Adapti Pivots to Sports Tech, Reports Soaring Revenue and Deepening Losses

TL;DR

**Adapti's massive revenue jump from its sports agency acquisition is exciting, but the 'going concern' warning and ballooning losses mean this is a high-stakes gamble, not a sure bet.**

AI Summary

Adapti, Inc. (ADTI) reported a significant strategic shift and financial changes for the quarter ended September 30, 2025. The company transitioned from health and beauty products to sports management and technology, marked by the acquisition of The Ballengee Group, LLC on July 14, 2025, for a total consideration of $27,500,000, including 6,500,000 shares of common stock valued at $20,000,000 and a $7,500,000 promissory note. Revenues surged to $2,131,437 for the three months ended September 30, 2025, a dramatic increase from $2,030 in the same period last year, primarily due to the Ballengee acquisition. Despite this revenue growth, the company posted a net loss of $2,596,318 for the quarter, significantly wider than the $152,042 loss in Q3 2024, driven by increased operating expenses, particularly professional fees of $2,620,086. Adapti also reported a substantial accumulated deficit of $12,403,776 as of September 30, 2025, and a working capital deficit of $781,054, raising a 'going concern' doubt. The company is developing AdaptAI, an AI-driven platform for brand-influencer matching, anticipated for launch by December 31, 2026, contingent on securing sufficient funding.

Why It Matters

This filing reveals Adapti's aggressive pivot into the competitive sports management and AI technology space, a high-risk, high-reward strategy. For investors, the massive revenue increase post-acquisition is a positive signal, but it's overshadowed by a significantly widened net loss and a 'going concern' warning, indicating substantial financial instability. Employees of Ballengee Group are now part of a company with ambitious tech development plans, while customers (athletes and brands) will be watching the development of the AdaptAI platform for competitive advantages. The broader market will observe if Adapti can successfully integrate its acquisition and launch its AI platform to challenge established players in sports marketing.

Risk Assessment

Risk Level: high — The company explicitly states a 'going concern' doubt due to accumulated losses totaling $12,403,776 as of September 30, 2025, and a working capital deficit of $781,054. Furthermore, the net loss for the six months ended September 30, 2025, was $2,891,382, indicating significant cash burn and reliance on future financing to sustain operations and launch its AdaptAI platform by December 31, 2026.

Analyst Insight

Investors should approach ADTI with extreme caution, recognizing the high-risk 'going concern' warning. While the acquisition of Ballengee Group and the development of AdaptAI present potential long-term upside, the immediate financial instability and significant losses warrant a wait-and-see approach. Monitor future financing activities and the progress of AdaptAI's development and launch before considering any investment.

Financial Highlights

debt To Equity

N/A

revenue

$2,131,437

operating Margin

N/A

total Assets

N/A

total Debt

N/A

net Income

-$2,596,318

eps

N/A

gross Margin

N/A

cash Position

$1,540,411

revenue Growth

+105,000,000%

Revenue Breakdown

Key Numbers

• $2,131,437 — Revenues for Q3 2025 (Increased from $2,030 in Q3 2024 due to acquisition.)
• $2,596,318 — Net Loss for Q3 2025 (Wider than $152,042 loss in Q3 2024.)
• $12,403,776 — Accumulated Deficit as of Sep 30, 2025 (Increased from $9,512,394 as of March 31, 2025, indicating significant losses.)
• $781,054 — Working Capital Deficit as of Sep 30, 2025 (Indicates liquidity challenges and contributes to 'going concern' doubt.)
• $27,500,000 — Total consideration for Ballengee Group acquisition (Includes $20,000,000 in stock and a $7,500,000 promissory note.)
• 6,500,000 — Common shares issued for acquisition (Valued at $20,000,000, representing a significant equity issuance.)
• $2,620,086 — Professional fees for Q3 2025 (Major contributor to increased operating expenses, up from $138,955 in Q3 2024.)
• 8,039,259 — Common shares outstanding as of Nov 19, 2025 (Increased from 1,532,388 shares as of March 31, 2025, largely due to acquisition.)
• $1,540,411 — Cash as of Sep 30, 2025 (Significant increase from $572 as of March 31, 2025, primarily from financing activities.)
• December 31, 2026 — Anticipated launch date for AdaptAI (Subject to securing sufficient funding.)

Key Players & Entities

• Adapti, Inc. (company) — registrant
• The Ballengee Group, LLC (company) — acquired sports management agency
• AdaptAI (company) — proprietary AI-driven tool under development
• Nevada (regulator) — state of incorporation
• SEC (regulator) — filing oversight
• BSG Holdings, LLC (company) — seller in acquisition
• JBAH Holdings, LLC (company) — seller in acquisition

FAQ

Risk Factors

• Going Concern Uncertainty [high — financial]: The company has a working capital deficit of $781,054 as of September 30, 2025, and a substantial accumulated deficit of $12,403,776. This, coupled with the significant net loss of $2,596,318 for the quarter, raises substantial doubt about Adapti, Inc.'s ability to continue as a going concern.
• Dependence on Future Funding [high — financial]: The successful development and launch of AdaptAI, a key future revenue driver, is contingent on securing sufficient funding. Failure to obtain necessary capital could jeopardize this strategic initiative and the company's future prospects.
• Integration Risk of Acquisition [medium — operational]: The significant revenue increase is tied to the recent acquisition of The Ballengee Group. The company faces operational risks associated with integrating this new business, ensuring its performance meets expectations, and realizing any anticipated synergies.
• Increased Operating Expenses [medium — financial]: Operating expenses, particularly professional fees which rose to $2,620,086 in Q3 2025 from $138,955 in Q3 2024, have significantly widened the net loss. Sustained high expenses without corresponding revenue growth could further strain financial resources.
• Debt Obligation [medium — financial]: The company assumed a $7,500,000 promissory note as part of the Ballengee acquisition. Servicing this debt will require adequate cash flow, which is currently challenged by the working capital deficit.

Industry Context

The sports management and technology sector is increasingly leveraging data analytics and AI for performance optimization and fan engagement. Companies are focusing on platforms that can efficiently match brands with influencers and athletes. Adapti's strategic pivot aims to capitalize on this trend with its AdaptAI platform, though it faces competition from established players and emerging startups in the MarTech and sports analytics space.

Regulatory Implications

As a publicly traded company, Adapti must comply with SEC reporting requirements. The 'going concern' note in its filings could trigger increased scrutiny from regulators and investors, potentially impacting its ability to raise capital or attract partnerships.

What Investors Should Do

1. Monitor funding developments for AdaptAI.
2. Analyze the integration progress of The Ballengee Group.
3. Assess the trend in operating expenses, especially professional fees.
4. Evaluate the company's ability to address the working capital deficit.

Key Dates

• 2025-07-14: Acquisition of The Ballengee Group, LLC — Marks a major strategic shift from health and beauty to sports management and technology, and is the primary driver of the recent surge in reported revenue.
• 2025-09-30: End of Q3 2025 — Reporting period showing significant revenue increase but also a widened net loss and a working capital deficit, raising going concern issues.
• 2026-12-31: Anticipated launch date for AdaptAI — Represents a key future growth initiative, but its realization is contingent on securing additional funding, highlighting financial risk.

Glossary

Accumulated Deficit

The total cumulative net losses of a company since its inception that have not been offset by profits or additional paid-in capital. (Adapti's substantial accumulated deficit of $12,403,776 indicates a history of unprofitability and contributes to the going concern doubt.)

Working Capital Deficit

Occurs when a company's current liabilities exceed its current assets, indicating potential short-term liquidity problems. (Adapti's $781,054 working capital deficit highlights immediate liquidity challenges and reinforces the going concern warning.)

Going Concern

An accounting assumption that a business will continue to operate for the foreseeable future without the threat of liquidation. (The company's financial condition, including its deficits, has led auditors to express substantial doubt about its ability to continue as a going concern.)

Promissory Note

A written promise by one party (the maker or issuer) to pay a specific sum of money to another party (the payee), either on demand or at a specified future date. (Adapti issued a $7,500,000 promissory note as part of the acquisition, representing a significant debt obligation.)

