10-Q: Miami Breeze Car Care Reports Increased Losses Amid Acquisition

Miami Breeze Car Care Inc. reported a significant increase in net loss and cash used in operations for Q2 2025, despite substantial revenue growth driven by the acquisition of Gin City Group.

Summary

• Miami Breeze Car Care Inc. (the Company) reported a net loss of $359,319 for the six months ended June 30, 2025, an increase from $223,916 for the same period in 2024.
• Cash used in operating activities significantly increased to $592,340 for the six months ended June 30, 2025, compared to $139,406 in the prior year period.
• The Company completed the acquisition of 100% ownership of Gin City Group, Inc. and its subsidiary Gincity GmbH on February 28, 2025, which operates a bar in Munich, Germany.
• Total sales for the six months ended June 30, 2025, surged to $322,890 from $3,952 in 2024, primarily due to the Gin City acquisition.
• Gross profit also increased substantially to $130,668 for the six months ended June 30, 2025, up from $2,042 in the prior year.
• Operating expenses rose to $510,783 for the six months ended June 30, 2025, from $225,260 in 2024, driven by increased advertising, professional fees, and general and administrative costs related to the acquisition.
• The Company's auditors issued a going concern opinion, citing substantial doubt about its ability to continue operations for the next twelve months without additional capital.
• 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 raised $263,482 in cash and a $35,173 subscription receivable (collected in July 2025) through private placement subscription agreements during Q2 2025.
• Subsequent to the reporting period, in July 2025, the Company sold an additional 996,490 shares for cash proceeds of $1,369,735.

Sentiment

Score: 3

Explanation: The sentiment is negative due to increasing net losses, significant cash burn from operations, and an explicit going concern warning from auditors. While revenue growth from the acquisition is positive, it has not translated into profitability or positive operating cash flow, and the identified material weaknesses in internal controls add to the concern. The need for continuous capital raises to sustain operations further underscores the precarious financial position.

Positives

• Total sales for the six months ended June 30, 2025, increased significantly to $322,890 from $3,952 in the prior year, primarily due to the acquisition of Gin City Group.
• Gross profit for the six months ended June 30, 2025, rose to $130,668 from $2,042 in the prior year, reflecting the revenue growth from the acquisition.
• The working capital deficit improved to $(65,901) as of June 30, 2025, from $(136,026) as of December 31, 2024.
• Cash balance increased to $253,241 as of June 30, 2025, from $3,743 as of December 31, 2024.
• The Company successfully raised $263,482 in cash during Q2 2025 and an additional $1,369,735 in July 2025 through private placement subscription agreements.

Negatives

• Net loss increased to $359,319 for the six months ended June 30, 2025, from $223,916 in the comparable prior year period.
• Net cash used in operating activities significantly increased to $592,340 for the six months ended June 30, 2025, compared to $139,406 in the prior year, indicating higher cash burn.
• Operating expenses increased by 126.7% to $510,783 for the six months ended June 30, 2025, primarily due to the acquisition and associated costs.
• The Company has an accumulated deficit of $4,218,468 as of June 30, 2025, up from $3,859,149 as of December 31, 2024.
• The Company's cash resources of approximately $253,000 as of June 30, 2025, are insufficient to cover the estimated $870,000 in projected expenses for the next 12 months.

Risks

• Substantial doubt exists about the Company's ability to continue as a going concern for a period of twelve months from the issuance date of this report, as indicated by net losses, negative operating cash flows, and an accumulated deficit.
• The Company's ability to obtain additional funds for its operations through debt and/or equity financing is uncertain, and there is no assurance it will be able to continue to do so.
• Material weaknesses in internal control over financial reporting were identified, including insufficient skilled accounting personnel and a lack of adequate segregation of duties, which could lead to material misstatements.
• Reliance on third-party distributors and manufacturers for automotive care products, and third-party suppliers for materials and components, poses operational risks.
• The Company's business model and strategic plans, including the rate and degree of market acceptance of its products, are subject to uncertainties.
• The impact of government regulation and developments relating to competitors or the industry could adversely affect financial performance.
• If planned digital marketing campaigns fail, the Company will be unable to execute projected operations for the next 12 months, potentially forcing cuts in marketing and advertising.

