Filing summary
Entity mismatch: The request identifies Lipocine Inc., but the supplied Form 10-Q is for Marathon Bar Corp. This summary reflects the filing text, not Lipocine.
Business context and period
Marathon Bar Corp. reported for the quarter and nine months ended September 30, 2012. The Delaware company describes itself as a development-stage business with limited operations, planning to import and sell healthy energy bars through third-party suppliers. It had not begun operations or generated revenue.
Financial results and liquidity
- Revenue: None in the three or nine months ended September 30, 2012, or in the comparable 2011 periods.
- Expenses and net loss: Third-quarter expenses and net loss were $5,666. Nine-month expenses and net loss were $71,709, compared with zero in the 2011 periods. Cumulative loss since inception was $76,871. The nine-month loss was primarily associated with registration, legal, audit, and consulting costs.
- Cash flow: Nine-month operating cash use was $62,821; financing provided $40,500, resulting in a $22,321 net decrease in cash. Cash was $622 at September 30, 2012, down from $22,943 at December 31, 2011.
- Balance sheet: Total assets were $622; current liabilities were $6,993, including $6,755 of accounts payable and accrued expenses and $238 due to shareholders. Stockholders’ deficit was $6,371. The filing reports no interest expense or income-tax provision.
- Margins and debt: Not meaningful given no revenue. The filing reports no interest-bearing debt; the $238 shareholder advance is unsecured, non-interest-bearing, and due on demand.
Material changes and financing
In April 2012, the company sold 500,000 shares for stated gross proceeds of $50,000. The filing says $9,500 of legal and audit offering costs were offset against the proceeds; the cash-flow statement reports $40,500 of stock proceeds. Shares outstanding increased from 3,000,000 at year-end 2011 to 3,500,000 at September 30, 2012. The company had registered an offering of up to 1,500,000 shares at $0.10 per share, for up to $150,000.
Outlook, risks, and other disclosures
- Management described plans to continue market, legal, and regulatory research; develop a detailed market plan; select suppliers and formalize agreements; and complete its website. Supplier selection and agreements were expected during the fourth quarter of 2012 and first quarter of 2013, with website completion expected by first-quarter 2013.
- Management said significant revenue was not expected until the company could market its products and that it needed outside capital to implement its plan. Additional equity financing might not be available on acceptable terms or at all; debt financing might also be unavailable.
- The filing states that cash resources were insufficient for the current business plan and that these circumstances raised substantial doubt about the company’s ability to continue as a going concern. The sole officer and director indicated he might provide unsecured loans to cover reporting costs, but no contract or written commitment existed.
- Management reported effective disclosure controls as of September 30, 2012, with no significant change in internal control over financial reporting during the quarter. The company reported no material legal proceedings and no material off-balance-sheet arrangements.
Important facts to verify
- Confirm the issuer: the supplied filing is Marathon Bar Corp., not Lipocine Inc.
- Verify the offering’s gross proceeds, $9,500 offering-cost offset, and $40,500 net cash proceeds, as well as the status of the remaining registered offering.
- Assess whether the company obtained financing after the reporting date and whether the director provided the contemplated support; the filing gives no binding commitment.
- Check progress on supplier agreements, product launch, and revenue generation against management’s stated timetable.