SEC Filing Summary: Innovative Acquisitions Corp. (10-Q)
Business Context and Reporting Period
This report covers the quarterly period ended March 31, 2010. The registrant is Innovative Acquisitions Corp., a Delaware corporation classified as a "shell company" and a "blank check" company. The entity was formed to pursue a business combination through the acquisition of or merger with an operating business. As of the filing date, the company has no specific business plan other than seeking a target and has generated no revenue since its inception on April 27, 2007.
Key Financial Metrics
| Metric | Q1 2010 | Q1 2009 | Cumulative (Inception to Mar 31, 2010) |
|---|---|---|---|
| Revenue | $0 | $0 | $0 |
| Net Loss | $(4,697) | $(6,007) | $(50,709) |
| Cash Balance (End of Period) | $41 | $67 | $41 |
| Total Assets | $41 | $2,408 (Dec 31, 2009) | N/A |
| Total Liabilities | $0 | $2,270 (Dec 31, 2009) | N/A |
| Stockholders' Equity | $41 | $138 (Dec 31, 2009) | $41 |
| Shares Outstanding | 3,000,000 | 3,000,000 | 3,000,000 |
Capital Contributions: During the quarter ended March 31, 2010, the company received $4,600 in cash capital contributions from directors. No new shares were issued for this amount.
Material Changes vs. Prior Period
- Liquidity: Cash on hand decreased significantly from $2,408 at December 31, 2009, to $41 at March 31, 2010. This reduction was driven by operating cash outflows of $6,967, partially offset by financing inflows of $4,600.
- Liabilities: Accounts payable were fully settled, dropping from $2,270 in the prior quarter to $0.
- Operating Expenses: General and administrative expenses decreased to $4,697 for the quarter, compared to $6,007 in the same period of 2009. Expenses primarily consist of legal, accounting, and audit fees related to regulatory filings.
Outlook, Risks, and Management Commentary
- Going Concern: The filing explicitly states that the company's ability to continue as a going concern is in substantial doubt. The company has no revenue and relies entirely on financial support from shareholders and the ability to secure equity financing.
- Business Plan: Management intends to continue efforts to locate suitable acquisition candidates. The company anticipates incurring costs for Exchange Act filings and acquisition investigations over the next 12 months.
- Risks: As a "blank check" company, there is no assurance that a business combination will be achieved. The company may acquire financially unstable or early-stage entities, introducing significant operational and financial risks.
- Subsequent Events: Management reported no significant or material transactions between March 31, 2010, and the filing date.
Investor Verification Checklist
- Critical Liquidity Position: Verify the company's ability to fund operations with only $41 in cash and no revenue stream.
- Capital Dependency: Confirm the willingness and ability of directors/shareholders to provide further capital contributions to sustain the shell company.
- Acquisition Timeline: Assess the likelihood of a business combination occurring before the company's cash reserves are fully depleted.
- Regulatory Compliance: Ensure the company remains current on its SEC reporting obligations to maintain its status as a publicly traded shell.