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LIQUIDITY MATTERS

3 Months Ended

Mar. 31, 2022

3	LIQUIDITY MATTERS

The Company has incurred net losses since its inception and anticipates net losses and negative operating cash flows for the near future. For and as of the end of three months ended March 31, 2022, the Company had a net loss of $1,801,494 and had $3,362,740 in cash. In connection with preparing the unaudited condensed consolidated financial statements for the three months ended March 31, 2022, management evaluated the extent of the impact from the COVID-19 pandemic and other risks described in Note 2(f) above on the Company’s business and its future liquidity for the next twelve months from the date of issuance of these financial statements.

The Company had a cash balance of $3,362,740 available as of March 31, 2022. Based on its evaluation of the Company’s current business plan, management believes the Company’s existing cash is sufficient to conduct planned operations for at least one year from the date of issuance of these financial statements.

However, given the Company’s losses and negative cash flows, it is likely that the Company will be required to raise significant additional funds to progress its business as planned by issuing equity or equity-linked securities. Should this occur, the Company’s stockholders would experience dilution, perhaps significantly. Additional debt financing, if available, may involve covenants restricting the Company’s operations or its ability to incur additional debt. Any additional debt financing or additional equity that the Company raises may contain terms that are not favorable to the Company or its stockholders and require significant debt service payments, which diverts resources from other activities. Moreover, there is a risk that financing may be unavailable to support the Company’s operations on favorable terms, or at all.

There is also a significant risk that none of the Company’s plans to raise financing will be implemented in a manner necessary to sustain the Company for an extended period of time. If adequate funds are not available to the Company when needed, the Company may be required to continue with reduced operations or to obtain funds through arrangements that may require the Company to relinquish rights to technologies or potential markets, any of which could have a material adverse effect on the Company. In addition, the Company’s inability to secure additional funding when needed could cause the Company’s business to fail or become bankrupt or force the Company to wind down or discontinue operations.