FORMERLY APPIPHANY TECHNOLOGIES HOLDINGS CORP.)

Notes to the Condensed Consolidated Interim Financial Statements

(Expressed in US dollars)

(unaudited)

1.Nature of Operations and Continuance of Business   

Verde Bio Holdings, Inc. (formerly Appiphany Technologies Holdings Corp.) (the “Company”) was incorporated in the State of Nevada on February 24, 2010. Currently, the Company is in the business of online fraud protection services.oil and gas exploration and investment.

Going Concern

These condensed consolidated financial statements have been prepared on a going concern basis, which implies that the Company will continue to realize its assets and discharge its liabilities in the normal course of business. As at January 31, 2019,2020, the Company has not recognized significant revenue, has a working capital deficit of $1,347,103,$2,643,673, and has an accumulated deficit of $5,286,734.$6,970,208. The continuation of the Company as a going concern is dependent upon the continued financial support from its management, and its ability to identify future investment opportunities and obtain the necessary debt or equity financing, and generating profitable operations from the Company’s future operations. The Company will continue to rely on equity sales of its common shares in order to continue to fund business operations. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern for a period of one year from the date these financial statements are issued.  These condensed consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.  

2.Summary of Significant Accounting Policies   

(a)Basis of Presentation and Principles of Consolidation   

The accompanying unaudited interim condensed consolidated financial statements of the Company should be read in conjunction with the consolidated financial statements and accompany notes filed with the U.S. Securities and Exchange Commission for the year ended April 30, 2018.2019. These interim condensed consolidated financial statements have been prepared on the same basis as the annual financial statements and in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the Company’s financial position, results of operations and cash flows for the periods shown. The results of operations for such periods are not necessarily indicative of the results expected for a full year or for any future period.

These interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“US GAAP”) and are expressed in U.S. dollars. The condensed consolidated financial statements are comprised of the records of the Company and its wholly owned subsidiary, IP Control Risk Inc., a company incorporated in the State of Nevada, United States. All intercompany transactions have been eliminated on consolidation. The Company’s fiscal year end is April 30.

(b)Use of Estimates   

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to the collectability of accounts receivable, fair value and estimated useful life of long-lived assets, fair value of convertible debentures, derivative liabilities, and deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

24

VERDE BIO HOLDINGS, INC.

(FORMERLY APPIPHANY TECHNOLOGIES HOLDINGS CORP.)

Notes to the Condensed Consolidated Interim Financial Statements

(Expressed in US dollars)

(unaudited)

2.Summary of Significant Accounting Policies   (continued) 

(c)Basic and Diluted Net Income (Loss)Loss per Share  

The Company computes net loss per share in accordance with ASC 260,Earnings per Share.Share. ASC 260 requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the income statement. Basic EPS is computed by dividing net income (loss)loss available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive.  As of January 31, 2019,2020, the Company had 985,577,875 (April 30, 20182,120,644,619 (January 31, 2019 – 569,554,940)840,322,050) potentially dilutive common shares outstanding.  Diluted EPS was calculated based onThe following table provides a reconciliation of the numerator and denominator used in computing basic and diluted net income less interest expense(loss) per share (the three-month periods are not included in the table below because the diluted net income (loss) per share are the same as the basic net income (loss) per share).  

(d)Fair Value Measurements  

The Company measures and change indiscloses the estimated fair value of financial assets and liabilities using the fair value hierarchy prescribed by U.S. generally accepted accounting principles. The fair value hierarchy has three levels, which are based on reliable available inputs of observable data. The hierarchy requires the use of observable market data when available. The three-level hierarchy is defined as follows:

Level 1 – quoted prices for identical instruments in active markets;

Level 2 – quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model derived valuations in which significant inputs and significant value drivers are observable in active markets; and

Level 3 – fair value measurements derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

Financial instruments consist principally of cash, other assets, accounts payable and accrued liabilities, notes payable, convertible debentures, derivative liabilities.liabilities and amounts due to related parties. The fair value of cash is determined based on Level 1 inputs. The fair value of the derivative liabilities are

25

determined based on Level 3 inputs. There were no transfers into or out of “Level 3” during the periods presented. The recorded

VERDE BIO HOLDINGS, INC.

(FORMERLY APPIPHANY TECHNOLOGIES HOLDINGS CORP.)

Notes to the Condensed Consolidated Interim Financial Statements

(Expressed in US dollars)

(unaudited)

(d)2.Summary of Significant Accounting Policies (continued)

values of all other financial instruments approximate their current fair values because of their nature and respective relatively short maturity dates or durations.

Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates.  

(e)Recent Accounting Pronouncements  

In February 2016, Topic 842, Leases was issued to replace the leases requirements in Topic 840, Leases. The main difference between previous GAAP and Topic 842 is the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous GAAP. A lessee should recognize in the balance sheet a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. If a lessee makes this election, it should recognize lease expense for such leases generally on a straight-line basis over the lease term.

The accounting applied by a lessor is largely unchanged from that applied under previous GAAP. Topic 842 will be effective for annual reporting periods beginning after December 15, 2018, including interim periods within those annual periods and is to be retrospectively applied. Earlier application is permitted. The adoption of thisCompany adopted the standard is not expected to have a material impact on the Company´s consolidated financial statements.  

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers. The new standard provides a five-step approach to be applied to all contracts with customers and also requires expanded disclosures about revenue recognition. The ASU is effective for annual reporting periods beginning after December 15, 2017, including interim periods and is to be retrospectively applied.1, 2019. The adoption of this standard did not have a material impact on the Company´s consolidated financial statements.

The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

3.Related Party Transactions  

During the periodnine months ended January 31, 2019,2020, the Company incurred $nil$33,000 (2018 - $56,337)$nil) in management fees to the former President and Director of the Company.

APPIPHANY TECHNOLOGIES HOLDINGS CORP.

NotesCompany, which was paid in Convertible Preferred Series B shares (see Note 7).  The Company also incurred an amount payable of $31 related to the Condensed Consolidated Interim Financial Statements

(Expressed in US dollars)

(unaudited)

payment of operating expenses.

