Filing summary
Entity mismatch: The supplied filing identifies the registrant as Original Source Entertainment, Inc., not NeuroOne Medical Technologies Corp. Verify that this is the intended filing before relying on the figures below.
Business context and reporting period
This unaudited Form 10-Q covers the quarter and nine months ended September 30, 2014. The company describes itself as a development-stage business seeking to license songs for television and film, with limited activity and revenue.
Financial results and liquidity
| Metric | Q3 2014 | Nine months 2014 |
|---|---|---|
| Revenue | $139 | $607 |
| Gross profit | $139 | $607 |
| General and administrative expense | $6,259 | $26,644 |
| Net loss | $6,120 | $26,367 |
| Operating cash used | Not provided for quarter | $17,144 |
At September 30, 2014, cash was $599, total assets $599, current liabilities $26,111, and stockholders’ deficit $25,512. Current liabilities included $17,218 due to a related party, payable on demand, unsecured and non-interest-bearing, plus $8,893 of accounts payable. The resulting working-capital deficit was $25,512. No investing cash flows were reported for the nine-month period; financing provided $17,218, entirely from a related-party advance. No cash interest or income taxes were paid.
Changes versus prior comparable periods
- Q3 revenue declined from $252 to $139; net loss increased from $5,131 to $6,120, primarily due to higher general and administrative expense.
- Nine-month revenue declined from $1,109 to $607. Net loss improved from $27,561 to $26,367, mainly because interest expense fell by $4,721, partly offset by a $3,025 increase in general and administrative expense.
- During March 2014, related parties forgave $22,000 of notes payable and $1,242 of accrued interest, $6,000 of convertible notes and $952 of accrued interest, and $952 of related-party accounts payable. The filing records these amounts as additional paid-in capital. Separately, a related party advanced $17,218 during the first nine months.
Outlook, risks and other disclosures
Management states that losses and negative operating cash flow are expected to continue and that additional debt or equity financing will be needed. The company reports substantial doubt about its ability to continue as a going concern; financing is not assured, and the financial statements include no adjustments for the outcome of this uncertainty. Management reported no material capital expenditure commitments, no off-balance-sheet arrangements, and no material subsequent events through November 19, 2014. No specific financial guidance is provided.
Important facts to verify
- Confirm the registrant and filing match the intended company; this document names Original Source Entertainment, Inc.
- Verify the terms, status and ongoing availability of related-party funding, particularly the $17,218 demand advance.
- Assess the company’s ability to obtain financing and sustain operations given $599 cash, a $25,512 working-capital deficit and the stated going-concern doubt.
- Confirm the reported debt forgiveness and its classification in additional paid-in capital.