SEC Filing Summary: SMSA Ballinger Acquisition Corp. (Form 8-K)
Business Context and Reporting Period
Date of Report: December 1, 2015
Registrant: SMSA Ballinger Acquisition Corp. (formerly a shell company)
Event: Completion of a reverse acquisition of Tiger Trade Technologies, Inc. ("Tiger Trade").
Business Overview: Post-transaction, the Company operates as a development-stage entity focused on the "TT System," a proprietary algorithm-driven real-time analytical platform for day and swing traders on OTC and NASDAQ markets. The Company has no customers and has not generated revenue to date.
Key Financial Metrics
Revenue: $0 (No revenue generated since inception of Tiger Trade in April 2014).
Net Loss (Nine Months Ended Sept 30, 2015): $(490,199) for Tiger Trade, including a $245,000 cancellation fee.
Cash Position (Sept 30, 2015): $236,786.
Debt/Liabilities: Total current liabilities of $29,245 as of September 30, 2015 (primarily accounts payable). No long-term debt reported.
Capital Structure (Post-Transaction): 20,835,010 shares of Common Stock and 5,000,000 shares of Series A Convertible Preferred Stock outstanding.
Liquidity: Management states current cash is insufficient to fund the 12-month plan of operation.
Material Changes vs. Prior Period
- Change in Control: Tiger Trade stockholders acquired approximately 88.64% of the Company's fully-diluted capital stock. Tiger Trade is now a wholly-owned subsidiary.
- Management Change: Orsolya Peresztegi resigned as sole officer/director. Gust Kepler was appointed President, CEO, CFO, Secretary, and Director.
- Share Cancellation: 7,095,602 shares of Company Common Stock were cancelled as a condition of the merger, with Tiger Trade paying a $245,000 fee to the former officer.
- Expense Increase: Operating expenses for the nine months ended September 30, 2015, totaled $245,199, a significant increase from the prior year period due to software development costs and the merger cancellation fee.
Guidance, Outlook, and Risks
Outlook: The TT System is expected to be completed by the end of February 2016. The Company plans to sell subscriptions via an online platform.
Capital Requirements: Management estimates a need for $1 million to $3 million over the next 12 months to complete development and execute marketing plans. No financing is currently secured.
Risks:
- Going Concern: The Company has no revenue and expects to incur losses. Continued operations depend on raising additional capital, which may not be available.
- Development Risk: Failure to successfully develop or commercialize the TT System could result in the loss of the entire investment.
- Concentration of Control: Gust Kepler controls approximately 57.67% of voting power (including 100 votes per share on Preferred Stock), giving him complete control over corporate matters.
- Liquidity: Common stock is quoted on OTC Pink but does not actively trade; subject to "penny stock" rules.
Investor Verification Checklist
- Verify the status of the $1M-$3M financing required for the 12-month plan of operation.
- Confirm the technical feasibility and projected completion date of the TT System (targeted Feb 2016).
- Review the related-party consulting agreement with G2 International, Inc. (owned by CEO Gust Kepler) regarding ongoing fees and services.
- Assess the impact of the $245,000 cancellation fee on the Company's remaining cash reserves.
- Monitor the lack of active trading volume for the Company's common stock on the OTC Pink market.