Filing identity and reporting period
The provided filing is a Form 10-Q for the quarter ended September 30, 2011, filed November 7, 2011. However, it identifies the registrant as Original Source Entertainment, Inc., a development-stage music-licensing company—not NeuroOne Medical Technologies Corp. The filing therefore does not appear to be the requested company’s filing.
Financial results
- For the three months ended September 30, 2011, royalty revenue was $812, general and administrative expense was $4,938, and net loss was $4,178. The comparable 2010 quarter reported revenue of $273, expense of $5,471, and net loss of $5,198.
- For the nine months ended September 30, 2011, royalty revenue was $5,101, general and administrative expense was $17,071, and net loss was $12,090. For the comparable 2010 period, revenue was $1,167, expense was $6,664, and net loss was $5,497.
- Operating loss for the first nine months of 2011 was $11,970, versus $5,497 in 2010. The filing attributes higher general and administrative expense primarily to public-offering filing, audit, and legal costs. Gross margin is not separately reported.
- The 2011 nine-month cash flow statement reports $11,970 of cash used in operations, no investing cash flow, and $7,750 of financing cash flow, including $3,500 of note borrowings and $4,250 from common-stock sales. It reports a $4,220 decrease in cash.
- Debt at September 30 is shown as $2,000 of current notes payable and $10,500 of noncurrent notes payable. Total liabilities are reported as $13,452, against total assets of $9,129 and negative stockholders’ equity of $4,323.
Liquidity, changes, and outlook
- The filing’s balance sheet reports cash of $9,129 at September 30, 2011, while MD&A states $4,909 and the cash flow statement reports ending cash of $4,909. The balance sheet also lists December 31, 2010 cash as $4,909. These conflicting figures make the period-end cash balance unclear.
- Management said available cash would fund current operations for about two months. It was pursuing a public offering and said raising at least $75,000 was important; no commitment for additional financing was in place. Management warned that if financing were unavailable, the company might substantially change its business plan, sell the company, or cease operations.
- If successful, the offering was expected to fund at least the next 12 months and support sales and marketing. The stated plan included expanding the song catalog and marketing and distribution initiatives, with estimated costs ranging from $1,000 to $100,000 by milestone. These plans depend on financing.
- The filing reports substantial doubt about the company’s ability to continue as a going concern without additional capital. It reports no material off-balance-sheet arrangements and no legal proceedings.
Key facts to verify
- Confirm the issuer: this filing names Original Source Entertainment, Inc., not NeuroOne Medical Technologies Corp.
- Reconcile September 30 cash: the balance sheet, cash flow statement, and MD&A show conflicting amounts and period labels.
- Confirm the balance-sheet share counts and equity figures, which are difficult to reconcile with the filing’s stated November 7 outstanding common shares of 4,585,000.
- Verify the status and proceeds of the proposed public offering, the availability of other financing, and the timing of near-term obligations.