Hoops Scouting USA's Losses Shrink, But Going Concern Doubts Persist

TL;DR

**HSCT is a cash-burning shell company with no revenue, relying solely on its President to stay afloat; avoid at all costs.**

AI Summary

Hoops Scouting USA (HSCT) reported no revenue for the three months ended September 30, 2024, continuing its trend of zero revenue generation. The company incurred a net loss of $3,178 for the quarter, a significant improvement from the $11,594 net loss reported in the same period of 2023, primarily due to reduced transfer agent and filing fees. Total assets decreased slightly to $76,897 as of September 30, 2024, from $76,945 at June 30, 2024, mainly due to a reduction in bank cash from $56 to $8. Liabilities increased to $236,744 from $233,614, driven by an increase in amounts due to a related party (the President and Director) from $205,947 to $218,781. The company's working capital deficit worsened to $(143,847) from $(140,669) at June 30, 2024, and its accumulated deficit grew to $(294,897). HSCT continues to rely heavily on financial support from its President, who contributed $12,834 during the quarter and an additional $14,645 post-period through October 25, 2025, to cover operating expenses. The company's ability to continue as a going concern remains in substantial doubt due to persistent operating losses and a significant working capital deficit.

Why It Matters

For investors, HSCT's continued lack of revenue and reliance on related-party financing signals extreme risk, indicating that the business model is not self-sustaining. Employees face job insecurity given the company's precarious financial state and substantial doubt about its ability to continue operations. Customers, if any, might experience service disruptions or a lack of product development, as the company struggles to fund basic operations. In the broader market, HSCT's situation highlights the challenges faced by micro-cap companies in niche markets like basketball scouting, especially those without a clear path to profitability or competitive differentiation against established scouting services and sports tech platforms.

Risk Assessment

Risk Level: high — The company has no revenues and incurred a net loss of $3,178 for the quarter ended September 30, 2024. It has a working capital deficit of $(143,847) and an accumulated deficit of $(294,897), raising substantial doubt about its ability to continue as a going concern. The company is entirely dependent on its President for financial support, with $218,781 owed to this related party.

Analyst Insight

Investors should avoid Hoops Scouting USA (HSCT) due to its non-existent revenue, significant accumulated deficit, and complete reliance on related-party financing. The company's going concern risk is substantial, making it an unsuitable investment for any risk tolerance.

Financial Highlights

debt To Equity

N/A

revenue

$0

operating Margin

N/A

total Assets

$76,897

total Debt

$236,744

net Income

$(3,178)

eps

$0.00

gross Margin

N/A

cash Position

$8

revenue Growth

N/A

Revenue Breakdown

Key Numbers

• $0 — Revenue (for the three months ended September 30, 2024, indicating no operational income.)
• $(3,178) — Net Loss (for the three months ended September 30, 2024, an improvement from $(11,594) in 2023.)
• $(143,847) — Working Capital Deficit (as of September 30, 2024, worsening from $(140,669) at June 30, 2024.)
• $(294,897) — Accumulated Deficit (as of September 30, 2024, indicating significant historical losses.)
• $218,781 — Due to Related Party (as of September 30, 2024, highlighting reliance on the President for funding.)
• $28 — Cash Balance (as of September 30, 2024, a critically low amount for operations.)
• 101,250,000 — Common Shares Outstanding (as of December 17, 2025, indicating a large share count.)
• $12,834 — Related Party Contribution (during the three months ended September 30, 2024, for operating expenses.)
• $14,645 — Subsequent Related Party Contribution (received after September 30, 2024, through October 25, 2025, for operating expenses.)
• $16,000 — Loans Payable (to non-related parties, unsecured and non-interest bearing, due on or before September 30, 2024.)

Key Players & Entities

• Hoops Scouting USA (company) — registrant
• President and Director (person) — primary financier and related party
• Grit Mobile Application (company) — acquired and fully impaired intangible asset
• Wyoming (regulator) — state of incorporation
• SEC (regulator) — filing oversight
• Bloomberg (company) — publisher

FAQ

Risk Factors

• Going Concern Uncertainty [high — financial]: The company's ability to continue as a going concern is in substantial doubt due to persistent operating losses and a significant working capital deficit of $(143,847) as of September 30, 2024. The company has not generated revenue and relies heavily on financial support from its President.
• Related Party Dependence [high — financial]: The company's liabilities are heavily concentrated with a related party, the President and Director, with an amount due of $218,781 as of September 30, 2024. This highlights a significant reliance on the President for funding, which could pose risks if this support is withdrawn.
• Negative Working Capital [high — financial]: The company has a working capital deficit of $(143,847) as of September 30, 2024, which worsened from $(140,669) at June 30, 2024. This indicates a shortfall in current assets to cover current liabilities, impacting operational flexibility.
• Lack of Revenue Generation [high — operational]: Hoops Scouting USA reported $0 revenue for the three months ended September 30, 2024. This lack of revenue generation indicates a fundamental challenge in the company's business model or its ability to monetize its operations.
• Low Cash Balance [high — financial]: The company's cash balance is critically low at $8 as of September 30, 2024, down from $56 at June 30, 2024. This minimal cash position severely limits the company's ability to meet short-term obligations and fund operations.
• Accumulated Deficit [medium — financial]: The company has an accumulated deficit of $(294,897) as of September 30, 2024. This substantial deficit reflects a history of net losses and indicates that the company has not been profitable since its inception.
• Unsecured Loans Payable [low — financial]: The company has $16,000 in unsecured and non-interest bearing loans payable, due on or before September 30, 2024. While not a large amount, the unsecured nature and maturity date could present a minor liquidity risk if not managed.

Industry Context

The sports technology and scouting industry is competitive, with companies leveraging data analytics and digital platforms to identify and track talent. However, many early-stage or niche players struggle with monetization and achieving profitability, often relying on external funding. Hoops Scouting USA appears to be in this challenging segment, facing difficulties in generating revenue.

Regulatory Implications

As a publicly traded entity, Hoops Scouting USA must comply with SEC reporting requirements, including timely filing of 10-Q and 10-K reports. The company's financial condition, particularly the going concern issue, necessitates clear disclosure to investors, and any misrepresentation could lead to regulatory scrutiny.

What Investors Should Do

1. Monitor related party transactions
2. Assess revenue generation strategy
3. Evaluate going concern disclosures
4. Review future funding sources

Key Dates

• 2024-09-30: End of Q3 2024 — Reporting period for the 10-Q, showing $0 revenue, a net loss of $3,178, and a working capital deficit of $(143,847).
• 2024-10-25: Post-period end date for related party contribution — Indicates continued financial support from the President ($14,645) after the reporting period, reinforcing the going concern reliance.

Glossary

Accumulated deficit

The total net losses of a company since its inception that have not been offset by net income. (Shows the company's historical unprofitability, standing at $(294,897) as of September 30, 2024.)

Working capital deficit

The amount by which current liabilities exceed current assets. (Indicates the company's short-term liquidity challenges, with a deficit of $(143,847) as of September 30, 2024.)

Going concern

An assumption that a company will continue to operate for the foreseeable future, typically at least 12 months. (The company's ability to continue as a going concern is in substantial doubt due to its financial condition.)

Due to related party

Money owed by the company to individuals or entities that have a close relationship with the company, such as its officers or directors. (Highlights the significant financial obligation to the President ($218,781), a key source of funding.)

Common stock issued and outstanding

The number of shares of common stock that have been issued by the company and are currently held by investors. (Indicates the ownership structure, with 101,250,000 shares outstanding as of September 30, 2024.)

Year-Over-Year Comparison

Compared to the prior year's comparable period, Hoops Scouting USA has significantly reduced its net loss from $(11,594) to $(3,178) for the three months ended September 30, 2024, primarily due to lower transfer agent and filing fees. However, revenue remains at $0, and the working capital deficit has slightly worsened to $(143,847) from $(140,669) at June 30, 2024. The amount due to related party has increased from $205,947 to $218,781, indicating continued reliance on the President for financial support.

Key Financial Figures

• $0.0001 — he Registrant's common stock, par value $0.0001 per share, outstanding as of December 1
• $28 — mber 30, 2024, we had a cash balance of $28 and total assets of $76,897 compared to
• $76,897 — cash balance of $28 and total assets of $76,897 compared to cash and total assets of $7
• $76,945 — 97 compared to cash and total assets of $76,945 as at June 30, 2024. The decrease in to
• $236,744 — ne 30, 2024 we had total liabilities of $236,744 and $233,614 respectively. Our liabilit
• $233,614 — e had total liabilities of $236,744 and $233,614 respectively. Our liabilities at Septem
• $16,000 — oans payable to non-related parties for $16,000, which are unsecured, non-interest bear
• $143,847 — 2024. Our working capital deficit was $143,847 as at September 30, 2024 compared to $1
• $140,669 — 47 as at September 30, 2024 compared to $140,669 as at June 30, 2024 respectively. Dur
• $3,178 — hs ended September 30 2024, we incurred $3,178 of operating expenditures comprised of
• $11,594 — es, and transfer agent fees compared to $11,594 for general and administrative, profess
• $12,834 — 4 our financial activities consisted of $12,834 in proceeds from a related party, compa
• $294,897 — $143,847 and an accumulated deficit of $294,897. The continuation of the Company as a g

