Filing summary
Entity and period: The supplied filing is Spatializer Audio Laboratories, Inc.’s Form 10-K for the fiscal year ended December 31, 2014—not an Enveric Biosciences filing or a quarterly report. Investors should verify the issuer and filing before relying on this summary.
Business context
Spatializer discontinued its operating business in 2007 and describes itself as a shell company with no employees or operating activities. It is seeking an acquisition, merger partner, or other business combination, but reports no agreement or identified target.
Financial performance and liquidity
| Metric | 2014 | 2013 |
|---|---|---|
| Revenue and gross profit | $0 | $0 |
| General and administrative expense | $32,811 | $27,211 |
| Other income | $0 | $28,500 |
| Net income (loss) | $(33,644) | $(161) |
| Net cash used in operating activities | $(43,164) | $(21,632) |
| Net cash provided by financing activities | $48,000 | $20,500 |
| Cash and cash equivalents, year-end | $5,085 | $249 |
| Total current liabilities, year-end | $8,956 | $24,695 |
Year-end 2014 assets were $5,085, consisting entirely of cash; stockholders’ deficit was $3,871. Accounts payable and accrued liabilities were $8,956, and no officer loans were outstanding at year-end. The filing provides no operating margin to assess because the company had no revenue or operating business.
Material changes and unusual items
- Net loss widened to $33,644 from $161, largely because 2013 included $28,500 of income from forgiveness of debt and 2014 had higher G&A expense.
- Operating cash use increased by $21,532 year over year. The company raised $50,000 in 2014 through a share issuance to Lone Star Value Investors, LP, an entity controlled by a director/officer at the time; it also repaid $2,000 of officer loans.
- Common shares outstanding rose to 15,409,999 from 12,142,025. The filing reports that a principal shareholder beneficially owned 63.49% of the shares as of March 30, 2015.
Outlook, risks, and contingencies
Management says additional financing may be needed to meet reporting and other expenses and pursue a business combination; it has no financing arrangement and gives no assurance of obtaining funds or completing a transaction. The company warns it may have to dissolve or seek bankruptcy protection if it cannot maintain liquidity. Both management and the independent auditor identify substantial doubt about the company’s ability to continue as a going concern; the financial statements include no adjustments for possible outcomes. No specific revenue, earnings, or transaction guidance is provided.
Other cited risks include no revenue source, extremely limited cash, possible dilution from future financing or a business combination, illiquid and volatile penny-stock trading, concentrated voting control, competition for acquisition targets, and uncertainty about any target’s business and management. The auditor issued an unqualified opinion on the financial statements, while noting the going-concern uncertainty. Management reported effective disclosure controls and internal control over financial reporting; the auditor did not provide an internal-control attestation.
Important facts for investors to verify
- Confirm the filing belongs to Spatializer Audio Laboratories, Inc. and the fiscal year ended December 31, 2014; the request metadata names a different company and period.
- Review the going-concern disclosure against the company’s $5,085 cash balance, $8,956 current liabilities, and continuing cash burn.
- Verify the related-party share issuance, ownership concentration, and any subsequent financing or business-combination developments.
- Check later filings for changes in shell-company status, liquidity, share count, and listing or trading venue.