10-Q/A: Tribal Rides Shifts to Food Tech, Reports Q1 Net Income

Tribal Rides International Corp. reported a net income of $139,664 for Q1 2025, driven by a one-time gain from related party debt extinguishment, as it transitions from ridesharing technology to the food technology sector.

Summary

• Filed an amended Quarterly Report on Form 10-Q/A for the three months ended March 31, 2025, to address certain revisions and corrections of errors.
• Reported a net income of $139,664 for the three months ended March 31, 2025, a significant improvement from a net loss of $41,831 for the same period in 2024.
• The net income was primarily attributable to a $174,350 gain on the extinguishment of related party liabilities.
• Completed the sale of substantially all its intellectual property and related intangible assets (ridesharing and autonomous vehicle technology) to Boumarang Inc. on December 31, 2024, for $5,000,000 in Boumarang common stock.
• Discontinued its historical transportation technology business and is now strategically transitioning to pursue opportunities in the food technology (food tech) sector.
• Acquired all membership interests of Supa Food Services LLC on June 30, 2025, marking a concrete step in its new food technology strategy.
• Terminated a previously announced Share Exchange Agreement with Singta Industries Inc. on June 30, 2025, due to unmet closing conditions.
• Reported no cash on hand as of March 31, 2025, and December 31, 2024, and continues to operate with an accumulated deficit of $2,659,490 and a working capital deficit of $654,337 as of March 31, 2025.
• Operating expenses decreased to $18,605 in Q1 2025 from $38,900 in Q1 2024, reflecting a reduction as operations wound down.
• Interest expense increased to $16,081 in Q1 2025 from $2,931 in Q1 2024, primarily due to the accrual of default interest at 20% per annum on a $320,000 convertible promissory note.
• Issued 300,000 common shares to Joseph Grimes, Sanjay Prasad, and Steven Ritacco (100,000 shares each) on January 28, 2025, as compensation for their service as directors and officers from 2020 through 2024.

Sentiment

Score: 3

Explanation: While the company reported a net income due to a one-time gain and made a strategic pivot, its underlying financial health remains extremely weak with no cash, significant deficits, and ongoing going concern issues. The strategic shift to food tech and the Supa acquisition offer a potential path forward, but the execution risk and capital requirements are very high, and the termination of the Singta deal adds uncertainty. The internal control weakness and auditor change are also negative indicators.

Positives

• Reported a net income of $139,664 for the three months ended March 31, 2025, a significant improvement from a net loss of $41,831 in the prior year period.
• Achieved a $174,350 gain from the extinguishment of related party liabilities, which positively impacted the accumulated deficit.
• Successfully divested its non-core transportation technology assets for $5,000,000 in Boumarang common stock, providing a potential source of liquidity for its new strategic direction.
• Operating expenses decreased by over 50% to $18,605 in Q1 2025 from $38,900 in Q1 2024, indicating cost reduction efforts.
• Completed the acquisition of Supa Food Services LLC on June 30, 2025, marking a concrete step in its new food technology strategy.

Negatives

• Has no cash on hand as of March 31, 2025, and December 31, 2024.
• Continues to operate with an accumulated deficit of $2,659,490 and a working capital deficit of $654,337 as of March 31, 2025.
• The reported net income for Q1 2025 is primarily due to a one-time non-cash gain, not from sustainable revenue-generating operations.
• Interest expense significantly increased to $16,081 in Q1 2025, largely due to default interest at 20% per annum on a $320,000 convertible promissory note.
• Several notes payable are either in default or have matured and remain outstanding, including a $25,000 Sorensen note and a $20,000 Corrigan note.
• The company's independent auditors included an explanatory paragraph expressing substantial doubt about its ability to continue as a going concern.
• Disclosure controls and procedures were deemed not effective as of March 31, 2025, due to a material weakness in internal control over financial reporting.
• Terminated a significant share exchange agreement with Singta Industries Inc. due to unmet closing conditions, indicating a failed strategic initiative.

Risks

• **Going Concern**: The company has no revenues, incurred net losses, and has an accumulated deficit of $2,659,490 as of March 31, 2025, raising substantial doubt about its ability to continue as a going concern.
• **Liquidity Risk**: No cash on hand and a working capital deficit of $654,337 as of March 31, 2025, indicate an inability to meet obligations without additional financing.
• **Financing Risk**: Continuation is dependent on raising equity or debt financing, with no assurances of success or favorable terms, which could force the company to cease operations.
• **Operational Risk**: Currently in the development stage with no operating revenues in its new food tech sector, requiring significant capital investment to launch products or services, with no guarantee of success.
• **Market Risk**: The value of the $5,000,000 investment in Boumarang Shares is subject to market risk and volatility, as well as risks associated with Boumarang's operations and financial condition.
• **Internal Control Weakness**: A material weakness in internal control over financial reporting means disclosure controls and procedures were not effective as of March 31, 2025, potentially affecting the reliability of financial information.
• **Default Risk**: Several notes payable are in default or have matured and remain outstanding, potentially leading to further financial strain, legal action, or increased interest costs.

