Hoops Scouting USA (HSCT)

Hoops Scouting USA operates at the intersection of youth basketball scouting and digital athlete training, two segments of the broader sports technology and data analytics market. The company's core premise is that data and video are reshaping how the game is evaluated, shifting emphasis from raw scoring totals toward measures of player efficiency, and that this shift creates an opportunity to democratize recruiting access. The company describes basketball as having risen to the second most popular sport in the world, with NBA players now coming from many international countries. The structural gap the company targets is that many larger schools with bigger recruiting budgets are often the only ones able to see international players, and often only the top players get a chance while second and third tier players do not get a chance to be recruited. The company positions its platform to bring international recruiting to the desk of every college coach in the United States from Division 1, Division 2, Division 3, NAIA, and Junior College, and to allow players from Europe, Australia, Asia, and South America to pursue opportunities in the United States at schools that would normally not be able to recruit in such a wide range.

Competition in the digital basketball training and scouting space includes many well established companies, and the company specifically identifies Pure Sweat Training by Drew Hanlen as another leading digital product. The company expects to face a medium to high level of resistance and states that it will be up to its marketing efforts and negotiation skills to acquire customers. Most competitors may have greater financial resources than the company and will be able to withstand sales or price decreases better, and the company expects to continue to face competition from new market entrants. The company's stated differentiation rests on the depth and authenticity of the Grit App, which it describes as created by professional coaches rather than simply trainers, with workout flows and programs used with thousands of athletes from grade school to the NBA globally for 20+ years, and featuring the GRIT proprietary 4 quarter workout plan, an all-encompassing holistic development model incorporating skill development, consistent testing, data input and comparison, weekly challenges, strength and conditioning, digital one on one coaching, video breakdown and digital mentorship plus evaluation via currently College and University coaches. The company asserts there are other entities on the market but nothing as thorough, as real or as in depth as what the GRIT app does for the modern athlete.

The company generates revenue through a mix of membership subscriptions, sponsorship, merchandise, and app-based training products. The stated revenue streams are player memberships, under which players sign up for full memberships allowing unlimited video uploads to the website and app or partial memberships to upload one or two videos at a time; coaching memberships, under which coaches sign up to receive emails and check players; and sponsorship, under which the website and app will have sponsors who can display ads on videos or on the website or the app, with sponsors able to receive information on what pages and what videos are being viewed the most. The company states that a small fee for players and coaches will be invoked but that sponsorship on the website and the app will be the main source of revenue. The Grit App offers monthly or yearly program subscriptions plus individual workout plans with lifetime access, with phased levels that encourage users to purchase the next progression of that portion of the app to enjoy 70+ workouts and workout segments with new workouts added daily. The company also plans to offer basketball merchandise including sweaters, jerseys and shorts for sale on its website, and has obtained some inventory although the online store is not yet active. The company's principal customers are youth to professional athletes globally, with beginners to advanced segments and drills housed inside the app.

The Hoops Scouting USA website is designed as the main hub, allowing high school players to set up accounts that include game film, schedules for high school and AAU games, stats, and high school academic marks, which allows coaches to see players and their stats and plan their recruiting with team schedules. The company is developing an app that will work in unison with the Website, and states that being able to upload stats and game film directly from a smart phone will allow players and coaches to get almost immediate information. The Grit App, acquired on February 17, 2023, is an on demand digital training platform designed for high level on and off court training for the serious athlete, designed by professionals with over 30 years of experience in training who have coached some of the best athletes in the world. All workouts contain drill videos from a 1000+ drill library in high resolution, and each drill has a tangible goal tracking reps or time to complete recorded right in the app. The app offers free daily professionally programmed workouts covering skill development, shooting, ball handling, athletic development, power, strength, mobility and yoga and injury prevention, along with informative premium content, film breakdown, interviews, live Zoom Q&A, support from a staff of professional coaches and athletes from across the world via in-app messages, coaching insight, and basketball IQ seminars and tips. The Grit App currently has 3,500 customers, and the app got 3,500+ users in the first two months of operation with no advertising.

The company's most significant operational development was the February 17, 2023 entry into an Asset Purchase Agreement with Grit Performance Athletics Inc. to acquire all right, title and interest in the Grit Mobile Application and related products, including website and Instagram account, with the Assets valued at $100,000 ¹ and paid for by the issuance of 37,500,000 ² restricted shares of common stock to Grit Performance. The company determined that this intangible asset was fully impaired as of June 30, 2023, and as of June 30, 2026 and 2025 the carrying amount of this intangible asset was $nil ³, with impairment expense of $100,000 ⁴ for the year ended June 30, 2026. During the year ended June 30, 2026, the company generated its first revenues of $20,000 ⁵ from the sale of basketball merchandise inventory to a single customer, North Stars Basketball, which is not a related party. The company executed a forward stock split at 75:1 ⁶ on June 9, 2023, and as of June 30, 2026 had 101,250,000 ⁷ common shares issued and outstanding. The company's strategy with the Grit App is to recruit current and former NBA and NCAA players and coaches as well as respected trainers to have their workouts on the app and do a revenue share with them, allowing them to sell the program on the app as their personal workout program and motivating them to sell it as they receive a portion of all revenues from their workout. The company also plans to use NBA, NCAA and other professional as well as the world's top trainers to help advertise the app, with a profit share structure allowing these players to advertise via social media and share in users' profits. The company has identified untapped markets including the networks of Doug Plumb, with players from university to pro, professional coaches globally and some of the most influential basketball trainers in the world, and notes that between two such figures there are 4+ million followers on Instagram.

For the year ended June 30, 2026, the company generated revenue of $20,000 ⁸ compared to $nil ⁹ for the year ended June 30, 2025, from the sale of basketball merchandise inventory to a single customer. Cost of goods sold was $15,755 ¹⁰, resulting in gross profit of $4,245 ¹¹. Operating expenses were $79,538 ¹² compared to $20,118 ¹³ for the year ended June 30, 2025, comprising general and administrative expenses of $359 ¹⁴ (2025 – $263 ¹⁵), professional fees of $35,010 ¹⁶ (2025 – $12,428 ¹⁷) and transfer agent and filing fees of $44,169 ¹⁸ (2025 – $7,427 ¹⁹). The increase in operating expenses was primarily due to fees incurred in connection with the quotation of the company's common stock on the OTC Markets, including OTC Markets application and annual fees and fees paid to Glendale Securities, together with higher audit and accounting fees. The company also recognized other income of $4,229 ²⁰ from a legal settlement. Net loss for the year ended June 30, 2026 was $71,064 ²¹ compared to $20,118 ²² for the year ended June 30, 2025. The company's accumulated deficit as of June 30, 2026 is $382,901 ²³. As of June 30, 2026, the company had cash of $8,013 ²⁴ and total assets of $69,127 ²⁵ compared to cash of $20 ²⁶ and total assets of $76,889 ²⁷ as at June 30, 2025. Total liabilities were $316,978 ²⁸ and $253,676 ²⁹ respectively, all of which are current, and working capital deficit was $247,851 ³⁰ as at June 30, 2026 compared to $176,787 ³¹ at June 30, 2025.

Management's stated plan is to promote the website and develop the Hoops Scouting USA app to run in conjunction with the website, and the company is looking at potential partnerships with current scouting services and college sport sponsorship consulting firms. The company states that no substantial revenues are anticipated until it has obtained additional financing and implemented its plan of operations. The company anticipates that over the next 12 months the cost of being a reporting public company, including legal and accounting fees, will be approximately $27,000 ³², and its independent auditor is expected to charge approximately $15,000 ³³ to review quarterly financial statements and approximately $12,000 ³⁴ to audit annual financial statements, for anticipated total accounting and audit spending of approximately $27,000 ³⁵ in the next twelve months.

