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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ quarterly REPORT under SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: June 30, 2025

☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to ______

Commission File No. 000-55964

Quarta-Rad, Inc.

(Exact Name of Registrant as Specified in its Charter)

Delaware		45-4232089
(State or other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

1201 N. Orange St., Suite 700
Wilmington, DE		19801
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s telephone number, including area code: 732-887-8511

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class		Trading Symbol		Name of Each Exchange on Which Registered
Common Stock, par value $0.0001 per share		QURT		OTC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§230.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes ☐ No ☒

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated file,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐	Accelerated filer ☐

Non-accelerated filer ☐ (Do not check if a smaller reporting company)	Smaller reporting company ☒

Emerging Growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section l2, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

Yes ☐ No ☐

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: As of August 14, 2025, the number of shares outstanding of the issuer’s sole class of common stock, $0.0001 par value per share, is 15,899,483.

table of contents

Part I – FINANCIAL INFORMATION		3
Item 1. Financial Statements		3
Condensed and Consolidated Balance Sheets		3
Condensed and Consolidated Statements of Operations		4
Condensed and Consolidated Statements of Stockholders’ Equity		5
Condensed and Consolidated Statements of Cash Flows		7
Notes to the Condensed and Consolidated Unaudited Financial Statements		8
Item 2. Management’s Discussion and Analysis of Financial Conditions and Results of Operations		15
Item 3. Quantitative and Qualitative Disclosures about Market Risk		22
Item 4. Controls and Procedures		23
PART II — OTHER INFORMATION		24
Item 1. Legal Proceedings		24
Item 1A. Risk Factors		24
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		24
Item 3. Defaults Upon Senior Securities		24
Item 4. Mine Safety Disclosures		24
Item 5. Other Information		24
Item 6. Exhibits		24
Signatures		25

QUARTA-RAD, INC. AND SUBSIDIARIES

CONDENSED AND CONSOLIDATED BALANCE SHEETS

unaudited

	June 30, 2025			December 31, 2024
	As of
	June 30, 2025			December 31, 2024
ASSETS
Current Assets
Cash	$	29,563		$	63,021
Accounts receivable		5,573			6,233
Marketable securities, trading		1			5
Notes receivable - related party - current portion		-			67,750
Inventory		600			3,060
Total Current Assets		35,737			140,069

Fixed Assets, Net		370			770

Other Assets
Notes receivable - related party, net of current portion and discount of $8,818 and $10,422 at June 30, 2025 and December 31, 2024, respectively		253,575			334,143
Interest receivable - related party		52,208			76,307
Trade receivable		28,237			26,525
Total Other Assets		334,020			436,975

TOTAL ASSETS	$	370,127		$	577,814

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current Liabilities
Accounts payable and accrued expenses	$	102,900		$	129,650
Payable - related parties		147,132			271,326
Total Liabilities		250,032			400,976

Commitments and Contingencies - Note 8		-			-

Stockholders’ Equity
Common stock: authorized 50,000,000 common shares, $0.0001 par value 15,899,483 and 15,674,483 were issued and outstanding on June 30, 2025 and December 31, 2024, respectively		1,591			1,568
Additional paid-in capital		439,464			346,726
Accumulated deficit		(320,960	)		(171,456	)
Total Stockholders’ Equity		120,095			176,838

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	370,127		$	577,814

See accompanying notes to unaudited condensed and consolidated financial statements.

QUARTA-RAD, INC. AND SUBSIDIARIES

CONDENSED AND CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

	For the three months ended June 30, 2025			For the three months ended June 30, 2024			For the six months ended June 30, 2025			For the six months ended June 30, 2024

Sales -Quarta Rad, Inc., net	$	2,330		$	29,044		$	5,217		$	51,086
Sales - Sellavir, Inc., net - related party		65,000			-			95,000			-

Total sales, net		67,330			29,044			100,217			51,086

Cost of goods sold - Quarta-Rad, Inc.		486			18,424			2,835			28,673
Cost of goods sold - Sellavir Inc.		29,116			-			61,014			-
Cost of goods sold		29,116			-			61,014			-

Gross profit		37,728			10,620			36,368			22,413

Expenses:
General and administrative		90,809			53,725			151,946			99,567
Professional and consulting fees		33,487			30,837			60,887			59,346
Operating expenses		124,296			84,562			212,833			158,913

Net loss from operations		(86,568	)		(73,942	)		(176,465	)		(136,500	)
Other income - interest and dividends		2			1			6			2
Other income (expense) - foreign currency translation gain/(loss)		13,670			(2,427	)		14,453			(16,110	)
Other income - interest - related party		802			11,703			12,505			23,406
Other expense - loss on loan modification		-			2,321			-			(11,469	)
Other income - unrealized loss on investments		(1	)		-			(3	)		(13,324	)
Net loss before provision for income taxes		(72,095	)		(62,344	)		(149,504	)		(153,995	)

Income tax expense		-			-			-			-

Net loss	$	(72,095	)	$	(62,344	)	$	(149,504	)	$	(153,995	)

Loss per share - basic and diluted	$	-		$	-		$	(0.01	)	$	(0.01	)

Weighted average shares - basic and diluted		15,899,483			15,674,483			15,866,693			15,674,483

See accompanying notes to unaudited and consolidated financial statements.

QUARTA-RAD, INC. AND SUBSIDIARIES

CONDENSED AND CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

For the six months ended June 30, 2025

(Unaudited)

	Shares		Amount		Capital		Deficit			Equity
	Common Stock				Additional Paid-In		Accumulated			Total Stockholders’
	Shares		Amount		Capital		Deficit			Equity
Balance, December 31, 2024		15,674,483	$	1,568	$	346,726	$	(171,456	)	$	176,838
Net loss		-		-		-		(149,504	)		(149,504	)
Stock based compensation		225,000		23		92,738		-			92,761
Balance, June 30, 2025		15,899,483	$	1,591	$	439,464	$	(320,960	)	$	120,095

CONDENSED AND CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

For the six months ended June 30, 2024

(Unaudited)

	Common Stock				Additional Paid-In		Retained Earnings/ Accumulated			Total Stockholders’
	Shares		Amount		Capital		Deficit			Equity
Balance, December 31, 2023		15,674,483	$	1,568	$	346,726	$	45,299		$	393,593
Net loss		-		-		-		(153,995	)		(153,995	)
Balance, June 30, 2024		15,674,483	$	1,568	$	346,726	$	(108,696	)	$	239,598

See accompanying notes to unaudited and consolidated financial statements.

