HCIL 10-K & 10-Q changes, risk factors and insider trading
Hongchang International Co., Ltd · OTC · Electromedical & Electrotherapeutic Apparatus · CIK 1086303 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
No wording changes found in this section.
Full comparison: every changed paragraph (0)
Management's Discussion & Analysis (MD&A)
New heading “Sales and marketing expenses”
New heading “Allowance of Expected Credit Losses”
New heading “Impairment of long-lived Assets”
Removed heading “Use of estimates”
Removed heading “Construction-in-progress”
Removed heading “Land use right, net”
Removed heading “(g) Revenue recognition”
Largest changes
“The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, related disclosures of contingent assets and liabilities at the balance sheet date, and the reported revenue and expenses during the reported period in the consolidated financial statements and accompanying notes. …”see in full comparison
“The Company adopted ASU No. 2016-13, “Financial Instruments — Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments” on January 1, 2023 using a modified retrospective approach. ASC 326 introduces an approach based on expected losses to estimate the allowance for doubtful accounts, which replaces the previous incurred loss impairment model. …”see in full comparison
“We consider an accounting estimate to be critical if: (i) the accounting estimate requires us to make assumptions about matters that were highly uncertain at the time the accounting estimate was made, and (ii) changes in the estimate that are reasonably likely to occur from period to period or use of different estimates that we reasonably could have used in the current period, would have a material impact on our financial condition or results of operations. …”see in full comparison
Full comparison: every changed paragraph (41)
Our
business is in its early stages, revenue represents
the sales of goods supplied to customers, and sales are primarily driven by the demand
from customer. The growth of our revenue will be
primarily driven by increasing our product variety, expanding the distribution network,
both in China and overseas and the initiation
of other projects or business lines in the future. Revenue is influenced by potential competitors
entering the market, economic conditions,
pricing, inflation, product diversification, and customer consumption habits. We generated
revenue of $2,867,102 for the year ended December
31, 2024, compared to $2,675,789 for the year ended December 31, 2023, compareddue to nillaunch forof 2022,our asnew webeef startedand operatingmutton fromsupplying business at the beginningend of 2023.2024.
Cost
of revenues represents costs and expenses
directly attributable to the purchase of our products sold and delivered, and direct labor
costs. Cost of revenues werewas $2,606,431$2,685,470 for the for
the year ended December 31, 2023,2024, compared to nil$2,606,431 for the 2022,year ended 2023, due to the increase
in sales.
Gross
margin is gross profit divided by revenue.
Gross margin is a measure used by management to indicate whether we are selling products at
an appropriate gross profit. Our gross margin
is influenced by product prices, product combinations, availability, and discounts, as
some products typically offer higher gross profit
margins, as well as the impact of our product costs, which may vary. At present, we
offer competitive prices to attract and retain customers.
In the future, as we grow, we will launch diversified products and competitive
services to increase market share. We regularly evaluate
the profitability of its products. As our business activities started in 2023,
weWe had a gross profit of $69,358$181,632 and nil$69,358 for the yearyears ended December 31, 20232024 and 20222023, respectively.
Our
operating expenses consist of sales and marketing
expenses and general and administrative expenses, which primarily include payroll,
employee benefit expenses and bonus expenses, shipping expenses, promotion and advertising expenses, and other facility related costs,
such as utilities, and depreciation.expenses.
Sales and marketing expenses
Sales and marketing expenses consist primarily of advertising expenses, gift expenses and sample fees. We incurred advertising expenses of $1,353 and $nil for the years ended December 31, 2024 and 2023, respectively.
We incurred general and administrative expenses of $560,577 and $538,902 for the years ended December 31, 2024 and 2023, respectively.
We
incurred general and administrative expenses of $538,930 for the year ended December 31, 2023, as compared to $239,992 in 2022, respectively.
The increase in general and administrative expenses was mainly due to the increase in professional consulting fees, increase in
wages expenses related to the increase in headcount and overall higher general and administrative expenses.
