Form Tyoe: 10-Q

Analyst Summary

• Revenue growth driven by acquisitions and organic sales.
• Gross margin percentage decreased due to facility closure costs and acquisition-related inventory adjustments.
• Operating income decreased due to increased operating expenses related to acquisition integration and reorganization.
• Cash and cash equivalents decreased, likely due to funding acquisitions.
• Goodwill increased substantially, reflecting premiums paid for acquisitions.
• Operating cash flow decreased, aligning with lower net income and increased working capital needs.
• Current ratio decreased from 2.27 to 1.90
• Cash ratio decreased from 0.94 to 0.49
• Debt-to-equity ratio decreased from 0.085 to 0.078
• Interest coverage ratio decreased from 70.66 to 39.67
• Revenue grew by 12.1% from the six months ended January 31, 2024, to the six months ended January 31, 2025.
• Net income decreased by 4.1% from the six months ended January 31, 2024, to the six months ended January 31, 2025.
• EPS decreased by 2.7% from the six months ended January 31, 2024, to the six months ended January 31, 2025.

Opportunities and Risks

• Integration Risk: Successfully integrating Gravotech and AB&R is crucial. Failure to do so could negatively impact financial performance.
• Gross Margin Pressure: Continued pressure on gross margins due to inflationary pressures, supply chain disruptions, and acquisition-related costs.
• Goodwill Impairment: The significant increase in goodwill could lead to future impairment charges if the acquired businesses do not perform as expected.
• Macroeconomic Uncertainty: Global economic conditions, including inflation and supply chain issues, pose ongoing risks.
• Synergies from Acquisitions: Realizing synergies from the acquisitions of Gravotech and AB&R could drive future growth and profitability.
• Organic Growth Initiatives: Investments in R&D and customer service could lead to increased organic sales growth.
• Operational Efficiencies: Driving operational excellence and efficiency gains could improve profitability.
• Strong Liquidity: The company’s strong liquidity position provides flexibility to pursue growth opportunities and manage risks.

Potential Implications

Company Performance

• Ability to successfully integrate acquisitions will be critical.
• Managing costs and navigating macroeconomic challenges will impact future performance.
• Focus on organic growth initiatives to drive sustainable long-term growth.

Stock Price

• Monitor gross margin trends and management’s efforts to mitigate cost pressures.
• Track the progress of integrating Gravotech and AB&R and the realization of expected synergies.
• Regularly evaluate the carrying value of goodwill to assess the risk of potential impairment charges.

Analyst Summary

• Net Loss: A substantial net loss of $769.3 million for the nine months ended September 30, 2024, compared to a net loss of $16.0 million for the same period in 2023.
• Accumulated Deficit: A significant increase in accumulated deficit to $1,084.7 million as of September 30, 2024, from $281.3 million at the end of 2023.
• Negative Equity: Total equity (deficit) is negative $426.2 million as of September 30, 2024, compared to positive $359.6 million at the end of 2023.
• Fair Value Adjustments: Significant fair value adjustments on loans and investments, particularly related to Freedom VCM Holdings, LLC, contributed to the net loss.
• Gross profit margin decreased from 73.9% to 54.8% for the three months ended September 30, 2024, representing a -25.8% change.
• Operating profit margin decreased from -2.2% to -41.0% for the three months ended September 30, 2024, representing a -1763.6% change.
• Net profit margin decreased from -21.0% to -144.3% for the three months ended September 30, 2024, representing a -587.1% change.
• Return on Assets (ROA) = -18.7%
• Return on Equity (ROE) = 1934.8%
• Current Ratio = 1.54
• Quick Ratio = 1.40
• Cash Ratio = 0.28
• Debt-to-Assets Ratio = 1.20
• Interest Coverage Ratio = 2.48
• Asset Turnover = 0.21
• Revenue Growth = -44.7%
• Net Income Growth = 4720.6%
• EPS Growth = 44.6

Opportunities and Risks

• Liquidity Concerns: The company’s ability to meet upcoming debt obligations, particularly the Senior Notes due in 2026, is a significant risk.
• Fair Value Adjustments: Continued volatility in fair value adjustments on loans and investments could further erode profitability.
• Related Party Exposure: The company’s exposure to Freedom VCM and Brian Kahn-related entities presents legal and financial risks.
• Compliance Issues: The “no” response to certain filing requirements raises concerns about regulatory compliance.
• Strategic Initiatives: Asset sales and refinancing efforts could improve liquidity and reduce debt.
• Diversified Business Model: The company’s diversified business model provides some resilience against industry-specific downturns.

Potential Implications

Stock Price

• The company’s stock price of $4.13 reflects these financial challenges, as the valuation ratios are either negative or low, indicating potential undervaluation or investor skepticism.

Analyst Summary

• Extremely low cash balance ($144) indicates severe liquidity issues.
• Substantial working capital deficit ($(1,351,786)) indicates an inability to meet short-term obligations.
• No revenue generated during the period, indicating a complete halt in mining operations.
• Significant net loss ($(729,242)) driven by operating expenses and other expenses.
• Reliance on financing activities to maintain operations, primarily through debt issuance.
• Management acknowledges the company’s significant net loss, accumulated deficit, and working capital deficit, raising substantial doubt about its ability to continue as a going concern.
• Restatement of prior year financial statements indicates potential weaknesses in internal controls.
• Significant amounts due to related parties raise concerns about potential conflicts of interest.
• Issuance of numerous convertible debentures with warrants indicates a reliance on debt financing and potential dilution for existing shareholders.
• Identified deficiencies in segregation of duties and staffing of the financial accounting department raise concerns about the reliability of financial reporting.
• Gross Profit Margin went from -83.96% to N/A.
• Operating Profit Margin went from -35.47% to N/A.
• Net Profit Margin went from -35.90% to N/A.
• ROA went from -7.46 to -6.51.
• ROE went from 1.02 to 1.08.
• EPS went from -$0.03 to -$0.04.
• Current Ratio went from 0.12 to 0.14.
• Quick Ratio went from 0.12 to 0.14.
• Cash Ratio went from 0.00003 to 0.00009.
• Debt-to-Equity Ratio went from -1.14 to -1.17.
• Debt-to-Assets Ratio went from 8.27 to 7.03.
• Interest Coverage Ratio went from -82.87 to -30.54.
• Asset Turnover went from 0.10 to 0.
• Revenue Growth is -1.00.
• Net Income Growth is -0.28.
• EPS Growth is 0.33.

Opportunities and Risks

• Liquidity Risk: The company’s low cash balance and working capital deficit pose a significant risk to its ability to meet short-term obligations.
• Going Concern Risk: The auditor’s note regarding the company’s ability to continue as a going concern is a major risk factor.
• Financing Risk: The company’s reliance on raising additional capital through private or public offerings is subject to market conditions and investor sentiment.
• Operational Risk: The transition to a new co-location facility and the acquisition of new ASIC miners are subject to operational challenges and delays.
• Regulatory Risk: The cryptocurrency industry is subject to evolving regulatory landscape, which could impact the company’s operations.
• Dilution Risk: The issuance of numerous convertible debentures with warrants could result in significant dilution for existing shareholders.
• Related Party Risk: Significant related party transactions raise concerns about potential conflicts of interest and the fairness of transactions.
• Internal Control Risk: Identified deficiencies in internal control over financial reporting could lead to material misstatements in the financial statements.
• Co-location Facility: The transition to a new co-location facility could provide cost savings and operational efficiencies.
• ASIC Miners: The acquisition of new ASIC miners could increase the company’s mining capacity and revenue potential.
• Cryptocurrency Market: The potential for growth in the cryptocurrency market could increase the value of the company’s assets and revenue potential.

Potential Implications

Stock Price

• Investors should avoid investing in T-REX Acquisition Corp. due to its high-risk profile and uncertain future.
• Existing shareholders should consider selling their shares to mitigate potential losses.

Analyst Summary

• HITC reported no revenue for the three and six months ended January 31, 2025, compared to $21,769 in the prior year, indicating a failure to monetize its products.
• Operating expenses increased significantly due to increased staffing, marketing, and stock-based compensation, leading to a substantial net loss of $(1,950,574) for the six months ended January 31, 2025.
• Cash and cash equivalents increased substantially to $6,206,216 due to proceeds from the issuance of common stock, providing the company with short-term financial stability.
• Management emphasizes the company’s focus on ambient AI technology solutions and expansion into new markets, but acknowledges the lack of revenue and continued negative cash flow from operations.
• The company is in default on certain promissory notes and faces litigation related to a guarantee of a loan to a related entity, adding to its financial challenges.
• Gross Profit Margin, Operating Profit Margin, and Net Profit Margin are not applicable due to zero revenue.
• Return on Assets (ROA) is -53.6% and Return on Equity (ROE) is -60.7%, indicating significant losses relative to assets and equity.
• The current ratio is 8.23, indicating strong short-term liquidity due to the recent cash infusion.
• The debt-to-equity ratio is 0.13, indicating that the company is primarily funded through equity.
• Revenue growth is -100% due to the lack of revenue in the current period.

