10-Q: AppSoft Technologies Reports Q3 2025 Loss, Going Concern Doubts Persist

AppSoft Technologies reported a significant increase in net loss and a substantial accumulated deficit for Q3 2025, raising substantial doubt about its ability to continue as a going concern.

Summary

• AppSoft Technologies reported a net loss of $18,830 for the three months ended September 30, 2025, compared to a net loss of $10,457 for the same period in 2024.
• For the nine months ended September 30, 2025, the net loss was $74,820, significantly higher than the $39,187 loss in the prior year period.
• The company recorded no revenue for both the three and nine months ended September 30, 2025 and 2024.
• Total liabilities increased to $553,463 as of September 30, 2025, from $478,736 at December 31, 2024.
• Cash on hand decreased to $8 as of September 30, 2025, from $101 at December 31, 2024.
• The accumulated deficit grew to $1,090,540 as of September 30, 2025.
• Management concluded that disclosure controls and procedures were not effective as of September 30, 2025, due to limited internal resources.
• The company's ability to continue as a going concern is in substantial doubt, dependent on generating profitable operations or securing additional financing.

Sentiment

Score: 1

Explanation: The company reported no revenue, significantly increased losses, critically low cash, and a deepening accumulated deficit. Management expressed substantial doubt about its ability to continue as a going concern and reported ineffective disclosure controls. These factors indicate a dire financial situation and high operational risk.

Positives

• The maturity date of the Bryan Glass Securities, Inc. (BGS) Drawdown Promissory Note was extended to December 31, 2027, providing continued access to a credit facility.
• $92,077 remains available for advances under the BGS Drawdown Note as of September 30, 2025.
• Management is actively seeking additional equity funding from current or new shareholders.
• The company has no contractual obligations as of September 30, 2025.

Negatives

• No revenue was generated for the three and nine months ended September 30, 2025, or the comparable 2024 periods, indicating a lack of core business activity.
• Net loss significantly increased to $18,830 for Q3 2025 from $10,457 in Q3 2024, and to $74,820 for the nine months ended September 30, 2025, from $39,187 in the prior year.
• Cash balance is critically low at $8 as of September 30, 2025.
• Total liabilities increased by approximately 15.6% to $553,463 from $478,736 since December 31, 2024.
• The accumulated deficit reached $1,090,540, reflecting sustained losses.
• Disclosure controls and procedures were deemed ineffective due to limited internal resources and lack of multiple transaction review levels.
• The company has paused operations for Esportsreporter due to a lack of financial and personnel resources.

Risks

• Inability to obtain financing as and when needed on acceptable terms.
• Failure to develop or acquire and publish new Apps that achieve market acceptance or to enhance existing Apps.
• Inability to maintain a good relationship with the markets where Apps are distributed.
• Inability to keep pace with technological changes and market conditions in the Apps industry.
• Inability to compete against a wide range of companies with significantly greater resources.
• Substantial doubt about the company's ability to continue as a going concern due to accumulated deficit and cash used in operations.
• Cash on hand and cash flow from operations are not sufficient to fund existing operations or desired development and acquisition strategy.
• If adequate funds are not available, the company may be unable to develop or commercialize products, take advantage of future opportunities, repay debt, or respond to competitive pressures, potentially leading to cessation of operations.
• Stockholders may experience additional dilution if the company issues additional equity or debt securities.
• The ineffectiveness of disclosure controls and procedures due to limited internal resources poses a risk to accurate financial reporting.

Future Outlook

The company's future outlook is highly uncertain, dependent on its ability to secure significant additional capital to fund the development, commercialization, and marketing of its Apps. Operations for its Esportsreporter platform are currently paused due to resource constraints. Management aims to continue monitoring working capital and maintaining low corporate overhead, but cannot assure that required capital will be available on acceptable terms or at all, which could materially adversely affect its business and potentially lead to cessation of operations.

Management Comments

• To address these aforementioned, management has undertaken the following initiatives: 1) enter into discussions to secure additional equity funding from current or new shareholders; 2) undertake a program to continue to monitor the Company’s ongoing working capital requirements and minimum expenditure commitments; 3) continue their focus on maintaining an appropriate level of corporate overhead in line with the Company’s available cash resources.
• We have been constrained by our lack of financial and personnel resources from promoting our existing Apps, or publishing Esportsreporter and have paused these operations until such time as we possess the means to move these businesses forward.
• We believe generally that to the extent we can complete more development work on an App in house, the greater percentage of net revenue we can realize from that App.
• We cannot be sure that the additional capital we require will be available on acceptable terms or at all. If adequate funds are not available on acceptable terms or at all, we may be unable to develop or commercialize products, take advantage of future opportunities or respond to competitive pressures, any of which would have a material adverse effect on our business, prospects, financial condition, and results of operations.
• Our management acknowledges the existence of this problem [ineffective disclosure controls], and intends to developed procedures to address them to the extent possible given limitations in financial and manpower resources.