4.Notes Payable  

(a)As at January 31, 2019,2020, the Company owed $4,616$3,626 (April 30, 20182019 - $4,616) in notes payable to non-related parties. Under the terms of the notes, the amounts are unsecured, bear interest at 6% per annum, and were due on OctoberJuly 31, 2016. The notes bear a default interest rate of 18% per annum.   

(b)As at January 31, 2019,2020, the Company owed $10,000 (April 30, 20182019 - $10,000) in notes payable to non-related parties. Under the terms of the note, the amount is unsecured, bears interest at 5% per annum, and was due on OctoberJuly 6, 2017. The note bears a default interest rate of 12% per annum.  

26

(c)As at January 31, 2019,2020, the Company owed $2,500 (April 30, 20182019 - $2,500) in notes payable to non-related parties. Under the terms of the note, the amount is unsecured, bears interest at 5% per annum, and iswas due on February 1, 2018. The note bears a default interest rate of 12% per annum. 

VERDE BIO HOLDINGS, INC.

(FORMERLY APPIPHANY TECHNOLOGIES HOLDINGS CORP.)

Notes to the Condensed Consolidated Interim Financial Statements

(Expressed in US dollars)

(unaudited)

4.Notes Payable (continued)

(d)As at January 31, 2019,2020, the Company owed $15,000 (April 30, 20182019 - $15,000) in notes payable to a non-related party. The note payable was issued as a commitment fee and was recorded to additional paid-in capital. Under the terms of the note, the amount is unsecured, bears interest at 8% per annum, and was due on September 15, 2017. The note bears a default interest rate of 20% per annum. 

5.Convertible Debentures  

(a)On February 13, 2017, the Company issued a convertible debenture, to a non-related party, for proceeds of $105,000. Pursuant to the agreement, the note was issued with an original issue discount and as such the purchase price was $94,500. Under the terms of the debenture, the amount is unsecured, bears interest at 10% per annum, and iswas due on November 13, 2017. The debenture is convertible into common shares of the Company at a conversion price equal to 60% of the lowest trading price of the Company’s common stock of the ten prior trading days immediately preceding the issuance of the note. In the event of default, the conversion price decreases to 50% of the lowest trading price of the Company’s common stock of the ten prior trading days immediately preceding the issuance of the note and the interest rate increases to 20%. During the year ended April 30, 2019, the Company incurred $1,020 in penalties that were added to the principal balance of the note.  

Due to this provision, the embedded conversion option qualifies for derivative accounting under ASC 815-15 “Derivatives and Hedging”. The fair value of the derivative liability resulted in a discount to the note payable of $105,000, of which $20,000 of the discount resulted from debt issuance costs. The carrying value of the convertible note will be accreted over the term of the convertible note up to the face value of $105,000. During the year ended April 30, 2018, the Company issued 29,327,000 shares of common stock for the conversion of $97,030 of the note and $30,321 of accrued interest. As at January 31, 2019,2020, the loan was in default, the carrying value of the note was $7,970$8,990 (April 30, 20182019 - $7,970)$8,990), and the unamortized total discount was $nil (2018 - $nil).

(b)On February 24, 2017, the Company issued a convertible debenture, to a non-related party, for proceeds of $33,000. Under the terms of the debenture, the amount is unsecured, bears interest at 12% per annum or 22% in the event of default,pre-default and is20% per annum thereafter, and was due on November 30, 2017. The debenture is convertible into common shares of the Company at a conversion price equal to 58% of the average of the lowest two trading prices of the Company’s common stock of the fifteen prior trading days immediately preceding the issuance of the note. During the yearnine months ended April 30, 2018,January 31, 2020, the Company incurred a $22,000$nil (year ended April 30, 2019 - $38,965) default fee on the note. 

Due to this provision, the embedded conversion option qualifies for derivative accounting under ASC 815-15 “Derivatives and Hedging. As at January 31, 2019,2020, the loan was in default and the carrying value of the note was $55,000$93,965 (April 30, 20182019 - $55,000)$93,965).

APPIPHANY TECHNOLOGIES HOLDINGS CORP.

Notes to the Condensed Consolidated Interim Financial Statements

(Expressed in US dollars)

(unaudited)

5.Convertible Debentures(continued) 

(c)On May 9, 2017, the Company issued a convertible debenture, to a non-related party, totaling $36,450. Pursuant to the agreement, the note was issued with an original issue discount and as such the purchase price was $30,000. Under the terms of the debenture, the amount is unsecured, bears interest at 10% per annum, and was due on February 9, 2018. The debenture is convertible into common shares of the Company at a conversion price equal to 60% of the lowest trading price of the Company’s common stock of the past ten trading days prior to notice of conversion. In the event of default, the conversion price decreases to 50% of the lowest trading price of the Company’s common stock of the ten prior trading days immediately preceding the issuance of the note and the interest rate increases to 20%. During the nine months ended  

27

January 31, 2020, the Company incurred $nil (year ended April 30, 2019, $27,902) in penalties that were added to the principal balance of the note.

Due to this provision, the embedded conversion option qualifies for derivative accounting under ASC 815-15 “Derivatives and Hedging”. The fair value of the derivative liability resulted in a discount to the note payable

VERDE BIO HOLDINGS, INC.

(FORMERLY APPIPHANY TECHNOLOGIES HOLDINGS CORP.)

Notes to the Condensed Consolidated Interim Financial Statements

(Expressed in US dollars)

(unaudited)

5.Convertible Debentures(continued) 

of $36,450, of which $6,450 of the discount resulted from debt issuance costs. The carrying value of the convertible note will bewas accreted over the term of the convertible note up to the face value of $36,450. As at January 31, 2019,2020, the loan was in default and the carrying value of the note was $36,450$64,352 (April 30, 20182019 - $36,450)$64,352).

(d)On June 28, 2017, the Company issued a convertible debenture, to a non-related party, totaling $57,250. Pursuant to the agreement, the note was issued with an original issue discount and as such the purchase price and proceeds received was $49,500. Under the terms of the debenture, the amount is unsecured, bears interest at 12% per annum, and was due on March 28, 2018. The debenture is convertible into common shares of the Company at a conversion price equal to the lesser of the 50% of the lowest trading price of the Company’s common stock of the past twenty-five trading days prior to notice of conversion or the issuance of the note. In the event of default the interest rate increases to 24%. 