Opportunities and Risks

• Risk: The company has not generated revenue in the current or prior periods, raising concerns about its ability to monetize its products and services.
• Risk: Significant increases in operating expenses, particularly stock-based compensation, are not sustainable without revenue generation.
• Risk: The company is in default on certain promissory notes, which could lead to legal action and further financial strain.
• Risk: The company’s subsidiaries are named as defendants in a lawsuit related to a guarantee of a loan to a related entity.
• Risk: Management acknowledges that the company’s disclosure controls and procedures are not effective.
• Opportunity: The company’s expansion into new markets, such as schools and transportation, presents opportunities for revenue growth.
• Opportunity: The recent capital raises provide the company with the financial resources to invest in product development and marketing.
• Opportunity: The company’s focus on strategic partnerships could lead to new revenue streams and market access.

Potential Implications

Company Performance

• Continued losses and lack of revenue generation could lead to further financial strain and potential insolvency.
• Successful monetization of new product offerings is critical for the company’s long-term viability.
• Effective management of operating expenses is essential to reduce the cash burn rate and improve financial performance.

Stock Price

• The lack of revenue and continued losses could negatively impact the company’s stock price.
• Positive news regarding new product adoption and revenue generation could boost investor confidence and increase the stock price.
• The company’s high cash burn rate and reliance on stock issuance could create downward pressure on the stock price.

Analyst Summary

• Revenue increased by 11.87%, driven by Aerospace Products, while Professional Services revenue remained relatively flat.
• Operating income increased by 45.54%, indicating improved profitability.
• Net income increased by 14.50%, with basic earnings per share increasing by 27.27%.
• Gross profit margin increased from 42.42% to 43.64%, indicating improved efficiency.
• Operating margin increased from 15.30% to 19.91%, indicating improved operational efficiency.
• Net profit margin increased from 14.45% to 14.78%, indicating improved overall profitability.
• The company sold the “Jet Autopilot Product Line” for $1.5 million cash.
• Increased capital expenditures are planned for fiscal year 2025.
• The company is actively repurchasing shares, signaling confidence in its future prospects.
• The Price-to-Earnings Ratio (P/E) is 485.12, which is high compared to industry averages.
• The Price-to-Book Ratio (P/B) is 1.56, which is within an acceptable range.
• The Price-to-Sales Ratio (P/S) is 1.15, which is within an acceptable range.
• The Enterprise Value to EBITDA (EV/EBITDA) is 13.53, which is within an acceptable range.

Opportunities and Risks

• Opportunity: Continued expansion in the Aerospace Products segment, driven by aircraft modifications and special mission electronics.
• Opportunity: Growth in sports wagering revenue within the Professional Services segment.
• Opportunity: Potential for future acquisitions to expand capabilities and market reach.
• Risk: High reliance on a few key customers in the Aerospace Products segment.
• Risk: Potential for cost overruns in fixed-price contracts.
• Risk: Evolving political and legislative initiatives in gaming could impact the Professional Services segment.
• Risk: A general economic downturn could negatively impact both Aerospace Products and Professional Services.
• Risk: Increased revenue share to the state of Kansas, effective December 15, 2024, could negatively impact the profitability of the Professional Services segment.

Potential Implications

Company Performance

• Continued growth in Aerospace Products is expected to drive overall revenue and profitability.
• Increased capital expenditures may impact short-term cash flow but are expected to support long-term growth.
• The increased revenue share to the state of Kansas could negatively impact the profitability of the Professional Services segment.
• Active stock repurchase program may increase earnings per share and provide support for the stock price.

Stock Price

• Positive financial performance and growth prospects may lead to an increase in the stock price.
• Risks related to customer concentration, fixed-price contracts, and regulatory changes could negatively impact the stock price.
• Active stock repurchase program may provide support for the stock price.

