Farmmi(US:FAMI)2023-08-30 16:00Financial Performance - Total revenues for the six months ended March 31, 2023, were $60.55 million, a 43.6% increase compared to $42.14 million in the same period in 2022[8] - Net income for the six months ended March 31, 2023, was $1.58 million, compared to a net loss of $586,938 in the same period in 2022[8] - Gross profit for the six months ended March 31, 2023, was $2.17 million, a 27.4% decrease compared to $2.99 million in the same period in 2022[8] - Comprehensive income attributable to Farmmi, Inc. for the six months ended March 31, 2023, was $7.27 million, compared to $1.84 million in the same period in 2022[8] - Basic earnings per ordinary share for the six months ended March 31, 2023, was $0.07, compared to a loss of $0.03 in the same period in 2022[9] - Net income for the six months ended March 31, 2023, was $1,579,859, compared to a net loss of $(586,938) for the same period in 2022[12] - Total revenues for the six months ended March 31, 2023, were $60,547,274, with a gross profit of $2,169,452[37] - Net income for the six months ended March 31, 2023, was $1,579,859, compared to a net loss of $586,939 for the same period in 2022[37] - Net income for the six months ended March 31, 2023 was $1,579,859, compared to a net loss of $586,939 for the same period in 2022[69] - Basic earnings per share for the six months ended March 31, 2023 was $0.07, compared to a loss of $0.03 for the same period in 2022[70] - Diluted earnings per share for the six months ended March 31, 2023 was $0.04, compared to a loss of $0.03 for the same period in 2022[70] - Total revenue for the six months ended March 31, 2023 was $60,547,274, compared to $42,135,715 for the same period in 2022, representing a 43.7% increase[130] Cash Flow and Liquidity - Cash and cash equivalents increased to $69.36 million as of March 31, 2023, up from $41.17 million as of September 30, 2022[4] - Cash flows from operating activities for the six months ended March 31, 2023, were $(11,304,117), compared to $6,374,344 for the same period in 2022[12] - Cash flows from investing activities for the six months ended March 31, 2023, were $36,326,277, compared to $(52,924,075) for the same period in 2022[12] - Cash flows from financing activities for the six months ended March 31, 2023, were $1,331,253, compared to $5,895,519 for the same period in 2022[12] - Cash and cash equivalents at the end of March 31, 2023, were $69,356,991, compared to $15,272,941 at the end of March 31, 2022[12] - Net cash provided by operating activities for the six months ended March 31, 2023, was $11,304,117, with a significant cash inflow from investing activities of $36,326,277[39] - Net cash provided by financing activities for the six months ended March 31, 2023, was $1,331,253, indicating positive cash flow from financing[39] - Cash and restricted cash at the end of the period on March 31, 2023, were $69,356,991, up from $41,166,331 at the beginning of the period[39] - Net decrease in cash and restricted cash from continuing operations was $55,664,069 at the end of the year[40] - Cash maintained in banks within the People's Republic of China as of March 31, 2023 and September 30, 2022 was $69,332,191 and $76,308,051, respectively[77] Assets and Liabilities - Total assets increased to $174.55 million as of March 31, 2023, up from $163.78 million as of September 30, 2022[4] - Accounts receivable, net, increased to $27.34 million as of March 31, 2023, up from $16.35 million as of September 30, 2022[4] - Total current liabilities increased to $11.86 million as of March 31, 2023, up from $8.29 million as of September 30, 2022[5] - Consolidated total assets as of March 31, 2023, were $174,550,455, with current assets contributing $156,563,547 and non-current assets $17,986,908[33] - Total liabilities as of March 31, 2023, were $12,559,145, with current liabilities accounting for $11,858,360[33] - Intercompany receivables as of March 31, 2023, were $143,744,535, showing a slight increase from $140,445,311 in the previous period[33][34] - Current liabilities excluding intercompany payables as of March 31, 2023, were $11,858,360, compared to $8,289,321 in the previous period[33][34] - Total shareholders' equity (net assets) as of March 31, 2023, was $161,991,310, reflecting an increase from $154,684,091 in the previous period[33][34] - The Company's accounts receivable increased from $16,358,493 as of September 30, 2022 to $27,477,450 as of March 31, 2023, with an allowance for doubtful accounts of $135,537 and $7,249 respectively[92] - Advances to suppliers increased from $48,636,862 as of September 30, 2022 to $58,979,620 as of March 31, 2023, with an allowance for doubtful accounts of $3,375 and $3,258 respectively[96] - Inventory decreased from $765,930 as of September 30, 2022 to $562,459 as of March 31, 2023, with an allowance for inventory reserve of $120,275 and $49,652 respectively[105] - Property, plant and equipment decreased from $44,868 as of September 30, 2022 to $33,558 as of March 31, 2023, with accumulated depreciation of $105,182 and $89,076 respectively[107] Subsidiaries and Acquisitions - The company acquired Jiangxi Xiangbo Agriculture and Forestry Development Co. Ltd for RMB70 million ($11 million) on September 27, 2021[18] - The company acquired Guoning Zhonghao (Ningbo) Trading Co., Ltd. for RMB5,000 ($788) on September 27, 2021[19] - Farmmi Holdings owns 100% interest in Farmmi Agricultural after a reorganization on December 30, 2021[17] - Farmmi Agricultural owns 100% equity interest in Farmmi Supply Chain, established on February 10, 2022[17] - The company's subsidiaries include Farmmi International, Farmmi Enterprise, Farmmi