Mercalot's Losses Mount Amidst Early Revenue Growth, Going Concern Doubts

TL;DR

**Mercalot is burning cash faster than it's making it, making it a speculative bet with serious going concern risks.**

AI Summary

Mercalot Inc., a development stage company operating an online commerce and classifieds platform, reported revenues of $5,560 for the three months ended September 30, 2025, a significant increase from $0 in the same period of 2024. Despite this revenue generation, the company incurred a net loss of $30,192 for the quarter, widening from a net loss of $13,664 in the prior year. Total operating expenses surged to $35,752, primarily driven by general and administrative expenses of $33,400, up from $11,312. The company's accumulated deficit grew to $68,488 as of September 30, 2025, from $38,296 as of June 30, 2025, raising substantial doubt about its ability to continue as a going concern. Cash and cash equivalents decreased from $39,246 to $15,846 during the quarter, with net cash used in operating activities totaling $23,400. Mercalot Inc. is dependent on additional investment capital to fund future operating expenses and plans to expand its 'SafeDeal Connect' platform beyond the Spanish market into the broader European market.

Why It Matters

Mercalot Inc.'s substantial accumulated deficit of $68,488 and continued net losses raise significant red flags for investors, indicating a high-risk investment. While the company generated its first revenue of $5,560, the rapid increase in operating expenses suggests a challenging path to profitability, potentially impacting employee stability and future growth. For customers, the 'SafeDeal Connect' platform's expansion into the European market could offer new services, but the company's financial instability might hinder long-term service reliability. In a competitive online marketplace landscape, Mercalot's struggle to secure sufficient capital could limit its ability to compete with established players, affecting its market share and overall viability.

Risk Assessment

Risk Level: high — The company explicitly states 'substantial doubt about the Company's ability to continue as a going concern' due to an accumulated deficit of $68,488 and a net loss of $30,192 for the quarter ended September 30, 2025. Cash and cash equivalents plummeted from $39,246 to $15,846, indicating rapid cash burn without sufficient offsetting revenue or financing.

Analyst Insight

Investors should exercise extreme caution and avoid Mercalot Inc. given the explicit going concern warning and significant accumulated deficit. Potential investors should wait for clear evidence of sustained profitability and robust capital infusion before considering any investment.

Financial Highlights

debt To Equity

N/A

revenue

$5,560

operating Margin

N/A

total Assets

$51,086

total Debt

$91,922

net Income

$(30,192)

eps

$(0.00)

gross Margin

N/A

cash Position

$15,846

revenue Growth

N/A

Revenue Breakdown

Key Numbers

• $5,560 — Revenues (Generated for the three months ended September 30, 2025, up from $0 in 2024.)
• $(30,192) — Net Loss (For the three months ended September 30, 2025, widened from $(13,664) in 2024.)
• $(68,488) — Accumulated Deficit (As of September 30, 2025, indicating substantial doubt about going concern.)
• $15,846 — Cash and Cash Equivalents (As of September 30, 2025, down from $39,246 as of June 30, 2025.)
• $(23,400) — Net Cash Used in Operating Activities (For the three months ended September 30, 2025, indicating significant cash burn.)
• $56,982 — Related Party Loan (Owed to directors Blas Mayor Reyes and Isabel Marin Vargas as of September 30, 2025.)
• 5,735,200 — Common Shares Outstanding (As of October 27, 2025.)
• $33,400 — General and Administrative Expenses (For the three months ended September 30, 2025, a significant increase from $11,312 in 2024.)

Key Players & Entities

• Mercalot Inc. (company) — registrant
• Blas Mayor Reyes (person) — director and related party loan provider
• Isabel Marin Vargas (person) — director and related party loan provider
• SafeDeal Connect (company) — mobile application and online marketplace platform
• Wyoming (regulator) — state of incorporation
• SEC (regulator) — filing oversight
• Valencia, Spain (company) — executive and business office location

