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SmartKem, Inc.(SMTK) - 2020 Q2 - Quarterly Report
SmartKem, Inc.SmartKem, Inc.(US:SMTK)2020-09-30 20:13

General Information Company Overview Parasol Investments Corporation is a Delaware-incorporated shell company, an emerging growth company formed to acquire a target business - The registrant is a shell company, non-accelerated filer, smaller reporting company, and emerging growth company34546 - The company was incorporated on May 13, 2020, in Delaware, with a fiscal year end of December 31123 Common Stock Outstanding | Class | Outstanding at September 30, 2020 | | :--- | :--- | | Common Stock, par value $0.0001 | 5,000,000 | Special Note Regarding Forward-Looking Statements This section advises that the Form 10-Q contains forward-looking statements, subject to risks and uncertainties, with no obligation to update unless legally required - Forward-looking statements are identified by words like 'expects,' 'anticipates,' 'intends,' and relate to future events, performance, and financial results8 - Actual results may differ materially from expectations due to certain risks and uncertainties, and readers should not place undue reliance on these statements9 - The company does not assume any obligation to update forward-looking statements, except as required by law10 PART I - FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) This section presents the unaudited condensed financial statements for Parasol Investments Corporation, covering the period from its inception on May 13, 2020, to June 30, 2020 Condensed Balance Sheet Condensed Balance Sheet as of June 30, 2020 | ASSETS | Amount ($) | | :--- | :--- | | Cash | 9,558 | | Total current assets | 9,558 | | Total assets | 9,558 | | LIABILITIES AND STOCKHOLDERS' DEFICIT | | | Note payable - stockholder | 10,000 | | Total current liabilities | 10,000 | | Total liabilities | 10,000 | | Common stock | 500 | | Accumulated deficit | (942) | | Total stockholders' deficit | (442) | | Total liabilities and stockholders' deficit | 9,558 | Condensed Statement of Operations Condensed Statement of Operations (May 13, 2020 - June 30, 2020) | Item | Amount ($) | | :--- | :--- | | Revenue | - | | General and administrative expenses | 942 | | Loss from operations | (942) | | Net loss | (942) | | Loss per common share - basic and dilutive | (0.00) | | Weighted average common shares outstanding | 5,000,000 | Condensed Statement of Changes in Stockholders' Deficit Condensed Statement of Changes in Stockholders' Deficit (May 13, 2020 - June 30, 2020) | Item | Common Stock Amount ($) | Accumulated Deficit ($) | Stockholders' Deficit ($) | | :--- | :--- | :--- | :--- | | Balance, May 13, 2020 | - | - | - | | Sale of common shares | 500 | - | 500 | | Net loss | - | (942) | (942) | | Balance, June 30, 2020 | 500 | (942) | (442) | Condensed Statement of Cash Flows Condensed Statement of Cash Flows (May 13, 2020 - June 30, 2020) | Cash Flow Activity | Amount ($) | | :--- | :--- | | Net cash (used in) operating activities | (467) | | Net cash provided by financing activities | 10,025 | | Net increase in cash | 9,558 | | Cash, beginning of period | - | | Cash, end of period | 9,558 | Notes to Condensed Financial Statements This section provides details on the company's nature, accounting policies, capital structure, income taxes, related party transactions, and going concern considerations - The Company was incorporated on May 13, 2020, in Delaware, with the primary objective to acquire a target company or business2324 - The Company has 10,000,000 authorized preferred shares (none issued) and 50,000,000 authorized common shares, with 5,000,000 common shares issued for $500 to founders3334 - As of June 30, 2020, the Company had a $10,000 non-interest bearing promissory note payable to a stockholder, due upon consummation of a business combination38 - Management believes there is substantial doubt about the Company's ability to continue as a going concern due to incurred losses, negative working capital, and stockholders' deficit, intending to finance operations through additional borrowings from the existing note3940 - The COVID-19 pandemic could materially and adversely affect the business of any potential target company or the Company's ability to complete a business combination4243 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on the Company's financial condition and results of operations for the period from inception (May 13, 2020) to June 30, 2020 - The Company is a 'blank check' and 'shell company' formed to acquire or merge with an operating business, with no current business activities providing cash flow444550 - As an 'emerging growth company,' the Company has elected to use the extended transition period for complying with new or revised accounting standards, which may affect comparability464765 Summary of Cash Flows (May 13, 2020 - June 30, 2020) | Cash Flow Activity | Amount ($) | | :--- | :--- | | Net Cash (Used In) Operating Activities | (467) | | Net Cash Provided by Financing Activities | 10,025 | | Net Change in Cash | 9,558 | - The Company incurred a net loss of $942 for the period, primarily from legal and professional service fees related to SEC filings and general administrative expenses62 - The Company has not entered into any definitive agreement or specific discussions with potential business combination candidates as of the filing date56 Item 3. Quantitative and Qualitative Disclosures About Market Risk As a 'smaller reporting company,' Parasol Investments Corporation is not required to provide quantitative and qualitative disclosures about market risk in this report - The Company is exempt from providing market risk disclosures as a 'smaller reporting company' under Item 10 of Regulation S-K67 Item 4. Controls and Procedures Management evaluated the effectiveness of the Company's disclosure controls and procedures as of June 30, 2020, concluding they were effective with no material changes in internal control over financial reporting - Disclosure controls and procedures were evaluated and deemed effective as of June 30, 202069 - No changes in internal control over financial reporting occurred during the quarter ended June 30, 2020, that materially affected or are reasonably likely to materially affect internal control over financial reporting70 - Control systems provide only reasonable, not absolute, assurance due to inherent limitations71 PART II - OTHER INFORMATION Item 1. Legal Proceedings The Company reports no material pending legal proceedings to which it is a party, nor any proceedings where directors, officers, affiliates, or significant shareholders have an adverse material interest - There are no material pending legal proceedings against the Company74 - No directors, officers, affiliates, or significant shareholders have a material interest adverse to the Company in any proceedings75 Item 1A. Risk Factors As a 'smaller reporting company,' Parasol Investments Corporation is not required to provide specific risk factor disclosures in this quarterly report - The Company is exempt from providing risk factor disclosures as a 'smaller reporting company' under Item 10 of Regulation S-K76 [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=19&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%