SEC Filing Summary
Filing identity: The supplied Form 10-Q is for Olivia Ventures, Inc., not Compass Therapeutics, Inc. The report covers the quarter and nine-month period ended December 31, 2019 and was filed February 13, 2020. Olivia Ventures was a Delaware shell and blank-check company seeking a business combination; it had no operating business or revenue.
Business Context and Reporting Period
- Olivia Ventures was incorporated in March 2018 to identify and complete an acquisition, merger, reverse takeover, or similar business combination.
- The company reported no definitive agreement or specific discussions with a potential target as of the filing date.
- The company was designated a smaller reporting company, emerging growth company, shell company, and blank-check company.
- The financial statements are unaudited interim statements prepared under U.S. GAAP.
Financial Highlights
| Metric | Three Months Ended December 31, 2019 | Nine Months Ended December 31, 2019 | Comparable Prior Period |
|---|---|---|---|
| Revenue | $0 | $0 | $0 |
| General and administrative expense | $10,238 | $27,707 | $9,267 and $24,946, respectively |
| Interest expense | $1,444 | $3,840 | $875 and $2,226, respectively |
| Net loss | $11,682 | $31,547 | $10,142 and $27,172, respectively |
| Basic and diluted loss per share | $0.00 | $0.01 | $0.00 and $0.01, respectively |
| Operating cash flow | Not provided for the quarter | $(24,707) | $(22,946) |
| Financing cash flow | Not provided for the quarter | $20,985 | $27,625 |
Balance Sheet and Liquidity
- Cash was $1,144 at December 31, 2019, compared with $4,866 at March 31, 2019.
- Total assets were $1,144, consisting entirely of cash.
- Current liabilities were $103,280, including $10,170 of accounts payable and accrued expenses and $93,110 classified as a stockholder note payable on the balance sheet.
- The note payable disclosure states that the total amount due, including accrued interest, was $100,280, creating a classification or presentation difference that should be reconciled.
- Stockholders’ deficit was $102,136, compared with $70,589 at March 31, 2019.
- Cash declined by $3,722 during the first nine months of fiscal 2020, from $4,866 to $1,144.
- The company had no capital expenditures, material off-balance-sheet arrangements, or revenue-generating activities.
Material Changes Versus the Prior Comparable Period
- Nine-month net loss increased 16.1%, from $27,172 to $31,547.
- Nine-month general and administrative expense increased 11.1%, from $24,946 to $27,707.
- Nine-month interest expense increased 72.5%, from $2,226 to $3,840.
- Operating cash use increased from $22,946 to $24,707.
- Financing proceeds declined from $27,625 to $20,985, consisting primarily of additional advances under the stockholder note.
- Cash shifted from $4,679 at December 31, 2018 to $1,144 at December 31, 2019.
Guidance, Outlook, Risks, and Unusual Items
- Management expects to continue searching for a suitable business combination and anticipates expenses for SEC filings, investigation, analysis, and transaction execution.
- Management stated that it expects to finance operations through additional borrowings from the existing note, equity financing, reverse-merger proceeds, or related-party advances, but no funding is assured.
- The financial statements identify substantial doubt about the company’s ability to continue as a going concern for the twelve months following issuance.
- The company had approximately $103,000 of accumulated losses and net operating loss carryforwards, but recorded a full valuation allowance against the approximately $22,000 deferred tax asset.
- The stockholder note bears interest at 6% annually and may accelerate upon default; the rate increases to 18% after the specified post-default period.
- Office space was provided at no charge by the sole officer and a stockholder.
- There were no material legal proceedings, unregistered securities sales, senior-security defaults, or reported changes in internal control. Management concluded that disclosure controls were effective.
Facts Investors Should Verify
- Confirm the issuer identity: the supplied filing is for Olivia Ventures, Inc., not Compass Therapeutics, Inc.
- Reconcile the balance-sheet stockholder note payable of $93,110 with the disclosed total amount due of $100,280, including accrued interest.
- Assess the going-concern warning and whether additional related-party financing was obtained after December 31, 2019.
- Verify whether the company completed or announced any business combination after the filing date.
- Review the terms, repayment trigger, default provisions, and related-party status of the stockholder promissory note.
- Confirm the filing period, because the supplied metadata labels the filing “2019 Q3,” while the Form 10-Q states that the quarter ended December 31, 2019.