10-Q: Treasure & Shipwreck Recovery Inc. Reports Q3 2024 Results with Ongoing Losses and No Revenue

Treasure & Shipwreck Recovery Inc. reported no revenue and continued losses for the third quarter of fiscal year 2024, highlighting its ongoing challenges in achieving profitability.

Summary

• Treasure & Shipwreck Recovery, Inc., formerly Beliss Corp., reported its financial results for the third quarter of fiscal year 2024, ending January 31, 2024.
• The company did not generate any revenue during the three and nine-month periods ended January 31, 2024 and 2023.
• The company experienced a net loss of $87,746 for the three months ended January 31, 2024, compared to a net loss of $13,966 for the same period in 2023.
• For the nine months ended January 31, 2024, the net loss was $507,714, compared to a net loss of $363,204 for the same period in 2023.
• Operating expenses increased significantly, primarily due to higher consulting, accounting, labor, and boat expenses related to exploration activities and convertible note conversions.
• The company had no cash on hand as of January 31, 2024, and a working capital deficit of $1,015,131.
• The company's total assets were $149,038, while total liabilities were $1,015,131, resulting in a stockholders' deficit of $866,093.
• The company is in immediate need of further working capital and is exploring options for financing through debt, equity, or a combination of both.
• The company's ability to continue as a going concern is in doubt due to recurring losses and the need for additional capital.

Sentiment

Score: 2

Explanation: The document paints a very negative picture due to the lack of revenue, increasing losses, zero cash, and a going concern warning. The company's reliance on external funding and material weaknesses in internal controls further contribute to the low sentiment.

Positives

• The company is actively pursuing exploration activities, indicating a commitment to its core business.
• The company is actively seeking additional capital, which could improve its financial position.
• The company converted some debt to equity, reducing interest expenses.

Negatives

• The company has not generated any revenue for the reported periods.
• The company is experiencing significant and increasing net losses.
• The company has no cash on hand and a substantial working capital deficit.
• The company's ability to continue as a going concern is in doubt.
• The company has material weaknesses in its internal controls over financial reporting.
• The company is reliant on external financing to continue operations.

Risks

• The company's ability to raise additional capital is uncertain, which could lead to curtailment or cessation of operations.
• The company's reliance on equity sales for funding will result in dilution to existing shareholders.
• The company's lack of revenue generation poses a significant risk to its long-term viability.
• The company's material weaknesses in internal controls could lead to misstatements in financial reporting.
• The company's convertible notes payable are in default, potentially leading to further dilution.
• The company is subject to litigation, which could result in financial losses.

Future Outlook

The company expects to continue to rely on equity sales to fund operations and is actively seeking additional capital through debt or equity financing. There is no assurance that the company will be able to raise sufficient capital or generate revenue in the foreseeable future.

Management Comments

• Management believes that current trends toward lower capital investment in start-up companies pose the most significant challenge to the Companys success over the next year and in future years.
• Management believes that the condensed consolidated financial statements and other information presented herewith are materially correct.
• Management intends to take practical, cost-effective steps in implementing internal controls, upon obtaining sufficient capital and operations.

Industry Context

The company operates in the niche market of shipwreck exploration and treasure recovery, which is a high-risk, high-reward industry. The company's financial struggles reflect the challenges of funding such ventures, particularly for early-stage companies. The lack of revenue and reliance on external financing are common issues in this sector.

Comparison to Industry Standards

• It is difficult to compare Treasure & Shipwreck Recovery directly to industry standards due to the unique nature of its business and the lack of publicly traded comparables focused solely on shipwreck recovery.
• Companies in related fields, such as marine archaeology or underwater exploration, often have diverse revenue streams, including research grants, consulting services, and media rights, which Treasure & Shipwreck Recovery has not yet developed.
• The company's lack of revenue and significant losses are not typical for established companies in related industries, which often have more diversified funding and revenue models.
• The company's reliance on equity financing and convertible debt is common for early-stage ventures, but the level of financial distress and going concern issues are concerning.

Corporate Governance

Legal Proceedings

• The company is involved in a lawsuit with Delmar, seeking $20,000, over a contract dispute related to its regulation A offering in 2022.
• The company previously filed a declaratory action regarding its status as a shell company, but this matter was no longer deemed necessary.

Related Party Transactions

• An officer of the company has provided a loan to TSR under a convertible promissory note, with a balance of $60,890 as of January 31, 2024.
• In June of 2023, the issuer issued to a related party director, the amount of 2,525,618 shares for debt conversion and satisfaction of a note for $50,000, including $25,769 in accrued interest, at the rate of $0.03 per share.

Stakeholder Impact

• Shareholders face significant risk of dilution due to the company's reliance on equity financing.
• Shareholders face the risk of losing their entire investment if the company is unable to continue as a going concern.
• Creditors face the risk of non-payment due to the company's financial difficulties.
• Employees face uncertainty regarding job security due to the company's financial instability.

Next Steps

• The company will continue to seek additional capital through debt or equity financing.
• The company intends to implement internal controls upon obtaining sufficient capital and operations.
• The company will continue its exploration activities.

Key Dates

Keywords

Treasure Recovery, Shipwreck Exploration, Financial Results, Going Concern, Net Loss, Operating Expenses, Capital Raise, Convertible Notes, Equity Dilution, Internal Controls