DHTI 10-K & 10-Q changes, risk factors and insider trading
Dalrada Technology Group, Inc. · OTC · Services-Help Supply Services · CIK 725394 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
Not available: the section could not be located automatically in both filings (non-standard layout or incorporated by reference). See the original filing. Open the filing on SEC.gov.
Management's Discussion & Analysis (MD&A)
New heading “Industry Overview”
New heading “Specialty Pharmaceutical and Infusion Market”
New heading “Health Care Education Market”
New heading “Heat Pump Technology Market”
New heading “Deposition Technology Market”
New heading “Energy Services Market”
Removed heading “Off-Balance Sheet Arrangements”
Removed heading “Subsequent Events”
Largest changes
“The total balance for Federal Accrued Payroll Taxes is accumulated on a quarterly basis beginning on their respective quarterly filing dates. Accrued Interest is compounded daily at an Effective Annual Interest Rate of approximately seven percent. The individual quarterly sub-totals have a calculated expiration date of ten years according to the Internal Revenue Service (“IRS”) statute of limitations. This timeline can be extended because of bankruptcy or other legal action that is filed by the Company (Code 520 per IRS Federal Account Transcripts). …”see in full comparison
“We continually evaluate our liquidity requirements, capital needs and availability of capital resources based on our operating needs and our planned growth initiatives. Our future working capital needs will depend on many factors, including the rate of our business and revenue growth, the availability and cost of material and other resources required to build and deliver products in accordance with our existing or future product orders, the timing of a successful commercialization of the DCT-1 heat pump. …”see in full comparison
“ASC 805, Business Combinations (“ASC 805”), applies the acquisition method of accounting for business combinations to all acquisitions where the acquirer gains a controlling interest, regardless of whether consideration was exchanged. …”see in full comparison
“We cannot be certain that our plans and initiatives would be effectively implemented within one year after the filing date of this report. Without giving effect to the prospect of raising additional capital, increasing product revenue in the near future or executing other mitigating plans, many of which are beyond our control, it is unlikely that we will be able to generate sufficient cash flows to meet our required financial obligations, including our debt service and other obligations due to third parties. …”see in full comparison
“Step 4: Determine the fair value of identifiable intangible assets acquired; and, Step 5: Allocate the remaining consideration to goodwill and assess the reasonableness of the overall conclusion Related Party Transactions Related party transactions are conducted with parties with which the Company has a close association, such as majority owned subsidiaries, its executive, managers, and their families. …”see in full comparison
Full comparison: every changed paragraph (85)
Industry Overview
Dalrada has five business divisions: Genefic, Dalrada Climate Technology, Dalrada Precision Manufacturing, Dalrada Technologies and Dalrada Corporate. Within each of these divisions, the Company focuses on various markets within health care and technology.
Specialty Pharmaceutical and Infusion Market
The specialty pharmaceutical and infusion market is a large and rapidly growing sector, characterized by a shift from hospital to outpatient and in-home care settings. Growth drivers include an aging population, increasing prevalence of chronic diseases and the introduction of novel, high-cost therapies.
Health Care Education Market
The healthcare education market is experiencing significant growth driven by technology integration, an aging population, and a high demand for skilled healthcare workers.
Heat Pump Technology Market
The global heat pump technology market continues to grow, primarily driven by the efficiency of heat pumps for decarbonization, significant government incentives, integration with renewable energy and smart systems and technological advances.
Deposition Technology Market
The deposition technology market, driven by demand in the semiconductor, electronics and solar industries, is experiencing robust growth. Key market drivers include the need for miniaturized devices, high-performance materials, and advanced coatings for new applications.
Energy Services Market
Digital engineering is a strategic, integrated digital approach that incorporates authoritative data, models and computational tools to support system development, operation and maintenance throughout the entire lifecyle. It connects disparate data and models, enabling engineers to collaborate, simulate, analyze and innovate more efficiently in virtual environments. This methodology transforms traditional linear engineering processes into iterative one, making product development more agile and accelerating the deployment of new technologies.
During the year ended June 30, 2025, the Company
acquired Grand Entrances to complement the Dalrada Climate Technology segment. During the year ended June 30, 2024, the Company acquired
aIV businessServices, LLC to complement the Genefic segment.
Refer to “Note 4.3. Business Combinations and”
Asset Acquisition” to the Condensed Consolidated Financial Statements for discussion regarding the Company’s acquisitions.
Total Revenues for Genefic increaseddecreased to $17,684,765,$10,424,584,
or 12.3%21.1% from last year’s revenue of $15,740,919.$13,217,899.
Genefic Specialty Pharmacy revenue decreased $6,858,370, or 51.9% compared to $13,217,899 in the prior year ended June 30, 2024. The decrease was a result of a shift from high volume, low margin specialty pharmacy prescriptions to a lower volume, high margin prescription model. Genefic Specialty Pharmacy’s debt service during fiscal year also affected revenue growth. The cost of revenue decreased $4,042,547, or 40.2% compared to $10,055,733 in the prior year ended June 30, 2024.
IV Services’ revenue increased $1,811,589, or 696.59% compared to $260,115 in the prior year ended June 30, 2024. The increase was a result of the infusion pharmacy operating for a full 12 month period.
