CBDWOTCServices-Prepackaged SoftwareUS GAAP · USD

1606 Corp.

1606 CORP. is a Nevada-incorporated software company formed in 2021 via a spin-off from Singlepoint Inc., focused on AI chatbots that can be embedded on customer websites. Its initial product, ChatCBDW, targets CBD and wellness merchants by answering product questions, educating consumers, and recommending items based on a merchant-uploaded catalog. In 2024 the company expanded the concept to public-company use cases with Chat IR, designed to answer investor questions about operations and disclosures on an issuer’s website. The commercial model emphasized in filings is monthly recurring licensing, supported by direct digital marketing and distribution through independent sales organizations (ISOs) such as IR firms, transfer agents, press services, web developers, and CBD distributors.

Revenue0.0m USD
−100.0 %y/y
Operating profit (EBIT)-0.5m USD
+88.3 %y/y
Net income-1.3m USD
+71.3 %y/y

Fiscal year 2025 · change from previous year

Development 2020–2025

-5-4-3-2-101m USD2020: 0.07 m USD20202021: 0.03 m USD20212022: 0.01 m USD2022: EBIT -0.54 m USD20222023: 0.00 m USD2023: EBIT -1.8 m USD20232024: 0.01 m USD2024: EBIT -4.1 m USD20242025: 0.00 m USD2025: EBIT -0.49 m USD20250.00-0.49
RevenueOperating profit (EBIT)

Business

Share of revenue
Chatbot subscriptions (SaaS licensing)70 %

Monthly recurring licensing of AI chatbots embedded on customer websites (e.g., ChatCBDW, Chat IR).

Implementation & configuration services20 %

Setup, training, and customization of bots to client-specific FAQs, catalogs, and disclosures.

Consulting and other services10 %

Ad hoc consulting work for prospective customers and related service revenue.

Customers

The company targets two main buyer groups: CBD/wellness brands and retailers that want automated product education and recommendations, and public companies that want an always-on Q&A layer for investor relations. For CBD merchants, the value proposition centers on converting site traffic into sales via product recommendations and 24/7 answers, plus analytics that can inform inventory management. For public companies, Chat IR is positioned as a website bot that answers questions about operations and disclosures, potentially reducing repetitive inbound IR queries. Customer acquisition is pursued through direct online marketing (website, ads, email campaigns) and through ISOs that bundle the chatbot with adjacent services such as web development, press/IR services, transfer agency services, payment processing, and CBD distribution.

CBD and wellness merchants (retailers and brands)

Buy ChatCBDW subscriptions to answer product questions, recommend items from uploaded catalogs, and capture analytics that can support inventory decisions.

Public companies (issuer websites / investor relations)

Buy Chat IR subscriptions to provide automated Q&A about operations and disclosures on corporate websites and reduce friction for investor inquiries.

Channel partners / ISOs (IR firms, transfer agents, web developers, distributors)

Resell or bundle the chatbot within broader service offerings to monetize existing client relationships and add recurring software revenue.

Strategy

The near-term strategy is to convert product development into recurring revenue by signing customers to monthly licensing for its chatbots. Management emphasizes a dual go-to-market motion: direct demand generation via online ads and email campaigns, and indirect distribution through ISOs that can bundle the bot with complementary services. Product strategy includes vertical specialization (CBD/wellness with ChatCBDW) and a second use case aimed at public companies (Chat IR) to broaden the addressable market. The company also signaled interest in expanding its AI footprint through a nonbinding LOI to acquire a strategic stake in Adnexus, focused on AI in early drug discovery and infectious disease research.

Grow recurring licensing customers for chatbotsShort term

Recurring subscriptions are the core monetization model and improve revenue visibility versus one-off services.

Build partner-led distribution through ISOsMedium term

ISOs can bundle the bot with adjacent services and accelerate customer acquisition with lower direct sales effort.

Broaden product-market fit beyond CBDMedium term

Adding use cases like public-company IR reduces reliance on a single vertical and can expand TAM.

Geography

1606 CORP. is based in the United States and operates as a software business selling website-embedded chatbots to customers that can be located both within and outside the CBD industry. The company’s go-to-market approach relies heavily on digital channels (website, online ads, email campaigns) and partner/ISO distribution, which can support selling across geographies without a large physical footprint. Development referenced in filings includes work performed on Microsoft Azure by AR XTLabs, indicating reliance on third-party technology and service providers rather than owned infrastructure. The reports provided do not include an authoritative revenue-by-geography breakdown, so geographic revenue concentration cannot be quantified from the excerpts.

Risks

A central company-specific risk is execution: filings show minimal historical revenue and periods with no revenue, so the business depends on converting interest into paying monthly licenses. Liquidity and going-concern risk is elevated because management indicates a sizable cash need over the next 12 months and expects to raise capital via equity or convertible instruments if revenue does not ramp. The model also carries platform and vendor dependence risk, as products are built/integrated with third-party AI and cloud components (e.g., OpenAI/ChatGPT integration and Microsoft Azure hosting), which can affect cost, performance, and availability. Industry risks include intense competition in AI chatbot software, rapid technology change, and potential regulatory/advertising constraints in CBD-related commerce that could reduce merchant demand or increase compliance burden.

Sorted by severity
Going concern and liquidity shortfallCritical

Management states substantial doubt about continuing as a going concern and indicates a significant cash need over the next 12 months, implying reliance on financing if revenues do not increase.

ExposureNeed to raise capital via equityConvertible notesDebt or similar instruments
Revenue ramp and commercialization riskHigh

The company reported periods with no revenue and is still working to sign CBD merchants and other customers to monthly subscriptions.

Third-party technology dependencyMedium

ChatCBDW is integrated with ChatGPT and built on Microsoft Azure; changes in pricing, terms, uptime, or model behavior could impact product economics and performance.

Accounting

Judgemental items
Derivative liabilities and embedded derivatives (ASC 815/810)

Derivatives are recorded at fair value at issuance and remeasured each period, with changes recognized in income/expense, affecting reported net loss volatility.

Impact: Other income/expense volatility; balance sheet liability swings

Convertible note conversions treated as debt extinguishments

When notes with bifurcated derivatives convert, gains/losses are recognized based on the fair value of shares issued versus book value of debt.

Impact: Non-operating gains/losses can distort operating performance trends

Stock-based compensation valuation (ASC 718)

Option fair values depend on Black-Scholes inputs and expense timing depends on vesting, impacting operating expenses.

Impact: Operating expense level and comparability across periods

Publicly listed companies with a comparable business focus.

Last updated: 11/08/2026