Due to this provision, the embedded conversion option qualifies for derivative accounting under ASC 815-15 “Derivatives and Hedging”. The fair value of the derivative liability resulted in a discount to the note payable of $57,250, of which $7,750 of the discount resulted from debt issuance costs. The carrying value of the convertible note will bewas accreted over the term of the convertible note up to the face value of $57,250. During the yearnine months ended April 30, 2018,January 31, 2020, the Company issued 9,637,404417,948 shares of common stock for the conversion of $340 of the note and $8,874$18,044 of accrued interest penalties, and financing$3,000 of conversion fees and finance costs. During the three monthsyear ended January 31,April 30, 2019, the Company issued 16,793,000167,930 shares of common stock for the conversion of $1,569 of the note and $2,712 of accrued interest and $2,500 of conversion fees and finance costs. As at January 31, 2019,2020, the loan was in default and the carrying value of the note was $55,341 (April 30, 20182019 - $56,910)$55,341).

(e)On July 19, 2017, the Company issued a convertible debenture, to a non-related party, for proceedsin the amount of $33,333. Pursuant to the agreement, the note was issued with an original issue discount and as such the purchase price was $28,000. Under the terms of the debenture, the amount is unsecured, bears interest at 12% per annum, and iswas due on July 19, 2018. The debenture is convertible into common shares of the Company at a conversion price equal to the lesser of the 50% of the lowest trading price of the Company’s common stock of the past twenty-five trading days prior to notice of conversion or the issuance of the note. In the event of default the interest rate increases to 24%. During the year ended April 30, 2019, the Company incurred $854 in penalties that were added to the principal balance of the note. 

Due to this provision, the embedded conversion option qualifies for derivative accounting under ASC 815-15 “Derivatives and Hedging”. The fair value of the derivative liability resulted in a discount to the note payable of $33,333, of which $5,333 of the discount resulted from debt issuance costs. The carrying value of the convertible note willwas be accreted over the term of the convertible note up to the face value of $33,333.

During the yearnine months ended April 30, 2018,January 31, 2020, the Company issued 15,689,698255,475 shares of common stock for the conversion of $11,593$6,496 of the note and $928$2,446 of accrued interest. During the nine monthsyear ended January 31,April 30, 2019, the Company issued 27,766,139277,661 shares of common stock for the conversion of $13,196 of the note and $1,395 of accrued interest. As at January 31, 2019,2020, the loan was in default, the carrying value of the note was $8,544$2,902 (April 30, 20182019 - $5,948)$9,398), and the unamortized total discount was $nil (April 30, 20182019 - $15,792)$nil).

28

Included in the convertible debenture agreement is a $30,000 collateralized secured promissory note and a $33,333 back end note (with the same terms as the convertible debenture mentioned above).  As of January 31, 2019,2020, and at the date of filing, no proceeds have been received on the collateralized secured promissory note or the back-end note.

(f)On October 4, 2017, the Company issued a convertible debenture, to a non-related party, for proceedsin the amount of $36,000, which was the first tranche of a convertible debenture totaling $102,000 (the “October 4, 2017 Agreement”). Pursuant to the agreement,October 4, 2017 Agreement, the note was issued with an original issue discount and as such the purchase price was $25,000. Under the terms of the debenture, the amount is unsecured, bears  

VERDE BIO HOLDINGS, INC.

(FORMERLY APPIPHANY TECHNOLOGIES HOLDINGS CORP.)

Notes to the Condensed Consolidated Interim Financial Statements

(Expressed in US dollars)

(unaudited)

5.Convertible Debentures(continued) 

interest at 10% per annum, and iswas due on July 9, 2018. The debenture is convertible into common shares of the Company at a conversion price equal to the lesser of the 50% of the lowest trading price of the Company’s common stock of the past ten trading days prior to notice of conversion or the issuance of the note. In the event of default, the conversion price decreases to 40% of the lowest trading price of the Company’s common stock of the ten prior trading days immediately preceding the issuance of the note and the interest rate increases to 20%.

APPIPHANY TECHNOLOGIES HOLDINGS CORP.

NotesDuring the year ended April 30, 2019, the Company incurred $21,910 in penalties that were added to the Condensed Consolidated Interim Financial Statementsprincipal balance of the note.

(Expressed in US dollars)

(unaudited)

5.Convertible Debentures(continued) 

(f)Due to this provision, the embedded conversion option qualifies for derivative accounting under ASC 815-15 “Derivatives and Hedging”. The fair value of the derivative liability resulted in a discount to the note payable of $36,000, of which $11,000 of the discount resulted from debt issuance costs. The carrying value of the convertible note will bewas accreted over the term of the convertible note up to the face value of $36,000. As at January 31, 2019,2020, the loan was in default, the carrying value of the note was $36,000$57,910 (April 30, 20182019 - $862)$57,910), and the unamortized total discount was $nil (April 30, 20182019 - $35,138)$nil).

(g)On September 28, 2017, the Company issued a convertible debenture, to a non-related party, for proceedsin the amount of $33,333, which included$33,333. Pursuant to the agreement, the note was issued with an original issuanceissue discount of $7,833.and as such the purchase price was $25,500. Under the terms of the debenture, the amount is unsecured, bears interest at 12% per annum, and iswas due on September 28, 2018. The debenture is convertible into common shares of the Company at a conversion price equal to the lesser of the 50% of the lowest trading price of the Company’s common stock of the past twenty-five trading days prior to notice of conversion or the issuance of the note. In the event of default there is a penalty of 10% of the principal balance of the outstanding note and the interest rate increases to 24%.

