10-K: Acro Biomedical Faces Going Concern Amid Zero Revenue, Leadership Shift

Acro Biomedical Co., Ltd. reports no revenue since late 2022, significant losses, and a going concern warning, alongside a recent CEO change and challenges in its cordyceps product market.

Summary

• No revenue generated since December 31, 2022, for the years ended December 31, 2025, and 2024.
• Incurred net losses of $101,146 in 2025 and $42,297 in 2024.
• Minimal cash ($4,098 at December 31, 2025) and no inventory or accounts receivable.
• Financial statements include a going concern paragraph due to lack of revenue, losses, negative cash flow, and inactive business, raising substantial doubt about the company's ability to continue operations.
• The sole funding source since January 1, 2021, has been advances from a minority stockholder and the former chief executive officer.
• Common stock trades on the OTC Market Group's Expert Market, meaning there are no active market makers or public quotes, making it difficult to buy or sell shares.
• The business plan is in preliminary stages and requires significant funding, with no assurance of success in development or implementation.
• Pao-Chi Chu resigned as Chief Executive Officer, Chief Financial Officer, President, Secretary, and Director on August 14, 2025.
• Yu-Ting Su was appointed as Chief Executive Officer, Chief Financial Officer, President, Secretary, and Director on August 14, 2025.
• The company terminated a Hong Kong storage facility lease agreement on August 30, 2025.
• Identified material weaknesses in internal control over financial reporting due to limited staff, lack of segregation of duties, and reliance on third-party consultants.
• Received a liability forgiveness of $62,032 from a third-party vendor in 2025.

Sentiment

Score: 1

Explanation: StockSavvy.ai views this filing as extremely negative, reflecting a company in severe financial distress with no revenue, significant losses, a going concern warning, and substantial operational and governance challenges.

Positives

• Received a liability forgiveness of $62,032 from a third-party vendor in 2025, which contributed to other income.
• Cash and cash equivalents increased from $476 at December 31, 2024, to $4,098 at December 31, 2025, primarily due to related party advances.

Negatives

• No revenue generated for the years ended December 31, 2025, and 2024, and none since December 31, 2022.
• Net loss increased to $101,146 for the year ended December 31, 2025, from $42,297 in 2024.
• Negative working capital of $(386,964) at December 31, 2025, a deterioration from $(321,870) in 2024.
• Negative cash flow from operating activities significantly worsened, increasing from $(36,692) in 2024 to $(196,302) in 2025.
• Financial statements include a going concern warning, indicating substantial doubt about the company's ability to continue operations.
• Common stock trades on the OTC Market Group's Expert Market, lacking an active trading market and public quotes, making it difficult for investors to trade.
• Significant funding is required to implement the business plan, with no assurance of obtaining it.
• Sole funding since January 1, 2021, has been advances from a minority stockholder and former CEO, with no assurance of continued funding.
• Incurred a $480,000 bad debt reserve in 2023 for uncollectible accounts receivable from 2022 sales.
• Business was negatively impacted by political instability in Hong Kong and China's COVID-19 restrictions.
• No full-time employees; the Chief Executive Officer and Chief Financial Officer works part-time and receives no compensation.
• No product liability insurance to protect against potential claims.
• Operates in a highly competitive market for cordyceps products, with many larger and better-capitalized competitors.
• No patents or other intellectual property rights.
• Identified material weaknesses in internal control over financial reporting, including inadequate review levels and lack of segregation of duties.
• Lacks a full-time chief financial officer with an accounting background.
• Has no independent directors, leading to a lack of checks and balances on the sole director/officer.
• Has a history of delinquent SEC filings.
• The sole director and officer is located in Taiwan, potentially making it difficult for U.S. investors to enforce legal rights.
• No intention to pay cash dividends in the foreseeable future.

Risks

• Inability to recommence business, generate revenue, or operate profitably, with no revenue since December 31, 2022.
• Requirement for significant funding to conduct business, with no agreements or assurances of availability or terms.
• Going concern uncertainty due to minimal cash, no revenue, losses, negative cash flow, and inactive business.
• Inability to generate revenue and develop a customer base, with past revenue derived from a small number of customers and significant bad debt.
• Impairment of revenue by Chinese government efforts to politically stabilize Hong Kong and the effects of China's COVID-19 restrictions.
• Adverse effects on business, results of operations, and financial condition from outbreaks of communicable diseases, natural disasters, or other events.
• Subjection to government regulations in the United States (FDA, health, safety, etc.) if operations commence there, incurring significant compliance costs.
• Potential liability or penalties if products sold in Taiwan, Hong Kong, or other countries do not meet purity claims or cause adverse reactions.
• Subjection to government regulations if a chicken feed product is developed, requiring approval and manufacturing in approved facilities.
• Need to develop additional sources of supply for raw materials and finished products, with no long-term agreements with current suppliers.
• Need to develop and maintain marketing and distribution channels, as current sales activities are limited to the part-time CEO.
• Lack of product liability insurance to protect against claims of adverse reactions or contaminants.
• Highly competitive market for cordyceps products, with larger and better-capitalized competitors.
• Uncertainty of a significant market for cordyceps-based products in the United States.
• Market for products may be affected by recalls, successful litigation, or unfavorable public comments.
• Market for products is dependent on public tastes, which can rapidly change.
• Potential for unsuccessful research and development activities, with no assurance of developing a marketable product or obtaining regulatory approval.
• Dependence on the sole chief executive and financial officer, Yu-Ting Su, whose loss would materially impair business.
• Inability to attract, train, and retain technical and financial personnel due to financial condition and stock trading status.
• Inability to protect any intellectual property developed, including challenges in obtaining or enforcing patents and protecting trade secrets.
• Business and gross margin affected by inflation, global supply chain issues, and the aftereffects of China's COVID-19 restrictions.
• No active market for common stock on the OTC Expert Market, making it difficult to buy or sell shares.
• Common stock likely to be a 'penny stock' if a market develops, reducing trading activity and making it difficult to sell.
• Lack of effective internal controls over financial reporting, potentially affecting the market and price of common stock.
• Lack of a full-time chief financial officer, impairing financial controls and ability to raise funds.
• Absence of independent directors, leading to a lack of checks and balances.
• Failure to file timely reports with the SEC, potentially impairing market and value of common stock.
• Difficulty for investors to enforce federal securities laws or legal rights against the sole director/officer located outside the United States.
• Stock price volatility due to low public float, lack of trading volume, and various other factors.
• Potential dilution of net tangible book value if funds are raised by issuing equity or convertible debt securities.
• Former CEO Pao-Chi Chu's significant stock ownership (49.97%) gives him power to elect directors and approve major actions.
• No intention to pay cash dividends in the foreseeable future.

Future Outlook

The company's business plan is in preliminary stages and requires significant funding to implement, with no assurance of success. It intends to recommence operations but cannot guarantee success. There are no current plans to recommence the cordyceps-based chicken feed development, though it may be pursued or other products developed. The ability to generate revenue and operate profitably is uncertain, especially given the complete lack of sales since 2022 and ongoing challenges in the market, including inflation and supply chain disruptions. The company anticipates incurring marketing and other expenses without assurance of generating significant revenue or profit.

Management Comments

• "We have not generated any revenue subsequent to December 31, 2022 through the date of this annual report."
• "Our business plan is in the preliminary stages, and we will require significant funding to implement our business plan, with no assurance that we can or will be successful in developing and implementing our business plan."
• "Although we intend to recommence our operations, we cannot give any assurance that we will be successful in these efforts."
• "Management recognizes that the Company must obtain additional funds and implement its business plans."
• "Management has determined that our internal controls contain material weaknesses due to the absence of segregation of duties, as well as lack of qualified accounting personnel and excessive reliance on third party consultants for accounting and a reliance on outside services for our accounting functions, financial reporting and related activities."

