Exhibit 99.1
HONGLI GROUP INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
June 30, | December 31, | |||||||
2024 | 2023 | |||||||
ASSETS | (Unaudited) | |||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 930,419 | $ | 775,686 | ||||
Restricted cash | - | 39,983 | ||||||
Accounts receivable | 6,411,049 | 6,013,536 | ||||||
Notes receivable | 1,882,903 | 236,654 | ||||||
Inventories, net | 2,318,144 | 2,349,705 | ||||||
Due from related parties - officers | - | 342,053 | ||||||
Prepaid expense and other current assets | 452,612 | 1,059,275 | ||||||
Total current assets | 11,995,127 | 10,816,892 | ||||||
Non-current assets | ||||||||
Property, plant and equipment, net | 10,771,835 | 10,752,745 | ||||||
Prepayment for purchase of Yingxuan Assets | 5,362,676 | 5,207,346 | ||||||
Intangible assets, net | 4,502,141 | 4,659,569 | ||||||
Finance lease right-of-use assets, net | 57,786 | 681,845 | ||||||
Deferred tax assets | 8,087 | 10,273 | ||||||
TOTAL ASSETS | $ | 32,697,652 | $ | 32,128,670 | ||||
LIABILITIES | ||||||||
Current liabilities | ||||||||
Short-term loans | $ | 6,613,276 | $ | 5,726,841 | ||||
Accounts payable | 1,279,390 | 1,379,161 | ||||||
Due to related parties | 631 | - | ||||||
Income tax payable | 17,961 | 36,708 | ||||||
Finance lease obligation, current | 1,141 | 45,300 | ||||||
Accrued expenses and other payables | 420,508 | 495,032 | ||||||
Total current liabilities | 8,332,907 | 7,683,042 | ||||||
Long-term loans | 3,677,777 | 3,338,075 | ||||||
TOTAL LIABILITIES | 12,010,684 | 11,021,117 | ||||||
SHAREHOLDERS’ EQUITY: | ||||||||
Ordinary shares, $0.0001 par value, 500,000,000 shares authorized, 13,438,750 and 12,238,750 shares issued and outstanding as of June 30, 2024, and December 31, 2023, respectively | 1,344 | 1,224 | ||||||
Additional paid-in capital | 10,004,556 | 8,036,676 | ||||||
Statutory reserve | 370,683 | 370,683 | ||||||
Retained earnings | 11,703,357 | 13,605,705 | ||||||
Accumulated other comprehensive loss | (1,392,972 | ) | (906,735 | ) | ||||
TOTAL SHAREHOLDERS’ EQUITY | 20,686,968 | 21,107,553 | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 32,697,652 | $ | 32,128,670 |
HONGLI GROUP INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
FOR THE SIX MONTHS ENDED JUNE 30,
2024 | 2023 | |||||||
Revenues, net | $ | 6,962,241 | $ | 8,915,111 | ||||
Cost of revenues | 4,659,769 | 5,869,310 | ||||||
Gross Profit | 2,302,472 | 3,045,801 | ||||||
Operating expenses: | ||||||||
Selling, general and administrative expenses | 3,996,714 | 2,260,806 | ||||||
Total operating expenses | 3,996,714 | 2,260,806 | ||||||
(Loss) income from operations | (1,694,242 | ) | 784,995 | |||||
Other income (expense) | ||||||||
Other income | 127,373 | 445,148 | ||||||
Interest and financing income and (expenses), net | (216,131 | ) | (327,128 | ) | ||||
Other gain (loss) and (expenses), net | (107,826 | ) | (41,070 | ) | ||||
Total other (expenses) income, net | (196,584 | ) | 76,950 | |||||
(Loss) income before income taxes | (1,890,826 | ) | 861,945 | |||||
Income tax expense | 11,522 | 65,591 | ||||||
Net (loss) income | $ | (1,902,348 | ) | $ | 796,354 | |||
Comprehensive income (loss) | ||||||||
Net (loss) income | $ | (1,902,348 | ) | $ | 796,354 | |||
Other comprehensive income (loss) | ||||||||
Foreign currency translation adjustment | (486,237 | ) | (1,115,176 | ) | ||||
Comprehensive loss | $ | (2,388,585 | ) | $ | (318,822 | ) | ||
(Net loss) earnings per share | ||||||||
Basic and diluted | $ | (0.15 | ) | $ | 0.07 | |||
Weighted average common shares outstanding | ||||||||
Basic and diluted | 12,607,981 | 11,150,898 |
2
HONGLI GROUP INC.
