Zentrum Holdings, Inc. (OTC: ZTHL) 2024 10-K Review

In this review we dissect Zentrum Holdings, Inc.’s ("Zentrum" or the "Company") annual report on Form 10-K for fiscal year ended December 31, 2024. We cover the business description (Item 1), financial performance (Items 7, 7A and 8), risk considerations (Item 1A), and offer an assessment of the Company’s investment potential.

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Company Overview and Corporate History

Zentrum Holdings, Inc. is a Delaware corporation incorporated on November 22, 2019 under the name “OFF Line International, Inc.” It conducts operations exclusively through its wholly owned subsidiary, OFF Line Japan Co., Ltd., which was incorporated in Japan on June 13, 2018. OFF Line Japan is headquartered rent‐free in Tokyo (provided by CEO Koichi Ishizuka) and focuses on developing telecommunications products and related services. In June 2021, the Company changed its name to Zentrum Holdings, Inc.

Koichi Ishizuka serves as the Company’s sole officer and director, handling the roles of CEO, CFO, President, Secretary and Treasurer since inception. In parallel, Mr. Ishizuka controls several other entities (OFF Line Co., Ltd., Photozou group, Next Meats, WB Burgers Japan, etc.) and has provided initial equity—20 million restricted shares—and ongoing financial support via advances totaling $790,137 as of December 31, 2024.

Business Segments and Products (Item 1)

Zentrum operates a single reportable segment under US GAAP: telecommunication products and services in Japan. Key offerings include:

1. AirTalk

• Anonymous SNS chat application with online/offline peer‐to‐peer BLE communication up to 120m and “Crossed Paths” GPS notifications.
• Source code acquired in December 2019, most recent version released December 2020. Development and marketing are indefinitely suspended due to funding constraints. No monetization plan has been implemented.

1. AI Camera Service

• Face‐recognition system using AWS DeepLens to identify and prevent wandering in dementia care facilities. Alerts staff upon exit attempts. Released September 2022, no sales or active marketing to date. Ongoing maintenance contract in place.

1. Beacon Solutions (“Blette”)

• BLE 5.0–based beacon stick that extends mobile app range (~3.5 km). Supports child/elder monitoring and property tracking. Available on Amazon US; no formal marketing or promotional campaigns. Sales are passive and minimal.

1. Drone Management System

• BLE 5.0 beacon on GPS‐equipped drones to broadcast identity, enabling public smartphone detection of operator and flight purpose. In development; Ministry interest reported. No completed prototype sales.

Market and Customers

All revenues and operations are concentrated in Japan, with potential for expansion into US state authorities once the drone system is complete and regulatory frameworks demand enhanced drone oversight.

Financial Performance (Items 7 & 8)

Summary 2024 vs. 2023:

• Revenue: $196 in 2024 (first nominal sales of beacon devices; $0 in 2023).
• Gross Profit: $116 in 2024.
• Operating Expenses: $144,414 (mainly R&D, maintenance, legal, and general overhead).
• Imputed Interest Expense: $61,027 on related-party advances ($50,599 in 2023).
• Net Loss: $205,786 (2023: $254,745).
• Comprehensive Loss (Net of foreign currency translation gains of $82,417): $123,369.
• Cash & Cash Equivalents: $827 at December 31, 2024; $3,549 at December 31, 2023.
• Working Capital Deficit: $802,440 (2023: $740,098).

The Company has never generated meaningful positive operating cash flow and relies on founder advances. Cash used in operations was $138,432 in 2024 (vs. $207,702 in 2023), and cash from financing (related party) was $135,977.

Balance Sheet Highlights

• Assets: $2,866 total (entirely current — cash, receivables and inventory).
• Liabilities: $805,306 (current), including $790,137 due to related party.
• Stockholders’ Deficit: $(802,440) as of December 31, 2024.

Going Concern Auditors highlighted substantial doubt about the Company’s ability to continue as a going concern due to recurring losses, negative cash flow, and reliance on advances with no committed financing sources.

Quantitative & Qualitative Disclosures (Item 7A)

As a smaller reporting company, Zentrum is exempt from detailed market risk disclosures. Management notes no material interest rate, credit, or currency risk beyond normal exposure to JPY/USD translation.

Risk Factors (Item 1A)

Zentrum’s 10-K omits a detailed Item 1A risk section under smaller reporting company rules. Key implied risks include:

• Going Concern: Dependence on related-party funding; no external capital commitments.
• Concentration Risk: Single officer/director; no independent governance.
• Commercialization Risk: No active marketing or sales for core products (AirTalk, AI Camera, beacon sticks).
• Development Risk: Drone system still in R&D with uncertain regulatory adoption.
• Regulatory & Legal: Operating in multiple jurisdictions (US and Japan) with evolving telecommunications and data privacy laws.

Corporate Governance & Controls

• Director & Officer: Sole officer/director is founder Koichi Ishizuka; no independent directors.
• Committees: No audit, compensation or nominating committees; no Code of Ethics published.
• Internal Controls: Management concluded that disclosure controls and procedures are ineffective. Material weaknesses: domination of decision-making by a single individual, inadequate segregation of duties, lack of well-established related-party transaction approvals, and absence of an audit committee.

Critical Audit Matters Auditors identified management’s evaluation of the going concern as a critical audit matter due to reliance on subjective estimates of future cash flows and undeveloped product monetization.

Outlook & Funding Requirements Zentrum plans to seek equity financing, non-cash transactions, and potential strategic partnerships. Without external capital or revenue traction, continued R&D and marketing remain unfunded.

Investment Considerations

• Strengths:
• Proprietary BLE 5.0 drone system and beacon hardware.
• Founder’s track record in multiple technology ventures.
• Lean cost structure with minimal fixed overhead.
• Weaknesses:
• No recurring revenue or validated business model.
• Negative working capital and cash reserves near zero.
• Lack of independent governance and formal risk management.
• Early-stage R&D with unproven market adoption.
• Opportunities:
• Regulatory mandates could drive drone identification solutions.
• Partnerships with care facilities for AI Camera Service (growing elder care market in Japan).
• Expansion of beacon technology into IoT tracking.
• Threats:
• Competitive SAR solution providers (e.g., GPS trackers, LBS systems).
• Data privacy regulations affecting video analytics.
• Technology obsolescence in high-speed wireless standards.

Valuation & Outlook With no reliable revenue stream or capital commitment, Zentrum’s equity remains highly speculative. A successful financing round and product de-risking milestones (AI Camera pilot contracts, beacon sales ramp, drone system field trials) would be required before a traditional valuation approach is feasible.

Net Loss For the year ended December 31, 2024: $(205,786) (2023: $(254,745)).

Conclusion and Investment Score Zentrum Holdings is a very early-stage, pre-revenue (beyond token product sales) technology incubator with multiple concepts at various development stages. Management’s deep control and lack of independent oversight, combined with zero marketing and a going-concern warning, make this an extremely high-risk play. Near-term value catalysts are unclear. Only deep‐value speculative investors with high risk appetite should engage.

Investment Score (1–10): 2.5

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