WENZHOU, China, Aug. 13, 2024 /PRNewswire/ -- ZK International Group Co., Ltd. (ZKIN) ("ZK International" or the "Company"), a designer, engineer, manufacturer, and supplier of patented high-performance stainless steel and carbon steel pipe products primarily used for water and gas supplies, today announced its audited financial results for the fiscal year ended September 30, 2023. Financial Highlights for the Fiscal Year 2023 For the Fiscal Year EndedSeptember 30, ($ millions, except per share data) 2023 2022 % Change Revenue $ 111.60 $ 102.39 8.99 % Gross profit $ 1.30 $ 7.60 -82.93 % Gross margin 1.16 % 7.42 % -6.26percentage  points Loss from operations $ (60.44) $ (3.96) -1424.58 % Operating loss margin (54.16 %) (3.87 %) -50.29percentagepoints Net loss attributable to ZK International $ (61.06) $ (6.08) -904.06 % Diluted loss per share $ (1.94) $ (0.21) -835.72 % Net book value per share $ 0.80 $ 2.80 -71.43 % Revenue Revenues increased by $9.21 million or 8.99%, to $111.60 million for the year ended September 30, 2023 from $102.39 million for the year ended September 30, 2022. The increase in revenues was primarily driven by the following factors: 1)  During the fiscal year 2023, the decline of real estate market in China, especially the collapse of Evergrande, has set pressure on the steel pipe market. To strengthen the cash flow and expand our market share, we lowered our weighted average selling price ("ASP") to boost our sales volume. However, we have observed the recovery of real estate market and increase of market demand for the 2024 fiscal year, we have increased ASP for the 2024 fiscal year. 2)  During 2023 fiscal year, the average selling price of electrolytic nickel increased by 33.33% from RMB 113,716 per ton in fiscal year 2022 to RMB 151,619 in fiscal year 2023; the average selling price of steel strip decreased by 1.82% from RMB 20.3 per kilogram in fiscal year 2022 to RMB 19.93 in fiscal year 2023; the average selling price of steel pipe decreased by 20.25% from RMB 140.26 per piece in fiscal year 2022 to RMB 111.86 in fiscal year 2023; the average selling price of pipe fittings decreased by 4.86% from RMB 22.65 each in fiscal year 2022 to RMB 21.55 in fiscal year 2023. 3)  Due to the decrease of product prices, we had an overall increase in sales volume. The sales volume of steel strip increased by 87.73% from 753.91 tons in fiscal year 2022 to 1,415.29 tons in fiscal year 2023; Sales volume of pipes increased by 0.42% from 592,919 in fiscal year 2022 to 595,395 in fiscal year 2023; The sales volume of pipe fittings increased by 29.28% from 7,103,894 pieces in fiscal year 2022 to 9,183,690 pieces in fiscal year 2023. Gross Profit Our gross profit decreased by $6.30 million or 82.93% to $1.30 million for the year ended September 30, 2023 from $7.60 million for the year ended September 30, 2022. Gross profit margin was 1.16% for the year ended September 30, 2023, as compared to 7.42% for the year ended September 30, 2022. The decrease of gross profit was primarily due to decreased weighted average selling prices while our cost of raw material remained stable. However, we have observed the recovery of real estate market and increase of market demand for the 2024 fiscal year, we have increased ASP for the 2024 fiscal year which will improve our gross margin. Loss from Operations Loss from operations was $60.44 million, compared to loss from operations of $3.96 million for the prior fiscal year. The increase of operational loss was mainly due to the one-off asset impairment cost of intangible asset and long-term investment, and stock-based compensation incurred during 2023 fiscal year for the expenses related to our new business operations and subsidiaries. During 2023 fiscal year, the Company recorded asset impairment cost of $53.20 million, primarily for the write off of its long-term investment in CG Malta and the software platforms, including xSigma Trading, MaximNFT, and the Defi Exchange. For the 2021 and 2022 fiscal years, CG Malta achieved high growth with its online gaming services launched in more than 10 states in US with high growth rate of Real Money Handle and First-Time Depositor. However, during the 2023 fiscal year, the competition of gaming market has been increasingly intense. Market bullishness and valuations peaked in early-2023 and declined rapidly from there, preventing CG Malta from raising further capital to execute its business plan. For the best interest of the Company's shareholder, the Company decided to stop funding CG Malta and instead demanded the management team of CG Malta took active measures to achieve organic growth and healthy cash flow. However, the business was unable to raise the capital required to fund the business plan, and therefore the shareholders of CG Malta passed shareholder resolution on November 27, 2023 to cease operations of CG Malta and wind up the entity. For the year ended September 30, 2023, the Company has written off the investment in CG Malta. During 2023 fiscal year, the Company evaluated the recoverability of the three platforms, including Defi Exchange, xSigma Trading, and MaximNFT and concluded that the carrying value of the three platforms may not be recoverable as it projects that the platform is likely to have continuing losses and it's more likely than not this platform will be sold or otherwise disposed of significantly before the end of its previously estimated useful life. For the year ended September 30, 2023, the Company wrote off the carrying value of the three platforms. Net Loss Attributable to ZK International Net loss attributable to ZK International was $61.06 million, or net loss of $1.94 per share. This compared to net loss attributable to ZK International of $6.08 million, or $0.21 per share, for the prior fiscal year. Net book value Net book value per share was $0.80 as of September 30, 2023, compared to $2.80 as of September 30, 2022. Mr. Jiancong Huang, Chairman