10-Q: Hi-Great Group Holding Company Q2 2026 Financials Show Persistent Losses

Hi-Great Group Holding Company reported continued net losses for the second quarter of 2026, with sales showing a slight decrease compared to the prior year period, though cost reductions were noted.

Summary

• For the three months ended June 30, 2026, Hi-Great Group Holding Company reported sales of $6,955, a decrease from $10,135 in the same period of 2025.
• Cost of sales for the three months ended June 30, 2026, was $3,839, down from $4,604 in the prior year.
• Operating expenses decreased to $14,829 from $22,575 in the prior year's quarter, primarily due to lower professional fees and general administrative expenses.
• The company reported a net loss of $12,337 for the three months ended June 30, 2026, compared to a net loss of $17,044 for the same period in 2025.
• For the six months ended June 30, 2026, sales increased to $20,210 from $19,018 in the comparable period of 2025.
• Cost of sales for the six months ended June 30, 2026, was $11,113, a decrease from $12,105 in the prior year.
• The net loss for the six months ended June 30, 2026, was $20,167, compared to a net loss of $35,982 for the same period in 2025.
• As of June 30, 2026, the company had cash of $923 and an accumulated deficit of $1,000,169.

Sentiment

Score: 2

Explanation: StockSavvy.ai views this as a negative sentiment due to continued net losses, a significant accumulated deficit, and a lack of substantial revenue growth, despite some cost reductions.

Positives

• Sales for the six months ended June 30, 2026, increased to $20,210 from $19,018 in the comparable period of 2025.
• Cost of sales for both the three-month and six-month periods ended June 30, 2026, decreased compared to the prior year.
• Operating expenses saw a significant reduction in the three months ended June 30, 2026 ($14,829 vs $22,575 in 2025), attributed to lower professional fees and G&A expenses.
• Net loss for the six months ended June 30, 2026, improved to $20,167 from $35,982 in the prior year's period.

Negatives

• Sales for the three months ended June 30, 2026, decreased to $6,955 from $10,135 in the same period of 2025.
• The company continues to operate at a net loss, reporting $12,337 for the three months and $20,167 for the six months ended June 30, 2026.
• An accumulated deficit of $1,000,169 exists as of June 30, 2026.
• Cash on hand as of June 30, 2026, was only $923.
• The company is a development stage enterprise and has not realized significant sales through since inception.
• Disclosure controls and procedures were found to be not effective due to a lack of an audit committee and lack of segregation of duties.

Risks

• The company is a development stage enterprise and has not yet established an ongoing source of revenues sufficient to cover its operating costs.
• The company is dependent on debt and equity financing to fund its operations and there is no assurance that it will be able to raise additional equity capital.
• The outbreak of COVID-19 and public and private sector measures to reduce its transmission could impact efforts to enter into a business combination.
• The company has not experienced a material impact from COVID-19 to date, but the duration and severity of economic and operational impacts are unknown.
• The company has a significant accumulated deficit and continues to incur net losses, raising concerns about its ability to continue as a going concern without additional funding.

Future Outlook

The company is focused on its exclusive global licensing agreement for the KRAS gene, marketing its SellaCare organic longevity health supplement, and expanding into the cosmetic sector. Management is also making efforts to raise additional funding.

Management Comments

• The Company is a development stage enterprise that was originally incorporated, on September 30, 2010, under the laws of the State of Nevada.
• Hi-Great Group Company has withdrawn CBD Oils from our business plan.
• Our principal business objective is to maximize shareholders returns through a combination of (1) dividends to our shareholders, (2) sustainable long-term growth in cash flows from distribution of the products described herein, (3) potential long-term appreciation in the value of our properties from capital gains upon future sales, (4) other sustainable agricultural business opportunity which the Board of Directors determines to be beneficial to Company, or (5) distribution of plant-based finished consumer product and integrate the use of specialty herbs into its worldwide health supplement business to include expansion into the cosmetics sector using multiple herbal oils and compounds.
• The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and is dependent on debt and equity financing to fund its operations.

Industry Context

StockSavvy.ai notes that the company's strategic pivot towards the KRAS gene and the cosmetic sector reflects broader industry trends of focusing on specialized biotechnology and expanding into high-growth consumer markets. However, its development stage and ongoing losses place it in a high-risk category compared to established players in these fields.

Comparison to Industry Standards

• The company's revenue of $20,210 for the six months ended June 30, 2026, is significantly lower than industry benchmarks for companies in the biotechnology or consumer goods sectors, which often report millions or billions in revenue.
• The net loss of $20,167 for the six months ended June 30, 2026, and an accumulated deficit of over $1 million, are not comparable to profitable companies in the industry.
• The company's cash balance of $923 is critically low and far below the working capital requirements of most operating businesses, let alone those in R&D-intensive sectors like biotech.

Corporate Governance

Legal Proceedings

• None reported.

Related Party Transactions

• The company has a licensing agreement with SellaCare, Inc. (controlled by the majority shareholder) requiring a 25% royalty on gross revenues or $1,000, whichever is greater.
• A land lease agreement exists with Sella Property, LLC (controlled by the majority shareholder) for annual rent payments of $30,000.
• Accrued royalty payable to SellaCare, Inc. was $173,764 as of June 30, 2026.
• Loan payable to related party was $6,740 (current) and $83,250 (non-current) as of June 30, 2026.

Stakeholder Impact

• Shareholders: Continued net losses and accumulated deficit may impact stock value and future prospects. Dependence on future financing creates uncertainty.
• Creditors: The company's low cash balance and ongoing losses could impact its ability to meet its obligations.
• Suppliers: Potential for payment delays given the company's liquidity constraints.
• Employees: Uncertainty regarding the company's long-term viability could affect employee morale and job security.

Next Steps

• Continue to market, sell, and distribute SellaCare, Inc.'s organic longevity health supplement.
• Expand into the cosmetic sector.
• Pursue licensing opportunities related to the KRAS gene.
• Seek additional debt and equity financing.
• Work towards establishing an ongoing source of revenues sufficient to cover operating costs.

Key Dates

Recommendation

The company continues to operate at a significant net loss with a substantial accumulated deficit and minimal cash reserves. Despite some cost reductions and a slight increase in six-month sales, the overall financial picture remains precarious, and the company is heavily reliant on future financing, which is not guaranteed. The lack of effective internal controls further adds to the risk profile.

Keywords

KRAS gene, herbal supplements, cosmetics, licensing agreement, development stage enterprise, related party transactions, going concern, net loss