SEC Filing Summary: Cactus Ventures, Inc. (10-Q)
Business Context and Reporting Period
This Form 10-Q covers the quarterly period ended March 31, 2008. The registrant is Cactus Ventures, Inc., a Nevada corporation and shell company with no active operations. The company is seeking a merger or acquisition with a target business entity to become a public reporting company. It has no employees, no owned property, and relies on the President's residence for office space.
Key Financial Metrics
| Metric | Q1 2008 | Q1 2007 |
|---|---|---|
| Revenue | $0 | $0 |
| Net Loss | $(10,828) | $(435) |
| Operating Expenses | $9,705 | $0 |
| Interest Expense | $1,123 | $435 |
| Cash and Cash Equivalents | $2,290 | $466 |
| Total Assets | $2,290 | $2,314 |
| Total Liabilities | $55,835 | $45,031 |
| Shareholders' Deficit | $(53,545) | $(42,717) |
| Working Capital | $(14,548) | $(6,758) |
Note: The filing text does not provide explicit margin percentages due to zero revenue.
Material Changes vs. Prior Period
- Expense Increase: The company incurred $9,705 in operating expenses in Q1 2008 compared to $0 in Q1 2007. This includes $6,821 in "other costs" and $2,860 in professional fees.
- Liability Growth: Total liabilities increased by approximately $10,804, driven by a rise in accounts payable (from $2,357 to $9,178) and notes payable to related parties (from $35,959 to $38,997).
- Cash Flow: Net cash used in operating activities was $(3,062), partially offset by $3,038 in financing activities from related party notes, resulting in a negligible decrease in cash balance.
Outlook, Risks, and Contingencies
- Going Concern: The filing explicitly states that the company's net loss, negative working capital, and stockholders' deficit raise substantial doubt about its ability to continue as a going concern. Continuation is dependent on raising additional funds and implementing a business plan.
- Financing Needs: The company anticipates needing shareholder contributions to continue operations for the next twelve months. There are no formal agreements for such contributions. Future capital may be raised via stock sales or loans from officers/directors.
- Business Strategy: The company has no specific business plan or target industry. Management has unrestricted discretion to seek any business opportunity, but there is no assurance a target will be found.
- Risk Factors: Significant risks include the speculative nature of the business plan, competition from better-funded entities, potential conflicts of interest with management, and the lack of a liquid market for its stock (subject to Penny Stock rules).
Investor Verification Checklist
- Verify the status of the related party notes totaling $38,997 and the terms of repayment.
- Confirm the identity of the officers and directors and their other business ventures to assess potential conflicts of interest.
- Monitor for any announcements regarding a target company for merger or acquisition, as the company currently has no operations.
- Review the liquidity position given the cash balance of only $2,290 against liabilities exceeding $55,000.
- Check for any unregistered sales of equity or new debt financing in subsequent filings to determine if the going concern issue is being addressed.