Dreamland Ltd 20-F for FY2026
Dreamland Ltd (TDIC)
About this 20-F
Dreamland Ltd filed this 20-F on August 17, 2026, covering the fiscal year ended March 31, 2026 (FY2026).
Headline figures
Fiscal year ended March 31, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- 50.68M HKD
- up 10.6% from 45.8M HKD a year earlier
- Net loss
- 74.05M HKD
- compared with net income of 6.43M HKD a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
OR
For
the Fiscal Year Ended
OR
OR
Commission
File Number:
(Exact name of Registrant as specified in its charter)
(Jurisdiction of incorporation or organization)
(Address of principal executive offices)
Telephone:
Email:
At the address of the Company set forth above
(Name, Telephone, email and/or fax number and address of Company Contact Person)
Securities registered or to be registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading symbol(s) | Name of each exchange on which registered | ||
Securities registered pursuant to Section 12(g) of the Act: None
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None
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.
Class A Ordinary Shares, US$ par value, at March 31, 2026
Class B Ordinary Shares, US$ par value, at March 31, 2026
Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act of 1933.
Yes
☐
If the 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 15D 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.
| Large Accelerated Filer ☐ | Accelerated Filer ☐ | |
| 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.
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:
| U.S. GAAP ☐ | 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.)
Yes
☐ No
TABLE OF CONTENTS
| i |
FORWARD-LOOKING STATEMENTS
This Annual Report on Form 20-F contains forward-looking statements. A forward-looking statement is a projection about a future event or result, and whether the statement comes true is subject to many risks and uncertainties. These statements often can be identified by the use of terms such as “may,” “will,” “expect,” “believe,” “anticipate,” “estimate,” “approximate” or “continue,” or the negative thereof. The actual results or activities of the Company will likely differ from projected results or activities of the Company as described in this Annual Report, and such differences could be material.
Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results and performance of the Company to be different from any future results, performance and achievements expressed or implied by these statements. In other words, our performance might be quite different from what the forward-looking statements imply. You should review carefully all information included in this Annual Report.
You should rely only on the forward-looking statements that reflect management’s view as of the date of this Annual Report. We undertake no obligation to publicly revise or update these forward-looking statements to reflect subsequent events or circumstances. You should also carefully review the risk factors described in other documents we file from time to time with the Securities and Exchange Commission (the “SEC”). The Private Securities Reform Act of 1995 contains a safe harbor for forward-looking statements on which the Company relies in making such disclosures. In connection with the “safe harbor,” we are hereby identifying important factors that could cause actual results to differ materially from those contained in any forward-looking statements made by us or on our behalf. Factors that might cause such a difference include, but are not limited to, those discussed in the section entitled “Risk Factors” under Item 3. - “Key Information.”
FINANCIAL STATEMENTS AND CURRENCY PRESENTATION
Basis of Presentation
We prepare our consolidated financial statements in accordance with accounting principles generally accepted International Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS”) and publish our financial statements in Hong Kong Dollars.
Certain amounts, percentages and other figures included in this Annual Report have been subject to rounding adjustments. Accordingly, amounts, percentages and other figures shown as totals in certain tables or charts may not be the arithmetic aggregation of those that precede them and amounts and figures expressed as percentages in the text may not total 100% or, when aggregated, may not be the arithmetic aggregation of the percentages that precede them.
REFERENCES
In this Annual Report, “China” refers to all parts of the People’s Republic of China, including the Special Administrative Region of Hong Kong. The terms “we,” “our,” “us” and the “Company” refer to Dreamland Limited and, where the context so requires or suggests, our direct and indirect subsidiaries. Our direct and indirect subsidiaries are: (i) Trendic International Limited (“Trendic”), incorporated in Hong Kong; and (ii) Goal Success Global Limited (“Goal Success”), incorporated in the British Virgin Islands. Dreamland Limited is incorporated in the Cayman Islands, as a holding company and does not conduct any business operations. Goal Success is a direct wholly-owned subsidiary and does not conduct any business operations. Trendic is our indirect wholly-owned operating subsidiary and conducts business operations in Hong Kong.
“Initial Public Offering” or “IPO” refers to our initial public offering of 1,340,000 Class A Ordinary Shares by the Company and 660,000 Class A Ordinary Shares by the Selling Shareholder which closed on July 23, 2025, based on offering price of US$4.00 per Class A Ordinary Share, for total gross proceeds to the Company of US$5,360,000.
References to “dollars,” “U.S. Dollars” or “US$” are to United States Dollars, “RMB” are to Chinese Renminbi and “HKD” or “HK$” are to Hong Kong dollars.
| ii |
PART I
ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS
Not Applicable
ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE
Not Applicable
ITEM 3. KEY INFORMATION
| A. | Reserved |
| B. | Capitalization and Indebtedness |
Not applicable.
| C. | Reasons for the Offer and Use of Proceeds |
Not applicable.
| D. | Risk Factors |
You should carefully consider the following risk factors and all of the information contained in this Annual Report, including but not limited to, the matters addressed in the section titled “Forward-Looking Statements,” and our financial information before you decide whether to invest in our securities. One or more of a combination of these risks could materially impact our business, financial condition or results of operations. In any such case, the market price of our securities could decline, and you may lose all or part of your investment. Additional risks and uncertainties not currently known to us or that we currently do not consider to be material may also materially and adversely affect our business, financial condition or results of operations.
SUMMARY OF KEY RISK FACTORS
Risks Relating to Our Business and Industry
We have transitioned into a new business model which makes it difficult to evaluate our prospects and future financial results, and our past growth rate, revenue and net profit margin may not be indicative of our future growth rate, revenue and net profit margin.
During the COVID-19 pandemic, most of the in-person events were rescheduled, postponed or cancelled and our business relied on the design and/or sale of merchandise and government subsidies. When things started to normalize after the COVID-19 pandemic, our business primarily focused on event management business again. During the year ended March 31, 2025, we started to be an event organizer and investments for events. Our net revenue increased by approximately 10.7% from approximately HK$45.8 million for the year ended March 31, 2025 to approximately HK$50.7 million for the year ended March 31, 2026, and our net revenue increased by approximately 124.1% from approximately HK$20.1 million for the year ended March 31, 2024 to approximately HK$45.8 million for the year ended March 31, 2025. We acted as a pure service provider for all the experience events we organized in the fiscal year ended March 31, 2024. Beginning in April 2024, we have engaged in direct investment deals for experience events where we became the effective investor or co-investor of the experience events that we organized, planned, promoted and managed. We have also engaged in pure investment deals for event where we did not involve in event operations. In the long run, we plan to leverage our industry experience and our connections with IP owners built up over the years to start obtaining IP licenses from IP owners directly. This will move us up the value chain to become an event organizer, and we believe that will help us increase our market share in the events industry in Hong Kong as well as our profitability in the long run.
| 1 |
There is no assurance that we will continue to grow at the rate we experienced in the fiscal years ended March 31, 2024, 2025 and 2026, either in terms of revenue or profit, and we may not be successful in maintaining or increasing overall profitability or generate positive cash flow going forward. Expansion of our business requires capital commitments and could divert management resources away from our current business. There is no assurance that we can successfully implement our growth strategies or do so without straining our management resources. There is also no assurance that we can capture a larger market or increase our profitability in the future. If we are unable to implement our growth strategies successfully, our results of operations and prospects may be materially and adversely affected.
There is an inherent risk in using historical financial information to project or estimate our financial performance in the future, as it only reflects our past performance under particular conditions, especially the fluctuations during the unprecedented COVID-19 pandemic. We may be unable to sustain our historical growth rate, revenue and net profit margin for various reasons, such as deterioration in the market conditions in the countries in which the experience events will be held, intensification of competition among the event organizers for IP licenses and among the event planners for securing event management contracts, inflation, high unemployment and other unforeseen factors which may affect the spending habits of the target audience of the experience events and hence reduce the number of event management contracts awarded to us and/or reduce the fees payable to us under the event management contracts. There is no assurance that we will be able to achieve the performance we previously did. Moreover, the transition into a new business model may make it even more difficult to evaluate our prospects and future financial results. Investors should not solely rely on our historical financial information as an indication of our future financial or operating performance.
Our business strategies and growth plans may not be eventually successful.
The successful implementation of our business strategies and growth plans depends on a number of factors including our ability in securing the multi-territory IP licenses, general market conditions, the availability of funds, competition, government policies and our ability to retain and recruit competent employees. There is no assurance that our business strategies and growth plans can be implemented effectively and successfully as some of these factors are beyond our control. If any implementation of these strategies and plans fails or is delayed, we may be adversely affected by (i) investment expenses that have not led to the anticipated results; (ii) the distraction of management from our core business; and/or (iii) damage to our brand or reputation. Moreover, if we fail to secure adequate funds in a timely manner, we may also be unable to pursue opportunities to expand our business. All these could adversely affect our business, results of operations and financial condition.
The loss of one or more of our major customers or our failure to secure new customers may adversely affect our business, results of operations and financial condition.
Prior to our engagement in direct investment deals, our customers were generally event organizers and other enterprises and individuals based in Hong Kong that engage in event organization and trading activities. Since April 2024, we mainly engaged in direct investment deals and our customers were generally sponsors of the experience events we organized and individual event attendees in the countries for which the experience events were held. Our top three major customers (excluding individual event attendees) contributed approximately 88.8%, 51.0% and 40.8% of our net revenue during the fiscal years ended March 31, 2024, 2025 and 2026, respectively, and our largest customer accounted for approximately 66.5%, 20.4% and 20.2% of our net revenue for the same periods. We may continue to derive a significant portion of our revenue from some of these major customers in the foreseeable future. However, we have not signed any long-term contracts with these major customers and cannot assure you that these customers will continue to engage us for our event management, design and/or merchandising services, and on at least comparable scales and terms. Our major customers are not obligated to give us any new business or at comparable scale or on terms which they historically have done. Moreover, we may lose customers for a variety of reasons, including the decision of the customers to commence bankruptcy proceedings due to financial difficulty or acquisitions of our customers by unrelated third parties leading to cancellation of our contracts with those customers or by the acquiring companies. If any of our major customers ceases to engage us or terminate their respective contract(s) with us, we may be unable to timely identify new customers for new contracts to make up for the lost contracts. Even if new contracts are obtained, they may not be on comparable or better commercial terms, and our business prospects and results of operations may be adversely affected.
| 2 |
Our ability to obtain new business from our customers and to maintain good business relationship with them is subject to the stability of their operations and to their business strategies, both of which are beyond our control and our ability to predict. If our existing customers decide to change their business strategies, such as downsizing their business or suspending or ceasing their development or expansion plans due to changes in end consumer spending habits, market conditions, business strategies or performance, their demand for our event management, design and/or merchandising services may fall or they may switch to only working with service providers that are willing to offer highly competitive quotations or a longer payment period or to accept commercially less favorable terms. Even if we are prepared to match the terms of our competitors, there is still no assurance that we will be awarded with the service contract, and hence we cannot guarantee that there will be sufficient new and sizeable event management, design and/or merchandising service contracts in our pipeline to sustain our business and maintain or improve our current results of operations and financial condition. Any failure to obtain new contracts from our customers or a significant decrease in the value of the new contracts and/or our customers’ significant delay in or failure to make payments to us could lead to loss of revenue and/or affect our liquidity and thus affect our business adversely. Accordingly, if we are unable to obtain business from new customers to diversify our customer portfolio, our business, results of operations and financial condition may be adversely affected.
We have also been relying on customer referrals and/or word-of-mouth to promote our event management, design and/or merchandising services. As such, the loss of our major customers may also affect our ability to obtain new customers. A decrease in the number of our existing and potential customers could have a significant negative impact on our business prospects and reputation, which in turn will adversely affect our business, results of operations and financial condition.
We may face revenue concentration risk due to reliance on a single key customer.
For the fiscal years ended March 31, 2024, 2025 and 2026, our largest customer accounted for approximately 20.4%, 16.7% and 20.2% of our net revenue, respectively. Our financial stability is significantly dependent on a single customer, and any adverse changes in the relationship or business activities with this key customer could have a substantial negative impact on our revenue and overall financial performance. A loss of this customer or a reduction in their purchases could result in a material decline in our revenue, profitability, and cash flow, leading to increased business risk and potential financial instability. We may also be unable to replace this customer in a timely manner or at all. If this customer reduces its purchases or orders from us, we may not be able to find other customers to increase their purchases and utilize our service capacity efficiently.
We depend on our management team, particularly Ms. Seto, and our ability to retain them and attract additional qualified personnel is critical to our success and our growth prospects.
Our business operations depend on the continuing services of our management team, particularly Ms. Seto, our founder, director and chief executive officer, who has over eight years of experience in the events industry and is instrumental in steering us through the challenging times during the COVID-19 pandemic and our timely recovery and growth after it. Ms. Seto’s business connections with a wide range of industry players have enabled us to provide our event management, design and merchandising services to our customers in a cost-effective and efficient manner, which in turn has helped us retain customers and attract new customers. We also rely on Ms. Seto’s business connections to implement our growth plans. Apart from Ms. Seto, we also depend on Ms. Tse Sze Man, a director and the head of the design and merchandising department, Mr. Lee Wai Kit, who serves as our chief financial officer, and Mr. Luk Kai Chung, the general manager, who collectively possesses expertise across event management, design, sourcing, logistics, marketing, budget control, customer service, accounting and financial management.
| 3 |
While we have provided different incentives to our management team, we cannot assure you that we can continue to retain their services. If one or more members of our management team were unable or unwilling to continue in their present positions, we may be unable to replace them easily or at all, our future growth may be constrained, our business may be severely disrupted and our results of operations and financial condition may be materially and adversely affected, and we may incur additional expenses to recruit, train and retain qualified personnel. If any dispute arises between us and our current or former directors, we may have to incur substantial costs and expenses in order to enforce such agreements or we may be unable to enforce them at all.
The management of our existing operations, the expansion of our customer base and our future growth will depend on our ability to continue to identify, hire, train and retain experienced and qualified employees. We may be unable to continue to hire or retain key management personnel and other experienced and qualified employees and this could adversely impact our operations and growth.
Our business is substantially dependent upon the continued strength of the market for experience events.
After the COVID-19 pandemic, we have redirected our business focus on the organization, planning, promotion and management of experience events in Hong Kong and select countries in Southeast Asia again, and we expect to derive most of our revenue from the organization, planning, promotion and management of these experience events in the foreseeable future. As a result, continued widespread market acceptance and popularity of experience events in Hong Kong and Southeast Asia are critical to our future growth and success. Moreover, competitive dynamics may cause pricing levels of IP licenses to change due to the level of market demand, which in turn may affect the bottom line of the event organizers and hence the level of fees which they are willing to pay for our event management, design and/or merchandising services in cases where we are engaged as an event planner or our profitability in the direct investment deals which we have signed. In addition, if the market has an influx of new market participants, we may be forced to reduce the prices we charge for our services and products and maybe unable to obtain new contracts at the same prices and upon the same terms that we have historically. If the market for experience events stops growing, grows more slowly than we currently anticipate or evolves and forces us to reduce the prices we charge for our services, our revenue, gross margin and other operating results could be materially adversely affected.
Our business and results of operations may be adversely affected if we are unable to capture, predict or respond timely to our customers’ and/or their end consumers’ needs and preferences or keep up with market trend for experience events and merchandise.
We offer a comprehensive spectrum of event management, design and merchandising services in Hong Kong. Our directors believe that our success is, to a significant extent, attributable to our ability to understand the respective markets of our customers and provide event management, design and/or merchandising services that suit our customers’ needs and/or ultimately the appetites of their end consumers. As interest and taste are subjective matters, the market trend for events and merchandise keeps changing, we may be unable to capture or predict the future trend for events and merchandise and continue to develop/design events and/or merchandise that appeal to our customers and/or their end consumers. If we fail to (i) capture, predict or respond timely to our customers’ and/or their end consumers’ needs and preferences; or (ii) develop/design appealing and commercially viable events and/or merchandise that keep up with market trend in a timely manner, our business and results of operations may be adversely affected.
In particular, we started to mainly engage in direct investment deals for experience events beginning in April 2024, when we became the effective investor or co-investor of the experience events that we organized, planned, promoted and managed. In the long run, we plan to leverage our industry experience and our connections with IP owners built up over the years to start obtaining IP licenses from IP owners directly which will move us up the value chain to become an event organizer. We believe these strategic changes will help us increase our market share in the events industry in Hong Kong as well as our profitability. However, if we fail to keep up with the market trend for experience events and merchandise and the markets for experience events and merchandise fail to grow as expected our investments in experience events may not generate expected returns, which could adversely affect our business, results of operations and financial condition.
| 4 |
We rely on event organizers.
We are an event management service provider that specializes in the organization, planning, promotion and management of experience events. We rely on event organizers to appoint us as their event planner to assist them with the organization, planning, promotion and management of experience events or to feed us with direct investment deals in experience events. There is no assurance that we will continue to maintain good business relationships with event organizers, or the event organizers will not take over the role of an event planner themselves. As a significant portion of our revenue was generated from experience events after the COVID-19 pandemic, any deterioration of our relationship with event organizers or the event organizers stop feeding experience event deals to us for any reason, will adversely affect our business, results of operations and financial condition.
Fluctuations in consumer spending caused by social, economic, political and legal developments or instability, as well as any changes in government policies, in Hong Kong and other Southeast Asian countries could materially and adversely affect our business, results of operations, financial condition and business prospects.
We provide event management, design and/or merchandising services to our customers and we specialize in the organization, planning, promotion and management of experience events. Our business operations are located in Hong Kong and most of our customers, in particular the ones which are event organizers, are based in Hong Kong. Our major event organizer customers generally acquire multi-territory IP licenses for experience events that cover Hong Kong and different countries in Southeast Asia. Our customers’ decisions to engage us for our event management, design and/or merchandising services and the extent of their engagement and/or the direct investment deals which they might extend to us, will be heavily influenced by the likely spending habits of their end consumers (such as event attendees), which in turn will be influenced by macroeconomic conditions in their country of residence. Therefore, our business, results of operations, financial condition and business prospects are significantly exposed to the social, economic, political and legal developments in Hong Kong and other Southeast Asian countries. Uncertainties in these areas include, but are not limited to, the risks of war, regional conflicts, terrorism, extremism, nationalism, nullification of contracts, changes in interest rates, inflation, imposition of capital controls, foreign ownership restrictions and international sanctions, changes in government policies or introduction of new rules or regulations concerning the events industry (such as new sanctions and boycotts) as well as methods of taxation. In particular, events with adverse impact on investors’ confidence and risk appetites, such as general deterioration of the economy in Hong Kong and other Southeast Asian countries, mass civil disobedience movements (such as strikes and industrial actions), significant fluctuations in the stock exchange, deterioration of political relations or tightening of foreign investment may lead to an economic downturn in Hong Kong and other Southeast Asian countries, slowing down all sorts of economic activities in general which in turn may adversely affect the spending habits of the end consumers and hence our customers’ decision in spending on new IP licenses, experience events and/or other events and merchandises which directly affect their decision to engage us for our event management, design and/or merchandising services and/or to extend direct investment deals to us. If there were a drastic decrease in the service contracts or direct investment deals from our customers in these markets or they put greater pricing pressure on us, there is no assurance that we will be able to respond quickly to develop new markets to make up for the loss in service contracts or direct investment deals or to pass on the pricing pressure to our suppliers or the end consumers. All these will adversely affect our business, results of operations, financial condition and business prospects.
As open economies, the domestic economies of Hong Kong and other Southeast Asian countries are affected by many other unpredictable factors such as global economic, social, legal and political developments and changes in local and international economic and political situations. There is no assurance that any changes in the existing government policies, economic, social and political conditions and the business environment in Hong Kong and other Southeast Asian countries in the future, some of which are beyond our control (such as natural disasters, pandemics/epidemics like the outbreak of the COVID-19 pandemic, severe acute respiratory syndrome, the H5N1 strain of avian influenza and the H1N1 strain of swine flu, acts of God and other disasters), will not have a negative effect on the spending habits of the end consumers and hence our customers’ decisions to reduce or defer their spending on new IP licenses, experience events and/or other events and merchandises which directly affect our business prospects. Specifically, our business and results of operations could be materially and adversely affected by changes in laws and regulations concerning the events industry, foreign trade, taxation and ownership and expropriation of property, as well as environmental or health and safety matters, in Hong Kong and other Southeast Asian countries.
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The future growth and level of profitability of the IP license sector of the events industry in Hong Kong and other Southeast Asian countries depend primarily upon consumer spending as well as the development of the market for IP license events in Hong Kong and other Southeast Asian countries, the nature, extent and timing of which will be determined by the interplay of a variety of factors, in particular, the investments of event organizers as well as the general conditions and prospects of the local economies. Economic changes as well as cultural, lifestyle, demographics and population changes may affect the demand for IP license events in Hong Kong and other Southeast Asian countries, and hence the business strategies of our customers which in turn will affect our business prospects and results of operations. There are also many other factors affecting the IP license sector of the events industry in Hong Kong and other Southeast Asian countries, including (i) general political, economic, financial and social developments in Hong Kong and other Southeast Asian countries; (ii) inflation; (iii) unemployment rate; (iv) fluctuations in interest rates; (iv) local government policies; and (vi) cyclical trends of the regional and global economies. If the IP license sector of the events industry in Hong Kong and other Southeast Asian countries declines for any reason, our business, results of operations, financial condition and future prospects could be adversely affected.
We provide event management, design and/or merchandising services to our customers on a project-by-project basis, which exposes us to the risk of uncertainty and potential volatility with respect to our revenue.
We provide event management, design and/or merchandising services to our customers on a project-by-project basis and this is not recurring in nature. As such, we cannot guarantee that our customers will continue to engage us for our event management, design and/or merchandising services or continue to provide us with new businesses. In general, we do not have long-term contracts with our customers which provide that they will deploy our services for all their event management, design and/or merchandising needs, which create uncertainty to our future revenue streams. Our business and future revenue will likely be adversely affected if we are unable to secure new service contracts from new customers or our existing customers do not continue to engage us.
It is also difficult to forecast future businesses from our customers as it depends on their investment decisions. We provide customized event management, design and/or merchandising services to meet the specific needs of our customers on a project-by-project basis. The contract sum is determined by various factors including estimated event execution time costs, complexity of the event and the third-party costs we incurred which will not be reimbursed by our customers. As such, the revenue generated from each customer is different for each contract. We cannot assure you that we can secure future service contracts with contract sum comparable with the service contracts we worked on during the fiscal years ended March 31, 2024, 2025 and 2026. The sustainability of our financial performance, including the number of projects undertaken, the total revenue contributed from the projects and revenue from each customer, is uncertain. Our financial performance may therefore fluctuate from year to year, and can be unpredictable.
We typically enter into fixed-price service contracts with our customers, and our failure to accurately estimate the resources and time required to perform these contracts could materially and adversely affect our business, results of operations and financial condition.
We typically enter into fixed-price service contracts with our customers for our event management, design and/or merchandising services, which requires us to accurately estimate the resources and time required in performing these contracts, such as manpower required and costs of other service providers, such as local facilitator and human resources companies supplying the temporary workers. As such, we have to bear the risk of cost overruns. There may be various factors affecting the actual time taken and cost incurred by us in completing the service contracts, including, among others, the event organizer rescheduling the events, delay in supply of products and services by third-party vendors, technical difficulties, lack of manpower and other unforeseeable problems and circumstances. Delay in completion or cost overruns may result in lower profits or losses in these contracts. We cannot assure you that we will be able to accurately estimate the resources and time required for completing our service contracts, and failure to do so may materially and adversely affect our business, results of operations and financial condition.
Our success depends on our ability to maintain our reputation and our business and financial results may be harmed if events occur that damage our reputation.
Our business, results of operations and prospects depend, in part, on our ability to maintain the value of our reputation for providing customized, value-added, quality and efficient event management, design and/or merchandising services. We could lose existing or potential customers and/or opportunities for securing new service contracts or direct investment deals if our reputation were to be associated with any negative publicity, including complaints raised by unsatisfied customers or their end consumers that comes to the public’s attention and accidents occurred in the experience events that we managed. If we fail to successfully maintain, promote and position our brand and protect our reputation, our business, results of operations and financial condition may be adversely affected.
| 6 |
We operate in a competitive market.
The events industry in Hong Kong is highly fragmented and intensely competitive. It is characterized by constant change and innovation as customers or end consumers are demanding event management companies to create deeper and more meaningful event experiences that leave lasting impressions. We specialize in organizing, planning, promoting and managing experience events. It is a niche sector of the events industry as it requires the players to have an in-depth knowledge on the operation of IP licenses and experience in working with IP owners. Our biggest competition comes from local event management companies that are experienced in organizing big scale public events that involve IP licenses. Furthermore, we may face potential competition from global event management companies that seek to enter the Hong Kong market, whether independently or through the formation of strategic alliances with, or acquisition of, event management companies that operate in the Hong Kong market. We believe the principal competitive factors in our market include breadth and depth of the scope of services, pricing, user experience, financial viability, industry expertise and reputation, proven customer references, track record as well as relationship with other industry players (such as IP owners, venue operators and overseas event management companies). Some of our competitors and potential competitors may be larger and have more manpower and resources, longer operating histories, more financial strength, stronger relationships with customers and higher level of market recognition than we have. As a result, our competitors may be able to respond more quickly and effectively than we can to new or changing opportunities, trends, customer and/or end consumer demands, industry standards and regulatory requirements. When we provide quotation on our event management, design and/or merchandising services for our customers, we may face keen competition and significant downward pricing pressure, thereby reducing our profit margins, which will have an adverse effect on our results of operations and profitability. If we fail to adapt to market conditions and customer and/or end consumer preferences expediently or otherwise fail to provide a competitive quotation as compared to our competitors, our potential customer may turn to our competitors. As a result, our customer base may decrease, which could materially and adversely affect our business, results of operations and financial condition. To increase our competitiveness, we may be required to divert additional resources to promote our event management, design and/or merchandising services and brand awareness, and such additional spending could adversely affect our profitability.
A shift in our customers’ business model may adversely affect our business, results of operations and financial condition.
The events industry was transformed by the COVID-19 pandemic, which forced events into virtual environments and accelerated the ongoing digital transformation of the events industry. For virtual events, the technology behind the virtual event is the event venue, video is the primary method of content delivery and virtual attendees create a digital footprint of all of their event engagement that can be captured, analyzed and leveraged to deliver better event experiences and inform subsequent sales and marketing efforts. Even as the COVID-19 pandemic has subsided, we believe virtual events will remain popular due to their ability to attract and engage vast audiences across the globe. In our current business model, we specialize in the organization of in-person events as an event planner only. If our customers shift their event delivery models from an in-person mode to a virtual mode, it will reduce their need for our event management services, which will have a material adverse impact on our business, results of operations and financial condition. Even if our customers continue to organize in-person events, our business, results of operations and financial condition will also be adversely affected if they decide to eliminate the role of the event planner and take over all the responsibilities themselves.
Our operating margin may decline as a result of increasing cost of revenue and other indirect costs.
Our cost of revenue is mainly composed of costs of goods sold, sub-contracting fee including costs of local facilitator, PR firms, contractors and temporary workers and project-related employee benefit expenses. Other indirect costs include office expenses, staff costs, insurance expenses and bank charges. Indirect costs are affected by, among other things, increase in overhead costs for administration purposes and rising interest rates. If labor costs and/or the other indirect costs increase, the local facilitator, human resources companies supplying the temporary workers and the manufacturers may pass on the increase in their costs to us by increasing their fees.
Our cost of revenue and other indirect costs mentioned above are subject to increase by other factors that are generally unpredictable and beyond our control or the control of our vendors. If these costs continue to rise and we fail to pass on the increases to our customers or end consumers, our business may be materially and adversely affected.
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We may incur losses in the future.
We had a net profit of approximately HK$7.1 million and HK$6.4 million and a net loss of approximately HK$74.1 million, respectively, for the fiscal years ended March 31, 2024, 2025 and 2026. Beginning in April 2024, we have mainly engaged in direct investment deals for experience events, and we endeavor to obtain multi-territorial IP licenses from IP owners to help us increase our market share in Hong Kong and further develop overseas markets. As a result of these changes to our business strategy, we anticipate that our operating expenses will increase in the foreseeable future as we seek to sign more direct investment deals, acquire IP licenses directly from IP owners, maintain and continue to grow our business, attract new customers and further enhance our services. These efforts may prove more expensive than we currently anticipate, and we may not succeed in increasing our revenue sufficiently to offset these higher operating expenses. As a result of the foregoing and other factors, we may incur net losses in the future and may be unable to achieve or maintain profitability on a quarterly or annual basis in the foreseeable future.
There is no guarantee that we will receive payments from our customers in full on time or at all.
We generally require the customers which engage our event management, design and/or merchandising services to pay us by two non-refundable instalments, one shortly after the signing of the service contracts and the other shortly before the opening of the event or delivery of the final design work or finished merchandise (as the case may be). There is no assurance that our customers will remain solvent or that our customers will pay us the amount due in full in a timely manner or at all. We could be engaged in prolonged negotiation with our customers with respect to the settlement of payments and could incur costs to enforce such payments from time to time. Any failure by our customers to make any payment on time may have a material adverse effect on our liquidity and any failure by our customers to pay us in full may have a material adverse effect on our business, results of operations and financial condition.
Errors, defects, interruptions or any other malfunction or safety issues causing disruption to the events we organize could diminish demand for our event management, design and/or merchandising services.
Our customers rely on our event management, design and/or merchandising services for the smooth running of their events. Any errors, defects, interruptions or any other malfunction or safety issues that arise during our organization, planning, promotion and management of our customers’ events or the events which we have invested causing disruption to such events could (i) harm the business of our customers or our business, and we may face claims from our customers and/or end consumers for the losses they suffer; and (ii) affect our market reputation, which may diminish customers’ demand for our event management, design and/or merchandising services and/or put us in an inferior position in future competition for new service contracts or direct investment deals. We may also have to divert significant resources to (a) fix such errors, defects, interruptions or any other malfunction or safety issues and to ensure the events will continue to run smoothly; (b) rebuild confidence in our event management, design and/or merchandising services and our brand image; and (c) defend ourselves in or settle any potential legal claims. All these could adversely affect our reputation, business, results of operations and financial condition.
We depend on third-party vendors to assist us with the organization, planning, promotion and/or management of events.
We depend on local facilitators to assist us with the organization, planning, promotion and management of events outside of Hong Kong and human resources companies to supply us with temporary workers to assist us in the management of events in Hong Kong. We have not entered into any long-term contract with these third-party vendors and hence we do not have a guaranteed supply of these services. If any of these vendors were to cease, suspend or limit their services provided to us, or adversely modify supply terms or pricing, our ability to provide our event management services may be materially impaired. We cannot assure you that we will be able to obtain these services or acceptable substitutes from alternative vendors on commercially reasonable terms or at all. Moreover, the services provided by the local facilitators and the temporary workers supplied by the human resources companies in Hong Kong may be ineffective, all of which may adversely affect our ability to fulfill our contractual commitments to our customers. If we deliver substandard services to our customers, our customers may reduce our fees, terminate our service contracts or stop using our services in the future. They may also initiate legal proceedings against us. All these may increase our costs and damage our market reputation, which in turn may adversely affect our business, results of operations and financial condition.
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We are dependent on third-party manufacturers for the production of merchandise, and any disruption to our relationship or their manufacturing operations could adversely affect our merchandising services.
All of the merchandise we sourced for our customers during the fiscal years ended March 31, 2024, 2025 and 2026 were produced by third-party manufacturers located in the PRC. As such, we rely heavily on the ability and efficiency of third-party manufacturers to produce merchandise for our customers and third-party manufacturers play a vital role in our merchandising services. We do not enter into any long-term contracts with third-party manufacturers and purchase contracts are signed with them on a case-by-case basis depending on the needs and requirements of our customers. There is no assurance that all or any of the third-party manufacturers that we have worked with during the fiscal years ended March 31, 2024, 2025 and 2026 will continue to produce merchandise for us at our desired quality and quantity,, in a timely manner and on terms commercially acceptable to us. Any disruption to such third-party manufacturers’ production may inevitably have an impact on their ability to produce the merchandise in line with our required schedule. If any of such third-party manufacturers terminates its business relationship with us for any reason or if there were changes to the current business arrangements, we may be unable to source suitable and stable supply of merchandise from comparable alternative third-party manufacturers in a timely manner or on terms commercially acceptable to us. Any of the above may result in production delay which would adversely affect our ability to fulfil our customers’ orders and may result in our customers cancelling their sales orders with us or cause serious disruption to our customers’ business (for instance, merchandise sales account for a significant amount of revenue for an experience event). All these will in turn adversely affect our sales and profitability as well as our reputation and business prospects.
Moreover, as we do not enter into any long-term contracts with the third-party manufacturers, the contractual terms offered by them may also be susceptible to fluctuations with regard to pricing, timing, quality and the market condition at the time of negotiation. Any increase in their costs may be passed on to us but we might be unable to pass on all or part of the increase in costs to our customers, which may have a material adverse effect on our financial performance.
We rely on a limited number of key suppliers.
We face risks due to a high concentration of suppliers, where a significant portion of our supply chain relies on a limited number of key suppliers. For the fiscal years ended March 31, 2024, 2025 and 2026 (excluding in-house staffs), cost of goods sold attributed to our five largest suppliers accounted for approximately 75.0%, 43.2% and 40.6% of our total cost of goods sold. Any disruptions, quality issues, pricing fluctuations, or operational difficulties with these suppliers could adversely affect our ability to source necessary materials or services, resulting in production delays, increased costs, or potential supply chain interruptions. Such dependencies expose us to risks of supply shortages, pricing volatility, and operational challenges, which could impact our financial performance and competitive position.
We may be exposed to IP infringement claims by third parties against IP owners, event organizers, ourselves and/or any other sub-licensees and if we fail to defend such claims, they could subject us to significant liabilities and other costs, and we may not be allowed to continue to use certain of the IP rights.
We specialize in organizing, planning, promoting and managing experience events, which typically involve IP owners granting event organizers (which are either our customers under service contracts or our licensors under direct investment deals) IP licenses of the licensed property for use in experience events in approved venues in a specified number of territories. Our success depends largely on our ability to use the licensed property to develop, organize, plan, promote and manage experience events without infringing the IP rights of third parties. We cannot assure you that third parties will not assert IP claims against the IP owners, event organizers, ourselves and/or any other sub-licensees during the course of the development, organization, planning, promotion and management of experience events. The validity and scope of those claims relating to the IP rights of the licensed property involve complex legal and factual questions and analysis, which can be uncertain and ambiguous. If third parties assert claims against the IP owners, event organizers, ourselves and/or any other sub-licensees for IP rights infringement, the IP owners, event organizers, ourselves and/or any other sub-licensees may need to defend the claims through legal proceedings, which can be both costly and time consuming and may significantly divert the efforts and resources of our management personnel in defending against these third-party infringement claims, regardless of the merits. If the IP owners, event organizers, ourselves and/or any other sub-licensees fail to successfully defend such claims, we may be exposed to substantial liabilities to third parties and/or our customers and subject us to injunctions prohibiting the exploitation of the relevant licensed property, which may materially and adversely affect our business, results of operations and financial condition. Any infringement claim, whether with merits or not, may generate negative publicity which could harm our reputation.
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If we are unable to protect the IP owners’ IP rights in the licensed property effectively, our business and reputation could suffer.
