10-K: Collab Z Reports 2025 Net Loss Amid Strategic Shift to AI-Powered Property Management

Sentiment:

Annual Report 23 December 2025 11:26 AM

Collab Z Inc. reported a net loss of $102,195 for fiscal year 2025, a significant decline from the prior year's net income, as it pivots to its AI-enhanced community-based property management platform and phases out other real estate services.

Capital raiseRaised $800,000 through a Series B Preferred Stock private placement in FY2025.$150,000 of the Series B Preferred Stock proceeds were collected in October 2025 (subsequent event).The company is seeking to raise additional capital via an equity offering to fund continuing operations.In the event a public offering is not completed, the company expects to seek additional funding through private equity offering, debt, and/or related party financings.

Worse than expectedNet income declined significantly from $950,420 in FY2024 to a net loss of $102,195 in FY2025.Total revenue decreased by 25.6% year-over-year.Operating expenses increased by 61.2% year-over-year.The company's internal control over financial reporting was deemed ineffective.

Summary

Collab Z Inc. is transitioning its business model to focus on its pioneering Collab Platform, a community-based property management solution leveraging modern technology, including AI features under development.
The company reported a net loss of $102,195 for the fiscal year ended September 30, 2025, a substantial decrease from a net income of $950,420 in the prior year.
Total revenue decreased to $1,378,149 in 2025 from $1,853,585 in 2024, primarily due to the discontinuation of EB-5 services (which generated $690,000 in 2024) and decreases in procurement and renovation management fees.
Operating expenses significantly increased by $410,402 to $1,080,677 in 2025, driven by higher personnel costs, professional services for the contemplated IPO, and increased system maintenance and software amortization.
A majority of revenue (65% in 2025, 63% in 2024) is derived from related parties, primarily properties under common control and management.
The company has entered into five joint venture agreements in March and April 2025, holding a 40% ownership stake in each, to expand its property management footprint.
Collab Z raised $800,000 through a Series B Preferred Stock private placement in 2025, with $150,000 collected in October 2025.
Management believes substantial doubt about its ability to continue as a going concern has been alleviated for at least 12 months due to expected collection of related party receivables and a planned equity offering.
The company's internal control over financial reporting was deemed ineffective as of September 30, 2025.

Sentiment

Score: 3

Explanation: The company reported a significant net loss and revenue decline in FY2025, coupled with a substantial increase in operating expenses. While there's a strategic pivot towards a promising AI-driven property management platform and successful capital raise, the current financial performance is negative, and the company faces going concern risks and ineffective internal controls. The future outlook is dependent on successful execution of the new strategy and further capital raises.

Positives

Development of the "Collab Platform," a first-of-its-kind Community-Based Property Management model with AI features under development, offering a four-year lead over new market entrants.
Ability to scale instantly without local staffing, positioning it against traditional property management firms and SaaS-based PropTech competitors.
Strategic pivot to focus on scalable community-based property management, phasing out less aligned services like EB-5.
Entry into five joint venture agreements in Nevada, expanding property management footprint through local partnerships.
Successful Series B Private Placement raising $800,000.
Management believes substantial doubt about going concern has been alleviated for at least 12 months due to expected cash inflows from receivables and planned equity offering.

Negatives

Net loss of $102,195 for the fiscal year ended September 30, 2025, compared to a net income of $950,420 in the prior year.
Total revenue decreased by $475,436 (25.6%) from $1,853,585 in 2024 to $1,378,149 in 2025.
Significant reliance on related party revenue (65% in 2025), which creates concentration risk and potential conflicts of interest.
Operating expenses increased substantially by $410,402 (61.2%) to $1,080,677 in 2025, primarily due to higher personnel costs and professional services for the contemplated IPO.
The company's consolidated financial statements have been prepared on a going concern basis, indicating a need for additional capital to fund operations.
Management concluded that internal control over financial reporting was ineffective as of September 30, 2025.
Lack of D&O insurance may make it difficult to retain and attract talented directors and officers.
The company has a limited operating history, making it difficult to evaluate its prospects.
Exposure to potential financial liabilities from minimum rental guarantees (maximum potential of $102,000 per month).

