Annual report pursuant to Section 13 and 15(d)

LIQUIDITY, GOING CONCERN AND MANAGEMENT???S PLANS

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LIQUIDITY, GOING CONCERN AND MANAGEMENT’S PLANS
12 Months Ended
Apr. 30, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
LIQUIDITY, GOING CONCERN AND MANAGEMENT’S PLANS

2. LIQUIDITY, GOING CONCERN AND MANAGEMENT’S PLANS

 

The accompanying financial statements have been prepared on the basis that the Company will continue as a going concern. As of April 30, 2022, the Company had cash of $14.1 million and an accumulated deficit of $29.2 million. The Company had cash for the year ended April 30, 2021, totaling $1.9 million and accumulated deficit of $16.8 million. In the past, the Company has financed its operations principally through issuances of promissory notes and equity securities.

 

In March of 2021, the Company entered into a securities purchase agreement (the “SPA”) with DPL, a California limited liability company (“DPL”) and wholly owned subsidiary of BitNile Holdings, Inc. (“BitNile”), a related party, pursuant to which the Company agreed to sell an aggregate of 6,666,667 shares of common stock for an aggregate of $10 million, or $1.50 per share, which sales were made in tranches. On March 9, 2021, DPL paid $4 million, less the $1.8 million in advances and the surrender for cancellation of the $50,000 convertible promissory note, each as described below, for an aggregate of 2,666,667 shares of common stock. Under the terms of the SPA, DPL purchased an additional (i) 1,333,333 shares of common stock in July 2021, upon U.S. Food and Drug Administration (“FDA”) approval of the Company’s Investigational New Drug (“IND”) application for the phase I clinical trials for a purchase price of $2 million; and (ii) 2,666,667 shares of the common stock in July 2022, upon completion of these phase I clinical trials for a purchase price of $4 million. In addition, the Company issued DPL warrants to purchase an aggregate of 6,666,667 shares of common stock at an exercise price of $3.00 per share. Finally, the Company agreed that for a period of eighteen (18) months following the date of the payment of the final tranche of $4 million, DPL will have the right to invest an additional $10 million on the same terms, except that no specific milestones have been determined with respect to the additional $10 million as of the date of this Annual Report.

 

The Company expects to continue to incur losses for the foreseeable future and needs to raise additional capital until it is able to generate revenues from operations sufficient to fund its development and commercial operations. However, based on the Company’s current business plan, management believes that the Company’s cash and cash equivalents at April 30, 2022 are sufficient to meet the Company’s anticipated cash requirements during the twelve-month period subsequent to the issuance of the financial statements included in this Annual Report.