Company Quick10K Filing
Advanced Oxygen Technologies
Price0.07 EPS-0
Shares3 P/E-2
MCap0 P/FCF12
Net Debt-0 EBIT-0
TEV0 TEV/EBIT-2
TTM 2019-09-30, in MM, except price, ratios
10-Q 2020-03-31 Filed 2020-04-17
10-Q 2019-12-31 Filed 2020-01-27
10-Q 2019-09-30 Filed 2019-11-12
10-K 2019-06-30 Filed 2019-08-16
10-Q 2019-03-31 Filed 2019-04-17
10-Q 2018-12-31 Filed 2019-01-16
10-Q 2018-09-30 Filed 2018-10-17
10-K 2018-06-30 Filed 2018-09-26
10-Q 2018-03-31 Filed 2018-05-08
10-Q 2017-12-31 Filed 2018-02-05
10-Q 2017-09-30 Filed 2017-10-30
10-K 2017-06-30 Filed 2017-09-27
10-Q 2017-03-31 Filed 2017-05-08
10-Q 2016-12-31 Filed 2017-02-06
10-Q 2016-09-30 Filed 2016-11-14
10-K 2016-06-30 Filed 2016-10-19
10-Q 2016-03-31 Filed 2016-05-09
10-Q 2015-12-31 Filed 2016-02-09
10-Q 2015-09-30 Filed 2015-11-06
10-K 2015-06-30 Filed 2015-09-29
10-Q 2015-03-31 Filed 2015-05-07
10-Q 2014-12-31 Filed 2015-02-09
10-Q 2014-09-30 Filed 2014-11-07
10-K 2014-06-30 Filed 2014-10-03
10-Q 2014-03-31 Filed 2014-05-14
10-Q 2013-12-31 Filed 2014-02-06
10-Q 2013-09-30 Filed 2013-11-06
10-K 2013-06-30 Filed 2013-10-10
10-Q 2013-03-31 Filed 2013-05-08
10-Q 2012-09-30 Filed 2012-11-07
10-K 2012-06-30 Filed 2012-10-01
10-Q 2012-03-31 Filed 2012-05-07
10-Q 2011-12-31 Filed 2012-02-08
10-Q 2011-09-30 Filed 2011-11-04
10-K 2011-06-30 Filed 2011-09-30
10-Q 2011-03-31 Filed 2011-05-09
10-Q 2010-12-31 Filed 2011-02-02
10-Q 2010-09-30 Filed 2010-11-05
10-K 2010-06-30 Filed 2010-09-23
10-Q 2010-03-31 Filed 2010-05-06
10-Q 2009-12-31 Filed 2010-02-08
8-K 2019-09-27 Sale of Shares, Officers

AOXY 10Q Quarterly Report

Part 1: Financial Information
Item 1: Condensed Consolidated Financial Statements for The Nine Months Ending March 31, 2020 (Unaudited).
Note 1 - Organization and Line of Business:
Note 2 - Summary of Significant Accounting Policies:
Note 3 - Revenue:
Note 4 - Land:
Note 5 - Related Party Transactions:
Note 6 - Notes Payable:
Note 7 - Shareholders' Equity:
Note 8 - Subsequent Events:
Item 2: Management's Discussion and Analysis or Plan of Operation.
Item 3. Quantitative and Qualitative Disclosures About Market Risk:
Item 4. Controls and Procedures
Part II
Item 1: Legal Proceedings
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Mine Safety Disclosures
Item 5. Other Information
Item 6: Exhibits and Reports on Form 8 - K
EX-31.1 e1869-31_1.htm
EX-31.2 e1869-31_2.htm
EX-32.1 e1869-32_1.htm
EX-32.2 e1869-32_2.htm

Advanced Oxygen Technologies Earnings 2020-03-31

Balance SheetIncome StatementCash Flow
70843056674442505828337214168602012201420172020
Assets, Equity
4518513638-17909-49456-81003-1125502012201420172020
Rev, G Profit, Net Income
227702515-17740-37995-58250-785052012201420172020
Ops, Inv, Fin

10-Q 1 e1869-10q.htm FORM 10-Q

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

 

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
   
  For the quarterly period ended: March 31, 2020
 
Or
   
¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
   
  For the transition period from: _____________ to _____________

 

ADVANCED OXYGEN TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)

 

Delaware   0-9951   91-1143622
(State or Other Jurisdiction   (Commission   (I.R.S. Employer
of Incorporation)   File Number)   Identification No.)

 

C/O Crossfield, Inc., 653 VT Route 12A, PO Box 189, Randolph, VT 05060

(Address of Principal Executive Offices) (Zip Code)

 

(212) 727-7085

(Registrant’s telephone number, including area code)

 

Title of Class   Trading Symbol   Name of each exchange on which registered
Common Stock, $0.01 Par Value   AOXY   OTC:PINK

 

 

Securities registered under Section 12(g) of the Exchange Act: Common Stock, par value $.01 per share

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨ No x

 

Indicate by check mark if the registrant is not required to file reports pursuant to section 13 or Section 15(d) of the Act. Yes ¨ No x

 

Indicate by check whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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 x No ¨

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

 

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”, “an accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

Large Accelerated Filer ¨ Accelerated Filer ¨
Non Accelerated Filer x Smaller Reporting Company x
Emerging Growth Company ¨    

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act. Check one: Yes ¨ No x

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the last practicable date: As of April 17, 2020, there were 3,292,945 issued and outstanding shares of the registrant’s Common Stock, $.01 par value.

