HAWKEYE SYSTEMS, INC. General
We were incorporated on
Hawkeye's mission for the next fiscal year and beyond is to, through acquisition and organic growth, become one of the largest US providers of PPE in the categories we compete in. We intend to do this through organic sales, acquisition and partnership. We have not abandoned our technology origins and in fact with financial strength we will reveal and roll out innovations closely aligned with the categories we are competing in.
Our business office is located at 6605 Abercorn, Suite 204,
The following discussion relates to the historical operations and financial
statements of
Forward-Looking Statements
The following Management's Discussion and Analysis should be read in conjunction
with our financial statements and the related notes thereto included elsewhere
in this Annual Report. The Management's Discussion and Analysis contains
forward-looking statements that involve risks and uncertainties, such as
statements of our plans, objectives, expectations and intentions. Any statements
that are not statements of historical fact are forward-looking statements. When
used, the words "believe," "plan," "intend," "anticipate," "target," "estimate,"
"expect," and the like, and/or future-tense or conditional constructions
("will," "may," "could," "should," etc.), or similar expressions, identify
certain of these forward-looking statements. These forward-looking statements
are subject to risks and uncertainties that could cause actual results or events
to differ materially from those expressed or implied by the forward-looking
statements in this Annual Report. Our actual results and the timing of events
could differ materially from those anticipated in these forward-looking
statements. Factors that could cause or contribute to such differences in
results and outcomes include, without limitation, those specifically addressed
under the heading "Risks Factors" in our various filings with the
Financial Condition and Results of Operations
We have incurred recurring losses to date. Our financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation.
We expect we will require additional capital to meet our long term operating requirements. We expect to raise additional capital through, among other things, the sale of equity or debt securities.
Results of Operations
Three Months Ended
We had operating revenues of
Total operating expenses in the three months ended
Our financial statements reflect a net loss of
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Nine Months Ended
We had operating revenues of
Total operating expenses in the nine months ended
Our financial statements reflect a net loss of
Liquidity and Capital Resources
The following table provides selected financial data about our company as of
March 31, June 30,
2020 2020 Change %
Cash $ 101,474 $ 911,747 $ (810,273 ) (88.9 )%
Current assets $ 1,587,385 $ 1,475,587 $ 111,798 7.6 %
Current liabilities $ 2,102,709 $ 1,317,257 $ 785,452 59.6 %
Working Capital $ (515,324 ) $ 158,330 $ (673,654 ) (425.5 )%
Our cash balance at
We intend to raise funds through private placements and the exercise of warrants
issued in private placements. Although to date we have had some warrant
exercises for cash, there can be no assurance that we will be able to raise
money through private offerings or through the exercise of warrants. If we
cannot raise any additional financing prior to the expiration of the fiscal year
ending
We are an emerging growth company and have generated limited revenue to date. Under a limited operations scenario to maintain our corporate existence, we will require additional funds over the next 12 months to complete our regulatory reporting and filings. However, we will require maximum participation in private offerings or through alternative financings to implement our complete business plan.
There are no assurances that we will be able to obtain further funds required for our continued operations. Even if additional financing is available, it may not be available on terms we find favorable. Failure to secure the needed additional financing will have an adverse effect on our ability to remain in business.
Cash Flows
Nine months ended
March 31, Change
2021 2020 Amount
Cash flows (used in) operating activities
- (178,000 ) 178,000
Cash flows provided by financing activities 1,354,483 603,491 750,992 Net change in cash during period
$ (810,273 ) $ 3,610 $ (813,883 ) 16 Table of Contents
Cash Flow from Operating Activities
As of
Cash flows used in operating activities for the nine months ended
Cash Flows from Investing Activities
During the nine months ended
Cash Flows from Financing Activities
We have financed our operations primarily from the issuance of equity
instruments. For the nine months ended
Plan of Operation and Funding
We expect that working capital requirements will continue to be funded through equity offerings, warrant exercises, and related party advances in the near term. We have no guarantees or firm commitments that the related party advances will continue in the near term. Our working capital requirements are expected to increase with the growth of our business.
Existing working capital, further advances, together with anticipated capital raises, warrant exercises and anticipated cash flow are expected to be adequate to fund our operations over the next twelve months. We have no lines of credit or other bank financing arrangements. Generally, we have financed operations to date through proceeds from the sale of our common stock, warrant exercises and convertible loans.
Management anticipates additional increases in operating expenses and capital expenditures relating to: (i) funding our PPE purchases and sales; (ii) developmental expenses; and (iii) marketing expenses. We intend to finance these expenses with issuances of securities, funding agreements with third parties for PPE products, and through the exercise of outstanding warrants.
Additional issuances of equity or convertible debt securities will result in dilution to our current shareholders. Further, such securities might have rights, preferences or privileges senior to our common stock. Additional financing may not be available upon acceptable terms, or at all. If adequate funds are not available or are not available on acceptable terms, we may not be able to take advantage of prospective new business endeavors or opportunities, which could significantly and materially restrict our business operations.
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Effective
In
Because COVID-19 infections have been reported throughout
The ultimate impact of the COVID-19 pandemic on the Company's operations is unknown and will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration of the COVID-19 outbreak, new information which may emerge concerning the severity of the COVID-19 pandemic, and any additional preventative and protective actions that governments, or the Company, may direct, which may result in an extended period of continued business disruption, reduced customer traffic and reduced operations. Any resulting financial impact cannot be reasonably estimated at this time but may have a material impact on our business, financial condition and results of operations.
The significance of the impact of the COVID-19 outbreak on the Company's business and the duration for which it may have an impact cannot be determined at this time.
Because of the COVID-19 pandemic, the Company has focused on pandemic management products and services.
Material Commitments
As of the date of this Current Report, we do not have any material commitments.
Purchase of Significant Equipment
While we maintain some inventory of PPE products, we do not intend to purchase any significant equipment during the next twelve months.
Application of Critical Accounting Policies
We have identified the policies below as critical to our business operations and the understanding of our results of operations. The impact on our business operations and any associated risks related to these policies are discussed throughout Management's Discussion and Analysis of Financial Condition and Results of Operations when such policies affect our reported or expected financial results.
In the ordinary course of business, we have made a number of estimates and
assumptions relating to the reporting of results of operations and financial
condition in the preparation of our financial statements in conformity with
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The material estimates for our company are that of the stock-based compensation recorded for options and financing expenses for warrants. The fair values of options and warrants are determined using the Black-Scholes option pricing model. We have no historical data on the accuracy of these estimates. The estimated sensitivity to change is related to the various variables of the Black-Scholes option pricing model. The specific quantitative variables are included in the notes to the consolidated financial statements.
We prepare our financial statements in conformity with
While we believe that the historical experience, current trends and other factors considered support the preparation of our financial statements in conformity with GAAP, actual results could differ from our estimates and such differences could be material.
For our critical accounting policies and estimates for "Revenue Recognition" see
Note 1, Summary of Significant Accounting Policies, to the unaudited Condensed
Consolidated Financial Statements in Item 1 of Part I of this Quarterly Report.
Other than the policy changes disclosed in Note 1, Summary of Significant
Accounting Policies, to the unaudited Condensed Consolidated Financial
Statements in Item 1 of Part I of this Quarterly Report, there have been no
material changes to our critical accounting policies and estimates during the
nine months ended
Off-Balance Sheet Arrangements
As of the date of this Current Report, we do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.
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