Investment Thesis
LeafBuyer is technically insolvent with negative stockholders equity of -$1.5M and liabilities exceeding assets by 150%. Despite 15.5% revenue growth and positive free cash flow of $130K, the company is unprofitable with operating losses of -$94.3K and negative net margins of -6.4%, indicating fundamental business model challenges. Critical liquidity concerns (current ratio of 0.49x) combined with inability to cover interest expenses make this a distressed situation with limited margin for error.
Strengths
- Revenue growth of 15.5% YoY demonstrates market demand and business expansion
- Positive free cash flow of $130K and operating cash flow show some cash generation despite losses
- Gross margin of 48.5% indicates reasonable pricing power and product profitability at the gross level
Risks
- Negative stockholders equity of -$1.5M creates technical insolvency and existential solvency risk
- Current ratio of 0.49x indicates critical liquidity crisis with liabilities exceeding liquid assets
- Operating losses and negative net margins of -6.4% demonstrate inability to achieve profitability despite revenue growth
- Negative interest coverage ratio of -2.5x shows company cannot service debt from operating earnings
- Total liabilities of $2.5M exceed total assets of $1.0M by 150%, indicating balance sheet distress
Key Metrics to Watch
- Path to operating profitability and timeline to positive net income
- Stockholders equity trajectory and whether company can return to positive equity
- Cash burn rate and runway given current cash position of $969.1K against negative operations
- Debt restructuring or refinancing needs as company cannot service debt from operations
Financial Metrics
Revenue
1.9M
Net Income
-124.6K
EPS (Diluted)
$0.00
Free Cash Flow
130.0K
Total Assets
1.0M
Cash
969.1K
Profitability Ratios
Gross Margin
48.5%
Operating Margin
-4.9%
Net Margin
-6.4%
ROE
N/A
ROA
-12.2%
FCF Margin
6.7%
Balance Sheet & Liquidity
Current Ratio
0.49x
Quick Ratio
0.49x
Debt/Equity
N/A
Debt/Assets
247.1%
Interest Coverage
-2.49x
Long-term Debt
456.1K
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: 2026-04-12T10:33:19.740590 |
Data as of: 2025-12-31 |
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