OBLONG INC. Overview
Oblong, Inc. ("Oblong" or "we" or "us" or the "Company") was formed as aDelaware corporation inMay 2000 and is a provider of patented multi-stream collaboration technologies and managed services for video collaboration and network applications. Prior toMarch 6, 2020 ,Oblong, Inc. was namedGlowpoint, Inc. ("Glowpoint"). OnOctober 1, 2019 ,Glowpoint closed an acquisition of all of the outstanding equity interests ofOblong Industries, Inc. , a privately heldDelaware corporation ("Oblong Industries "), pursuant to the terms of an Agreement and Plan of Merger (as amended, the "Merger Agreement"), datedSeptember 12, 2019 , by and amongGlowpoint ,Oblong Industries andGlowpoint Merger Sub II, Inc. , aDelaware corporation and a wholly owned subsidiary ofGlowpoint ("Merger Sub"). Pursuant to the Merger Agreement, among other things, Merger Sub merged with and intoOblong Industries , withOblong Industries surviving as a wholly owned subsidiary ofGlowpoint (the "Acquisition"). See further discussion of the Acquisition in Note 3 - Oblong Industries Acquisition to our condensed consolidated financial statements attached hereto. OnMarch 6, 2020 ,Glowpoint changed its name toOblong, Inc. In this Report, we use the terms "Oblong" or "we" or "us" or the "Company" to refer to (i) Oblong (formerlyGlowpoint ), for periods prior to the closing of the Acquisition, and (ii) the "combined organization" of Oblong (formerlyGlowpoint ) andOblong Industries for periods after the closing of the Acquisition. For purposes of segment reporting, we refer to the Oblong (formerlyGlowpoint ) business as "Glowpoint" herein, and to theOblong Industries business as "Oblong Industries " herein. Since the closing of the Acquisition onOctober 1, 2019 , we have been focused on the integration of the former businesses ofGlowpoint andOblong Industries into a combined organization. While our Acquisition ofOblong Industries does provide additional revenues to the combined organization, the cost to further develop and commercialize its product offerings is expected to exceed its revenues for the foreseeable future. However, we have achieved certain revenue and cost synergies in connection with combiningGlowpoint andOblong Industries ; we reduced the total of general and administrative, research and development and sales and marketing expenses from$5,656,000 in the fourth quarter of 2019 to$4,560,000 in the first quarter of 2020, then to$3,637,000 in the second quarter of 2020, and then to$2,747,000 in the third quarter of 2020. We believe additional capital will be required to fund operations and provide growth capital including investments in technology, product development and sales and marketing. We intend to invest sales and marketing resources to expand awareness ofOblong Industries' product offerings in the Cisco sales channel with the goal of increasing adoption and growing revenue. We expect to continue operatingGlowpoint's former business in the future as part of our combined organization; however, we expect to focus the majority of our future investments in product development and sales and marketing on our efforts to grow revenue fromOblong Industries' products and service offerings. We believe there is a substantial market opportunity forOblong Industries' product offerings and services, and we are in the process of transforming our offerings to meet the evolving needs of our customers. As part of the transformation of our business, we are evolving certain aspects of our model by designing and developing software to include subscription-based offerings. Historically, our technology products and services have been developed and consumed in conventional commercial real estate spaces such as conference rooms. As our core collaboration products evolve, we expect to add more contemporary software features along with expanded accessibility beyond commercial spaces through both hybrid and SaaS offerings. See "Part I. Item 1. Business Overview and Part II. Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" in our 2019 10-K for further discussion.