Analyst Summary

• Net income attributable to common equity improved from a loss of $512,000 to a profit of $614,000 year-over-year.
• Residential occupancy increased to 96.8%, while commercial occupancy decreased to 48.2%.
• Rental income increased by 2.1% year-over-year, driven by the residential segment.
• Operating expenses decreased by 12.3% year-over-year.
• Cash and cash equivalents decreased from $14.9 million to $11.9 million.
• Management expresses optimism about leasing vacant anchor tenant spaces in commercial properties.
• Recent refinancings and loan modifications/extensions have been at higher interest rates and for shorter terms.
• Gross Profit Margin increased from 13.67% to 27.04%.
• Operating Profit Margin improved from -9.52% to 6.89%.
• Net Profit Margin improved from -9.52% to 6.89%.
• Earnings Per Share (EPS) improved from $(0.07) to $0.08.
• The current ratio increased from 7.01 to 13.34.
• The debt-to-equity ratio increased from 4.89 to 4.98.
• Interest Coverage Ratio (Times Interest Earned) increased from 0.31 to 1.27.
• FFO increased from $0.05 per share to $0.17 per share.
• AFFO increased from $0.04 per share to $0.16 per share.

Opportunities and Risks

• Refinancing Risk: The company faces significant refinancing risk due to upcoming mortgage maturities and potentially higher interest rates.
• Commercial Property Vacancy Risk: Continued vacancies in commercial properties could negatively impact revenue and NOI.
• Interest Rate Risk: Rising interest rates could increase debt service costs and reduce property values.
• Economic Conditions: Adverse economic conditions could impact tenant financial health and demand for rental space.
• Residential Portfolio Strength: The residential portfolio continues to perform well, providing a stable source of revenue.
• Commercial Property Leasing Potential: Management expresses optimism about leasing vacant commercial spaces, which could significantly boost revenue and NOI.
• Cost Management: The company has demonstrated an ability to manage expenses, contributing to improved profitability.

Potential Implications

Company Performance

• Successful refinancing of upcoming mortgage maturities is crucial for maintaining financial stability.
• Improved occupancy rates in commercial properties are needed to boost revenue and NOI.
• Continued cost management efforts will support profitability.
• The company’s ability to navigate interest rate risk will impact its financial performance.

Stock Price

• Positive progress on debt refinancing and commercial property leasing could positively impact the stock price.
• Failure to refinance debt or improve occupancy rates could negatively impact the stock price.
• Overall economic conditions and investor sentiment towards REITs will also influence the stock price.

Analyst Summary

• The company’s balance sheet reveals a concerning financial position with total current liabilities exceeding total current assets, resulting in negative working capital and an increasing accumulated deficit.
• Revenue has decreased for both the three and six-month periods compared to the previous year, while general and administrative expenses have increased, contributing to a larger net loss.
• The company generated positive cash flow from operating activities for the six months ended January 31, 2025, primarily due to changes in operating assets and liabilities, but the overall cash balance remains low.
• Management acknowledges substantial doubt about the company’s ability to continue as a going concern and admits that disclosure controls and procedures were not effective due to material weaknesses in internal controls over financial reporting.
• The company’s revenue is entirely dependent on a single customer for the three and six months ended January 31, 2025, making it highly vulnerable to the loss of that customer.
• Gross Profit Margin increased by 0.9% from 48.97% to 49.87%.
• Operating Profit Margin increased by 22.35% from -241.28% to -187.36%.
• Net Profit Margin increased by 22.35% from -241.28% to -187.36%.
• Return on Assets increased by 59.49% from -172.8% to -71.0%.
• Return on Equity decreased by -65.84% from 80.8% to 27.6%.
• Earnings Per Share increased by 33.53% from -$0.000510 to -$0.000339.
• Current Ratio decreased by -24.32% from 0.37 to 0.28.
• Quick Ratio decreased by -26.47% from 0.34 to 0.25.
• Cash Ratio decreased by -8% from 0.25 to 0.23.
• Debt-to-Equity Ratio decreased by 12.03% from -1.58 to -1.39.
• Debt-to-Assets Ratio increased by 31.25% from 2.72 to 3.57.
• Inventory Turnover decreased by -58.21% from 4.69 to 1.96.
• Asset Turnover decreased by -74.83% from 1.43 to 0.36.
• Price-to-Earnings Ratio is -2949.85.
• Price-to-Book Ratio is -1627.22.
• Price-to-Sales Ratio is 5523.75.
• Enterprise Value to EBITDA is 22,197.78.
• Revenue Growth is -14.28%.
• Net Income Growth is -33.44%.
• EPS Growth is -33.53%.

