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Accounts Receivable

3 Months Ended

Mar. 31, 2024

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

5. Accounts Receivable

Accounts receivable, net was $2,868,769 and $2,953,497 at March 31, 2024 and December 31, 2023, respectively. During the three months ended March 31, 2024 and 2023, the Company (credited) charged the amount of $(109,505) and $31,956, respectively, to bad debt expense. At March 31, 2024 and December 31, 2023, the Company maintained a reserve for doubtful accounts in the amount of $171,557 and $571,773, respectively.

On June 13, 2019, the Company entered into an accounts receivable financing and security agreement (the “Financing Agreement”) in the maximum amount of $10,000,000 whereby the Company would be advanced 85% of the gross value of accounts receivable invoices submitted to the lender for purchase. The cost of the financing consists of (i) an initial financing fee equal to one-twelfth of the net amount advanced multiplied by the facility rate, initially defined as LIBOR plus 6.5% per annum (the “Facility Rate”), and (ii) an additional financing fee consisting of one-twelfth of the amount advanced, prorated on a daily rate, multiplied by the Facility Rate. On June 11, 2021, the maximum amount available under the Financing Agreement was reduced to $5,000,000, and on June 8, 2022, the maximum amount available under the Financing Agreement was reduced to $3,000,000 and the Facility Rate was increased to LIBOR plus 7.25% per annum. On September 18, 2023, the maximum amount available under the Financing Agreement was reduced to $2,000,000 and the Facility Rate was increased to Prime Rate (defined as the higher of the highest rate as reported by the Wall Street Journal or 8.5%) plus 5% per annum. During the three months ended March 31, 2024 and 2023, the Company charged to interest expense the amount of $25,823 and $29,072, respectively, pursuant to the Financing Agreement.

Accounts receivable, net consisted of the following at March 31, 2024 and December 31, 2023:

	March 31,			December 31,
	2024			2023
Accounts receivable	$	2,857,859		$	3,155,200
Due under Financing Agreement, net		182,467			370,070
Allowance for doubtful accounts		(171,557	)		(571,773	)
Total	$	2,868,769		$	2,953,497