Forward-Looking Statements
This Report on Form 10-K contains certain statements that are "forward-looking" within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Litigation Reform Act"). These forward looking statements and other information are based on our beliefs as well as assumptions made by us using information currently available.
The words "anticipate," "believe," "estimate," "expect," "intend," "will," "should" and similar expressions, as they relate to us, are intended to identify forward-looking statements. Such statements reflect our current views with respect to future events and are subject to certain risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated, expected, intended or using other similar expressions.
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In accordance with the provisions of the Litigation Reform Act, we are making
investors aware that such forward-looking statements, because they relate to
future events, are by their very nature subject to many important factors that
could cause actual results to differ materially from those contemplated by the
forward-looking statements contained in this Report on Form 10-K. For example,
given the cessation of our operations as a developer, manufacturer, marketer and
seller of advanced polymers on
Overview
On
As a result of the Asset Sale, we ceased operating as a developer, manufacturer,
marketer and seller of advanced polymers. Subsequent to the Closing Date, we
became engaged in efforts to identify either an (i) operating company to acquire
or merge with through an equity-based exchange transaction or (ii) investor
interested in purchasing a majority interest in our common stock, whereby either
transaction would likely result in a change in control. On
Pursuant to the SPA, the Company effectuated a 1-for 50 reverse stock split on
Management is seeking to identify an operating company for the purposes of engaging in a merger or business combination of some kind, or acquire assets or shares of an entity actively engaged in a business that generates sustained revenues. Although we have investigated certain opportunities to determine whether they would have the potential to add value to us for the benefit of our stockholders, we have not yet entered into any binding arrangements.
We do not intend to restrict our consideration to any particular business or industry segment. Because we have limited resources, the scope and number of suitable candidates to merge with is relatively limited. Because we may participate in a business opportunity with a newly formed firm, a firm that is in the development stage, or a firm that is entering a new phase of growth, we may incur further risk due to the inability of the target's management to have proven its abilities or effectiveness, or the lack of an established market for the target's products or services, or the inability to reach profitability in the next few years.
Any business combination or transaction will likely result in a significant issuance of shares and substantial dilution to our present stockholders. As it is expected that the closing of such a transaction will result in a change in control, such transaction is expected to be accounted for as a reverse merger, with the operating company being considered the legal acquiree and accounting acquirer, and we would be considered the legal acquirer and the accounting acquiree. As a result, at and subsequent to closing of any such transaction, the financial statements of the operating company would become our financial statements for all periods presented.
Fiscal Year
Our fiscal year ends on
9 Critical Accounting Policies
Our significant accounting policies are summarized in Note 3 to our financial statements. However, certain of our accounting policies require the application of significant judgment by our management, and such judgments are reflected in the amounts reported in our financial statements. In applying these policies, our management uses its judgment to determine the appropriate assumptions to be used in the determination of estimates. Those estimates are based on our historical experience, terms of existing contracts, our observance of market trends, information provided by our strategic partners and information available from other outside sources, as appropriate. Actual results may differ significantly from the estimates contained in our financial statements. Our critical accounting policies are as follows:
? Stock-Based Compensation. As a result of the Asset Sale, no further stock
option grants have been made, however, 9,000 shares of our common stock
continue to be available for grant pursuant to the 2017 Non-Qualified Equity
Incentive Plan (the "2017 Plan"). Prior to the Closing Date, we made certain
assumptions in order to value our stock-based compensation. The valuation of
employee stock options is an inherently subjective process, since market values
are generally not available for long-term, non-transferable employee stock
options. Accordingly, an option pricing model is utilized to derive an
estimated fair value. In calculating the estimated fair value of our stock
options we use the Black-Scholes pricing model, which requires the
consideration of the following six variables for purposes of estimating fair
value:
? the stock option exercise price;
? the expected term of the option;
? the grant date price of our common stock, which is issuable upon exercise of
the option;
? the expected volatility of our common stock;
? the expected dividends on our common stock (we do not anticipate paying
dividends in the foreseeable future); and
? the risk free interest rate for the expected option term.
We are also required to estimate the level of pre-vesting award forfeitures
expected to occur and record compensation expense only for those awards that are
ultimately expected to vest. This requirement applies to all awards that are not
yet vested. Due to the exercise of substantially all of our options, we have
estimated a zero forfeiture rate. As of
Results of Operations
Fiscal Years Ended
Operating Expenses
During the fiscal year ended
10 Other Income
On
Liquidity, Capital Resources and Going Concern
As of
During the fiscal year ended
There was no cash used in or provided by investing activities during the fiscal
years ended
During the fiscal year ended
On
Our financial statements have been presented on the basis that we are a going
concern, which contemplates the realization of assets and satisfaction of
liabilities in the normal course of business. During the fiscal years ended
Management is seeking to identify an operating company for the purposes of engaging in a merger or business combination of some kind, or acquire assets or shares of an entity actively engaged in a business that generates sustained revenues. Although we have investigated certain opportunities to determine whether they would have the potential to add value to us for the benefit of our stockholders, we have not yet entered into any binding arrangements.
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We do not intend to restrict our consideration to any particular business or industry segment. Because we have limited resources, the scope and number of suitable candidates to merge with is relatively limited. Because we may participate in a business opportunity with a newly formed firm, a firm that is in the development stage, or a firm that is entering a new phase of growth, we may incur further risk due to the inability of the target's management to have proven its abilities or effectiveness, or the lack of an established market for the target's products or services, or the inability to reach profitability in the next few years.
Any business combination or transaction will likely result in a significant issuance of shares and substantial dilution to our present stockholders. As it is expected that the closing of such a transaction will result in a change in control, such transaction is expected to be accounted for as a reverse merger, with the operating company being considered the legal acquiree and accounting acquirer, and we would be considered the legal acquirer and the accounting acquiree. As a result, at and subsequent to closing of any such transaction, the financial statements of the operating company would become our financial statements for all periods presented.
Off-Balance Sheet Arrangements
As of
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