☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 OR For the fiscal year ended December 31, 2024 FORM 20-F ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________ to _________. OR ☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 1 ...

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, 2024 and December 31, 2023 | F-2 | | Unaudited Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income for the Six Months | | | Ended June 30, 2024 and 2023 | F-3 | | Unaudited Condensed Consolidated Statements of Changes in Shareholders' Equity for the Six Months Ended June 30, | | | 202 ...

Corporate Structure and Ownership - The company operates as an offshore holding entity in the Cayman Islands, with significant operations conducted in China through its indirect subsidiary HiTek and the VIE structure[15]. - HiTek's equity is primarily owned by key executives, with 44.74% held by CEO Xiaoyang Huang and 29.83% by Chairman Shenping Yin[16]. - The company does not have direct ownership of its operating entities in China but relies on VIE Agreements, which may not be effective under PRC laws[79]. - HiTek, a variable interest entity, was established on January 18, 1996, in Xiamen, Fujian Province, PRC, and is controlled by PRC residents and corporate entities[214]. Regulatory Environment and Compliance - The company is subject to regulatory risks from the PRC government regarding the VIE structure, which could materially affect operations and share value[24]. - The VIE structure poses unique risks, including potential changes in PRC laws that could impact foreign investment and operational control[23]. - The company has not received any formal inquiries or sanctions from the CSRC regarding its listing on the Nasdaq Capital Market[27]. - The evolving regulatory landscape regarding cybersecurity and data privacy in China poses risks to the company's operations and reputation[85]. - The PRC government has initiated regulatory actions to enhance supervision over overseas listings by Chinese companies, which may affect HiTek's operations[38]. - The company must comply with various cybersecurity and data protection laws, and any failure to do so could materially affect its business and financial condition[151]. - The PRC Cybersecurity Law mandates that personal information collected must be stored in China, and any violation could lead to administrative penalties[153]. - The company is not currently subject to cybersecurity review by the CAC, but future changes in user data thresholds could impose significant operational disruptions[153]. - The PRC Data Security Law requires data processing activities to comply with a classification and hierarchical protection system, with potential penalties for non-compliance, including business license revocation[155]. - The Personal Information Protection Law mandates obtaining individual consent for using sensitive personal information, with potential fines for non-compliance[157]. - The company faces potential sanctions from the CSRC if it fails to comply with new regulatory requirements related to overseas capital-raising activities[95]. - The SEC issued amendments to the HFCA Act, requiring the prohibition of trading for issuers whose auditors are not PCAOB inspected for two consecutive years, reducing the previous period from three years[113]. - The PCAOB secured complete access to inspect and investigate registered public accounting firms in mainland China and Hong Kong as of December 15, 2022[112]. - The company is subject to potential penalties if it fails to comply with PRC laws, which could significantly impact its operations[81]. - The company must implement effective management systems to handle anticipated growth, or it risks adversely affecting its business[69]. Financial Performance and Dividends - HiTek intends to reinvest future earnings to finance business expansion and does not anticipate paying cash dividends in the foreseeable future[31]. - As of the date of the annual report, there has been no distribution of dividends or assets among the holding company, its subsidiary, or the consolidated VIE[32]. - Current PRC regulations allow indirect subsidiaries to pay dividends only out of accumulated profits, and at least 10% of after-tax profits must be set aside for statutory reserves[33]. - Cash dividends, if any, will be paid in U.S. dollars and may be subject to a withholding tax rate of up to 10%[35]. - The company does not intend to pay dividends in the foreseeable future, focusing on retaining earnings for business expansion[186]. Market and Competition - The company may face increased competition in the VAT reporting service industry, which could negatively impact revenues and profit margins[55]. - Future revenues depend on the growth of new business entities in the Xiamen metropolitan area, which is beyond the company's control[50]. - The company experienced a decrease in new customers in February 2020 due to COVID-19, which may affect future revenue growth[46]. - Approximately 1.5% of SME clients are in the FMCG sector, which is increasingly adopting electronic invoicing, potentially reducing ACTCS service usage[51]. - One customer accounted for 18% of total revenues for the year ended December 31, 2023, while two customers