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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
ANNUAL REPORT
FORM 10-K
(Mark One)
☒ ANNUAL REPORT UNDER
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal period ended June 30,
2022
☐ TRANSITION REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
Commission file number 000-27881
AS-IP TECH INC.
(Formerly ASI ENTERTAINMENT, INC.)
(Exact name of small business issuer as specified in its
charter)
|
Delaware
|
52-2101695
|
|
(State or other jurisdiction of
|
(IRS Employer Identification No.)
|
|
incorporation or organization)
|
|
1/15 Castles Drive
Torquay, Victoria, 3228, Australia
(Address of principal executive officers)
+1 424-888-2212
(Issuer’s telephone number)
Securities registered under Section 12(g) of the Exchange Act:
Common Stock
Indicate by check mark whether the registrant is a well-known
seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes ☐ No
☒
Indicate by check mark whether the registrant is not required to
file reports pursuant to Section 13 or Section 15(d) of the Act.
Yes ☐ No
☒
Indicate by check mark whether the registrant (1) filed all reports
required to be filed by Section 13 or 15(d) of the Exchange Act
during the last 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes
☒ No ☐
Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Website, if any, every
Interactive Data File required to be submitted and posted pursuant
to Rule 405 of Regulation S-T during the preceding 12 months (or
for such shorter period that the registrant was required to submit
and post such files). Yes ☐ No ☒
Indicate by check mark if there is no disclosure of delinquent
files in response to Item 405 of Regulation S-K is not contained in
this form, and no disclosure will be contained, to the best of
registrant’s knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. ☒
i
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer,
or a smaller reporting company. See the definitions of “large
accelerated filer”, “accelerated filer” and “smaller reporting
company” in Rule 12b-2 of the Exchange Act.
|
Large accelerated filer ☐
|
Accelerated filer ☐
|
|
Non-accelerated filer ☒
|
Smaller reporting company ☒
|
|
|
Emerging growth company ☐
|
Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act). Yes
☐ No ☒
As of December 31, 2021, the aggregate market value of shares held
by non-affiliates (based on the closing price of $0.13 on that
date) was approximately $30,866,330.
State the number of shares outstanding of each of the issuer’s
classes of common equity, as of the latest practicable date.
Class Outstanding at October 12, 2022:
Common Stock, par value $0.0001 per share, 279,184,653
Documents incorporated by reference: None
ii
TABLE OF CONTENTS
iii
PART I.
FORWARD LOOKING STATEMENTS
THIS ANNUAL REPORT ON FORM 10-K 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.
ITEM 1. DESCRIPTION OF
BUSINESS.
THE COMPANY
(1) Form and year of organization
AS-IP Tech, Inc. (formerly ASI Entertainment, Inc.) was formed on
April 29, 1998 as a Delaware corporation. The Company has an
authorized capital of 500,000,000 shares of Common Stock, par value
of $0.0001 per share (the “Common Stock”) and 50,000,000 shares of
preferred stock, par value $0.0001 per share. All shares of Common
Stock have equal voting rights, are non-assessable, and have one
vote per share. The executive offices of the Company are located at
1/15 Castles Drive, Torquay, Victoria, 3228, Australia. The United
States offices of the Company are located at 100 Park Ave,
16th Floor, New York, NY
10017. The Company’s telephone number is +1 424-888-2212.
BUSINESS
(1) Principal products or services and their markets;
The Company’s intellectual property comprises two product lines
called fflya and BizjetMobile.
fflya
The
Company has launched a new standard in inflight connectivity for
Low-Cost Airlines (LCA’s). The justification is simple, LCA
passengers on a budget won’t pay for Wi-Fi.
The Company
achieved this via a proprietary disruptive technology, and business
model which has been validated by thousands of passengers inflight,
sending tens of thousands of messages on Wizz Air, and can be
summarised as follows:
Technical
·Core
revenue platform is messaging. Communication and social contact
drives everything.
·AS-IP’s
flight proven free messaging service, Email, SMS and WhatsApp are
embedded into an airlines existing booking app providing immediate
access to a huge database without app marketing costs.
·Eliminates
the high costs associated with conventional Wi-Fi installations by
creating an ultra-low-cost system and certification process, making
it simple and economical for an airline to install.
·Remotely
controls the passenger app interface by flight, to engage and
influence what passengers do and see while captive for 2-4
hours.
1
Business Model
·Use
Free messaging as the draw card to create revenue from paid
promotions in the app.
·Implement
a Social Network invite only approach to drive promotion before
passengers fly. Flight tests confirm inviting friends to chat
expands the database by a multiple of three.
·Create
virtual autonomous gateways that eliminate the conventional ISP
facilities required by Wi-Fi systems.
The
combination of these components is why after 16 years of inflight
Wi-Fi on major airlines, multibillion dollar organisations such as,
VIASAT/INMARSAT, UTELSAT and INTELSAT, are still unable to address
the LCA market, including the new Starlink (Elon Musk) Wi-Fi
service. On the ground, Starlink charges double the price of the
incumbent networks. With inflight Wi-Fi already expensive,
convincing airlines to switch to a faster service, with the control
the incumbents have over the existing 8,000 major airlines aircraft
will be a major challenge.
Regardless,
LCA passengers on a budget won’t pay for Wi-Fi, and this is clearly
understood by the major LCA’s in Europe, Wizz Air, Ryanair, Jet2
and EasyJet, who operate over 1,400 aircraft, leaving this unique
market opportunity to the Company and its proprietary
technology.
fflya provides airlines with a customized global inflight
connectivity approach, based on the latest mobile App technology,
narrowband satellite links and Bluetooth technology. The fflya
platform reduces the installation, certification, and equipment
costs by up to 95% compared to inflight broadband. In addition, it
uses a cloud-based messaging platform capable of delivering
real-time demographics.
Passengers get:
·Free
SMS, WhatsApp and Email, and they don’t need Wi-Fi to do
it.
Airlines get: -
·A
free satellite system.
·New
ancillary revenue streams.
·A
free real time, in-flight, fully verified credit card payment
platform for In-app and EFTPOS that will eliminates card default
problems.
·Live
feed telemetry data to enhance operation without data
charges.
The Company’s airline business model is based on a revenue sharing
basis. Revenue is generated from embedded advertising, E-Commerce,
live payment and destination sponsors.
BizjetMobile
BizjetMobile provides corporate jets with an alternative global
inflight connectivity solution and is marketed under the brand
names CrewX, CHiiMP and BizjetInternet. Each product is a mobile
App which deliver a combination of highly optimized inflight text,
chat, email, voice and internet for passengers and crew. The
on-board network comprises an integrated satellite transceiver
incorporating a Bluetooth hotspot that uses a set of algorithms and
file management protocols that are custom built for aviation
satellite networks. All communications are managed by a cloud-based
gateway and report by user, flight, aircraft, file, and message
type. As a result, passengers and crew receive unlimited inflight
connectivity for a flat low monthly rate.
The Company has commissioned over 110 BizjetMobile systems since
launch, operating across Asia Pacific, the America’s, Europe and
the Middle East.
Markets
fflya’s target market is primarily low cost airlines (“LCA”)
operating single aisle aircraft, for example, Boeing 737 and Airbus
A320, that struggle to justify equipping their fleets with
expensive Wi-Fi platforms as their business model targets
passengers who are unwilling to pay. Of the 18,000 commercial
airliners currently in operation, the B737/A320 series account for
13,000, of which approximately 75% are operated by regional
airlines and LCA’s. Single aisle aircraft represent 75% of the
35,000 new aircraft forecast to be delivered over the next 20
years.
BizjetMobile’s target market is the business aviation industry,
specifically international corporate jets searching for an
alternative low-cost global inflight connectivity solution or
an-add on service to reduce their operational costs.
