Invocon, Inc. 2024 Financial Report: Key Insights for Investors

1. Overview & Audit Opinion

Invocon, Inc., a leading provider of advanced instrumentation and wireless telemetry systems for satellite, missile, and space platforms, has released its audited financial statements for the year ended December 31, 2024. The audit was performed by Grassi & Co., CPAs, P.C., who issued an unqualified opinion, stating the financial statements present fairly, in all material respects, the financial position and results of operations in conformity with U.S. GAAP.

2. Key Financial Highlights

• Revenues: \$3,783,978
• Gross Profit: \$2,966,285
• Net Income: – \$310,539 (Net Loss)
• Total Assets: \$1,943,293
• Total Liabilities: \$1,437,452
• Stockholder’s Equity: \$505,841
• Cash at Year End: \$377,845

3. Balance Sheet Details

• Significant current assets include contract assets (\$441,463) and accounts receivable (\$78,121).
• Right-of-use assets (leases) constitute a major portion (\$1,030,261) of the asset base.
• Current liabilities are elevated due to accrued expenses (\$356,564) and current maturities of lease liabilities (\$349,797).
• Long-term liabilities are primarily lease obligations (\$680,464).

4. Operational Performance

• Operating Expenses: Significant rise in general and administrative expenses (\$2,974,268) and research & development (\$316,130).
• Income from Operations: Loss of \$324,113, driven by high operating expenses.
• Other Income/Expense: A modest net positive (\$13,574), mainly from interest and other income, partially offset by interest expense (\$8,819).
• Distributions to Shareholder: \$192,494 distributed, further reducing retained earnings.

5. Cash Flow Analysis

• Cash Provided by Operating Activities: \$2,168,704 (mainly due to changes in contract assets and liabilities).
• Cash Used in Financing Activities: (\$2,029,893), including repayments to related parties (\$1,890,394) and distributions to shareholder (\$192,494).
• Net Increase in Cash: \$138,811, ending with \$377,845 in cash.
• Significant Non-Cash Activity: Acquisition of right-of-use assets under operating leases (\$1,087,154).

6. Revenue Recognition & Contract Assets

• Revenue is derived from fixed-price contracts, recognized via the percentage-of-completion method.
• Contract assets and liabilities fluctuate based on billings versus costs incurred, affecting cash flow and reported profit.
• For 2024, contract assets decreased sharply, while contract liabilities were less significant.
• Revenue recognition is sensitive to changes in job performance, estimated costs, and contract modifications.

7. Lease Commitments & Liabilities

• Operating lease liabilities are substantial, totaling \$1,030,261 with a weighted-average discount rate of 4.18% and average remaining term of 34 months.
• Annual lease payments are scheduled to be \$386,211 for the next two years and \$321,843 in 2027.
• Operating lease costs for 2024 were \$436,560, with cash paid for leases totaling \$437,711.

8. Retirement Plan & Employee Benefits

• The company provides a 401(k) plan, with matching contributions totaling \$41,669 in 2024.
• No additional profit-sharing contributions were made.

9. Concentrations & Risks

• Cash balances may at times exceed federally insured limits, posing concentration risk.
• 100% of accounts receivable are from a single customer as of year-end.
• 75% of revenues are concentrated in two customers. This exposes the company to significant customer risk and revenue volatility.

10. Related Party Transactions

• Substantial funding (\$1,890,394) was provided by Karl F. Kiefer, the sole shareholder, and repaid by year-end, impacting cash flows.

11. Subsequent Event: Acquisition by Cemtrex, Inc.

Major Price-Sensitive Event:
On January 8, 2026, all outstanding and issued shares of Invocon, Inc. were acquired by Cemtrex, Inc. for a cash purchase price of \$7,060,000. Invocon became a wholly-owned subsidiary of Cemtrex. This acquisition is highly significant for shareholders and potential investors, as it signals a major change in ownership, potential strategic direction, and could materially impact future financial performance and valuation.

12. Other Notable Points

• There are no unrecognized tax benefits and no off-balance-sheet credit exposures.
• The company cleared its line of credit (\$183,000) with Wells Fargo Bank in 2024.
• Depreciation expense for property and equipment was \$4,928 in 2024.

13. Implications for Investors

• Acquisition by Cemtrex is likely to be the most significant driver of share price and investor sentiment.
• Customer concentration risk and contract asset/liability volatility are key risks that could impact cash flows and earnings in future periods.
• Operating loss and high operating expenses highlight ongoing challenges in profitability.
• Strong cash flow from operations (mainly from contract asset/liability changes) is a positive, but sustainability is uncertain due to customer concentration and contract dynamics.

Disclaimer

The information provided in this article is based on audited financial statements and accompanying notes for Invocon, Inc. for the year ended December 31, 2024, and subsequent events. This article is for informational purposes only and does not constitute investment advice or an offer to buy or sell securities. Investors should conduct their own due diligence and consult with professional advisors before making investment decisions. Past performance is not indicative of future results.

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