Investment Thesis
BioLargo demonstrates severe operational distress with negative operating margins of -191.3% and negative free cash flow of -8.3M despite achieving 2,383.8% revenue growth. The company is consuming cash at an unsustainable rate with only 3.9M in cash reserves against 6.8M in liabilities, indicating critical liquidity risk. Deteriorating fundamentals combined with substantial operating losses and negative returns on equity and assets suggest the company is not viable in its current operational structure.
Strengths
- Exceptional revenue growth of 2,383.8% year-over-year demonstrates strong commercial traction
- Gross margin of 43.9% indicates viable unit economics and pricing power at the product level
- Moderate leverage with Debt/Equity ratio of 0.51x provides some balance sheet flexibility
Risks
- Severe cash burn with operating cash flow of -8.3M and only 3.9M in cash reserves suggests runway of less than 6 months
- Operating losses of -14.9M far exceed gross profit of 3.4M indicating unsustainable cost structure and lack of operational leverage
- Negative interest coverage ratio of -27.5x demonstrates inability to service debt from operating income; company dependent on cash reserves
- Negative ROE of -291.4% and ROA of -141.7% indicate value destruction and inefficient asset deployment
- Current ratio of 1.01x demonstrates critically tight liquidity with minimal buffer for operational disruptions
Key Metrics to Watch
- Operating cash flow trend - critical indicator of sustainable operations and path to profitability
- Monthly cash burn rate and cash runway - survival metric given current burn rates
- Gross profit dollars and operating expense ratio - whether revenue growth will eventually drive operational leverage
- Debt covenant compliance and refinancing needs - refinancing risk given negative EBITDA
- Path to operating profitability - specific milestones and timeline for reaching positive operating income
Financial Metrics
Revenue
7.8M
Net Income
-11.8M
EPS (Diluted)
$0.00
Free Cash Flow
-8.3M
Total Assets
8.3M
Cash
3.9M
Profitability Ratios
Gross Margin
43.9%
Operating Margin
-191.3%
Net Margin
-151.7%
ROE
-291.4%
ROA
-141.7%
FCF Margin
-107.1%
Balance Sheet & Liquidity
Current Ratio
1.01x
Quick Ratio
0.95x
Debt/Equity
0.51x
Debt/Assets
81.6%
Interest Coverage
-27.51x
Long-term Debt
2.1M
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: 2026-03-21T05:18:16.315266 |
Data as of: 2025-12-31 |
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