10-Q: UBUYHOLDINGS Reports Q1 Loss, Cites Going Concern Risk

UBUYHOLDINGS, a dormant shell company, reported a net loss of $20,308 for Q1 2026, raising substantial doubt about its ability to continue as a going concern.

Summary

• UBUYHOLDINGS, Inc. is a dormant shell company with no current operations, products, or services, having been dormant since 2001.
• Reported a net loss of $20,308 for the three months ended August 31, 2025, compared to no loss in the prior year period.
• Operating expenses for the quarter were $20,308, up from $0 in the same period last year.
• Total assets remain at $0 as of August 31, 2025.
• Cash and cash equivalents were $0 at the end of the period.
• Accumulated deficit increased to $14,286,593 as of August 31, 2025, from $14,266,285 as of May 31, 2025.
• Negative working capital of $73,033 as of August 31, 2025.
• Management has identified substantial doubt about the company's ability to continue as a going concern.
• The company relies on financing from related parties, with notes payable to related parties increasing to $62,975 from $18,584.
• Management intends to explore business opportunities, including potential acquisitions via reverse merger, but has not had discussions with any entities yet.
• Disclosure controls and procedures were deemed not effective as of August 31, 2025.
• Internal control over financial reporting was deemed not effective due to material weaknesses, including insufficient segregation of duties, lack of an independent board/audit committee, and no written control policies.

Sentiment

Score: 2

Explanation: The company is a dormant shell with no operations, reporting losses and significant accumulated deficit. It faces substantial doubt about its ability to continue as a going concern and has ineffective internal controls. While it has a plan to seek a reverse merger, this is highly speculative and comes with significant dilution risks and uncertainty regarding financing.

Positives

• Accounts payable and accrued liabilities decreased to $10,058 as of August 31, 2025, from $34,141 as of May 31, 2025.
• The company expects its Custodian to provide financing for the next twelve months, mitigating immediate liquidity concerns.

Negatives

• Reported a net loss of $20,308 for the three months ended August 31, 2025, compared to $0 in the prior year period.
• Operating expenses increased to $20,308 for the quarter, from $0 in the same period last year.
• Total assets remain at $0.
• Cash and cash equivalents are $0.
• Accumulated deficit increased to $14,286,593.
• Negative working capital of $73,033.
• Notes payable to related parties increased to $62,975 from $18,584.
• Substantial doubt exists about the company's ability to continue as a going concern.
• Disclosure controls and procedures were not effective.
• Internal control over financial reporting was not effective due to material weaknesses.
• The company has no current operations, products, services, customers, or intellectual property.
• Anticipates operating losses in the next 12 months.
• Insufficient working capital to fund operations over the next 12 months.

Risks

• Substantial doubt about the ability to continue as a going concern due to lack of cash, net loss, negative working capital, and accumulated deficit.
• Limited management, labor, and financial resources.
• Challenges in establishing and maintaining adequate internal controls.
• Difficulty in developing and maintaining a market in its securities.
• Uncertainty in obtaining financing, if and when needed, on acceptable terms.
• Potential negative effects of the coronavirus pandemic on the U.S. and global economies.
• Risks associated with acquiring a financially unstable or early-stage entity through a business combination.
• Lack of diversification if only one business combination is effected, posing substantial investment risk.
• Complexity and risk-prone nature of selecting a business combination.
• Dilution to current shareholders from future issuances of equity or convertible debt securities, especially a controlling block to target shareholders in a reverse merger.
• New securities might have rights, preferences, or privileges senior to Common Stock.
• Inability to take advantage of prospective new business endeavors if adequate funds are not available.
• Risks inherent in early-stage development companies, including an evolving and unpredictable business model, recognition of revenue sources, and management of growth.
• Failure to develop, implement, and successfully execute a business and marketing strategy, respond to competitive developments, and attract/retain qualified personnel.

Future Outlook

Management intends to explore and identify business opportunities within the U.S., including potential acquisitions of operating entities through reverse mergers, asset purchases, or similar transactions. The company anticipates incurring costs related to these activities and SEC reporting, expecting operating losses in the next 12 months. It also expects to need additional capital, likely through debt or equity issuances, which could be significantly dilutive to current shareholders, especially in a reverse merger scenario.