Genefic Specialty Pharmacy (formerly ‘Watson’)
revenue increased $13,049,089, or 453.8% compared to $2,875,326 in the prior year. The increase was a result of obtaining additional accreditations
including the Healthcare Merchant Accreditation from the National Association of Boards of Pharmacy (NABP) where it can be listed on the
official Accredited Merchants’ list along with larger pharmacy retailers CVS, Walgreens, and Walmart, among others. With Healthcare
merchant Accreditation, Genefic Specialty Pharmacy has proven its standards and practices to be in line with the requirements set by large
online advertising platforms such as Google and Bing. Genefic Specialty Pharmacy also obtained the Specialty Pharmacy Accreditation and
Mail Service Pharmacy Accreditation from the Utilization Review Accreditation Commission (URAC). NABP’s Specialty Pharmacy Accreditation
signifies to patients, payers, and providers that the pharmacy organization is recognized for providing an advanced level of pharmacy
services and disease management for patients taking medications that meet special handling, storage and distribution requirements. NABP’s
Digital Pharmacy Accreditation signifies to patients, payers, and providers that the pharmacy organization is recognized for its commitment
to the highest quality health care and safe pharmacy practices over the internet. The specific Digital Pharmacy Accreditation was created
to recognize safe and legitimate pharmacies with an internet presence that stands out against the ever-growing list of rogue pharmacy
websites. These accreditations allowed Genefic Specialty Pharmacy to ramp up a sales team in conjunction with the ability to fill specialty
medications. Lastly, Genefic Specialty Pharmacy was granted a number of hemophilia contracts throughout the year. The cost of revenue
was $10,612,296.
Pala Diagnostics (“Pala”) and Empower
Genomics (“Empower”) generated $27,910 of the total revenue for Genefic through its complexity CLIA diagnostic laboratories
compared with $10,338,768 in the prior year. The decrease in revenue was a result of the closure of the CLIA diagnostic laboratories,
which focused primarily on COVID-19 testing services with validated PCR and Rapid antigen testing.
DCI generated $1,338,960,$1,993,351, or 7.6%19.1% of the
total revenue
for Genefic. DCI’s revenue increased by $247,026$654,391 from the prior year,year ended June 30, 2024, or 22.6%.48.9%. The increase in
revenue was a result of obtaining
Licensed Vocational Nursing (“LVN”) accreditation along with a rising number of students
entering and graduating from DCI’s
Certified Nursing Assistant (“CNA”), Medical Assistant and Home Health Aid (“HHA”)
Certification programs.
Total Revenues for Dalrada Precision Manufacturing
decreased to $2,447,148, or 49.8% from last year’s revenue of $4,873,225.
Dalrada Precision Parts generated $1,130,905, or 46.2%
of the total revenue for Dalrada Precision Manufacturing. Revenue for Dalrada Precision Parts decreased by $1,550,001, or 57.8% from the
prior year. The decrease in revenue was due to the loss of its primary customer in precision parts manufacturing. The cost of revenue
was $427,364, or 37.8% of revenue.
DepTec generated $1,242,642, or 50.8% of the total
revenue for Dalrada Precision Manufacturing. Revenue for DepTec decreased by $49,661, or 3.8% from the prior year. DepTec records its
revenue using a cost-based input method, by which we use actual costs incurred relative to the total estimated contract costs to determine,
as a percentage, progress toward contract completion. The cost of revenues was $1,279,752, or 103.0% of revenue.
Ignite’s cleaners, parts washers and degreaser
products generated $73,601, or 3.0% of total revenue for Dalrada Precision Manufacturing. Revenue for Ignite decreased by $231,657, or
75.9% from the prior year. The decrease in revenue was due to ramping down operations of the company. The cost of revenue was $77,536,
or 105.3% of revenue, and includes inventory adjustments.
Dalrada Climate Technology (Formerly Dalrada
Energy Energy
Services) Total Revenues for Dalrada Climate Technology
increased decreased
to $3,674,697,$5,276,827, or 48.1%188.17% from lastthe year’sprior year ended June 30, 2024 revenue of $7,075,414.$2,804,236.
Dalrada Energy Services generated $567,930, $1,039,181,
or 15.5%
13.55% of the total revenue for the Dalrada Climate Technology segment. Revenue for Dalrada Energy Services decreasedincreased by $3,943,603, $751,061,
or 87.4%
260.7% from the prior year.year ended June 30, 2024. The decreaseincrease in revenue was a result of nearing completion ofclosing the Averett University project.
Bothof Brothers Construction (“Bothof”)
generated $2,796,199,
$4,246,357, or 76.1%56.2% of the total revenue for the Dalrada Climate Technology segment. Bothof revenue increased by $232,318, $2,040,809,
or 9.1%73.8% from lastthe year.
prior year ended June 30, 2024. Bothof generated revenue in its construction and contracting services throughout the
United States. Bothof Brothers’ customers include
both residential and commercial projects in the private and public sectors. During
the year, $1,697,485$1,602,577 of revenue was generated through
related parties. The cost of revenue wasincreased $3,176,886,$327,131, or 113.6%12.3% of revenue Total Revenue for Dalrada Technologies” sole
subsidiary, Prakat, decreasedcompared to $1,373,136, or 33.0% from$2,664,363
in the prior year’s revenue of $2,049,411. The decrease in revenue was a
result of several contracts ending their terms duringyear the year.prior year ended June 30, 2024.
Grand Entrances, acquired in August of 2024, generated $1,243,171 or 15.38% of the total revenue for the Dalrada Climate Technology segment. Grand Entrances customers consist of contractors, designers and residential customers.
Total Revenues for Dalrada Precision Manufacturing decreased to $448,409, or 81.7% from the prior year ended June 30, 2024 revenue of $2,447,148.
