10-K: Quarta-Rad Shifts to AI, Faces Going Concern & Control Issues

Quarta-Rad, Inc. is transitioning to AI software with its Sellavir subsidiary, but faces significant financial challenges, a going concern opinion, and material internal control weaknesses.

Summary

• Quarta-Rad, Inc. is winding down its legacy radiation detection equipment business to focus on its wholly-owned subsidiary, Sellavir, Inc., which develops AI-driven call center software, CenterEye.
• The company received a 'going concern' opinion from its auditors due to an accumulated deficit of $428,385, a net loss of $256,929 for 2025, and insufficient cash ($72,909) to cover projected operating expenses for the next 12 months.
• Sellavir's revenue significantly increased by 487.50% to $235,000 in 2025, primarily from a single related-party customer, Star Systems Corporation, which accounted for 96% of consolidated revenue.
• The company identified material weaknesses in its internal control over financial reporting, including an ineffective control environment, lack of an independent audit committee, insufficient segregation of duties, and inadequate procedures for related-party transactions.
• In January 2026, Sellavir entered into an Independent Software Vendor Partner Agreement with Genesys Cloud Services, Inc. to integrate its CenterEye platform.
• Management believes anticipated cash flows from Sellavir contracts and the Genesys partnership will fund operations, but plans to raise additional capital through stock sales or loans from its majority shareholder if needed, though the latter is an oral, non-binding agreement.

Sentiment

Score: 2

Explanation: StockSavvy.ai views this filing with very low sentiment due to the explicit 'going concern' warning, increasing net losses, critical internal control weaknesses, and heavy reliance on related-party transactions for revenue and potential financing, all of which present substantial risks to investors.

Positives

• Sellavir's revenue increased by 487.50% to $235,000 in 2025, demonstrating growth in the new AI software segment.
• The company secured an Independent Software Vendor Partner Agreement with Genesys Cloud Services, Inc. in January 2026, a significant step for commercialization and integration into a leading enterprise call center platform.
• The working capital deficit improved from $(260,907) in 2024 to $(216,617) in 2025.

Negatives

• The company received a 'going concern' opinion from its independent auditors, indicating substantial doubt about its ability to continue operations.
• Net loss increased by 18.53% to $256,929 in 2025, compared to $216,755 in 2024.
• The accumulated deficit grew to $428,385 as of December 31, 2025.
• Cash on hand of $72,909 as of December 31, 2025, is insufficient to fund projected operating expenses for the next 12 months.
• Approximately 96% of consolidated revenue in 2025 was derived from a single related-party customer, Star Systems Corporation, controlled by the CEO.
• The company has no full-time employees, and its sole executive officer (CEO) devotes only approximately 10 hours per week to the business.
• Principal payments on related-party loans to a Thai corporation are deferred until April 2027, and the company ceased recognizing accrued interest income on one of these loans as of March 31, 2025, raising recoverability concerns.

Risks

• Received a going concern opinion from independent auditors, raising substantial doubt about the ability to continue operations.
• Identified material weaknesses in internal control over financial reporting, including an ineffective control environment, lack of an independent audit committee, insufficient segregation of duties, and inadequate procedures for identifying related-party transactions.
• Limited operating history in the new AI software business and recurring losses since inception, with no assurance of achieving or sustaining profitability.
• May need to raise additional capital, which may not be available on acceptable terms or at all, potentially leading to substantial dilution for existing stockholders.
• Undergoing a fundamental business transition with significant execution risk, including developing new products, entering new markets, and competing against established players.
• Operations depend entirely on one individual, CEO Victor Shvetsky, and the loss of his services or insufficient time commitment could severely disrupt the business.
• Lack of full-time employees may limit the ability to develop products, compete effectively, and grow the business.
• Substantially all revenue is derived from a single related-party customer (Star Systems Corporation), making operations highly dependent on this relationship and posing conflict of interest risks.
• May not be able to successfully develop, market, or achieve market acceptance of the CenterEye platform or other software products.
• Potential inability to successfully integrate CenterEye with critical third-party platforms like Genesys Cloud, NICE CXone, or Avaya.
• Operates in a highly competitive market with many competitors possessing significantly greater resources.
• Majority shareholder and sole executive officer controls approximately 77% of outstanding shares, allowing significant influence over corporate decisions that may conflict with minority stockholder interests.
• Engages in significant transactions with related parties, which may involve conflicts of interest and may not reflect market terms.
• Uncertain recoverability of loans extended to a related-party Thai corporation, with deferred principal payments and cessation of interest recognition on one loan.
• Common stock traded on the OTC market, which may limit liquidity and result in volatile pricing, and may be considered a penny stock.
• Extremely thin public float (approximately 4% of shares outstanding) may result in significant price volatility and susceptibility to market manipulation.
• Does not expect to pay dividends for the foreseeable future, requiring investors to rely solely on price appreciation for any return.
• Subject to foreign currency risk due to notes receivable denominated in Thai Baht.
• Does not currently hold any patents, trademarks, or other registered intellectual property, potentially limiting protection of proprietary technology.

Future Outlook

The company's future outlook is centered on the continued development and commercialization of Sellavir's AI-driven software solutions, particularly the CenterEye platform. It expects substantially all future operations and revenue growth to be driven by Sellavir, with a focus on integration with leading call center software ecosystems like Genesys Cloud, NICE CXone, and Avaya. Management intends to generate revenue through software licensing, service agreements, and strategic partnerships, and will pursue additional client engagements and financing to support product development and commercialization. The legacy radiation detection business is not expected to generate material revenues going forward.

Management Comments

• Management believes that anticipated cash flows generated from existing development contracts for the Sellavir CenterEye platform, alongside the recent integration partnership with Genesys Cloud, will provide the primary capital necessary to fund ongoing operations.
• To the extent revenue realization from new software contracts is delayed, the company intends to bridge the gap by raising additional capital from investors through the sale of common stock or relying on loans or advances from its majority shareholder.
• Management believes that related-party transactions were conducted on terms comparable to those that could be obtained from unrelated third parties, despite the lack of formal policies or an independent audit committee for review.

Industry Context

StockSavvy.ai notes that Quarta-Rad's pivot to AI-driven call center software positions it in a rapidly growing, yet highly competitive, market. The industry is seeing a significant shift towards cloud-hosted platforms and advanced analytics for customer engagement. While the Genesys Cloud partnership is a crucial first step, established players like Verint, NICE, and Calabrio, along with emerging AI startups, possess significantly greater financial and technical resources. The company's success will hinge on its ability to differentiate CenterEye, secure further integrations, and scale operations effectively against well-funded competitors, a challenging prospect given its limited resources and reliance on a single related-party customer.

Comparison to Industry Standards

• The company's reliance on a single related-party customer for 96% of its Sellavir revenue is significantly higher than industry standards for diversified software companies, which typically aim for a broad customer base to mitigate concentration risk. For example, a mature SaaS company like Salesforce or Adobe would have thousands of customers, with no single customer representing more than a small percentage of total revenue.
• The absence of full-time employees and the part-time commitment of its CEO (10 hours/week) is highly unusual for a company attempting to develop and commercialize complex AI software, especially when compared to industry leaders or even well-funded startups in the AI/call center space that typically have dedicated, full-time engineering, sales, and support teams.
• The identified material weaknesses in internal control over financial reporting, including the lack of an independent audit committee and insufficient segregation of duties, fall significantly below corporate governance best practices and SEC compliance expectations for publicly traded companies, regardless of size. Larger peers like Genesys or NICE would have robust, multi-layered internal control frameworks and independent oversight.
• The company's lack of registered intellectual property (patents, trademarks) for its core AI technology is a notable weakness compared to competitors in the software industry, where IP protection is crucial for competitive advantage and valuation. Companies like Google (with its AI patents) or even smaller tech firms actively build extensive patent portfolios.

Management Changes

Corporate Governance

Related Party Transactions

• Sellavir generated $235,000 in software development revenue from Star Systems Corporation in 2025, a Japanese entity owned and controlled by CEO Victor Shvetsky, representing 96% of consolidated revenue.
• The company owes Star Systems Corporation $42,502 as of December 31, 2025, for inventory purchases, due on demand without interest.
• The company owes Quarta-Rad, Ltd. (owned by a former minority shareholder) $91,850 as of December 31, 2025, primarily for a software development contract.
• CEO Victor Shvetsky was compensated $32,000 in 2025 and 2024, with $117,000 accrued as of December 31, 2025.
• A note receivable of $164,375 and accrued interest of $35,000 from a related Thai corporation was assigned to CEO Victor Shvetsky in March 2025 to satisfy certain obligations.
• CEO Victor Shvetsky advanced funds for operations and is owed $21,076 as of December 31, 2025, due on demand without interest.
• Sellavir entered into two loan agreements with a related Thai corporation in March and May 2023, for land purchase, with an outstanding principal of approximately $271,183 as of December 31, 2025. The CEO is a minority shareholder and officer of the Thai entity.
• Dmitry Choulindin, the CEO's half-brother and a newly appointed director, received $22,400 for consulting services in 2024.

Stakeholder Impact

• **Shareholders**: Face substantial risk of investment loss due to the 'going concern' warning, recurring losses, and potential dilution from future capital raises. Concentration of control by the majority shareholder may limit influence of minority shareholders.
• **Employees (Officers/Contractors)**: The company has no full-time employees, relying on part-time officers and independent contractors. This structure may limit growth opportunities and job security.
• **Customers**: Customers of the new CenterEye platform may face risks related to the company's financial stability, limited human resources for development and support, and the uncertainty of successful integration with major platforms.
• **Creditors**: Face elevated risk due to the company's 'going concern' status, accumulated deficit, and reliance on related-party financing. The recoverability of loans to the Thai corporation is also uncertain.
• **Suppliers**: May face payment risks given the company's liquidity challenges and working capital deficit.

Next Steps

• Continue development of Sellavir's CenterEye platform.
• Expand customer relationships and strategic partnerships for Sellavir.
• Secure additional financing to support product development and commercialization.
• Actively pursue additional client engagements for AI-driven contact center solutions.
• Integrate proprietary contact center technologies into the Genesys Cloud platform.
• Seek to integrate with other major cloud-based contact center platforms, including NICE CXone and Avaya.
• Remediate identified material weaknesses in internal control over financial reporting.

Key Dates

Recommendation

The filing presents a highly concerning financial picture, marked by a 'going concern' opinion from auditors, increasing net losses, and insufficient cash to sustain operations. The company's pivot to AI software is nascent and heavily reliant on a single related-party customer, introducing significant concentration and conflict-of-interest risks. Material weaknesses in internal controls and corporate governance further undermine investor confidence. While the Genesys partnership offers a glimmer of potential, the fundamental financial instability and operational deficiencies make this a high-risk investment with a strong likelihood of further share price decline.

Keywords

AI software, call center technology, CenterEye, Genesys Cloud, SEC 10-K, going concern, internal controls, related party transactions, software development, OTC market, Quarta-Rad, Sellavir