10-K: IMA Tech Reports FY25 Loss Amid Growth in AI Avatar Market

IMA Tech, an AI-driven digital avatar company, reported a net loss of $55,071 for fiscal year 2025 despite significant revenue growth, facing substantial doubt about its going concern status.

Summary

• IMA Tech, formed on March 29, 2023, specializes in developing and deploying AI-driven digital avatars for various industries including education, marketing, banking, and science.
• The company launched its website on April 1, 2024, providing API access for users to generate and download videos with customizable avatars in up to 40 languages.
• Total revenue for the fiscal year ended April 30, 2025, increased to $55,374, up from $10,800 in the prior fiscal year.
• Operating expenses significantly rose to $110,445 in FY2025 from $38,635 in FY2024, driven by professional fees, advertising, marketing, and full-year amortization of intangible assets.
• The company reported a net loss of $55,071 for FY2025, an increase from a net loss of $27,835 in FY2024.
• As of April 30, 2025, current assets stood at $9,400, with total liabilities at $267,297, and an accumulated deficit of $82,937.
• Auditors expressed a "going concern" opinion, highlighting substantial doubt about the company's ability to continue operations due to recurring net losses and anticipated future losses.
• The company's operations are primarily funded by loans from its President, Liliia Havrykh, with an aggregate limit of $300,000.
• IMA Tech operates with a single employee, Liliia Havrykh, who serves as President, CEO, Treasurer, Secretary, and Director, and works without remuneration until sufficient revenues are achieved.
• Management identified material weaknesses in internal control over financial reporting, including an inadequate control structure, lack of segregation of duties, insufficient accounting resources, and a lack of appropriate IT controls.

Sentiment

Score: 3

Explanation: While revenue growth is positive, the company faces significant financial distress, evidenced by increasing net losses, a growing accumulated deficit, and a 'going concern' audit opinion. Reliance on related-party loans and material weaknesses in internal controls indicate high operational and financial risk. The early stage of operations and intense competition further temper optimism.

Positives

• Total revenue saw significant growth, increasing from $10,800 in FY2024 to $55,374 in FY2025.
• The company successfully launched its website and API on April 1, 2024, offering advanced avatar technology with multi-language support.
• Management believes that current loans from the President, totaling up to $300,000, will be sufficient to fund operations for the next 12 months.
• A clear business strategy is in place, focusing on leveraging AI avatars to simplify customer requests, reduce costs, and enhance personalized content delivery.

Negatives

• The company reported an increased net loss of $55,071 for FY2025, up from $27,835 in FY2024.
• An accumulated deficit of $82,937 as of April 30, 2025, indicates ongoing financial losses.
• Auditors issued a "going concern" opinion, raising substantial doubt about the company's ability to continue operations.
• Cash used in operating activities increased to $89,744 in FY2025, compared to $75,419 provided by operating activities in FY2024.
• The company is heavily reliant on related-party loans from its President for operational funding.
• Material weaknesses in internal control over financial reporting were identified, including an inadequate control structure, lack of segregation of duties, and insufficient accounting resources due to having only one employee.
• The aggregate market value of common stock held by non-affiliates was $0 as of April 30, 2025, and the common stock is not currently traded on any exchange.

Risks

• The company is at a very early operational stage and is subject to substantial risks inherent in establishing a new venture, with no guarantee of success.
• There is a risk that the company may be unable to raise the additional capital needed to finance its growth and expansion plans.
• The company faces intense industry competition from entities such as Humanizing Technologies, Creaitor.ai, and Synthesys, which could adversely affect market share and profitability.
• Lack of widespread market familiarity and understanding of digital avatars may impede adoption rates and result in resistance from potential clients.
• Developing and maintaining digital avatars entails significant technical challenges and ongoing updates, with risks of system failures, security breaches, and limitations in natural language processing capabilities.
• Failure to effectively manage growth could materially harm the business, financial condition, and results of operations.
• The company may not successfully identify emerging trends and growth opportunities in the business sector, potentially leading to missed opportunities.
• The longevity of the business depends on its ability to continuously enhance and effectively market the functionality of its solutions to remain competitive and meet evolving customer needs.

Future Outlook

The company envisions expanding its website and incorporating more advanced technologies to broaden the possibilities for avatars, aiming to simplify and improve the creation of educational and business materials. It plans to introduce news and updates on its website regarding ongoing research and future expansion, including full customization for avatars to demonstrate processes. Management believes that loans from the President, up to $300,000, will be sufficient for operations for the next 12 months and expects to continue generating revenue. The company will consider raising additional funds through sales of equity, debt, and convertible securities if deemed necessary.

Management Comments

• Our core objective is to provide customers with a more immersive experience by simplifying the process of fulfilling their requests using AI-driven avatars.
• We believe that our website has the potential to transform the way people learn, work, and communicate in the digital age.
• Management has plans to seek additional capital through a private placement and public offering of its Common Stock, if necessary.
• We believe that such loans [from Liliia Havrykh] will be sufficient for us to continue operating for the next 12 months.
• As the Company's expenses are relatively stable, unless additional websites are rolled out, the Company believes it can continue its present operations with projected revenues together with proceeds from a private offering.
• The Company will consider raising additional funds through sales of equity, debt and convertible securities, if it is deemed necessary.
• The Company has no intention in investing in short-term or long-term discretionary financial programs of any kind.
• Management is responsible for establishing and maintaining adequate internal control over financial reporting.
• The Company has only one employee therefore no reviews are in place to ensure adequate financial reporting.

Industry Context

The company operates in the rapidly evolving digital avatar and artificial intelligence technology market, targeting diverse sectors such as education, marketing, banking, and science. This market is characterized by intense competition, with identified competitors including Humanizing Technologies, Creaitor.ai, and Synthesys. A key challenge for the industry, and for IMA Tech specifically, is the relatively new concept of digital avatars, which requires ongoing education to increase market familiarity and adoption rates among potential business clients. Success in this environment hinges on continuous innovation, particularly in enhancing natural language processing, machine learning algorithms, and data analytics to deliver highly realistic and adaptable avatar solutions.

Comparison to Industry Standards

• The company is an early-stage venture with a single employee and limited financial resources, which is not directly comparable to established, larger industry players like Humanizing Technologies, Creaitor.ai, and Synthesys.
• The company's aggregate market value of common stock held by non-affiliates is $0, indicating a very nascent stage and lack of public market liquidity, unlike more mature companies in the AI avatar space.
• The identified material weaknesses in internal control over financial reporting, such as inadequate control structure, lack of segregation of duties, and insufficient accounting resources, fall significantly below the best practices and regulatory expectations for public companies in any industry.

Corporate Governance

Legal Proceedings

• No legal proceedings are known to be pending, threatened, or contemplated against the company.

Related Party Transactions

• As of April 30, 2025, the CEO and sole director, Liliia Havrykh, had advanced $252,798 to the company.
• During the year ended April 30, 2025, $58,793 was advanced by Ms. Havrykh and $928 was repaid.
• The loan is for working capital purposes, unsecured, interest-free, and has a maturity date of March 29, 2028.
• The loan agreement has been amended multiple times, most recently on December 16, 2024, to increase the aggregate loan amount to $300,000.

Stakeholder Impact

• Shareholders face significant risk due to recurring net losses, the 'going concern' audit opinion, heavy reliance on related-party funding, and the absence of a public trading market for shares, which implies high illiquidity and speculative investment.
• The sole employee (CEO) is working without remuneration until sufficient revenues are achieved, indicating high personal commitment but also a lack of diversified human capital and internal control segregation.
• Customers may benefit from enhanced immersive experiences through AI avatars, but potential risks exist due to the company's early stage, intense competition, and the identified weaknesses in technical infrastructure and internal controls that could lead to service disruptions or security issues.

Next Steps

• Continuously invest in research and development to improve AI avatars and their capabilities, focusing on natural language processing, machine learning algorithms, and data analytics.
• Explore partnerships or acquisitions to augment the technology stack and expand offerings.
• Continuously gather customer feedback and leverage AI-powered sentiment analysis to understand and improve customer satisfaction levels.
• Conduct regular cost analyses to optimize operations and explore automation opportunities to further enhance efficiency.
• Develop a comprehensive marketing and branding strategy to promote AI avatars and increase brand awareness.
• Monitor technological advancements and industry trends to identify new opportunities for improvement and expansion.
• Prioritize the security and privacy of customer data by implementing robust data protection measures and adhering to industry regulations.
• Monitor and analyze relevant metrics such as customer satisfaction, revenue growth, market share, and cost savings.
• Seek additional capital through a private placement and public offering of Common Stock, if necessary.
• Consider raising additional funds through sales of equity, debt, and convertible securities.
• Expand the website and incorporate more advanced technologies to broaden the range of possibilities for avatars.
• Introduce news and updates about the company on the website, providing insights into ongoing research and future expansion plans.
• Introduce full customization for avatars to demonstrate various processes and instructions.

Key Dates

Recommendation

The company is an early-stage venture with significant financial distress, evidenced by recurring net losses, a growing accumulated deficit, and a 'going concern' audit opinion. It relies heavily on related-party financing and has identified material weaknesses in internal controls. There is no public market for its shares, making any investment highly illiquid and speculative. The high risks and lack of a clear path to profitability or market liquidity make it an unfavorable investment.

Keywords

AI avatars, digital avatars, artificial intelligence, machine learning, virtual consultancy, SEC filing, 10-K, financial reporting, startup, emerging growth company, corporate governance, risk management