Quarterly report pursuant to Section 13 or 15(d)

Going Concern

v3.19.1
Going Concern
9 Months Ended
Jan. 31, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Going Concern

NOTE 3 — GOING CONCERN

 

The accompanying condensed 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. The Company has incurred significant operating losses since its inception. As of January 31, 2019, the Company had cash of approximately $3.2 million, working capital of approximately $3.2 million, an accumulated deficit of approximately $24.8 million, and cash used in operating activities of approximately $4.6 million. 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. 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.

 

The condensed 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.

 

The Company consummated private placements to several investors for the sale of the Company’s Series B Convertible Preferred Stock (“Series B Preferred Stock”) and Series C Convertible Preferred Stock (“Series C Preferred Stock”) for aggregate net proceeds of approximately $10.9 million between July 2016 and October 2016, received net proceeds from sale of the Company’s common stock of approximately $2.6 million between July 2017 and October 2017 and completed a private placement for the sale of the Company’s Series E Convertible Preferred Stock (“Series E Preferred Stock”) and warrants for aggregate net proceeds of approximately $4.9 million in January 2018. All preferred shares were converted to common shares during the fiscal year ended April 30, 2018.

  

On November 2, 2018, the Company entered into an At-the-Market Offering Agreement (the “ATM Agreement”) with H.C. Wainwright& Co., LLC (“Wainwright”) as sales manager. Under the terms of the ATM Agreement, the Company will be entitled to sell, at its sole discretion and from time to time as it may choose, common shares in the capital of the Company (“Shares”) through Wainwright, with such sales having an aggregate gross sales value of up to $1,000,000 (the “Offering”). Subject to the terms and conditions of the ATM Agreement, Wainwright will use its commercially reasonable efforts to sell the Shares from time to time, based upon the Company’s instructions. The Company has provided Wainwright with customary indemnification rights, and Wainwright will be entitled to a commission at a fixed commission rate equal to 3.0% of the gross proceeds per Share sold. The ATM Agreement will remain in full force and effect until the ATM Agreement is terminated. For the quarter ended January 31, 2019, the Company has sold 235,071 shares and raised a net of $178,872, net of issuance costs of $60,300, through the ATM Agreement at prices per share averaging $1.02.

 

There can be no assurance that the Company will be able to raise additional capital or if the terms will be favorable.