Investment Thesis
Blum Holdings exhibits severe financial distress with negative stockholders' equity of -$11.9M, liabilities exceeding assets by $7.2M, and persistent unprofitability despite $4.8M in revenue. The company's liquidity crisis (0.07x current ratio) combined with negative free cash flow of -$1.5M and minimal cash reserves of $388K indicates imminent solvency risk.
Strengths
- Gross margin of 107.3% suggests product or service pricing exceeds cost of goods sold
- Total assets of $45.1M provide some liquidation value base
- Recent insider activity with 6 Form 4 filings may indicate management confidence or restructuring efforts
Risks
- Negative stockholders equity of -$11.9M indicates technical insolvency and shareholder value destruction
- Critical liquidity crisis with current ratio of 0.07x and only $388K cash against substantial liabilities
- Sustained operating losses with -$1.5M operating cash flow and -$103.4% net margin demonstrates non-viable business model
- Liabilities exceed total assets by $7.2M creating material bankruptcy risk
- Negative free cash flow of -$1.5M indicates inability to sustain operations without external capital injection
Key Metrics to Watch
- Quarterly cash balance and cash burn rate
- Debt covenant compliance and refinancing status
- Revenue stabilization and path to operating profitability
- Stockholders equity trajectory and debt restructuring outcomes
Financial Metrics
Revenue
4.8M
Net Income
-5.0M
EPS (Diluted)
$0.00
Free Cash Flow
-1.5M
Total Assets
45.1M
Cash
388.0K
Profitability Ratios
Gross Margin
107.3%
Operating Margin
-74.4%
Net Margin
-103.4%
ROE
N/A
ROA
-11.1%
FCF Margin
-31.8%
Balance Sheet & Liquidity
Current Ratio
0.07x
Quick Ratio
0.04x
Debt/Equity
N/A
Debt/Assets
116.1%
Interest Coverage
N/A
Long-term Debt
4.0M
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: 2026-03-21T05:38:14.638547 |
Data as of: 2025-09-30 |
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