Opportunities and Risks

• The company’s ability to continue as a going concern is highly uncertain.
• The significant negative working capital position indicates a lack of liquidity and potential difficulty in meeting short-term obligations.
• The reliance on a single customer makes the company vulnerable to the loss of that customer.
• The reliance on a single supplier makes the company vulnerable to disruptions in the supply chain.
• Material weaknesses in internal controls increase the risk of financial misstatements and fraud.
• The trend of decreasing revenue raises concerns about the company’s ability to generate future profits.
• Addressing the internal control weaknesses could improve efficiency and reduce costs.
• The company could explore opportunities to diversify its customer base and expand into new markets.

Potential Implications

Company Performance

• Continued losses and negative cash flow could further erode shareholder equity and jeopardize the company’s ability to operate.
• Failure to address the material weaknesses in internal controls could lead to regulatory scrutiny and further damage the company’s reputation.
• The company’s reliance on a single customer and supplier makes it vulnerable to disruptions in its supply chain and revenue stream.
• The company’s negative working capital position could make it difficult to meet its short-term obligations and invest in future growth.

Stock Price

• The company’s precarious financial situation and the going concern warning could negatively impact its stock price.
• The admission of material weaknesses in internal controls could further erode investor confidence and lead to a decline in the stock price.
• Any negative news regarding the company’s relationship with its single customer or supplier could have a significant impact on its stock price.

Analyst Summary

• Net sales increased significantly due to the Nu Aire acquisition and higher domestic manufacturing volumes, but net earnings decreased due to higher operating expenses and increased interest expense.
• Gross profit margin improved, but operating and net profit margins declined, reflecting the impact of increased operating expenses related to the Nu Aire acquisition.
• Total assets increased significantly due to the Nu Aire acquisition, including goodwill and intangible assets; total liabilities increased substantially, reflecting the debt incurred to finance the acquisition.
• Cash flow from operating activities decreased compared to the prior year, despite higher net sales, due to changes in working capital.
• Management attributes the increase in sales to the Nu Aire acquisition and higher domestic manufacturing volumes; the decrease in international sales is attributed to customer site delays in India.
• The company’s debt-to-equity ratio increased from 1.40 to 2.05, indicating higher leverage.
• The interest coverage ratio decreased from 10.71 to 4.72, indicating a reduced ability to cover interest expenses.
• Inventory turnover decreased from 7.41 to 4.54, indicating slower-moving inventory.
• Days sales outstanding (DSO) increased from 83.77 to 95.88, indicating a longer time to collect receivables.
• Asset turnover decreased from 1.42 to 1.01, indicating less efficient asset utilization.
• The Price-to-Earnings ratio increased from 4.51 to 5.13, while the Price-to-Book ratio decreased from 2.43 to 2.20, and the Price-to-Sales ratio decreased from 0.93 to 0.84.
• Revenue growth increased 11.06%, while net income growth decreased 15.76% and EPS growth decreased 14.55%.

Opportunities and Risks

• Risk: Failure to successfully integrate Nu Aire could negatively impact the company’s financial performance.
• Risk: Increased debt levels could strain the company’s cash flow and limit its financial flexibility.
• Risk: Continued delays and challenges in the international market could hinder revenue growth.
• Risk: Fluctuations in raw material costs, such as steel, wood, and epoxy resin, could impact profitability.
• Opportunity: Realizing synergies from the Nu Aire acquisition could drive revenue growth and improve profitability.
• Opportunity: Continued growth in the domestic market could offset challenges in the international market.
• Opportunity: Converting the robust order backlog into revenue could provide a stable source of income.

Potential Implications

Company Performance

• Successful integration of Nu Aire is critical for realizing anticipated benefits and improving profitability.
• Managing debt levels and improving cash flow will be essential for maintaining financial stability.
• Addressing challenges in the international segment is necessary for achieving sustainable revenue growth.
• The company’s ability to control operating expenses will impact its net profit margin.

Stock Price

• Positive developments in integrating Nu Aire, managing debt, and improving international performance could lead to a more favorable stock rating.
• Continued challenges in these areas could negatively impact investor sentiment and stock price.
• The company’s relatively low P/E and P/S ratios may indicate undervaluation, presenting a potential opportunity for investors.

