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Liquidity and Going Concern Uncertainty
9 Months Ended
Sep. 30, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Liquidity and Going Concern Uncertainty
Liquidity and Going Concern Uncertainty

As of September 30, 2019, we had $1,271,000 of cash and working capital of $1,568,000. For the nine months ended September 30, 2019, we incurred a net loss of $2,113,000 and used $668,000 of net cash in operating activities. As discussed further in Note 12 “Subsequent Events”, on October 1, 2019, in connection with the Oblong Transaction:

a) The Company consummated the sale of 88,070 shares of its Series E Convertible Preferred Stock (“Series E Preferred Stock”) for gross proceeds of $2.51 million (the “Series E Financing”). Certain investors in the Series E Financing have committed to purchase an additional $1.25 million of Glowpoint’s Series E Preferred Stock, upon demand by Glowpoint, on the same terms. The 88,070 shares of Series E Preferred Stock issued by Glowpoint in the Series E Financing have an aggregate Accrued Value of $2.51 million and upon their conversion will convert at a conversion price of $2.85 per share into 880,700 common shares.

b) The Company and Oblong, as borrowers, and Silicon Valley Bank (“SVB”), as lender, executed a Second Amended and Restated Loan and Security Agreement (the “SVB Loan Agreement”), which amended and restated, in its entirety, the Amended and Restated Loan and Security Agreement by and between Oblong and SVB. The SVB Loan Agreement provides for a term loan facility of approximately $5.2 million (the “Loan”), all of which was outstanding at the effective time of the Oblong Merger and remains outstanding. The SVB Loan Agreement provides that interest-only payments will be due through March 31, 2020, after which equal monthly principal and interest payments will be payable in order to fully repay the loan by September 1, 2021.

Our capital requirements in the future will continue to depend on numerous factors, including the timing and amount of revenue for the combined organization, customer renewal rates and the timing of collection of outstanding accounts receivable, in each case particularly as it relates to the combined organization’s major customers, the expense to deliver services, expense for sales and marketing, expense for research and development, capital expenditures, the cost involved in protecting intellectual property rights, debt service obligations under the SVB Loan Agreement, and expense related to the Oblong Transaction (such costs for Glowpoint totaled $255,000 for the three months ended September 30, 2019) including expenses required to successfully integrate Glowpoint and Oblong. While our acquisition of Oblong does provide additional revenues to the Company, the cost to further develop and commercialize Oblong’s product offerings is expected to exceed its revenues for the foreseeable future. The Company believes that, based on the combined organization’s current projection of revenue, expenses, capital expenditures, debt service obligations, and cash flows, it will not have sufficient resources to fund its operations for the next twelve months following the filing of this Report. We believe additional capital will be required to fund operations and provide growth capital including investments in technology, product development and sales and marketing. To access capital to fund operations or provide growth capital, we will need to raise capital in one or more debt and/or equity offerings. There can be no assurance that we will be successful in raising necessary capital or that any such offering will be on terms acceptable to the Company. If we are unable to raise additional capital that may be needed on terms acceptable to us, it could have a material adverse effect on the Company. The factors discussed above raise substantial doubt as to our ability to continue as a going concern. The accompanying condensed consolidated financial statements do not include any adjustments that might result from these uncertainties.