HONGLI GROUP INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

June 30, December 31,
2023 2022
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalent $ 678,770 $ 2,085,033
Restricted cash 187,976 29,006
Short-term investment 262,022
-
Accounts receivable 6,475,620 7,429,904
Notes receivable 648,357 302,775
Inventories, net 2,802,102 2,613,549
Prepaid expense and other current assets 1,088,152 1,604,134
Total current assets 12,142,999 14,064,401
Non-current assets
Property, plant and equipment, net 10,849,587 12,300,491
Prepayment for purchase of Yingxuan Assets 3,363,840 3,535,975
Intangible assets, net 4,060,693 4,961,881
Finance lease right-of-use assets, net 739,305 1,299,217
Other non-current assets
-
2,174
TOTAL ASSETS $ 31,156,424 $ 36,164,139
LIABILITIES
Current liabilities
Short-term loans $ 3,973,081 $ 6,015,975
Accounts payable 1,587,600 2,957,110
Security deposit received for sales of properties
-
1,449,633
Due to related parties 968,690 607,236
Income tax payable 57,747 136,544
Finance lease obligation, current 144,850 315,780
Accrued expenses and other payables 541,960 955,676
Total current liabilities 7,273,928 12,437,954
Long-term loans 3,272,517 10,147,428
Long-term payable 11,185 42,220
Finance lease obligation, non-current 1,144 46,623
Deferred tax liability 14,480 15,221
TOTAL LIABILITIES 10,573,254 22,689,446
SHAREHOLDERS' EQUITY:
Ordinary shares, $0.0001 par value, 500,000,000 shares authorized, 12,371,875 and 10,000,000 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively* 1,237 1,000
Additional paid-in capital 8,036,663 609,601
Statutory reserve 370,683 370,683
Retained earnings 13,537,337 12,740,983
Accumulated other comprehensive loss (1,362,750 ) (247,574 )
TOTAL SHAREHOLDERS' EQUITY 20,583,170 13,474,693
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 31,156,424 $ 36,164,139
* The share amounts are presented on a retroactive basis.

HONGLI GROUP INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME (LOSS)

FOR THE SIX MONTHS ENDED JUNE 30,

2023 2022
Revenues, net $ 8,915,111 $ 10,485,582
Cost of revenues 5,869,310 6,986,054
Gross Profit 3,045,801 3,499,528
Operating expenses:
Selling, general and administrative expenses 2,260,806 1,987,565
Total operating expenses 2,260,806 1,987,565
Income from operations 784,995 1,511,963
Other income (expense)
Other income 445,148 581,677
Financing expenses (327,128 ) (131,992 )
Other expenses (41,070 )
-
Total other income (expenses), net 76,950 449,685
Income before income taxes 861,945 1,961,648
Income tax expense 65,591 94,786
Net income $ 796,354 $ 1,866,862
Comprehensive income (loss)
Net income $ 796,354 $ 1,866,862
Other comprehensive income (loss)
Foreign currency translation adjustment (1,115,176 ) (617,830 )
Comprehensive income (loss) $ (318,822 ) $ 1,249,032
Earnings per share
Basic and diluted
$ 0.07 $ 0.19
Weighted average common shares outstanding*
Basic and diluted
11,150,898 10,000,000
* The share amounts are presented on a retroactive basis.

2

HONGLI GROUP INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022 (UNAUDITED)

Ordinary Shares* Additional Accumulated other
Number of
shares 		Amount paid-in
capital 		Statutory
reserve 		Retained
earnings 		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
Ordinary Shares* Additional Accumulated other
Number of
shares 		Amount paid-in
capital 		Statutory
reserve 		Retained
earnings 		comprehensive
income (loss) 		Total equity
Balance, December 31, 2021 10,000,000 $ 1,000 $ 609,601 $ 370,683 $ 9,808,620 $ 698,692 $ 11,488,596
Net income for the six months -
-
-
-
1,866,862
-
1,866,862
Foreign currency translation adjustment -
-
-
-
-
(617,830 ) (617,830 )
Balance, June 30, 2022 (Unaudited) 10,000,000 $ 1,000 $ 609,601 $ 370,683 $ 11,675,482 $ 80,862 $ 12,737,628
* The share amounts are presented on a retroactive basis.

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HONGLI GROUP INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Six Months Ended
June 30,
2023 2022
Cash flows from operating activities
Net income $ 796,354 $ 1,866,862
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Depreciation and amortization 508,428 356,948
Allowance for current expected credit losses 66,277
-
Amortization of operating lease right-of-use assets 22,793
-
Gain on disposals of property and equipment (345,519 )
-
Changes in operating assets and liabilities:
Accounts receivable 554,182 (1,721,780 )
Notes receivable (377,266 ) 819,834
Inventories (330,635 ) 61,703
Prepaid expense and other current assets (233,634 ) 65,153
Other non-current assets 2,166 73,295
Due from related parties
-
209
Due to related parties 3,210 (44,604 )
Accounts payable (1,340,227 ) (42,430 )
Accrued expenses and other payables (292,690 ) 110,340
Income tax payable (75,543 ) 57,161
Net cash (used in) provided by operating activities (1,042,104 ) 1,602,691
Cash flows from investing activities
Purchase of property and equipment (173,181 ) (844,151 )
Prepayments for purchase of Yingxuan Assets
-
(843,643 )
Short-term investment (274,344 )
-
Proceeds from sale of property and equipment 750,837
-
Net cash provided by (used) in investing activities 303,312 (1,687,794 )
Cash flows from financing activities
Payments for financing liabilities (194,002 ) (136,645 )
Payments for finance leases (208,115 ) (279,892 )
Advances from related parties 949,099 1,012,549
Repayments to related parties (542,906 ) (262,398 )
Borrowings from short term loans 1,842,440 3,318,567
Repayments of short term loans (3,674,772 ) (3,395,743 )
Borrowings from long term loans 4,727,388
-
Repayments of long term loans (11,408,398 )
-
Proceeds from initial public offering 9,487,500
-
Disbursements for initial public offering costs (1,343,572 ) (84,734 )
Net cash (used in) provided by financing activities (365,338 ) 171,704
Effect of exchange rate changes on cash, cash equivalents and restricted cash (143,163 ) (28,590 )
Net change in cash, cash equivalents and restricted cash (1,247,293 ) 58,011
Cash, cash equivalents and restricted cash, beginning of the period 2,114,039 531,462
Cash, cash equivalents and restricted cash, end of the period $ 866,746 $ 589,473
Reconciliation of cash, cash equivalents and restricted cash, beginning of the period
Cash, cash equivalents $ 2,085,033 $ 484,389
Restricted cash 29,006 47,073
Cash, cash equivalents and restricted cash, beginning of the period $ 2,114,039 $ 531,462
Reconciliation of cash, cash equivalents and restricted cash, end of the period
Cash, cash equivalents $ 678,770 $ 544,682
Restricted cash 187,976 44,791
Cash, cash equivalents and restricted cash, end of the period $ 866,746 $ 589,473
Supplemental disclosure of cash flow information:
Cash paid for interest expense $ 409,431 $ 206,232
Cash paid for income taxes $ 330,693 $ 37,625
Non-cash investing and financing activities
Right-of-use assets transferred to property and equipment upon exercise of purchase option 482,062 156,858
Security deposits applied to lease payments $ 33,583 $ 45,077

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Hongli Group Inc. published this content on 30 November 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 November 2023 21:03:32 UTC.