10-Q: Authentic Holdings Q3 2025: Revenue Growth Amid Going Concern

Authentic Holdings, Inc. reports increased revenue for Q3 and nine months ended September 30, 2025, but faces significant going concern doubts due to accumulated deficits and substantial debt defaults.

Summary

• Net loss for the nine months ended September 30, 2025, increased to $(1,081,757) compared to $(512,854) for the same period in 2024.
• Revenue for the nine months ended September 30, 2025, significantly increased to $348,925 from $164,668 in the prior year.
• The company reported an accumulated deficit of $40,440,662 as of September 30, 2025, up from $39,358,905 at December 31, 2024.
• A working capital deficit of $6,284,026 was reported as of September 30, 2025, worsening from $5,324,664 at December 31, 2024.
• Cash and cash equivalents were virtually non-existent, totaling $7 as of September 30, 2025.
• Substantial debt is in default, including $1,587,148 in convertible notes, $497,150 in related party promissory notes, and $137,083 in self-liquidating promissory notes.
• The company formally acquired the Goliath Motion Picture Promotions assets for $10,790,000, paid for with Series F Preferred Stock.
• Maybacks network expanded from 26 channels to 42 channels and secured revenue-share partnerships with Whale TV and LIME X.
• An NFT platform on the Ethereum Blockchain has been completed, with plans to market music NFTs pending regulatory clarity.
• Authentic Heroes division signed a license agreement with NFL Quarterback Tommy DeVito for Fan-Wear collectibles.
• Material weaknesses in internal control over financial reporting were identified, including a lack of written documentation and inadequate communication.

Sentiment

Score: 2

Explanation: While the company shows some operational progress with revenue growth, network expansion, and new partnerships, its severe liquidity issues, substantial debt defaults, and growing accumulated deficit present an extremely high risk. The explicit going concern warning and identified material weaknesses in internal controls further compound the negative sentiment, indicating a precarious financial position.

Positives

• Revenue for the nine months ended September 30, 2025, increased by 111.9% to $348,925 from $164,668 in the prior year.
• Maybacks network expanded from 26 channels in 2024 to 42 channels in 2025.
• Secured revenue-share partnerships with Whale TV (70% revenue share for Maybacks) and LIME X (over 100 million streaming app downloads audience).
• Formal acquisition of Goliath Motion Picture Promotions assets for $10,790,000 provides a fully owned content library for distribution and monetization.
• Completed building of an NFT platform on the Ethereum Blockchain, capable of housing millions of NFTs.
• Authentic Heroes division signed a license agreement with NFL Quarterback Tommy DeVito for Fan-Wear collectibles.
• Operating expenses decreased for the three months ended September 30, 2025, to $173,954 from $222,366 in the prior year.

Negatives

• Net loss for the nine months ended September 30, 2025, increased to $(1,081,757) from $(512,854) in the prior year, indicating worsening profitability.
• Accumulated deficit grew to $40,440,662 as of September 30, 2025, highlighting significant historical losses.
• Working capital deficit worsened to $6,284,026 as of September 30, 2025, indicating severe liquidity issues.
• Cash and cash equivalents are critically low at $7 as of September 30, 2025.
• Substantial debt totaling $2,221,381 ($1,587,148 convertible notes, $497,150 related party promissory notes, $137,083 self-liquidating promissory notes) is currently in default.
• The company is unable to hire outside counsel for three pending litigation matters due to cash flow constraints.
• Identified material weaknesses in internal control over financial reporting, including a lack of written documentation and inadequate communication, which have not been remedied.
• General and administrative expenses increased significantly by $463,679 for the nine months ended September 30, 2025, primarily due to increased salary expense ($262,503) and sponsorships ($75,000).
• 146,000 vinyl albums stored in China are facing US Customs challenges and 250% tariffs, preventing their sale and distribution.

Risks

• Substantial doubt exists about the company's ability to continue as a going concern due to accumulated deficits, a significant working capital deficit, minimal cash, and substantial debt defaults.
• The company's ability to continue operations is dependent on raising capital through debt and/or equity markets, which may not be available on acceptable terms or at all.
• There is a risk that lenders will call defaulted notes, potentially leading to the company going out of business if it cannot generate sufficient revenues or secure additional financing.
• The company faces intense competition from larger, more financially resourced media companies like Sling TV (owned by DISH Network).
• Uncertainty surrounds the regulatory pathway for marketing music NFTs, which could delay or prevent the monetization of the NFT platform.
• Challenges with US Customs and high tariffs (250%) on vinyl albums from China pose a significant risk to the company's ability to sell existing inventory.
• Material weaknesses in internal control over financial reporting could lead to misstatements and impact the reliability of financial information.
• Pending litigation matters, for which the company cannot afford outside counsel, pose potential financial liabilities.
• The usage of the company's approximately $40 million in net operating loss carryforwards is subject to annual limitations following greater than 50% ownership changes under Section 382 of the U.S. Internal Revenue Code.

