Disclosure [Policy Text Block]
NOTE 4  GOING CONCERN

The Company’s consolidated financial statements are prepared using GAAP applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business.  The Company has incurred significant losses from its inception through June 30, 2011, which have resulted in a deficit accumulated during the development stage of $25,842,561 at June 30, 2011.  The Company has funds sufficient to cover its operating costs for the next few months, has a working capital deficit of $2,670,174, and has relied exclusively on debt and equity financing.  Accordingly, there is substantial doubt about its ability to continue as a going concern.  

Continuation of the Company as a going concern is dependent upon obtaining additional funds and ultimately, upon the Company’s attaining profitable operations.  The Company will require a substantial amount of additional funds to complete the development of its products, hospital beta testing, commercialization, and to fund additional losses, until revenues are sufficient to cover the Company’s operating expenses. If the Company were unsuccessful in any of the additional funding noted below, it would most likely be forced to substantially reduce or cease operations.

As discussed in Note 7, the Company entered into a Common Stock Purchase Agreement (“Stock Purchase Agreement”) and established an equity line financing facility (or “Equity Line”).  Management does not anticipate needing to draw the full amount of the Equity Line to implement our business plan and to develop and market its disinfection technologies.  The Company believes that it will need approximately $3 million during the year ending December 31, 2011 for research, development, marketing, and related activities, as well as for general corporate purposes, including final product development and initiation of sales.  Pursuant to the Stock Purchase Agreement with Mammoth Corporation (“Mammoth”), the frequency and amounts of draws are within the Company’s control.  The Company is not obligated to make any draws, and the Company may draw any amount up to the full amount of the Equity Line, in its discretion.  The Company does not plan to draw more funds (and correspondingly put more shares to Mammoth) under the Equity Line than is necessary to implement its business plan.  During the six-months ended June 30, 2011, the Company drew $717,012 (net of a one-time administrative fee of $4,300 as discussed in Note 7) of the Equity Line through the issuance of 4,231,932 shares of common stock at prices ranging from $0.10875 to $0.192 per share (after consideration of the 25% discount as discussed in Note 7).  

Also, during the six-months ended June 30, 2011, the Company raised a total of $500,000 through the sale of 5,750,000 shares of common stock (of which 125,000 shares are subscribed for) as of June 30, 2011, at prices ranging from $0.08 to $0.12 per share.  These funds, as well as the Equity Line funds, have been used to keep the Company current in its reporting obligations under the SEC Exchange Act of 1934 (“Exchange Act”) and to pay certain other corporate obligations including the final costs of development for the production version of its AsepticSure™ hospital disinfection system.  In addition, if the Company were to need additional resources outside the Equity Line, the Company believes the Company would be able to continue to raise additional funds from some of the same investors who have purchased shares previously, although the Company has no current agreements with these investors and there is no assurance given that these investors will in fact purchase additional shares.

The ability of the Company to continue as a going concern is dependent on its ability to successfully accomplish the plan described in the preceding paragraphs and eventually attain profitable operations.  The consolidated financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result from the outcome of these uncertainties.