We
incurred income tax benefit of $65,905$22,303 and nil
$65,905 for the yearyears ended December 31, 20232024 and 2022,2023, respectively.
As
a result of the foregoing, we reported a net
loss of $378,794$472,393 and $239,989$378,794 for the yearyears ended December
31, 2024 and 2023 and 2022 respectively.
The
following chart provides a summary of our
key balance sheet items on for the fiscal years ended December 31, 20232024 and 2022,2023, and should
be read in conjunction with the financial statements,
and notes thereto, included with this Report at Part II, Item 8, below.
As
of December 31, 2023,2024, we had US$895,730US$240,598 in
cash, as compared to US$3,141US$895,730 as of December 31, 2022.2023. AsWe wecontinued started our business operation
in 2023, we have been relying on directors’ loan and capital contribution to financefinancing our daily operation and construction in progress.progress in 2024.
Net
cash providedused byin operating activities for the
year ended December 31, 20232024 was US$750,521,US$7,337,639, which primarily reflected our net loss of
US$378,794 US$472,394 as mainly adjusted for amortization
of US$88,173,US$90,510, and adjustment for changes in working capital primarily consistsconsisting of a decrease in accounts receivable of US$677,615 and
increase
in other current assets of US$1,058,798US$183,013 offset by (i) increasedecrease in deferredaccounts subsidiespayable of US$1,990,873,US$640,421, (ii) increase in accountsother payablereceivable
of US$645,831US$6,920,988 and (iii) increasedecrease in accrued expenses and other payables of US$313,708.US$236,528.
Net
cash usedprovided inby operating activities for
the year ended December 31, 20222023 was US$225,774,US$750,521, which primarily reflected our net loss of US$239,989
US$378,794 as mainly adjusted for amortization
of US$92,367,US$88,173, and adjustment for changes in working capital primarily consistsconsisting of an increase in amount
dueother fromcurrent a related partyassets of US$62,427.US$1,058,798
offset by (i) increase in deferred subsidies of US$1,990,873, (ii) increase in accounts payable of US$645,831 and (iii) increase in accrued
expenses and other payables of US$313,708.
Net
cash used in investing activities for the
years ended December 31, 20232024 and 20222023 was US$41,679,473US$3,504,356 and US$1,555,438,US$41,679,473, mainly attributable
to the purchase of property and equipment.equipment
and payments for acquisitions of businesses.
Net cash provided by
financing activities for the year ended December 31, 2023 was US$40,942,007, primarily due to (i) capital contributions made by stockholders
of US$41,241,108 and (ii) proceeds from a loan from a related party of US$2,900,289 and repayments of a loan from a related party US$3,199,390.
Net
cash provided by financing activities for
the year ended December 31, 20222024 was US$1,781,932,US$10,204,753, primarily due to the(i) proceeds from along loanterm loans of US$6,884,567 and (ii) loans
from arelated parties of US$8,926,432 and repayments to related party.parties US$5,606,246.
Net cash provided by financing activities for the year ended December 31, 2023 was US$40,942,007, primarily due to (i) capital contributions made by stockholders of US$41,241,108 and (ii) loan from a related party of US$2,900,289 and repayments to a related party of US$3,199,390.
Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements. These financial statements are prepared in accordance with U.S. GAAP, which requires us to make estimates and assumptions that affect the reported amounts of our assets and liabilities and revenue and expenses, to disclose contingent assets and liabilities on the date of the consolidated financial statements, and to disclose the reported amounts of revenue and expenses incurred during the financial reporting period. The most significant estimates and assumptions include the assessment of the expected credit losses for receivables and the recoverability of long-lived assets. We continue to evaluate these estimates and assumptions that we believe to be reasonable under the circumstances. We rely on these evaluations as the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Since the use of estimates is an integral component of the financial reporting process, actual results could differ from those estimates. Some of our accounting policies require higher degrees of judgment than others in their application. We believe critical accounting policies as disclosed in this report reflect the more significant judgments and estimates used in the preparation of our consolidated financial statements.
