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LIQUIDITY

3 Months Ended

Mar. 31, 2023

2.	LIQUIDITY

The Company has a history of net losses for the three months ended March 31, 2023 and 2022 where the Company had net losses of $3.8 million (which includes $0.9 million of non-cash expenses) and $2.3 million, respectively, and net cash used in operating activities of $0.6 million and $1.9 million, At March 31, 2023, the Company had a cash balance of $1.0 million and working capital of $5.5 million. The working capital balance is reduced by a current liability of $6.8 million for contingent consideration, which is a non-cash, all stock earn-out payment associated with the 2022 acquisition of AllCell Technologies. Based on the Company’s current operating plan, the Company believes that it has the ability to fund its operations and meet contractual obligations for at least twelve months from the date of this report. In 2022, the Company entered into a Common Stock Purchase Agreement and Registration Rights Agreement with B. Riley Principal Capital II, LLC (“B. Riley”) under which the Company has the right, but not the obligation, to sell up to $30.0 million shares or a maximum of 2.0 million shares of its common stock over a period of 24 months in its sole discretion (see note 11 for further information). The Company issued 37,741 shares in January and February 2023 for $0.7 million under this agreement. The Company’s outstanding warrants generated $0.1 million of proceeds during each of the three months ended March 31, 2023 and 2022. In March 2023, the Company secured a $100 million credit facility with OCI Group to support our working capital requirements. Furthermore, we could pursue other equity or debt financings. The Company believes that it will become profitable in the next few years as our revenues continue to grow, we improve our gross margins and we leverage our overhead costs, but we expect to continue to incur losses for a period of time. There is no guarantee that profitable operations will be achieved, the warrants will be exercised or that additional capital or debt financing will be available on a timely basis, on favorable terms, or at all, and such funding, if raised, may not be sufficient to meet our obligations or enable us to continue to implement our long-term business strategy. In addition, obtaining additional funding or entering into other strategic transactions could result in significant dilution to our stockholders.