MZEI: Medizone International Inc. is insolvent .....
MEDIZONE INTERNATIONAL, INC.
FORM 10-Q, September 30, 2017
Total current assets.......................$409,934
Total current liabilities.................$4,903,803
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Shareholder Update
Posted on December 4, 2017
Capital Structure and Development
Currently, our cash balance is insufficient to appropriately support the business building activities and operations that are necessary to achieve adoption and use of AsepticSure® in the various targeted industry markets and geographic regions.
At the end of First Quarter, 2017 we had approximately $23,000 in cash. As a result of the private placement offering conducted during the Spring, we ended Second Quarter, 2017 with approximately $59,000 in cash. In September, the board of directors approved another private placement offering, which resulted in our ending Third Quarter, 2017 with $60,500 in cash. The September private placement offering remains available to qualified investors and we encourage any potentially interested shareholders to contact me ([email protected]) regarding participation in this offering.
Overall, we need a minimum capital raise of approximately $5 million, which will enable us to ensure that we are operating our business successfully, focused on growth in value, while addressing various longer-term, existing accounts payables. Currently, I and others in management, the board of directors and, various consultants are deferring all salary payments and work-related expenses. We are focused on what we consider are most critical to support our regulatory efforts [i.e., FDA 510(k) and various country-specific requirements], maintaining compliance with all financial regulatory reporting requirements, working to establish a commercialization basis for AsepticSure® and, securing additional capital to support the business.
In order to raise additional capital, we need a supportive capital structure. In December 2016, you approved a 500 million authorized share count. Considering current obligations and previous share/warrant reserves, we have approximately 40 million shares available to use in any further capital raise. At our current share price, this share count will probably only support a capital raise of up to $1 million – far short of our needs. The value of our current share count relative to possible capital raise will improve as we achieve increased share price.
Over the near-term, we expect to report on the upcoming FDA meeting, addressing the 510(k) approval-path for AsepticSure®. In addition, we hope to report additional participation in the current private placement offering. There are also various business building activities underway that may solidify, providing us with additional encouraging news to report.
In order to raise the capital necessary to support moving the AsepticSure® business forward to achieve the success we all seek, additional share count authorization will likely be required. We are reviewing our current capital structure, evaluating various options that will support our long-term needs as a profitable, operating business.
Ultimately, the best way to increase our shareholder value is to report consistent, growing revenues resulting from sales and application of AsepticSure® technology. However, the various steps outlined in this update have to be successfully completed in order for such success to proceed. This is our focus and represents our goals.
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Going Concern
Our unaudited condensed interim consolidated financial statements included in this report on Form 10-Q have been prepared with the assumption that we will continue as a going concern. There is substantial doubt that we will be able to continue as a going concern. Through the date of this report on Form 10-Q, we have relied almost exclusively upon financing from the sale of our equity securities to sustain operations. Additional financing will be required if we are to continue as a going concern. If we do not obtain additional financing in the near term, we will be required to curtail or discontinue operations, or seek protection under U.S. bankruptcy laws. Even if additional financing becomes available, there can be no assurance that it will be on terms favorable to us. In any event, this additional financing will likely result in immediate and possibly substantial dilution to existing stockholders.
Forward-Looking Statements and Risks
The statements contained in this report on Form 10-Q that are not historical are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements discuss our expectations, hopes, beliefs, anticipations, commitments, intentions and strategies regarding the future. They may be identified by the use of the words or phrases that include “believes,” “expects,” “anticipates,” “should,” “plans,” “estimates,” and “potential,” among others. Forward-looking statements include, but are not limited to, statements contained in Management’s Discussion and Analysis of Financial Condition and Results of Operations regarding our financial performance, revenue and expense levels in the future and the sufficiency of existing liquidity to fund future operations and capital spending needs. Actual results could differ materially from the anticipated results or other expectations expressed in such forward-looking statements for the reasons detailed in our Annual Report on Form 10-K for the year ended December 31, 2016.
We believe that many of the risks discussed in our previously issued SEC filings are part of doing business in the industry in which we operate and will likely be present in all periods reported. The fact that certain risks are endemic to the industry does not lessen their significance. The forward-looking statements contained in this report are made as of the date of this report and we assume no obligation to update them or to update the reasons why actual results could differ from those projected in such forward-looking statements.
Among others, risks and uncertainties that may affect our business, financial condition, performance, development, and results of operations include:
·Rigorous government scrutiny and regulation of our products and planned products;
·Potential effects of adverse publicity regarding ozone and related technologies or industries;
·Failure to sustain or manage growth including the failure to continue to develop new products; and
·The potential inability to obtain needed financing or to obtain funding on terms favorable to us.
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MZEI UNABLE TO MAKE ANY HOSPITAL SALES IN FIRST 5+ YEARS
TO DATE, NOT ONE (1) SALE TO A HOSPITAL NOR ONE (1) HOSPITAL SERVICE CONTRACT HAS BEEN REPORTED, WORLDWIDE (The manufacture of the first production machine was announced back in April 2012)