Due to this provision, the embedded conversion option qualifies for derivative accounting under ASC 815-15 “Derivatives and Hedging”. The fair value of the derivative liability resulted in a discount to the note payable of $33,333, of which $7,833 of the discount resulted from debt issuance costs. The carrying value of the convertible note will bewas accreted over the term of the convertible note up to the face value of $33,333. During the year ended April 30, 2019, the Company recorded a $3,333 principal penalty. As at January 31, 2019,2020, the loan was in default, the carrying value of the note was $36,666 (April 30, 20182019 - $118)$36,666), and the unamortized total discount was $nil (April 30, 20182019 - $33,215)$nil).  During the period ended January 31, 2019, the Company recorded a $3,333 principal penalty.

Included in the convertible debenture agreement is a back end note for up to $33,333 (with the same amount of proceeds, original issue discount, maturity date, interest rate and conversion terms as the convertible debenture mentioned above).  As of January 31, 2019,2020, and at the date of filing, no proceeds have been received on the back-end note.

(h)On November 8, 2017, the Company issued a convertible debenture, to a non-related party, for proceedsin the amount of $33,000, which was the second tranche of the October 4, 2017 Agreement.agreement. Pursuant to the agreement, the note was issued with an original issue discount and as such the purchase price was $30,000. Under the terms  

29

of the debenture, the amount is unsecured, bears interest at 10% per annum, and iswas due on August 8, 2018. The debenture is convertible into common shares of the Company at a conversion price equal to the lesser of the 50% of the lowest trading price of the Company’s common stock of the past ten trading days prior to notice of conversion or the issuance of the note. In the event of default, the conversion price decreases to 40% of the lowest trading price of the Company’s common stock of the ten prior trading days immediately preceding the issuance of the note and the interest rate increases to 20%. During the year ended April 30, 2019, the Company incurred $20,084 in penalties that were added to the principal balance of the note.

Due to this provision, the embedded conversion option qualifies for derivative accounting under ASC 815-15 “Derivatives and Hedging”. The fair value of the derivative liability resulted in a discount to the note payable of $33,000, of which $3,000 of the discount resulted from debt issuance costs. The carrying value of the

VERDE BIO HOLDINGS, INC.

(FORMERLY APPIPHANY TECHNOLOGIES HOLDINGS CORP.)

Notes to the Condensed Consolidated Interim Financial Statements

(Expressed in US dollars)

(unaudited)

5.Convertible Debentures(continued) 

convertible note will bewas accreted over the term of the convertible note up to the face value of $33,000. As at January 31, 2019,2020, the loan was in default, the carrying value of the note was $33,000$53,084 (April 30, 20182019 - $30)$53,084), and the unamortized total discount was $nil (April 30, 20182019 - $32,970)$nil).

(i)On December 26, 2017, the Company issued a convertible debenture, to a non-related party, for proceedsin the amount of $33,000, which was the final tranche of the October 4, 2017 Agreement.agreement. Pursuant to the agreement, the note was issued with an original issue discount and as such the purchase price was $30,000. Under the terms of the debenture, the amount is unsecured, bears interest at 10% per annum, and iswas due on September 26, 2018. The debenture is convertible into common shares of the Company at a conversion price equal to the lesser of the 50% of the lowest trading price of the Company’s common stock of the past ten trading days prior to notice of conversion or the issuance of the note. In the event of default, the conversion price decreases to 40% of the lowest trading price of the Company’s common stock of the ten prior trading days immediately preceding the issuance of the note and the interest rate increases to 20%. During the year ended April 30, 2019, the Company incurred $20,084 in penalties that were added to the principal balance of the note. 

Due to this provision, the embedded conversion option qualifies for derivative accounting under ASC 815-15 “Derivatives and Hedging”. The fair value of the derivative liability resulted in a discount to the note payable of $33,000, of which $3,000 of the discount resulted from debt issuance costs. The carrying value of the convertible note will bewas accreted over the term of the convertible note up to the face value of $33,000. As at January 31, 2019,2020, the loan was in default, the carrying value of the note was $33,000$53,084 (April 30, 20182019 - $17)$53,084), and the unamortized total discount was $nil (April 30, 20182019 - $32,983)$nil). (j) 

(j)On March 15, 2019, the Company issued a convertible debenture, to a non-related party, in the amount of $36,000. Pursuant to the agreement, the note was issued with an original issue discount and as such the purchase price was $30,000. Under the terms of the debenture, the amount is unsecured, bears interest at 10% per annum (20% default interest rate), and is due on December 15, 2019. The debenture is convertible into common shares of the Company at a conversion price equal to the lesser of the 65% of the lowest trading price of the Company’s common stock of the past twenty trading days prior to notice of conversion or the issuance of the note. 

Due to this provision, the embedded conversion option qualifies for derivative accounting under ASC 815-15 “Derivatives and Hedging”. The fair value of the derivative liability resulted in a discount to the note payable of $36,000, of which $6,000 of the discount resulted from debt issuance costs. The carrying value of the convertible note will be accreted over the term of the convertible note up to the face value of $36,000. As at January 31, 2020 the loan was in default, the carrying value of the note was $36,000 (April 30, 2019 - $nil), and the unamortized total discount was $nil (April 30, 2019 - $36,000).

30

(k)On September 12, 2019, the Company issued a convertible debenture, to a non-related party, in the amount of $33,000. Pursuant to the agreement, the note was issued with an original issue discount of $3,000 and as such the purchase price was $30,000. Under the terms of the debenture, the amount is unsecured, bears interest at 10% per annum (20% default interest rate), and is due on June 12, 2020. The debenture is convertible into common shares of the Company at a conversion price $0.078. The Company evaluated the convertible notes for a beneficial conversion feature in accordance with ASC 470-20 “Debt with Conversion and Other Options”. The Company determined that the conversion price was below the closing stock price on the commitment date, and the convertible notes contained a beneficial conversion feature. The Company recognized the intrinsic value of the embedded beneficial conversion feature of $30,462 as additional paid-in capital and reduced the carrying value of the convertible note to $2,538. The carrying value will be accreted over the term of the convertible notes up to their face value of $33,000. 

VERDE BIO HOLDINGS, INC.

(FORMERLY APPIPHANY TECHNOLOGIES HOLDINGS CORP.)

