Hi-Great Group Reports Decline in Revenue and Increased Net Loss in Q1 2025

Hi-Great Group Holding Company reported its financial results for the first quarter of 2025, revealing a decline in both revenue and profitability compared to the same period in 2024. The company generated sales of $8.9 million, a decrease of 1.8% from $9.1 million in the prior year. Gross profit also fell significantly to $1.4 million, down from $4.2 million, primarily due to increased costs associated with royalty payments to related parties, which rose from $2.6 million to $5.3 million. The company recorded a net loss of $18.9 million for the quarter, compared to a loss of $8.8 million in the same quarter last year.

The financial statements indicate a notable increase in operating expenses, which surged to $20.8 million from $15 million year-over-year. This increase was driven by higher professional fees, which rose to $10 million from $6.5 million, and general and administrative expenses, which increased to $3.9 million from $1.6 million. The company's total liabilities also grew, reaching $253.2 million as of March 31, 2025, compared to $250.2 million at the end of 2024, reflecting ongoing financial pressures.

Operationally, Hi-Great Group continues to navigate challenges as a development stage enterprise. The company has not yet established a consistent revenue stream sufficient to cover its operating costs and remains reliant on debt and equity financing. As of March 31, 2025, the company reported total current assets of $71.1 million, a decrease from $80 million at the end of 2024, while total stockholders' equity fell to a deficit of $182.2 million from $163.2 million. The company’s cash reserves dwindled to $207, down from $2.1 million, indicating liquidity concerns.

In terms of strategic developments, Hi-Great Group has maintained its licensing agreement with SellaCare, Inc., which involves a royalty payment structure based on gross revenues. The company continues to focus on its agritourism and herbal supplement business, although it has not reported significant sales since its inception. The management is actively seeking additional funding to support its operations and product development efforts, but there is no assurance of success in these endeavors.

Looking ahead, Hi-Great Group's management expressed optimism about raising additional capital and advancing its product initiatives. However, the company acknowledges the uncertainty surrounding its ability to continue as a going concern without establishing a reliable revenue source. The financial statements reflect this uncertainty, as they do not include adjustments for potential future impacts on asset recoverability or liability classifications stemming from the company's ongoing financial challenges.