Hi-Great Group Reports Mixed Q3 Results, Focuses on New Product and Expansion Plans

Hi-Great Group Holding Company reported its financial results for the third quarter and nine months ended September 30, 2024, revealing significant changes in revenue and profitability compared to the previous fiscal period.

For the three months ended September 30, 2024, the company generated sales of $31.4 million, a decrease from $34.0 million in the same period of 2023. For the nine months, sales dropped to $55.7 million from $95.8 million year-over-year. The gross profit for the third quarter increased slightly to $17.6 million from $16.9 million in 2023, while for the nine months, it fell to $29.2 million from $42.5 million. The decline in sales is attributed to the company's ongoing development stage and limited product offerings, particularly in the agritourism and herbal supplement sectors.

Total operating expenses for the third quarter were significantly reduced to $22.9 million from $41.8 million in the prior year, contributing to a smaller loss from operations of $5.3 million compared to a loss of $24.8 million in 2023. For the nine-month period, the loss from operations improved to $27.5 million from $95.6 million. The net loss for the third quarter remained at $5.3 million, while the nine-month net loss decreased to $28.6 million from $95.6 million in the previous year.

The company's financial position showed a decline in total assets, which fell to $60.6 million from $84.1 million as of December 31, 2023. Current assets also decreased to $46.8 million from $56.6 million, while cash reserves improved to $3.5 million from $0.7 million. Total liabilities increased slightly to $198.6 million from $193.6 million, and the accumulated deficit grew to $867.6 million from $839.0 million.

Strategically, Hi-Great Group has withdrawn CBD oils from its business plan and is focusing on marketing SellaCare, Inc.’s organic longevity health supplement. The company has also entered into a licensing agreement with SellaCare, which requires a 25% royalty on gross revenues. Additionally, the company is exploring expansion into the cosmetic sector to establish a more sustainable revenue stream.

The company continues to rely on debt and equity financing to cover operating costs and has not yet established a consistent revenue source. Management is actively seeking additional funding to support its operations and product commercialization efforts. The financial statements were prepared in accordance with GAAP, and the company identified potential material weaknesses in its internal controls, including the lack of an audit committee and segregation of duties.