Risks

Limited operating history, resulting in increased risks, uncertainties, expenses, and difficulties in evaluating prospects.
Majority of revenue derived from property management fees, subject to external economic and political conditions such as recessions, interest rates, and foreign currency fluctuations.
Concentration risk due to heavy reliance on related parties for revenue and cash flow.
Dependence on executive team and other employees; loss or inability to attract/retain skilled employees could harm the business.
Management team has limited experience managing a public company.
Lack of key man life insurance policies on key personnel.
Consolidated financial statements prepared on a going concern basis; must raise additional capital to fund operations.
Related party transactions may result in conflicts of interest and may not be on arms-length terms.
Various risks related to artificial intelligence (AI) and technology as it expands into the PropTech industry, including market infancy, need to adapt to technological advances, competition, data quality/bias, privacy, scalability, costs, and ethical dilemmas.
Reliance on external AI technologies could lead to service disruptions or changes in licensing terms.
Use of open-source software could negatively affect its ability to provide AI-based PropTech services and subject it to litigation (e.g., copyleft obligations, security flaws, license term changes).
Potential financial liabilities from minimum rental guarantees for certain managed properties.
Revenue from management agreements depends on timely payments, performance-based bonuses, and project decisions beyond its control.
Shift toward a property management-focused business model may result in revenue volatility and operational challenges.
Joint ventures expose the company to increased operating risks.
Reliance on one main type of service (property management) and some products still in prototype phase.
Inability to maintain product quality, expand offerings, or continue technological innovation.
Substantial investments in new product offerings and technologies are inherently risky.
Highly competitive development and commercialization of products.
Must correctly predict, identify, and interpret changes in consumer preferences and demand.
General economic conditions and commercial real estate market conditions may negatively impact the business.
Seasonal fluctuations and other market data in the investment real estate industry could adversely affect the business.
Restrictions in the availability of debt or equity capital.
Reliance on third-party service providers to support its platform and IT systems.
Inability to obtain licenses to third-party software and intellectual property on reasonable terms.
Claims by others that it infringed their proprietary technology or intellectual property rights.
Trademarks, copyrights, and other intellectual property could be unenforceable or ineffective.
Failure to obtain proper business licenses or comply with local laws regarding property management.
Changes in the regulation of the internet, mobile carriers, and their partners.
Collection, storage, use, and processing of personal information subjects it to governmental regulation and legal obligations related to data privacy and security.
Business may be subject to a variety of U.S. financial regulations, many of which are overlapping, ambiguous, and still developing.
Litigation, regulatory actions, and compliance issues could subject it to significant fines, penalties, judgments, and remediation costs.
Significant estimates and judgments in calculating income tax provision and other tax liabilities.
Changes in tax laws could have a material adverse effect.
Decisions based on user best interests to build long-term trust may forgo short-term gains.
Less experience operating in some newer market verticals.
Inability to expand into new markets.
Damage to reputation could negatively impact the business.
The Russian-Ukrainian Conflict may adversely affect the business.
Requirements of being a public company may strain resources and divert management's attention.
Failure to develop and maintain proper and effective internal control over financial reporting.
Reduced disclosure requirements as an emerging growth company may make common stock less attractive.
No current market for common stock; no assurance any market will ever develop.
Issuance of additional debt and equity securities, senior to common stock, could adversely affect market price.
No intention to pay dividends for the foreseeable future.
Potential for securities to be considered a penny stock, discouraging broker-dealers.
Market price and trading volume could decline if analysts do not publish research or publish inaccurate/unfavorable research.

Future Outlook

Collab Z Inc. plans to transition towards a more focused and scalable operational model, emphasizing community-based property management as its core business, while significantly scaling down development, renovation management, and EB-5 services over the next two years. The company anticipates integrating AI-enhanced features into its Collab Platform with phased launches over an 18-month period that began in early 2025. Management expects to incur significant costs to expand operations and market its products, aiming for increased revenue and profitability, and is seeking to raise additional capital via an equity offering.

Management Comments

Our mission is to democratize property management and to foster a more engaged community of tenants, property owners, and professional service providers to maximize asset value and to create a sustainable, decentralized organization that benefit all stakeholders involved.
Our vision is to revolutionize the real estate sector by maximizing community engagement in their living and working spaces for an autonomous and collaborative living experience.
We are committed to innovation, focusing on delivering substantial long-term value to our shareholders and improving the quality of life for our property owners, tenants, Community Pros, or CPs, and professional service providers.
We believe substantial doubt has been alleviated for a period of at least 12 months from the date the financial statements are issued based on the expected collection of receivables and planned equity offering.

Industry Context

Collab Z is positioning itself as a disruptor in the property management industry, which reached $128.3 billion in revenue by the end of 2024, growing at a CAGR of 2.0%. By leveraging a community-based model and integrating AI, the company aims to address long-standing inefficiencies, low tenant satisfaction, and scalability challenges prevalent in traditional property management. Its strategy to instantly scale without local staffing differentiates it from both legacy firms and emerging SaaS-based PropTech competitors, aiming to capture a share of the over 300,000 property management companies and 20 million rental properties in the U.S.

