MDWerks' Losses Widen Amid Soaring Costs, Going Concern Warning Issued

TL;DR

**MDWK is bleeding cash with widening losses and a going concern warning, making it a high-risk bet despite asset growth.**

AI Summary

MDWerks, Inc. (MDWK) reported a significant increase in net loss for the six months ended June 30, 2025, reaching $1,966,246, a substantial rise from the $1,066,504 loss in the same period of 2024. This was primarily driven by a surge in cost of revenue to $1,083,304 from $733,249, and a substantial increase in salaries and wages to $469,074 from $32,295. Despite a slight decrease in revenue for the six-month period to $934,539 from $956,554, the company saw a quarterly revenue increase to $420,609 in Q2 2025 from $271,894 in Q2 2024. Total assets grew to $4,403,998 as of June 30, 2025, from $2,916,434 at December 31, 2024, largely due to an increase in inventory to $1,172,214 from $236,863 and fixed assets to $1,233,836 from $585,025. The company's accumulated deficit expanded to $4,326,751, and it continues to operate under a going concern warning, relying on third-party financing and capital raises.

Why It Matters

MDWerks' widening net loss and persistent going concern warning signal significant financial instability, directly impacting investor confidence and potentially the company's ability to fund future operations. The substantial increase in inventory and fixed assets, while indicating investment, is concerning given the declining revenue and ballooning costs, suggesting potential inefficiencies or misallocated capital. For employees, this financial strain could lead to job insecurity or delayed growth opportunities. In a competitive landscape, MDWerks' struggles could allow rivals in the beverage and RF technology sectors to gain market share, as the company's ability to innovate and scale is hampered by its financial health.

Risk Assessment

Risk Level: high — The company reported a net loss of $1,966,246 for the six months ended June 30, 2025, and an accumulated deficit of $4,326,751. These figures, coupled with the explicit 'Going Concern' disclosure, indicate substantial doubt about MDWerks' ability to continue operations without significant external financing, making it a high-risk investment.

Analyst Insight

Investors should exercise extreme caution and consider avoiding MDWK stock given the severe financial distress, widening losses, and explicit going concern warning. Potential investors should wait for clear evidence of sustained profitability and a strengthened balance sheet before considering any position.

Financial Highlights

debt To Equity

3.36

revenue

$934,539

operating Margin

-207.8%

total Assets

$4,403,998

total Debt

$3,394,120

net Income

-$1,966,246

eps

N/A

gross Margin

-15.9%

cash Position

$13,330

revenue Growth

-2.3%

Revenue Breakdown

Key Numbers

• $1,966,246 — Net loss for six months ended June 30, 2025 (Increased from $1,066,504 in prior year, indicating worsening financial performance.)
• $4,326,751 — Accumulated deficit as of June 30, 2025 (Highlights significant historical losses and raises going concern doubts.)
• $934,539 — Revenue for six months ended June 30, 2025 (Slight decrease from $956,554 in prior year, showing stagnant top-line growth.)
• $1,083,304 — Cost of revenue for six months ended June 30, 2025 (Significant increase from $733,249, eroding gross profit.)
• $469,074 — Salaries and wages for six months ended June 30, 2025 (Massive increase from $32,295, contributing to higher operating expenses.)
• $1,172,214 — Inventory as of June 30, 2025 (Substantial increase from $236,863 at December 31, 2024, potentially indicating overstocking or slow sales.)
• $1,233,836 — Fixed assets, net as of June 30, 2025 (Increased from $585,025, reflecting significant capital expenditures.)
• 222,250,165 — Shares of common stock issued and outstanding (As of August 12, 2025, indicating potential dilution from prior periods.)
• $13,330 — Cash as of June 30, 2025 (Extremely low cash balance, highlighting liquidity challenges.)
• $1,540,777 — Net cash provided by financing activities for six months ended June 30, 2025 (Crucial for sustaining operations given negative cash flow from operations and investing.)

Key Players & Entities

• MDWerks, Inc. (company) — registrant
• Two Trees Beverage Co. (company) — wholly owned subsidiary
• RF Specialties, LLC (company) — wholly owned subsidiary
• Keith A. Mort (person) — sole member of RFS
• SEC (regulator) — Securities and Exchange Commission
• Delaware (company) — state of incorporation
• Bloomberg (company) — publisher