To protect their IP rights in the licensed property, the IP owners normally have very specific guidelines on the use of the licensed property, and we normally have to seek the IP owners’ prior approval on all proposed uses of the licensed property, which can be granted or rejected at the absolute discretion of the IP owners. We are also required to include appropriate copyright and trademark notices whenever any licensed property is being incorporated, displayed, exploited or otherwise used, as well as to inform the IP owner immediately in cases of any potential infringement of the IP owners’ IP rights in the licensed property. However, we cannot assure you that we will be able to fully comply with the above requirements and that the IP owners’ IP rights in the licensed property will be adequately protected. If we fail to comply with the above requirements or if we are unable to detect unauthorized use of the IP owners’ IP rights in the licensed property, or to take appropriate or timely steps to inform the IP owners of such unauthorized use, the IP owners may disapprove all plans and proposals we submit with respect to the experience events we organize, plan, promote and manage and this may harm our business and reputation, which in turn could adversely affect our business, results of operations and financial condition.
If we are unable to maintain and protect our IP, or if third parties assert that we infringe on their IP rights, our business could suffer.
Our business depends, in part, on our ability to identify and protect proprietary information and other IP such as the IP owners’ licensed property, information and business methods, our designs of merchandise and our customer lists. We rely on trade secrets, confidentiality policies, non-disclosure and other contractual arrangements and copyright and trademark laws to protect our IP rights. However, we may not adequately protect these rights, and their disclosure to, or use by, third parties may harm our competitive position. Our inability to detect unauthorized use of, or to take appropriate or timely steps to enforce, our IP rights may harm our business. Also, third parties may claim that our business operations infringe on their IP rights. These claims may harm our reputation, be a financial burden to defend, distract the attention of our management and prevent us from offering some products and/or services. IP is increasingly stored or carried on mobile devices, such as laptop computers, which increases the risk of inadvertent disclosure if the mobile devices are lost or stolen and the information has not been adequately safeguarded or encrypted. This also makes it easier for someone with access to our systems, or someone who gains unauthorized access, to steal information and use it to our disadvantage.
Any failure to maintain an effective quality control system may have a material adverse effect on our reputation, results of operations and financial condition.
As a merchandising service provider, quality control is a critical part of the supply chain management total solutions we provide to our customers. We have a quality control system for our merchandising staff to monitor and inspect the merchandise produced for our customers from the time of production of samples, procurement of raw materials to the merchandise being produced during inline production. If there is any significant failure or deterioration in our quality control system or if we fail to meet or conform to the required specifications of our customers, it may result in product returns and/or customer claims or complaints and we may lose the customer. All these could have a material adverse effect on our reputation, results of operations and financial condition.
The nature of our business exposes us to product liability claims.
A product liability claim attempts to hold the manufacturer or seller of a product accountable for allowing a defective product to enter into the stream of commerce. There are three types of defects in merchandise that may result in liability, namely design defects, manufacturing defects and defective warnings (which includes the failure to properly instruct a consumer on how to use the product). For instance, a merchandise may be flammable and does not meet local safety standards for fire and burn ratings and there is inadequate warning regarding flame and fire risks to the end consumers. There is no assurance that we and/or the third-party manufacturers engaged by us will not design, develop or manufacture any merchandise for our customers that are defective. If any defective merchandise designed, developed or manufactured by us and/or the third-party manufacturers engaged by us are subsequently sold by our customers, we may be exposed to product liability claims from our customers and/or their end consumers and we may have to recall all the defective merchandise in the market. Even if we managed to recall all the merchandise, or if we defend or settle such claims, our reputation, business, results of operations, financial condition and business prospects may be adversely affected.
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Legal disputes or proceedings may expose us to liabilities, divert our management’s attention and adversely affect our reputation.
The success of an experience event will require the collaboration of several parties, including the IP owner, the event organizer, the event planner and other service providers, including without limitation the local facilitator (where applicable), venue operator, contractor, public relationship firm, ticketing platforms, caterers, forwarders, logistic companies, and hence the operation of an experience event is contract intensive. Although the event organizer is normally the party signing these contracts (save for the contract with the local facilitator), we occasionally sign some of these contracts as agent for and on behalf of the event organizer. In any case, as the event planner of the experience event, we are responsible for liaising with the various contracting parties and supervising the execution of these contracts, and hence might be drawn into disputes between these contracting parties from time to time. In direct investment deals, we step into the shoes of the event organizer and we will sign all these contracts ourselves and hence will be directly exposed to these disputes. Dealing with these disputes is generally time-consuming and may require us to incur legal fees that may not be indemnified by the event organizer. If the resolution of such disputes is in a manner adverse to our interests, that may harm our reputation. All these could adversely affect our business, results of operations and financial condition.
In any case, during the ordinary course of our business operations, we may be involved in legal disputes or proceedings relating to, among other things, IP disputes, contractual disputes and labor disputes. Such legal disputes or proceedings may subject us to substantial liabilities and may have a material and adverse effect on our reputation, business, results of operations and financial condition.
If we become involved in material or protracted legal proceedings or other legal disputes in the future, we may need to incur substantial legal expenses and our management may need to devote significant time and attention to handle such proceedings and disputes, diverting their attention from our business operations. In addition, the outcome of such proceedings or disputes may be uncertain and could result in settlement or outcomes which may adversely affect our results of operations and financial condition.
Natural disasters and other catastrophic events beyond our control could adversely affect our business operations and financial performance.
The occurrence of one or more other natural disasters, such as fires, hurricanes, tornados, tsunamis, floods and earthquakes; geo-political events, such as civil unrest in a country in which our suppliers are located or terrorist or military activities disrupting transportation, communication or utility systems; or other highly disruptive events, such as nuclear accidents, pandemics, unusual weather conditions or cyberattacks, could adversely affect our operations and financial performance. The occurrence of these events could result in, among other things, operational disruptions, physical damage to or destruction or disruption of one or more of our properties or properties used by third parties in connection with the supply of products or services to us, the lack of an adequate workforce in parts or all of our operations and communications and transportation disruptions, which in turn could also cause consumer confidence and spending to decrease or result in increased volatility in Hong Kong and the Southeast Asian countries in which our customers have invested and global financial markets and economy. Such occurrences in the future could have a material adverse effect on us and could also have indirect consequences such as increases in the costs of insurance if they result in significant loss of property or other insurable damage.
Our current insurance coverage may not sufficiently protect us against all the risks we are exposed to, and the insurance premium may increase.
There can be no assurance that our current insurance will cover all our risks or adequately protect us against all liabilities arising from claims and litigation against us. We will have to bear any losses, damages or liabilities in the course of our operations arising from events for which we do not have adequate insurance coverage. Further, the insurance premium payable by us depends on various factors, including the scope and contract sum of the projects undertaken by us and our insurance claim track record. There is no assurance that the insurance premium payable by us will not increase or that our insurance coverage will not be reduced in the future. If we were held liable for uninsured losses, the amounts of claims for insured losses exceed the limits of our insurance coverage or the insurance premium payable by us increases significantly, our business, results of operations and financial condition may be materially and adversely affected.
Our business could be adversely affected by information technology systems breakdown or disruption.
We depend on our information technology systems to (i) conduct market research; (ii) trace information on the contracts we have signed and the contracts signed between our customers and their other service providers; (iii) manage our work schedule; and (iv) review our performance. We also depend on our information technology systems to assist us in our (a) designs and drawings; (b) preparation of all relevant event proposals and plans; and (c) communication with third parties, such as our customers, the other service providers engaged by them and our suppliers. An extended breakdown or failure of our information technology systems could disrupt our operations and have an adverse effect on our business, results of operations and financial condition.
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Fluctuations in foreign currency exchange rates may materially and adversely affect our financial condition and results of operations.
We are based in Hong Kong while all our suppliers of merchandise are based in the PRC. The brand owners, franchisees, distributors and local facilitators which we work with on overseas experience events are generally based overseas, such as in Malaysia and Thailand. Our reporting currency is Hong Kong Dollar while a portion of our overseas procurement is denominated in foreign currencies, such as Renminbi, Malaysian Ringgits and Thai Baht. As such, we are exposed to foreign currency risk as we trade in various foreign currencies. Fluctuations in foreign exchange are unpredictable as they may be caused by various factors, which would affect the gains and losses from transactions in currencies other than our reporting currency. We cannot assure you that we will not suffer any loss on foreign exchange in the future. Further, we do not have any forward contracts or other derivative instruments to manage our foreign exchange risks. In the event that we are unable to manage our foreign currency risks effectively or at all, our business, financial condition and results of operations may be materially and adversely affected.
The aging population may have an adverse effect on our business, results of operations and financial condition.
We specialize in organizing, planning, promoting and managing experience events, which typically involve IP licenses of licensed characters, the target audience of which are mainly young children, teenagers and young adults. The aging population in Hong Kong and the other Southeast Asia countries may hinder the growth of our business in the long run, as the demand for such experience events may gradually decrease due to the drop of birth rate in these countries. As such, a decrease in the size of the target audience together with an aging population may result in a decline in the demand for experience events, which may have an adverse effect on our business, results of operations and financial condition.
Our business may be subject to seasonal effects, which may adversely affect our liquidity and results of operations in certain seasons.
Our business generally experiences some effects of seasonal variations. Some of our customers tend to organize events during festive seasons such as New Year, Chinese New Year, Easter, Mid-Autumn Festival, Christmas or during the summer vacation, which may result in a fluctuation of our revenue. This seasonality factor may cause seasonal fluctuations in our financial results, which may adversely affect our liquidity and results of operations in certain seasons.
We may need to raise additional capital required to grow our business, and we may be unable to raise capital on terms acceptable to us or at all.
Growing and operating our business will require significant cash outlays and capital expenditures and commitments. There is a risk that we may need additional cash resources in the future to fund our growth plans or if we experience adverse changes in business conditions or other developments. We may also need additional cash resources in the future if we find and wish to pursue opportunities for new investments, acquisitions, capital expenditures or similar actions. If we determine that our cash requirements exceed the amount of cash and cash equivalents we have on hand at the time, we will need to seek additional capital, potentially through equity or debt financing, to fund our growth. Our ability to access the credit and capital markets in the future as a source of liquidity, and the borrowing costs associated with such financing, are dependent upon market conditions. We cannot provide any assurance that our assumptions used to estimate our liquidity requirements will remain accurate due to unseen factors such as the recurrence of the Pandemic, risks of war and regional conflicts. In the event of a sustained market deterioration, and continued declines in revenues, we may need additional liquidity, which would require us to evaluate available alternatives and take appropriate actions. We cannot provide any assurance that we will be able to obtain additional sources of financing or liquidity in amounts or on terms acceptable to us, or at all. If new sources of financing are required, but are insufficient or unavailable, we will be required to modify our growth and operating plans based on available funding, if any, which would harm our ability to grow our business.
Our executive officers have no prior experience in operating a U.S. public company, and their inability to operate the public company aspects of our business could harm us.
Our executive officers have no experience in operating a U.S. public company, which makes our ability to comply with applicable laws, rules and regulations uncertain. Our failure to comply with all laws, rules and regulations applicable to U.S. public companies could subject us or our management to regulatory scrutiny or sanction, which could harm our reputation and share price.
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If we fail to implement and maintain an effective system of internal controls, we may be unable to accurately or timely report our results of operations or prevent fraud, and investor confidence and the market price of our Class A Ordinary Shares may be materially and adversely affected.
Effective internal control over financial reporting is necessary for us to provide reliable financial reports and, together with adequate disclosure controls and procedures, are designed to prevent fraud.
Our internal controls relating to financial reporting have not kept pace with the expansion of our business. Our financial reporting function and system of internal controls may be less developed in certain respects than those of similar companies that operate in Hong Kong and may not provide our management with as much or as accurate or timely information. The PCAOB has defined a material weakness as “a deficiency, or a combination of deficiencies in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim statements will not be prevented or detected on a timely basis.”
Our failure to implement and maintain effective internal controls over financial reporting could result in errors in our financial statements that could result in a restatement of our financial statements, cause us to fail to meet our reporting obligations and cause investors to lose confidence in our reported financial information, which may result in volatility in and a decline in the market price of the Class A Ordinary Shares.
During the course of the review of our consolidated financial statements for the year ended March 31, 2026, we and our auditor identified certain material weaknesses in our internal control over financial reporting, primarily reflecting the early stage of our organizational development and the limited size of our finance function. Key areas include:
1) Control Environment and Documentation
We do not yet have a fully formalized internal control framework. Certain processes remain susceptible to management override, and documentation supporting key transactions is not consistently maintained. We are implementing enhanced policies and procedures to strengthen oversight and recordkeeping.
2) Systems and Closing Procedures
We currently rely on manual, Excel-based records for accounting and payroll, which increases the risk of error and incomplete closing procedures. We are in the process of implementing a dedicated ERP system to improve audit trails, transaction tracking, and period-end controls.
3) Revenue Recognition and Related Party Transactions
Our controls over revenue recognition, particularly in co-organizer arrangements, and related party transactions are not sufficiently formalized. In certain cases, revenue was presented on a gross basis rather than net, and related party approvals lacked board oversight. We are establishing a related party transaction policy and strengthening procedures for revenue allocation and verification.
4) Financial Reporting and Classification
Certain balances, including IPO costs, investment accounts, and intangible assets under development, were not appropriately classified or analyzed for impairment. We are enhancing review procedures to ensure proper accounting treatment and compliance with IFRS requirements.
We are a public company in the United States subject to the Sarbanes-Oxley Act of 2002. Section 404 of the Sarbanes-Oxley Act of 2002, or Section 404, will require that we include a report of management on our internal control over financial reporting in our annual report on Form 20-F. In addition, if we cease to be an “emerging growth company” as such term is defined in the JOBS Act, our independent registered public accounting firm must attest to and report on the effectiveness of our internal control over financial reporting on an annual basis. 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, operated or reviewed, or if it interprets the relevant requirements differently from us. In addition, after we become a public company, our reporting obligations may place a significant strain on our management, operational and financial resources and systems for the foreseeable future. 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 be unable to conclude on an ongoing basis that we have effective internal control over financial reporting in accordance with Section 404. Generally speaking, 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 Class A Ordinary Shares. Additionally, ineffective internal control over financial reporting could expose us to increased risk of fraud, misuse of corporate assets and legal actions under securities laws and subject us to potential delisting from the stock exchange on which we list, regulatory investigations and civil or criminal sanctions.
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We will be subject to changing laws, rules and regulations in the U.S. regarding regulatory matters, corporate governance and public disclosure that will increase both our costs and the risks associated with non-compliance.
We are subjected to rules and regulations by various governing bodies and self-regulatory organizations, including, for example, the SEC and the Nasdaq, which are charged with the protection of investors and the oversight of companies whose securities are publicly traded, and to new and evolving regulatory measures under applicable law. Our efforts to comply with new and changing laws and regulations have resulted in and are likely to continue to result in increased general and administrative expenses and a diversion of management time and attention from revenue-generating activities to compliance activities.
Moreover, as these laws, regulations and standards are subject to varying interpretations, their application in practice may evolve over time as new guidance becomes available. This evolution may result in continuing uncertainty regarding compliance matters and additional costs necessitated by ongoing revisions to our disclosure and governance practices. If we fail to and comply with these regulations and any subsequent changes, we may be subject to penalties and our business may be harmed.
Risks Related to Doing Business in Hong Kong
Through long arm provisions under the current PRC laws and regulations, the PRC government may exercise significant oversight over the conduct of our business, which could result in a material change in our operations and/or the value of our Class A Ordinary Shares. Changes in the policies, regulations and rules and the enforcement of laws of the Chinese government may also occur and our assertions and beliefs of the risk imposed by the PRC legal and regulatory system cannot be certain. To the extent any new or more stringent measures are required to be implemented, our business, financial condition and results of operations could be adversely affected and such measures could materially decrease the value of our Class A Ordinary Shares, potentially rendering them worthless.
Our operations are located in Hong Kong. In addition, PRC laws and regulations may be interpreted and applied inconsistently by different Hong Kong or PRC agencies or authorities, and may be inconsistent with our current policies and practices. New laws, regulations, and other government directives in the PRC that apply to our Operating Subsidiary in Hong Kong may also be costly to comply with, and such compliance or any associated inquiries or investigations or any other PRC or Hong Kong government actions may:
| ● | intervene or interfere with our operations at any time; |
| ● | delay or impede our development; |
| ● | result in negative publicity or increase our operating costs; |
| ● | require significant management time and attention; and/or |
| ● | subject us to remedies, administrative penalties and even criminal liabilities that may harm our business, including fines assessed for our current or historical operations, or demands or orders that we modify or even cease our business practices. |
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Any such interventions or actions could result in a material negative change in our operations, which could also negatively impact the value of our Class A Ordinary Shares.
Recently, the PRC government initiated a series of regulatory actions and statements to regulate business operations in certain areas in China, including the regulation of certain activities in the United States and global securities markets, enhancing supervision over PRC-based companies listed overseas using VIE structures, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement. Since some of these statements and regulatory actions are new, it is highly uncertain how soon legislative or administrative regulation making bodies will respond and what existing or new laws or regulations or detailed implementations and interpretations will be modified or promulgated, if any, and the potential impact such modified or new laws and regulations will have on our daily business operation, the ability to accept foreign investments and list on a U.S. or other foreign exchange.
The PRC government may exert more supervision and regulations over offerings conducted overseas and foreign investment in the PRC or HK-based issuers, which may result in a material change in our operations and/or the value of our Class A Ordinary Shares, or even our ability to continue to offer securities to investors, in which case the value of our Class A Ordinary Shares could significantly decline or become worthless.
The promulgation of new laws or regulations, or the new interpretation of existing laws and regulations, in each case, that restrict or otherwise unfavorably impact the ability or way we conduct our business, could require us to change certain aspects of our business to achieve compliance, which could decrease demand for our services, reduce revenues, increase costs, require us to obtain more licenses, permits, approvals or certificates, or subject us to additional liabilities. To the extent any new or more stringent measures are required to be implemented, our business, financial condition and results of operations could be adversely affected and such measures could materially decrease the value of our Class A Ordinary Shares, potentially rendering them worthless.
In the event the PRC government restricts or prohibits cash transfers from Hong Kong, our ability to distribute earnings and pay dividends may be impeded, thus limiting our ability to grow our business or receive earnings to the detriment of our investors.
Further, there are currently no restriction or limitation under the laws of Hong Kong on the conversion of HK dollar into foreign currencies and the transfer of currencies out of Hong Kong and the laws and regulations of the PRC on currency conversion control do not currently have any material impact on the transfer of cash between Dreamland Limited, the ultimate holding company, and Trendic International Limited, the wholly-owned operating subsidiary in Hong Kong. However, the PRC government may, in the future, impose restrictions or limitations on our ability to move money out of Hong Kong to distribute earnings and pay dividends to and from the other entities within our organization or to fund operations outside of Hong Kong. Such restrictions and limitations, if imposed in the future, may delay or hinder the expansion of our business outside of Hong Kong and may affect our ability to receive funds from Trendic International Limited.
The Chinese regulatory authorities could disallow our organizational structure, which would likely result in a material change in our operations and/or a material change in the value of the securities we are registering for sale, including that it could cause the value of such securities to significantly decline or become worthless.
We are exposed to various risks and uncertainties stemming from the interpretations and implementations of laws and regulations in the PRC. These include, but are not limited to, the regulatory scrutiny of PRC companies’ overseas listings. Furthermore, we are susceptible to potential risks and uncertainties associated with future actions undertaken by the PRC government, which could potentially result in the disallowance of our organizational structure. Such an outcome would likely lead to a substantial transformation in our operational activities, and as a consequence, the value of our Class A Ordinary Shares may experience a significant depreciation or even become worthless.
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We may become subject to a variety of PRC laws and other regulations regarding data protection or cybersecurity, and any failure to comply with applicable laws and regulations could have a material and adverse effect on our business, financial condition and results of operations.
We may become subject to a variety of laws and regulations in the PRC regarding privacy, data security, cybersecurity, and data protection, although we do not believe that we are currently subject to any such laws or regulations. These laws and regulations are continuously evolving and developing. The scope and interpretation of the laws that are or may be applicable to us are often uncertain and may be conflicting, particularly with respect to foreign laws. In particular, there are numerous laws and regulations regarding privacy and the collection, sharing, use, processing, disclosure, and protection of personal information and other user data. Such laws and regulations often vary in scope, may be subject to differing interpretations, and may be inconsistent among different jurisdictions.
We obtain information about various aspects of our operations as well as regarding our employees and third parties. We also maintain information about various aspects of our operations as well as regarding our employees. The integrity and protection of our customer, employee and company data is critical to our business. Our customers and employees expect that we will adequately protect their personal information. We are required by applicable laws to keep strictly confidential the personal information that we collect, and to take adequate security measures to safeguard such information.
The PRC Criminal Law, as amended by Amendment 7 (effective on February 28, 2009) and Amendment 9 (effective on November 1, 2015), prohibits institutions, companies and their employees from selling or otherwise illegally disclosing a citizen’s personal information obtained during the course of performing duties or providing services or obtaining such information through theft or other illegal ways. On November 7, 2016, the Standing Committee of the PRC National People’s Congress issued the Cyber Security Law of the PRC, or Cyber Security Law, which became effective on June 1, 2017.
Pursuant to the Cyber Security Law, network operators must not, without users’ consent, collect their personal information, and may only collect users’ personal information necessary to provide their services. Providers are also obliged to provide security maintenance for their products and services and shall comply with provisions regarding the protection of personal information as stipulated under the relevant laws and regulations.
The Civil Code of the PRC (issued by the PRC National People’s Congress on May 28, 2020 and effective from January 1, 2021) provides the main legal basis for privacy and personal information infringement claims under the Chinese civil laws. PRC regulators, including the CAC, the Ministry of Industry and Information Technology, and the Ministry of Public Security have been increasingly focused on regulation in the areas of data security and data protection.
The PRC regulatory requirements regarding cybersecurity are constantly evolving. For instance, various regulatory bodies in China, including the CAC, the Ministry of Public Security and the State Administration for Market Regulation have interpreted and enforced data privacy and protection laws and regulations within their respective areas.
In November 2016, the Standing Committee of China’s National People’s Congress passed the CSL, which became effective in June 2017. The CSL is the first PRC law that systematically lays out the regulatory requirements on cybersecurity and data protection, subjecting many previously under-regulated or unregulated activities in cyberspace to government scrutiny. The legal consequences of violation of the CSL include penalties of warning, confiscation of illegal income, suspension of related business, winding up for rectification, shutting down the websites, and revocation of business license or relevant permits. In April 2020, the CAC and certain other PRC regulatory authorities promulgated the Cybersecurity Review Measures, which became effective in June 2020. Pursuant to the Cybersecurity Review Measures, operators of critical information infrastructure must pass a cybersecurity review when purchasing network products and services which do or may affect national security. On July 10, 2021, the CAC issued a revised draft of the Measures for Cybersecurity Review for public comments(“Draft Measures”), which required that, in addition to “operator of critical information infrastructure,” any “data processor” carrying out data processing activities that affect or may affect national security should also be subject to cybersecurity review, and further elaborated the factors to be considered when assessing the national security risks of the relevant activities, including, among others, (i) the risk of core data, important data or a large amount of personal information being stolen, leaked, destroyed, and illegally used or exited the country; and (ii) the risk of critical information infrastructure, core data, important data or a large amount of personal information being affected, controlled, or maliciously used by foreign governments after listing abroad. The CAC has said that under the proposed rules companies holding data on more than 1,000,000 users must now apply for cybersecurity approval when seeking listings in other nations because of the risk that such data and personal information could be “affected, controlled, and maliciously exploited by foreign governments.” The cybersecurity review will also investigate the potential national security risks from overseas initial public offerings. On June 10, 2021, the Standing Committee of the National People’s Congress promulgated the PRC Data Security Law, which took effect on September 1, 2021. The Data Security Law also sets forth the data security protection obligations for entities and individuals handling personal data, including that no entity or individual may acquire such data by stealing or other illegal means, and the collection and use of such data should not exceed the necessary limits. The costs of compliance with, and other burdens imposed by, CSL and any other cybersecurity and related laws may limit the use and adoption of our products and services and could have an adverse impact on our business.
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On December 28, 2021, thirteen PRC regulatory agencies, namely, the CAC, the National Development and Reform Commission, the Ministry of Industry and Information Technology, the Ministry of Public Security, the Ministry of State Security, the Ministry of Finance, the Ministry of Commerce, the State Administration for Market Regulation, CSRC, the People’s Bank of China, the National Radio and Television Administration, National Administration of State Secrets Protection and the National Cryptography Administration, jointly adopted and published the Measures for Cybersecurity Review (2021), which became effective on February 15, 2022. The Measures for Cybersecurity Review (2021) required that, among others, in addition to “operator of critical information infrastructure” any “operator of network platform” holding personal information of more than one million users which seeks to list in a foreign stock exchange should also be subject to cybersecurity review.
According to the temporary application of Chinese laws related to cybersecurity to companies within China, companies established in Hong Kong are not within the scope of application. The Company is therefore currently not required to obtain regulatory approval from the CAC nor any other PRC authorities for its and its subsidiaries’ operations in HK.
We do not expect to be subject to the cybersecurity review by the CAC, given that: (i) using our products and services do not require providing users’ personal information; (ii) we possess minimum amount, if not none of personal information in our business operations; (iii) data processed in our business does not have a bearing on national security and thus may not be classified as core or important data by the authorities and (iv) our operations are in HK, a Special Autonomous Region apart from mainland PRC. However, detailed implementation and interpretation related to network security are still under development. If any such new laws, regulations, rules, or implementation and interpretation comes into effect, we will take all reasonable measures and actions to comply and to minimize the adverse effect of such laws on us, where applicable and necessary.
We cannot assure you that PRC regulatory agencies, including the CAC, would take the same view as we do, and there is no assurance that we can fully or timely comply with such laws. In the event that we are subject to any mandatory cybersecurity review and other specific actions required by the CAC, we face uncertainty as to whether any clearance or other required actions can be timely completed, or at all. Given such uncertainty, we may be further required to suspend our relevant business, shut down our website, or face other penalties, which could materially and adversely affect our business, financial condition, and results of operations.
We believe that we have been in compliance with the data privacy and personal information requirements of the CAC. Neither the CAC nor any other PRC regulatory agency or administration has contacted the Company in connection with the Company’s or its subsidiaries’ operations.
We may be subject to a variety of laws and other obligations regarding data protection in HK. The Personal Data (Privacy) Ordinance (Chapter 486 of the Laws of Hong Kong) (the “PDPO”) came into force on 20 December 1996. The PDPO states that any person who controls the collection, holding, processing or use of personal data (the “data user”) shall not do any act, or engage in a practice, that contravenes any of the data protection principles set out in Schedule 1 to the PDPO (the “Data Protection Principles”) unless the act or practice, as the case may be, is required or permitted under the PDPO. Personal data means any data (a) relating directly or indirectly to a living individual; (b) from which it is practicable for the identity of the individual to be directly or indirectly ascertained; and (c) in a form in which access to or processing of the data is practicable.
The Data Protection Principles set out that (1) personal data must be collected in a lawful and fair way, for a purpose directly related to a function or activity of the data user. Data subjects must be notified of the purpose for which the data is to be used and the classes of persons to whom the data may be transferred. Data collected should be adequate but not excessive; (2) personal data must be accurate and should not be kept for a period longer than necessary for the fulfillment of the purpose for which the data is or is to be used; (3) personal data must be used for the purpose for which the data is collected or for a directly related purpose unless voluntary and explicit consent with a new purpose is obtained from the data subject; (4) a data user shall take practicable steps to safeguard any personal data held against unauthorized or accidental access, processing, erasure, loss or use; (5) a data user shall take practicable steps so that its policies and practices in relation to personal data, the kind of personal data it holds and the main purposes for which the personal data is or is to be used for are made known to the public; and (6) a data shall be entitled to request access to personal data and must be allowed to correct the personal data if it is inaccurate.
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Moreover, the Personal Data (Privacy) (Amendment) Ordinance 2021 (the “PDPAO”) came into effect on 8 October 2021. It amends the PDPO, particularly to: (i) criminalize doxing, i.e. unconsented disclosure of personal information of targeted individuals and groups; (ii) introduce a cessation notice regime to tackle doxing with extra-territorial reach; and (iii) substantially expand the investigation and enforcement powers of the Privacy Commissioner for Personal Data, in contexts beyond doxing.
We are of the view that we are not likely to be in breach of the PDPO and the PDPAO, for the following reasons: (i) using our products and services do not require providing applicable users’ personal information and (ii) we possess a minimum amount, if not none of the personal information in our business operations. Nonetheless, we are subject to laws and regulations relating to the collection, storage, use, processing, transmission, retention, security and transfer of personal information and other data. The interpretation and application of laws, regulations and standards on data protection and privacy may continue to evolve. We cannot assure you that the governmental authorities will not interpret or implement the laws or regulations in ways that negatively affect us. We may be subject to investigations and inspections by government authorities regarding our compliance with laws and regulations on data privacy, and we cannot assure you that our practices will always fully comply with all applicable rules and regulatory requirements. In addition, laws, regulations and standards on data protection and privacy continue to develop and may vary from jurisdiction to jurisdiction. Complying with emerging and changing international requirements may cause us to incur substantial costs or require us to change our business practices.
We do not expect the China’s Enterprise Tax Law to be applicable to us as we do not have any subsidiary incorporated in the Mainland China as a PRC domestic company. Further, in August 2006, Hong Kong and China have signed a comprehensive arrangement titled “Arrangement between the Mainland of China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income” (the “Comprehensive Double Taxation Arrangement”) for the allocation of the right to tax between the two jurisdictions on a reasonable basis to avoid double taxation of income. The Comprehensive Double Taxation Arrangement covers income from immovable property, associated enterprises, dividends, interest, royalties, capital gains, pensions and government services etc. The Comprehensive Double Taxation Arrangement has since then been modified in 2008, 2010, 2015 and 2019 under different protocols for the purpose of further develop the economic relationship and to enhance the co-operation in tax matters, intending to eliminate double taxation with respect to taxes on income without creating opportunities for non-taxation or reduced taxation through tax evasion or avoidance (including through treaty-shopping arrangements aimed at obtaining tax reliefs provided in the Comprehensive Double Taxation Arrangement for the indirect benefit of residents of third tax jurisdictions). Currently, we do not rely on the Comprehensive Double Taxation Arrangement and no application has been made thereto.
The HFCA Act and the Accelerating Holding Foreign Companies Accountable Act call for additional and more stringent criteria to be applied to emerging market companies upon assessing the qualification of their auditors, especially the non-U.S. auditors who are not inspected by the PCAOB. These developments could add uncertainties as Nasdaq may determine to delist our securities if the PCAOB determines that it cannot inspect or fully investigate our auditor.
On April 21, 2020, former SEC Chairman Jay Clayton and former PCAOB Chairman William D. Duhnke III, along with other senior SEC staff, released a joint statement highlighting the risks associated with investing in companies based in or have substantial operations in emerging markets including China. The joint statement emphasized the risks associated with lack of access for the PCAOB to inspect auditors and audit work papers in China and higher risks of fraud in emerging markets.
On May 18, 2020, Nasdaq filed three proposals with the SEC to (i) apply minimum offering size requirement for companies primarily operating in “Restrictive Market”, (ii) adopt a new requirement relating to the qualification of management or board of directors for Restrictive Market companies, and (iii) apply additional and more stringent criteria to an applicant or listed company based on the qualifications of the company’s auditors.
On December 18, 2020, the “Holding Foreign Companies Accountable Act” was signed by President Donald Trump and became law. This legislation requires certain issuers of securities to establish that they are not owned or controlled by a foreign government. Specifically, an issuer must make this certification if the PCAOB is unable to audit specified reports because the issuer has retained a foreign public accounting firm not subject to inspection by the PCAOB. Furthermore, if the PCAOB is unable to inspect the issuer’s public accounting firm for three (3) consecutive years beginning in 2021, the issuer’s securities are banned from trade on a national exchange or through other methods.
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On June 22, 2021, the U.S. Senate passed the “Accelerating Holding Foreign Companies Accountable Act”, which, if passed by the U.S. House of Representatives and signed into law by the President, would decrease the number of non-inspection years for foreign companies to comply with PCAOB audits from three (3) to two (2) years, thus, reducing the period before their securities may be prohibited from trading or delisted if the PCAOB determines that it cannot inspect or investigate our auditor completely.
On November 5, 2021, the SEC approved the PCAOB’s Rule 6100, Board Determinations Under the “Holding Foreign Companies Accountable Act”. Rule 6100 provides a framework for the PCAOB to use to determine whether it is unable to inspect or investigate registered public accounting firms located in a foreign jurisdiction because of a position taken by one or more authorities in that jurisdiction.
On December 2, 2021, the SEC adopted amendments to finalize rules implementing the submission and disclosure requirements in the HFCAA. The rules apply to registrants 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.
On December 16, 2021, the PCAOB issued a report on its determinations that the PCAOB is unable to inspect or investigate completely PCAOB-registered public accounting firms headquartered in mainland China and in Hong Kong, a Special Administrative Region of the PRC, because of positions taken by PRC authorities in those jurisdictions. The PCAOB made the Determinations pursuant to PCAOB Rule 6100, which provides a framework for how the PCAOB fulfills its responsibilities under the HFCAA.
On August 26, 2022, the PCAOB signed the SOP Agreements with the CSRC and the MOF governing inspections and investigations, to establish a specific, accountable framework to make possible complete inspections and investigations by the PCAOB of audit firms based in mainland China and Hong Kong, as required under U.S. law.
On December 15, 2022, the PCAOB determined that it was able to secure complete access to inspect and investigate registered public accounting firms headquartered in mainland China and Hong Kong and vacated its previous determinations to the contrary. However, should PRC authorities obstruct or otherwise fail to facilitate the PCAOB’s access in the future, the PCAOB may consider the need to issue a new determination.
On December 29, 2022, provisions of the Accelerating Holding Foreign Companies Accountable Act were signed into law as part of the Consolidated Appropriations Act, amending the HFCAA by requiring the SEC to prohibit an issuer’s securities from trading on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive years instead of three.
Any lack of access to the PCAOB inspection in China prevents the PCAOB from fully evaluating audits and quality control procedures of the auditors based in China. As a result, the investors may be deprived of the benefits of such PCAOB inspections. The inability of the PCAOB to conduct inspections of auditors in China makes it more difficult to evaluate the effectiveness of these accounting firms’ audit procedures or quality control procedures as compared to auditors outside of China that are subject to the PCAOB inspections, which could cause existing and potential investors to lose confidence in audit procedures and reported financial information and the quality of financial statements of China-based companies.
Our auditor, TAAD, is headquartered in Diamond Bar, California and registered with the PCAOB. Our auditor is subject to laws in the United States pursuant to which the PCAOB conducts regular inspections to assess an auditor’s compliance with the applicable professional standards, and have been inspected by the PCAOB on a regular basis. As such, as of the date of this Annual Report, our offering is not affected by the HFCAA and related regulations. However, the recent developments would add uncertainties and 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 related to the audit of our financial statements. Furthermore, there is a risk that our auditor cannot be inspected by the PCAOB in the future. The lack of inspection could cause trading in our securities to be prohibited on a national exchange or in the over-the-counter trading market under the HFCAA and related regulations, and, as a result, Nasdaq may determine to delist our securities, which may cause the value of our securities to decline or become worthless.
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The Hong Kong legal system is subject to uncertainties in the interpretation and enforcement of PRC laws and regulations.
Hong Kong is a Special Administrative Region of the PRC. Following British colonial rule from 1842 to 1997, China assumed sovereignty under the “one country, two systems” principle. The Hong Kong Special Administrative Region’s constitutional document, the Basic Law, prescribes that Hong Kong’s current sovereignty will remain in effect for 50 years.
