A few specifics from the abovementioned statement:
Our cash flows from operations and liquidity have been materially adversely affected by the effects of the COVID-19 pandemic. The pandemic quickly negatively impacted the restaurant and bar industry, and our business suffered materially as a result. In many jurisdictions, including those in which we have many customers and prospective customers, restaurants and bars have been ordered by the government to shut down or close all on-site dining. Approximately 70% of our customers have requested that their subscriptions to our service be temporarily suspended, and we are uncertain if any of these customers will reopen for business or if they will continue to subscribe to our service if they do reopen. As a result, we have experienced material decreases in subscription revenue, advertising revenue and cash flows from operations, which we expect to continue for at least as long as the restaurant and bar industry continues to be negatively impacted by the COVID-19 pandemic.
We are carefully monitoring our liquidity, which has been materially and adversely impacted by the COVID-19 pandemic, and have taken steps to reduce our operating expenses and preserve capital. While we expect to meet our near term debt service obligations to Avidbank under our loan and security agreement, and we believe we satisfied our financial covenants under that agreement as of March 31, 2020, we expect that it will be difficult for us to do so in subsequent periods. Our ability to meet our debt service obligations and to satisfy our financial covenants will depend on our ability to operate and manage our business during this challenging time, particularly in light of having only 17 employees (as compared to 74 at December 31, 2019), on the extent to which the COVID-19 pandemic ultimately impacts our cash flows and on the duration of the impact, and on our ability to recover from the impact, all of which are uncertain and difficult to predict at this time. We may be required to implement additional cost-reduction measures going forward, which could further adversely affect our ability to manage and operate our business.
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