Silverton Energy, Inc.

What they do

Silverton Energy, Inc. was incorporated in Nevada on September 21, 2010, with a fiscal year ending September 30. The company originally intended to produce environmentally aware footwear but abandoned that business in 2013. It currently has no operations and is considered a shell company under SEC rules. Management is assessing options to proceed, most likely by merging with or acquiring an existing business.

Revenue drivers

• No revenue — The company generated no revenue in fiscal years 2014 and 2015, and in the three and nine months ended June 30, 2015.

Recent performance

In fiscal 2015, the company reported a net loss of $138,714, consistent with operating expenses of $138,714 (professional fees $110,500, office and general $15,346, and interest expense). This was down from a net loss of $235,773 in fiscal 2014. As of September 30, 2015, cash was $0. The balance sheet at June 30, 2015 showed total assets of $46,772, total liabilities of $372,394, and shareholder equity of negative $328,961 at September 30, 2015. The auditor's report expressed substantial doubt about the company's ability to continue as a going concern.

Strategy

Management plans to raise additional capital, likely through private placements of common stock, to cover legal and accounting fees and maintain SEC reporting status. If equity financing is not available, the company may seek debt financing, though it expects high-risk loan costs and above-market interest rates. The most likely survival scenario is a merger with or acquisition of an existing business, but no agreements are currently in place. The company intends to take steps to become a more attractive merger candidate.

Risks

• Going concern — The auditor's report on fiscal 2015 financial statements expresses substantial doubt about the company's ability to continue, and management warns of potential suspension or cessation of business.
• Cash shortage — As of September 30, 2015, the company had $0 cash on hand, which management says is insufficient for the next twelve months.
• Financing dependency — The company depends on private placement proceeds; if unavailable, it may be forced to seek costly debt financing that may not be accessible.
• Investor loss — If the company cannot raise funds or find a merger partner, it will cease operations, and investors would lose their entire investment.

Outlook

Management estimates that maintaining SEC reporting status for the next twelve months will cost about $30,000. If additional capital is not raised, the company may be required to suspend or cease operations. The company is actively seeking merger candidates but has no current agreements. Management believes that if it cannot raise sufficient revenues or maintain reporting status, it will cease all efforts, leading to a total loss for investors.