The critical accounting policies, judgments and estimates that we believe to have the most significant impact on our consolidated financial statements are described below, which should be read in conjunction with our consolidated financial statements and accompanying notes and other disclosures included in this report. When reviewing our financial statements, you should consider:
We consider an accounting estimate to be critical if: (i) the accounting estimate requires us to make assumptions about matters that were highly uncertain at the time the accounting estimate was made, and (ii) changes in the estimate that are reasonably likely to occur from period to period or use of different estimates that we reasonably could have used in the current period, would have a material impact on our financial condition or results of operations. We consider our critical accounting estimates include (i) allowance for expected credit losses for accounts receivable and (ii) impairment of long-lived assets.
The following critical accounting policies rely upon assumptions and estimates and were used in the preparation of our consolidated financial statements:
Allowance of Expected Credit Losses
The Company adopted ASU No. 2016-13, “Financial Instruments — Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments” on January 1, 2023 using a modified retrospective approach. ASC 326 introduces an approach based on expected losses to estimate the allowance for doubtful accounts, which replaces the previous incurred loss impairment model. The expected credit loss impairment model requires the entity to recognize its estimate of expected credit losses for affected financial assets using an allowance for credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates.
Our account receivables, advance to suppliers, other receivables and long-term prepayments are within the scope of ASC Topic 326. We use the loss-rate method to evaluate the expected credit losses on an individual basis. When establishing the loss rate, we make the assessment on various factors, including historical experience, credit-worthiness of debtors, current economic conditions, reasonable and supportable forecasts of future economic conditions, and other factors that may affect its ability to collect from the debtors. We also provide specific provisions for allowance when facts and circumstances indicate that the receivable is unlikely to be collected. Expected credit losses are included in the consolidated statements of operations and comprehensive income(loss). After all attempts to collect a receivable have failed, the receivable is written off against the allowance. There were no expected credit loss for the years ended December 31, 2024 and 2023.
Impairment of long-lived Assets
Long-lived assets with finite lives, primarily property and equipment, construction in progress, intangible assets and land use right, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If the estimated cash flows from the use of the asset and its eventual disposition are below the asset’s carrying value, then the asset is deemed to be impaired and written down to its fair value. Impairment charge recognized for the years ended December 31, 2024 and 2023 were $2,837 and $nil, respectively.
The
discussion and analysis of our Group’s financial condition and results of operations are based upon our Group’s consolidated
financial statements, which have been prepared in accordance with U.S. GAAP in a consistent manner. The preparation of these financial
statements requires the selection and application of accounting policies. Further, the application of U.S. GAAP requires our Group to
make estimates and judgments about future events that affect the reported amounts of assets, liabilities, revenues and expenses and related
disclosures. On an ongoing basis, our Group evaluate its estimates, including those discussed below. our Group bases its estimates on
historical experience, current trends and various other assumptions that it believes are reasonable under the circumstances, the results
of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other
sources.
Actual
results may differ from these estimates under different assumptions or conditions. Our Group believes it is possible that other professionals,
applying reasonable judgment to the same set of facts and circumstances, could develop and support a range of alternative estimated amounts.
Our Group believes that it has appropriately applied its critical accounting policies. However, in the event that inappropriate assumptions
or methods were used relating to the critical accounting policies below, our Group’s consolidated statements of operations could
be misstated.
A
detailed summary of significant accounting policies is summarized below:
Use
of estimates
The
preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities, related disclosures of contingent assets and liabilities at the balance sheet
date, and the reported revenue and expenses during the reported period in the consolidated financial statements and accompanying notes.
Significant accounting estimates reflected in our Group’s consolidated financial statements mainly include, but are not limited
to, assessment for impairment of long-lived assets, valuation of deferred tax assets and current expected credit loss of receivables.
