10-K: Two Hands Corporation Reports Fiscal Year 2024 Results, Announces Strategic Repositioning

Two Hands Corporation reports a net loss for fiscal year 2024 and announces a strategic shift away from wholesale food distribution to focus on artisan denim and premium cotton yarns.

Summary

• Two Hands Corporation reported its financial results for the fiscal year ended December 31, 2024.
• The company incurred a net loss of $2,433,970 and used cash in operating activities of $250,503.
• As of December 31, 2024, the company had a stockholders' deficit of $3,568,234 and cash of $1,733.
• The company is transitioning away from its legacy wholesale food distribution business (Cuore Food Services).
• The company is entering a new business in the artisan crafted denim and premium combed Pima cotton yarns space in cooperation with Videlia Mills.
• Sales decreased by 9% from $783,489 in 2023 to $709,526 in 2024.
• The company's independent auditor has raised substantial doubt about its ability to continue as a going concern.
• The company is seeking additional capital through advances from its Chief Executive Officer and private loans.
• The company plans to compensate independent contractors with stock-based compensation.
• The company's disclosure controls and procedures were not effective as of the end of the period covered by this annual report.

Sentiment

Score: 3

Explanation: The document indicates significant financial difficulties and a transition to a new business, suggesting a negative outlook despite efforts to reposition the company.

Positives

• The company is strategically repositioning for future growth outside of the wholesale food distribution branch.
• Net loss decreased from $8,163,662 in 2023 to $2,433,970 in 2024.
• Total operating expenses decreased from $1,341,299 in 2023 to $1,217,145 in 2024.

Negatives

• The company incurred a net loss of $2,433,970 for the fiscal year ended December 31, 2024.
• The company's cash position as of December 31, 2024, was $1,733.
• The company's independent auditor has raised substantial doubt about its ability to continue as a going concern.
• The company's disclosure controls and procedures were not effective as of the end of the period covered by this annual report.
• Sales decreased by 9% from $783,489 in 2023 to $709,526 in 2024.

Risks

• The company's ability to continue as a going concern is in substantial doubt.
• The company's operating capital is limited, and it may be difficult to secure capital in the future.
• The company may fail to attract, train, and retain skilled and qualified employees.
• The company may encounter difficulties managing its planned growth.
• Material weaknesses in the company's internal control over financial reporting may adversely affect its common shares.
• The company's stock price is likely to be highly volatile because of several factors, including a limited public float.
• The company's failure to protect personal information adequately and breaches in cyber security and data protection could have an adverse effect on its business.

Future Outlook

The company plans to focus on the artisan crafted denim and premium combed Pima cotton yarns space in cooperation with Videlia Mills and is seeking additional capital to implement its business plan.

Industry Context

The company competes with other wholesalers within the food service market segment, facing challenges from entities with significant resources for expansion. The company is transitioning away from this market.

Management Changes

Related Party Transactions

• As of December 31, 2023, advances and accrued salary of $883,534 were due to Nadav Elituv, the Company's former Chief Executive Officer.
• During the year ended December 31, 2024, the Company issued advances due to related party for $62,928 for expenses paid on behalf of the Company and advances due to related party were repaid by the Company with $45,278 in cash.
• On February 26, 2024, the Company issued common stock to settle due to related party with a carrying value of $296,000.
• On December 30, 2024, the Company issued a New Promissory Note to settle accrued salary of $1,392,859 due to Nadav Elituv.

Stakeholder Impact

• Shareholders may experience dilution due to potential future equity issuances.
• Employees may be affected by the strategic repositioning and potential changes in operations.
• Creditors face increased risk due to the company's financial difficulties and going concern uncertainty.

Next Steps

• The company plans to focus on the artisan crafted denim and premium combed Pima cotton yarns space in cooperation with Videlia Mills.
• The company is seeking additional capital through advances from its Chief Executive Officer and private loans.
• The company plans to compensate independent contractors with stock-based compensation.
• The company plans to take steps to enhance and improve the design of its internal control over financial reporting.

Key Dates

Keywords

financial results, going concern, net loss, strategic repositioning, wholesale food distribution, artisan denim, Pima cotton yarns, Two Hands Corporation, Cuore Food Services