Business Context and Reporting Period
This Form 10-Q covers the quarterly period ended June 30, 2009, for FrameWaves, Inc. (Note: The request metadata listed "Nexttrip, Inc.", but the filing text identifies the registrant as FrameWaves, Inc.). The company is classified as a "Development Stage Company" and a "shell company" with no ongoing operations. It previously attempted a custom framing business but has been unsuccessful since 2001. The company is currently operating as a "blank check" company seeking a business combination or merger with a private entity to become a public reporting company.
Key Financial Metrics
| Metric | Six Months Ended June 30, 2009 | Six Months Ended June 30, 2008 | Balance Sheet (June 30, 2009) |
|---|---|---|---|
| Revenue | $0 | $0 | N/A |
| Net Loss | $(5,090) | $(4,674) | N/A |
| Cash and Cash Equivalents | N/A | N/A | $108 |
| Total Assets | N/A | N/A | $108 |
| Total Liabilities | N/A | N/A | $22,490 |
| Stockholders' Deficit | N/A | N/A | $(22,382) |
| Accumulated Deficit (Since 1993) | N/A | N/A | $(72,343) |
| Shares Outstanding | N/A | N/A | 1,258,994 |
Debt and Liquidity: The company has a $15,000 unsecured note payable to a stockholder/director bearing 8% interest, due on demand. Accrued interest on this note is $3,190. Accounts payable total $4,300. The company has negative working capital of $22,382.
Material Changes vs. Prior Period
- Net Loss Increase: Net loss for the six months ended June 30, 2009, increased to $5,090 from $4,674 in the same period in 2008.
- Expense Growth: General and administrative expenses rose to $4,490 (2009) from $4,089 (2008). Interest expense increased slightly to $600 from $585.
- Cash Position: Cash decreased from $298 at December 31, 2008, to $108 at June 30, 2009, reflecting a net cash outflow of $190 from operating activities.
- Liabilities: Total current liabilities decreased slightly from $23,926 to $22,490, primarily due to a reduction in accounts payable, though accrued interest increased.
Outlook, Risks, and Management Commentary
- Going Concern: The filing explicitly states that the company's ability to continue as a going concern is in doubt due to accumulated losses and negative working capital. Continued operations depend on raising additional capital and generating revenue.
- Capital Needs: Management anticipates operating expenses of $5,000 to $7,000 for the next twelve months. Current cash ($108) is insufficient to meet these needs. The company plans to seek capital through loans from officers, debt financing, or equity financing, but no commitments exist.
- Business Strategy: The company has no specific business plan or industry focus. It is actively seeking a target company for a merger or acquisition to provide a path to public markets for private entities.
- Risks: Significant risks include the inability to locate a suitable business opportunity, competition from other shell companies and venture capital firms, and the lack of management time dedicated to the company (estimated at 20 hours per month per officer).
Investor Verification Checklist
- Shell Status: Verify the company's status as a shell company with no operations and minimal assets ($108 cash).
- Related Party Debt: Confirm the terms of the $15,000 note payable to a director/stockholder, which is due on demand and bears 8% interest.
- Capital Sufficiency: Assess the immediate risk of insolvency given the $22,382 deficit and lack of committed funding for the projected $5,000–$7,000 annual operating budget.
- Management Commitment: Note that officers devote only approximately 20 hours per month to the company, which may impact the speed of finding a merger target.
- Historical Performance: Acknowledge that the company has generated no revenue since 2001 and has an accumulated deficit of over $72,000 since its 1993 quasi-reorganization.