Executive Summary
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
QoQ: 48.42% | YoY:-790.95%
QoQ: 51.06% | YoY:-39.41%
Key Insights
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%; Y...
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
operatingProfitMargin
1529%
operatingCashFlowPerShare
$-0.04
freeCashFlowPerShare
$-0.05
Management Commentary
No earnings-call transcript data were provided in the input. As such, there are no management quotes or thematic highlights to cite. If you can provide the QQ3 2024 earnings call transcript, I will extract themes and quotes by strategy, operations, and market conditions with proper attribution.
Forward Guidance
Lack of explicit forward guidance in the provided data; the outlook hinges on two primary axes: (1) revenue quality and mix—digital/e-commerce growth vs. convention services pipeline—and (2) cost discipline to restore EBITDA profitability. In a base case, near-term revenue normalization may be limited given the negative revenue framing and liquidity constraints, delaying meaningful margin expansion. In a bull case, execution of a cost-reduction program, stabilization of the PPE/inventory cycle, and a replenished convention services backlog could gradually improve gross and operating margins toward breakeven, supported by selective financing to bridge working capital gaps. In a bear case, continued cash burn and a weak balance sheet leave little room for operating resilience without additional equity or debt financing.
Investors should monitor: (a) runway metrics (current ratio, cash burn, and financing needs), (b) progress on cost controls and SG&A rationalization, (c) changes in the revenue mix (online vs. convention services), (d) changes in intangible asset impairment assessments, and (e) any management guidance on liquidity strategies, capex plans, and potential strategic alternatives.