ILAL Plunges to $2.9M Loss Amidst Revenue Collapse, Liquidity Crisis

TL;DR

**ILAL is bleeding cash and facing an existential threat, making it a high-risk bet for any investor.**

AI Summary

International Land Alliance Inc. (ILAL) reported a significant net loss of $2,937,448 for the six months ended June 30, 2025, a stark reversal from the net income of $3,743,848 in the prior year period. Revenue also saw a substantial decline, falling to $1,323,995 for the six months ended June 30, 2025, from $5,830,969 in the same period of 2024. This 77% drop in revenue, coupled with a 134% increase in general and administrative expenses to $2,046,423, contributed to an operating loss of $1,815,902. The company's current liabilities exceeded current assets by approximately $13.2 million as of June 30, 2025, and it holds an accumulated deficit of $27.1 million. A significant increase in derivative liability, from $161,136 at December 31, 2024, to $711,606 at June 30, 2025, further impacted financial health. The company continues to rely on debt and equity issuances to fund operations, raising concerns about potential shareholder dilution and its ability to continue as a going concern.

Why It Matters

ILAL's dramatic shift from profitability to a substantial net loss, coupled with a 77% revenue decline, signals severe operational challenges for investors. The company's 'going concern' warning and $13.2 million current liability deficit indicate significant financial instability, potentially impacting its ability to complete existing projects or secure new land for development. This could lead to job insecurity for employees and delays or cancellations for customers awaiting property development. In a competitive real estate market, ILAL's struggles could allow more financially stable developers to gain market share, particularly in the Baja California and Southern California regions.

Risk Assessment

Risk Level: high — The company explicitly states 'substantial doubt exists about the Company's ability to continue as a going concern' due to a net loss of $2.9 million for the six months ended June 30, 2025, and an accumulated deficit of $27.1 million. Furthermore, current liabilities exceeded current assets by approximately $13.2 million as of June 30, 2025, indicating severe liquidity issues.

Analyst Insight

Investors should avoid ILAL given the explicit 'going concern' warning, significant net losses, and substantial liquidity deficit. Existing shareholders should consider divesting, as further equity or debt financing will likely dilute holdings and the company's operational viability is highly questionable.

Financial Highlights

debt To Equity

N/A

revenue

$1,323,995

operating Margin

N/A

total Assets

N/A

total Debt

N/A

net Income

-$2,937,448

eps

N/A

gross Margin

N/A

cash Position

$99,738

revenue Growth

-77%

Key Numbers

• $2,937,448 — Net Loss (for the six months ended June 30, 2025, compared to $3,743,848 net income in 2024)
• $1,323,995 — Net Revenues and Lease Income (for the six months ended June 30, 2025, down from $5,830,969 in 2024)
• $13.2 million — Current Liabilities Exceeding Current Assets (as of June 30, 2025, indicating significant liquidity issues)
• $27.1 million — Accumulated Deficit (as of June 30, 2025, highlighting historical losses)
• $2,046,423 — General and Administrative Expenses (for the six months ended June 30, 2025, a 134% increase from $701,633 in 2024)
• $711,606 — Derivative Liability (as of June 30, 2025, up from $161,136 at December 31, 2024)
• $99,738 — Cash (as of June 30, 2025, a modest increase from $26,120 at December 31, 2024)
• $1,815,902 — Loss from Operations (for the six months ended June 30, 2025, a significant decline from $4,190,033 income in 2024)
• 110,570,465 — Common Shares Outstanding (as of August 14, 2025, indicating potential dilution from prior issuances)
• $550,470 — Change in Fair Value of Derivative Liability (a loss for the six months ended June 30, 2025, compared to a gain of $229,814 in 2024)

Key Players & Entities

• International Land Alliance Inc. (company) — registrant
• Rancho Costa Verde Development LLC (company) — wholly owned subsidiary
• SEC (regulator) — filing authority
• Wyoming (company) — state of incorporation
• Baja California (company) — target property region
• Southern California (company) — target property region
• ILA Fund I, LLC (company) — wholly owned subsidiary
• International Land Alliance, S.A. de C.V. (company) — wholly owned subsidiary
• Emerald Grove Estates LLC (company) — wholly owned subsidiary
• Oasis Park Resort, LLC (company) — wholly owned subsidiary

