Adapti, Inc. (ADTI, BRZLD)
Company Overview: - Adapti, Inc. (formerly Scepter Holdings) operates in two main areas: (1) Dermacia, a small‐scale e-commerce cosmetics line, and (2) Adapti, an AI‐driven influencer‐marketing platform designed to match brands with social‐media influencers for optimized ROI. - Management has i...
Adapti, Inc. (fka Scepter Holdings) 10-K Deep Dive: AI Promise Meets Financial Strain
In the ever-evolving intersection of AI, social media, and direct-to-consumer brands, Adapti, Inc. (formerly Scepter Holdings) is making a bold pivot. It has spent over half a million dollars developing an AI-powered influencer-marketing platform—"Adapti"—and continues to manage a small in-house cosmetics line, Dermacia. On paper, Adapti’s vision of using data to perfect brand–influencer pairings sounds compelling. Yet, beneath the surface, a stark combination of minimal revenue, hefty operating losses, and a fragile balance sheet raises serious questions for investors.
Warren.AI 💰 2.5 / 10
1. Business Model & Strategy Overview
1.1 Dermacia Cosmetics
- Acquisition in 2018: Formulation, inventory, and customer lists for Dermacia, a skincare/cosmetic line, were acquired.
- Sales Channel: Sold primarily via the company’s website and third-party e-marketplaces.
- Trailing Revenue: Less than $15K annually. For FY 2025, sales dropped from $13.7K to $4.9K.
1.2 Adapti AI Platform
- Genesis (2021): Recognizing that influencer ROI is often opaque, management embarked on building "Adapti," an AI system to:
- Scrape social-media data from multiple sources.
- Fingerprint product profiles and influencer audiences.
- Recommend optimal brand–influencer matches to maximize engagement and conversions.
- Development Spend: Approximately $500K invested over 2023–2025.
- Beta Testing: Limited production trials in 2024; no platform-generated revenues yet.
- Monetization Pathways: Planned licensing to third-party brands, and integrated use in prospective acquisitions.
1.3 Target Acquisitions
- Ballengee Group (Baseball Player Agency)
- Status: Membership Interest Purchase Agreement executed in March 2024; amendment under negotiation; expected close by Q2 2026.
- Value Proposition: Cross-sell Adapti insights to athletes and brands; add ~$10M in projected annual revenue (management’s claim).
- Matchpoint Connections (NIL Software for Universities)
- Status: Letter of Intent signed; targeted close Q2 2026.
- Synergies: Leverage Adapti’s AI to optimize colleges’ athlete endorsement strategies.
2. Financial Performance & Condition
2.1 Income Statement (FY 2025 vs. FY 2024)
| Metric | FY 2025 | FY 2024 | % Change |
|---|---|---|---|
| Revenue | $4,894 | $13,672 | –64% |
| Gross (Loss)/Profit | $4,894 | $(186,568) | +102% |
| G&A Expenses | $73,944 | $16,136 | +358% |
| Professional Fees | $834,576 | $1,496,924 | –44% |
| Net Loss | $(960,145) | $(1,709,015) | –44% |
| Loss per Share (Basic/Diluted) | $(0.64) | $(1.22) | –47% |
- Revenue Collapse: Dermacia sales waned due to cut-back in promotions. AI platform not yet contributing.
- Operating Leverage: Professional fees remain high due to consulting; G&A spiked (state license, admin).
- Loss Reduction: Net loss improved by 40%, but still nearly $1M.
2.2 Balance Sheet & Liquidity
| Metric | FY 2025 | FY 2024 |
|---|---|---|
| Cash | $572 | $702 |
| Accounts Receivable | $640 | $1,904 |
| Total Assets | $1,212 | $2,606 |
| Total Liabilities | $1,038,987 | $493,366 |
| Stockholders’ Deficit | $(1,037,775) | $(490,760) |
| Working Capital | $(1,030,775) | $(483,760) |
| Notes Payable (related party) | $453,624 | $346,016 |
- Near-Zero Liquidity: $572 in cash, effectively no assets beyond petty receivables.
- Debt Load: >$450K in related-party and convertible notes, accruing 10–20% interest.
- Equity Gap: Stockholders’ deficit of $1.04M, immediate dilution risks.
2.3 Cash Flows
- Operating: $(250K) used, mainly burn on expenses and unpaid salaries.
- Financing: $250K raised via note payable (10% interest).
- Investing: nil.
3. Red Flags & Key Risks
3.1 Going Concern & Capital Risks
- Auditors cite “substantial doubt.”
- Reliance on continual infusions from founders or new debt, risking dilution or insolvency.
3.2 Execution Uncertainty
- Adapti platform untested; customer traction unknown.
- High professional-fee burn with no scalable sales.
3.3 Acquisition Dependencies
- Ballengee & Matchpoint deals are nonbinding until amendments and closings occur; potential missing pipeline.
- Assumed synergies with unproven AI match-making—not guaranteed to materialize.
3.4 Governance & Controls Weaknesses
- Material weaknesses in internal control; limited segregation of duties.
- $175K+ in unpaid executive salaries; risk of leadership turnover.
3.5 Market & Competitive Pressures
- Influencer marketing space crowded (Klutch Sports, MOGL, Socially Powerful).
- Athlete management dominated by mega-agencies (Boras, CAA, Excel, Wasserman).
- Penny-stock status, low liquidity, FINRA sale restrictions dampen investor appetite.
4. Investment Outlook & Score: 2.5/10
Strengths
- Unique data-driven strategy targeting a real pain point in influencer ROI measurement.
- Potential to leverage Adapti across multiple verticals (direct brands, sports agencies, collegiate NIL).
Weaknesses
- No meaningful recurring revenues; cosmetics line is micro-scale.
- High burn rate on consultancy and overhead without product-market fit proof.
- Heavy reliance on related-party financing and founder capital.
- Multiple material weaknesses in accounting & controls.
Catalysts (What to Watch)
- Successful closing and revenue ramp from Ballengee Group.
- First commercial licensing deals for Adapti platform.
- Major new financing or strategic partnership validating Adapti’s AI.
Valuation & Score
- Market cap near zero post- reverse split; negative equity.
- Too early stage, high execution & financing risk.
Score: 2.5 out of 10
Only for very high-risk speculators — majority of value hinges on unproven AI and pending acquisitions.
5. Conclusion & Next Steps
Adapti, Inc. is at a pivotal point: it has built core AI assets and lined up potential acquisition targets. Yet, the company lacks real-world deployments at scale or predictable revenue streams. The company is effectively insolvent without swift, significant financing or a game-changing contract with major brands or agencies.
Investors considering a stake should treat it as an ultra-speculative play on AI in influencer marketing. A small bet may pay off if Adapti lands a marquee deal; otherwise, the capital structure and operating funding gaps point toward eventual dilution or failure.
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