The PRC legal system is based on written statutes and prior court decisions have limited value as precedents. We cannot predict the effect of future developments in the Hong Kong legal system, including the promulgation of new laws, changes to existing laws or the interpretation or enforcement thereof, or the pre-emption of local regulations by national laws. These uncertainties could limit the legal protections available to us, including our ability to enforce our agreements with our customers.
We may be affected by adverse changes in the political, economic, regulatory or social conditions in Hong Kong.
Our operations in HK are subject to special PRC considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic and legal environment and foreign currency exchange. Our operating results may be adversely affected by changes in the political and social conditions in HK, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation, among other things. Similarly, Hong Kong’s economy differs from the economies of most developed countries in many respects, including the amount of PRC government involvement, level of development, growth rate, control of foreign exchange and allocation of resources. Economic conditions in Hong Kong are sensitive to global economic conditions. Any economic downturn, changes in policies, currency and interest rate fluctuations, capital controls or capital restrictions, labor laws, changes in environmental protection laws and regulations, duties and taxation and limitations on imports and exports in these countries may materially and adversely affect our business, financial condition, results of operations and prospects.
Risks Related to Our Class A Ordinary Shares
The market price of our Class A Ordinary Shares may be volatile or may decline regardless of our operating performance, and could result in significant losses and you may not be able to resell your shares at or above the price at which you purchased them.
The market price of our Class A Ordinary Shares may fluctuate significantly in response to numerous factors, many of which are beyond our control, including:
| ● | actual or anticipated fluctuations in our revenue and other operating results; |
| ● | the financial projections we may provide to the public, any changes in these projections or our failure to meet these projections; |
| ● | actions of securities analysts who initiate or maintain coverage of us, changes in financial estimates by any securities analysts who follow our Company, or our failure to meet these estimates or the expectations of investors; |
| ● | announcements by us or our competitors of significant products or features, technical innovations, acquisitions, strategic partnerships, joint ventures, or capital commitments; |
| ● | price and volume fluctuations in the overall stock market, including as a result of trends in the economy as a whole; |
| ● | lawsuits threatened or filed against us; and |
| ● | other events or factors, including those resulting from war or incidents of terrorism, or responses to these events. |
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In addition, the trading price of our Class A Ordinary Shares is likely to be volatile and could fluctuate widely due to factors beyond our control. This may happen because of broad market and industry factors, akin to the performance and fluctuation of the market prices of other companies with business operations located mainly in HK or the PRC that have listed their securities in the United States. A number of Chinese companies have listed or are in the process of listing their securities on U.S. stock markets. The securities of some of these companies have experienced significant volatility, including price declines in connection with their initial public offerings. The trading performances of the securities of these Chinese companies after their offerings may affect the general perception and attitude of investors toward Chinese companies listed in the United States. Consequently, these factors may impact the trading performance of our shares, notwithstanding our actual operating performance.
In addition to market and industry factors, the price and trading volume for our Class A Ordinary Shares may be highly volatile for factors specific to our own operations, including the following:
| ● | variations in our revenues, earnings and cash flow; |
| ● | changes in financial estimates by securities analysts; |
| ● | additions or departures of key personnel; |
| ● | release of lock-up or other transfer restrictions on our outstanding equity securities or sales of additional equity securities; and |
| ● | potential litigation or regulatory investigations. |
Any of these factors may result in large and sudden changes in the volume and price at which our Class A Ordinary Shares will trade.
In the past, shareholders of public companies have often brought securities class action suits against companies following periods of instability in the market price of their securities. If we were involved in a class action suit, it could divert a significant amount of our management’s attention and other resources from our business and operations and require us to incur significant expenses to defend the suit, which could harm our results of operations. Any such class action suit, whether or not successful, could harm our reputation and restrict our ability to raise capital in the future. In addition, if a claim is successfully made against us, we may be required to pay significant damages, which could have a material adverse effect on our financial condition and results of operations.
The dual-class structure of our Class A Ordinary Shares may adversely affect the trading market for our Class A Ordinary Shares.
Certain shareholder advisory firms have announced changes to their eligibility criteria for inclusion of Class A Ordinary Shares of public companies on certain indices, including the S&P 500, that would exclude companies with multiple classes of shares and companies whose public shareholders hold no more than 5% of the total voting power from being added to such indices. In addition, several shareholder advisory firms have announced their opposition to the use of multiple class structures. As a result, the dual-class structure of our Company may prevent the inclusion of our Class A Ordinary Shares in such indices and may cause shareholder advisory firms to publish negative commentary about our corporate governance practices or otherwise seek to cause us to change our capital structure. Any such exclusion from stock indices could result in a less active trading market for our Class A Ordinary Shares. Any actions or publications by shareholder advisory firms critical of our corporate governance practices or capital structure could also adversely affect the value of our Class A Ordinary Shares.
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We may not maintain the listing of our Class A Ordinary Shares on the Nasdaq, which could limit investors’ ability to make transactions in our Class A Ordinary Shares and subject us to additional trading restrictions.
We cannot assure you that our Class A Ordinary Shares will continue to be listed on the Nasdaq in the future. If the Nasdaq delists our Class A Ordinary Shares and we are unable to list our Class A Ordinary Shares on another national securities exchange, we will endeavor to have our Class A Ordinary Shares quoted on an over-the-counter market in the United States. If this were to occur, we could face significant material adverse consequences, including:
| ● | a limited availability of market quotations for our Class A Ordinary Shares; |
| ● | reduced liquidity for our Class A Ordinary Shares; |
| ● | a determination that our Class A Ordinary Shares are a “penny stock,” which would require brokers trading in our shares to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our Class A Ordinary Shares; |
| ● | a limited amount of news and analyst coverage; and |
| ● | a decreased ability to issue additional securities or obtain additional financing in the future. |
As long as our Class A Ordinary Shares are listed on the Nasdaq, U.S. federal law prevents or preempts states from regulating their sale of those listed Class A Ordinary Shares. However, the law does permit states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale of those listed Class A Ordinary Shares. Further, if our Class A Ordinary Shares are no longer listed on the Nasdaq, we would be subject to regulations in each state in which we offer our Class A Ordinary Shares.
Future issuances or sales, or the perception of such issuances or sales, of our Class A Ordinary Shares, including pursuant to resale arrangements, could materially and adversely affect the market price of our Class A Ordinary Shares and our ability to raise capital.
We may, from time to time, issue additional equity or equity-linked securities, or our existing shareholders, including certain significant shareholders, may sell substantial amounts of our Class A Ordinary Shares in the public market, including pursuant to resale registration statements or other available exemptions. Any such issuances or sales, or the perception that they may occur, could increase the supply of our Class A Ordinary Shares in the market and adversely affect the prevailing market price of our Class A Ordinary Shares. In addition, shares held by certain existing shareholders may be eligible for resale in the public market, subject to applicable securities law restrictions, contractual lock-up arrangements or registration rights. The availability of a significant number of Class A Ordinary Shares for resale, including pursuant to any resale prospectus, could create an overhang in the market and may adversely affect the market price of our Class A Ordinary Shares and investor confidence.
Moreover, certain of our existing shareholders may have acquired their securities at prices below the market price of our Class A Ordinary Shares and may therefore be more likely to sell their shares at or below the prevailing market price. As a result, sales by such shareholders could have a disproportionate impact on the market price of our Class A Ordinary Shares. We may also seek to raise additional capital through future equity or equity-linked offerings. Market conditions or other factors may require us to offer such securities on terms that are less favorable than those in prior offerings, which could result in dilution to existing shareholders and place downward pressure on the market price of our Class A Ordinary Shares. We cannot predict the timing or amount of any such future issuances or sales.
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Short selling may drive down the market price of our Class A Ordinary Shares.
Short selling is the practice of selling shares that the seller does not own but rather has borrowed from a third party with the intention of buying identical shares back at a later date to return to the lender. The short seller hopes to profit from a decline in the value of the shares between the sale of the borrowed shares and the purchase of the replacement shares, as the short seller expects to pay less in that purchase than it received in the sale. Since it is in the short seller’s interest for the price of the shares to decline, many short sellers publish, or arrange for the publication of, negative opinions and allegations regarding the relevant issuer and its business prospects in order to create negative market momentum and generate profits for themselves after selling the shares short. These negative opinions have, in the past, led to selling of shares in the market. If we were to become the subject of any unfavorable publicity, 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 negative opinions of short sellers, 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. If we become the subject of any unfavorable allegations, whether such allegations are proven to be true or untrue, we will have to expend significant resources to investigate such allegations and/or defend our Company. This situation will be costly and time-consuming and distract our management from developing our growth. If such allegations are not proven to be groundless, we and our business operations will be severely affected, and you could sustain a significant decline in the value of our Class A Ordinary Shares.
Because we may not expect to pay dividends in the foreseeable future, you may have to rely on price appreciation of our Class A Ordinary Shares for a return on your investment.
We currently intend to retain all of our available funds and any future earnings to fund the development and growth of our business. As a result, we may not expect to pay any cash dividends in the foreseeable future. Therefore, you should not rely on an investment in our Class A Ordinary Shares as a source for any future dividend income. Our board of directors has complete discretion as to whether to distribute dividends, subject to certain requirements of Cayman Islands law. Even if our board of directors decides to declare and pay dividends, the timing, amount and form of future dividends, if any, will depend, among other things, on our future results of operations and cash flow, our capital requirements and surplus, the amount of distributions, if any, received by us from our subsidiaries, our financial condition, regulatory restrictions and other factors deemed relevant by our board of directors. Accordingly, the return on your investment in our securities will likely depend entirely upon any future price appreciation of our Class A Ordinary Shares. There is no guarantee that our Class A Ordinary Shares will appreciate in value or even maintain the price at which you purchased our Class A Ordinary Shares. You may not realize a return on your investment in our Class A Ordinary Shares and you may even lose your entire investment.
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U.S. holders of the Company’s shares may suffer adverse tax consequences if we are characterized as a passive foreign investment company.
The rules governing “passive foreign investment companies” (“PFICs”) can have adverse effects on U.S. Holders for U.S. federal income tax purposes. Generally, if, for any taxable year, at least 75% of our gross income is passive income, or at least 50% of the value of our assets (generally, using a quarterly average) is attributable to assets that produce passive income or are held for the production of passive income (including cash, dividends, interest, rents, royalties (other than rents or royalties derived from the active conduct of a trade or business) and gains from the disposition of passive assets), we would be characterized as a PFIC for U.S. federal income tax purposes. The determination of whether we are a PFIC, which must be made annually after the close of each taxable year, depends on the particular facts and circumstances and may also be affected by the application of the PFIC rules, which are subject to differing interpretations. Our status as a PFIC will depend on the composition of our income and the composition and value of our assets (including goodwill and other intangible assets), which will be affected by how, and how quickly, we spend any cash that is raised in this offering or in any other subsequent financing transaction.
It is possible that, in future taxable years, more than 50% of our assets may be assets which produce passive income. We will make this determination following the end of any particular tax year. We treat our affiliated entities as being owned by us for United States federal income tax purposes, not only because we exercise effective control over the operation of such entities but also because we are entitled to substantially all of their economic benefits, and, as a result, we combine their operating results in our consolidated financial statements. For purposes of the PFIC analysis, in general, a non-U.S. corporation is deemed to own its pro rata share of the gross income and assets of any entity in which it is considered to own at least 25% of the equity by value.
If we are a PFIC, a U.S. Holder would be subject to adverse U.S. federal income tax consequences, such as ineligibility for certain preferred tax rates on capital gains or on actual or deemed dividends, interest charges on certain taxes treated as deferred, and additional reporting requirements under U.S. federal income tax laws and regulations. A U.S. Holder may in certain circumstances mitigate adverse tax consequences of the PFIC rules by filing an election to treat the PFIC as a qualified electing fund, or QEF, or, if shares of the PFIC are “marketable stock,” which such term includes the Class A Ordinary Shares, for purposes of the PFIC rules, by making a mark-to-market election with respect to the shares of the PFIC. U.S. Holders should be aware that, for each tax year, if any, that we are a PFIC, we can provide no assurances that we will satisfy the record keeping requirements of a PFIC, or that we will make available to U.S. Holders the information such U.S. Holders require to make a QEF election with respect to us, and as a result, a QEF election may not be available to U.S. Holders. You should consult your own tax advisors regarding the potential consequences to you if we were or were to become a PFIC, including the availability, and advisability, of, and procedure for making, QEF elections and mark-to-market elections.
Our major Shareholder has substantial influence over the Company, and her interests may not be aligned with the interests of our other shareholders.
As of the date of this Annual Report, Ms. Seto, our chief executive officer and director, beneficially owns an aggregate of 1,069,890 Class A Ordinary Shares, representing approximately 31.42% of our issued and outstanding Class A Ordinary Shares. In addition, Ms. Seto holds 80,000 Class B Ordinary Shares, each of which entitles her to twelve (12) votes on any matter on which shareholders are entitled to vote and is convertible into one Class A Ordinary Share at any time. As of the date of this Annual Report, Ms. Seto holds approximately 46.50% of the aggregate voting power of our issued and outstanding shares.
As a result of her share ownership, the enhanced voting rights attached to the Class B Ordinary Shares, and her positions as our chief executive officer and director, Ms. Seto may be able to exercise substantial influence over matters requiring shareholder approval, including the election of directors, mergers, consolidations, changes of control and other significant corporate transactions. Ms. Seto may also be able to prevent, delay or influence a change of control or other transaction that other shareholders may consider favorable.
The interests of Ms. Seto may differ from, or conflict with, the interests of our other shareholders. This concentration of voting power may limit the ability of our other shareholders to influence corporate matters and may have the effect of delaying, preventing or deterring a change of control or other transaction that may otherwise benefit our shareholders. In addition, potential conflicts of interest may arise between Ms. Seto’s roles as our chief executive officer, director and major shareholder. The concentration of ownership and voting power may adversely affect the market price of our Class A Ordinary Shares.
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Because we are a foreign private issuer and are exempt from certain Nasdaq corporate governance standards applicable to U.S. issuers, you will have less protection than you would have if we were a domestic issuer.
As a foreign private issuer, we may rely on home country practice in lieu of certain Nasdaq corporate governance requirements. Nasdaq Listing Rules require listed companies to have, among other things, a majority of their board members be independent. However, we may not be required to, and may not, comply with that requirement, or may do so only if we elect to comply within one year of listing. The corporate governance practice in our home country does not require a majority of our board to consist of independent directors. Thus, although directors must act in the best interests of the Company, it is possible that fewer board members will be exercising independent judgment and the level of board oversight of management may decrease as a result. In addition, Nasdaq Listing Rules generally require a compensation committee and a nominating/corporate governance committee composed entirely of independent directors, and may require shareholder approval for certain equity compensation plans and material revisions to those plans, as well as certain issuances of Class A Ordinary Shares. We are not subject to all of these requirements as a foreign private issuer, and we may elect to follow home country practice in lieu of certain of these Nasdaq corporate governance standards, which may afford less protection to investors. As a result, our shareholders may not have the same protections afforded to shareholders of U.S. domestic issuers.
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 the Nasdaq corporate governance listing standards. These practices may afford less protection to shareholders than they would enjoy if we complied fully with the Nasdaq corporate governance listing standards.
As a foreign private issuer whose Ordinary Shares are listed on the Nasdaq Capital Market, we rely on a provision in the Nasdaq corporate governance listing standards that allows us to follow Cayman Islands law with regard to certain aspects of corporate governance. This allows us to follow certain corporate governance practices that differ in significant respects from the corporate governance requirements applicable to U.S. companies listed on the Nasdaq.
For example, we are exempt from Nasdaq regulations that require a listed U.S. company to:
| ● | have a majority of the board of directors consist of independent directors; | |
| ● | require non-management directors to meet on a regular basis without management present; | |
| ● | have an independent compensation committee; | |
| ● | have an independent nominating committee; and | |
| ● | seek shareholder approval for the implementation of certain equity compensation plans and dilutive issuances of Class A Ordinary Shares, such as transactions, other than a public offering, involving the sale of 20% or more of our Class A Ordinary Shares for less than the greater of book or market value of the shares. |
As a foreign private issuer, we are permitted to follow home country practice in lieu of the above requirements. Our audit committee is required to comply with the provisions of Rule 10A-3 of the Exchange Act, which is applicable to U.S. companies listed on the Nasdaq. Therefore, we have a fully independent audit committee, in accordance with Rule 10A-3 of the Exchange Act. However, because we are a foreign private issuer, our audit committee is not subject to additional Nasdaq corporate governance requirements applicable to listed U.S. companies, including the requirements to have a minimum of three members and to affirmatively determine that all members are “independent,” using more stringent criteria than those applicable to us as a foreign private issuer.
Further, because we are 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:
| ● | the rules under the Exchange Act requiring the filing of quarterly reports on Form 10-Q or current reports on Form 8-K with the SEC; | |
| ● | the sections of the Exchange Act regulating the solicitation of proxies, consents, or authorizations in respect of a security registered under the Exchange Act; | |
| ● | the sections of the Exchange Act requiring insiders to file public reports of their share ownership and trading activities and liability for insiders who profit from trades made in a short period of time; and | |
| ● | the selective disclosure rules by issuers of material non-public 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 financial results on a semi-annual basis through press releases distributed pursuant to the rules and regulations of Nasdaq. 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 will be 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 if you were investing in a U.S. domestic issuer
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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.
We are an exempted company incorporated under the laws of the Cayman Islands with limited liability. Our corporate affairs are governed by the memorandum and articles of association of our Company, the Companies Act and the common law of the Cayman Islands. The rights of shareholders to take action against our directors and us, 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 English common law, decisions of which are generally 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 are not as clearly established as they would be under statutes or judicial precedent in some jurisdictions of the United States. In particular, the Cayman Islands has a different body of securities laws than the United States, which provides significantly less protection to investors. In addition, shareholders of Cayman Islands companies may not have standing to initiate a shareholder derivative action in a federal court of the United States. There is no statutory recognition in the Cayman Islands of judgments obtained in the United States, although the courts of the Cayman Islands will, in certain circumstances, recognize and enforce a non-penal judgment of a foreign court of competent jurisdiction without retrial on the merits.
Shareholders of Cayman Islands exempted companies like us have no general rights under Cayman Islands law to inspect corporate records (other than the Memorandum of Association and Articles of Association, the register of mortgages and charges, and the special resolutions passed by shareholders) or to obtain copies of lists of shareholders of these companies. Our directors are not required under our Memorandum of Association and Articles of Association to make our corporate records available for inspection by 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.
Certain corporate governance practices in the Cayman Islands, which is our home country, differ significantly from requirements for companies incorporated in other jurisdictions, such as the U.S. Currently, we plan to rely on home country practice with respect to any corporate governance matter. Accordingly, our shareholders may be afforded less protection than they otherwise would under rules and regulations applicable to U.S. domestic issuers.
As a result of all of the above, shareholders may have more difficulty in protecting their interests in the face of actions taken by our management, members of the board of directors or Controlling Shareholder than they would as public shareholders of a company incorporated in the United States.
Because we are a Cayman Islands company and all of our business is conducted in Hong Kong, you may be unable to bring an action against us or our officers or directors or to enforce any judgment you may obtain.
Although we are a Cayman Islands exempted company, we conduct all of our operations in Hong Kong and the majority of our assets are located in Hong Kong and therefore outside of the United States. In addition, the majority of our current directors and officers are nationals and residents of countries other than the United States. Substantially all of the assets of these persons are located outside the United States. As a result, it may be difficult for our shareholders to effect service on these persons or bring an action against us or these individuals in the Cayman Islands or in Hong Kong in the event that they believe that their rights have been infringed under the securities laws of the United States or otherwise. Even if shareholders are successful in bringing an action of this kind, the laws of the Cayman Islands and Hong Kong may render them unable to enforce a judgment against our assets or the assets of our directors and officers. There is no statutory recognition in the Cayman Islands of judgments obtained in the United States or Hong Kong, although the courts of the Cayman Islands will in certain circumstances recognize and enforce a non-penal judgment of a foreign court of competent jurisdiction without retrial on the merits. For more information regarding the relevant laws of the Cayman Islands, see “Enforceability of Civil Liabilities.” As a result of the foregoing, our shareholders may have more difficulties in protecting their interests through actions against us or our officers, directors or major shareholders than shareholders of a corporation incorporated in a jurisdiction in the United States would.
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We are an “emerging growth company,” and we cannot be certain if the reduced reporting requirements applicable to emerging growth companies will make our Class A Ordinary Shares less attractive to investors.
We are an “emerging growth company,” as defined in the JOBS Act, and we may take advantage of certain exemptions from various requirements applicable to other public companies that are not emerging growth companies including, most significantly, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act for so long as we are an emerging growth company. As a result, if we elect not to comply with such auditor attestation requirements, our investors may not have access to certain information they may deem important.
The JOBS Act also provides that an emerging growth company does not need to comply with any new or revised financial accounting standards until such date that a private company is otherwise required to comply with such new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the extended transition period, although we have adopted certain new and revised accounting standards based on transition guidance permitted under such standards. As a result of this election, our future financial statements may not be comparable to other public companies that comply with the public company effective dates for these new or revised accounting standards.
We are a foreign private issuer within the meaning of the rules under the Exchange Act, and as such we are exempt from certain provisions applicable to United States domestic public companies.
We are a foreign private issuer and, as a result, we are not subject to the same requirements as U.S. domestic issuers. Under the Exchange Act, we will be subject to reporting obligations that, to some extent, are more lenient and less frequent than those of U.S. domestic reporting companies. For example, 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:
| ● | the rules under the Exchange Act requiring the filing of quarterly reports on Form 10-Q or current reports on Form 8-K with the SEC; |
| ● | the sections of the Exchange Act regulating the solicitation of proxies, consents, or authorizations in respect of a security registered under the Exchange Act; |
| ● | the sections of the Exchange Act requiring insiders to file public reports of their share ownership and trading activities and liability for insiders who profit from trades made in a short period of time; and |
| ● | the selective disclosure rules by issuers of material non-public information under Regulation FD. |
However, we will still be subject to the anti-fraud and anti-manipulation rules of the SEC, such as Rule 10b-5 under the Exchange Act. Since many of the disclosure obligations imposed on us as a foreign private issuer differ from those imposed on U.S. domestic reporting companies, you should not expect to receive the same information about us and at the same time as the information provided by U.S. domestic reporting companies. Moreover, we will be 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 financial results on a semi-annual basis through press releases distributed pursuant to the rules and regulations of the Nasdaq. 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 will be 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 if you were investing in a U.S. domestic issuer.
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We may lose our foreign private issuer status in the future, which could result in significant additional costs and expenses.
As discussed above, 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. The determination of foreign private issuer status is made annually on the last business day of an issuer’s most recently completed second fiscal quarter. In the future, we would lose our foreign private issuer status if (1) more than 50% of our outstanding voting securities are owned by U.S. residents, and (2) a majority of our directors or executive officers are U.S. citizens or residents, or we fail to meet additional requirements necessary to avoid loss of foreign private issuer status. If we were to lose our foreign private issuer status, we would be required to file with the SEC periodic reports and registration statements on U.S. domestic issuer forms, which are more detailed and extensive than the forms available to a foreign private issuer. We also would be required to comply with U.S. federal proxy requirements, and our officers, directors and principal shareholders would become subject to the short-swing profit disclosure and recovery provisions of Section 16 of the Exchange Act. In addition, we would lose our ability to rely upon exemptions from certain corporate governance requirements under the listing rules of the Nasdaq. As a U.S. listed public company that is not a foreign private issuer, we would incur significant additional legal, accounting and other expenses that we do not incur as a foreign private issuer.
We will incur significantly increased costs and devote substantial amount of our management’s time as a result of becoming a public company and the eventual listing of our Class A Ordinary Shares on the Nasdaq.
As a public company, we will be subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, or the Exchange Act, the Sarbanes-Oxley Act, the Dodd-Frank Act, the listing requirements of the securities exchange on which we list, and other applicable securities rules and regulations. Despite recent reforms made possible by the JOBS Act, we will incur additional legal, accounting and other expenses as a public reporting company that we did not incur as a private company, particularly after we cease to qualify as an emerging growth company. For example, we will be required to comply with the additional requirements of the rules and regulations of the SEC and the Nasdaq rules, including applicable corporate governance practices. We expect that compliance with these requirements will increase our legal and financial compliance costs and will make some activities more time-consuming and costly. In addition, we expect that our management and other personnel will need to divert attention from operational and other business matters to devote substantial time to these public company requirements. We cannot predict or estimate the number of additional costs we may incur as a result.
In addition, changing laws, regulations and standards relating to corporate governance and public disclosure create uncertainty for public companies, increasing legal and financial compliance costs and make some activities more time-consuming. These laws, regulations and standards are subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as new guidelines are provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. We intend to invest resources to comply with evolving laws, regulations and standards, and this investment may result in increased general and administrative expenses and a diversion of management’s time and attention from revenue-generating activities to compliance activities. If our efforts to comply with new laws, regulations and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to their application and practice, regulatory authorities may also initiate legal proceedings against us, and our business may be adversely affected.
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Future financing may cause a dilution in your shareholding or place restrictions on our operations.
We may need to raise additional funds immediately or in the future to finance further expansion of our capacity and business relating to our existing operations, acquisitions or strategic partnerships. If additional funds are raised through the issuance of new equity or equity-linked securities of the Company other than on a pro rata basis to existing shareholder, the percentage ownership of such shareholders in the Company may be reduced, and such new securities may confer rights and privileges that take priority over those conferred by the shares. Alternatively, if we meet such funding requirements by way of additional debt financing, we may have restrictions placed on us through such debt financing arrangements which may:
| ● | further limit our ability to pay dividends or require us to seek consents for the payment of dividends; |
| ● | increase our vulnerability to general adverse economic and industry conditions; |
| ● | require us to dedicate a substantial portion of our cash flows from operations to service our debt, thereby reducing the availability of our cash flow to fund capital expenditure, working capital requirements and other general corporate needs; and |
| ● | limit our flexibility in planning for, or reacting to, changes in our business and our industry. |
Our compensation of directors and executive officers may not be publicly available.
Under Cayman Islands law, the Company is not required to disclose compensation paid to our senior management on an individual basis and the Company has not otherwise publicly disclosed this information elsewhere. The executive officers of the Company receive fixed and variable compensation. They also receive benefits in line with market practice. The fixed component of their compensation is set on market terms and adjusted annually. The variable component consists of cash bonuses and awards of shares (or the cash equivalent). Cash bonuses are paid to executive officers based on previously agreed targets for the business. Shares (or the cash equivalent) may be awarded under the 2025 Equity Incentive Plan (as defined below).
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 our Board or major shareholders than they would as public shareholders of a company incorporated in the United States.
ITEM 4. INFORMATION ON THE COMPANY
CORPORATE HISTORY AND STRUCTURE
The Company was incorporated in the Cayman Islands on July 5, 2024 under the Companies Act as an exempted company with limited liability. On incorporation, our authorized share capital was US$100,000 divided into 1,000,000,000 shares, par value of US$0.0001 each. As of March 31, 2026, our authorized share capital was US$100,000 divided into 10,000,000,000 shares with a par value of US$0.00001 each comprising (i) 9,500,000,000 Class A Ordinary Shares with a par value of US$0.00001 each, and (ii) 500,000,000 Class B Ordinary Shares with a par value of US$0.00001 each. On April 20, 2026, the Company effected a 1-for-5 reverse stock split, adjusting the issued and outstanding share capital to 7,400,000 ordinary shares (comprising 7,200,000 Class A Ordinary Shares and 200,000 Class B Ordinary Shares, with a par value of US$0.00005 each). On June 15, 2026, the Company effected a 1-for-25 reverse stock split. Following this adjustment, the issued and outstanding share capital was approximately 1,509,557 ordinary shares (comprising approximately 1,501,557 Class A Ordinary Shares and 8,000 Class B Ordinary Shares, with a par value of US$0.00125 each).
Corporate Structure
Our Company was incorporated in the Cayman Islands on July 5, 2024 under the Companies Act as an exempted company with limited liability. On incorporation, our authorized share capital was US$100,000 divided into 1,000,000,000 Class A Ordinary Shares, par value of US$0.0001 each. Immediately following incorporation, our share capital was held 100% by Ms. Seto as to one Share.
On August 19, 2024, Ms. Seto and Kilo Wonders Group Limited, or Kilo Wonders, (being Ms. Yip Ka Ki Cherry, or Ms. Yip’s wholly-owned company) subscribed for 19,059 and 940 Class A Ordinary Shares for cash at par respectively.
On August 19, 2024, Ms. Seto, Kilo Wonders and Yield Rights Group Limited, or Yield Rights, subscribed for 4,500,939, 234,059 and 245,000 Class A Ordinary Shares for cash at par. Ms. Seto and Ms. Yip are existing shareholders of Trendic.
On August 20, 2024, Fuji Holdings, a company wholly-owned by Mr. Chang Kin Man, an independent third party, and Prime Crest Holdings Limited, or Prime Crest, acquired 225,000 and 245,000 Class A Ordinary Shares from Ms. Seto, representing 4.50% and 4.90% of the entire issued share capital of our Company for US$250,000 and US$270,000 respectively, and on August 20, 2024, Allied Target Limited acquired from Ms. Seto 230,000 Class A Ordinary Shares, representing 4.60% of the entire issued share capital of our Company for US$255,000.
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On March 6, 2025, one Class A Ordinary Share was allotted and issued to each of Ms. Seto and Kilo Wonders (Ms. Yip’s nominee) credited as fully paid in consideration for their transferring their entire equity interest in Trendic to our Group. Historically, our Group comprised only Trendic.
On March 31, 2025 for purposes of recapitalization in anticipation of the initial public offering, the Company’s shareholders passed resolutions to (i) sub-divide each of the issued and unissued shares in its share capital of par value of US$0.0001 each into 10 shares of par value of US$0.00001 each, (ii) to re-classify and re-designate its authorized share capital into 10,000,000,000 shares with a par value of US$0.00001 each comprising (a) 9,500,000,000 Class A Ordinary Shares with a par value of US$0.00001 each and (b) 500,000,000 Class B Ordinary Shares with a par value of US$0.00001 each and (iii) to adopt an amended and restated memorandum of association and articles of association reflecting such amended share capital and containing the rights, preferences and privileges attached to each class of shares. Concurrently, Ms. Seto, Prime Crest, Fuji Holdings, Kilo Wonders, Yield Rights and Allied Target surrendered 16,303,760, 1,045,660, 960,300, 1,002,980, 1,045,660 and 981,640 Class A Ordinary Shares to the Company, respectively.
On March 31, 2025 the Company allotted and issued 1,000,000 Class B Ordinary Shares to Ms. Seto for cash at par.
On December 3, 2025, the Company entered into an Equity Purchase Agreement with Hudson Global Ventures, LLC, providing the Company the right to sell up to US$18,000,000 of Class A Ordinary Shares at its discretion over 24 months. As consideration, the Company issued 736,018 Commitment Shares to the Investor.
On April 20, 2026, the Company effected a 1-for-5 reverse stock split, adjusting the issued and outstanding share capital to 7,400,000 ordinary shares (comprising 7,200,000 Class A Ordinary Shares and 200,000 Class B Ordinary Shares, with a par value of US$0.00005 each).
On April 21, 2026, the Company received binding commitments from a group of accredited investors for the subscription of an aggregate of 3,400,000 Class A Ordinary Shares (post-split) and 17,000,000 Common Warrants (post-split). All such warrants have been exercised, resulting in additional proceeds to the Company of US$850,000. The total funds received from these investors are US$3,400,000.
On June 15, 2026, the Company effected a 1-for-25 reverse stock split. Following this adjustment, the issued and outstanding share capital was approximately 1,509,557 ordinary shares (comprising approximately 1,501,557 Class A Ordinary Shares and 8,000 Class B Ordinary Shares, with a par value of US$0.00125 each).
On June 22, 2026, the Company entered into a securities purchase agreement with Imperial Vision Fund SPC Series 1SP, issuing 320,000 Class A Ordinary Shares at a purchase price of US$3.75 per Class A Ordinary Share, for aggregate gross proceeds of US$1,200,000. This was conducted as an offshore offering in reliance on Regulation S.
On June 25, 2026, the Company entered into a securities purchase agreement with Golden Crown Consulting Limited, issuing 380,000 Class A Ordinary Shares at a purchase price of US$3.75 per Class A Ordinary Share, for aggregate gross proceeds of US$1,425,000. This was an offshore offering conducted in reliance on Regulation S.
On July 7, 2026, the Company entered into a securities purchase agreement with its Chief Executive Officer, Ms. Seto Wai Yue, issuing an aggregate of 580,000 Class A Ordinary Shares and 72,000 Class B Ordinary Shares at an aggregate price of approximately US$2,445,000.
On August 6, 2026, Ms. Seto entered into a Sale and Purchase Agreement to purchase 320,000 Class A Ordinary Shares at a purchase price of US$3.75 per share for an aggregate purchase price of US$1,200,000 from Imperial Vision Fund SPC Series 1 SP. As of the date of this Annual Report, Ms. Seto beneficially owns an aggregate of 1,149,890 ordinary shares, consisting of 1,069,890 Class A Ordinary Shares and 80,000 Class B Ordinary Shares, representing approximately 32.99% of the Company’s 3,485,583 total outstanding ordinary shares.
Organization Chart
The following diagram illustrates our corporate structure as of the date of this Annual Report. Unless otherwise stated, all percentages reflect the voting interest held by each of our shareholders. Each holder of Class A Ordinary Shares is entitled to one vote per Class A Ordinary Share and each holder of Class B Ordinary Shares is entitled to twelve (12) votes per one Class B Ordinary Share.
| * | Represents voting interest. |
Other than Ms. Seto, none of the other shareholders have held any position, office or other material relationship with the Company or any of its predecessors or affiliates within the past three years.
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Entity
A description of our principal operating subsidiary is set out below.
Trendic International Limited
Our HK operating company, Trendic, was incorporated in Hong Kong as a private company limited by shares on April 11, 2016. Following an internal Group reorganization on March 6, 2025, Trendic became our indirect wholly-owned subsidiary. Since its incorporation, Trendic has been carrying on the business of an event management service provider specializing in assisting event organizers in organizing, planning, promoting and managing themed tour walk-through experience events for IP owners of characters in well publicized animated cartoons and/or live action theatrical motion pictures.
BUSINESS OVERVIEW
Overview
We are an event management service provider based in Hong Kong with nearly ten years of experience in managing the entire or part of the event lifecycle for our customers. Events encompass a range of public and private events, from trade shows, conferences, concerts, exhibitions, charity galas, brand promotion events to internal corporate events. For enterprises, events offer a highly effective way to maximize their engagement with customers, helping enterprises to generate and qualify leads, deepen relationships with customers and build brand loyalty and advocacy, such as promotion of a brand by satisfied customers through customers sharing positive experiences on social media, providing referrals to friends and family, or simply telling others about the brand.
We are an event planner specializing in organizing, planning, promoting and managing themed touring walk-through experience events, or experience events, for intellectual property owners, or IP owners, of characters in well-publicized animated cartoons and/or live action theatrical motion pictures, each a licensed character. This type of experience events typically involve an intellectual property license, or IP license, from the IP owner to an event organizer, giving the event organizer the right to develop, organize, plan, promote and manage experience events relating to the licensed character and other licensed properties, including the name of the licensed character, title of the animated cartoon/live action theatrical motion picture, costumes, environmental settings, plot elements and artwork together as the licensed property in approved venues in a specified number of territories. During the experience event, event attendees may separately purchase, in designated area(s) at the approved venue, (i) various interactive activities and/or entertainment, including hands-on active-play/participation and/or media-based activities, such as green-screen photo/video capturing activities where guests are offered the opportunity to have their photo and/or video taken using green-screen capture technology, or the interactive opportunities; (ii) custom-made merchandise featuring the licensed property that are commissioned specially for the experience event, or the custom-made merchandise, as well as other licensed merchandise featuring the licensed property that are supplied by the IP owners and/or its licensee(s); and (iii) food and beverage products.
