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Hitek Global Inc. Announces Fiscal Year 2024 Financial Results

PR Newswire

XIAMEN, China, April 29, 2025

XIAMEN, China, April 29, 2025 /PRNewswire/ — Hitek Global Inc. (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: xiaty@xmhitek.com

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 
                     ============   ============   =========== 
 

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