Filing Overview
Source filing: The provided document is a Form 10-Q for R&R Acquisition VI, Inc., not ADMA Biologics, Inc. It covers the quarter ended September 30, 2011, although the request metadata identifies ADMA Biologics and “2010 Q1.” The filing identifies R&R Acquisition VI as a development-stage, blank-check company and reports unaudited financial statements.
Business Context and Reporting Period
R&R Acquisition VI was organized to identify and complete a merger or other business combination with an operating company. As of September 30, 2011, it had no operations, employees, specific target, definitive business-combination agreement, or revenue. It remained classified as a shell company and smaller reporting company.
The company had 2,500,000 common shares outstanding as of October 28, 2011. It had 75,000,000 common shares authorized and 10,000,000 preferred shares authorized, with no preferred shares issued.
Financial Results and Position
| Metric | Three Months Ended September 30, 2011 | Comparable 2010 Period |
|---|---|---|
| Revenue | $0 | $0 |
| Total operating expenses | $5,175 | $4,644 |
| Net loss | $5,174 | $4,643 |
| Net loss per share | $0.00 | $0.00 |
| Net cash used in operating activities | $5,183 | $8,393 |
| Net cash provided by financing activities | $2,580 | $0 |
| Cash and cash equivalents at period end | $5,909 | $3,619 |
- Assets at September 30, 2011 were $5,909, consisting entirely of cash and cash equivalents.
- Accrued expenses were $9,809, resulting in negative working capital of $3,900 and stockholders’ deficit of $3,900.
- The company had no debt reported in the filing.
- Professional fees were $3,850 and other operating expenses were $1,325 for the quarter.
- Cumulative net loss from inception on June 2, 2006 through September 30, 2011 was $145,230.
- Cumulative net cash used in operating activities was $135,421, while cumulative financing proceeds and contributed capital totaled $141,330.
Material Changes Versus the Prior Comparable Period
- Operating expenses increased by $531, or approximately 11%, from $4,644 to $5,175, primarily because of higher filing fees.
- Net loss increased by $531, from $4,643 to $5,174.
- Operating cash use improved by $3,210, from $8,393 to $5,183.
- Financing activities provided $2,580 during the quarter, compared with no financing proceeds in the prior-year quarter.
- Ending cash declined from $8,512 at June 30, 2011 to $5,909 at September 30, 2011, despite the financing contribution.
- Additional paid-in capital increased from $138,500 to $141,080.
Outlook, Risks, Contingencies, and Unusual Items
- Management’s stated objective was to complete a business combination, but it had no definitive agreement and provided no assurance that a suitable transaction would occur.
- The company expected to have sufficient resources for only a single business combination, leaving investors exposed to the performance of one future target and limiting diversification.
- Funding was dependent on additional securities issuances, borrowings, or loans from existing stockholders or management; no assurance was provided that such funding would be available or obtained on acceptable terms.
- The filing states that the company had no revenues and no operations and would require additional financing to continue pursuing its business objective.
- A quarterly office-use and administrative-services agreement required payments of $500 per quarter to Kirk M. Warshaw, LLC.
- Subsequent to September 30, 2011, a stockholder contributed $15,000 of additional capital. This contribution was not included in the September 30, 2011 balance sheet.
- The company reported no off-balance-sheet arrangements and no material changes in internal control over financial reporting. Management concluded that disclosure controls and procedures were effective.
- Forward-looking statements were subject to risks involving financing, market conditions, competition, business-combination execution, and management’s assumptions.
Investor Verification Checklist
- Verify the issuer and reporting period: the supplied filing is for R&R Acquisition VI, Inc. for the quarter ended September 30, 2011, not ADMA Biologics for 2010 Q1.
- Confirm the company’s shell-company status, lack of operations and revenue, and absence of a definitive business-combination agreement.
- Review liquidity and funding dependency, including $5,909 of cash against $9,809 of accrued expenses before the subsequent $15,000 contribution.
- Assess the risk that the company may be unable to complete a business combination or obtain additional financing.
- Review the subsequent $15,000 stockholder contribution and its effect on liquidity and capitalization.