XIAMEN,
China, April 9, 2024 /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, 2023.
Ms. Xiaoyang
Huang, Chief Executive Officer and Director of Hitek Global
Inc. commented, "During the year ended December 31, 2023, due to governmental policy
adjustments, the service fee portion of our tax control business
has been affected to some extent, resulting in a decline in overall
revenue. The Company is exploring new business opportunities to
diversify the company's revenue and business."
Fiscal Year 2023 Financial Results
Revenue
Total revenue was
$4.6 million in fiscal year 2023, as
compared to $6.4 million in fiscal
year 2022, mainly due to the decrease in revenue generated from tax
devices and services sales due to governmental policy
adjustments.
- Revenue generated from hardware sales
was $2.4 million in fiscal year 2023,
as compared to $2.5 million in fiscal
year 2022. The decrease was mainly due to the decrease in sales to
large customers.
- Revenue generated from software sales
was $0.8 million in fiscal year 2023,
as compared to $2.1 million in fiscal
year 2022. The decrease was mainly due to the decrease in software
sales to large customers that reduced their
procurement.
- Revenue generated from tax devices and
services was $1.4 million in fiscal
year 2023, as compared to $1.8
million in fiscal year 2022. The decrease was due to the
decline in demand for our tax devices and services due to a new
governmental policy effective in January
2021 that allows taxpayers in Xiamen to obtain tax
Ukeys (USB security keys) from the PRC tax authorities for free to
issue electronic invoices themselves.
Gross Profit and Gross Margin
Gross profit was $ 1.9 million in
fiscal year 2023, a decreased by of
45% from $3.5 million in fiscal year
2022. Gross margin was 42.1% in fiscal year 2023, compared to 55%
in fiscal year 2022.
Operating Expenses
Operating expenses were $
1.8 million in fiscal year 2023, a
decrease of 5% from $1.9
million in fiscal year 2022.
- Selling expenses were $648 in
fiscal year 2023, a decrease of 99%
from $437,185 in fiscal year 2022.
The decrease was mainly attributable to the decrease in the
Company's sales commissions to obtain new orders in 2023.
- General and administrative expenses were $1.8 million in fiscal year 2023, an increase of 23.6% from $1.5 million in fiscal year 2022. The increase
was mainly due to (1) the increase of professional service fee of
$233,458 resulting from financial and
legal consulting in 2023, (2) other fees of $36,728 related to the Company's initial public offering in March 2023, and (3) rent of $78,246. The increase was offset by a decrease in
salary expense of $133,492 resulting
from the reduction of employees for cost-effectiveness
consideration.
Other Income
Other income was $1.5 million in
fiscal year 2023, an increase of
517.8% from $0.2 million in fiscal
year 2022. The increase was primarily due to the increase in
investment income of $349,915,
government subsidies of $560,090 and
interest income of $366,320.
Net Income
Net income was $1.0 million in
fiscal year 2023, compared to $1.4
million in fiscal year 2022.
Basic and Diluted Earnings per Share
Basic and diluted earnings per share were $0.08 in fiscal year 2023, compared to
$0.13 in fiscal year 2022.
Balance Sheet
As of December 31, 2023, the
Company had cash of $9.3 million,
compared to $1.2 million as of
December 31, 2022.
Cash Flow
Net cash used by operating activities was $0.06 million in fiscal year 2023, compared to
net cash provided in operating activities of $3.8 million in fiscal year 2022.
Net cash used in investing activities was $6.9 million in fiscal year 2023, compared to net
cash used by investing activities of $7.3
million in fiscal year 2022.
Net cash provided by financing activities was $15.1 million in fiscal year 2023. compared to
net cash provided by financing activities of $2.7 million in fiscal year 2022.
About Hitek Global Inc.
Hitek Global Inc., headquartered in Xiamen, China, is an information technology
("IT") consulting and solutions service provider in China. The Company has two lines of business:
1) services to small and medium businesses, which consists of
Anti-Counterfeiting Tax Control System ("ACTCS") tax devices, ACTCS
services, and IT services, and 2) services to large businesses,
which consists of hardware sales and software sales. The Company's
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: xiaty@xmhitek.com
|
HITEK GLOBAL INC.
