Cleartronic, Inc. (CLRI) stock intrinsic value fair value estimate & owner earnings analysis

What the business is. Cleartronic is a very small Florida software company. Nearly all of its revenue comes from subscriptions to ReadyOp, a web-based planning and communications platform. Local, state and federal agencies, school districts, utilities and hospitals use it to run daily operations, respond to emergencies and keep working during disruptions. The company also sells ReadyMed (the same platform for healthcare clients), the Alastar platform it bought on August 1, 2024, and AudioMate radio-to-internet gateways. In the year to September 30, 2025, revenue rose 31% to $4.10 million. ReadyOp subscriptions made up $3.69 million of that, up from $2.41 million. Gateway hardware fell from $672,000 to $85,000, and contract development work rose from $39,000 to $327,000. No customer accounted for more than 10% of revenue in fiscal 2025, compared with one customer at 16% in fiscal 2024. Gross margin is high, at about 78%. What it actually earns. We measure the cash the business produces for its owners each year. We remove timing swings in customer prepayments and receivables, since subscriptions are billed in advance, and we deduct the capital spending needed to keep the business running. Two accounting choices matter here. First, we treat bad-debt charges as a real cost, not as a non-cash item to add back. They have been meaningful: $98,000 in fiscal 2023 and $110,000 in fiscal 2025. Second, we count every share that the outstanding convertible preferred stock can become. That is about 229.2 million common shares plus about 370.3 million from conversion, roughly 599.6 million in all. So each share's value is a small fraction of a cent. On that basis the company lost money every year from fiscal 2016 to 2019. It earned $169,000 in fiscal 2020, $221,000 in 2021, $350,000 in 2022 and $57,000 in 2023. It then fell to losses of $232,000 in 2024 and $140,000 in 2025. Those two losses followed a jump in costs. The payroll of the staff who came with Alastar was added, and about $166,000 was spent in fiscal 2024 on FedRAMP certification, the federal security approval that ReadyOp needs to sell more widely to federal agencies. Since the ReadyOp business took its current shape (fiscal 2020 to 2025), the middle of the range is about $113,000 a year. The latest nine months (October 2025 to June 2026) look better. Revenue rose 21% to $3.62 million, operating expenses rose only 4.5% to $2.61 million, and net income was $334,000, compared with a $128,000 loss a year earlier. All three quarters were profitable. Because three consecutive quarters confirm the improvement, we start the base case above the historical middle, at $240,000 a year. That is below the roughly $300,000 annual pace of recent quarters, for three reasons. The recent figures include a $23,000 bad-debt recovery. Normal credit losses have averaged about $50,000 a year. And part of the fiscal 2025 revenue came from contract work that may not repeat. One fact argues for caution on growth: at June 30, 2026, prepaid subscriptions not yet earned were $1.29 million, about 7% below the roughly $1.39 million a year earlier. That suggests new bookings are not accelerating. Cases. All future cash is discounted at 6% a year. - Base case, about $0.0053 per share. Owner earnings start at $240,000. They grow 5% a year for five years as the subscription base keeps expanding, as total revenue has done in every year but one (fiscal 2021) since fiscal 2018. Growth then slows to 3% a year, reaching about $338,000 in year 10. Earnings then hold flat for ten more years on the renewing government customer base, and nothing is counted after that. The product is small, depends on two executives, and faces the risk the company itself describes of fast technology change. - Bull case, about $0.0100 per share. The recent pattern continues: revenue grows much faster than costs. ReadyOp completes FedRAMP authorization, which the company expected in early 2026 and which opens further federal agencies. Owner earnings start at $320,000, grow 12% a year for five years and 6% for the next five, reaching about $674,000, then hold flat for ten years. - Bear case, about zero (roughly -$0.0001 per share). The fiscal 2024–2025 pattern repeats: costs outrun revenue, and heavy bad debts and falling prepaid bookings produce two more years of losses of about $140,000. Earnings then recover only to about $100,000 a year, and the story ends after year 10. Preferred stock claim. In every case we deduct about $0.33 million of unpaid cumulative dividends on the Series A preferred stock. That was $288,365 at September 30, 2025, and it grows about $41,000 a year. It ranks ahead of common shareholders. In the bear case it roughly equals everything the business would produce. So common holders would be left with about nothing, though the company itself does not owe more than it is worth. Balance sheet. The company has no borrowings. At June 30, 2026 it held $1.01 million of cash against $1.42 million of total liabilities, most of which ($1.29 million) is service already paid for by customers. What would make this wrong. The value depends almost entirely on whether the recent profitability lasts. If payroll again grows faster than subscriptions, the business returns to the break-even-or-worse results of fiscal 2024 and 2025. A successful FedRAMP authorization, confirmed by rising prepaid bookings, would push value toward the bull case. Margin-of-safety price. The margin-of-safety price is about $0.0017 per share, which values all as-converted shares at roughly $1.0 million. That is a margin of about two-thirds below the base case. The margin is this wide because of the company's tiny size, its reliance on two executives, the preferred stock overhang, and a bear case near zero. It also applies only once the full fiscal 2026 annual report confirms a profitable year, with prepaid subscriptions back at or above the September 30, 2025 level of $1.79 million.