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 healthcare 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.

Healthcare 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 lifecycle. 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 ones, making product development more agile and accelerating the deployment of new technologies.

Acquisitions 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 IV Services, LLC to complement the Genefic segment.

RESULTS OF OPERATIONS

The following table sets forth the results of our operations for the years ended June 30, 2025, and 2024:

Segment	Year Ended June 30 2025	Year Ended June 30 2024
Revenues	$20,302,803	$19,842,419
Loss from Operations	$(20,458,710)	$(26,839,346)

Dalrada Financial Corporation manages five primary segments: 1) Genefic (formerly Dalrada Health); 2) Dalrada Climate Technology; 3) Dalrada Precision Manufacturing; 4) Dalrada Technologies; and 5) Dalrada Corporate. The business segment data should be read in conjunction with this discussion.

Revenues and Cost of Revenues

Genefic Total Revenues for Genefic decreased to $10,424,584, or 21.1% from last year’s revenue of $13,217,899. Genefic Specialty Pharmacy revenue decreased $6,858,370, or 51.9% compared to the prior year, due to a shift from high volume, low margin specialty pharmacy prescriptions to a lower volume, high margin prescription model. IV Services’ revenue increased $1,811,589, or 696.59% compared to the prior year, as the infusion pharmacy operated for a full 12-month period. DCI generated $1,993,351, or 19.1% of the total revenue for Genefic, with a revenue increase of $654,391, or 48.9%, due to obtaining Licensed Vocational Nursing (LVN) accreditation and a rising number of students entering and graduating from its certification programs.

Dalrada Climate Technology (Formerly Dalrada Energy Services) Total Revenues for Dalrada Climate Technology increased $5,276,827, or 188.17% from the prior year. Dalrada Energy Services generated $1,039,181, or 13.55% of the total revenue, with a revenue increase of $751,061, or 260.7%, due to closing the Averett University project. Bothof Brothers Construction generated $4,246,357, or 56.2% of the total revenue, with a revenue increase of $2,040,809, or 73.8%, from construction and contracting services throughout the United States. Grand Entrances, acquired in August 2024, generated $1,243,171 or 15.38% of the total revenue.

Dalrada Precision Manufacturing Total Revenues for Dalrada Precision Manufacturing decreased to $448,409, or 81.7% from the prior year. Dalrada Precision Parts generated $50,251, or 11.2% of the total revenue, with a revenue decrease of $1,080,654, or 95.6%, due to the loss of its primary customer. DepTec generated $374,102, or 83.4% of the total revenue, with a revenue decrease of $868,540, or 69.9%, due to a cost-based input method for recording revenue. Ignite’s cleaners, parts washers, and degreaser products generated $22,116, or 4.9% of total revenue, with a revenue decrease of $51,485, or 70.0%, due to ramping down operations.

Dalrada Technologies Total Revenue for Dalrada Technologies’ sole subsidiary, Prakat, decreased to $1,348,747, or 1.8% from the prior year, due to several contracts ending their terms during the year.

Operating Expenses Total Operating Expenses decreased to $25,759,830, or 7.5%, compared to last year’s expenses of $27,828,978.

Corporate Total Corporate expenses decreased to $9,873,610, by 18.8%, compared to last year’s expenses. The decrease was primarily due to a reduction in stock-based compensation.

Genefic Total Genefic expenses decreased to $5,566,659, by 26.6%, compared to last year’s expenses. The decrease was primarily due to a reduction in other general and administrative costs.

Dalrada Climate Technology Total Dalrada Climate Technology expenses increased to $5,740,001, by 10.3%, compared to last year’s expenses. The increase was primarily due to an increase in employee compensation and benefits.

Dalrada Precision Manufacturing Total Dalrada Precision Manufacturing expenses decreased to $1,282,290, by 36.3%, compared to last year’s expenses. The decrease was primarily due to a reduction in other general and administrative costs.

Dalrada Technologies Total Dalrada Technologies expenses decreased to $561,733, by 22.4%, compared to the prior year expenses. The decrease was primarily due to reductions in various expense categories.

Other (Expense) Income Other Expense increased to $4,203,880 compared to $2,430,952 for the year ended June 30, 2024. The change was primarily due to an increase in interest expense and a change in fair value of contingent liability.

Net Loss Net loss for the year ended June 30, 2025, was $24,672,190 compared to a net loss of $29,185,898 during the year ended June 30, 2024. The decrease in net loss was mainly attributed to a centralization of operational costs across all operating segments and a reduction of unproductive activities.

Liquidity and Capital Resources As of June 30, 2025, the Company has cash and cash equivalents of $502,094. 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.

The Company has undertaken plans and initiatives, including cutting costs across all segments by the centralization of certain resources, and focusing its sales team on products and services to generate immediate sales. However, without giving effect to the prospect of raising additional capital, increasing product revenue in the near future, or executing other mitigating plans, it is unlikely that the Company will be able to generate sufficient cash flows to meet its required financial obligations. The existence of these conditions raises substantial doubt about the Company’s ability to continue as a going concern for the twelve-month period following the date of this report.

Cash Flows

Cash Flows	Year Ended June 30, 2025	Year Ended June 30, 2024
Net cash used in operating activities	$(17,972,434)	$(7,873,760)
Net cash used in investing activities	$(697,091)	$(552,658)
Net cash provided by financing activities	$18,819,247	$8,065,600
Net change in cash during the period	$149,794	$(360,818)

The increase in the use of cash for operating activities was primarily due to an overall increase in funding from related parties. The increase in financing activities was primarily due to the draw down of various note payables to fund the company.

Critical Accounting Policies The Company’s critical accounting policies include revenue recognition, use of estimates, stock-based compensation, and goodwill and intangible assets. The Company regularly evaluates estimates and assumptions related to these areas and bases its estimates on current facts, historical experience, and various other factors that it believes to be reasonable under the circumstances.