Business Context and Reporting Period
Company: International Surf Resorts, Inc. (Note: Metadata referenced "Cocrystal Pharma," but the filing text identifies the registrant as International Surf Resorts, Inc.)
Reporting Period: Quarterly period ended June 30, 2008 (Form 10-Q).
Status: Development Stage Company and Shell Company.
Operations: The Company is an internet-based provider of international surf resorts and tours. It owns 55% of a Mexican subsidiary, ISR de Mexico, which holds 2.5 acres of real property in San Juanico, Baja California Sur, intended for a surf camp. The Company has generated no revenue since inception (December 4, 2006).
Key Financial Metrics
| Metric | Six Months Ended June 30, 2008 | Three Months Ended June 30, 2008 | As of June 30, 2008 |
|---|---|---|---|
| Net Revenue | $0 | $0 | N/A |
| Operating Expenses | $37,573 | $15,356 | N/A |
| Net Loss | $(35,537) | $(14,429) | N/A |
| Cash and Cash Equivalents | N/A | N/A | $85,142 |
| Total Assets | N/A | N/A | $147,730 |
| Total Liabilities | N/A | N/A | $35,703 |
| Stockholders' Equity | N/A | N/A | $113,193 |
| Accumulated Deficit | N/A | N/A | $(97,107) |
Debt: No long-term debt or notes payable outstanding as of June 30, 2008. Previous notes payable were converted to equity in 2007.
Liquidity: Current assets ($85,495) exceed current liabilities ($35,703).
Material Changes vs. Prior Period
- Operating Expenses: Increased significantly from $6,940 for the six months ended June 30, 2007, to $37,573 for the same period in 2008. This was primarily driven by a rise in legal and professional fees (from $3,585 to $28,086).
- Net Loss: The Company reported a net loss of $35,537 for the six months ended June 30, 2008, compared to a net loss of $5,048 in the prior year period. For the three-month period, the loss widened from a net income of $1,357 in 2007 to a net loss of $14,429 in 2008.
- Cash Position: Cash decreased from $109,846 at December 31, 2007, to $85,142 at June 30, 2008, a reduction of $24,704.
- Assets: The Company acquired computer equipment ($1,012) during the period. Investment in real property remained constant at $61,335.
Outlook, Risks, and Management Commentary
Plan of Operation: Management intends to assess the feasibility of building surf casas (vacation rentals) or subdividing the Mexican property for sale. The Company also plans to complete website development (estimated cost $5,000) to attract customers for guided surf adventures.
Capital Needs: While management believes current cash ($85,142) is sufficient for the next 12 months, the Company anticipates needing additional capital to expand product offerings and generate revenue. The Company has experienced significant difficulties raising capital due to tightening equity and credit markets.
Risks:
- Going Concern: The Company has incurred cumulative losses of $97,107 since inception. There is no assurance that additional financing will be available to fund development activities.
- Revenue Generation: The Company has no revenue history. Failure to generate revenue to cover operating costs could lead to business failure.
- Joint Ventures: The Company is exploring joint ventures for property development but has not identified candidates as of the filing date.
Investor Verification Checklist
- Company Identity: Verify the registrant is International Surf Resorts, Inc., not Cocrystal Pharma, Inc.
- Revenue Status: Confirm the Company remains in the development stage with zero revenue since inception.
- Cash Burn Rate: Review the $24,704 cash decrease over six months against the $85,142 cash balance to assess runway.
- Expense Spikes: Investigate the specific legal and professional fees totaling $28,086 for the six-month period.
- Property Feasibility: Monitor progress on the feasibility study for the San Juanico, Mexico property, which is the primary asset ($61,335).
- Financing History: Note the Company's stated difficulty in raising capital and the lack of identified joint venture partners.