10-Q: UbuyHoldings Reports Q2 Loss, Cites Going Concern Doubts

UbuyHoldings, Inc., a dormant shell company, reported a net loss of $28,058 for the six months ended November 30, 2025, with management expressing substantial doubt about its ability to continue as a going concern.

Summary

• UbuyHoldings, Inc. is a dormant shell company with no current operations, products, services, customers, or intellectual property.
• Reported a net loss of $7,750 for the three months ended November 30, 2025, and $28,058 for the six months ended November 30, 2025.
• Total assets remain at $0 as of November 30, 2025.
• Total current liabilities increased to $80,783 as of November 30, 2025, from $52,725 as of May 31, 2025.
• Accumulated deficit grew to $14,294,343 as of November 30, 2025, from $14,266,285 as of May 31, 2025.
• The company has $0 cash and cash equivalents as of November 30, 2025.
• Management has identified substantial doubt about the company's ability to continue as a going concern.
• The company plans to seek a business combination, such as a reverse merger or asset purchase, to acquire an operating entity.
• Disclosure controls and procedures, as well as internal control over financial reporting, were deemed ineffective as of November 30, 2025, due to material weaknesses.

Sentiment

Score: 2

Explanation: The company is a dormant shell with no operations, significant accumulated deficit, and substantial doubt about its going concern status. While management plans to seek a business combination, the financial position is extremely weak, and internal controls are ineffective. The need for significant capital raises with high dilution potential further dampens sentiment.

Positives

• Management intends to explore and identify business opportunities, including potential acquisitions through reverse mergers.
• The Custodian is expected to provide financing for the next twelve months to support custodianship operations.
• A related party has advanced $80,783 in the form of an interest-free demand loan as of November 30, 2025, providing some liquidity for current liabilities.

Negatives

• The company is a dormant shell company with no current operations, products, services, customers, or intellectual property.
• Reported a net loss of $28,058 for the six months ended November 30, 2025, compared to no loss in the prior year period.
• Has $0 in cash and cash equivalents as of November 30, 2025.
• Negative working capital of $80,783 as of November 30, 2025.
• Accumulated deficit of $14,294,343 as of November 30, 2025.
• Management has identified substantial doubt about the company's ability to continue as a going concern.
• Disclosure controls and procedures were not effective as of November 30, 2025.
• Internal control over financial reporting was not effective as of November 30, 2025, due to material weaknesses including insufficient segregation of duties, lack of an independent board/audit committee, and no written control documentation.
• Anticipates incurring operating losses in the next 12 months, primarily from SEC reporting costs.
• Does not have sufficient working capital to fund operations over the next 12 months.

Risks

• Limited management, labor, and financial resources.
• Ability to establish and maintain adequate internal controls.
• Ability to develop and maintain a market in its securities.
• Ability to obtain financing, if and when needed, on acceptable terms.
• Potential negative effects of the coronavirus pandemic on the U.S. and global economies.
• Risks inherent in the business and operations of a financially unstable or early-stage entity if a business combination is pursued.
• Lack of diversification due to likely only one business combination, heightening investment risk.
• Difficulty in comparative investigation and analysis of potential business opportunities due to varied industries, regions, and stages of development.
• Competition from other firms seeking business opportunities at discounted rates.
• Dilution to current shareholders from issuing a controlling block of securities to target shareholders in a reverse merger.
• Additional issuances of equity or convertible debt securities will result in further dilution and may have senior rights, preferences, or privileges.
• Inability to take advantage of prospective new business endeavors or opportunities if adequate funds are not available on acceptable terms.
• Risks associated with an evolving and unpredictable business model, recognition of revenue sources, and management of growth in early stages of development.

Future Outlook

Management intends to explore and identify business opportunities within the U.S., primarily through a reverse merger, asset purchase, or similar transaction to acquire an operating entity. The company anticipates incurring operating losses in the next 12 months due to SEC reporting costs and expects to need additional capital to fund operations and any potential business combination. There are no assurances that a viable business strategy will be identified or implemented successfully, or that it will result in profits.

