10-Q: Watair Inc. (Now Vyre Network) Reports Continued Losses in Q2 2013, Citing Going Concern Uncertainty

Watair Inc., now known as Vyre Network, reports a net loss of $141,958 for the quarter ended June 30, 2013, with accumulated losses raising concerns about the company's ability to continue as a going concern.

Summary

• Watair Inc., currently known as Vyre Network, reported its financial results for the quarter ended June 30, 2013.
• The company experienced a net loss of $141,958 for the quarter, compared to a net loss of $134,709 for the same period in 2012.
• Revenue for the quarter was $4,217, up from $3,039 in the prior year's quarter.
• Cost of sales increased to $7,407 from $3,000 in the same quarter of the previous year, resulting in a gross loss of $3,190.
• Total operating expenses were $138,768, compared to $134,748 in the corresponding period of 2012.
• The company's accumulated losses since inception totaled $13,047,341 as of June 30, 2013.
• The report expresses substantial doubt about the company's ability to continue as a going concern, dependent on future profitable operations and/or securing necessary financing.
• As of May 15, 2011, there were 129,716,886 shares of common stock outstanding.
• The company is in the development stage and is devoting its efforts to establishing a new business.
• Management is pursuing additional funding sources to mitigate concerns about meeting future obligations.

Sentiment

Score: 3

Explanation: The document presents a negative outlook due to the company's continued losses, accumulated deficit, and concerns about its ability to continue as a going concern. While there was a slight increase in revenue, the overall financial situation is precarious.

Positives

• Revenue increased to $4,217 from $3,039 in the same quarter last year.
• The company owns intellectual property relating to a water treatment process and devices for water-from-air machines.

Negatives

• The company reported a net loss of $141,958 for the quarter ended June 30, 2013.
• Accumulated losses since inception totaled $13,047,341.
• The report expresses substantial doubt about the company's ability to continue as a going concern.
• The company is in the development stage and has not yet achieved profitable operations.
• The company is dependent on external financing to execute its operational plan and sustain business operations.

Risks

• The company's ability to continue as a going concern is uncertain and dependent on securing additional financing and achieving profitable operations.
• Failure to obtain additional financing could force the company to curtail or discontinue operations.
• The company faces competition from larger and better-financed companies.
• The company is dependent on key management and personnel, particularly the Chief Executive Officer.
• The company may be subject to product liability claims if its products do not work as promised.
• The company's business is subject to risks associated with offshore manufacturing and international operations.
• The company is in its early stages of development and faces a risk of business failure.
• The company is dependent on suppliers to provide enough inventories to meet purchase orders.
• Demand for the company's products and services may fail to materialize.

Future Outlook

The company's future outlook is uncertain, with the report indicating that the company's ability to continue as a going concern is dependent on securing additional financing and achieving profitable operations.

Management Comments

• Management plans to further evaluate, develop and manage the commercialization, sub-license and/or commercial sale of these products.
• Management has obtained additional funds by related party advances, however there is no assurance that this additional funding is adequate and further funding may be necessary.

Industry Context

The company operates in the atmospheric water generator market, which is a relatively new market with limited hard data to validate market demand.

Comparison to Industry Standards

• It is difficult to compare Watair's performance to industry standards due to the company's unique focus on atmospheric water generators and its development stage.
• Comparable companies in the water technology sector include firms like Water Technologies International and Aqua Sciences, but their business models and financial situations may differ significantly.
• Given the limited revenue and significant losses, Watair's financial performance lags behind more established companies in the broader environmental technology industry.

Legal Proceedings

• In January 2009, the Company received an alleged claim from one of its former distributors for failing to deliver merchandise ordered and paid for by the Plaintiff.
• On July 20, 2009, the Company filed a cross-complaint for breach of contract, intentional interference with contractual relationship, intentional interference with prospective economic relationship and accounting.
• On February 2, 2010 a confidential settlement agreement and release was effected between the parties, and the Complaint and cross complaint have been dismissed by the parties with prejudice.

Related Party Transactions

• During the three months ended June 30, 2013, directors of the company charged the Company with Management fees of $10,000.

Stakeholder Impact

• Shareholders face the risk of dilution if the company raises additional capital through the sale of shares.
• Employees' job security is uncertain due to the company's financial difficulties and going concern concerns.
• Customers may be concerned about the company's ability to fulfill warranties and provide ongoing support.
• Suppliers may face the risk of non-payment if the company's financial situation deteriorates.
• Creditors face the risk of default if the company is unable to secure additional financing or achieve profitable operations.

Next Steps

• The company plans to further evaluate, develop, and manage the commercialization, sub-licensing, and commercial sale of its products.
• The company intends to secure additional funding sources to mitigate concerns about meeting future obligations.

Key Dates

Keywords

Financial Statements, Going Concern, Net Loss, Watair Inc, Vyre Network, Quarterly Report, Atmospheric Water Generator, Financing, Risk Factors