10-K: DSwiss Reports 2025 Net Loss, Faces Going Concern Doubt

DSwiss, Inc. reported a net loss of $76,860 for fiscal year 2025, a significant decline from the previous year's profit, raising substantial doubt about its ability to continue as a going concern.

Summary

• DSwiss, Inc. reported a net loss of $76,860 for the year ended December 31, 2025, a reversal from a net profit of $22,223 in 2024.
• Revenue decreased by 6.16% to $2,920,986 in 2025 from $3,112,887 in 2024.
• Gross profit fell to $564,562 in 2025 from $623,271 in 2024, with gross margin decreasing from 20.02% to 19.33%.
• The company experienced negative cash flow from operating activities of $94,303 in 2025, compared to generating $182,556 in 2024.
• A working capital deficit of $133,691 was reported as of December 31, 2025, a deterioration from a surplus of $13,645 in 2024.
• Accumulated deficit increased to $1,464,790 in 2025 from $1,387,930 in 2024.
• Management identified material weaknesses in internal control over financial reporting, including a lack of written policies and procedures and inadequate segregation of duties.
• The company operates as a biotech nutraceutical firm and OEM/ODM provider of health and beauty products, with operations primarily in Malaysia and Hong Kong, and a presence across the Asia-Pacific region.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this filing with a negative sentiment due to the significant financial deterioration, including a net loss, negative operating cash flow, and a working capital deficit, coupled with a 'going concern' warning and identified material weaknesses in internal controls. While growth plans are outlined, the immediate financial health is concerning.

Positives

• Other income increased significantly to $40,175 in 2025 from $13,300 in 2024, primarily from gain on disposal of plant and equipment, interest income, and exchange gain.
• The company is actively advancing strategic initiatives in talent and product development, focusing on new formulations and market analysis.
• DSwiss successfully expanded its OEM/ODM client base in 2024 and strengthened brand recognition within the sector.
• Plans are in place to enhance key departments by welcoming top industry professionals, including nutritionists, scientists, and operations specialists.

Negatives

• The company incurred a net loss of $76,860 in 2025, a significant decline from a net profit of $22,223 in 2024.
• Revenue decreased by 6.16% year-over-year, from $3,112,887 in 2024 to $2,920,986 in 2025.
• Gross profit decreased by $58,709, and gross margin declined by 0.69% to 19.33% in 2025.
• Net cash used in operating activities was $94,303 in 2025, a reversal from net cash generated of $182,556 in 2024.
• A working capital deficit of $133,691 was reported as of December 31, 2025, indicating liquidity challenges.
• The accumulated deficit increased to $1,464,790, highlighting ongoing losses.
• Finance costs increased substantially to $14,348 in 2025 from $1,547 in 2024.
• Management concluded that internal controls over financial reporting were not effective as of December 31, 2025, due to material weaknesses.

Risks

• Substantial doubt exists about the company's ability to continue as a going concern due to net loss, negative operating cash flow, working capital deficit, and accumulated deficit.
• The company's revenues from current business operations alone are insufficient to fund operations or planned growth, necessitating additional funding.
• Inability to raise additional funds when required may negatively impact operations, business development, and financial results.
• The beauty and healthcare industries are dynamic and rapidly evolving, posing competitive challenges.
• The company's common stock, if a trading market develops, may fall under penny stock regulations, restricting broker-dealers and affecting liquidity.
• Fluctuations in exchange rates (MYR and HK$ against US$) can impact reported profits and financial results.
• Material weaknesses in internal control over financial reporting, including lack of written policies and procedures and inadequate segregation of duties, increase the likelihood of fraud or undetected errors.

Future Outlook

The company plans to expand its market presence locally and internationally through targeted social media campaigns, e-commerce platforms, and participation in international trade shows. It aims for a 100% increase in social media engagement by the end of 2026 and plans to participate in at least one major international trade show by the same year. DSwiss is also committed to strengthening its workforce by expanding its talent pool by 50% and hiring specialists in R&D biotechnology and digital marketing by the end of 2026. Strategic mergers and acquisitions are being pursued across various sectors, including healthcare, biotechnology, and wellness, to drive growth and address supply chain and R&D challenges. The company intends to expand into functional medicine and homeopathic supplements.