Dalrada Precision Parts generated $50,251, or 11.2% of the total revenue for Dalrada Precision Manufacturing. Revenue for Dalrada Precision Parts decreased by $1,080,654, or 95.6% from the prior year ended June 30, 2024. The decrease in revenue was due to the loss of its primary customer in precision parts manufacturing. The cost of revenue decreased $372,819, or 87.2% compared to $427,364 in the prior year ended June 30, 2024.
DepTec generated $374,102, or 83.4% of the total revenue for Dalrada Precision Manufacturing. Revenue for DepTec decreased by $868,540, or 69.9% from the prior year ended June 30, 2024. DepTec records its revenue using a cost-based input method, by which we use actual costs incurred relative to the total estimated contract costs to determine, as a percentage, progress toward contract completion. The cost of revenues decreased $372,819, or 87.2% compared to $427,364 in the prior year ended June 30, 2024.
Ignite’s cleaners, parts washers and degreaser products generated $22,116, or 4.9% of total revenue for Dalrada Precision Manufacturing. Revenue for Ignite decreased by $51,485, or 70.0% from the prior year ended June 30, 2024. The decrease in revenue was due to ramping down operations of the company. The cost of revenues decreased $62,515, or 80.6% compared to $77,536 in the prior year ended June 30, 2024.
Total Revenue for Dalrada Technologies’ sole subsidiary, Prakat, decreased to $1,348,747, or 1.8% from the prior year ended June 30, 2024. The decrease in revenue was a result of several contracts ending their terms during the year. The cost of revenues decreased $34,971 or 4% compared to $883,986 in the prior year ended June 30, 2024.
Total Corporate expenses decreased to $11,377,290,$9,873,610,
orby 2.4%,18.8%, compared to last year’s expenses of $11,660,710.$12,302,415.
Interest Expense decreased by $1,354,290 or 53.0%
from the prior year as a result of increases in related party debt as well as PPP loans and convertible debt issued in prior years. See
“Note 7. Notes Payable” to our audited condensed consolidated financial statements included in this Annual Report on Form
10-K for more information regarding our outstanding debt.
Stock-based compensation includes expenses related
to equity awards issued to employees and non-employee directors. Stock-based compensation increaseddecreased by $221,440,$3,158,651, or 5.5%62.1% from the prior
year.year ended June 30, 2024. See “Note 12.10. Stock-Based Compensation” to our audited condensed consolidated financial statements included
in this
Annual Report on Form 10-K for more information regarding our stock-based compensation.
Total Genefic expenses decreased to $7,266,439,$5,566,659, orby 36.6%,26.6%, compared
to last
year’s expenses of $11,468,627.$7,585,611.
Total Dalrada PrecisionClimate ManufacturingTechnology expenses decreasedincreased
to $2,011,817,$5,740,001, orby 51.4%,10.3%, compared to last year’s expenses of $4,136,885.$5,204,881.
Total Dalrada Precision Manufacturing expenses decreased to$1,282,290, by 36.3%, compared to last year’s expenses of $2,011,817.
Total Dalrada Climate Technology expenses increased
to $5,204,881, or 164.2%, compared to last year’s expenses of $1,969,829.
Total Dalrada Technologies expenses decreased
to $724,254,
or$561,733, 7.6%,by 22.4%, compared to lastthe year’sprior year ended June 30, 2024 expenses of $783,825.$724,254.
Other Expense increased to $4,203,880 compared to $2,430,952 for the year ended June 30, 2024.. The change in Other Expense of $1,862,938 was primarily due to an increase in interest expense of $1,962,395 and a change in fair value of contingent liability related to the true up in stock related to the Deposition Technology acquisition.
Other (Expense) Income increased by $2,806,572 or
844.8% from a $332,236 in Other Income in the prior year to a $2,474,336 Other Expense in the current year. The change in Other Expense
was a result of $2,090,978 of “Gain on expiration of accrued payroll taxes” due to quarterly tax liabilities that expiring
during fiscal 2023, $500,000 related to the sale of the Dalrada Energy Services intellectual property, and a $585,411 change in the fair
value of contingent liability all incurred in the prior year. Other expenses incurred for the fiscal year ended June 30, 2024 consisted
of interest expense of $1,213,441 and a change in fair value of the contingent liability of $511,892.
Net Income (Loss)
Net loss for the year ended June 30, 2024,2025, was
$24,672,190 $23,250,181
compared to a Netnet loss of $20,627,721$29,185,898 during the year ended June 30, 2023.2024. The decrease in net loss for the year ended June
30, 2025 was mainly attributed to a centralization of operational costs across all operating segments and a reduction of unproductive
activities.
As of June 30, 2024,2025, the Company has cash and
cash equivalents of $502,094. The Company had current assets
of $13,145,412$7,741,021 and current liabilities of $13,844,784 compared$15,742,840compared with current
assets of $9,817,045$8,605,651 and current liabilities of $10,019,465
$15,690,957 at June 30, 2023.2024. The continuation of the Company as a going concern is dependent
upon successful financing through equity and/or debt
investors and growing the subsidiaries anticipated to be profitable while reducing
investments in areas that are not expected to have
long-term benefits.
During the year ended June 30, 2025, we funded our business operations, including capital expenditures and working capital requirements, principally from cash and cash equivalents and issuance of debt and common stock. Our operations used $17,972,434 of cash during the twelve months ended June 30, 2025.
