MIBE 10-Q
Miami Breeze Car Care Inc (MIBE)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
(Mark One)
For the quarterly period ended:
or
For the transition period from ___________ to ___________
Commission file number:
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including
area code: (
Securities registered pursuant to Section 12(b) of the Exchange Act:
| Title of each class | Trading Symbol | Name of each exchange on which registered | ||
| N/A | N/A | N/A |
Securities registered pursuant to Section 12(g) of the Exchange Act: Common Stock, par value $0.0001 per share
Indicate by checkmark whether the registrant (1)
has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past
90 days. Yes ☐
Indicate by check mark whether the registrant
has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulations S-T (§232.405
of this chapter) during the preceding 12 months (or for shorter period that the registrant was required to submit and post such files).
Yes ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| ☒ | Smaller reporting company | ||
| Emerging growth company |
If an emerging growth company, indicate by check
mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant
is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐
Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date: 48,759,599 shares of common stock are issued and outstanding as of August 14, 2025.
Documents Incorporated by Reference: None
MIAMI BREEZE CAR CARE INC.
FORM 10-Q
March 31, 2025
TABLE OF CONTENTS
i
Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q (this “Report”) contains forward-looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical facts, contained in this Report, including statements regarding our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans and objectives of management and expected market growth, are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “could,” “will,” “would,” “should,” “expect,” “plan,”, “anticipate,” “believe,” “estimate,” “intend,” “predict,” “seek,” “contemplate,” “project,” “continue,” “potential,” “ongoing” or the negative of these terms or other comparable terminology. These forward-looking statements include, but are not limited to, statements about:
| ● | our ability to obtain additional funds for our operations; |
| ● | our reliance on third party distributors and manufacturers; |
| ● | the initiation, timing, progress and results of our research and development programs; |
| ● | our dependence on current and future collaborators for developing new products; |
| ● | the rate and degree of market acceptance of our products; |
| ● | the implementation of our business model and strategic plans for our business; |
| ● | our estimates of our expenses, losses, future revenue and capital requirements, including our needs for additional financing; |
| ● | our reliance on third party suppliers to supply the materials and components for our products; |
| ● | our ability to attract and retain qualified key management and technical personnel; |
| ● | our financial performance; |
| ● | the impact of government regulation and developments relating to our competitors or our industry; and |
| ● | other risks and uncertainties, including those listed under the caption “Risk Factors.” |
These statements relate to future events or our future operational or financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance, or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Factors that may cause actual results to differ materially from current expectations include, among other things, those listed under the section titled “Risk Factors” and elsewhere in this Report.
Any forward-looking statement in this Report reflects our current view with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to our business, results of operations, industry, and future growth. Given these uncertainties, you should not place undue reliance on these forward-looking statements. No forward-looking statement is a guarantee of future performance. You should read this Report completely and with the understanding that our actual future results may be materially different from any future results expressed or implied by these forward-looking statements. Except as required by law, we assume no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future.
This Report also contains estimates, projections and other information concerning our industry, our business and the markets for car care products, including data regarding the estimated size of those markets and their projected growth rates. Information that is based on estimates, forecasts, projections, or similar methodologies is inherently subject to uncertainties and actual events or circumstances may differ materially from events and circumstances reflected in this information. Unless otherwise expressly stated, we obtained these industry, business, market and other data from reports, research surveys, studies and similar data prepared by third parties, industry, and general publications, government data and similar sources. In some cases, we do not expressly refer to the sources from which these data are derived.
You are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date of this Report. Except as required by law, we do not undertake any obligation to update or release any revisions to these forward-looking statements to reflect any events or circumstances, whether as a result of new information, future events, changes in assumptions or otherwise, after the date hereof.
ii
PART I – FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
MIAMI BREEZE CAR CARE INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
| March 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| CURRENT ASSETS: | ||||||||
| Cash | $ | $ | ||||||
| Accounts receivable | ||||||||
| Inventory | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Total Current Assets | ||||||||
| Property and equipment, net | ||||||||
| Operating right of use asset, net | ||||||||
| Goodwill | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT) | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Accounts payable and accrued expenses | $ | $ | ||||||
| Acquisition payable | ||||||||
| Lease liability | ||||||||
| Due to related parties | ||||||||
| Contract liabilities | ||||||||
| Subscriptions payable | ||||||||
| Total Current Liabilities | ||||||||
| Lease liability, net of current portion | ||||||||
| Total Liabilities | ||||||||
| SHAREHOLDERS' EQUITY (DEFICIT): | ||||||||
| Preferred stock; par value $; shares authorized; Series A Preferred stock; shares designated; shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively | ||||||||
| Common stock; par value $: shares authorized; and shares issued and and shares outstanding at March 31, 2025 and December 31, 2024, respectively | ||||||||
| Additional paid-in capital | ||||||||
| Treasury stock ( shares at March 31, 2025 and December 31, 2024) | ( | ) | ( | ) | ||||
| Other comprehensive gain | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total Shareholders' Equity (Deficit) | ( | ) | ||||||
| Total Liabilities and Shareholders' Equity | $ | $ | ||||||
See accompanying notes to unaudited consolidated financial statements.
1
MIAMI BREEZE CAR CARE INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Unaudited)
| For the Three Months Ended March 31, |
||||||||
| 2025 | 2024 | |||||||
| SALES | $ | $ | ||||||
| COST OF SALES | ||||||||
| GROSS PROFIT | ||||||||
| OPERATING EXPENSES: | ||||||||
| Advertising and promotion | ||||||||
| Professional fees | ||||||||
| Professional fees - related parties | ||||||||
| General and administrative expenses | ||||||||
| Total Operating Expenses | ||||||||
| LOSS FROM OPERATIONS | ( | ) | ( | ) | ||||
| OTHER INCOME (EXPENSE): | ||||||||
| Interest expense | ( | ) | ||||||
| Foreign currency transaction gain (loss) | ( | ) | ||||||
| Total Other Income (Expense), net | ( | ) | ||||||
| NET LOSS | $ | ( | ) | $ | ( | ) | ||
| COMPREHENSIVE LOSS: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Other comprehensive gain: | ||||||||
| Unrealized foreign currency translation gain | ||||||||
| Comprehensive loss | $ | ( | ) | $ | ( | ) | ||
| NET LOSS PER COMMON SHARE: | ||||||||
| Basic and diluted | $ | ) | $ | ) | ||||
| WEIGHTED AVERAGE COMMON SHARE OUTSTANDING: | ||||||||
| Basic and diluted | ||||||||
See accompanying notes to unaudited consolidated financial statements.
