Note

–

Liquidity and Going Concern

The Company's financial statements are prepared using accounting principles generally accepted in the United States (“U.S. GAAP”) applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has a cumulative net loss from inception to

December 31, 2020

of over

$14

million.. The accompanying financial statements for the year ended

December 31, 2020

have been prepared assuming the Company will continue as a going concern. The Company's cash resources will likely be insufficient to meet its anticipated needs during the next

twelve

months. The Company will require additional financing to fund its future planned operations.

The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses. Management's plans to continue as a going concern include raising additional capital through sales of equity securities and borrowing. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans. The COVID-

pandemic has impacted the Company's business operations to some extent and is expected to continue to do so and, in light of the effect of such pandemic on financial markets, these impacts

may

include reduced access to capital. The ability of the Company to continue as a going concern is dependent upon its ability to successfully secure other sources of financing and attain profitable operations. There is substantial doubt about the ability of the Company to continue as a going concern for

one

year from the issuance of the accompanying consolidated financial statements. The accompanying consolidated financial statements do

not

include any adjustments that might be necessary if the Company is unable to continue as a going concern.

The Company's primary sources of liquidity have traditionally been comprised of cash and cash equivalents as well as availability under the Credit Agreement with PNC (see Note

). As noted in Note

we initiated an equity issuance process and entered into an amendment with PNC that would have allowed us more flexibility in the use of any proceeds, but also committed us to raise at least

$7.5

million by

November 15, 2018.

That offering was ultimately terminated due to changes in market conditions. As that condition was

not

met, we were in violation of our Agreement, as amended.

As of

March 2019,

October 2019

and

January 2020,

we entered into forbearance agreements with PNC. We encountered subsequent compliance failures with covenants during

2020

and we remain out of compliance with the terms of our credit facility, as amended. Currently in discussion with PNC to resolve these matters which if

not

resolved could force the Company into liquidation.

During

January 2020,

we entered into an equity financing arrangement. The primary investor, LF International Pte, purchased

million of convertible preferred stock (convertible to common stock at

per share). The

first

$2.5

million was received during

January 2020

with the transaction. In

February 2020,

we received an additional

$0.7

million pursuant to an agreement between the parties wherein the Company issued

140,000

shares of common stock as inducement for accelerating this portion of the transaction. During

April 2020,

an additional

$1.3

million of the remaining funds was received pursuant to a

second

agreement between the parties, wherein the Company issued

260,000

shares of common stock as inducement for accelerating that portion of the transaction. The remaining

$0.5

million was received in

June 2020.

The entire transaction also allowed for up to

million of similar shares to be issued to other investors. As of the date of this filing approximately

million of those shares have been sold.

Since

January 2020,

the Company has secured working capital from a PPP loan that was ultimately forgiven.

Management's plans include:

	( 1 )	Continuing to explore additional equity and/or debt financing transactions.
	( 2 )	Continuing to focus our Company on the most profitable elements.
	( 3 )	Exploring alternative funding sources on an as needed basis.

Management Assessment

Considering both quantitative and qualitative information, we continue to believe that our plans to obtain additional financing will provide us with an ability to finance our operations through

2021

and, if adequately executed, will mitigate the substantial doubt about our ability to continue as a going concern, however, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.