Investment Thesis
BluSky AI Inc. exhibits severe financial distress with negative stockholders' equity of -$541.6K, indicating liabilities exceed assets. The company is burning cash at an alarming rate with -$730.7K free cash flow while generating deeply unprofitable operations with a -294% net margin. With only $1.3M in cash against $5.7M in long-term debt and a current ratio of 0.42x, the company faces imminent liquidity crisis.
Strengths
- Modest revenue growth of 14% year-over-year indicates some operational demand
- Maintains $1.3M in cash reserves providing short-term runway
- Recent insider activity (3 Form 4 filings) shows continued management engagement
Risks
- Negative stockholders' equity of -$541.6K indicates technical insolvency
- Severe liquidity crisis with current ratio of 0.42x and quick ratio of 0.19x
- Massive operating losses with -$2.2M operating income on $1.4M revenue
- Negative free cash flow of -$730.7K unsustainable without capital infusion
- Long-term debt of $5.7M versus total assets of only $3.0M creates debt refinancing risk
- Deeply negative operating margins of -160.5% indicate broken business model
Key Metrics to Watch
- Quarterly cash burn rate and months of runway remaining
- Total liabilities trend and debt covenant compliance status
- Operating margin trajectory toward profitability breakeven
- Revenue sustainability and gross margin improvement
Financial Metrics
Revenue
1.4M
Net Income
-4.0M
EPS (Diluted)
$-1.29
Free Cash Flow
-730.7K
Total Assets
3.0M
Cash
1.3M
Profitability Ratios
Gross Margin
-3.5%
Operating Margin
-160.5%
Net Margin
-294.0%
ROE
N/A
ROA
-134.5%
FCF Margin
-53.5%
Balance Sheet & Liquidity
Current Ratio
0.42x
Quick Ratio
0.19x
Debt/Equity
N/A
Debt/Assets
118.1%
Interest Coverage
-66.40x
Long-term Debt
5.7M
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: 2026-03-21T13:38:10.684371 |
Data as of: 2025-09-30 |
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