Business context and reporting period
The filing is a unaudited Form 10-Q for the quarter and six months ended October 31, 2017, covering LAZEX Inc., a Nevada company providing travel consulting and tour-guide services, including brewery tours in the Czech Republic. The request metadata names AIRWA Inc.; the filing itself identifies the registrant as LAZEX Inc.
Financial results and position
| Metric | Three months ended Oct. 31, 2017 | Six months ended Oct. 31, 2017 |
|---|---|---|
| Revenue | $5,300 | $13,240 |
| Operating expenses | $4,402 | $14,812 |
| Net income (loss) | $864 | ($1,606) |
| Prior-year revenue | $4,800 | $4,800 |
| Prior-year net income (loss) | $3,300 | $1,280 |
- Revenue rose 10% for the quarter and from $4,800 to $13,240 for the six-month period. Six-month revenue growth reflected more tours.
- Quarterly net income declined from $3,300 to $864 as expenses increased. The six-month period shifted from $1,280 net income to a $1,606 net loss.
- Quarterly operating margin was approximately 17%, versus 69% in the prior-year quarter; the six-month operating result was a loss of $1,572. No gross-profit or gross-margin figure is presented.
- At October 31, cash was $19,423, current assets $20,068, total assets $26,586, and total liabilities $1,114. Current liabilities consisted of a $1,114 related-party loan; reported working capital was approximately $18,954.
- Six-month cash flow: $6,447 used in operations, $4,800 used for software acquisition, and $14,700 provided by stock issuance, resulting in a $3,453 increase in cash to $19,423. No interest was paid; $34 in taxes was paid.
- Equity was $25,472, up from $12,378 at April 30, 2017. The company issued 735,000 shares at $0.02 for $14,700 during the six months. It reported 5,955,000 shares outstanding at October 31 and subsequently issued another 200,000 shares for $4,000; 6,155,000 shares were outstanding December 15.
Management commentary, outlook and risks
Management said quarterly revenue increased because tour pricing varies with program, duration, and group size; six-month revenue growth reflected a higher number of tours. Expenses rose due to professional fees, administrative costs, $4,000 of consulting related to DTC eligibility, and $3,000 for a tour-video portfolio. The company has no line of credit or bank financing and expects to fund operations through existing cash, related-party loans, and further equity or debt issuances. Management stated these resources were expected to cover operations for the next 12 months, while also anticipating additional capital needs and possible dilution.
- The filing states there is substantial doubt about the company’s ability to continue as a going concern. Continued operations depend on profitable operations and/or obtaining financing; there is no formal commitment for continued director support.
- Customer concentration is significant: one customer represented all $5,300 of quarterly revenue. Four customers accounted for all six-month revenue, with the largest contributing 40.03%.
- Management reported no material off-balance-sheet arrangements, no known legal proceedings, and no material changes in internal control over financial reporting. It concluded disclosure controls were effective.
- No specific financial guidance or quantified growth forecast is provided. Management cautioned that forward-looking statements are subject to risks and actual results may differ.
Important facts for investors to verify
- Confirm the correct issuer: the supplied filing is for LAZEX Inc., not AIRWA Inc.
- Assess the going-concern warning, the company’s funding assumptions, and the availability and terms of future financing.
- Review customer concentration and whether the reported tour revenue can be sustained.
- Verify share issuance, proceeds, and the increase in shares outstanding, including the post-quarter issuance.
- Review the expense increases and software acquisition, and confirm how these costs and assets are treated in the financial statements.