Management Comments

• "Our Company continuously strives to improve the already high standard of our goods and services through ongoing research and market development."
• "We foresee to spend a substantial amount in marketing and advertising in the coming year."
• "At DSwiss we are determined to bring new products to markets that we have not yet explored."
• "The global presence social media has helped provide to us has been an invaluable resource, and as we continue to expand our business operations and spread our brand awareness, we intend to primarily utilize social media to reach our customers."
• "We believe that by forging strategic relationships and partnerships we can expand our operations across the globe at a greater pace and with greater certainty than we would if we tried to expand on our own."
• "Management believes the existing major shareholders or external financing will provide the additional cash to meet the Company’s obligations as they become due."

Industry Context

StockSavvy.ai notes that DSwiss's focus on biotech nutraceuticals, private label OEM/ODM services, and expansion into pet wellness and functional foods aligns with broader industry trends towards personalized health, natural ingredients, and holistic well-being. The emphasis on digital marketing and global expansion, particularly in Asia-Pacific, reflects common strategies for growth in the competitive health and beauty sector. However, the company's financial struggles and internal control weaknesses could hinder its ability to capitalize on these trends effectively, especially when compared to larger, more established players with robust R&D budgets and operational efficiencies.

Comparison to Industry Standards

• The filing does not provide specific comparable companies, projects, or results to assess DSwiss's performance against global benchmarks. Therefore, a direct comparison to industry standards is not possible based solely on the provided information.

Management Changes

Corporate Governance

Legal Proceedings

• There are currently no pending legal proceedings or claims that are believed to have a material adverse effect on the business, financial condition, or operating results.
• None of the directors, officers, or affiliates are involved in a proceeding adverse to the business or have a material interest adverse to the business.

Related Party Transactions

• Professional fees of $10,293 were paid to Related Party A (a wholly-owned subsidiary of a 7.33% shareholder) in 2025, down from $12,600 in 2024.
• Sales of $13,366 were made to Related Party B (whose director is the company's founder) in 2025, up from $7,725 in 2024.
• No purchases were made from Related Party B in 2025, compared to $8,236 in 2024.
• The company has not adopted formal policies for reviewing, approving, or ratifying related party transactions due to its small size and limited financial resources, but directors will continue to approve such transactions.

Stakeholder Impact

• **Shareholders**: Face significant risk due to the net loss, negative operating cash flow, working capital deficit, and the 'going concern' warning. The lack of dividends and potential for penny stock regulations also impact investment attractiveness.
• **Employees**: The company plans to expand its workforce by 50% and invest in talent development, which could be positive for current and future employees, but the overall financial instability could pose job security concerns.
• **Customers**: The commitment to quality, innovation, and expanding product lines (e.g., functional medicine, homeopathic supplements) aims to benefit customers by offering diverse, high-quality health and beauty solutions.
• **Suppliers/Creditors**: The working capital deficit and negative operating cash flow could indicate increased risk for suppliers and creditors regarding timely payments, although the filing mentions outstanding balances have been substantially collected after year-end.

Next Steps

• Expand market presence through targeted social media campaigns and e-commerce platforms.
• Collaborate with leading biotech and life sciences partners.
• Partner with innovative retail technology providers to drive sales.
• Aim for a 100% increase in social media engagement by the end of 2026.
• Participate in at least one major international trade show (e.g., Vitafoods Asia, Thailand trade shows) by the end of 2026.
• Expand workforce by 50% by the end of 2026.
• Hire specialists in R&D biotechnology and digital marketing.
• Establish internship partnerships with at least three top universities in Malaysia by 2026.
• Actively pursue strategic mergers and acquisitions in healthcare, biotechnology, beauty, slimming, wellness, and food science.
• Implement remediation initiatives for identified material weaknesses in internal controls, including creating segregated duties, increasing personnel, and preparing written policies and procedures, anticipated by the end of fiscal year 2026.

Key Dates

Recommendation

The company's shift from profit to a significant net loss, coupled with negative operating cash flow and a substantial working capital deficit, indicates severe financial distress. The explicit 'substantial doubt about the entity's ability to continue as a going concern' is a critical red flag. Furthermore, identified material weaknesses in internal controls over financial reporting raise concerns about financial integrity and operational risk. While the company outlines future growth strategies, the immediate financial instability and governance issues present an exceptionally high risk profile, making it an unfavorable investment.

Keywords

DSwiss, nutraceuticals, health products, beauty products, OEM, ODM, skincare, personal care, SEC filing, 10-K, financial results, going concern, internal controls, Malaysia, Hong Kong