Liquidity and Capital Resources
During the six month period ended June 30, 2008 the Company used $6,689,531 of cash in operating activities. Most of this amount was to finance the operating loss but in addition there was an amount of $1,532,000 to pay back owed salaries accrued on the company books in prior periods. At June 30, 2008 we used $3,060,000 to pay back on their due date two notes issued to Whitebox in 2006 and 2007.
At June 30, 2008, we had cash, cash equivalents, restricted cash equivalents and marketable securities available for sale of $9,466,034. We believe that current cash and cash equivalents and marketable securities, together with cash receipts generated from sales of the SuperStitch products, will be sufficient to meet anticipated cash needs for operating and capital expenditures through at least December 31, 2008. Nevertheless, we expect to continue to incur substantial costs and cash outlays in 2008 and beyond to support SuperStitch research and development. In 2009 we will require additional funding to continue our operations and will attempt to raise the required capital through either debt or equity arrangements. We cannot provide any assurance that the required capital will be available on acceptable terms, if at all, or that any financing activity would not be dilutive to our current stockholders. If we are not able to raise additional funds, we would likely be required to significantly curtail or halt our operations and this would have a material adverse effect on our financial position, results of There can be no assurance that any of these funding will be consummated in the timeframes needed for continuing operations or on terms favorable to us. If adequate funds are not available, we will be required to significantly curtail our operating plans and/or possibly cease operations.
