Investment Thesis
Madison Technologies is in severe financial distress with negative stockholders' equity of -$22.5M, indicating the company is technically insolvent. Despite a dramatic 90,413% revenue increase, the company burns cash heavily (-$254.1K free cash flow), has negligible liquid assets ($593 cash), and posted a -$2.1M net loss with a -144.9% net margin, suggesting the revenue growth is unprofitable and unsustainable.
Strengths
- Gross margin of 53.1% indicates reasonable product profitability before operating expenses
- Dramatic year-over-year revenue growth of 90,413% shows some market traction or significant business restructuring
- Total assets of $16.4K are minimal relative to liabilities, suggesting potential bottom-line clarity
Risks
- Negative stockholders' equity of -$22.5M represents technical insolvency and imminent bankruptcy risk
- Current ratio and quick ratio of 0.00x indicate zero working capital and inability to meet short-term obligations
- Massive operating cash burn of -$156.5K with free cash flow of -$254.1K and only $593 in cash equivalents means liquidity crisis is imminent
- Operating margin of -19.5% and net margin of -144.9% demonstrate core business is severely unprofitable
- No insider activity in past 90 days suggests abandonment or lack of confidence from management
- Revenue surge quality is highly questionable given massive losses, potentially indicating one-time transactions or accounting anomalies
Key Metrics to Watch
- Stockholders' equity trend and path to positive equity restoration
- Operating cash flow and time to complete cash depletion at current burn rate
- Gross margin sustainability and operating expense rationalization
- Revenue quality and repeat customer metrics to validate sustainability of growth
Financial Metrics
Revenue
1.4M
Net Income
-2.1M
EPS (Diluted)
$0.00
Free Cash Flow
-254.1K
Total Assets
16.4K
Cash
593.0
Profitability Ratios
Gross Margin
53.1%
Operating Margin
-19.5%
Net Margin
-144.9%
ROE
N/A
ROA
-12,656.7%
FCF Margin
-17.7%
Balance Sheet & Liquidity
Current Ratio
0.00x
Quick Ratio
0.00x
Debt/Equity
N/A
Debt/Assets
137,146.9%
Interest Coverage
-0.16x
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: 2026-04-01T17:02:12.237853 |
Data as of: 2025-09-30 |
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