Investment Thesis
Borealis Foods is in severe financial distress with negative stockholders equity of -$12.9M, indicating the company is technically insolvent. The company is burning cash with negative operating cash flow of -$3.8M and a critically weak current ratio of 0.15x, while generating substantial operating losses (-$38.8% margin) despite modest revenue base of $21.1M.
Strengths
- Gross margin of 11.6% provides minimal operational viability in food sector
- Revenue base of $21.1M establishes market presence in food and kindred products
- Capital expenditure discipline with only $16.2K capex despite operational challenges
Risks
- Negative stockholders equity of -$12.9M indicates technical insolvency and high bankruptcy risk
- Critically low liquidity with current ratio of 0.15x and only $128.9K cash against $69.2M liabilities
- Severe operational losses with -$59.5% net margin and -$3.8M negative operating cash flow indicating unsustainable business model
- Deteriorating revenue trend with -4.9% YoY decline combined with expanding operating losses
- Negative interest coverage of -1.9x demonstrates inability to service debt obligations
Key Metrics to Watch
- Operating cash flow trend and path to positive cash generation
- Stockholders equity recovery timeline and capital restructuring plans
- Revenue stabilization and operating margin improvement initiatives
- Liquidity position and debt covenant compliance status
Financial Metrics
Revenue
21.1M
Net Income
-12.6M
EPS (Diluted)
$-0.59
Free Cash Flow
-3.8M
Total Assets
56.3M
Cash
128.9K
Profitability Ratios
Gross Margin
11.6%
Operating Margin
-38.8%
Net Margin
-59.5%
ROE
N/A
ROA
-22.3%
FCF Margin
-17.9%
Balance Sheet & Liquidity
Current Ratio
0.15x
Quick Ratio
0.05x
Debt/Equity
N/A
Debt/Assets
123.0%
Interest Coverage
-1.89x
Long-term Debt
N/A
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: 2026-03-21T12:12:10.946710 |
Data as of: 2025-09-30 |
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