NOTE 8 – INVESTMENTS IN UNCOLSOLIDATED ENTITIES

At April 30, 2020 and 2019, investments in consolidated entities is $20,000 and $207,500, respectively. The Company has made from time to time investments in unconsolidated entities, including in entities engaged in developing, marketing and selling certain technology, media and travel products; online marketing and direct sales software systems; technology-based medical cards; and consumer insurance products. The Company does not, directly or indirectly, hold a controlling financial interest in any of these investees, as the phrase “controlling financial interest” is defined in GAAP. Thus, the Company does not report these investees on a consolidated basis. In addition, the Company does not exert influence over the operations or policies of the investees. For example, the Company’s officers, directors, and management are not involved in the operations or policies of the investees. Accordingly, the Company accounts for its investment in these investees on the cost basis.

In the fiscal year ended April 30, 2019, the Company recognized an impairment loss of $1.5 million in connection with its investments in 212 Technologies, an impairment loss of $1.25 million in connection with its investments in 561 LLC; an impairment loss of $1.25 million in connection with its investments in America Approved Commercial; an impairment loss of $250,000 in connection with its investments in Medical Smart Care LLC and an impairment loss of $187,500 in connection with its investments in LEH Insurance Group LLC as a result of a less than temporary decline in the value of the Company’s investments in these entities. In addition, in the fiscal year ended April 30, 2020, the Company recognized an impairment loss of $187,500 in connection with its investments in LEH Insurance Group LLC as a result of a less than temporary decline in the value of the Company’s investment. The Company’s impairment decisions were based on a number of economic and other factors common to these investees. These factors included, with respect to all investees named above, (a) failure by the investee to generate sustainable earnings and cash flows within a reasonable time after commencing operations, (b) failure by the investee to provide timely and accurate financial statements to the Company, and (c) failure by the investee to comply with certain covenants contained in the investment agreements. In addition, 561 LLC had never generated sales revenue and 212 Technology had been unable to bring to market commercially acceptable products. Based on these factors, we believe there is significant uncertainty about the ability of these investees to continue to operate as a going concern and, accordingly, about the ability of the Company to recover the Company’s investment in the foreseeable future.

Please see Note 17 – “Commitments and Contingencies” below for contingencies and other matters associated with the Company’s investments in unconsolidated entities.