LIQUIDITY, GOING CONCERN AND OTHER UNCERTAINTIES |
12 Months Ended |
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Dec. 31, 2022 | |
| Commitments and Contingencies Disclosure [Abstract] | |
| LIQUIDITY, GOING CONCERN AND OTHER UNCERTAINTIES | LIQUIDITY, GOING CONCERN AND OTHER UNCERTAINTIES The Company is subject to a number of risks similar to those of early stage companies, including dependence on key individuals and products, the difficulties inherent in the development of a commercial market, the potential need to obtain additional capital, competition from larger companies, other technology companies and other technologies.
The Company has incurred losses each year since inception and has experienced negative cash flows from operations in each year since inception. As of December 31, 2022 and December 31, 2021, the Company had an accumulated deficit of approximately $22,186,000 and $9,224,000, respectively. As of December 31, 2022 the Company had approximately $3.6 million cash on hand.
The Company maintains cash balances in accounts which exceed the Federal Deposit Insurance Corporation (“FDIC”) insurance limits. On March 10, 2023 the FDIC took control of Silicon Valley Bank (“SVB”) and as a result raised uncertainty about the Company’s deposits at SVB. On March 13, 2023 the Federal Reserve announced that account holders at SVB with deposits in excess of the FDIC insurance limits would be protected against any losses.
In February 2023, the Company entered into a sales agreement (the “Sales Agreement”) with A.G.P./Alliance Global Partners (“AGP”) pursuant to which the Company may issue and sell, from time to time, shares of our common stock having an aggregate offering price of up to $13.0 million in at-the-market offerings (“ATM”) sales. At the same time, the Company filed a prospectus supplement under a shelf registration relating to the Sales Agreement. AGP will act as sales agent and will be paid a 3% commission on each sale under the Sales Agreement. The Company’s common stock will be sold at prevailing market prices at the time of the sale, and, as a result, prices will vary.
In February 2023, the Company entered into a securities purchase agreement and a note purchase agreement (“SPA”, NPA” or together “Agreements”) with Maverick Capital Partners, LLC (“Maverick” or “Investor”). Pursuant to the terms of the Agreements, as amended, the Company agreed to sell up to $4,000,000 of the Company’s common stock at 75% of the average calculated Volume Weighted Average Price (“VWAP”) per share during a Drawdown Pricing Period as defined in the Agreements.
In February 2023, the Company issued a $500,000 Convertible Note to the Investor pursuant to the NPA. On March 9, 2023 the Convertible Note was settled upon the execution of a SPA and related issuance of 0.2 million shares of common stock pursuant to the SPA drawdown notice dated March 7, 2023. These shares of common stock were registered under the Company’s registration statement on Form S-3 dated February 10, 2023 and the related prospectus supplement dated March 9, 2023.
Based on its current business plan assumptions and expected cash burn rate, the Company believes that the existing cash is insufficient to fund operations for the next twelve months following the issuance of these financial statements. These
factors raise substantial doubt regarding the Company’s ability to continue as a going concern. As of December 31, 2022 the Company has a cash and cash equivalents balance of $3.6 million.
The Company’s continued operations will depend on its ability to raise additional capital through various potential sources, such as equity and/or debt financings, strategic relationships and revenue. Management can provide no assurance that such financing or strategic relationships will be available on acceptable terms, or at all, which would likely have a material adverse effect on the Company and its financial statements. The accompanying financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that may result should the Company be unable to continue as a going concern.
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