NOTE 3 — GOING CONCERN

The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As of April 30, 2020, the Company had cash of approximately $2.7 million, working capital of approximately $3.0 million, and an accumulated deficit of approximately $31.6 million. The Company had a net loss and cash used in operating activities of approximately $5.2 million and $3.9 million, respectively, during the year ended April 30, 2020. As a result of the utilization of cash in its operating activities, and the development of its assets, the Company has incurred losses since it commenced operations. The Company’s primary source of operating funds since inception has been equity financings. As of April 30, 2020, the Company had sufficient cash to fund its operations for approximately 9 to 12 months and expects that it will be required to raise additional funds to fund its operations thereafter. These matters raise substantial doubt about the Company’s ability to continue as a going concern for the twelve months following the issuance of these financial statements.

On June 20, 2019, the Company sold 1,250 Series F Preferred units for an aggregate purchase price of $2,500,000, or $2,000 per unit. Each unit consisted of one (1) share of 0% Series F Preferred Stock and 87 Class X Warrants on a registered basis and 175 Class A Warrants on an unregistered basis (see Note 8).

On April 1, 2020, the Company sold 357,142 units of common shares and warrants for an aggregate purchase price of $2,000,000 (see Note 8), which the Company believes may not be indicative of the Company’s ability to raise additional funds for operations, due to a further downturn in equity markets for companies in its industry. There can be no assurance that the Company will be able to raise additional capital or if the terms will be favorable.

The consolidated financial statements do not include any adjustments relating to the recoverability and classification of asset amounts or the classification of liabilities that might be necessary should the Company be unable to continue as a going concern.