10-K: SafeSpace Global: AI Safety Expansion Amidst Financial Losses

SafeSpace Global Corporation reports significant strategic expansion and capital raise, alongside substantial operating losses and a material weakness in internal controls for fiscal year 2025.

Summary

• SafeSpace Global Corporation, a multimodal AI technology solutions company, completed a strategic rebranding in April 2025, expanding its mission beyond healthcare to include schools, transit systems, correctional facilities, and commercial infrastructure.
• The company reported no contract revenue for the fiscal year ended July 31, 2025, a significant decrease from $322,000 in the prior year.
• Net loss for fiscal year 2025 dramatically increased to $(4,638,571) from $(702,486) in fiscal year 2024.
• Operating expenses surged by 350% to $4,799,616 in fiscal year 2025, driven by increases in executive compensation, professional fees, software development, sales support, travel, advertising, and stock-based compensation.
• The company successfully raised $10,764,700 in net proceeds from the sale of common stock during fiscal year 2025, significantly improving its cash position to $7,546,390 and resulting in a working capital surplus of $7,274,432.
• SafeSpace Global launched new AI-powered safety solutions including SafeFace Access Control, SafeFace Time Compliance, SafeGuard Wander Protection, SafeTrace Rapid Investigations, and SafeSchool.
• The company was granted two U.S. patents: US Patent No. 11,587,423 for Fall Validation with Privacy-Aware Monitoring and US Patent No. 11,886,950 for System and Method for Assessing and Verifying the Validity of a Transaction.
• As of October 27, 2025, there were 187,511,196 shares of common stock outstanding and 127 stockholders of record.
• A material weakness in internal control over financial reporting was identified as of July 31, 2025, due to the concentration of control in a single individual for procurement and expense reimbursement.

Sentiment

Score: 3

Explanation: The company exhibits very poor financial performance with no revenue and a substantial net loss in FY2025, coupled with a material weakness in internal controls. While a significant capital raise provides a cash runway and strategic expansion is underway, the current operational results and governance issues present high fundamental risks for investors.

Positives

• Secured significant capital, with $10,764,700 in net proceeds from common stock sales in FY2025, leading to a cash balance of $7,546,390 and a working capital surplus of $7,274,432.
• Completed a strategic rebranding to SafeSpace Global Corporation, reflecting an expanded mission and global reach across multiple industries.
• Launched several innovative AI-powered safety solutions, including SafeFace Access Control, SafeFace Time Compliance, SafeGuard Wander Protection, SafeTrace Rapid Investigations, and SafeSchool.
• Received two U.S. patents (US Patent No. 11,587,423 and US Patent No. 11,886,950), strengthening the company's proprietary technology portfolio.
• Strengthened the executive and development teams with key hires, including a new Chief Technology Officer, Chief Revenue Officer, and President & Chief Strategy Officer.
• Initiated a strategic test pilot program with the Kansas City Area Transportation Authority in preparation for the FIFA World Cup 2026, indicating market penetration into new verticals.

Negatives

• Reported no contract revenue for the fiscal year ended July 31, 2025, a substantial decline from $322,000 in the prior year.
• Experienced a significant increase in net loss, reaching $(4,638,571) in FY2025 compared to $(702,486) in FY2024.
• Operating expenses surged by 350% to $4,799,616 in FY2025, indicating a high cash burn rate without corresponding revenue.
• Identified a material weakness in internal control over financial reporting as of July 31, 2025, due to concentrated control in a single individual.
• The common stock is categorized as a penny stock, which may limit liquidity and make it difficult for stockholders to sell shares.
• Several directors and executive officers had late Section 16(a) reports, indicating potential compliance oversight issues.
• The company does not currently have a code of ethics or separately designated audit, nominating, or compensation committees, which are common corporate governance practices for public companies.
• Net cash used by operating activities increased significantly to $(2,676,309) in FY2025 from $(267,729) in FY2024.

Risks

• The company operates in a highly competitive industry with competitors possessing greater capital and resources, potentially leading to product obsolescence or competitive disadvantage.
• Inability to respond to rapid technological changes in the industry may increase costs and competition, adversely affecting the business.
• The company's products and services are new and in early stages of development, with no guarantee of anticipated function or market desirability, potentially leading to customer loss or claims.
• Uncertainty in achieving and maintaining profitability, with future revenues and earnings potentially volatile due to reliance on a limited number of products and services.
• Failure to effectively manage growth, including attracting and retaining skilled personnel and managing strategic relationships, could strain financial and operational resources.
• The company's common stock is eligible for quotation on the over-the-counter market but not a national securities exchange, which may result in lower liquidity and price volatility.
• Future issuance of additional common stock will likely dilute investors' interests and net book value per share.
• The company's common stock is a penny stock, which may make it difficult to sell shares due to specific broker-dealer requirements and limited liquidity.
• The protection provided by federal securities laws relating to forward-looking statements may not apply to the company due to its penny stock status, potentially harming it in legal proceedings.
• FINRA sales practice requirements may limit a stockholder's ability to buy and sell the company's stock.
• The company is exposed to credit risk on its cash and cash equivalents to the extent account balances exceed federally insured limits.
• A lawsuit by Apex Funding Source, LLC against BERI and Scott M. Boruff for $4,705,900, although the company believes it has valid defenses and no material adverse effect is expected.

Future Outlook

The company's primary objective is to expand the adoption of its life-saving multimodal AI technology across existing and emerging verticals, including senior living, education, transportation, and corrections, with future expansion planned into commercial infrastructure and high-risk institutional settings. Management anticipates approximately $500,000 in capitalized software development costs during the next fiscal year to support ongoing product innovation. The company believes its current cash and cash equivalents of approximately $6,500,000 adequately support its five-year strategic plan, enabling strategic initiatives such as acquisitions, investments in advanced AI technology, and expansion of its technology development team.

