10-Q: GiveMePower Faces SEC Suit, Deepening Financial Woes

GiveMePower Corporation reports zero revenue, widening losses, and a going concern warning amidst an ongoing SEC lawsuit against the company and its key executives.

Summary

• GiveMePower Corporation (GMPW) reported zero revenue for both the three and six months ended June 30, 2025, and June 30, 2024.
• Net loss for the three months ended June 30, 2025, increased to $(16,334) from $(8,403) in the prior year period.
• Net loss for the six months ended June 30, 2025, increased to $(24,622) from $(19,135) in the prior year period.
• The company's accumulated deficit grew to $(6,640,079) as of June 30, 2025, up from $(6,615,457) at December 31, 2024.
• Total liabilities increased to $292,345 as of June 30, 2025, from $267,567 at December 31, 2024, primarily due to related party notes payable.
• Cash and cash equivalents stood at $4,388 as of June 30, 2025, a slight increase from $4,232 at December 31, 2024.
• The company has negative working capital of $(867) as of June 30, 2025.
• Management disclosed that current cash balances are insufficient to fund operating plans for the next twelve months, raising substantial doubt about its ability to continue as a going concern.
• The company is involved in ongoing litigation with the SEC, which filed a complaint on November 18, 2024, alleging securities law violations against GMPW, Frank Igwealor (CEO/CFO), Patience Ogbozor (Director), and related entities.
• The SEC is seeking various injunctions, including an officer and director bar and a penny stock bar against Mr. Igwealor and Ms. Ogbozor.
• Disclosure controls and procedures were deemed 'not effective' as of June 30, 2025, due to material weaknesses including lack of written policies, insufficient segregation of duties, and absence of an independent audit committee.

Sentiment

Score: 1

Explanation: The company exhibits severe financial distress with zero revenue, increasing losses, a significant accumulated deficit, and an explicit 'going concern' warning. Compounding these issues are material weaknesses in internal controls and an active SEC lawsuit against the company and its key executives, seeking officer/director bars. The ambitious future plans are entirely dependent on highly uncertain capital raises, making the current outlook extremely negative.

Positives

• Cash and cash equivalents slightly increased to $4,388 as of June 30, 2025, from $4,232 at December 31, 2024.
• The 'Caveat Emptor' tag was removed from the company's OTC Market profile on May 12, 2023, a strategic goal achieved through balance sheet simplification.
• Net cash flows used in operating activities decreased to $(21,323) for the six months ended June 30, 2025, compared to $(22,678) for the same period in 2024.

Negatives

• The company reported zero revenue for the three and six months ended June 30, 2025, and 2024.
• Net losses increased significantly, reaching $(16,334) for the three months and $(24,622) for the six months ended June 30, 2025.
• Accumulated deficit continues to grow, reaching $(6,640,079) as of June 30, 2025.
• The company has negative working capital of $(867) and insufficient capital to sustain operations for the next 24 months, indicating a going concern risk.
• Total liabilities increased to $292,345, with a significant portion ($283,592) being non-interest bearing, on-demand loans from related parties.
• Operating expenses increased to $16,334 for the three months and $24,622 for the six months ended June 30, 2025, compared to prior year periods.
• Disclosure controls and procedures were found to be 'not effective' due to material weaknesses in internal controls.

Risks

• Inability to obtain adequate capital to fund operating losses and achieve profitability, potentially forcing cessation of operations.
• Ongoing litigation with the SEC alleging securities law violations, which could result in civil injunctive actions, civil money penalties, and officer/director bars against key executives.
• Material weaknesses in internal control over financial reporting, including lack of written policies, insufficient segregation of duties, and absence of an independent audit committee, increasing risk of financial misstatement.
• Heavy reliance on cash advances from officers and directors for funding operating activities, which are non-interest bearing and payable on demand, posing liquidity risk if not sustained.
• Exposure to risks from COVID-19's impacts on the residential real estate industry, including prohibitions on in-person activities, lack of consumer desire for physical tours, and deteriorating economic conditions.
• Competition from more established private equity firms, private investors, and management companies with greater capital, name recognition, and resources.
• Uncertainty regarding the success of future strategic initiatives, including the acquisition of a federally licensed bank and development of FINTEC platforms, which require substantial capital.
• Potential for dilution of existing shareholders if future funding is secured through equity offerings.
• Risk of incurring significant indebtedness to finance operations, which could contain restrictive covenants.

Future Outlook

The company intends to commence its Banking and financial services division upon raising sufficient capital to acquire an operating bank. It plans to become a financial technology (FINTEC) company, focusing on a federally licensed bank, machine learning (ML) and artificial intelligence (AI) enabled loan and insurance underwriting, Blockchain-based transaction processing, a cryptocurrency platform, and emerging cryptocurrency opportunities. The company anticipates reconsidering and restarting its real estate operations with the expected recommencement of interest rate cuts in September 2025. Management intends to focus on raising additional funds through private or public equity and/or debt offerings to fund future operations and achieve profitability.

Management Comments

• "Management intends to focus on raising additional funds for the following months and quarters going forward."
• "We cannot provide any assurance or guarantee that we will be able to generate significant revenues. Potential investors must be aware that if the Company were unable to raise additional funds through its operation and the sale of our common stock and generate sufficient revenues, any investment made into the Company could be lost in its entirety."
• "We do believe our current cash balances will be insufficient to allow us to fund our operating plan for the next twelve months."
• "We shall continue to access cash advances from our Officers and Directors to fund our operating activities until such a time that we become cash-flow positive through operating activities."
• "Our ability to continue as a going concern is still dependent on us obtaining adequate capital to fund operation or maintaining consecutive quarterly profitability."
• "Mr. Igwealor, our President and CEO and Ms. Ogbozor, one of our Directors, believes that they are innocent of the violations alleged in the November 18, 2024 SEC Complaint."

Industry Context

GiveMePower Corporation aims to operate in the real estate and financial services sectors, specifically targeting the empowerment of black persons in the United States. Its strategic shift towards FINTEC, including banking, AI/ML lending, and blockchain/cryptocurrency, positions it in a highly competitive and rapidly evolving industry. The company's stated focus on 'unbanked, underserved residents of majorly black communities' suggests a niche market approach within the broader financial inclusion trend. The decision to halt real estate purchases due to anticipated interest rate hikes reflects a sensitivity to macroeconomic conditions, a common concern in the real estate investment industry.

Comparison to Industry Standards

• The company's zero revenue and consistent net losses are significantly below industry standards for operating businesses, indicating a pre-revenue or non-operational phase.
• The reliance on related-party loans for working capital is not typical for established companies and suggests an inability to secure traditional financing, unlike comparable early-stage FINTEC or real estate firms that often raise capital from institutional investors or venture capitalists.
• The stated material weaknesses in internal controls, including lack of segregation of duties and an independent audit committee, fall short of corporate governance best practices expected of publicly traded companies, especially when compared to well-governed financial institutions or real estate investment trusts (REITs).
• The ongoing SEC litigation, including potential officer/director bars, is a severe deviation from the regulatory compliance standards expected in the financial services industry and could severely impede the company's ability to operate or attract legitimate partnerships, unlike compliant industry peers.
• The ambitious plans for acquiring a federally licensed bank and developing advanced FINTEC platforms (ML/AI lending, blockchain, crypto) are comparable to innovative startups in the fintech space, but GMPW lacks the foundational financial stability and external capital typically seen in companies pursuing such large-scale, capital-intensive ventures.

Corporate Governance

Legal Proceedings

• The company is in litigation with the United States Securities and Exchange Commission (SEC) in an action styled *Securities and Exchange Commission v. Frank Igwealor, et al.* (2:24-cv-09941-SRM-PD).
• On July 1, 2024, the company received a Wells Notice indicating a preliminary determination by SEC staff to recommend an enforcement action.
• The proposed action alleges violations of Securities Act Sections 17(a)(1), (a)(2), (a)(3); and Securities Exchange Act Sections 10(b), 13(a), 13(k) and Rules 10b-5(a), (b), (c), 12b-20, 13a-1.
• The SEC's recommendation may involve a civil injunctive action, injunctions, and civil money penalties.
• On November 18, 2024, the SEC filed a complaint listing Givemepower Corporation, Frank Igwealor (President and CEO), Patience Ogbozor (Director), and related entities (Alpharidge Capital LLC, American Community Capital, LP, Los Angeles Community Capital, Kid Castle Educational Corporation, Video River Networks, Inc.) as defendants.
• The SEC is seeking various injunctions, including an officer and director bar and a penny stock bar against Mr. Igwealor and Ms. Ogbozor.

Related Party Transactions

• The company's controlling firm and significant stockholder (Los Angeles Community Capital, controlled by Frank I. Igwealor) advanced $283,592 as of June 30, 2025, and $262,113 as of December 31, 2024, for working capital. These advances are non-interest bearing and payable on demand.
• A line of credit agreement for $190,000 with Goldstein Franklin, Inc. (controlled by Frank I. Igwealor), which matured on September 14, 2025, was fully repaid as of June 30, 2025.
• A line of credit agreement for $1,500,000 with Los Angeles Community Capital (controlled by Frank I. Igwealor), with a maturity date of May 4, 2025, had $262,113 drawn as of June 30, 2025.
• Alpharidge Capital LLC (a former subsidiary) had significant related party transactions prior to its sale, including a $1,500,000 line of credit with Los Angeles Community Capital (drawn $588,859 as of December 30, 2021) and a $4,747,906 long-term liability from a proprietary model licensing agreement with LACC.
• Alpharidge also made a $200,000 long-term loan to Community Economic Development Capital, LLC (CEDC), controlled by Frank I. Igwealor, on October 12, 2021.
• A $2.2 million mortgage loan was made by Alpharidge to Frank and Patience Igwealor on November 12, 2021, for a real estate purchase, at a 5% interest rate.
• Alpharidge made a $314,000 mortgage loan to Community Economic Development Capital, LLC on December 30, 2021.
• The company sold Alpharidge Capital LLC to American Community Capital, LP (controlled by Frank I. Igwealor) on January 12, 2024, for $1,560,992, payable in 240 equal monthly payments of $6,510 starting July 1, 2024.

Stakeholder Impact

• Shareholders face significant risk of investment loss due to the company's going concern issues, persistent unprofitability, and potential dilution from future capital raises.
• Shareholders are also exposed to the negative impact of the ongoing SEC litigation, which could lead to further stock price depreciation and potential trading restrictions (e.g., penny stock bar).
• Employees (currently only one full-time, three unpaid part-time) face job insecurity as future employment and formal contracts are contingent on securing additional financing.
• Creditors, primarily related parties, bear the risk of non-repayment given the company's severe financial distress and reliance on continuous advances.
• Future customers for the proposed FINTEC and real estate ventures face uncertainty regarding the company's ability to launch and sustain these operations given its current financial and legal challenges.

Next Steps

• Management intends to focus on raising additional funds to sustain operations and achieve profitability.
• The company plans to formalize employment contracts for its current unpaid staff.
• The company intends to use independent contractors and consultants for technical and marketing needs as financial resources become available.
• Management plans to establish an audit committee of its Board of Directors comprised of three independent directors.
• The company plans to hire a full-time Chief Financial Officer and add experienced accounting and financial personnel.
• The company plans to retain third-party consultants to review its internal controls and recommend improvements.
• The company's attorneys are working on an appropriate response to the SEC's Wells Notice and evaluating the complaint to determine the most effective strategy moving forward.
• The company anticipates reconsidering and restarting its real estate operations with the anticipated recommencement of interest rate cuts in September 2025.
• The company intends to acquire an operating bank to commence its Banking and financial services division.

Key Dates

Recommendation

The company's financial position is dire, marked by zero revenue, increasing net losses, a substantial accumulated deficit, and an explicit 'going concern' warning, indicating an inability to fund operations. Compounding these severe financial issues are material weaknesses in internal controls and a significant SEC lawsuit against the company and its key executives, seeking officer/director bars and penny stock bars. While the company outlines ambitious future plans in FINTEC and real estate, their execution is entirely dependent on highly uncertain capital raises. The combination of severe financial distress, operational deficiencies, and significant legal liabilities presents an extremely high-risk investment profile with a strong likelihood of further value erosion, making it an unsuitable investment.

Keywords

Financial Technology, FINTEC, Real Estate, Opportunity Zones, Affordable Housing, Blockchain, Cryptocurrency, Machine Learning, Artificial Intelligence, SEC Litigation, Going Concern, Related Party Transactions, Internal Controls, Corporate Governance