10-Q: AI Technology Group Reports Q3 Loss Amid Acquisition Efforts

AI Technology Group Inc. reported a significant increase in net loss for Q3 2025, driven by operational expenses, while pursuing an acquisition and facing going concern doubts.

Summary

• AI Technology Group Inc. (AIPG) reported a net loss of $29,628 for the three months ended September 30, 2025, a substantial increase from $750 in the same period of 2024.
• For the nine months ended September 30, 2025, the net loss was $33,889, compared to $1,962 for the nine months ended September 30, 2024.
• The company generated no revenue from its operations during both the three and nine-month periods ended September 30, 2025 and 2024.
• Operating expenses for the three months ended September 30, 2025, totaled $29,628, primarily consisting of accounting fees ($13,800), consulting fees ($7,500), and OTC fees ($4,895).
• As of September 30, 2025, the company had a working capital deficit of $75,176 and a total stockholders' deficit of $75,176.
• The company's cash balance remained at $0 at the end of the period, with operations entirely funded by advances from a related party.
• A change in control occurred on July 29, 2025, with Marcus Johnson becoming the new President, CEO, and CFO, acquiring 78.85% of the common stock.
• The company entered into a definitive agreement on August 1, 2025, to acquire AVM Biotechnology Inc. through the issuance of shares and convertible loans.
• Subsequent to the period, on October 7, 2025, 27,958,695 restricted common shares were issued to shareholders of Biomed360 Solutions Corp. as part of the acquisition agreement.
• The company restated its December 31, 2024, balance sheet to correct a material error, which included increasing prepaid expenses from $0 to $5,445, decreasing related party liabilities from $47,540 to $46,732, and reducing the accumulated deficit from $(4,361,097) to $(4,354,844).

Sentiment

Score: 1

Explanation: The company exhibits severe financial distress with no revenue, increasing losses, a significant accumulated deficit, and a going concern opinion. Reliance on related party funding and ineffective internal controls further compound the negative outlook, despite a proposed acquisition.

Positives

• The company is actively pursuing a proposed acquisition of AVM Biotechnology Inc. and has already issued shares to Biomed360 Solutions Corp., indicating strategic movement.
• A new management team, led by Marcus Johnson, has taken control, potentially bringing a fresh strategic direction.

Negatives

• The company reported no revenue for the three and nine months ended September 30, 2025, and has generated no revenues since inception.
• Net loss significantly increased to $29,628 for the three months ended September 30, 2025, from $750 in the prior year period.
• Net loss for the nine months ended September 30, 2025, rose to $33,889 from $1,962 in the prior year period.
• The company has an accumulated deficit of $4,388,733 since inception.
• A working capital deficit of $75,176 and a total stockholders' deficit of $75,176 as of September 30, 2025, indicate severe financial distress.
• The company has no cash on hand, relying entirely on related party advances to fund operations.
• Auditors issued a "going concern" opinion, raising substantial doubt about the company's ability to continue operations for the next twelve months without additional capital.
• Disclosure controls and procedures were deemed "not effective" as of September 30, 2025, due to material weaknesses in internal controls over financial reporting.
• The company's funds are insufficient to fund planned operations or maintain its reporting status.

Risks

• Going Concern Risk: The company has no revenues, significant accumulated losses, and a working capital deficit, raising substantial doubt about its ability to continue as a going concern.
• Funding Risk: The company is entirely dependent on raising additional capital through private placements and advances from related parties to fund operations and implement its business plan.
• Acquisition Uncertainty: The proposed acquisition of AVM Biotechnology Inc. is subject to customary closing conditions, and there is no assurance that the transaction will close.
• Operational Risk: The company has not yet generated any revenue from its business operations, indicating a lack of a viable revenue-generating business model.
• Internal Control Weaknesses: Material weaknesses in internal controls over financial reporting mean disclosure controls and procedures are not effective, posing risks to financial reporting reliability.
• Related Party Dependence: The company's operations are entirely funded by advances from its sole officer and director, creating dependence and potential conflicts of interest.

Future Outlook

The company anticipates no substantial revenues until its plan of operations is implemented. It intends to fund its business through private placements and advances from related parties. The proposed acquisition of AVM Biotechnology Inc. is ongoing, with convertible loans expected to be provided to AVM over the next several months, though the closing of this transaction remains uncertain.

Management Comments

• The Company intends to continue to fund its business by way of private placements and advances from related parties as may be required.
• In the opinion of Management, all adjustments considered necessary for a fair presentation, consisting solely of normal recurring adjustments, have been made.
• Operating results for the nine months ended September 30, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025.
• Our auditors have issued a going concern opinion, meaning that there is substantial doubt if we can continue as an on-going business for the next twelve months unless we obtain additional capital.
• No substantial revenues are anticipated until we have implemented our plan of operations.
• We must raise cash to implement our strategy and stay in business.
• The funds available to the Company will not be sufficient to fund the planned operations of the Company and maintain a reporting status.
• Our disclosure controls and procedures were not effective due to the existence of material weaknesses in our internal controls over financial reporting.

Industry Context

AI Technology Group Inc. operates as a development-stage company with no current revenue-generating operations. Its historical business has shifted from electromagnetic motor R&D to real estate, and now, nominally, to AI technology. The proposed acquisition of AVM Biotechnology Inc. suggests a pivot towards the biotechnology sector, which is a highly competitive and capital-intensive industry. Without a clear business plan, substantial capital, or established market position, the company's current activities are largely disconnected from broader industry trends in either AI or biotechnology, beyond the intent to enter these fields.

Comparison to Industry Standards

• The company's complete lack of revenue and significant accumulated deficit ($4,388,733) stands in stark contrast to established companies in the AI or biotechnology sectors, which typically demonstrate substantial R&D investment, intellectual property development, and often, early-stage revenue or significant capital raises.
• The reliance on related party advances for all operational funding is not a sustainable or standard practice for publicly traded companies seeking to scale or compete in capital-intensive industries.
• The "going concern" opinion and ineffective internal controls are critical red flags that would typically deter institutional investors and are far below the governance and financial health standards expected of even early-stage public companies.
• The proposed acquisition of AVM Biotechnology Inc. and the issuance of shares to Biomed360 Solutions Corp. are initial steps, but without detailed financial projections, strategic rationale, or a clear path to integration and monetization, it is difficult to compare to successful M&A activities in the biotech space, such as those seen with larger pharmaceutical companies acquiring promising startups.

Management Changes

Corporate Governance

Legal Proceedings

• The company is not a party to any pending legal proceedings, and no such proceedings are known to be contemplated.

Related Party Transactions

• During the nine-month period ended September 30, 2025, the CEO (Marcus Johnson) paid expenses of $20,644 on behalf of the company.
• Total amount owed to the company's president (Marcus Johnson) as of September 30, 2025, is $67,375.
• The shareholder loan outstanding as of December 31, 2024, of $46,732 was transferred to a company controlled by Marcus Johnson.
• Subsequent to the period, the president paid an additional $18,996 in invoices, bringing the total owing to the president to $80,299 as of November 14, 2025.
• All amounts due to related parties are unsecured, non-interest-bearing, and have no set terms of repayment.

Stakeholder Impact

• Shareholders: Existing shareholders face significant dilution risk from future capital raises and the proposed acquisition. The "going concern" opinion and lack of revenue pose a high risk to investment value.
• Creditors: The company's reliance on related party advances and lack of cash flow indicate high credit risk for any external creditors.
• Employees: While not explicitly mentioned, a company in this financial state typically has limited resources for employees, potentially impacting morale and retention if any exist beyond management.
• Customers/Suppliers: The company has no revenue-generating operations, so direct impact on customers is minimal. Suppliers face payment risk given the company's financial condition.

Next Steps

• Provide certain convertible loans to AVM Biotechnology Inc. over the next several months prior to the closing of the acquisition.
• Work towards closing the proposed acquisition of AVM Biotechnology Inc., which is subject to customary conditions.
• Raise additional capital through private placements and advances from related parties to meet ongoing obligations and fund anticipated operating losses.
• Implement a plan of operations to generate substantial revenues.
• Address and remediate the material weaknesses in internal controls over financial reporting to improve disclosure controls and procedures.

Key Dates

Recommendation

AI Technology Group Inc. is a development-stage company with no revenue, significant and increasing net losses, and an accumulated deficit exceeding $4.3 million. The auditors have issued a going concern opinion, indicating substantial doubt about the company's ability to continue operations. The company has no cash, relies entirely on unsecured, non-interest-bearing advances from its sole officer and director, and has ineffective internal controls. While a new management team is in place and a proposed acquisition is underway, the fundamental financial health is extremely poor, and the path to profitability or sustainable operations is highly uncertain and speculative. The stock carries extreme risk, and a seasoned investor would likely recommend a strong sell to avoid further capital erosion.

Keywords

AI Technology Group, AIPG, 10-Q, Quarterly Report, Financial Results, Net Loss, Going Concern, Acquisition, Biomed360 Solutions Corp., AVM Biotechnology Inc., Marcus Johnson, Related Party Transactions, Internal Controls, SEC Filing, Small Cap, Development Stage Company