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xbrli:pure iso4217:USD xbrli:shares iso4217:USD xbrli:shares
AS-IP TECH, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
|
Nine Months
ended
March 31, 2022
|
|
Nine Months
ended
March 31, 2021
|
|
|
|
|
|
|
Cash flows from
operating activities:
|
|
|
|
|
Net
loss
|
$
|
(1,355,277)
|
|
$
|
(658,062)
|
|
Adjustments to reconcile net loss to net cash used by operating
activities:
|
|
|
|
|
|
|
Issuance of common stock for directors fees
|
|
199,920
|
|
|
12,300
|
|
Issuance of common stock for services
|
|
34,718
|
|
|
6,716
|
|
Issuance of common stock for services, related parties
|
|
21,000
|
|
|
|
|
Amortization of intangibles
|
|
-
|
|
|
13,737
|
|
Changes in operating assets and liabilities
|
|
|
|
|
|
|
Increase (Decrease) in accounts payable
|
|
39
|
|
|
103,811
|
|
Increase (Decrease) in deferred revenue
|
|
-
|
|
|
(1,892)
|
|
Increase (Decrease) in related party payables
|
|
(17,150)
|
|
|
222,577
|
|
Increase in accrued interest
|
|
120,901
|
|
|
-
|
|
Increase in accrued interest, related parties
|
|
56,250
|
|
|
-
|
|
Increase in prepaid expenses
|
|
(87,891)
|
|
|
-
|
|
Net
cash used in operating activities
|
|
(1,027,490)
|
|
|
(300,813)
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
Net
cash used by investing activities
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
Proceeds from loans
|
|
19,168
|
|
|
214,670
|
|
Shares issued in lieu of interest
|
|
307,482
|
|
|
-
|
|
Proceeds from issuance of common stock
|
|
677,313
|
|
|
229,806
|
|
Funds received pending issuance of common stock
|
|
-
|
|
|
11,000
|
|
Net
cash provided by financing activities
|
|
1,003,963
|
|
|
455,476
|
|
|
|
|
|
|
|
|
Net
Increase/(Decrease) in cash
|
|
(23,527)
|
|
|
154,663
|
|
Cash,
beginning of period
|
|
157,601
|
|
|
8,958
|
|
Cash,
end of period
|
$
|
134,074
|
|
$
|
163,621
|
|
|
|
|
|
|
|
|
Supplemental schedule
of non-cash activities:
|
|
|
|
|
|
|
Cash
paid for interest
|
$
|
6,937
|
|
$
|
-
|
|
Common stock paid for interest payable
|
$
|
336,102
|
|
$
|
11,319
|
|
Issuance of shares for related party payables
|
$
|
-
|
|
$
|
12,300
|
|
Related party payables transferred to Loans - related parties
|
$
|
-
|
|
$
|
375,000
|
The
accompanying notes are an integral part of these condensed
financial statements.
7
AS-IP TECH, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
AS OF MARCH 31, 2022
(UNAUDITED)
Note 1.
Organization, Business and Summary of Significant Accounting
Policies
Organization and
Description of Business
AS-IP Tech, Inc. (the
“Company”) was formed on April 29, 1998 as a Delaware
corporation.
The Company’s
technology comprises two product lines called BizjetMobile and
fflya. The products deliver inflight connectivity for business
aviation and commercial airlines respectively. The Company receives
revenue share from sales by distributors of products and serviced
developed from its intellectual property.
Basis of
Presentation
The accompanying
unaudited interim condensed financial statements have been prepared
in accordance with generally accepted accounting principles in the
United States for interim financial information and in accordance
with the instructions to Form 10-Q and Article 8 of Regulation S-X.
In the opinion of management, all adjustments (consisting of normal
recurring adjustments) considered necessary for a fair presentation
have been included. The Company has early adopted ASU2020-06 on its
nine months ended March 31, 2022 unaudited interim condensed
financial statements (See Convertible Financial Instruments and New
Accounting Pronouncements). Operating results for the three months
ended March 31, 2022 are not necessarily indicative of the results
that may be expected for the year ending June 30, 2022. Notes to
the unaudited interim condensed financial statements that would
substantially duplicate the disclosures contained in the audited
financial statements for fiscal year 2020 have been omitted. This
report should be read in conjunction with the audited financial
statements and the footnotes thereto for the fiscal year ended June
30, 2021 included in the Company’s Form 10-K as filed with the
Securities and Exchange Commission on October 6, 2021.