accounted for 49% in 2022[61]. Risks and Challenges - The company relies on a limited number of suppliers, with one supplier accounting for 12% of total purchases in 2023, posing a risk to operations[63]. - The company may need additional capital for future operations, which could lead to dilution of existing shareholders' equity if raised through equity securities[68]. - The impact of global conflicts, such as the war in Ukraine, could adversely affect the company's business and financial condition[53]. - Key personnel retention is critical for the company's success, particularly the Chairman and CEO, whose loss could significantly impact operations[73]. - The company faces challenges in enforcing VIE Agreements in China due to uncertainties in the legal environment[88]. - The company is subject to risks associated with potential delisting under the HFCA Act if PCAOB access is obstructed in the future[120]. - The inability of U.S. regulators to conduct investigations directly in China may hinder the enforcement of shareholder rights and regulatory compliance[124]. - The company operates under Cayman Islands law, which may limit the ability of shareholders to pursue legal actions compared to U.S. companies[126]. - The evolving regulatory landscape in China may lead to new laws that could restrict the services offered by the company in the ACTCS industry[132]. - The company's operations and revenue are entirely generated in the PRC, making it highly susceptible to changes in PRC government policies, which could adversely affect profitability[133]. - The PRC government continues to exert significant control over economic growth, and any changes in laws or regulations could materially impact the company's business operations[135]. - The company is dependent on government policies that promote a market-based economy, and any political or economic climate changes in the PRC may impair its ability to operate profitably[137]. Shareholder Rights and Corporate Governance - The dual-class share structure allows the Chairman and CEO to control approximately 95.20% of voting rights, potentially misaligning interests with other shareholders[192]. - The board of directors has the authority to issue shares with special rights without further shareholder approval, which may discourage changes in control[205]. - Shareholders holding at least 10% of the issued shares can requisition an extraordinary general meeting, but there are limitations on proposing matters at meetings not called by shareholders[208]. - The company treats HiTek as a wholly-owned subsidiary for U.S. federal income tax purposes, impacting the PFIC analysis[211]. - The registration of transfers of Class A Ordinary Shares may be declined under certain circumstances, including if the shares are not fully paid up[206]. - The company must provide at least 15 calendar days' notice for convening annual general meetings, with a quorum requiring at least one shareholder present representing one-third of the total issued voting shares[208]. Economic and Currency Risks - The company conducts its business in RMB, and fluctuations in currency conversion rates between RMB and USD could affect the value of investments[139]. - If classified as a "resident enterprise" under the PRC Enterprise Income Tax Law, the company could face a uniform tax rate of 25% on worldwide income, impacting net income and dividends[142]. - The withholding tax rate on profits distributed to offshore holding companies is generally 10%, but may be reduced to 5% under certain conditions, which the company is currently assessing[145]. - Fluctuations in foreign currency exchange rates, particularly between Renminbi and USD, could adversely affect financial results and operations[166]. - Substantial increases in labor costs in China may negatively impact profitability unless passed on to customers[171]. - Stricter labor contract regulations may increase labor-related costs and limit operational flexibility[172]. Internal Controls and Financial Reporting - The lack of effective internal controls over financial reporting may adversely affect the company's financial results and investor confidence[195]. - The company may incur substantial costs if involved in securities litigation, which could divert resources and management attention[190]. - Market opportunity estimates and growth forecasts are subject to significant uncertainty, which could impact the company's business performance[188]. - The company is classified as a "controlled company," allowing it to rely on exemptions from certain corporate governance requirements[202]. - The market price of Class A Ordinary Shares may be volatile and influenced by various external factors beyond the company's control[188].

Shares of Hitek Global (NASDAQ:HKIT) are surging higher today by nearly 300%, although the reasons behind the jump aren’t exactly clear. The company operates as a holding company of several Chinese subsidiaries with a focus on information technology and technical consulting. A short squeeze doesn’t appear to be the culprit here, as short interest as a percentage of float was just 0.21% based on the latest update as of Jan. 12.It’s worth pointing out that Hitek has a float of just 5.76 million shares. Meanwh ...