2
MIAMI BREEZE CAR CARE INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIT)
FOR THE THREE MONTHS ENDED MARCH 31, 2025 AND 2024
(Unaudited)
| Additional | Accumulated Other | Total | ||||||||||||||||||||||||||||||||||||||
| Preferred Stock | Common Stock | Paid-in | Treasury Stock | Comprehensive | Accumulated | Shareholders' | ||||||||||||||||||||||||||||||||||
| # of Shares | Amount | # of Shares | Amount | Capital | # of Shares | Amount | Gain | Deficit | Equity (Deficit) | |||||||||||||||||||||||||||||||
| Balance, December 31, 2024 | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||||||||||
| Common stock issued for acquisition | - | - | ||||||||||||||||||||||||||||||||||||||
| Common stock issued for cash | - | - | ||||||||||||||||||||||||||||||||||||||
| Accumulated other comprehensive gain | - | - | - | |||||||||||||||||||||||||||||||||||||
| Net loss | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||
| Balance, March 31, 2025 | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | |||||||||||||||||||||||||||||
| Accumulated Other | ||||||||||||||||||||||||||||||||||||||||
| Preferred Stock | Common Stock | Paid-in | Treasury Stock | Comprehensive | Accumulated | Shareholders' | ||||||||||||||||||||||||||||||||||
| # of Shares | Amount | # of Shares | Amount | Capital | # of Shares | Amount | Gain | Deficit | Equity | |||||||||||||||||||||||||||||||
| Balance, December 31, 2023 | $ | $ | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||||||||||||
| Common stock issued for services | - | - | ||||||||||||||||||||||||||||||||||||||
| Common stock issued for cash | - | - | ||||||||||||||||||||||||||||||||||||||
| Net loss | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||
| Balance, March 31, 2024 | $ | $ | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||||||||||||
See accompanying notes to unaudited consolidated financial statements.
3
MIAMI BREEZE CAR CARE INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| For the Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation expense | ||||||||
| Stock-based professional fees | ||||||||
| Change in operating assets and liabilities: | ||||||||
| Accounts receivable | ||||||||
| Inventory | ( | ) | ||||||
| Prepaid expenses and other current assets | ( | ) | ( | ) | ||||
| Prepaid expenses - related party | ||||||||
| Accounts payable | ( | ) | ||||||
| Contract liabilities | ||||||||
| NET CASH USED IN OPERATING ACTIVITIES | ( | ) | ( | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Cash acquired in acquisition | ||||||||
| Purchase of property and equipment | ( | ) | ||||||
| NET CASH PROVIDED BY INVESTING ACTIVITIES | ||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Proceeds from sale of common stock | ||||||||
| Payment of deferred offering costs | ( | ) | ||||||
| Proceeds from related party advances | ||||||||
| NET CASH PROVIDED BY FINANCING ACTIVITIES | ||||||||
| NET INCREASE (DECREASE) IN CASH | ( | ) | ||||||
| Effect of exchange rate changes on cash | ||||||||
| CASH, beginning of period | ||||||||
| CASH, end of period | $ | $ | ||||||
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ||||||||
| Cash paid for: | ||||||||
| Interest | $ | $ | ||||||
| Income taxes | $ | $ | ||||||
| Non-cash investing and financing activities: | ||||||||
| Common shares issued for subscription payable | $ | |||||||
| ACQUISITIONS: | ||||||||
| Assets acquired: | ||||||||
| Cash | $ | $ | ||||||
| Accounts receivable | ||||||||
| Inventory | ||||||||
| Prepaid expenses | ||||||||
| Due from related party | ||||||||
| Property and equipment | ||||||||
| Operating right of use asset | ||||||||
| Total assets acquired | ||||||||
| Less: liabilities assumed: | ||||||||
| Accounts payable and accrued expenses | ||||||||
| Acquisition payable | ||||||||
| Contract liabilities | ||||||||
| Due to related parties | ||||||||
| Lease liabilities | ||||||||
| Total liabilities assumed | ||||||||
| Net assets acquired | $ | $ | ||||||
See accompanying notes to unaudited consolidated financial statements.
4
MIAMI BREEZE AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2025
(Unaudited)
NOTE 1 – NATURE OF ORGANIZATION
Nature of Organization
Miami Breeze Car Care Inc. (the “Company”) was incorporated on February 25, 2021 in the State of Florida, The Company is a developer and distributor of automotive care products that provide a long-lasting, new car scent.
On January 30, 2025, the Company formed a wholly-owned subsidiary, Gin City Management GmbH, a limited liability company incorporated under the laws of Munich, Germany (“Gin City Management”). The purpose of Gin City Management is the development, production, distribution and marketing of beverages of all kinds, both alcoholic and non-alcoholic, as well as acquisition, management, operation and sale of catering businesses.
On February 28, 2025, the Company completed the
acquisition of
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AMD BASIS OF PRESENTATION
Basis of Presentation and Principles of Consolidation
The consolidated financial statements of the Company include the accounts of the Miami Breeze, Inc. and its wholly owned subsidiaries, Gin City Group, Inc, and its wholly owned subsidiary, Gincity GmbH since its acquisition on February 28, 2025, and Gin City Management, since its incorporation on January 30, 2025. All intercompany accounts and transactions have been eliminated in consolidation.
Management acknowledges its responsibility for the preparation of the accompanying unaudited consolidated financial statements which reflect all adjustments, consisting of normal recurring adjustments, considered necessary in its opinion for a fair statement of its financial position and the results of its operations for the periods presented. The accompanying unaudited consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (the “U.S. GAAP”) for interim financial information and with the instructions Article 8-03 of Regulation S-X. Operating results for interim periods are not necessarily indicative of results that may be expected for the fiscal year as a whole.
Certain information and note disclosure normally included in consolidated financial statements prepared in accordance with U.S. GAAP has been condensed or omitted from these statements pursuant to such accounting principles and, accordingly, they do not include all the information and notes necessary for comprehensive financial statements. These unaudited consolidated financial statements should be read in conjunction with the summary of significant accounting policies and notes to the financial statements for the year ended December 31, 2024 of the Company which were included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024, as filed with the Securities and Exchange Commission (the “SEC”) on March 31, 2025.
Emerging Growth Company
The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make a comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
5
MIAMI BREEZE AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2025
(Unaudited)
Going Concern
These consolidated financial statements have been
prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the
normal course of business. As reflected in the accompanying consolidated financial statements, the Company had a net loss of $
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates during the three months ended March 31, 2025 and 2024 include the valuation of accounts receivable, estimates for obsolete or slow-moving inventory, the useful life of property and equipment, the valuation of intangible assets, the valuation of assets acquired and liabilities assumed in a business acquisition, the valuation of right of use assets and related liabilities, assumptions used in assessing impairment of long-lived assets, and the fair value of non-cash equity transactions.
Fair Value of Financial Instruments and Fair Value Measurements
The Company analyzes all financial instruments with features of both liabilities and equity under the Financial Accounting Standard Board’s (the “FASB”) accounting standard for such instruments. Under this standard, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Disclosures about the fair value of financial instruments are based on pertinent information available to the Company on March 31, 2025 and December 31, 2024. Accordingly, the estimates presented in these financial statements are not necessarily indicative of the amounts that could be realized on disposition of the financial instruments. FASB ASC 820 specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The three levels of the fair value hierarchy are as follows:
Level 1—Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date.
Level 2—Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data.
Level 3—Inputs are unobservable inputs which reflect the reporting entity’s own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information.
The carrying amounts reported in the balance sheets for cash, inventory, prepaid expenses and other current assets, and accounts payable and accrued expenses approximate their fair market value based on the short-term maturity of these instruments.
The Company measures certain financial instruments
at fair value on a recurring basis. As of March 31, 2025 and December 31, 2024, the Company had
ASC 825-10 “Financial Instruments”, allows entities to voluntarily choose to measure certain financial assets and liabilities at fair value (fair value option). The fair value option may be elected on an instrument-by-instrument basis and is irrevocable, unless a new election date occurs. If the fair value option is elected for an instrument, unrealized gains and losses for that instrument should be reported in earnings at each subsequent reporting date. The Company did not elect to apply the fair value option to any outstanding instruments.