Year-Over-Year Comparison

Adapti, Inc. has undergone a dramatic transformation. Revenue has surged from $2,030 in Q3 2024 to $2,131,437 in Q3 2025, driven entirely by the acquisition of The Ballengee Group. However, this growth has come at the cost of significantly increased operating expenses, particularly professional fees, leading to a net loss that widened from $152,042 to $2,596,318. The company's financial position has deteriorated in terms of liquidity, with a substantial working capital deficit now present, whereas previous filings did not highlight such an immediate concern.

Key Financial Figures

• $2,000,000 — n will be earned if EBITDA is less than $2,000,000, (ii) Earnout Consideration will equal
• $5,000,000 — BITDA for EBITDA between $2,000,000 and $5,000,000, and (iii) Earnout Consideration will b

Filing Documents

• form10-q.htm (10-Q) — 1331KB
• ex10-11.htm (EX-10.11) — 17KB
• ex10-12.htm (EX-10.12) — 71KB
• ex31-1.htm (EX-31.1) — 8KB
• ex31-2.htm (EX-31.2) — 8KB
• ex32-1.htm (EX-32.1) — 5KB
• ex32-2.htm (EX-32.2) — 5KB
• 0001493152-25-024198.txt ( ) — 6920KB
• adti-20250930.xsd (EX-101.SCH) — 60KB
• adti-20250930_cal.xml (EX-101.CAL) — 65KB
• adti-20250930_def.xml (EX-101.DEF) — 250KB
• adti-20250930_lab.xml (EX-101.LAB) — 364KB
• adti-20250930_pre.xml (EX-101.PRE) — 353KB
• form10-q_htm.xml (XML) — 1016KB

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 31 Item 3.

Quantitative and Qualitative Disclosures about Market Risk

Quantitative and Qualitative Disclosures about Market Risk 36 Item 4.

Controls and Procedures

Controls and Procedures 36 PART II OTHER INFORMATION Item 1.

Legal Proceedings

Legal Proceedings 37 Item 1A. Risks Factors 37 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 46 Item 3. Defaults Upon Senior Securities 46 Item 4. Mine Safety Disclosures 46 Item 5. Other Information 46 Item 6. Exhibits 47

SIGNATURES

SIGNATURES 48 2 PART I FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS Adapti, Inc. Condensed Balance Sheets September 30, March 31, 2025 2025 ASSETS Current Assets: Cash $ 1,540,411 $ 572 Accounts receivable 59,766 640 Prepaid expenses 11,432 - Contracts receivable- current 3,432,685 - ROU Current Asset 300,000 - Total Current Assets 5,344,294 1,212 Fixed assets, net - - Contracts receivable- long term 3,425,000 - ROU Asset - long term 742,464 - Value of future contracts 19,180,000 - Intangible asset - brand name 5,956,401 - Total Long Term Assets $ 29,303,866 $ - TOTAL ASSETS $ 34,648,159 $ 1,212 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT ) Current Liabilities: Accounts payable and accrued liabilities $ 1,335,810 $ 525,618 Convertible notes payable, accrued interest 284,520 52,745 Related party convertible notes payable, accrued interest 405,029 211,113 Convertible notes payable, accrued interest 405,029 211,113 Related party notes payable, accrued interest 513,704 242,511 Commissions payable, current 2,341,989 - Due to related party 583,024 - Line of credit 361,272 - Operating lease liability, current 300,000 - Total Current Liabilities 6,125,348 1,031,987 Related party convertible notes payable, long term 2,169,881 - Related party convertible note Payable, long term 7,580,137 - Commissions payable, long term 1,871,586 - Operating lease liability, long term 742,464 - EIDL Loans 87,900 7,000 Total Long - Term Liabilities 12,451,968 7,000 Total Liabilities 18,577,316 1,038,987 Stockholders' Equity (Deficit): Preferred Stock, par value $ 0.001 , authorized 20,000,000 issued zero at September 30, 2025 and March 31, 2025, respectively - - Common stock, $ 0.001 par value, authorized 40,000,000,000 , 8,039,259 and 1,532,388 shares outstanding at September 30, 2025 and March 31, 2025, respectively 8,039 1,532

View Full Filing

View this 10-Q filing on SEC EDGAR