Filing summary
Entity and period: The supplied filing is a Form 10-Q for Bear Lake Recreation, Inc., a Nevada company—not Modular Medical, Inc. It covers the quarter and six months ended December 31, 2013, with balance-sheet comparisons to June 30, 2013. The company identifies itself as a development-stage company and checked the shell-company box. The period corresponds to fiscal Q2 only if the company’s fiscal year began July 1.
Financial results and position
- Revenue and margins: No revenue or cost of goods sold in either the three- or six-month periods ended December 31, 2013 or 2012. No meaningful current-period gross margin.
- Expenses and losses: Six-month general and administrative expense was $6,880, versus $6,820 in 2012. Six-month net loss was $12,667, versus $11,536. For the three months, G&A was $2,475 versus $2,115, and net loss was $5,457 versus $4,545. Related-party imputed interest expense was $5,787 for six months and $2,982 for the quarter.
- Per-share loss: Basic and diluted loss per share was $0.01 for both the three- and six-month periods in 2013 and 2012.
- Assets and liquidity: Total assets and cash were $0 at December 31, 2013. Current and total liabilities were $121,558, consisting of $97,922 due to a related party and $23,636 accrued related-party interest. Stockholders’ deficit was $121,558.
- Debt and cash flow: The related-party balance is described as unsecured, non-interest-bearing, and payable on demand; the company imputes interest at 10% annually. Net cash from operating, investing, and financing activities was $0 for the six months, with expenses funded through shareholder-paid costs recorded as payables. No cash interest or income taxes were paid.
Changes, outlook, and risks
- Compared with the prior-year six-month period, revenue remained zero, while G&A and net loss increased modestly. The company reported no operations during the current quarter or six-month period.
- Management’s stated plan was to consider industries, develop a business plan, and pursue operations through funding and/or acquisition of an operating business. It intended to seek a merger with a well-capitalized operating company.
- Management said it did not anticipate needing additional funds during the next 12 months because a principal shareholder had been paying operating expenses. The filing also says future funding needs for a potential venture cannot be predicted; management or shareholders might provide loans.
- The filing states that the company has no assets or established operations and has accumulated losses, 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 disclosure controls were effective and no material change in internal control during the quarter. The filing reported no legal proceedings, off-balance-sheet arrangements, or other information under the listed items.
Important facts to verify
- Confirm the filing’s identity: the document is for Bear Lake Recreation, Inc., while the request identifies Modular Medical, Inc.
- Confirm the fiscal-period mapping; the filing reports the three and six months ended December 31, 2013.
- Verify the related-party payable and accrued-interest balances, including the demand repayment terms and imputed 10% interest.
- Assess the company’s ability to fund reporting and any proposed merger or business acquisition given zero cash, no assets, and the going-concern uncertainty.