6
MIAMI BREEZE AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2025
(Unaudited)
The carrying amounts reported in the consolidated balance sheets for cash, accounts receivable, inventory, prepaid expenses and other current assets, accounts payable and accrued expenses, acquisition payable, lease liability, due to related parties, contract liabilities, and subscriptions payable approximate their fair values based on the short-term maturity of these instruments.
Business Acquisition
The Company accounted for its business acquisition using the acquisition method of accounting where the assets acquired and liabilities assumed are recognized based on their respective estimated fair values. The excess of the purchase price over the estimated fair values of the net assets acquired was recorded as goodwill. Determining the fair value of certain acquired assets and liabilities was subjective in nature and often involves the use of significant estimates and assumptions, including, but not limited to, the selection of appropriate valuation methodology, projected revenue, expenses, and cash flows, weighted average cost of capital, discount rates, and estimates of terminal values. The business acquisition was included in the Company’s consolidated financial statements as of the date of the acquisition. (See Note 3).
Cash and Cash Equivalents
For the purposes of the statements of cash flow,
the Company considers all highly liquid instruments with a maturity of three months or less at the purchase date and money market accounts
to be cash equivalents. The Company has
Accounts Receivable
The Company recognizes an allowance for losses on accounts receivable in an amount equal to the estimated probable losses net of recoveries under the current expected credit loss method. The allowance is based on an analysis of historical bad debt experience, current receivables aging and expected future write-offs, as well as an assessment of specific identifiable customer accounts considered at risk or uncollectible. On January 1, 2023, the Company adopted ASC 326, “Financial Instruments - Credit Losses”. In accordance with ASC 326, an allowance is maintained for estimated forward-looking losses resulting from the possible inability of customers to make required payments (current expected losses). The amount of the allowance is determined principally on the basis of past collection experience and known financial factors regarding specific customers. The expense associated with the allowance for credit losses on accounts receivable is recognized in general and administrative expenses.
Inventory
Inventory, consisting of finished goods, are stated
at the lower of cost and net realizable value utilizing the weighted average cost method. A reserve is established when management determines
that certain inventories may not be saleable. If inventory costs exceed the expected net realizable value due to obsolescence or quantities
in excess of expected demand, the Company will record reserves for the difference between the cost and the net realizable value. These
reserves are recorded based on estimates and included in cost of sales. During the three months ended March 31, 2025 and 2024, the Company
did
Prepaid Expenses
Prepaid expenses are amortized into expense over
the term of the respective agreement or as services are performed. Prepaid expenses amounted to $
Property and Equipment
Property and equipment are stated at cost and are depreciated using the straight-line method over their estimated useful lives of five to seven years. Leasehold improvements are depreciated over the shorter of the useful life or lease term including scheduled renewal terms. Maintenance and repairs are charged to expense as incurred. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income in the year of disposition. The Company examines the possibility of decreases in the value of these assets when events or changes in circumstances reflect the fact that their recorded value may not be recoverable.
Goodwill
The Company’s business acquisition resulted in the recording of goodwill. Goodwill represented the excess of the purchase price paid over the fair value of the net assets acquired in the business acquisition. Goodwill is subject to impairment tests at least annually. The Company reviews the carrying amounts of goodwill by reporting unit at least annually, or when indicators of impairment are present, to determine if goodwill may be impaired. The Company includes assumptions about the expected future operating performance as part of a discounted cash flow analysis to estimate fair value. If the carrying value of these assets is not recoverable, based on the discounted cash flow analysis, management compares the fair value of the assets to the carrying value. Goodwill is considered impaired if the recorded value exceeds the fair value. The Company may first assess qualitative factors to determine whether it is more likely than not that the fair value of goodwill is less than its carrying value. The Company would not be required to quantitatively determine the fair value of goodwill unless it determines, based on the qualitative assessment, that it is more likely than not that its fair value is less than the carrying value. Future cash flows of the individual indefinite-lived intangible assets are used to measure their fair value after consideration of certain assumptions, such as forecasted growth rates and cost of capital, which are derived from internal projection and operating plans.
7
MIAMI BREEZE AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2025
(Unaudited)
Impairment of Long-Lived Assets
In accordance with ASC Topic 360, the Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable, or at least annually. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The amount of impairment is measured as the difference between the asset’s estimated fair value and its book value.
Leases
The Company uses Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842). The guidance requires lessees to recognize lease assets and lease liabilities for most operating leases. In addition, the guidance requires that lessors separate lease and non-lease components in a contract in accordance with the new revenue guidance in ASC 606. The Company applied the package of practical expedients to leases that commenced before the effective date whereby the Company elected to not reassess the following: (i) whether any expired or existing contracts contain leases and (ii) initial direct costs for any existing leases. For contracts entered into on or after the effective date, at the inception of a contract the Company assessed whether the contract is, or contains, a lease. The Company’s assessment is based on: (1) whether the contract involves the use of a distinct identified asset, (2) whether it obtains the right to substantially all the economic benefit from the use of the asset throughout the period, and (3) whether it has the right to direct the use of the asset. The Company will allocate the consideration in the contract to each lease component based on its relative stand-alone price to determine the lease payments. The Company has elected not to recognize right-of-use assets and lease liabilities for short-term leases that have a term of 12 months or less.
Operating lease ROU assets represented the right to use the leased asset for the lease term and operating lease liabilities were recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most leases do not provide an implicit rate, the Company used an incremental borrowing rate based on the information available at the adoption date in determining the present value of future payments. Lease expense for minimum lease payments was amortized on a straight-line basis over the lease term.
Revenue Recognition
In accordance with ASU Topic 606 - Revenue from Contracts with Customers, the Company recognizes revenue in accordance with that core principle by applying the following steps:
Step 1: Identify the contract(s) with a customer.
Step 2: Identify the performance obligations in the contract.
Step 3: Determine the transaction price.
Step 4: Allocate the transaction price to the performance obligations in the contract.
Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation.
The Company sells its products, which include standard warranties, primarily to consumers. Product sales are recognized at a point in time when the products are shipped to the customer and title is transferred and are recorded net of any discounts or allowances. The warranty does not represent a separate performance obligation.
The Company’s subsidiary, Gincity GmbH, generates sales from the sale of beverages and food products for cash or bank-issued credit and debit card transactions at its bar, which are recognized when a customer receives the beverage or food that they purchased, which is when our obligation to perform is satisfied. The Company’s sales are recognized at the point of purchase, net of discounts and incentives and net of applicable sales taxes.
Shipping and Handling Costs
Shipping and handling costs incurred for products shipped to customers are included in general and administrative expenses. Shipping and handling costs charged to customers are included in sales.
Advertising Costs
The Company may participate in various advertising
programs. All costs related to advertising of the Company’s products are expensed in the period incurred. For the three months ended
March 31, 2025 and 2024, advertising costs charged to operations were $
8
MIAMI BREEZE AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2025
(Unaudited)
Federal and State Income Taxes
The Company accounts for income tax using the liability method prescribed by ASC 740, “Income Taxes”. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in effect in the year in which the differences are expected to reverse. The Company records a valuation allowance to offset deferred tax assets if based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rates is recognized as income or loss in the period that includes the enactment date.
