Global Engine Group Holding Ltd 6-K, filed Jun 20, 2025
Global Engine Group Holding Ltd (GLE)
About this 6-K
Global Engine Group Holding Ltd filed this 6-K on June 20, 2025.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF THE
SECURITIES EXCHANGE ACT OF 1934
For the month of
Commission File Number
(Translation of registrant’s name into English)
Room C, 19/F, World Tech Centre,
95 How Ming Street, Kwun Tong, Kowloon, Hong Kong
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:
Form 20-F ☒ Form 40-F ☐
Explanatory Note
Global Engine Group Holding Limited, a British Virgin Islands exempted company (the “Company”), is furnishing this Form 6-K to provide its unaudited interim condensed consolidated financial statements for the six months ended December 31, 2024.
1
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Date: June 20, 2025 | Global Engine Group Holding Limited | |
| By: | /s/ Andrew, LEE Yat Lung | |
| Andrew, LEE Yat Lung | ||
| Chief Executive Officer | ||
2
EXHIBIT INDEX
| Exhibit Number |
Description | |
| 99.1 | Unaudited Interim Condensed Consolidated Financial Statements as of December 31, 2024 and for the Six Months Ended December 31, 2024 and 2023 | |
| 99.2 | Operating and Financial Review and Prospects in Connection with the Unaudited Interim Condensed Consolidated Financial Statements for the Six Months Ended December 31, 2024 and 2023 | |
| 101.INS | Inline XBRL Instance Document | |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document | |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
3
Exhibit 99.1
GLOBAL ENGINE GROUP HOLDING LIMITED
TABLE OF CONTENTS
INDEX TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
F-1
GLOBAL ENGINE GROUP HOLDING LIMITED
INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS
| June 30, 2024 | December 31, 2024 | |||||||||||
| HKD | HKD | US$ | ||||||||||
| (Unaudited) | (Unaudited) | |||||||||||
| Assets | ||||||||||||
| Current assets | ||||||||||||
| Cash | $ | $ | $ | |||||||||
| Accounts receivable, net | ||||||||||||
| Prepayment, deposits and other receivables | ||||||||||||
| Prepaid tax | ||||||||||||
| Total current assets | ||||||||||||
| Property and equipment, net | ||||||||||||
| Long-term investments | ||||||||||||
| Deferred tax assets | ||||||||||||
| Intangible assets, net | ||||||||||||
| Goodwill | ||||||||||||
| Deferred IPO costs | ||||||||||||
| Total non-current assets | ||||||||||||
| Total assets | $ | $ | $ | |||||||||
| Liabilities and shareholders’ equity | ||||||||||||
| Current liabilities | ||||||||||||
| Accounts payable | $ | $ | $ | |||||||||
| Accrued expenses and other payables | ||||||||||||
| Amount due to a related party | ||||||||||||
| Amount due to a director | ||||||||||||
| Tax payable | ||||||||||||
| Contract liabilities | ||||||||||||
| Total current liabilities | ||||||||||||
| Non-current liabilities | ||||||||||||
| Employee benefits | ||||||||||||
| Total non-current liabilities | ||||||||||||
| Total liabilities | ||||||||||||
| Commitment and contingencies | ||||||||||||
| Shareholders’ equity | ||||||||||||
| Shares subscription receivable | ( | ) | ||||||||||
| Additional paid-in capital | ||||||||||||
| Retained earnings | ||||||||||||
| Total shareholders’ equity | ||||||||||||
| Total equity | ||||||||||||
| Total liabilities and shareholders’ equity | $ | $ | $ | |||||||||
| * |
The accompany notes are an integral part of these unaudited interim condensed consolidated financial statements.
F-2
GLOBAL ENGINE GROUP HOLDING LIMITED
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF INCOME
| For the six months ended December 31, | ||||||||||||
| 2023 | 2024 | 2024 | ||||||||||
| HKD | HKD | US$ | ||||||||||
| Revenues | ||||||||||||
| Cloud services and data center managed services | ||||||||||||
| Third parties’ revenue | $ | $ | $ | |||||||||
| Related parties’ revenue | ||||||||||||
| Telecommunication, consultancy and related services | ||||||||||||
| Third parties’ revenue | ||||||||||||
| Total revenues | ||||||||||||
| Cost of revenue | ||||||||||||
| Third parties’ cost of revenues | ||||||||||||
| Related parties’ cost of revenues | ||||||||||||
| Gross profit | ||||||||||||
| Operating expenses | ||||||||||||
| General and administrative expenses | ||||||||||||
| Total operating expenses | ||||||||||||
| Income (Loss) from operations | ( | ) | ( | ) | ||||||||
| Other income (expenses) | ||||||||||||
| Interest expenses | ( | ) | ( | ) | ( | ) | ||||||
| Other income | ||||||||||||
| Total other income (expenses), net | ||||||||||||
| Income (Loss) before income tax | ( | ) | ( | ) | ||||||||
| Income tax expense (credit) | ||||||||||||
| Current | ||||||||||||
| Deferred | ( | ) | ( | ) | ||||||||
| Total income tax expense (credit) | ( | ) | ( | ) | ||||||||
| Net income (loss) | $ | $ | ( | ) | $ | ( | ) | |||||
| Weighted average number of ordinary shares | ||||||||||||
| Basic and diluted | ||||||||||||
| Earnings (loss) per share | ||||||||||||
| Basic and diluted | $ | $ | ( | ) | $ | ( | ) | |||||
The accompany notes are an integral part of these unaudited interim condensed consolidated financial statements.
F-3
GLOBAL ENGINE GROUP HOLDING LIMITED
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN
SHAREHOLDERS’ EQUITY
For the six months ended December 31, 2023
| Class A | Class B | Shares | ||||||||||||||||||||||||||
| Ordinary Shares | Ordinary Shares | subscription | Retained | |||||||||||||||||||||||||
| Shares | Par Value | Shares | Par Value | receivable | Earnings | Total | ||||||||||||||||||||||
| HKD | HKD | HKD | HKD | HKD | ||||||||||||||||||||||||
| Balance, June 30, 2023* | $ | $ | $ | ( | ) | $ | $ | |||||||||||||||||||||
| Net income | - | - | ||||||||||||||||||||||||||
| Balance, December 31, 2023* | $ | $ | $ | ( | ) | $ | $ | |||||||||||||||||||||
For the six months ended December 31, 2024
| Class A | Class B | Shares | Additional | |||||||||||||||||||||||||||||
| Ordinary Shares | Ordinary Shares | subscription | paid-in | Retained | ||||||||||||||||||||||||||||
| Shares | Par Value | Shares | Par Value | receivable | Capital | Earnings | Total | |||||||||||||||||||||||||
| HKD | HKD | HKD | HKD | HKD | HKD | |||||||||||||||||||||||||||
| Balance, June 30, 2024* | $ | $ | ( | ) | $ | $ | $ | |||||||||||||||||||||||||
| Issuance of Ordinary shares, net of offering expenses | ||||||||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Balance, December 31, 2024* | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||
| US$ | US$ | | US$ | US$ | US$ | | US$ | | ||||||||||||||||||||||||
| * |
The accompany notes are an integral part of these unaudited interim condensed consolidated financial statements.