Throughout the year, revenue for the Genefic, Dalrada Climate Technology and Dalrada Precision Manufacturing segments did not meet our expectations, which caused substantial losses within each respective segment. Genefic experienced a reduction in sales as the Genefic Specialty Pharmacy pivoted to a different sales model and high debt. Dalrada Climate Technology experienced delays in commercializing its proprietary DCT-1 heat pump and ramping up its residential heat pump platform, while facing high operating costs. Dalrada Precision Manufacturing’s precision manufacturing business lost a significant customer during the year which led to a material loss in over revenue and cash flow. Furthermore, the Dalrada Corporate segment continued to generate significant expenses throughout the year ended June 30, 2025.
We have undertaken plans and initiatives, including cutting costs across all segments by the centralization of certain resources for all entities, and focusing our sales team on products and services to generate immediate sales. Our plans include finishing the percentage of completion projects for DepTec, entering more construction contracts through Bothof Brothers Construction, ramping up the new specialty pharmacy business model and pursuing partnerships to help expedite the commercialization of the DCT-1 heat pump.
We cannot be certain that our plans and initiatives would be effectively implemented within one year after the filing date of this report. Without giving effect to the prospect of raising additional capital, increasing product revenue in the near future or executing other mitigating plans, many of which are beyond our control, it is unlikely that we will be able to generate sufficient cash flows to meet our required financial obligations, including our debt service and other obligations due to third parties. The existence of these conditions raises substantial doubt about our ability to continue as a going concern for the twelve-month period following the date of this report.
We currently intend to retain all available funds and any future earnings for use in the operation of our business. We have not entered into, and do not expect to enter into, investments for trading or speculative purposes. Our accounts receivable, accounts payable and inventory balances fluctuate from period to period, which affects our cash flow from operating activities. The amounts of these fluctuations vary depending on cash collections, customer mix, raw material lead times, the mix of vendor terms, and the timing of shipment of our products.
We continually evaluate our liquidity requirements, capital needs and availability of capital resources based on our operating needs and our planned growth initiatives. Our future working capital needs will depend on many factors, including the rate of our business and revenue growth, the availability and cost of material and other resources required to build and deliver products in accordance with our existing or future product orders, the timing of a successful commercialization of the DCT-1 heat pump. If we are unable to increase our revenues and manage our expenses in accordance with our operating plan, we may need to reduce the level or slow the timing of the growth plans contemplated by our operating plan, which would likely curtail or delay the growth in our business contemplated by our operating plan and could impair or defer our ability to achieve profitability and generate cash flow, or to seek to raise additional funds through debt or equity financings, strategic relationships, or other arrangements. There can be no assurance that we would be able to complete any proposed financing on terms acceptable to us, or at all, or that we otherwise will be successful in any of our other endeavors to continue to be financially viable and continue as a going concern. Our inability to raise additional capital on acceptable terms could have a material adverse effect on our business, prospects, results of operations, liquidity and financial condition. If we were to raise additional funds through the issuance of equity or convertible securities, the issuance could result in substantial dilution to existing stockholders, and the holders of those new securities may have rights, preferences and privileges senior to those of the holders of common stock. Furthermore, any decline in the market price of our common stock could make it more difficult for us to sell equity or equity-related securities in the future at a time and price that we deem appropriate.
The Company anticipates an increase in sales of Likido’s
Likido®ONE heat pump through its current and future customer base. Furthermore, the United States General Services Administration
(GSA) and the Department of Energy (DOE) have chosen the Company’s Likido®ONE heat pump to help reduce greenhouse emissions
from commercial buildings through high performance, low-carbon solutions set forth by the Green Proving Ground (GPG) program.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements that have
or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, Revenues or expenses,
results of operations, liquidity, capital expenditures or capital resources.
Subsequent Events
On July 10, 2024, the Company entered into a promissory
note with 1800 Diagonal Lending, LLC for $87,975. The promissory note includes a one-time interest charge of 14%, which was applied on
the issuance date, and matures on May 15, 2025. There are 4 monthly payments of $10,029 and one payment of $60,175 for a total payback
of $100,291.
On July 18, 2024, the Company executed a cash advance
agreement with Cali Flower Capital Inc. with a total advance of $200,00 and payback of $299,800.
On July 25, 2024, the Company executed a revenue purchase
agreement with 24 Capital with a total advance of $125,000 and payback of $187,375.
On July 29, 2024, the Company executed a revenue purchase
agreement with Tycoon Capital Group with a total advance of $125,000 and payback of $187,375.
What changed in the latest 10-Q
Risk Factors
Not applicable to smaller reporting entities
No wording changes found in this section.
