Filing identity and reporting period
Important identity mismatch: The request identifies CleanSpark, Inc., but the supplied Form 10-Q is for Smartdata Corporation, a Nevada development-stage company. This summary reflects the supplied filing, not a CleanSpark filing. It reports the quarter and nine months ended June 30, 2013; the financial statements are unaudited.
Financial results and condition
| Metric | Period / date | Amount |
|---|---|---|
| Revenue | Three and nine months ended June 30, 2013 | $0 |
| General and administrative expenses | Three months / nine months ended June 30, 2013 | $3,837 / $16,423 |
| Interest expense | Three months / nine months ended June 30, 2013 | $1,697 / $4,910 |
| Net loss | Three months / nine months ended June 30, 2013 | $5,534 / $21,333 |
| Operating cash flow | Nine months ended June 30, 2013 | $(11,010) |
| Cash | June 30, 2013 | $403 |
| Current assets / total assets | June 30, 2013 | $403 / $403 |
| Current liabilities / total liabilities | June 30, 2013 | $97,079 / $97,079 |
| Stockholders’ deficit | June 30, 2013 | $(96,676) |
There was no revenue or operating activity, so operating margins are not meaningful. The filing reports no interest or income taxes paid in the nine-month period. It provides no clear debt-maturity schedule beyond stating that related-party notes are payable on demand.
Changes versus comparable periods
Nine-month net loss increased to $21,333 from $14,708 in 2012; general and administrative expenses rose to $16,423 from $10,613. Three-month net loss increased to $5,534 from $4,487, while quarterly general and administrative expenses rose to $3,837 from $3,065. Cash declined from $413 at September 30, 2012 to $403 at June 30, 2013. Current liabilities increased from $82,075 to $97,079, mainly alongside higher shareholder payables and accounts payable.
For the 2013 nine-month period, financing activities provided $11,000, including $11,500 of note proceeds and $500 of repayments. The company completed a 1-for-39 reverse stock split in February 2013; the statements were retroactively adjusted. Shares outstanding were 950,687 at June 30 and August 12, 2013.
Outlook, risks, and other notable matters
Management said it was evaluating possible industries and intended to pursue a business combination or acquisition, but had identified no target as of the filing. It expected to incur further legal, accounting, compliance, and acquisition-search costs and did not expect to generate revenue before a business combination. Management anticipated relying on loans or investment from insiders and said available funds might cover near-term needs, but those insiders are not obligated to provide support and there is no assurance of adequate financing or a completed transaction.
The company disclosed substantial doubt about its ability to continue as a going concern, citing recurring losses and no revenue-generating activities. It had $88,318 outstanding in advances and payables to officers/shareholders; the notes bear no interest, are payable on demand, and the company recorded imputed interest at 8%. Disclosure controls and procedures were reported ineffective; management said remediation costs would further strain limited capital. No legal proceedings were reported. The filing gives no quantified guidance.
Key facts for investors to verify
- Confirm the intended issuer: the supplied filing names Smartdata Corporation, not CleanSpark, Inc.
- Verify the company’s ability to fund operations given $403 in cash, $97,079 in current liabilities, and the going-concern warning.
- Review the terms, demand status, and related-party nature of the $88,318 in officer/shareholder advances and payables.
- Assess whether management identified or completed a business combination after the filing date; none was identified in this report.
- Consider the disclosed ineffective controls and the 1-for-39 reverse split when reviewing the company’s reporting and share history.