0001477932-26-001635
SEC filing1606 Corp. (CBDW) reported no revenue for FY 2025, consistent with FY 2024's minimal $7,195. The company incurred a net loss of $1.3 million, an improvement from the $4.5 million loss in FY 2024, primarily due to reduced operating expenses ($486K vs. $4.1M) as stock-based compensation declined. Gross profit was $0, with total assets at $16K and stockholders' deficit of $3.2M. Cash flow from operations was negative $461K, while financing activities provided $459K. The company's strategic focus shifted from AI chatbots to acquiring power infrastructure assets, including a pending $11.2 million Texas property acquisition, though financing remains uncertain.
1606 Corp. reported no revenue for FY 2025, unchanged from FY 2024's minimal $7,195 from consulting services. The company reduced its net loss to $1.3 million from $4.5 million in FY 2024, primarily due to lower operating expenses of $486K compared to $4.1M, as stock-based compensation declined from approximately $3.0M to $0. Gross profit was $0, with total assets of $16K and stockholders' deficit of $3.2M. Cash used in operations was $461K, while financing activities provided $459K from notes and stock sales. The company ended with $0 cash, raising substantial doubt about its ability to continue as a going concern.
No revenue was generated in FY 2025. The company's historical revenue came from discontinued hemp product sales and minimal consulting services. The strategic focus has shifted from AI chatbot licensing to power infrastructure acquisition, with no current revenue-generating operations. The company plans to generate future revenue through a monthly licensing model for its chatbots, but as of FY 2025, no customers were signed. All FY 2024 revenue of $7,195 came from consulting services to one potential chatbot customer.
Gross margin was 0% with no revenue and $0 cost of goods sold. Operating loss improved to $486K from $4.1M, reflecting an 88.3% reduction. The improvement was primarily due to the absence of stock-based compensation expense, which was $3.0M in FY 2024. Interest expense increased to $954K from $491K, partially offset by a $232K gain from change in fair value of derivative liabilities. The company's accumulated deficit grew to $8.2M from $6.9M, indicating ongoing financial challenges.
Net cash used in operating activities was $461K, driven by the $1.3M net loss, adjusted for non-cash items including $851K debt discount amortization and $232K change in derivative liabilities. Cash from financing activities was $459K, primarily from $540K in note proceeds and $83K from stock sales. The balance sheet shows minimal assets of $16K, with $3.2M in current liabilities including $1.6M derivative liability and $902K convertible notes. Stockholders' deficit of $3.2M reflects the company's negative equity position.
The company's strategic focus has shifted to acquiring power infrastructure assets, including a pending $11.2 million Texas property purchase with a 55-megawatt power generation facility. However, the company has not secured the $7 million cash portion required for closing and faces substantial financing risk. Management estimates a $1 million cash need for the next 12 months, excluding the Texas acquisition. The company is negotiating with Sim Agro Inc. for a potential controlling interest transaction and has a $6 million investment commitment letter from ENMAS EPC Power Projects Limited. Failure to secure financing could result in forfeiture of a $250,000 earnest money deposit and inability to complete the strategic shift.