10-K: Medicale Corp. 2025 10-K: No Operations, Mounting Deficit

Medicale Corp. reports no operations, a widening working capital deficit, and a going concern warning in its 2025 annual filing.

Summary

• Medicale Corp. has not commenced business operations and has not generated any revenue to date.
• The company reported a net loss of $41,153 for the fiscal year ended September 30, 2025, an improvement from a $58,213 net loss in 2024.
• Cash on hand was $0 as of September 30, 2025, down from $159 in 2024.
• The working capital deficiency significantly worsened to $33,652 in 2025 from $15,348 in 2024.
• The accumulated deficit increased to $216,998 as of September 30, 2025.
• The company relies on convertible notes for financing, raising $22,849 in 2025 and $83,585 in 2024.
• Management has identified substantial doubt about the company's ability to continue as a going concern.
• The company plans to offer consulting services and distribute dietary supplements but has not yet started these operations.
• Disclosure controls and procedures were deemed ineffective, and material weaknesses in internal control over financial reporting were identified.

Sentiment

Score: 1

Explanation: The company has no operations, no revenue, zero cash, a worsening working capital deficit, and explicitly states a "going concern" doubt. Significant internal control weaknesses and governance issues further compound the negative outlook.

Positives

• Net loss decreased by 29% to $41,153 in 2025 from $58,213 in 2024, primarily due to a decrease in consulting fees.
• Cash flows used in operating activities improved by 72% to $23,008 in 2025 from $83,585 in 2024.
• No material cybersecurity incidents identified as of September 30, 2025.
• Not currently a party to any legal proceedings.

Negatives

• No revenue generated from business operations to date.
• Company operates at a loss and expects to continue doing so.
• Cash on hand is $0 as of September 30, 2025.
• Working capital deficiency worsened by 117% to $33,652 in 2025 from $15,348 in 2024.
• Current liabilities increased by 117% to $33,652 in 2025 from $15,507 in 2024, driven by accounts payable, accrued liabilities, and accrued interest payable.
• Accumulated deficit increased to $216,998 as of September 30, 2025.
• Substantial doubt about the company's ability to continue as a going concern.
• Disclosure controls and procedures were ineffective.
• Material weaknesses in internal control over financial reporting due to insufficient resources, inadequate segregation of duties, and lack of an Audit Committee and outside directors.
• No employees; officers and directors furnish time at no cost, indicating limited operational capacity.
• No Code of Ethics or insider trading policies.
• A $159 bad debt expense was incurred due to the inability to recover funds from a bank account registered under a former director.

Risks

• Inability to generate revenue or achieve market acceptance for proposed business operations and products.
• Inherent problems, expenses, delays, and risks of a new business enterprise, including limited capital resources, changes in consumer interest, and cost overruns.
• Substantial doubt about the company's ability to continue as a going concern due to recurring losses and lack of stabilized revenue.
• Dependence on additional investment capital to fund operating expenses.
• Risk of having to modify, delay, or abandon future business plans if positive cash flow is not generated or additional financing is not obtained.
• Limited public market for common shares, thin trading, and wide fluctuations in trading prices.
• Securities quoted on Pink Sheets are not listed on organized exchanges and are typically for smaller companies that do not meet listing requirements.
• Ineffective disclosure controls and procedures, increasing the risk of material information not being accumulated, communicated, or reported timely.
• Material weaknesses in internal control over financial reporting, including insufficient personnel with finance and accounting expertise, inadequate segregation of duties, and lack of an Audit Committee and outside directors, which could lead to material misstatements.
• Usage of Net Operating Losses (NOLs) is subject to annual limitations following greater than 50% ownership changes (Section 382 of the U.S. Internal Revenue Code).
• Tax returns for the years ended 2020 through 2025 are subject to review by tax authorities.

Future Outlook

Management anticipates that the company will be dependent on additional investment capital to fund operating expenses for the near future and intends to position itself to raise additional funds through the capital markets. The company plans to offer consulting services and distribute dietary supplements, but has not yet commenced these operations.

Management Comments

• "As of the date of this report, the Company had not yet commenced any operations. All activity through the date of this report relates to preserving cash, attempting to raise capital, and continuing the Companys public reporting."
• "We believe that its existing capital resources may not be adequate to enable it to continue as a going concern."
• "Management anticipates that the Company will be dependent, for the near future, on additional investment capital to fund operating expenses."
• "The Company intends to position itself so that it will be able to raise additional funds through the capital markets."
• "Management is committed to improving its internal controls and will (1) continue to use third party specialists to address shortfalls in staffing and to assist the Company with accounting and finance responsibilities, (2) increase the frequency of independent reconciliations of significant accounts which will mitigate the lack of segregation of duties until there are sufficient personnel and (3) may consider appointing outside directors and audit committee members in the future."

Industry Context

Medicale Corp. operates as a pre-revenue startup in the consulting and dietary supplement distribution sectors. Its current state of no operations, significant accumulated deficit, and reliance on convertible debt for basic reporting functions places it far behind established players and even many early-stage ventures that have begun generating revenue or demonstrating product viability. The dietary supplement market is competitive, requiring substantial capital for product development, marketing, and regulatory compliance, none of which the company has yet undertaken. Its challenges are typical of highly speculative micro-cap companies struggling to secure initial funding and establish a viable business model.

Comparison to Industry Standards

• The company's status of having "not yet commenced any operations" and generating "no revenue" is significantly below industry standards for even early-stage companies, which typically aim to demonstrate proof-of-concept or initial market traction.
• A working capital deficiency of $33,652 and cash of $0 are indicative of severe liquidity issues, far below the healthy liquidity ratios expected for operational businesses or even well-funded startups.
• The reliance solely on convertible notes for financing operating expenses, without any equity raise or revenue generation, is a red flag compared to more robust funding strategies seen in successful startups.
• The identified material weaknesses in internal controls (insufficient resources, inadequate segregation of duties, lack of an audit committee) fall short of corporate governance best practices, even for smaller reporting companies.
• The absence of a Code of Ethics and insider trading policies is a governance deficiency compared to most publicly traded companies, regardless of size.

Management Changes

Corporate Governance

Legal Proceedings

• Not currently a party to any legal proceedings.
• Not aware of any pending or potential legal actions.

Related Party Transactions

• The principal place of business is provided rent-free by the sole officer and director, Chen Zu De.

Stakeholder Impact

• Shareholders: Significant risk of investment loss due to no operations, recurring losses, going concern doubt, and potential dilution from future capital raises (convertible notes). The limited public market and Pink Sheet listing also pose liquidity risks.
• Creditors (Convertible Note Holders): High risk of default given the company's financial distress, zero cash, and going concern warning. Conversion terms may offer some recovery potential, but the underlying value is questionable.
• Employees: Currently no employees, so no direct impact.
• Customers/Suppliers: No current operations mean no direct impact on customers or suppliers. Potential future customers/suppliers face uncertainty regarding the company's viability.

Next Steps

• Attempt to raise additional capital through the capital markets.
• Position itself to generate positive cash flow.
• Modify, delay, or abandon some or all future business plans if financing is not secured.
• Continue to use third-party specialists for accounting and finance.
• Increase frequency of independent reconciliations of significant accounts.
• Consider appointing outside directors and audit committee members in the future.
• Commence planned business operations in consulting services and dietary supplement distribution.

Key Dates

Recommendation

Medicale Corp. presents an extremely high-risk investment profile. The company has no current operations, generates no revenue, and has zero cash on its balance sheet. It operates with a significant and worsening working capital deficiency and an accumulated deficit, leading to explicit 'substantial doubt about its ability to continue as a going concern' from both management and auditors. Furthermore, the company exhibits severe corporate governance deficiencies, including ineffective internal controls, lack of an audit committee, no code of ethics, and no insider trading policies. While the net loss decreased, this is primarily due to reduced operating expenses rather than improved business performance. The company's reliance on convertible notes for survival, coupled with its Pink Sheet listing, indicates a highly speculative and distressed entity. Investors face a near-certain risk of capital loss, making a strong sell recommendation appropriate.

Keywords

Medicale Corp, MCLE, 10-K, Annual Report, Going Concern, Net Loss, Working Capital Deficiency, Convertible Notes, Capital Raise, Startup, Dietary Supplements, Consulting Services, SEC Filing, Financial Reporting, Internal Controls, Corporate Governance