 

Documents incorporated by reference: None.

 

 1 

 

  

ADVANCED OXYGEN TECHNOLOGIES, INC.

 

  INDEX   Page  
PART I      
       
Item 1: Financial Statements (unaudited)      
  Condensed Consolidated Balance Sheet as of March 31, 2020 (unaudited) and June 30, 2019     3  
  Condensed Consolidated Statement of Operations and Comprehensive (Loss) for the three and nine months ended March 31, 2020 and March 31, 2019 (unaudited)     4  
  Condensed Consolidated Statement of Stockholders' Equity for the three and nine months ended March 31, 2020 and March 31,2019(unaudited)        
  Condensed Consolidated Statement of Cash Flow for the nine months ended March 31, 2020 and March 31, 2019 (unaudited)     5  
  Notes to the Condensed Consolidated Financial Statements     6-13  
           
Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations     14  
Item 3: Quantitative and Qualitative Disclosures about Market Risk     15  
Item 4: Controls and Procedures     15  
           
PART II        
         
Item 1: Legal Proceedings     16  
Item 2: Unregistered Sales of Equity Securities and Use of Proceeds     16  
Item 3: Defaults Upon Senior Securities     16  
Item 4: Mine Safety Disclosures     16  
Item 5: Other Information     16  
Item 6. Exhibits and Reports on Form 8-K     16  
Signature     17  
EXHIBIT 31.1, 31.2 Certifications of Officers   EX 31  
EXHIBIT 32.1, 32.2 Certifications of Officers   EX 32  
EXHIBIT 101.INS XBRL Instance   EX 101.INS  
EXHIBIT 101.SCH XBRL Taxonomy Extension Schema Document   EX 101.SCH  
EXHIBIT 101.CAL XBRL Taxonomy Extension Calculation Document   EX 101.CAL  
EXHIBIT 101.DEF XBRL Taxonomy Extension Definition Document   EX 101.DEF  
EXHIBIT 101.LAB XBRL Taxonomy Extension Labels Document   EX 101.LAB  
EXHIBIT 101.PRE XBRL Taxonomy Extension Presentation Document   EX 101.PRE  

 

 2 

 

 

PART 1: FINANCIAL INFORMATION

 

Item 1: Condensed Consolidated Financial Statements for the nine months ending March 31, 2020 (unaudited).

 

ADVANCED OXYGEN TECHNOLOGIES, INC.

AND SUBSIDIARY

CONDENSED CONSOLIDATED BALANCE SHEETS

 

  

March 31,

2020

 

June 30,

2019

ASSETS   (Unaudited)      
           
CURRENT ASSETS          
Cash  $36,074   $43,098 
Property tax receivable   1,175    1,213 
Total Current Assets   37,249    44,311 
           
LONG TERM ASSETS          
Land   596,159    615,220 
TOTAL ASSETS  $633,408   $659,531 
           
LIABILITIES AND STOCKHOLDERS’ EQUITY          
           
CURRENT LIABILITIES          
Accounts payable  $250   $225 
Taxes payable   28,317    30,782 
Deferred revenue   3,082    —   
Advances from a related party   124,392    120,753 
Notes payable, current portion   143,842    144,380 
           
Total Current Liabilities   299,883    296,140 
           
TOTAL LONG-TERM LIABILITIES          
     Notes payable   47,760    62,464 
Long Term Liabilities   47,760    62,464 
           
TOTAL LIABILITIES   347,643    358,604 
           
STOCKHOLDERS’ EQUITY-          
Convertible preferred stock, Series 2, par value $0.01; authorized 10,000,000 shares; issued and outstanding 5,000 at March 31, 2020 and June 30, 2019   50    50 
Convertible preferred stock, Series 3, par value $0.01; authorized 1,670,000 shares; zero shares issued and outstanding   —      —   
Convertible preferred stock, Series 5; no par value, 1 share authorized, zero shares issued and outstanding, respectively.   —      —   
Common stock, par value $0.01; At March 31, 2020 and June 30, 2019, authorized 60,000,000 shares; issued and outstanding 3,292,945 shares and 2,292,945 shares.   32,929    22,929 
Additional paid-in capital   21,056,991    20,953,991 
Accumulated other comprehensive income   31,223    48,198 
Accumulated deficit   (20,835,428)   (20,724,241)
TOTAL STOCKHOLDERS EQUITY   285,765    300,927 
TOTAL LIABILITIES AND STOCKHOLDERS EQUITY  $633,408   $659,531 

 

See accompanying notes to condensed unaudited consolidated financial statements.

