Exchange: OTC | Sector: Industrials | Industry: Electrical Equipment Parts
Q1 2025
Published: Aug 19, 2024
Earnings Highlights
Revenue of $0.02M up 50.4% year-over-year
Gross margin of 40.0%
Net income of -161.65K
"N/A" - N/A
King Resources Inc (KRFG) QQ1 2025 Results Analysis — Industrials / Electrical Equipment & Parts
Executive Summary
King Resources Inc (KRFG) reported QQ1 2025 revenue of $19.189 million, up 50.42% year-over-year, signaling strong top-line momentum driven by demand for its Powertech charging solutions. However, the quarter featured a pronounced profitability gap, with EBITDA of -$159.88 million and net income of -$161.65 million, resulting in margins that remain deeply negative despite a 40% gross margin. The contrast between a healthy gross margin and a substantial operating loss points to a disproportionate fixed cost base and high SG&A/R&D expense relative to the revenue base. Cash burn persisted, with operating cash flow of -$37.22 million and a modest net decrease in cash after financing activities, culminating in a cash balance of $7.05 million at period end.
Balance-sheet signals further underscore liquidity and solvency risks: current ratio and quick ratio are extremely tight (0.0377 and 0.0377 respectively), and total liabilities materially exceed reported assets, yielding negative stockholders’ equity. Despite a strong gross margin, the company faces ongoing funding needs to support operations and potential product expansion. Management commentary from the earnings call is not provided in the supplied transcript, limiting the ability to anchor near-term guidance; as such, the investment stance relies on observed cash burn trajectories, balance-sheet stabilization possibilities, and the potential for revenue growth to translate into sustained profits if cost controls and scale efficiencies materialize.
KPI snapshot and trend commentary (USD millions unless noted):
- Revenue: 19.189; YoY +50.42%; QoQ +0.05%.
- Gross Profit: 7.676; Gross Margin 40.00%; YoY +50.42%; QoQ +0.05%.
- Operating Expenses: 169.440; SG&A + R&D combined; R&D 66.000; G&A 37.440; SG&A 66.000; Selling & Marketing 66.000; SG&A total 103.440.
- EBITDA: -159.880; EBITDA Margin: -8.33%.
- Operating Income: -161.764; Operating Margin: -8.43%.
- Net Income: -161.652; Net Margin: -8.42%.
- EPS (diluted): not reported; Weighted average shares out: 5,764,386,993.
- Cash Flow: Net cash from operating activities -37.223; Net change in cash +5.493; Cash at end of period 7.049; Cash at beginning 1.556.
- Balance Sheet: Total assets 136.874; Total liabilities 3,335.885; Total stockholders’ equity -3,199.011; Total debt 2,227.664; Cash 7.049; Deferred revenue 288.180; Retained earnings -9,553.122; Intangible assets 9.382.
- Liquidity/Leverage: Current ratio 0.0377; Quick ratio 0.0377; Cash ratio 0.00211; Debt ratio 16.28; Net debt -$7.049 (note: unit scale inconsistencies exist in the data).
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
19.19K
50.42%
0.05%
Gross Profit
7.68K
50.42%
0.05%
Operating Income
-161.76K
-307.09%
51.17%
Net Income
-161.65K
-15.17%
82.56%
Key Financial Ratios
currentRatio
0.04
grossProfitMargin
40%
operatingProfitMargin
-843%
netProfitMargin
-842%
returnOnAssets
-118.1%
returnOnEquity
5.05%
debtEquityRatio
-0.7
operatingCashFlowPerShare
$-0
freeCashFlowPerShare
$-0
priceToBookRatio
-0.36
priceEarningsRatio
-1.78
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Earnings call transcript data was not provided in the supplied materials. As a result, there are no management quotes or thematic highlights available to anchor qualitative insights. Once a transcript is provided, we will categorize quotes by themes (strategy, operations, market conditions) and attach context and significance to each.
N/A
— N/A
N/A
— N/A
Forward Guidance
No explicit forward guidance is contained in the provided data. Given the current quarter’s results, investors should monitor: (1) any management-provided targets for revenue growth cadence and cost optimization, (2) progress in reducing the trough between gross margin and overall profitability via SG&A/R&D efficiency, (3) liquidity improvements, including potential financing arrangements or debt refinancings, and (4) working capital dynamics (deferred revenue and accounts payable/receivable movements). Absent concrete guidance, the near-term trajectory depends on whether the company can convert revenue growth into operating leverage and stabilize cash burn while avoiding further dilution or debt escalation.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
KRFG Focus
40.00%
-8.43%
5.05%
-1.78%
GNAL
0.00%
0.00%
0.00%
0.00%
DLYT
10.50%
-1.60%
32.00%
-10.10%
POLA
-22.80%
-1.12%
-19.40%
-7.19%
OZSC
33.10%
-3.31%
5.31%
-99.60%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Overall, the QQ1 2025 result set paints a high-risk, high-variance investment case. The company demonstrates meaningful revenue growth potential but remains unprofitable with an eroded balance sheet and stressed cash flows. The investment thesis hinges on a credible plan to convert top-line growth into operating profitability and to restore balance-sheet resilience. If management can deliver tangible cost containment, accelerate gross-margin-driven profitability, and secure favorable liquidity arrangements within the next 4-8 quarters, the stock could transition from a high-risk opportunistic holding to a more balanced beta, particularly if the company scales its Powertech offering with disciplined capital allocation. Absent such progress, the risk of further dilution or financing reliance remains substantial.
Key Investment Factors
Growth Potential
Revenue growth of 50.4% YoY suggests demand resilience for Powertech charging products. Sustainable upside will hinge on improving operating leverage, scaling online channels, and expanding into new geographies or product adjacencies (65W/120W charging ecosystems). Execution on cost discipline and supply chain resilience could unlock meaningful margin expansion.
Profitability Risk
Material liquidity and solvency concerns persist: negative equity, outsized liabilities relative to assets, and negative cash flow from operations heighten the risk of additional capital raises or capex deficits. Dependence on continued financing, potential dilution, and execution risk in scaling profitable operations are key downside risks. Competitive intensity and supplier risk in the electrical equipment segment could weigh on pricing and margins.
Financial Position
Balance sheet displays negative stockholders’ equity and high deferred revenue with a very tight liquidity position. While gross margins are relatively robust (~40%), operating losses and weak cash flow undermine financial stability. Near-term stability requires cash flow improvement, debt management, and potentially asset-light growth strategies to reduce fixed cost burden.
SWOT Analysis
Strengths
Gross margin around 40% indicates pricing power and resilient product economics on Powertech charging solutions.
Top-line growth momentum (YoY revenue +50.4%) suggests meaningful demand for the portfolio.
Strategic e-commerce distribution through online store, enabling scalable reach.
Weaknesses
Significant profitability gap: EBITDA and net income deeply negative despite gross margins.
Severe liquidity and solvency concerns: near-zero liquidity ratios and negative stockholders’ equity.
High operating and SG&A costs relative to revenue; potential fixed-cost rigidity.
Opportunities
Expansion of energy/charging product ecosystem (65W/120W solutions) with potential new markets.
Operational leverage through scale efficiency, supplier negotiations, and cost optimization.
Potential licensing, partnerships, or strategic collaborations to monetize IP and reduce capex intensity.
Threats
Intense competition in consumer/industrial charging segments could compress margins.
Working-capital volatility and reliance on external financing pose sustainability risks.
Macro-economic headwinds and supply chain disruptions could impact ramp and cost structure.