Quarterly report pursuant to Section 13 or 15(d)

B. Liquidity

B. Liquidity
9 Months Ended
Jun. 30, 2017
B. Liquidity  

Due to the BARDA 2017 Option Notice, under the BARDA Contract, the Company has concluded that, as of the date of these financial statements, substantial doubt exists about its ability to continue as a going concern given the Company’s lack of current revenue sources, as well as recurring net losses, negative cash flows from operations and working capital deficiency. The Company had cash and cash equivalents of $403,000 on June 30, 2017, and $3,155,000 on September 30, 2016. The decrease in cash was primarily due to a decline in revenue following the BARDA 2017 Option Notice and cash used in operating activities. 

The Company has incurred significant losses since its inception. At June 30, 2017, the Company’s accumulated deficit was $193,259,000. This raises substantial doubt about Aeolus’ ability to continue as a going concern, which will be dependent on the Company’s ability to generate sufficient cash flows to meet the Company’s obligations on a timely basis, obtain additional financing and, ultimately, achieve operating profits through product sales or BARDA procurements. The Company is exploring strategic and financial alternatives, which may include a merger or acquisition with or by another company, the sale of shares of stock and/or convertible debentures, the establishment of new collaborations for current research programs that include initial cash payments and on-going research support and the out-licensing of the Company’s compounds for development by a third party. The Company believes that without additional investment capital it will not have sufficient cash to fund its activities in the near future, and will not be able to continue operating. As such, the Company’s continuation as a going concern is dependent upon its ability to raise additional financing or receive prior levels of funding for medical countermeasure development from BARDA. If the Company is unable to obtain additional financing or BARDA support to fund operations, it will need to eliminate some or all of its activities, merge with another company, sell some or all of its assets to another company, or cease operations entirely. There can be no assurance that the Company will be able to obtain additional financing on acceptable terms or at all, that the Company will be able to obtain additional development support from BARDA, or that the Company will be able to merge with another Company or sell any or all of its assets.