Business Context and Reporting Period
This Form 10-Q covers the quarterly period ended March 31, 2009, for Tamandare Explorations Inc. (Note: The request metadata listed "Tonix Pharmaceuticals," but the filing text explicitly identifies the registrant as Tamandare Explorations Inc.). The company is an exploration-stage entity incorporated in Nevada with principal offices in Zurich, Switzerland. It holds the Que 1-4 Mineral Claims in Nevada for silver and other mineral exploration. The company has generated no revenues since its inception on November 16, 2007.
Key Financial Metrics
| Metric | Three Months Ended Mar 31, 2009 | Three Months Ended Mar 31, 2008 | Accumulated (Inception to Mar 31, 2009) |
|---|---|---|---|
| Revenue | $0 | $0 | $0 |
| Net Loss | $(10,864) | $(9,045) | $(32,955) |
| Cash Balance (End of Period) | $31,411 | $4,998 | $31,411 |
| Net Cash Used in Operating Activities | $(9,064) | $(9,045) | $(33,589) |
| Total Liabilities | $0 | $3,000 | $0 |
| Shares Outstanding | 5,500,000 | 3,000,000 | 5,500,000 |
Liquidity: The company reported no outstanding liabilities as of March 31, 2009, after returning a $3,000 duplicate stock subscription payment received in the prior period.
Material Changes vs. Prior Period
- Net Loss Increase: Net loss increased by approximately 20% to $10,864 for the quarter ended March 31, 2009, compared to $9,045 in the same period in 2008. This was driven primarily by an increase in mineral property expenses ($8,500 vs. $7,000) and general administrative expenses ($864 vs. $45), partially offset by a decrease in professional fees ($1,500 vs. $2,000).
- Cash Position: Cash on hand increased significantly to $31,411 from $4,998 in the prior year quarter, reflecting capital raised in previous periods.
- Liabilities: Current liabilities decreased to zero from $3,000 in the prior period due to the return of a duplicate investor payment.
- Share Count: The weighted average shares outstanding increased from 3,000,000 in the prior year to 5,500,000 in the current quarter.
Outlook, Risks, and Management Commentary
Plan of Operation: Management anticipates spending approximately $29,000 over the next 12 months. This includes $19,000 for exploration phases (Phase 1A and Phase 2) and $10,000 for professional fees and administrative costs. Phase 1A (fill-in MMI sampling) was completed in April 2009, and results are pending. Phase 2 is tentatively scheduled for the second quarter of 2009.
Going Concern Risk: The filing explicitly states that the company has never generated revenues and has accumulated losses of $32,955. The continuation of the company is dependent on obtaining necessary equity financing and shareholder support. These factors raise substantial doubt regarding the company's ability to continue as a going concern.
Internal Controls: Management concluded that disclosure controls and procedures were not effective as of March 31, 2009. The company relies on the CEO to review financial statements prepared by a consultant due to limited staff.
Exploration Risks: There is no assurance that the mineral claims contain reserves. Funds spent on exploration may be lost, and substantial additional funding will be required to bring any potential deposit to production.
Investor Verification Checklist
- Verify the company's ability to raise the estimated $29,000 required for operations over the next 12 months, given the "substantial doubt" regarding going concern status.
- Confirm the results of the Phase 1A MMI sampling completed in April 2009 to determine if Phase 2 exploration is warranted.
- Review the status of the "all or nothing" offering completed in October 2008 and any subsequent capital raises.
- Assess the timeline and cost estimates for Phase 2 and Phase 3 exploration, noting that actual costs may exceed management's estimates.
- Monitor the company's progress in remediating the material weakness in internal controls over financial reporting.