The functional
currency of the Company is the United States dollar. The unaudited
condensed financial statements are expressed in United States
dollars. It is management’s opinion that any material adjustments
(consisting of normal recurring adjustments) have been made which
are necessary for a fair financial statement presentation. The
results for the interim period are not necessarily indicative of
the results to be expected for the year.
For further
information, refer to the financial statements and footnotes
included in the Company’s Form 10-K for the year ended June 30,
2021.
Use of
Estimates
The preparation of
financial statements in conformity with GAAP requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period.
Such estimates and
assumptions impact, among others, the collectability of accounts
receivables, valuation allowance for deferred tax assets due to
continuing and expected future losses, and share-based
payments.
Making estimates
requires management to exercise significant judgment. It is at
least reasonably possible that the estimate of the effect of a
condition, situation or set of circumstances that existed at the
date of the financial statements, which management considered in
formulating its estimate could change in the near term due to one
or more future confirming events. Accordingly, the actual results
could differ significantly from estimates.
Convertible
Financial Instruments
The Company
bifurcates conversion options from their host instruments and
accounts for them as free-standing derivative financial instruments
if certain criteria are met. The criteria include circumstances in
which (a) the economic characteristics and risks of the embedded
derivative instrument are not clearly and closely related to the
economic characteristics and risks of the host contract, (b) the
hybrid instrument that embodies both the embedded derivative
instrument and the host contract is not remeasured at fair value
under otherwise applicable generally
8
accepted accounting
principles with changes in fair value reported in earnings as they
occur, and (c) a separate instrument with the same terms as the
embedded derivative instrument would be considered a derivative
instrument. An exception to this rule is when the host instrument
is deemed to be conventional, as that term is described under
applicable U.S. GAAP. When the Company has historically determined
that the embedded conversion options should not be bifurcated from
their host instruments, discounts have been recorded for the
intrinsic value of conversion options embedded in the instruments
based upon the differences between the fair value of the underlying
common stock at the commitment date of the transaction and the
effective conversion price embedded in the instrument. During the
nine months ended March 31, 2022, the Company has chosen to early
adopt of ASU2020-06 that recombine instruments into a single
liability instrument and do not separately present in equity an
embedded beneficial conversion feature from the convertible notes.
The Company did not record a beneficial conversion feature (“BCF”)
discount on convertible notes issued during nine months ended March
31, 2022 with the conversion rate below the Company’s market stock
price on the date of note issuance.
New Accounting
Pronouncements
In August 2020, the
FASB issued ASU 2020-06, ASC Subtopic 470-20 “Debt-Debt with
“Conversion and Other Options” and ASC subtopic 815-40
“Hedging-Contracts in Entity’s Own Equity”. The standard reduced
the number of accounting models for convertible debt instruments
and convertible preferred stock. Convertible instruments that
continue to be subject to separation models are (1) those with
embedded conversion features that are not clearly and closely
related to the host contract, that meet the definition of a
derivative, and that do not qualify for a scope exception from
derivative accounting; and, (2) convertible debt instruments issued
with substantial premiums for which the premiums are recorded as
paid-in capital. ASU2020-06 removes from U.S. GAAP the separation
models for (1) convertible debt with a cash conversion feature
(“CCF”) and (2) convertible instruments with a beneficial
conversion feature (“BCF”). With the adoption of ASU2020-06,
entities will not separately present in equity an embedded
conversion feature these debts. The amendments in this update are
effective for fiscal years beginning after December 15, 2021,
including interim periods within those fiscal years. Early adoption
is permitted, but no earlier than fiscal years beginning after
December 15, 2020, including interim periods within those fiscal
years. The Company has chosen to early adopt this standard on its
nine months ended March 31, 2022 financial statements and did not
record BCF on the issuance of convertible notes with conversion
rate below the Company’s market stock price on the date of note
issuance.
The Company has
evaluated other recent accounting pronouncements and believes that
none of them have a material effect on the Company’s financial
statements.
