BitVentures Ltd 20-F for FY2026
BitVentures Ltd (BVC)
About this 20-F
BitVentures Ltd filed this 20-F on October 16, 2026, covering the fiscal year ended June 30, 2026 (FY2026).
BitVentures Ltd reported net income of US$3.4 million from continuing operations for fiscal year 2026 on US$498 thousand in revenue from new digital assets, e-commerce, and client referral segments, having exited its legacy Hong Kong and China wealth and asset management businesses. AI summary
Headline figures
Fiscal year ended June 30, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $498K
- compared with $0 a year earlier
- Net income
- $3.42M
- compared with a net loss of $5.37M a year earlier
- Diluted EPS
- $0.41
- compared with -$1.22 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
(Mark One)
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REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
OR
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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For the fiscal year ended |
OR
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
OR
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SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Date of event requiring this shell company report . . . . . . . . . . . . . . . . . . .
For the transition period from to
Commission file number:
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(Exact name of Registrant as specified in its charter) |
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(Jurisdiction of incorporation or organization) |
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(Address of principal executive offices) |
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Telephone: + Email: |
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(Name, Telephone, Email and/or Facsimile number and Address of Company Contact Person) |
Securities registered or to be registered pursuant to Section 12(b) of the Act:
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Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
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The Stock Market LLC (Nasdaq Capital Market) |
Securities registered or to be registered pursuant to Section 12(g) of the Act:
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None |
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Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:
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None |
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(Title of Class) |
Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ☐ Yes ☒
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. ☐ Yes ☒
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b‑2 of the Exchange Act.
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Large accelerated filer ☐ |
Accelerated filer ☐ |
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Emerging growth company |
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act. ☐
† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:
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International Financial Reporting Standards as issued |
Other ☐ |
If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow. ☐ Item 17 ☐ Item 18
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b‑2 of the Exchange Act).
(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. ☐ Yes ☐ No
TABLE OF CONTENTS
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Page |
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PART I |
4 |
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ITEM 1. |
IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS |
4 |
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ITEM 2. |
OFFER STATISTICS AND EXPECTED TIMETABLE |
4 |
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ITEM 3. |
KEY INFORMATION |
4 | |
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ITEM 4. |
INFORMATION ON THE COMPANY |
29 |
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ITEM 4A. |
UNRESOLVED STAFF COMMENTS |
37 |
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ITEM 5. |
OPERATING AND FINANCIAL REVIEW AND PROSPECTS |
37 |
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ITEM 6. |
DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES |
47 |
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ITEM 7. |
MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS |
54 |
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ITEM 8. |
FINANCIAL INFORMATION |
55 |
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ITEM 9. |
THE OFFER AND LISTING |
56 |
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ITEM 10. |
ADDITIONAL INFORMATION |
57 |
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ITEM 11. |
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
71 |
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ITEM 12. |
DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES |
72 |
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PART II |
73 |
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ITEM 13. |
DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES |
73 |
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ITEM 14. |
MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS |
73 |
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ITEM 15. |
CONTROLS AND PROCEDURES |
73 |
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ITEM 16A. |
AUDIT COMMITTEE FINANCIAL EXPERT |
75 |
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ITEM 16B. |
CODE OF ETHICS |
75 |
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ITEM 16C. |
PRINCIPAL ACCOUNTANT FEES AND SERVICES |
75 |
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ITEM 16D. |
EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES |
76 |
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ITEM 16E. |
PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS |
76 |
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ITEM 16F. |
CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT |
76 |
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ITEM 16G. |
CORPORATE GOVERNANCE |
76 |
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ITEM 16H. |
MINE SAFETY DISCLOSURE |
77 |
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ITEM 16I. |
DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS |
77 |
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ITEM 16J. |
INSIDER TRADING POLICIES |
77 |
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ITEM 16K. |
CYBERSECURITY |
77 |
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PART III |
78 |
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ITEM 17. |
FINANCIAL STATEMENTS |
78 |
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ITEM 18. |
FINANCIAL STATEMENTS |
78 |
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ITEM 19. |
EXHIBITS |
78 |
INTRODUCTION
Except where the context otherwise requires and for purposes of this annual report only:
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“ASIC” refers to application-specific integrated circuit; |
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“BTC,” “DOGE” and “LTC” refer to Bitcoin, Dogecoin and Litecoin, respectively; |
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“China” or the “PRC” refers to the People’s Republic of China, excluding, for the purpose of this annual report only, the Hong Kong Special Administrative Region, the Macau Special Administrative Region and Taiwan; |
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“Exchange Act” refers to the U.S. Securities Exchange Act of 1934, as amended; |
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“GH/s,” “TH/s,” “PH/s” and “EH/s” refer to gigahash, terahash, petahash and exahash per second, respectively, each of which is a measure of hashrate, being the number of hash computations performed per second; |
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“HK$,” “HK dollars,” and “HKD” refer to the legal currency of Hong Kong; |
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“Hong Kong” refers to the Hong Kong Special Administrative Region of the PRC; |
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“JOBS Act” refers to the Jumpstart Our Business Startups Act of 2012, as amended; |
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“Nasdaq” refers to The Nasdaq Stock Market LLC; |
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“ordinary shares” refers to our ordinary shares, par value US$0.0020 per share; |
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“SEC” refers to the U.S. Securities and Exchange Commission; |
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“Securities Act” refers to the U.S. Securities Act of 1933, as amended; |
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“Share Consolidation” refers to the consolidation of every twenty issued and unissued ordinary shares of par value US$0.0001 each into one ordinary share of par value US$0.0020 each, which was approved by an extraordinary general meeting held on December 19, 2025; unless otherwise indicated, share and per share data in this annual report have been retroactively adjusted to give effect to the Share Consolidation; |
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“BitVentures,” “we,” “us,” “the Company,” “our company,” “the Group” and “our” refer to BitVentures Limited, an exempted company incorporated in the Cayman Islands, and its subsidiaries; |
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“US$,” “U.S. dollars,” “$” and “dollars” refer to the legal currency of the United States; |
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“U.S. GAAP” refers to generally accepted accounting principles in the United States; and |
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“VIE” refers to variable interest entity. |
Our reporting currency is U.S. dollars. The majority of our business during the reporting period was conducted in either U.S. dollars or Hong Kong dollars. This annual report contains translations of Hong Kong dollars into U.S. dollars at specific rates solely for the convenience of the reader. Since 1983, the Hong Kong dollar has been pegged to the U.S. dollar at the rate of approximately HK$7.80 to US$1.00. Unless otherwise noted, all translations from Hong Kong dollars to U.S. dollars and from U.S. dollars to Hong Kong dollars in this annual report were made at a rate of HK$7.80 to US$1.00. We make no representation that any Hong Kong dollar amounts could have been, or could be, converted into U.S. dollars at the specific rate stated above. Furthermore, there is no assurance that Hong Kong’s currency pegging policy will not be changed in the future. If the pegging policy changes or if Hong Kong dollars suffer devaluation, our business, financial condition and results of operations could be materially and adversely affected.
BitVentures Limited is a Cayman Islands holding company, with operating subsidiaries primarily in Hong Kong and the United States. We are a technology company focusing on developing early-stage technology businesses, and actively build, operate and scale our businesses in order to achieve growth. Our two key growth segments are e-commerce and digital assets, and we seek to develop additional businesses in other areas of consumer and enterprise technology. The Company believes that early-stage technology ventures may offer exceptional growth opportunities, and seeks to identify and nurture such high-potential ventures.
During the fiscal year ended June 30, 2026, our primary businesses reported in our financial statements were e-commerce, digital assets and client referral services. In the first half of fiscal year 2026, the Company began official rollout of its e-commerce segment. The Company operated its e-commerce segment under a resale model, offering high-demand products such as consumer electronics, toys, and other consumer products via its storefront on Amazon. The Company transacted approximately US$0.14 million of gross merchandise volume (“GMV”) and over 1,800 customer orders in its e-commerce segment during fiscal year 2026. The Company intends to leverage its current e-commerce incubation as a launchpad for scaling additional product lines and revenue growth in its e-commerce segment. Starting in the second half of fiscal year 2026, the Company began official rollout of its digital assets segment. As of the date of this annual report, the Company has procured approximately 39 PH/s of Bitcoin (SHA-256) mining hardware and 0.3 TH/s of Scrypt-based (Litecoin and Dogecoin) mining hardware, and has currently installed an aggregate of approximately 39 PH/s of Bitcoin mining hashrate and 0.3 TH/s of Scrypt-based mining hashrate, at multiple third-party datacenter facilities in the United States with which the Company has contracted. The Company plans to continue to deploy additional mining equipment to grow its digital asset presence subject to market conditions and capital availability.
During the fiscal years ended June 30, 2024 and 2025, the Company underwent a series of restructurings to completely exit all of our legacy wealth management and asset management businesses in Hong Kong and in mainland China. On August 14, 2024, we exited our businesses in overseas wealth management and asset management and disposed of certain subsidiaries in Hong Kong, namely, Haiyin Insurance (Hong Kong) Co., Limited, Hywin International Insurance Broker Limited, Haiyin International Asset Management Limited, and Hywin Asset Management (Hong Kong) Limited. After the disposals, the Company no longer holds financial service licenses in Hong Kong. As a result of this strategic exit, for the years ended June 30, 2025 and 2024, we have reclassified our historical financial results relating to overseas wealth management and asset management services under discontinued operations. On June 28, 2024, we exited the wealth management businesses in China by terminating the variable interest entity (“VIE”) arrangements with Hywin Wealth Management, which, along with its subsidiaries, provided wealth management services in mainland China. The Company’s combined financial statements for the year ended June 30, 2024 were prepared excluding its historical PRC subsidiaries and VIEs. See “Item 4. Information on the Company—A. History and Development of the Company” for details of our corporate history.
Since fiscal year 2025, we no longer have any operations, offices or any employees in mainland China. The Company has also completely migrated its business data, information systems and business infrastructure outside of mainland China. We believe we have ceased to be a “China concept stock.”
FORWARD-LOOKING INFORMATION
This annual report contains forward-looking statements that involve risks and uncertainties. All statements other than statements of current or historical facts are forward-looking statements. These forward-looking statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from those expressed or implied by the forward-looking statements.
You can identify these forward-looking statements by words or phrases such as “may,” “will,” “expect,” “anticipate,” “aim,” “estimate,” “intend,” “plan,” “believe,” “likely to” or other similar expressions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. These forward-looking statements include, but are not limited to, statements about:
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our business strategies, plans, goals and objectives, especially those relating to e-commerce, digital assets, consumer and enterprise technology sectors; |
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our future business development, financial condition and results of operations; |
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our expectations regarding demand for and market acceptance of our existing and future products and services; |
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uncertainties and volatilities pertaining to digital assets and cryptocurrencies; |
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fluctuations in the prices of Bitcoin and other digital assets, network difficulty and mining rewards, and the availability and cost of mining hardware, hosting capacity and electricity; |
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projections of revenue, earnings, capital structure and other financial items; |
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the capabilities of our business operations; |
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expected future economic performance; |
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our expectation regarding the use of proceeds from our financing activities; |
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relevant government policies and regulations relating to the industries in which we operate; |
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the impact of public health crises or natural disasters; |
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competition in the industries in which we operate; and |
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general economic and business conditions in the markets in which we operate. |
You should read this annual report and the documents that we refer to in this annual report with the understanding that our actual future results may be materially different from and worse than what we expect. Other sections of this annual report include additional factors which could adversely impact our business and financial performance. Moreover, we operate in an evolving environment. New risk factors and uncertainties emerge from time to time and it is not possible for our management to predict all risk factors and uncertainties, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. We qualify all of our forward-looking statements by these cautionary statements.
The forward-looking statements made in this annual report relate only to events or information as of the date on which the statements are made in this annual report. Except as required by applicable law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events.
PART I
Item 1. Identity of Directors, Senior Management and Advisers
Not applicable.
Item 2. Offer Statistics and Expected Timetable
Not applicable.
Item 3. Key Information
Our Corporate Structure
The Company’s major subsidiaries as of the date of this annual report are summarized as follows:
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Date of |
Percentage of |
Place of |
Principal business |
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Name of subsidiaries |
incorporation |
ownership |
incorporation |
activities |
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New Innovations BVI Limited |
June 27, 2025 |
100% |
BVI |
Investment holding |
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New Innovations Limited |
March 15, 2023 |
100% |
Hong Kong |
Technology development |
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BitVentures America Inc |
September 16, 2015 |
100% |
United States |
Technology development |
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Freedom Mining LLC |
November 3, 2025 |
100% |
United States |
Digital assets |
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BTV-NDR eCommerce LLC |
July 29, 2025 |
100% |
United States |
E-commerce |
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Santech Global Hong Kong Limited |
May 3, 2016 |
100% |
Hong Kong |
Provision of client referral services |
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Condensed Consolidated Balance Sheets
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As of June 30, |
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2025 |
2026 |
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(US$) |
(US$) |
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(US$ in thousands, except for share and per share data, or otherwise stated) |
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Assets |
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Current assets: |
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Cash and cash equivalents |
950 | 4,463 | ||||||
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Short-term investments |
8,791 | 7,011 | ||||||
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Accounts receivable, net |
— | 2 | ||||||
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Deposits, prepayments and other current assets |
143 | 74 | ||||||
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Inventories |
— | 34 | ||||||
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Digital assets |
— | 71 | ||||||
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Total current assets |
9,884 | 11,655 | ||||||
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Non-current assets: |
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Property and equipment, net |
5 | 403 | ||||||
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Right-of-use asset |
— | 58 | ||||||
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Long-term investment |
— | 2,100 | ||||||
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Total non-current assets |
5 | 2,561 | ||||||
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Total Assets |
9,889 | 14,216 | ||||||
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Liabilities and Shareholders’ Equity |
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Current liabilities: |
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Accounts payable |
— | 15 | ||||||
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Other payables and accrued liabilities |
158 | 208 | ||||||
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Lease liability |
— | 37 | ||||||
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Total current liabilities |
158 | 260 | ||||||
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Non-current liability |
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Lease liability |
— | 23 | ||||||
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Total non-current liability |
— | 23 | ||||||
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Total Liabilities |
158 | 283 | ||||||
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Shareholders’ Equity: |
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| Ordinary shares (US$0.0001 par value; authorized 500,000,000 shares; issued and outstanding 168,000,000 shares as of June 30, 2025; and US$0.0020 par value; authorized 100,000,000 shares; issued and outstanding 8,484,581 shares as of June 30, 2026) | 17 | 17 | ||||||
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Additional paid-in capital |
45,783 | 46,578 | ||||||
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Accumulated deficit |
(36,069 | ) | (32,645 | ) | ||||
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Accumulated other comprehensive loss |
— | (17 | ) | |||||
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Total Shareholders’ Equity |
9,731 | 13,933 | ||||||
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Total Liabilities and Shareholders’ Equity |
9,889 | 14,216 | ||||||
Condensed Consolidated Results of Continuing Operations
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Years Ended June 30, |
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2024 |
2025 |
2026 |
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(US$) |
(US$) |
(US$) |
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(US$ in thousands, except for share and per share data, or otherwise stated) |
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Revenues |
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Digital assets |
— | — | 90 | |||||||||
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E-commerce |
— | — | 119 | |||||||||
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Client referral services |
21,818 | — | 289 | |||||||||
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Total revenues |
21,818 | — | 498 | |||||||||
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Operating cost and expenses |
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Cost of revenues |
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Digital assets, exclusive of depreciation |
— | — | 61 | |||||||||
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Digital assets, depreciation |
— | — | 62 | |||||||||
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E-commerce |
— | — | 91 | |||||||||
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Compensation and benefits |
15,808 | — | — | |||||||||
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Depreciation and amortization |
1,014 | 498 | 18 | |||||||||
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Loss on digital assets |
— | — | 18 | |||||||||
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Share-based compensation expenses |
102 | 236 | 795 | |||||||||
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Sales and marketing expenses |
3,131 | 530 | 42 | |||||||||
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General and administrative expenses |
2,537 | 2,421 | 1,676 | |||||||||
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Total operating cost and expenses |
22,592 | 3,685 | 2,763 | |||||||||
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Loss from operations |
(774 | ) | (3,685 | ) | (2,265 | ) | ||||||
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Other income/(expenses) |
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Interest (expense)/income, net |
(61 | ) | 121 | 338 | ||||||||
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Other income/(expense), net |
70 | (2,109 | ) | 5,351 | ||||||||
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Total other income/(expenses), net |
9 | (1,988 | ) | 5,689 | ||||||||
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(Loss)/income before income tax expense |
(765 | ) | (5,673 | ) | 3,424 | |||||||
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Income tax expense |
— | 117 | — | |||||||||
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Net (loss)/income from continuing operations |
(765 | ) | (5,790 | ) | 3,424 | |||||||
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Other comprehensive loss |
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Unrealized losses on short-term investments |
— | — | (17 | ) | ||||||||
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Net (loss)/income and comprehensive loss from continuing operations |
(765 | ) | (5,790 | ) | 3,407 | |||||||
Condensed Consolidated Statements of Cash Flows
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Years Ended June 30, |
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2024 |
2025 |
2026 |
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(US$) |
(US$) |
(US$) |
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(US$ in thousands, except for share and per share data, or otherwise stated) |
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Cash flows from operating activities |
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Net (loss)/income for the year |
(743 | ) | (5,369 | ) | 3,424 | |||||||
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Adjustments to reconcile net (loss)/income to net cash provided by operating activities |
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Depreciation |
51 | 3 | 62 | |||||||||
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Amortization of right-of-use assets |
963 | 495 | 14 | |||||||||
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Expected credit loss |
49 | — | — | |||||||||
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Share-based compensation expenses |
102 | 236 | 795 | |||||||||
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Loss on digital assets |
— | — | 18 | |||||||||
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Loss on early termination of right-of-use asset |
— | 273 | — | |||||||||
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Write-off of property and equipment |
— | — | 4 | |||||||||
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Gain from disposal of subsidiaries |
— | (138 | ) | — | ||||||||
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Asset impairment loss |
2,158 | — | — | |||||||||
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Changes in deferred taxes |
(324 | ) | — | — | ||||||||
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Changes in operating assets and liabilities |
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Accounts receivable |
— | — | (2 | ) | ||||||||
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Deposits, prepayments and other current assets |
(45 | ) | (397 | ) | 69 | |||||||
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Digital assets |
— | — | (89 | ) | ||||||||
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Inventories |
— | — | (34 | ) | ||||||||
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Accounts payable |
— | — | 15 | |||||||||
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Commission payable |
(56 | ) | (482 | ) | — | |||||||
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Income tax payable |
36 | (102 | ) | — | ||||||||
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Lease liability |
(1,024 | ) | (525 | ) | (12 | ) | ||||||
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Other payables and accrued liabilities |
18 | (275 | ) | 50 | ||||||||
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Due to related party |
1,379 | (201 | ) | — | ||||||||
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Net cash provided by/(used in) operating activities |
2,564 | (6,482 | ) | 4,314 | ||||||||
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Cash flows from investing activities |
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Placement of short-term investments |
— | (8,791 | ) | (13,240 | ) | |||||||
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Proceeds from disposal and maturity of short-term investments |
— | — | 12,903 | |||||||||
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Purchase of property and equipment |
— | (2 | ) | (464 | ) | |||||||
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Net cash inflow from disposal of subsidiaries |
— | 33 | — | |||||||||
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Net cash used in investing activities |
— | (8,760 | ) | (801 | ) | |||||||
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Cash flows from financing activity |
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Proceeds from issuance of ordinary shares |
— | 1,008 | — | |||||||||
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Net cash provided by financing activity |
— | 1,008 | — | |||||||||
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Net increase/(decrease) in cash and cash equivalents |
2,564 | (14,234 | ) | 3,513 | ||||||||
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Cash and cash equivalents at beginning of the year |
12,620 | 15,184 | 950 | |||||||||
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Cash and cash equivalents at end of the year |
15,184 | 950 | 4,463 | |||||||||
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A. |
[Reserved] |
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B. |
Capitalization and Indebtedness |
Not applicable.
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C. |
Reasons for the Offer and Use of Proceeds |
Not applicable.
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D. |
Risk Factors |
Summary of Risk Factors
BitVentures Limited is a Cayman Islands holding company, with operating subsidiaries in Hong Kong and the United States. We are a technology company focusing on developing early-stage technology businesses, and actively build, operate and scale our businesses in order to achieve growth. The Company’s two key growth segments are currently e-commerce and digital assets, and the Company seeks to develop additional businesses in other areas of consumer and enterprise technology. The Company believes that early-stage technology ventures may offer exceptional growth opportunities, and seeks to identify and nurture such high-potential ventures.
Risks associated with our business primarily arise from our plan to develop, acquire or invest in new technology ventures. There is the risk that any technology businesses that we develop, acquire or invest in may not be successful, or such new business may not be profitable at all. In addition, any products that we develop or distribute in our e-commerce business segment might encounter a decline in value or a decrease in sales, which could adversely affect our revenues and profitability. Our operations in digital assets also subject us to heightened uncertainties and volatilities. Furthermore, our business might also be adversely affected if we are unable to comply with laws and regulations applicable to our business and services, such as laws and regulations relating to data and cybersecurity, and intellectual property. See “Item 3. Key Information—D. Risk Factors—Risks Related to Our Business.”
You should carefully consider all of the information in this annual report before making an investment in our ordinary shares. Below please find a summary of the principal risks and uncertainties we face, organized under relevant headings:
Risks Related to Our Business
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We underwent a series of corporate restructurings in fiscal years 2024 and 2025. We are at an early stage of business transformation, and may not be able to effectively implement our future business strategies and investment, in which case our business and results of operations may be materially and adversely affected. |
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We have a history of losses and may not achieve profitability. |
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We face a number of operational and financial risks in our e-commerce business. |
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We are substantially dependent on third-party marketplaces for our e-commerce operations, and are subject to platform policies; any suspension, delisting, or policy changes could materially affect our operations. |
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We face sourcing and procurement risks in our e-commerce business. |
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We need to rely on access to third-party intellectual property, which may not be available to the Company on commercially reasonable terms, or at all. |
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As a reseller of consumer electronics, toys and other consumer products, we may be subject to product liability, warranty, and consumer product safety and advertising regulatory risk. |
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We depend on a limited number of third-party suppliers and service providers for our digital assets business, including our mining hardware manufacturer, hosting and colocation providers, power supply, and mining pool operator, and any disruption to these relationships could materially and adversely affect our business. |
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Bitcoin and other digital asset prices are highly volatile, and our reported financial results may fluctuate significantly as a result of digital asset price movements independent of our underlying operating performance. |
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We rely on a third-party custodian to safeguard the digital assets we hold, and any security breach, operational failure, or insolvency of our custodian could result in the loss of our digital assets. |
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Our future success depends on the continuing efforts to retain our existing management team and other key employees as well as to attract, integrate and retain highly skilled and qualified personnel, and our business may be disrupted if we lose their services. |
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Financial products that we historically distributed involve various risks and such risks may continue to negatively affect our reputation, client relationships, operations and prospects. |
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Our reputation and brand recognition are crucial to our business. Any harm to our reputation or failure to enhance our brand recognition may materially and adversely affect our business, financial condition and results of operations. |
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We face risks related to outbreaks of health epidemics, natural disasters, and other extraordinary events, which could significantly disrupt our operations and adversely affect our business, financial condition or results of operations. |
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We and our directors and/or executive officers may be involved from time to time in legal or administrative proceedings and commercial or contractual disputes, which could have a material adverse effect on our business, results of operations and financial condition. |
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We have granted, and may continue to grant, share options and other forms of share-based incentive awards, which may result in increased share-based compensation expenses. |
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Any significant failure in our information technology systems could have a material adverse effect on our business and profitability. |
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Our controlling shareholder and our Chairman and Chief Executive Officer are able to exert significant influence over our Company, whose interests may differ from, or conflict with, those of our other shareholders. |
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We may face intellectual property infringement claims that could be time consuming and costly to defend and may result in the loss of significant rights by us. |
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We have limited insurance coverage. |
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If we fail to implement and maintain an effective system of internal controls to remediate our material weaknesses in internal control over financial reporting, we may be unable to accurately report our results of operations, meet our reporting obligations or prevent fraud. |
Risks Related to Doing Business in Hong Kong
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Changes and developments in the political and economic policies of the PRC government may materially and adversely affect our business in Hong Kong. |
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If the PCAOB is unable to inspect or investigate completely our auditor as required under the Holding Foreign Companies Accountable Act, the SEC will prohibit the trading of our ordinary shares. The delisting of our ordinary shares, or the threat of their being delisted, may materially and adversely affect the value of your investment. Additionally, the inability of the PCAOB to conduct adequate inspections of our auditor would deprive our investors of the benefits of such inspections. |
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The PRC government may intervene or influence the Hong Kong operations of an offshore holding company, such as ours, at any time. The PRC government may exert more control over offerings conducted overseas and/or foreign investment in Hong Kong-based issuers. If the PRC government exerts more oversight and control over offerings that are conducted overseas and/or foreign investment in Hong Kong-based issuers and we were to be subject to such oversight and control, it may result in a material adverse change to our business operations in Hong Kong. |
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Changes in U.S. and international trade policies, particularly with regard to China, may adversely impact our business and operating results. |
Risks Related to Our Ordinary Shares
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The market price of our ordinary shares has been and may continue to be volatile, which could result in substantial losses to investors. |
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Our ordinary shares have been, and may continue to be, thinly traded, and our limited public float may result in lower liquidity and greater price volatility. |
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If we fail to meet the continued listing requirements of Nasdaq, our ordinary shares could be delisted, which would adversely affect the liquidity and market price of our ordinary shares. |
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If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, the market price for our ordinary shares and trading volume could decline. |
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The sale or availability for sale of substantial amounts of our ordinary shares could adversely affect their market price. |
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We may issue additional ordinary shares or other equity or equity-linked securities in the future, which could dilute your ownership interest and adversely affect the market price of our ordinary shares. |
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We do not expect to pay dividends in the foreseeable future, and you must rely on price appreciation of our ordinary shares for a return on your investment. |
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Techniques employed by short sellers may drive down the market price of our ordinary shares. |
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We are a “controlled company” within the meaning of the Nasdaq listing rules and may rely on exemptions from certain corporate governance requirements that provide protection to shareholders of other companies. |
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Our memorandum and articles of association contain anti-takeover provisions that could have a material adverse effect on the rights of holders of our ordinary shares. |
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Certain judgments obtained against us by our shareholders may not be enforceable. |
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You may face difficulties in protecting your interests, and your ability to protect your rights through U.S. courts may be limited, because we are incorporated under Cayman Islands law. |
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We have ceased to qualify as an “emerging growth company,” and we will continue to incur significant costs as a result of being a public company. |
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We are a foreign private issuer within the meaning of the rules under the Exchange Act and are therefore exempt from certain provisions applicable to U.S. domestic issuers. |
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We may lose our foreign private issuer status in the future, including as a result of possible changes to the SEC’s eligibility criteria, which could result in significant additional costs and expenses. |
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As a company incorporated in the Cayman Islands, we are permitted to adopt certain home country practices in relation to corporate governance matters in lieu of the corporate governance listing standards applicable to U.S. domestic issuers, which home country practices may afford comparatively less protection to shareholders. |
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We may be a passive foreign investment company, or PFIC, for our current or future taxable years, which could result in adverse U.S. federal income tax consequences to U.S. investors in our ordinary shares. |
Risks Related to Our Business
We underwent a series of corporate restructurings in fiscal years 2024 and 2025. We are at an early stage of business transformation, and may not be able to effectively implement our future business strategies and investment, in which case our business and results of operations may be materially and adversely affected.
In 2024 and 2025, we underwent a series of corporate restructurings. As of the date of this annual report, we have terminated our historical businesses in China. We no longer have operations, offices or employees in China. We have also exited our historical businesses in overseas wealth management and asset management in Hong Kong. As such, our reported historical financial results may not be indicative of our future performance.
We have repositioned to become a technology company. The Company is currently operating businesses in e-commerce and digital assets, and may target opportunities in other areas of consumer and enterprise technology. The Company believes that early-stage technology ventures may offer exceptional growth opportunities, and seeks to identify and nurture such high-potential ventures. However, our new business strategy is currently at an early stage and we cannot assure you that our business development in the technology sector will succeed at all. We may also seek other new business strategies, new business opportunities or new business acquisitions or partnerships from time to time, and we may seek such new business strategies, new business opportunities or new business acquisitions or partnerships in any sectors outside of the e-commerce, digital assets, or other technology sectors. We may also expand into new geographic markets we believe are attractive from time to time. We cannot assure you that any such new businesses will be profitable or will succeed at all.
Investment in new business strategies is inherently risky and could materially adversely affect the Company’s business, reputation, results of operations and financial condition. Such endeavors in new business strategies or acquisitions may involve significant risks and uncertainties, including limitation of management’s resources, greater-than-expected liabilities and expenses, economic, political, legal and regulatory challenges associated with operating in new businesses, regions or countries, inadequate return on capital, potential impairment of tangible and intangible assets, and significant write-offs. Investment and acquisition transactions are exposed to additional risks, including failing to obtain required regulatory approvals on a timely basis or at all, or the imposition of onerous conditions that could delay or prevent the Company from completing a transaction or otherwise limit the Company’s ability to fully realize the anticipated benefits of a transaction. These new ventures are inherently risky and may not be successful. The failure of any significant investment could materially adversely affect the Company’s business, reputation, results of operations and financial condition.
In addition, we cannot assure you that our current and planned personnel, systems, procedures and controls will be adequate to support our future operations, and we cannot assure you that we will be able to manage our growth or implement our future business strategies effectively, and failure to do so may materially and adversely affect our business and results of operations.
We have a history of losses and may not achieve profitability.
We have incurred losses from operations of US$0.8 million, US$3.7 million and US$2.3 million for the fiscal years ended June 30, 2024, 2025 and 2026, respectively. We believe that we will continue to incur operating losses and may incur net losses until we are able to generate sufficient revenue and contribution margin from our continuing operations, which may not occur at all, or may take longer than we currently expect.
Furthermore, our legacy client referral services business may not be sustainable, and it is not a core focus of our business strategy, and we may scale it back or discontinue it at our discretion; accordingly, it should not be relied upon as representative of our future business or financial results. Our two growth segments, namely e-commerce and digital assets, remain new and unproven for us, having only recently commenced operations, and we cannot assure you that either will grow to a scale sufficient to generate significant revenue or contribution margin, or that either will become profitable at all.
We face a number of operational and financial risks in our e-commerce business.
As we continue to operate and expand our e-commerce business, and particularly given its early stage, we expect our operating and financial results to vary significantly from period to period due to a number of factors, including changes in demand for our products, our ability to acquire new customers and encourage repeat purchases, our ability to source products consistently and on favorable terms, our ability to manage inventory levels, general economic conditions affecting consumer discretionary spending, advertising and marketing costs, and the costs of developing and expanding our product lines. The e-commerce industry is highly competitive, and we compete against companies with substantially greater financial, marketing, and operational resources. We cannot assure you that we will achieve or sustain profitability in our e-commerce business.
We are substantially dependent on third-party marketplaces for our e-commerce operations, and are subject to platform policies; any suspension, delisting, or policy changes could materially affect our operations.
Substantially all of our e-commerce revenue is generated through sales on Amazon's marketplace. We do not control Amazon's platform, and Amazon may at any time, and without advance notice, change its fee structure, search or ranking algorithms, listing requirements, seller performance standards, or other policies applicable to third-party sellers, any of which could reduce the visibility, competitiveness, or profitability of our product listings. Amazon may also suspend or terminate our seller account, or restrict specific listings, based on its assessment of our performance metrics, customer complaints, or intellectual property or authenticity claims made by third parties against our listings, including claims that we are not an authorized reseller of a given brand, regardless of whether any such claim is ultimately meritorious. Separately, Amazon competes directly with third-party sellers, including us, through its own private-label and wholesale offerings, which may further reduce the visibility or competitiveness of our listings. Any suspension, delisting, or material adverse policy change could immediately and materially reduce our revenue, and we may have limited or no recourse against Amazon in such circumstances.
We face sourcing and procurement risks in our e-commerce business.
We source substantially all of our e-commerce inventory from wholesalers, distributors, liquidators, and other secondary-market sources and marketplaces such as eBay. We do not have long-term supply agreements with most of the wholesalers and sellers from whom we procure, and we may experience shortages, price increases, quality issues, or longer lead times that could negatively affect our operations. If any of our key sourcing relationships were to deteriorate or terminate, we may not be able to identify and onboard replacement sources on comparable terms, or at all, in a timely manner. Furthermore, because we source inventory through wholesale and secondary-market channels rather than directly from manufacturers or brand owners, we also face a risk that products we acquire and resell may be counterfeit, diverted from authorized distribution channels, or otherwise not genuine, despite our efforts to source only authentic, legitimately-obtained inventory. If any of our listings are challenged by a brand owner, intellectual property holder, or Amazon itself as counterfeit or unauthorized, we could face listing removal, account suspension, intellectual property infringement claims, and reputational harm, any of which could materially and adversely affect our business. In addition, products sourced outside of a manufacturer's authorized distribution channel may not carry a valid manufacturer's warranty, which could affect customer satisfaction and expose us to returns, chargebacks, or customer claims.
We need to rely on access to third-party intellectual property, which may not be available to the Company on commercially reasonable terms, or at all.
We need to rely on access to third-party intellectual property, which may not be available to us on commercially reasonable terms, or at all. With respect to our e-commerce business, we generally resell genuine, previously-sold or wholesale-sourced consumer products rather than manufacturing our own products, and we do not believe that the resale of such genuine products, in and of itself, generally requires a license from the applicable brand owner or intellectual property holder under applicable trademark and copyright exhaustion (or "first sale") principles. However, certain brand owners restrict resale of their products to authorized distribution networks, may pursue claims against unauthorized resellers notwithstanding the first sale doctrine, including for trademark claims based on materially different product condition, packaging, or warranty status, and certain online marketplaces, including Amazon, require seller-specific authorization to list certain gated brands or product categories regardless of the legal availability of a first-sale defense. We cannot assure you that we will always be able to obtain any required marketplace authorization, or that we will not face claims from brand owners notwithstanding our efforts to remain compliant with platform policies and applicable laws and regulations.
As a reseller of consumer electronics, toys and other consumer products, we may be subject to product liability, warranty, and consumer product safety and advertising regulatory risk.
We resell consumer electronics and other consumer products manufactured by third parties. Although we do not manufacture these products, we may nonetheless be named as a defendant in product liability claims relating to defective, unsafe, or non-compliant products, and applicable law in some circumstances imposes obligations or liability on resellers, importers, or private labelers of consumer products independent of the original manufacturer. As a seller of consumer products in the United States, we may also be subject to oversight by the U.S. Consumer Product Safety Commission ("CPSC"), including recall, reporting, and certification obligations applicable to certain product categories, and by the Federal Trade Commission ("FTC") with respect to advertising claims, endorsements, and other marketing practices. Any product liability claim, recall, or regulatory enforcement action, regardless of merit, could result in significant costs, reputational harm, and diversion of management attention, and we may not carry sufficient insurance to cover all such claims.
Our entry into cryptocurrencies and digital assets may subject us to heightened operational, regulatory, financial and cybersecurity risks.
As we continue to operate and expand our businesses in cryptocurrency and digital assets, we may engage in the mining, trading, acquiring and selling of cryptocurrencies and digital assets. We have a limited operating history in the cryptocurrency and digital asset industries, which makes it difficult to forecast our prospects and future results of operations. You should take into account the risks and uncertainties frequently encountered by companies operating in the cryptocurrency and digital asset industries. Our operations and financial results could decline for a number of reasons, including changes in government regulations, heightened volatilities or reduction in the value of cryptocurrencies, any changes in blockchain technologies, intense competition in the cryptocurrency and digital asset industries, or any unforeseen security breaches and cyberattacks.
The regulatory framework applicable to digital assets and cryptocurrency mining in the United States remains unsettled and continues to evolve at the federal and state levels. Although the staff of the SEC stated in March 2025 that proof-of-work mining activities of the type we conduct do not involve the offer and sale of securities, and the GENIUS Act enacted in July 2025 established a federal framework for payment stablecoins, comprehensive market structure legislation, including the Digital Asset Market Clarity Act, which was passed by the U.S. House of Representatives in July 2025, failed to advance in the U.S. Senate in September 2026, and it is not possible to predict whether or when such legislation will be enacted or what form it will take. In addition, federal and state regulators and legislatures have adopted or proposed measures relating to the energy consumption, environmental impact, siting and ownership of cryptocurrency mining operations, and the tax treatment of digital assets. Changes in laws, regulations or their interpretation, or the adoption of new laws or regulations, could require us to modify or cease certain activities, increase our compliance costs, restrict our access to banking, custody, hosting or other services, or adversely affect the value of the digital assets we mine and hold. See “Item 4. Information on the Company—B. Business Overview—Regulations—Regulations in the United States.”
We depend on a limited number of third-party suppliers and service providers for our digital assets business, including our mining hardware manufacturer, hosting and colocation providers, power supply, and mining pool operator, and any disruption to these relationships could materially and adversely affect our business.
We rely on a limited number of suppliers and service providers to provide us with products and services critical to our digital assets business, including mining equipment, hosting and colocation facilities, mining pool services, and repair and operational expertise. We do not have long-term contracts with all such suppliers and service providers, and the price and availability of mining equipment and related resources may fluctuate significantly with the price of Bitcoin and other digital assets, as higher digital asset prices tend to increase industry-wide demand for mining hardware and hosting capacity and correspondingly increase our costs. We may not be able to obtain such products and services on commercially reasonable terms, or at all, particularly during periods of high industry-wide demand, which could have a material adverse effect on our business, financial condition, and results of operations.
We do not own the datacenters or colocation facilities at which our mining hardware is hosted, and we depend on third-party hosting and colocation providers to supply electric power, connectivity, and maintenance services. Our hosting arrangements typically have terms of approximately one to two years, and we cannot assure you that any hosting agreement will be renewed on similar terms, or at all, upon expiration. If any of our hosting providers is unable or unwilling to continue supplying sufficient power or services, breaches or fails to fulfill its hosting agreement with us, or experiences financial distress or insolvency, we may need to relocate the affected mining hardware to an alternative facility, which may have a less favorable cost structure or may not be available on a timely basis, and our hashrate and revenue could be adversely affected during any transition period. In the event of a hosting provider's bankruptcy, insolvency, or other financial distress, we may also face delays, disputes, or additional costs in recovering our mining hardware, including as a result of restrictions on access to the provider's premises or claims asserted by the provider's creditors, notwithstanding our ownership of such hardware. In addition, certain U.S. states and localities have adopted or proposed restrictions specific to cryptocurrency mining, including energy curtailment or demand-response requirements, moratoria, or mining-specific taxes or permitting requirements, which may affect our hosting providers' ability or cost to supply power to us at one or more sites. As of the date of this annual report, our mining hardware is hosted across multiple facilities and geographic locations in the United States, which we believe reduces, but does not eliminate, our exposure to disruption at any single site.
Substantially all of our mining hardware is manufactured by Bitmain due to its upstream market dominance, whose mining hardware is manufactured primarily in China, and we do not have a diversified base of hardware suppliers. We purchase our mining hardware primarily from U.S.-based vendors and distributors rather than importing hardware ourselves, which we believe reduces our direct exposure to U.S. customs enforcement actions relating to the country of origin of such hardware. Nonetheless, any increased tariffs, import duties, or trade restrictions affecting Bitmain or the broader supply chain for digital asset mining hardware would likely be passed through to us, in whole or in part, by our vendors in the form of higher prices, even though we do not import such hardware directly. In addition, our reliance on a single hardware manufacturer exposes us to risks including product defects, warranty and technical support limitations, and our inability to obtain additional hardware on favorable terms, or at all, if our relationship with Bitmain, our vendors, or our distributors were to deteriorate. Furthermore, digital asset mining hardware is also subject to rapid technological change, with newer generations of mining equipment offering meaningfully improved efficiency typically introduced every one to two years. As network-wide hashrate and difficulty increase, we may be required to make continuing capital expenditures to acquire newer generations of mining hardware in order to remain competitive, and we cannot assure you that we will have sufficient capital to do so, or that we will be able to upgrade our hardware fleet as quickly as our competitors.
We also depend on a limited number of mining pool operators to aggregate our hashrate contribution with that of other participants and calculate and distribute our share of mining rewards. We rely on the mining pool operator's own record-keeping and calculations to determine our proportionate share of rewards, and we have limited ability to independently verify, and limited recourse in the event of any inaccuracy in, such calculations. While we generally select mining pool operators that maintain industry-standard security and operational control certifications, such as SOC 1 or SOC 2 attestations, we do not independently audit our mining pool operators, and we cannot assure you that they will not become subject to regulatory action, security breaches, or operational disruptions that could affect our ability to receive mining rewards. If we are unable to maintain our relationship with our current mining pool operators on favorable terms, or if we experience errors, delays, or disruptions in reward distribution, our revenue and results of operations could be adversely affected.
Bitcoin and other digital asset prices are highly volatile, and our reported financial results may fluctuate significantly as a result of digital asset price movements independent of our underlying operating performance.
Bitcoin and other digital asset prices are highly volatile, and our mining revenue and profitability are directly affected by fluctuations in digital asset prices, network difficulty, and periodic halving events that reduce mining rewards, all of which are outside our control. We hold digital assets on our balance sheet, which are measured at fair value with changes in fair value recognized in our net income each period. As a result, our reported financial results may fluctuate significantly from period to period based solely on digital asset price movements, independent of our operating performance, and may not be comparable across periods or to companies that account for digital assets differently.
We rely on a third-party custodian to safeguard the digital assets we hold, and any security breach, operational failure, or insolvency of our custodian could result in the loss of our digital assets.
We currently rely entirely on a third-party institutional custodian to hold and safeguard our digital assets. Our custodian is licensed by the New York State Department of Financial Services to engage in virtual currency business activity. Notwithstanding this licensure, our custodian's systems and controls may be subject to security breaches, hacking, employee or insider misconduct, or operational errors, any of which could result in the loss, theft, or inaccessibility of our digital assets, and we may have limited or no recourse or insurance recovery in such an event. In addition, in the event of our custodian's bankruptcy, insolvency, or other financial distress, there can be no assurance that digital assets held in custody on our behalf would be treated as segregated from the custodian's own assets or would not become subject to claims by the custodian's creditors or a bankruptcy estate, notwithstanding any contractual segregation arrangements between us and our custodian. We may in the future adopt cold storage or other self-custody arrangements for some or all of our digital assets, which would reduce our reliance on a third-party custodian but would introduce different operational and security risks that we would need to manage directly.
Our future success depends on the continuing efforts to retain our existing management team and other key employees as well as to attract, integrate and retain highly skilled and qualified personnel, and our business may be disrupted if we lose their services.
Our future success depends heavily on the continued services of our current executive officers and senior management, including our Chairman and CEO, Lawrence Wai Lok. Our Chairman and CEO, Lawrence Wai Lok, possesses extensive experience in the technology sector, which includes sourcing and executing investments, mergers and acquisitions and corporate financing in the technology sector given his 20 years of experience in investment banking and capital markets. We are a small organization, and the loss of Mr. Lok or any other member of our senior management team, including the leadership of our e-commerce and digital assets segments, could disrupt our operations, and we may not be able to find suitable replacements easily, in a timely manner, or at all.
Our plan to develop, acquire and invest in high-growth technology businesses may also require us to recruit suitable team members, skilled employees and additional key personnel. We may not successfully recruit such additional talents or retain our current key employees who may be necessary to our development. This may cause our plan to grow in the technology sectors to fail, which may materially and adversely affect our business, results of operations and financial condition.
Financial products that we historically distributed involve various risks and such risks may continue to negatively affect our reputation, client relationships, operations and prospects.
During the fiscal years ended June 30, 2023, 2024 and the first two months of fiscal year 2025, we selected and distributed financial products to our clients on behalf of issuers of these financial products, and we also provided asset management products to our clients through our former licensed Hong Kong subsidiaries. We also operate a client referral services business, under which we refer clients to insurance brokers who may sell to them various insurance products. These financial products often involved complex structures and risks, including default, market, liquidity, and counterparty risks, and we are or were subject to risks arising from potential misconduct by the product providers with respect to our historical distribution activities. Our non-PRC operations, including our former Hong Kong subsidiaries, were managed separately from Hywin Wealth Management, a variable interest entity in the PRC with which we terminated all contractual arrangements in June 2024.
In December 2023, redemption issues were reported on certain asset-backed products previously distributed by Hywin Wealth Management. While Hywin Wealth Management acted only as distributor of these asset-backed products, the affected clients demanded repayment from Hywin Wealth Management. We have terminated all of our wealth management and asset management businesses, and we no longer maintain any affiliation or relationship with Hywin Wealth Management. Since September 2024, Mr. Han Hongwei, our former Chairman, and Madame Wang Dian, our former Chief Executive Officer, have been detained in China and are facing prosecution in connection with alleged fraud, and the outcome of their legal proceedings remains pending as of the date of this annual report. Mr. Han and Madame Wang were removed from our Board of Directors in March 2025, and no longer hold any position with the Company. Notwithstanding our separation from Mr. Han, Madame Wang, and Hywin Wealth Management, negative publicity concerning these matters may continue to affect our reputation, client relationships, operations and prospects.
Our reputation and brand recognition are crucial to our business. Any harm to our reputation or failure to enhance our brand recognition may materially and adversely affect our business, financial condition and results of operations.
Our reputation and brand recognition are critical to the success of our business. We believe a sound reputation and a well-recognized brand are crucial to increasing our client and customer base, which in turn facilitates our effort to develop new business opportunities, monetize our services, and enhance our attractiveness to clients, customers, and business partners. Our reputation and brand are vulnerable to many threats that can be difficult or impossible to control, and costly or impossible to remediate. Regulatory inquiries or investigations, lawsuits initiated by clients or other third parties, employee misconduct, perceptions of conflicts of interest, rumors, and complaints from or disputes with our clients or customers, among other things, could substantially damage our reputation, even if they are baseless or satisfactorily addressed. If we are unable to maintain a good reputation or further enhance our brand recognition, our business and revenues may be materially and adversely affected.
We face risks related to outbreaks of health epidemics, natural disasters, and other extraordinary events, which could significantly disrupt our operations and adversely affect our business, financial condition or results of operations.
Our business could be and has been affected by public health epidemics, such as the outbreak of avian influenza, severe acute respiratory syndrome, or SARS, Zika virus, Ebola virus, the COVID-19 pandemic or other disease. Furthermore, although the World Health Organization has declared that the COVID-19 pandemic is no longer a global health emergency and the Hong Kong government has lifted restrictions and quarantine measures due to the fact that the pandemic is being contained, there is still great uncertainty as to the future development of the COVID-19 pandemic, which may still affect our work efficiency and productivity and cause delay or cancellation in our offline events, and in turn adversely affect our business. In addition to the impact of the COVID-19 pandemic and other health epidemics, our business could also be materially and adversely affected by natural disasters or other public safety concerns affecting Hong Kong or elsewhere in the world.
We and our directors and/or executive officers may be involved from time to time in legal or administrative proceedings and commercial or contractual disputes, which could have a material adverse effect on our business, results of operations and financial condition.
From time to time, we and our directors and/or executive officers may be involved in legal or administrative proceedings and commercial disputes. Such proceedings or disputes may include, without limitation, commercial or contractual disputes in our ordinary course of business, lawsuits or disputes brought by our clients, class action complaints or litigations brought by our investors, lawsuits involving employment matters, and other regulatory compliance matters. See “Item 8. Financial Information—A. Consolidated Statements and Other Financial Information—Legal Proceedings” for details of material legal proceedings that we are involved in. Proceedings such as these may have a material adverse effect on our business, results of operations and financial condition. There can be no assurance that any proceedings and claims, should they arise again, will not have a material adverse effect on our business, results of operations and financial condition. Any such proceedings and claims, even if resolved in our favor, could result in significant expense, and an adverse outcome could materially and adversely affect our business, results of operations, and financial condition.
We have granted, and may continue to grant, share options and other forms of share-based incentive awards, which may result in increased share-based compensation expenses.
On December 6, 2020, we adopted our current share incentive plan, or the 2020 Plan. Under the 2020 Plan, the maximum aggregate number of ordinary shares available for issuance will be 5,000,000 ordinary shares, or 250,000 ordinary shares after giving effect to the Share Consolidation, equal to 10% of the total outstanding ordinary shares of our company immediately prior to completion of our initial public offering. As of the date of this annual report, 1,776,000 restricted share awards, or 88,800 restricted shares after giving effect to the Share Consolidation, have been granted to our executive officers and directors under the 2020 Plan. We recognized US$0.1 million, US$0.2 million and US$0.8 million of share-based compensation expenses for the years ended June 30, 2024, 2025 and 2026, respectively. See “Item 6. Directors, Senior Management and Employees—B. Compensation—Share Incentive Plans” and “Item 5. Operating and Financial Review and Prospects—A. Operating Results—Key Components of Results of Operations—Operating Costs and Expenses—Share-based Compensation Expenses.” We will continue to incur share-based compensation expenses in future periods due to awards granted or to be granted under the 2020 Plan and any future awards under other plans. We may continue to grant restricted share awards, restricted share units, share options or other share-based incentives in the future, which may result in significant share-based compensation expenses in our profit or loss statement. We account for compensation costs for all share-based incentives using a fair-value based method and recognize expenses in our consolidated statement of income in accordance with the relevant rules under U.S. GAAP, which may have a material adverse effect on our net income. Any additional securities issued under share-based compensation schemes will adversely affect our results of operations and dilute the ownership interests of our shareholders. We believe the granting of share-based compensation is of significant importance to our ability to attract and retain key employees, and we will continue to grant share-based compensation to directors or employees in the future.
Any significant failure in our information technology systems could have a material adverse effect on our business and profitability.
Our business is highly dependent on the ability to manage our information technology systems securely and accurately. The proper functioning of our client transactions and services, sales management, digital assets mining operations, financial control, accounting, and other information technology systems, together with the communication systems, is critical to our business and to our ability to compete effectively. We rely on outsourced third-party providers for a significant portion of our information technology systems. We cannot assure you that our business activities would not be materially disrupted in the event of a partial or complete failure of any of these information technology or communication systems, which could be caused by, among other things, software malfunction, computer virus attacks or conversion errors due to system upgrading. In addition, a prolonged failure of our information technology system could damage our reputation and materially and adversely affect our future prospects and profitability. In addition, as we plan to develop or acquire other technology businesses, we cannot assure you that no additional licenses or permits under relevant laws and regulations to own or conduct such business or IT infrastructure would be required, or that we would be able to obtain additional licenses or permits. In addition, our information technology systems or any other digital assets that we hold may be subject to cybersecurity attacks such as hacking, or other unforeseen technology or platform failures. Any significant technology failures may render us unable to recoup our investments and our future prospects and profitability may be materially and adversely affected.
Our controlling shareholder and our Chairman and Chief Executive Officer are able to exert significant influence over our Company, whose interests may differ from, or conflict with, those of our other shareholders.
As of the date of this annual report, the Raku Foundation beneficially owns an aggregate of 67.1% of our outstanding share capital. On February 25, 2026, Mr. Lok completed an irrevocable transfer of all of the issued and outstanding equity interests of Carmel Holdings Limited to the Raku Foundation for no cash consideration, as part of a succession and wealth planning structure, while Mr. Lok does not retain any economic or voting interest in the Raku Foundation. As more than 50% of the voting power for the election of directors is held by the Raku Foundation, we are a "controlled company" within the meaning of the Nasdaq listing rules. As our controlling shareholder, the Raku Foundation has significant influence over the appointment, retention, and removal of our directors and executive officers, including Mr. Lok, our current Chairman and Chief Executive Officer. In addition, Mr. Lok, in his capacity as our Chairman and Chief Executive Officer, has substantial influence over our day-to-day management, operations, and strategic direction. As a result of the Raku Foundation's level of shareholding and Mr. Lok's executive role, the Raku Foundation and Mr. Lok are together able to exert a significant degree of influence over our business, including decisions regarding mergers, consolidations, and the sale of all or substantially all of our assets, election of directors, and other significant corporate actions. This control may limit your ability to influence corporate matters and may discourage others from pursuing a merger, takeover, or other change of control transaction, which could deprive holders of our ordinary shares of the opportunity to sell their shares at a premium over the prevailing market price. For more information regarding our principal shareholders and their affiliated entities, see "Item 6. Directors, Senior Management and Employees—E. Share Ownership."
We may face intellectual property infringement claims that could be time consuming and costly to defend and may result in the loss of significant rights by us.
Although we have not been subject to any litigation, pending or threatened, alleging infringement of third parties’ intellectual property rights, we cannot assure you that such infringement claims will not be asserted against us in the future. Intellectual property litigation is expensive and time-consuming and could divert resources and management attention from the operation of our business. If there is a successful claim of infringement, we may be required to alter our services, cease certain activities, pay substantial royalties and damages to, and obtain one or more licenses from, third parties. We may not be able to obtain those licenses on commercially acceptable terms, or at all. Any of those consequences could cause us to lose revenues, impair our client relationships and harm our reputation.
We have limited insurance coverage.
We may not be able to obtain sufficient insurance to safeguard against risks and unexpected events. We provide pension insurance, work-related injury insurance and medical insurance for our employees. Our directors and officers liability insurance policy for our board of directors and executives has lapsed, and we may not be able to restore coverage on commercially reasonable terms. We do not have commercial insurance coverage on our assets, and although we carry limited liability coverage in our e-commerce business, we generally do not maintain insurance to cover our business or interruption of our business, litigation, class action lawsuits or product liability. Any uninsured occurrence of loss or damage to property, litigation or business disruption may result in our incurring substantial costs and the diversion of resources, which could have an adverse effect on our results of operations and financial condition.
If we fail to implement and maintain an effective system of internal controls to remediate our material weaknesses in internal control over financial reporting, we may be unable to accurately report our results of operations, meet our reporting obligations or prevent fraud.
In connection with the audits of our consolidated financial statements for the year ended June 30, 2026, we and our independent registered public accounting firm identified the following material weaknesses in our internal control over financial reporting. As defined in the standards established by the U.S. Public Company Accounting Oversight Board, a “material weakness” is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis.
The material weaknesses that have been identified relate to (i) our lack of sufficient resources with U.S. GAAP and SEC reporting experience in the accounting department to provide accurate information in a timely manner; (ii) our lack of key monitoring mechanisms such as internal audit department to oversee and monitor our risk management, business strategies and financial reporting procedures; and (iii) our lack of inventory aging monitoring mechanisms, leading to inability to track the slow-moving and obsolete inventories, and potential understatement of the provision of inventories.
To remediate the material weaknesses identified in internal control over our financial reporting, we have: (a) hired experienced personnel in our accounting department with adequate experience with financial reporting and compliance requirements; (b) continued our efforts to provide ongoing training courses in U.S. GAAP to existing personnel, including our Principal Financial Officer; (c) continued our efforts to enhance the effectiveness of our internal control over financial reporting by increasing technology adoption, reducing reliance on paper records or single personnel, and migrating our internal processes to cloud-based software systems that are suitable for U.S. reporting companies, which we believe will enhance areas such as inventory management, document retention, transaction approvals, and automation in financial reporting.
Our independent registered public accounting firm has not performed an audit of our internal control over financial reporting. Had our independent registered public accounting firm performed an audit of our internal control over financial reporting, additional deficiencies may have been identified.
Following the identification of the material weaknesses, we have implemented and are continuing to implement a number of measures to address the material weaknesses identified. See “Item 15. Controls and Procedures—Internal Control over Financial Reporting.” However, the implementation of these measures may not fully address the material weaknesses in our internal control over financial reporting, and we cannot conclude that they have been fully remedied. Our failure to correct the material weaknesses or our failure to discover and address any other control deficiencies could result in inaccuracies in our financial statements and could also impair our ability to comply with applicable financial reporting requirements and related regulatory filings on a timely basis. As a result, our business, financial condition, results of operations and prospects may be materially and adversely affected.
We are subject to the Sarbanes-Oxley Act of 2002. Section 404 of the Sarbanes-Oxley Act, or Section 404, requires that we include a report from management on the effectiveness of our internal control over financial reporting in our annual reports. In addition, if we become an accelerated filer or a large accelerated filer, our independent registered public accounting firm will be required to attest to and report on the effectiveness of our internal control over financial reporting. Our management may conclude that our internal control over financial reporting is not effective. Moreover, even if our management concludes that our internal control over financial reporting is effective, our independent registered public accounting firm, after conducting its own independent testing, may issue a report that is qualified if it is not satisfied with our internal controls or the level at which our controls are documented, designed or operated, or if it interprets the relevant requirements differently from us. In addition, since we have become a public company, our reporting obligations may have placed a significant strain on our management, operational and financial resources and systems. We may be unable to timely complete our evaluation testing and any required remediation.
During the course of documenting and testing our internal control procedures, in order to satisfy the requirements of Section 404, we may identify other weaknesses and deficiencies in our internal control over financial reporting. In addition, if we fail to maintain the adequacy of our internal control over financial reporting, as these standards are modified, supplemented or amended from time to time, we may not be able to conclude on an ongoing basis that we have effective internal control over financial reporting in accordance with Section 404. If we fail to achieve and maintain an effective internal control environment, we could suffer material misstatements in our financial statements and fail to meet our reporting obligations, which would likely cause investors to lose confidence in our reported financial information. This could in turn limit our access to capital markets, harm our results of operations, and lead to a decline in the trading price of our ordinary shares. Additionally, ineffective internal control over financial reporting could expose us to increased risk of fraud or misuse of corporate assets and subject us to potential delisting from the stock exchange on which we list, regulatory investigations and civil or criminal sanctions. We may also be required to restate our financial statements from prior periods.
Risks Related to Doing Business in Hong Kong
Changes and developments in the political and economic policies of the PRC government may materially and adversely affect our business in Hong Kong.
We primarily conduct business in Hong Kong, a special administrative region of China, and we historically operated in Mainland China.
The PRC government historically had significant oversight and discretion over the conduct of our business, and may continue to intervene in or influence our operations through adopting and enforcing rules and regulatory requirements. Accordingly, our financial condition and results of operations may be affected to a significant extent by economic, political and legal developments in the PRC.
The PRC economy differs from the economies of most developed countries in many respects, including the level of development, growth rate, extent of government involvement, control of foreign exchange and allocation of resources. A substantial portion of productive assets in China is still managed by the government. In addition, the PRC government regulates industry development by imposing industrial policies. The PRC government also plays a significant role in China’s economic growth by allocating resources, controlling payment of foreign currency-denominated obligations, setting monetary policy and regulating financial services and institutions.
While the PRC economy has experienced significant growth in the past decades, growth has been uneven, both geographically and among various sectors of the economy. The PRC government has implemented various measures to encourage economic growth and guide the allocation of resources. Some of these measures may benefit the overall PRC economy, but may also have a negative effect on us. Our financial condition and results of operations could be materially and adversely affected by government control over capital investments or changes in tax regulations that are applicable to us. In addition, the PRC government has implemented in the past certain measures, including interest rate increases, to manage the pace of economic growth and prevent the economy from overheating. Any prolonged slowdown in the economy could lead to a reduction in demand for our services and consequently have a material adverse effect on our businesses, financial condition and results of operations.
We cannot assure you that the oversight will not be extended to companies operating in Hong Kong like us and any such action may lead to a reduction in demand for our services and consequently have a material adverse effect on our businesses, financial condition and results of operations in Hong Kong, as well as damage our reputation.
If the PCAOB is unable to inspect or investigate completely our auditor as required under the Holding Foreign Companies Accountable Act, the SEC will prohibit the trading of our ordinary shares. The delisting of our ordinary shares, or the threat of their being delisted, may materially and adversely affect the value of your investment. Additionally, the inability of the PCAOB to conduct adequate inspections of our auditor would deprive our investors of the benefits of such inspections.
On April 21, 2020, the SEC released a joint statement highlighting the risks associated with investing in companies based in or that have substantial operations in emerging markets including China. The joint statement emphasized the risks associated with lack of access for the Public Company Accounting Oversight Board (the “PCAOB”) to inspect auditors and audit work papers in China and higher risks of fraud in emerging markets.
On May 20, 2020, the U.S. Senate passed the Holding Foreign Companies Accountable Act (the “HFCAA”) requiring a foreign company to certify it is not owned or controlled by a foreign government if the PCAOB is unable to audit specified reports because the company uses a foreign auditor not subject to PCAOB inspection. If the PCAOB is unable to inspect the company’s auditors for three consecutive years, the issuer’s securities are prohibited from trading on a national securities exchange or in the over-the-counter trading market in the U.S. On December 2, 2020, the U.S. House of Representatives approved the HFCAA. On December 18, 2020, the HFCAA was signed into law.
On June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act, or AHFCAA, which proposed to reduce the period of time for foreign companies to comply with PCAOB audits from three to two consecutive years, thus reducing the time period before the securities of such foreign companies may be prohibited from trading or delisted. On December 29, 2022, the Consolidated Appropriations Act, 2023 (the “CAA”), of which the AHFCAA forms a part, was signed into law, and it officially reduced the number of consecutive non-inspection years required for triggering the prohibitions under the HFCAA from three years to two, thus reducing the time before an applicable issuer’s securities may be prohibited from trading or delisted.
On December 2, 2021, the SEC issued amendments to finalize rules implementing the submission and disclosure requirements in the HFCAA. The rules apply to registrants that the SEC identifies as having filed an annual report with an audit report issued by a registered public accounting firm that is located in a foreign jurisdiction and that the PCAOB is unable to inspect or investigate completely because of a position taken by an authority in foreign jurisdictions. The final amendments became effective on January 10, 2022. The SEC began to identify and list Commission-Identified Issuers on its website shortly after registrants filed their annual reports for 2021.
On December 16, 2021, the PCAOB announced the PCAOB HFCAA Determinations (the “2021 Determinations”) relating to the PCAOB’s inability to inspect or investigate completely registered public accounting firms headquartered in Mainland China or Hong Kong, because of a position taken by one or more authorities in Mainland China or Hong Kong.
On August 26, 2022, the PCAOB announced and signed a Statement of Protocol (the “Protocol”) with the China Securities Regulatory Commission and the Ministry of Finance of the People’s Republic of China. The Protocol provides the PCAOB with: (i) sole discretion to select the firms, audit engagements and potential violations it inspects and investigates, without any involvement of Chinese authorities; (ii) procedures for PCAOB inspectors and investigators to view complete audit work papers with all information included and for the PCAOB to retain information as needed; (iii) direct access to interview and take testimony from all personnel associated with the audits the PCAOB inspects or investigates.
The PCAOB reassessed the 2021 Determinations that the positions taken by PRC authorities prevented the PCAOB from inspecting and investigating in Mainland China and Hong Kong completely. The PCAOB sent its inspectors to conduct on-site inspections and investigations of firms headquartered in Mainland China and Hong Kong from September to November 2022.
On December 15, 2022, the PCAOB announced that the PCAOB was able to secure complete access to inspect and investigate accounting firms headquartered in Mainland China and Hong Kong, and the PCAOB Board voted to vacate previous determinations to the contrary. Should the PCAOB again encounter impediments to inspections and investigations in Mainland China or Hong Kong as a result of positions taken by any authority in either jurisdiction, including by the CSRC or the MOF, the PCAOB will make determinations under the HFCAA as and when appropriate. We cannot assure you whether Nasdaq or regulatory authorities would apply additional and more stringent criteria to us after considering the effectiveness of our auditor’s audit procedures and quality control procedures, adequacy of personnel and training, or sufficiency of resources, geographic reach, or experience as it relates to the audit of our financial statements. There is a risk that the PCAOB is unable to inspect or investigate completely the Company’s auditor because of a position taken by an authority in a foreign jurisdiction or any other reasons, and that the PCAOB may re-evaluate its determinations as a result of any obstruction with the implementation of the Protocol. Such lack of inspection or re-evaluation could cause trading in the Company’s securities to be prohibited under the HFCAA and ultimately result in a determination by a securities exchange to delist the Company’s securities. In addition, under the HFCAA as incorporated into the CAA, our securities may be prohibited from trading on the Nasdaq or other U.S. stock exchanges if our auditor is not inspected by the PCAOB for two consecutive years, and this ultimately could result in our ordinary shares being delisted by an exchange.
Our independent registered public accounting firm, Audit Alliance LLP (“Audit Alliance”), whose audit report is included in this annual report on Form 20-F, is headquartered in Singapore and is registered with, and subject to inspection by, the PCAOB, which last inspected Audit Alliance in May 2026. Therefore, we do not expect to be identified as a Commission-Identified Issuer under the HFCAA.
Furthermore, these developments may add uncertainties to the trading of our ordinary shares, and we cannot assure you whether the SEC, the PCAOB, Nasdaq, or other regulatory authorities would apply additional and more stringent criteria to us after considering the effectiveness of our auditor’s audit procedures and quality control procedures, adequacy of personnel and training, or sufficiency of resources, geographic reach or experience as it relates to the audit of our financial statements. It remains unclear what further actions the SEC, the PCAOB or Nasdaq will take to address these issues and what impact those actions will have on U.S.-listed companies that have significant operations in the PRC or Hong Kong and have securities listed on a U.S. stock exchange (including a national securities exchange or over-the-counter stock market). In addition, any additional actions, proceedings, or new rules resulting from these efforts to increase U.S. regulatory access to audit information could create some uncertainty for investors, the market price of our ordinary shares could be adversely affected, and we could be delisted if we and our auditor are unable to meet the PCAOB inspection requirement or are required to engage a new audit firm, which would require significant expense and management time. If trading in our ordinary shares is prohibited under the CAA in the future because the PCAOB determines that it cannot inspect or fully investigate our auditor at such future time, Nasdaq may determine to delist our ordinary shares. If our ordinary shares are unable to be listed on another securities exchange by then, 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.
The PRC government may intervene or influence the Hong Kong operations of an offshore holding company, such as ours, at any time. The PRC government may exert more control over offerings conducted overseas and/or foreign investment in Hong Kong-based issuers. If the PRC government exerts more oversight and control over offerings that are conducted overseas and/or foreign investment in Hong Kong-based issuers and we were to be subject to such oversight and control, it may result in a material adverse change to our business operations in Hong Kong.
As a company headquartered in Hong Kong, a special administrative region of China, that historically operated in Mainland China, our business and our prospects, financial condition, and results of operations may be influenced to a significant degree by political, economic, and social conditions in China generally. The PRC government may intervene in or influence the operations in Mainland China of an offshore holding company at any time, which, if extended to our operations in Hong Kong, could result in a material adverse change to our operations. The PRC government has recently indicated an intent to exert more oversight and control over listings conducted overseas and/or foreign investment in issuers based in Mainland China. For instance, on July 6, 2021, the relevant PRC governmental authorities promulgated the Opinions on Strictly Cracking Down on Illegal Securities Activities in Accordance with the Law, which emphasized the need to strengthen the supervision over overseas listings by companies in Mainland China. As a follow-up, on February 17, 2023, the CSRC promulgated the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies and supporting relevant guidelines, or collectively, the Overseas Listing Trial Measures, which took effect on March 31, 2023. The Overseas Listing Trial Measures clarify the scope of overseas offerings and listings by Chinese domestic companies which are subject to the filing and reporting requirements thereunder. Pursuant to the Overseas Listing Trial Measures, an overseas offering and listing by a Chinese company, including any follow-on offering, secondary listings or other equivalent offering activities, whether directly or indirectly, shall be filed with the CSRC. Specifically, a Chinese company whose securities had already been listed overseas prior to the effectiveness of the Overseas Listing Trial Measures is required to file with the CSRC with respect to any follow-on offering in the same overseas market where its securities are listed within three business days after completion of such follow-on offering. The Overseas Listing Trial Measures have also imposed additional reporting obligations on listed companies upon the occurrence of certain circumstances, including but not limited to change of controlling interest and delisting. There are substantial uncertainties as to the interpretation and implementation of these laws and regulations. If we fail to properly or timely complete the reporting procedures with the CSRC upon the occurrence of the circumstances stipulated in the Overseas Listing Trial Measures, or the filing procedures with the CSRC for our future securities offerings and listings outside of the PRC, we may be subject to penalties, sanctions and fines imposed by the CSRC and relevant departments of the State Council of the People’s Republic of China. As we do not have any operations in mainland China, we do not believe that we are a domestic company subject to the filing requirements of the Overseas Listing Trial Measures in connection with our listing or any future offering of our securities outside of the PRC. However, given the uncertainties in the interpretation and implementation of the Overseas Listing Trial Measures, we cannot assure you that the CSRC will not take a different view or that we will not become subject to filing or reporting requirements with the CSRC in the future.
Changes in U.S. and international trade policies, particularly with regard to China, may adversely impact our business and operating results.
The U.S. government has recently made statements and taken certain actions that may lead to potential changes to U.S. and international trade policies, including recently-imposed tariffs affecting certain products manufactured in China. There are significant uncertainties whether and to what extent new tariffs (or other new laws or regulations) will be adopted, or the effect that any such actions would have on us or our industry. For example, procurement costs relating to our e-commerce business and our digital assets mining equipment may be significantly affected by tariffs. If we plan to expand our business internationally in the future or if imported products begin to play or continue to play a significant role in our operations, any unfavorable government policies on international trade, such as capital controls or tariffs, may affect our ability to import certain products or provide services in certain countries. If any new tariffs, legislation and/or regulations are implemented, or if existing trade agreements are renegotiated or, in particular, if the U.S. government takes retaliatory trade actions due to the recent U.S.-China trade tension, such changes could have an adverse effect on our business, financial condition and results of operations. In 2025 and 2026, the U.S. government imposed, modified and in some cases withdrew a series of tariffs on imports from China and other jurisdictions under various statutory authorities, and in February 2026 the U.S. Supreme Court held that the International Emergency Economic Powers Act does not authorize the imposition of tariffs, while tariffs imposed under other authorities, including Sections 232 and 301 of U.S. trade laws, remain in effect. The tariff landscape therefore remains fluid. Because substantially all of the mining hardware we deploy and many of the consumer products we resell are manufactured in China or elsewhere in Asia, tariffs and other trade restrictions may increase our costs even where we purchase such goods from U.S.-based vendors rather than importing them directly.
Risks Related to Our Ordinary Shares
The market price of our ordinary shares has been and may continue to be volatile, which could result in substantial losses to investors.
The trading price of our ordinary shares has been and is likely to continue to be volatile and could fluctuate widely due to factors beyond our control. This may happen because of broad market and industry factors, such as fluctuations in the market prices of Bitcoin and other digital assets, the performance of other companies engaged in digital asset mining or e-commerce, or the underperformance or deteriorating financial results of other companies based in Hong Kong or elsewhere in Asia with securities listed in the United States. The securities of some of these companies have experienced significant volatility, including, in some cases, substantial price declines in the trading prices of their securities. The trading performance of these companies’ securities may affect the attitudes of investors toward companies in our industries or based in Hong Kong that are listed in the United States, which consequently may impact the trading performance of our ordinary shares, regardless of our actual operating performance.
In addition, any negative news or perceptions about inadequate corporate governance practices or fraudulent accounting, corporate structure or other matters of other Hong Kong or Asia-based companies listed in the United States may also negatively affect the attitudes of investors towards such companies in general, including us, regardless of whether we have conducted any inappropriate activities.
In addition to market and industry factors, the price and trading volume for our ordinary shares may be highly volatile for factors specific to our own operations, including the following:
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variation in our revenues, earnings, cash flow and operating metrics, including our hashrate, mining output and e-commerce sales volumes; |
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fluctuations in the market prices of Bitcoin and the other digital assets that we mine or hold; |
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announcements of new investments, acquisitions, strategic partnerships or joint ventures by us or our competitors; |
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announcements of new products, services, mining capacity or expansions by us or our competitors; |
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regulatory developments in the United States, Hong Kong or elsewhere affecting us, our industries or our competitors; |
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changes in the economic performance or market valuation of other digital asset mining or e-commerce companies; |
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changes in financial estimates by securities analysts; |
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detrimental adverse publicity about us or our industry, or other entities historically affiliated with us; |
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additions or departures of key personnel; |
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release or expiry of lock-up or other transfer restrictions on our outstanding ordinary shares; |
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potential litigation, regulatory investigations or regulatory developments that are perceived to be adverse to our business; |
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actual or anticipated fluctuations in our interim results of operations and changes or revisions of our expected results; |
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fluctuations of exchange rates between the Hong Kong dollar and the U.S. dollar; and |
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sales or perceived potential sales of additional 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 have a material adverse effect on the market price of our ordinary shares.
Our ordinary shares have been, and may continue to be, thinly traded, and our limited public float may result in lower liquidity and greater price volatility.
Historically, our securities have been sporadically or thinly traded on some trading days, and only a limited number of our ordinary shares are held by non-affiliates. As of the date of this annual report, our two largest shareholders beneficially owned approximately 90.6% of our outstanding ordinary shares. As a result of this lack of liquidity and limited public float, we may be susceptible to market participants distorting the price of our ordinary shares, and trading of relatively small quantities of our ordinary shares may disproportionately influence their price in either direction. Trading in our ordinary shares has also from time to time been subject to temporary trading halts under Nasdaq’s volatility-based trading pause rules. You may be unable to sell your ordinary shares at or near the ask price, or at all, when you wish to do so.
If we fail to meet the continued listing requirements of Nasdaq, our ordinary shares could be delisted, which would adversely affect the liquidity and market price of our ordinary shares.
Our ordinary shares are listed on the Nasdaq Capital Market. To maintain our listing, we must satisfy Nasdaq’s continued listing standards, including minimum requirements relating to the bid price of our ordinary shares, shareholders’ equity or the market value of our listed securities, the number and market value of our publicly held shares, the number of public holders and market makers, and corporate governance. We have in the past received notices from Nasdaq that the bid price of our then-listed ADSs had closed below the US$1.00 minimum bid price requirement for 30 consecutive business days, most recently in August 2025, and regained compliance in each case, most recently in September 2025. On January 5, 2026, we effected the Share Consolidation. Under Nasdaq rules, if a company has effected a reverse share split (including a share consolidation) within the prior one year and its securities subsequently fail to meet the minimum bid price requirement, the company is not eligible for any compliance period and will receive a delisting determination, subject to its right to appeal.
If we fail to satisfy any continued listing requirement and are unable to cure the deficiency within any applicable compliance period, Nasdaq may delist our ordinary shares. A delisting would likely reduce the liquidity and market price of our ordinary shares, impair our ability to raise capital and result in negative publicity, and could cause our ordinary shares to be quoted only on an over-the-counter market with limited liquidity and to become subject to the “penny stock” rules, which impose additional sales practice requirements on broker-dealers. We cannot assure you that we will be able to maintain compliance with Nasdaq’s continued listing requirements.
If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, the market price for our ordinary shares and trading volume could decline.
The trading market for our ordinary shares will depend in part on the research and reports that securities or industry analysts publish about us or our business. There is currently limited or no research coverage of our company by securities or industry analysts. If research analysts do not establish and maintain adequate research coverage or if one or more of the analysts who cover us downgrade our ordinary shares or publish inaccurate or unfavorable research about our business, the market price for our ordinary shares would likely decline. If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, we could lose visibility in the financial markets, which, in turn, could cause the market price or trading volume for our ordinary shares to decline.
The sale or availability for sale of substantial amounts of our ordinary shares could adversely affect their market price.
Sales of substantial amounts of our ordinary shares in the public market, or the perception that these sales could occur, could adversely affect the market price of our ordinary shares and could materially impair our ability to raise capital through equity offerings in the future. As of the date of this annual report, The Raku Foundation, through Carmel Holdings Limited, and Grand Lead Group Limited held approximately 67.1% and 23.5%, respectively, of our outstanding ordinary shares. These ordinary shares may be sold in the public market in the future, subject to the restrictions of Rule 144 under the Securities Act and any applicable contractual restrictions, and ordinary shares issued under our share incentive plan may be sold following vesting, subject to applicable restrictions. We cannot predict what effect, if any, market sales of securities held by our significant shareholders or any other shareholder or the availability of these securities for future sale will have on the market price of our ordinary shares.
We may issue additional ordinary shares or other equity or equity-linked securities in the future, which could dilute your ownership interest and adversely affect the market price of our ordinary shares.
We may need to raise additional capital to fund the growth of our e-commerce and digital assets businesses, including the acquisition of additional mining hardware, or to develop or acquire new businesses. We may raise such capital through the issuance of ordinary shares, preferred shares, convertible or exchangeable securities, warrants or other equity-linked securities, and we may also issue ordinary shares under our share incentive plan or as consideration in acquisitions. Any such issuance would dilute the ownership interests of our existing shareholders and could adversely affect the market price of our ordinary shares, and any preferred shares or other securities we issue may have rights, preferences or privileges senior to those of our ordinary shares. Our board of directors has general authority under our memorandum and articles of association to issue additional shares without shareholder approval, subject to applicable Nasdaq rules.
We do not expect to pay dividends in the foreseeable future, and you must rely on price appreciation of our ordinary shares for a return on your investment.
We do not have any plan to pay dividends on our ordinary shares in the foreseeable future and currently intend to retain most, if not all, of our available funds and any future earnings to operate and expand our business. Any future determination to pay dividends will be made at the discretion of our board of directors and will depend on our future operations and earnings, capital requirements and surplus, general financial condition, contractual restrictions and other factors that the board of directors may deem relevant. In addition, we are a holding company and rely on dividends and other distributions from our subsidiaries in Hong Kong and the United States to fund any dividends we may pay, and dividends paid by our U.S. subsidiaries to us may be subject to U.S. withholding tax. Accordingly, the return on your investment in our ordinary shares will likely depend entirely upon any future price appreciation of our ordinary shares. There is no guarantee that our ordinary shares will appreciate in value or even maintain the price at which you purchased them, and you may not realize a return on your investment and may even lose your entire investment.
Techniques employed by short sellers may drive down the market price of our ordinary shares.
Short selling is the practice of selling securities that the seller does not own but rather has borrowed from a third party with the intention of buying identical securities back at a later date to return to the lender. The short seller hopes to profit from a decline in the value of the securities between the sale of the borrowed securities and the purchase of the replacement shares, as the short seller expects to pay less in that purchase than it received in the sale. As it is in the short seller’s interest for the price of the security to decline, many short sellers publish, or arrange for the publication of, negative opinions regarding the relevant issuer and its business prospects in order to create negative market momentum and generate profits for themselves after selling a security short. These short attacks have, in the past, led to selling of shares in the market.
Public companies listed in the United States, including companies with operations in Asia and companies in the digital asset industry, have been the subject of short selling. Much of the scrutiny and negative publicity has centered on allegations of a lack of effective internal control over financial reporting resulting in financial and accounting irregularities and mistakes, inadequate corporate governance policies or a lack of adherence thereto and, in many cases, allegations of fraud. As a result, many of these companies are now conducting internal and external investigations into the allegations and, in the interim, are subject to shareholder lawsuits and/or SEC enforcement actions.
It is not clear what effect such negative publicity could have on us. If we were to become the subject of any unfavorable allegations, whether such allegations are proven to be true or untrue, we could have to expend a significant amount of resources to investigate such allegations and/or defend ourselves. While we would strongly defend against any such short seller attacks, we may be constrained in the manner in which we can proceed against the relevant short seller by principles of freedom of speech, applicable state law or issues of commercial confidentiality. Such a situation could be costly and time-consuming, and could distract our management from growing our business. Even if such allegations are ultimately proven to be groundless, allegations against us could severely impact our business operations, and any investment in our ordinary shares could be greatly reduced or even rendered worthless.
We are a “controlled company” within the meaning of the Nasdaq listing rules and may rely on exemptions from certain corporate governance requirements that provide protection to shareholders of other companies.
Because The Raku Foundation beneficially owns more than 50% of the voting power for the election of our directors, we are a “controlled company” within the meaning of the Nasdaq listing rules. For so long as we remain a controlled company, we are permitted to elect to rely on exemptions from certain corporate governance requirements of Nasdaq, including the requirements that a majority of our board of directors consist of independent directors and that we have a compensation committee and a nominating and corporate governance committee composed entirely of independent directors. Although we currently rely on the home country practice exemptions available to foreign private issuers rather than the controlled company exemptions, we may elect to rely on the controlled company exemptions in the future. If we do so, you will not have the same protections afforded to shareholders of companies that are subject to all of the Nasdaq corporate governance requirements. See “—Our controlling shareholder and our Chairman and Chief Executive Officer are able to exert significant influence over our Company, whose interests may differ from, or conflict with, those of our other shareholders” under “—Risks Related to Our Business.”
Our memorandum and articles of association contain anti-takeover provisions that could have a material adverse effect on the rights of holders of our ordinary shares.
Our third amended and restated memorandum and articles of association contain provisions which could limit the ability of others to acquire control of our company or cause us to engage in change-of-control transactions. These provisions could have the effect of depriving our shareholders of an opportunity to sell their shares at a premium over prevailing market prices by discouraging third parties from seeking to obtain control of our company in a tender offer or similar transaction. For example, our board of directors has the authority, without the approval of the shareholders, to issue preferred shares in one or more series and to fix their designations, powers, preferences, privileges, and relative participating, optional or special rights and the qualifications, limitations or restrictions, including dividend rights, conversion rights, voting rights, terms of redemption and liquidation preferences, any or all of which may be greater than the rights associated with our ordinary shares. Preferred shares could be issued quickly with terms calculated to delay or prevent a change in control of our company or make removal of management more difficult. If our board of directors decides to issue preferred shares, the price of our ordinary shares may fall and the voting and other rights of the holders of our ordinary shares may be materially and adversely affected.
Certain judgments obtained against us by our shareholders may not be enforceable.
We are an exempted company limited by shares incorporated under the laws of the Cayman Islands. We conduct most of our operations in and hold a significant portion of our assets outside of the United States. In addition, a majority of our directors and executive officers reside outside of the United States. As a result, it may be difficult or impossible for you to effect service of process within the United States upon these individuals, or to bring an action against us or against these individuals in the United States in the event that you believe your rights have been infringed under the U.S. federal securities laws or otherwise. Even if you are successful in bringing an action of this kind, the laws of the Cayman Islands, Hong Kong or other jurisdictions in which we do business may render you unable to enforce a judgment against our assets or the assets of our directors and officers.
In addition, you may have difficulties in enforcing court judgments obtained in United States courts against our Hong Kong subsidiaries, including judgments relating to the federal securities laws of the United States or the securities laws of any state or territory of the United States. There are currently no treaties or other arrangements providing for reciprocal enforcement of foreign judgments between Hong Kong and the United States. There is uncertainty as to whether courts in Hong Kong will enforce judgments of United States courts based solely upon the civil liability provisions of the federal securities laws of the United States or the securities laws of any state or territory of the United States.
You may face difficulties in protecting your interests, and your ability to protect your rights through U.S. courts may be limited, because we are incorporated under Cayman Islands law.
We are an exempted company limited by shares incorporated under the laws of the Cayman Islands. Our corporate affairs are governed by our memorandum and articles of association, the Companies Act (as revised) of the Cayman Islands (“Companies Act”) and the common law of the Cayman Islands. The rights of shareholders to take action against the directors, actions by minority shareholders and the fiduciary duties of our directors to us under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands. The common law of the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands as well as from the common law of England, the decisions of whose courts are of persuasive authority, but are not binding, on a court in the Cayman Islands. The rights of our shareholders and the fiduciary duties of our directors under Cayman Islands law may not be as clearly established as they would be under statutes or judicial precedent in some jurisdictions in the United States. In particular, the Cayman Islands may have a less developed body of securities laws than the United States. Some U.S. states, such as Delaware, have more fully developed and judicially interpreted bodies of corporate law than the Cayman Islands. In addition, Cayman Islands companies may not have standing to initiate a shareholder derivative action in a federal court of the United States.
Shareholders of Cayman Islands exempted companies like us have no general rights under Cayman Islands law to inspect corporate records (other than the register of mortgages) or to obtain copies of lists of shareholders of these companies. Our directors will have discretion under our third amended and restated memorandum and articles of association, to determine whether or not, and under what conditions, our corporate records may be inspected by our shareholders, but are not obliged to make them available to our shareholders. This may make it more difficult for you to obtain the information needed to establish any facts necessary for a shareholder resolution or to solicit proxies from other shareholders in connection with a proxy contest.
As a result of all of the above, our public shareholders may have more difficulty in protecting their interests in the face of actions taken by management, members of the board of directors or controlling shareholders than they would as public shareholders of a company incorporated in the United States. For a discussion of significant differences between the provisions of the Companies Act and the laws applicable to companies incorporated in the United States and their shareholders, see “Item 10. Additional Information—B. Memorandum and Articles of Association—Differences in Corporate Law.”
We have ceased to qualify as an “emerging growth company,” and we will continue to incur significant costs as a result of being a public company.
As a public company, we incur legal, accounting and other expenses which can be significant. The Sarbanes-Oxley Act of 2002, as well as rules subsequently implemented by the SEC and Nasdaq, impose various requirements on the corporate governance practices of public companies. Our executive officers have limited experience in operating a U.S. public company, which makes our ability to comply with applicable laws, rules and regulations uncertain. We qualified as an “emerging growth company” under the JOBS Act until June 30, 2026, the last day of the fiscal year in which the fifth anniversary of our initial public offering occurred, and we took advantage of certain reduced reporting requirements and other accommodations available to emerging growth companies, including the extended transition period for complying with new or revised financial accounting standards. As we have ceased to be an emerging growth company, these accommodations are no longer available to us, and we are required to comply with new or revised financial accounting standards on the timeline applicable to other public companies. Although, as a non-accelerated filer, we are currently not required to obtain an attestation report from our independent registered public accounting firm on the effectiveness of our internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act, we would become subject to that requirement if we were to become an accelerated filer or a large accelerated filer, which would further increase our compliance costs. We expect to continue to incur significant expenses and devote substantial management effort toward ensuring compliance with the requirements of Section 404 of the Sarbanes-Oxley Act and the other rules and regulations of the SEC and Nasdaq.
As a public company, it is also difficult and expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage.
We are a foreign private issuer within the meaning of the rules under the Exchange Act and are therefore exempt from certain provisions applicable to U.S. domestic issuers.
Because we qualify as a foreign private issuer under the Exchange Act, we are exempt from certain provisions of the securities rules and regulations in the United States that are applicable to U.S. domestic issuers, including:
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the rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form 10-Q or current reports on Form 8-K; |
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the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of a security registered under the Exchange Act; |
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the short-swing profit recovery provisions of Section 16(b) of the Exchange Act applicable to insiders of U.S. domestic issuers; and |
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the selective disclosure rules by issuers of material nonpublic information under Regulation FD. |
We are required to file an annual report on Form 20-F within four months of the end of each fiscal year. In addition, we intend to publish our results on an interim basis as press releases, distributed pursuant to the rules and regulations of the Nasdaq Capital Market. Press releases relating to financial results and material events will also be furnished to the SEC on Form 6-K. However, the information we are required to file with or furnish to the SEC is less extensive and less timely compared to that required to be filed with the SEC by U.S. domestic issuers. As a result, you may not be afforded the same protections or information that would be made available to you were you investing in a U.S. domestic issuer.
We may lose our foreign private issuer status in the future, including as a result of possible changes to the SEC’s eligibility criteria, which could result in significant additional costs and expenses.
We are a foreign private issuer, and therefore we are not required to comply with all of the periodic disclosure and current reporting requirements of the Exchange Act applicable to U.S. domestic issuers. We would lose our foreign private issuer status if, as of the last business day of our second fiscal quarter, more than 50% of our outstanding voting securities were directly or indirectly held of record by residents of the United States and any of the following applied: a majority of our executive officers or directors were U.S. citizens or residents, more than 50% of our assets were located in the United States, or our business were administered principally in the United States. In addition, in June 2025 the SEC published a concept release seeking public comment on possible changes to the definition of foreign private issuer, including whether eligibility should be conditioned on a minimum percentage of trading volume occurring on a non-U.S. market or on a listing on a major foreign securities exchange. Because our ordinary shares are listed only on Nasdaq, we could lose our foreign private issuer status if the SEC were to adopt rules along these lines.
If we lose our foreign private issuer status, we would be required to file periodic and current reports and registration statements on U.S. domestic issuer forms, which are more detailed and extensive than the forms available to foreign private issuers, to comply with the proxy rules and the short-swing profit recovery provisions of Section 16 of the Exchange Act, and to comply with all of the Nasdaq corporate governance requirements applicable to U.S. domestic issuers, without the ability to follow home country practice. The regulatory and compliance costs to us under U.S. securities laws as a U.S. domestic issuer could be significantly higher than the costs we incur as a foreign private issuer, and would require significant additional management time and attention.
As a company incorporated in the Cayman Islands, we are permitted to adopt certain home country practices in relation to corporate governance matters in lieu of the corporate governance listing standards applicable to U.S. domestic issuers, which home country practices may afford comparatively less protection to shareholders.
As a company incorporated in the Cayman Islands, we are permitted to adopt certain home country practices in relation to corporate governance matters that differ significantly from corporate governance requirements of the Nasdaq Capital Market board; these practices may afford less protection to shareholders than they would enjoy if we complied fully with the corporate governance requirements of the Nasdaq Capital Market board. For example, as a foreign private issuer, we are not required to: (i) have a majority of the board be independent; (ii) have a compensation committee or a nominating/corporate governance committee consisting entirely of independent directors; or (iii) have regularly scheduled executive sessions with only independent directors each year.
We intend to follow home country practice in lieu of the requirements under the Nasdaq Capital Market rules with respect to certain corporate governance standards. Accordingly, you may not be provided with the benefits of certain corporate governance requirements of the Nasdaq Capital Market board rules.
We may be a passive foreign investment company, or PFIC, for our current or future taxable years, which could result in adverse U.S. federal income tax consequences to U.S. investors in our ordinary shares.
In general, a non-U.S. corporation will be a PFIC for U.S. federal income tax purposes, if, in any particular taxable year, either (i) 75% or more of its gross income for such year consists of certain types of “passive” income or (ii) 50% or more of the value of its assets (generally determined on the basis of a quarterly average) during such year produce or are held for the production of passive income. For purposes of the above calculations, a non-U.S. corporation will be treated as owning a proportionate share of the assets and earning a proportionate share of the income of any other corporation if it owns, directly or indirectly, at least 25% (by value) of such other corporation’s stock. Passive income generally includes dividends, interest, rents, royalties and certain gains. Cash is generally a passive asset for these purposes. Goodwill is an active asset under the PFIC rules to the extent attributable to activities that produce active income. Based on the current composition of our income and assets and the value of our assets, including goodwill, which is based on the expected market price of our ordinary shares, we may be a PFIC for our current taxable year. Subsequent to our termination of historical businesses in wealth management and asset management and disposal of certain previous subsidiaries and financial licenses, we hold and may continue to hold a high proportion of cash or investment assets relative to our total assets, even though we expect this to be temporary as we deploy such cash over time to invest in, develop, or acquire opportunities in the technology sector. Furthermore, any future financing activities may also temporarily increase our proportion of cash relative to our total assets, which may heighten the risk that we are considered a PFIC. Furthermore, because our PFIC status for any taxable year will depend on the composition of our income and assets and the value of our assets from time to time (which may be determined, in part, by reference to the market price of our ordinary shares, which could be volatile), and because certain aspects of the PFIC rules are not entirely certain, there can be no assurance that we will or will not be a PFIC for our current or any future taxable year.
If we were a PFIC for any taxable year during which a U.S. investor owns our ordinary shares, we generally would continue to be treated as a PFIC with respect to that U.S. investor for all succeeding years during which the U.S. investor holds our ordinary shares, even if we ceased to meet the threshold requirements for PFIC status, and certain adverse U.S. federal income tax consequences could apply to such U.S. investor including (i) the treatment of all or a portion of any gain on disposition as ordinary income, (ii) the application of a deferred interest charge on such gain and the receipt of certain dividends and (iii) compliance with certain reporting requirements. We do not intend to provide the information that would enable investors to make a qualified electing fund election that could mitigate the adverse U.S. federal income tax consequences should we be classified as a PFIC. You are urged to consult your tax advisor concerning the U.S. federal income tax consequences of owning and disposing of our ordinary shares. See “Item 10. Additional Information—E. Taxation—Certain U.S. Federal Income Tax Considerations—Passive Foreign Investment Company Considerations.”
Item 4. Information on the Company
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History and Development of the Company |
We were incorporated in the Cayman Islands on July 19, 2019 as an exempted company with limited liability. Our principal executive offices are located at Level 15, AIA Central, No.1 Connaught Road Central, Central, Hong Kong. Our telephone number at this address is +852 2593 9309. Our registered office in the Cayman Islands is located at the offices of Portcullis (Cayman) Ltd, The Grand Pavilion Commercial Centre, Oleander Way, 802 West Bay Road, P.O. Box 32052, Grand Cayman KY1-1208, Cayman Islands. Our agent for service of process in the United States is Cogency Global Inc., located at 122 East 42nd Street, 18th Floor, New York, NY 10168.
The SEC maintains an internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC on www.sec.gov. You can also find information on our website https://ir.bitventures.io/. The information contained on our website is not a part of this annual report.
On March 26, 2021, the Company completed its initial public offering on the Nasdaq Global Market of 3,000,000 ADSs, each representing two ordinary shares.
On June 28, 2024, the Company terminated its contractual VIE arrangements with Hywin Wealth Management, which, along with its subsidiaries, was previously the primary corporate vehicle to provide wealth management services in mainland China. The Company has completely exited from the wealth management business in mainland China.
On July 17, 2024, the Company’s name was changed from Hywin Holdings Ltd. to Santech Holdings Limited, and the trading symbol of the Company’s ADSs on Nasdaq was changed from “HYW” to “STEC.”
On August 14, 2024, the Company completely exited its businesses in overseas wealth management and asset management in Hong Kong, and disposed of certain subsidiaries in Hong Kong, namely, Haiyin Insurance (Hong Kong) Co., Limited, Hywin International Insurance Broker Limited, Haiyin International Asset Management Limited, and Hywin Asset Management (Hong Kong) Limited. After the disposals, the Company no longer holds financial service licenses in Hong Kong.
On December 5, 2024, the Company’s listing was transferred to the Nasdaq Capital Market.
On March 11, 2025, the Board of Directors resolved to remove two then-directors from the Board pursuant to the Company's Memorandum and Articles of Association and appointed two new independent directors in restructuring the Board.
On March 17, 2025, the Company issued to Carmel Holdings Limited 112,000,000 restricted ordinary shares of the Company.
On November 5, 2025, the Company announced an official launch of its e-commerce business segment.
On December 2, 2025, the Company announced that it would terminate its Deposit Agreement dated March 25, 2021 entered into between the Company and Deutsche Bank Trust Company Americas as depositary for the Company’s American Depositary Shares (the “ADSs”).
On December 19, 2025, the Company held an Extraordinary General Meeting, in which shareholders approved a number of resolutions pertaining to the restructuring of the Company’s share capital and the adoption of the Company’s third amended and restated memorandum and articles of association, which included the Share Consolidation, being a share consolidation of every twenty issued and unissued ordinary shares of par value US$0.0001 each into one new consolidated ordinary share of par value US$0.0020 each, and a subsequent increase of authorized share capital to US$200,000 divided into 100,000,000 ordinary shares of par value US$0.0020 each.
On December 19, 2025, the Company’s shareholders approved the change of the Company’s name from Santech Holdings Limited to BitVentures Limited, which became effective on December 19, 2025. Effective December 24, 2025, the trading symbol of the Company’s ADSs on Nasdaq was changed from “STEC” to “BVC.”
On January 2, 2026, the Company announced that the Board had approved the official launch of the Company’s digital assets business segment. The Company began its cryptocurrency mining operations.
On January 5, 2026, the Company’s substitution listing was approved by Nasdaq. The Share Consolidation became effective, all outstanding ADSs were cancelled and exchanged for consolidated ordinary shares at the ratio of one consolidated ordinary share for every ten ADSs, and the Company’s consolidated ordinary shares of par value US$0.0020 each were listed for trading on the Nasdaq Capital Market under the ticker “BVC” in substitution for the ADSs.
Our principal capital expenditures during the three fiscal years ended June 30, 2026 consisted of purchases of digital asset mining hardware of approximately US$0.5 million in the fiscal year ended June 30, 2026. We expect to continue to acquire mining hardware in the fiscal year ending June 30, 2027, subject to market conditions and capital availability, and, as of the date of this annual report, we have no material commitments for capital expenditures.
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Business Overview |
BitVentures Limited is a Cayman Islands holding company, with operating subsidiaries primarily in Hong Kong and the United States. We are a technology company focusing on developing early-stage technology businesses, and actively build, operate and scale our businesses in order to achieve growth. Our two principal growth segments are e-commerce and digital assets, and we seek to develop additional businesses in other areas of consumer and enterprise technology. The Company believes that early-stage technology ventures may offer exceptional growth opportunities, and seeks to identify and nurture such high-potential ventures.
During the fiscal year ended June 30, 2026, our primary businesses reported in our financial statements were e-commerce, digital assets and client referral services. In the first half of fiscal year 2026, the Company began official rollout of its e-commerce segment. The Company operated its e-commerce segment under a resale model, offering high-demand products such as consumer electronics, toys, and other consumer products via its storefront on Amazon. The Company transacted approximately US$0.14 million of gross merchandise volume (GMV) and over 1,800 customer orders in its e-commerce segment during fiscal year 2026. The Company intends to leverage its current e-commerce incubation as a launchpad for scaling additional product lines and revenue growth in its e-commerce segment. Starting in the second half of fiscal year 2026, the Company began official rollout of its digital assets segment. As of the date of this annual report, the Company has procured approximately 39 PH/s of Bitcoin (SHA-256) mining hardware and 0.3 TH/s of Scrypt-based (Litecoin and Dogecoin) mining hardware, and has currently installed an aggregate of approximately 39 PH/s of Bitcoin mining hashrate and 0.3 TH/s of Scrypt-based mining hashrate, at multiple third-party datacenter facilities in the United States with which the Company has contracted. The Company plans to continue to deploy additional mining equipment to grow its digital asset presence subject to market conditions and capital availability.
During the fiscal years ended June 30, 2024 and 2025, the Company underwent a series of restructurings to completely exit all of our legacy wealth management and asset management businesses in Hong Kong and in mainland China. On August 14, 2024, we exited our businesses in overseas wealth management and asset management and disposed of certain subsidiaries in Hong Kong, namely, Haiyin Insurance (Hong Kong) Co., Limited, Hywin International Insurance Broker Limited, Haiyin International Asset Management Limited, and Hywin Asset Management (Hong Kong) Limited. After the disposals, the Company no longer holds financial service licenses in Hong Kong. As a result of this strategic exit, for the years ended June 30, 2025 and 2024, we have reclassified our historical financial results relating to overseas wealth management and asset management services under discontinued operations. On June 28, 2024, we exited the wealth management businesses in China by terminating the variable interest entity (“VIE”) arrangements with Hywin Wealth Management, which, along with its subsidiaries, provided wealth management services in mainland China. The Company’s combined financial statements for the year ended June 30, 2024 were prepared excluding its historical PRC subsidiaries and VIEs. See “Item 4. Information on the Company—A. History and Development of the Company” for details of our corporate history.
Since fiscal year 2025, we no longer have any operations, offices or any employees in mainland China. The Company has also completely migrated its business data, information systems and business infrastructure outside of mainland China. We believe we have ceased to be a “China concept stock.”
Our Services
Continuing Operations
Our revenues from continuing operations for the three years ended June 30, 2026 consisted mainly of client referral fees that we obtained for providing client referral services to external financial product partners, e-commerce sales, and digital assets mining activities. Our client referral services are conducted in Hong Kong, and our e-commerce and digital assets businesses are conducted in the United States through our U.S. subsidiaries.
Client Referral Services
For the three years ended June 30, 2026, under client referral services, we introduced clients to external financial product partners. Most of these products were insurance products sourced through external insurance brokers. These insurance products our partners offered included (i) life insurance products such as individual whole life insurance, individual term life insurance, universal life insurance and individual health insurance, (ii) annuity insurance products, and (iii) critical illness insurance products (including personal accident insurance products). These insurance products were underwritten by reputable international insurance companies. Although client referral services remained our largest source of revenue during fiscal year 2026, it is not a core part of our long-term growth strategy, and we may scale back or discontinue it in the future depending on business conditions and our evolving strategic priorities.
E-Commerce
We began official rollout of our e-commerce segment in the first half of fiscal year 2026. We operate our e-commerce segment under a resale model, offering high-demand consumer products, including consumer electronics, toys, and other consumer products, primarily through our storefront on Amazon's marketplace. We source substantially all of our e-commerce inventory from wholesalers, distributors, liquidators, and other secondary-market sources rather than from manufacturers directly. From inception to the end of fiscal year 2026, we transacted approximately US$0.14 million of gross merchandise volume ("GMV") and over 1,800 customer orders in our e-commerce segment. We intend to leverage our current e-commerce operations as a foundation for scaling additional product lines and revenue growth.
Digital Assets
We began official rollout of our digital assets segment in the second half of fiscal year 2026, commencing cryptocurrency mining operations in January 2026. Our digital assets segment consists of mining Bitcoin and, to a lesser extent, other digital assets such as Litecoin and Dogecoin, using application-specific integrated circuit ("ASIC") mining hardware. As of the date of this annual report, we have procured approximately 39 PH/s of Bitcoin (SHA-256) mining hardware and 0.3 TH/s of Scrypt-based (Litecoin and Dogecoin) mining hardware, and have installed and are operating approximately 39 PH/s of Bitcoin mining hashrate and 0.3 TH/s of Scrypt-based mining hashrate at multiple third-party datacenter facilities located in the United States. We plan to continue deploying additional mining hardware to grow our digital assets presence, subject to market conditions and capital availability.
Discontinued Operations
Our revenues from discontinued operations for the three years ended June 30, 2026 consisted mainly of wealth management revenues and asset management revenues. On August 14, 2024, we exited our businesses in overseas wealth management and asset management, and completed the closing of our disposal of certain subsidiaries in Hong Kong, namely, Haiyin Insurance (Hong Kong) Co., Limited, Hywin International Insurance Broker Limited, Haiyin International Asset Management Limited, and Hywin Asset Management (Hong Kong) Limited. Prior to our exit, we provided overseas wealth management and asset management services to high-net-worth clients primarily in Hong Kong. Our previously held Type 1, 4, 5 and 9 licenses and insurance brokerage license in Hong Kong enabled us to offer customized and integrated wealth management and asset management value propositions to our high-net-worth clients.
Wealth Management Services
Under wealth management services, we distributed financial products to our clients. Most of these products were insurance products, sourced directly by our previous licensed insurance broker subsidiary in Hong Kong.
Asset Management Services
We provided asset management services in the offshore space under our previously held Type 1, 4, 5 and 9 licenses in Hong Kong, which provided discretionary portfolio management services to ultra-high-net-worth clients, and managed a range of private funds to professional investors with selected strategies including, among others, Asian fixed income, equities long/short and global private equity. Revenue from asset management services included management fees, which include fees that are generated as per agreed formulae and materialize with recurring frequency, and to a lesser extent, other incomes such as retrocession from custodian banks, commissions from trades, and performance-based fees.
Intellectual Property
We regard trademarks, copyrights, domain names, know-how, proprietary technologies, and similar intellectual property as critical to our success, and from time to time we rely on copyright and trademark law and confidentiality, invention assignment and non-compete agreements with our employees and others to protect our proprietary rights. As of the date of this annual report, we have registered the domain name bitventures.io.
Insurance
As required by Hong Kong laws and regulations, we participate in an Employees' Compensation Insurance (ECI) to cover work-related injuries, illnesses, and fatalities for all employees in Hong Kong, as well as a pension scheme under the rules and regulations of the Mandatory Provident Fund Schemes Ordinance (MPF Scheme) for all employees in Hong Kong. We also offer medical insurance coverage to our employees. Our directors and officers liability insurance policy for our board of directors and executives has currently run out, but we are in search of restoring coverage on commercially reasonable terms. We do not maintain business interruption insurance or key-man life insurance. We carry limited product liability insurance for our e-commerce business. Other than the lack of directors and officers liability insurance currently, we consider our insurance coverage to be in line with the market practice of industry peers of similar size in Hong Kong.
Regulations
The following is a summary of the principal laws and regulations that we believe are material to our business operations in the United States and Hong Kong as of the date of this annual report. This summary is not intended to be exhaustive, and the laws and regulations applicable to digital assets in particular are evolving rapidly.
Regulations in the United States
Our digital asset mining and e-commerce businesses are conducted through our subsidiaries in the United States and are subject to U.S. federal, state and local laws and regulations, including those described below.
Regulation of digital assets
There is currently no comprehensive federal regulatory framework in the United States governing digital assets, and regulatory authority is divided among a number of federal agencies. The U.S. Commodity Futures Trading Commission (the “CFTC”) has taken the position that Bitcoin and certain other digital assets are “commodities” under the Commodity Exchange Act, which gives the CFTC anti-fraud and anti-manipulation enforcement authority over spot digital asset markets and regulatory authority over digital asset derivatives. The SEC has asserted that certain other digital assets are “securities” under the federal securities laws, although the SEC and its staff have indicated that Bitcoin is not a security. In March 2025, the staff of the SEC’s Division of Corporation Finance published a statement expressing its view that “protocol mining” of crypto assets on public, permissionless proof-of-work networks such as Bitcoin, whether conducted individually or through a mining pool, does not involve the offer and sale of securities under the federal securities laws. The statement reflects the views of the SEC staff and is not a rule, regulation or statement of the SEC. The SEC also established a Crypto Task Force in January 2025 to develop a clearer regulatory framework for crypto assets.
In July 2025, the Guiding and Establishing National Innovation for U.S. Stablecoins Act (the “GENIUS Act”), which establishes a federal regulatory framework for payment stablecoins, was signed into law, and the U.S. Department of the Treasury and the federal banking regulators have since proposed rules to implement it. Comprehensive market structure legislation that would allocate regulatory jurisdiction over digital assets between the SEC and the CFTC, including the Digital Asset Market Clarity Act (the “CLARITY Act”), was passed by the U.S. House of Representatives in July 2025 but failed to advance in the U.S. Senate in September 2026, and the timing and content of any final legislation remain uncertain. Federal and state legislatures and regulators continue to consider additional measures affecting digital assets, and the manner in which existing laws are applied to digital assets is subject to change.
Anti-money laundering, sanctions and licensing
The Financial Crimes Enforcement Network (“FinCEN”) of the U.S. Department of the Treasury regulates “money services businesses,” including “money transmitters,” under the Bank Secrecy Act. Under FinCEN guidance, a person that mines digital assets solely for its own account and uses or sells the mined digital assets for its own purposes is a “user” of virtual currency rather than a money transmitter, and is therefore not required to register with FinCEN or to maintain an anti-money laundering program as a money services business. Similarly, state money transmission and virtual currency business licensing laws, such as the New York “BitLicense” regime and the California Digital Financial Assets Law that became operative in July 2026, generally do not apply to mining for one’s own account. Our third-party custodian and any exchanges through which we sell digital assets are, however, subject to these regimes, and if we were to expand our activities beyond mining for our own account, for example by providing custody, exchange or transmission services to others, we could become subject to federal and state registration, licensing and compliance requirements. As U.S. persons, our U.S. subsidiaries must also comply with the economic sanctions programs administered by the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”), which prohibit transactions with sanctioned persons and jurisdictions, including digital asset addresses identified by OFAC.
Energy, environmental and state regulation of cryptocurrency mining
Cryptocurrency mining is energy intensive, and the facilities of our hosting providers are subject to federal, state and local laws relating to electricity supply, environmental protection, zoning, noise and permitting. Federal and state energy regulators, including the Federal Energy Regulatory Commission, the U.S. Department of Energy and state public utility commissions, have been examining the impact of large electricity loads, including cryptocurrency mining and data center facilities, on the electric grid, including through interconnection requirements and demand response and curtailment programs. Certain states have adopted or proposed measures specific to cryptocurrency mining, ranging from laws protecting the right to mine digital assets (for example, in Arkansas, Montana and Oklahoma) to large-load interconnection and emergency curtailment requirements (for example, in Texas), moratoria on certain fossil fuel-powered proof-of-work mining operations (for example, in New York) and restrictions on the ownership of mining operations by persons from certain foreign countries (for example, in Arkansas). Because we do not own or operate our own mining facilities, we rely on our hosting providers to obtain and maintain the permits and to comply with the requirements applicable to their facilities.
Taxation of digital assets
The U.S. Internal Revenue Service treats digital assets as property for U.S. federal income tax purposes. Digital assets received as mining rewards are includible in gross income at their fair market value when received, and subsequent dispositions of digital assets may give rise to taxable gain or loss. Our U.S. subsidiaries are subject to U.S. federal, state and local income and other taxes on their operations. Brokers, including digital asset custodians and exchanges, are subject to information reporting requirements with respect to dispositions of digital assets by their customers.
Trade and tariffs
Substantially all digital asset mining hardware is manufactured outside the United States, and imports of such hardware, as well as of many of the consumer products that we resell, are subject to U.S. customs duties and trade measures, including tariffs imposed under Sections 232 and 301 of U.S. trade laws. Although we generally purchase mining hardware and inventory from U.S.-based vendors rather than importing directly, tariffs increase the cost of these goods to us, and changes in trade policy, including any new tariffs, import restrictions or customs enforcement actions relating to mining hardware or consumer products, may affect the availability and cost of the goods on which our businesses depend.
Consumer protection and e-commerce
As a seller of consumer products in the United States, we are subject to the Consumer Product Safety Act and other statutes administered by the U.S. Consumer Product Safety Commission, which impose product safety standards, reporting and recall obligations and, for children’s products such as toys, testing and certification requirements applicable to manufacturers and importers, and which prohibit the sale of recalled or non-compliant products. Our advertising and marketing practices are subject to Section 5 of the Federal Trade Commission Act and the rules and guidance of the Federal Trade Commission concerning unfair or deceptive acts or practices, endorsements and consumer reviews, and product warranties are subject to the Magnuson-Moss Warranty Act. The INFORM Consumers Act requires online marketplaces such as Amazon to collect, verify and disclose certain identifying information about high-volume third-party sellers, and we are required to provide such information to Amazon and to comply with its seller policies. We are also subject to state consumer protection laws, sales and use tax laws (under which Amazon, as a marketplace facilitator, generally collects and remits sales tax on our marketplace sales), product labeling requirements such as California’s Proposition 65, and federal and state data privacy laws to the extent applicable to our operations.
Regulations in Hong Kong
Regulations relating to Labor and Social Welfare of Hong Kong
Our employees in Hong Kong are subject to the Hong Kong Employment Ordinance (the “EO”). The EO is the main employment legislation in Hong Kong, providing for certain minimum benefits and protections, including:
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paid annual leave; |
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paid sick leave; |
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paid maternity leave; and |
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compensation payments in certain cases of severance, unfair dismissal or termination after long service. |
Subject to limited exceptions, the EO applies to all employees working in Hong Kong, regardless of their nationality. Other mandatory laws that are likely to apply to the employment relationship with our Hong Kong employees include the following:
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The Personal Data (Privacy) Ordinance. This ordinance regulates an employer’s collection or surveillance, use and disclosure of an employee’s personal data (including personal data contained in e-mails and phone calls). |
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Mandatory Provident Fund Schemes Ordinance. Subject to limited exceptions, this ordinance requires employers in Hong Kong to enroll employees in a Mandatory Provident Fund Scheme, to which the employer and employee must make certain contributions. Foreign nationals are exempt if they are posted in Hong Kong to work for a period not exceeding 13 months or belong to a retirement scheme outside of Hong Kong. In certain cases, a Hong Kong national working outside of Hong Kong may still be subject to this ordinance if the employment has sufficient connection with Hong Kong. |
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Occupational Safety and Health Ordinance. This ordinance imposes a duty on all employers, as far as is reasonably practicable, to ensure the safety and health in the workplace of their employees. The Occupational Safety and Health Ordinance covers most industrial and non-industrial workplaces in Hong Kong. |
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Employees’ Compensation Ordinance. If an employee suffers injury arising out of and in the course of employment in Hong Kong (or overseas, if the travel is authorized by the employer), the employer is usually liable to compensate the employee under the Employees’ Compensation Ordinance. Eligible family members of an employee killed in an accident at work may also be entitled to compensation. If an employer carries on business in Hong Kong, its employees are protected under the ordinance. All employers are required to maintain valid employees’ compensation insurance policies to cover their liabilities under the ordinance and at common law. |
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Sex Discrimination Ordinance, Disability Discrimination Ordinance, Family Status Discrimination Ordinance and Race Discrimination Ordinance. All four of these ordinances legislate against various forms of discrimination. |
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Labour Tribunal Ordinance. This ordinance empowers the Labour Tribunal to hear and resolve disputes relating to employment contracts as well as alleged breaches of the Employment Ordinance. It potentially covers disputes involving foreign nationals or Hong Kong residents working abroad. |
Regulations on Anti-Money Laundering and Counter-Terrorist Financing of Hong Kong
Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Chapter 615 of the Laws of Hong Kong)
The Anti-Money Laundering and Counter-Terrorist Financing Ordinance, or the AMLO, imposes requirements relating to client due diligence and record-keeping and provides regulatory authorities with the powers to supervise compliance with the requirements under the AMLO. In addition, the regulatory authorities are empowered to (i) ensure that proper safeguards exist to prevent contravention of specified provisions in the AMLO; and (ii) mitigate money laundering and terrorist financing risks.
Drug Trafficking (Recovery of Proceeds) Ordinance (Chapter 405 of the Laws of Hong Kong)
The Drug Trafficking (Recovery of Proceeds) Ordinance (Chapter 405 of the Laws of Hong Kong), or the DTROP, contains provisions for the investigation of assets suspected to be derived from drug trafficking activities, the freezing of assets on arrest and the confiscation of the proceeds from drug trafficking activities. It is an offense under the DTROP if a person deals with any property knowing, or having reasonable grounds to believe, it to be the proceeds from drug trafficking. 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 offense under the DTROP.
Organized and Serious Crimes Ordinance (Chapter 455 of the Laws of Hong Kong)
The Organized and Serious Crimes Ordinance (Chapter 455 of the Laws of Hong Kong), 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 offenses. The OSCO extends the money laundering offense to cover the proceeds of all indictable offenses in addition to drug trafficking.
United Nations (Anti-Terrorism Measures) Ordinance (Chapter 575 of the Laws of Hong Kong)
The United Nations (Anti-Terrorism Measures) Ordinance (Chapter 575 of the Laws of Hong Kong), or the UNATMO, provides that it is a criminal offense to: (i) provide or collect funds (by any means, directly or indirectly) with the intention or knowledge that the funds will be used to commit, in whole or in part, one or more terrorist acts; or (ii) make any funds or financial (or related) services available, directly or indirectly, to or for the benefit of a person knowing that, or being reckless as to whether, such person is a terrorist or terrorist associate. The UNATMO also requires a person to report his knowledge or suspicion of terrorist property to an authorized officer, and failure to make such disclosure constitutes an offense under the UNATMO.
Regulations on Personal Data of Hong Kong
The Personal Data (Privacy) Ordinance (Chapter 486 of the Laws of Hong Kong) (“PDPO”), as amended, supplemented or otherwise modified from time to time, places a statutory duty on data users to comply with the requirements of the six data protection principles contained in Schedule 1 to this ordinance. The PDPO provides that a data user shall not do an act, or engage in a practice, that contravenes a data protection principle unless the act or practice, as the case may be, is required or permitted under the PDPO. The six data protection principles are:
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Principle 1 — purpose and manner of collection of personal data; |
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Principle 2 — accuracy and duration of retention of personal data; |
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Principle 3 — use of personal data; |
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Principle 4 — security of personal data; |
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Principle 5 — information to be generally available; and |
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Principle 6 — access to personal data. |
The PDPO also gives data subjects certain rights, inter alia:
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the right to be informed of whether it is obligatory or voluntary for him/her to supply the data and the purpose for which the data is to be used; |
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the right to be informed by a data user whether the data user holds personal data of which the individual is the data subject; and |
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the right to request access to and to request correction of his/her personal data. |
Non-compliance with a data protection principle may lead to a complaint to the Privacy Commissioner for Personal Data. A claim for compensation may also be made by a data subject who suffers damage by reason of a contravention of a requirement under the PDPO.
Regulations on Hong Kong Taxation
Inland Revenue Ordinance (Chapter 112 of the Laws of Hong Kong)
Under the Inland Revenue Ordinance (Chapter 112 of the Laws of Hong Kong), where an employer commences to employ in Hong Kong an individual who is or is likely to be chargeable to tax, or any married person, the employer shall give a written notice to the Commissioner of Inland Revenue not later than three months after the date of commencement of such employment. Where an employer ceases or is about to cease to employ in Hong Kong an individual who is or is likely to be chargeable to tax, or any married person, the employer shall give a written notice to the Commissioner of Inland Revenue not later than one month before such individual ceases to be employed in Hong Kong.
Tax on dividends
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 the Company.
Capital gains and profits tax
No tax is imposed in Hong Kong in respect of capital gains from the sale of shares. However, trading gains from the sale of shares by persons carrying on a trade, profession or business in Hong Kong, where such gains are derived from or arise in Hong Kong, will be subject to Hong Kong profits tax which is imposed at the rates of 8.25% on assessable profits up to HK$2,000,000 (approximately US$256,000) and 16.5% on any part of assessable profits over HK$2,000,000 (approximately US$256,000) on corporations from the year of assessment of 2018/2019 onwards. 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.
Stamp duty
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). In addition, a fixed duty of HK$5 is currently payable on any instrument of transfer of Hong Kong shares. Where one of the parties is a resident outside Hong Kong and does not pay the ad valorem duty due by it, the duty not paid will be assessed on the instrument of transfer (if any) and will be payable by the transferee. If no stamp duty is paid on or before the due date, a penalty of up to ten times the duty payable may be imposed.
Estate duty
Hong Kong estate duty was abolished effective from February 11, 2006. No Hong Kong estate duty is payable by shareholders in relation to the shares owned by them upon death.
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C. |
Organizational Structure |
The Company’s major subsidiaries as of the date of this annual report are summarized as follows:
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Date of |
Percentage of |
Place of |
Principal business |
|||||||
|
Name of subsidiaries |
incorporation |
ownership |
incorporation |
activities |
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New Innovations BVI Limited |
June 27, 2025 |
100 | % |
BVI |
Investment holding |
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New Innovations Limited |
March 15, 2023 |
100 | % |
Hong Kong |
Technology development |
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BitVentures America Inc |
September 16, 2015 |
100 | % |
United States |
Technology development |
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Freedom Mining LLC |
November 3, 2025 |
100 | % |
United States |
Digital assets |
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BTV-NDR eCommerce LLC |
July 29, 2025 |
100 | % |
United States |
E-commerce |
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Santech Global Hong Kong Limited |
May 3, 2016 |
100 | % |
Hong Kong |
Provision of client referral services |
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D. |
Property and Equipment |
As of June 30, 2026, we had approximately 150 square meters of leased office space in Hong Kong and the United States. The lessor for the leased premises had valid title to the property. We believe that our existing facilities are adequate for our current business operations and we will be able to enter into lease arrangements on commercially reasonable terms for future expansion.
Item 4A. Unresolved Staff Comments
Not applicable.
Item 5. Operating and Financial Review and Prospects
You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our consolidated financial statements and the related notes included elsewhere in this annual report. This discussion contains forward-looking statements that involve risks and uncertainties about our business and operations. Our actual results and the timing of selected events may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those we describe under “Item 3. Key Information—D. Risk Factors” and elsewhere in this annual report.
During the fiscal year ended June 30, 2026, our primary businesses reported in our financial statements were e-commerce, digital assets and client referral services. In the first half of fiscal year 2026, the Company began official rollout of its e-commerce segment. The Company operated its e-commerce segment under a resale model, offering high-demand products such as consumer electronics, toys, and other consumer products via its storefront on Amazon. The Company transacted approximately US$0.14 million of gross merchandise volume (GMV) and over 1,800 customer orders in its e-commerce segment during fiscal year 2026. The Company intends to leverage its current e-commerce incubation as a launchpad for scaling additional product lines and revenue growth in its e-commerce segment. Starting in the second half of fiscal year 2026, the Company began official rollout of its digital assets segment. As of the date of this annual report, the Company has procured approximately 39 PH/s of Bitcoin (SHA-256) mining hardware and 0.3 TH/s of Scrypt-based (Litecoin and Dogecoin) mining hardware, and has currently installed an aggregate of approximately 39 PH/s of Bitcoin mining hashrate and 0.3 TH/s of Scrypt-based mining hashrate, at multiple third-party datacenter facilities in the United States with which the Company has contracted. The Company plans to continue to deploy additional mining equipment to grow its digital asset presence subject to market conditions and capital availability.
During the fiscal years ended June 30, 2024 and 2025, the Company underwent a series of restructurings to completely exit all of our legacy wealth management and asset management businesses in Hong Kong and in mainland China. On August 14, 2024, we exited our businesses in overseas wealth management and asset management and disposed of certain subsidiaries in Hong Kong, namely, Haiyin Insurance (Hong Kong) Co., Limited, Hywin International Insurance Broker Limited, Haiyin International Asset Management Limited, and Hywin Asset Management (Hong Kong) Limited. After the disposals, the Company no longer holds financial service licenses in Hong Kong. As a result of this strategic exit, for the years ended June 30, 2025 and 2024, we have reclassified our historical financial results relating to overseas wealth management and asset management services under discontinued operations. On June 28, 2024, we exited the wealth management businesses in China by terminating the variable interest entity (“VIE”) arrangements with Hywin Wealth Management, which, along with its subsidiaries, provided wealth management services in mainland China. The Company’s combined financial statements for the year ended June 30, 2024 were prepared excluding its historical PRC subsidiaries and VIEs. See “Item 4. Information on the Company—A. History and Development of the Company” for details of our corporate history.
Since fiscal year 2025, we no longer have any operations, offices or any employees in mainland China. The Company has also completely migrated its business data, information systems and business infrastructure outside of mainland China. We believe we have ceased to be a “China concept stock”.
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A. |
Operating Results |
Key Factors Affecting Our Results of Operations
Key factors affecting our results of operations during the reported periods include the following. Due to the Company’s significant changes in business focus during fiscal years ended June 30, 2024, 2025 and 2026, our historical results may not be indicative of our future performance.
Client Referral Services
For the three years ended June 30, 2026, under client referral services, we introduced clients to external financial product partners. Most of these products were insurance products sourced through external insurance brokers. Conducting client referrals in Hong Kong generally does not require us to hold financial services licenses in Hong Kong. Since fiscal year 2024, due to significant loss of clients and challenges that we encountered in our financial services businesses, revenues from client referral services have declined precipitously. Although we may continue to conduct client referral services opportunistically, we expect revenues from client referral services to remain significantly challenged in the near future, or we may not be able to obtain any revenue from client referral services at all.
E-commerce
During the first half of fiscal year 2026, the Company began official rollout of its e-commerce segment. The Company operated its e-commerce segment under a resale model, offering high-demand products such as consumer electronics, toys and other consumer products via its storefront on Amazon.
Digital Assets
During the second half of fiscal year 2026, the Company began official rollout of its digital assets segment. The Company’s main activity in the digital assets segment consists of mining Bitcoin and, to a lesser extent, other digital assets such as Litecoin and Dogecoin, using application-specific integrated circuit ("ASIC") mining hardware, hosted at multiple third-party datacenter facilities located in the United States.
Key Components of Results of Operations
Revenues
From continuing operations
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For the year ended June 30, |
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2024 |
2025 |
2026 |
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US$ |
% |
US$ |
% |
US$ |
% |
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(in thousands, except for percentages) |
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Digital assets |
— | — | — | — | 90 | 18.1 | ||||||||||||||||||
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E-commerce |
— | — | — | — | 119 | 23.9 | ||||||||||||||||||
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Client referral services |
21,818 | 100.0 | — | — | 289 | 58.0 | ||||||||||||||||||
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Total |
21,818 | 100.0 | — | — | 498 | 100.0 | ||||||||||||||||||
Under client referral services, we derived fee incomes by referring clients to external financial product partners, primarily external insurance brokers, to purchase insurance products. These insurance products we offered included (i) life insurance products such as individual whole life insurance, individual term life insurance, universal life insurance and individual health insurance, (ii) annuity insurance products, and (iii) critical illness insurance products (including personal accident insurance products). The one-time fee incomes were typically computed as a pre-agreed percentage of the underlying insurance premiums received by the insurance companies.
Under e-commerce, we derived retail income from product sales on our Amazon storefront. Our revenue is represented by product sales and shipping and handling revenue. We treat shipping and handling as fulfillment activities and not as a separate performance obligation. We recognize revenue for a single performance obligation related to product sales at the time control of the merchandise passes to the customer, which is generally at the time of shipment. Shipping and handling revenue was de minimis for the year ended June 30, 2026. Sales taxes collected from customers are excluded from revenue.
Under digital assets, we deploy our own digital assets mining equipment to provide computing power (also known as “hashrates”) to digital asset mining pools, and receive consideration in the form of digital assets, the value of which is determined using the market price of the related digital asset at the time of receipt.
From discontinued operations
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For the year ended June 30, |
Two Months Ended August 31, |
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|
2024 |
2024 |
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|
US$ |
% |
US$ |
% |
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|
(in thousands, except for percentages) |
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Wealth management services |
2,286 | 36.8 | 11 | 0.9 | ||||||||||||
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Asset management services |
3,919 | 63.2 | 1,170 | 99.1 | ||||||||||||
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Total |
6,205 | 100.0 | 1,181 | 100.0 | ||||||||||||
Wealth Management Services
For the year ended June 30, 2024 and the two months ended August 31, 2024, we derived fee incomes from insurance brokerage services by providing insurance products through our Hong Kong subsidiaries. These insurance products we offered included (i) life insurance products such as individual whole life insurance, individual term life insurance, universal life insurance and individual health insurance, (ii) annuity insurance products, and (iii) critical illness insurance products (including personal accident insurance products).
Asset Management Services
For the year ended June 30, 2024 and the two months ended August 31, 2024, under asset management services, we provided asset management services in the offshore space through our licensed subsidiary in Hong Kong. Our net revenues from the asset management services primarily consisted of management fees calculated either as a percentage of the assets under management of the funds or mandates, and to a lesser extent, retrocession from custodian banks, commissions from trades, and performance-based fees.
Operating Costs and Expenses
Our operating costs and expenses primarily consist of (i) cost of revenues; (ii) general and administrative expenses; (iii) sales and marketing expenses; (iv) share-based compensation expenses; (v) depreciation and amortization; and (vi) loss on digital assets. The following table sets forth the components of our operating costs and expenses for the periods indicated.
From continuing operations
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For the year ended June 30, |
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|
2024 |
2025 |
2026 |
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|
US$ |
% |
US$ |
% |
US$ |
% |
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|
(in thousands, except for percentages) |
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|
Cost of revenues |
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|
Digital assets, exclusive of depreciation |
— | — | — | — | 61 | 2.2 | ||||||||||||||||||
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Digital assets, depreciation |
— | — | — | — | 62 | 2.2 | ||||||||||||||||||
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E-commerce |
— | — | — | — | 91 | 3.3 | ||||||||||||||||||
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Compensation and benefits |
15,808 | 70.0 | — | — | — | — | ||||||||||||||||||
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Depreciation and amortization |
1,014 | 4.5 | 498 | 13.5 | 18 | 0.7 | ||||||||||||||||||
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Loss on digital assets |
— | — | — | — | 18 | 0.7 | ||||||||||||||||||
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Share-based compensation expenses |
102 | 0.4 | 236 | 6.4 | 795 | 28.8 | ||||||||||||||||||
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Sales and marketing expenses |
3,131 | 13.9 | 530 | 14.4 | 42 | 1.5 | ||||||||||||||||||
|
General and administrative expenses |
2,537 | 11.2 | 2,421 | 65.7 | 1,676 | 60.6 | ||||||||||||||||||
|
Total operating cost and expenses |
22,592 | 100.0 | 3,685 | 100.0 | 2,763 | 100.0 | ||||||||||||||||||
From discontinued operations
|
For the year ended June 30, |
Two Months Ended August 31, |
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|
2024 |
2024 |
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|
US$ |
% |
US$ |
% |
|||||||||||||
|
(in thousands, except for percentages) |
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|
Compensation and benefits |
1,451 | 24.4 | 602 | 69.4 | ||||||||||||
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Sales and marketing expenses |
359 | 6.0 | — | — | ||||||||||||
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General and administrative expenses |
1,969 | 33.2 | 266 | 30.6 | ||||||||||||
|
Share-based compensation expenses |
— | — | — | — | ||||||||||||
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Asset impairment loss |
2,158 | 36.4 | — | — | ||||||||||||
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Total operating cost and expenses |
5,937 | 100.0 | 868 | 100.0 | ||||||||||||
Cost of Revenues – Digital Assets
Our cost of revenues from digital asset mining is mainly operating costs relating to hosting, power supply, repair and maintenance fees to third-party hosting partners. These partners operate specialized mining datacenters, where they install and operate the miners and provide technology consulting, maintenance, and repair work on-site for their clients.
Our cost of revenues from the depreciation of digital asset mining primarily includes depreciation of digital asset mining equipment.
Cost of Revenues – E-Commerce
Our cost of revenues from e-commerce is mainly costs relating to product procurement, services and fulfillment and warehouse fees charged by Amazon, packing cost and logistic costs directly related to the sale of our products.
Compensation and benefits
Our compensation and benefits are operating costs relating to base salary, sales commission and other compensation and benefits of personnel who directly contribute to our revenue generation activities, such as distribution of fund products and insurance products. Unpaid commissions were separately presented as commission payable and commission payable-long term on our consolidated balance sheets, depending on whether the amounts are expected to be paid within or after one year of each reporting date.
Loss on Digital Assets
Our loss on digital assets primarily includes unrealized fair value changes of our digital assets.
Depreciation and Amortization
Our depreciation and amortization primarily include depreciation of office equipment and amortization of right-of-use assets.
Sales and Marketing Expenses
Our sales and marketing expenses primarily include salaries and bonus for our sales and marketing staff, and other expenses related to marketing activities such as events and travel.
General and Administrative Expenses
Our general and administrative expenses primarily include compensation of management and administrative staff, rental and other expenses of our headquarters and other overhead expenses including listing fees, accounting and auditor fees, and legal expenses.
Share-based Compensation Expenses
On December 6, 2020, we adopted a share incentive plan, or the 2020 Plan. Under the 2020 Plan, the maximum aggregate number of ordinary shares available for issuance will be 5,000,000 ordinary shares, or 250,000 ordinary shares after giving effect to the Share Consolidation, equal to 10% of the total outstanding ordinary shares of our company immediately prior to completion of our initial public offering. As of the date of this annual report, 1,776,000 restricted shares, or 88,800 restricted shares after giving effect to the Share Consolidation, have been granted to our executive officers and directors under the 2020 Plan. For details of the 2020 Plan, see “Item 6. Directors, Senior Management and Employees—B. Compensation—Share Incentive Plans—2020 Plan.” For the years ended June 30, 2024, 2025 and 2026, US$0.1 million, US$0.2 million and US$0.8 million were recorded in share-based compensation expenses, respectively.
Other Income/(Expenses)
Interest Income, Net
Our net interest income primarily represented interest from bank deposits and short-term investments for the years ended June 30, 2024, 2025 and 2026.
Other Income/(Expenses), Net
Our net other income or expenses are recorded as a result of non-operating income or expenses. For the year ended June 30, 2024, our other income or expenses mainly represented foreign exchange related losses. For the year ended June 30, 2025, our other income or expenses mainly represented one-off legal settlement amounts for a class action lawsuit brought against us and associated legal expenses of US$1.8 million, and loss on early termination of operating lease of US$0.3 million. For the year ended June 30, 2026, our other income or expenses mainly represented the recovery of previous impairment loss on bank balances of US$5.4 million.
Income Tax Expense
Cayman Islands
BitVentures Limited is incorporated in the Cayman Islands as an exempted company. Under the current laws of the Cayman Islands, our company is not subject to income or capital gains taxes. In addition, dividend payments are not subject to withholding tax in the Cayman Islands.
British Virgin Islands (“BVI”)
Under the current laws of the BVI, our subsidiaries incorporated in BVI are not subject to tax on income or capital gains. Additionally, upon payments of dividends by these BVI companies to their respective shareholders, no BVI withholding tax will be imposed.
Hong Kong
Our subsidiaries incorporated in Hong Kong are subject to Hong Kong profits tax rate of 16.5% for taxable income generated from operations in Hong Kong. Effective from April 1, 2018, a two-tier corporate profits tax system was officially implemented in Hong Kong, which is 8.25% for the first HK$2.0 million of assessable profits, and 16.5% for the subsequent profits. In addition, the 8.25% tax rate can only be utilized by one entity in a controlled group, while all other entities in the controlled group utilize the 16.5% tax rate.
United States
Our subsidiaries incorporated in the United States are subject to U.S. federal corporate income tax at a rate of 21% on their taxable income, as well as to state and local income and other taxes in the states in which they operate. Our U.S. subsidiaries did not generate taxable income for calendar year 2024 and generated approximately US$0.2 million and US$0.1 million federal taxable income in calendar year 2025 and the first half of calendar year 2026, respectively. Digital assets received as mining rewards are generally includible in taxable income at their fair market value when received for U.S. federal income tax purposes.
Results of Operations
The following table sets forth a summary of our consolidated results of continuing operations for the periods indicated. The information should be read in conjunction with our consolidated financial statements and related notes included elsewhere in this annual report. The operating results in any period are not necessarily indicative of results that may be expected for any future period.
Continuing operations
|
For the year ended June 30, |
||||||||||||||||||||||||
|
2024 |
2025 |
2026 |
||||||||||||||||||||||
|
US$ |
% |
US$ |
% |
US$ |
% |
|||||||||||||||||||
|
(in thousands, except for percentages) |
||||||||||||||||||||||||
|
REVENUE |
||||||||||||||||||||||||
|
Digital assets |
— | — | — | — | 90 | 18.1 | ||||||||||||||||||
|
E-commerce |
— | — | — | — | 119 | 23.9 | ||||||||||||||||||
|
Client referral services |
21,818 | 100.0 | — | — | 289 | 58.0 | ||||||||||||||||||
|
Total revenues from third parties |
21,818 | 100.0 | — | — | 498 | 100.0 | ||||||||||||||||||
|
Operating Costs and Expenses |
||||||||||||||||||||||||
|
Cost of revenue |
||||||||||||||||||||||||
|
Digital assets, exclusive of depreciation |
— | — | — | — | 61 | 2.2 | ||||||||||||||||||
|
Digital assets, depreciation |
— | — | — | — | 62 | 2.2 | ||||||||||||||||||
|
E-commerce |
— | — | — | — | 91 | 3.3 | ||||||||||||||||||
|
Compensation and benefits |
15,808 | 70.0 | — | — | — | — | ||||||||||||||||||
|
Depreciation and amortization |
1,014 | 4.5 | 498 | 13.5 | 18 | 0.7 | ||||||||||||||||||
|
Loss on digital assets |
— | — | — | — | 18 | 0.7 | ||||||||||||||||||
|
Share-based compensation expenses |
102 | 0.4 | 236 | 6.4 | 795 | 28.8 | ||||||||||||||||||
|
Sales and marketing expenses |
3,131 | 13.9 | 530 | 14.4 | 42 | 1.5 | ||||||||||||||||||
|
General and administrative expenses |
2,537 | 11.2 | 2,421 | 65.7 | 1,676 | 60.6 | ||||||||||||||||||
|
Total operating cost and expenses |
22,592 | 100.0 | 3,685 | 100.0 | 2,763 | 100.0 | ||||||||||||||||||
|
Loss from operations |
(774 | ) | — | (3,685 | ) | — | (2,265 | ) | — | |||||||||||||||
|
Other income/(expenses) |
||||||||||||||||||||||||
|
Interest (expense)/income, net |
(61 | ) | — | 121 | — | 338 | — | |||||||||||||||||
|
Other income/(expenses), net |
70 | — | (2,109 | ) | — | 5,351 | — | |||||||||||||||||
|
(Loss)/income before income tax expense |
(765 | ) | — | (5,673 | ) | — | 3,424 | — | ||||||||||||||||
|
Income tax expense |
— | — | 117 | — | — | — | ||||||||||||||||||
| Net (loss)/income from continuing operations | (765 | ) | — | (5,790 | ) | — | 3,424 | — | ||||||||||||||||
Year Ended June 30, 2026 Compared to Year Ended June 30, 2025
Revenues
Our revenue from digital assets increased from nil for the year ended June 30, 2025 to US$0.1 million for the year ended June 30, 2026, due to the Company’s inception in digital assets in the second half of fiscal year 2026.
Our revenue from e-commerce increased from nil for the year ended June 30, 2025 to US$0.1 million for the year ended June 30, 2026, due to the Company’s entry into e-commerce in the first half of fiscal year 2026.
Our revenues from client referral service increased from nil for the year ended June 30, 2025 to US$0.3 million for the year ended June 30, 2026, primarily due to one-off insurance referral business income that we recognized.
Operating Cost and Expenses
Our total operating costs and expenses decreased from US$3.7 million for the year ended June 30, 2025 to US$2.8 million for the year ended June 30, 2026 as a result of the following.
Cost of revenue
Our cost of revenue increased from nil for the year ended June 30, 2025 to US$0.2 million for the year ended June 30, 2026, primarily due to our business expansion in e-commerce and digital assets and the impact of an increase in the depreciation of digital assets mining equipment.
Depreciation and amortization
Our depreciation and amortization decreased from US$0.5 million for the year ended June 30, 2025 to a de minimis amount for the year ended June 30, 2026, primarily due to a decrease in the right-of-use asset we leased.
Share-based compensation expenses
Our share-based compensation expenses increased from US$0.2 million for the year ended June 30, 2025 to US$0.8 million for the year ended June 30, 2026, primarily because of an accelerated vesting of the restricted share awards granted to our CEO. For details, see “Item 6. Directors, Senior Management and Employees—B. Compensation—Share Incentive Plans.”
Sales and marketing expenses
Our sales and marketing expenses decreased from US$0.5 million for the year ended June 30, 2025 to a de minimis amount for the year ended June 30, 2026, primarily due to a decrease in sales and marketing activities devoted to overseas insurance referral businesses.
General and administrative expenses
Our general and administrative expenses decreased from US$2.4 million for the year ended June 30, 2025 to US$1.7 million for the year ended June 30, 2026, primarily due to further cost cutting measures that senior management undertook in fiscal year 2026.
Interest Income/(Expenses), Net
We recorded net interest income of US$0.3 million for the year ended June 30, 2026 and of US$0.1 million for the year ended June 30, 2025.
Other Income/(Expenses), Net
We recorded net other income of US$5.4 million for the year ended June 30, 2026, primarily due to the recovery of previous impairment loss on bank balances of US$5.4 million. We recorded net other expenses of US$2.1 million for the year ended June 30, 2025, primarily representing one-off legal settlement amounts for a class action lawsuit brought against us and associated legal expenses of US$1.8 million, and loss on early termination of operating lease of US$0.3 million.
Income Tax Expense
Our income tax expense was nil for the year ended June 30, 2026. Our income tax expense was US$0.1 million for the year ended June 30, 2025 primarily representing the under-provision of income tax expense in the previous year.
Net Income/(Loss)
As a result of the foregoing, our net income was US$3.4 million for the year ended June 30, 2026, and our net loss was US$5.8 million for the year ended June 30, 2025.
Year Ended June 30, 2025 Compared to Year Ended June 30, 2024
Net Revenues
Our net revenues from client referral services decreased from US$21.8 million for the year ended June 30, 2024 to nil for the year ended June 30, 2025, primarily due to the significant loss of clients that we encountered in our financial services businesses in 2024, which caused our revenues from client referral services to decline precipitously.
Operating Cost and Expenses
Our total operating costs and expenses decreased from US$22.6 million for the year ended June 30, 2024 to US$3.7 million for the year ended June 30, 2025 due to the following.
Compensation and benefits
Our compensation and benefits from client referral service decreased from US$15.8 million for the year ended June 30, 2024 to nil for the year ended June 30, 2025, as compensation and benefits directly associated with revenue produced in overseas wealth and asset management were reclassified under discontinued operations.
Sales and marketing expenses
Our sales and marketing expenses decreased from US$3.1 million for the year ended June 30, 2024 to US$0.5 million for the year ended June 30, 2025, primarily due to cost cutting measures that senior management undertook in fiscal year 2025.
General and administrative expenses
Our general and administrative expenses decreased from US$2.5 million for the year ended June 30, 2024 to US$2.4 million for the year ended June 30, 2025, primarily due to aggressive cost cutting measures that senior management undertook in fiscal year 2025, partially offset by an increase in legal and accounting expenses during the year due to restructuring and business reorganization.
Share-based compensation expenses
Our share-based compensation expenses increased from US$0.1 million for the year ended June 30, 2024 to US$0.2 million for the year ended June 30, 2025, primarily due to new restricted share awards granted under the 2020 Plan in 2025. For details, see “Item 6. Directors, Senior Management and Employees—B. Compensation—Share Incentive Plans.”
Interest Income/(Expenses), Net
We recorded net interest expense of US$0.1 million for the year ended June 30, 2024 and net interest income of US$0.1 million for the year ended June 30, 2025.
Other Income/(Expenses), Net
We recorded net other expenses of US$2.1 million for the year ended June 30, 2025, primarily representing one-off legal settlement amounts for a class action lawsuit brought against us and associated legal expenses of US$1.8 million, and loss on early termination of operating lease of US$0.3 million.
Income Tax Expense
Our income tax expense was nil for the year ended June 30, 2024, and US$0.1 million for the year ended June 30, 2025 primarily representing the under-provision of income tax expense in the previous year.
Net Loss
As a result of the foregoing, our net loss increased from US$0.8 million for the year ended June 30, 2024 to US$5.8 million for the year ended June 30, 2025.
|
B. |
Liquidity and Capital Resources |
To date, we have financed our operations primarily through cash flows from operations and proceeds from our initial public offering. We had net income of approximately US$3.4 million from continuing operations for the year ended June 30, 2026, and net loss of approximately US$5.8 million and US$0.8 million from continuing operations for the years ended June 30, 2025 and 2024, respectively. We had an accumulated deficit of US$32.6 million and US$36.1 million as of June 30, 2026 and 2025, respectively. As of June 30, 2026 and 2025, we had cash and cash equivalents of US$4.5 million and US$1.0 million, respectively, and we had short-term investments of US$7.0 million and US$8.8 million, respectively.
We believe that our current cash and anticipated cash flow from operations will be sufficient to meet our anticipated cash needs, including our cash needs for at least the next 12 months. We may, however, need additional capital in the future to fund our continued operations and strategic initiatives. For example, we may need a substantial amount of capital to develop or acquire our e-commerce, digital asset or other technology businesses. If we determine that our cash requirements exceed the amount of cash and cash equivalents we have on hand at the time, we may seek to issue equity or debt securities or obtain credit facilities. The issuance and sale of additional equity or debt securities would result in further dilution to our shareholders. The incurrence of indebtedness would result in increased fixed obligations and could result in operating covenants that might restrict our operations. We cannot assure you that financing will be available in amounts or on terms acceptable to us, if at all.
The following table sets forth a summary of our cash flows for the periods indicated.
|
Year ended June 30, |
||||||||||||
|
2024 |
2025 |
2026 |
||||||||||
|
US$ |
US$ |
US$ |
||||||||||
|
(in thousands) |
||||||||||||
|
Net cash provided by/(used in) operating activities |
2,564 | (6,482 | ) | 4,314 | ||||||||
|
Net cash used in investing activities |
— | (8,760 | ) | (801 | ) | |||||||
|
Net cash provided by financing activity |
— | 1,008 | — | |||||||||
|
Net increase/(decrease) in cash and cash equivalents |
2,564 | (14,234 | ) | 3,513 | ||||||||
|
Cash and cash equivalents at beginning of the year |
12,620 | 15,184 | 950 | |||||||||
|
Cash and cash equivalents at end of the year |
15,184 | 950 | 4,463 | |||||||||
Operating Activities
Net cash provided by operating activities for the year ended June 30, 2026 was US$4.3 million. This reflected net income of US$3.4 million, as adjusted by non-cash and non-operating items primarily including share-based compensation expenses and depreciation, and an inflow in operating assets and liabilities mainly related to the changes in deposits, prepayments and other current assets.
