Investment Thesis
VPR Brands is in severe financial distress with negative stockholders equity (-$1.4M), indicating technical insolvency. The company faces a critical liquidity crisis (current ratio 0.57x) while burning $1.1M in operating cash flow against collapsing revenue (-36.3% YoY) and deep operating losses (-40.4% margin), with only $125.3K cash against $2.1M liabilities.
Strengths
- Positive gross margin of 28.7% suggests underlying product viability despite demand weakness
- Company maintains revenue generation despite market contraction
- Asset base of $1.6M provides some liquidation value floor
Risks
- Negative stockholders equity of -$1.4M indicates balance sheet insolvency
- Critical liquidity crisis with current ratio of 0.57x and quick ratio of 0.27x; insufficient cash to cover short-term obligations
- Severe operating margin deterioration at -40.4% with cumulative operating losses of $1.5M
- Sharp revenue contraction of 36.3% YoY signals fundamental demand collapse
- Negative free cash flow of $1.1M with minimal cash reserves ($125.3K) relative to debt ($388.5K long-term)
- Interest coverage ratio of -3.9x; operating income insufficient to cover debt service
Key Metrics to Watch
- Revenue stabilization and quarterly growth trajectory
- Operating margin improvement and path to profitability
- Stockholders equity recovery from negative position
- Cash burn rate and timeline to positive operating cash flow
- Debt restructuring or covenant compliance status
Financial Metrics
Revenue
3.6M
Net Income
-1.2M
EPS (Diluted)
$-0.01
Free Cash Flow
-1.1M
Total Assets
1.6M
Cash
125.3K
Profitability Ratios
Gross Margin
28.7%
Operating Margin
-40.4%
Net Margin
-33.1%
ROE
N/A
ROA
-75.1%
FCF Margin
-31.4%
Balance Sheet & Liquidity
Current Ratio
0.57x
Quick Ratio
0.27x
Debt/Equity
N/A
Debt/Assets
130.0%
Interest Coverage
-3.87x
Long-term Debt
388.5K
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: 2026-04-18T19:42:20.098089 |
Data as of: 2025-12-31 |
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