First America (FSTJ) posts 30% Q2 revenue growth after METech reverse acquisition; cash burn risks

First America Resources Corporation (PINK: FSTJ) - Q2 2025 snapshot

* Reverse-acquisition / corporate change: on April 16, 2025 FSTJ completed an exchange agreement with METech Recycling, Inc.; FSTJ issued 80,000,000 shares to METech shareholders and treated the transaction as a reverse acquisition (METech is the accounting acquirer).

* Revenue growth: Q2 2025 revenues $4,822,842 vs Q2 2024 $3,699,288 (≈+30%); six months 2025 revenues $8,847,835 vs $7,854,888 (≈+13%).

* Gross profit and margin: Q2 gross profit $2,479,798 (gross margin 51% vs 57% prior-year quarter); six months gross profit $4,752,631 (margin ~54%, flat year-over-year).

* Operating results: Q2 income from operations $95,229 vs $43,248 prior year; six months loss from operations $(432) vs six months 2024 income $172,249.

* Net income: Q2 net income $62,123 vs $25,147; six months net income $287,252 vs $130,530 - note large one-time other income below.

* Other income / one-offs: six months "Other income" includes Employee Retention Credit of $346,000 (other income line shows $349,473), materially boosting six-month net income.

* Cash and liquidity: cash decayed to $150,805 at June 30, 2025 from $459,022 at December 31, 2024; operating cash flow used $(249,948) for six months (vs provided $18,426 prior year); net decrease in cash $(308,217) for period.

* Working capital & receivables: accounts receivable, net $2,655,845 (up from $1,520,678); allowance for doubtful accounts $260,000 at June 30, 2025. Related-party AR (First America Metal Corp.) $349,822.

* Liabilities & related-party exposure: total liabilities $8,009,378; current liabilities $6,250,156. Related-party accounts payable to FAMC $1,519,183 and related-party notes payable to First American Management Group Corp $556,000 and to FAMC $657,000.

* Accounts payable concentration: Vendor A (related-party FAMC) represented 43% of accounts payable at June 30, 2025 (69% at year-end 2024).

* Debt activity: new unsecured note $150,000 (17% interest, Feb 2025); secured equipment note $114,121 (6% interest, June 2025) financing $86,117 equipment + $28,004 repair costs; note to FAMC converted $500,000 accounts payable into a note (7.5% interest, interest-only payments).

* Equity & capitalization: 87,964,090 shares outstanding; stockholders' deficit improved to $(1,081,746) from $(1,368,998) at Dec 31, 2024, driven by recent net income and the accounting presentation of the reverse acquisition.

Positive items

* Strong top-line momentum: meaningful revenue growth (Q2 +30%, six months +13%).

* Improved profitability on GAAP basis: positive net income Q2 and for six months ($287,252), helped by ERC credit.

* Gross margins generally healthy (~54% six months) - suggests core recycling/processing economics intact.

Negative / watchlist items

* Cash burn and liquidity risk: cash down to $150,805 and operating cash used $(249,948) for six months - may require external funding.

* Earnings volatility from non-recurring items: $346k ERC materially inflated six-month net income; operating result for six months was essentially break-even (loss $(432)).

* Concentration and related-party risk: substantial balances and business with FAMC / related parties (AR $349,822; AP $1,519,183; notes payable to related parties $1,213,000 combined) and Vendor A = 43% of AP.

* Rising interest and financing costs: interest expense increased (six months $61,789 vs $50,882 prior year) and recent high-rate short-term financing (17% note) increases pressure on cash.

* Growing receivables and allowance: AR jumped to $2.66M with allowance for doubtful accounts $260,000 - collection execution matters.

Bottom line: The company is showing real revenue growth and reported GAAP net income for the period, but that headline is materially influenced by a one-time ERC credit. Operating cash flow is negative and cash on hand has fallen sharply. Related-party concentration and new higher-cost debt raise execution and liquidity risks - investors should treat the reported net income cautiously and watch cash flow / receivables collection, related-party balances, and any further financing needs.