What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-02-13 compared with 2025-07-30 · 108 added, 118 removed, 56 unchanged (80% of the section changed)

27 unchanged sentences

ReadyOp facilitates the marketing and sales of

subscriptions to the ReadyOp ™ and ReadyMed ™ platform and the AudioMate IP gateways discussed

ReadyOp is a proprietary, innovative web-based planning, communications

and operations platform for efficiently and effectively planning, managing, communicating, and directing operations and emergency response.

ReadyOp is used by local, state and federal government agencies, corporations, school districts, utilities, hospitals and others to manage

and report daily operations as well as the ability to handle incidents and emergency situations.

ReadyOp is offered as a software as a

service (SAAS) program on an annual contract basis although an increasing number of clients have requested multi-year agreements.

In March 2018, the Company approved the spin-off of VoiceInterop, Inc.

(“Voiceinterop”), one of the Company’s wholly-owned subsidiaries, into a separate company under a Form S-1 registration

filed with the United States Securities and Exchange Commission.

subscriptions to the ReadyOp™ and ReadyMed™ platform, Alastar platforms and the AudioMate IP gateways discussed below.

ReadyOp™ Software

ReadyOp is a proprietary, innovative web-based planning and

communications platform for efficiently and effectively planning, managing, communicating, and directing operations and emergency response.

ReadyOp is used by local, state and federal government agencies, corporations, school districts, utilities, hospitals and others

to manage and report daily operations as well as the ability to handle incidents and emergency situations.

ReadyOp is offered as

a software as a service (SAAS) program on an annual contract basis although an increasing number of clients have requested multi-year

ReadyOp requires no new or on-site hardware or programming by clients

and provides multiple options for communications including radio interoperability using the Company's AudioMate gateways.

and operations can be built and stored securely in ReadyOp on a by-location, region and systemwide basis.

Assets can be listed along

with their location, person to contact and other information that may be needed.

Diagrams, charts, maps, pictures, report forms

and other documentation can be securely stored yet immediately available securely from any location.

ReadyOp also provides efficient

planning and response for responding to disasters and for continuity of operations (COOP) and recovery.

ReadyOp is the COOP platform

for multiple organizations including many federal agencies.

ReadyMed™ Software

In October 2019, the Company acquired the ReadyMed software platform

from Collabria LLC.

ReadyMed is a web-based secure communications platform initially designed for the healthcare industry.

This includes

hospitals, clinics, doctor's offices, health insurance companies, workers compensation insurance companies and many other segments of

the healthcare industry.

The Company offers both the ReadyOp and ReadyMed capabilities to clients and usually refers to the platform as

ReadyOp to avoid confusion in the marketplace of two platforms.

In exchange for this asset, the Company issued 12,000,000 shares of Common stock of the Company.

ReadyMed is a web-based

secure communications platform initially designed for the healthcare industry.

This includes hospitals, clinics, doctor's offices, health

insurance companies, workers compensation insurance companies and many other segments of the healthcare industry.

The platform provides

caregivers with patient tracking capability and allows physicians and other healthcare entities to track patient progress after medical

treatment and/or release from hospital care.

The software also enables monitoring and reporting of patients in medium- and long-term care.

Additionally, the platform provides secure communications capabilities and recordkeeping to track the healing process of patients, record

their recovery and monitor their medications.

During the COVID-19 pandemic this software proved beneficial to multiple federal and state

agencies and clients in the healthcare industry.

The Company offers both the ReadyOp and ReadyMed capabilities to clients and usually

refers to the platform as ReadyOp to avoid confusion in the marketplace of two products.

Alastar Software

On August 1, 2024, the Company acquired a group of similar assets from

9 unchanged sentences

ReadyOp Communications subsidiary in conjunction with the current ReadyOp and ReadyMed activities.

FOR THE THREE MONTHS ENDED JUNE 30, 2025 COMPARED TO THE THREE MONTHS

ENDED JUNE 30, 2024

Revenues increased 7.31% to $1,078,530 for the three months ended June

30, 2025 as compared to $1,005,050 for the three months ended June 30, 2024.

The primary reason for the increase was an increase in revenue

from the ReadyOp platform and the addition of the Alastar platform from $702,446 in 2024 to $948,892 in 2025.

There was a decrease

in sales of ReadyOp hardware products from $302,604 in 2024 to $17,550 in 2025.

Consulting fees and related income increased from $0 in

2024 to $112,088 in 2025 due to an increase in consulting activity.

The Company continues to support the clients who were using Alastar

prior to the acquisition plus add additional new clients.

Additionally, the Company has been transitioning much of the Alastar functionality

into the ReadyOp platform as well as enhance the capabilities for existing and new clients.

The Company plans to continue the transition

and enhancement activities for at least the next two years.

AudioMate IP Gateways

The Company offers a proprietary line of Internet Protocol Gateways

branded as AudioMate 360 IP Gateway.

The AudioMate 360 IP Gateway was designed to provide an Internet Protocol Gateway to users of unified

group communications.

The AudioMate units are currently being sold directly to end-users by the Company's sales teams and by Value Added

Resellers ("VARs").

More than 1,000 end-users in the United States and 18 foreign countries have purchased the Company's AudioMate

Although other devices are available that perform the same or similar functions, we believe that our price for the AudioMate

360 IP Gateway is competitive with prices other companies are charging for similar devices.

In March 2018, the Company approved the spin-off of VoiceInterop, Inc.

(“Voiceinterop”), one of the Company’s wholly-owned subsidiaries, into a separate company under a Form S-1 registration

filed with the United States Securities and Exchange Commission.

FOR THE THREE MONTHS ENDED DECEMBER 31, 2025 COMPARED TO THE THREE

MONTHS ENDED DECEMBER 31, 2024

Revenues increased 29.48% to $1,252,539 for the three months ended

December 31, 2025 as compared to $967,324 for the three months ended December 31, 2024.

The primary reason for the increase was an increase

in revenue from the ReadyOp and Alastar platforms from $851,301 in 2024 to $1,004,282 in 2025.

There was also an increase in sales of

ReadyOp hardware products from $21,395 in 2024 to $29,500 in 2025.

Consulting fees and related income increased from $94,628 in 2024 to

$218,757 in 2025 due to an increase in consulting activity.

Cost of Revenue

Cost of revenues decreased 17.58% to $263,509 for the three months

ended June 30, 2025 as compared to $319,728 for the three months ended June 30, 2024.

Cost of revenues decreased to $174,963 for the three months ended December

31, 2025 as compared to $214,938 for the three months ended December31, 2024.

The primary reason for the decrease was due to a decrease

in expenses associated with trade show attendance and other marketing expenses.

Gross profits were $1,077,576 and $752,386 for the

three months ended June 30, 2025 and 2024, respectively.

The primary reason for the decrease was due a decrease in hardware product

sales and associated decrease in related costs for the three months ended June 30, 2025.

three months ended December 31, 2025 and 2024, respectively.

Operating Expenses

Operating expenses increased 10.70% to $894,787 for the three months

ended June 30, 2025 compared to $606,721 for the three months ended June 30, 2024.

The increase was primarily due to administrative expenses

and selling expenses.

General and administrative expenses increased by $259,118 or 49.59% as a result of the increase in general business

expenses, an increase in headcount and personnel related costs associated with the addition of new employees.

For the three months ended June 30, 2025, selling expenses were $85,840

compared to $79,913 for the three months ended June 30, 2024.

This increase was primarily due to an increase in travel expenses as

Research and development expenses were $2,000 for the three months

ended June 30, 2025 and 2024.

There was no change in research and development expenses.

The Company's other income increased 43.95% to $9,004 for the three

months ended June 30, 2025 as compared to $6,255 in other income for the three months ended June 30, 2024.

This increase was due to an

increase in interest income on treasury bill investments.

(Loss) Income before Income Taxes

The Company’s loss before income taxes was $50,862, during the

three months ended June 30, 2025, as compared to income of $84,856 before income taxes for the three months ended June 30, 2024.

The 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 $61,093 for the three

months ended June 30, 2025 as compared to a net income of $74,625 for the three months ended June 30, 2024.

The decrease was primarily

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

The increased costs were partially

due to addition of new employees associated with Alastar and costs associated FedRAMP certification.

The preferred stock dividends remained

FOR THE NINE MONTHS ENDED JUNE 30, 2025 COMPARED TO THE NINE MONTHS

ENDED JUNE 30, 2024

Revenues increased 37.49% to $3,001,557 for the nine months ended June

30, 2025 as compared to $2,183,110 for the nine months ended June 30, 2024.

The primary reason for the increase was an increase in revenue

from the ReadyOp platform and the addition of the Alastar platform from $1,842,411 in 2024 to $2,680,468 in 2025.

There was a decrease

in sales of ReadyOp hardware products from $340,699 in 2024 to $90,050 in 2025.

Consulting fees and related income increased from $0 in

2024 to $231,039 in 2025 due to an increase in consulting activity.

Cost of Revenue

Cost of revenues increased 11.15% to $659,098 for the nine months ended

June 30, 2025 as compared to $592,975 for the nine months ended June 30, 2024.

Gross profits were $2,342,459 and $1,590,135 for the nine

months ended June 30, 2025 and 2024, respectively.

The primary reason for the increase was due to an increase in ReadyOp and Alastar

platform sales and consulting activity.

Operating Expenses

Operating expenses increased 53.12% to $2,493,718 for the nine months

ended June 30, 2025 compared to $1,628,603 for the nine months ended June 30, 2024.

The increase was primarily due to administrative expenses

with a slight offset decrease in research and development expenses, and selling expenses.

ended December 31, 2025 compared to $808,306 for the three months ended December 31, 2024.

The increase was primarily due to administrative

expenses, with a slight offset in research and development expenses, and selling expenses.

General and administrative expenses increased

1 unchanged sentence

with the addition of new employees.

