10-K: Two Hands Corp. Reports 2025 Fiscal Year Results

Two Hands Corporation filed its annual report for the fiscal year ended December 31, 2025, detailing operational changes, financial performance, and future outlook.

Summary

• Two Hands Corporation has filed its Form 10-K for the fiscal year ended December 31, 2025.
• The company is undergoing a strategic shift, evaluating opportunities in digital assets, fintech, and the gig economy, while also attempting to reinvigorate its legacy business.
• Discussions for a new business venture in artisan crafted denim with Videlia Mills ceased mid-2025.
• The company's wholesale food distribution branch, Cuore Food Services, continues operations.
• No research and development costs were incurred in fiscal years 2025 and 2024.
• The company's common stock trades on the OTC Pinks under the symbol TWOH.
• The company reported a net loss of $484,854 for the year ended December 31, 2025, an improvement from a net loss of $2,433,970 in 2024.
• Total operating expenses decreased by 13% to $1,057,326 in 2025 from $1,217,145 in 2024, primarily due to reduced salaries and consulting fees, offset by increased professional fees.
• Cash used in operating activities significantly increased to $807,887 in 2025 from $250,503 in 2024.
• Financing activities provided $1,093,686 in cash in 2025, up from $228,750 in 2024, largely due to advances from related parties.
• As of December 31, 2025, the company had $227,585 in cash and a working capital deficiency of $2,010,465.
• The company's independent auditors have raised substantial doubt about its ability to continue as a going concern.
• The company plans to spend approximately $300,000 in cash over the next 12 months for operations, legal, and accounting services.
• Discussions are ongoing with investors for private loans and an equity line of credit.
• The company has identified material weaknesses in its internal control over financial reporting, including inadequate segregation of duties and insufficient written policies and procedures.

Sentiment

Score: 2

Explanation: StockSavvy.ai views this filing as negative due to the significant net loss, increased cash burn from operations, substantial working capital deficiency, and the auditor's going concern warning, despite some cost-saving measures and strategic exploration.

Positives

• Net loss improved significantly to $484,854 in 2025 from $2,433,970 in 2024.
• Total operating expenses decreased by 13% to $1,057,326 in 2025 from $1,217,145 in 2024.
• Cash provided by financing activities increased substantially to $1,093,686 in 2025 from $228,750 in 2024.
• The company has been able to secure financing to continue operations since its inception.
• The company is actively exploring new business ventures in digital assets, fintech, and the gig economy.
• The company's common stock is listed on the Canadian Securities Exchange (CSE) under the symbol TWOH.

Negatives

• The company incurred a net loss of $484,854 for the year ended December 31, 2025.
• Cash used in operating activities increased significantly to $807,887 in 2025 from $250,503 in 2024.
• The company has a working capital deficiency of $2,010,465 as of December 31, 2025.
• Substantial doubt exists regarding the company's ability to continue as a going concern.
• The company identified material weaknesses in its internal control over financial reporting.
• Discussions for a new business venture in artisan crafted denim with Videlia Mills ceased mid-2025.
• The company's financial statements do not include any adjustments that might result from the outcome of the going concern uncertainty.

Risks

• The company's failure to adequately protect personal information and breaches in cybersecurity and data protection could adversely affect its business.
• Evolving data protection and privacy laws and regulations may limit or inhibit the company's ability to operate or expand its business.
• Any perception of privacy or security concerns, even if unfounded, may result in additional cost and liability, harm its reputation, and inhibit adoption of its products.
• The company's security measures remain vulnerable to threats posed by hackers and criminals.
• If the company needs additional capital in the next twelve months and cannot raise it on acceptable terms, it may have to curtail operations or terminate its business entirely.
• The inability to obtain financing or generate sufficient cash from operations could require the company to reduce or eliminate expenditures for developing products and services.
• The company's common stock trades on a sporadic and limited basis on the OTC Pinks.
• The company's financial statements have been prepared assuming it will continue as a going concern, but substantial doubt exists about its ability to do so.
• Remediation efforts for internal control weaknesses are largely dependent upon securing additional financing.

Future Outlook

The company is evaluating opportunities both inside and outside the food industry, including ventures within the digital asset, fintech, and gig economy spaces. Over the next 12 months, the company expects to spend approximately $300,000 for operations, legal, accounting, and related services. They are also in discussions with investors for private loans and an equity line of credit. The company hopes to compensate independent contractors with stock-based compensation to conserve cash.

