Going Concern and Management’s Plan
Our independent registered public accounting firm included an explanatory paragraph in their report on our 2009 financial statements related to the uncertainty and substantial doubt of our ability to continue as a going concern.
We have incurred net losses since inception, and as of September 30, 2010 we have cash and cash equivalents of $1.4 million, negative working capital of $3.3 million, and accumulated deficit of $86.5 million. Based on our operating plan, we expect that our existing cash and cash equivalents, along with the $500,000 milestone payment we received on October 29, 2010, will fund our operations only through December 31, 2010.
These conditions raise substantial doubt about our ability to continue as a going concern. The accompanying financial statements have been prepared assuming that we will continue as a going concern. This basis of accounting contemplates the recovery of our assets and the satisfaction of liabilities in the normal course of business.
Our management plans to address the expected shortfall of working capital by securing additional funding through equity financings, strategic alternatives or similar transactions. There can be no assurance that we will be able to obtain any sources of funding. If we are unsuccessful in securing funding from any of these sources, we will defer, reduce or eliminate certain planned expenditures.