SEC Filing Summary: Plastron Acquisition Corp. II
Business Context and Reporting Period
This Form 10-Q covers the quarterly period ended March 31, 2008. The registrant is Plastron Acquisition Corp. II, a Delaware corporation incorporated on January 24, 2006. The company is classified as a "shell company" and a "blank check" company in the development stage. Its sole purpose is to raise capital to pursue a merger, acquisition, or business combination with an unidentified operating business. The company has no active operations and has generated no revenue since inception.
Key Financial Metrics
| Metric | Q1 2008 (Unaudited) | Q1 2007 (Unaudited) | Cumulative (Inception to Mar 31, 2008) |
|---|---|---|---|
| Revenue | $0 | $0 | $0 |
| Net Loss | $(2,856) | $(4,688) | $(44,463) |
| Cash and Cash Equivalents | $187 | $25,437 | $187 |
| Total Assets | $187 | $25,437 | $187 |
| Total Liabilities | $14,650 | $13,451 | $14,650 |
| Stockholders' Deficit | $(14,463) | $(11,607) | $(14,463) |
| Working Capital | $(14,463) | $(11,607) | $(14,463) |
Debt and Liquidity: The company holds a related-party note payable of $12,500 (principal) with accrued interest of $1,076. Cash flow from operating activities for the quarter was $(1,657). The company has no debt other than the related-party note.
Material Changes vs. Prior Period
- Cash Position: Cash and cash equivalents decreased significantly from $1,844 at December 31, 2007, to $187 at March 31, 2008, a reduction of $1,657 due to operating losses.
- Liabilities: Total current liabilities increased from $13,451 to $14,650, driven by an increase in accounts payable ($1,074) and accrued interest ($125).
- Operating Expenses: General and administrative expenses decreased to $2,731 for the quarter ended March 31, 2008, compared to $4,563 in the same period in 2007. This reduction is attributed to lower professional service fees required for the current quarter's reporting compared to the prior year's registration statement filing.
Outlook, Risks, and Management Commentary
Going Concern: Management explicitly states that the company's financial condition raises substantial doubt about its ability to continue as a going concern. The company has an accumulated deficit of $(44,463) and a working capital deficiency. Continued operations depend on the issuance of additional shares or loans from stockholders and management.
Future Plans: The company intends to continue searching for a suitable acquisition candidate. Costs for the next 12 months (filing reports, acquisition costs) are expected to be funded by treasury cash, fee deferrals, or additional loans/investments from insiders.
Subsequent Events: On April 15, 2008, following the period end, the company received additional loans totaling $10,000 from its President, Secretary, and a Director. These notes bear interest at 8.25% per annum.
Risks: The company is a "blank check" company with no specific business plan. There is no assurance a business combination will be consummated. The company is subject to risks associated with early-stage companies and the potential inability to secure necessary financing.
Investor Verification Checklist
- Capital Adequacy: Verify the company's ability to fund operations beyond the current quarter given the cash balance of only $187 and the working capital deficit.
- Related Party Transactions: Review the terms of the $12,500 existing note and the subsequent $10,000 in loans from management, noting the interest rates and maturity conditions tied to a business combination.
- Shell Company Status: Confirm the company's status as a shell company and the regulatory implications for trading its securities (penny stock rules).
- Going Concern: Assess the likelihood of the company raising additional capital before its cash reserves are fully depleted.