Apart from organizing, planning, promoting and managing experience events, we also engage in the design and/or sale of merchandise, such as merchandise sold in concert venues and merchandise used as gift with purchase by our customers, as well as event management for brands, such as setting-up and running of pop-up stores and organizing store opening/product launch press events for labels.
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The global events industry experienced significant disruption due to the COVID-19 pandemic and associated regulatory restrictions from 2019 through early 2023. During this period, our business adapted by diversifying into merchandise design and sales. Following the normalization of the industry and the lifting of social distancing measures, we successfully resumed our core event management operations, capturing pent-up demand for experience events and signing management deals in Malaysia in August 2023 and January 2024.
Following the COVID-19 pandemic, there has been a growing trend for event organizers to invite event planners to invest in experience events through profit-sharing deals or direct investment deals. We also stated pure investments for events which we did not involve into event management. For details, see “—Our Business Model” below in this section. During the year ended March 31, 2026, we had organized or co-organized eight experience events. The other six experience events were direct investment deals which we did not involve into event operations. As at the date of this Annual Report, we had six direct investment deals for experience events in Hong Kong, Taiwan or Thailand. In the long run, we plan to leverage our industry experience and our connections with IP owners built up over the years to start obtaining IP licenses from IP owners directly which will move us up the value chain to become an event organizer and can help us eliminate the mark-ups by the event organizers in the direct investment deals which we were engaging at the date of this Annual Report.
We believe this strategy will position us to expand our market share in the events industry in Hong Kong, especially in view of the Hong Kong government’s policy to boost a mega events economy in Hong Kong. For the years ended March 31, 2025 and 2026, our net revenue amounted to approximately HK45.8 million and approximately HK$50.7 million, respectively, with an increase of approximately 10.7%. For the years ended March 31, 2025 and 2026, our net profit has decreased from approximately HK$ 6.4 million to net loss of approximately HK$74.1 million.
Our Competitive Strengths
We believe the following competitive strengths have contributed to our success to date and will continue to distinguish us from our competitors:
We have an established reputation and proven track record in the events industry
We have over nine years of experience in providing event management, design and merchandising services in Hong Kong. We have organized and managed numerous events ranging from theme exhibitions, pop-up stores, store opening/product launch press events for labels, festive theme displays and experience events, most of which involved IP licenses and sales of merchandise, food and beverage. In our over nine years of operation, we have completed more than 30 large-scale projects which can accommodate over 3,500 attendees at the same time and 60 small to medium-sized projects which can accommodate between 1,000 to 3,500 attendees in Hong Kong, Macau, Taiwan, the PRC and other Southeast Asian countries, including Malaysia and Thailand; and worked with, whether directly or indirectly, more than 15 IP owners, 15 event organizers and 30 brand owners/franchisees/distributors based in Hong Kong, Taiwan, Japan and the United States. Through this journey, we have built up deep domain expertise on how to maximize event success and we have also established a good rapport with a number of IP owners, event organizers and brand owners, franchisees, distributors and some of them have become our recurring customers. We believe this proven track record is testimony to our ability to consistently meet customers’ expectations and requirements, as well as our strength in providing customized, value-added, quality and efficient event management, design and merchandising services to our customers. We also believe that we can capitalize on our industry reputation and good relationship with IP owners, event organizers and brand owners/franchisees/distributors to procure new engagements and capture emerging market opportunities.
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We have the ability to manage the entire event lifecycle
As an experienced event management service provider, we can manage the entire event lifecycle for different types of events, from event inception (such as researching on and conceptualizing an event’s theme and selecting venue and other service providers like public relationship, or PR, firm and contractor), managing budgets, preparing all relevant event plans and proposals for IP owner’s approval, promoting the event, orchestrating the intricate details that ensure the event runs smoothly to post-event follow-up (such as collecting monies and reporting back to our customers and collating event attendees’ feedback). Apart from these conventional event management services, we also have our own inhouse designers and merchandisers who can assist our customers in designing and commissioning the production of custom-made merchandise, as well as a project executive who can assist our customers in developing themed food and beverage menus and lining up caterers to prepare the food and beverages. The depth and breadth of our professional event management services facilitate us to provide a one-stop solution to our customers, giving them peace of mind and better control over their events.
Our management team possesses extensive events industry experience and business network
Our founder, director and chief executive officer, Ms. Seto, is an accomplished businessperson. She gained solid work experience in the apparel industry before becoming an entrepreneur. Before she established Trendic, she established and acquired local fashion labels and also acquired the distribution rights of an international fashion label in Hong Kong and Taiwan. One of these local fashion labels collaborates with many IP owners on crossover apparel and gift collections featuring licensed property and some of these crossover products have been sold in pop-up stores with food and beverage offerings. Her family is also an active concert promoter in Asia. All these business engagements and affiliations have helped Ms. Seto to build networking connections with a wide range of industry players, including IP owners, apparel and gift manufacturers, PR firms, operators of shopping malls, contractors, artiste management, media, concert and exhibition venue operators, just to name a few. Leveraging these business connections and in view of the increasing demand for theme exhibitions from the leisure and hospitality industry in Macau, Ms. Seto established Trendic in 2016 to design and produce merchandise featuring licensed property for consignment sales at these theme exhibitions in Macau and also started the provision of event management services in Hong Kong, Malaysia and Taiwan. Ms. Seto’s network connections continue to grow over our operating history which helps to smoothly operate the organization and planning of experience events for our customers and ensure that the experience events can be executed in a cost-effective and efficient manner. This in turn has helped us retain customers and attract new customers.
Ms. Seto’s extensive industry knowledge and experience as well as her vision, strategic planning and management are instrumental in steering us through the COVID-19 pandemic and our rapid recovery and growth afterwards. Ms. Seto is supported by Ms. Tse, a director and the head of the design and merchandising department, Mr. Lee Wai Kit, serving as our Chief Financial Officer, and Mr. Luk Kai Chung, the general manager, who collectively possesses expertise across event management, design, sourcing, logistics, marketing, budget control, customer service, accounting and financial management. We believe that the collective knowledge, experience and expertise of Ms. Seto, the other director and our senior management will help us develop sustainable business strategies, forecast trends in experience events and anticipate our customers’ needs in event management and merchandise, assess and manage risks as well as to capture profitable market opportunities. We believe that our management team possesses the necessary experience, qualifications, commitment and leadership skills to manage and sustain our business, which helps us to attract and retain customers and to ensure that our business continues to develop and grow in the long run, as evident by the recurring business from our customers.
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We have built a good relationship with an established network of service providers that are essential for our operations
As veterans in the events industry, our management team has established close working relationships with a wide network of service providers that are essential for our operations, including overseas event companies and local event companies that have overseas operations, apparel and gift manufacturers, PR firms, contractors, human resources companies, caterers, operators of event venues and artiste management. This enables us to target the specific needs and demands of our customers by promptly lining up appropriate third-party service providers to support us in the organization, planning, promotion and management of the events for our customers in a cost-effective, efficient and timely manner, as well as allowing us to provide a wide range of event management, design and merchandising services to our customers with minimal staff and overhead costs and a relatively simple business structure. For instance, through appointing overseas event companies to act as our local facilitators, we are able to strategically expand our market presence to overseas markets and organize and plan experience events in overseas countries without having the complexity and cost of operating our own local office and staff in such countries. By working closely with human resources companies, we are able to quickly find suitable temporary workers to support us when we are in need of a certain type of personnel at any stage of the event lifecycle. In certain cases, we are also able to obtain discounts and/or other preferential treatments from these service providers due to our good relationship with them. This helps to lower the overall costs of the events and ensure the events’ smooth operation.
Our creative offerings help to ensure the profitability of experience events
We specialize in the organization, planning, promotion and management of experience events. For a typical experience event, tickets sales only account for approximately half of the income and the other half generally comes from the sales of merchandise, food and beverage and other interactive opportunities. To maximize the income from experience events, we are capable of putting together novel marketing plans to promote ticket sales to the target audience who are generally fans of the licensed characters. For instance, we leverage our design capability to create collectible limited edition custom-made merchandise, some of which are provided free of charge to the first 100 event attendees only or only available to event attendees that purchase early bird special bundle tickets to promote ticket sales and create hype for the experience event. We also design custom-made merchandise and visually appealing food and beverage items featuring the licensed property which are only available for sale at the event venue, which helps to enhance ticket sales as well as generate ancillary income from sales of merchandise, food and beverages. All of these offerings will help to ensure the profitability of the experience events we organize, plan, promote and manage.
We have our own event venue
From our experience, it generally takes a significant amount of time and effort to identify and negotiate for a suitable event venue. It is also time-consuming and costly to build and demolish the zoning partitions and to apply for the relevant permits for each individual experience event. Moreover, short-term leases are typically more expensive than long term ones and it may also be hard for us to match the availability of event venues with the planned event dates. In an attempt to reduce the costs and increase the efficiency of the experience events that we organize, we entered into a 15-month lease in June 2024 for an event venue in Hong Kong which is located in a shopping mall with high footfall and can be accessed conveniently by public transport. Please see “—Real Property” below for details. As of the date of this Annual Report, we had organized two experience events in this event venue. We do not have a high capital commitment for this event venue as we mainly pay turnover rent. Apart from the time and cost benefits, there may also be synergistic benefits as that event venue may become an experience event hub to help us and our customers connect to our/their target audience and provide us/them with the opportunity to cross-sell our/their other events.
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Our Business Strategies
We plan to continue to expand the breadth and depth of our event management, design and merchandising services, thereby expanding our market share in the events industry in Hong Kong as well as to develop more overseas markets for our event management and merchandising businesses. To achieve these business goals, we plan to:
| ● | build on our core business as an event planner and move up the value chain from a pure service provider to also play the role of an event organizer; | |
| ● | obtaining multi-territorial IP licenses from IP owners to help us increase our market share in Hong Kong and further develop overseas markets; | |
| ● | build our own ticketing platform to facilitate direct marketing of the events we organize and the collection of full engagement data on event attendees; and | |
| ● | expand our project department and finance and administration department, set up a new sales and marketing department and an information technology department as well as to upgrade our enterprise resource planning, or ERP, system. |
Our Services
As an experienced event management, design and merchandising service provider, we can manage the entire event lifecycle and deliver engaging experiences across a wide range of events, including the following:
| ● | conducting research and feasibility studies for the event; | |
| ● | developing and planning the event, including choice of venue, concept development, layout of venue, types and pricing of tickets, choice of ticketing platforms and choice of contractors for fitting-out the event venue; | |
| ● | preparing all relevant planning proposals for the IP owner’s approval; | |
| ● | setting and managing the budget for the event; | |
| ● | advertising and promotion of the event to the target audience, such as preparation of promotional materials, putting posts in social media and setting up a website for the event; | |
| ● | preparing a detailed implementation plan for the event with timetable for execution; | |
| ● | managing and supervising the implementation of the event; | |
| ● | obtaining all required permits for the event, such as certificate of compliance from the Fire Services Department, temporary license for places of public entertainment and license for holding a food and environmental hygiene event; | |
| ● | arranging for all relevant insurance policies, such as public liability policy, contractor’s all risk insurance and transit insurance; | |
| ● | coordinating all relevant parties, such as the venue operator, contractors responsible for fitting-out the event venue, ticketing platforms, PR firms and the media; | |
| ● | coordinating all logistical elements of the event, such as layout, agenda, staff, equipment, merchandise and transportation; | |
| ● | designing the custom-made merchandise and managing the product development, sourcing, production management, quality control, logistics and sales processes for such merchandise; | |
| ● | designing the food and beverage menu and arranging for food and beverage; |
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A sample menu and a sample food item featuring licensed property offered in one of the events we organized recently.
| ● | arranging for lodging for event attendees (if ticket bundles include hotel accommodation); |
| ● | soliciting sponsors for the event; |
| ● | arranging for travel and lodging for IP owner’s supervising team; |
| ● | preparing, reviewing and signing (whether for ourselves or as agent of the event organizer) of all relevant contracts in relation to the event; |
| ● | issuing invoices for all amount due and collecting such amount (such as income from sales of tickets, interactive opportunities, merchandise, food and beverage), managing the payment of invoices received from all service providers and other suppliers, and where appropriate, accounting back to the event organizer/IP owner; and |
| ● | collating data on event attendees and evaluating the event. |
Our Business Model
Experience events
Our core business is the organization, planning, promotion and management of experience events. The following table shows the value chain of an experience event for a particular territory under an IP license:
The IP owner normally grants an event organizer an IP license to develop, organize, plan, promote and manage experience events relating to the licensed property in approved venues in a specified number of territories in return for the event organizer paying royalties (with a minimum guarantee) and equipment rental fees (where applicable) to the IP owner. All elements with respect to the experience events, including the choice of venue, concept, layout, design and pricing of merchandise, types and pricing of tickets, sponsorship and marketing, will all be subject to the IP owner’s approval at its absolute discretion. The event organizer will normally commit to spend a minimum amount of capital on the initial design, development, construction and opening of the first experience event and then the experience event will be toured in the other licensed territories with some local adaptations.
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The event organizer is the investor and host of these experience events. It will typically look for event planners to assist them in the organizing, planning, promotion and management of these experience events and the solicitation of sponsors in different territories. The event planners serve as the backbone of these experience events as their core functions encompass a wide array of responsibilities – from conceptualizing the experience events’ theme, managing budgets and selecting venues to orchestrating the intricate details that ensure the experience events run smoothly. They are generally responsible for preparing all relevant event proposals for the event organizer’s review and comments. Once these proposals are finalized, the event organizer will submit them to the IP owner for approval before the event planner executes the various approved proposals. As the investor and host of these experience events, the event organizer will typically sign all relevant contracts with third parties involved in the organization of these experience events, including the venue owner/operator, the contractor and the PR firm, and to take out all relevant insurance policies for these experience events.
Event planners will normally be compensated by an agreed service fee (generally paid in two non-refundable instalments, one shortly after the signing of the event management contract and the other before the opening of the experience event) and an agreed percentage of commission on the sponsorship income they solicited (generally paid after the experience event). The event planners will account all monies received from sponsors and event attendees (including payments collected for tickets, interactive opportunities, merchandise, food and beverage) to the event organizer, except in those cases where arrangements have been made for the event organizer to be paid directly.
In cases where an event planner has committed for overseas territories for which they do not have any local operations, the event planner will typically engage, at its own costs, a local facilitator to assist them with the local logistics, coordination and management of the experience event and the solicitation of sponsors in such territory. The remuneration structure and accounting mechanism will be similar to that between the event organizer and the event planner.
During the fiscal years ended March 31, 2024 and 2025, we had organized or commenced the organization of four and seven experience events, respectively. We acted as the event planner for these experience events with the event organizers as our customers in the above value chain. During the fiscal year ended March 31, 2026, we acted as the event organizer/co-organizer of eight experience events. Subject to the terms of the relevant event management contract, the event organizer will generally bear all the costs in relation to the experience events, other than the costs of the local facilitator (if any) and/or the human resources companies supplying the temporary workers engaged to assist us in the organization, planning, promotion and management of the experience event. If the event organizer would like to also utilize our design and/or merchandising services, it would typically be an arrangement negotiated separately outside of our scope of service as an event planner. For details, see “—Design and/or sale of merchandise” below.
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Samples of the posters of some of the recent experience events which we have organized, planned, promoted and managed.
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After the COVID-19 pandemic, there is a growing trend for event organizers to invite event planners to invest in experience events in the following two ways:
| (i) | profit-sharing deals whereby event planners have to contribute part of the capital required to secure IP licenses from IP owners in return for a share of the profits generated from the experience events to be organized based on such IP licenses and the first right to pick the territories in which the event planners wish to organize, plan, promote and manage such experience events in the conventional way described in the above value chain; or |
| (ii) | direct investment deals whereby event planners will step into the shoes of the event organizers and become the effective investors of the experience events which they have been commissioned to organize by the event organizers, while they also play the role of event planners described in the above value chain. Under this type of deal, the event organizers would sub-license the full right to organize the experience events to the event planners in return for the event planners paying royalties (with a minimum guarantee) and equipment rental fees (where applicable) to them, and such financial arrangements typically mirrors the financial arrangements between the event organizers and the IP owners except that the event organizers would build in their own margins in the financial arrangements between themselves and the event planners. Event planners would absorb all the production costs of the experience events and take up all the revenue generated from the experience events (including payments collected for tickets, interactive opportunities, merchandise, food and beverage as well as sponsorship). Where appropriate, the event planners may invite the local facilitators to co-organize the experience events with them and take a share of such investment. |
During the year ended March 31, 2025, we had also explored pure investments for events which we did not involve into event management. We had explored profit-sharing deals with an event organizer and had entered into three agreements with such event organizer in September 2023 to provide approximately 20% to 30% of the capital required to secure IP licenses from three IP owners for experience events in six to eight territories (mostly Asian countries and include Hong Kong in each case) for a term of two to three years. However, no funding was ever provided under these agreements. Such agreements were eventually terminated and restructured into direct investment deals for the actual experience events which we were interested in organizing instead.
During the year ended March 31, 2025, we had organized or commenced the organization of seven experience events, and we acted as the event planner for two of these experience events with the event organizers as our customers in the above value chain. The other five experience events were direct investment deals with the event attendees and sponsors as our customers, three of which we co-invested with the local facilitators for such experience events. We also had three pure investments for events which we did not involve into event operations.
During the year ended March 31, 2026, we had organized or commenced the organization of eight experience events, and we acted as the event organizer for four of these experience events. The other four experience events were co-organized with the local facilitators for such experience events. We also had six pure investments for events which we did not involve into event operations. As at the date of this Annual Report, we had further six direct investment deals for experience events in Hong Kong Taiwan or Thailand in the pipeline.
In the long run, we plan to leverage our industry experience and our connections with IP owners built up over the years to start obtaining IP licenses from IP owners directly. This will move us up the value chain to become an event organizer and can help us eliminate the mark-ups by the event organizers in the direct investment deals which we were engaging at the date of this Annual Report.
Design and/or sale of merchandise
Our customers typically pay us an agreed design fee for designing merchandise. For experience events, our customers generally engage us to design apparel items, stationery, figurines and pins bearing the licensed property. For other general customers, we can generally design any merchandise item based on their request and needs. As of March 31, 2026, we had a team of three designers who are experienced in 2D designs to provide our design services. We may also work with external designers if our in-house team of designers are overloaded with work.
In cases where our customers also require our assistance in managing the processes of product development, sourcing, production management, quality control and logistics services, we will typically sell the finished merchandise to our customers at cost-plus pricing.
Whether for our design services or merchandising services, our customers generally pay us in two non-refundable instalments, one shortly after the signing of the relevant design or merchandising contract and the other before the delivery of the final design work or the finished merchandise.
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Samples of merchandise which we have designed for our customers.
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Event management for brands
Brand owners will normally engage us directly to assist them in the organization, planning, promotion and/or management of their desired events and compensate us with an agreed service fee (generally paid in two non-refundable instalments, one shortly after the signing of the event management contract and the other before the opening of the event). In cases where product sales will be involved in the event (such as setting-up and running of pop-up stores), we can also manage the sales and account back to the brand owners.
Our Operations
Except during the COVID-19 pandemic, our principal business operation is the organization, planning, promotion and management of experience events as an event planner. Once we have been engaged by an event organizer as an event planner for an experience event or we have signed a direct investment deal for an experience event with an event organizer, we will form an internal project team to oversee the organization, planning, promotion and management of the experience event. The internal project team will typically comprise a project manager, a project coordinator, a designer, a sourcing executive and a catering coordinator. We will typically execute our job in the following four phases:
Phase one - Planning
We are typically engaged by the event organizer as an event planner or we typically sign a direct investment deal approximately six months before a planned experience event. Our contract with the event organizer will normally specify our respective responsibilities and the payment terms. Once the contract is signed, we will research on the theme, market, timing, location, pricing, facilities and venue of the proposed experience event, and brainstorm ideas on the experience event with the event organizer to ensure that the event is financially and commercially feasible. We will also assist in looking for a suitable event venue (typically an exhibition center or a shopping mall) and will procure the event operator to give a non-binding commitment to hold the venue for the provisional dates of the experience event pending the IP owner’s approval for the venue. If the experience event will be held outside of Hong Kong, we will also line up a local facilitator to assist us on a non-committed basis. For direct investment deals, we may also invite the local facilitator to take a share of the investment.
Then we will prepare an organizer plan with details of our (and where applicable, the local facilitator’s) background information and credentials; and a venue plan with comprehensive information on the chosen venue (including location, size, floor plan, setting, environment and neighborhood, transportation network, and venue operator’s support and past track record on experience events) for the IP owner’s approval.
Once the organizer plan and the venue plan have been approved by the IP owner, we will procure the event organizer to sign or we will sign the rental agreement with the venue operator (as the case may be) and where applicable, we will sign the collaboration agreement with the local facilitator. We will also tentatively line up a contractor to fit-out the event venue and a PR firm to assist us with media and promotion activities on a non-committed basis. Then we will move onto the detailed planning of the experience event, including the preparation of the following plans:
| ● | ticketing plan – with details of the types of ticket and ticket bundle and their pricing, sales timetable and details of the ticketing platforms; | |
| ● | marketing plan – with details and timetable of all online and offline marketing campaigns, the list of media and detailed marketing plan for each type of media and sample promotional materials; | |
| ● | sponsorship plan – with details of the sponsor(s), the support to be provided and the barter involved; | |
| ● | schematic design plan – a layout and zoning plan with detailed design of each area/zone of the experience event, showcasing where the licensed property and/or equipment rented from the IP owner would be exhibited; |
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Sample zoning and lay out plans for our recent experience events.
| ● | merchandising plan – with (i) details of the pop-up store(s) to be set up at or near the event venue for the sale of merchandise and/or interactive activities; (ii) list of custom-made merchandise with detailed design; (iii) list of licensed merchandise featuring the licensed property to be supplied by the IP owners and/or its licensee(s) for either consignment or sale; and (iv) list of interactive activities to be sold (such as photo-taking in front of a green-screen) with photo illustration; | |
| ● | Food and beverage plan – with details of the pop-up store, concept of the food and beverage to be served and photo illustrations on how licensed property will be featured on some of these food and beverage items (if any); and | |
| ● | operation plan – a document showing details of all the tasks and activities involved in managing the experience event and the people in charge of such task and activities, |
We will then prepare all relevant proposals for the event organizer’s comments or handling (as the case may be). After such proposals have been finalized with the event organizer, the event organizer will seek the IP owner’s approval on such proposals. We will continue to refine such proposals based on the IP owner’s feedback communicated to us by the event organizer until they have been formally approved by the IP owner. Then we will procure the event organizer to sign contracts or we will sign contracts (as the case may be) with all the relevant parties involved, including the contractor, PR firm, ticketing platforms and sponsor(s). This planning and approval phase generally takes place approximately four to six months before the opening of the experience event.
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Selection of service providers for the experience event
If we are engaged as an event planner only, the event organizer will generally bear all the costs in relation to the experience event, other than the costs of local facilitator (if any) and/or the human resources companies supplying the temporary workers we engaged to assist us in the organization, planning, promotion and management of the experience event. Although the event organizer will generally enter into contracts and settle payments directly with all the other service providers (such as the contractor, the PR firm and the ticketing platforms), we, as the event planner, are responsible for selecting all the service providers for the event organizer to seek the IP owner’s approval and working closely with them during the preparation and management of the experience event to ensure that they will meet contract specifications and schedule within the limit of the agreed budget.
We maintain a list of internally approved service providers and we generally only select service providers from this list unless there are other service providers recommended by the event organizer. We generally will obtain quotations from at least two to three service providers for the same category of service to compare prices before we submit the shortlist of service providers to the event organizer for review before the shortlist is submitted to the IP owner for approval. We generally select a service provider based on the requirements of the experience event and assess the service provider’s pricing, credit period, expertise, scope of services, facilities, reputation, track record, capacity as well as their capability to meet the requirements of the experience event as to theme, design, quality, schedule, costs, protection of IP rights and/or safety (as the case may be).
For direct investment deals, we generally step into the shoes of the event organizer in the selection of and the dealing with service providers.
Phase two – Pre-event preparation
Once the IP owner has approved the various proposals, we will (and where applicable, with the assistance of the local facilitator) proceed to prepare for the opening of the experience event, including:
| ● | liaising with all relevant parties to ensure that they proceed according to plan pursuant to the relevant contractual terms and where appropriate, supervise their progress; | |
| ● | where applicable, commissioning the production of custom-made merchandise, ensuring the quality and safety of such merchandise and sending final samples of merchandise for IP owner’s quality approval; | |
| ● | arranging for the logistics of the experience event, including the shipping of all exhibits, equipment and merchandise; | |
| ● | obtaining all permits required for the experience event; | |
| ● | executing and/or supervising the execution of (as the case may be) the marketing plan according to the pre-set timetable (such as the designing and printing of brochures, posters and banners in various sizes, arranging advertisements in major transportation stations and setting up an event website) and continuing to review/update such marketing plan based on the outcome of the completed marketing campaigns; | |
| ● | commencing ticket sales according to plan; | |
| ● | taking out all appropriate insurance policies, such as public liability insurance, contractor’s all risk insurance and transit insurance; | |
| ● | preparing a detailed rundown of the experience event identifying all responsible parties, with (i) specifications of all on-site facilities (such as electricity supply) and emergency exits in case of evacuation; (ii) all relevant guidelines and regulations; and (iii) points of contact; | |
| ● | recruiting temporary workers through human resources companies to assist in the management of the experience event; | |
| ● | training of all crew members who would assist in the management of the experience event; | |
| ● | managing the budget of the experience event and where appropriate, arranging for the event organizer to settle the invoices of all relevant parties; and | |
| ● | where applicable, arranging transport and lodging for the IP owner’s supervising team which provide technical support to ensure the smooth preparation and opening of the experience event. |
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Approximately ten to 20 days before the opening day of the experience event, we will arrange for the contractor to commence the fitting-out of the venue. We will also arrange for all exhibits and equipment to be delivered and installed in the venue for test running, training of the crew managing the experience event and where applicable, inspection by the IP owner’s supervising team, approximately three to five days before the opening day of the experience event.
This phase normally takes place during the four-month period before the opening of the experience event.
Phase three – Managing the experience event
Approximately one to three days before the opening day of the experience event, we will organize a media day as a soft opening of the experience event for media people (including key opinion leaders and other special guests) to gain first-hand experience on the experience event so that they can help to effectively promote and raise public awareness of the experience event. We will also distribute a number of complimentary tickets to all parties involved in the preparation of the experience event for them to bring their friends and family to test run the experience event on the media day. We will then refine the set-up and/or rundown of the experience event based on the feedback of the media day attendees.
On the actual opening day, we will organize an official opening ceremony, where we will invite special guests like popular movie stars/singers to officiate such ceremony and to create more hype for the experience event. The experience event typically runs for approximately six to 13 weeks. After the commencement of the experience event, we will supervise the crew managing the event and act as a coordinator to ensure that the event will run smoothly until its conclusion. We will also conduct daily reconciliation of the summary sales records in the cash registers with the actual amounts received in cash or by credit card from sales of tickets, interactive opportunities, merchandise, food and beverage at the event venue.
Local and overseas event attendees lining up for tickets to one of our recent events and gathering in the pop-up store set up in the event venue to look for their favorite merchandise.
Phase four - Post-event
Generally within one week after the experience event, we will evaluate the event with the event organizer and prepare all relevant evaluation reports for submission to the IP owner based on sales reports submitted by the ticketing platforms, media report submitted by the PR firm and the post-event survey which we may conduct. Where appropriate, we will also assist the event organizer in invoicing and collecting all monies due from third parties for sales of tickets, interactive opportunities, merchandise, food and beverages, and preparing a full comprehensive report accounting for the sales of all tickets, interactive opportunities, merchandise, food and beverages (except in those cases where arrangements have been made for the event organizer to be paid directly).
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Recent Developments
Reverse Stock Split – June 2026
On June 5, 2026, we announced that we expected to implement a 1-for-25 reverse stock split of our issued and outstanding Class A Ordinary Shares and Class B Ordinary Shares, as approved and authorized by a majority of our shareholders at an extraordinary meeting of shareholders held on April 1, 2026 and adopted by a written resolution of our board of directors dated May 8, 2026. The reverse stock split became effective on June 15, 2026, with trading beginning on a split-adjusted basis at the market open on that day.
Immediately prior to the effectiveness of the reverse stock split, our total issued and outstanding share capital consisted of 37,738,905 ordinary shares, comprising 37,538,905 Class A Ordinary Shares, par value of US$0.00005 each, and 200,000 Class B Ordinary Shares, par value of US$0.00005 each. Upon the effectiveness of the reverse stock split, our issued and outstanding share capital was adjusted to approximately 1,509,557 ordinary shares, comprising approximately 1,501,557 Class A Ordinary Shares, par value of US$0.00125 each, and approximately 8,000 Class B Ordinary Shares, par value of US$0.00125 each.
No fractional shares were issued in connection with the reverse stock split, and all fractional shares resulting from the reverse stock split were rounded up to the nearest whole share. In connection with the reverse stock split, we filed an excerpt of the written resolution of our board of directors reflecting the relevant changes with the Registry of Companies of the Cayman Islands on May 8, 2026 to reduce our authorized share capital from US$100,000 divided into 2,000,000,000 shares with a par value of US$0.00005 each, comprising 1,900,000,000 Class A Ordinary Shares and 100,000,000 Class B Ordinary Shares, to US$100,000 divided into 80,000,000 shares with a par value of US$0.00125 each, comprising 76,000,000 Class A Ordinary Shares and 4,000,000 Class B Ordinary Shares, with the reduction effected at the same ratio as the reduction in our issued and outstanding shares.
Reverse Stock Split – April 2026
On April 13, 2026, we announced that we expected to implement the Reverse Stock Split as approved and authorized by a majority of the shareholders at an extraordinary meeting of shareholders held on April 1, 2026. The Reverse Stock Split became effective on April 20, 2026, with trading beginning on a split-adjusted basis at the market open on that day.
Upon the effectiveness of the Reverse Stock Split on April 20, 2026, the Company’s issued and outstanding share capital is adjusted to 7,400,000 ordinary shares, comprising:
| ● | 7,200,000 Class A Ordinary Shares (par value US$0.00005 each, with 1 vote per share); and | |
| ● | 200,000 Class B Ordinary Shares (par value US$0.00005 each, with 12 votes per share). |
No fractional shares were issued in connection with the Reverse Stock Split. All fractional shares resulting from the Reverse Stock Split will be rounded up to the nearest whole share.
In connection with the Reverse Stock Split, the Company filed an excerpt of the minutes of an extraordinary meeting of shareholders reflecting the relevant changes, with the Registry of Companies of the Cayman Islands on April 2, 2026 to reduce the authorized share capital of the Company from US$100,000 divided into 10,000,000,000 shares with a par value of US$0.00001 each, comprising (a) 9,500,000,000 Class A Ordinary Shares with a par value of US$0.00001 each with 1 vote per share and (b) 500,000,000 Class B Ordinary Shares with a par value of US$0.00001 each with 12 votes per share to US$100,000 divided into 2,000,000,000 shares with a par value of US$0.00005 each, comprising (a) 1,900,000,000 Class A Ordinary Shares with a par value of US$0.00005 each with 1 vote per share and (b) 100,000,000 Class B Ordinary Shares with a par value of US$0.00005 each with 12 votes per share, the reduction at the same ratio as its reduction in the issued and outstanding shares.
No other material changes to the terms of the Company’s securities are anticipated in connection with the Reverse Stock Split.
Placement of Shares
On April 21, 2026, the Company received binding commitments from a group of accredited investors for the subscription of an aggregate of 3,400,000 Class A Ordinary Shares (post-split) and 17,000,000 Common Warrants (post-split). All such warrants have been exercised, resulting in additional proceeds to the Company of US$850,000. The total funds received from these investors are US$3,400,000. These commitments represent a portion of the total securities that was offered.
On June 22, 2026, the Company entered into a securities purchase agreement with Imperial Vision Fund SPC Series 1SP, issuing 320,000 Class A Ordinary Shares at a purchase price of US$3.75 per Class A Ordinary Share, for aggregate gross proceeds of US$1,200,000. This was conducted as an offshore offering in reliance on Regulation S.
On June 25, 2026, the Company entered into a securities purchase agreement with Golden Crown Consulting Limited, issuing 380,000 Class A Ordinary Shares at a purchase price of US$3.75 per Class A Ordinary Share, for aggregate gross proceeds of US$1,425,000. Like the other recent placements, this was an offshore offering conducted in reliance on Regulation S.
On July 7, 2026, the Company entered into a securities purchase agreement with its Chief Executive Officer, Ms. Seto Wai Yue, issuing an aggregate of 580,000 Class A Ordinary Shares and 72,000 Class B Ordinary Shares at an aggregate price of approximately US$2,445,000.
As of July 10, 2026, the Company’s total outstanding share capital was 3,485,583 shares, consisting of 3,405,583 Class A Ordinary Shares and 80,000 Class B Ordinary Shares.
Share Transfer Between Chief Executive Officer and Shareholder
On August 6, 2026, Ms. Seto entered into a Sale and Purchase Agreement to purchase 320,000 Class A Ordinary Shares at a purchase price of US$3.75 per share for an aggregate purchase price of US$1,200,000 from Imperial Vision Fund SPC Series 1 SP. As of the date of this Annual Report, Ms. Seto beneficially owns an aggregate of 1,149,890 ordinary shares, consisting of 1,069,890 Class A Ordinary Shares and 80,000 Class B Ordinary Shares, representing approximately 32.99% of the Company’s 3,485,583 total outstanding ordinary shares.
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Resolution of Nasdaq Listing Deficiency Regarding Minimum Bid Price Requirement
On November 26, 2025, the Company received a deficiency notification letter (the “Min Bid Price Letter”) from the staff of The Nasdaq Stock Market LLC indicating that the Company was not then in compliance with the minimum bid price requirement set forth in Nasdaq’s Listing Rules for continued listing on the Nasdaq Capital Market, as the closing bid price for the Company’s Class A Ordinary Shares listed on the Nasdaq Capital Market was below $1.00 per share for 30 consecutive business days. Nasdaq Listing Rule 5550(a)(2) requires listed securities to maintain a minimum bid price of $1.00 per share, and Nasdaq Listing Rule 5810(c)(3)(A) provides that a failure to meet the minimum bid price requirement exists if the deficiency continues for a period of 30 consecutive business days. The Min Bid Price Letter provided that the Company had a period of 180 calendar days from the date of the Min Bid Price Letter, or until May 26, 2026, to regain compliance with the minimum bid price requirement. If the Company did not regain compliance by the end of the applicable compliance period, its Class A Ordinary Shares would become subject to delisting.
The Company effected a 1-for-5 reverse stock split on April 20, 2026, which contributed to our bid price meeting the minimum requirement. Consequently, on May 5, 2026, the Company received confirmation from the Listing Qualifications Department of Nasdaq stating that, because the Company’s Class A Ordinary Shares had maintained a closing bid price at or above $1.00 per share for 10 consecutive business days from April 21 through May 4, 2026, the Company had regained compliance with the minimum bid price requirement under Nasdaq Listing Rule 5550(a)(2), and the matter was officially closed. Subsequently, the Company effected a further 1-for-25 reverse stock split, which became effective on June 15, 2026, to ensure continued compliance and bolster market confidence.
