SEC Filing Summary: Plastron Acquisition Corp. II
Business Context and Reporting Period
This Form 10-Q covers the quarterly period ended March 31, 2009. The registrant is Plastron Acquisition Corp. II, a Delaware corporation and "shell company" formed in 2006. The company is in the development stage with no active operations, existing solely to raise capital for a potential merger or acquisition with an operating business. The filing identifies the company as a "blank check" company with no specific business plan other than seeking a business combination.
Key Financial Metrics
| Metric | Q1 2009 (Unaudited) | Q1 2008 (Unaudited) | Cumulative (Inception to Mar 31, 2009) |
|---|---|---|---|
| Revenue | $0 | $0 | $0 |
| Net Loss | $(7,204) | $(2,856) | $(62,012) |
| Cash and Cash Equivalents | $7,399 | $187 | $7,399 |
| Total Assets | $7,399 | $187 | $7,399 |
| Total Liabilities | $39,411 | $25,390 | $39,411 |
| Stockholders' Deficit | $(32,012) | $(24,808) | $(32,012) |
| Working Capital | $(32,012) | $(24,808) | $(32,012) |
Debt Structure: Total liabilities consist entirely of related-party obligations, including a $37,000 note payable and $2,411 in accrued interest. No accounts payable were outstanding as of March 31, 2009.
Material Changes vs. Prior Period
- Net Loss Increase: Net loss for the quarter increased to $(7,204) from $(2,856) in the prior year period, driven by higher general and administrative expenses ($6,829 vs. $2,731) and increased interest expense ($375 vs. $125).
- Liquidity Improvement: Cash balances increased significantly from $582 at year-end 2008 to $7,399 at March 31, 2009. This was funded by a $14,500 loan from a related party (Broadband Capital Management, LLC).
- Liability Growth: Total current liabilities rose to $39,411 from $25,390, primarily due to the new related-party loan and accrued interest.
Outlook, Risks, and Management Commentary
Going Concern: Management explicitly states that the company's recurring losses, accumulated deficit of $(62,012), and working capital deficiency raise substantial doubt about its ability to continue as a going concern. The financial statements do not include adjustments for potential asset recoverability or liability classification resulting from this uncertainty.
Capital Strategy: The company has no revenue and relies entirely on additional financing from stockholders, management, or related parties to fund operations and pursue a business combination. Management plans to issue more common stock to raise funds.
Risks:
- Related Party Dependence: All debt is owed to related parties (directors and their affiliated broker-dealer). Failure to secure continued funding could halt operations.
- Default Provisions: A new note issued in March 2009 includes a default clause where the interest rate jumps to 18% per annum if an event of default occurs (e.g., bankruptcy or failure to pay).
- Acquisition Uncertainty: There is no assurance the company will successfully identify or consummate a merger with an operating business.
Investor Verification Checklist
- Related Party Transactions: Verify the terms and enforceability of the $37,000 in related-party debt and the 8.25% interest rate structure.
- Cash Runway: Assess whether the current cash balance of $7,399 is sufficient to cover filing fees and professional costs for the next 12 months without additional capital.
- Going Concern Status: Confirm if the company has secured the additional equity financing mentioned as necessary to avoid insolvency.
- Shell Company Status: Verify the company's continued compliance with SEC rules regarding shell companies and penny stock regulations.