Actual results could differ from those estimates.
Construction-in-progress
Property
and equipment that are purchased or constructed which require a period of time before the assets are ready for their intended use are
accounted for as construction-in-progress. Construction-in-progress is recorded at acquisition cost, including installation costs. Construction-in-progress
is transferred to specific property and equipment accounts and commences depreciation when these assets are ready for their intended
use.
Land
use right, net
The
land use rights represent the operating lease prepayments for the rights to use the land in the PRC. Amortization of the prepayments
is provided on a straight-line basis over the terms of the respective land use rights certificates.
(g) Revenue
recognition
The
Group adopted Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customer. To determine revenue recognition
for contracts with customers, The Group performs the following five steps:
Step
1: Identify the contract with the customer
Step
2: Identify the performance obligations in the contract Step
3: Determine the transaction price Step
4: Allocate the transaction price to the performance obligations in the contract Step
5: Recognize revenue when The Group satisfies a performance obligation The
Group generates revenue from food trading business.
The
Group enters into contracts with their customers to provide food, mainly frozen pork. All of The Group’s contracts have single
performance obligation as the promise is to transfer the goods to customers, and there are no other separately identifiable promises
in the contracts. The Group recognizes revenue when it transfers its goods to customers in an amount that reflects the consideration
to which The Group expects to be entitled in such exchange. The Group accounts for the revenue generated from sales of its products to
its customers on a gross basis, because The Group is acting as a principal in these transactions, is subject to inventory risk, has latitude
in establishing prices, and is responsible for fulfilling the promise to provide customers the specified goods. The Group’s revenue
is recognized at a point in time when the control has been transferred, usually when the customer accepts the goods.
What changed in the latest 10-Q
Risk Factors
Smaller reporting companies are not required to provide the information required by this item.
No wording changes found in this section.
Full comparison: every changed paragraph (0)
Management's Discussion & Analysis (MD&A)
Largest changes
Discussion and Analysis ofsee in full comparisonSixNine Months EndedSeptemberDecember30,31, 2025 Compared toSixNine Months EndedSeptemberDecember30,31, 2024
Net cash used in operating activities for thesee in full comparisonsixnine months endedSeptemberDecember30,31, 2024 wasUS$2,685,432,US$426,080, which primarily reflected our net loss ofUS$66,451,US$375,824, as mainly adjusted for amortization ofUS$45,195,US$68,447, and adjustment for changes in working capital, primarily consisting of(i)aan increasedecrease inaccountsotherpayablecurrentto related parties of US$178,180, (ii) an increase in accounts payableassets ofUS$153,769,US$190,612, offset by (i)anaincreasedecrease ininventoriesaccrued expenses and other payables ofUS$1,811,184,US$172,266, and (ii) an increase in advances to suppliers of US$794,470, (iii) an increase in accounts receivable ofUS$282,415, and (iv) a decrease in accrued expenses and other payables of US$198,876.US$52,484.
Net cash used in operating activities for thesee in full comparisonsixnine months endedSeptemberDecember30,31, 2025 wasUS$325,333,US$641,298, which primarily reflected our net income ofUS$698,189,US$1,002,458, as mainly adjusted for amortization ofUS$379,617,US$584,459, and adjustment for changes in working capital, primarily consisting of (i) an increase in accounts payable of US$1,396,004, (ii) a decrease in advances to suppliers ofUS$176,051,US$177,798, and (iiiii) a decrease in other current assets ofUS$159,673, and (iii) an increase in accounts payable of US$140,683,US$88,205, offset by (i) an increase in accounts receivable ofUS$1,224,829,US$3,405,886, (ii) an increase in other receivable ofUS$356,213US$302,078, and (iii)aandecreaseincrease inaccrueddeferredexpenses andofferingother payablescost ofUS$208,061.US$201,988.