Strategic AI Collaboration
On May 12, 2026, the Company’s operating subsidiary, Trendic International Limited, entered into a non-binding Memorandum of Understanding with LinkFung Innovation Limited to explore the development, implementation, and deployment of a comprehensive AI-Powered Intelligent Image Library Platform. This collaboration aims to integrate advanced artificial intelligence capabilities, including real-time face detection, automated content tagging, and intelligent image filtering, supported by a scalable cloud infrastructure and high-performance database system. The project, estimated to span twelve months, is intended to enhance the Company’s digital infrastructure and service offerings.
Pricing Model
The pricing of our event management services or the pricing of event tickets, interactive opportunities, merchandise as well as food and beverage depends primarily on, among other things, our estimated event execution time costs, complexity of the event, the third-party costs we expect to incur which will not be reimbursed by our customers, such as local coordinator fees and fees of independent external labor sourcing agents, and other factors such as market demand, trends in the labor market, pricing of previous similar jobs, customers’ acceptable price ranges, our competitors’ prices and our expected margins.
As for the design and/or sale of merchandise, the design fee we charge is priced on a basis similar to our event management services and we also consider the extent to which the design will be utilized by our customers.
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In cases where our customers also require our assistance in managing the processes of product development, sourcing, production management, quality control and logistics services, we typically sell the finished merchandise to our customers. When determining the sale price, we generally take into consideration, among other things, the quality and quantity of raw materials used, technical complexity of the design, the production costs as quoted to us by the third-party manufacturers, the number of stock keeping units and our expected margins.
Customers
Prior to our engagement in direct investment deals since April 2024, our customers were generally event organizers and other enterprises and individuals based in Hong Kong that engage in event organization and trading activities. We served a total of ten customers during the fiscal years ended March 31, 2024. Consistent with market practice, our customers engage us on a project-by-project basis that are non-recurring in nature. We have not entered into any long-term contract with any of our customers. During the fiscal years ended March 31, 2024, our three largest customers accounted for approximately 88.8% of our net revenue, and our largest customer accounted for approximately 66.5% of our net revenue. For fiscal year ended March 31, 2024, all four experience events organized were instructed by the same customer.
For the year ended March 31, 2025 and 2026, we mainly engaged in direct investment deals and our customers were generally sponsors of the experience events we organized and individual event attendees in the countries for which the experience events were held. Our three largest customers (excluding individual event attendees) accounted for approximately 51.0% and 37.1% of our net revenue, respectively, and our largest customer accounted for approximately 20.4% and 20.2% of our net revenue, respectively.
Out of the major customers that have accounted for 10% or more of our revenue, one of them is a repeating major customer in the fiscal years ended March 31, 2024 and 2025 and 2026. We have maintained business relationships with our major customers for over three years on average. We generally grant our major customers for merchandise and exhibition related customer five to 30 days of credit periods and customers for transfer of IP, we may offer longer but not more than 365 days credit period. they generally pay us by check.
Sales and Marketing
We strive to maintain good business relationships with our customers. Our founder, director and chief executive officer, Ms. Seto, is responsible for fostering, building and maintaining relationships with our existing and potential customers, and keeping abreast of market developments and potential business opportunities. We have also been relying on customer referrals and/or word-of-mouth to promote our event management, design and merchandising services. Our engagement by customers for our event management, design and merchandising services generally starts with a potential customer approaching us for a quotation of our services or Ms. Seto approaching a potential customer to express our interests after she has learned about a potential project through her business connections.
Suppliers
Our suppliers include service providers, such as local facilitators, human resources companies, venue operators, PR firms and merchandise manufacturers. During the fiscal years ended March 31, 2024 and 2025 and 2026, we did not enter into any long-term contracts with our suppliers. We have maintained business relationships with our major suppliers for over two years on average. Our major suppliers generally grant us 30 days of credit periods and we normally pay our suppliers by way of check.
During the fiscal years ended March 31, 2024 and 2025 and 2026, cost of goods sold accounted for approximately 44.6%, 26.5% and 27.8% of our total cost of revenue, respectively. Cost of goods sold attributed to our five largest suppliers accounted for approximately 78.9%, 75.0% and 49.6% of our total cost of goods sold, respectively, and out of the major vendors that have accounted for 10% or more of our total cost of revenue, one of them is a repeating major vendor in the fiscal years ended March 31, 2025 and 2026. Cost of goods sold attributed to our largest supplier accounted for approximately 20.7%, 50.6% and 20.9% of our total cost of goods sold, respectively. We believe that our major suppliers can be easily replaced in the market should the relationship be discontinued.
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Employees
As of March 31, 2026, we employed a total of 16 persons which were working full-time. The number of our employees classified by function was as follows:
| Total | ||||
| Management | 1 | |||
| Project | 6 | |||
| Design and merchandising | 7 | |||
| Finance and administration | 2 | |||
| 16 | ||||
All our employees are local, and they are not covered by collective bargaining agreements. We offer competitive salaries, discretionary performance-based bonuses, medical insurance and a defined contribution to an MPF scheme to our employees. We have complied with the statutory minimum wage requirement provided under the Minimum Wage Ordinance for the fiscal years ended March 31, 2024 and 2025, and 2026. We consider our labor practices and employee relations to be good.
Due to the nature of our business, we work with human resources companies to hire temporary workers to assist us in the organization, planning, promotion and management of events as and when required.
Intellectual Property
We provide our event management, design and merchandising services under the brand name “Trendic”. We do not have any registered trademark but we have registered the domain name https://www.trendicint.com.
The vast majority of events we organize, plan, promote and manage originates from IP licenses. We understand the importance of the protection of IP rights. We endeavor, and procure all third-parties engaged by the event organizer and/or us in relation to these events, to protect the IP owners’ rights in the licensed property by (i) including appropriate copyright and trademark notices whenever any licensed property is being incorporated, displayed, exploited or otherwise used; (ii) complying with all guidelines and other requests set out by the IP owners on the use of the licensed property; (iii) refraining to use the licensed property other than as specifically permitted by the IP owners; (iv) agreeing that all IP rights created (if any) during the exploitation of the licensed property belong to the IP owners; (v) refraining to register any IP rights that are confusingly similar to the licensed property in our respective name, in any part of the world; and (vi) informing the IP owner immediately in cases of any potential infringement of the IP owners’ IP rights and seek the IP owner’s approval on the usage of the licensed property in case of any uncertainty.
To our best knowledge, we were not involved in any proceedings with regard to, and we have not received notice of any claims or infringement of, any IP rights that may be threatened or pending, in which we may be involved either as a claimant or respondent.
Real Property
We do not own any real property and we currently operate in the following three leased premises in Hong Kong:
| Location | Usage | Lease period | Monthly rent | Approximate gross floor area | ||||
| RM 18E, Billion Plaza Phase 2, 10 Cheung Yue Street, Cheung Sha Wan, Hong Kong | Head office | June 15, 2026 to June 14, 2028 | HK$56,650 | 2,575 square feet | ||||
Room 1705, 17th Floor PeakCastle, 476 Castle Peak Road Lai Chi Kok, Kowloon Hong Kong |
Head office | July 19, 2024 to June 18, 2026 | HK$41,100 | 1,790 square feet | ||||
Shop 1, 4th Floor iSQUARE, 63 Nathan Road Tsim Sha Tsui, Kowloon Hong Kong |
Event venue | June 5, 2024 to September 16, 2025 | HK$1 base rent plus turnover rent | 9,593 square feet | ||||
Shop 4, 3rd Floor iSQUARE, 63 Nathan Road Tsim Sha Tsui, Kowloon Hong Kong |
Café for event venue | June 11, 2024 to September 16, 2025 | HK$10,000 base rent plus turnover rent | 1,917 square feet |
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Insurance
We maintain content and stock, business interruption, money and employees’ compensation as well as public liability policies to protect our business, facilities and employees in accordance with customary industry practice and/or in compliance with applicable laws and regulations in Hong Kong. In cases where we are engaged as an event planner, event organizers are generally responsible for taking out insurance policies covering the events (including ourselves). However, we also take out event specific insurance as and when required under the terms of the relevant event management contracts, such as public liability insurance covering our employees in the event venue. However, for direct investment deals, we are responsible for taking out all insurance policies covering the events. We do not carry any “key person” or product liability insurance. We will continue to review and assess our risk portfolio and make necessary and appropriate adjustments to our insurance practices to align with our needs and with industry practice in Hong Kong and any other markets which we may operate in the future.
Competition
The events industry in Hong Kong encompasses a range of public and private events, from trade shows, conferences, concerts, exhibitions, charity galas, brand promotion events to internal corporate events. This industry is highly fragmented and intensely competitive. It is characterized by constant change and innovation as customers are demanding event management companies to create deeper and more meaningful event experiences that leave lasting impressions.
We specialize in organizing, planning, promoting and managing experience events. It is a niche sector of the events industry as it requires the players to have an in-depth knowledge of the operation of IP licenses and experience in working with IP owners. Our biggest competition comes from local event management companies that are experienced in organizing big scale public events that involve IP licenses. Furthermore, we may face potential competition from global event management companies that seek to enter the Hong Kong market, whether independently or through the formation of strategic alliances with, or acquisition of, event management companies that operate in the Hong Kong market.
We believe the principal competitive factors in our market include breadth and depth of the scope of services, pricing, user experience, financial viability, industry expertise and reputation, proven customer references, track record as well as relationship with other industry players (such as IP owners, venue operators and overseas event management companies). We believe that we generally compete favorably with our competitors because the breadth and depth of our services allow us to manage the entire event lifecycle across every type of event.
Litigation and Other Legal Proceedings
At the date of this Annual Report, we are not party to any claim, litigation or arbitration of material importance and there was no claim, litigation or arbitration of material importance known to our directors to be pending or threatened against us which could have a material adverse effect on our business, financial condition or results of operations.
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ITEM 4A. UNRESOLVED STAFF COMMENTS
Not Applicable.
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes included elsewhere in this Annual Report. This discussion and analysis and other parts of this Annual Report contain forward-looking statements based upon current beliefs, plans and expectations that involve risks, uncertainties and assumptions. Our actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of several factors, including those set forth under “Risk Factors” and elsewhere in this Annual Report. You should carefully read the “Risk Factors” section of this Annual Report in Item 3 to gain an understanding of the important factors that could cause actual results to differ materially from our forward-looking statements.
As used in this Report, references to “Company,” “we,” “us,” and “our” refer to Dreamland and its consolidated subsidiaries, unless the context requires otherwise.
This discussion is intended to provide the reader with information that will assist in understanding our financial statements, the changes in certain key items in those financial statements from period to period, and the primary factors that accounted for those changes, how operating results affect our financial condition and results of our operations of the Company as a whole, and how certain accounting principles and estimates affect our financial statements.
Overview
We are an event management service provider based in Hong Kong with over eight years of experience in managing the entire or part of the event lifecycle for our customers. Events encompass a range of public and private events, from trade shows, conferences, concerts, exhibitions, charity galas, brand promotion events to internal corporate events. For enterprises, events offer a highly effective way to maximize their engagement with customers, helping enterprises to generate and qualify leads, deepen relationships with customers and build brand loyalty and advocacy, such as promotion of a brand by satisfied customers through customers sharing positive experiences on social media, providing referrals to friends and family, or simply telling others about the brand.
We specialize in assisting event organizers in organizing, planning, promoting and managing themed touring walk-through experience events, or experience events, for intellectual property owners, or IP owners, of characters in well-publicized animated cartoons and/or live action theatrical motion pictures, each a licensed character. This type of experience events typically involve an intellectual property license, or IP license, from the IP owner to an event organizer, giving the event organizer the right to develop, organize, plan, promote and manage experience events relating to the licensed character and other licensed properties, including the name of the licensed character, title of the animated cartoon/live action theatrical motion picture, costumes, environmental settings, plot elements and artwork together as the licensed property in approved venues in a specified number of territories. During the experience event, event attendees may separately purchase, in designated area(s) at the approved venue, (i) various interactive activities and/or entertainment, including hands-on active-play/participation and/or media-based activities, such as green-screen photo/video capturing activities where guests are offered the opportunity to have their photo and/or video taken using green-screen capture technology, or the interactive opportunities; (ii) custom-made merchandise featuring the licensed property that are commissioned specially for the experience event, or the custom-made merchandise, as well as other licensed merchandise featuring the licensed property that are supplied by the IP owners and/or its licensee(s); and (iii) food and beverage products.
Apart from organizing, planning, promoting and managing experience events, we also engage in the design and/or sale of merchandise, such as merchandise sold in concert venues and merchandise used as gift with purchase by our customers, as well as event management for brands, such as setting-up and running of pop-up stores and organizing store opening/product launch press events for labels.
During the COVID-19, pandemic most of the in-person events were rescheduled, postponed or cancelled and our business relied on the design and/or sale of merchandise and government subsidies. When things started to normalize after the COVID-19 pandemic, our business primarily focused on event management business again during the year ended March 31, 2024. Since the year ended March 31, 2025, we started to be an event organizer and investments for events.
For the years ended March 31, 2025 and 2026, our net revenue amounted to approximately HK$45.80 million and approximately HK$50.68 million, respectively, representing an increase of approximately 10.7%. Due to the impairment of investment on event projects, as well as extensive legal and professional fee and shared-based compensation incurred after the listing, we recorded a net loss for the year ended March 31, 2026 amounting to approximately HK$74.05 million compared to a net profit for the year ended March 31, 2025 amounting to approximately HK$6.43 million.
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For the years ended March 31, 2024 and 2025, our net revenue amounted to approximately HK$20.4 million and approximately HK$45.8 million, respectively, representing an increase of approximately 124%. Due to the net result of our business expansion partially offset by listing fees incurred during the year ended March 31, 2025, we recorded a net profit for the year ended March 31, 2024 amounting to approximately HK$7.09 million compared to a net profit for the year ended March 31, 2025 amounting to approximately HK$6.43 million.
The following table sets forth a summary of our consolidated results of operations and the amounts as a percentage of total revenues for the periods indicated. This information should be read together with our consolidated financial statements and related notes included elsewhere in this annual report. Our historical results presented below are not necessarily indicative of the results that may be expected for any future period.
| Year ended March 31, | ||||||||||||
| 2024 | 2025 | 2026 | ||||||||||
| HKD | HKD | HKD | ||||||||||
| Revenues | $ | 20,103,097 | $ | 45,352,618 | $ | 50,682,220 | ||||||
| Revenues, related party | 337,586 | 451,759 | - | |||||||||
| Total Revenues, net | 20,440,683 | 45,804,377 | 50,682,220 | |||||||||
| Costs and expenses: | ||||||||||||
| Cost of revenue | (11,360,489 | ) | (33,565,785 | ) | (50,010,801 | ) | ||||||
| Cost of revenue – related party | - | (264,349 | ) | (230,759 | ) | |||||||
| Cost of revenue - amortization | - | (2,560,667 | ) | - | ||||||||
| Selling, general and administrative expenses | (666,286 | ) | (7,319,454 | ) | (60,583,070 | ) | ||||||
| Research and development | - | (760,000 | ) | (2,373,000 | ) | |||||||
| Impairment of investment on event projects | - | - | (5,322,527 | ) | ||||||||
| Impairment of rights of use assets | - | (111,136 | ) | - | ||||||||
| Depreciation | (294,083 | ) | (449,514 | ) | (415,823 | ) | ||||||
| Profit/(loss) from operations | 8,119,825 | ) | 773,472 | (68,253,760 | ) | |||||||
| Other income/(expenses): | ||||||||||||
| Interest income | 22,995 | 44,840 | 2,138 | |||||||||
| Finance costs | (246,262 | ) | (656,689 | ) | (829,049 | ) | ||||||
| Other income/(expenses) | 180,663 | 7,363,910 | (4,886,599 | ) | ||||||||
| Total other income/(expenses), net | (42,604 | ) | 6,752,061 | ) | (5,713,510 | ) | ||||||
| Profit / (loss) before income taxes | 8,077,221 | 7,525,533 | (73,967,270 | ) | ||||||||
| Income tax expense | (988,347 | ) | (1,100,000 | ) | (85,600 | ) | ||||||
| NET PROFIT/(LOSS) | $ | 7,088,874 | $ | 6,425,533 | (74,052,870 | ) | ||||||
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Description and Analysis of Principal Components of Our Results of Operations for the years ended March 31, 2025 and 2026
The following discussion is based on our historical results of operations and may not be indicative of our future operating performance.
Year Ended March 31, 2025 Compared to March 31, 2026
Revenue
We derive our revenue from the provision of event management services, sale of goods and ticketing, sponsorship and design services. Revenue from provision of event management services represented revenue derived from events planning, development and operation services. Sales of goods represented revenue derived from procurement and sales of goods/drinks to customers from events and non-events and ticketing represented tickets sold and used for events. Sponsorship income represented titleship for the events. Video production income represented revenue from video production at event requested by customers. Design services represented revenue from design services as requested by customers. The following table sets forth our revenue for the years ended March 31, 2025 and 2026
| Year ended March 31, | ||||||||
| 2025 | 2026 | |||||||
| HKD | HKD | |||||||
| Provision of event management services | $ | 4,423,413 | $ | - | ||||
| Sales of goods and others | 15,572,720 | 23,442,060 | ||||||
| Tickets | 9,731,700 | 17,489,369 | ||||||
| Sponsorship | 5,371,523 | 9,112,347 | ||||||
| Video production | 8,950,021 | - | ||||||
| Design and others | 1,755,000 | 638,444 | ||||||
| Total: | $ | 45,804,377 | $ | 50,682,220 | ||||
Our total revenue increased by approximately HK$4.7 million, or approximately 10.7%, to approximately HK$50.7 million for the year ended March 31, 2026 from approximately HK$45.8 million for the year ended March 31, 2025. This increase was mainly attributable to our extensive role as an event organizer/co-organizer resulting increased income from sales, ticket and sponsorship. Given the minimum role of service provider, no event management services and video production services revenue was generated during the year ended March 31, 2026.
Cost of revenues
| Year ended March 31, | ||||||||
| 2025 | 2026 | |||||||
| HKD | HKD | |||||||
| Sub-contracting fee from event facilitators | $ | 7,980,804 | $ | 10,720,030 | ||||
| Ticketing platform | 117,631 | 611,352 | ||||||
| Cost of goods sold for IP products | 8,950,189 | 13,875,624 | ||||||
| Staff costs | 5,131,158 | 5,455,354 | ||||||
| Royalty fee | 2,581,599 | 9,730,162 | ||||||
| Design and renovation | 4,124,635 | 6,343,364 | ||||||
| Video production costs | 1,672,824 | - | ||||||
| Other costs | 3,271,294 | 3,505,674 | ||||||
| Total: | $ | 33,830,134 | $ | 50,241,560 | ||||
For the years ended March 31, 2025 and 2026, our cost of revenues was mainly comprised of cost of goods sold for IP products, staff costs, subcontracting fees from event facilitators, royalty fees for short term use of IP, design and renovation, and other costs related to events. For the years ended March 31, 2025 and 2026, our cost of revenues amounted to approximately HK$33.8 million and HK$50.2 million, respectively. The increase in costs of revenue during the year ended March 31, 2026 was mainly due to the shift of operation focus from services provider to event organizer/co-organizer, resulting in a heavier burden of subcontracting fee, cost of inventory, royalty fee and design and renovation fee.
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General and Administrative expenses
The following table sets forth the breakdown of our general and administrative expenses for the years ended March 31, 2025 and 2026:
| Year ended March 31, | ||||||||
| 2025 | 2026 | |||||||
| HKD | HKD | |||||||
| Accounting fee | $ | 113,000 | $ | 126,100 | ||||
| Bank charges | 72,270 | 247,541 | ||||||
| Insurance expenses | 356,788 | 800,856 | ||||||
| Staff payroll costs | 1,411,500 | 2,961,887 | ||||||
| Listing fees | 3,503,862 | 1,304,782 | ||||||
| Legal and professional fees | 188,842 | 12,186,393 | ||||||
| Travelling expenses | 172,228 | 146,531 | ||||||
| Marketing fee for events | 541,965 | 3,015,534 | ||||||
| Office expenses | 296,346 | 1,261,960 | ||||||
| Share-based payment | 37,834,916 | |||||||
| Variable lease payments | 216,036 | 344,208 | ||||||
| Sundries | 446,617 | 352,362 | ||||||
| Total: | $ | 7,319,454 | $ | 60,583,070 | ||||
Our general and administrative expenses amounted to approximately HK$7.32 million and approximately HK$60.6 million for the years ended March 31, 2025 and 2026, respectively. The increase was mainly due to (i) the investor and public relation retainer services, webpage development and business branding services; (ii) IPO related legal and professional fees such as audit and legal expenses that do not qualify for capitalization as offering cost; (iii) additional recurring legal and professional fees after listing; and (iv) the share-based payment expenses of HK$37.8 million relating to the business development and marketing service agreement entered into in August 2025.
Research and development
Research and development expenses amounted to HK$0.76 million and approximately HK$2.4 million, respectively, during the years ended March 31, 2025 and 2026. During the year ended March 31, 2025, research and development mainly represented research and development expenses incurred for our website and e-ticket platform, while during the year ended March 31, 2026, it mainly represented research and development expenses incurred for our ERP system,
Amortization
Amortization mainly represented amortization expenses incurred from licenses acquired for the events. Amortization expenses amounted to HK$2.56 million and nil, respectively, during the years ended March 31, 2025 and 2026.
Impairment of investment on event projects
The impairment of investment in event projects was primarily driven by uncertainty surrounding future economic benefits, resulting from the continued delay in the commencement dates of two projects. Impairment of investment on event projects amounted to nil and approximately HK$5.3 million, respectively, during the years ended March 31, 2025 and 2026.
Impairment of rights of use assets
Impairment of rights of use assets mainly represented impairment made due to uncertainty on future economic benefits on relevant rights of use assets. Impairment of rights of use assets amounted to HK$0.11 million and nil, respectively, during the years ended March 31, 2025 and 2026.
Depreciation
Depreciation mainly represented depreciation expenses incurred for equipment and right-of-use assets for office premises and motor vehicles. Depreciation amounted to approximately HK$0.45 million and approximately HK$0.42 million, respectively, during the years ended March 31, 2025 and 2026.
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Other Income/ (Expense), Net
The following table sets forth the breakdown of our other income/(expense) for the years ended March 31, 2025 and 2026:
| Year ended March 31 | ||||||||
| 2025 | 2026 | |||||||
| HKD | HKD | |||||||
| Bank interest income | $ | 44,840 | $ | 2,138 | ||||
| Finance costs | (656,689 | ) | (829,049 | ) | ||||
| Gain on disposal of intangible assets | 6,145,711 | - | ||||||
| Gain/(Loss) on investment on event projects | 806,606 | (5,071,365 | ) | |||||
| Sale of concert tickets and others | 411,593 | 184,766 | ||||||
| Total | $ | 6,752,061 | $ | (5,713,510 | ) | |||
The other income/(expenses) mainly represented government grant, disposal of intangible assets, gain/(loss) on investment in event projects and sale of concert tickets. Gain/(Loss) on investment on event projects represented the net profits/(loss) of certain event projects to be shared by us as an investor. Under the terms of the agreements, we provide capital to the local operators for the purpose of investing in event-related projects. In return, we are entitled to a share of the net returns (or bears a share of the losses) generated by those projects, in proportion to the percentage funded based on budget cost. The decrease was mainly because there was no disposal of intangible assets and the Group’s extensive share of losses in certain loss-making projects during the year ended March 31, 2026.
Beginning from the year ended March 31, 2025, we started to invest in event projects and receiving funding from other investors. We made a realized gain of HKD806,606 and a realized loss of HKD3,742,264 from investment on event projects, and a nil and HKD1,329,101 from profit-sharing expenses to other investors, respectively.
Finance costs represented the interest expenses for bank borrowings and finance lease during the years ended March 31, 2025 and 2026. The increase in finance costs was mainly attributable to the increase of bank borrowings during the year ended March 31, 2026.
Income Tax Expenses
During the years ended March 31, 2025 and 2026, the income tax expenses of approximately HK$1.10 million and HK$0.09 million, respectively, were recognized. The expense during the year ended March 31, 2026 solely represents the under-provision of prior year tax.
Net Profit/(Loss)
As a result of the foregoing, our net profit for the year ended March 31, 2025 amounted to approximately HK$7.09 million and net loss for the year ended March 31, 2026 amounted to approximately HK$74.1 million, respectively.
Liquidity and Capital Resources
Our liquidity and working capital requirements primarily relate to our operating expenses. Historically, we have met our working capital and other liquidity requirements primarily through cash generated from our operations. Going forward, we expect to fund our working capital and other liquidity requirements from various sources, including cash generated from our operations, loans from banking facilities, the net proceeds from this offering and other equity and debt financings as and when appropriate.
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Cash flows
The following table summarizes our cash flows for the years ended March 31, 2025 and 2026:
| Year ended March 31, | ||||||||
| 2025 | 2026 | |||||||
| HKD | HKD | |||||||
| Net cash used in operating activities | $ | (15,992,733 | ) | $ | (19,978,087 | ) | ||
| Net cash used in investing activities | (14,765,561 | ) | (24,704,986 | ) | ||||
| Net cash provided by financing activities | 44,076,930 | 48,004,701 | ||||||
| Net change in cash and cash equivalent | 13,318,636 | 3,321,628 | ||||||
| BEGINNING OF PERIOD | 3,817,083 | 17,135,719 | ||||||
| END OF PERIOD | $ | 17,135,719 | $ | 20,457,347 | ||||
Cash flows from operating activities
For the year ended March 31, 2026, our net cash used in operating activities was approximately HK$19.98 million, which primarily consisted of our net loss before tax of approximately HK$73.97 million, mainly adding back (i) the non-cash depreciation of right of use assets and equipment of approximately HK$0.42 million, (ii) finance costs of approximately HK$0.83 million; (iii) the impairment of investment on event projects of approximately HK$5.32 million, (iv) the loss on investments of approximately HK$5.08 million; (v) decrease in inventory of approximately HK$0.31 million, (vi) decrease in account and other receivables of approximately HK$10.80 million for receivables not yet settled as at March 31, 2026, (vii) the increase in deposits and prepayments of approximately HK$10.08 million, (viii) the decrease in amount due from related parties of approximately HK$0.93 million, (ix) the increase in Amount due from joint operation parties of HK$11.27 million, (x) increase in trade and other payable of approximately HK$15.94 million, and (xii) income tax paid of approximately HK$2.17 million.
For the year ended March 31, 2025, our net cash used in operating activities was approximately HK$16.0 million, which primarily consisted of our net profit before tax of approximately HK$7.53 million, mainly adding back (i) the non-cash depreciation of right of use assets and equipment of approximately HK$0.45 million and finance costs of approximately HK$0.66 million, (ii) the impairment of approximately HK$0.11 million; (iii) the increase in amortization of licenses of approximately HK$2.56 million, (iv) the increase in gain on disposal of intangible assets of approximately HK$6.15 million and gain on investments of approximately HK$0.81 million; (v) increase in inventory of approximately HK$0.31 million, (vi) increase in account and other receivables of approximately HK$6.45 million for receivables not yet settled as at March 31, 2025, (vii) the increase in deposits and prepayments of approximately HK$10.99 million, (viii) the increase in amount due from related parties of approximately HK$0.93 million, (ix) the increase in Amount due from joint operation parties of HK$1.76 million, (x) decrease in trade and other payable of approximately HK$0.58 million, excluded the other payable to investment partner, (xi) the decrease in contract liabilities of approximately HK$3.57 million, (xii) the decrease in contract assets for upcoming events of approximately HK$4.28 million.
Cash flows from investing activities
For the year ended March 31, 2026, our net cash used in investing activities was approximately HK24.70 million which was mainly due to cash paid for event projects at loss of approximately HK$3.76 million and cash paid for investments of approximately HK$20.95 million.
For the year ended March 31, 2025, our net cash used in investing activities was approximately HK$14.77 million which was mainly due to the increase in interest income of approximately HK$0.04 million, proceeds from disposal of intangible assets of approximately HK$1.15 million, proceeds from investment on event projects of approximately HK$1.8 million, and offset by the increase in acquisition of intangible assets of approximately HK$9.27 million and cash paid for investments of approximately HK$8.49 million.
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Cash flows from financing activities
For the year ended March 31, 2026, our net cash provided by financing activities was approximately HK$48.00 million which was mainly due to the net proceeds of approximately HK$32.99 million from issuance of ordinary shares in the initial public offering, proceeds from shares to be issued of HK$24.73 million, proceeds from a shareholder of HK$7.21 million, the proceeds from bank overdraft of HK$2.06 million and the bank borrowings of approximately HK$21.36 million, and partially offset by the payments to a shareholder of approximately HK$5.41 million, the repayment to investment partner of HK$14.71 million, the repayment of bank overdrafts of approximately HK$1.90 million, repayment of bank borrowings of approximately HK$16.59 million, and interest paid for overdraft and bank borrowings of HK$0.81 million.
For the year ended March 31, 2025, our net cash provided by financing activities was approximately HK$44.08 million which was mainly due to the increase of proceeds from a shareholder of HK$9.18 million, proceeds from investment partner of approximately HK$30.1 million, the increase in bank overdraft of HK$15.14 million and the increase in bank borrowings of approximately of HK$3.70 million, and partially offset by the payments to a shareholder of approximately HK$4.39 million and the repayment of bank overdrafts of approximately HK$7.79 million.
Capital commitments
The Company currently is not aware of any legal proceedings or claims that it believes will have, individually or in the aggregate, a material adverse effect on its business, financial condition, operating results, or cash flows.
Commitment on investments for event projects
The Company signed few investments for event projects as at March 31, 2026 and there are outstanding commitments for investments of HK$5,928,586 as at March 31, 2026.
The Company signed few investments for event projects as at March 31, 2025 and there were outstanding commitments for investments of HK$12,798,092 as at March 31, 2025.
Except for the above, as of March 31, 2025 and 2026, the Company has no material commitments or contingencies.
Key Factors Affecting our Results of Operations
Our financial condition and results of operation have been and will continue to be affected by a number of factors, many of which may be beyond our control, including those factors set out in the section headed ‘‘Risk Factors’’ in this prospectus. These factors include the following:
| ● | Economic conditions of Hong Kong and Asian markets: our revenues may significantly be affected by economic conditions of places for the events to be convened for events and sold of goods. A slowdown in the economy, such as deterioration of overall economic sentiment may decrease the willingness of customers for the events and purchased of IP products, which in turn may decrease their need on overall our services and products, and affect our operating business performance; | |
| ● | Dependence on key customer: our revenues may significantly be affected by the demands of our key customer due to market competitions such as pricing strategy offered by competitors; | |
| ● | Limited vendors for events facilitators and IP products: our costs for goods to be sold for IP products may significantly be affected due to limited vendors for events facilitators and IP products; | |
| ● | Dependence on co-organizer/joint operation parties: our revenue and costs for event may significantly be affected due to co-organizer/joint operation parties performance; | |
| ● | Ability to manage staff costs: any upward changes in our staff costs that are not in proportion to an increase in our revenues would impact our results of operations negatively; |
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Off-Balance Sheet Transactions
As of March 31, 2026, we have not entered into any material off-balance sheet transactions or arrangements.
Except for commitments disclosed above, we have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties. In addition, we have not entered into any derivative contracts that are indexed to our own shares and classified as shareholders’ equity, or that are not reflected in our consolidated financial statements. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. Moreover, we do not have any variable interest in an unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or research and development services with us.
Critical Accounting Policies and Estimates
Our financial statements and accompanying notes have been prepared in accordance with IFRS accounting standards. The preparation of these financial statements and accompanying notes requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis of making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We have identified certain accounting policies that are significant to the preparation of our financial statements. These accounting policies are important for an understanding of our financial condition and results of operation. Critical accounting policies are those that are most important to the portrayal of our financial conditions and results of operations and require management’s difficult, subjective, or complex judgment, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods. Certain accounting estimates are particularly sensitive because of their significance to financial statements and because of the possibility that future events affecting the estimate may differ significantly from management’s current judgments. While our significant accounting policies are more fully described in Note 2 to the consolidated financial statements included elsewhere in this prospectus, we believe the following critical accounting policies involve the most significant estimates and judgments used in the preparation of our financial statements.
| ● | Interests in Joint Operations |
| During the year ended March 31, 2026, the Group entered into joint operation arrangement for certain events. In return, the Group will have project sharing at agreed portion. A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the assets, and obligations for the liabilities, relating to the arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control. | |
| The Group recognizes in relation to its interest in a joint operation: |
| ● | its assets, including its share of any assets held jointly; | |
| ● | its liabilities, including its share of any liabilities incurred jointly; | |
| ● | its revenue from the sale of its share of the output arising from the joint operation; | |
| ● | its share of the revenue from the sale of the output by the joint operation; and | |
| ● | its expenses, including its share of any expenses incurred jointly. |
| The assets, liabilities, revenues and expenses relating to the Group’s interest in a joint operation are accounted for in accordance with the relevant IFRSs such as IFRS 11 applicable to the particular assets, liabilities, revenues and expenses, and recognized based on the profit sharing ratio on each event. The amount due from/(to) joint operation parties will be recognized based on payment/receipt by the Group and joint operation accordingly. |
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| ● | Investment on event projects |
Financial assets are classified, at initial recognition, as subsequently measured at amortized cost, fair value through other comprehensive income, and fair value through profit or loss. The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow characteristics and the Group’s business model for managing them. The Group initially measures a financial asset at its fair value plus in the case of a financial asset not at fair value through profit or loss, transaction costs. In order for a financial asset to be classified and measured at amortized cost or fair value through other comprehensive income, it needs to give rise to cash flows that are solely payments of principal and interest (“SPPI”) on the principal amount outstanding. Financial assets with cash flows that are not SPPI are classified and measured at fair value through profit or loss, irrespective of the business model. The Group’s business model for managing financial assets refers to how it manages its financial assets in order to generate cash flows. The business model determines whether cash flows will result from collecting contractual cash flows, selling the financial assets, or both. Financial assets classified and measured at amortized cost are held within a business model with the objective to hold financial assets in order to collect contractual cash flows, while financial assets classified and measured at fair value through other comprehensive income are held within a business model with the objective of both holding to collect contractual cash flows and selling. Financial assets which are not held within the aforementioned business models are classified and measured at fair value through profit or loss.
The investment on event projects are recorded at fair value through profit or loss (FVTPL), with cost less impairment used as a proxy where fair value is not reliably measurable due to absence of readily available market data. The investment on event projects represents monetary funding in projects where the Group does not involve itself in event operations and has a contractual right to returns based on a percentage of amounts invested over the net profit or loss of the event in accordance with binding agreements. As such, the contractual cash flows are not solely payments of principal and interest (SPPI) and therefore the investment fails the SPPI test. The management believe the carrying amounts of these investments approximate fair value. Historically, event projects were short-term in nature and expected to be completed within one year, with such investments presented as current assets. During the year ended March 31, 2026, the Group invests in two medium-term projects with durations of 3–5 years. These investments are classified as current assets considering the right to recall.
| ● | Revenue Recognition |
The Company adopted Accounting Standards Revenue from Contracts with Customers (IFRS 15), which provided the following overview of how revenue is recognized from the Company’s contracts with customers: The Company recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services.
Step 1: Identify the contract(s) with a customer.
Step 2: Identify the performance obligations in the contract.
