Business Context and Reporting Period
This Form 10-Q covers the quarterly period ended March 31, 2012, for Silverwood Acquisition Corporation (not Authid Inc., as indicated in the metadata). The company is a Delaware corporation in the developmental stage, incorporated on September 21, 2011. Its primary purpose is to engage in mergers and acquisitions to provide a vehicle for private companies to become public reporting entities. As of the reporting date, the company has not generated any revenue and has no active operations beyond administrative filings and share issuance.
Key Financial Metrics
| Metric | Value (Q1 2012) | Value (Inception to Mar 31, 2012) |
|---|---|---|
| Revenue | $0 | $0 |
| Net Loss | $(750) | $(2,093) |
| Cash and Cash Equivalents | $2,000 | $2,000 |
| Total Assets | $2,000 | $2,000 |
| Total Liabilities | $0 | $0 |
| Accumulated Deficit | $(2,093) | $(2,093) |
| Shares Outstanding | 20,000,000 | 20,000,000 |
Liquidity and Debt: The company holds $2,000 in cash with no outstanding debt or accrued liabilities as of March 31, 2012. There are no margins to report as there is no revenue.
Material Changes vs. Prior Period
- Liabilities: Accrued liabilities decreased from $400 at December 31, 2011, to $0 at March 31, 2012.
- Equity: Additional paid-in capital increased from $943 to $2,093, offsetting the accumulated deficit to maintain total equity at $2,000.
- Operations: The company reported a net loss of $750 for the three months ended March 31, 2012, compared to no prior year data for a full quarter (as the company was formed in September 2011).
Outlook, Risks, and Management Commentary
Going Concern: The filing explicitly states that the company's continuation as a going concern is dependent on its ability to obtain additional financing and successfully locate a target company for a business combination. The company has sustained operating losses since inception.
Financial Support: Tiber Creek Corporation, an entity affiliated with management, has agreed to pay all expenses incurred by Silverwood until a business combination is effected, without repayment. There is no assurance the company will ever be profitable.
Strategy: The company intends to merge with a target company, typically structuring the deal as a tax-free reorganization. It currently has no capital to provide to acquisition candidates but offers the opportunity to acquire a controlling interest in a reporting company.
Risks: The primary risk is the failure to locate a suitable target company or secure necessary equity financing. The filing notes that operating results for interim periods are not necessarily indicative of future results.
Investor Verification Checklist
- Company Identity: Verify that the filing is for Silverwood Acquisition Corporation, not Authid Inc., as the metadata suggested.
- Going Concern Status: Confirm the ongoing financial support from Tiber Creek Corporation and the lack of independent revenue generation.
- Capital Structure: Note the 20,000,000 shares of common stock issued for a total consideration of only $2,000 ($0.0001 per share).
- Business Plan: Assess the timeline and progress in identifying a target company for a merger, as the company has no operations other than this search.
- Related Party Transactions: Review the relationship between Silverwood and Tiber Creek Corporation regarding expense payments and management overlap.