Business Context and Reporting Period
This Form 10-Q covers the quarterly period ended September 30, 2010, for Plastron Acquisition Corp. II. The registrant is a Delaware corporation classified as a "shell company" and a "blank check" company in the development stage. Its primary objective is to raise capital to pursue a business combination, such as a merger or acquisition, with an unidentified operating business. The company has no specific business plan or operations other than organizational efforts and seeking a target.
Key Financial Metrics
| Metric | Value (Sep 30, 2010) | Value (Dec 31, 2009) |
|---|---|---|
| Revenue | $0 | $0 |
| Net Loss (9 Months) | $(23,329) | $(23,030) (Prior Year) |
| Cash and Cash Equivalents | $663 | $6,559 |
| Total Assets | $663 | $6,559 |
| Total Liabilities | $72,845 | $55,412 |
| Stockholders' Deficit | $(72,182) | $(48,853) |
| Working Capital | $(72,182) | $(48,853) |
| Accumulated Deficit | $(103,110) | $(79,781) |
Debt and Liquidity: The company has no long-term debt. Current liabilities consist entirely of related-party obligations: a note payable of $65,100 and accrued interest of $7,745. The company has a significant working capital deficiency.
Material Changes vs. Prior Period
- Cash Position: Cash decreased by approximately 90% from $6,559 at year-end 2009 to $663 at September 30, 2010, due to operating cash outflows of $21,996.
- Liabilities: Total current liabilities increased by $17,433 (31%) primarily due to an increase in the related-party note payable (from $49,000 to $65,100) and accrued interest.
- Operating Expenses: General and administrative expenses for the nine months ended September 30, 2010, were $20,261, a slight decrease from $21,202 in the same period in 2009.
- Net Loss: The net loss for the nine-month period increased slightly to $23,329 from $23,030 in the prior year period.
Outlook, Risks, and Management Commentary
Going Concern: Management explicitly states that the company's ability to continue as a going concern is in substantial doubt. The company has not generated revenue, has an accumulated deficit of $103,110, and relies on additional financing to meet obligations.
Future Plans: The company intends to fund operations through the issuance of additional common stock or loans from related parties. The primary business activity for the next 12 months is to locate and consummate a business combination (reverse merger or acquisition).
Risks:
- Liquidity Risk: There is no assurance that the company can secure additional funding. If funding is unavailable, the company may not be able to implement its plan of operations.
- Related Party Dependence: The company is heavily dependent on loans from related parties (Broadband Capital Management, LLC and directors Michael Rapp, Philip Wagenheim, and Clifford Chapman) to fund operations.
- Blank Check Status: As a shell company with no operations, the company is subject to risks associated with early-stage development and the uncertainty of finding a suitable acquisition target.
Unusual Items: The filing contains no unusual items other than the standard operational costs of a shell company (legal, accounting, and audit fees).
Investor Verification Checklist
- Cash Runway: Verify if the remaining cash balance of $663 is sufficient to cover filing fees and professional services for the upcoming quarter.
- Related Party Debt: Confirm the terms and repayment status of the $65,100 note payable and $7,745 accrued interest owed to related parties.
- Capital Raising: Assess the likelihood of the company successfully issuing new equity or securing further loans to avoid insolvency.
- Acquisition Progress: Determine if there are any specific, identified target companies for a potential merger, as none are disclosed in this filing.
- Share Count: Note that 2,061,856 shares of common stock are outstanding; verify if any new issuances have occurred since the filing date.