Acro Biomedical Reports No Revenue and $8.8 Million Loss in 2023

Acro Biomedical Co., Ltd. reported significant financial challenges in its recent 10-K filing for the year ended December 31, 2023. The company recorded no revenue for the year, resulting in a net loss of approximately $8.8 million, compared to a loss of about $15.9 million on revenues of $658,500 in 2022. The absence of sales during the second and third quarters of 2022 and throughout 2023 has raised concerns about the company's viability, as it has not generated any revenue since December 31, 2022. The company’s cash position is precarious, with only $376 available at year-end, and it has no accounts receivable or inventory.

The filing highlights a drastic decline in operational activity, with the company ceasing purchases of inventory since the second quarter of 2022. Acro Biomedical's revenue historically stemmed from sales of cordyceps-related products, primarily to a limited customer base in Taiwan and Hong Kong. In 2022, two customers accounted for all of the company's revenue, underscoring its dependency on a small number of clients. The company has also recognized a provision for doubtful accounts of $480,000 due to uncollectible receivables, further complicating its financial outlook.

Strategically, Acro Biomedical has faced setbacks in its product development efforts, particularly regarding a proposed cordyceps-infused chicken feed product. The company engaged consultants for research and development in 2021, compensating them with stock grants valued at over $31 million. However, these efforts did not yield a marketable product, and the consulting agreements expired in 2023 without any successful outcomes. The company has indicated that it may not pursue further product development without significant funding, which remains uncertain given its current financial state.

The operational landscape for Acro Biomedical has been adversely affected by external factors, including inflation, supply chain disruptions, and the lingering impacts of COVID-19 restrictions in China. These challenges have not only hindered the company's ability to generate sales but have also contributed to increased costs that it may not be able to pass on to consumers. The company’s stock is currently traded on the OTC Market Group’s Expert Market, limiting its liquidity and making it difficult to raise capital.

Looking ahead, Acro Biomedical's future remains uncertain. The company has expressed the need for significant funding to implement its business plan, but it lacks agreements or understandings for any financing. The management has acknowledged the substantial doubt about its ability to continue as a going concern, emphasizing the critical need to develop a broader customer base and secure reliable funding sources to sustain operations. Without a clear path to revenue generation and operational stability, the company faces significant risks in the coming fiscal periods.