FAQ

Risk Factors

• Liquidity and Going Concern [high — financial]: The company's current liabilities of $13.2 million exceeded current assets as of June 30, 2025, indicating significant liquidity challenges. The company has an accumulated deficit of $27.1 million and continues to rely on debt and equity issuances for funding, raising substantial concerns about its ability to continue as a going concern.
• Revenue Decline and Operating Loss [high — financial]: Revenue and lease income plummeted by 77% to $1,323,995 for the six months ended June 30, 2025, from $5,830,969 in the prior year. This, combined with a 134% surge in G&A expenses to $2,046,423, resulted in an operating loss of $1,815,902.
• Increased Derivative Liability [medium — financial]: The derivative liability increased significantly from $161,136 at December 31, 2024, to $711,606 at June 30, 2025. The change in fair value of this liability resulted in a loss of $550,470 for the six months ended June 30, 2025, compared to a gain in the prior year.
• Shareholder Dilution [medium — financial]: The company's reliance on debt and equity issuances to fund operations, coupled with 110,570,465 common shares outstanding as of August 14, 2025, suggests a history of capital raises that could lead to significant shareholder dilution.

Industry Context

The real estate development and land sales industry is capital-intensive and subject to economic cycles, interest rate fluctuations, and regulatory changes. Companies in this sector often rely on debt financing and project-specific equity to fund operations. Competition can be fierce, with success depending on land acquisition, development expertise, and market demand.

Regulatory Implications

Companies in the real estate sector are subject to various regulations, including land use, environmental, and financial reporting standards. Failure to comply can result in fines, legal action, and reputational damage. The 'going concern' disclosures are critical for investors and creditors and may trigger closer scrutiny from regulators.

What Investors Should Do

1. Monitor future revenue trends closely to determine if the current decline is a temporary setback or a sustained downturn.
2. Analyze the drivers behind the significant increase in G&A expenses to assess operational efficiency and cost control.
3. Evaluate the company's ability to secure additional financing and the terms of any future debt or equity issuances, considering the potential for dilution.
4. Assess the nature and impact of the derivative liability and its potential future volatility on financial performance.
5. Review management's strategies and disclosures regarding the going concern assessment and any steps being taken to improve financial stability.

Key Dates

• 2025-06-30: End of Six-Month Period — Reporting period for the significant net loss of $2,937,448 and revenue of $1,323,995, with current liabilities exceeding current assets by $13.2 million.
• 2025-08-14: Common Shares Outstanding Date — Indicates 110,570,465 common shares outstanding, highlighting potential for dilution from past capital raises.
• 2024-06-30: Prior Year Six-Month Period End — Context for the dramatic decline in performance, with $5,830,969 in revenue and $3,743,848 in net income during the comparable period.

Glossary

Accumulated Deficit

The cumulative net losses of a company that have not been offset by net income. It represents a negative balance in retained earnings. (ILAL has an accumulated deficit of $27.1 million as of June 30, 2025, indicating a history of unprofitability.)

Derivative Liability

A financial instrument whose value is derived from an underlying asset, index, or rate. A liability indicates that the company owes value related to this instrument. (The significant increase in derivative liability to $711,606 and the associated loss of $550,470 negatively impacted ILAL's financial results.)

Going Concern

The assumption that a company will continue to operate for the foreseeable future, typically at least 12 months. If there are substantial doubts, it must be disclosed. (ILAL's financial condition, including its liquidity and accumulated deficit, raises substantial doubt about its ability to continue as a going concern.)

General and Administrative Expenses (G&A)

Costs incurred for the overall management and administration of a business, not directly tied to production or sales. (ILAL's G&A expenses increased by 134% to $2,046,423, significantly contributing to the operating loss.)

Year-Over-Year Comparison

International Land Alliance Inc. has experienced a dramatic downturn in performance compared to the prior year. Revenue and lease income for the six months ended June 30, 2025, fell by 77% to $1,323,995 from $5,830,969 in 2024. This revenue collapse, coupled with a 134% increase in G&A expenses, has led to a significant operating loss and a net loss of $2,937,448, a stark reversal from the $3,743,848 net income reported in the prior year period. New risks related to increased derivative liability and persistent liquidity concerns have emerged.

