MMRGlobal, Inc. (fka MMRF)

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From 10Q

Liquidity and Capital Resources

As of June 30, 2013, our current liabilities exceeded our current assets by $8.4 million. We have incurred net losses of $1,146,952 and $1,374,615 for the three months ended June 30, 2013 and 2012, respectively, and $2,658,773 and $2,958,816 for the six months ended June 30, 2013 and 2012, respectively. At the current level of borrowing, we require cash of $275,000 per year to service our debt. Furthermore, not including debt service, in order to continue operating our business, we use an average of $278,000 in cash per month, or $3.3 million per year. At this rate of cash burn including financing activities combined with growth in sales, over the next twelve months, including our existing current assets will sustain our business for approximately six months.

In addition to the above cash burn from operations, we will be required to obtain additional financing in order to meet the obligations for installment payments of $621,000 under the Creditor Plan and our obligations under the secured indebtedness to The RHL Group under the Seventh Amended Note (which had a balance of $1,376,065 at June 30, 2013), amongst other debt obligations. Such obligations are currently due and payable pursuant to the terms of the notes. The components of the RHL Group Note payable and the related balance sheet presentation as of June 30, 2013 are as follows: $960,666, which is included in the line of credit, related party; and $415,399 for other obligations due to The RHL Group, which is included in related party payables.

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Traditionally, we have relied on the sale of stock and convertible debt as well as draws from the RHL Group line of credit to finance our activities. As of June 30, 2013, we had a line of credit with The RHL Group in the amount of $4.5 million. As of June 30, 2013, availability under this line of credit was $1.71 million. Furthermore, we may utilize portions of our standby equity facility with Granite as needed. Additionally, we raised $1,386,250 and $956,000 in convertible debt during 2013 and 2012, respectively. We expect to continue offering a limited amount of convertible debt in 2013. We also expect sales from MMRPro, our prepaid Personal Health Record cards, and fees from patent licensing agreements to generate revenue and reduce annual cash burn from operations.