Liquidity and Capital Resources
As of December 31, 2022, we had cash of approximately $7,753,644. The following table provides a summary of our net cash flows from operating, investing, and financing activities.
| | | | | | |
| | |
| | Three months ended December 31, |
| | 2022 | | 2021 |
Net cash used in operating activities | | $ | (6,823,229) | | $ | (3,477,763) |
Net cash used in investing activities | | | (618,032) | | | — |
Net cash provided by (used in) financing activities | | | 1,122,991 | | | 977,313 |
Change in cash | | | (6,318,270) | | | (2,500,450) |
| | | | | | |
Cash, beginning of period | | | 14,071,914 | | | 4,162,548 |
Cash, end of period | | $ | 7,753,644 | | $ | 1,662,098 |
Cash Flows for the Three Months Ended December 31, 2022, and 2021
Net Cash Flow Used in Operating Activities
Our net cash used in operating activities during the three months ended December 31, 2022, was $6,823,229, an increase of $3,345,466, or 96%, from $3,477,763 for the three months ended December 31, 2021. This increase in net cash used in the three months ended December 31, 2022, was primarily due to the net loss of $5,259,439 and a net decrease in operating assets and liabilities of $4,928,594, offset by stock-based compensation expense of $1,790,807, amortization of content assets of $682,167, amortization of debt discount of $661,335, depreciation and amortization expense of $187,716 and amortization of right-of-use assets of $42,779.
Our net cash used in operating activities for the three months ended December 31, 2021, was $3,477,763 primarily due to the net loss of $4,273,995, a net decrease in operating assets and liabilities of $924,639, a gain on extinguishment of debt of $490,051 and a change in fair value of derivatives of $98,745, offset by stock-based compensation expense of $1,549,406, amortization of debt discount of $358,248, amortization of content assets of $311,055, amortization of right-of-use assets of $38,555, depreciation and amortization of $32,403 and a write-off for bad debt expense of $20,000.
Net Cash Flow Used in Investing Activities
Our net cash used in investing activities during the three months ended December 31, 2022, was $618,032, primarily due to the purchase of property and equipment of $618,032 compared to $0 for the three months ended December 31, 2021.
Net Cash Flow Provided by Financing Activities
Our net cash provided by financing activities during the three months ended December 31, 2022, was $1,122,991, an increase of $145,678 or 15% from $977,313 for the three months ended December 31, 2021, primarily due to net proceeds from non-revolving line of credit of $1,429,441, offset by the repayment on loans of $250,125, deferred offering costs of $56,024 and debt issuance costs of $301.
Our net cash provided by financing activities for the three months ended December 31, 2021, was primarily due to receipt of proceeds from the issuance of common stock of $1,250,000, offset by the repayment of a stockholder’s loan of $272,687.
As a result of the above activities, we recorded a net decrease in cash of $6,318,270 for the three months ended December 31, 2022. We reported a cash balance of $7,753,644 as of December 31, 2022.