CirTran Narrows Losses, Boosts Sales Amidst Rising Related-Party Debt

TL;DR

**CIRX is still bleeding cash, relying heavily on related-party loans to stay afloat despite slightly improved sales and reduced losses; steer clear.**

AI Summary

CIRTRAN CORP reported a net loss of $1,138,064 for the nine months ended September 30, 2025, a significant improvement from the $1,814,150 net loss in the prior year period. Net sales saw a marginal increase to $1,077,743 for the nine months ended September 30, 2025, up from $1,075,952 in the same period of 2024. Gross profit, however, decreased to $533,062 from $619,419 year-over-year, primarily due to a rise in cost of sales from $456,533 to $544,681. Operating expenses decreased to $936,097 from $982,359, driven by lower selling, general, and administrative expenses. The company's total liabilities increased to $27,460,669 as of September 30, 2025, from $25,937,893 at December 31, 2024, largely due to a substantial increase in short-term advances payable to related parties from $22,452 to $1,104,000. Cash on hand improved significantly to $19,274 from zero at the end of 2024, primarily from $1,081,448 in proceeds from related-party loans. The accumulated deficit grew to $62,782,131 as of September 30, 2025, from $61,644,067 at December 31, 2024.

Why It Matters

For investors, CIRX's ability to narrow its net loss by 37.2% and slightly increase net sales suggests some operational improvements, but the significant reliance on related-party financing, with short-term advances payable to related parties surging to $1,104,000, raises concerns about financial independence and long-term sustainability. The growing accumulated deficit of $62,782,131 indicates persistent unprofitability, which could deter new investors and impact employee morale. In a competitive market for HUSTLER-branded products, this financial structure could limit CIRX's ability to invest in growth or respond to market shifts, potentially affecting its competitive standing and customer perception.

Risk Assessment

Risk Level: high — The company exhibits a high risk level due to its substantial accumulated deficit of $62,782,131 as of September 30, 2025, and total liabilities of $27,460,669 far exceeding total assets of $1,917,044. Furthermore, the significant increase in short-term advances payable to related parties from $22,452 to $1,104,000 highlights a heavy reliance on internal financing, indicating potential liquidity issues and a lack of access to traditional capital markets.

Analyst Insight

Investors should exercise extreme caution and consider avoiding CIRX stock. The company's persistent net losses, substantial accumulated deficit, and increasing reliance on related-party debt signal significant financial instability and a challenging path to profitability. Focus on companies with stronger balance sheets and clear paths to sustainable earnings.

Financial Highlights

debt To Equity

N/A

revenue

$1,077,743

operating Margin

-86.85%

total Assets

N/A

total Debt

$27,460,669

net Income

-$1,138,064

eps

N/A

gross Margin

49.46%

cash Position

$19,274

revenue Growth

0.16%

Key Numbers

• $1,138,064 — Net Loss (for the nine months ended September 30, 2025, a 37.2% improvement from $1,814,150 in 2024)
• $1,077,743 — Net Sales (for the nine months ended September 30, 2025, a slight increase from $1,075,952 in 2024)
• $533,062 — Gross Profit (for the nine months ended September 30, 2025, a decrease from $619,419 in 2024)
• $27,460,669 — Total Liabilities (as of September 30, 2025, an increase from $25,937,893 at December 31, 2024)
• $1,104,000 — Short-term advances payable - related parties (as of September 30, 2025, a significant increase from $22,452 at December 31, 2024)
• $19,274 — Cash (as of September 30, 2025, up from $0 at December 31, 2024)
• $62,782,131 — Accumulated Deficit (as of September 30, 2025, an increase from $61,644,067 at December 31, 2024)
• $1,081,448 — Proceeds from related-party loans (for the nine months ended September 30, 2025, a primary source of cash)
• $2,492,987 — Derivative liability (as of September 30, 2025, a Level 3 fair value measurement)
• 4,945,417 — Common shares outstanding (as of November 19, 2025)

Key Players & Entities

• CIRTRAN CORP (company) — registrant
• Iehab Hawatmeh (person) — president and founder of Circuit Technology, Inc.
• HUSTLER (company) — brand name for products manufactured and distributed by CirTran
• Nevada (regulator) — state of incorporation for CirTran Corporation
• SEC (regulator) — Securities and Exchange Commission
• FASB (regulator) — Financial Accounting Standards Board
• CirTran Products Corp. (company) — wholly owned subsidiary
• LBC Products, Inc. (company) — wholly owned subsidiary
• CirTran Asia, Inc. (company) — wholly owned subsidiary

