Business context and reporting period
This Form 10-Q covers the quarter and nine months ended September 30, 2012; it was filed by Retrospettiva, Inc., although the request identifies Outdoor Holding Co. The company describes itself as a development-stage company with no operations or revenue. Its former textile business ceased operations in 2001, and it is seeking a merger, acquisition, or similar transaction. The company checked the shell-company box.
Financial results and position
- Revenue: None in the three- or nine-month periods ended September 30, 2012 or 2011.
- Net loss: $6,656 for Q3 2012 versus $3,641 in Q3 2011; $24,688 for the first nine months of 2012 versus $19,594 in the comparable 2011 period. Reported loss per share was nil.
- Expenses and interest: The financial statements report nine-month expenses of $13,616 in 2012 versus $9,497 in 2011, and interest expense of $10,472 versus $9,497. For Q3, statement expenses were $2,849 versus $142, with interest expense of $3,607 versus $3,299.
- Cash flow: Operating cash use was $16,023 in the first nine months of 2012 versus $14,370 in 2011. Related-party financing provided matching amounts; cash remained zero.
- Liquidity and liabilities: No current assets; current liabilities were $253,547, up from $228,859 at December 31, 2011. The resulting working-capital deficit was $253,547. Liabilities include $182,897 in stockholder notes, $55,617 accrued stockholder interest, and $6,934 in officer advances.
- Capitalization: 14,425,903 common shares were outstanding as of November 1, 2012. Stockholders’ deficit was $253,547.
Changes, outlook, and risks
The nine-month net loss and operating cash use increased year over year. Management attributes the deficit increase to public-company reporting and revival costs funded through higher liabilities. Stockholder notes are unsecured, bear 8% interest, and are payable on demand; a $118,025 borrowing from the president and a stockholder is convertible at $0.10 per share. The company reports $15,308 of remaining borrowing capacity under that facility, but says future funding from stockholders is not assured.
Management says additional funding is needed and plans to continue SEC reporting and seek private-placement funding. It cannot predict when, if ever, it will complete a business combination or achieve its objectives, and expects losses until revenue-generating operations begin. The filing states that the company has no operations, negative working capital, and a stockholders’ deficit, raising substantial doubt about its ability to continue as a going concern. The proposed 2010 merger with NewGen BioPharma was terminated after closing conditions were not met. Management concluded disclosure controls were not effective as of September 30, 2012; no material quarterly change in internal control was reported. No legal proceedings were listed.
Important facts to verify
- Confirm the registrant identity: the supplied filing is for Retrospettiva, Inc., not Outdoor Holding Co.
- Reconcile expense figures: MD&A gives Q3 operating expenses of $3,049 versus $342 and nine-month expenses of $14,216 versus $10,097, which differ from the financial statements’ figures.
- Review the going-concern funding plan, demand repayment terms, and ability or willingness of related parties to provide further financing.
- Assess the company’s business-combination prospects, given that it has no operations and its prior proposed merger was terminated.
- Investigate the ineffective disclosure-controls conclusion and the filing’s tax carryforward disclosures.