10-Q: GHST World Inc. Reports Q2 2025 Results, Shifts Focus to Clean Energy

GHST World Inc.'s Q2 2025 report reveals a shift in focus towards clean energy projects in Italy, alongside ongoing efforts to monetize its Smart Shin Guard technology.

Summary

• GHST World Inc. is transitioning its business focus to electricity production from solar plants in Italy and energy trading.
• The company sustained a net loss of $58,431 for the six months ended December 31, 2024, compared to a net loss of $436,800 for the same period in 2023.
• Revenue for the six months ended December 31, 2024, was $50,604, compared to $39,695 for the same period in 2023.
• Operating expenses for the six months ended December 31, 2024, were $109,035, significantly lower than the $476,161 reported for the same period in 2023.
• The company has entered into preliminary agreements for land leases in Italy for solar energy projects.
• Green Capital SRL, an Italian company, is expected to raise $7 million to $10 million to construct and operate a solar plant.
• GHST World Inc. had $240 in cash as of December 31, 2024, compared to $18,302 as of June 30, 2024.
• Management expresses substantial doubt about the company's ability to continue as a going concern without raising additional capital or generating material revenue.
• The company identifies a material weakness in its internal control over financial reporting related to the segregation of duties for related-party and non-routine transactions.

Sentiment

Score: 4

Explanation: The sentiment is slightly negative due to the company's financial difficulties, going concern warning, and material weakness in internal control. However, the shift to clean energy and decreased net loss offer some hope for the future.

Positives

• The company is shifting its focus to the clean energy sector, which may offer new revenue opportunities.
• The net loss decreased significantly for the six months ended December 31, 2024, compared to the same period in 2023.
• Revenue increased for the six months ended December 31, 2024, compared to the same period in 2023.
• Operating expenses decreased substantially for the six months ended December 31, 2024, compared to the same period in 2023.

Negatives

• The company has a limited cash balance of $240 as of December 31, 2024.
• Management expresses substantial doubt about the company's ability to continue as a going concern.
• A material weakness in internal control over financial reporting was identified.
• The company has an accumulated deficit of $13,940,380 as of December 31, 2024.

Risks

• The company's transition to the clean energy sector is subject to risks affecting any new venture, including dependence on third-party financing and regulatory approvals.
• The preliminary nature of the agreements for the clean energy business means there is no assurance that definitive agreements or material new operations will result.
• The company's limited capital and reliance on loans from related parties pose a risk to its ability to continue operations.
• The material weakness in internal control over financial reporting could lead to errors in financial reporting.
• The company's Smart Shin Guard business plan has faced delays and may not be successful.

Future Outlook

The company is focusing its efforts on developing its new energy business, with solar plants potentially beginning operations in approximately nine to 12 months from the date the necessary capital is raised.

Management Comments

• Management believes that the Company has reached a point where the losses from its existing business are no longer justifiable.
• Management intends to raise money through investors as needed to support its working capital needs.
• Management estimates that Green Capital will need to raise and deploy approximately $7 million to $10 million to construct and commence operations for one solar plant.

Industry Context

The shift towards clean energy aligns with global trends towards renewable energy sources and sustainability. Many companies are investing in solar and other renewable energy projects to reduce their carbon footprint and capitalize on growing demand for clean energy.

Comparison to Industry Standards

• It is difficult to compare GHST World Inc.'s results directly to industry standards due to its small size and transition to a new business model.
• However, the company's efforts to enter the solar energy market are similar to those of other small companies seeking to capitalize on the growing demand for renewable energy.
• Companies like Enphase Energy and SolarEdge Technologies are examples of successful companies in the solar energy sector, but they operate on a much larger scale than GHST World Inc. currently envisions.

Related Party Transactions

• At December 31, 2024 and June 30, 2024, the Company owed related parties a total of $356,549 and $269,854, respectively.
• These shareholder loans are unsecured, non-interest bearing and are due on demand.
• Included in the debts is $9,559 as of December 31, 2024, of amounts due to related parties that will be converted as described in Note 4.

Stakeholder Impact

• Shareholders face significant risk due to the company's financial difficulties and going concern warning.
• Employees may be affected by the company's shift in business focus and potential need for cost-cutting measures.
• Customers of the Smart Shin Guard may be affected by the company's shift in focus to clean energy.
• Suppliers and creditors face increased risk due to the company's financial difficulties.

Next Steps

• The company needs to secure financing for its clean energy projects.
• Green Capital SRL needs to raise capital to construct and operate solar plants.
• The company needs to address the material weakness in its internal control over financial reporting.
• The company needs to continue developing and commercializing its Smart Shin Guard technology.

Key Dates