B-Maven, Inc. Form 10-Q Summary
Filing identity and period: The provided filing is for B-Maven, Inc., not Iqstel Inc. It is an unaudited Form 10-Q for the quarter and six months ended December 31, 2014, within the fiscal year ending June 30, 2015. B-Maven is a Nevada development-stage company engaged in developing and marketing the E-Scentual skin-care product line and identified itself as a shell company.
Financial Condition and Results
| Metric | Three months ended December 31, 2014 | Six months ended December 31, 2014 |
|---|---|---|
| Revenue | $0 | $0 |
| Gross margin | $0 | $0 |
| Consulting and other expense | $5,600 | $16,256 |
| Interest expense | $300 | $596 |
| Net loss | $5,900 | $17,652 |
| Basic and diluted loss per share | $(0.00) | $(0.00) |
- For the comparable six-month period in 2013, revenue was $3,802, gross margin was $3,381, and net loss was $17,139. The prior-year gross margin was 88.9%.
- At December 31, 2014, total assets were $540, consisting of $447 of prepaid expense and $93 of inventory; cash and cash equivalents were zero.
- Total liabilities were $62,552, including $51,655 owed to the CEO in related-party loans, $5,278 of accrued expenses, $5,000 of customer advances, and $619 owed to an unrelated party.
- Stockholders’ deficit was $62,012, including an accumulated development-stage deficit of $49,411.
- Operating activities used $17,800 during the six months, offset by $17,800 of related-party loan proceeds. Ending cash remained zero.
- The company had 10,000,000 common shares outstanding and no preferred shares outstanding.
Material Changes Versus Prior Comparable Period
- Six-month revenue declined from $3,802 to zero, and gross profit declined from $3,381 to zero.
- Six-month consulting and other expense decreased from $19,300 to $16,256, while interest expense increased from $319 to $596.
- Six-month net loss increased from $17,139 to $17,652 despite lower operating expenses, primarily because the company generated no revenue in the current period.
- Related-party loans increased from $33,855 at June 30, 2014 to $51,655 at December 31, 2014, providing the primary funding for operations.
- Prepaid expense increased from zero to $447; inventory remained $93.
Outlook, Risks, and Unusual Items
- Management stated that additional financing is required to continue operations and execute the business plan. Estimated needs include at least $50,000 to $100,000 for raw materials, packaging, labeling, marketing, and advertising, with commercial-scale product development potentially exceeding $100,000.
- The financial statements include a going-concern disclosure. Management reported negative working capital of $62,012, no committed financing sources, limited revenue, and substantial dependence on achieving profitable operations or obtaining additional financing.
- Management expects to seek equity or debt financing, including loans from related parties and strategic partners. No financing commitment had been obtained as of the filing date.
- A subsequent event disclosed that the company received approximately $5,750 of additional unsecured, non-interest-bearing, demand loans from a related party on January 20, 2015.
- Related-party loans included amounts bearing interest at 6% and 4%; other advances were non-interest-bearing. The loans were unsecured and generally payable on demand.
- The company has one employee, occupies space provided by its CEO at no charge, and has no written lease or employment agreement with the CEO.
- Management identified substantial risks from limited operating history, lack of cash, dependence on financing, competition, uncertain consumer acceptance, reliance on third-party manufacturers, lack of patent or trademark protection, potential product-liability exposure, and possible shareholder dilution.
- The company reported no pending material litigation, no unregistered equity sales during the period, no defaults upon senior securities, and no off-balance-sheet arrangements.
- Management concluded that disclosure controls were effective and that no material changes occurred in internal control over financial reporting during the quarter.
Important Facts for Investors to Verify
- Confirm the issuer identity: the supplied filing is for B-Maven, Inc., whereas the request identifies Iqstel Inc.
- Verify the filing period and fiscal-year context: the report covers the quarter and six months ended December 31, 2014, not a calendar-year second quarter.
- Review the going-concern disclosure, zero cash balance, $62,552 of liabilities, and reliance on CEO financing.
- Assess whether the company obtained the additional financing required for commercial production and ongoing public-company expenses.
- Validate the absence of revenue during the current six-month period and the company’s ability to convert product development and sampling into recurring sales.
- Review related-party loan terms, demand repayment provisions, and the January 2015 $5,750 subsequent advance.
- Consider dilution, liquidity, and trading-market risks, including the reported lack of an established active market and penny-stock restrictions.