Hitek Global Inc. Announces Fiscal Year 2024 Financial Results
XIAMEN, China, April 29, 2025 /PRNewswire/ -- Hitek Global Inc. (Nasdaq: HKIT) (the "Company"), a China-based information technology consulting and solutions service provider, today announced its financial results for the fiscal year ended December 31, 2024.
Ms. Xiaoyang Huang, Chief Executive Officer and Director of Hitek Global Inc. commented, "Fiscal year 2024 was a year of strategic transition for our company. While we are affected by changes in hardware and tax device sales, we are encouraged by the growth in our CIS software segment following its successful update. As we look ahead, we remain focused on expanding our software and services, driving innovation, and creating long-term value for our customers and shareholders."
Fiscal Year 2024 Financial Results
Revenue
Total revenue was approximately $2.9 million in fiscal year 2024, as compared to approximately $4.6 million in fiscal year 2023, primarily due to the decrease in hardware sales to large customers and decrease in tax devices and services sales, partially offset by an increase in CIS software sales.
- Revenue generated from hardware sales was approximately $1.7 million in fiscal year 2024, as compared to approximately $2.4 million in fiscal year 2023. The decrease was due mainly to the decrease in sales to large customers, for these large customers reduced their procurement and the decrease in our customers' demands affected by the sluggish economic environment.
- Revenue generated from Tax devices and service was approximately $0.4 million in fiscal year 2024, as compared to approximately $1.4 million in fiscal year 2023. The decrease was due mainly to Xiamen tax authorities implemented the use of electronic invoices system to replace the traditional tax control system.
- Revenue generated from CIS software was approximately $0.8 million in fiscal year 2024, as compared to approximately $0.76 million in fiscal year 2023. The increase was due mainly to launch of updated CIS software since March 2024. And we expect it will keep increase in the future.
Gross Profit and Gross Margin
Gross profit was approximately $1.0 million in fiscal year 2024, a decrease from approximately $1.9 million in fiscal year 2023. Gross margin was 34.6% in fiscal year 2024, compared to 42.1% in fiscal year 2023. The decrease in profit margin was mainly due to the change in revenue mix, with fewer revenues being generated in 2024 from tax devices and services sales.
Operating Expenses
Operating expenses were approximately $2.8 million in fiscal year 2024, an increase from approximately $1.8 million in fiscal year 2023.
- Selling expenses were $1,716 in fiscal year 2024, an increase by 164.8% from $648 in fiscal year 2023. The increase in selling expense was mainly attributable to the increase in one-off program marketing and promotion expense.
- General and administrative expenses increased by 51.3% or $931,782 to $2,751,313 for the year ended December 31, 2024 from $1,819,531 in 2023. The increase was mainly due to (1) the increase of professional service fee of $373,531 resulting from financing from private placement and public offering in 2024, (2) the increase of $362,972 in credit losses primarily resulted from a termination of software development project in 2024; and (3) the increase of $138,972 in donation to a third party.
Other Income
Other income was $890,201 and $1,493,465 for years ended December 31, 2024 and 2023, respectively. The decrease was primarily due to the decrease of $569,298 in government subsidy income and the recognition of a one-time deregistration cost of $104,127 related to the deregistration of Huoerguosi Hengda Information Technology Co., Ltd, which was a wholly owned subsidiary of HiTek in PRC, to reduce its related operating cost.
Net Income
Net loss was $896,690 for the year ended December 31, 2024, a decrease of $1,944,331 from net income of $1,047,641 for 2023.
Balance Sheet
As of December 31, 2024, the Company had cash of $7.2 million, compared to $9.3 million as of December 31, 2023.
Cash Flow
Net cash used in operating activities was $688,538 for the year ended December 31, 2024. This was an increase of $626,626 compared to net cash used in operating activities of $61,912 in 2023.
Net cash used in investing activities was $9,560,796 for the year ended December 31, 2024. This was an increase of $2,614,241 compared to net cash used in investing activities of $6,946,555 in 2023.
