HLLK.OIDHallmark Venture Group, INC
10-K: Hallmark Venture Group Reports Revenue Growth and Net Income for Fiscal Year 2024
Sentiment:
Annual Results
Hallmark Venture Group's 2024 10-K filing reveals a turnaround with revenue generation and a net income, driven by its SEM platform and strategic acquisitions.
Capital raiseThe company's management intends to fund future operations through additional private or public equity offerings.The company may seek additional capital through arrangements with strategic partners from other sources.
Better than expectedThe company generated revenue in 2024 after generating no revenue in 2023.The company reported a net income in 2024 after reporting a net loss in 2023.
Summary
- Hallmark Venture Group, Inc. reported its financial results for the year ended December 31, 2024.
- The company generated revenue of $609,549 in 2024, a significant increase from $0 in 2023, attributed to its wholly-owned subsidiary's operations.
- The cost of revenue for 2024 was $89,087, compared to $0 in the previous year.
- General and administrative expenses increased to $52,847 in 2024 from $7,670 in 2023.
- Payroll expenses rose from $0 in 2023 to $158,995 in 2024.
- The company reported a net income of $154,146 for 2024, a turnaround from a net loss of $195,084 in 2023.
- The company's independent auditor expressed substantial doubt about its ability to continue as a going concern.
- The company had $26,015 in cash on hand at the end of 2024, compared to $0 at the end of 2023.
- Outstanding liabilities were $1,280,041 and $850,078 for 2024 and 2023, respectively.
- The company's management intends to fund future operations through additional private or public equity offerings and strategic partnerships.
Sentiment
Score: 6
Explanation: The document presents a mixed sentiment. While the company achieved revenue growth and net income, there are significant concerns about its ability to continue as a going concern and material weaknesses in its internal control over financial reporting.
Positives
- The company generated revenue of $609,549 in 2024, a significant increase from $0 in 2023.
- The company achieved a net income of $154,146 in 2024, compared to a net loss of $195,084 in 2023.
- The company's SEM platform automates digital advertising campaigns across platforms like Facebook, GDN, and Taboola.
- The platform leverages a direct feed from Yahoo's partner network for real-time data, enhancing campaign performance.
- The company's platform integrates machine learning and AI to optimize ad spend and scale profitable campaigns.
- The company's access to Yahoo's partner network provides a competitive edge through access to first-party data.
Negatives
- The company's independent auditor expressed substantial doubt about its ability to continue as a going concern.
- The company had a working capital deficit of $593,505 as of December 31, 2024.
- The company used $253,076 of cash for operations during the year ended December 31, 2024.
- The company does not believe its current cash balance will be sufficient to fund its planned operating activities for the next twelve months.
- The company has material weaknesses in its internal control over financial reporting.
Risks
- The company's ability to continue as a going concern is dependent on obtaining adequate capital to fund operations.
- The company may never achieve profitability and will continue to need to raise additional capital.
- Any equity financing may be dilutive to existing shareholders.
- The company has material weaknesses in its internal control over financial reporting.
- The company's management acknowledges that its disclosure controls and procedures were not effective as of the end of the period covered in the report.
Future Outlook
The company expects revenues to increase over the next 12 months as it continues to scale its business and operations and intends to fund future operations through additional private or public equity offerings and may seek additional capital through arrangements with strategic partners from other sources.
Management Comments
- Management intends to seek additional capital from new equity securities offerings, debt financing and debt restructuring to provide funds needed to increase liquidity, fund internal growth and fully implement its business plan.
- Management can give no assurance that these funds will be available in adequate amounts, or if available, on terms that would be satisfactory to the Company.
Industry Context
The company operates in the search engine marketing (SEM) industry, which is characterized by rapid technological advancements and intense competition. The company's focus on automation, AI, and machine learning aligns with industry trends towards data-driven and efficient campaign management.
Comparison to Industry Standards
- The company's SEM platform competes with established players like Google Ads and Microsoft Advertising, as well as specialized platforms like Marin Software and WordStream.
- The company's reliance on Yahoo's partner network for data access differentiates it from competitors that primarily focus on Google and Microsoft search data.
- The company's financial performance is significantly below industry leaders, but its recent revenue growth and net income suggest a potential turnaround.
- Comparatively, larger digital marketing agencies like WPP, Omnicom, and Publicis Groupe have significantly higher revenue and profitability due to their broader service offerings and global reach.
Management Changes
| Role | Previous Person | New Person | Effective Date | Reason |
|---|---|---|---|---|
| Director and Officer | John D. Murphy, Jr. | Steven Arenal | 2024-01-11 | Resignation |
| Director and Officer | Paul Strickland | Steven Arenal | 2024-01-11 | Resignation |
| Director | Steven Arenal | John D. Murphy, Jr. and Paul Strickland | 2024-02-28 | Shareholder vote |
Related Party Transactions
- On October 5, 2022, the Company issued a $50,000, 10% convertible promissory note to Selkirk Global Holdings, LLC, (Selkirk).
- On April 6, 2023, the Company issued a $50,000, 10% convertible promissory note to Selkirk Global Holdings, LLC.
- On December 5, 2023, the Company issued a Convertible Exchange Note to John Murphy, for $144,501.
- On September 17, 2020, the Company entered into a settlement agreement with Green Horseshoe, LLC., Inc. on its past due notes payable with a principal balance of $285,206 and accrued interest of $296,670 representing a total amount of the settlement of $581,876.
Stakeholder Impact
- Shareholders face potential dilution from future equity offerings.
- Employees may be affected by the company's financial instability and potential need to curtail activities.
- Customers may be impacted by the company's ability to invest in and maintain its SEM platform.
- Creditors face increased risk due to the company's going concern uncertainty.