The Grit App represents the company's principal near-term growth vector, with a strategy to recruit current and former NBA and NCAA players and coaches as well as respected trainers to have their workouts on the app under a revenue share arrangement, allowing them to sell the program on the app as their personal workout program and motivating them to sell it as they receive a portion of all revenues from their workout. The company plans to use NBA, NCAA and other professional as well as the world's top trainers to help advertise the app, and the profit share structure it plans to implement allows these players to advertise via social media and share in users' profits. The company identifies untapped markets including Doug Plumb's network of players from university to pro, professional coaches globally and some of the most influential basketball trainers in the world, and notes that between two such figures there are 4+ million followers on Instagram. The Grit App currently has 3,500 customers ³⁶, and the app got 3,500+ users in the first two months of operation with no advertising. The company believes it can use both products as separate entities as well as advertise each through the other, and the Grit App will operate seamlessly with Hoops Scouting USA and be able to market to all Hoops Scouting USA users and give them a deal on training or build packages that give them access to Hoops Scouting USA and the app for a single package price.

The Hoops Scouting USA platform itself is a second growth vector, with the website serving as the main hub and an app under development to work in unison with it. The platform is designed to allow high school players to set up accounts including game film, schedules for high school and AAU games, stats, and high school academic marks, enabling coaches to see players and their stats and plan recruiting with team schedules, and bringing international recruiting to the desk of every college coach in the United States from Division 1, Division 2, Division 3, NAIA, and Junior College. The company also plans to offer basketball merchandise including sweaters, jerseys and shorts for sale on its website, has obtained some inventory, and states that the online store is not yet active. The company's marketing plan encompasses its website, search engine optimization, social networking websites, printing, mailing and emailing catalogues and flyers to potential customers, word of mouth, telephoning potential customers, content marketing and paid ads, and the company hopes to have repeat customers coming and buying new products online from its website. The Grit app can take on advertisers which can be put on all user and franchisee pages of the app, and marketing to date includes email marketing and brand design, customer acquisition and marketing photography.

The company's cost structure is dominated by public-company compliance and professional service expenses rather than product delivery costs. Operating expenses for the year ended June 30, 2026 were $79,538 ³⁷, comprising general and administrative expenses of $359 ³⁸, professional fees of $35,010 ³⁹ and transfer agent and filing fees of $44,169 ⁴⁰. The increase in operating expenses was primarily due to fees incurred in connection with the quotation of the company's common stock on the OTC Markets, including OTC Markets application and annual fees and fees paid to Glendale Securities, together with higher audit and accounting fees. The company anticipates that over the next 12 months the cost of being a reporting public company, including legal and accounting fees, will be approximately $27,000 ⁴¹. The company has no employees, with its sole officer and director managing the day-to-day operations.

The company's operational posture is minimal and outsourced. It has no employees, and its sole officer and director manages the day-to-day operations. The company uses a third-party independent contractor for the preparation of its financial statements, and its executive offices are located at 63 Rocio Court, Palm Desert, CA 92260, using space in its sole officer and director's home, which the company believes is sufficient to meet its needs for the foreseeable future. The company does not currently own any real estate. The company has not adopted formal processes for assessing, identifying and managing material risks from cybersecurity threats, and its sole officer and director is responsible for overseeing cybersecurity risks, which relate principally to the security of its website, the Grit application and the third-party service providers it uses for accounting, banking and SEC filing. The company does not maintain any insurance.

Capital allocation is entirely directed toward sustaining operations and funding the business plan, with no return-of-capital components. The company has never declared or paid any cash dividends on its common stock and does not anticipate paying dividends in the foreseeable future. It has no equity compensation plans and no current outstanding equity awards to its executive officers. During the year ended June 30, 2026, the company used $44,082 ⁴² cash in operating activities compared to $29,053 ⁴³ during the year ended June 30, 2025, and received $52,075 ⁴⁴ in proceeds from a related party compared to $28,997 ⁴⁵ during the year ended June 30, 2025, which constituted net cash provided by financing activities in each period. The company's main source of cash at this time is advances from its officer and director, who is under no obligation to continue providing such advances. The company states it must raise cash to implement its strategy and stay in business, and that if it cannot raise additional proceeds via a private placement of its equity or debt securities, or secure a loan, it would be required to cease business operations, as a result of which investors would lose all of their investment.

The company faces a severe structural constraint in its liquidity position. As of June 30, 2026, the company had cash of $8,013 ⁴⁶ and total assets of $69,127 ⁴⁷, with total liabilities of $316,978 ⁴⁸, all of which are current, and a working capital deficit of $247,851 ⁴⁹. The available capital reserves of the company are not sufficient for the company to remain operational. As of June 30, 2026, the company's officer and director is owed $287,019 ⁵⁰ for paying expenses related to operations since inception, an amount that is unsecured, bears no interest, and is payable on demand. The company's auditors have issued a going concern opinion, meaning that there is substantial doubt about the company's ability to continue as a going concern for the next twelve months unless it obtains additional capital. The company also owed $16,000 ⁵¹ to non-related parties for loans payable as at June 30, 2026, which are unsecured, non-interest bearing, and were due on or before June 30, 2026, and which remained outstanding as of June 30, 2026 and are classified as current liabilities.

Execution risk is compounded by identified material weaknesses in internal control. Management concluded that disclosure controls and procedures were not effective as of June 30, 2026, and that internal control over financial reporting was not effective, citing a lack of formal policies and procedures, including reliance on a third-party independent contractor for financial statement preparation who is not involved in day-to-day operations and may not be provided information on a timely basis, and the absence of a formal audit committee with a financial expert. The company also does not have a formal financial reporting process which has resulted in the company being delinquent in its SEC filings on a quarterly and annual basis. The company states it is reviewing its disclosure controls and procedures related to these material weaknesses and expects to implement changes in the near term, including identifying specific areas within its governance, accounting and financial reporting processes to add adequate resources to potentially mitigate these material weaknesses, as funds allow.

Management's message to shareholders is candid about the company's early-stage status and its dependence on external capital, framing the past fiscal year as one of first commercial traction against a backdrop of substantial doubt about the company's ability to continue as a going concern. The company generated its first revenues of $20,000 ⁵⁹ during the year ended June 30, 2026 from the sale of basketball merchandise inventory to a single customer, while net loss widened to $71,064 ⁶⁰ from $20,118 ⁶¹ in the prior year, driven by operating expenses of $79,538 ⁶² versus $20,118 ⁶³, with the increase primarily attributable to fees incurred in connection with the quotation of the company's common stock on the OTC Markets, including OTC Markets application and annual fees and fees paid to Glendale Securities, together with higher audit and accounting fees. The company's auditors have issued a going concern opinion, and management states that the available capital reserves of the company are not sufficient for the company to remain operational, that no substantial revenues are anticipated until it has obtained additional financing and implemented its plan of operations, and that its main source of cash at this time is advances from its officer and director, who is under no obligation to continue providing such advances. Management states that if the company cannot raise additional proceeds via a private placement of its equity or debt securities, or secure a loan, it would be required to cease business operations, as a result of which investors would lose all of their investment. The company anticipates that over the next 12 months the cost of being a reporting public company, including legal and accounting fees, will be approximately $27,000 ⁶⁴. The strategic priorities management has chosen to emphasize are, first, promoting the website and developing the Hoops Scouting USA app to run in conjunction with the website; second, pursuing potential partnerships with current scouting services and college sport sponsorship consulting firms; and third, monetizing the Grit App through a revenue share model with current and former NBA and NCAA players and coaches as well as respected trainers, supported by a profit share structure under which those players advertise via social media and share in users' profits. Management also emphasizes remediation of its internal control weaknesses, stating it is reviewing its disclosure controls and procedures and expects to implement changes in the near term, including identifying specific areas within its governance, accounting and financial reporting processes to add adequate resources to potentially mitigate these material weaknesses, as funds allow.

For the year ended June 30, 2026, the company reported sales of $20,000 ⁶⁵ compared to $nil ⁶⁶ for the year ended June 30, 2025, with cost of goods sold of $15,755 ⁶⁷ and gross profit of $4,245 ⁶⁸. Net loss was $71,064 ⁶⁹ compared to $20,118 ⁷⁰ in the prior year, and loss per share, basic and diluted, was $0.00 ⁷¹ in both periods on weighted average shares outstanding of 101,250,000 ⁷² in each year. Operating expenses totaled $79,538 ⁷³ versus $20,118 ⁷⁴, comprising general and administrative expenses of $359 ⁷⁵ (2025 – $263 ⁷⁶), professional fees of $35,010 ⁷⁷ (2025 – $12,428 ⁷⁸) and transfer agent and filing fees of $44,169 ⁷⁹ (2025 – $7,427 ⁸⁰). Other income of $4,229 ⁸¹ was recognized from a legal settlement during the year ended June 30, 2026, representing the company's share of the settlement of a class action lawsuit brought against its former independent registered public accounting firm, BF Borgers CPA PC, which partially offset the reported net loss. The company operates as a single operating and reportable segment, and its chief operating decision maker is its Chief Executive Officer, who reviews net loss as reported on the statements of operations to assess performance and allocate resources. On the balance sheet, cash was $8,013 ⁸² at June 30, 2026 versus $20 ⁸³ at June 30, 2025, total assets were $69,127 ⁸⁴ versus $76,889 ⁸⁵, total liabilities were $316,978 ⁸⁶ versus $253,676 ⁸⁷, and total stockholders' deficit was $247,851 ⁸⁸ versus $176,787 ⁸⁹. Net cash used in operating activities was $44,082 ⁹⁰ compared to $29,053 ⁹¹, while net cash provided by financing activities from proceeds from a related party was $52,075 ⁹² compared to $28,997 ⁹³. Inventory stood at $61,114 ⁹⁴ at June 30, 2026 versus $76,869 ⁹⁵ at June 30, 2025, with no write-down recorded for either year. The company has net operating losses carried forward of $305,679 ⁹⁶ (June 30, 2025 – $227,948 ⁹⁷), and its gross deferred tax asset was $80,409 ⁹⁸ at June 30, 2026 against a full valuation allowance of $80,409 ⁹⁹, producing a net deferred tax asset of zero, with no income taxes paid during the years ended June 30, 2026 and 2025.

The most acute risk is the company's ability to continue as a going concern. The company suffered an accumulated deficit of $382,901 ⁵², a net loss of $71,064 ⁵³ and negative working capital of $247,851 ⁵⁴, and its auditors have issued a going concern opinion meaning there is substantial doubt about its ability to continue as a going concern for the next twelve months unless it obtains additional capital. The available capital reserves are not sufficient for the company to remain operational, and its main source of cash is advances from its officer and director, who is under no obligation to continue providing such advances; as of June 30, 2026 the company owed that officer and director $287,019 ⁵⁵, unsecured, non-interest bearing and payable on demand. If the company cannot raise additional proceeds via a private placement of its equity or debt securities, or secure a loan, it would be required to cease business operations and investors would lose all of their investment. A second material risk is customer concentration and the absence of a scaled revenue base: all $20,000 ⁵⁶ of fiscal 2026 revenue was derived from one customer, North Stars Basketball, and the company states that no substantial revenues are anticipated until it has obtained additional financing and implemented its plan of operations. Third, the company faces competition from many well established companies such as Pure Sweat Training by Drew Hanlen, and most competitors may have greater financial resources and will be able to withstand sales or price decreases better, with the company expecting a medium to high level of resistance and continued competition from new market entrants. Fourth, the company's internal controls are materially deficient: management concluded disclosure controls and procedures and internal control over financial reporting were not effective as of June 30, 2026, citing the lack of formal policies and procedures and the absence of an audit committee with a financial expert, and the company lacks a formal financial reporting process which has resulted in it being delinquent in its SEC filings on a quarterly and annual basis. Fifth, the company's intangible asset from the Grit acquisition was fully impaired, with impairment expense of $100,000 ⁵⁷ and a carrying amount of $nil ⁵⁸ as of June 30, 2026, and the company holds no patents or trademarks and does not maintain any insurance.