10-Q: International Land Alliance Reports Q3 2025 Net Loss

Sentiment:

Quarterly Report 19 November 2025 4:21 PM

📋All filings for International Land Alliance INC

International Land Alliance, Inc. reported a significant net loss of $5.1 million for the nine months ended September 30, 2025, alongside a substantial working capital deficit, raising going concern doubts.

Delay expectedThe acquisition of title to the land for the Valle Divino project is subject to approval from the Mexican government, with no assurance of timely completion by fiscal year-end 2025.The Plaza Bajamar land purchase agreement has not yet closed as of September 30, 2025, with title transfer and the formation of a Mexican subsidiary still pending.The company has not yet established the required bank trust (fideicomiso) for Plaza Bajamar, which is anticipated to occur before the end of fiscal year 2025.Several convertible notes, including Mast Hill, Blue Lake, and Cobra, have passed their original maturity dates, with the company cooperating with lenders to avoid additional default terms.

Capital raiseThe company continues to raise additional capital through the issuance of debt instruments and equity to fund its ongoing operations.During the nine months ended September 30, 2025, the company issued multiple convertible promissory notes to various entities, including Quick Capital LLC (aggregate principal $436,666.67), Lendspark Corporation ($140,000), Vista Capital Investments, LLC (aggregate principal $220,000), Auctus Fund, LLC ($250,000), CFI Capital LLC ($150,000), Jefferson Street Capital, LLC ($137,500), and Crom Structured Opportunities Fund I, LP ($137,500).These capital raises often involved original issue discounts, broker fees, lender legal fees, and the issuance of warrants, indicating the cost and dilutive nature of securing financing.

Worse than expectedReported a net loss of $5.1 million for the nine months ended September 30, 2025, a significant deterioration from net income of $3.49 million in the prior year.Net revenues decreased by $5.25 million (73.7%) for the nine months ended September 30, 2025, indicating a substantial decline in core business performance.The company's working capital deficit grew to $14.3 million, highlighting severe liquidity issues.Net cash flows from operating activities reversed from a positive $741,721 in 2024 to a negative $1,201,790 in 2025.

Summary

Reported a net loss of $5,133,913 for the nine months ended September 30, 2025, a significant decline from net income of $3,492,250 in the same period of 2024.
Net revenues and lease income decreased substantially to $1,878,548 for the nine months ended September 30, 2025, from $7,134,240 in the prior year.
The company's current liabilities exceeded its current assets by approximately $14.3 million as of September 30, 2025, indicating a severe working capital deficit.
An accumulated deficit of approximately $29.3 million was reported as of September 30, 2025.
Management has determined that substantial doubt exists about the company's ability to continue as a going concern.
Operating expenses increased by $1,905,589 to $3,579,904 for the nine months ended September 30, 2025, primarily due to a large increase in stock-based compensation expenses.
Cash balance decreased slightly to $24,086 as of September 30, 2025, from $26,120 at December 31, 2024.
The company is involved in ongoing litigation with CleanSpark, Inc. alleging breach of a Securities Purchase Agreement.
Material weaknesses in internal control over financial reporting, identified in the previous annual report, continue to exist as of September 30, 2025.

Sentiment

Score: 2

Explanation: The company faces severe financial distress, evidenced by substantial net losses, a significant working capital deficit, and an accumulated deficit that raises serious 'going concern' doubts. Revenue has plummeted, and operating expenses have surged. The company relies heavily on dilutive debt and equity financing, while key projects face title transfer uncertainties and related-party issues. Persistent material weaknesses in internal controls and ongoing litigation further compound the negative sentiment, despite some positive market trends in its operating region.

Positives

The real estate market in Northern Baja California has significantly improved and fully recovered from the negative impact of Covid-19.
Housing prices continue to rise in the Southwest U.S., with low inventory, generating additional attraction from homebuyers seeking second homes or vacation homes.
The company is leveraging a partnership with a similar development company in the Baja California Norte Region of Mexico to enhance marketing and sales efforts.
The company assumed title of Oasis Park Resort in San Felipe during 2019 and has made significant progress on its development, including access roads and community entrance structures.