Filing Documents

• form10-q.htm (10-Q) — 1217KB
• ex31-1.htm (EX-31.1) — 12KB
• ex31-2.htm (EX-31.2) — 12KB
• ex32-1.htm (EX-32.1) — 6KB
• ex32-2.htm (EX-32.2) — 6KB
• 0001641172-25-023905.txt ( ) — 6617KB
• ilal-20250630.xsd (EX-101.SCH) — 50KB
• ilal-20250630_cal.xml (EX-101.CAL) — 50KB
• ilal-20250630_def.xml (EX-101.DEF) — 279KB
• ilal-20250630_lab.xml (EX-101.LAB) — 403KB
• ilal-20250630_pre.xml (EX-101.PRE) — 350KB
• form10-q_htm.xml (XML) — 1005KB

Financial Information

Part I. Financial Information 3

Consolidated Financial Statements

Item 1. Consolidated Financial Statements 3 Consolidated Balance Sheets – As of June 30, 2025 (unaudited) and December 31, 2024 (audited) 3 Consolidated Statements of Operations – For the three and six months ended June 30, 2025, and 2024 (unaudited) 4 Consolidated Statements of Changes in Stockholders' Equity (Deficit) for the three and six months ended June 30, 2025, and 2024 (unaudited) 5 Consolidated Statements of Cash Flows for the six months ended June 30, 2025, and 2024 (unaudited) 7

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 8

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 30

Quantitative and Qualitative Disclosures about Market Risk

Item 3. Quantitative and Qualitative Disclosures about Market Risk 34

Controls and Procedures

Item 4. Controls and Procedures 34

Other Information

Part II. Other Information 35

Legal Proceedings

Item 1. Legal Proceedings 35

Risk Factors

Item 1A. Risk Factors 35

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 35

Defaults upon Senior Securities

Item 3. Defaults upon Senior Securities 35

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 35

Other Information

Item 5. Other Information 35

Exhibits

Item 6. Exhibits 35

Signatures

Signatures 36 2 PART I — FINANCIAL INFORMATION Item 1. Financial Statements INTERNATIONAL LAND ALLIANCE, INC. CONSOLIDATED BALANCE SHEETS June 30, 2025 (unaudited) December 31, 2024 ASSETS Current assets Cash $ 99,738 $ 26,120 Accounts receivable 1,197,673 1,264,634 Prepaid and other current assets 257,946 255,516 Total current assets 1,555,357 1,546,270 Land 15,776,526 15,776,526 Buildings, net 1,833,021 1,833,021 Furniture and equipment, net - - Other non-current assets 316,386 408,064 Goodwill 11,118,187 11,118,187 Total assets $ 30,599,477 $ 30,682,068 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable and accrued liabilities $ 1,563,444 $ 1,141,338 Accounts payable and accrued liabilities related parties - 326,947 Accounts payable and accrued liabilities - 326,947 Accrued interest 1,655,644 1,394,889 Contract liability 143,683 143,680 Deposits 20,500 20,500 Derivative liability 711,606 161,136 Convertible notes, net of debt discounts 600,000 600,000 Promissory notes, net of debt discounts 432,762 432,762 Promissory notes, net discounts – Related Parties 459,935 347,374 Promissory notes, net discounts 459,935 347,374 Other loans 9,224,528 8,553,338 Total current liabilities 14,812,102 13,121,964 Convertible notes, net of current portion 2,502,000 2,502,000 Total liabilities 17,314,102 15,623,964 Commitments and Contingencies (Note 10) - - Preferred Stock Series B (Temporary Equity) 293,500 293,500 Preferred Stock Series C (Temporary Equity) 310,000 310,000 Total Temporary Equity 603,500 603,500 Stockholders' Equity Preferred stock; $ 0.001 par value; 2,010,000 shares authorized; 117,000 and 117,000 Series A shares issued and outstanding as of June 30, 2025, and December 31, 2024, respectively 117 117 1,000 Series B shares issued and outstanding as of June 30, 2025, and December 31, 2024 1 1