LIQUIDITY |
3 Months Ended | |||
|---|---|---|---|---|
Mar. 31, 2016 | ||||
| Liquidity [Abstract] | ||||
| Liquidity [Text Block] |
We generated net losses of $2.0 million and $1.2 million for the three months ended March 31, 2016 and 2015, respectively. Net cash used in operating activities was $404,000 and $1.3 million for the three months ended March 31, 2016 and 2015, respectively. At December 31, 2015 the Company had $8 million of cash and generated positive cash from operations in the fourth quarter of 2015. The Company completed the integration of both the 2014 and 2015 Acquisitions and was able to reduce personnel and other costs during 2015. In addition, the Company continues to reduce expenses, with the goal of increasing positive cash flow from operations. The Company renegotiated its bank financing during the third quarter of 2015 and obtained additional funds through a combination of term loans and a line of credit with Opus Bank, which provided additional liquidity. The term loans plus the line of credit have a combined borrowing limit of $10 million, of which all were utilized as of March 31, 2016. The term loans expire September 1, 2019 and the line of credit expires September 1, 2018, unless renewed. The Company relies on the term loans and line of credit for working capital purposes. (See Note 8.) The Company completed a preferred stock offering in November 2015 and raised approximately $4.7 million after expenses. The preferred stock is redeemable at the Company’s option after five years, and is not subject to conversion, mandatory redemption or sinking fund provisions. Management believes that with the proceeds of the preferred stock offering and the Opus Bank financing, the Company has adequate sources of cash to fund its anticipated cash requirements from operations through the next 12 months. If the Company is unable to generate sufficient cash flows from operations, then it may be required to either raise additional capital, which might not be available on acceptable terms, or further reduce costs. These actions could have a material adverse effect on the Company’s operations. |