Investment Thesis
Applied Energetics exhibits severe financial distress with negative stockholders' equity of -$730.2K, indicating liabilities exceed assets. The company is burning cash at an alarming rate (-$7.8M free cash flow) while generating minimal revenue ($389.1K) that cannot cover operating expenses, making near-term solvency a critical concern.
Strengths
- Positive gross margin of 57.6% suggests some unit economics are viable if revenue scaled
- Adequate short-term liquidity with current ratio of 1.97x provides temporary operational buffer
- Moderate cash balance of $1.3M provides limited runway for operations
Risks
- Negative stockholders' equity indicates technical insolvency and high bankruptcy risk
- Operating cash burn of -$6.6M with minimal revenue is unsustainable without capital injection
- Operating loss of -$10.9M on revenue of only $389.1K demonstrates complete unprofitability at current scale
- Declining revenue (-7.8% YoY) combined with fixed operating costs worsens financial deterioration
- Negative free cash flow of -$7.8M will deplete cash reserves within months without intervention
Key Metrics to Watch
- Monthly cash burn rate and remaining cash runway
- Revenue growth trajectory and ability to achieve profitability
- Stockholders' equity recovery and path to positive book value
- Operating expense reduction and cost structure optimization
Financial Metrics
Revenue
389.1K
Net Income
-10.9M
EPS (Diluted)
$-0.05
Free Cash Flow
-7.8M
Total Assets
4.0M
Cash
1.3M
Profitability Ratios
Gross Margin
57.6%
Operating Margin
-2,791.9%
Net Margin
-2,791.9%
ROE
N/A
ROA
-270.5%
FCF Margin
-2,004.6%
Balance Sheet & Liquidity
Current Ratio
1.97x
Quick Ratio
1.96x
Debt/Equity
N/A
Debt/Assets
118.2%
Interest Coverage
-2,845.85x
Long-term Debt
189.3K
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-03-19T15:34:09.999010 |
Data as of: 2025-09-30 |
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