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 six months ended December 31,
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.
The Company has 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, and has been able to commission its first A321
installation. In addition, the airline product will be used to upgrade the
business jet offering which is expected to open new marketing opportunities.
Implementation of the Company's fflya program has been delayed due to the impact
of Covid19, which has necessitated renegotiation of outstanding loans and debts,
as well as raising additional funding.
RESULTS OF OPERATIONS
THREE MONTHS ENDED DECEMBER 31, 2020 COMPARED TO THREE MONTHS ENDED DECEMBER 31,
2019
In the three months period ended December 31, 2020, the Company recorded revenue
of $20,786, compared to revenue of $8,744 in the corresponding three-month
period ended December 31, 2019, as a result of increased Chiimp service fees.
The Company incurred operating costs of $147,526 in the three months ended
December 31, 2020 and $178,287 in the three months ended December 31, 2019. Main
components are engineering and marketing expenses. In the three months ended
December 31, 2020, the Company recorded an Operating Loss of $126,740 compared
to an Operating Loss of $169,543 in the three months ended December 31, 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 $41,790 and $37,764 in the three months ended December 31, 2020 and
2019 respectively. This resulted in Net Losses of $168,530 and $207,281 in the
three months ended December 31, 2020 and 2019 respectively.
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SIX MONTHS ENDED DECEMBER 31, 2020 COMPARED TO SIX MONTHS ENDED DECEMBER 31,
2019
In the six months period ended December 31, 2020, the Company recorded revenue
of $36,818, compared to revenue of $23,753 in the corresponding six-month period
ended December 31, 2019, as a result of increased Chiimp service fees but after
lower 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 $431,857
in the six months ended December 31, 2020 and $373,746 in the six months ended
December 31, 2019. Main components are engineering and marketing expenses. In
the six months ended December 31, 2020, the Company recorded an Operating Loss
of $395,039 compared to an Operating Loss of $349,993 in the six months ended
December 31, 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 $83,652 and $74,534 in the six months ended December 31, 2020 and
2019 respectively. This resulted in Net Losses of $478,691 and $424,528 in the
six months ended December 31, 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 $11,231 at December 31, 2020 and
$8,958 at June 30, 2020.
The Company reported revenue of $36,818 in the six months ended December 31,
2020 compared to $23,753 in the six month period ended December 31, 2019. The
Company incurred a loss of $395,039 from operating activities for the six months
to December 31, 2020, compared to a loss of $349,993 from operating activities
for the six months to December 31, 2019. Net cash used in operating activities
for the six months ended December 31, 2020 was $221,535 compared to $197,689
during the six months ended December 31, 2019. Operating cash requirement in the
six months ended December 31, 2020 was increased mainly through increased
accounts payable and related party payables.
The cash flow of the Company from financing activities for the six months ended
December 31, 2020 was $223,808 as a result of funds received pending issue of
common stock and proceeds from issuance of common stock. In the six months ended
December 31, 2019, the cash flow from financing activities was $220,033 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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