Executive Summary / Key Takeaways

• Hallmark Venture Group, Inc. (HLLK) has fundamentally transformed into a "shell company" following the divestiture of its sole operating subsidiary, Jubilee Intel, LLC, in May 2025, with its current strategy focused entirely on identifying and executing a merger or acquisition.
• The company faces significant financial distress, evidenced by a June 30, 2025, cash balance of $1,776, a working capital deficit of $655,162, and an accumulated deficit of $3.57 million, leading to substantial doubt about its ability to continue as a going concern.
• HLLK's financial performance for the six months ended June 30, 2025, shows a net loss of $91,332 from continuing operations, with the prior revenue-generating segment now discontinued, highlighting the urgent need for a successful acquisition.
• The investment thesis hinges entirely on HLLK's ability to secure additional financing and successfully complete a transformative acquisition, as its current operations generate no revenue and it lacks proprietary technological differentiation.
• Key risks include the inherent uncertainty of M&A success, material weaknesses in internal controls, and a high dependency on external capital, making HLLK a highly speculative proposition.

A Company in Transition: HLLK's Strategic Pivot to M&A

Hallmark Venture Group, Inc. (HLLK) stands at a critical juncture, having shed its operational past to embrace a future solely defined by strategic acquisition. The company, with a history marked by frequent corporate transformations and shifts in control since its 1995 inception as CPC Office Systems, Inc., has now formally declared itself a "shell company." This designation signifies a complete pivot, where its sole purpose is to locate and consummate a merger or acquisition with a private entity. This strategic reorientation places HLLK firmly within the speculative realm of the mergers and acquisitions (M&A) market, competing for targets and investor capital alongside other shell companies and Special Purpose Acquisition Companies (SPACs).

The decision to become an M&A vehicle follows a significant operational change in May 2025, when HLLK deconsolidated Jubilee Intel, LLC, its only revenue-generating subsidiary. Jubilee previously specialized in search engine marketing, managing Yahoo partner advertisements and offering a Software-as-a-Service (SaaS) platform for third-party ad spend. This divestiture, which involved transferring Jubilee's membership interest in exchange for Series A Preferred Shares, has left HLLK's continuing operations without any revenue streams. The company's current market positioning is thus defined by its potential as a public listing vehicle for a private company, rather than any inherent operational strengths or technological differentiators.

Operational Shifts and the Search for a New Core

The discontinuation of Jubilee Intel, LLC fundamentally reshaped HLLK's operational landscape. While Jubilee had generated $20,872 in revenue and a gross margin of $18,192 for the six months ended June 30, 2025, this segment's departure means HLLK's administrative segment, which handles corporate functions like finance and legal, now constitutes the entirety of its continuing operations. This administrative segment, by its nature, does not generate revenue. The company is actively evaluating various business opportunities to determine new lines of business to pursue, but as of the latest filing, no specific acquisition target has been identified, nor have any negotiations commenced.

Crucially, HLLK currently lacks any proprietary, differentiated technology that could serve as a competitive moat. Its former subsidiary, Jubilee, utilized a business model centered on Yahoo partner advertisements and a SaaS platform, but these operations are no longer part of HLLK. Therefore, any future technological differentiation or innovation for HLLK would need to come through a successful acquisition. The strategic intent is clear: to acquire an operating business, potentially one with its own technological advantages, to re-establish a revenue-generating core. Without such an acquisition, HLLK's long-term viability remains highly uncertain.

Financial Performance: A Snapshot of a Company in Flux

HLLK's financial performance for the six months ended June 30, 2025, reflects a company in deep transition and under significant financial strain. The administrative segment reported total operating expenses of $134,822, a substantial increase from $31,610 in the prior year, driven by higher general and administrative expenses, compensation, and professional fees. Other income and expenses were heavily influenced by non-cash items, including a $1.35 million gain from the change in fair value of derivative, which largely offset significant losses from interest expense ($125,983), bad debt expense ($161,317), amortization of debt discount ($126,316), loss on conversion of debt ($469,164), and loss on issuance of convertible debt ($442,464). This resulted in a net loss from continuing operations of $91,332 for the six months ended June 30, 2025.

For the three months ended June 30, 2025, the company reported a net gain of $637,595, primarily due to the $1.37 million gain from the change in fair value of derivative, which management expects to fluctuate for the foreseeable future. However, this gain masks the underlying operational challenges. The company's annual revenue for 2024 was $609,549, with a gross profit of $520,462, but these figures largely predate the deconsolidation of Jubilee. The latest TTM (trailing twelve months) financial ratios show a gross profit margin of 100% and a net profit margin of 25.29%, which are distorted by the non-cash derivative gains and the absence of cost of revenue from discontinued operations in the current period. Operating cash flow for the six months ended June 30, 2025, was a positive $34,293, compared to cash used in operating activities of $31,610 in the prior year, primarily due to adjustments for non-cash items.

Liquidity, Capital Needs, and the Going Concern Challenge

HLLK's liquidity position is precarious. As of June 30, 2025, the company held a minimal cash balance of $1,776 against current liabilities of $656,938, resulting in a working capital deficit of $655,162. This significant deficit, coupled with an accumulated deficit of $3.57 million and the lack of revenue-generating operations, raises substantial doubt about HLLK's ability to continue as a going concern.

Management acknowledges this challenge and is actively seeking additional capital through new equity offerings, debt financing, and debt restructuring. The company also aims to explore strategic partnerships to fund internal growth and implement its business plan. However, there is no assurance that these funds will be available in adequate amounts or on favorable terms. Subsequent to the reporting period, HLLK continued to engage in various financing activities, including issuing convertible notes and converting existing debt into common stock with parties like Nicosel, LLC, Selkirk Global Holdings, LLC, and Wonderland Asset Management, LLC. For instance, in July 2025, HLLK entered into a $100,000 convertible note with Nicosel, LLC, and a $50,000 convertible note with Selkirk Global Holdings, LLC. These activities highlight the ongoing reliance on debt and equity issuances to sustain operations and manage liabilities.

Competitive Landscape: Vying for Opportunity in a Crowded Field

HLLK's competitive landscape is primarily defined by other entities operating as shell companies or Special Purpose Acquisition Companies (SPACs), all vying for attractive private acquisition targets. Unlike established operational businesses such as MYR Group Inc. (MYRG), an electrical construction and maintenance firm, HLLK does not compete on operational efficiency, project execution, or technological leadership in a specific industry. Instead, its competition lies in the ability to identify, negotiate, and finance a successful business combination.

Compared to a SPAC like Churchill Capital Corp VII (CCVII), HLLK, as a smaller entity, may possess greater flexibility for certain types of deals or a potentially lower-cost structure for smaller acquisitions. However, CCVII likely benefits from more established networks, stronger investor backing, and a more defined investment mandate, which can lead to qualitatively stronger market positioning and execution in larger, more complex transactions. HLLK's historical profile as a rebranded shell company, coupled with its current financial fragility, positions it at a qualitative disadvantage in attracting high-quality targets and institutional investors compared to more robust SPACs.

Even against a development-stage technology company like QuantumScape Corporation (QS), HLLK's competitive standing is distinct. QS competes on technological innovation in battery technology, a clear differentiator. HLLK, lacking its own core technology, must acquire it. This means HLLK competes for the opportunity to gain a technological edge, rather than possessing one currently. HLLK's competitive advantages are limited to its status as a publicly traded entity, which can offer a streamlined path to public markets for a private company, and its flexibility in target selection. However, its small scale and dependence on successful deals are significant vulnerabilities, making it less competitive in terms of financial performance, operational efficiency, and market share capture compared to both operational companies and well-capitalized SPACs.

Risks and the Path Forward: A High-Stakes Bet

Investing in HLLK is a high-stakes proposition, fraught with significant risks. The most pressing concern is the "going concern" warning, directly stemming from its accumulated deficit, minimal cash, and the absence of revenue-generating operations. The company's survival hinges entirely on its ability to secure additional financing and successfully complete a transformative acquisition. The uncertainty surrounding the availability of funds and the identification of a suitable target represents a fundamental risk.

Furthermore, HLLK's principal executive and financial officers have identified material weaknesses in internal control over financial reporting, citing "inadequate segregation of duties and effective risk assessment" and "insufficient written policies and procedures". Remediation efforts are "largely dependent upon our securing additional financing," creating a circular dependency where financial health impacts the ability to address foundational operational risks. The company also faces concentration risk, as its entire revenue for the period ended June 30, 2025, was derived from a single customer, prior to the deconsolidation of Jubilee. A $100,000 strategic loan was deemed potentially non-collectible, resulting in a bad debt expense, further highlighting financial vulnerabilities. Prospective investors lack the opportunity to evaluate the specific merits or risks of any future business combination, adding another layer of uncertainty.

Outlook: Awaiting the Next Chapter

HLLK's outlook is entirely speculative, tied to its success in executing its M&A-focused strategy. Management explicitly states that the company's capital position is expected to deteriorate until it generates significant revenues from future operations or acquires a private company with ongoing operations, with no assurance that either will occur. The company plans to implement changes to its internal controls during fiscal year 2025, including appointing additional qualified personnel and adopting sufficient written policies, but these are contingent on obtaining additional financing.

The investment narrative for HLLK is one of potential rebirth through acquisition. Its current status as a shell company, devoid of operational revenue and proprietary technology, means its value is derived from the prospect of a future, yet-to-be-determined business combination. Investors must weigh the significant financial distress and operational risks against the potential upside of a successful merger that could inject new life, revenue, and potentially, technological differentiation into the company. Monitoring the company's financing activities, any announcements regarding acquisition targets, and progress on internal control remediation will be crucial for any investor considering this highly speculative opportunity.