 

 3 

 

  

ADVANCED OXYGEN TECHNOLOGIES, INC.
AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE (LOSS)

(Unaudited)

 
   For the three months ended March 31,  For the nine months ended March 31,
   2020  2019  2020  2019
Revenues            
             
Real Estate Rentals  $9,326   $9,528   $27,936   $28,689 
                     
Total Revenues   9,326    9,528    27,936    28,689 
                     
Costs and Expenses                    
General & Administrative   498    1,316    7,671    4,492 
Professional expenses   2,747    2,500    11,247    11,000 
Salary and Wages   —      —      113,000    —   
Total Operating Expenses   3,245    3,816    131,918    15,492 
                     
Income (Loss) from operations   6,081    5,712    (103,982)   13,197 
Other income (expenses)                    
Interest Expense   (792)   (1,014)   (2,547)   (3,227)
 Income (loss) before Income Taxes   5,289    4,698    (106,529)   9,970 
                     
Income Taxes Benefit (expense)   1,113    5,536    4,658    5,345 
                     
NET INCOME (LOSS)  $4,176   $(838)  $(111,187)  $4,625 
                     
Weighted average number of common shares outstanding:                    
Basic   3,292,945    2,292,945    2,987,490    2,292,945 
Dilutive   3,302,945    2,292,945    2,987,490    2,302,945 
                     
Earnings per share:                    
Basic  $0.00   $(0.00)  $(0.04)  $0.00 
Dilutive  $0.00   $(0.00)  $(0.04)  $0.00 
                     
                     
OTHER COMPREHENSIVE LOSS                    
Foreign Currency Translation Adjustments  $(9,438)  $(11,166)  $(16,975)  $(22,086)
Total Comprehensive (Loss)  $(5,262)  $(12,004)  $(128,162)  $(17,461)
                     

 

See accompanying notes to condensed unaudited consolidated financial statements.

 

 4 

 

 

 

ADVANCED OXYGEN TECHNOLOGIES INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(unaudited)

Nine-Month Period Ending March 31, 2020 and 2019

       
                   
   Preferred Stock Convertible Series 2  Common
Stock
  Additional
Paid In
  Accumulated 

Accumulated

Other Comprehensive

  Total Stockholders'
   Shares  Amount  Shares  Amount  Capital  Deficit  Income  Equity
Balance at June 30, 2018   5,000    50    2,292,945    22,929    20,953,991    (20,732,352)   63,139    307,757 
Net Income                            4,625         4,625 
Foreign Currency Translation Adjustment   —      —      —      —      —      —      (22,086)   (22,086)
                                         
Balance at March 31, 2019   5,000    50    2,292,945    22,929    20,953,991    (20,727,727)   41,053    290,296 
                                         
Balance at June 30, 2019   5,000    50    2,292,945    22,929    20,953,991    (20,724,241)   48,198    300,927 
Net Income                            (111,187)        (111,187)
Foreign Currency Translation Adjustment   —      —      —      —      —      —      (16,975)   (16,975)
                                         
To Record the stock-based compensation issuance of 1,000,000 shares of common stock, par value $0.01   —      —      1,000,000    10,000    103,000    —      —      113,000 
                                         
Balance at March 31, 2020   5,000    50    3,292,945    32,929    21,056,991    (20,835,428)   31,223    285,765 

 

 

See accompanying notes to condensed unaudited consolidated financial statements.

 

 5 

 

 

ADVANCED OXYGEN TECHNOLOGIES INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(unaudited)

Three-Month Period Ending March 31, 2020 and 2019

       
                   
   Preferred Stock Convertible Series 2  Common
Stock
  Additional
Paid In
  Accumulated 

Accumulated

Other Comprehensive

  Total Stockholders'
   Shares  Amount  Shares  Amount  Capital  Deficit  Income  Equity
Balance at December 31, 2018   5,000    50    2,292,945    22,929    20,953,991    (20,726,889)   52,219    302,300 
Net Income                            (838)        (838)
Foreign Currency Translation Adjustment   —      —      —      —      —      —      (11,166)   (11,166)
                                         
Balance at March 31, 2019   5,000    50    2,292,945    22,929    20,953,991    (20,727,727)   41,053    290,296 
                                         
Balance at December 31, 2019   5,000    50    3,292,945    32,929    21,056,991    (20,839,604)   40,661    291,027 
Net Income   —      —      —      —      —      4,176    —      4,176 
Foreign Currency Translation Adjustment   —      —      —      —      —      —      (9,438)   (9,438)
                                         
Balance at March 31, 2020   5,000    50    3,292,945    32,929    21,056,991    (20,835,428)   31,223    285,765 

 

 

See accompanying notes to condensed unaudited consolidated financial statements.

 

 6 

 

 

ADVANCED OXYGEN TECHNOLOGIES, INC. 

AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited) 

 

  

For the

Nine Months Ended

 March 31,

   2020  2019
Cash flows from operating activities          
Net income (loss)  $(111,187)  $4,625 
Adjustments to reconcile net income (loss) to net cash          
Stock-based compensation   113,000    —   
Expenses paid on behalf of a related party   14,676    14,350 
Changes in operating assets and liabilities
Accounts payable
   26    (25)
Taxes payable   (1,518)   (12,427)
         Deferred revenue   3,082    —   
Net cash provided by (used in) operating activities   18,079    6,523 
           
Cash flow from financing activities:          
Repayment of long-term debt   (12,818)   (13,027)
     Repayment of notes payable - related party   (11,069)   (6,456)
Net cash provided by (used in) financing activities   (23,887)   (19,483)
Change due to FX Translation   (1,216)   (1,871)
Net Change in Cash   (7,024)   (14,831)
           
Cash at beginning of the period  $43,098   $53,415 
Cash at end of period  $36,074   $38,584 
           
Supplemental Disclosure of Cash flow Information          
Cash paid for Interest   2,547    3,227 

 

See accompanying notes to condensed unaudited consolidated financial statements.

 

 7 

 

  

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

NOTE 1- ORGANIZATION AND LINE OF BUSINESS:

 

Organization and Basis of Presentation:

 

Advanced Oxygen Technologies Inc, (“the Company”), was incorporated in Delaware in 1981 under the name Aquanautics Corporation and was, from 1985 until May 1995, a startup stage specialty materials company producing new oxygen control technologies. From May of 1995 through December of 1997 the Company had minimal operations and was seeking funding for operations and companies to which it could merge or acquire. In March of 1998 the Company began operations again in California. From 1998 through 2000, the business produced and sold CD- ROMS for conference events, advertisement sales on the CD’s, database management and event marketing all associated with conference events. From 2000 through March of 2003, the business consisted solely of database management. From 2003 through April 2005, the business operations were derived totally from the Company’s wholly owned business, IP Service, ApS, a Danish IP security vulnerability company (“IP Service”). Since then, business operations have been solely derived from real estate rentals in Denmark through its wholly owned subsidiary.

 

The results of operations for the nine months ended March 31, 2020 are not necessarily indicative of the results to be expected for the year ending June 30, 2020. The accompanying unaudited interim condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes related thereto for the years ended June 30, 2019 and 2018 included in Form 10-K filed with the SEC.

 

Lines of Business:

 

The Company, through its wholly owned subsidiary Anton Nielsen Vojens ApS owns income producing commercial real estate leased until 2026. The real estate consists solely of the land with no buildings or improvements (Land). All improvements on the land are those of the tenant.

 

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

 

Revenue recognition of rental income:

 

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), to update the financial reporting requirements for revenue recognition. Topic 606 outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. It supersedes most current revenue recognition guidance, including industry-specific guidance. The guidance is based on the principle that an entity should recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to fulfill a contract. This guidance became effective for the Company beginning on January 1, 2018, and entities have the option of using either a full retrospective or a modified retrospective approach for the adoption of the new standard. We adopted this standard using the modified retrospective approach on July 1, 2018. 

 

The Company's source of revenue is from the Commercial Property lease in which quarterly payments are received pursuant to the property lease which is in effect until 2026. (See Note 3 for further details).

 

Property Plant and Equipment:

 

Land and buildings are recognized at cost. Land is carried at cost less accumulated impairment losses.

 

 8 

 

 

Foreign currency translation: 

 

Foreign currency transactions are translated applying the current rate method. Assets and liabilities are translated at current rates. Stockholders’ equity accounts are translated at the appropriate historical rates and revenue and expenses are translated at weighted average rates for the year. Exchange rate differences that arise between the rate at the transaction date and the one in effect at the payment date, or at the balance sheet date, are recognized in the income statement.

 

Income Taxes:

 

The Company accounts for income taxes under the asset and liability method of accounting. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is required when it is less likely than not that the Company will be able to realize all or a portion of its deferred tax assets. Because it is doubtful that the net operating losses of recent years will ever be used, a valuation allowance has been recognized equal to the tax benefit of net operating losses generated.

 

Earnings per Share:

 

Basic earnings per share is computed by dividing income available to common shareholders by the weighted-average number of common shares available. Diluted earnings per share is computed similar to basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. As of March 31, 2020, and March 31, 2019 there were 10,000 and 10,000 potential dilutive shares that need to be considered as common share equivalents and because of the net loss, the effect of these potential common shares is anti-dilutive for nine-months ended March 31, 2020 and dilutive for the three-months ended March 31, 2020.

 

Cash and Cash Equivalents:

 

For purposes of the statement of cash flows, the Company considers all highly-liquid investments purchased with original maturities of six months or less to be cash equivalents.

    

The Company maintains its cash in bank deposit accounts which, at March 31, 2020 did not exceed federally insured limits. The Company has not experienced any losses in such accounts and believes that it is not exposed to any significant credit risk on such amounts.

 

Stock-Based Compensation:

 

The Company records stock-based compensation in accordance with ASC 718, Compensation. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. Equity instruments issued to employees and the cost of the services received as consideration are measured and recognized based on the fair value of the equity instruments issued and are recognized over the employees required service period, which is generally the vesting period.