As ofsee in full comparisonSeptemberDecember30,31, 2025, we hadUS$254,453US$777,737 in cash, compared to US$710,901 as of March 31, 2025. Thedecreaseincrease in cash was mainly due to (i)reimbursementloansoffromaccountsbankspayablein 2025 andother payables,(ii)investmentloans frominrelatedconstruction of Phrase II of Hongchang Food Industrial Park, and (iii) repayments of long-term payables.parties.
The PRC subsidiaries generated revenue ofsee in full comparisonUS$7,314,841US$11,332,476 for thesixnine months endedSeptemberDecember30,31, 2025, as compared toUS$2,802,506US$2,848,898 for the same period of 2024. The increase of161%298% for thesixnine months endedSeptemberDecember30,31, 2025 was mainly because of: (i) meat product sales revenue ofUS$6,502,330US$10,104,462 from a new subsidiary, Pucheng Green Health Food and (ii) rental revenue from the lease contracts of Phrase I of Hongchang Food Industrial Park.
see in full comparisonCost of revenue was US$6,093,989 for the six months ended September 30, 2025, which is a 130% increase as compared to US$2,653,655 for the same period of 2024, due tosales increase of Pucheng Green Health Food and rental cost of buildings in Hongchang Food Industrial Park. The following table sets forth the breakdown of our cost of revenue by category, both in absolute amount and as a percentage of the cost of revenue, for the periods indicated:
Full comparison: every changed paragraph (29)
Discussion and Analysis of Three Months
Ended SeptemberDecember 30,31, 2025 Compared to Three Months Ended SeptemberDecember 30,31, 2024
The following chart provides a summary of our
results of operations for the three months ended SeptemberDecember 30,31, 2025 and 2024:
Our PRC subsidiaries generated revenue of US$3,470,693US$4,017,635
for the three months ended SeptemberDecember 30,31, 2025, as compared to US$820,608US$46,392 for the same period of 2024. The increase of 323%8,560% for the three
months ended SeptemberDecember 30,31, 2025 was mainly because: (i) meat product sales revenue of US$3,062,321US$3,602,132 from a new subsidiary, Pucheng Green
Health Food and (ii) rental revenue from the lease contracts of Phrase I of Hongchang Food Industrial Park. .
Cost of revenue was US$2,863,553US$3,298,793 for the three
months ended SeptemberDecember 30,31, 2025, which is a 271%20,972% increase as compared to US$770,472US$15,655 for the same period of 2024, due to the sales increase
of Pucheng Green Health Food and rental cost of buildings in Hongchang Food Industrial Park. The following table sets forth the breakdown
of our cost of revenue by category, both in absolute amount and as a percentage of the cost of revenue, for the periods indicated:
Gross margin is a measure used by management to
indicate whether we are selling products at an appropriate gross profit. Our gross margin is influenced by product prices, product combinations,
availability, and discounts, as some products typically offer higher gross profit margins, as well as the impact of our product costs,
which may vary. We had gross profit of US$607,140US$718,842 and gross profit of US$50,136US$30,737 for the three months ended SeptemberDecember 30,31, 2025 and 2024,
which represented gross margin of 17%18% and 6%,66%, respectively. The following table sets forth our gross profit/loss by category for the
periods periods
indicated:
We incurred selling expenses of US$2,605US$1,257 and US$1,382US$nil
for the three months ended SeptemberDecember 30,31, 2025 and 2024, respectively, mainly due to the increase in sales activities from a new subsidiary,
Pucheng Green Health Food .Food.
We incurred general and administrative expenses
of US$352,345US$376,875 for the three months ended SeptemberDecember 30,31, 2025, as compared to US$101,442US$234,561 in the same period of 2024. The increase in management
expenses was mainly due to the agency fees (approximately US$253,010US$270,289) occurred in the thirdfourth quarter in 2025.
