"Management believes that despite our material weaknesses set forth above, our financial statements for the quarter ended October 31, 2019, are fairly stated, in all material respects, in accordance with U.S. GAAP."

By this, do you mean to imply that lawsuits are not material for accounting purposes when known to exist?  I don't know, because I neither practice law nor accounting.   

Your other postings following this one are also outside my training and experience for a knowledgable reply, but you are very self-assuredly asserting that you know better.  Thank you, that says a lot.