2. Going Concern and Management’s Plans

At June 30, 2021, the Company’s principal sources of liquidity were its cash and cash equivalents and the net proceeds from the sale of common stock during the first quarter of 2021.

The Company had an accumulated deficit of ($94,429,148) at June 30, 2021. During the three and six months ended June 30, 2021, the Company generated a net loss from continuing operations of ($589,612) and ($1,345,227). During the six months ended June 30, 2021, the Company used cash in continuing operations of $663,073. At June 30, 2021, the Company had a cash balance of $2,507,585. Total revenues were approximately $2,945,000 and $1,934,000 for the six months ended June 30, 2021 and 2020, respectively. Total revenues were approximately $1,460,000 and $952,000 for the three months ended June 30, 2021 and 2020, respectively. The Company had a working capital deficiency from continuing operations of approximately ($738,000) and ($1,156,000) at June 30, 2021 and December 31, 2020, respectively. These conditions raise substantial doubt about its ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company’s ability to further implement its business plan, raise capital, and generate revenues. The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

Management believes that its available cash on hand and cash flow from operations may not be sufficient to meet our working capital requirements for the twelve-month period subsequent to the issuance of our financial statements. In order to accomplish our business plan objectives, the Company will need to continue its cost reduction efforts, increase revenues, raising capital through the issuance of common stock, or through a strategic merger or acquisition. However, there can be no assurances that our business plans and actions will be successful, that we will generate anticipated revenues, or that unforeseen circumstances will not require additional funding sources in the future or effectuate plans to conserve liquidity. Future efforts to improve liquidity through the issuance of our common stock may not be successful or they may not be available on acceptable terms, if at all.

On February 1, 2021, the Company entered into a private placement with Ms. Yiran Gu, in which the Company sold 500,000 shares of its common stock at a price per share of $2.00 for gross proceeds of $1,000,000.

On July 9, 2021 the Company closed the registered direct offering, pursuant to which certain institutional accredited investors purchased 1,470,588 shares of the Company’s common stock, par value $0.01 per share, at a per share price equal to $1.70 for gross proceeds of $2,499,999.60.