Quarterly report pursuant to Section 13 or 15(d)

LIQUIDITY AND GOING CONCERN

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LIQUIDITY AND GOING CONCERN
6 Months Ended
May 31, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
LIQUIDITY AND GOING CONCERN
2. LIQUIDITY AND GOING CONCERN

 

The accompanying unaudited condensed consolidated financial statements have been prepared on the basis that the Company will continue as a going concern. The Company has incurred recurring losses and reported losses available to common stockholders for the six months ended May 31, 2016 and 2015, totaling $990,374 and $773,045, respectively, as well as an accumulated deficit as of May 31, 2016 amounting to $4,203,191. As a result of the Company’s continued losses, at May 31, 2016, the Company’s current liabilities significantly exceed current assets, resulting in negative working capital of $2,927,449. Further, the Company does not have adequate cash to cover projected operating costs for twelve months from the issuance date of these financial statements and to repay convertible notes payable and notes payable in the aggregate principal amount of $716,575 that are in default at May 31, 2016. These factors raise substantial doubt about the ability of the Company to continue as a going concern. In order to ensure the continued viability of the Company, either future equity or debt financings must be obtained or profitable operations must be achieved in order to repay the existing short-term debt and to provide a sufficient source of operating capital. To address its liquidity issues, the Company continues to explore opportunities for additional financing and/or restructuring of its existing debt. No assurances can be made that the Company will be successful obtaining additional equity or debt financing and/or in restructuring existing debt, or that the Company will achieve profitable operations and positive cash flow. The unaudited condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern. Further, subsequent to year end the Company has primarily funded its operations through the issuance of additional debt financings (see Note 12).