Jim Sidoti: And then how are you managing cash at this point? You ended the year, I believe it was under $1 million. Do you have access to a line of credit, or how are you funding operations?
John Price: We’ve been – we’ve pretty much been, over the last couple of months, staying roughly static on the cash position. And as I mentioned, there are a couple things that we are working on. One is the stimulus program from the government, which we appear to qualify for. We’ve been successful in getting government funding back in the past through the PPP loans and other methods. And we’re involved in two lawsuits, one of which wants to have a settlement discussion now. But obviously, it’s more of a challenge for growth, Jim, in having limited working capital without doing something to continue to expand our business.
Jim Sidoti: Okay. But do you think with the cost-cutting initiatives that you have put in place, that you’ll have enough – your cash flow is sufficient to sustain the current operations without any growth?
John Price: We’re not going to be able to hit our growth numbers without some additional capital, either through stimulus or equity or some additional debt on our line of credit.
Jim Sidoti: Okay. I think that’s it for me. Thank you.
Operator: Thank you. . And the next question is coming from Bill Sutherland from Benchmark Company. Bill, your line is live.
Bill Sutherland: Thanks, and good morning. The bad debt outlook, now that you’ve got a much more – an improved current picture, well, and also the cleanup, what should we think about as far as gross versus net revenue for the year?
John Farlinger: John, do you want to answer that question for our model?
John Price: Yep, Bill. Good morning. So, for Q1, as we discussed on the call, we’re forecasting it to be less than $2 million. And one of the topics where we attempted to tackle with the reserves is to just push most of that bad debt, address it in 2022 so that are gross revenue in net revenue really do start to align moving forward. I think that as you take a look over €˜23, we really should not have the same level of bad net experience obviously that we saw in €˜22.
John Farlinger: Yep. Bill, one comment here. This was the first year where cash receipts, even before the write-downs, were approximating revenue. We’re getting pretty close. And we see that continuing in the first quarter and the second quarter of this year. So, Jim, to your point, we’re going to need to do something, but historically, revenue has far exceeded cash flow and that was our problem. We weren’t able to collect cash on a lot of these bad debts, or a lot of the AR and hence it became bad debt. This is the first time where cash flow is either approximating or potentially exceeding revenue, which is helping us. And the other key data point, as John pointed out, is the reduction in days to collect. And from the end of 2021 to the end of 2022, we cut those days in half, and it went from approximately 200 plus days to 105.
I think the numbers were 209 to 105. So, you’re speeding up cash flow, and that is helping from a working capital standpoint. But our challenge is, our goal is to continue to grow, consolidate, and expand our business. That will be difficult to do without some additional capital. And so, we’ve either got to expedite getting the money back from the federal government, so the lawsuit, or we’re going to have to go back and raise some capital in the market.
