S-1: GivBux Files S-1 for $11.1 Million Convertible Note Offering Amidst Significant Losses and Going Concern Warning

GivBux, Inc. has filed an S-1 registration statement to register shares for resale from a recent convertible note and warrant financing of up to $11.11 million, as the company continues to report substantial net losses and faces a going concern doubt.

Summary

• GivBux, Inc. (GBUX) is registering 34,523,278 shares of common stock for resale by Kips Bay Select, LP, stemming from a senior secured convertible note and warrants financing.
• The convertible note has an aggregate principal amount of $566,666.68, with an original issue discount (OID) of 10% ($56,666.68), resulting in $510,000 in consideration to the company for the initial tranche.
• The financing includes warrants to purchase up to 3,631,083 shares of common stock in the initial tranche, and up to 13,180,556 shares in thirteen subsequent tranches, each with a principal amount of $811,111.11 and a 10% OID.
• The note matures on December 7, 2025, accrues interest at 6% per annum, and at 18% upon an Event of Default.
• The company reported a net loss of $3,316,192 for the year ended December 31, 2024, compared to $1,106,962 for the same period in 2023.
• As of December 31, 2024, GivBux had an accumulated deficit of $6,953,358 and current liabilities exceeding current assets by $3,109,331.
• Revenue for the year ended December 31, 2024, was $544,327, a 277% increase from $196,326 in 2023, driven by facilities rentals, subscription, and transactional revenue.
• The company's current business revolves around the GivBux Super App, a Fin-Tech mobile wallet designed for purchases, rewards, charitable donations, and social communication, with 258 retailers and 11,202 users as of December 31, 2024.
• GivBux plans future growth through a network marketing strategy to increase users, associates, and merchants, and is preparing for expansion into Mexico and Canada.
• The company's auditor, Olayinka Oyebola & Co., was charged by the SEC with aiding and abetting antifraud violations, leading GivBux to change its auditor to Lao Professional Services in April 2025.

Sentiment

Score: 2

Explanation: The company faces severe financial distress, evidenced by significant and increasing net losses, a substantial accumulated deficit, and a going concern warning from its auditor. While a capital raise has occurred, it is a high-cost, dilutive financing, and the company explicitly states it will require additional funding. The business model is evolving, and operational risks are high. The overall financial health and sustainability are highly questionable, leading to a very negative sentiment.

Positives

• Revenue increased by 277% from $196,326 in 2023 to $544,327 in 2024, indicating significant growth in sales activities.
• The company successfully closed a convertible note financing with Kips Bay Select, LP, securing an initial $510,000 in gross proceeds, with potential for up to $11.11 million in total funding.
• The GivBux Super App has proven functionality in a live environment, with ongoing improvements and scheduled periodic releases.
• The company has a growing network of 258 retailers (mostly national brands) and 11,202 users, with a focus on recruiting more local merchants.
• A network marketing strategy is adopted for exponential growth, engaging leaders with access to large associate networks.
• The company's intellectual property, including the GivBux Super App Source Code, is owned by GivBux, Inc.

Negatives

• The company has a history of generating net losses, with a net loss of $3,316,192 in 2024 and $1,106,962 in 2023.
• As of December 31, 2024, the accumulated deficit reached $6,953,358, and current liabilities exceeded current assets by $3,109,331, raising substantial doubt about the company's ability to continue as a going concern.
• Cash on hand is very limited, with $18,374 as of December 31, 2024, and $17,153 as of March 31, 2025.
• The company has significant debt, including $958,440 owed to related parties and $526,150 in other loans payable as of December 2024, with nine loans totaling $304,000 in default as of March 31, 2025.
• The company is highly dependent on its senior management and key technical employees, and the loss of any key employee could harm the business.
• The company's executive officers and directors allocate time to other business activities, potentially causing conflicts of interest.
• The company's common stock is considered a 'Penny Stock' and has very limited liquidity, making it difficult for shareholders to resell shares.
• The company's previous auditor was charged by the SEC with aiding and abetting antifraud violations, which could cause disruptions in reporting.