The Company follows the accounting guidance for
uncertainty in income taxes using the provisions of Accounting Standards Codification (ASC) 740 “Income Taxes”. Using
that guidance, tax positions initially need to be recognized in the financial statements when it is more likely than not the position
will be sustained upon examination by the tax authorities. As of March 31, 2025 and December 31, 2024, the Company had
Stock-Based Compensation
Stock-based compensation is accounted for based on the requirements of ASC 718 – “Compensation –Stock Compensation”, which requires recognition in the financial statements of the cost of employee, director, and non-employee services received in exchange for an award of equity instruments over the period the employee, director, or non-employee is required to perform the services in exchange for the award (presumptively, the vesting period). The ASC also requires measurement of the cost of employee, director, and non-employee services received in exchange for an award based on the grant-date fair value of the award. The Company has elected to recognize forfeitures as they occur as permitted under ASU 2016-09 Improvements to Employee Share-Based Payment.
ASC 260 “Earnings Per Share”, requires dual presentation of basic and diluted earnings per common share (“EPS”) with a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. Basic EPS excludes dilutive securities and non-vested forfeitable shares. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common shares were exercised or converted into common shares or resulted in the issuance of common shares that then shared in the earnings of the entity. Basic net loss per common share is computed by dividing net loss available to members by the weighted average number of common shares outstanding during the period. Diluted net loss per common share is computed by dividing net loss by the weighted average number of common shares, common share equivalents and potentially dilutive securities outstanding during each period. On March 31, 2025 and December 31, 2024, the Company did t have any potentially dilutive securities.
Segment Reporting
Following the acquisition of Gin City Group, Inc., the Company operates in two reportable segments which consist of (1) the development and distribution of automotive care products that provide a long-lasting, new car scent, and (2) the operation of an adult beverage establishment named Gin City. The Company has determined that these reportable segments were strategic business units that offered different products. Currently, these reportable segments are being managed separately based on the fundamental differences in their operations.
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires entities to report incremental information about significant segment expenses included in a segment’s profit or loss measure as well as the title and position of the chief operating decision maker (“CODM”). The new standard also requires interim disclosures related to reportable segment profit or loss and assets that had previously only been disclosed annually. The Company adopted ASU 2023-07 effective December 31, 2024 on a retrospective basis. As a result, the Company has enhanced its segment disclosures in this report to include the presentation of depreciation and amortization, interest and joint venture expenses by segment and the disclosure of its CODM. The adoption of this ASU only affects the Company’s disclosures with no impact to its financial condition or results of operations.
Recent Accounting Pronouncements
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which focuses on the rate reconciliation and income taxes paid. ASU No. 2023-09 requires a public business entity (PBE) to disclose, on an annual basis, a tabular rate reconciliation using both percentages and currency amounts, broken out into specified categories with certain reconciling items further broken out by nature and jurisdiction to the extent those items exceed a specified threshold. In addition, all entities are required to disclose income taxes paid, net of refunds received disaggregated by federal, state/local, and foreign and by jurisdiction if the amount is at least 5% of total income tax payments, net of refunds received. This pronouncement is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The adoption of this new guidance had no impact on the consolidated financial statements.
In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40), which requires entities to provide more detailed disaggregation of expenses in the income statement, focusing on the nature of the expenses rather than their function. The new disclosures will require entities to separately present expenses for significant line items, including but not limited to, depreciation, amortization, and employee compensation. Entities will also be required to provide a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively, disclose the total amount of selling expenses and, in annual reporting periods, provide a definition of what constitutes selling expenses. This pronouncement is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. This guidance does not change or remove current expense disclosure requirements and will not have any impact on the Company’s financial statements.
9
MIAMI BREEZE AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2025
(Unaudited)
Other accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows or disclosures.
NOTE 3 – ACQUISITION
On February 28, 2025,
the Company completed the acquisition of
The assets acquired and liabilities assumed were recorded at their estimated fair values on the acquisition date, and were subject to adjustment during the measurement period with subsequent changes recognized in earnings or loss. These estimates were inherently uncertain and were subject to refinement. Management developed estimates based on assumptions as a part of the purchase price allocation process to value the assets acquired and liabilities assumed as of the business acquisition date. As a result, during the purchase price measurement period, which may be up to one year from the business acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed based on completion of valuations, with the corresponding offset to goodwill. Based upon the preliminary purchase price allocation, the following table summarizes the estimated fair value of the assets acquired and liabilities assumed at the date of the acquisition:
| Purchase consideration paid: | ||||
| 14,030,050 common shares issued | $ | |||
| Net assets acquired | ||||
| Increase in goodwill | $ |
NOTE 4 – ACCOUNTS RECEIVABLE
On March 31, 2025 and December 31, 2024, accounts receivable, net consisted of the following:
| March 31, 2025 | December 31, 2024 | |||||||
| Accounts receivable | $ | $ | ||||||
| Allowance for credit losses | ||||||||
| Accounts receivable, net | $ | $ | ||||||
10
MIAMI BREEZE AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2025
(Unaudited)
During the three months ended March 31, 2025 and 2024, the Company did not record any credit losses.
NOTE 5 – SHAREHOLDERS’ EQUITY
Preferred Stock
The Company is authorized to issue shares of its $ par value preferred stock. The Company’s board of directors will have the authority to fix and determine the relative rights and preferences of preferred shares, as well as the authority to issue such shares, without further stockholder approval. As of March 31, 2025 and December 31, 2024, shares have been designated as Series A preferred stock and Series A preferred shares were issued and outstanding.
Series A Preferred stock
The Certificate of Designations, Preferences, Rights, and Limitations of Series A Preferred Stock (“Certificate of Designations”) provides that the Series A Preferred Stock shall be entitled to vote with the shares of the Company’s common stock at any annual or special meetings of the stockholders of the Company. Together, collectively in their entirety, all holders of Series A preferred stock shall have voting rights equal to exactly 65% of all voting rights available at the time of any vote, including Series A preferred stock. The holders of Series A Preferred Stock, through the ownership of Series A Preferred Stock, have the power to act on behalf of the Company, to call a special meeting of the shareholders, to remove and/or replace the Board of Directors or management or any individual members thereof in the event that one or more of the foregoing has done, or failed to do, anything which in his sole judgment, will materially and adversely impact the business of the Company in any manner whatsoever, including but not limited to, any violations of state or federal securities laws, or any action which could cause bankruptcy, dissolution, or other termination of the Company. In no event will the ombudsman have the right or power to participate in the normal and any usual daily operations of the Company. The Series A preferred shares have no stated or face value.
Upon any liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary (a “Liquidation”), the holders shall be entitled to receive out of the assets of the Company whether such asset or capital are surplus, for each of Preferred Stock an amount equal to the Holder’s pro rata share of the assets and funds of the Company to be distributed.
The Series A Preferred shall have no conversion rights and no divided shall be declared or paid to the Series A Preferred Stock.
Common Stock
Sale of Common Stock for Cash
On March 13, 2024, the Company entered into a
private placement subscription agreement (the “Subscription Agreement”) with an investor (the “Investor”). In
connection with the Subscription Agreement, the Company issued shares of its common stock to the Investor for cash proceeds of
$
As of December 31, 2024, the aggregate of
shares of its common stock were yet to be issued and were issued once the Company has obtained its trading symbol. Accordingly, as
of December 31, 2024, the Company included $
Issuance of Common Stock for Services
On January 4, 2024, the Company amended its agreement
with Rafael Scotoni (the “Consultant”) dated April 1, 2022, whereby the Consultant agreed to serve as the non-exclusive Head
of Business of the Company. The Consultant shall provide advice, consultation, referrals, information, and services to the Company as
requested regarding business development. These services encompassed researching, introducing, and negotiating with new manufacturers
for hanging air fresheners, as well as developing a comprehensive master distributor business plan tailored for Austria and Switzerland.
The amended agreement extended the term to March 31, 2026. The Consultant shall be compensated with common stock based on attainment of
milestones. At each quarter end, the Company’s management shall assess the result of Consultant’s efforts based on the number
of strategic partners and customers brought to the Company by Consultant. The Company shall award the aggregate sum of 250,000 shares
of common stock of the Company to the Consultant over the term of the amended agreement. In connection with this agreement, the Company
issued shares of its common stock to the Consultant for services rendered during the three months ended March 31, 2024. These shares were
valued at $
11
MIAMI BREEZE AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2025
(Unaudited)
On June 12, 2024 and as amended on August 19,
2024, the Company entered to an agreement with Stefan Lumpp (the “Consultant”), whereby the Consultant agreed to serve as
the non-exclusive Head of Business Development of the Company. The Consultant shall provide advice, consultation, referrals, information,
and services to the Company as requested regarding product sales development including, introduction to potential strategic partners,
conducting assessment and creation of alliances and customers. The term of the agreement shall end on May 30, 2026. The Consultant shall
be compensated with common stock based on attainment of milestones. At each quarter end, the Company’s management shall assess the
result of Consultant’s efforts based on the number of strategic partners and customers brought to the Company by Consultant. In
connection with this agreement, during the year ended December 31, 2024. the Company agreed to issue an aggregate of 30,000 shares of
its common stock to the Consultant for services rendered during the year ended December 31, 2024. These shares were valued at $,
or $ per common share, based on contemporaneous common share sales by the Company and accordingly, during the year ended December
31, 2024, the Company recorded stock-based professional fees of $. As of December 31, 2024, the aggregate of
Return of Common Stock to Treasury Stock
On October 24, 2024, the Company entered into an agreement with the Firaz Ruecker and Lance Ruecker (together, the “Related Party Shareholders”) to return shares to the Company as part of the Company’s treasury stock without any compensation or exchange. As of March 31, 2025 and December 31, 2024, the common shares were not cancelled and are reflected as treasury stock on the accompanying consolidated balance sheets.
NOTE 6 – CONCENTRATIONS
Concentrations Of Credit Risk
Financial instruments that potentially subject
the Company to concentrations of credit risk consist primarily of cash deposits. The Company places its cash in banks or financial institutions
in the United Stated, and in Europe (not insured by the Federal Deposit Insurance Company (FDIC)). On March 31, 2025 and December 31,
2024, the Company had
Sales Concentration
During the three months ended March 31, 2025 and 2024, substantially all of the Company’s sales were generated in Europe. No customer accounted for 10% of sales.
NOTE 7 – RELATED PARTY TRANSACTIONS
Professional Fees – Related Parties
On March 1, 2022, the Company entered into a ten-month
business operations agreement with GH Bill, a company owned by the former CEO of Miami Breeze for administration and back-office services.
In connection with this agreement, the Company paid a monthly service fee of $4,000 to GH Bill for administration and back-office services.
Beginning in June 2022, this monthly service fee was increased to $8,500 per month. In January 2023, this monthly service fee was increased
to $14,500 per month, and in August 2023, this monthly service fee was increased to $18,500 per month. In addition, during the three months
ended March 31, 2024, the Company paid additional service fees to GH Bill of $6,500. In connection with this consulting agreement, for
the three months ended March 31, 2025 and 2024, the Company recorded professional fees – related party of $
During the three months ended March 31, 2025,
the Company paid a consulting fee to the former owner of Gin City Group. Inc., who is a beneficial shareholder of $1,082. In connection
with this consulting agreement, for the three months ended March 31, 2025, the Company recorded professional fees – related parties
of $
Return of Common Stock to Treasury Stock
On October 24, 2024, the Company entered into an agreement with the Related Party Shareholders to return shares to the Company as part of the Company’s treasury stock without any compensation or exchange. As of March 31, 2025 and December 31, 2024, the common shares were not cancelled and are reflected as treasury stock on the accompanying consolidated balance sheets.
NOTE 8 – OPERATING LEASE RIGHT-OF-USE (“ROU”) ASSETS AND OPERATING LEASE LIABILITY
On February 28, 2025, as a result of the acquisition
of Gincity GmbH, the Company assumed a non-cancelable operating leases for the lease of the Gin City establishment. The lease term expires
on
12
MIAMI BREEZE AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2025
(Unaudited)
Upon acquisition, the Company analyzed the
leases and determined it is required to record a lease liability and a right of use asset on its consolidated balance sheet, at fair
value. Accordingly, on February 28, 2025, the Company recognized a right of use assets and lease liabilities by $
For the three months ended March 31, 2025, in connection with its operating
lease, the Company recorded rent expense of approximately $
The significant assumption used to determine
the present value of the lease liability during the three months ended March 31, 2025 was a discount rate of
On March 31, 2025 and December 31, 2024, operating ROU Asset is summarized as follows:
| March 31, 2025 | December 31, 2024 | |||||||
| Operating lease right of use asset, net | $ | $ | ||||||
| Balance of ROU assets | $ | $ | ||||||
On March 31, 2025, future minimum base lease payments due under a non-cancelable operating lease are as follows:
| Year ending March 31, | Amount | |||
| 2026 | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| Thereafter | ||||
| Total minimum non-cancelable operating lease payments | ||||
| Less: discount to fair value | ( | ) | ||
| Total lease liability on March 31, 2025 | $ | |||
NOTE 9 – SEGMENT REPORTING
The Company operates in two operating and reportable segments which consist of (1) the development and distribution of automotive care products that provide a long-lasting, new car scent, and (2) the operation of an adult beverage establishment named Gin City. The Company has determined that these reportable segments were strategic business units that offer different products. Currently, these reportable segments are being managed separately based on the fundamental differences in their operations.
The Company’s chief operating decision maker (“CODM”) is its Chief Executive Officer. The decisions concerning the allocation of the Company’s resources are made by the CODM. The CODM evaluates the performance of each segment and makes decisions concerning the allocation of resources based upon segment operating profit (loss), generally defined as income or loss before interest expense and income taxes. The CODM assesses segment performance by using each segments’ operating income (loss) and considers budget-to-actual variances on a periodic basis (at least quarterly) when making decisions about operational planning, including whether to invest resources into the segments or into other parts of the Company. Segment assets are reviewed by the Company’s CODM and are disclosed below. The accounting policies of the Car Care and Gin City segments are the same as those described in Note 2 of the Notes to Consolidated Financial Statements.