Management Comments

• In June 2025, the Company announced, after fully evaluating the legacy business, the Company is taking steps to reinvigorate it and establish a new pathway in the same business space.
• The Company will continue to evaluate opportunities both inside and outside the food industry, including, but not limited to, ventures within the digital asset, fintech and gig economy spaces.
• Management believes that its sustained focus on delivering ever-changing value deals will generate strong customer loyalty and brand affinity.
• Management believes that its broad customer appeal supports new store growth opportunities, and it plans to continue to expand its reach to additional customers and geographies across Canada.
• We believe we maintain an information technology and cybersecurity program appropriate for a company our size, taking into account our operations and risks.
• We are committed to cybersecurity and vigilantly protecting all our resources and information from unauthorized access.
• The Company is continuing to focus improving cash flows from operations by reducing incentives to customers, by making purchases from different suppliers, accelerating the collection of accounts receivable, reducing expenses, managing accounts payable balances and by paying our officers, directors, consultants and staff with our stock.
• We expect to be able to secure additional capital through advances from our Chief Executive Officer in order to pay expenses such as organizational costs, filing fees, accounting fees and legal fees, however, we do not have any written or oral agreements with any other third parties which require them to fund our operations.
• If we need additional capital in the next twelve months and if we cannot raise such capital on acceptable terms, we may have to curtail our operations or terminate our business entirely.

Industry Context

StockSavvy.ai notes that Two Hands Corporation's pivot towards digital assets, fintech, and the gig economy aligns with broader industry trends of digital transformation and the exploration of new revenue streams. However, the company's continued focus on its legacy food distribution business, Cuore Food Services, suggests a dual strategy. The challenges in the food service market, as indicated by the company's competition with larger entities, highlight the need for strategic diversification.

Comparison to Industry Standards

• The company's sales of $709,526 for the year ended December 31, 2025, represent a complete cessation of sales from the prior year's business model, which is a significant deviation from typical revenue generation for established food service distributors.
• The reported net loss of $484,854 and a working capital deficiency of $2,010,465, coupled with substantial doubt about going concern, indicate financial performance significantly below industry standards for companies in the food distribution sector, which generally aim for profitability and positive working capital.
• The company's operating expenses of $1,057,326, while reduced by 13% from the prior year, still represent a substantial outflow relative to its current sales and net loss, suggesting potential inefficiencies compared to industry benchmarks where operating expenses are typically managed to support profitable revenue streams.
• The significant increase in cash used in operating activities to $807,887 in 2025, compared to $250,503 in 2024, is a negative indicator when compared to industry standards that strive for positive or manageable operating cash flows.
• The company's reliance on advances from related parties for financing, totaling $1,093,686 in 2025, contrasts with industry norms where companies typically access capital markets or traditional lending institutions for funding, suggesting a less robust financial standing.

Management Changes

Corporate Governance

Legal Proceedings

• The company may from time to time be involved in various claims and legal proceedings of a nature believed to be normal and incidental to the temporary employee staffing business, including product liability, intellectual property, employment, and personal injury claims. However, the company is not presently a party to any legal proceedings that, in the opinion of management, are likely to have a material adverse effect on its business.

Related Party Transactions

• As of December 31, 2025, $882,632 was due to Emil Assentato, the Company's Chief Executive Officer, comprising $853,100 in advances and $29,532 in interest. These advances earn 8% interest per annum, are unsecured, and due on demand.
• During 2025, the Company issued $853,100 in advances to Emil Assentato, including $635,000 in cash received and $218,100 for expenses paid on behalf of the Company.
• In 2024, advances due to related parties were $62,928, with $45,278 repaid in cash.
• On February 26, 2024, the Company issued common stock to settle a related party debt with a carrying value of $296,000.
• On December 30, 2024, a New Promissory Note was issued to settle accrued salary of $1,392,859 due to Nadav Elituv, the former Chief Executive Officer.
• The company's policy is that transactions with related persons must be on terms no less favorable than could be obtained from non-related persons, though the filing notes these transactions were more favorable than arm's length.

Stakeholder Impact

• Shareholders: Potential dilution from future equity raises, continued uncertainty regarding the company's going concern status, and the impact of management's strategic shifts on future value.
• Creditors/Noteholders: The company's going concern issues and working capital deficiency may impact the ability to meet debt obligations.
• Employees/Contractors: The company's plan to use stock-based compensation for contractors may impact employee morale and retention if not managed carefully. The company's financial instability could also affect job security.
• Suppliers: The company's financial condition and potential operational curtailment could impact its ability to pay suppliers on time.

Next Steps

• Continue to evaluate opportunities both inside and outside the food industry, including ventures within the digital asset, fintech, and gig economy spaces.
• Implement changes to enhance and improve the design of internal control over financial reporting, contingent upon securing additional financing.
• Secure additional capital through advances from the Chief Executive Officer and potentially through private loans and an equity line of credit.
• Implement business plan, which includes approximately $300,000 in cash expenditures for operations, legal, accounting, and related services over the next 12 months.

Key Dates

Recommendation

The company is in a transitional phase with significant financial challenges, including a going concern warning and material weaknesses in internal controls. While exploring new growth areas like digital assets and fintech is positive, the lack of current revenue, substantial losses, and reliance on related-party financing make it a high-risk investment. The 'hold' recommendation reflects the uncertainty and the need for further evidence of successful strategic execution and financial stabilization before considering a buy. Investors should monitor the company's ability to secure financing and execute its new business strategies.

Keywords

Two Hands Corporation, Form 10-K, Annual Report, Financial Statements, Going Concern, Net Loss, Operating Expenses, Financing Activities, Related Party Transactions, Internal Controls, Cuore Food Services, Digital Assets, Fintech, Gig Economy