10-Q: LiquidValue Development Inc. Reports Net Loss for Q1 2025 Amid Revenue Decline

LiquidValue Development Inc. experienced a net loss in Q1 2025 due to a significant decrease in revenue following the sale of remaining properties in the Lakes at Black Oak and Alset Villas projects in 2024.

Summary

• LiquidValue Development Inc. reported a net loss of $718,315 for the three months ended March 31, 2025, compared to a net income of $1,095,784 for the same period in 2024.
• Revenue decreased significantly from $5,045,402 in Q1 2024 to $11,209 in Q1 2025, primarily due to the sale of remaining properties in the Lakes at Black Oak and Alset Villas projects in 2024.
• General and administrative expenses increased to $1,089,779 in Q1 2025 from $310,757 in Q1 2024, driven by higher professional fees and salaries, including a $450,000 repayment to a purchaser due to an overpayment.
• The company's real estate assets decreased slightly to $610,867 as of March 31, 2025, from $615,495 as of December 31, 2024.
• Total assets decreased to $38,108,615 as of March 31, 2025, from $38,792,674 as of December 31, 2024.
• Cash and restricted cash increased to $3,088,844 as of March 31, 2025, from $2,870,809 at the beginning of the period.
• The company expects to collect approximately $8 million in developer reimbursements within the next twelve months.
• Alset Inc. has committed to provide additional funding if required and will not demand repayment for the next twelve months.

Sentiment

Score: 3

Explanation: The sentiment is negative due to the significant revenue decline, net loss, and dependence on external funding. The company's future is uncertain without new revenue-generating projects.

Positives

• The company's cash and restricted cash increased by $218,035 during the quarter.
• The company expects to receive $8 million in developer reimbursements within the next twelve months.
• Alset Inc. has committed to provide financial support and will not demand repayment for the next twelve months.

Negatives

• The company experienced a significant net loss of $718,315 in Q1 2025.
• Revenue decreased drastically due to the completion of property sales in 2024.
• General and administrative expenses increased significantly, including a $450,000 repayment.
• The company sold the remainder of its lots during 2024, leaving no significant revenue-generating assets to fund ongoing operations.

Risks

• The company's ability to continue as a going concern is dependent on expected cash flow from reimbursements and ongoing financial support from Alset Inc.
• The company's disclosure controls and procedures are not effective to ensure that information required to be disclosed is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commissions (SECs) rules and forms.
• The company's disclosure controls and procedures are not effective to ensure that information required to be disclosed is accumulated and communicated to our management, including our Chief Executive Officers and Chief Financial Officers, as appropriate to allow timely decisions regarding required disclosure.

Future Outlook

The company's future outlook is dependent on receiving developer reimbursements and continued financial support from Alset Inc.

Management Comments

• Management intends to procure a new tenant to occupy the premises, after the office used for real estate sales is converted back to a garage.

Industry Context

Given the company's focus on land development and residential properties, the results are indicative of the challenges faced by smaller developers when projects conclude and new projects are not immediately available to generate revenue.

Comparison to Industry Standards

• Without specific comparable companies provided, it's difficult to benchmark LiquidValue Development's performance against industry standards.
• However, the significant revenue drop and net loss suggest underperformance compared to peers who maintain a consistent pipeline of projects.
• Companies like D.R. Horton or Lennar, which are large national homebuilders, maintain diversified operations and a continuous flow of projects, mitigating the risk of such drastic revenue declines.

Related Party Transactions

• The company receives advances from or loans funds to SeD Intelligent Home, the owner of 99.99 % of the Company.
• MacKenzie Equity Partners, LLC, an entity owned by Charles MacKenzie, a Director of the Company, has a consulting agreement with a majority-owned subsidiary of the Company.
• The Company received a promissory note from Alset Inc. in the amount of $11,350,933 in relation to the sale of its rental business in 2023.

Stakeholder Impact

• Shareholders are negatively impacted by the net loss and revenue decline.
• Employees may face uncertainty due to the company's financial situation.
• The company's ability to invest in new projects and create value for stakeholders is limited by its current financial condition.

Next Steps

• The company intends to procure a new tenant for the model house after converting the office back to a garage.
• The company expects to collect approximately $8 million in developer reimbursements within the next twelve months.

Key Dates

Keywords

LiquidValue Development, Real Estate, Financial Results, Net Loss, Revenue Decline, Alset Inc., Land Development, Q1 2025