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Note 2 - Liquidity

9 Months Ended

Sep. 30, 2025

2.	LIQUIDITY

The Company had net losses of $24.7 million for the nine months ended September 30, 2025 which includes $17.0 million of non-cash expenses that mainly included impairment of goodwill of $10.8 million, employee stock-based compensation of $2.5 million, depreciation and amortization of $2.7 million and $0.8 million of amortization of operating lease right of use asset. The Company had net losses of $6.7 million for the nine months ended September 30, 2024 which includes $1.2 million of non-cash expenses that included depreciation and amortization of $2.8 million, employee stock-based compensation expense of $2.0 million, offset by decreases of $4.3 million for a change in fair value of contingent consideration liabilities and $0.1 million provision on credit losses. The Company had net cash used in operating activities of $6.7 million and $3.1 million for the nine months ended September 30, 2025 and 2024, respectively.

At September 30, 2025, the Company had a cash balance of $3.3 million and working capital of $10.9 million. Based on the Company’s current operating plan and the available working capital that it believes can be converted to cash (specifically the accounts receivable balance of approximately $5.9 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.

In March 2023, the Company entered into a supply chain line of credit agreement with OCI Group for up to $100 million to further support our working capital requirements. Subject to the terms of the agreement, OCI Group will make available to the Company funding based on amounts owed to the Company by its customers. To date, the Company has not borrowed against this line of credit.

Although the Company believes that it will become profitable in the next few years as our revenues grow, our gross profit improves 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.