Natics Corp.
Natics Corp, a development-stage online fitness start-up, operates the "Sport Natics" mobile app offering live and on-demand workout sessions. In FY 2025, revenues fell to $16,200 while expenses surged to $57,249, leading to a net loss of $41,049 (FY 2024: loss $12,160). Total assets halved to $2...
In-Depth Review: Natics Corp’s FY2025 10-K
Natics Corp, a Wyoming-incorporated development-stage company, released its annual report for the fiscal year ended April 30, 2025. The company operates an online fitness platform, "Sport Natics," offering workout video lessons, personalized training, and nutrition plans. This blog post delves into the most important aspects of Natics Corp’s 10-K filing, covering business description, financial performance, risks, governance, and our investment thesis.
Warren.AI 💰 1.5 / 10
1. Business Overview (Item 1)
Natics was formed on February 21, 2022 to deliver healthy and effective online sports services to adolescents and adults via its mobile application "Sport Natics" on Android and iOS. Key service tiers:
• Free trial: Limited access to pre-recorded workouts • Paid version:
- One-hour live video lesson with trainer demonstration
- One-hour live video feedback session to adjust form
- Personalized monthly workout program
- Custom nutrition and diet plan
Although Natics has functional links on Google Play and the App Store and an operating website (https://sport-natics.com), its user base and subscription volumes remain extremely low. The management team is led by founder and sole director Guy Pirotsky, who also serves as President, CFO and Secretary. No external executives or independent board members support operations.
1.1 Market & Competition
The global online fitness market is crowded, featuring established brands like Peloton, Forbes 5 startups, Apple Fitness+, and free content on YouTube. Natics must address:
- Customer acquisition: Spend on marketing vs. limited capital
- Retention: Sustained subscription revenue vs. one-time purchases
- Product differentiation: Competing on price, content quality, and trainer expertise
With virtually no marketing budget and limited corporate governance, Natics faces an uphill battle to gain traction.
2. Key Risk Factors (Item 1A & 1C)
As a smaller reporting company, Natics did not file a detailed Risk Factors section (Item 1A). However, Item 1C (Cybersecurity) warns that:
- No formal cybersecurity program is in place
- They intend to adopt a risk-based approach as they scale
- Limited data volume reduces immediate risk, but vulnerabilities remain
In Item 3 (Legal Proceedings), the company reports no ongoing litigation, but its “going concern” opinion from auditors (Item 7) highlights fundamental risk to continuing operations.
3. Financial Condition & Results (Items 7, 7A, 8)
3.1 Revenue & Profitability
| Year ended April 30 | Revenue | Expenses | Net Loss |
|---|---|---|---|
| 2025 | $16,200 | $57,249 | $(41,049) |
| 2024 | $21,920 | $34,080 | $(12,160) |
- Revenue fell by 26% in FY 2025, indicating weakened sales.
- Expenses rose by 68% year-over-year, driven by app development, hosting fees, and minimal operating costs.
- Net loss widened to $41,049, nearly triple last year’s loss.
Profitability Analysis: At current scale, Natics operates at a steep loss. Customer acquisition appears negligible against fixed and variable costs.
3.2 Balance Sheet Strength
| As of April 30 | 2025 | 2024 |
|---|---|---|
| Total Assets | $23,823 | $49,518 |
| Total Liabilities | $81,306 | $65,952 |
| Stockholders’ Equity | $(57,483) | $(16,434) |
- Assets have halved, mostly due to cash depletion and amortization of app development costs.
- Liabilities increased by 23%, fueled by director loans ($25,406 balance) and a $43,000 promissory note.
- Negative equity worsened from $(16,434) to $(57,483).
Balance Sheet: The company’s financial position weakened significantly over the year, with a negative net worth and dependency on related-party financing.
3.3 Cash Flow Dynamics
| Year ended April 30 | Operating CF | Investing CF | Financing CF |
|---|---|---|---|
| 2025 | $(36,749) | $(8,604) | $11,055 |
| 2024 | $(7,860) | $(8,604) | $2,362 |
- Operating cash flow: Deepened negative cash burn from operations, up 368% year over year.
- Investing cash flow: Continues negative due to capitalization of app development costs at $8,604 per year.
- Financing cash flow: Relies entirely on unsecured director advances and equity issuances; no institutional or customer financing available.
Liquidity: As of April 30, 2025, cash on hand was only $6,635, down 72% from prior year. Without an immediate capital raise, impending cash shortfall may jeopardize operations.
3.4 Going Concern
Auditor’s report highlights “substantial doubt” about Natics’ ability to continue as a going concern. Management plans to seek additional equity financing or debt, but success is uncertain and could lead to severe dilution.
4. Corporate Governance & Related Parties (Items 9A, 10, 13)
- Board structure: Sole director (founder) with no independent members, no audit/compensation committees.
- Control deficiencies: Material weaknesses identified—lack of segregation of duties, limited oversight, no formal review of financials.
- Compensation: No salaries paid to the founder or board. All capital provided via founder advances or micro-share issuances.
- Related party loans: $25,406 advanced by the director with no repayment terms or interest.
Governance: Poor internal controls and reliance on a single individual pose significant operational and financial reporting risks.
5. Management Discussion & Critical Accounting Policies
Management acknowledges:
- Start-up stage: No structural track record; dependent on fund raising.
- Accounting estimates: Use-of-estimates in app development amortization, valuation allowance for deferred taxes.
- No income taxes: Operating losses create net operating loss carryforwards ($17,375) but full valuation allowance recorded.
Key Policies: App development costs capitalized and amortized over five years; no impairment triggers noted.
6. Investment Thesis & Score
6.1 Strengths
- Foundational fitness app platform is functional and live.
- Management has modest technical expertise and can iterate the product.
- No current litigation or regulatory issues.
6.2 Weaknesses & Threats
- Financial performance: Declining sales, widening losses, negative cash flow, negative equity.
- Liquidity: Cash runway extremely limited ($6.6K on hand).
- Governance: Single director, control weaknesses, related party financing.
- Competition: Fierce market with well-capitalized incumbents.
- Going concern: Auditor doubts viability without new capital.
6.3 Outlook
Without substantial external capital or a rapid surge in subscriptions, the company faces potential shutdown or severe dilution for new investors. The path to profitability is unclear given current metrics.
6.4 Investment Score: 1.5 / 10
Based on the analysis above, Natics Corp receives a low investment score of 1.5 out of 10. We believe that the combination of negative financial trends, severe cash constraints, heavy competition, and governance issues make this a highly speculative, high-risk investment.
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