For the three months ended July 31, 20162020 and 2015,2019, we have generated limited sales revenues, have incurred significant expenses, and have sustained significant losses.

Revenues totaled $161,447$76,607 during the three months ended July 31, 20162020 as compared to $167,223$85,229 during the three months ended July 31, 2015,2019, a decrease of $5,776$8,622 or 3.5%.10.12%, primarily due to Covid-19. Revenues from continuing operations in both periods wereour Information Technology products declined $908 or 1.34% to $73,947 while revenues from the sale of vehicle history reports, mobile apps and monthly mobile app service fees. Other income in the 2015 three month period was comprised primarily of municipal lease fee income.

Cost of revenue consists of costs and fees incurred to third parties to construct and maintain mobile apps, as well as fees for subscription services related to vehicle history reports.reports and cost of goods purchased for New World Health Brand products. Cost of revenue was $14,486$20,148 during the three months ended July 31, 20162020 as compared to $44,146$14,787 during the three months ended July 31, 2015.2019. This $29,660$5,361 or 67.2% decrease36.25% increase was due to a decrease in third party costs incurred.

General and administrative expenses were $507,615$713,676 during the three months ended July 31, 2016,2020, compared to $763,050$224,709 during the three months ended July 31, 2016, a decrease2020, an increase of $255,435$488,967 or 33.5%217.60%, primarily due to overall reductions in expense duethe non-cash Black Scholes $464,718 valuation of options issued to management’s efforts to reduce overhead.management and directors. Expenses incurred during the current three month period consisted primarily of the following expenses: Compensation, options and related costs, $263,673;$594,763; Accounting, audit and professional fees, $34,356;$52,620; Consulting fees, $89,588;$12,580 and Rent, utilities and telecommunication expenses $64,741.$21,447. Expenses incurred during the comparative three month period in 20152019 consisted primarily of the following expenses: Compensation and related costs, $350,184;$151,421; Accounting, audit and professional fees, $161,555;$17,130; Consulting fees, $74,500;$7,134; and Rent, utilities and telecommunication expenses $72,617; and Stock and option based compensation, $68,490. 

Other (income) expense is comprised primarily of interest and financing costs and expense related to the change in fair value of our derivative liabilities. Net other expenseOther loss was $815,228$1,557,678 for the three months ended July 31, 2016,2020, compared to $970,267net other loss of $1,590,125 for the three months ended July 31, 2015,2019, a decrease in net other expense of $155,039$32,447 or 16.0%2.04%. The decrease results from our borrowing activities and the related costs. The change in the fair value of our derivative liabilities resulted primarily from our borrowing activities and the changes in our stock price and the volatility of our common stock during the reported periods.

Our net loss attributable to common stockholders for the three months ended July 31, 2016 decreased2020 increased by $434,281$468,735 or 26.7%26.81% to $1,194,019$2,217,058 from a loss of $1,628,300$1,748,323 for the three months ended July 31, 2015.2019. This decreaseincrease in net loss attributable to common stockholders for the three months ended July 31, 20162020 was primarily due to the factors discussed above.

As of July 31, 2016,2020, we had an accumulated deficit of $55,952,313$64,919,397 and a total deficit for the three months of $9,060,707.$12,783,660. We generated a deficit in cash flow from operations of $260,648$206,482 for the three months ended July 31, 2016.2020. This deficit results primarily from our net loss of $1,187,464,$2,214,895, partially offset by noncash expense of $707,647$1,915,039 and an increase of $245,674$164,171 in accounts payables and accrued expenses, and an increase in other assets of $26,250.

We met our cash requirements during the period through proceeds from the issuancessale of convertible and other notes of $182,000, and we sold preferred stock of our subsidiary for proceeds of $50,000, we$90,000, and the sale of notes payable in the amount of $130,944. We repaid notes in the amount of $22,000. We also received proceeds on a note payable to a related party in the amount of $23,000. Cash flows from discontinued operations included cash used by operating activities of $2,590.

