Filing identity and reporting period
Important discrepancy: The supplied filing is for Bear Lake Recreation, Inc., not Modular Medical, Inc. It covers the three months ended September 30, 2016, and was signed November 10, 2016. The filing describes Bear Lake as a shell company with no operations; its stated plan is to seek a merger with an operating company.
Financial results and position
- Revenue: $0 for the quarter and the comparable 2015 quarter. With no revenue or cost of goods sold, gross margin is not meaningful.
- Expenses and profit: General and administrative expense was $6,228, down from $6,851. Imputed related-party interest expense was $4,951, up from $4,181. Net loss was $11,179 versus $11,032; basic and diluted loss per share was $0.01 in both periods.
- Cash flow and liquidity: Cash was $0 at September 30, 2016. The cash flow statement reports no net operating, investing, or financing cash flow. Shareholders paid $6,228 of expenses and payables during the quarter.
- Assets and liabilities: The balance sheet reports no assets. Total liabilities were $204,942, up from $193,763 at June 30, 2016, consisting of $137,320 due to related parties and $67,622 of accrued related-party interest. Shareholder loans are unsecured, non-interest-bearing, and payable on demand; the company imputes interest at 10% annually.
- Equity: Stockholders’ deficit was $204,942. There were 1,249,816 common shares outstanding as of November 10, 2016.
Changes, outlook, and risks
The quarterly net loss increased by $147 year over year, mainly due to higher imputed interest, partly offset by lower general and administrative expenses. Management said the company had no operations during the quarter or as of the filing date.
Management’s 12-month plan is to evaluate potential industries, adopt a business plan, and begin operations through funding or acquisition of a going concern. It anticipated that a principal shareholder would continue paying operating expenses and said it did not expect to need additional funds during that period. The company had not identified a venture, so potential funding needs were uncertain.
The filing states that the company has no assets, has accumulated losses, and has not established operations, raising substantial doubt about its ability to continue as a going concern. The financial statements include no adjustments for the outcome of that uncertainty. Management reported effective disclosure controls and no material change in internal control over financial reporting. No legal proceedings or off-balance-sheet arrangements were reported.
Key facts for investors to verify
- Confirm the issuer and period: the filing supplied is Bear Lake Recreation’s September 30, 2016 quarterly report, not a Modular Medical filing.
- Verify the amount, terms, and continued availability of shareholder support, including demand repayment of related-party balances.
- Assess the company’s ability to continue as a going concern and whether it has identified or completed a merger or operating-business transaction.
- Confirm whether the stated zero cash and asset balances and the reported liabilities remain current.