$0.00
$0.05
bear $0.00
base $0.01
bull $0.05
margin of safety $0.01
market price* $0.53
Business condition attached to the margin of safety
Audited results show a full year of positive owner earnings without one-time credits (roughly the 2024 level of about $257,000, versus a loss of about $155,000 in 2025 once the one-time tax credit is removed), and the balance owed to the related-party supplier/customer has kept shrinking.
First America Resources Corporation is a very small over-the-counter company whose only operating business is METech Recycling, based in Gilroy, California. METech handles end-of-life computer equipment for companies: secure data destruction, refurbishing and reselling servers and laptops, data center decommissioning, and recovering metals from what cannot be reused. The company says the business dates to 1968. It has about 60 employees and 2025 revenue of $18.8 million, up 15.9% from $16.2 million in 2024. The operating business came into the public company through a reverse merger in 2025, so only two years of comparable operating history exist and earlier filings describe an empty shell. One person, CEO Jian Li, owns about 98% of the 87,964,090 shares, and only about 1.6 million shares are in the public float, so the stock is thinly held. How we measured earnings. We start with cash from operations, strip out swings in receivables, payables and accruals, and subtract the cost of keeping equipment going. In 2025 the company financed $193,252 of equipment outside the cash flow statement (2024: $61,880), so we counted that as spending; cash capex alone would have overstated earnings. On that basis owner earnings were about $257,000 in 2024 ($0.0029 per share) and about $191,000 in 2025 ($0.0022 per share). The 2025 figure includes a one-time $346,000 Employee Retention Credit; without it, 2025 would have been a loss of roughly $155,000. Operating expenses rose 19.6% against revenue growth of 15.9%, which turned a 2024 operating profit of $296,000 into a 2025 operating loss of $187,000. Owner earnings fell about 26% in 2025 as reported, and much more without the credit. Base case, $0.0097 per share. We treat normal earnings as the average of 2024 and 2025 with the one-time credit removed, about $51,000 a year, and hold that flat. We do not credit revenue growth: two years of history is not a proven repeating record, and costs grew faster than sales in 2025. We do credit that the business keeps operating, because it has recycled electronics since 1968, so the flat earnings are valued as continuing indefinitely at a 6% discount rate. Base year-one growth is 0%, at or below the 2025 actual decline. Half-year 2026 filings show revenue of $10.6 million and net income of $780,000 for six months, better than the same period of 2025, but we did not raise the level on one interim report because the second half of 2025 gave back the first half's profit. Bear case, negative $0.0032 per share. The 2025 result without the one-time credit repeats for two more years, losing about $155,000 a year, and the business is then wound down with nothing left for shareholders. The named pressures are in the filing: cost growth ahead of revenue; a related party, First America Metal Corp., that is both a 15% customer and the main supplier and is owed $1.16 million (51% of payables); the three largest customers at 15%, 13% and 12% of revenue; $2.05 million of notes payable at rates up to 29.93%; and a shareholder deficit of $1.59 million. In this case the company owes more than the business earns, by roughly $0.3 million, or about $0.003 per share. Bull case, $0.0487 per share. Earnings return to the 2024 level of about $257,000 a year and stay there with no growth. That level was actually achieved in 2024 and is the kind of result the first half of 2026 suggests is possible. We did not add revenue growth or AI-related data center work beyond that level, since management describes it but the filing gives no contracts or backlog for it. What the shares appear to be worth. Our three cases span negative to about five cents a share, so the range is wide. The stock is a very small, illiquid, majority-controlled company with heavy related-party dealings, so the margin-of-safety price is set with a large margin of safety and applies only once evidence shows 2024-style profitability is back. The main things that could prove this wrong are a sustained profit run above the bull case or, on the downside, loss of the related-party relationship. Not reconciled: the filing gives both April 2025 and July 2025 as the date of the business combination, and some of the $346,000 credit may have been received in prior periods. Neither changes our numbers materially.