Revenue Performance - Total revenues for the six months ended June 30, 2023, were $2,948,115, representing an increase from $2,859,150 in the same period of 2022, a growth of approximately 3.1%[8] - Hardware sales generated $1,313,059 in revenue for the six months ended June 30, 2023, up from $799,247 in the same period of 2022, indicating a growth of approximately 64.4%[59] - Revenue from tax devices and services was $859,855 for the six months ended June 30, 2023, compared to $961,054 in 2022, reflecting a decrease of about 10.5%[59] - Software sales revenue decreased to $775,201 for the six months ended June 30, 2023, down from $1,098,849 in the same period of 2022, a decline of approximately 29.4%[59] - The Company recognized revenue of $649,333 from deferred revenue for the six months ended June 30, 2023, compared to $136,657 in the same period of 2022, an increase of approximately 376.5%[57] - Revenues for the six months ended June 30, 2023, were $2,797,326, a slight increase from $2,752,332 in the same period of 2022[144] Profitability Metrics - Gross profit for the first half of 2023 was $1,499,280, down from $1,840,122 in 2022, indicating a decrease of about 18.6%[8] - Operating income decreased to $507,701 for the six months ended June 30, 2023, compared to $761,737 in 2022, reflecting a decline of approximately 33.2%[8] - Net income for the first half of 2023 was $621,974, slightly down from $638,427 in the same period of 2022, a decrease of about 2.6%[8] - The company reported a basic and diluted earnings per share of $0.05 for the first half of 2023, down from $0.06 in the same period of 2022[8] - The company's income before income taxes for the six months ended June 30, 2023 was $947,915, compared to $885,777 for the same period in 2022, reflecting a growth of 7.0%[124] Asset and Liability Management - Total current assets increased to $22,374,777 as of June 30, 2023, compared to $12,102,158 as of December 31, 2022, a growth of approximately 84.8%[4] - Total assets reached $33,182,147 as of June 30, 2023, up from $21,205,091 at the end of 2022, an increase of about 56.5%[6] - Total liabilities decreased to $7,224,843 as of June 30, 2023, from $7,678,565 as of December 31, 2022, a reduction of approximately 5.9%[6] - Shareholders' equity increased to $25,957,304 as of June 30, 2023, compared to $13,526,526 at the end of 2022, reflecting a growth of about 92.5%[5] - Total current assets of consolidated VIEs increased to $12,241,892 as of June 30, 2023, from $11,276,852 as of December 31, 2022[144] - Total liabilities of consolidated VIEs increased to $7,172,377 as of June 30, 2023, from $5,329,843 as of December 31, 2022[144] Cash Flow Analysis - Net cash provided by operating activities was $200,869, significantly lower than $4,222,313 in the prior year[13] - Net cash provided by operating activities decreased significantly to $804,159 for the six months ended June 30, 2023, compared to $4,431,188 for the same period in 2022[144] - The company reported a net cash used in operating activities of $(595,236) for the six months ended June 30, 2023, compared to $(214,958) in 2022[151] - Total cash at the end of the period increased to $5,495,270 from $1,690,819 at the end of June 2022[13] Investment and Development - Net cash used in investing activities was $10,997,089, compared to $7,636,014 in the previous year, indicating increased investment outflows[13] - The company made an advance payment for software development totaling $(346,635), which is a significant increase from $(122,207) in the previous year[13] - The company has capitalized product development costs of $401,647 as of June 30, 2023, related to a software development project[98] Taxation and Compliance - Total income tax expense for the six months ended June 30, 2023, was $325,941, compared to $0 for the same period in 2022[125] - The effective tax rate increased to 34.4% for the six months ended June 30, 2023, compared to 27.9% for the same period in 2022[130] - Cash paid for income taxes was $21,104, down from $34,202 in the previous year, reflecting a decrease in tax obligations[13] Shareholder Activity - The company issued 3,404,685 ordinary shares in April 2023, raising approximately $15.1 million in net proceeds[118] - The company raised $15,142,902 from the issuance of ordinary shares during the six months ended June 30, 2023, enhancing its capital base[151] - The company issued 10,987,679 shares as of June 30, 2023, compared to 10,987,679 shares in the previous year, maintaining the same number of outstanding shares[149] Credit and Receivables - The allowance for credit losses increased to $1,884,744 as of June 30, 2023, compared to $164,122 at the end of 2022, indicating a substantial rise in provisions for potential credit losses[84] - As of June 30, 2023, the company's accounts receivable, net, was $1,263,451, a decrease from $3,271,218 as of December 31, 2022, reflecting a significant reduction of approximately 61.4%[84] - Accounts receivable increased to $(1,081,209), up from $(1,015,176) in the prior year, indicating a rise in outstanding receivables[13] Other Financial Metrics - Interest income for the six months ended June 30, 2023 was $363,224, an increase of 56.8% compared to $231,632 for the same period in 2022[96] - Interest expense for the six months ended June 30, 2023 was $160,319, an increase from $122,765 in the same period of 2022[117] - The company reported a net investment income of $88,846 for the six months ended June 30, 2023, compared to a net loss of $(6,124) for the same period in 2022, marking a significant turnaround[81]

VIE Structure and Regulatory Risks - The company operates as an offshore holding entity incorporated in the Cayman Islands, with significant operations conducted in China through its indirect subsidiary Haitian Weilai and the VIE structure[15]. - The VIE Agreements allow the company to consolidate the financial results of HiTek, with WFOE entitled to collect a service fee equal to 100% of HiTek's quarterly profit[18]. - The Exclusive Technical Consulting and Service Agreement has a term of ten years, effective from March 31, 2018, unless terminated by WFOE with a 30-day notice[18]. - The Equity Interest Pledge Agreement ensures that HiTek shareholders pledge their equity interests to WFOE, which is entitled to receive dividends during the pledge term[19]. - The Exclusive Equity Interests Purchase Agreement grants WFOE an exclusive option to purchase equity interests in HiTek, effective for ten years with a potential extension[20]. - The company faces risks related to the VIE structure, including regulatory uncertainties and potential changes in PRC laws that could impact operations and share value[23]. - The company is not required to obtain permission from PRC authorities for the VIE's operation, but future regulatory changes could impact operations[42]. - The VIE Agreements may be subject to interpretation under PRC law, which could limit the company's ability to enforce its rights and control over HiTek[88]. - The company's corporate structure and VIE Agreements may be challenged under PRC laws, potentially leading to significant financial and operational consequences[87]. - As of the report date, all revenue and net income are derived from HiTek, the VIE in China, highlighting the dependency on this structure[79]. Financial Performance and Dividend Policy - The company intends to retain future earnings for reinvestment and does not anticipate paying cash dividends or transferring assets in the foreseeable future[31]. - As of the date of the annual report, there has been no distribution of dividends or assets among the holding company, its subsidiary, or the consolidated VIE[32]. - Current PRC regulations allow indirect PRC subsidiaries to pay dividends only from accumulated profits, which must be determined according to Chinese accounting standards[33]. - The company may face difficulties in obtaining and remitting foreign currency for dividend payments due to PRC government controls[34]. - Cash dividends, if any, will be paid in U.S. dollars and may be subject to a PRC withholding tax rate of up to 10%[35]. - The company relies on payments from HiTek to WFOE for dividend distribution, which are subject to PRC taxes[35]. - The company does not intend to pay dividends in the foreseeable future, meaning returns on investment will depend on the market price of its ordinary shares[188]. Regulatory Compliance and Legal Risks - Recent regulatory changes by the CSRC require domestic companies to complete filing procedures for overseas listings, which could affect future capital market activities[27]. - The approval of the China Securities Regulatory Commission (CSRC) may be required for future public offerings in the U.S., creating uncertainty regarding compliance and operational performance[89]. - The company must comply with the Trial Administrative Measures for Overseas Securities Offering and Listing, which require filing procedures with the CSRC within three working days of submission[92]. - The company may face potential sanctions from the CSRC or other PRC regulatory authorities if it fails to comply with new regulatory requirements related to overseas capital-raising activities[95]. - The company may be subject to fines or sanctions imposed by the PRC government for non-compliance with SAFE registration requirements[100]. - There are uncertainties regarding the interpretation and implementation of PRC laws that may impact the company's ability to operate profitably[96]. - The company faces substantial uncertainties regarding its corporate structure and governance due to the interpretation of the Foreign Investment Law and its impact on VIE Agreements[102]. Market and Operational Risks - Health epidemics, such as COVID-19, could disrupt operations and adversely affect business performance[46]. - Company’s future revenues and growth prospects are dependent on the establishment of new business entities in the Xiamen metropolitan area, which is beyond its control[50]. - Approximately 1.5% of