Capitalization

The Company's financial statements are prepared using generally accepted accounting principles in the United States (“GAAP”) applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. As of April 30, 2014, the Company has an accumulated deficit of $68,700,127 and incurred a net loss for year ended April 30, 2014 of $27,254,020.

Over the past year, funding was provided by management and investors to maintain and expand the Company and acquire Bio Blue Bird. As of April 30, 2014, new investors enabled the completion of the acquisition of Bio Blue Bird which provided the Company the ability to begin preparations toward further clinical trials in patients with advanced, inoperable pancreatic cancer. The remaining challenges, beyond the regulatory and clinical aspects, include accessing funding for the Company to cover its future cash flow needs. The Company continues to acquire additional funds through management's efforts.

The Company requires substantial additional capital to finance its planned business operations and expects to incur operating losses in future periods due to the expenses related to the Company’s core businesses. The Company has not realized material revenue since it commenced doing business in the biotechnology sector, and it is not without doubt that it will be successful in generating revenues in the future in this sector. The Company believes that cash and cash equivalents as of April 30, 2014 are sufficient to fund their operations through the end of 2015.

If the Company is not able to raise substantial additional capital in a timely manner, the Company may not be able to complete its required clinical trials and may be forced to cease operations.

The Company will continue to be dependent on outside capital to fund its research and operating expenditures for the foreseeable future. If the Company fails to generate positive cash flows or fails to obtain additional capital when required, the Company may need to modify, delay or abandon some or all of its business plans.

Management Goals and Strategy

The Company has been working closely with the SG Austria to advance the Cell-in-a-Box^® technology. The majority of funding over the past year has been provided to SG Austria and Austrianova Singapore and its personnel to ensure their functionality and maintain their ability to accomplish numerous goals of the Company. After substantial effort, the principals of Nuvilex and SG Austria succeeded on creating mechanisms to advance the Company’s interest in the platform technology of Cell-in-a-Box^® our companies regardless of the present economic conditions and challenges. Austrianova Singapore will be manufacturing the encapsulated live cells for the Company’s use in the area of pancreatic cancer and diabetes clinical trials.

The Company's strategy is to build upon and advance the success of the previous Phase 1/2 pancreatic cancer clinical trials. The acquisition of Bio Blue Bird was the first step in this strategy. This acquisition enabled the Company to advance itself as a biotechnology company. Management believes the Company is positioned to move forward and become a significant biotech company predicated upon its platform technology, Cell-in-a-Box^®. Management is committed to becoming an industry-leading biotechnology company in the treatment of cancer and diabetes.

The Company will seek to raise capital to fund growth opportunities and provide for its working capital needs as the strategy of the Company is executed. The Company's efforts to achieve financial stability and to enable it to carry out the strategy of the Company consists of the following:

In August 2013, the Company restructured corporate operations in an effort to focus on its biotechnology core businesses. The restructuring was precipitated by the Third Addendum to the SG Austria APA and the Company’s acquisition of Bio Blue Bird. The Company restructured itself and created three new segments, two of which are biotechnology segments. The first of these houses the cellulose-based live-cell encapsulation technology and all of its associated licenses in the Company. The second, Medical Marijuana Sciences, Inc. (“MMS”), focuses on ways to exploit the benefits of the Cell-in-a-Box^® technology in optimizing the anticancer effectiveness of cannabinoids against cancers while minimizing or outright eliminating the debilitating side effects usually associated with cancer treatments. The third segment consists of the Company’s nutraceutical formulations and their associated product names and information technology. The plan for this segment is to sell all of its assets to one or more third parties.