STME.OQBStimcell Energetics INC

10-Q: Stimcell Energetics Reports Q3 2025 Results, Cites Increased Operating Expenses and Continued Going Concern Uncertainty

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Stimcell Energetics Inc. reports increased operating expenses and a net loss for Q3 2025, alongside ongoing concerns about its ability to continue as a going concern.

Capital raiseThe company is planning to support its operations as well as redesign of the eBalance microcurrent device through equity or debt financing.Management intends to obtain additional funding by borrowing funds from its directors and officers, issuing promissory notes, and/or private placement of common stock.The company expects to raise additional capital through the offering of more shares, which will result in dilution to its current shareholders.The company expects to convert some of the existing debt into shares of its common stock, which will result in dilution to its current shareholders.
Worse than expectedThe company reported a net loss compared to a net income in the same period last year.Operating expenses increased significantly.The company's working capital deficit worsened.The company's auditors have raised substantial doubt about its ability to continue as a going concern.

Summary

  • Stimcell Energetics Inc. filed its Form 10-Q for the quarter ended February 28, 2025.
  • The company reported a net loss of $140,537 for the three months ended February 28, 2025, compared to a net income of $119,971 for the three months ended February 29, 2024.
  • Operating expenses increased by 126.9% to $131,086 for the quarter.
  • The company's working capital deficit is $1,070,215 as of February 28, 2025.
  • The report expresses substantial doubt about the company's ability to continue as a going concern.
  • The company is focusing on redesigning its eBalance microcurrent device for home use through a partnership with ADM Tronics Unlimited, Inc.
  • The company entered into a digital marketing services agreement with Rain Communications Inc., issuing 1,000,000 shares for services valued at $200,000.
  • The company also entered into a debt settlement agreement, issuing 75,000 shares to settle $15,000 in debt.
  • The company has a significant amount of debt due to related parties.
  • The company completed a 1-for-15 reverse stock split on November 1, 2024.

Sentiment

Score: 3

Explanation: The document presents a concerning financial situation with increasing losses, a significant working capital deficit, and doubts about the company's ability to continue as a going concern. While there are some positive developments, the overall sentiment is negative.

Positives

  • The company is actively working to redesign its eBalance microcurrent device for a broader consumer market.
  • The company is engaging in marketing efforts to increase awareness of its products and securities.
  • The company is attempting to reduce its debt through debt settlement agreements.

Negatives

  • The company has a significant working capital deficit of $1,070,215.
  • The company has an accumulated deficit of $10,642,227.
  • The company's operating expenses have increased significantly.
  • The company is heavily reliant on related party debt.
  • The company's auditors have raised substantial doubt about its ability to continue as a going concern.
  • The company has a limited operating history and minimal revenues.

Risks

  • The company operates in a highly competitive market.
  • The company is subject to numerous governmental regulations.
  • The company's intellectual property rights may not be adequately protected.
  • The company's research and development efforts may not result in commercially successful products.
  • The company may be unable to attract and maintain key personnel.
  • The company needs to acquire additional financing, or its business will fail.
  • The company expects to raise additional capital through the offering of more shares, which will result in dilution to its current shareholders.
  • The company expects to convert some of the existing debt into shares of its common stock, which will result in dilution to its current shareholders.
  • There is a limited market for the Companys common stock meaning that its shareholders may not be able to resell their shares.
  • Because the Company stock is a penny stock, stockholders will be more limited in their ability to sell their stock.

Future Outlook

The company plans to support its operations and the redesign of the eBalance microcurrent device through equity or debt financing. Management is focused on redesigning the eBalance device and seeking additional funding to support operations.

Management Comments

  • Management intends to obtain additional funding by borrowing funds from its directors and officers, issuing promissory notes, and/or private placement of common stock.
  • Management is planning to support its operations as well as redesign of the eBalance microcurrent device through equity or debt financing.