Management Comments

• We believe that this transformation strengthens our market positioning and aligns our corporate identity with our broadened strategic vision.
• SafeSpace Global Corporation is executing a focused growth strategy led by a world-class team of executives with deep experience in scaling innovative companies.
• Our leadership team combines proven operational expertise with a mission-driven commitment to safety and impact.
• Our primary objective is to expand the adoption of our life-saving multimodal AI technology across both existing and emerging verticals.
• We believe that the benefits of anti-takeover provisions, including increased protection of our potential ability to negotiate with the proponent of an unfriendly or unsolicited proposal, outweigh the disadvantages of discouraging takeover proposals.

Industry Context

SafeSpace Global operates in the highly competitive and rapidly evolving AI technology and safety solutions market, specifically targeting sectors like senior living, education, and transportation. The company's focus on multimodal AI and facial recognition aligns with broader industry trends towards advanced automation, enhanced security, and data-driven operational efficiency. However, it faces intense competition from larger, more established companies with greater resources. The expansion into diverse environments like schools and transit systems reflects a strategic move to diversify revenue streams and leverage its core AI capabilities across a wider addressable market, capitalizing on increasing concerns for public safety and operational compliance.

Comparison to Industry Standards

• The filing does not provide specific comparable companies, projects, or results to assess the company's performance against global benchmarks. It acknowledges facing intense competition from larger companies with longer operating histories and significantly greater financial, marketing, and other resources.

Management Changes

Corporate Governance

Legal Proceedings

• Apex Funding Source, LLC filed a lawsuit on September 18, 2023, against Blue Earth Resources, Inc. (BERI) and Scott M. Boruff (CEO and Chairman), alleging breach of a loan agreement and failure to pay $4,705,900 in principal and interest.
• Apex alleges that Grasshopper Staffing, Inc. and IndeLiving Holdings, Inc. (former company names/subsidiaries) are guarantors of the loan to BERI, an entity with common management personnel.
• On April 18, 2024, Apex filed a motion for partial summary judgment against BERI and Mr. Boruff for $4,705,900 plus attorneys' fees; Grasshopper Staffing, Inc. and IndeLiving Holdings, Inc. were not included in the order granting partial summary judgment.
• Management believes the company has valid defenses if Apex attempts to enforce alleged guarantees, and that even if adversely determined, the remaining actions would not have a direct or indirect material adverse effect due to no remaining subsidiaries.

Related Party Transactions

• As of July 31, 2025, related parties were owed $2,339 (down from $30,925 in FY2024) for loans, which are payable on demand and carry no interest.
• The company has a Non-Employee Chief Executive Officer Engagement Agreement with Platinum Equity Advisors, LLC (owned 100% by the CEO's spouse), for the services of Scott M. Boruff as CEO and Chairman.
• As of July 31, 2025, $5,492 was owed to Platinum Equity Advisors, LLC (down from $151,386 in FY2024) related to the CEO agreement.
• In December 2024, the company issued a Promissory Note (Platinum Note 4) for $373,957 to Platinum Equity Advisors, LLC, which was repaid by July 31, 2025.
• For FY2025, the company recognized $57,006 in office rent expense from a month-to-month sublease agreement with Blue Earth Resources, Inc. (BERI), an entity related through common management control.

Stakeholder Impact

• **Shareholders**: Experienced significant dilution from the issuance of 92,626,548 shares for cash and other purposes in FY2025. Face high risk due to the company's pre-revenue status, substantial losses, and penny stock classification. Potential for long-term value if strategic growth initiatives succeed, but no dividends are expected in the near future.
• **Employees**: The company is growing its workforce (32 employees, 17 full-time as of Oct 23, 2025) and using equity incentives to attract and retain talent. New hires in key executive and technical roles indicate investment in human capital.
• **Customers**: Benefit from the expansion of AI-powered safety solutions into new industries (senior living, schools, transportation) and continuous product innovation, aiming to enhance safety and efficiency.
• **Creditors**: Existing debt obligations, including related-party notes, were largely settled or repaid in FY2025, improving the company's short-term liquidity position. However, related-party loans remain a component of liabilities.

Next Steps

• Expand adoption of multimodal AI technology across existing and emerging verticals including senior living, education, transportation, and corrections.
• Plan future expansion into commercial infrastructure and high-risk institutional settings.
• Capitalize approximately $500,000 in software development costs during the next fiscal year to support ongoing product innovation.
• Develop and implement controls to mitigate the identified material weakness in internal control over financial reporting.
• Adopt a code of ethics as business operations expand and the company has more employees and operations.

Key Dates

Recommendation

The company's financial performance for FY2025 is fundamentally weak, reporting no revenue and a net loss of over $4.6 million, a significant deterioration from the prior year. Operating expenses have surged by 350%, indicating a high cash burn rate without corresponding sales. A material weakness in internal controls over financial reporting further raises concerns about financial integrity and oversight. While the company successfully raised over $10 million and is pursuing strategic expansion and product development, these are investments for future potential, not current operational strength. The stock's penny stock status and lack of dividends, combined with the severe financial losses, make it a highly speculative and high-risk investment. A seasoned investor would prioritize current financial health and robust governance, neither of which are evident in this filing.

Keywords

AI technology, Safety solutions, Multimodal AI, Senior living safety, School safety, Facial recognition, Fall monitoring, Access control, Risk management, SEC filing, 10-K, SSGC