of ZK International, commented, "while ZK International declared a net loss of $61 million for the year, this was largely due to a series of one-time write-offs related to various non-core investments. These write-offs are part of the company's broader strategy to streamline operations and focus on high-growth opportunities, ensuring a more robust financial foundation for the future." Mr. Huang continued, "While this year's financial results reflect certain challenges, I am proud of the progress we have made in growing our revenue and strengthening our core business in China. The strategic decisions we've taken to write off certain investments position us for a more focused and profitable future. We remain committed to enhancing shareholder value and driving long-term growth for ZK International. As ZK International moves forward, the company remains confident in its ability to navigate the evolving market landscape and deliver sustainable value to its shareholders." About ZK International Group Co., Ltd. ZK International Group Co., Ltd. is a China-based designer, engineer, manufacturer, and supplier of patented high-performance stainless steel and carbon steel pipe products that require sophisticated water or gas pipeline systems. The Company owns 33 patents, 21 trademarks, 2 Technical Achievement Awards, and 10 National and Industry Standard Awards. ZK International is Quality Management System Certified (ISO9001), Environmental Management System Certified (ISO1401), and a National Industrial Stainless Steel Production Licensee that is focused on supplying steel piping for the multi-billion dollar industries of Gas and Water sectors. ZK has supplied stainless steel pipelines for over 2,000 projects, including the Beijing National Airport, the "Water Cube", and "Bird's Nest", which were venues for the 2008 Beijing Olympics. Emphasizing superior properties and durability of its steel piping, ZK International is providing a solution for the delivery of high quality, highly sustainable, environmentally sound drinkable water not only to the China market but also to international markets such as Europe, East Asia, and Southeast Asia. For more information please visit www.ZKInternationalGroup.com. Additionally, please follow the Company on Twitter, Facebook, YouTube, and Weibo. For further information on the Company's SEC filings please visit www.sec.gov. Safe Harbor Statement This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. Without limiting the generality of the foregoing, words such as "may," "will," "expect," "believe," "anticipate," "intend," "could," "estimate" or "continue" or the negative or other variations thereof or comparable terminology are intended to identify forward-looking statements. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances are forward-looking statements. These forward-looking statements are not guarantee of future performance and are subject to certain risks, uncertainties, and assumptions that are difficult to predict and many of which are beyond the control of ZK International. Actual results may differ from those projected in the forward-looking statements due to risks and uncertainties, as well as other risk factors that are included in the Company's filings with the U.S. Securities and Exchange Commission. Although ZK International believes that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate and, therefore, there can be no assurance that the results contemplated in forward-looking statements will be realized. In light of the significant uncertainties inherent in the forward-looking information included herein, the inclusion of such information should not be regarded as a representation by ZK International or any other person that their objectives or plans will be achieved. ZK International does not undertake any obligation to revise the forward-looking statements contained herein to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.       ZK INTERNATIONAL GROUP CO., LTD CONSOLIDATED BALANCE SHEETS (IN U.S. DOLLARS) As of September 30,  2023 2022 Assets Current assets Cash and cash equivalents $ 4,994,411 $ 7,515,147 Restricted cash 50,995 101,992 Short-term Investment 48,145 915,616 Accounts receivable, net of allowance for doubtful accounts and provision for expected credit loss    of $6,617,485 and $255,322, respectively 14,967,186 28,362,933 Notes receivable 54,825 49,611 Prepayment, deposit and other receivable - current 383,413 2,360,539 Inventories 17,937,425 21,141,501 Advance to suppliers 4,810,044 6,322,592 Total current assets 43,246,444 66,769,931 Property, plant and equipment, net 7,836,017 7,124,587 Right-of-use asset – Operating lease 43,840 30,998 Intangible assets, net 1,437,384 11,415,451 Deferred tax assets — 320,164 Prepayment, deposit and other receivable - Non-current 292,070 — Long-term prepayment — 10,447,395 Long-term accounts receivable 5,527,682 7,522,188 Long-term investment 285,540 25,292,866 TOTAL ASSETS $ 58,668,977 $ 128,923,580 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 2,611,220 $ 10,066,758 Accrued expenses and other current liabilities 4,964,893 6,949,772 Operating lease liability - current 21,749 10,754 Accrued payroll and welfare 1,918,415 1,880,377 Advance from customers 821,694 1,758,800 Due to related parties 1,111,001 2,052,403 Convertible debentures 4,011,224 3,352,311 Bank borrowings  - current 9,388,706 16,257,820 Notes payables 41,118 702,889 Income tax payable 669 817,059 Total current liabilities 24,890,689 43,848,943 Operating lease liability – non-current 11,811 10,256 Bank borrowings – non-current 8,527,686 — TOTAL LIABILITIES $ 33,430,186 $ 43,859,199 COMMITMENTS AND CONTINGENCIES — — Equity Common stock, no par value, 50,000,000 shares authorized, 32,992,740 and 30,392,940 shares    issued and outstanding, respectively Additional paid-in capital 72,886,898 70,872,765 Statutory surplus reserve 3,176,556 3,176,556 Subscription receivable