10-K: Legend Spices Inc. Reports Minimal Revenue and Net Loss in 10-K Filing, Cites Going Concern Uncertainty

Legend Spices Inc.'s 10-K filing reveals minimal revenue, a net loss, and substantial doubt about its ability to continue as a going concern, alongside a significant change in company control.

Summary

• Legend Spices Inc., a Nevada-based company focused on producing and marketing seasonings, filed its Form 10-K for the fiscal year ended December 31, 2024.
• The company generated revenues of $6,924 and incurred a net loss of $31,073 for the year ended December 31, 2024.
• The company's independent auditor has raised substantial doubt about its ability to continue as a going concern.
• As of March 29, 2025, there was a significant change in the control of Legend Spices, Inc. with Ms. Qihui Wang succeeding Mr. Khachatur Mkrtchyan as Chairman, President, Chief Executive Officer, Principal Executive Officer, Principal Financial Officer, and Principal Accounting Officer.
• The company acknowledges a material weakness in its internal control over financial reporting due to insufficient segregation of duties within accounting functions.
• The company plans to raise capital through share offerings and loans from its director to fund operating expenditures.

Sentiment

Score: 3

Explanation: The sentiment is low due to the company's minimal revenue, net losses, going concern uncertainty, and material weakness in internal controls. The change in management adds further uncertainty.

Positives

• The company is working on a line of brochures and sales materials to assist marketing agents, retailers and in-store promotions.
• The company is committed to robust cybersecurity measures to protect data and systems.
• The company is taking steps to remedy the material weakness in internal controls.

Negatives

• The company has generated minimal revenues since its inception.
• The company has incurred operating losses since inception.
• The company's auditor has raised substantial doubt about its ability to continue as a going concern.
• The company has a working capital deficit of $68,047 as of December 31, 2024.
• The company acknowledges a material weakness in its internal control over financial reporting due to insufficient segregation of duties within accounting functions.
• The company's success depends heavily on the CEO, and the loss of Mr. Mkrtchyan may materially and adversely affect the company's business, results of operations, and financial condition.

Risks

• The company's ability to continue as a going concern is dependent on generating future profitable operations and obtaining necessary financing.
• The company is exposed to market risk from changes in foreign currency exchange rates.
• The company's business is subject to risks associated with sourcing and manufacturing in Armenia, including political and economic instability.
• The company needs to find distributors in Europe and North America for the long-term success of its product.
• The company's business is highly concentrated on a single, discretionary product category, food seasonings, making it vulnerable to changes in consumer preferences and economic conditions.
• The company's internal controls are inadequate, which could cause financial reporting to be unreliable and lead to misinformation being disseminated to the public.
• There is no active trading market for the company's common stock, and if a market does not develop, investors will be unable to sell their shares.

Future Outlook

Management anticipates expenses to rise over the foreseeable future as marketing expenses increase to boost revenues, and projects needing an additional $100,000 to fund operating expenditures for the next twelve-month period.

Management Comments

• The Board is confident that Ms. Wangs extensive experience and proven leadership capabilities will enable her to lead the Company effectively during this period of transition and beyond.

Industry Context

The seasonings and spices market is dominated by both foreign and domestic producers, with McCormick & Company, Inc. being a major player in North America. The European market is fragmented, with limited local production and reliance on imports.

Comparison to Industry Standards

• McCormick & Company, Inc. has over 160 million consumers in the United States in 2020 alone.
• Major competitors in the European industry are Saigon Hanoi Imexco Ltd., Doehler Group SE, Fuchs North America, Kerry Group PLC, and McCormick & Company Inc.
• Studies by Mordor Intelligence have deemed the European seasonings and spices market to be fragmented without too many dominant players.

Management Changes

Corporate Governance

Related Party Transactions

• As of December 31, 2024, the company owed $69,717 to its former director, Mr. Khachatur Mkrtchyan, for expenses paid on its behalf; this debt was waived in March 2025.

Stakeholder Impact

• Shareholders face the risk of dilution due to potential future issuances of common stock.
• Employees may experience uncertainty due to the change in management and the company's financial instability.
• Customers may be affected if the company is unable to maintain its operations and supply of seasonings.

Next Steps

• The company plans to raise capital through share offerings and loans from its director.
• The company intends to seek a market maker to file an application with FINRA to have its common stock quoted on the OTC Markets.
• The company is taking additional steps to remedy the material weakness in internal controls.

Key Dates

Keywords

Legend Spices, seasonings, spices, financial results, going concern, risk factors, internal control, Armenia, Caucasian cuisine, 10-K filing