10-K: iWallet Reports Wider Losses, Going Concern Doubts Amid Product Redesign

Sentiment:

Annual Report 27 March 2026 10:42 AM

iWallet Corporation's annual report reveals a significant increase in net loss for 2025, zero revenue, and substantial doubt about its ability to continue as a going concern, despite progress in product redesign and future sales plans.

Delay expectedThe 2015 convertible debentures, which matured on April 30, 2017, are still in default, and the company is "currently negotiating with the remaining note holders to extend the notes, which is expected to be completed during the 2nd quarter of 2026."The 2018 convertible debenture, which matured on August 13, 2021, is also in default, and the company is "currently working with the holder on extending the due date of the Convertible Debenture, which is expected to be completed during the 2nd quarter 2026."The 2023 convertible debenture matured on August 10, 2024.

Capital raiseThe company is "currently seeking capital investment to allow us to produce additional working prototypes of the entire portfolio, and to move forward with sales forecasts and manufacturing agreements."Management has "plans to raise funds through public offering of its capital stock."The company anticipates capital requirements of $250,000 for the next 12 months, excluding revenue-related expenses and salaries, and states it "may seek to raise additional funding that we require in the form of equity financing from the sale of our common stock."

Worse than expectedNet loss significantly widened to $1,102,720 in 2025 from $108,091 in 2024.The company reported $0 revenue for both 2025 and 2024, indicating no operational sales.Cash balance dropped to $0 at year-end 2025.Negative working capital increased to $848,762.The independent auditor expressed "substantial doubt about the Company's ability to continue as a Going Concern."Disclosure controls and procedures were deemed "not effective," with material weaknesses identified.

Summary

iWallet Corporation reported a net loss of $1,102,720 for the year ended December 31, 2025, a substantial increase from $108,091 in 2024.
The company generated no revenue in both 2025 and 2024.
Operating expenses surged to $918,174 in 2025 from $65,739 in 2024, primarily due to $600,000 in stock-based compensation for the CEO in 2025.
As of December 31, 2025, iWallet had a cash balance of $0 and negative working capital of $848,762.
The company has an accumulated deficit of $6,692,589 as of December 31, 2025.
Management plans to begin taking pre-sales orders for its redesigned products (iWallet 2.0, iPassport, iClutch) in Q3 2026, with direct sales and deliveries starting in Q4 2026.
The company's independent auditors expressed substantial doubt about its ability to continue as a going concern.
Disclosure controls and procedures were deemed ineffective as of December 31, 2025, with material weaknesses identified in financial reporting accuracy and segregation of duties due to limited staff and non-independent directors.

Sentiment

Score: 2

Explanation: StockSavvy.ai views this as a highly negative report given the substantial increase in net losses, zero revenue, critical going concern warning, and ineffective internal controls, despite some progress in product development.

Positives

Successful redesign of products (iWallet 2.0, iPassport, iClutch) incorporating updated biometric security, RFID shielding, GPS tracking, titanium manufacturing, and PVD coating.
Identified two major contract manufacturers and new component suppliers, with partners 'standing by' to sign formal agreements.
Established sales channels in the past with luxury retailers like Neiman Marcus and Harrods, and prospective channels with Dufry, Touch of Modern, Skymall, Travelsmith, Hammacher Schlemmer, and tm:rw.
Expressed interest from automotive giants (General Motors, Mercedes-Benz, Porsche) for retailing products through dealership gift shops.
Pursuing co-branding agreements with high-end brands such as TravelPro, Montblanc, Ducati, Gucci, Bugatti, and Dunhill.
Working prototypes of iPassport and iClutch devices are available for demonstrations.

Negatives

Reported a significant net loss of $1,102,720 for the year ended December 31, 2025, a substantial increase from $108,091 in 2024.
Zero revenue generated in both 2025 and 2024, indicating no current operational sales.
Cash balance was $0 as of December 31, 2025, down from $2,437 in 2024.
Negative working capital of $848,762 as of December 31, 2025.
Accumulated deficit reached $6,692,589 as of December 31, 2025.
Substantial doubt about the company's ability to continue as a going concern due to recurring losses and negative cash flows.
Operating expenses increased significantly to $918,174 in 2025 from $65,739 in 2024, largely due to $600,000 in stock-based compensation for the CEO.
Several convertible debentures are in default, with maturity dates as far back as April 30, 2017, and August 13, 2021.
Disclosure controls and procedures were deemed ineffective as of December 31, 2025, with material weaknesses in financial reporting and segregation of duties.
The company has only one employee, the CEO, Steven Cabouli, which contributes to internal control weaknesses.
No independent directors, no standing committees, and no financial expert on the board.

Risks

Ability to raise capital necessary to sustain anticipated operations and implement the business plan.
Ability to implement the business plan effectively.
Ability to generate sufficient cash to survive.
Degree and nature of competition from better-capitalized luxury brands and niche competitors.
Lack of diversification of the business plan, focusing solely on personal security products.
General volatility of the capital markets and the establishment of a market for the company's shares.
Disruption in economic and financial conditions from global events and environmental weather conditions.
Potential failure to prevent or mitigate a cybersecurity incident, which could have a material adverse effect.
Reliance on external service providers for manufacturing and distribution.
Inability to maintain relationships with employees, customers, business partners, or governmental entities.
The company's penny stock status means the Private Securities Litigation Reform Act's safe harbor for forward-looking statements may not apply.

Future Outlook

iWallet Corporation intends to begin taking pre-sales orders for its redesigned biometric locking wallets and related personal security products (iWallet 2.0, iPassport, iClutch) in Q3 of 2026, with direct sales and deliveries commencing in Q4 of 2026. The company is actively seeking capital investment to produce additional working prototypes and finalize manufacturing agreements, with contract manufacturing partners ready to ramp up production based on predicted volumes. Management also expects to complete negotiations to extend several defaulted convertible notes during Q2 2026.

Management Comments

"We are currently focused on designing and developing biometric locking wallets and related physical, personal security products, and providing consulting services in connection with protective wallets and other personal security products."
"We see substantial growth potential in adjacent industries; for instance, automotive giants like General Motors, Mercedes-Benz, and Porsche have previously expressed interest in retailing iWallet products through their dealership gift shops."
"We are currently pursuing co-branding agreements with TravelPro, Montblanc, Ducati, Gucci, and Bugatti, as well as Dunhill, with which we have a successful prior relationship."
"We are currently seeking capital investment to allow us to produce additional working prototypes of the entire portfolio, and to move forward with sales forecasts and manufacturing agreements."
"Our contract manufacturing partners are standing by to sign formal agreements based on predicted volumes and begin ramping up full production lines."
"We intend to begin taking pre-sales orders for our products in Q3 of 2026, with direct sales and deliveries starting in Q4."
"Management has plans to raise funds through public offering of its capital stock."

Industry Context

StockSavvy.ai notes that iWallet Corporation operates in the niche but growing market of luxury personal security accessories, leveraging biometric and wireless technologies. While the company aims to compete with established luxury brands like Cartier and Gucci, and smaller tech-focused competitors such as Ekster and Nomad, its current lack of revenue and significant financial distress place it at a severe disadvantage. The strategy of pursuing co-branding and targeting high-traffic travel hubs aligns with luxury market trends, but execution is heavily dependent on securing substantial capital, a common challenge for early-stage tech companies in this space. The focus on advanced materials like titanium and PVD coatings, along with enhanced security features, positions iWallet to address increasing consumer concerns about identity and financial theft, a broader industry trend.

Comparison to Industry Standards

iWallet's zero revenue and significant net losses for 2025 and 2024 are substantially below industry standards for established luxury accessory or tech product companies, which typically demonstrate revenue growth and profitability or a clear path to it.
Compared to competitors like Ekster, Nomad, and Zitahli, which have existing product lines and sales, iWallet is still in the pre-revenue, product development, and capital-seeking phase, indicating a significant lag in market penetration and commercialization.
The company's market capitalization of approximately $1.1 million (as of June 30, 2025) is minuscule compared to luxury brands like Louis Vuitton (LVMH Moët Hennessy Louis Vuitton SE, market cap in hundreds of billions) or even smaller, successful tech accessory companies, highlighting its early stage and high-risk profile.
The reliance on a single CEO for all executive and board functions, coupled with identified material weaknesses in internal controls, falls short of corporate governance best practices seen in both public and well-funded private companies in the industry.

Corporate Governance

Change Type	Description	Effective Date	Impact Assessment
Internal Control Deficiency	Disclosure controls and procedures were deemed not effective as of December 31, 2025.	2025-12-31	Indicates a reasonable possibility that a material misstatement of financial statements will not be prevented or detected on a timely basis, impacting investor confidence and regulatory compliance.
Material Weakness	Lack of effective controls for ensuring the accuracy of reporting over significant account balances, including review, approval, and documentation of related transactions and account reconciliations.	2025-12-31	Increases the risk of financial misstatements and reduces the reliability of financial reporting.
Material Weakness	Lack of effective controls due to non-independent directors, leading to an inability to achieve proper segregation of duties.	2025-12-31	Creates a higher risk of fraud and error, as a single individual (CEO Steven Cabouli) holds multiple critical roles without independent oversight.
Board Structure	The company has no independent directors, no standing committees (audit, compensation, nominating, executive), and no financial expert on the Board of Directors.	Ongoing	Significantly weakens corporate oversight, increases governance risk, and may hinder effective decision-making and compliance.
Code of Ethics	The company intends to adopt a code of ethics but has not done so to date.	Future	Absence of a formal code of ethics may expose the company to ethical lapses and reputational damage.

Legal Proceedings

No pending or threatened lawsuits that could reasonably be expected to have a material effect on the company's results of operations as of December 31, 2025.

Related Party Transactions

As of December 31, 2025, the company owed Steven Cabouli (CEO, President, CFO, Secretary, Director) $14,406 for advanced funds for operations. This balance is non-interest bearing, unsecured, and due on demand.
During 2025, $124 in expenses were paid directly by a related party.
In 2025, Steven Cabouli received 20,000,000 shares of common stock valued at $600,000 as compensation for services.
In 2024, Steven Cabouli received 1,000,000 shares of Series B Preferred Stock valued at $16,971 as compensation for services.
Steven Cabouli is the sole owner of the 1,000,000 outstanding shares of Series B Preferred Stock, which carry voting rights equal to two times the number of votes of all other classes of outstanding voting stock.

Stakeholder Impact

Shareholders face significant dilution risk from future equity financing and stock-based compensation. The "going concern" warning indicates a high risk of investment loss. Lack of dividends and low stock price volatility on OTC Pink tier.
Creditors (Convertible Debenture Holders) face uncertainty regarding repayment due to defaulted debentures and the company's financial distress. Negotiations for extensions indicate potential further delays or restructuring.
Employees (CEO) Steven Cabouli, as the sole employee, has received substantial equity compensation but no cash salary, aligning his interests with stock performance but also exposing him to the company's financial risks.
Prospective Customers/Partners may be hesitant to engage due to the company's financial instability, lack of current sales, and "going concern" warning, despite product development efforts.
Suppliers may face payment delays or non-payment given the company's negative working capital and cash balance.

Next Steps

Produce additional working prototypes of the entire product portfolio (iWallet 2.0, iPassport, iClutch).
Move forward with sales forecasts and manufacturing agreements.
Sign formal agreements with contract manufacturing partners based on predicted volumes.
Begin ramping up full production lines.
Start taking pre-sales orders for products in Q3 2026.
Initiate direct sales and deliveries in Q4 2026.
Complete negotiations to extend the defaulted 2015 and 2018 convertible notes during Q2 2026.
Raise additional capital through equity financing, potentially a public offering.
Address material weaknesses in internal control over financial reporting, including improving accuracy of reporting and segregation of duties.
Adopt a written code of ethics in the near future.
Potentially establish a Compensation Committee upon hiring additional executives.

Key Dates

Date	Description
2009-11-18	iWallet Corporation incorporated in California as Queensridge Mining Resources, Inc.
2014-07-21	iWallet Corporation merged into a Nevada subsidiary, which then merged into Queensridge Mining Resources, Inc., with the company immediately changing its name to iWallet Corporation. Began trading on OTCQB Exchange.
2015-04-01	Issuance of first tranche of secured convertible debentures.
2015-09-01	Issuance of second tranche of secured convertible debentures.
2017-04-30	Original maturity date of 2015 convertible debentures (currently in default).
2018-08-13	Company entered into a secured convertible debenture agreement for $12,000.
2021-08-13	Maturity date of 2018 convertible debenture (currently in default).
2022-01-01	Company again became a publicly reporting company with the SEC.
2022-04-30	Extended maturity date of 2015 convertible debentures.
2023-05-24	Issued 20,000,000 shares of Common Stock to CEO for services rendered.
2023-07-07	Negotiated settlement of $252,500 of 2015 convertible debentures and $209,992 accrued interest for 7,644,000 shares of Series A Preferred Stock.
2023-08-10	Company entered into a secured convertible debenture agreement for $10,000.
2024-03-20	Issued 2,000,000 shares of common stock for conversion of $2,000 principal of a convertible note.
2024-03-22	Sold 1,000,000 shares of common stock for $5,000 in cash.
2024-08-10	Maturity date of 2023 convertible debenture.
2024-08-27	Sold 2,000,000 shares of common stock for $10,000 in cash.
2024-10-16	Issued 1,000,000 shares of Series B Preferred Stock to CEO for services rendered.
2025-04-21	Issued 5,000,000 shares of common stock for conversion of $20,000 principal and $553 accrued interest of a convertible note.
2025-06-30	Last business day of the most recently completed second fiscal quarter, aggregate market value of common stock held by non-affiliates was approximately $1,121,748.
2025-07-11	Issued 1,600,000 shares of common stock for conversion of $23,858 of accounts payable for a vendor.
2025-08-04	Issued 2,000,000 shares of common stock for conversion of $90,200 of accounts payable for a vendor.
2025-10-08	Issued 20,000,000 shares of Common Stock to CEO for services rendered.
2025-12-31	Fiscal year end for the annual report.
2026-03-26	Date of filing of the annual report and date of CEO/CFO certifications. Company had 106,419,419 outstanding shares of common stock.
2026-06-30	Expected completion of negotiations to extend 2015 and 2018 convertible notes (Q2 2026).
2026-07-01	Intended start of pre-sales orders for new products (Q3 2026).
2026-10-01	Intended start of direct sales and deliveries for new products (Q4 2026).

Recommendation

strong sell

The filing presents a dire financial picture with zero revenue, a significantly widened net loss, negative working capital, and a 'going concern' warning from auditors. The company's reliance on future capital raises, coupled with ineffective internal controls and a lack of independent governance, indicates extremely high operational and financial risk. While product development is underway, the path to commercialization and profitability is highly uncertain and distant. Seasoned investors would view this as a company struggling for survival, making it a strong sell due to the substantial risk of further value erosion and potential bankruptcy.

Keywords

biometric wallet, personal security products, iWallet, fintech, luxury accessories, RFID blocking, GPS tracking, wearable technology, startup, SEC filing, 10-K, going concern, capital raise, product development, corporate governance, small reporting company

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