KeyStar Corp reported a challenging QQ3 2024, characterized by continued operating losses, negative revenue alignment, and sustained balance sheet liquidity pressures. The quarter yielded net income of -$3.8146 million on revenue of -$0.1878 million, with EBITDA of -$2.3642 million and free cash flow of -$3.0895 million, underscoring a high fixed-cost structure and weak top-line efficiency. Liquidity metrics deteriorate the investment case: current ratio of 0.0903 and cash balance of $0.622 million against total current liabilities of $10.051 million and total debt of $6.200 million, leaving minimal runway without additional financing.
Sequentially, revenue improved QoQ by approximately 69.2%, but profitability remained deeply negative. The gross profit figure of -$1.6989 million, coupled with substantial other expenses, drove a negative net income despite a reported gross margin around 9.05%. The balance sheet shows substantial intangible assets (~$7.1039 million) and a negative stockholders’ equity position (~-$0.514 million), with total liabilities exceeding assets by a wide margin. Financing activities contributed $3.4368 million in the quarter, masking ongoing cash burn in operations. Given the absence of explicit forward guidance in the provided data, the near-term investment case hinges on tangible improvements in revenue quality, cost containment, and access to additional liquidity.
Overall, while there are potential multi-year upside drivers from expanding e-commerce and convention-related services, the QQ3 2024 results signal a high-risk, liquidity-constrained environment. Investors should closely monitor working capital dynamics, revenue mix evolution (online vs. convention services), and any management-driven actions to restore profitability and solvency.
Key Performance Indicators
Revenue
Stable
-187.77K
QoQ: 69.23% | YoY: N/A
Gross Profit
Decreasing
-1.70M
9.05% margin
QoQ: 48.42% | YoY: -790.95%
Operating Income
Decreasing
-2.87M
QoQ: 51.06% | YoY: -39.41%
Net Income
Increasing
-3.81M
QoQ: 56.59% | YoY: 67.95%
EPS
Increasing
-0.06
QoQ: 73.33% | YoY: 81.33%
Revenue Trend
Margin Analysis
Financial Highlights
Revenue: -$0.188 million in QQ3 2024; QoQ change +69.23%; YoY not available. Note: the negative revenue figure is highly unusual and warrants close scrutiny of accounting classification in the quarter.
Gross Profit: -$1.6989 million; QoQ change +48.42%; YoY change -790.95%; gross margin shown as 9.05% in the data, but the raw numbers imply negative gross profit; an inconsistency suggesting data quality issues or mislabeling in the source.
Operating Income: -$2.8719 million; QoQ change +51.06%; YoY change -39.41%; operating margin reported as 15.29%, yet the line items indicate a negative operating result, highlighting potential data inconsistencies or unusual expense recognition.
Net Income: -$3.8147 million; QoQ change +56.59%; YoY change +67.95%; net margin reported as 20.32%; the discrepancy with negative net income suggests data integrity concerns—likely an accounting anomaly in the disclosure rather than business profitability.
EPS (Diluted): -$0.056 per share; QoQ change +73.33%; YoY change +81.33%.
EBITDA: -$2.3642 million; EBITDA margin (reported) 12.59% (likely inconsistent given negative EBITDA and negative operating results).
Free Cash Flow: -$3.0895 million; cash flow from operations: -$2.95698 million; capital expenditures: -$132.50 thousand; indicating persistent cash burn despite limited capital spending.
Cash and liquidity: Cash at end of period $0.622 million; total current liabilities $10.051 million; total assets $10.158 million; Total liabilities $10.672 million; Stockholders’ equity: -$0.514 million; Current ratio 0.0903; Quick ratio 0.0903; Cash ratio 0.0619; Net debt approximately $5.578 million (debt ~$6.200 million minus cash ~$0.622 million).
Debt and leverage: Total debt to capitalization and interest coverage metrics show elevated leverage with negative earnings, contributing to a fragile solvency profile.
Note: Several ratios appear inconsistent with the underlying line items (e.g., margins vs. EBITDA/Operating Income). Caution is warranted in interpreting some profitability metrics without corroborating the company’s detailed financial footnotes.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
-187.77K
N/A
69.23%
Gross Profit
-1.70M
-790.95%
48.42%
Operating Income
-2.87M
-39.41%
51.06%
Net Income
-3.81M
67.95%
56.59%
EPS
-0.06
81.33%
73.33%
Key Financial Ratios
Gross Profit Margin
Weak
9.05%
Gross profit margin is below industry norms, profitability concerns
Operating Profit Margin
Good
15.29%
Operating margin is healthy and competitive within industry standards
Net Profit Margin
Excellent
20.32%
Net profit margin is exceptional, indicating strong pricing power and operational efficiency
Return on Assets
Weak
-0.38%
Return on assets suggests inefficient capital allocation
Return on Equity
Fair
7.42%
Return on equity is acceptable but below top-tier companies
Current Ratio
Concern
0.09
Current ratio below safe levels, potential liquidity risk
Debt to Equity
Conservative
-12.06
Debt-to-equity shows conservative leverage and low financial risk
P/E Ratio
Negative
-3.53x
Negative earnings make P/E ratio not meaningful
Price to Book
Undervalued
-104.69x
Trading below book value, potential value opportunity or distressed
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