Business Context and Reporting Period
This Form 10-Q covers the quarterly period ended March 31, 2013, for B-Maven, Inc. (referred to as Iqstel Inc in the request metadata, but identified as B-Maven, Inc. in the filing). The company is a development-stage entity incorporated in Nevada, engaged in developing, manufacturing, and marketing the "E-Scentual" skin care line. As of the filing date (May 20, 2013), the company had 10,000,000 shares of common stock outstanding.
Key Financial Metrics
| Metric | Three Months Ended Mar 31, 2013 | Nine Months Ended Mar 31, 2013 | Balance Sheet (Mar 31, 2013) |
|---|---|---|---|
| Revenue | $1,130 | $1,755 | - |
| Cost of Goods Sold | $213 | $318 | - |
| Gross Margin | $917 (81.2%) | $1,437 (81.9%) | - |
| Net Loss | $(6,635) | $(30,629) | - |
| Cash and Equivalents | - | - | $671 |
| Total Assets | - | - | $1,195 |
| Total Liabilities | - | - | $72,926 |
| Stockholders' Deficit | - | - | $(71,731) |
| Working Capital | - | - | $(72,043) |
Debt and Liquidity: The company holds no lines of credit. Liabilities consist primarily of accrued expenses ($50,950), loans from unrelated parties ($15,638), and loans from related parties ($1,338). Cash flow from operating activities for the nine months ended March 31, 2013, was a net use of $(6,788), while financing activities provided $7,142.
Material Changes vs. Prior Period
- Revenue Generation: The company generated limited revenue of $1,755 for the nine months ended March 31, 2013, compared to $0 for the same period in 2012. This marks the first recorded revenue since inception.
- Expense Growth: Total expenses increased to $31,266 for the nine months ended March 31, 2013, from $15,728 in the prior year period. This increase was driven primarily by higher consulting and other expenses ($29,602 vs. $13,586), largely due to costs associated with being a publicly reporting company.
- Asset Reduction: Total assets decreased significantly from $62,536 at June 30, 2012, to $1,195 at March 31, 2013. This reduction is primarily due to the write-off of deferred offering costs ($60,439) which were offset against additional paid-in capital upon the completion of the offering in August 2012.
- Share Capital: The company issued 2,500,000 shares in August 2012, bringing total outstanding shares to 10,000,000.
Outlook, Risks, and Unusual Items
Going Concern: The filing includes a substantial doubt about the company's ability to continue as a going concern. The company has negative working capital of $72,043 and a stockholders' deficit of $71,731. Management states that the company's ability to continue is dependent on achieving profitable operations or obtaining adequate financing.
Capital Requirements: Management estimates a need for an additional $50,000 to $100,000 to purchase raw materials, packaging, and fund introductory marketing. Without this financing, the company may be forced to scale down or cease operations.
Subsequent Event (Change of Control): On April 26, 2013, a change in control occurred. The founder, Ms. Anna C. Jones, sold 7,500,000 shares (75% of outstanding stock) to Four Hawk Management Co. As part of this transaction, Ms. Jones resigned, and Mr. Restituto S. Cenia, Jr. was appointed President, CEO, and CFO. Additionally, approximately $56,000 in liabilities (including $19,500 in legal fees) were forgiven or paid by the former founder.
Risks: The company faces high risks of business failure due to limited resources, lack of patent protection for its formulas, dependence on third-party manufacturers, and the competitive nature of the skincare market. There is no established public market for its securities, and trading may be subject to "penny stock" regulations.
Investor Verification Checklist
- Capital Sufficiency: Verify if the company has secured the estimated $50,000–$100,000 required for commercial production and marketing.
- Liability Resolution: Confirm the status of the $56,000 in liabilities forgiven by the former founder post-period end and ensure no hidden obligations remain.
- Revenue Sustainability: Assess whether the limited revenue ($1,755 for nine months) is indicative of a scalable business model or a one-time sample sale.
- Management Stability: Review the transition of control to Four Hawk Management Co. and the new management team's track record.
- Intellectual Property: Investigate the lack of patent protection for the "E-Scentual" formula and the risks of imitation by competitors.