Vystar Corporation reported significant financial challenges in its Q1 2024 results, with total revenue declining to $37.6 million, a decrease of 90.8% from $409.9 million in Q1 2023. This sharp decline in revenue was attributed to an internal reorganization. Correspondingly, gross profit fell to $20.2 million, down 93.9% from $333.2 million in the prior year. The cost of revenue also decreased to $17.4 million, reflecting a 77.3% reduction compared to $76.7 million in Q1 2023.

The company experienced a loss from operations of $337.2 million, a substantial increase from a loss of $50.7 million in the same quarter of the previous year. Net loss from continuing operations rose to $345.3 million, compared to $61.1 million in Q1 2023. However, net loss attributable to Vystar decreased to $362.4 million from $766.3 million, primarily due to a significant reduction in losses from discontinued operations, which fell to $374.7 million from $1.3 million.

Total operating expenses for the quarter were $357.4 million, down from $383.9 million in Q1 2023, reflecting cost-cutting measures in response to declining revenues. The company reported a net cash used in operating activities of $100.8 million, contrasting with a net cash provided of $345.2 million in the same period last year. Cash at the end of the quarter stood at $11.8 million, a significant drop from $35.4 million at the end of 2023.

Vystar's total assets decreased to $645.0 million from $712.4 million, while total liabilities increased to $10.1 million from $9.8 million. The stockholders’ deficit widened to $9.4 million from $9.0 million. The company reported a working capital deficit of approximately $6 million and an accumulated deficit of around $61 million.

Strategically, Vystar is focusing on its RxAir air purification units, which accounted for 71.6% of net sales in Q1 2024, down from 98.5% in the previous year. The company plans to finance future operations through cash on hand, increased revenue from RxAir sales, Vytex license fees, and stock issuances. However, there is substantial doubt regarding the company's ability to continue as a going concern without achieving projected revenue and securing additional financing.

Management has identified material weaknesses in internal controls and is working to improve financial reporting processes. The company is also addressing legal proceedings, including a lawsuit filed by EMA Financial, Inc., which has implications for its financial position.