Transition report pursuant to Rule 13a-10 or 15d-10

Liquidity and Financial Condition

Liquidity and Financial Condition
9 Months Ended
Dec. 31, 2021
Liquidity And Financial Condition [Abstract]  
Liquidity and Financial Condition

Note 2 – Liquidity and Financial Condition


The Company has incurred substantial operating losses since its inception, and expects to continue to incur significant operating losses for the foreseeable future and may never become profitable. As reflected in the financial statements, the Company had an accumulated deficit of approximately $73.7 million and working capital of approximately $6.2 million at December 31, 2021, a net loss of approximately $16.5 million, approximately $8.5 million of net cash used in operating activities, and $1.0 million of net cash used in investing activities for the nine months ended December 31, 2021. The Company expects to continue to incur ongoing administrative and other expenses, including public company expenses.


On March 23rd, 2022, the Company entered into an Irrevocable $10 million Standby Letter of Credit (“SLOC”). The SLOC accrues interest at a rate of 12% per annum and matures 2 years from the issuance date of the SLOC.  Interest is payable quarterly. In connection with the SLOC, the Company will issue 50,000 shares of its restricted common stock with each cash draw of $1.0 million. Drawdowns are capped at a maximum of $5 million in the first six months. The Company intends to sign and drawdown on the available funds as necessary in 2022 and 2023.


Although it is difficult to predict the Company’s liquidity requirements as of December 31, 2021, based upon the Company’s current operating plan, cash on hand, and SLOC funding, management believes that the Company will have sufficient cash to meet its projected operating requirements for at least the next 12 months following the issuance of these financial statements.


Risks and Uncertainties


Management is constantly monitoring the impact of the COVID-19 pandemic on operations and financials of the Company. To date the main impact has been the delayed evaluation of potential manufacturing partnerships. These delays have been caused by Covid lockdowns i) restricting site tour opportunities by potential partners and ii) driving strong demand for potential partners existing product lines, limiting their capacity to assess new partnership opportunities. The Company has concluded that while it is reasonably possible that the virus could still have a negative effect on the Company’s financial position, the specific impact is not readily determinable as of the date of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.