2
(2) Distribution methods of the products or services;
BizjetMobile distributors are related parties controlled by the
Chapman family for the Americas, Europe and Asia Pacific, and
market the products on a commission basis.
fflya marketing is controlled by the Chapman family in conjunction
with agents, who will receive commissions from successful airline
programs.
(3) Status of any publicly announced new product or service;
fflya - Following 3
months of flight trials, the Company announced a final
agreement with Wizz Air to equip its UK fleet of nineteen A32X
series aircraft. The first aircraft is equipped and in operation
and further installations will commence in October.
More recently, the
Company successfully flight tested on Wizz Air, fflya’s
world’s first in flight Bluetooth payment solution incorporating
live in-app credit card payment. To demonstrate the capability, the
Company incorporated the Food and Boutique menu into the fflya
messaging app, allowing an order to be placed, paid for by credit
card and a receipt return to the app.
The fflya hardware, apps, gateway and support system are developed
and supplied by a related party, ASiQ Pty Ltd (ASiQ), under the IP
acquisition agreement and comprises, a router that connects
passengers via Bluetooth, and a revolutionary window antenna system
that connects to the Iridium satellite network. The Companycontracts the
service and hardware under commercial terms on a program-by-program
basis.
BizjetMobile – BizjetMobile LLC has announced the first corporate
aircraft test bed was equipped with the Bizjetinternet Certus
service, connecting via the new next generation Iridium
satellites.
(4) Competitive business conditions and the small business issuer’s
competitive position in the industry and methods of
competition;
Competition
Airlines
The landscape of the airline Wi-Fi market has changed over the past
18 months, due to the impact of Covid. Intelsat acquired GOGO’s
airline business, Eutelsat acquired GEE, VIASAT and INMARSAT have
proposed a merger.
New satellite operators, Starlink and OneWeb will compete with
these companies in 2023, proposing a faster service, however they
will face the same issue in that research shows that less than 10%
of passengers are prepared to pay for Wi-Fi, plus the incumbents
already control the market space with long term contracts. These
new satellite networks cost up to 3-4 time more than the incumbents
and their business models also rely on paying for Wi-Fi. As they
operate in the identical K-band transmission frequencies, the
equipment, installation and service cost will still be high. The
net effect is similar to migration from 4G versus 5G. The user gets
more data faster, but the price remains virtually the same.
The primary market for all these vendors is predominantly Tier 1
airlines and national flag carriers. These airlines provide
business travellers with an adequate level of internet connectivity
at a cost per flight similar to the daily rate of many 5-star
hotels. In some cases, first and business class passengers receive
this service free of charge.
Equipment, installation and certification costs on Wi-Fi platforms
are substantial and where possible, most airlines will exercise the
option to have it factory installed on new aircraft. Approximately
one third of the world’s airlines are equipped with inflight Wi-Fi,
the majority of which are either in the U.S.A or are long haul wide
body aircraft. Recent forecasts suggest that half of the world’s
airlines will be fully equipped by 2025.
The challenge for the Company to compete, is to target the
remaining market and create a platform and business model that
eliminates the financial risk, generates new revenue, enhances the
passenger experience, and removes the high operational/user costs
associated with heavy and expensive Wi-Fi platforms.
The Company meets these challenges by targeting only the LCA market
with a platform that is 95% lighter and cheaper and controlled by a
proprietary gateway protocol that is up to 95% more efficient in
delivering today’s
3
mobile App-based communications. This
creates the ability to deliver a sponsored free texting service and
generate new revenue from multiple inflight e-commerce
opportunities. AS-IP’s unique program targets LCA’s which represent
approximately 50% of the airline world, flying mainly Boeing B737
and Airbus A320 series aircraft and annually carry around 2 billion
disconnected leisure passengers.
fflya’s Bluetooth technology leverages off new generation Iridium
Low Earth Orbit satellites (LEO’s). As LEO’s operate 800 kilometres
above the earth, latency is similar to a mobile phone network.
Iridium Next LEOs offer a midband service so their low cost and low
latency is perfectly suited to connect fflya’s Bluetooth app-based
technology.
fflya is future proofed as it does not rely on the high cost of
broadband or Wi-Fi to deliver its services. There are three key
components that suit LCA’s: Text, Telemetry and Credit Card
Payment. All are delivered via short burst data which specifically
suits the fflya Bluetooth and Iridium data platforms.
The Company believes it will be able to compete with other
companies in the commercial airline field because of AS-IP’s very
low equipment costs, unique business model and little or no
certification issues.
Business
Jet
BizjetMobile is focused on the global market because of its use of
satellite communications. In the USA, the business jet market
is dominated GOGO Inc. (formally Aircell). GOGO’s system connects
passenger devices via Wi-Fi, having implemented an exclusive
terrestrial wireless radio network across the domestic United
States for transmission off the aircraft. GOGO has approximately
5,000+ domestic business jets connected to its system. A
second company, SmartSky Networks, is building a similar USA
terrestrial network to compete with GOGO.
Internationally GOGO has equipped a further 4,737 aircraft with the
Aircell (division of GOGO) Iridium satellite telephone systems.
These are legacy satellite systems that cannot deliver Internet.
The ChiiMP
system enhances the Iridium telephone with messaging services and
several BizjetMobile customers are connected via the Aircell
Iridium systems. GOGO is also an INMARSAT reseller and has equipped
several international aircraft with Wi-Fi. These systems are mainly
installed at factory on larger jets and range in price from $150K -
$650K. A second company VIASAT, also competes for the large jets
with a similar $650K international solution.
Other non US business jet competition.
While there are multiple Iridium Telephone System resellers
globally and some with basic Iridium messaging capability, none can
match the capabilities of the BizjetMobile product range as
BizjetMobile is the leader in inflight Bluetooth connectivity.
(5) Sources and availability of raw materials and the names of
principal suppliers; amortization, engineering, marketing and
communication costs
The principal supplier of systems and services to the company is
ASiQ, controlled by Ron Chapman, the President of the Company. As
part of the original IP acquisition agreement, the Company was
required to secure the service of Ron Chapman. It is Ron and ASIQ’s
reputation in the aviation industry, that provides the credibility,
drives the direction, and creates the programs for the Company.
The Chapman family controls all marketing on behalf of the
Company.
(6) Dependence on one or a few major customers.
The Company will be dependent on its distribution network to market
the product to generate income from hardware sales and service fees
and its airline marketing partners to secure airline programs. The
timing and extent of that marketing will be dependent on the
resources and efforts of the Company, its distributors, and
partners.
(7) Patents, trademarks, licenses, franchises, concessions, royalty
agreements or labor contracts, including duration;
The Company originally acquired the application for an Australian
patent and received notification that the International Preliminary
Report on Patentability had been established. The Company filed
national phase patent applications in Australia, the United States,
China and European Union. In January 2010, the Company received the
Australian patent. In January 2012, the Company received the
Chinese patent. With the advent of Bluetooth
4
Smart, the technology and the Company’s
IP has advanced to a point where the patent was no longer relevant.
The Company subsequently decided to proceed no further with the
patents, as the technology is predominately software based and
protected by copyright.
(8) Need for any government approval of principal products or
services. If government approval is necessary and the small
business issuer has not yet received that approval, discuss the
status of the approval within the government approval process.
Installation and use of aircraft avionics in aircraft requires
prior certification and approval by the Federal Aviation
Administration (“FAA”) and equivalent regulatory authorities of
foreign governments on each aircraft type and for each airline,
although FAA approval is generally globally acceptable.
Normally the certification process begins with the installation of
the system on an aircraft after which it is certified by an
accredited engineer and organisation. The certification is then
applicable to similar aircraft types and modified for other
aircraft type. In countries other than the United States, the
equivalent aviation authority procedures will apply to the
certification of the system, but the United States FAA is generally
accepted by local certifying authorities throughout the world.
Prior to certification and approval, the manufacturer demonstrate
that the system has been designed and manufactured and complies
with the appropriate aviation standards. Historically, ASiQ has
followed the certification path of DO-160 for hardware and DO-178
for software. Following this step, the system must be installed on
an aircraft and tested, including a ground and flight test.
