Capitalization

The Company's consolidated financial statements are prepared using generally accepted accounting principles in the United States of America (“U.S. 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, 2015, the Company has an accumulated deficit of $78,627,833 and incurred a net loss for year ended April 30, 2015 of $9,927,706.

Over the past year, funding was provided by investors to maintain and expand the Company. 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 funds through the Company’s S-3 Registration Statement pursuant to which its exclusive placement agent, Chardan Capital Markets, LLC (“Chardan” sells shares of common stock “at-the-market” which is structured to provide up to $50 million dollars to the Company less certain commissions.

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 as of April 30, 2015 and the proceeds from the additional sale of registered shares will raise sufficient capital to meet its capital requirements. From May 1, 2015 through July 13, 2015; the Company raised additional capital of approximately $1,220,000 in “at-the-market” transactions. The Company believes that the “at-the-market” sale of its shares will provide sufficient capital to fund its operations through July 31, 2016.

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’s goal is to have the Company become an industry-leading biotechnology company using the Cell-in-a-Box^® live cell encapsulation technology as a platform upon which treatments for cancer and diabetes can be built.

The Company’s initial strategy is to build upon and advance the success of previous Phase 1/2 and Phase 2 pancreatic cancer clinical trials. The Company’s acquisition of Bio Blue Bird was the first step in this strategy.

The Company will seek to raise capital to fund growth opportunities and provide for its working capital needs as its strategy is executed. The Company’s strategy to achieve its goals consists of the following: