Filing identity and reporting period
The supplied filing is for Mascot Properties, Inc., not Mama’s Creations, Inc. It is a Form 10-Q for the quarter ended March 31, 2012, covering the fiscal third quarter and nine months of the year ended June 30, 2012. The filing’s identity and period do not match the request metadata.
Mascot describes itself as a development-stage real estate management company focused primarily on student housing and services near universities. It reports no significant operations to date.
Financial results and liquidity
- Revenue: None for the three or nine months ended March 31, 2012, or since inception.
- Expenses and loss: Three-month operating expenses and net loss were $2,895, versus $1,900 a year earlier. Nine-month operating expenses and net loss were $17,834, versus $4,360 in the prior-year period. Basic loss per share was reported as $0.00, rounded.
- Cash flow: Nine-month cash used in operations was $21,834, compared with $3,100 in the prior-year period. Related-party notes provided $22,225 in financing; cash increased by $391 to $404.
- Balance sheet at March 31, 2012: Cash and total assets were $404; current liabilities were $42,275, including $40,775 owed to related parties and $1,500 in accounts payable and accrued expenses. Stockholders’ deficit was $41,871, and accumulated deficit was $102,591.
- Debt and liquidity: Officer loans bear no interest and have no definitive repayment terms; repayment is contingent on available funds. The company says it lacks sufficient cash for operations. No margins are meaningful because there was no revenue.
- Capitalization: 104,208,000 common shares were outstanding at March 31, 2012 and May 15, 2012. No preferred shares were outstanding.
Changes versus prior comparable periods
Nine-month loss rose to $17,834 from $4,360, while operating cash use increased to $21,834 from $3,100. Related-party borrowing increased by $22,225 in the current nine-month period, compared with $2,400 in the prior-year period. Cash rose from $13 at June 30, 2011 to $404 at March 31, 2012, while current liabilities increased from $24,050 to $42,275. Revenue remained zero.
Outlook, risks and other notable items
- Management estimates it needs at least $39,000 for the next 12 months, including $24,000 in travel and operating costs and $15,000 in marketing. The founder and majority shareholder, who owns 77%, has committed to cover cash shortfalls for these planned expenses; additional financing may also be sought.
- Management aims to secure management contracts for at least ten properties and establish ten strategic alliances over the next 12 months. It reports preliminary discussions but no signed property-management contracts; the timing and ability to generate revenue are uncertain. The company describes expected property-owner fees of 10%–15% of gross monthly rents.
- The filing states that substantial doubt exists about the company’s ability to continue as a going concern. Continued operations depend on shareholder support, financing, and achieving profitable operations; failure to obtain funds could force suspension or cessation of operations.
- The company has an employment agreement with its president providing for an $85,000 annual salary and benefits only after a $300,000 revenue milestone; no salary or benefits had been paid or accrued because the milestone was unmet.
- Management concluded disclosure controls and procedures were not effective. No material changes in internal control over financial reporting were reported for the quarter. The company reported no material litigation or off-balance-sheet arrangements.
- No formal financial guidance is provided. The filing cautions that forward-looking plans are uncertain and that interim results are not necessarily indicative of a full year.
Important facts for investors to verify
- Confirm that this is the intended filing: the document names Mascot Properties, Inc., not Mama’s Creations, Inc., and reports a quarter ended March 31, 2012.
- Verify the founder’s stated commitment to fund planned expenses, its scope and duration, and whether any funding has actually been provided.
- Check whether the company obtained property-management contracts, strategic alliances, or external financing after the reporting date; management disclosed none signed as of the filing.
- Assess the going-concern warning alongside the $404 cash balance, $42,275 of current liabilities, and related-party loans with no definitive repayment terms.
- Review the ineffective disclosure-controls conclusion and whether subsequent filings describe remediation.