Due to Covid over the previous 12-month period, the Company’s
industrial partner ASiQ, was forced to take an alternative
approach. As AS-IP’s launch customer Wizz Air’s head office is in
Hungary, we selected one of their UK registered aircraft for the
flight trial. This enabled ASiQ to engage EU/UK aviation certified
companies to produce the engineering/certification package and
manufacture the certified installation kit.
ASiQ originally designed the business aircraft system to be is
installed as a “Portable Electronic Device” PED and as such, little
or no certification is required. The Company utilises the same
process for airlines, which will ultimately lead to a lower cost
certifiable platform.
As the App is installed on a mobile phone or tablet, which are
regarded as carry on devices and operated in “flight” or “offline”
mode, no aircraft certification is required however, in the
majority of cases the final approval for use in flight will be at
the discretion of the aircraft operator.
Finally, both programs’ Android and IOS Apps are based on a
Bluetooth network and Bluetooth has been tested and documented as
safe for use in aircraft, which simplifies the operator acceptance
process.
(9) Effect of existing or probable governmental regulations on the
business;
The company must maintain good standing, comply with applicable
local business licensing requirements, prepare and file periodic
reports under the Securities Exchange Act of 1934, as amended, and
comply with other applicable securities laws, rules and
regulations.
Existing or probable governmental regulations have not impacted
AS-IP’s operations except for the increased costs of compliance
with reporting obligations. These additional costs remain
consistent as long as the company continues as a reporting
corporation.
(10) Estimate of the amount spent during each of the last two
fiscal years on research and development activities, and if
applicable the extent to which the cost of such activities is borne
directly by customers;
The Company estimates over the last 2 years, it has expended in
excess of $500,000 on research and development, none of which has
been borne by the customers.
(11) Costs and effects of compliance with environmental laws
(federal, state and local); and
Not applicable
(12) Number of total employees and number of full time
employees.
5
The company does not have any employees, instead contracts the
Chief Financial Officer, as well as contracting marketing and
technical services as required.
ITEM 2.
DESCRIPTION OF PROPERTY.
The Company maintains its corporate administration office at 1/15
Castles Drive, Torquay, Victoria, 3228, Australia.
ITEM 3. LEGAL
PROCEEDINGS.
The Company is not a party to any litigation and management has no
knowledge of any threatened or pending litigation against the
Company.
ITEM 4. SUBMISSION
OF MATTERS TO A VOTE OF
SECURITY HOLDERS.
Not applicable.
6
PART II.
ITEM 5. MARKET
FOR COMMON EQUITY AND RELATED
STOCKHOLDERS MATTERS.
The Company has authorized capital of 500,000,000 shares of Common
Stock, $0.0001 par value, and 50,000,000 shares of preferred stock,
$0.0001 par value. All shares of Common Stock have equal voting
rights, are non-assessable, and have one vote per share. As of the
date hereof, the Company has 278,697,573 shares of Common Stock
issued and outstanding and no shares of Preferred Stock
outstanding.
Since March 2000, the Company’s Common Stock has been quoted on the
NASD OTC Bulletin Board and more recently, the OTCPK. Prior to that
date, there was no public market for the Company’s securities. The
following table sets out the range of the high and low sales prices
for the Company’s securities.
|
|
Common Stock
|
|
Quarter Ended
|
High
|
Low
|
|
June 30, 2020
|
$0.02
|
$0.01
|
|
September 30, 2020
|
$0.01
|
$0.10
|
|
December 31, 2020
|
$0.10
|
$0.05
|
|
March 31, 2021
|
$0.23
|
$0.08
|
|
June 30, 2021
|
$0.25
|
$0.14
|
|
September 30, 2021
|
$0.22
|
$0.07
|
|
December 31, 2021
|
$0.28
|
$0.08
|
|
March 31, 2022
|
$0.19
|
$0.08
|
|
June 30, 2022
|
$0.15
|
$0.06
|
The Company currently intends to retain substantially all of its
earnings, if any, to support the development of its business and
has no present intention of paying any dividends on its Common
Stock in the foreseeable future. Any future determination as to the
payment of dividends will be at the discretion of the Board, and
will depend on the Company’s financial condition, results of
operations and capital requirements, and such other factors as the
Board deems relevant.
ITEM 6. SELECTED
FINANCIAL DATA.
Not required for a smaller reporting company.
ITEM 7.
MANAGEMENT’S DISCUSSION AND
ANALYSIS OR PLAN OF
OPERATION.
OVERVIEW
The
Company’s corporate structure is designed to facilitate investment
in owning aircraft systems and the IP, with the primary purpose of
controlling service cash flow and dictating revenue share in the
airline contracts.
The Company maintains a low-cost structure as it has no employees,
contracting the services of executives and support as required.
Because of the low-cost structure, the Company anticipates that the
proceeds from stock issues and revenue from service and system
sales, will be sufficient to meet the Company’s operating and
capital requirements for approximately 12 months.
RESULTS AND PLAN OF OPERATIONS
The Company had accumulated losses from inception to June 30, 2022
of $16,351,745. Major components
of the loss include capital raising costs, consulting and
management fees, engineering fees and operations costs. The Company
may be required to make significant additional expenditures in
connection with the development of the BizjetMobile and fflya
programs. The Company’s ability to continue its operations is
dependent upon its receiving funds through its anticipated sources
of financing including capital raisings, borrowings and revenues
from operations.
7
YEAR ENDED JUNE 30, 2022 COMPARED WITH YEAR ENDED JUNE 30, 2021
In the 2022 financial year, the Company’s programs were still
impacted by the Covid19 pandemic.
The Company received no revenue from its BizjetMobile business in
the year ended June 30, 2022, compared to BizjetMobile service fees
of $11,964 and BizjetMobile system sales $61,873, a total of
$73,837 in the year ended June 30, 2021.
Business jet system sales are now recovering, and revenue will
begin in the second half of 2022 on BizjetMobile in early 2023 on
fflya, once the initial fleet is equipped.
Operating expenses increased from $733,962 for the twelve-month
period ended June 30, 2021 to $1,280,966 for the twelve month
period ended June 30, 2022 due to increased marketing, engineering
and technical support costs and two years of unpaid directors
fees.
The Company recorded a net loss from operations for the
twelve-month period ended June 30, 2022 of $1,280,966, compared to
a loss of $660,125 for the twelve-month period ended June 30,
2021.
Other expenses increased from $710,703 in the year ended June 30,
2021, to $875,661 in the year ended June 30, 2022, due to higher
interest costs and loss on the issuance of shares for settlement of
liabilities but without a charge for amortization of beneficial
conversion feature.
The Company recorded a net loss for the twelve-month period ended
June 30, 2022 of $2,156,627, compared to a loss of $1,370,828 for
the twelve-month period ended June 30, 2021.
LIQUIDITY AND CAPITAL RESOURCES
The Company’s cash and cash equivalents cash equivalents decreased
from $157,601 at June 30, 2021 to $108,098 at June 30, 2022.
The Company’s revenue for the twelve months ended June 30, 2021 was
$0, compared to $73,837 in the twelve month period to June 30,
2021. Operating costs increased for the period from July 1, 2021 to
June 30, 2022 mainly as a result increased marketing and
engineering costs and directors fees. After loss on issuance of
shares on settlement of liabilities, increased related party
payables and issuance of shares for related party payables, the
Company had a net cash outflow of $1,119,622 from operating
activities for the period from July 1, 2021 to June 30, 2022,
compared to a net cash outflow from operating activities of
$417,053 for the period from July 1, 2020 to June 30, 2021.
The Company had no cash flow from investing activities for the
twelve months ended June 30, 2022, and June 30, 2021
respectively.
The cash flow of the Company from financing activities for the
twelve months ending June 30, 2022 was from the issue of common
stock and shares issued in lieu of interest. In the twelve months
ended June 30, 2021, financing activities was from issue of common
stock and proceeds from loans.
