Liquidity and Capital Resources
As of March 31, 2022, we had cash of approximately $637,998. The following table provides a summary of our net cash flows from operating, investing, and financing activities.
| | | | | | |
| | Six months ended | | Six months ended |
| | March 31, | | March 31, |
| | 2022 | | 2021 |
Net cash used in operating activities | | $ | (5,598,220) | | $ | (4,350,902) |
Net cash used in investing activities | | | — | | | (745,771) |
Net cash provided by (used in) financing activities | | | 2,073,670 | | | 4,226,230 |
Change in cash | | | (3,524,550) | | | (870,443) |
| | | | | | |
Cash, beginning of period | | | 4,162,548 | | | 1,971,923 |
Cash, end of period | | $ | 637,998 | | $ | 1,101,480 |
We have historically sought and continue to seek financing from private sources to implement our business plans. To satisfy our financial commitments, we have historically relied on private party financing, but that has inherent risks in terms of availability and adequacy of funding.
For the next twelve months, we anticipate that we will need to supplement our cash from revenues with additional cash raised from equity investment or debt transactions to ensure that we will have adequate cash to support our minimum operating cash requirements and thus to continue as a going concern.
There can be no guarantee or assurance that we can raise adequate capital from outside sources. If we are unable to raise funds when required or on acceptable terms, we may have to significantly reduce, or discontinue our operations.
Net cash used in operating activities
Net cash flows used in operating activities for the six months ended March 31, 2022, were $5,598,220 primarily due to the net loss of $9,248,825 offset by amortization of debt discount of $713,197, depreciation and amortization of $64,802, amortization of license content assets of $482,213, amortization of right-of-use assets of $78,114, stock-based compensation expense of $2,665,724, write off of $20,000, gain on extinguishment of debt of $490,051, change in fair value of derivatives of $146,313 and net increase in operating assets and liabilities of $117,631.
Net cash flows used in operating activities for the six months ended March 31, 2021, were $4,350,902 primarily due to the net loss of $13,923,339 offset by amortization of debt discount of $465,641, depreciation and amortization expense of $1,075,898, amortization of license content assets of $94,086, amortization of right-of-use assets of $70,596, stock-based compensation expense of $6,046,053, write off of bad debt expense $167,874, impairment of intangible assets of $2,390,799, net loss on settlement of obligations of $15,000, gain on settlement of obligations of $13,900, and net decrease in operating assets and liabilities of $738,059.
Net cash used in investing activities
There were no cash flows used in investing activities for the six months ended March 31, 2022, as compared to $745,711 primarily due to the acquisition of the fixed assets, net of cash acquired of $750,000 offset by collections of note receivable of $1,477, and purchase of equipment of $2,752.
Net cash flow from financing activities
Net cash provided by financing activities for the six months ended March 31, 2022, was $2,073,670 due to receipt of proceeds of $1,250,000 from the issurance of common stock, proceeds of $1,500,000 from a non-revolving line of credit, offset by $552,832 repayment of a stockholder’s loan, and $123,498 of deferred offering costs.