Business context and reporting period
The supplied filing identifies the registrant as LAZEX INC., a Nevada company providing travel consulting and brewery-tour services in the Czech Republic; this conflicts with the request metadata naming AIRWA INC. The unaudited 10-Q covers the three months ended July 31, 2019, the first quarter of Lazex’s fiscal year ending April 30, 2020.
Financial results and position
| Metric | Three months ended July 31, 2019 | Comparable period |
|---|---|---|
| Revenue | $0 | $0 |
| Operating expenses | $7,724 | $6,517 |
| Net loss | $7,724 | $6,517 |
| Basic and diluted loss per share | $(0.00) | $(0.00) |
| Cash used in operating activities | $7,074 | $4,066 |
| Cash from financing activities | $6,150 | $0 |
At July 31, 2019, cash was $1,070, total current assets $1,715, total assets $3,549, current liabilities and total liabilities $17,464, and stockholders’ deficit $13,915. Related-party loans were $16,264, up from $10,114 at April 30, 2019; they are unsecured, non-interest-bearing, and due on demand. The company reported no interest or taxes paid. With no revenue, a profit margin is not meaningful.
Changes versus comparable periods
Quarterly expenses and net loss increased $1,207 year over year; management attributes the increase to accounting and legal costs, which rose $1,050. Operating cash use increased by $3,008. Cash declined by $924 during the quarter, compared with $4,066 in the prior-year quarter. Compared with April 30, 2019, total assets fell $1,574 and liabilities rose $6,150, reflecting lower cash and depreciation/amortization, and additional related-party borrowing. Accumulated deficit rose to $40,815.
Outlook, risks and other matters
- Management says existing cash, further advances, and anticipated cash flow are expected to fund operations for the next 12 months, but also expects to need additional capital for long-term requirements. It plans to rely on related-party loans and/or securities issuances; financing may be unavailable or dilutive.
- The filing states there is substantial doubt about the company’s ability to continue as a going concern. Management anticipates further losses, and the statements include no adjustments that might be required if the company cannot continue.
- Disclosure controls and procedures were assessed as ineffective. No material changes in internal control over financial reporting were reported.
- No material subsequent events, legal proceedings, or material off-balance-sheet arrangements were disclosed. The filing reports no revenue in either quarter.
Important facts for investors to verify
- Confirm the issuer’s identity: the filing names LAZEX INC., not AIRWA INC.
- Verify the company’s ability to generate revenue and fund operations, including the availability and terms of further related-party support or outside financing.
- Review the going-concern uncertainty, ineffective disclosure controls, and potential dilution from future securities issuances.
- The filing reports 6,095,000 common shares outstanding as of September 4, 2019.