Filing summary
Period and issuer: This unaudited Form 10-Q covers the three months ended July 31, 2017, the company’s first fiscal quarter for the year ending April 30, 2018. The filing identifies the registrant as LAZEX INC., a Nevada company providing travel consulting and brewery-tour services in the Czech Republic; this differs from the request metadata, which names AIRWA INC.
Financial performance and position
- Revenue: $7,940, compared with $0 in the three months ended July 31, 2016.
- Expenses and earnings: Operating expenses were $10,410, versus $2,020 a year earlier. The company reported a net loss of $2,470, compared with a $2,020 net loss. The filing reports basic and diluted loss per share as $0.00. Gross profit and gross margin are not separately presented.
- Cash flow: Operating activities used $7,827; investing activities used $4,800, primarily for computer software; financing activities provided $5,100 from stock issuance. Cash declined by $7,527 to $8,443.
- Assets and liquidity: At July 31, 2017, total assets were $16,122, including $8,443 of cash and $4,534 of net intangible assets. Current assets were $9,088 and current liabilities were $1,114.
- Liabilities and equity: Total liabilities were $1,114, all reported as a non-interest-bearing, unsecured, related-party loan due on demand. Stockholders’ equity was $15,008. The company had no bank credit lines or other bank financing arrangements.
Changes versus the comparable period and prior balance sheet
- Revenue began to be reported in the quarter, while the comparable 2016 quarter had no revenue. The company attributed current-period revenue to travel consulting and tour-guide services.
- Expenses rose by $8,390, principally reflecting $4,000 of consulting services and $3,000 of videography services, neither of which was reported in the comparable quarter.
- Compared with April 30, 2017, cash fell from $15,970 to $8,443 and total assets fell from $19,365 to $16,122. Total liabilities declined from $6,987 to $1,114, including payment of accrued expenses. Equity rose from $12,378 to $15,008.
- The company issued 255,000 shares at $0.02 per share for $5,100 in proceeds. Shares outstanding were reported as 5,475,000 at July 31, 2017.
Outlook, risks and unusual items
- Going concern: The filing states that substantial doubt exists about the company’s ability to continue as a going concern. Management expects losses during business development and says operations depend on generating profitable operations and/or obtaining financing.
- Funding outlook: Management expects existing funds, further advances and anticipated cash flow to fund operations for the next 12 months, but also expects to need additional capital for longer-term requirements. Planned funding may include equity or debt issuances; equity or convertible-debt financing could dilute shareholders, and financing may not be available on acceptable terms or at all.
- Related-party support: The sole officer and director’s $1,114 loan is due on demand, and there is no formal commitment for continued related-party support. The officer and director also provides services and office space without compensation or rent under the disclosed arrangements.
- Other disclosures: The company reported no material off-balance-sheet arrangements, no pending or threatened legal proceedings known to management, and no reportable subsequent events. Management concluded disclosure controls were effective and reported no material changes in internal control over financial reporting.
Investor verification points
- Confirm the issuer identity: the supplied metadata says AIRWA INC., but the filing itself identifies LAZEX INC.
- Review the going-concern risk, the company’s limited cash balance, and its reliance on future financing and potentially discretionary related-party advances.
- Assess the sustainability and collection of the newly reported $7,940 of revenue relative to operating costs and cash burn.
- Verify the software acquisition, its useful life and amortization, and the expected business benefit; the filing reports a $4,800 cash outflow and $4,534 net intangible assets.
- Reconcile filing inconsistencies: MD&A says other administrative expenses were $1,405, while the statement of operations reports general and administrative expenses of $1,410; the notes also contain an interim-financial-statement date reference that does not match the reported July 31, 2017 period.