Cleartronic's Q3 Loss Widens to $1.06M Amidst Preferred Stock Activity

TL;DR

**CLRI's deepening losses and complex preferred stock structure make it a risky bet; steer clear.**

AI Summary

Cleartronic, Inc. (CLRI) reported a net loss of $1,057,000 for the nine months ended June 30, 2025, a significant increase from the $723,000 net loss for the same period in 2024. The company's revenue for the nine months ended June 30, 2025, was not explicitly detailed in the provided excerpt, making a direct comparison difficult. However, the increased net loss indicates a worsening financial performance. Key business changes include the issuance of Series A, B, C, D, and E Preferred Stock, with specific amounts for each series as of June 30, 2025, and September 30, 2024. For instance, Series A Preferred Stock remained at $1,000,000 for both periods. The company's retained earnings show a deficit of $20,381,000 as of June 30, 2025, compared to $19,324,000 as of September 30, 2024, highlighting accumulated losses. Risks include the ongoing ability to generate sufficient revenue to offset operational costs and the potential for further dilution from preferred stock conversions. The strategic outlook appears focused on managing existing capital structure, as evidenced by the detailed preferred stock figures.

Why It Matters

Cleartronic's widening net loss to $1.06 million for the nine months ended June 30, 2025, signals persistent operational challenges, which could erode investor confidence and impact stock valuation. For employees, continued losses might raise concerns about job security and future growth prospects. Customers could face uncertainty regarding the company's long-term viability and ability to maintain service quality in the competitive radio telephone communications sector. The company's reliance on preferred stock financing, with various series outstanding, suggests a need for capital that could lead to further dilution for common shareholders, placing it at a disadvantage against more financially stable competitors.

Risk Assessment

Risk Level: high — The company reported a net loss of $1,057,000 for the nine months ended June 30, 2025, a substantial increase from the $723,000 loss in the prior year, indicating deteriorating financial health. Furthermore, the accumulated deficit in retained earnings reached $20,381,000 as of June 30, 2025, demonstrating a long history of unprofitability and significant financial risk.

Analyst Insight

Investors should exercise extreme caution and consider avoiding CLRI stock given the escalating net losses and substantial accumulated deficit. Focus on companies with demonstrated profitability and a clearer path to sustainable growth in the telecommunications sector.

Key Numbers

• $1.06M — Net Loss (Increased from $723K in the prior year, indicating worsening financial performance.)
• $20.38M — Accumulated Deficit (Represents significant historical losses, growing from $19.32M.)
• $1.0M — Series A Preferred Stock (Consistent amount, part of the company's capital structure.)

Key Players & Entities

• Cleartronic, Inc. (company) — filer of the 10-Q
• $1,057,000 (dollar_amount) — net loss for nine months ended June 30, 2025
• $723,000 (dollar_amount) — net loss for nine months ended June 30, 2024
• $20,381,000 (dollar_amount) — retained earnings deficit as of June 30, 2025
• $19,324,000 (dollar_amount) — retained earnings deficit as of September 30, 2024
• $1,000,000 (dollar_amount) — Series A Preferred Stock as of June 30, 2025 and September 30, 2024
• June 30, 2025 (date) — end of the reporting period
• September 30, 2024 (date) — previous fiscal year-end

FAQ

Risk Factors

• Increasing Net Loss [high — financial]: The company reported a net loss of $1,057,000 for the nine months ended June 30, 2025, a significant increase from the $723,000 net loss for the same period in 2024. This trend indicates a worsening financial performance and a growing inability to cover operational costs.
• Growing Accumulated Deficit [high — financial]: Cleartronic's retained earnings show a deficit of $20,381,000 as of June 30, 2025, up from $19,324,000 as of September 30, 2024. This substantial and increasing deficit highlights persistent historical losses and raises concerns about the company's long-term viability.
• Preferred Stock Dilution Risk [medium — financial]: The company has issued multiple series of preferred stock (Series A, B, C, D, and E). The potential for these preferred shares to convert into common stock poses a significant risk of dilution for existing common shareholders, impacting their ownership percentage and potential returns.
• Revenue Generation Challenges [high — operational]: A key risk for Cleartronic is its ongoing ability to generate sufficient revenue to offset operational costs. The increasing net loss suggests that current revenue streams are not adequately covering expenses, necessitating a strategic focus on revenue growth or cost reduction.

Industry Context

Cleartronic, Inc. operates within the Radio Telephone Communications sector (SIC 4812). This industry is characterized by rapid technological advancements, significant capital investment requirements, and intense competition from larger, established players. Companies in this space often face regulatory scrutiny and must adapt to evolving communication standards and consumer demands.

Regulatory Implications

As a publicly traded company, Cleartronic is subject to SEC regulations and reporting requirements, including timely filing of 10-Q and 10-K reports. Failure to comply can result in penalties. The company's financial performance and capital structure may also attract scrutiny from investors and analysts regarding its long-term sustainability.

What Investors Should Do

1. Monitor revenue growth and cost management strategies.
2. Analyze the terms and potential conversion impact of preferred stock.
3. Evaluate the company's cash burn rate and liquidity position.

Key Dates

• 2025-06-30: Quarterly Report (10-Q) filed — Provides updated financial information for the nine months ended June 30, 2025, including net loss and preferred stock details.
• 2024-09-30: Fiscal Year End — Represents the prior fiscal year-end balance sheet figures used for comparison, including accumulated deficit and preferred stock amounts.

Glossary

Retained Earnings

The cumulative amount of net income that a company has retained over its lifetime, after paying out dividends. A deficit means the company has accumulated more losses than profits. (The significant and growing deficit of $20,381,000 highlights Cleartronic's history of unprofitability.)

Preferred Stock

A class of ownership in a corporation that has a higher claim on assets and earnings than common stock. Preferred stock typically does not carry voting rights but may have fixed dividend payments. (Cleartronic has issued multiple series of preferred stock, impacting its capital structure and potentially leading to dilution for common shareholders.)

Net Loss

The total expenses of a company exceed its total revenues over a specific period, resulting in a negative profit. (Cleartronic reported a net loss of $1,057,000 for the nine months ended June 30, 2025, indicating a worsening financial performance.)

Year-Over-Year Comparison

The nine months ended June 30, 2025, show a worsening financial performance for Cleartronic, Inc. compared to the same period in 2024, with a net loss increasing from $723,000 to $1,057,000. The accumulated deficit also grew from $19,324,000 as of September 30, 2024, to $20,381,000 as of June 30, 2025, indicating continued operational challenges and historical unprofitability. While specific revenue figures for the current period were not detailed, the increased loss suggests revenue may not have kept pace with expenses.

Filing Details

This Form 10-Q (Form 10-Q) was filed with the SEC on July 30, 2025 regarding Cleartronic, Inc. (CLRI).

View full filing on EDGAR

View Full Filing

View this 10-Q filing on SEC EDGAR