This quarterly report on Form 10-Q includes "forward-looking statements" as
defined by the Securities and Exchange Commission. These statements may involve
known and unknown risks, uncertainties and other factors which may cause actual
results, performance or achievements to be materially different from future
results, performance or achievements expressed or implied by any forward-looking
statements. Forward-looking statements, which involve assumptions and describe
future plans, strategies and expectations, are generally identifiable by use of
the words "may," "will," "could", "should," "expect," "anticipate," "estimate,"
"believe," "intend" or "project" or the negative of these words or other
variations on these words or comparable terminology. These forward-looking
statements are based on assumptions that may be incorrect. Actual results could
differ materially from those expressed or implied by the forward-looking
statements as a result of various factors. The company undertakes no obligation
to update publicly any forward-looking statements for any reason, even if new
information becomes available or other events occur in the future.
The following discussion should be read in conjunction with the accompanying
unaudited condensed financial statements for the three months ended September
30, 2020 and the Form 10-K for the fiscal year ended June 30, 2020
OVERVIEW
The Company's inflight connectivity technology is targeted at two distinct
markets. BizjetMobile and Chiimp are designed for business jets and has been
sold in North America, Europe and the Middle East. The Company's fflya system is
designed for, and marketed to, low-cost airlines in Europe and Asia.
RESULTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 2020 COMPARED TO THREE MONTHS ENDED SEPTEMBER
30, 2019
In the three months period ended September 30, 2020, the Company recorded
revenue of $16,032, compared to revenue of $15,010 in the corresponding
three-month period ended September 30, 2019, as a result of lower Chiimp service
fees and system sales.
The Company continued investing in the development and marketing of the airline
versions of its fflya and CrewX technology. As a result, the product is now in
production and has received favourable responses from potential airline
customers and strategic partners. In addition, the airline product will be used
to upgrade the business jet offering which is expected to open new marketing
opportunities for the Company. The Company incurred operating costs of $284,331
in the three months ended September 30, 2020 and $195,461 in the three months
ended September 30, 2019. Main components are engineering and marketing
expenses. In the three months ended September 30, 2020, the Company recorded an
Operating Loss of $268,299 compared to an Operating Loss of $180,451 in the
three months ended September 30, 2019.
The development and marketing costs have been funded in part through interest
bearing convertible notes. As a result, the Company's Other Expenses, included
interest of $41,862 and $36,770 in the three months ended September 30, 2020 and
2019 respectively. This resulted in Net Losses of $310,161 and $213,937 in the
three months ended September 30, 2020 and 2019 respectively.
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary sources of liquidity are cash received from issue of
common stock and accounts payable for expenses incurred with related parties.
Without the continuation of these sources of funding, as stated in Note 2 above,
the Company's ability to continue as a going concern is in substantial doubt.
This will continue until the company is able to generate sufficient cash flow
from its operations.
The cash and cash equivalents balance was $66,201 at September 30, 2020 and
$8,958 at June 30, 2020.
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The Company reported revenue of $16,032 in the three months ended September 30,
2020 compared to $15,010 in the three month period ended September 30, 2019. The
Company incurred a loss of $268,299 from operating activities for the three
months to September 30, 2020, compared to a loss of $180,451 from operating
activities for the three months to September 30, 2019. Net cash used in
operating activities for the three months ended September 30, 2020 was $110,148
compared to $80,406 during the three months ended September 30, 2019. Operating
cash requirement in the three months ended September 30, 2020 was reduced mainly
through increased accounts payable and issuance of stock for marketing.
The cash flow of the Company from financing activities for the three months
ended September 30, 2020 was $167,391 as a result of funds received pending
issue of common stock and proceeds from issuance of common stock. In the three
months ended September 30, 2019, the cash flow from financing activities was
$80,580 mainly from funds received pending issue of common stock.
The Company may raise additional capital by the sale of its equity securities,
through an offering of debt securities, or from borrowing from a financial
institution or other funding sources. The Company does not have a policy on the
amount of borrowing or debt that the Company can incur. There are no guarantees
on the company's ability to raise additional capital and hence its ability to
continue as a going concern.
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