UNAUDITIED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 2024 AND 2023
Ordinary Shares | ||||||||||||||||||||||||||||
Number of shares | Amount | Additional paid-in capital | Statutory reserve | Retained earnings | Accumulated other comprehensive income (loss) | Total equity | ||||||||||||||||||||||
Balance, December 31, 2023 | 12,238,750 | $ | 1,224 | $ | 8,036,676 | $ | 370,683 | $ | 13,605,705 | $ | (906,735 | ) | $ | 21,107,553 | ||||||||||||||
Share-based compensation | 1,200,000 | 120 | 1,967,880 | 1,968,000 | ||||||||||||||||||||||||
Net loss for the six months | - | - | - | - | (1,902,348 | ) | - | (1,902,348 | ) | |||||||||||||||||||
Foreign currency translation adjustment | - | - | - | - | - | (486,237 | ) | (486,237 | ) | |||||||||||||||||||
Balance, June 30, 2024 (Unaudited) | 13,438,750 | $ | 1,344 | $ | 10,004,556 | $ | 370,683 | $ | 11,703,357 | $ | (1,392,972 | ) | $ | 20,686,968 |
Ordinary Shares | ||||||||||||||||||||||||||||
Number of shares | Amount | Additional paid-in capital | Statutory reserve | Retained earnings | Accumulated other comprehensive income (loss) | Total equity | ||||||||||||||||||||||
Balance, December 31, 2022 | 10,000,000 | $ | 1,000 | $ | 609,601 | $ | 370,683 | $ | 12,740,983 | $ | (247,574 | ) | $ | 13,474,693 | ||||||||||||||
Initial public offering - March 31, 2023 | 2,062,500 | 206 | 8,249,794 | - | - | - | 8,250,000 | |||||||||||||||||||||
Initial public offering costs | - | - | (1,967,388 | ) | - | - | - | (1,967,388 | ) | |||||||||||||||||||
Underwriter’s option exercised - May 2, 2023 | 309,375 | 31 | 1,237,469 | - | - | - | 1,237,500 | |||||||||||||||||||||
Exercise costs | - | - | (92,813 | ) | - | - | - | (92,813 | ) | |||||||||||||||||||
Net income for the six months | - | - | - | - | 796,354 | - | 796,354 | |||||||||||||||||||||
Foreign currency translation adjustment | - | - | - | - | - | (1,115,176 | ) | (1,115,176 | ) | |||||||||||||||||||
Balance, June 30, 2023 (Unaudited) | 12,371,875 | $ | 1,237 | $ | 8,036,663 | $ | 370,683 | $ | 13,537,337 | $ | (1,362,750 | ) | $ | 20,583,170 |
3
HONGLI GROUP INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Six Months Ended June 30, | ||||||||
2024 | 2023 | |||||||
Cash flows from operating activities | ||||||||
Net (loss) income | $ | (1,902,348 | ) | $ | 796,354 | |||
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||||||||
Depreciation and amortization | 427,005 | 508,428 | ||||||
Allowance for current expected credit losses | 48,833 | 66,277 | ||||||
Write off of construction costs | 28,767 | - | ||||||
Amortization of operating lease right-of-use assets | 11,583 | 22,793 | ||||||
Amortization of intangible assets - land use rights | 50,521 | - | ||||||
Loss (gain) on disposals of property and equipment | 76,901 | (345,519 | ) | |||||
Share-based compensation | 1,968,000 | - | ||||||
Deferred tax provision | 1,964 | - | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | (588,655 | ) | 554,182 | |||||
Notes receivable | (1,663,623 | ) | (377,266 | ) | ||||
Inventories | (22,695 | ) | (330,635 | ) | ||||
Prepaid expense and other current assets | 502,043 | (233,634 | ) | |||||
Other non-current assets | - | 2,166 | ||||||
Due (from) to related parties | (31,246 | ) | 3,210 | |||||
Accounts payable | (77,259 | ) | (1,340,227 | ) | ||||
Accrued expenses and other payables | (30,113 | ) | (292,690 | ) | ||||
Income tax payable | (18,031 | ) | (75,543 | ) | ||||
Net cash used in operating activities | (1,218,353 | ) | (1,042,104 | ) | ||||
Cash flows from investing activities | ||||||||
Purchase of property and equipment | (109,325 | ) | (173,181 | ) | ||||
Prepayments for purchase of Yingxuan Assets | (277,196 | ) | - | |||||
Short-term investment | - | (274,344 | ) | |||||
Proceeds from sale of property and equipment | 2,772 | 750,837 | ||||||
Net cash (used in) provided by investing activities | (383,749 | ) | 303,312 | |||||
Cash flows from financing activities | ||||||||
Payments for financing liabilities | (33,264 | ) | (194,002 | ) | ||||
Payments for finance leases | (43,949 | ) | (208,115 | ) | ||||
Advances from related parties | 1,406,772 | 949,099 | ||||||
Repayments to related parties | (1,038,298 | ) | (542,906 | ) | ||||
Borrowings from short term loans | 2,773,281 | 1,842,440 | ||||||
Repayments of short term loans | (1,719,935 | ) | (3,674,772 | ) | ||||
Borrowings from long term loans | 415,795 | 4,727,388 | ||||||
Repayments of long term loans | (23,958 | ) | (11,408,398 | ) | ||||
Proceeds from initial public offering | - | 9,487,500 | ||||||
Disbursements for initial public offering costs | - | (1,343,572 | ) | |||||
Net cash provided by (used in) financing activities | 1,736,444 | (365,338 | ) | |||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (19,592 | ) | (143,163 | ) | ||||
Net change in cash, cash equivalents and restricted cash | 114,750 | (1,247,293 | ) | |||||
Cash, cash equivalents and restricted cash, beginning of the period | 815,669 | 2,114,039 | ||||||
Cash, cash equivalents and restricted cash, end of the period | $ | 930,419 | $ | 866,746 | ||||
Reconciliation of cash, cash equivalents and restricted cash, beginning of the period | ||||||||
Cash, cash equivalents | $ | 775,686 | $ | 2,085,033 | ||||
Restricted cash | 39,983 | 29,006 | ||||||
Cash, cash equivalents and restricted cash, beginning of the period | $ | 815,669 | $ | 2,114,039 | ||||
Reconciliation of cash, cash equivalents and restricted cash, end of the period | ||||||||
Cash, cash equivalents | $ | 930,419 | $ | 678,770 | ||||
Restricted cash | - | 187,976 | ||||||
Cash, cash equivalents and restricted cash, beginning of the period | $ | 930,419 | $ | 866,746 | ||||
Supplemental disclosure of cash flow information: | ||||||||
Cash paid for interest expense | $ | 304,769 | $ | 409,431 | ||||
Cash paid for income taxes | $ | 27,589 | $ | 330,693 | ||||
Non-cash investing and financing activities | ||||||||
Right-of-use assets transferred to property and equipment upon exercise of purchase option | $ | 645,402 | $ | 482,062 | ||||
Prepayments applied to property and equipment acquired | $ | 83,833 | - | |||||
Security deposits applied to lease payments | $ | - | $ | 33,583 |
4