Future Outlook

The company plans to aggressively market its television shows and movie library on Over the Air and Streaming Platforms, aiming to create both content and distribution partnerships. It anticipates launching Vast Tag ad programs with Whale TV and LIME X in early May 2025 and is in final negotiations with HISENSE GROUP Ltd. for a similar partnership. The NFT platform is complete, and the company expects to market music NFTs in Q1 2026, pending regulatory clarity. The Authentic Heroes division is set to launch Tommy DeVito Fan-Wear during the NFL 2025 season and is pursuing licenses with other Tier 1 athletes. The company intends to establish a vinyl record business through licensing or purchasing music assets, and is working to resolve US Customs challenges and tariffs on existing vinyl inventory.

Management Comments

• "Maybacks continues to enter into agreements to expand the markets for its movie and TV programming and agreements for advertising spots. We expect to achieve increased revenues in future quarters from these efforts as well as the efforts discussed below."
• "The Goliath acquisition is expected to allow us to become both vertically and horizontally integrated and give Maybacks the ability to create several different revenue sources apart from ad revenue."
• "We further expect Video on Demand will become part of the revenue model as a result of the acquisition, as well as the ability to monetize our content library in conjunction with other distributors of content."
• "We believe that PPV is another solid revenue source for Maybacks since it owns its own proven Live Stream that is capable of streaming to extremely large audiences without the need for third party assistance or expense."
• "We have now completed the building of our NFT platform and are in the process of making certain that any of our future offerings are compliant with regulatory guidelines."
• "We are also in discussions for licenses with several other Tier 1 athletes, which we anticipate will be signed subsequent to the Tommy DeVito rollout."
• "With the tariffs of 250% being levied against merchandise imported from China we are taking a wait and see posture until the tariff matters are ameliorated or significantly reduced."
• "It is our intention to create a vinyl record business beyond any sales of the already created inventory through licensing or the purchasing of music assets."
• "We intend to fund operations through increased sales and debt and/or equity financing arrangements, which may be insufficient to fund expenditures or other cash requirements."
• "We plan to seek additional financing in a private equity offering to secure funding for operations."

Industry Context

The company operates in the dynamic media and merchandising sectors, focusing on Over the Air and streaming television (Maybacks), content acquisition and distribution (Goliath), digital assets (NFTs), and fan-wear collectibles (Authentic Heroes). It aims to capitalize on the 'cutting the cord' trend and the growing demand for streaming content. The NFT venture positions the company in the emerging digital collectibles market, though it acknowledges the need for regulatory clarity. The company faces significant competition from established players, including large corporations with greater resources in the streaming and content distribution space, such as DISH Network's Sling TV.

Comparison to Industry Standards

• Maybacks competes with larger, more financially resourced Over the Air and platform-driven television networks, such as Sling TV (owned by DISH Network), which possess greater technical, marketing, and customer base advantages.
• The partnership with Whale TV, whose operating system is in over 41 million homes across 400+ Smart TV manufacturers, provides a distribution reach comparable to significant industry players.
• The collaboration with LIME X, a global content distribution platform with over 100 million streaming app downloads, offers access to a substantial audience, aligning with industry trends of broad digital content reach.
• The patented technology for Authentic Heroes' Fan-Wear, incorporating embedded QR codes for blockchain provenance, represents an innovative approach within the sports merchandising and collectibles market, differentiating it from traditional offerings.

Management Changes

Corporate Governance

Legal Proceedings

• Randazzo LLC v. Avani Holdings LLC & Global Fashion Technologies, Inc.: Plaintiff seeking eviction and $26,595 in unpaid rent. The company denies involvement, and a judgment of eviction was entered, but the company did not appear. The company does not operate out of the premises.
• Patricia Witthuhn v. Global Fashion Technologies, Inc.: Plaintiff seeking approximately $15,000 in alleged unpaid wages. The company denies hiring the plaintiff or acquiring Avani Holdings, LLC. The company is unable to hire outside counsel due to cash flow constraints.
• William Corso v. Global Fashion Technologies, Inc.: Plaintiff seeking approximately $40,000 in alleged unpaid wages. The company denies hiring the plaintiff or acquiring Avani Holdings, LLC. The company is unable to hire outside counsel due to cash flow constraints.