There were also charitable contributions paid during the nine months.

For the nine months ended June 30, 2025, selling expenses were $203,830

compared to $218,062 for the nine months ended June 30, 2024.

This decrease was primarily due to a increase in travel expenses as

Research and development expenses were $8,000 for the nine months ended

June 30, 2025, as compared to $18,603 for the nine months ended June 30, 2024.

This increase was primarily due to research and development

The Company's other income decreased 63.15% to $23,180 for the nine

months ended June 30, 2025 as compared to $62,900 in other income for the nine months ended June 30, 2024.

This decrease was due

to a decrease in extinguishment of liabilities of $42,941 for the nine months ended June 30, 2024 and an increase in interest income on

treasury bill investments of $3,221 for the nine months ended June 30, 2025.

(Loss) Income before Income Taxes

The Company’s loss before income taxes was $128,079, during the

nine months ended June 30, 2025, as compared to income of $24,432 before income taxes for the nine months ended June 30, 2024.

The 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 $158,771 for the nine

months ended June 30, 2025 as compared to a net loss of $6,373 for the nine months ended June 30, 2024.

The decrease was primarily due

to an increase in administrative expenses and offset by an increase in sales of ReadyOp licenses The increased costs were partially due

to addition of new employees associated with Alastar and costs associated FedRAMP certification .

The preferred stock dividends remained

There were also charitable contributions paid during the three months.

For the three months ended December 31, 2025, selling expenses were

$25,927 compared to $53,089 for the three months ended December 31, 2024.

This decrease was primarily due to a decrease in advertising

and off set by a slight increase in travel expenses as the Company and recovery of credit losses associated with bad debt write off.

Research and development expenses were $2,000 for the three months

ended December 31, 2025, as compared to $2,000 for the three months ended December 31, 2024.

There was no change in research and development

Other Income/(Expenses)

The Company's other income increased by $5,222 from other income of

$6,795 during the three months ended December 31, 2024 as compared to $12,017 in other income for the three months ended December 31,

This increase was due to an increase in interest income on treasury bill investments of $9,084 for the three months ended December

Income (Loss) before Income Taxes

The Company’s income before income taxes was $194,806, during

the three months ended December 31, 2025, as compared to loss of $49,125 income before income taxes for the three months ended December

31, 2024 due to the increase in revenue that was partially offset by the increase in the Company’s operating expenses.

Net Income (Loss) Income Attributable to Common Stockholders

Net income attributable to common stockholders was $184,463 for the

three months ended December 31, 2025 as compared to a net loss of $59,468 for the three months ended December 31, 2024.

The increase was

primarily due to an increase in revenue which was partially offset by an increase in operating expenses.

The increased costs were partially

due to addition of new employees associated with Alastar .

The preferred stock dividends remained consistent.

LIQUIDITY AND CAPITAL RESOURCES

For the nine months ended June 30, 2025, net cash used in operations

For the three months ended December 31, 2025, net cash provided in

operations of $147,634 was the result of a net income of $194,806, depreciation and amortization expense of $5,393, an increase of accounts

receivable of $86,849.

These were offset by a decrease in accounts payable of $43,900, a recovery of credit losses of $27,828, a decrease

in deferred revenue of $45,489, a decrease in inventory of $2,152 and an increase in prepaid expenses of $24,349.

For the three months ended December 31, 2024, net cash used in operations

of $164,714 was the result of a net loss of $49,125, depreciation and amortization expense of $5,483, amortization of operating lease

of $5,983, increase in provision of credit losses of $20,500, a loss on sale of fixed assets of $483, an increase in prepaid expenses

of $65,988 and an increase in accounts payable of $16,463 and an increase in deferred revenue of $12,975.

These were offset by a decrease

of accounts receivable of $47,808, a decrease in inventory of $11,429, and a decrease in operating lease liability of $6,506.

For the nine months ended June 30, 2024, net cash provided by operations

of $398,421 was the result of a net income of $24,432, depreciation expense of $5,140, amortization of operating lease of $17,948, extinguishment

of liabilities of $42,941, increase in provision for credit losses of $9,000, increase in prepaid expenses of $5,137, a decrease in accounts

receivable of $129,880, an increase in inventory of $107,997 .

These were offset by an increase in accounts payable of $84,300 and an

increase in deferred revenue of $301,988.

Net cash used in investing activities was $4,768 and $126,185 for the

nine months ended June 30, 2025 and 2024, respectively, which was for the purchase of fixed and intangible assets.

of $5,983, an increase of accounts receivable of $70,019.

These were offset by a decrease in accounts payable of $23,394, a decrease in

deferred revenue of $39,341, a decrease in inventory of $5,890 and a decrease in prepaid expenses of $6,315.

Net cash used in investing activities was $1,613 and $0 for the three

months ended December 31, 2025 and 2024, respectively, which was for the purchase of fixed assets.

Critical Accounting Estimates

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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-Q

Item 2. Management’s Discussion and Analysis