 

Estimates:

 

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenue and expenses during the reported period. Actual results could differ from those estimates.

 

Concentrations of Credit Risk:

 

Financial instruments that potentially subject the Company to major credit risk consist principally of a single subsidiary of Anton Nielsen Vojens ApS.

 

 9 

 

 

Leases:

 

The company adopted ASU No. 2016-02, Leases (Topic 842), as of July 1, 2019, using the modified retrospective approach, which allows comparative periods not to be restated. In addition, the company elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed the company to carry forward the historical lease classification, not reassess whether any expired or existing contracts are or contain leases and not to reassess initial direct costs for any existing leases. The company also elected the hindsight expedient to determine the lease terms for existing leases. The election of the hindsight expedient did not have a significant impact on the calculation of the expected lease term.

 

The Company leases land to a customer. The Company determines if an arrangement contains a lease at contract inception. An arrangement is or contains a lease if the agreement identifies an asset, implicitly or explicitly, that the Customer has the right to use over a period of time. If an arrangement contains a lease, the Company classifies the lease as either an operating lease or as a finance lease based on the five criteria defined in ASC 842.

 

Lease liabilities are recognized at commencement date based on the present value of the remaining lease payments over the lease term. The corresponding right-of-use asset is recognized for the same amount as the lease liability adjusted for any payments made at or before the commencement date, any lease incentives received, and any initial direct costs. The Company’s lease agreements may include options to renew, extend or terminate the lease. These clauses are included in the initial measurement of the lease liability when at lease commencement the Company is reasonably certain that it will exercise such options. The discount rate used is the interest rate implicit in the lease or, if that cannot be readily determined, the Company's incremental borrowing rate.

 

Operating lease expense is recognized on a straight-line basis over the lease term and presented within cost of sales on the Company’s consolidated statements of operations. Finance lease right-of-use assets are amortized on a straight-line basis over the shorter of the useful life of the asset or the lease term. Interest expense on the finance lease liability is recognized using the effective interest rate method and is presented within interest expense on the Company’s consolidated statements of operations and comprehensive income. Variable rent payments related to both operating and finance leases are expensed as incurred. The Company’s variable lease payments primarily consists of real estate taxes, maintenance and usage charges. The Company made an accounting policy election to combine lease and non-lease components.

 

The Company has elected to exclude short-term leases from the recognition requirements of ASC 842. A lease is short-term if, at the commencement date, it has a term of less than or equal to one year. Lease expense related to short-term leases is recognized on a straight-line basis over the lease term.

 

The adoption of the new standard did not materially impact consolidated net income and had no impact on cash flows.

 

Recently Issued Accounting Standards:   

 

In February 2016, the FASB issued ASU No. 2016-02 - Leases (Topic 842), which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e. lessees and lessors). The new standard requires lessees to apply a dual approach, classifying leases as either financing or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease, respectively. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases and operating leases. The standard is effective on January 1, 2019, however early adoption is permitted. effective January 1, 2019. On July 1, 2019 the Company adopted the requirements of Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) No. 2016-02 (Topic 842), Leases (“ASU 2016-02”) using modified retrospective approach. Amounts and disclosures set forth in this Form 10-Q reflect this change.

 

 10 

 

 

New Accounting Pronouncements Not Yet Adopted

 

In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740)—Simplifying the Accounting for Income Taxes. ASU 2019-12 is intended to simplify accounting for income taxes. It removes certain exceptions to the general principles in Topic 740 and amends existing guidance to improve consistent application. ASU 2019-12 is effective for fiscal years beginning after December 15, 2020 and interim periods within those fiscal years, which is fiscal 2022 for us, with early adoption permitted. We do not expect adoption of the new guidance to have a significant impact on our financial statements.

 

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820), Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurements. This ASU includes additional disclosures requirements for recurring Level 3 fair value measurements including disclosure of changes in unrealized gains and losses for the period included in other comprehensive income, disclosure of the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements and narrative description of measurement uncertainty related to Level 3 measurements. Early adoption is permitted. This ASU will be effective for us on July 1, 2020. We are evaluating the impact of the adoption of this ASU on our financial condition, results of operations and cash flows, and, as such, we are not able to estimate the effect the adoption of the new standard will have on our financial statements.

 

Other recent accounting pronouncements issued by the FASB did not or are not believed by management to have a material impact on the Company's present or future financial statements.

 

NOTE 3 - REVENUE:

 

The Company's subsidiary, Anton Nielsen Vojens, ApS has one customer who is a non-related party and leases property from the Company. Rent revenues related to the operating lease are recognized as incurred. For the period ending March 31, 2020 and March 31, 2019 the major customer concentrations were as follows:

 

  

Percent of Sales for the Nine-Month

Period ending March 31,

Customer  2020  2019
Circle K Denmark A/S, Formerly Statoil A/S   100%   100%
           
Total Sales from Major Customers   100%   100%

 

NOTE 4 - LAND:

 

The Land owned by the Company’s wholly owned subsidiary constitutes the largest asset of the Company. During the nine-month period ending March 31, 2020 the Company recorded a decrease in the carrying value of the Land of $19,061 due to the currency translation difference. The carrying value of the Land of the Company was as follows:

 

  

 Carrying Value of

Land at

    March 31, 2020    June 30, 2019 
US Dollars  $596,159   $615,220 

 

 11 

 

 

NOTE 5 - RELATED PARTY TRANSACTIONS:

 

Crossfield, Inc., a company of which the CEO, Robert Wolfe is an officer and director, has made advances to the Company which are not collateralized, non-interest bearing, and payable upon demand, however, the Company did not expect to make payment within one year. At March 31, 2020 and June 30, 2019, the Company had a balance of $124,392 and $120,753 respectively. During the nine-month period ended March 31, 2020 and March 31, 2019 expenses paid on behalf of the Company were $14,676 and $14,350 respectively. The Company repaid $11,069 of the advancement during the nine months ending March 31, 2020.

 

NOTE 6 - NOTES PAYABLE:

 

During 2006, the Company issued a promissory note (“Note”) for $650,000, payable to the Borkwood Development Ltd, a previous shareholder of the Company (“Seller”), payable and amortized monthly and carrying an interest at 5% per year. The Company has the right to prepay the note at any time with a notice of 14 days. To secure the payment of principal and interest the Sellers will receive a perfect lien and security interest in the Shares in the company ANV until the note with accrued interest is paid in full, and, 2) In the case that the Note has not been repaid within 12 months from the day of closing the Sellers have the right to convert the debt to common stock of Advanced Oxygen Technologies, Inc. in an amount of non-diluted shares calculated on the conversion Date, equal to the lesser of : a) Six hundred and Fifty thousand (650,000) or the Purchase Price minus the principal payments made by the buyer, whichever is greater, divided by the previous ten day closing price of AOXY as quoted on the national exchange, or b) Fifteen million shares, whichever is lesser. The Note has been extended until July 1, 2020, prior to period end and interest waived through the period ending June 30, 2020. Due to the extension, the note is not in default and therefore not convertible as of March 31, 2020. As of March 31, 2020, the unpaid balance was $127,029.

 

The Company has a note payable with a bank (“Note B”). The original amount of Note B was kr 1,132,000 Danish Krone (kr). Note B is secured by the subsidiary’s real estate, with a 2.00% interest rate and 3.75 years left on the term. The balance on the note as of March 31, 2020 was $64,573. During the period ended March 31, 2020, the Company paid $12,821 in principal payments and $2,537 in interest.

 

The Company’s commitments and contingencies are $131,327 for 2020. See below table for the years 2020 through 2024 with a total of $191,602. The amounts stated reflect the Company’s commitments in the currencies that those commitments were made and the amounts are an estimate of what the US dollar amount would be if the currency rates did not change.

 

Year  Amount
 2020   $131,327 
 2021    17,411 
 2022    17,762 
 2023    18,120 
 2024    6,982 
 Total   $191,602 

 

The amounts stated in this note reflect the Company’s commitments in the currencies that those commitments were made and the amounts are an estimate of what the US dollar amount would be if the currency rates did not change going forward.

 

 12 

 

 

NOTE 7 - SHAREHOLDERS’ EQUITY:

 

Common Stock:

 

Pursuant to a Certificate of Amendment to our Certificate of Incorporation filed with the State of Delaware and effective as of December 8, 2014, the Company (effected a reverse stock split of all the outstanding shares of our common stock at an exchange ratio of one for twenty (1:20) and changed the number our authorized shares of common stock, par value $0.01 per share, from 90,000,000 to 60,000,000 while maintaining the number of authorized shares of preferred stock, par value $0.01 per share, at 10,000,000. As a result, the 45,853,585 shares of common stock outstanding at December 7, 2014 had been reduced to 2,292,945 shares of common stock (taking into account the rounding up of fractional share interests).

 

On September 23, 2019 the Company entered into a Stock Grant and Investment Agreement with Robert Wolfe, its CEO and a Director (“Wolfe”) whereby the Company has granted 1,000,000 shares (the “Shares”) of common stock of the Company, with a fair value of $113,000 based on a stock price of $0.11. The shares were issued for services rendered by Wolfe to the Company and which Shares are deemed irrevocably and fully earned and vested as of the date thereof. The Shares have been issued in reliance upon the exemption from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended.

 

Preferred Stock:

 

Series 2 Convertible Preferred Stock:

 

The Company is authorized to issue 10,000,000 shares of $0.01 par value of series 2 convertible preferred stock. The Company may issue any class of preferred shares in series. The board of directors has the authority to establish and designate series and to fix the number of shares included in each such series. Each Series 2 preferred share is convertible into two shares of common stock at the option of the holder.