Comparison to Industry Standards

Collab Z's community-based property management model is described as "first-of-its-kind" and having a "four-year lead over new market entrants," suggesting a unique competitive advantage.
The company positions itself against "traditional property management firms and SaaS-based ProTech competitors" by enabling instant scalability without local staffing, which is a key differentiator in an industry often reliant on local human oversight.
The property management industry reached $128.3 billion in revenue by the end of 2024, growing at a CAGR of 2.0%, indicating a large but moderately growing market that Collab Z aims to revolutionize.
The company's focus on AI-enhanced features, with phased launches planned over an 18-month period starting early 2025, aligns with broader PropTech trends of technology adoption, but its community-driven approach is presented as distinct.

Management Changes

Role	Previous Person	New Person	Effective Date	Reason
Chairman of the Board	Qian Wang (former Chairman)	William J. Caragol	May 2025	Appointment of new Chairman.
Chief Executive Officer	NA	Qiaojun Lai	August 2024	Appointment of new CEO.
Chief Financial Officer	NA	Jin Kuang	August 2024	Appointment of new CFO.
Director Nominee	NA	Matthew Gordon	Upon pricing of contemplated IPO	New director nominee.
Independent Director Nominee	NA	David Kivitz	Upon pricing of contemplated IPO	New independent director nominee.
Independent Director Nominee	NA	Zhe Zhang	Upon pricing of contemplated IPO	New independent director nominee.

Corporate Governance

Change Type	Description	Effective Date	Impact Assessment
Committee Establishment	Intends to establish an audit committee, compensation committee, and a nominating and corporate governance committee prior to the contemplated Nasdaq listing.	Upon contemplated Nasdaq listing	Enhances corporate oversight and aligns with public company standards, potentially improving investor confidence.
Policy Adoption	Will adopt a code of ethics that applies to all directors, officers, and employees.	Upon contemplated Nasdaq listing	Establishes ethical guidelines and compliance framework, crucial for public company operations.
Policy Adoption	Intends to adopt an insider trading policy requiring insiders to refrain from trading during blackout periods and clear all trades with a compliance officer.	Upon contemplated Nasdaq listing	Mitigates insider trading risks and promotes fair market practices, enhancing regulatory compliance.
Director Independence	Board determined William J. Caragol, David Kivitz, and Zhe Zhang are independent directors/nominees as defined by SEC and Nasdaq rules.	As of date of annual report (for current directors), upon IPO pricing (for nominees)	Ensures independent oversight, particularly for key committees, which is a standard requirement for listed companies.
Controlled Company Status	Expects to be a controlled company within Nasdaq rules, potentially exempting it from certain corporate governance requirements (e.g., majority independent board, independent committees).	Following completion of initial public offering	While not currently intending to use the exemption, this status could reduce shareholder protections compared to fully independent boards, impacting investor perception.

Legal Proceedings

The company may become a party to various legal proceedings and other claims in the ordinary course of business.
Management believes the ultimate resolution of any current proceeding will not have a material adverse effect on its financial position, results of operations, or cash flows.
As of the date of the Annual Report, the company is not the subject of any legal proceedings expected to have a material adverse impact.

Related Party Transactions

A majority of revenue (65% in FY2025, 63% in FY2024) was earned from related parties, primarily properties under common control and/or management.
Two related party properties accounted for an aggregate of 32% of total revenues in FY2025.
Accounts receivable from related parties were $266,580 (75% of total) in FY2025 and $349,576 (69% of total) in FY2024.
Due from related parties was $383,577 in FY2025 and $2,557,033 in FY2024.
Due to related parties was $16,605 in FY2025 and $1,304,916 in FY2024.
YRQ Irrevocable Trust (controlled by family of former Chairman) was a significant related party, receiving advances and becoming a major shareholder through the Reorganization.
The company has minimum rental guarantees for certain related party managed properties, with a maximum potential of $102,000 per month, though no shortfall payments have been incurred to date.
Transactions with related parties are conducted under terms revisited periodically to align with market practices, but may not have been on an arms-length basis.
The company's related person transaction policy requires review and approval of transactions exceeding $120,000 or 1% of average total assets.

Stakeholder Impact

Shareholders: Potential for dilution from future equity offerings; no dividends expected; market price volatility due to limited operating history and reliance on related parties; risk of loss if company cannot continue as a going concern.
Tenants/Community Pros (CPs): Increased engagement and financial incentives through the Collab Platform; improved tenant satisfaction and responsive services.
Property Owners: Enhanced asset value through streamlined operations and tenant engagement; potential for profit-sharing models.
Employees: Increased headcount and personnel costs due to expansion; risk of losing key personnel; stock options under the 2025 Equity Incentive Plan.
Creditors: Repayment of line of credit; reliance on collection of related party receivables for liquidity.
Joint Venture Partners: Contribution of technology platform, branding rights, and management expertise in exchange for capital, local support, and regional property opportunities.

