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2. Management Plans - Capital Resources
9 Months Ended
Sep. 30, 2015
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Management Plans - Capital Resources

The Company reported an operating loss of $394,021 and a net loss of $688,289 for the nine months ended September 30, 2015 as compared to operating income of $73,038 and a net loss of $197,966 for the nine months ended September 30, 2014.

 

The Company's primary source of liquidity is cash provided by collections of accounts receivable and its factoring line of credit.  At September 30, 2015, the Company had approximately $90,000 of availability under this line.  During the nine months ended September 30, 2015, the Company financed its business activities principally through sales with recourse of accounts receivable and loans aggregating $185,000 from a director and from an officer of the Company.

 

The Company’s working capital deficit increased from approximately $1,032,000 at December 31, 2014 to approximately $2,161,000 at September 30, 2015 principally due to the scheduled maturity on January 1, 2016 of notes payable of $419,300 to related parties and $150,000 to others which total $569,300.  We also originated a short-term secured promissory note in the principal amount of $80,000 in February 2015 in connection with the purchase of UberScan software.  The note has a balance of $65,000 at September 30, 2015.  We plan to renegotiate the terms of these notes payable, seek funds to repay the notes or use a combination of both alternatives.  On August 24, 2015, the Company entered into an amendment of a note payable to Dan Cappa for $175,000 previously due on January 1, 2016, and extended the maturity date to August 31, 2018.

 

The Company believes the capital resources available under its factoring line of credit, cash from additional related and third party loans and cash generated by improving the results of its operations provide sources to fund its ongoing operations and to support the internal growth the Company expects to achieve for at least the next 12 months.  However, if the Company does not continue to maintain or improve the results of its operations in future periods, the Company expects that additional working capital will be required to fund its business.  Although the Company has no assurances, the Company believes that related parties, who have previously provided working capital, will continue to provide working capital loans on similar terms, as in the past, as may be necessary to fund its on-going operations for at least the next 12 months.

 

If the Company experiences significant growth in its sales, the Company believes that this may require it to increase its financing line, finance additional accounts receivable, or obtain additional working capital from other sources to support its sales growth.  There is no assurance that in the event the Company needs additional funds that adequate additional working capital will be available or, if available, will be offered on acceptable terms.