Business context and reporting period
Issuer identity mismatch: The supplied filing is for Flux Technologies, Corp., not Atlas Lithium Corp. It reports the three months ended May 31, 2012; the company was incorporated on December 15, 2011 and describes itself as a development-stage Poland-based 3D computer animation business. The filing does not provide a comparable prior-year quarter.
Financial results and liquidity
- Quarter revenue was $2,450, recognized under a $4,900 service agreement signed with a Polish customer. The filing reports no cost of revenue or gross margin.
- Operating expenses were $3,790, including $3,750 of professional fees and $40 of general and administrative expenses. Net loss was $1,340; basic loss per share was reported as $(0.00).
- Cash and total assets were $17,398 at May 31, 2012, down from $21,488 at February 29, 2012. Current liabilities were $1,250, entirely accrued expenses; no debt balance is presented.
- Quarterly operating cash outflow was $4,090; no financing cash flow was reported for the quarter. Stockholders’ equity was $16,148, versus $17,488 at February 29, 2012.
- From inception through May 31, 2012, cumulative revenue was $2,450, net loss was $6,052, and operating cash outflow was $4,802. Cumulative financing cash inflow was reported as $22,200.
Material changes and unusual items
The company recorded its first revenue on May 1, 2012. Cash declined by $4,090 during the quarter as operating activities used cash and no quarterly financing inflow was reported. The filing reports 3,880,000 common shares outstanding and $22,200 of cumulative stock-sale proceeds. It also says 3,000,000 shares were sold to a director.
Outlook, risks, and contingencies
Management expects further losses and says additional capital will be needed for long-term operating requirements. It expects to fund operations through existing cash, director loans or advances, and further equity or debt issuances; management states these sources are expected to cover the next 12 months. The filing warns financing may not be available on acceptable terms, and equity or convertible debt could dilute shareholders or carry senior rights. The company has no bank credit line, reports no material off-balance-sheet arrangements, and says no legal proceedings are known. The notes state that accumulated losses and anticipated further losses raise substantial doubt about the company’s ability to continue as a going concern.
Important facts to verify
- Confirm the issuer: the filing names Flux Technologies, Corp., despite the request identifying Atlas Lithium Corp.
- Verify the reporting-period description: the filing presents a quarter ended May 31, 2012, but elsewhere refers inconsistently to a “six month period” for financing cash flows.
- Reconcile the financing descriptions: the cash flow statement attributes cumulative $22,200 financing to common-stock sales, while MD&A also mentions advances from a director and debt instruments.
- Confirm collection and remaining performance under the $4,900 service agreement; the filing records $2,450 of revenue.