OTC:VYST
Vystar Corp
A volatile OTC stock with a massive 2024 profit driven by discontinued operations and significant cash burn in continuing activities.
Key Metrics
Investment Thesis
Bull Case
The stock offers potential value investors looking for high-volatility turnaround plays, as the 2024 net profit of $2.5M demonstrates the ability to generate substantial income when specific operational segments are sold or closed. With no long-term liabilities and strong financing cash flows, the balance sheet could stabilize if management pivots to profitable continuing operations.
Bear Case
Continuing operations are unprofitable with a negative operating profit of $1.5M and a massive retained earnings deficit of -$59.9M that threatens long-term viability. The reliance on discontinued operations for recent profits creates an unsustainable earnings trajectory, as future revenue growth is capped at $0.1M-$0.5M levels without new business lines.
About Vystar Corp
Vystar Corp (VYST) is a specialized OTC-traded entity operating with significant discontinued operations that generated $4.2M in 2024, while continuing operations faced a loss of $1.7M. The company manages substantial deferred revenue and working capital fluctuations typical of niche service or project-based business models. Markets served are not explicitly detailed but the financial profile suggests a focus on specific contract or interim revenue streams.
Analysis
Management Discussion
Management successfully realized a $4.2M profit from discontinued operations in 2024, which artificially inflated the bottom line to $2.5M despite continuing operations burning -$1.7M. Cash flow from operations was negative at -$99k, while financing activities provided $62k, resulting in a net cash decrease of $37k. The company relies on non-cash adjustments totaling nearly $3M to reconcile its reported earnings with actual cash movements.
Industry Overview
The industry operates within a niche OTC market where companies frequently engage in asset restructuring or project-based contracting that leads to volatile revenue recognition. This sector often sees high volatility between years due to the completion of long-term contracts or the sale of entire operational divisions.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Revenue | $116.5K | $525.9K | $136.0K |
| Cost of Revenue | $505.2K | $141.3K | $66.3K |
| Gross Profit | $-388.7K | $384.6K | $69.6K |
| Operating Expenses | $2.6M | $1.9M | $1.6M |
| Operating Income | $-2.9M | $-1.5M | $-1.5M |
| R&D | — | $100.0K | — |
| Stock-Based Comp | $837.5K | $887.0K | $893.1K |
| D&A | $140.5K | $74.9K | $74.5K |
| Depreciation | $178.7K | $62.2K | $42.8K |
| Amortization | $345.2K | $31.7K | $31.7K |
| Other OpEx | — | $1.8M | — |
| Non-Operating Income | $0 | $0 | $0 |
| Interest Expense | $214.1K | — | — |
| Pre-Tax Income | $-2.9M | $-1.5M | $-1.5M |
| Income Tax | $496.1K | $-543.3K | $154.5K |
| Continuing Ops | $-3.4M | $-996.7K | $-1.7M |
| Discontinued Ops | $-887.6K | $-7.3M | $4.2M |
| Net Income | $-4.3M | $-8.3M | $2.5M |
| Minority Interest | $-372.8K | $-3.1M | $1.8M |
| Net to Common | $-4.0M | $-5.2M | $759.5K |
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Current Assets | $3.8M | $492.0K | $407.4K |
| Accounts Receivable | $12.1K | $4.3K | $20.9K |
| Inventory | $91.7K | $43.8K | $72.2K |
| Prepaid Expenses | $633.8K | $348.3K | $300.6K |
| Other Current Assets | $3.0M | $95.7K | $13.8K |
| Long-Term Assets | $7.9M | $220.4K | $145.9K |
| PP&E (Net) | $140.9K | $97.7K | $54.9K |
| Intangibles | $154.4K | $122.7K | $90.9K |
| Other LT Assets | $7.6M | $0 | $0 |
| Total Assets | $11.6M | $712.4K | $553.3K |
| Current Liabilities | $6.8M | $5.9M | $5.8M |
| Accounts Payable | $1.4M | $1.1M | $1.3M |
| Deferred Revenue | $44.5K | $44.4K | $44.3K |
| Other Current Liab | $4.8M | $4.3M | $4.0M |
| Long-Term Liabilities | $5.5M | $3.8M | $0 |
| Total Liabilities | $12.4M | $9.8M | $5.8M |
| Shareholders' Equity | $-720.8K | $-9.0M | $-5.3M |
| Paid-In Capital | $53.4M | $53.4M | $54.6M |
| Retained Earnings | $-55.4M | $-60.6M | $-59.9M |
| Treasury Stock | $30 | $30 | — |
| Total L&E | $11.6M | $712.4K | $553.3K |
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Net Income (CFO) | $-4.3M | $-8.3M | $2.5M |
| Non-Cash Adjustments | $3.7M | $7.9M | $-2.9M |
| Working Capital Changes | $115.1K | $10.0K | $230.2K |
| Cash from Operations | $-515.5K | $-442.7K | $-100.0K |
| Cash from Investing | $0 | $592.5K | $1.0K |
| Cash from Financing | $499.9K | $-235.1K | $62.0K |
| FX Effect | $0 | $0 | $0 |
| Net Change in Cash | $-15.6K | $-85.2K | $-37.0K |
| Beginning Cash | $151.2K | $135.6K | $50.4K |
| Ending Cash | $135.6K | $50.4K | $13.4K |
Frequently Asked Questions
How does Vystar Corp make money?
Discontinued Operations (Generated $4.2M profit in 2024), Continuing Operations (Reported $1.7M loss and $69k gross profit in 2024), and Deferred Revenue Management (Holding $44k current deferred revenue).
What are the main risks for VYST?
Severe negative operating profit in continuing segments (-$1.5M), massive accumulated deficit ($-59.9M) indicating historical solvency issues, heavy reliance on one-time discontinued gains for reported net income, and high current liabilities ($5.8M) against limited liquid cash.
What is VYST's competitive advantage?
Significant cash reserves from financing activities relative to asset base, ability to monetize large blocks of discontinued business assets, and minimal long-term liability exposure.
Related Companies
Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.