10-K: Awaysis Capital Reports Deep Losses, Extends Debt Maturities

Awaysis Capital, a real estate and hospitality developer, reported significant net losses for fiscal year 2025, increased liabilities, and extended maturity dates on substantial related-party debt, while also planning a 1-for-20 reverse stock split.

Summary

• Awaysis Capital, Inc. (AWCA) is a real estate management and hospitality company focused on acquiring, redeveloping, selling, and managing residential vacation home communities in desirable travel destinations.
• The company reported a net loss of $2,724,941 for the fiscal year ended June 30, 2025, an improvement from the $7,056,911 net loss in fiscal year 2024.
• Total revenue increased significantly to $441,059 in FY2025 from $50,674 in FY2024, primarily due to increased booking, rental, and management fee income from completed buildings at Casamora and the acquisition of Chial Mountain Limited.
• The accumulated deficit reached $15,331,309 as of June 30, 2025, up from $12,606,368 in the prior year.
• Cash on hand was $220,909 as of June 30, 2025, a decrease from $745,991 in the previous year.
• Total current liabilities surged to $12,010,682 as of June 30, 2025, compared to $4,615,976 in FY2024, largely due to related-party loans and a line of credit.
• The company experienced negative cash flow from operating activities of $(4,808,550) in FY2025, a reversal from positive cash flow of $503,108 in FY2024.
• A 1-for-20 reverse stock split was approved in September 2024, with the effective date extended to December 31, 2025, and is expected to take effect in the fiscal quarter ending December 31, 2025.
• Several related-party promissory notes, totaling over $4.5 million, had their maturity dates extended to November 30, 2025, or upon the company's up-listing to the NYSE American.
• The Board approved commissioning a new third-party appraisal and valuation of the Chial Reserve Assets due to identified material inconsistencies and errors in prior evaluations, with a purchase price adjustment to be negotiated.
• The company is a 'controlled company' with approximately 85% of voting power held by certain executive officers and directors through Harthorne Capital, Inc., allowing reliance on exemptions from certain corporate governance requirements.
• Management identified ineffective disclosure controls and procedures, mainly relating to the failure to timely file certain reports under the Securities Act of 1933 and the Securities Exchange Act of 1934.

Sentiment

Score: 2

Explanation: The company is in a highly precarious financial state, marked by significant and recurring net losses, a substantial accumulated deficit, and negative cash flow from operations. Its heavy reliance on related-party financing, with repeated maturity extensions, underscores severe liquidity challenges. Governance concerns, including ineffective disclosure controls and a 'controlled company' structure, further amplify investment risk. While revenue growth is noted, it's from a low base and overshadowed by fundamental financial instability and operational delays.

Positives

• Revenue increased significantly to $441,059 in FY2025 from $50,674 in FY2024, driven by increased booking, rental, and management fee income.
• Net loss decreased to $2,724,941 in FY2025 from $7,056,911 in FY2024, primarily due to increased revenue and a decrease in salary expense from a large bonus accrued in FY2024.
• The company has made progress in developing its Awaysis Casamora Assets, with the amenities building and a three-story mixed-use building completed and rented, and grey works over 60% complete on condo suites.
• The acquisition of Chial Mountain Limited added 63 acres of rainforest terrain with 35 villas, including 8 completed two-bedroom villas, expanding the company's portfolio and revenue opportunities.
• The company has obtained hotel licenses and full environmental clearance for its projects in Belize, and all necessary infrastructure (road network, water, power, internet) has been installed.
• The Chief Financial Officer, Dr. Andrew Trumbach, possesses a Doctorate Degree in Information Technology Management and specific cybersecurity expertise, overseeing the company's IT service provider for cybersecurity risk management.

Negatives

• The company incurred a net loss of $2,724,941 in FY2025 and has an accumulated deficit of $15,331,309 as of June 30, 2025, indicating it has not yet achieved profitability and expects to incur significant losses for the foreseeable future.
• Cash on hand decreased to $220,909 as of June 30, 2025, from $745,991 in the prior year, while total current liabilities surged to $12,010,682, raising substantial doubt about the company's ability to continue as a going concern.
• Cash flow from operating activities turned negative, with $(4,808,550) used in FY2025, compared to $503,108 provided in FY2024.
• The company is heavily dependent on related-party financing, with over $4.5 million in promissory notes to Co-CEO Michael Singh and his affiliates, and a $150,000 convertible note to Co-CEO Andrew Trumbach, all with extended maturity dates.
• The Board approved a new appraisal and valuation for the Chial Reserve Assets due to 'material inconsistencies and errors' in previous evaluations, which could lead to a purchase price adjustment.
• The company has been unable to maintain effective disclosure controls and procedures, leading to untimely filing of certain reports.
• The company is a 'controlled company' and relies on exemptions from NYSE American corporate governance requirements, including not having a majority of independent directors or independent compensation/nominating committees, which may reduce oversight of management decisions.
• The common stock is subject to penny stock rules, and there is a limited trading market, making it difficult for investors to liquidate their investment.

Risks

• The company is a development stage company with a limited operating history and has not yet achieved profitability, making it difficult to evaluate its business and investment prospects.
• There is substantial doubt about the company's ability to continue as a going concern due to sustained losses, a significant accumulated deficit, and insufficient liquidity to meet current liabilities.
• The company is highly dependent on its management team, and the failure to retain or recruit key personnel could adversely impact future performance.
• Failure to properly estimate project risks, time, and costs, or delays in completion, may lead to cost overruns and affect financial conditions and profitability.
• The company may not have sufficient liquidity to repay certain outstanding promissory notes at maturity, which could result in the loss of properties and related assets securing those notes.
• Expansion of operations entails risks, including expenditures beyond available resources and diversion of management's attention.
• Financial success is sensitive to adverse changes in general economic conditions, including recession, inflation, unemployment, and interest rates.
• Operating results are subject to significant fluctuation due to seasonality, customer purchasing patterns, competitive pricing, and debt service.
• The company may be unable to consummate property acquisitions on advantageous terms, acquired properties may not perform as expected, or integration may be inefficient.
• Macroeconomic conditions, including rising inflation, interest rates, and supply chain constraints, could increase business costs, delay projects, and impact the ability to raise capital.
• The company may be unable to sell a property if or when it decides to do so, due to uncertain market conditions or restrictions.
• There are significant risks associated with value-add and re-positioning properties, including unanticipated delays or cost increases, and no assurance of stabilization.
• Properties may be subject to uninsured liabilities or other problems, for which the company may have limited or no recourse.
• Competition for real property and for customers in the hospitality industry may increase costs and reduce returns.
• Environmental regulations and issues, such as contamination or mold, may impose liability and adversely impact the business.
• International operations subject the company to additional costs and risks, including contract enforcement, labor regulations, exchange rate fluctuations, trade restrictions, and political instability.
• The units offered for sale with optional rental programs may be subject to regulatory scrutiny under federal or state securities laws, potentially requiring registration or leading to fines/penalties.
• Operating as a public company listed on NYSE American will incur increased costs and require substantial management time for compliance.
• The management team has limited experience managing a public company listed on a national securities exchange.
• The company has been unable to maintain effective disclosure controls and procedures, which could adversely affect its stock price and investor confidence.
• The market price and trading volume of the common stock may be volatile, and there is a limited trading market.
• Future issuance of additional shares of Common Stock or convertible securities could dilute existing shareholders' interests.
• The company may not be able to satisfy NYSE American listing requirements or maintain its listing.
• The common stock is subject to the SEC's penny stock rules, which can make transactions cumbersome and reduce investment value.
• As a controlled company, the absence of a majority of independent directors and independent committees may adversely impact investor confidence and reduce oversight.
• Certain executive officers and directors, through their significant ownership, can substantially influence shareholder approval and corporate decisions, potentially leading to conflicts of interest.
• Anti-takeover provisions in the company's charter and bylaws, such as a classified board, may prevent or frustrate attempts by stockholders to change the board or management.
• The company does not expect to pay cash dividends in the short term, providing limited rights to common stock investors.
• Taking advantage of smaller reporting company exemptions may make securities less attractive to investors and hinder performance comparison with other public companies.

Future Outlook

The company anticipates continued significant losses for the foreseeable future as it implements its business plan and acquires, develops, and operates hospitality properties. It expects to require additional capital to meet long-term operating requirements, primarily through the sale of equity or debt securities and advances from affiliate shareholders. The Awaysis Casamora Assets are estimated to be completed in the second half of calendar year 2026, assuming availability of funds. The Spa and Wellness Center and a new on-site restaurant at Chial Reserve Assets are anticipated to open by the end of calendar year 2025. The company intends to apply to list its Common Stock on the NYSE American.

Management Comments

• "We expect to incur significant losses for the foreseeable future as we continue to implement our business plan and acquire, develop and operate a range of hospitality properties."
• "To become profitable, we must successfully implement our proposed business plan and strategies, either alone or in conjunction with possible collaborators. We may never have any significant recurring revenues or become profitable."
• "We are actively evaluating our liquidity position and to ensure we are able to meet our obligations as they come due."
• "Although we are engaging in negotiations with our lender, there can be no assurance that we will have sufficient funds available at the time of maturity, that we will be able to secure future funds on terms acceptable to us, or that if we do not have sufficient funds at maturity, we could further extend the maturity date."
• "We believe that more people are seeking comfortable and convenient places to travel, visit, and live for extended durations. We seek to capitalize on these trends by transforming resort properties in desirable locations into convenient enclaves that facilitate this type of travel or residency."
• "We believe that currently there is no inventory of unobstructed ocean view condo suites in San Pedro that have fully stratified titles."
• "We believe our strategy of selling or renting units that are already in development or developed will attract potential buyers and renters over these other alternatives."
• "We believe that, in the competitive industry in which we intend to operate, trademarks, service marks, trade names and logos are very important to the marketing and sales of products. While we have trademarked the name and logo Awaysis, which we believe is compelling, it is a new brand and there are many other trademarks, service marks, trade names and logos that have much greater brand identification."

Industry Context

Awaysis Capital operates in the highly competitive global real estate and hospitality industry, targeting a niche in residential vacation home communities and 'enclave' resorts, capitalizing on increased global trends towards remote work and extended travel. While the company aims to differentiate itself by developing and selling/renting already-in-development properties, it faces significant competition from established national and regional players, as well as alternative accommodation providers like Airbnb. The industry is sensitive to macroeconomic conditions, including inflation and interest rates, which can impact development costs and consumer demand. The company's focus on Belize positions it in an emerging market, but also exposes it to specific international operational risks and regulatory complexities.

Comparison to Industry Standards

• NA The filing does not provide specific comparable company or project data to assess results against global benchmarks in detail. The company is in a development stage, making direct comparisons challenging.

Management Changes

Corporate Governance

Legal Proceedings

• The company is not currently a party to any legal proceeding or governmental regulatory proceeding, nor is it aware of any pending or potential legal proceeding that would have a material adverse effect on the company or its business.

