Business Context and Reporting Period
This Form 10-Q covers the quarterly period ended March 31, 2011, for Tamandare Explorations Inc. (Note: The input metadata referenced "Tonix Pharmaceuticals," but the filing text explicitly identifies the registrant as Tamandare Explorations Inc.). The company is an exploration-stage entity with no revenues to date. It previously explored the Que 1-4 property in Nevada but abandoned it in 2009 and is currently seeking new mineral properties or business opportunities.
Key Financial Metrics
| Metric | Q1 2011 | Q1 2010 | Inception to Q1 2011 |
|---|---|---|---|
| Revenue | $0 | $0 | $0 |
| Net Loss | $(5,515) | $(5,822) | $(76,196) |
| Cash Balance (End of Period) | $1,369 | $6,109 | $1,369 |
| Net Cash Used in Operating Activities | $(3,255) | $(6,497) | $(73,631) |
| Total Liabilities | $12,566 | N/A | N/A |
| Related Party Loan | $10,000 | N/A | N/A |
| Shares Outstanding | 5,500,000 | 5,500,000 | 5,500,000 |
Liquidity: The company holds $1,369 in cash against $12,566 in total liabilities. Management believes current cash and a $10,000 related-party loan will sustain operations for the next 12 months.
Material Changes
- Cash Position: Cash decreased by $3,255 during the quarter, dropping from $4,624 at the end of 2010 to $1,369.
- Liabilities: Accounts payable increased by $2,260 to $2,566. Total liabilities rose to $12,566, primarily driven by the $10,000 non-interest-bearing loan from a director (David Moss) and accrued payables.
- Operations: The company continues to incur losses with no revenue generation. Expenses for the quarter were $5,515, slightly lower than the $5,822 incurred in the same period in 2010.
Outlook, Risks, and Management Commentary
- Going Concern: The filing includes a substantial doubt regarding the company's ability to continue as a going concern. Continued operations depend on shareholder support and obtaining equity financing.
- Plan of Operation: The primary goal for the next 12 months is to secure a new mineral property or identify other business opportunities. Management states there are no assurances of success.
- Internal Controls: Management concluded that disclosure controls and procedures were not effective as of March 31, 2011, due to the company's limited size and reliance on a financial consultant. Mitigation efforts include CEO review of financial statements.
- Related Party Risks: The sole officer and director, David Moss, holds a $10,000 loan and may face conflicts of interest with other business opportunities.
Investor Verification Checklist
- Verify the company's ability to secure new equity financing given the "substantial doubt" going concern warning.
- Confirm the status of the $10,000 related-party loan and any potential repayment terms or conversion to equity.
- Assess the progress in identifying new mineral properties or business opportunities to replace the abandoned Nevada project.
- Review the effectiveness of internal controls, noting the current reliance on a single officer to review financial statements prepared by a consultant.
- Monitor cash burn rate, as the current balance of $1,369 is significantly lower than total liabilities of $12,566.