XIAMEN,
China, April 27, 2023 /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, 2022.
Ms. Xiaoyang Huang, Chief
Executive Officer and Director of Hitek Global Inc. commented,
"During the year of 2022, there were restrictions on the mobility
and normal activities in place from time to time in China, in response to the COVID-19 pandemic.
However, we maintained our revenue in fiscal year 2022 at the same
level as last fiscal year, despite the challenging and uncertain
market conditions. We also achieved a stable gross profit margin
and a positive profit even after deducting the expenses relating to
our initial public offering. With the lifting of pandemic
restrictions in China in
December 2022, we believe that we are
well-positioned to become a future-ready company as we actively
seek business opportunities."
Ms. Huang continued, "Currently, China is encouraging self-employment in
various ways, and we are exploring opportunities in related markets
accordingly. We firmly believe that our accumulated stable
experience in serving small and micro enterprises, especially in
the field of IT services, will always be the solid foundation for
our long-term development. Additionally, we strive to enhance our
capabilities to provide more comprehensive IT solutions and expand
our service offerings to diversify our income streams in the near
future."
Fiscal Year 2022 Financial Results
Revenue
Total revenues were $6.4 million
in fiscal year 2022, slightly decreased from $6.5 million in fiscal year 2021, mainly due to
decrease in revenue generated from tax devices and services sales,
and partially offset by increase in revenue generated from hardware
sales and software sales.
- Revenue generated from hardware sales was $2.5 million in fiscal year 2022, increased by
2.9% to $2.4 million in fiscal year
2021, the increase was mainly from small retail sales.
- Revenue generated from software sales was $2.1 million in fiscal year 2022, increased by
3.1% to $2.0 million in fiscal year
2021, the increase was due to increase of maintenance service
revenue.
- Revenue generated from tax devices and services was
$1.8 million in fiscal year 2022,
decreased by 8.5% to $2.0 million in
fiscal year 2021. The decrease was due to the decline in demand of
our tax devices and services because, according to a new policy
effective since January 2021, as a
new policy was enacted in January
2021 that the new taxpayers in Xiamen can 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 $3.5 million in
fiscal year 2022, decreased by 8.8% from $3.9 million in fiscal year 2021. Gross margin
was 55.0% in fiscal year 2022, compared to 60.1% in fiscal year
2021.
Operating Expenses
Operating expenses were $1.9
million in fiscal year 2022, increased by 7.5% from
$1.8 million in fiscal year 2021.
- Selling expenses were $437,185 in
fiscal year 2022, increased by 471.7% from $76,477 in fiscal year 2021. The increase was
mainly because of the increase of the Company's sales commission in
connection with obtaining new orders.
- General and administrative expenses were $1.5 million in fiscal year 2022, decreased by
13.4% from $1.7 million in fiscal
year 2021. The decrease was mainly due to the decrease of bad debt
recovery of $0.1 million and offset
with the decrease of depreciation expense of $0.3 million.
Other Income
Other income was $0.2 million in
fiscal year 2022, increased by 122.5% from $0.1 million in fiscal year 2021. The increase
was primarily due to the increase of interest income related to the
loan receivables in the amount of $0.6
million offset by the increase of interest expense for the
borrowings of $0.3 million.
Net Income
Net income was $1.4 million in
fiscal year 2022, compared to $1.7
million in fiscal year 2021.
Basic and Diluted Earnings per Share
Basic and diluted earnings per share were $0.13 in fiscal year 2022, compared to
$0.15 in fiscal year 2021.
Balance Sheet
As of December 31, 2022, the
Company had cash of $1.2 million,
compared to $2.1 million as of
December 31, 2021.
Cash Flow
Net cash provided by operating activities was $3.8 million in fiscal year 2022, compared to net
cash used in operating activities of $0.2
million in fiscal year 2021.
Net cash used in investing activities was $7.3 million in fiscal year 2022, compared to net
cash provided by investing activities of $0.4 million in fiscal year 2021.
Net cash provided by financing activities was $2.7 million in fiscal year 2022. The Company did
not have net cash provided by financing activities in fiscal
year 2021.
Recent Development
On April 4, 2023, the Company
completed its initial public offering of 3,200,000 ordinary shares
at a public offering price of US$5.00
per ordinary share. The ordinary shares of the Company began
trading on the Nasdaq Capital Market on March 31, 2023 under the ticker symbol
"HKIT."
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:
Ascent Investor Relations LLC
Tina Xiao
Phone: +1 917-609-0333
Email: tina.xiao@ascent-ir.com
HITEK GLOBAL INC.
AND SUBSIDIARIES
|
CONSOLIDATED BALANCE
SHEETS
|
|
|
|
|
As of December
31,
|
|
|
|
2022
|
|
|
2021
|
|
Assets
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
Cash
|
|
$
|
1,203,160
|
|
|
$
|
2,091,308
|
|
Short-term
investments
|
|
|
4,290,348
|
|
|
|
5,197,015
|
|
Accounts receivable,
net
|
|
|
3,271,218
|
|
|
|
2,357,114
|
|
Accounts receivable -
related party, net
|
|
|
399,465
|
|
|
|
414,639
|
|
Advances to suppliers,
net
|
|
|
481,769
|
|
|
|
1,110,923
|
|
Inventories,
net
|
|
|
430,670
|
|
|
|
409,021
|
|
Deferred offering
cost
|
|
|
917,446
|
|
|
|
1,026,567
|
|
Loan
receivable
|
|
|
1,013,157
|
|
|
|
204,441
|
|
Prepaid expenses and
other current assets
|
|
|
94,925
|
|
|
|
156,111
|
|
Total current
assets
|
|
|
12,102,158
|
|
|
|
12,967,139
|
|
|
|
|
|
|
|
|
|
|
Non-current
assets
|
|
|
|
|
|
|
|
|
Non-current accounts
receivable
|
|
|
4,209,546
|
|
|
|
3,134,361
|
|
Non-current accounts
receivable - related party
|
|
|
-
|
|
|
|
548,395
|
|
Non-current advance to
a third party
|
|
|
421,679
|
|
|
|
333,717
|
|
Non-current loan
receivable
|
|
|
4,342,100
|
|
|
|
-
|
|
Property, equipment and
software, net
|
|
|
122,967
|
|
|
|
156,761
|
|
Operating lease
right-of-use assets
|
|
|
6,641
|
|
|
|
-
|
|
Total non-current assets
|
|
|
9,102,933
|
|
|
|
4,173,234
|
|
Total
Assets
|
|
$
|
21,205,091
|
|
|
$
|
17,140,373
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
696,734
|
|
|
$
|
518,739
|
|
Loan payable
|
|
|
506,578
|
|
|
|
-
|
|
Deferred
revenue
|
|
|
977,054
|
|
|
|
784,530
|
|
Taxes
payable
|
|
|
1,671,322
|
|
|
|
1,299,147
|
|
Due to related
parties
|
|
|
598
|
|
|
|
4,163
|
|
Accrued expenses and
other current liabilities
|
|
|
348,167
|
|
|
|
181,925
|
|
Operating lease
liabilities
|
|
|
3,242
|
|
|
|
-
|
|
Total current liabilities
|
|
|
4,203,695
|
|
|
|
2,788,504
|
|
|
|
|
|
|
|
|
|
|
Non-current
Liabilities
|
|
|
|
|
|
|
|
|
Loan payable,
non-current
|
|
|
2,171,050
|
|
|
|
-
|
|
Deferred income tax
liabilities, non-current
|
|
|
1,300,421
|
|
|
|
1,225,641
|
|
Operating lease
liabilities, non-current
|
|
|
3,399
|
|
|
|
-
|
|
Total non-current
liabilities
|
|
|
3,474,870
|
|
|
|
1,225,641
|
|
Total
Liabilities
|
|
|
7,678,565
|
|
|
|
4,014,145
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
|
767,207
|
|
Retained
earnings
|
|
|
10,340,107
|
|
|
|
8,993,370
|
|
Accumulated other
comprehensive (loss) income
|
|
|
(279,251)
|
|
|
|
736,196
|
|
Total Shareholders' Equity
|
|
|
13,526,526
|
|
|
|
13,126,228
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities
and Shareholders' Equity
|
|
$
|
21,205,091
|
|
|
$
|
17,140,373
|
|
|
|
|
|
*
|
Retrospectively
restated for effect of Reverse Split.
|
HITEK GLOBAL INC.
AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
|
|
|
|
Years Ended
December 31,
|
|
|
|
2022
|
|
|
2021
|
|
|
2020
|
|
Revenues
|
|
$
|
6,428,608
|
|
|
$
|
6,461,163
|
|
|
$
|
5,804,727
|
|
Cost of
revenues
|
|
|
(2,891,565)
|
|
|
|
(2,581,218)
|
|
|
|
(2,633,455)
|
|
Gross
profit
|
|
|
3,537,043
|
|
|
|
3,879,945
|
|
|
|
3,171,272
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
General and
administrative
|
|
|
1,472,648
|
|
|
|
1,699,934
|
|
|
|
1,415,484
|
|
Selling
|
|
|
437,185
|
|
|
|
76,477
|
|
|
|
2,012
|
|
Total operating
expenses
|
|
|
1,909,833
|
|
|
|
1,776,411
|
|
|
|
1,417,496
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
|
|
1,627,210
|
|
|
|
2,103,534
|
|
|
|
1,753,776
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
Government
subsidies
|
|
|
9,838
|
|
|
|
6,883
|
|
|
|
101,965
|
|
Net investment (loss)
income
|
|
|
(19,363)
|
|
|
|
103,375
|
|
|
|
99,574
|
|
Financial income
(expense), net
|
|
|
250,172
|
|
|
|
(2,190)
|
|
|
|
2,607
|
|
Other, net
|
|
|
1,106
|
|
|
|
608
|
|
|
|
179
|
|
Total other
income
|
|
|
241,753
|
|
|
|
108,676
|
|
|
|
204,325
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income before
provision for income taxes
|
|
|
1,868,963
|
|
|
|
2,212,210
|
|
|
|
1,958,101
|
|
Income tax
expense
|
|
|
453,218
|
|
|
|
542,853
|
|
|
|
269,242
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
$
|
1,415,745
|
|
|
$
|
1,669,357
|
|
|
$
|
1,688,859
|
|
Comprehensive
income
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
1,415,745
|
|
|
$
|
1,669,357
|
|
|
$
|
1,688,859
|
|
Foreign currency
translation (loss) gain
|
|
|
(1,015,447)
|
|
|
|
290,407
|
|
|
|
521,914
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
income
|
|
$
|
400,298
|
|
|
$
|
1,959,764
|
|
|
$
|
2,210,773
|
|
Earnings per
ordinary share
|
|
|
|
|
|
|
|
|
|
|
|
|
– Basic and
diluted
|
|
$
|
0.13
|
|
|
$
|
0.15
|
|
|
$
|
0.15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of ordinary shares outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
– Basic and
diluted
|
|
|
10,987,679
|
|
|
|
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 December31,
|
|
|
|
2022
|
|
|
2021
|
|
|
2020
|
|
|
|
|
|
|
|
|
|
|
|
Operating Activities
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
1,415,745
|
|
|
$
|
1,669,357
|
|
|
$
|
1,688,859
|
|
Adjustments to
reconcile net income to net cash (used in) provided by
operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
21,881
|
|
|
|
355,738
|
|
|
|
378,594
|
|
Loss on disposal of
property, plant and equipment
|
|
|
|
|
|
|
|
|
|
|
94
|
|
Interest
income
|
|
|
(21,699)
|
|
|
|
(6,525)
|
|
|
|
(6,522)
|
|
Net investment loss
(gain)
|
|
|
19,363
|
|
|
|
(103,375)
|
|
|
|
(99,574)
|
|
(Reversal of) doubtful
accounts of receivables and advances to suppliers
|
|
|
(6,442)
|
|
|
|
(123,754)
|
|
|
|
(33,519)
|
|
(Reversal of) provision
for obsolete inventories
|
|
|
2,217
|
|
|
|
(5,317)
|
|
|
|
6,783
|
|
Deferred income
tax
|
|
|
177,029
|
|
|
|
340,624
|
|
|
|
242,296
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term investment
–trading securities
|
|
|
2,418,675
|
|
|
|
(2,625,216)
|
|
|
|
(174,379)
|
|
Accounts
receivable
|
|
|
(2,490,725)
|
|
|
|
(1,100,056)
|
|
|
|
934,525
|
|
Accounts receivable -
related party
|
|
|
499,933
|
|
|
|
578,157
|
|
|
|
186,223
|
|
Advances to
suppliers
|
|
|
560,352
|
|
|
|
(184,369)
|
|
|
|
(848,649)
|
|
Deferred offering
cost
|
|
|
60,000
|
|
|
|
155,915
|
|
|
|
(335,898)
|
|
Inventory
|
|
|
(57,899)
|
|
|
|
(276,672)
|
|
|
|
397,603
|
|
Prepaid expenses and
other current assets
|
|
|
89,583
|
|
|
|
769,913
|
|
|
|
(673,019)
|
|
Due from related
party
|
|
|
|
|
|
|
|
|
|
|
708
|
|
Accounts
payable
|
|
|
225,198
|
|
|
|
127,422
|
|
|
|
172,025
|
|
Deferred
revenue
|
|
|
261,856
|
|
|
|
12,089
|
|
|
|
(58,463)
|
|
Taxes
payable
|
|
|
488,419
|
|
|
|
327,807
|
|
|
|
159,464
|
|
Due to related
parties
|
|
|
(3,320)
|
|
|
|
1,062
|
|
|
|
2,843
|
|
Accrued expenses and
other current liabilities
|
|
|
163,884
|
|
|
|
(127,375)
|
|
|
|
(7,144)
|
|
Net cash provided by (used in) operating
activities
|
|
|
3,824,050
|
|
|
|
(214,575)
|
|
|
|
1,932,850
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investing Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Advance payment for
software development
|
|
|
(117,617)
|
|
|
|
(25,582)
|
|
|
|
(285,346)
|
|
Loans to third
parties
|
|
|
(5,498,997)
|
|
|
|
(356,595)
|
|
|
|
(144,925)
|
|
Repayment from
third-party loans
|
|
|
199,463
|
|
|
|
317,059
|
|
|
|
-
|
|
Purchases of
held-to-maturity investments
|
|
|
(1,932,080)
|
|
|
|
(1,240,329)
|
|
|
|
(2,463,732)
|
|
Redemption of
held-to-maturity Investments
|
|
|
-
|
|
|
|
1,705,453
|
|
|
|
2,028,956
|
|
Net cash (used in) provided by investing
activities
|
|
|
(7,349,231)
|
|
|
|
400,006
|
|
|
|
(865,047)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Borrowing
from third parties
|
|
|
2,749,498
|
|
|
|
-
|
|
|
|
-
|
|
Net cash provided by financing
activities
|
|
|
2,749,498
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate
changes on cash and equivalents
|
|
|
(112,465)
|
|
|
|
44,323
|
|
|
|
17,531
|
|
Net (decrease) increase in cash
|
|
|
(888,148)
|
|
|
|
229,754
|
|
|
|
1,085,334
|
|
Cash and equivalents at beginning of
year
|
|
|
2,091,308
|
|
|
|
1,861,554
|
|
|
|
776,220
|
|
Cash and equivalents at end of
year
|
|
$
|
1,203,160
|
|
|
$
|
2,091,308
|
|
|
|
1,861,554
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosures of cash flow
information:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash paid for income
taxes
|
|
$
|
45,002
|
|
|
$
|
32,646
|
|
|
|
26,300
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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-2022-financial-results-301810353.html
SOURCE Hitek Global Inc.