1606 Corp. reported a significant decline in financial performance for the fiscal year ending December 31, 2024, compared to the previous year. The company generated revenues of $7,195, a substantial increase from $1,603 in 2023, primarily from its discontinued CBD product sales. However, the cost of goods sold rose sharply to $7,313 from $995, resulting in a gross loss of $118, contrasting with a gross profit of $608 in 2023. Operating expenses surged to $4,138,157, up from $1,620,580, largely due to stock-based compensation expenses amounting to approximately $3 million. Consequently, the net loss for 2024 escalated to $4,514,971, compared to a net loss of $1,580,733 in 2023.
Strategically, 1606 Corp. has shifted its focus from selling CBD products to developing AI chatbot technology tailored for the CBD industry. In August 2023, the company partnered with ARXT Labs to create a proprietary chatbot, "chatCBDW by CBDW AI," which began testing with customers in late 2023. Additionally, in April 2024, the company launched "IRChat," a chatbot designed for public companies. The company also signed a Letter of Intent to acquire a minority equity position in Adnexus, an AI biotech firm, although discussions are ongoing and the transaction has not yet closed.
Operationally, 1606 Corp. has made notable changes, including a leadership transition; CEO Greg Lambrecht stepped down in July 2024, and Austen Lambrecht was appointed as the new CEO. The company has one full-time employee and relies on independent contractors for additional support. As of March 31, 2025, the company had 137,361,424 shares of common stock outstanding and approximately 475 shareholders of record. The company is actively pursuing a monthly recurring licensing fee model for its chatbot services, targeting CBD brands and retailers through various marketing strategies.
The company’s financial outlook remains uncertain, as it has yet to achieve profitable operations and faces substantial doubt about its ability to continue as a going concern. Management indicated a cash need of approximately $1 million over the next 12 months to sustain operations. The company plans to raise capital through stockholder investments or other financing methods to support its growth strategy. The filing emphasizes that future results could differ materially from current expectations due to various factors, including market conditions and operational execution.
About 1606 CORP.
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