Industry Context

The company operates in the competitive biotech industry, facing competition from established medical device and pharmaceutical companies. The company is attempting to differentiate itself by focusing on microcurrent technology and consumer-friendly devices.

Comparison to Industry Standards

  • It is difficult to compare Stimcell Energetics directly to industry standards due to its early stage of development and lack of significant revenue.
  • Companies like Bayer Corp., Becton Dickinson Corp., LifeScan Inc., and TheraSense Inc. are major competitors in the diabetes management market, with significantly greater resources and established products.
  • The company's reliance on related party debt and its going concern issues are not typical of more established companies in the medical device industry.
  • The company's partnership with ADM Tronics Unlimited, Inc. to redesign the eBalance microcurrent device is a positive step towards creating a more competitive product.

Related Party Transactions

  • The company has significant amounts due to related parties, including the CEO, CFO, and entities controlled by directors.
  • The company borrowed an additional $8,724 from Mr. Richard Jeffs and $8,021 from Mrs. Susan Jeffs under revolving credit lines at 10% per annum.
  • During the nine-month period ended February 28, 2025, an entity controlled by a director and a significant shareholder, agreed to forgive a total of $3,165 the Company owed for royalties.

Stakeholder Impact

  • Shareholders face significant risk due to the company's financial difficulties and potential dilution from future equity offerings.
  • Employees face uncertainty due to the company's going concern issues.
  • Creditors face risk due to the company's limited ability to repay its debts.

Next Steps

  • The company will continue to develop and redesign the eBalance microcurrent device.
  • The company will seek additional equity or debt financing to support operations.
  • The company will continue to execute its digital marketing services agreement with Rain Communications Inc.
  • The company will continue to attempt to settle outstanding debt.