FAQ

Risk Factors

• Going Concern Uncertainty [high — financial]: The company has an accumulated deficit of $4,326,751 as of June 30, 2025, and reported a net loss of $1,966,246 for the six months ended June 30, 2025. This, coupled with a very low cash balance of $13,330, indicates substantial doubt about its ability to continue as a going concern.
• Surging Cost of Revenue [high — operational]: Cost of revenue increased significantly by 47.7% to $1,083,304 for the six months ended June 30, 2025, from $733,249 in the prior year. This outpaced revenue growth and led to a gross loss of $148,765, compared to a gross profit of $223,305 in the prior year.
• Explosive Growth in Salaries and Wages [high — operational]: Salaries and wages surged by over 1300% to $469,074 for the six months ended June 30, 2025, from $32,295 in the prior year. This substantial increase in operating expenses is a major contributor to the widening net loss.
• Inventory Build-up [medium — financial]: Inventory increased dramatically from $236,863 at December 31, 2024, to $1,172,214 as of June 30, 2025. This 393% increase may signal overstocking or slower-than-expected sales, tying up significant working capital.
• Increased Debt Load [medium — financial]: Total liabilities grew to $3,394,120 as of June 30, 2025, from $2,545,406 at December 31, 2024. The company relies on notes payable and financing activities to sustain operations, increasing financial risk.
• Low Cash Position [high — financial]: The company's cash balance stood at a critically low $13,330 as of June 30, 2025. This severely limits operational flexibility and highlights the dependence on external financing.

Industry Context

MDWerks operates in a competitive landscape where efficient cost management and scalable revenue generation are critical. The industry often requires significant upfront investment in inventory and fixed assets, which can strain cash flow if sales do not materialize as expected. Trends towards digital transformation and supply chain optimization are prevalent, demanding agility and strategic capital allocation.

Regulatory Implications

As a publicly traded company, MDWerks is subject to SEC regulations and reporting requirements. Failure to address going concern issues could lead to delisting from exchanges. Compliance with accounting standards and accurate financial reporting are paramount to maintaining investor confidence and avoiding penalties.

What Investors Should Do

1. Monitor cash burn rate and financing activities closely.
2. Scrutinize the rationale behind the significant increase in inventory and fixed assets.
3. Analyze the sustainability of the cost of revenue and salary increases.
4. Evaluate the company's strategy to address the going concern warning.

Key Dates

• 2025-06-30: Six Months Ended — Reported a net loss of $1,966,246 and a significant increase in cost of revenue and salaries, worsening financial performance.
• 2025-06-30: Balance Sheet Date — Total assets grew to $4,403,998, driven by inventory and fixed assets, but liabilities also increased significantly.
• 2024-06-30: Six Months Ended — Reported a net loss of $1,066,504, with lower cost of revenue and salaries compared to 2025.
• 2024-12-31: Balance Sheet Date — Total assets were $2,916,434, with lower inventory and fixed assets compared to June 30, 2025.

Glossary

Accumulated deficit

The total net losses of a company that have not been offset by net income since its inception. (MDWerks has a substantial accumulated deficit of $4,326,751, indicating a history of unprofitability and raising concerns about its long-term viability.)

Cost of revenue

The direct costs attributable to the production or purchase of the goods sold by a company. (A significant increase in MDWerks' cost of revenue to $1,083,304 for the six months ended June 30, 2025, is a primary driver of its increased net loss.)

Going concern

A business's ability to continue operating for the foreseeable future without the threat of liquidation. (MDWerks is operating under a going concern warning due to its significant losses and low cash balance, meaning there is substantial doubt about its ability to continue operations.)

Fixed assets, net

The value of a company's long-term tangible assets (like property, plant, and equipment) after deducting accumulated depreciation. (MDWerks has significantly increased its net fixed assets to $1,233,836, indicating substantial capital expenditures, which may be a bet on future growth or an inefficient use of capital given current losses.)

Inventory

The goods a company has on hand that are available for sale. (MDWerks' inventory has more than quadrupled to $1,172,214, which could indicate production issues, overstocking, or a slowdown in sales, impacting cash flow.)

Net loss from operations

The total expenses incurred by a company in its core business operations minus the revenue generated from those operations. (MDWerks reported a net loss from operations of $1,942,301 for the six months ended June 30, 2025, highlighting significant operational challenges.)

Year-Over-Year Comparison

Compared to the six months ended June 30, 2024, MDWerks has seen a significant deterioration in its financial performance. Revenue has slightly decreased from $956,554 to $934,539, while the net loss has nearly doubled from $1,066,504 to $1,966,246. This widening loss is primarily driven by a substantial increase in cost of revenue (up 47.7%) and an alarming surge in salaries and wages (up over 1300%). Total assets have grown considerably, but this is largely due to a massive increase in inventory and fixed assets, while liabilities have also climbed, exacerbating the financial strain.

