10-Q: Panamera Holdings Reports Massive Loss, Going Concern Doubt

Panamera Holdings Corporation reported a net loss of $153.7 million for Q1 2026, driven by a significant license acquisition expense, raising substantial doubt about its ability to continue as a going concern.

Summary

• Panamera Holdings Corporation reported a net loss of $153,663,576 for the three months ended October 31, 2025, a substantial increase from a net loss of $91,061 in the prior year period.
• The company's accumulated deficit surged to $176,967,695 as of October 31, 2025, from $23,304,119 on July 31, 2025.
• Operating expenses dramatically increased to $153,615,458, primarily due to $153,400,000 in research and development expenses related to a license acquisition.
• The company entered into a Head License Agreement with Rain Cage Carbon, Inc. on August 1, 2025, for exclusive rights to carbon conversion and clean energy technologies in the U.S. and Mexico.
• Consideration for the license included a $4,900,000 promissory note, an ongoing license fee of 25% of net income from licensed activities, and 27,000,000 shares of restricted common stock valued at $148,500,000.
• Cash decreased to $47,888 as of October 31, 2025, from $85,980 on July 31, 2025.
• Current liabilities increased significantly to $3,455,617 from $155,355, leading to a working capital deficiency of $3,400,160.
• The company's management has identified material weaknesses in disclosure controls and procedures, including a lack of formal control over related party transactions and insufficient segregation of duties.
• A lawsuit was filed against the company by Jeffrey Kilgore on August 28, 2025, claiming owed shares for services, which the company disputes.

Sentiment

Score: 1

Explanation: StockSavvy.ai views this filing as extremely negative due to the massive net loss, significant increase in accumulated deficit, complete lack of revenue, severe working capital deficiency, and explicit 'going concern' doubt, all compounded by identified material weaknesses in internal controls.

Positives

• The company secured exclusive rights to innovative carbon conversion and clean energy technologies from Rain Cage Carbon, Inc. for use in the U.S. and Mexico, which could enhance future business opportunities.
• The company successfully raised $500,000 in cash through the issuance of 91,074 shares of restricted common stock.
• An additional $35,000 was raised from an investor for 10,000 shares of restricted common stock, issued subsequent to the reporting period.

Negatives

• The company reported a massive net loss of $153,663,576 for the quarter, significantly higher than the prior year.
• An accumulated deficit of $176,967,695 raises substantial doubt about the company's ability to continue as a going concern.
• Revenues for the quarter were $0, a complete cessation compared to $43,568 in the prior year period.
• Current liabilities increased by over $3.3 million, resulting in a working capital deficiency of $3,400,160.
• Cash on hand decreased by approximately 44% during the quarter.
• The company has material weaknesses in its internal controls, specifically regarding related party transactions and segregation of duties.

Risks

• The company's ability to continue as a going concern is in substantial doubt due to significant losses and an accumulated deficit, requiring additional financing.
• Reliance on debt and/or equity financing arrangements to fund operations, with no assurance of obtaining sufficient funds.
• The company faces competition from other entities with greater financial, technical, and managerial capabilities in identifying and completing business opportunities.
• The company may not discover or adequately evaluate adverse facts about potential acquisition opportunities due to limited capital for investigation.
• Material weaknesses in internal controls over financial reporting could lead to errors in financial statements and potential restatements.
• A pending lawsuit from Jeffrey Kilgore claiming owed shares for services could result in an unfavorable outcome, though the company disputes the claim.

Future Outlook

The company is actively seeking new business opportunities, with a primary emphasis on the environmental services industry and emerging innovative technologies, including carbon conversion and clean energy. It intends to fund future operations through debt and/or equity financing arrangements, acknowledging that additional financing will be required for any new acquisitions or business opportunities.

Management Comments

• Management believes all adjustments consisting of normal recurring entries necessary for a fair statement of the periods presented for financial position, results of operations, and cash flows have been made.
• Management intends to raise additional funds through public or private placement offerings to address the going concern issues.
• Management believes the lawsuit filed by Jeffrey Kilgore is without merit and intends to vigorously defend against it.

Industry Context

StockSavvy.ai notes that Panamera Holdings Corporation's strategic shift towards environmental services, particularly carbon conversion and clean energy technologies through its agreement with Rain Cage Carbon, Inc., aligns with growing global demand for sustainable solutions and decarbonization efforts. This move positions the company in a high-growth sector, but also one that is capital-intensive and subject to rapid technological change and regulatory developments. The company's previous activities in metals recycling also fit within the broader circular economy trend. However, the significant R&D expense and lack of immediate revenue from these new ventures highlight the early-stage and speculative nature of its current strategy.

Comparison to Industry Standards

• NA

Management Changes

Corporate Governance

Legal Proceedings

• Jeffrey Kilgore filed a lawsuit on August 28, 2025, in Jefferson County, Texas (Cause No. 25DCCV1693), claiming he is owed certain shares in compensation for services. The company disputes this claim and intends to vigorously defend against it. A hearing for a temporary injunction is set for January 22, 2026.

Related Party Transactions

• The company entered into a promissory note agreement for $4,900,000 with the Licensor (Rain Cage Carbon, Inc.) for the upfront license fee, making the Licensor a related party due to the issuance of 27,000,000 shares of restricted common stock.
• During the three months ended October 31, 2025, the company repaid $347,500 of the related party promissory note and recognized $49,602 in interest expenses.
• The company recognized $146 in imputed interest on related party balances during the quarter.
• No revenues were generated from sales of material to a company controlled by a related party during the three months ended October 31, 2025, compared to $35,663 in the prior year.
• Salary of $50,000 was recognized and paid to the company's president during the quarter.
• Management fees of $65,500 were recognized and paid to the company's Chief Executive Officer during the quarter.
• Salary of $12,000 was recognized and paid to the company's Chief Financial Officer during the quarter.

Stakeholder Impact

• Shareholders face significant dilution from the issuance of 27,000,000 shares for the license acquisition and additional shares for cash, alongside a massive net loss and negative equity.
• Creditors, particularly the related party noteholder, are exposed to the company's substantial debt and going concern risks.
• Employees and management are receiving salaries and fees, but the company's financial instability could impact future employment security.
• Potential future investors face high risk due to the company's financial distress, going concern doubt, and internal control weaknesses.

Next Steps

• The company intends to raise additional funds through public or private placement offerings to continue operations and develop its business plan.
• The company will continue to pursue new business opportunities, particularly in environmental services and emerging innovative technologies.
• The company plans to vigorously defend against the lawsuit filed by Jeffrey Kilgore, with a hearing for a temporary injunction set for January 22, 2026.

Key Dates

Recommendation

A seasoned investor or institution would likely issue a 'strong sell' recommendation. The company reported a staggering net loss of over $153 million, resulting in a negative stockholders' equity and a substantial accumulated deficit, which raises significant doubt about its ability to continue as a going concern. Revenues have ceased, and liquidity has severely deteriorated with a working capital deficiency of $3.4 million. While the license acquisition in carbon conversion is strategically interesting, the immediate financial impact is a massive expense without clear near-term revenue generation, and it has significantly increased liabilities. Furthermore, identified material weaknesses in internal controls indicate poor financial oversight. These factors collectively point to extreme financial distress and high investment risk.

Keywords

Environmental services, Carbon conversion, Clean energy technologies, Metals recycling, SEC filing, 10-Q, Net loss, Going concern, Working capital deficiency, License agreement, Related party transactions, Internal controls, Equity financing