Risks

• Failure to manage growth effectively may strain operational capacity, negatively impacting business execution, service levels, and customer satisfaction.
• Inability to attract new users, retain existing users, and increase platform usage could severely impact business and revenue.
• Inability to sustain revenue growth in future periods due to factors like slowing demand, increased competition, or changing customer behaviors.
• Limited operating history in an evolving industry makes future prospects difficult to evaluate and increases the risk of business failure.
• Dependence on offering payment processing services with desired functionality at attractive prices to attract and retain merchants.
• Operating results are significantly dependent on payment processing services, with revenue and gross profit varying based on payment volume and activity type.
• A majority of merchants are SMBs and individuals, which are more difficult and costly to retain and are more susceptible to economic fluctuations.
• Reliance on revenue from subscription contracts, with downturns in sales not immediately reflected in results due to ratable revenue recognition.
• Inability to expand financial technology services or achieve widespread adoption of new services could limit future revenue growth.
• Significant risk of not being able to repay notes payable and convertible notes payable, potentially leading to bankruptcy or inability to operate.
• Issuance of additional shares from convertible notes could lead to significant dilution of share price and negatively affect future capital raising ability.
• Failure to maintain and enhance brand recognition in a cost-effective manner could harm business, financial condition, and results of operations.
• Inability to recruit, retain, and develop qualified personnel, especially sales and technical staff, is critical to success and growth.
• Potential conflicts of interest due to executive officers and directors allocating time to other business activities.
• Inability to obtain additional financing when required could compel restructuring or abandonment of transactions.
• Dependence on management's willingness to fund reporting obligations and administrative costs due to limited revenues.
• Executive officers are in a position to influence certain actions requiring shareholder vote due to super-voting preferred stock.
• Exposure to various legal proceedings, including class actions, arbitration, and government investigations, which could result in substantial damages, fines, or reputational harm.
• Risks associated with handling customer funds, including loss from fraud, unauthorized transactions, or financial institution insolvency.
• Failure to offer high-quality customer support may adversely affect relationships with users and business results.
• Long-term business potential may be adversely affected if unable to successfully expand into international markets due to lack of experience and new regulatory challenges.
• Success depends on the security of the platform, and any actual or perceived breach of sensitive and personal information could materially impact the business.
• Interruptions or performance problems with technology and infrastructure may adversely affect business and operating results.
• Success depends on continually enhancing platform performance, reliability, and features in a rapidly changing industry.
• Defects, errors, or vulnerabilities in applications, backend systems, hardware, or third-party technology providers could harm reputation and business.
• Risk management strategies may not be fully effective in mitigating all types of risk in rapidly changing market environments.
• Unfavorable conditions in the FinTech industry or global economy could limit business growth and impact financial performance.
• Results of operations may be adversely affected by changes in foreign currency exchange rates as international sales increase.
• Ability to use net operating loss carryforwards and certain other tax attributes may be limited by ownership changes or regulatory changes.
• Seasonal fluctuations in financial results could cause stock price volatility.
• Reliance on third-party insurance policies, which may be insufficient or unavailable, could increase exposure to operations-related risks.
• Intense competition in the markets, including from other mobile wallets and payment gateways, could adversely affect operating results.
• Potential changes in the competitive landscape, including disintermediation from other payments chain participants, could harm the business.
• Significant resources expended on sales opportunities, with failure to close sales adversely affecting financial results.
• Substantial reliance on one third-party payment processor, with risks if the processor fails to maintain support, experiences interruptions, or increases fees.
• Failure to comply with payment network requirements (e.g., PCI DSS, Payment Network Rules) could lead to fines, suspension, or termination of registrations.
• Increases in Payment Network fees or new regulations could negatively affect earnings.
• Reliance on merchants on the platform, with any failure to maintain service levels or changes to operating costs adversely affecting the business.
• Primary reliance on Amazon Web Services for platform delivery, with any disruption adversely affecting business.
• Dependence on interoperability of the platform across third-party applications and services not controlled by the company.
• Reliance on third-party sources for market estimates and information, with potential inaccuracies harming reputation and investment evaluation.
• Partnerships with third parties are an important source of new business, and a reduction in referrals could adversely affect revenue.
• Business is subject to a variety of U.S. laws and regulations, many unsettled and developing, with non-compliance leading to claims or adverse effects.
• Changes in legislative and regulatory policy affecting payment processing could have a material adverse effect.
• Failure to comply with NACHA Rules could materially harm the transaction processing business.
• Failure to comply with anti-money laundering, economic and trade sanctions regulations, and the FCPA could subject the company to penalties.
• Regular collection and storage of personal information subjects the company to domestic and international privacy and data security laws, with compliance costs and liabilities increasing.
• Evolving government regulation of the Internet, mobile devices, and e-commerce could substantially adversely affect the business.
• Developing new products and services may subject the company to the authority of the Consumer Financial Protection Bureau (CFPB), increasing scrutiny.
• Failure to adequately protect intellectual property rights could impair competitive position, lead to lost assets, reduced revenue, and costly litigation.
• Exposure to intellectual property rights claims by third parties, which are costly to defend and could limit technology use.
• Use of open source software components carries risks of non-compliance with licenses, potentially affecting product sales and leading to litigation.
• Inability to continue using current domain names or prevent third parties from acquiring similar ones could harm brand value.
• Operating as a public company incurs significant costs and regulatory compliance obligations, potentially straining financial and management systems.
• Identified material weaknesses in internal controls over financial reporting, with potential for future misstatements or failure to meet reporting obligations.
• As an emerging growth company, reduced disclosure requirements may make Class A common stock less attractive to investors.
• Senior management team has limited experience managing a public company, potentially diverting attention from day-to-day business.
• Common stock is a 'Penny Stock' with very limited liquidity, making it difficult to sell shares.
• Significant limitations on shareholders' ability to resell shares due to lack of market or state Blue Sky laws.
• Future dilution of ownership percentage due to equity issuances for acquisitions, capital market transactions, or equity awards.
• Certain provisions in articles of incorporation and bylaws, and Nevada law, may prevent or delay an acquisition, decreasing stock price.
• No expectation of cash dividends for the foreseeable future, meaning investment gain depends solely on stock price appreciation.
• Lack of research or inaccurate/unfavorable research by securities or industry analysts could cause stock price and trading volume to decline.
• Sale of common stock by the Selling Stockholder (Kips Bay Select, LP) may cause stock price to decline and encourage short sales.

