10-Q: SmartMetric Reports Q1 2025 Results, Cites Ongoing Development and Funding Efforts

SmartMetric, Inc. files its Form 10-Q for the quarter ended September 30, 2024, highlighting ongoing development of its biometric card and continued reliance on equity sales for funding.

Summary

• SmartMetric, Inc. reported its financial results for the first quarter of fiscal year 2025, ending September 30, 2024.
• The company is focused on developing and manufacturing biometric fingerprint-activated credit and debit cards.
• SmartMetric has not generated revenue from product sales since its inception in 2002 and has primarily funded operations through private sales of equity or equity-linked debt securities.
• The company incurred a net loss of $167,439 for the three months ended September 30, 2024, compared to a net loss of $170,671 for the same period in 2023.
• As of September 30, 2024, SmartMetric had an accumulated deficit of $32,280,317.
• The company's cash and cash equivalents balance was $3,287 as of September 30, 2024.
• SmartMetric expects to fund its operations through all of 2025 based on current operating expenditures and capital raises.
• The company anticipates raising additional cash through private or public sales of equity or debt securities.
• There is no assurance that financing will be available when needed or on acceptable terms.
• The company's management believes its capital requirements will depend on factors including product marketing and distribution.
• The company issued 1,351,407,999 shares of common stock during the three months ended September 30, 2024, with 297,499,999 issued for cash and 1,053,908,000 issued in conjunction with securities purchase agreements.
• The company acknowledges a material weakness in internal controls due to a lack of segregation of duties.

Sentiment

Score: 4

Explanation: The document presents a mixed sentiment. While the company is making progress in developing its biometric card, it is still incurring losses and relies heavily on external funding. The acknowledgement of a material weakness in internal controls further contributes to a negative outlook.

Positives

• SmartMetric is in the final stages of developing its biometric credit/debit card.
• The company expects to fund its operations through all of 2025 based on current operating expenditures and capital raises.

Negatives

• SmartMetric has not generated revenue from product sales since its inception in 2002.
• The company incurred a net loss of $167,439 for the three months ended September 30, 2024.
• As of September 30, 2024, SmartMetric had an accumulated deficit of $32,280,317.
• The company's cash and cash equivalents balance was $3,287 as of September 30, 2024.
• The company acknowledges a material weakness in internal controls due to a lack of segregation of duties.
• The company had a loss of $37,789 on patent asset due to impairment loss.

Risks

• The company's ability to continue as a going concern is dependent on raising sufficient capital or generating revenues.
• There is no assurance that financing will be available when needed or on acceptable terms.
• The company may be forced to curtail operations, delay or stop ongoing clinical trials, cease operations altogether, or file for bankruptcy if sufficient funds are not raised.
• The company acknowledges a material weakness in internal controls due to a lack of segregation of duties.
• The company's future operating results are dependent upon many factors which are outside its control.

Future Outlook

SmartMetric expects to continue to incur significant operating losses for the foreseeable future as it continues the development of its technologies and advance them to market and expects to be able to fund its operations through all of 2025.

Management Comments

• Management believes that the Companys capital requirements will depend on many factors including product marketing and distribution.
• Management evaluated the impact of our failure to have segregation of duties in all of our financially significant processes and have concluded that this control deficiency represented a material weakness.

Industry Context

The company operates in the competitive market of biometric authentication and security solutions, specifically targeting the payment card industry. The success of SmartMetric depends on its ability to secure partnerships with major payment networks and card-issuing banks.

Comparison to Industry Standards

• It is difficult to compare SmartMetric directly to industry standards due to its unique product and development stage.
• Comparable companies in the biometric authentication space include Fingerprint Cards AB and Precise Biometrics, which focus on fingerprint sensors for various applications, but not specifically biometric payment cards.
• The company's financial performance is significantly impacted by its reliance on external funding, which is a common challenge for early-stage technology companies.

Related Party Transactions

• As of September 30, 2024 and June 30, 2024, the Company has accrued the amounts of $969,102 and $921,602, respectively, as deferred Officers salary for the difference between the presidents annual salary and the amounts paid.
• As a result of shareholder loans and deferred officer salary, the Company has accrued a balance of $381,470 and $364,926 as interest payable as of September 30, 2024 and June 30, 2024.

Stakeholder Impact

• Shareholders: Continued losses and reliance on equity sales may dilute shareholder value.
• Employees: The company's ability to continue operations and development efforts depends on securing additional funding.
• Customers: The successful launch of the biometric card could provide a more secure and convenient payment solution.

Next Steps

• The company plans to continue the development of its biometric card and present it to the network and various card issuing banks.
• The company will seek additional funding through private or public sales of equity or debt securities.
• The company plans to remediate the material weakness in internal controls over the next 6 months.

Key Dates

Keywords

SmartMetric, biometric card, financial results, Form 10-Q, funding, equity sales, net loss, going concern, capital raise, development