10-Q: Catalyst Crew Tech Faces Going Concern Amid Zero Revenue

Catalyst Crew Technologies Corp. reported a reduced net loss for Q3 2025 but faces substantial doubt about its ability to continue as a going concern due to zero revenue and significant accumulated deficits.

Summary

• Reported a net loss of $36,302 for the three months ended September 30, 2025, a decrease from $43,481 in the same period of 2024.
• For the nine months ended September 30, 2025, the net loss was $89,939, significantly lower than $2,343,608 for the nine months ended September 30, 2024.
• Operating expenses decreased to $27,935 for the three months ended September 30, 2025, from $33,668 in 2024, primarily due to lower professional fees.
• Operating expenses for the nine months ended September 30, 2025, were $63,756, a substantial reduction from $2,315,892 in 2024, mainly due to decreased stock-based compensation.
• The company had no revenue for both the three and nine months ended September 30, 2025, and 2024.
• Total current liabilities increased to $663,514 as of September 30, 2025, from $573,575 as of December 31, 2024.
• A working capital deficit of $663,514 was reported as of September 30, 2025.
• Accumulated deficit reached $29,483,240 as of September 30, 2025.
• Cash balance remained at $0 for both periods.

Sentiment

Score: 2

Explanation: The company has no revenue, a significant accumulated deficit, a substantial going concern doubt, and ineffective internal controls. While net losses decreased, this is primarily due to reduced stock-based compensation rather than operational improvement, and liabilities are increasing. The frequent business model changes also indicate instability.

Positives

• Significant reduction in net loss for both the three-month ($36,302 vs $43,481) and nine-month ($89,939 vs $2,343,608) periods ended September 30, 2025, compared to the prior year.
• Substantial decrease in operating expenses for the nine months ended September 30, 2025, primarily due to lower stock-based compensation.
• Net cash used in operating activities slightly improved to $47,701 for the nine months ended September 30, 2025, from $57,221 in the prior year.

Negatives

• No revenue generated for the three and nine months ended September 30, 2025, or 2024.
• Accumulated deficit of $29,483,240 as of September 30, 2025.
• Total current liabilities increased to $663,514 as of September 30, 2025, from $573,575 as of December 31, 2024.
• Working capital deficit of $663,514 as of September 30, 2025.
• Cash balance remains at $0.
• Internal controls over financial reporting were deemed not effective due to limited resources and lack of segregation of duties.

Risks

• Substantial doubt about the ability to continue as a going concern due to recurring net losses and accumulated deficit.
• Complete dependence on attracting and receiving funding from the sale of securities or outside sources like private investment or strategic partners.
• No firm agreements or arrangements for future financing, with no assurance that needed funds will be available on acceptable terms or at all.
• Inability to obtain sufficient funding will restrict growth, reduce business operations, and may require suspension of operations, leading to a loss for common stock purchasers.
• Any additional equity financing may involve substantial dilution to existing stockholders.
• Material weakness in financial reporting due to insufficient dedicated resources and experienced personnel involved in reviewing and designing internal controls.
• Lack of optimal segregation of duties relative to key financial reporting functions.
• Absence of an audit committee or an independent audit committee financial expert, which is considered an important entity-level control.
• The inherent limitations in all control systems mean no evaluation can provide absolute assurance that all control issues and instances of fraud will be detected.
• Future operating expenses are expected to increase with increased operating activity under the new business model.
• Litigation is subject to inherent uncertainties, and adverse results could materially harm business, financial condition, or operating results.

Future Outlook

Management expects operating expenses to increase in future years as a result of costs associated with increased operating activity under its new business model focusing on Facial Recognition Technology (FRT) solutions. The company is entirely dependent on its ability to attract and receive funding from either the sale of securities or outside sources such as private investment or a strategic partner to continue operations and growth.

