Investment Thesis
Spectral Capital exhibits severe financial distress with negative operating margins (-67.5%), negative net income (-$2.1M), and substantially negative free cash flow (-$542.9K) despite $3.1M in revenue. The company's balance sheet shows liabilities ($6.5M) exceeding total assets ($6.1K) by a critical margin, indicating potential insolvency, while cash burn and lack of operational profitability pose existential risks.
Strengths
- Maintains positive gross margin of 22.6% suggesting core product economics are viable
- Holds $426.3K in cash providing short-term operational runway
- No long-term debt obligations limiting near-term refinancing pressure
Risks
- Total liabilities ($6.5M) vastly exceed total assets ($6.1K) indicating negative book value and balance sheet insolvency
- Severely negative operating cash flow (-$503.4K) and free cash flow (-$542.9K) demonstrate unsustainable cash burn
- Operating margin of -67.5% and net margin of -67.3% with no clear path to profitability despite revenue generation
- Current ratio of 0.61x indicates inability to meet short-term obligations without asset liquidation
- Zero insider activity in past 90 days suggests lack of management confidence or engagement
Key Metrics to Watch
- Monthly operating cash flow trend and time to cash depletion
- Revenue growth rate and gross margin sustainability as company burns cash
- Balance sheet restructuring or debt settlement announcements indicating going concern assessment
Financial Metrics
Revenue
3.1M
Net Income
-2.1M
EPS (Diluted)
$0.00
Free Cash Flow
-542.9K
Total Assets
6.1K
Cash
426.3K
Profitability Ratios
Gross Margin
22.6%
Operating Margin
-67.5%
Net Margin
-67.3%
ROE
-12.0%
ROA
-34,735.8%
FCF Margin
-17.3%
Balance Sheet & Liquidity
Current Ratio
0.61x
Quick Ratio
0.61x
Debt/Equity
0.00x
Debt/Assets
106,908.7%
Interest Coverage
-18.63x
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: 2026-03-24T18:58:10.248449 |
Data as of: 2025-09-30 |
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