FAQ

Risk Factors

• Going Concern Uncertainty [high — financial]: The company's accumulated deficit grew to $68,488 as of September 30, 2025, from $38,296 as of June 30, 2025. Coupled with a decrease in cash and cash equivalents from $39,246 to $15,846 and significant net cash used in operating activities of $23,400 for the quarter, this raises substantial doubt about Mercalot Inc.'s ability to continue as a going concern.
• High Operating Expense Burn [high — financial]: Total operating expenses surged to $35,752 for the three months ended September 30, 2025, a substantial increase from $13,664 in the prior year. This was primarily driven by a near tripling of General and Administrative expenses to $33,400 from $11,312, outpacing revenue generation and contributing to the widening net loss.
• Dependence on External Financing [high — financial]: Mercalot Inc. explicitly states its dependence on additional investment capital to fund future operating expenses. The current cash position of $15,846 is insufficient to cover ongoing operations, making future fundraising critical for survival.
• Limited Operating History and Market Traction [medium — operational]: As a development stage company, Mercalot Inc. has a limited operating history and has only recently begun generating revenue. The success of its 'SafeDeal Connect' platform and its expansion plans into the broader European market are unproven.
• Related Party Debt [medium — financial]: The company owes $56,982 as a related party loan to directors Blas Mayor Reyes and Isabel Marin Vargas as of September 30, 2025. While this loan has not changed from the prior quarter, its existence and terms could present conflicts of interest or repayment pressures.

Industry Context

Mercalot Inc. operates in the online commerce and classifieds platform sector, a highly competitive digital marketplace. The industry is characterized by rapid technological advancements, evolving consumer preferences, and intense competition from established global players and emerging startups. Companies in this space often rely on network effects, user acquisition strategies, and monetization models such as advertising, transaction fees, or premium listings.

Regulatory Implications

As a company operating online platforms, Mercalot Inc. may face regulatory scrutiny related to data privacy (e.g., GDPR if expanding into Europe), consumer protection laws, and fair competition practices. Compliance with these regulations is crucial, especially as the company plans international expansion, and failure to comply could result in fines or operational restrictions.

What Investors Should Do

1. Monitor future funding rounds closely: The company's survival is contingent on securing additional investment capital. Investors should track any announcements regarding equity or debt financing.
2. Scrutinize G&A expense control: The significant increase in General and Administrative expenses needs to be justified and managed to prevent further erosion of cash reserves.
3. Evaluate expansion strategy feasibility: Assess the market research and business plan for expanding 'SafeDeal Connect' into Europe, considering the competitive landscape and regulatory hurdles.
4. Understand related party loan terms: Clarify the terms, interest rate, and repayment schedule of the $56,982 loan from directors to assess potential risks and obligations.
5. Assess revenue growth sustainability: While revenue has started, its sustainability and scalability need to be proven to justify further investment and operational costs.

Key Dates

• 2025-09-30: End of Q3 2025 — Reporting period for the 10-Q, showing initial revenue generation but a significant increase in net loss and cash burn, exacerbating going concern doubts.
• 2025-06-30: End of Q2 2025 — Prior period balance sheet date, showing higher cash reserves ($39,246) and a smaller accumulated deficit ($38,296) compared to Q3 2025.
• 2024-09-30: End of Q3 2024 — Prior year comparable period, showing no revenue and a smaller net loss ($13,664) and lower operating expenses ($13,664) than Q3 2025.

Glossary

Development Stage Company

A company that has no commercial operations and has not generated significant revenue. Such companies are typically focused on developing a product or service. (Mercalot Inc. is classified as a development stage company, explaining its lack of substantial revenue and focus on future growth and funding.)

Accumulated Deficit

The cumulative net losses of a company since its inception, less any net gains. It represents a negative balance in retained earnings. (Mercalot's growing accumulated deficit to $68,488 raises concerns about its long-term financial viability and ability to continue as a going concern.)

Going Concern

An accounting assumption that a business will continue to operate for the foreseeable future. If substantial doubt exists about a company's ability to continue as a going concern, it must be disclosed. (The company's financial condition, particularly its cash burn and accumulated deficit, has led management to acknowledge substantial doubt about its ability to continue as a going concern.)

Related Party Loan

A loan made between parties that have a pre-existing business or personal relationship, such as between a company and its directors or officers. (Mercalot Inc. has a $56,982 related party loan from its directors, which is a significant liability and could indicate potential conflicts of interest or specific repayment terms.)

