This Annual Report on Form 10-K contains, in addition to historical information,
certain forward-looking statements about our expectations, beliefs or intentions
regarding, among other things, our product development and commercialization
efforts, business, financial condition, results of operations, strategies or
prospects. You can identify forward-looking statements by the fact that these
statements do not relate strictly to historical or current matters. Rather,
forward-looking statements relate to anticipated or expected events, activities,
trends or results as of the date they are made. Because forward-looking
statements relate to matters that have not yet occurred, these statements are
inherently subject to risks and uncertainties that could cause our actual
results to differ materially from any future results expressed or implied by the
forward-looking statements. Many factors could cause our actual activities or
results to differ materially from the activities and results anticipated in
forward-looking statements. These factors include those set forth below as well
as those contained in "Item 1A - Risk Factors" of this Annual Report on Form
10-K. We do not undertake any obligation to update forward-looking statements,
except as required by applicable law. These forward-looking statements reflect
our views only as of the date they are made with respect to future events and
financial performance.
Overview
We previously were engaged in the development, manufacture and marketing of
non-invasive, whole body periodic acceleration ("WBPA") therapeutic platforms,
which are motorized platforms that move a subject repetitively head to foot. The
Company discontinued operations in May 2019, accordingly, certain assets,
liabilities and expenses are classified as discontinued operations.
Critical Accounting Policies and Estimates
Our discussion and analysis of our financial condition and results of operations
are based upon our consolidated financial statements, which have been prepared
in accordance with accounting principles generally accepted in the United
States. The preparation of these consolidated financial statements requires us
to make estimates and judgments that affect the reported amounts of assets,
liabilities, revenues and expenses, and related disclosure of contingent assets
and liabilities. On an on-going basis, we evaluate our estimates, including
those related to income taxes and contingencies. We base our estimates on
historical experience and on various other assumptions that are believed to be
reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying values of assets and liabilities that are
not readily apparent from other sources. A more detailed discussion on the
application of these and other accounting policies can be found in Note 2 in the
Notes to the Consolidated Financial Statements set forth in Item 8 of this
Annual Report on Form 10-K. While we believe that the factors we evaluate
provide us with a meaningful basis for establishing and applying sound
accounting policies, we cannot guarantee that the results will always be
accurate. Since the determination of these estimates requires the exercise of
judgment, actual results could differ from such estimates.
7
Results of Operations
We have discontinued operations in May 2019. The Company is assessing potential
mergers, acquisitions and strategic collaborations.
Year Ended July 31, 2020 Compared to Year Ended July 31, 2019
General and administrative costs and expenses. General and administrative
("G&A") costs and expenses from continuing operations was $165,000 for the year
ended July 31, 2020, as compared to $446,000 for the year ended July 31, 2019.
This $281,000 net decrease was primarily associated with professional fees
incurred in the year ended July 31, 2019. There was no stock-based compensation
expense for the years ended July 31, 2020 and 2019.
Total operating costs and expenses. Total operating costs and expenses from
continuing operations was $165,000 for the year ended July 31, 2020, as compared
to $446,000 for the year ended July 31, 2019. This $281,000 increase is
primarily attributable to G&A noted above.
Interest and other expense. Interest was $0 for the year ended July 31, 2020, as
compared to $93,000 for the year ended July 31, 2019. This $93,000 decrease was
primarily attributable to extinguishment of debt and related accrued interest as
described in Note 5. In addition, the Company incurred a loss on the
extinguishment of debt of $1.1 million during the year ended July 31, 2019.
Income (Loss) from discontinued operations. Income from discontinued operations
was $2,000 for the year ended July 31, 2020, as compared to a loss of $10,000
for the year ended July 31, 2019. This $12,000 increase is primarily
attributable to other income as a result of an accrual reversal and a gain on
the exchange of inventory (see note 3).
Liquidity and Capital Resources
Our operations have been primarily financed through private sales of our equity
securities and advances under credit facilities previously available to us.
At July 31, 2020, we had cash of $203,000 and negative working capital of
approximately $82,000. We expect that our existing funds will not be sufficient
to support our current operations over the next twelve months. No assurance can
be given that such additional financing will be available on acceptable terms or
at all. Our ability to sell additional shares of our stock and/or borrow cash
could be materially adversely affected by the economic uncertainty in the global
equity and credit markets. Current economic conditions have been, and continue
to be, volatile, and continued instability in these market conditions may limit
our ability to access the capital necessary to fund and grow our business and to
replace, in a timely manner, maturing liabilities.
8
Net cash used in operating activities decreased to $150,000 for the year ended
July 31, 2020 as compared to $437,000 for the year ended July 31, 2019. This
$287,000 decrease was principally due to the decrease in the operating loss
offset by an increase in cash provided by accounts payable and accrued expenses.
In addition, there was a $1.07 million loss on the extinguishment of debt that
was added back to net loss to determine cash used for the year ended July 31,
2019.
Net cash provided by financing activities decreased to $0 for the year ended
July 31, 2020 as compared to $700,000 for the year ended July 31, 2019. The
$700,000 composed of proceeds from promissory notes and the issuance of common
stock during 2019 (see Note 5 and 6 to the accompanying audited consolidated
financial statements). There were not financing activities in 2020.
The Company plans include assessing potential mergers, acquisitions and
strategic collaborations. We will need to raise additional capital. There can be
no assurance that we will be able to raise additional capital on terms
acceptable to us or at all.
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