Note 2. Going
Concern
The accompanying
unaudited condensed financial statements have been prepared on a
going concern basis, which contemplates the realization of assets
and the satisfaction of liabilities in the normal course of
business. As shown in the accompanying financial statements, the
Company has recurring operating losses, limited funds and has
accumulated deficits. These factors raised substantial doubt about
the Company’s ability to continue as a going concern.
The Company may raise
additional capital by the sale of its equity securities, through an
offering of debt securities, or from borrowing from a financial
institution. The Company does not have a policy on the amount of
borrowing or debt that the Company can incur. Management believes
that actions presently being taken to obtain additional funding
provides the additional opportunity for the Company to continue as
a going concern for the next twelve months after these financial
statements are issued. However, there is no assurance of additional
funding being available or on acceptable terms, if at all. The
financial statements do not include any adjustments relating to the
recoverability and classification of recorded assets or the amounts
of and classification of liabilities that might be necessary in the
event the Company cannot continue in existence.
9
Note 3. Related
Party Transactions
As of March 31, 2022
and June 30, 2021, the Company has recorded as “related party
payables”, $528,924 and $536,075, respectively. A large component
of the payables is advances made by the CFO to pay for operating
expenses. From July 1, 2016, interest has accrued on amounts due to
the CFO calculated quarterly at a rate of 6.5% per annum. As a
result, in the three months ended March 31, 2022 and March 31,
2021, the Company recorded Interest - related party of $2,966 and
$2,781 respectively. In the nine months ended March 31, 2022 and
March 31, 2021, the Company recorded Interest - related party of
$8,757 and $11,382 respectively.
As of March 31, 2022
and June 30, 2021 respectively, the Company had “Due to related
parties” of $228,811 and $228,811 which are advances made by
related parties to provide capital and outstanding directors fees.
The amounts are non-interest bearing and unsecured.
In the three months
ended March 31, 2022 and March 31, 2021 respectively, the Company
recorded net revenue of $0 and $2,759 for BizjetMobile sales from
entities affiliated through common stockholders and directors. In
the nine months ended March 31, 2022 and March 31, 2021
respectively, the Company recorded net revenue of $0 and $26,513
for BizjetMobile sales from entities affiliated through common
stockholders and directors.
In the three months
ended March 31, 2022 and March 31, 2021 respectively, the Company
incurred expenses of approximately $24,000 and $24,000 respectively
to entities affiliated through common stockholders and directors
for management expenses. In the nine months ended March 31, 2022
and March 31, 2021 respectively, the Company incurred expenses of
approximately $72,000 and $72,000 respectively to entities
affiliated through common stockholders and directors for management
expenses.
In the three months
ended March 31, 2022 and March 31, 2021 respectively, the Company
incurred marketing expense of $63,754 and $54,000 to entities
affiliated through common stockholders and directors. In the nine
months ended March 31, 2022 and March 31, 2021 respectively, the
Company incurred marketing expense of $230,725 and $162,065 to
entities affiliated through common stockholders and directors. The
marketing expense in the nine months ended March 31, 2021 included
a fee to related parties of $110,000 following the successful
negotiation for the evaluation of the Company’s fflya system on the
UK fleet of Wizz Air. This has been satisfied with the issue of
11,000,000 shares of the Company’s common stock.
In the three months
ended March 31, 2022 and March 31, 2021 respectively, the Company
incurred expense of $45,000 and $12,000 to entities affiliated
through common stockholders and directors for technical service
support. In the nine months ended March 31, 2022 and March 31, 2021
respectively, the Company incurred expense of $99,000 and $36,000
to entities affiliated through common stockholders and directors
for technical service support.
In the three months
ended March 31, 2022 and March 31, 2021 respectively, the Company
incurred engineering service costs of $43,918 and $48,000 to
entities affiliated through common stockholders and directors, on
normal commercial terms in the course of the Company’s normal
business. In the nine months ended March 31, 2022 and March 31,
2021 respectively, the Company incurred engineering service costs
of $133,218 and $144,000 to entities affiliated through common
stockholders and directors, on normal commercial terms in the
course of the Company’s normal business.
Note 4. Stockholders’ Deficit
As of March 31, 2022,
the Company had 500,000,000 shares of authorized common stock,
$0.0001 par value, with 266,245,923 shares issued and outstanding,
and 50,000 shares in treasury. Treasury shares are accounted for by
the par value method.
