# EDGAR Filing Document

**Accession Number:** 0001742341
**File Stem:** 0001213900-25-101048
**Filing Date:** 2025-10
**Character Count:** 106731
**Document Hash:** 000598474381915864c0397872036872
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001213900-25-101048.hdr.sgml**: 20251022

**ACCESSION NUMBER**: 0001213900-25-101048

**CONFORMED SUBMISSION TYPE**: 6-K

**PUBLIC DOCUMENT COUNT**: 97

**CONFORMED PERIOD OF REPORT**: 20250630

**FILED AS OF DATE**: 20251022

**DATE AS OF CHANGE**: 20251022

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** HiTek Global Inc.
- **CENTRAL INDEX KEY:** 0001742341
- **STANDARD INDUSTRIAL CLASSIFICATION:** SERVICES-PREPACKAGED SOFTWARE [7372]
- **ORGANIZATION NAME:** 06 Technology
- **EIN:** 000000000
- **STATE OF INCORPORATION:** E9
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 6-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-39339
- **FILM NUMBER:** 251409052

**BUSINESS ADDRESS:**
- **STREET 1:** UNIT 304, NO. 30 GUANRI ROAD
- **STREET 2:** SIMING DISTRICT
- **CITY:** XIAMEN, FUJIAN PROVINCE
- **STATE:** F4
- **ZIP:** 361008
- **BUSINESS PHONE:** 86-57182213772

**MAIL ADDRESS:**
- **STREET 1:** UNIT 304, NO. 30 GUANRI ROAD
- **STREET 2:** SIMING DISTRICT
- **CITY:** XIAMEN, FUJIAN PROVINCE
- **STATE:** F4
- **ZIP:** 361008

?xml version='1.0' encoding='ASCII'?

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON, D.C. 20549**

**FORM 6-K**

**REPORT OF FOREIGN PRIVATE ISSUER**

**PURSUANT TO RULE 13a-16 OR 15d-16 OF THE**

**SECURITIES EXCHANGE ACT OF 1934**

For the month of **<u>October 2025</u>**

Commission File Number **<u>001-39339</u>**

**<u>HiTek Global Inc.</u>**

(Translation of registrant's name into English)

**Unit 304, No. 30 Guanri Road, Siming District**

**Xiamen City, Fujian Province, People's Republic of China**

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

Form 20-F ☒&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Form 40-F ☐

**INCORPORATION BY REFERENCE**

This report on Form 6-K ("**Report**") shall be deemed to be incorporated by reference into: (i) the Registration Statement; (ii) the registration statement on [Form F-3](http://www.sec.gov/Archives/edgar/data/1742341/000121390024071895/ea0211564-f3_hitek.htm) (File No. 333-281723) of the Company; (iii) the registration statement on [Form S-8](http://www.sec.gov/Archives/edgar/data/1742341/000121390025072061/ea0247936-s8_hltek.htm) (File No. 333-289245) of the Company, each filed with the U.S. Securities and Exchange Commission on, respectively, May 16, 2024, August 22, 2024, and August 5, 2025 (collectively, and as amended from time to time, the "**Registration Statements**"), and into each prospectus or prospectus supplement outstanding under the Registration Statements, to the extent not superseded by documents or reports subsequently filed or furnished by the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.

**EXPLANATORY NOTE**

The Company is furnishing this current report on Form 6-K to provide its unaudited condensed consolidated financial statements as of June 30, 2025 and for the six months ended June 30, 2025 and 2024, attached as Exhibit 99.1 to this report of foreign private issuer on Form 6-K. and Management's Discussion and Analysis of Financial Condition and Results of Operations for the six months ended June 30, 2025 and 2024 is attached as Exhibit 99.2 to this report of foreign private issuer on Form 6-K

**SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS**

This Form 6-K Report and the exhibits hereto contain certain forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve known and unknown risks and uncertainties and are based on the Company's current expectations and projections about future events 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 "approximates," "assesses," "believes," "hopes," "expects," "anticipates," "estimates," "projects," "intends," "plans," "will," "would," "should," "could," "may" or similar expressions.

Many of these statements are based on our assumptions about factors that are beyond our ability to control or predict and are subject to significant risks and uncertainties that are described more fully in "Item 3. Key Information-D. Risk Factors" on our annual report on [Form 20-F](https://www.sec.gov/Archives/edgar/data/1742341/000121390025035602/ea0237155-20f_hitek.htm) filed with the SEC on April 25, 2025. Any of these factors or a combination of these factors could materially affect our future results of operations and the ultimate accuracy of the forward-looking statements. Fluctuations in our future financial results may negatively impact the value of our Class A ordinary shares. In addition to these important factors, important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include, among other things:

● assumptions about our future financial and operating results, including revenue, income, expenditures, cash balances, and other financial items;

● our ability to execute our growth, and expansion, including our ability to meet our goals;

● current and future economic and political conditions

● our capital requirements and our ability to raise any additional financing which we may require;

● our ability to hire and retain qualified management personnel and key employees in order to enable us to develop our business; and

● other assumptions described in this Report underlying or relating to any forward-looking statements.

Should one or more of the foregoing risks or uncertainties materialize, should any of our assumptions prove incorrect, or should we be unable to address any of the foregoing factors, our actual results may vary in material and adverse respects from those projected in these forward-looking statements. Consequently, there can be no assurance that actual results or developments anticipated by us will be realized or, even if substantially realized, that they will have the expected consequences to, or effects, on us. Given these uncertainties, prospective investors are cautioned not to place undue reliance on such forward-looking statements.

The Company undertakes no obligation to update or revise publicly any 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 annual report and other filings with the U.S. Securities and Exchange Commission. As a result, you are cautioned not to rely on any forward-looking statements.

**Financial Statements and Exhibits.**

<u>Exhibits</u>:

---

| | |
|:---|:---|
| **Exhibit No.** | **Description** |
| 99.1 | [Unaudited Condensed Consolidated Financial Statements as of June 30, 2025 and for the Six Months Ended June 30, 2025 and 2024.](ea026184001ex99-1_hitek.htm) |
| 99.2 | [Operating and Financial Review and Prospects in Connection with the Unaudited Condensed Consolidated Financial Statements for the Six Months Ended June 30, 2025 and 2024.](ea026184001ex99-2_hitek.htm) |
| 101.INS | Inline XBRL Instance Document |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document. |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document. |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document. |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document. |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document. |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |

---

**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: October 22, 2025

---

| | |
|:---|:---|
| **HiTek Global Inc.** | **HiTek Global Inc.** |
| By: | /s/ Xiaoyang Huang |
|  | Xiaoyang Huang |
|  | Chief Executive Officer |
|  | (Principal Executive Officer) |

---

## Exhibit 99.1

?xml version='1.0' encoding='ASCII'?

**Exhibit 99.1**

**HITEK GLOBAL INC. INC. AND SUBSIDIARIES**

**INDEX TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

---

| | |
|:---|:---|
|  | **Page(s)** |
| [Condensed Consolidated Balance Sheets as of June 30, 2025 and December 31, 2024](#F_001) | F-2 |
| [Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss for the Six Months Ended June 30, 2025 and 2024](#F_002) | F-3 |
| [Unaudited Condensed Consolidated Statements of Changes in Shareholders' Equity for the Six Months Ended June 30, 2025 and 2024](#F_003) | F-4 |
| [Unaudited Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2025 and 2024](#F_004) | F-5 |
| [Notes to Unaudited Condensed Consolidated Financial Statements](#F_005) | F-6 |

---

**HITEK GLOBAL INC. AND SUBSIDIARIES** 

**UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS**

**(Expressed in U.S. Dollars, except for the number of shares)**

---

| | | |
|:---|:---|:---|
|  | **June 30,<br> 2025** | **December 31,<br> 2024** |
|  | **(Unaudited)** | |
| **ASSETS** |  |  |
| **Current assets:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash | $8198325 | $7236798 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Short-term investments | 21600727 | 22932540 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable, net | 1148780 | 1385761 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Advances to suppliers, net | 2302732 | 11315 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventories, net | 140880 | 154471 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loans receivable | 558378 | 958996 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | 398504 | 1506297 |
| &nbsp;&nbsp;&nbsp;**Total current assets** | **34348326** | **34186178** |
| **Non-current assets** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-current accounts receivable | 986752 | 2227089 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-current loan receivable | 5165001 | 4383982 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Property, equipment and software, net | 611466 | 744941 |
| &nbsp;&nbsp;&nbsp;**Total non-current assets** | **6763219** | **7356012** |
| **Total Assets** | $**41111545** | $**41542190** |
| **Liabilities and Shareholders' Equity** |  |  |
| **Current liabilities** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | $209181 | $255950 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Advances from customers | 302603 | 11034 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loan payable – related party |  | 479498 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred revenue | 40520 | 55720 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Taxes payable | 1718162 | 1680476 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Due to related party | 16751 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued expenses and other current liabilities | 119537 | 130691 |
| &nbsp;&nbsp;&nbsp;**Total current liabilities** | **2406754** | **2613369** |
| **Non-current Liabilities** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loan payable – related party | 2582500 | 2054992 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred income tax liabilities, net | 1527061 | 1598909 |
| &nbsp;&nbsp;&nbsp;**Total non-current liabilities** | **4109561** | **3653901** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total liabilities** | **6516315** | **6267270** |
| **Commitments and Contingencies** | - | - |
| **Shareholders' Equity** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Class A Ordinary Shares, US$0.0001 par value; 431,808,000 shares authorized, 21,107,364 shares issued and outstanding. | 2111 | 2111 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Class B Ordinary Shares, US$0.0001 par value; 58,192,000 shares authorized, 8,192,000 shares issued and outstanding. | 819 | 819 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Additional paid-in capital | 24920060 | 24920060 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Statutory reserve | 836215 | 836215 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Retained earnings | 9574949 | 10491058 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accumulated other comprehensive loss | (738924) | (975343) |
| &nbsp;&nbsp;&nbsp;Total Shareholders' Equity | **34595230** | **35274920** |
| **Total Liabilities and Shareholders' Equity** | $**41111545** | $**41542190** |

---

The accompanying notes are an integral part of these condensed consolidated financial statements.