the company's SME clients are FMCG business entities, and the increased use of electronic invoices may reduce annual service fee revenue, negatively affecting total revenue[51]. - For the year ended December 31, 2022, two customers accounted for 49% of total revenues, with the largest customer representing 36%[60]. - The company provided a two-year credit period to large customers, which may lead to deferred payments or bad debts, negatively impacting business operations[61]. - Four suppliers accounted for 16%, 15%, 13%, and 11% of total purchases for the year ended December 31, 2022, indicating a risk of operational disruption if any supplier is lost[62]. - The company has loan agreements totaling RMB 40 million (approximately US$5.98 million) with a borrower, which poses a risk if the borrower defaults on payments[64]. - The company may need additional capital to fund future operations, and failure to secure this capital could reduce planned expansion and marketing efforts[67]. - The company relies on third-party payment processing, and any failure in these services could impair its ability to operate effectively[70]. - The loss of key personnel, particularly senior executives, could disrupt business operations and adversely affect financial condition[73]. Intellectual Property and Related Party Transactions - The company relies on intellectual property rights, including copyright and trade secret laws, to protect its products and services, but faces challenges in enforcement, particularly in China[74]. - Related party transactions have occurred, including dealings with Beijing Zhongzhe Yuantong Technology Co., Ltd., which may present conflicts of interest and affect business operations[75]. Currency and Economic Risks - The company's business is conducted in RMB, while its shares are quoted in USD, exposing it to currency conversion risks[141]. - The company maintains its financial records in RMB, and fluctuations in the RMB to USD exchange rate can materially affect cash flows and revenue reported in USD[142]. - If classified as a PRC "resident enterprise," the company would be subject to a 25% enterprise income tax on worldwide income, potentially impacting net income and dividends[144]. - Dividends from the PRC subsidiary to offshore subsidiaries may incur a withholding tax rate of 10%, which could be reduced to 5% under certain conditions[147]. - The company faces increased regulatory scrutiny in the technology industry, which may lead to substantial fines and changes in business practices[166]. - Economic conditions in China, such as a potential reduction in net disposable income, could adversely affect the company's business and financial condition[130]. - The PRC government exercises significant control over economic growth, which could adversely affect the company's business operations[136]. Compliance with Cybersecurity and Data Protection Laws - The company is subject to various cybersecurity and data protection laws, and non-compliance could lead to significant legal liabilities and operational disruptions[153]. - The PRC Cybersecurity Law mandates that personal information and important data must be stored in China, which could affect operational practices[155]. - The company must comply with the Personal Information Protection Law (PIPL), which could result in fines or penalties if not adhered to[159]. - Compliance with data privacy laws may incur additional costs and operational restrictions, potentially affecting business performance[160]. Corporate Governance and Public Company Status - The company completed its initial public offering and listing prior to September 30, 2023, and is not required to complete additional filing procedures under the Trial Measures[95]. - The company is classified as a "controlled company" under NASDAQ rules, allowing it to rely on exemptions from certain corporate governance requirements[200]. - The company may incur significant legal, accounting, and other expenses as a result of being a public company, particularly after it ceases to qualify as an "emerging growth company"[196]. - The market price of the company's ordinary shares may be volatile and could decline regardless of its operating performance, influenced by various external factors[192]. - The company lacks effective internal controls over financial reporting, which may affect its ability to accurately report financial results and prevent fraud[194]. - The company does not expect to be classified as a Passive Foreign Investment Company (PFIC) under current rules, but must make this determination annually[211]. - The company may face increased U.S. federal income tax liability and additional reporting requirements if classified as a PFIC[209]. - The company's ordinary shares may trade under $5.00 per share, classifying them as penny stocks, which could negatively affect their price and liquidity[212]. - The estimates of market opportunity and growth forecasts in the annual report are subject to significant uncertainty and may not prove accurate[190].