FAQ

Risk Factors

• Going Concern Uncertainty [high — financial]: The company has a working capital deficiency of $22,897,132 as of September 30, 2025, a net loss of $1,013,957 for the nine months ended September 30, 2025, and an accumulated deficit of $62,782,131. These factors raise substantial doubt about CIRTRAN CORP's ability to continue as a going concern.
• Dependence on Related Party Financing [high — financial]: CIRTRAN CORP has historically relied on shareholder loans and advances. The company's ability to continue operations is dependent on its business plan and achieving profitability, with potential cash shortfalls requiring additional capital. Failure to secure financing could have a material adverse effect.
• Increase in Short-Term Related Party Debt [medium — financial]: Total liabilities increased to $27,460,669 as of September 30, 2025, from $25,937,893 at December 31, 2024. This increase is largely driven by a substantial rise in short-term advances payable to related parties from $22,452 to $1,104,000.
• Deteriorating Gross Profit Margins [medium — financial]: Gross profit decreased to $533,062 for the nine months ended September 30, 2025, from $619,419 in the prior year period. This decline is primarily due to an increase in the cost of sales, which rose from $456,533 to $544,681 year-over-year.
• Derivative Liability Valuation [low — financial]: The company reports a derivative liability of $2,492,987 as of September 30, 2025. This liability is measured using a Level 3 fair value measurement, indicating a higher degree of subjectivity and potential volatility in its valuation.

Industry Context

CIRTRAN CORP operates in the contract manufacturing sector. This industry is characterized by intense competition, price sensitivity, and the need for efficient operations to maintain profitability. Companies often face challenges related to supply chain management, technological advancements, and fluctuating demand from their clients.

Regulatory Implications

As a publicly traded company, CIRTRAN CORP is subject to SEC regulations and accounting standards (US GAAP). The 'going concern' disclosure highlights potential regulatory scrutiny regarding financial stability and disclosures. Compliance with reporting requirements is critical to maintain investor confidence.

What Investors Should Do

1. Monitor related-party transactions closely.
2. Evaluate the company's path to profitability.
3. Understand the valuation of the derivative liability.
4. Assess the sustainability of current operations.

Key Dates

• 2025-09-30: Nine months ended September 30, 2025 — Reported a net loss of $1,138,064 and net sales of $1,077,743, with a significant increase in short-term related party advances and a substantial derivative liability.
• 2024-12-31: Year ended December 31, 2024 — Reported zero cash on hand and minimal short-term advances payable to related parties ($22,452).

Glossary

Going Concern

An accounting assumption that a business will continue to operate for the foreseeable future. If substantial doubt exists, it must be disclosed. (CIRTRAN CORP's financial condition raises substantial doubt about its ability to continue as a going concern, requiring disclosure.)

Accumulated Deficit

The cumulative net losses of a company that have not been offset by net income. It represents a negative retained earnings balance. (CIRTRAN CORP's accumulated deficit has grown to $62,782,131, indicating a long history of unprofitability.)

Derivative Liability

A financial instrument whose value is derived from an underlying asset, index, or rate, and which results in a liability for the company. (The company has a significant derivative liability of $2,492,987, valued using a Level 3 measurement, which adds valuation risk.)

Level 3 Fair Value Measurement

A valuation technique that uses unobservable inputs, meaning the company has to make significant assumptions to determine the fair value of an asset or liability. (Indicates that the valuation of the derivative liability is based on subjective estimates, increasing uncertainty.)

Short-term advances payable to related parties

Money borrowed from individuals or entities closely connected to the company, due within one year. (A significant increase in this category to $1,104,000 has contributed to the rise in total liabilities and highlights reliance on related parties for funding.)

Year-Over-Year Comparison

CIRTRAN CORP has shown a marginal increase in net sales to $1,077,743 for the nine months ended September 30, 2025, up from $1,075,952 in the prior year. However, gross profit has declined due to rising cost of sales, leading to a reduced gross margin. While operating expenses have decreased, the company still reported a net loss of $1,138,064, albeit an improvement from the previous year's $1,814,150 loss. A significant concern is the increase in total liabilities, driven by a substantial rise in short-term advances from related parties, and the resulting 'going concern' disclosure.

Filing Documents

• form10-q.htm (10-Q) — 850KB
• ex31-01.htm (EX-31.1) — 12KB
• ex32-01.htm (EX-32.1) — 7KB
• 0001493152-25-024365.txt ( ) — 5347KB
• cirx-20250930.xsd (EX-101.SCH) — 38KB
• cirx-20250930_cal.xml (EX-101.CAL) — 82KB
• cirx-20250930_def.xml (EX-101.DEF) — 145KB
• cirx-20250930_lab.xml (EX-101.LAB) — 292KB
• cirx-20250930_pre.xml (EX-101.PRE) — 251KB
• form10-q_htm.xml (XML) — 938KB

—Financial Information

Part I—Financial Information 1

Financial Statements (Unaudited)

Financial Statements (Unaudited) 3 Condensed Consolidated Balance Sheets as of September 30, 2025 (unaudited) and December 31, 2024 (Audited) 3 Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2025 and 2024 (unaudited) 4 Condensed Consolidated Statements of Stockholders' Deficit for the Three and Nine Months Ended September 30, 2025 and 2024 (unaudited) 5 Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2025 and 2024 (unaudited) 6 Notes to Unaudited Condensed Consolidated Financial Statements 7 2

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 18 3

Quantitative and Qualitative Disclosures about Market Risk

Quantitative and Qualitative Disclosures about Market Risk 20 4

Controls and Procedures

Controls and Procedures 20

—Other Information

Part II—Other Information 6 Exhibits 21

Signatures

Signatures 22 2 PART I—FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS CIRTRAN CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS September 30,2025 December 31, 2024 (Unaudited) (Audited) ASSETS Current assets: Cash $ 19,274 $ — Inventory 713,725 737,223 Deposits on inventory 339,361 28,803 Deposits on inventory - related party — 637 Deposits on inventory — 637 Accounts receivable, net 55,204 25,641 Other current assets 536,386 485,621 Total current assets 1,663,950 1,277,925 Investment in securities at cost 248,000 248,000 Property and equipment, net of accumulated depreciation 5,094 6,407 Total assets $ 1,917,044 $ 1,532,332 LIABILITIES AND STOCKHOLDERS' DEFICIT Current liabilities: Accounts payable $ 507,524 $ 762,440 Cash overdraft — 30,384 Liabilities for product returns and credits 104,565 70,054 Short-term advances payable 162,866 162,966 Short-term advances payable - related parties 1,104,000 22,452 Short-term advances payable 1,104,000 22,452 Accrued liabilities 2,595,868 2,776,008 Accrued payroll and compensation expense 5,602,489 5,381,549 Accrued interest, current portion 6,704,921 6,281,805 Convertible debenture, current portion, net of discounts 264,284 264,284 Note payable, current portion 90,000 90,000 Note payable to stockholders 151,833 151,833 Note payable 151,833 151,833 Derivative liability 2,492,987 2,458,435 Liabilities from discontinued operations 4,779,745 4,664,960 Total current liabilities: 24,561,082 23,117,170 Note payable, net of current portion 643,000 643,000 Convertible debenture, net of current portion, net of discount 2,256,587 2,177,723 Total liabilities 27,460,669 25,937,893 Commitments and contingencies — — Stockholders' deficit: Common stock, par value $ 0.001 ; 100,000,000 shares authorized; 4,945,417 shares issued and outstanding 4,945 4,945 Additional paid-in capital

Financial Statements properly reflect the change

Financial Statements properly reflect the change. NOTE 3 — GOING CONCERN The accompanying unaudited consolidated financial statements have been prepared in conformity with US GAAP, which considers our continuation as a going concern. We had a working capital deficiency of $ 22,897,132 , as of September 30, 2025, and a net loss from continuing operations of $ 1,013,957 for the nine months ended September 30, 2025. As of September 30, 2025, we had an accumulated deficit of $ 62,782,131 . These conditions raise substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern is dependent upon our ability to successfully accomplish our business plan and eventually attain profitable operations. The accompanying consolidated financial statements do not include any adjustments that may be necessary if we are unable to continue as a going concern. In the coming year, our foreseeable cash requirements will relate to the development of business operations and associated expenses. We may experience a cash shortfall and be required to raise additional capital. Historically, we have mainly relied upon shareholder loans and advances to finance operations and growth. Management may raise additional capital by retaining net earnings, if any, or through future public or private offerings of our stock or loans from private investors, although we cannot assure that we will be able to obtain such financing. Our failure to do so could have a material and adverse effect upon our shareholders and us. NOTE 4 — PROPERTY AND EQUIPMENT We incur certain costs associated with the design and development of molds and dies for our contract-manufacturing segment. These costs are held as deposits on the balance sheet until the molds or dies are finished and ready for use. At that point, the costs are included as part of production equipment in property and equipment and are amortized over their useful lives. We hold title to all molds and d

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