Full comparison: every changed paragraph (0)
Management's Discussion & Analysis (MD&A)
Largest changes
“The Company continues to incur significant losses and raises substantial doubt regarding the Company’s ability to continue as a going concern. We anticipate needing additional liquidity during the next twelve months to fund operations, expand our subsidiaries, expand the growth of the pharmacies, continue the commercialization of our DCT heat pump units and expanding Bothof Brothers Construction’s development footprint. …”see in full comparison
“The Company continues to incur recurring operating losses, negative cash flows from operations, and significant working capital deficits, which raise substantial doubt regarding the Company’s ability to continue as a going concern within one year after the date these condensed consolidated financial statements are issued. The Company anticipates requiring additional liquidity over the next twelve months to fund ongoing operations, satisfy existing obligations, support working capital requirements, and continue strategic growth initiatives across certain subsidiaries and operating divisions.”see in full comparison
“There can be no assurance that management’s plans will be successful or that the Company will be able to generate sufficient revenues, improve cash flows, or obtain adequate financing to continue operations. Accordingly, the accompanying condensed consolidated financial statements do not include any adjustments relating to the recoverability or classification of recorded asset amounts, or the amounts and classification of liabilities, that may result should the Company be unable to continue as a going concern.”see in full comparison
“The Company’s ability to continue as a going concern is dependent upon a number of factors, including its ability to successfully execute its business plan, achieve and sustain profitable operations and positive operating cash flows, improve liquidity, collect outstanding receivables on anticipated timelines, maintain support from certain related parties and stakeholders, and obtain additional financing on commercially reasonable terms, if at all. …”see in full comparison
“Management’s plans to alleviate the conditions giving rise to the substantial doubt include improving operating performance, increasing revenues from existing subsidiaries, accelerating sales and marketing efforts related to high-margin product offerings and services, collecting outstanding accounts receivable balances, and pursuing additional sources of liquidity through debt financings, equity financings, strategic investments, asset monetization opportunities, and other capital raising activities. …”see in full comparison
see in full comparisonOurThe Company’s primary sources of liquidityarehistorically have consisted of cash generated fromoperationsoperations, proceeds from debt andcashequityonfinancings,handand advances from relatedpartyparties.loans.TheOurCompany’s primaryprimaryliquidity requirementsforincludeliquidity are to fund ourfunding working capital needs, debtservice,service obligations, operating leaseobligations,commitments, capitalexpendituresexpenditures, subsidiary expansion initiatives, and general corporateneeds.purposes.
Full comparison: every changed paragraph (54)
Our net loss and limited
working capital raise
substantial doubt about our ability to continue as a going concern. We incurred a net loss of $4,424,582$4,326,287 and $10,487,650
$14,813,937 during the three
and sixnine months ended DecemberMarch 31, 2025,2026, respectively. We will be required to raise substantial capital to fund our capital expenditures,
expenditures, working capital, and other cash requirements. We will continue to rely on related parties and seek other financing to complete
our business
plans. The successful outcome of future financing activities cannot be determined at this time and there are no assurances
that, if achieved,
we will have sufficient funds to execute our intended business plan or generate positive operational results.
Three Months Ended DecemberMarch 31, 20252026 and 20242025
The following table sets forth the results of
our our
operations for the three months ended DecemberMarch 31, 20252026 and 20242025:
Revenues for the three months ended DecemberMarch 31,
2026, 2025,
was $1,549,570$901,255 compared with revenue of $1,739,251$1,397,361 during the three months ended DecemberMarch 31, 2024,2025, a decrease of $189,681,$496,106, or 10.9%.or35.5%.
The decrease in revenues was primarily attributable to limited working capital to continue revenue growth and a shift in the sales pipelines
of Genefic Specialty Pharmacy.
Revenues for the three months ended December 31, 2025,
was $1,264,184 compared with revenue of $1,071,890 during the three months ended December 31, 2024, an increase of $192,294, or 17.9%.
The increase in revenue is due to a growth in residential development opportunities for Bothof Brothers Construction.
Revenues for the three months ended December 31, 2025,
was $137,641 compared with revenue of $21,534 during the three months ended December 31, 2024, an increase of $116,107, or 539.2%. The
increase in revenue is primarily attributable to finalizing projects by Deposition Technology.
Revenues for the three months ended DecemberMarch 31, 2025,
2026, was $308,538 $1,408,784
compared with revenue of $282,183$2,777,108 during the three months ended DecemberMarch 31, 2024,2025, ana increasedecrease of $26,355,$1,368,324, or 9.3%. The increase
in revenue was49.27%. a resultreduction ofin
projects closingunder onBothof newBrothers contracts.during the three month period ended March 31, 2026 compared to March 31, 2025.
Revenues for the three months ended March 31, 2026, was $44,904 compared with revenue of $127,674 during the three months ended March 31, 2025, a decrease of $82,770, or 644.8%. Deposition Technology closing out projects during fiscal 2026 and working to backfill the sales pipeline.
Revenues for the three months ended March 31, 2026, was $212,161 compared with revenue of $272,133 during the three months ended March 31, 2025, a decrease of $59,972, or 22.04%. The decrease in revenue was a result of closing on new contracts.
Cost of Revenues for the three months ended DecemberMarch
31, 2025,2026, was $721,025$440,114 compared to cost of revenues of $1,494,316$754,113 during the three months ended DecemberMarch 31, 2024,2025, a decrease of $773,291,$313,999,
or 51.7%.41.6%. The decrease in cost of revenues was primarily a result of limited working capital to continue revenue growth and a shift in
the sales pipelines of Genefic Specialty Pharmacy.
Cost of Revenues for the three months ended December
31, 2025, was $1,111,029, compared to cost of revenues of $544,745 during the three months ended December 31, 2024, an increase of $566,284,
or 204.0%.. The increase in revenue is due to a growth in residential development opportunities for Bothof Brothers Construction.
Cost of Revenues for the three months ended December
31, 2025, was $83,822 compared to cost of revenues of $25,712 during the three months ended December 31, 2024, an increase of $58,110,
or 226.0%. The increase in cost of revenue is primarily attributable to finalizing projects by Deposition Technology.