QUARTA-RAD, INC. AND SUBSIDIARIES

CONDENSED AND CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Three Months Ended June 30, 2025

(Unaudited)

	Common Stock				Additional Paid-In		Accumulated			Total Stockholders’
	Shares		Amount		Capital		Deficit			Equity
Balance, March 31, 2025		15,899,483	$	1,591	$	383,808	$	(248,865	)	$	136,534
Net loss		-		-		-		(72,095	)		(72,095	)
Stock based compensation		-		-		55,656		-			55,656
Balance, June 30, 2025		15,899,483	$	1,591	$	439,464	$	(320,960	)	$	120,095

CONDENSED AND CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Three Months Ended June 30, 2024

(Unaudited)

	Common Stock				Additional Paid-In		Retained Earnings/ (Accumulated			Total Stockholders’
	Shares		Amount		Capital		Deficit)			Equity
Balance, March 31, 2024		15,674,483	$	1,568	$	346,726	$	(46,352	)	$	301,942
Balance		15,674,483	$	1,568	$	346,726	$	(46,352	)	$	301,942
Net loss		-		-		-		(62,344	)		(62,344	)
Balance, June 30, 2024		15,674,483	$	1,568	$	346,726	$	(108,696	)	$	239,598
Balance		15,674,483	$	1,568	$	346,726	$	(108,696	)	$	239,598

See accompanying notes to unaudited and consolidated financial statements.

QUARTA-RAD, INC. AND SUBSIDIARIES

CONDENSED AND CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

	For the six months ended June 30, 2025			For the six months ended June 30, 2024

OPERATING ACTIVITIES:
Net loss	$	(149,504	)	$	(153,995	)

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation		400			400
Stock based compensation		92,761			-
Foreign currency translation (income) loss		(14,453	)		16,110
Loss on loan modification		-			11,469
Amortization of note premium		(1,604	)		(1,604	)
Amortization of receivable discount		(1,712	)		(1,712	)
Net unrealized (gain) loss on investments		3			13,324
Deferred income tax		-			(10,907	)
Changes in operating assets and liabilities:
Accounts receivable		660			1,716
Inventory		2,460			22,001
Accrued interest receivable - related party		(10,901	)		(21,802	)
Accounts payable and accrued expenses		8,251			11,356
Related party payable		40,181			79,231
Net cash used by Operating Activities		(33,458	)		(34,413	)

INVESTING ACTIVITIES:
Payments on notes receivable, related party		-			25,522
Net cash provided (used) in Investing Activities		-			25,522

FINANCING ACTIVITIES:
Payments on notes receivable, related party		-			-
Net cash provided by Financing Activities		-			-

Net change in cash		(33,458	)		(8,891	)
Cash, beginning of period		63,021			72,625
Cash, end of period	$	29,563		$	63,734

Supplemental Disclosure of Non-Cash Investing and Financing Activities

Transfer of note receivable - related party at carrying value to officer in settlement of loan payable and accrued expenses:	$	199,375		$	-

Supplemental cash flow information:

Cash paid for interest	$	-		$	-

Cash paid for income taxes	$	-		$	10,907

See accompanying notes to unaudited and consolidated financial statements.

QUARTA-RAD, INC. AND SUBSIDIARIES

Notes to the unaudited Condensed and Consolidated Financial Statements

NOTE 1 - BASIS OF PRESENTATION

The condensed and consolidated balance sheet of Quarta-Rad, Inc. and subsidiaries (the “Company”) as of June 30, 2025, and the statements of operations and changes in stockholders’ equity for the three and six months ended June 30, 2025, and 2024, and the cash flows for the six months ended June 30, 2025, and 2024 have not been audited. However, in the opinion of management, such information includes all adjustments (consisting of normal recurring adjustments), which are necessary to accurately reflect the financial position of the Company as of June 30, 2025, the results of operations and cash flows for the periods ended June 30, 2025, and 2024.

The condensed and consolidated balance sheet as of December 31. 2024 has been derived from audited financial statements. Certain information and notes normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been omitted, although management believes that the disclosures are adequate to make the information presented not misleading. Interim period results are not necessarily indicative of the results to be achieved for an entire year. These condensed and consolidated financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Company’s annual report on Form 10-K for the year ended December 31. 2024.

The Company has experienced recurring operating losses, primarily due to limited revenues. The Company’s current financial conditions and recurring losses raise substantial doubt about its ability to continue as a going concern.

The current shareholder is currently funding operations. The Company has decided to explore plans to distribute the current operations in a spin-off.

NOTE 2 - NATURE OF BUSINESS

The Company distributes detection devices, including but not limited to Geiger counters, to homeowners and interested customers in North America and Europe. The Company targets homebuilders and home renovation contractors. As noted in RISKS AND UNCERTAINTIES, the Company has encountered certain restrictions in securing inventory and has secured a new supplier.

Sellavir has started a video analytics company whose platform empowers organizations to decode videos to develop creative marketing strategies and analysis and call center management solutions through advanced and proprietary technologies using artificial intelligence (“AI”).

Sellavir is now focused on developing CenterEye, a call center software platform that leverages AI and advanced analytics to improve call center operations.

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The consolidated financial statements include the accounts of Quarta-Rad, Inc. and its wholly-owned subsidiary Sellavir, Inc. All significant intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates and Assumptions

The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”) requires management to make estimates and judgments that affect the reported amounts of assets, liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting periods.

QUARTA-RAD, INC. AND SUBSIDIARIES

Notes to the unaudited Condensed and Consolidated Financial Statements

Significant estimates made by management include, among others, provisions for the valuation of related party revenue, and notes receivable. The Company bases its estimates on historical experience, knowledge of current conditions and belief of what could occur in the future considering available information. The Company reviews its estimates on an on-going basis. The actual results experienced by the Company may differ materially and adversely from its estimates. To the extent there are material differences between the estimates and actual results, future results of operations will be affected.

Notes Receivable – related party

Notes Receivable – related party consists of loan agreements entered into by Sellavir discussed in Note 4. Amounts payable marked to value in functional currency at the balance sheet date where the Company records foreign translation gain or loss. The Company’s functional currency is the United States Dollar.

Concentration of Credit Risk

Credit is extended to online platforms and suppliers based on an evaluation of their financial condition, and collateral is generally not required. The Company performs ongoing credit evaluations of its customers and provides an allowance for doubtful accounts as appropriate.

One selling platforms/distributors accounted for 100% of accounts receivable at June 30, 2025, and two selling platforms/distributors accounted for 100% of accounts receivable at December 31. 2024.