**HITEK GLOBAL INC. AND SUBSIDIARIES** 

**UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS** 

**(Expressed in U.S. Dollars, except for the number of shares)**

---

| | | |
|:---|:---|:---|
|  | **Six Months Ended <br> June 30,** | **Six Months Ended <br> June 30,** |
|  | **2025** | **2024** |
|  | **(Unaudited)** | **(Unaudited)** |
| Revenues | $741541 | $1833590 |
| **Cost of revenues** | (567675) | (880180) |
| **Gross profit** | **173866** | **953410** |
| **Operating expenses:** |  |  |
| &nbsp;&nbsp;&nbsp;General and administrative | 1519128 | 1315420 |
| &nbsp;&nbsp;&nbsp;Selling | 2325 | 9844 |
| **Total operating expenses** | **1521453** | **1325264** |
| **Operating loss** | **(1347587)** | **(371854)** |
| **Other income (expense)** |  |  |
| &nbsp;&nbsp;&nbsp;Government subsidies |  | 42976 |
| &nbsp;&nbsp;&nbsp;Net investment gain | 82463 | 228104 |
| &nbsp;&nbsp;&nbsp;Interest income | 412683 | 556011 |
| &nbsp;&nbsp;&nbsp;Interest expense | (153049) | (154015) |
| &nbsp;&nbsp;&nbsp;Other expense, net | (11501) | (8983) |
| **Total other income, net** | **330596** | **664093** |
| **(Loss) income before provision for income taxes** | **(1016991)** | **292239** |
| &nbsp;&nbsp;&nbsp;Income tax (benefit) expense | (100882) | 170577 |
| **Net (loss) income** | $(916109) | $121662 |
| **Comprehensive loss/income** |  |  |
| Net (loss) income | $**(916109)** | $**121662** |
| Foreign currency translation gain (loss) | 236419 | (314709) |
| **Comprehensive loss** | $**(679690)** | $**(193047)** |
| **(Loss) earnings per ordinary share** |  |  |
| &nbsp;&nbsp;&nbsp;Basic and diluted | $**(0.03)** | $**0.01** |
| **Weighted average number of ordinary shares outstanding** |  |  |
| &nbsp;&nbsp;&nbsp;Basic and diluted | 29299364 | 14392364 |

---

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

**HITEK GLOBAL INC. AND SUBSIDIARIES** 

**UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY**

**Six Months Ended June 30, 2025 and 2024**

**(Expressed in U.S. Dollars, except for the number of shares)**

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Ordinary shares** | **Ordinary shares** | | | | | |
|  | **Shares** | **Amount** | **Additional**<br> **paid-in** <br>**capital** | **Statutory**<br>**reserves** | **Retained**<br>**earnings** | **Accumulated<br> other<br> comprehensive**<br>**loss** | **Total shareholders'**<br>**equity** |
| **Balance as of December 31, 2023** | **14392364** | $**1439** | $**16721551** | $**836215** | $**11387748** | $**(609367)** | $**28337586** |
| Foreign currency translation adjustment |  | - | - | - | - | (314709) | **(314709)** |
| Net income | - | - | - | - | 121662 | - | **121662** |
| **Balance as of June 30, 2024 (unaudited)** | **14392364** | $**1439** | $**16721551** | $**836215** | $**11509410** | $**(924076)** | $**28144539** |

---

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Class A<br> Ordinary Shares** | **Class A<br> Ordinary Shares** | **Class B <br> Ordinary Shares** | **Class B <br> Ordinary Shares** | | | | | |
|  | **Number of<br> shares** | **Amount** | **Number of<br> shares** | **Amount** | **Additional**<br>**paid-in<br> capital** |<br>**Statutory<br> reserve** |<br>**Retained<br> earnings** | **Accumulated <br> other**<br>**comprehensive<br> loss** | **Total**<br>**Shareholders' Equity** |
| **Balance as of December 31, 2024** | **21107364** | $**2111** | **8192000** | $**819** | $**24920060** | $**836215** | $**10491058** | $**(975343)** | $**35274920** |
| Foreign currency translation adjustment |  | - |  | - | - | - | - | 236419 | 236419 |
| Net loss | - | - | - | - | - | - | (916109) | - | (916109) |
| **Balance as of June 30, 2025 (unaudited)** | **21107364** | $**2111** | **8192000** | $**819** | $**24920060** | $**836215** | $**9574949** | $**(738924)** | $**34595230** |

---

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

**HITEK GLOBAL INC. AND SUBSIDIARIES**

**UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS**

**(Expressed in U.S. Dollars)**

---

| | | |
|:---|:---|:---|
|  | **Six Months Ended <br> June 30,** | **Six Months Ended <br> June 30,** |
|  | **2025** | **2024** |
|  | **(Unaudited)** | **(Unaudited)** |
| **Cash flows from operating activities:** |  |  |
| Net (loss) income | $(916109) | $121662 |
| Adjustments to reconcile net (loss) income to net cash provided by operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 145775 | 118779 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued interest income from loans, net | (104790) | (193762) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net investment gain | (66820) | (228104) |
| &nbsp;&nbsp;&nbsp;&nbsp;Provision for expected credit losses of receivables and advances to suppliers | 482621 | 7925 |
| &nbsp;&nbsp;&nbsp;&nbsp;Provision for obsolete inventories | 3832 | - |
| &nbsp;&nbsp;&nbsp;&nbsp;Deferred income tax | (100882) | 169778 |
| Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Short-term investments - trading securities | 2426716 | 27750 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable | 1044167 | 756799 |
| &nbsp;&nbsp;&nbsp;&nbsp;Advance to suppliers | (2272803) | (18246) |
| &nbsp;&nbsp;&nbsp;&nbsp;Inventories | 12483 | 21859 |
| &nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | 266117 | 47525 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | (50983) | 80817 |
| &nbsp;&nbsp;&nbsp;&nbsp;Advance from customers | 291466 | (2899) |
| &nbsp;&nbsp;&nbsp;&nbsp;Deferred revenue | (16056) | (98668) |
| &nbsp;&nbsp;&nbsp;&nbsp;Tax payable | 5781 | 1737 |
| &nbsp;&nbsp;&nbsp;&nbsp;Due to related parties | 16546 | - |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued expenses and other current liabilities | (13461) | (58829) |
| **Net cash provided by operating activities** | **1153600** | **754123** |
| **Cash flows from investing activities:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Payment for software development | - | (333005) |
| &nbsp;&nbsp;&nbsp;&nbsp;Loans to third parties | (413645) | (2618726) |
| &nbsp;&nbsp;&nbsp;&nbsp;Loans repayment by third-parties | 137882 | 2443523 |
| &nbsp;&nbsp;&nbsp;&nbsp;Purchases of property and equipment | - | (9865) |
| &nbsp;&nbsp;&nbsp;&nbsp;Purchases of held-to-maturity investments | (1650000) | (9500000) |
| &nbsp;&nbsp;&nbsp;&nbsp;Redemption of held-to-maturity investments | 700000 | - |
| &nbsp;&nbsp;&nbsp;&nbsp;Deposit for acquisition | - | (1010041) |
| &nbsp;&nbsp;&nbsp;&nbsp;Refund of deposit for acquisition | 1000000 | - |
| **Net cash used in investing activities** | **(225763)** | **(11028114)** |
| **Cash flows from financing activities:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from private placement | **-**  | 8200000 |
| **Net cash provided by financing activities** | - | **8200000** |
| Effect of exchange rate changes on cash | 33690 | (21488) |
| **Net increase (decrease) in cash** | **961527** | **(2095479)** |
| **Cash at the beginning of period** | 7236798 | 9311537 |
| **Cash at the end of period** | $**8198325** | $**7216058** |
| **Supplemental disclosures of cash flow information:** |  |  |
| &nbsp;&nbsp;&nbsp;Cash paid for income taxes | $- | $79149 |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash paid for interest | $- | $50912 |

---

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

**HITEK GLOBAL INC. AND SUBSIDIARIES**

**NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**June 30, 2025 and 2024**

**NOTE 1 – NATURE OF OPERATIONS**

HiTek Global Inc. ("HiTek Global") was incorporated under the laws of the Cayman Islands on November 3, 2017 in anticipation of an initial public offering. HiTek Global, through its variable interest entity ("VIE") and VIE's subsidiaries (collectively, the "Company") provides hardware sales, software sales, information technology ("IT") maintenance services and tax devices and services in the People's Republic of China (the "PRC").

The Company's corporate structure as of June 30, 2025 is as follows:

![](ex99-1_001.jpg)

**NOTE 2 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

**Basis of Financial Information**

The condensed consolidated financial statements ("CFS") as of June 30, 2025 and for the six months ended June 30, 2025 and 2024 are unaudited. The accompanying unaudited condensed CFS were prepared by the Company in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") for interim financial reporting. Operating results as presented are not necessarily indicative of the results expected for a full year. Certain prior year financial information was reclassified to be conform to current year presentation.

**Principles of Consolidation**

The accompanying unaudited condensed CFS include financial information for the Company and its wholly-owned subsidiaries and those VIEs where the Company is the primary beneficiary. In preparing the unaudited condensed CFS, all significant inter-company accounts and transactions were eliminated.

**VIE Agreements with HiTek**

Due to PRC legal restrictions of foreign ownership in certain sectors, neither we nor our subsidiaries own any equity interest in HiTek. Instead, WFOE, HiTek and HiTek's shareholders entered into a series of contractual arrangements ("VIE Agreements") on March 31, 2018, which have not been tested in a court of law. The VIE Agreements by and among WFOE, HiTek, and HiTek's shareholders include (i) power of attorney agreements and equity interest pledge agreement, which provide WFOE effective control over HiTek; (ii) an exclusive technical consulting and service agreement which allows WFOE to receive substantially all of the economic benefits from HiTek; and (iii) certain exclusive equity interest purchase agreements which provide WFOE an exclusive option to purchase all or part of the equity interests in and/or assets of HiTek when and to the extent permitted by PRC laws. Accordingly, the Company is considered the primary beneficiary of VIE for accounting purpose and has consolidated the VIE and the VIE's subsidiaries' assets, liabilities, results of operations, and cash flows in the accompanying CFS.

Each of the VIE Agreements is described below:

*<u>Exclusive Technical Consulting and Service Agreement</u>*

Pursuant to the Exclusive Technical Consulting and Service Agreement between HiTek and WFOE, WFOE provides HiTek technical support, consulting services and other management services for its day-to-day business operations and management, on an exclusive basis. The Exclusive Technical Consulting and Service Agreement came into effect as of March 31, 2018. For services rendered to HiTek by WFOE under this agreement, WFOE is entitled to collect a fee that shall be paid per quarter of 100% of HiTek's quarterly profit. The term of the Exclusive Technical Consulting and Service Agreement is ten years unless terminated by WFOE with 30-day prior notice.

*<u>Equity Interest Pledge Agreement</u>*

WFOE, HiTek and HiTek shareholders entered into an Equity Interest Pledge Agreement, pursuant to which HiTek shareholders pledged all of their equity interests in HiTek to WFOE to guarantee the performance of HiTek's obligations under the Exclusive Technical Consulting and Service Agreement as described above. The Equity Interest Pledge Agreement came into effect as of March 31, 2018. During the term of the pledge, WFOE is entitled to receive any dividends declared on the pledged equity interests of HiTek. The Equity Interest Pledge Agreement ends when all contractual obligations under the Exclusive Technical Consulting and Service Agreement have been fully performed.

*<u>Exclusive Equity Interests Purchase Agreement</u>*

Under the Exclusive Equity Interests Purchase Agreement, the HiTek Shareholders granted WFOE (or its designee) an exclusive option to purchase, to the extent permitted under PRC law, part or all of their equity interests in HiTek. The option price is equal to the capital paid in by the HiTek Shareholders subject to any appraisal or restrictions required by applicable PRC laws and regulations. The Exclusive Equity Interests Purchase Agreement remains effective for a term of ten years and may be renewed at WFOE's election.

