Investment Thesis
ETHEMA Health exhibits a critical financial crisis with negative stockholders equity of -$8.6M, severe liquidity constraints (0.18x current ratio), and negative operating cash flow despite 12.6% revenue growth. The company is technically insolvent on a balance sheet basis with only $114K cash against $38.8M liabilities, indicating imminent solvency concerns that outweigh modest topline expansion.
Strengths
- Revenue growth of 12.6% YoY demonstrates market demand
- Positive gross profit of $2.1M shows core operations generate some value
- Positive operating income of $108.1K indicates marginal operational viability
Risks
- Negative stockholders equity of -$8.6M: balance sheet insolvency
- Current ratio of 0.18x: severe liquidity crisis with insufficient current assets to cover liabilities
- Negative operating cash flow of -$339.1K: burning cash operationally despite revenue growth
- Negative net income of -$1.1M: unprofitable despite revenue expansion
- Minimal cash reserves of $114K relative to burn rate and total liabilities
- No insider Form 4 filings in 90 days: absence of insider confidence
Key Metrics to Watch
- Operating cash flow trend and path to positive OCF
- Current ratio and absolute cash position trends
- Net income trajectory and path to profitability
- Debt refinancing and covenant compliance status
Financial Metrics
Revenue
14.0M
Net Income
-1.1M
EPS (Diluted)
$0.00
Free Cash Flow
-497.9K
Total Assets
30.3M
Cash
114.0K
Profitability Ratios
Gross Margin
15.3%
Operating Margin
0.8%
Net Margin
-8.0%
ROE
N/A
ROA
-3.7%
FCF Margin
-3.6%
Balance Sheet & Liquidity
Current Ratio
0.18x
Quick Ratio
0.18x
Debt/Equity
N/A
Debt/Assets
128.3%
Interest Coverage
2.26x
Long-term Debt
4.8M
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: 2026-04-10T19:24:21.478512 |
Data as of: 2025-09-30 |
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