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Going Concern
12 Months Ended
Apr. 30, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Going Concern

NOTE 4. GOING CONCERN

 

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. As at April 30, 2016 the Company has a working capital deficit of $ 995,024 (2015: $578,832) and accumulated deficit of $3,089,331 (2015: $2,476,581). The Company has relied on advances from its former CEO, director, Mercuriali Ltd and a related party to meet the working capital requirements. On June 19, 2015, the Company issued a convertible promissory note in the amount of $43,000 to Vis Vires Group Inc. On December 28, 2015, Vis Vires Group Inc. issued a notice of conversion and elected to convert $12,000 of the principal amount at an applicable conversion price of $0.0017 per share of common stock. Resultantly, the Company issued 7,058,824 shares of common stock. The principal amount and interest in total of $33,500 was paid on March 23, 2016. On September 29, 2015, as amended January 22, 2016, Mercuriali Ltd agreed to advance the Company an additional $90,000. Effective March 21, 2016, the Company entered into a Loan Agreement (Amendment 5) with Mercuriali Ltd. and Samuel Asculai providing for an increase in the loan amounts by Mercuriali Ltd. and Samuel Asculai in the event no additional third party monies are received by the Company from US$90,000 to US$150,000.

 

On July 7, 2016, the Company and Biosurface Limited (“Biosurface”) entered into a non-binding term sheet in respect of a strategic collaboration and an option agreement (the “Option Agreement”). The Company also issued to Biosurface a secured promissory note in the amount of $100,000 (the “Note”).

 

The Option Agreement grants Biosurface an option to acquire substantially all of the Company’s assets under a plan of reorganization (the “Option”). The consideration payable upon exercise of the Option is a sum equal to £3,030,000 ($3,912,033 ) comprised of £2,760,000 ( $3,563,436 ) in shares of Biosurface, less all sums due and owing under the Note, and the assumption of certain liabilities of the Company to the value of £270,000 ($348,597 ). The Option expires on July 31, 2016 and the US$100,000 was received by the Company on July 12, 2016.

 

Under the Note, Biosurface agreed to loan the Company US$100,000 conditional upon the Company entering into the Option Agreement and entering into good faith negotiations with a view to entering into a strategic collaboration via an asset purchase agreement (the “APA”). See Note 12: Subsequent Events.

 

The ability of the Company to continue as a going concern and become a profitable entity is dependent upon the continued financial support of Mercuriali Ltd, and the Company’s successful efforts to conclude the APA or to obtain and continue to obtain alternative additional funding, obtain alternative licensing, marketing or collaboration partners to enable it to reposition and re-launch its product line and generate sales and then attain profitable operations.

 

Additional financing will be required for ongoing project management and product development costs, to complete the design work currently underway for the consumer rebranding and packaging, to manufacture prototypes for studies and promotion, to undertake marketing clinical studies, to pay on-going patent and trademark costs and to provide day to day working capital. Further funding will also be required to manage the launch process, design and implement e-Commerce platforms, undertake any additional marketing clinical studies, marketing, advertising and media support, and to provide working capital prior to market launch.

 

Management is consequently focused on concluding the APA prior to July 31, 2016. In the event this strategic collaboration does not progress, management intends to pursue alternative funding structures including debt and equity finance, asset sales, licensing, marketing partnerships and alternative wider strategic collaborations. There can be no assurances, however, that management’s efforts to conclude the APA or to obtain alternative funding, licensing partners, marketing partners or enter into alternative strategic collaborations on terms satisfactory to the Company, or at all will, be realized or that future sales will be realized.

 

In addition, on November 19, 2015 as amended effective March 21, 2016 the Company’s President & CEO, CSO and General Counsel have agreed to amend their respective Consultancy Agreements and Employment Agreement such that payment for services is contingent upon the Company having completed cumulative financings of at least one million United States dollars ($1,000,000) prior to April 30, 2017. Each of these agreements was amended to bring forward the start of remuneration payments with such payment being contingent on receipt of Transaction Monies (as such term is defined in the agreements), in exchange for a reduction in minimum payment obligations and minimum termination payments payable in certain circumstances. In the opinion of the Board the revised remunerations structure incentivizes management, aligns better with the Company’s future strategy and service requirements, and reduces the potential cost on a change of control which may have had a negative effect on future potential corporate transactions.

 

These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. These financial statements do not include any adjustments that might result from the outcome of this uncertainty.