Key Dates

DateDescription
March 19, 2010Stimcell Energetics Inc. was incorporated under the laws of the State of Nevada.
October 16, 2014Technology Purchase Agreement among Stimcell Energetics Inc., Jean Arnett, and Brad Hargreaves.
April 26, 2016The Company formed a subsidiary, Cell MedX (Canada) Corp.
September 6, 2018Intellectual Property Royalty Agreement between Stimcell Energetics Inc. and Brek Technologies Inc.
September 6, 2018Royalty Agreement between Stimcell Energetics Inc. and Mr. Richard Norman Jeffs.
December 27, 2018Credit Line Agreement between Richard Norman Jeffs and Stimcell Energetics Inc.
March 21, 2019Distribution Agreement between Stimcell Energetics Inc. and Live Current Media, Inc.
January 29, 2020Buyback agreement between Live Current Media Inc. and Stimcell Energetics Inc.
July 3, 2020Loan Agreement among Stimcell Energetics Inc. and David Jeffs.
November 30, 2020Loan Agreement and Note Payable among Stimcell Energetics Inc. and Tradex Capital Corp.
December 14, 2020Loan Agreement and Note Payable among Cell MedX (Canada) Corp. and Richard Jeffs.
December 23, 2020Loan Agreement and Note Payable among Cell MedX (Canada) Corp. and Richard Jeffs.
March 29, 2021Loan Agreement and Note Payable among Cell MedX (Canada) Corp. and Susan Jeffs.
May 18, 2021Loan Agreement and Note Payable among Stimcell Energetics Inc. and Richard Jeffs.
June 22, 2021Loan Agreement and Note Payable among Cell MedX (Canada) Corp. and Richard Jeffs.
October 7, 2021Loan Agreement and Note Payable among Cell MedX (Canada) Corp. and Richard Jeffs.
October 15, 2021Loan Agreement and Note Payable among Stimcell Energetics Inc. and Richard Jeffs.
October 26, 2021Loan Agreement and Note Payable among Cell MedX (Canada) Corp. and Richard Jeffs.
November 24, 2021Loan Agreement and Note Payable among Cell MedX (Canada) Corp. and Richard Jeffs.
November 29, 2021Loan Agreement and Note Payable among Stimcell Energetics Inc. and Bradley Hargreaves.
December 30, 2021Loan Agreement and Note Payable among Cell MedX (Canada) Corp. and Richard Jeffs.
January 27, 2022Loan Agreement and Note Payable among Cell MedX (Canada) Corp. and Richard Jeffs.
February 24, 2022Loan Agreement and Note Payable among Cell MedX (Canada) Corp. and Richard Jeffs.
March 29, 2022Loan Agreement and Note Payable among Cell MedX (Canada) Corp. and Richard Jeffs.
April 28, 2022Loan Agreement and Note Payable among Cell MedX (Canada) Corp. and Richard Jeffs.
May 31, 2022Loan Agreement and Note Payable among Cell MedX (Canada) Corp. and Richard Jeffs.
June 27, 2022Loan Agreement and Note Payable among Cell MedX (Canada) Corp. and Richard Jeffs.
July 28, 2022Loan Agreement and Note Payable among Cell MedX (Canada) Corp. and Richard Jeffs.
September 2, 2022Loan Agreement among Cell MedX (Canada) Corp. and Richard Jeffs.
September 6, 2022Loan Agreement among Cell MedX (Canada) Corp. and Richard Jeffs.
October 3, 2022Loan Agreement and Note Payable among Cell MedX (Canada) Corp. and Richard Jeffs.
October 11, 2022Loan Agreement and Note Payable among Cell MedX (Canada) Corp. and Richard Jeffs.
October 11, 2022Loan Agreement and Note Payable among Cell MedX (Canada) Corp. and Richard Jeffs.
October 11, 2022Loan Agreement and Note Payable among Stimcell Energetics Inc. and Richard Jeffs.
October 11, 2022Loan Agreement and Note Payable among Stimcell Energetics Inc. and Richard Jeffs.
November 3, 2022Loan Agreement among Cell MedX (Canada) Corp. and Richard Jeffs.
November 28, 2022Loan Agreement among Cell MedX (Canada) Corp. and Richard Jeffs.
December 30, 2022Loan Agreement among Cell MedX (Canada) Corp. and Richard Jeffs.
January 24, 2023Loan Agreement among Stimcell Energetics Inc. and David Jeffs.
January 24, 2023Loan Agreement among Stimcell Energetics Inc. and Amir Vahabzadeh.
January 30, 2022Loan Agreement among Cell MedX (Canada) Corp. and Richard Jeffs.
April 11, 2023Loan Agreement among Stimcell Energetics Inc. and Amir Vahabzadeh.
April 25, 2023Loan Agreement among Stimcell Energetics Inc. and David Jeffs.
May 16, 2023Loan Agreement among Stimcell Energetics Inc. and Amir Vahabzadeh.
May 18, 2023Loan Agreement among Stimcell Energetics Inc. and Sam Ahdoot.
January 4, 2024Loan Agreement among Stimcell Energetics Inc. and Amir Vahabzadeh.
January 4, 2024Loan Agreement among Stimcell Energetics Inc. and Sam Ahdoot.
March 12, 2024The company closed a non-brokered private placement financing.
November 1, 2024The Company completed a 1-for-15 reverse split of its common stock.
November 12, 2024Loan Agreement among Stimcell Energetics, Inc. and Amir Vahabzadeh.
February 14, 2025Line of credit agreement dated February 14, 2025, among Stimcell Energetics Inc. and Richard Jeffs
February 14, 2025Line of credit agreement dated February 14, 2025, among Stimcell Energetics Inc. and Susan Jeffs
February 28, 2025End of the quarterly period.
March 18, 2025Digital marketing services agreement between the Company and Rain Communications Inc.
March 24, 2025Debt settlement agreement.
April 14, 2025Date of report filing.

Keywords

Stimcell Energetics, eBalance Technology, Microcurrent device, Financial results, Going concern, Related party debt, Reverse stock split, ADM Tronics, Rain Communications, Debt settlement

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