Net Cash Used in Operating Activities

The net amount of cash spent or used by a company in its normal business operations during a period. A negative number indicates cash outflow. (Mercalot's net cash used in operating activities of $23,400 for the quarter highlights its significant cash burn rate, depleting its available funds.)

Year-Over-Year Comparison

Compared to the prior year's comparable period (three months ended September 30, 2024), Mercalot Inc. has shown initial revenue generation of $5,560, a significant improvement from $0. However, this has been overshadowed by a substantial increase in net loss to $(30,192) from $(13,664), driven by a near tripling of operating expenses, particularly General and Administrative costs. The company's cash position has also deteriorated significantly, falling from $39,246 to $15,846 during the current quarter, intensifying concerns about its ability to continue as a going concern.

Filing Documents

• mercalot_i10q-093025.htm (10-Q) — 313KB
• mercalot_ex3101.htm (EX-31.1) — 10KB
• mercalot_ex3102.htm (EX-31.2) — 10KB
• mercalot_ex3201.htm (EX-32.1) — 4KB
• 0001683168-25-007781.txt ( ) — 1800KB
• none-20250930.xsd (EX-101.SCH) — 14KB
• none-20250930_cal.xml (EX-101.CAL) — 24KB
• none-20250930_def.xml (EX-101.DEF) — 21KB
• none-20250930_lab.xml (EX-101.LAB) — 160KB
• none-20250930_pre.xml (EX-101.PRE) — 125KB
• mercalot_i10q-093025_htm.xml (XML) — 103KB

Financial Statements (Unaudited)

Financial Statements (Unaudited) 3 Balance Sheets as of September 30, 2025 (Unaudited) and June 30, 2025 (Audited) 4 5 6 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 12 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 23 Item 4.

Controls and Procedures

Controls and Procedures 23 PART II OTHER INFORMATION: Item 1.

Legal Proceedings

Legal Proceedings 24 Item 1A

Risk Factors

Risk Factors 24 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 24 Item 3. Defaults Upon Senior Securities 24 Item 4. Submission of Matters to a Vote of Securities Holders 24 Item 5. Other Information 24 Item 6. Exhibits 24

Signatures

Signatures 25 2 PART 1. – FINANCIAL INFORMATION ITEM 1.

FINANCIAL STATEMENTS

FINANCIAL STATEMENTS The accompanying interim financial statements of Mercalot Inc. ("the Company", "we", "us" or "our"), have been prepared without audit pursuant to the rules and regulations of the Securities and Exchange Commission. The interim financial statements are condensed and 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 Mercalot Inc. BALANCE SHEETS As of September 30, 2025 As of June 30, 2025 ASSETS Current Assets Cash and cash equivalents $ 15,846 $ 39,246 Total Current Assets 15,846 39,246 Total Intangible Assets, Net 35,240 37,592 Total Assets $ 51,086 $ 76,838 LIABILITIES AND STOCKHOLDERS' DEFICIT Current Liabilities Accounts payable-related party $ 17,000 $ 14,000 Deferred revenue 17,940 16,500 Related party loan 56,982 56,982 Total Current Liabilities 91,922 87,482 Total Liabilities 91,922 87,482 Stockholders' Deficit Common stock, par value $ 0.0001 ; 75,000,000 shares authorized, 5,735,200 and 5,735,200 shares issued and outstanding as of September 30, 2025 and June 30, 2025, respectively 574 574 Additional paid in capital 27,078 27,078 Accumulated deficit ( 68,488 ) ( 38,296 ) Total Stockholders' Deficit ( 40,836 ) ( 10,644 ) Total Liabilities and Stockholders' Deficit $ 51,086 $ 76,838 See accompanying notes, which are an integral part of these financial statements 4 Mercalot Inc. Three months ended September 30, 2025 and 2024 Three months ended September 30, 2025 Three months ended September 30, 2024 REVENUES $ 5,560 $ – OPERATING EXPENSES General and Administrative Expenses ( 33,400 ) ( 11,312 )

View Full Filing

View this 10-Q filing on SEC EDGAR