Business context and reporting period
Important identity discrepancy: The request identifies Lipocine Inc., but the supplied Form 10-Q is for Marathon Bar Corp., a Delaware development-stage company. The summary below reflects the filing text and should not be attributed to Lipocine without verification.
The report covers the quarter and six months ended June 30, 2013. Marathon Bar’s stated plan is to import and sell healthy energy bars under its own brand using third-party suppliers; it had limited operations and had not begun sales. The filing marked the company as a shell company and indicated it had not filed all required Exchange Act reports during the preceding 12 months.
Financial results and liquidity
| Metric | Three months ended June 30, 2013 | Six months ended June 30, 2013 |
|---|---|---|
| Revenue | $0 | $0 |
| General and administrative expenses | $3,102 | $6,316 |
| Net loss | $3,102 | $6,316 |
| Net loss, comparable 2012 period | $61,231 | $66,043 |
- At June 30, 2013, cash and total assets were $10, down from $577 at December 31, 2012.
- Current liabilities were $17,642, comprising $17,404 of accounts payable and accrued expenses and $238 due to shareholders. The shareholder advance was unsecured, non-interest-bearing, and due on demand. The filing reports no other debt balance.
- Stockholders’ deficit was $17,631, compared with $11,316 at year-end 2012. Accumulated development-stage losses were $88,131.
- Six-month operating cash use was $567; there were no investing or financing cash flows during the period. Cash declined by $567 to $10.
- Margins are not meaningful because the company had no revenue. No interest or income-tax expense was reported.
Changes, outlook, and risks
- Six-month net loss improved to $6,316 from $66,043 in 2012, primarily as the prior-year period included $33,975 of consulting fees and substantially higher professional fees. The filing attributes expenses generally to registration, audit, legal, and regulatory research activities.
- Management said supplier selection and supplier or partnership agreements were not completed in the first half of 2013. It planned to continue legal and regulatory research, develop a detailed market plan, and finalize the website in the third quarter of 2013. These are stated plans, not assurances or quantified financial guidance.
- The company had not secured sufficient funding to implement its plan. Management said additional capital was required; equity financing might not be available on acceptable terms or at all, and debt financing might also be unavailable. The filing states that these conditions raise substantial doubt about the company’s ability to continue as a going concern.
- The director/officer indicated he might provide unsecured funding for reporting costs if other proceeds were unavailable, but no contract or written commitment existed. The company also described potential discussions with merger candidates, with no assurance of success.
- Management said failure to execute the business plan could lead to a change in strategy, including a new line of business. No material legal proceedings or material off-balance-sheet arrangements were reported. Management concluded disclosure controls were effective and reported no significant change in internal control over financial reporting.
Important facts for investors to verify
- Confirm the issuer: the supplied filing is for Marathon Bar Corp., not Lipocine Inc.
- Verify the filing’s reporting-status disclosure: it checked “No” to having filed all required reports during the prior 12 months, and checked “Yes” for shell-company status.
- Determine whether the company obtained financing after June 30, 2013, and whether the director’s possible funding support became a binding commitment.
- Check progress on supplier agreements, the business plan, website, and any revenue-generating activity; the filing reported no revenue and only $10 in cash.
- Review the going-concern warning and the company’s ability to meet $17,642 of current liabilities.