Cost of Revenues for the three months ended DecemberMarch
31, 2025,2026, was $215,027$1,119,930, compared to cost of revenues of $205,443$2,116,964 during the three months ended DecemberMarch 31, 2024,2025, ana increasedecrease of $9,584$997,034,
or 4.7%.47.1%. The increasedecrease in cost of revenuesrevenue wasis primarilydue to a resultreduction ofin closingprojects newunder contracts.Bothof Brothers during the three month period ended
March 31, 2026 compared to March 31, 2025.
Cost of Revenues for the three months ended March 31, 2026, was $81,770 compared to cost of revenues of $73,479 during the three months ended March 31, 2025, a increase of $8,291, or 11.28%. The increase in cost of revenue is due to Deposition Technology closing out projects with inventory during fiscal 2026.
Cost of Revenues for the three months ended March 31, 2026, was $144,255 compared to cost of revenues of $208,738 during the three months ended March 31, 2025, a decrease of $64,483 or 30.9%. The decrease in cost of revenues was primarily a result of closing new contracts.
Operating expenses for the three
months ended December
March 31, 2025,2026, was $1,286,702$1,002,185 compared to operating expenses of $2,206,407$1,646,990 during the three months ended DecemberMarch 31, 2024, 2025,
a decrease of $919,705
$644,805 or 41.6%.39.2%. The decrease in operating expenses was the result of an increase an overall decrease in operating activity
and sales within
the segment.
Operating expenses for the three months ended
DecemberMarch 31, 2025,2026, was $1,386,039$833,504 compared to operating expenses of $1,106,810$1,318,943 during the three months ended DecemberMarch 31, 2024,2025, anaa increasedecrease of
of $279,229,$485,439, or 25.22%.36.8%. The increasedecrease in operating expenses was a result of ana increasedecrease of activity in Bothof Brothers Construction and Dalrada
Dalrada Technology Spain.Spain for the three months ended March 31, 2026.
Operating expenses for the three months ended
DecemberMarch 31, 20252026 was $290,242$334,081 compared to operating expenses of $428,867$250,618 during the three months ended DecemberMarch 31, 2024,2025,an aincrease decrease
of $138,625 $83,463
or 32.3%.33.3%. The decreaseincrease in operating expenses was a result of aan decreaseincrease in activityoverhead inassociated allwith DalradaDeposition Precision Manufacturing
subsidiaries.Technologies.
Operating expenses for the three months ended
DecemberMarch 31, 20252026 was $107,854$77,466 compared to operating expenses of $199,462$139,359 during the three months ended DecemberMarch 31, 2024,2025, a decrease
of $91,608, $61,893,
or 45.9%.44.4%. The decrease in operating expenses was primarily attributable to a decrease in overall sales volumes in Prakat.
Operating expenses for the three months ended
DecemberMarch 31, 20252026 was $1,627,371$1,817,728 compared to operating expenses of $2,012,551$1,987,822 during the three months ended DecemberMarch 31, 2024,2025, a decrease of
of $385,180,$170,094, or 19.1%.8.6%. During the three months ended December 31, 2025 and 2024,2025, the Company recorded stock compensation expense of $144,777$134,196
and $379,083,$264,041, respectively, to consultants, employees, executives, and the Board of Directors, which is included in operating expenses.
Other income (expense) consists of penaltiesasset sales,
currency transitions and
interest within interest expenseexpense, penalties are included on the consolidated statements of operations. Interest expense
was $844,780$1,053,546 and $1,033,800$298,028 for the three
months ended DecemberMarch 31, 20252026 and 2024,2025, respectively.
Net loss for the three months ended DecemberMarch 31,
20252026 was $4,424,582$4,326,287 compared to net loss of $6,747,163$4,222,529 for the three months ended DecemberMarch 31, 2024.2025.
SixNine Months Ended DecemberMarch 31, 20252026 and 20242025
The following table sets forth the results of
our our
operations for the sixnine months ended DecemberMarch 31, 20252026 and 20242025:
Revenues for the sixnine months ended DecemberMarch 31, 2025,2026,
was $3,508,387$4,409,642 compared with revenue of $6,203,531$7,600,892 during the sixnine months ended DecemberMarch 31, 2024,2025, an decrease ofof$3,191,250 43.4%.42.0%. The decrease
in in
revenues was primarily attributable to limited working capital to continue revenue growth and a shift in the sales pipelines of Genefic
Specialty Pharmacy.
Revenues for the six months ended December 31, 2025,
was $3,012,653 compared with revenue of $1,971,522 during the six months ended December 31, 2024, an increase of $1,041,131, or 52.8%.
The increase in revenue is due to a growth in residential development opportunities for Bothof Brothers Construction.
Revenues for the sixnine months ended DecemberMarch 31,
2026, 2025,
was $239,509$4,421,437 compared with revenue of $252,609$4,748,630 during the sixnine months ended DecemberMarch 31, 2024,2025, aan decreaseincrease of $13,100,$327,193, or 5.2%. 6.9%.
The decrease
increase in revenue iswas due to DepositionBothof TechnologyBrothers finalizingthe alarger number of projects that Bothof Brothers worked on during prior periods and reduced sales in the Precisionnine Partsmonths
subsidiary.ended March 31, 2026 compared to March 31, 2025.
Revenues for the sixnine months ended DecemberMarch 31, 2025,2026,
was $598,170$284,413 compared with revenue of $717,851$380,283 during the sixnine months ended DecemberMarch 31, 2024,2025, ana decrease of $119,681,$95,870, or 16.7%.25.2%. The decrease
in revenue is due to Deposition Technology finalizing a number of projects during prior periods and reduced sales in the Precision Parts
subsidiary.
