10-Q: Cyber Enviro-Tech Faces Going Concern Amid Zero Revenue

Cyber Enviro-Tech reported no gross sales from continuing operations and a widened net loss, raising substantial doubt about its ability to continue as a going concern.

Summary

• Cyber Enviro-Tech, Inc. (CETI) reported no gross sales from continuing operations for the nine months ended September 30, 2025, compared to $10,666 in the prior year.
• The net loss increased to $2,929,490 for the nine months ended September 30, 2025, up from $2,702,410 in the same period of 2024.
• Total liabilities significantly increased to $5,446,204 as of September 30, 2025, from $4,067,950 at December 31, 2024.
• The company's accumulated deficit grew to $16,026,930 by September 30, 2025, from $13,129,093 at December 31, 2024.
• Cash and cash equivalents increased to $137,997 as of September 30, 2025, from $59,411 at December 31, 2024, primarily due to financing activities.
• Net cash used in operating activities increased to $2,604,367 for the nine months ended September 30, 2025, compared to $1,840,122 in the prior year.
• CETI completed the spin-off of its Alvey Oil Field operation to Texas Coastal Energy, Corp. (TCE) effective October 14, 2025, to focus on core remediation projects.
• The company formed wholly-owned subsidiaries in Turkey (Cyber International Ltd) and UAE (CETI International Environmental Solutions Inc) in February and June 2025, respectively, to manage international contacts.
• Intangible assets, primarily exclusive licenses from KAM Biotechnology Ltd, were fully written off as of December 31, 2024, due to KAM's insolvency, resulting in no amortization expense in 2025.

Sentiment

Score: 3

Explanation: The company faces severe financial challenges, including zero revenue from continuing operations, increasing net losses, a growing accumulated deficit, and a 'going concern' warning. While strategic moves are underway, their impact on financial performance is not yet evident, and the company relies heavily on future capital raises amidst existing debt defaults and internal control weaknesses.

Positives

• Cash and cash equivalents increased to $137,997 as of September 30, 2025, from $59,411 at December 31, 2024.
• The strategic spin-off of the Alvey Oil Field allows CETI to fully dedicate resources to advancing its growing portfolio of domestic and international remediation projects.
• Formation of wholly-owned subsidiaries in Turkey and UAE positions the company for future international expansion and contact management.
• General and administrative expenses decreased by $135,000, or 17.1%, for the nine months ended September 30, 2025, compared to the prior year.

Negatives

• The company reported no gross sales from continuing operations for the nine months ended September 30, 2025.
• Net loss increased to $2,929,490 for the nine months ended September 30, 2025, an 8.4% increase from $2,702,410 in the prior year.
• Total liabilities increased significantly to $5,446,204 as of September 30, 2025, from $4,067,950 at December 31, 2024.
• The accumulated deficit widened to $16,026,930 as of September 30, 2025.
• Net cash used in operating activities increased to $2,604,367 for the nine months ended September 30, 2025, indicating higher cash burn.
• Professional fees increased by $203,000, or 221.3%, primarily due to legal fees related to an S-1 registration statement and a lawsuit.
• Interest expense increased by 90.8% to $1,121,390 for the nine months ended September 30, 2025, due to more convertible notes outstanding and conversions.
• The Alvey Oil Field, now discontinued operations, incurred a net loss of $268,857 for the nine months ended September 30, 2025, an increase of $228,471 from the prior year, due to greater field repairs and maintenance.
• Intangible assets were fully written off as of December 31, 2024, due to the insolvency of KAM Biotechnology Ltd, the licensor.

Risks

• Substantial doubt exists about the company's ability to continue as a going concern due to insufficient revenue to cover operating expenses and other obligations.
• The company is dependent on generating profitable operations and/or obtaining necessary financing (private placement loans, institutional investors, stock sales via S-1) with no assurances of securing such funding.
• A lawsuit was filed in April 2025 regarding a potential purchase of a salt water disposal facility, with an undetermined outcome.
• Contingent liabilities exist from stock guarantee agreements with investors, where the company may owe cash and shares based on share price differences.
• Several notes payable and convertible notes payable, including a $22,000 related party loan and $150,000 in convertible debentures, are in default.
• Internal control weaknesses include inadequate segregation of duties, ineffective risk assessment, and insufficient written policies and procedures for documenting vendor transactions.
• Risks are associated with technological changes, the acceptance of products in the marketplace, and disruption of operations due to litigation or catastrophic events.
• General economic conditions, government mandates, and changes in oil industry marketing practices could negatively impact operations.
• The continued employment of key personnel is crucial for the company's operations and strategic goals.

Future Outlook

Management intends to finance operating costs over the next twelve months through increased revenue, private placement loans, or institutional investors. The company is in the process of filing an S-1 Registration statement to enable fundraising through common stock sales. CETI anticipates raising funds from existing consulting agreements for Middle East projects and other financing prior to the end of the current fiscal year, though no assurance can be given. The company plans to continue developing and testing its water filtration machine in Texas, and aims to place oil and soil remediation systems in the Middle East and water remediation systems in the meat packing industry and with municipalities. The focus for the current fiscal year is on executing water remediation contracts in the US and Middle East, expanding operations in these regions, and completing additional tests with at least one meat packing client. The spin-off of the Alvey Oil Field is expected to allow CETI to fully dedicate resources to its core remediation projects.

Management Comments

• Management intends to finance operating costs over the next twelve months with increased revenue and private placement loans or institutional investors.
• While the Company believes that it will be successful in obtaining the necessary financing and generating revenue to fund the Company's operations, meet regulatory requirements and achieve commercial goals, there are no assurances that such additional funding will be achieved and that the Company will succeed in its future operations.
• Historically the Company has always repaid the debt instead of allowing a conversion (referring to convertible notes with derivative components).
• The Company believes it will prevail in the lawsuit regarding the salt water disposal facility and therefore no accrual for lawsuit liability has been recorded.
• Our management is currently evaluating remediation plans for the internal control deficiencies and plans to take significant steps to enhance and improve the design of our internal control over financial reporting in the next year.

Industry Context

Cyber Enviro-Tech operates in the water science technology sector, specializing in industrial wastewater remediation, with an initial focus on the oil & gas industry. The spin-off of the Alvey Oil Field signifies a strategic pivot to concentrate on broader remediation applications, including contaminated oil, sludge, soil, and wastewater, and to diversify into new markets such as the Middle East and the meat packing industry. As an emerging growth company with limited revenues, CETI's current financial state reflects the challenges of scaling innovative technology in capital-intensive environmental solutions, relying heavily on external financing to fund its development and expansion efforts.

Comparison to Industry Standards

• The company's 'going concern' warning and reliance on capital raises are indicative of an early-stage technology company, contrasting with the financial stability of established industry leaders in environmental services.
• The lack of gross sales from continuing operations for the nine months ended September 30, 2025, is significantly below industry benchmarks for companies seeking to commercialize their technology.
• The full write-off of intangible assets due to a partner's insolvency highlights specific operational risks not necessarily reflective of broader industry trends but impactful for a company of CETI's size.
• No specific comparable companies, projects, or results were detailed in the filing to provide a direct benchmark against global industry standards.

Corporate Governance

Legal Proceedings

• In April 2025, the company received notice of litigation regarding its potential purchase of a salt water disposal facility in 2024 that it decided not to pursue. The outcome is undetermined, but the company believes its counterclaims will exceed the plaintiff's demands, so no accrual has been made.

Related Party Transactions

• A convertible note payable for $22,000 with a related party is outstanding, unsecured, non-interest bearing, convertible into common stock at $0.001 per share, and currently due at the noteholder's discretion.
• Accounts payable to various related parties totaled $138,337 as of September 30, 2025.
• A related party loaned $153,989 to CETI in September 2023, bearing 12.5% interest, which was due in September 2025 and is now in default.
• The company paid $324,000 to various related parties for consulting services during the nine months ended September 30, 2025.

Stakeholder Impact

• Shareholders face significant risk of dilution from potential future stock sales and convertible note conversions, as well as the uncertainty associated with the 'going concern' warning and continued losses.
• Creditors, particularly those holding defaulted notes payable, face increased risk of non-payment.
• Employees and consultants are impacted by the company's reliance on external funding and its limited operating history, with the company having no employees and relying on 9 full-time and part-time consultants.
• Customers in the water remediation, oil & gas, and meat packing industries could benefit from the company's technology if it successfully secures funding and executes its strategic plans, but current operational scale is limited.

Next Steps

• Generate profitable operations to cover operating expenses and other obligations.
• Obtain necessary financing through private placement loans, institutional investors, or stock sales via the S-1 registration statement.
• Execute contracts for water remediation operations in the US and Middle East.
• Expand water and oil remediation operations in the Middle East and Texas.
• Complete the development of additional tests with at least one meat packing client.
• Remediate identified material weaknesses in internal control over financial reporting, including inadequate segregation of duties and insufficient documentation procedures.

Key Dates

Recommendation

The company faces severe financial distress, evidenced by zero gross sales from continuing operations, increasing net losses, a growing accumulated deficit, and a 'going concern' warning from its auditor. While strategic moves like the Alvey spin-off and international expansion are noted, they have not yet translated into revenue or profitability. The heavy reliance on future capital raises, coupled with existing debt defaults and internal control weaknesses, presents a high-risk profile. Investors face significant uncertainty regarding the company's ability to fund operations and achieve commercial viability, making the stock a high-risk investment with a negative outlook.

Keywords

Water remediation, Environmental technology, Wastewater treatment, SEC filing, 10-Q, Financial results, Going concern, Convertible notes, Alvey Oil Field, Texas Coastal Energy, Capital raise, Corporate governance, Risk factors, Oil & gas