Filing context and period
The supplied filing is a Smartdata Corporation Form 10-Q, not a CleanSpark, Inc. filing. It covers the quarter ended December 31, 2011, and was signed February 21, 2012. The company describes itself as a development-stage company and checked the box indicating it was a shell company. The interim financial statements are unaudited.
Financial highlights
| Metric | Quarter ended Dec. 31, 2011 | Comparable 2010 quarter |
|---|---|---|
| Revenue | $0 | $0 |
| General and administrative expense | $4,811 | $659 |
| Operating loss | $4,811 | $659 |
| Interest expense | $1,320 | $748 |
| Net loss | $6,131 | $1,407 |
| Cash from operating activities | $179 | $0 |
| Cash at period end | $387 | $40 |
At December 31, 2011, total assets were $387, consisting entirely of cash. Current liabilities and total liabilities were $71,277: accounts payable of $7,459, a $15,000 convertible promissory note, and $48,818 payable to a shareholder. Stockholders’ deficit was $70,890. The shareholder notes are payable on demand and bear no stated interest; the company recorded $1,170 of imputed interest for the quarter. No interest or income taxes were paid.
Basic and diluted loss per share was reported as $0.01 for each quarter. Weighted-average shares were 37,076,779 in 2011 and 35,976,781 in 2010. The filing reports 37,076,779 shares outstanding as of February 21, 2012. Margins are not meaningful because the company had no revenue.
Changes versus prior period
- Quarterly net loss increased to $6,131 from $1,407, while general and administrative expense rose to $4,811 from $659.
- Cash increased from $208 at September 30, 2011 to $387 at December 31, 2011; shareholder advances increased by $6,000 during the quarter.
- The company continued to report no revenue or operating activity.
Outlook, risks, and other disclosures
- Management planned to evaluate industries, select a business plan, and pursue operations through funding or acquisition of an existing business. No target or industry had been identified as of the filing.
- Management anticipated losses from legal, accounting, and acquisition-search costs and did not expect revenue before a business combination. Future financing needs could rise substantially after a combination.
- The filing states that accumulated losses and the absence of revenue-generating activities raise substantial doubt about the company’s ability to continue as a going concern. Management expected to seek funding through loans or stock sales, but gave no assurance that funding or profitable operations would be achieved.
- Management said it believed current management support could fund compliance and business-combination efforts for an indefinite period, but management was under no obligation to provide continued funding.
- Disclosure controls and procedures were deemed ineffective; management said remediation costs would further strain limited access to capital. No material change in internal control over financial reporting was reported.
- No pending or threatened legal proceedings, unregistered equity sales, defaults upon senior securities, or Form 8-K reports were disclosed.
Important facts for investors to verify
- Confirm the issuer and filing: the provided text identifies Smartdata Corporation, not CleanSpark, Inc.
- Verify the reporting period and applicable company records; this filing covers the quarter ended December 31, 2011.
- Review the $15,000 convertible note’s terms and the status and repayment expectations for the $48,818 demand payable to a shareholder.
- Assess whether management funding continued and whether the company identified or completed a business combination after this reporting date.
- Consider the going-concern uncertainty, very limited cash, and ineffective disclosure controls.