CN Healthy Food Tech Reports 20.8% Revenue Growth but Faces Net Loss in Q1 2026

CN Healthy Food Tech Group Corp. reported its financial results for the first quarter of 2026, revealing a net revenue of $5.83 million, a 20.8% increase from $4.82 million in the same period last year. The company attributed this growth to the expansion of its wholesale distribution network and increased contributions from its live-stream sales segment. However, despite the revenue growth, CN Healthy Food Tech experienced a net loss of $309,000, compared to a profit of $774,000 in the prior year, primarily due to increased operating expenses and a significant rise in tax provisions.

The company's cost of revenue decreased by 40.6% to $1.46 million, leading to a gross profit of $4.36 million, which represents an 85.2% increase year-over-year. This improvement in gross profit margin, which rose to 74.9% from 48.9%, was driven by the commencement of operations at its production base in Heilongjiang Province, allowing for lower per-unit production costs. The shift towards higher-margin live-stream sales also contributed to this margin expansion.

Operating expenses surged to $3.63 million, up 134.1% from $1.55 million in the previous year, largely due to $2.07 million in amortization expenses related to shares issued for management advisory services. Excluding this non-recurring expense, operating expenses would have been consistent with the prior year. The company also reported a significant increase in its provision for income tax, which rose to $850,537 from $125,112, resulting in an effective tax rate of 157.1% for the quarter.

As of March 31, 2026, CN Healthy Food Tech held cash and cash equivalents of $29.69 million, down from $33.01 million at the end of 2025. The company is currently facing challenges with three promissory notes totaling approximately $3.47 million that are in default. Management is in discussions with note holders to extend maturity dates and address these defaults. The company remains optimistic about its operational stability and cash position, which it believes will support its activities over the next twelve months.

Looking ahead, CN Healthy Food Tech is navigating a trading halt on the Nasdaq, which has been in effect since October 2025 due to regulatory reviews by the China Securities Regulatory Commission (CSRC). The company is also dealing with administrative penalties proposed by the CSRC, which could impact its reputation and operational capabilities. Despite these challenges, management is focused on maintaining growth in its core business segments and addressing its financial obligations.