CBDW's Losses Shrink Amid Zero Revenue, Derivative Liabilities Soar

TL;DR

**CBDW is a speculative bet on an unproven AI pivot with no revenue, rapidly increasing liabilities, and a going concern warning; avoid.**

AI Summary

1606 Corp. (CBDW) reported a net loss of $384,516 for the three months ended September 30, 2025, a significant improvement from the $3,569,636 net loss in the same period of 2024. For the nine months ended September 30, 2025, the net loss was $802,966, substantially lower than the $4,195,265 loss in the prior year. The company generated no revenue in the three and nine months ended September 30, 2025, a stark contrast to the $7,195 in revenue reported for the nine months ended September 30, 2024, indicating a complete cessation of CBD product sales. Operating expenses decreased dramatically to $111,446 for the three months ended September 30, 2025, from $3,246,179 in 2024, primarily due to a reduction in selling, general, and administrative costs. Total liabilities increased to $2,904,041 as of September 30, 2025, from $2,205,632 at December 31, 2024, driven by a substantial rise in derivative liabilities to $1,706,892 from $40,603. The company's cash position remains precarious at $998 as of September 30, 2025, down from $2,078 at December 31, 2024, and it continues to operate under a going concern doubt, relying on future equity financing.

Why It Matters

For investors, CBDW's continued 'going concern' doubt and zero revenue generation are critical red flags, indicating severe operational challenges and a high risk of further dilution. The shift from CBD products to AI chatbots, while potentially strategic, has yet to yield any revenue, placing immense pressure on the company's ability to sustain operations. The dramatic increase in derivative liabilities to over $1.7 million suggests complex financing arrangements that could further impact shareholder value. Competitively, the company is attempting to pivot into the crowded AI chatbot market without a clear path to profitability, making its long-term viability highly questionable.

Risk Assessment

Risk Level: high — The company explicitly states a 'going concern' doubt due to its inability to achieve significant profitable operations and dependence on raising capital. Cash on hand is critically low at $998 as of September 30, 2025, and total liabilities have surged to $2,904,041, largely driven by a massive increase in derivative liabilities to $1,706,892 from $40,603 at December 31, 2024. The complete absence of revenue for the nine months ended September 30, 2025, further underscores its high-risk profile.

Analyst Insight

Investors should exercise extreme caution and consider divesting any existing positions in CBDW. The company's 'going concern' warning, zero revenue, and escalating derivative liabilities indicate a highly unstable financial situation. New investors should avoid this stock until there is clear evidence of sustainable revenue generation and a resolution to its significant financial uncertainties.

Financial Highlights

debt To Equity

N/A

revenue

$0

operating Margin

N/A

total Assets

$14,602

total Debt

$2,904,041

net Income

$(384,516)

eps

N/A

gross Margin

N/A

cash Position

$998

revenue Growth

N/A

Revenue Breakdown

Key Numbers

• $0 — Revenue (No revenue generated for the three and nine months ended September 30, 2025, compared to $7,195 in 2024.)
• $(802,966) — Net Loss (9 months) (Reduced from $(4,195,265) in the prior year, but still a significant loss.)
• $998 — Cash (Critically low cash balance as of September 30, 2025, down from $2,078 at December 31, 2024.)
• $1,706,892 — Derivative Liability (Increased significantly from $40,603 at December 31, 2024, indicating complex and potentially risky financing.)
• $2,904,041 — Total Liabilities (Increased from $2,205,632 at December 31, 2024, primarily due to derivative liabilities.)
• 295,836,397 — Shares Outstanding (As of November 12, 2025, indicating potential for significant dilution.)
• $(2,889,439) — Total Stockholders' Deficit (Increased from $(2,195,492) at December 31, 2024, reflecting accumulated losses.)
• 111,446 — Operating Expenses (3 months) (Decreased significantly from $3,246,179 in the prior year, mainly due to reduced SG&A.)

Key Players & Entities

• 1606 Corp. (company) — issuer of the 10-Q filing
• Singlepoint Inc. (company) — former parent company that spun off 1606 Corp.
• SEC (regulator) — Securities and Exchange Commission
• $384,516 (dollar_amount) — net loss for the three months ended September 30, 2025
• $802,966 (dollar_amount) — net loss for the nine months ended September 30, 2025
• $1,706,892 (dollar_amount) — derivative liability as of September 30, 2025
• $998 (dollar_amount) — cash on hand as of September 30, 2025
• $2,904,041 (dollar_amount) — total liabilities as of September 30, 2025
• Nevada (company) — state of incorporation for 1606 Corp.

