Forensic Analysis · Professional & Commercial Services · as of Oct 19, 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
Distress
Financial health
-4.5
Distress distance
Not computable
Earnings quality
6
Forensic signals
-72.2%
Revenue growth
This free snapshot doesn't read filing or proxy text, so the auditor-quality and governance checks that can lower a grade were not evaluated (red flags, auditor quality, say on pay, board independence, going concern). Those checks only ever lower a grade, so the full analysis can land below the grade above but never above it — treat it as the most favourable reading, not the settled one.
T3 Defense Inc. earns an F (Poor — capital at risk) forensic quality grade, and its balance-sheet distress test reads -4.5, placing it in the Distress zone. 6 forensic signals were flagged in its latest SEC filings, led by cash conversion.
What the filings flag
-0.17×
FY2023–FY2025
Cash conversion.Over FY2023–FY2025, cumulative operating cash flow was -0.17× cumulative net income before $12.3M of non-cash goodwill impairment. Reported profit is not turning into cash. The shortfall is profit tied up in working capital rather than collected — the accrual and receivables lines below show where.
-18.8%
FY2025
Return on invested capital.Return on invested capital is -18.8% in the latest fiscal year.
+171.0%/yr
FY2023–FY2025
Share-count dilution.Diluted share count changed +635% over the last 2 years to FY2025 (+171.0%/yr). The count is growing — 1.3M shares in FY2023, 9.2M in FY2025: more stock was issued than repurchased over this window, so aggregate results grew faster than their per-share equivalents. That's ~171.0% shaved off per-share growth every year — total profit has to grow that much just to keep earnings-per-share flat, and a stake held since FY2023 has been diluted ~86%.
4% of rev
FY2024
Stock-based comp load.Stock-based compensation ran 4% of revenue in FY2024 — about $0.13 per diluted share. No cash left the business to pay it, which is why operating cash flow adds it back. Net of repurchases the diluted count still rose about 171.0% a year across FY2023–FY2025 and that rate is not falling, so total profit has to grow by that much annually before any of it reaches a share. Stock compensation is one source of that issuance; acquisition consideration, equity raises, convertibles and other employee plans also net into the count, and these figures do not separate them.
n/m (sign flip)
FY2024→FY2025
Accruals ratio (% of NOA).Net operating assets flipped from negative to positive FY2024→FY2025 (FY2024 $-168.7M 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.
$12M
FY2023–FY2024
Goodwill impairments.Took $12M of goodwill writedowns across 2 years (FY2023 ($12M), FY2024 ($391,217)). Writedowns mean past acquisitions underperformed what was paid for them.
Key fundamentals
Latest Revenue$5.9M
Revenue Growth YoY-72.2%
Net Margin-144.1%
Free Cash Flow-$6.2M
The forensic grade and screens above are free — no account needed. Want the AI investment read on top — the 0–100 rating, thesis, bull-vs-bear, red flags and the 12-month scenario, written from T3 Defense Inc.'s actual 10-K/10-Q/8-K filings?