This is somewhat concerning:
12
Note 1
Summary of Significant Accounting Policies (continued)
Reclassifications
Certain accounts in the prior-year financial statements have been reclassified for comparative purposes to conform with the presentation in the current-period financial statements.
Fair Value of Financial Instruments
The recorded amounts of financial instruments, including cash equivalents, accounts receivable, accounts payable, accrued expenses, and long-term debt approximate their market values as of the six months ended November 30, 2011 and the fiscal years ended May 31, 2011 and 2010. The Company has no investments in derivative financial instruments.
Note 2
Going Concern
The Company has recurring losses and has a deficit accumulated during the development stage of $36,663,368 as of November 30, 2011. This condition raises substantial doubt about the Company’s ability to continue as a going concern.
The Company’s financial statements are prepared using the generally accepted accounting principles applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, the Company has no significant current source of revenue. Without realization of additional capital, it would be unlikely for the Company to continue as a going concern.
The Company’s management plans on raising cash from private debt or equity financing on an as needed basis and in the longer term, revenues from the development of business opportunities and sales of patented alloy products. The Company’s ability to continue as a going concern is dependent on these additional cash financings, and ultimately, upon achieving profitable operations.
