What changed in this filing

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Item 1A. Risk Factors

2024-01-09 compared with 2023-08-14 · 34 added, 11 removed, 10 unchanged (82% of the section changed)

There have been no material changes from the risk factors disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on March 31, 2023, except as set forth below.

There have been no material changes from the risk factors disclosed in Amendment No.

1 to the Company’s Annual Report on Form 10-K/A for the year ended December 31, 2022, filed with the SEC on January 5, 2024, except as set forth below.

There is substantial doubt about our ability to continue as a going concern through the next 12 months from the date of the condensed consolidated financial statements in this Quarterly Report on Form 10-Q.

We have incurred net losses of $20.8 million and $125.9 million for the six months ended June 30, 2023 and the year ended December 31, 2022, respectively.

For the six months ended June 30, 2023, cash provided by operating activities was $4.7 million, which included $4.85 million of cash from the ERC sale discussed elsewhere in this Quarterly Report on Form 10-Q, and cash used in operating activities for the year ended December 31, 2023 was $26.4 million.

We raised approximately $3.8 million in connection with the July 2023 Offering and approximately $3.0 million in connection with the Future Receivables Financings in July and August 2023.

As a result of our losses and our projected cash needs, combined with our current liquidity

level, substantial doubt exists about the Company’s ability to continue as a going concern over the next 12 months.

The Company has incurred net losses of $27.8 million and $158.0 million for the nine months ended September 30, 2023 and the prior year comparable period, respectively.

For the nine months ended September 30, 2023, cash used by operating activities was $1.2 million, and cash used in operating activities for the year ended December 31, 2022 was $26.4 million.

Based on our cash on hand and working capital at September 30, 2023, we may have insufficient cash to fund planned operations into the first quarter of 2024.

As a result of our losses and our projected cash needs, combined with our current liquidity level, substantial doubt exists about the Company’s ability to continue as a going concern over the next 12 months.

The recent macroeconomic environment has caused weaker demand than contemplated under the Company's business plan, resulting in a reduction in projected revenue and cash flows for the twelve-month period included in the going concern evaluation.

Our ability to continue as a going concern is contingent upon successful execution of management’s intended plan over the next twelve months to improve the our liquidity and profitability, which includes, without limitation:

▪ Further reducing operating costs expense by taking additional restructuring actions to align cost with revenue to achieve profitability.

▪ Further reducing operating costs expense by taking additional restructuring actions to align cost with revenue

▪ Increasing revenue by introducing new products and acquiring new customers.

▪ Execute on strategic partnerships accretive to margins and operating cash

▪ Seeking additional capital through the issuance of debt or equity securities.

▪ Seeking additional capital through the issuance of equity securities or obtaining debt financing.

There can be no assurance that any such measures will be successful.

If we are not successful in improving our liquidity position and the profitability of our operations, we may need to consider all strategic alternatives, including seeking additional debt or equity capital, reducing or delaying our business activities and strategic initiatives, or selling assets, other strategic transactions and/or other measures, including obtaining relief under the U.S.

Bankruptcy Code.

In addition, the perception that we may not be able to continue as a going concern may cause vendors and customers to choose not to do business with us due to concerns about our ability to meet our contractual obligations.

If we seek additional financing to fund our operations and there remains substantial doubt about our ability to continue as a going concern, our financing sources may be unwilling to provide additional funding to us on commercially reasonable terms or at all.

If we seek additional financing to

fund our operations and there remains substantial doubt about our ability to continue as a going concern, our financing sources may be unwilling to provide additional funding to us on commercially reasonable terms or at all.

The consolidated financial statements do not include any adjustments that may result from the outcome of this going concern uncertainty.

Such adjustments could be material.

We have failed, and may continue to fail, to meet the listing standards of Nasdaq, and as a result our Class A common stock may become delisted, which could have a material adverse effect on the liquidity of our Class A common stock.

If we fail to continue to satisfy the continued listing requirements of Nasdaq, Nasdaq will take steps to delist our Class A common stock.

Such a delisting would likely have a negative effect on the price of our Class A common stock and would impair your ability to sell or purchase our Class A common stock when you wish to do so, as well as adversely affect our ability to issue additional securities and obtain additional financing in the future.

On August 3, 2023, we received a letter from Nasdaq notifying us that we were no longer in compliance with Nasdaq Listing Rule 5450(b)(1)(C) because the market value of our publicly held shares of Class A common stock had fallen below the $5.0 million minimum required for continued listing on the Nasdaq Global Market for a period of at least 30 consecutive business days.

In accordance with Nasdaq Listing Rule 5810(c)(3)(D), we have a grace period of 180 calendar days, until January 30, 2024, to regain compliance with Nasdaq Listing Rule 5450(b)(1)(C).

Compliance can be achieved by meeting the $5.0 million minimum requirement for market value of publicly held shares for a minimum of 10 consecutive business days during the 180-day compliance period.

If we do not regain compliance with Nasdaq Listing Rule 5450(b)(1)(C) by the end of the 180-day grace period, Nasdaq will notify us that the Class A common stock is subject to delisting.

In the event that we receive a notice of delisting, Nasdaq rules permit us to appeal the delisting determination to a Nasdaq Hearings Panel.

Alternatively, we may apply to transfer the listing of the Class A common stock to The Nasdaq Capital Market if we satisfy the continued listing criteria for that market.

On August 21, 2023, we received a deficiency letter from Nasdaq notifying us that, for the last 30 consecutive business days, the closing bid price for our Class A common stock had been below the minimum $1.00 per share required for continued listing on The Nasdaq Global Market pursuant to Nasdaq Listing Rule 5450(a)(1).

In accordance with Nasdaq Listing Rule 5810(c)(3)(A), we have been given 180 calendar days, or until February 20, 2024, to regain compliance with Rule 5450(a)(1).

If we do not regain compliance with Rule 5450(a)(1) by February 20, 2024, we may be afforded a second 180 calendar day period to regain compliance.

To qualify, we would be required to meet the continued listing requirement for market value of publicly held shares and all other initial listing standards for The Nasdaq Capital Market, except for the minimum bid price requirement.

In addition, we would be required to notify Nasdaq of our intent to cure the deficiency during the second compliance period.

There are many factors that may adversely affect our minimum bid price.

Many of these factors are outside of our control.

As a result, we may not be able to sustain compliance with Rule 5550(a)(2) in the long term.

On November 22, 2023, we received a written notice from Nasdaq indicating that we were not in compliance with Nasdaq’s continued listing standards because we did not timely file our Quarterly Report on Form 10-Q for the quarter ended September 30, 2023.

We had 60 calendar days (or until January 22, 2024) to submit a plan to regain compliance.

We regained compliance with this continued listing standard by filing this Quarterly Report with the Securities and Exchange Commission.

Any potential delisting of our Class A common stock from Nasdaq would likely result in decreased liquidity and increased volatility for our Class A common stock and would adversely affect our ability to raise additional capital or to enter into strategic transactions, in addition to adversely impacting the perception of our financial condition and could cause reputational harm to investors and parties conducting business with us.

Any potential delisting of our Class A common stock from Nasdaq would also make it more difficult for our stockholders to sell our Class A common stock.

In the event of a delisting, we would take actions to restore our compliance with Nasdaq Marketplace Rules, but we can provide no assurances that the listing of our Class A common stock would be restored, that our Class A common stock will remain above the Nasdaq minimum bid price requirement or that we otherwise will remain in compliance with the Nasdaq Marketplace Rules.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1A. Risk Factors