10-K: Legend Spices Inc. Ceases Operations, Faces Going Concern Doubt

Legend Spices Inc. has discontinued its seasoning business and is exploring new opportunities, reporting minimal revenue and a significant net loss, raising substantial doubt about its ability to continue as a going concern.

Summary

• Legend Spices Inc. has ceased its historical seasoning production and marketing business in Armenia as of February 2025.
• The company is currently a shell company and is exploring new business opportunities and potential acquisition targets, with no new operations identified as of December 31, 2025.
• For the fiscal year ended December 31, 2025, the company generated minimal revenue of $644 and incurred a net loss of $18,787.
• As of December 31, 2025, the company had $0 cash, a working capital deficit of $17,525, and an accumulated deficit of $128,012 since inception.
• There is substantial doubt about the company's ability to continue as a going concern, dependent on securing additional financing or identifying viable new business operations.
• A change in control occurred on March 29, 2025, with Khachatur Mkrtchyan transferring his equity interests to Qihui Wang and a group of investors, and Mr. Mkrtchyan resigned from all officer and director positions.

Sentiment

Score: 2

Explanation: StockSavvy.ai views this filing as highly negative due to the company's cessation of operations, significant accumulated losses, and substantial doubt about its ability to continue as a going concern, despite a recent change in control.

Positives

• A change in control was successfully completed on March 29, 2025, bringing in new leadership with Qihui Wang as Chairman, President, CEO, CFO, and Principal Accounting Officer.
• The company has adopted an Insider Trading Policy and has certifications from its principal officers regarding compliance with Sarbanes-Oxley Act requirements.
• The company has a Code of Business Conduct and Ethics in place.

Negatives

• The company has ceased all historical operations and generated minimal revenue ($644) for the year ended December 31, 2025.
• A net loss of $18,787 was incurred for the year ended December 31, 2025, contributing to an accumulated deficit of $128,012 since inception.
• As of December 31, 2025, the company had no cash on hand and a working capital deficit of $17,525.
• There is substantial doubt about the company's ability to continue as a going concern.
• The company requires significant additional financing ($100,000 projected for the next 12 months) to fund operations and pursue new business opportunities.
• The company's senior management has no prior experience managing a public company.
• A material weakness in internal control over financial reporting was identified due to inadequate staffing and segregation of duties within accounting functions.
• The company's assets and director/officer are located outside the United States, potentially making it difficult for investors to enforce judgments.

Risks

• Substantial doubt exists about the company's ability to continue as a going concern due to minimal revenues, suspended operations, and accumulated losses.
• The company requires significant additional financing to pursue new business opportunities and cover operating expenses, with no assurance of obtaining such funds.
• The departure of former CEO Khachatur Mkrtchyan, who was instrumental in industry contacts in Armenia, introduces uncertainty regarding business relationships.
• Senior management has no prior experience managing a public company, potentially impacting compliance with securities laws and regulations.
• The company's limited operating history makes future results difficult to forecast, rendering any investment highly speculative.
• The company's common stock may face significant restrictions on resale due to penny stock regulations if the price remains below $5.00.
• There is no active trading market for the company's common stock, and there is no guarantee one will develop or be sustained.
• The company's internal controls are inadequate, with a material weakness identified in the segregation of duties within accounting functions, which could lead to unreliable financial reporting.

Future Outlook

The company is in the process of evaluating new business opportunities and potential acquisition targets. Management anticipates expenses to rise as marketing efforts increase to drive revenue growth. The company projects a need for approximately $100,000 in funding over the next 12 months to commence business operations as planned.

Management Comments

• "We require capital in order to pursue new business opportunities. Currently, we do not have available funds to explore new business initiatives or fund other operating and general and administrative expenses."
• "If we cannot secure additional financing, our ability to restart or launch new operations could be impaired by limitations on our access to capital."
• "The Board of Directors of the Company has appointed Ms. Qihui Wang (age 46) to succeed Mr. Mkrtchyan as Chairman, President, Chief Executive Officer, Principal Executive Officer, Principal Financial Officer, and Principal Accounting Officer, effective March 29, 2025. Ms. Wang brings over 20 years of senior management experience in financial and asset management, as well as human resources."
• "Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met."

Industry Context

StockSavvy.ai notes that Legend Spices Inc. is transitioning from a discontinued seasoning business to exploring new ventures, a common strategy for companies facing operational challenges or seeking new growth avenues. However, its current status as a shell company with no defined new business and significant financial distress places it in a high-risk category within the broader food and beverage or diversified industries.

Comparison to Industry Standards

• The company's revenue of $644 for the fiscal year 2025 is significantly below industry averages for even small-scale food product companies.
• The net loss of $18,787 and accumulated deficit of $128,012 indicate a severe lack of profitability, contrasting sharply with established companies in the spice and seasoning sector.
• The reliance on external financing and the projected need for $100,000 for future operations highlight a capital structure weakness compared to companies with stable revenue streams and access to credit lines.
• The identification of a material weakness in internal controls is a concern, as robust internal controls are standard for publicly traded companies to ensure reliable financial reporting and investor confidence.

Management Changes

Corporate Governance

Legal Proceedings

• The company is not involved in any pending legal proceedings, and to its knowledge, no governmental authority is contemplating any proceeding that would likely have a material adverse effect.

Related Party Transactions

• Khachatur Mkrtchyan, the former controlling shareholder, waived $69,717 of debt owed by the Company on March 31, 2025, which was recorded as a capital contribution.
• As of December 31, 2025, the Company had $15,725 payable to Qihui Wang for expenses she paid on behalf of the Company. This balance is non-interest bearing and payable on demand.

Stakeholder Impact

• Shareholders face significant risk of losing their investment due to the company's going concern issues and lack of defined future operations.
• Potential investors may be deterred by the lack of a public trading market, penny stock regulations, and the company's financial instability.
• Creditors and suppliers may face risks if the company cannot secure financing or generate revenue to meet its obligations.

Next Steps

• Explore new business opportunities and evaluate potential acquisition targets.
• Seek additional financing through share offerings and loans.
• Implement specific internal control mechanisms to improve effectiveness.
• Engage an outside consultant to assist in adopting new measures to improve internal controls.

Key Dates

Recommendation

The company has ceased operations, has no revenue, a significant accumulated deficit, and substantial doubt about its ability to continue as a going concern. While a change in control has occurred, the new management faces immense challenges with no clear path to profitability or operational stability. The need for significant capital raises and the lack of a developed trading market further increase the risk for investors.

Keywords

Shell company, Going concern, Change in control, New business opportunities, Financing, SEC reporting, Internal controls, Nevada corporation