Revenues for the nine months ended March 31, 2026, was $810,331 compared with revenue of $989,984 during the nine months ended March 31, 2025, a decrease of $179,653, or 18.1%.
Cost of Revenues for the sixnine months ended DecemberMarch
31, 2025,2026, was $2,345,117$2,785,231 compared to cost of revenues of $5,279,591$6,033,704 during the sixnine months ended DecemberMarch 31, 2024,2025, a decrease of $2,934,474,$3,248,473,
or 55.6%.53.8%. The decrease in cost of revenue was primarily attributable to limited working capital to continue revenue growth and a shift
in the sales pipelines of Genefic Specialty Pharmacy.
Cost of Revenues for the sixnine months ended DecemberMarch
31, 2025,2026, was $2,728,393,$3,848,323, compared to cost of revenues of $1,168,159$3,285,123 during the sixnine months ended DecemberMarch 31, 2024,2025, an increase of $1,560,234,$563,200,
or 133.5%.17.1%. The increase in cost of revenue is due to athe growthlarger innumber residentialof developmentprojects opportunities forthat Bothof Brothers Construction.worked on during the nine months
ended March 31, 2026 compared to March 31, 2025.
Cost of Revenues for the sixnine months ended DecemberMarch
31, 2025,2026, was $187,680$269,450 compared to cost of revenues of $241,801$315,280 during the sixnine months ended DecemberMarch 31, 2024,2025, a decrease of $54,121,$45,830, or
or 22.4%.14.5%. The decrease in cost of revenue is due to Deposition Technology finalizing a number of projects during prior periods and reduced
sales in the Precision Parts subsidiary.
Cost of Revenues for the sixnine months ended DecemberMarch
31, 2025,2026, was $403,023$547,278 compared to cost of revenues of $440,910$649,648 during the sixnine months ended DecemberMarch 31, 2024,2025, a decrease of $37,887$163,493 or
8.6%.15.8%. The decrease in cost of revenues was primarily a result of closing new contracts.
Operating expenses for the sixnine months ended DecemberMarch
31, 2025,2026, was $2,671,970$3,674,155 compared to operating expenses of $4,332,423$5,979,413 during the sixnine months ended DecemberMarch 31, 2024,2025, a decrease of $1,660,453,$2,305,258
or 38.3%.38.6%. The decrease in operating expenses was the result of an increase an overall decrease in operating activity and sales within
the segment.
Operating expenses for the six months ended December
31, 2025, was $2,857,788 compared to operating expenses of $2,706,467 during the six months ended December 31, 2024, an increase of $151,321,
or 5.0%. The increase in operating expenses was a result of an increase of activity in Bothof Brothers Construction and Dalrada Technology
Spain.
Operating expenses for the sixnine months ended DecemberMarch
31, 20252026 was $690,589$3,691,292 compared to operating expenses of $692,504$4,025,410 during the sixnine months ended DecemberMarch 31, 2024,2025, a decrease of $1,915,$332,772,
or 0.03%.8.3%. The decrease in operating expenses was a result of overallan activityeffort withinto reduce overhead for the segment.segment during the nine month period
ended March 31, 2026.
Operating expenses for the sixnine months ended December
March 31, 20252026 was $221,737 $1,024,671
compared to operating expenses of $323,337$943,122 during the sixnine months ended DecemberMarch 31, 2024,2025, an increase of $81,549, or 8.6%. The increase
in operating expenses was a decreaseresult of $101,600,
oroverall 31.4%.activity within the segment during the nine month period ended March 31, 2026.
Operating expenses for the nine months ended March 31, 2026 was $299,203 compared to operating expenses of $462,696 during the nine months ended March 31, 2025, a decrease of $163,493, or 35.3%.
Operating expenses
for the sixnine months ended December March
31, 20252026 was $4,135,566$5,953,294 compared to operating expenses of $4,713,797$6,701,619 during the sixnine months ended December
March 31, 2024,2025, a decrease of $435,922, $748,325,
or 9.2%.11.2%. During the sixnine months ended DecemberMarch 31, 20252026 and 2024,2025, the Company recorded stock compensation
expense of $276,027$410,224 and $1,383,026, $1,647,067,
respectively, to consultants, employees, executives, and the Board of Directors, which is included
in operating expenses.
Other income (expense) consists of penaltiesasset sales,
currency transitions and
interest within interest expenseexpense, penalties are included on the consolidated statements of operations. Interest expense
was $1,578,118$2,631,664 and $2,099,614$2,397,642 for the
six nine months ended DecemberMarch 31, 20252026 and 2024,2025, respectively.
Net loss for the sixnine months ended DecemberMarch 31, 2026
2025 was $10,487,650$14,813,937 compared to net loss of $13,546,077$17,768,606 for the sixnine months ended DecemberMarch 31, 2024.2025.
The Company continues to incur recurring operating losses, negative cash flows from operations, and significant working capital deficits, which raise substantial doubt regarding the Company’s ability to continue as a going concern within one year after the date these condensed consolidated financial statements are issued. The Company anticipates requiring additional liquidity over the next twelve months to fund ongoing operations, satisfy existing obligations, support working capital requirements, and continue strategic growth initiatives across certain subsidiaries and operating divisions.