Industry Context

StockSavvy.ai notes that Acro Biomedical operates in the highly competitive nutritional products and dietary supplement market, specifically focusing on cordyceps. This market is characterized by numerous established players with greater financial resources and brand recognition. The company's historical reliance on the Chinese and Hong Kong markets exposes it to geopolitical and economic risks, such as the aftereffects of China's COVID-19 policies and political instability in Hong Kong, which have significantly impacted its past sales and customer base. The proposed cordyceps-infused chicken feed product faces a niche market with high production costs, making it challenging to compete with cheaper alternatives and larger animal feed manufacturers.

Comparison to Industry Standards

• Acro Biomedical's complete lack of revenue since December 31, 2022, and persistent net losses significantly underperform industry standards for active nutritional supplement companies, which typically demonstrate consistent revenue streams and efforts towards profitability.
• The company's minimal cash position ($4,098) and substantial negative working capital ($(386,964)) are far below the liquidity benchmarks of healthy industry peers, indicating severe financial distress.
• The reliance on related-party advances for all funding since 2021 is not a sustainable business model and contrasts sharply with established companies that access diverse capital markets or generate sufficient operating cash flow.
• The trading of its common stock on the OTC Expert Market, with no public quotes or market makers, is a stark deviation from the transparency and liquidity offered by major exchanges where most publicly traded nutritional supplement companies are listed (e.g., GNC Holdings, Herbalife Nutrition, Nature's Sunshine Products).
• The identified material weaknesses in internal controls and lack of independent directors fall short of corporate governance best practices common among publicly traded companies, which prioritize robust financial oversight and independent board structures.

Management Changes

Corporate Governance

Related Party Transactions

• At December 31, 2025, the company owed $1,100 to its former chief executive officer for non-interest-bearing advances, due on demand.
• A minority stockholder advanced $2,250 and paid expenses of $197,674 on behalf of the company during 2025.
• At December 31, 2025, the company owed $324,412 to the minority stockholder for non-interest-bearing advances and expenses paid, due on demand.
• Imputed interest at 4% on related party advances amounted to $9,154 in 2025 and $4,339 in 2024.
• Total amounts due to related parties were $325,512 at December 31, 2025.

Stakeholder Impact

• Shareholders: Face significant dilution risk from potential equity raises, no active trading market for common stock (OTC Expert Market), potential for stock price volatility, and no anticipated cash dividends. Former CEO Pao-Chi Chu's 49.97% ownership gives him significant control.
• Employees: Only one part-time employee (CEO/CFO) who is unpaid, indicating a lack of stable employment and potential for high workload. Future hiring is contingent on improved financial condition.
• Customers: Past customers in China and Hong Kong were severely impacted by COVID-19 policies and political instability, leading to uncollectible accounts and cessation of purchases. Future customers face uncertainty regarding product availability and regulatory compliance.
• Suppliers: No long-term agreements, exposing the company to supply interruptions, higher costs, and potential quality issues.
• Creditors: Significant amounts owed to related parties, with no clear path to repayment without new funding or revenue generation. The going concern warning indicates high risk for any external creditors.

Next Steps

• Obtain additional funds and implement business plans.
• Potentially recommence development efforts for a cordyceps-based chicken feed or other products.
• Develop and implement a successful marketing program, including establishing a marketing organization.
• Develop additional sources of supply for raw materials and finished products.
• Hire qualified sales, marketing, technical, product development, and financial personnel.
• Develop and implement effective internal controls over financial reporting.
• Potentially adopt a code of ethics.

Key Dates

Recommendation

The company faces severe financial distress, evidenced by zero revenue since 2022, increasing net losses, negative working capital, and a prominent going concern warning from its auditors. Its stock trades on the illiquid OTC Expert Market, making any investment highly speculative and difficult to exit. The lack of effective internal controls, absence of independent directors, and heavy reliance on related-party funding further compound the risks. Without a clear path to revenue generation or sustainable financing, the company's ability to continue operations is in substantial doubt, making it a strong sell for any investor.

Keywords

Acro Biomedical, 10-K, SEC filing, nutritional products, cordyceps, going concern, OTC Expert Market, financial losses, management change, corporate governance, risk factors, biomedical, dietary supplements, China market, Hong Kong market, supply chain, inflation, internal controls, related party transactions