Future Outlook

GivBux plans to increase its user base, associates, and merchants through a network marketing strategy to gain market exposure and revenue. The company is preparing for international expansion into Mexico and Canada. Development of the GivBux Super App is ongoing, with newer versions scheduled for periodic releases to add functions and fix bugs. The company anticipates needing additional funding for app development, executive compensation, and operational costs, beyond the initial convertible note proceeds used for past due rent and immediate operational costs.

Management Comments

• "The GivBux Super App has been designed to store, send, receive rewards, communicate with friends via chat/voice/video, create business opportunities for each giver, utilize social media, leverage blockchain technologies to enhance customer experiences using AR (augmented reality), protect giver accounts using cloud biometrics, donate to charity and make real-time purchases at top retail brands, and other venues globally."
• "The brands benefit because they are empowered with a data-rich marketing tool to reach and retain consumers through their mobile phones."
• "Newer versions of the GivBux Super App are scheduled for periodic releases in the coming months as the Company adds functions or fixes bugs."
• "There is currently a greater focus on recruiting more local merchants which will increase the selections of services and goods for our users and decrease our dependency on national brands."
• "The company has adopted a network marketing strategy which will allow us to grow exponentially over the next 18 months."
• "The company estimates that it requires approximately $1 million in funding in order to pay back creditors with convertible notes ($400,000) and $600,000 for product development and business growth. Any future acquisitions would require additional funding."
• "The audit process also allows for a third party auditor to verify and analyze our financial transactions, allowing for immediate adjustments during the review process if needed. The processes have been improved in order to achieve reporting in a timely manner, allowing for proper analysis and verification and ensuring that we are able to meet regulatory deadlines for financial reporting."

Industry Context

GivBux operates in the Fin-Tech mobile wallet sector, aiming to integrate payment processing with social features, rewards, and charitable giving. This positions it within a competitive landscape that includes established mobile wallets (e.g., Apple Pay, Venmo, PayPal) and traditional credit card companies, as well as other platforms that facilitate charitable donations at the point of sale or through gift card purchases. The company's focus on network marketing and direct recruitment of local merchants is a strategy to differentiate and build market share against larger, more established players.