F-4
GLOBAL ENGINE GROUP HOLDING LIMITED
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
| For the six months ended December 31, | ||||||||||||
| 2023 | 2024 | 2024 | ||||||||||
| HKD | HKD | US$ | ||||||||||
| Cash flows from operating activities: | ||||||||||||
| Net (loss) income | $ | $ | ( | ) | $ | ( | ) | |||||
| Adjustments to reconcile net income to net cash (used in) provided by operating activities: | ||||||||||||
| Depreciation of property and equipment | ||||||||||||
| Amortization of intangible assets | ||||||||||||
| Amortization of right-of-use assets | ||||||||||||
| Provision for expected credit losses | ||||||||||||
| Change in operation assets and liabilities | ||||||||||||
| Accounts receivable | ( | ) | ||||||||||
| Prepaid tax | ||||||||||||
| Prepayment, and deposits | ( | ) | ( | ) | ( | ) | ||||||
| Deferred tax assets | ( | ) | ( | ) | ||||||||
| Accounts payable | ( | ) | ( | ) | ||||||||
| Income tax payable | ||||||||||||
| Accrued expenses and other payables | ||||||||||||
| Contract liabilities | ( | ) | ( | ) | ( | ) | ||||||
| Employee benefits | ||||||||||||
| Operating lease obligation | ( | ) | ||||||||||
| Net cash (used in) provided by operating activities | ( | ) | ( | ) | ||||||||
| Cash flow from investing activities: | ||||||||||||
| Purchases of items of property and equipment | ( | ) | ( | ) | ||||||||
| Purchases of intangible assets | ( | ) | ( | ) | ||||||||
| Payments for acquisition of long-term investments | ( | ) | ( | ) | ||||||||
| Payments for acquisition of subsidiaries | ( | ) | ( | ) | ||||||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||||||
| Cash flow from financing activities: | ||||||||||||
| Payments of IPO costs | ( | ) | ( | ) | ( | ) | ||||||
| Proceeds from initial public offering | ||||||||||||
| Repayment of amount due to a director | ( | ) | ( | ) | ||||||||
| Proceeds of amount due from/to related parties | ( | ) | ( | ) | ( | ) | ||||||
| Net cash provided by (used in) financing activities | ( | ) | ||||||||||
| Change in cash | ||||||||||||
| Cash, beginning of the period | ||||||||||||
| Cash, end of the period | $ | $ | $ | |||||||||
| Supplemental cash flow information | ||||||||||||
| Cash paid for interest expense | $ | $ | $ | |||||||||
The accompany notes are an integral part of these unaudited interim condensed consolidated financial statements
F-5
GLOBAL ENGINE GROUP HOLDING LIMITED
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 1 — Nature of business and organization
Global Engine Group Holding Limited (the “Company” or “GE Group”) is a holding company incorporated on September 7, 2021 under the British Virgin Islands (“BVI”) law. The Company has no substantial operations other than holding all of the outstanding share capital of Global Engine Holdings Limited (“BVI Sub”) which was incorporated under BVI law on March 5, 2021. BVI Sub is also a holding company holding of all the equity interest of Global Engine Limited (“GEL”), a Hong Kong Company incorporated on May 3, 2018. The Company, through GEL, is an integrated solutions provider that delivers actionable outcomes for organizations by using information communication technologies (“ICT”) solutions to drive business outcomes and innovation. The GE Group offers: (i) “ICT Solution Services” provides cloud platform deployment, IT system design and configuration services, maintenance services, data center colocation service and cloud service; (ii) “Technical Services” include the technical development, support, and outsourcing services for data center and cloud computing infrastructure, mobility and fixed network communications, as well as Internet-of-things projects; and (iii) “Project Management Services” enhances productivity and collaboration management and enables successful implementations and adoption of solutions for customers. The Company’s headquarters is located in Hong Kong, China. All of the Company’s business activities are carried out by GEL.
On March 30, 2021, GEL’s initial shareholder, Andrew Lee sold his equity interest in GEL to BVI Sub for nominal cash consideration resulting in BVI Sub being the sole shareholder of GEL. On January 5, 2022, then-existing shareholders of BVI Sub transferred their equity interests in BVI Sub to GE Group, resulting in GE Group being the parent company of BVI Sub and the indirect parent company of GEL. GE Group, BVI Sub and GEL are under common control which results in the consolidation of BVI Sub and GEL at carrying value.
On December 2, 2024, BVI
Sub completed the acquisition of
The unaudited interim condensed consolidated financial statements reflect the activities of each of the following entities:
| Name | Background | Ownership | Principal activities | |||
| Global Engine Group Holding Limited (“GE Group”) | ● A BVI company ● Incorporated on September 7, 2021 | - | ||||
| Global Engine Holdings Limited (“BVI Sub”) | ● A BVI company ● Incorporated on March 5, 2021 | |||||
| Ace Vision Technology Investment Limited (“Ace Vision BVI”) | ● A BVI company ● Incorporated on May 3, 2022 | |||||
| Global Engine Limited (“GEL”) | ● A Hong Kong company ● Incorporated on May 3, 2018 | |||||
| Ace Vision Technology Limited (“Ace Vision”) | ● A Hong Kong company ● Incorporated on October 30, 2017 |
F-6
Note 2 — Liquidity
In assessing the Company’s liquidity, the Company monitors and evaluates its cash and its operating and capital expenditure commitments. The Company’s liquidity needs are to meet its working capital requirements, operating expenses and capital expenditure obligations.
As of December 31, 2024,
the Company had cash in an amount of HKD
| - | cash generated from operations; |
| - | the Company seeks financing from banks and other financial institutions; |
| - | financial support from the Company’s shareholders; and |
| - | obtaining funds through a future public offering |
Based on the above considerations, management believes that the Company has sufficient funds to meet its operating and capital expenditure needs and obligations in the next 12 months. However, there is no assurance that the Company will be successful in implementing the foregoing plans or additional financing will be available to the Company on commercially reasonable terms. There are a number of factors that could potentially arise that could undermine the Company’s plans such as (i) changes in the demand for the Company’s services, (ii) government policies, and (iii) economic conditions in Hong Kong and worldwide. The Company’s inability to secure needed financing when required may require material changes to the Company’s business plan and could have a material impact on the Company’s financial conditions and result of operations.
Note 3 — Summary of significant accounting policies
Basis of presentation
The accompanying unaudited interim condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and applicable rules and regulations of the Securities and Exchange Commission. The results of operations for the six months ended December 31, 2023 are not necessarily indicative of results to be expected for any other interim period or for the full year of 2024. Accordingly, these statements should be read in conjunction with the Company’s audited financial statements and note thereto as of and for the years ended June 30, 2024, 2023 and 2022.
Principles of consolidation
The unaudited interim condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All inter-company transactions and balances are eliminated upon consolidation.
Use of estimates and assumptions
The preparation of unaudited interim condensed 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 including provision for doubtful accounts, and disclosures of contingent assets and liabilities as of the date of the unaudited interim condensed consolidated financial statements and the reported amounts of revenues and expenses during the periods presented. Actual results could differ from these estimates. Significant accounting estimates reflected in the Company’s unaudited interim condensed consolidated financial statements include estimates of provision for credit losses.
F-7
Earnings (loss) per share
Basic earnings per share is computed by dividing net income attributable to the holders of ordinary shares by the weighted average number of ordinary shares outstanding during period presented. Diluted income per share is calculated by dividing net income attributable to the holders of ordinary shares as adjusted for the effect of dilutive ordinary share equivalents, if any, by the weighted average number of ordinary shares and dilutive ordinary share equivalents outstanding during the period. However, ordinary share equivalents are not included in the denominator of the diluted earnings per share calculation when inclusion of such shares would be anti-dilutive, such as in a period in which a net loss is recorded.
Foreign currency translation and transaction
The Company uses Hong Kong Dollar (“HKD”) as its reporting currency. The functional currency of the Company and its subsidiary in British Virgin Islands is United States Dollar (“US$”) and its subsidiary which is incorporated in Hong Kong is HKD, which is its respective local currency based on the criteria of ASC 830, “Foreign Currency Matters”.
In the unaudited interim condensed consolidated financial statements of the Company, transactions in currencies other than the functional currency are measured and recorded in the functional currency using the exchange rate in effect at the date of the transaction. At the balance sheet date, monetary assets and liabilities that are denominated in currencies other than the functional currency are translated into the functional currency using the exchange rate at the balance sheet date. All gains and losses arising from foreign currency transactions are recorded in the income statements during the year in which they occur.
Convenience translation
Translations of balances in
the unaudited interim condensed consolidated balance sheets, unaudited interim condensed consolidated statements of income, unaudited
interim condensed consolidated statements of changes in shareholders’ equity and unaudited interim condensed consolidated statements
of cash flows from HKD into US$ as of December 31, 2024 are solely for the convenience of the readers and are calculated at the rate of
US$
Fair value measurement
The accounting standard regarding fair value of financial instruments and related fair value measurements defines financial instruments and requires disclosure of the fair value of financial instruments held by the Company.
The accounting standards define fair value, establish a three-level valuation hierarchy for disclosures of fair value measurement and enhance disclosure requirements for fair value measures. The three levels are defined as follow:
| ● | Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. |
| ● | Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments. |
| ● | Level 3 inputs to the valuation methodology are unobserved and significant to the fair value. |
Financial instruments included in current assets and current liabilities are reported in the balance sheets at face value or cost because of the short period of time between the origination of such instruments and their expected realization and their current market rates of interest.
F-8
Related Parties
The Company accounts for related party transactions in accordance with FASB Accounting Standards Codification (ASC) Topic 850 (Related Party Disclosures). A party is considered to be related to the Company if the party directly or indirectly or through one or more intermediaries, controls, is controlled by, or is under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. A party which can significantly influence the management or operating policies of the transacting parties or if it has an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests is also a related party.
Revenue recognition
The Company generates revenues from fees charged for the professional services, including cloud services and data center managed services, and telecommunication, consultancy and related services provided to its clients.
The Company adopted ASC Topic 606, Revenue from Contracts with Customers, for all periods presented. The five-step model defined by ASC Topic 606 requires the Company to (1) identify its contracts with customers, (2) identify its performance obligations under those contracts, (3) determine the transaction prices of those contracts, (4) allocate the transaction prices to its performance obligations in those contracts and (5) recognize revenue when each performance obligation under those contracts is satisfied.
Revenues are recognized when control of the promised services and deliverables are transferred to the Company’s clients in an amount that reflects the consideration the Company expects to be entitled to and receive in exchange for services and deliverables rendered.
The Company has elected to apply the practical expedient in paragraph ASC 606-10-50-14 and does not disclose information about remaining performance obligations that have original expected durations of one year or less.
The Company elected a practical expedient that it does not adjust the promised amount of consideration for the effects of a significant financing component if the Company expects that, upon the inception of revenue contracts, the period between when the Company transfers its promised services or deliverables to its clients and when the clients pay for those services or deliverables will be one year or less.
As a practical expedient, the Company elected to expense the incremental costs of obtaining a contract when incurred if the amortization period of the asset that the Company otherwise would have recognized is one year or less.
Cloud services and data center managed services
Cloud services and data center managed services include offering system and software development, business planning, development, technical and operations consulting programs structured to target the cloud and data center providers in the region.
The revenues generated from cloud services and data center managed services are generally based on the fixed fee billing arrangements that require the clients to pay a pre-established fee in exchange for a predetermined set of services.
For the project development services, the Company designs systems based on clients’ specific needs which require the Company to perform services including design, development, and integration. The contract is typically fixed priced and does not provide any post contract client support or upgrades. The Company concludes there is only one performance obligation as a series of tasks within the contract are interrelated and are not separable or distinct, and the client cannot benefit from any standalone task. The Company recognizes revenue for this type of services over time by applying the input method.
F-9
For the recurring services, the Company delivers cloud services and data center managed services, and related maintenance service on a monthly basis throughout the contract terms. The Company concludes that each monthly service (1) is distinct, (2) meets the criteria for recognizing revenue over time, and (3) has the same method for measuring progress. In addition, the Company concludes that the services provided each month are substantially the same and result in the transfer of substantially the same service to the customers each month. That is, the benefit consumed by the customers is substantially the same for each monthly transaction, even though the exact volume of services may vary each month. Therefore, the Company concludes that the monthly cloud services and data center managed services satisfy the requirements of ASC 606-10-25-14(b) to be accounted for as a single performance obligation. The entire transaction prices are allocated to the single performance obligation. The Company recognizes revenue over time since the customer receives value as the services are rendered continuously during the term of the contract.
There is no variable consideration, significant financing components or noncash consideration in the contracts.
Telecommunication, consultancy and related services
The Company provides consultancy services to telecom operators, including one-stop telecom license application services adapted to each client’s specific needs. In these arrangements, the fees are based on the attainment of contractually defined objectives with the customers, such as completing a business transaction or assisting the client in obtaining a telecom license. There is only one performance obligation of the services as a series of tasks of this revenue stream are interrelated and are not separable or distinct as the Company’s clients cannot benefit from the standalone task. The Company provides a significant service of integrating services into a combined output. The Company recognizes revenues earned to date in an amount that is probable not to reverse and by applying the input method when the criteria for over time revenue recognition are met.
The Company also provides maintenance services to telecom operators to assist them to fulfil the statutory requirements. The revenues generated from these services tendered on an annual basis and other agreed-upon services on non-recurring basis.
For the Company’s services rendered on an annual basis, the Company concludes that the services provided each month during the annual service term (1) are distinct, (2) meet the criteria for recognizing revenue over time, and (3) have the same method for measuring progress. In addition, the Company concludes that the services provided each month are substantially the same and result in the transfer of substantially the same services to the customers each month. That is, the benefits consumed by the customers are substantially the same for each monthly transaction, even though the exact volume of services may vary each month. Therefore, the Company concludes that the monthly telecommunication maintenance services satisfy the requirements of ASC 606-10-25-14(b) to be accounted for as a single performance obligation. The Company recognizes revenue on a straight-line basis since the customer receives value as the services are rendered continuously during the term of the contract .
There is no variable consideration, significant financing components or noncash consideration in the contracts.
Cost of Revenues
Cost of revenues consists of cost of consultants or subcontractors assigned to revenue-generating activities, employee compensation and other third-party costs directly attributable to the Company’s revenue-generating activities.
F-10
Cash
Cash primarily consists of bank deposits with original maturities of three months or less, which are unrestricted as to withdrawal and use. The Company maintains its bank accounts in Hong Kong.
Deposits accounts denominated
in Hong Kong Dollars, Renminbi or any other currencies at the banks and financial institutions who are the members of Deposit Protection
Scheme will be covered up to a limit of HKD
Accounts receivable, net
On July 1, 2023, the Company adopted ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASC 326”). ASC 326 requires the application of a credit loss model based prospectively on current expected credit losses (CECL), and replaces the previous model based retrospectively on past incurred losses. The Company adopted ASC 326 using the modified retrospective method for all financial assets measured at amortized cost, of which the Company reported only accounts receivable as of June 30, 2023. Results for reporting periods beginning July 1, 2023 are presented under ASC 326. The Company concludes that there is no impact over the initial adoption of CECL model, which should be treated as cumulative-effect adjustment on accumulated deficits as of June 30, 2023.
The Company carries accounts receivable at the face amounts less a reserve for estimated credit losses. The Company estimated its reserve for credit losses using relevant available information from internal and external sources relating to past events such as aging schedule of receivables, migration rate of receivables, assessment of receivables due from specific identifiable counterparties that are considered at risk or uncollectible, current conditions and reasonable and supportable forecasts.
As of December 31, 2024 and
June 30, 2024, the Company recognized provision for credit losses of HKD
Prepayment, deposits and other receivables
Prepayments are cash deposited or advanced to suppliers or vendors for the purchase of goods or services and for the development of software that have not been received or provided. This amount is refundable and bears no interest. Deposits consist of (i) security payments made to utilities companies and are refundable upon termination of services; (ii) security payments made to a lessor for the Company’s office lease agreement. The security deposit will be refunded to the Company upon the termination or expiration of the lease agreement as well as the delivery of the vacant leased properties to the lessor by the Company; and (iii) deposit to suppliers for providing the services, which are refundable. Other receivables included bank interest income that are to be collected from the banks.
Deferred IPO costs
Pursuant to ASC 340-10-S99-1,
IPO costs directly attributable to an offering of equity securities are deferred and would be charged against the gross proceeds of the
offering as a reduction of additional paid-in capital. These costs include legal fees related to the registration drafting and counsel,
consulting fees related to the registration preparation, the SEC filing and print related costs. As of June 30, 2024, the accumulated
deferred IPO cost was HKD
F-11
Property and equipment, net
Property and equipment are
stated at cost less accumulated depreciation and impairment if applicable. Depreciation is computed using the straight-line method after
consideration of the estimated useful lives.
| Estimated Useful Life | ||
| Leasehold improvements | ||
| Computer equipment | ||
| Furniture and fixtures | ||
| Motor Vehicles |
The cost and related accumulated depreciation of assets sold or otherwise retired are eliminated from the accounts and any gain or loss is included in the statements of operations. Expenditures for maintenance and repairs are charged to earnings as incurred, while additions, renewals and betterment, which are expected to extend the useful life of assets, are capitalized. The Company also re-evaluates the periods of depreciation to determine whether subsequent events and circumstances warrant revised estimates of useful lives.
Long-term Investments
The Company applies the equity method to account for equity investments in common stock or in-substance common stock, according to ASC 323 “Investments — Equity Method and Joint Ventures”, over which it has significant influence but does not own a controlling financial interest, unless the fair value option is elected for an investment.
An investment in in-substance common stock is an investment in an entity that has risk and reward characteristics that are substantially similar to that entity’s common stock. The Company considers subordination, risks and rewards of ownership and obligation to transfer value when determining whether an investment in an entity is substantially similar to an investment in that entity’s common stock.
Under the equity method, the Company’s share of the post-acquisition profits or losses of the equity method investee is recognized in the consolidated statements of income. The excess of the carrying amount of the investment over the underlying equity in net assets of the equity method investee generally represents goodwill and intangible assets acquired. When the Company’s share of losses of the equity method investee equals or exceeds its interest in the equity method investee, the Company does not recognize further losses, unless the Company has incurred obligations or made payments or guarantees on behalf of the equity method investee.
The Company continually reviews its investments in equity method investees to determine whether a decline in fair value below the carrying value is other-than-temporary. The primary factors the Company considers in its determination include the severity and the length of time that the fair value of the investment is below its carrying value; the financial condition, the operating performance and the prospects of the equity method investee; the geographic region, market and industry in which the equity method investee operates; and other company specific information such as recent financing rounds completed by the equity method investee. If the decline in fair value is deemed to be other-than-temporary, the carrying value of the investment in the equity method investee is written down to its fair value.