We do not anticipate incurring significant research and development expenditures, and we do not anticipate the sale or acquisition of any significant property, plant or equipment, during the next twelve months. At July 31, 2016,2020, we had 116 full time employees. If we fully implement our business plan, we anticipate our employment base may increase during the next twelve months. As we continue to expand, we will incur additional cost for personnel. This potential increase in personnel is dependent upon our generating increased revenues and obtaining sources of financing. There is no guarantee that we will be successful in raising the funds required or generating revenues sufficient to fund the potential increase in the number of employees.

While we have raised capital to meet our working capital and financing needs in the past, additional financing is required in order to meet our current and potential future cash flow deficits from operations.

We continue to seek additional financing, which may be in the form of senior debt, subordinated debt or equity. We currently have no commitments for financing that aren’tare not at the investor’s election. There is no guarantee that we will be successful in raising the funds required to support our operations.

We estimate that we will need approximately $1,500,000$1,000,000 in addition to our normal operating cash flow to conduct operations during the next twelve months. However, there can be no assurance that additional private or public financing, including debt or equity financing, will be available as needed, or, if available, on terms favorable to us. Any additional equity financing may be dilutive to stockholders and such additional equity securities may have rights, preferences or privileges that are senior to those of our existing common or preferred stock. Furthermore, debt financing, if available, will require payment of interest and may involve restrictive covenants that could impose limitations on our operating flexibility. However, if we are not successful in generating sufficient liquidity from operations or in raising sufficient capital resources, on terms acceptable to us, this could have a material adverse effect on our business, results of operations, liquidity and financial condition, and we will have to adjust our planned operations and development on a more limited scale.

The effect of inflation on our revenue and operating results was not significant. Our operations are located in North America and there are no seasonal aspects that would have a material effect on our financial condition or results of operations.

The independent auditors report on our April 30, 20162020 and 20152019 consolidated financial statements included in the Company’s Annual Report states that the Company’s historical losses and the lack of revenues raise substantial doubts about the Company’s ability to continue as a going concern, due to the losses incurred and its lack of significant operations. If we are unable to develop our business, we have to discontinue operations or cease to exist, which would be detrimental to the value of the Company’s common stock. We can make no assurances that our business operations will develop and provide us with significant cash to continue operations.

In order to improve the Company’s liquidity, the Company’s management is actively pursuing additional financing through discussions with investment bankers, financial institutions and private investors. There can be no assurance the Company will be successful in its effort to secure additional financing.

We continue to experience net operating losses. Our ability to continue as a going concern is subject to our ability to develop profitable operations. We are devoting substantially all of our efforts to developing our business and raising capital. Our net operating losses increase the difficulty in meeting such goals and there can be no assurances that such methods will prove successful.

The primary issues management will focus on in the immediate future to address this matter include: seeking additional credit facilities from institutional lenders; seeking institutional investors for debt or equity investments in our Company; short term interim debt financing: and private placements of debt and equity securities with accredited investors.

To address these issues, we have engaged a financial advisory firm to advise and assist us in negotiating and raising capital.

The impact of inflation on the costs of the Company, and the ability to pass on cost increases to its customers over time is dependent upon market conditions. The Company is not aware of any inflationary pressures that have had any significant impact on the Company’s operations over the past quarter, and the Company does not anticipate that inflationary factors will have a significant impact on future operations.

The Company does not maintain off-balance sheet arrangements nor does it participate in non-exchange traded contracts requiring fair value accounting treatment.

The preparation of our financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and judgments that affect our reported assets, liabilities, revenues, and expenses, and the disclosure of contingent assets and liabilities. We base our estimates and judgments on historical experience and on various other assumptions, we believe to be reasonable under the circumstances. Future events, however, may differ markedly from our current expectations and assumptions. While there are a number of significant accounting policies affecting our financial statements, we believe the following critical accounting policy involves the most complex, difficult and subjective estimates and judgments.

Information Technology:

During the first quarter of 2019, the Company adopted ASU 2014-09, Revenue from Contracts with Customers (Topic 606), using the cumulative-effect method. The Company recognizesnew standard requires an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the following criteriaconsideration to which the entity expects to be entitled in exchange for those goods or services. The adoption did not have been met: persuasive evidencean impact in our consolidated financial statements, other than the enhancement of an arrangement exists, no significant Company obligations remain, collection of theour disclosures related receivable is reasonably assured, and the fees are fixed or determinable.to our revenue-generating activities. The Company acts as a principal in its revenue transactions as the Company is the primary obligor in the transactions.

Revenues from mobile app products are generally recognized upon delivery. Revenues from History Reports are generally recognized upon delivery / download. Prepayments received from customers before delivery (if any) are recognized as deferred revenue and recognized upon delivery.

The Company adopted Financial Accounting Standards Board Accounting Standard Codification Topic 718 (“ASC 718-10”), which records compensation expense on a straight-line basis, generally over the explicit service period of three to five years.

ASC 718-10 requires companies to estimate the fair value of share-based payment awards on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods in the Company’s Consolidated Statement of Operations. The Company is using the Black-Scholes option-pricing model as its method of valuation for share-based awards. The Company’s determination of fair value of share-based payment awards on the date of grant using an option-pricing model is affected by the Company’s stock price as well as assumptions regarding a number of highly complex and subjective variables. These variables include, but are not limited to the Company’s expected stock price volatility over the term of the awards, and certain other market variables such as the risk free interest rate.

The Company evaluates and accounts for conversion options embedded in its convertible instruments in accordance with professional standards for “Accounting“Accounting for Derivative Instruments and Hedging Activities”Activities” (“ASC 815-40”).

The Company accounts for convertible instruments (when it has determined that the embedded conversion options should not be bifurcated from their host instruments) in accordance with professional standards when “Accounting“Accounting for Convertible Securities with Beneficial Conversion Features,” as those professional standards pertain to “Certain“Certain Convertible Instruments.Instruments.” Accordingly, the Company records, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their earliest date of redemption. The Company also records when necessary deemed dividends for the intrinsic value of conversion options embedded in preferred shares based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. ASC 815-40 provides that, among other things, generally, if an event is not within the entity’s control could or require net cash settlement, then the contract shall be classified as an asset or a liability.

The Company assessed the classification of its derivative financial instruments as of July 31, 20162020 and April 30, 2016,2020, which consist of convertible instruments and rights to shares of the Company'sCompany’s common stock, and determined that such derivatives meet the criteria for liability classification under ASC 815.

ASC 815 generally provides three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them as freestanding derivative financial instruments. These three criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument subject to the requirements of ASC 815. ASC 815 also provides an exception to this rule when the host instrument is deemed to be conventional, as described.

See Note A to the unaudited condensed consolidated financial statements for a description of recent accounting pronouncements, including the expected dates of adoption and estimated effects on our unaudited condensed consolidated financial statements, which is incorporated herein by reference.

Not applicable.

We maintain disclosure controls and procedures, as defined in Rule 13a-15(e) promulgated under the Exchange Act that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Principal Financial Officer, as appropriate to allow timely decisions regarding required disclosure. We carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Principal Financial Officer, of the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of July 31, 2016.2020. Based on the evaluation of these disclosure controls and procedures, and in light of the material weaknesses found in our internal controls, the Chief Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures as of the end of the period covered by this report were not effective.

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control over financial reporting that is less severe than a material weakness, yet important enough to merit attention by those responsible for oversight of the company'scompany’s financial reporting. In our assessment of the effectiveness of internal control over financial reporting as of July 31, 2016,2020, we determined that control deficiencies existed that constituted material weaknesses, as described below:

Due to our size and nature, segregation of all conflicting duties may not always be possible and may not be economically feasible. As a result, we have not been able to take steps to improve our internal controls over financial. However, to the extent possible, we will implement procedures to assure that the initiation of transactions, the custody of assets and the recording of transactions will be performed by separate individuals. Management is currently evaluating what steps can be taken in order to address these material weaknesses.

Accordingly, we concluded that these control deficiencies resulted in a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis by our internal controls.

As a result of the material weaknesses described above, management has concluded that we did not maintain effective internal control over financial reporting as of July 31, 20162020 based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In light of these significant deficiencies, we performed additional analyses and procedures in order to conclude that our consolidated financial statements for the three months ended July 31, 20162020 included in this Quarterly Report on Form 10-Q were fairly stated in accordance with U.S. GAAP. Accordingly, management believes that despite our significant deficiency, our consolidated financial statements for the three months ended July 31, 20162020 are fairly stated, in all material respects, in accordance with U.S. GAAP.

There was no change in our internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) that occurred during the fiscal quarter to which this report relates that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Management does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all error and fraud. Any control system, no matter how well designed and operated, is based upon certain assumptions and can provide only reasonable, not absolute, assurance that its objectives will be met. Further, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the Company have been detected.

As at July 31, 2016,2020, we were not a party to any material pending legal proceeding except as stated below. From time to time, we may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business.

The Company has received noticenotices dated April 1, 2016, May 13, 2016 and July 22, 2016 from two lenders claiming defaults relating to conversion requests of $8,365 principal and $643 interest and $5,000 principal, with regard to notes in the total amounts of $55,125 and $27,500, respectively, which the companyCompany has refused to process and believes it has defenses in that regard. The company believes these claims are contingent, unliquidated and disputed. There can be no assurance that the Company would prevail should litigation with regard to any of these requests occur. These liabilities have been recorded in the unaudited condensed consolidated financial statements.

We are subject to certain risks and uncertainties in our business operations including those which are described below. The risks and uncertainties described below are not the only risks we face. Additional risks and uncertainties not presently known or which are currently deemed immaterial may also impair our business operations. A description of factors that could materially affect our business, financial condition or operating results were included in Item 1A “Risk Factors” of our Form 10-K for the year ended April 30, 2016, filed on August 26, 2016,2020, and is incorporated herein by reference.

Each of the issuance and sale of securities described below was deemed to be exempt from registration under the Securities Act in reliance on Section 4(2)4(a)(2) of the Securities Act of 1933, as amended, as transactions by an issuer not involving a public offering. No advertising or general solicitation was employed in offering the securities. Each purchaser is a sophisticated investor (as described in Rule 506(b) (2) (ii) of Regulation D) or an accredited investor (as defined in Rule 501 of Regulation D), and each received adequate information about the Company or had access to such information, through employment or other relationships, to such information.

Sales of Preferred Stock, Common Stock and Warrants:

During the three months ended July 31, 20162020 the Company enteredCompany:

Sold 206 Units C Convertible Preferred stock for $103,000. Each Unit consists of 1 share of Series C Preferred stock (convertible at any time into convertible notes with an aggregate principal amount300 shares of $92,000. The notes bears interest at 8% perthe Company’s common stock) and 150 two year and mature on various dates or have a maturity that is based onWarrants to purchase one share of the outcome of certain legal proceedings. The notes are convertible intoCompany’s common stock at the note holder’s option at 60% of the applicable closing price of our common stock.

Issued 92 Units C Convertible Preferred stock upon the conversion of $51,500.56 principal amount$45,829 of notes payable. The issuancepayable and accrued interest thereon. Each Unit consists of 1 share of Series C Preferred stock (convertible at any time into 300 shares of ourthe Company’s common stock) and 150 two year Warrants to purchase one share of the Company’s common stock at $0.005 per share.

Issued 125 Units D Convertible Preferred stock upon the note conversion was exempt from registration underof $125,000 of the Securities ActCompany’s subsidiary’ preferred stock. Each Unit consists of 1933 in reliance on an exemption provided by Section 3(a)(9)1 share of that act.

Sold to two accredited investors 13,333,334 shares of common stock in advance of future conversions of notes payable. The issuance ofand two year warrants, to purchase 6,666,667 shares of our common stock upon the note conversion was exempt from registration under the Securities Act of 1933 in reliance on an exemption provided by Section 3(a)(9) of that act. During this period, cumulative shares advanced were reduced by 15,043,365 shares upon the conversion of $13,415.87 principal amount of notes payable and $1,099.53 of accrued interest.

None.