Neolara Corp. - 10-K

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Results of Operations for the years ended June 30, 2025 and 2024:

Results of Operation

Our financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation.

We expect we will require additional capital to meet our long-term operating requirements. We expect to raise additional capital through, among other things, the sale of equity or debt securities.

Years Ended June 30, 2025 and 2024:

During the years ended June 30, 2025 and 2024 the Company has generated $29,150 and $21,300 in revenues, respectively. Total revenue increased $7,850, or 36.9%, to $29,150 for the fiscal year ended June 30, 2025 from $21,300 for the fiscal year ended June 30, 2024. The increase in revenue was due to the Company’s expanding operations and increased sales activities.

The cost of goods sold for the years ended June 30, 2025 and 2024 were $6,881 and $7,550.

For the years ended June 30, 2025 and 2024 operating expenses were $45,957 and $28,127, respectively. Operating expenses consist of mainly amortization expenses and general and administrative expenses. Operating expenses increased $17,830, or 63.4%, to $45,957 for the fiscal year ended June 30, 2025 from $28,127 for the fiscal year ended June 30, 2024. The increase in total operating expenses was primarily due to higher general and administrative expenses which increased due to Transfer Agent fees and Depository Trust Company (“DTC”) eligibility fees.

The net loss for the years ended June 30, 2025 and 2024 was $23,688 and $14,377, respectively. Net loss increased $9,311, or 64.8%, to $23,688 for the fiscal year ended June 30, 2025 from $14,377 for the fiscal year ended June 30, 2024. Net loss increased because the growth in operating expenses for the same period exceeded the growth in revenue.

Liquidity and Capital Resources

As of June 30, 2025, our total assets were $67,469 consisting of cash of $1,034; prepaid expenses of $19,685 and intangible assets of $46,750, while our current liabilities were $90,812 consisting of accounts payable of $99 and related party advances of $90,713.

As of June 30, 2024, our total assets were $78,845 consisting of cash of $29,345 and intangible assets of $49,500, while our current liabilities were $78,500 consisting of related party advances.

Cash Flows from Operating Activities for years ended June 30, 2025 and 2024

For the year ended June 30, 2025, net cash flows used in operating activities was $(40,524) due to its net loss of $23,688, amortization expense of $2,750, increase in prepaid expenses of $19,685 and increase in accounts payable of $99.

For the year ended June 30, 2024, net cash flows used in operating activities was $(19,547) due to its net loss of $14,377, amortization expense of $2,750 and decrease in deferred income of $7,920.

Cash Flows from Investing Activities

We have not generated cash flows from investing activities for the years ended June 30, 2025 and 2024.

Cash Flows from Financing Activities

For the year ended June 30, 2025, net cash flows provided by financing activities was $12,213 due to net proceeds from the related party loan.

For the year ended June 30, 2024, net cash flows provided by financing activities was $36,692 due to net proceeds from the share issuance $33,810 and related party loan $2,882.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Critical Accounting Policies and Recent Accounting Pronouncements

The preparation of financial statements in accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the 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. A change in managements’ estimates or assumptions could have a material impact on our financial condition and results of operations during the period in which such changes occurred. Actual results could differ from those estimates. Our financial statements reflect all adjustments that management believes are necessary for the fair presentation of their financial condition and results of operations for the periods presented.

In November 2023, the Financial Standards Accounting Board (FASB) issued ASU 2023-07, “Segment Reporting (Topic 280)”: Improvements to Reportable Segment Disclosures. The amendments in this ASU require disclosures, on an annual and interim basis, of significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”), as well as the aggregate amount of other segment items included in the reported measure of segment profit or loss. This ASU requires that a public entity disclose the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources. This ASU is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years, with early adoption permitted. The amendments in this ASU should be applied retrospectively to all prior periods presented in the financial statements. The Company adopted the ASU and determined that its adoption did not have a material impact on the Company’s financial statements and related disclosures. As defined in the ASU, operating segments are components of an enterprise about which discrete financial information is regularly provided to the CODM in making decisions on how to allocate resources and assess performance for the organization. The Company operates and manages its business as one reportable and operating segment. The Company’s CODM is the Chief Executive Officer. The Company’s CODM reviews operating results to make decisions about allocating resources and assessing performance for the entire Company.

The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.