MARA Holdings, Inc. quarterly report, Q3 FY2011

Filing summary

Identity and period: The supplied filing is for Verve Ventures Inc., not MARA Holdings, Inc. It is a Form 10-Q for the quarter and nine months ended July 31, 2011, filed September 14, 2011. The company identifies itself as a development-stage Nevada issuer planning UK waste-removal services; it had not started operations.

Financial results and position

MetricPeriod / dateReported amount
RevenueThree and nine months ended July 31, 2011$0
Operating expenses / net lossThree months ended July 31, 2011$3,588 / $(3,588)
Operating expenses / net lossNine months ended July 31, 2011$27,756 / $(27,756)
Accumulated deficitSince inception to July 31, 2011$(29,728)
Cash and cash equivalentsJuly 31, 2011$3,572
Prepaid expensesJuly 31, 2011$4,435
Total liabilitiesJuly 31, 2011$12,485
Working capital / stockholders’ equity (deficit)July 31, 2011$(4,478)
Cash used in operating activitiesNine months ended July 31, 2011$(30,081)
Cash provided by financing activitiesNine months ended July 31, 2011$9,000

Margins are not meaningful because the company reported no revenue. The company reported no interest expense or income-tax provision. It had 9,050,000 common shares outstanding and reported loss per share of $(0.00), rounded.

Changes versus prior periods

Cash declined from $24,653 at October 31, 2010 to $3,572 at July 31, 2011. Related-party notes payable rose from $1,375 to $10,375, and accounts payable was $2,110. Stockholders’ equity fell from $23,278 to a deficit of $4,478, principally reflecting the nine-month net loss. The three-month loss was $3,588 versus $10 for the three months ended July 31, 2010. The filing does not provide a clearly identified nine-month prior-year comparison.

Outlook, risks, and other notable items

  • Management said existing working capital and expected financing were adequate for the next three months, while also stating it expected to need additional capital for long-term requirements. The filing gives no revenue or profitability guidance.
  • The company disclosed substantial doubt about its ability to continue as a going concern. Management planned to fund operations through cash on hand, director loans, and potential equity or debt offerings; financing may not be available on acceptable terms. Further securities issuance could dilute existing shareholders.
  • Director-related loans totaling $10,375 were unsecured, non-interest-bearing, and payable on demand. The filing names Christopher Clitheroe in the note but identifies Leslie Clitheroe in the MD&A as the executive who advanced the funds.
  • Management concluded disclosure controls and procedures were not effective as of July 31, 2011. It reported no material change in internal control over financial reporting during the nine-month period.
  • The filing reports no material off-balance-sheet arrangements and no known pending or threatened legal proceedings. It describes an agreement with Zyon Technology for search-engine optimization and web marketing but provides no financial terms in the supplied text.

Important facts for investors to verify

  • Confirm the issuer and reporting period: this filing identifies Verve Ventures Inc., not MARA Holdings, Inc.
  • Reconcile the reported ending cash: the balance sheet shows $3,572, while the cash-flow statement’s inception-to-date ending-cash figure appears as $3,647; the text does not explain the difference.
  • Confirm the identity of the director who made the $10,375 of demand loans, given the inconsistent names in the notes and MD&A.
  • Assess near-term liquidity, the going-concern risk, and the company’s ability to secure additional funding before operating cash is depleted.
  • Review the full Zyon Technology agreement and the status and terms of any planned securities issuance.