Filing identity and reporting period
The supplied filing is Parc Investments, Inc.’s unaudited Form 10-Q for the quarter ended March 31, 2021—not an Aeluma, Inc. filing or a 2020 Q1 report as stated in the request metadata. Parc describes itself as a shell/blank-check company seeking a business combination. It reports no definitive agreement or specific discussions with prospective candidates as of the filing date.
Financial performance and position
- Revenue: $0 for the quarter; the company had generated no revenue since inception.
- Expenses and profit: General and administrative expense was $10,859, resulting in a net loss of $10,859. Basic and diluted loss per share was reported as $(0.00), based on 5,000,000 weighted-average shares.
- Cash flow: Operating cash used was $359; there was no financing cash flow. Cash declined from $3,325 at December 31, 2020 to $2,966 at March 31, 2021.
- Assets and liquidity: Total assets were $2,966, entirely cash. Current liabilities were $45,500: $10,500 accrued expenses and a $35,000 stockholder note. Working capital was negative $42,534.
- Equity and taxes: Stockholders’ deficit was $42,534. The company disclosed approximately $9,000 in gross deferred tax assets related to net operating loss carryforwards, fully offset by a valuation allowance.
- Margins and debt: Revenue was zero, so a meaningful operating margin is not available. The $35,000 stockholder note is non-interest-bearing except following default and is repayable in connection with a business combination or specified transaction.
Changes versus prior period
Compared with December 31, 2020, cash decreased by $359, liabilities increased by $10,500 due to accrued expenses, and accumulated deficit increased by $10,859 to $43,034. The filing does not provide a prior-year comparable quarterly income statement or cash-flow period, so year-over-year operating comparisons are unavailable.
Outlook, risks, and unusual items
- Management plans to continue searching for an operating business to acquire or merge with and expects expenses for SEC reporting and transaction investigation. No transaction is assured.
- Management states that losses, negative working capital, and the stockholders’ deficit raise substantial doubt about the company’s ability to continue as a going concern for the 12 months following issuance. It intends to fund operations through additional borrowing under the existing note, but the stockholder has no obligation to advance further funds.
- The company has no operating cash flow and depends on additional financing or investment; the filing gives no assurance that funding will be available on acceptable terms.
- COVID-19 could disrupt the search for or completion of a business combination and could adversely affect a future target. The company also notes risks of selecting an early-stage or financially unstable target and the limited diversification expected from a single business combination.
- The filing reports no material pending legal proceedings, off-balance-sheet arrangements, unregistered equity sales, or defaults upon senior securities. Management concluded disclosure controls were effective and reported no material changes in internal control over financial reporting during the quarter.
Important facts to verify
- Confirm the issuer and period: the source is Parc Investments, Inc., quarter ended March 31, 2021; it does not match the Aeluma/2020 Q1 metadata.
- Confirm the stockholder-note terms, amount outstanding, repayment trigger, and whether further advances will be made.
- Assess available funding and the going-concern uncertainty, given $2,966 cash against $45,500 current liabilities.
- Check for subsequent developments in the company’s business-combination search and any changes in cash, liabilities, or share count.
- The contents page contains an apparent date inconsistency for the comparative balance sheet; the financial statements and notes identify the comparison date as December 31, 2020.