 

Series 2 Convertible Preferred Stock:

 

Each Series 2 preferred share also includes one warrant to purchase two common shares for $5.00. The warrants are exercisable over a three-year period. In the event of the liquidation of the Company, holders of Series 2 preferred stock would be entitled to receive $5.00 per share, plus any unpaid dividends declared on the Series 2 preferred stock from the funds remaining after the Company's creditors, including directors, have been paid. There have been no dividends declared. There are 177,000 Series 2 Convertible Preferred shares designated. During November 1997, 172,000 shares of Series 2 preferred stock were converted into 344,000 shares of the Company's common stock. As of March 31, 2020, and June 30, 2019 there are 5,000 shares issued, which are convertible into 2 common shares. There are no warrants outstanding that have been issued in connection with these preferred shares.

 

Series 3 Convertible Preferred Stock:

 

The Company has designated 1,670,000 shares of series 3 convertible preferred stock with a par value $0.01. Each share automatically converts on March 2, 2000 into either (a) one (1) share of the Company's common stock if the average closing price of the common stock during the ten trading days immediately prior to March 1, 2000 is equal to or greater than sixty-six cents ($0.66) per share, or (b) one and one-half (1 1/2) shares of common stock if the average closing price of the common stock during the ten trading days immediately prior March 1, 2000 is less than sixty-six cents ($0.66) per share. There are zero shares issued and outstanding at March 31, 2020 and June 30, 2019.

 

Series 5 Convertible Preferred Stock:

 

The Company has designated 1 share of series 5 convertible preferred stock, no par value. There is 1 Series 5 Convertible Preferred shares designated. The shares are collectively convertible to common stock of the Company on March 5, 2004, in an amount equal to the greater of a.)290,000 shares divided by the ten day closing price, prior to the date of acquisition of IPS, of the Company's common stock as quoted on the national exchange and not to exceed twenty million shares, or b.) six million shares. There are zero shares issued and outstanding at March 31, 2020 and June 30, 2019.

 

NOTE 8 - SUBSEQUENT EVENTS: 

 

In accordance with ASC 855-10, Company management reviewed all material events through the date of this report.

 

 13 

 

 

ITEM 2: MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

 

The following should be read in conjunction with our Consolidated Financial Statements and the notes thereto included in the Financial Statements.

 

FORWARD LOOKING STATEMENTS:

 

Certain statements contained in this report, including statements concerning the Company’s future and financing requirements, the Company’s ability to obtain market acceptance of its products and the competitive market for sales of small production business and other statements contained herein regarding matters that are not historical facts, are forward looking statements; actual results may differ materially from those set forth in the forward looking statements, which statements involve risks and uncertainties, including without limitation to those risks and uncertainties set forth in any of the Company’s Registration Statements under the heading “Risk Factors” or any other such heading. In addition, historical performance of the Company should not be considered as an indicator for future performance, and as such, the future performance of the Company may differ significantly from historical performance.

 

Revenues: Revenues from operations for the three-month period ending March 31, 2020 and March 31, 2019 were $9,326 and $9,528 respectively, and the revenues for the nine-month period ending March 31, 2020 and March 31, 2019 were $27,936 and $28,689 respectively. They were attributable to operations of the Company's wholly owned subsidiary Anton Nielsen Vojens. The fluctuation was due to currency fluctuations.

  

Selling, general and administrative expenses: G&A expenses for the three-month period ending March 31, 2020 and March 31, 2019 were $498 and $1,316 respectively, and for the nine-month period ending March 31, 2020 and March 31, 2019 were $7,671 and $4,492 respectively. The expenses are mainly attributable to ANV's normal operations and the fluctuations are attributable to currency fluctuations.

 

Salary and Wages expenses: Salary and wage compensation expenses for the three-month period ending March 31, 2020 and March 31, 2019 were $0 and $0 respectively, and for the nine-month period ending March 31, 2020 and March 31, 2019 were $113,000 and $0 respectively. The increase is attributable to Common Stock issued to an officer of the Company.

 

Professional expenses: Professional expenses for the three-month period ending March 31, 2020 and March 31, 2019 were $2,747, and $2,500 respectively, and for the nine-month period ending March 31, 2020 and March 31, 2019 were $11,247 and $11,000 respectively. The expenses are mainly attributable to the Company's independent auditors and SEC filings.

 

Interest expense: Interest expense for the three-month period ending March 31, 2020 and March 31, 2019 was $792 and $1,014 respectively, and for the nine-month period ending March 31, 2020 and March 31, 2019 was $2,547 and $3,227 respectively. Interest expenses for 2019 are lower primarily due to the currency fluctuations and the reduction of debt.

 

Net income (loss) attributed to common stockholders: Net income (loss) attributed to common stockholders was $4,176 or $0.00 per share for the three-month period ending March 31, 2020 as compared to $(838) or $(0.00) per share for March 31, 2019. Net income (loss) attributed to common stockholders was $(111,187) or ($0.04) per share for the nine-month period ending March 31, 2020 as compared to $4,625 or $0.00 per share for March 31, 2019. The fluctuations are mainly attributable to officer compensation, general & administrative expenses and currency fluctuations.