Step 3: Determine the transaction price – The transaction price is the amount of consideration in a contract to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer.
Step 4: Allocate the transaction price to the performance obligations in the contract – Any entity typically allocates the transaction price to each performance obligation on the basis of the relative standalone selling prices of each distinct good or service promised in the contract.
Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation – An entity recognizes revenue when (or as) it satisfies a performance obligation by transferring a promised good or service to a customer (which is when the customer obtains control of that good or service). The amount of revenue recognized is the amount allocated to the satisfied performance obligation. A performance obligation may be satisfied at a point in time (typically for promises to transfer goods to a customer) or over time (typically for promises to transfer service to a customer).
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Revenue related to event planner
The Company identified the following three types of performances under the event management contract: i) events planning, design, development and operation, or the Event Management Services; ii) Procurement and sales of goods (including but not limited to IP goods, drinks, tickets) to customer; iii) sponsorship commission income. The Company’s revenue is derived from contracts with customers in the rendering of Event Management Services, and as such, the revenue recognized depicts the transfer of promised services to its customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those services when the events start. The Company considers the terms of the contract and all relevant facts and circumstances when applying this guidance. The duration of the service period is usually less than one year. The Company recognize Event Management Services revenue when the event starts and during the event period ratably because: i) Based on the contract terms, none of parties that entered into the contract can terminate, and find other vendors to substitute the services; ii) And the customer benefits from our service beginning at the point of the event started to the event completion. The Company generally requires the customers to make the advanced payment at certain percentage of the total contract value upon signing the agreement. Contract liabilities are recorded when the advanced payment is received from the customers before all of the relevant criteria for revenue recognition has been met. The event management contract price is lump sum basis, consisted of sales of goods and Event Management Services consideration. For allocation of transaction price of sales of goods and Event Management Services, the company applied cost plus margin method to determine the sales of goods revenue based on standalone sales of goods gross margin, and allocate the remaining provision consideration into event management services. For sponsorship commission income, there is specified percentage calculation based on sponsorship fee raised (if any).
For sponsorship commission income, it is sponsorship for the whole event period and recognized over the event period align with Event Management Services.
Revenue related to event organizer
The Company obtained IP directly from IP owner and authorized to convene events as organizer or co-organizer. The Company identified the following four types of performances under the event: i) sales of event tickets for the events; ii) Procurement and sales of goods (including but not limited to IP goods and drinks) to customer; iii) sponsorship commission income and (iv) ad hoc requested by customer say video production for the event
The Company sold the event tickets through on site or sales platform. For event tickets income, it is recognized upon the provision of events.
The Company sold the goods at the event. Revenue from sales of goods is recognized at a point in time when control of the goods has been transferred to the customers. Control is primarily evidenced by taking physical possession and inventory risk of the goods. The Group controls the goods and determines the selling price or allocated selling price (under event management services contracts) of the good before the good is transferred to the customers.
For sponsorship commission income, there is specified percentage calculation based on sponsorship fee raised (if any). For sponsorship commission income, it is sponsorship for the whole event period and recognized over the event period align with Event Management Services.
For ad hoc income say video production, it is recognized upon the video delivered and confirmed by customer.
For events have co-organizer, the revenue recognition is similar the above under heading revenue related to event organizer but proportion based on agreed terms to the agreement with joint operations parties. Please refer to interest in joint operations paragraph in Note 2.
Design
Revenue from designed services is recognized over the time. The revenue generated from design 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 design services. The design services provide involve a series of tasks which are distinct and meet the criteria for recognizing revenue overtime. In addition, the Group concludes that the services provided each month are substantially similar and result in the transfer of substantially similar services to the clients each month. The Group recognizes revenues from design services on a monthly basis when it satisfies its performance obligations throughout the contract terms. Because the design works were performed by inhouse designer and/or monitored by in-house designer through external designer (value added services), the Company controls the specified designed services before that services are transferred to a customer and the Company will determine the selling price, and thus, the Company is principal instead of agent for design services.
Café income
Café income is recognized based on the nature of the entitlements provided to customers and sponsors. The café operations are typically integrated with themed exhibitions and sponsorship arrangements, and revenue streams include (i) rights to entry, (ii) rights to meals or merchandise, and (iii) exclusive functions or promotional entitlements.
For rights to entry and meals, where contracts grant customers or sponsors the right to attend exhibitions or receive a specified number of meals, the Group satisfies its performance obligation once such rights are made available, regardless of whether they are fully exercised. Revenue is recognized at the point-in-time when the rights are granted.
For exclusive functions and promotional rights, sponsorship arrangements often include venue use or promotional entitlements. These are recognized over-time as the exhibition or event occurs.
The Group does not control the preparation or delivery of meals, merchandise, or venue services, which are operated by third-party caterers and venue operators. Accordingly, the Group acts as an Agent under IFRS 15, with its performance obligation being to arrange for the provision of café services by third parties. Revenue is therefore recognized on a net basis, representing only the Group’s contractual share of profits or commission income, rather than the gross value of café sales.
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Recent Accounting Pronouncements
See the discussion of the recent accounting pronouncements contained in Note 2 to the audited consolidated financial statements, “Summary of Significant Accounting Policies”.
Quantitative and Qualitative Disclosures about Market Risk
Credit Risk
Financial instruments that potentially subject the Company to credit risk consist of cash equivalents and accounts receivable. Cash equivalents are maintained with high credit quality institutions, the composition and maturities of which are regularly monitored by management. The Hong Kong Deposit Protection Board pays compensation up to a limit of HKD800,000 if the bank with which an individual/a company hold its eligible deposit fails. As of March 31, 2025 and 2026, cash and bank balances of HKD17,135,719 and HKD20,457,347 was maintained at financial institutions in Hong Kong, of which none of its cash balance was subject to credit risk. However, if the individual bank balance is over HKD800,000, the excess will be subject to credit risk if the relevant bank fails. While management believes that these financial institutions are of high credit quality, it also continually monitors their credit worthiness.
For accounts receivable, the Company determines, on a continuing basis, the allowance for doubtful accounts based on the estimated realizable value. The Company identifies credit risk on a customer by customer basis. The information is monitored regularly by management. Concentration of credit risk arises when a group of customers having similar characteristics such that their ability to meet their obligations is expected to be affected similarly by changes in economic conditions.
The Company has determined the default event on a financial asset to be when internal and/or external information indicates that the financial asset is unlikely to be received, which could include default of contractual payments due for more than 90 days, default of interest due for more than 365 days or there is significant difficulty of the counterparty. To minimize credit risk, the Company has developed and maintained its credit risk grading to categorize exposures according to their degree of risk of default. The credit rating information is supplied by publicly available financial information and the Company’s own trading records to rate its major customers and other debtors.
As of March 31, 2025 and 2026, there were accounts and other receivables of HKD17,082,085 and HKD8,049,392, respectively. Three of customers as at March 31, 2026 (2025: three) are amounted to 10% or more of the total consolidated amounts.
Interest rate risk
As the Company has no significant interest-bearing assets, the Company’s income and operating cash flows are substantially independent of changes in market interest rates.
Economic and political risk
The Company’s major operations are conducted in Hong Kong. Accordingly, the political, economic, and legal environments in Hong Kong, as well as the general state of Hong Kong’s economy may influence the Company’s business, financial condition, and results of operations.
Liquidity risk
Liquidity risk is the risk that we will not be able to meet our financial obligations as they become due. Our policy is to ensure that we have sufficient cash to meet our liabilities when they become due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to our reputation. A key risk in managing liquidity is the degree of uncertainty in the cash flow projections. If future cash flows are fairly uncertain, the liquidity risk increases. Liquidity risk is controlled by the application of financial position analysis and monitoring procedures. When necessary, we will turn to financial institutions and related parties to obtain short-term funding to cover any liquidity shortage.
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Description and Analysis of Principal Components of Our Results of Operations for the years ended March 31, 2024 and 2025
The following table shows key components of our results of operations during the years ended March 31, 2024 and 2025.
| Year Ended March 31, | ||||||||
| 2024 | 2025 | |||||||
| HKD | HKD | |||||||
| Revenues | $ | 20,103,097 | $ | 45,352,618 | ||||
| Revenues, related party | 337,586 | 451,759 | ||||||
| Total Revenues, net | 20,440,683 | 45,804,377 | ||||||
| Costs and expenses: | ||||||||
| Cost of revenue | (11,360,489 | ) | (33,565,785 | ) | ||||
| Cost of revenue – related party | - | (264,349 | ) | |||||
| Selling, general and administrative expenses | (666,286 | ) | (7,319,454 | ) | ||||
| Research and development | - | (760,000 | ) | |||||
| Amortization | - | (2,560,667 | ) | |||||
| Impairment of rights of use assets | - | (111,136 | ) | |||||
| Depreciation | (294,083 | ) | (449,514 | ) | ||||
| Profit from operations | 8,119,825 | 773,472 | ||||||
| Other income/(expenses): | ||||||||
| Interest income | 22,995 | 44,840 | ||||||
| Finance costs | (246,262 | ) | (656,689 | ) | ||||
| Other income | 180,663 | 7,363,910 | ||||||
| Total other income/(expenses), net | (42,604 | ) | 6,752,061 | |||||
| Profit before income taxes | 8,077,221 | 7,525,533 | ||||||
| Income tax expense | (988,347 | ) | (1,100,000 | ) | ||||
| NET PROFIT | $ | 7,088,874 | 6,425,533 | |||||
The following discussion is based on our historical results of operations and may not be indicative of our future operating performance.
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Year Ended March 31, 2024 Compared to March 31, 2025
Revenue
We derive our revenue from the provision of event management services, sale of goods and ticketing, sponsorship and design services. Revenue from provision of event management services represented revenue derived from events planning, development and operation services. Sales of goods represented revenue derived from procurement and sales of goods/drinks to customers from events and non-events and ticketing represented tickets sold and used for events. Sponsorship income represented titleship for the events. Video production income represented revenue from video production at event requested by customers. Design services represented revenue from design services as requested by customers. The following table sets forth our revenue for the year ended March 31, 2024 and 2025:
| Year ended March 31, | ||||||||
| 2024 | 2025 | |||||||
| HKD | HKD | |||||||
| Provision of event management services | $ | 6,733,049 | $ | 4,423,413 | ||||
| Sales of goods and tickets | ||||||||
| Tickets | - | 9,731,700 | ||||||
| Sales of goods and cafe from events | 5,842,727 | 7,594,988 | ||||||
| Sales of goods and café from non-events | 5,616,637 | 7,977,732 | ||||||
| 11,459,364 | 25,304,420 | |||||||
| Sponsorship | - | 5,371,523 | ||||||
| Video production | - | 8,950,021 | ||||||
| Design and others | 2,248,270 | 1,755,000 | ||||||
| Total: | $ | 20,440,683 | $ | 45,804,377 | ||||
Our total revenue increased by approximately HK$25.3 million, or approximately 124.1%, to approximately HK$45.8 million for the year ended March 31, 2025 from approximately HK$20.4 million for the year ended March 31, 2024. This increase was mainly attributable to the increase of our event related income was because we started to act as event organizer/co-organizer for events during the year ended March 31, 2025, enhancing our revenue stream from events such as sales of tickets, sponsorship and video production requested by a customer.
Cost of revenues
| Year ended March 31, | ||||||||
| 2024 | 2025 | |||||||
| HKD | HKD | |||||||
| Sub-contracting fee from event facilitators | $ | 1,746,648 | $ | 7,980,804 | ||||
| Ticketing platform | - | 117,631 | ||||||
| Cost of goods sold for IP products | 5,068,822 | 8,950,189 | ||||||
| Staff costs | 1,746,232 | 5,131,158 | ||||||
| Royalty fee | 297,909 | 2,581,599 | ||||||
| Design and renovation | - | 4,124,635 | ||||||
| Equipment rental | - | 1,024,424 | ||||||
| Video production costs | - | 1,672,824 | ||||||
| Sponsorship commission | - | 116,696 | ||||||
| Other costs | 2,500,878 | 2,130,174 | ||||||
| Total: | $ | 11,360,489 | $ | 33,830,134 | ||||
For the year ended March 31, 2024 and 2025, our cost of revenues was mainly comprised of cost of goods sold for IP products, staff costs, subcontracting fees from event facilitators, royalty fees for short term use of IP, design and renovation, and other costs related to events. For the year ended March 31, 2024 and 2025, our cost of revenues amounted to approximately HK$11.4 million and HK$33.8 million, respectively. The increase in costs of revenue during the year ended March 31, 2025 was in line with the increase in revenue due to business expansion.
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General and Administrative expenses
The following table sets forth the breakdown of our general and administrative expenses for the years ended March 31, 2024 and 2025:
| Year ended March 31, | ||||||||
| 2024 | 2025 | |||||||
| HKD | HKD | |||||||
| Accounting fee | $ | 24,000 | $ | 113,000 | ||||
| Bank charges | 3,760 | 72,270 | ||||||
| Insurance expenses | 30,376 | 356,788 | ||||||
| Staff payroll costs | 232,956 | 1,411,500 | ||||||
| Listing fees | - | 3,503,862 | ||||||
| Legal and professional fees | - | 188,842 | ||||||
| Travelling expenses | - | 172,228 | ||||||
| Marketing fee for events | - | 541,965 | ||||||
| Office expenses | 329,360 | 296,346 | ||||||
| Warehouse rent | - | 216,036 | ||||||
| Sundries | 45,834 | 446,617 | ||||||
| Total: | $ | 666,286 | $ | 7,319,454 | ||||
Our general and administrative expenses amounted to approximately HK$0.67 million and approximately HK$7.32 million for the years ended March 31, 2024 and 2025, respectively. The increase was mainly due to (i) listing fees such as audit, legal and such fees incurred for IPO; (ii) the increase in staff costs due to increase in staff and insurance purchased as designated contribution to Ms. Seto; and (iii) business expansion during the year ended March 31, 2025.
Research and development
Research and development mainly represented research and development expenses incurred for our website and e-ticket platform. Research and development expenses amounted to nil and approximately HK$0.76 million, respectively, during the year ended March 31, 2024 and 2025.
Amortization
Amortization mainly represented amortization expenses incurred from licenses acquired for the events. Amortization expenses amounted to nil and approximately HK$2.56 million, respectively, during the year ended March 31, 2024 and 2025.
Impairment of rights of use assets
Impairment of rights of use assets mainly represented impairment made due to uncertainty on future economic benefits on relevant rights of use assets. Impairment of rights of use assets amounted to nil and approximately HK$0.11 million, respectively, during the years ended March 31, 2024 and 2025.
Depreciation
Depreciation mainly represented depreciation expenses incurred for equipment and right-of-use assets for office premises and motor vehicles. Depreciation amounted to approximately HK$0.29 million and approximately HK$0.45 million, respectively, during the years ended March 31, 2024 and 2025.
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Other Income/ (Expense), Net
The following table sets forth the breakdown of our other income/(expense) for the years ended March 31, 2024 and 2025:
| Year ended March 31 | ||||||||
| 2024 | 2025 | |||||||
| HKD | HKD | |||||||
| Government grant | $ | 178,124 | $ | - | ||||
| Bank interest income | 22,995 | 44,840 | ||||||
| Finance costs | (246,262 | ) | (656,689 | ) | ||||
| Gain on disposal of intangible assets | - | 6,145,711 | ||||||
| Gain on investment on event projects | - | 806,606 | ||||||
| Gain/(Loss) on early termination of leases | 2,539 | - | ||||||
| Sale of concert tickets and others | - | 411,593 | ||||||
| Total | $ | (42,604 | ) | $ | 6,752,061 | |||
The other income/(expenses) mainly represented government grant, disposal of intangible assets, gain on investment in event projects and sale of concert tickets. The increase was mainly due to the fact that there were disposal of intangible assets and the Group started to invest in event projects and sale of concert tickets during the year ended March 31, 2025. Finance costs represented the interest expenses for bank borrowings and finance lease during the years ended March 31, 2024 and 2025. The increase in finance costs was mainly attributable to the increase of bank borrowings during the year ended March 31, 2025.
Income Tax Expenses
During the years ended March 31, 2024 and 2025, the income tax expenses of approximately HK$0.99 million and HK$1.10 million, respectively were recognized. The increase during the year ended March 31, 2025 was mainly due to the tax loss from previous periods utilized during the year ended March 31, 2024.
Net Profit
As a result of the foregoing, our net profit for the years ended March 31, 2024 and 2025 amounted to approximately HK$7.09 million and approximately HK$6.43 million, respectively.
Liquidity and Capital Resources
Our liquidity and working capital requirements primarily relate to our operating expenses. Historically, we have met our working capital and other liquidity requirements primarily through cash generated from our operations. Going forward, we expect to fund our working capital and other liquidity requirements from various sources, including cash generated from our operations, loans from banking facilities, the net proceeds from this offering and other equity and debt financings as and when appropriate.
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Cash flows
The following table summarizes our cash flows for the years ended March 31, 2024 and 2025:
| Year ended March 31, | ||||||||
| 2024 | 2025 | |||||||
| HKD | HKD | |||||||
| Net cash provided by/(used in) operating activities | $ | 8,281,946 | $ | (15,992,733 | ) | |||
| Net cash used in investing activities | (110,860 | ) | (14,765,561 | ) | ||||
| Net cash provided by/(used in) financing activities | (4,682,217 | ) | 44,076,930 | |||||
| Net change in cash and cash equivalent | 3,488,869 | 13,318,636 | ||||||
| BEGINNING OF PERIOD | 328,214 | 3,817,083 | ||||||
| END OF PERIOD | $ | 3,817,083 | $ | 17,135,719 | ||||
Cash flows from operating activities
For the year ended March 31, 2025, our net cash used in operating activities was approximately HK$16.0 million, which primarily consisted of our net profit before tax of approximately HK$7.53 million, mainly adding back (i) the non-cash depreciation of right of use assets and equipment of approximately HK$0.45 million and finance costs of approximately HK$0.66 million, (ii) the impairment of approximately HK$0.11 million; (iii) the increase in amortization of licenses of approximately HK$2.56 million, (iv) the increase in gain on disposal of intangible assets of approximately HK$6.15 million and gain on investments of approximately HK$0.81 million; (v) increase in inventory of approximately HK$0.31 million, (vi) increase in account and other receivables of approximately HK$6.45 million for receivables not yet settled as at March 31, 2025, (vii) the increase in deposits and prepayments of approximately HK$10.99 million, (viii) the increase in amount due from related parties of approximately HK$0.93 million, (ix) the increase in Amount due from joint operation parties of HK$1.76 million, (x) decrease in trade and other payable of approximately HK$0.58 million, excluded the other payable to investment partner, (xi) the decrease in contract liabilities of approximately HK$3.57 million, (xii) the decrease in contract assets for upcoming events of approximately HK$4.28 million.
For the year ended March 31, 2024, our net cash generated from operating activities was approximately HK$8.3 million, which primarily consisted of our net profit before tax of approximately HK$8.1 million, mainly adding back (i) the non-cash depreciation of right of use assets of approximately HK$0.29 million and finance costs of approximately HK$0.25 million, (ii) the increase in contract assets for upcoming events of approximately HK$4.3 million, increase in accounts receivable of approximately HK$0.8 million for receivables not yet settled as at March 31, 2024 and was partially offset by (iii) increase in trade and other payable of approximately HK$1.4 million for payables incurred for upcoming events and increase in contract liabilities of approximately HK$3.6 million due to advanced payment from customer for provision of asset management services to be performed subsequent to the balance sheet date.
Cash flows from investing activities
For the year ended March 31, 2025, our net cash used in investing activities was approximately HK$14.77 million which was mainly due to the increase in interest income of approximately HK$0.04 million, proceeds from disposal of intangible assets of approximately HK$1.15 million, proceeds from investment on event projects of approximately HK$1.8 million, and offset by the increase in acquisition of intangible assets of approximately HK$9.27 million and cash paid for investments of approximately HK$8.49 million.
For the year ended March 31, 2024, our net cash used in investing activities was approximately HK$0.11 million, for the purchase of equipment.
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Cash flows from financing activities
For the year ended March 31, 2025, our net cash provided by financing activities was approximately HK$44.08 million which was mainly due to the increase of proceeds from a shareholder of HK$9.18 million, proceeds from investment partner of approximately HK$30.1 million, the increase in bank overdraft of HK$15.14 million and the increase in bank borrowings of approximately of HK$3.70 million, and partially offset by the payments to a shareholder of approximately HK$4.39 million and the repayment of bank overdrafts of approximately HK$7.79 million.
For the year ended March 31, 2024, our net cash used in financing activities was approximately HK$4.7 million which was mainly due to the net increase of amount due from a shareholder of HK$3.7 million and the repayment of bank borrowings and lease liabilities.
Capital commitments
The Company currently is not aware of any legal proceedings or claims that it believes will have, individually or in the aggregate, a material adverse effect on its business, financial condition, operating results, or cash flows.
Commitment on investments for event projects
The Company signed few investments for event projects as at March 31, 2025 and there are outstanding commitments for investments of HK$12,798,092.
Except for the above, as of March 31, 2024 and 2025, the Company has no material commitments or contingencies.
Key Factors Affecting our Results of Operations
Our financial condition and results of operation have been and will continue to be affected by a number of factors, many of which may be beyond our control, including those factors set out in the section headed ‘‘Risk Factors’’ in this prospectus. These factors include the following:
| ● | Economic conditions of Hong Kong and Asian markets: our revenues may significantly be affected by economic conditions of places for the events to be convened for events and sold of goods. A slowdown in the economy, such as deterioration of overall economic sentiment may decrease the willingness of customers for the events and purchased of IP products, which in turn may decrease their need on overall our services and products, and affect our operating business performance; | |
| ● | Dependence on key customer: our revenues may significantly be affected by the demands of our key customer due to market competitions such as pricing strategy offered by competitors; | |
| ● | Limited vendors for events facilitators and IP products: our costs for goods to be sold for IP products may significantly be affected due to limited vendors for events facilitators and IP products; | |
| ● | Dependence on co-organizer/joint operation parties: our revenue and costs for event may significantly be affected due to co-organizer/joint operation parties performance; | |
| ● | Ability to manage staff costs: any upward changes in our staff costs that are not in proportion to an increase in our revenues would impact our results of operations negatively; |
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Off-Balance Sheet Transactions
As of March 31, 2025, we have not entered into any material off-balance sheet transactions or arrangements.
Except for commitments disclosed above, we have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties. In addition, we have not entered into any derivative contracts that are indexed to our own shares and classified as shareholders’ equity, or that are not reflected in our consolidated financial statements. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. Moreover, we do not have any variable interest in an unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or research and development services with us.
Critical Accounting Policies and Estimates
Our financial statements and accompanying notes have been prepared in accordance with IFRS accounting standards. The preparation of these financial statements and accompanying notes requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis of making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We have identified certain accounting policies that are significant to the preparation of our financial statements. These accounting policies are important for an understanding of our financial condition and results of operation. Critical accounting policies are those that are most important to the portrayal of our financial conditions and results of operations and require management’s difficult, subjective, or complex judgment, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods. Certain accounting estimates are particularly sensitive because of their significance to financial statements and because of the possibility that future events affecting the estimate may differ significantly from management’s current judgments. While our significant accounting policies are more fully described in Note 2 to the consolidated financial statements included elsewhere in this prospectus, we believe the following critical accounting policies involve the most significant estimates and judgments used in the preparation of our financial statements.
| ● | Interests in Joint Operations |
| During the year ended March 31, 2025, the Group entered into joint operation arrangement for certain events. In return, the Group will have project sharing at agreed portion. A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the assets, and obligations for the liabilities, relating to the arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control. | |
| The Group recognizes in relation to its interest in a joint operation: |
| ● | its assets, including its share of any assets held jointly; | |
| ● | its liabilities, including its share of any liabilities incurred jointly; | |
| ● | its revenue from the sale of its share of the output arising from the joint operation; | |
| ● | its share of the revenue from the sale of the output by the joint operation; and | |
| ● | its expenses, including its share of any expenses incurred jointly. |
| The assets, liabilities, revenues and expenses relating to the Group’s interest in a joint operation are accounted for in accordance with the relevant IFRSs such as IFRS 11 applicable to the particular assets, liabilities, revenues and expenses, and recognized based on the profit sharing ratio on each event. The amount due from/(to) joint operation parties will be recognized based on payment/receipt by the Group and joint operation accordingly. |
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| ● | Investment on event projects |
Financial assets are classified, at initial recognition, as subsequently measured at amortized cost, fair value through other comprehensive income, and fair value through profit or loss. The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow characteristics and the Group’s business model for managing them. The Group initially measures a financial asset at its fair value plus in the case of a financial asset not at fair value through profit or loss, transaction costs. In order for a financial asset to be classified and measured at amortized cost or fair value through other comprehensive income, it needs to give rise to cash flows that are solely payments of principal and interest (“SPPI”) on the principal amount outstanding. Financial assets with cash flows that are not SPPI are classified and measured at fair value through profit or loss, irrespective of the business model. The Group’s business model for managing financial assets refers to how it manages its financial assets in order to generate cash flows. The business model determines whether cash flows will result from collecting contractual cash flows, selling the financial assets, or both. Financial assets classified and measured at amortized cost are held within a business model with the objective to hold financial assets in order to collect contractual cash flows, while financial assets classified and measured at fair value through other comprehensive income are held within a business model with the objective of both holding to collect contractual cash flows and selling. Financial assets which are not held within the aforementioned business models are classified and measured at fair value through profit or loss.
The investment on event projects are recorded at cost less impairment similar to equity accounting method because of absence of readily available market data. The investment on event projects represented monetary investment on event projects which the Group does not involve event operations and has return on investments based on percentage of amounts invested in the event over net profit or loss of the event in accordance with binding agreements. The management believe the carrying amounts of this investment approximates is fair value. All investment on events projects are expected to be completed within one year and such investment amounts are presented as current asset.
| ● | Revenue Recognition |
The Company adopted Accounting Standards Revenue from Contracts with Customers (IFRS 15), which provided the following overview of how revenue is recognized from the Company’s contracts with customers: The Company recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services.
Step 1: Identify the contract(s) with a customer.
Step 2: Identify the performance obligations in the contract.
Step 3: Determine the transaction price – The transaction price is the amount of consideration in a contract to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer.
Step 4: Allocate the transaction price to the performance obligations in the contract – Any entity typically allocates the transaction price to each performance obligation on the basis of the relative standalone selling prices of each distinct good or service promised in the contract.
Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation – An entity recognizes revenue when (or as) it satisfies a performance obligation by transferring a promised good or service to a customer (which is when the customer obtains control of that good or service). The amount of revenue recognized is the amount allocated to the satisfied performance obligation. A performance obligation may be satisfied at a point in time (typically for promises to transfer goods to a customer) or over time (typically for promises to transfer service to a customer).
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Revenue related to event planner
The Company identified the following three types of performances under the event management contract: i) events planning, design, development and operation, or the Event Management Services; ii) Procurement and sales of goods (including but not limited to IP goods, drinks, tickets) to customer; iii) sponsorship commission income. The Company’s revenue is derived from contracts with customers in the rendering of Event Management Services, and as such, the revenue recognized depicts the transfer of promised services to its customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those services when the events start. The Company considers the terms of the contract and all relevant facts and circumstances when applying this guidance. The duration of the service period is usually less than one year. The Company recognize Event Management Services revenue when the event starts and during the event period ratably because: i) Based on the contract terms, none of parties that entered into the contract can terminate, and find other vendors to substitute the services; ii) And the customer benefits from our service beginning at the point of the event started to the event completion. The Company generally requires the customers to make the advanced payment at certain percentage of the total contract value upon signing the agreement. Contract liabilities are recorded when the advanced payment is received from the customers before all of the relevant criteria for revenue recognition has been met. The event management contract price is lump sum basis, consisted of sales of goods and Event Management Services consideration. For allocation of transaction price of sales of goods and Event Management Services, the company applied cost plus margin method to determine the sales of goods revenue based on standalone sales of goods gross margin, and allocate the remaining provision consideration into event management services. For sponsorship commission income, there is specified percentage calculation based on sponsorship fee raised (if any).
For sponsorship commission income, it is sponsorship for the whole event period and recognized over the event period align with Event Management Services.
Revenue related to event organizer
The Company obtained IP directly from IP owner and authorized to convene events as organizer or co-organizer. The Company identified the following four types of performances under the event: i) sales of event tickets for the events; ii) Procurement and sales of goods (including but not limited to IP goods and drinks) to customer; iii) sponsorship commission income and (iv) ad hoc requested by customer say video production for the event
The Company sold the event tickets through on site or sales platform. For event tickets income, it is recognized upon the provision of events.
The Company sold the goods at the event. Revenue from sales of goods is recognized at a point in time when control of the goods has been transferred to the customers. Control is primarily evidenced by taking physical possession and inventory risk of the goods. The Group controls the goods and determines the selling price or allocated selling price (under event management services contracts) of the good before the good is transferred to the customers.
For sponsorship commission income, there is specified percentage calculation based on sponsorship fee raised (if any). For sponsorship commission income, it is sponsorship for the whole event period and recognized over the event period align with Event Management Services.
For ad hoc income say video production, it is recognized upon the video delivered and confirmed by customer.
For events have co-organizer, the revenue recognition is similar the above under heading revenue related to event organizer but proportion based on agreed terms to the agreement with joint operations parties. Please refer to interest in joint operations paragraph in Note 2.
Design
Revenue from designed services is recognized over the time. The revenue generated from design 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 design services. The design services provide involve a series of tasks which are distinct and meet the criteria for recognizing revenue overtime. In addition, the Group concludes that the services provided each month are substantially similar and result in the transfer of substantially similar services to the clients each month. The Group recognizes revenues from design services on a monthly basis when it satisfies its performance obligations throughout the contract terms. Because the design works were performed by inhouse designer and/or monitored by in-house designer through external designer (value added services), the Company controls the specified designed services before that services are transferred to a customer and the Company will determine the selling price, and thus, the Company is principal instead of agent for design services.
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Recent Accounting Pronouncements
See the discussion of the recent accounting pronouncements contained in Note 2 to the audited consolidated financial statements, “Summary of Significant Accounting Policies”.
Quantitative and Qualitative Disclosures about Market Risk
Credit Risk
Financial instruments that potentially subject the Company to credit risk consist of cash equivalents and accounts receivable. Cash equivalents are maintained with high credit quality institutions, the composition and maturities of which are regularly monitored by management. The Hong Kong Deposit Protection Board pays compensation up to a limit of HKD500,000 if the bank with which an individual a company hold its eligible deposit fails. As of March 31, 2024 and 2025, cash and bank balances of HKD3,817,083 and HKD17,135,719 was maintained at financial institutions in Hong Kong, of which none of its cash balance was subject to credit risk. However, if the individual bank balance is over HKD500,000, the excess will be subject to credit risk if the relevant bank fails. While management believes that these financial institutions are of high credit quality, it also continually monitors their credit worthiness.
For accounts receivable, the Company determines, on a continuing basis, the allowance for doubtful accounts based on the estimated realizable value. The Company identifies credit risk on a customer by customer basis. The information is monitored regularly by management. Concentration of credit risk arises when a group of customers having similar characteristics such that their ability to meet their obligations is expected to be affected similarly by changes in economic conditions.
The Company has determined the default event on a financial asset to be when internal and/or external information indicates that the financial asset is unlikely to be received, which could include default of contractual payments due for more than 90 days, default of interest due for more than 365 days or there is significant difficulty of the counterparty. To minimize credit risk, the Company has developed and maintained its credit risk grading to categorize exposures according to their degree of risk of default. The credit rating information is supplied by publicly available financial information and the Company’s own trading records to rate its major customers and other debtors.
As of March 31, 2024 and 2025, there were accounts and other receivables of HKD826,687 and HKD17,082,085, respectively. Three of customers as at March 31, 2025 (2024: Two) are amounted to 10% or more of the total consolidated amounts.
Interest rate risk
As the Company has no significant interest-bearing assets, the Company’s income and operating cash flows are substantially independent of changes in market interest rates.
Economic and political risk
The Company’s major operations are conducted in Hong Kong. Accordingly, the political, economic, and legal environments in Hong Kong, as well as the general state of Hong Kong’s economy may influence the Company’s business, financial condition, and results of operations.
Liquidity risk
Liquidity risk is the risk that we will not be able to meet our financial obligations as they become due. Our policy is to ensure that we have sufficient cash to meet our liabilities when they become due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to our reputation. A key risk in managing liquidity is the degree of uncertainty in the cash flow projections. If future cash flows are fairly uncertain, the liquidity risk increases. Liquidity risk is controlled by the application of financial position analysis and monitoring procedures. When necessary, we will turn to financial institutions and related parties to obtain short-term funding to cover any liquidity shortage.
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ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND KEY EMPLOYEES
The following table sets forth the names, ages and titles of our directors, executive officers and key employees:
| Name | Age | Title | ||
| Ms. Seto Wai Yue | 43 | Chief Executive Officer and Director | ||
| Ms. Tse Sze Man | 44 | Director | ||
| Mr. Lee Wai Kit | 36 | Chief Financial Officer | ||
| Ms. Tan Cheung | 36 | Independent Director and Chairman of Audit Committee | ||
| Ms. Lui Yi Sin, Edith | 44 | Independent Director and Chairman of Compensation Committee | ||
| Ms. Lee Wing Yin | 40 | Independent Director and Chairman of Nomination Committee | ||
| Mr. Luk Kai Chung | 41 | General Manager |
No arrangement or understanding exists between any such Director or officer and any other persons pursuant to which any Director or executive officer was elected as a Director or executive officer. Our Directors are elected annually and serve until their successors take office or until their death, resignation or removal. The executive officers serve at the pleasure of the Board of Directors.
Directors and Executive Officers
Ms. Seto Wai Yue
Ms. Seto, aged 43, founded our Group in 2016. She is our founder, Chief Executive Officer and Director, and she is responsible for the overall business development such as overseeing all aspects of our Group’s operations, strategic planning and formulation of corporate strategies.
Ms. Seto has a wealth of experience and expertise in running and managing her own businesses. In May 2012, Ms. Seto founded her first venture named The Stairs, which was a one-stop luxury comprehensive store. As the founder, she was responsible for the development and execution of the company’s business strategies as well as the company’s financial performance. In the same year, she sold her equity interest in The Stairs, and acquired a business named 2%. She revamped the brand by building a new group of young, energetic and enterprising team, and turned the company’s business from loss to profit.
Prior to founding our Group, she had a joint venture with a well-known cartoon character brand between January 2012 to December 2016, where she was primarily responsible for the growth and development of the brand in the Hong Kong market such as marketing merchandise and clothing of the well-known cartoon character, and organizing themed restaurant events and shopping mall exhibitions. In October 2018, she co-founded a Taiwanese bubble tea business in Hong Kong. As the co-founder, she was responsible for business development such as collaborating with established brands, and brand expansions in Hong Kong, Taiwan, Malaysia, Canada.
Ms. Seto received her bachelor’s of arts degree in clothing and textile retail management from The Hong Kong Polytechnic University in 2004.
Ms. Tse Sze Man
Ms. Tse is our Director. Ms. Tse is responsible for the overall operation and management of our Group’s business and formulation of our business plans and growth strategies.
