10-Q: BioForce Nanosciences Reports Q2 Loss Amid Zero Revenue

BioForce Nanosciences Holdings, Inc. reported a significant net loss of over $1 million for the first half of 2025, driven by a liability settlement, with no sales revenue generated.

Summary

• Net loss for the six months ended June 30, 2025, was $1,057,431, a substantial increase from $245,253 in the prior year period.
• The increased loss was primarily due to an $801,193 loss on liability settlement from issuing common stock to pay accrued officer and director fees.
• The company generated no sales revenue for both the three and six months ended June 30, 2025, and 2024.
• Total assets were $905 in cash as of June 30, 2025.
• Total liabilities decreased to $384,928 from $2,302,454 at December 31, 2024, largely due to the liability settlement.
• The company has an accumulated deficit of $162,177,597 and a working capital deficit of $384,023.
• Management identified material weaknesses in internal controls, including inadequate segregation of duties and a lack of review in the financial reporting process.

Sentiment

Score: 1

Explanation: The company is in a dire financial state with no revenue, significant losses, minimal cash, and material weaknesses in internal controls, raising substantial doubt about its ability to continue as a going concern. Its reliance on related party funding is unsustainable for long-term operations.

Positives

• Total liabilities decreased significantly from $2,302,454 at December 31, 2024, to $384,928 at June 30, 2025, primarily due to the settlement of accrued compensation with common stock.
• The company operates under consignment terms with its private label manufacturer, meaning it only pays for products when sold, which reduces inventory risk.
• Officers and related parties continue to provide financial support through loans and advances to cover operational expenses.

Negatives

• Reported a net loss of $1,057,431 for the six months ended June 30, 2025, significantly higher than the $245,253 loss for the same period in 2024.
• Generated no sales revenue for the three and six months ended June 30, 2025, and 2024.
• Cash balance remains extremely low at $905 as of June 30, 2025.
• Accumulated deficit increased to $162,177,597.
• Net cash used in operating activities increased to $43,108 for the six months ended June 30, 2025, from $30,973 in the prior year.
• Incurred an $801,193 loss on liability settlement due to the issuance of common stock at a market value higher than the accrued liabilities it settled.

Risks

• The company has reported recurring losses from operations, has net current liabilities, and an accumulated deficit, raising substantial doubt about its ability to continue as a going concern.
• Insufficient cash position to support daily operations, requiring additional capital or a change in business plan to avoid ceasing operations.
• Disclosure controls and procedures were not effective as of June 30, 2025, due to identified material weaknesses.
• Internal control over financial reporting was not effective as of June 30, 2025, due to inadequate segregation of duties within cash disbursement control and a lack of review in the financial reporting process.
• The company is dependent on additional financing to meet continuing obligations and attain profitability, with no assurances that such financing can be obtained.
• The company's future success is dependent on the general economy.
• The company's previous business (nano-particular measurement devices and molecular printers) failed, leading to bankruptcy of that subsidiary.
• The distributor owns the rights to the formula for the BioForce Eclipse product, potentially limiting the company's control or ability to source more cost-effectively.

Future Outlook

The company intends to implement a dynamic marketing campaign, including direct marketing and B2B sales, to drive business growth for its BioForce Eclipse nutritional powder, with eventual expansion throughout the entire United States. It plans to approach retail stores, health food stores, sporting goods stores, supermarkets, mass merchandisers, and online platforms to create vendor relationships. The company also continues to advance its social media platform with direct online and targeted advertisements. Management believes these actions, along with generating revenues, provide the opportunity to continue as a going concern, but acknowledges no assurances can be given.

Management Comments

• "Management believes that the actions presently being taken to further implement the Company’s business plan; to expand sales with a dynamic marketing campaign and generate revenues provide the opportunity for the Company to continue as a going concern."
• "Unless the Company is able to raise working capital, it is likely that the Company will either have to cease operations or substantially change its methods of operations or change its business plan."
• "The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company, or any of its subsidiaries operating results, financial position, or cash flow."