The Company’s business plan is focused on expansion into the
airline business with its fflya program. This plan may require
significant capital from the Company for marketing and technical
and product support. The Company may not have sufficient funds to
finance its operations in which case it will have to seek
additional capital. The Company may raise additional capital by the
sale of its equity securities, through an offering of debt
securities, or from borrowings. The Company does not have a policy
on the amount of borrowing or debt that the Company can incur.
The Company has no commitment for capital expenditure in the near
future.
OUTLOOK
The following are forward looking statements and should be read in
conjunction with the Forward Looking Statement in Part I. of this
Form 10-K.
8
The Company previously contracted ASiQ to supply and support the
Bizjet program. Covid impacted the Bizjet market grounding all
aircraft, and also ASiQ, the Company’s industrial partner.
In order to retain the services of Ron Chapman and ASiQ and
continue to support the Companies fflya program. Effective July
1st 2022, the Company is
renegotiating the agreement with ASiQ in regard to the
programs.
ASiQ provides the airline facilities, systems and support services
funded as required on a nominal month by month basis by the
Company.
The Company’s primary focus over the past 12 months has been
development of fflya to support its Wizz Air program.
The company’s fflya business model is based on offering free
messaging to be paid for by general and destination specific
advertising and E-commerce. Under the fflya program, an airline
will receive the system on a revenue share basis on terms to be
agreed. As the equipment cost is a fraction of a Wi-Fi platform,
the Company needs minimal commissions to justify the cost of the
hardware. The Company believes LCA’s will be attracted to this
business model.
REVENUE RECOGNITION
The Company recognizes revenue from the sales of goods and services
under ASC 606 by applying the following steps: (1) identify the
contract with a customer; (2) identify the performance obligations
in the contract; (3) determine the transaction price; (4) allocate
the transaction price to each performance obligation in the
contract; and (5) recognize revenue when each performance
obligation is satisfied. .Revenue is recognised on the basis
of net proceeds received from the Company’s representatives, after
commissions are deducted.
GOING CONCERN
The financial statements appearing elsewhere in this report have
been prepared assuming that the Company will continue as a going
concern. As such, they do not include adjustments relating to the
recoverability of recorded asset amounts and classification of
recorded assets and liabilities. The accompanying financial
statements have been prepared assuming that the Company will
continue as a going concern. The Company has suffered recurring
losses from operations that raise substantial doubt about its
ability to continue as a going concern. Management’s plans in
regard to these matters are described in Note 1 to the financial
statements. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
The Company’s ability to continue its operations is dependent upon
its raising of capital through debt or equity financing in order to
meet its working needs. These conditions raise substantial doubt
about the Company’s ability to continue as a going concern, and if
substantial additional funding is not acquired or alternative
sources developed, management will be required to curtail its
operations.
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 provide the opportunity for the Company
to continue as a going concern.
ITEM 7A.
QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET
RISK.
Not required for a smaller reporting company.
9
ITEM 8. FINANCIAL
STATEMENTS AND SUPPLEMENTARY
DATA.
AS-IP TECH, INC.
FINANCIAL STATEMENTS
TABLE OF CONTENTS
10
AS-IP TECH, INC.
STATEMENTS OF CASH FLOWS
|
|
For the years Ended June 30,
|
|
2022
|
|
2021
|
|
|
|
|
|
|
Cash flows from operating activities:
|
|
|
|
|
Net loss
|
$
|
(2,156,627)
|
|
$
|
(1,370,828)
|
|
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
|
|
146,718
|
|
|
6,716
|
|
Issuance of common stock for related party expenses
|
|
21,000
|
|
|
110,000
|
|
Issuance of common stock for interest
|
|
168,954
|
|
|
134,084
|
|
Loss on settlement of liabilities
|
|
400,685
|
|
|
304,520
|
|
Amortization of intangibles
|
|
-
|
|
|
13,737
|
|
Amortization of beneficial conversion feature
|
|
-
|
|
|
133,765
|
|
Changes in operating assets and liabilities
|
|
|
|
|
|
|
Increase (Decrease) in accounts payable
|
|
864
|
|
|
405
|
|
Increase (Decrease) in deferred revenue
|
|
-
|
|
|
(1,892)
|
|
Increase (Decrease) in related party payables
|
|
48,864
|
|
|
154,617
|
|
Increase (Decrease) in related party accrued interest
|
|
75,000
|
|
|
-
|
|
Decrease (Increase) in prepaid expenses
|
|
(25,000)
|
|
|
-
|
|
|
-
|
|
|
85,523
|
|
Net cash used in operating activities
|
|
(1,119,622)
|
|
|
(417,053)
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
Net cash used by investing activities
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
Proceeds from loans
|
|
28,586
|
|
|
325,000
|
|
Proceeds from issuance of common stock
|
|
866,857
|
|
|
240,696
|
|
Shares issued in lieu of interest
|
|
100,333
|
|
|
-
|
|
Funds received pending issuance of common stock
|
|
1,196
|
|
|
-
|
|
Cost of issue of warrants
|
|
73,147
|
|
|
-
|
|
Net cash provided by financing activities
|
|
1,070,119
|
|
|
565,696
|
|
|
|
|
|
|
|
|
Net Increase/(Decrease) in cash
|
|
(49,503)
|
|
|
148,643
|
|
Cash, beginning of period
|
|
157,601
|
|
|
8,958
|
|
Cash, end of period
|
$
|
108,098
|
|
$
|
157,601
|
|
|
|
|
|
|
|
|
Supplemental schedule of non-cash activities:
|
|
|
|
|
|
|
Cash paid for interest
|
$
|
-
|
|
$
|
-
|
|
Stock issued for funds received in prior period
|
$
|
-
|
|
$
|
361,758
|
|
Related party payables transferred to Loans - related parties
|
$
|
-
|
|
$
|
375,000
|
See
Accompanying Notes to Financial Statements.
F-5
AS-IP TECH, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES:
AS-IP Tech, Inc. (“AS-IP”, the “Company”) formerly ASI
Entertainment, Inc., was incorporated in the State of Delaware on
April 29, 1998. The Company owns intellectual property from which
two product lines called BizjetMobile and fflya have been
developed. The products deliver inflight connectivity for business
aviation (BizjetMobile) and commercial airlines (fflya)
respectively.
Basis of Presentation
The financial statements are prepared in accordance with accounting
principles generally accepted in the United States of America
(GAAP). The financial statements are expressed in United States
dollars. The Company’s fiscal year ends June 30.
Going Concern
The accompanying 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, among others, raise substantial doubt that
the Company will be unable to continue as a going concern.
The Company may raise additional capital through the sale of its
equity securities, through an offering of debt securities, or
through borrowings from financial institutions. The Company expects
to generate revenue in the future from the BizjetMobile and fflya
businesses from the sale of hardware and provision of on-going
services. Management believes that actions presently being taken to
obtain additional funding provide the opportunity for the Company
to continue as a going concern.
The financial statements do not include any adjustments relating to
the recoverability and classification of assets and/or liabilities
that might be necessary should the Company be unable to continue as
a going concern. The continuation as a going concern is dependent
upon the ability of the Company to meet our obligations on a timely
basis, and, ultimately to attain profitability.
Use of Estimates
The preparation of financial statements in conformity with GAAP
requires management to make estimates and assumptions that affect
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. Actual results could differ from those
estimates.
Cash and cash equivalents
The Company considers investments with an original maturity of
three months or less as cash equivalents.
