DD Support Board and Research Team

[elbiatcho1]

firing whoever decided it was a good idea to use toxic debt

I'd blame the CFO. But Saleen seems to not have good business sense.

/S/ Steve Saleen Chief Executive Officer and Director July 14, 2015
Steve Saleen

/S/ David J. Fiene Chief Financial Officer & Secretary July 14, 2015
David J. Fiene

/S/ Jeffrey Kraws Director July 14, 2015
Jeffrey Kraws

/S/ Joe Amato Director July 14, 2015
Joe Amato

"Not generating funds from operations to cover current production and operating expenses..."
And with tons of the other baggage, its done. What a mess.
Surprised they still have 22 workers as of June 30, 2015.

As further presented in our consolidated financial statements and related notes, during the year ended March 31, 2015, we incurred a loss from operations of $5,321,929 and utilized $2,549,895 of cash in operations. We also had a stockholders’ deficit and working capital deficit of $9,669,225 and $7,050,664, respectively as of March 31, 2015, and as of that date, we owed $745,503 in past unpaid payroll and other taxes; $933,271 of outstanding notes payable were in default; $1,204,840 of accounts payable was greater than 90 days past due; and $288,900 is owed on past due rent. In addition, in May 2015, we received a complaint from Citizens Business Bank alleging breach of our loan agreement with the bank and breach of a commercial guaranty by Steve Saleen and demanding full payment of principal, interest and fees of $369,302. A default under the loan agreement triggers a cross default under our 3% Senior Secured Convertible Notes and 7% Convertible Notes (see Note 5 to our consolidated financial statements) enabling the holders thereof to, at their election until the later of 30 days after such default is cured or otherwise resolved or the holder becomes aware of such cure or resolution, accelerate the maturity of that indebtedness. In addition, we currently do not maintain workers’ compensation, product liability and other general insurance. These factors raise substantial doubt about our ability to continue as a going concern.



Our ability to continue as a going concern is dependent upon our ability to raise additional capital and to ultimately achieve revenues at a level that will achieve profitably and generate positive cash flows from operations. At March 31 and July 8, 2015, we had cash on hand in the amount of $143,803 and approximately $21,000, respectively, and we are not generating funds from operations to cover current production and operating expenses and will have to obtain additional financing. We have utilized funding to operate the business during the year ended March 31, 2015 with funds obtained from $1,702,656 of customer deposits received in advance of shipment from orders placed by customers; received $500,000 advance royalities from an Intellectual Property License Agreement; raised $1,289,409 through the issuance of convertible notes; received $295,000 through the issuance of notes payable of which $195,000 came from related parties; and obtained cash from sales of Common Stock through entering into Subscription Agreements with individual accredited investors (the “Subscribers”) pursuant to which the Subscribers purchased from us an aggregate of 1,183,334 of restricted common shares at a per share price of $0.15 for aggregate proceeds of $177,500. However, we will need and are currently seeking additional funds, primarily through the issuance of debt or equity securities for production and to operate our business through and beyond the date of this filing of Form 10-K. No assurance can be given that any future financing will be available or, if available, that it will be on terms that are satisfactory to us. Even if we are able to obtain additional financing, it may contain undue restrictions and covenants on our operations, in the case of debt financing or cause substantial dilution for our stockholders (including the issuance of securities sufficient to result in a change in control of our company), in the case of convertible debt and equity financing.