Business combination
The purchase price of an acquired company is allocated between tangible and intangible assets acquired and liabilities assumed from the acquired business based on their estimated fair values, with the residual of the purchase price recorded as goodwill. Transaction costs associated with business combinations are expensed as incurred and are included in general and administrative expenses in the Company’s unaudited interim condensed consolidated statements of income. The results of operations of the acquired business are included in the Company’s operating results from the date of acquisition.
F-12
Goodwill
Goodwill represents the excess of the purchase consideration over the acquisition date amounts of the identifiable tangible and intangible assets acquired and liabilities assumed from the acquired entity as a result of the Company’s acquisitions of interests in its subsidiaries. Goodwill is not amortized but is tested for impairment on an annual basis, or more frequently if events or changes in circumstances indicate that it might be impaired. In accordance with ASC 350, the Company may first assess qualitative factors to determine whether it is necessary to perform the quantitative goodwill impairment test. In the qualitative assessment, the Company considers factors such as macroeconomic conditions, industry and market considerations, overall financial performance of the reporting unit, and other specific information related to the operations, business plans and strategies of the reporting unit. Based on the qualitative assessment, if it is more likely than not that the fair value of a reporting unit is less than the carrying amount, the quantitative impairment test is performed. The Company may also bypass the qualitative assessment and proceed directly to perform the quantitative impairment test.
The Company performs the quantitative impairment test by comparing the fair value of each reporting unit to its carrying amount, including goodwill. If the fair value of the reporting unit exceeds its carrying amount, goodwill is not considered to be impaired. If the carrying amount of a reporting unit exceeds its fair value, the amount by which the carrying amount exceeds the reporting unit’s fair value is recognized as impairment. Application of a goodwill impairment test requires significant management judgment, including the identification of reporting units, allocation of assets, liabilities and goodwill to reporting units, and determination of the fair value of each reporting unit
Intangible Assets, net
Intangible assets that are
acquired are stated at cost less accumulated amortization (where the estimated useful life is finite) and accumulated impairment losses.
Amortization is calculated by writing off the cost of intangible assets with finite useful lives using straight-line method over their estimated
useful lives and is generally recognized in statements of income. Amortization methods and useful lives are reviewed at each reporting
date and adjusted if appropriate.
| Estimated Useful Life | ||
| Software |
Impairment for long-lived assets other than goodwill
Long-lived assets with finite lives are reviewed for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying value of an asset may not be recoverable. The Company assesses the recoverability of the assets based on the non-discounted future cash flows the assets are expected to generate and recognize an impairment loss when estimated discounted future cash flows expected to result from the use of the assets plus net proceeds expected from disposition of the asset, if any, are less than the carrying value of the asset. If an impairment is identified, the Company would reduce the carrying amount of the asset to its estimated fair value based on a discounted cash flows approach or, when available and appropriate, to comparable market values. As of December 31, 2024 and June 30, 2024, no impairment of long-lived assets was recognized.
Contract assets and contract liabilities
Billing practices for the Company’s contracts are governed by the contract terms of each project and are typically based on (i) progress toward completion approved by customers, (ii) achievement of milestones or (iii) pre-agreed schedules. Billings do not necessarily correlate with revenues recognized under the cost-to-cost input method (formerly known as the percentage-of-completion method). The Company records contract assets and contract liabilities to account for these differences in timing.
The contract asset, “Costs and estimated earnings in excess of billings on uncompleted contracts,” arises when the Company recognizes revenues for services performed, but the Company is not yet entitled to bill the customer under the terms of the contract.
F-13
The contract liability, “Billings in excess of costs and estimated earnings on uncompleted contracts,” represents the Company’s obligation to transfer to a customer goods or services for which the Company has been paid by the customer or for which the Company has billed the customer under the terms of the contract. Revenue for future services reflected in this account are recognized, and the liability is reduced, as the Company subsequently satisfies the performance obligation under the contract.
Employee benefits
Under Hong Kong Mandatory
Provident Fund Schemes Ordinance, an employer shall enroll their regular employees in Mandatory Provident Fund Schemes. Regular employees
are those who are at between 18 and 65 years of age and have been employed for consecutive 60 days or more. An employer is required to
make regular mandatory contributions at least
Segment reporting
The Company operates and manages its business as a single segment, in accordance with ASC 280, Segment Reporting. The Company’s chief operating decision maker (“CODM”) is the Chief Executive Officer. The Company’s CODM assess the Company’s performance and results of operations on a consolidated basis. The Company generates substantially all of its revenues from clients in Hong Kong. Accordingly, no geographical segments are presented. Substantially all of the Company’s long-lived assets are located in Hong Kong.
Leases
In February 2016, the FASB issued ASU 2016-12, Leases (ASC Topic 842), which amends the leases requirements in ASC Topic 840, Leases. Under the new lease accounting standard, a lessee will be required to recognize a right-of-use assets and lease liabilities for most leases on the balance sheets. The new standard also modifies the classification criteria and accounting for sales-type and direct financing leases, and enhances the disclosure requirements. Leases will continue to be classified as either finance or operating leases.
The Company adopted ASC Topic 842 using the modified retrospective transition method effective July 1, 2021. The Company determines if an arrangement is a lease at inception. Lease assets and liabilities are recognized at the present value of the future lease payments at the lease commencement date. The interest rate used to determine the present value of the future lease payments is the Company’s incremental borrowing rate based on the information available at the lease commencement date. The Company generally uses the base, non-cancellable lease term in calculating the right-of-use assets and lease liabilities.
The Company may recognize the lease payments in the consolidated statements of income on a straight-line basis over the lease terms and variable lease payments in the periods in which the obligations for those payments are incurred, if any. The lease payments under the lease arrangements are fixed.
The Company elected the practical expedients for an entity ongoing accounting and applied the short-term lease exception for lease arrangements with a lease term of 12 months or less at commencement. Lease terms used to compute the present value of lease payments do not include any option to extend, renew or terminate the lease that the Company is not able to reasonably certain to exercise upon the lease inception. Accordingly, operating lease right-of-use assets and liabilities do not include leases with a lease term of 12 months or less.
The Company did not adopt the practical expedient that allows lessees to treat the lease and non-lease components of a lease as a single lease component. Non-lease components include payments for building management, utilities and property tax. It separates the non-lease components from the lease components to which they relate.
Operating lease expense is
recognized on a straight-line basis over the lease term. For the six months ended December 31, 2024 and 2023, the Company’s operating
lease expense was HKD
The Company evaluates the impairment of its ROU assets consistent with the approach applied for its other long-lived assets. The Company reviews the recoverability of its long-lived assets when events or changes in circumstances occur that indicate that the carrying value of the asset may not be recoverable. The assessment of possible impairment is based on its ability to recover the carrying value of the asset from the expected undiscounted future pre-tax cash flows of the related operations. The Company has elected to include the carrying amount of finance and operating lease liabilities in any tested asset group and include the associated lease payments in the undiscounted future pre-tax cash flows. For the six months ended December 31, 2024, the Company did not have any impairment loss against its operating lease ROU assets.
F-14
Income taxes
Global Engine Group Holding Limited, Global Engine Holdings Limited and Ace Vision Technology Investment Limited are not subject to tax on income or capital gains under the current laws of the British Virgin Islands. In addition, upon payments of dividends by the Global Engine Holdings Limited and the Company’s subsidiaries in Hong Kong, Global Engine Limited and Ace Vision Technology Limited, to the Company’s shareholders, no British Virgin Islands withholding tax will be imposed.
Global Engine Limited and
Ace Vision Technology Limited are incorporated in and carries trade and business in Hong Kong Special Administrative Region and is subject
to Hong Kong profits tax under Inland Revenue Department Ordinance. Under relevant Hong Kong tax laws, tax case is normally subject to
investigation by the tax authority for up to
No taxable income was generated outside Hong Kong for the six months ended December 31, 2024 and 2023. The Company accounts for income tax in accordance with U.S. GAAP. Provision for income taxes consists of taxes currently due plus deferred tax.
The charge for taxation is based on the results for the fiscal year as adjusted for items, which are non-assessable or disallowed. It is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.
Deferred tax is accounted for using the asset and liability method with respect to temporary differences arising from between the carrying amount of assets and liabilities in the financial statements and the corresponding tax basis used in the computation of assessable tax profit. Deferred tax liabilities are recognized for all future taxable temporary differences. Deferred tax assets are recognized to the extent that it is probable that taxable income will be available against which deductible temporary differences can be utilized. Deferred tax is calculated using tax rates that are expected to apply to the period when the asset is realized or the liability is settled.
Deferred tax is charged or credited in the statement of operations, except when it is related to items credited or charged directly to equity. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current income taxes are provided for in accordance with the laws of the relevant taxing authorities.
