10-K: Rest EZ Reports Zero Revenue, Going Concern Doubts in 2025 Annual Filing

Rest EZ, Inc.'s latest 10-K reveals zero revenue for fiscal year 2025, a net loss, and significant going concern doubts, despite a new CEO and plans for market expansion.

Summary

• Rest EZ, Inc. reported zero revenue for the fiscal year ended March 31, 2025, a significant decline from $5,000 in the prior year.
• The company incurred a net loss of $7,900 for fiscal year 2025, an improvement from a $19,386 net loss in fiscal year 2024.
• As of March 31, 2025, the company had a cash balance of $300 and an accumulated deficit of $286,101.
• Management has raised substantial doubt about the company's ability to continue as a going concern due to minimal assets, no revenue, and ongoing losses.
• The company's common stock is considered a penny stock, and there is no established public trading market.
• Brandon Sosa, the founder, was replaced by Dylan Carson as CEO, President, Principal Executive Officer, and Principal Financial Officer on June 30, 2025.
• The company's inventory production is partially complete but delayed due to an unavailable ingredient, leading to an impaired vendor deposit.
• Internal controls over financial reporting were deemed ineffective due to a lack of segregation of duties, attributed to the company's small size.

Sentiment

Score: 2

Explanation: The sentiment is overwhelmingly negative due to zero revenue, significant going concern doubts, ineffective internal controls, dependence on a single customer, and operational delays. While the net loss decreased, the fundamental financial health is precarious.

Positives

• Net loss decreased to $7,900 in fiscal year 2025 from $19,386 in fiscal year 2024.
• Cash balance increased to $300 as of March 31, 2025, from $0 in the prior year.
• Working capital improved from a deficit of $36,805 in 2024 to a surplus of $300 in 2025.
• Former CEO, Brandon Sosa, indicated willingness to fund an additional $100,000 if the company needs further assistance.
• A $13,500 related party loan (receivable from Mr. Sosa) was forgiven and deemed satisfied through shares of stock.

Negatives

• The company generated zero revenue for the fiscal year ended March 31, 2025.
• Substantial doubt exists about the company's ability to continue as a going concern due to minimal assets, no revenue, and ongoing losses.
• The company does not have enough capital to sustain business operations for 12 months without additional financing.
• Product sales were historically from one major customer, posing a significant dependence risk.
• The company does not currently have an established customer base.
• Inventory production is delayed due to an unavailable ingredient, and a vendor deposit has been impaired.
• Internal control over financial reporting is ineffective due to a lack of segregation of duties.
• Disclosure controls and procedures are not effective to ensure timely communication of material information.
• The company's common stock is considered a penny stock, which may restrict marketability.
• There is no established public trading market for the common stock, making liquidation of investment difficult.

Risks

• Issuance of new securities could result in dilution to existing security holders.
• Debt financing or bank loans may require securing financing with business assets.
• Potential side effects of the product (stomach pain, nausea, diarrhea, muscle cramping, irregular heartbeat) could impact business.
• Inherent difficulties in introducing a new product to the market, including building brand awareness, meeting customer standards, and attaining customer loyalty.
• Insufficient capital to sustain business operations for 12 months without additional financing.
• Inability to economically promote or maintain the brand could harm business, results of operations, and financial condition.
• Heavy dependence on key wholesalers, retailers, internet sales, and the expertise of the Chief Executive Officer.
• Loss of the CEO could seriously interrupt business operations and negatively impact the business plan.
• Future growth may require recruitment of qualified employees, which could be challenging.
• Dependence on a single major customer for product sales presents a viability risk if that customer stops purchases.
• Significant costs associated with public company reporting requirements and corporate governance compliance (e.g., Sarbanes-Oxley Act).
• Lack of public company experience of the sole officer and director could adversely impact compliance with U.S. securities laws.
• Operating results may fluctuate due to factors outside of the company's control, such as demand for the product or increased defaults among advertising applicants.
• The company may never pay any dividends to shareholders, as it intends to retain future earnings for operations and expansion.
• The controlling security holder (Mr. Sosa) may take actions that conflict with other investors' interests due to his 54.516% ownership.
• The offering price of the common stock was arbitrarily determined and bears no relationship to actual value, potentially making shares difficult to sell.
• Future issuance of additional shares of common stock could dilute existing ownership interests.
• The lack of a public market means investors may be unable to liquidate their investment.

