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Going Concern Evaluation | 9 Months Ended
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Sep. 30, 2017
Organization Consolidation And Presentation Of Financial Statements [Abstract] |
Going Concern Evaluation | 4. Going Concern Evaluation In connection with preparing consolidated financial statements for the three and nine months ended September 30, 2017, management evaluated whether there were conditions and events, considered in the aggregate, that raised substantial doubt about the Company’s ability to continue as a going concern within one year from the date that the financial statements are issued. The Company considered the following:
| • | Operating losses for ten consecutive quarters.
| • | Negative cash flow from operating activities for six consecutive quarters.
| • | Depressed stock price resulting in being non-compliant with NASDAQ listing rules to maintain a stock price of $1.00/share.
| • | Stockholders’ equity being less than $2.5 million at March 31, 2017 and June 30, 2017 resulting in being non-compliant with NASDAQ listing rules.
Ordinarily, conditions or events that raise substantial doubt about an entity’s ability to continue as a going concern relate to the entity’s ability to meet its obligations as they become due. The Company evaluated its ability to meet its obligations as they become due within one year from the date that the financial statements are issued by considering the following:
| • | The Company raised $4 million of debt financing during the year ended December 31, 2016.
| • | The Company has raised funds from short-term loans from insiders.
| • | As a result of the Company’s restructurings that were implemented during the three months ended December 31, 2016, and again during the six months ended June 30, 2017, the Company’s cost structure is now in line with its future revenue projections. See Footnote 11 below for additional details regarding restructurings.
| • | On September 29, 2017, the Company completed a $5.5 million preferred stock transaction, which converted $2.8 million of long term and short-term debt (face value) into equity and raised $2.7 million of new equity capital.
Management believes that the Company will generate enough cash from operations to satisfy its obligations for the next twelve months. The Company will take the following actions, if it starts to trend unfavorably to its internal profitability and cash flow projections, in order to mitigate conditions or events that would raise substantial doubt about its ability to continue as a going concern:
| • | Raise additional funds through short-term loans.
| • | Implement additional restructuring and cost reductions.
| • | Raise additional capital through a private placement.
| • | Secure a commercial bank line of credit.
| • | Dispose of one or more product lines.
| • | Sell or license intellectual property.

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- Definition The entire disclosure when substantial doubt is raised about the ability to continue as a going concern. Includes, but is not limited to, principal conditions or events that raised substantial doubt about the ability to continue as a going concern, management's evaluation of the significance of those conditions or events in relation to the ability to meet its obligations, and management's plans that alleviated or are intended to mitigate the conditions or events that raise substantial doubt about the ability to continue as a going concern. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 40 -URI http://asc.fasb.org/subtopic&trid=51888271 + Details
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