Management Comments

• "We expect our operating expenses will increase in future years as a result of the costs associated with the increased operating activity under our business model."
• "We are entirely dependent on our ability to attract and receive funding from either the sale of securities or outside sources such as private investment or a strategic partner."
• "We currently have no firm agreements or arrangements with respect to any such financing and there can be no assurance that any needed funds will be available to us on acceptable terms or at all."
• "The inability to obtain sufficient funding of our operations in the future will restrict our ability to grow and reduce our ability to continue to conduct business operations."
• "Our failure to raise additional funds will adversely affect our business, and may require us to suspend our operations, which in turn may result in a loss to the purchasers of our common stock."
• "If we are unable to obtain necessary financing, we will likely be required to curtail our development plans."
• "Any additional equity financing may involve substantial dilution to our then existing stockholders."
• "Management believes that the financial statements and other information presented herewith are materially correct," despite internal control weaknesses.

Industry Context

Catalyst Crew Technologies Corp. has undergone multiple significant business model shifts, from jet brokerage to alcoholic beverages, then to big data analytics for gaming, and most recently to Facial Recognition Technology (FRT) solutions. This frequent pivoting suggests a company in a very early developmental stage, struggling to find a viable and sustainable business model. The FRT market is competitive, with established players and significant R&D requirements, making it challenging for a company with no revenue and limited capital to gain traction without substantial external funding. The lack of revenue and significant accumulated deficit indicate it is not yet a commercial entity in any industry.

Management Changes

Corporate Governance

Legal Proceedings

• Not party to any material legal proceedings.
• May be involved in legal proceedings or subject to claims incident to the ordinary course of business from time to time.

Related Party Transactions

• As of September 30, 2025, and December 31, 2024, the Company had notes due to the shareholder of $88,042.
• These notes carry an interest rate of 10% and are due upon demand.
• During the nine months ended September 30, 2025, and 2024, the Company recorded interest expense of $6,585 and $6,609 respectively, related to these notes.
• On June 9, 2024, the Company entered into an Asset Transfer Agreement with Mr. Nakhwa (controlling shareholder) pursuant to which Mr. Nakhwa assigned to the Company all of Mr. Nakhwa's interest in Facial Recognition Technology (FRT) solutions and intellectual property associated therewith in exchange for $1.00.

Stakeholder Impact

• Shareholders: Face substantial dilution risk from potential future equity financing. The "going concern" doubt and lack of revenue pose significant risks to investment value. Frequent business model changes and ineffective internal controls add to uncertainty.
• Creditors: Notes payable and convertible notes payable are increasing, and the company has no cash and a significant working capital deficit, increasing credit risk.
• Employees: The company's unstable financial position and "going concern" doubt suggest potential job insecurity or limited growth opportunities.
• Customers: Currently, there are no customers as the company has no revenue and is in a developmental stage for its new FRT business.

Next Steps

• Management intends to take practical, cost-effective steps to implement internal controls upon obtaining sufficient capital and operations.
• These steps include assessing/assigning duties, potentially hiring additional personnel, diversifying executive officer duties, Board review of director composition, and considering an audit committee and financial expert.
• The company will endeavor to affect the name change to Catalyst Crew Technologies Corp. in the near future or when management deems it appropriate.

Key Dates

Recommendation

Catalyst Crew Technologies Corp. presents an extremely high-risk investment profile. The company has consistently reported zero revenue, faces 'substantial doubt' about its ability to continue as a going concern, and operates with a significant accumulated deficit and increasing liabilities. Its internal controls are deemed ineffective, highlighting severe governance issues. While net losses decreased, this is primarily due to reduced non-cash expenses rather than operational improvements. The history of frequent, drastic business model changes without achieving commercial success, coupled with a complete dependence on uncertain future financing that would likely dilute existing shareholders, makes the stock highly speculative with a strong likelihood of further value erosion.

Keywords

Facial Recognition Technology, FRT, big data analytics, gaming industry, gambling industry, SEC filing, 10-Q, quarterly report, financial results, net loss, operating expenses, going concern, internal controls, corporate governance, liquidity, capital resources, promissory notes, convertible notes, related party transactions