Oblong's Results of Operations
Three Months Ended
Segment Reporting
As discussed above, onOctober 1, 2019 , the Company acquiredOblong Industries , andOblong Industries became a wholly owned subsidiary of the Company. Prior to the Acquisition ofOblong Industries onOctober 1, 2019 , the Company operated in one segment. FollowingOctober 1, 2019 , the former businesses ofGlowpoint andOblong Industries were managed separately and involve different products and services. Accordingly, the Company currently operates in two segments: 1) theGlowpoint (now named Oblong) business, which mainly consists of managed services for video collaboration and network applications and 2) theOblong Industries business, which consists of products and services for visual collaboration technologies. -27-
-------------------------------------------------------------------------------- Because the closing of the Acquisition ofOblong Industries occurred onOctober 1, 2019 , the Company's condensed consolidated financial statements as of and for the three months endedSeptember 30, 2019 included in this Report do not includeOblong Industries' financial results. Certain information concerning the Company's segments for the three months endedSeptember 30, 2020 and 2019 is presented in the following table (in thousands): Three Months Ended September 30, 2020 Glowpoint Oblong Industries Total Revenue $ 1,324 $ 1,942$ 3,266 Cost of revenues 893 719 1,612 Gross profit $ 431 $ 1,223$ 1,654 Gross profit % 33 % 63 % 51 % Allocated operating expenses $ 1,187 $ 1,477$ 2,664 Unallocated operating expenses 980 Total operating expenses $ 1,187 $
1,477
Loss from operations $ (756) $ (254)$ (1,990) Interest and other expense, net 5 90 95 Net loss $ (761) $ (344)$ (2,085) Unallocated operating expenses include costs during the 2020 Third Quarter that are not specific to a particular segment but are general to the group; included are expenses incurred for administrative and accounting staff, general liability and other insurance, professional fees and other similar corporate expenses. Interest and other expense, net, is also not allocated to the operating segments.
As shown in the table below, the combined organization's total revenue for the
three months ended
Pro forma and unaudited (as if the
Acquisition of
occurred on
Three
Months Ended
($ in thousands)
Revenue
Glowpoint $ 2,370
Oblong Industries $ 4,259
Pro forma total revenue $ 6,629
Net loss
Glowpoint $ 640
Oblong Industries $ 3,756
Pro forma net loss $ 4,396
Revenue. Total revenue increased $896,000 (or 38%) to $3,266,000 in the 2020
Third Quarter from $2,370,000 in the 2019 Third Quarter. The following table
summarizes the changes in components of our revenue, and the significant changes
in revenue are discussed in more detail below.
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Three Months Ended
2020 % of Revenue 2019 % of Revenue
Revenue: Glowpoint
Video collaboration services $ 249 8 % $ 1,317 56 %
Network services 1,028 31 % 969 41 %
Professional and other services 47 1 % 84 4 %
Total Glowpoint revenue $ 1,324 40 % $ 2,370 100 %
Revenue: Oblong Industries
Visual collaboration product offerings $ 1,686 52 % $ - - %
Professional services - - % $ - - %
Licensing 256 8 % $ - - %
Total Oblong Industries revenue $ 1,942 60 % $ - - %
Total revenue $ 3,266 100 % $ 2,370 100 %
Glowpoint
•Revenue for managed services for video collaboration services decreased
$1,068,000 (or 81%) to $249,000 in the 2020 Third Quarter from $1,317,000 in the
2019 Third Quarter. This decrease is mainly attributable to lower revenue from
existing customers (either from reductions in price or level of services) and
loss of customers to competition.
•Revenue for network services increased
•Revenue for professional and other services decreased$37,000 (or 44%) to$47,000 in the 2020 Third Quarter from$84,000 in the 2019 Third Quarter. This decrease is mainly attributable to lower revenue from existing customers related to equipment purchases.Oblong Industries •The increase in revenue in each of the different components was attributable to the Acquisition ofOblong Industries onOctober 1, 2019 and includesOblong Industries' revenue for the 2020 Third Quarter as compared to no revenue for the 2019 Third Quarter. •The decrease from the pro forma revenue for the three months endedSeptember 30, 2019 shown above as compared to revenue for the 2020 Third Quarter was mainly attributable to (i) a decrease in revenue from our product offerings due to both delayed fulfillment and delays in order placement as a result of the novel Coronavirus (COVID-19) pandemic, and (ii) a decrease in custom professional services revenue as an existing customer cancelled such services effectiveApril 30, 2020 as a result of COVID-19. Cost of Revenue (exclusive of depreciation and amortization). Cost of revenue, exclusive of depreciation and amortization, includes all internal and external costs related to the delivery of revenue. Cost of revenue also includes taxes which have been billed to customers. For the Three Months Ended September 30, 2020 2019 Cost of Revenue Glowpoint $ 893$ 1,582 Oblong Industries 719 - Total cost of revenue $ 1,612$ 1,582 -29-
