10-Q: International Endeavors Reports Q3 Loss Amid Strategic Shift

International Endeavors Corporation reported a significant net loss for the third quarter and nine months ended September 30, 2025, despite revenue growth, as it navigates a strategic shift to modular construction and technology integration.

Summary

• Reported a net loss of $765,591 for the nine months ended September 30, 2025, compared to a net profit of $4,060 for the same period in 2024.
• Revenue increased by 182% to $1,153,028 for the nine months ended September 30, 2025, from $409,342 in the prior year, driven by new design and build services.
• General and administrative expenses surged to $889,451 for the nine months ended September 30, 2025, from $46,825 in 2024, primarily due to subsidiary expansion and business combination professional fees.
• Experienced net cash used in operating activities of $1,381,198 for the nine months ended September 30, 2025, a significant increase from $205,536 in 2024.
• The cash and bank balance at September 30, 2025, was $7,702, down from $382,127 at the beginning of the year.
• Accumulated deficit grew to $3,615,322 as of September 30, 2025.
• The company's continuation as a going concern is dependent on securing additional funding and improving profitability.

Sentiment

Score: 3

Explanation: The company reported significant net losses and substantial cash burn, leading to a "going concern" warning. While revenue increased and strategic initiatives are underway, the financial performance is weak, and future operations are highly dependent on securing significant additional funding. The high G&A expenses and related party debt also contribute to a negative sentiment.

Positives

• Revenue for the nine months ended September 30, 2025, increased by 182% to $1,153,028, compared to $409,342 in the prior year, driven by new design and build services projects.
• Gross profit for the nine months ended September 30, 2025, increased to $134,484 from $60,163 in the prior year.
• Entered a cooperation agreement with Hume Plasterboard Pty Ltd for applying MiC technologies in Australia, aiming for faster, greener, and smarter building solutions.
• Secured an exclusive distribution and marketing agreement with ASA Robotics Limited for its AI Health System, Luna CAT, in Hong Kong and international markets, expanding into AI healthcare.
• Established ModuLink Innotech Pty Limited in Australia (80% owned) to promote AI healthcare and smart living solutions in the Australian market.
• Actively evaluating potential affordable housing projects in New South Wales and Victoria, Australia, integrating proprietary AWG, power storage, and IoT devices.
• Successfully completed a change in control and reverse recapitalization, acquiring ModuLink Investment Limited and its modular construction and technology business.
• The company's board of directors and consenting stockholders approved an increase in authorized common stock from 4 billion to 6 billion shares, providing more flexibility for future capital raises.

Negatives

• Reported a net loss of $765,591 for the nine months ended September 30, 2025, a significant deterioration from a net profit of $4,060 in the same period of 2024.
• Net cash used in operating activities significantly increased to $1,381,198 for the nine months ended September 30, 2025, from $205,536 in the prior year, indicating substantial cash burn.
• Cash and bank balance decreased sharply to $7,702 as of September 30, 2025, from $382,127 at December 31, 2024.
• Accumulated deficit increased to $3,615,322 as of September 30, 2025, from $2,849,731 at December 31, 2024.
• General and administrative expenses increased substantially by over 1800% to $889,451 for the nine months ended September 30, 2025, compared to $46,825 in 2024.
• The company's financial statements are prepared under a "going concern" assumption, with management acknowledging substantial doubt about its ability to continue without additional funding.
• Owes approximately $129,629 in due and payable notes to Zenith (HK) Engineering Limited, a related party, and does not expect to generate sufficient cash flow to repay these notes within the next twenty-four months.
• The company has not undertaken any MiC projects since 2024 and future projects are contingent upon securing requisite funding.

Risks

• Investors may never directly hold equity interests in Hong Kong subsidiaries and are dependent upon contributions from subsidiaries, which are significantly affected by Hong Kong regulations.
• Uncertainty regarding future actions of the PRC government, including changes in interpretation of existing rules, promulgation of new rules, or disallowing the holding company structure, which could cause the value of securities to significantly decline or become worthless.
• Potential for heightened scrutiny, criticism, and negative publicity as a U.S.-listed Hong Kong public company, which could materially change operations and securities value.
• Risks and uncertainties regarding the enforcement of laws in China and Hong Kong, including the Chinese government's ability to change rules and intervene with little advance notice.
• Potential for future cybersecurity review by the Cyberspace Administration of China if the company holds data on more than 1,000,000 users or if applicable laws change, which could affect its ability to list overseas.
• Risk of delisting from OTC Markets under the Holding Foreign Companies Accountable Act (HFCAA) if the PCAOB determines it cannot inspect or investigate the company's Hong Kong-based auditor for two consecutive years.
• Adverse changes in economic and political policies of the PRC government could have a material and adverse effect on overall economic growth in China and Hong Kong, impacting the company's business.
• Possibility that the PRC could prevent cash maintained in Hong Kong from leaving or restrict its deployment, adversely affecting the company's ability to finance cash requirements, service debt, or make dividend distributions.
• PRC regulation of loans to and direct investment in PRC entities by offshore holding companies may delay or prevent the use of proceeds from offshore financing activities for Hong Kong subsidiaries.
• Potential classification as a "Resident Enterprise of China" under the EIT Law, leading to unfavorable PRC income tax consequences on global income for the company and non-PRC shareholders.
• Uncertainties with respect to indirect transfers of equity interests in PRC resident enterprises by their non-PRC holding companies.
• Difficulty for U.S. investors to enforce judgments obtained in U.S. Courts against the company's foreign subsidiaries or management.
• U.S. regulatory bodies may be limited in their ability to conduct investigations or inspections of the company's operations in China.
• Reliance on third-party manufacturers and partners for key components (modular steel structures, atmospheric water generators) creates risks of supply chain disruptions, regulatory restrictions, or geopolitical developments impairing project delivery.
• Inability to raise additional capital on satisfactory terms to support ongoing operations, future growth, and strategic objectives, which could harm business plans and financial condition.
• The company does not expect to generate sufficient cash flow to repay its $129,629 in due and payable notes to Zenith (HK) Engineering Limited within the next twenty-four months, potentially delaying business plan implementation.

Future Outlook

The company plans to secure additional funding through debt and equity, explore new development projects, and accelerate product commercialization to support current operations and future growth. It aims to commence one to two MiC projects in the next twelve months, contingent on securing approximately $6.5 million in funding. If $11.5 million is raised, it expects to begin acquiring land for future projects. ModuLink InnoTech Company Limited will continue to invest in R&D for AWG and IoT technologies for future smart homes. The company is also exploring projects in Australia, North America, and parts of Europe.

Management Comments

• "We believe that careful planning, strategic investment and effective risk management are essential to maximize the potential of these innovative solutions and ensure long-term success."
• "We are dedicated to advancing the boundaries of construction innovation."
• "Our intention is to diversify our supply chain by establishing relationships with suppliers in jurisdictions that offer competitive cost structures, manufacturing capabilities, and regulatory stability."
• "Management is actively pursuing financing opportunities through debt and equity transactions, as well as exploring new development projects and accelerating the commercialization of its products."
• "Based on management's best estimates, the Company believes it has sufficient financial resources to meet its obligations for at least the next twelve months."
• "We do not expect to generate sufficient cash flow to repay these notes within the next twenty-four months."

Industry Context

The company operates in the property development and construction industry, specifically leveraging modular integrated construction (MiC) technology. This aligns with broader industry trends towards efficiency, sustainability, and smart building solutions, incorporating atmospheric water generators (AWG) and Internet of Things (IoT) technology. The expansion into AI healthcare and smart living solutions through partnerships and new entities reflects a diversification strategy into high-growth technology sectors, particularly for elderly care and smart communities. The focus on diversifying supply chains outside mainland China addresses increasing geopolitical and regulatory risks impacting global manufacturing and trade.

Comparison to Industry Standards

• The filing does not provide specific comparable companies, projects, or results to assess the company's performance against global industry benchmarks.

Management Changes

Corporate Governance

Legal Proceedings

• Not involved in any pending legal proceeding or litigation.
• No governmental authority is contemplating any proceeding to which the company is a party or to which any of its properties is subject, which would reasonably be likely to have a material adverse effect.

Related Party Transactions

• Rental expenses of $25,760 for the nine months ended September 30, 2025, paid to AY Consulting Services Company Limited, where the company's Chief Financial Officer also serves as a director and shareholder.
• Project and design management service fees of $403,845 for the nine months ended September 30, 2025, paid to Zenith (PMS) Limited, which is wholly owned by the company's Chairman.
• Subcontracting construction service fees of $188,050 for the nine months ended September 30, 2025, paid to Zenith (PMS) Limited.
• Product development fees of $34,614 for the nine months ended September 30, 2025, paid to Leidenford Ltd.
• Purchase of goods of $7,197 for the nine months ended September 30, 2025, from Leidenford Ltd.
• Amount due from ModuLink Inc. of $15,384 as of September 30, 2025, which is unsecured, non-interest-bearing, and repayable on demand.
• Amount due from Zenith (PMS) Limited of $153,884 as of September 30, 2025, for a deposit paid for subcontracting services, which is unsecured, non-interest-bearing, and repayable on demand.
• Amount due to AY Consulting Services Company of $145,633 as of September 30, 2025, primarily representing advances for development projects, which is unsecured, non-interest-bearing, and repayable on demand.
• Notes payable of $129,629 as of September 30, 2025, to Zenith (Hong Kong) Engineering Limited, a related party, which are due and payable but Zenith (HK) has indicated willingness to work with the company regarding repayment.

Stakeholder Impact

• **Shareholders**: Face significant dilution risk from potential future equity raises, risk of value decline or worthlessness due to "going concern" issues, and geopolitical/regulatory risks related to Hong Kong/PRC operations.
• **Management/Employees**: The company's expansion and strategic initiatives could lead to increased staffing and operational costs, but also potential growth opportunities if funding is secured.
• **Customers**: Potential for delays or impairment in project delivery if supply chain disruptions or funding issues arise, but also benefit from innovative MiC, AWG, and IoT technologies.
• **Creditors (Zenith (HK) Engineering Limited)**: The company does not expect to repay its $129,629 notes payable to Zenith (HK) within 24 months, indicating potential repayment challenges.

Next Steps

• Secure additional funding through debt and equity transactions.
• Explore new development projects and accelerate product commercialization.
• Commence one to two MiC projects in the next twelve months, contingent on funding.
• Acquire land for future projects if $11.5 million in funding is secured.
• Continue research and development of AWG and IoT technologies.
• Initiate outreach with local partners for projects in Canada/North America/Europe as market conditions and finances permit.
• Establish an audit committee.
• Implement additional review and approval procedures to improve segregation of duties.
• Refine risk assessment processes.
• Complete the residential design, build, and project management engagement in Hong Kong by December 2025.
• Name change to MODULINK INC. and increase in authorized common stock to become effective around November 23, 2025.

Key Dates

Recommendation

The company is in a precarious financial position, evidenced by a significant net loss, substantial cash burn, and a "going concern" warning. Its cash balance is critically low, and it requires substantial additional funding ($6.5M in 12 months, $11.5M in 24 months) to execute its business plan, with no assurance of securing it on favorable terms. The reliance on related party funding and the inability to repay existing related party debt within 24 months highlight severe liquidity issues. Furthermore, the company faces considerable geopolitical and regulatory risks associated with its Hong Kong/PRC operations, including potential delisting under the HFCAA. While strategic initiatives and revenue growth are noted, the overwhelming financial distress and high-risk operating environment make this a highly speculative investment with significant downside potential.

Keywords

Modular Construction, MiC, Atmospheric Water Generators, AWG, Internet of Things, IoT, Property Development, Hong Kong, Australia, AI Health System, SEC Filing, 10-Q, Going Concern, Financial Results, Corporate Governance, China Risks, PCAOB