Industry Context

AppSoft Technologies operates in the highly competitive and capital-intensive mobile app and e-gaming industry. The company's current state of minimal revenue, significant losses, and reliance on related-party debt for operations suggests it is struggling to gain traction or compete effectively against larger, better-resourced players in the market. The pausing of its Esportsreporter operations highlights the challenges smaller entities face in sustaining multiple ventures without substantial funding, contrasting with the rapid growth and investment seen in successful segments of the e-gaming and mobile app sectors.

Comparison to Industry Standards

• The company's complete lack of revenue for the reported periods is significantly below industry standards for active technology or gaming companies, which typically generate sales from app downloads, in-app purchases, advertising, or subscriptions.
• The substantial accumulated deficit of over $1 million and critically low cash balance of $8 are indicative of a pre-revenue or early-stage startup that has failed to secure sufficient funding or achieve product-market fit, rather than a publicly traded company with established operations.
• The reliance on related-party debt for operational funding, specifically from Bryan Glass Securities, Inc., is not a sustainable long-term financing model compared to typical venture capital, public market, or institutional debt financing seen in successful industry peers.
• The ineffectiveness of disclosure controls and procedures, as reported by management, falls short of the robust internal control environments expected of publicly traded companies, regardless of size, and is a red flag for corporate governance compared to industry best practices.

Corporate Governance

Related Party Transactions

• Accrued Interest Related Party: $43,120 as of September 30, 2025.
• Note Payable Related Party: $510,343 as of September 30, 2025.
• The company has been borrowing cash from Bryan Glass Securities, Inc. (BGS) and its affiliates, with $307,923 borrowed under a drawdown note as of September 30, 2025.
• BGS agreed to extend the maturity date of the Drawdown note to December 31, 2027.
• Other outstanding debt of $202,420 (comprising $160,314 principal and $42,096 interest) also bears interest at 2% per year.
• Brian Kupchik, President and CEO, made no capital contributions during the periods ended September 30, 2025 and 2024.

Stakeholder Impact

• Shareholders: Face significant dilution risk from potential future equity raises, and the value of existing shares is severely impacted by ongoing losses, minimal cash, and going concern doubts. The stock is effectively worthless given the negative equity.
• Creditors (Related Party): Bryan Glass Securities, Inc. and its affiliates are the primary creditors, holding substantial related-party notes payable. Their ability to recover funds is highly dependent on the company's ability to secure new financing or achieve profitability.
• Employees: Only one full-time employee, with compensation determined by the Board, indicating high job insecurity and reliance on independent contractors.
• Customers/Users: The pausing of Esportsreporter operations and the company's overall financial distress suggest limited ability to develop or support new apps, potentially impacting user experience or future product availability.

Next Steps

• Management will enter into discussions to secure additional equity funding from current or new shareholders.
• Management will continue to monitor the company's ongoing working capital requirements and minimum expenditure commitments.
• Management will continue to focus on maintaining an appropriate level of corporate overhead.
• Management intends to develop procedures to address the ineffectiveness of disclosure controls and procedures.
• The company will evaluate the impact of new accounting standards ASU 2023-09 and ASU 2024-03 on its financial statements.

Key Dates

Recommendation

The company exhibits severe financial distress, reporting zero revenue, escalating net losses, and a critically low cash balance of $8. The accumulated deficit exceeds $1 million, and management explicitly states substantial doubt about its ability to continue as a going concern. Disclosure controls are deemed ineffective, indicating significant governance issues. While a related-party loan maturity was extended, the company's reliance on such financing and its stated need for substantial external capital with no assurance of success, coupled with the potential cessation of operations, makes it an extremely high-risk investment with virtually no upside potential in its current state. Existing shareholders face near-total loss of capital.

Keywords

AppSoft Technologies, ASFT, 10-Q, Quarterly Report, Mobile Apps, Esports, E-gaming, Gamerfy, Financial Results, Net Loss, Going Concern, SEC Filing, Liquidity, Capital Raise, Related Party Debt, Disclosure Controls, Gaming Industry