Kyto Biopharma Inc

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Kyto Technology and Life Science : & LIFE SCIENCE, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATION (form 10-K)

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05/16/2019 | 08:04 pm

(A) PLAN OF OPERATION & LIQUIDITY



The Company has not been profitable and since its inception in March 1999 has
had no revenue until the current fiscal year. In April, 2018, the Board adopted
a new business plan focussed on the development of early stage technology and
life science businesses through a combination of small investment funding and a
range of technical and advisory business services. In order to fund the new
business plan, the Company converted $320,000 of related party debt and accrued
liabilities and raised $1,770,000 in cash from the sale of investment units
under the terms of a private placement offered to accredited investors.



The Company has created a portfolio of minority investments in early-stage
start-up companies and derives its revenue opportunity from the sale of those
investments. Such sales are outside its control and depend on M&A transactions
which may result in cash or equity proceeds. The Company currently has $388,000
in the bank and expects to secure an additional $300,000 within the next two
months as a final call on sales of Series A Preferred stock units, as the
marketing of a $3 million higher-valued Series B round is commenced with a
target close date of October 2019. The average monthly expenses for the year
ended March 31, 2019 were $22,000 per month so the Company has sufficient cash
to fund its operations for the remainder of its financial year ended March 31,
2020
if it simply manages its existing investments. However, it plans to ramp up
monthly expenditure to an average of $48,000 per month to market and ensure the
success of the Series B round, whereupon, if successful it will have sufficient
funding for further investments and ongoing operations. In the event that the
Series B close is delayed, management has two viable alternative options to
ensure continuity of liquidity and ongoing operations: the ability to slow down
expenditure or defer future investment opportunities to balance its cash flow
accordingly.






(B) RESULTS OF OPERATIONS




Revenue: The Company depends on the emergence of liquidity situations to realize
its investments in portfolio companies but does not have any ability to
influence such events. During the year ended March 31, 2019 there were no
liquidation transactions and accordingly the Company did not generate any
revenue from investments. The Company also provides advisory services to certain
of its portfolio companies and during the year ended March 31, 2019, the Company
recognized $9,000 revenue from advisory fees.



General and Administration expenses: General and administration expenses include
professional fees incurred in the course of SEC filing and compliance, and
travel and conference fees associated with fund raising and review of investment
deal-flow. The Company incurred expenses of $239,082 and $90,827 in the years
ended March 31, 2019 and 2018, respectively. The increase of 163% reflects the
increased level of new business activity as the Company raised funding from
private placements, and researched and evaluated investment candidates during
the year ended March 31, 2019.



For the years ended March 31, 2019 and 2019, the Company's net loss was $230,107
and $90,827, respectively.



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(C) LIQUIDITY AND CAPITAL RESOURCES






Working capital:




The Company had a working capital surplus of $65,684 at March 31, 2019 and a
working capital deficit of $(316,956) as of March 31, 2018. Cash was $93,634 and
$4 as of March 31, 2019 and 2018, respectively.



Cash from operating activities:



The Company's cash outflow from operations for the years ended March 31, 2019
and 2018 was $205,225 and $31,319, respectively.



Cash from financing activities:



The Company's net cash flow from financing activities for the years ended March
31, 2019
and 2018 was $1,796,903 and $31,323, respectively. During the year
ended March 31, 2019, the Company raised $1,770,000 from private placements of
preferred investment units from accredited investors.



The Company has adopted a new business plan to assist early stage technology and
life science companies by leveraging its network of experienced industry
specialists to provide a combination of professional advisory services and
investment, and thereby accelerate their development.



(D) OFF-BALANCE SHEET ARRANGEMENT



None.

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