10-Q: AMJ Global Technology Reports Q2 Loss, Raises Going Concern Doubts

AMJ Global Technology reported a significant net loss for the second quarter and six months ended May 31, 2025, alongside a substantial increase in liabilities and ongoing going concern issues.

Summary

• Reported a net loss of $79,052 for the three months ended May 31, 2025, a significant deterioration from net income of $53,015 in the prior year period.
• Incurred a net loss of $134,414 for the six months ended May 31, 2025, compared to a net income of $3,341 in the prior year period.
• Total assets increased to $886,948 as of May 31, 2025, from $9,253 at November 30, 2024, primarily due to a $1,000,000 equity investment in a related party, Dark Bull Capital, Inc.
• Total liabilities surged to $1,190,408 as of May 31, 2025, from $200,928 at November 30, 2024, largely driven by a $1,000,000 non-interest-bearing loan from a related party for the Dark Bull acquisition.
• Working capital deficiency worsened to $(287,875) as of May 31, 2025, from $(195,422) at November 30, 2024.
• The cash balance is critically low at $4 as of May 31, 2025.
• Terminated a software purchase and development agreement with Dataark Systems LLC, resulting in the cancellation of 1,333,333 common shares.
• Terminated a share exchange agreement with JP Michael LLC for Diamond Lake Mineral, Inc. stock.
• Management identified substantial doubt about the company's ability to continue as a going concern.
• Disclosure controls and procedures were deemed ineffective due to limited accounting personnel and lack of formalized period-end close and review controls.

Sentiment

Score: 2

Explanation: The company reported significant losses, critically low cash, a worsening working capital deficiency, and substantial doubt about its ability to continue as a going concern. Strategic initiatives were terminated, and internal controls are ineffective. The only positive is a slight reduction in cash used in operations, but this is overshadowed by overall financial deterioration and operational instability.

Positives

• Equity investment income from related parties totaled $442 for the six months ended May 31, 2025.
• Cash used in operating activities decreased to $17,689 for the six months ended May 31, 2025, from $31,674 in the prior year period.

Negatives

• Reported a net loss of $134,414 for the six months ended May 31, 2025, a significant decline from a net income of $3,341 in the same period last year.
• Total liabilities increased by $989,480 to $1,190,408 as of May 31, 2025, primarily due to a $1,000,000 loan from a related party.
• Working capital deficiency worsened to $(287,875) from $(195,422) at November 30, 2024.
• The cash balance is critically low at $4 as of May 31, 2025.
• Accumulated deficit increased to $(610,688) as of May 31, 2025.
• No operating revenues were generated during the three and six months ended May 31, 2025, or 2024.
• Operating expenses increased to $118,502 for the six months ended May 31, 2025, from $94,768 in the prior year period.
• Terminated a software purchase agreement and a share exchange agreement, indicating failed strategic initiatives.
• Disclosure controls and procedures were deemed ineffective due to limited accounting personnel and lack of formalized period-end close and review controls.

Risks

• Substantial doubt exists about the company's ability to continue as a going concern due to consistent cash usage in operations and a growing accumulated deficit.
• The company's continuation as a going concern is dependent upon its ability to generate revenues and secure continued investment capital and loans from related parties.
• There is no assurance that the company will be successful in securing additional working capital from investors for common stock, convertible notes payable, or strategic partnerships.
• Disclosure controls and procedures were not effective as of May 31, 2025, due to limited accounting personnel, insufficient segregation of duties, and lack of formalized period-end close and review controls.
• Realization of deferred tax assets is uncertain and dependent on the company generating sufficient taxable income in future periods.

Future Outlook

The company is currently evaluating operations in the holistic health industry, revenue sharing generated from Medicare enrollees, and life and annuity insurance sales, which are expected to generate revenue and cash flow. Management intends to fund operations through debt and/or equity financing arrangements and is in the process of securing working capital from investors for common stock, convertible notes payable, and/or strategic partnerships. However, no assurance can be given that the company will be successful in these efforts.

Management Comments

• We are a start-up company developing mobile software products, starting in Estonia and Europe, which is our initial intended market.
• We intend to provide services to formulate a treatment model to meet the needs of professional athletes that suffer from PTSD and the early onset of dementia and Alzheimers.
• Our continuation as a going concern is dependent upon our ability to generate revenues and our ability to continue receiving investment capital and loans from related parties to sustain our current level of operations.
• We are in the process of securing working capital from investors for common stock, convertible notes payable, and/or strategic partnerships.
• There can be no assurance that we will be successful in raising additional funding.
• As of May 31, 2025, our disclosure controls and procedures were not effective due to (i) limited accounting personnel, resulting in insufficient segregation of duties, and (ii) lack of formalized period-end close and review controls.

Industry Context

AMJ Global Technology operates as a start-up with a diverse and somewhat unfocused strategy, initially in mobile software, then pivoting to holistic health technology for athletes, and now evaluating revenue sharing from Medicare and insurance sales. This broad approach, coupled with a lack of revenue and significant reliance on related party financing, suggests the company is still in a very early, exploratory phase, struggling to establish a viable business model in competitive and regulated sectors. The termination of software and share exchange agreements indicates difficulty in executing strategic initiatives.

Comparison to Industry Standards

• As a start-up with no operating revenue for the reported periods, AMJ Global Technology significantly underperforms established companies in both the software development and healthcare/insurance industries.
• The company's reliance on related party financing and its 'going concern' warning are typical of early-stage ventures but indicate a higher risk profile compared to more mature or well-funded start-ups that have demonstrated initial market traction or secured substantial external, non-related party investment.
• The termination of the Dataark Systems LLC software agreement and the JP Michael LLC share exchange agreement suggests a lack of successful execution on strategic partnerships, which is a critical benchmark for growth-oriented start-ups.
• The ineffective disclosure controls and procedures are a significant governance weakness, contrasting sharply with the robust internal controls expected of publicly traded companies, even smaller reporting companies.

Management Changes

Corporate Governance

Legal Proceedings

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

Related Party Transactions

• AMJ Global Entertainment, LLC (controlled by CEO/Director Dr. Malone) assigned 25% ownership rights to the Blabeey platform IP to the company at zero cost on April 26, 2023.
• The company acquired a 5% equity and revenue sharing agreement in Dark Bull Capital, Inc. (controlled by a shareholder and Board member, Vern Barkdull) on July 13, 2024, for 133,334 shares of common stock.
• The company acquired AMJ Global Entertainment, LLC's 25% equity interest in Dark Bull Capital, Inc. (a company controlled by a related party) for $1,000,000 in cash on January 24, 2025, with a two-year payment term and a four-month extension, with the option for the seller to take restricted stock at $1.00 per share for any unpaid balance.
• AMJ Global Entertainment LLC advanced $11,333 and $31,674 to the company for operating expenses during the six months ended May 31, 2025, and 2024, respectively, and $2,395 and $500 in cash.
• The company repaid advances to a related party of $2,326 during the six months ended May 31, 2025.
• Management compensation of $60,000 was recognized for both the six months ended May 31, 2025, and 2024.
• Office rent expenses of $3,000 were recognized for both the six months ended May 31, 2025, and 2024, under a month-to-month lease with a company controlled by a related party.
• The company owed $27,568 and $16,166 to AMJ Global Entertainment LLC as of May 31, 2025, and November 30, 2024, respectively, which is unsecured, non-interest bearing, and due on demand.
• The company owed $1,000,000 to AMJ Global Entertainment LLC as of May 31, 2025, for the equity acquisition, secured with 1,000,000 shares of common stock.
• Issued 20,000 shares of common stock to one advisory board member for compensation valued at $20,000 during the six months ended May 31, 2025.
• Issued 40,000 shares of common stock to four advisory board members for compensation valued at $1,048 during the six months ended May 31, 2024.
• Issued 400,000 shares of common stock to four board of directors members for compensation valued at $1,048 during the six months ended May 31, 2024.
• Issued 100,000 shares of common stock for settlement of $50,000 management fees payable to the CEO and director, resulting in a gain of $49,738 during the six months ended May 31, 2024.
• Issued 102,200 shares of common stock for settlement of $48,639 due to AMJ Global Entertainment, LLC, resulting in a gain of $48,371 during the six months ended May 31, 2024.

Stakeholder Impact

• Shareholders face significant dilution risk from potential future stock issuances for capital raises or debt settlement. The company's 'going concern' status and lack of revenue pose a high risk to investment value.
• Creditors face high risk due to the company's 'going concern' status, critically low cash, and substantial accumulated deficit. Significant debt is owed to related parties, which may have different repayment priorities than external creditors.
• Management and related parties continue to be the primary source of funding and are involved in significant transactions, indicating a high level of dependence and potential conflicts of interest.
• Employees may face job insecurity given the company's financial instability and 'going concern' warning, though the filing does not detail employee numbers.

Next Steps

• Generate revenues from holistic health industry, Medicare enrollees, and life and annuity insurance sales.
• Secure working capital from investors for common stock, convertible notes payable, and/or strategic partnerships.
• Address the ineffectiveness of disclosure controls and procedures, including improving accounting personnel and formalizing period-end close and review controls.

Key Dates

Recommendation

AMJ Global Technology exhibits severe financial distress, marked by a substantial net loss, critically low cash reserves ($4), a worsening working capital deficiency, and an accumulated deficit exceeding $610,000. The company explicitly states 'substantial doubt about its ability to continue as a going concern.' Strategic initiatives, including a software development agreement and a share exchange, were terminated, indicating operational failures. Furthermore, disclosure controls and procedures are deemed ineffective, raising serious governance concerns. While the company is pursuing new revenue streams and capital raises, there is no assurance of success, and its heavy reliance on related-party financing suggests a lack of independent viability. These factors collectively point to an extremely high-risk investment with a high probability of further value erosion.

Keywords

AMJ Global Technology, 10-Q, Quarterly Report, Financial Results, Net Loss, Going Concern, Related Party Transactions, Equity Investment, Software Development, Holistic Health, Medicare Revenue Sharing, Corporate Governance, Disclosure Controls, SEC Filing