Financial Performance - Revenues for the six months ended June 30, 2025, were $8.15 million, a decrease of 72.7% compared to $29.91 million for the same period in 2024[4] - Net income attributable to common shareholders for the six months ended June 30, 2025, was $0.82 million, down 62.8% from $2.20 million in the prior year[4] - The company reported a gross profit of $2.57 million for the six months ended June 30, 2025, down 32.8% from $3.82 million in the same period of 2024[4] - Total revenue for the six months ended June 30, 2025, was $8,145,257, a decrease from $29,913,040 in the same period of 2024, representing a decline of approximately 72.8%[64] - Revenue from equipment structural parts was $1,840,487 for the six months ended June 30, 2025, compared to $26,584,812 in 2024, indicating a decrease of about 93.1%[64] - Revenue from cubic parking garage sales increased to $6,240,539 in 2025 from $3,136,189 in 2024, reflecting an increase of approximately 99.8%[64] - Maintenance services revenue decreased to $60,748 in 2025 from $180,149 in 2024, a decline of about 66.3%[64] - Research and development expenses for the six months ended June 30, 2025, were $43,860, down from $108,514 in 2024, a reduction of approximately 59.6%[65] Assets and Liabilities - Total assets increased to $57.58 million as of June 30, 2025, up from $45.85 million as of December 31, 2024, representing a growth of 25.7%[2] - Cash and cash equivalents increased to $47.50 million as of June 30, 2025, compared to $19.27 million at the end of June 30, 2024, marking a growth of 146.5%[8] - Total current liabilities rose to $17.17 million as of June 30, 2025, up from $13.43 million as of December 31, 2024, an increase of 27.5%[2] - As of June 30, 2025, net accounts receivable increased by 56% to approximately $30.41 million from $19.5 million as of December 31, 2024[90] - Net inventories as of June 30, 2025, were approximately $3.58 million, reflecting a 150.6% increase from $1.43 million as of December 31, 2024[93] - Other receivables totaled approximately $3.73 million as of June 30, 2025, with short-term capital borrowing accounting for 94% of this amount[96] - Plant and equipment, net, amounted to $8.61 million as of June 30, 2025, with depreciation expenses for the six months ended June 30, 2025, totaling $459,655[99] - Intangible assets, net, increased to $60,607 as of June 30, 2025, from $11,849 as of December 31, 2024[100] - Land-use rights, net, were approximately $2.08 million as of June 30, 2025, with amortization expenses for the six months ended June 30, 2025, amounting to $24,099[101] Cash Flow and Operating Activities - The net cash used in operating activities for the six months ended June 30, 2025, was $(5.45) million, compared to $0.11 million provided in the same period of 2024[8] - The allowance for credit losses balances amounted to $992,180, a decrease from $1,880,343 as of December 31, 2024, indicating improved credit quality[25] - The allowance for credit losses decreased to $992,180 as of June 30, 2025, from $1,880,343 as of December 31, 2024, with expenses for the six months ended June 30, 2025, amounting to $912,445[92] Shareholder and Equity Information - The company issued 4.90 million Class A ordinary shares for cash, contributing to an increase in additional paid-in capital to $8.89 million as of June 30, 2025[6] - The Company had 18,897,500 Class A Ordinary shares issued and outstanding as of June 30, 2025[132] - The Company entered into an underwriting agreement for an initial public offering of 1,500,000 ordinary shares at an offering price of $4.00 per share[129] - The underwriters fully exercised the Over-Allotment Option to purchase an additional 225,000 Ordinary Shares, resulting in net proceeds of $713,500[130] - The Company is required to make appropriations to statutory reserves based on after-tax net income, totaling $400,454 as of June 30, 2025[133] Taxation - The company has no provision for Hong Kong profits tax for the fiscal years ended December 31, 2024, and 2023, as it did not generate assessable profits[115] - The company is subject to a unified 25% enterprise income tax rate under the PRC Enterprise Income Tax Law[116] - The VAT tax rate applicable to the company is 13%, with specific calculations outlined for VAT on sales and purchases[117] - As of June 30, 2025, total taxes payable amounted to $1,470,845, an increase from $842,332 as of December 31, 2024[119] - Income tax payable as of June 30, 2025, was $560,707, compared to $550,283 as of December 31, 2024[119] - Deferred tax assets increased to $190,942 as of June 30, 2025, from $187,392 as of December 31, 2024[119] Lease and Debt Obligations - The company has a total lease liability of $14,770 as of December 31, 2024, with no right-of-use assets recognized as of June 30, 2025[104] - The company entered into a new lease agreement for office space in Pudong New Area, Shanghai, with monthly lease fees of RMB 24,000 (approximately $3,309) starting January 11, 2025[104] - The company has a long-term bank loan from Jiaxing Bank with an outstanding balance of $2,809,342 as of June 30, 2025[108] - The company signed a loan agreement with Jiaxing Bank for RMB 9,999,000 (approximately $1.40 million) at a fixed interest rate of 6.5% per annum, maturing on June 15, 2026[106] - The total short-term loans as of June 30, 2025, amount to $8,248,999, a decrease from $8,624,210 as of December 31, 2024[105] - The outstanding loan balance from Zhejiang Rural Commercial Bank is $1,256,352, while the loan from Jiaxing Bank is $4,536,685 as of June 30, 2025[105] Accounting Policies - The Company maintains its general ledger and journals using the accrual method of accounting, ensuring compliance with US GAAP[15] - The Company’s revenue recognition follows ASC 606, recognizing revenue when control of goods or services is transferred to customers[43] - The Company adopted ASU 2016-13 for credit losses, which resulted in a more timely recognition of credit losses, transitioning to a forward-looking current expected credit losses model[22] - The Company’s plant and equipment are depreciated using the straight-line method over their expected useful lives, with specific useful life estimates provided for various asset categories[28] - The company plans to adopt several new accounting standards effective January 1, 2025, and January 1, 2027, which are not expected to have a material impact on its financial statements[80][81][82] Customer and Supplier Concentration - Four suppliers accounted for approximately 39.20%, 34.83%, 12.18%, and 11.78% of the Company's total cost as of June 30, 2025[123] - Four customers accounted for 34.01%, 16.25%, 10.82%, and 10.80% of the Company's total revenue as of June 30, 2025[124]
Huachen AI Parking Management Technology Holding Co., Ltd(HCAI) - 2025 Q2 - Quarterly Report