DALRADA FINANCIAL CORP SEC 10-K Report

Dalrada Financial Corporation, a diversified company operating in healthcare, climate technology, precision manufacturing, and digital services, has released its annual Form 10-K report. The report provides a comprehensive overview of the company's financial performance, business operations, strategic initiatives, and the challenges it faces in the current market environment.

Financial Highlights

• Total Revenues: $20.3 million, reflecting a slight increase from the previous year's $19.8 million, driven by growth in service revenue despite a decline in product sales.
• Gross Profit: $5.3 million, a significant improvement from the previous year's $0.98 million, indicating better cost management and efficiency.
• Loss from Operations: $(20.5) million, an improvement from the previous year's loss of $(26.8) million, primarily due to a decrease in operating expenses.
• Net Loss: $(24.7) million, compared to a net loss of $(29.2) million in the prior year, attributed to cost reductions and centralization of resources.
• Net Loss Per Common Share to Dalrada Stockholders - Basic and Diluted: $(0.23), compared to $(0.31) in the previous year, reflecting the overall reduction in net loss.

Business Highlights

• Business Divisions Overview: Dalrada Financial Corporation operates through five primary business divisions: Genefic, Dalrada Climate Technology, Dalrada Precision Manufacturing, Dalrada Technologies, and Dalrada Corporate. Each division focuses on transformative innovation and creating sustainable, accessible, and affordable solutions.
• Genefic Division: Specializes in advanced healthcare solutions, including virus and disease screening, pharmaceutical goods, and holistic wellness clinics. It aims to improve global health outcomes by developing key health products and comprehensive systems.
• Dalrada Climate Technology: Focuses on energy services and climate sustainability technology, including the development of industrial heat pumps to reduce energy consumption and carbon footprints while meeting ESG goals.
• Dalrada Precision Manufacturing: Provides total manufacturing solutions, from design and development to global supply chain management, focusing on high-quality machine parts and components.
• Dalrada Technologies: Offers digital engineering and robust digital services, connecting the world with integrated technology and innovative solutions, specializing in software systems for various technical industries.
• Revenue Segments: Genefic's revenue decreased by 21.1% due to a shift in its pharmacy model, while Dalrada Climate Technology saw a 188.17% increase in revenue, driven by projects like Averett University and Bothof Brothers Construction.
• Geographical Performance: Dalrada Technology Spain was established to expand the manufacturing and sale of climate technology products throughout Europe, indicating a strategic focus on European markets.
• New Product Launches: The U.S. Government selected the DCT One Series heat pump for testing in a clean energy program, which is expected to accelerate market adoption of this eco-friendly technology.
• Future Outlook: The company plans to focus on growing profitable subsidiaries, reducing investments in less beneficial areas, and pursuing synergistic opportunities to enhance its business portfolio. It also aims to centralize resources to cut costs and improve operational efficiency.

Strategic Initiatives

• Strategic Initiatives: Dalrada Financial Corporation is implementing plans to achieve cost savings and strategic objectives to address profitability. The company is focusing on growing subsidiaries anticipated to be most profitable while reducing investments in areas not expected to have long-term benefits. It is also pursuing synergistic opportunities to enhance its business portfolio, such as the acquisition of Grand Entrances to complement the Dalrada Climate Technology segment.
• Capital Management: The company raised $18,819,247 through financing activities, primarily due to the drawdown of various note payables. It also converted related party notes into preferred stock, reflecting a strategic move to manage its capital structure. The company issued common stock pursuant to acquisitions and consulting agreements, and stock-based compensation decreased significantly by 62.1% from the prior year.
• Future Outlook: Dalrada plans to continue focusing on cost-cutting measures across all segments by centralizing resources and concentrating sales efforts on products and services that generate immediate sales. The company aims to complete ongoing projects and pursue partnerships to expedite the commercialization of its DCT-1 heat pump. However, there is substantial doubt about the company's ability to continue as a going concern without additional capital or increased product revenue.

Challenges and Risks

• Challenges and Risks: Dalrada Financial Corporation operates in diverse sectors, including healthcare, climate technology, precision manufacturing, and digital services. The company faces challenges in maintaining innovation and efficiency across these sectors, particularly in addressing climate change, healthcare gaps, and technology needs. The company's ability to deliver transformative innovations that are sustainable, accessible, and affordable is critical to its success.
• Financial Condition and Results of Operations: The company has incurred significant net losses of $24,672,190 and $29,185,898 for the years ended June 30, 2025, and 2024, respectively. The independent registered public accountants have raised substantial doubt about the company's ability to continue as a going concern due to these losses and limited working capital. The company is implementing cost-saving measures and strategic objectives to address profitability, focusing on growing profitable subsidiaries and reducing investments in less beneficial areas.
• Market and Operational Risks: The specialty pharmaceutical and infusion market is rapidly growing, driven by an aging population and increasing chronic diseases, but the company faces challenges in shifting from high-volume, low-margin prescriptions to a lower-volume, high-margin model. The heat pump technology market is expanding due to decarbonization efforts and government incentives, yet Dalrada Climate Technology has faced delays in commercializing its DCT-1 heat pump.
• Customer Dependency: Dalrada Precision Manufacturing experienced a significant revenue decrease due to the loss of a primary customer, highlighting the risk of dependency on key clients. The company is also exposed to risks related to the centralization of resources, which, while intended to cut costs, may impact operational efficiency.

SEC Filing: DALRADA FINANCIAL CORP [ DFCO ] - 10-K - Sep. 29, 2025