Auto Parts 4Less Group Inc (FLES)

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NOTE 2 – GOING CONCERN AND FINANCIAL POSITION


The consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has incurred cumulative losses through July 31, 2019 of $19,255,805 and has a working capital deficit at July 31, 2019 of $5,758,110. As of July 31, 2019, the Company only had cash and cash equivalents of $53,141 and had short-term debt in default. The short-term debt agreements provide legal remedies for satisfaction of defaults, none of the lenders to this point have pursued their legal remedies. These conditions raise substantial doubt about the Company’s ability to continue as a going concern for a period of one year from the date that the financial statements were issued.

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The potential proceeds from the sale of common stock and other contemplated debt and equity financing, and increases in operating revenues from new development and business acquisitions might enable the Company to continue as a going concern. However, revenues have not been sufficient to cover operating costs that would permit the Company to continue as a going concern historically and there can be no assurance that the Company can or will be able to complete any debt or equity financing, or develop or acquire one or more business interests under favorable terms. The Company plans to grow revenues through the funding provided by investors through the issuance of debt and equity as well as strategic leveraging of its online brands. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.