10-Q: IMA Tech Q2 2026: Revenue Surges, Going Concern Doubt Lingers

IMA Tech reported a significant revenue increase for the quarter ended October 31, 2025, but faces substantial doubt about its ability to continue as a going concern due to accumulated losses and low cash reserves.

Summary

• Revenue for the three months ended October 31, 2025, increased to $65,726, a significant rise from $10,000 in the prior year period.
• Revenue for the six months ended October 31, 2025, increased to $70,126, up from $14,700 in the prior year period.
• Net loss for the three months ended October 31, 2025, decreased to $1,937, compared to a loss of $12,856 in the prior year period.
• Net loss for the six months ended October 31, 2025, decreased to $22,799, compared to a loss of $29,976 in the prior year period.
• The company reported an accumulated deficit of $105,736 as of October 31, 2025.
• Cash balance significantly decreased to $598 as of October 31, 2025, from $4,500 as of April 30, 2025.
• The company has a negative working capital of $252,233 as of October 31, 2025.
• Management concluded that disclosure controls and procedures were not effective as of October 31, 2025.
• 2,500,000 restricted common shares held by Liliia Havrykh, President, CEO, Treasurer, Secretary, and Director, were returned to the company and cancelled for no consideration during the six months ended October 31, 2025.

Sentiment

Score: 3

Explanation: While revenue growth and reduced net loss are positive, the critically low cash balance, significant negative working capital, explicit going concern doubt, and ineffective disclosure controls present substantial financial and operational challenges, leading to a very cautious outlook.

Positives

• Significant revenue growth, with three-month revenue increasing over 550% year-over-year to $65,726, driven by overall company growth, an increased customer base, and website improvements.
• Reduced net loss for both the three-month ($1,937 vs $12,856) and six-month ($22,799 vs $29,976) periods compared to the prior year, indicating improved operational efficiency relative to revenue growth.
• The company's business model centers on developing and operating a website featuring digital avatars, leveraging AI for image/video generation and a specialized database, positioning it in a growing technology sector.
• Strategic focus on continuous investment in research and development to improve AI avatar capabilities, enhancing natural language processing (NLP), machine learning algorithms, and data analytics.
• Commitment to delivering exceptional customer experiences and positioning AI avatars as a cost-saving and time-efficient solution for customers.

Negatives

• Substantial doubt exists about the company's ability to continue as a going concern due to an accumulated deficit of $105,736 and anticipated future losses.
• The cash balance is critically low at $598 as of October 31, 2025, representing a significant decrease from $4,500 on April 30, 2025.
• The company reported a negative working capital of $252,233 as of October 31, 2025, indicating severe short-term liquidity issues.
• Management concluded that disclosure controls and procedures were not effective as of October 31, 2025, raising concerns about financial reporting reliability.
• Heavy reliance on loans from related parties, specifically CEO Liliia Havrykh, totaling $273,518 as of October 31, 2025, for operational funding.
• The company currently has no employees, with the board and executive officer not classified as employees, which could pose operational and scalability challenges.

Risks

• Going Concern Risk: Substantial doubt exists about the company's ability to operate as a going concern, dependent on generating profitable operations or securing additional funding.
• Funding Risk: The company relies on available cash, loans from directors, and/or a private offering of Common Stock to finance operational expenses for the next twelve months.
• Regulatory Compliance Risk: Subject to various federal, state, and international laws concerning privacy, data protection, internet operations, content, advertising, and anti-corruption, with potential for increased compliance costs and regulatory scrutiny.
• Operational Risk (No Employees): The company operates without any classified employees, which may impact its ability to sustain operations, scale, and manage growth effectively.
• Internal Control Weakness: Disclosure controls and procedures were deemed not effective, indicating a material weakness that could affect the accuracy and timeliness of financial reporting.

Future Outlook

Management plans to finance operational expenses for the next twelve months using available cash on hand, loans from directors, and/or a private offering of Common Stock. The company aims to continuously invest in research and development to improve AI avatar capabilities, enhance natural language processing, machine learning algorithms, and data analytics. Strategic priorities include delivering exceptional customer experiences, positioning AI avatars as a cost-saving solution, developing a comprehensive marketing strategy, fostering innovation, and prioritizing customer data security and privacy.

Management Comments

• The financial statements contain all material adjustments, consisting only of normal recurring adjustments, considered necessary to present fairly the financial condition, results of operations, and cash flows of the Company for the interim periods presented.
• Management plans to finance operational expenses for the next twelve months by using available cash on hand, as well as loans from directors and/or a private offering of Common Stock.
• Our management is responsible for establishing and maintaining a system of disclosure controls and procedures... designed to ensure that information required to be disclosed by us... is recorded, processed, summarized and reported, within the time periods specified in the Commissions rules and forms.
• Based on that evaluation, our management concluded that our disclosure controls and procedures were not effective as of such date to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms.
• I, Liliia Havrykh, certify that... Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made... not misleading... the financial statements... fairly present in all material respects the financial condition, results of operations and cash flows of the registrant...

Industry Context

IMA Tech operates in the rapidly evolving AI and digital avatar industry, focusing on creating immersive experiences through AI-driven avatars for image and video generation. The company's strategy aligns with broader industry trends emphasizing AI integration for customer interaction, efficiency, and personalized content delivery. The market for AI-powered solutions and digital personas is growing, driven by demand for automation, enhanced user engagement, and multilingual support in various industries.

Comparison to Industry Standards

• The filing does not provide specific comparable companies, projects, or results to assess against global benchmarks.

Corporate Governance

Legal Proceedings

• No legal proceedings are pending, threatened, or contemplated against the company as of October 31, 2025.

Related Party Transactions

• Liliia Havrykh, President, Chief Executive Officer, Treasurer, Secretary, and Director, advanced $273,518 to the Company as of October 31, 2025.
• The loan agreement with Liliia Havrykh has been amended multiple times, most recently on December 16, 2024, to increase the loan amount to $300,000.
• The loan is interest-free, for working capital purposes, and has a maturity date of March 29, 2028, with no fixed payment terms.
• Subsequent to October 31, 2025, Liliia Havrykh advanced an additional $3,250 to pay operating expenses.

Stakeholder Impact

• Shareholders: Potential for significant dilution if a private offering of common stock is pursued to raise capital. The explicit going concern doubt poses a substantial risk to investment value.
• Creditors: The company's critically low cash balance, negative working capital, and reliance on related party loans indicate a high risk for other creditors.
• Management/Directors: Liliia Havrykh is a primary financier, indicating significant personal financial exposure and potential conflicts of interest.
• Customers: Continued development of AI avatars and website improvements aim to enhance customer experience and service delivery, but the company's financial instability could impact long-term service continuity.

Next Steps

• Generate profitable operations to alleviate going concern doubt.
• Secure required funding through director loans and/or a private offering of Common Stock.
• Continuously invest in research and development to improve AI avatar capabilities, including NLP, machine learning, and data analytics.
• Enhance customer experiences and position AI avatars as a cost-saving and time-efficient solution.
• Develop and execute a comprehensive marketing and branding strategy.
• Prioritize the security and privacy of customer data.
• Address and remediate the ineffective disclosure controls and procedures.

Key Dates

Recommendation

Despite revenue growth and a reduced net loss, IMA Tech faces severe financial instability, evidenced by a critically low cash balance of $598, a substantial negative working capital of $252,233, and explicit 'going concern' doubt. The company's heavy reliance on interest-free loans from its CEO, Liliia Havrykh, for operational funding is unsustainable and indicates a lack of independent financing. Furthermore, the disclosure that management's controls and procedures were 'not effective' as of October 31, 2025, signals significant corporate governance and reporting risks. The absence of employees and the need for a potential private offering of common stock, which could lead to substantial dilution, further compound the risks. Given these fundamental weaknesses and the high probability of continued financial distress, a 'strong sell' recommendation is warranted.

Keywords

AI avatars, digital avatars, artificial intelligence, SEC filing, 10-Q, financial results, going concern, software development, corporate governance, startup, Wyoming corporation