AND SUBSIDIARIES
|
|
CONSOLIDATED BALANCE
SHEETS
|
|
|
|
As of December
31,
|
|
|
2023
|
|
|
2022
|
|
Assets
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
Cash
|
|
$
|
9,311,537
|
|
|
$
|
1,203,160
|
|
Short-term
investments
|
|
|
8,837,445
|
|
|
|
4,290,348
|
|
Accounts receivable,
net
|
|
|
2,118,738
|
|
|
|
3,271,218
|
|
Accounts receivable -
related party, net
|
|
|
-
|
|
|
|
399,465
|
|
Advances to suppliers,
net
|
|
|
338,166
|
|
|
|
481,769
|
|
Inventories,
net
|
|
|
219,505
|
|
|
|
430,670
|
|
Deferred offering
cost
|
|
|
-
|
|
|
|
917,446
|
|
Loan
receivable
|
|
|
3,608,289
|
|
|
|
1,013,157
|
|
Prepaid expenses and
other current assets
|
|
|
352,919
|
|
|
|
94,925
|
|
Total
current assets
|
|
|
24,786,599
|
|
|
|
12,102,158
|
|
|
|
|
|
|
|
|
|
Non-current
assets
|
|
|
|
|
|
|
|
|
Non-current accounts
receivable
|
|
|
4,597,214
|
|
|
|
4,209,546
|
|
Non-current accounts
receivable - related party
|
|
|
|
|
|
|
-
|
|
Non-current advance to
a third party
|
|
|
410,509
|
|
|
|
421,679
|
|
Non-current loan
receivable
|
|
|
4,227,079
|
|
|
|
4,342,100
|
|
Property, equipment and
software, net
|
|
|
403,330
|
|
|
|
122,967
|
|
Operating lease
right-of-use assets
|
|
|
3,309
|
|
|
|
6,641
|
|
Total
non-current assets
|
|
|
10,641,441
|
|
|
|
9,102,933
|
|
Total
Assets
|
|
$
|
35,428,040
|
|
|
$
|
21,205,091
|
|
|
|
|
|
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
532,130
|
|
|
$
|
696,734
|
|
Loan payable
|
|
|
493,159
|
|
|
|
506,578
|
|
Deferred
revenue
|
|
|
166,760
|
|
|
|
977,054
|
|
Taxes
payable
|
|
|
1,917,647
|
|
|
|
1,671,322
|
|
Due to related
parties
|
|
|
-
|
|
|
|
598
|
|
Accrued expenses and
other current liabilities
|
|
|
255,131
|
|
|
|
348,167
|
|
Operating lease
liabilities
|
|
|
-
|
|
|
|
3,242
|
|
Total
current liabilities
|
|
|
3,372,752
|
|
|
|
4,203,695
|
|
|
|
|
|
|
|
|
|
Non-current
Liabilities
|
|
|
|
|
|
|
|
|
Loan payable,
non-current
|
|
|
2,113,539
|
|
|
|
2,171,050
|
|
Deferred income tax
liabilities, non-current
|
|
|
1,604,163
|
|
|
|
1,300,421
|
|
Operating lease
liabilities, non-current
|
|
|
-
|
|
|
|
3,399
|
|
Total non-current
liabilities
|
|
|
3,717,702
|
|
|
|
3,474,870
|
|
Total
Liabilities
|
|
|
7,090,454
|
|
|
|
7,678,565
|
|
|
|
|
|
|
|
|
|
Commitments and
Contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders'
Equity
|
|
|
|
|
|
|
|
|
Ordinary Shares*, par
value $0.0001 per share, 490,000,000 shares authorized;
10,987,679 shares issued and outstanding
|
|
|
1,099
|
|
|
|
1,099
|
|
Additional paid-in
capital
|
|
|
2,628,356
|
|
|
|
2,628,356
|
|
Statutory
reserve
|
|
|
836,215
|
|
|
|
836,215
|
|
Retained
earnings
|
|
|
11,387,748
|
|
|
|
10,340,107
|
|
Accumulated other
comprehensive (loss) income
|
|
|
(609,367)
|
|
|
|
(279,251)
|
|
Total
Shareholders' Equity
|
|
|
28,337,586
|
|
|
|
13,526,526
|
|
|
|
|
|
|
|
|
|
Total Liabilities
and Shareholders' Equity
|
|
$
|
35,428,040
|
|
|
$
|
21,205,091
|
|
|
* Retrospectively
restated for effect of Reverse Split.
|
|
HITEK GLOBAL INC.