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.
• We undertake no obligation to update publicly any forward-looking statements for any reason, even if new information becomes available or other events occur in the future.
• 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.
• We do not currently engage in any business activities that provide revenue or cash flow.
• 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.
• We anticipate that the selection of a business combination will be a complex and risk-prone process.
• 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.
• We plan to rectify these weaknesses [in internal controls] by implementing an independent board of directors, establishing written policies and procedures for our internal control of financial reporting, and hiring additional accounting personnel at such time as we complete a reverse merger or similar business acquisition.

Industry Context

UbuyHoldings, Inc. operates as a dormant shell company, a common structure used for reverse mergers or acquisitions by private entities seeking public market access. The company's strategy to identify and acquire an operating entity aligns with a trend where private companies leverage existing public shells to bypass traditional IPO processes. However, its lack of current operations, significant accumulated deficit, and internal control weaknesses place it at the lower end of attractiveness within this segment, competing with other firms seeking similar opportunities at discounted rates.

Comparison to Industry Standards

• The company's financial position, with zero assets, zero revenue, and a substantial accumulated deficit, is typical for a dormant shell company.
• The stated intention to pursue a reverse merger or similar business combination is a standard strategy for shell companies, comparable to other entities like Custodian Ventures LLC's other custodianships, which often involve funding and restructuring dormant public entities.
• The identified material weaknesses in internal controls, such as insufficient segregation of duties and lack of an independent board, are common issues for small, non-operating entities with limited resources, but represent significant deviations from best practices for publicly traded companies, even smaller reporting companies.
• The reliance on related party financing is also common for shell companies, but highlights a lack of independent funding sources.

Management Changes

Corporate Governance

Legal Proceedings

• The company may be involved in certain legal proceedings that arise from time to time in the ordinary course of its business.
• 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 balance due of $45,102 concurrently with the sale of Series A-1 Preferred Stock by David Lazar (managing director of Custodian Ventures) to AEI Capital Ltd.
• As of November 30, 2025, a related party had advanced $80,783 in the form of an interest-free demand loan.
• As of May 31, 2025, a related party had advanced $18,584 in the form of an interest-free demand loan.

Stakeholder Impact

• Shareholders: Face significant dilution risk from future capital raises and potential reverse merger transactions. The company's going concern doubt and lack of operations pose substantial risk to investment value.
• Creditors: Related party creditors are currently providing interest-free demand loans, indicating a reliance on internal financing. Unrelated creditors, if any, would face high risk due to the company's weak financial position.
• Employees: Currently minimal, likely limited to management. Future employment depends entirely on successful business combination and operational commencement.
• Customers/Suppliers: Not applicable as the company has no current operations, products, or services.

Next Steps

• Explore and identify business opportunities within the U.S.
• Investigate, evaluate, and negotiate potential business combinations (e.g., reverse merger, asset purchase).
• Incur costs related to SEC reporting.
• Rectify internal control weaknesses by implementing an independent board of directors, establishing written policies and procedures, and hiring additional accounting personnel, contingent on completing a business acquisition.
• Raise capital through debt or equity issuances to fund operations and potential acquisitions.

Key Dates

Recommendation

UbuyHoldings, Inc. is a dormant shell company with no operations, zero assets, and a substantial accumulated deficit. Management explicitly states 'substantial doubt about the Company’s ability to continue as a going concern.' The company has ineffective internal controls and disclosure procedures, indicating severe governance issues. While it plans a reverse merger, this strategy is highly speculative, carries significant dilution risk for existing shareholders, and has no guarantee of success. The current financial state and operational deficiencies present an extremely high-risk profile with no discernible value, making it a strong sell for any existing holders and certainly not a buy.

Keywords

shell company, reverse merger, going concern, financial deficit, corporate governance, internal controls, capital raise, SEC filing, UBUYHOLDINGS, dormant company, business acquisition