SEC Form 10-K Summary
Filing identity: The source text identifies the registrant as Putnam Hills Corp., not Lunai Bioworks Inc. The report covers the fiscal year ended March 31, 2013, although the request metadata refers to “2012 Q4.” The filing was signed July 16, 2013.
Business Context and Reporting Period
Putnam Hills Corp. is a Delaware development-stage blank-check and shell company incorporated January 18, 2011. It has no operating business and was formed to identify and potentially acquire or merge with an unidentified business. No definitive business-combination agreement had been executed as of the filing date. The company had one officer and director, no employees, no owned or leased property, and no publicly traded market for its common stock.
As of March 31, 2013, 5,000,000 common shares were outstanding and held by one record holder, NLBDIT 2010 Services, LLC. The company had no non-affiliate holders. Management indicated that it intends to continue searching for a business-combination target and may seek additional funding through related-party advances, equity financing, or a reverse-merger transaction.
Financial Metrics
| Metric | Year Ended March 31, 2013 | Year Ended March 31, 2012 |
|---|---|---|
| Revenue | $0 | $0 |
| General and administrative expenses | $37,092 | $29,945 |
| Interest expense | $497 | $0 |
| Net loss | $(37,589) | $(29,945) |
| Net cash used in operating activities | $(30,092) | $(24,945) |
| Net cash provided by financing activities | $36,500 | $38,500 |
| Cash at period end | $6,744 | $336 |
| Total assets | $19,963 | $13,555 |
| Total current liabilities | $71,232 | $27,235 |
| Stockholders’ equity | $(51,269) | $(13,680) |
The company generated no revenue since inception. Its assets consisted of $6,744 of cash and $13,219 of loans receivable from related parties. Current liabilities included $7,497 of accounts payable and accrued expenses, a $38,235 related-party loan payable, and a $25,500 related-party note payable. No dividends were declared or paid, and no off-balance-sheet arrangements were reported.
Material Changes Versus the Prior Period
- Net loss increased by $7,644, or approximately 25.5%, primarily because of higher professional and other administrative costs and $497 of interest expense.
- Operating cash usage increased by $5,147 to $30,092.
- Cash increased by $6,408 to $6,744, supported by $36,500 of related-party financing.
- Current liabilities increased by $43,997, driven by additional related-party borrowings and $7,497 of accrued expenses.
- Stockholders’ deficiency worsened by $37,589 to $(51,269), reflecting the fiscal-year net loss.
- The company continued to have no revenue, operating business, employees, or completed business combination.
Outlook, Risks, Contingencies, and Unusual Items
The independent auditor issued an unqualified opinion but included an emphasis that substantial doubt exists about the company’s ability to continue as a going concern. The company has incurred cumulative losses of $76,269 and had negative working capital of approximately $51,000 at March 31, 2013. Continued operations depend on locating a suitable acquisition or merger target, obtaining additional financing, and receiving further related-party funding. The filing provides no assurance that such funding will be available.
The company’s related-party financing is material. The $38,235 loan payable is unsecured, non-interest bearing, and has no stipulated repayment terms. The $25,500 related-party note bears interest at 6% and is payable upon completion of a qualifying business combination; $497 of accrued interest was recorded at March 31, 2013. The company also held $13,219 of unsecured, non-interest-bearing loans receivable from related entities with no stipulated repayment terms.
Any future transaction could substantially dilute existing stockholders, transfer control to the target company’s owners, and potentially occur without a stockholder vote depending on its structure. Management expects limited diversification and may complete only one business combination. The company also faces competition from other public shells, blank-check companies, and private entities seeking acquisitions.
The company qualifies as a smaller reporting company and an emerging growth company, elected extended accounting-standard transition provisions, and is exempt from certain reporting and auditor-attestation requirements. Management concluded that disclosure controls and internal control over financial reporting were effective as of March 31, 2013; no auditor attestation report was required.
Investor Verification Priorities
- Verify the registrant’s identity: the filing names Putnam Hills Corp., while the request metadata names Lunai Bioworks Inc.
- Confirm the company’s shell status, absence of revenue and operations, and lack of any definitive business-combination agreement.
- Reconcile the $6,744 cash balance with the company’s ongoing operating and filing costs.
- Review the terms, related-party nature, and repayment conditions of the $38,235 loan, $25,500 note, and $13,219 related-party receivables.
- Assess the going-concern uncertainty and the availability of future financing or related-party advances.
- Evaluate potential dilution and change of control in any future reverse merger or acquisition.
- Confirm beneficial ownership and voting control of the 5,000,000 outstanding shares by NLBDIT 2010 Services, LLC and related parties.