Financial Performance - Revenue for the three months ended September 30, 2025 decreased by 97.6% to $72,377 compared to $3,052,727 for the same period in 2024, primarily due to cash constraints limiting inventory purchases [296] - Gross profit for the three months ended September 30, 2025 was $426, resulting in a gross margin of 0.6%, down from 7.5% in the same period of 2024 [299] - Revenue for the nine months ended September 30, 2025 decreased 80.8% to $1,663,205 compared to $8,662,414 for the same period in 2024 [310] - Gross profit was $204,684 for the nine months ended September 30, 2025, down from $992,650 in 2024, while gross margin increased to 12.3% from 11.5% [313] - Net loss for the three months ended September 30, 2025 was $2,170,789, a decrease of $579,547 from the net loss of $2,750,336 for the same period in 2024 [307] - Net loss for the nine months ended September 30, 2025 was $5,961,537, a decrease of $863,924 from the net loss of $6,825,461 in 2024 [322] Expenses and Costs - Selling, general and administrative expenses decreased by 44.9% to $1,205,125 for the three months ended September 30, 2025, compared to $2,186,953 for the same period in 2024 [300] - Operating expenses decreased 27.0% to $3,849,952 in 2025, primarily due to a 32.0% reduction in selling, general and administrative expenses [314] - Provision for credit losses increased by 246.5% to $126,824 for the three months ended September 30, 2025, compared to $36,597 for the same period in 2024 [301] - Provision for credit losses increased 401.9% to $306,091 in 2025, reflecting higher estimated credit risk associated with outstanding receivables [316] Cash Flow and Financing - Cash and cash equivalents at the end of the period were $61,450, compared to $40,114 at the end of September 30, 2024 [333] - Net cash used in operating activities was approximately $1.8 million for the nine months ended September 30, 2025, down from $3.2 million in 2024 [334] - The company has a $20 million equity financing program declared effective by the SEC to address liquidity needs [324] - The company has entered into a securities purchase agreement for $2 million with Y.K. Capital Management, Inc., with an initial payment of $500,000 received [327] - Net cash provided by financing activities for the nine months ended September 30, 2025, was approximately $2.3 million, driven by proceeds from Series A and D preferred stock, warrant exercises, and convertible notes borrowing [338] - In comparison, net cash provided by financing activities for the nine months ended September 30, 2024, was approximately $3.0 million, mainly from short-term loans and public offerings [339] Business Development and Strategy - The company plans to enter the electric vehicle market by distributing medium-sized trucks in Latin America and developing indoor growing systems within these trucks [280] - The company is investing in Future Tech Inc., a Bitcoin mining and data center business, and plans to enter the field of Digital Treasury Management focusing on XRP [280] - The company has added new products including organic and non-organic fertilizers and dehumidifiers to enhance its offerings [283] - The company is developing proprietary "all in one" automated and robotic indoor growing systems currently in design and testing phases [286] - The company entered into a strategic cooperation agreement with Sinoinnovo Technology for sourcing grow light systems for distribution in the U.S. and Europe [289] Customer Metrics - The number of customers decreased from 114 in 2024 to 68 in 2025, with average revenue per customer dropping from $75,986 to $24,459 [311] Accounting and Valuation - The company follows ASC 606 for revenue recognition, recognizing revenue upon satisfying performance obligations related to product sales [344] - Accounts receivable are stated at expected collectible amounts, with an allowance for expected credit losses based on historical and forecasted conditions [354] - Inventory is valued at the lower of cost and net realizable value, using the weighted average costing method, and is regularly reviewed for obsolescence [355] - The company reviews long-lived assets for impairment annually and determined no impairment as of September 30, 2025, with estimated disposal values exceeding carrying values [357] Non-Cash Transactions - Non-cash transactions included asset acquisitions via preferred stock and convertible note issuances totaling approximately $12.8 million related to Zak Properties, LLC [340] Off-Balance Sheet Arrangements - The company has no off-balance sheet arrangements that could materially affect its financial condition or results of operations [342]
Nature's Miracle Holding Inc.(NMHI) - 2025 Q3 - Quarterly Report