Overview

The company currently has no sources of revenue and no specific business plan or purpose. Its business plan is to seek a business combination. Subsequent to the reporting period, the company entered into a license agreement with NLC Ltd. and NLC Viral Defense, LLC to research, develop, and sell natural supplements under the brand names NutraFlu and Nutravid19, as well as NLC’s Phase II clinical program for its anti-viral molecule NLC001. However, the company requires significant working capital to develop these licensed assets and there are no assurances it will receive the necessary financing or be able to successfully develop and commercialize any products.

Cash Flows & Going Concern

The company had no revenue and a net loss of $544,973 for the six months ended February 29, 2024. It has a working capital deficit of $2,785,022 and an accumulated deficit of $59,570,727 as of that date. The company does not have sufficient funds to support its daily operations for the next 12 months, which raises substantial doubt about its ability to continue as a going concern.

Critical Accounting Estimates

The company’s financial statements and management’s discussion and analysis require the use of judgments, assumptions, and estimates that affect the reported amounts. There have been no material changes to the company’s critical accounting estimates since the 2023 Form 10-K.

Results of Operations

For the three months ended February 29, 2024:

• Revenues: $0 (same as prior year period)
• Net loss: $289,744 (decreased from $603,389 in prior year period)
• Expenses decreased by $586,000, primarily due to reductions in lease termination, salaries, and general & administrative costs
• Other expenses increased by $272,000, mainly from higher interest expense and lower gain on debt extinguishment

For the six months ended February 29, 2024:

• Revenues: $0 (same as prior year period)
• Net loss: $544,973 (decreased from $1,235,055 in prior year period)
• Expenses decreased by $1,058,000, primarily due to reductions in general & administrative, professional fees, salaries, and lease termination costs
• Other expenses increased by $368,000, mainly from higher interest expense and lower gain on debt extinguishment

Liquidity and Capital Resources

• Used $299,212 in cash from operating activities in the six months ended February 29, 2024
• Received $356,890 in cash from financing activities, primarily from notes payable
• Had a cash balance of $107,527 as of February 29, 2024, which is not sufficient to fund 12 months of operations
• Will need to raise additional capital, likely through equity financing or notes payable, to continue operations and fund development of licensed assets

Assets and Liabilities

• Total assets of $121,504 as of February 29, 2024, primarily cash and prepaid expenses
• Total liabilities of $3,458,861 as of February 29, 2024, including accounts payable, accrued expenses, short-term loans, and convertible notes payable

Outlook

The company faces substantial doubt about its ability to continue as a going concern due to its lack of revenue, net losses, working capital deficit, and need for additional financing. Its ability to successfully develop and commercialize any products based on the licensed assets from NLC is uncertain and depends on its ability to raise sufficient capital. The company’s future remains highly uncertain.