Earnings per Share

The Company’s basic earnings per share are calculated by dividing its net income available to common stockholders by the weighted average number of common shares outstanding for the period. The Company’s dilutive earnings per share is calculated by dividing its net income available to common shareholders by the diluted weighted average number of shares outstanding during the period. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. There were no potentially dilutive instruments outstanding during the periods ended June 30, 2025, and 2024.

Fair Value of Financial Instruments

The Company’s financial instruments as defined by Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 825, “Financial Instruments” include cash, trade accounts receivable, and accounts payable and accrued expenses. All instruments, except marketable securities are accounted for on a historical cost basis, which, due to the short maturity of these financial instruments, approximates fair value at June 30, 2025 and December 31. 2024. Marketable securities are level one assets recorded at fair value.

FASB ASC 820 “Fair Value Measurements and Disclosures” defines fair value, establishes a framework for measuring fair value in accordance with U.S. GAAP, and expands disclosures about fair value measurements. ASC 820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

●

Level 1. Observable inputs such as quoted prices in active markets;

QUARTA-RAD, INC. AND SUBSIDIARIES

Notes to the unaudited Condensed and Consolidated Financial Statements

	●	Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

	●	Level 3. Unobservable inputs in which there is little or no market data, which requires the reporting entity to develop its own assumptions.

The Company’s investment securities consist of common and options. Substantially all the Company’s investments are Level 1. The fair market value is based on quoted prices in active markets for identical assets. Financial assets are measured at fair value on a recurring basis. The following table provides information at June 30, 2025, and December 31, 2024 about the Company’s financial assets measured at fair value on a recurring basis.

Values on June 30, 2025:

	Level 1		Level 2		Level 3		Total
Assets at fair value:
Marketable Securities	$	1	$	-	$	-	$	1

Total assets at fair value, June 30, 2025	$	1	$	-	$	-	$	1

Values on December 31. 2024:

	Level 1		Level 2		Level 3		Total
Assets at fair value:
Marketable Securities	$	5	$	-	$	-	$	5

Total assets at fair value, December 31, 2024	$	5	$	-	$	-	$	5

Revenue Recognition

The Company follows guidance from FASB Accounting Standards Codification ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”). The guidance sets forth a five-step revenue recognition model which replaces the prior revenue recognition guidance in its entirety and is intended to eliminate numerous industry-specific pieces of revenue recognition guidance that have historically existed in U.S. GAAP. The underlying principle of the standard is that a business or other organization will recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects what it expects to receive in exchange for the goods or services. The standard also requires more detailed disclosures and provides additional guidance for transactions that were not addressed completely in the prior accounting guidance.

Our principal activities from which we generate our revenue are product sales and consulting services.

Revenue is measured based on consideration specified in a contract with a customer. A contract with a customer exists when we enter into an enforceable contract with a customer. The contract is based on either the acceptance of standard terms and conditions on the websites for e-commerce customers and via telephone with our third-party call center for our print media and direct mail customers, or the execution of terms and conditions contracts with retailers and wholesalers. These contracts define each party’s rights, payment terms and other contractual terms and conditions of the sale. Consideration is typically paid prior to shipment via credit card or check when our products are sold direct to consumers or approximately 30 days from the time control is transferred when sold to wholesalers, distributors and retailers. We apply judgment in determining the customer’s ability and intention to pay, which is based on a variety of factors including the customer’s historical payment experience and, in some circumstances, published credit and financial information pertaining to the customer.

QUARTA-RAD, INC. AND SUBSIDIARIES

Notes to the unaudited Condensed and Consolidated Financial Statements

A performance obligation is a promise in a contract to transfer a distinct product to the customer, which for us is transfer of devices to our customers. Performance obligations promised in a contract are identified based on the goods that will be transferred to the customer that are both capable of being distinct and are distinct in the context of the contract, whereby the transfer of the goods is separately identifiable from other promises in the contract. We have concluded the sale of goods and related shipping and handling are accounted for as the single performance obligation.

The transaction price of a contract is allocated to each distinct performance obligation and recognized as revenue when or as the customer receives the benefit of the performance obligation. The transaction price is determined based on the consideration to which we will be entitled to receive in exchange for transferring goods to the customer. We issue refunds to e-commerce and print media customers, upon request, within 30 days of delivery. We estimate the amount of potential refunds at each reporting period using a portfolio approach of historical data, adjusted for changes in expected customer experience, including seasonality and changes in economic factors. For retailers, distributors and wholesalers, we do not offer a right of return or refund, and revenue is recognized at the time products are shipped to customers. In all cases, judgment is required in estimating these reserves. Actual claims for returns could be materially different from the estimates. There was no reserve for sales returns and allowances at June 30, 2025 and December 31, 2024, respectively.

We recognize revenue when we satisfy a performance obligation in a contract by transferring control over a product to a customer when a product is shipped. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by us from a customer, are excluded from revenue. Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfilment cost and are included in cost of product sales.

We recognize consulting revenue over time as services are performed. Invoiced amounts are determined based on the level of work completed by contractors, measured against predetermined project milestones. These milestones are defined in the client contract and are tied to specific deliverables or stages in the agreed-upon project timeline.

Recent Accounting Pronouncements

We have adopted all recently issued accounting pronouncements. The adoption of the new accounting pronouncements is not anticipated to have a material effect on our operations.

Risks and Uncertainties

RUSSIAN INVASION OF UKRAINE

In February 2022, Russia invaded the nation of Ukraine and certain sanctions and banking restrictions were levied upon Russia. As a result, the Company’s ability to purchase inventory from Russia has been impacted.

The Company is actively monitoring the situation and working closely with their suppliers and logistics companies to mitigate the impact. During October 2022 the Company has encountered additional restrictions in the EU and their ability to continue to sell in the EU was be diminished.

The Company is continuing to expand its Artificial Intelligence business through development of new services and software, and consulting on strategies and implementation, and are in the process of transforming our company from an import heavy revenue entity to AI services revenue becoming the majority of total sales. Due to the constraints with the Quarta Rad related income, additional focus and resources will be utilized by Sellavir Beginning in 2024, Sellavir will strategically focus on harnessing its advanced AI capabilities and extensive experience to innovate within the call center industry. The industry’s evolving landscape, particularly the shift from traditional on-premise solutions to cloud-hosted platforms, presents a unique opportunity for Sellavir to introduce a suite of AI-driven products. The success of call center product, CenterEye, depends on our ability to develop features that meet client needs, keep up with technological advancements, and address any software bugs or security vulnerabilities promptly. There is no guarantee that CenterEye will achieve market acceptance. Failure to gain traction could adversely affect our financial condition and results of operations.

QUARTA-RAD, INC. AND SUBSIDIARIES

Notes to the unaudited Condensed and Consolidated Financial Statements

NOTE 4–NOTE RECEIVABLE – RELATED PARTY

During March 2023, Sellavir entered into a loan agreement with a related Thai Corporation. for the purchase of land and to ultimately build a structure. The Company’s CEO and majority shareholder became the CEO and a minority shareholder in the Thai entity in May 2023. The Thai Corporation will repay Sellavir $9,000,000 Thai Bhat, valued at $261,038, at the time of the loan, which includes a premium of $16,038 plus interest at a rate of 15% per annum. As of January 2024, the note was amended to reduce the interest rate to 10% and for Sellavir to receive 3% of the selling price of the secured property. The Company recorded a loss of $8,188 in connection with this loan modification. The Company marked the note to Thai Bhat, valued at $277,290 and $262,909 recording a gain (loss) on foreign currency translation of $14,453 and $1,837 at June 30, 2025, and December 31, 2024, respectively. The amount of unamortized premium at June 30, 2025 and December 31, 2024 is $8,818 and $10,422, respectively. Payments are deferred until April 1, 2027 with quarterly principal payments due through April 1, 2031. Interest is payable at the end of the loan. The Company will amortize the premium over the life of the loan. Payments are payable in Thai Baht. The loan is secured by land located in Thailand. Sellavir received a $14,897 principal payment in April 2024 in connection with this loan. Sellavir stopped recognizing accrued interest income as of March 31, 2025.

The Company issued an additional loan to the Thai Corporation in May 2023 for $175,000, at the rate of 15% per annum. In January 2024, the note was amended to reduce the interest rate to 10% effective January 2024, and for Sellavir to receive 3% of the selling price of the secured property along with a one year extension for all payment due dates. The Company recorded a loss of $3,281 in connection with this loan modification. Payments are deferred until April 1, 2026, with quarterly principal payments due through April 1, 2030. Interest is payable at the end of the loan. The loan is secured by land located in Thailand. Sellavir received a $10,625 principal payment in April 2024 in connection with this loan.

During January 2024 and May 2025, both notes were amended to provide one and two year extensions, respectively, for all payment due dates.

During March 2025, the second note of $164,375 and accrued interest of $35,000 was assigned to the Company’s CEO and majority shareholder to satisfy certain obligations outstanding discussed in Note 7. The assignment was finalized and recorded as an offset to accrued expenses and payables – related party in May 2025.

Accrued interest at June 30, 2025 is $58,734, and at December 31, 2024, accrued interest for both loans was $76,307. Accrued interest included as a long-term asset, interest receivable – related party, is $52,208 and $76,307 at June 30, 2025, and December 31, 2024, respectively. The difference at June 30^th is due to the pausing of recognition of accrued interest as of March 31, 2025.

Principal amounts to be received for the two notes are as follows:

SCHEDULE OF NOTE RECEIVABLE

	$261,038 Note
2027	$	49,210
2028		65,614
2029		65,614
2030		65,614
2031		16,341
Totals	$	262,393

NOTE 5–PROPERTY AND EQUIPMENT

Property and Equipment at June 30, 2025 and December 31, 2024 consisted of:

SCHEDULE OF PROPERTY AND EQUIPMENT

	June 30,			December 31,
	2025			2024
Computer Equipment	$	4,005		$	4,005
Accumulated Depreciation		(3,635	)		(3,235	)
Net Property & Equipment	$	370		$	770

The Company recognized $200, $400, $200, and $400 in depreciation expense in each period for the three and six months ended June 30, 2025 and 2024, respectively.

QUARTA-RAD, INC. AND SUBSIDIARIES

Notes to the unaudited Condensed and Consolidated Financial Statements

NOTE 6–STOCKHOLDERS’ EQUITY

During January 2025, the Company issued 225,000 shares of restricted stock to Sellavir consultants valued at $222,625, the fair market value on the dates of issuance. The shares are subject to a 12-month vesting period from the date of issuance. The Company expensed $55,656 and $92,761, included in general and administrative expenses, during the three and six months ended June 30, 2025. The remaining $129,865 will be recorded over the next seven months through January 2026.

NOTE 7–RELATED PARTY TRANSACTIONS

The Company sells radiation monitors and to date purchased all of it inventory, through 2022, from Quarta-Rad, LTD (“QRR”), a company in Russia, which is owned by the Company’s minority shareholder, who disposed of their interest in 2024. During 2023 the Company began purchasing inventory through a supplier in Kazakhstan. No inventory purchased from QRR during the six months ended June 30, 2025, and 2024, respectively.

In May 2022, the Company began using Star Systems Corporation (“STAR”:), a Japanese entity owned by the Company’s majority shareholder, as an intermediary to purchase inventory from QRR. No inventory purchased from STAR during the six months ended June 30, 2025, and 2024, respectively. The Company owes STAR $42,502 on June 30, 2025 and December 31, 2024, for purchasers and inventory and upgrades from 2022. The balances are due on demand and do not incur interest.

During July 2017 the Company entered into an agreement with the Russian affiliate to develop and update software for a new device for $180,000. The development contract ended December 31, 2019. The amount due in connection with this agreement as of June 30, 2025 and December 31, 2024, is $91,850. The balances are due on demand and do not accrue interest.

In April 2021, the Company began compensating its CEO, who is the majority shareholder. The Company expensed $8,000, $16,000, $8,000, and $16,000 for the three and six months ended June 30, 2025, and 2024, respectively. As of June 30, 2025 and December 31, 2024, the Company has accrued $101,000 and $120,000, respectively for this compensation, included within accounts payable and accrued expenses on the accompanying balance sheets. As discussed in Note 4, the Company assigned a Note Receivable and accrued interest held by Sellavir to the Company’s CEO which included $35,000 applied to accrued salary.

From time to time the CEO advanced funds for operations. As of June 30, 2025 and December 31, 2024, the CEO is due $12,780 and $136,973, respectively, for expenses paid on behalf of the Company. The balances are due on demand and do not accrue interest. As discussed in Note 4, the Company assigned a Note Receivable and accrued interest held by Sellavir to the Company’s CEO which included $164,375 of expenses paid for on behalf of both Sellavir and Quarta-Rad.

Sellavir recognized $65,000, 95,000, $-0-, and $-0- of revenue for the three and six months ended June 30, 2025, and 2024, respectively in contract services to STAR to develop software. The CEO of Quarta-Rad is the majority shareholder of STAR.

See Note 4 for additional related party transactions.

NOTE 8–SEGMENTS

The Company has two operating segments through the operations of Quarta-Rad and Sellavir. The Company evaluates the performance of its segments based on revenues, operating income(loss) and net income(loss).

QUARTA-RAD, INC. AND SUBSIDIARIES

Notes to the unaudited Condensed and Consolidated Financial Statements

Segment information for the three and six months ended June 30, 2025, and 2024 is as follows:

SCHEDULE OF SEGMENT INFORMATION

	Quarta-Rad			Sellavir			Consolidated
For the six months ended June 30, 2025
	Quarta-Rad			Sellavir			Consolidated
Revenues	$	5,217			95,000		$	100,217
Loss from operations		(97,861	)		(78,604	)		(176,465	)
Net loss	$	(97,861	)		(51,643	)	$	(149,504	)

	Quarta-Rad			Sellavir			Consolidated
For the three months ended June 30, 2025
	Quarta-Rad			Sellavir			Consolidated
Revenues	$	2,330			65,000		$	67,330
Loss from operations		(56,621	)		(29,947	)		(86,568	)
Net loss	$	(56,621	)		(15,474	)	$	(72,095	)

	Quarta-Rad			Sellavir			Consolidated
For the six months ended June 30, 2024
	Quarta-Rad			Sellavir			Consolidated
Revenues	$	51,086		$	-		$	51,086
Loss from operations		(78,072	)		(58,428	)		(136,500	)
Net loss	$	(78,072	)	$	(75,923	)	$	(153,995	)

	Quarta-Rad			Sellavir			Consolidated
For the three months ended June 30, 2024
	Quarta-Rad			Sellavir			Consolidated
Revenues	$	29,044		$	-		$	29,044
Loss from operations		(40,908	)		(33,034	)		(73,942	)
Net loss	$	(40,908	)	$	(21,436	)	$	(62,344	)

Total Assets	As of June 30, 2025		As of December 31, 2024
Quarta-Rad	$	44,885	$	45,024
Sellavir		325,242		532,790
Total Assets	$	370,127	$	577,814

NOTE 9– COMMITMENTS AND CONTINGENCIES

Contingencies

Legal

In the normal course of business, the Company may become involved in various legal proceedings. The Company knows of no pending or threatened legal proceeding to which the Company is or will be a party that, if successful, might result in material adverse change in the Company’s business, properties or financial condition.

NOTE 10–SUBSEQUENT EVENTS

The Company has performed an evaluation of events occurring subsequent to June 30, 2025 through August 14, 2025. Based on its evaluation, other than the note below, there is nothing to be disclosed herein.

Item 2. Management’s Discussion and Analysis of Financial Conditions and Results of Operations

The following is management’s discussion and analysis of financial condition and results of operations and is provided as a supplement to the accompanying unaudited condensed financial statements and notes to help provide an understanding of our financial condition, results of operations and cash flows during the periods included in the accompanying unaudited condensed financial statements.

In this Quarterly Report on Form 10-Q, “Company,” “the Company,” “us,” and “our” refer to Quarta-Rad, Inc., a Delaware corporation, unless the context requires otherwise.

We intend the following discussion to assist in the understanding of our financial position and our results of operations for the three and six months ended June 30, 2025, and 2024. You should refer to the Financial Statements and related Notes in conjunction with this discussion.

Results of Operations

General

We were incorporated under the laws of the State of Delaware on November 29, 2011 with fiscal year end in December 31. We were formed to distribute and sell detection devices to homeowners and interested consumers in North America. Initially, our business plan was to sell products on consignment from Star Systems Japan, a corporation owned by our majority shareholder. We purchased these products from Quarta-Rad, Ltd., a company owned by our minority shareholder. We also targeted direct-to-consumer sales since we believe we can distribute these products through the Internet. We have never been party to any bankruptcy, receivership or similar proceeding, nor have we undergone any material reclassification, merger, consolidation, purchase or sale of a significant amount of assets not in the ordinary course of business.

Beginning in 2013, we began purchasing the products from Quarta-Rad, Ltd., our related party supplier and it shipped the products to us. We then shipped the products to a third-party online retailer, to hold for Internet sales and sales to our third-party resellers

During April 2020, we acquired Quarta-Rad USA, Inc., a Delaware corporation, as a wholly owned subsidiary. There was no consideration paid for the shares. The purpose of the acquisition is to separate the sales of certain products in separate entities. There was no activity, assets or liabilities in the subsidiary through June 30, 2025.

During December 2020, we acquired Sellavir, Inc. Sellavir is an AI company whose platform empowers organizations to decode videos to develop creative marketing strategies and analysis through advanced and proprietary technologies. Sellavir is set to launch a new product specifically designed to simplify the use of complex cloud-based call center platforms.

Prior to April 2024, our chief executive officer and director, Victor Shvetsky, and our director and president, Alexey Golovanov, were our only employees. In April 2024, Mr. Golovanov resigned from the Company.

We were formed to distribute and sell detection devices, including Geiger counters, but we are currently expanding our focus to the development and marketing of our call center software, CenterEye. CenterEye is designed to enhance call center operations through advanced analytics and AI technologies. We are actively developing this software and pursuing sales opportunities in the U.S., Japan, and other international markets. Recent traction in Japan indicates growing interest in our product.

The Company is exploring plans to potentially distribute its current operations of both Quarta-Rad and Sellavir and use the company to support operations in alternate services lines.

Our administrative office is located at 1201 N. Orange St., Suite 700, Wilmington, DE 19801, which is a virtual office.

Our business strategy is to expand the development and marketing of CenterEye, our proprietary call center software. We aim to enhance call center efficiency and customer engagement through innovative AI-driven solutions. While we maintain our online presence, our primary efforts are directed toward software development, marketing, and establishing partnerships with call centers and businesses requiring advanced customer service solutions.

Sellavir Consulting:

We expanded our operations through the acquisition of Sellavir Inc. in December 2020. Sellavir is an AI company that leverages its knowledge in neural networks to provide customized AI and development services to our clients. Our services are focused on offering customized solutions for image processing. Our current business model relies on identifying the specific customer needs and developing a software solution to address them. We currently do not have any clients in the US, and our sole revenue stream is from our Japanese reseller. We rely on their sales staff for the identification of new opportunities in the Japanese market. Quarta-Rad has acquired the company to:

- leverage Sellavir capabilities to combine it with its Radex series to offer AI-enhanced radiation detection capabilities

- expand its scope outside the radiation measurement

- recognizing the potential in the call center industry and leveraging Sellavir’s, we are set to launch a new product specifically designed to simplify the use of complex cloud-based call center platforms. This product will be offered as a monthly subscription service, which is expected to provide a steady and predictable stream of revenue. Sellavir began recognizing revenue in September 2024 in connection with the call center software.

Critical Accounting Policy and Estimates. Our Management’s Discussion and Analysis of Financial Condition and Results of Operations section discusses our condensed financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these condensed financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the condensed financial statements and the reported amounts of revenues and expenses during the reporting period. On an on-going basis, management evaluates its estimates and judgments, including those related to revenue recognition, accrued expenses, financing operations, and contingencies and litigation. Management bases its estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. The most significant accounting estimates inherent in the preparation of our condensed financial statements include estimates as to the appropriate carrying value of certain assets and liabilities which are not readily apparent from other sources. In addition, these accounting policies are described at relevant sections in this discussion and analysis and in the notes to the condensed financial statements included in this Quarterly Report on Form 10-Q.

The following discussion of our financial condition and results of operations should be read in conjunction with our unaudited financial statements for the three and six months ended June 30, 2025 and 2024, together with notes thereto, which are included in this Quarterly Report on Form 10-Q.

The Company has two operating segments through the operations of Quarta-Rad and Sellavir. Net income for the three months ended June 30, 2025, is comprised of:

	Quarta Rad			Sellavir			Total
Sales	$	2,330		$	65,000		$	67,330
Cost of Good Sold		486			29,116			29,602
Gross Profit		1,844			35,884			37,728

Expenses:
General & administrative		24,978			65,831			90,809
Professional and consulting fees		33,487			-			33,487
Operating expenses		58,465			65,831			124,296

Net loss from operations		(56,621	)		(29,947	)		(86,568	)

Interest and dividends		-			2			2
Other expense - foreign currency translation gain					13,670			13,670
Other income - interest - related party		-			802			802
Unrealized loss on investments		-			(1	)		(1	)

Net loss	$	(56,621	)	$	(15,474	)	$	(72,095	)

The Company has two operating segments through the operations of Quarta-Rad and Sellavir. Net income for the six months ended June 30, 2025, is comprised of:

	Quarta Rad			Sellavir			Total
Sales	$	5,217		$	95,000		$	100,217
Cost of Good Sold		2,835			61,014			63,849
Gross Profit		2,382			33,986			36,368

Expenses:
General & administrative		39,356			112,590			151,946
Professional and consulting fees		60,887			-			60,887
Operating expenses		100,243			112,590			212,833

Net loss from operations		(97,861	)		(78,604	)		(176,465	)

Interest and dividends		-			6			6
Other expense - foreign currency translation loss					14,453			14,453
Other income - interest - related party		-			12,505			12,505
Other expense - loss on loan modification					-			-
Unrealized loss on investments		-			(3	)		(3	)

Net loss	$	(97,861	)	$	(51,643	)	$	(149,504	)

Management’s Plan to Address Going Concern Considerations

Management intends to maintain adequate working capital and adhere to prudent financial forecasting.

Consolidated Totals:

Six months ended June 30, 2025 compared with the six months ended June 30, 2024

Revenues. Our net revenues increased $49,131, or 96.17% to $100,217 for the six months ended June 30, 2025, compared with $51,086 for the six months ended June 30, 2024. The reduction was primarily attributable to the increase in Sellavir revenue.

Cost of Goods Sold. Our Cost of Goods Sold increased $35,176 or 122.68% to $63,849 for the six months ended June 30, 2025, compared to $28,673 for the comparable period in 2024. The increase was due to the increased sales in Sellavir.

Operating Expenses. For the six months ended June 30, 2025, our total operating expenses increased $53,920 or 33.93% to $212,833 compared to $158,913 for the six months ended June 30, 2024. The increase is primarily attributable to Sellavir’s issuance of stock-based compensation.

Net Loss. Our net loss decreased $4,491 or 2.92% to $149,504 for the six months ended June 30, 2025, compared to a net loss of $153,995 for the six months ended June 30, 2024. The decrease was primarily due to an increase in sales and decrease in realized and unrealized losses.

QUARTA-RAD

Six months ended June 30, 2025, compared with the six months ended June 30, 2024

Revenues. Our net revenues decreased $45,869, or 89.79% to $5,217 for the six months ended June 30, 2025, compared with $51,086 for the six months ended June 30, 2024. The reduction was primarily attributable to the sales of our RD1503 model.

Cost of Goods Sold. Our Cost of Goods Sold decreased $25,838 or 90.11% to $2,835 for the six months ended June 30, 2025, compared to $28,673 for the comparable period in 2024. The decrease was a result of decreased sales.

Operating Expenses. For the six months ended June 30, 2025, our total operating expenses decreased $242 or 0.24% to $100,243 compared to $100,485 for the six months ended June 30, 2024. The decrease is primarily attributable to the decrease in administrative expenses.

Net Loss. Our net loss increased $19,789 or 25.35% to $97,861 for the six months ended June 30, 2025, compared to a net loss of $78,072 for the six months ended June 30, 2024. The decrease was primarily due to a reduction in sales.

SELLAVIR

Six months ended June 30, 2025, compared with the six months ended June 30, 2024

Revenues. Our net recognized revenue increased $95,000 to $95,000 for the six months ended June 30, 2025 compared with $-0- for the six months ended June 30, 2024. The increase is due to the timing of revenue recognized.

Cost of Goods Sold. Our Cost of Goods Sold increased $61,014 to $61,014 for the six months ended June 30, 2025, compared to $-0- for the comparable period in 2024. The increase was primarily due to increased sales.

Operating Expenses. For the six months ended June 30, 2025, our total operating expenses increased $54,162 or 92.70% to $112,590 compared to $58,428 for the six months ended June 30, 2024. The increase was primarily due to the issuance of stock-based compensation.

Net Loss. Our net loss decreased $24,280 to $51,643 or 31.98% for the six months ended June 30, 2025, compared to a net loss of $75,923 for the six months ended June 30, 2024. The decrease was primarily due to an increase in sales.

Consolidated Totals:

Three months ended June 30, 2025 compared with the three months ended June 30, 2024

Revenues. Our net revenues increased $38,286, or 131.82% to $67,330 for the three months ended June 30, 2025, compared with $29,044 for the three months ended June 30, 2024. The reduction was primarily attributable to the increase in Sellavir revenue.

Cost of Goods Sold. Our Cost of Goods Sold increased $11,178 or 60.67% to $29,602 for the three months ended June 30, 2025, compared to $18,424 for the comparable period in 2024. The increase was due to the increased sales in Sellavir.

Operating Expenses. For the three months ended June 30, 2025, our total operating expenses increased $39,734, or 46.99% to $124,296 compared to $84,562 for the three months ended June 30, 2024. The increase is primarily attributable to Sellavir’s issuance of stock-based compensation.

Net Loss. Our net loss increased $9,751 or 15.64% to $72,095 for the three months ended June 30, 2025 compared to $62,344 for the three months ended June 30, 2024. The increase is primarily attributable to Sellavir’s issuance of stock-based compensation.

QUARTA-RAD

Three months ended June 30, 2025, compared with the three months ended June 30, 2024

Revenues. Our net revenues decreased $26,714, or 91.98% to $2,330 for the three months ended June 30, 2025, compared with $29,044 for the three months ended June 30, 2024. The reduction was primarily attributable to the sales of our RD1503 model.

Cost of Goods Sold. Our Cost of Goods Sold decreased $17,938 or 97.36% to $486 for the three months ended June 30, 2025, compared to $18,424 for the comparable period in 2024. The decrease was a result of decreased sales.

Operating Expenses. For the three months ended June 30, 2025, our total operating expenses increased $6,937 or 13.46% to $58,465 compared to $51,528 for the three months ended June 30, 2024. The increase is primarily attributable to the increase in administrative expenses.

Net Loss. Our net loss increased $15,713 or 38.41% to $56,621 for the three months ended June 30, 2025, compared to a net loss of $40,908 for the three months ended June 30, 2024. The increase was primarily due to a decrease in sales.

SELLAVIR

Three months ended June 30, 2025, compared with the three months ended June 30, 2024

Revenues. Our net recognized revenue increased $65,000 to $65,000 for the three months ended June 30, 2025 compared with $-0- for the three months ended June 30, 2024. The increase is due to the timing of revenue recognized.

Cost of Goods Sold. Our Cost of Goods Sold increased $29,116 to $29,116 for the three months ended June 30, 2025, compared to $-0- for the comparable period in 2024. The increase was primarily due to increased sales.

Operating Expenses. For the three months ended June 30, 2025, our total operating expenses increased $63,511 or 2,737.46% to $65,831 compared to $2,320 for the three months ended June 30, 2024. The increase was primarily due to the issuance of stock-based compensation.

Net Loss. Our net loss decreased $5,962 to $15,474 or 27.81% for the three months ended June 30, 2025, compared to a net loss of $21,436 for the three months ended June 30, 2024. The increase was primarily due to the issuance of stock based compensation.

Liquidity and Capital Resources. During the six months ended June 30, 2025, we used cash for operating expenses from cash on hand and the sale of products on the Internet and from independent, third-party resellers and from consulting revenue from Sellavir.

Our total assets were $370,127 and $577,814 as of June 30, 2025, and December 31, 2024, respectively, consisting of $29,563 and $63,021, respectively, in cash. Our working capital deficit was ($214,295) and ($260,907) as of June 30, 2025 and December 31, 2024, respectively.

We had $33,458 and $34,413 in cash used by operating activities for the six months ended June 30, 2025, and 2024, respectively.

We had $-0- and $25,522 provided by investing activities for the six months ended June 30, 2025, and 2024, respectively.

We had no cash provided by financing activities for the six months ended June 30, 2025, and 2024, respectively.

The Company had no formal long-term lines of credit or other bank financing arrangements as of June 30, 2025.

The Company has no current plans for the purchase or sale of any plant or equipment.

The Company has no current plans to make any changes in the number of employees.

Impact of Inflation

The Company believes that inflation has had a negligible effect on operations over the past quarter.

Capital Expenditures

The Company expended no amounts on capital expenditures for the six months ended June 30, 2025.

Plan of Operation

Our business strategy is to expand from Geiger counter sales to the development and marketing of CenterEye, our proprietary call center software. We aim to enhance call center efficiency and customer engagement through innovative AI-driven solutions. While we maintain our online presence, our primary efforts are directed toward software development, marketing, and establishing partnerships with call centers and businesses requiring advanced customer service solutions.

While we continue to market our website (www.quartarad.com) we have also started to focus on Sellavir website sellavir.com as part of our business strategy.

During December 2020, Quarta-Rad acquired Sellavir, Inc, a Delaware corporation, under common control, as a wholly owned subsidiary. We acquired the company in exchange for 333,333 shares of our common stock. The value of the stock on the date of issue was approximately $170,000. Sellavir was a video analytics company whose platform empowers organizations to decode videos to develop creative marketing strategies and analysis through advanced and proprietary technologies. Quarta-Rad has acquired the company to leverage Sellavir capabilities to combine it with its Radex series to offer AI-enhanced radiation detection capabilities and expand its scope outside of radiation measurement. Sellavir’s platform empowers organizations to decode videos to develop creative marketing strategies and analysis and call center management solutions through advanced and proprietary technologies using artificial intelligence (“AI”). Sellavir, Inc., our wholly-owned subsidiary, is now focused on developing CenterEye, a call center software platform that leverages AI and advanced analytics to improve call center operations. CenterEye provides real-time insights, performance metrics, and customer engagement tools that enable organizations to enhance efficiency and customer satisfaction. We are starting to see traction in Japan and are expanding our marketing efforts to the U.S. and other international markets.

We intend to implement the following tasks within the next twelve months:

Inventory: We intend to purchase inventory to increase our sales. We believe that these funds will be initially sufficient for us to increase our inventory from Quarta-Rad, Ltd. The amount needed for inventory purchases is directly related to the demand for sales of our product.

Software Development: We will continue to invest in the development and enhancement of CenterEye to meet the evolving needs of the call center industry. This includes adding new features, improving user experience, and ensuring scalability.

Marketing: (Estimated cost $25,000-$75,000). In addition to the website modification costs, we intend to increase our marketing efforts on the Internet to generate leads and sales. We will also utilize funds to develop marketing brochures and materials to market the products to industry professionals such as home renovation contractors.

Partnerships and Client Acquisition: (Estimated cost $20,000). We aim to establish partnerships with call center operators and technology resellers. Efforts will be made to secure pilot projects and initial deployments to showcase the effectiveness of CenterEye.

Our management does not anticipate the need to hire additional full or part- time employees over the next three (3) months, as the services provided by our officers and directors and our independent contractor appear sufficient at this time. We believe that our operations are currently on a small scale that is manageable by these two individuals as well as our independent contractor. Our management’s responsibilities are mainly administrative at this stage. While we believe that the addition of employees is not required over the next three (3) months, the professionals we plan to utilize will be considered independent contractors. We do not intend to enter into any employment agreements with any of these professionals. Thus, these persons are not intended to be employees of our company.

We currently do not own any equipment that we would seek to sell in the near future; we do not have any off-balance sheet arrangements; and we have not paid for expenses on behalf of our directors.

Off-Balance Sheet Arrangements

None.

Forward Looking Statements

This Quarterly Report on Form 10-Q, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 2 of Part I of this report include forward-looking statements within the meaning of Section 27A of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995 (collectively, the “Reform Act”). The Reform Act provides a safe harbor for forward-looking statements to encourage companies to provide prospective information about themselves so long as they identify these statements as forward-looking and provide meaningful cautionary statements identifying important factors that could cause actual results to differ from the projected results. All statements, other than statements of historical fact that we make in this Quarterly Report on Form 10-Q, are forward-looking. The words “anticipates,” “believes,” “expects,” “intends,” “will continue,” “estimates,” “plans,” “projects,” the negative of these terms and similar expressions are intended to identify forward-looking statements. However, the absence of these words does not mean the statement is not forward-looking.

Forward-looking statements involve risks, uncertainties or other factors which may cause actual results to differ materially from the future results, performance or achievements expressed or implied by the forward-looking statements. These statements are based on our management’s beliefs and assumptions, which in turn are based on currently available information. Certain risks, uncertainties or other important factors are detailed in this Quarterly Report on Form 10-Q and may be detailed from time to time in other reports we file with the Securities and Exchange Commission, including on Forms 8-K and 10-K.

We operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for us to predict all those risks, nor can we assess the impact of all those risks on our business or the extent to which any factor may cause actual results to differ materially from those contained in any forward-looking statement. We believe these forward-looking statements are reasonable. However, you should not place undue reliance on any forward-looking statements, which are based on current expectations. Further, forward-looking statements speak only as of the date they are made, and unless required by law, we expressly disclaim any obligation or undertaking to update publicly any of them considering new information or future events.

Critical Accounting Policies

Our condensed financial statements and accompanying notes have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires management to make estimates, judgments and assumptions that affect reported amounts of assets, liabilities, revenues and expenses. We continually evaluate the accounting policies and estimates used to prepare the condensed financial statements. The estimates are based on historical experience and assumptions believed to be reasonable under current facts and circumstances. Actual amounts and results could differ from these estimates made by management. Certain accounting policies that require significant management estimates and are deemed critical to our results of operations or financial position are discussed in our Annual Report on Form 10-K for the year ended December 31, 2024, and Note 1 to the Condensed and Consolidated Financial Statements in this Form 10-Q.

Accounts Receivable Accounts Receivable and related party notes receivable amounts from sales to various suppliers and online platforms and loans. Accounts receivable are stated at the amount management expects to collect from outstanding balances. Management provides for probable uncollectable amounts through a charge to bad debt expense and a credit to a valuation allowance based on its assessment of the current status of individual accounts. Balances that are still outstanding after management has used reasonable collection efforts are written off through a charge to the valuation allowance and a credit to accounts receivable. A reserve for sales returns and allowances is considered immaterial and, as a result, there was no reserve for sales returns and allowances, at June 30, 2025, and December 31, 2024, respectively.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, we are not required to provide information required by this item.

Item 4. Controls and Procedures

Disclosure of controls and procedures.

The Company is responsible for establishing and maintaining adequate internal control over financial reporting in accordance with the Rule 13a-15 of the Securities Exchange Act of 1934. The Company’s officer, its president, conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting as of June 30, 2025 based on the criteria establish in Internal Control Integrated Framework issued by the 2013 Committee of Sponsoring Organizations of the Treadway Commission. Based on the foregoing evaluation, we have concluded that our disclosure controls and procedures were not effective as of June 30, 2025 and that they do not allow for information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission (“SEC”) rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to the Company’s management, including its Chief Executive and Principal Accounting & Financial Officers as appropriate to allow timely decisions regarding required disclosure.

The material weaknesses relate to the following:

	●	We do not have adequate segregation of duties in the handling of our financial reporting. This is caused by a very limited number of personnel.

	●	Our accounting staff does not have sufficient technical accounting knowledge relating to accounting for income taxes and complex US GAAP matters.

	●	The Company has not performed a risk assessment and mapped our process to control objectives.

	●	The Company has not implemented comprehensive entity-level internal controls.

	●	The Company has not implemented adequate system and manual controls.

Plan for Remediation of Material Weaknesses

We intend to take appropriate and reasonable steps to make the necessary improvements to remediate this deficiency as resources to do so become available. We intend to consider the results of our remediation efforts and related testing as part of our year-end 2022 assessment of the effectiveness of our internal control over financial reporting.

Such remediation would entail enhancing the training and oversight of the accounting personnel responsible for non-routine transactions involving complex accounting matters and engaging the services of an independent consultant with sufficient expertise in income tax and complex U.S. GAAP matters to assist us in the preparation of our financial statements.

Management believes that the aforementioned material weaknesses did not impact our financial reporting or result in a material misstatement of our condensed financial statements.

Changes in internal controls over financial reporting.

There were no changes in our internal control over financial reporting that occurred during the period covered by this Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II — OTHER INFORMATION

Item 1. Legal Proceedings

None.

Item 1A. Risk Factors

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, we are not required to provide information required by this item.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

None.

Item 5. Other Information

None.

Item 6. Exhibits

(a)

The following exhibits are filed with this quarterly report on Form 10-Q or are incorporated herein by reference:

Exhibit
Number		Description

31.1		Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934*.

31.2		Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934*.

32.1		Certification of the Chief Executive Officer pursuant to 18 U.S.C Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*.

32.2		Certification of the Chief Financial Officer pursuant to 18 U.S.C Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*.

101.INS*		Inline XBRL Instance Document
101.SCH*		Inline XBRL Taxonomy Extension Schema
101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase
101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase
101.LAB*		Inline XBRL Taxonomy Extension Label Linkbase
101.PRE*		Inline XBRL Taxonomy Presentation Linkbase
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

* Filed herewith.

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	QUARTA-RAD, INC.

August 14, 2025	/s/ Victor Shvetsky
	Victor Shvetsky
	Chairman and Chief Executive Officer (Principal Executive
	Officer) and Chief Financial Officer (Principal Accounting and Financial Officer)

Quarta-Rad, Inc. 10-Q