The following discussion of our plan of operation, financial condition and results of operations should be read in conjunction with the Company's condensed consolidated financial statements, and notes thereto, included elsewhere herein. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors including, but not limited to, those discussed in this Annual Report.
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CRITICAL ACCOUNTING POLICIES AND ESTIMATES
The
The discussion and analysis of our financial condition and results of operations
is based upon our financial statements that have been prepared in accordance
with accounting principles generally accepted in
We cannot predict what future laws and regulations might be passed that could have a material effect on our results of operations. We assess the impact of significant changes in laws and regulations on a regular basis and update the assumptions and estimates used to prepare our financial statements when we deem it necessary.
Principles of Consolidation:
The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries (ANV and Sharx), after elimination of all intercompany accounts, transactions, and profits.
Basis of Presentation:
The consolidated financial statements of the Company have been prepared in
accordance with
Revenue Recognition
Revenue from Contracts with Customers
For our rental revenue and commission revenue, we recognize revenue under the five steps in Topic 606, which are as follows: 1) identify the contract with the customer; 2) identify the performance obligations in the contract; 3) determine the transaction price; 4) allocate the transaction price to the performance obligations; and 5) recognize revenue when (or as) performance obligations are satisfied.
Rental Revenue
Rental revenue is derived from the Commercial Property lease in which quarterly
payments are received pursuant to the property lease which is in effect until
2026. We recognize revenue when we have satisfied a performance obligation by
transferring control over a product or delivering a service to a client. We
measure revenue based upon the consideration set forth in an arrangement or
contract with a client. We recognize revenue from these services when the
services are completed. If we are paid in advance for these services, we record
such payment as a contract liability until we complete the services. As of
The Company leases land to a customer. We, as a lessor, retain substantially all of the risks and benefits of ownership of the investment properties and account for our leases as operating leases. We accrue fixed lease income on a straight-line basis over the terms of the leases when we believe substantially all lease income, including the related straight-line rent receivable, is probable of collection. For our leases, we receive a fixed payment from the customer which is recognized as lease income on a straight-line basis over the term of the lease beginning with the adoption of ASC 842.
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In
The Company has elected to exclude short-term leases from the recognition requirements of ASC 842. A lease is short-term if, at the commencement date, it has a term of less than or equal to one year. Lease expense related to short-term leases is recognized on a straight-line basis over the lease term.
Commission revenue
For our commission revenue, we recognize revenue under the five steps in Topic 606, which are as follows: 1) identify the contract with the customer; 2) identify the performance obligations in the contract; 3) determine the transaction price; 4) allocate the transaction price to the performance obligations; and 5) recognize revenue when (or as) performance obligations are satisfied.
The Company's source of commission revenue is from the Company's subsidiary Sharx in which quarterly payments are received when the customer pre-pays or pays upon the date products are drop shipped from the manufacturer pursuant to a non-exclusive distribution agreement. At such time the products are drop shipped, the Company's performance obligation has been satisfied and revenue is recorded The Company has determined that it is an agent of the manufacturer and collects commission revenue at or before the delivery of product (See Note 3 for further details).
Property and Equipment:
Land is recognized at cost. Land is carried at cost less accumulated impairment losses.
Foreign Currency Translation:
Foreign currency transactions are translated applying the current rate method. Assets and liabilities are translated at current rates. Stockholders' equity accounts are translated at the appropriate historical rates and revenue and expenses are translated at weighted average rates for the year.
Foreign Currency Transactions:
The Company applies the guidelines as set out in Section 830-20-35 of the FASB
Accounting Standards Codification ("Section 830-20-35") for foreign currency
transactions. Pursuant to Section 830-20-35 of the FASB Accounting Standards
Codification, foreign currency transactions are transactions denominated in
currencies other than
The Company's wholly owned subsidiary ANV uses the Danish Krone, DKK as its reporting currency as well as its functional currency.
The wholly owned subsidiary
14 Table of Contents Income Taxes:
The Company accounts for income taxes under the asset and liability method of accounting. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is required when it is less likely than not that the Company will be able to realize all or a portion of its deferred tax assets. Because it is doubtful that the net operating losses of recent years will ever be used, a valuation allowance has been recognized equal to the tax benefit of net operating losses generated.
Earnings per Share:
Basic earnings per share is computed by dividing income available to common
shareholders by the weighted-average number of common shares available. Diluted
earnings per share is computed similar to basic earnings per share except that
the denominator is increased to include the number of additional common shares
that would have been outstanding if the potential common shares had been issued
and if the additional common shares were dilutive. As of
Cash and Cash Equivalents:
For purposes of the statement of cash flows, the Company considers all highly-liquid investments purchased with original maturities of three months or less to be cash equivalents.
The Company maintains its cash in bank deposit accounts which, at
Stock-Based Compensation:
The Company records stock-based compensation in accordance with ASC 718, Compensation. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. Equity instruments issued to employees and the cost of the services received as consideration are measured and recognized based on the grant date fair value of the equity instruments issued and are recognized over the employees required service period, which is generally the vesting period.
Concentrations of Credit Risk:
Financial instruments that potentially subject the Company to major credit risk
consist principally of a single subsidiary of
New Accounting Pronouncements already adopted:
In
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New Accounting Pronouncements Not Yet Adopted
Other recent accounting pronouncements issued by the FASB did not or are not believed by management to have a material impact on the Company's present or future financial statements.
RESULTS OF OPERATIONS OF FISCAL YEAR 2022 COMPARED TO FISCAL YEAR 2021
REVENUES. Revenues from operations were
Year ending June 30, 2022 2021 Subsidiary ANV Lease Revenues$ 39,515 $ 41,421 Subsidiary Sharx commissions from the sales of cargo security products - - Total$ 39,515 $ 41,421
GENERAL AND ADMINISTRATIVE EXPENSES. G&A expenses were
PROFESSIONAL EXPENSES. The professional expenses were
OTHER INCOME. Other income was
NET INCOME. Net income attributed to common stockholders was
LIQUIDITY AND CAPITAL RESOURCES. As of
Net cash provided by operating activities for 2022 and 2021 was
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Net cash (used for) investing activities for 2022 and 2021 was
Net cash (used for) financing activities for 2022 and 2021 was (
OFF BALANCE SHEET ARRANGEMENTS
We do not have any off-balance sheet arrangements.
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