 

 14 

 

 

Liquidity and capital resources: At March 31, 2020 and June 30, 2019, the Company had cash and cash equivalents of $36,074 and $43,098 respectively. At March 31, 2020 and June 30, 2019, the Company had a working capital deficit of $262,634 and $251,829 respectively. The change in cash is primarily associated with currency fluctuations, and the increase in the working capital deficit is primarily due to decreases in cash and increases in deferred revenue, taxes payable, and advances from a related party.

 

Net cash provided by operating activities for nine-month period ending March 31, 2020 and March 31, 2019 was $18,079 and $6,523, respectively. The increase in cash provided by operating activities was primarily due to the increase of $113,000 of stock-based compensation, the increase of $ 3,082 in deferred revenues and the $10,909 decrease in cash used to pay for taxes payable, offset by the $115,812 increase in net loss.

 

Net cash (used in) financing activities for nine-month period ending March 31, 2020 and March 31, 2019 was $(23,887) and $(19,483) respectively. Net cash provided from or used for financing activities for both periods is related to the company's borrowings from banks, officers and directors, and the repayment of debt.

 

OFF BALANCE SHEET ARRANGEMENTS:

 

We do not currently have any off-balance sheet arrangements.

 

ACQUISITION EFFORTS:

 

The Company continues its efforts to raise capital to support operations and growth and is actively searching acquisition or merger with another company that would complement AOXY or increase its earnings potential. During this period, the Company has been in discussion with Companies looking to be acquired. AOXY has not negotiated any terms nor proposed any acquisitions of any of these companies that have been accepted. In addition, the Company is in discussion with potential lending institutions to assist in financing any proposed acquisition. The Company expects difficulty in financing the growth of the increased business or acquisition and has been concentrating on raising capital and/or obtaining a line of credit.

 

ITEM 3. Quantitative and Qualitative Disclosures About Market Risk:

 

Smaller reporting companies are not required to provide the information required by this Item.

 

ITEM 4. CONTROLS AND PROCEDURES

 

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

 

We conducted an evaluation under the supervision and with the participation of our management, including our Chief Executive Officer who is also our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. The term “disclosure controls and procedures”, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934, as amended (“Exchange Act”), means controls and other procedures of a company that are designed to ensure that information required to be disclosed by the company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures also include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure. Based on this evaluation, our Chief Executive Officer and Acting Chief Financial Officer concluded as of March 31, 2020 that our disclosure controls and procedures were not effective at ensuring that the material information required to be disclosed in the Exchange Act reports is recorded, processed, summarized and reported as required in applicable SEC rules and forms.

 

 15 

 


Changes in Internal Control over Financial Reporting

We adopted ASC 842, Leases, on July 1, 2019, which required management to make changes to our policies and processes and to implement new or modify existing internal controls over financial reporting during the quarter ended March 31, 2020. This included modifications to our existing controls over the review of customer contracts and other agreements, and new controls related to disclosure requirements.

 

During the nine-month period ended March 31, 2020, there were no other changes in our internal control over financial reporting identified in connection with managements evaluation of the effectiveness of our internal control over the financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act.

 

PART II

 

ITEM 1: LEGAL PROCEEDINGS

 

During the period ending March 31, 2020, there were pending or threatened legal actions as follows:

 

None

 

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 

None

 

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

 

During the nine- month period ending March 31, 2020, the Company filed one report on Form 8-K.

 

On September 23, 2019 Advanced Oxygen Technologies, Inc. (the “Company”) entered into a Stock Grant and Investment Agreement with Robert Wolfe, its CEO and a Director (“Wolfe”) whereby the Company has granted 1,000,000 shares (the “Shares”) of common stock of the Company to Wolfe for services rendered by Wolfe to the Company and which Shares are deemed irrevocably and fully earned and vested as of the date thereof.  The Shares have been issued in reliance upon the exemption from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended.

 

 16 

 

  

Exhibit Number   Description of the Document
3.1   Certificate of Incorporation as Amended and filed with the Secretary of State of Delaware effective on December 5, 2014(1)
3.2   Bylaws.(1)
31.1*   Certification of Chief Executive Officer pursuant to Exchange Act Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*   Certification of Chief Financial Officer pursuant to Exchange Act Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*   Certification of Chief Executive Officer in accordance with 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*   Certification of Chief Financial Officer in accordance with 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
10.1   Stock Grant and Investment Agreement dated September 23, 2019
101.INS   XBRL Instance
101.SCH   XBRL Taxonomy Extension Schema Document
101.CAL   XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF   XBRL Taxonomy Extension Definition Linkbase Document
101.LAB   XBRL Taxonomy Extension Labels Linkbase Document
101.PRE   XBRL Taxonomy Extension Presentation Linkbase Document

 *Filed herewith

 

SIGNATURE

 

In accordance with the requirements of the Exchange Act, the Registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. 

 

Date: April 17, 2020 By: /s/ Robert E. Wolfe  
    Robert E. Wolfe  
   

Chairman of the Board and

Chief Executive Officer and

Principal Financial Officer

 

 

  

 

(1) Filed as an exhibit to the Company’s 8-K filed with the SEC on December 5, 2014 and incorporated herein by reference.

 

 17