Filing Documents

• hosu_10q.htm (10-Q) — 259KB
• hosu_ex311.htm (EX-31.1) — 9KB
• hosu_ex321.htm (EX-32.1) — 6KB
• 0001477932-25-009055.txt ( ) — 1502KB
• hsct-20240930.xsd (EX-101.SCH) — 17KB
• hsct-20240930_lab.xml (EX-101.LAB) — 109KB
• hsct-20240930_cal.xml (EX-101.CAL) — 20KB
• hsct-20240930_pre.xml (EX-101.PRE) — 87KB
• hsct-20240930_def.xml (EX-101.DEF) — 31KB
• hosu_10q_htm.xml (XML) — 107KB

Financial Statements

Financial Statements 3 Unaudited Balance Sheets as of September 30, 2024 and June 30, 2024 4 Unaudited Statements of Operations for the three months ended September 30, 2024 and 2023 5 Unaudited Statements of Stockholders' Deficit for the three months ended September 30, 2024, and 2023 6 Unaudited Statements of Cash Flows for the three months ended September 30, 2024, and 2023 7 Notes to the Financial Statements 8 Item 2.

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

Management's Discussion and Analysis of Financial Condition and Results of Operations 13 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 15 Item 4.

Controls and Procedures

Controls and Procedures 15 PART II OTHER INFORMATION: 16 Item 1.

Legal Proceedings

Legal Proceedings 16 Item 1A.

Risk Factors

Risk Factors 16 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 16 Item 3. Defaults Upon Senior Securities 16 Item 4. Submission of Matters to a Vote of Securities Holders 16 Item 5. Other Information 16 Item 6. Exhibits 17

Signatures

Signatures 18 2 Table of Contents

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements The accompanying interim financial statements of Hoops Scouting USA. ("the Company", "we", "us" or "our"), have been prepared without audit pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with United States generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. The interim financial statements should be read in conjunction with the Company's latest annual financial statements. In the opinion of management, the financial statements contain all material adjustments, consisting only of normal adjustments considered necessary to present fairly the financial condition, results of operations, and cash flows of the Company for the interim periods presented. 3 Table of Contents HOOPS SCOUTING USA Condensed Balance Sheets September 30, 2024 June 30, 2024 (unaudited) Assets Current assets Bank $ 8 $ 56 Cash 20 20 Inventory 76,869 76,869 Total current asset $ 76,897 $ 76,945 Total assets $ 76,897 $ 76,945 Liabilities and stockholders' deficit Current liabilities Accounts payable and accrued liabilities 1,963 11,667 Due to related party (Note 3) 218,781 205,947 Total current liabilities 220,744 217,614 Non-current liabilities Loans payable (Note 7) 16,000 16,000 Total liabilities $ 236,744 $ 233,614 Nature of operations and continuance of business (Note 1) Stockholders' deficit Common stock Authorized: 10,000,000,000 common shares, $ 0.0001 par value 101,250,000 shares issued and outstanding as of September 30, 2024 and June 30, 2024 respectively $ 10,125 $ 10,125 Additional paid-in capital 124,925 124,925 Accumulated deficit ( 294,897 ) ( 291,719 ) Total stockholders' deficit ( 159,847 ) ( 156,669 ) $ $ Total liabilities and stockholders' deficit $

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

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

FORWARD-LOOKING STATEMENTS

FORWARD-LOOKING STATEMENTS This Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) contains forward-looking statements that involve known and unknown risks, significant uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed, or implied, by those forward-looking statements. You can identify forward-looking statements by the use of the words may, will, should, could, expects, plans, anticipates, believes, estimates, predicts, intends, potential, proposed, or continue or the negative of those terms. These statements are only predictions. In evaluating these statements, you should consider various factors which may cause our actual results to differ materially from any forward-looking statements. Although we believe that the exceptions reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Therefore, actual results may differ materially and adversely from those expressed in any forward- looking statements. We undertake no obligation to revise or update publicly any forward-looking statements for any reason. Liquidity and Capital Resources As of September 30, 2024, we had a cash balance of $28 and total assets of $76,897 compared to cash and total assets of $76,945 as at June 30, 2024. The decrease in total assets was due to inventory impairment As at September 30, 2024, and June 30, 2024 we had total liabilities of $236,744 and $233,614 respectively. Our liabilities at September 30,2024 and June 30, 2024 were comprised of amounts due to our President and Director and for two loans payable to non-related parties for $16,000, which are unsecured, non-interest bearing, and due on or before September 30, 2024. Our working capital deficit was $143,847 as at September 3

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View this 10-Q filing on SEC EDGAR