Net Loss
Our net loss decreased by $393,667 to $663,148 for the three months ended July 31, 2015 from $1,056,825 for the three months ending July 31, 2014. The decrease in net loss compared to the prior year is primarily a result of the decrease in operating expenses of $331,818 and the increase in gross profit of $69,374.
Liquidity and Capital Resources
Introduction
During the three months ended July 31, 2015 we generated positive operating cash flows of $11,436. Our cash on hand as of July 31, 2015 was $119,276. At July 31, 2015, the Company had a working capital surplus of $364,783.
Cash Requirements
We had cash available of $119,276 as of July 31, 2015. Based on our revenues, cash on hand and current monthly burn rate, around $15,000, we believe that our operations are sufficient to fund operations through January 2016.
Sources and Uses of Cash
Operations
We had net cash provided by continuing operating activities of $11,436 for the three months ended July 31, 2015, as compared to cash used of $78,644 for the three months ended July 31, 2014. Cash used in discontinued operating activities was $51,400 for the three months July 31, 2014.
Net cash provided by continuing operations consisted primarily of the net loss of $663,148 offset by non-cash expenses of $342,571 consisting of depreciation and amortization of intangible assets of $2,070 and $340,501 in common stock issued for services. Additionally, changes in assets and liabilities consisted of decreases in accounts receivable of $22,140, other receivables of $10,000, and prepaid expenses of $307,819, these decreases were partially offset by increases in inventory of $11,002, accounts payable of $2,998, and deferred revenue of $6,053.
Investments
We had net cash used in continuing investing activities of $0 for the three months ended July 31, 2015 and July 31, 2014. Cash used in discontinued investing activities was $2,800.
Financing
We had net cash provided by continuing financing activities of $5,149 for the three months ended July 31, 2015, as compared to net cash used of $75,591 for the three months ended July 31, 2014. Our financing activities consisted primarily of $8,500 in advances from related parties, $2,850 in repayments from related parties, and $6,201 in repayments to related parties. Cash provided by discontinued investing activities was $75,591 for the three months ended July 31, 2014.
Off-Balance Sheet Arrangements
We have no 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 we consider material.
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