Financial instruments
The Company has adopted the provisions of ASC Topic 820, Fair Value
Measurements, which defines fair value, establishes a framework for
measuring fair value in GAAP, and expands disclosures about fair
value measurements. ASC 820 provides a fair value hierarchy used to
classify the source of the information. The fair value hierarchy
distinguishes between assumptions based on market data (observable
inputs) and an entity’s own assumptions (unobservable inputs). The
hierarchy consists of three levels:
Level one - Quoted market prices in active markets for identical
assets or liabilities;
Level two - Inputs other than level one inputs that are either
directly or indirectly observable; and
Level three - Unobservable inputs developed using estimates and
assumptions, which are developed by the reporting entity and
reflect those assumptions that a market participant would use.
F-6
AS-IP TECH, INC.
NOTES TO FINANCIAL STATEMENTS
All of the Company’s financial instruments are level one and are
carried at fair value, requiring no adjustment to book value. The
financial instruments were deemed to qualify as that classification
because their value was determined by the price of identical
instruments traded on an active exchange.
Intangible Assets
In accordance with ASC 350, “Intangibles - Goodwill and Other”, we
classify intangible assets into three categories: (1) intangible
assets with definite lives subject to amortization; (2) intangible
assets with indefinite lives not subject to amortization; and (3)
goodwill. For intangible assets with definite lives, tests for
impairment must be performed if conditions exist that indicate the
carrying value may not be recoverable. For intangible assets with
indefinite lives and goodwill, tests for impairment must be
performed at least annually or more frequently if events or
circumstances indicate that assets might be impaired.
When facts and circumstances indicate that the carrying value of
intangible assets determined to have definite lives may not be
recoverable, management assesses the recoverability of the carrying
value by preparing estimates of future undiscounted cash flows. If
the sum of the expected future cash flows is less than the carrying
amount, we recognize an impairment loss. The impairment loss
recognized is the amount by which the carrying amount exceeds the
fair value which is estimated and calculated by discounted cash
flow method. The Company has determined that an impairment charge
is not required 2022 and 2021.
Income tax
The Company accounts for income taxes under FASB ASC 740 “Income
Taxes”. Deferred taxes are provided on a liability method whereby
deferred tax assets are recognized for deductible temporary
differences and operating loss carryforwards and deferred tax
liabilities are recognized for taxable temporary differences.
Temporary differences are the differences between the reported
amounts of assets and liabilities and their tax bases. Deferred tax
assets are reduced by a valuation allowance when, in the opinion of
management, it is more likely than not that some portion or all of
the deferred tax assets will not be realized. Deferred tax assets
and liabilities are adjusted for the effects of changes in tax laws
and rates on the date of enactment.
At June 30, 2022 the Company had net operating loss carryforwards
of $14,395,200. The deferred tax asset created by the U.S. net
operating losses has been offset by a 100% valuation allowance for
those with a 20 year life of $1,963,496 in 2022, compared to
$2,049,266 in 2021 and 100% allowance for those with an indefinite
life of $1,059,496 in 2022.
Share-based payments
The Company records stock based compensation in accordance with the
guidance in ASC Topic 718 which requires the Company to recognize
expenses related to the fair value of its employee stock option
awards. This eliminates accounting for share-based compensation
transactions using the intrinsic value and requires instead that
such transactions be accounted for using a fair-value-based method.
The Company recognizes the cost of all share-based awards on a
graded vesting basis over the vesting period of the award.
Stock Options and Warrants
We estimate the fair value of stock option awards and warrants on
the date of grant using the Black-Scholes-Merton pricing model,
which is affected by our stock price, as well as assumptions
regarding a number of complex and subjective variables. These
variables include our expected stock price volatility over the term
of the awards, risk free interest rates and expected dividends.
Earnings (Loss) Per Share
Net loss per common share is computed by dividing net loss by the
weighted average common shares outstanding during the period as
defined by FASB, ASC Topic 260, “Earnings per Share”. Basic
earnings per common share (“EPS”) calculations are determined by
dividing net income by the weighted average number of shares of
common stock outstanding during the year. Diluted earnings per
common share calculations are determined by dividing net income by
the weighted average number of common shares and dilutive common
share equivalents outstanding. During periods when common stock
equivalents, if any, are anti-dilutive they are not considered in
the computation.
F-7
AS-IP TECH, INC.
NOTES TO FINANCIAL STATEMENTS
Revenue recognition
The Company recognizes revenue share from the sales of goods and
services by related party distributors under ASC 606 by applying
the following steps: (1) identify the contract with a customer; (2)
identify the performance obligations in the contract; (3) determine
the transaction price; (4) allocate the transaction price to each
performance obligation in the contract; and (5) recognize revenue
when each performance obligation is satisfied. The Company
recognizes revenue net of direct costs, such as commissions.
The Company receives revenue share from sales by related party
distributors of products and services developed from the Company’s
intellectual property. Revenue is recognized on an accrual basis as
earned under contract or license agreements. Communication services
are provided on the basis of non refundable prepayment and revenue
is recognized using the output method. Hardware sales require
payment before delivery of the equipment.
Deferred revenue
The Company receives payment for services in advance before the
subscription service is provided. The company recognizes the
revenue as being earned as the services are provided. Deferred
revenue of $0 and $1,892 was recognized in the 2022 and 2021 years
respectively.
Reclassification
Certain amounts in the prior period presented, have been
reclassified to conform to the current period financial statement
presentation. These reclassification have no effect on previously
reported net income.
Recent Accounting Pronouncements
The company has evaluated the recent accounting pronouncements and
believes that none of them have a material effect on the Company’s
financial statements.
Beneficial Conversion Feature of Convertible Debt
In 2021, the Company accounted for convertible debt in accordance
with the guidelines established by FASB ASC 470-20, “Debt with
Conversion and Other Options”. In 2022, the Company has Rosen to
early adopt ASU 2020–06 and as a result, has reversed the balance
of the Beneficial Conversion Feature (“BCF”).
NOTE 2 - RELATED PARTY TRANSACTIONS
As of June 30, 2022 and 2021, the Company has recorded a current
liability “related parties payables” of $484,938 and $536,075
respectively. The main component 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. Interest accrued for the advance in the years ended June 30,
2022 and 2021 was $11,771 and $14,208. The loan and accumulated
interest will be repaid from surplus operating cash, when funds are
available. As of June 30, 2021, the Company settled part of the
Related party payables with long term convertible notes, net of
discount of $99,484. See Note 5 for further details.
As of June 30, 2022 and 2021, the Company had “due to related
parties” of $228,811 amounts due to the Company’s president, Ron
Chapman. The “due to related parties” balances are non-interest
bearing and unsecured. The Company does not impute interest expense
or recognize a discount on the face value of the notes.
In 2016, the Company acquired the BizjetMobile intellectual
property from an entity affiliated through common stockholders and
directors for $450,000. In 2022 and 2021, the Company provided $0
and $13,737 respectively for amortization of the value of the
intellectual property which has now been fully written off.
In 2022 and 2021, the Company recorded net revenue of $0 and
$61,873 respectively from entities affiliated through common
stockholders and directors for BizjetMobile system sales after
deduction of commission costs of $0 and $26,517 respectively.
In 2022 and 2021, the Company recorded revenue of $0 and $11,964
respectively from entities affiliated through common stockholders
and directors for BizjetMobile service fees after deduction of
commissions of $0 and $1,376 respectively.
F-8
AS-IP TECH, INC.
NOTES TO FINANCIAL STATEMENTS
In 2022 and 2021, the Company incurred expenses of $96,000 and
$48,752 respectively to entities affiliated through common
stockholders and directors for management expenses.
In 2022 and 2021, the Company incurred expense of $260,069 and
$331,000 to entities affiliated through common stockholders and
directors for marketing expenses. This includes fees of $96,000 and
$96,000 paid or accrued to the President, Ron Chapman in 2022 and
2021.
In 2022 and 2021, the Company incurred expense of $176,887 and
$106,863 for engineering services to entities considered related
parties affiliated through common shareholding.
In 2022 and 2021, the Company incurred expense of $154,000 and
$62,993 to entities affiliated through common stockholders and
directors for technical service support.