Future Outlook

The company intends to realign its corporate strategy and resources to focus on identifying, developing, and acquiring food technology businesses and assets. It believes the food tech industry presents significant opportunities driven by global demand for healthier, more sustainable, and technology-enabled food solutions. Future operations depend on its ability to raise additional capital, complete acquisitions, and successfully launch products or services in the food tech space. The company expects to seek additional funding through private equity or public markets.

Management Comments

• "The continuation of our Company as a going concern is dependent upon our ability to raise equity or debt financing, and the attainment of profitable operations from any future business we may acquire."
• "We believe the food tech industry presents significant opportunities driven by global demand for healthier, more sustainable, and technology-enabled food solutions."
• "Management has concluded that no impairment indicators existed as of December 31, 2024, and that the carrying amount of the investment approximated its fair value."
• "We expect to conduct the planned operations for twelve months using currently available capital resources."
• "The Management anticipates raising significant additional capital to accomplish its growth plan over twelve (12) months."

Industry Context

The company's pivot from ridesharing and autonomous vehicle technology to food technology reflects a strategic shift towards a sector perceived to have significant growth opportunities driven by global demand for healthier, more sustainable, and technology-enabled food solutions. This move positions the company to capitalize on emerging trends in food innovation, a departure from the highly competitive and capital-intensive transportation tech space. The acquisition of Supa Food Services LLC is a tangible step into this new industry, aligning with broader market interest in sustainable and tech-driven food solutions.

Comparison to Industry Standards

• The company is currently in a development stage with no operating revenues in its new food tech sector, making direct comparisons to established industry players difficult.
• Its financial position, characterized by no cash, an accumulated deficit of $2,659,490, and a working capital deficit of $654,337, is significantly below the standards of healthy, revenue-generating companies in either the food tech or any other industry.
• The reliance on one-time gains for net income and the explicit 'going concern' warning indicate a financial health far below industry benchmarks for sustainable operations.
• The dismissal of its auditor due to 'Prohibited Service Provider status' and the material weakness in internal controls suggest governance and operational issues that are not aligned with best practices for publicly traded companies.

Management Changes

Corporate Governance

Related Party Transactions

• In February 2025, the company entered into a Release and Settlement Agreement with former CEO Joseph Grimes, Sanjay Prasad, and Sanjay Prasad, mutually releasing claims and extinguishing $174,350 in outstanding related-party payables, resulting in a gain on write-offs.
• On January 28, 2025, the Board approved the issuance of 100,000 common shares each to Joseph Grimes, Sanjay Prasad, and Steven Ritacco (total 300,000 shares) as compensation for their service as directors and officers from 2020 through 2024.
• The share issuance to Mr. Prasad also settled $6,427 in expenses previously incurred on behalf of the company.
• Amounts due to related parties (Don Smith, KeptPrivate.com) totaled $39,000 as of March 31, 2025, down from $213,350 at December 31, 2024, primarily due to the settlement.

Stakeholder Impact

• **Shareholders**: Face significant dilution risk from potential future capital raises and the terminated Singta deal. The value of their investment is highly speculative given the going concern warning and business transition. The one-time gain improved equity but does not reflect operational strength.
• **Creditors**: Face elevated risk due to several notes payable being in default or matured and outstanding, coupled with the company's lack of cash and going concern status.
• **Employees/Management**: Significant changes in leadership, with a new CEO and board. Existing management and employees face uncertainty during the business transition and capital-raising efforts.
• **Customers (future)**: The company is in a development stage for its new food tech business, so there are no current customers to impact. Future customers will depend on successful product/service launch.
• **Suppliers**: Potential risk of delayed or non-payment given the company's liquidity issues and lack of cash.

Next Steps

• Identify, develop, and acquire food technology businesses and assets.
• Raise additional capital through equity or debt financing to support operations and growth in the food tech sector.
• Successfully launch products or services in the food tech space.
• Announce the acquisition of Supa Food Services LLC in a Current Report on Form 8-K on or before September 30, 2025, including required financial statements and pro forma information.
• Address the material weakness in internal control over financial reporting to improve disclosure controls and procedures.

Key Dates

Recommendation

Despite a reported net income for Q1 2025, this was driven by a one-time non-cash gain from debt extinguishment, not sustainable operations. The company has no cash, significant accumulated and working capital deficits, and its auditors express substantial doubt about its ability to continue as a going concern. Multiple notes payable are in default or overdue. While the strategic pivot to food technology and the acquisition of Supa Food Services LLC offer a potential future, the company is in a pre-revenue development stage, faces immense capital-raising challenges, and has a material weakness in internal controls. The termination of a major acquisition further highlights operational instability. These factors collectively indicate extremely high risk and a precarious financial position, making the stock a strong sell for any seasoned investor.

Keywords

Food Technology, Food Tech, Ridesharing Technology, Autonomous Vehicles, SEC Filing, 10-Q/A, Quarterly Report, Asset Sale, Boumarang Inc., Supa Food Services LLC, Going Concern, Financial Results, Corporate Strategy, Intellectual Property, Capital Raise