QPRC's Patent Licensing Revenue Dries Up, Net Loss Doubles to $3.2M

TL;DR

**QPRC is burning cash with no revenue, making it a high-risk bet on future patent monetization that hasn't materialized.**

AI Summary

QUEST PATENT RESEARCH CORP (QPRC) experienced a significant financial downturn for the nine months ended September 30, 2025, reporting no patent licensing fees compared to $2,795,000 in the prior year period. This led to a gross loss of $8,285, a stark contrast to the gross profit of $1,093,074 in 2024. The company's net loss more than doubled, reaching $3,196,485 for the nine months ended September 30, 2025, up from $1,469,871 in the same period of 2024. Operating expenses increased to $2,654,773 from $2,158,005, primarily due to higher selling, general, and administrative expenses. Cash and cash equivalents plummeted from $482,023 at December 31, 2024, to $175,141 by September 30, 2025. Total liabilities surged to $22,910,535 from $12,242,026, driven by a substantial increase in funding liability to $17,798,856. The company also invested heavily in patents, with a purchase of $9,000,000 in the current period, significantly increasing total assets to $11,012,559 from $3,540,535.

Why It Matters

This filing reveals a critical shift for QPRC, as the complete absence of patent licensing revenue in the current period signals a potential failure in their core intellectual property monetization strategy. For investors, this raises serious questions about the company's ability to generate future income and service its rapidly increasing liabilities, which have ballooned to over $22 million. Employees and customers might face uncertainty regarding the company's long-term viability. In the competitive landscape of patent monetization, QPRC's inability to secure licensing fees while simultaneously increasing its patent portfolio and funding liabilities suggests a high-risk operational model that could struggle to compete with more successful IP firms.

Risk Assessment

Risk Level: high — The company reported zero patent licensing fees for the nine months ended September 30, 2025, a drastic drop from $2,795,000 in the prior year, indicating a complete halt in its primary revenue stream. Concurrently, total liabilities surged by 87% from $12,242,026 at December 31, 2024, to $22,910,535 at September 30, 2025, primarily due to a massive increase in funding liability to $17,798,856. This combination of no revenue and soaring debt creates an unsustainable financial position.

Analyst Insight

Investors should avoid QPRC given the complete absence of revenue from its core business and the substantial increase in liabilities. The company's strategy of acquiring patents without generating licensing fees is highly speculative and currently unsustainable. Monitor future filings for any signs of revenue generation before considering any investment.

Financial Highlights

debt To Equity

N/A

revenue

$0

operating Margin

N/A

total Assets

$11,012,559

total Debt

$22,910,535

net Income

$(3,196,485)

eps

$(0.60)

gross Margin

N/A

cash Position

$175,141

revenue Growth

-100.0%

Revenue Breakdown

Key Numbers

• $0 — Patent Licensing Fees (for the nine months ended September 30, 2025, down from $2,795,000 in 2024)
• $(3.2M) — Net Loss (for the nine months ended September 30, 2025, more than double the $(1.5M) loss in 2024)
• $175K — Cash and Cash Equivalents (as of September 30, 2025, a 64% decrease from $482K at December 31, 2024)
• $22.9M — Total Liabilities (as of September 30, 2025, an 87% increase from $12.2M at December 31, 2024)
• $17.8M — Funding Liability (as of September 30, 2025, a 133% increase from $7.6M at December 31, 2024)
• $9.0M — Purchase of Patents (for the nine months ended September 30, 2025, indicating significant investment without revenue)
• $(0.60) — Loss per share (for the nine months ended September 30, 2025, compared to $(0.28) in 2024)

Key Players & Entities

• QUEST PATENT RESEARCH CORPORATION (company) — registrant
• SEC (regulator) — filing authority
• $2,795,000 (dollar_amount) — patent licensing fees for nine months ended September 30, 2024
• $3,196,485 (dollar_amount) — net loss for nine months ended September 30, 2025
• $1,469,871 (dollar_amount) — net loss for nine months ended September 30, 2024
• $175,141 (dollar_amount) — cash and cash equivalents as of September 30, 2025
• $482,023 (dollar_amount) — cash and cash equivalents as of December 31, 2024
• $22,910,535 (dollar_amount) — total liabilities as of September 30, 2025
• $12,242,026 (dollar_amount) — total liabilities as of December 31, 2024
• $17,798,856 (dollar_amount) — funding liability as of September 30, 2025