An uncertain tax position
is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination,
with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than
F-15
Commitments and Contingencies
In the normal course of business, the Company is subject to contingencies, including legal proceedings and claims arising out of the business that relate to a wide range of matters, such as government investigations and tax matters. The Company recognizes a liability for such contingency if it determines it is probable that a loss has occurred and a reasonable estimate of the loss can be made. The Company may consider many factors in making these assessments including historical and the specific facts and circumstances of each matter.
Concentration of Risks
Concentration of credit risk
Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash and account receivable. The Company places its cash with financial institutions with high-credit ratings and quality. The Company’s credit risk with respect to cash is discussed under “Cash” in this section.
Accounts receivable primarily comprise of amounts receivable from the clients serviced. To reduce credit risk, the Company performs on-going credit evaluations of the financial condition of these service clients. The Company establishes a provision for credit losses based upon estimates, factors surrounding the credit risk of specific service clients and other information.
Concentration of customers
As of December 31, 2024, two
customers accounted for
For the six months ended December
31, 2024, three major customers accounted for
Concentration of vendors
As of December 31, 2024, a
vendor accounted for
For the six months ended December
31, 2024, two major vendors accounted for
Recent accounting pronouncements
In November 2024, FASB issued ASU 2024-03, “Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses”. The amendments require disaggregation disclosure for certain expense captions presented on the face of income statement, as well as additional disclosure about selling expenses. This guidance is effective for the Company for the year ending June 30, 2028 and interim reporting periods during the year ending June 30, 2029. The Company is evaluating the impact of the adoption of this guidance on its disclosures.
All other newly issued accounting pronouncements but not yet effective have been deemed either immaterial or not applicable.
F-16
Note 4 — Revenues
Revenues are recognized when control of the promised services and deliverables are transferred to the Company’s clients in an amount that reflects the considerations the Company expects to be entitled to and receive in exchange for services and deliverables rendered.
The following table presents the Company’s revenues disaggregated by service lines for the six months ended December 31, 2024 and 2023:
| For the six months ended December 31, | ||||||||||||
| 2023 | 2024 | |||||||||||
| HKD | HKD | US$ | ||||||||||
| Cloud services and data center managed services | $ | $ | $ | |||||||||
| Telecommunication, consultancy and related services | ||||||||||||
| Total revenues | $ | $ | $ | |||||||||
The following table presents the Company’s revenues disaggregated by the timing of revenue recognition for the six months ended December 31, 2024 and 2023:
| For the six months ended December 31, | ||||||||||||
| 2023 | 2024 | |||||||||||
| HKD | HKD | US$ | ||||||||||
| Services and deliverables transferred over time | $ | $ | $ | |||||||||
The amounts of transaction prices allocated to the remaining performance obligations (unsatisfied or partially unsatisfied) as at December 31, 2024 and 2023 are as follows:
| For the six months ended December 31, | ||||||||||||
| 2023 | 2024 | |||||||||||
| HKD | HKD | US$ | ||||||||||
| Amounts expected to be recognized as revenue: | ||||||||||||
| Within one year | $ | $ | $ | |||||||||
| After one year | ||||||||||||
| $ | $ | $ | ||||||||||
The Company expects to recognize majority of the related revenue as it provides services to its clients, which is expected to occur within three years for a long-term telecommunication maintenance service. The Company elected to utilize the optional exemption to exclude from this disclosure the remaining performance obligations that have original expected duration of one year or less.
F-17
The following table shows the amounts of revenue recognized in the current reporting period that was included in contract liabilities at the beginning of the reporting period:
| For the six months ended December 31, | ||||||||||||
| 2023 | 2024 | |||||||||||
| HKD | HKD | US$ | ||||||||||
| Revenue recognized that was included in contract liabilities at the beginning of the reporting period: | ||||||||||||
| Cloud services and data center managed services | $ | $ | $ | |||||||||
| Telecommunication, consultancy and related services | ||||||||||||
| $ | $ | $ | ||||||||||
Note 5 — Accounts receivable, net
Accounts receivable, net consisted of the following:
| June 30, 2024 | December 31, 2024 | |||||||||||
| HKD | HKD | US$ | ||||||||||
| Accounts receivable | $ | $ | $ | |||||||||
| Less: provision for credit losses | ( | ) | ( | ) | ( | ) | ||||||
| Accounts receivable, net | $ | $ | $ | |||||||||
Provision for credit losses
provided for the six months ended December 31, 2024 and 2023 amounted to HKD11,
F-18
Note 6 — Prepayment, deposits and other receivables
Prepayment, deposits and other receivable, net included the following:
| June 30, 2024 |
December 31, 2024 |
|||||||||||
| HKD | HKD | US$ | ||||||||||
| Prepayment | $ | $ | $ | |||||||||
| Deposits | ||||||||||||
| Other receivables | ||||||||||||
| Total prepayment, deposits and other receivables | $ | $ | $ | |||||||||
Deposits include deposits to utilities companies such as telecommunication and electricity companies and to landlord for the office. Prepayment represented the advance payment to suppliers and vendors for revenue-generating activities and for the purchase of software. Other receivables represented the receivable of bank interest income.
Note 7 — Property and equipment, net
Property and equipment consisted of the following:
| June 30, 2024 | December 31, 2024 | |||||||||||
| HKD | HKD | US$ | ||||||||||
| Leasehold improvements | $ | $ | $ | |||||||||
| Computer equipment | ||||||||||||
| Furniture and fixtures | ||||||||||||
| Motor Vehicles | ||||||||||||
| Subtotal | ||||||||||||
| Less: accumulated depreciation | ( | ) | ( | ) | ( | ) | ||||||
| Total | $ | $ | $ | |||||||||
Depreciation expense for property and equipment for the six months
ended December 31, 2024 and 2023 amounted to HKD
Note 8 — Intangible assets, net
Intangible assets consisted of the following:
| June 30, 2024 | December 31, 2024 | |||||||||||
| HKD | HKD | US$ | ||||||||||
| Software | ||||||||||||
| Less: accumulated amortization | ( | ) | ( | ) | ||||||||
| Total | $ | $ | $ | |||||||||
Amortization expense for
the six months ended December 31, 2024 and 2023 amounted to HKD
F-19
Note 9 — Business combination and Goodwill
On
December 2, 2024,
the Company through the wholly-owned subsidiary, BVI Sub, acquired
The fair values of the identifiable assets and liabilities of Ace Vision Group as at the date of acquisition were as follows:
| Fair value recognized on acquisition | ||||||||
| 2025 | ||||||||
| HKD | US$ | |||||||
| Account Receivables | $ | $ | ||||||
| Cash | ||||||||
| Accounts payables | ( | ) | ( | ) | ||||
| Tax payable | ( | ) | ( | ) | ||||
| Other payables | ( | ) | ( | ) | ||||
| Foreign exchange difference | ||||||||
| Total identifiable net assets at fair value | $ | $ | ||||||
| Goodwill | ||||||||
| Purchase consideration settled by cash | $ | $ | ||||||
There is no impairment of goodwill being recognized during the financial period.
Note 10 — Long-term investments
On December 30, 2024, the
Company completed the acquisition of
Note 11 — Taxes
British Virgin Islands
Global Engine Group Holding Limited and several of its wholly-own subsidiaries are incorporated in the British Virgin Islands and conduct all of the Company’s businesses through the Company’s subsidiaries in Hong Kong. Under the current laws of the British Virgin Islands, these entities are not subject to tax on income or capital gains. In addition, upon payments of dividends by the Global Engine Holdings Limited and the Company’s subsidiaries in Hong Kong to the Company’s shareholders, no British Virgin Islands withholding tax will be imposed.
Hong Kong
Two-tier Profits Tax Rates
GEL and Ace Vision is incorporated in Hong Kong and is subject to Hong Kong profits tax compliance.
The two-tier profits tax rates
system was introduced under the Inland Revenue (Amendment)(No.3) Ordinance 2018 (“the Ordinance”) of Hong Kong became effective
for the assessment year 2018/2019. Under the two-tier profit tax rates regime, the profits tax rate for the first HKD
GEL elected the two-tier profits tax rate for its tax years of 2023 and 2024. GEL applies the two-tier profits tax rate for its provision for current income and deferred taxes.
