XML 17 R8.htm IDEA: XBRL DOCUMENT v3.6.0.2
Going Concern
9 Months Ended
Jan. 31, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Going Concern

NOTE 3. GOING CONCERN

 

The accompanying unaudited interim condensed 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 January 31, 2017 the Company has a working capital deficit of $94,374 and accumulated deficit of $2,978,719. The Company’s primary assets as at January 31, 2017 is 2,179,833 Ordinary Shares in Integumen Limited. A day one impairment loss of $2,179,832 has been recognized for accounting and financial reporting purposes due to the fact that Integument Ltd is a newly established entity, is in the process of listing on the AIM market , does not have any history of any private placement and consequently no valuation can readily be ascertained. Accordingly, for financial reporting purposes the investment in Integumen has been recorded at $1.

 

Prior to July 7, 2016 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 Integumen Limited (formerly Biosurface Limited) (“Integumen”) 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 Integumen a secured promissory note in the amount of $100,000 (the “Note”). Under the Note, Integumen 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”). On October 1, 2016, the Company and Integumen signed the APA under a plan of reorganization, liquidation and dissolution (the” Plan”) involving the sale of substantially all of the Company’s assets relating to its cosmeceutical products marketed under its “Visible Youth” trademark to Integumen.

 

The Company received $25,000 on October 14, 2016 and $30,000 on November 16, 2016 from Integumen in respect of its obligations to meet the Interim Costs for October and November.

 

On October 31, 2016 the Company filed a Definitive Information Statement on Form 14C in respect of the Plan and APA, a copy of which was mailed to shareholders on November 7, 2016. The Transaction was completed on December 2, 2016 and the Company received 2,632,868 ordinary shares in Integumen at a price of £1 per share, the nominal value. This comprised the total Consideration of £3,030,000 ($3,840,525) less assumed liabilities of £ 320,209 ($416,272) and the prepayment of the Note in the amount of £76,923 ($100,000).

 

The APA provided that 80 per cent. of the Consideration Shares should be issued on completion of the APA and the remaining 20 per cent. (subject to an adjustment depending on the value of the assumed liabilities) should be issued within 30 days of Admission of Integumen to AIM. However, prior to completion of the APA, the parties to the APA agreed upon the adjustment to the number of Consideration Shares to be issued to the Company by Integumen and, consequently at completion, the Company was issued with 2,632,868 Ordinary Shares in full and final satisfaction of the obligations of Integumen Limited and Integumen, Inc to provide consideration to the Company for the acquisition of the business assets.

 

The Company intends to hold the shares in Integumen as an investment for a minimum of 12 months after Completion to allow for an orderly transition of the technology and products. After the Completion Date, the Company shall not engage in any business activities except to the extent necessary to preserve the value of its assets, transfer its assets and knowhow, wind up its business affairs and give effect to the dissolution of the Company in accordance with the Plan.

 

Integumen was established on May 28, 2016 for the purpose of building a business in the area of Human Surface Science. The acquisition of Enhance and other complementary businesses in the areas of Skin Science, Oral-health and Wound-care completed by way of the issue of new shares in Integumen and the assumption of certain liabilities. Integumen plans to seek admission of its shares to trading on the AIM market of the London Stock Exchange and plans to raise capital to fund the future development and commercialisation of its technology portfolio. Integumen has appointed advisors in this regard. Prior to a potential listing and fundraise, Integumen will fund its activities out of existing cash reserves and a bank loan facility for €1m which Venn Life Sciences, the former owner of one of the acquired businesses currently guarantees.

 

As at January 31, 2017 $28,747 are due from Integumen and Post Completion Costs of $48,698 remain outstanding.

 

Given the outstanding amounts due from Integumen, the early stage of development of Integumen, uncertainties around the timing of its trading on AIM and the timing and size of its fundraising it is difficult for the Company to value its investment in Integumen. In addition, there can be no certainty that there will be a liquid market in the shares of Integumen and whether it will be able to meet its obligations to the Company in respect of funding the Company’s ongoing activities to dissolution.

 

The foregoing, and any subsequent, description of the Option Agreement, Note and the APA does not purport to be complete and is qualified in its entirety by reference to the complete text of the documents, which are filed as Exhibits 10.1, 10.2, 10.3, 10.4 and 10.5 to the Company’s Current Report on Form 8-K filed on October 5, 2016 and Schedule 14C Information Statement filed October 31, 2016.

 

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.