Filing identity and reporting period
The supplied filing is Bear Lake Recreation, Inc.’s unaudited Form 10-Q for the quarter ended December 31, 2014, covering its fiscal second quarter and six-month period. This does not match the request metadata naming Modular Medical, Inc. The filing describes Bear Lake as a shell company with no established operations.
Financial results and position
| Metric | Three months ended Dec. 31, 2014 | Six months ended Dec. 31, 2014 |
|---|---|---|
| Revenue | $0 | $0 |
| General and administrative expense | $3,857 | $8,381 |
| Related-party interest expense | $3,676 | $7,010 |
| Net loss | $7,533 | $15,391 |
| Basic and diluted loss per share | $0.01 | $0.01 |
At December 31, 2014, total assets were $6,250, all prepaid expenses, and cash was $0. Current liabilities and total liabilities were $153,326, including $116,445 due to a shareholder and $36,881 of accrued related-party interest. Stockholders’ deficit was $147,076. No revenue or gross profit was reported, so operating margins are not meaningful. The cash-flow statement reports no net operating, investing, or financing cash flow for the six months.
Changes versus prior comparable periods
Quarterly net loss increased from $5,457 to $7,533; six-month net loss increased from $12,667 to $15,391. G&A expense rose from $2,475 to $3,857 for the quarter and from $6,880 to $8,381 for six months. Management attributed the increases mainly to applying for and listing on the OTC Markets QB tier. Related-party interest expense also increased. Compared with June 30, 2014, related-party payable rose from $100,264 to $116,445, accrued related-party interest from $29,871 to $36,881, and total liabilities from $131,685 to $153,326.
Outlook, risks, and other matters
- Management intends to evaluate industries, adopt a business plan, and pursue operations through funding or acquisition; it is also seeking a merger with a well-capitalized operating company. No target or transaction is identified.
- The company reports minimal assets, no established operations, and accumulated losses. The filing states these conditions raise substantial doubt about its ability to continue as a going concern.
- A principal shareholder paid $14,207 of expenses and payables during the quarter. Related-party loans are unsecured, non-interest-bearing, and payable on demand; the company imputes interest at 10% annually. Management said it did not anticipate needing additional funds over the next 12 months because the shareholder had been covering operating expenses, but additional shareholder or management advances may be needed.
- The filing reports no off-balance-sheet arrangements or legal proceedings. Management concluded disclosure controls were effective and reported no material change in internal control over financial reporting.
Important facts for investors to verify
- Confirm the filing issuer: the supplied document is for Bear Lake Recreation, Inc., not Modular Medical, Inc.
- Verify the company’s shell status, merger plans, and whether any operating business or acquisition has since been identified.
- Assess the going-concern uncertainty, zero cash balance, and ability to meet liabilities payable on demand, particularly amounts owed to the shareholder.
- Review the reported cash-flow presentation alongside the balance-sheet changes and underlying filings; the filing text reports zero net cash flow despite increases in related-party payables and accrued interest.