NOTE 2 – Liquidity and Financial Condition

The Company reported a net loss of $2,946,000 for the year ended March 31, 2020. At March 31, 2020 and March 31, 2019, the Company’s accumulated deficit amounted to $172,246,000 and $169,238,000, respectively. The Company had working capital of $7,518,000 and $8,905,000 as of March 31, 2020 and March 31, 2019, respectively.

Subsequent to the year ended March 31, 2020, the Company received $1,542,000 in cash from the exercise of common stock purchase warrants and options, $1,300,000 under the Paycheck Protection Program and $609,000 from the sale of its Micromed Laboratories division. (See Note 19 – Subsequent Events)

In November 2019, the Company entered into a placement agency agreement with Dawson James Securities, Inc. The public offering price for each unit was $3.50. On November 29, 2019, at closing of the offering, the Company sold 446,577 shares of common stock for gross proceeds of $1,563,000 and net proceeds of $1,376,000 after deducting placement agent commissions and other offering expenses.

Management believes that the Company has access to additional capital resources through possible public or private equity offerings, debt financings, corporate collaborations or other means; however, the Company cannot provide any assurance that other new financings will be available on commercially acceptable terms, if needed. If the economic climate in the U.S. deteriorates, the Company’s ability to raise additional capital could be negatively impacted. If the Company is unable to secure additional capital, it may be required to take additional measures to reduce costs in order to conserve its cash in amounts sufficient to sustain operations and meet its obligations. These measures could cause significant delays in the Company’s continued efforts to commercialize its products, which is critical to the realization of its business plan and the future operations of the Company. These matters raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments that may be necessary should the Company be unable to continue as a going concern.

COVID – 19

On March 11, 2020 the World Health Organization declared the novel strain of coronavirus (COVID-19) a global pandemic and recommended containment and mitigation measures worldwide. In an effort to mitigate the continued spread of the virus, federal, state and local governments, as well as certain private entities have mandated various restrictions, including travel restrictions, restrictions on public gatherings and quarantining of people who may have been exposed to the virus. As a result of these restrictions, together with a general fear of the impact on the global economy and financial markets, there is significant uncertainty surrounding the potential impact on the Company. As events are rapidly changing, the Company is unable to accurately predict the impact that the coronavirus will have on its business due to uncertainties including, but not limited to, the duration of quarantines and other travel restrictions within China, the U.S. and other affected countries, the ultimate geographical spread of the virus, the severity of the disease, the duration of the outbreak and the public’s response to the outbreak.