Basis of Presentation

9 Months Ended

Sep. 30, 2022

Accounting Policies [Abstract]

Basis of Presentation

2. Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with Generally Accepted Accounting Principles in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Item 10-01 of Regulation S-X. Accordingly, they do not include all the information and disclosures required by GAAP for complete financial statements. All adjustments that, in the opinion of management, are necessary for a fair presentation of the results of operations for the interim periods have been made and are of a recurring nature unless otherwise disclosed herein. The results of operations for such interim periods are not necessarily indicative of results of operations for a full year. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended December 31, 2021, filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 18, 2022. All significant intercompany balances and transactions have been eliminated in consolidation.

The Company calculates the fair value of its assets and liabilities which qualify as financial instruments and includes this additional information in the notes to the condensed consolidated financial statements when the fair value is different from the carrying value of these financial instruments. The estimated fair value of accounts receivable, accounts payable and accrued expenses approximate their carrying amounts due to the relatively short maturity of these instruments. Financing leases and notes payable approximate fair value as they bear market rates of interest. None of these instruments are held for trading purposes.

As of September 30, 2022, we had cash and cash equivalents of $6.9 million, compared to $4.1 million as of December 31, 2021. We generated a net loss of $11.0 million for the nine-months ended September 30, 2022, compared to a net loss of $15.0 million for the nine-months ended September 30, 2021. During 2022 we have received proceeds of $1.9 million net of fees from the sale of our common stock related to our at-the-market offering. On March 10, 2022, we entered into a debt securities agreement that provided $10.0 million in funds through two separate fundings. We have received $9.3 million in net proceeds under this agreement as of September 30, 2022. The Company can elect to make redemption payments on the Notes Payable with cash on hand or shares of common stock as discussed in Note 11 Notes Payable. Payment in common stock would result in dilution to existing stockholders. On September 12, 2022, we entered into a Securities Purchase Agreement with certain purchasers to issue and sell to the purchasers shares of common stock, each of which was coupled with a warrant to purchase one share of common stock, such offering is hereinafter referred to as our “registered direct offering”. As of September 30, 2022, the Company had received $4.0 million in proceeds from its registered direct offering. Subsequent to September 30, 2022, the Company received an additional $1.2 million in proceeds from delayed closings of its registered direct offering. If we are not able to obtain additional debt or equity financing on terms and conditions acceptable to us, our operations do not generate positive cash flow in the upcoming year, we may be unable to implement our business plan, fund our liquidity needs or continue our operations.