Management Comments

• Our forward-looking statements are based on assumptions that may be incorrect, and there can be no assurance that any projections or other expectations included in any forward-looking statements will come to pass.
• Our forward-looking statements are subject to various known and unknown risks, uncertainties and other factors that may cause our actual results, performance, or achievements to be materially different from future results, performance or achievements expressed or implied by any forward-looking statements.
• The Company has no operations at this time and currently does not have any principal products or services, customers, or intellectual property.
• Management intends to explore and identify business opportunities within the U.S., including a potential acquisition of an operating entity through a reverse merger, asset purchase, or similar transaction.
• Our Chief Executive Officer has experience in business consulting, although no assurances can be given that he can identify and implement a viable business strategy or that any such strategy will result in profits.
• As of the date of this Report, our management has not had any discussions with any representative of any other entity regarding a potential business combination.
• Our management anticipates that we will likely only be able to effect one business combination due to our limited capital. This lack of diversification will likely pose a substantial risk in investing in the Company for the indefinite future.
• Based upon our current operations, we do not have sufficient working capital to fund our operations over the next 12 months.
• If we are able to close a reverse merger, it is likely that we will need capital as a condition of closing that acquisition.
• Because of the uncertainties, we cannot be certain as to how much capital we need to raise or the type of securities we will be required to issue.
• In connection with a reverse merger, we will be required to issue a controlling block of our securities to the targets shareholders which will be very dilutive.
• Additional financing may not be available on acceptable terms, or at all.
• Our prospects must be considered in light of the risks, expenses and difficulties frequently encountered by companies in their early stage of development.
• Management has determined that their disclosure controls and procedures were not effective as of August 31, 2025.
• Our management assessed the effectiveness of our internal control over financial reporting... and has concluded that as of August 31, 2025, our internal control over financial reporting was not effective.

Industry Context

UBUYHOLDINGS operates as a dormant shell company, a common structure for entities seeking to acquire an operating business, often through a reverse merger, to gain access to public markets. This strategy is typically employed by companies with limited or no current operations, relying heavily on future business combinations and external financing. The company's current state reflects the challenges of such entities, including significant accumulated deficits, lack of revenue, and reliance on related-party funding, which are typical for pre-operational shell companies.

Comparison to Industry Standards

• The company's financial position, with $0 in assets, $0 cash, and a significant accumulated deficit, is typical for a dormant shell company that has ceased operations and is seeking a new business.
• The reported net loss of $20,308 for the quarter, while small in absolute terms, is significant given the company's lack of revenue and operations, indicating ongoing administrative costs without offsetting income.
• The reliance on related-party financing for operational expenses and the explicit 'going concern' warning are standard disclosures for companies in this pre-revenue, pre-operational stage, highlighting the inherent financial instability.
• The ineffectiveness of disclosure controls and internal control over financial reporting, attributed to limited resources and lack of an independent board/audit committee, is a common issue for small, non-operating entities but represents a significant governance weakness compared to established public companies.
• The plan to seek a reverse merger is a common strategy for shell companies, but the stated risks of dilution and difficulty in securing financing are universal challenges in this segment.

Management Changes

Corporate Governance

Legal Proceedings

• The company's officers and directors are not aware of any threatened or pending litigation that would have any material, adverse effect on the company.

Related Party Transactions

• Custodian Ventures, the company's Custodian, advanced $45,102 in an interest-free demand loan as of May 31, 2024.
• On December 6, 2023, and January 5, 2024, the company awarded Custodian Ventures with two classes of Preferred Stock for services performed and to cancel advances.
• On June 20, 2024, Custodian Ventures forgave the $45,102 debt concurrently with the sale of Series A-1 Preferred Stock by David Lazar (managing director of Custodian Ventures) to AEI Capital Ltd.
• A related party advanced $62,975 as of August 31, 2025, in the form of an interest-free demand loan, up from $18,584 as of May 31, 2025.

Stakeholder Impact

• Shareholders face significant dilution risk from future capital raises and potential reverse merger. Current shares have no market value given the company's dormant status and $0 assets. Investment is highly speculative.
• Creditors (Related Parties) are currently providing financing through interest-free demand loans, indicating a high level of financial support and exposure to the company's going concern risk.
• Management is focused on identifying and executing a business combination, facing challenges of limited resources and the need to establish effective internal controls.
• Potential Future Employees/Customers/Suppliers: Currently none, but future operations would depend on successful business combination.

Next Steps

• Management intends to explore and identify business opportunities within the U.S.
• Potential acquisition of an operating entity through a reverse merger, asset purchase, or similar transaction.
• Incurring costs in connection with investigating, evaluating, and negotiating potential business combinations.
• Filing SEC reports.
• Consummating an acquisition of an operating business.
• Implement an independent board of directors.
• Establish written policies and procedures for internal control of financial reporting.
• Hire additional accounting personnel upon completion of a reverse merger or similar business acquisition.

Key Dates

Recommendation

UBUYHOLDINGS is a dormant shell company with no operations, no assets, and a significant accumulated deficit. It reported a net loss for the quarter and explicitly states substantial doubt about its ability to continue as a going concern. The company's disclosure controls and internal financial controls are deemed ineffective, indicating severe governance issues. While management plans a reverse merger, this is highly speculative, carries extreme dilution risk for existing shareholders, and there are no current discussions with potential targets. The company has insufficient working capital for the next 12 months and relies on related-party financing. Given the complete lack of operational activity, severe financial distress, and significant governance weaknesses, the stock represents an extremely high-risk, speculative investment with a high probability of further value erosion or complete loss of investment.

Keywords

UBUYHOLDINGS, 10-Q, Quarterly Report, SEC Filing, Shell Company, Going Concern, Net Loss, Financial Reporting, Internal Controls, Reverse Merger, Capital Raise, Corporate Governance, David Lazar, John Tan Honjian, Mohd Azham bin Azudin, AEI Capital Ltd., Nevada Corporation, E-commerce, Dormant Company