Forensic Analysis · Professional & Commercial Services · as of Jul 21, 2026

T3 Defense Inc. (DFNS)

A forensic read on T3 Defense Inc. built from its complete SEC filings — financial-health screens, earnings quality, red flags and a price-aware rating. Reproducible math, not opinion.

F · Poor — capital at risk

Forensic grade

Safe

Financial health

8.5

Altman Z-score

Clean

Earnings quality

Forensic signals

-75.1%

ROE

$538M

Market cap

-72.2%

Revenue growth

T3 Defense Inc. earns a F (Poor — capital at risk) forensic quality grade, and its Altman Z-score is 8.5, placing it in the Safe zone. 5 forensic signals were flagged in its latest SEC filings, led by cash conversion.

What the filings flag

-0.21×Cash conversion. Over FY2023–FY2025, operating cash flow was -0.21× cumulative net income. Reported profit is not turning into cash — a classic earnings-quality warning. The shortfall is profit tied up in working capital rather than collected — the accrual and receivables lines below show where.

-18.8%Return on invested capital. Return on invested capital is -18.8% in the latest fiscal year and slipping from -0% — well below its ~10% cost of capital, so reinvested dollars may be destroying value, not building it.

n/m (sign flip)Accruals ratio (% of NOA). Net operating assets flipped from negative to positive FY2024→FY2025 (FY2024 $-166.9M to FY2025 $+154.6M) — the standard accruals ratio divides by the average of the two, which collapses toward zero right as the sign changes, so the resulting percentage is a denominator artifact, not a real accrual measurement. Treat this as a structural balance-sheet shift to understand on its own terms rather than a clean or dirty accruals read.

n/m (stock split)Share count (stock split). Diluted share count changed +100% over the last 3 years to FY2025, but that includes a large one-time change around FY2023 consistent with a stock split or reverse split, not gradual buybacks or issuance — a split changes the count with NO effect on any holder's proportional ownership, so the raw +25.9%/yr figure isn't a real buyback/dilution read here.

$12MGoodwill impairments. Took $12M of goodwill writedowns across 2 years (FY2023 ($12M), FY2024 ($391,217)). Writedowns mean past acquisitions underperformed what was paid for them — worth weighing on capital-allocation skill.

Key fundamentals

Latest Revenue$5.9M

Revenue Growth YoY-72.2%

Net Margin-144.1%

Free Cash Flow$-10.0M

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Data from SEC EDGAR public filings · metrics as of Jul 21, 2026. Forensic signals flag probability, not certainty.