Net cash provided by financing activities was $8,200,000 for the year ended December 31, 2024. This was a decrease of $6,942,902 compared to net cash used in financing activities of $15,142,902 in 2023.
About Hitek Global Inc.
Hitek Global Inc., headquartered in Xiamen, China, is an IT consulting and solutions service provider focusing on delivering services to business in various industry sectors in China. As of the date of this annual report, we have two lines of businesses— 1) services to small and medium businesses ("SMEs"), which consists of Anti-Counterfeiting Tax Control System ("ACTCS") tax devices, ACTCS services, and 2) services to large businesses, which consists of hardware sales and software sales. We expect to actively develop our system integration services and online service platform in the near future. Our vision is to become a one-stop consulting destination for holistic IT and other business consulting services in China. For more information, visit the Company's website at http://ir.xmhitek.com/.
Forward-Looking Statements
This announcement contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact in this announcement are forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties and are based on current expectations and projections about future events and financial trends that the Company believes may affect its financial condition, results of operations, business strategy and financial needs. Investors can identify these forward-looking statements by words or phrases such as "may," "will," "expect," "anticipate," "aim," "estimate," "intend," "plan," "believe," "potential," "continue," "is/are likely to" or other similar expressions. The Company undertakes no obligation to update forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and the Company cautions investors that actual results may differ materially from the anticipated results and encourages investors to review other factors that may affect its future results in the Company's registration statement and in its other filings with the SEC.
For Investor and Media Inquiries Please Contact:
Tianyu Xia
Phone: +86 18519770823
Email: [email protected]
The following tables summarize our results of operations for the periods indicated:
HITEK GLOBAL INC. AND SUBSIDIARIES | ||||||||
Years Ended | ||||||||
2024 | 2023 | |||||||
Assets | ||||||||
Current assets | ||||||||
Cash | $ | 7,236,798 | $ | 9,311,537 | ||||
Short-term investments | 22,932,540 | 8,837,445 | ||||||
Accounts receivable, net | 1,385,761 | 2,118,738 | ||||||
Advances to suppliers, net | 11,315 | 338,166 | ||||||
Inventories, net | 154,471 | 219,505 | ||||||
Loans receivable | 958,996 | 3,608,289 | ||||||
Prepaid expenses and other current assets | 1,506,297 | 352,919 | ||||||
Total current assets | 34,186,178 | 24,786,599 | ||||||
Non-current assets | ||||||||
Non-current accounts receivable | 2,227,089 | 4,597,214 | ||||||
Non-current advance to a third party | - | 410,509 | ||||||
Non-current loan receivable | 4,383,982 | 4,227,079 | ||||||
Property, equipment and software, net | 744,941 | 403,330 | ||||||
Operating lease right-of-use assets | - | 3,309 | ||||||
Long-term investments | - | 1,000,000 | ||||||
Total non-current assets | 7,356,012 | 10,641,441 | ||||||
Total Assets | $ | 41,542,190 | $ | 35,428,040 | ||||
Liabilities and Shareholders' Equity | ||||||||
Current liabilities | ||||||||
Accounts payable | $ | 255,950 | $ | 532,130 | ||||
Advances from customers | 11,034 | 4,616 | ||||||
Loan payable | 479,498 | 493,159 | ||||||
Deferred revenue | 55,720 | 166,760 | ||||||
Taxes payable | 1,680,476 | 1,917,647 | ||||||
Accrued expenses and other current liabilities | 130,691 | 255,131 | ||||||
Operating lease liabilities | - | 3,309 | ||||||
Total current liabilities | 2,613,369 | 3,372,752 | ||||||
Non-current Liabilities | ||||||||
Loan payable, non-current | 2,054,992 | 2,113,539 | ||||||
Deferred income tax liabilities, non-current | 1,598,909 | 1,604,163 | ||||||
Total non-current liabilities | 3,653,901 | 3,717,702 | ||||||
Total Liabilities | 6,267,270 | 7,090,454 | ||||||
Commitments and Contingencies | - | - | ||||||
Shareholders' Equity | ||||||||
Ordinary Shares, par value $0.0001 per share, 490,000,000 shares | - | 1,439 | ||||||
Class A Ordinary Shares, US$0.0001 par value; 431,808,000 shares | 2,111 | - | ||||||
Class B Ordinary Shares, US$0.0001 par value; 58,192,000 shares | 819 | - | ||||||
Additional paid-in capital | 24,920,060 | 16,721,551 | ||||||
Statutory reserve | 836,215 | 836,215 | ||||||
Retained earnings | 10,491,058 | 11,387,748 | ||||||
Accumulated other comprehensive loss | (975,343) | (609,367) | ||||||
Total Shareholders' Equity | 35,274,920 | 28,337,586 | ||||||
Total Liabilities and Shareholders' Equity | $ | 41,542,190 | $ | 35,428,040 | ||||
HITEK GLOBAL INC. AND SUBSIDIARIES | ||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME | ||||||||||||
Years Ended December 31, | ||||||||||||
2024 | 2023 | 2022 | ||||||||||
Revenues | $ | 2,904,950 | $ | 4,563,731 | $ | 6,428,608 | ||||||
Cost of revenues | (1,899,065) | (2,642,491) | (2,891,565) | |||||||||
Gross profit | 1,005,885 | 1,921,240 | 3,537,043 | |||||||||
Operating expenses: | ||||||||||||
General and administrative | 2,751,313 | 1,819,531 | 1,472,648 | |||||||||
Selling | 1,716 | 648 | 437,185 | |||||||||
Total operating expenses | 2,753,029 | 1,820,179 | 1,909,833 | |||||||||
Operating (loss) income | (1,747,144) | 101,061 | 1,627,210 | |||||||||
Other income (expense) | ||||||||||||
Government subsidies | - | 569,928 | 9,838 | |||||||||
Net investment gain (loss) | 336,241 | 330,552 | (19,363) | |||||||||
Interest income | 921,228 | 911,875 | 545,555 | |||||||||
Interest expense | (313,937) | (313,861) | (285,353) | |||||||||
Deregistration cost | (104,127) | - | - | |||||||||
Other income (expense), net | 50,796 | (5,029) | (8,924) | |||||||||
Total other income, net | 890,201 | 1,493,465 | 241,753 | |||||||||
(Loss) income before provision for income taxes | (856,943) | 1,594,526 | 1,868,963 | |||||||||
Income tax expense | 39,747 | 546,885 | 453,218 | |||||||||
Net (loss) income | $ | (896,690) | $ | 1,047,641 | $ | 1,415,745 | ||||||
Comprehensive (loss) income | ||||||||||||
Net (loss) income | $ | (896,690) | $ | 1,047,641 | $ | 1,415,745 | ||||||
Foreign currency translation loss | (365,976) | (330,116) | (1,015,447) | |||||||||
Comprehensive (loss) income | $ | (1,262,666) | $ | 717,525 | $ | 400,298 | ||||||
(Loss) earnings per ordinary share | ||||||||||||
– Basic and diluted | $ | (0.04) | $ | 0.08 | $ | 0.13 | ||||||
Weighted average number of ordinary shares outstanding | ||||||||||||
– Basic and diluted | 20,603,614 | 13,257,469 | 10,987,679 | |||||||||
HITEK GLOBAL INC. AND SUBSIDIARIES | ||||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||
Years Ended December 31, | ||||||||||||
2024 | 2023 | 2022 | ||||||||||
Cash flows from operating activities | ||||||||||||
Net (loss) income | $ | (896,690) | $ | 1,047,641 | $ | 1,415,745 | ||||||
Adjustments to reconcile net (loss) income to net cash | ||||||||||||
Depreciation | 259,554 | 50,662 | 21,881 | |||||||||
Amortization of right-of-use assets | - | 3,167 | - | |||||||||
Loss on disposal of property, plant and equipment | - | 1,413 | - | |||||||||
Accrued interest income from loans, net | (225,665) | (102,418) | (21,699) | |||||||||
Net investment (gain) loss | (58,130) | (208,626) | 19,363 | |||||||||
Provision for (reversal of) expected credit losses of | 366,736 | (2,325) | (6,442) | |||||||||
Provision for obsolete inventories | - | 5,559 | 2,217 | |||||||||
Deferred income tax | 39,747 | 339,332 | 177,029 | |||||||||
Changes in operating assets and liabilities: | ||||||||||||
Short-term investments – trading securities | (2,612,671) | (1,696,545) | 2,418,675 | |||||||||
Accounts receivable | 2,990,258 | 567,480 | (2,490,725) | |||||||||
Accounts receivable – related party | - | 390,197 | 499,933 | |||||||||
Advances to suppliers | (8,175) | 472,219 | 560,352 | |||||||||
Deferred offering cost | - | (130,134) | 60,000 | |||||||||
Inventories | 59,802 | 194,872 | (57,899) | |||||||||
Prepaid expenses and other current assets | 65,672 | (13,028) | 89,583 | |||||||||
Accounts payable | (265,203) | (146,642) | 225,198 | |||||||||
Advances from customers | 6,640 | 4,632 | - | |||||||||
Deferred revenue | (9,389) | (787,062) | 261,856 | |||||||||
Taxes payable | (281,961) | 291,578 | 488,419 | |||||||||
Operating lease liabilities | - | (3,167) | - | |||||||||
Due to related parties | - | (584) | (3,320) | |||||||||
Accrued expenses and other current liabilities | (119,063) | (340,133) | 163,884 | |||||||||
Net cash (used in) provided by operating activities | (688,538) | (61,912) | 3,824,050 | |||||||||
Cash flows from investing activities | ||||||||||||
Advance payment for software development | (290,488) | (339,309) | (117,617) | |||||||||
Loans to third parties | (2,899,088) | (11,260,542) | (5,498,997) | |||||||||
Repayment from third-party loans | 5,338,780 | 8,830,933 | 199,463 | |||||||||
Prepayment for office renovation | - | (150,156) | - | |||||||||
Purchases of property and equipment | - | (186,499) | - | |||||||||
Purchases of held-to-maturity investments | (18,200,000) | (11,000,000) | (1,932,080) | |||||||||
Redemption of held-to-maturity investments | 7,500,000 | 7,159,018 | - | |||||||||
Deposit for acquisition | (1,010,000) | - | - | |||||||||
Net cash used in investing activities | (9,560,796) | (6,946,555) | (7,349,231) | |||||||||
Cash flows from financing activities: | ||||||||||||
Borrowing from third parties | - | - | 2,749,498 | |||||||||
Proceeds from issuance of ordinary shares | 8,200,000 | 15,142,902 | - | |||||||||
Net cash provided by financing activities | 8,200,000 | 15,142,902 | 2,749,498 | |||||||||
Effect of exchange rate changes on cash | (25,405) | (26,058) | (112,465) | |||||||||
Net (decrease) increase in cash | (2,074,739) | 8,108,377 | (888,148) | |||||||||
Cash at beginning of the year | 9,311,537 | 1,203,160 | 2,091,308 | |||||||||
Cash at end of the year | $ | 7,236,798 | $ | 9,311,537 | $ | 1,203,160 | ||||||
Supplemental disclosures of cash flow information: | ||||||||||||
Cash paid for income taxes | $ | 79,138 | $ | 36,504 | $ | 45,002 | ||||||
Cash paid for interest | 51,420 | 287,706 | 263,655 | |||||||||
Non-cash transactions: | ||||||||||||
Deferred offering cost | $ | - | $ | 1,049,367 | $ | - | ||||||
Operating right-of-use assets recognized for related | $ | - | $ | - | $ | 6,820 | ||||||
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SOURCE HITEK GLOBAL INC