Negatives

Reported a net loss of $5,133,913 for the nine months ended September 30, 2025, a significant reversal from net income of $3,492,250 in the prior year.
Net revenues and lease income decreased by $5,255,692 (73.7%) for the nine months ended September 30, 2025, compared to the same period in 2024.
A substantial working capital deficit of approximately $14.3 million as of September 30, 2025, raises significant liquidity concerns.
The accumulated deficit grew to $29,280,871 as of September 30, 2025, from $24,146,956 at December 31, 2024.
Net cash flows used in operating activities amounted to $1,201,790 for the nine months ended September 30, 2025, compared to cash provided of $741,721 in the prior year.
Operating expenses increased significantly by $1,905,589 (113.8%) for the nine months ended September 30, 2025, primarily due to increased stock-based compensation.
The company fully impaired accumulated costs related to its Valle Divino ($457,275) and Plaza Bajamar ($179,700) projects due to uncertainty pertaining to title transfer.
No collections from house construction at the Plaza Bajamar project were recorded during the nine months ended September 30, 2025, despite $0.5 million previously collected.
Several promissory notes and convertible notes are in technical default or have passed their original maturity dates, potentially triggering higher default interest rates and immediate payment obligations.
Accrued compensation balances of $66,846 are owed to the CEO, CFO, and Chairman of the Board, with no salaries paid for the nine months ended September 30, 2025, and 2024.

Risks

Substantial doubt exists about the company's ability to continue as a going concern, dependent on generating revenues and raising capital.
Inability to secure additional funds through equity or debt financing on commercially reasonable terms could lead to curtailment of future operations.
Potential dilution of existing shareholders' holdings if additional capital is raised through equity issuance.
Uncertainty regarding the approval and transfer of title for the Valle Divino and Plaza Bajamar land projects from entities controlled by the chairman of the board.
Risk of significant fluctuations in the fair value of derivative liabilities due to changes in the company's stock price and market volatility.
Ongoing civil action initiated by CleanSpark, Inc. alleging breach of a Securities Purchase Agreement, which the company intends to vigorously defend.
Persistent material weaknesses in internal control over financial reporting, including inadequate accounting personnel and controls over transactions, could adversely affect financial reporting.
Reliance on management's estimates and assumptions in financial statements, which may differ materially and adversely from actual results.
Exposure to default interest rates and immediate payment obligations on various promissory and convertible notes that are past maturity or in technical default.
Dependence on the real estate market conditions in Northern Baja California and the Southwest U.S., which are subject to economic fluctuations.

Future Outlook

Management anticipates that capital resources will significantly improve if land plots gain wider market recognition and acceptance, leading to increased sales and house construction. The company expects expenses to continue increasing due to expanded operations, construction activity, and project development. It also anticipates generating increased revenues over the next twelve months from marketing plot sales and house construction. Management believes the transfer of title for the Valle Divino and Plaza Bajamar projects will be approved before the end of fiscal year 2025.

Management Comments

"Management anticipates that the Company's capital resources will significantly improve if its plots of land gain wider market recognition and acceptance resulting in increased plot sales and house construction."
"If the Company is not successful with its marketing efforts to increase sales, the Company will continue to experience a shortfall in cash, and it will be necessary to obtain funds through equity or debt financing in sufficient amounts or to further reduce its operating expenses in a manner to avoid the need to curtail its future operations subsequent to September 30, 2025."
"Management believes that the transfer of title to the land [Valle Divino] will be approved before the end of the Company fiscal year end 2025, there is no assurance that such transfer of title will be approved in that time frame or at all."

Industry Context

The real estate market in Northern Baja California has shown significant improvement and full recovery from the negative impact of Covid-19. Rising housing prices and severely low inventory in the Southwest U.S. are driving demand for second homes and vacation properties, which could benefit the company's projects in Baja California. The company is actively forming partnerships with similar development companies in the region to leverage resources and enhance marketing strategies, indicating a competitive yet collaborative industry landscape.

Comparison to Industry Standards

No specific comparable companies, projects, or global benchmarks were mentioned in the filing to assess results against industry standards.

Management Changes

Role	Previous Person	New Person	Effective Date	Reason
NA	NA	NA	NA	No changes in directors, officers, or key personnel were reported in the filing.

Corporate Governance

Change Type	Description	Effective Date	Impact Assessment
Internal Control Weaknesses	Material weaknesses in internal control over financial reporting persist, related to the lack of adequate accounting and finance personnel, inadequate controls over maintenance of records, and insufficient controls over the authorization, recognition, capture, and review of transactions.	As of September 30, 2025	These weaknesses are reasonably likely to adversely affect the company's ability to record, process, summarize, and report financial information accurately.
Equity Incentive Plan Approval	The 2024 Equity Incentive Plan was approved by the Board of Directors, reserving 15,000,000 shares of common stock for issuance.	2024-11-29	Enables the company to provide equity-based incentives to employees, directors, consultants, and service providers, potentially impacting future dilution.

Legal Proceedings

CleanSpark, Inc. initiated a civil action on April 8, 2025, against the company in the United States District Court for the Southern District of California (Civil Action No. 25CV829 RBMMSB).
CleanSpark alleges that the company breached the Securities Purchase Agreement dated October 31, 2019, related to the purchase of Series B Preferred Stock, and claims 34 events triggered pricing adjustments.
CleanSpark asserts claims for breach of contract and breach of the implied duty of good faith and fair dealing.
The company denies any liability or breaches of the Agreement and intends to vigorously defend the action.

Related Party Transactions

Accrued compensation of $66,846 is owed to CEO Frank Ingrande as of September 30, 2025, with no salary paid for the nine months ended September 30, 2025, and 2024.
Accrued compensation of $66,846 is owed to CFO Jason Sunstein as of September 30, 2025, with no salary paid for the nine months ended September 30, 2025, and 2024.
Accrued compensation of $66,846 is owed to Chairman of the Board Roberto Valdes as of September 30, 2025, with no salary paid for the nine months ended September 30, 2025, and 2024.
The company funded an aggregate of $1.4 million for construction on residential lots, project amenities, and land acquisition to companies controlled by Roberto Valdes.
Land for the Plaza Bajamar and Valle Divino projects is currently owned by entities (Valdeland S.A de C.V. and Valdetierra S.A de C.V.) controlled by Roberto Valdes.
Approximately $251,000 was funded to construction companies owned by Roberto Valdes for projects in Ensenada, Baja California.
A promissory note of $457,574 is owed to Lisa Landau, a relative of CFO Jason Sunstein, for advances for general corporate expenses and payments towards convertible notes. These advances are on demand and carry no interest.
Jason Sunstein is the managing member of Six Twenty Management LLC, an entity providing ongoing capital support to the company.

Stakeholder Impact

Shareholders face significant risk due to substantial net losses, a growing accumulated deficit, and explicit 'going concern' doubts, which could severely impact share value. Potential future equity raises may lead to further dilution.
Creditors and noteholders are exposed to increased risk, as several promissory and convertible notes are in default or past maturity, potentially triggering higher interest rates and immediate repayment demands. The company's reliance on new debt financing increases overall leverage.
Employees and management may be affected by the company's financial instability, as evidenced by accrued but unpaid salaries for key executives, potentially impacting morale and retention.
Customers and prospective homebuyers for projects like Valle Divino and Plaza Bajamar face uncertainty due to pending title transfers and project delays, which could erode confidence and impact sales.

Next Steps

Intensify research and marketing efforts to identify potential homebuyers in the United States, Canada, Europe, and Asia.
Leverage a partnership with a similar development company in Baja California Norte to enhance marketing and sales execution.
Complete the legal process for title transfer of Valle Divino and Plaza Bajamar, including establishing the necessary bank trust (fideicomiso).
Obtain additional funds through equity or debt financing to address liquidity shortages and fund ongoing operations.
Implement further reductions in operating expenses if marketing efforts do not sufficiently increase sales.
Vigorously defend against the civil action initiated by CleanSpark, Inc. regarding alleged breach of a Securities Purchase Agreement.

Key Dates

Date	Description
2013-09-26	Company incorporated under the laws of the State of Wyoming.
2018-03-19	Company issued a promissory note to CashCall, Inc. for $75,000.
2019-02-11	Board of Directors approved the 2019 Equity Incentive Plan (never approved by shareholders).
2019-09-01	Company executed a land purchase agreement with Valdeland, S.A. de C.V. for Plaza Bajamar.
2019-10-31	Date of Securities Purchase Agreement with CleanSpark, Inc. (subject of current litigation).
2019-11-01	$150,000 paid to Roberto Valdes for construction of two model Villas at Plaza Bajamar.
2019-12-01	$100,000 paid to Roberto Valdes as a down payment for Plaza Bajamar land acquisition.
2019-12-31	Company entered into a contract for deed agreement with IntegraGreen.
2020-01-01	Employment agreements became effective for Jason Sunstein and Roberto Valdes.
2020-08-26	Board of Directors approved the 2020 Equity Incentive Plan.
2020-12-15	Company entered into a promissory note with Christopher Elder for $126,477.
2021-05-31	Company acquired a 25% investment in Rancho Costa Verde Development LLC (RCVD).
2021-07-26	Company entered into a Warrant Purchase Agreement with Bigger Capital Fund, LP.
2022-03-23	Original due date for Mast Hill convertible note.
2022-03-28	Original due date for Blue Lake convertible note.
2022-08-02	Company and Cash Call settled for an aggregate principal of $23,641.
2022-12-01	Board of Directors approved the 2022 Equity Incentive Plan; stock options issued to Frank Ingrande, Jason Sunstein, and Roberto Valdes.
2023-01-01	Company executed a securities purchase agreement to acquire remaining 75% of RCVD.
2023-01-03	Company completed the acquisition of the remaining 75% interest in RCVD.
2023-08-11	Company entered into a promissory note with George Banker for $150,000.
2023-09-01	Company entered into a promissory note with George Robles for $100,000.
2023-09-02	Company authorized and issued Series C Preferred Stock to Bigger Capital Fund, LP.
2023-09-05	Company entered into a promissory note with Bobbie Allen Griffith for $215,000.
2023-10-11	Maturity date for George Banker promissory note (now in technical default).
2023-10-31	Company filed and adopted Certificate of Designations for Series D Convertible Preferred Stock.
2024-08-01	Company issued a convertible promissory note to Cobra for $125,000.
2024-09-30	Maturity date for IRED convertible promissory note (converted into Series A Preferred Shares).
2024-11-29	Board of Directors approved the 2024 Equity Incentive Plan.
2024-12-31	Company issued a convertible promissory note to Mast Emerald Grove for $2,780,000.
2025-02-28	Original maturity date for Cobra convertible note.
2025-03-11	Company issued Vista Capital Note #1 for $110,000.
2025-03-13	Company issued Quick Capital Note #1 for $250,000.
2025-03-31	3,000,000 options granted under the 2024 Plan.
2025-04-08	CleanSpark, Inc. initiated a civil action against the Company.
2025-06-10	Company issued Lendspark Corporation note for $140,000.
2025-06-12	Company entered into a Consulting Agreement with Lendspark.
2025-07-16	Company issued Quick Capital Note #2 for $155,555.56.
2025-07-29	Bigger Capital Fund, LP exercised 1,240,000 Warrants and converted Series C preferred stock.
2025-08-06	Company issued Auctus Fund note for $250,000.
2025-08-18	Company issued Quick Capital Note #3 for $31,111.11.
2025-09-12	Company issued Vista Capital Note #2 for $110,000.
2025-09-18	Company issued CFI Capital note for $150,000.
2025-09-24	Company issued Jefferson Street note for $137,500 and Crom Structured Fund note for $137,500.
2025-09-30	End of the quarterly reporting period.
2025-11-19	Date of filing of the Quarterly Report on Form 10-Q.
2025-12-13	Maturity date for Quick Capital Note #1.
2025-12-31	Anticipated establishment of bank trust for Plaza Bajamar and Valle Divino title transfer.
2026-03-11	Maturity date for Vista Capital Note #1.
2026-03-13	Maturity date for Lendspark Corporation note.
2026-04-16	Maturity date for Quick Capital Note #2.
2026-05-18	Maturity date for Quick Capital Note #3.
2026-08-06	Maturity date for Auctus Fund note.
2026-09-12	Maturity date for Vista Capital Note #2.
2026-09-18	Maturity date for CFI Capital note.
2026-09-24	Maturity date for Jefferson Street note and Crom Structured Fund note.
2026-10-01	Balloon payment due for IntegraGreen contract for deed.
2027-12-31	Maturity date for Mast Emerald Grove convertible note.

Recommendation

strong sell

The company's financial position is highly precarious, marked by a substantial net loss, a significant working capital deficit, and an explicit 'going concern' warning. Revenue has drastically declined, while operating expenses have surged. The reliance on high-cost, dilutive financing, coupled with critical project delays due to unresolved title issues involving related parties, presents severe operational and financial risks. Furthermore, persistent material weaknesses in internal controls and ongoing litigation with a former investor indicate fundamental governance and operational deficiencies. These factors collectively point to a high probability of continued financial deterioration and significant capital impairment for investors.

Keywords

Real Estate Development, Baja California, Mexico Property, Land Development, SEC 10-Q, Financial Reporting, Going Concern, Convertible Notes, Rancho Costa Verde, Oasis Park Resort, Valle Divino, Plaza Bajamar, Equity Incentive Plan, Litigation, Related Party Transactions

Disclaimer:The information provided here is for general informational purposes only and does not constitute financial advice, recommendation, or endorsement of any kind. It may contain errors or omissions. You should not rely on this information to make financial decisions. Always seek the advice of a qualified financial professional before making any investment or financial decisions. Use of this information is at your own risk.