*<u>Power of Attorney</u>*

Each shareholder of the HiTek executed an irrevocable power of attorney in favor of WFOE. Pursuant to this power of attorney, WFOE has full power and authority to exercise all of such shareholders' rights with respect to their equity interest in the VIE Companies, including HiTek, Huasheng and Huoerguosi. The power of attorney will remain in force for so long as the shareholder remains a shareholder of HiTek.

During the six months ended June 30, 2025 and 2024, there were no transactions in HiTek Global Inc. and HiTek HK besides minimal capital transactions, professional fee payments and interest income. As of June 30, 2025, the VIEs accounted for 46% and 95% of the Company's total assets and total liabilities, respectively. As of December 31, 2024, the VIEs accounted for 46% and 100% of the Company's total assets and total liabilities, respectively. As of June 30, 2025 and December 31, 2024(audited), $2,328,033 and $726,512 of cash was denominated in RMB, respectively.

***Risks in relation to the VIE structure***

 ****

It is possible the Company's operations and businesses through its VIE could be found by PRC authorities to violate PRC law and regulations prohibiting or restricting foreign ownership of companies that engage in such operations and businesses. While the Company's management considers the possibility of such a finding by PRC regulatory authorities under current law and regulations remote, on January 19, 2015, the Ministry of Commerce of the PRC, or (the "MOFCOM") released on its Website for public comment a proposed PRC law (the "Draft FIE Law") that appears to include VIEs within the scope of entities that could be considered foreign invested enterprises (or "FIEs") that would be subject to restrictions under existing PRC law on foreign investment in certain categories of industry. Specifically, the Draft FIE Law introduces the concept of "actual control" for determining whether an entity is considered to be an FIE. In addition to control through direct or indirect ownership or equity, the Draft FIE Law includes control through contractual arrangements within the definition of "actual control." If the Draft FIE Law is passed by the People's Congress of the PRC and goes into effect in its current form, these provisions regarding control through contractual arrangements could be construed to reach the Company's VIE arrangements, and as a result the Company's VIE could become subject to the current restrictions on foreign investment in certain categories of industry. If a finding were made by PRC authorities, under existing law and regulations or under the Draft FIE Law if it becomes effective, about the Company's operation of certain of its operations and businesses through its VIEs, regulatory authorities with jurisdiction over the licensing and operation of such operations and businesses would have broad discretion in dealing with such a violation, including levying fines, confiscating the Company's income, revoking the business or operating licenses of the affected businesses, requiring the Company to restructure its ownership structure or operations, or requiring the Company to discontinue all or any portion of its operations. Any of these actions could cause significant disruption to the Company's business operations, and have a severe adverse impact on the Company's cash flows, financial position and operating performance.

In addition, it is possible the contracts among WFOE, HiTek and HiTek's shareholders would not be enforceable in China if PRC government authorities or courts found that such contracts contravene PRC laws and regulations or are otherwise not enforceable for public policy reasons. If the Company was unable to enforce these contractual arrangements, the Company would not be able to exert effective control over the VIEs. Consequently, the VIEs' results of operations, assets and liabilities would not be included in the Company's CFS. If such were the case, the Company's cash flows, financial position, and operating performance would be materially adversely affected. The Company's contractual arrangements WFOE, HiTek and HiTek's shareholders are approved and in place. Management believes such contracts are enforceable, and considers the possibility remote that PRC regulatory authorities with jurisdiction over the Company's operations and contractual relationships would find the contracts to be unenforceable.

The Company's operations and businesses rely on the operations and businesses of its VIEs, which hold certain recognized revenue-producing assets. The VIEs also have an assembled workforce, focused primarily on R&D, whose costs are expensed as incurred. The Company's operations and businesses may be adversely impacted if the Company loses the ability to use and enjoy assets held by its VIE.

VIEs are generally entities that lack sufficient equity to finance their activities without additional financial support from other parties or whose equity holders lack adequate decision-making ability. All VIEs and their subsidiaries of the Company must be evaluated to determine the primary beneficiary of the risks and rewards of the VIE. The primary beneficiary is required to consolidate the VIE for financial reporting purposes.

Summary information regarding consolidated VIEs and their subsidiaries is as follows.

---

| | | |
|:---|:---|:---|
|  | **As of <br> June 30,<br> 2025** | **As of<br> December 31,<br> 2024** |
|  | **(Unaudited)** | |
| Total current assets | $13712576 | $13362125 |
| Total non-current assets | 6763219 | 7356012 |
| Total Assets | $20475795 | $20718137 |
| Total Liabilities | $6668610 | $6701376 |

---

---

| | | |
|:---|:---|:---|
|  | **Six Months Ended June 30,** | **Six Months Ended June 30,** |
|  | **2025** | **2024** |
|  | **(Unaudited)** | **(Unaudited)** |
| Revenues | $737904 | $1823568 |
| Net (loss) income | $(469268) | $461348 |

---

---

| | | |
|:---|:---|:---|
|  | **Six Months Ended June 30,** | **Six Months Ended June 30,** |
|  | **2025** | **2024** |
|  | **(Unaudited)** | **(Unaudited)** |
| Net cash provided by operating activities | $1844037 | $4585904 |
| Net cash used in investing activities | $(275763) | $(1869143) |

---

**Use of Estimates and Assumptions**

The preparation of the unaudited condensed CFS in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed CFS and the reported amounts of revenues and expenses during the reporting period.

Significant accounting estimates reflected in the Company's unaudited condensed CFS include allowance for doubtful accounts, inventory obsolescence, deferred taxes, and the useful lives of property and equipment. Since the use of estimates is an integral component of the financial reporting process, actual results could differ from those estimates.

**Fair Values of Financial Instruments**

The U.S. GAAP regarding fair value ("FV") of financial instruments and related FV measurements define FV, establish a three-level valuation hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring FV.

The three levels of inputs are defined as follows:

● Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets

● Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liabilities, either directly or indirectly, for substantially the full term of the financial instrument.

● Lev el 3 inputs to the valuation methodology are unobservable.

ASC 825-10 "Financial Instruments", allows entities to measure certain financial assets and liabilities at FV (FV option). The FV option may be elected on an instrument-by-instrument basis and is irrevocable, unless a new election date occurs. If the FV option is elected for an instrument, unrealized gains and losses for that instrument are reported in earnings at each subsequent reporting date. The Company did not elect to apply the FV option to any outstanding instruments.

The carrying amounts in the consolidated balance sheets for cash, accounts receivable, accounts receivable – related party, advances to suppliers, deferred offering costs, prepaid expenses and other, accounts payable and accrued liabilities, income taxes payable, VAT and other taxes payable, and due to related parties approximate their FV based on the short-term maturity of these instruments.

The Company's investments measured at FV on a recurring basis consist of trading securities and held-to-maturity debt securities. The valuation for the Level 1 position is based on quoted prices in active markets. For detailed information, please see "NOTE 3 – INVESTMENTS."

**(Loss) Earnings Per Share** ("EPS")

Basic EPS is computed by dividing net income by the weighted-average number of ordinary shares outstanding during the period. Diluted EPS is computed by dividing net (loss) income by the weighted-average number of ordinary shares and dilutive potential ordinary shares outstanding during the period.

For the six months ended June 30, 2025 and 2024, there were no other contracts to issue options, warrants or conversion rights, which would have a dilutive effect on EPS.

**Cash**

Cash consists of cash on hand and in banks. The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. The Company maintains cash with financial institutions in the PRC. As of June 30, 2025 and December 31, 2024 (audited), cash balances held in PRC banks are uninsured. The Company has not experienced any losses in bank accounts during the six months ended June 30, 2025 and 2024.

**Concentrations of Credit Risk**

Currently, all of the Company's operations are in the PRC. Accordingly, the Company's business, financial condition and results of operations may be influenced by the political, economic, and legal environment in the PRC, and by the state of the PRC's economy. The Company's operations in the PRC are subject to specific considerations and significant risks not typically associated with companies in the United States of America. The Company's results may be adversely affected by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things.

Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash, short-term investments, trade accounts receivable, and accounts receivable from related parties and advances to suppliers. A portion of the Company's sales are credit sales which are to the customers whose ability to pay is dependent upon the industry economics in these areas; however, concentrations of credit risk with respect to trade accounts receivable is limited due to generally short payment terms. The Company also performs ongoing credit evaluations of its customers to help further reduce credit risk.

**Investments**

Short-term investments consist of trading stock and debt securities, which include trading securities and held-to-maturity debt securities issued by commercial banks with maturity within one year. Considering the Company's short-term investments are liquid in nature, changes in the FV and related transactions of short-term investments are presented as operating activities in the Company's consolidated statements of cash flows. Long-term investments include mutual funds and wealth management products with maturity over one year. The Company accounts for investments in accordance with FASB ASC Topic 320 "Investments — Debt and Equity Securities." Dividend and interest income, including amortization of the premium and discount arising at acquisition, for all categories of investments in securities is included in unaudited condensed Consolidated Statements of Operations. Net realized and unrealized holding gains and losses for investments are included in unaudited condensed Consolidated Statements of Operations.

If a security is acquired with the intent of selling it within days, it is classified as a trading security. The Company classifies investments in trading stock and mutual funds as trading securities. Unrealized holding gains and losses for trading securities are included in the statements of operations and comprehensive loss.

If the Company has intent and ability to hold to maturity, the security is classified as a held-to-maturity security. The Company classifies investments in wealth management products as held-to-maturity securities as it intends to hold these investments until maturity. The investments in wealth management products are valued at carrying value, which approximates the amortized cost. For individual securities classified as held-to-maturity securities, the Company evaluates whether a decline in FV below the amortized cost basis is other-than-temporary, in accordance with ASC 320. Other-than-temporary impairment loss is recognized in earnings equal to the excess of the debt security's amortized cost basis over its FV at the balance sheet date of the reporting period for which the assessment is made.

**Expected Credit Losses**

The Company maintains an allowance for credit losses in accordance with ASC 326 and records the allowance for credit losses as an offset to assets such as accounts receivable, etc., and the estimated credit losses charged to the allowance are classified as general and administrative expenses in the consolidated statements of operations and comprehensive income loss. The Company assesses collectability by reviewing receivables on a collective basis where similar characteristics exist, primarily based on the size and nature of specific customers' receivables. In determining the amount of the allowance for credit losses, the Company considers historical collectability based on past due status, the age of the receivable balances, credit quality of the Company's customers based on ongoing credit evaluations, current economic conditions, reasonable and supportable forecasts of future economic conditions, and other factors that may affect the Company's ability to collect from customers. Bad debts are written off as incurred.

**Advances to Suppliers**

Advances to suppliers are amounts prepaid to suppliers for purchases of inventories and outsourced software services. In evaluating the recoverability of such advances, the Company mainly considers the age of the balance and the ability of the suppliers to perform the related obligations.

**Inventories**

Inventories are stated at the lower of cost (weighted average basis) or net realizable value. The methods of determining inventory costs are used consistently from year to year. Allowance for inventory obsolescence is provided when the market value of certain inventory items is lower than the cost.

**Property, Equipment and Software**

Property, equipment and software are carried at cost and depreciated on a straight-line basis over their estimated useful lives of the assets. The cost of repairs and maintenance is expensed as incurred; major replacements and improvements are capitalized. When assets are retired or disposed of, the cost and accumulated depreciation and amortization are removed from the accounts, and any resulting gains or losses are included in the statement of operations in the year of disposition. The Company examines the possibility of decreases in the value of property, equipment and software, when events or changes in circumstances reflect the fact that their recorded value may not be recoverable.

