Quarta‑Rad revenue nearly doubles on AI pivot; cash burn, related‑party risks raise red flags

Quarta-Rad, Inc. (PINK: QURT) - Quarterly snapshot (period ended June 30, 2025)

Here's what's happening inside the company in plain terms - key facts, positives and red flags from the June 30, 2025 Form 10‑Q.

Headline metrics

* Reported total assets: $370,127 (June 30, 2025) vs $577,814 (Dec 31, 2024).
* Cash on hand: $29,563 (June 30, 2025) vs $63,021 (Dec 31, 2024).
* Total liabilities: $250,032 (June 30, 2025).
* Stockholders' equity: $120,095 (June 30, 2025).
* Shares outstanding: 15,899,483 (as of Aug 14, 2025).

Income statement - key numbers

* Total sales, net (six months ended June 30, 2025): $100,217 vs $51,086 (six months ended June 30, 2024) - +96.17%.
* Gross profit (six months): $36,368 vs $22,413.
* Operating expenses (six months): $212,833 vs $158,913.
* Net loss (six months): $(149,504) vs $(153,995) - modest improvement of $4,491 (2.92%).
* Net loss (three months ended June 30, 2025): $(72,095) vs $(62,344) - worse quarter-over-quarter.
* Loss per share (six months): $(0.01).

What's driving changes

* Sellavir (AI / CenterEye call‑center product) produced most of the revenue in 2025: Sellavir revenue $95,000 (six months) vs $0 in prior year; Quarta‑Rad product sales dropped to $5,217 (six months).
* Stock‑based compensation (225,000 restricted shares issued) added significant non‑cash expense: $92,761 expensed in the six‑month period (and $55,656 in the quarter).
* Related‑party financing and receivables are material: notes receivable - related party, net $253,575; interest receivable - related party $52,208. Company paused recognizing accrued interest as of March 31, 2025.

Positives

* Revenue nearly doubled year‑over‑year (six months) to $100,217, driven by Sellavir service revenue and initial traction for CenterEye.
* Gross profit increased in absolute terms to $36,368 despite lower Quarta‑Rad product sales.
* Payable - related parties decreased (271,326 to 147,132), reducing some short‑term related‑party liabilities.

Negatives / Risks

* Recurring operating losses and cash burn: net loss $(149,504) for six months and cash balance down to $29,563; operating cash used $(33,458) for the period. Company states going concern doubts.
* Working capital deficit: management reports a working capital deficit of $(214,295).
* Heavy dependence on related parties and single customers: one selling platform accounted for 100% of accounts receivable at June 30, 2025; material related‑party loans, intercompany transactions and assignment of notes to the CEO.
* Rising operating expenses driven by stock‑based compensation and G&A: operating expenses increased to $212,833 (six months).
* Control weaknesses: company disclosed material weaknesses in internal control over financial reporting (segregation of duties, technical accounting expertise and entity‑level controls).
* Conservative recognition changes: accrued interest on certain related‑party notes stopped being recognized as of March 31, 2025 - adds collection uncertainty.

Operational notes & management plans

* Company is shifting from Geiger counter sales to AI services (Sellavir / CenterEye) and sees early traction in Japan; Sellavir accounted for almost all new revenue in 2025.
* Management is exploring a spin‑off of current operations and expects the majority shareholder to continue funding operations in the near term.
* No long‑term bank financing; no material capex plans; marketing and software development budgets planned ($25k-$75k marketing; pilot/partnership spend ~ $20k).

Bottom line

* The narrative: revenue growth is encouraging and driven by Sellavir's pivot to AI software, but the company still burns cash, runs recurring losses and relies heavily on related‑party assets and funding. Material internal control weaknesses and concentration risks amplify execution and financial risk. Near‑term survival depends on shareholder funding, successful monetization of CenterEye, and remediation of governance and collection issues.

Documents referenced: Quarta‑Rad, Inc. Form 10‑Q for quarter ended June 30, 2025 (filed Aug 14, 2025).