For the tax years of 2022/23
and 2023/24, the Financial Secretary of Hong Kong provided concessionary measures by providing tax reduction (“tax credit”)
of profits tax up to HKD
The income tax provision consisted of the following components:
| For the six months ended December 31, | ||||||||||||
| 2023 | 2024 | |||||||||||
| HKD | HKD | US$ | ||||||||||
| Current | $ | $ | $ | |||||||||
| Deferred | ( | ) | ( | ) | ||||||||
| Total provision for income taxes | $ | $ | ( | ) | $ | ( | ) | |||||
F-20
Deferred Tax Assets
The following table sets forth the significant components of the aggregate deferred tax assets and liabilities of the Company as of: :
| June 30, 2024 | December 31, 2024 | |||||||||||
| HKD | HKD | US$ | ||||||||||
| Deferred Tax Assets | ||||||||||||
| Net operating loss carryforwards | $ | $ | $ | |||||||||
| Total deferred tax assets | $ | $ | $ | |||||||||
| Deferred Tax Liabilities | ||||||||||||
| Depreciation of property and equipment | $ | $ | ( | ) | $ | ( | ) | |||||
| Amortization of intangible assets | ( | ) | ( | ) | ||||||||
| Total deferred tax liabilities | $ | $ | ( | ) | $ | ( | ) | |||||
| Deferred tax assets, net | $ | $ | $ | |||||||||
The Company evaluates the level of authority for each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measures the unrecognized benefits associated with the tax positions. For the six months ended December 31, 2024 and 2023, the Company did not have any unrecognized tax benefits.
Note 12 — Related party transactions and balances
The following was a summary of related parties with the Company:
| Name | Relationship | |
| Mr. Lee, Yat Lung Andrew (“Mr. Lee”) | ||
| Boxasone Limited (“BAO”) | ||
| China Information Technology Development Limited (“CITD”) |
Related party transactions
The GE Group has commercial arrangements with related entities to provide or receive technical support and other services.
For the six months
ended December 31, 2024, the GE Group received services from Logic Network Limited, a subsidiary of CITD, and reflected in cost of
revenue amounted to HKD
For the six months ended
December 31, 2023, the Company generated revenue from DataCube Research Centre Limited, a subsidiary of CITD, amounted to HKD
F-21
Amount due to a related party
| Name of Related parties | Nature of transactions | June 30, 2024 | December 31, 2024 | |||||||||||
| HKD | HKD | US$ | ||||||||||||
| BAO | $ | $ | $ | |||||||||||
Amount to a director
| Name of Related parties | Nature of transactions | June 30, 2024 | December 31, 2024 | |||||||||||
| HKD | HKD | US$ | ||||||||||||
| Mr. Lee | $ | $ | $ | |||||||||||
Note 13 — Lease
Non-cancellable Operating Lease
The Company entered into a
lease arrangement for its office facility in May 2022.
The component of lease expense was as follows:
| For the six months ended December 31, | ||||||||||||
| 2023 | 2024 | |||||||||||
| HKD | HKD | US$ | ||||||||||
| Operating lease cost | $ | $ | $ | |||||||||
The Company’s commitment for minimum lease payment under its operating lease for its office facility as of December 31, 2024 was as follows:
| For the year ending December 31, | Amount (HKD) | Amount (US$) | ||||||
| 2025 | ||||||||
Note 14 — Commitments and Contingencies
Commitments
The Company’s commitments
related to purchase of software. Total commitments contracted but not yet reflected in the financial statements amounted to HKD
Contingencies
In the ordinary course of business, the Company may be subject to certain legal proceedings, claims, and disputes that arise from the business operations. Although the outcomes of these legal proceedings cannot be predicted, the Company does not believe these actions, in the aggregate, will have a material adverse impact on its financial position, results of operations or liquidity. As of December 31, 2024, the Company had no outstanding lawsuits nor claims.
F-22
Note 15 — Equity
Ordinary shares
The authorized number of
shares was
On September 20, 2024, the
Company announced pricing of its initial public offering of
On October 18, 2024, the over-allotment
option was fully exercised and the Company issued additional
As of December 31, 2024 and
June 30, 2024,
Note 16 — Subsequent events
The Company evaluated all events and transactions that occurred after December 31, 2024 up through the date the Company issued the unaudited interim condensed consolidated financial statements. Other than the event disclosed below, there were no other subsequent events occurred that would require recognition or disclosure in the Company’s unaudited interim condensed consolidated financial statements.
On March 27, 2025, the Company
held the extraordinary general meeting to approve: (a) the issued
F-23
Exhibit 99.2
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes included elsewhere in this Form 6-K and our Annual Report on Form 20-F for the year ended June 30, 2024 (the “Annual Report”). The discussion below contains forward-looking statements that are based upon our current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from these expectations due to inaccurate assumptions and known or unknown risks and uncertainties, including those identified in “Cautionary Note Regarding Forward-Looking Statements” and under “Risk Factors” elsewhere in the Annual Report.
Overview
The Company and its subsidiaries, is an integrated solutions provider that delivers actionable outcomes for organizations by using information communication technologies (“ICT”) solutions to drive business outcomes and innovation. The GE Group offers: (i) “ICT Solution Services” which include the cloud platform deployment, IT system design and configuration services maintenance services, data center colocation service and cloud service; (ii) “Technical Services” which include the technical development, support, and outsourcing services for data center and cloud computing infrastructure, mobility and fixed network communications, as well as Internet-of-things projects; and (iii) “Project Management Services” which enhances productivity and collaboration management and enables successful implementations and adoption of solutions for customers. The Company’s headquarters is located in Hong Kong, China.
Key Factors that Affect Results of Operations
The Company believes the key factors affecting its financial condition and results of operations include the following:
| ● | We may fail to innovate or create new solutions which align with changing market and customer demand. |
| ● | Our business may face risks of clients’ default on payment. |
| ● | We may not manage our growth effectively, and our profitability may suffer. |
| ● | Our reputation and brand recognition is 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. |
| ● | Increases in labor costs in Hong Kong may adversely affect our business and results of operations. |
The above does not list all the material risk factors that may affect our financial condition and results of operations. The above-mentioned risks and others are discussed in more detail in the section titled “Risk Factors” elsewhere in the Annual Report.
Critical Accounting Estimates
We prepare our unaudited interim condensed consolidated financial statements in accordance with U.S. GAAP, which requires us to make judgments, estimates and assumptions. To the extent that there are material differences between these estimates and actual results, our financial condition or results of operations would be affected. We base our estimates and assumptions on our own historical data and other assumptions that we believe are reasonable after taking account of our circumstances and expectations for the future based on available information. We evaluate these estimates and assumptions on an ongoing basis.
Our expectations regarding the future are based on available information and assumptions that we believe to be reasonable and accurate, 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. Some of our accounting policies require a higher degree of judgment than others in their application.
Our critical accounting policies and practices include the following: (i) revenue recognition. See Note 3—Summary of Significant Accounting Policies to our unaudited interim condensed consolidated financial statements for the disclosure of these accounting policies. We believe the following accounting estimates involve the most significant judgments used in the preparation of our consolidated financial statements.
Estimated provision for credit losses
We carry accounts receivable at the face amounts less a reserve for estimated credit losses. We estimated our reserve for credit losses using relevant available information from internal and external sources relating to past events, current conditions and reasonable and supportable forecasts. Upon adoption of ASC 326, we recorded the balance of the reserve for credit losses of HK$nil as of July 1, 2023. During the six months ended December 31, 2024 and 2023, we recorded an addition to our provision for credit losses in the unaudited interim condensed consolidated financial statements related to accounts receivable of HKD11,018 (US$1,418) and HKDNil, respectively. As of December 31, 2024 and June 30, 2024, the reserve for credit losses was HKD110,793 (US$14,263) and HKD99,775, respectively.
Recent Accounting Pronouncements
See the discussion of the recent accounting pronouncements contained in Note 3 to the unaudited interim condensed consolidated financial statements, “Summary of Significant Accounting Policies
Six months ended December 31, 2024 compared to six months ended December 31, 2023
Results of Operations
The following table sets forth a summary of the unaudited interim condensed consolidated results of operations of the Company for the periods indicated, both in absolute amount and as a percentage of its total revenues.
