China Foods Holdings Ltd. (CFOO) reported significant changes in its financial performance for the three and nine months ended September 30, 2024, compared to the same periods in 2023. The company, which focuses on health and wellness products, experienced a notable increase in revenue, with total revenue for the third quarter rising to $22.4 million from $5.3 million in the prior year. For the nine-month period, revenue increased to $50.0 million from $24.3 million. This growth was primarily driven by the wine segment, which contributed $22.2 million in Q3 2024, up from $2.7 million in Q3 2023, and $46.6 million for the nine months, compared to $21.0 million in the previous year.

Despite the revenue growth, the company reported a gross profit of $1.3 million for Q3 2024, down from $3.7 million in Q3 2023, reflecting a gross profit margin decline from 69% to 6%. For the nine-month period, gross profit increased to $21.5 million, with a margin of 43%, compared to 48% in the prior year. The increase in costs of revenue, which reached approximately 94% of net revenue in Q3 2024, significantly impacted profitability.

Operating expenses for Q3 2024 were $112.0 million, a decrease from $117.2 million in Q3 2023, attributed to reduced administrative costs. The company reported a loss from operations of $110.7 million for Q3 2024, slightly improved from a loss of $113.6 million in Q3 2023. For the nine-month period, the loss from operations was $297.0 million, down from $355.7 million in the previous year.

Net loss for Q3 2024 was $127.2 million, compared to $113.6 million in Q3 2023. However, the nine-month net loss decreased to $297.1 million from $355.1 million in the prior year, indicating improved performance over the longer term.

As of September 30, 2024, total current assets were reported at $251.2 million, down from $349.6 million at the end of 2023. Current liabilities increased to $966.1 million from $756.0 million, leading to a total stockholders’ deficit of $695.8 million, up from $390.8 million at the end of 2023. The accumulated deficit also grew from $(1.7 billion) to $(2.0 billion) during the same period.

The company continues to rely on financial support from stockholders to maintain operations, with no assurance of securing sufficient funds. The introduction of a new high-end wine product line was a strategic response to the COVID-19 pandemic, aimed at diversifying market demand.