Hitek Global Inc. Announces Fiscal Year 2024 Financial Results

, /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 XiaPhone: +86 18519770823Email: [email protected] The following tables summarize our results of operations for the periods indicated: HITEK GLOBAL INC. AND SUBSIDIARIES Years Ended December 31, 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 authorized; 14,392,364 shares issued and outstanding as of December 31, 2023. - 1,439 Class A Ordinary Shares, US$0.0001 par value; 431,808,000 shares authorized, 21,107,364 shares issued and outstanding as of December 31, 2024. 2,111 - Class B Ordinary Shares, US$0.0001 par value; 58,192,000 shares authorized, 8,192,000 shares issued and outstanding as of December 31, 2024. 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(LOSS) 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 provided by (used in) operating activities: 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 receivables and advances to suppliers 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 operating lease liabilities $ - $ - $ 6,820 SOURCE HITEK GLOBAL INC WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM? 440k+ Newsrooms & Influencers 9k+ Digital Media Outlets 270k+ Journalists Opted In

Hitek Global Inc. Announces Fiscal Year 2024 Financial Results

FAQ

Why Bearish?

How important is it?

Why Short Term?

Related Companies

Related News