Z Squared Inc. Releases 2025 Audited Financial Statements: Key Developments and Investor Considerations
Summary of Key Points
- No Revenues or Operating Activities to Date: Z Squared Inc. (“the Company”) has not yet commenced principal operations or generated any revenues as of December 31, 2025.
- Change of Name and Strategic Focus: The Company, formerly Preferred Asset Holdings, Inc., changed its name to Z Squared Inc. in April 2025 and is currently focused on entering the cryptocurrency mining industry.
- Pending Major Transactions: The Company has entered into two significant agreements:
- Asset-for-Share Exchange Agreement with BSG Series CM LLC to acquire ~9,000 cryptocurrency mining machines in exchange for 40,446,956 common shares (pending several closing conditions).
- Merger Agreement with Coeptis Therapeutics Holdings, Inc. and its subsidiary CP Merger Sub Inc. Upon closing, Z Squared will become a wholly-owned subsidiary and the operating entity for the combined cryptocurrency mining business.
- Going Concern Warning: The Company’s auditor has raised substantial doubt about its ability to continue as a going concern due to negative cash flows, accumulated deficits, and the absence of revenues.
- Minimal Assets and Liabilities: As of December 31, 2025, Z Squared had only \$1,402 in cash and \$120 in liabilities, with no shares issued or outstanding.
- Significant Share Issuance Pending: The 40.4 million shares to be issued for the mining machines represent a transformational dilution and will effectively establish BSG Series CM LLC as a controlling shareholder.
- Regulatory and Litigation Overhang: The asset transfer is contingent upon compliance with a court order in an SEC litigation matter and is subject to strict resale restrictions and monitoring.
- Future Capital Needs: The Company acknowledges that current resources are insufficient to fund operations for the next 12 months, and additional financing will be required, likely resulting in further dilution or restrictive debt covenants.
In-Depth Details for Investors
Financial Position and Results
Z Squared’s audited balance sheet as of December 31, 2025, reveals almost no operating activity. The Company reported \$1,402 in cash and cash equivalents, all contributed by the CEO, and total liabilities of \$120 (an advance from an affiliate). There are no shares issued or outstanding, and total stockholders’ equity stands at \$1,282, primarily from additional paid-in capital. The Company incurred a net loss of \$323 for 2025 (compared to a \$60 loss in 2024), all related to general and administrative expenses. There are no revenues, no cost of revenues, and no tangible assets aside from the aforementioned cash.
The statement of cash flows shows that the Company’s negative operating cash flow was offset by a \$1,500 capital contribution from the CEO, and \$225 of expenses paid on behalf of the Company were similarly treated as additional paid-in capital. There are no investing activities or income tax liabilities.
Going Concern Risks
The independent auditor has issued a “going concern” warning, citing negative cash flows, recurring losses, and an accumulated deficit of \$443 as of year-end 2025. Management acknowledges that current cash is insufficient for projected needs and that the Company will require significant additional capital to commence operations and generate revenues. The inability to raise capital on favorable terms—or at all—could have a significant negative impact on the business and share value.
Pending Asset-for-Share Exchange: Major Dilution and Strategic Shift
Z Squared has signed an Asset-for-Share Exchange Agreement with BSG Series CM LLC, under which it will acquire approximately 9,000 cryptocurrency mining machines in exchange for 40,446,956 shares of common stock (subject to closing of the Merger and compliance with an SEC court order). This transaction is transformative and will create a controlling shareholder. The transaction is not yet closed; as of the report date, no assets or shares have been exchanged.
- Resale Restrictions: The shares issued in this deal are subject to a lock-up (no sales unless the 10-day VWAP exceeds \$16/share), leak-out provisions (no more than 1/18th of holdings may be sold per month over 18 months, subject to daily volume caps), and suspension if the stock trades above/below \$35/share for two consecutive days.
- Valuation and Related Party Issues: The value of the mining machines to be acquired will be based on BSG Series CM’s historical carrying value as a related party transaction, not fair market value. The company will comply with ASC 850 and ASC 805 accounting standards for related party and common control transactions.
- Litigation Overhang: The asset transfer is subject to compliance with a federal court order in an ongoing SEC litigation (SEC v. David Feingold, et al.). A court-appointed monitor must approve all material business decisions related to the transaction, adding significant uncertainty and potential delay.
Merger Agreement with Coeptis Therapeutics Holdings
On the same date as the asset deal, Z Squared entered into a Merger Agreement with Coeptis Therapeutics Holdings, Inc. and its subsidiary. Upon closing, Z Squared will become a wholly-owned subsidiary and the main operating entity for the cryptocurrency mining business of the combined company. The merger is subject to several closing conditions, including regulatory approvals, effectiveness of an SEC registration statement, asset delivery under the Asset-for-Share Agreement, and compliance with the aforementioned SEC litigation order.
The Merger Agreement has been amended three times (most recently on June 20, 2025) to address regulatory requirements and timelines, but the core structure and consideration remain unchanged.
Shareholder Considerations and Price-Sensitive Information
- Potential for Massive Dilution: The planned issuance of 40.4 million shares (with zero currently outstanding) will be highly dilutive, fundamentally altering the capital structure and potentially impacting share value upon completion.
- Strategic Transformation and Execution Risk: The success of the Company’s new focus on cryptocurrency mining is highly dependent on the completion of both the asset acquisition and the merger, both of which are subject to significant closing risks and legal uncertainties.
- Regulatory and Legal Risks: The asset transfer is contingent upon compliance with a federal court order and ongoing SEC litigation, which may impact the deal’s timing or execution. Potential investors should be aware of the heightened legal and regulatory risk environment.
- Going Concern Uncertainty: The auditor’s going concern warning is a material risk factor, as the Company currently lacks sufficient resources to fund operations for the next year and will require additional capital, likely on dilutive or restrictive terms.
- No Near-Term Revenue or Operations: As of year-end, the Company has no commercial operations, revenues, or deployed mining equipment. All forward-looking value is contingent on successful execution of the pending transactions.
Conclusion
Z Squared Inc. is at a pivotal juncture, with its future entirely dependent on the successful completion of two major, interdependent transactions: the acquisition of cryptocurrency mining equipment from a related party and a merger with Coeptis Therapeutics Holdings. Both deals are subject to stringent closing conditions, regulatory approvals, and ongoing SEC litigation oversight. Investors should be acutely aware of the substantial dilution, execution risk, and going concern uncertainty that currently define the Company’s outlook. The outcome of these transactions will be critical in determining Z Squared’s future value and viability as a public company.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should consult their own financial advisors and carefully review all publicly available information, including SEC filings, before making any investment decisions. The Company is subject to significant risks and uncertainties, including but not limited to those described above.
