10-Q: Integrated Ventures Reports Dismal Q2 Results Amid Shift to Health and Wellness Sector

Integrated Ventures reports a net loss and a decline in revenue due to the disconnection of their mining operations, while transitioning into the health and wellness sector.

Summary

• Integrated Ventures, Inc. filed its Form 10-Q for the quarter ended December 31, 2024.
• The company is transitioning from digital asset mining to the health and wellness sector.
• Digital asset mining operations were disconnected on June 6, 2024, leading to a decrease in revenue from this source.
• The company acquired 51% of Healthy Lifestyle USA LLC in August 2024, marking its entry into the health and wellness market.
• For the three months ended December 31, 2024, digital asset mining revenue was $0 compared to $1,728,108 in the same period of 2023.
• Online sales revenue increased to $9,589 for the three months ended December 31, 2024, compared to $0 in 2023.
• Commission revenue was $133,272 for the three months ended December 31, 2024, compared to $0 in 2023.
• The company reported a net loss attributable to shareholders of $1,874,833 for the six months ended December 31, 2024.
• As of December 31, 2024, the company's digital assets at fair value totaled $537,732, comprised of Bitcoin.
• The company's current liabilities exceeded its current assets by $2,289,041, and it had an accumulated deficit of $86,956,693 as of December 31, 2024.
• There is substantial doubt about the company's ability to continue as a going concern.

Sentiment

Score: 3

Explanation: The document presents a negative outlook due to significant losses, disconnection of mining operations, and concerns about the company's ability to continue as a going concern. The shift to the health and wellness sector is a potential positive, but its success is uncertain.

Positives

• The company has entered the health and wellness sector through the acquisition of Healthy Lifestyle USA LLC, potentially diversifying its revenue streams.
• Online sales and commission revenues have increased due to the new health and wellness operations.
• The company terminated the hosting and power purchase agreement, which resulted in the forgiveness of $843,544 of payables and a payment to the company of $87,000.

Negatives

• Digital asset mining operations were disconnected, resulting in a significant decrease in revenue.
• The company reported a net loss attributable to shareholders of $1,874,833 for the six months ended December 31, 2024.
• Current liabilities exceed current assets by $2,289,041, and the company has an accumulated deficit of $86,956,693.
• There is substantial doubt about the company's ability to continue as a going concern.
• The company identified material weaknesses in its internal control over financial reporting.

Risks

• The company's ability to continue as a going concern is uncertain.
• The company's reliance on raising capital through debt and/or equity markets is a risk.
• Material weaknesses in internal control over financial reporting could lead to misstatements in financial statements.
• The company's success in the health and wellness sector is not guaranteed.
• The company's digital assets are subject to market fluctuations.

Future Outlook

The company is considering options for its bitcoin miners, including selling and purchasing newer models, reconnecting current miners on a revenue share basis, or selling and deploying capital to support newly launched health and wellness operations.

Management Comments

• Management plans to address the structure of the Board of Directors and discuss adding an audit committee during the fiscal year ending June 30, 2025.

Industry Context

The company's shift to the health and wellness sector reflects a broader trend of diversification among companies in the digital asset space, as they seek to mitigate risks associated with the volatile cryptocurrency market.

Comparison to Industry Standards

• It is difficult to compare Integrated Ventures directly to industry standards due to its unique combination of digital asset mining and its recent entry into the health and wellness sector.
• However, other companies in the cryptocurrency mining industry, such as Marathon Digital Holdings and Riot Platforms, are often benchmarked against metrics like hashrate, energy efficiency, and Bitcoin production cost.
• Integrated Ventures' decision to disconnect its mining operations and explore alternative strategies reflects a response to challenges such as high energy costs and technological obsolescence, which are common concerns in the industry.
• In the health and wellness sector, companies like Teladoc Health and Amwell are key players in telemedicine, and their financial performance and growth strategies could provide some context for evaluating Integrated Ventures' new venture.

Related Party Transactions

• Mr. Rubakh is paid an annual salary established by the Board of Directors, cash bonuses as determined by the Board of Directors, and is issued shares of Series B preferred stock on a quarterly basis for additional compensation.
• Effective January 1, 2024 the Board of Directors approved Mr. Rubakhs annual salary to be $250,000, quarterly cash bonus to be $100,000, and canceled quarterly Preferred B shares issuances.
• Amounts due to related party, consisting of accrued salary to Mr. Rubakh, totaled $113,627, and $46,771 as of December 31, 2024 and June 30, 2024, respectively.

Stakeholder Impact

• Shareholders face uncertainty due to the company's financial losses and going concern doubts.
• Employees may be affected by potential changes in business operations and restructuring.
• Customers of the health and wellness business may experience changes as the company integrates Healthy Lifestyle USA LLC.

Next Steps

• The company is considering options for its bitcoin miners, including selling and purchasing newer models, reconnecting current miners on a revenue share basis, or selling and deploying capital to support newly launched health and wellness operations.
• Management plans to address the structure of the Board of Directors and discuss adding an audit committee during the fiscal year ending June 30, 2025.

Key Dates