| For the six months ended December 31, | ||||||||||||||||||||
| 2023 | 2024 | |||||||||||||||||||
| HKD | % of Revenue | HKD | US$ | % of Revenue | ||||||||||||||||
| Revenues | ||||||||||||||||||||
| Cloud services and data center managed services | ||||||||||||||||||||
| Third parties’ revenue | $ | 15,318,480 | 67.9 | % | $ | 13,233,426 | $ | 1,703,648 | 69.2 | % | ||||||||||
| Related parties’ revenue | 1,800,000 | 8.0 | % | - | - | - | % | |||||||||||||
| Telecommunication, consultancy and related services | ||||||||||||||||||||
| Third parties’ revenue | 5,450,838 | 24.1 | % | 5,895,338 | 758,955 | 30.8 | % | |||||||||||||
| Total revenues | 22,569,318 | 100.0 | % | 19,128,764 | 2,462,603 | 100.0 | % | |||||||||||||
| Cost of revenues | ||||||||||||||||||||
| Third parties’ cost of revenues | 18,423,853 | 81.6 | % | 16,164,651 | 2,081,009 | 84.5 | % | |||||||||||||
| Related parties’ cost of revenues | 620,000 | 2.8 | % | 634,500 | 81,684 | 3.3 | % | |||||||||||||
| Total cost of revenue | 19,043,853 | 84.4 | % | 16,799,151 | 2,162,693 | 87.8 | % | |||||||||||||
| Gross profit | 3,525,465 | 15.6 | % | 2,329,613 | 299,910 | 12.2 | % | |||||||||||||
| Operating expenses | ||||||||||||||||||||
| General and administrative expenses | 2,780,070 | 12.3 | % | 3,791,866 | 488,158 | 19.8 | % | |||||||||||||
| Total operating expenses | 2,780,070 | 12.3 | % | 3,791,866 | 488,158 | 19.8 | % | |||||||||||||
| Income (Loss) from operations | 745,395 | 3.3 | % | (1,462,253 | ) | (188,248 | ) | (7.6 | )% | |||||||||||
| Interest expenses | (7,192 | ) | (0.0 | )% | (617 | ) | (79 | ) | 0.0 | % | ||||||||||
| Other income | 24,106 | 0.1 | % | 147,286 | 18,961 | 0.7 | % | |||||||||||||
| Income (Loss) before income taxes | 762,309 | 3.4 | % | (1,315,584 | ) | (169,366 | ) | (6.9 | )% | |||||||||||
| Income tax expense/(credit) | 61,465 | 0.3 | % | (70,189 | ) | (9,036 | ) | 0.4 | % | |||||||||||
| Net income (loss) | $ | 700,844 | 3.1 | % | $ | (1,245,395 | ) | (160,330 | ) | (6.5 | )% | |||||||||
2
Revenues
For the six months ended December 31, 2024 and 2023, the Company generated its revenues through two revenue streams by the Company’s wholly-owned subsidiaries, GEL and Ace Vision: cloud services and data center managed services and telecommunication, consultancy and related services.
The following table presented GEL’s revenues disaggregated by service lines for the six months ended December 31, 2024 and 2023:
| For the six months ended December 31, | ||||||||||||||||||||
| 2023 | 2024 | 2024 | Change | Change | ||||||||||||||||
| Revenues | HKD | HKD | US$ | HKD | % | |||||||||||||||
| Cloud services and data center managed services | $ | 17,118,480 | $ | 13,233,426 | $ | 1,703,648 | $ | (3,885,054 | ) | (22.7 | )% | |||||||||
| Telecommunication, consultancy and related services | 5,450,838 | 5,895,338 | 758,955 | 444,500 | 8.2 | % | ||||||||||||||
| Total revenues | $ | 22,569,318 | $ | 19,128,764 | $ | 2,462,603 | $ | (3,440,554 | ) | (15.2 | )% | |||||||||
The following table presented GEL’s revenues disaggregated by the timing of revenue recognition for the six months ended December 31, 2024 and 2023:
| For the six months ended December 31, | ||||||||||||||||||||
| 2023 | 2024 | 2024 | Change | Change | ||||||||||||||||
| HKD | HKD | US$ | HKD | % | ||||||||||||||||
| Services transferred over time | 22,569,318 | 19,128,764 | 2,462,603 | (3,440,554 | ) | (15.2 | )% | |||||||||||||
Revenue decreased by HKD3.4 million, or 15.2%, to HKD19.1 million (US$2.5 million) for the six months ended December 31, 2024 compared to HKD22.6 million for the same period in 2023. The decrease is due to the decrease in revenue form cloud services and data center services during the period.
Cloud services and data center services include offering business planning, development, technical and operations consulting programs structured to target the cloud and data center providers in the region. The Company also offers complementary offerings such as installations, warranty services and certain managed services including remote network services and data center monitoring to customers. The decrease in cloud services and data center managed services was mainly due to the decrease in revenue from customers in Hong Kong and Taiwan.
The increase in revenue from telecommunication, consultancy and related services was mainly driven by the increase in consultancy projects in Hong Kong in the current period.
Cost of revenues
Cost of revenues included cost of consultants or subcontractors assigned to revenue-generating activities, employee compensation and other third-party costs directly attributable to our revenue-generating activities. For the six months ended December 31, 2024, cost of revenues was HKD16.8 million (US$2.2 million), decreased by HKD2.2 million or 11.8% from HKD19.0 million in the same period in 2023. The decrease was due to the decrease in subcontracting expenses as a result of the decrease in number of projects.
Gross profit
As a result of the foregoing, gross profit for the six months ended December 31, 2024 was HKD2.3 million (US$0.3 million), a decrease of HKD1.2 million from HKD3.5 million for the same period in 2023. The gross profit margin decreased from 15.6% for the six months ended December 31, 2023 to 12.2% for the six months ended December 31, 2024 due to the offering of competitive pricing package to open new market in Malaysia.
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General and administrative expenses
General and administrative expenses consisted primarily of motor car expenses, IT expenses, depreciation, legal and professional fees, accounting fee, director’s fee, salaries and employee benefits and others.
The Company’s major general and administrative expenses were comprised of the following items during the periods indicated:
| For the six months ended December 31, | ||||||||||||||||||||
| 2023 | 2024 | 2024 | Change | Change | ||||||||||||||||
| HKD | HKD | US$ | HKD | (%) | ||||||||||||||||
| Depreciation of property and equipment | $ | 163,722 | $ | 209,856 | $ | 27,016 | $ | 46,134 | 28.2 | % | ||||||||||
| Amortization of intangible assets | - | 117,000 | 15,062 | 117,000 | 100.0 | % | ||||||||||||||
| Operating lease cost | 192,986 | 210,000 | 27,035 | 17,014 | 8.8 | % | ||||||||||||||
| Motor car expenses | 4,470 | 26,553 | 3,418 | 22,083 | 494.0 | % | ||||||||||||||
| IT Expenses | 328,800 | 340,004 | 43,772 | 11,204 | 3.4 | % | ||||||||||||||
| Accounting Fee | 60,000 | 25,000 | 3,219 | (35,000 | ) | (58.3 | )% | |||||||||||||
| Director’s Fee | 120,000 | 189,868 | 24,443 | 69,868 | 58.2 | % | ||||||||||||||
| Salaries and employee benefits | 399,453 | 1,229,803 | 158,323 | 830,350 | 207.9 | % | ||||||||||||||
| Legal and professional fees | 1,367,270 | 1,104,186 | 142,151 | (263,084 | ) | (19.2 | )% | |||||||||||||
| Insurance | 26,391 | 27,635 | 3,558 | 1,244 | 4.7 | % | ||||||||||||||
| Company secretarial expenses | 81,317 | 67,580 | 8,700 | (13,737 | ) | (16.9 | )% | |||||||||||||
| Travelling expenses | 4,869 | 79,330 | 10,213 | 74,461 | 1529.3 | % | ||||||||||||||
| Exchange loss, net | 12,110 | - | - | (12,110 | ) | (100.0 | )% | |||||||||||||
| Others | 18,682 | 165,051 | 21,248 | 146,369 | 783.5 | % | ||||||||||||||
| Total | $ | 2,780,070 | $ | 3,791,866 | $ | 488,158 | $ | 1,011,796 | 36.4 | % | ||||||||||
General and administrative expenses increased by HKD1.0 million or 36.4% from HKD2.8 million for the six months ended December 31, 2023 to HKD3.8 million (US$488,158) for the six months ended December 31, 2024, mainly driven by the increase in salaries and employee benefits of HKD830,350 (US$106,898) as a result of increase in headcount during the period.
IT expenses
IT expenses primarily consisted of domain fee and server rental expenses for the Company’s information storage, processing and back up. The amount is comparable with prior period.
Others
Other expenses included bank charges, government licensing fee, entertainment expenses, sundry expenses and provision of credit losses. The increase in expenses for the six months ended December 31, 2024 was attributable to the increase in the entertainment expenses during the period.
Allowance for credit losses
The Company carries accounts receivable at the face amounts less a reserve for estimated credit losses. The Company estimated its reserve for credit losses using relevant available information from internal and external sources relating to past events such as aging schedule of receivables, migration rate of receivables, assessment of receivables due from specific identifiable counterparties that are considered at risk or uncollectible, current conditions and reasonable and supportable forecasts.
