The deployment of our business strategy has been delayed during 2013 and 2014 by the availability of capital and our inability to raise sufficient capital to fund ongoing operations, sales and marketing and production. Assuming we are able to continue to obtain sufficient financing, we intend to focus on production and delivery of products to customers and sales efforts. We intend to continue to develop business relationships and demonstrate our technology to potential leading edge adopters.
Going Concern
The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of our Company as a going concern. Since inception, we have reported net losses, including losses of $3,831,809 and $2,385,899 during the years ended September 30, 2014 and 2013, respectively, and we expect losses to continue in the near future as we grow our operations. At September 30, 2014, we have a working capital deficit of $1,132,228, and an accumulated deficit of $62,367,631. Net cash used by operating activities was $2,513,568 and $745,966 during the years ended September 30, 2014 and 2013, respectively. We have funded our operations through sales of our common and preferred stock, and short-term borrowings. In this regard, during the year ended September 30, 2014, we raised a net amount of $2,954,488 from our financing activities. These factors raise substantial doubt about our ability to continue as a going concern.
We require additional financing to execute our business strategy and to satisfy our near-term working capital requirements. Our operating expenses will use a significant amount of our cash resources. Our management intends to raise additional financing to fund future operations and to provide additional working capital to further fund our growth. There is no assurance that such financing will be obtained in sufficient amounts necessary or on terms favorable or acceptable to us to meet our needs. In the event that we cannot obtain additional funds, on a timely basis or our operations do not generate sufficient cash flow, we may be forced to curtail our development or cease our activities.
Recent Financing Activities
On November 21, 2013, we issued 36,901,400 shares of our common stock to Clean Tech Investors, LLC, at a price per share of $0.019 and received gross proceeds of $700,000 under the terms of a Security Purchase Agreement.
In December 2013, we issued 36,000 shares of Series B Preferred Stock to Summit Trading Limited at a price per share of $1 and received gross proceeds of $36,000 under the terms of a Security Purchase Agreement.
On March 28, 2014, we issued 475,119 shares of Series B Preferred Stock to Sierra Trading Corp at a price per share of $1 and received gross proceeds of $475,119 under the terms of a Security Purchase Agreement.
On March 28, 2014, we issued 237,270 shares of Series B Preferred Stock to Summit Trading Limited at a price per share of $1 and received gross proceeds of $237,270 under the terms of a Security Purchase Agreement.
On May 15, 2014, we issued 250,789 shares of Series B Preferred Stock to Sierra Trading Corp at a price per share of $1 and received gross proceeds of $250,789 under the terms of a Security Purchase Agreement.
On June 9, 2014, we issued 229,816 shares of Series B Preferred Stock to Summit Trading Limited at a price per share of $1 and received gross proceeds of $229,816 under the terms of a Security Purchase Agreement.
On June 11, 2014, we issued 33,333,333 shares of our common stock to John de Neufville at a price per share of $0.015 and received gross proceeds of $500,000 under the terms of a Security Purchase Agreement. We also issued two three year warrants, one to purchase 8,333,333 shares of common stock with an exercise price of $0.003 per share, and one to purchase 3,333,333 shares of common stock with an exercise price of $0.0375.
On June 30, 2014, we issued 85,994 shares of Series B Preferred Stock to Summit Trading Limited at a price per share of $1 and received gross proceeds of $85,994 under the terms of a Security Purchase Agreement.
Liquidity and Capital Resources
We used cash of $2,513,568 in our operating activities in the year ended September 30, 2014, compared to $745,966 in the same period in 2013. During the year ended September 30, 2014, our use of cash was offset by $690,395 for the payment of services with equity instruments and $73,713 by the amortization of certain debt discounts. We also incurred a non-cash loss of $403,133 related to losses on debt settlements. During the year ended September 30, 2014, we incurred changes in operating assets and liabilities of $ 10,563 that off set our use of cash.
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