Future Outlook

Rest EZ, Inc. plans to increase its client base over the next twelve months by aggressively marketing its product to generate new wholesalers, expand its wholesale base, increase sales on its website, and boost sales through retail chain stores and word-of-mouth advertising. The company aims to establish its reputation in the soft gel capsule industry and form long-term working relationships with wholesalers and retailers nationwide. Management anticipates needing to hire additional employees as the business grows and may expand the Board of Directors.

Management Comments

• "We plan during the next twelve months to increase our client base by aggressively marketing our product to generate: (1) wholesalers and expand our wholesale base; (2) sales on our website; and (3) sales through retail chain stores and word of mouth advertising."
• "The Company is confident that it will be able to attract and/or obtain new clients, based on favorable reception in the retail sector thus far."
• "The Company believes that the knowledge, relationships, reputation and successful track record of its management will help to build and maintain its client base."
• "Once the Company achieves more revenue Mr. Carson will devote 40 hours per week to the Company or more and draw a salary of $2,000 per month."
• "The Company believes our product is superior to that of the competition due to the product being in a soft gel form, avoiding substantial product breakdown before digestion as happens with many competitors products."

Industry Context

The sleeping aid supplement industry is intensely competitive, with numerous companies and individuals, many of whom possess significantly greater financial and managerial resources than Rest EZ, Inc. The company aims to differentiate itself through its specialized soft gel capsule formulation, which it believes enhances absorption and is difficult for competitors to replicate. However, the industry faces challenges from larger players who may use aggressive pricing strategies, which could adversely affect Rest EZ, Inc.'s business model given its non-low-pricing strategy.

Comparison to Industry Standards

• NA The company is in a very early stage of operations with minimal revenue and significant financial challenges, making direct comparisons to established industry benchmarks or specific competitors difficult and potentially misleading. The filing does not provide specific comparable companies or projects for a detailed assessment.

Management Changes

Corporate Governance

Legal Proceedings

• The company is not currently a party to any material legal proceeding or governmental regulatory proceeding, nor is it aware of any pending or potential proceedings that would have a material adverse effect on the business.

Related Party Transactions

• The company uses a corporate office provided free of charge by its CEO (currently Dylan Carson).
• Brandon Sosa, the former CEO and shareholder, had loaned the company $131,375 (net of repayments), which was reduced to $0 outstanding by March 31, 2025.
• A $13,500 loan (accounts receivable) from Mr. Sosa was forgiven and deemed satisfied through shares of stock he retained from the company.

Stakeholder Impact

• **Shareholders**: Face a high degree of risk, including potential dilution from future capital raises, difficulty in selling shares due to penny stock status and lack of public market, and potential loss of investment due to going concern doubts and operational challenges.
• **Employees (current and future)**: The company's viability and ability to pay salaries (including the CEO's future salary) are uncertain due to financial distress and dependence on additional capital.
• **Customers**: Potential for product unavailability or quality issues if manufacturing delays persist or if the company's financial instability impacts its ability to maintain supplier relationships.
• **Suppliers (Sport Energy)**: Risk of delayed or non-payment for manufacturing services, as evidenced by the impaired vendor deposit due to ingredient unavailability and the company's financial condition.
• **Creditors**: Risk of non-repayment of debt, although the loan from the related party has been settled.

Next Steps

• Increase brand awareness and develop an effective business plan.
• Implement an advertising and marketing plan to attract and retain customers.
• Expand wholesale base, increase online sales, and grow sales through retail chain stores.
• Form long-term working relationships with wholesalers and retailers.
• Attract, retain, and motivate qualified personnel as the business grows.
• Address the material weakness in internal control over financial reporting by hiring additional staff as the company grows.
• Potentially expand the Board of Directors in the future.

Key Dates

Recommendation

Rest EZ, Inc. presents an extremely high-risk investment profile. The company reported zero revenue for the most recent fiscal year, operates at a net loss, and faces substantial doubt about its ability to continue as a going concern. It lacks sufficient capital for the next 12 months, relies on a single officer, and has ineffective internal controls. The product's manufacturing is delayed, and there is no established public trading market for its penny stock. These factors collectively indicate severe financial distress and operational instability, making the stock highly speculative with a significant risk of capital loss.

Keywords

Sleep Aid Supplement, Dietary Supplement, Soft Gel Capsule, Melatonin, SEC Filing, 10-K, Going Concern, Zero Revenue, Financial Loss, Public Company, Penny Stock, Corporate Governance, Risk Factors, Management Change, Wholesale Distribution, Retail Sales, Online Sales