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AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME/(LOSS)(Unaudited) Three Months Ended Six Months Ended March 31, March 31, March 31, March 31, 2025 2024 2025 2024 Revenue: Monitoring and other related services $7,867,975 $8,758,650 $16,309,282 $17,433,136 Product sales and other 484,345 232,570 711,366 525,057 Total revenue 8,352,320 8,991,220 17,020,648 17,958,193 Cost of revenue: Monitoring, products and other related services 3,515,023 4,230,498 7,023,784 8,204,487 Depreciation & amortization included in cost of revenue 723,331 793,887 1,458,556 1,583,351 Total cost of revenue 4,238,354 5,024,385 8,482,340 9,787,838 Gross profit 4,113,966 3,966,835 8,538,308 8,170,355 Operating expense: General & administrative 2,127,145 3,173,866 4,558,263 5,931,753 Selling & marketing 964,743 810,441 1,865,932 1,516,972 Research & development 750,650 701,183 1,420,040 1,383,646 Depreciation & amortization 227,385 236,524 454,938 476,284 Loss on sale of subsidiary - - (66,483) - Total operating expense 4,069,923 4,922,014 8,365,656 9,308,655 Operating income (loss) 44,043 (955,179) 172,652 (1,138,300) Other income (expense): Interest expense, net (565,844) (428,868) (1,134,804) (866,791)Currency exchange rate gain (loss) 34,830 (519,933) (1,464,432) 19,013 Other income (expense), net - (3,443) - (3,443)Total other income (expense) (531,014) (952,244) (2,599,236) (851,221)Income (loss) before income taxes (486,971) (1,907,423) (2,426,584) (1,989,521)Income tax expense (benefit) 30,145 (4,348) 101,381 (86,907)Net income (loss) attributable to common shareholders (517,116) (1,903,075) (2,527,965) (1,902,614)Release of cumulative translation adjustment for sale of subsidiary - - 1,390,913 - Equity adjustment for sale of subsidiary - - 571,518 - Foreign currency translation adjustments (85,709) (36,754) 686,060 (143,456)Comprehensive income (loss) $(602,825) $(1,939,829) $120,526 $(2,046,070) Net income per share – basic Net income per common share $(0.04) $(0.16) $(0.21) $(0.17)Weighted average common shares outstanding 11,863,758 11,863,758 11,863,758 11,863,758 Net income per share – diluted Net income per common share $(0.04) $(0.16) $(0.21) $(0.17)Weighted average common shares outstanding 11,863,758 11,863,758 11,863,758 11,863,758 TRACK GROUP, INC.
AND SUBSIDIARIESNON-GAAP ADJUSTED EBITDA MARCH 31 (Unaudited)(amounts in thousands, except share and per share data) Three Months Ended March 31, Six Months Ended March 31, 2025 2024 2025 2024 Non-GAAP Adjusted EBITDA Net Income (loss) attributable to common shareholders $(517) $(1,903) $(2,528) $(1,903)Interest expense, net 566 432 1,135 870 Depreciation and amortization 951 1,030 1,913 2,060 Income taxes (1) 30 (4) 101 (87)Board compensation and stock-based compensation 75 50 150 103 Foreign exchange (gain)/loss (35) 520 1,464 (19)Loss on sale of subsidiary - - 66 - Other charges, net (2) 249 663 267 826 Non-GAAP Adjusted EBITDA $1,319 $788 $2,568 $1,850 Non-GAAP Adjusted EBITDA, percent of revenue 15.8% 8.8% 15.1% 10.3%Weighted average common shares outstanding - basic 11,863,758 11,863,758 11,863,758 11,863,758 Non-GAAP earnings per share $0.11 $0.07 $0.22 $0.16 Weighted average common shares outstanding - diluted 11,863,758 11,863,758 11,863,758 11,863,758 Non-GAAP earnings per share $0.11 $0.07 $0.22 $0.16 (1)Currently, the Company has significant U.S.tax loss carryforwards that may be used to offset future taxable income, subject to IRS limitations.
AND SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) March 31, September 30, 2025 2024 Assets Current assets: Cash $3,416,045 $3,574,215 Accounts receivable, net of allowance for credit losses of $396,667 and $432,904, respectively 5,085,595 4,428,535 Prepaid expense and deposits 432,520 638,293 Inventory, net of reserves of $88,024 and $82,848, respectively 915,816 582,481 Assets held for sale - 969,481 Total current assets 9,849,976 10,193,005 Property and equipment, net of accumulated depreciation of $300,052 and $430,003, respectively 392,423 317,206 Monitoring equipment, net of accumulated depreciation of $5,295,826 and $5,982,972, respectively 4,367,904 4,598,864 Intangible assets, net of accumulated amortization of $20,460,576 and $19,699,966, respectively 13,337,224 13,959,571 Goodwill 7,859,645 7,941,190 Other assets 1,160,885 660,170 Total assets $36,968,057 $37,670,006 Liabilities and Stockholders’ Equity (Deficit) Current liabilities: Accounts payable $2,398,228 $3,082,467 Accrued liabilities 3,318,453 2,639,318 Liabilities held for sale - 732,028 Total current liabilities 5,716,681 6,453,813 Long-term debt, net of current portion 42,680,070 42,639,197 Long-term liabilities 631,709 186,407 Total liabilities 49,028,460 49,279,417 Stockholders’ equity (deficit): Common stock, $0.0001 par value: 30,000,000 shares authorized; 11,863,758 and 11,863,758 shares outstanding, respectively 1,186 1,186 Preferred stock, $0.0001 par value: 20,000,000 shares authorized; 0 shares outstanding - - Series A Convertible Preferred stock, $0.0001 par value: 1,200,000 shares authorized; 0 shares outstanding - - Paid in capital 302,600,546 302,600,546 Accumulated deficit (315,791,294) (312,691,811)Accumulated other comprehensive income (loss) 1,129,159 (1,519,332)Total stockholders’ equity (deficit) (12,060,403) (11,609,411)Total liabilities and stockholders’ equity (deficit) $36,968,057 $37,670,006 TRACK GROUP, INC.
