10-Q: Loan AI Corp. Reports Q3 Loss, Cites Going Concern Risk

Loan Artificial Intelligence Corp. reported a net loss of $32,641 for Q3 2025, with no revenue and a significant accumulated deficit, raising substantial doubt about its ability to continue as a going concern.

Summary

• The company reported a net loss of $32,641 for the three months ended September 30, 2025, an increase from a net loss of $9,967 for the same period in 2024.
• For the nine months ended September 30, 2025, the net loss was $46,897, compared to $36,851 for the nine months ended September 30, 2024.
• No revenue was generated during any of the periods presented (three and nine months ended September 30, 2025 and 2024).
• Operating expenses for Q3 2025 increased to $32,641 from $9,967 in Q3 2024, primarily due to professional fees and other general and administrative expenses.
• As of September 30, 2025, the company had no cash and a working capital deficit of $157,267.
• The accumulated loss reached $10,549,357 as of September 30, 2025.
• A 1-for-800 reverse stock split and a name change to Loan Artificial Intelligence Corp. became effective on October 30, 2025.
• The company is a developmental stage entity actively seeking a merger or acquisition candidate to establish operations.

Sentiment

Score: 2

Explanation: The company is a developmental stage entity with no revenue, increasing losses, a significant accumulated deficit, and a stated going concern risk. While it has a new name and a stated intention to acquire an operating business, there are no concrete plans, and management lacks experience in acquisitions. The ineffective internal controls further add to the negative sentiment.

Positives

• The company recognized a gain of $7,748 on the disposal of its subsidiary, Fun Fitness Corporation, on December 31, 2023.
• Successfully completed a name change to Loan Artificial Intelligence Corp. and a 1-for-800 reverse stock split, which can be a strategic step towards restructuring or attracting new investment.

Negatives

• The company generated no revenue for the three and nine months ended September 30, 2025, or the comparable periods in 2024.
• Net losses increased significantly, reaching $32,641 for Q3 2025 and $46,897 for the nine months ended September 30, 2025.
• A substantial accumulated deficit of $10,549,357 as of September 30, 2025, indicates a history of unprofitability.
• The company has no cash and a working capital deficit of $157,267 as of September 30, 2025.
• Management explicitly states 'substantial doubt about the Company's ability to continue as a going concern' due to lack of revenue and need for capital.
• Disclosure controls and procedures were deemed not effective as of September 30, 2025, due to a material weakness in the segregation of duties.

Risks

• The company's ability to raise additional capital for its contemplated operational and marketing activities is unknown.
• There is substantial doubt about the company's ability to continue as a going concern without additional financing and successful development of its plan of operations.
• Risks inherent in establishing a new business enterprise include limited capital resources, possible delays in developing hardware and software, and potential new regulations.
• If unable to meet cash needs, the company may have to limit research and development, be unable to continue/develop/expand operations, or be forced to cease operations.
• Current management lacks experience in company acquisitions, which is a key part of the stated business plan.
• Limited capital available for investigation may prevent the discovery or adequate evaluation of adverse facts about potential acquisition opportunities.
• The company will compete against other entities with greater financial, technical, and managerial capabilities for identifying and completing business plans.
• Costs incurred in investigating prospective businesses that are not ultimately completed may result in a loss to the company.
• There is a potential for increased US and China governmental regulations following a transaction, the nature and magnitude of which cannot be predicted.

Future Outlook

The company is a developmental stage entity with no current revenue, actively seeking a merger or acquisition with an operating entity that offers product or service growth potential. Management anticipates continuing to incur moderate losses each quarter until a suitable transaction is completed and hopes to raise capital to fund these acquisitions. The business plan is forward-looking and has not yet been implemented, with current management lacking experience in company acquisitions.

Management Comments

• "We expect to continue to incur moderate losses each quarter until a transaction considered appropriate by management is effectuate."
• "At present financial revenue has not yet been realized."
• "We hope to raise capital in order to fund the acquisitions."
• "Current management does not have any experience in acquisition of companies but is actively looking for a suitable person to incorporate into the management team."
• "The Company's related party will continue to advance the necessary capital to pay the expenses of the Company and there are no formal financing agreements in place."

Industry Context

Loan Artificial Intelligence Corp. operates as a developmental stage company in the financial technology (Fintech) sector, specifically aiming for AI-driven loan solutions, though it currently has no operations or revenue. Its strategy to acquire an operating entity with growth potential is common for shell or developmental companies seeking to establish a market presence. However, the lack of internal expertise in acquisitions and reliance on related party financing for basic operations places it significantly behind established or even emerging players in the competitive AI and Fintech industries.

Comparison to Industry Standards

• The company's complete lack of revenue and significant accumulated deficit are far below industry standards for operating companies in the AI or Fintech sectors.
• Unlike many successful AI/Fintech startups that demonstrate early product development, user acquisition, or revenue generation, Loan Artificial Intelligence Corp. is still in the pre-operational, 'shell' phase, actively searching for a business to acquire.
• Companies like Upstart, SoFi, or even smaller private AI lending platforms typically show robust growth in loan origination, revenue, and often, profitability or a clear path to it, which is absent here.
• The reliance on related party loans for operational expenses is not a sustainable long-term financing model compared to venture capital, institutional debt, or public market funding typically seen in the industry.

Management Changes

Corporate Governance

Legal Proceedings

• The company is not a party to any material legal proceeding, and none are contemplated or threatened.

Related Party Transactions

• Rhonda Keaveney (and Small Cap Compliance, LLC) advanced $9,520 in 2022 and $46,207 in 2023 for company expenses.
• These outstanding amounts were transferred to Raymond Fu upon change of control on August 25, 2023.
• Raymond Fu advanced $30,683 in 2024 and $1,115 in 2023 for company expenses.
• The outstanding amount due to related parties (Raymond Fu) was $110,636 as of September 30, 2025, and $87,525 as of December 31, 2024.
• These advances are due on demand, non-interest bearing, and have no maturity date.

Stakeholder Impact

• Shareholders face significant risk due to the company's going concern doubt, lack of revenue, increasing losses, and reliance on related party financing. The reverse stock split may impact share price and liquidity.
• Creditors, primarily Raymond Fu, are advancing capital to cover expenses, indicating a high level of financial support but also exposure to the company's financial distress.
• Potential acquisition targets may be hesitant to engage with a company in such a precarious financial state and with management lacking acquisition experience.
• Employees (limited staff) may experience operational strain and a lack of robust internal controls due to the identified material weakness in segregation of duties.

Next Steps

• Identify and implement a business plan, specifically a merger with or acquisition of an operating entity that offers product or service growth potential.
• Raise additional capital to fund acquisitions and ongoing operations.
• Incorporate a suitable person with acquisition experience into the management team.
• Address the material weakness in internal controls related to segregation of duties.

Key Dates

Recommendation

The company is a developmental stage entity with no revenue, increasing losses, and a substantial accumulated deficit, explicitly stating "substantial doubt about the Company's ability to continue as a going concern." It has no cash, a growing working capital deficit, and relies entirely on related party advances for operations. Furthermore, management lacks experience in acquisitions, and internal controls are deemed ineffective due to a material weakness. These factors present an extremely high-risk profile with no clear path to profitability or sustainable operations, making it an unsuitable investment for seasoned investors.

Keywords

Loan Artificial Intelligence, AI, Fintech, Developmental Stage Company, Reverse Stock Split, Going Concern, SEC Filing, 10-Q, Corporate Governance, Related Party Transactions, Merger and Acquisition Search, OTC Markets