Related Party Transactions

• Accumulated balances due to President Chris Giordano and CEO Paul Serbiak totaled $430,275 as of September 30, 2025, and $479,533 as of December 31, 2024.
• During the nine months ended September 30, 2025, the company repaid $69,350 to Chris Giordano and received $20,091 from him.
• A promissory note to AH Originals, Inc. (a corporation controlled by the same owner group) for a principal amount of $447,150, bearing 3% interest, is in default. The total balance, including accrued interest, is $532,435.
• A convertible note to an investor (related party) for $50,000 principal, bearing 8% interest, is in default. The total balance, including accrued interest, is $91,443.
• A loan from CEO Paul Serbiak totaling $210,534 principal, with 3.5% annual interest, has a total balance of $287,352 including accrued interest.
• On March 13, 2025, Debt Exchange Agreements were entered into with Chris Giordano and Paul Serbiak to convert an aggregate of $2,000,000 in debt into Series E Preferred Stock, common stock, and secured promissory notes. The related share conversions have not yet been executed as of September 30, 2025.
• Accrued compensation due to current and former management totaled $851,254 as of September 30, 2025, and $588,751 as of December 31, 2024.
• The company began accruing a salary expense of $350,000 per annum for President Chris Giordano starting in October 2024.

Stakeholder Impact

• Shareholders face significant risk of dilution from potential future equity raises and debt conversions, and the value of existing shares is highly uncertain due to severe going concern issues, accumulated deficits, and substantial debt defaults. Preferred shareholders have varying liquidation preferences that could impact common shareholders.
• Employees and management are impacted by accrued compensation of over $850,000, indicating delayed payments. Employment agreements for executive officers are contingent on funding, and a salary for the President is being accrued.
• Creditors face high risk due to over $2.2 million in defaulted debt. There is a risk that lenders may call notes and potentially seize assets, especially for secured notes, if negotiations for extensions or forbearance fail.
• Customers may experience potential disruptions in service or content if the company's severe financial instability leads to operational difficulties or cessation.
• Suppliers face a heightened risk of delayed or non-payment for goods and services due to the company's critical cash flow constraints.

Next Steps

• Market television shows and movie library on Over the Air and Streaming Platforms, creating content and distribution partnerships.
• Tokenize all acquired Goliath titles for future monetization.
• Launch Vast Tag ad programs with Whale TV and LIME X, expected in early May 2025.
• Finalize negotiations with HISENSE GROUP Ltd. for a Vast Tag ad partnership.
• Distribute content in conjunction with another streaming industry player for an additional Vast Tag ad partnership.
• Create Authentic Events Group, LLC for the distribution of Pay-Per-View (PPV) events.
• Consult with advisors to determine a clear regulatory pathway for music NFTs.
• Roll-out music NFTs coupled with vinyl albums once regulatory guidelines are lucidly clear, anticipated in Q1 2026.
• Make samples for Tommy DeVito Fan-Wear for approval.
• Release the Tommy DeVito commemorative collectible on the new E-Commerce site subsequent to NFL Mini Camp.
• Sign licenses with other Tier 1 athletes subsequent to the Tommy DeVito rollout.
• Rectify US Customs challenges and ameliorate or significantly reduce 250% tariffs on vinyl albums from China.
• Engage with major distributors of vinyl records and Big Box/Mass Merchandisers for a brand-new release for Holiday Season 2025 and beyond.
• Expand the exclusive license with Maestro Entertainment to include streaming and music NFTs.
• Launch the iDreamCTV app platform with LIME X, expected in May 2025.
• Negotiate extensions and/or forbearance agreements with lenders for defaulted debt.
• Implement remedial actions to address material weaknesses in internal controls during fiscal year 2025.
• Seek additional financing through a private equity offering to secure funding for operations.

Key Dates

Recommendation

The company is in severe financial distress, evidenced by virtually no cash, a substantial working capital deficit, a rapidly growing accumulated deficit, and over $2.2 million in defaulted debt. The explicit 'going concern' warning, coupled with identified material weaknesses in internal controls and an inability to fund legal defense, indicates an extremely high risk of business failure. While there are some operational positives like revenue growth and new partnerships, these are overshadowed by the fundamental financial instability. Investors face significant risk of capital loss and potential dilution from any future capital raises, making a 'strong sell' recommendation appropriate.

Keywords

Authentic Holdings, AHRO, SEC 10-Q, Quarterly Report, Media Company, Entertainment, NFT Platform, Maybacks Global Entertainment, Goliath Motion Picture Promotions, Authentic Heroes, Financial Results, Going Concern, Debt Default, Revenue Growth, Streaming Platforms, Content Distribution, Intellectual Property, Corporate Governance, Risk Factors, Financial Reporting, Digital Assets, Music NFTs, Fan-Wear, Tommy DeVito