You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and related notes appearing in this Form 10-K. Some of the information contained in this discussion and analysis or set forth elsewhere in this Form 10-K, including information with respect to our plans and strategy for our business and related financing, includes forward-looking statements that involve risks and uncertainties. You should know that there are many factors, both within and outside our control, that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.
General
Critical Accounting Policies
Our financial statements have been prepared in accordance with accounting
principles generally accepted in
Basis of Presentation
The accompanying consolidated financial statements of the Company have been
prepared in accordance with principles generally accepted in
Financial Statement Reclassification
Certain account balances from prior periods have been reclassified in these consolidated financial statements to conform to current period classifications. The prior year amounts have also been modified in these financial statements to properly report amounts under current operations and discontinued operations (see note 7).
Going Concern
Based on operating losses and negative cash from operations and the discontinued operations of most of the Company's operations, substantial doubt exists about the Company's ability to continue as a going concern. Management's plan in this regard is to find new operations to enter into and focus on building profitable operations. To finance operations while it finds new operations, the Company will continue financing activity such as taking loans and issuing new shares of the Company's common stock.
As of
5
We continue to have a significant working capital deficit that adversely affects our business by limiting the resources we have available to pursue the promotion of our information services and develop new service opportunities for potential customers. Historically, we have relied on extensions of note payment due dates and new debt financing to repay note obligations as they came due in order to continue operations. Going forward we will continue to use extensions and new debt financing to address note obligations that come due, endeavor to gradually reduce obligations with cash flow provided by operations, and pursue over the next 12 months equity financing that we can apply to debt reduction and business development. Nevertheless, the shortage of working capital adversely affects our ability to develop, sponsor, or participate in activities that promote our information services to prospective customers and to develop new content, because a substantial portion of cash flow goes to reduce debt rather than to advance operating activities. There is no assurance that our plans for addressing our working capital shortages will be successful, and our failure to be reasonably successful should be expected to result in a significant contraction of our operations and potentially a failure of the business.
Revenue Recognition
Effective
The Company's revenue consists primarily of sales of comprehensive horse racing
information through multiple websites focusing on all aspects of the horse
racing industry in
The majority of the Company's revenue is generated by per-item sales. For certain users, payment is received at the time of purchase and for others it is received after purchase. In either case, our performance obligation is to provide the requested information to users. Therefore, we recognize revenue for per-item sales when the requested information is supplied to the user or for information packages that span a period of time, ratably over the subscription period. Revenues are presented net of refunds, credits and known and estimated credit card chargebacks. The Company reports revenue net of any required taxes collected from customers and remitted to government authorities, with the collected taxes recorded as current liabilities until remitted to the relevant government authority. Rights to information purchased by customers in advance of the information being provided are recorded as deferred.
As of
Foreign Exchange
The Company's primary operations are conducted in
The financial statements of each entity are prepared using the applicable
functional currencies, and have been translated into
6
The following rates were used to translate the accounts of Umajin HK and WRN into USD at the following balance sheet dates.
Balance Sheet Dates July 31, 2019 July 31, 2018 Japanese Yen to USD 0.00920.0090 Hong Kong Dollars to USD 0.1278 0.1274
The following rates were used to translate the accounts of LinkBit, Umajin HK, SPT and WRN into USD for the following operating periods.
For the Year Ended July 31, 2019 July 31, 2018 Japanese Yen to USD 0.00900.0091 Hong Kong Dollars to USD 0.12760.1278 Malaysian Ringgit to USD N/A 0.2470
Results of Operations for the Year Ended
The following are the results of our operations for the year ended
For the Year Ended 7/31/2019 7/31/2018 $ Change Net sales $ - $ - $ - Total revenue - - - Operating Expenses Cost of sales - - - Other general and administrative expenses 191,230 816,531 (625,301 ) Total operating expenses 191,230 816,531 (625,301 ) Loss from operations (191,230 ) (816,531 ) 625,301 Other income (expense) Other income (loss) 713,000 - 713,000 Loss on extinguishment of related party debt (74,600 ) - (74,600 ) Gain on discontinued operations - 2,245,490 (2,245,490 ) Total other income (expense) 638,400 2,245,490 (1,607,090 ) Net income (loss) before provision for income taxes 447,170 1,428,959 (981,789 ) Provision for (benefit from) income taxes - - -
Net income (loss) from continuing operations 447,170 1,428,959 (981,789 ) Net income (loss) from discontinued operations 7,984 1,899,222 (1,891,238 ) Provision for (benefit from) income taxes for discontinued operations
(630) (774,666 ) 774,036
Net loss attributable to GPI stockholders
7Net Sales
Due to the sale of WRN and UHK on
Operating Expenses
Total operating expenses for the year ended
Other Income/ (Expenses)
Total other income/expense for the year ended
Liquidity and Capital Resources
Based on operating losses and negative cash from operations and the discontinued operations of the majority of the Company's operations, substantial doubt exists about the Company's ability to continue as a going concern. Management's plan in this regard is to find new operations to bring in to the Company. To finance operations the Company will continue financing activity such as taking loans and issuing new shares of the Company's common stock.
As of
We continue to have a significant working capital deficit that adversely affects our business by limiting the resources we have available to pursue the promotion of our information services and develop new service opportunities for potential customers. Historically, we have relied on extensions of note payment due dates and new debt financing to repay note obligations as they came due in order to continue operations. Going forward we will continue to use extensions and new debt financing to address note obligations that come due, endeavor to gradually reduce obligations with cash flow provided by operations, and pursue over the next 12 months equity financing that we can apply to debt reduction and business development. Nevertheless, the shortage of working capital adversely affects our ability to develop, sponsor, or participate in activities that promote our information services to prospective customers and to develop new content, because a substantial portion of cash flow goes to reduce debt rather than to advance operating activities. There is no assurance that our plans for addressing our working capital shortages will be successful, and our failure to be reasonably successful should be expected to result in a significant contraction of our operations and potentially a failure of the business.
The following is a summary of our cash flows from operating, investing and
financing activities for the years ended
Year Ended7/31/2019 7/31/2018
Cash flows provided by (used in) operating activities
Cash flows used in investing activities $ -$ 604,938 Cash flows provided by financing activities$ 10,900 $ (1,201,994 ) 8
Net cash flows used in operating activities for the year ended
Net cash provided by investing activities amounted to
Net cash provided by financing activities for the year ended
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