Investment Thesis
Free Flow USA is in severe financial distress with negative stockholders' equity of -$1.4M, indicating the company is technically insolvent. The company generated only $30K in revenue while burning $68.3K in operating cash flow, demonstrating a fundamentally broken business model with negative gross margins when adjusted for operating expenses. With minimal cash reserves ($24.4K) relative to substantial liabilities ($2.1M) and ongoing operational losses, the company faces imminent liquidity crisis.
Strengths
- Current ratio of 2.18x suggests adequate short-term liquidity coverage on paper
- Gross margin of 100% indicates products are being sold without direct COGS
- No insider selling activity in past 90 days
Risks
- Negative stockholders' equity of -$1.4M indicates technical insolvency and shareholder value destruction
- Revenue of only $30K annualized with operating losses of -$68.1K demonstrates business model failure
- Operating cash flow of -$67K and minimal cash reserves of $24.4K create acute liquidity crisis risk
- Long-term debt of $898.6K is 37x annual revenue, indicating unsustainable debt burden
- Negative interest coverage of -92.7x shows inability to service debt obligations from operations
Key Metrics to Watch
- Quarterly revenue trends and path to positive operating cash flow
- Cash burn rate and runway until insolvency without capital injection
- Debt restructuring negotiations or bankruptcy proceedings
- Any recapitalization or equity raises to address negative book value
Financial Metrics
Revenue
30.0K
Net Income
-46.6K
EPS (Diluted)
$0.00
Free Cash Flow
-68.2K
Total Assets
683.6K
Cash
24.4K
Profitability Ratios
Gross Margin
100.0%
Operating Margin
-226.9%
Net Margin
-155.2%
ROE
N/A
ROA
-6.8%
FCF Margin
-227.4%
Balance Sheet & Liquidity
Current Ratio
2.18x
Quick Ratio
2.18x
Debt/Equity
N/A
Debt/Assets
305.0%
Interest Coverage
-92.72x
Long-term Debt
898.6K
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: 2026-03-24T21:24:11.148901 |
Data as of: 2025-09-30 |
Powered by Claude AI