In 2022 and 2021, the Company incurred cost of sales, for
commissions of $0 and $27,894 to entities affiliated through common
stockholders and directors.
NOTE 3 - STOCKHOLDERS’ EQUITY
Common stock
The Company has authorized capital of 500,000,000 shares of common
stock with a par value of $0.0001.
During the year ended June 30, 2021, the Company issued a total of
40,591,400 shares for $405,914 cash at $0.01 per share.
During the year ended June 30, 2021, the Company issued a total of
1,000,000 shares for $12,000 cash at $0.012 per share.
During the year ended June 30, 2021, the Company issued a total of
11,435,999 shares for $171,540 cash at $0.015 per share.
During the year ended June 30, 2021, the Company issued a total of
650,000 shares for $13,000 cash at $0.02 per share.
During the year ended June 30, 2021, the Company issued a total of
545,994 shares for services valued at $6,716 at $0.0123 per
share.
During the year ended June 30, 2021, the Company issued 1,000,000
shares valued at $12,300 in lieu of directors fees, and issued
11,000,000 shares valued at $110,000 for services.
During the year ended June 30, 2021, the Company issued a total of
2,625,122 shares in lieu of interest of $134,084 and incurred a
loss of $285,750 on issue of the shares.
During the year ended June 30, 2021, the Company issued a total of
2,766,224 shares for $51,564 reduction of related party accounts
payable, but incurred a loss of $18,770 on issue of the shares.
During the year ended June 30, 2021, the Company issued a total of
1,422,389 shares from Subscriptions Payable at a nominal price of
$0.0184 per share.
During the year ended June 30, 2022, the Company issued a total of
8,668,876 shares for $866,888 cash at $0.10 per share.
During the year ended June 30, 2022, the Company issued a total of
2,478,537 shares in lieu of interest of $125,594 and incurred a
loss of $210,508 on issue of the shares.
During the year ended June 30, 2022, the Company issued 1,400,000
shares for services valued at $112,000 at $0.08 per share; 41,366
shares for services valued at $4,343 at $0.105 per share; and
225,000 shares for services valued at $30,375 as a share price of
$0.135.
F-9
AS-IP TECH, INC.
NOTES TO FINANCIAL STATEMENTS
During the year ended June 30, 2022, the Company issued a total of
150,000 shares for related party services valued at $21,000 at
$0.135 per share.
During the year ended June 30, 2022, the Company exercised its
rights under convertible notes and issued a total of 9,155,900
shares at the conversion price of $0.05 per share. The difference
between the conversion price and the then market price of $0.0223
cents per share was recorded as a loss on issue of $204,176.
During the year ended June 30, 2022, the company issued 1,428,000
of shares in lieu of directors fees at $0.14 per share.
As of June 30, 2022, the Company had 278,697,573 shares issued and
outstanding, and 50,000 shares in treasury. Treasury shares are
accounted for by the par value method.
Preferred stock
As of June 30, 2021, the Company had 50,000,000 shares of
authorized preferred stock, $0.0001 par value, with no shares
issued and outstanding.
Subscription for capital
As of June 30, 2022 and June 30, 2021, the Company had received
$1,196 and $0 respectively, representing funds received to purchase
the Company’s for which common stock was not issued until after the
related balance sheet date.
Stock Options and Warrants
During the year ended June 30, 2017, the Company issued stock
options to acquire 341,500 shares of the Company’s common stock at
a price of $0.10 per share. The term of the options is 5 years from
the date of issue. The options were issued in return for capital
raising services and the accounts reflect an option cost of
$7,360.
During the year ended June 30, 2022, the Company issued warrants to
acquire 2,000,000 shares of the Company’s common stock at a price
of $0.15 per share. The term of the options is 3.5 years from the
date of issue. The warrants were issued in return for capital
raising services and the accounts reflect a warrant cost of
$73,147.
|
|
Options/Warrants
Outstanding
|
Weighted
Average
Exercise Price
|
Weighted
Average
Remaining
Contractual Life
(Years)
|
Aggregated
Intrinsic Value
|
|
Outstanding at June 30, 2020
|
341,500
|
$0.10
|
1.17
|
$0
|
|
Granted
|
-
|
-
|
|
|
|
Exercised
|
-
|
-
|
|
|
|
Expired
|
-
|
-
|
|
|
|
Forfeited
|
-
|
-
|
|
|
|
Outstanding at June 30, 2021
|
341,500
|
$0.10
|
0.17
|
$0
|
|
Granted
|
-
|
-
|
|
|
|
Exercised
|
-
|
-
|
|
|
|
Expired
|
-
|
-
|
|
|
|
Forfeited
|
-
|
-
|
|
|
|
Outstanding at June 30, 2022
|
2,000,000
|
$0.15
|
3.5
|
$0
|
|
Granted
|
-
|
-
|
|
|
|
Exercised
|
-
|
-
|
|
|
|
Expired
|
341,500
|
-
|
|
|
|
Forfeited
|
-
|
-
|
|
|
F-10
AS-IP TECH, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 4 - INTANGIBLE ASSETS
In the year ended June 30, 2016, the Company took up Intangible
Assets of $450,000 which represented the termination fee negotiated
with the licensee of the Company’s technology. In the year ended
June 30, 2018, the Company took up an impairment charge of $113,832
to reflect a lower value of the technology. On the basis that the
technology has a useful life of 5 years, and that the Company had
taken up amortization to that date of $240,000, the Company
provided for amortization of $0 and $13,737 in the years ended June
30, 2022 and 2021 respectively. The intangible asset has now been
fully amortized.
NOTE 5 - LOANS
Unsecured loans
The Company has an unsecured loan from a third party with balance
outstanding at June 30, 2022 of $36,601 (June 30, 2021 $30,016).
Interest is calculated at a rate of 20% per annum with interest of
$6,584 and $5,327 taken up in the years ended June 30, 2022 and
2021 respectively. The Company is making principal and interest
payments for the loan when funds are available.
The Company has outstanding unsecured loans from shareholders
totalling $10,000 at June 30, 2022 and $10,000 at June 30, 2021.
The terms of the loans, originally totalling $70,295, 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. At June
30, 2022 and 2021, the Company had accumulated interest on the
loans of $0 and $10,005 calculated at the Company’s prevailing
share price. The interest will be converted, in due course, by the
issue of shares of common stock. The lenders for $60,795 have
agreed, effective June 30, 2021 to switch their loans to
convertible notes.
Convertible notes
The Company has convertible notes totalling $1,537,585 and
$1,624,586 as of June 30, 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 year
ended June 30, 2021, the Company took up an amortization expense of
$133,765 against the beneficial conversion feature. In the year
ended June 30, 2022, the Company has elected to early adopt ASU
2020–06 that recombined instruments into a single liability
instrument and do not separately present in equity and in bedded
beneficial conversion feature from the convertible notes.
Convertible notes outstanding as of June 30, 2022 and 2021 are
summarized below:
|
Details
|
Maturity
Date
|
Balance at
June 30,
2022
|
Balance at
June 30,
2021
|
|
20%
Convertible Notes totalling $337,500 plus accrued interest
|
Dec.
31,2023
|
$
659,293
|
$
540,653
|
|
20%
Convertible Notes totalling $247,500 plus accrued interest
|
Dec.
31,2023
|
31,126
|
271,875
|
|
20%
Convertible Notes totalling $200,000 plus accrued interest
|
Dec.
31,2023
|
259,666
|
212,939
|
|
20%
Convertible Notes totalling $125,000 plus accrued interest
|
Dec.
31,2023
|
0
|
126,326
|
|
20%
Related party Convertible Notes totalling $375,000 plus accrued
interest
|
Dec.
