|9 Months Ended|
Sep. 30, 2022
|Organization, Consolidation and Presentation of Financial Statements [Abstract]|
2. Going Concern
As of September 30, 2022, the Company had a cash balance of $1.4 million (including cash equivalents) and $6.0 million of marketable securities (see Note 3 for details of our marketable securities). For the nine months ended September 30, 2022, the Company incurred a net loss of $4.1 million and had a net usage of cash in operating activities of $2.3 million. In addition, the Company had a working capital of $7.2 million as of September 30, 2022. Additionally, we believe we have sufficient cash and marketable securities to operate our business plan through 2024.
On December 27, 2021, the Company sold an aggregate of 5.50 per share (the “Warrants”), for net proceeds of $14.2 million. units at a price to the public of $ per unit (the “Offering”), each unit consisting of one share of the Company’s common stock, par value $ per share (the “Common Stock”), and a warrant to purchase one share of Common Stock at an exercise price of $
Proceeds from the Offering are expected to be used for working capital, new product development and testing, and general business operations.
Management is exploring new product channel sales in adjacent industries, such as cosmetics, athletic products, and proprietary medical devices. The Company has increased focused on sales and developing a sales pipeline for potential customers. This customer base expansion will enable us to provide financial stability for the foreseeable future, expand our current processes, and position us for long-term shareholder value creation.
We have sufficient capital to maintain as a going concern due to the capital raise that occurred on December 27, 2021. We intend to maintain and attempt to grow our existing contract manufacturing business. We also plan to continue building and developing our catalog of consumer products for sale to branding partners and to use our in-house capabilities to create and test market additional branded products. These products will be target marketed and sold online through social media, television and online marketplaces. Furthermore, the Company plans to develop its own proprietary medical devices and explore drug delivery programs for its technology. Additionally, the Company continues to evaluate strategic initiatives (e.g., acquisitions) and additional capital raises through debt or equity may be necessary to achieve these objectives.
We expect to continue incurring losses for the near-term future. Our ability to continue to operate as a going concern in the long-term is dependent upon our ability to manage and grow our current products and to ultimately achieve profitable operations. Management may consider various options to raise capital to fund potential acquisitions through equity or debt offerings. There can be no assurances, however, that management will be able to obtain sufficient additional funds, if needed, or that such funds, if available, will be obtained on terms satisfactory to us. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets and liabilities that might be necessary should we be unable to continue as a going concern. Additionally, it is reasonably possible that estimates made in the consolidated financial statements have been, or will be, materially and adversely impacted in the near term as a result of these conditions, including the recoverability of long-lived assets.
The entire disclosure when substantial doubt is raised about the ability to continue as a going concern. Includes, but is not limited to, principal conditions or events that raised substantial doubt about the ability to continue as a going concern, management's evaluation of the significance of those conditions or events in relation to the ability to meet its obligations, and management's plans that alleviated or are intended to mitigate the conditions or events that raise substantial doubt about the ability to continue as a going concern.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef