10-Q: Miami Breeze Car Care Q3 Loss Widens Amid Gin City Acquisition

Miami Breeze Car Care Inc. reported a significantly increased net loss for Q3 2025, driven by the acquisition of Gin City Group, Inc., despite a substantial rise in revenue.

Summary

• Net loss for the nine months ended September 30, 2025, increased to $1,004,808 from $334,979 in the prior year.
• Sales for the nine months ended September 30, 2025, surged to $662,907 from $5,897, primarily due to the acquisition of Gin City Group, Inc.
• Operating expenses for the nine months ended September 30, 2025, rose to $1,198,158 from $337,707, largely due to increased advertising, professional fees, and general and administrative costs associated with the acquisition.
• The company's cash position improved significantly to $613,060 as of September 30, 2025, from $3,743 at December 31, 2024, primarily from financing activities.
• Working capital improved to a surplus of $905,506 as of September 30, 2025, from a deficit of $136,026 at December 31, 2024.
• The company acquired 100% ownership of Gin City Group, Inc. and its subsidiary Gincity GmbH on February 28, 2025, which operates a bar in Munich, Germany, and sells liquor products.
• Management identified material weaknesses in internal control over financial reporting, including insufficient skilled accounting personnel and a lack of adequate segregation of duties.
• The company's auditors issued a going concern opinion, indicating substantial doubt about its ability to continue operations for the next twelve months without additional capital.

Sentiment

Score: 3

Explanation: While the company achieved substantial revenue growth and raised significant capital, these positives are overshadowed by a widening net loss, increased cash burn from operations, a going concern warning, and identified material weaknesses in internal controls. The strategic shift into a new industry also presents integration and execution risks.

Positives

• Significant increase in sales to $662,907 for the nine months ended September 30, 2025, compared to $5,897 in the prior year, driven by the Gin City acquisition.
• Gross profit increased to $153,907 for the nine months ended September 30, 2025, from $3,194 in the prior year.
• Cash balance significantly improved to $613,060 as of September 30, 2025, from $3,743 at December 31, 2024.
• Working capital shifted from a deficit of $136,026 at December 31, 2024, to a surplus of $905,506 at September 30, 2025.
• Successful capital raises through common stock sales, generating $1,940,812 in proceeds for the nine months ended September 30, 2025.
• Recorded a gain on extinguishment of debt of $104,825 from a related party.

Negatives

• Net loss significantly increased to $1,004,808 for the nine months ended September 30, 2025, from $334,979 in the prior year.
• Operating expenses surged by 254.8% to $1,198,158 for the nine months ended September 30, 2025, primarily due to increased professional fees, advertising, and general and administrative costs.
• Net cash used in operating activities increased substantially to $1,560,879 for the nine months ended September 30, 2025, from $174,141 in the prior year.
• Accumulated deficit grew to $4,863,957 as of September 30, 2025, from $3,859,149 at December 31, 2024.
• The company's auditors issued a going concern opinion, indicating substantial doubt about its ability to continue operations.
• Disclosure controls and procedures were deemed ineffective due to material weaknesses, including insufficient skilled accounting personnel and lack of segregation of duties.

Risks

• Ability to obtain additional funds for operations.
• Reliance on third-party distributors and manufacturers.
• Initiation, timing, progress, and results of research and development programs.
• Dependence on current and future collaborators for developing new products.
• Rate and degree of market acceptance of products.
• Implementation of business model and strategic plans.
• Estimates of expenses, losses, future revenue, and capital requirements, including needs for additional financing.
• Reliance on third-party suppliers for materials and components.
• Ability to attract and retain qualified key management and technical personnel.
• Financial performance.
• Impact of government regulation and developments relating to competitors or the industry.
• Substantial doubt about the ability to continue as a going concern for a period of twelve months from the issuance date of the report.
• Inability to raise additional capital or secure additional lending in the near future, potentially leading to curtailment of operations.
• Ineffective disclosure controls and procedures due to material weaknesses (insufficient skilled accounting personnel, lack of segregation of duties).
• Risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting due to inherent limitations.
• Potential for adverse results from various lawsuits and legal proceedings that arise in the ordinary course of business.

Future Outlook

The company's cash resources as of September 30, 2025, are insufficient to execute its business plan for the next 12 months. Management expects to need additional debt and/or equity financing to fund future operations. Failure to secure additional capital or achieve profitable operations will necessitate curtailing planned marketing and advertising campaigns, negatively impacting the business.

Management Comments

• "Our cash resources as of September 30, 2025 will not be sufficient for us to execute our business plan."
• "If we do not generate sufficient cash from our intended financing activities and sales, or if our planned digital campaigns were to fail, we will be unable to execute on projected operations for the next 12 months."
• "In that event, we will be forced to cut down on our planned marketing and advertising campaigns, which will negatively affect our business, results of operations and financial condition."
• "Management cannot provide assurance that we will ultimately achieve profitable operations or become cash flow positive or raise additional debt and/or equity capital."
• "If we are unable to raise additional capital or secure additional lending in the near future, management expects we will need to curtail its operations."
• "Our management, with the participation of our principal executive officer and principal financial officer, concluded that as of September 30, 2025, our disclosure controls and procedures were not effective."
• "The ineffectiveness of our disclosure controls and procedures was due to material weaknesses, which we identified in our report on internal control over financial reporting."
• "We do not have sufficient and skilled accounting personnel with an appropriate level of technical accounting knowledge and experience in the application of accounting principles generally accepted in the United States commensurate with our financial reporting requirements."
• "A lack of adequate segregation of duties as a result of our limited financial resources to support hiring of personnel."

Industry Context

The company is diversifying its business from automotive care products into the adult beverage and hospitality sector through the acquisition of Gin City Group, Inc. This move represents a significant strategic shift, entering a new market with different dynamics and competitive landscapes. The automotive care segment appears to be minimal in terms of sales contribution compared to the newly acquired Gin City segment, which now drives substantially all sales. The expansion into the European beverage market, particularly with a physical bar operation in Munich, suggests a direct consumer engagement model alongside product distribution.

Comparison to Industry Standards

• NA

Management Changes

Corporate Governance

Legal Proceedings

• No pending or threatened legal proceedings that are expected to have a material adverse effect on financial condition, results of operations, or cash flows were reported.

Related Party Transactions

• Professional fees paid to GH Bill (company owned by former CEO) of $55,500 for the three months ended September 30, 2025, and $219,997 for the nine months ended September 30, 2025.
• Debt settlement agreement with GH Bill on September 9, 2025, where GH Bill settled $104,825 due from Gin City Group, resulting in a gain on extinguishment of debt.
• Consulting fees of $2,333 for the three months ended September 30, 2025, and $6,805 for the nine months ended September 30, 2025, incurred to the former owner of Gin City Group, Inc. (beneficial shareholder).
• Return of 20,000,000 common shares to treasury stock by Firaz Ruecker and Lance Ruecker (Related Party Shareholders) on October 24, 2024, without compensation.
• Harald Gietmann, a director and officer, acquired 100% of the Series A Preferred Stock, granting him 65% of all voting rights.

Stakeholder Impact

• Shareholders: Potential for significant dilution from future equity capital raises. The going concern warning and internal control weaknesses pose risks to investment value. The concentration of voting power with Series A Preferred Stockholders (Harald Gietmann) could limit influence of common shareholders.
• Employees: Uncertainty regarding future operations if additional capital is not secured, potentially leading to curtailment of operations.
• Customers: Continued operation of the Gin City bar and availability of car care products are dependent on the company's financial stability.
• Creditors: The going concern warning and accumulated deficit indicate increased risk for creditors.
• Suppliers: Potential impact on payment terms or future orders if operations are curtailed.

Next Steps

• Raise additional debt and/or equity financing to fund operations.
• Address material weaknesses in internal control over financial reporting, including hiring sufficient skilled accounting personnel and improving segregation of duties.
• Execute planned marketing and advertising campaigns, contingent on securing sufficient funding.
• Continue development and distribution of automotive care products.
• Continue operation of the Gin City bar and sale of Gin City branded liquor products.

Key Dates

Recommendation

The company faces severe financial distress, evidenced by a widening net loss, substantial cash burn from operations, and an explicit "going concern" warning from its auditors. While revenue growth is significant, it's primarily acquisition-driven and has not translated into profitability. The identified material weaknesses in internal controls raise serious concerns about financial reporting reliability. The need for further capital raises, coupled with the existing accumulated deficit and the risk of dilution, makes the investment highly speculative and risky. The concentration of voting power with a single Series A Preferred Stockholder also presents governance concerns.

Keywords

Car Care Products, Gin Bar, Beverage Distribution, SEC 10-Q, Quarterly Report, Financial Performance, Acquisition, Going Concern, Internal Controls, Capital Raise, Miami Breeze Car Care, Gin City Group, Gincity GmbH, Automotive Care, Alcoholic Beverages