Ms. Tse has been the Head of the Design & Merchandising Team at Trendic International Limited since August 2022. She is responsible for preparing the budget plans for merchandising, liaising with local and overseas project managers for design and merchandising issues and monitoring merchandise sales reports and product feedback to increase sales profits. Further, Ms. Tse monitors her team to ensure compliance with merchandise development and bulk production schedules. From November 2016 and August 2022, Ms. Tse was the Personal Assistant to the Managing Director at Shu Talk Branding Company Limited. She was in charge of handling personal and business matters and providing all-rounded secretarial support to the firm’s Directors. Ms. Tse also prepared project proposals for business purposes and assisted with monitoring the merchandising status of the firm. Between September 2014 and August 2016, Ms. Tse was the Assistant Product Development Manager at Dizen Limited (2% Group). Ms. Tse primarily coordinated with the in-house designer to facilitate product development and technical support, prepared for tradeshows and fashion shows and communicated with the merchandising, retail and marketing departments to evaluate feedback in light of market demand.
Ms. Tse has over 15 years of experience in the design and merchandising industry. She obtained a BA (Hons) in Fashion and Textiles from the Hong Kong Polytechnic University in 2005.
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Independent Directors
Ms. Tan Cheung
Ms. Tan Cheung is our Independent Director, serving as the chairman of the audit committee and as a member of the compensation committee and nomination committee.
Ms. Cheung joined Roma Risk Advisory Limited in January 2020. Currently, she is the associate director where she leads a team of risk and ESG advisory professionals to provide comprehensive services for a diverse portfolio of listed and IPO clients, as well as non-governmental organizations. She is also responsible for directing the implementation of internal control enhancement projects including the development of policies, procedures and monitoring mechanism; and in guiding clients in establishing ESG frameworks, policies and reporting mechanisms to align with evolving regulations and best practices. Prior to joining Roma Risk Advisory Limited, Ms. Cheung was with PricewaterhouseCoopers Limited from August 2016 to January 2020 and her last position was senior consultant.
She was responsible for performing tax analysis for private equity funds and hedge funds and the corresponding tax treatments for US tax purposes; and complying with company risk management procedures upon new client acceptances and perform anti-money laundering procedures for non-assurance clients.
Ms. Cheung received both her bachelor’s degree and master’s degree in accounting from St. Francis College, New York in December 2014. Ms. Cheung is a certified public accountant of the Hong Kong Institute of Certified Public Accounts and a European Federation of Financial Analysts Societies (EFFAS) certified ESG analyst.
Ms. Lui Yi Sin, Edith
Ms. Lui Yi Sin, Edith is our Independent Director, serving as the chairman of the compensation committee and as a member of the audit committee and nomination committee.
Ms. Lui has been the account manager at Ho Wai Printing and Publishing Co. Ltd. since December 2013. She is responsible for coordinating with customers and suppliers for order processing; and creating and maintaining a positive and long-term relationship with all customers. Between October 2012 to July 2013, Ms. Lui was the front desk administrator at ISF Academy. Ms. Lui was responsible for handling administrative work and other ad-hoc support duties such as organizing exhibitions, school events and other activities. Between August 2008 to December 2008, she was the data entry clerk at PolyVision, where she was primarily responsible for handling calls and processing day-to-day data entry activities, assisting in date consolidation and report generation and maintaining a functional documentation and filing system.
Ms. Lui received her bachelor’s degree in business economics from University of California at Santa Barbara in December 2006.
Ms. Lee Wing Yin
Ms. Lee Wing Yin, or Ms. Lee is our Independent Director, serving as the chairman of the nomination committee and as a member of the audit committee and compensation committee.
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Ms. Lee co-founded Golden Lion Security (HK) Ltd., a venture specializing in Li Heung Tea brand creation and operation in January 2024. As the co-founder, she is primarily responsible for overseeing product research and development and implementing innovative marketing strategies and attending targeted outreach and networking events to grow the company’s customer base and increase company’s revenue. Ms. Lee is also currently the marketing director at Asian Express Ltd and has been serving this position since September 2023. She leads a team of marketing professionals to develop and execute comprehensive marketing campaigns and has achieved significant growth in brand awareness and market share through targeted public relations initiatives.
Ms. Lee commenced her undergraduate studies in communications and media at Macquarie University before completing a Bachelor of Media Studies with Journalism and Communications at Middlesex University in August 2008.
Key Employees
General Manager
Mr. Luk Kai Chung
Mr. Luk Kai Chung, Mr. Luk, is our General Manager and he is responsible for overseeing the day-to-day operations of the company. He serves as the bridge between upper-level management and front-line employees, ensuring that the organization functions smoothly and efficiently.
Between August 2013 and August 2016, Mr. Luk was the Business Development Manager at Dizen Limited (2% Group). Mr. Luk’s roles included analyzing the context of the macro-environment and assisting with market strategies with the Director, managing 7 store locations and 25 frontline staff members to achieve sales targets and maintain stock levels, and working closely with the Visual Merchandising and Marketing Departments. Mr. Luk further assumed administrative roles by supervising activities related to office administration such as fixed asset management and supplies procurement. Between July 2009 and June 2013, Mr. Luk was the Assistant Manager at Conson Business Limited. Mr. Luk’s roles included providing executive assistance to the General Manager in charge of daily operations, managing operations including ensuring staff service standards and handling complaints and developing policies and administering internal systems. Mr. Luk was also in charge of facilitating and maintaining business relations with clients and employees.
Mr. Luk obtained a Foundation Certificate in Life Coaching with a Distinction from the University of Hong Kong School of Professional and Continuing Education in 2012, and a Certificate in Sales and Account Management from the Hong Kong Management Association in 2010. Mr. Luk previously obtained a Bachelor of Arts in Marketing from the University of Portsmouth in 2008 and an Associate Degree in Business from the Hong Kong Polytechnic University Hong Kong Community College in 2006.
Chief Financial Officer
Mr. Lee Wai Kit
Mr. Lee Wai Kit, or Mr. Lee is our Chief Financial Officer. Mr. Lee is responsible for the following matters relating to our Group
| ● | Overseeing the financial functions, tax and corporate secretarial matters of our Group; | |
| ● | Financial reporting of our Company; and | |
| ● | Preparation of budget and financial forecasts. |
Mr. Lee has over 12 years of comprehensive experience in auditing and accounting services. He possesses in-depth knowledge of U.S. and Hong Kong Listing Rules, taxation regulations, and financial reporting standards. Mr. Lee began his career at a mid-tier CPA firm in 2013, where he developed a robust foundation in audit practices. From 2017 to 2023, he served at KPMG Hong Kong and subsequently advanced to the role of an Audit Manager. During his tenure, Mr. Lee led multiple IPO engagements and managed audits for a diverse portfolio of companies listed in both Hong Kong and the United States. Prior to joining the Company, Mr. Lee served as an Associate Director at Grandlink CPA Limited from 2023 to 2025, specializing in providing audit, accounting advisory, and financial due diligence services.
Mr. Lee received his bachelor degree in Business Administration (Honours) in Accountancy from the City University of Hong Kong in 2013. Mr. Lee is a certified public accountant of the Hong Kong Institute of Certified Public Accountants.
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Family Relationships
There is no family relationship among any of our directors, executive officers, independent directors and key employees.
Board Diversity
We seek to achieve Board diversity through the consideration of a number of factors when selecting the candidates to our Board, including, but not limited to, gender, skills, age, professional experience, knowledge, cultural and educational background, ethnicity and length of service. The ultimate decision regarding the appointment will be based on merit and the contribution that the selected candidates will bring to our Board:
Board Diversity Matrix (as of the date of this Annual Report)
| Female | Male | Non-Binary | Did Not Disclose Gender | |||||
| Part I: Gender Identity | ||||||||
| Directors | 5 | - | - | - | ||||
| Part II: Demographic Background | ||||||||
| African American or Black | - | - | - | - | ||||
| Alaskan Native or Native American | - | - | - | - | ||||
| Asian | 5 | - | - | - | ||||
| Hispanic or Latino | - | - | - | - | ||||
| Native Hawaiian or Pacific Islander | - | - | - | - | ||||
| White | - | - | - | - | ||||
| LGBTQ+ | - | - | - | - | ||||
| Did Not Disclose Demographic Background | - | - | - | - |
Committees of the Board of Directors
Our board of directors has established an audit committee, a compensation committee and a nomination committee. The board of directors may also establish other committees from time to time to assist our Company and the board of directors. Each committee’s charter will be available on our website at http://www.trendicint.com.
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Audit committee
Ms. Cheung, Ms. Lui and Ms. Lee serve on the audit committee, chaired by Ms. Cheung. Our board of directors has determined that each member of the audit committee is “independent” for audit committee purposes as that term is defined by the rules of the SEC and the Nasdaq. Our board of directors has designated Ms. Cheung as an “audit committee financial expert,” as defined under the applicable rules of the SEC. The audit committee’s responsibilities include:
| ● | appointing, approving the compensation of, and assessing the independence of our independent registered public accounting firm; |
| ● | pre-approving auditing and permissible non-audit services, and the terms of such services, to be provided by our independent registered public accounting firm; |
| ● | reviewing the overall audit plan with our independent registered public accounting firm and members of management responsible for preparing our financial statements; |
| ● | reviewing and discussing with management and our independent registered public accounting firm our annual and quarterly financial statements and related disclosures as well as critical accounting policies and practices used by us; |
| ● | coordinating the oversight and reviewing the adequacy of our internal controls over financial reporting; |
| ● | establishing policies and procedures for the receipt and retention of accounting-related complaints and concerns; recommending, based upon the audit committee’s review and discussions with management and our independent registered public accounting firm, whether our audited financial statements shall be included in our Annual Report on Form 20-F; |
| ● | monitoring the integrity of our financial statements and our compliance with legal and regulatory requirements as they relate to our financial statements and accounting matters; |
| ● | reviewing all related person transactions for potential conflict of interest situations and approving all such transactions; and |
| ● | reviewing earnings releases. |
Compensation committee
Ms. Cheung, Ms. Lui and Ms. Lee serve on the compensation committee, chaired by Ms. Lui. Our board of directors has determined that each member of the compensation committee is “independent” as defined in the applicable Nasdaq rules. The compensation committee’s responsibilities include:
| ● | evaluating the performance of our chief executive officer in light of our company’s corporate goals and objectives and based on such evaluation: (i) recommending to the board of directors the cash compensation of our chief executive officer, and (ii) reviewing and approving grants and awards to our chief executive officer under equity-based plans; |
| ● | reviewing and recommending to the board of directors the cash compensation of our other executive officers; |
| ● | reviewing and establishing our overall management compensation, philosophy and policy; |
| ● | overseeing and administering our compensation and similar plans; |
| ● | reviewing and approving the retention or termination of any consulting firm or outside advisor to assist in the evaluation of compensation matters and evaluating and assessing potential and current compensation advisors in accordance with the independence standards identified in the applicable Nasdaq rules; |
| ● | retaining and approving the compensation of any compensation advisors; |
| ● | reviewing and approving our policies and procedures for the grant of equity-based awards; |
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| ● | reviewing and recommending to the board of directors the compensation of our directors; and |
| ● | preparing the compensation committee report required by SEC rules, if and when required. |
Nomination committee
Ms. Cheung, Ms. Lui and Ms. Lee serve on the nomination committee, which is chaired by Ms. Lee. Our board of directors has determined that each member of the nomination committee is “independent” as defined in the applicable Nasdaq rules. The nomination committee’s responsibilities include:
| ● | developing and recommending to the board of directors criteria for board and committee membership; |
| ● | establishing procedures for identifying and evaluating director candidates, including nominees recommended by stockholders; and |
| ● | reviewing the composition of the board of directors to maintain that it is composed of members containing the appropriate skills and expertise to advise us. |
While we do not have a formal policy regarding board diversity, our nomination committee and board of directors will consider a broad range of factors relating to the qualifications and background of nominees, which may include diversity (including, but not limited to race, gender or national origin). Our nomination committee’s and board of directors’ priority in selecting board members is identification of persons who will further the interests of our shareholders through their established record of professional accomplishment, the ability to contribute positively to the collaborative culture among board members, knowledge of our business, understanding of the competitive landscape and professional and personal experience and expertise relevant to our growth strategy.
Controlled Company
As of the date of this Annual Report, Ms. Seto, our major shareholder, beneficially owns 31.42% of our total issued and outstanding Class A Ordinary Shares and 100% of our outstanding Class B Ordinary Shares, representing in aggregate 46.50% of the total voting power. However, we are no longer a “controlled company” as defined under Nasdaq Listing Rule 5615(c), because our major shareholder no longer holds more than 50% of the voting power for the election of directors. Accordingly, we are now subject to the Nasdaq corporate governance requirements applicable to non-controlled companies. As a result, shareholders now have the protections associated with those requirements, including the majority-independent board and committee independence standards.
Because we are no longer a controlled company, the exemptions previously available under Nasdaq rules no longer apply. These exemptions had included:
| ● | an exemption from the rule that a majority of our board of directors must be independent directors; |
| ● | an exemption from the rule that the compensation of our chief executive officer must be determined or recommended solely by independent directors; and |
| ● | an exemption from the rule that our director nominees must be selected or recommended solely by independent directors. |
Controlled-company status does not affect audit committee requirements, and now that the company is no longer controlled, it should describe compliance with the full Nasdaq board and committee independence standards rather than saying it does not intend to rely on the exemptions.
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Foreign Private Issuer Status
The Nasdaq Stock Market Rules include certain accommodations in the corporate governance requirements that allow foreign private issuers, such as us, to follow “home country” corporate governance practices in lieu of the otherwise applicable Nasdaq corporate governance standards. The application of such exceptions requires that we disclose each Nasdaq corporate governance standard that we do not follow and describe the Cayman Islands corporate governance practices we do follow in lieu of the relevant Nasdaq corporate governance standard. We currently follow Cayman Islands corporate governance practices in lieu of the corporate governance requirements of the Nasdaq in respect of the following:
| ● | provide an annual certification by our chief executive officer that he or she is not aware of any non-compliance with any corporate governance rules of the Nasdaq; |
| ● | have regularly scheduled executive sessions with only independent directors; and |
| ● | the Shareholder Approval Requirements under Section 5635 of the Nasdaq Stock Market Rules. There will be no requirement for the Company to obtain Shareholder approval prior to an issuance of securities in connection with (a) the acquisition of stock or assets of another company; (b) equity-based compensation of officers, directors, employees or consultants; (c) a change of control; and (d) transactions other than public offerings. |
Corporate governance
As of the date of this Annual Report, we intend to adopt a formal policy regarding board diversity and our nominating and corporate governance and Board will consider a broad range of factors relating to the qualifications and background of nominees, which may include diversity (not limited to race, gender or national origin). Our nominating and corporate governance committee, along with the Board, prioritize the selection of board members who can advance shareholder interests by showcasing a proven track record of professional achievements. Additionally, they should possess the capability to foster a collaborative environment among board members, have a deep understanding of our business and the competitive landscape, and bring forth professional and personal experiences that align with our growth strategy.
Code of Conduct and Code of Ethics
As of the date of this Annual Report, we intend to adopt a written code of business conduct and ethics that applies to our directors, officers and employees, including our chief executive officer, chief financial officer, principal accounting officer or controller or persons performing similar functions, which is located at http://www.trendicint.com. The information on our website is deemed not to be incorporated in this Annual Report. We intend to disclose any amendments to the code of ethics, and any waivers of the code of ethics or the code of conduct for our directors, executive officers and senior finance executives, on our website to the extent required by applicable U.S. federal securities laws and Nasdaq corporate governance rules.
Compensation of Directors and Key Employees
The following table summarizes all compensation received by our directors and our key employees during the years ended March 31, 2024 and 2025, and 2026.
Bonuses are not payable pursuant to a bonus plan, but rather are made on a discretionary basis in consideration of contributions and profitability of the Company for the year under which such bonus was paid.
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Summary Compensation Table
| Position | Aggregate Salary (HK$) | Aggregate Compensation Paid Bonus (HK$) | Aggregate Other Compensation (HK$) | Aggregate amount of Salary, Compensation Paid Bonus and other Compensation (HK$) | ||||||||||||
| All directors (For the year ended 2026) | 1,876,000 | 40,500 | 0 | 1,916,500 | ||||||||||||
| (For the year ended 2025) | 1,662,000 | 94,000 | 275,373 | 2,031,373 | ||||||||||||
| (For the year ended 2024) | 430,500 | 36,430 | 0 | 466,930 | ||||||||||||
| All key employees (For the year ended 2026) | 890,000 | 45,000 | 0 | 935,000 | ||||||||||||
| (For the year ended 2025) | 388,000 | 50,000 | 0 | 438,000 | ||||||||||||
| (For the year ended 2024) | 252,000 | 4,000 | 0 | 256,000 | ||||||||||||
Insurance entered into by Trendic for the benefit of Ms. Seto
On August 30, 2024, Trendic entered into a savings insurance plan, or Insurance Plan, with Manulife (International) Limited, with the beneficiary of the Insurance Plan being the estate of Ms. Seto. Trendic made an initial payment of US$35,212 upon entering into the Insurance Plan and, under the terms of the Insurance Plan, Trendic will make four additional payments of US$40,000 annually. The notional / guaranteed maturity amount of the Insurance Plan is US$200,000.
Independent Directors’ Agreements
Each of our independent directors has entered into a director’s agreement with the Company effective on 30 June, 2025. The terms and conditions of the directors’ agreements are similar in all material aspects. Each director’s agreement is for an initial term of one year and will continue until the director’s successor is duly elected and qualified. Each director will be up for re-election each year at the annual shareholders’ meeting and, upon re-election, the terms and provisions of his or her director’s agreement will remain in full force and effect. Any director’s agreement may be terminated for any or no reason by the director or at a meeting called expressly for that purpose by a vote of the shareholders holding more than 50% of the Company’s issued and outstanding Class A Ordinary Shares entitled to vote.
Under the directors’ agreements, the initial monthly director fees that will be payable to each of our independent directors is HK$10,000. Such director fees are payable in cash on a monthly basis.
In addition, our independent directors will be entitled to participate in such share option scheme as may be adopted by the Company, as amended from time to time. The number of options granted, and the terms of those options will be determined from time to time by a vote of the board of directors; provided that each director shall abstain from voting on any such resolution or resolutions relating to the grant of options to that director.
Other than as disclosed above, none of our directors has entered into a service agreement with our Company or any of our subsidiaries that provides for benefits upon termination of employment.
Employment Agreements
We have entered into employment agreements with each of our directors. Each employment agreement will continue indefinitely subject to termination by either party upon one month’s written notice.
Employment Agreement between Ms. Seto and Trendic
As of the date of this Annual Report, Trendic entered into an Employment Agreement with Ms. Seto. The agreement provides for an annual base salary of HK$1,200,000. Ms. Seto’s employment will continue indefinitely, subject to termination by either party to the agreement upon one month’s prior written notice or the equivalent salary in lieu of such notice. The agreement also provides that Ms. Seto shall not, during the term of the agreement and for 12 months after cessation of employment, carry on business in competition with the Group.
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Employment Agreement between Mr. Lee Wai Kit and Trendic
As of the date of this Annual Report, Trendic entered into an Employment Agreement with Mr. Lee Wai Kit. The agreement provides for an annual base salary of HK$600,000. Mr. Lee Wai Kit’s employment will continue indefinitely, subject to termination by either party to the agreement upon one month’s prior written notice or the equivalent salary in lieu of such notice. The agreement also provides that Mr. Lee Wai Kit shall not, during the term of the agreement and for 12 months after cessation of employment, carry on business in competition with the Group.
Employment Agreement between Ms. Tse and Trendic
Effective as of August 8, 2022, Trendic entered into an Employment Agreement with Ms. Tse in the capacity of project manager. The agreement provides for a monthly base salary of HK$35,000. Ms. Tse’s employment will continue indefinitely, subject to termination by either party to the agreement upon one month’s prior written notice or the equivalent salary in lieu of such notice. The agreement also provides that Ms. shall not disclose any non-public information arising from any aspect of her employment for the benefit of others during and subsequent to her employment with Trendic. The agreement also prohibits Ms. Tse from engaging in direct or indirect employment by another party whilst being employed by Trendic.
Employment Agreement between Mr. Luk Kai Chung and Trendic
Effective as of June 1, 2021, Trendic entered into an Employment Agreement with Mr. Luk Kai Chung in the capacity of project manager. The agreement provides for a monthly base salary of HK$20,000. Mr. Luk Kai Chung’s employment will continue indefinitely, subject to termination by either party to the agreement upon one month’s prior written notice or the equivalent salary in lieu of such notice. The agreement also provides that Mr. Luk Kai Chung shall not disclose any non-public information arising from any aspect of his employment for the benefit of others during and subsequent to his employment with Trendic. The agreement also prohibits Mr. Luk Kai Chung from engaging in direct or indirect employment by another party whilst being employed by Trendic.
2025 Equity Incentive Plan
As of the date of this Annual Report, our shareholders and Board adopted the 2025 Dreamland Limited Equity Incentive Plan, or the 2025 Equity Incentive Plan on June 5, 2025, to motivate attract and retain the best available personnel, provide additional incentives to staff and directors and promote the success of our business. Under the 2025 Equity Incentive Plan, the maximum aggregate number of Class A Ordinary Shares which may be issued pursuant to all awards under such plan will be 6,000,000, which constitutes 20% of the total issued and outstanding Class A Ordinary Shares of our Company on a fully-diluted basis as of the date of adoption. Pursuant to Rule 416(a) under the Securities Act, this Annual Report also covers an indeterminate number of additional shares which may be offered and issued to prevent dilution from share splits, share dividends or similar transactions as provided in the 2025 Equity Incentive Plan. Any Class A Ordinary Shares covered by an award granted under the 2025 Equity Incentive Plan (or portion of an award) that terminates, expires, lapses or repurchased for any reason will be deemed not to have been issued for purposes of determining the maximum aggregate number of Class A Ordinary Shares that may be issued under the 2025 Equity Incentive Plan. As of the date of this Annual Report, 6,000,000 shares have been granted under the 2025 Equity Incentive Plan.
The following paragraphs summarize the principal terms of the 2025 Equity Incentive Plan.
Types of awards.
The 2025 Equity Incentive Plan permits the awards of options, restricted shares, restricted share units or any other type of awards approved by our Board or the compensation committee.
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Plan administration.
Our Board or the compensation committee administers the 2025 Equity Incentive Plan. Our Board or the compensation committee determines, among other things, the participants to receive awards, the type and number of awards to be granted to each participant, and the terms and conditions of each award grant.
Award agreement.
Awards granted under the 2025 Equity Incentive Plan are evidenced by an award agreement that sets forth terms, conditions and limitations for each award, which may include the term of the award, the provisions applicable in the event of the grantee’s employment or service terminates, and our authority to unilaterally or bilaterally amend, modify, suspend, cancel or rescind the award.
Eligibility.
We may grant awards to our staff and directors.
Vesting schedule.
In general, the plan administrator determines the vesting schedule, which is specified in the relevant award agreement.
Exercise of awards.
The exercise price per share subject to an option is determined by the plan administrator and set forth in the award agreement, which may be a fixed price or a variable price related to the fair market value of the Class A Ordinary Shares. The vested portion of option will expire if not exercised prior to the time as the plan administrator determines at the time of its grant.
Transfer restrictions.
Awards may not be transferred in any manner by the eligible participant other than in accordance with the limited exceptions, such as transfers to our company or a subsidiary of ours, transfers to the immediate family members of the participant by gift, the designation of a beneficiary to receive benefits if the participant dies, permitted transfers or exercises on behalf of the participant by the participant’s duly authorized legal representative if the participant has suffered a disability, or, subject to the prior approval of the plan administrator or our executive officer or director authorized by the plan administrator, transfers to one or more natural persons who are the participant’s family members or entities owned and controlled by the participant and/or the participant’s family members, including but not limited to trusts or other entities whose beneficiaries or beneficial owners are the participant and/or the participant’s family members, or to such other persons or entities as may be expressly approved by the plan administrator, pursuant to such conditions and procedures as the plan administrator may establish.
Termination and amendment.
Unless terminated earlier, the 2025 Equity Incentive Plan has a term of 10 years. Our Board may terminate, amend or modify the plan, subject to the limitations of applicable laws. However, no such action may adversely affect in any material way any award previously granted without prior written consent of the participant.
Indemnification Agreements
We entered into indemnification agreements with each of our directors and executive officers, which became effective on June 30, 2025. Under these agreements, we agree to indemnify our directors and executive officers against certain liabilities and expenses incurred by such persons in connection with claims made by reason of their being a director or officer of our Company.
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.
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ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
Major Shareholders
The following table sets forth information with respect to the beneficial ownership, within the meaning of Rule 13d-3 under the Exchange Act, of our Class A Ordinary Shares and our Class B Ordinary Shares as of the date of this Annual Report, and as adjusted to reflect the sale of the Class A Ordinary Shares offered in the offering for:
| ● | each of our directors and executive officers; |
| ● | each of our current directors, officers and independent directors as a group; and |
| ● | each person known to us to own beneficially more than 5% of our Class A Ordinary Shares. |
Beneficial ownership includes voting or investment power with respect to the securities. Except as indicated below, and subject to applicable community property laws, the persons named in the table have sole voting and investment power with respect to all Class A Ordinary Shares shown as beneficially owned by them. For the purpose of voting power, each Class A Ordinary Share entitles the holder to one vote and each Class B Ordinary Share entitles the holder to twelve (12) votes on any matter on which action of the shareholders of our Company is sought. The Class B Ordinary Shares votes together with the Class A Ordinary Shares. The percentage of beneficial ownership of each listed person as of the date of this Annual Report is based on 3,405,583 Class A Ordinary Shares and 80,000 Class B Ordinary Shares outstanding.
Information with respect to beneficial ownership has been furnished by each director, officer, or beneficial owner of 5% or more of our Class A Ordinary Shares. Beneficial ownership is determined in accordance with the rules of the SEC and generally requires that any such person have voting or investment power with respect to securities. In computing the number of Class A Ordinary Shares beneficially owned by a person listed below and the percentage ownership of such person, Class A Ordinary Shares underlying options, warrants, or convertible securities held by each such person that are exercisable or convertible within 60 days are deemed outstanding, but are not deemed outstanding for computing the percentage ownership of any other person. As of the date of this Annual Report, we have six shareholders of record, none of whom are located in the United States.
Class B Ordinary Shares Beneficially Owned | Class A Ordinary Shares Beneficially Owned | Percentage of Voting Power | ||||||||||||||||||
| Number | Percentage (%) | Number | Percent (%) | Percent (%)(2) | ||||||||||||||||
| Directors and Executive Officers(1): | ||||||||||||||||||||
| Ms. Seto | 80,000 | 100 | 1,069,890 | 31.42 | 46.50 | |||||||||||||||
| Ms. Tse | 0 | 0 | 0 | 0 | 0 | |||||||||||||||
| Mr. Lee Wai Kit | - | - | - | - | - | |||||||||||||||
| Ms. Cheung Tan | - | - | - | - | - | |||||||||||||||
| Ms. Lui Yi Sin, Edith | - | - | - | - | - | |||||||||||||||
| Ms. Lee Wing Yin | - | - | - | - | - | |||||||||||||||
| Mr. Luk Kai Chung | - | - | - | - | - | |||||||||||||||
| All directors and executive officers as a group (7 individuals): | 80,000 | 100 | 1,069,890 | 31.42 | 46.50 | |||||||||||||||
Class B Ordinary Shares Beneficially Owned | Class A Ordinary Shares Beneficially Owned | Percentage of Voting Power | ||||||||||||||||||
| Number | Percent (%) | Number | Percent (%) | Percent (%)(2) | ||||||||||||||||
| 5% Shareholders: | ||||||||||||||||||||
| Ms. Seto | 80,000 | 100 | 1,069,890 | 31.42 | 46.50 | |||||||||||||||
| Golden Crown Consulting Limited | - | - | 380,000 | 11.16 | 8.70 | |||||||||||||||
Notes:
(1) The business address of our directors and executive officers is RM 18E, Billion Plaza Phase 2, 10 Cheung Yue Street, Cheung Sha Wan, Hong Kong.
(2) Based on 3,405,583 Class A Ordinary Shares issued. This takes into account 80,000 Class B Ordinary Shares held by Ms. Seto which carry twelve (12) votes on any matter on which action of the shareholders of the Company is sought.
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Related Party Transactions
We have adopted an audit committee charter, which requires the committee to review all related-party transactions on an ongoing basis and all such transactions be approved by the committee.
Set forth below are related party transactions of our Company for the years ended March 31, 2024, 2025, and 2026, which are identified in accordance with the rules prescribed under Form 20-F and may not be considered as related party transactions under Hong Kong law.
The related party of the Company with whom transactions are reported in these financial statements are as follows:
| Name of Individual | Relationship with the Company | |
| Ms. Seto Wai Yue | Shareholder and Director of the Company | |
| Exit (HK) Limited | Ms. Seto is a 40% shareholder and sole director of Exit (HK) | |
| Earthling Catering Limited | Ms. Seto is a 64% shareholder and a director of Earthling | |
| Exit Catering Limited | Ms. Seto was a 51% shareholder and director of Exit Catering Limited (Exit Catering Limited was deregistered during the year ended March 31, 2026) | |
| Exit Operations Limited | Exit Catering Limited was a 60% shareholder and director of Exit Operations Limited (Following the deregistration of Exit Catering Limited during the year months ended March 31, 2026, Ms. Seto’s beneficial interest in Exit Operations Limited was lost) | |
| I Dao Cao Limited | Brother of Ms. Seto is the sole shareholder and director of I Dao Cao Limited |
Amount due from/(to) a shareholder
| As of March 31, | ||||||||
| 2025 | 2026 | |||||||
| HKD | HKD | |||||||
| Seto Wai Yue | $ | (1,839,193 | ) | $ | (3,645,293 | ) | ||
On April 10, 2024, Ms. Seto Wai Yue entered into an interest-free loan facility agreement with TIL, for a revolving loan facility agreement of up to HK$12,000,000 for the purposes of paying the costs and expenses in connection with the offering. As of March 31, 2025, loan amount from Ms. Seto is approximately HK$1.78 million. The balances are unsecured, non-interest bearing, and payable on demand. The balances were recorded in current assets/liabilities.
During the years ended March 31, 2024, 2025, and 2026 the proceeds and payments to a shareholder are as follows
| Years ended March 31, | ||||||||||||
| 2024 | 2025 | 2026 | ||||||||||
| HKD | HKD | HKD | ||||||||||
| Proceeds from a shareholder | $ | 18,039,849 | $ | 9,177,530 | $ | 7,213,210 | ||||||
| Payments to a shareholder | (21,742,460 | ) | (4,387,903 | ) | (5,407,110 | ) | ||||||
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Amount due from/(to) a related party
| As of | As of | As of | ||||||||||
| March 31, 2024 | March 31, 2025 | March 31, 2026 | ||||||||||
| HKD | HKD | HKD | ||||||||||
| I Dao Cao Limited | $ | - | $ | (288,350 | ) | $ | - | |||||
| Exit Operations Limited | $ | - | $ | 1,219,865 | $ | - | ||||||
As of March 31, 2025, the amount due from I Dao Cao represented deposits for concert tickets for resell. The relevant concert tickets will be delivered before the concert commenced. The amount due from Exit Operations Limited represented deposits for café operation for events and will be used up when provision of café services for upcoming events.
Revenue
| Years ended March 31, | ||||||||||||
| 2024 | 2024 | 2026 | ||||||||||
| HKD | HKD | HKD | ||||||||||
| Exit (HK) Limited | ||||||||||||
| - Provision of event management services | - | - | - | |||||||||
| - Sales of goods | - | - | - | |||||||||
| - Design and others | 20,000 | - | - | |||||||||
| Exit Catering Limited – sale of goods | 317,586 | - | - | |||||||||
| Exit Operations Limited | ||||||||||||
| - Revenue of café operation | - | 431,509 | - | |||||||||
| - Sales of goods | - | 20,250 | - | |||||||||
| Earthling Catering Limited – design and others | - | - | - | |||||||||
| $ | 337,586 | $ | 451,759 | $ | - | |||||||
Cost of Revenue
| Years ended March 31, | ||||||||||||
| 2024 | 2025 | 2026 | ||||||||||
| HKD | HKD | HKD | ||||||||||
| Exit Operations Limited – cost of café operation | $ | - | $ | 264,350 | $ | - | ||||||
| Exit HK Limited – royalty fee | $ | - | $ | - | $ | 230,759 | ||||||
Defined contribution insurance to Ms. Seto
During the year ended March 31, 2025, the Company purchased insurance for Ms. Seto with defined contribution of US$50,000 per annum for the period of five years and recorded as selling, general and administrative expenses.
Dividend
For the year ended March 31, 2024, Trendic declared and paid a dividend of HK$5,500,000 (approximately US$706,000) to its shareholders registered as such on March 30, 2024. The dividend was offset against amount due from a shareholder during the year ended March 31, 2024. There was no dividend for the years ended March 31, 2025 and 2026.
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ITEM 8. FINANCIAL INFORMATION
Financial Statements
Our Consolidated Financial Statements are set forth under Item 18. - “Financial Statements.”
ITEM 9. THE OFFER AND LISTING
Offer and Listing Details
Our Class A Ordinary Shares commenced trading on the Nasdaq Global Market on July 23, 2025 under the symbol “TDIC.” The CUSIP number for our Class A Ordinary Shares is G28385121.
Transfer Agent
The transfer agent and registrar for the Class A Ordinary Shares of the Company is Transhare Corporation, 17755 North US Highway 19 Suite 140, Clearwater, FL 33764, telephone: (303) 662-1112.
ITEM 10. ADDITIONAL INFORMATION
Enforceability of Civil Liabilities
Our Company is an exempted company incorporated with limited liability under the laws of the Cayman Islands. We are incorporated in the Cayman Islands because of certain benefits associated with being a Cayman Islands company, such as political and economic stability, an effective judicial system, a favorable tax system, the absence of foreign exchange control or currency restrictions and the availability of professional and support services. However, the Cayman Islands has a less developed body of securities laws as compared to the United States and provides less protection for investors. In addition, investors may not have standing to sue Cayman Islands companies before the U.S. federal courts.
All of our current operations are conducted outside of the United States and all of our current assets are located outside of the United States, with the majority of our operations and current assets being located in Hong Kong. All of the directors and executive officers of our Company reside outside the United States and substantially all of their assets are located outside the United States. As a result, it may not be possible for investors to effect service of process within the United States upon us or any such persons, or to enforce in the United States any judgment obtained in the U.S. courts against us or any of such persons, including judgments based upon the civil liability provisions of the U.S. securities laws or any U.S. state or territory.
We have appointed Cogency Global Inc., 122 East 42nd Street, 18th Floor, New York, NY 10168, as our agent upon whom process may be served in any action brought against us under the securities laws of the United States.
Cayman Islands
Conyers Dill & Pearman, our counsel as to Cayman Islands law, has advised us that there is uncertainty as to whether the courts of the Cayman Islands would: (i) recognize or enforce judgments of U.S. courts obtained against us or our directors or officers that are predicated upon the civil liability provisions of the federal securities laws of the United States or the securities laws of any state in the United States, or (ii) entertain original actions brought in the Cayman Islands against us or our directors or officers that are predicated upon the federal securities laws of the United States or the securities laws of any state in the United States.