Comparison to Industry Standards

• The document does not provide specific comparable companies, projects, or results with detailed metrics for a direct assessment against global benchmarks.
• The company's growth rate of 277% in revenue from 2023 to 2024 is high, but it is from a very low base ($196,326 to $544,327), which is not directly comparable to established FinTech companies with multi-million or billion-dollar revenues.
• The significant accumulated deficit of $6.95 million and current liabilities exceeding current assets by $3.1 million indicate a financial position far below industry standards for stable, profitable FinTech companies.
• The high default interest rate of 18% on the convertible note upon an Event of Default is indicative of high-risk financing, which is not typical for financially stable companies in the FinTech sector.
• The company's reliance on related party debt and the default status of several loans suggest a weaker financial standing compared to industry peers that typically access more conventional and less costly forms of capital.

Management Changes

Corporate Governance

Legal Proceedings

• There are no legal proceedings material to the company's business or financial condition pending, contemplated, or threatened, to the best of management's knowledge.

Related Party Transactions

• As of December 2024, the company had $958,440 of debt payable to related parties (Bull Bear, Inc. and Bear Bull Market Dividends, Inc., controlled by Kenyatto Jones, the managing principal).
• During the three months ended March 31, 2025, the company obtained $7,250 in loans from related parties and repaid $41,481 to related parties.
• As of March 31, 2025, and December 31, 2024, the company had notes payable to related parties of $802,518 and $836,749, respectively, with accrued interest of $124,841 and $118,417, respectively. These notes are unsecured, 3% interest-bearing, and due on demand.
• As of March 31, 2025, and December 31, 2024, the company had $3,275 due to related parties.

Stakeholder Impact

• **Shareholders:** Face significant dilution risk from the convertible notes and warrants, especially given the low conversion price relative to market price and the potential for future equity issuances. The 'Penny Stock' status and limited liquidity also pose challenges for resale. The going concern warning indicates a high risk of losing their investment.
• **Employees:** The company's financial instability and dependence on future funding could impact job security and the ability to attract and retain talent.
• **Customers (Users & Merchants):** The company's financial health and ability to continue operations directly impact the reliability and continuity of the GivBux Super App and its services. Any disruption could lead to loss of service for users and merchants.
• **Suppliers/Creditors:** Existing creditors, particularly those with defaulted loans, face uncertainty regarding repayment. The new secured convertible note ranks senior to other existing indebtedness, potentially impacting recovery for other creditors.
• **Regulatory Authorities:** The company's history of non-reporting, recent auditor issues, and ongoing financial challenges will likely keep it under close scrutiny by the SEC and other regulatory bodies.

Next Steps

• File a Form 8-K report disclosing the material terms of the convertible note financing and including the agreement as an exhibit.
• File an initial Registration Statement on Form S-1 covering the resale of all Registrable Securities by the Filing Deadline (21st calendar day after Initial Closing).
• Use best efforts to cause the initial Registration Statement to be declared effective by the SEC by the Effectiveness Deadline (earlier of 60th calendar day after Filing Deadline or 2nd Business Day after SEC notification of no review).
• Continue to develop and enhance the GivBux Super App, with newer versions scheduled for periodic releases.
• Implement a network marketing strategy to increase users, associates, and merchants.
• Prepare for expansion into additional markets such as Mexico and Canada.
• Increase the number of authorized shares of Common Stock if necessary to meet issuance obligations under the financing agreements.
• Address the material weaknesses in internal controls over financial reporting by developing and implementing new systems, processes, and controls, and hiring additional accounting and financial reporting personnel.

Key Dates

Recommendation

Keywords

FinTech, Mobile Wallet, Super App, Convertible Note, Warrants, SEC Filing, S-1, GivBux, GBUX, Financial Technology, Payment Processing, Rewards Program, Charitable Donations, Network Marketing, Going Concern, Dilution, OTC Markets, Penny Stock, Capital Raise, Risk Factors, Corporate Governance, Financial Reporting