Business Context and Reporting Period
This Form 10-Q covers the quarterly period ended September 30, 2009, for FrameWaves, Inc. (Note: The input metadata listed "Nexttrip, Inc.", but the filing text explicitly identifies the registrant as FrameWaves, Inc.). The company is classified as a "Development Stage Company" and a "shell company" with no ongoing operations. It has not generated revenue since the fourth quarter of 2001. The company's current strategy involves seeking a business opportunity to merge with or acquire a target entity to become a reporting public company.
Key Financial Metrics
| Metric | Period Ended Sep 30, 2009 | Period Ended Sep 30, 2008 |
|---|---|---|
| Revenue | $0 | $0 |
| Net Loss (9 Months) | $(8,381) | $(6,097) |
| Net Loss (3 Months) | $(3,291) | $(1,424) |
| Cash Balance | $77 | $932 |
| Total Assets | $77 | $298 |
| Total Liabilities | $25,285 | $23,926 |
| Stockholders' Deficit | $(25,208) | $(23,628) |
| Debt (Note Payable) | $15,000 | $15,000 |
Liquidity: The company has a working capital deficit of $25,208. Cash on hand is $77. The company relies on shareholder contributions and related-party loans to fund operations.
Material Changes vs. Prior Period
- Increased Expenses: General and administrative expenses for the nine months ended September 30, 2009, rose to $7,481 from $5,212 in the prior year period. This increase is attributed to accounting, legal, and professional costs required for public reporting.
- Worsened Net Loss: The net loss for the nine-month period increased by approximately 37% to $8,381 compared to $6,097 in the prior year.
- Cash Depletion: Cash decreased from $298 at the end of 2008 to $77 at September 30, 2009, due to net cash used in operating activities of $221.
- Management Changes: Significant turnover occurred in August and October 2009. Thomas A. Thomsen and Susan Santage resigned in August; Alexander H. Cook was appointed and subsequently resigned in October, with Susan Santage resuming her roles as President, Secretary, and Treasurer.
Outlook, Risks, and Contingencies
- Going Concern: The filing explicitly states substantial doubt about the company's ability to continue as a going concern. Continued operations depend on raising additional capital through stock issuance or loans and generating revenue, neither of which is currently occurring.
- Capital Needs: Management anticipates operating expenses of $8,000 to $10,000 for the next twelve months. Current cash ($77) is insufficient to meet these needs. There are no existing commitments for additional financing.
- Business Strategy: The company is operating as a "blank check" company, seeking a merger or acquisition target. There is no assurance a target will be found or that the transaction will be successful.
- Related Party Debt: The company owes $15,000 to a director/stockholder on an unsecured note bearing 8% interest, due on demand.
Investor Verification Checklist
- Company Identity: Verify the registrant is FrameWaves, Inc., not Nexttrip, Inc. (as suggested in metadata).
- Cash Position: Confirm the extremely low cash balance of $77 and the lack of working capital.
- Related Party Transactions: Review the $15,000 note payable to a stockholder and the $3,490 accrued interest owed to a stockholder.
- Management Stability: Note the recent rapid turnover of officers and directors within the last two months of the reporting period.
- Revenue History: Acknowledge that the company has had zero revenue since 2001 and is currently in a development stage with no active business operations.