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Item 7. Management’s Discussion and Analysis

2014-06-25 compared with 2013-03-22 · 174 added, 56 removed, 95 unchanged (71% of the section changed)

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Critical Accounting Policies and Estimates .

Critical Accounting Policy and Estimates.

Our Management’s Discussion and Analysis of Financial Condition and Results of Operations section discusses our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America.

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The most significant accounting estimates inherent in the preparation of our financial statements include estimates as to the appropriate carrying value of certain assets and liabilities which are not readily apparent from other sources.

These accounting policies are described at relevant sections in this discussion and analysis and in the notes to the financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2012.

Prior period correction in the three months ended December 31, 2013

Beginning in the three months ended June 30, 2012 and through the three months ended September 30, 2013, the Company improperly valued the potential beneficial conversion option of the Company’s convertible notes payable.

Based on ASC 470-20-30-16 through 30-18, the beneficial conversion option should have been valued based on the fair market value on the date of issuance and recorded as a debt discount.

The debt discount should have been amortized over the term of the convertible note (longest term was 6 months).

The accumulated impact of the correction was a charge to interest expense of $141,267 and a charge to debt discount on notes payable of $18,508 offset by a credit to additional paid in capital of $159,775.

In-addition, during the quarter ended June 30, 2013, the Company improperly recorded stock-based compensation issued to the Company’s former chief executive officer upon achievement of operational milestones for the Type2Defense product (see Note 10) as intellectual property.

Based on ASC 718-10 and ASC 505-50 this amount should have been classified as stock based compensation on the date earned.

The accumulated impact of the correction on the financial statements was a charge to stock based compensation of $231,600 and a credit to intellectual property of $231,600.

In accordance with the Securities and Exchange Commission's Staff Accounting Bulletin, or SAB, No.

99, Materiality, and SAB No.

108, the Company assessed the materiality of these charges to its financial statements for the quarters ended June 30, 2012 through September 30, 2013 and the year ended December 31, 2013, using both the roll-over method and iron-curtain method as defined in SAB No.

The Company concluded the effect of understating interest expense and share-based compensation was not material to its financial statements for the quarters ended June 30, 2012 through September 30, 2013 and the year ended December 31, 2013 and, as such, those financial statements are not materially misstated.

The Company also concluded that providing for the correction of the understatement in 2013 would not have a material effect on its financial statements for the year ending December 31, 2013.

The out-of-period adjustment at December 31, 2013 for the improperly valued beneficial conversion option of the Company’s convertible notes payable was a charge to interest expense of $141,267 and charge to debt discount on notes payable of $18,508 offset by a credit to additional paid in capital of $159,775 in the accompanying balance sheet and statement of operations.

The out-of-period adjustment at December 31, 2013 for improperly recording stock-based compensation issued to the Company’s former Chief executive officer upon achievement of operational milestones as intellectual property was a charge to stock based compensation of $231,600 and a credit to intellectual property of $231,600 in the accompanying balance sheet and statement of operations.

The impact of the misstatements on the previously issued financial statements and the effect of correcting the misstatements during the three months ended December 31, 2013 are summarized in Note 2 of the accompanying financial statements and notes.

Cash and Cash Equivalents

The Company considers all highly liquid debt instruments and other short-term investments with maturity of three months or less, when purchased, to be cash equivalents.

There were no cash equivalents as of December 31, 2013 and 2012.

The Company maintains cash balances at one financial institution that is insured by the Federal Deposit Insurance Corporation.

Recoverability of Long-Lived Assets

The Company reviews their long-lived assets on a periodic basis, namely intellectual property, whenever events and changes in circumstances have occurred which may indicate a possible impairment.

The assessment for potential impairment will be based primarily on the Company’s ability to recover the carrying value of its long-lived assets from expected future cash flows from its operations on an undiscounted basis.

If such assets are determined to be impaired, the impairment recognized is the amount by which the carrying value of the assets exceeds the fair value of the assets.

Fixed assets to be disposed of by sale will be carried at the lower of the then current carrying value or fair value less estimated costs to sell.

The Company evaluates the carrying value of goodwill during the fourth quarter of each year and between annual evaluations if events occur or circumstances change that would more likely than not reduce the fair value of the reporting unit below its carrying amount.

Such circumstances could include, but are not limited to (1) a significant adverse change in legal factors or in business climate, (2) unanticipated competition, or (3) an adverse action or assessment by a regulator.

When evaluating whether goodwill is impaired, the Company compares the fair value of the reporting unit to which the goodwill is assigned to the reporting unit’s carrying amount, including goodwill.

The fair value of the reporting unit is estimated using a combination of the income, or discounted cash flows, approach and the market approach, which utilizes comparable companies’ data.

If the carrying amount of a reporting unit exceeds its fair value, then the amount of the impairment loss must be measured.

The impairment loss would be calculated by comparing the implied fair value of reporting unit goodwill to its carrying amount.

In calculating the implied fair value of reporting unit goodwill, the fair value of the reporting unit is allocated to all of the other assets and liabilities of that unit based on their fair values.

The excess of the fair value of a reporting unit over the amount assigned to its other assets and liabilities is the implied fair value of goodwill.

We make critical assumptions and estimates in completing impairment assessments of goodwill and other intangible assets.

Our cash flow projections look several years into the future and include assumptions on variables such as future sales and operating margin growth rates, economic conditions, market competition, inflation and discount rates.

A 10% decrease in the estimated discounted cash flows for the reporting units tested would result in an impairment that is not material to our results of operations.

A 1.0 percentage point increase in the discount rate used would also result in an impairment that is not material to our results of operations.

We amortize the cost of other intangible assets over their estimated useful lives, which range up to ten years, unless such lives are deemed indefinite.

Intangible assets with indefinite lives are tested in the third quarter of each fiscal year for impairment, or more often if indicators warrant.

During the fiscal year ended December 31, 2013, the Company recorded impairment charge related to other intangible assets in the amount of $200,000.

During fiscal year 2012, we recorded no impairment charges related to other intangible assets.

Fair Value of Financial Instruments

The carrying amount reported in the balance sheets for cash, accounts payable, accrued expenses, and short-term notes payable approximate fair value because of the immediate or short-term maturity of these financial instruments.

The Company does not utilize derivative instruments.

Beneficial Conversion Features

ASC 470-20 applies to convertible securities with beneficial conversion features that must be settled in stock and to those that give the issuer a choice in settling the obligation in either stock or cash.

ASC 470-20 requires that the beneficial conversion feature should be valued at the commitment date as the difference between the conversion price and the fair market value of the common stock into which the security is convertible, multiplied by the number of shares into which the security is convertible.

This amount is recorded as a debt discount and amortized over the life of the debt.

ASC 470-20 further limits this amount to the proceeds allocated to the convertible instrument.

Revenue Recognition

The Company currently has no revenue.

Once the Company emerges from the development stage and generates revenue from the sales of our products, the following criteria for recognition will be utilized:

Persuasive evidence of an arrangement exists;

delivery has occurred or services have been rendered;

the seller’s price to the buyer is fixed or determinable, and

collectable is reasonably assured.

Share Based Compensation

The Company accounts for share-based compensation in accordance with the fair value recognition provisions of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) No.

For employees, directors and non-employees, the fair value of the stock compensation is based upon the measurement date as determined at either (a) the date at which a performance commitment is reached, or (b) at the date at which the necessary performance to earn the equity instruments is complete.

The Company has not issued any stock option or warrants.

Inventory is stated at the lower of cost (FIFO:

first-in, first-out) or market, and includes raw materials and finished goods.

The cost of finished goods includes the cost of packaging supplies, direct and indirect labor and other indirect manufacturing costs.

As of December 31, 2013, the Company had inventory of $24,879 comprise solely of the Type2Defense product.

On March 27, 2007, Bio-Solutions Corp.

(the “Company”) was incorporated in the State of Nevada.

The Company was a manufacturer of a pre-mix for chicken integrators called Nutra-Animal, a pre-mix anti-oxidant containing wheat middlings, vitamin E, calcium carbonate, silicone dioxyde, shrimp flour, sodium selenite and fish oil.

The Company is also the distributor of GreenEx ™ in Africa.

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GreenEx ™ formulations are produced in the United States to strict manufacturing specifications, ensuring that the products are of high quality and without any harmful contaminants.

On June 30, 2010, the board of directors approved the increase of the authorized shares of common stock from 75,000,000 to 90,000,000.

In addition the board approved a 1.20 to 1 stock split.

All shares have been reflected retroactively in accordance with SAB Topic 14C.

On September 26, 2011, the Company acquired all the assets and intellectual property rights of Type2 Defense, a natural dietary supplement formulated to support healthy glucose levels for type 2 diabetics and pre-diabetics.

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All inventories from the former products were written off as of October 1, 2011.

The Type 2 Defense product is currently under development with the initial shipment expected during the quarter ending June 30, 2013.

The Company elected to enter the development stage on October 1, 2011 and expects to emerge from the development stage during the quarter ending June 30, 2013.

During October 2012, the board of directors increased the number of common shares authorized from 90,000,000 to 200,000,000 shares.

The Company elected to enter the development stage on October 1, 2011.

The first production run of the Company’s Type 2 Defense product was completed during June 2013.

On July 8, 2013 the Company announced our product was available for on-line sales on Amazon.com.

On July 9, 2013, the Company announced our product was available for on-line sales from our www.Type2Defense.com website.

The first sale was completed in July 2013.

As the Company only had nominal sales in the three months ended September 30, 2013, they have remained in the development stage.

The Company will closely monitor their sales and determine at which point in time they will emerge from the development stage.

During June 2013, we completed our initial production run of approximately 1,800 cases of our Type2 Defense Product and launched our website.

With the launch of our website, we began generating nominal sales during July 2013.

Fulfillment will be handled by a third party fulfillment house.

We will likely require additional working capital to fully implement our business plan for 2014.

We have no commitment for additional funding.

On January 10, 2014, the Company’s Board of Directors unanimously voted to reverse split the Company’s common stock on the basis of one share of the Company’s common stock for each 10 shares outstanding while maintaining the authorized capital structure of the Company at 200,000,000 shares.

The Board resolution set the date of record for shareholder approval on January 14, 2014.

As of January 29, 2014, the Company obtained the written consent in lieu of a meeting of the shareholders to authorize a reverse split of the Company’s common stock.

Shareholders owning a total of 100,992,469 shares of the Company’s common stock voted in favor of the reverse split.

There were a total of 199,611,900 shares of common stock issued and outstanding as of January 14, 2014 (the date of record).

The number of shares of common stock voting in favor of the reverse split was sufficient for approval.

On February 4, 2014, the Company filed a Certificate of Change with the State of Nevada effecting a 1-for-10 reverse split pursuant to which every ten shares of the Company’s common stock were combined and converted into one share of the Company’s common stock (with all fractional shares resulting there from being rounded up to the next whole share) with the total number of shares of the Company’s authorized common stock remaining at 200,000,000 shares.

The effective date of the above corporate action was February 26, 2014, as approval by the Financial Industry Regulatory Authority.

Results of Operations.

Results of operations for the year ended December 31, 2013 compared to year ended December 31, 2012

We had no revenues or cost of revenues for the years ended December 31, 2012 and 2011.

We generated revenues of $224 for the year ended December 31, 2013 compare to no revenues for the year ended December 31, 2012.

We hope to generate substantial revenues, continue operations and implement our business plan by July 31, 2014.

The Company’s focus for 2014 will be the launch of the Type 2 Defense dietary supplement.

For the year ended December 31, 2013 we reported a $2,091 gross loss as a result our cost of product and warehousing expenses compared to no gross loss for the year ended December 31, 2012.

Operating Expenses.

For the year ended December 31, 2012, we had total operating expenses of $361,423.

This included professional fees of $355,656, and general and administrative expenses of $5,767.

For the year ended December 31, 2011, we had total operating expenses of $888,812.

This included professional fees of $788,855, general and administrative expenses of $14,669 and amortization expense and impairment totaling $85,288.

The 59% decrease from the year ended December 31, 2011 is primarily attributable to lower stock based compensation for professional fees as the Company moves towards generating cash from operations.

For the year ended December 31, 2013, we had total operating expenses of $1,267,193 as compared to total operating expenses of $361,423 for the year ended December 31, 2012.

The increase of $905,770 in operating expenses between the two periods is primarily due to an approximate $614,000 increase in professional fees paid for by the issuance of common stock for achieving certain operational milestones in the Type2Defense acquisition, investor relations, marketing and other services, a $200,000 write-off for our impaired Type2Defense intellectual property, an approximate $57,000 increase for other professional fees, an approximate $15,000 increase for sample shipments for marketing activities and an approximate $19,000 increase in other general and administrative expense.

We expect our operating expense to increase as we market our product and revenues grow.

We will continue to incur significant legal and accounting expenses related to being a public company.

Other Expenses.

We had $37,655 interest expense for the year ended December 31, 2012 compare to $10,374 interest expense for the year ended December 31, 2011.

The 263% increase is attribution to new convertible loans used for working capital.

We had $168,862 interest expense for the year ended December 31, 2013 compared to $37,655 interest expense for the year ended December 31, 2012.

The $131,207 or 348% increase is attribution to new convertible loans used for working capital and the $58,273 out-of-period adjustment at December 31, 2013 for the improperly valued beneficial conversion option of the Company’s convertible notes payable (see Note 2 in the Notes to the Financial Statements).

In addition, we had a $21,000 loss from conversion of debt for the year ended December 31, 2013.

For the year ended December 31, 2013, we had a net loss of $1,459,146 and a net loss per share of $0.10.

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Liquidity and Capital Resources.

At December 31, 2012, our current assets consisted of $1,076 in cash.

At December 31, 2012, we had no accounts receivables and our other assets totaling $206,600 applicable to the Type 2 Defense intellectual property.

At December 31, 2013, our current assets consisted of $711 in cash and $24,879 of inventory for our initial production run of our Type 2 Defense product.

At December 31, 2013, we had no accounts receivable.

Our total assets were $25,590.

At December 31, 2011, our current assets totaled $27,082 consisting of $82 in cash and $27,000 in prepaid expenses.

At December 31, 2011, we had no accounts receivables and our other assets totaling $206,600 applicable to the Type 2 Defense intellectual property.

At December 31, 2012, our current assets totaled $1,076 consisting of cash.

At December 31, 2012, we had no accounts receivable and our other assets totaling $206,600 applicable to the Type 2 Defense intellectual property.

Our total assets were $207,676.

Our current liabilities at December 31, 2013 totaled $223,348 consisting of $144,633 in accounts payable and accrued expenses, $6,000 for a short term loan, $1,672 for short term loans from related parties and $71,043 in convertible short-term loans.

Our current liabilities at December 31, 2012 totaled $185,476 consisting of $123,199 in accounts payable and accrued expenses, $1,597 for short term loans from related parties and $60,680 in convertible short-term loans.

Our current liabilities at December 31, 2011 totaled $419,704 consisting of $296,429 in accounts payable and accrued expenses, $41,500 for stock to be issued, $19,666 in short term loans, $49,158 for short term loans from related parties and $8,200 in convertible short-term loans.

An officer was due $4,751.

The decrease of $224,228 is primarily related to the resignation Gilles Chaumillon as President, Chief Executive Officer and Director of the Company.

Chaumillon agreed to settle his outstanding debt, interest and account payable balances of $227,811 for $10,000.

We had a working capital deficit in both 2013 and 2012 for $197,758 and 184,400, respectively.

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At December 31, 2013 and 2012, we had no other liabilities and no long term commitments or contingencies.

On August 18, 2011, a related party advanced $1,500 to the Company.

The advance is evidenced by a demand promissory note bearing interest at 5% per annum.

On August 27, 2011, the Company’s former President advanced $1,950 to the Company.

The advance is evidenced by a demand promissory note bearing interest at 5% per annum.

This note was canceled as part of the former President’s resignation agreement in June 2012.

On December 16, 2011, the Company was advanced $4,100 each from two unrelated parties.

The advances are evidenced by two equal convertible promissory notes bearing interest at 5% per annum with a due date on December 31, 2012.

In addition, at any time, the holders may convert the notes into shares of the Company’s common stock at an exercise price of $.0025 per share.

Material Commitments

On January 27, 2012, the Company issued a $1,000 (CAD) convertible note to the Company’s former president.

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This note was canceled as part of the former President’s resignation agreement in June 2012.

On May 10, 2012, the Company issued a $2,600 convertible note to the Company’s chief executive officer.

On May 10, 2012, the Company issued a $2,600 convertible note to the Company’s former Chief executive officer.

The loan bears interest at 5% and has a maturity date of November 15, 2012.

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In addition, at any time, the individual may convert the note into shares of the Company’s common stock at an exercise price of $.007 per share.

On January 25, 2013, the Company issued a $12,000 promissory note to an individual.

The loan bears interest at 5% and is payable on demand.

On January 28, 2013, the Company issued a $12,500 convertible note to an individual.

The loan bears interest at 5% and is payable on demand and may be converted at any time prior to December 31, 2013 into shares of the Company’s common stock.

On January 30, 2013, we issued a $7,500 convertible note to an individual.

The loan bears interest at 5% and has a maturity date of July 30, 2013.

In addition, at any time, the holder may convert the note into shares of our common stock at an exercise price of $.005 per share.

On February 20, 2013, we issued a $7,500 convertible note to an individual.

The loan bears interest at 5% and has a maturity date of August 20, 2013.

In addition, at any time, the holder may convert the note into shares of our common stock at an exercise price of $.005 per share.

On February 26, 2013, we issued a $12,500 convertible note to an individual.

The loan bears interest at 5% and is payable on demand and may be converted at any time prior to January 31, 2014 into shares of our common stock.

The conversion price shall be 80% of the average closing price of the stock for the ten (10) business days preceding the conversion notice.

The conversion price shall not be lower than $0.01 per share.

On January 30, 2013, the Company issued a $7,500 convertible note to an individual.

The loan bears interest at 5% and has a maturity date of July 30, 2013.

On April 30, 2013, the Company issued a $10,000 convertible note to an individual.

The loan bears interest at 5% and has a maturity date of October 30, 2013.

In addition, at any time, the holder may convert the note into shares of the Company’s common stock at an exercise price of $.005 per share.

On February 20, 2013, the Company issued a $7,500 convertible note to an individual.

On November 7, 2013, the Company agreed to modify the terms of the convertible promissory note to reduce the conversion price to $0.0015 per share.

On April 30, 2013, the Company issued a $10,000 convertible note to an individual.

The loan bears interest at 10% and has a maturity date of October 30, 2013.

In addition, at any time, the holder may convert the note into shares of the Company’s common stock at an exercise price of $.01 per share.

On November 7, 2013, the Company agreed to modify the terms of the convertible promissory note to reduce the conversion price to $0.0015 per share.

On May 27, 2013, the Company issued a $12,500 convertible note to an individual.

The loan bears interest at 5% and has a maturity date of November 27, 2013.

In addition, at any time, the holder may convert the note into shares of the Company’s common stock at an exercise price of $.005 per share.

On June 10, 2013, the Company issued a $6,500 convertible note to an individual.

The loan bears interest at 5% and has a maturity date of August 11, 2013.

In addition, at any time, the holder may convert the note into shares of the Company’s common stock at an exercise price of $.0065 per share.

On February 26, 2013, the Company issued a $12,500 convertible note to an individual.

The loan bears interest at 5% and is payable on demand and may be converted at any time prior to January 31, 2014 into shares of the Company’s common stock.

The conversion price shall be 80% of the average closing price of the stock for the ten (10) business days preceding the conversion notice.

The conversion price shall not be lower than $0.01 per share.

Plan of Operation

During 2013, we expect to expand our business with Type2 Defense product.

The legal and accounting costs of being a public company will continue to impact our liquidity and we will need to obtain funds to pay those expenses.

Other than the anticipated increases in legal and accounting costs due to the reporting requirements of being a reporting company, we are not aware of any other known trends, events or uncertainties, which may affect our future liquidity.

Our auditors have questioned our ability to continue operations as a “going concern”.

We hope to obtain significant revenues from future product sales.

In the absence of significant sales and profits, we will seek to raise additional funds to meet our working capital needs principally through the additional sales of our securities.

However, we cannot guarantee that we will be able to obtain sufficient additional funds when needed, or that such funds, if available, will be obtainable on terms satisfactory to us.

As a result, our auditors believe that substantial doubt exists about our ability to continue operations.

On June 10, 2013, the Company issued a $6,222 convertible note to an individual.

The loan bears interest at 5% and has a maturity date of August 11, 2013.

In addition, at any time, the holder may convert the note into shares of the Company’s common stock at an exercise price of $.0065 per share.

On June 10, 2013, the Company issued a $6,500 convertible note to an individual.

The loan bears interest at 5% and has a maturity date of August 11, 2013.

In addition, at any time, the holder may convert the note into shares of the Company’s common stock at an exercise price of $.0065 per share.