Analyst Summary

• Ultimate Holdings Group, Inc. is a blank check company seeking a merger or acquisition target but has not yet identified one.
• The company has not generated any revenue and is experiencing increasing operating expenses, leading to consistent net losses.
• Management acknowledges substantial doubt about the company’s ability to continue as a going concern.
• The company relies heavily on related-party funding, primarily from Harbin Co., Ltd., wholly owned by the CEO.
• The Principal Executive and Financial Officer concluded that the company’s disclosure controls and procedures were ineffective due to material weaknesses in internal control over financial reporting.
• The current ratio has decreased from 0.04 to 0.02, indicating a worsening short-term financial health.
• The debt-to-assets ratio has increased significantly, indicating higher leverage.
• Net loss increased by 59.73% compared to the same period last year.

Opportunities and Risks

• Opportunity: Potential for a successful merger or acquisition could improve the company’s financial position.
• Risk: The company’s status as a blank check company inherently carries a high degree of risk.
• Risk: Reliance on related-party funding raises concerns about potential conflicts of interest and the sustainability of this funding source.
• Risk: Ineffective disclosure controls and material weaknesses in internal control over financial reporting raise serious concerns about the reliability of its financial reporting.
• Risk: The company’s negative equity and lack of revenue generation pose significant challenges to its long-term viability.

Potential Implications

Company Performance

• Continued losses and reliance on debt may hinder the company’s ability to attract a suitable merger or acquisition target.
• The going concern issue could limit the company’s operational flexibility and access to capital.
• Weak internal controls may lead to inaccurate financial reporting and potential regulatory scrutiny.

Stock Price

• The acknowledged going concern issue and ineffective disclosure controls are likely to negatively impact investor confidence.
• The lack of revenue and increasing losses may lead to a decline in the company’s stock price.
• Reliance on related-party funding could raise concerns about potential conflicts of interest, further depressing the stock price.

Analyst Summary

• Revenue saw a slight increase, but operating expenses drove a higher net loss.
• Management acknowledges material weaknesses in internal controls.
• The company is heavily reliant on advances from stockholders to fund operations.
• The auditor’s opinion raises substantial doubt about the company’s ability to continue as a going concern.
• Gross Profit Margin decreased from 78.55% to 77.59%.
• Operating Profit Margin increased from -113.59% to -104.94%.
• Net Profit Margin increased from -132.57% to -121.75%.
• ROA increased from -195.31% to -187.26%.
• ROE decreased from 6.87% to 6.27%.
• EPS remained constant at -$0.00.
• Current Ratio remained constant at 0.03.
• Quick Ratio increased from 0.003 to 0.005.
• Cash Ratio decreased from 0.002 to 0.001.
• Debt-to-Equity Ratio remained constant at -1.03.
• Debt-to-Assets Ratio decreased from 31.02 to 30.85.
• Interest Coverage Ratio decreased from -5.98 to -6.24.
• Inventory Turnover decreased from 0.007 to 0.004.
• DPO decreased from 86,744 to 73,608.
• Asset Turnover decreased from 0.029 to 0.016.
• P/E Ratio is not meaningful due to the company’s negative earnings.
• The negative P/B ratio is a result of the negative book value of equity.
• A very high P/S ratio suggests the company is significantly overvalued relative to its sales.
• The negative EV/EBITDA ratio is not meaningful due to the negative EBITDA.
• Revenue Growth is 12%.
• Net Income Growth is 2.86%.
• EPS Growth is N/A.

Opportunities and Risks

• Opportunity: Potential expansion into the gaming and hospitality industry through an agreement with Jericho Associates, Inc.
• Risk: Significant reliance on stockholder advances and rent-free use of facilities from stockholders raises concerns about potential conflicts of interest and the sustainability of these arrangements.
• Risk: Material weaknesses in internal control over financial reporting.
• Risk: Low cash balance and negative equity.
• Risk: High debt-to-assets ratio indicates that the company’s assets are primarily financed through debt, posing a significant risk.

Potential Implications

Company Performance

• Continued operating losses and working capital usage.
• Inability to secure funding from traditional sources.
• Increased risk of errors and fraud in financial reporting due to internal control deficiencies.

Stock Price

• The risks associated with CLEV outweigh any potential rewards at this time.
• The company’s financial instability and going concern issues may negatively impact the stock price.