Note 4 – Management Plan

Historically, the Company has relied upon public offerings and private placements of common stock to raise operating capital. During the year ended December 31, 2017, the Company raised $9,478,897, net of expenses, in public and private offerings and an additional $981,948, net of expenses, from the exercise of warrants (Note 13). As of March 16, 2018, the Company had realized an additional $4,909,081 from the exercise of warrants, had cash and marketable securities of approximately $8.94 million and working capital of approximately $11.19 million.

The 2017-19 Strategic Business Plan (“Strat Plan”) was presented to and approved by the Board of Directors on December 12, 2016. The plan outlines the Company’s business objectives for the next three years and sets measurable targets for new product releases, sales and marketing programs to increase market penetration for the Company’s products and operational expense management.

Implementation of the Strat Plan began in January 2017 and management remains confident that the objectives are achievable. The Company’s Go To Market (“GTM”) plan, revised annually, supports the implementation of the Strat Plan by defining specific tasks, products and customer targets designed to achieve the Plan’s revenue goals. The Company anticipates achieving a cash-flow positive position during the second quarter of 2018 based upon the revenue targets as outlined in the GTM and Strat Plan.

During the year ended December 31, 2016, the Company significantly reduced operating expenses through a systematic review of operations throughout the organization. As a result, the Company achieved a reduction in its weekly operating cash requirements of approximately 19% to $80,253 (2015: $98,699).

The Company has achieved the reduction in weekly cash requirements by renegotiating contracts with key consultants and canceling consulting agreements where the cost-benefits are negligible, working with vendors to reduce or eliminate minimum purchasing requirements, to extend payment terms and re-sourcing materials when necessary to reduce costs.

Production cost savings, especially direct manufacturing costs, have been realized by utilizing sub-contractors to perform labor intensive production processes. This improves efficiency for our manufacturing staff, allowing them to concentrate their efforts on more complex assembly and production tasks.

During the year ended December 31, 2017, the Company’s average weekly operating cash requirement increased to $97,700 (2016: $80,253). The increase resulted from payments to vendors and sub-contractors included in the December 31, 2016 accounts payable balance, a significant royalty payment that had been deferred in 2016 as part of a legal settlement, significantly higher professional service fees and other payments for contractual obligations. The Company anticipates the cash requirements to remain in the range of $95,000 to $100,000 per week throughout 2018.

Barring any unforeseen circumstances, the Company believes that it is probable that it will be able to meet its obligations as they fall due within one year after the financial statements are issued.