FAQ

Risk Factors

• Deteriorating Financial Performance [high — financial]: The company experienced a substantial increase in net loss to $3,196,485 for the nine months ended September 30, 2025, more than double the $1,469,871 loss in the prior year. This is coupled with a drastic reduction in cash and cash equivalents from $482,023 to $175,141.
• Surging Liabilities [high — financial]: Total liabilities have increased by 87% to $22,910,535 from $12,242,026, primarily driven by a 133% surge in funding liability to $17,798,856. This indicates a growing reliance on external funding and potential debt servicing challenges.
• Lack of Revenue Generation [high — operational]: Patent licensing fees have dropped to $0 from $2,795,000 in the prior year, leading to a gross loss of $8,285. This complete absence of revenue from core operations is a critical concern.
• Increased Operating Expenses [medium — financial]: Operating expenses rose to $2,654,773 from $2,158,005, mainly due to higher selling, general, and administrative expenses. This increase in costs, without corresponding revenue, exacerbates the net loss.
• Significant Patent Investment Without Returns [medium — financial]: The company made a substantial investment of $9,000,000 in patents during the period. However, with no patent licensing fees generated, the return on this significant investment is currently non-existent.
• Decreasing Cash Position [medium — financial]: Cash and cash equivalents have fallen by 64% to $175,141 as of September 30, 2025, from $482,023 at the end of 2024. This reduced liquidity could impact the company's ability to meet short-term obligations.

Industry Context

The intellectual property monetization business relies on acquiring, developing, and licensing patents to generate revenue. Companies in this sector face challenges in identifying valuable patents, securing licensing agreements, and enforcing their intellectual property rights. The competitive landscape involves numerous players, from individual inventors to large patent assertion entities, all vying for market share and revenue from patent holders.

Regulatory Implications

As a company involved in intellectual property, Quest Patent Research Corp is subject to patent laws and regulations in the jurisdictions where it operates. Changes in patent law, enforcement policies, or international trade agreements could impact the value and enforceability of its patent portfolio. Compliance with financial reporting regulations (e.g., GAAP) is also critical for maintaining investor confidence.

What Investors Should Do

1. Monitor patent monetization strategy
2. Assess debt and funding structure
3. Evaluate cash burn rate and runway
4. Scrutinize patent asset valuation and impairment risk

Key Dates

• 2025-09-30: End of Nine Months Reporting Period — Marks the period for which the company reported a significant increase in net loss, a decrease in cash, and a substantial rise in liabilities, alongside a complete drop in patent licensing revenue.
• 2025-09-30: Purchase of Patents — A $9,000,000 investment in patents, which has not yet translated into revenue, increasing total assets but also potentially increasing future amortization and impairment risks.
• 2024-12-31: Prior Year End — Represents the baseline for comparison, showing $2,795,000 in patent licensing fees and $482,023 in cash, highlighting the dramatic negative shift in the current period.

Glossary

Patent licensing fees

Revenue generated from granting others the right to use a company's patented technology or intellectual property. (This is the primary revenue stream for Quest Patent Research Corp, and its complete absence in the current period is a critical indicator of financial distress.)

Funding liability

An obligation to provide funds, often related to financing arrangements or convertible debt instruments that may convert into equity. (The significant increase in this liability to $17,798,856 suggests increased reliance on financing that may carry future obligations or dilution risks.)

Accumulated deficit

The cumulative net losses of a company that have not been offset by net income. (The company's accumulated deficit has grown to $(29,579,157), underscoring its long-term struggle to achieve profitability.)

Intangible Assets (Patents)

Non-physical assets that have value, such as patents, trademarks, and copyrights. These are amortized over their useful lives. (The company has significantly increased its investment in patents, which now represent the majority of its assets, but this investment is not currently generating revenue.)

Stockholders' deficit

The negative equity of a company, meaning its liabilities exceed its assets. (Quest Patent Research Corp has a substantial stockholders' deficit of $(11,897,976), indicating that the company owes more than it owns.)

Year-Over-Year Comparison

Compared to the prior year period, Quest Patent Research Corp has experienced a severe financial downturn. Patent licensing fees have dropped from $2,795,000 to $0, resulting in a gross loss of $8,285 compared to a gross profit of $1,093,074. Net loss has more than doubled to $3,196,485, and cash reserves have dwindled by 64% to $175,141. Total liabilities have surged by 87% to $22,910,535, driven by a substantial increase in funding liability, while total assets have grown significantly due to a $9,000,000 investment in patents.

Filing Documents

• ea0264952-10q_quest.htm (10-Q) — 517KB
• ea026495201ex31-1_quest.htm (EX-31.1) — 10KB
• ea026495201ex32-1_quest.htm (EX-32.1) — 4KB
• 0001213900-25-110149.txt ( ) — 3874KB
• qprc-20250930.xsd (EX-101.SCH) — 38KB
• qprc-20250930_cal.xml (EX-101.CAL) — 27KB
• qprc-20250930_def.xml (EX-101.DEF) — 187KB
• qprc-20250930_lab.xml (EX-101.LAB) — 349KB
• qprc-20250930_pre.xml (EX-101.PRE) — 198KB
• ea0264952-10q_quest_htm.xml (XML) — 370KB

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION Item 1.

Financial Statements

Financial Statements. 1 Condensed Consolidated Balance Sheets as of September 30, 2025 (Unaudited) and December 31, 2024 1 Unaudited Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2025 and 2024 2 Unaudited Condensed Consolidated Statements of Changes in Stockholders' Deficit for the three and nine months ended September 30, 2025 and 2024 3 Unaudited Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2025 and 2024 4 Notes to Unaudited Condensed Consolidated Financial Statements. 5 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. 17 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk. 24 Item 4.

Controls and Procedures

Controls and Procedures. 24 PART II – OTHER INFORMATION Item 5. Other Information 25 Item 6. Exhibits 25

FORWARD-LOOKING STATEMENTS

FORWARD-LOOKING STATEMENTS This report contains forward-looking statements regarding our business, financial condition, results of operations and prospects. Words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates" and similar expressions or variations of such words are intended to identify forward-looking statements, but are not deemed to represent an all-inclusive means of identifying forward-looking statements as denoted in this report. Additionally, statements concerning future matters are forward-looking Although forward-looking statements in this report reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by us. Consequently, forward-looking statements are inherently subject to risks and uncertainties and actual results and outcomes may differ materially from the results and outcomes discussed in or anticipated by the forward-looking statements. Factors that could cause or contribute to such differences in results and outcomes include, without limitation, those specifically addressed under the headings "Risks Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our report on Form 10-K for the year ended December 31, 2024, in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in this Form 10-Q and in other reports that we file with the SEC. You are urged not to place undue reliance on these forward-looking We file reports with the SEC. The SEC maintains a website (www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, including us. You can also read and copy any materials we file with the SEC at the SEC's Public Reference Room at 100 F Street, NE, Washington, DC 20549. You can obtain additional information

