10-K: International Land Alliance 2025 Annual Report

International Land Alliance reports a net loss of $14.3 million for fiscal year 2025 amid liquidity challenges and ongoing development projects in Mexico.

Summary

• Reported a net loss of $14.3 million for the year ended December 31, 2025, compared to a net income of $3.0 million in 2024.
• Revenue decreased significantly to $2.4 million in 2025 from $8.1 million in 2024.
• Operating expenses rose to $7.98 million, driven by a $3.7 million stock-based compensation expense.
• Working capital deficit reached $24.3 million as of December 31, 2025.
• Completed the acquisition of 300 acres adjacent to the Rancho Costa Verde development for $1.65 million in December 2025.
• Effected a 1-for-50 reverse stock split on February 4, 2026.

Sentiment

Score: 2

Explanation: StockSavvy.ai views this as a highly distressed situation characterized by recurring losses, significant liquidity issues, and substantial doubt regarding the company's ability to continue as a going concern.

Positives

• Successfully acquired 300 additional acres for the Rancho Costa Verde development project.
• Maintained operations and continued development activities despite significant liquidity constraints.
• Strengthened the board of directors with the appointment of three independent directors in February 2026.

Negatives

• Reported a substantial net loss of $14.3 million for 2025.
• Revenue declined by approximately 70% year-over-year.
• Accumulated deficit reached $38.4 million.
• Auditors expressed substantial doubt regarding the company's ability to continue as a going concern.
• Material weaknesses in internal control over financial reporting were identified.

Risks

• Substantial doubt about the ability to continue as a going concern.
• Significant liquidity shortages and dependence on external debt and equity financing.
• Potential conflicts of interest with entities controlled by officers and directors.
• Regulatory and title transfer risks associated with real estate projects in Mexico.
• Exposure to foreign exchange rate fluctuations between the U.S. Dollar and Mexican Peso.
• Thinly traded common stock and potential for high price volatility.
• Legal action initiated by CleanSpark, Inc. regarding a breach of a Securities Purchase Agreement.

Future Outlook

The company plans to continue marketing efforts to increase plot sales and house construction to improve liquidity. Management anticipates that capital resources will improve if projects gain wider market recognition. The company remains dependent on raising additional capital through debt or equity financing to fund operations.

Management Comments

• Management acknowledges substantial doubt about the company's ability to continue as a going concern.
• Management believes the real estate market in Northern Baja California has fully recovered from the impact of Covid-19.
• Management expects the transfer of title for Valle Divino and Plaza Bajamar projects before the end of the second fiscal quarter of 2026.

Industry Context

StockSavvy.ai notes that the company operates in a highly fragmented and competitive Mexican real estate market, heavily influenced by foreign investment and the retirement sector. The company's reliance on speculative land development and high-cost debt financing is characteristic of smaller, distressed real estate entities in this region.

Comparison to Industry Standards

• The company's reliance on debt financing with high interest rates and convertible features is significantly more aggressive than standard industry practices for established real estate developers.
• The lack of an independent audit committee is below the governance standards expected of publicly traded companies.
• The company's reliance on related-party transactions for land acquisition and construction services presents a higher risk profile compared to industry peers.

Corporate Governance

Legal Proceedings

• CleanSpark, Inc. initiated a civil action against the company on April 8, 2025, alleging breach of a Securities Purchase Agreement.

Related Party Transactions

• Employment agreements with CEO Frank Ingrande, CFO Jason Sunstein, and Chairman Roberto Valdes.
• Funding and construction services provided by entities controlled by Chairman Roberto Valdes.
• Advances and accounting support provided by Lisa Landau, sister of the CFO.
• Marketing and sales support services provided by R-MAC Properties, owned by company Vice Presidents.

Stakeholder Impact

• Shareholders face significant dilution risk from potential future equity issuances and convertible debt conversions.
• Creditors face risks associated with the company's liquidity shortages and technical defaults on promissory notes.
• Employees and contractors are dependent on the company's ability to secure funding for ongoing projects.

Next Steps

• Continue marketing efforts to drive plot sales and house construction.
• Attempt to resolve the civil action initiated by CleanSpark, Inc.
• Work toward the transfer of title for the Valle Divino and Plaza Bajamar projects.
• Seek additional debt or equity financing to address the working capital deficit.

Key Dates

Recommendation

The company's financial position is precarious, with a massive accumulated deficit, recurring losses, and substantial doubt regarding its ability to continue as a going concern. The reliance on high-interest, dilutive debt and the lack of effective internal controls make this a high-risk investment.

Keywords

International Land Alliance, ILAL, Real Estate Development, Baja California, Rancho Costa Verde, Land Development, Mexico Real Estate, Penny Stock