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The table below sets forth the aging analysis of the Company’s gross accounts receivable at the end of each period:
| 0-90 days | 91-182 days | 183-273 days | 273-365 days | >365 days | Total | |||||||||||||||||||
| December 31, 2024 (USD) | $ | 1,490,475 | $ | 141,841 | $ | 9,655 | $ | 9,655 | $ | 21,139 | $ | 1,672,765 | ||||||||||||
| December 31,2024 (HKD) | 11,577,559 | 1,101,778 | 75,000 | 75,000 | 164,200 | 12,993,537 | ||||||||||||||||||
| June 30, 2024 (HKD) | 13,006,692 | 4,028,397 | 75,000 | 50,000 | 70,273 | 17,230,362 | ||||||||||||||||||
| Change (HKD) | $ | (1,429,133 | ) | $ | (2,926,619 | ) | $ | - | $ | 25,000 | $ | 93,927 | $ | (4,236,825 | ) | |||||||||
The table below sets forth the subsequent settlements related to Company’s accounts receivable as of December 31, 2024:
| 0-90 days | 91-182 days | 183-273 days | 273-365 days | >365 days | Total | |||||||||||||||||||
| December 31, 2024 (USD) | $ | 426,204 | $ | 115,442 | $ | - | $ | - | $ | 4,055 | $ | 545,701 | ||||||||||||
| December 31,2024 (HKD) | 3,310,623 | 896,715 | - | - | 31,500 | 4,238,838 | ||||||||||||||||||
The table below sets forth the accounts receivable balance net of subsequent settlements as of May 31, 2025:
| 0-90 days | 91-182 days | 183-273 days | 273-365 days | >365 days | Total | |||||||||||||||||||
| December 31, 2024 (USD) | $ | 1,064,271 | $ | 26,399 | $ | 9,655 | $ | 9,655 | $ | 17,084 | $ | 1,127,064 | ||||||||||||
| December 31, 2024 (HKD) | 8,266,936 | 205,063 | 75,000 | 75,000 | 132,700 | 8,754,699 | ||||||||||||||||||
Interest expense
Interest expense mainly represented the bank overdraft interest. For the six months ended December 31, 2024 and 2023, its interest expense was HKD617 (US$79) and HKD7,192, respectively.
Other income
Other income was primarily comprised of interest income and exchange gain, net. During the six months ended December 31, 2024, we recognized interest income of HKD109,910 (US$14,149) and net exchange gain of HKD37,376 (US$4,812). For the same period in 2023, we recognized interest income of HKD24,106.
Income tax expense (credit)
Income tax credit was HKD70,189 (US$9,036) for the six months ended December 31, 2024, as compared to income tax expenses of HKD61,465 for the six months ended December 31, 2023. The income tax credit was due to the deferred tax recognized for the net operating loss carryforwards, the depreciation of property and equipment and amortization of intangible assets during the period.
Net (loss) income
As a result of the above discussed, the Company recorded a net loss of HKD1,245,395 (US$160,330) for the six months ended December 31, 2024, representing a decline of HKD1,946,239 from a net income of HKD700,844 for the six months ended December 31, 2023.
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Liquidity and Capital Resources
The Company financed its daily operations and business development through cash generated from the operations of GEL and proceeds from our initial public offering on the Nasdaq. As at December 31, 2024 and June 30, 2024, its cash balance was HKD26,905,336 (US$3,463,746) and HKD8,406,293, respectively.
The following table set forth a summary of its cash flows for the periods indicated:
For the six months ended December 31, | ||||||||||||
| 2023 | 2024 | 2024 | ||||||||||
| HKD | HKD | US$ | ||||||||||
| Net cash (used in) provided by operating activities | $ | 1,812,862 | $ | (14,787,217 | ) | $ | (1,903,682 | ) | ||||
| Net cash used in investing activities | $ | - | $ | (27,254,670 | ) | $ | (3,508,718 | ) | ||||
| Net cash provided by (used in) financing activities | $ | (1,052,260 | ) | $ | 60,540,880 | $ | 7,793,928 | |||||
Cash provided by (used in) operating activities:
For the six months ended December 31, 2024, net cash used in operating activities HKD14,787,217 (US$1,903,682) was primarily resulted from the net loss of HKD1,245,395 (US$160,330) as adjusted for non-cash items and change in operating activities. Adjustments for non-cash items consisted of depreciation of property and equipment of HKD209,856 (US$27,016), amortization of intangible assets of HKD117,000 (US$15,062) and provision for expected credit losses of HKD11,018 (US$1,418). The amount is offset by change in operating activities amounted to HKD13,879,696 (US$1,786,848).
For the six months ended December 31, 2023, net cash provided by operating activities HKD1,812,862 was primarily resulted from the net income of HKD700,844 as adjusted for non-cash items and change in operating activities. Adjustments for non-cash items consisted of depreciation of property and equipment of HKD163,722 and amortization of right-of-use assets of HKD192,986. Change in operating activities included increased from accounts payables of HKD11,339,305 due to the increase in order near the year end, decrease in prepaid income tax of HKD61,465 and increase in accrued expenses and other payables of HKD3,138,000. The overall cash inflows were offset by an increase in accounts receivables of HKD10,370,609 due to sales made near the year end, an increase in prepayment and deposits of HKD103,557, decrease in contract liabilities of HKD3,109,478 and operating lease liabilities of HKD199,816.
Cash used in investing activities:
For the six months ended December 31, 2024, net cash used in investing activities was HKD27,254,670 (US$3,508,718) consisted of purchases of items of property and equipment of HKD1,325,139 (US$170,596), purchases of intangible assets of HKD2,340,000 (US$301,247), Payments for acquisition of long-term investments of HKD17,467,087 (US$2,248,682) and payments for acquisition of subsidiaries of HKD6,122,444 (US$788,193).
For the six months ended December 31, 2023, the Company did not have any investing activities.
Cash provided by (used in) financing activities:
For the six months ended December 31, 2024, net cash from financing activities of HKD60,540,880 (US$7,793,928) consisted of net proceeds received upon completion of the initial public offering of HKD71,472,020 (US$9,201,182), offset by payments of IPO costs of HKD10,896,313 (US$1,402,771), repayment of amount with related parties of HKD27,073 (US$3,485) and repayment of amount due to a director of HKD7,754 (US$998).
For the six months ended December 31, 2023, net cash used in financing activities of HKD1,052,260 consisted of, payment for deferred IPO costs of HKD1,040,286, proceeds of amount with a director of HKD6,538 and repayment of amount due to a related party of HKD18,512.
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The following table set forth a summary of the Company’s working capital as of December 31, 2024 and June 30, 2024:
| June 30, 2024 | December 31, 2024 | |||||||||||
| HKD | HKD | US$ | ||||||||||
| Current assets | $ | 26,050,835 | $ | 44,710,224 | $ | 5,755,915 | ||||||
| Current liabilities | 18,161,460 | 4,468,309 | 575,242 | |||||||||
| Working capital | $ | 7,889,375 | $ | 40,241,915 | $ | 5,180,673 | ||||||
Current assets as of December 31, 2024 was HKD44,710,224 (US$5,755,915). Out of this balance, GEL had cash in an amount of HKD26,905,286 (US$3,463,739). The entire cash balance was deposited in financial institutions in Hong Kong Special Administrative Region. The current asset balance also included the following: accounts receivable, net of HKD12,882,744,(US$1,658,502), prepayment, deposits and other receivables of HKD4,755,163 (US$612,171) and prepaid tax of HKD167,031 (US$21,503).
Current liabilities as of December 31, 2024 was HKD4,468,309 (US$575,242). This amount was comprised of account payables of HKD80,000 (US$10,299), accrued expenses and other payables of HKD3,615,275 (US$465,423), amount due to a related party of HKD2,649 (US$341), amount due to a director of HKD31,837 (US$4,099), tax payable of HKD32,396 (US$4,171) and contract liabilities of HKD706,152 (US$90,909).
Current assets as of June 30, 2024 was HKD26,050,835. Out of this balance, the Company had cash in an amount of HKD8,406,293 of which approximately HKD5,947,009 was denominated in Hong Kong Dollar and approximately HKD2,459,284 was denominated in US Dollar. The entire cash balance was deposited in financial institutions in Hong Kong Special Administrative Region, PRC. The current asset balance also included accounts receivable, net of HKD17,130,587, prepayment, deposits and other receivables of HKD345,756 and prepaid tax of HKD168,199.
Current liabilities as of June 30, 2024 was HKD18,161,460. This amount was comprised of account payables of HKD12,838,317, accrued expenses and other payables of HKD3,542,000, amount due to a director of HKD39,591, amount due to a related party of HKD2,422 and contract liabilities of HKD1,739,130.
We will have sufficient working capital to meet our present requirements and for the next 12 months from the date of this report.
Off-Balance Sheet Arrangements
The Company has no off-balance sheet arrangements, including arrangements that would affect its liquidity, capital resources, market risk support, and credit risk support or other benefits.
Future Financings
The Company may sell its ordinary shares in order to fund its business growth. Issuances of additional shares will result in dilution to existing shareholders. There is no assurance that the Company will achieve sales of the equity securities or arrange for debt or other financing to fund its growth in case it is necessary, or if the Company is able to do so, there is no guarantee that existing shareholders will not be substantially diluted.
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