31,2023
|
487,500
|
412,500
|
|
0%
Convertible Notes totalling $100,000
|
|
100,000
|
0
|
|
Total convertible notes
|
|
1,537,585
|
1,624,588
|
|
Less Unamortized discounts
|
|
0
|
(1,003,630)
|
|
Net
convertible notes
|
|
$
1,537,585
|
$
620,958
|
In 2018, the Company issued Convertible Notes which totalled
$607,500, to fund the development of its fflya systems. 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. Two issues of
Convertible Notes were made as follows:
The first Convertible Note for $337,500. Terms of the issue
are:
-Interest rate: 20% per annum.
F-11
AS-IP TECH, INC.
NOTES TO FINANCIAL STATEMENTS
-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, 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.
$225,000 of these Notes were converted to shares at June 30,
2022.
Two Convertible Notes for $200,000 were issued in March 2021. 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: $0.05 per share
-Maturity date: December 31, 2023.
These notes were converted to shares at June 30, 2022.
Convertible Notes totalling $60,295, were issued to replace the
loans detailed in Note 5. 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.
These notes were converted to shares at June 30, 2022.
In July 2021 Convertible Notes totalling $25,000 were issued 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.
These notes were converted to shares at June 30, 2022.
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
In June 2022, $100,000 of related party debt was switched to two
Convertible Notes, as follows:
-Interest rate: 0% per annum
-Conversion price: $0.015 per share
-Maturity date: December 31, 2023
NOTE 6 - RISKS & UNCERTAINTIES
Impact from the New Coronavirus Global Pandemic (“COVID-19”) -
COVID-19 could continue to have a material and adverse effect on
the Company’s business operations. These could include disruptions
or restrictions on the Company’s ability to distribute its
products, as well as temporary closures of its facilities or the
facilities of the suppliers or customers. Any disruption or delay
of the Company’s suppliers or customers would likely impact the
Company’s sales and operating results. In addition, COVID-19 has
resulted in a widespread health crisis that could adversely affect
global economies and financial markets, resulting in an economic
downturn that could significantly impact our operating results.
As the Company’s revenue is also derived from related party
distributors. Any disruption to the business of the distributor
will impact the Company’s sales and operating results.
F-12
AS-IP TECH, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 7 - SIGNIFICANT SUBSEQUENT EVENTS
Since June 30, 2022, the Company has continued to raise capital to
fund its operations through sale of shares totalling 475,080 shares
for $34,728, up to the date of this report.
F-13
ITEM 9. CHANGES
IN AND DISAGREEMENTS WITH
ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
None
ITEM 9A. CONTROLS
AND PROCEDURES.
(a) Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to
ensure that information required to be disclosed in our Securities
Exchange Act of 1934 reports are recorded, processed, summarized
and reported within the time periods specified in the SEC’s rules
and forms, and that such information is accumulated and
communicated to our management, including our President and Chief
Financial Officer, as appropriate, to allow timely decisions
regarding required disclosure.
Our President and Chief Financial Officer evaluated the
effectiveness of our disclosure controls and procedures (as defined
in Rules 13a-15(C) and under the Securities Exchange Act of 1934,
as amended (the “Exchange Act”), as of June 30, 2022.
Based on this evaluation, the President and Chief Financial Officer
concluded that our disclosure controls and procedures are not
effective to ensure that information required to be disclosed by us
in reports that are filed or submitted under the Exchange Act
recorded, processed, summarized and reported within the time
periods specified in Securities and Exchange Commission rules and
forms.
(b) Management’s Annual Report on Internal Control over Financial
Reporting
As of June 30, 2022, management performed, with the participation
of our President and Chief Financial Officer, an evaluation of the
effectiveness of our disclosure controls and procedures as defined
in Rules 13a-15 (e) and 15c-15 (e) of the Exchange Act. Our
Disclosure controls and procedures controls and procedures are
designed to ensure that information required to be disclosed in the
report we file or submit under the Exchange Act is recorded,
processed, summarized and reported within the time periods
specified in the SEC’s forms, and that such information is
accumulated and communicated to our management including our
President and Chief Financial Officer, to allow timely decisions
regarding required disclosures. Based on the evaluation, our
President and Chief Financial Officer concluded that, our
disclosure controls and procedures over financial reporting as of
June 30, 2022, were not effective due to material weaknesses
resulting from our lack of US GAAP knowledge and segregation of
duties.
The Company’s management is responsible for establishing and
maintaining adequate internal control over financial reporting (as
defined in Rules 13a- 15(f) and 15d-15(f) under Exchange Act). The
Company’s internal control over financial reporting is a process
designed to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial policies
and procedures that:
·pertain
to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of
our assets;
·provide
reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with GAAP,
and that receipts and expenditures of our Company are being made
only in accordance with authorizations of our management and
directors; and
·provide
reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of our assets that
could have a material effect on the financial statements.
Because of its inherent limitations, internal control over
financial reporting may not prevent or detect misstatements. Also
projections of any evaluation of effectiveness to future periods
are subject to the risk that controls may become inadequate because
of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate. Under the supervision and
with the participation of our management, the Company assessed the
effectiveness of the internal control over financial reporting as
of June 30, 2022. In making this assessment, we used the criteria
set forth in Internal Control-Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission
(COSO 2013). Based on the results of this assessment and on those
criteria the Company concluded that the internal controls over
financial reporting as of June 30, 2022 were not effective.
11
This annual report does not include any attestation report of the
company’s registered public accounting firm regarding internal
controls over financial reporting. Management’s report was not
subject to attestation by the Company’s registered public
accounting firm pursuant to temporary rules of the Securities and
Exchange Commission that permit the Company to provide only
management’s report in this annual report.
(c) Changes in Internal Controls over Financial Reporting
None
12
PART III
ITEM 10.
DIRECTORS, EXECUTIVE OFFICERS,
PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(A) OF
THE EXCHANGE ACT.
The officers and directors of the Company are as follows:
|
Name:
|
Title:
|
|
Ronald J. Chapman
|
Chairman, President and Director
|
|
Graham O. Chappell
|
Director
|
|
Philip A. Shiels
|
Chief Financial Officer and Director
|
All directors of the Company hold office until the next annual
meeting of shareholders or until their successors are elected and
qualified. At present, the Company’s Bylaws provide for not less
than one, nor more than seven directors. Currently, there are three
directors of the Company. The Bylaws permit the Board of Directors
to fill any vacancy and such director may serve until the next
annual meeting of shareholders or until his successor is elected
and qualified. Officers serve at the discretion of the Board of
Directors.
The principal occupation and business experience for each officer
and director of the Company, for at least the last five years are
as follows:
RONALD J. CHAPMAN, 70, serves as President and a director of the
Company. Commencing in 1985, Mr. Chapman founded and remains the
managing director of ASI Holdings Pty. Ltd. and ASiQ Ltd. Since
inception, Mr. Chapman has overseen the product development and
coordinated the marketing for ASiQ. Mr. Chapman is also managing
director and the beneficial owner of 100% of Chapman International
Pty Ltd., which is a shareholder of the Company through its
shareholding in ASI Technologies Pty. Ltd.
GRAHAM O. CHAPPELL, 77, has been a director of the Company since
its inception. Mr. Chappell has worked in the aerospace industry
for 30 years. Since 1985, Mr. Chappell has operated as the
principal of Chappell Salikin Weil Associates Pty. Ltd. (“Chappell
Salikin”), Victoria, Australia, a private aerospace, technology and
defence industries consultancy company. Mr. Chappell obtained a
Diploma of Aeronautical Engineering degree from the Royal Melbourne
Institute of Technology in 1968 and a Masters of Science (Air
Transport Engineering) from Cranfield University in 1974.
PHILIP A. SHIELS, 70, has been a director of the Company since its
inception. From 1992 to the present, Mr. Shiels has operated Shiels
& Co., Victoria, Australia, a private consulting practice
providing management and corporate advisory services. Shiels &
Co. has served as a consultant to the Company since
inception. Mr. Shiels received a Bachelor of Business (Accountancy)
Degree from the RMIT University in 1976 and has been a Member of
Chartered Accountants Australia & New Zealand since 1978.
ITEM 11. EXECUTIVE
COMPENSATION.