-------------------------------------------------------------------------------- Cost of revenue decreased to$1,612,000 in the 2020 Third Quarter from$1,582,000 in the 2019 Third Quarter. This decrease in cost of revenue is mainly attributable to lower costs associated with the decrease inGlowpoint revenue between the 2020 Third Quarter and the 2019 Third Quarter, offset by the inclusion of the cost of revenue forOblong Industries for the 2020 Third Quarter. The Company's gross profit as a percentage of revenue increased to 51% in the 2020 Third Quarter as compared to 33% in the Third Quarter 2019. This increase is due to inclusion ofOblong Industries' gross profit 63% in the 2020 Third Quarter.Glowpoint's gross profit of 33% remained constant quarter over quarter. Research and Development. Research and development expenses include internal and external costs related to developing new service offerings and features and enhancements to our existing services. Research and development expenses increased to$747,000 in the 2020 Third Quarter from$190,000 in the 2019 Third Quarter. This increase is primarily attributable to$618,000 of research and development expenses forOblong Industries in the 2020 Third Quarter with no expenses included forOblong Industries in the Third Quarter 2019 as the Acquisition ofOblong Industries occurred onOctober 1, 2019 , offset by reductions in theGlowpoint related expenses. Sales and Marketing Expenses. Sales and marketing expenses increased to$668,000 in the 2020 Third Quarter from$38,000 in the 2019 Third Quarter. This increase is primarily attributable to$632,530 of sales and marketing expenses forOblong Industries in the 2020 Third Quarter with no expenses included forOblong Industries in the Third Quarter 2019 as the Acquisition ofOblong Industries occurred onOctober 1, 2019 , offset by reductions in theGlowpoint related expenses. General and Administrative Expenses. General and administrative expenses include direct corporate expenses and costs of personnel in the various corporate support categories, including executive, finance and accounting, legal, human resources and information technology. General and administrative expenses increased to$1,332,000 in the 2020 Third Quarter from$1,035,000 in the 2019 Third Quarter. This$297,000 increase is primarily attributable to$307,000 of general and administrative expenses forOblong Industries for the 2020 Third Quarter with no expenses included forOblong Industries in the Third Quarter 2019 as the Acquisition ofOblong Industries occurred onOctober 1, 2019 , offset by reductions inGlowpoint related expenses. Impairment Charges. Impairment charges in the 2020 Third Quarter were$117,000 as compared to$20,000 in the 2019 Third Quarter. The impairment charges for the for both periods are primarily attributable to impairment charges on property and equipment no longer in service. Depreciation and Amortization Expenses. Depreciation and amortization expenses increased to$780,000 in the 2020 Third Quarter from$145,000 in the 2019 Third Quarter. This increase is mainly attributable to$710,000 of depreciation and amortization expense recorded in the 2020 Third Quarter related to assets recorded in connection with the Acquisition ofOblong Industries . Loss from Operations. The Company recorded a loss from operations of$1,990,000 in the 2020 Third Quarter as compared to a loss from operations of$640,000 in the 2019 Third Quarter. This increase in our loss from operations from the 2019 Third Quarter to the 2020 Third Quarter is mainly attributable to the increase in operating expenses discussed above, partially offset by an increase in gross profit as discussed above.
Nine Months Ended
Segment Reporting As discussed above, onOctober 1, 2019 , the Company acquiredOblong Industries , andOblong Industries became a wholly owned subsidiary of the Company. Prior to the Acquisition ofOblong Industries onOctober 1, 2019 , the Company operated in one segment. FollowingOctober 1, 2019 , the former businesses ofGlowpoint andOblong Industries were managed separately and involve different products and services. Accordingly, the Company currently operates in two segments: 1) theGlowpoint (now named Oblong) business, which mainly consists of managed services for video collaboration and network applications and 2) theOblong Industries business, which consists of products and services for visual collaboration technologies. Because the closing of the Acquisition ofOblong Industries occurred onOctober 1, 2019 , the Company's condensed consolidated financial statements as of and for the Nine Months EndedSeptember 30, 2019 included in this Report do not includeOblong Industries' financial results. Certain information concerning the Company's segments for the nine months endedSeptember 30, 2020 and 2019 is presented in the following table (in thousands): -30- --------------------------------------------------------------------------------
Nine Months Ended September 30, 2020
Glowpoint Oblong Industries Total
Revenue $ 4,741 $ 6,669 $ 11,410
Cost of revenues 2,948 2,736 5,684
Gross profit $ 1,793 $ 3,933 $ 5,726
Gross profit % 38 % 59 % 50 %
Allocated operating expenses $ 3,398 $ 7,545 $ 10,943
Unallocated operating expenses 3,059
Total operating expenses $ 3,398 $
7,545
