Quarterly report pursuant to Section 13 or 15(d)

1. Liquidity and Capital Resources

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1. Liquidity and Capital Resources
9 Months Ended
Sep. 30, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Liquidity and Capital Resources

1. Liquidity and Capital Resources

 

During the quarters ending September 30, 2019 and 2018, the Company primarily used revenues from its operation supplemented by cash to fund its operations.

 

Cash and cash equivalents are carried at cost and represent cash on hand, deposits placed with banks or other financial institutions and all highly liquid investments with an original maturity of three months or less as of the purchase date. The Company had $15,204,587 and $321,788 classified as cash and cash equivalents as of September 30, 2019, and December 31, 2018, respectively.

 

The Company maintains its cash balances with a high-credit-quality financial institution. At times, such cash may be more than the insured limit of $250,000. The Company has not experienced any losses in such accounts, and management believes the Company is not exposed to any significant credit risk on its cash and cash equivalents.

 

In an effort to mitigate credit risk, the Company may purchase highly liquid investments with an original maturity of three months or less. At September 30, 2019, the Company had two United States Treasury Bills with a maturity date of October 15, 2019 and bearing interest at a rate of approximately 1.69%.

 

The following table depicts the composition of the Company’s cash and cash equivalents as of September 30, 2019, and December 31, 2018:

 

   

September 30,

2019

   

December 31,

2018

 
             
Deposits placed with banks   $ 2,974,122     $ 321,788  
United States Treasury Bills     12,230,465        
Total cash and cash equivalents   $ 15,204,587     $ 321,788  

 

The Company has recently elected to accelerate its organic growth path through additional marketing, team development, synergistic acquisitions, and other corporate activities wherein it expects to generate negative cash flow and an additional demand for capital to fuel such growth.

 

The Company has commenced legal action against a client for breach of contract, adding a significant value to its receivables for fees that had been booked due to forbearance grants by the Company that were subsequently violated, causing the Company to increase its receivables accordingly (see Part II, Item 1, Legal Proceedings for more information).