Filing identity and period
The supplied filing is Gold Swap Inc.’s unaudited Form 10-Q for the quarter ended June 30, 2011—not a filing identified as Silo Pharma, Inc. The filing describes Gold Swap as a development-stage company planning to source precious metals and second-hand jewelry for refining and resale. Its business model and operations were not yet established.
Financial results and liquidity
| Metric | Three months ended June 30, 2011 | Six months ended June 30, 2011 | Since inception to June 30, 2011 |
|---|---|---|---|
| Revenue | None | None | None |
| General and administrative expense | $13,853 | $25,751 | $1,104,256 |
| Net loss | $13,853 | $25,751 | $1,104,256 |
| Basic and diluted loss per share | $(0.00) | $(0.00) | $(0.04) |
At June 30, 2011, cash and total assets were $25,804; accounts payable and total current liabilities were $3,500. The company reported no debt balance. Stockholders’ equity was $22,304. For the six months, operating cash use was $22,251 and financing cash proceeds were $575; ending cash fell by $21,676 from $47,480 at December 31, 2010. The filing does not provide gross or operating margins because there was no revenue.
Changes and notable items
The six-month loss was substantially lower than the $1,078,505 loss recorded from inception through December 31, 2010, primarily because the earlier period included $1,075,000 of compensation expense for 21.5 million shares issued to officers and directors. The filing does not provide a prior-year quarter or six-month comparison. During the six months, the company collected a $575 prior-period stock subscription receivable. It reported 30,631,200 common shares outstanding at June 30 and August 10, 2011.
Outlook, risks, and other disclosures
Management planned to find refinery partners, solicit sellers of unwanted precious-metal items, and earn a spread between scrap and spot prices. The company said it lacked sufficient funds to execute its plans over the next 12 months and would need additional capital, including for marketing. Officers and directors had orally expressed willingness to cover operating expenses if outside financing was unavailable, but were not legally or contractually obligated to lend. Management identified substantial going-concern uncertainty; continuation depended on commencing operations and obtaining related-party debt or equity. There were no capital-expenditure commitments or off-balance-sheet arrangements. The filing reported no pending material legal proceedings and stated that disclosure controls were effective.
Important facts to verify
- Confirm the issuer: the request names Silo Pharma, while the supplied filing and financial statements are for Gold Swap Inc.
- Verify the company’s corporate identity and jurisdiction: the filing header identifies Nevada, while the notes say it was incorporated in New York.
- Assess the going-concern funding plan and whether any financing or related-party support became legally committed.
- Verify progress toward launching operations, including refinery agreements, customer acquisition, and the proposed revenue model.
- Review the valuation and related-party nature of the 21.5 million shares issued for services, which drove most inception-to-date expense.