Investment Thesis
Bespoke Extracts is in severe financial distress with negative stockholders' equity of -$2.6M, indicating liabilities exceed assets by a significant margin. Despite 42.3% revenue growth, the company is deeply unprofitable with a -48.5% net margin, burning cash at an alarming rate (-$723.6K free cash flow) while maintaining minimal liquidity (0.11x current ratio). The combination of deteriorating financial position, negative equity, and unsustainable cash burn presents an extreme capital structure risk.
Strengths
- Revenue growth of 42.3% year-over-year demonstrates market traction
- Gross margin of 48.4% suggests underlying product economics are viable
- Some improvement in diluted EPS despite continued losses
Risks
- Negative stockholders' equity of -$2.6M indicates insolvency risk and potential total loss for equity holders
- Critically low liquidity ratios (0.11x current ratio, 0.07x quick ratio) with only $16.7K cash against $2.9M liabilities
- Severe cash burn with -$123.6K operating cash flow and -$723.6K free cash flow unsustainable without immediate capital injection
- Operating margin of -41.1% with $461.2K operating loss shows inability to scale profitably
- High capex of $600K relative to $1.1M revenue suggests investment-phase company without path to profitability
Key Metrics to Watch
- Stockholders' equity trajectory - critical threshold is returning to positive territory
- Operating cash flow - must stabilize and turn positive within 1-2 quarters
- Gross margin sustainability - watch for pricing pressure or cost inflation
- Burn rate relative to cash runway - current trajectory suggests imminent liquidity crisis
Financial Metrics
Revenue
1.1M
Net Income
-543.7K
EPS (Diluted)
$-0.05
Free Cash Flow
-723.6K
Total Assets
295.6K
Cash
16.7K
Profitability Ratios
Gross Margin
48.4%
Operating Margin
-41.1%
Net Margin
-48.5%
ROE
N/A
ROA
-184.0%
FCF Margin
-64.5%
Balance Sheet & Liquidity
Current Ratio
0.11x
Quick Ratio
0.07x
Debt/Equity
N/A
Debt/Assets
978.1%
Interest Coverage
-36.39x
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: 2026-03-21T14:10:10.962599 |
Data as of: 2025-09-30 |
Powered by Claude AI