10-Q: Cleartronic Reports Revenue Growth and Profitability in Q2 2026

Cleartronic, Inc. announced a 14.53% increase in revenue for the second quarter of 2026, returning to profitability after a loss in the prior year period.

Summary

• Cleartronic, Inc. reported a revenue of $1,235,269 for the three months ended June 30, 2026, an increase of 14.53% compared to $1,078,530 in the same period of 2025.
• For the nine months ended June 30, 2026, revenue increased by 20.65% to $3,621,310 from $3,001,557 in the prior year period.
• The company achieved a net income of $75,237 for the three months ended June 30, 2026, a significant improvement from a net loss of $50,862 in the same period of 2025.
• Net income attributable to common stockholders was $65,006 for the quarter, compared to a net loss of $61,093 in the prior year.
• For the nine months ended June 30, 2026, net income attributable to common stockholders was $303,121, a substantial turnaround from a net loss of $158,771 in the prior year.
• The company's accumulated deficit remains substantial at $(15,265,305) as of June 30, 2026.

Sentiment

Score: 6

Explanation: StockSavvy.ai views this as a moderately positive filing, showing revenue growth and a return to profitability, but with persistent operating expenses and a significant accumulated deficit.

Positives

• Revenue increased by 14.53% to $1,235,269 for the three months ended June 30, 2026, compared to $1,078,530 in the prior year period.
• Revenue for the nine months ended June 30, 2026, increased by 20.65% to $3,621,310 from $3,001,557 in the prior year period.
• The company returned to profitability with a net income of $75,237 for the three months ended June 30, 2026, compared to a net loss of $50,862 in the prior year period.
• Net income attributable to common stockholders for the three months ended June 30, 2026, was $65,006, a significant improvement from a net loss of $61,093 in the prior year period.
• For the nine months ended June 30, 2026, net income attributable to common stockholders was $303,121, a substantial increase from a net loss of $158,771 in the prior year period.
• Interest income increased to $11,235 for the three months ended June 30, 2026, from $9,004 in the prior year period.
• Interest income for the nine months ended June 30, 2026, increased to $34,789 from $23,180 in the prior year period.

Negatives

• The company has a significant accumulated deficit of $(15,265,305) as of June 30, 2026.
• Total current liabilities of $1,420,484 exceed total current assets of $1,329,259 as of June 30, 2026.
• Deferred revenue decreased by $497,972 for the nine months ended June 30, 2026, indicating a reduction in future recognized revenue.
• Operating expenses increased by 4.50% to $2,605,832 for the nine months ended June 30, 2026, compared to $2,493,718 in the prior year period.
• General and administrative expenses increased by $166,974 or 7.37% for the nine months ended June 30, 2026, due to increased business expenses and personnel costs.
• The company reported a negative net cash used in operating activities of $108,277 for the nine months ended June 30, 2026.

Risks

• Interruption of adequate supply of components, primarily computer chips, to the manufacturing source presents additional risk.
• The current worldwide shortage of computer chips limits the ability to supply proprietary radio gateways to clients and other buyers.
• The company relies on one customer for 26.29% of its total outstanding deferred revenue as of June 30, 2026.
• The company's disclosure controls and procedures are not effective due to limited personnel and challenges in achieving complete segregation of duties.

Future Outlook

The filing does not contain specific forward-looking statements or guidance regarding future financial performance. However, management's discussion section mentions prospective business opportunities and strategy for financing the business, indicating ongoing strategic planning.

Management Comments

• Management believes that additional commercial facilities exist at competitive rates to match the resources and capabilities of its existing manufacturing source, but the current worldwide shortage of computer chips does limit our ability to supply our proprietary radio gateways to clients and other buyers.
• Management is unaware of any claims or complaints that could result in future litigation.
• Management will seek to minimize disputes with the Companys customers but recognizes the inevitability of legal action in todays business environment as an unfortunate price of conducting business.

Industry Context

StockSavvy.ai notes that Cleartronic operates in the specialized software and communication gateway market, serving government agencies, corporations, and healthcare entities. The reported revenue growth aligns with a general trend of increased demand for integrated communication and operational management platforms, particularly those offering SaaS models and emergency response capabilities.

Comparison to Industry Standards

• The company's revenue growth of 14.53% for the quarter and 20.65% for the nine-month period is positive, but specific industry benchmarks for SaaS providers in this niche are not provided in the filing.
• The return to profitability is a positive step, but the significant accumulated deficit indicates a long road to financial stability compared to more established players in the enterprise software sector.
• The company's reliance on a few key customers for deferred revenue (26.29% for one customer) is a point of concern when compared to larger, more diversified SaaS companies that typically have a broader customer base.

Corporate Governance

Legal Proceedings

• Cleartronic is not engaged in any litigation at the present time and management is unaware of any claims or complaints that could result in future litigation.

Related Party Transactions

• The Company paid $9,000 for the three months ended June 30, 2026, and $27,000 for the nine months ended June 30, 2026, to a related party consultant.

Stakeholder Impact

• Shareholders: The return to profitability and revenue growth are positive indicators, but the substantial accumulated deficit and ineffective disclosure controls present ongoing risks.
• Employees: Increased headcount and personnel costs are noted, suggesting potential growth and investment in human capital.
• Customers: The company continues to support Alastar clients and enhance its ReadyOp platform, indicating ongoing service commitment.
• Suppliers: The company relies on component suppliers, with a noted risk related to the global shortage of computer chips impacting the supply of IP gateway devices.

Next Steps

• Continue to support existing Alastar clients and add new clients.
• Transition Alastar functionality into the ReadyOp platform and enhance capabilities for existing and new clients over the next two years.
• Management intends to take appropriate and reasonable steps to improve disclosure controls and procedures as resources become available.

Key Dates

Recommendation

The company shows positive revenue growth and a return to profitability, which are encouraging signs. However, the significant accumulated deficit, current liabilities exceeding current assets, and ineffective disclosure controls present considerable risks. While the operational improvements are noted, the financial health and internal control weaknesses warrant a cautious 'hold' stance until these issues are demonstrably resolved.

Keywords

Software as a Service, SaaS, ReadyOp, ReadyMed, Alastar, AudioMate, IP Gateway, Emergency Response Software