Next Steps

Phase out EB-5 Immigration Investor Services beginning in the next year.
Significantly scale down development, renovation, and procurement services over the next two years.
Continue phased launches of AI-enhanced features for the Collab Platform over an 18-month period (started early 2025).
Seek to raise additional capital via an equity offering.
Establish an audit committee, compensation committee, and nominating and corporate governance committee prior to contemplated Nasdaq listing.
Adopt a code of ethics and an insider trading policy in connection with the Nasdaq listing.
Work towards a Qualified Public Offering (IPO) for Series B Preferred Stock conversion and to avoid dividend accrual by December 31, 2025.
Continue to develop and improve the internally developed application (not yet placed in service as of Sep 30, 2025).

Key Dates

Date	Description
2019-11-25	Collab CA LLC formed.
2022-01-01	Collab Z engaged in construction management of 1773 Oxford Street, Berkeley, California.
2022-10-01	Construction commenced for 1773 Oxford Street project.
2023-04-25	Company entered into a SAFE agreement for $25,000 with an investor.
2023-05-15	Collab Living LLC formed.
2024-03-14	Company entered into a revolving line of credit agreement with East West Bank for $2,000,000.
2024-08-01	Collab platform became operational and ready for use; amortization of capitalized software costs began.
2024-08-21	YRQ Trust became the sole member of Collab CA.
2024-09-30	Fiscal year ended.
2024-10-01	Company issued 5,000 shares of Series X preferred stock to Collab CA's sole member.
2024-10-01	Company loaned $170,000 to a third party.
2024-12-01	Collab CA became a direct, wholly owned subsidiary of Collab Z Inc. as a result of the Reorganization Agreement.
2024-12-19	5,151,391 shares of common stock issued and outstanding.
2024-12-24	Interest at 6.5% per annum commenced on $170,000 loan to third party.
2024-12-30	Date of Reorganization Agreement and Plan of Share Exchange.
2025-01-01	Collab Z began providing consulting services for 2425 Durant Avenue project.
2025-01-01	SDZ-US-1 2020 Trust sold 85% membership interest in YSMC LLC and 1921 Buttonwood to an unrelated third party.
2025-01-04	Interest at 8% per annum commenced on $1,300,000 loan to third party.
2025-01-01	Loan agreement for $1,300,000 amended to be payable on demand with 6.5% interest.
2025-02-04	Company paid off and closed the revolving line of credit with East West Bank.
2025-03-01	Company entered into joint venture agreements with five unaffiliated entities.
2025-04-01	Company entered into joint venture agreements with five unaffiliated entities.
2025-05-01	Construction of 1773 Oxford Street project completed.
2025-05-27	Securities purchase agreement for 75,000 shares of Series B Preferred Stock for $300,000.
2025-06-05	Certificate of Designation filed for Series B Preferred Stock, authorizing up to 1,250,000 shares.
2025-06-24	Securities purchase agreement for 25,000 shares of Series B Preferred Stock for $100,000.
2025-07-07	Securities purchase agreements for 25,000 and 37,500 shares of Series B Preferred Stock for $100,000 and $150,000 respectively.
2025-07-09	Securities purchase agreement for 37,500 shares of Series B Preferred Stock for $150,000.
2025-07-14	Insider Trading Policy dated.
2025-07-22	Director Agreements entered into with David Kivitz, Matthew Gordon, and Zhe Zhang.
2025-09-30	Fiscal year ended.
2025-10-01	Company received $150,000 from subscription receivable (subsequent event).
2025-12-19	5,151,391 shares of common stock issued and outstanding.
2025-12-22	Date of Annual Report filing.
2025-12-31	Deadline for Qualified Public Offering for Series B Preferred Stock dividends to not accrue.
2026-03-14	Original maturity date of revolving line of credit (paid off early).
2026-12-31	Collab IPO Deadline for joint venture partner option to surrender securities.
2030-08-01	Anticipated completion date for 2425 Durant Avenue project.

Recommendation

hold

Collab Z Inc. is undergoing a significant strategic pivot towards an innovative AI-driven property management platform, which presents substantial long-term growth potential in a large market. However, the company reported a net loss in the most recent fiscal year, a sharp decline from prior profitability, and faces significant operational and financial risks, including a going concern uncertainty, heavy reliance on related party revenues, and ineffective internal controls. While the recent capital raise and joint ventures are positive steps, the company's limited operating history and the inherent risks of a rapidly evolving PropTech market warrant a cautious 'hold' stance. Investors should monitor the successful execution of its strategic transition, the effectiveness of its AI platform, and its ability to achieve sustainable profitability and strengthen internal controls before considering a stronger position.

Keywords

PropTech, Property Management, Artificial Intelligence, Community-Based Property Management, SEC Filing, Annual Report, Real Estate Technology, Startup, Going Concern, Related Party Transactions, Series B Preferred Stock, Joint Ventures, Corporate Governance, Risk Factors, Financial Performance

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