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 XiaPhone: +86 18519770823Email:   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