Loss from operations$ (1,605) $ (3,612)$ (8,276) Interest and other expense, net 12 310 322 Net loss $ 1,617 $ 3,922$ (8,598) Unallocated operating expenses include costs during the Nine Months EndedSeptember 30, 2020 (after theOctober 1, 2019 Acquisition date) that are not specific to a particular segment but are general to the group; included are expenses incurred for general liability and other insurance, professional fees and other similar corporate expenses. Interest and other expense, net, is also not allocated to the operating segments. As shown in the table below, the combined organization's total net loss for the Nine Months EndedSeptember 30, 2019 on a pro forma basis (as if the Acquisition ofOblong Industries had occurred onJanuary 1, 2019 ), was$14.9 million . Pro forma and unaudited (as if the Acquisition of Oblong Industries had occurred on January 1, 2019) Nine Months Ended September 30, 2019 ($ in thousands) Revenue Glowpoint $ 7,403 Oblong Industries $ 12,758 Pro forma total revenue $ 20,161 Net loss Glowpoint $ 2,113 Oblong Industries $ 12,782 Pro forma net loss $ 14,895 Revenue. Total revenue increased$4,007,000 (or 54%) to$11,410,000 in the Nine Months EndedSeptember 30, 2020 from$7,403,000 in the Nine Months EndedSeptember 30, 2019 . The following table summarizes the changes in components of our revenue, and the significant changes in revenue are discussed in more detail below. -31- --------------------------------------------------------------------------------
Nine Months Ended
2020 % of Revenue 2019 % of Revenue
Revenue: Glowpoint
Video collaboration services $ 1,847 16 % $ 4,335 59 %
Network services 2,719 24 % 2,879 39 %
Professional and other services 175 2 % 189 3 %
Total Glowpoint revenue $ 4,741 42 % $ 7,403 100 %
Revenue: Oblong Industries
Visual collaboration product offerings $ 4,931 43 % $ - - %
Professional services 898 8 % - - %
Licensing 840 7 % - - %
Total Oblong Industries revenue $ 6,669 58 % $ - - %
Total revenue $ 11,410 100 % $ 7,403 100 %
Glowpoint
•Revenue for managed services for video collaboration services decreased
$2,488,000 (or 57%) to $1,847,000 in the Nine Months Ended September 30, 2020
from $4,335,000 in the Nine Months Ended September 30, 2019 . This decrease is
mainly attributable to lower revenue from existing customers (either from
reductions in price or level of services) and loss of customers to competition.
•Revenue for network services decreased $160,000 (or 6%) to $2,719,000 in the
Nine Months Ended September 30, 2020 from $2,879,000 in the Nine Months Ended
September 30, 2019 . This decrease is mainly attributable to net attrition of
customers and lower demand for our services given the competitive environment
and pressure on pricing that exists in the network services business.
•Revenue for professional and other services decreased $14,000 (or 7%) to
$175,000 in the Nine Months Ended September 30, 2020 from $189,000 in the Nine
Months Ended September 30, 2019 . This decrease is mainly attributable to lower
revenue from existing customers related to equipment purchases.
•We expect a continuing decline in revenue from the
Oblong Industries •The increase in revenue in each of the different components was attributable to the Acquisition ofOblong Industries onOctober 1, 2019 and includesOblong Industries' revenue for the Nine Months EndedSeptember 30, 2020 as compared to no revenue for the Nine Months EndedSeptember 30, 2019 . •The decrease from the pro forma revenue for the nine months endedSeptember 30, 2019 shown above as compared to revenue for the nine months endedSeptember 30, 2020 was mainly attributable to (i) a decrease in revenue from our product offerings due to both delayed fulfillment and delays in order placements as a result of the novel Coronavirus (COVID-19) pandemic, and (ii) a decrease in custom professional services revenue as an existing customer cancelled such services effectiveApril 30, 2020 as a result of COVID-19. Cost of Revenue (exclusive of depreciation and amortization). Cost of revenue, exclusive of depreciation and amortization, includes all internal and external costs related to the delivery of revenue. Cost of revenue also includes taxes which have been billed to customers. -32- --------------------------------------------------------------------------------
For the Nine Months Ended September 30,
2020 2019
Cost of Revenue
Glowpoint $ 2,948 $ 4,901
Oblong Industries 2,736 -
Total cost of revenue $ 5,684 $ 4,901
Cost of revenue increased to $5,684,000 in the Nine Months Ended September 30,
2020 from $4,901,000 in the Nine Months Ended September 30, 2019 . This increase
in cost of revenue is mainly attributable to the inclusion of the cost of
revenue for Oblong Industries for the Nine Months Ended September 30, 2020 ,
partially offset by lower costs associated with the decrease in Glowpoint
revenue between the Nine Months Ended September 30, 2020 and the Nine Months
Ended September 30, 2019 . The Company's gross profit as a percentage of revenue
increased to 50% in the Nine Months Ended September 30, 2020 as compared to 34%
in the Nine Months Ended September 30, 2019 . This increase is due to inclusion
of Oblong Industries' gross profit (or 59%) in the Nine Months Ended
September 30, 2020 and an increase in Glowpoint's gross profit from 34% in the
Nine Months Ended September 30, 2019 to 38% in the Nine Months Ended
September 30, 2020 . The increase in Glowpoint's gross profit was due to reduced
personnel costs as a percentage of revenue.
