0001493152-26-013999
SEC filingRevenue was $3.4K (-37.0%) Gross Profit was $3.1K (-23.9%) Operating Income was -$1.2M (5.4%) Net Income was -$1.3M (3.2%)
Gross profit was $3.1K for the year, down 23.9% from $4.1K in 2024. The gross margin remained elevated at 91.7%, indicating that the core cost of revenue is minimal relative to sales. However, operating income was -$1.2M, and net income was -$1.3M. The year-over-year change shows a slight improvement in operating loss (5.4%) and net loss (3.2%), but losses remain substantial. Management attributes cost increases to products being generally released to customers and higher sales and marketing consultancy expenses. A decrease in certain costs was noted due to an adjustment to the 2024 amortization of intellectual property. The operating margin is deeply negative, reflecting high fixed operating costs against negligible revenue, a structural challenge the company must address to achieve profitability.
Net cash used in operating activities was -$271K, a deterioration from -$145K in the prior year. Management explains that the increase was primarily due to the receipt of related-party loan funding in late December. The company discloses that over the last two years, and as of the date of this report, it has faced an increasingly challenging liquidity situation that has limited its ability to implement its operating plan. The decrease in current assets was primarily due to the timing of funding and making payments. The auditor has issued a going-concern opinion, noting the company's accumulated deficits and dependence on obtaining additional financing to continue operations. This reliance on external funding introduces significant uncertainty regarding the company's ability to meet its obligations and execute its business plan.
The filing details multiple operational and governance risks. Management reported a material weakness in internal control over financial reporting due to inadequate segregation of duties and limited personnel, which raises concerns about the reliability of financial reporting. The company is engaged in litigation with a preferred stockholder, GHS Investments LLC, which is seeking the appointment of a custodian or receiver—a direct challenge to management's control and corporate stability. The Risk Factors section further outlines dependencies on key personnel, intense competition, and the penny stock status of its shares, which may reduce liquidity and increase volatility. Management's outlook is cautious, noting that future success depends on obtaining necessary financing and executing its business plan, with no guarantee of retaining key employees or attracting new talent as needed.