The Company has not entered into any employment agreements with its
executive officers or directors nor has it obtained any key-man
life insurance.
Each director is entitled to receive reasonable expenses incurred
in attending meetings of the Board of Directors of the Company. The
members of the Board of Directors intend to meet at least quarterly
during the Company’s fiscal year, and at such other times duly
called. The Company presently has three directors.
The following table sets forth the total compensation paid or
accrued by the Company on behalf of the Chief Executive Officer and
Chief Financial Officer of the Company during 2021 and 2022. No
other officer of the Company received a salary and bonus in excess
of $100,000 for services rendered during the fiscal year ended June
30, 2022:
13
SUMMARY COMPENSATION TABLE
|
NAME AND
PRINCIPAL POSITION
|
FISCAL
YEAR
|
ANNUAL
SALARY
|
COMPENSATION
BONUS/AWARDS
|
OTHER
COMPENSATION
ALL OTHER
|
|
Ronald Chapman,
President
|
2022
2021
|
-
-
|
$
96,000(1)
$
96,000(1)
|
$
49,980(3)
$
55,000
|
|
Philip Shiels,
Chief Financial Officer
|
2022
2021
|
-
-
|
$
96,000(2)
$
48,752(2)
|
$
49,980(3)
--$
-
|
|
Graham Chappell,
Director
|
2022
2021
|
-
-
|
$
21,000
$
-
|
$
49,980(3)
$
6,000(3)
|
|
Richard Lukso,
Former Chairman
|
2022
2021
|
-
-
|
-$
-
-$
-
|
$
49,980(3)
$
6,000(3)
|
(1) Marketing fee, paid or accrued
(2) Officers management fee, paid or accrued
(3) Directors’ fees satisfied with share issue
ITEM 12. SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT.
The following table sets forth certain information as of the date
of this Report regarding the beneficial ownership of the Company’s
Common Stock by each officer and director of the Company and by
each person who owns in excess of five percent of the Company’s
Common Stock giving effect to the exercise of warrants or options
held by the named security holder.
|
Name, Position and
Address
|
Shares of Common
Stock Beneficially Owned
|
Percentage of
Shares Owned
|
|
Ronald J. Chapman (2)
Chairmen, President and director
1
Bass Drive,
Torquay, Vic., 3228
Australia
|
18,973,336
|
6.8%
|
|
Graham O. Chappell (3)
Director
5
Marine Parade, Suite 2
St.
Kilda, Vic., 3148,
Australia
|
3,271,406
|
1.3%
|
|
Philip A. Shiels (4)
Chief Financial Officer and director
88
Elgin Street
Hawthorn, Vic., 3122
Australia
|
18,805,522
|
6.7%
|
|
Roman Lohyn (5)
5
Rothesay Avenue
Brighton Vic., 3186
Australia
|
25,580,840
|
9.2%
|
|
Eric P. van der Griend (6)
100 Barkly St
St Kilda, Vic., 3182
Australia
|
14,157,639
|
5.1%
|
|
Reginald Edward Gleeson (7)
57
Black St.
Brighton Vic., 3186
Australia
|
16,981,532
|
6.1%
|
|
All
the officers and directors
as a group (3 persons)
|
41,407,264
|
14.9%
|
(1) Assumes 278,697,573 shares of Common Stock issued and
outstanding.
14
(2) Ronald J. Chapman, President and a director of the
Company, owns 125,006 shares directly. Mr. Chapman is the managing
director (president) and majority shareholder of Chapman
International Pty. Ltd. holds 6,307,000 shares and is the
controlling shareholder of ASIT Australia through which Mr. Chapman
is the beneficial owner of 266,575 shares. Mr. Chapman holds the
power of attorney for the trustee of the Research No.1 Trust which
holds 9,774,755 Shares. Mr. Chapman is a trustee and a beneficiary
of the Madanosaj Superannuation Fund which holds 2,500,000
shares.
(3) Graham O. Chappell, a director of the Company, is the
managing director (president) and sole shareholder of Chappell
Salikin Weil Associates Pty. Ltd. and is considered the beneficial
owner of the 788,006 Shares. Mr. Chappell is the sole shareholder
of International Aviation Services Pty. Ltd. which owns 43,400
shares of which Mr. Chappell is considered the beneficial owner.
Mr. Chappell is a trustee and a beneficiary of the Chappell Salikin
Weil Associates Pty. Ltd. Staff Superannuation Fund which holds
2,797,000 shares.
(4) Philip A. Shiels, Chief Financial Officer and a director
of the Company, holds the power of attorney for the trustee of the
Research No. 2 Trust which holds 3,198,522 Shares. Mr. Shiels is a
trustee and a beneficiary of the Shiels Superannuation Fund which
holds 8,250,000 shares. Mr. Shiels is a trustee and a beneficiary
of The Shiels Trust which holds 7,357,000 shares.
(5) Roman Lohyn is a trustee of Mostyn Superannuation Fund
which owns 25,460,840 shares, and a director of Sorcerer Pty. Ltd.
which owns 120,000 shares.
(6) Eric P. van der Griend is a director and shareholder of
Ocean View Investment Pty. Ltd. which owns 13,888,889 shares and a
director and shareholder of Swiss Time Australia Pty. Ltd. which
owns 268,750 shares. Mr. van der Griend is considered the
beneficial owner of 14,157,639 shares.
(7) Reginald Edward Gleeson is a trustee of Regsher Pty. Ltd.
Superannuation Fund which owns 16,981,532 shares.
ITEM 13. CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
AND DIRECTOR INDEPENDENCE.
Ron Chapman, Graham Chappell, and Philip Shiels are directors of
the Company and directors of the Company’s former subsidiary ASiQ
Pty. Ltd. (“ASiQ”).
ASiQ provides technical support for the Company’s business jet
program, and in the year ended June 30, 2022, received a monthly
retainer plus outgoings.
Chapman International Pty. Ltd., of which Ron Chapman is a director
and shareholder, was paid marketing fees during the year ended June
30, 2022.
Shiels and Co., of which Philip Shiels is the principal, was paid
management fees during the year ended June 30, 2022.
BizjetMobile LLC, the North and South American distributor for
BizjetMobile services and systems, is 50% owned by ASiQ.
Barry Chapman, the European and Middle East distributor for
BizjetMobile services and systems, is related to Ron Chapman.
Since June 30, 2017, the Company entered into a license agreement
with ASiQ, under which the Company granted ASiQ the right to
develop, manufacture, market and commercialize the Company’s
intellectual property for global military and government
applications.
ITEM 14. PRINCIPAL
ACCOUNTANT FEES AND SERVICES
AUDIT FEES
Audit fees paid to B F Borgers in the fiscal year ended June 30,
2021 and June 30, 2022 were $33,500 and $33,500 respectively.
15
AUDIT-RELATED FEES
There were no fees billed for services reasonably related to the
performances of the audit or review of our financial statements
other than those disclosed under the caption Audit Fees for fiscal
years 2021 and 2022.
TAX FEES
No fees have been paid for income tax return preparation.
ALL OTHER FEES
There were no other fees filled for services.
ITEM 15. EXHIBITS
AND FINANCIAL STATEMENT
SCHEDULES
(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)
|
16
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned thereunto
duly authorized.
AS-IP TECH, INC.
Dated: October 12, 2022
By: /s/
Ronald J. Chapman
President
By: /s/
Philip A. Shiels
Principal Financial Officer
Pursuant to the Securities Exchange Act of 1934, this report has
been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
|
Signature
|
Title
|
Date
|
|
|
|
|
|
/s/ Ronald J.
Chapman
|
Chairman and Director
|
October 12, 2022
|
|
Ronald J. Chapman
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Graham O.
Chappell
|
Director
|
October 12, 2022
|
|
Graham O. Chappell
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Philip A.
Shiels
|
Director
|
October 12, 2022
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Philip A. Shiels
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17