We incurred income tax expenses of US$42,815US$23,214 for
the three months ended SeptemberDecember 30,31, 2025, and incurred income tax benefits of US$5,421US$10,723 in the same period of 2024.
As a result of the foregoing, we reported net
income of US$198,247US$304,269 for the three months ended SeptemberDecember 30,31, 2025 and a net loss of US$44,771US$309,402 for the same period of 2024.
Discussion and Analysis of SixNine Months Ended
SeptemberDecember 30,31, 2025 Compared to SixNine Months Ended SeptemberDecember 30,31, 2024
The following chart provides a summary of our
results of operations for the sixnine months ended SeptemberDecember 30,31, 2025 and 2024:
The PRC subsidiaries generated revenue of US$7,314,841US$11,332,476
for the sixnine months ended SeptemberDecember 30,31, 2025, as compared to US$2,802,506US$2,848,898 for the same period of 2024. The increase of 161%298% for the sixnine
months ended SeptemberDecember 30,31, 2025 was mainly because of: (i) meat product sales revenue of US$6,502,330US$10,104,462 from a new subsidiary, Pucheng Green
Health Food and (ii) rental revenue from the lease contracts of Phrase I of Hongchang Food Industrial Park.
Cost of revenue was US$6,093,989 for the six months
ended September 30, 2025, which is a 130% increase as compared to US$2,653,655 for the same period of 2024, due to sales increase of Pucheng
Green Health Food and
rental cost of buildings in Hongchang Food Industrial Park. The following table sets forth the breakdown of our
cost of revenue by category,
both in absolute amount and as a percentage of the cost of revenue, for the periods indicated:
Gross margin is a measure used by management to
indicate whether we are selling products at an appropriate gross profit. Our gross margin is influenced by product prices, product combinations,
availability, and discounts, as some products typically offer higher gross profit margins, as well as the impact of our product costs,
which may vary. At present, we offer competitive prices to attract and retain customers. In the future, as we grow, we plan to launch
diversified products and competitive services to increase market share. We regularly evaluate the profitability of our products. As our
business activities started in 2023 and we are still in the early stages, we had gross profit of US$1,220,852US$1,939,694 and gross profit of US$148,851US$181,905
for the sixnine months ended SeptemberDecember 30,31, 2025 and 2024, which represented gross margin of 17% and 5%,6%, respectively. The following table
sets forth our gross profit/loss by category for the periods indicated:
We incurred selling expenses of US$2,605US$3,862 and US$1,537US$1,508
for the sixnine months ended SeptemberDecember 30,31, 2025 and 2024, respectively, mainly due to the increase in sales activities from a new subsidiary,
Pucheng Green Health Food.
We incurred general and administrative expenses
of US$428,622US$805,497 for the sixnine months ended SeptemberDecember 30,31, 2025, as compared to US$224,016US$458,577 in the same period of 2024. The increase in management
expenses was mainly due to the agency fees (approximately US$253,010US$527,950) occurred in the third quarter in 2025.
We incurred income tax expenses of US$72,627US$95,841 for
the sixnine months ended SeptemberDecember 30,31, 2025, and incurred income tax benefits of US$6,154US$16,877 in the same period of 2024.
As a result of the foregoing, we reported net
income of US$698,189US$1,002,458 for the sixnine months ended SeptemberDecember 30,31, 2025, 2025 and a net loss of US$66,451US$375,824 for the same period of 2024.
The following chart provides a summary of our
key balance sheet items as of SeptemberDecember 30,31, 2025 and March 31, 2025, and should be read in conjunction with the financial statements, and
and notes thereto, included with this report.
As of SeptemberDecember 30,31, 2025, we had US$254,453US$777,737 in
cash, compared to US$710,901 as of March 31, 2025. The decreaseincrease in cash was mainly due to (i) reimbursementloans offrom accountsbanks payablein 2025 and other
payables, (ii) investmentloans
from inrelated construction of Phrase II of Hongchang Food Industrial Park, and (iii) repayments of long-term payables.parties.
As of SeptemberDecember 30,31, 2025, our construction in progress
progress balance amounted to approximately US$17,892,153,US$18,166,029, as compared to US$16,832,470 as of March 31, 2025. This reflected our continuous investment
investment and progress of the construction schedule in Hongchang Food Industrial Park.
Capital Expenditure Commitment as of SeptemberDecember
30,31, 2025
As of SeptemberDecember 30,31, 2025, the Company had entered
into several contracts for construction of Hongchang Food Industrial Park and the improvement of the processing factory buildings. Total
outstanding commitments under these contracts were US$3,908,374US$4,004,417 and US$3,859,662 as of SeptemberDecember 30,31, 2025 and March 31, 2025, respectively.
The Company expected to pay off all the balances within one to three years.
We did not have any off-balance sheet arrangements
as of SeptemberDecember 30,31, 2025 and March 31, 2025.
Net cash used in operating activities for the
sixnine months ended SeptemberDecember 30,31, 2025 was US$325,333,US$641,298, which primarily reflected our net income of US$698,189,US$1,002,458, as mainly adjusted for amortization
of US$379,617,US$584,459, and adjustment for changes in working capital, primarily consisting of (i) an increase in accounts payable of US$1,396,004,
(ii) a decrease in advances to suppliers of US$176,051,
US$177,798, and (iiiii) a decrease in other current assets of US$159,673, and (iii) an increase in accounts payable of US$140,683,US$88,205, offset by (i) an increase
in accounts receivable of US$1,224,829,US$3,405,886, (ii) an increase in other receivable of US$356,213US$302,078, and (iii) aan decreaseincrease in accrueddeferred expenses andoffering
other payablescost of US$208,061.US$201,988.
Net cash used in operating activities for the
sixnine months ended SeptemberDecember 30,31, 2024 was US$2,685,432,US$426,080, which primarily reflected our net loss of US$66,451,US$375,824, as mainly adjusted for amortization
of US$45,195,US$68,447, and adjustment for changes in working capital, primarily consisting of (i)a an increasedecrease in accountsother payablecurrent to related parties
of US$178,180, (ii) an increase in accounts payableassets of US$153,769, US$190,612,
offset by (i) ana increasedecrease in inventoriesaccrued expenses and other payables of US$1,811,184,US$172,266, and (ii) an increase
in advances to suppliers of US$794,470, (iii) an increase in accounts receivable of US$282,415, and (iv) a decrease in accrued expenses
and other payables of US$198,876.US$52,484.
Net cash used in investing activities for the
sixnine months ended SeptemberDecember 30,31, 2025 was US$551,687,US$856,928, mainly attributable to purchases of property and equipment. Net cash used in investing
activities for the sixnine months ended SeptemberDecember 30,31, 2024 was US$4,720,774,US$5,379,882, mainly attributable to purchases of property and equipment.
Net cash provided by financing activities for
the sixnine months ended SeptemberDecember 30,31, 2025 was US$414,862,US$1,541,027, primarily due to loans from related parties.parties and banks.
Net cash provided by financing activities for
the sixnine months ended SeptemberDecember 30,31, 2024 was US$6,843,575,US$5,151,875, primarily due to loans from related parties.parties and banks.
HCIL insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 1 filing (1 insider, 3 trade dates, 16,448 shares, about $1.8K). Net open-market shares: -16,448 (purchases minus sales); net value about -$1.8K.Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-06-25 | Lin Zhenzhu |
Open-market sale | 9,998 | $0.11 | $1.1K |
| 2026-06-24 | Lin Zhenzhu |
Open-market sale | 5,000 | $0.11 | $550 |
| 2026-06-23 | Lin Zhenzhu |
Open-market sale | 1,450 | $0.12 | $174 |
Well-known investors holding HCIL (13F)
None of the 59 investors we track reported a position in their latest 13F.