Future Outlook

The Company intends to grow production and sales over the next 12 months by placing sponsored ads on Amazon.com, Facebook, and other digital media platforms to increase product awareness. However, current cash resources of $253,000 are insufficient to cover the estimated $870,000 in projected expenses for the next 12 months. Management expects to need additional debt and/or equity financing to fund operations and warns that failure to raise capital could lead to curtailment of operations and negatively affect the business.

Management Comments

• Management acknowledges its responsibility for the preparation of the accompanying unaudited consolidated financial statements, reflecting all necessary adjustments for a fair statement of financial position and results of operations.
• Management cannot provide assurance that the Company will ultimately achieve profitable operations or become cash flow positive or raise additional debt and/or equity capital.
• If the Company is unable to raise additional capital or secure additional lending in the near future, management expects that the Company will need to curtail its operations.
• Management, with the participation of the principal executive officer and principal financial officer, concluded that as of June 30, 2025, disclosure controls and procedures were not effective due to material weaknesses in internal control over financial reporting.

Industry Context

Miami Breeze Car Care Inc. has diversified its business by acquiring Gin City Group, Inc., moving beyond its original automotive care products into the adult beverage and catering industry with the operation of a gin bar in Munich, Germany. This creates two distinct operating segments: Car Care and Gin City. The Gin City segment, acquired in February 2025, has quickly become the primary revenue driver, generating substantially all sales for the three and six months ended June 30, 2025. This diversification introduces the Company to new market dynamics, regulatory environments (e.g., German beverage and catering regulations), and competitive landscapes, while its original car care segment remains nascent in terms of sales contribution.

Management Changes

Corporate Governance

Legal Proceedings

• The Company is not involved in any pending or threatened legal proceedings that it believes could reasonably be expected to have a material adverse effect on its financial condition, results of operations, or cash flows.

Related Party Transactions

• Professional fees paid to GH Bill (a company owned by the former CEO of Miami Breeze) increased to $83,201 for the three months ended June 30, 2025, and $164,497 for the six months ended June 30, 2025, for administration and back-office services.
• A consulting fee of $1,082 was paid to the former owner of Gin City Group, Inc., who is a beneficial shareholder, during the six months ended June 30, 2025.
• Firaz Ruecker and Lance Ruecker (Related Party Shareholders) returned 20,000,000 shares to the Company as treasury stock without compensation on October 24, 2024.

Stakeholder Impact

• Shareholders face significant dilution risk from ongoing and future equity capital raises, as well as the risk of substantial loss of investment due to the Company's going concern issues and increasing net losses.
• Employees and customers of the acquired Gin City segment are impacted by the integration into Miami Breeze Car Care Inc. and the strategic shift towards the adult beverage market.
• Creditors face increased risk due to the Company's substantial doubt about its ability to continue as a going concern and its reliance on future financing.

Next Steps

• Grow production and sales through sponsored ads on Amazon.com, Facebook, and other digital media platforms.
• Seek additional debt and/or equity financing to fund future operations and cover estimated expenses of $870,000 for the next 12 months.
• Address material weaknesses in internal control over financial reporting, including hiring sufficient skilled accounting personnel and improving segregation of duties.
• Continue to assess the results of consultant efforts (Rafael Scotoni and Stefan Lumpp) based on strategic partners and customers brought to the Company for stock-based compensation.

Key Dates

Recommendation

Despite a significant increase in revenue driven by the Gin City acquisition, Miami Breeze Car Care Inc. reported a substantial increase in net loss and a quadrupling of cash used in operating activities. The explicit 'going concern' warning from auditors, coupled with identified material weaknesses in internal controls, signals severe financial instability and operational deficiencies. The Company's current cash position is insufficient to cover projected expenses for the next 12 months, necessitating continuous dilutive capital raises. The long-term viability of the business is highly questionable, making it a high-risk investment with significant downside potential.

Keywords

Automotive Care Products, Car Scent, Gin Bar, Beverage Industry, SEC Filing, 10-Q, Quarterly Report, Acquisition, Going Concern, Financial Performance, Operating Loss, Cash Flow, Capital Raise, Internal Controls, Related Party Transactions, Germany, Munich