Research and Development. Research and development expenses include internal and
external costs related to developing new service offerings and features and
enhancements to our existing services. Research and development expenses
increased to $3,062,000 in the Nine Months Ended September 30, 2020 from
$652,000 in the Nine Months Ended September 30, 2019 . This increase is primarily
attributable to $2,674,000 of research and development expenses for Oblong
Industries in the Nine Months Ended September 30, 2020 with no expenses included
for Oblong Industries in the Nine Months Ended September 30, 2019 as the
Acquisition of Oblong Industries occurred on October 1, 2019 , partially offset
by reductions in the Glowpoint related expenses.
Sales and Marketing Expenses. Sales and marketing expenses increased to
$2,708,000 in the Nine Months Ended September 30, 2020 from $111,000 in the Nine
Months Ended September 30, 2019 . This increase is primarily attributable to
$2,600,000 of sales and marketing expenses for Oblong Industries in the Nine
Months Ended September 30, 2020 with no expenses included for Oblong Industries
in the Nine Months Ended September 30, 2019 as the Acquisition of Oblong
Industries occurred on October 1, 2019 .
General and Administrative Expenses. General and administrative expenses include
direct corporate expenses and costs of personnel in the various corporate
support categories, including executive, finance and accounting, legal, human
resources and information technology. General and administrative expenses
increased $2,256,000 (or 77%) to $5,173,000 in the Nine Months Ended
September 30, 2020 from $2,917,000 in the Nine Months Ended September 30, 2019 .
This increase is primarily attributable to $2,271,000 of general and
administrative expenses for Oblong Industries for the Nine Months Ended
September 30, 2020 with no expenses included for Oblong Industries in the Nine
Months Ended September 30, 2019 as the Acquisition of Oblong Industries occurred
on October 1, 2019 .
Impairment Charges. Impairment charges in the Nine Months Ended September 30,
2020 were $667,000 as compared to $473,000 in the Nine Months Ended
September 30, 2019 . The impairment charges for both periods primarily relate to
impairment charges on the Glowpoint reporting unit's goodwill and impairment
charges on property and equipment no longer in service. As of September 30,
2020 , there is no remaining goodwill balance for the Glowpoint reporting unit.
Depreciation and Amortization Expenses. Depreciation and amortization expenses
increased to $2,392,000 in the Nine Months Ended September 30, 2020 from
$461,000 in the Nine Months Ended September 30, 2019 . This increase is mainly
attributable to $2,175,000 of depreciation and amortization expense recorded in
the Nine Months Ended September 30, 2020 related to assets recorded in
connection with the Acquisition of Oblong Industries .
Loss from Operations. The Company recorded a loss from operations of $8,276,000
in the Nine Months Ended September 30, 2020 as compared to a loss from
operations of $2,112,000 in the Nine Months Ended September 30, 2019 . This
increase in our loss from operations is mainly attributable to the increase in
operating expenses discussed above, partially offset by an increase in gross
profit as discussed above.
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Off-Balance Sheet Arrangements
As of
Inflation
Management does not believe inflation had a significant effect on the condensed consolidated financial statements for the periods presented.
