LIQUIDITY AND CAPITAL RESOURCES

3 Months Ended

Mar. 31, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

LIQUIDITY AND CAPITAL RESOURCES

NOTE 2 – LIQUIDITY AND CAPITAL RESOURCES

The accompanying condensed consolidated financial statements have been prepared assuming that we will continue as a going concern. The following are the principal conditions or events which potentially raise substantial doubt about the company’s ability to continue as a going concern:

● Balancing the need for operational cash with the need to add additional products.

● Timely and cost-effective development of products

● Working capital deficit of $46.4 million as of March 31, 2024

● Accumulated deficit of $116 million as of March 31, 2024

● Multiple years of losses from operations

Management Evaluation

Management considers the conditions outlined above as the most significant factors in raising substantial doubt about the Company’s ability to continue as a going concern within one year after the date the financial statements are issued.

Management’s Plans to Mitigate and Alleviate Conditions or Events

● Management is evaluating operating expenses and is developing a plan to reduce expenditures without negatively impacting current operations.

● Management has placed a strategic focus on increasing sales with prime customers.

● Sales efforts are focused on the most profitable product lines.

● Blue Star - The Company’s total accounts payable due to Blue Star as of March 31, 2024, was approximately $45 million. Blue Star is an unsecured creditor, financing a substantial amount the Company’s supply chain demand. Management believes that Blue Star will continue supplying the Company with preferable credit terms. Blue Star has agreed to the annual interest rate of 5% on invoices that are past due. As an unsecured creditor of the Company, Blue Star has no incentive to force a liquidation. The Company has enjoyed a good mutual relationship for the past five years.

● Management finalized a new line of credit with an additional financial institution.

● In October 2023 management finalized an equity raise which resulted in $2.5 million in net cash received from investors.