10-Q: LFC Reports Q3 Net Income Amidst Revenue Dip
Quarterly Report
Lingerie Fighting Championships, Inc. reported a net income of $1.28 million for Q3 2025, a significant improvement from the prior year's loss, despite a decrease in nine-month revenue.
Summary
- Net income for the three months ended September 30, 2025, was $1,280,938, a significant improvement compared to a net loss of $770,144 for the same period in 2024.
- Net loss for the nine months ended September 30, 2025, was $364,777, substantially reduced from $1,610,579 for the same period in 2024.
- Revenue for the three months ended September 30, 2025, increased by 45% to $34,122 from $23,533 in 2024, primarily due to an increase in Meta advertising revenue.
- Revenue for the nine months ended September 30, 2025, decreased by 15% to $87,160 from $103,041 in 2024, attributed to lower advertising and sponsorship revenue.
- Cost of services for the three months increased by 1,063% to $145,425, mainly due to increased production and promotion costs for UK events in July 2025.
- The company incurred a gross loss of $111,303 for the three months and $81,979 for the nine months ended September 30, 2025, compared to gross profits in the prior year periods.
- A significant 'Other Income' of $1,511,281 for the three months and $46,755 for the nine months was recognized, primarily from a non-cash gain on the change in fair value of derivative liabilities due to a decrease in the company's stock price.
- Working capital deficiency increased to $6,244,531 as of September 30, 2025, from $5,933,668 as of December 31, 2024.
- Cash and cash equivalents increased to $79,819 as of September 30, 2025, from $2,193 as of December 31, 2024.
- The company invested $140,500 in digital assets (Bitcoin, Cronos, Ethereum, Doge) during the nine months ended September 30, 2025, and recorded an unrealized loss of $18,827 on these assets.
- Numerous promissory and convertible notes totaling $1,258,974 are in default as of September 30, 2025.
- Outstanding common stock increased to 5,361,510,636 shares as of November 10, 2025, from 4,504,844,036 shares as of December 31, 2024, partly due to warrant exercises and stock issued for services.
- Management has identified substantial doubt about the company's ability to continue as a going concern due to nominal revenues and sustained operating losses.
Sentiment
Score: 4
Explanation: While the company reported a net income for the quarter and reduced its nine-month loss, this was primarily driven by a non-cash gain from derivative liabilities due to a falling stock price. Operational performance shows increased costs and gross losses, and the company faces significant going concern issues and numerous defaulted debts, offset by some positive business development metrics like social media growth and new broadcasters.
Positives
- Reported a net income of $1,280,938 for the three months ended September 30, 2025, a significant turnaround from a $770,144 net loss in the prior year's comparable quarter.
- Reduced the net loss for the nine months ended September 30, 2025, to $364,777 from $1,610,579 in the prior year, indicating an improvement in overall financial performance.
- Q3 2025 revenue increased by 45% to $34,122, driven by an increase in Meta advertising revenue.
- Successfully held two events in the UK, including LFC43: Sindependence Day 2, which was the best-selling LFC event to date.
- Social media reach has grown significantly from under 1.5 million to over 3.5 million, indicating increased brand visibility and audience engagement.
- Added Maybacks Global, MMATV, and ToroTV to its list of broadcasters, expanding distribution channels.
- Uplisted to the newly created OTCID platform at OTC Markets, potentially enhancing market visibility and liquidity.
- Cash and cash equivalents increased substantially to $79,819 as of September 30, 2025, from $2,193 at December 31, 2024.
Negatives
- Nine-month revenue decreased by 15% to $87,160, primarily due to lower advertising and sponsorship revenue.
- Cost of services increased dramatically by 1,063% for Q3 and 141% for the nine months, leading to gross losses of $111,303 and $81,979, respectively.
- The company's working capital deficiency worsened to $6,244,531 as of September 30, 2025.
- An accumulated deficit of $11,535,572 indicates a history of losses.
- Numerous promissory and convertible notes totaling $1,258,974 are in default as of September 30, 2025.
- The net income for the quarter and reduced net loss for the nine months were primarily driven by a non-cash 'gain on change in fair value of derivative liabilities' ($1,511,281 for Q3), which is largely a result of a decrease in the company's stock price, rather than improved operational profitability.
- Significant dilution occurred with the issuance of 496,666,600 shares for warrant exercises and 360,000,000 shares for services during the nine months ended September 30, 2025.
- Incurred an unrealized loss of $18,827 on digital assets during the nine months ended September 30, 2025.
Risks
- Substantial doubt exists about the company's ability to continue as a going concern due to nominal revenues since inception and sustained operating losses.
- The company is dependent on obtaining additional investment capital to fund operating expenses, with no assurance of financial viability.
- Numerous promissory notes and convertible notes, totaling $1,258,974, are in default as of September 30, 2025, indicating significant financial distress and potential legal repercussions.
- Potential for significant future dilution of common stock due to outstanding convertible notes and warrants, as the number of authorized common shares is less than the dilutive shares.
- The company's stock price decrease, which contributed to a non-cash gain on derivative liabilities, suggests potential negative market perception or underlying business challenges.
Future Outlook
Management believes that the high costs incurred for UK events and a reality series are an investment for the company's long-term future, expecting these shows to 'pay dividends with increasing revenue and profit margin in the next three to six months and beyond.' The company intends to fund future operations through equity financing arrangements.
Management Comments
- "Management believes that LFCs unique content gives us a substantial competitive advantage to build the popularity of the league and the fighters."
- "The board of directors have indicated that when necessary, they will increase the shares to accommodate these shares [dilutive shares from convertible notes and warrants]."
- "The decrease in gross profit margin over nine months ended September 30 2025 was entirely due to high cost incurred on UK events and reality series shot. It was an investment for the Companys long-term future and have already seen tremendous results."
- "Since the two UK shows, the Company has seen its social media following increase from under 1.5 million to the current 3.5 million."
- "In addition to the increase in Meta revenues, the UK events successfully attracted a much larger audience, resulting in increased interest from broadcasters, investors and sponsors so the Company believe these shows will pay dividends with increasing revenue and profit margin in the next three to six months and beyond."
Industry Context
Lingerie Fighting Championships, Inc. operates in the sports entertainment sector, focusing on developing, producing, promoting, and distributing female wrestling and mixed martial arts (MMA) events. The company leverages live events, digital home video, broadcast television networks, video-on-demand, streaming platforms, and digital media channels. Recent strategic moves include expanding its social media presence to over 3.5 million followers, securing new broadcasting partners (Maybacks Global, MMATV, ToroTV), and exploring new revenue streams through potential sponsorships and a music act tour. The company's uplisting to the OTCID platform at OTC Markets reflects efforts to enhance its market presence and investor accessibility within the niche entertainment industry.
Corporate Governance
| Change Type | Description | Effective Date | Impact Assessment |
|---|---|---|---|
| Voting Control | The Chief Executive Officer holds 51 Series A preferred shares, granting approximately 51% of the total voting power and control over the board of directors. | 2016-09-03 | Concentrates significant control in the hands of the CEO, potentially limiting influence of common shareholders. |
| Share Authorization Policy | The board of directors has indicated they will increase the authorized number of common shares when necessary to accommodate dilutive shares from convertible notes and warrants. | NA | Suggests a proactive approach to manage potential dilution but also signals ongoing need for capital that may lead to further dilution. |
Related Party Transactions
- Accrued $30,000 of salary payable to the Director of the Company for the three months ended September 30, 2025.
- Accrued $90,000 of salary payable to the Director of the Company for the nine months ended September 30, 2025.
- Paid $7,000 owing to the Director of the Company for accrued salaries during the three months ended September 30, 2025.
- Paid $22,000 owing to the Director of the Company for accrued salaries during the nine months ended September 30, 2025.
- Total amount due to the related party (Director) was $811,628 as of September 30, 2025, compared to $743,628 as of December 31, 2024.
Stakeholder Impact
- Shareholders face significant dilution from warrant exercises and stock-based compensation, with potential for further dilution due to future equity financing needs and the board's intent to increase authorized shares. The stock price decrease, while leading to a non-cash gain on derivatives, indicates potential negative market sentiment.
- Creditors are exposed to high risk, as numerous promissory and convertible notes totaling $1,258,974 are in default, indicating potential for delayed or non-payment.
- Employees and consultants received stock-based compensation, and management salaries are being accrued, leading to a large related-party payable, which could impact cash flow for other operational needs.
- Customers and fans may benefit from continued production of live events, expanded broadcasting partnerships, and increased social media engagement, suggesting ongoing growth and accessibility of the LFC brand.
Next Steps
- Increase the popularity of the LFC league and brand by holding live events around the world.
- Promote athletes via a reality series and merchandise such as t-shirts and calendars.
- Continue discussions with several large potential sponsors.
- Work on a tour with a major music act.
- Raise additional funds through public or private placement offerings to fund future operations.
- The board of directors has indicated they will increase authorized shares when necessary to accommodate dilutive shares from convertible notes and warrants.
Key Dates
| Date | Description |
|---|---|
| 2016-09-03 | Company issued 51 Series A preferred shares to the Chief Executive Officer. |
| 2017-11-27 | Auctus Fund, LLC bought out two convertible promissory notes from Power Up Lending Group Ltd. for $50,774. |
| 2018-03-07 | Company entered into an agreement to issue a convertible promissory note of $30,000 to an unrelated party (Auctus #5). |
| 2018-07-09 | Company entered into an agreement to issue a convertible promissory note of $43,500 to an unrelated party (Auctus #6). |
| 2018-07-25 | Convertible promissory note (Auctus #6) was amended, increasing the principal to $48,500. |
| 2019-03-22 | Company entered into an agreement to issue a convertible promissory note of $62,500 to an unrelated party (Auctus #7). |
| 2019-10-23 | Company entered into an agreement to issue a convertible promissory note of $100,000 to an unrelated party (Auctus #8). |
| 2020-08-04 | Company entered into an agreement with Auctus Fund, LLC to issue a convertible promissory note of $31,000 (Auctus #9). |
| 2020-11-02 | Company entered into an agreement with Auctus Fund, LLC to issue a convertible promissory note of $225,000 (Auctus #10). |
| 2021-03-04 | Company entered into an agreement with Auctus Fund, LLC to issue a senior secured promissory note of $300,000 (Auctus #11). |
| 2021-12-06 | Company entered into an agreement with Auctus Fund, LLC to issue a senior secured promissory note of $40,000 (Auctus #12). |
| 2022-05-12 | Company entered into an agreement with Auctus Fund, LLC to issue a convertible promissory note of $52,000 (Auctus #13). |
| 2022-10-31 | Company entered into an agreement with Auctus Fund, LLC to issue a convertible promissory note of $18,520 (Auctus #14). |
| 2023-07-18 | Company entered into an agreement with Auctus Fund, LLC to issue a convertible promissory note of $86,444 (Auctus #15). |
| 2023-10-10 | Company entered into an agreement with Auctus Fund, LLC to issue a convertible promissory note of $62,000 (Auctus #16). |
| 2024-05-22 | Company entered into an agreement with Auctus Fund, LLC to issue a convertible promissory note of $101,000 (Auctus #17). |
| 2024-07-09 | Additional $16,500 was wired to the Company by the noteholder, amending the May 22, 2024 convertible note to $117,500. |
| 2024-09-03 | Company entered into an agreement with Auctus Fund, LLC to issue a convertible promissory note of $33,500 (Auctus #18). |
| 2024-12-13 | Company entered into an agreement with Auctus Fund, LLC to issue a convertible promissory note of $20,000 (Auctus #19). |
| 2025-01-01 | Company adopted ASU 2023-08, requiring crypto assets to be measured at fair value. |
| 2025-03-05 | Company entered into an agreement with Auctus Fund, LLC to issue a convertible promissory note of $50,222 (Auctus #20). |
| 2025-04-30 | Company entered into an agreement with Auctus Fund, LLC to issue a convertible promissory note of $100,000 (Auctus #21). |
| 2025-06-24 | Company entered into an agreement with Auctus Fund, LLC to issue a convertible promissory note of $100,000 (Auctus #22). |
| 2025-07-04 | LFC43: Sindependence Day 2 event held in London; broadcasting revenue of $50,000 commenced over 36 months. |
| 2025-08-18 | Company entered into an agreement with Auctus Fund, LLC to issue a convertible promissory note of $250,000 (Auctus #23). |
| 2025-09-12 | Company adopted ASU 2023-08 (Intangibles-Goodwill and Other-Crypto Assets). |
| 2025-09-30 | End of the quarterly reporting period. |
| 2025-11-10 | 5,361,510,636 shares of common stock issued and outstanding. |
| 2025-11-12 | Date of filing and certification of the 10-Q report. |
Recommendation
sellDespite reporting a net income for Q3 2025 and a reduced nine-month loss, these improvements are primarily driven by a non-cash gain on derivative liabilities resulting from a decrease in the company's stock price. Operational performance remains weak, with significant increases in cost of services leading to gross losses and a 15% decline in nine-month revenue. The company faces substantial doubt about its ability to continue as a going concern, has a growing working capital deficiency, and numerous promissory and convertible notes are in default. While there are positive developments in social media growth and new broadcasters, the fundamental financial health is precarious, and ongoing dilution from warrant exercises and future equity raises will likely further depress shareholder value. The high level of defaulted debt and reliance on non-operational gains for profitability signal significant underlying issues, making the stock a high-risk investment with a negative outlook.
Keywords
Lingerie Fighting Championships, LFC, MMA, sports entertainment, SEC filing, 10-Q, financial results, convertible notes, derivative liabilities, digital assets, cryptocurrency, going concern, stock dilution, revenue, operating loss, sponsorship, broadcasting
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