Estimated useful lives are as follows, taking into account the assets' estimated residual value:

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| | |
|:---|:---|
| **Classification** | **Estimated useful lives** |
| Furniture and office equipment | 2-3 years |
| Computer equipment | 2-3 years |
| Transportation equipment | 5 years |
| Buildings and improvements | 5-20 years |
| Software | 3 years |

---

**Impairment of Long-lived Assets**

In accordance with ASC Topic 360, the Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The amount of impairment is measured as the difference between the asset's estimated FV and its book value. Based on management's impairment analyses, the Company did not record any impairment charge during the six months ended June 30, 2025 and 2024.

**Revenue Recognition**

The Company follows ASU 2014-09, Topic 606, "Revenue from Contracts with Customers" and its related amendments (collectively referred to as "ASC 606") for its revenue recognition accounting policy that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. In accordance with ASC 606, revenue is recognized when all of the following five steps are met: (i) identify the contract(s) with the customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations; (v) recognize revenue when (or as) each performance obligation is satisfied.

The Company generates revenues primarily from three sources: (1) hardware sales, (2) software sales, and (3) tax devices and services. The Company recognizes revenue when performance obligations under the terms of a contract with its customers are satisfied. This occurs when the control of the goods and services have been transferred to the customer.

***Hardware sales***

Hardware revenues are primarily from the sale of computer and network hardware to end users. The products include computers, printers, internet cables, certain internet servers, cameras and monitors. Sales of hardware have a single performance obligation. The Company recognizes revenue when ownership is transferred to end customers. The Company's revenue from sales of hardware is reported on a gross basis since the Company is primarily obligated in the transaction, bears inventory and credit risk and has discretion to establish prices.

***Software sales***

HiTek also makes software sales and focuses on perpetual license sales for a self-developed software Communication Interface System ("CIS"). CIS is based on LINUX, which is a general embedded interface system used by petrochemical and coal companies. The system is used to communicate the RCTX-X module, collect the work diagram, the electricity diagram, the pressure temperature and other measures, and can extract the data and import it to the software of the windows platform to display analysis.

Performance Obligations - Software contracts with customers include multiple performance obligations such as sale of software license, installation of software, operation training service and warranty. The installation and operation training are essential to the functionality of the software which are provided to the clients prior to the acceptance of the software. The Company provides a-year warranty which mainly is for telephone supports. The Company estimates that costs associated with warranty are de minimis to the overall contract. Therefore, the Company does not allocate transaction price. The Company recognizes revenue from software sales when the software is accepted by the customer.

***Tax Devices and Services***

 ****

Before January 21, 2021, all VAT general taxpayer businesses in China were required to purchase the Anti-Counterfeiting Tax Control System ("ACTCS" or Golden Tax Disk or GTD) tax devices to issue the VAT Invoice and for quarterly VAT filing. HiTek is authorized to carry out the implementation of ACTCS specialty hardware retailing. The price of GTD and related supporting services is determined by the National Development and Reform Commission. From January 21, 2021, new taxpayers can receive electronic tax control Ukey for free from the tax authority. HiTek could provide supporting services to the new taxpayers. From 2023, Xiamen Taxation Bureau implemented the use of electronic invoices to replace the traditional tax control system. Enterprises can use a free electronic invoice platform provided by the tax bureau, which has had a significant impact on the Company's business. Since June, 2024, the Company cooperated with a third party to popularize an electronic tax control platform to replace electronic invoice platform provided by the tax bureau.

Performance Obligations - Tax devices and services contracts with customers include multiple performance obligations such as delivery of products, installation and after-sales supporting services, tax control system risk investigation service, and tax invoicing management service, such as training service on issuing electronic invoice, complete tax declaration automatically and back up data online.

Revenue from the sales of GTD devices is recognized when ownership is transferred to end customers. The Company provides after-sales supporting services for tax device and tax invoicing management service, charging the service fee on an annual basis because the service period is usually one year. Revenue from its service is recognized as the services are performed and amounts are earned, using the straight-line method over the term of the related services agreement. The Company also charges a one-time service charge for each investigation request. Revenue from tax control system risk investigation service is recognized when the services are performed. Revenue is recognized based on each performance obligation's standalone selling price that is sold separately and charged to customers at contract inception.

The Company's revenue is reported on a gross basis since the Company is primarily obligated in the transaction, is subject to inventory and credit risk. The revenue is as follows:

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| | | |
|:---|:---|:---|
|  | **Six Months Ended June 30,** | **Six Months Ended June 30,** |
|  | **2025** | **2024** |
| Hardware | $616929 | $747378 |
| CIS Software | - | 822444 |
| Tax devices and service | 124612 | 263768 |
| **Total Revenues** | $**741541** | $**1833590** |

---

***Contract balances***

Prepayments from customers prior to the services being performed are recorded as deferred revenue. Deferred revenue consists of annual service fees for GTD and tax invoicing management service. The Company recognizes the service fees as revenue on a straight-line basis in accordance with the service periods.

**Deferred Revenue**

Deferred revenue consists of the annual service fees for GTD received from customers for which the services have not yet been performed. The Company recognizes the service amount as revenue on a straight-line basis in accordance with the service periods. For the six months ended June 30, 2025 and 2024, the Company recognized revenue of $55,720 and $164,104 respectively, that was included in deferred revenue at the beginning of each period.

**Cost of Revenues**

Cost of revenues is comprised of (i) the direct cost of our hardware products purchased from third parties; (ii) logistics-related costs, which include product packaging and freight-in charges; (iii) third-party royalties for the GTD; and (iv) compensation for employees who handle the products and other costs necessary to provide the services to our customers.

**Selling Expenses**

Selling expenses consists of shipping and handling costs for products sold and advertising and marketing expenses for promotion of our products. The Company generally expenses sales commissions as incurred because the amortization period would have been one year or less.

**General and Administrative Expenses**

General and administrative ("G&A") expenses consist of salary and welfare for our general administrative and management staff, facilities costs, depreciation and amortization, professional fees, accounting fees, meals and entertainment, utilities, expenses for public offering, and other miscellaneous expenses incurred in connection with general operations. All depreciation and amortization was recorded in G&A expenses because fixed assets are mainly for sales and administrative purposes.

**Government Subsidies**

Subsidies are given by the government to mainly support the Company for the increase in production and social insurance compensation for rural laborers. Subsidies are recognized as government subsidies income in the consolidated statements of operations when received.

**Income Taxes**

The Company is governed by the Income Tax Law of the PRC. The Company accounts for income taxes using the asset/liability method prescribed by ASC 740, "Accounting for Income Taxes." Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in effect in the period in which the differences are expected to reverse. The Company records a valuation allowance to offset deferred tax assets if, based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rates is recognized as income or loss in the period that includes the enactment date.

The Company applies ASC 740-10-50, "Accounting for Uncertainty in Income Taxes," which provides clarification related to the process associated with accounting for uncertain tax positions recognized in the Company's CFS. Audit periods remain open for review until the statute of limitations has passed. The completion of review or the expiration of the statute of limitations for a given audit period could result in an adjustment to the Company's liability for income taxes. Any such adjustment could be material to the Company's results of operations for any given quarterly or annual period based, in part, upon the results of operations for the given period.

**Value Added Taxes ("VAT")**

VAT is reported as a deduction of revenue when incurred. Entities that are VAT general taxpayers are allowed to offset qualified input VAT paid to suppliers against their output VAT liabilities. Net VAT balance between input VAT and output VAT is recorded in taxes payable.

**Foreign Currency Translation**

The functional currency of the Company's operations in the PRC is the Chinese Yuan or Renminbi ("RMB"). The CFS are translated to U.S. dollars using the period end rates of exchange for assets and liabilities, equity is translated at historical exchange rates, and average rates of exchange (for the period) are used for revenues and expenses and cash flows. As a result, amounts relating to assets and liabilities reported on the statements of cash flows may not necessarily agree with the changes in the corresponding balances on the balance sheets. Translation adjustments resulting from the process of translating the local currency financial statements into U.S. dollars are included in determining comprehensive income / loss. Transactions denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing on the transaction dates. Assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing at the balance sheet date with any transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred.

All of the Company's revenue transactions are transacted in its functional currency. The Company does not enter into any material transaction in foreign currencies. Transaction gains or losses have not had, and are not expected to have, a material effect on the results of operations of the Company.

The exchange rates as of June 30, 2025 (unaudited) and December 31, 2024 and for the six months ended June 30, 2025 and 2024 (unaudited) are as follows:

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| | | | | |
|:---|:---|:---|:---|:---|
| | | | **Six months Ended June 30,** | **Six months Ended June 30,** |
| | **June 30,**<br>**2025** | **December 31,**<br>**2024** | **2025** | **2024** |
| <br>**Foreign currency** | **Balance Sheet** | **Balance Sheet** | **Profits/Loss** | **Profits/Loss** |
| **RMB:1USD** | 7.1636 | 7.2993 | 7.2526 | 7.2071 |

---

**Comprehensive Loss**

Comprehensive loss is comprised of net (loss) income and all changes to the statements of shareholders' equity. For the Company, comprehensive loss for the six months ended June 30, 2025 and 2024 consisted of net (loss) income and unrealized gain/loss from foreign currency translation adjustment.

**Related Parties**

A party is considered related to the Company if it directly or indirectly or through one or more intermediaries, controls, is controlled by, or is under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. A party which can significantly influence the management or operating policies of the transacting parties or if it has an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests is also a related party.

**Segment reporting**

ASC Topic 280, "Segment Reporting," requires use of the management approach model for segment reporting. The Company identifies operating segments as components of the consolidated operations for which discrete financial information is available and is regularly reviewed by the chief operating decision maker("CODM"), in making decisions regarding resource allocation and evaluating financial performance. The Company defines the term CODM to be its chief executive officer. The Company determined it operates in one operating and reportable segment. The CODM reviews financial information presented only on a consolidated basis and uses this information for purposes of allocating resources and evaluating financial performance.

The significant segment expenses and other segment items that are provided to the CODM align with expense information that is included in the Company's consolidated income statement and notes thereto.

The measure of segment assets is reported in the balance sheet as total consolidated assets. The Company's long-lived assets are located in China.

**Warrants classification**

When the Company issues freestanding instruments, it first analyzes the provisions of ASC Topic 480, *Distinguishing Liabilities from Equity* ("ASC 480") in order to determine if the instrument should be classified as a liability, with subsequent changes in FV recognized in the statements of comprehensive loss in each period. If the instrument is not within the scope of ASC 480, the Company further analyzes the provisions of ASC Topic 815, *Derivatives and Hedging* ("ASC 815-40") in order to determine if the instrument is considered indexed to the entity's own stock, and qualifies for classification within equity. If the provisions of ASC 815-40 for equity classification are not met, the instrument will be classified as a liability, with subsequent changes in FV recognized in the statements of comprehensive loss in each period.

**Recent Accounting Pronouncements**

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures, which requires disaggregated information about an entity's effective tax rate reconciliation and additional discloses on income taxes paid. The new requirements are effective for annual periods beginning after December 15, 2024. The guidance is to be applied prospectively, with an option for retrospective application. The Company is currently evaluating the impact of this new guidance on disclosures within its CFS.

In November 2024, the FASB issued ASU 2024-03 on Disaggregation of Income Statement Expenses that enhances disclosure of certain costs and expenses to provide enhanced transparency into the expenses presented in the income statement. The updates are effective for annual periods beginning after December 15, 2026. The Company is still assessing the impact of the disclosure of this standard on its CFS.

The Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on its CFS.

**NOTE 3 – INVESTMENTS**

Short-term investments consist of trading stock and debt securities, which include trading securities and held-to-maturity debt securities issued by commercial banks with maturity within one year. Long-term investments consist of wealth management products with maturity over one year. Investments consisted of the following.

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **June 30,<br> 2025** | **Quoted prices<br> in active<br> markets<br> (level 1)** | **Significant<br> other<br> observable<br> inputs<br> (level 2)** | **Significant<br> other<br> unobservable<br> inputs<br> (level 3)** |
|  | **(Unaudited)** | | | |
| **Short-term investments** | | | | |
| Trading securities | $3019240 | $3019240 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; - | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; - |
| Held-to-maturity debt securities | 18581487 | 18581487 | - | - |
| Total | $21600727 | $21600727 | $- | $- |

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31,<br> 2024** | **Quoted prices<br> in active<br> markets<br> (level 1)** | **Significant<br> other<br> observable<br> inputs<br> (level 2)** | **Significant<br> other<br> unobservable<br> inputs<br> (level 3)** |
| **Short-term investments** | | | | |
| Trading securities | $5355552 | $5355552 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; - | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; - |
| Held-to-maturity debt securities | 17576988 | 17576988 | - | - |
| Total | $22932540 | $22932540 | $- | $- |

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Net investment gain for the six months ended June 30, 2025 and 2024 consists of the following:

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| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
|  | **(Unaudited)** | **(Unaudited)** |
| **Gain (loss) from sales of short-term investments:** |  |  |
| Trading securities | $24849 | $(3584) |
| Held-to-maturity debt securities | 15616 | - |
| **Unrealized gain of short-term investments:** |  |  |
| Trading securities | 41998 | 25305 |
| Held-to-maturity debt securities | - | 166383 |
| **Unrealized gain of long-term investments:** |  |  |
| Held-to-maturity debt securities | - | 40000 |
| Net investment gain | $82463 | $228104 |

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**NOTE 4 – ACCOUNTS RECEIVABLE, NET**

At June 30, 2025 and December 31, 2024, accounts receivable, net consisted of the following.

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| | | |
|:---|:---|:---|
|  | **June 30,**<br> **2025** | **December 31,**<br> **2024** |
|  | **(Unaudited)** | |
| Accounts receivable | $1765420 | $1511404 |
| Less: allowance for expected credit losses | (616640) | (125643) |
| Accounts receivable, net | $1148780 | $1385761 |
| Non-current accounts receivable | $986752 | $2227089 |

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The following table describes the movements in the allowance for expected credit losses during the six months ended June 30, 2025 and 2024.

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| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
|  | **(Unaudited)** | **(Unaudited)** |
| Balance at December 31, | $125643 | $160855 |
| Provision for expected credit losses | 482621 | 7925 |
| Foreign exchange difference | 8376 | (3835) |
| Balance at June 30 (Unaudited) | $616640 | $164945 |

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**NOTE 5 – INVENTORIES, NET**

At June 30, 2025 and December 31, 2024, inventories consisted of the following.

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| | | |
|:---|:---|:---|
|  | **June 30,<br> 2025** | **December 31,<br> 2024** |
|  | **(Unaudited)** | |
| Purchased goods | $161833 | $171227 |
| Less: reserve for obsolete inventories | (20953) | (16756) |
| Total | $140880 | $154471 |

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The following table describes the movements in the reserve for obsolete inventories during the six months ended June 30, 2025 and 2024.

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
|  | **(Unaudited)** | **(Unaudited)** |
| Balance at December 31, | $16756 | $17234 |
| Reserve for obsolete inventories | 3832 | - |
| Foreign exchange difference | 365 | (404) |
| Balance at June 30 (Unaudited) | $20953 | $16830 |

---

Inventories include computer, network hardware, and GTDs. The Company reviews its inventories periodically to determine if any reserves are necessary for potential obsolescence or if a write-down is necessary if the carrying value exceeds net realizable value. The Company established a 100% reserve for its GTDs inventory as of June 30, 2025 and December 31, 2024 in light of the introduction of the free electronic invoice platform by the tax bureau in 2023.

**NOTE 6 – PREPAID EXPENSES AND OTHER CURRENT ASSETS**

At June 30, 2025 and December 31, 2024, prepaid expenses and current assets consisted of the following.

---

| | | |
|:---|:---|:---|
|  | **June 30,<br> 2025** | **December 31,<br> 2024** |
|  | **(Unaudited)** | |
| Interest receivable (1) | $391675 | $434288 |
| Deposits (2) | - | 1010000 |
| Other receivables, net (3) | 6829 | 62009 |
| Total | $398504 | $1506297 |

---

&nbsp;&nbsp;&nbsp;&nbsp;(1) Interest receivable primarily consists of interest from loans to third parties and from investments.

&nbsp;&nbsp;&nbsp;&nbsp;(2) On March 11, 2024, the Company and Jia Yuanbin, sole shareholder of Viva Champion Limited ("Viva"), executed a letter of intent for a possible acquisition of the 100% equity interest in Viva that was held by Jia Yuanbin (the "LOI"). In accordance with the LOI, the Company paid a refundable deposit of $1,010,000 on April 15, 2024 to HK Jrui Trade Co Limited ("HK Jrui") as requested by Jia Yuanbin. In March 2025, Viva refunded the deposit due to the failed acquisition.

&nbsp;&nbsp;&nbsp;&nbsp;(3) Other receivables primarily consist of reserve funds and social security.

**NOTE 7 – LOANS RECEIVABLE**

At June 30, 2025 and December 31, 2024, loans receivable consisted of the following.

---

| | | |
|:---|:---|:---|
|  | **June 30,<br> 2025** | **December 31,<br> 2024** |
|  | **(Unaudited)** | |
| Guangxi Beihengda Mining Co., Ltd. (1) | $5165001 | $5068979 |
| Beijing Liansheng Innovation Technology Co., Ltd (2) | 279189 | 273999 |
| Guangzhou Ruilide Information System Co., Ltd (3) | 279189 | - |
| Total loans receivable | 5723379 | 5342978 |
| Less: current portion | 558378 | 958996 |
| Loan receivable - non current | $5165001 | $4383982 |

---

(1) On January 21, 2022, March 28, 2022 and June 14, 2022, the Company
made three loans of RMB30,000,000 ($4,187,839), RMB3,000,000 ($418,784) and RMB7,000,000 ($977,162) to a third party, which were restricted
for its operating activities, carrying interest at 12%. The RMB30,000,000 loan was extended for three years to January 21, 2028. The RMB7,000,000
loan was extended for three years to June 14, 2028. The RMB3,000,000 loan was repaid in August 2022 with interest of RMB120,000 ($16,751).
The change in the carrying value of these outstanding loans from $5,068,979 in 2024 to $5,165,001 in 2025 was due mainly to currency translation.
Pursuant to a mining right pledge agreement dated August 5, 2022 between HiTek, as representative of the Lenders, and the Borrower, these
three loans are secured by the Borrower's coal mining permit issued by Bobai County Natural Resources Bureau, which grants the Borrower
a 20-year mining right for a building granite mine in Daguang Village, Shuiming Town, Bobai County, Guangxi Province, for production of
1.306 million cubic meters per year.

(2) On
January 17, 2024, the Company provided a loan of RMB2,000,000 ($279,189) with 1.0% per month interest to Beijing Liansheng Innovation
Technology Co., Ltd for six months, maturing on July 16, 2024. The loan was restricted for its operating activities and was extended
for one year to January 16, 2026.

(3) On
April 29, 2025, the Company provided a loan of RMB3,000,000 ($418,784) with 1.0% per month interest to Guangzhou Ruilide Information
System Co., Ltd for two months, maturing on June 28, 2025. The loan was restricted for its operating activities. The RMB1,000,000 ($139,595)
loan was repaid as of June 30, 2025, a repayment of RMB500,000 ($69,797) on July 1, 2025. The remaining RMB1,500,000 ($209,392) loan
was extended for four months to October 29, 2025.

Interest income for the six months ended June 30, 2025 and 2024 was $313,590 and $554,700, respectively.

**NOTE 8 – PROPERTY, EQUIPMENT AND SOFTWARE, NET**

At June 30, 2025 and December 31, 2024, property, equipment and software consisted of the following.

---

| | | |
|:---|:---|:---|
|  | **June 30, <br> 2025** | **December 31,<br> 2024** |
|  | **(Unaudited)** | |
| Office furniture | $48316 | $47418 |
| Transportation equipment | 163293 | 160257 |
| Building and improvements | 580930 | 570130 |
| Software | 1650391 | 1619709 |
|  | 2442930 | 2397514 |
| Less: accumulated depreciation and amortization | (1831464) | (1652573) |
|  | $611466 | $744941 |

---

**NOTE 9 –TAXES PAYABLE**

At June 30, 2025 and December 31, 2024, taxes payable consisted of the following.

---

| | | |
|:---|:---|:---|
|  | **June 30,<br> 2025** | **December 31,<br> 2024** |
|  | **(Unaudited)** | |
| Value-added tax | $1208054 | $1178587 |
| Corporate tax | 364456 | 357680 |
| Other taxes | 145652 | 144209 |
| Total | $1718162 | $1680476 |

---

**NOTE 10 – RELATED PARTY TRANSACTIONS**

The table below sets forth the major related parties and their relationships with the Company as of June 30, 2025.

---

| | |
|:---|:---|
| **Name of related parties** | **Relationship with the Group** |
| Yin Shenping (Mr. Yin) | Chairman of the Board |
| Beijing Baihengda Petroleum Technology Co., Ltd (Beijing Baihengda) | Mr. Yin holds 10% equity interest in Beijing Baihengda |

---

The following related party balances are non-interest bearing:

---

| | | |
|:---|:---|:---|
|  | <br> **As of<br> June 30,<br> 2025** | **As of<br> December 31,** <br> **2024** |
|  | **(Unaudited)** | |
| Amounts due to related parties: |  |  |
| Yin Shenping (1) | $16751 | $- |
|  | $16751 | $- |
| Loan payable – related party: |  |  |
| Beijing Baihengda (2) | $2582500 | $2534490 |
|  | $2582500 | $2534490 |

---

(1) The
balance was a rent payable to Mr. Yin.

(2) Mr. Yin became a 10% equity owner in Beijing Baihengda on March 18,
2025. For financial statements presentation purposes, the original loan payable was reclassified to loan payable - related party. See
NOTE 12 – LOAN PAYABLE – RELATED PARTY.

