Investment Thesis
Dermata Therapeutics is a pre-revenue pharmaceutical company with severe financial distress, burning $6.4M in operating cash flow against minimal $161K in revenue. The company is fundamentally unprofitable with negative operating margins exceeding -3600% and deteriorating cash position despite strong liquidity, indicating unsustainable burn rate and high bankruptcy risk without significant capital infusion or commercial success.
Strengths
- Strong liquidity position with 7.66x current ratio and $4.7M cash on hand
- Massive revenue growth of 239% YoY indicating early commercialization attempts
- Minimal debt burden with 0.00x debt-to-equity ratio providing financial flexibility
Risks
- Severe operating losses of -$6.4M annually with negative margins exceeding -3600%, indicating non-viable business model
- Cash burn rate of -$6.4M in operating cash flow relative to $4.7M cash reserves implies less than 1 year of runway
- Minimal revenue of $161K insufficient to support R&D and operational costs typical in pharmaceutical industry
- Pharmaceutical sector requires successful clinical trials and FDA approval with no indication of pipeline maturity
- High frequency of insider Form 4 filings (14 in 90 days) may signal uncertainty or liquidity management concerns
Key Metrics to Watch
- Operating cash burn rate and months of cash remaining
- Revenue trajectory and path to commercial product profitability
- Clinical trial milestones and regulatory approval progress
- Equity raises and capital adequacy for operations
Financial Metrics
Revenue
161.4K
Net Income
-5.7M
EPS (Diluted)
$-6.64
Free Cash Flow
-6.4M
Total Assets
5.1M
Cash
4.7M
Profitability Ratios
Gross Margin
N/A
Operating Margin
-3,639.9%
Net Margin
-3,530.5%
ROE
-143.9%
ROA
-112.3%
FCF Margin
-3,983.9%
Balance Sheet & Liquidity
Current Ratio
7.66x
Quick Ratio
7.66x
Debt/Equity
0.00x
Debt/Assets
21.9%
Interest Coverage
N/A
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: 2026-03-23T18:28:11.323353 |
Data as of: 2025-09-30 |
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