SEC Filing Summary: bBooth, Inc. (Form 8-K)
Business Context and Reporting Period
Date of Report: October 16, 2014
Company: bBooth, Inc. (formerly Global System Designs, Inc.)
Event: Completion of a reverse merger and acquisition of bBooth (USA), Inc., a private Nevada corporation. The transaction resulted in a change of control, a change in shell company status, and a name change. The company operates internet-connected, kiosk-sized recording studios ("bBooths") in shopping malls and is developing a mobile app and content production verticals (bTV, bRecords, bMgmt).
Key Financial Metrics
Revenue: $0 (No revenue generated for the six months ended June 30, 2014, or the year ended December 31, 2013).
Profitability:
- Net Loss (6 months ended June 30, 2014): $790,804
- Net Loss (Year ended Dec 31, 2013): $4,581,547
- Accumulated Deficit (as of June 30, 2014): $5,655,630
Liquidity and Cash Flow (as of June 30, 2014):
- Cash on Hand: $1,000,265
- Working Capital: $859,964
- Cash from Operating Activities (6 months ended June 30, 2014): $(886,977)
- Cash from Financing Activities (6 months ended June 30, 2014): $2,005,062
Capital Structure (Post-Closing):
- Shares Outstanding: 60,000,000 common shares
- Authorized Shares: 200,000,000 common shares
- Recent Financing: Private placement of 9,000,000 shares at $0.50/share for gross proceeds of $4,500,000 (Sept-Oct 2014). Conversion of $1,669,316 in debt to equity.
Material Changes vs. Prior Period
- Corporate Identity: Changed name from "Global System Designs, Inc." to "bBooth, Inc." and ticker symbol from "GLSI" to "GLSID" (expected to change to "BBTH" in November 2014).
- Control and Management: Former directors and officers resigned. New management team appointed from bBooth, with former bBooth shareholders owning approximately 83-84% of outstanding shares.
- Accounting Treatment: Transaction treated as a reverse merger; historical financial statements reflect bBooth's operations, not the former shell company.
- Stock Split: 2-for-1 forward stock split effected on October 16, 2014.
- Fiscal Year: Changed fiscal year-end from November 30 to December 31.
- Accountant Change: Independent auditor changed from Messineo & Co., CPAs, LLC to Anton & Chia, LLP.
Guidance, Outlook, and Risks
Outlook: Management anticipates rapid growth following the deployment of 16 booths in major US cities, the launch of the bMobile app, and the airing of the TV show "The Audition" on MTV. Revenue is expected to come from transaction fees, sponsorships, advertising, and content production.
Risks and Contingencies:
- Going Concern: The auditor has expressed substantial doubt about the company's ability to continue as a going concern due to significant accumulated deficits and reliance on future financing.
- Liquidity: The company requires substantial additional funding to continue operations and may need to raise capital through dilutive equity or debt offerings.
- Revenue Generation: No revenue has been generated to date; success depends on consumer adoption of kiosks and the mobile app.
- Market Liquidity: Common stock is quoted on the OTC Bulletin Board; trading is sporadic, and the stock is subject to "penny stock" rules.
- Intellectual Property: Reliance on third-party vendors for booth construction and software; pending negotiations for IP acquisition with Studio One Media.
Investor Verification Checklist
- Verify the status of the $1,250,000 conditional perpetual license agreement with Studio One Media, Inc., including the execution of definitive agreements.
- Confirm the deployment timeline and operational status of the first 16 bBooth kiosks in major US cities.
- Assess the company's ability to secure additional financing given the "going concern" warning and lack of revenue.
- Review the terms of the private placement completed in September/October 2014 and any subsequent dilution.
- Monitor the launch date and performance metrics of the MTV show "The Audition" and the bMobile app.
- Check for any updates on the change of stock symbol to "BBTH" and trading volume on the OTC markets.