Filing Documents

• form10-q.htm (10-Q) — 958KB
• 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
• 0001641172-25-023536.txt ( ) — 6058KB
• mdwk-20250630.xsd (EX-101.SCH) — 41KB
• mdwk-20250630_cal.xml (EX-101.CAL) — 54KB
• mdwk-20250630_def.xml (EX-101.DEF) — 236KB
• mdwk-20250630_lab.xml (EX-101.LAB) — 402KB
• mdwk-20250630_pre.xml (EX-101.PRE) — 339KB
• form10-q_htm.xml (XML) — 908KB

—FINANCIAL INFORMATION

PART I—FINANCIAL INFORMATION Item 1.

Financial Statements

Financial Statements 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 4 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 10 Item 4.

Controls and Procedures

Controls and Procedures 10

—OTHER INFORMATION

PART II—OTHER INFORMATION 11 Item 1.

Legal Proceedings

Legal Proceedings 11 Item 1A.

Risk Factors

Risk Factors 11 Item 2. Unregistered Sales of Securities and Use of Proceeds 11 Item 3. Defaults Upon Senior Securities 11 Item 4. Mine Safety Disclosure 11 Item 5. Other Information 11 Item 6. Exhibits 12

SIGNATURES

SIGNATURES 13 EXHIBIT 31.1 EXHIBIT 31.2 EXHIBIT 32.1 2 Forward-Looking Various laws. Forward-looking statements are based on current expectations and are indicated by words or phrases such as "believe," "expect," "may," "should," "seek," "plan," "intend" or "anticipate" or the negative thereof or comparable terminology, or by discussion of strategy. Forward-looking statements represent as of the date of this report our judgment relating to, among other things, future results of operations, growth plans, sales, capital requirements and general industry and business conditions applicable to us. Such forward-looking statements are based largely on our current expectations and are inherently subject to risks and uncertainties. Our actual results could differ materially from those that are anticipated or projected as a result of certain risks and uncertainties, including, but not limited to, a number of factors, such as: changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted accounting principles and the other risks and uncertainties that are set forth in Item 2, "Management's Discussion and Analysis of Financial Condition and Results of Operations." These factors are not necessarily all of the important factors that could cause actual results to differ materially from those expressed in any of our forward-looking statements. Other unknown or unpredictable factors could also have material adverse effects on future results. Except as otherwise required to be disclosed in periodic reports required to be filed by public companies with the Securities and Exchange Commission ("SEC") pursuant to the SEC's rules, we have no duty to update these statements, and we undertake no obligation to publicly update or revise any forward-looking statements, wh

Notes to Consolidated Financial Statements (Unaudited)

Notes to Consolidated Financial Statements (Unaudited) F-6 F-1 MDwerks, Inc. Consolidated Balance Sheets (Unaudited) June 30, 2025 December 31, 2024 Assets Current Assets Cash $ 13,330 $ 11,159 Accounts receivable, net 64,617 109,142 Inventory 1,172,214 236,863 Prepaid expenses 114,245 17,000 Total Current Assets 1,364,406 374,164 Fixed assets, net 1,233,836 585,025 Intangible assets, net 530,583 558,784 Right-of-use asset 792,515 915,803 Goodwill 466,648 466,648 Other non-current assets 16,010 16,010 Total Assets $ 4,403,998 $ 2,916,434 Liabilities and Stockholders' Equity (Deficit) Current Liabilities Accounts payable and accrued expenses $ 1,598,018 $ 822,111 Accounts payable – related party - 46,812 Notes payable 235,458 134,557 Notes payable – related party 17,500 123,000 Notes payable 17,500 123,000 Deferred revenue 422,979 226,066 Right-of-use liability, current portion 195,373 266,315 Total Current Liabilities 2,469,328 1,618,861 Notes payable – related party, net of current portion 150,000 - Notes payable, net of current portion 148,796 231,370 Right-of use liability, net of current portion 625,996 695,175 Total Liabilities 3,394,120 2,545,406 Stockholders' Equity (Deficit) Preferred stock, par value $ 0.001 ; 10,000,000 shares authorized, of which 0 were issued and outstanding - - Common stock, par value $ 0.001 ; 300,000,000 shares authorized, of which 221,282,495 and 204,744,872 shares were issued and outstanding at June 30, 2025 and December 31, 2024, respectively 221,283 204,745 Additional paid in capital 5,050,346 2,511,788 Subscription payable 65,000 15,000 Accumulated deficit ( 4,326,751 ) ( 2,360,505 ) Total Stockholders' Equity (Deficit) 1,009,878 371,028 Total Liabilities and Stockholders' Equity (Deficit) $ 4,403,998 $ 2,916,434 The accompanying notes are an integral part of these unaudited consolidated

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