The Company’s anticipated capital requirements include funding for the continued expansion and commercialization of DCT heat pump systems, operational growth initiatives within its pharmacy operations, expansion of Bothof Brothers Construction’s development activities, ongoing investments in precision manufacturing capabilities, and support for DepTec’s deposition system operations and related customer projects. The Company also continues to evaluate operational efficiencies, cost containment measures, and prioritization of resources toward business segments and projects that management believes have the greatest potential to generate near-term revenue growth and positive cash flows.
Management’s plans to alleviate the conditions giving rise to the substantial doubt include improving operating performance, increasing revenues from existing subsidiaries, accelerating sales and marketing efforts related to high-margin product offerings and services, collecting outstanding accounts receivable balances, and pursuing additional sources of liquidity through debt financings, equity financings, strategic investments, asset monetization opportunities, and other capital raising activities. The Company has historically relied on financing from related parties, external investors, and the issuance of equity securities to support operations and fund growth initiatives, and expects to continue relying on such sources of capital in the near term.
The Company’s ability to continue as a going concern is dependent upon a number of factors, including its ability to successfully execute its business plan, achieve and sustain profitable operations and positive operating cash flows, improve liquidity, collect outstanding receivables on anticipated timelines, maintain support from certain related parties and stakeholders, and obtain additional financing on commercially reasonable terms, if at all. The issuance of additional equity securities would result in dilution to existing stockholders, and there can be no assurance that additional debt or equity financing will be available when needed or on terms acceptable to the Company. In addition, there are currently no plans to induce the conversion of existing debt obligations into equity.
There can be no assurance that management’s plans will be successful or that the Company will be able to generate sufficient revenues, improve cash flows, or obtain adequate financing to continue operations. Accordingly, the accompanying condensed consolidated financial statements do not include any adjustments relating to the recoverability or classification of recorded asset amounts, or the amounts and classification of liabilities, that may result should the Company be unable to continue as a going concern.
The Company continues to incur significant losses and raises substantial
doubt regarding the Company’s ability to continue as a going concern. We anticipate needing additional liquidity during the next
twelve months to fund operations, expand our subsidiaries, expand the growth of the pharmacies, continue the commercialization of our
DCT heat pump units and expanding Bothof Brothers Construction’s development footprint. Management is planning to support operations
by raising capital, and by accelerating sales & marketing efforts of high-margin DCT heat pump units, precision parts, DepTec’s
deposition systems and COVID-19 testing. The continuation of the Company as a going concern is dependent upon the continued financial
support from its management, its ability to obtain the necessary debt or equity financing and generate profitable operations from the
Company’s planned future operations. We will also continue to rely on equity sales of our common shares in order to continue to
fund our business operations. Issuances of additional shares will result in dilution to existing stockholders. There is no assurance that
we will achieve any additional sales of the equity securities or arrange for debt or other financing to fund planned acquisitions and
activities and there are no plans to induce conversion of existing debt. There are no assurances that our plans will be successful. These
financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification
of liabilities that might be necessary should the Company be unable to continue as a going concern.
OurThe Company’s primary sources of liquidity arehistorically have
consisted of cash generated from operationsoperations, proceeds from debt and cashequity onfinancings, hand
and advances from related partyparties. loans.The OurCompany’s
primary primaryliquidity requirements forinclude liquidity are to fund ourfunding working capital needs, debt service,service obligations, operating lease
obligations, commitments, capital expendituresexpenditures,
subsidiary expansion initiatives, and general corporate needs.purposes.
As of DecemberMarch 31, 2025,2026, we maintained a cash and
and cash equivalents balance of $399,381$411,932 (Restricted cash CD $329,307 which will be released when the Pala project is complete with Bothof
Construction which is estimated to be MarchJuly 2026) with a working capital deficit of $15,341,014.$21,953,663.
As of DecemberMarch 31, 2025,2026, the Company had current
assets of $7,169,941$7,950,045 and current liabilities $22,510,955$29,903,708 compared with current assets of $7,741,021 and current liabilities $15,742,840
on June 30, 2025. The decrease in the working capital was primarily a result of increased accounts payable to fund payroll and pay outstanding
vendors as well as an increase in related party notes.vendors.
During
the sixnine months ended DecemberMarch 31, 2025,2026, the
Company used $3,261,788$6,063,517 of cash for operating activities compared to used $4,433,602$6,143,953 during
the sixnine months ended DecemberMarch 31, 2024.2025. The
primary decrease in the use of cash for operating activities was a result of thea increase
reduction in accounts payable to related parties.receivable.
During the sixnine months ended DecemberMarch 31, 2025,2026, the
the Company used no cash for investing activities compared to $457,285$479,798 used during the sixnine months ended DecemberMarch 31, 2024.2025.
During the sixnine months ended DecemberMarch 31, 2025,2026,
the Company received $2,996,383$5,710,889 in net cash for financing activities compared to receiving $4,479,062$6,223,344 during the sixnine months ended DecemberMarch
31, 2024.2025. The decrease was primarily due to a reduction in proceedsstock from related party notes payable.issued.
The preparation of financial statements in conformity
with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes for the reporting period. Significant areas requiring the
use of management estimates relate to the valuation of its mineral leases and claims and our ability to obtain final government permission
to complete the project. As of DecemberMarch 31, 20252026 there have been no material changes to our critical accounting policies and estimates from
from those previously disclosed in our Annual Report on Form 10-K for the year ended June 30, 2024.2025.
DHTI insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 0 filings. Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
No Form 4 stock transactions in this period.
Well-known investors holding DHTI (13F)
None of the 59 investors we track reported a position in their latest 13F.