Three Months Ended March 31, 2025
| Car Care | Gin City | Consolidated | ||||||||||
| Net sales | $ | $ | $ | |||||||||
| Cost of sales | ||||||||||||
| Gross profit | ||||||||||||
| Operating expenses (excluding depreciation) | ||||||||||||
| Depreciation | ||||||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ||||||
| Interest income (expense) | ( | ) | ( | ) | ||||||||
| Foreign currency transaction gain | ||||||||||||
| Loss before provision for income taxes | ( | ) | ( | ) | ( | ) | ||||||
| Provision for income taxes | ||||||||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
13
MIAMI BREEZE AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2025
(Unaudited)
Three Months Ended March 31, 2024
| Car Care | Gin City | Consolidated | ||||||||||
| Net sales | $ | $ | $ | |||||||||
| Cost of sales | ||||||||||||
| Gross profit | ||||||||||||
| Operating expenses (excluding depreciation) | ||||||||||||
| Depreciation | ||||||||||||
| Loss from operations | ( | ) | ( | ) | ||||||||
| Foreign currency transaction loss | ( | ) | ( | ) | ||||||||
| Loss before provision for income taxes | ( | ) | ( | ) | ||||||||
| Provision for income taxes | ||||||||||||
| Net loss | $ | ( | ) | $ | $ | ( | ) | |||||
| March 31, 2025 | December 31, 2024 | |||||||
| Total assets by segment on March 31, 2025 and December 31, 2024 were as follows: | ||||||||
| Car Care | $ | $ | ||||||
| Gin City | ||||||||
| $ | $ | |||||||
| March 31, 2025 | December 31, 2024 | |||||||
| Total assets by geographic location on March 31, 2025 and December 31, 2024 were as follows: | ||||||||
| USA | $ | $ | ||||||
| Germany | ||||||||
| $ | $ | |||||||
NOTE 10 – SUBSEQUENT EVENTS
During the three months ended June 30, 2025, the
Company entered into private placement subscription agreements with investors. In connection with these subscription agreements, the Company
shall issue shares of its common stock to the investors for cash proceeds of $
During the three months ended June 30, 2025, the
Company entered into a Retail Store Construction Agreement with a contractor. In connection with this agreements, the Company issue
shares of its common stock to the contractor for construction services in connection with the buildout of a new location valued at $
14
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and the related notes and other financial information included in this Report. Some of the information contained in this discussion and analysis or set forth elsewhere in this Report, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties as described under the heading “Cautionary Note Regarding Our Forward-Looking Statements” elsewhere in this Report. You should review the disclosure under the heading “Risk Factors” in this Report for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.
Overview
We were incorporated on February 25, 2021 in the State of Florida. We are a developer and distributor of automotive care products that provide a long-lasting, new car scent. We have collaborated with chemical engineers and mixers/perfumers resulting in what we believe delivers the perfect sensory experience for a luxury car.
We have developed a unique formula that helps simulate a new car smell. Our car cleaning spray and leather conditioner will have a car's interior smelling brand new. The interior cleaner ensures that the car looks and feels fresh and clean. Formulated to thoroughly clean and protect all hard interior surfaces, our cleaner lifts dust and grime and leaves a shield of protection from fading, cracking and harmful UV rays. Perfect for dashboards, interior panels and plastic, rubber or vinyl trim, the immaculate matt finish is complemented by the long-lasting Miami Breeze luxury new car scent.
On January 30, 2025, we formed a wholly-owned subsidiary, Gin City Management GmbH, a limited liability company incorporated under the laws of Munich, Germany (“Gin City Management”). The purpose of Gin City Management is the development, production, distribution and marketing of beverages of all kinds, both alcoholic and non-alcoholic, as well as acquisition, management, operation and sale of catering businesses.
On February 28, 2025, we completed the acquisition of 100% ownership of Gin City Group, Inc, a Florida corporation and its wholly- owned subsidiary, Gincity GmbH, a German-based corporation (“Gincity GmbH”). The transaction was completed by and between the Company and the shareholders of Gin City Group, Inc., represented by a holder of the Series A Super Voting Preferred Stock of Gin City Group, Inc., Harald Gietmann, who has a material relationship with the Company, via his appointment as a director and officer of the Company, and through his acquisition of 100% of the Series A Preferred Stock of the Company as described below. The nature and amount of consideration given or received for the assets was exactly one (1) share of the Company’s common stock, par value $0.0001 per share, for each one (1) share of Gin City Group, Inc. held as of the record date of February 19, 2025, for a total of exactly 14,030,050 shares of the Company’s common stock issued to those shareholders of Gin City Group, Inc., except GH Bill, Inc. and Harald Gietmann who have an interest in both the Company and Gin City Group Inc. These parties agreed to forfeit their shares of the newly issued common stock of the Company pursuant to the acquisition agreement
The following discussion highlights our results of operations and the principal factors that have affected our financial condition as well as our liquidity and capital resources for the periods described and provides information that management believes is relevant for an assessment and understanding of the statements of financial condition and results of operations presented herein. The following discussion and analysis are based on our financial statements contained in this Report, which have been prepared in accordance with United States generally accepted accounting principles (“GAAP”). You should read the discussion and analysis together with such financial statements and the related notes thereto.
12-Month Outlook and Roll Out of Production
During the next 12 months, we intend to grow production and sales through placement of sponsored ads on Amazon.com, Facebook and other digital media platforms to create product awareness to drive customers to our product. As of March 31, 2025, we have approximately $307,000 in cash and have estimated $870,000 for projected expenses on SEC reporting, legal, accounting and compliance, working capital/overhead and marketing and advertising for the next 12-months. The following provides an overview of our estimated expenses to fund our plan of operation over the next twelve months.
| ESTIMATED EXPENSES FOR THE NEXT TWELVE MONTHS | ||||
| SEC reporting, legal, accounting, audit and compliance | $ | 120,000 | ||
| Working capital/overhead | 250,000 | |||
| Marketing and advertising | 500,000 | |||
| Total | $ | 870,000 | ||
Our cash resources as of March 31, 2025 will not be sufficient for us to execute our business plan. If we do not generate sufficient cash from our intended financing activities and sales, or if our planned digital campaigns were to fail, we will be unable to execute on projected operations for the next 12 months. In that event, we will be forced to cut down on our planned marketing and advertising campaigns, which will negatively affect our business, results of operations and financial condition. While we intend to engage in several equity or debt financings, there is no assurance that these will occur, nor can we assure our shareholders that we will not be required to obtain additional financing on terms that are not dilutive of their interests.
15
Going Concern
Our auditors have issued a “going concern” opinion, meaning that there is substantial doubt if we can continue as an on-going business for the next twelve months unless we obtain additional capital. Our financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in the accompanying consolidated financial statements, we had a net loss of $176,487 and $127,417 for the three months ended March 31, 2025 and 2024, respectively. The net cash used in operations was $273,859 and $81,969 for the three months ended March 31, 2025 and 2024, respectively. The Company has an accumulated deficit of $4,035,636 and $3,859,149 on March 31, 2025 and December 31, 2024, respectively. These factors raise substantial doubt about our ability to continue as a going concern for a period of twelve months from the issuance date of this report. Management cannot provide assurance that we will ultimately achieve profitable operations or become cash flow positive or raise additional debt and/or equity capital. We are seeking to raise capital through additional debt and/or equity financing to fund our operations in the future. Although we have historically raised capital from sales of common shares, there is no assurance that we will be able to continue to do so. If we are unable to raise additional capital or secure additional lending in the near future, management expects we will need to curtail its operations. Our financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
Basis of Presentation
The financial statements contained herein have been prepared in accordance with accounting principles generally accepted in the United States of America (the “U.S. GAAP”) and the requirements of the Securities and Exchange Commission.
Critical Accounting Estimates
This management’s discussion and analysis of financial condition and results of operations is based on our financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenue and expenses during the reported period. In accordance with U.S. GAAP, we base our estimates on historical experience and on various other assumptions we believe to be reasonable under the circumstances. Actual results may differ from these estimates if conditions differ from our assumptions. While our significant accounting policies and significant estimates are more fully described in Note 2 in the “Notes to Financial Statements”, we believe the following estimates are critical to the process of making significant judgments and estimates in preparation of our consolidated financial statements.
Business Acquisition
The Company accounted for its business acquisition using the acquisition method of accounting where the assets acquired and liabilities assumed are recognized based on their respective estimated fair values. The excess of the purchase price over the estimated fair values of the net assets acquired was recorded as goodwill. Determining the fair value of certain acquired assets and liabilities was subjective in nature and often involves the use of significant estimates and assumptions, including, but not limited to, the selection of appropriate valuation methodology, projected revenue, expenses, and cash flows, weighted average cost of capital, discount rates, and estimates of terminal values. The business acquisition was included in the Company’s consolidated financial statements as of the date of the acquisition. (See Note 3 of the Company’s unaudited consolidated financial statements).
Recently Issued Accounting Pronouncements
Refer to the notes to the unaudited consolidated financial statements.
Results of Operations
Sales
During the three months ended March 31, 2025 and 2024, we generated revenues of $79,270 and $1,703, respectively, an increase of $77,567, or 4555%. The increase in sales was attributable to the acquisition of Gin City Group, Inc and Gincity GmbH on February 28, 2025.
Cost of Sales
During the three months ended March 31, 2025 and 2024, cost of sales amounted to $15,179 and $959, respectively, an increase of $14,220, or 1483%. The increase was attributable to the acquisition of Gin City Group, Inc and Gincity GmbH on February 28, 2025.
Gross Profit
During the three months ended March 31, 2025 and 2024, gross profit amounted to $64,091 and $744, respectively, an increase of $63,347, or 8514%. The increase was attributable to the acquisition of Gin City Group, Inc and Gincity GmbH on February 28, 2025.
16
Operating expenses
For the three months ended March 31, 2025, operating expenses amounted to $250,449 as compared to $127,493 for the three months ended March 31 2024, an increase of $122,956, or 96.4%. For the three months ended March 31 2025 and 2024, operating expenses consisted of the following:
| Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Advertising and promotion | $ | - | $ | 2,313 | ||||
| Professional fees | 115,639 | 55,625 | ||||||
| Professional fees - related party | 56,582 | 62,000 | ||||||
| General and administrative expenses | 78,228 | 7,555 | ||||||
| Total Operating Expenses | $ | 250,449 | $ | 127,493 | ||||
Advertising and promotion
During the three months ended March 31, 2025 and 2024, advertising and promotion expenses amounted to $0 and $2,313, respectively, a decrease of $2,313, or 100.0%. The decrease was primarily attributable to a decrease in social media ads on Facebook and advertising campaigns in Europe to promote our car care products related to cost cutting measures.
Professional fees
During the three months ended March 31, 2025 and 2024, we reported professional fees of $115,639 and $55,625, respectively, an increase of $60,014, or 107.9%. The increase was primarily attributable to an increase in professional fees related to the acquisition of Gin City Group, Inc. consulting fees of approximately $93,000 and an increase in accounting fees of approximately $7,300, offset by a decrease in stock-based professional fees of $40,000.
Professional fees – related parties
During the three months ended March 31, 2025 and 2024, we incurred $56,582 and $62,000 in professional fees – related parties, a decrease of $5,418, or 8.7%. This decrease was attributable to a decrease in fees paid to GH Bill of $6,500, pursuant to a business operations agreement with GH Bill. In connection with this agreement, we paid a monthly service fee of $18,500 to GH Bill for administration and back-office services. In addition, during the three months ended March 31, 2024, we paid additional service fees of $6,500. This decrease was offset by an increase in professional fees – related party of $1,082 incurred by Gin City Group, Inc.
General and administrative expenses
During the three months ended March 31, 2025 and 2024, general and administrative expenses amounted to $78,228 and $7,555, an increase of $70,673, or 935.4%. This increase was primarily attributable to the acquisition of Gin City Group and Gincity GmbH on February 28, 2025.
Loss from Operations
During the three months ended March 31, 2025, loss from operation amounted to $186,358 as compared to $126,749 during the three months ended March 31, 2024, an increase of $59,609, or 47.0%. The increase was primarily a result of the acquisition of Gin City Group and Gincity GmbH on February 28, 2025 of approximately $107,000, offset by a decrease in loss from operations of approximately $47,000 due to Car Care cost-cutting measures as discussed above.
Other Income (Expenses)
Other income (expenses) consisted of foreign currency transaction gain (loss) and interest expense. During the three months ended March 31, 2025 and 2024, we reported other income (expenses) of $9,871 and $(668), respectively, a change of $10,539, or 1,578%, primarily related to a net increase foreign currency gain, net of $11,819, offset by an increase in interest expense of $1,280.
Net Loss
Due to the foregoing reasons, during the three months ended March 31, 2025 and 2024, our net loss was $176,487, or $(0.01) per common share (basic and diluted) and $127,417, or ($0.00) per common share (basic and diluted), respectively, an increase of $49,070, or 38.5%.
Liquidity and Capital Resources
Liquidity is the ability of an enterprise to generate adequate amounts of cash to meet its needs for cash requirements. We had a working capital deficit of $189,222 and $306,710 in cash as of March 31, 2025, and a working capital deficit of $136,026 and $3,743 in cash as of December 31, 2024, respectively.
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| March 31, 2025 | December 31, 2024 | Working Capital Change | Percentage Change | |||||||||||||
| Working capital: | ||||||||||||||||
| Total current assets | $ | 586,516 | $ | 12,874 | $ | 573,642 | 4,455.8 | % | ||||||||
| Total current liabilities | (775,738 | ) | (148,900 | ) | (626,838 | ) | 421.0 | % | ||||||||
| Working capital deficit | $ | (189,222 | ) | $ | (136,026 | ) | $ | (53,196 | ) | (39.1 | )% | |||||
Our primary uses of cash have been for compensation and related expenses, fees paid to third parties and related parties for professional services, advertising and promotion expenses, and general and administrative expenses. All funds received have been expended in the furtherance of growing the business. We received funds from the sale of our common stock. The following trends are reasonably likely to result in changes in our liquidity over the near to long term:
| ● | An increase in working capital requirements to finance our current business; | |
| ● | Product development fees; | |
| ● | Addition of administrative and sales personnel as the business grows; | |
| ● | The cost of being a public company; | |
| ● | Marketing expense for building brand; | |
| ● | Capital requirements for production capacity; and | |
| ● | Capital to seek other business opportunities. |
Cash Flow Activities for the Three months ended March 31, 2025 and 2024
The following table shows a summary of our cash flows for the three months ended March 31, 2025 and 2024.
| Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Net cash used in operating activities | $ | (273,859 | ) | $ | (81,969 | ) | ||
| Net cash provided by investing activities | 435,318 | - | ||||||
| Net cash provided by financing activities | 136,497 | 66,000 | ||||||
| Net increase (decrease) in cash | 297,956 | (15,969 | ) | |||||
| Effect of exchange rate changes on cash | 5,011 | - | ||||||
| Cash - beginning of the period | 3,743 | 74,889 | ||||||
| Cash - end of the period | $ | 306,710 | $ | 58,920 | ||||
Cash Flows from Operating Activities
Net cash used in operating activities totaled $273,859 and $81,969 for the three months ended March 31, 2025, and 2024, respectively, an increase of $191,890.
Net cash used in operating activities for the three months ended March 31, 2025 primarily reflected a net loss of $176,487, adjusted for the add-back (reduction) of non-cash items consisting of depreciation $1,476, and changes in operating assets and liabilities, primarily consisting of an increase in inventory of $8,196, an increase in prepaid expenses and other current assets of $57,520, a decrease in accounts payable and accrued expenses of $38,849., and an increase in contract liabilities of $2,275.
Net cash used in operating activities for the three months ended March 31, 2024 primarily reflected a net loss of $127,417 adjusted for the add-back (reduction) of non-cash items consisting of stock-based professional fees of $40,000, offset by changes in operating assets and liabilities primarily consisting of a decrease in inventory of $157, an increase in prepaid expenses and other current assets of $2,809, a decrease in prepaid expenses – related party of $3,000, and an increase in accounts payable of $5,100.
Cash Flows from Investing Activities
For the three months ended March 31, 2025, net cash provided by investing activities consisted of $441,332 of cash acquired in acquisition offset by cash used for the purchase of property and equipment of $6,014.
For the three months ended March 31, 2024, there was no net cash used in or provided by investing activities.
Cash Flows from Financing Activities
Net cash provided by financing activities for the three months ended March 31, 2025 was $136,497. This primarily consists of proceeds from related party advances of $136,497.
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Net cash provided by financing activities for the three months ended March 31, 2024 was $66,000. This primarily consists of proceeds from the sale of common stock of $76,000, offset by payment of deferred offering cost of $10,000
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
ITEM 4. CONTROLS AND PROCEDURES
Disclosure controls and procedures
We maintain “disclosure controls and procedures,” as that term is defined in Rule 13a-15(e) and 15d-15(e), promulgated by the SEC pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed in our company’s reports filed under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure. Our management, with the participation of our principal executive officer and principal financial officer, evaluated our company’s disclosure controls and procedures as of the end of the period covered by this quarterly report on Form 10-Q. Based on this evaluation, our principal executive officer and principal financial officer concluded that as of March 31, 2025, our disclosure controls and procedures were not effective. The ineffectiveness of our disclosure controls and procedures was due to material weaknesses, which we identified in our report on internal control over financial reporting.
Internal control over financial reporting
Management’s quarterly report on internal control over financial reporting
Our management, including our principal executive officer and principal financial officer, are responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Our management, with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of our internal control over financial reporting as of March 31, 2025. Our management’s evaluation of our internal control over financial reporting was based on the 2013 framework in Internal Control-Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, our management concluded that as of March 31, 2025, our internal control over financial reporting was not effective.
The ineffectiveness of our disclosure controls and procedures was due to the following material weaknesses in our internal control over financial reporting:
(1) We do not have sufficient and skilled accounting personnel with an appropriate level of technical accounting knowledge and experience in the application of accounting principles generally accepted in the United States commensurate with our financial reporting requirements. To mitigate the current limited resources and limited employees, we rely heavily on the use of external legal and accounting professionals.
(2) a lack of adequate segregation of duties as a result of our limited financial resources to support hiring of personnel.
Until such time as we expand our staff to include additional accounting and executive personnel, it is likely we will continue to report material weaknesses in our internal control over financial reporting.
A material weakness is a deficiency or a combination of control deficiencies in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.
Limitations on Effectiveness of Controls
Internal control over financial reporting cannot provide absolute assurance of achieving financial reporting objectives because of its inherent limitations. Internal control over financial reporting is a process that involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures. Internal control over financial reporting can also be circumvented by collusion or improper management override. Because of such limitations, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.
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Changes in internal control over financial reporting
There were no changes in our internal control over financial reporting during the first quarter of our fiscal year ended December 31, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm business.
We are not involved in any pending or threatened legal proceedings that it believes could reasonably be expected to have a material adverse effect on its financial condition, results of operations, or cash flows.
ITEM 1A. RISK FACTORS
Risk factors that affect our business and financial results are discussed in Part I, Item 1A “Risk Factors,” in our Annual Report on Form 10-K for the year ended December 31, 2024 as filed with the SEC on March 31, 2025 (“Annual Report”). There have been no material changes in our risk factors from those previously disclosed in our Annual Report. You should carefully consider the risks described in our Annual Report, which could materially affect our business, financial condition or future results. The risks described in our Annual Report are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition, and/or operating results. If any of the risks actually occur, our business, financial condition, and/or results of operations could be negatively affected.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
On January 1, 2025, we issued 73,250 shares of our common stock in connection with a subscription payable of $66,600 as of December 31, 2024.
On February 28, 2025, in connection with the acquisition of Gin City Group, Inc. and its subsidiary Gincity GmbH, we issued 14,030,050 shares of our common stock, par value $0.0001 per share, for an aggregate purchase price of $522,525.
Our shares were offered and sold in reliance on the exemption from registration under the Securities Act of 1933, as amended (the “Securities Act”) provided by Section 4(a)(2) and Regulation D (Rule 506) under the Securities Act.”
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
ITEM 6. EXHIBITS
The following exhibits are filed herewith or are incorporated by reference to exhibits previously filed with the SEC.
| Exhibit Number | Description of Exhibit | |
| 10.1* | Share Exchange Agreement between Miami Breeze Car Care, Inc. and Gin City Group, Inc. dated February 28, 2025). | |
| 31.1* | Certification of Chief Executive Officer pursuant to Rule 13(a)-14(a) under the Securities Exchange Act of 1934, as amended. | |
| 31.2* | Certification of Chief Financial Officer pursuant to Rule 13(a)-14(a) under the Securities Exchange Act of 1934, as amended. | |
| 32.1** | Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
| 101.INS* | INLINE XBRL INSTANCE DOCUMENT | |
| 101.SCH* | INLINE XBRL TAXONOMY EXTENSION SCHEMA DOCUMENT | |
| 101.CAL* | INLINE XBRL TAXONOMY EXTENSION CALCULATION LINKBASE DOCUMENT | |
| 101.DEF* | INLINE XBRL TAXONOMY EXTENSION DEFINITION LINKBASE DOCUMENT | |
| 101.LAB* | INLINE XBRL TAXONOMY EXTENSION LABEL LINKBASE DOCUMENT | |
| 101.PRE* | INLINE XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE DOCUMENT | |
| 104 * | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
| * | Filed herewith |
| ** | Furnished herewith |
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| MIAMI BREEZE CAR CARE INC. | ||
| Chairman of the Board | ||
| Date: August 14, 2025 | By: | /s/ Harald Dieter Gietmann |
| Harald Dieter Gietmann | ||
| Chief Executive Officer, and Chief Financial Officer | ||
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