Investment Thesis
Despite reporting $8.8M net income, negative operating cash flow of -$4.2M reveals the core business is operationally insolvent, with profitability driven by non-operating gains rather than sustainable operations. Minimal revenue of $244.3K on a $70.1M asset base indicates severe operational distress and unsustainable cash burn.
Strengths
- Conservative capital structure with Debt/Equity of 0.13x
- Adequate liquidity with 1.97x current ratio and $7.4M cash
- Strong interest coverage ratio of 23.0x
Risks
- Negative operating cash flow of -$4.2M indicates core business is operationally insolvent
- Massive $13.0M disconnect between net income ($8.8M) and operating cash flow (-$4.2M) signals non-operational one-time gains masking operational failure
- Revenue of only $244.3K on $70.1M assets suggests development-stage or distressed company with minimal commercial traction
- Free cash flow margin of -1727.4% with cash burn despite reported profitability indicates unsustainable model
Key Metrics to Watch
- Operating cash flow trend and reversion to sustainability
- Source and sustainability of non-operating gains creating net income
- Revenue scaling and ability to generate positive operating cash flow
Financial Metrics
Revenue
244.3K
Net Income
8.8M
EPS (Diluted)
$0.26
Free Cash Flow
-4.2M
Total Assets
70.1M
Cash
7.4M
Profitability Ratios
Gross Margin
100.0%
Operating Margin
3,574.8%
Net Margin
3,619.2%
ROE
15.1%
ROA
12.6%
FCF Margin
-1,727.4%
Balance Sheet & Liquidity
Current Ratio
1.97x
Quick Ratio
1.30x
Debt/Equity
0.13x
Debt/Assets
16.5%
Interest Coverage
22.98x
Long-term Debt
7.5M
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: 2026-05-16T09:20:00.407505 |
Data as of: 2026-03-31 |
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