Investment Thesis
Stemtech Corp is technically insolvent with negative stockholders equity of -$5.8M, unable to support operations with a 0.10x current ratio indicating acute liquidity crisis. The company is burning cash at -$610.6K operationally with anemic 2.7% revenue growth, negative operating margins of -76.3%, and insufficient cash reserves ($255.4K) to sustain ongoing losses.
Strengths
- High gross margin of 80.8% suggests underlying product/service unit economics could be viable if operational efficiency improves
Risks
- Technical insolvency: stockholders equity of -$5.8M means liabilities exceed all assets by majority stake
- Critical liquidity crisis: current ratio of 0.10x and quick ratio of 0.08x indicate inability to meet short-term obligations
- Negative operating cash flow of -$610.6K burning cash runway with only $255.4K in reserves
- Unsustainable losses: -$1.8M operating loss and -$2.6M net loss on $2.4M revenue base
- Debt burden: $4.1M long-term debt with -0.2x interest coverage ratio, unable to service from operations
- Stalled growth: only 2.7% YoY revenue growth indicates market contraction or competitive losses
Key Metrics to Watch
- Stockholders equity stabilization and trend toward positive territory
- Operating cash flow trajectory and path to cash flow breakeven
- Cash runway depletion rate and covenant compliance with creditors
- Revenue stabilization or growth re-acceleration above 2.7%
- Debt restructuring negotiations or refinancing activities
Financial Metrics
Revenue
2.4M
Net Income
-2.6M
EPS (Diluted)
$-0.02
Free Cash Flow
-610.6K
Total Assets
3.8M
Cash
255.4K
Profitability Ratios
Gross Margin
80.8%
Operating Margin
-76.3%
Net Margin
-106.0%
ROE
N/A
ROA
-68.3%
FCF Margin
-25.2%
Balance Sheet & Liquidity
Current Ratio
0.10x
Quick Ratio
0.08x
Debt/Equity
N/A
Debt/Assets
274.3%
Interest Coverage
-0.22x
Long-term Debt
4.1M
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: 2026-04-16T17:00:22.025400 |
Data as of: 2025-09-30 |
Powered by Claude AI