As of March 31, 2022,
the Company had 50,000,000 shares of authorized preferred stock,
$0.0001 par value, with no shares issued and outstanding.
During the nine month
period ended March 31, 2022, the Company received subscriptions for
capital of $677,313, for which it has issued 6,773,125 shares of
common stock at $0.10 per share. In the nine month period ended
March 31, 2022, the Company issued 2,478,537 shares in lieu of
interest totalling $336,102, 266,366 shares for services of
10
$34,719, 150,000
shares for services - related parties of $21,000 and 1,428,000
shares in lieu of 2 years directors fees totalling $199,920.
Note 5.
Loans
Loans in the
Company’s balance sheet are made up of:
Unsecured loans
The Company has an
unsecured loan from a third party with balance outstanding at March
31, 2022 of $34,830 (June 30, 2021 $30,016). Interest is calculated
at a rate of 20% per annum with interest of $1,685 and $1,382 taken
up in the three months ended March 31, 2022 and 2021 respectively
and $4,815 and $4,028 taken up in the nine months ended March 31,
2022 and 2021 respectively. The Company makes principal and
interest payments for the loan when funds are available.
The Company has
outstanding unsecured loans from shareholders totalling $10,000 at
March 31, 2022 and $70,295 at June 30, 2021. Effective July 1,
2021, shareholders with $60,295 of the loans agreed to change their
loans to convertible notes as detailed below. The terms of the
loans provide that if they are not repaid by the loan anniversary
(December 31 each year), the Company will issue 16,667 shares of
common stock for each $5,000 of the loan outstanding in lieu of
interest. Interest of $1,125 and $6,250 taken up in the three
months ended March 31, 2022 and 2021 respectively and $3,375 and
$23,438 taken up in the nine months ended March 31, 2022 and 2021
respectively.
Convertible
notes
The Company has
convertible notes totalling $1,801,038 and $1,624,587 as of March
31, 2022, and June 30, 2021 respectively. The holders of the
convertible notes have the right of conversion from the date of
issuance. As of June 30, 2021, the Company determined that a
beneficial conversion feature discount of $1,003,630 should be
applied to the carrying value of convertible notes. In the three
months ended March 31, 2022 and the year ended June 30, 2021, the
company has taken up an amortization expense of $0 and $133,765
against the beneficial conversion feature.
Convertible notes
outstanding as of March 31, 2021 and June 30, 2021 are summarized
below:
|
Details
|
Maturity
Date
|
Balance at
Mar. 31,
2022
|
Balance at
June 30,
2021
|
|
20% Convertible Notes
totalling $337,500 plus accrued interest
|
Dec. 31,2023
|
$627,392
|
$540,653
|
|
20% Convertible Notes
totalling $247,500 plus accrued interest
|
Dec. 31,2023
|
247,500
|
271,875
|
|
20% Convertible Notes
totalling $22,500 plus accrued interest
|
At call
|
30,563
|
34,125
|
|
20% Convertible Notes
totalling $200,000 plus accrued interest
|
Dec. 31,2023
|
247,101
|
212,939
|
|
20% Convertible Notes
totalling $125,000 plus accrued interest
|
Dec. 31,2023
|
125,000
|
126,326
|
|
20% Related party
Convertible Notes totalling $375,000 plus accrued interest
|
Dec. 31,2023
|
468,750
|
412,500
|
|
20% Convertible Notes
totalling $60,295 plus accrued interest
|
Dec. 31,2023
|
60,295
|
60,295
|
|
20% Convertible Notes
totalling $25,000 plus accrued interest
|
Dec. 31,2023
|
25,000
|
0
|
|
Total convertible
notes
|
|
1,831,601
|
1,658,713
|
|
Less Unamortized
discounts
|
|
0
|
(1,003,630)
|
|
Net convertible
notes
|
|
$1,831,601
|
$655,083
|
In 2018, the Company
issued Convertible Notes which totalled $607,500, to fund the
development of its fflya systems. Two issues were made as
follows:
11
The first convertible
note for $337,500. Terms of the issue are:
-Interest
rate: 20% per annum.
-Conversion
price: $0.03 per share.
