Investment Thesis
Reflect Scientific exhibits positive profitability with strong margins and exceptional liquidity, but faces a critical red flag: negative operating cash flow of -$247.5K despite reporting net income of +$186.9K, indicating poor cash generation quality. The micro-cap scale ($1.5M revenue) combined with stale financial data (Sept 2024) and zero insider activity limits confidence in sustainability and makes this OTC security unsuitable as a growth investment.
Strengths
- Exceptional liquidity with 15.03x current ratio and 43% of assets in cash
- Zero debt and zero leverage provides financial flexibility
- Healthy gross margin of 60.6% demonstrates pricing power
Risks
- Critical: Operating cash flow of -$247.5K while profitable indicates earnings quality concerns
- Micro-cap size with only $1.5M revenue lacks financial resilience
- Negative free cash flow of -$247.5K is unsustainable long-term
Key Metrics to Watch
- Operating cash flow trend - must turn positive
- Revenue growth rate - current base is too small
- Working capital changes - source of cash burn mystery
Financial Metrics
Revenue
1.5M
Net Income
186.9K
EPS (Diluted)
$0.00
Free Cash Flow
-247.5K
Total Assets
2.3M
Cash
1.0M
Profitability Ratios
Gross Margin
60.6%
Operating Margin
10.2%
Net Margin
12.2%
ROE
9.0%
ROA
8.0%
FCF Margin
-16.1%
Balance Sheet & Liquidity
Current Ratio
15.03x
Quick Ratio
9.46x
Debt/Equity
0.00x
Debt/Assets
11.1%
Interest Coverage
176.49x
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: 2026-04-15T03:06:18.983722 |
Data as of: 2024-09-30 |
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