Filing identity and reporting period
The supplied filing is Bear Lake Recreation, Inc.’s unaudited Form 10-Q for the quarter ended March 31, 2013, covering the three and nine months ended that date. This does not match the request metadata identifying Modular Medical, Inc. and “2012 Q3”; confirm the filing and period before relying on this summary. The company described itself as a development-stage company and shell company.
Financial results and position
- Revenue: $0 for both the three and nine months ended March 31, 2013; no operations were reported. Gross margin is not meaningful with no current-period revenue.
- Loss: Net loss was $4,556 for the quarter and $16,092 for the nine months, versus $3,941 and $13,917, respectively, in the comparable 2012 periods. Nine-month basic and diluted loss per share was $0.01.
- Expenses and interest: Nine-month general and administrative expense was $8,870, compared with $8,163. Related-party imputed interest expense was $7,222, compared with $5,754.
- Assets and liquidity: Total assets and cash were $0 at March 31, 2013. Current liabilities totaled $104,193, comprising $88,992 payable to a related party and $15,201 accrued related-party interest. Stockholders’ deficit was $104,193.
- Cash flow: Net cash from operating, investing, and financing activities was $0 in the first nine months of 2013; operating expenses were funded through amounts paid by a principal shareholder and recorded as related-party payables. No cash interest or income taxes were paid.
- Debt: Related-party loans are unsecured, non-interest-bearing, and payable on demand; the company imputes interest at 10% annually. No other debt is identified in the supplied filing text.
Changes versus prior comparable periods
Quarterly and nine-month net losses increased year over year, as did general and administrative expense and imputed interest expense. Related-party payable rose from $80,122 at June 30, 2012, to $88,992 at March 31, 2013; accrued interest rose from $7,979 to $15,201. The company continued to report no assets, cash, revenue, or operations.
Outlook, risks, and other matters
- Management intended to seek a merger with an existing, well-capitalized operating company and described a plan to evaluate industries, adopt a business plan, and pursue operations through funding or acquisition. No acquisition or venture had been identified.
- Management said it did not anticipate needing additional funds during the next 12 months because a principal shareholder had been paying operating expenses. Future financing needs were uncertain, particularly if a venture were pursued.
- The filing states that the absence of assets and operations and accumulated losses raise substantial doubt about the company’s ability to continue as a going concern. The financial statements include no adjustments for the outcome of this uncertainty.
- Management reported effective disclosure controls and no material change in internal control over financial reporting during the quarter. No legal proceedings or off-balance-sheet arrangements were reported.
Key facts for investors to verify
- Confirm issuer and period: the filing identifies Bear Lake Recreation, Inc. and a March 31, 2013 quarter, not Modular Medical, Inc. or 2012 Q3.
- Verify the status and terms of the $88,992 related-party payable and $15,201 accrued interest, including the payable-on-demand feature.
- Assess the company’s ability to meet reporting and other obligations with no cash or assets, and the reliance on shareholder funding.
- Confirm any subsequent merger, acquisition, financing, or change in business status; none is identified in this filing.
- The filing reports 1,249,816 common shares outstanding as of April 26, 2013.