-Maturity
date: December 1, 2020, which has now been extended to December 31,
2023, conditional on the holders advancing an additional $200,000
on terms set out under 4 below, and outstanding interest to be
compounded.
A second convertible
note issue for $247,500, on the following terms:
-Interest
rate: 20% per annum, payable monthly in arrears
-Conversion
price: $0.05 per share
-Maturity
date: December 1, 2020, which had been extended to December
31, 2023.
In return for
providing the funding, the original investors will receive
commissions on Viator tours and attractions for the first 27 system
installations. Each investor will receive a commission for three
years on terms to be agreed, based on the net revenue received once
the systems commence operation. To date, no systems have been
installed and no commissions have been paid. None of the Notes have
been converted to shares to date.
In July 2021, related
party contractors agreed to accept convertible notes totalling
$375,000 to reduce the debts they are owed, as follows:
-Interest
rate: 20% per annum, payable monthly in arrears in shares
-Conversion
price: $0.015 per share
-Maturity
date: December 31, 2023
Two convertible notes
for $200,000. Terms of the issue are:
-Interest
rate: 20% per annum.
-Conversion
price: $0.015 per share.
-Maturity
date: December 1, 2023, and outstanding interest to be
compounded.
Additional
convertible notes totalling $125,000, on the following terms:
-Interest
rate: 20% per annum, payable monthly in arrears by cash or
shares
-Conversion
price: $85,000 convertible at $0.05 per share, $40,000 convertible
at $0.015.
-Maturity
date: December 31, 2023.
Convertible notes
totalling $60,295, to replace the loans detailed above, on the
following terms:
-Interest
rate: 20% per annum, payable monthly in arrears by cash or
shares
-Conversion
price: $0.05 per share
-Maturity
date: December 31, 2023.
$1,137,395 debt
discounts were recognized as a result of beneficial conversion
feature incurred upon issuance of above convertible notes. $133,765
was amortized during the year ended June 30, 2021.
With the adoption of
ASU2020-06, the Company recorded a transition adjustment for
adjusting the unamortized BCF discount as of June 30, 2021 of
$1,003,630 to opening retained earnings during the nine months
ended March 31, 2022.
Note 6. Subsequent
Events
On April 29, 2022 the
Company issued a Form 8-K to announce that it had agreed to amend
the terms of its Heads of Agreement with Wizz Air Hungary Airlines
Limited to provide its fflya system for 19 of Wizz Air, United
Kingdom based A320 and A321 aircraft, for a minimum of three years,
under a previously agreed revenue sharing arrangement.
12
ITEM 2.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
This quarterly report
on Form 10-Q includes “forward-looking statements” as defined by
the Securities and Exchange Commission. These statements may
involve known and unknown risks, uncertainties and other factors
which may cause actual results, performance or achievements to be
materially different from future results, performance or
achievements expressed or implied by any forward-looking
statements. Forward-looking statements, which involve
assumptions and describe future plans, strategies and expectations,
are generally identifiable by use of the words “may,” “will,”
“could”, “should,” “expect,” “anticipate,” “estimate,” “believe,”
“intend” or “project” or the negative of these words or other
variations on these words or comparable terminology. These
forward-looking statements are based on assumptions that may be
incorrect. Actual results could differ materially from those
expressed or implied by the forward-looking statements as a result
of various factors. The company undertakes no obligation to
update publicly any forward-looking statements for any reason, even
if new information becomes available or other events occur in the
future.
The following
discussion should be read in conjunction with the accompanying
unaudited condensed financial statements for the nine months ended
March 31, 2022 and the Form 10-K for the fiscal year ended June 30,
2021.
OVERVIEW
The Company’s
inflight connectivity technology is targeted at two distinct
markets. BizjetMobile and CrewX are designed for business jets and
has been sold in North America, Europe and the Middle East. The
Company’s fflya system is designed for, and marketed to, low-cost
airlines in Europe and Asia.
As previously
advised, the Company’s arrangements with BizjetMobile are being
re-negotiated, and as a result, no revenue has been taken up in the
current financial year.
The Company has
continued investing in the development and marketing of the airline
versions of its fflya and CrewX technology. As per Note 6 above,
the Company has secured its launch fleet, Wizz Air Hungary Airlines
Limited, to provide its fflya system for 19 of its United Kingdom
based A320 and A321 aircraft for a minimum three years under a
previously agreed revenue sharing arrangement.
Implementation of the
Company’s fflya program was delayed due to the impact of Covid19,
which will necessitate further renegotiation of outstanding loans
and debts, as well as raising additional funding.
RESULTS OF
OPERATIONS
THREE MONTHS ENDED
MARCH 31, 2022 COMPARED TO THREE MONTHS ENDED MARCH 31,
2021
In the three months
period ended March 31, 2022, the Company recorded revenue of $0,
compared to revenue of $27,779 in the corresponding three-month
period ended March 31, 2021, as there were no system sales due to
the impending release of the new Iridium Certus mid band internet
solution, which will form the basis of an enhanced BizjetMobile
service.
The Company incurred
operating costs of $190,970 in the three months ended March 31,
2022 and $159,691 in the three months ended March 31, 2021. Main
components are engineering, technical support and marketing
expenses. In the three months ended March 31, 2022, the Company
recorded an operating loss of $190,970 compared to an Operating
Loss of $131,912 in the three months ended March 31, 2021.
The development and
marketing costs have been funded in part through interest bearing
convertible notes. As a result, the Company’s Other Expenses,
included interest and capital raising costs of $134,149 in the
three months ended March 31, 2022, compared to interest cost of
$47,460 in the three months ended March 31, 2021. This resulted in
Net Losses of $325,119 and $179,372 in the three months ended March
31, 2022 and 2021 respectively.
13
NINE MONTHS ENDED
MARCH 31, 2022 COMPARED TO NINE MONTHS ENDED MARCH 31, 2021
In the nine month
period ended March 31, 2022, the Company recorded revenue of $0,
compared to revenue of $64,597 in the corresponding nine month
period ended March 31, 2021, as there were no system sales due to
the impending release of the new Iridium Certus mid band internet
solution, which will form the basis of an enhanced BizjetMobile
service.
The Company incurred
operating costs of $888,955 in the nine months ended March 31, 2022
and $591,547 in the nine months ended March 31, 2021. Main
components are engineering, technical support, marketing expenses
and directors fees for two years. In the nine months ended March
31, 2022, the Company recorded an operating loss of $888,995
compared to an Operating Loss of $526,950 in the nine months ended
March 31, 2021.
The development and
marketing costs have been funded in part through interest bearing
convertible notes. As a result, the Company’s Other Expenses,
included interest and capital raising costs of $466,322 and
$131,112 in the nine months ended March 31, 2022 and 2021
respectively. This resulted in Net Losses of $1,355,277 and
$658,062 in the nine months ended March 31, 2022 and 2021
respectively.
LIQUIDITY AND
CAPITAL RESOURCES
The Company’s primary
sources of liquidity are cash received from issue of common stock
and accounts payable for expenses incurred with related parties.
Without the continuation of these sources of funding, as stated in
Note 2 above, the Company’s ability to continue as a going concern
is in substantial doubt. This will continue until the company is
able to generate sufficient cash flow from its operations.
The cash and cash
equivalents balance was $134,074 at March 31, 2022 and $157,601 at
June 30, 2021.
The Company reported
revenue of $0 in the nine months ended March 31, 2022 compared to
$64,597 in the nine month period ended March 31, 2021. The Company
incurred a loss of $ 888,955 from operating activities for the nine
months to March 31, 2022, compared to a loss of $526,950 from
operating activities for the nine months to March 31, 2021. Net
cash used in operating activities for the nine months ended March
31, 2022 was $1,027,490 compared to $300,813 during the nine months
ended March 31, 2021. Operating cash requirement in the nine months
ended March 31, 2022 increased mainly through higher marketing,
engineering and technical support costs.
The cash flow of the
Company from financing activities for the nine months ended March
31, 2022 was $1,093,963 as a result of funds received for common
stock and issue of shares in lieu of interest payments. In the nine
months ended March 31, 2021, the cash flow from financing
activities was $455,476 mainly from funds received pending issue of
common stock and increased loans.
The Company may raise
additional capital by the sale of its equity securities, through an
offering of debt securities, or from borrowing from a financial
institution or other funding sources. The Company does not have a
policy on the amount of borrowing or debt that the Company can
incur. There are no guarantees on the company’s ability to raise
additional capital and hence its ability to continue as a going
concern.
ITEM 3.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
ITEM 4. CONTROLS
AND PROCEDURES
(a) Evaluation of disclosure controls
and procedures.
Our management,
including the Company’s President, and the Company’s Chief
Financial Officer, have evaluated the effectiveness of the design
and operation of our disclosure controls and procedures (as defined
in Exchange Act Rules 13a- 15(e) and 15d-15(e)) and internal
controls over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) as of the end of the period covered by
this Quarterly Report on Form 10-Q.
14
Based upon that
evaluation, our management concluded that our disclosure controls
and procedures as of the end of the period covered by this report
are ineffective and have material weaknesses as set out in the June
30, 2021 Form 10-K, such that the information required to be
disclosed by us in the reports filed under the Securities Exchange
Act of 1934 is (i) recorded, processed, summarized and reported
within the time periods specified in SEC’s rules and forms and (ii)
accumulated and communicated to our management to allow timely
decisions regarding disclosure. A controls system cannot provide
absolute assurance however, that the effectiveness of the controls
system are met and no evaluation of controls can provide absolute
assurance that all control issues and instances of fraud if any,
within a company have been detected.
(b) Changes in internal
controls.
The Company’s
management, including the President and Chief Financial Officer,
evaluated whether any changes in our internal controls over
financial reporting, occurred during the quarter ended March 31,
2022. Based on that evaluation, our management concluded that no
change occurred in the Company’s internal controls over financial
reporting during the quarter ended March 31, 2022 that has
materially affected, or is reasonably likely to materially affect,
the Company’s internal controls over financial reporting.
15
PART II. OTHER INFORMATION
ITEM 1. LEGAL
PROCEEDINGS
None
ITEM 1A. RISK
FACTORS
The Company is a
smaller reporting company and is not required to provide this
information.
ITEM 2.
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
During the three
months ended March 31, 2022, the Company issued 4,846,726 shares of
common stock valued at $484,673 for cash that were not registered
under the Securities Act of 1933. The offer, sale and issuance of
these securities was made in reliance upon the exemption from the
registration requirements of the Securities Act provided for by
Section 4(2) thereof for transactions not involving a public
offering. Appropriate legends have been affixed to the securities
issued in these transactions. The purchasers of the securities had
adequate access, through business or other relationships, to
information about the Company. The proceeds from the share sales
have been used for the Company’s airline program and operating
costs.
ITEM 3. DEFAULTS
UPON SENIOR SECURITIES
None
ITEM 4. MINE
SAFETY DISCLOSURES
None
ITEM 5. OTHER
INFORMATION
None
ITEM 6. EXHIBITS
AND REPORTS ON FORM 8-K
(a) Exhibits:
|
Exhibit
No.
|
|
Description
|
|
|
|
|
|
31.1
|
|
Certification of the
President under Rule 13a-14(a) (Section 302 of the Sarbanes-Oxley
Act of 2002)
|
|
31.2
|
|
Certification of the
Chief Financial Officer under Rule 13a-14(a) (Section 302 of the
Sarbanes-Oxley Act of 2002)
|
|
32.1
|
|
Certification
Pursuant To Section 906 Of The Sarbanes-Oxley Act of 2002 (18
U.S.C. Section 1350)
|
|
32.2
|
|
Certification
Pursuant To Section 906 Of The Sarbanes-Oxley Act of 2002 (18
U.S.C. Section 1350)
|
(b) Reports on Form
8-K was filed in the quarter ended March 31, 2022:
None.
16
SIGNATURES
In accordance with
the Exchange Act, the registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly
authorized.
AS-IP TECH,
INC.
|
SIGNATURES:
|
TITLE
|
DATE
|
|
|
|
|
|
By:
/s/ Ronald
J. Chapman
|
Director
|
May 13, 2022
|
|
Ronald J. Chapman
|
|
|
|
|
|
|
|
|
|
|
|
By:
/s/ Philip
A. Shiels
|
Director
|
May 13, 2022
|
|
Philip A. Shiels
|
|
|
|
|
|
|
|
|
|
|
|
By:
/s/ Graham
O. Chappell
|
Director
|
May 13, 2022
|
|
Graham O.
Chappell
|
|
|
17