SEC Filing Summary: Rub Music Enterprises, Inc. (10-Q)
Business Context and Reporting Period
This Form 10-Q covers the quarterly period ended March 31, 2008. The registrant is Rub Music Enterprises, Inc., a Nevada corporation. Although the request metadata referenced "SANUWAVE Health, Inc.", the filing text explicitly identifies the company as Rub Music Enterprises, Inc. The company is classified as a development stage company that ceased its original music library operations effective January 1, 2007. It is currently seeking a business opportunity, specifically looking to merge with or acquire a target company to become a public reporting entity.
Key Financial Metrics
| Metric | Q1 2008 | Q1 2007 | Cumulative (Development Stage) |
|---|---|---|---|
| Revenue | $0 | $0 | $0 |
| Net Loss | $(1,799) | $(1,502) | $(37,491) |
| Operating Expenses | $1,799 | $667 | $35,856 |
| Cash Balance (End of Period) | $2,359 | $12,745 | $2,359 |
| Total Assets | $2,359 | N/A | N/A |
| Total Liabilities | $50,579 | N/A | N/A |
| Working Capital | $(48,220) | N/A | N/A |
Debt and Liquidity: The company has no notes payable outstanding. Current liabilities consist of Accounts Payable ($25,603), Accounts Payable - Related Party ($21,776), and Income Taxes Payable ($3,200). The company has a significant working capital deficiency.
Material Changes vs. Prior Period
- Operating Expenses: General and administrative expenses increased to $1,799 in Q1 2008 from $667 in Q1 2007. The 2008 expenses consisted primarily of stock transfer fees and bank charges, whereas 2007 expenses included vendor service charges.
- Interest Expense: Interest expense was $0 in Q1 2008, compared to $35 in Q1 2007. The note payable associated with the 2007 interest was repaid during that prior period.
- Cash Flow: Net cash used in operating activities decreased significantly to $2,790 in Q1 2008 from $14,476 in Q1 2007. The 2007 period included significant repayments of related party payables and accrued interest, which did not occur in 2008.
- Income Taxes: No income tax expense was recorded in Q1 2008, compared to $800 in Q1 2007.
Outlook, Risks, and Management Commentary
Going Concern: The filing includes a substantial doubt disclosure regarding the company's ability to continue as a going concern. The company has current liabilities exceeding current assets and a stockholders' deficit. Management plans to raise necessary funds through the sale of common stock, though there is no assurance of success.
Strategy: The company is not generating revenue from operations. Its primary focus is locating and negotiating with a target company for a merger or asset contribution to facilitate a reverse merger or similar transaction.
Risks: No material changes to risk factors were reported since the previous 10-K. The primary risks remain the lack of operating history, the need for additional capital, and the uncertainty of finding a suitable merger target.
Unusual Items: There are no pending legal proceedings. There were no unregistered sales of equity securities during the quarter.
Investor Verification Checklist
- Identity Discrepancy: Verify why the request metadata listed "SANUWAVE Health, Inc." while the filing is for "Rub Music Enterprises, Inc."
- Related Party Debt: Confirm the status of the $21,776 owed to the former CEO for royalty rights and intangible assets.
- Cash Runway: Assess the sufficiency of the $2,359 cash balance against the $50,579 in current liabilities.
- Merger Progress: Investigate any updates on the search for a target company for merger or acquisition, as this is the sole stated business activity.
- Stockholder Deficit: Review the cumulative deficit of $(37,491) and the negative additional paid-in capital of $(91,107).