Critical Accounting Policies
There have been no changes to our critical accounting policies during the nine months endedSeptember 30, 2020 . Critical accounting policies and the significant estimates made in accordance with such policies are regularly discussed with our Audit Committee. Those policies are discussed under "Critical Accounting Policies" in "Part II. Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" as well as in our condensed consolidated financial statements and the footnotes thereto, each included in our 2019 10-K.
Liquidity and Capital Resources
As ofSeptember 30, 2020 , we had$2,670,000 of cash,$5,609,000 of total obligations under theSilicon Valley Bank ("SVB") Loan Agreement, obligations of$2,417,000 under a Paycheck Protection Program loan, and a working capital deficit of$3,245,000 . For the nine months endedSeptember 30, 2020 , we incurred a net loss of$8,598,000 and used$4,325,000 of net cash in operating activities. During the nine months endedSeptember 30, 2020 , we received cash proceeds of$2,417,000 from a loan made to the Company byMidFirst Bank under the Paycheck Protection Program (PPP) contained within the Coronavirus Aid Relief, and Economic Security (CARES) Act (the "PPP Loan"). The Company may apply to the Lender for forgiveness of some or all of the Loan, with the amount which may be forgiven equal to the sum of eligible payroll costs, mortgage interest, covered rent, and covered utility payments, in each case incurred by the Company during the twenty four-week period following the Origination Date, calculated in accordance with the terms of the CARES Act. Certain reductions in Company payroll costs during this period may reduce the amount of the PPP Loan eligible for forgiveness. The Company estimates that approximately$2,266,000 of the PPP Loan will be forgiven. However, this estimate is subject to change and there is no guarantee that the Company will receive any forgiveness for any fixed amount of any PPP Loan principal received by the Company. See further discussion of the PPP Loan in Note 8 - Debt. As ofSeptember 30, 2020 , the SVB Loan Agreement provided that interest-only payments were due throughSeptember 30, 2020 , after which monthly principal payments of$291,500 , plus interest, were payable in order to fully repay the loan byMarch 1, 2022 . Subsequent to the period of this Report, inOctober 2020 , the Company: (i) completed a private placement of common stock for gross proceeds of$2,973,000 , and (ii) completed an agreement with SVB to satisfy all outstanding obligations of$5,609,000 under the SVB Loan Agreement in exchange for a one-time cash payment of$2,500,000 See further discussion of these transactions in Note 14 - Subsequent Events in our condensed consolidated financial statements.
Future Capital Requirements and Going Concern
Our capital requirements in the future will continue to depend on numerous factors, including the timing and amount of revenue for the combined organization, customer renewal rates and the timing of collection of outstanding accounts receivable, in each case particularly as it relates to the combined organization's major customers, the expense to deliver services, expense for sales and marketing, expense for research and development, capital expenditures, the cost involved in protecting intellectual property rights, the amount of forgiveness of the PPP Loan, if any, and any debt service obligations under the PPP Loan. While our Acquisition ofOblong Industries does provide additional revenues to the Company, the cost to further develop and commercialize its product offerings is expected to exceed its revenues for the foreseeable future. However, we have achieved certain revenue and cost synergies in connection with combiningGlowpoint andOblong Industries ; we reduced the total of general and administrative, research and development and sales and marketing expenses from$5,656,000 in the fourth quarter of 2019, to$4,560,000 in the first quarter of 2020, then to$3,637,000 in the second quarter of 2020, and then to$2,747,000 in -34- -------------------------------------------------------------------------------- third quarter 2020. We also expect to continue to invest in product development and sales and marketing expenses with the goal of growing the Company's revenue in the future. The Company believes that, based on the combined organization's current projection of revenue, expenses, capital expenditures, debt service obligations, and cash flows, it will not have sufficient resources to fund its operations for the next twelve months following the filing of this Report. We believe additional capital will be required to fund operations and provide growth capital including investments in technology, product development and sales and marketing. To access capital to fund operations or provide growth capital, we will need to raise capital in one or more debt and/or equity offerings. There can be no assurance that we will be successful in raising necessary capital or that any such offering will be on terms acceptable to the Company. If we are unable to raise additional capital that may be needed on terms acceptable to us, it could have a material adverse effect on the Company. The factors discussed above raise substantial doubt as to our ability to continue as a going concern. The accompanying condensed consolidated financial statements do not include any adjustments that might result from these uncertainties.
See Note 13 - Commitments and Contingencies to our condensed consolidated financial statements for discussion regarding certain additional factors that could impact the Company's liquidity in the future.
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