On June 18, 2013, the Company issued a $12,500 convertible note to an individual.

The loan bears interest at 5% and has a maturity date of December 18, 2013.

In addition, at any time, the holder may convert the note into shares of the Company’s common stock at an exercise price of $.005 per share.

On August 2, 2013, the Company issued a $10,000 convertible note to an individual.

The loan bears interest at 5% and has a maturity date of February 2, 2013.

In addition, at any time, the holder may convert the note into shares of the Company’s common stock at an exercise price of $.005 per share.

On December 10, 2013, the Company issued a $3,000 convertible note to an individual.

The loan bears interest at 5% and has a maturity date of June 10, 2014.

In addition, at any time, the holder may convert the note into shares of the Company’s common stock at an exercise price of $.015 per share.

On December 10, 2013, the Company issued a $5,000 convertible note to an individual.

The loan bears interest at 5% and has a maturity date of June 10, 2014.

In addition, at any time, the holder may convert the note into shares of the Company’s common stock at an exercise price of $.015 per share.

On April 8, 2014, the Company issued a $21,000 convertible note to an individual.

The loan bears interest at 8% and has a maturity date of October 8, 2014.

In addition, at any time, the holder may convert the note into shares of the Company’s common stock at an exercise price of $.0065 per share.

On May 8, 2014, the Company issued a $21,000 convertible note to an individual.

The loan bears interest at 8% and has a maturity date of November 8, 2014.

In addition, at any time, the holder may convert the note into shares of the Company’s common stock at an exercise price of $.0065 per share.

On May 28, 2014, the Company issued a $10,000 convertible note to an individual.

The loan bears interest at 5% and has a maturity date of November 28, 2014.

In addition, at any time, the holder may convert the note into shares of the Company’s common stock at an exercise price of $.0065 per share.

Our Plan of Operation for the Next Twelve Months.

We have finalized our formulations;

production of our Type 2 production has commenced and we are in the final stages of launching our website.

With the completion of our first production run in April 2013 and launch of our website, we expect to generate sales by the fiscal quarter ended June 30, 2013.

We elected to enter the development stage on October 1, 2011.

The first production run of our Type 2 Defense product was completed during June 2013.

On July 8, 2013 we announced our product was available for on-line sales on Amazon.com.

On July 9, 2013, we announced our product was available for on-line sales from our www.Type2Defense.com website.

The first sale was completed in July 2013.

The product will sell for $24.95 per box.

Fulfillment will be handled by a third party fulfillment house.

We will most likely require additional working capital to fully implement our business plan for 2013.

We have no commitment for additional funding.

Our business strategy for the next twelve months will be to implement on-line sales of our Type2 Defense product.

On December 19, 2013, we hired Peggy Freeman Knight as our executive vice-president of marketing and chief marketing officer.

Knight has over 20 years of retail experience with Walmart Stores Inc.

and Sam’s Club.

Knight will head-up our Marketing efforts in 2014.

As we only had nominal sales in the twelve months ended December 31, 2013, we have remained in the development stage.

We will closely monitor our sales and determine at which point in time they will emerge from the development stage.

Our business strategy for the next twelve months will be to implement retail on-line sales of our Type2 Defense product and increase our marketing efforts.

At December 31, 2013 we had nominal cash which will not be sufficient to satisfy our working capital requirements for the next twelve months.

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However, our officer, directors and principal shareholders are not committed to contribute funds to pay for our expenses.

There can be no assurance that we will be able to secure additional debt or equity financing and if available, will be offered on terms acceptable to the Company.

Even assuming that we secure adequate financing, there can be no assurance that we will be profitable at any time in the future.

During 2014, we expect to expand our business with Type2 Defense product.

The legal and accounting costs of being a public company will continue to impact our liquidity and we will need to obtain funds to pay those expenses.

Our auditors have questioned our ability to continue operations as a “going concern”.

We hope to obtain significant revenues from future product sales.

In the absence of significant sales and profits, we will seek to raise additional funds to meet our working capital needs principally through the additional sales of our securities.

However, we cannot guarantee that we will be able to obtain sufficient additional funds when needed, or that such funds, if available, will be obtainable on terms satisfactory to us.

As a result, our auditors believe that substantial doubt exists about our ability to continue operations.

Off-Balance Sheet Arrangements.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis