What changed in this filing

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Item 7. Management’s Discussion and Analysis

2025-12-30 compared with 2025-03-21 · 142 added, 122 removed, 157 unchanged (63% of the section changed)

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and Results of Operations.

THE FOLLOWING DISCUSSION SHOULD BE READ TOGETHER WITH THE INFORMATION CONTAINED

IN THE CONSOLIDATED FINANCIAL STATEMENTS AND RELATED NOTES INCLUDED ELSEWHERE IN THIS ANNUAL REPORT ON FORM 10-K.

THE FOLLOWING DISCUSSION SHOULD BE READ TOGETHER WITH THE INFORMATION

CONTAINED IN THE CONSOLIDATED FINANCIAL STATEMENTS AND RELATED NOTES INCLUDED ELSEWHERE IN THIS ANNUAL REPORT ON FORM 10-K.

MANAGEMENT DISCUSSION

The following discussion reflects the Company's plan of operation.

discussion should be read in conjunction with the financial statements which are attached to this report.

This discussion contains forward-looking

statements, including statements regarding our expected financial position, business and financing plans.

These statements involve risks

and uncertainties.

The actual results could differ materially from the results described in or implied by these forward-looking statements

as a result of various factors, including those discussed below and elsewhere in this report, particularly under the headings “Special

Note Regarding Forward-Looking Statements.”

This discussion should be read in conjunction with the financial statements which are attached to this report.

This discussion contains

forward-looking statements, including statements regarding our expected financial position, business and financing plans.

These statements

involve risks and uncertainties.

The actual results could differ materially from the results described in or implied by these forward-looking

statements as a result of various factors, including those discussed below and elsewhere in this report, particularly under the headings

"Special Note Regarding Forward-Looking Statements."

Unless the context otherwise suggests, "we," "our,"

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from the ReadyOp platform from $2,414,949 in 2024 to $3,691,273 in 2025.

There was also an increase in sales of ReadyOp hardware products

from $49,674 in 2023 to $671,999 in 2024.

Consulting fees and related income decreased from $59,731 in 2023 to $39,200 in 2024 due to

a decrease in training activity.

These were offset by a decrease in sales of

ReadyOp hardware products from $671,999 in 2024 to $85,195 in 2025.

Consulting fees and related income increased from $39,200 in

2024 to $326,920 in 2025 due to an increase in contract development activities.

Cost of Revenue

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September 30, 2025 and September 30, 2024, respectively.

Gross profit margins decreased to 72.29% for the year ended September 30, 2024

Gross profit margins increased to 78.23% for the year ended September 30, 2025

from 72.29% for the year ended September 30, 2024.

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September 30, 2025 compared to $2,560,333 for the year ended September 30, 2024.

The increase was primarily due to administrative expenses,

research and development expenses, and selling expenses.

General and administrative expenses increased by $770,159 or 59.06% as a result

of the increase in general business expenses, impairment loss, an increase in headcount and personnel related costs associated with the

addition of new employees.

The increase was primarily due to an increase in payroll

and benefits costs associated with the new employees gained associated with the acquisition of the Alastar platform.

administrative expenses increased by $952,765 or 45.94% as a result primarily of the increase in payroll expenses, and personnel related

There were also charitable contributions and employee holiday bonuses paid during the year.

For the year ended September 30, 2024, selling expenses were $287,676 compared

to $306,132 for the year ended September 30, 2023.

This decrease was primarily due to bad debt expense, and slight offset by an increase

in advertising and travel expenses as the Company increased its sales and marketing efforts.

Research and development expenses were $189,022 for the year ended

September 30, 2024, as compared to $27,314 for the year ended September 30, 2023.

This increase was primarily due to research and development

expenses and Company’s fees paid to outside consulting services that are assisting us in obtaining FedRAMP certification.

ended September 30, 2024, $166,419 was paid in connection with FedRamp certification.

For the year ended September 30, 2025, selling expenses were $341,226

compared to $287,676 for the year ended September 30, 2024.

This increase was primarily due to bad debt expense, and a decrease in

advertising and travel expenses .

Research and development expenses were $8,000 for the year ended September

30, 2025, as compared to $189,022 for the year ended September 30, 2024.

This decrease was primarily due to research and development expenses

and Company's fees paid to outside consulting services that are assisting us in obtaining FedRAMP certification.

For the year ended September

30, 2024, $166,419 was paid in connection with FedRamp certification.

Other Income/(Expenses)

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$33,836 during the year ended September 30, 2025 as compared to $28,462 in other income for the year ended September 30, 2024.

This increase was

an increase in interest income on treasury bill investments and related party interest - receivable of $44,412 and extinguishment of liabilities

of $42,941 and offset by a write off of note and interest receivable - related party of $58,891

Income before Income Taxes

This increase

was due to a increase in interest income on treasury bill investments for the year ended September 30, 2025 and a decrease due to related

party interest - receivable of $44,412 and extinguishment of liabilities of $42,941 and offset by a write off of note and interest receivable

- related party of $58,891for the year ended September 30, 2024.

Loss before Income Taxes

The Company’s loss before income taxes was $154,219, during the

year ended September 30, 2024, as compared to income of $56,556 income before income taxes for the year ended September 30, 2023.

increased costs were partially offset by an increase in subscriptions of ReadyOp licenses.

Net (Loss) Income Attributable to Common Stockholders

Net loss attributable to common stockholders was $313,273 for the

year ended September 30, 2024 as compared to a net income of $15,518 for the year ended September 30, 2023.

The decrease was primarily

due to an increase in administrative expenses and research and development expenses and offset by an increase in sales of ReadyOp licenses

and a prior period adjustment, see Note 2.

The increased costs were partially due to addition of new employees associated and costs associated

FedRAMP certification .

year ended September 30, 2025, as compared to loss of $272,125 before income taxes for the year ended September 30, 2024.

The increased

costs were partially offset by an increase in subscriptions of ReadyOp licenses and an increase in contract development revenue.

Net Loss Attributable to Common Stockholders

Net loss attributable to common stockholders was $195,255 for the year

ended September 30, 2025 as compared to a net loss of $313,273 for the year ended September 30, 2024.

The decrease was primarily due to

an increase in payroll-related expenses, a decrease in research and development expenses and offset by an increase in sales of ReadyOp

licenses and a prior period adjustment, see Note 2.

The preferred stock dividends remained consistent.

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of $284,118 was the result of a net loss of $154,219, depreciation and amortization expense of $21,847, amortization of operating lease

of $5,983, provision of bad debt of $110,143, an increase in inventory of $61,992, increase in accounts receivable of $87,690, an increase

in prepaid expenses of $11,905, decrease in operating lease liability of $6,506.

These were offset by an increase in accounts

payable of $49,988, an increase in deferred revenue of $417,986.

For the year ended September 30, 2024, net cash provided in operations

of $414,901 was the result of a net loss of $272,125, depreciation and amortization expense of $9,496, amortization of operating lease

of $23,931, gain on extinguishment of liabilities of $ 42,941, provision of bad debt of $20,000, impairment of intangible assets of $44,373,

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in deferred revenue of $195,645.

For the year ended September 30, 2023, net cash provided in operations

of $99,595 was the result of a net income of $56,556, depreciation and amortization expense of $5,051, amortization of operating lease

of $17,949, provision of bad debt of $97,994, an increase in accounts payable of $10,640, and a decrease in inventory of $816.

offset by an increase in accounts receivable of $105,537, an increase in prepaid expenses of $17,635 and an increase in deferred revenue

Net cash used in investing activities was $9,793 for the year ended

September 30, 2025 which was for the purchase of fixed assets of $9,793.

Net cash used in investing activities was $82,135 for the year ended

September 30, 2024 which was for the purchase of fixed assets of $32,135, and intangible asset - client list of $50,000.

Net cash used in investing activities was $50,807 for the year ended September

30, 2023 which was for the purchase of fixed assets of $6,434, and intangible assets of $44,373.

Critical Accounting Policies and Estimates

We prepare our consolidated financial statements in accordance with accounting

principles generally accepted in the United States of America, and make estimates and assumptions that affect our reported amounts of

assets, liabilities, revenue and expenses, and the related disclosures of contingent liabilities.

We base our estimates on historical

experience and other assumptions that we believe are reasonable in the circumstances.

Actual results may differ from these estimates.

We prepare our consolidated financial statements in accordance with

accounting principles generally accepted in the United States of America, and make estimates and assumptions that affect our reported

amounts of assets, liabilities, revenue and expenses, and the related disclosures of contingent liabilities.

We base our estimates on

historical experience and other assumptions that we believe are reasonable in the circumstances.

Actual results may differ from these

The following critical accounting policies affect our more significant

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as of September 30, 2025, and September 30, 2024, respectively.

Inventory consists of components held for assembly and finished goods held

for resale or to be utilized for installation in projects.

Inventory consists of components held for assembly and finished goods

held for resale or to be utilized for installation in projects.

Inventory is valued at lower of cost or net realizable value on a first-in,

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the provisions of ASC 360-10-35-15 “Impairment or Disposal of Long-Lived Assets.”

If impairment is indicated based on a comparison of the assets’ carrying

values and the undiscounted cash flows, the impairment to be recognized is measured as the amount by which the carrying amount of the

assets exceeds the fair value of the assets.

If impairment is indicated based on a comparison of the assets’

carrying values and the undiscounted cash flows, the impairment to be recognized is measured as the amount by which the carrying amount

of the assets exceeds the fair value of the assets.

INTANGIBLE ASSETS

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with ASC 350-30-35 and determined that all previously capitalized amounts related to costs that are no longer deemed recoverable.

a result, the Company recognized an impairment loss of $44,373.

result, the Company recognized an impairment loss of $44,373.

REVENUE RECOGNITION AND DEFERRED REVENUES

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Recognition of revenue when (or as) the Company satisfies each performance

The Company generates revenue primarily through the sale of software licenses

and integrated hardware.

The portion of the contract that is associated with ongoing hosting and related customer service is amortized

monthly over the license period.

The Company generates revenue primarily through the sale of software

licenses and integrated hardware.

The portion of the contract that is associated with ongoing hosting and related customer service is

amortized monthly over the license period.

The Company incurs certain incremental contract costs (referred to as deferred subscriber acquisition

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as incurred on the date the revenue associated with the cost is recognized.

In transactions in which hardware is sold to a customer, the Company recognizes

the revenue when the hardware has been shipped to the customer.

The hardware supplied by the Company does not require a related software

license and can be operated and fully functional without the Company’s software.

In transactions in which hardware is sold to a customer, the Company

recognizes the revenue when the hardware has been shipped to the customer.

The hardware supplied by the Company does not require a related

software license and can be operated and fully functional without the Company’s software.

From time to time clients request special training meetings.

We send employees

to these meetings and charge our clients on a per diem basis.

employees to these meetings and charge our clients on a per diem basis.

These charges are recorded as consulting fees on our income statement.

Customer billings for services not yet rendered and hardware not yet installed

are deferred and recognized as revenue as services are provided.

These fees are recorded as current deferred revenue on the consolidated

balance sheet as the Company expects to satisfy any remaining performance obligations as well as recognize the related revenue within

the next twelve months.

Accordingly, the Company has applied the practical expedient regarding deferred revenue to exclude the value of

remaining performance obligations if (i) the contract has an original expected term of one year or less or (ii) the Company recognizes

On occasion we host conference for our current and potential clients.

Conference registration revenues are recognized at a point in time when the related conference is held and the Company has satisfied

its performance obligations.

Payments received in advance are recorded as deferred revenue.

These charges are recorded as

consulting fees in our income statement.

Customer billings for services not yet rendered and hardware not yet

installed are deferred and recognized as revenue as services are provided.

These fees are recorded as current deferred revenue on the

consolidated balance sheet as the Company expects to satisfy any remaining performance obligations as well as recognize the related revenue

within the next twelve months.

Accordingly, the Company has applied the practical expedient regarding deferred revenue to exclude the

value of remaining performance obligations if (i) the contract has an original expected term of one year or less or (ii) the Company recognizes

revenue in proportion to the amount it has the right to invoice for services performed.

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ASC 820 also describes three levels of inputs that may be used to measure

Observable inputs that reflect unadjusted quoted prices for

identical assets or liabilities traded in active markets.

Inputs other than quoted prices included within Level 1 that

are observable for the asset or liability, either directly or indirectly.

Observable inputs that reflect unadjusted quoted prices

for identical assets or liabilities traded in active markets.

Inputs other than quoted prices included within Level 1

that are observable for the asset or liability, either directly or indirectly.

Inputs that are generally observable.

These inputs may be used

with internally developed methodologies that result in management’s best estimate of fair value.

These inputs may be

used with internally developed methodologies that result in management’s best estimate of fair value.

Financial instruments consist principally of cash, accounts receivable,

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or credit risks arising from these financial instruments.

As of September 30, 2024 and September 30, 2023, we held no assets that

were required to be measured at fair value on a recurring basis.

There were no transfers between levels in the fair value hierarchy during

the years ended September 30, 2024 and September 30, 2023, respectively.

As of September 30, 2025 and September 30, 2024, we held no assets

that were required to be measured at fair value on a recurring basis.

There were no transfers between levels in the fair value hierarchy

during the years ended September 30, 2025 and September 30, 2024, respectively.

RECENT ADOPTED ACCOUNTING PRONOUNCEMENTS

Troubled Debt Restructurings and Vintage Disclosures

In March 2022, the Financial Accounting Standards Board (the “FASB”)

issued ASU 2022-02, Financial Instruments – Credit Losses (Topic 326):

Troubled Debt Restructurings and Vintage Disclosures (“ASU

2022-02”), which eliminates the accounting guidance on troubled debt restructurings (“TDRs”) for creditors in ASC 310,

Receivables (Topic 310), and requires entities to provide disclosures about current period gross write-offs by year of origination.

ASU 2022-02 updates the requirements related to accounting for credit losses under ASC 326, Financial Instruments – Credit Losses

(Topic 326), and adds enhanced disclosures for creditors with respect to loan refinancings and restructurings for borrowers experiencing

financial difficulty.

ASU 2022-02 was effective for the Company October 1, 2022.

The adoption of ASU 2022-02 did not have a material impact

on the Company’s consolidated financial statements.

ASU 2025-05 — Financial Instruments—Credit Losses (Topic

Measurement of Credit Losses for Accounts Receivable and Contract Assets

In July 2025, the FASB issued ASU 2025-05, which provides (1) all entities

with a practical expedient and (2) entities other than public business entities with an accounting policy election when estimating expected

credit losses for current accounts receivable and current contract assets arising from transactions accounted for under Topic 606, Revenue

from Contracts with Customers.

The practical expedient allows an entity to assume that, when estimating

expected credit losses, current conditions as of the balance sheet date remain unchanged for the remaining life of the asset.

The accounting

policy election permits nonpublic entities that elect the practical expedient to also consider collection activity occurring after the

balance sheet date when estimating expected credit losses.

The standard is effective for fiscal years beginning after December

15, 2025, and for interim periods within those annual reporting periods.

Early adoption is permitted.

Accordingly, the Company will adopt ASU 2025-05 for its fiscal year

beginning July 1, 2026.

In November 2023, the FASB issued ASU No.

2023-07, Segment Reporting

(Topic 280) – Improvements to Reportable Segment Disclosures, to require enhanced disclosures that include reportable segment expenses.

The amendments in this update provide that a business entity disclose significant segment expenses, segment profit or loss (after significant

segment expenses), and allows reporting of additional measures of a segments profit or loss if used in assessing segment performance.

Such disclosures apply to entities with a single reportable segment.

These amendments were effective for the Company in 2024 and retrospectively

to all prior periods using the significant segment expense categories identified.

The impact of the adoption of the amendments in this

update was not material to the Company’s consolidated financial position and results of operations, as the requirements impact only

segment reporting disclosures in the footnotes to the Company’s consolidated financial statements.

RECENT ISSUED ACCOUNTING PRONOUNCEMENTS

The Company continues to monitor new accounting pronouncements issued by

the FASB and does not believe any accounting pronouncements issued through the date of this report will have a material impact on the

The Company continues to monitor new accounting pronouncements issued

by the FASB and does not believe any accounting pronouncements issued through the date of this report will have a material impact on the

Company’s Financial Statements.

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LEASE ACCOUNTING

We determine if an arrangement is a lease, or contains a lease, at inception

and record the leases in our financial statements upon lease commencement, which is the date when the underlying asset is made available

for use by the lessor.

We determine if an arrangement is a lease, or contains a lease, at

inception and record the leases in our financial statements upon lease commencement, which is the date when the underlying asset is made

available for use by the lessor.

We have a lease agreement with lease and non-lease components and have

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lease component and, the lease component, if accounted for separately, would be classified as an operating lease.

We have elected not to present short-term leases on the balance sheet as

these leases have a lease term of 12 months or less at lease inception and do not contain purchase options or renewal terms that we are

reasonably certain to exercise.

We have elected not to present short-term leases on the balance sheet

as these leases have a lease term of 12 months or less at lease inception and do not contain purchase options or renewal terms that we

are reasonably certain to exercise.

All other lease assets and lease liabilities are recognized based on the present value of lease payments

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rate based on the information available at lease commencement date in determining the present value of lease payments.

In general, leases, where we are the lessee, may include options to extend

the lease term.

In general, leases, where we are the lessee, may include options to

extend the lease term.

These leases may include options to terminate the lease prior to the end of the agreed upon lease term.

For purposes of

calculating lease liabilities, lease terms include options to extend or terminate the lease when it is reasonably certain that we will

of calculating lease liabilities, lease terms include options to extend or terminate the lease when it is reasonably certain that we will

exercise such options.

Lease expense for operating leases is recognized on a straight-line basis

over the lease term as cost of revenues or operating expenses depending on the nature of the leased asset.

Certain operating leases provide

for annual increases to lease payments based on an index or rate.

We calculate the present value of future lease payments based on the

index or rate at the lease commencement date.

Differences between the calculated lease payment and actual payment are

expensed as incurred.

Lease expense for operating leases is recognized on a straight-line

basis over the lease term as cost of revenues or operating expenses depending on the nature of the leased asset.

Certain operating leases

provide for annual increases to lease payments based on an index or rate.

We calculate the present value of future lease payments based

on the index or rate at the lease commencement date.

Differences between the calculated lease payment and actual payment

are expensed as incurred.

Amortization of finance lease assets is recognized over the lease term as cost of revenues or operating expenses

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Financial Statements and Supplementary Data.

The financial statements and related notes are included as part of this

report as indexed in the appendix on page F-1, et seq .

The financial statements and related notes are included as part of

this report as indexed in the appendix on page F-1, et seq .

Changes in and Disagreements with Accountants on Accounting

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis