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What changed in mF International Ltd's 20-F — 2023 vs 2024

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Paragraph-level year-over-year comparison of mF International Ltd's 2023 and 2024 20-F annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+306 added−287 removedSource: 20-F (2025-04-23) vs 20-F (2024-05-15)

Top changes in mF International Ltd's 2024 20-F

306 paragraphs added · 287 removed · 228 edited across 5 sections

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

100 edited+30 added−4 removed249 unchanged
Biggest changeAs of and for the years ended December 31, 2021, 2022 and 2023 For the years ended December 31, 2021 2022 2023 2023 HK$ HK$ HK$ US$ Revenue 32,212,970 34,931,827 31,961,177 4,091,869 Cost of revenue 16,260,407 16,512,702 13,995,670 1,791,813 Gross profit 15,952,563 18,419,125 17,965,507 2,300,056 Total operating expenses 5,417,863 10,876,654 11,283,291 1,444,557 Income from operations 10,534,700 7,542,471 6,682,216 855,499 Total other income (expense), net 246,525 (336,027 ) 94,974 12,158 Income before income taxes 10,781,225 7,206,444 6,777,190 867,657 Income tax expense (431,630 ) (387,845 ) (148,309 ) (18,987 ) Net income 10,349,595 6,818,599 6,628,881 848,670 Other comprehensive income Foreign currency translation adjustment (14,168 ) 7,496 17,866 2,287 Comprehensive income 10,335,427 6,826,095 6,646,747 850,957 As of December 31, 2021 2022 2023 2023 HK$ HK$ HK$ US$ Current assets 18,678,715 15,522,433 10,104,898 1,293,691 Non-current assets 14,664,377 19,017,770 23,746,921 3,040,228 Total assets 33,343,092 34,540,203 33,851,819 4,333,919 Current liabilities 10,263,742 11,904,112 12,182,221 1,559,643 Non-current liabilities 15,596,879 12,210,193 9,926,166 1,270,809 Total liabilities 25,860,621 24,114,305 22,108,387 2,830,452 Total shareholders’ equity 7,482,471 10,425,898 11,743,432 1,503,467 A. [Reserved] B.
Biggest changeAs of and for the years ended December 31, 2022, 2023 and 2024 For the years ended December 31, 2022 2023 2024 2024 HK$ HK$ HK$ US$ Revenue 34,931,827 31,961,177 26,085,318 3,358,178 Cost of revenue 16,512,702 13,995,670 13,783,124 1,774,415 Gross profit 18,419,125 17,965,507 12,302,194 1,583,763 Total operating expenses 10,876,654 11,283,291 31,673,430 4,077,581 Income (loss) from operations 7,542,471 6,682,216 (19,371,236 ) (2,493,818 ) Total other income (expense), net (336,027 ) 94,974 (57,997 ) (7,466 ) Income (loss) before income taxes 7,206,444 6,777,190 (19,429,233 ) (2,501,284 ) Income tax expense (387,845 ) (148,309 ) (781,759 ) (100,642 ) Net income (loss) 6,818,599 6,628,881 (20,210,992 ) (2,601,926 ) Other comprehensive income (loss) Foreign currency translation adjustment 7,496 17,866 3,964 32,528 Comprehensive income (loss) 6,826,095 6,646,747 (20,207,028 ) (2,569,398 ) As of December 31, 2022 2023 2024 2024 HK$ HK$ HK$ US$ Current assets 15,522,433 10,104,898 34,005,174 4,377,765 Non-current assets 19,017,770 23,746,921 24,300,237 3,128,369 Total assets 34,540,203 33,851,819 58,305,411 7,506,134 Current liabilities 11,904,112 12,182,221 17,042,523 2,194,024 Non-current liabilities 12,210,193 9,926,166 5,350,316 688,790 Total liabilities 24,114,305 22,108,387 22,392,839 2,882,814 Total shareholders’ equity 10,425,898 11,743,432 35,912,572 4,623,320 A. [Reserved] B.
In the future, funds may not be available to fund operations or for other use outside of Hong Kong, due to interventions in, or the imposition of restrictions and limitations on, our ability or the Operating Subsidiaries by the PRC government to transfer cash.
In the future, funds may not be available to fund operations or for other use outside of Hong Kong, due to interventions in, or the imposition of restrictions and limitations on, our ability or the Operating Subsidiaries by the PRC government to transfer cash.
In the future, funds may not be available to fund operations or for other use outside of Hong Kong, due to interventions in, or the imposition of restrictions and limitations on, our ability or the Operating Subsidiaries by the PRC government to transfer cash.
In the future, funds may not be available to fund operations or for other use outside of Hong Kong, due to interventions in, or the imposition of restrictions and limitations on, our ability or the Operating Subsidiaries by the PRC government to transfer cash.
However, the Chinese government may, in the future, impose restrictions or limitations on our ability to transfer money out of Hong Kong, to distribute earnings and pay dividends to and from the other entities within our organization, or to reinvest in our business outside of Hong Kong.
However, the Chinese government may, in the future, impose restrictions or limitations on our ability to transfer money out of Hong Kong, to distribute earnings and pay dividends to and from the other entities within our organization, or to reinvest in our business outside of Hong Kong.
Such restrictions and limitations, if imposed in the future, may delay or hinder the expansion of our business outside of Hong Kong and may affect our ability to receive funds from the Operating Subsidiaries in Hong Kong.
Such restrictions and limitations, if imposed in the future, may delay or hinder the expansion of our business outside of Hong Kong and may affect our ability to receive funds from the Operating Subsidiaries in Hong Kong.
Nevertheless, since these statements and regulatory actions are new, it is highly uncertain how soon the legislative or administrative regulation making bodies will respond and what existing or new laws or regulations or detailed implementations and interpretations will be modified or promulgated, if any.
Nevertheless, since these statements and regulatory actions are new, it is highly uncertain how soon the legislative or administrative regulation making bodies will respond and what existing or new laws or regulations or detailed implementations and interpretations will be modified or promulgated, if any.
Any failure by us to comply with such filing requirements under the Trial Measures may result in an order to rectify, warnings and fines against us and could materially hinder our ability to offer or continue to offer our securities.
Any failure by us to comply with such filing requirements under the Trial Measures may result in an order to rectify, warnings and fines against us and could materially hinder our ability to offer or continue to offer our securities.
The PRC government may also intervene or impose restrictions on our ability to move money out of Hong Kong to distribute earnings and pay dividends or to reinvest in our business outside of Hong Kong.
The PRC government may also intervene or impose restrictions on our ability to move money out of Hong Kong to distribute earnings and pay dividends or to reinvest in our business outside of Hong Kong.
Given the recent statements by the Chinese government indicating an intent to exert more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers, any such action could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause such securities to significantly decline or be worthless.
Given the recent statements by the Chinese government indicating an intent to exert more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers, any such action could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause such securities to significantly decline or be worthless.
On December 15, 2022, the PCAOB Board determined that the PCAOB was able to secure complete access to inspect and investigate registered public accounting firms headquartered in mainland China and Hong Kong and voted to vacate its previous determinations to the contrary.
On December 15, 2022, the PCAOB Board determined that the PCAOB was able to secure complete access to inspect and investigate registered public accounting firms headquartered in mainland China and Hong Kong and voted to vacate its previous determinations to the contrary.
The Consolidated Appropriations Act contained, among other things, an identical provision to the Accelerating HFCA Act, which reduces the number of consecutive non-inspection years required for foreign companies to comply with PCAOB audits under the HFCA Act from what was originally three years to two, thus reducing the time period before their securities may be prohibited from trading or delisted.
The Consolidated Appropriations Act contained, among other things, an identical provision to the Accelerating HFCA Act, which reduces the number of consecutive non-inspection years required for foreign companies to comply with PCAOB audits under the HFCA Act from what was originally three years to two, thus reducing the time period before their securities may be prohibited from trading or delisted.
We are an “emerging growth company,” as defined in the JOBS Act and will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of our IPO, (b) in which we have total annual gross revenue of at least $1.235 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our Ordinary Shares that is held by non-affiliates exceeds $700 million as of the prior the fiscal year ended on December 31, 2021 and (2) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period.
We are an “emerging growth company,” as defined in the JOBS Act and will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of our IPO, (b) in which we have total annual gross revenue of at least $1.235 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our Class A Ordinary Shares that is held by non-affiliates exceeds $700 million as of the prior the fiscal year ended on December 31, 2021 and (2) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period.
Risk Factors — Risks Related to Doing Business in Hong Kong — The Hong Kong legal system embodies uncertainties which could limit the availability of legal protections.” 4 Table of Contents Furthermore, our Ordinary Shares may be prohibited from trading on a national exchange or in the over-the-counter trading market in the United States under the Holding Foreign Companies Accountable Act (the “HFCA Act”), as amended by the Accelerating Holding Foreign Companies Accountable Act (the “Accelerating HFCA Act”), if the Public Company Accounting Oversight Board (United States) (the “PCAOB”), determines that it cannot inspect or fully investigate our auditors for two consecutive years beginning in 2022.
Risk Factors — Risks Related to Doing Business in Hong Kong — The Hong Kong legal system embodies uncertainties which could limit the availability of legal protections.” 4 Table of Contents Furthermore, our Class A Ordinary Shares may be prohibited from trading on a national exchange or in the over-the-counter trading market in the United States under the Holding Foreign Companies Accountable Act (the “HFCA Act”), as amended by the Accelerating Holding Foreign Companies Accountable Act (the “Accelerating HFCA Act”), if the Public Company Accounting Oversight Board (United States) (the “PCAOB”), determines that it cannot inspect or fully investigate our auditors for two consecutive years beginning in 2022.
As of the date of this annual report, we are advised by Hong Kong counsel, Bird & Bird, that we are not required to obtain permission or approval from Hong Kong authorities to offer the securities being registered to foreign investors, save that our Ordinary Shares may not be offered or sold in Hong Kong by means of any document other than (i) in circumstances which do not constitute an offer to the public within the meaning of the Companies Ordinance (Cap.32, Laws of Hong Kong), (ii) to “professional investors” within the meaning of the Securities and Futures Ordinance (Cap.571, Laws of Hong Kong) and any rules promulgated thereunder, or (iii) in other circumstances which do not result in the document being a “prospectus” within the meaning of the Companies Ordinance (Cap.32, Laws of Hong Kong).
As of the date of this annual report, we are advised by Hong Kong counsel, Bird & Bird, that we are not required to obtain permission or approval from Hong Kong authorities to offer the securities being registered to foreign investors, save that our Class A Ordinary Shares may not be offered or sold in Hong Kong by means of any document other than (i) in circumstances which do not constitute an offer to the public within the meaning of the Companies Ordinance (Cap.32, Laws of Hong Kong), (ii) to “professional investors” within the meaning of the Securities and Futures Ordinance (Cap.571, Laws of Hong Kong) and any rules promulgated thereunder, or (iii) in other circumstances which do not result in the document being a “prospectus” within the meaning of the Companies Ordinance (Cap.32, Laws of Hong Kong).
However, if there is significant change to current political arrangements between mainland China and Hong Kong, or the applicable laws, regulations, or interpretations change, and, in such event, if we are required to obtain such approvals in the future and we do not receive or maintain the approvals or are denied permission from mainland China or Hong Kong authorities, we will not be able to list our Ordinary Shares on a U.S. exchange, or continue to offer securities to investors, which would materially affect the interests of the investors and cause significant the value of our Ordinary Shares significantly decline or be worthless.
However, if there is significant change to current political arrangements between mainland China and Hong Kong, or the applicable laws, regulations, or interpretations change, and, in such event, if we are required to obtain such approvals in the future and we do not receive or maintain the approvals or are denied permission from mainland China or Hong Kong authorities, we will not be able to list our Class A Ordinary Shares on a U.S. exchange, or continue to offer securities to investors, which would materially affect the interests of the investors and cause significant the value of our Class A Ordinary Shares significantly decline or be worthless.
Any limitation on the ability of the Operating Subsidiaries to make payments to us could have a material adverse effect on our Operating Subsidiaries’ ability to conduct business and might materially decrease the value of our Ordinary Shares or cause them to be worthless. ” On March 23, 2022, m-FINANCE declared an interim dividend of HK$0.863 per share (equivalent to US$0.111 per share), or HK$10,000,000 in aggregate (equivalent to US$1,281,805), to its shareholder, which was settled in cash on March 24, 2022.
Any limitation on the ability of the Operating Subsidiaries to make payments to us could have a material adverse effect on our Operating Subsidiaries’ ability to conduct business and might materially decrease the value of our Class A Ordinary Shares or cause them to be worthless. ” On March 23, 2022, m-FINANCE declared an interim dividend of HK$0.863 per share (equivalent to US$0.111 per share), or HK$10,000,000 in aggregate (equivalent to US$1,281,805), to its shareholder, which was settled in cash on March 24, 2022.
Subject to the BVI Business Companies Act, 2004 (as amended), or the BVI Act and our Memorandum and Articles of Association, or Memorandum and Articles, our board of directors may authorize and declare a dividend to shareholders at such time and of such an amount as they think fit if they are satisfied, on reasonable grounds, that immediately following the dividend payment, the value of our assets will exceed our liabilities and we will be able to pay our debts as they become due.
Subject to the BVI Business Companies Act, 2004 (as amended), or the BVI Act and our Memorandum and Articles of Association, or Memorandum and Articles, our board of directors (the “Board”) may authorize and declare a dividend to shareholders at such time and of such an amount as they think fit if they are satisfied, on reasonable grounds, that immediately following the dividend payment, the value of our assets will exceed our liabilities and we will be able to pay our debts as they become due.
Risk Factors — Risks Related to Our Ordinary Shares and the Trading Market — Our Ordinary Shares may be prohibited from being traded on a national exchange under the HFCA Act if the Public Company Accounting Oversight Board determines that it cannot inspect or fully investigate our auditors for two consecutive years beginning in 2022 and, as a result, an exchange may determine to delist our securities.
Risk Factors — Risks Related to Our Class A Ordinary Shares and the Trading Market — Our Class A Ordinary Shares may be prohibited from being traded on a national exchange under the HFCA Act if the Public Company Accounting Oversight Board determines that it cannot inspect or fully investigate our auditors for two consecutive years beginning in 2022 and, as a result, an exchange may determine to delist our securities.
Any limitation on the ability of our Operating Subsidiaries to make payments to us could have a material adverse effect on the Operating Subsidiaries’ ability and might materially decrease the value of our Ordinary Shares or cause them to be worthless. ” 6 Table of Contents Under the current practice of the Inland Revenue Department of Hong Kong, no tax is payable in Hong Kong in respect of dividends paid by us.
Any limitation on the ability of our Operating Subsidiaries to make payments to us could have a material adverse effect on the Operating Subsidiaries’ ability and might materially decrease the value of our Class A Ordinary Shares or cause them to be worthless. ” 6 Table of Contents Under the current practice of the Inland Revenue Department of Hong Kong, no tax is payable in Hong Kong in respect of dividends paid by us.
Moreover, if certain PRC laws and regulations were to become applicable to a company such as mF International or the Operating Subsidiaries in the future, the application of such laws and regulations may have a material adverse impact on the business of our subsidiaries, our financial condition and results of operations and our ability to offer or continue to offer securities to investors, any of which may cause the value of our securities, including the Ordinary Shares, to significantly decline or become worthless.
Moreover, if certain PRC laws and regulations were to become applicable to a company such as mF International or the Operating Subsidiaries in the future, the application of such laws and regulations may have a material adverse impact on the business of our subsidiaries, our financial condition and results of operations and our ability to offer or continue to offer securities to investors, any of which may cause the value of our securities, including the Class A Ordinary Shares, to significantly decline or become worthless.
If we cannot continue to satisfy the continued listing requirements and other rules of NASDAQ Capital Market, although we are exempt from certain corporate governance standards applicable to U.S. issuers as a Foreign Private Issuer, our Ordinary Shares may be delisted, which could negatively impact the price of our Ordinary Shares and the shareholders’ ability to sell them.
If we cannot continue to satisfy the continued listing requirements and other rules of NASDAQ Capital Market, although we are exempt from certain corporate governance standards applicable to U.S. issuers as a Foreign Private Issuer, our Class A Ordinary Shares may be delisted, which could negatively impact the price of our Class A Ordinary Shares and the shareholders’ ability to sell them.
Risks Related to Our Ordinary Shares and the Trading Market Our Ordinary Shares may be prohibited from being traded on a national exchange under the HFCA Act if the PCAOB determines that it cannot inspect or fully investigate our auditors for two consecutive years, beginning in 2022, and, as a result, an exchange may determine to delist our securities.
Risks Related to Our Class A Ordinary Shares and the Trading Market Our Class A Ordinary Shares may be prohibited from being traded on a national exchange under the HFCA Act if the PCAOB determines that it cannot inspect or fully investigate our auditors for two consecutive years, beginning in 2022, and, as a result, an exchange may determine to delist our securities.
As a relatively small-capitalization company with relatively small public float, we may experience greater stock price volatility, extreme price run-ups, lower trading volume and less liquidity than large-capitalization companies. In particular, our Ordinary Shares may be subject to rapid and substantial price volatility, low volumes of trades and large spreads in bid and ask prices.
As a relatively small-capitalization company with relatively small public float, we may experience greater stock price volatility, extreme price run-ups, lower trading volume and less liquidity than large-capitalization companies. In particular, our Class A Ordinary Shares may be subject to rapid and substantial price volatility, low volumes of trades and large spreads in bid and ask prices.
However, due to the long arm provisions under the current PRC laws and regulations, the Chinese government may exercise significant oversight and discretion over the conduct of such business and may intervene in or influence such operations at any time, which could result in a material change in the operations of the Operating Subsidiaries and/or the value of our Ordinary Shares.
However, due to the long arm provisions under the current PRC laws and regulations, the Chinese government may exercise significant oversight and discretion over the conduct of such business and may intervene in or influence such operations at any time, which could result in a material change in the operations of the Operating Subsidiaries and/or the value of our Class A Ordinary Shares.
To the extent any new or more stringent measures are required to be implemented, the business of the Operating Subsidiaries, our financial condition and results of operations could be adversely affected and such measures could materially decrease the value of our Ordinary Shares, potentially rendering it worthless. For a more detailed discussion of this risk, see “— D.
To the extent any new or more stringent measures are required to be implemented, the business of the Operating Subsidiaries, our financial condition and results of operations could be adversely affected and such measures could materially decrease the value of our Class A Ordinary Shares, potentially rendering it worthless. For a more detailed discussion of this risk, see “— D.
However, due to the long arm provisions under the current PRC laws and regulations, the Chinese government may exercise significant oversight and discretion over the conduct of such business and may intervene in or influence such operations at any time, which could result in a material change in the operations of the Operating Subsidiaries and/or the value of our Ordinary Shares.
However, due to the long arm provisions under the current PRC laws and regulations, the Chinese government may exercise significant oversight and discretion over the conduct of such business and may intervene in or influence such operations at any time, which could result in a material change in the operations of the Operating Subsidiaries and/or the value of our Class A Ordinary Shares.
The market price for our Ordinary Shares may be volatile and subject to wide fluctuations due to factors, such as: ● the financial projections we may provide to the public, any changes in these projections or our failure to meet these projections; ● actual or anticipated fluctuations in our quarterly operating results; ● changes in financial estimates by securities research analysts; ● negative publicity, studies or reports; 21 Table of Contents ● our capability to catch up with the technology innovations in the industry, and maintain such technological innovations, once attained; ● announcements by us or our competitors of acquisitions, strategic partnerships, joint ventures or capital commitments; ● additions or departures of key personnel; ● fluctuations of exchange rates between Hong Kong dollar and the U.S. dollar; and ● general economic or political conditions in Hong Kong, the PRC and greater Asia region.
The market price for our Class A Ordinary Shares may be volatile and subject to wide fluctuations due to factors, such as: ● the financial projections we may provide to the public, any changes in these projections or our failure to meet these projections; ● actual or anticipated fluctuations in our quarterly operating results; ● changes in financial estimates by securities research analysts; ● negative publicity, studies or reports; 21 Table of Contents ● our capability to catch up with the technology innovations in the industry, and maintain such technological innovations, once attained; ● announcements by us or our competitors of acquisitions, strategic partnerships, joint ventures or capital commitments; ● additions or departures of key personnel; ● fluctuations of exchange rates between the Hong Kong dollar and the U.S. dollar; and ● general economic or political conditions in Hong Kong, the PRC and greater Asia region.
Therefore, as of the date of this annual report, the CSRC’s approval is not required for the listing and trading of our Ordinary Shares in the U.S. exchange as provided under the M&A Rules, and we would not be subject to filing requirements with the CSRC pursuant to the Trial Measures and supporting guidelines.
Therefore, as of the date of this annual report, the CSRC’s approval is not required for the listing and trading of our Class A Ordinary Shares in the U.S. exchange as provided under the M&A Rules, and we would not be subject to filing requirements with the CSRC pursuant to the Trial Measures and supporting guidelines.
If, as a consequence, our Ordinary Shares are unable to be listed on another securities exchange, such a delisting would substantially impair your ability to sell or purchase our Ordinary Shares when you wish to do so, and the risk and uncertainty associated with a potential delisting would have a negative impact on the price of our Ordinary Shares.
If, as a consequence, our Class A Ordinary Shares are unable to be listed on another securities exchange, such a delisting would substantially impair your ability to sell or purchase our Class A Ordinary Shares when you wish to do so, and the risk and uncertainty associated with a potential delisting would have a negative impact on the price of our Class A Ordinary Shares.
Additionally, any further control over offerings conducted overseas and/or foreign investment impacting the Operating Subsidiaries in Hong Kong by the Hong Kong government could result in a material change in our operations, financial performance and/or the value of our Ordinary Shares or impair our ability to raise money. See “— D.
Additionally, any further control over offerings conducted overseas and/or foreign investment impacting the Operating Subsidiaries in Hong Kong by the Hong Kong government could result in a material change in our operations, financial performance and/or the value of our Class A Ordinary Shares or impair our ability to raise money. See “— D.
However, should PRC authorities obstruct or otherwise fail to facilitate the PCAOB’s access in the future, the PCAOB Board will consider the need to issue a new determination. On December 29, 2022, legislation titled “Consolidated Appropriations Act, 2023” (the “Consolidated Appropriations Act”), was signed into law by President Biden.
However, should PRC authorities obstruct or otherwise fail to facilitate the PCAOB’s access in the future, the PCAOB Board will consider the need to issue a new determination. On December 29, 2022, legislation titled “Consolidated Appropriations Act, 2023” (the “Consolidated Appropriations Act”), was signed into law by former President Biden.
Before the IPO, we were a private company with limited resources. As a result, we may not discover any problems in a timely manner and current and potential shareholders could lose confidence in our financial reporting, which would harm the business of the Operating Subsidiaries and the trading price of our Ordinary Shares.
Before the IPO, we were a private company with limited resources. As a result, we may not discover any problems in a timely manner and current and potential shareholders could lose confidence in our financial reporting, which would harm the business of the Operating Subsidiaries and the trading price of our Class A Ordinary Shares.
Because of these lessened regulatory requirements, our shareholders would be left without information or rights available to shareholders of more mature companies. If some investors find our Ordinary Shares less attractive as a result, there may be a less active trading market for our Ordinary Shares and our Ordinary Share price may be more volatile.
Because of these lessened regulatory requirements, our shareholders would be left without information or rights available to shareholders of more mature companies. If some investors find our Class A Ordinary Shares less attractive as a result, there may be a less active trading market for our Class A Ordinary Shares and our Ordinary Share price may be more volatile.
This law defines the duties and government bodies of the Hong Kong National Security Law for safeguarding national security and four categories of offences — secession, subversion, terrorist activities, and collusion with a foreign country or external elements to endanger national security — and their corresponding penalties. On July 14, 2020, the former U.S.
This law defines the duties and government bodies of the Hong Kong National Security Law for safeguarding national security and four categories of offences — secession, subversion, terrorist activities, and collusion with a foreign country or external elements to endanger national security — and their corresponding penalties. On July 14, 2020, the U.S.
Effective internal control over financial reporting is important to prevent fraud. As a result, our business, our financial condition, results of operations and prospects, as well as the market for and trading price of our Ordinary Shares, may be materially and adversely affected if we do not have effective internal controls.
Effective internal control over financial reporting is important to prevent fraud. As a result, our business, our financial condition, results of operations and prospects, as well as the market for and trading price of our Class A Ordinary Shares, may be materially and adversely affected if we do not have effective internal controls.
The delisting of our Ordinary Shares, or the threat of being delisted, may materially and adversely affect the value of your investment.” 5 Table of Contents As of the date of this annual report, Gaderway Investments Limited, our largest shareholder, owns more than a majority of the voting power of our outstanding Ordinary Shares.
The delisting of our Class A Ordinary Shares, or the threat of being delisted, may materially and adversely affect the value of your investment.” 5 Table of Contents As of the date of this annual report, Gaderway Investments Limited, our largest shareholder, owns more than a majority of the voting power of our outstanding Ordinary Shares.
The absence of internal controls over financial reporting may inhibit investors from purchasing our Ordinary Shares and may make it more difficult for us to raise funds in a debt or equity financing. Additional material weaknesses or significant deficiencies may be identified in the future.
The absence of internal controls over financial reporting may inhibit investors from purchasing our Class A Ordinary Shares and may make it more difficult for us to raise funds in a debt or equity financing. Additional material weaknesses or significant deficiencies may be identified in the future.
It is also highly uncertain what the potential impacts such modified or new laws and regulations will have on the business operations of the Operating Subsidiaries, our ability to accept foreign investments and the continued listing of our Ordinary Shares on a U.S. or other foreign exchanges.
It is also highly uncertain what the potential impacts such modified or new laws and regulations will have on the business operations of the Operating Subsidiaries, our ability to accept foreign investments and the continued listing of our Class A Ordinary Shares on a U.S. or other foreign exchanges.
Additionally, any further control over offerings conducted overseas and/or foreign investment impacting the Operating Subsidiaries in Hong Kong by the Hong Kong government could result in a material change in our operations, financial performance and/or the value of our Ordinary Shares or impair our ability to raise money.
Additionally, any further control over offerings conducted overseas and/or foreign investment impacting the Operating Subsidiaries in Hong Kong by the Hong Kong government could result in a material change in our operations, financial performance and/or the value of our Class A Ordinary Shares or impair our ability to raise money.
There can be no assurance that we will not be deemed a passive foreign investment company, or PFIC, for U.S. federal income tax purposes for any taxable year, which could result in adverse U.S. federal income tax consequences to U.S. holders of our ordinary shares.
There can be no assurance that we will not be deemed a passive foreign investment company, or PFIC, for U.S. federal income tax purposes for any taxable year, which could result in adverse U.S. federal income tax consequences to U.S. holders of our Class A Ordinary Shares.
It also remains highly uncertain what the potential impact such modified or new laws and regulations will have on our daily business operations, its ability to accept foreign investments and the listing of our Ordinary Shares on a U.S. or other foreign exchanges.
It also remains highly uncertain what the potential impact such modified or new laws and regulations will have on our daily business operations, its ability to accept foreign investments and the listing of our Class A Ordinary Shares on a U.S. or other foreign exchanges.
However, should PRC authorities obstruct or otherwise fail to facilitate the PCAOB’s access in the future, the PCAOB Board will consider the need to issue a new determination. On December 29, 2022, the Consolidated Appropriations Act, was signed into law by President Biden.
However, should PRC authorities obstruct or otherwise fail to facilitate the PCAOB’s access in the future, the PCAOB Board will consider the need to issue a new determination. On December 29, 2022, the Consolidated Appropriations Act, was signed into law by former President Biden.
Risk Factors — Risks Related to Our Ordinary Shares and the Trading Market — As a foreign private issuer, we are permitted to rely on exemptions from certain NASDAQ Stock Exchange corporate governance standards applicable to domestic U.S. issuers.
Risk Factors — Risks Related to Our Class A Ordinary Shares and the Trading Market — As a foreign private issuer, we are permitted to rely on exemptions from certain NASDAQ Stock Exchange corporate governance standards applicable to domestic U.S. issuers.
Any limitation on the ability of the Operating Subsidiaries to make payments to us could have a material adverse effect on our Operating Subsidiaries’ ability to conduct business and might materially decrease the value of our Ordinary Shares or cause them to be worthless.
Any limitation on the ability of the Operating Subsidiaries to make payments to us could have a material adverse effect on our Operating Subsidiaries’ ability to conduct business and might materially decrease the value of our Class A Ordinary Shares or cause them to be worthless.
Our trading in foreign currencies significantly affected by the volatility of the financial and currency market in which we and the Operating Subsidiaries have no control. Any sudden volatility in the financial and currency market in the future may adversely affect the performance of our trading in foreign currencies and lead to realized and unrealized loss.
Our trading in foreign currencies is significantly affected by the volatility of the financial and currency market in which we and the Operating Subsidiaries have no control. Any sudden volatility in the financial and currency market in the future may adversely affect the performance of our trading in foreign currencies and lead to realized and unrealized loss.
A “material weakness” is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.
Specifically, a “material weakness” is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.
Any limitation on the ability of our subsidiaries to make payments to us could have a material adverse effect on the ability to conduct business of the Operating Subsidiaries and might materially decrease the value of our Ordinary Shares or cause them to be worthless.
Any limitation on the ability of our subsidiaries to make payments to us could have a material adverse effect on the ability to conduct business of the Operating Subsidiaries and might materially decrease the value of our Class A Ordinary Shares or cause them to be worthless.
Fluctuations in the market price of our Ordinary Shares may cause us to become a PFIC for the current or subsequent taxable years because the value of our assets for the purpose of the asset test may be determined by reference to the market price of our Ordinary Shares.
Fluctuations in the market price of our Class A Ordinary Shares may cause us to become a PFIC for the current or subsequent taxable years because the value of our assets for the purpose of the asset test may be determined by reference to the market price of our Class A Ordinary Shares.
The market for our Ordinary Shares may have, when compared to seasoned issuers, significant price volatility and we expect that our share price may continue to be more volatile than that of a seasoned issuer for the indefinite future.
The market for our Class A Ordinary Shares may have, when compared to seasoned issuers, significant price volatility and we expect that our share price may continue to be more volatile than that of a seasoned issuer for the indefinite future.
Risk Factors — Risks Related to Our Corporate Structure — Recently, the PRC government initiated a series of regulatory actions and statements to regulate business operations in certain areas in China with little advance notice, including cracking down on illegal activities in the securities market, enhancing supervision over China-based companies listed overseas using the variable interest entity structure, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement.
Risk Factors — Risks Related to Our Corporate Structure — The PRC government has initiated a series of regulatory actions and statements to regulate business operations in certain areas in China with little advance notice, including cracking down on illegal activities in the securities market, enhancing supervision over China-based companies listed overseas using the variable interest entity structure, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement.
If securities or industry analysts do not publish research or reports about our Operating Subsidiaries’ business, or if they publish a negative report regarding our Ordinary Shares, the price of our Ordinary Shares and trading volume could decline.
If securities or industry analysts do not publish research or reports about our Operating Subsidiaries’ business, or if they publish a negative report regarding our Class A Ordinary Shares, the price of our Class A Ordinary Shares and trading volume could decline.
We are aware that, recently, the PRC government initiated a series of regulatory actions and statements to regulate business operations in certain areas in China with little advance notice, including cracking down on illegal activities in the securities market, enhancing supervision over China-based companies listed overseas using the variable interest entity structure, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement.
We are aware that the PRC government has initiated a series of regulatory actions and statements to regulate business operations in certain areas in China with little advance notice, including cracking down on illegal activities in the securities market, enhancing supervision over China-based companies listed overseas using the variable interest entity structure, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement.
If the NASDAQ Capital Market delists our Ordinary Shares from trading, we could face significant consequences, including: ● a limited availability for market quotations for our Ordinary Shares; ● reduced liquidity with respect to our Ordinary Shares; ● a determination that our Ordinary Share is a “penny stock,” which will require brokers trading in our Ordinary Share to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our Ordinary Share; ● limited amount of news and analyst coverage; and ● a decreased ability to issue additional securities or obtain additional financing in the future. 23 Table of Contents Because our Operating Subsidiaries’ business is conducted in Hong Kong dollars and the price of our Ordinary Shares is quoted in United States dollars, changes in currency conversion rates may affect the value of your investments.
If the NASDAQ Capital Market delists our Class A Ordinary Shares from trading, we could face significant consequences, including: ● a limited availability for market quotations for our Class A Ordinary Shares; ● reduced liquidity with respect to our Class A Ordinary Shares; ● a determination that our Ordinary Share is a “penny stock,” which will require brokers trading in our Ordinary Share to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our Ordinary Share; ● limited amount of news and analyst coverage; and ● a decreased ability to issue additional securities or obtain additional financing in the future. 24 Table of Contents Because our Operating Subsidiaries’ business is conducted in Hong Kong dollars and the price of our Class A Ordinary Shares is quoted in United States dollars, changes in currency conversion rates may affect the value of your investments.
For example, recently, the PRC government initiated a series of regulatory actions and statements to regulate business operations in certain areas in China with little advance notice, including a cracking down on illegal activities in the securities market, enhancing supervision over China-based companies listed overseas using the variable interest entity structure, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement.
For example, the PRC government has initiated a series of regulatory actions and statements to regulate business operations in certain areas in China with little advance notice, including a cracking down on illegal activities in the securities market, enhancing supervision over China-based companies listed overseas using the variable interest entity structure, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement.
Recently, the PRC government initiated a series of regulatory actions and statements to regulate business operations in certain areas in China with little or no advance notice, including cracking down on illegal activities in the securities market, enhancing supervision over China-based companies listed overseas using the variable interest entity structure, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement.
The PRC government has initiated a series of regulatory actions and statements to regulate business operations in certain areas in China with little or no advance notice, including cracking down on illegal activities in the securities market, enhancing supervision over China-based companies listed overseas using the variable interest entity structure, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement.
As of the date of this annual report, we do not expect the Cybersecurity Review Measures to have an impact on the Operating Subsidiaries business or operations to subject us or the Operating Subsidiaries to permission requirements from the CAC or any other government agency that is required to approve our operations, as we do not believe that we will be deemed to be an “operator of critical information infrastructure” or a “network platform operator” possessing personal information of more than one million users, that are required to file for cybersecurity review before listing in the U.S., because (i) all operations are conducted by the Operating Subsidiaries which currently mostly serve clients outside mainland China; (ii) we do not have or intend to have, nor do we have or intend to establish, a VIE structure with any entity in mainland China and the Cybersecurity Review Measures remain unclear whether they shall be applied to a company like us; (iii) as of date of this annual report, we have neither collected nor stored any personal information of any mainland China individual or within mainland China, nor do we entrust or expect to be entrusted by any individual or entity to conduct any data processing activities of any mainland China individual or within mainland China; (iv) as of the date of this annual report, we have not been informed by any PRC governmental authority of any requirement that we must file for a cybersecurity review; and (v) pursuant to the Basic Law of the Hong Kong Special Administrative Region, or the Basic Law, PRC laws and regulations shall not be applied in Hong Kong except for those listed in Annex III of the Basic Law (which is confined to laws relating to national defense, foreign affairs and other matters that are not within the scope of autonomy).
As of the date of this annual report, we do not expect the Cybersecurity Review Measures or the Data Security Regulations to have an impact on the Operating Subsidiaries business or operations to subject us or the Operating Subsidiaries to permission requirements from the CAC or any other government agency that is required to approve our operations, as we do not believe that we will be deemed to be an “operator of critical information infrastructure” or a “network platform operator” possessing personal information of more than one million users, that are required to file for cybersecurity review before listing in the U.S., because (i) all operations are conducted by the Operating Subsidiaries which currently mostly serve clients outside mainland China; (ii) we do not have or intend to have, nor do we have or intend to establish, a VIE structure with any entity in mainland China and the Cybersecurity Review Measures remain unclear whether they shall be applied to a company like us; (iii) as of the date of this annual report, we have neither collected nor stored any personal information of any mainland China individual or within mainland China, nor do we entrust or expect to be entrusted by any individual or entity to conduct any data processing activities of any mainland China individual or within mainland China, and the data processed in our business is less likely to have a bearing on national security; (iv) as of the date of this annual report, we have not been informed by any PRC governmental authority of any requirement that we must file for a cybersecurity review; and (v) pursuant to the Basic Law of the Hong Kong Special Administrative Region, or the Basic Law, PRC laws and regulations shall not be applied in Hong Kong except for those listed in Annex III of the Basic Law (which is confined to laws relating to national defense, foreign affairs and other matters that are not within the scope of autonomy).
Recently, the PRC government initiated a series of regulatory actions and statements to regulate business operations in certain areas in China with little advance notice, including a cracking down on illegal activities in the securities market, enhancing supervision over China-based companies listed overseas using the variable interest entity structure, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement.
The PRC government has initiated a series of regulatory actions and statements to regulate business operations in certain areas in China with little advance notice, including a cracking down on illegal activities in the securities market, enhancing supervision over China-based companies listed overseas using the variable interest entity structure, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement.
As of the date of this annual report, we do not plan to pay any further dividends out of our retained earnings in the foreseeable future. 7 Table of Contents Selected Consolidated Financial Schedule The following selected consolidated statements of income and comprehensive income for the years ended December 31, 2023, 2022 and 2021 and selected consolidated balance sheets data as of December 31, 2023, 2022 and 2021 have been derived from our consolidated financial statements included elsewhere in this annual report.
As of the date of this annual report, we do not plan to pay any further dividends out of our retained earnings in the foreseeable future. 7 Table of Contents Selected Consolidated Financial Schedule The following selected consolidated statements of income and comprehensive income for the years ended December 31, 2022, 2023 and 2024 and selected consolidated balance sheets data as of December 31, 2022, 2023 and 2024 have been derived from our consolidated financial statements included elsewhere in this annual report.
Recently, the PRC government initiated a series of regulatory actions and statements to regulate business operations in certain areas in China with little advance notice, including a cracking down on illegal activities in the securities market, enhancing supervision over China-based companies listed overseas, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement, which may in the future impact the Operating Subsidiaries’ ability to conduct business, or our ability to accept foreign investments or list on a U.S. or other foreign exchange if we were to become subject to such regulations.
In addition, the PRC government has initiated a series of regulatory actions and statements to regulate business operations in certain areas in China with little advance notice, including a cracking down on illegal activities in the securities market, enhancing supervision over China-based companies listed overseas, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement, which may in the future impact the Operating Subsidiaries’ ability to conduct business, or our ability to accept foreign investments or list on a U.S. or other foreign exchange if we were to become subject to such regulations.
If the Chinese government chooses to extend oversight and control over offerings that are conducted overseas and/or foreign investment in mainland China-based issuers to Hong Kong-based issuers, such action may significantly limit or completely hinder our ability to offer or continue to offer Ordinary Shares to investors and cause the value of our Ordinary Shares to significantly decline or be worthless.
If the Chinese government chooses to extend oversight and control over offerings that are conducted overseas and/or foreign investment in mainland China-based issuers to Hong Kong-based issuers, such action may significantly limit or completely hinder our ability to offer or continue to offer Class A Ordinary Shares to investors and cause the value of our Class A Ordinary Shares to significantly decline or be worthless.
It is difficult to predict the full impact of the HKAA on Hong Kong and companies with operations in Hong Kong like us. Furthermore, legislative or administrative actions in respect of China-U.S. relations could cause investor uncertainty for affected issuers, including us, and the market price of our Ordinary Shares could be adversely affected.
It is difficult to predict the full impact of the HKAA on Hong Kong and companies with operations in Hong Kong like us. Furthermore, legislative or administrative actions in respect of China-U.S. relations could cause investor uncertainty for affected issuers, including us, and the market price of our Class A Ordinary Shares could be adversely affected.
If we were deemed to be an “operator of critical information infrastructure” or a “network platform operator” possessing personal information of more than one million users, or if other regulations promulgated in relation to the Cybersecurity Review Measures are deemed to apply to us, the business operations of the Operating Subsidiaries and the listing of our Ordinary Shares in the U.S. could be subject to CAC’s cybersecurity review or we and the Operating Subsidiaries might be covered by permission from the CAC or any other government agency that is required to approve our operations in the future.
If we were deemed to be an “operator of critical information infrastructure” or a “network platform operator” possessing personal information of more than one million users, or if other regulations promulgated in relation to the Cybersecurity Review Measures and the Data Security Regulations are deemed to apply to us, the business operations of the Operating Subsidiaries and the listing of our Class A Ordinary Shares in the U.S. could be subject to CAC’s cybersecurity review or we and the Operating Subsidiaries might be covered by permission from the CAC or any other government agency that is required to approve our operations in the future.
If any or all of the foregoing were to occur, it may cause the value of our Ordinary Shares to significantly decline or become worthless. On February 17, 2023, with the approval of the State Council, the CSRC released the Trial Measures and five supporting guidelines, which became effective on March 31, 2023.
If any or all of the foregoing were to occur, it may cause the value of our Class A Ordinary Shares to significantly decline or become worthless. On February 17, 2023, with the approval of the State Council, the CSRC released the Trial Measures and five supporting guidelines, which became effective on March 31, 2023.
If it is later determined that we are required by the Trial Measures to submit to the CRSC and complete the filing procedures with respect to any offering and continued listing, we cannot assure you that we will be able to complete such filings in a timely manner or even at all.
If it is later determined that we are required by the Trial Measures to submit to the CSRC and complete the filing procedures with respect to any offering and continued listing, we cannot assure you that we will be able to complete such filings in a timely manner or even at all.
If one or more of these analysts ceases coverage of our Company or fails to regularly publish reports on us, we could lose visibility in the financial markets, which could cause the price of our Ordinary Shares and the trading volume to decline. The market price for our Ordinary Shares may be volatile.
If one or more of these analysts ceases coverage of our Company or fails to regularly publish reports on us, we could lose visibility in the financial markets, which could cause the price of our Class A Ordinary Shares and the trading volume to decline. The market price for our Class A Ordinary Shares may be volatile.
Should there be any change in applicable laws, regulations, or interpretations, and we or any of the Operating Subsidiaries are required to obtain such permissions or approvals in the future, we will strive to comply with the then applicable laws, regulations, or interpretations. 11 Table of Contents Based on our understanding of the PRC laws and regulations currently in effect, as of the date of this annual report, neither we nor the Operating Subsidiaries are subject to the M&A Rules, the Cybersecurity Review Measures, the Trial Measures or the regulations or policies that have been issued by the CSRC or the CAC as of the date of this annual report, nor are we currently covered by permission requirements from the CSRC, the CAC or any other PRC governmental agency that is required to approve our listing on the U.S. exchanges and offering securities.
Should there be any change in applicable laws, regulations, or interpretations, and we or any of the Operating Subsidiaries are required to obtain such permissions or approvals in the future, we will strive to comply with the then applicable laws, regulations, or interpretations. 11 Table of Contents Based on our understanding of the PRC laws and regulations currently in effect, as of the date of this annual report, neither we nor the Operating Subsidiaries are subject to the M&A Rules, the Cybersecurity Review Measures, the Data Security Regulations, the Trial Measures or the regulations or policies that have been issued by the CSRC, the State Council or the CAC as of the date of this annual report, nor are we currently covered by permission requirements from the CSRC, the CAC or any other PRC governmental agency that is required to approve our listing on the U.S. exchanges and offering securities.
Even though we have fulfilled the listing requirements and other applicable rules of the NASDAQ Capital Market, we may not be able to continue to satisfy these requirements and applicable rules. If we are unable to satisfy the NASDAQ Capital Market criteria for maintaining our listing, our Ordinary Shares could be subject to delisting.
Even though we have fulfilled the listing requirements and other applicable rules of the NASDAQ Capital Market, we may not be able to continue to satisfy these requirements and applicable rules. If we are unable to satisfy the NASDAQ Capital Market criteria for maintaining our listing, our Class A Ordinary Shares could be subject to delisting.
Taxation—United States Federal Income Taxation—PFIC.” 24 Table of Contents Our lack of effective internal controls over financial reporting may affect our ability to accurately report our financial results or prevent fraud, which may affect the market for and price of our Ordinary Share.
Taxation—United States Federal Income Taxation—PFIC.” 25 Table of Contents Our lack of effective internal controls over financial reporting may affect our ability to accurately report our financial results or prevent fraud, which may affect the market for and price of our Ordinary Share.
Investing in our Ordinary Shares involves a high degree of risk, including the risk of losing your entire investment.
Investing in our Class A Ordinary Shares involves a high degree of risk, including the risk of losing your entire investment.
To the extent any new or more stringent measures are required to be implemented, our business, our financial condition and results of operations could be adversely affected and such measures could materially decrease the value of our Ordinary Shares, potentially rendering them worthless.
To the extent any new or more stringent measures are required to be implemented, our business, our financial condition and results of operations could be adversely affected and such measures could materially decrease the value of our Class A Ordinary Shares, potentially rendering them worthless.
In addition, the securities market has from time to time experienced significant price and volume fluctuations that are not related to the operating performance of particular companies. These market fluctuations may also materially and adversely affect the market price of our Ordinary Shares.
In addition, the securities market has from time to time experienced significant price and volume fluctuations that are not related to the operating performance of particular companies. These market fluctuations may also materially and adversely affect the market price of our Class A Ordinary Shares.
Any sudden volatility in the financial and currency market, which are beyond the control of our Operating Subsidiaries, may adversely affect the performance of our trading in foreign currencies and lead to realized and unrealized loss. 18 Table of Contents Unauthorized use of the Operating Subsidiaries’ intellectual property by third parties and expenses incurred in protecting their intellectual property rights may adversely affect their business, reputation and competitive edge.
If we do, any sudden volatility in the financial and currency market, which are beyond the control of our Operating Subsidiaries, may adversely affect the performance of our trading in foreign currencies and lead to realized and unrealized loss. 18 Table of Contents Unauthorized use of the Operating Subsidiaries’ intellectual property by third parties and expenses incurred in protecting their intellectual property rights may adversely affect their business, reputation and competitive edge.
Securities Exchange Act of 1934, as amended, or the Exchange Act); 22 Table of Contents ● have a compensation committee or a nominating or corporate governance committee consisting entirely of independent directors; ● have regularly scheduled executive sessions with only independent directors; or ● have executive sessions of solely independent directors each year.
Securities Exchange Act of 1934, as amended, or the Exchange Act); 23 Table of Contents ● have a compensation committee or a nominating or corporate governance committee consisting entirely of independent directors; ● have regularly scheduled executive sessions with only independent directors; or ● have executive sessions of solely independent directors each year.
This agreement has given Hong Kong the freedom to function with a high degree of autonomy. The Special Administrative Region of Hong Kong is responsible for its own domestic affairs including, but not limited to, the judiciary and courts of last resort, immigration and customs, public finance, currencies and extradition. Hong Kong continues using the English common law system.
This agreement has given Hong Kong the freedom to function with a high degree of autonomy. Hong Kong is responsible for its own domestic affairs including, but not limited to, the judiciary and courts of last resort, immigration and customs, public finance, currencies and extradition. Hong Kong continues using the English common law system.
Any significant revaluation of the Hong Kong dollar may materially and adversely affect our cash flows, revenue and financial condition. Volatility in our Ordinary Shares price may subject us to securities litigation.
Any significant revaluation of the Hong Kong dollar may materially and adversely affect our cash flows, revenue and financial condition. Volatility in our Class A Ordinary Shares price may subject us to securities litigation.
Such volatility, including any stock-run up, may be unrelated to our actual or expected operating performance and financial condition or prospects, making it difficult for prospective investors to assess the rapidly changing value of our Ordinary Shares. 25 Table of Contents In addition, if the trading volumes of our Ordinary Shares are low, persons buying or selling in relatively small quantities may easily influence prices of our Ordinary Shares.
Such volatility, including any stock-run up, may be unrelated to our actual or expected operating performance and financial condition or prospects, making it difficult for prospective investors to assess the rapidly changing value of our Class A Ordinary Shares. 26 Table of Contents In addition, if the trading volumes of our Class A Ordinary Shares are low, persons buying or selling in relatively small quantities may easily influence prices of our Class A Ordinary Shares.
The delisting of our Ordinary Shares, or the threat of being delisted, may materially and adversely affect the value of your investment. The HFCA Act, was enacted on December 18, 2020.
The delisting of our Class A Ordinary Shares, or the threat of being delisted, may materially and adversely affect the value of your investment. The HFCA Act, was enacted on December 18, 2020.
The price of our Ordinary Shares could be subject to rapid and substantial volatility, and such volatility may make it difficult for prospective investors to assess the rapidly changing value of our Ordinary Shares.
The price of our Class A Ordinary Shares could be subject to rapid and substantial volatility, and such volatility may make it difficult for prospective investors to assess the rapidly changing value of our Class A Ordinary Shares.
According to the Companies Ordinance of Hong Kong, a Hong Kong company may only make a distribution out of profits available for distribution. Other than the above, we did not adopt or maintain any cash management policies and procedures as of the date of this annual report.
According to the Companies Ordinance (Cap.622, Laws of Hong Kong), a Hong Kong company may only make a distribution out of profits available for distribution. Other than the above, we did not adopt or maintain any cash management policies and procedures as of the date of this annual report.
As an “emerging growth company” under applicable law, we are subject to lessened disclosure requirements. Such reduced disclosure may make our Ordinary Shares less attractive to investors.
As an “emerging growth company” under applicable law, we are subject to lessened disclosure requirements. Such reduced disclosure may make our Class A Ordinary Shares less attractive to investors.

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Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

51 edited+4 added−2 removed123 unchanged
Biggest changeOur agent for service of process in the United States is Cogency Global Inc., 122 East 42nd Street, 18th Floor, New York, NY 10168. The SEC maintains a website at www.sec.gov that contains reports, proxy, and information statements, and other information regarding issuers that file electronically with the SEC using its EDGAR system.
Biggest changeThe information contained on our website is not a part of this annual report. Our agent for service of process in the United States is Cogency Global Inc., 122 East 42nd Street, 18th Floor, New York, NY 10168.
Address Gross Floor Area Use of the Property Lease Term Unit 1801, Fortis Tower, 77-79 Gloucester Road, Wan Chai, Hong Kong 3750 (sq./ft) Office From January 31, 2022 to January 30, 2024 From January 31, 2024 to January 30, 2026 (Renewed) Carparking Space No. 33 on 2/Floor, Fortis Tower, NOS. 77, 78-79 Gloucester Road, Hong Kong N/A Parking Lot From January 31, 2022 to January 30, 2023 From January 31, 2023 to January 30, 2024 From January 31, 2024 to January 30, 2025 (Renewed) Carparking Space No. 62 on 3/Floor, Fortis Tower, NOS. 77, 78-79 Gloucester Road, Hong Kong N/A Parking Lot From January 31, 2022 to January 30, 2024 No longer renewed after expiration Carparking Space No. 74 on 3/Floor, Fortis Tower, NOS. 77, 78-79 Gloucester Road, Hong Kong N/A Parking Lot From January 31, 2024 to January 30, 2025 Intellectual Properties Domain Name We are the registrants of the following domain names: goldtradingsignal.com, mfintrader.com, tradingguard.net, tradingsky.net, omegatraders.com, fx24k.com, m-finance.net, m-finance.com, m-finance.hk, mfcloud.net, mmaster.com. algotraders.finance, tradingengine.net.
Address Gross Floor Area Use of the Property Lease Term Unit 1801, Fortis Tower, 77-79 Gloucester Road, Wan Chai, Hong Kong 3750 (sq./ft) Office From January 31, 2022 to January 30, 2024 From January 31, 2024 to January 30, 2026 (Renewed) Carparking Space No. 33 on 2/Floor, Fortis Tower, NOS. 77, 78-79 Gloucester Road, Hong Kong N/A Parking Lot From January 31, 2022 to January 30, 2023 From January 31, 2023 to January 30, 2024 From January 31, 2024 to January 30, 2025 From January 31, 2025 to January 30, 2026 (Renewed) Carparking Space No. 62 on 3/Floor, Fortis Tower, NOS. 77, 78-79 Gloucester Road, Hong Kong N/A Parking Lot From January 31, 2022 to January 30, 2024 No longer renewed after expiration Carparking Space No. 74 on 3/Floor, Fortis Tower, NOS. 77, 78-79 Gloucester Road, Hong Kong N/A Parking Lot From January 31, 2024 to January 30, 2025 From January 31, 2025 to January 30, 2026 (Renewed) Intellectual Properties Domain Name We are the registrants of the following domain names: goldtradingsignal.com, mfintrader.com, tradingguard.net, tradingsky.net, omegatraders.com, fx24k.com, m-finance.net, m-finance.com, m-finance.hk, mfcloud.net, mmaster.com. algotraders.finance, tradingengine.net.
Any person who fails to apply for business registration shall be guilty of an offence and shall be liable to a fine of HK$5,000 and to imprisonment for 1 year. As of the date of this annual report, each of the Operating Subsidiaries has obtained and maintains a valid business registration certificate.
Any person who fails to apply for business registration shall be guilty of an offence and shall be liable to a fine of HK$5,000 and imprisonment for 1 year. As of the date of this annual report, each of the Operating Subsidiaries has obtained and maintains a valid business registration certificate.
Regulations related to employment and labor protection Employment Ordinance (Chapter 57 of the Laws of Hong Kong) The Employment Ordinance, or the EO, is an ordinance enacted for, amongst other things, the protection of the wages of employees and the regulation of the general conditions of employment and employment agencies.
Regulations related to employment and labor protection Employment Ordinance (Chapter 57 of the Laws of Hong Kong) The Employment Ordinance, or the EO, is an ordinance enacted for, amongst other things, the protection of wages of employees and the regulation of the general conditions of employment and employment agencies.
An employer who willfully and without reasonable excuse fails to pay wages to an employee when it becomes due is liable to prosecution and, upon conviction, to a fine of HK$350,000 and to imprisonment for three years.
An employer who willfully and without reasonable excuse fails to pay wages to an employee when it becomes due is liable to prosecution and, upon conviction, to a fine of HK$350,000 and imprisonment for three years.
In the event of contravention of a competition rule, the Competition Tribunal may (i) on application by the Competition Commission, impose pecuniary penalty of any amount it considers appropriate subject to a maximum of 10% of the turnover of the undertaking concerned for each year in which the contravention occurred for each single contravention (if the contravention occurred in more than three years, 10% of the turnover of the undertaking for the three years that saw the highest, second highest and third highest turnover); (ii) on application by the Competition Commission, make an order disqualifying a person from being a director of a company or from otherwise being concerned in the affairs of a company; (iii) make orders it considers appropriate, including but not limited to prohibiting an entity from making or giving effect to an agreement, requiring modification or termination of an agreement, requiring payment of damages to a person who has suffered loss or damage as a result of the contravention. 41 Table of Contents Laws in Relation to Intellectual Property Rights Copyright Ordinance (Chapter 528 of the Laws of Hong Kong) The Copyright Ordinance currently in force in Hong Kong came into effect on June 27, 1997.
In the event of contravention of a competition rule, the Competition Tribunal may (i) on application by the Competition Commission, impose pecuniary penalty of any amount it considers appropriate subject to a maximum of 10% of the turnover of the undertaking concerned for each year in which the contravention occurred for each single contravention (if the contravention occurred in more than three years, 10% of the turnover of the undertaking for the three years that saw the highest, second highest and third highest turnover); (ii) on application by the Competition Commission, make an order disqualifying a person from being a director of a company or from otherwise being concerned in the affairs of a company; (iii) make orders it considers appropriate, including but not limited to prohibiting an entity from making or giving effect to an agreement, requiring modification or termination of an agreement, requiring payment of damages to a person who has suffered loss or damage as a result of the contravention. 42 Table of Contents Laws in Relation to Intellectual Property Rights Copyright Ordinance (Chapter 528 of the Laws of Hong Kong) The Copyright Ordinance currently in force in Hong Kong came into effect on June 27, 1997.
Our principal Hong Kong subsidiary, m-FINANCE, established in 2002, is a Hong Kong-based experienced financial trading solution provider principally engaged in the development and provision of financial trading solutions. m-FINANCE has approximately 20 years of experience in providing real-time mission critical forex, bullion/commodities trading platform solutions, financial value-added services, mobile applications and financial information for brokers and institutional clients via internet or platform as software as a service. m-FINANCE has provided a wide range of top-notch services, including mF4 Trading Platform, Bridge and Plugins, CRM System, ECN System, Liquidity Solutions, Cross-platform “Broker+” Solution, Social Trading Applications and other value-added services. m-FINANCE has been committed to providing an advanced trading platform and innovative one-stop trading solution that fits for the Asian market, with clients located over mainland China, Hong Kong and Southeast Asia. m-FINANCE’s customers are mainly financial institutions, including brokers, investment banks, institutional clients and financial services providers.
Our principal Hong Kong subsidiary, m-FINANCE, established in 2002, is a Hong Kong-based experienced financial trading solution provider principally engaged in the development and provision of financial trading solutions. m-FINANCE has approximately 20 years of experience in providing real-time mission critical forex, bullion/commodities trading platform solutions, financial value-added services, mobile applications and financial information for brokers and institutional clients via internet or platform as software as a service. m-FINANCE has provided a wide range of top-notch services, including mF4 Trading Platform, Trader Pro, Bridge and Plugins, CRM System, ECN System, Liquidity Solutions, Cross-platform “Broker+” Solution, Social Trading Applications and other value-added services. m-FINANCE has been committed to providing an advanced trading platform and innovative one-stop trading solution that fits for the Asian market, with clients located over mainland China, Hong Kong and Southeast Asia. m-FINANCE’s customers are mainly financial institutions, including brokers, investment banks, institutional clients and financial services providers.
According to the Fourth Schedule of the ECO, the insured amount shall be not less than HK$100,000,000 per event if a company has no more than 200 employees. Any employer who contravenes this requirement commits a criminal offence and is liable on conviction to a fine and imprisonment.
According to the Fourth Schedule of the ECO, the insured amount shall be not less than HK$100,000,000 per event if a company has not more than 200 employees. Any employer who contravenes this requirement commits a criminal offence and is liable on conviction to a fine and imprisonment.
Our Front, Middle and Back Office modules allow traders, introducing brokers and account managers, dealers, settlement and credit officers to easily monitor and execute trades, perform risk management and account openings, and operate the trading business in a secured and stable environment. m-FINANCE’s trader terminal comes in .NET, Java, iOS, Android and HTML5 versions, providing the greatest flexibility for traders to manage their positions and place orders anytime, anywhere. 29 Table of Contents In order to address the various needs of clients, the platform is designed to be highly configurable to address specific business requirements without being required to redeploy or rebuild the applications.
Our Front, Middle and Back Office modules allow traders, introducing brokers and account managers, dealers, settlement and credit officers to easily monitor and execute trades, perform risk management and account openings, and operate the trading business in a secured and stable environment. m-FINANCE’s trader terminal comes in .NET, Java, iOS, Android and HTML5 versions, providing the greatest flexibility for traders to manage their positions and place orders anytime, anywhere. 30 Table of Contents In order to address the various needs of clients, the platform is designed to be highly configurable to address specific business requirements without being required to redeploy or rebuild the applications.
Sensitive data is only accessible to approved parties of the customers through the services provided by our Operating Subsidiaries. All access to production systems are logged, and every logging party only has limited access time to the systems. Firewalls The Operating Subsidiaries employ redundant firewalls for monitoring and filtering network traffic.
Sensitive data is only accessible to approved parties of the customers through the services provided by our Operating Subsidiaries. All accesses to production systems are logged, and every logging party only has limited access time to the systems. Firewalls The Operating Subsidiaries employ redundant firewalls for monitoring and filtering network traffic.
The DTROP requires a person to report to an authorized officer if he/she knows or suspects that any property (directly or indirectly) is the proceeds from drug trafficking or is intended to be used or was used in connection with drug trafficking, and failure to make such disclosure constitutes an offence under the DTROP. 42 Table of Contents Organized and Serious Crimes Ordinance (Chapter 455 of the Laws of Hong Kong) The Organized and Serious Crimes Ordinance, or the OSCO, empowers officers of the Hong Kong Police Force and the Hong Kong Customs and Excise Department to investigate organized crime and triad activities, and it gives the Hong Kong courts jurisdiction to confiscate the proceeds from organized and serious crimes, to issue restraint orders and charging orders in relation to the property of defendants of specified offences.
The DTROP requires a person to report to an authorized officer if he/she knows or suspects that any property (directly or indirectly) is the proceeds from drug trafficking or is intended to be used or was used in connection with drug trafficking, and failure to make such disclosure constitutes an offence under the DTROP. 43 Table of Contents Organized and Serious Crimes Ordinance (Chapter 455 of the Laws of Hong Kong) The Organized and Serious Crimes Ordinance, or the OSCO, empowers officers of the Hong Kong Police Force and the Hong Kong Customs and Excise Department to investigate organized crime and triad activities, and it gives the Hong Kong courts jurisdiction to confiscate the proceeds from organized and serious crimes, to issue restraint orders and charging orders in relation to the property of defendants of specified offences.
We expect to continuously help m-FINANCE grow its client base with increased customer-focused, which will require understanding what customers need, the experiences they covet and the heightened importance of financial well-being. m-FINANCE plans to refine its strategies and services by designing and delivering customer experiences to increase trust and loyalty, creating seamless interactions with the clients and providing flexible solutions that easily respond to shifting customer needs and aspirations. 27 Table of Contents Establishment of a proprietary trading platform for Algo-traders Our management expects that algorithmic trading will become more and more common.
We expect to continuously help m-FINANCE grow its client base with increased customer-focused, which will require understanding what customers need, the experiences they covet and the heightened importance of financial well-being. m-FINANCE plans to refine its strategies and services by designing and delivering customer experiences to increase trust and loyalty, creating seamless interactions with the clients and providing flexible solutions that easily respond to shifting customer needs and aspirations. 28 Table of Contents Establishment of a proprietary trading platform for Algo-traders Our management expects that algorithmic trading will become more and more common.
By introducing new functions to cater different business models, the mF CRM system can help brokers manage their entire business effectively whilst reducing trading risk. 30 Table of Contents Liquidity solutions m-FINANCE provides liquidity services to customers for the use of the fully automatic hedging solution and sending their clients’ orders directly to the liquidity providers such as institutional brokers, market makers, exchanges and prime of prime brokers. m-FINANCE’s solution supports Financial Information Exchange (FIX), which is the de-facto standard for international real-time exchange of transactions among financial institutions.
By introducing new functions to cater different business models, the mF CRM system can help brokers manage their entire business effectively whilst reducing trading risk. 31 Table of Contents Liquidity solutions m-FINANCE provides liquidity services to customers for the use of the fully automatic hedging solution and sending their clients’ orders directly to the liquidity providers such as institutional brokers, market makers, exchanges and prime of prime brokers. m-FINANCE’s solution supports Financial Information Exchange (FIX), which is the de-facto standard for international real-time exchange of transactions among financial institutions.
The EO establishes a no-fault and non-contributory employee compensation system for work injuries and lays down the rights and obligations of employers and employees in respect of injuries or death caused by accidents arising out of and in the course of employment, or by prescribed occupational diseases. 38 Table of Contents Under the ECO, if an employee sustains an injury or dies as a result of an accident arising out of and in the course of his employment, his employer is in general liable to pay compensation even if the employee might have committed acts of faults or negligence when the accident occurred.
The EO establishes a no-fault and non-contributory employee compensation system for work injuries and lays down the rights and obligations of employers and employees in respect of injuries or death caused by accidents arising out of and in the course of employment, or by prescribed occupational diseases. 39 Table of Contents Under the ECO, if an employee sustains an injury or dies as a result of an accident arising out of and in the course of his employment, his employer is in general liable to pay compensation even if the employee might have committed acts of faults or negligence when the accident occurred.
The PDPO also gives data subjects certain rights, inter alia: ● the right to be informed by a data user whether the data user holds personal data of which the individual is the data subject; ● if the data user holds such data, to be supplied with a copy of such data; and ● the right to request correction of any data they consider to be inaccurate. 43 Table of Contents The PDPO criminalizes, including but not limited to, the misuse or inappropriate use of personal data in direct marketing activities, non-compliance with a data access request and the unauthorized disclosure of personal data obtained without the relevant data user’s consent.
The PDPO also gives data subjects certain rights, inter alia: ● the right to be informed by a data user whether the data user holds personal data of which the individual is the data subject; ● if the data user holds such data, to be supplied with a copy of such data; and ● the right to request correction of any data they consider to be inaccurate. 44 Table of Contents The PDPO criminalizes, including but not limited to, the misuse or inappropriate use of personal data in direct marketing activities, non-compliance with a data access request and the unauthorized disclosure of personal data obtained without the relevant data user’s consent.
Thess provide customers the highest flexibility to operate their trading platform business based on their individual business development strategy or marketing needs at a lower operating cost. 31 Table of Contents Social and copy trading (“CopyMaster”) Copy trading is gaining popularity because it provides users with the opportunity to follow the trading portfolio of successful traders’ transactions such as buy/sell events and profit & loss summary.
Thess provide customers the highest flexibility to operate their trading platform business based on their individual business development strategy or marketing needs at a lower operating cost. 32 Table of Contents Social and copy trading (“CopyMaster”) Copy trading is gaining popularity because it provides users with the opportunity to follow the trading portfolio of successful traders’ transactions such as buy/sell events and profit & loss summary.
Revenue Model Our revenue model is subject to the type of services provision to clients, which include: Fee Type Trading Platform CRM Liquidity Solutions CopyMaster Broker+ FVAS 1 Initial set up, installation and customization services (Note 1) Y Y Y Y Y Y 2 Subscriptions (Note 2) Y Y Y Y 3 Hosting, support and maintenance services (Note 2) Y Y Y Y Y O 4 White label services (Note 2) O 5 Liquidity services income (Note 3) Y 6 Quotes/news/package subscription services (Note 2) O Y 32 Table of Contents Remarks: O = Optional fee Notes: 1.
Revenue Model Our revenue model is subject to the type of services provision to clients, which include: Fee Type Trading Platform CRM Liquidity Solutions CopyMaster Broker+ FVAS 1 Initial set up, installation and customization services (Note 1) Y Y Y Y Y Y 2 Subscriptions (Note 2) Y Y Y Y 3 Hosting, support and maintenance services (Note 2) Y Y Y Y Y O 4 White label services (Note 2) O 5 Liquidity services income (Note 3) Y 6 Quotes/news/package subscription services (Note 2) O Y 33 Table of Contents Remarks: O = Optional fee Notes: 1.
Directors and Senior Management” for further details of the management’s biographies. 28 Table of Contents The extensive experience and market foresight of the management team, supported by a team of high-caliber solution analysts and application developers, we believe will be able to help m-FINANCE capitalize on the industry expertise, adapt to the changes in market conditions, and formulate and execute business strategies effectively.
Directors and Senior Management” for further details of the management’s biographies. 29 Table of Contents The extensive experience and market foresight of the management team, supported by a team of high-caliber solution analysts and application developers, we believe will be able to help m-FINANCE capitalize on the industry expertise, adapt to the changes in market conditions, and formulate and execute business strategies effectively.
Strong local partnership allows efficient access to local networks and information, which our management believes is a key advantage to our Operating Subsidiaries. 35 Table of Contents Material Licenses, Certificates and Approvals All of our active Operating Subsidiaries were formed and are operating in Hong Kong, and they have received all required permissions from Hong Kong authorities to operate their current business in Hong Kong, namely, their business registration certificates.
Strong local partnership allows efficient access to local networks and information, which our management believes is a key advantage to our Operating Subsidiaries. 36 Table of Contents Material Licenses, Certificates and Approvals All of our active Operating Subsidiaries were formed and are operating in Hong Kong, and they have received all required permissions from Hong Kong authorities to operate their current business in Hong Kong, namely, their business registration certificates.
Offences committed under the BVI DPA may result in fines (up to US$500,000 in certain cases) or imprisonment. Further, a data subject who suffers damage or distress as a result of their data being processed in contravention of the BVI DPA may institute civil proceedings in the British Virgin Islands courts. 44 Table of Contents C. Organizational Structure See “—A.
Offences committed under the BVI DPA may result in fines (up to US$500,000 in certain cases) or imprisonment. Further, a data subject who suffers damage or distress as a result of their data being processed in contravention of the BVI DPA may institute civil proceedings in the British Virgin Islands courts. 45 Table of Contents C. Organizational Structure See “—A.
We did not have any key clients on which we depended during the years ended December 31, 2021, 2022 and 2023. Since the revenue generated by each client depends on the type and amounts of services consumed, it is possible for any client or potential client to become a top five client for a fiscal year.
We did not have any key clients on which we depended during the years ended December 31, 2022, 2023 and 2024. Since the revenue generated by each client depends on the type and amounts of services consumed, it is possible for any client or potential client to become a top five client for a fiscal year.
As of the date of this annual report, m-FINANCE’s trading platform is handling a monthly average transaction value of over US$100 billion. 26 Table of Contents Revenues are primarily generated from the operations of the Operating Subsidiaries providing trading platform solutions and financial value-added services via internet or platform as software as a service.
As of the date of this annual report, m-FINANCE’s trading platform is handling a monthly average transaction value of over US$100 billion. 27 Table of Contents Revenues are primarily generated from the operations of the Operating Subsidiaries providing trading platform solutions and financial value-added services via internet or platform as software as a service.
Other than as disclosed above, none of our directors, their close associates, nor any shareholders who owned more than 5% of the issued shares of our Company, as of the date of this annual report, had any interest in any of the five largest service providers during the years ended on December 31, 2021, 2022 and 2023.
Other than as disclosed above, none of our directors, their close associates, nor any shareholders who owned more than 5% of the issued shares of our Company, as of the date of this annual report, had any interest in any of the five largest service providers during the years ended on December 31, 2022, 2023 and 2024.
As of the date of this annual report, we are not aware of any of the major clients having experienced material financial difficulties that may materially affect our or the Operating Subsidiaries’ business. Service Providers During the years of December 31, 2021, 2022 and 2023, the suppliers were all IT service providers.
As of the date of this annual report, we are not aware of any of the major clients having experienced material financial difficulties that may materially affect our or the Operating Subsidiaries’ business. Service Providers During the years of December 31, 2022, 2023 and 2024, the suppliers were all IT service providers.
None of our directors, their close associates, or any shareholders who owned more than 5% of the issued shares of our Company, as of the date of this annual report, had any interest in any of the five largest clients of Operating Subsidiaries during the years ended December 31, 2021, 2022 and 2023.
None of our directors, their close associates, or any shareholders who owned more than 5% of the issued shares of our Company, as of the date of this annual report, had any interest in any of the five largest clients of Operating Subsidiaries during the years ended December 31, 2022, 2023 and 2024.
The following two facts further indicate that there is no key client on which we were dependent during the years ended December 31, 2021, 2022 and 2023: (i) the total revenue generated by the top five clients represents less than 40% of the revenue of the Operating Subsidiaries for the years ended December 31, 2021, 2022 and 2023; and (ii) the top five clients were not exactly the same for the years ended December 31, 2021, 2022 and 2023. 33 Table of Contents Salient Terms of Service Agreements Scope of services The Operating Subsidiaries generally enter into written service agreements with clients that set out the scope of services to be provided, and will include the provision of one or more of our development and financial trading solutions services, subject to the request of the customers.
The following two facts further indicate that there is no key client on which we were dependent during the years ended December 31, 2022, 2023 and 2024: (i) the total revenue generated by the top five clients represents less than 40% of the revenue of the Operating Subsidiaries for the years ended December 31, 2022, 2023 and 2024; and (ii) the top five clients were not exactly the same for the years ended December 31, 2022, 2023 and 2024. 34 Table of Contents Salient Terms of Service Agreements Scope of services The Operating Subsidiaries generally enter into written service agreements with clients that set out the scope of services to be provided, and will include the provision of one or more of our development and financial trading solutions services, subject to the request of the customers.
Any employer who contravenes the requirement of paying mandatory contributions to the MPF Scheme commits a criminal offence and is liable on conviction to a maximum fine of HK$50,000 and imprisonment for six months on the first conviction and maximum fine of HK$100,000 and imprisonment for one year on each subsequent conviction.
Any employer who contravenes the requirement of paying mandatory contributions to the MPF Scheme commits a criminal offence and is liable on conviction to a maximum fine of HK$100,000 and imprisonment for six months on the first conviction and a maximum fine of HK$200,000 and imprisonment for one year on each subsequent conviction.
Our top five suppliers during the years ended December 31, 2021, 2022 and 2023 did not grant credit terms to us and payments made to them were generally made by check and settled in HK$.
Our top five suppliers during the years ended December 31, 2022, 2023 and 2024 did not grant credit terms to us and payments made to them were generally made by check and settled in HK$.
The Operating Subsidiaries were not subject to, nor did they receive, any insurance claims during the years ended on December 31, 2021, 2022 and 2023, and as of the date of this annual report.
The Operating Subsidiaries were not subject to, nor did they receive, any insurance claims during the years ended on December 31, 2022, 2023 and 2024, and as of the date of this annual report.
Certain categories of taxpayers (for example, financial institutions, insurance companies and securities dealers) are likely to be regarded as deriving trading gains rather than capital gains unless these taxpayers can prove that the investment securities are held for long-term investment purposes. 40 Table of Contents Stamp Duty Ordinance (Chapter 117 of the Laws of Hong Kong) Under the Stamp Duty Ordinance, the Hong Kong stamp duty currently charged at the ad valorem rate of 0.13% on the higher of the consideration for or the market value of the shares, will be payable by the purchaser on every purchase and by the seller on every sale of Hong Kong shares (in other words, a total of 0.26% is currently payable on a typical sale and purchase transaction of Hong Kong shares).
Certain categories of taxpayers (for example, financial institutions, insurance companies and securities dealers) are likely to be regarded as deriving trading gains rather than capital gains unless these taxpayers can prove that the investment securities are held for long-term investment purposes. 41 Table of Contents Stamp Duty Ordinance (Chapter 117 of the Laws of Hong Kong) Under the Stamp Duty Ordinance, the Hong Kong stamp duty currently charged at the ad valorem rate of 0.1% on the higher of the consideration for or the market value of the shares, will be payable by the purchaser on every purchase and by the seller on every sale of Hong Kong shares (in other words, a total of 0.2% is currently payable on a typical sale and purchase transaction of Hong Kong shares).
Employers must, as far as reasonably practicable, ensure the safety and health at work of all employees by: ● providing and maintaining plant and systems of work that are safe and without risks to health; ● making arrangements for ensuring safety and absence of risks to health in connection with the use, handling, storage or transport of plant or substances; ● providing all necessary information, instruction, training, and supervision for ensuring safety and health; and ● as regards any workplace under the employer’s control, maintaining the workplace in a condition that is safe and without risks to health and providing and maintaining means of access to and egress from the workplace that are safe and without risks to health Failure to comply with any of the above provisions constitutes an offence and the employer is liable on conviction to a fine of HK$200,000.
Employers must, as far as reasonably practicable, ensure the safety and health at work of all employees by: ● providing and maintaining plant and systems of work that are safe and without risks to health; ● making arrangements for ensuring safety and absence of risks to health in connection with the use, handling, storage or transport of plant or substances; ● providing all necessary information, instruction, training, and supervision for ensuring safety and health; ● as regards any workplace under the employer’s control, maintaining the workplace in a condition that is safe and without risks to health and providing and maintaining means of access to and egress from the workplace that are safe and without risks to health; and ● providing or maintaining a working environment for the employer’s employees that is, so far as reasonably practicable, safe and without risks to health Failure to comply with any of the above provisions constitutes an offence and the employer is liable on summary conviction to a fine of HK$3,000,000.
The Operating Subsidiaries recruit new clients via existing client referrals, personal networking, online advertisement, promotion, digital marketing, and exhibition. As of the date of this annual report, the Operating Subsidiaries do not offer any incentive for client referrals. For the years ended December 31, 2021, 2022 and 2023, we had 64, 60 and 54, respectively.
The Operating Subsidiaries recruit new clients via existing client referrals, personal networking, online advertisement, promotion, digital marketing, and exhibition. As of the date of this annual report, the Operating Subsidiaries do not offer any incentive for client referrals. For the years ended December 31, 2022, 2023 and 2024, we had 60, 54 and 49, respectively.
Term During the years ended December 31, 2021, 2022 and 2023, the service agreements entered were generally for a period of 1 year.
Term During the years ended December 31, 2022, 2023 and 2024, the service agreements entered were generally for a period of 1 year.
For the year ended December 31, 2021, our five largest service providers accounted for 7.2%, 5.4%, 2.8%, 1.8% and 1.6%, respectively, of our total cost of revenue. For the year ended December 31, 2022, our five largest service providers accounted for 5.2%, 4.0%, 2.8%, 1.7% and 1.0%, respectively, of our total cost of revenue.
For the year ended December 31, 2022, our five largest service providers accounted for 5.2%, 4.0%, 2.8%, 1.7% and 1.0%, respectively, of our total cost of revenue. For the year ended December 31, 2023, our five largest service providers accounted for 6.6%, 3.3%, 2.0%, 1.5% and 1.3%, respectively, of our total cost of revenue.
As of the date of this annual report, neither we nor the Operating Subsidiaries had any significant disputes with any of other service providers for the years ended December 31, 2021, 2022 and 2023.
As of the date of this annual report, neither we nor the Operating Subsidiaries had any significant disputes with any of the service providers for the years ended December 31, 2022, 2023 and 2024.
An employer who fails to do so intentionally, knowingly or recklessly commits an offence and is liable on conviction to a fine of HK$200,000 and to imprisonment of six months.
An employer who fails to do so intentionally, knowingly or recklessly commits an offence and is liable on summary conviction to a fine of HK$3,000,000 and imprisonment of six months.
Seasonality Our Operating Subsidiaries’ operations do not typically experience any seasonality. 36 Table of Contents Employees As of the date of this annual report, there are 33 employees in our Company, including the Operating Subsidiaries. As of December 31, 2023 and 2022, we had 32 and 28 employees, respectively. All of the employees are stationed in Hong Kong.
Seasonality Our Operating Subsidiaries’ operations do not typically experience any seasonality. 37 Table of Contents Employees As of the date of this annual report, there are 36 employees in our Company, including the Operating Subsidiaries. As of December 31, 2024 and 2023, we had 34 and 32 employees, respectively. All of the employees are stationed in Hong Kong.
For the year ended December 31, 2023, our five largest service providers accounted for 6.6%, 3.3%, 2.0%, 1.5% and 1.3%, respectively, of our total cost of revenue. 34 Table of Contents Our directors, Tai Wai (Stephen) Lam and Chi Weng Tam, who are also the shareholders who owned more than 5% of the number of issued Ordinary Shares of our Company as of the date of this annual report, own 100% equity interests in one of the service providers, PrimeTime Global Technologies Limited through Gaderway Investments Limited.
For the year ended December 31, 2024, our five largest service providers accounted for 6.8%, 3.6%, 1.8%, 1.3% and 1.2%, respectively, of our total cost of revenue. 35 Table of Contents Our directors, Tai Wai (Stephen) Lam and Chi Weng Tam, who are also the shareholders who owned more than 5% of the issued Class B Ordinary Shares as of the date of this annual report, own 100% equity interests in one of the service providers, PrimeTime Global Technologies Limited through Gaderway Investments Limited.
The following table sets forth a breakdown of the number of our employees by job functions as of the date of this annual report: Job Functions Number of Employees Management 2 Business Analyst/Quality Assurance 7 Design 1 Finance 1 Finance and Administration 1 Office Administration 1 Project Management 2 Sales and Marketing 1 Software Development 11 Technical Support 6 Total 33 For the years ended December 31, 2021, 2022 and 2023, there was no strike or labor dispute with the staff and we believe the relationships with the employees and work environment are generally positive.
The following table sets forth a breakdown of the number of our employees by job functions as of the date of this annual report: Job Functions Number of Employees Management 2 Business Analyst/Quality Assurance 6 Design 1 Finance 2 Finance and Administration 1 Office Administration 1 Operations 2 Sales and Marketing 4 Software Development 12 Technical Support 5 Total 36 For the years ended December 31, 2022, 2023, and 2024, there was no strike or labor dispute with the staff and we believe the relationships with the employees and work environment are generally positive.
During the years ended on December 31, 2021, 2022 and 2023, the staff costs of the employees, including salaries, contributions to Mandatory Provident Fund Scheme Ordinance (the “MPFSO”, a retirement scheme in Hong Kong where employers are required to contribute certain amount of employee’s monthly income to the fund) and other benefits were approximately HK$15,270,802, HK$16,332,699 and HK$16,509,766 (US$2,113,683), respectively.
During the years ended on December 31, 2022, 2023 and 2024, the staff costs of the employees, including salaries, contributions to Mandatory Provident Fund Scheme Ordinance (the “MPFSO”, a retirement scheme in Hong Kong where employers are required to contribute certain amount of employee’s monthly income to the fund) and other benefits were approximately HK$16,332,699 and HK$16,509,766, and HK$18,813,515 (US$2,422,019), respectively.
Termination The service agreements generally grant both counterparties the right to terminate the contracts by providing written notice to the other party within the specified timeframe. Top Five Clients For the year ended December 31, 2021, our five largest customers accounted for 10.5%, 7.9%, 7.1%, 5.9% and 4.8%, respectively, of our total revenues.
Termination The service agreements generally grant both counterparties the right to terminate the contracts by providing written notice to the other party within the specified timeframe. Top Five Clients For the year ended December 31, 2022, our five largest customers accounted for 18.0%, 6.1%, 5.0%, 4.3% and 4.2%, respectively, of our total revenues.
Subject to the minimum and maximum relevant income levels, it is mandatory for both employers and their employees to contribute 5% of the employee’s relevant income to the MPF Scheme. 39 Table of Contents Any employer who contravenes the requirement of enrolling eligible employees in a registered MPF Scheme commits a criminal offence and is liable on conviction to a maximum fine of HK$50,000 and imprisonment for six months on the first conviction and maximum fine of HK$100,000 and imprisonment for one year on each subsequent conviction.
Subject to the minimum and maximum relevant income levels, it is mandatory for both employers and their employees to contribute 5% of the employee’s relevant income to the MPF Scheme. 40 Table of Contents Any employer who contravenes the requirement of enrolling eligible employees in a registered MPF Scheme commits a criminal offence and is liable on conviction to a maximum fine of HK$350,000 and imprisonment for three years.
For the year ended December 31, 2022, our five largest customers accounted for 18.0%, 6.1%, 5.0%, 4.3% and 4.2%, respectively, of our total revenues. For the year ended December 31, 2023, our five largest customers accounted for 6.7%, 5.5%, 5.2%, 4.7% and 4.5%, respectively, of our total revenues.
For the year ended December 31, 2023, our five largest customers accounted for 6.7%, 5.5%, 5.2%, 4.7% and 4.5%, respectively, of our total revenues. For the year ended December 31, 2024, our five largest customers accounted for 6.9%, 6.6%, 5.7%, 5.5% and 5.4%, respectively, of our total revenues.
For information regarding our principal capital expenditures, see “Item 5. Operating and Financial Review and Prospects — B. Liquidity and Capital Resources — Capital Expenditures.” B. Business Overview Overview We are a holding company incorporated in the British Virgin Islands, and all of our operations are carried out by three Operating Subsidiaries in Hong Kong.
Business Overview Overview We are a holding company incorporated in the British Virgin Islands, and all of our operations are carried out by three Operating Subsidiaries in Hong Kong.
Legal Proceedings For the years ended on December 31, 2021, 2022 and 2023, and as of the date of this annual report, neither we nor the Operating Subsidiaries have been involved in any litigation, claim, administrative action or arbitration which had a material adverse effect on the operations or financial condition of our Company or our Operating Subsidiaries.
Legal Proceedings For the years ended on December 31, 2022, 2023 and 2024, and as of the date of this annual report, neither we nor the Operating Subsidiaries have been involved in any litigation, claim, administrative action or arbitration which had a material adverse effect on the operations or financial condition of our Company or our Operating Subsidiaries. 38 Table of Contents Insurance The Operating Subsidiaries provide business protection insurance including covering Property All Risks, Business Interruption Money and Personal Assault, Public Liability, Employee’s Compensation in compliance with applicable Hong Kong laws.
Revenue The following table sets forth the breakdown of our revenue for the years ended December 31, 2023, 2022 and 2021: For the years ended December 31, 2021 2022 2023 2023 HK$ HK$ HK$ US$ Initial set up, installation and customization services 8,147,473 7,140,076 8,973,079 1,148,789 Subscriptions 12,124,676 11,414,976 11,445,019 1,465,263 Hosting, support and maintenance services 3,304,830 4,186,369 4,338,184 555,401 Liquidity services 3,220,992 6,699,586 2,626,516 336,263 White label services 1,860,221 1,889,188 2,122,198 271,697 Quotes/news/package subscription services 3,554,778 3,601,632 2,456,181 314,456 Total revenue 32,212,970 34,931,827 31,961,177 4,091,869 Clients Clients of the Operating Subsidiaries are mainly financial institutions, including brokers, investment banks, institutional clients, liquidity providers and financial services providers.
Revenue The following table sets forth the breakdown of our revenue for the years ended December 31, 2022, 2023 and 2024: For the years ended December 31, 2022 2023 2024 2024 HK$ HK$ HK$ US$ Initial set up, installation and customization services 7,140,076 8,973,079 2,700,199 347,619 Subscriptions 11,414,976 11,445,019 11,419,059 1,470,070 Hosting, support and maintenance services 4,186,369 4,338,184 4,893,759 630,014 Liquidity services 6,699,586 2,626,516 1,902,895 244,975 White label services 1,889,188 2,122,198 3,018,561 388,604 Quotes/news/package subscription services 3,601,632 2,456,181 2,150,845 276,896 Total revenue 34,931,827 31,961,177 26,085,318 3,358,178 Clients Clients of the Operating Subsidiaries are mainly financial institutions, including brokers, investment banks, institutional clients, liquidity providers and financial services providers.
Regulations Regulations Related to our Business Operation in Hong Kong We are a BVI holding company with three Operating Subsidiaries as forex/bullion trading solutions providers in Hong Kong. Below sets out a summary of certain aspects of the Hong Kong laws and regulations which are relevant to our Operating Subsidiaries’ operations and business.
Below sets out a summary of certain aspects of the Hong Kong laws and regulations which are relevant to our Operating Subsidiaries’ operations and business.
Our gross profit and net income were HK$18,419,125 and HK$6,818,599, respectively, for the year ended December 31, 2022. Our gross profit and net income were HK$17,965,507 (US$2,300,056) and HK$6,628,881 (US$848,670), respectively, for the year ended December 31, 2023.
For the years ended December 31, 2022, 2023 and 2024, our total revenue was approximately HK$34,931,827, HK$31,961,177, and HK$26,085,318 (US$3,358,178), respectively. Our gross profit and net income were HK$18,419,125 and HK$6,818,599, respectively, for the year ended December 31, 2022. Our gross profit and net income were HK$17,965,507 and HK$6,628,881, respectively, for the year ended December 31, 2023.
Our registered office in the British Virgin Islands is at Vistra Corporate Services Centre, Wickhams Cay II, Road Town, Tortola, BVI. We maintain a website at https://www.m-finance.com . The information contained on our website is not a part of this annual report.
Corporate Information Our principal executive offices are located at Unit 1801, Fortis Tower, 77-79 Gloucester Road, Wan Chai, Hong Kong, and our telephone number is (+852) 3426-6200. Our registered office in the British Virgin Islands is at Vistra Corporate Services Centre, Wickhams Cay II, Road Town, Tortola, BVI. We maintain a website at https://www.m-finance.com .
Research and Development During the years ended December 31, 2021, 2022 and 2023, and as of the date of this annual report, the Operating Subsidiaries mainly utilize internal resources for research and development and they also engaged PrimeTime Global Technologies Limited and three independent third parties for research and development.
Research and Development During the year ended December 31, 2022, the Company engaged PrimeTime Global Technologies Limited, a related party of the Company, and three independent third parties for research and development. During the years ended December 31, 2023 and 2024, the Company did not engage PrimeTime Global Technologies Limited.
We raised $7.5 million in gross proceeds from our initial public offering, before deducting underwriting discounts and other related expenses. Corporate Information Our principal executive offices are located at Unit 1801, Fortis Tower, 77-79 Gloucester Road, Wan Chai, Hong Kong, and our telephone number is (+852) 3426-6200.
We raised US$7.5 million in gross proceeds from our initial public offering, before deducting underwriting discounts and other related expenses.
Removed
For the years ended December 31, 2021, 2022 and 2023, our total revenue was approximately HK $ 32 , 212,970 , HK$34,931,827 and HK$31,961,177 (US$4,091,869), respectively. Our gross profit and net income were HK$15,952,563 and HK$10,349,595, respectively, for the year ended December 31, 2021.
Added
On September 6, 2024, our shareholders approved the re-designation and re-classification of the Ordinary Shares beneficially held by Gaderway Investments Limited into 9,046,892 Class B Ordinary Shares, each with 20 votes per share, and the Ordinary Shares held by other shareholders into 4,204,775 Class A Ordinary Shares, each with one vote per share, on a one for one basis.
Removed
On December 20, 2021, m-FINANCE entered into a settlement agreement with one of its clients for HK$2.6 million to settle a contractual dispute, which dispute has been fully settled in cash as of December 31, 2021. 37 Table of Contents Insurance The Operating Subsidiaries provide business protection insurance including covering Property All Risks, Business Interruption Money and Personal Assault, Public Liability, Employee’s Compensation in compliance with applicable Hong Kong laws.
Added
The SEC maintains a website at www.sec.gov that contains reports, proxy, and information statements, and other information regarding issuers that file electronically with the SEC using its EDGAR system. For information regarding our principal capital expenditures, see “Item 5. Operating and Financial Review and Prospects — B. Liquidity and Capital Resources — Capital Expenditures.” B.
Added
Our gross profit and net loss were HK$12,302,194 (US$1,583,763) and HK$20,210,992 (US$2,601,926), respectively, for the year ended December 31, 2024.
Added
It mainly utilized internal resources and one independent third party for research and development. Regulations Regulations Related to our Business Operation in Hong Kong We are a BVI holding company with three Operating Subsidiaries as forex/bullion trading solutions providers in Hong Kong.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

53 edited+40 added−33 removed89 unchanged
Biggest changeThe following table sets forth a summary of our cash flows for the periods indicated: For the years ended December 31, 2021 2022 2023 2023 HK$ HK$ HK$ US$ Net cash provided by operating activities 12,734,753 13,496,487 11,324,808 1,449,871 Net cash used in investing activities (11,346,697 ) (2,125,093 ) (5,685,740 ) (727,924 ) Net cash used in financing activities (10,641,086 ) (9,403,066 ) (10,887,289 ) (1,393,858 ) Effect of exchange rate changes on cash 545 13,820 (5,092 ) (651 ) Net increase (decrease) in cash (9,252,485 ) 1,982,148 (5,253,313 ) (672,562 ) Cash at the beginning of year 19,334,068 10,081,583 12,063,731 1,544,474 Cash at the end of year 10,081,583 12,063,731 6,810,418 871,912 Operating activities Net cash provided by operating activities amounted to HK$11,324,808 for the year ended December 31, 2023, mainly derived from (i) net income of HK$6,628,881 for the year ended December 31, 2023; (ii) various non-cash items of HK$8,444,393, such as amortization of intangible assets of HK$5,514,165, amortization of right-of-use assets and interest of lease liabilities of HK$1,633,106, allowance for credit losses of HK$998,020 and depreciation of property and equipment of HK$134,951; and (iii) changes in operating assets and liabilities of HK$3,734,567.
Biggest changeNet cash provided by operating activities amounted to HK$11,324,808 for the year ended December 31, 2023, mainly derived from (i) net income of HK$6,628,881 for the year ended December 31, 2023; (ii) various non-cash items of HK$8,444,393, such as amortization of intangible assets of HK$5,514,165, amortization of right-of-use assets and interest of lease liabilities of HK$1,633,106, allowance for credit losses of HK$998,020 and depreciation of property and equipment of HK$134,951; and (iii) changes in operating assets and liabilities of HK$3,734,567.
Algorithmic trading, also known as automated trading, is a type of trading that involves using computer programs to make trading decisions. These programs use advanced mathematical algorithms to analyze the market and execute trades automatically, without the need for human intervention.
Algorithmic trading, also known as automated trading, is a type of trading that involves using computer programs to make trading decisions. These programs use advanced mathematical algorithms to analyze the market and execute trades automatically, without the need for human intervention.
We believe that there will be increasing demand for algorithmic trading and more resources will be invested for enhancing the system.
We believe that there will be increasing demand for algorithmic trading and more resources will be invested for enhancing the system.
It appears that the clients engaged in leveraged foreign exchange trading prefer to enjoy the benefits brought along by information technology to obtain timely foreign exchange information, the latest market news and automated trading, and, hence, we have been enhancing our trading system’s stability and security to provide clients a reliable and safe platform for round the clock trading.
It appears that the clients engaged in leveraged foreign exchange trading prefer to enjoy the benefits brought along by information technology to obtain timely foreign exchange information, the latest market news and automated trading, and, hence, we have been enhancing our trading system’s stability and security to provide clients a reliable and safe platform for round the clock trading.
Therefore, we optimize our trading algorithm through live trading in the real foreign exchange market, which allows us to test and refine our system in real-world conditions.
Therefore, we optimize our trading algorithm through live trading in the real foreign exchange market, which allows us to test and refine our system in real-world conditions.
The trades of foreign currencies conducted by the Operating Subsidiaries are denominated in the USD and are paired with currencies with strong liquidity traded in highly transparent markets, including such currencies as the EURO, USD, GBP, CHF, AUD and CAD, etc. We clear position limits and floating profit/loss limits are set to manage foreign exchange positions.
The trades of foreign currencies conducted by the Operating Subsidiaries are denominated in the USD and are paired with currencies with strong liquidity traded in highly transparent markets, including such currencies as the EURO, USD, GBP, CHF, AUD and CAD, etc. We clear position limits and floating profit/loss limits are set to manage foreign exchange positions.
Investing activities Net cash used in investing activities amounted to HK$5,685,740 for the year ended December 31, 2023, representing costs to obtain and develop software of HK$7,270,898 and purchase of property and equipment of HK$48,157, and was partially offset by disposals of financial assets at fair value of HK$1,633,315 during the year ended December 31, 2023.
Net cash used in investing activities amounted to HK$5,685,740 for the year ended December 31, 2023, representing costs to obtain and develop software of HK$7,270,898 and purchase of property and equipment of HK$48,157, and was partially offset by disposals of financial assets at fair value of HK$1,633,315 during the year ended December 31, 2023.
Financing activities Net cash used in financing activities amounted to HK$10,887,289 for the year ended December 31, 2023, which included the dividend paid to a shareholder of HK$5,329,213, repayment of bank borrowings of HK$3,693,642 and an increase in deferred IPO costs of HK$1,864,434.
Net cash used in financing activities amounted to HK$10,887,289 for the year ended December 31, 2023, which included the dividend paid to a shareholder of HK$5,329,213, repayment of bank borrowings of HK$3,693,642 and an increase in deferred IPO costs of HK$1,864,434.
We expect our legal and professional fees for legal, audit, and advisory services to increase, as we will incur audit fees, legal fees and advisory fees for being a public company. 56 Table of Contents Other income (expenses) Our other income (expenses) consists of the following: For the years ended December 31, 2022 2023 2023 Variance % of variance HK$ HK$ US$ HK$ Other income Sundry income 174,026 82,103 10,511 (91,923 ) -52.8 % Commission income 259,794 364,819 46,706 105,025 40.4 % Government subsidies 734,059 34,261 4,386 (699,798 ) -95.3 % Others 145,342 29,719 3,805 (115,623 ) -79.6 % Other income 1,313,221 510,902 65,408 (802,319 ) -61.1 % Other expenses Other expenses 48,021 52,961 6,780 4,940 10.3 % Other expenses 48,021 52,961 6,780 4,940 10.3 % Total other income, net 1,265,200 457,941 58,628 (807,259 ) -63.8 % Sundry income .
We expect our legal and professional fees for legal, audit, and advisory services to increase, as we will incur audit fees, legal fees and advisory fees for being a public company. 52 Table of Contents Other income (expenses) Our other income (expenses) consists of the following: For the years ended December 31, 2022 2023 2023 Variance % of variance HK$ HK$ US$ HK$ Other income Sundry income 174,026 82,103 10,511 (91,923 ) -52.8 % Commission income 259,794 364,819 46,706 105,025 40.4 % Government subsidies 734,059 34,261 4,386 (699,798 ) -95.3 % Others 145,342 29,719 3,805 (115,623 ) -79.6 % Other income 1,313,221 510,902 65,408 (802,319 ) -61.1 % Other expenses Other expenses 48,021 52,961 6,780 4,940 10.3 % Other expenses 48,021 52,961 6,780 4,940 10.3 % Total other income, net 1,265,200 457,941 58,628 (807,259 ) -63.8 % Sundry income .
Cost of revenue The following table sets forth the breakdown of our cost of revenue for the years ended December 31, 2022 and 2023: For the years ended December 31, 2022 2023 2023 Variance % of variance HK$ HK$ US$ HK$ Internet services cost 1,727,305 1,575,284 201,678 (152,021 ) -8.8 % Employee-related costs 6,886,855 6,253,858 800,658 (632,997 ) -9.2 % Subscription costs 171,228 123,361 15,793 (47,867 ) -28.0 % Outsourcing fees 752,904 223,915 28,667 (528,989 ) -70.3 % Amortization of intangible assets 6,160,391 5,514,165 705,958 (646,226 ) -10.5 % Commission expenses 808,894 275,965 35,331 (532,929 ) -65.9 % Others 5,125 29,120 3,728 23,995 468.2 % Total cost of revenue 16,512,702 13,995,670 1,791,813 (2,517,032 ) -15.2 % 54 Table of Contents Our cost of revenue decreased by HK$2,517,032 or 15.2% from HK$16,512,702 for the year ended December 31, 2022 to HK$13,995,670 for the year ended December 31, 2023, which was mainly due to (i) the decrease in employee-related costs because lesser staff costs were allocated for supporting our financial trading solution services for the year ended December 31, 2023 in view of the decrease in revenue for the same period, (ii) decrease in the amortization of intangible assets due to part of the intangible assets we developed being fully amortized, (iii) the decrease in outsourcing fees and (iv) the decrease in commission expenses.
Cost of revenue The following table sets forth the breakdown of our cost of revenue for the years ended December 31, 2022 and 2023: For the years ended December 31, 2022 2023 2023 Variance % of variance HK$ HK$ US$ HK$ Internet services cost 1,727,305 1,575,284 201,678 (152,021 ) -8.8 % Employee-related costs 6,886,855 6,253,858 800,658 (632,997 ) -9.2 % Subscription costs 171,228 123,361 15,793 (47,867 ) -28.0 % Outsourcing fees 752,904 223,915 28,667 (528,989 ) -70.3 % Amortization of intangible assets 6,160,391 5,514,165 705,958 (646,226 ) -10.5 % Commission expenses 808,894 275,965 35,331 (532,929 ) -65.9 % Others 5,125 29,120 3,728 23,995 468.2 % Total cost of revenue 16,512,702 13,995,670 1,791,813 (2,517,032 ) -15.2 % 50 Table of Contents Our cost of revenue decreased by HK$2,517,032 or 15.2% from HK$16,512,702 for the year ended December 31, 2022 to HK$13,995,670 for the year ended December 31, 2023, which was mainly due to (i) the decrease in employee-related costs because lesser staff costs were allocated for supporting our financial trading solution services for the year ended December 31, 2023 in view of the decrease in revenue for the same period, (ii) decrease in the amortization of intangible assets due to part of the intangible assets we developed being fully amortized, (iii) the decrease in outsourcing fees and (iv) the decrease in commission expenses.
Operating Results Overview mF International is a BVI holding company with three Hong Kong-based subsidiaries providing financial trading solutions by principally engaging in research and development and sales of financial trading solutions. m-FINANCE, our principal operating subsidiary, is one of the financial service market participants with clients in Hong Kong, mainland China and Southeast Asia, and a bullion trading platform solution provider for the Chinese Gold and Silver Exchange (CGSE) Society member in Hong Kong. m-FINANCE has approximately 20 years of experience in providing real-time mission critical forex, bullion/commodities trading platform solutions, financial value-added services, mobile applications and financial information for brokers and institutional clients via internet or platform as software as a service. m-FINANCE has provided a wide range of top-notch services, including mF4 Trading Platform, Bridge and Plugins, CRM System, ECN System, Liquidity Solutions, Cross-platform “Broker+” Solution, Social Trading Applications and other value-added services.
Operating Results Overview mF International is a BVI holding company with three Hong Kong-based subsidiaries providing financial trading solutions by principally engaging in research and development and sales of financial trading solutions. m-FINANCE, our principal operating subsidiary, is one of the financial service market participants with clients in Hong Kong, mainland China and Southeast Asia, and a bullion trading platform solution provider for the Chinese Gold and Silver Exchange (CGSE) Society member in Hong Kong. m-FINANCE has approximately 20 years of experience in providing real-time mission critical forex, bullion/commodities trading platform solutions, financial value-added services, mobile applications and financial information for brokers and institutional clients via internet or platform as software as a service. m-FINANCE has provided a wide range of top-notch services, including mF4 Trading Platform, Trader Pro, Bridge and Plugins, CRM System, ECN System, Liquidity Solutions, Cross-platform “Broker+” Solution, Social Trading Applications and other value-added services.
We did not recognize any impairment on intangible assets and in preparing its financial statements for the periods presented and we did not consider it reasonably likely these considerations would change significantly based upon our current outlook, the assessment of the recoverability of intangible assets did not involve a significant level of estimation uncertainty that had, or was reasonably likely to have had, a material impact on the financial condition or results of our operations for the years ended December 31, 2021, 2022 and 2023. 63 Table of Contents Recently accounting pronouncements See the discussion of the recent accounting pronouncements contained in the notes to the consolidated financial statements, “Note 2 – Summary of Significant Accounting Policies.”
We did not recognize any impairment on intangible assets and in preparing its financial statements for the periods presented and we did not consider it reasonably likely these considerations would change significantly based upon our current outlook, the assessment of the recoverability of intangible assets did not involve a significant level of estimation uncertainty that had, or was reasonably likely to have had, a material impact on the financial condition or results of our operations for the years ended December 31, 2022, 2023 and 2024. 63 Table of Contents Recently accounting pronouncements See the discussion of the recent accounting pronouncements contained in the notes to the consolidated financial statements, “Note 2 – Summary of Significant Accounting Policies.”
Consequently, to reflect the cumulative effects of the adoption of ASC 326, we recorded the balance of the reserve for credit losses was HK$497,099 as of January 1, 2023 and there is no material impact over the initial adoption of CECL model.
To reflect the cumulative effects of the adoption of ASC 326, we recorded the balance of the reserve for credit losses was HK$497,099 as of January 1, 2023 and there is no material impact over the initial adoption of CECL model.
The Operating Subsidiaries charged handling service fees for services provided to customers on using the multi-asset trading software by the MT4/MT5 (forex trading platforms) service providers. Some customers requested the Operating Subsidiaries to subscribe to such services from the MT4/MT5 service providers and they, in turn, charged such customers.
The Operating Subsidiaries charged handling service fees for services provided to customers using the multi-asset trading software by the MT4/MT5 (forex trading platforms) service providers. Some customers requested the Operating Subsidiaries to subscribe to such services from the MT4/MT5 service providers and they, in turn, charged such customers.
The sundry income was the net amount of sundry income from providing such handling services after deducting the expenses it incurred over the same period. The decrease in sundry income was mainly due to the decrease in customers’ requests for such service. Commission Income .
The sundry income was the net amount of sundry income from providing such handling services after deducting the expenses it incurred over the same period. The decrease in sundry income was mainly due to the fall in customers’ requests for such service. Commission Income .
Although most communication may be achieved via video calls, this form of remote communication may be less effective in building trust and communicating with existing and new clients. 46 Table of Contents Some of the customers of the Operating Subsidiaries were lost since certain small-sized customers had to shut down their businesses as a result of the adverse impact of the COVID-19 pandemic on their profitability in 2021 and 2022.
Although most communication may be achieved via video calls, this form of remote communication may be less effective in building trust and communicating with existing and new clients. 47 Table of Contents Some of the customers of the Operating Subsidiaries were lost since certain small-sized customers had to shut down their businesses as a result of the adverse impact of the COVID-19 pandemic on their profitability in 2021 and 2022.
Comparison of year ended December 31, 2022 with year ended December 31, 2023 The following table sets forth key components of our results of operations for the years ended December 31, 2022 and 2023: For the years ended December 31, 2022 2023 2023 Variance % of variance HK$ HK$ US$ HK$ Revenue 34,931,827 31,961,177 4,091,869 (2,970,650 ) -8.5 % Cost of revenue 16,512,702 13,995,670 1,791,813 (2,517,032 ) -15.2 % Gross profit 18,419,125 17,965,507 2,300,056 (453,618 ) -2.5 % Operating expenses Selling and marketing expenses 161,791 160,976 20,609 (815 ) -0.5 % Research and development expenses 80,012 11,373 1,456 (68,639 ) -85.8 % General and administrative expenses 10,634,851 11,110,942 1,422,492 476,091 4.5 % Total operating expenses 10,876,654 11,283,291 1,444,557 406,637 3.7 % Income from operations 7,542,471 6,682,216 855,499 (860,255 ) -11.4 % Other income (expense) Other income, net 1,265,200 457,941 58,628 (807,259 ) -63.8 % Realized loss on disposal of financial assets at fair value - (7,874 ) (1,008 ) (7,874 ) N/A Change in fair value on financial assets at fair value (1,157,650 ) (2,091 ) (268 ) 1,155,559 -99.8 % Interest expenses, net (443,577 ) (353,002 ) (45,194 ) 90,575 -20.4 % Total other (expense) income, net (336,027 ) 94,974 12,158 431,001 -128.3 % Income before income taxes 7,206,444 6,777,190 867,657 (429,254 ) -6.0 % Income tax expenses (387,845 ) (148,309 ) (18,987 ) 239,536 -61.8 % Net income 6,818,599 6,628,881 848,670 (189,718 ) -2.8 % Other comprehensive income Foreign currency translation adjustment 7,496 17,866 2,287 10,370 138.3 % Comprehensive income 6,826,095 6,646,747 850,957 (179,348 ) -2.6 % 53 Table of Contents Revenue The following table sets forth the breakdown of our revenue by major revenue type for the years ended December 31, 2022 and 2023, respectively: For the years ended December 31, 2022 2023 2023 Variance % of variance HK$ HK$ US$ HK$ Initial set up, installation and customization services 7,140,076 8,973,079 1,148,789 1,833,003 25.7 % Subscriptions 11,414,976 11,445,019 1,465,263 30,043 0.3 % Hosting, support and maintenance services 4,186,369 4,338,184 555,401 151,815 3.6 % Liquidity services 6,699,586 2,626,516 336,263 (4,073,070 ) -60.8 % White label services 1,889,188 2,122,198 271,697 233,010 12.3 % Quotes/news/package subscription services 3,601,632 2,456,181 314,456 (1,145,451 ) -31.8 % Total revenue 34,931,827 31,961,177 4,091,869 (2,970,650 ) -8.5 % Our revenue decreased by HK$2,970,650 or 8.5% from HK$34,931,827 for the year ended December 31, 2022 to HK$31,961,177 for the year ended December 31, 2023, primarily because of the decrease in our revenue derived from our Operating Subsidiaries’ (i) liquidity services; and (ii) quotes/news/package subscription services, and was partially offset by the increase in revenue derived from our Operating Subsidiaries’ (i) initial set up, installation and customization services; (ii) white label services; and (iii) hosting, support and maintenance services.
As a result of these marketing arrangements, our selling and marketing expenses rose by HK$ 4.0 million during the year ended December 31, 2024. 48 Table of Contents Results of Operations Comparison of year ended December 31, 2022 with year ended December 31, 2023 The following table sets forth key components of our results of operations for the years ended December 31, 2022 and 2023: For the years ended December 31, 2022 2023 2023 Variance % of variance HK$ HK$ US$ HK$ Revenue 34,931,827 31,961,177 4,091,869 (2,970,650 ) -8.5 % Cost of revenue 16,512,702 13,995,670 1,791,813 (2,517,032 ) -15.2 % Gross profit 18,419,125 17,965,507 2,300,056 (453,618 ) -2.5 % Operating expenses Selling and marketing expenses 161,791 160,976 20,609 (815 ) -0.5 % Research and development expenses 80,012 11,373 1,456 (68,639 ) -85.8 % General and administrative expenses 10,634,851 11,110,942 1,422,492 476,091 4.5 % Total operating expenses 10,876,654 11,283,291 1,444,557 406,637 3.7 % Income from operations 7,542,471 6,682,216 855,499 (860,255 ) -11.4 % Other income (expense) Other income, net 1,265,200 457,941 58,628 (807,259 ) -63.8 % Realized loss on disposal of financial assets at fair value - (7,874 ) (1,008 ) (7,874 ) N/A Change in fair value on financial assets at fair value (1,157,650 ) (2,091 ) (268 ) 1,155,559 -99.8 % Interest expenses, net (443,577 ) (353,002 ) (45,194 ) 90,575 -20.4 % Total other (expense) income, net (336,027 ) 94,974 12,158 431,001 -128.3 % Income before income taxes 7,206,444 6,777,190 867,657 (429,254 ) -6.0 % Income tax expenses (387,845 ) (148,309 ) (18,987 ) 239,536 -61.8 % Net income 6,818,599 6,628,881 848,670 (189,718 ) -2.8 % Other comprehensive income Foreign currency translation adjustment 7,496 17,866 2,287 10,370 138.3 % Comprehensive income 6,826,095 6,646,747 850,957 (179,348 ) -2.6 % 49 Table of Contents Revenue The following table sets forth the breakdown of our revenue by major revenue type for the years ended December 31, 2022 and 2023, respectively: For the years ended December 31, 2022 2023 2023 Variance % of variance HK$ HK$ US$ HK$ Initial set up, installation and customization services 7,140,076 8,973,079 1,148,789 1,833,003 25.7 % Subscriptions 11,414,976 11,445,019 1,465,263 30,043 0.3 % Hosting, support and maintenance services 4,186,369 4,338,184 555,401 151,815 3.6 % Liquidity services 6,699,586 2,626,516 336,263 (4,073,070 ) -60.8 % White label services 1,889,188 2,122,198 271,697 233,010 12.3 % Quotes/news/package subscription services 3,601,632 2,456,181 314,456 (1,145,451 ) -31.8 % Total revenue 34,931,827 31,961,177 4,091,869 (2,970,650 ) -8.5 % Our revenue decreased by HK$2,970,650 or 8.5% from HK$34,931,827 for the year ended December 31, 2022 to HK$31,961,177 for the year ended December 31, 2023, primarily because of the decrease in our revenue derived from our Operating Subsidiaries’ (i) liquidity services; and (ii) quotes/news/package subscription services, and was partially offset by the increase in revenue derived from our Operating Subsidiaries’ (i) initial set up, installation and customization services; (ii) white label services; and (iii) hosting, support and maintenance services.
The change in fair value on financial assets at fair value was mainly due to the increased volatility in the financial and currency market. 57 Table of Contents Interest expenses, net We incurred interest expenses on bank borrowings which totaled HK$443,577 and HK$483,623 for the years ended December 31, 2022 and 2023, respectively, with an annual effective interest rate of 3.3% and 4.9% during the years ended December 31, 2022 and 2023, respectively.
The change in fair value on financial assets at fair value was mainly due to the increased volatility in the financial and currency market. 53 Table of Contents Interest expenses, net We incurred interest expenses on bank borrowings which totaled HK$443,577 and HK$483,623 for the years ended December 31, 2022 and 2023, respectively, with an annual effective interest rate of 3.3% and 4.9% during the years ended December 31, 2022 and 2023, respectively.
This may materially and adversely affect our financial condition and results of operations. 45 Table of Contents Our Operating Subsidiaries’ abilities to design and develop new services The financial service industry is characterized by rapidly evolving technology and standards, and our future success will depend on our ability to enhance our Operating Subsidiaries’ current financial trading solutions and to introduce new financial trading solutions that keep pace with these rapidly evolving technology and standards.
This may materially and adversely affect our financial condition and results of operations. 46 Table of Contents Our Operating Subsidiaries’ abilities to design and develop new services The financial service industry is characterized by rapidly evolving technology and standards, and our future success will depend on our ability to enhance our Operating Subsidiaries’ current financial trading solutions and to introduce new financial trading solutions that keep pace with these rapidly evolving technology and standards.
The commission is generally determined based on a certain percentage of revenue generated from customers referred by business partners. 55 Table of Contents Gross profit Our total gross profit decreased by HK$453,618 or 2.5% from HK$18,419,125 for the year ended December 31, 2022 to HK$17,965,507 for the year ended December 31, 2023.
The commission is generally determined based on a certain percentage of revenue generated from customers referred by business partners. 51 Table of Contents Gross profit Our total gross profit decreased by HK$453,618 or 2.5% from HK$18,419,125 for the year ended December 31, 2022 to HK$17,965,507 for the year ended December 31, 2023.
The realized loss on disposal of financial assets at fair value and change in fair value on financial assets at fair value represented 0.00275%, 0.01025% and 0.0313% of our trading transaction amounts of foreign currencies for the years ended December 31, 2021, 2022 and 2023, respectively.
The realized loss on disposal of financial assets at fair value and change in fair value on financial assets at fair value represented 0.01025%, 0.0313% and 0% of our trading transaction amounts of foreign currencies for the years ended December 31, 2022, 2023 and 2024, respectively.
Commission income represented the commission income received from our related party for business referred by us. We would charge a commission fee at an agreed percentage from the business referred by us to our related party. The decrease in commission income was mainly due to the decrease in sales referred by us. Government subsidies.
Commission income represented the commission income received from our related party for business referred by us. We would charge a commission fee at an agreed percentage from the business referred by us to our related party. The decrease in commission income was mainly due to the decrease in sales referred by us in fiscal year 2024. Government subsidies.
Internet service cost Internet service cost represented cost in relation to server hosting service provided by data center service providers as well as acquiring internet data line from various service providers for internet access. Employee-related costs Employee-related costs consisted primarily of payroll and other personnel-related expenses of our Operating Subsidiaries’ staff to support our financial trading solution services.
Internet service cost Internet service cost represented cost in relation to server hosting service provided by data center service providers as well as acquiring internet data lines from various service providers for internet access. Employee-related costs Employee-related costs consisted primarily of payroll and other personnel-related expenses of our staff to support our financial trading solution services.
For the years ended December 31, 2021, 2022 and 2023, we had realized loss on disposal of financial assets at fair value and change in fair value on financial assets at fair value in the aggregate amounts of HK$676,445, HK$1,157,650 and HK$9,965, respectively, from trading in foreign currencies, at fair value, with the intention to optimize a trading algorithm based on live market interactions.
For the years ended December 31, 2022, 2023 and 2024, we had realized loss on disposal of financial assets at fair value and change in fair value on financial assets at fair value in the aggregate amounts of HK$1,157,650, HK$9,965 and HK$nil, respectively, from trading in foreign currencies, at fair value, with the intention to optimize a trading algorithm based on live market interactions.
Income tax expenses British Virgin Islands Under the current and applicable laws of BVI, the Company is not subject to tax on income or capital gains. China The Company’s subsidiary, m-FINANCE Software (Shenzhen) Limited (“SZ WFOE”) established in the PRC is subject to PRC Enterprises Income Tax rate of 25% for the years ended December 31, 2021 and 2022.
Income tax expenses British Virgin Islands Under the current and applicable laws of BVI, the Company is not subject to tax on income or capital gains. China The Company’s subsidiary, m-FINANCE Software (Shenzhen) Limited (“SZ WFOE”) established in the PRC is subject to PRC Enterprises Income Tax rate of 25% for the year ended December 31, 2023.
Liquidity and Capital Resources As of the date of this annual report, we have financed our Operating Subsidiaries’ operations primarily through cash flows from operations and loans from banks and related parties, if necessary. We plan to support our future operations primarily from cash generated from our operations and the net proceeds raised from our IPO.
Liquidity and Capital Resources As of the date of this annual report, we have financed our Operating Subsidiaries’ operations primarily through cash flows from operations and loans from banks. We plan to support our future operations primarily from cash generated from our operations and the net proceeds raised from our IPO.
The change in fair value on financial assets at fair value was mainly due to the increased volatility in the financial and currency market in 2021 and 2022. For the years ended December 31, 2021, 2022 and 2023, we traded foreign currencies of monthly average transaction amounts of US$259.2 million, US$120.7 million and US$0.3 million, respectively.
The change in fair value on financial assets at fair value was mainly due to the increased volatility in the financial and currency market in 2022 and 2023. For the years ended December 31, 2022, 2023 and 2024, we traded foreign currencies of monthly average transaction amounts of US$120.7 million, US$0.3 million and US$nil, respectively.
For the years ended December 31, 2021, 2022 and 2023, we traded foreign currencies of transaction amounts of US$3,110.4 million, US$1,448.7 million and US$4.1 million, respectively, while we had realized loss on disposal of financial assets at fair value and change in fair value on financial assets at fair value in the aggregate amount of HK$676,445, HK$1,157,650 and HK$9,965 (US$1,276), respectively.
For the years ended December 31, 2022, 2023 and 2024, we traded foreign currencies of transaction amounts of US$1,448.7 million, US$4.1 million and US$ nil, respectively, while we had realized loss on disposal of financial assets at fair value and change in fair value on financial assets at fair value in the aggregate amount of HK$1,157,650, HK$9,965 and HK$ nil (US$ nil), respectively.
Impairment assessment for the internally developed software For the years ended December 31, 2021, 2022 and 2023, we capitalized the research and development costs of HK$6,959,773, HK$5,993,675 and HK$7,270,898 (US$930,866), respectively, as intangible assets. Our internally developed software is amortized over its estimated useful lives and is reviewed for impairment if indicators of impairment arise.
Impairment assessment for the internally developed software For the years ended December 31, 2022, 2023 and 2024, we capitalized the research and development costs of HK$5,993,675, HK$7,270,898 and HK$7,967,033, respectively, as intangible assets. Our internally developed software is amortized over its estimated useful lives and is reviewed for impairment if indicators of impairment arise.
As a result, we may need to invest significant resources in research and development to maintain our market position, keep pace with technological changes and compete effectively. For the years ended December 31, 2021, 2022 and 2023, we capitalized the research and development costs of HK$6,959,773, HK$5,993,675 and HK$7,270,898 (US$930,866), respectively, as intangible assets.
As a result, we may need to invest significant resources in research and development to maintain our market position, keep pace with technological changes and compete effectively. For the years ended December 31, 2022, 2023 and 2024, we capitalized the research and development costs of HK$5,993,675, HK$7,270,898 and HK$7,967,033 (US$1,025,662), respectively, as intangible assets.
Hong Kong In accordance with the relevant tax laws and regulations of Hong Kong, a company registered in Hong Kong is subject to income taxes within Hong Kong at the applicable tax rate on taxable income.
SZ WFOE was deregistered on March 21, 2023. Hong Kong In accordance with the relevant tax laws and regulations of Hong Kong, a company registered in Hong Kong is subject to income taxes within Hong Kong at the applicable tax rate on taxable income.
Net income. As a result of the foregoing, we reported net income of HK$10,349,595 and HK$6,818,599 for the years ended December 31, 2021 and 2022, respectively. Other comprehensive income (loss).
Net income. As a result of the foregoing, we reported net income of HK$6,818,599 and HK$6,628,881 for the years ended December 31, 2022 and 2023, respectively. Other comprehensive income).
Subscription costs Our subscription costs represented costs incurred by the Operating Subsidiaries for subscription payments for price or news feeds from news and financial market information providers. We will convert the raw data into usable data that can be used in our trading platform.
Subscription costs Our subscription costs represented costs incurred for subscription payments for price or news feeds from news and financial market information providers. We will convert the raw data into usable data that can be used in our trading platform. The increase in subscription costs was due to a higher subscription service fee from financial market information providers.
Research and Development, Patents and Licenses, etc. See “Item 4. Information on the Company — B. Business Overview — Research and Development” and “Item 4. Information on the Company — B. Business Overview — Properties — Intellectual Property.” D. Trend Information The financial trading solutions services provided by the Operating Subsidiaries are affected by the capital market in Hong Kong.
Information on the Company — B. Business Overview — Properties — Intellectual Property.” D. Trend Information The financial trading solutions services provided by the Operating Subsidiaries are affected by the capital market in Hong Kong.
For the years ended December 31, 2021, 2022 and 2023, our staff costs of directors and employees, including salaries, provident fund contributions and other benefits were HK$15,270,802, HK$16,332,699 and HK$16,509,766 (US$2,113,683), respectively.
For the years ended December 31, 2022, 2023 and 2024, our staff costs of directors and employees, including salaries, provident fund contributions and other benefits were HK$16,332,699, HK$16,509,766 and HK$18,813,515 (US$2,422,019), respectively.
As of December 31, 2023, we had cash in aggregate of HK$6,810,418 as compared to HK$12,063,731 as of December 31, 2022. We had positive working capital that amounted to HK$3,618,321 as of December 31, 2022 as compared to negative working capital of HK$2,077,323 as of December 31, 2023.
We had positive working capital that amounted to HK$3,618,321 as of December 31, 2022 as compared to negative working capital of HK$2,077,323 as of December 31, 2023.
We expect that our expenditures for research and development may increase in terms of monetary value and may increase as a percentage of our total revenue over time, as the Operating Subsidiaries will expand their software development capacity to continue to improve existing functions and develop new functions.
We expect that our expenditures for research and development may increase in terms of monetary value as we intend to expand their software development capacity to continue to improve existing functions and develop new functions.
We estimated our reserve for credit losses using relevant available information from internal and external sources relating to past events, current conditions and reasonable and supportable forecasts.
Provision for credit losses We carry accounts receivable, prepaid expenses and deposits at the face amounts less a reserve for estimated credit losses. We estimated our reserve for credit losses using relevant available information from internal and external sources relating to past events, current conditions and reasonable and supportable forecasts.
During the year ended December 31, 2023, we recorded HK$998,020 adjustments for credit losses on the consolidated financial statement related to accounts receivable. As of December 31, 2023, the reserve for credit losses was HK$1,495,119 (US$191,415).
During the year ended December 31, 2023, we recorded HK$998,020 adjustments for credit losses on the consolidated financial statement related to accounts receivable. As of December 31, 2023, the reserves for credit losses related to our accounts receivable, prepaid expenses-current and deposits-noncurrent were HK$1,495,119, nil and nil, respectively.
Net income. As a result of the foregoing, we reported net income of HK$6,818,599 and HK$6,628,881 for the years ended December 31, 2022 and 2023, respectively. Other comprehensive income). Income from foreign currency translation adjustment amounted to HK$7,496 and HK$17,866 for the years ended December 31, 2022 and 2023, respectively. 58 Table of Contents B.
Net income (loss). As a result of the foregoing, we reported net income of HK$6,628,881 for the years ended December 31, 2023 while net loss of HK$20,210,992 for the same period in 2024. Other comprehensive income(loss). Income from foreign currency translation adjustment amounted to HK$17,866 and HK$3,964 for the years ended December 31, 2023 and 2024, respectively. B.
The decrease in subscription costs was due to a cancelled subscription from a financial market information provider. Outsourcing fees The Operating Subsidiaries may outsource some works to our related party and independent third parties. The outsourcing costs mainly represented the charges and fees paid to subcontractors who handled implementation work for our Operating Subsidiaries.
Outsourcing fees We may outsource some works to our related party and independent third parties. The outsourcing costs mainly represented the charges and fees paid to subcontractors who handled implementation work for us.
We will assess and monitor the challenges created by the increased volatility in the financial and currency market. 59 Table of Contents We believe that our current cash and cash flows provided by operating activities, loans from banks, and the net proceeds from our IPO will be sufficient to meet our working capital needs in the next 12 months from the date of this annual report.
The monthly average number of transactions were 2,384 trades, 250 trades and nil for the years ended December 31, 2022, 2023 and 2024 respectively. 59 Table of Contents We believe that our current cash and cash flows provided by operating activities, loans from banks, and the net proceeds from our IPO will be sufficient to meet our working capital needs in the next 12 months from the date of this annual report.
Interest expenses on bank borrowings We incurred interest expenses on bank borrowings which totaled HK$479,904 and HK$443,577 for the years ended December 31, 2021 and 2022, respectively, with an annual effective interest rate of 3.0% and 3.3% during the years ended December 31, 2021 and 2022, respectively.
Interest expenses, net We incurred interest expenses on bank borrowings, which totalled HK$483,623 and HK$325,084 for the years ended December 31, 2023 and 2024, respectively, with an annual effective interest rate of 4.9% and 3.7% during the years ended December 31, 2023 and 2024, respectively.
Changes in operating assets and liabilities mainly included (i) a decrease in operating lease liabilities of HK$1,663,674, mainly due to the recognition of operating lease expenses on a straight-line basis over the lease term; (ii) a decrease in contract liabilities of HK$1,275,002, due to the completion of projects near the year end; (iii) an increase in accounts receivables of HK$949,239, which was mainly due to more billing to customers based on services provided closer to the year end of December 31, 2022; (iv) a decrease in prepaid expenses and other current assets of HK$520,618, which was mainly due to the refund of a rental deposit for the expired lease and the timing of payments for internet service costs; and (v) an increase in tax payable of HK$229,355, which was primarily due to income tax expense accrued in the year ended December 31, 2022. 60 Table of Contents Net cash provided by operating activities amounted to HK$12,734,753 for the year ended December 31, 2021, mainly derived from (i) net income of HK$10,349,595 for the year ended December 31, 2021; (ii) various non-cash items of HK$9,058,615, such as amortization of intangible assets of HK$5,996,618, amortization of right-of-use assets and interest of lease liabilities of HK$1,700,859, change in fair value on financial assets at fair value of HK$660,325, deferred tax expenses of HK$431,630 and depreciation of property and equipment of HK$253,063; and (iii) changes in operating assets and liabilities of HK$6,673,457.
Changes in operating assets and liabilities mainly included (i) a decrease in operating lease liabilities of HK$1,663,674, mainly due to the recognition of operating lease expenses on a straight-line basis over the lease term; (ii) a decrease in contract liabilities of HK$1,275,002, due to the completion of projects near the year end; (iii) an increase in accounts receivable of HK$949,239, which was mainly due to more billing to customers based on services provided closer to the year end of December 31, 2022; (iv) a decrease in prepaid expenses and other current assets of HK$520,618, which was mainly due to the refund of a rental deposit for the expired lease and the timing of payments for internet service costs; and (v) an increase in tax payable of HK$229,355, which was primarily due to income tax expense accrued in the year ended December 31, 2022. 60 Table of Contents Investing activities Net cash used in investing activities was HK$8,430,509 for the year ended December 31, 2024, inclusive of purchases of computer servers and equipment of HK$463,476 and additional labor costs for product and software development of HK$7,967,033.
Off-balance sheet arrangements We did not have, during the periods presented, nor do we currently have, any off-balance sheet financing arrangements or any relationships with unconsolidated entities or financial partnerships, including entities sometimes referred to as structured finance or special purpose entities, that were established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. 61 Table of Contents Contractual Obligations The following table summarizes our contractual obligations as of December 31, 2023: Payments due by period Total Less than 1 year 1-3 years HK$ HK$ HK$ Bank borrowings 9,926,756 3,863,852 6,062,904 Operating lease obligation 2,963,133 1,392,826 1,570,307 12,889,889 5,256,678 7,633,211 Payments due by period Total Less than 1 year 1-3 years US$ US$ US$ Bank borrowings 1,270,885 494,674 776,211 Operating lease obligation 379,359 178,318 201,040 1,650,244 672,992 977,251 Capital expenditures For the years ended December 31, 2021, 2022 and 2023, we purchased HK$267,010, HK$41,721 and HK$48,157, respectively, of property and equipment mainly for use in our Operating Subsidiaries’ operations.
Off-balance sheet arrangements We did not have, during the periods presented, nor do we currently have, any off-balance sheet financing arrangements or any relationships with unconsolidated entities or financial partnerships, including entities sometimes referred to as structured finance or special purpose entities, that were established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. 61 Table of Contents Contractual Obligations The following table summarizes our contractual obligations as of December 31, 2024: Payments due by period Total Less than 1 year 1-3 years HK$ HK$ HK$ Bank borrowings 6,228,431 4,158,599 2,069,832 Operating lease obligation 1,608,750 1,485,000 123,750 7,837,181 5,643,599 2,193,582 Payments due by period Total Less than 1 year 1-3 years US$ US$ US$ Bank borrowings 801,838 535,371 266,467 Operating lease obligation 207,107 191,176 15,931 1,008,945 726,547 282,398 Capital expenditures For the years ended December 31, 2022, 2023 and 2024, we purchased HK$41,721, HK$48,157 and HK$463,476, respectively, of property and equipment mainly for use in our Operating Subsidiaries’ operations.
The Operating Subsidiaries received government subsidies that totaled HK$379,363 and HK$734,059 for the years ended December 31, 2021 and 2022, respectively, and recognized such amounts as other income when they were received because we have (i) not implemented redundancies during the subsidy period; and (ii) spent all the wage subsidies on paying wages to employees.
The government subsidies for ESS were recognized as other income when they were received because we have (i) not implemented redundancies during the subsidy period; and (ii) spent all the wage subsidies on paying wages to employees. As the COVID-19 restrictions were released by the end of 2023, such government subsidies were no longer available in 2024.
For the years ended December 31, 2021, 2022 and 2023, we purchased HK$40,000, HK$1,999 and nil, respectively, of intangible assets mainly for use in our Operating Subsidiaries’ operations. Subsequent to December 31, 2023 and as of the date of this annual report, we did not purchase any material property and equipment, and intangible assets for operational use.
For the years ended December 31, 2022, 2023 and 2024, we purchased HK$1,999, nil and nil, respectively, of intangible assets mainly for use in our Operating Subsidiaries’ operations. During the year ended December 31, 2024, we purchased additional computer equipment, servers and computer storage to improve the system performance of our financial trading solution platforms.
The outsourcing fees decreased as Operating Subsidiaries required fewer outsourcing services in the year ended December 31, 2022. Amortization of intangible assets Our amortization of intangible assets mainly represented amortization of the Operating Subsidiaries in-house developed financial trading solutions.
The outsourcing fees decreased as we required fewer outsourcing services in the year ended December 31, 2024, which was in line with our decrease in revenue from initial set up, installation and customization services. 56 Table of Contents Amortization of intangible assets Our amortization of intangible assets mainly represented the amortization of our in-house labor cost for developing financial trading solutions.
Government subsidies primarily related to one-off entitlements granted by the Hong Kong government pursuant to the Employment Support Scheme under the Anti-epidemic Fund (“ESS”).
Government subsidies primarily related to (i) one-off entitlements granted by the Hong Kong government pursuant to the Employment Support Scheme under the Anti-epidemic Fund (“ESS”) and (ii) funds for participation in promotion activities in 2023. The Operating Subsidiaries received government subsidies that totaled HK$34,261 and HK$nil for the years ended December 31, 2023 and 2024, respectively.
In view of the increased volatility in the financial and currency market, we have lowered our trading in foreign currencies for the year ended December 31, 2023. The monthly average number of transactions were 4,620 trades, 2,384 trades and 250 trades for the years ended December 31, 2021, 2022 and 2023, respectively.
To minimize the risk of volatility of foreign currencies in the financial and currency market, we lowered our trading in foreign currencies for the year ended December 31, 2023, and did not initiate any trades of foreign currencies in the year ended December 31, 2024.
We do not have any other material commitments to capital expenditures as of December 31, 2023 or as of the date of this annual report. Inflation Inflation did not materially affect the business or the results of operations of our Operating Subsidiaries. Seasonality The nature of our Operating Subsidiaries’ business does not appear to be affected by seasonal variations. C.
Inflation Inflation did not materially affect the business or the results of operations of our Operating Subsidiaries. Seasonality The nature of our Operating Subsidiaries’ business does not appear to be affected by seasonal variations. C. Research and Development, Patents and Licenses, etc. See “Item 4. Information on the Company — B. Business Overview — Research and Development” and “Item 4.
Commission expenses Commission expenses represented the fees we paid to business partners of our Operating Subsidiaries, which bring new businesses to our Operating Subsidiaries. The commission is generally determined based on a certain percentage of revenue generated from customers referred by business partners.
The commission is generally determined based on a certain percentage of revenue generated from customers referred by business partners. Gross profit Our total gross profit decreased by HK$5,663,313 or 31.5% from HK$17,965,507 for the year ended December 31, 2023 to HK$12,302,194 for the year ended December 31, 2024.
Net cash used in financing activities amounted to HK$10,641,086 for the year ended December 31, 2021, which included the advances to the related parties of HK$13,003,024 and the repayment of bank borrowings of HK$1,485,212, and was offset by the proceeds from bank borrowings of HK$3,847,150 during the year ended December 31, 2021.
Financing activities Net cash provided by financing activities was HK$45,493,432 for the year ended December 31, 2024, which was driven by proceeds from the IPO of HK$58,500,012, offset by payments for deferred IPO costs of HK$9,139,510 and repayment of bank borrowings of HK$3,867,070.
Removed
We will assess and monitor the challenges created by the increased volatility in the financial and currency market.
Added
To minimize the risk of volatility of foreign currencies in the financial and currency market, we did not initiate any trades of foreign currencies during the year ended December 31, 2024.
Removed
The transaction details of each foreign currency pair were set out below: For the years ended December 31, 2021 2022 2023 2021 2022 2023 Foreign currency pair Transaction in carrying amounts Transaction in notional amounts US$ US$ US$ US$ US$ US$ AUD/USD 729,476 448 2,724 113,341,038 223,814 272,445 EUR/USD 5,211,862 2,499,003 4,447 725,050,580 304,063,579 635,163 GBP/USD 2,324,200 3,681,794 10,474 346,504,821 495,241,194 1,594,119 NZD/USD 794,107 - - 123,030,161 - - USD/CAD 1,520,092 2,449,540 7,262 230,612,000 332,836,000 1,088,000 USD/CHF 1,387,616 1,774,770 3,500 213,950,000 209,368,000 482,000 USD/JPY 1,149,484 19,670 - 179,822,000 2,018,000 - XAU/USD 9,951,408 900,640 - 1,178,050,802 104,858,886 - Others - 120 - - 60,064 - 23,068,245 11,325,985 28,407 3,110,361,402 1,448,669,537 4,071,727 47 Table of Contents Results of operations Comparison of year ended December 31, 2021 with year ended December 31, 2022 The following table sets forth key components of our results of operations for the years ended December 31, 2021 and 2022: For the years ended December 31, 2021 2022 2022 Variance % of variance HK$ HK$ US$ HK$ Revenue 32,212,970 34,931,827 4,477,578 2,718,857 8.4 % Cost of revenue 16,260,407 16,512,702 2,116,606 252,295 1.6 % Gross profit 15,952,563 18,419,125 2,360,972 2,466,562 15.5 % Operating expenses Selling and marketing expenses 220,681 161,791 20,738 (58,890 ) -26.7 % Research and development expenses 29,478 80,012 10,256 50,534 171.4 % General and administrative expenses 5,167,704 10,634,851 1,363,180 5,467,147 105.8 % Total operating expenses 5,417,863 10,876,654 1,394,174 5,458,791 100.8 % Income from operations 10,534,700 7,542,471 966,798 (2,992,229 ) -28.4 % Other income (expense) Other income, net 1,402,874 1,265,200 162,174 (137,674 ) -9.8 % Realized loss on disposal of financial assets at fair value (16,120 ) - - 16,120 -100.0 % Change in fair value on financial assets at fair value (660,325 ) (1,157,650 ) (148,388 ) (497,325 ) 75.3 % Interest expenses, net (479,904 ) (443,577 ) (56,858 ) 36,327 -7.6 % Total other income (expense), net 246,525 (336,027 ) (43,072 ) (582,552 ) -236.3 % Income before income taxes 10,781,225 7,206,444 923,726 (3,574,781 ) -33.2 % Income tax expenses (431,630 ) (387,845 ) (49,714 ) 43,785 -10.1 % Net income 10,349,595 6,818,599 874,012 (3,530,996 ) -34.1 % Other comprehensive income (loss) Foreign currency translation adjustment (14,168 ) 7,496 961 21,664 -152.9 % Comprehensive income 10,335,427 6,826,095 874,973 (3,509,332 ) -34.0 % 48 Table of Contents Revenue The following table sets forth the breakdown of our revenue by major revenue type for the years ended December 31, 2021 and 2022, respectively: For the years ended December 31, 2021 2022 2022 Variance % of variance HK$ HK$ US$ HK$ Initial set up, installation and customization services 8,147,473 7,140,076 915,218 (1,007,397 ) -12.4 % Subscriptions 12,124,676 11,414,976 1,463,177 (709,700 ) -5.9 % Hosting, support and maintenance services 3,304,830 4,186,369 536,611 881,539 26.7 % Liquidity services 3,220,992 6,699,586 858,756 3,478,594 108.0 % White label services 1,860,221 1,889,188 242,157 28,967 1.6 % Quotes/news/package subscription services 3,554,778 3,601,632 461,659 46,854 1.3 % Total revenue 32,212,970 34,931,827 4,477,578 2,718,857 8.4 % Our revenue increased by HK$2,718,857 or 8.4% from HK$32,212,970 for the year ended December 31, 2021 to HK$34,931,827 for the year ended December 31, 2022, primarily because of the increase in our revenue derived from our Operating Subsidiaries’ liquidity services and hosting, support and maintenance services, and was partially offset by the decrease in revenue derived from our Operating Subsidiaries’ initial set up, installation and customization services.
Added
The transaction details of each foreign currency pair were set out below: For the years ended December 31, 2022 2023 2024 2022 2023 2024 Foreign currency pair Transaction in carrying amounts Transaction in notional amounts US$ US$ US$ US$ US$ US$ AUD/USD 448 2,724 - 223,814 272,445 - EUR/USD 2,499,003 4,447 - 304,063,579 635,163 - GBP/USD 3,681,794 10,474 - 495,241,194 1,594,119 - USD/CAD 2,449,540 7,262 - 332,836,000 1,088,000 - USD/CHF 1,774,770 3,500 - 209,368,000 482,000 - USD/JPY 19,670 - - 2,018,000 - - XAU/USD 900,640 - - 104,858,886 - - Others 120 - - 60,064 - - 11,325,985 28,407 - 1,448,669,537 4,071,727 - Recent Developments On May 20, 2024, the Company entered into a business development and marketing consulting agreement (the “Malaysia Consulting Agreement”) with CAKL Holdings Sdn Bhd, a Malaysian company that specializes in marketing and business development in Malaysia (the “Malaysian Consultant”).
Removed
Revenue from our Operating Subsidiaries’ initial set up, installation and customization services decreased by HK$1,007,397, or 12.4%, from HK$8,147,473 for the year ended December 31, 2021 to HK$7,140,076 for the year ended December 31, 2022.
Added
On May 22, 2024, the Company entered into a business development and marketing consulting agreement (the “China Consulting Agreement,” together with the Malaysia Consulting Agreement, the “Consulting Agreements”) with Shenzhen Yijincheng Business Consulting Co., Ltd., a Chinese company that specializes in marketing and business development in China (the “Chinese Consultant”, together with the Malaysian Consultant, the “Consultants”).
Removed
The decrease was mainly due to the decrease in demand for our Operating Subsidiaries’ customization services provided to customers to customize the functions and features of the trading platforms during the year ended December 31, 2022. We believe the decrease in demand for the Operating Subsidiaries’ customization services was mainly due to the conservative budgeting of our customers.
Added
In addition to its efforts to expand its market in China, the Company intends to explore its developing a presence in Southeast Asia.
Removed
Revenue from our Operating Subsidiaries’ subscriptions decreased by HK$709,700, or 5.9%, from HK$12,124,676 for the year ended December 31, 2021 to HK$11,414,976 for the year ended December 31, 2022.
Added
Pursuant to the Consulting Agreements, the Consultants will provide consulting services to the Company, including, but not limited to, assisting it in business expansion and evaluation of marketing strategy, formulating and executing sales strategies, conducting market research and data collection to support its business planning, providing professional planning and advertising promotion schemes to attract potential clients for it, negotiating joint market development programs with clients from Southeast Asia regions and China on behalf of it, communicating with relevant government agencies on behalf of it to obtain necessary approvals, assisting it in negotiating contracts with potential clients and other matters related to sales and business expansion.
Removed
The decrease was mainly due to the fact that some customers were lost, since certain small-sized customers had to shut down their businesses as a result of the adverse impact of the COVID-19 pandemic on their profitability.
Added
The total service fee for the Consulting Agreements is US$ 1.6 million (approximately HK$12.5 million), which will be amortized over the service period from the last week of May 2024 through May 2026.
Removed
Revenue from our Operating Subsidiaries’ hosting, support and maintenance services increased by HK$881,539, or 26.7%, from HK$3,304,830 for the year ended December 31, 2021 to HK$4,186,369 for the year ended December 31, 2022. The increase was mainly due to the increase in customers for our hosting, support and maintenance services for the year ended December 31, 2021.
Added
Income from foreign currency translation adjustment amounted to HK$7,496 and HK$17,866 for the years ended December 31, 2022 and 2023, respectively. 54 Table of Contents Comparison of year ended December 31, 2023 with year ended December 31, 2024 The following table sets forth key components of our results of operations for the years ended December 31, 2023 and 2024: For the years ended December 31, 2023 2024 2024 Variance % of variance HK$ HK$ US$ HK$ Revenue 31,961,177 26,085,318 3,358,178 (5,875,859 ) (18.4 )% Cost of revenue 13,995,670 13,783,124 1,774,415 (212,546 ) (1.5 )% Gross profit 17,965,507 12,302,194 1,583,763 (5,663,313 ) (31.5 )% Operating expenses Selling and marketing expenses 160,976 4,182,830 538,490 4,021,854 2,498.4 % Research and development expenses 11,373 172,810 22,247 161,437 1,419.5 % General and administrative expenses 11,110,942 27,317,790 3,516,844 16,206,848 145.9 % Total operating expenses 11,283,291 31,673,430 4,077,581 20,390,139 180.7 % Income (loss) from operations 6,682,216 (19,371,236 ) (2,493,818 ) (26,053,452 ) (389.9 )% Other income (expenses) Other income (expenses), net 457,941 (159,145 ) (20,488 ) (617,086 ) (134.8 )% Realized loss on disposal of financial assets at fair value (7,874 ) - - 7,874 (100.0 )% Change in fair value on financial assets at fair value (2,091 ) - - 2,091 (100.0 )% Interest (expense) income, net (353,002 ) 101,148 13,022 454,150 (128.7 )% Total other income (expense), net 94,974 (57,997 ) (7,466 ) (152,971 ) (161.1 )% Income (loss) before income taxes 6,777,190 (19,429,233 ) (2,501,284 ) (26,206,423 ) (386.7 )% Income tax expenses (148,309 ) (781,759 ) (100,642 ) (633,450 ) (427.1 )% Net income (loss) 6,628,881 (20,210,992 ) (2,601,926 ) (26,839,873 ) (404.9 )% Other comprehensive income (loss) Foreign currency translation adjustment 17,866 3,964 32,528 (13,902 ) (77.8 )% Comprehensive income (loss) 6,646,747 (20,207,028 ) (2,569,398 ) (26,853,775 ) (404.1 )% Revenue The following table sets forth the breakdown of our revenue by major revenue type for the years ended December 31, 2023 and 2024, respectively: For the years ended December 31, 2023 2024 2024 Variance % of variance HK$ HK$ US$ HK$ Initial set up, installation and customization services 8,973,079 2,700,199 347,619 (6,272,880 ) (69.9 )% Subscriptions 11,445,019 11,419,059 1,470,070 (25,960 ) (0.2 )% Hosting, support and maintenance services 4,338,184 4,893,759 630,014 555,575 12.8 % Liquidity service 2,626,516 1,902,895 244,975 (723,621 ) (27.6 )% White label service 2,122,198 3,018,561 388,604 896,363 42.2 % Quotes/news/package subscription services 2,456,181 2,150,845 276,896 (305,336 ) (12.4 )% Total revenue 31,961,177 26,085,318 3,358,178 (5,875,859 ) (18.4 )% Our revenue shrank by HK$5,875,859, or 18.4%, from HK$31,961,177 for the year ended December 31, 2023 to HK$26,085,318 (US$3,358,178) for the year ended December 31, 2024, primarily because of a plunge in our revenue from initial set up, installation and customization services, liquidity service and quotes/news/package subscription services, partially offset by an increase in our subscriptions, hosting, support and maintenance services, and white label service. 55 Table of Contents Revenue from our initial set up, installation and customization services plummeted by HK$6,272,880, or 69.9%, from HK$8,973,079 for the year ended December 31, 2023 to HK$2,700,199 for the same period in 2024.
Removed
We believe that the Operating Subsidiaries realized an increase in the number of customers because of the referral of new customers from existing customers. Revenue from our Operating Subsidiaries’ liquidity services increased by HK$3,478,594, or 108.0%, from HK$3,220,992 for the year ended December 31, 2021 to HK$6,699,586 for the year ended December 31, 2022.
Added
The decrease was mainly due to the decreased demand for customization services. Liquidity service revenue also dropped by HK$723,621, or 27.6%, from HK$2,626,516 for the year ended December 31, 2023 to HK$1,902,895 in the same period in 2024. The liquidity service fee is charged based on the transaction volume of orders sent directly to the liquidity providers.
Removed
The increase was mainly due to the increase in demands from a fast-growing customer who was engaging in in-house research on a trading signal. A trading signal is generated from algorithms with inputs such as technical patterns, moving average crosses, trading volume surges and interest rates.
Added
We experienced a lower transaction volume in the fiscal year ended December 31, 2024 compared to the same period in 2023. Our quotes/news/package subscription services are value-added and optional services to our customers. Through the subscription of this service line, we offer financial strategy analysis, financial calendar, real-time quotes and financial information and news to our customers.
Removed
When a trading signal is triggered, a signal to buy or sell a futures contract is generated.
Added
Compared to HK$2,456,181 in the year ended December 31, 2023, the quotes/news/package subscription services revenues for the same period in 2024 was HK$2,150,845 (US$276,896) with a decrement of HK$305,336 or 12.4%. During the year ended December 31, 2024, our customers subscribed to the basic data feed service instead of premium service package.
Removed
It requires our Operating Subsidiaries’ liquidity services, which provide automatic hedging functions to enable such client to send its customers’ orders directly to a broker’s platform. 49 Table of Contents Cost of revenue The following table sets forth the breakdown of our cost of revenue for the years ended December 31, 2021 and 2022: For the years ended December 31, 2021 2022 2022 Variance % of variance HK$ HK$ US$ HK$ Internet services cost 1,584,002 1,727,305 221,407 143,303 9.0 % Employee-related costs 6,470,263 6,886,855 882,760 416,592 6.4 % Subscription costs 192,443 171,228 21,948 (21,215 ) -11.0 % Outsourcing fees 1,491,876 752,904 96,508 (738,972 ) -49.5 % Amortization of intangible assets 5,992,085 6,160,391 789,642 168,306 2.8 % Commission expenses 529,725 808,894 103,684 279,169 52.7 % Others 13 5,125 657 5,112 39323.1 % Total cost of revenue 16,260,407 16,512,702 2,116,606 252,295 1.6 % Our cost of revenue increased by HK$252,295 or 1.6% from HK$16,260,407 for the year ended December 31, 2021 to HK$16,512,702 for the year ended December 31, 2022, which was mainly due to the increase in employee-related costs because lesser staff costs were capitalized as intangible assets under research and development since more time and resources were allocated for supporting our financial trading solution services in the year ended December 31, 2022.
Added
Despite the decrease in the revenues from initial setup, installation and customization services, subscriptions, liquidity service and quotes/news/package subscription services, we experienced a growth in revenues from licensing, hosting, support and maintenance services and white label service.
Removed
Gross profit Our total gross profit increased by HK$2,466,562 or 15.5% from HK$15,952,563 for the year ended December 31, 2021 to HK$18,419,125 for the year ended December 31, 2022. Our total gross profit margin increased from 49.5% for the year ended December 31, 2021 to 52.7% for the year ended December 31, 2022.
Added
Our hosting, support and maintenance services revenues increased by HK$555,575, or 12.8%, from HK$4,338,184 in the year ended December 31, 2023 to HK$4,893,759 (US$630,014) in the same period in 2024. During the fiscal year ended December 31, 2024, the number of customers of this service line increased by 16.7% compared to the same period in 2023.
Removed
The increase in our gross profit and gross profit margin was primarily due to the increase in revenue from liquidity services, which typically carries a higher gross margin. 50 Table of Contents Operating expenses Our operating expenses consisted of the following: For the years ended December 31, 2021 2022 2022 Variance % of variance HK$ HK$ US$ HK$ Selling and marketing expenses 220,681 161,791 20,738 (58,890 ) -26.7 % Research and development expenses 29,478 80,012 10,256 50,534 171.4 % General and administrative expenses 5,167,704 10,634,851 1,363,180 5,467,147 105.8 % Total operating expenses 5,417,863 10,876,654 1,394,174 5,458,791 100.8 % Our selling and marketing expenses mainly represented the advertising cost and marketing expenses.
Added
We provided hosting, support and maintenance services to our customers to whom we delivered the implementation of the new or customized trading platforms. White label service revenue increased by HK$896,363 or 42.2% from HK$2,122,198 for the year ended December 31, 2023 to HK$3,018,561 in the same period in 2024.
Removed
Our selling and marketing expenses decreased by HK$58,890, or 26.7%, from HK$220,681 for the year ended December 31, 2021 to HK$161,791 for the year ended December 31, 2022, mainly because lesser marketing expenses were incurred during the year ended December 31, 2022.

… 46 more changes not shown on this page.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

12 edited+4 added−2 removed77 unchanged
Biggest changeExcept as otherwise indicated in the footnotes to this table, or as required by applicable community property laws, all persons listed have sole voting and investment power for all Ordinary Shares shown as beneficially owned by them. 71 Table of Contents Principal Shareholders Ordinary Shares Beneficially Owned Percentage of Voting Power Number Percent Percent Directors and Executive Officers: Tai Wai (Stephen) Lam 5,567,457 42.01 % 42.01 % Chi Weng Tam 3,479,435 26.26 % 26.26 % Sui Yee Yeung — — — Sum (Philip) Cheng — — — Lai Sum (Christina) Liu — — — Cheuk Ho Chan — — — All directors and executive officers as a group 9,046,892 68.27 % 68.27 % 5% Principal Shareholders: Gaderway Investments Limited 9,046,892 (1) 68.27 % 68.27 % (1) These shares are held by Gaderway Investments Limited, a British Virgin Islands company, approximately 61.54% of which is held by Mr.
Biggest changeExcept as otherwise indicated in the footnotes to this table, or as required by applicable community property laws, all persons listed have sole voting and investment power for all Class A Ordinary Shares or Class B Ordinary Shares shown as beneficially owned by them. 71 Table of Contents Class A Number Class B Number Percent of Class A Percentage of Class B Percent of Total Voting Power* Directors And Executive Officers: Tai Wai (Stephen) Lam — 5,567,457 (1) — 61.54 % 60.14 % Chi Weng Tam — 3,479,435 (1) — 38.46 % 37.59 % Yun Pan Lau (Appointed on March 20, 2025) — — — — — Sum (Philip) Cheng — — — — — Lai Sum (Christina) Liu — — — — — Cheuk Ho Chan — — — — — Directors and Executive Officers as a group: — 9,046,892 — 100 % 97.73 % 5% Shareholders: Gaderway Investments Limited — 9,046,892 (1) — 100 % 97.73 % (1) These shares are held by Gaderway Investments Limited, a British Virgin Islands company, approximately 61.54% of which is held by Mr.
In computing the number of Ordinary Shares beneficially owned by a person listed below and the percentage ownership of such person, Ordinary Shares underlying options, warrants or convertible securities held by each such person that are exercisable or convertible within 60 days of the date of this annual report are deemed outstanding, but are not deemed outstanding for computing the percentage ownership of any other person.
In computing the number of Class A Ordinary Shares and Class B Ordinary Shares beneficially owned by a person listed below and the percentage ownership of such person, Class A Ordinary Shares or Class B Ordinary Shares underlying options, warrants or convertible securities held by each such person that are exercisable or convertible within 60 days of the date of this annual report are deemed outstanding, but are not deemed outstanding for computing the percentage ownership of any other person.
Share Ownership The following table sets forth information with respect to the beneficial ownership, within the meaning of Rule 13d-3 under the Exchange Act, of our Ordinary Shares as of the date of this annual report for: ● each of our directors and executive officers; and ● each person known to us to own beneficially more than 5.0% of our Ordinary Shares Beneficial ownership includes voting or investment power with respect to the securities.
Share Ownership The following table sets forth information with respect to the beneficial ownership, within the meaning of Rule 13d-3 under the Exchange Act, of our Class A Ordinary Shares and Class B Ordinary Shares as of the date of this annual report for: ● each of our directors and executive officers; and ● each person known to us to own beneficially more than 5.0% of our Class A Ordinary Shares or Class B Ordinary Shares Beneficial ownership includes voting or investment power with respect to the securities.
Tai Wai (Stephen) Lam and approximately 38.46% by Mr. Chi Weng Tam, each of whom is a director of Gaderway Investments Limited. They collectively hold the voting powers (and dispositive powers) over the Ordinary Shares held by Gaderway Investments Limited.
Tai Wai (Stephen) Lam and approximately 38.46% by Mr. Chi Weng Tam, each of whom is a director of Gaderway Investments Limited. They collectively hold the voting powers (and dispositive powers) over the Class B Ordinary Shares held by Gaderway Investments Limited.
Information with respect to beneficial ownership has been furnished by each director, officer or beneficial owner of 5% or more of our Ordinary Shares. Beneficial ownership is determined in accordance with the rules of the SEC and generally requires that such person have voting or investment power with respect to securities.
Information with respect to beneficial ownership has been furnished by each director, officer or beneficial owner of 5% or more of our Class A Ordinary Shares or Class B Ordinary Shares. Beneficial ownership is determined in accordance with the rules of the SEC and generally requires that such person have voting or investment power with respect to securities.
Duties of Directors Under British Virgin Islands law, our directors owe fiduciary duties both at common law and under statute, including a statutory duty to act honestly, in good faith and with a view to our best interests.
Board Practices Board of Directors Our board of directors consists of five directors. Duties of Directors Under British Virgin Islands law, our directors owe fiduciary duties both at common law and under statute, including a statutory duty to act honestly, in good faith and with a view to our best interests.
Controlled Company Our biggest shareholder, Gaderway Investments Limited, owns approximately 68.27% of the aggregate voting power of our outstanding Ordinary Shares as of the date of this annual report. As a result, we may be deemed to be a “controlled company” within the meaning of the NASDAQ listing standards.
Controlled Company Our biggest shareholder, Gaderway Investments Limited, owns 100% of the outstanding Class B Ordinary Shares and approximately 97.73% of the aggregate voting power of our outstanding Ordinary Shares as of the date of this annual report. As a result, we may be deemed to be a “controlled company” within the meaning of the NASDAQ listing standards.
Tam held the positions of Executive Director and Marketing Director, delivering IT certification training services to both corporate clients and individuals. Mr. Tam obtained a degree of Bachelor of Business Administration (Honours) from Lingnan University, Hong Kong. 64 Table of Contents Ms. Sui Yee Yeung is the Chief Financial Officer of our Company. Ms.
Tam held the positions of Executive Director and Marketing Director, delivering IT certification training services to both corporate clients and individuals. Mr. Tam obtained a degree of Bachelor of Business Administration (Honours) from Lingnan University, Hong Kong. 64 Table of Contents Mr.
Directors and Executive Officers Age Position/Title Tai Wai (Stephen) Lam 57 Chairman and Executive Director Chi Weng Tam 52 Executive Director and Chief Executive Officer Sui Yee Yeung 43 Chief Financial Officer Sum (Philip) Cheng 59 Independent Director Lai Sum (Christina) Liu 70 Independent Director Cheuk Ho Chan 57 Independent Director The following is a brief biography of each of our current directors and executive officers: Mr.
Directors and Executive Officers Age Position/Title Tai Wai (Stephen) Lam 58 Chairman and Executive Director Chi Weng Tam 53 Executive Director and Chief Executive Officer Yun Pan Lau 50 Chief Financial Officer Sum (Philip) Cheng 60 Independent Director Lai Sum (Christina) Liu 71 Independent Director Cheuk Ho Chan 58 Independent Director The following is a brief biography of each of our current directors and executive officers: Mr.
Except as indicated below, and subject to applicable community property laws, the persons named in the table have sole voting and investment power with respect to all Ordinary Shares shown as beneficially owned by them. Percentage of beneficial ownership of each listed person is based on 13,251,667 Ordinary Shares outstanding as of April 24,2024.
Except as indicated below, and subject to applicable community property laws, the persons named in the table have sole voting and investment power with respect to all Class A Ordinary Shares or Class B Ordinary Shares shown as beneficially owned by them.
The registered address of Gaderway Investments Limited is: Vistra Corporate Services Centre, Wickham Cay II, Road Town, Tortola, VG1110, British Virgin Islands.
The registered address of Gaderway Investments Limited is: Vistra Corporate Services Centre, Wickham Cay II, Road Town, Tortola, VG1110, British Virgin Islands. * Holders of Class A Ordinary Shares are entitled to one vote per one Class A Ordinary Share. Holders of Class B Ordinary Shares are entitled to 20 votes per one Class B Ordinary Share.
B. Compensation Tai Wai (Stephen) Lam (Executive Director) $ 378,000 Chi Weng Tam (Chief Executive Officer and Executive Director) $ 378,000 Sui Yee Yeung (Chief Financial Officer) $ 233,252 C. Board Practices Board of Directors Our board of directors consists of five directors.
B. Compensation Tai Wai (Stephen) Lam (Executive Director) $ 407,737 Chi Weng Tam (Chief Executive Officer and Executive Director) $ 328,652 Sui Yee Yeung (Chief Financial Officer, resigned with an effective date on March 10, 2025) $ 180,126 Yun Pan Lau (Chief Financial Officer, appointed on March 20, 2025) $ - C.
Removed
Yeung joined the Operating Subsidiaries as the Senior Accountant in July 2017 and has served as the Finance Manager of the Operating Subsidiaries since July 2018 and the Chief Financial Officer of m-FINANCE since June 2022. Ms. Yeung has had over 18 years of professional experience across finance and accounting, compliance, internal controls, taxation and public accounting.
Added
Yun Pan Lau is the Chief Financial Officer of our Company and has more than 15 years of experience working in the financial industry in Hong Kong. Prior to joining the Company in March 2025, Mr.
Removed
Prior to joining our Operating Subsidiaries, Ms. Yeung was a financial leader with a blend of experience at local and multinational corporations. Ms. Yeung obtained a Bachelor of Accounting degree from the University of Hong Kong and she is a member of the CPA Australia. Mr. Sum (Philip) Cheng is our independent director. Mr.
Added
Lau worked as a financial controller at Eternity Investment Limited (HKEX: 764), a Hong Kong-based investment holding company principally engaged in money lending, securities investment, property development and investment in Hong Kong and China, and sales of jewelry products, between March 2009 and September 2024. Mr.
Added
Lau is a certified public accountant of the Hong Kong Institute of Certified Public Accountants and a qualified member of the Association of Chartered Certified Accountants. Mr. Lau received his Bachelor’s Degree in Business Administrative Management from the University of South Australia in 2004. Mr. Sum (Philip) Cheng is our independent director. Mr.
Added
Percentage of beneficial ownership of each listed person is based on 4,204,775 Class A Ordinary Shares outstanding and 9,046,892 Class B Ordinary Shares outstanding as of the date of this annual report.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

12 edited+0 added−18 removed3 unchanged
Biggest changeRelated Party Transactions The following is a list of related parties which the Company has transactions with: (a) PrimeTime Global Technologies Limited, indirectly controlled by Gaderway Investments Limited, the shareholder of the Company. (b) PrimeTime Global Markets Limited, indirectly controlled by Gaderway Investments Limited, the shareholder of the Company.
Biggest changeThese amounts were unsecured, interest-free and repayable on demand. 72 Table of Contents c. Related Party Transactions The following is a list of related parties which the Company has transactions with: (a) PrimeTime Global Technologies Limited, indirectly controlled by Gaderway Investments Limited, the shareholder of the Company.
Since the Company wants to focus on its human resources for the developing new functions and upgrading existing functions, it outsources some of its ancillary works to related parties and independent third parties. The outsourcing fee was recorded as outsourcing fee in the cost of revenue. 2.
Since the Company wants to focus on its human resources for the developing new functions and upgrading existing functions, it outsources some of its ancillary works to related parties and independent third parties. The outsourcing fee was recorded as an outsourcing fee in the cost of revenue. 2.
The subscription fee was recorded as expense to net off against the sundry income as other income incurred over the same period. 3. The Company charged PrimeTime Global Technologies Limited for a subscription fee when it used the subscription services of the Company. The subscription income was recorded as revenue. 4.
The subscription fee was recorded as an expense to net off against the sundry income as other income incurred over the same period. 3. The Company charged PrimeTime Global Technologies Limited for a subscription fee when it used the subscription services of the Company. The subscription income was recorded as revenue. 4.
The balance represented the accounts receivable from PrimeTime Global Technologies Limited for the subscription income and commission income. The balances as of December 31, 2022 and 2023 have been settled on May 10, 2023 and February 22, 2024, respectively. For details, please refer to “e. Related Party Transactions” below. c.
The balance represented the accounts receivable from PrimeTime Global Technologies Limited for the subscription income and commission income. The balances as of December 31, 2022 and 2023 have been settled on May 10, 2023 and February 22, 2024, respectively. For details, please refer to “d. Related Party Transactions” below. b.
Due to a related party As of December 31, 2022 and 2023, the balances of amounts due to a related party were as follows: 2022 2023 2023 HK$ HK$ US$ Gaderway Investments Limited (1) 306,110 306,110 39,190 (1) Gaderway Investments Limited, the shareholder of the Company. The balance represented the amount advance to the Company.
Due to a related party As of December 31, 2023 and 2024, the balances of amounts due to a related party were as follows: 2023 2024 2024 HK$ HK$ US$ Gaderway Investments Limited (1) 306,110 306,110 39,408 (1) Gaderway Investments Limited, the shareholder of the Company. The balance represented the amount advance to the Company.
The Company charged PrimeTime Global Technologies Limited for sales commission from business referred by the Company. The Company will charge a commission fee at an agreed percentage from the sales amount referred by the Company to PrimeTime Global Technologies Limited. The sales commission was recorded as commission income in the other income. 74 Table of Contents f.
The Company charged PrimeTime Global Technologies Limited for sales commission from business referred by the Company. The Company will charge a commission fee at an agreed upon percentage from the sales amount referred by the Company to PrimeTime Global Technologies Limited. The sales commission was recorded as commission income in the other income. 73 Table of Contents d.
Accounts receivable – a related party As of December 31, 2022 and 2023, the balances of accounts receivable from a related party were as follows: 2022 2023 2023 HK$ HK$ US$ PrimeTime Global Technologies Limited (1) 242,379 410,899 52,606 (1) PrimeTime Global Technologies Limited, indirectly controlled by Gaderway Investments Limited, the shareholder of the Company.
Accounts receivable – a related party As of December 31, 2023 and 2024, the balances of accounts receivable from a related party were as follows: 2023 2024 2024 HK$ HK$ US$ PrimeTime Global Technologies Limited (1) 410,899 - - (1) PrimeTime Global Technologies Limited, indirectly controlled by Gaderway Investments Limited, the shareholder of the Company.
For the years ended December 31, 2021, 2022 and 2023, the related party transactions were as follows: 2021 2022 2023 2023 Note HK$ HK$ HK$ US$ Outsourcing fee paid to PrimeTime Global Technologies Limited (a) 1 875,358 113,410 - - Outsourcing fee paid to PrimeTime Global Markets Limited (b) 1 87,178 191,795 - - Subscription fee paid to PrimeTime Global Markets Limited (b) 2 320,566 290,160 - - Subscription fee received from PrimeTime Global Technologies Limited (a) 3 190,098 180,015 46,080 5,899 Sales commission received from PrimeTime Global Technologies Limited (a) 4 284,646 235,194 364,819 46,706 During the years ended December 31, 2022 and 2023, the Company declared dividends to its shareholders.
For the years ended December 31, 2022, 2023 and 2024, the related party transactions were as follows: 2022 2023 2024 2024 Note HK$ HK$ HK$ US$ Outsourcing fee paid to PrimeTime Global Technologies Limited (a) 1 113,410 - - - Outsourcing fee paid to PrimeTime Global Markets Limited (b) 1 191,795 - - - Subscription fee paid to PrimeTime Global Markets Limited (b) 2 290,160 - - - Subscription fee received from PrimeTime Global Technologies Limited (a) 3 180,015 46,080 - - Sales commission received from PrimeTime Global Technologies Limited (a) 4 235,194 364,819 - - During the years ended December 31, 2022 and 2023, the Company declared dividends to its shareholders.
Personal guarantees from related parties for bank loans Tai Wai (Stephen) Lam and Chi Weng Tam, the directors and shareholders of the Company, have jointly or severally provided personal guarantees for several bank loans of the Company.
Personal guarantees from related parties for bank loans Tai Wai (Stephen) Lam and Chi Weng Tam, the executives and directors of the Company as well as the shareholders of Gaderway Investments Limited, have jointly or severally provided personal guarantees for several bank loans of the Company. For details, please refer to Note 10.
Item 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS A. Major Shareholders See “Item 6. Directors, Senior Management and Employees—E. Share Ownership.” B. Related Party Transactions Transactions with Related Parties a. Due from related parties (a) Tai Wai (Stephen) Lam, a director and a shareholder of the Company.
Item 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS A. Major Shareholders See “Item 6. Directors, Senior Management and Employees—E. Share Ownership.” B. Related Party Transactions Transactions with Related Parties a.
For details, please refer to Note 13. Shareholders’ Equity in the consolidated financial statements. Notes: 1.
No dividend was declared in the year ended December 31, 2024. For details, please refer to Note 13. Shareholders’ Equity in the consolidated financial statements. Notes: 1.
(g) DTXS PrimeTime Holdings Limited, controlled by Metallic Icon Limited. (h) Gaderway Investments Limited, the shareholder of the Company. (i) Digital Mind Holdings Limited, controlled by Metallic Icon Limited.
(b) PrimeTime Global Markets Limited, indirectly controlled by Gaderway Investments Limited, the shareholder of the Company.
Removed
(b) Chi Weng Tam, a director, an executive officer and a shareholder of the Company. (c) PrimeTime Global Technologies Limited, controlled by DTXS FinTech Holdings Limited. (d) PrimeTime Global Markets Limited, controlled by DTXS PrimeTime Holdings Limited. (e) DTXS Fintech Holdings Limited, controlled by Metallic Icon Limited. (f) Metallic Icon Limited, controlled by Gaderway Investments Limited.
Removed
As of December 31, 2021, 2022 and 2023, the balances of amounts due from related parties were as follows: 2021 2022 2023 2023 HK$ HK$ HK$ US$ Tai Wai (Stephen) Lam (a) (1) 5,794,360 - - - Chi Weng Tam (b) (1) 3,338,543 - - - PrimeTime Global Technologies Limited (c) (2) 160,825 - - - PrimeTime Global Markets Limited (d) (3) 462,111 - - - DTXS Fintech Holdings Limited (e) (4) 14,319,362 - - - Metallic Icon Limited (f) (5) 58,172 - - - DTXS PrimeTime Holdings Limited (g) (6) 35,970 - - - Gaderway Investments Limited (h) (7) 62,300 - - - Digital Mind Holdings Limited (i) (8) - - - - 24,231,643 - - - (1) The balance represented the advances to the directors.
Removed
These amounts were unsecured, interest-free and repayable on demand. The outstanding balances have been assigned to Digital Mind Holdings Limited on June 29, 2022. The amounts due from related parties were presented as a reduction of the shareholder’s equity as of December 31, 2021 pursuant to the Codification of Staff Accounting Bulletins Topic 4, section G.
Removed
(2) The balance represented fund transfer which were unsecured, interest-free and repayable on demand. The outstanding balances have been assigned to Digital Mind Holdings Limited on June 29, 2022.
Removed
The amounts due from related parties were presented as a reduction of the shareholder’s equity as of December 31, 2021 pursuant to the Codification of Staff Accounting Bulletins Topic 4, section G. (3) The balance represented fund transfer which were unsecured, interest-free and repayable on demand.
Removed
The outstanding balances have been assigned to Digital Mind Holdings Limited on June 29, 2022.
Removed
The amounts due from related parties were presented as a reduction of the shareholder’s equity as of December 31, 2021 pursuant to the Codification of Staff Accounting Bulletins Topic 4, section G. 72 Table of Contents (4) The balance represented the expenses paid on behalf of DTXS Fintech Holdings Limited. These amounts were unsecured, interest-free and repayable on demand.
Removed
The outstanding balances have been assigned to Digital Mind Holdings Limited on June 29, 2022. The amounts due from related parties were presented as a reduction of the shareholder’s equity as of December 31, 2021 pursuant to the Codification of Staff Accounting Bulletins Topic 4, section G.
Removed
(5) The balance represented the expenses paid on behalf of Metallic Icon Limited and fund transfer. These amounts were unsecured, interest-free and repayable on demand. The outstanding balances have been assigned to Digital Mind Holdings Limited on June 29, 2022.
Removed
The amounts due from related parties were presented as a reduction of the shareholder’s equity as of December 31, 2021 pursuant to the Codification of Staff Accounting Bulletins Topic 4, section G. (6) The balance represented the expenses paid on behalf of DTXS PrimeTime Holdings Limited. These amounts were unsecured, interest-free and repayable on demand.
Removed
The outstanding balances have been assigned to Digital Mind Holdings Limited on June 29, 2022. The amounts due from related parties were presented as a reduction of the shareholder’s equity as of December 31, 2021 pursuant to the Codification of Staff Accounting Bulletins Topic 4, section G. (7) The balance represented the expenses paid on behalf of Gaderway Investments Limited.
Removed
These amounts were unsecured, interest-free and repayable on demand. The outstanding balances have been assigned to Digital Mind Holdings Limited on June 29, 2022. The amounts due from related parties were presented as a reduction of the shareholder’s equity as of December 31, 2021 pursuant to the Codification of Staff Accounting Bulletins Topic 4, section G.
Removed
(8) On June 29, 2022, m-FINANCE entered into a sale debt assignment agreement with Digital Mind Holdings Limited, the then shareholder of m-FINANCE, in which m-FINANCE consented to the assignment of amounts owed from the related parties, including Tai Wai (Stephen) Lam, Chi Weng Tam, PrimeTime Global Technologies Limited, PrimeTime Global Markets Limited, DTXS Fintech Holdings Limited, Metallic Icon Limited, DTXS PrimeTime Holdings Limited and Gaderway Investments Limited in the total amount of HK$22,615,322 (equivalent to US$2,898,843) to Digital Mind Holdings Limited.
Removed
The amounts due from related parties were presented as a reduction of the shareholder’s equity pursuant to the Codification of Staff Accounting Bulletins Topic 4, section G.
Removed
The amounts due from related parties were presented as a reduction of the shareholder’s equity have been fully settled by (i) netting off the dividend payable in the amounts of HK$10,114,311 (equivalent to US$1,296,457) declared on August 15, 2022 and the remaining balance was settled in cash in August 2022. b.
Removed
These amounts were unsecured, interest-free and repayable on demand. d.
Removed
Accrued expenses – a related party As of December 31, 2022 and 2023, the balances of accrued expenses to a related party were as follows: 2022 2023 2023 HK$ HK$ US$ PrimeTime Global Markets Limited (1) 290,160 - - (1) PrimeTime Global Markets Limited, indirectly controlled by Gaderway Investments Limited, the shareholder of the Company.
Removed
The balance represented the accrued expenses to PrimeTime Global Markets Limited for the subscription fee. For details, please refer to “e. Related Party Transactions” below. 73 Table of Contents e.