Industry Context

The company operates in the highly competitive vitamin, mineral, and nutritional supplements market. While the market is large and diverse, the company's current lack of revenue and minimal cash reserves indicate it is struggling to establish a foothold or compete effectively. Its strategy of private labeling and consignment terms is common for small players entering the market, but without significant marketing and sales execution, it faces an uphill battle against established brands and larger competitors.

Comparison to Industry Standards

• The company's zero revenue and significant net losses are far below industry standards for a going concern in the nutritional supplements market, where companies like Herbalife Nutrition Ltd. (HLF) or GNC Holdings, Inc. (historically public) generate hundreds of millions to billions in revenue.
• Its cash balance of $905 is negligible compared to operational needs, whereas successful companies maintain substantial working capital and cash reserves for operations, marketing, and R&D.
• The reliance on related party loans and share issuances to cover basic expenses is a red flag, indicating an inability to secure traditional financing or generate sufficient internal cash flow, unlike well-capitalized industry peers.
• The identified material weaknesses in internal controls and disclosure procedures are a significant governance concern, contrasting sharply with the robust financial controls expected of publicly traded companies, regardless of size.

Corporate Governance

Related Party Transactions

• The company utilizes services from Yes International Inc., controlled by Director Richard Kaiser, at no cost except for press release wire services and filing fees ($1,780 for six months ended June 30, 2025).
• The company operates out of Yes International Inc. offices at no cost.
• Two board members paid company expenses: $3,152 for the six months ended June 30, 2025, and $30,927 for the same period in 2024.
• Mr. Merle Ferguson was issued 4,250,000 shares of common stock to reimburse him for $2,173,000 in accrued compensation and amounts due.
• Mr. Richard Kaiser allowed Mr. Ferguson to assume $22,154 of his accrued liabilities.
• Mr. Ferguson loaned $40,000 to the company during the six months ended June 30, 2025.
• Due to related parties was $57,213 at June 30, 2025, down from $274,101 at December 31, 2024.
• A related party (Merle Ferguson) advanced $11,000 to the company on August 1, 2025, for operational and professional service expenses.

Stakeholder Impact

• Shareholders: Significant dilution from the issuance of 4,250,000 common shares to settle liabilities. Continued losses and going concern doubt pose a high risk to investment value.
• Employees: The company's precarious financial position and reliance on related party funding suggest instability, potentially impacting job security or future compensation.
• Creditors: While liabilities decreased due to equity settlement, the ongoing lack of revenue and cash flow raises concerns about the company's ability to meet future obligations.
• Suppliers: The company's consignment terms with its manufacturer mitigate some risk for that specific supplier, but overall financial instability could affect relationships with other potential suppliers.

Next Steps

• Implement a dynamic marketing campaign for BioForce Eclipse nutritional powder.
• Expand marketing efforts with direct marketing and B2B sales campaigns.
• Approach retail stores, health food stores, sporting goods stores, supermarkets, mass merchandisers, and online platforms to create vendor relationships.
• Continue to advance social media platforms with direct online and targeted advertisements.
• Seek additional financing to meet continuing obligations and attain profitability.
• Address identified material weaknesses in disclosure controls and internal control over financial reporting.
• Complete due diligence and execute a definitive agreement for the proposed acquisition of Element Global, Inc. assets.
• Redomicile BioForce Nanosciences Holdings, Inc. from Nevada to Wyoming.

Key Dates

Recommendation

The company exhibits severe financial distress with zero revenue, substantial and increasing net losses, and a critically low cash balance. The explicit 'going concern' doubt, coupled with material weaknesses in internal controls, indicates fundamental operational and financial instability. While liabilities were reduced through equity issuance, this came at a significant cost (loss on liability settlement) and signals an inability to secure traditional financing. The reliance on related party funding is unsustainable. Without a clear path to revenue generation and profitability, the company faces a high probability of ceasing operations or undergoing drastic, value-destructive changes. This filing presents a highly unfavorable outlook for investors.

Keywords

Nutritional Supplements, Vitamins, Minerals, Health and Wellness, BioForce Eclipse, SEC Filing, 10-Q, Quarterly Report, Going Concern, Financial Performance, Publicly Traded, Small Cap, OTC Markets