HEALTHY EXTRACTS INC.
healthyextractsinc.comAI Executive Summary
AI-powered analysis of 10-Q filing content
Healthy Extracts Inc. reported strong revenue growth (Q2 revenue more than doubled YoY to $2.07M and gross profit nearly 2.5x), driven partly by the Adli Gummies acquisition which added ~$4.9M in goodwill. However, the balance sheet shows severe liquidity deterioration, with current liabilities ballooning to $8.4M against only $1.68M in current assets, largely due to a nine-fold spike in related-party notes payable (from $676K to $6.2M). Combined with disclosed material weaknesses in internal controls and heavy reliance on insider financing and treasury stock buybacks funded despite minimal cash, the company's financial condition presents significant going-concern-level risk despite improving top-line performance.
Red Flags Detected (7)
Disclosure controls and procedures deemed NOT effective due to material weaknesses
Current liabilities ($8.39M) far exceed current assets ($1.68M), resulting in a current ratio of ~0.20 and severe negative working capital
Related-party notes payable (current) surged from $676,250 to $6,209,827 (~818% increase), indicating heavy reliance on insider/affiliate financing
4 more red flags detected
Key Takeaways
Revenue nearly doubled both quarter-over-quarter and six-month-over-six-month, reflecting genuine top-line growth momentum
Despite growth, the company faces a substantial liquidity gap, with current liabilities nearly 5x current assets
3 more takeaways
Filing Overview
What This Means
High Risk Filing: This company is showing signs of financial stress or significant operational challenges.
Deteriorating Trend: Conditions are worsening compared to previous filings. This may create opportunities for service providers.
Quarterly Report: Interim filing with unaudited financial data for the quarter.