Business context and reporting period
The supplied filing is Marathon Bar Corp.’s unaudited Form 10-Q for the quarter ended March 31, 2013, not a Lipocine Inc. filing. Marathon describes itself as a development-stage company planning to import and sell healthy energy bars under its own brand; it had not begun operations or generated revenue. The filing also checks “shell company: yes.”
Financial results and position
- Revenue: $0 for the three months ended March 31, 2013 and 2012.
- Expenses and net loss: $3,214 for Q1 2013 versus $4,812 in Q1 2012; net loss was the same amounts. Loss per share was reported as $(0.00) in both periods. No operating margin is meaningful because revenue was zero.
- Cash flow: Operating cash use was $119 in Q1 2013, versus $5,052 in Q1 2012. There was no investing or financing cash flow in Q1 2013.
- Liquidity and liabilities: At March 31, 2013, cash was $458 and current liabilities were $14,988, including $14,750 of accounts payable and accrued expenses and $238 due to a shareholder. Total assets were $458; stockholders’ deficit was $14,529. The filing reports no interest expense or material off-balance-sheet arrangements.
- Cumulative losses: Net loss from inception through March 31, 2013 was $85,029. There were 3.5 million shares outstanding as of April 24, 2013.
Changes, outlook, and risks
Quarterly expenses and losses declined by $1,598, about 33%, from Q1 2012. Cash fell by $119 from year-end 2012, while current liabilities rose by $3,095. The company reported no revenue in either quarter.
Management planned to continue legal and regulatory research and select suppliers or partners during the first half of 2013, develop a detailed marketing plan in Q3, and complete its website by Q3. It intended to rely on third-party suppliers and delivery arrangements rather than manufacture products itself. These are plans, not reported completed milestones.
The filing states that cash is insufficient for the business plan and that the lack of revenue and funding raises substantial doubt about the company’s ability to continue as a going concern. It expected to seek outside investment; additional financing might not be available on acceptable terms or at all. The sole officer and director said he might provide unsecured loans for reporting costs, but there was no contract or written commitment. The filing notes no material legal proceedings and says disclosure controls were effective; it checks “No” for having filed all required reports during the preceding 12 months.
Important facts to verify
- Confirm the issuer identity: the request names Lipocine Inc., but the supplied filing names Marathon Bar Corp.
- Verify the company’s reporting history and shell-company status, given the filing’s checked responses.
- Check whether financing was obtained and whether the supplier-selection, market-plan, and website milestones were achieved.
- Reconcile the very limited cash with $14,988 of current liabilities and confirm any related-party funding; the possible director loan was not binding.
- Confirm whether the going-concern uncertainty was resolved after March 31, 2013.