FAQ

Risk Factors

• Going Concern Uncertainty [high — financial]: The company has not achieved significant profitable operations and relies on future equity financing to sustain operations. As of September 30, 2025, cash was $998, and total liabilities were $2,904,041, with a substantial increase in derivative liabilities to $1,706,892. This raises substantial doubt about the company's ability to continue as a going concern for the next twelve months.
• Significant Derivative Liabilities [high — financial]: Derivative liabilities increased dramatically from $40,603 as of December 31, 2024, to $1,706,892 as of September 30, 2025. This indicates complex financing arrangements that could pose significant financial risk and potential future obligations.
• Accumulated Deficit and Stockholders' Deficit [high — financial]: The company has an accumulated deficit of $7,739,968 as of September 30, 2025, resulting in a total stockholders' deficit of $2,889,439. This negative equity position, worsened from the prior year, highlights the company's long-term unprofitability.
• Cessation of Revenue Generation [high — operational]: The company reported $0 revenue for the three and nine months ended September 30, 2025, compared to $7,195 in the prior year's nine-month period. This complete halt in sales indicates a severe operational challenge or strategic shift with unproven viability.
• Extremely Low Cash Balance [high — financial]: The company's cash position stands at a critically low $998 as of September 30, 2025, down from $2,078 at the end of 2024. This minimal liquidity severely limits operational flexibility and the ability to meet short-term obligations.
• Increasing Total Liabilities [medium — financial]: Total liabilities grew to $2,904,041 as of September 30, 2025, from $2,205,632 at December 31, 2024. This increase is primarily driven by the surge in derivative liabilities, adding to the company's financial burden.
• Dilution Risk [medium — financial]: With 295,836,397 shares outstanding as of November 12, 2025, and a stated reliance on future equity financing, there is a significant risk of further dilution for existing shareholders.
• Shift in Business Focus [medium — operational]: The company's stated business is AI chatbots for the CBD industry and public companies. The cessation of CBD product sales suggests a pivot or a significant challenge in its original market, with the AI chatbot business yet to demonstrate revenue generation.

Industry Context

1606 Corp. operates in the AI chatbot space, targeting both the CBD industry and public companies. The broader AI chatbot market is rapidly evolving with increasing demand for specialized solutions. However, the company's specific focus on the CBD industry, coupled with its cessation of CBD product sales, suggests a challenging niche or a strategic pivot. Competitors in the AI chatbot space range from large tech firms to specialized startups, making differentiation and market penetration critical.

Regulatory Implications

While the company's current focus is on AI chatbots, its past involvement in the CBD industry may carry residual regulatory considerations depending on the nature of its prior operations. The significant increase in derivative liabilities could also attract scrutiny from regulators regarding the complexity and risk of its financing structures.

What Investors Should Do

1. Monitor future financing rounds closely.
2. Scrutinize the strategy behind the cessation of CBD sales.
3. Evaluate the nature and risk of derivative liabilities.
4. Assess the company's ability to generate revenue and achieve profitability.

Key Dates

• 2025-09-30: End of Q3 2025 — Reported $0 revenue, a net loss of $384,516, and a critically low cash balance of $998. Total liabilities increased to $2,904,041, driven by derivative liabilities.
• 2024-09-30: End of Q3 2024 — Reported $0 revenue for the quarter (though $7,195 for the 9 months), a net loss of $3,569,636, and significantly lower operating expenses compared to the current period.
• 2024-12-31: End of Fiscal Year 2024 — Total liabilities were $2,205,632 and cash was $2,078. Derivative liabilities were $40,603.
• 2025-03-31: Form 10-K Filing for FY 2024 — Provided audited financial statements for the year ended December 31, 2024, including details on the company's financial condition and operations.

Glossary

Derivative Liability

An obligation arising from a financial derivative contract whose value is derived from an underlying asset, index, or rate. Changes in the fair value of these liabilities can significantly impact a company's financial results. (The substantial increase in derivative liabilities to $1,706,892 from $40,603 is a major driver of the company's increased total liabilities and a key risk factor.)

Accumulated Deficit

The cumulative net losses of a company since its inception, less any net gains. It represents the total loss that has not been offset by profits. (The company's accumulated deficit of $7,739,968 indicates a history of unprofitability, contributing to its negative stockholders' deficit.)

Going Concern

An accounting assumption that a company 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 explicitly states substantial doubt about its ability to continue as a going concern, highlighting its precarious financial situation and reliance on external financing.)

Stockholders' Deficit

The amount by which a company's liabilities exceed its assets, resulting in a negative equity position for shareholders. (The company has a significant stockholders' deficit of $2,889,439, which has increased from the prior year, underscoring its financial distress.)

Convertible Notes, net of discount

Debt instruments that can be converted into a predetermined amount of the issuer's equity. The 'net of discount' indicates that the carrying value is less than the face value, often due to features like warrants or conversion options. (These notes have increased significantly to $486,613, contributing to the company's liabilities and potentially leading to future equity dilution.)

Year-Over-Year Comparison

Compared to the prior year's nine-month period, 1606 Corp. has seen a dramatic reduction in its net loss, from $4,195,265 to $802,966, and a significant decrease in operating expenses, primarily SG&A, from $3,911,339 to $402,762. However, this improvement is overshadowed by the complete cessation of revenue generation, which was $7,195 in the prior year's nine-month period. Total liabilities have increased substantially, largely due to a massive rise in derivative liabilities, while the cash position has dwindled to a critical $998.

Key Financial Figures

• $0.0001 — g shares of its common stock, par value $0.0001. Special Note Regarding Forward-Lookin

Filing Documents

• cbdw_10q.htm (10-Q) — 647KB
• cbdw_ex311.htm (EX-31.1) — 15KB
• cbdw_ex312.htm (EX-31.2) — 15KB
• cbdw_ex321.htm (EX-32.1) — 5KB
• 0001477932-25-008088.txt ( ) — 3075KB
• cbdw-20250930.xsd (EX-101.SCH) — 33KB
• cbdw-20250930_lab.xml (EX-101.LAB) — 205KB
• cbdw-20250930_cal.xml (EX-101.CAL) — 32KB
• cbdw-20250930_pre.xml (EX-101.PRE) — 164KB
• cbdw-20250930_def.xml (EX-101.DEF) — 99KB
• cbdw_10q_htm.xml (XML) — 356KB

—FINANCIAL INFORMATION

PART I—FINANCIAL INFORMATION

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS. 3

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. 17

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. 19

CONTROLS AND PROCEDURES

ITEM 4. CONTROLS AND PROCEDURES. 20

–OTHER INFORMATION

PART II–OTHER INFORMATION

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS. 21

OTHER INFORMATION

ITEM 5. OTHER INFORMATION. 21

EXHIBITS

ITEM 6. EXHIBITS. 22

SIGNATURES

SIGNATURES 23 2 Table of Contents

—FINANCIAL INFORMATION

PART I—FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements. 1606 CORP. CONDENSED BALANCE SHEETS September 30, 2025 December 31, Assets (Unaudited) 2024 Current Assets Cash $ 998 $ 2,078 Prepaids & other current assets 13,604 8,062 Total Current Assets 14,602 10,140 Total Assets $ 14,602 $ 10,140 Liabilities and Stockholders' Deficit Current Liabilities Accounts payable and accrued liabilities $ 604,106 $ 499,231 Accrued interest 42,974 48,486 Note payable to related party 63,456 63,456 Convertible notes, net of discount 486,613 188,306 Derivative liability 1,706,892 40,603 Note payable to shareholder - 1,365,550 Total Current Liabilities 2,904,041 2,205,632 Total Liabilities 2,904,041 2,205,632 Stockholders' Deficit Undesignated Preferred Stock, par value $ 0.0001 ; 39,999,900 authorized; no shares issued and outstanding - - Class A Convertible Preferred Stock, par value $ 0.0001 per share, 60,000,000 shares designated; 57,717,951 and 59,560,127 shares issued and outstanding, respectively 5,772 5,956 Series B Super Voting Preferred Stock, par value $ 0.0001 per share, 100 shares designated; 90 and 0 shares issued and outstanding, respectively - - Common stock, par value $ 0.0001 per share, 5,000,000,000 shares authorized; 201,421,230 and 112,711,945 shares issued and outstanding, respectively 20,141 11,270 Additional Paid-in Capital 4,824,616 4,724,284 Accumulated Deficit ( 7,739,968 ) ( 6,937,002 ) Total Stockholders' Deficit ( 2,889,439 ) ( 2,195,492 ) Total Liabilities and Stockholders' Deficit $ 14,602 $ 10,140 The accompanying notes are an integral part of these unaudited condensed financial statements. 3 Table of Contents 1606 CORP. CONDENSED STATEMENTS OF OPERATIONS (Unaudited) Three Months Ended Three Months Ended Nine Months Ended Nine Months Ended September 30, September 30, September 30, September 30, 2025 2024 2025 2024

Business

Business The Company is an AI company specializing in building and merchandizing AI Chatbots for the CBD industry and AI Chatbots for public companies. Going Concern The accompanying financial statements have been prepared assuming the Company will continue as a going concern which contemplates the realization of assets and settlement of liabilities and commitments in the normal course of business. As of September 30, 2025, the Company has yet to achieve significant profitable operations and is dependent on its ability to raise capital from stockholders or other sources to sustain operations and to ultimately achieve viable operations. The financial statements do not include any adjustments that might result from the outcome of these uncertainties. These factors raise substantial doubt about the Company's ability to continue as a going concern for the period of twelve months from the issuance date of this report. The Company's ability to continue in existence is dependent on its ability to develop its business and to achieve profitable operations. Since the Company does not anticipate achieving profitable operations and/or adequate cash flows in the near term, management will continue to pursue additional equity financing through private placements of the Company's common stock. NOTE 2 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited condensed financial statements and related notes have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC"). Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been omitted pursuant to such rules and regulations. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for

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