10-Q: Hestia Insight Inc. Q1 2026 Financials Show Net Income

Hestia Insight Inc. reported a net income of $3,152 for the first quarter of fiscal year 2026, a significant improvement from a net loss of $392,295 in the prior year period.

Summary

• Hestia Insight Inc. reported a net income of $3,152 for the three months ended February 28, 2026, a substantial turnaround from a net loss of $392,295 for the same period in 2025.
• Total revenue remained at $0 for both periods, with the company emphasizing its focus on planning and preparation for future revenue generation.
• Operating expenses decreased by 65% to $39,326 for the three months ended February 28, 2026, down from $110,669 in the prior year, primarily due to reduced professional fees and cost-saving measures.
• The company's cash and cash equivalents decreased to $17,084 as of February 28, 2026, from $28,871 as of November 30, 2025.
• Total liabilities increased to $309,088 as of February 28, 2026, from $278,245 as of November 30, 2025, largely due to a related party loan payable.
• The company continues to operate as a development stage enterprise and has substantial accumulated deficits, with $(1,054,618) as of February 28, 2026.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this as a cautiously negative sentiment due to the continued lack of revenue, significant accumulated deficit, and ongoing reliance on external financing, despite a slight improvement in net income.

Positives

• Achieved net income of $3,152 for the quarter, a significant improvement from a net loss in the prior year.
• Reduced operating expenses by 65% to $39,326, demonstrating cost control efforts.
• Secured $25,000 in proceeds from a related party loan, contributing to financing activities.
• The accumulated deficit narrowed slightly from $(1,057,766) to $(1,054,618).

Negatives

• Total revenue remains at $0, indicating no current income from core operations.
• Cash and cash equivalents decreased by $11,787 during the quarter, ending at $17,084.
• Total liabilities increased to $309,088, with a significant portion being related party debt.
• The company has a substantial accumulated deficit of $(1,054,618).
• The company's independent auditors have previously raised substantial doubt about its ability to continue as a going concern.
• Disclosure controls and procedures were deemed ineffective due to limited resources and personnel.

Risks

• The company has not yet established an ongoing source of revenues sufficient to cover its operating costs and is dependent on debt and equity financing to fund its operations.
• There is no assurance that the company will be able to raise additional equity capital or be successful in the development and commercialization of its investments and services.
• The company will need to achieve profitable operations in order to continue as a going concern.
• The company owns no patents and has not applied for patent protection, posing a risk to intellectual property rights.
• The company's business, financial condition, results of operations, and cash flows may be impacted by factors beyond its control.
• The company's available cash is estimated to be insufficient to satisfy its cash requirements under current operating expectations.
• The inability to obtain additional capital may restrict the company's ability to grow and may reduce its ability to continue to conduct business operations.

Future Outlook

The company's future operations are dependent on its ability to secure additional financing. Management estimates that available cash will be insufficient to satisfy cash requirements under current operating expectations. Financing transactions may include the issuance of equity or debt securities, or obtaining credit facilities. The company will need to raise significant additional capital to fund operations and provide working capital.

Management Comments

• Management is making efforts to raise additional funding until a registration statement relating to an equity funding facility is in effect.
• Management believes that it will be successful in its capital formation and planned operating activities, but there can be no assurance.
• Management is seeking opportunities for joint ventures, strategic relationships and acquisitions in the healthcare and biotech sectors.
• Management concluded that disclosure controls and procedures were ineffective as of February 28, 2026, due to the company's limited resources and limited number of employees.

Industry Context

StockSavvy.ai notes that Hestia Insight Inc. operates in the AI-powered capital markets advisory and business consulting sector, focusing on emerging growth companies in healthcare and biotech. The company's strategy involves guiding clients through fundraising, offering fractional C-suite services, and seeking strategic acquisitions and licensing opportunities. This positions them within a niche market that requires significant capital and regulatory navigation, making their reliance on external funding a critical factor for growth.

Comparison to Industry Standards

• The company's revenue of $0 for the quarter is significantly below industry standards for established advisory firms, which typically generate substantial fees from client engagements.
• The operating expense reduction of 65% indicates a focus on cost management, which is a common strategy for early-stage companies, but the absolute expense level of $39,326 is low compared to larger, more established players.
• The company's reliance on related party loans for financing is a common practice for startups but deviates from industry standards that often involve venture capital, angel investors, or traditional bank financing.
• The accumulated deficit of over $1 million is typical for development stage companies in capital-intensive sectors like biotech, but it highlights the significant risk and need for future funding compared to mature companies.

Corporate Governance

Legal Proceedings

• The company is not presently a party to any legal proceedings that, if determined adversely, would have a material adverse effect on its business, operating results, financial condition, or cash flows.

Related Party Transactions

• The company has a related party loan payable totaling $198,931 as of February 28, 2026.
• Notes payable to ECL Capital Partners Corp and Mr. Edward Lee are detailed, with various repayment dates and interest rates.
• The company received $25,000 in proceeds from a related party loan during the three months ended February 28, 2026.

Stakeholder Impact

• Shareholders: Potential dilution from future equity financing; risk of investment loss if the company cannot secure funding or achieve profitability.
• Creditors: Increased risk due to the company's reliance on debt financing and ongoing cash burn.
• Employees: Potential job security concerns given the company's going concern issues and need for further capital.
• Management: Faces challenges in securing necessary funding and achieving operational viability.

Next Steps

• Continue efforts to raise additional funding through debt and equity financing.
• Execute business plan and growth goals, which are dependent on securing additional capital.
• Recognize expense and liability related to approved compensation for Edward C. Lee in a future reporting period.
• Continue to develop AI-powered advisory services and seek strategic acquisitions and licensing opportunities.

Key Dates

Recommendation

The company has shown a slight improvement by moving from a net loss to a small net income, and has reduced operating expenses. However, the continued lack of revenue, substantial accumulated deficit, and critical need for future financing, coupled with the auditor's previous going concern warning, present significant risks. A 'hold' recommendation reflects the potential for turnaround if financing is secured and operations become profitable, balanced against the considerable downside risks.

Keywords

Hestia Insight Inc., 10-Q, Quarterly Report, Financial Statements, AI-powered advisory, Capital Markets, Fundraising Solutions, Healthcare, Biotech, Development Stage, Going Concern, Related Party Transactions, Net Income, Operating Expenses