Net cash used in operating activities for the year ended June 30, 2025 was US$6.5 million. This reflected net loss of US$5.4 million, as adjusted by non-cash and non-operating items primarily including decrease in commissions payable, depreciation and amortization, and decrease in operating lease liabilities.
Net cash provided by operating activities for the year ended June 30, 2024 was US$2.6 million. This reflected net loss of US$0.7 million, as adjusted by non-cash and non-operating items primarily including asset impairment losses, net changes in related parties balances, depreciation and amortization, and decrease in operating lease liabilities.
Investing Activities
Net cash used in investing activities for the year ended June 30, 2026 was US$0.8 million, due to investment in digital asset mining equipment and net increase in placement of short-term and long-term investments.
Net cash used in investing activities for the year ended June 30, 2025 was US$8.8 million, primarily due to placement of short-term investments, partially offset by net cash inflow from disposal of subsidiaries.
Net cash used in or provided by investing activities for the year ended June 30, 2024 was nil.
Financing Activity
Net cash provided by financing activities for the years ended June 30, 2026 and 2024 was nil.
Net cash provided by financing activities for the year ended June 30, 2025 was US$1.0 million due to new share issuance.
Holding Company Structure
Our holding company, BitVentures Limited, is a holding company with no material operations of its own. As most of our operations are conducted through our subsidiaries, our ability to pay dividends is primarily dependent on receiving distributions of funds from our subsidiaries.
|
C. |
Research and Development, Patents and Licenses, etc. |
See “Item 4. Information on the Company—B. Business Overview—Intellectual Property.”
|
D. |
Trend Information |
Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events for the year ended June 30, 2026 that are reasonably likely to have a material and adverse effect on our revenues, income, profitability, liquidity or capital resources, or that would cause the disclosed financial information to be not necessarily indicative of future results of operations or financial conditions.
|
E. |
Critical Accounting Estimates |
We prepare financial statements in accordance with U.S. GAAP, which requires us to make judgments, estimates and assumptions that affect the reported amounts of our assets and liabilities and the disclosure of our contingent assets and liabilities at the end of each fiscal period and the reported amounts of revenues and expenses during each fiscal period. We continually evaluate these judgments and estimates based on our own historical experience, knowledge and assessment of current business and other conditions, our expectations regarding the future based on available information and assumptions that we believe to be reasonable, which together form our basis for making judgments about matters that are not readily apparent from other sources. Since the use of estimates is an integral component of the financial reporting process, our actual results could differ from those estimates.
The selection of critical accounting policies, the judgments and other uncertainties affecting application of those policies and the sensitivity of reported results to changes in conditions and assumptions are factors that should be considered when reviewing our financial statements. Out of our significant accounting policies, which are described in Note 2 - Summary of Significant Accounting Policies included elsewhere in this annual report, certain accounting policies are deemed “critical”, as they require management’s highest degree of judgment, estimates and assumptions, including (i) impairment loss of assets.
We consider an accounting estimate to be critical if: (i) the accounting estimate requires us to make assumptions about matters that were highly uncertain at the time the accounting estimate was made, and (ii) changes in the estimate that are reasonably likely to occur from period to period or use of different estimates that we reasonably could have used in the current period, would have a material impact on our financial condition or results of operations. We believe the following accounting estimates involve the most significant judgments used in the preparation of our financial statements.
Impairment loss of assets
All long-lived assets, which include tangible long-lived assets and intangible long-lived assets with finite lives, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of long-lived assets to be held and used is measured by a comparison of the carrying amount of the asset to the estimated undiscounted future cash flows expected to be generated by the assets. If the carrying amount of an asset exceeds its estimated future undiscounted cash flows, an impairment loss is recognized for the difference between the carrying amount of the asset and its fair value. For the years ended June 30, 2024, 2025 and 2026, the Company recognized impairment of long-lived assets from discontinued operations of US$0.2 million, nil and nil, respectively.
An intangible asset that is not subject to amortization shall be tested for impairment annually and more frequently if events or changes in circumstances indicate that it is more likely than not that the asset is impaired. Based on the qualitative assessment, if it is more likely than not that the fair value of an indefinite-lived intangible asset is less than the carrying value, a quantitative test to measure the amount of impairment must be performed. The quantitative impairment test compares the fair value of the asset with the carrying amount. If the carrying amount exceeds the fair value, then an impairment loss equal to that excess is recorded. For the years ended June 30, 2024, 2025 and 2026, the Company recognized impairment of indefinite-lived intangible assets from discontinued operations of US$2.0 million, nil and nil, respectively.
Item 6. Directors, Senior Management and Employees
|
A. |
Directors and Senior Management |
The following table sets forth information regarding our executive officers and directors.
|
Directors and Executive Officers |
Age |
Position/Title |
||
|
Mr. Lawrence Wai LOK |
44 |
Director, Chairman, CEO |
||
|
Mr. Kelvin Chun YU |
34 |
Head of Finance |
||
|
Mr. Joel A. GALLO |
54 |
Independent Director |
||
|
Ms. CHEN Jie |
55 |
Independent Director |
||
|
Mr. Howard Wing To CHAN |
40 |
Independent Director |
||
|
Mr. Geoffrey Fai KAM |
43 |
Independent Director |
Mr. Lawrence Wai LOK. Mr. LOK has served as Chairman and Chief Executive Officer of BitVentures since March 2025, following his tenure as Acting Chief Executive Officer from September 2024. Since assuming the role of CEO, Mr. LOK has led a comprehensive transformation of the Company through a critical period of restructuring and business reorganization. Under Mr. LOK’s leadership, the Company has restructured its legacy operations and rebuilt itself as a growth platform at the intersection of digital assets and technology ventures.
Mr. LOK is an active investor and founder, who has founded and funded several businesses. Mr. LOK also brings 20 years of experience across investment banking, capital markets, cross-border M&A and international wealth management. Mr. LOK was formerly an investment banker at Citigroup and Jefferies in Hong Kong and San Francisco, where he had extensive global experience and executed transactions across Asia Pacific, China, the United States and Europe. During that period, Mr. LOK led some of Asia Pacific’s highest-profile technology IPOs, private fundraisings and cross-border mergers and acquisitions. He also served as a trusted advisor to many of his clients on their growth strategies and transformative initiatives., including helping Chinese companies with their international expansion. His clients and transactions spanned many subsectors of the technology landscape, including fintech, payments, Internet, software, renewable energy, IT services and hardware.
Mr. LOK holds dual degrees from the University of California, Berkeley, a B.A. in Economics and a B.S. in Business Administration, where he graduated magna cum laude. Mr. LOK is a CFA charterholder and an active member of the CFA Institute and CFA Society San Francisco.
Mr. Kelvin Chun YU. Mr. YU currently serves as our Head of Finance. Mr. YU joined our company in May 2025, and is responsible for overseeing our financial and treasury operations. Mr. YU has over 10 years of experience working in the accounting and finance industry. Prior to joining the Company, Mr. YU worked as an auditor at Crowe (HK) CPA Limited, specializing in auditing companies listed in Hong Kong.
Mr. YU holds a Bachelor of Business Administration (Honours) in Accountancy degree from Hong Kong Baptist University. Mr. YU is a member of CPA Australia.
Mr. Joel A. GALLO. Mr. GALLO was appointed as our independent director in June 2020, and his appointment was effective in March 2021. Mr. GALLO has been the chief financial officer of XCharge since August 2025, and was previously the chief financial officer of HD EDU from February 2023 to August 2025. In addition, Mr. GALLO has been an adjunct professor at New York University since January 2021.
Mr. GALLO was previously the chief financial officer of CoinTiger from July 2022 to January 2023. From March 2021 to May 2022, Mr. GALLO was the chief financial officer of ETAO International Group. Prior to that role, he was the chief executive officer of Columbia China League Business Advisory Co. from November 2019 to February 2021, providing professional advisory services, including advising Chinese companies on initial public offering issues in the U.S. From April 2013 to December 2018, Mr. GALLO served as co-founder and principal of GLS Group LLC, responsible for providing management consulting services to financial sector firms. Previously, between February 1994 and March 2013, Mr. GALLO worked in senior executive roles at Scudder Kemper Investments (Zurich Insurance), TLX Trading Networks, Deloitte, Ernst & Young, EMC and PricewaterhouseCoopers. In those roles, Mr. GALLO advised over 100 global financial institutions on finance, strategy, transformation, and risk management projects.
Mr. GALLO obtained his bachelor’s degree in management from Binghamton University – State University of New York in 1993, a master’s degree in international relations from Tufts University in 2008, and a master’s degree in public administration from Columbia University in 2018.
Ms. CHEN Jie. Ms. CHEN was appointed as our independent director in September 2019, and her appointment was effective in March 2021. Ms. CHEN was the chief financial officer of SPI Energy Co., Ltd. from June 2021 to July 2025, and Ms. CHEN was previously the executive director of Brainzoom Business Consulting Co., Ltd. since July 2007, responsible for the operation of the company and also leading the consulting department providing business & financial consulting services to various companies. From January 2006 to May 2007, Ms. CHEN served as a vice president and finance director of Cellon International Holdings Corporation, responsible for leading the work of the corporate finance department. From July 2000 to January 2006, Ms. CHEN served as the southern China regional administration manager of PricewaterhouseCoopers (2002-2006) and former Arthur Andersen (2000-2002), Shenzhen & Guangzhou branches, responsible for the regional office administration work. From June 1993 to June 2000, Ms. CHEN served as an audit manager of Arthur Andersen, Shenzhen branch, providing audit assurance services to various PRC companies that were listed on the international stock markets.
Ms. CHEN obtained her bachelor’s degree in accounting from Shenzhen University in 1993 and is a member of CICPA and FCCA.
Mr. Howard Wing To CHAN. Mr. CHAN was appointed as our independent director in March 2025. Mr. CHAN is a Certified Public Accountant in the United States.
Mr. CHAN has extensive experience in corporate finance and transaction advisory in Mainland China and Hong Kong. From 2022 to 2025, Mr. CHAN was a Director of Corporate Finance and Capital Markets Transactions at Jones Lang LaSalle, based in Shanghai, focusing on real estate equity and debt advisory and investment sales for institutional clients in Mainland China. Prior to that, Mr. CHAN worked in various corporate finance, capital markets, and transaction advisory roles at Ernst & Young, Manulife, Cushman & Wakefield, and Briscoe Wong Ferrier in both Hong Kong and Mainland China.
Mr. CHAN received his Master of Finance from Tsinghua University in 2013, and his bachelor’s degree in Business Administration from Albertson College of Idaho in 2006.
Mr. Geoffrey Fai KAM. Mr. Geoffrey KAM was appointed as our independent director in March 2025. Mr. KAM is a qualified solicitor practicing in Hong Kong and currently works as a Consultant at Messrs. Boase Cohen & Collins, Hong Kong.
Mr. KAM has extensive experience in a broad range of contentious matters, including commercial litigation, contract disputes, criminal litigation, family law, and wills and probate matters. Prior to joining Messrs. Boase Cohen & Collins, Mr. KAM was a Partner at a Hong Kong-based boutique law firm for 6 years.
Mr. KAM holds dual degrees in Law and Commerce from Monash University, Melbourne, Australia, and a Postgraduate Certificate in Laws from City University of Hong Kong. Mr. KAM has also been actively involved in the community and public service in Hong Kong. His recent appointments include serving as a member of the Panel of Film Censorship Advisers of the Government of the Hong Kong Special Administrative Region and the Members Benefit Committee of The Law Society of Hong Kong.
|
B. |
Compensation |
Compensation of Directors and Executive Officers
Our board of directors has
For the year ended June 30, 2026, we paid an aggregate of approximately US$0.6 million in cash to our directors and executive officers. As required by Hong Kong laws and regulations, we participate in a pension scheme under the rules and regulations of the Mandatory Provident Fund Schemes Ordinance, or MPF Scheme. Otherwise, we have not set aside or accrued any amount to provide pension, retirement or other similar benefits to our executive officers and directors.
Employment Agreements
We have entered into employment agreements with each of our executive officers. Pursuant to the agreements, the executive officers are entitled to receive annual compensation and bonus approved by the board of directors. The agreements also provide that the executive officers are to work a minimum of 40 hours per week and are entitled to all legal holidays as well as other paid leave in accordance with applicable laws and regulations and our internal work policies.
Under applicable laws and regulations, we may immediately terminate the employment agreement and dismiss the contracted employee, such as, if the employee provides false personal information when joining our company, the employee commits serious violation of labor disciplines or rules and regulations of our company, or the employee commits serious dereliction of job duties, malpractice or breach of our company’s confidence. The employee may also immediately terminate the employment agreement, when we fail to pay remuneration as stipulated.
Additionally, we have entered into separate confidentiality & non-compete combined agreements with most of our executive officers. However, where no separate confidentiality & non-compete combined agreement is signed, the employment agreement provides for confidentiality and nondisclosure provisions. Each of our executive officers is subject to keeping trade secrets confidential during the course of their employment and not rendering services to or for our competitors, directly or indirectly, during the course of their employment and three to six months following the termination of their employment.
We have also entered into director agreements with our directors, which include indemnification provisions.
Share Incentive Plans
2020 Plan
On December 6, 2020, we adopted a share incentive plan, or the 2020 Plan. Under the 2020 Plan, the maximum aggregate number of ordinary shares available for issuance will be 5,000,000 ordinary shares, or 250,000 ordinary shares after giving effect to the Share Consolidation, equal to 10% of the total outstanding ordinary shares of our company immediately prior to completion of our initial public offering.
On February 9, 2026, the Board approved an adjustment of all outstanding restricted share awards to reflect the Share Consolidation effective January 5, 2026, such that the number of shares subject to each award is divided by 20, as well as approved an accelerated vesting of 82,300 ordinary shares awarded to Mr. Lok, our Chairman and CEO, provided that Mr. Lok enters into a separate, binding letter of undertaking whereby Mr. Lok agreed to extend his minimum holding period and undertake not to sell or otherwise dispose of the restricted ordinary shares by one additional year beyond the original vesting schedules.
As of the date of this annual report, the number of outstanding restricted share awards that we granted to our executive officers and directors under the 2020 Plan is as follows:
|
Ordinary Shares Underlying |
|||||||
|
Name |
Grant Date |
Vesting Schedule |
Restricted Share Awards |
||||
|
Chen Jie |
April 15, 2025 |
One-third on each anniversary |
* |
||||
|
Joel Gallo |
April 15, 2025 |
One-third on each anniversary |
* |
* Less than 1% of our total outstanding ordinary shares
Type of Awards. The plan permits the awards of options, restricted shares, restricted share units and other share awards that relate to our ordinary shares.
Plan Administration. Our board of directors or a committee of one or more members of the board of directors will administer the plan, provided that grants to committee members, non-independent directors and executive officers of our Company will be made by the full board. The committee or the board of directors, as applicable, will determine the participants to receive awards, the type and number of awards to be granted to each participant, and the terms and conditions of each grant, the way of settling or amendment of each grant, all other matters that must be determined and the revision of rules if deemed necessary to administer the 2020 Plan. We refer to our board of directors or a designated committee as the plan administrator.
Award Agreement. Awards granted under the plan are evidenced by an award agreement that sets forth the terms, conditions and limitations for each award, which may include the term of the award, vesting schedule, the provisions applicable in the event that the participant’s employment or service terminates, and our authority to unilaterally or bilaterally amend, modify, suspend, cancel or rescind the award.
Vesting Schedule and Conditions. The vesting schedule and conditions of granted share awards were determined by the board.
Exercise of Options. Subject to applicable laws, the plan administrator determines the exercise price for each award, which is stated in the relevant award agreement. Options that are vested and exercisable will terminate if they are not exercised prior to such time as the plan administrator determines at the time of grant. However, the maximum exercisable term is ten years from the date of grant.
Transfer Restrictions. Awards may not be transferred in any manner by the participant other than in accordance with the exceptions provided in the plan or the relevant award agreement or otherwise determined by the plan administrator, such as transfers to us or one of our subsidiaries, transfers by gift to “immediate family” as that term is defined in SEC Rule 16a-1(e) promulgated under the Exchange Act, transfers by will or the laws of descent and distribution.
Expiration. The plan terminates on the tenth anniversary of the Company’s initial public offering.
Termination and Amendment of the Plan. Our board of directors has the authority to terminate, amend, suspend or modify the plan in accordance with our articles of association and subject to applicable laws. However, without the prior written consent of the participant, no such action may adversely affect in any material way any award previously granted pursuant to the plan.
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C. |
Board Practices |
Board of Directors
Our Board of Directors currently consists of five directors, including four independent directors.
A director must disclose any material interest and such director may not vote at any meeting of directors or of a committee of directors on any resolution concerning a matter in which he has, directly or indirectly, an interest. The Nasdaq Capital Market corporate governance rules require that a majority of an issuer’s board of directors must consist of independent directors. However, as a Cayman Islands company listed on the Nasdaq Capital Market, we are a foreign private issuer and are permitted to follow the home country practice with respect to certain corporate governance matters. Cayman Islands law does not require a majority of a publicly traded company’s board of directors to be comprised of independent directors. We rely on this home country practice exception and from time to time, may not have a majority of independent directors serving on our board of directors.
Our board of directors may exercise all the powers of our company to borrow money, mortgage its undertaking, property and uncalled capital, and issue debentures or other securities whenever money is borrowed or as security for any obligation of our company or of any third party. None of our directors has a service contract with us that provides for benefits upon termination of service.
A director is not required to hold any shares in our company to qualify to serve as a director.
Committees of the Board of Directors
Under Nasdaq Capital Market standards, a listed company must have a compensation committee and a nominating/corporate governance committee composed only of independent directors. Cayman Islands law does not require a company to establish such committees. As a foreign private issuer, we intend to follow our home country practice. As of the date of this annual report, our remuneration committee does not consist solely of independent directors, and we have not established a nominating/corporate governance committee.
We have established an audit committee and a remuneration committee under the board of directors and adopted a charter for each of the audit committee and remuneration committee, which are available on our website at https://ir.bitventures.io/corporate/corporate-governance. The audit committee’s and remuneration committee’s members and functions are described below.
Audit Committee
Our audit committee consists of Ms. Chen Jie (Chair), Mr. Joel A. Gallo and Mr. Howard Chan. Ms. Chen Jie, Mr. Joel A. Gallo and Mr. Howard Chan satisfy the “independence” requirements of Rule 5605(a)(2) of the listing rules of the Nasdaq Capital Market and meet the independence standards under Rule 10A-3 under the Securities Exchange Act of 1934, as amended. Our board of directors has determined that Ms. Chen Jie qualifies as an “audit committee financial expert” within the meaning of paragraph (b) of Item 16A of Form 20-F. The audit committee oversees our accounting and financial reporting processes and the audits of the financial statements of our company. The audit committee is responsible for, among other things:
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● |
appointing the independent auditors and pre-approving all auditing and non-auditing services permitted to be performed by the independent auditors; |
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● |
reviewing with the independent auditors any audit problems or difficulties and management’s response; |
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● |
discussing the annual audited financial statements with management and the independent auditors; |
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● |
reviewing the adequacy and effectiveness of our accounting and internal control policies and procedures and any steps taken to monitor and control major financial risk exposures; |
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● |
reviewing and approving all proposed related party transactions; |
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● |
meeting separately and periodically with management and the independent auditors; and |
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● |
monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance. |
Remuneration Committee
Our remuneration committee consists of Lawrence Wai Lok (Chairman), Howard Chan and Geoffrey Kam. Howard Chan and Geoffrey Kam satisfy the “independence” requirements of Rule 5605(a)(2) of the listing rules of the Nasdaq Capital Market and meet the independence standards under Rule 10C-1 under the Securities Exchange Act of 1934, as amended. The remuneration committee reviews and approves certain compensation matters relating to our directors and executive officers. The remuneration committee is responsible for, among other things:
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● |
reviewing the compensation for our executive officers and directors and making recommendations to the board with respect to it; |
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● |
periodically reviewing and approving any long-term incentive compensation or equity plans, programs or similar arrangements, annual bonuses, and employee pension and welfare benefit plans; and |
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● |
appointing and overseeing any compensation consultants or advisors. |
Duties of Directors
Under Cayman Islands law, all of our directors owe fiduciary duties to our company, including a duty of loyalty, a duty to act honestly and a duty to act bona fide in what they consider in good faith to be in the best interests of the company, a duty not to make a profit based on his or her position as director and a duty not to put himself or herself in a position where the interests of the company conflict with his or her personal interest or his or her duty to a third party. Our directors must also exercise their powers only for a proper purpose. Our directors also have a duty to exercise the skill they actually possess and such care and diligence that a reasonably prudent person would exercise in comparable circumstances. In fulfilling their duty of care to us, our directors must ensure compliance with our memorandum and articles of association, as amended from time to time. Our company has the right to seek damages if a duty owed by any of our directors is breached. In limited exceptional circumstances, a shareholder may have the right to seek damages in our name if a duty owed by our directors is breached.
Our board of directors has all the powers necessary for managing, and for directing and supervising, our business affairs.
The functions and powers of our board of directors include, among others:
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● |
convening shareholders’ annual general meetings and reporting its work to shareholders at such meetings; |
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● |
declaring dividends and distributions; |
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● |
appointing officers and determining the term of office of the officers; |
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● |
exercising the borrowing powers of our company and mortgaging the property of our company; and |
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● |
approving the transfer of shares in our company, including the registration of such shares in our share register. |
Terms of Directors and Officers
Our officers are elected by and serve at the discretion of the board of directors. Our directors are not subject to a term of office or mandatory retirement age, and hold office until such time as they are removed from office by ordinary resolution of the shareholders or by the board. A director will be removed from office automatically if, among other things, the director (i) becomes bankrupt or makes any arrangement or composition with his creditors; or (ii) is found by our company to be or becomes of unsound mind.
We have no service contracts with any of our directors that provide benefits to them upon termination.
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D. |
Employees |
As of June 30, 2026, 2025 and 2024, we had 6, 6 and 36 employees, respectively.
As required by Hong Kong regulations, we are required to enroll Hong Kong employees in a Mandatory Provident Fund Scheme, to which the employer and employee must make certain contributions. We are also required to provide our Hong Kong employees with certain minimum benefits and protections, including paid annual leave, paid sick leave, paid maternity leave and compensation payments in certain cases of severance, unfair dismissal or termination after long service. See “Item 4. Information on the Company—B. Business Overview—Regulations—Regulations in Hong Kong—Regulations relating to Labor and Social Welfare of Hong Kong.” We believe that we maintain a good working relationship with our employees, and we have not experienced any major labor disputes.
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E. |
Share Ownership |
The following table sets forth information concerning the beneficial ownership of our ordinary shares as of June 30, 2026:
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each of our directors and executive officers; and |
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each shareholder known by us to be the beneficial owner of more than 5% of our outstanding ordinary shares. |
We have determined beneficial ownership in accordance with the rules of the SEC, which generally define beneficial ownership to include any shares over which a person exercises sole or shared voting or investment power. Such determination is not necessarily indicative of beneficial ownership for any other purpose. Except as indicated by the footnotes below, we believe, based on the information furnished to us, that the persons and entities named in the table below have sole voting and investment power or the power to receive the economic benefit with respect to all ordinary shares that they beneficially own, subject to applicable community property laws. None of the shareholders listed in the table is a broker-dealer or an affiliate of a broker-dealer.
Applicable percentage ownership is based on 8,484,581 ordinary shares outstanding as of June 30, 2026. Unless otherwise indicated, the principal executive address of Mr. Lawrence Wai Lok is Level 15, AIA Central, No.1 Connaught Road Central, Hong Kong.
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Beneficial Ownership (1) |
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Name of Beneficial Owner |
Ordinary Shares |
% |
||||||
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Directors and Executive Officers |
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Lawrence Wai Lok |
82,300 | 0.97 | ||||||
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Kelvin Chun Yu |
Nil |
Nil |
||||||
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Joel A. Gallo |
1,083 | 0.01 | ||||||
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Chen Jie |
1,083 | 0.01 | ||||||
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Howard Chan |
Nil |
Nil |
||||||
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Geoffrey Kam |
Nil |
Nil |
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Principal Shareholders |
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The Raku Foundation (2) |
5,693,131 | 67.10 | ||||||
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Carmel Holdings Limited (2) |
5,693,131 | 67.10 | ||||||
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Grand Lead Group Limited (3) |
1,992,500 | 23.48 | ||||||
Notes:
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(1) |
For each person and entity included in this column, percentage ownership is calculated by dividing the number of ordinary shares beneficially owned by such person or entity by the sum of (i) 8,484,581 being the number of ordinary shares issued and outstanding as of June 30, 2026, and (ii) the number of shares such person or entity has the right to acquire within 60 days after June 30, 2026. |
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(2) |
Represents 5,693,131 ordinary shares held by Carmel Holdings Limited, a limited liability company incorporated in the British Virgin Islands that is wholly owned by The Raku Foundation, a Cayman Islands foundation company. On February 25, 2026, Mr. Lok completed an irrevocable transfer of all of the issued and outstanding equity interests in Carmel Holdings Limited to The Raku Foundation for succession and wealth planning purposes. Mr. Lok does not retain any economic or voting interest in The Raku Foundation. The registered address of The Raku Foundation is PO Box 897, Windward 1, Regatta Office Park, West Bay Road, Grand Cayman, KY1-1103, Cayman Islands. The registered address of Carmel Holdings Limited is Portcullis Chambers, 4th Floor, Ellen Skelton Building, 3076 Sir Francis Drake Highway, Road Town, Tortola, VG1110, British Virgin Islands. |
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(3) |
Represents 1,992,500 ordinary shares held by Grand Lead Group Limited, a company incorporated in the British Virgin Islands. To our knowledge, Grand Lead Group Limited is wholly owned and controlled by Mr. Han Hongwei, our former Chairman. |
For arrangements involving the issue or grant of options or shares or securities of the Company, please refer to “Item 6. Directors, Senior Management and Employees—B. Compensation.”
As of the date of this annual report, we are not aware of any other arrangement that may, at a subsequent date, result in a change of control of our company.
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F. |
Disclosure of a Registrant’s Action to Recover Erroneously Awarded Compensation |
Not applicable.
Item 7. Major Shareholders and Related Party Transactions
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A. |
Major Shareholders |
Please refer to “Item 6. Directors, Senior Management and Employees—E. Share Ownership.”
To our knowledge, other than as described below, there has been no significant change in the percentage ownership held by any of our major shareholders during the past three years. On March 17, 2025, we issued 112,000,000 ordinary shares (equivalent to 5,600,000 ordinary shares after giving effect to the Share Consolidation) to Carmel Holdings Limited, which was then wholly owned by Mr. Lawrence Wai Lok, our Chairman and Chief Executive Officer. On February 25, 2026, Mr. Lok transferred all of the equity interests in Carmel Holdings Limited to The Raku Foundation, as a result of which Mr. Lok ceased to be the beneficial owner of the ordinary shares held by Carmel Holdings Limited and The Raku Foundation became the beneficial owner of approximately 67.1% of our outstanding ordinary shares.
None of our major shareholders has voting rights that differ from those of our other shareholders.
To our knowledge, we are controlled by The Raku Foundation, which, through its wholly owned subsidiary Carmel Holdings Limited, holds approximately 67.1% of our outstanding ordinary shares and of the voting power in our company. See “Item 3. Key Information—D. Risk Factors—Risks Related to Our Business—Our controlling shareholder and our Chairman and Chief Executive Officer are able to exert significant influence over our Company, whose interests may differ from, or conflict with, those of our other shareholders.”
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B. |
Related Party Transactions |
Employment Agreements and Indemnification Agreements
See “Item 6. Directors, Senior Management and Employees—B. Compensation.”
Share Incentive Plans
See “Item 6. Directors, Senior Management and Employees—B. Compensation.”
Other Related Party Transactions
None.
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C. |
Interests of Experts and Counsel |
Not applicable.
Item 8. Financial Information
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A. |
Consolidated Statements and Other Financial Information |
Please refer to “Item 18. Financial Statements” for our audited consolidated financial statements filed as part of this annual report.
Legal Proceedings
We may from time to time be involved in litigation and claims incidental to the conduct of our business. Our businesses are also subject to extensive regulation, which may result in regulatory proceedings against us.
In March 2024, a securities class action was filed against the Company in the Supreme Court of New York in the County of New York (docket number: 152554/2024). The plaintiff complained that the registration statement and prospectus issued in the Company’s initial public offering in 2021 contained misleading or materially false information, and accused the Company of fraud, as a result of which investors suffered financial losses on their investments. The Company denied any wrongdoing, and vigorously defended itself against all allegations, and filed a motion to dismiss all claims asserted in the complaints. Subsequently, the Company reached a settlement with the plaintiff to dismiss all claims against the Company and agreed to pay US$1 million. The Company denied any wrongdoing and accepted the settlement solely for the purposes of eliminating the burden, expenses and uncertainties of litigation. In August 2025, a final judgment by the Court approved the settlement.
Except for the proceedings disclosed herein, we are not currently subject to any pending or, to our knowledge, threatened judicial, administrative, governmental or arbitration proceedings that we expect to have a material effect on our results of operations or financial condition, and none of our directors or members of senior management is a party adverse to us, or has a material interest adverse to us, in any material proceeding.
Dividend Policy
We did not declare or pay any dividend during the year ended June 30, 2026 and do not have any plan to pay any dividends on our ordinary shares in the foreseeable future. We intend to retain most, if not all, of our available funds and any future earnings to operate and expand our business.
Any future determination to pay dividends will be made at the discretion of our board of directors and may be based on a number of factors, including our future operations and earnings, capital requirements and surplus, general financial condition, contractual restrictions and other factors that the board of directors may deem relevant. Cash dividends on our ordinary shares, if any, will be paid in U.S. dollars.
We are an exempted company incorporated in the Cayman Islands. Under Cayman Islands law, a Cayman Islands company may pay a dividend on its shares out of either profit or the share premium account, provided that in no circumstances may a dividend be paid out of the share premium account if, immediately following the date on which the dividend is proposed to be paid, this would result in the company being unable to pay its debts as they fall due in the ordinary course of business. In order for us to distribute any dividends to our shareholders, we may rely on dividends distributed by our operating subsidiaries in Hong Kong and the United States. There are currently no foreign exchange controls or statutory restrictions in Hong Kong or the United States on the payment of dividends by our subsidiaries to us, other than applicable withholding taxes (including U.S. withholding tax on dividends paid by our U.S. subsidiaries) and general requirements of applicable corporate law relating to solvency and the availability of distributable profits or surplus.
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B. |
Significant Changes |
Except as disclosed elsewhere in this annual report, we have not experienced any significant changes since the date of our audited consolidated financial statements included in this annual report.
Item 9. The Offer and Listing
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A. |
Offering and Listing Details |
Our ordinary shares have been listed on the Nasdaq Capital Market under the symbol “BVC” since January 5, 2026. Prior to that date, our ADSs, each representing two ordinary shares (before giving effect to the Share Consolidation), were listed on the Nasdaq Global Market from March 26, 2021 under the symbol “HYW”, which was changed to “STEC” in July 2024 following the change of our name to Santech Holdings Limited, and were transferred to the Nasdaq Capital Market on December 5, 2024. Following the change of our name to BitVentures Limited, the trading symbol of our ADSs was changed to “BVC” effective December 24, 2025. On January 5, 2026, upon the effectiveness of the Share Consolidation and the termination of our ADR program, all outstanding ADSs were cancelled and exchanged for consolidated ordinary shares at the ratio of one consolidated ordinary share for every ten ADSs, and our consolidated ordinary shares were listed on the Nasdaq Capital Market in substitution for the ADSs. Other than routine, temporary trading pauses under Nasdaq’s volatility trading rules, there have been no significant trading suspensions of our securities during the three years preceding the date of this annual report.
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B. |
Plan of Distribution |
Not applicable.
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C. |
Markets |
Our ordinary shares are listed on the Nasdaq Capital Market under the symbol “BVC”.
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D. |
Selling Shareholders |
Not applicable.
|
E. |
Dilution |
Not applicable.
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F. |
Expenses of the Issue |
Not applicable.
Item 10. Additional Information
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A. |
Share Capital |
Not applicable.
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B. |
Memorandum and Articles of Association |
Corporate Objects
Under our third amended and restated memorandum of association, our objects are unrestricted and we have the full power and authority to carry out any object not prohibited by the laws of the Cayman Islands.
Board of Directors
See “Item 6. Directors, Senior Management and Employees—C. Board Practices.”
Material Terms of Ordinary Shares
The following are summaries of material provisions of our third amended and restated memorandum and articles of association and of the Companies Act, insofar as they relate to the material terms of our ordinary shares. For a description of our ordinary shares, see Exhibit 2.2.
Issuance of Shares and Changes to Capital
Subject to the rules of the Nasdaq Capital Market and any other stock exchange or interdealer quotation system on which our ordinary shares are listed or quoted, and subject to the provisions in our third amended and restated memorandum and articles of association, our board of directors has general and unconditional authority to allot, grant options over, offer or otherwise deal with or dispose of any unissued shares in our capital without the approval of our shareholders (whether forming part of the original or any increased share capital), either at a premium or at par, with or without preferred, deferred or other special rights or restrictions, whether in regard to dividend, voting, return of capital or otherwise and to such persons, on such terms and conditions, and at such times as the directors may decide, but so that no share shall be issued at a discount, except in accordance with the provisions of the Companies Act. We will not issue bearer shares.
We may, subject to the provisions of the Companies Act and our third amended and restated memorandum and articles of association and the SEC and Nasdaq rules, from time to time by shareholders resolution passed by a simple majority of the voting rights entitled to vote at a general meeting, increase our capital by such sum, to be divided into shares of such amounts, as the relevant resolution shall prescribe; consolidate and divide all or any of our share capital into shares of larger amount than our existing shares; convert all or any of its paid up shares into stock and reconvert that stock into paid up shares of any denomination; sub-divide our existing shares, or any of them, into shares of smaller amounts than is fixed pursuant to our third amended and restated memorandum and articles of association; and cancel any shares which at the date of the passing of the resolution have not been taken or agreed to be taken by any person, and diminish the amount of our share capital by the amount of the shares so cancelled.
We may also, subject to the provisions of the Companies Act, our third amended and restated memorandum and articles of association, the SEC and the Nasdaq Capital Market, issue shares on terms that they are to be redeemed or are liable to be redeemed; purchase our own shares (including any redeemable shares); and make a payment in respect of the redemption or purchase of our own shares in any manner authorized by the Companies Act, including out of our capital.
Dividends
Subject to the Companies Act, our shareholders may, by resolution passed by a simple majority of the voting rights entitled to vote at the general meeting, declare dividends (including interim dividends) to be paid to our shareholders but no dividend shall be declared in excess of the amount recommended by our board of directors. Dividends may be declared and paid out of funds lawfully available to us. Except as otherwise provided by the rights attached to shares, all dividends shall be declared and paid according to the amounts paid up on the shares on which the dividend is paid. All dividends shall be paid in proportion to the number of ordinary shares a shareholder holds during any portion or portions of the period in respect of which the dividend is paid; but, if any share is issued on terms providing that it shall rank for dividend as from a particular date, that share shall rank for dividend accordingly. Our board of directors may also declare and pay dividends and authorize payment of the same out of the funds of our Company lawfully available therefor.
In addition, our board of directors may resolve to capitalize any undivided profits not required for paying any preferential dividend (whether or not they are available for distribution) or any sum standing to the credit of our share premium account or capital redemption reserve; appropriate the sum resolved to be capitalized to the shareholders who would have been entitled to it if it were distributed by way of dividend and in the same proportions and apply such sum on their behalf either in or towards paying up the amounts, if any, for the time being unpaid on any shares held by them respectively, or in paying up in full unissued shares or debentures of a nominal amount equal to such sum, and allot the shares or debentures credited as fully paid to those shareholders, or as they may direct, in those proportions, or partly in one way and partly in the other; resolve that any shares so allotted to any shareholder in respect of a holding by him/her of any partly-paid shares rank for dividend, so long as such shares remain partly paid, only to the extent that such partly paid shares rank for dividend; make such provision by the issue of fractional certificates or by payment in cash or otherwise as they determine in the case of shares or debentures becoming distributable in fractions; and authorize any person to enter on behalf of all our shareholders concerned into an agreement with us providing for the allotment to them respectively, credited as fully paid, of any shares or debentures to which they may be entitled upon such capitalization, any agreement made under such authority being binding on all such shareholders.
Voting and Meetings
As a condition of admission to a shareholders’ meeting, a shareholder must be duly registered as our shareholder at the applicable record date for that meeting and all calls or installments then payable by such shareholder to us in respect of our ordinary shares must have been paid. Subject to any special rights or restrictions as to voting then attached to any shares, at any general meeting every shareholder who is present in person or by proxy (or, in the case of a shareholder being a corporation, by its duly authorized representative not being himself or herself a shareholder entitled to vote) shall have one vote per share.
As a Cayman Islands exempted company, we may but are not obliged by the Companies Act to call annual general meetings. Our third amended and restated memorandum and articles of association do not require us to hold an annual general meeting of shareholders either. Also, we may, but are not required to (unless required by the Companies Act), in each year hold any other extraordinary general meeting.
The Companies Act provides shareholders with only limited rights to requisition a general meeting, and does not provide shareholders with any right to put any proposal before a general meeting. However, these rights may be provided in a company’s articles of association. Our third amended and restated memorandum and articles of association provide that upon the requisition of shareholders representing not less than two-thirds, in par value of the issued shares which as at the relevant date carry the right to vote at general meetings, our board will convene an extraordinary general meeting and put the resolutions so requisitioned to a vote at such meeting. However, shareholders may propose only ordinary resolutions to be put to a vote at such meeting and shall have no right to propose resolutions with respect to the election, appointment or removal of directors or with respect to the size of the board. Our third amended and restated memorandum and articles of association provide no other right to put any proposals before annual general meetings or extraordinary general meetings. Subject to regulatory requirements, our annual general meeting and any extraordinary general meetings must be called by not less than five (5) clear days’ notice prior to the relevant shareholders meeting and convened by a notice discussed below. Alternatively, upon the prior consent of all holders entitled to attend and vote (with regard to an annual general meeting), and the holders of 95% in par value of the shares entitled to attend and vote (with regard to an extraordinary general meeting), that meeting may be convened by a shorter notice and in a manner deemed appropriate by those holders.
We will give notice of each general meeting of shareholders by publication on our website and in any other manner that we may be required to follow in order to comply with Cayman Islands law, Nasdaq and SEC requirements. The holders of registered shares may be convened for a shareholders’ meeting by means of letters sent to the addresses of those shareholders as registered in our shareholders’ register, or, subject to certain statutory requirements, by electronic means. We will observe the statutory minimum convening notice period for a general meeting of shareholders.
A quorum for a general meeting consists of shareholders holding not less than an aggregate of one-third in nominal value of our total issued voting shares entitled to vote upon the business to be transacted.
A resolution put to the vote of the meeting shall be decided on a poll. An ordinary resolution to be passed by the shareholders requires the affirmative vote of a simple majority of the votes cast by, or on behalf of, the shareholders entitled to vote present in person or by proxy and voting at the meeting. A special resolution requires the affirmative vote of no less than two-thirds of the votes cast by the shareholders entitled to vote who are present in person or by proxy at a general meeting (except for certain matters described below which require an affirmative vote of two-thirds). Both ordinary resolutions and special resolutions may also be passed by a unanimous written resolution signed by all the shareholders of our company, as permitted by the Companies Act and our third amended and restated memorandum and articles of association.
Our third amended and restated memorandum and articles of association provide that the affirmative vote of no less than two-thirds of votes cast by the shareholders entitled to vote who are present in person or by proxy at a general meeting shall be required to approve any amendments to any provisions of our third amended and restated memorandum and articles of association that relate to or have an impact upon the procedures regarding the election, appointment, removal of directors and size of the board.
Transfers of Shares
Subject to any applicable restrictions set forth in our third amended and restated memorandum and articles of association, any of our shareholders may transfer all or a portion of their ordinary shares by an instrument of transfer in the usual or common form or in the form prescribed by Nasdaq or in any other form which our board of directors may approve. Our board of directors may, in its absolute discretion, refuse to register a transfer of any ordinary share that is not a fully paid up share to a person of whom it does not approve, or any ordinary share issued under any share incentive scheme for employees upon which a restriction on transfer imposed thereby still subsists, and it may also, without prejudice to the foregoing generality, refuse to register a transfer of any ordinary share to more than four joint holders or a transfer of any share that is not a fully paid up share on which we have a lien. Our board of directors may also decline to register any transfer of any registered ordinary share unless: a fee of such maximum sum as Nasdaq may determine to be payable or such lesser sum as the board of directors may from time to time require is paid to us in respect thereof; the instrument of transfer is in respect of only one class of shares; the ordinary shares transferred are fully paid and free of any lien; the instrument of transfer is lodged at the registered office or such other place (i.e., our transfer agent) at which the register of shareholders is kept, accompanied by any relevant share certificate(s) and/or such other evidence as the board of directors may reasonably require to show the right of the transferor to make the transfer; and if applicable, the instrument of transfer is duly and properly stamped.
If our board of directors refuses to register a transfer, it is required, within one month after the date on which the instrument of transfer was lodged, to send to each of the transferor and the transferee notice of such refusal.
Liquidation
Subject to any special rights, privileges or restrictions as to the distribution of available surplus assets on liquidation applicable to any class or classes of shares (1) if we are wound up and the assets available for distribution among our shareholders are more than sufficient to repay the whole of the capital paid up at the commencement of the winding up, the excess shall be distributed pari passu among our shareholders in proportion to the amount paid up at the commencement of the winding up on the shares held by them, respectively, and (2) if we are wound up and the assets available for distribution among our shareholders as such are insufficient to repay the whole of the paid-up capital, those assets shall be distributed so that, as nearly as may be, the losses shall be borne by our shareholders in proportion to the capital paid up, or which ought to have been paid up, at the commencement of the winding up on the shares held by them, respectively.
If we are wound up, the liquidator may with the sanction of a special resolution and any other sanction required by the Companies Act, divide among our shareholders in specie the whole or any part of our assets and may, for such purpose, value any assets and determine how such division shall be carried out as between the shareholders or different classes of shareholders. The liquidator may also, with the sanction of a special resolution, vest any part of these assets in trustees upon such trusts for the benefit of our shareholders as the liquidator shall think fit, but so that no shareholder will be compelled to accept any assets, shares or other securities upon which there is a liability.
Anti-Takeover Provisions
Some provisions of our third amended and restated memorandum and articles of association may discourage, delay or prevent a change of control of our company or management that shareholders may consider favorable, including provisions that authorize our board of directors to issue preferred shares in one or more series and to designate the price, rights, preferences, privileges and restrictions of such preferred shares without any further vote or action by our shareholders.
Inspection of Books and Records
Holders of ordinary shares will have no general right under Cayman Islands law to inspect or obtain copies of our list of shareholders or our corporate records. However, our board of directors may determine from time to time whether our accounting records and books shall be open to the inspection of our shareholders not members of our board of directors. Notwithstanding the above, our third amended and restated memorandum and articles of association provide our shareholders with the right to receive annual audited financial statements. Such right to receive annual audited financial statements may be satisfied by filing such annual reports as we are required to file with the SEC.
Register of Shareholders
Under Cayman Islands law, we must keep a register of members that includes: the names and addresses of the members, a statement of the shares held by each member which (a) distinguishes each share by its number, so long as the share has a number; (b) confirms the amount paid or agreed to be considered as paid, on the shares of each member; (c) the number and category of shares held by each member; (d) confirming whether each relevant category of shares held by a member carries voting rights under our articles of association and if so, whether such voting rights are conditional, the date on which the name of any person was entered on the register as a member; and the date on which any person ceased to be a member.
Exempted Company
We are an exempted company with limited liability under the Companies Act. The Companies Act distinguishes between ordinary resident companies and exempted companies. Any company that is registered in the Cayman Islands but conducts business mainly outside of the Cayman Islands may apply to be registered as an exempted company. An exempted company:
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does not have to file an annual return of its shareholders with the Registrar of Companies in the Cayman Islands; |
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is not required to open its register of members for inspection; |
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does not have to hold an annual general meeting; |
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may issue shares with no par value; |
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may obtain an undertaking against the imposition of any future taxation for a period of up to 20 years; |
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may register by way of continuation in another jurisdiction and be deregistered in the Cayman Islands; |
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may register as a limited duration company; and |
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may register as a segregated portfolio company. |
“Limited liability” means that the liability of each shareholder is limited to the amount unpaid by the shareholder on the shares of the company (except in exceptional circumstances, such as involving fraud, the establishment of an agency relationship or an illegal or improper purpose or other circumstances in which a court may be prepared to pierce or lift the corporate veil).
Preferred Shares
Our board of directors is empowered to issue from time to time one or more classes or series of preferred shares and to fix the designations, powers, preferences and relative, participating, optional and other rights of each such class or series so authorized. Such action may adversely affect the voting power and other rights of the holders of our ordinary shares or could have the effect of discouraging any attempt by a person or group to obtain control of us.
Differences in Corporate Law
The Companies Act is modeled after that of England but does not follow recent English statutory enactments and differs from laws applicable to U.S. corporations and their shareholders. Set forth below is a summary of the significant differences between the provisions of the Companies Act applicable to us and the laws applicable to companies incorporated in the United States and their shareholders.
Mergers and Similar Arrangements. The Companies Act provides for the merger or consolidation of two or more companies into a single entity. The legislation makes a distinction between a “consolidation” and a “merger.” A consolidation involves the combination of two or more constituent companies into a consolidated company and the vesting of the undertaking, property and liabilities of such companies in the consolidated company, and a merger involves the merging of two or more constituent companies and the vesting of their undertaking, property and liabilities in one of such companies as the surviving company. Upon a merger or consolidation becoming effective, the Registrar of Companies in the Cayman Islands shall strike off the register (a) a constituent company that is not the surviving company in a merger; or (b) a constituent company that participates in a consolidation. Two or more Cayman-registered companies may merge or consolidate. Cayman-registered companies may also merge or consolidate with foreign companies provided that the laws of the foreign jurisdiction permit such merger or consolidation. A merger between a Cayman parent company and its Cayman subsidiary or subsidiaries does not require authorization by a resolution of shareholders of that Cayman subsidiary if a copy of the plan of merger is given to every member of that Cayman subsidiary to be merged unless that member agrees otherwise. For this purpose a subsidiary is a company of which at least ninety percent (90%) of the issued shares entitled to vote are owned by the parent company.
The consent of each holder of a fixed or floating security interest over a constituent company is required unless this requirement is waived by a court in the Cayman Islands upon application of the constituent company that has issued the security.
Save in certain circumstances, a dissentient shareholder of a Cayman constituent company is entitled to payment of the fair value of his shares upon dissenting to a merger or consolidation. The exercise of appraisal rights shall exclude the enforcement by the shareholder of any right to which that person might otherwise be entitled by virtue of that person holding shares save for the right to institute proceedings to obtain relief on the grounds that the merger or consolidation is void or unlawful.
In addition, there are statutory provisions that facilitate the reconstruction and amalgamation of companies by way of schemes of arrangement, provided that the arrangement is approved by (a) a majority in number of each class of creditors with whom the arrangement is to be made, and who must in addition represent three-fourths in value of each such class of creditors that are present and voting either in person or by proxy at a meeting, or meetings, convened for that purpose; or (b) shareholders representing three-fourths in value of each class of shareholders that are present and voting either in person or by proxy at a meeting, or meetings, convened for that purpose. The convening of the meetings and subsequently the arrangement must be sanctioned by the Grand Court of the Cayman Islands. While a dissenting shareholder has the right to express to the court the view that the transaction ought not to be approved, the court can be expected to approve the arrangement if it determines that:
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the statutory provisions as to the required majority vote have been met; |
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the shareholders have been fairly represented at the meeting in question and the statutory majority are acting bona fide without coercion of the minority to promote interests adverse to those of the class; |
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the arrangement is such that may be reasonably approved by an intelligent and honest man of that class acting in respect of his interest; and |
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the arrangement is not one that would more properly be sanctioned under some other provision of the Companies Act. |
When a takeover offer is made and accepted by holders of 90.0% of the shares within four months, the offeror may, within a two-month period commencing on the expiration of such four-month period, require the holders of the remaining shares to transfer such shares on the terms of the offer. An objection can be made to the Grand Court of the Cayman Islands.
