10-K: Cleartronic, Inc. Reports Increased Revenue but Net Loss in Fiscal Year 2024

Cleartronic, Inc.'s Form 10-K filing reveals a revenue increase of 46.63% for the fiscal year ended September 30, 2024, but also a net loss attributable to common stockholders.

Summary

• Cleartronic, Inc. reported a 46.63% increase in revenue, reaching $3,126,148 for the year ended September 30, 2024, compared to $2,131,955 in the previous year.
• The primary driver of this increase was the growth in revenue from the ReadyOp platform, which rose from $2,022,550 in 2023 to $2,414,949 in 2024.
• Sales of ReadyOp hardware products also contributed significantly, increasing from $49,674 in 2023 to $671,999 in 2024.
• However, consulting fees and related income decreased from $59,731 in 2023 to $39,200 in 2024 due to reduced training activity.
• Cost of revenues increased to $866,402 for the year ended September 30, 2024, compared to $435,529 for the year ended September 30, 2023.
• Gross profit margins decreased to 72.29% for the year ended September 30, 2024, from 79.57% for the year ended September 30, 2023.
• Operating expenses increased by 55.88% to $2,560,333 for the year ended September 30, 2024, compared to $1,642,477 for the year ended September 30, 2023, primarily due to administrative, research and development, and selling expenses.
• The company's loss before income taxes was $272,125 for the year ended September 30, 2024, compared to an income of $56,556 before income taxes for the year ended September 30, 2023.
• Net loss attributable to common stockholders was $313,273 for the year ended September 30, 2024, compared to a net income of $15,518 for the year ended September 30, 2023.
• The company's management identified material weaknesses in internal control over financial reporting as of September 30, 2024.
• The company's common stock last traded at $0.0105 per share on the OTCPINK as of September 30, 2024.
• As of March 20, 2025, the company had 229,160,695 shares of common stock outstanding.

Sentiment

Score: 5

Explanation: While revenue increased significantly, the net loss and identified material weaknesses in internal controls temper the positive aspects, resulting in a neutral sentiment.

Positives

• Significant revenue growth of 46.63% driven by the ReadyOp platform and hardware sales.
• Acquisition of assets from Alastar, Inc. for $50,000, including a client list.
• Net cash provided by operating activities was $414,907 for the year ended September 30, 2024.
• The company settled $44,052 of accounts payable with various vendors in exchange for $1,111, resulting in a gain on settlement of $42,941.

Negatives

• Net loss attributable to common stockholders of $313,273 for the year ended September 30, 2024.
• Decrease in gross profit margins from 79.57% to 72.29%.
• Increase in operating expenses by 55.88%.
• Material weaknesses identified in internal control over financial reporting.
• Impairment loss of $44,373 related to intangible assets.
• Write-off of a note and interest receivable from a related party for $58,891.

Risks

• Rapid technological changes could render the company's products obsolete.
• Sales to government entities are subject to challenges and risks, including the FedRAMP certification process.
• The company's future operating results may vary due to factors outside of its control.
• The company acknowledges that its accounting team would benefit from additional technical expertise with respect to certain US GAAP matters.
• The company recognizes that due to its limited number of personnel, there are inherent challenges in achieving complete segregation of duties within the financial reporting process.

Future Outlook

The company expects to complete FedRAMP certification by mid-2025.

Industry Context

The company competes with similar programs such as WebEOC and Everbridge, but ReadyOp provides different capabilities and is priced lower.

Related Party Transactions

• During the years ended September 30, 2024 and 2023, the Company paid $39,000 and $36,000, respectively, to a related party consultant.
• As of September 30, 2024 and 2023, the Company owed $1,024 to the Companys Chief Executive Officer for the Companys operating expenses.
• As of September 30, 2024, the Company advanced $53,302 to VoiceInterop, the Companys former wholly owned subsidiary and now 96% owned by our shareholders.
• In September 2024, the Company determined that it is probable the Company will not recover its loan principal and interest, accordingly, the Company a bad debt expense for uncollectible note receivable and interest receivable of $58,891 in connection therewith.

Stakeholder Impact

• Shareholders may be concerned about the net loss despite the revenue increase.
• Employees may be affected by potential cost-cutting measures to address the net loss.
• Customers may benefit from the continued development and enhancement of the ReadyOp/ReadyMed platforms.

Next Steps

• The company intends to take appropriate and reasonable steps to make the necessary improvements to remediate the deficiency in internal control over financial reporting as resources to do so become available.
• The company intends to consider the results of its remediation efforts and related testing as part of its year-end 2024 assessment of the effectiveness of its internal control over financial reporting by improving its segregation of duties and level of supervision.

Key Dates

Keywords

ReadyOp, Cleartronic, Revenue, Net Loss, FedRAMP, Financial Results, AudioMate, Software, Hardware, SAAS