Quarterly report pursuant to Section 13 or 15(d)

Going Concern

Going Concern
3 Months Ended
Mar. 31, 2020
Organization Consolidation And Presentation Of Financial Statements [Abstract]  
Going Concern

Note 7. Going Concern

 The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates realization of assets and the satisfaction of liabilities in the normal course of business within one year after the date the consolidated financial statements are issued. In accordance with Financial Accounting Standards Board, or the FASB, Accounting Standards Update No. 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40), our management evaluates whether there are conditions or events, considered in aggregate, that raise substantial doubt about our ability to continue as a going concern within one year after the date that the financial statements are issued, no adjustments to the financial statements have been made to account for this uncertainty.

The Company has experienced significant operating losses over the past 4 years (2016 through March 31, 2020) with cumulative losses of approximately $15,046,000 and negative cashflows from operations. These losses resulted in the usage of all cash proceeds from the Company’s initial public offering in 2015. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

On January 8, 2020, the Company settled the $3,461,782 note with $100,787 accrued interest owed to Craven by exchanging the note and accrued interest for ownership of IIU, Inc. On March 23, 2020, the Company’s entered into a merger agreement (See Note 1) which resulted in a $1.25 million cash infusion into the Company. We plan to expand our operations and increase profits as a result of the merger agreement which is in the due diligence period and has a termination period of 8 months from the date of the agreement with an extension period not to extend past March 2021.

However, we may not have enough cash to satisfy our estimated liquidity needs for the 12 months from the issuance of these financial statements. We cannot state with certainty that the Hanfor merger will close and depending upon the circumstances under which the merger would be terminated, we may not have sufficient liquidity to meet the obligations of the Company.