Technology, Farmmi Ecology, and Farmmi Health Development[15] - Farmmi Agricultural owns 100% equity in FLS Mushroom, Farmmi Biotech, and Farmmi Food, and 77.2% equity in Farmmi E-Commerce[20] - Farmmi Agricultural has effective control over Nongyuan Network through VIE agreements, consolidating its accounts[23] - Yitang Mediservice, established in September 2021, is 95% owned by Nongyuan Network and 5% by Farmmi Ecology[23] - Yiting Meditech, established in September 2021, is 100% owned by Yitang Mediservice[23] - Farmmi Canada was established in July 2022, with Farmmi Inc. owning 100% equity[26] - Farmmi USA was established in April 2023, with Farmmi Inc. owning 100% equity[27] Revenue Breakdown - Shiitake Mushroom revenue decreased by 11.7% to $8,841,248 in 2023 from $10,009,944 in 2022[130] - Mu Er Mushroom revenue decreased by 30.5% to $7,540,236 in 2023 from $10,854,307 in 2022[130] - Tapioca revenue was $31,472,734 in 2023, a new product category not present in 2022[130] - Corn revenue decreased by 8.6% to $9,334,913 in 2023 from $10,209,876 in 2022[130] Loans and Financing - The Company has secured short-term loans totaling $1,019,279 as of March 31, 2023, with effective annual interest rates ranging from 3.95% to 5.13%[110] - Total short-term loans amounted to $1,456,113, with unsecured short-term loans at $436,834, representing 4.65% of the total[111] - Secured long-term loans include a $1,164,890 loan from Bank of Beijing with a 4.8% interest rate, maturing in 2026[111] - Interest expenses for the six months ended March 31, 2023, were $76,799, down from $85,125 in the same period in 2022[113] - The company issued a $6.42 million convertible promissory note on September 26, 2022, with a $0.42 million discount and a derivative liability of $3.87 million[114] - As of March 31, 2023, the balance of the convertible promissory note, net of amortization, was $6.2 million[115] - Subsequent to March 31, 2023, the company obtained $1.5 million in short-term loans and $0.7 million in long-term loans from financial institutions[142] Leases and Contracts - The company's operating lease liabilities totaled $594,609 as of March 31, 2023, with a weighted average discount rate of 10.1% per annum[122][125] - The company's right-of-use assets under operating leases were $579,901 as of March 31, 2023, up from $534,351 as of September 30, 2022[125] - The company recorded lease expense of $43,910 for the six months ended March 31, 2023, compared to $13,278 for the same period in 2022[139] - Total lease area with related parties is 3,573 square meters, with annual rent of $103,578[139] - The Company signed a framework agreement with Ningbo Caixiang Trading Co., Ltd. in May 2022, requiring the supply of agricultural products worth no less than RMB200 million yuan[97] - The Company renewed framework supply agreements with Jingning Liannong Trading Co., Ltd. and Qingyuan Nongbang Mushroom Industry Co., Ltd. in June 2021 for another three years[96] - The Company signed a cooperation agreement with Suizhou Huayu Ecological Agriculture Co., Ltd. on August 1, 2022 to ensure timely and stable supply of edible fungi[99] Other Financial Metrics - The Company had short-term deposits of $35,144,444 earning interest at 2.05% per annum as of September 30, 2022[46] - Biological assets consist of 82 forest right certificates covering 9.6 km², with amortization expenses of $109,570 for the six months ended March 31, 2023[59] - Amortization expenses for intangible assets were $6,885 for the six months ended March 31, 2023[63] - No impairment of long-lived assets was recognized for the six months ended March 31, 2023 and 2022[64] - Contract liabilities as of March 31, 2023 and September 30, 2022 were $479,490 and $637,165, respectively, included in other current liabilities[66] - The company's statutory reserve balance was $0.6 million as of March 31, 2023, down from $1.2 million as of September 30, 2022[119] - Shipping and handling expenses for the six months ended March 31, 2023 and 2022 were $37,053 and $105,918, respectively[82] - The exchange rate as of March 31, 2023 was RMB1 for $0.1456, compared to $0.1406 as of September 30, 2022[81] - The average exchange rate for the six months ended March 31, 2023 was RMB1 for $0.1434, compared to $0.1573 for the same period in 2022[81] - The company is subject to VAT rates ranging from 9% to 13% after April 1, 2019, with certain agricultural products exempt from VAT[84] - The company's operations are located in PRC, and its business may be influenced by political, economic, and legal environments in China[87] - The Company evaluates advances to suppliers for recoverability by monitoring suppliers' ability to deliver and current crop and market conditions[102] - The Company does not carry business interruption insurance or product liability insurance, increasing the risk of uninsured losses[89] - Two major customers accounted for 27.7% and 21.7% of total sales for the six months ended March 31, 2023[120] - Four major suppliers accounted for 16.7%, 15.7%, 12.8%, and 12.2% of total purchases for the six months ended March 31, 2023[121] - Due from related parties decreased to $20,920 as of March 31, 2023 from $59,983 as of September 30, 2022[134] - The Company intends to distribute 95% of VIE's earnings after eliminating accumulated losses and making statutory surplus reserve appropriations[41] - Transfers between FAMI, its subsidiaries, VIE, and WFOE amounted to $5,782,726 from the Holding Company to WFOE and $7,578,036 to other subsidiaries[42] - The company entered into a securities purchase agreement on July 12, 2023 to issue 21,052,632 ordinary shares at $0.38 per share, raising $8 million[141]