Related Party Transactions

• Harthorne Capital, Inc., an affiliate of Co-CEOs Michael Singh and Andrew Trumbach, and Executive Vice President Lisa Marie Iannitelli, beneficially owns approximately 26% of the company's outstanding common stock.
• Harthorne Capital, Inc. advanced and received a net of $84,871 in FY2025 and $599,537 in FY2024 for costs paid on behalf of the company, with no legal obligation for future advances.
• Tyler Trumbach, Chief Legal Counsel and director (son of Co-CEO Andrew Trumbach), received 16,667 shares of common stock for $50,000 in legal services in September 2022.
• Tyler Trumbach also received 3,529,127 shares of common stock in September 2024 for $895,512.36 in accrued and unpaid cash compensation through June 30, 2024.
• Michael Singh and Andrew Trumbach each received 14,071,153 shares of common stock in September 2024 for $3,469,664 in accrued and unpaid cash compensation through June 30, 2024.
• Harthorne Capital, Inc. provided a $1,100,000 convertible bridge loan in June 2024, bearing 12% annual interest, with the maturity date extended to November 30, 2025, or NYSE American up-listing, convertible at $6 per share.
• BOS Investment Inc., an affiliate of Co-CEO Michael Singh, provided a $3,000,000 line of credit between November 15, 2024, and December 20, 2024, bearing 3.5% annual interest, with the maturity date extended to November 30, 2025. This note is secured by substantially all assets of Awaysis Belize Limited.
• The company acquired Chial Mountain Ltd. assets from Chial Mountain Ltd., another affiliate of Michael Singh, for an adjusted estimated purchase price of approximately $4,465,415. This included a $1,500,000 secured promissory note (no interest) and a $587,278 senior convertible promissory note (3.5% interest) to Michael Singh, both with maturity dates extended to November 30, 2025, or NYSE American up-listing.
• Andrew Trumbach, Co-CEO and CFO, provided a $150,000 convertible promissory note loan on May 21, 2025, bearing 12% annual interest, convertible at $0.16 per share, with the maturity date extended to November 30, 2025.
• Samantha Singh, daughter of Michael Singh, has been contracted for marketing services through her company Lucid Marketing.

Stakeholder Impact

• Shareholders face significant dilution risk from potential future equity raises and the conversion of existing convertible notes held by related parties.
• Shareholders' ability to influence corporate decisions is limited due to the 'controlled company' status, with executive officers and directors holding approximately 85% of voting power.
• Investors in common stock face high liquidity risk due to a limited trading market and the stock being subject to penny stock rules.
• Creditors, particularly related-party lenders, have significant leverage due to the company's reliance on their financing and the security interests granted over company assets.
• Employees may face uncertainty given the company's ongoing losses and dependence on external funding, although the company aims to provide competitive compensation and benefits in the future.
• Customers and potential unit buyers may benefit from the development of new resort properties and amenities, but the company's financial instability could pose risks to project completion or service quality.

Next Steps

• Effect the 1-for-20 reverse stock split in the fiscal quarter ending December 31, 2025.
• Negotiate subsequent amendments to related-party promissory notes with Michael Singh and BOS Investment Inc. following waivers of impending maturity dates.
• Complete a new third-party appraisal and valuation of the Chial Reserve Assets and negotiate a purchase price adjustment within 30 days of completion.
• Consummate the acquisition of a 107-acre parcel adjacent to the Chial Reserve Assets on or before December 31, 2025.
• Open the Spa and Wellness Center and a new on-site restaurant at the Chial Reserve Assets by the end of calendar year 2025.
• Continue refurbishments on waterfront villas at Awaysis Casamora, with projected renovation completion by the end of calendar year 2025.
• Complete development of the Awaysis Casamora Assets, estimated for the second half of calendar year 2026, assuming availability of funds.
• Apply to list common stock on the NYSE American.
• Remedy identified ineffective disclosure controls and procedures.

Key Dates

Recommendation

Awaysis Capital is in a highly distressed financial position, characterized by persistent net losses, a rapidly increasing accumulated deficit, and a critical lack of liquidity, evidenced by minimal cash reserves against substantial and growing current liabilities. The company's survival is heavily dependent on related-party financing, which has seen repeated maturity extensions, indicating an inability to generate sufficient operational cash flow or secure independent funding. Governance issues, including ineffective disclosure controls and a 'controlled company' structure that limits independent oversight, further compound the risk. While the company has a clear business strategy and some development progress, the fundamental financial weaknesses, high operational risks, and the potential for significant dilution or loss of secured assets make this an extremely speculative and high-risk investment. A seasoned investor would recognize the severe financial distress and governance red flags, leading to a strong sell recommendation.

Keywords

Hospitality, Real Estate Development, Belize, Resort, Vacation Rentals, SEC Filing, 10-K, Reverse Stock Split, Related Party Transactions, Corporate Governance, Financial Performance, Losses, Liquidity, Capital Raise, AWCA