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements QUEST PATENT RESEARCH CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS September 30, 2025 December 31, 2024 (unaudited) ASSETS Current assets Cash and cash equivalents $ 175,141 $ 482,023 Accounts receivable, net of allowance for credit losses of $ 0 and $ 0 , respectively 8,251 8,251 Other current assets 11,040 12,011 Total current assets 194,432 502,285 Patents, net of accumulated amortization of $ 4,268,873 and $ 3,048,750 , respectively 10,818,127 3,038,250 Total assets $ 11,012,559 $ 3,540,535 LIABILITIES AND STOCKHOLDERS' DEFICIT Current liabilities Accounts payable and accrued liabilities ($ 0 and $ 11,041 due to related parties, respectively) $ 133,218 $ 156,033 Loans payable 138,000 138,000 Funding liability 17,798,856 7,634,381 Loan payable - related party 2,796,500 2,796,500 Warrant liability 131,856 117,130 Accrued interest 1,708,440 1,196,317 Total current liabilities 22,706,870 12,038,361 Non-current liabilities Loan payable – SBA 150,000 150,000 Purchase price of patents 53,665 53,665 Total liabilities $ 22,910,535 $ 12,242,026 Commitments and contingencies (Note 9) Stockholders' deficit: Preferred stock, par value $ 0.00003 per share - authorized 10,000,000 shares - no shares issued and outstanding — — Common stock, par value $ 0.00003 per share; authorized 30,000,000 at September 30, 2025 and December 31, 2024; 5,331,973 shares issued and outstanding at September 30, 2025 and December 31, 2024 160 160 Additional paid-in capital 17,680,793 17,680,793 Accumulated deficit ( 29,579,157 ) ( 26,382,672 ) Total Quest Patent Research Corporation stockholders' deficit ( 11,898,204 ) ( 8,701,719 ) Non-controlling interest in subsidiary 228 228 Total stockholders' deficit ( 11,897,976 ) ( 8,701,491 ) Total liabilities and stockholders' deficit $ 11,012,559 $ 3,540,535 See the accompanying notes

FINANCIAL STATEMENTS

FINANCIAL STATEMENTS 1. DESCRIPTION OF BUSINESS The Company is a Delaware corporation, incorporated on July 17, 1987 and has been engaged in the intellectual property monetization business since 2008. As used herein, "we", "us", "our", the "Company" refer to Quest Patent Research Corporation and its wholly and majority-owned operating subsidiaries unless the context indicates otherwise. All intellectual property acquisition, development, licensing and enforcement activities are conducted by the Company's wholly and majority-owned and controlled operating subsidiaries. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. (GAAP) for interim financial information and with the instructions to Form 10-Q and Rule 8-03 of Regulation S-X. Accordingly, these interim financial statements do not include all of the information and notes required by GAAP for complete financial statements. All adjustments (consisting of normal recurring items) necessary to present fairly the Company's consolidated financial position have been included. These interim financial annual report on Form 10-K for the year ended December 31, 2024. Operating results for the interim periods presented herein are not necessarily indicative of the results that may be expected for any other interim period or for the entire year. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation and Financial The condensed consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles ("US GAAP") and present the condensed consolidated

financial statements of the Company and its wholly owned and majority owned subsidiaries as of September 30, 2025

financial statements of the Company and its wholly owned and majority owned subsidiaries as of September 30, 2025. The condensed consolidated financial statements include the Company and 24 subsidiaries of which seven are active and 17 are inactive. All of the active subsidiaries are wholly owned. Significant intercompany transactions and balances have been eliminated in consolidation. The non-controlling interests are presented in the unaudited condensed consolidated balance sheets, separately from equity attributable to the stockholders of the Company. During the three and nine months ended September 30, 2025 and 2024, none of the Company's net loss was attributable to non-controlling interests. Use of Estimates In preparing financial statements in conformity with accounting principles generally accepted in the United States of America, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenue and expenses during the reporting period. Actual results could differ from those estimates. Cash and Cash Equivalents The Company considers all highly liquid investments with original maturity dates of three months or less when purchased, to be cash equivalents. The Company had no cash equivalents as of September 30, 2025 and December 31, 2024. 5 Accounts Receivable Accounts receivable, which generally relate to licensed sales, are presented on the balance sheet net of estimated uncollectible amounts. The Company records an allowance for estimated uncollectible accounts in an amount approximating anticipated losses. Individual uncollectible accounts are written off against the allowance when collection of the individual accounts appears doubtful. The Company did not record an allowance for credit losses at September 30, 2025 and December 31, 2024. Intangible Assets Intangible assets consist of pat

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