Notes to the Condensed Consolidated Interim Financial Statements

(Expressed in US dollars)

(unaudited)

5.Convertible Debentures(continued) 

As at January 31, 2020, the carrying value of the convertible notes was $9,442 (April 30, 2019 - $nil) and had an unamortized discount of $23,558 (April 30, 2019 - $nil). During the nine months ended January 31, 2020, the Company recorded accretion expense of $6,904 (2019 - $nil).

(l)On November 13, 2019, the Company issued a convertible debenture, to a non-related party, in the amount of $28,193. Pursuant to the agreement, the note was issued with an original issue discount of $2,563 and as such the purchase price was $25,630. Under the terms of the debenture, the amount is unsecured, bears interest at 10% per annum (20% default interest rate), and is due on August 13, 2020. The debenture is convertible into common shares of the Company at a conversion price $0.048. The Company evaluated the convertible notes for a beneficial conversion feature in accordance with ASC 470-20 “Debt with Conversion and Other Options”. The Company determined that the conversion price was below the closing stock price on the commitment date, and the convertible notes contained a beneficial conversion feature. The Company recognized the intrinsic value of the embedded beneficial conversion feature of $18,795 as additional paid-in capital and reduced the carrying value of the convertible note to $9,398. The carrying value will be accreted over the term of the convertible notes up to their face value of $28,193. 

As at January 31, 2020, the carrying value of the convertible notes was $13,176 (April 30, 2019 - $nil) and had an unamortized discount of $15,017 (April 30, 2019 - $nil). During the nine months ended January 31, 2020, the Company recorded accretion expense of $3,778 (2019 - $nil).

(m)On January 14, 2020, the Company issued a convertible debenture, to a non-related party, in the amount of $35,000. Pursuant to the agreement, the note was issued with an original issue discount of $5,000 and as such the purchase price was $30,000. Under the terms of the debenture, the amount is unsecured, bears interest at 10% per annum (20% default interest rate), and is due on October 14, 2020. The debenture is convertible into common shares of the Company at a conversion price $0.06. The Company evaluated the convertible notes for a beneficial conversion feature in accordance with ASC 470-20 “Debt with Conversion and Other Options”. The Company determined that the conversion price was below the closing stock price on the commitment date, and the convertible notes contained a beneficial conversion feature. 

The Company recognized the intrinsic value of the embedded beneficial conversion feature of $23,333 as additional paid-in capital and reduced the carrying value of the convertible note to $11,667. The carrying value will be accreted over the term of the convertible notes up to their face value of $35,000.

As at January 31, 2020, the carrying value of the convertible notes was $12,606 (April 30, 2019 - $nil) and had an unamortized discount of $22,394 (April 30, 2019 - $nil). During the nine months ended January 31, 2020, the Company recorded accretion expense of $939 (2019 - $nil).

(n)On January 23, 2020, the Company issued a convertible debenture, to a non-related party, in the amount of $68,000. Pursuant to the agreement, the note was issued with an original issue discount of $8,000 and as  

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such the purchase price was $60,000. During the nine months ended January 31, 2020, the Company received the first tranche totaling $30,000 and recognized an original issue discount of $4,000. Under the terms of the debenture, the amount is unsecured, bears interest at 10% per annum (20% default interest rate), and is due on October 23, 2020. The debenture is convertible into common shares of the Company at a conversion price $0.048. The Company evaluated the convertible notes for a beneficial conversion feature in accordance with ASC 470-20 “Debt with Conversion and Other Options”. The Company determined that the conversion price was below the closing stock price on the commitment date, and the convertible notes contained a beneficial conversion feature. The Company recognized the intrinsic value of the embedded beneficial conversion feature of $22,667 as additional paid-in capital and reduced the carrying value of the convertible note to $11,767. The carrying value will be accreted over the term of the convertible notes up to their face value of $34,000.

As at January 31, 2020, the carrying value of the convertible notes was $11,768 (April 30, 2019 - $nil) and had an unamortized discount of $22,232 (April 30, 2019 - $nil). During the nine months ended January 31, 2020, the Company recorded accretion expense of $434 (2019 - $nil).

VERDE BIO HOLDINGS, INC.

(FORMERLY APPIPHANY TECHNOLOGIES HOLDINGS CORP.)

Notes to the Condensed Consolidated Interim Financial Statements

(Expressed in US dollars)

(unaudited)

6.Derivative Liability   

The Company records the fair value of the of the conversion price of the convertible debentures disclosed in Note 5 in accordance with ASC 815,Derivatives and Hedging. The fair value of the derivative was calculated using a Binomial model. The fair value of the derivative liability is revalued on each balance sheet date with corresponding gains and losses recorded in the consolidated statement of operations. During the nine months ended January 31, 2019,2020, the Company recorded a gainloss on the change in fair value of derivative liability of $330,888 (2017$460,346 (January 31, 2019 – lossgain of $138,455)$330,888). As at January 31, 2019,2020, the Company recorded a derivative liability of $555,044$1,287,942 (April 30, 20182019 - $928,252)$1,080,589).

A summary of the activity of the derivative liability is shown below:

7.Convertible Preferred Series B Stock Liability

On June 13, 2019, the Company designated 1,000,000 shares of preferred stock as Series B. The holders of Series B preferred shares are not entitled to receive dividends except as may be declared by the Board at its sole and absolute discretion. Each Series B preferred share is convertible into common shares according to the following formula: the Stated Value of $1.10 per share of Series B preferred stock divided by the closing price of the Common Stock on the day prior to the conversion. Holders of Series B preferred stock shall not have voting rights.

On June 17, 2019, the Company issued 530,000 shares of Series B preferred stock, at a value of $583,000 based on the stated value of $1.10 per share, in exchange for the settlement of accounts payable of $266,523, notes payable of $990, accrued interest of $535, management fees of $33,000. The transaction resulted in a loss on settlement of debt of $281,952.  Because the Series B shares represent an unconditional obligation that the Company must or may settle in a variable number of its equity shares and the monetary value of the obligation is

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predominantly based on a fixed monetary amount ($1.10 worth of common stock), the 530,000 shares with a balance of $583,000 is recorded as a liability on the balance sheet. 