If an arrangement and reconstruction is thus approved, the dissenting shareholder would have no rights comparable to appraisal rights, which would otherwise ordinarily be available to dissenting shareholders of Delaware corporations, providing rights to receive payment in cash for the judicially determined value of the shares.
Shareholders’ Suits. In principle, we will normally be the proper plaintiff and as a general rule a derivative action may not be brought by a minority shareholder. However, based on English authorities, which would in all likelihood be of persuasive authority in the Cayman Islands, there are exceptions to the foregoing principle, including when:
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a company acts or proposes to act illegally or ultra vires and is therefore incapable of ratification by the shareholder; |
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the act complained of, although not ultra vires, could only be effected duly if authorized by more than a simple majority vote that has not been obtained; |
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the act complained of purports to abridge or abolish the individual rights of a member; and those who control the company are perpetrating a “fraud on the minority.” |
Indemnification of Directors and Executive Officers and Limitation of Liability. Cayman Islands law does not limit the extent to which a company’s memorandum and articles of association may provide for indemnification of officers and directors, except to the extent any such provision may be held by the Cayman Islands courts to be contrary to public policy, such as to provide indemnification against the consequences of committing a crime, or against the indemnified person’s own fraud or dishonesty. This standard of conduct is generally the same as permitted under the Delaware General Corporation Law for a Delaware corporation.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers or persons controlling us under the foregoing provisions, we have been informed that in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.
Directors’ Fiduciary Duties. Under Delaware corporate law, a director of a Delaware corporation has a fiduciary duty to the corporation and its shareholders. This duty has two components: the duty of care and the duty of loyalty. The duty of care requires that a director act in good faith, with the care that an ordinarily prudent person would exercise under similar circumstances. Under this duty, a director must inform himself of, and disclose to shareholders, all material information reasonably available regarding a significant transaction. The duty of loyalty requires that a director act in a manner he reasonably believes to be in the best interests of the corporation. He must not use his corporate position for personal gain or advantage. This duty prohibits self-dealing by a director and mandates that the best interest of the corporation and its shareholders take precedence over any interest possessed by a director, officer or controlling shareholder and not shared by the shareholders generally. In general, actions of a director are presumed to have been made on an informed basis, in good faith and in the honest belief that the action taken was in the best interests of the corporation. However, this presumption may be rebutted by evidence of a breach of one of the fiduciary duties. Should such evidence be presented concerning a transaction by a director, the director must prove the procedural fairness of the transaction, and that the transaction was of fair value to the corporation.
As a matter of Cayman Islands law, directors of Cayman Islands companies owe fiduciary duties to their respective companies to, amongst other things, act in good faith in their dealings with or on behalf of the company and exercise their powers and fulfill the duties of their office honestly. Core duties are:
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a duty to act in good faith in what the directors bona fide consider to be the best interests of the company; |
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a duty not to personally profit from opportunities that arise from the office of director; |
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a duty not to put himself or herself in a position where the interests of the company conflict with his or her personal interest or his or her duty to a third party; and |
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a duty to exercise powers for the purpose for which such powers were conferred. |
Shareholder Action by Written Consent. Under the Delaware General Corporation Law, a corporation may eliminate the right of shareholders to act by written consent by amendment to its certificate of incorporation. Cayman Islands law and our third amended and restated memorandum and articles of association provide that shareholders may approve corporate matters by way of a unanimous written resolution signed by or on behalf of each shareholder who would have been entitled to vote on such matter at a general meeting without a meeting being held.
Shareholder Proposals. Under the Delaware General Corporation Law, a shareholder has the right to put any proposal before the annual meeting of shareholders, provided it complies with the notice provisions in the governing documents. A special meeting may be called by the board of directors or any other person authorized to do so in the governing documents, but shareholders may be precluded from calling special meetings.
The Companies Act provides shareholders with only limited rights to requisition a general meeting, and does not provide shareholders any right to put any proposal before a meeting. However, these rights may be provided in the company’s memorandum and articles of association.
Cumulative Voting. Under the Delaware General Corporation Law, cumulative voting for elections of directors is not permitted unless the corporation’s certificate of incorporation specifically provides for it. Cumulative voting potentially facilitates the representation of minority shareholders on a board of directors since it permits the minority shareholder to cast all the votes to which the shareholder is entitled on a single director, which increases the shareholder’s voting power with respect to electing such director. Under the laws of the Cayman Islands, there is no cumulative voting for the election of directors unless so provided in the memorandum and articles of association of a company.
Removal of Directors. Under the Delaware General Corporation Law, a director of a corporation with a classified board may be removed only for cause with the approval of a majority of the outstanding shares entitled to vote, unless the certificate of incorporation provides otherwise. Under our third amended and restated memorandum and articles of association, our Company may by ordinary resolution passed by shareholders appoint any person to be a director or may by ordinary resolution remove any director.
Transactions with Interested Shareholders. The Delaware General Corporation Law contains a business combination statute applicable to Delaware corporations whereby, unless the corporation has specifically elected not to be governed by such statute by amendment to its certificate of incorporation, it is prohibited from engaging in certain business combinations with an “interested shareholder” for three years following the date that such person becomes an interested shareholder. An interested shareholder generally is a person or a group who or which owns or owned 15% or more of the target’s outstanding voting share within the past three years. This has the effect of limiting the ability of a potential acquirer to make a two-tiered bid for the target in which all shareholders would not be treated equally. The statute does not apply if, among other things, prior to the date on which such shareholder becomes an interested shareholder, the board of directors approves either the business combination or the transaction which resulted in the person becoming an interested shareholder. This encourages any potential acquirer of a Delaware corporation to negotiate the terms of any acquisition transaction with the target’s board of directors.
Cayman Islands law has no comparable statute. As a result, we cannot avail ourselves of the types of protections afforded by the Delaware business combination statute. However, although Cayman Islands law does not regulate transactions between a company and its significant shareholders, it does provide that such transactions must be entered into bona fide in the best interests of the company and not with the effect of constituting a fraud on the minority shareholders.
Dissolution; Winding up. Under the Delaware General Corporation Law, unless the board of directors approves the proposal to dissolve, dissolution must be approved by shareholders holding 100% of the total voting power of the corporation. Only if the dissolution is initiated by the board of directors may it be approved by a simple majority of the corporation’s outstanding shares. Delaware law allows a Delaware corporation to include in its certificate of incorporation a supermajority voting requirement in connection with dissolutions initiated by the board.
Under Cayman Islands law, a company may be wound up by either an order of the courts of the Cayman Islands or by a special resolution of its members or, if the company is unable to pay its debts as they fall due, by an ordinary resolution of its members. The court has authority to order winding up in a number of specified circumstances including where it is, in the opinion of the court, just and equitable to do so.
Variation of Rights of Shares. Under the Delaware General Corporation Law, a corporation may vary the rights of a class of shares with the approval of a majority of the outstanding shares of such class, unless the certificate of incorporation provides otherwise. Under our third amended and restated memorandum and articles of association, if our share capital is divided into more than one class of shares, we may vary the rights attached to any class with the consent in writing of the holders of two-thirds of the issued shares of that class or with the sanction of a special resolution passed at a separate general meeting of the holders of the shares of that class.
Amendment of Governing Documents. Under the Delaware General Corporation Law, a corporation’s governing documents may be amended with the approval of a majority of the outstanding shares entitled to vote, unless the certificate of incorporation provides otherwise. As permitted by Cayman Islands law, our third amended and restated memorandum and articles of association may only be amended with a special resolution of our shareholders.
Rights of Non-resident or Foreign Shareholders. There are no limitations imposed by our third amended and restated memorandum and articles of association on the rights of non-resident or foreign shareholders to hold or exercise voting rights on our shares. In addition, there are no provisions in our third amended and restated memorandum and articles of association governing the ownership threshold above which shareholder ownership must be disclosed.
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Material Contracts |
Other than in the ordinary course of business and other than those described in “Item 4. Information on the Company” or “Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions” or elsewhere in this annual report, we have not entered into any material contract during the two years immediately preceding the date of this annual report.
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Exchange Controls |
Other than applicable taxation, anti-money laundering and counter-terrorist financing laws and regulations and economic sanctions which may be in force from time to time, there are no exchange control regulations or currency restrictions in the Cayman Islands, Hong Kong or the United States, or any provision of our memorandum and articles of association, that would prevent the transfer of capital or the remittance of dividends, interest and other payments to holders of the Company’s securities who are not residents of those jurisdictions on a general basis.
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Taxation |
The following summary of the material Cayman Islands, Hong Kong and U.S. federal income tax consequences of an investment in our ordinary shares is based upon laws and relevant interpretations thereof in effect as of the date of this annual report, all of which are subject to change. This summary does not deal with all possible tax consequences relating to an investment in our ordinary shares, such as the tax consequences under U.S. state and local tax laws or under the tax laws of jurisdictions other than the Cayman Islands, Hong Kong and the United States. To the extent that the discussion relates to matters of Cayman Islands tax law, it represents the opinion of Appleby, our counsel as to Cayman Islands law.
Cayman Islands Taxation
The Cayman Islands currently levies no taxes on individuals or corporations based upon profits, income, gains or appreciation and there is no taxation in the nature of inheritance tax or estate duty. There are no other taxes likely to be material to us levied by the government of the Cayman Islands except for stamp duties which may be applicable on instruments executed in, or, after execution, brought within the jurisdiction of the Cayman Islands. There are no exchange control regulations or currency restrictions in the Cayman Islands.
Pursuant to Section 6 of the Tax Concessions Act (as revised) of the Cayman Islands, we have obtained an undertaking from the Governor-in-Council:
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that no law which is enacted in the Cayman Islands imposing any tax to be levied on profits or income or gains or appreciation shall apply to us or our operations; and |
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that the aforesaid tax or any tax in the nature of estate duty or inheritance tax shall not be payable on our shares, debentures or other obligations. |
The undertaking for us is for a period of 20 years from August 8, 2019.
Certain U.S. Federal Income Tax Considerations
The following discussion is a summary of certain U.S. federal income tax considerations generally applicable to the ownership and disposition of our ordinary shares by a U.S. holder (as defined below) that holds our ordinary shares as “capital assets” (generally, property held for investment) under the U.S. Internal Revenue Code of 1986, as amended (“Code”). This discussion is based upon provisions of the Code and Treasury regulations, rulings and judicial interpretations thereof, in force as of the date hereof. Those authorities are subject to differing interpretations and may be changed, possibly with retroactive effect. No ruling has been sought from the Internal Revenue Service (“IRS”) with respect to any U.S. federal income tax consequences described below, and there can be no assurance that the IRS or a court will not take a contrary position. This discussion does not address all aspects of U.S. federal income taxation that may be important to particular investors in light of their individual circumstances, including investors subject to special tax rules (for example, certain financial institutions, insurance companies, broker-dealers, traders in securities that have elected the mark-to-market method of accounting for their securities, accrual method taxpayers subject to special tax accounting rules as a result of their use of financial statements, partnerships and their partners, controlled foreign corporations, passive foreign investment companies, regulated investment companies, real estate investment trusts, and tax-exempt organizations (including private foundations)), investors who are not U.S. holders, investors who own (directly, indirectly, or constructively) 10% or more of our stock by vote or value, investors that hold their ordinary shares as part of a straddle, hedge, conversion, constructive sale, or other integrated transaction for U.S. federal income tax purposes, or investors that have a functional currency other than the U.S. dollar, all of whom may be subject to tax rules that differ significantly from those summarized below. In addition, this discussion does not discuss any non-U.S., alternative minimum tax, state, or local tax or any non-income tax (such as the U.S. federal gift or estate tax) considerations, or the Medicare tax on net investment income. Each U.S. holder is urged to consult its tax advisor regarding the U.S. federal, state, local, and non-U.S. income and other tax considerations of an investment in our ordinary shares.
WE URGE POTENTIAL PURCHASERS OF OUR ORDINARY SHARES TO CONSULT THEIR OWN TAX ADVISORS CONCERNING THE U.S. FEDERAL, STATE, LOCAL AND NON-U.S. TAX CONSEQUENCES OF PURCHASING, OWNING AND DISPOSING OF OUR ORDINARY SHARES.
General
For purposes of this discussion, a “U.S. holder” is a beneficial owner of our ordinary shares that is, for U.S. federal income tax purposes, (i) an individual who is a citizen or resident of the United States, (ii) a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) created in, or organized under the laws of, the United States or any state thereof or the District of Columbia, (iii) an estate the income of which is subject to U.S. federal income taxation regardless of its source, or (iv) a trust (A) the administration of which is subject to the primary supervision of a U.S. court and which has one or more U.S. persons who have the authority to control all substantial decisions of the trust or (B) that has otherwise elected to be treated as a U.S. person under applicable U.S. Treasury regulations.
If a partnership (or other entity or arrangement treated as a partnership for U.S. federal income tax purposes) is a beneficial owner of our ordinary shares, the tax treatment of a partner in the partnership will generally depend upon the status of the partner and the activities of the partnership. Partnerships holding our ordinary shares and partners in such partnerships are urged to consult their tax advisors as to the particular U.S. federal income tax consequences of an investment in our ordinary shares.
Passive Foreign Investment Company Considerations
A non-U.S. corporation, such as our company, will be a “passive foreign investment company,” or “PFIC,” for U.S. federal income tax purposes, if, in any particular taxable year, either (i) 75% or more of its gross income for such year consists of certain types of “passive” income or (ii) 50% or more of the value of its assets (generally determined on the basis of a quarterly average) during such year produce or are held for the production of passive income. Cash is generally categorized as a passive asset. However, under recently proposed Treasury regulations, on which taxpayers may rely, an amount of cash held in a non-interest bearing financial account that is held for the present needs of an active trade or business and is no greater than the amount necessary to cover operating expenses incurred in the ordinary course of the trade or business and reasonably expected to be paid within 90 days is generally not treated as a passive asset. The company’s goodwill and other unbooked intangibles associated with active business activities may generally be classified as active assets. Passive income generally includes, among other things, dividends, interest, rents, royalties, and gains from the disposition of passive assets.
We will be treated as owning a proportionate share of the assets and earning a proportionate share of the income of any other corporation if we own, directly or indirectly, at least 25% (by value) of such other corporation’s stock.
We may be or become a PFIC in the current taxable year. However, no assurance can be given that our Company will or will not be considered a PFIC in the current or any future taxable year. Our Company’s possible status as a PFIC must be determined for each year and cannot be determined until the end of each taxable year. Because this determination is made annually at the end of each taxable year and is dependent upon a number of factors, some of which are beyond our Company’s control, including the amount and nature of our Company’s income and assets, as well as on the market valuation of our Company’s assets, including goodwill, and because certain aspects of the PFIC rules are not entirely certain, there can be no assurance that our Company is or is not a PFIC or that the IRS will agree with our conclusion regarding our PFIC status. If we are a PFIC for any year during which a U.S. holder holds our ordinary shares, we generally will continue to be treated as a PFIC for all succeeding years during which such U.S. holder holds our ordinary shares.
The U.S. federal income tax rules that apply if we are a PFIC for the current taxable year or any subsequent taxable year are generally discussed below under “Passive Foreign Investment Company Rules.”
Dividends
Subject to the PFIC rules discussed below, any cash distributions paid on our ordinary shares (including the amount of any tax withheld) out of our current or accumulated earnings and profits, as determined under U.S. federal income tax principles, will generally be includible in the gross income of a U.S. holder as dividend income on the day actually or constructively received by the U.S. holder. Because we do not intend to determine our earnings and profits on the basis of U.S. federal income tax principles, we will generally report any distribution paid as a dividend for U.S. federal income tax purposes. Dividends received on the ordinary shares will not be eligible for the dividends received deduction allowed to corporations.
Subject to the PFIC rules described below, individuals and other non-corporate U.S. holders will generally be subject to tax at the lower capital gain tax rate applicable to “qualified dividend income,” provided that certain conditions are satisfied, including that (1) our ordinary shares are readily tradable on an established securities market in the United States or we are eligible for the benefits of certain applicable U.S. treaties, (2) we are neither a PFIC nor treated as such with respect to a U.S. holder (as discussed below) for the taxable year in which the dividend was paid and the preceding taxable year, and (3) certain holding period requirements are met. If the requirements of the immediately preceding sentence are not satisfied, a dividend paid by us to a U.S. holder, including a U.S. holder that is an individual, estate, or trust, generally will be taxed at ordinary income tax rates (and not at the preferential tax rates applicable to long-term capital gains). Because our ordinary shares are listed on the Nasdaq Capital Market and are therefore expected to be considered readily tradable on an established securities market in the United States, we expect to be a qualified foreign corporation with respect to dividends paid on our ordinary shares. There can be no assurance that our ordinary shares will continue to be considered readily tradable on an established securities market in later years. The dividend rules are complex. Each non-corporate U.S. holder is advised to consult its tax advisors regarding the availability of the reduced tax rate applicable to qualified dividend income for any dividends we pay with respect to our ordinary shares.
Dividends generally will be treated as income from foreign sources for U.S. foreign tax credit purposes and generally will constitute passive category income which is treated separately from other types of income for purposes of computing the foreign tax credit allowable to you. The rules governing the foreign tax credit are complex. U.S. holders are advised to consult their tax advisors regarding the availability of the foreign tax credit under their particular circumstances.
Sale or Other Disposition of Ordinary Shares
Subject to the PFIC rules discussed below, a U.S. holder generally will recognize capital gain or loss upon the sale or other disposition of ordinary shares in an amount equal to the difference between the amount realized upon the disposition and the U.S. holder’s adjusted tax basis in such ordinary shares. Any capital gain or loss will be long-term if the ordinary shares have been held for more than one year and generally will be U.S. source gain or loss for U.S. foreign tax credit purposes. Long-term capital gains of individuals and other non-corporate U.S. holders generally are eligible for a reduced rate of taxation. The deductibility of a capital loss may be subject to limitations.
U.S. holders are advised to consult their tax advisors regarding the tax consequences if a foreign tax is imposed on a disposition of our ordinary shares, including the availability of the foreign tax credit under their particular circumstances and the effects of any applicable income tax treaties.
Passive Foreign Investment Company Rules
If we are a PFIC for any taxable year during which a U.S. holder holds our ordinary shares, and unless the U.S. holder makes certain elections, such as a mark-to-market election (as described below), the U.S. holder will generally be subject to special tax rules that have a penalizing effect, regardless of whether we remain a PFIC, for subsequent taxable years, on (i) any excess distribution that we make to the U.S. holder (which generally means any distribution paid during a taxable year to a U.S. holder that is greater than 125% of the average annual distributions paid in the three preceding taxable years or, if shorter, the U.S. holder’s holding period for the ordinary shares), and (ii) any gain realized on the sale or other disposition, including, under certain circumstances, a pledge, of ordinary shares. Under the PFIC rules:
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such excess distribution and/or gain will be allocated ratably over the U.S. holder’s holding period for the ordinary shares; |
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such amount allocated to the current taxable year and any taxable years in the U.S. holder’s holding period prior to the first taxable year in which we are a PFIC, or pre-PFIC year, will be taxable as ordinary income; |
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such amount allocated to each prior taxable year, other than a pre-PFIC year, will be subject to tax at the highest tax rate in effect for that year; and |
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an interest charge generally applicable to underpayments of tax will be imposed on the tax attributable to each prior taxable year, other than a pre-PFIC year. |
If we are a PFIC for any taxable year during which a U.S. holder holds our ordinary shares and any of our non-U.S. subsidiaries is also a PFIC, such U.S. holder would be treated as owning a proportionate amount (by value) of the shares of the lower tier PFIC for purposes of the application of these rules. U.S. holders are advised to consult their tax advisors regarding the application of the PFIC rules to any of our subsidiaries.
As an alternative to the foregoing rules, a U.S. holder of “marketable stock” in a PFIC may make a mark-to-market election with respect to our ordinary shares, provided that the ordinary shares are regularly traded on the Nasdaq Capital Market. Because a mark-to-market election cannot be made for any lower-tier PFICs that a PFIC may own, a U.S. holder who makes a mark-to-market election with respect to our ordinary shares will generally continue to be subject to the foregoing rules with respect to such U.S. holder’s indirect interest in any investments held by us that are treated as an equity interest in a PFIC for U.S. federal income tax purposes.
If a U.S. holder makes a mark-to-market election with respect to our ordinary shares, the U.S. holder generally will (i) include as ordinary income for each taxable year that we are a PFIC the excess, if any, of the fair market value of ordinary shares held at the end of the taxable year over the adjusted tax basis of such ordinary shares and (ii) deduct as an ordinary loss the excess, if any, of the adjusted tax basis of the ordinary shares over the fair market value of such ordinary shares held at the end of the taxable year, but only to the extent of the net amount previously included in income as a result of the mark-to-market election. The U.S. holder’s adjusted tax basis in the ordinary shares would be adjusted to reflect any income or loss resulting from the mark-to-market election. Further, in each year that we are a PFIC any gain recognized upon the sale or other disposition of the ordinary shares will be treated as ordinary income and loss will be treated as ordinary loss, but only to the extent of the net amount previously included in income as a result of the mark-to-market election. If a U.S. holder makes a mark-to-market election it will be effective for the taxable year for which the election is made and all subsequent taxable years unless the ordinary shares are no longer regularly traded on a qualified exchange or the IRS consents to the revocation of the election.
If a U.S. holder makes a mark-to-market election in respect of a PFIC and such corporation ceases to be a PFIC, the U.S. holder will not be required to take into account the mark-to-market gain or loss described above during any period that such corporation is not a PFIC.
We do not intend to provide information necessary for U.S. holders to make qualified electing fund elections, which, if available, would result in tax treatment different from (and generally less adverse than) the general tax treatment for PFICs described above.
If a U.S. holder owns our ordinary shares during any taxable year that we are a PFIC, such holder would generally be required to file an annual IRS Form 8621. Each U.S. holder is advised to consult its tax advisors as to our status as a PFIC, and, if we are treated as a PFIC, as to the potential tax consequences to such holder if we are or become a PFIC, including the possibility of making a mark-to-market election.
Information Reporting and Backup Withholding
Dividend payments with respect to our ordinary shares and proceeds from the sale, exchange or redemption of our ordinary shares may be subject to information reporting to the IRS and possible U.S. backup withholding. A U.S. holder may be eligible for an exemption from backup withholding if the U.S. holder furnishes a correct taxpayer identification number and makes any other required certification or is otherwise exempt from backup withholding. U.S. holders who are required to establish their exempt status may be required to provide such certification on IRS Form W-9. U.S. holders should consult their tax advisors regarding the application of the U.S. information reporting and backup withholding rules.
Backup withholding is not an additional tax. Amounts withheld as backup withholding may be credited against a U.S. holder’s U.S. federal income tax liability, and such U.S. holder may obtain a refund of any excess amounts withheld under the backup withholding rules by timely filing an appropriate claim for refund with the IRS and furnishing any required information.
Additional Information Reporting Requirements
Certain U.S. holders who are individuals (and certain entities) that hold an interest in “specified foreign financial assets” (which may include our ordinary shares) are required to report information relating to such assets, subject to certain exceptions (including an exception for ordinary shares held in accounts maintained by certain financial institutions). Penalties can apply if U.S. holders fail to satisfy such reporting requirements. U.S. holders should consult their tax advisors regarding the applicability of these requirements to their acquisition and ownership of our ordinary shares.
Hong Kong Taxation
Our wholly-owned Hong Kong subsidiaries are subject to Hong Kong profits tax on their activities conducted in Hong Kong. Effective for tax years ending on or after December 31, 2018, the applicable tax rate is 8.25% on the first HK$2.0 million of assessable profits and 16.5% on any assessable profits above that threshold. In addition, the 8.25% tax rate can only be utilized by one entity in a controlled group, while all other entities in the controlled group utilize the 16.5% tax rate. Dividends from our Hong Kong subsidiaries to the Company are exempt from Hong Kong withholding tax.
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F. |
Dividends and Paying Agents |
Not applicable.
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G. |
Statement by Experts |
Not applicable.
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H. |
Documents on Display |
We previously filed a registration statement on Form F-1 (Registration No. 333-253591) with the SEC to register the issuance and sale of our ordinary shares represented by ADSs in our initial public offering, and a registration statement on Form F-6 (Registration No. 333-254412) with the SEC to register the ADSs. Our ADS program was terminated on January 5, 2026, and our ordinary shares are registered under Section 12(b) of the Exchange Act.
We are subject to periodic reporting and other informational requirements of the Exchange Act as applicable to foreign private issuers, and are required to file reports and other information with the SEC. Specifically, we are required to file annually an annual report on Form 20-F within four months after the end of each fiscal year, which is June 30, and are required to furnish reports on Form 6-K. All information filed with and furnished to the SEC can be obtained over the internet at the SEC’s website at www.sec.gov. As a foreign private issuer, we are exempt from the rules under the Exchange Act requiring the filing of quarterly reports and proxy statements, and our officers, directors and principal shareholders are exempt from the short-swing profit recovery provisions of Section 16(b) of the Exchange Act, although our directors and officers have been required, since March 18, 2026, to file reports of their ownership of, and transactions in, our securities under Section 16(a) of the Exchange Act.
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I. |
Subsidiary Information |
Not applicable.
Item 11. Quantitative and Qualitative Disclosures about Market Risk
Credit Risk
Financial instruments that potentially subject us to significant concentrations of credit risk consist primarily of cash and cash equivalents and debt securities held to maturity. As of June 30, 2026, most of our cash and cash equivalents and debt securities were held by major financial institutions located in Hong Kong and the United States. We believe that these financial institutions located in Hong Kong and the United States are of high credit quality. For accounts receivable, short-term loan receivables, and deposit to suppliers, we typically extend credit based on an evaluation of the customer’s or other parties’ financial condition, generally without requiring collateral or other security. In order to minimize the credit risk, we have dedicated staff responsible for credit approvals and other monitoring procedures to ensure that follow-up action is taken to recover overdue debts. Further, we review the recoverable amount of each individual receivable at each balance sheet date to ensure that adequate allowances are made for doubtful accounts. In this regard, we consider that our credit risk for accounts receivable and deposit to suppliers is significantly reduced.
Customer Concentration Risk
For the year ended June 30, 2026, three customers accounted for 58%, 0% and 0% of our total revenues from continuing operations. There is no revenue from continuing operations generated for the year ended June 30, 2025. For the year ended June 30, 2024, three customers accounted for 73%, 27% and 0% of our total revenues from continuing operations. No other customer accounted for more than 10% of our revenue for the years ended June 30, 2024, 2025 and 2026, respectively.
Liquidity Risk
We are exposed to liquidity risk, which is the risk that we will be unable to provide sufficient capital resources and liquidity to meet our commitments and business needs. Liquidity risk is controlled by the application of financial position analysis and monitoring procedures. When necessary, we will turn to other financial institutions to obtain short-term funding to meet the liquidity shortage, or raise additional capital via equity offerings.
Interest Rate Risk
We have not been exposed to material risks due to changes in market interest rates, and we have not used any derivative financial instruments to manage our interest risk exposure.
We do not expect rising or falling interest rates to have a material impact on our financial condition unless uncertainty about the direction and timing of interest rate changes materially affects the level of borrowing and lending activity in the economy.
We may invest in interest-earning instruments. Investments in both fixed rate and floating rate interest earning instruments carry a degree of interest rate risk. Fixed rate securities may have their fair market value adversely impacted due to a rise in interest rates, while floating rate securities may produce less income than expected if interest rates fall.
Foreign Currency Risk
Substantially all of our operating activities and our assets and liabilities are denominated in either Hong Kong dollars or U.S. dollars. Since 1983, the Hong Kong dollar has been pegged to the U.S. dollar at the rate of approximately HK$7.80 to US$1.00. There is no assurance that Hong Kong’s currency pegging policy will not be changed in the future. If the pegging system changes or if Hong Kong dollars suffer devaluation, our business, financial condition and results of operations could be materially and adversely affected.
Item 12. Description of Securities Other than Equity Securities
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A. |
Debt Securities |
Not applicable.
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B. |
Warrants and Rights |
Not applicable.
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C. |
Other Securities |
Not applicable.
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D. |
American Depositary Shares |
Not applicable. Our ADS program was terminated, and all outstanding ADSs were cancelled, on January 5, 2026, when our ordinary shares were listed on the Nasdaq Capital Market in substitution for the ADSs.
PART II
Item 13. Defaults, Dividend Arrearages and Delinquencies
None.
Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds
Material Modifications to the Rights of Security Holders
On December 19, 2025, our shareholders approved at an extraordinary general meeting (i) the Share Consolidation, pursuant to which every twenty issued and unissued ordinary shares of par value US$0.0001 each were consolidated into one ordinary share of par value US$0.0020 each, (ii) the adoption of our third amended and restated memorandum and articles of association and (iii) the change of our name to BitVentures Limited. On January 5, 2026, the Share Consolidation became effective, our ADS program was terminated, all outstanding ADSs were cancelled in exchange for consolidated ordinary shares and our ordinary shares were listed on the Nasdaq Capital Market in substitution for the ADSs. See “Item 4. Information on the Company—A. History and Development of the Company,” “Item 9. The Offer and Listing” and “Item 10. Additional Information—B. Memorandum and Articles of Association.” Other than as described above, there were no material modifications to the rights of our security holders during the fiscal year ended June 30, 2026.
Use of Proceeds
The following “Use of Proceeds” information relates to the registration statement on Form F-1 for our initial public offering (File Number 333-253591), which was declared effective by the SEC on March 25, 2021. Our initial public offering closed in March 2021. Network 1 Financial Securities, Inc., Alexander Capital L.P. and Valuable Capital Limited were the underwriters for our initial public offering. We offered and sold an aggregate of 3,000,000 ADSs (each representing two ordinary shares) at an initial public offering price of US$10.00 per ADS, taking into account the ADSs sold upon the exercise of the over-allotment option by our underwriters. We raised US$28.0 million in net proceeds from our initial public offering after deducting underwriting commissions and discounts and the offering expenses payable by us.
For the period from the effective date of the registration statement to June 30, 2026, the total expenses incurred for our company’s account in connection with our initial public offering were US$2.0 million, which included US$1.7 million in underwriting discounts and commissions for the initial public offering and US$0.3 million in other costs and expenses for our initial public offering. None of the transaction expenses included payments to directors or officers of our company or their associates, persons owning 10% or more of our equity securities or our affiliates. None of the net proceeds from the initial public offering were paid, directly or indirectly, to any of our directors or officers or their associates, persons owning 10% or more of our equity securities or our affiliates.
For the period from March 25, 2021, the date that the registration statement was declared effective by the SEC, to June 30, 2026, we have used net proceeds from our initial public offering for working capital and general corporate purposes, and prior to June 30, 2024, to grow our asset management service business and wealth management service business in China in the amount of US$19.6 million approximately. We have been placing the rest of our net proceeds into short-term interest-bearing deposits with licensed banks. Based on our ongoing reevaluation of the changing business environment, we may deploy portions of the net proceeds for additional purposes, such as growing our digital assets and e-commerce segments, and developing or acquiring new businesses in the technology sector.
Item 15. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management, under the supervision and with the participation of our chief executive officer and principal financial officer, carried out an evaluation of the effectiveness of our disclosure controls and procedures as of June 30, 2026. As defined in Rule 13a-15(e) of the Exchange Act, the term disclosure controls and procedures means controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our chief executive officer and principal financial officer as appropriate to allow timely decisions regarding required disclosures.
Based upon that evaluation, our chief executive officer and principal financial officer have concluded that, as of the end of the period covered by this annual report, our disclosure controls and procedures were not effective as of June 30, 2026, due to the material weaknesses in our internal control over financial reporting described below.
Management’s Annual Report on Internal Control over Financial Reporting and Attestation Report of the Registered Public Accounting Firm
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is a process designed under the supervision of our chief executive officer and principal financial officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP.
Our management, with the participation of our chief executive officer and principal financial officer, assessed the effectiveness of our internal control over financial reporting as of June 30, 2026 based on the criteria established in the Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, our management concluded that, as of June 30, 2026, our internal control over financial reporting was not effective, due to the material weaknesses described below under “—Internal Control over Financial Reporting.”
This annual report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting because, as a non-accelerated filer, we are not subject to the auditor attestation requirement under Section 404(b) of the Sarbanes-Oxley Act.
Internal control over financial reporting has inherent limitations and may not prevent or detect misstatements. Also, projection of any evaluation of effectiveness to future periods is subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with policies and procedures may deteriorate.
Internal Control over Financial Reporting
In the course of preparing our consolidated financial statements, we identified the following material weaknesses, certain of which were first identified before we became a public company in March 2021, and had been in place for the years ended June 30, 2025 and 2026. As defined in the standards established by the U.S. Public Company Accounting Oversight Board, a “material weakness” is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis.
The material weaknesses identified related to (i) our lack of sufficient resources with U.S. GAAP and SEC reporting experience in the accounting department to provide accurate information in a timely manner; (ii) our lack of key monitoring mechanisms such as internal audit department to oversee and monitor our risk management, business strategies and financial reporting procedures; and (iii) our lack of inventory aging monitoring mechanisms, leading to inability to track the slow-moving and obsolete inventories, and potential understatement of the provision of inventories.
Our independent registered public accounting firm has not performed an audit of our internal control over financial reporting. Had our independent registered public accounting firm performed an audit of our internal control over financial reporting, additional material weaknesses may have been identified.
To remediate the material weaknesses identified in internal control over our financial reporting, we have: (a) hired experienced personnel in our accounting department with adequate experience with financial reporting and compliance requirements; (b) continued our efforts to provide ongoing training courses in U.S. GAAP to existing personnel, including our Principal Financial Officer; (c) continued our efforts to enhance the effectiveness of our internal control over financial reporting by increasing technology adoption, reducing reliance on paper records or single personnel, and migrating our internal processes to cloud-based software systems that are suitable for U.S. reporting companies, which we believe will enhance areas such as inventory management, document retention, transaction approvals, and automation in financial reporting. The implementation of these measures may not fully address the material weaknesses identified in our internal control over financial reporting and we cannot conclude that they have been fully remedied.
Changes in Internal Control over Financial Reporting
The changes in our internal control over financial reporting that occurred during the period covered by this annual report on Form 20-F that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting are described above.
Item 16A. Audit Committee Financial Expert
Our board of directors has determined that Ms. CHEN Jie, a member of our audit committee and an independent director (under the standards set forth in Rule 5605(c)(2) of the Nasdaq Stock Market Rules and Rule 10A-3 under the Securities Exchange Act of 1934), is an audit committee financial expert as defined in Item 16A of Form 20-F.
Item 16B. Code of Ethics
Our board of directors has adopted a code of business conduct and ethics that applies to our directors, officers and employees. Certain provisions of our code of business conduct and ethics apply specifically to our chief executive officer, chief financial officer, other chief officers, senior financial officer, controller, senior vice presidents, vice presidents and any other persons who perform similar functions for us. We have posted a copy of our code of business conduct and ethics on our website at https://ir.bitventures.io/corporate/corporate-governance. The information contained on our website is not included in, or incorporated by reference into, this annual report on Form 20-F.
Item 16C. Principal Accountant Fees and Services
The following table sets forth the aggregate fees by categories specified below in connection with certain professional services rendered by Audit Alliance LLP, our principal external auditors for the fiscal years ended June 30, 2026, 2025 and 2024.
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For the years ended June 30, |
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2024 |
2025 |
2026 |
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US$ |
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Audit fees (1) |
555,000 | 120,000 | 140,000 | |||||||||
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Audit-related fees (2) |
Nil |
30,000 | 27,000 | |||||||||
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Tax fees (3) |
Nil |
Nil |
Nil |
|||||||||
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All other fees (4) |
Nil |
Nil |
Nil |
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(1) |
“Audit fees” means the aggregate fees billed in each of the fiscal years listed for professional services rendered by our principal auditors for the audit of our annual financial statements and assistance with and review of documents filed or furnished with the SEC, including interim earnings releases. |
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(2) |
“Audit-related fees” means the aggregate fees billed in each of the fiscal years listed for professional services rendered by our principal auditors associated with certain permissible services that are reasonably related to the performance of the audit or review of our financial statements and are not reported under “audit fees.” |
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(3) |
“Tax fees” means the aggregate fees billed in each of the fiscal years listed for professional services rendered by our principal auditors associated with certain permitted tax compliance, tax advice and tax planning services. |
|
(4) |
“All other fees” means the aggregate fees billed in each of the fiscal years listed for professional services rendered by our principal auditors associated with certain permissible services to review and comment on internal control design over financial reporting and other advisory services. |
The policy of our audit committee is to pre-approve all audit and non-audit services provided by the principal external auditors, including audit services, audit-related services, tax services and other services as described above, other than those for de minimis services which are approved by the audit committee prior to the completion of the audit.
Item 16D. Exemptions from the Listing Standards for Audit Committees
Not applicable.
Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers
None.
Item 16F. Change in Registrant’s Certifying Accountant
The information required by this item with respect to the dismissal of Marcum Asia CPAs LLP and the engagement of Audit Alliance LLP as our independent registered public accounting firm, effective November 15, 2024, was previously reported in our annual report on Form 20-F for the fiscal year ended June 30, 2024, filed with the SEC on May 13, 2025.
Item 16G. Corporate Governance
As a Cayman Islands company with securities listed on the Nasdaq Capital Market, we are subject to the Nasdaq Stock Market Rules. However, the Nasdaq Stock Market Rules permit a foreign private issuer like us to follow the corporate governance practices of its home country in lieu of certain provisions applicable to U.S. domestic public companies. Certain corporate governance practices in the Cayman Islands, which is our home country, differ significantly from the Nasdaq listing standards. Our current corporate governance practices differ from Nasdaq corporate governance requirements for U.S. companies in certain respects, as summarized below:
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● |
Composition of Board. Nasdaq Rule 5605(b)(1) requires a Nasdaq listed company to have a majority of the board be independent. In this regard, we have elected to adopt the practices of our home country, the Cayman Islands, which practices do not require a majority independent board. |
|
● |
Under Nasdaq Capital Market standards, a listed company must have an audit committee of at least 3 members of the Board and be comprised only of independent directors. The Cayman Islands does not require a publicly traded company to establish such committee. We have established an audit committee, consisting of three independent directors, Ms. Chen Jie, Mr. Joel A. Gallo and Mr. Howard Chan. |
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● |
Under Nasdaq Capital Market standards, a listed company must have a compensation committee composed only of independent directors. The Cayman Islands does not require a publicly traded company to establish such committee. As a foreign private issuer, we intend to follow our home country practice and will not establish a compensation committee composed only of independent directors. We have established a remuneration committee, consisting of our Chairman, Mr. Lawrence Wai Lok, and two independent directors, Mr. Howard Chan and Mr. Geoffrey Kam. |
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● |
Under Nasdaq Capital Market standards, a listed company must have a nominating/corporate governance committee composed only of independent directors. The Cayman Islands does not require a publicly traded company to establish such committees. As a foreign private issuer, we intend to follow our home country practice and will not establish a nominating/corporate governance committee. |
Our shareholders may be afforded less protection than they would otherwise enjoy under the Nasdaq corporate governance listing standards applicable to U.S. domestic issuers. See “Item 3. Key Information—D. Risk Factors—Risks Related to Our Ordinary Shares—As a company incorporated in the Cayman Islands, we are permitted to adopt certain home country practices in relation to corporate governance matters in lieu of the corporate governance listing standards applicable to U.S. domestic issuers, which home country practices may afford comparatively less protection to shareholders.”
Item 16H. Mine Safety Disclosure
Not applicable.
Item 16I. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
Item 16J. Insider Trading Policies
We have
Item 16K. Cybersecurity
PART III
Item 17. Financial Statements
We have elected to provide financial statements pursuant to Item 18.
Item 18. Financial Statements
The audited consolidated financial statements of us and our subsidiaries are included at the end of this annual report.
Item 19. Exhibits
EXHIBIT INDEX
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Exhibit |
Description of Document |
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1.1 |
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2.1* |
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2.2* |
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4.1 |
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4.2 |
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4.3* |
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8.1* |
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11.1* |
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12.1* |
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12.2* |
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13.1** |
| Exhibit | Description of Document |
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13.2** |
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15.1* |
Consent of Audit Alliance LLP, independent registered public accounting firm |
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15.2* |
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97.1* |
Policy on Recoupment of Incentive Compensation (Compensation Clawback Policy) of the Registrant |
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101.INS* |
Inline XBRL Instance Document—this instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document |
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101.SCH* |
Inline XBRL Taxonomy Extension Schema Document |
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101.CAL* |
Inline XBRL Taxonomy Extension Calculation Linkbase Document |
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101.DEF* |
Inline XBRL Taxonomy Extension Definition Linkbase Document |
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101.LAB* |
Inline XBRL Taxonomy Extension Label Linkbase Document |
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101.PRE* |
Inline XBRL Taxonomy Extension Presentation Linkbase Document |
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104* |
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
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* |
Filed with this Annual Report on Form 20-F. |
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** |
Furnished with this Annual Report on Form 20-F. |
SIGNATURES
The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.
| Date: October 16, 2026 |
BitVentures Limited |
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By: |
/s/ Lawrence Wai LOK |
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Name: |
Lawrence Wai LOK |
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Title: |
Chairman and CEO |
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BITVENTURES LTD.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
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CONTENTS |
PAGES |
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (PCAOB ID: |
F-1 |
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CONSOLIDATED BALANCE SHEETS AS OF JUNE 30, 2025 AND 2026 |
F-5 |
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CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME FOR THE YEARS ENDED JUNE 30, 2024, 2025 AND 2026 |
F-6 |
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CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY FOR THE YEARS ENDED JUNE 30, 2024, 2025 AND 2026 |
F-7 |
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CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED JUNE 30, 2024, 2025 AND 2026 |
F-8 |
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
F-9 |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Shareholders
of BitVentures Ltd.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of BitVentures Ltd. and its subsidiaries (the “Company”) as of June 30, 2025 and 2026, the related consolidated statements of operations and comprehensive (loss) income, changes in shareholders’ equity, and cash flows for each of the years ended June 30, 2024, 2025 and 2026, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2025 and 2026, and the results of its operations and its cash flows for each of the years ended June 30, 2024, 2025 and 2026, in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current-period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Completeness of revenue recognition
As described in Note 2(o) to the consolidated financial statements, management applies FASB Topic 606, Revenue from Contracts with Customers (“ASC 606”) to recognize revenue. Management recognizes revenue upon the collection of introduction fees from insurance brokers, insurance companies or commercial banks by referring clients to insurance brokers, insurance companies or banks to purchase insurance products offered by insurance companies and wealth management products offered by banks. Management recognize revenue upon the collection of introduction fees through bank statement or other payment mode by only referral potential customers with no further performance obligation required to be satisfied.
The principal considerations for our determination that performing procedures over the full completion of revenue recognition is a critical audit matter. For wealth management fee and asset management fee, this in turn led to significant effort in performing our audit procedures which were designed to evaluate whether the matched collection of introduction fee, the timing of revenue recognition and the subsequent collections of our customers were appropriately identified and accounted for by management under ASC 606.
Accuracy of revenue recognition in relating to transaction price
As described in Note 2(o) to the consolidated financial statements, for wealth management service, management has minimal monitoring measures and control throughout all stages of referring process and has no access right to obtain the detailed information of matched subscription agreements or related documents. For asset management fee, management has minimized control of service provider process, and has no access to respective fund contract (mandate agreement) and mandate particular portfolio management report, to ensure the transaction price which is either as a percentage of the total investments made by the investors or as a percentage of the fair value of the fund’s or mandate’s net assets.
The principal consideration for our determination that performing procedures over the transaction price accuracy is a critical audit matter. This in turn led to significant effort in performing our audit procedures which were designed to evaluate whether the contractual terms, examining the particular transaction price and commission rate were appropriately identified and accounted for by management under ASC606.
Our audit procedures included, among others, understanding of controls relating to management’s revenue recognition process, confirming revenue collections with a sample of the customers, and detail testing to the balance sheet date.
How the Critical Audit Matter Was Addressed in the Audit
Our audit of revenue recognition included, but was not limited to, the following procedures:
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● |
Obtained an understanding of internal controls relating to management assessment of the revenue recognition; |
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Informed and discussed with Audit Committee; |
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Interviewed personnel involved in the financial reporting process; |
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Interviewed lawyer to assess financial and legal implications related to the financial statements; |
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Reviewed minutes of the board of directors’ meetings; |
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Reviewed journal entries and other adjustments for evidence of possible material misstatement; |
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● |
Examined original transaction related documents; |
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● |
Reviewed the bank statements. |
Mining Revenue from Digital Asset Mining Activities
As described in Note 2(o) to the consolidated financial statements, the Company participates in a digital asset mining pool (“the mining pool”) by executing agreements with mining pool operators for the provision of hash calculation services to the mining pool. The Company decides when to provide hash calculation services under the agreements and the Company’s enforceable rights to compensation begins only when and lasts as long as the Company provides hash calculation services to the mining pool operator and is created as power is provided over time. In exchange for providing hash calculation services, the Company is entitled to a payout of Bitcoin based on a contractual formula, which primarily calculates the hash rate provided to the mining pool as a percentage of total network hash rate, and other inputs. Revenue is recognized on the same day that control of the contracted service transfers to the mining pool operator, which is the same day as contract inception. For the year ended June 30, 2026, Bitcoin Mining revenue was $90,165.
We identified the auditing of Bitcoin Mining revenue as a critical audit matter due to the extent of audit effort required to perform audit procedures over the Company’s hash calculation services provided to the mining pool operator, the associated contractual payouts including the blockchain contractual inputs, the Company’s valuation of Bitcoin received from the mining pool operator and evaluating the results of those procedures.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to the Company’s process for recording Bitcoin Mining revenue included the following, among others:
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● |
With the assistance of our Information Technology (IT) specialists, we identified the significant systems used to monitor hash calculation services and tested the general IT controls over each of these systems |
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We tested the effectiveness of controls over the Company’s Bitcoin Mining revenue calculation. |
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We tested the amount of the Bitcoin Mining revenue recorded by developing an expectation for the amount recorded based on the hash calculation services provided to the mining pool operator and the payout method prescribed in the contract with the mining pool operator and comparing our expectation to the amount recorded by the Company. |
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We confirmed with the mining pool operator the significant contractual terms utilized in the determination of Bitcoin Mining revenue, total mining rewards earned, and the digital asset wallet addresses in which the rewards are deposited. |
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● |
We evaluated the reasonableness of the prices utilized by the Company to value Bitcoin by obtaining independent Bitcoin prices and comparing those to the prices selected by the Company. |
We have served as the Company’s auditor since 2024.
/s/
October 16, 2026
BITVENTURES LTD.
CONSOLIDATED BALANCE SHEETS
(In Thousands, except for number of shares and per share data)
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As of June 30, |
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2025 |
2026 |
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(US$) |
(US$) |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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Accounts receivable, net |
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Deposits, prepayments and other current assets |
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Inventories |
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Digital assets |
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Total current assets |
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Non-current assets: |
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Property and equipment, net |
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Right-of-use asset |
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Long-term investment |
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Total non-current assets |
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Total Assets |
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Liabilities and Shareholders’ Equity |
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Current liabilities: |
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Accounts payable |
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Other payables and accrued liabilities |
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Lease liability |
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Total current liabilities |
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Non-current liability: |
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Lease liability |
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Total non-current liability |
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Total Liabilities |
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Shareholders’ Equity: |
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Ordinary shares (US$ |
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Additional paid-in capital |
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Accumulated deficit |
( |
) | ( |
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Accumulated other comprehensive loss |
( |
) | ||||||
|
Total Shareholders’ Equity |
||||||||
|
Total Liabilities and Shareholders’ Equity |
||||||||
The accompanying notes are an integral part of these consolidated financial statements.
BITVENTURES LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME
(In Thousands, except for share and per share data, or otherwise stated)
|
Years Ended June 30, |
||||||||||||
|
2024 |
2025 |
2026 | ||||||||||
|
(US$) |
(US$) |
(US$) |
||||||||||
|
Continuing operations |
||||||||||||
|
Revenues |
||||||||||||
|
Digital assets |
||||||||||||
|
E-commerce |
||||||||||||
|
Client referral services |
||||||||||||
|
Total revenues |
||||||||||||
|
Operating cost and expenses |
||||||||||||
|
Cost of revenues |
||||||||||||
|
Digital assets, exclusive of depreciation |
||||||||||||
| Digital assets, depreciation | ||||||||||||
|
E-commerce |
||||||||||||
|
Compensation and benefits |
||||||||||||
|
Depreciation and amortization |
||||||||||||
|
Loss on digital assets |
||||||||||||
|
Share-based compensation expenses |
||||||||||||
|
Sales and marketing expenses |
||||||||||||
|
General and administrative expenses |
||||||||||||
|
Total operating cost and expenses |
||||||||||||
|
Loss from operations |
( |
) | ( |
) | ( |
) | ||||||
|
Other income/(expenses) |
||||||||||||
|
Interest (expense)/income, net |
( |
) | ||||||||||
|
Other income/(expense), net |
( |
) | ||||||||||
|
Total other income/(expenses), net |
( |
) | ||||||||||
|
(Loss)/income before income tax expense |
( |
) | ( |
) | ||||||||
|
Income tax expense |
||||||||||||
|
Net (loss)/income from continuing operations, net of tax |
( |
) | ( |
) | ||||||||
|
Other comprehensive loss |
||||||||||||
|
Unrealized losses on short-term investments |
( |
) | ||||||||||
|
Net (loss)/income and comprehensive loss from continuing operations, net of tax |
( |
) | ( |
) | ||||||||
|
Discontinued operations |
||||||||||||
|
Income for the year from discontinued operations, net of income taxes |
||||||||||||
|
Net (loss)/income and comprehensive loss for the year |
( |
) | ( |
) | ||||||||
|
(Loss)/income per share |
||||||||||||
|
From continuing operations |
||||||||||||
|
Ordinary share - Basic |
( |
) | ( |
) | ||||||||
|
Ordinary share - Diluted |
( |
) | ( |
) | ||||||||
|
From discontinued operations |
||||||||||||
|
Ordinary share - Basic |
N/A | |||||||||||
|
Ordinary share - Diluted |
N/A | |||||||||||
|
From continuing and discontinued operations |
||||||||||||
|
Ordinary share - Basic |
( |
) | ( |
) | ||||||||
|
Ordinary share - Diluted |
( |
) | ( |
) | ||||||||
|
Weighted average number outstanding: |
||||||||||||
|
Ordinary share - Basic |
* | * | ||||||||||
|
Ordinary share - Diluted |
* | * | ||||||||||
*
According to ASC 260 Earnings Per Share, the share consolidation requires a retroactive adjustment to the Weighted Average Shares Outstanding for all periods presented in the consolidated statements.
The accompanying notes are an integral part of these consolidated financial statements.
BITVENTURES LTD.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(In Thousands, except for share and per share data, or otherwise stated)
|
Ordinary shares |
Additional paid-in capital |
Accumulated deficit |
Accumulated other comprehensive loss |
Total shareholders’ equity |
||||||||||||||||||||
|
Number of ordinary shares * |
Amount |
|||||||||||||||||||||||
|
(US$) |
(US$) |
(US$) |
(US$) |
(US$) |
||||||||||||||||||||
|
Balance as of June 30, 2023 |
( |
) | ||||||||||||||||||||||
|
Net loss for the year |
- | ( |
) | ( |
) | |||||||||||||||||||
|
Share-based compensation recognized in equity |
- | |||||||||||||||||||||||
|
Balance as of June 30, 2024 |
( |
) | ||||||||||||||||||||||
|
New shares issued |
||||||||||||||||||||||||
|
Waiver of loan for capital contribution |
- | |||||||||||||||||||||||
|
Net loss for the year |
- | ( |
) | ( |
) | |||||||||||||||||||
|
Share-based compensation recognized in equity |
- | |||||||||||||||||||||||
|
Balance as of June 30, 2025 |
( |
) | ||||||||||||||||||||||
|
Share consolidation |
( |
) | ||||||||||||||||||||||
|
Net income for the year |
- | |||||||||||||||||||||||
|
Share-based compensation recognized in equity |
- | |||||||||||||||||||||||
|
Exercise of share-based compensation |
||||||||||||||||||||||||
|
Other comprehensive loss |
- | ( |
) | ( |
) | |||||||||||||||||||
|
Balance as of June 30, 2026 |
( |
) | ( |
) | ||||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
BITVENTURES LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands, except for share and per share data, or otherwise stated)
|
Years Ended June 30, |
||||||||||||
|
2024 |
2025 |
2026 |
||||||||||
|
(US$) |
(US$) |
(US$) |
||||||||||
|
Cash flows from operating activities |
||||||||||||
|
Net (loss)/income for the year |
( |
) | ( |
) | ||||||||
|
Adjustments to reconcile net (loss)/income to net cash provided by operating activities |
||||||||||||
|
Depreciation |
||||||||||||
|
Amortization of right-of-use asset |
||||||||||||
|
Expected credit loss |
||||||||||||
|
Share-based compensation expenses |
||||||||||||
|
Loss on digital assets |
||||||||||||
|
Loss on early termination of right-of-use asset |
||||||||||||
| Write-off of property and equipment | - | - | 4 | |||||||||
|
Gain on disposal of subsidiaries |
( |
) | ||||||||||
|
Asset impairment loss |
||||||||||||
|
Changes in deferred taxes |
( |
) | ||||||||||
|
Changes in operating assets and liabilities |
||||||||||||
|
Accounts receivable |
( |
) | ||||||||||
|
Deposits, prepayments and other current assets |
( |
) | ( |
) | ||||||||
|
Digital assets |
( |
) | ||||||||||
|
Inventories |
( |
) | ||||||||||
|
Accounts payable |
||||||||||||
|
Commission payable |
( |
) | ( |
) | ||||||||
|
Income tax payable |
( |
) | ||||||||||
|
Lease liability |
( |
) | ( |
) | ( |
) | ||||||
|
Other payables and accrued liabilities |
( |
) | ||||||||||
|
Due to related parties |
( |
) | ||||||||||
|
Net cash provided by/(used in) operating activities |
( |
) | ||||||||||
|
Cash flows from investing activities |
||||||||||||
|
Placement of short-term investments |
( |
) | ( |
) | ||||||||
|
Proceeds from disposal and maturity of short-term investments |
||||||||||||
|
Purchase of property and equipment |
( |
) | ( |
) | ||||||||
|
Net cash inflow from disposal of subsidiaries |
||||||||||||
|
Net cash used in investing activities |
( |
) | ( |
) | ||||||||
|
Cash flows from financing activity |
||||||||||||
|
Proceeds from issuance of ordinary shares |
||||||||||||
|
Net cash provided by financing activity |
||||||||||||
|
Net increase/(decrease) in cash and cash equivalents |
( |
) | ||||||||||
|
Cash and cash equivalents at beginning of the year |
||||||||||||
|
Cash and cash equivalents at end of the year |
||||||||||||
|
Supplemental disclosure of cash flow information: |
||||||||||||
|
Income taxes paid |
||||||||||||
|
Supplemental disclosure of non-cash flow information: |
||||||||||||
|
Waiver of loan for capital contribution |
||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
|
1. |
Organization |
BitVentures Ltd. (“BitVentures”, the “Company”) was incorporated in the Cayman Islands on July 19, 2019. The Company, through its subsidiaries in Hong Kong and the United States, is engaged in insurance referral services, digital assets mining, and e-commerce retail businesses. The Company is overall engaged in the development of technology business.
On March 26, 2021, the Company completed its initial public offering (“IPO”) of
On June 28, 2024, the Company terminated its contractual VIE arrangements with Hywin Wealth Management, which, along with its subsidiaries, was previously the primary corporate vehicle to provide wealth management services in mainland China. As a result, the Company has completely exited from the wealth management business in mainland China. In addition, the Company has not been able to exercise control over any of its PRC subsidiaries or VIEs given that all of the Company’s subsidiaries and VIEs in the PRC were effectively owned or controlled by Han Hongwei, our ex-Chairman, and are seized in the PRC. Accordingly, the Company is deemed to have lost de facto control of all of its PRC subsidiaries, VIEs, and their associated assets and operations, and deems its contractual agreements with its VIEs as invalid. The Company’s combined financial statements for the year ended June 30, 2024 were prepared excluding such PRC subsidiaries and VIEs.
On August 14, 2024, the Company completely exited its businesses in overseas wealth management and asset management in Hong Kong, and disposed of certain subsidiaries in Hong Kong, namely, Haiyin Insurance (Hong Kong) Co., Limited and Hywin International Insurance Broker Limited for consideration, and Haiyin International Asset Management Limited and Hywin Asset Management (Hong Kong) Limited for US$
On March 17, 2025, the Company effectuated a change of control and issued to Carmel Holdings Limited
On December 2, 2025, the Company announced that it would terminate its Deposit Agreement dated March 25, 2021 entered into between the Company and Deutsche Bank Trust Company Americas as depositary for the Company’s American Depositary Shares (the “ADSs”).
On December 19, 2025, the Company held an Extraordinary General Meeting, in which shareholders approved a number of resolutions pertaining to restructuring of the Company’s share capital, which included a share consolidation of every issued and unissued ordinary shares of par value US$
On December 19, 2025, the Company’s name was changed from Santech Holdings Limited to BitVentures Limited.
On January 5, 2026, the Company’s substitution listing was approved by Nasdaq. All outstanding American Depositary Shares (ADSs) were cancelled. The Company’s consolidated ordinary shares of par value US$
As of June 30, 2026, detailed information of the Company and the Company’s major subsidiaries is summarized as follows:
|
Date of |
Percentage of |
Place of |
Principal business |
||||||
|
Name of subsidiaries |
incorporation |
ownership |
incorporation |
activities |
|||||
|
New Innovations BVI Limited |
June 27, 2025 |
BVI |
Investment holding |
||||||
|
New Innovations Limited |
March 15, 2023 |
Hong Kong |
Technology development |
||||||
|
BitVentures America Inc |
September 16, 2015 |
United States |
Technology development |
||||||
|
Freedom Mining LLC |
November 3, 2025 |
United States |
Digital assets |
||||||
|
BTV-NDR eCommerce LLC |
July 29, 2025 |
United States |
E-commerce |
||||||
|
Santech Global Hong Kong Limited |
May 3, 2016 |
Hong Kong |
Provision of client referral services |
|
2. |
Summary of Significant Accounting Policies |
|
a) |
Basis of presentation |
The Company’s consolidated financial statements are prepared and presented in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and with the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”).
|
b) |
Principles of consolidation |
The consolidated financial statements include the financial statements of the Company and its subsidiaries. All inter-company transactions and balances among the Company and its subsidiaries have been eliminated upon consolidation. A subsidiary is an entity in which (i) the Company directly or indirectly controls more than 50% of the voting power; or (ii) the Company has the power to appoint or remove the majority of the members of the board of directors or to cast a majority of votes at the meetings of the board of directors or to govern the financial and operating activities. The consolidation of all entities has been accounted for in accordance with ASC 810.
|
c) |
Discontinued operations |
The Company reports a disposal of its component or a group of its components as discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on the Company’s operations and financial results. Classification as a discontinued operation occurs upon disposal or when the operation meets the criteria to be classified as held for sale, if earlier. In the consolidated statements of operations and comprehensive (loss) income, the results from discontinued operations are reported separately from the income and expenses from continuing operations and prior periods are presented on a comparative basis. Cash flows for discontinued operations are presented separately in the consolidated statements of cash flows. Unless otherwise noted, discussion in the notes to consolidated financial statements refers to the Company’s continuing operations. Refer to note 3 for additional information.
|
d) |
Use of estimates |
The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of these consolidated financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. On an ongoing basis, management reviews these estimates and assumptions using the currently available information. Changes in facts and circumstances may cause the Company to revise its estimates. In accordance with ASC 250, the changes in estimates will be recognized in the same period of changes in facts and circumstances. The Company bases its estimates on past experiences and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Estimates are used when accounting for items and matters including, but not limited to, useful lives and impairment of long-lived assets.
|
e) |
Foreign currency translation and transactions |
The Company’s reporting currency is US dollars (“US$”) and the functional currency of the Company and its subsidiaries is the US$ and Hong Kong dollars (“HK$”). For those subsidiaries which have the functional currency other than US$, the financial statements are translated from their respective functional currencies into US$. Assets and liabilities are translated using the exchange rate at each balance sheet date. Revenue and expenses are translated using average rates prevailing during each reporting period, and shareholders’ equity is translated at historical exchange rates. For the years ended June 30, 2024, 2025 and 2026, there are translation differences from the subsidiaries’ functional currency to the reporting currency as it pegged to the reporting currency (US$1: HK$
|
f) |
Cash and cash equivalents |
Cash and cash equivalents consist of cash on hand, bank deposits and short-term, highly liquid investments, which have original maturities of three months or less, and that are readily convertible to known amounts of cash and have insignificant risk of changes in value related to changes in interest rates. The Company considers all highly liquid investments with original maturities of three months or less at the time of purchase to be cash equivalents. For the years ended June 30, 2024, 2025 and 2026, the Company recognized a reversal of impairment loss on cash deposits held at PRC bank accounts of , and US$
|
g) |
Short-term investments and long-term investment |
All investments with original maturities less than twelve months or investments that are expected to be realized in cash during the next twelve months are classified as short-term investments. All investments with original maturities more than twelve months or investments that are expected to be realized in cash over the next twelve months are classified as long-term investments. The Company accounts for short-term and long-term debt investments in accordance with ASC Topic 320, Investments – Debt Securities (“ASC 320”). The Company classifies the short-term and long-term investments in debt securities as held-to-maturity or available-for-sale, whose classification determines the respective accounting methods stipulated by ASC 320. Dividend and interest income for all categories of investments in securities are included in earnings. Any realized gains or losses on the sale of the short-term investments are determined on a specific identification method, and such gains and losses are reflected in earnings during the period in which gains or losses are realized. For the years ended June 30, 2024, 2025 and 2026, the Company recognized the interest income from short-term and long term investments of , US$
|
h) |
Current expected credit loss |
In June 2016, the FASB issued ASU 2016-13: Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), using the modified retrospective transition method. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss methodology, which will result in more timely recognition of credit losses. Upon adoption, the Company changed the impairment model to utilize a forward-looking current expected credit losses (CECL) model in place of the incurred loss methodology for financial instruments measured at amortized cost and receivables resulting from the application of ASC 606.
The Company maintains an allowance for credit losses in accordance with ASC Topic 326, Credit Losses (“ASC 326”) and records the allowance for credit losses as an offset to financial assets, and the estimated credit losses charged to the allowance in the consolidated statements of operations and comprehensive (loss) income. The Company assesses collectability by reviewing accounts receivable on a collective basis where similar characteristics exist, primarily based on similar business lines, services or product offerings and on an individual basis when the Company identifies specific customers with known disputes or collectability issues. In determining the amount of the allowance for credit losses, the Company considers historical collectability based on past due status, the age of the accounts receivable balances, credit quality of the Company’s customers based on ongoing credit evaluations, current economic conditions, reasonable and supportable forecasts of future economic conditions, and other factors that may affect the Company’s ability to collect from customer.
The Company recognized allowance from continuing operations of credit losses of US$
|
i) |
Leases |
The right-of-use assets and related lease liability are recognized at the lease commencement date. The Company recognizes operating lease expenses on a straight-line basis over the lease term.
Right-of-use assets
The Company recognizes right-of-use assets at the commencement date of the lease (i.e. the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses and adjusted for any remeasurement of lease liability. The cost of right-of-use assets includes the amount of lease liability recognized, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of the assets. All right-of-use assets are reviewed for impairment annually. There was impairment for right-of-use lease assets for the years ended June 30, 2024, 2025 and 2026.
Lease liability
Lease liability is initially measured at the present value of the outstanding lease payments at the commencement date, discounted using the Company’s incremental borrowing rate. Lease payments included in the measurement of the lease liability comprise fixed lease payments, variable lease payments that depend on an index or a rate, amounts expected to be payable under a residual value guarantee and any exercise price under a purchase option that the Company is reasonably certain to exercise. Lease liability is measured at amortized cost using the effective interest rate method. It is re-measured when there is a change in future lease payments, if there is a change in the estimate of the amount expected to be payable under a residual value guarantee, or if there is any change in the Company assessment of option purchases, contract extensions or termination options.
There was loss on early termination of lease from continuing operations of , US$
The Company elected not to recognize short-term leases with an initial lease term of twelve months or less.
|
j) |
Fair value of financial instruments |
The Company’s financial instruments primarily consist of cash and cash equivalents and deposit to suppliers. The carrying values of these financial instruments approximate fair values due to their short maturities.
Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. This topic also establishes a fair value hierarchy which requires classification based on observable and unobservable inputs when measuring fair value. There are three levels of inputs that may be used to measure fair value:
Level 1 - Quoted prices in active markets for identical assets or liabilities.
Level 2 - Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
Determining which category an asset or liability falls within the hierarchy requires significant judgment. The Company evaluates its hierarchy disclosures each quarter.
The carrying amount of cash and cash equivalents, short-term investments, accounts receivable, deposit and other current assets, other payables and accrued liabilities approximates fair value because of their short-term nature.
Accounting guidance also describes three main approaches to measure the fair value of assets and liabilities: (1) market approach; (2) income approach and (3) cost approach. The market approach uses prices and other relevant information generated from market transactions involving identical or comparable assets or liabilities. The income approach uses valuation techniques to convert future amounts to a single present value amount. The measurement is based on the value indicated by current market expectations about those future amounts. The cost approach is based on the amount that would currently be required to replace an asset.
|
k) |
Digital assets |
The Company’s digital assets primarily include Bitcoin, Dogecoin and Litecoin, which are included in current assets in the accompanying consolidated balance sheets. The Company early adopted ASU 2023-08, which requires entities to measure certain cryptocurrencies at fair value, with changes in fair value recorded in net income in each reporting period. According to ASU 2023-08, changes in fair value and realized gains or losses are now reported as “Loss on digital assets” in the consolidated statements of operations and comprehensive (loss) income. Digital assets awarded to the Company through its mining activities are accounted for in connection with the Company’s revenue recognition policy disclosed as note 2(o) below.
ASC 820 defines “principal market” as the market with the greatest volume and level of activity for the asset or liability. The determination of the principal market (and, as a result, the market participants in the principal market) is made from the perspective of the reporting entity. The Company determined that Coinbase, Global Inc. (“Coinbase”) is its principal market as it provides the most reliable and greatest volume and level of activity for its digital assets for which the Company can access.
The Company recognizes mining revenue by utilizing the spot price of Bitcoin, Dogecoin and Litecoin determined using Coinbase at 0:00:00 UTC on the date of contract inception.
|
l) |
Inventories |
The Company’s inventories consist entirely of finished goods. The Company currently records inventories on its balance sheet on a weighted-average basis, or net realizable value, if it is below the Company’s recorded cost. The Company’s costs include the purchase cost, tariffs and duties associated with transporting products across national borders, and freight costs associated with transporting the product from its seller to its warehouses, as applicable. The valuation of our inventory requires us to make judgments, based on available information such as historical data, about the likely method of disposition, such as through sales to individual customers or liquidations, and expected recoverable values of each disposition category. Changes to the relevant assumptions and projections would impact on our consolidated financial results in periods subsequent to recording these estimates. If we anticipate a change in assumptions such as future demand or market conditions to be less favorable than our previous estimates, additional inventory write-downs may be required. Conversely, if we are able to sell inventories that had been written down to a level below the ultimate realized selling price in a previous period, sales would be recorded with a lower or no offsetting charge to cost of sales.
When available, the Company uses quoted market prices to determine the fair value of an asset or liability. If quoted market prices are not available, the Company will measure fair value using valuation techniques that use, when possible, current market-based or independently sourced market parameters, such as interest rates and currency rates.
|
m) |
Property and equipment, net |
Property and equipment are recorded at cost and depreciated using the straight-line method over the estimated useful lives of the assets. Direct costs incurred to develop or obtain software for internal use are capitalized as property and equipment. Capitalized software costs are amortized over the software’s useful life when the software is placed in service. The estimated useful lives by asset category are:
|
Estimated useful lives (in years) |
|||||
|
Digital asset mining equipment |
|||||
|
Office equipment |
- | ||||
|
n) |
Impairment of long-lived assets |
All long-lived assets, which include tangible long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of long-lived assets to be held and used is measured by a comparison of the carrying amount of the asset to the estimated undiscounted future cash flows expected to be generated by the assets. If the carrying amount of an asset exceeds its estimated future undiscounted cash flows, an impairment loss is recognized for the difference between the carrying amount of the asset and its fair value. There was for long-lived assets from continuing operations for the years ended June 30, 2024, 2025 and 2026.
|
o) |
Revenue recognition |
In accordance with ASC Topic 606, revenues are recognized when control of the promised goods or services is transferred to the Company’s customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. In determining when and how much revenue is recognized from contracts with customers, the Company performs the following five-step analysis: (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; (5) recognize revenue when (or as) the entity satisfies a performance obligation.
Revenue from continuing operations
Digital assets
The Company has entered into digital asset mining pools by executing contracts with the mining pool operators to provide computing power to the mining pool. The contracts are terminable at any time by either party and the Company’s enforceable right to compensation only begins when the Company provides computing power to the mining pool operator. In exchange for providing computing power, the Company is entitled to a fractional share of the fixed digital assets award the mining pool operator receives, for successfully adding a block to the blockchain. The Company’s fractional share is based on the proportion of computing power the Company contributed to the mining pool operator to the total computing power contributed by all mining pool participants in solving the current algorithm.
Providing computing power in digital asset transaction verification services is an output of the Company’s ordinary activities. The provision of such computing power is the only performance obligation in the Company’s contracts with mining pool operators. The transaction consideration the Company receives, if any, is non-cash consideration, which the Company measures at fair value on the date received, which is not materially different than the fair value at contract inception or the time the Company has earned the award from the pools. The consideration is all variable. Because it is not probable that a significant reversal of cumulative revenue will not occur, the consideration is constrained until the mining pool operator successfully places a block (by being the first to solve an algorithm) and the Company receives confirmation of the consideration it will receive, at which time revenue is recognized. There is no significant financing component in these transactions.
Fair value of the digital assets award received is determined using the quoted price of the related digital assets at the time of receipt. There is currently no specific definitive guidance under GAAP or alternative accounting framework for the accounting for digital assets recognized as revenue or held, and management has exercised significant judgment in determining the appropriate accounting treatment. In the event authoritative guidance is enacted by the FASB, the Company may be required to change its policies, which could have an effect on the Company’s consolidated financial position and results from operations.
The Company’s revenues generated from digital asset mining business are all from the United States.
E-commerce
The Company derives its revenue from the sale of consumer products, including consumer electronics, toys and other consumer product categories. The Company sells its products directly to consumers through its storefront on Amazon, an online retail channel.
A performance obligation is a promise in a contract to transfer a distinct good to the customer and is the unit of account in ASC Topic 606. Revenue is recognized when the performance obligation is satisfied. A good or service that is promised to a customer is distinct if the customer can benefit from the good and services either on its own or together with other resources that are readily available to the customer. The customer can benefit from the goods received that are readily available and the fulfillment activities are completely dependent on the physical goods in the order. Each of the Company’s contracts have a single distinct performance obligation, which is the promise to transfer individual goods. For all of the Company’s sales and distribution channels, revenue is recognized at point in time when control of the product is transferred to the customer (i.e., when the Company’s performance obligation is satisfied), which typically occurs at the delivery date of shipping documents. As a result, the Company has a present and unconditional right to payment and record the amount due from the customer in accounts receivable.
The Company evaluated principal versus agent considerations to determine whether it is appropriate to record platform fees paid to Amazon as an expense or as a reduction of revenue. Platform fees are recorded as sales and distribution expenses and are not recorded as a reduction of revenue because the Company owns and controls all the goods before they are transferred to the customer. The Company can, at any time, direct Amazon, to return the Company’s inventory to any location specified by the Company. It is the Company’s responsibility to make customers whole following any returns made by customers directly to Amazon and the Company retains the back-end inventory risk. Further, the Company is subject to credit risk (i.e. credit card charge backs), establishes prices of its products, can determine who fulfills the customer orders (Amazon or the Company) and can limit quantities or stop selling the goods at any time. Based on these considerations, the Company is the principal in this arrangement.
At contract inception, an entity shall assess the goods or services promised in a contract with a Customer and shall identify as a performance obligation each promise to transfer to the customer either the good or service (or a bundle of goods or services) that is distinct or a series of distinct goods or services that are substantially the same and that have the same pattern of transfer to the customer. For consumer product sales, the Company has elected to treat shipping and handling as fulfillment activities, and not a separate performance obligation. Accordingly, the Company recognizes revenue for its single performance obligation related to product sales at the time control of the merchandise passes to the customer, which is generally at the time of delivery. The Company bills customers for shipping and handling certain sales and such charges are recorded as part of revenue. Shipping and handling revenue for the years ended June 30, 2024, 2025 and 2026 were , and de minimis, respectively.
Client referral services
Revenues generated from insurance referral service represents a one-time referral fee earned by the Company for serving as a referrer to insurance agencies and facilitating the sale of various insurance products offered by the insurance companies.
The Company provides insurance brokerage referrer services by only referring clients to insurance brokers or insurance companies to purchase insurance products offered by insurance companies and receives introduction fees from insurance brokers or insurance companies regardless of the effectiveness of insurance products commencement and is not subject to rebates, returns or other variable consideration. The Company did not have further performance obligation after referring clients to insurance brokers or insurance companies to purchase insurance products offered by insurance companies. The Company enters into referral agreements with insurance brokers or insurance companies to specify key terms and conditions of each arrangement. The Company has minimal monitoring measures to control throughout all stages of referring process and has no right to obtain detailed information about matched agreements or related documents. These referral fees are normally calculated as a percentage of first year premium depending on the type of insurance product. The corresponding payment is applied against the customer’s transit periods typically do not exceed one month.
Under ASC 606, the Company evaluated whether it acts as a principal or agent in insurance referral service transactions by assessing whether it controls the specified service before transfer to the customer. The Company determined it acts as a principal because it: (i) is primarily responsible for fulfilling the promise to provide qualified insurance products referrals to insurance companies, (ii) has discretion in establishing the referral criteria and customer qualification process, and (iii) bears the risk associated with the quality and suitability of the referrals provided. As a principal, the Company recognizes revenue from insurance referral services on a gross basis, reflecting the full amount of consideration received from insurance companies.
The following tables present the Company’s revenues disaggregated by service line and timing of revenue recognition:
From continuing operations:
|
Year Ended June 30, |
||||||||||||
|
2024 |
2025 |
2026 |
||||||||||
|
US$ |
US$ |
US$ |
||||||||||
|
Revenues recognized at a point in time |
||||||||||||
|
Digital assets |
||||||||||||
|
E-commerce |
||||||||||||
|
Client referral services |
||||||||||||
|
Total revenues from continuing operations |
||||||||||||
Revenue from discontinued operations
Wealth management service
It is mainly represented the insurance brokerage services which are considered to be rendered and completed, and revenue is recognized, at the time when referral service is completed and the receipts of referral fee. Accordingly, the Company does not accrue any insurance brokerage service prior to the receipt of the related insurance products referral fee. The revenue is not subject to rebates or returns.
Asset management service
Revenue generated from providing asset management service represents management fees and performance-based income the Company earns by serving as an investment manager. The revenue is not subject to rebates or returns.
Management fees
Management fees generated by the Company’s asset management services are earned from providing investment management service throughout the duration of various investment funds.
Revenues of asset management fees are recognized point in time when management fees are collected which is calculated in accordance with the respective fund contract or mandate agreement, either as a percentage of the total investments made by the investors or as a percentage of the fair value of the fund’s or mandate’s net assets on a monthly basis. The management fees do not include any rights of return, credits or discounts, rebates, price protection or other similar privileges, once determined.
Performance-based income
In a typical asset management arrangement in which the Company serves as a fund manager, beside management fee, the Company is also entitled to a performance-based fee based on the extent by which the fund’s investment performance exceeds a certain threshold calculated on a monthly basis. The performance-based fees earned by the Company are a form of variable consideration in the Company’s asset management contracts with customers.
Such revenue of performance-based income from providing asset management services are recognized at a point in time when the performance of the fund can be determined and the Company receives above-mentioned service fee. The revenue is not subject to rebates or returns.
The following tables present the Company’s revenues disaggregated by service line and timing of revenue recognition:
|
From discontinued operations: |
||||||||
|
Year Ended June 30, |
Two Months Ended August 31, |
|||||||
|
2024 |
2024 |
|||||||
|
US$ |
US$ |
|||||||
|
Revenues recognized at a point in time |
||||||||
|
Wealth management service |
||||||||
|
Asset management service |
||||||||
|
Total net revenues from discontinued operations |
||||||||
|
p) |
Cost of revenue |
Digital assets
Cost of revenue under digital assets consists primarily of direct production costs related to mining operations, including electricity costs, maintenance and support fees and/or other relevant costs paid to our hosting facilities.
Depreciation expenses of digital assets mining equipment are separately stated in the Company’s consolidated statements of operations.
E-commerce
Cost of revenue under e-commerce consists of the book value of inventory sold to customers during the reporting period. When circumstances dictate that the Company uses net realizable value as the basis for recording inventory, it bases its estimates on expected future selling prices less expected disposal costs.
Client referral services
Compensation and benefits primarily include base salary, sales commission and other compensation and benefits of the Company’s relationship managers, who directly contribute to the Company’s revenues generation activities, such as distribution of insurance products under wealth management and provision of investment management services under asset management.
Unpaid commissions were separately presented as commission payable and long-term commission payable on the Company’s consolidated balance sheets, depending on whether the amounts are expected to be paid within or after one year of each reporting date.
|
q) |
Other income/(expenses), net |
Net other income/(expenses) are recorded as a result of non-operating income or expenses, including one-off legal settlement amounts for a class action lawsuit brought against us and associated legal expenses, the reversal of impaired cash deposits in PRC banks and loss on early termination of operating lease.
|
r) |
Related party |
The Company adopted ASC 850, Related Party Disclosures, for the identification of related parties and disclosure of related party transactions. Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control or significant influence, such as a family member or relative, shareholder, or a related corporation.
|
s) |
Income taxes |
The Company follows the guidance of ASC Topic 740 “Income taxes” and uses asset and liability method to account for income taxes. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in effect in the period in which the differences are expected to reverse. The Company records a valuation allowance to offset deferred tax assets, if based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rates is recognized in the consolidated statements of (loss) income and comprehensive loss in the period that includes the enactment date.
|
t) |
Uncertain tax positions |
The Company uses a more likely than not threshold for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. As a result, the impact of an uncertain income tax position is recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant tax authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained.
Interest on non-payment of income taxes under requirement by tax law and penalties associated with tax positions when a tax position does not meet the minimum statutory threshold to avoid payment of penalties recognized, if any, will be classified as a component of the provisions for income taxes. The tax returns of the Company’s Hong Kong subsidiaries are subject to examination by the relevant local tax authorities. According to the Departmental Interpretation and Practice Notes No.10 (Revised) (“DIPN10”) of the Hong Kong Inland Revenue Ordinance (the “HK tax laws”), an investigation normally covers the six years of the assessment prior to the year of the assessment in which the investigation commences. In the case of fraud and willful evasion, the investigation is extended to cover ten years of assessment. For the years ended June 30, 2024, 2025 and 2026, the Company did have any material interest or penalties associated with tax positions. The Company did have any significant unrecognized uncertain tax positions as of June 30, 2025 and 2026. The Company does expect that its assessment regarding unrecognized tax positions will materially change over the next 12 months. For the years ended June 30, 2024, 2025 and 2026, the Company does not have any entity that is under tax examination.
|
u) |
Share-based compensation |
The Company follows the guidance of ASC Topic 718 “Compensation—Stock Compensation” and the share-based payment transactions with employees are measured based on the grant-date fair value of the instruments, with recognition of either a corresponding increase in equity or a liability, depending on whether the instruments granted satisfy the equity or liability classification criteria. The fair value of the award is recognized as compensation expense, net of estimated forfeitures, over the period during which an employee is required to provide service in exchange for the award on straight line basis, which is generally the vesting period. Refer to note 16 for details.
|
v) |
Segment reporting |
ASC 280, “Segment Reporting”, establishes standards for companies to report in their financial statements information about operating segments, products, services, geographic areas, and major customers. Based on the criteria established by ASC 280, the Company’s chief operating decision maker (“CODM”) has been identified as the Chief Executive Officer, who reviews consolidated results when making decisions about allocating resources and assessing performance of the Company.
The Company has reportable segments: digital assets, e-commerce and client referral services. The reportable segments are identified based on the types of service performed.
|
w) |
Earnings per share |
The Company computes basic (loss)/income per share in accordance with ASC Topic 260, “Earnings per Share” by dividing the net loss attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the year.
Diluted loss per share is calculated by dividing net loss attributable to ordinary shareholders, as adjusted for the effect of dilutive ordinary equivalent shares, if any, by the weighted average number of ordinary and dilutive ordinary equivalent shares outstanding during the year. Ordinary equivalent shares consist of ordinary shares issuable upon the exercise of share options using the treasury stock method. Ordinary equivalent shares are not included in the denominator of the diluted loss per share calculation when inclusion of such share would be anti-dilutive.
|
x) |
Commitments and contingencies |
The Company accrues estimated losses from loss contingencies by a charge to income when information available before financial statements are issued or are available to be issued indicates that it is probable that an asset has been impaired, or a liability had been incurred at the date of the financial statements and the amount of the loss can be reasonably estimated. Legal expenses associated with the contingency are expensed as incurred. If a loss contingency is not probable or reasonably estimable, disclosure of the loss contingency is made in the financial statements when it is at least reasonably possible that a material loss could be incurred.
|
y) |
Recently issued or adopted accounting pronouncements |
In January 2025, the FASB issued ASU 2025-01 Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40). The Board issued Update 2024-03 on November 4, 2024. Update 2024-03 states that the amendments are effective for public business entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. The Board’s intent in the basis for conclusions of Update 2024-03 is clear that all public business entities should initially adopt the disclosure requirements in the first annual reporting period beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027. Following the issuance of Update 2024-03, the Board was asked to clarify the initial effective date for entities that do not have an annual reporting period that ends on December 31 (referred to as non-calendar year-end entities). Because of how the effective date guidance was written, a non-calendar year-end entity may have concluded that it would be required to initially adopt the disclosure requirements in Update 2024-03 in an interim reporting period, rather than in an annual reporting period. The Board’s intent in the basis for conclusions of Update 2024-03 is clear that all public business entities should initially adopt the disclosure requirements in the first annual reporting period beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027. However, the Board acknowledges that there was ambiguity between the intent in the basis for conclusions in Update 2024-03 and the transition guidance that was included in the Codification when Update 2024-03 was issued.
Accounting Standards Update (ASU) 2025-04, “Compensation—Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606): Clarifications to Share-Based Consideration Payable to a Customer” was issued by the Financial Accounting Standards Board (FASB) on May 15, 2025. The main contents are as follows: Revising the Definition of Performance Conditions: ASU 2025-04 amends the definition of performance conditions in Topic 718. It includes conditions that are contingent on the purchase of goods or services by a customer (or a customer's customer) as performance conditions. For example, if an enterprise grants share-based consideration to a customer, and the vesting of this consideration is conditional on the customer purchasing a specified amount of goods or services, this condition will be regarded as a performance condition. Eliminating the Forfeiture Policy Election for Service Conditions: For share-based consideration payable to customers with service conditions, the ASU eliminates the accounting policy election for forfeiture. Entities are required to estimate expected forfeitures for all share-based consideration payable to a customer with a service condition, rather than having the option to choose whether to estimate forfeitures as before. Effective Date: The amendments in ASU 2025-04 are effective for all entities for annual reporting periods (including interim periods therein) beginning after December 15, 2026. Early adoption is permitted. In general, the purpose of ASU 2025-04 is to reduce diversity in practice and improve existing guidance, so as to more accurately regulate the accounting treatment of share-based consideration payable to customers.
In May 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326), Measurement of Credit Losses for Accounts Receivable and Contract Assets. The amendments in this Update introduce a practical expedient for all entities and an accounting policy election for entities other than public business entities related to applying Subtopic 326-20 to current accounts receivable and current contract assets arising from transactions accounted for under Topic 606. (1) Practical expedient. In developing reasonable and supportable forecasts as part of estimating expected credit losses, all entities may elect a practical expedient that assumes that current conditions as of the balance sheet date do not change for the remaining life of the asset. (2) Accounting policy election. An entity other than a public business entity that elects the practical expedient is permitted to make an accounting policy election to consider collection activity after the balance sheet date when estimating expected credit losses. The amendments will be effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. Early adoption is permitted in both interim and annual reporting periods in which financial statements have not yet been issued or made available for issuance. The Company’s management does not believe the adoption of ASU 2025-05 will have a material impact on its financial statements and disclosures.
On December 8, 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements, which updates the current guidance by improving navigability of the required interim disclosures, clarifying when that guidance is applicable and adding a principle that requires entities to disclose events since the last annual reporting period that have a material impact on the entity. The amendments will be effective for interim periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2025-11.
|
3. |
Discontinued operations |
On August 14, 2024, the Company exited its businesses in overseas wealth management and asset management and disposed of certain subsidiaries in Hong Kong, namely, Haiyin Insurance (Hong Kong) Co., Limited and Hywin International Insurance Broker Limited for consideration, and Haiyin International Asset Management Limited and Hywin Asset Management (Hong Kong) Limited for US$
The disposal represented a strategic shift from providing wealth management service and asset management service to focusing on new businesses in the technology sector, including digital assets, e-commerce and other opportunities in consumer technology and enterprise technology. The Company has classified the historical financial results of Wealth management and Asset management service as discontinued operations in the Company’s consolidated statements of operations and comprehensive (loss) income for all periods presented.
The following tables set forth statement of operations of discontinued operations which were included in the Company’s consolidated financial statements:
|
Year Ended June 30 |
Two Months Ended August 31, |
|||||||
|
2024 |
2024 |
|||||||
|
US$ |
US$ |
|||||||
|
Discontinued operations |
||||||||
|
Net revenues |
||||||||
|
Wealth management |
||||||||
|
Asset management |
||||||||
|
Total net revenues |
||||||||
|
Operating cost and expenses |
||||||||
|
Compensation and benefits |
||||||||
|
Sales and marketing expenses |
||||||||
|
General and administrative expenses |
||||||||
|
Asset impairment loss |
||||||||
|
Total operating cost and expenses |
||||||||
|
Income from operations |
||||||||
|
Other expense, net |
( |
) | ( |
) | ||||
|
Income before income tax expense |
||||||||
|
Income tax expense |
( |
) | ( |
) | ||||
|
Net income from discontinued operations |
||||||||
|
Gain on disposal of subsidiaries from discontinued operations, net |
||||||||
|
Income for the year from discontinued operations, net of income taxes |
||||||||
|
Summarized cash flow information for discontinued operations is as follows: |
||||||||
|
Net cash flows used in operating activities |
( |
) | ( |
) | ||||
|
Net cash flows provided by investing activities |
||||||||
|
The following table summarizes significant non-cash operating items and capital expenditures of discontinued operations included in the consolidated statements of cash flows for the periods presented. |
||||||||
|
Significant non-cash operating items |
||||||||
|
Amortization of intangible asset |
||||||||
|
Asset impairment loss |
||||||||
Gain from disposal of subsidiaries under discontinued operations:
|
Wealth management business |
Asset management business |
Total |
||||||||||
|
US$ |
US$ |
US$ |
||||||||||
|
Considerations received |
||||||||||||
|
Less: Net assets disposed of |
( |
) | ( |
) | ( |
) | ||||||
|
(Loss)/gain from disposal of subsidiaries |
( |
) | ||||||||||
Reconciliation of the carrying amount of assets and liabilities:
|
As of June 30, 2024 |
As of August 31, 2025 |
|||||||
|
US$ |
US$ |
|||||||
|
Assets |
||||||||
|
Cash and cash equivalents |
||||||||
|
Deposits, prepayments and other current assets |
||||||||
|
Due from related parties |
||||||||
|
Income tax receivable |
||||||||
|
Total Assets |
||||||||
|
Liabilities |
||||||||
|
Commission payable |
||||||||
|
Income tax payable |
||||||||
|
Due to related parties |
||||||||
|
Other payable and accrued liabilities |
||||||||
|
Total Liabilities |
||||||||
|
Net (liabilities)/assets |
( |
) | ||||||
|
4. |
Deposits, Prepayments and Other Current Assets |
|
As of June 30, |
||||||||
|
2025 |
2026 |
|||||||
|
US$ |
US$ |
|||||||
|
Deposits, prepayments and other current assets |
||||||||
|
5. |
Cash and Cash Equivalents |
|
As of June 30, |
||||||||
|
2025 |
2026 |
|||||||
|
US$ |
US$ |
|||||||
|
Cash and cash equivalents |
||||||||
|
6. |
Property and Equipment, net |
|
As of June 30, |
||||||||
|
2025 |
2026 |
|||||||
|
US$ |
US$ |
|||||||
|
Digital asset mining equipment |
||||||||
|
Office equipment |
||||||||
|
Electronic equipment |
||||||||
|
Less: accumulated depreciation |
( |
) | ( |
) | ||||
|
Total property and equipment, net |
||||||||
Depreciation expenses from continuing operations for the years ended June 30, 2024, 2025 and 2026 were approximately , US$
For the years ended June 30, 2024, 2025 and 2026, the Company purchased the miners for digital assets were , and US$
For the years ended June 30, 2024, 2025 and 2026, the Company purchased the office equipment were , and US$
For the years ended June 30, 2024, 2025 and 2026, cost for the electronic equipment disposed were , US$
For the years ended June 30, 2024, 2025 and 2026, impairment loss from continuing operations was recognized for the Company’s property and equipment.
The Company periodically reviews the recoverable amount of property and equipment. Certain electronic equipment was disposed or written off due to no longer in use or having become technically or economically obsolete.
|
7. |
Leases |
Operating leases as lessee
The Company entered into operating lease agreements primarily for offices.
On January 28, 2026, the Company entered into an office lease agreement in Hong Kong for general and administrative purposes. The initial lease term is two years with option to renew. As of June 30, 2026, the Company’s operating leases had a weighted average remaining lease term of
As of June 30, 2025, the operating leases was mutually terminated in January 2025 and which is early before the maturity date of the right-of-use asset. A loss from early termination loss from continuing operations for the years ended June 30, 2024, 2025 and 2026 was recognized approximately , US$
The following tables show right-of-use asset and lease liability, and the associated financial statement line items:
|
As of June 30, |
||||||||
|
2025 |
2026 |
|||||||
|
US$ |
US$ |
|||||||
|
Asset |
||||||||
|
Right-of-use asset, net |
||||||||
|
Liability |
||||||||
|
Lease liability, current |
||||||||
|
Lease liability, non-current |
||||||||
The components of lease expenses are as follows:
|
For the Year Ended June 30 |
||||||||
|
2025 |
2026 |
|||||||
|
US$ |
US$ |
|||||||
|
Operating lease expense |
||||||||
|
Amortization of right-of-use asset |
||||||||
|
Interest expense on lease liability |
||||||||
|
Total |
||||||||
Maturities of lease liability were as follows:
|
As of June 30, |
||||||||
|
2025 |
2026 |
|||||||
|
US$ |
US$ |
|||||||
|
Twelve months ending June 30, |
||||||||
|
2025 |
||||||||
|
2026 |
||||||||
|
2027 |
||||||||
|
Total lease payments |
||||||||
|
Less: imputed interest |
( |
) | ||||||
|
Total |
||||||||
|
8. |
Other Payables and Accrued Liabilities |
|
As of June 30, |
||||||||
|
2025 |
2026 |
|||||||
|
US$ |
US$ |
|||||||
|
Accrued payroll |
||||||||
|
Accrued audit and audit-related fees |
||||||||
|
Other current liabilities |
||||||||
|
Total other payables and accrued liabilities |
||||||||
|
9. |
Income Taxes |
The entities within the Company file separate tax returns in the respective tax jurisdictions in which they operate.
Cayman Islands
The Company is incorporated in the Cayman Islands. Under the current laws of the Cayman Islands, the Company is not subject to income or capital gains taxes. In addition, dividend payments are not subject to withholding tax in the Cayman Islands.
British Virgin Islands (“BVI”)
Under the current laws of BVI, the Company’s subsidiaries incorporated in BVI are not subject to tax on income or capital gains. Additionally, upon payments of dividends by these BVI companies to respective shareholders, no BVI withholding tax will be imposed.
Hong Kong
Under the current HK tax laws, before April 1, 2018, the income tax rate of Hong Kong was
United States
Our subsidiaries incorporated in the United States are subject to U.S. federal corporate income tax at a rate of
For each year ended June 30, 2024, 2025 and 2026, the Company’s (loss)/income before tax from continuing operations consisted of:
|
Years Ended June 30, |
||||||||||||
|
2024 |
2025 |
2026 |
||||||||||
|
US$ |
US$ |
US$ |
||||||||||
|
Hong Kong |
( |
) | ( |
) | ||||||||
|
United States |
( |
) | ( |
) | ||||||||
|
Others |
( |
) | ( |
) | ||||||||
| ( |
) | ( |
) | |||||||||
For each year ended June 30, 2024, 2025 and 2026, the Company’s income tax benefit from continuing operations consisted of:
|
Years Ended June 30, |
||||||||||||
|
2024 |
2025 |
2026 |
||||||||||
|
US$ |
US$ |
US$ |
||||||||||
|
Hong Kong income tax expenses |
||||||||||||
|
- Current year |
||||||||||||
|
- Prior year |
||||||||||||
A reconciliation of the income tax expense determined at the Hong Kong statutory income tax rate to the Company’s actual income tax expense is as follows:
|
Years Ended June 30, |
||||||||||||
|
2024 |
2025 |
2026 |
||||||||||
|
US$ |
US$ |
US$ |
||||||||||
|
(Loss)/income before income tax expense |
( |
) | ( |
) | ||||||||
|
Hong Kong statutory income tax rate |
% | % | % | |||||||||
|
Income tax at Hong Kong statutory income tax rate |
||||||||||||
|
Utilized the unrecognized net losses in prior years |
( |
) | ||||||||||
|
Tax effect of prior-year tax filing difference |
||||||||||||
|
Income tax expense |
||||||||||||
A reconciliation of the income tax expense determined at the United States federal statutory tax rate to the Company’s actual income tax expense is as follows:
|
Years Ended June 30, |
||||||||||||
|
2024 |
2025 |
2026 |
||||||||||
|
US$ |
US$ |
US$ |
||||||||||
|
(Loss)/income before income tax expense |
( |
) | ( |
) | ||||||||
|
Federal statutory tax rate |
% | % | % | |||||||||
|
Income tax at federal statutory tax rate |
||||||||||||
|
Utilized the unrecognized net losses in prior years |
( |
) | ||||||||||
|
Income tax expense |
||||||||||||
The Company’s deferred tax liabilities were recorded as a result of recognition of the identifiable intangible assets acquired from various acquisition transactions. As of June 30, 2025 and 2026, there was deferred tax liabilities.
Total NOLs carryforwards of the Company’s subsidiaries in Hong Kong are US$
Total NOLs carryforwards of the Company’s subsidiaries in the United States are subject to agreement by the tax authorities. The net operating losses (NOLs) carryforwards are not subject to any expiration period under federal regulations. Management considered the tax positions are supportable and accurate. The Company’s ability to realize deferred tax assets depends on its ability to generate sufficient taxable income within the carry forward periods provided for in the tax laws. As of June 30, 2025 and 2026, the Company recorded and deferred tax assets related to the NOLs.
|
10. |
Equity |
Ordinary shares
As of June 30, 2020,
On December 19, 2025, the Company held an Extraordinary General Meeting and passed a number of resolutions pertaining to the Company’s share capital restructuring. Following the shareholders’ approval by resolutions at the Extraordinary General Meeting, the Company terminated its Deposit Agreement dated March 25, 2021 entered into between the Company and Deutsche Bank Trust Company Americas as depositary for the Company’s ADSs, and beneficial owners and holders of ADSs issued thereunder. Immediately following the termination of the ADR Facility, the Company consolidated its shares such that every issued and unissued (20) ordinary shares of par value US$
During the year ended December 31, 2025,
As of June 30, 2025 and 2026,
|
11. |
(Loss)/Income Per Share |
Basic and diluted (loss)/income per share are calculated as follows:
|
Years Ended June 30, |
||||||||||||
|
2024 |
2025 |
2026 |
||||||||||
|
US$ |
US$ |
US$ |
||||||||||
|
Numerator: |
||||||||||||
|
Net (loss)/income attributable to shareholders of BitVentures Ltd. |
||||||||||||
|
-from continuing operations |
( |
) | ( |
) | ||||||||
|
-from discontinued operations |
||||||||||||
|
-from continuing and discontinued operations |
( |
) | ( |
) | ||||||||
|
Denominator: |
||||||||||||
|
Denominator for basic loss/income per share: |
||||||||||||
|
Weighted average number of ordinary shares outstanding |
* | * | ||||||||||
|
Dilutive effect of outstanding share options |
||||||||||||
|
Denominator for diluted loss/income per share |
* | * | ||||||||||
|
From continuing operations |
||||||||||||
|
Basic (loss)/income per share |
( |
) | ( |
) | ||||||||
|
Diluted (loss)/income per share |
( |
) | ( |
) | ||||||||
|
From discontinued operations |
||||||||||||
|
Basic loss per share |
N/A | |||||||||||
|
Diluted loss per share |
N/A | |||||||||||
|
From continuing and discontinued operations |
||||||||||||
|
Basic (loss)/income per share |
( |
) | ( |
) | ||||||||
|
Diluted (loss)/income per share |
( |
) | ( |
) | ||||||||
|
12. |
Financial Information of Parent Company |
The Company was incorporated on July 19, 2019 and became parent company of the Company upon the completion of the Reorganization on September 29, 2019. The following disclosures presented the financial positions of the Parent Company as of June 30, 2025 and 2026, and results of its operations and its cash flows for the years ended June 30, 2024, 2025 and 2026, as if the current corporate structure has been in existence throughout the periods presented.
The condensed financial statements of the Parent Company have been prepared using the same accounting policies as set out in the Company’s consolidated financial statements.
The Parent Company and its subsidiaries were included in the consolidated financial statements whereby the inter-company balances and transactions were eliminated upon combination.
The Company is a Cayman Islands company, therefore, not subjected to income taxes for all years presented.
The footnote disclosures contain supplemental information relating to the operations of the Company and, as such, these statements should be read in conjunction with the notes to the consolidated financial statements of the Company. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted.
Balance Sheets
(In Thousands, except for share and per share data, or otherwise stated)
|
As of June 30, |
||||||||
|
2025 |
2026 |
|||||||
|
(US$) |
(US$) |
|||||||
|
Assets |
||||||||
|
Cash and cash equivalents |
||||||||
|
Due from related parties |
||||||||
|
Interests in subsidiaries |
||||||||
|
Total Assets |
||||||||
|
Liability |
||||||||
|
Other payables and accrued liabilities |
||||||||
|
Total Liability |
||||||||
|
Shareholders’ Equity |
||||||||
|
Ordinary shares (US$ |
||||||||
|
Additional paid-in capital |
||||||||
|
Accumulated deficit |
( |
) | ( |
) | ||||
|
Total Shareholders’ Equity |
||||||||
|
Total Liability and Shareholders’ Equity |
||||||||
Statements of Operations and Comprehensive Loss
(In Thousands, except for share and per share data, or otherwise stated)
|
Years Ended June 30, |
||||||||||||
|
2024 |
2025 |
2026 |
||||||||||
|
US$ |
US$ |
US$ |
||||||||||
|
Net loss |
( |
) | ( |
) | ||||||||
Statements of Cash Flows
(In Thousands, except for share and per share data, or otherwise stated)
|
Years Ended June 30, |
||||||||||||
|
2024 |
2025 |
2026 |
||||||||||
|
US$ |
US$ |
US$ |
||||||||||
|
Cash flows (used in)/provided by operating activities |
( |
) | ||||||||||
|
Cash flows provided by financing activities |
||||||||||||
|
Net change in cash and cash equivalents |
||||||||||||
|
Cash and cash equivalents at beginning of the year |
||||||||||||
|
Cash and cash equivalents at end of the year |
||||||||||||
|
13. |
Employee Defined Contribution Plan |
Obligations for contributions to defined contribution retirement plans for full-time employees in Hong Kong and United States, including contributions payable under the Hong Kong Mandatory Provident Fund Schemes Ordinance and Section 401(k) of the Internal Revenue Code, are recognized as expenses in the income statement as incurred. The total amounts for such employee benefits for the continuing operations were approximately US$
|
14. |
Concentration of Risk |
Credit risk
Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents. As of June 30, 2026, all of the Company’s cash and cash equivalents were held by major financial institutions located in Hong Kong and United States of America. The Company believes that these financial institutions located in Hong Kong and United States of America are of high credit quality. For deposit to suppliers, the Company extends credit based on an evaluation of the customer’s or other parties’ financial condition, generally without requiring collateral or other security. In order to minimize the credit risk, the Company’s finance team is responsible for credit approvals and other monitoring procedures to ensure that follow-up action is taken to recover overdue debts. Further, the Company reviews the recoverable amount of each individual receivable at each balance sheet date to ensure that adequate allowances are made for doubtful accounts. In this regard, the Company considers that the Company’s credit risk for deposit to suppliers is significantly reduced.
Concentration of customers
The following tables summarized the information about the Company’s concentration of customers from continuing operations for the years ended June 30, 2024, 2025 and 2026, respectively:
|
A |
B |
C |
||||||||||
|
Year Ended June 30, 2026 |
||||||||||||
|
Revenues, customer concentration risk |
||||||||||||
|
Year Ended June 30, 2025 |
||||||||||||
|
Revenues, customer concentration risk |
||||||||||||
|
Year Ended June 30, 2024 |
||||||||||||
|
Revenues, customer concentration risk |
||||||||||||
|
15. |
Segment Reporting |
The Company has reportable segments: digital assets, e-commerce, and client referral services. The reportable segments are identified based on the types of service performed.
The CODM analyzes the performance of the segments based on reportable segment revenue and reportable segment cost of revenue. No operating segments have been aggregated to form the reportable segments.
The Company does not allocate all assets to the reporting segments as these are managed on an entity-wide basis. Therefore, the Company does not separately disclose the total assets of its reportable operating segments.
The following tables present segment revenue and segment gross profit reviewed by the CODM:
The Year Ended June 30, 2026
|
Digital assets |
E-commerce |
Client referral services |
Total |
|||||||||||||
|
Revenue from external customers |
||||||||||||||||
|
Less: cost of revenue |
||||||||||||||||
|
Maintenance and support fees to hosting facilities |
( |
( |
||||||||||||||
| Depreciation of digital asset mining equipment | ( |
( |
||||||||||||||
|
Cost of inventory |
( |
( |
||||||||||||||
|
Fulfillment and warehouse fees |
( |
( |
||||||||||||||
|
Cost of packing and preparation |
( |
( |
||||||||||||||
|
Segment gross (loss)/profit |
||||||||||||||||
The Year Ended June 30, 2024 and 2025
For the years ended June 30, 2024 and 2025, the Company has only reportable segment of client referral services.
|
16. |
Share-based Compensation |
Restricted Shares Awards
On December 6, 2020, the Company adopted a share incentive plan (or the “2020 Plan”), which provides for the granting of restricted shares to employees of the Company. Under the 2020 Plan, the maximum aggregate number of ordinary shares available for issuance will be
The summary of activities of the service-based restricted share awards under the 2020 Plan during the years ended June 30, 2025 and 2026 is presented as follows:
|
Number of restricted shares |
Weighted average grant date fair value |
|||||||
|
US$ |
||||||||
|
Awarded and unvested as of July 1, 2024 |
||||||||
|
Granted |
||||||||
|
Forfeited/cancelled |
||||||||
|
Vested |
||||||||
|
Awarded and unvested as of June 30, 2025 |
||||||||
|
Effect of share consolidation |
( |
) | ||||||
|
Awarded and unvested as of June 30, 2025 (restated) |
||||||||
|
Granted |
||||||||
|
Forfeited/cancelled |
||||||||
|
Vested |
( |
) | ||||||
|
Awarded and unvested as of June 30, 2026 |
||||||||
For the year ended June 30, 2025,
On January 5, 2026, the Company consolidated its shares such that every issued and unissued (20) ordinary shares of par value US$
For the year ended June 30, 2026, the board of directors approved the accelerating of vesting Mr. Lok’s restricted shares, provided Mr. Lok to enter into a letter of undertaking, whereby he undertakes not to sell or otherwise dispose of the securities for an additional one year beyond the original vesting dates.
The Company recognized share compensation expense for the restricted shares under the 2020 Plan of US$
As of June 30, 2025 and 2026, total unrecognized compensation cost related to unvested share-based awards related to restricted shares was approximately US$
2019 Option Plan
On September 30, 2019, the Company adopted a share option plan (the “2019 Option Plan”) for the employees to purchase ordinary shares of the Company. Under the 2019 Option Plan, the maximum aggregate number of ordinary shares available for issuance would be
The following table summarizes the option activities under the 2019 Option Plan during the years ended June 30, 2024 and 2025, respectively:
|
Number of options |
Weighted average remaining contractual life (Years) |
Weighted average exercise price |
||||||||||
|
US$ |
||||||||||||
|
Outstanding and exercisable |
||||||||||||
|
As of June 30, 2024 |
||||||||||||
|
Forfeited |
( |
) | - | |||||||||
|
Exercised |
- | |||||||||||
|
As of June 30, 2025 |
- | |||||||||||
For the year ended June 30, 2021,
|
17. |
Commitments and Contingencies |
|
a. |
Contingencies |
In the opinion of management, there were no pending or threatened claims and litigation as of June 30, 2025 and 2026 and through the issuance date of these consolidated financial statements.
|
b. |
Lease commitment |
The following table sets forth the Company's future minimum lease payments under the non-cancellable operating lease obligations with respect to the office as of June 30, 2025 and 2026 are payable as follows:
|
For the Year Ended June 30 |
||||||||
|
2025 |
2026 |
|||||||
|
US$ |
US$ |
|||||||
|
Within 1 year |
||||||||
| 2 to 5 years | ||||||||
| Total | ||||||||
|
18. |
Subsequent Events |
The Company has evaluated subsequent events through October 16, 2026, the date of issuance of the consolidated financial statements, and did not identify any other subsequent events with material financial impact on the Company’s consolidated financial statements.
Exhibit 2.1
Share Certificate
|
Number _________ |
_________ Shares |
BitVentures Limited (the “Company”)
Incorporated under the laws of the Cayman Islands
Pursuant to the Third Amended and Restated Memorandum and Articles of Association, effective on December 29, 2025, the capital of the Company is US$200,000.00 divided into 100,000,000 Ordinary shares of par value of US$0.0020 each.
|
This is to certify that _________ is the registered holder of _________ |
fully paid ordinary shares of par value of US$0.0020 each in the Company subject to the Memorandum and Articles of Association thereof.
|
Dated |
|
|
Director |
Exhibit 2.2
Description of Rights of Securities
Registered under Section 12 of the Securities Exchange Act of 1934
The ordinary shares of BitVentures Limited (“BitVentures,” “we,” “our,” “our company,” or “us”) are listed and traded on the Nasdaq Capital Market and registered under Section 12(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). This exhibit contains a description of the rights of the holders of ordinary shares.
Description of Ordinary Shares
The following is a summary of material provisions of our currently effective third amended and restated memorandum and articles of association (the “Memorandum and Articles of Association” or “our memorandum and articles of association”), as well as the Companies Act (As Revised) of the Cayman Islands (the “Companies Act”) insofar as they relate to the material terms of our ordinary shares. Notwithstanding this, because it is a summary, it may not contain all the information that you may otherwise deem important. For more complete information, you should read the entire Memorandum and Articles of Association, which has been filed with the Securities and Exchange Commission (the “SEC”) as Exhibit 3.1 to our current report on Form 6-K (File No. 001-40238) furnished to the SEC on January 7, 2026, and became effective on December 29, 2025.
Type and Class of Securities (Item 9.A.5 of Form 20-F)
Each ordinary share has US$0.0020 par value. The number of ordinary shares that are issued and outstanding as of the last day of the fiscal year ended June 30, 2026 is provided on the cover of the annual report on Form 20-F filed on October 16, 2026 (the “Form 20-F”). Our ordinary shares may be held in either certificated or uncertificated form.
Preemptive Rights (Item 9.A.3 of Form 20-F)
The shareholders of BitVentures do not have preemptive rights.
Limitations or Qualifications (Item 9.A.6 of Form 20-F)
Not applicable.
Rights of Other Types of Securities (Item 9.A.7 of Form 20-F)
Not applicable.
Rights of Ordinary Shares (Item 10.B.3 of Form 20-F)
General
Our ordinary shares are issued in registered form and are issued when registered in our register of members. Our shareholders who are non-residents of the Cayman Islands may freely hold and vote their shares.
Dividends
The holders of our ordinary shares are entitled to such dividends as may be declared by our board of directors. In addition, our shareholders may by ordinary resolution declare a dividend, but no dividend may exceed the amount recommended by our directors. Under Cayman Islands law, dividends may be declared and paid out of funds legally available therefor, namely out of either profit or our share premium account, and provided further that a dividend may not be paid out of our share premium account if this would result in our company being unable to pay its debts as they fall due in the ordinary course of business immediately following the date on which the dividend is proposed to be paid.
Voting Rights
At any shareholders’ meeting, a resolution put to the vote of the meeting shall be decided on a poll. Subject to any rights or restrictions attached to any shares, each shareholder present in person or by proxy or, if a corporate shareholder, by its duly authorized representative, has one vote for each share held on a poll.
A quorum required for a meeting of shareholders consists of shareholders present and holding not less than one third in nominal value of the total issued voting shares in our company entitled to vote upon the business to be transacted. Shareholders may be present in person or by proxy or, if the shareholder is a legal entity, by its duly authorized representative. Shareholders’ meetings may be convened by our board of directors on its own initiative or upon shareholders’ requisition. A shareholders’ requisition is a requisition of shareholders holding at the date of deposit of the requisition not less than two-thirds in par value of the issued shares which as at that date carry the right to vote at general meetings of the Company. Advance notice of at least five clear days is required for the convening of our shareholders’ general meeting.
An ordinary resolution to be passed at a meeting by the shareholders requires the affirmative vote of a simple majority of the votes attaching to the ordinary shares cast at a meeting, while a special resolution requires the affirmative vote of no less than two-thirds of the votes attaching to the ordinary shares cast at a meeting. Both ordinary resolutions and special resolutions may also be passed by a unanimous written resolution signed by all the shareholders of our company, as permitted by the Companies Act and our memorandum and articles of association. A special resolution will be required for important matters such as a change of name or making amendments to our memorandum of association or articles of association. Holders of the ordinary shares may, among other things, subdivide or consolidate their shares by ordinary resolution.
Transfer of Ordinary Shares
Subject to the restrictions set out below, any of our shareholders may transfer all or any of his or her ordinary shares by an instrument of transfer in the usual or common form, in a form prescribed by the Nasdaq Capital Market, or any other form approved by our board of directors.
Our board of directors may, in its absolute discretion, refuse to register a transfer of any ordinary share which is not a fully paid up share to a person of whom it does not approve, or any share under any share incentive scheme for employees upon which a restriction on transfer imposed thereby still subsists or any share that is not fully paid up on which we have a lien. Our board of directors may also decline to register any transfer of any ordinary share unless:
|
● |
the instrument of transfer is lodged at our registered office or such other place at which our register of members is kept, accompanied by any relevant share certificate(s) and/or such other evidence as our board of directors may reasonably require to show the right of the transferor to make the transfer; |
|
● |
the instrument of transfer is in respect of only one class of shares, and the shares are fully paid and free of any lien; |
|
● |
the instrument of transfer is properly stamped, if applicable; |
|
● |
in the case of a transfer to joint holders, the number of joint holders to whom the ordinary share is to be transferred does not exceed four; and |
|
● |
a fee of such maximum sum as the Nasdaq Capital Market may determine to be payable or such lesser sum as our directors may from time to time require is paid to us in respect thereof. |
If our directors refuse to register a transfer they shall, within one month after the date on which the instrument of transfer was lodged, send to the transferee notice of such refusal.
The registration of transfers may, after compliance with any notice requirement of the Nasdaq Capital Market, be suspended and the register closed at such times and for such periods as our board of directors may from time to time determine, provided, however, that the registration of transfers shall not be suspended nor the register closed for more than 30 days in any year.
Liquidation
Pursuant to our articles of association, if our Company is wound up, the liquidator may, with the sanction of a Special Resolution and any other sanction required by the Companies Act, divide among the Members in specie the whole or any part of the assets of the Company and may, for that purpose, value any assets and determine how the division shall be carried out as between the shareholders or different classes of shareholders. The liquidator may, with the like sanction, vest the whole or any part of the assets in trustees upon such trusts for the benefit of the shareholders as he with the like sanction determines, but no shareholder shall be compelled to accept any assets upon which there is a liability.
If our Company shall be wound up and the assets available for distribution amongst the shareholders as such shall be insufficient to repay the whole of the paid up capital, such assets shall be distributed so that, as nearly as may be, the losses shall be borne by the shareholders in proportion to the capital paid up, or which ought to have been paid up, at the commencement of the winding up, on the shares held by them respectively. And if in a winding up the assets available for distribution amongst the shareholders shall be more than sufficient to repay the whole of the capital paid up at the commencement of the winding up, the excess shall be distributed pari passu amongst the shareholders in proportion to the capital paid up at the commencement of the winding up on the shares held by them respectively.
Calls on Shares and Forfeiture of Shares
Our board of directors may from time to time make calls upon shareholders for any amounts unpaid on their shares in a notice served to such shareholders at least 14 clear days prior to the specified time and place of payment. The shares that have been called upon and remain unpaid are subject to forfeiture.
Redemption, Repurchase and Surrender of Ordinary Shares
We may issue shares on terms that such shares are subject to redemption, at our option or at the option of the holders thereof, on such terms and in such manner as may be determined, before the issue of such shares, by our board of directors. Our company may also repurchase any of our shares in such manner and on such terms as our board of directors may determine and agree with the relevant shareholder. Under the Companies Act, the redemption or repurchase of any share may be paid out of our company’s profits or out of the proceeds of a fresh issue of shares made for the purposes of the redemption or repurchase, out of our share premium account, or out of capital, provided that immediately following a payment out of capital our company can pay its debts as they fall due in the ordinary course of business. In addition, under the Companies Act no such share may be redeemed or repurchased (a) unless it is fully paid up or (b) if such redemption or repurchase would result in there being no issued shares other than treasury shares. In addition, our company may accept the surrender of any fully paid share for no consideration. Such a surrender may not leave our company with no issued shares other than treasury shares.
Issuance of Additional Shares
Our memorandum and articles of association authorize our board of directors to issue additional ordinary shares from time to time as our board of directors shall determine, to the extent of available authorized but unissued shares, without the need for any further approval or authorization from our shareholders.
Our memorandum and articles of association also authorize our board of directors, without the need for any further approval or authorization from our shareholders, to establish from time to time one or more series of preferred shares and to determine, with respect to any series of preferred shares, the terms and rights of that series, including:
|
● |
the designation of the series; |
|
● |
the number of shares of the series; |
|
● |
the dividend rights, dividend rates, conversion rights, voting rights; and |
|
● |
the rights and terms of redemption and liquidation preferences. |
Our board of directors may issue preferred shares without the need for any further approval or authorization from, or other action by, our shareholders to the extent of available authorized but unissued shares. Issuance of these shares may dilute the voting power of holders of ordinary shares.
Inspection of Books and Records
Holders of our ordinary shares will have no general right under Cayman Islands law to inspect or obtain copies of our list of shareholders or our corporate records (other than our memorandum and articles of association and special resolutions, and our register of mortgages and charges). However, we will provide our shareholders with annual audited financial statements.
Anti-Takeover Provisions
Some provisions of our memorandum and articles of association may discourage, delay or prevent a change of control of our company or management that shareholders may consider favorable, including provisions that:
|
● |
authorize our board of directors to issue preferred shares in one or more series and to designate the price, rights, preferences, privileges and restrictions of such preferred shares without any further vote or action by our shareholders; and |
|
● |
limit the ability of shareholders to requisition and convene general meetings of shareholders. |
However, under Cayman Islands law, our directors may only exercise the rights and powers granted to them under our memorandum and articles of association for a proper purpose and for what they believe in good faith to be in the best interests of our company.
General Meetings of Shareholders and Shareholder Proposals
Our shareholders’ general meetings may be held in such place within or outside the Cayman Islands as our board of directors considers appropriate.
As a Cayman Islands exempted company, we are not obliged by the Companies Act to call shareholders’ annual general meetings. Our memorandum and articles of association provide that we may (but are not obliged to) in each year hold a general meeting as our annual general meeting.
Shareholders’ annual general meetings and any other general meetings of our shareholders may be convened by a majority of our board of directors. Our board of directors shall give not less than five clear days’ written notice of a shareholders’ meeting to those persons whose names appear as members in our register of members on the date the notice is given (or on any other date determined by our directors to be the record date for such meeting) and who are entitled to vote at the meeting.
Cayman Islands law provides shareholders with only limited rights to requisition a general meeting, and does not provide shareholders with any right to put any proposal before a general meeting. However, these rights may be provided in a company’s articles of association. Our memorandum and articles of association allow our shareholders holding not less than two-thirds in par value of the issued shares of our company that carry the right to vote at general meetings to requisition an extraordinary general meeting of our shareholders, in which case our directors are obliged to call such meeting and to put the resolutions so requisitioned to a vote at such meeting; however, our memorandum and articles of association do not provide our shareholders with any right to put any proposals before annual general meetings or extraordinary general meetings not called by such shareholders. Shareholders requisitioning such a meeting may propose only ordinary resolutions and may not propose resolutions concerning the election, appointment or removal of directors or the size of our board of directors.
Requirements to Change the Rights of Holders of Ordinary Shares (Item 10.B.4 of Form 20-F)
Variations of Rights of Shares
The rights attached to any class or series of shares (unless otherwise provided by the terms of issue of the shares of that class or series) may be varied or abrogated with the consent in writing of the holders of not less than two thirds of the issued shares of that class or series or with the sanction of a special resolution passed at a separate general meeting of the holders of the shares of that class or series. The rights conferred upon the holders of the shares of any class issued shall not, unless otherwise expressly provided by the terms of issue of the shares of that class, be deemed to be varied by the creation or issue of further shares ranking pari passu with such existing class of shares.
Limitations on the Rights to Own Ordinary Shares (Item 10.B.6 of Form 20-F)
There are no limitations under the laws of the Cayman Islands or under the Memorandum and Articles of Association that limit the right of non-resident or foreign owners to hold or vote ordinary shares.
Provisions Affecting Any Change of Control (Item 10.B.7 of Form 20-F)
Anti-Takeover Provisions in the Memorandum and Articles of Association
Some provisions of our memorandum and articles of association may discourage, delay or prevent a change of control of our company or management that shareholders may consider favorable, including provisions that:
|
● |
authorize our board of directors to issue ordinary shares or preferred shares in one or more series and to designate the price, rights, preferences, privileges and restrictions of such preferred shares without any further vote or action by our shareholders; and |
|
● |
limit the ability of shareholders to requisition and convene general meetings of shareholders. |
However, under Cayman Islands law, our directors may only exercise the rights and powers granted to them under our memorandum and articles of association for a proper purpose and for what they believe in good faith to be in the best interests of our company.
Ownership Threshold (Item 10.B.8 of Form 20-F)
There are no provisions under the laws of the Cayman Islands which are applicable to the Company, or under the Memorandum and Articles of Association, that require our company to disclose shareholder ownership above any particular ownership threshold.
Differences Between the Law of Different Jurisdictions (Item 10.B.9 of Form 20-F)
The Companies Act of the Cayman Islands is modeled after that of the English companies legislation but does not follow recent English law statutory enactments, and accordingly there are significant differences between the Companies Act of the Cayman Islands and the current Companies Act of England. In addition, the Companies Act of the Cayman Islands differs from laws applicable to Delaware corporations and their shareholders. Set forth below is a summary of the significant differences between the provisions of the Companies Act applicable to us and the laws applicable to Delaware corporations and their shareholders.
Mergers and Similar Arrangements
The Companies Act permits mergers and consolidations between Cayman Islands companies and between Cayman Islands companies and non-Cayman Islands companies. For these purposes, (a) “merger” means the merging of two or more constituent companies and the vesting of their undertakings, property and liabilities in one of such companies as the surviving company and (b) a “consolidation” means the combination of two or more constituent companies into a consolidated company and the vesting of the undertakings, property and liabilities of such companies to the consolidated company. In order to effect such a merger or consolidation, the directors of each constituent company must approve a written plan of merger or consolidation, which must then be authorized by (a) a special resolution of the shareholders of each constituent company, and (b) such other authorization, if any, as may be specified in such constituent company’s articles of association. The written plan of merger or consolidation must be filed with the Registrar of Companies in the Cayman Islands together with a declaration as to the solvency of the consolidated or surviving company, a declaration as to the assets and liabilities of each constituent company and an undertaking that a copy of the certificate of merger or consolidation will be given to the members and creditors of each constituent company and that notification of the merger or consolidation will be published in the Cayman Islands Gazette.
A merger between a Cayman parent company and its Cayman subsidiary or subsidiaries does not require authorization by a resolution of shareholders of that Cayman subsidiary if a copy of the plan of merger is given to every member of that Cayman subsidiary to be merged unless that member agrees otherwise. For this purpose a company is a “parent” of a subsidiary if it holds issued shares that together represent at least ninety percent (90%) of the votes at a general meeting of the subsidiary.
The consent of each holder of a fixed or floating security interest over a constituent company is required unless this requirement is waived by a court in the Cayman Islands.
Dissenting shareholders have the right to be paid the fair value of their shares (which, if not agreed between the parties, will be determined by the Cayman Islands court) if they follow the required procedures, subject to certain exceptions. The exercise of dissenter rights shall exclude the enforcement by the shareholder of any right to which that person might otherwise be entitled by virtue of that person holding shares save for the right to seek relief on the grounds that the merger or consolidation is void or unlawful. Court approval is not required for a merger or consolidation which is effected in compliance with these statutory procedures.
In addition, there are statutory provisions that facilitate the reconstruction and amalgamation of companies by way of schemes of arrangement, provided that the arrangement is approved by (a) a majority in number of each class of creditors with whom the arrangement is to be made, and who must in addition represent three-fourths in value of each such class of creditors, as the case may be, that are present and voting either in person or by proxy at a meeting, or meetings, convened for that purpose; or (b) shareholders representing three-fourths in value of each class of shareholders that are present and voting either in person or by proxy at a meeting, or meetings, convened for that purpose. The convening of the meetings and subsequently the arrangement must be sanctioned by the Grand Court of the Cayman Islands. While a dissenting shareholder has the right to express to the court the view that the transaction ought not to be approved, the court can be expected to approve the arrangement if it determines that:
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● |
the statutory provisions as to the due majority vote have been met; |
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the shareholders have been fairly represented at the meeting in question and the statutory majority are acting bona fide without coercion of the minority to promote interests adverse to those of the class; |
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● |
the arrangement is such that may be reasonably approved by an intelligent and honest man of that class acting in respect of his interest; and |
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the arrangement is not one that would more properly be sanctioned under some other provision of the Companies Act. |
The Companies Act also contains a statutory power of compulsory acquisition which may facilitate the “squeeze out” of dissentient minority shareholders upon a takeover offer. When a takeover offer is made and accepted by holders of 90% of the shares affected (within four months), the offeror may, within a two-month period commencing on the expiration of such four-month period, require the holders of the remaining shares to transfer such shares on the terms of the offer. An objection can be made to the Grand Court of the Cayman Islands.
If the arrangement and reconstruction by way of scheme of arrangement is thus approved, in accordance with the foregoing statutory procedures, the dissenting shareholder would have no rights comparable to appraisal rights, save that objectors to a takeover offer may apply to the Grand Court of the Cayman Islands for various orders that the Grand Court of the Cayman Islands has a broad discretion to make, which would otherwise ordinarily be available to dissenting shareholders of United States corporations, providing rights to receive payment in cash for the judicially determined value of the shares.
Shareholders’ Suits
In principle, we will normally be the proper plaintiff and as a general rule a derivative action may not be brought by a minority shareholder. However, based on English authorities, which would in all likelihood be of persuasive authority in the Cayman Islands, there are exceptions to the foregoing principle, including when:
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a company acts or proposes to act illegally or ultra vires and is therefore incapable of ratification by the shareholder; |
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the act complained of, although not ultra vires, could only be effected duly if authorized by more than a simple majority vote that has not been obtained; and |
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those who control the company are perpetrating a “fraud on the minority.” |
Indemnification of Directors and Executive Officers and Limitation of Liability
The ability of Cayman Islands companies to provide in their articles of association for indemnification of officers and directors is not limited, except that any indemnity would not be effective if it were held by the Cayman Islands courts to be contrary to public policy, which would include any attempt to provide indemnification against civil fraud or the consequences of committing a crime. The Memorandum and Articles of Association provide that our directors and officers shall be indemnified against all actions, proceedings, costs, charges, expenses, losses, damages or liabilities incurred or sustained by such director or officer, other than by reason of such person’s own dishonesty, wilful default or fraud, in or about the conduct of our company’s business or affairs (including as a result of any mistake of judgment) or in the execution or discharge of his duties, powers, authorities or discretions, including without prejudice to the generality of the foregoing, any costs, expenses, losses or liabilities incurred by such director or officer in defending (whether successfully or otherwise) any civil proceedings concerning our company or its affairs in any court whether in the Cayman Islands or elsewhere. This standard of conduct is generally the same as permitted under the Delaware General Corporation Law for a Delaware corporation. In addition, we have entered into indemnification agreements with each of our directors and executive officers that will provide such persons with additional indemnification beyond that provided in the Memorandum and Articles of Association.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers or persons controlling us under the foregoing provisions, we have been informed that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.
Directors’ Fiduciary Duties
Under Delaware corporate law, a director of a Delaware corporation has a fiduciary duty to the corporation and its shareholders. This duty has two components, the duty of care and the duty of loyalty. The duty of care requires that a director act in good faith, with the care that an ordinarily prudent person would exercise under similar circumstances. Under this duty, a director must inform himself of, and disclose to shareholders, all material information reasonably available regarding a significant transaction. The duty of loyalty requires that a director must act in a manner he or she reasonably believes to be in the best interests of the corporation. A director must not use his or her corporate position for personal gain or advantage. This duty prohibits self-dealing by a director and mandates that the best interests of the corporation and its shareholders take precedence over any interest possessed by a director, officer or controlling shareholder not shared by the shareholders generally. In general, actions of a director are presumed to have been made on an informed basis, in good faith and in the honest belief that the action taken was in the best interests of the corporation. However, this presumption may be rebutted by evidence of a breach of one of the fiduciary duties. Should such evidence be presented concerning a transaction by a director, the director must prove the procedural fairness of the transaction and that the transaction was of fair value to the corporation.
As a matter of Cayman Islands law, a director of a Cayman Islands company is in the position of a fiduciary with respect to the company, and therefore it is considered that he or she owes the following duties to the company including a duty to act bona fide in the best interests of the company, a duty not to make a personal profit out of his or her position as director (unless the company permits him or her to do so), a duty not to put himself or herself in a position where the interests of the company conflict with his or her personal interests or his or her duty to a third party and a duty to exercise powers for the purpose for which such powers were intended. A director of a Cayman Islands company owes to the company a duty to act with skill and care.
Under the Memorandum and Articles of Association, our directors who are in any way, whether directly or indirectly, interested in a contract or proposed contract with our company must declare the nature of their interest at a meeting of the board of directors. A director must disclose any material interest pursuant to the Articles of Association, and such director may not vote at any meeting of Directors or of a committee of Directors on any resolution concerning a matter in which he has, directly or indirectly, an interest or duty. The director shall be counted in the quorum present at a meeting when any such resolution is under consideration and such resolution may be passed by a majority of the disinterested Directors present at the meeting even if such disinterested directors together constitute less than a quorum.
Shareholder Proposals
Under the Delaware General Corporation Law, a shareholder has the right to put any proposal before the annual meeting of shareholders, provided that it complies with the notice provisions in the governing documents. A special meeting may be called by the board of directors or any other person authorized to do so in the governing documents, but shareholders may be precluded from calling special meetings.
The Companies Act provides shareholders with only limited rights to requisition a general meeting, and does not provide shareholders with any right to put any proposal before a general meeting. However, these rights may be provided in a company’s articles of association. The Memorandum and Articles of Association allow any one or more of our shareholders who together hold not less than two-thirds in par value of the issued shares of our company that carry the right to vote at general meetings to requisition an extraordinary general meeting of our shareholders, in which case our board of directors is obliged to convene an extraordinary general meeting and to put the proposals so requisitioned to a vote at such meeting. Other than this right to requisition a shareholders’ meeting, the Memorandum and Articles of Association do not provide our shareholders with any other right to put proposals before annual general meetings or extraordinary general meetings not called by such shareholders. As an exempted Cayman Islands company, we are not obliged by law to call shareholders’ annual general meetings. Shareholders requisitioning such a meeting may propose only ordinary resolutions and may not propose resolutions concerning the election, appointment or removal of directors or the size of our board of directors.
Cumulative Voting
Under the Delaware General Corporation Law, cumulative voting for elections of directors is not permitted unless the corporation’s certificate of incorporation specifically provides for it. Cumulative voting potentially facilitates the representation of minority shareholders on a board of directors since it permits the minority shareholder to cast all the votes to which the shareholder is entitled for a single director, which increases the shareholder’s voting power with respect to electing such director. There are no prohibitions in relation to cumulative voting under the laws of the Cayman Islands but the Memorandum and Articles of Association do not provide for cumulative voting.
Removal of Directors
Under the Delaware General Corporation Law, a director of a corporation may be removed with the approval of a majority of the outstanding shares entitled to vote, unless the certificate of incorporation provides otherwise. Under the Memorandum and Articles of Association, directors may be removed with or without cause, by an ordinary resolution of our shareholders. In addition, a director’s office shall be vacated if the director (i) dies, or is, in the opinion of all his co-directors, incapable by reason of mental disorder of discharging his duties as director, or becomes bankrupt or makes any arrangement or composition with his creditors; (ii) becomes prohibited by law from being a director; (iii) resigns his office by notice in writing to the company; (iv) is removed from office pursuant to any other provisions of the Memorandum and Articles of Association; or (v) has for more than six months been absent without permission of the directors from meetings of Directors held during that period and the directors resolve that his office be vacated.
Transactions with Interested Shareholders
The Delaware General Corporation Law contains a business combination statute applicable to Delaware public corporations whereby, unless the corporation has specifically elected not to be governed by such statute by amendment to its certificate of incorporation, it is prohibited from engaging in certain business combinations with an “interested shareholder” for three years following the date on which such person becomes an interested shareholder. An interested shareholder generally is one which owns or owned 15% or more of the target’s outstanding voting shares within the past three years. This has the effect of limiting the ability of a potential acquiror to make a two-tiered bid for the target in which all shareholders would not be treated equally. The statute does not apply if, among other things, prior to the date on which such shareholder becomes an interested shareholder, the board of directors approves either the business combination or the transaction that resulted in the person becoming an interested shareholder. This encourages any potential acquiror of a Delaware public corporation to negotiate the terms of any acquisition transaction with the target’s board of directors.
Cayman Islands law has no comparable statute. As a result, we cannot avail ourselves of the types of protections afforded by the Delaware business combination statute. However, although Cayman Islands law does not regulate transactions between a company and its significant shareholders, it does provide that such transactions entered into must be bona fide in the best interests of the company, for a proper corporate purpose and not with the effect of perpetrating a fraud on the minority shareholders.
Dissolution; Winding Up
Under the Delaware General Corporation Law, unless the board of directors approves the proposal to dissolve, dissolution must be approved by shareholders holding 100% of the total voting power of the corporation. Only if the dissolution is initiated by the board of directors may it be approved by a simple majority of the corporation’s outstanding shares. The Delaware General Corporation Law allows a Delaware corporation to include in its certificate of incorporation a supermajority voting requirement in connection with dissolutions initiated by the board of directors. Under the Companies Act, our company may be wound up by a special resolution, or by an ordinary resolution on the basis that our company is unable to pay its debts as they fall due. The court has authority to order winding up in a number of specified circumstances including where it is, in the opinion of the court, just and equitable to do so.
Variation of Rights of Shares
Under the Delaware General Corporation Law, a corporation may vary the rights of a class of shares with the approval of a majority of the outstanding shares of such class, unless the certificate of incorporation provides otherwise. Under the Memorandum and Articles of Association and as permitted by the Companies Act, if our share capital is divided into more than one class of shares, the rights attaching to any class or series of shares (unless otherwise provided by the terms of issue of the shares of that class or series) may be varied or abrogated with the consent in writing of the holders of not less than two-thirds of the issued shares of that class or series or with the sanction of a special resolution passed at a separate general meeting of the holders of the shares of that class or series.
Amendment of Governing Documents
Under the Delaware General Corporation Law, a corporation’s governing documents may be amended with the approval of a majority of the outstanding shares entitled to vote, unless the certificate of incorporation provides otherwise. Under the Companies Act, the Memorandum and Articles of Association may only be amended by a special resolution passed by our shareholders.
Anti-takeover Provisions
Some provisions of the Memorandum and Articles of Association may discourage, delay or prevent a change of control of our company or management that shareholders may consider favorable, including provisions that authorize our board of directors to issue preferred shares in one or more series and to designate the price, rights, preferences, privileges and restrictions of such preferred shares without any further vote or action by our shareholders and limit the ability of shareholders to requisition and convene general meetings of shareholders.
However, under Cayman Islands law, our directors may only exercise the rights and powers granted to them under the Memorandum and Articles of Association for a proper purpose and for what they believe in good faith to be in the best interests of our company.
Rights of Non-Resident or Foreign Shareholders
There are no limitations imposed by Cayman Islands law or by the Memorandum and Articles of Association on the rights of non-resident or foreign shareholders to hold or exercise voting rights on our ordinary shares.
Disclosure of Ownership Threshold
There are no provisions in the Memorandum and Articles of Association that require our company to disclose shareholder ownership above any particular ownership threshold.
Directors’ Power to Issue Shares
Under the Memorandum and Articles of Association, our board of directors is empowered to issue or allot shares or grant options and warrants with or without preferred, deferred or other special rights or restrictions.
Exempted Company
The Companies Act in the Cayman Islands distinguishes between ordinary resident companies and exempted companies. An exempted company shall not carry on a trade or business in the Cayman Islands with any person, except in furtherance of the business of the exempted company carried on outside of the Cayman Islands, unless that exempted company holds a licence to carry on business in the Cayman Islands under any applicable law. The requirements for an exempted company are similar to an ordinary company except for the exemptions and privileges listed below:
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an exempted company does not have to file an annual return of its shareholders with the Registrar of Companies; |
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an exempted company’s register of members is not required to be open to inspection; |
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an exempted company does not have to hold an annual general meeting; |
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an exempted company may issue no par value shares; |
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an exempted company may obtain an undertaking against the imposition of any future taxation (such undertakings are usually given for 20 years in the first instance); |
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an exempted company may register by way of continuation in another jurisdiction and be deregistered in the Cayman Islands; |
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an exempted company may register as a limited duration company; and |
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an exempted company may register as a segregated portfolio company. |
“Limited liability” means that the liability of each shareholder is limited to the amount unpaid by the shareholder on that shareholder’s shares of the company (except in exceptional circumstances, such as involving fraud, the establishment of an agency relationship or an illegal or improper purpose or other circumstances in which a court may be prepared to pierce or lift the corporate veil).
Changes in Capital (Item 10.B.10 of Form 20-F)
Our shareholders may from time to time by ordinary resolutions increase our share capital by such sum, to be divided into shares of such amounts, as the resolution shall prescribe, and may:
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consolidate and divide all or any of our share capital into shares of a larger amount than our existing shares; |
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convert all or any of our paid up shares into stock and reconvert that stock into paid up shares of any denomination; |
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subdivide our existing shares, or any of them into shares of a smaller amount provided that in the subdivision the proportion between the amount paid and the amount, if any, unpaid on each reduced share shall be the same as it was in case of the share from which the reduced share is derived; and |
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cancel any shares that, at the date of the passing of the resolution, have not been taken or agreed to be taken by any person and diminish the amount of our share capital by the amount of the shares so cancelled. |
Subject to the Companies Act, our shareholders may by special resolution reduce our share capital and any capital redemption reserve in any manner authorized by law.
Debt Securities (Item 12.A of Form 20-F)
Not applicable.
Warrants and Rights (Item 12.B of Form 20-F)
Not applicable.
Other Securities (Item 12.C of Form 20-F)
Not applicable.
Exhibit 4.3
EMPLOYMENT AGREEMENT
BETWEEN
NEW INNOVATIONS LIMITED
AND
[ ]
NEW INNOVATIONS LIMITED
21A, World Trust Tower, 50 Stanley Street, Central, Hong Kong
This Employment Agreement (the “Agreement”) is entered into on ______________.
PARTIES
|
(1) |
NEW INNOVATIONS LIMITED incorporated and registered in Hong Kong with Business Registration number 74999261 whose registered office is at 21A, World Trust Tower, 50 Stanley Street, Central, Hong Kong (the “Company”). |
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(2) |
[ ], holder of Passport Number [ ] (the “Employee”) whose address is [ ]. |
AGREED TERMS
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1. |
JOB TITLE AND RESPONSIBILITY |
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1.1 |
The Employee will be employed by the Company as “[ ]” or in such other capacity as the Employer may reasonably require. |
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1.2 |
The Employee may be required in pursuance of the Employee’s duties hereunder to perform services not only for the Company but also for the Company’s subsidiaries, affiliates companies or any Group Company as the Company may from time to time reasonably require. |
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1.3 |
The Employee will perform all duties and tasks as are assigned to him in connection with the business of the Company and the Company’s subsidiaries, affiliates companies or any Group Company as the case may be. In addition to any specific duties allocated, the Employee is subject to the following general duties at all times during the continuance of the Employee’s employment hereunder: |
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(a) |
unless prevented by sickness or injury, to devote the Employee’s working time, attention and skills to the Employee’s duties; |
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(b) |
to faithfully and diligently perform such duties and exercise such powers as may from time to time be assigned to or vested in the Employee; |
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(c) |
to act at all times in accordance with the lawful and reasonable instructions of the Company; |
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(d) |
to comply at all times with the terms of any Employee Handbook, Code of Conduct, policies, procedures and internal regulations issued by the Company, as in force and amended, added or adjusted from time to time and agree such amendment, adding or adjustment may be announced by paper, email, meeting organized on company, department or other unit level to the Employee; |
NEW INNOVATIONS LIMITED
21A, World Trust Tower, 50 Stanley Street, Central, Hong Kong
|
(e) |
promote the Company’s development and protect the Company’s reputation; and |
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(f) |
not to at any time make any untrue or misleading statements relating to the Company. |
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2. |
COMMENCEMENT DATE |
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2.1 |
Subject to satisfactory compliance with the conditions specified in Clause 2.2 below, the Employee’s employment with the Company shall commence on [ ] (the “Commencement Date”). |
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2.2 |
The Employee’s employment is conditional upon: |
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(a) |
the Employee at all times being lawfully permitted to work for the Company and reside in Hong Kong. The Company will assist the Employee with the necessary application. If a work visa has not been issued to the Employee by the Commencement Date, the Commencement Date will be deferred until a valid work visa is issued and activated. The Employee will inform the Company immediately if he ceases to be entitled to lawfully work in Hong Kong for any reason; |
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(b) |
the Employee represents and warrants that he will not be in breach of any other obligation to any third party binding upon him by reason of entering into this Agreement or performing any duties and obligations under it; |
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(c) |
the Employee providing a Certificate of Separation and relevant certificates of compensation from his former employer after signing this Agreement and completing the Company’s New Employee Registration Form; |
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(d) |
reference and background checks being completed to the satisfaction of the Company. If the Employee is found to have made any false representations or provided any false information or unable to provide Certificate of Separation and relevant certificates of compensation from his former employer to the Company, this offer of employment and Agreement may be rescinded by the Company or terminated without notice or payment in lieu. |
NEW INNOVATIONS LIMITED
21A, World Trust Tower, 50 Stanley Street, Central, Hong Kong
|
(e) |
The Employee shall comply with all applicable laws, rules and regulations in force in Hong Kong and other jurisdictions which the Employee may be required to conduct business in or with. |
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2.3 |
The first [ ] months of the Employee’s employment shall be a probation period. The Company reserves the right to cancel, shorten or extend the probation period by written notice to the Employee, which notice must be given before the end of the probation period. |
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3. |
HOURS OF WORK |
The Employee’s normal office hours are from 9:00 a.m. to 6:00 p.m. (including 1 hours for lunch, which is paid and shall be taken from 12:00 to 13:00), Monday to Friday. The Company reserves the right to vary these working hours from time to time in accord with its operational requirements. Saturday is paid contractual rest day and Sunday is paid statutory rest day. The Employee may need to work additional hours as necessary to fulfil the Employee’s duties under this Agreement. No additional payment will be made for any overtime worked (in particular, employees may be required to work on Saturday without any compensation).
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4. |
LOCATION OF EMPLOYMENT |
Subject to the business needs, the Employee may be assigned to render services including but not limited to the Company’s subsidiaries, affiliates companies or any Group Company at the sole discretion of the Company. The employee’s main office of work is located at [ ]. Nevertheless, there will be times when the Employee is required to work at other premises, including but not limited to the Company's other operating premises, premises to which the Employee may be relocated as well as premises occupied by the clients or business partners (and when that happens that will be the Employee's place of employment), whether in or outside Hong Kong. The Employee agrees that the usual place of employment may vary from time to time depending on the nature of the work at that time and on occasion, may include office or premises outside Hong Kong.
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5. |
REMUNERATION |
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5.1 |
The Employee’s remuneration package includes the following: |
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(a) |
The Employee’s basic salary shall be $[ ] per annum, payable in monthly instalments of $[ ] per month in arrears on or before the end of current month to the Employee’s nominated bank account. |
NEW INNOVATIONS LIMITED
21A, World Trust Tower, 50 Stanley Street, Central, Hong Kong
|
(b) |
The Employee may also be eligible to be considered for discretionary bonus award which may be paid on annual basis, and which shall be subject to a number of factors including but not limited to the profits of the Company and the performance of the Employee. The award of any bonus, amount, payment time, payment installments and any additional conditions that may be imposed at the time of the award are in the sole discretion of the Company. If the Company makes a bonus payment to the Employee in respect of one financial year, it shall not be obliged to make subsequent bonus payments in respect of subsequent years. If the Employee is under notice period at the date of payment of the bonus for whatever reason, whether such notice has been given by the Employee or the Company, or if his employment has already terminated, no bonus payment will be made. |
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5.2 |
Daily Salary |
The Employee’s daily salary equals to month basic salary divides that month’s calendar day.
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5.3 |
The Company is entitled to make deductions from the Employee's remuneration to the extent not prohibited under the Employment Ordinance. This includes deductions made at the request of the Employee in writing in respect of contributions to be paid by the Employee through the Company for the purpose of any relevant benefit schemes. |
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5.4 |
GROUP INSURANCE COVERAGE |
The Employee shall be covered under the Company’s group insurance policies applicable to its employees, subject to the terms of the relevant insurance policy and the Employee satisfying any requirements of the insurer and Company. Details of the group insurance schemes are set out in the Employee Handbook. The Company reserves the right to terminate or substitute other insurance policies for such policies or amend the scale of benefits of such policies including the level of benefits from time to time.
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6. |
MANDATORY PROVIDENT FUND |
Unless exempt, the Employee will be enrolled in a Mandatory Provident Fund Scheme selected by the Company, to which both the Employee and the Company are required to make contributions in accordance with the Mandatory Provident Fund Schemes Ordinance. The Company will deduct from the Employee’s monthly salary an amount equivalent to his mandatory employee contribution to be paid into the Mandatory Provident Fund Scheme.
NEW INNOVATIONS LIMITED
21A, World Trust Tower, 50 Stanley Street, Central, Hong Kong
|
7. |
EXPENSES |
The Company shall reimburse the Employee for all reasonable out-of-pocket expenses incurred by the Employee in the proper performance of his duties under this Agreement, subject to such expenses being in accordance with any Expenses Policy that may be issued by the Company from time to time and the Employee providing appropriate documentary evidence of such expenses in such manner as the Company may require.
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8. |
TAXATION |
The Employee is responsible for his own personal taxes of whatever kinds due in any jurisdiction with respect to this employment including but not limited to any payments, reimbursements and benefits received from the Company.
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9. |
ANNUAL LEAVE |
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9.1 |
In addition to general holidays (excluding Sundays) published in the Government Gazette, the Employee shall have [ ] working days paid annual leave (inclusive of statutory annual leave) for each Leave Year, which runs from 1 January to 31 December. If the Employee commences employment part way through a leave year, the Employee is entitled to paid annual leave on a pro-rata basis from the Commencement Date. |
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9.2 |
Annual leave is to be taken at times mutually agreed in advance with the Company, any annual leave application during the probation period shall mutually agree in advance with the Company. The Employee is deemed to take his entitlement to statutory annual leave first in any Leave Year. The Company reserves the right to require that annual leave in excess of the Employee’s statutory annual leave be taken at times determined by the Company. |
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9.3 |
Any accrued annual leave entitlement unused at the end of a Leave Year may only be carried over to the next Leave Year under the regulations in “Staff Handbook”. No payment in lieu will be paid for annual leave not taken unless such payment in lieu is permitted in accordance with section 41E of the Employment Ordinance upon request of the Employee. However, on termination of employment, if the Employee service the Company more than 3 months, the Employee will be entitled to receive payment in lieu of any accrued unused statutory annual leave calculated on daily rate of annual leave pay. If on the Termination Date the Employee has taken annual leave in excess of his accrued entitlement he will reimburse such excess to the Company, calculated on the same basis as was paid to the Employee at the relevant time. |
NEW INNOVATIONS LIMITED
21A, World Trust Tower, 50 Stanley Street, Central, Hong Kong
|
9.4 |
The Employee may be required to work additional hours on a statutory rest day, statutory holiday or public holiday as necessary to fulfil the Employee’s work commitments. In such case, the following Saturday(s) will be treated as the Employee’s substituted or alternate holiday(s). In addition, Employee will be compensated by additional leave per the actual working hours worked within 30 days after that statutory rest days, statutory holiday or public holiday. |
|
9.5 |
The Employee will be subject to the terms and conditions of the Company's leave policy which may be varied from time to time. |
|
10. |
SICK LEAVE |
|
10.1 |
If and whenever the Employee is absent from work due to illness, injury or accident, the Employee shall immediately notify the department head or Human Resources by telephone or email of his absence. |
|
10.2 |
The Employee is entitled to be paid sickness allowance in accordance with the Employment Ordinance (Cap. 57). Payment of salary during any period of sick leave not covered or in excess of that required under the Employment Ordinance is in the sole discretion of the Company. Details please refer to “Staff Handbook” |
|
11. |
CONFIDENTIALITY |
|
11.1 |
In the course of the Employee’s employment with the Company, he will receive and have access to information which is confidential to the Company, other Group Companies and their clients. The Employee agrees and undertakes to maintain in strict confidence any and all information concerning the business and financing of the Company, its dealings, transactions and affairs and likewise in relation to its Group Companies and their clients’ affairs acquired during his employment with the Company, as well as confidential information of any other third parties to which he may have access. |
NEW INNOVATIONS LIMITED
21A, World Trust Tower, 50 Stanley Street, Central, Hong Kong
|
11.2 |
During and after the Employee’s employment with the Company, the Employee must not (unless required to do so by law, court order or in the proper performance of the Employee’s duties under this Agreement): |
|
(a) |
use any trade secrets, intellectual property or Confidential Information of or relating to the Company or any Group Company other than for the Company or Group Company as the case may be; or |
|
(b) |
divulge or disclose any trade secrets, intellectual property or Confidential Information of or relating to the Company or any Group Company to any third party. |
|
11.3 |
For the purpose of this Agreement, “Confidential Information” means any confidential information of the Company and any Group Company, including but not limited to: |
|
(a) |
relationships or arrangements with the actual or potential clients of the Company or any Group Company; |
|
(b) |
the business methods, finances, marketing or development strategies of the Company or any Group Company; |
|
(c) |
Compensation data, personnel information or lists, financial information, pending projects and proposals, personnel records and software; Any confidential or propriety information, which is circulated within the Company via its internal electronic mail system or otherwise; |
|
(d) |
information divulged to the Company or any Group Company by a third party in confidence; and |
|
(e) |
any information relating to the Company, any Group Company or any of its clients which the Company, the Group Company or the relevant client reasonably considers to be confidential. |
Save that Confidential Information does not include information which is in the public domain (other than by reason of a breach of this clause by the Employee).
|
11.4 |
The Employee shall at all times use his best endeavors to maintain the confidentiality of and to prevent the publication or disclosure of any and all information referred to in this clause both during and after his employment ends. |
|
11.5 |
Any Confidential Information produced or received by the Employee during his employment shall be the property of the Company and all such property and copies thereof shall be surrendered by him to the Company immediately upon the termination of his employment or at the request of the Company at any time during the course of his employment. |
NEW INNOVATIONS LIMITED
21A, World Trust Tower, 50 Stanley Street, Central, Hong Kong
|
11.6 |
The Company and the Employee are also required to comply with the Personal Data (Privacy) Ordinance of Hong Kong (Chapter 486, Laws of Hong Kong), which applies to all personal data relating to other employees, clients, customers, suppliers and other third party contacts of the Company or any Group Company. The Employee agrees to take all reasonable steps to protect personal data or sensitive information disclosed to him in the course of his employment and that he shall not to use or disclose such information other than for the purposes for which it was collected and consistent with the requirements of the Personal Data (Privacy) Ordinance. |
|
12. |
INTELLECTUAL PROPERTY |
|
12.1 |
The Employee acknowledges and agrees that the Company has exclusive ownership of any intellectual property rights created or developed by the Employee (whether solely or jointly with others) during the Employee’s employment with the Company if such intellectual property rights: |
|
(a) |
are capable of exploitation by the Company in the normal course of its business; or |
|
(b) |
are so created or developed during the course of or in connection with the Employee’s employment by the Company. |
|
12.2 |
The Employee will provide the Company with adequate and current written documentation of all such intellectual property rights and will execute all necessary documents and provide any assistance required (at the Company’s expense) during and subsequent to the Employee’s employment to enable the Company to obtain for itself or its nominees, patents, copyrights or other legal protection for such inventions in any and all countries. |
|
13. |
CONFLICT OF INTEREST |
|
13.1 |
During the period of the Employee’s employment with the Company, the Employee is not permitted to engage in any activities which may conflict with the interests of the Company and shall not, without the prior written consent of the Company, be directly or indirectly engaged, interested or concerned in the conduct of any other business, except holding for investment purposes of shares or securities in any companies. Details please refer to “OUTSIDE BUSINESS ACTIVITIES DECLARATION FORM” which should be completed and submitted by the Employee as one of the necessary onboarding procedure. Unless the Employee has obtained prior written approval from the Company, the Employee cannot work for another employer during the period of the Employee’s employment with the Company. |
NEW INNOVATIONS LIMITED
21A, World Trust Tower, 50 Stanley Street, Central, Hong Kong
|
14. |
TERMINATION |
|
14.1 |
The Employee’s employment under this Agreement may be terminated at any time by either the Employee or the Company by giving the other party notice or payment in lieu of notice, the agreed period of notice being as follows: |
|
(a) |
during the first month of the Employee’s probation period, by either party without notice or payment in lieu; |
|
(b) |
for the remainder of the Employee’s probation period, the agreed notice period shall be [ ] days notice in writing or payment in lieu; and |
|
(c) |
after completion of the Employee’s probation period, the agreed notice period shall be [ ] months notice in writing or payment in lieu. |
|
14.2 |
The Company may terminate the Employee’s employment immediately without notice or payment in lieu: |
|
(a) |
if the Employee in the course of his employment: |
|
(i) |
wilfully disobeys a lawful and reasonable order; |
|
(ii) |
misconducts himself such conduct being inconsistent with the due and faithful discharge of his duties; |
|
(iii) |
is guilty of fraud or dishonesty; |
|
(iv) |
is habitually neglectful in his duties; or |
|
(b) |
on any other ground on which the Company would be entitled to terminate his employment without notice at common law. |
|
14.3 |
The Company reserves the right to require the Employee not to attend work and/or not to undertake all or any of the Employee’s duties under this Agreement during any period of notice (whether given by the Employee or the Company), provided always that the Company shall continue to pay the Employee’s salary and contractual benefits whilst the Employee remains employed by the Company. |
NEW INNOVATIONS LIMITED
21A, World Trust Tower, 50 Stanley Street, Central, Hong Kong
|
14.4 |
On termination of the Employee’s employment for any reason (or earlier if requested), the Employee must: |
|
(a) |
return and deliver up to the Company all property (including but not limited to any documents (in hard or soft copy), business cards, software, credit cards, keys and access card, laptops, mobile phones or other telecommunication devices) belonging to the Company which are in his possession or control; and |
|
(b) |
irretrievably delete any Confidential Information stored on any personal electronic device or magnetic or optical disk or memory that is in his possession or control outside the premises of the Company. |
|
15. |
RESTRICTIVE COVENANTS |
|
15.1 |
The Employee hereby covenants with the Company that he shall not during the period of his employment hereunder and for a period of [ ] months after the termination of this Agreement for whatever reason, whether directly or indirectly, on his own account or in conjunction with or on behalf of any person or entity: |
|
(a) |
solicit or entice away from the Company, or employ or cause any third party, to employ or engage any person who has been a client, agent, employee, contractor, sub-contractor, or supplier of the Company at any time within a period of twelve months prior to the termination of this Agreement, and |
|
(b) |
solicit or induce or otherwise interfere with any person or entity who is or has been a client, agent, contractor, sub-contractor, supplier or business associate of the Company to cease dealing with the Company or to restrict or reduce its volume, extent or duration of trade, dealing or transaction with the Company, or introduce or cause to be introduced such person or entity to any business or activity which is in competition or otherwise inconsistent with the interest of the Company. |
|
15.2 |
During the term of this Agreement and during the period commencing with the date of termination of this Agreement and ending on the date [ ] months later, the Employee shall not, in Hong Kong, whether directly or indirectly, on his account or in conjunction with or on behalf of any entity or business, whether through himself or any company or business where he directly or indirectly holds any ownership or beneficial interests (save and except for ownership or beneficial interests in any listed company, whether listed in or outside Hong Kong, provided that his ownership or beneficial interests in the said listed company does not exceed 1% of the total issued share capital of that said listed company) or in which he is a director or partner or proprietor, be employed by, be involved in the activities or business of, or provide services (unless with the consent of the Company) for related activities of which the Employee is engaged in during his employment with the Company, to any of the Company’s agents, clients, competitors, or other persons or businesses with which the Company has or has had commercial relations. |
NEW INNOVATIONS LIMITED
21A, World Trust Tower, 50 Stanley Street, Central, Hong Kong
|
15.3 |
The parties hereto acknowledge and confirm that the above covenants or restrictions in this Clause 16 are reasonable and necessary to protect the legitimate business interests of the Company. |
|
16. |
PERSONAL DATA |
The Employee acknowledges and agrees that the Employee has read and understood the “Personal Information Collection Statement” contained in Schedule 1 to this Agreement.
|
17. |
SEVERABILITY AND ACCRUED RIGHTS |
|
17.1 |
The various provisions of this Agreement are severable and if any provision is held to be invalid or unenforceable by any court such invalidity and/or unenforceability will not affect the remaining provisions in this Agreement which will remain valid and enforceable. |
|
17.2 |
The expiration or termination of this Agreement howsoever arising shall not operate to affect such provisions of this Agreement as are expressed to operate or have effect thereafter and shall be without prejudice to any accrued rights or remedies of the parties. |
|
18. |
THIRD PARTY RIGHTS |
|
18.1 |
The Agreements (Rights of Third Parties) Ordinance shall not apply to this Agreement. No person other than the parties to this Agreement and any Group Company shall have any rights under it and it will not be enforceable by any person other than the parties to it and any Group Company. |
NEW INNOVATIONS LIMITED
21A, World Trust Tower, 50 Stanley Street, Central, Hong Kong
|
19. |
GOVERNING LAW AND JURISDICTION |
The Agreement and the employment relationship between the Company and the Employee shall be governed by, and interpreted in accordance with the laws of the Hong Kong. In respect of any legal action or proceedings arising out of or in connection with the Agreement, the parties irrevocably submit to the non-exclusive jurisdiction of the Labour Tribunal and the Courts of the Hong Kong.
|
20. |
ENTIRE AGREEMENT |
|
20.1 |
This Agreement sets out the entire agreement and understanding between the parties and supersedes all other prior negotiations and agreements whether written or oral between the Employee and the Company relating to the employment. In the event of any conflict or inconsistency between the terms of this Agreement and any Employee Handbook the terms of this Agreement shall prevail. The Employee acknowledges and warrants that he is not entering into this Agreement reliant on any representation not expressly set out in this Agreement. |
|
20.2 |
Save as expressly provided herein, any variation of the terms of this Agreement will not be effective unless it is in writing and signed by both parties. |
|
21. |
DEFINITIONS |
|
21.1 |
For the purposes of this Agreement: |
|
(a) |
“Group Company” means any subsidiary of the Company, the parent or holding company of the Company and any subsidiary of any such parent or holding company; |
|
(b) |
“Termination Date” means the last day of the Employee’s employment with the Company, howsoever arising. |
|
22. |
Conditions of This Employment Agreement |
|
22.1 |
Honesty and Disclosure |
The Company's business requires that the Employee is scrupulously honest and beyond reproach and does not bring disrepute to the good name and reputation of the Company. Therefore, this Agreement is made on the understanding that the Employee has accurately and fully disclosed to the Company all relevant and appropriate information to enable the Company to make a fully informed decision to offer employment.
NEW INNOVATIONS LIMITED
21A, World Trust Tower, 50 Stanley Street, Central, Hong Kong
|
22.2 |
Pre-employment Checks |
The Company must be able to verify to its satisfaction all information provided by the Employee in his employment application and/or during the recruitment process. This may include criminal, legal, compliance investigations as well as employment and educational reference checks. A failure to pass these pre-employment checks to the satisfaction of the Company may lead to a withdrawal of the employment agreement.
|
22.3 |
Regulatory Authority and Registration |
If the Employee is required to apply for registration with any regulatory authority or if he or she is required to obtain any license or other form of authorization in order to perform his work, the Employee Agreement is conditional upon the Employee obtaining such valid registration, license or authorization.
|
22.4 |
If employment has commenced, the discovery that the Employee has provided false or misleading information may result in disciplinary action up to and including termination. Should the Company receive unsatisfactory references following the commencement of employment, it reserves the right to terminate the employment. |
|
22.5 |
The Agreement is effective from the date when both parties have signed the Agreement and fulfil any requirements above. |
NEW INNOVATIONS LIMITED
21A, World Trust Tower, 50 Stanley Street, Central, Hong Kong
IN WITNESS whereof this Agreement has been executed as an Agreement by the parties hereto the day and year first above written.
EXECUTED as an AGREEMENT by
NEW INNOVATIONS LIMITED (“EMPLOYER”)
Acting by:-
[ ]
Authorized Signor
SIGNED AND DELIVERED by
[ ] (“EMPLOYEE”)
HKID Number: [ ]
NEW INNOVATIONS LIMITED
21A, World Trust Tower, 50 Stanley Street, Central, Hong Kong
SCHEDULE 1
PERSONAL INFORMATION COLLECTION STATEMENT
Upon your signing of the Employment Agreement and throughout the course of the Employee’s employment with the Company, the Company may collect personal data in respect of the Employee (and the Employee’s spouse and dependents, where applicable) in relation to your employment, professional requirements, and for various human resource management purposes. These purposes include, but are not limited to: reference check, provision of benefits, compensation and payroll; facilitating performance appraisals, facilitating medical claims; promotion and career development activities; making tax returns; complying with our obligations as an employer and the review of employment decisions; complying with applicable professional requirements.
Disclosure of your information
The Company will try its best to maintain the privacy of all personal data provided by the Employee. Only for the purposes stated above for which the personal data are to be used, the Company may transfer the personal data provided by the Employee to any (whether in Hong Kong or abroad) Group Company, the Company’s insurers and bankers, medical practices providing medical cover for employees, administrators or managers of our provident fund scheme, professional or other regulators which have jurisdiction over the Company, our authorized reference check agent(s), and other companies engaged in contractual activities on the Company’s behalf; or with the Employee’s consent or as required by law. The Company will not transfer or disclose the personal data provided by the Employee to any third party except as stated.
The Company may retain certain personal data of employees even after they cease employment with the Company. Such data are required for any residual employment-related activities in relation to the former employee including, but not limited to the provision of job reference, processing applications for re-employment, matters relating to retirement benefits and allowing us to fulfill agreementual, statutory or professional obligations.
Access to Data
Subject to applicable personal data protection laws, the Employee has a right to:
|
1. |
Check whether the Company holds any personal data relating to the Employee and, if so, obtain copies of such data. |
|
2. |
Require the Company to correct any personal data relating to the Employee which is inaccurate for the purpose for which it is being used. |
The person to whom request for access to data or correction of data or for information regarding policies and practices and kinds of data held are to be addressed shall be the Human Resources Department of the Company.
NEW INNOVATIONS LIMITED
21A, World Trust Tower, 50 Stanley Street, Central, Hong Kong
Exhibit 8.1
List of Significant Subsidiaries
|
Name of Subsidiary |
Place of Incorporation |
|
New Innovations BVI Limited |
British Virgin Islands |
|
New Innovations Limited |
Hong Kong |
|
BitVentures America Inc |
United States |
|
Freedom Mining LLC |
United States |
|
BTV-NDR eCommerce LLC |
United States |
|
Santech Global Hong Kong Limited |
Hong Kong |
Exhibit 11.1
BITVENTURES LIMITED
INSIDER TRADING POLICY
The Board of Directors (the “Board”) of BitVentures Limited (together with its subsidiaries, the “Company”) has adopted this Insider Trading Policy (this “Policy”) to provide guidance to the Company’s employees, officers and directors with respect to transactions in the Company’s Securities (as defined below). The Company has adopted this Policy and the procedures set forth herein to help prevent insider trading and to assist the Company’s employees, officers and directors in complying with their obligations under the federal securities laws. Employees, officers and directors are individually responsible for understanding and complying with this Policy and informing Family Members (as defined below) and other relevant persons who are subject to this Policy (as discussed below) about this Policy’s requirements.
Insider trading is unlawful and could result in civil and/or criminal liability and penalties including substantial fines and imprisonment. Violation of this Policy will result in disciplinary action, which may include termination of your employment or other relationship with the Company.
SCOPE AND APPLICABILITY
Scope
This Policy applies to all transactions in the Company’s Securities, including common stock, restricted stock, restricted stock units, options and warrants to purchase common stock and any other debt or equity Securities the Company may issue from time to time, such as bonds, preferred stock and convertible debentures, as well as to derivative Securities relating to the Company’s Securities, whether or not issued by the Company, such as exchange-traded options. This Policy also imposes specific blackout period and pre-clearance procedures on officers, directors and certain other designated employees who receive or have access to Material Non-Public information (as defined below) regarding the Company.
Applicability
This Policy applies to (collectively referred to in this Policy as “you”):
| ☐ |
The Company’s (i) employees, executive officers, and directors and (ii) agents, consultants and contractors ((i) and (ii) together, “Company Personnel”); |
| ☐ |
Individuals (including but not limited to Family Members of Company Personnel) who reside with Company Personnel; |
| ☐ |
Family Members of Company Personnel who do not reside with such Company Personnel, but whose transactions in Company Securities are (i) directed by such Company Personnel and/or (ii) subject to the influence or control of such Company Personnel (such as parents or children who consult with Company Personnel before they trade in Company Securities); and |
| ☐ |
As to each of the above persons, entities over which any such person above has influence or control (such as corporations, partnerships or trusts). |
For purposes of this Policy, “Family Members” means children, stepchildren, parents, stepparents, spouses, siblings, mothers-in-law, fathers-in-law, sons-in-law, daughters-in-law, brothers-in-law and sisters-in-law.
As Company Personnel, it is your responsibility to inform Family Members who are subject to this Policy and other relevant persons about this Policy’s requirements.
If you have any doubt as to whether this Policy applies to you or whether a proposed transaction is covered by this Policy, contact the General Counsel.
TRADING RESTRICTIONS
No Trading While in Possession of Material Non-Public Information
You must not trade in any company’s Securities while you are aware of information concerning such company that is both “Material” and “Non-Public.” This restriction applies to the Securities of the Company and of any other company for which you may become aware of Material Non-Public information through your work for the Company, including current or potential competitors, customers, suppliers or counterparties in mergers, acquisitions or other strategic transactions.
Information (positive or negative) is “Material” if a reasonable person would consider it important in deciding whether to buy, sell or hold a company’s Securities. For example, Material information may include (but is not limited to):
| ☐ |
Financial results or internal financial information |
| ☐ |
Projected sales, earnings, losses or other financial projections |
| ☐ |
Significant changes or anticipated changes in operating or financial performance, such as major write-offs or special or extraordinary charges against earnings or capital |
| ☐ |
A significant expansion or curtailment of operations |
| ☐ |
Major changes in lines of business, including significant new services or products |
| ☐ |
Significant pricing changes |
| ☐ |
Significant developments regarding customers or suppliers, such as entry into or termination of a significant agreement |
| ☐ |
Changes in control |
| ☐ |
Matters relating to cash dividends, stock repurchases or stock splits |
| ☐ |
A change in dividend policy |
| ☐ |
Stock buybacks |
| ☐ |
Significant financing transactions or borrowings, such as a significant drawdown on a credit facility or a Securities offering |
| ☐ |
Major transactions, such as mergers, tender offers or acquisitions of other companies, or major purchases or sales of assets |
| ☐ |
Major litigation, expected major litigation and related developments |
| ☐ |
Significant internal or external investigations, including government investigations, and related developments |
| ☐ |
Capital investment plans or significant capital expenditures |
| ☐ |
Significant labor disputes or significant hiring freezes |
| ☐ |
Change in the auditor or a significant notification from an auditor |
| ☐ |
Major changes in directors or senior management |
| ☐ |
Impending bankruptcy or financial liquidity problems |
| ☐ |
Significant cybersecurity incidents or risks, including vulnerabilities and breaches |
| ☐ |
Deficiencies or related developments with respect to the Company’s trading market |
Identifying whether information is Material can sometimes be difficult. As a practical matter, Materiality is often evaluated by enforcement authorities after the fact with the benefit of hindsight, when the effect of the information on the market can be quantified. Although you may be aware of information that you do not consider to be Material, enforcement authorities may conclude that such information was Material. Therefore, trading in a company’s Securities based on such information can be risky. If you have any doubt, you should consider the information to be Material or seek further guidance from the General Counsel.
Information is “Non-Public” if it has not been disclosed generally to the marketplace by one of the following methods:
| ☐ |
By press release |
| ☐ |
By public filing with the Securities and Exchange Commission (the “SEC”) |
| ☐ |
On a publicly-accessible conference call for which adequate notice to the public was given |
| ☐ |
By another method reasonably expected to effect a broad and non-exclusionary distribution of information to the public, such as via posting on the Company’s website |
After Material information has been disseminated publicly, the market must have a reasonable opportunity to absorb it. Therefore, if you are aware of Material Non-Public information, you must wait until two full trading days have elapsed following the announcement before you may trade (provided you are not aware of other Material Non-Public information at that time). For example:
| ☐ |
If a press release is issued after Nasdaq market-open on a Tuesday, you may not trade until Friday (assuming no intervening holidays during that week when the market is closed). |
| ☐ |
If a press release is issued after Nasdaq market-close on a Friday, you may not trade until the following Wednesday (assuming the market is open on Monday and Tuesday). |
If you are unsure whether information of which you are aware is Material or Non-Public, you should consult with the General Counsel.
“Securities” includes shares of common stock, shares of preferred stock, stock options, restricted stock, restricted stock units, warrants, debt securities, any other type of security a company may issue, any instrument that grants to its holder a direct or indirect ownership interest in a company or any debt obligation of a company and any derivative securities of such securities. However, the term “Security” does not include ownership interests in mutual funds, exchange-traded funds, hedge funds or similar fund-like vehicles in which the holder of the interest has no ability, directly or indirectly, to direct or influence the purchase or sale of the fund’s securities.
The terms “trading” and “transaction” with respect to Securities include, among other things:
| ☐ |
Purchases and sales of Securities in public markets |
| ☐ |
Sales of Securities obtained through the exercise of employee stock options, including cashless exercises |
| ☐ |
Hedging transactions, including transactions involving prepaid variable forward contracts, equity swaps, collars and exchange funds |
| ☐ |
Pledging transactions, including using Securities to secure a loan |
| ☐ |
Short sales of Securities |
No Disclosure (“Tipping”)
You must not disclose (“tip”) Material Non-Public information to any other person (including Family Members and friends or anyone else and including through any means whether private communication or through social media or other communication channels). Should Material Non-Public information you communicated to another person be used by such person to trade in Company Securities or the Securities of any other company, you may be subject to prosecution for violation of the insider trading laws.
Tipping also includes making recommendations, expressing opinions about trading and “signaling” while aware of Material Non-Public information. There are strict legal prohibitions against tipping, and you can be liable for tipping even if you do not have any financial interest in or profit from the other person’s trade.
In the course of performing your work for the Company, you may communicate Material Non-Public information to others on a “need to know” basis upon express commitment from the other person that they will respect its confidentiality, but you must not share Material Non-Public information with persons who do not have a legitimate business reason to know the information.
You must not recommend to another person that he or she buy, hold or sell Company Securities, even if you are not aware of Material Non-Public information concerning the Company. However, certain officers and employees of the Company are authorized to discuss Company business with members of the investment community, such as analysts and investment advisors, as discussed below.
No Short Selling
Company Personnel are prohibited from short selling Company Securities. Selling short involves transactions in which the short-seller borrows Securities from a broker, sells them and later acquires the Securities in the open market or otherwise to repay the borrowed Securities to the broker. In a short sale, the seller will make a profit if the price of the Securities declines after the sale such that the Securities can be acquired in the open market at a lower price. Short selling Company Securities could signal to the market that the seller lacks confidence in the Company. Company Personnel are also prohibited from using derivative Securities to achieve a comparable transaction (i.e., where the trader can only profit if the price of the Security declines).
No Hedging
Company Personnel are prohibited from hedging ownership of Company Securities, including trading in publicly-traded options, puts, calls, or other derivative instruments related to Company Securities. Hedging transactions may insulate an owner of Securities from upside or downside price movement in Company Securities, which can result in the perception that the owner no longer has the same interests as other Company stockholders.
Pre-Approval of Pledges and Margin Stock
Because Securities held in a margin account or pledged as collateral may be sold without your consent by the broker if you fail to meet a margin call or by the lender if you default on a loan, a margin or foreclosure sale may result in unlawful insider trading. Because of this risk, the following transactions by Company Personnel must be reviewed and pre-approved by the General Counsel: (i) all pledges of Company Securities or the Securities of any other company designated by the General Counsel and (ii) the deposit in margin accounts of Company Securities or the Securities of any other company designated by the General Counsel.
Exceptions to the Trading Restrictions in this Policy
The trading restrictions in this Policy, including blackout periods and pre-clearance requirements, do not apply to the following transactions in Company Securities:
(a) Certain Stock Option Exercises: The exercise of stock options granted by the Company as long as the underlying Company Securities received upon such exercise are not sold (whether to fund the exercise, pay taxes or otherwise). For the avoidance of doubt, the trading prohibitions in this Policy apply to cashless exercises of stock options.
(b) Transactions Under Pre-Arranged Trading Plans: Trades made in accordance with a properly qualified, adopted and submitted Pre-Arranged Trading Plan (as defined below). The SEC permits trades to be executed even if the securityholder is aware of Material Non-Public information if the trade is executed pursuant to a written trading plan that meets the applicable SEC rules and regulations for such plans (a “Pre-Arranged Trading Plan”). Generally, such plans must be established in good faith at a time when the securityholder is not aware of Material Non-Public information and must provide specific instructions as to amount, price and timing for the purchase or sale of Securities. Alternatively, a Pre-Arranged Trading Plan can delegate investment discretion to an independent third party, such as a broker, who then makes trading decisions without further input from the securityholder.
Any Pre-Arranged Trading Plan established by a Restricted Person (defined below) must be reviewed and pre-approved by the General Counsel, and may be established only at a time when the Restricted Person is not subject to a blackout period (described below).
TRADING WINDOWS
Restricted Persons may trade in Company Securities:
| ☐ |
Only during “open” trading windows and |
| ☐ |
Only if they are not aware of Material Non-Public information concerning the Company |
A “Restricted Person” is:
| ☐ |
A member of the Board |
| ☐ |
A person who has been designated by the Board as an “executive officer” of the Company (an “Executive Officer”) |
| ☐ |
A person who has been designated by the Board, for purposes of this policy, as an executive officer of any subsidiary of the Company (a “Subsidiary Executive Officer”) |
| ☐ |
A Company employee with the title of vice president or above |
| ☐ |
A Company employee who works in the finance, accounting, legal or investor relations department |
| ☐ |
A person who has been designated as a Restricted Person by the General Counsel, which designation may be for a specified period of time |
| ☐ |
As to each of the above persons: |
|
○ |
Entities over which any such person above has influence or control (such as corporations, partnerships or trusts) |
|
○ |
Individuals (including but not limited to Family Members) who reside with any such person above |
|
○ |
Family Members of any of such person above who do not reside with such person, but whose transactions in Company Securities are (i) directed by such person and/or (ii) subject to the influence or control of such person (such as parents or children who consult with such person before they trade in Company Securities) |
“Open” trading window
The “trading window” is the period of time during which Restricted Persons are permitted to trade Company Securities, as long as they are not aware of Material Non-Public information concerning the Company. At these times, the trading window is said to be “open.”
Advance notice of the applicable trading window dates for each quarter will be emailed to Restricted Persons who are employed by or are directors of the Company. Such Restricted Persons will also be notified by email prior to the close of the trading window each quarter. However, each Restricted Person is responsible for complying with the trading window restrictions described in this Policy even if a notice has not been received.
Please note that even if the trading window is open, if you are aware of Material Non-Public information concerning the Company, you may not trade in Company Securities.
Blackout periods
There will be routine “blackout” periods when the trading window will be closed for a period of time in connection with the release of the Company’s quarterly earnings. The start and end dates of each quarterly earnings blackout period are as follows:
| ☐ |
Start of quarterly earnings blackout period: The quarterly earnings blackout period starts at the close of the market on the 14th calendar day prior to the last business day of any quarter. |
| ☐ |
End of quarterly earnings blackout period: The quarterly earnings blackout period ends at the open of the market two full trading days after the later of (i) the public release of the Company’s earnings for such prior quarter or (ii) the conference call with analysts regarding the Company’s earnings for such prior quarter. |
Restricted Persons must not trade in Company Securities during any blackout period even if they are not aware of Material Non-Public information concerning the Company. The restrictions against trading during any blackout period also apply to the fulfillment of “limit” orders by brokers (i.e., orders to be executed only at a certain stock price), and Restricted Persons will need to ensure that any “limit” orders placed with brokers will not be fulfilled during any blackout period, unless an exception applies (discussed above).
Special blackout periods
Under certain circumstances, the Company may close the trading window for a “special” blackout period and require all or certain Restricted Persons, or certain individuals or groups that have been designated as Restricted Persons for purposes of the special blackout period, to refrain from trading. If you have been designated a Restricted Person for purposes of the “special” blackout period, you will be notified of such designation by the General Counsel. Notice of any “special” blackout period will be emailed to the applicable Restricted Persons who are employed by or are directors of the Company and closing of the trading window must be kept confidential.
MANDATORY PRE-CLEARANCE OF TRADING
All Restricted Persons must receive pre-clearance from the General Counsel or, in the case of the General Counsel, the CFO, prior to buying or selling any Securities of the Company or the Securities of other companies designated by the General Counsel, unless an exception applies (as described above).
Pre-clearance of a proposed transaction is effective from the time the General Counsel grants the pre-clearance through the end of the second full trading day following the grant of pre-clearance, unless a different period is specified in the pre-clearance from the General Counsel. If the transaction order is not executed within that time period, pre-clearance for the transaction must be requested again. A response from the General Counsel that a pre-clearance request has been denied must be kept confidential. Pre-clearance of a transaction does not constitute a recommendation by the Company or any of its employees or agents that you should engage in the proposed transaction. Even if a proposed transaction receives pre-clearance, if you become aware of Material Non-Public information concerning the Company before the transaction is executed, you must not complete the transaction.
PROMPT REPORTING OF TRADES BY DIRECTORS, EXECUTIVE OFFICERS AND SUBSIDIARY EXECUTIVE OFFICERS
All directors, Executive Officers and Subsidiary Executive Officers are required to submit to the General Counsel a copy of any trade order or confirmation relating to the purchase or sale of Company Securities within one business day of any such transaction, including but not limited to transactions pursuant to a Pre-Arranged Trading Plan. This information is necessary to enable the Company to monitor trading by directors, Executive Officers and Subsidiary Executive Officers and ensure that all such trades are properly reported to the SEC.
POST-TERMINATION TRANSACTIONS
This Policy will continue to apply to you after your employment with the Company terminates or after you cease to provide services to the Company until such time as you are no longer aware of Material Non-Public information and any applicable blackout period has expired.
CONFIDENTIALITY AND UNAUTHORIZED DISCLOSURE OF COMPANY INFORMATION
Until Material Non-Public information relating to the Company is disclosed to the public, it must be kept in strict confidence. Utmost care must be exercised at all times. For example, conversations in public places, such as elevators, restaurants and public transportation should be limited to matters that do not involve information of a sensitive or confidential nature. In addition, do not transmit confidential information through any unsecured means. Remember that cellular telephone conversations are often overheard and that voicemails and emails may be retrieved by persons other than the intended recipients. You are required to contact the General Counsel immediately if you become aware of an inadvertent disclosure of Material Non-Public information. See above for guidance on what information is “Material” and/or “Non-Public.”
To ensure that the Company’s confidential information is protected to the maximum extent possible, only specifically authorized officers and employees are permitted to release Material information to the public or respond to inquiries from the media, securities industry professionals (such as analysts and investment advisors), Company stockholders or others outside the Company.
If you are contacted by anyone outside the Company seeking information about the Company, and if you have not been expressly authorized to provide information by the CEO or CFO, you should refer the request to the CFO or Investor Relations.
CONSEQUENCES OF VIOLATIONS
Any violation of the insider trading laws (including tipping) could result in severe civil and/or criminal liability and penalties for you and the Company, including substantial fines and imprisonment. The SEC and other regulatory authorities use sophisticated electronic surveillance techniques to uncover insider trading. There are no minimums or limits on the size of transaction that will trigger insider trading liability, and small trades have resulted in SEC investigations, prosecution and penalties.
In addition, violations of this Policy will result in disciplinary action, up to and including termination of your employment or other relationship with the Company, and any transaction executed in violation of this Policy will be subject to reversal, with all costs of reversal charged to you.
INDIVIDUAL RESPONSIBILITY AND ANNUAL CERTIFICATION
Any decision to trade is your responsibility. Any approval by the Company of a Pre-Arranged Trading Plan and/or preclearance of a trade does not constitute the Company giving advice on whether or not to make a trade. You are responsible for communicating the Policy and ensuring that your families, other members of your household and any entities over which you may exercise voting or investment control comply with this Policy.
Company Personnel are required to provide an annual certification as to compliance with the Policy.
POLICY REVIEW
The Board (or delegated Committee of the Board) shall review this Policy periodically.
Questions about this Policy should be directed to the General Counsel.
INSIDER TRADING POLICY
ANNUAL CERTIFICATION
I hereby certify that I have read and understand the Insider Trading Policy (the “Policy”) of BitVentures Limited (the “Company”), a copy of which was distributed with this certificate. I have complied with the Policy, I will continue to comply with the Policy and I have communicated the Policy to, as applicable, (a) entities over which I have influence or control, (b) Family Members and individuals who reside with me and (c) Family Members who do not reside with me, but whose transactions in Company Securities are directed by me and/or subject to my influence or control.
| Signature: |
| Name: |
| Department or Title: |
| Date: |
Exhibit 12.1
Certification by the Principal Executive Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Lawrence Wai LOK, certify that:
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1. |
I have reviewed this annual report on Form 20-F of BitVentures Limited; |
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2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
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3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report; |
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4. |
The company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have: |
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(a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
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(b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
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(c) |
Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
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(d) |
Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and |
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5. |
The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions): |
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(a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and |
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(b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting. |
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Date: October 16, 2026 |
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By: |
/s/ Lawrence Wai LOK |
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Name: Lawrence Wai LOK |
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Title: Chairman and CEO (Principal Executive Officer) |
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Exhibit 12.2
Certification by the Principal Financial Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Kelvin Chun YU, certify that:
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1. |
I have reviewed this annual report on Form 20-F of BitVentures Limited; |
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2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
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3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report; |
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4. |
The company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have: |
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(a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
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(b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
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(c) |
Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
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(d) |
Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and |
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5. |
The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions): |
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(a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and |
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(b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting. |
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Date: October 16, 2026 |
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By: |
/s/ Kelvin Chun YU |
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Name: Kelvin Chun YU |
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Title: Head of Finance (Principal Financial Officer) |
Exhibit 13.1
Certification by the Principal Executive Officer
Pursuant to 18 U.S.C. Section 1350, as adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
In connection with the Annual Report of BitVentures Limited (the “Company”) on Form 20-F for the year ended June 30, 2026 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Lawrence Wai LOK, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Date: October 16, 2026 |
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By: |
/s/ Lawrence Wai LOK |
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Name: |
Lawrence Wai LOK |
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Title: |
Chairman and CEO (Principal Executive Officer) |
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Exhibit 13.2
Certification by the Principal Financial Officer
Pursuant to 18 U.S.C. Section 1350, as adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
In connection with the Annual Report of BitVentures Limited (the “Company”) on Form 20-F for the year ended June 30, 2026 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Kelvin Chun YU, Principal Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:
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(1) |
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
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(2) |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
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Date: October 16, 2026 |
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By: |
/s/ Kelvin Chun YU |
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Name: |
Kelvin Chun YU |
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Title: |
Head of Finance (Principal Financial Officer) |
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Exhibit 15.1
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AUDIT ALLIANCE LLP |
 |
| A Top 18 Audit Firm |
| 10 Anson Road, #20-16 International Plaza, Singapore 079903. |
| UEN: T12LL1223B GST Reg No: M90367663E Tel: (65) 6227 5428 |
| Website: www.allianceaudit.com |
Consent of Independent Registered Public Accounting Firm
We consent to the incorporation by reference in the registration statement (No. 333-260129) on Form S-8 of our report dated October 16, 2026, with respect to the consolidated financial statements of BitVentures Limited as of June 30, 2025 and 2026 and for the years ended June 30, 2024, 2025 and 2026.
/s/ Audit Alliance LLP
Audit Alliance LLP
Singapore
October 16, 2026
Exhibit 15.2
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BitVentures Limited Level 15, AIA Central No.1 Connaught Road Central Central, Hong Kong |
Email vchan@applebyglobal.com
Direct Dial +852 2905 5759 |
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Tel +852 2523 8123 Fax +852 2524 5548 |
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| Appleby Ref 470985.0004 | |||
| 15 October 2026 | |||
| Suites 3504B-06 | |||
| 35/F, Two Taikoo Place | |||
| 979 King’s Road | Dear Sirs | ||
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Quarry Bay
Tel +852 2523 8123
applebyglobal.com
Managing Partner
Partners Vincent Chan Michael Makridakis Freya Xu |
BitVentures Limited
We have acted as legal advisers as to the laws of the Cayman Islands to BitVentures Limited, an exempted company with limited liability incorporated in the Cayman Islands, in connection with the filing by the Company with the United States Securities and Exchange Commission (the “SEC”) of an annual report on Form 20-F for the fiscal year ended June 30, 2026 (the “Annual Report”).
We consent to the reference to our firm under the heading “Item 10. Additional Information—E. Taxation—Cayman Islands Taxation” in the Annual Report. We also consent to the filing with the SEC of this consent letter as an exhibit to the Annual Report.
In giving such consent, we do not thereby admit that we come within the category of persons whose consent is required under Section 7 of the Securities Act of 1933, or under the Securities Exchange Act of 1934, in each case, as amended, or the regulations promulgated thereunder.
Yours faithfully
/s/ Appleby Appleby |
||
| Bermuda ■ British Virgin Islands ■ Cayman Islands ■ Guernsey ■ Hong Kong ■ Isle of Man ■ Jersey ■ Mauritius ■ Seychelles ■ Shanghai ■ Shenzhen | |||
Exhibit 97.1
BITVENTURES LIMITED
POLICY ON RECOUPMENT OF INCENTIVE COMPENSATION
Introduction
The Board of Directors (the “Board”) of BitVentures Limited (the “Company”) has adopted this Policy on Recoupment of Incentive Compensation (this “Policy”), which provides for the recoupment of compensation in certain circumstances in the event of a restatement of financial results by the Company. This Policy shall be interpreted to comply with the requirements of U.S. Securities and Exchange Commission (“SEC”) rules and Nasdaq Stock Market (“Nasdaq”) listing standards implementing Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”) and, to the extent this Policy is in any manner deemed inconsistent with such rules, this Policy shall be treated as retroactively amended to be compliant with such rules.
Administration
This Policy shall be administered by the Board. Any determinations made by the Board shall be final and binding on all affected individuals. The Board is authorized to interpret and construe this Policy and to make all determinations necessary, appropriate or advisable for the administration of this Policy, in all cases consistent with the Dodd-Frank Act. The Board may amend this Policy from time to time in its discretion.
Covered Executives
This Policy applies to any current or former “executive officer,” within the meaning of Rule 10D-1 under the Securities Exchange Act of 1934, as amended, of the Company or a subsidiary of the Company (each such individual, an “Executive”). This Policy shall be binding and enforceable against all Executives and their beneficiaries, executors, administrators, and other legal representatives.
Recoupment Upon Financial Restatement
If the Company is required to prepare an accounting restatement due to the material noncompliance of the Company with any financial reporting requirement under the securities laws, including any required accounting restatement to correct an error in previously issued financial statements that is material to the previously issued financial statements, or that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period (a “Financial Restatement”), the Board shall cause the Company to recoup from each Executive, as promptly as reasonably possible, any erroneously awarded Incentive-Based Compensation, as defined below.
No-Fault Recovery
Recoupment under this Policy shall be required regardless of whether the Executive or any other person was at fault or responsible for accounting errors that contributed to the need for the Financial Restatement or engaged in any misconduct.
Compensation Subject to Recovery; Enforcement
This Policy applies to all compensation granted, earned or vested based wholly or in part upon the attainment of any financial reporting measure determined and presented in accordance with the accounting principles used in preparing the Company’s financial statements, and any measure that is derived wholly or in part from such measures, whether or not presented within the Company’s financial statements or included in a filing with the SEC, including stock price and total shareholder return (“TSR”), including but not limited to performance-based cash, stock, options or other equity-based awards paid or granted to the Executive (“Incentive-Based Compensation”). Compensation that is granted, vests or is earned based solely upon the occurrence of non-financial events, such as base salary, restricted stock or options with time-based vesting, or a bonus awarded solely at the discretion of the Board and not based on the attainment of any financial measure, is not subject to this Policy.
In the event of a Financial Restatement, the amount to be recovered will be the excess of (i) the Incentive-Based Compensation received by the Executive during the Recovery Period (as defined below) based on the erroneous data and calculated without regard to any taxes paid or withheld, over (ii) the Incentive-Based Compensation that would have been received by the Executive had it been calculated based on the restated financial information, as determined by the Board. For purposes of this Policy, “Recovery Period” means the three completed fiscal years immediately preceding the date on which the Company is required to prepare the Financial Restatement, as determined in accordance with the last sentence of this paragraph, or any transition period that results from a change in the Company’s fiscal year (as set forth in Section 5608(b)(1)(i)(D) of the Nasdaq Listing Rules). The date on which the Company is required to prepare a Financial Restatement is the earlier to occur of (A) the date the Board or a Board committee (or authorized officers of the Company if Board action is not required) concludes, or reasonably should have concluded, that the Company is required to prepare a Financial Restatement or (B) the date a court, regulator, or other legally authorized body directs the Company to prepare a Financial Restatement.
For Incentive-Based Compensation based on stock price or TSR, where the amount of erroneously awarded compensation is not subject to mathematical recalculation directly from the information in the Financial Restatement, then the Board shall determine the amount to be recovered based on a reasonable estimate of the effect of the Financial Restatement on the stock price or TSR upon which the Incentive-Based Compensation was received and the Company shall document the determination of that estimate and provide it to Nasdaq.
Incentive-Based Compensation is considered to have been received by an Executive in the fiscal year during which the applicable financial reporting measure was attained or purportedly attained, even if the payment or grant of such Incentive-Based Compensation occurs after the end of that period.
The Company may use any legal or equitable remedies that are available to the Company to recoup any erroneously awarded Incentive-Based Compensation, including but not limited to by collecting from the Executive cash payments or ordinary shares of the Company from or by forfeiting any amounts that the Company owes to the Executive. Executives shall be solely responsible for any tax consequences to them that result from the recoupment or recovery of any amount pursuant to this Policy, and the Company shall have no obligation to administer the Policy in a manner that avoids or minimizes any such tax consequences.
No Indemnification
The Company shall not indemnify any Executive or pay or reimburse the premium for any insurance policy to cover any losses incurred by such Executive under this Policy or any claims relating to the Company’s enforcement of rights under this Policy.
Exceptions
The compensation recouped under this Policy shall not include Incentive-Based Compensation received by an Executive (i) prior to beginning service as an Executive or (ii) if he or she did not serve as an Executive at any time during the performance period applicable to the Incentive-Based Compensation in question. A majority of independent directors serving on the Board may determine not to seek recovery from an Executive in whole or part to the extent it determines in its sole discretion that such recovery would be impracticable because (A) the direct expense paid to a third party to assist in enforcing recovery would exceed the recoverable amount (after having made a reasonable attempt to recover the erroneously awarded Incentive-Based Compensation and providing corresponding documentation of such attempt to Nasdaq), (B) recovery would violate the home country law that was adopted prior to November 28, 2022, as determined by an opinion of counsel licensed in the applicable jurisdiction that is acceptable to and provided to Nasdaq, or (C) recovery would likely cause the Company’s 401(k) plan or any other tax-qualified retirement plan to fail to meet the requirements of Section 401(a)(13) or Section 411(a) of the Internal Revenue Code of 1986, as amended, and the regulations thereunder.
Other Remedies Not Precluded
The exercise by the Board of any rights pursuant to this Policy shall be without prejudice to any other rights or remedies that the Company or the Board may have with respect to any Executive subject to this Policy, whether arising under applicable law (including pursuant to Section 304 of the Sarbanes-Oxley Act of 2002), regulation or pursuant to the terms of any other policy of the Company, employment agreement, equity award, cash incentive award or other agreement applicable to an Executive. Notwithstanding the foregoing, there shall be no duplication of recovery of the same Incentive-Based Compensation under this Policy and any other such rights or remedies.
Acknowledgment
To the extent required by the Board, each Executive shall be required to sign and return to the Company the acknowledgement form attached hereto as Exhibit A pursuant to which such Executive will agree to be bound by the terms of, and comply with, this Policy. For the avoidance of doubt, each Executive shall be fully bound by, and must comply with, the Policy, whether or not such Executive has executed and returned such acknowledgment form to the Company.
Applicability
This Policy applies to any Incentive-Based Compensation that is received by an Executive on or after October 2, 2023.
EXHIBIT A
DODD-FRANK COMPENSATION CLAWBACK POLICY
ACKNOWLEDGEMENT FORM
Capitalized terms used but not otherwise defined in this Acknowledgement Form (this “Acknowledgement Form”) shall have the meanings ascribed to such terms in the Policy.
By signing this Acknowledgement Form, the undersigned acknowledges, confirms and agrees that the undersigned: (i) has received and reviewed a copy of the Policy; (ii) is and will continue to be subject to the Policy and that the Policy will apply both during and after the undersigned’s employment with the Company; and (iii) will abide by the terms of the Policy, including, without limitation, by reasonably promptly returning any recoverable compensation to the Company as required by the Policy, as determined by the Board in its sole discretion.
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[Employee] |
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