10-Q: Hawkeye Systems Reports Net Loss in Q3 2025, Focus Shifts to Cybersecurity Venture

Hawkeye Systems, Inc. reports a net loss for Q3 2025 and announces a strategic shift towards cybersecurity through a new venture, Rift Cyber LLC.

Summary

• Hawkeye Systems, Inc. filed its Form 10-Q for the quarter ended March 31, 2025.
• The company reported a net loss of $102,987 for the three months ended March 31, 2025, compared to a net loss of $99,470 for the same period in 2024.
• For the nine months ended March 31, 2025, the net loss was $347,383, compared to $486,970 for the nine months ended March 31, 2024.
• The company's cash balance as of March 31, 2025, was $24,994.
• Hawkeye Systems is shifting its focus to cybersecurity through a new venture, Rift Cyber LLC.
• The company holds a 25% membership interest in Rift Cyber LLC.
• The company's auditors and audit committee have been informed of significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting.
• The company's management has concluded that its disclosure controls and internal controls over financial reporting were not effective as of March 31, 2025.

Sentiment

Score: 4

Explanation: The report highlights a net loss, low cash balance, and material weaknesses in internal controls, indicating a negative outlook. However, the strategic shift to cybersecurity offers some potential for future growth.

Positives

• The company's net loss decreased for both the three and nine months ended March 31, 2025, compared to the same periods in 2024.
• Hawkeye Systems is strategically shifting its focus to the cybersecurity industry, which may offer growth opportunities.
• Operating expenses decreased in the nine months ended March 31, 2025, compared to the nine months ended in 2024.

Negatives

• The company reported a net loss for both the three and nine months ended March 31, 2025.
• The company's cash balance is low, raising concerns about its ability to fund operations.
• Management identified material weaknesses in internal control over financial reporting.
• The company's disclosure controls and internal controls over financial reporting were not effective as of March 31, 2025.
• The company's auditors and audit committee have been informed of significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting.

Risks

• The company's low cash balance raises concerns about its ability to fund operations for the next 12 months.
• The company's dependence on related party advances for funding creates uncertainty.
• The identified material weaknesses in internal control over financial reporting could lead to misstatements in financial statements.
• The company's ability to continue as a going concern is dependent on obtaining adequate capital.
• The company's success in the cybersecurity venture is uncertain.

Future Outlook

The company expects to require additional capital to develop its business plan and intends to raise additional capital through the sale of equity or debt securities. The company is focusing on building Rift Cyber LLC cybersecurity products and may seek to acquire, merge, or combine with another company if those efforts are unsuccessful.

Management Comments

• Management believes that the material deficiency in internal controls has a limited impact on the Company because the Company is a dormant entity and all operating activities are incurred to comply with public filing requirements.
• Management concluded that, as of March 31, 2025, our disclosure controls and our internal controls over financial reporting were not effective in recording, processing, summarizing and reporting on a timely basis information required to be disclosed in the reports that we file or submit under the Exchange Act; and were not effective in assuring that information required to be disclosed in the reports we file or submit under the Exchange Act is actually disclosed or filed.

Industry Context

The company's shift towards cybersecurity reflects a growing trend in the industry, as businesses increasingly prioritize digital security solutions. The move to cybersecurity may allow the company to capitalize on the increasing demand for cybersecurity products and services.

Comparison to Industry Standards

• It is difficult to compare Hawkeye Systems' financial performance to industry standards due to its lack of revenue and unique situation.
• However, the company's shift to cybersecurity aligns with industry trends, and its success will depend on its ability to develop competitive products and services.
• Comparable companies in the cybersecurity space include Palo Alto Networks, CrowdStrike, and Okta, which have demonstrated significant revenue growth and market capitalization.

Related Party Transactions

• The company has significant related party transactions, including loans and consulting agreements with Steve Hall.
• On April 1, 2024, the Company and Steve Hall executed a Debt Consolidation Agreement that consolidated the Companys various historic loans from Steve Hall to an amount of $1,770,713.10 (the Steve Hall Indebtedness) and the final consolidated amount was $1,708,000.
• The debt consolidation transaction included the assignment to and assumption by Steve Hall of all amounts due to the Company by CNTNR pursuant to the note receivable described in Note 9Note Receivable.

Stakeholder Impact

• Shareholders may be concerned about the company's net loss, low cash balance, and material weaknesses in internal controls.
• Employees may be affected by the company's strategic shift to cybersecurity.
• Creditors may be concerned about the company's ability to repay its debts.

Next Steps

• The company will focus on developing technologies for Rift Cyber LLC.
• The company will seek additional funding through equity offerings, warrant exercises, and related party advances.
• The company will continue to look for investment opportunities into target businesses in diversified industries, such cybersecurity.

Key Dates

Keywords

cybersecurity, Rift Cyber LLC, net loss, financial statements, internal control, related party, going concern, Hawkeye Systems