Hongli Group Inc.(HLP) - 2024 Q2 - Quarterly Report

Financial Statements This section presents the company's consolidated financial statements, including balance sheets, statements of operations, changes in equity, and cash flows, for the periods ended June 30, 2024 Condensed Consolidated Balance Sheets As of June 30, 2024, Hongli Group's total assets increased slightly to $32.70 million from $32.13 million at year-end 2023, driven by a rise in total liabilities to $12.01 million, primarily from increased short-term and long-term loans, consequently decreasing total shareholders' equity to $20.69 million from $21.11 million due to retained earnings reduction Balance Sheet Highlights (as of June 30, 2024 vs. Dec 31, 2023) | Balance Sheet Item | June 30, 2024 (Unaudited) | Dec 31, 2023 | | :--- | :--- | :--- | | Total Assets | $32,697,652 | $32,128,670 | | Cash and cash equivalents | $930,419 | $775,686 | | Accounts receivable | $6,411,049 | $6,013,536 | | Property, plant and equipment, net | $10,771,835 | $10,752,745 | | Total Liabilities | $12,010,684 | $11,021,117 | | Short-term loans | $6,613,276 | $5,726,841 | | Long-term loans | $3,677,777 | $3,338,075 | | Total Shareholders' Equity | $20,686,968 | $21,107,553 | Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) For the six months ended June 30, 2024, the company reported a significant net loss of $1.90 million, a stark reversal from a net income of $0.80 million in the same period of 2023, primarily due to a 21.9% decrease in revenues and a 76.8% surge in selling, general, and administrative expenses, leading to an operating loss of $1.69 million Statement of Operations Summary (For the Six Months Ended June 30) | Financial Metric | 2024 | 2023 | Change | | :--- | :--- | :--- | :--- | | Revenues, net | $6,962,241 | $8,915,111 | -21.9% | | Gross Profit | $2,302,472 | $3,045,801 | -24.4% | | (Loss) income from operations | ($1,694,242) | $784,995 | Negative Swing | | Net (loss) income | ($1,902,348) | $796,354 | Negative Swing | | Basic and diluted (loss) earnings per share | ($0.15) | $0.07 | Negative Swing | - Selling, general and administrative expenses increased significantly to $3,996,714 in H1 2024 from $2,260,806 in H1 2023, contributing heavily to the operating loss[2] Condensed Consolidated Statements of Changes in Shareholders' Equity Shareholders' equity decreased from $21.11 million at the end of 2023 to $20.69 million as of June 30, 2024, primarily driven by a net loss of $1.90 million and a negative foreign currency translation adjustment of $0.49 million, partially offset by $1.97 million in share-based compensation Reconciliation of Shareholders' Equity (For the Six Months Ended June 30, 2024) | Item | Amount | | :--- | :--- | | Balance, December 31, 2023 | $21,107,553 | | Share-based compensation | $1,968,000 | | Net loss for the six months | ($1,902,348) | | Foreign currency translation adjustment | ($486,237) | | Balance, June 30, 2024 | $20,686,968 | Condensed Consolidated Statements of Cash Flows For the first six months of 2024, the company's net cash used in operating activities increased to $1.22 million, investing activities used $0.38 million, a reversal from providing cash in the prior year, while financing activities provided a significant inflow of $1.74 million, mainly from new borrowings and advances from related parties, resulting in a net increase in cash and cash equivalents of $0.11 million, ending the period with $0.93 million Cash Flow Summary (For the Six Months Ended June 30) | Cash Flow Activity | 2024 | 2023 | | :--- | :--- | :--- | | Net cash used in operating activities | ($1,218,353) | ($1,042,104) | | Net cash (used in) provided by investing activities | ($383,749) | $303,312 | | Net cash provided by (used in) financing activities | $1,736,444 | ($365,338) | | Net change in cash, cash equivalents and restricted cash | $114,750 | ($1,247,293) | | Cash, cash equivalents and restricted cash, end of period | $930,419 | $866,746 | - The positive cash flow from financing activities in H1 2024 was primarily driven by advances from related parties ($1.41M) and net new borrowings, contrasting with H1 2023 which included proceeds from the IPO ($9.49M) but also significant loan repayments[4]