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
financial statements for the three and nine months ended March 31, 2019 and the
Form 10-K for the fiscal year ended June 30, 201.
RESULTS AND PLAN OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 2019 COMPARED TO THREE MONTHS ENDED MARCH 31 2018
In the three months period ended March 31, 2019, the Company recorded revenue of
$8,224, compared to revenue of $20,803 in the corresponding three month period
ended March 31, 2018. After Cost of Sales of $4,130, the Company had a Gross
Profit of $4,094 in the three months ended March 31, 2019. In the three months
ended March 31, 2018, the Company recorded Cost of Sales of $4,578, which
resulted in a Gross Profit of $16,225.
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 $182,765
in the three months ended March 31, 2019 and $236,773 in the three months ended
March 31, 2018. Main components are engineering, management, marketing and trade
show expenses. In the three months ended March 31, 2019, the Company recorded an
Operating Loss of $178,671 compared to an Operating Loss of $220,548 in the
three months ended March 31, 2018.
The development and marketing costs have been funded in part through interest
bearing convertible notes. As a result, the Company's Other Expenses, which also
included capital raising costs, were $35,266 and $40,992 in the three months
ended March 31, 2019 and 2018 respectively. This resulted in Net Losses of
$213,937 and $261,540 in the three months ended March 31, 2019 and 2018
respectively.
NINE MONTHS ENDED MARCH 31, 2019 COMPARED TO NINE MONTHS ENDED MARCH 31, 2018
In the nine month period ended March 31, 2019, the Company recorded revenue of
$62,694, compared to revenue of $96,847 in the corresponding nine month period
ended March 31, 2018. After Cost of Sales of $23,866, the Company had a Gross
Profit of $38,828. In the nine months ended March 31, 2018, the Company recorded
Cost of Sales of $23,028, which resulted in a Gross Profit of $73,819.
The Company's operating costs decreased from $625,794 in the nine months ended
March 31, 2018 to $506,284 in the nine months ended March 31, 2019. Main
components of operating expenses are engineering, management, marketing and
trade show expenses. In the nine months ended March 31, 2019, the Company
recorded an Operating Loss of $467,456 compared to an Operating Loss of $551,975
in the nine months ended March 31, 2018.
The development and marketing costs have been funded in part through interest
bearing convertible notes. As a result, the Company's Other Expenses, which also
included capital raising costs, increased from $60,507 in the nine
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months ended March 31, 2018 to $127,629 in the nine months ended March 31, 2018.
This resulted in Net Losses of $595,086 and $612,482 in the nine months ended
March 31, 2019 and 2018 respectively.
LIQUIDITY AND CAPITAL RESOURCES
The cash and cash equivalents balance decreased from $40,457 at June 30, 2018 to
$2,171 at March 31, 2019.
The Company reported revenue of $62,694 in the nine months ended March 31, 2019
compared to $96,847 in the nine month period ended March 31, 2018. The Company
incurred a net loss of $467,456 from operating activities for the nine months to
March 31, 2019, compared to a net loss of $551,975 from operating activities for
the nine months to March 31, 2018. Net cash used in operating activities for the
nine months ended March 31, 2019 was $448,629 compared to $462,438 during the
nine months ended March 31, 2018. Operating cash requirement in the nine months
ended March 31, 2019 was reduced through increased related party payables.
The cash flow of the Company from financing activities for the nine months ended
March 31, 2019 was $410,343 as a result of proceeds from issue of common. In the
nine months ended March 31, 2018, the cash flow from financing activities was
$604,119 of advances from unrelated parties, subsequently converted to
convertible notes, and from 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.
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