8.Common Shares  

During the nine months ended January 31, 2019,2020, the Company issued an aggregate of 44,559,139673,423 common shares with a fair value of $54,716$291,647 upon the conversion of $14,765$6,496 of convertible debentures, $4,130$252,993 of derivative liabilities, $20,490 of accrued interest, $2,500and $3,000 in conversion fees and $42,320 of derivative liabilities resulting in a gainloss on settlement of debt of $8,977.$8,668.  The remaining loss settlement of debt relates to the issuance of the Series B preferred stock.  See Note 7.

On November 17, 2017, the Company effected a reverse stock split on a basis of 1 new common share for every 100 old common shares. Additionally, on February 14, 2020, the Company effected a reverse stock split on a basis of 1 new common share for every 100 old common shares. The impact of these reverse stock splits has been applied on a retroactive basis.

VERDE BIO HOLDINGS, INC.

(FORMERLY APPIPHANY TECHNOLOGIES HOLDINGS CORP.)

Notes to the Condensed Consolidated Interim Financial Statements

(Expressed in US dollars)

(unaudited)

8.9.Preferred Shares  

Authorized: 10,000,000 preferred shares with a par value of $0.001 per share

Convertible Preferred Series A stock

On April 18, 2017, the Company designated 500,000 shares of preferred stock as Series A. The holders of Series A preferred shares are entitled to receive dividends equal to the amount of the dividend or distribution per share of common stock payable multiplied by the number of shares of common stock the shares of Series A preferred shares held by such holder are convertible into. Each Series A preferred shares is convertible intoat a factor of 10,000 Series A shares for one common share.  Each holder of Series A preferred shares is entitled to cast 10,000 votes for every one Series A preferred share held.

9.Commitments

On August 26, 2016, the Company entered in consulting agreements with five consultants. Pursuant to the agreements, each consultant is to be compensated by the following:

i)10% commission on all net revenues derived by the Company through the consultant in the first year; 

ii)5% commission on all net revenues derived by the Company through the consultant in years two and three; 

iii)1,800 common shares payable on the date of the agreement; 

iv)1,800 common shares payable on February 26, 2016; 

v)1,800 common shares payable on August 26, 2017; and 

vi)1,800 common shares payable on February 26, 2018. 

Either party may terminate the agreement by providing written thirty days’ notice.

As at January 31, 2019, no commission has been earned, paid, or accrued.  Convertible Preferred Series B stock – see Note 7.

10.Subsequent EventsCommitments and Contingencies 

(a)On February 19, 2019, the former Chief Executive Officer and Director of the Company entered into a Stock Purchase Agreement to sell his Series A Preferred Stock, the closing of which is pending certain closing conditions, including, but not limited to the Company getting current with its SEC filings and restricting some of its outstanding debt. This transaction was completed on November 22, 2019.

(b)11.Subsequent Events

On February 1, 2020, the Company signed a consulting services agreement with an unrelated party to January 31, 2019,be paid in 500,000 shares of common stock and $5,000 per month for the duration of the contract. This agreement has been terminated, however, the Company anticipates issuing the 500,000 shares in the future.

On February 5, 2020, the Company signed a joint venture agreement for a 25% share in the Hemp seed and genetics industry. The Company has committed to contribute $300,000 to the joint venture on a to be mutually agreed upon schedule. Additionally, the Company will issue 1,500,000 common shares to the other members of the joint venture as compensation for their initial contributions. On May 11, 2020, the agreement was terminated with no shares issued or contributions made.

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On March 25, 2020, the Company issued 58,645,227a convertible promissory note to an unrelated party for $13,000. Pursuant to the agreement, the note was issued with a 10% original issue discount and with $2,000 being withheld by the Holder to offset transaction costs. As such the purchase price was $9,700. The note is convertible into common stock of the Company at $0.018, which equals 60% multiplied by the lowest Trading Price for the Common Stock on the Trading Day preceding the execution of the note. The promissory note shall bear interest at 10% per annum and is due on December 25, 2020.

On May 1, 2020, the Company signed a consulting services agreement with an unrelated party to be paid in 2,000,000 shares of common stock upon the conversionexecution of $6,496the agreement and $5,000 per month for the duration of convertible debentures, $18,381 of accrued interest, and $2,500 of conversion fee penalties.   the contract beginning July 31, 2021.  These shares have not yet been issued.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF OPERATION

FORWARD-LOOKING STATEMENTS

This Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) contains forward-looking statements that involve known and unknown risks, significant uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed, or implied, by those forward-looking statements.  You can identify forward-looking statements by the use of the words may, will, should, could, expects, plans, anticipates, believes, estimates, predicts, intends, potential, proposed, or continue or the negative of those terms.  These statements are only predictions. In evaluating these statements, you should consider various factors which may cause our actual results to differ materially from any forward-looking statements.  Although we believe that the exceptions reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.  Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements.  We undertake no obligation to revise or update publicly any forward-looking statements for any reason.

RESULTS OF OPERATIONS

Working Capital

Cash Flows

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Operating Revenues

ForDuring the three and nine months ended January 31, 2020 and 2019, the Company earnedrecorded revenues of $nil compared with $13,950 during the three months ended January 31, 2018$0 and $41,850 during the nine months ended January 31, 2018 from the sale of online fraud protection services.  The Company had gross profit of $5,326 for the three months ended January 31, 2018 and $18,529 for the nine months ended January 31, 2019.  The decrease in gross profit was due to the fact that the Company did not have any revenue sales during the current year.$0, respectively.

Operating Expenses and Net Income (Loss)Loss

Three months ended January 31, 2019 and 2018

For the three months ended January 31, 2019, the Company incurred operating expenses of ($1,734) compared to $98,097 during the three months ended January 31, 2018.  The decrease in operating expenses was due to the fact that the Company decreased its level of operating activity during the current period as it contemplated further financing and restructuring of its current operations.  As such, there were significant declines in consulting fees, professional fees, and management fees, as well as a decrease in general and administration fees. The recovery of expenses was due to a gain on foreign exchange.