**NOTE 11 – ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES**

At June 30, 2025 and December 31, 2024, accrued expenses and other current liabilities consisted of the following.

---

| | | |
|:---|:---|:---|
|  | **June 30,<br> 2025** | **December 31, <br> 2024** |
|  | **(Unaudited)** | |
| Payroll | $114190 | $119407 |
| Other | 5347 | 11284 |
| Total | $119537 | $130691 |

---

**NOTE 12 – LOAN PAYABLE – RELATED PARTY**

At June 30, 2025 and December 31, 2024, loan payable – related party, consisted of the following.

---

| | | |
|:---|:---|:---|
|  | **June 30,<br> 2025** | **December 31, <br> 2024** |
|  | **(Unaudited)** | |
| Loan payable, current | $- | $479498 |
| Non-current loan payable | 2582500 | 2054992 |
| Total | $2582500 | $2534490 |

---

On January 21, March 28 and June 14, 2022, the Company entered into three loans of RMB15,000,000 ($2,093,919), RMB1,500,000 ($209,392) and RMB3,500,000 ($488,581) from Beijing Baihengda, carrying interest at 12%. The RMB15,000,000 ($2,093,919) loan was extended for three years and will mature on January 21, 2028. In May 2025, the RMB3,500,000 ($488,581) loan was extended and will mature on June 14, 2028. The RMB1,500,000 ($209,392) loan was repaid prior to December 31, 2022. The change in the carrying value of these outstanding loans from $2,534,490 in 2024 to $2,582,500 in 2025 was due mainly to currency translation.

On March 18, 2025, Mr. Yin became a 10% equity owner in Beijing Baihengda. For financial statements presentation purposes, the original loan payable was reclassified to loan payable - related party as of June 30, 2025.

The interest expense for the six months ended June 30, 2025 and 2024 was $153,049 and $154,015. Respectively.

**NOTE 13 –ORDINARY SHARES**

In April 2023, the Company issued 3,404,685 Ordinary Shares, of which 3,200,000 were in the IPO and 204,685 in over-allotment, at $5 per share with net proceeds of approximately $15.1 million.

On February 5, 2024, the 2024 annual general meeting of shareholders adopted resolutions that the issued 14,392,364 ordinary shares of par value of US$0.0001 each were re-designated and re-classified into 6,200,364 Class A ordinary shares of par value US$0.0001 each with one vote per share (the "Class A Ordinary Shares") and 8,192,000 Class B ordinary shares of par value US$0.0001 each with 15 votes per share (the "Class B Ordinary Shares") on a one for one basis.

**NOTE 14 –WARRANTS**

On July 29, 2024, the Company closed a private placement of (a) 14,907,000 Class A ordinary shares, par value $0.0001 per share, and (b) warrants to purchase up to 14,907,000 Class A ordinary shares (the "Private Placement") pursuant to the Securities Purchase Agreement dated June 11, 2024, between the Company and the purchasers. The warrants are exercisable upon issuance with a term of two years at $0.55 per share. The warrants also contain a cashless exercise provision. In connection with the Private Placement, the Company collected $8,200,000 from the purchasers in June 2024 to purchase Class A ordinary shares and filed a registration statement on August 22, 2024 to register the resale of the Class A ordinary shares issued and Class A ordinary shares to be issued upon exercise of the warrants. Since the warrants are indexed to the Company's own stock, they are treated as equity for accounting purposes.

The summary of warrant activities for the six months ended June 30, 2025 was as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **Ordinary<br> Shares<br> Number<br> Outstanding** | **Weighted<br> Average<br> Exercise<br> Price** | **Contractual<br> Life in<br> Years** |
| Outstanding as of December 31, 2024 | 14907000 | $0.55 | 2.0 |
| Granted | - | - |  |
| Exercises | - | - |  |
| Expired | - | - | - |
| Warrants Outstanding as of June 30, 2025 | 14907000 | 0.55 | 1.5 |
| Warrants Exercisable as of June 30, 2025 | 14907000 | $0.55 | 1.5 |

---

**NOTE 15 – INCOME TAXES**

The entities within the Company file separate tax returns in the respective tax jurisdictions in which they operate.

***Cayman Islands***

 ****

The Company is a tax-exempt entity incorporated in Cayman Islands.

***Hong Kong***

HiTek Hong Kong Limited was incorporated in Hong Kong and does not conduct any substantial operations. No provision for Hong Kong profits tax has been made in the CFS as HiTek Hong Kong Limited has no assessable profits for the six months ended June 30, 2025 and 2024.

***PRC***

The Company's PRC operating subsidiary and VIEs, being incorporated in the PRC, are governed by the income tax law of the PRC and are subject to PRC enterprise income tax ("EIT"). The EIT rate of PRC is 25%, which applies to both domestic and foreign invested enterprises. State Administration of Taxation and Ministry of Finance issued a notice related to the tax relief policy of the small- scale enterprises in January 2019. According to the notice, from January 1, 2019 to December 31, 2021, if a small profit-making enterprise had annual taxable income less than or equal to RMB 1 million, only 25% of its annual taxable income will be subject to income tax at a reduced rate of 20%; for those with annual taxable income more than RMB 1 million but less than RMB 3 million, 50% of their annual taxable income will be subject to income tax at the reduced rate of 20%. In April 2021, on the basis of the previous preferential policy, State Administration of Taxation and Ministry of Finance issued a notice stating that, from January 1, 2021 to December 31, 2022, for those with annual taxable income less than or equal to RMB 1 million, only 12.5% of its annual taxable income will be subject to income tax at a reduced rate of 20%. In March 2022, on the basis of the previous preferential policy, State Administration of Taxation and Ministry of Finance further issued a notice stating that, from January 1, 2022 to December 31, 2024, for those with annual taxable income more than RMB 1 million but did not exceed RMB 3 million, 25% of their annual taxable income will be subject to income tax at the same reduced rate of 20%. In March 2023, on the basis of the previous preferential policy, State Administration of Taxation and Ministry of Finance issued a notice stating that, from January 1, 2023 to December 31, 2024, for those with annual taxable income less than or equal to RMB 1 million, 25% of their annual taxable income will be subject to income tax at the same reduced rate of 20%. In August 2023, State Administration of Taxation and Ministry of Finance issued a notice stating that the above preferential policies were extended to December 31, 2027.

The Company's (loss) income before income taxes includes the following for the six months ended June 30.

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
|  | **(Unaudited)** | **(Unaudited)** |
| Non-PRC operations | $(445352) | $(328168) |
| PRC operations | (571639) | 620407 |
| Total (loss) income before income taxes | $(1016991) | $292239 |

---

Income tax expense was comprised of the following for the six months ended June 30.

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
|  | **(Unaudited)** | **(Unaudited)** |
| Current tax expense | $- | $799 |
| Deferred tax (benefit) expense | (100882) | 169778 |
| Total income tax (benefit) expense | $(100882) | $170577 |

---

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The cumulative tax effect at the expected rate of 25% of significant items comprising the net deferred tax amount is at June 30, 2025 and December 31, 2024 as follows.

---

| | | |
|:---|:---|:---|
|  | **June 30,<br> 2025** | **December 31,<br> 2024** |
|  | **(Unaudited)** | |
| **Deferred tax assets** | | |
| Net operating loss | $88939 | $87285 |
| Deferred revenue | 10136 | 13496 |
| Unbilled cost | 450345 | 441973 |
| Unbilled interest expenses | 37376 | 36682 |
| Depreciation | 7421 | 5586 |
| Software amortization | 254343 | 224254 |
| Allowance for doubtful accounts | 230741 | 106569 |
| Inventories obsolescence | (5507) | (6408) |
| Unrealized losses on trading securities | 1745 | 1712 |
| Accrued Bonus | 44510 | 43682 |
| Other | 51787 | 46771 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total deferred tax assets | 1171836 | 1001602 |
| Valuation allowance | (15159) | (14878) |
| &nbsp;&nbsp;Total deferred tax assets, net | 1156677 | 986724 |
| **Deferred tax liabilities** |  |  |
| Unbilled revenue | (2226908) | (2188848) |
| Unbilled interest income | (365574) | (318899) |
| Deferred government subsidiary income | (41286) | (40519) |
| Unrealized gain on short-term investment | (37976) | (25575) |
| Other | (11994) | (11792) |
| &nbsp;&nbsp;&nbsp;&nbsp;Total deferred tax liabilities | (2683738) | (2585633) |
| Net deferred tax liabilities, net | $(1527061) | (1598909) |

---

Following is a reconciliation of income tax expense at the effective rate to income tax at the calculated statutory rates for the six months ended June 30.

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
|  | **(Unaudited)** | **(Unaudited)** |
| PRC statutory tax rate | 25.0% | 25.0% |
| Effect of different tax rates in different jurisdictions | (10.9)% | 28.1% |
| Permanent difference | (0.1)% | 4.3% |
| Exemption rendered by local authorities | (4.1)% | 1.0% |
| Effective tax rate | **9.9%** | **58.4%** |

---

***Uncertain Tax Positions***

The Company had no significant unrecognized uncertain tax positions or unrecognized liabilities, interest or penalties associated with unrecognized tax benefit as of and for the six months ended June 30, 2025 and 2024.

**NOTE 16 – CONCENTRATIONS**

***Major Customers***

 **

Details of customers which accounted for 10% or more of the Company's total revenues are as follows.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Six Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** |
|  | **2025** | **2025** | **2024** | **2024** |
|  | **(Unaudited)** | **(Unaudited)** | **(Unaudited)** | **(Unaudited)** |
| Customer A | $39866 | 5% | $397838 | 22% |
| Customer B | - | -% | 424606 | 23% |
| **Total** | $**39866** | **5%** | $**822444** | **45%** |

---

Details of customers which accounted for 10% or more of the Company's accounts receivable are as follows.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **June 30, 2025** | **June 30, 2025** | **December 31, 2024** | **December 31, 2024** |
|  | **(Unaudited)** | **(Unaudited)** | | |
| Customer A | $1506630 | 55% | $1983368 | 53% |
| Customer B | 964320 | 35% | 1425890 | 38% |
| **Total** | $**2470950** | **90%** | $**3409258** | **91%** |

---

***Major Suppliers***

 ****

Details of suppliers which accounted for 10% or more of the Company's purchases are as follows.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Six Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** |
|  | **2025** | **2025** | **2024** | **2024** |
|  | **(Unaudited)** | **(Unaudited)** | **(Unaudited)** | **(Unaudited)** |
| Supplier A | $72358 | 14% | $191133 | 29% |
| Supplier B | 59123 | 11% | 17149 | 3% |
| Supplier C | 43739 | 8% | 79751 | 12% |
| Supplier D | - | -% | 75810 | 11% |
| **Total** | $**175220** | **33%** | $**346694** | **55%** |

---

Details of suppliers which accounted for 10% or more of the Company's accounts payable are as follows.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **June 30, 2025** | **June 30, 2025** | **December 31, 2024** | **December 31, 2024** |
|  | **(unaudited)** | **(unaudited)** | | |
| Supplier B | $22898 | 11% | $8149 | 3% |
| **Total** | $**22898** | **11%** | $**8149** | **3%** |

---

**NOTE 17 – COMMITMENTS AND CONTINGENCY**

***Contingencies***

The Company may be involved in various legal proceedings, claims and other disputes arising from the commercial operations, projects, employees and other matters which, in general, are subject to uncertainties and in which the outcomes are not predictable. The Company determines whether an estimated loss from a contingency should be accrued by assessing whether a loss is deemed probable and can be reasonably estimated. As of June 30, 2025, the Company was not aware of any litigation or proceedings against it.

**NOTE 18 – SUBSEQUENT EVENTS**

The Company performed an evaluation of events and transactions for potential recognition or disclosure through the date on which the CFS are released. The Company is not aware of any material subsequent event other than this disclosed below.

On October 8, 2025, the Company entered into an at-the-market sales agreement, or the Sales Agreement, with AC Sunshine Securities LLC, or the Sales Agent, acting as a sales agent for the offer and sale of shares of Class A Ordinary Shares, par value $0.0001 per share ("Class A Ordinary Shares"), from time to time, having an aggregate offering amount of up to $4,003,458, or up to 2,011,788 Class A Ordinary Shares.

**NOTE 19 – CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY**

Pursuant to Rules 12-04(a), 5-04(c), and 4-08(e)(3) of Regulation S-X, the condensed financial information of the parent company shall be filed when the restricted net assets of consolidated subsidiaries exceed 25 percent of consolidated net assets as of the end of the most recently completed fiscal year. The Company performed a test on the restricted net assets of consolidated subsidiaries in accordance with such rules and concluded they were applicable to the Company as the restricted net assets of the Company's PRC subsidiary and VIEs exceeded 25% of the consolidated net assets of the Company. Therefore, the condensed CFS for the parent company are included herein.

**PARENT COMPANY BALANCE SHEETS**

**(Expressed in U.S. Dollars, except for the number of shares)**

---

| | | |
|:---|:---|:---|
|  | **June 30,<br> 2025** | **December 31, <br> 2024** |
|  | **(Unaudited)** | |
| **ASSETS** | | |
| **Current assets:** | | |
| &nbsp;&nbsp;&nbsp;Cash | $5843809 | $6489424 |
| &nbsp;&nbsp;&nbsp;Short-term investments | 15650000 | 14700000 |
| &nbsp;&nbsp;&nbsp;Advances to suppliers, net | 791780 | - |
| &nbsp;&nbsp;&nbsp;Intercompany receivables | 15000 | 15000 |
| &nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | 54795 | 1293893 |
| &nbsp;&nbsp;&nbsp;**Total current assets** | **22355384** | **22498317** |
| **Non-current assets** |  |  |
| &nbsp;&nbsp;&nbsp;Investments in non-VIE subsidiaries | 13904092 | 14138600 |
| &nbsp;&nbsp;&nbsp;**Total non-current assets** | **13904092** | **14138600** |
| **Total Assets** | $**36259476** | $**36636917** |
| **Liabilities and Shareholders' Equity** |  |  |
| **Current liabilities** |  |  |
| &nbsp;&nbsp;&nbsp;Intercompany payable | $1364251 | $1361997 |
| &nbsp;&nbsp;&nbsp;Advances from customers | 299995 | - |
| **Total current liabilities** | **1664246** | **1361997** |
| **Total Liabilities** | **1664246** | **1361997** |
| **Commitments and Contingencies** | - | - |
| **Shareholders' Equity** |  |  |
| &nbsp;&nbsp;&nbsp;Class A Ordinary Shares, US$0.0001 par value; 431,808,000 shares authorized, 21,107,364 shares issued and outstanding. | 2111 | 2111 |
| &nbsp;&nbsp;&nbsp;Class B Ordinary Shares, US$0.0001 par value; 58,192,000 shares authorized, 8,192,000 shares issued and outstanding. | 819 | 819 |
| &nbsp;&nbsp;&nbsp;Additional paid-in capital | 24920060 | 24920060 |
| &nbsp;&nbsp;&nbsp;Statutory reserve | 836215 | 836215 |
| &nbsp;&nbsp;&nbsp;Retained earnings | 9574949 | 10491058 |
| &nbsp;&nbsp;&nbsp;Accumulated other comprehensive loss | (738924) | (975343) |
| &nbsp;&nbsp;&nbsp;Total Shareholders' Equity | **34595230** | **35274920** |
| **Total Liabilities and Shareholders' Equity** | $**36259476** | $**36636917** |

---

**PARENT COMPANY STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME**

**(Expressed in U.S. Dollars)**

---

| | | |
|:---|:---|:---|
|  | **Six Months Ended June 30,** | **Six Months Ended June 30,** |
|  | **2025** | **2024** |
|  | **(Unaudited)** | **(Unaudited)** |
| **Operating expenses:** |  |  |
| General and administrative | $548003 | $770127 |
| **Total operating expenses** | **548003** | **770127** |
| Operating loss | **(548003)** | **(770127)** |
| **Other income (expense)** |  |  |
| Net investment gain | 15616 | 203675 |
| Interest income | 98813 | 247440 |
| Other expense, net | (11608) | (8145) |
| **Total other income, net** | **102821** | **442970** |
| Share of (loss) income from subsidiaries | **(470927)** | **448819** |
| **Net (loss) income** | $**(916109)** | $**121662** |
| **Comprehensive income** |  |  |
| Net (loss) income | $(916109) | $121662 |
| **Comprehensive (loss) income** | $**(916109)** | $**121662** |
| **(Loss) earnings per ordinary share** |  |  |
| Basic and diluted | $(0.03) | $0.01 |
| **Weighted average number of ordinary shares outstanding** |  |  |
| Basic and diluted | 29299364 | 14392364 |

---

**PARENT COMPANY STATEMENTS OF CASH FLOWS**

**(Expressed in U.S. Dollars)**

---

| | | |
|:---|:---|:---|
|  | **Six Months Ended June 30,** | **Six Months Ended June 30,** |
|  | **2025** | **2024** |
|  | **(Unaudited)** | **(Unaudited)** |
| **Operating activities:** |  |  |
| Net (loss) income | $(916109) | $121662 |
| Adjustments to reconcile net (loss) income to net cash used in operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;Accrued interest income from loans | - | (147835) |
| &nbsp;&nbsp;&nbsp;Net investment gain | 470927 | (652494) |
| &nbsp;&nbsp;&nbsp;Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Advances to suppliers | (791780) | - |
| &nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | 239097 | - |
| &nbsp;&nbsp;&nbsp;Advances from customers | 299995 | - |
| &nbsp;&nbsp;&nbsp;Due to intercompany | 2255 | - |
| **Net cash used in operating activities** | **(695615)** | **(678667)** |
| **Investing activities** |  |  |
| &nbsp;&nbsp;&nbsp;Loans to third parties | - | (1092453) |
| &nbsp;&nbsp;&nbsp;Prepayment from third-party loans | - | 2443523 |
| &nbsp;&nbsp;&nbsp;Purchases of held-to maturity investments | (1650000) | (9500000) |
| &nbsp;&nbsp;&nbsp;Redemption of Held-to-maturity investments | 700000 | - |
| &nbsp;&nbsp;&nbsp;Deposit for acquisition | - | (1010041) |
| &nbsp;&nbsp;&nbsp;Refund of deposit for acquisition | 1000000 | - |
| **Net cash provided by (used in) investing activities** | **50000** | **(9158971)** |
| **Financing activities** |  |  |
| &nbsp;&nbsp;&nbsp;Proceeds from private placement | - | 8200000 |
| **Net cash provided by financing activities** | **-**  | **8200000** |
| **Net decrease in cash** | **(645615)** | **(1637638)** |
| **Cash and equivalents at beginning of period** | 6489424 | 8236065 |
| **Cash and equivalents at end of period** | $**5843809** | $**6598427** |

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## Exhibit 99.2

**Exhibit 99.2**

**HITEK GLOBAL INC. AND SUBSIDIARIES**

**MANAGEMENT'S DISCUSSION AND ANALYSIS OF<br> FINANCIAL CONDITION AND RESULTS OF OPERATIONS**

**June 30, 2025 and 2024**

*The following discussion and analysis should be read in conjunction with our unaudited condensed consolidated financial statements ("CFS") and related notes thereto.*

 

***CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS***

 

*This report contains certain statements that may be deemed "forward-looking statements" within the meaning of United States of America securities laws. All statements, other than statements of historical fact, that address activities, events or developments that we intend, expect, project, believe or anticipate and similar expressions or future conditional verbs such as will, should, would, could or may occur in the future are forward-looking statements. Such statements are based upon certain assumptions and assessments made by our management in light of their experience and their perception of historical trends, current conditions, expected future developments and other factors they believe to be appropriate.*

 

*These statements include, without limitation, statements about our anticipated expenditures, including those for general and administrative expenses; the potential size of the market for our services, future development and/or expansion of our services in our markets, our ability to generate revenues, our ability to obtain regulatory clearance and expectations as to our future financial performance. Our actual results may differ, perhaps materially, from those anticipated in these forward-looking statements as a result of various factors, including: our need and ability to raise additional cash. The forward-looking statements included in this report are subject to a number of additional material risks and uncertainties, including but not limited to the risks described in our filings with the Securities and Exchange Commission.*

 

*The following discussion and analysis of our financial condition and results of operations should be read together with our unaudited condensed CFS and the related notes to those statements included in this filing. In addition to historical financial information, this discussion may contain forward-looking statements reflecting our current plans, estimates, beliefs and expectations that involve risks and uncertainties. As a result of many important factors, our actual results and the timing of events may differ materially from those anticipated in these forward-looking statements.*

 

**Results of Operations**

The following consolidated results of operations include the results of operations of the Company, its wholly owned subsidiary and consolidated VIEs.

Our historical reporting results are not necessarily indicative of the results to be expected for any future period.

***Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024***

 ****

***Revenues for the six months ended June 30, 2025 and 2024:***

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **2025** | **2024** |<br>**Decrease** | **Percentage**<br>**Change** |
| Hardware | $616929 | $747378 | $(130449) | (17.5)% |
| CIS software |  | 822444 | (822444) | (100.0)% |
| Tax devices and service | 124612 | 263768 | (139156) | (52.8)% |
| **Total** | $**741541** | $**1833590** | $**(1092049)** | **(59.6)%** |

---

We have these three revenue streams - hardware sales, CIS software sales, and tax devices and services sales. Decrease in hardware sales was mainly due to decrease in orders from our customers as a result of the sluggish economic environment in the PRC. In light of our plan to develop new products that meet evolving market demands, we expect hardware sales to stabilize in the next 12 months. CIS software sales consist of software sales and services. The decrease in CIS software sales was due mainly to the decrease in sales to large customers that reduced their procurement after they purchased our CIS software in 2024. The Company is the process of negotiating new sales contracts with these large customers, we expect CIS software sales will increase stemming from the execution of new contracts. The decrease in tax devices and service sales was due mainly to Xiamen tax authorities implemented the use of electronic invoices system to replace the traditional tax control system in November, 2022, and the electronic invoices system was formally implemented nationwide on December 1, 2024. We expect tax devices and services sales will increase, as the Company is promoting a new invoice system which is more suitable for enterprises than the free electronic invoice platform currently provided by the tax authorities.

***Cost of revenues and gross margin for the six months ended June 30, 2025 and 2024:***

 ****

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **2025** | **2024** |<br>**Variance** | **Percentage**<br>**Change** |
| Total revenues | $741541 | $1833590 | $(1092049) | (59.6)% |
| Cost of revenues | 567675 | 880180 | (312505) | (35.5)% |
| Gross profit | $173866 | $953410 | $(779544) | (81.8)% |
| Gross margin | **23.4%** | **52.0%** | **(28.6)%** | **-** |

---

 ****

Cost of revenues ("COR") is mainly (i) direct cost of our hardware products purchased from third parties; (ii) logistics-related costs, which primarily include product packaging and freight-in charges; (iii) third-party royalties paid to the Golden Tax Devices ("GTD") (iv) compensation for employees who handle the products and perform Tax invoicing management services and other costs that are necessary for us to provide the services to our customers; and (v) outsourcing costs, which primarily include software outsourcing service cost to third parties.

COR decreased to $567,675 for the six months ended June 30, 2025 from $880,180 for 2024, a decrease of $312,505 or 35.5%. This decrease in COR was due to the decrease in revenue from all three streams.

Our gross profit decreased to $173,866 for the six months ended June 30, 2025 from $953,410 for 2024. Our gross profit as a percentage of revenue decreased to 23.4% for the six months ended June 30, 2025 from 52.0% for 2024. The decrease in gross margin was mainly due to the change in revenue mix in 2025 with no revenue being generated from CIS software sales which has a higher profit margin compared to other revenue streams. The Company expects to focus on projects with high gross profit, such as services for SMEs and software sales, and at the same time, increase the hardware sales to large customers.

***Operating expenses for the six months ended June 30, 2025 and 2024:***

 ****

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **2025** | **2024** |<br>**Variance** | **Percentage**<br>**Change** |
| Selling expenses | $2325 | $9844 | $(7519) | (76.4)% |
| % of revenue | 0.3% | 0.5% | (0.2)% |  |
| General and administrative expenses | 1519128 | 1315420 | 203708 | 15.5% |
| % of revenue | 204.9% | 71.7% | 133.2% | - |
| **Operating expenses** | $**1521453** | $**1325264** | $**196189** | 14.8% |

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<u>Selling Expenses</u>. Selling expenses consist primarily of shipping and handling costs for products sold and advertisement and marketing expenses for promotion of our products. Selling expenses were 0.3% of total revenues for the six months ended June 30, 2025 and 0.5% for 2024. Selling expenses decreased by 76.4% or $7,519 to $2,325 for the six months ended June 30, 2025 from $9,844 in 2024. The decrease in selling expenses was primarily attributable to a reduction in advertising costs. The Company expects the selling expenses will increase due to the Company plans to conduct more marketing activities to attract new customer orders.

<u>General and Administrative Expenses</u>. General and administrative ("G&A") expenses consist primarily of salary and welfare expenses for our administrative and management staff, facilities costs, depreciation, professional fees, accounting fees, director and officers liability insurance and other miscellaneous expenses incurred in connection with general operations. The increase in G&A expenses was mainly due to the increase of provision for expected credit losses of $474,697 resulting from Beijing Yabei Norda's overdue payment of $468,108. We expect our G&A expenses to stabilize or decline in the future as a result of ongoing cost-effectiveness initiatives.

 ****

 **

***Net (loss) income for the six months ended June 30, 2025 and 2024:***

 **

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **2025** | **2024** |<br>**Variance** | **Percentage**<br>**Change** |
| Operating loss | $(1347587) | $(371854) | $(975733) | 262.4% |
| Total other income | 330596 | 664093 | (333497) | (50.2)% |
| (Loss) income before income taxes | (1016991) | 292239 | (1309230) | (448.0)% |
| Income tax benefit (expense) | 100882 | (170577) | 271459 | (159.1)% |
| **Net (loss) income** | $**(916109)** | $**121662** | $**(1037771)** | **(853.0)%** |

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<u>Operating loss</u>. The increase in operating loss in 2025 was primarily due to the decrease in revenues and increase of G&A expenses.

<u>Other income</u>. Other income includes government subsidy income, net investment gain (loss), and interest income and expenses. The decrease was primarily due to the decrease of $145,641 in net investment gain and $143,328 in interest income from loans receivable.

<u>Income tax expense</u>. The decrease in income tax expense was due primarily to the decrease in taxable income.

<u>Net (loss) income</u>. As a result of the factors described above, net loss was $916,109 for the six months ended June 30, 2025, a decrease of $1,037,771 from net income of $121,662 for 2024.

**Liquidity and Capital Resources**

***Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024***

 ****

Our principal sources of liquidity come from cash from operating activities, equity financing and loans. As of June 30, 2025, and December 31, 2024, we had cash of $8,198,325 and $7,236,798, respectively.

<u>Working Capital</u>. Total working capital as of June 30, 2025 was $31,941,572 compared to $31,572,809 as of December 31, 2024. The increase in current assets was mainly due to the increase in cash of $961,527 and advances to suppliers, net of $2,291,417, partially offset by the decrease of short-term investments of $1,331,813, accounts receivable, net of $236,981, inventories, net of $13,591, loans receivable of $400,618, prepaid expenses and other current assets of $1,107,793. The decrease in current liabilities was mainly due to the decrease in accounts payable of $46,769, loans payable of $479,498, deferred revenue of $15,200, accrued expenses and other current liabilities of $11,154, partially offset by the advances from customers of $291,569, taxes payable of $37,686 and due to related parties of $16,751.

<u>Capital Resources and Capital Needs</u>. To date, we have financed our operations primarily through cash flows from operations, third-party loans, stock offering and private placement. With the current market, our management believes it is necessary to enhance collection of outstanding accounts receivables and be cautious on operational decisions and project selection. Our management believes our current operations can satisfy our daily working capital needs. We expect to incur additional capital expenditures for research and development of software, recruiting additional employees, and enhancing our information technology system. We intend to fund these planned expenditures with our operating cash flow and our cash balance, as well as net proceeds received from our initial public offering in April 2023 and private placement in July 2024.

The Company reviews accounts receivable on a periodic basis and records an allowance for expected credit losses when there is doubt as to the collectability of balances. Our management is confident in collecting accounts receivables. The current portion of accounts receivable, net was $1,148,780 and $1,385,761 as of June 30, 2025 and December 31, 2024, respectively.

The Company gives customers different credit periods considering the size of the customer and past credit experience. For large customers such as large-scale oil and coal mine customers, the Company gives a two-year credit period from March 2019 because of these customers' long repayment cycle. Net accounts receivable was $1,932,653 as of June 30, 2025, of which $837,568 was collected as of date of this report.

For IT outsourcing customers, the Company gives 18 months credit period. The accounts receivable, net balance was nil as of June 30, 2025.

For small and medium customers, the Company gives six months credit period. The accounts receivable, net balance was $202,878 as of June 30, 2025.

<u>Off-Balance Sheet Arrangements</u>.

We have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties. In addition, we have not entered into any derivative contracts that are indexed to our own shares and classified as shareholders' equity, or that are not reflected in our financial statements. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. Moreover, we do not have any variable interest in an unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or research and development services with us.

**Cash Flows Analysis** 

***Six Months ended June 30, 2025 Compared to Six Months ended June 30, 2024***

 ****

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| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
|  | **(Unaudited)** | **(Unaudited)** |
| **Net cash provided by operating activities** | $**1153600** | $**754123** |
| **Net cash used in investing activities** | $**(225763)** | $**(11028114)** |
| **Net cash provided by financing activities** | $- | $**8200000** |

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 ****

(a) Operating activities

Net cash provided by operating activities was $1,153,600 for the six months ended June 30, 2025. This was an increase of $399,477 compared to net cash provided by operating activities of $754,123 in 2024. The net cash provided by operating activities for the six months ended June 30, 2025 was primarily attributable to (1) a net loss of $916,109 due to the reasons discussed above; reconciled by depreciation and amortization of $145,775, accrued interest income from loans, net of $104,790, net investment gain of $66,820, provision for credit losses of receivables and advances to suppliers of $482,621, provision for obsolete inventories of $3,832 and deferred income tax of $100,882; (2) a decrease of $2,426,716 in short-term investments; (3) a decrease of $1,044,167 in accounts receivable due to the decrease in sales in 2025;(4) an increase of $2,272,803 in advances to suppliers due to the increase in purchasing of goods; (5) an increase of $291,466 in advances from customers due to cash received from selling goods to a customer.

(b) Investing activities

Net cash used in investing activities was $225,763 for the six months ended June 30, 2025. This was a decrease of $10,802,351 compared to $11,028,114 in 2024. The net cash used in investing activities for the six months ended June 30, 2025 was primarily attributable to (1) $413,645 in loans to third parties; (2) $137,882 in repayment of third-party loans; (3) $1,650,000 in purchases of held-to-maturity investments; (4) $700,000 in redemption of held-to-maturity Investments; and (5) $1,000,000 in refund of deposit for acquisition.

(c) Financing activities

Net cash provided by financing activities was nil and $8,200,000 for the six months ended June 30, 2025 and 2024. For the six months ended June 30, 2025, we had no cash flow from financing activities. For the six months ended June 30, 2024, we had $8,200,000 cash inflow from a private placement.

**Tabular Disclosure of Contractual Obligations**

Below is a table setting forth all of our contractual obligations as of June 30, 2025:

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Payments due by period** | **Payments due by period** | **Payments due by period** | **Payments due by period** | **Payments due by period** |
| <br>**Contractual Obligations** | **Total** | **Less than**<br> **1 year** | **1-2 years** | **2-3 years** | **More than**<br> **3 years** |
| Loan Obligations |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Principal | $2582500 | $- | $- | $2582500 | $- |
| &nbsp;&nbsp;&nbsp;Interest | 799179 | 309900 | 309900 | 179379 | - |
| Total | $3381679 | $309900 | $309900 | $2761879 | $- |

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**Research and Development, Patents and Licenses, etc.**

We have a dedicated team of three highly skilled in-house IT specialists, which includes three full-time IT professionals responsible for controlling the direction of outsourced R&D projects. Among all the software we have developed, CIS is the only software product we are currently marketing and generated revenue.

**Trend information.**

Other than as disclosed elsewhere in this 6-K, we are not aware of any material trends since our last fiscal year. We are also unaware of any known trends, uncertainties, demands, commitments or events for the six months ended June 30, 2025 that are reasonably likely to have a material adverse effect on our revenues, net income, profitability, liquidity or capital resources, or that would cause reported financial information not necessarily to be indicative of future operating results or financial conditions.

**Critical Accounting Estimates**

Our unaudited condensed CFS are prepared in accordance with accounting principles generally accepted in the U.S., which require us to make estimates and assumptions that affect the reported amounts of assets and liabilities. On an ongoing basis, we evaluate our estimates, including those estimates that may have a significant effect on our financial condition and results of operations. Our critical accounting estimate is allowance for expected credit losses that is disclosed in Note 2 to our unaudited condensed CFS. We base our estimates and judgment on historical experience and on various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions.