10-K: Vystar Corporation Reports Net Income of $2.5 Million for Fiscal Year 2024 Amid Operational Shifts

Vystar Corporation reports a net income of $2.5 million for fiscal year 2024, driven by income from discontinued operations, despite a decrease in overall revenue.

Summary

• Vystar Corporation reported a net income of $2.5 million for the year ended December 31, 2024, a significant turnaround from the $8.3 million net loss in 2023.
• The company's revenue decreased by 74.1% to $135,969 in 2024 from $525,883 in 2023.
• Gross profit also saw a substantial decrease of 81.9%, falling to $69,641 in 2024 from $384,583 in the previous year.
• Operating expenses decreased by 17.5% to $1,587,220 in 2024.
• The company's loss from operations improved slightly, decreasing by 1.5% to $1,517,579 in 2024.
• Income from discontinued operations was $4,192,379 in 2024, compared to a loss of $7,322,678 in 2023, primarily due to the derecognition of Rotmans facility lease.
• As of December 31, 2024, Vystar had cash of $7,712 and a deficit in working capital of $5.4 million.
• The company plans to finance its operations through cash on hand, private placements, and increased sales of RxAir products.
• There is substantial doubt about the company's ability to continue as a going concern.
• The company had federal net operating loss (NOL) carry-forwards of approximately $39 million available to offset future taxable income.

Sentiment

Score: 5

Explanation: The document presents a mixed picture. While the company achieved net income, revenue declined significantly, and there are concerns about its ability to continue as a going concern. The sentiment is neutral, reflecting both positive and negative aspects.

Positives

• The company achieved a net income of $2.5 million in 2024, a significant improvement from the $8.3 million loss in 2023.
• Income from discontinued operations was $4,192,379 in 2024.
• Operating expenses decreased by 17.5% to $1,587,220 in 2024.
• The company had federal net operating loss (NOL) carry-forwards of approximately $39 million available to offset future taxable income.

Negatives

• Revenue decreased by 74.1% to $135,969 in 2024.
• Gross profit also saw a substantial decrease of 81.9%, falling to $69,641 in 2024 from $384,583 in the previous year.
• As of December 31, 2024, Vystar had cash of $7,712 and a deficit in working capital of $5.4 million.
• There is substantial doubt about the company's ability to continue as a going concern.

Risks

• Vystar presently does not generate the cash needed to finance its current and anticipated operations.
• The Company is still in the early stage of establishing our business including attracting new customers and increasing sales.
• Our limited operating history makes it difficult to evaluate our business.
• There is substantial doubt about the company's ability to continue as a going concern.
• The company faces significant competition in the air purification market.
• The company is dependent on third-party producers to meet its requirements.
• The company's Vytex operating results could fluctuate and differ considerably from financial forecasts.
• The company's Vytex NRL business is totally dependent on market demand for, and acceptance of, the Vytex Natural Rubber Latex process.
• Significant fluctuations in the cost of raw materials could adversely affect our profits.
• Cybersecurity risks could adversely affect the Company's operating effectiveness and operating results.
• Because our stock price may be volatile due to factors beyond our control, you could lose all or part of your investment.
• If we do not attract and retain highly qualified employees, we may not be able to grow effectively.
• There is no assurance that any significant public market for our shares of common stock will develop.
• The utilization of our tax losses could be substantially limited if we experience an ownership change as defined in the Internal Revenue Code.

Future Outlook

Management plans to finance future operations using cash on hand, as well as increased revenue from RxAir air purifier sales and Vytex license fees, that now also include the Company's association with foam cores made from Vytex used in mattresses, mattress toppers and pillows. There can be no assurances that we will be able to achieve projected levels of revenue in 2025 and beyond.

Management Comments

• The COVID-19 pandemic has raised awareness of airborne disease transmission and consumers desire to reduce their risk of infection through the use of air purifiers.
• The Company has pivoted its resources to meeting the demand for air purifiers by adding additional distributors to the RxAir sales network and contracting the development of the next generation RxAir Ultraviolet-C light air purifiers.
• Vystar and the Indian Rubber Manufacturers Research Associations (IRMRA) are actively collaborating to develop viscoelastic deproteinized natural rubber (DPNR) variants having properties for expanding applications in specific new arenas such as green tires, biodegradable and other unique bioelastoplast product lines that desire a new approach.
• Vystar entered into a Market Development and Distribution Agreement with Corrie MacColl to produce, develop and manage the Vytex product and supply lines.
• This agreement allows Vystar to expand the market for its Natural Rubber Latex products.
• Vystar has expanded Vytex into the consumer arena with an introduction into the bedding category, aligning with key foam manufacturers to create mattresses, mattress toppers and pillows.

Industry Context

The report highlights Vystar's participation in the air purification and natural rubber latex industries, both of which are subject to competition and market fluctuations. The company's focus on eco-friendly products aligns with growing consumer demand for sustainable options.

Comparison to Industry Standards

• The document does not provide enough information to make a detailed comparison to industry standards.
• A thorough comparison would require data on competitors' revenue growth, profitability, and market share in the air purification and natural rubber latex sectors.
• Comparable companies in the air purification market include Honeywell, LG, and Dyson, while major players in the natural rubber latex industry include companies like Sri Trang Agro-Industry and Halcyon Agri (parent company of Corrie MacColl).
• Benchmarking against these companies would provide a clearer picture of Vystar's performance relative to industry norms.

Management Changes

Legal Proceedings

• EMA Financial, Inc. filed a lawsuit in the Southern District of New York against the Company on February 19, 2019.
• The Court issued its order resolving the case in Vystars favor on November 27, 2023.
• On December 27, 2023, EMA filed a notice of appeal with the United States Court of Appeals for the Second Circuit.
• On June 13, 2024, Vystar has timely filed its notice of cross-appeal.
• Both parties filed their final briefs in March 2025 with the Second Circuit Court of Appeals and we await the decision of the Court.

Related Party Transactions

• Jamie Rotman was appointed as President of the Company effective December 21, 2023.
• On July 22, 2024, the Company entered into an Employment Agreement with Ms. Jamie Rotman.
• Blue Oar Consulting, Inc. provides business consulting services to Vystar.
• Dr. Bryan Stone receives a $25 per unit commission for RxAir units sold to a specific customer.
• The Companys former President and CEO, Steven Rotman, was paid $125,000 per year in cash, $10,417 per month in shares based on a 20-day average price at a 50% discount to market, $5,000 per month in cash for expenses, as well as access to a Company provided vehicle and health and life insurance.

Stakeholder Impact

• Shareholders face uncertainty due to the company's financial condition and the substantial doubt about its ability to continue as a going concern.
• Employees may be affected by potential cost-cutting measures or operational changes.
• Customers may experience changes in product availability or service quality.
• Suppliers and creditors face increased risk due to the company's financial instability.

Next Steps

• The company plans to finance its operations through cash on hand, private placements, and increased sales of RxAir products.
• The Company is planning on completing the note conversions in the second quarter of 2025.
• The company also hopes to have an even smaller unit designed during 2026 for automobiles and refrigerators that has USB charging.

Key Dates

Keywords

Vystar Corporation, Vytex, RxAir, Fluid Energy Conversion, Natural Rubber Latex, Air Purification, Financial Results, Net Income, Revenue, Operating Expenses, Discontinued Operations, Going Concern, Related Party Transactions