10-K: SportsQuest posts 2025 loss, flags going concern

SportsQuest reported no revenue, a $121,640 net loss, $259 year-end cash, and a working capital deficit while relying on convertible notes to fund operations.

Summary

• Operates an early-stage franchise consulting and lead-generation portal (www.iefranchise.com) under an agreement with Business Alliance Inc. (BAI), monetizing via paid leads and franchisor advertising.
• For 2025, revenue was $0 and net loss was $121,640, improving from a $227,443 net loss in 2024.
• Operating expenses were $90,140 (administrative $48,507; consulting $24,168; interest expense $16,899), plus a $31,500 loss from settlement/debt extinguishment.
• Year-end cash was $259; working capital deficit was $460,005; total current liabilities were $460,264 (convertible notes payable $319,204; accrued interest $141,060).
• Stockholders’ deficit was $(460,005). Common shares outstanding were 4,024,163,151 at December 31, 2025 (and as of March 27, 2026).
• Funded operations primarily through convertible notes and equity issuances; 350,000,000 new common shares and 1,200,000 Preferred Stock Class A shares were issued in 2025; financing cash inflow totaled $101,809.
• Aggregate market value of common equity was approximately $402,000 as of June 30, 2025 (OTC Pink: SPQS).
• Management concluded disclosure controls and procedures were effective as of December 31, 2025; no material legal proceedings disclosed.
• Redomiciled from Delaware to Wyoming on January 9, 2025.
• Auditor issued an unqualified opinion with an emphasis of substantial doubt about the ability to continue as a going concern.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this as weak given zero revenue, minimal cash, deficits, and ongoing going-concern uncertainty, despite a narrower net loss versus 2024.

Positives

• Net loss narrowed to $121,640 from $227,443 in 2024 (lower operating expenses: $90,140 vs. $116,761).
• Financing activities provided $101,809 in 2025, helping sustain operations.
• Audited financials received a clean opinion (with going concern emphasis) and no critical audit matters.
• Redomicile to Wyoming completed on January 9, 2025.

Negatives

• No revenue generated in 2025.
• Extremely limited liquidity with $259 in cash at year-end.
• Working capital deficit of $460,005 and stockholders’ deficit of $(460,005).
• Reliance on convertible notes ($319,204) with accrued interest of $141,060; interest expense was $16,899 in 2025.
• Share dilution: 350,000,000 additional common shares issued in 2025; 4,024,163,151 common shares outstanding at year-end.
• Limited trading liquidity on OTC Pink; no dividends anticipated.
• Company does not maintain insider trading policies; minimal formal executive compensation programs.

Risks

• Substantial doubt about the ability to continue as a going concern due to recurring losses and minimal cash resources.
• Dependence on external financing (convertible notes and equity issuances) to fund operations, which may be dilutive to shareholders.
• Interest rate risk related to outstanding debt.
• Limited trading activity on OTC Pink and no assurance of liquidity.
• Early-stage status with no revenue generation to date.
• Cybersecurity oversight relies on third-party software; board and management plan to assess and mitigate risks as operations develop.

Future Outlook

Management intends to expand the franchise lead-generation platform and monetize via consulting, advertising, and paid lead programs, while seeking additional capital; substantial doubt about continuing as a going concern remains due to minimal cash and recurring losses.

Management Comments

• Cybersecurity is considered critical; with limited operations to date, management and the Board will oversee risk identification and mitigation as operations develop and will take appropriate steps in the event of an incident.
• Disclosure controls and procedures were evaluated and concluded to be effective as of December 31, 2025.
• Strategy is to grow the platform and generate revenue through consulting, advertising, and lead generation services.
• The Company has not adopted insider trading policies, citing limited management resources and lack of equity award programs.

Industry Context

StockSavvy.ai notes that franchise lead-generation and brokerage portals compete on lead volume, quality, and advertiser ROI, with relatively low entry barriers but rising digital marketing costs. For a microcap on OTC Pink with no revenue and minimal cash, sustained growth typically requires capital access and scalable traffic acquisition; peers with established marketplaces and advertising budgets hold structural advantages.

Comparison to Industry Standards

• Profitability and scale: Unlike established lead-generation platforms (e.g., Franchise Gator/Dominion, FranServe’s broker network, broader online lead-gen peers like QuinStreet or Angi), SportsQuest reported no revenue and minimal cash ($259), well below industry norms for sustainable operations.
• Liquidity and capital: Microcap OTC issuers often rely on convertible notes; by contrast, listed peers generally maintain revolving credit facilities or equity capital access at lower dilution. SportsQuest’s $319,204 in convertible notes and $141,060 accrued interest indicate higher-cost, potentially dilutive financing.
• Governance: The absence of insider trading policies and concentration of control via preferred shares lag common governance practices seen in larger public peers, which typically maintain formal policies, committees, and independent oversight.
• Market presence: Competitors with established traffic funnels and advertiser networks typically generate meaningful top-line revenue; SportsQuest is pre-revenue and in early-stage build-out.

Corporate Governance

Legal Proceedings

• No material legal proceedings disclosed.

Related Party Transactions

• Convertible note with Chairman Zoran Cvetojevic dated January 20, 2023 for $67,500 with a three-year maturity remains outstanding.

Stakeholder Impact

• Shareholders: Significant dilution risk from ongoing convertible note financing and large share issuances; control concentrated via preferred shares.
• Creditors: Continued reliance on short-term convertible debt with growing accrued interest ($141,060) increases credit risk.
• Employees/management: Minimal compensation frameworks and lack of insider trading policies may affect talent attraction and governance.
• Customers/franchisors: Early-stage status and limited resources may delay platform scaling and service delivery.

Next Steps

• Expand and monetize the iefranchise.com platform through consulting, advertising, and paid lead generation.
• Pursue additional financing to fund operations and address the working capital deficit.
• Board and management to continue cybersecurity oversight and incident response planning as operations scale.
• No dividends planned; retain any future earnings to support growth.

Key Dates

Recommendation

No revenue, minimal cash ($259), a sizeable working capital deficit ($460,005), and dependence on dilutive convertible notes present high financial and execution risk. Governance limitations (no insider trading policies) and limited OTC Pink liquidity further impair risk-adjusted return prospects. Until the company demonstrates consistent revenue generation and improved capitalization, capital preservation favors a sell stance.

Keywords

SportsQuest, SPQS, franchise consulting, lead generation, Business Alliance Inc., OTC Pink, convertible notes, going concern, preferred stock, West Palm Beach