8-K/A: Amaze Holdings Amends 8-K to Detail Amaze Software Acquisition Financials Amidst Going Concern Warning and Mounting Losses

Amaze Holdings, Inc. filed an amended 8-K to provide financial statements for its recent acquisition, Amaze Software, Inc., revealing substantial operating losses, a significant working capital deficit, and a going concern warning from auditors, despite debt forgiveness and new financing.

Summary

• Amaze Holdings, Inc. (formerly Fresh Vine Wine, Inc.) filed an amended Form 8-K/A to include the audited consolidated financial statements of Amaze Software, Inc. for the years ended December 31, 2024 and 2023, and unaudited pro forma combined financial information.
• The amendment follows the acquisition of Amaze Software, Inc. by Amaze Holdings, Inc. on March 7, 2025, for an aggregate merger consideration of 750,000 shares of Series D Convertible Preferred Stock and warrants to purchase 8,750,000 shares of common stock, valued at $75 million.
• Amaze Software, Inc. reported a net loss of $(15,460,832) for the year ended December 31, 2024, an improvement from $(18,087,117) in 2023, but still indicative of significant unprofitability.
• Revenue for Amaze Software, Inc. significantly decreased to $8,068,119 in 2024 from $14,535,960 in 2023, representing a decline of approximately 44.5%.
• The company's cash reserves decreased to $546,513 as of December 31, 2024, from $1,009,802 in 2023.
• Amaze Software, Inc. had a working capital deficiency of $13.8 million as of December 31, 2024, an increase from $10.9 million in 2023, primarily due to strategic deployment of $7.6 million to support growth in managed services, including timing-related payables and increased commission accruals.
• The independent auditors' report for Amaze Software, Inc. included a 'Substantial Doubt about the Company's Ability to Continue as a Going Concern' due to its operating losses.
• Upon the merger, a $4.4 million promissory note from Fresh Vine Wine, Inc. and a $5,349,975 note from Adifex Investment LLC were forgiven.
• The pro forma combined financial information shows a net loss of $(15,964,279) for the year ended December 31, 2024, and $(5,427,959) for the three months ended March 31, 2025, for the combined entity.

Sentiment

Score: 2

Explanation: The sentiment is highly negative due to the explicit 'going concern' warning from auditors, significant revenue decline, worsening working capital deficit, and substantial increase in liabilities for the acquired entity. While some debt was forgiven, the underlying financial health remains very weak, and the combined entity continues to report significant losses.

Positives

• Amaze Software, Inc. reduced its net loss to $(15,460,832) in 2024 from $(18,087,117) in 2023, indicating a decrease in losses.
• Operating loss for Amaze Software, Inc. improved to $(13,388,913) in 2024 from $(18,335,747) in 2023.
• Cash used in operating activities for Amaze Software, Inc. decreased to $(9,472,649) in 2024 from $(15,927,588) in 2023, indicating more efficient cash management in operations.
• Customer deposits for Amaze Software, Inc. significantly increased to $2,890,705 in 2024 from $638,281 in 2023, potentially indicating increased customer engagement or prepayments.
• Approximately $9.75 million in notes payable (Fresh Vine Wine, Inc. note of $4.4 million and Adifex note of $5,349,975) were forgiven as part of the merger, reducing the combined entity's debt burden.

Negatives

• The independent auditors expressed 'Substantial Doubt about the Company's Ability to Continue as a Going Concern' for Amaze Software, Inc. due to its operating losses.
• Amaze Software, Inc.'s revenue significantly declined by approximately 44.5% from $14,535,960 in 2023 to $8,068,119 in 2024.
• The working capital deficiency for Amaze Software, Inc. worsened to $13.8 million in 2024 from $10.9 million in 2023.
• Total liabilities for Amaze Software, Inc. increased substantially to $27,707,897 in 2024 from $15,290,765 in 2023.
• The current portion of notes payable for Amaze Software, Inc. dramatically increased to $12,715,610 in 2024 from $482,143 in 2023, indicating significant short-term debt obligations.
• The combined entity (Amaze Holdings, Inc. and Amaze Software, Inc.) reported a pro forma net loss of $(15,964,279) for the year ended December 31, 2024, and $(5,427,959) for the three months ended March 31, 2025, indicating continued unprofitability.

Risks

• Substantial doubt about the Company's ability to continue as a going concern due to ongoing operating losses and working capital deficiency.
• Reliance on securing additional funding through strategic partnerships, equity financing, or revenue-driven growth to support ongoing operations and growth initiatives.
• Exposure to multiple ongoing legal proceedings, including G&I IX Aviation LLC v. Teespring, Inc. et al., MyLocker.com, L.L.C. v. Amaze Holding Company LLC (with a default judgment against Amaze), Printbox SP. Z.O.O. v. Amaze Software, Inc., and Andrew Andrews-Ramirez v. Amaze Software, Inc., et al.
• Significant increase in current liabilities, particularly notes payable, posing short-term liquidity challenges.
• Decline in revenue for Amaze Software, Inc. which could impact the combined entity's future performance.

