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LIQUIDITY

12 Months Ended

Dec. 31, 2024

3.	LIQUIDITY

The Company has a history of net losses, including the accompanying financial statements for the years ended December 31, 2024 and 2023 where the Company had net losses of $11.3 million (which includes $1.1 million of non-cash expenses) and $16.1 million (which includes $4.3 million of non-cash expenses), respectively, and net cash used in operating activities of $2.2 million and $13.3 million, respectively. During 2024, the $2.2 million of operating cash usage included a $8.2 million decrease in accounts receivable offset by $4.4 million decrease in change in fair value of contingent consideration liabilities, $0.9 million decrease in accounts payable and $0.6 million decrease in other long term liabilities compared to 2023.

At December 31, 2024, the Company had a cash balance of $4.6 million and working capital of $13.8 million. Based on the Company’s current operating plan and the available working capital that can be converted to cash (specifically the accounts receivable balance of approximately $8.0 million), 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.

Furthermore, the Company may pursue other equity or debt financings. In addition, the Company’s exercised warrants have generated $0.8 million and $0.2 million of proceeds during the years ended December 31, 2024 and 2023, respectively.

The Company strives to become profitable in the next few years as our revenues grow, we improve our gross profit and we leverage our overhead costs, we expect to continue to incur losses for a period of time. If necessary, the Company may raise additional capital to finance its future operations through equity or debt financings. There is no guarantee that profitable operations will be achieved, 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.