During the three months ended January 31, 2019,2020, the Company recorded a netoperating expenses of $52,766 compared to operating expenses of ($1,734) for the three months ended January 31, 2019.  The increase in operating expenses is due to an increase in general and administrative fees of $37,655, an increase in professional fees of $11,815 and an increase in management fees of $5,030.  

Net loss of $81,023for the three months ended January 31, 2020 was $376,746 compared to a net loss of $197,831$81,023 during the three months ended January 31, 2018.2019.  In addition to operating expenses, the Company recorded interest expense of $15,699 and a loss on the change in the fair value of the derivative liability of $67,058.  During the periodthree months ended January 31, 2018,2020, the Company recordedincurred a loss on the change in fair value of derivative liability of $81,473$238,751 and interest expense of $23,587.$84,731 relating to interest on outstanding convertible notes.  Comparatively, the Company incurred a loss of $67,058 on the change in fair value of the derivative liability and interest expense of $15,699 for the three months ended January 31, 2019.   

During the nine months ended January 31, 2020, the Company recorded operating expenses of $131,825 compared with $25,357 for the nine months ended January 31, 2019. The increase in operating expenses of $106,468 reflected an increase in management fees of $38,030, an increase in professional fees of $51,687 and an increase in general and administrative fees of $31,990, partially offset by a decrease in the payment of consulting fees of $8,619, and an decrease in bad debt of $6,620. The increases in professional expenses is primarily associated with bringing the Company current in its filings.  

Net loss for the nine months ended January 31, 2020 was $1,023,870 as compared with net income of $122,517 during the nine months ended January 31, 2019.  In addition to the increase in operating expenses, the Company recorded a $460,346 loss on the change in fair value of derivative liability, is due to lower volatility$141,079 in the Company’s share priceinterest, and also due to conversion of outstanding balances that resulted in a lower base of outstanding convertible notes.  The decrease in the interest expense is due to conversions of outstanding notes that resulted in a lower face valueloss on settlement of debt during the current period compared to the prior period.  

The Company recorded loss per share of $0.00 on both a basic and diluted basis during the three months ended January 31, 2019 compared to basic and diluted loss per share of $0.01 during the three months ended January 31, 2018.

Nine months ended January 31, 2019 and 2018

For the nine months ended January 31, 2019, the Company incurred operating expenses of $25,357 compared to $387,584 during the nine months ended January 31, 2018.  The decrease in operating expenses was due to the fact that the Company decreased its level of operating activity during the current period as it contemplated further financing and restructuring of its current operations.  As such, there were significant declines in consulting fees, professional fees, and management fees, as well as a decrease in general and administration fees.  

$290,620.  During the nine months ended January 31, 2019, the Company recorded a net income of $122,517 compared to a net loss of $662,580 during the nine months ended January 31, 2018.  In addition to operating expenses, the Company recorded interest expense of $191,991 which was offset by a$330,888 gain on the change in the fair value of the derivative liability of $330,888, and gain on settlement of debt of $8,977 relating to the conversion of outstanding convertible notes with the issuance of common shares.  During the period ended January 31, 2018, the Company recorded a loss on the change in fair value of derivative liability, $191,991 of $138,455 and interest expense and $8,977 gain on settlement of $155,070.debt.  The variance on the gain (loss) on the change in fair value of derivative liability is due to lower volatilityincrease in the Company’s share price innet loss during the current year comparedwas due largely to prior year, which resultedan increase in a decreaseoperating expenses, the issuance of Series B Preferred Stock to the Company’s in exchange for $33,000 in management fees, the loss of fair value on derivative liability balance and to a corresponding gain forlarger loss with regards to the change in the fair valueloss on extinguishment of the derivative liability.  The increase in the interest expense is due to the accrualdebt of default interest and penalties on the outstanding convertible notes that were defaulted during the current year.$299,597.  

The Company recorded a net loss per share of $0.00 on both a basic and diluted basis duringFor the nine months ended January 31 2019 compared to basic and diluted2020, the Company recorded a loss per share of $0.07 during$0.72 as compared with net income per share basic of $0.12 per share and net loss per share dilutive of $0.00 per share for the nine months ended January 31, 2018.

2019.

Liquidity and Capital Resources

As atof January 31, 2019,2020, the Company had cash andCompany's total assets of $3,177asset balance was, $56,329, compared to cash$23,752 as of $10,129 and total assets of $23,799 at April 30, 2018.2019. The decreaseincrease in cash and total assets was due to an increase in cash in the fact that the Company did not receive any proceeds from operations or funding from investing or financing activities during the current period to support operating expenditures.  Furthermore, the Company recognized the period expenses relating to the prepaid common shares issued to five consultants in fiscal 2017 and recorded a lossamount of $5,051 for the non-collection of outstanding accounts receivable. $32,577.

As atof January 31, 2019,2020, the Company had total liabilities of $1,350,2802,700,002 compared to $1,548,135with total liabilities of $2,030,459 as at April 30, 2018.2019. The decreaseincrease in total liabilities iswas due to a decrease in accounts payable of $196,346 and an increase of convertible debt of $76,495, an increase in derivative liability of $373,208 offset by an increase in convertible debenture$207,353, and preferred stock liability of $138,666 (due to accretion of debt discount), and $36,687 in accounts payable and accrued liabilities as the Company did not have sufficient cash flow to pay outstanding obligations as they became due.$583,000.

As atof January 31, 2019,2020, the Company had a working capital deficit of $1,347,103$2,643,673 compared with a working capital deficit$2,006,707 as of $1,524,336 as at April 30, 2018.2019.  The decreasechange in working capital deficit was due to a decrease in total liabilitiesprimarily due to the decrease in derivative liability.added preferred stock liability of $583,000.  

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Cash Flow from Operating Activities

During the nine months ended January 31, 2019,2020, the Company used $83,053 of cash for operating activities compared with $6,952 of cash for operating activities as compared to $212,880 during the nine months ended January 31 2018.2019. The decreaseincrease in the use of cash used for operating activities was due to a decrease in the fact thatamortization of discount on convertible debt payable, the Company had minimal operations duringissuance of preferred shares for management fee, a decrease in the current periodloss on change in fair value of derivative liability, default and had limited cash balances which limited the amount of cash used for operating activities.  conversion fees, original issue discount and prepaid expenses offset by an increase in interest and penalties accrued on convertible debt.

Cash Flow from Investing Activities

During the periodsnine months ended January 31, 20192020 and 2018,2019, the Company did not have any investing activities.

Cash Flow from Financing Activities

During the periodnine months ended January 31, 2019, the Company did not have any financing activities.  During the period ended January 31, 2018,2020, the Company received $218,000$115,630 of net cash from financing activities which wasconsisting of $115,630 from the issuance of convertible debentures.debentures compared to $0 received during the nine months ended January 31, 2019.

Going Concern

We have not attained profitable operations and are dependent upon obtaining financing to pursue any extensive acquisitions and activities. For these reasons, our auditors stated in their report on our audited financial statements that they haveAt January 31, 2020, the Company has not recognized significant revenue, has a working capital deficit of $2,643,673, and has an accumulated deficit of $6,970,208. These factors raise substantial doubt that we will be ableregarding the Company’s ability to continue as a going concern  without further financing. The unaudited financial statements included in this report on Form 10-Q does not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

Off-Balance Sheet Arrangements

We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders.

Future Financings

We will continue to rely on equity sales of our Common Shares in order to continue to fund our business operations.  Issuances of additional shares will result in dilution to existing stockholders.  There is no assurance that we will achieve any additional sales of the equity securities or arrange for debt or other financing to fund our operationsplanned acquisitions and otherexploration activities.

Off-Balance Sheet Arrangements

We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders.

Critical Accounting Policies

Our financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis.  The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.

We regularly evaluate the accounting policies and estimates that we use to prepare our financial statements. A complete summary of these policies is included in the notes to our financial statements.  In general, management's estimates are based on historical experience, on information from third party professionals, and on various other assumptions that are believed to be reasonable under the facts and circumstances.  Actual results could differ from those estimates made by management.

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Recently Issued Accounting Pronouncements

In February 2016, Topic 842, Leases was issued to replace the leases requirements in Topic 840, Leases. The main difference between previous GAAP and Topic 842 is the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous GAAP. A lessee should recognize in the balance sheet a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. If a lessee makes this election, it should recognize lease expense for such leases generally on a straight-line basis over the lease term. The accounting applied by a lessor is largely unchanged from that applied under previous GAAP. Topic 842 will be effective for annual reporting periods beginning after December 15, 2018, including interim periods within those annual periods and is to be retrospectively applied. Earlier application is permitted. The adoption of this standard is not expected to have a material impact on the Company´s consolidated financial statements.  

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers. The new standard provides a five-step approach to be applied to all contracts with customers and also requires expanded disclosures about revenue recognition. The ASU is effective for annual reporting periods beginning after December 15, 2017, including interim periods and is to be retrospectively applied. The adoption of this standard did not have a material impact on the Company´s consolidated financial statements. 

The Company has implemented all new accounting pronouncements that are in effect.  These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 4.  CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

DisclosureWe maintain disclosure controls and procedures, are controls and proceduresas defined in Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934 (the "Exchange Act"), that are designed to ensure that information required to be disclosed by us in ourthe reports filedthat we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC'sSecurities and Exchange Commission's rules and forms.  Disclosure controlsforms and procedures include, without limitation, controls and procedures designed to ensure that such information required to be disclosed by our company in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management, including its principal executiveour Chief Executive Officer and principal financial officers, or persons performing similar functions,Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. Our management

We carried out an evaluation, under the supervision and with the participation of our Principalmanagement, including our Chief Executive Officer and PrincipalChief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rules 13a-15(e)as of January 31, 2020. Based on the evaluation of these disclosure controls and 15d-15(e) underprocedures, and in light of the Securities Exchange Act of 1934 ("Exchange Act").  Based upon that

evaluation,material weaknesses found in our Principalinternal controls over financial reporting, our Chief Executive Officer and Principal Financial Officer have concluded that our disclosure controls and procedures were not effective as of January 31, 2019, due tofor the material weaknesses resulting from the Board of Directors not currently having any independent members and no director qualifies as an audit committee financial expert as defined in Item 407(d)(5)(ii) of Regulation S-K, and controls were not designed and in place to ensure that all disclosures required were originally addressedreasons discussed in our financial statements.  Please refer to our Annual Report on Formannual 10-K as filed with the SEC on August 2, 2019, for a complete discussion relating to the foregoing evaluation of Disclosures and Procedures.filing.

Changes in Internal Control over Financial Reporting

Our managementThere has also evaluatedbeen no change in our internal control over financial reporting and there have been no significant changesidentified in connection with our evaluation we conducted of the effectiveness of our internal controlscontrol over financial reporting as of January 31 2020, that occurred during our fourth fiscal quarter that has materially affected, or in other factors that could significantlyis reasonably likely to materially affect, those controls subsequent to the date of our last evaluation.

The Company is not required by current SEC rules to include, and does not include, an auditor's attestation report. The Company's registered public accounting firm has not attested to Management's reports on the Company's internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS.

We know of no material, existing or pending legal proceedings against our company,Company, nor are we involved as a plaintiff in any material proceeding or pending litigation.  There are no proceedings in which our director, officer or any affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.

ITEM 1A. RISK FACTORS.

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

1.Quarterly Issuances:   

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Other than as previously disclosed in the above Notes to the Condensed Consolidated Financial Statements, we did not issue any unregistered securities during the quarter.

2.Subsequent Issuances:   

Other than as previously disclosed in the above Notes to the Condensed Consolidated Financial Statements, we did not issue any unregistered securities subsequent to the quarter.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4.  MINE SAFETY DISCLOSURES.

Not Applicable.

ITEM 5.  OTHER INFORMATION.

None.

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ITEM 6.  EXHIBITS

*Pursuant to Regulation S-T, this interactive data file is deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections.

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SIGNATURES

In accordance withPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrantCompany caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

In accordance withPursuant to the requirement of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Company and in the capacities and on the dates indicated.indicated:

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