Future Outlook

Management believes that its existing cash, coupled with additional capital raised through debt financing, will provide adequate liquidity for at least 12 months. The company is actively exploring opportunities to strengthen its capital structure by securing additional funding through strategic partnerships, equity financing, and revenue-driven growth. Management is confident in its ability to navigate its financial landscape effectively, leveraging a combination of cost optimizations, revenue enhancements, and capital market strategies, while acknowledging that external financing may be required to further accelerate growth.

Management Comments

• "Management is actively exploring opportunities to strengthen the Company's capital structure by securing additional funding through strategic partnerships, equity financing, and revenue-driven growth."
• "Management is confident in the Company's ability to navigate its financial landscape effectively, leveraging a combination of cost optimizations, revenue enhancements, and capital market strategies."
• "Although external financing may be required to further accelerate growth, the Company is well-positioned to capitalize on favorable market conditions and strategic business opportunities."

Industry Context

The acquisition of Amaze Software, an end-to-end creator-powered commerce platform, by Amaze Holdings, Inc. positions the combined entity within the rapidly expanding creator economy and e-commerce solutions market. While the market for empowering creators and facilitating online sales is robust, Amaze Software's significant revenue decline and ongoing losses suggest challenges in capturing market share or achieving profitability within this competitive landscape, indicating that the company may be struggling to keep pace with industry leaders or adapt to market dynamics effectively.

Comparison to Industry Standards

• Amaze Software's substantial operating losses and the auditor's 'going concern' warning indicate performance significantly below industry standards for financial stability and profitability in the software and e-commerce sectors.
• The significant decline in revenue for Amaze Software from $14.5 million in 2023 to $8.0 million in 2024 contrasts sharply with the general growth trends observed in the broader e-commerce and creator economy platforms, where many companies are experiencing expansion.
• The increasing working capital deficit and high current liabilities suggest liquidity challenges that are typically not seen in financially healthy, well-managed companies within the software industry.

Legal Proceedings

• G&I IX Aviation LLC v. Teespring, Inc. et al. (Case No. 23-CI-00220, Boone County Circuit Court, Kentucky): Amaze Holding Company LLC is a defendant. The dispute relates to an attempted lease assumption where the plaintiff refused consent unless prior obligations were paid. The court denied the plaintiff's motion for summary judgment against Amaze on June 12, 2024. The matter remains in discovery.
• MyLocker.com, L.L.C. v. Amaze Holding Company LLC (Case No. 24-013888, Wayne County Circuit Court, Michigan): MyLocker.com L.L.C. filed a complaint seeking payment for invoices. A default judgment was entered against Amaze on November 11, 2024, for $81,772.24. Approximately $34,000 has been garnished, and the Company is evaluating next steps.
• Printbox SP. Z.O.O. v. Amaze Software, Inc. (Case No. 5:24-cv-05106, U.S. District Court for the Western District of Arkansas): Amaze Software, Inc. is the Defendant and Counter-Plaintiff. The parties have competing claims for breach of contract and unjust enrichment related to a subcontractor agreement. The court denied Printbox's partial motion to dismiss Amaze's counterclaim on November 20, 2024. Discovery is ongoing.
• Andrew Andrews-Ramirez v. Amaze Software, Inc., et al. (Case No. 30-2024-01449472, Orange County Superior Court, California): A lawsuit filed by a former employee alleging discrimination, harassment, and related claims based on marital status. Amaze intends to enforce an arbitration agreement.

Related Party Transactions

• The forgiveness of the $4.4 million promissory note from Fresh Vine Wine, Inc. (now Amaze Holdings, Inc., the acquirer) upon the completion of the merger in March 2025.

Stakeholder Impact

• Shareholders of Amaze Holdings, Inc. face potential dilution from the issuance of Series D Preferred Stock and warrants as part of the acquisition consideration, as well as from new warrants issued with the recent loan.
• Shareholders also face significant financial uncertainty due to the 'going concern' warning, substantial accumulated deficit, and ongoing losses of the combined entity.
• Employees of Amaze Software, Inc. may face job insecurity or operational changes given the financial challenges and the acquisition by Amaze Holdings, Inc.
• Customers and vendors of Amaze Software, Inc. may experience uncertainty regarding the company's long-term stability and ability to fulfill obligations, particularly given the default judgment in the MyLocker.com case and the increase in customer deposits as a liability.

Next Steps

• Completion of the final purchase price allocation for the Amaze Software acquisition within one year of the closing date.
• Ongoing discovery and legal proceedings for the various lawsuits, including G&I IX Aviation LLC v. Teespring, Inc. et al., MyLocker.com, L.L.C. v. Amaze Holding Company LLC, Printbox SP. Z.O.O. v. Amaze Software, Inc., and Andrew Andrews-Ramirez v. Amaze Software, Inc., et al.
• Management's continued efforts to strengthen the capital structure through securing additional funding, strategic partnerships, equity financing, and revenue-driven growth.
• Making weekly payments of $7,500 on the new business loan starting June 16, 2025, with a balloon payment of $56,250 in week 40.

Key Dates

Recommendation

Keywords

Amaze Holdings, Amaze Software, SEC filing, 8-K/A, acquisition, merger, financial statements, pro forma, going concern, e-commerce, creator platform, software, financial results, debt, warrants, preferred stock, liquidity, legal proceedings