SEC Filing Summary
Reporting period: Form 10-Q for the quarter ended June 30, 2014. The filing identifies the registrant as IIM Global Corporation, formerly Silverwood Acquisition Corporation—not Authid Inc. Verify the company and filing identity before relying on this summary.
Business context
IIM Global described itself as a development-stage company. It reported a business combination with Innovation in Motion, Inc. in August 2013 and discussed handheld identification, biometric devices and mobile payment products. The company had generated no revenue through June 30, 2014.
Financial results and liquidity
| Metric | Three months ended June 30, 2014 | Six months ended June 30, 2014 | Prior-year comparable period |
|---|---|---|---|
| Revenue | $0 | $0 | $0 |
| Operating expenses | $161,386 | $273,670 | $8,801 and $8,871, respectively |
| Interest expense | $22,500 | $32,050 | $0 |
| Net loss | $183,886 | $305,720 | $8,801 and $8,871, respectively |
With no revenue, gross margin and operating margin are not meaningful. The six-month loss per share was reported as $(0.00), basic and diluted; weighted-average shares were 160,623,289, versus 1,500,000 in the prior-year period.
- Cash flow, six months: operating cash use was $173,210; investing cash use was $496,960, including $419,266 for fixed assets and $77,694 for intangibles; financing provided $685,385, principally from related-party notes. Ending cash was $20,554.
- Balance sheet, June 30: current assets were $21,199, including $20,554 cash; current liabilities were $973,668. Working capital was therefore approximately negative $952,469.
- Debt and equity: current related-party promissory notes totaled $910,000, bearing 15% interest. Stockholders’ equity was a deficit of $48,514; accumulated deficit was $1,796,454.
- Total assets were $925,154, including net property and equipment of $446,447 and net intangible assets of $457,508. The company acquired its office building in May 2014.
Changes, outlook and risks
Compared with the first half of 2013, the six-month net loss increased to $305,720 from $8,871, mainly as operating expenses rose following the business combination, added personnel and higher professional fees; depreciation and amortization also began. The company reported no material changes to its previously disclosed risk factors.
- Management stated that cash was insufficient to operate at the current level for the next 12 months or achieve its business goals. Continued operations depended on additional financing, revenue generation and business opportunities; there was no assurance financing would be available on acceptable terms or at all. The filing raises substantial going-concern concerns.
- After quarter-end, the company extended two Penn Investments notes totaling $910,000 to January 30, 2015, obtained a further $20,000 note, and reported negotiating an additional $180,000 in financing. These obligations bear 15% interest and are related-party financing.
- Management reported that disclosure controls were not effective and identified material weaknesses involving inadequate segregation of duties and insufficient accounting personnel. Remediation plans included consultants or additional staff and stronger cross-approval procedures.
- The company disclosed no pending or threatened legal proceedings and no material off-balance-sheet arrangements. It provided no revenue or earnings guidance.
Key facts for investors to verify
- Confirm the registrant identity: the supplied metadata says Authid Inc., while the filing names IIM Global Corporation.
- Review the business combination, current operating business and revenue status; the filing reports zero revenue.
- Assess the going-concern disclosure, severe working-capital deficit and dependence on further financing.
- Verify the status, terms and repayment capacity for the related-party notes, including the post-quarter-end financing described.
- Evaluate the material weaknesses in disclosure controls and whether remediation has occurred.