Exhibit 99.1

 

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.

 

3

 

 

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 

 

 

4

 

 

 

 

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