Business Context and Reporting Period
This Form 10-Q covers the quarterly period ended September 30, 2012, for Silverwood Acquisition Corporation (not Authid Inc., as indicated in the metadata). The registrant is a Delaware corporation classified as a "development stage company" and a "shell company." Its primary purpose is to locate and negotiate a business combination (merger or acquisition) with a private entity to facilitate that entity's transition to a public reporting company. As of the filing date, the company has no active operations other than administrative activities and share issuance.
Key Financial Metrics
| Metric | Value (Sep 30, 2012) | Value (Dec 31, 2011) |
|---|---|---|
| Cash and Cash Equivalents | $2,000 | $2,000 |
| Total Assets | $2,000 | $2,000 |
| Total Liabilities | $0 | $400 |
| Stockholders' Equity | $2,000 | $1,600 |
| Accumulated Deficit | ($2,843) | ($1,343) |
| Revenues (9 months) | $0 | N/A |
| Net Loss (9 months) | ($2,843) | N/A |
| Net Loss (3 months) | ($1,500) | N/A |
| Shares Outstanding | 20,000,000 | 20,000,000 |
Liquidity and Debt: The company holds minimal cash ($2,000) and has no outstanding debt as of September 30, 2012. It has no operating cash flows.
Material Changes vs. Prior Period
- Liabilities: Accrued liabilities decreased from $400 at year-end 2011 to $0 at September 30, 2012.
- Equity: Stockholders' equity increased by $400, driven by the reduction in accrued liabilities and additional paid-in capital contributions.
- Operations: The company continued to incur operating expenses without generating revenue, resulting in a net loss of $1,500 for the quarter and $2,843 for the nine-month period.
Outlook, Risks, and Contingencies
Going Concern: The filing explicitly states that the company's continuation as a going concern is dependent on its ability to obtain additional financing and successfully complete a business combination. It has sustained operating losses since inception.
Financial Support: Tiber Creek Corporation, an entity affiliated with management, has agreed to pay all expenses incurred by Silverwood until a business combination is effected, without repayment.
Potential Business Combination: On April 16, 2012, Tiber Creek Corporation entered into negotiations with American Performance Technologies, LLC. The proposed transaction involves:
- Redemption of shares held by current shareholders, leaving each with 75,000 shares.
- Resignation of current directors and appointment of new officers.
- Issuance of common stock to American Performance Technologies, LLC.
Status: As of September 30, 2012, the change in control had not yet occurred. A Form 8-K will be filed upon completion.
Risks: There is no assurance that the company will locate a target company or become profitable. The company has no capital to provide to acquisition candidates.
Investor Verification Checklist
- Shell Status: Verify the company's status as a shell company with no active operations or revenue.
- Going Concern: Confirm reliance on affiliated party (Tiber Creek Corporation) for funding operations.
- Transaction Status: Monitor the status of the proposed combination with American Performance Technologies, LLC, as the change in control was pending as of the filing date.
- Capital Structure: Note the high number of shares outstanding (20 million) relative to the minimal cash assets ($2,000).
- Management Affiliation: Verify the relationship between Silverwood and Tiber Creek Corporation regarding expense reimbursement and strategic direction.