Financial Performance - Total revenues for the year ended December 31, 2019, were $6,933,952, a slight increase from $6,915,778 in 2018, representing a growth of 0.26%[24] - Net income for the year ended December 31, 2019, was $2,018,994, down from $2,219,615 in 2018, reflecting a decrease of 9.03%[24] - Operating income decreased to $2,192,050 in 2019 from $2,804,723 in 2018, a decline of 21.8%[24] - Gross profit for 2019 was $3,745,127, compared to $3,876,372 in 2018, indicating a decrease of 3.38%[24] - Total operating expenses increased significantly to $1,553,077 in 2019 from $1,071,649 in 2018, marking an increase of 44.83%[24] - Earnings per ordinary share for 2019 were $0.18, down from $0.20 in 2018, a decrease of 10%[24] - The company's total income before income taxes for the year ended December 31, 2019, was $2,358,172, down from $2,692,310 in 2018[139] Assets and Liabilities - Total assets increased to $11,485,416 in 2019 from $9,220,162 in 2018, representing a growth of approximately 24.6%[21] - Total current assets reached $8,021,331 in 2019, compared to $5,738,102 in 2018, marking an increase of around 40.0%[21] - Total liabilities rose to $2,529,725 in 2019 from $2,183,645 in 2018, which is an increase of approximately 15.8%[21] - The company’s total equity as of December 31, 2019, was $8,955,691, an increase from $7,036,517 in 2018, reflecting a growth of 27.2%[26] - Cash and cash equivalents rose to $776,220 in 2019, up from $739,615 in 2018, indicating an increase of about 5.5%[21] - Accounts receivable, net, significantly increased to $2,747,203 in 2019 from $1,295,682 in 2018, reflecting a growth of approximately 111.2%[21] - The allowance for doubtful accounts decreased to $307,026 as of December 31, 2019, from $337,894 as of December 31, 2018[121] - Inventory as of December 31, 2019, was $513,051, a substantial increase from $72,501 as of December 31, 2018[125] Cash Flow and Investments - The company reported a net cash provided by operating activities of $43,266 for 2019, a significant decrease from $321,379 in 2018[29] - Cash balances held in PRC banks as of December 31, 2019, and 2018, are uninsured[57] - As of December 31, 2019, total short-term investments amounted to $1,966,607, a decrease from $2,094,402 as of December 31, 2018[119] - The net investment income for the year ended December 31, 2019, was $103,244, a recovery from a loss of $141,254 in 2018[120] Revenue Recognition - Revenue is generated from four primary sources: hardware sales, software sales, IT services, and tax devices and services[75] - Hardware sales are recognized at the point of ownership transfer to end customers, classified as "Revenue-Hardware" on the consolidated statements of operations[76][77] - Software sales focus on perpetual licenses for the Communication Interface System (CIS), with revenue recognized upon customer acceptance[78][81] - IT service revenue is recognized ratably over the service period, reflecting ongoing support and maintenance[82] - Revenue from tax devices is recognized when ownership is transferred, with service revenue recognized using the straight-line method over the service agreement term[85] - Deferred revenue as of December 31, 2019, was $763,191, down from $795,344 in 2018, with recognized revenue from deferred balances of $795,344 in 2019[89] Regulatory and Operational Risks - The Company’s VIE structure may face regulatory risks under the proposed Draft FIE Law, which could impact its operations and financial position[157] - The Company’s operations rely on VIEs that hold revenue-producing assets, and losing control over these VIEs could materially affect cash flows and financial performance[159] - The Company believes that its contractual arrangements with WFOE and shareholders are enforceable, despite potential regulatory challenges[158] - The Company’s management considers the possibility of regulatory findings regarding VIE operations to be remote under current laws[157] COVID-19 Impact - The Company expects no significant long-term impact on operations and financial results from the COVID-19 epidemic, as business resumed to normal in April 2020[160] - The Company’s office was shut down from February 3, 2020, to February 23, 2020, due to COVID-19, impacting customer acquisition and service fee collection[160] Miscellaneous - The Company has a service fee arrangement under which WFOE is entitled to collect 100% of HiTek's quarterly profit as a service fee[42] - The Company did not record any impairment charge for the years ended December 31, 2019, and 2018[73] - The Company capitalized $1,073,237 for two software programs for internal use, with amortization expenses of $356,140 in 2019[96] - The VAT rate for revenue from products was reduced from 17% to 13% starting April 1, 2019, impacting revenue recognition[99] - The effective tax rate for the year ended December 31, 2019, was 14.4%, a decrease from 17.6% in 2018[143] - Future minimum lease payments under operating lease agreements for 2020 are projected to be $42,353[149]