Hongchang International Co., Ltd. (formerly Heyu Biological Technology Corporation) reported significant financial developments in its 10-Q filing for the period ending September 30, 2024. The company, which focuses on food trade and meat processing in China, experienced a remarkable increase in revenue, with net revenue for the nine months reaching $2.82 million, a staggering 3,506.86% increase from $78,204 in the same period of 2023. This growth is attributed to the establishment of its subsidiary, Hongfu Food, which began operations in the second quarter of 2024.

The gross profit for the nine months ended September 30, 2024, was $148,578, a turnaround from a gross loss of $26,226 in the prior year. The operating loss decreased to $179,011 from $407,805, indicating improved operational efficiency. The net loss for the nine months was $163,020, down from $392,435 in the same period of 2023.

Total assets increased to $62.11 million as of September 30, 2024, compared to $50.22 million at the end of 2023. This growth was driven by an increase in both current and non-current assets, with total current assets rising to $4.37 million from $3.96 million and non-current assets increasing to $57.74 million from $46.25 million. However, total liabilities also rose significantly to $21.40 million from $9.73 million, leading to an accumulated deficit of $1.03 million, up from $812,539 at the end of 2023.

The company’s cash position showed a decline, with cash at the end of the period at $307,049, down from $863,119 a year earlier. Net cash used in operating activities for the nine months was $(2.68 million), contrasting with a net cash inflow of $777,143 in the same period of 2023. The company reported net cash used in investing activities of $(9.77 million), a decrease from $(41.41 million) in the previous year, while net cash provided by financing activities was $11.86 million, down from $40.37 million.

Strategically, Hongchang completed a merger with Hongchang Global Investment Holdings Limited on September 4, 2023, which resulted in Hongchang BVI becoming a wholly-owned subsidiary. The company has also established several new subsidiaries, including Hongfu Food, which focuses on pork processing and trade. Despite these developments, the company noted a material weakness in its disclosure controls and procedures, primarily due to insufficient personnel trained in U.S. GAAP, and plans to address this issue moving forward.