AND SUBSIDIARIES
|
|
CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
|
|
|
|
Years Ended December
31,
|
|
|
2023
|
|
|
2022
|
|
|
2021
|
|
Revenues
|
|
$
|
4,563,731
|
|
|
$
|
6,428,608
|
|
|
$
|
6,461,163
|
|
Cost of
revenues
|
|
|
(2,642,491)
|
|
|
|
(2,891,565)
|
|
|
|
(2,581,218)
|
|
Gross
profit
|
|
|
1,921,240
|
|
|
|
3,537,043
|
|
|
|
3,879,945
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
General and
administrative
|
|
|
1,819,531
|
|
|
|
1,472,648
|
|
|
|
1,699,934
|
|
Selling
|
|
|
648
|
|
|
|
437,185
|
|
|
|
76,477
|
|
Total operating
expenses
|
|
|
1,820,179
|
|
|
|
1,909,833
|
|
|
|
1,776,411
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
|
|
101,061
|
|
|
|
1,627,210
|
|
|
|
2,103,534
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
Government
subsidies
|
|
|
569,928
|
|
|
|
9,838
|
|
|
|
6,883
|
|
Net investment (loss)
income
|
|
|
330,552
|
|
|
|
(19,363)
|
|
|
|
103,575
|
|
Financial income
(expense), net
|
|
|
911,875
|
|
|
|
250,172
|
|
|
|
(2,190)
|
|
Other, net
|
|
|
(318,890)
|
|
|
|
1,106
|
|
|
|
608
|
|
Total other
income
|
|
|
1,493,465
|
|
|
|
241,753
|
|
|
|
108,676
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income before
provision for income taxes
|
|
|
1,594,526
|
|
|
|
1,868,963
|
|
|
|
2,212,210
|
|
Income tax
expense
|
|
|
546,885
|
|
|
|
453,218
|
|
|
|
542,853
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
$
|
1,047,641
|
|
|
$
|
1,415,745
|
|
|
$
|
1,669,357
|
|
Comprehensive
income
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
1,047,641
|
|
|
$
|
1,415,745
|
|
|
$
|
1,669,357
|
|
Foreign currency
translation (loss) gain
|
|
|
(330,116)
|
|
|
|
(1,015,447)
|
|
|
|
290,407
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
income
|
|
$
|
717,525
|
|
|
$
|
400,298
|
|
|
$
|
1,959,764
|
|
Earnings per
ordinary share
|
|
|
|
|
|
|
|
|
|
|
|
|
– Basic and
diluted
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of ordinary shares
outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
– Basic and
diluted
|
|
|
13,257,469
|
|
|
|
10,987,679
|
|
|
|
10,987,679
|
|
|
* Retrospectively
restated for effect of Reverse Split.
|
|
HITEK GLOBAL INC.
AND SUBSIDIARIES
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
|
|
Years Ended December
31,
|
|
|
2023
|
|
|
2022
|
|
|
2021
|
|
|
|
|
|
|
|
|
|
|
Operating
Activities
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
1,047,641
|
|
|
$
|
1,415,745
|
|
|
$
|
1,669,357
|
|
Adjustments to
reconcile net income to net
cash (used in) provided by operating
activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
50,662
|
|
|
|
21,881
|
|
|
|
355,738
|
|
Loss on disposal of
property, plant and
equipment
|
|
|
1,413
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
|
(102,418)
|
|
|
|
(21,699)
|
|
|
|
(6,525)
|
|
Net investment loss
(gain)
|
|
|
(208,626)
|
|
|
|
19,363
|
|
|
|
(103,375)
|
|
(Reversal of) doubtful
accounts of receivables
and advances to suppliers
|
|
|
(2,325)
|
|
|
|
(6,442)
|
|
|
|
(123,754)
|
|
(Reversal of) provision
for obsolete
inventories
|
|
|
5,559
|
|
|
|
2,217
|
|
|
|
(5,317)
|
|
Deferred income
tax
|
|
|
339,332
|
|
|
|
177,029
|
|
|
|
340,624
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term investment -
trading securities
|
|
|
(1,696,545)
|
|
|
|
2,418,675
|
|
|
|
(2,625,216)
|
|
Accounts
receivable
|
|
|
567,480
|
|
|
|
(2,490,725)
|
|
|
|
(1,100,056)
|
|
Accounts receivable -
related party
|
|
|
390,197
|
|
|
|
499,933
|
|
|
|
578,157
|
|
Advances to
suppliers
|
|
|
472,219
|
|
|
|
560,352
|
|
|
|
(183,369)
|
|
Deferred offering
cost
|
|
|
(130,134)
|
|
|
|
60,000
|
|
|
|
155,915
|
|
Inventory
|
|
|
194,872
|
|
|
|
(57,899)
|
|
|
|
(276,672)
|
|
Prepaid expenses and
other current assets
|
|
|
(13,028)
|
|
|
|
89,583
|
|
|
|
769,913
|
|
Due from related
party
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
|
(146,642)
|
|
|
|
225,198
|
|
|
|
127,422
|
|
Deferred
revenue
|
|
|
(787,062)
|
|
|
|
261,856
|
|
|
|
12,089
|
|
Taxes
payable
|
|
|
291,578
|
|
|
|
488,419
|
|
|
|
327,807
|
|
Due to related
parties
|
|
|
(584)
|
|
|
|
(3,320)
|
|
|
|
1,062
|
|
Accrued expenses and
other current liabilities
|
|
|
(340,133)
|
|
|
|
163,884
|
|
|
|
(127,735)
|
|
Net cash provided by
(used in) operating
activities
|
|
|
(61,912)
|
|
|
|
3,824,050)
|
|
|
|
(214,575)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investing
Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Advance payment for
software development
|
|
|
(339,309)
|
|
|
|
(117,617)
|
|
|
|
(25,582)
|
|
Loans to third
parties
|
|
|
(11,260,542)
|
|
|
|
(5,498,997)
|
|
|
|
(356,595)
|
|
Repayment from
third-party loans
|
|
|
8,830,933
|
|
|
|
199,463
|
|
|
|
317,059
|
|
Purchases of
held-to-maturity investments
|
|
|
(11,000,000)
|
|
|
|
(1,932,080)
|
|
|
|
(1,240,329)
|
|
Redemption of
held-to-maturity Investments
|
|
|
7,159,018
|
|
|
|
-
|
|
|
|
1,705,453
|
|
Net cash (used in)
provided by investing
activities
|
|
|
(6,946,555)
|
|
|
|
(7,349,231)
|
|
|
|
400,006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing
activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Borrowing from
third parties
|
|
|
-
|
|
|
|
2,749,498
|
|
|
|
|
|
Proceeds from
issuing ordinary shares
|
|
|
15,142,902
|
|
|
|
|
|
|
|
|
|
Net cash
provided by financing activities
|
|
|
15,142,902
|
|
|
|
2,749,498
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate
changes on cash and
equivalents
|
|
|
(26,058)
|
|
|
|
(112,465)
|
|
|
|
44,323
|
|
Net (decrease)
increase in cash
|
|
|
8,108,377
|
|
|
|
(888,148)
|
|
|
|
229,754
|
|
Cash and equivalents
at beginning of year
|
|
|
1,203,160
|
|
|
|
2,091,308
|
|
|
|
1,861,554
|
|
Cash and equivalents
at end of year
|
|
$
|
9,311,537
|
|
|
$
|
1,203,160
|
|
|
|
2,091,308
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental
disclosures of cash flow information:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash paid for income
taxes
|
|
$
|
36,504
|
|
|
$
|
45,002
|
|
|
|
32,646
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash
transactions:
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating right-of-use
assets recognized for
related operating lease liabilities
|
|
$
|
-
|
|
|
$
|
6,820
|
|
|
|
-
|
View original
content:https://www.prnewswire.com/news-releases/hitek-global-inc-announces-fiscal-year-2023-financial-results-302111338.html
SOURCE HITEK GLOBAL INC