Next Steps
- The company intends to seek additional capital from new equity securities offerings, debt financing and debt restructuring.
- The company intends to increase liquidity, fund internal growth and fully implement its business plan.
Key Dates
| Date | Description |
|---|---|
| 1995-07-14 | Hallmark Venture Group, Inc. was originally incorporated in the State of Colorado. |
| 1999-07-12 | The Company changed its name to Homesmart USA, Inc. |
| 2006-03-03 | The Company moved its domicile to Nevada. |
| 2006-03-08 | The Company changed its name to Smart Truck Systems, Inc. |
| 2008-03-06 | The Company changed its name to Speech Phone, Inc. |
| 2008-07-16 | The Company changed its name to Hallmark Venture Group, Inc. |
| 2020-05-04 | Living Waters, LLC (LWLLC) obtained management control of the Company from its previous CEO and Director, Robert Cashman. |
| 2020-11-02 | The Company entered into a Plan of Merger and Acquisition Agreement (the Stonecrest Merger Agreement). |
| 2021-07-12 | The parties agreed to cancel and unwind the transactions contemplated by the Stonecrest Merger Agreement. |
| 2022-03-22 | The Company redomiciled and became a Florida corporation. |
| 2022-06-20 | Endicott transferred 100 % of the preferred shares, and 110,646,679 of the shares of common stock it held, to Beartooth Asset Holdings, LLC. |
| 2022-07-07 | Beartooth Asset Holdings, LLC transferred 75,000 Series A Preferred Shares to JMJ Associates, LLC. |
| 2022-09-15 | The Company was informed through its counsel in regard to a past due note payable, with an unrelated third party, from 2017. |
| 2022-09-24 | The Company entered into a 90-day Standstill Agreement relating to the claim against the Company. |
| 2022-10-05 | The Company issued a $ 50,000 , 10 % convertible promissory note to Selkirk Global Holdings, LLC, (Selkirk). |
| 2023-03-07 | The Company, Phase I Operations, Inc, and The Robert Papiri Defined Benefit Plan entered into an Assignment of Debt Agreement. |
| 2023-04-06 | The Company issued a $ 50,000 , 10 % convertible promissory note to Selkirk Global Holdings, LLC. |
| 2023-12-05 | The Company issued a Convertible Exchange Note to John Murphy, for $ 144,501. |
| 2024-01-11 | The Company entered into a Change of Control Agreement. |
| 2024-02-27 | Steve Arenal and Aurum International Ltd. were given notice of default and failure to perform on the agreements they had signed. |
| 2024-02-28 | A special meeting of shareholders was held removing Arenal and reinstating Murphy and Strickland. |
| 2024-03-04 | The Company and its Board of Directors approved a 1:500 reverse split of the Companys common stock. |
| 2024-03-07 | The Company filed the Amended and Restated Articles of Incorporation with Florida Secretary of State reflecting the 1:500 reverse split of the Companys common stock. |
| 2024-03-08 | The Company repaid $ 70,000 of the loan. |
| 2024-03-28 | Green Horseshoe, LLC assigned the Settlement Agreement, Court Order, and balance of debt of $ 146,799 to Alpha Strategies Trading Software, Inc. |
| 2024-05-01 | The Company issued a $ 100,000 , 8 % Convertible Promissory Note and entered into a Warrant Subscription Agreement with Nicosel, LLC. |
| 2024-05-02 | The Company made a strategic loan to an independent privately-held non-affiliated third party by entering into a $ 100,000 , 180 day 8 % on demand Promissory Note Agreement. |
| 2024-05-06 | Alpha Strategies assigned this promissory note to Nicosel, LLC. |
| 2024-09-20 | Hallmark Venture Group, Inc. entered into a Debt Cancellation Agreement with Archer & Greiner, P.C., and a total of $ 262,192 of legacy legal debts were cancelled. |
| 2024-09-26 | The Company and its Board of Directors approved the Agreement and Plan of Reorganization. |
| 2024-09-26 | The Company and Jubilee Intel, LLC (Jubilee) entered into that certain Agreement and Plan of Reorganization (the Merger). |
| 2024-09-27 | JMJ Associates, LLC transferred 75,000 Series A Preferred Shares it held to Evan Bloomberg pursuant to the Agreement. |
| 2024-09-27 | Beartooth Asset Holdings, LLC transferred 25,000 Series A Preferred Shares it held to Evan Bloomberg pursuant to the Agreement. |
| 2024-10-09 | The Company authorized the issuance of up to $ 500,000 in non-convertible promissory notes. |
| 2024-10-15 | The Company issued a $ 50,000 promissory note, and a warrant to purchase 1,250 shares of Company common stock. |
| 2024-10-23 | The Company entered into a Management Agreement with Evan Bloomberg. |
| 2024-10-28 | The Company issued a $ 33,000 promissory note, (increased to $ 36,960 ) and a warrant to purchase 825 shares of Company common stock. |
| 2024-11-04 | The Company issued a $ 30,000 promissory note and a warrant to purchase 750 shares of Company common stock. |
| 2024-11-15 | The Company issued a $ 25,000 promissory note and a warrant to purchase 625 shares of Company common stock. |
| 2024-11-19 | The Company issued a $ 50,000 promissory note and a warrant to purchase 1,250 shares of Company common stock. |
| 2024-12-20 | The Company issued a $ 25,000 promissory note and a warrant to purchase 625 shares of Company common stock. |
| 2025-02-24 | The Company entered into a Line of Credit Agreement (LOC) with NMG Media, LLC (the Lender). |
| 2025-03-07 | The Company issued an 8 % Convertible Promissory Note in the principal amount of $ 50,000 to an Investor. |
Keywords
SEM platform, revenue, net income, financial results, Hallmark Venture Group, digital advertising, machine learning, AI, Yahoo partner network, going concern
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