Filing identity and reporting period
Important mismatch: The supplied filing is ASN Technologies, Inc.’s Form 10-K for the fiscal year ended June 30, 2015, not a Senseonics Holdings, Inc. filing or a 2014 Q4 report. The filing identifies ASN as a Nevada company developing a location-based mobile application and marks itself as a shell company.
Business context and operating status
ASN was developing a prototype event-sharing app called “death-valley,” based on users’ location and current events. The prototype existed as a web application, but the planned public release was delayed beyond the company’s original early-2015 target. The company had no employees other than its sole officer and director, no significant intellectual property, and had not incurred research and development expenditures.
Financial results and liquidity
| Metric | Year ended June 30, 2015 | June 26–30, 2014 |
|---|---|---|
| Revenue | $0 | $0 |
| Operating expenses and net loss | $67,590 | $2,919 |
| Cash from operating activities | $(24,004) | $0 |
| Cash from financing activities | $15,000 | $10,000 |
| Cash at period end | $996 | $10,000 |
| Current liabilities | $46,505 | $2,919 |
| Working capital | $(45,509) | Not stated |
2015 expenses comprised $52,786 in professional fees and $14,804 in general and administrative costs. The prior-period comparison covers only the company’s first five days, so it is not a comparable full-year period. Profit margins are not meaningful because the company had no revenue. No debt was reported at June 30, 2015; on August 27, 2015, it borrowed $9,000 under an 8% promissory note, due the sooner of 90 days after written demand or August 27, 2017.
Changes, outlook, risks, and unusual items
- Net loss rose from $2,919 during the brief inception period to $67,590 in fiscal 2015; cash fell from $10,000 to $996 as operating activities used cash.
- The company said it needed additional financing and/or revenue to fund operations and had no formal financing commitments. Management cautioned that financing might not be available on acceptable terms or at all.
- The auditor’s report and the filing state that substantial doubt exists about the company’s ability to continue as a going concern. The financial statements contain no adjustments that might result from failure to continue operations.
- Management reported ineffective disclosure controls and internal control over financial reporting, citing inadequate segregation of duties and insufficient written accounting and reporting procedures. Remediation depended substantially on obtaining financing.
- Management expected operating expenses to increase. The planned revenue source was paid sponsored postings, but the app had not launched and there was no assurance of user growth or advertiser demand.
- The filing reports no pending or threatened legal proceedings and no off-balance-sheet arrangements.
Most important facts to verify
- Confirm the intended issuer and period: this document is ASN Technologies’ FY2015 10-K, not Senseonics’ 2014 Q4 filing.
- Verify the reported year-end cash, accrued expenses, working-capital deficit, and subsequent $9,000 note against the financial statements and note terms.
- Assess the going-concern disclosure, the company’s access to financing, and whether operations or the app generated revenue after the reporting date.
- Review the disclosed ineffective controls and whether the stated remediation was implemented.
- Consider the filing’s reported shell-company status, the sole officer/director’s 86.96% ownership, and the limited liquidity indicated by OTC penny-stock disclosures.