Business Context and Reporting Period
This Form 10-Q covers the quarterly period ended March 31, 2011, for Zeta Acquisition Corp. II (not Whitehawk Therapeutics, Inc., as indicated in the metadata). The registrant is a Delaware corporation organized as a "blank check" company and a shell company. Its primary objective is to investigate and acquire a target business to achieve long-term growth potential. The company has no specific business plan or purpose other than to merge with an unidentified company.
Key Financial Metrics
| Metric | Three Months Ended Mar 31, 2011 | Cumulative from Inception (Nov 16, 2007) to Mar 31, 2011 |
|---|---|---|
| Revenue | $0 | $0 |
| Net Loss | $(5,154) | $(96,145) |
| Cash and Cash Equivalents | $24,634 | $24,634 |
| Total Assets | $25,259 | $25,259 |
| Total Liabilities | $71,404 | $71,404 |
| Stockholders' Deficit | $(46,145) | $(46,145) |
| Notes Payable (Stockholders) | $60,000 | $60,000 |
| Net Cash Used in Operating Activities | $(2,264) | $(85,366) |
Material Changes vs. Prior Period
- Net Loss: The net loss for the three months ended March 31, 2011, was $5,154, an increase from $4,306 in the same period in 2010. This increase is attributed to higher interest expense and professional fees.
- Liquidity: Cash and cash equivalents decreased from $26,898 at December 31, 2010, to $24,634 at March 31, 2011, due to operating cash outflows.
- Liabilities: Total liabilities increased slightly from $70,389 to $71,404, driven by an increase in accounts payable and accrued expenses.
- Operations: The company continues to have no revenue and remains in the development stage, incurring costs solely for organizational efforts and regulatory compliance.
Outlook, Risks, and Management Commentary
- Going Concern: Management explicitly states that the company's ability to continue as a going concern is dependent on its ability to generate future profitable operations or obtain necessary financing. There is no assurance that additional funding will be available.
- Business Plan: The company intends to locate a suitable acquisition candidate. It anticipates incurring costs related to filing Exchange Act reports and investigating potential acquisitions over the next 12 months.
- Risks: The company is a "shell company" with nominal assets. It faces significant risks associated with the selection of a business combination, including the potential acquisition of financially unstable or early-stage companies. The company relies on related parties for funding and office space.
- Unusual Items: The company utilizes office space and equipment of an officer and director at no cost. Interest of $3,612 is accrued and unpaid on stockholder notes.
Investor Verification Checklist
- Verify the company's current cash balance of $24,634 against the $71,404 in total liabilities to assess immediate solvency risks.
- Confirm the status of the $60,000 in notes payable to stockholders, which bear 6% interest and are due on demand.
- Investigate any recent communications regarding a potential business combination or reverse merger, as none have been identified to date.
- Review the company's ability to secure additional financing from related parties or third parties to fund ongoing operations and regulatory filings.
- Check for any updates on the "blank check" status and compliance with SEC regulations for shell companies.