We have been advised by Conyers Dill & Pearman that although there is no statutory enforcement in the Cayman Islands of judgments obtained in the federal or state courts of the United States (and the Cayman Islands are not a party to any treaties for the reciprocal enforcement or recognition of such judgments), the courts of the Cayman Islands would recognise as a valid judgment, a final and conclusive judgment in personam obtained in the U.S. courts against the Company under which a sum of money is payable (other than a sum of money payable in respect of multiple damages, taxes or other charges of a like nature or in respect of a fine or other penalty) or, in certain circumstances, an in personam judgment for non-monetary relief, and would give a judgment based thereon provided that (a) such courts had proper jurisdiction over the parties subject to such judgment; (b) such courts did not contravene the rules of natural justice of the Cayman Islands; (c) such judgment was not obtained by fraud; (d) the enforcement of the judgment would not be contrary to the public policy of the Cayman Islands; (e) no new admissible evidence relevant to the action is submitted prior to the rendering of the judgment by the courts of the Cayman Islands; and (f) there is due compliance with the correct procedures under the laws of the Cayman Islands. However, the Cayman Islands courts are unlikely to enforce a judgment obtained from United States courts under civil liability provisions of the U.S. federal securities law if such judgment is determined by the courts of the Cayman Islands to give rise to obligations to make payments that are penal or punitive in nature. Because such a determination has not yet been made by a court of the Cayman Islands, it is uncertain whether such civil liability judgments from U.S. courts would be enforceable in the Cayman Islands. A Cayman Islands court may stay enforcement proceedings if concurrent proceedings are being brought elsewhere.
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Hong Kong
Robertsons, our counsel as to Hong Kong law, has advised us that there is currently no arrangement providing for the reciprocal enforcement of judgements between Hong Kong and the United States, as such judgments of United States courts will not be directly enforced in Hong Kong. However, under common law, a foreign judgment (including one from federal or state court in the United States) obtained against the Company may generally be treated by the courts of Hong Kong as a cause of action in itself and sued upon as a debt between the parties. In a common law action for enforcement of a foreign judgment, the judgment creditor has to prove that (a) the judgment is in personam; (b) the judgment is in the nature of a monetary award; (c) the judgment is final and conclusive on the merits and has not been stayed or satisfied in full; and (d) the judgement is from a court of competent jurisdiction. The defenses available to the defendant in a common law action for enforcement of a foreign judgment include breach of natural justice, fraud and contrary to public policy of Hong Kong. In order to enforce the foreign judgement at common law, fresh proceedings must be initiated in Hong Kong, which involves issuing a Writ of Summons and Statement of Claim attaching the foreign judgment as proof of the debt.
There is uncertainty as to whether the courts of Hong Kong would: (i) recognize or enforce judgments of United States courts obtained against us or our directors or officers predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States; or (ii) entertain original actions brought in Hong Kong against us or our directors or officers predicated upon the securities laws of the United States or any state in the United States. Our Board is composed of five directors, all executive directors are located in Hong Kong. The directors are Cheung Tan, Lee Wing Yin, Lui Yi Sin, Edith, Tse Sze Man and Seto Wai Yue. Further, Ms. Seto, a member of our board of directors is also our Chief Executive Officer.
A judgment of a court in the United States predicated upon U.S. federal or state securities laws may be enforced in Hong Kong at common law by bringing an action in a Hong Kong court on that judgment for the amount due thereunder, and then seeking summary judgment on the strength of the foreign judgment, provided that the foreign judgment, among other things, is: (i) for a debt or a definite sum of money (not being taxes or similar charges to a foreign government taxing authority or a fine or other penalty); and (ii) final and conclusive on the merits of the claim, but not otherwise. Such a judgment may not, in any event, be so enforced in Hong Kong if (a) it was obtained by fraud; (b) the proceedings in which the judgment was obtained were opposed to natural justice; (c) its enforcement or recognition would be contrary to the public policy of Hong Kong; (d) the court of the United States was not jurisdictionally competent; or (e) the judgment was in conflict with a prior Hong Kong judgment.
Hong Kong has no arrangement for the reciprocal enforcement of judgments with the United States. As a result, there is uncertainty as to the enforceability in Hong Kong, in original actions or in actions for enforcement, of judgments of United States courts of civil liabilities predicated solely upon the federal securities laws of the United States or the securities laws of any State or territory within the United States.
Share Capital
The following description of our share capital is a summary only and not meant to be complete, but is subject to and qualified in its entirety by our Memorandum and Articles of Association, as amended from time to time, and by the provisions of the applicable law. Reference is made to our Memorandum and Articles of Association.
Our Company was incorporated on July 5, 2024, and immediately following incorporation, our share capital was held as to 1 Share by Ms. Seto.
On August 19, 2024, Ms. Seto and Kilo Wonders subscribed for and were allotted and issued fully paid 19,059 and 940 Class A Ordinary Shares in the Company for cash at par, respectively, and a resolution was passed on the same day giving effect to the same.
On August 19, 2024, Ms. Seto, Kilo Wonders and Yield Rights subscribed for and were allotted and issued fully paid 4,500,939, 234,059 and 245,000 Class A Ordinary Shares in the Company for cash at par, and a resolution was passed on the same day giving effect to the same.
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On August 20, 2024, Fuji Holdings, Prime Crest and Allied Target entered into agreements to acquire 225,000, 245,000 and 230,000 Class A Ordinary Shares in the Company for US$250,000, US$270,000 and US$255,000 respectively, from Ms. Seto.
On March 6, 2025, one Class A Ordinary Share was allotted and issued to each of Ms. Seto and Kilo Wonders, credited as fully paid, in consideration of them transferring their entire equity interest in Trendic to our Group.
On March 31, 2025, for purposes of recapitalization in anticipation of the initial public offering, the Company’s shareholders passed resolutions to (i) sub-divide each of the issued and unissued shares in its share capital of par value of US$0.0001 each into 10 shares of par value of US$0.00001 each, (ii) to re-classify and re-designate its authorized share capital into 10,000,000,000 shares with a par value of US$0.00001 each comprising (a) 9,500,000,000 Class A Ordinary Shares with a par value of US$0.00001 each and (b) 500,000,000 Class B Ordinary Shares with a par value of US$0.00001 each and (iii) to adopt an amended and restated memorandum of association and articles of association reflecting such amended share capital and containing the rights, preferences and privileges attached to each class of shares. Concurrently, Ms. Seto, Prime Crest, Fuji Holdings, Kilo Wonders, Yield Rights and Allied Target surrendered 16,303,760, 1,045,660, 960,300, 1,002,980, 1,045,660 and 981,640 Class A Ordinary Shares to the Company, respectively.
On December 3, 2025, the Company entered into an Equity Purchase Agreement with Hudson Global Ventures, LLC, providing the Company the right to sell up to US$18,000,000 of ordinary shares at its discretion over 24 months. As consideration, the Company issued 736,018 Commitment Shares to the Investor.
On April 20, 2026, the Company effected a 1-for-5 reverse stock split, adjusting the issued and outstanding share capital to 7,400,000 ordinary shares (comprising 7,200,000 Class A Ordinary Shares and 200,000 Class B Ordinary Shares, with a par value of US$0.00005 each).
On April 21, 2026, the Company received binding commitments from a group of accredited investors for the subscription of an aggregate of 3,400,000 Class A Ordinary Shares (post-split) and 17,000,000 Common Warrants (post-split). All such warrants have been exercised, resulting in additional proceeds to the Company of US$850,000. The total funds received from these investors are US$3,400,000.
On June 15, 2026, the Company effected a 1-for-25 reverse stock split. Following this adjustment, the issued and outstanding share capital was approximately 1,509,557 ordinary shares (comprising approximately 1,501,557 Class A Ordinary Shares and 8,000 Class B Ordinary Shares, with a par value of US$0.00125 each).
On June 22, 2026, the Company entered into a securities purchase agreement with Imperial Vision Fund SPC Series 1SP, issuing 320,000 Class A Ordinary Shares at a purchase price of US$3.75 per share, for aggregate gross proceeds of US$1,200,000. This was conducted as an offshore offering in reliance on Regulation S.
On June 25, 2026, the Company entered into a securities purchase agreement with Golden Crown Consulting Limited, issuing 380,000 Class A Ordinary Shares at a purchase price of US$3.75 per share, for aggregate gross proceeds of US$1,425,000. This was an offshore offering conducted in reliance on Regulation S.
On July 7, 2026, the Company entered into a securities purchase agreement with its Chief Executive Officer, Ms. Seto Wai Yue, issuing an aggregate of 580,000 Class A Ordinary Shares and 72,000 Class B Ordinary Shares at an aggregate price of approximately US$2,445,000.
Our Memorandum and Articles of Association
The following are summaries of material provisions of our memorandum and articles of association and of the Companies Act, insofar as they relate to the material terms of our Class A Ordinary Shares.
Objects of Our Company. Under our memorandum and articles of association, the objects of our company are unrestricted, and we are capable of exercising all the functions of a natural person of full capacity irrespective of any question of corporate benefit, as provided by section 27(2) of the Companies Act.
Ordinary Shares. Our Ordinary Shares are issued in registered form and are issued when registered in our register of members. We may not issue shares to bearer. Our shareholders who are non-residents of the Cayman Islands may freely hold and vote their shares.
Class A Ordinary Shares. Each Class A Ordinary Share is entitled to one (1) vote on any matter on which action of the shareholders of the Company is sought. Our Class A Ordinary Shares are not convertible into Class B Ordinary Shares under any circumstances.
Class B Ordinary Shares. Each Class B Ordinary Share is entitled to twelve (12) votes on any matter on which action of the shareholders of the Company is sought. Each Class B Ordinary Share is convertible into one Class A Ordinary Share at the option of the holder thereof on a one-for-one basis. In addition, upon any sale, transfer, assignment or disposition of Class B Ordinary Shares by a holder thereof to any person or entity which is not an Affiliate of such holder, such Class B Ordinary Shares shall be automatically and immediately converted into an equal number of Class A Ordinary Shares.
Dividends. Subject to the Companies Act and our Articles of Association, our board of directors may from time to time declare dividends in any currency to be paid to the holders of Class A Ordinary Shares. Holders of Class B Ordinary Shares are not entitled to any dividends or distributions. Our dividends may be declared and paid out of our profits, realized or unrealized, or from any reserve set aside from profits which our board of directors determine are no longer needed. Dividends may also be declared and paid out of share premium account or any other fund or account which can be authorized for this purpose in accordance with the Companies Act. No dividend may be declared and paid unless our directors determine that, immediately after the date of payment, we will be able to pay our debts as they become due in the ordinary course of business and we have funds lawfully available for such purpose.
Except in so far as the rights attaching to, or the terms of issue of, any share may otherwise provide (i) all dividends shall be declared and paid according to the amounts paid up on the shares in respect of which the dividend is paid, although no amount paid up on a share in advance of calls shall for this purpose be treated as paid up on the share; and (ii) all dividends shall be apportioned and paid pro rata in accordance with the amount paid up on the shares.
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Our Board may deduct from any dividend or other monies payable to any member all sums of money (if any) presently payable by him to our Company on account of calls, instalments or otherwise.
Whenever our Board or our Company in general meeting has resolved that a dividend should be paid or declared on any class of the share capital of the Company, our board of directors may resolve:
| a. | that such dividend be satisfied wholly or in part in the form of an allotment of shares credited as fully paid up, provided that the members entitled to such dividend will be entitled to elect to receive such dividend (or part thereof) in cash in lieu of such allotment; or | |
| b. | that the members entitled to such dividend will be entitled to elect to receive an allotment of shares credited as fully paid up in lieu of the whole or such part of the dividend as our board of directors may think fit. |
Our Board may determine in respect of any one particular dividend of our Company that such dividend may be satisfied wholly in the form of an allotment of shares credited as fully paid up without offering any right to members to elect to receive such dividend in cash in lieu of such allotment.
Any dividend, interest or other sum payable in cash to the holder of shares may be paid by cheque or warrant sent through the post. Every such cheque or warrant shall be made payable to the order of the person to whom it is sent and shall be sent at the holder’s or joint holders’ risk and payment of the cheque or warrant by the bank on which it is drawn shall constitute a good discharge to our Company. Any one of two or more joint holders may give effectual receipts for any dividends or other monies payable or property distributable in respect of the shares held by such joint holders.
Whenever our Board or our Company in general meeting has resolved that a dividend be paid or declared, our Board may further resolve that such dividend be satisfied wholly or in part by the distribution of specific assets of any kind.
All dividends, or distributions unclaimed for six years from the date of having been declared shall be forfeited and shall revert to our Company.
No dividend payable by our Company on or in respect of any share shall bear interest against our Company.
Differences in Corporate Law
The Companies Act is derived, to a large extent, from the older Companies Acts of England but does not follow recent English statutory enactments and accordingly there are significant differences between the Companies Act and the current Companies Act of England. In addition, the Companies Act 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 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 undertaking, 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 undertaking, 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 plan must be filed with the Registrar of Companies of the Cayman Islands together with a declaration as to the solvency of the consolidated or surviving company, a list of 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. Court approval is not required for a merger or consolidation which is effected in compliance with these statutory procedures.
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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.
Save in certain limited circumstances, a shareholder of a Cayman constituent company who dissents from the merger or consolidation is entitled to payment of the fair value of his shares (which, if not agreed between the parties, will be determined by the Cayman Islands court) upon dissenting to the merger or consolidation, provided the dissenting shareholder complies strictly with the procedures set out in the Companies Act. The exercise of dissenter rights will preclude the exercise by the dissenting shareholder of any other rights to which he or she might otherwise be entitled by virtue of holding shares, save for the right to seek relief on the grounds that the merger or consolidation is void or unlawful.
Separate from the statutory provisions relating to mergers and consolidations, the Companies Act also contains statutory provisions that facilitate the reconstruction and amalgamation of companies by way of schemes of arrangement, provided that the arrangement is approved (i) in the case of a shareholder scheme, by seventy-five per cent in value of the members or class of members, as the case may be, with whom the arrangement is to be made and (ii) in the case of a creditor scheme only, by a majority in number of each class of creditors with whom the arrangement is to be made and who must in addition represent seventy-five per cent 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. 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:
| ● | the statutory provisions as to the required majority vote have been met; | |
| ● | 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; | |
| ● | 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 | |
| ● | 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 a dissentient minority shareholder upon a tender offer. When a tender offer is made and accepted by holders of 90% of the shares for which the offer is made, the offeror may, within a two-month period from such acceptance, require the holders of the remaining shares to transfer such shares to the offeror on the terms of the offer. An objection can be made to the Grand Court of the Cayman Islands, but this is unlikely to succeed in the case of an offer which has been so approved unless there is evidence of fraud, bad faith or collusion or lack of compliance with the statutory requirements.
If an arrangement and reconstruction by way of scheme of arrangement is thus approved and sanctioned, or if a tender offer is made and accepted, in accordance with the foregoing statutory procedures, a 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 Delaware corporations, providing rights to receive payment in cash for the judicially determined value of the shares.
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The Companies Act also contains statutory provisions which provide that a company may present a petition to the Grand Court of the Cayman Islands for the appointment of a restructuring officer on the grounds that the company (a) is or is likely to become unable to pay its debts within the meaning of section 93 of the Companies Act; and (b) intends to present a compromise or arrangement to its creditors (or classes thereof) either, pursuant to the Companies Act, the law of a foreign country or by way of a consensual restructuring. The petition may be presented by a company acting by its directors, without a resolution of its members or an express power in its articles of association. On hearing such a petition, the Cayman Islands court may, among other things, make an order appointing a restructuring officer or make any other order as the court thinks fit.
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, the Cayman Islands courts can be expected to follow and apply the common law principles (namely the rule in Foss v. Harbottle and the exceptions thereto) so that a non-controlling shareholder may be permitted to commence a class action against or derivative actions in the name of the company to challenge actions where:
| ● | a company acts or proposes to act illegally or ultra vires; |
| ● | the act complained of, although not ultra vires, could only be effected duly if authorized by more than the number of votes which have actually been obtained; and | |
| ● | those who control the company are perpetrating a “fraud on the minority.” |
A shareholder may have a direct right of action against us where the individual rights of that shareholder have been infringed or are about to be infringed.
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 civil fraud or the consequences of committing a crime. Our memorandum and articles of association provide that that we shall indemnify our directors and officers, and their personal representatives, against all actions, proceedings, costs, charges, expenses, losses, damages or liabilities incurred or sustained by such persons, other than by reason of such person’s dishonesty, willful 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 our directors and executive officers that provide such persons with additional indemnification beyond that provided in our memorandum and articles of association.
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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 acts 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, 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 owes the following duties to the company — a duty to act in good faith in the best interests of the company, a duty not to make a personal profit based on his position as director (unless the company permits him to do so), a duty not to put himself in a position where the interests of the company conflict with his personal interest or his 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. It was previously considered that a director need not exhibit in the performance of his duties a greater degree of skill than may reasonably be expected from a person of his knowledge and experience. However, English and Commonwealth courts have moved towards an objective standard with regard to the required skill and care and these authorities are likely to be followed in the Cayman Islands.
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 permits us to eliminate the right of shareholders to act by written consent and our Memorandum and Articles of Association provide that any action required or permitted to be taken at any general meetings may be taken upon the vote of shareholders at a general meeting duly noticed and convened in accordance with our Memorandum and Articles of Association and may not be taken by written consent of the shareholders without a meeting.
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.
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The Companies Act does not provide shareholders with any right to requisition a general meeting or 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 shares which carry in aggregate not less than one-third of all votes attaching to the issued and outstanding shares of our company entitled 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 resolutions so requisitioned to a vote at such meeting. Other than this right to requisition a shareholders’ meeting, our 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. As an exempted Cayman Islands company, we are not obliged by law to call shareholders’ annual general meetings.
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. There are no prohibitions in relation to cumulative voting under the laws of the Cayman Islands, but our Memorandum and Articles of Association do not provide for cumulative voting. As a result, our shareholders are not afforded any less protections or rights on this issue than shareholders of a Delaware corporation.
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 Memorandum and Articles of Association, subject to certain restrictions as contained therein, directors may be removed with or without cause, by an ordinary resolution of our shareholders. An appointment of a director may be on terms that the director shall automatically retire from office (unless he has sooner vacated office) at the next or a subsequent annual general meeting or upon any specified event or after any specified period in a written agreement between the company and the director, if any; but no such term shall be implied in the absence of express provision. Under our Memorandum and Articles of Association, a director’s office shall be vacated if the director (i) becomes bankrupt or has a receiving order made against him or suspends payment or compounds with his creditors; (ii) is found to be or becomes of unsound mind or dies; (iii) resigns his office by notice in writing to the company; (iv) without special leave of absence from our board of directors, is absent from three consecutive meetings of the board and the board resolves that his office be vacated; (v) is prohibited by law from being a director or; (vi) is removed from office pursuant to the laws of the Cayman Islands or any other provisions of our memorandum and articles of association.
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.
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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, 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 Memorandum and Articles of Association, if our share capital is divided into more than one class of shares, the rights attached to any such class may only be varied with the sanction of a special resolution passed by a majority of two-thirds of the votes cast at a separate 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. Under Cayman Islands law, our 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 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 memorandum and articles of association governing the ownership threshold above which shareholder ownership must be disclosed.
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Cayman Islands Data Protection
We have certain duties under the Data Protection Act (as revised) of the Cayman Islands, or the DPA, based on internationally accepted principles of data privacy.
Privacy Notice
This privacy notice puts our shareholders on notice that through your investment into us you will provide us with certain personal information which constitutes personal data within the meaning of the DPA, or personal data.
Investor Data
We will collect, use, disclose, retain and secure personal data to the extent reasonably required only and within the parameters that could be reasonably expected during the normal course of business. We will only process, disclose, transfer or retain personal data to the extent legitimately required to conduct our activities on an ongoing basis or to comply with legal and regulatory obligations to which we are subject. We will only transfer personal data in accordance with the requirements of the DPA, and will apply appropriate technical and organizational information security measures designed to protect against unauthorized or unlawful processing of the personal data and against the accidental loss, destruction or damage to the personal data.
In our use of this personal data, we will be characterized as a “data controller” for the purposes of the DPA, while our affiliates and service providers who may receive this personal data from us in the conduct of our activities may either act as our “data processors” for the purposes of the DPA or may process personal information for their own lawful purposes in connection with services provided to us.
We may also obtain personal data from other public sources. Personal data includes, without limitation, the following information relating to a shareholder and/or any individuals connected with a shareholder as an investor: name, residential address, email address, contact details, corporate contact information, signature, nationality, place of birth, date of birth, tax identification, credit history, correspondence records, passport number, bank account details, source of funds details and details relating to the shareholder’s investment activity.
Who this Affects
If you are a natural person, this will affect you directly. If you are a corporate investor (including, for these purposes, legal arrangements such as trusts or exempted limited partnerships) that provides us with personal data on individuals connected to you for any reason in relation your investment in us, this will be relevant for those individuals and you should transit the content of this Privacy Notice to such individuals or otherwise advise them of its content.
How We May Use a Shareholder’s Personal Data
We may, as the data controller, collect, store and use personal data for lawful purposes, including, in particular: (i) where this is necessary for the performance of our rights and obligations under any agreements; (ii) where this is necessary for compliance with a legal and regulatory obligation to which we are or may be subject (such as compliance with anti-money laundering and FATCA/CRS requirements); and/or (iii) where this is necessary for the purposes of our legitimate interests and such interests are not overridden by your interests, fundamental rights or freedoms.
Should we wish to use personal data for other specific purposes (including, if applicable, any purpose that requires your consent), we will contact you.
Why We May Transfer Your Personal Data
In certain circumstances we may be legally obliged to share personal data and other information with respect to your shareholding with the relevant regulatory authorities such as the Cayman Islands Monetary Authority or the Tax Information Authority. They, in turn, may exchange this information with foreign authorities, including tax authorities.
We anticipate disclosing personal data to persons who provide services to us and their respective affiliates (which may include certain entities located outside the US, the Cayman Islands or the European Economic Area), who will process your personal data on our behalf.
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The Data Protection Measures We Take
Any transfer of personal data by us or our duly authorized affiliates and/or delegates outside of the Cayman Islands shall be in accordance with the requirements of the DPA.
We and our duly authorized affiliates and/or delegates shall apply appropriate technical and organizational information security measures designed to protect against unauthorized or unlawful processing of personal data, and against accidental loss or destruction of, or damage to, personal data.
We shall notify you of any personal data breach that is reasonably likely to result in a risk to your interests, fundamental rights or freedoms or those data subjects to whom the relevant personal data relates.
Contacting the Company
For further information on the collection, use, disclosure, transfer or processing of your personal data or the exercise of any of the rights listed above, please contact us through our website at http://www.trendicint.com or through phone number +852 5628 6281.
Anti-Money Laundering Matters
In order to comply with legislation or regulations aimed at the prevention of money laundering, the Company may be required to adopt and maintain anti-money laundering procedures, and may require subscribers to provide evidence to verify their identity. Where permitted, and subject to certain conditions, the Company may also delegate the maintenance of our anti-money laundering procedures (including the acquisition of due diligence information) to a suitable person.
The Company reserves the right to request such information as is necessary to verify the identity of a subscriber. In the event of delay or failure on the part of the subscriber in producing any information required for verification purposes, we may refuse to accept the application, in which case any funds received will be returned without interest to the account from which they were originally debited.
Documents on Display
You may read and copy documents referred to in this Annual Report on Form 20-F that have been filed with the SEC at the SEC’s Public Reference Room, 450 Fifth Street, N.W., Washington, D.C. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. You can also obtain copies of our SEC filings by going to the SEC’s website at http://www.sec.gov.
The SEC allows us to “incorporate by reference” the information we file with the SEC. This means that we can disclose important information to you by referring you to another document filed separately with the SEC. The information incorporated by reference is considered to be part of this Annual Report on Form 20-F.
ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Credit Risk
Financial instruments that potentially subject the Company to credit risk consist of cash equivalents and accounts receivable. Cash equivalents are maintained with high credit quality institutions, the composition and maturities of which are regularly monitored by management. The Hong Kong Deposit Protection Board pays compensation up to a limit of HKD800,000 if the bank with which an individual/a company hold its eligible deposit fails. As of March 31, 2025 and 2026, cash and bank balances of HKD17,135,719 and HKD20,457,347 was maintained at financial institutions in Hong Kong, of which none of its cash balance was subject to credit risk. However, if the individual bank balance is over HKD800,000, the excess will be subject to credit risk if the relevant bank fails. While management believes that these financial institutions are of high credit quality, it also continually monitors their credit worthiness.
For accounts receivable, the Company determines, on a continuing basis, the allowance for doubtful accounts based on the estimated realizable value. The Company identifies credit risk on a customer by customer basis. The information is monitored regularly by management. Concentration of credit risk arises when a group of customers having similar characteristics such that their ability to meet their obligations is expected to be affected similarly by changes in economic conditions.
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The Company has determined the default event on a financial asset to be when internal and/or external information indicates that the financial asset is unlikely to be received, which could include default of contractual payments due for more than 365 days, default of interest due for more than 365 days or there is significant difficulty of the counterparty. To minimize credit risk, the Company has developed and maintained its credit risk grading to categorize exposures according to their degree of risk of default. The credit rating information is supplied by publicly available financial information and the Company’s own trading records to rate its major customers and other debtors.
As of March 31, 2025 and 2026, there were accounts and other receivables of HKD17,082,085 and HKD8,049,392, respectively. Three of customers as at March 31, 2026 (2025: three) are amounted to 10% or more of the total consolidated amounts.
Interest Rate Risk
As the Company has no significant interest-bearing assets, the Company’s income and operating cash flows are substantially independent of changes in market interest rates.
Economic and Political Risk
The Company’s major operations are conducted in Hong Kong. Accordingly, the political, economic, and legal environments in Hong Kong, as well as the general state of Hong Kong’s economy may influence the Company’s business, financial condition, and results of operations.
Liquidity Risk
Liquidity risk is the risk that we will not be able to meet our financial obligations as they become due. Our policy is to ensure that we have sufficient cash to meet our liabilities when they become due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to our reputation. A key risk in managing liquidity is the degree of uncertainty in the cash flow projections. If future cash flows are fairly uncertain, the liquidity risk increases. Liquidity risk is controlled by the application of financial position analysis and monitoring procedures. When necessary, we will turn to financial institutions and related parties to obtain short-term funding to cover any liquidity shortage.
Currency Risk
Fluctuations in foreign currency exchange rates may materially and adversely affect our financial condition and results of operations. We are based in Hong Kong while all our suppliers of merchandise are based in the PRC. The brand owners, franchisees, distributors and local facilitators which we work with on overseas experience events are generally based overseas, such as in Malaysia and Thailand. Our reporting currency is Hong Kong Dollar while a portion of our overseas procurement is denominated in foreign currencies, such as Renminbi, Malaysian Ringgits and Thai Baht. As such, we are exposed to foreign currency risk as we trade in various foreign currencies. Fluctuations in foreign exchange are unpredictable as they may be caused by various factors, which would affect the gains and losses from transactions in currencies other than our reporting currency. We cannot assure you that we will not suffer any loss on foreign exchange in the future. Further, we do not have any forward contracts or other derivative instruments to manage our foreign exchange risks. In the event that we are unable to manage our foreign currency risks effectively or at all, our business, financial condition and results of operations may be materially and adversely affected.
ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
Not applicable
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PART II
ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
None.
ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
None.
ITEM 15. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Our management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) that is designed to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
As of the end of the period covered by this Annual Report, our Chief Executive Officer and Chief Financial Officer (the “Certifying Officers”), conducted an evaluation of our disclosure controls and procedures. Based on this evaluation, the Certifying Officers concluded that our disclosure controls and procedures were not effective to ensure that material information is recorded, processed, summarized and reported by our management on a timely basis in order to comply with our disclosure obligations under the Exchange Act and the rules and regulations promulgated thereunder.
Management’s Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act. Our management evaluated the effectiveness of our internal control over financial reporting, as required by Rule 13a-15(c) of the Exchange Act, based on criteria established in the framework in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, our management has concluded that our internal control over financial reporting was not effective as of March 31, 2026 due to a material weaknesses identified in our internal control over financial reporting as described in risk factor above.
1) Control Environment and Documentation
We do not yet have a fully formalized internal control framework. Certain processes remain susceptible to management override, and documentation supporting key transactions is not consistently maintained. We are implementing enhanced policies and procedures to strengthen oversight and recordkeeping.
2) Systems and Closing Procedures
We currently rely on manual, Excel-based records for accounting and payroll, which increases the risk of error and incomplete closing procedures. We are in the process of implementing a dedicated ERP system to improve audit trails, transaction tracking, and period-end controls.
3) Revenue Recognition and Related Party Transactions
Our controls over revenue recognition, particularly in co-organizer arrangements, and related party transactions are not sufficiently formalized. In certain cases, revenue was presented on a gross basis rather than net, and related party approvals lacked board oversight. We are establishing a related party transaction policy and strengthening procedures for revenue allocation and verification.
4) Financial Reporting and Classification
Certain balances, including IPO costs, investment accounts, and intangible assets under development, were not appropriately classified or analyzed for impairment. We are enhancing review procedures to ensure proper accounting treatment and compliance with IFRS requirements.
We are actively implementing corrective measures to address the identified weaknesses. Key initiatives include: (i) adopting a formal internal control framework and strengthening documentation standards, (ii) rolling out a dedicated ERP system to replace manual records and enhance closing procedures, (iii) establishing a related party transaction policy with board oversight, and (iv) improving revenue recognition controls, including enhanced verification of co-organizer reports and proper allocation of performance obligations. In addition, we are enhancing review procedures for classification, impairment analysis, and accounting treatment of investment balances. These measures are expected to significantly improve our internal control environment and financial reporting reliability over the coming fiscal year.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. In addition, projections of any evaluation of effectiveness of our internal control over financial reporting to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate.
Changes in Internal Control over Financial Reporting
During the fiscal year ended March 31, 2026, there was no change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting. The Company has hired a Chief Financial Officer with knowledge of IFRS and SEC financial reporting requirements to assist our finance and accounting department.
ITEM 16. RESERVED
ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT
Our Board of Directors has determined that the Company has at least one audit committee financial expert serving on its audit committee. Our Board of Directors has determined that each member of our audit committee is “independent” for audit committee purposes as that term is defined by the rules of the SEC and Nasdaq, and that each has sufficient knowledge in financial and auditing matters to serve on the audit committee. Our board of directors has designated Ms. Cheung as an “audit committee financial expert,” as defined under the applicable rules of the SEC.
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ITEM 16B. CODE OF ETHICS
Our Board of Directors has adopted a written code of business conduct and ethics that applies to our directors, officers and employees, including our chief executive officer, chief financial officer, principal accounting officer or controller or persons performing similar functions. A current copy of this code is filed as Exhibit 99.1 to this Annual Report for the fiscal year ended March 31, 2026.
ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Audit Fees
The following are the fees billed to us by TAAD LLP, or TAAD, our principal accountant, during the fiscal years ended March 31, 2024, 2025 and 2026 for services rendered:
| Year ended March 31, | ||||||||||||
| 2024 | 2025 | 2026 | ||||||||||
| USD | USD | USD | ||||||||||
| Audit Fees | $ | 111,804 | $ | 166,883 | $ | 179,450 | ||||||
| Audit Related Fees | - | 9,604 | 17,059 | |||||||||
| Tax Fees | - | - | - | |||||||||
| All Other Fees | - | - | - | |||||||||
| Total: | $ | 111,804 | $ | 176,487 | $ | 196,509 | ||||||
Audit Fees consist of 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.
Audit Related Fees consist of the aggregate fees billed in each of the fiscal years listed for professional services rendered by our principal auditors for the audit related services, including assistance with consent of documents filed with the SEC.
Tax Fees consist of the aggregate fees billed in each of the fiscal years listed for professional services rendered by our principal auditors for the tax compliance, tax advice, and tax planning.
All Other Fees consist of the aggregate fees billed for services provided by our independent auditor and not otherwise included in Audit Fees or Audit Related Fees.
ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
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 Nasdaq corporate governance listing standards. However, our audit committee is required to comply with the provisions of Rule 10A-3 of the Exchange Act, which is applicable to U.S. companies listed on Nasdaq. Therefore, we have a fully independent audit committee in accordance with Rule 10A-3 of the Exchange Act. However, because we are a foreign private issuer, our audit committee is not subject to additional Nasdaq corporate governance requirements applicable to listed U.S. companies, including the requirements to have a minimum of three members and to affirmatively determine that all members are “independent,” using more stringent criteria than those applicable to us as a foreign private issuer.
ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
Not applicable.
ITEM 16F. CHANGES IN REGISTRANT’S CERTIFYING ACCOUNTANTS
Not applicable.
ITEM 16G. CORPORATE GOVERNANCE
As of the date of this Annual Report, we intend to adopt a formal policy regarding board diversity and our nominating and corporate governance and Board will consider a broad range of factors relating to the qualifications and background of nominees, which may include diversity (not limited to race, gender or national origin). Our nominating and corporate governance committee, along with the Board, prioritize the selection of board members who can advance shareholder interests by showcasing a proven track record of professional achievements. Additionally, they should possess the capability to foster a collaborative environment among board members, have a deep understanding of our business and the competitive landscape, and bring forth professional and personal experiences that align with our growth strategy.
ITEM 16H. MINE SAFETY DISCLOSURE
Not applicable
ITEM 16I. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable
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ITEM 16J. INSIDER TRADING POLICIES
The
Company has
ITEM 16K. CYBERSECURITY
| 1. | Identification: We aim to proactively identify the manners in which our business could be materially impacted by cybersecurity risks including: |
| a) | Cybersecurity
Incidents - an unauthorized occurrence on or conducted through its information system that jeopardizes the confidentiality, | |
| b) | Cybersecurity Threats - any potential occurrence that may result in an unauthorized effort to adversely affect the confidentiality, integrity, or availability of its information systems or any information residing therein. |
| 2. | Assessment: We periodically assess our risks relating to cybersecurity threats, including risks relating to our reliance on third parties. In so doing, we consider the likelihood and impact that could result from the manifesting of such risks, together with the sufficiency of existing policies, procedures, systems, and safeguards in place to manage such risks, together with the sufficiency of existing policies, procedures, systems, and safeguards in place to manage such risks, including evaluating and if available obtaining cyber liability insurance, and aligning such cyber-risk management policies with the Company’s business needs by integrating cyber-risk analysis into significant business decisions. | |
| 3. | Management: If deemed appropriate, we design and implement reasonable safeguards to address any identified gaps in our existing processes and procedures, including annual cybersecurity awareness training emphasizing the use of strong passwords on all systems and aligning cyber-risk management policies with the Company’s needs by integrating cyber-risk analysis into significant business decisions and ensuring that the Company’s organization structure supports such cybersecurity goals. |
| 4. | Evaluation: If a cybersecurity breach occurs, the Audit Committee will determine whether the Incident or Threat is “material” (.i.e. is there a substantial likelihood that a reasonable shareholder would consider it important in making an investment decision or if it would have significantly altered the “total mix” of information made available?), assessing among other factors potential or actual financial impacts, reputational damage, and operational disruptions. | |
| 5. | Report: Establish and monitor an incident response approach requiring our Chief Financial officer to report to us, the full Board of Directors and legal counsel any cybersecurity concerns or events. | |
| 6. | Disclosure: To ensure compliance with SEC requirements and maintain overall stakeholder confidence in the Company, all material and known facts regarding the cybersecurity breach will be recorded, including their nature, scope, and financial implications; and a Form 6-K will be prepared and filed within four (4) business days after the determination that a “material” cybersecurity incident has occurred. |
PART III
ITEM 18. FINANCIAL STATEMENTS
The following Financial Statements are filed as part of this Annual Report:
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FINANCIAL STATEMENTS
DREAMLAND LIMITED AND SUBSIDIARIES
Consolidated Financial Statements
For The Years Ended March 31, 2024, 2025 And 2026
(With Report of Independent Registered Public Accounting Firm Thereon)
DREAMLAND LIMITED AND SUBSIDIARIES
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
| F-1 |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To
the Board of Directors and
Shareholders of Dreamland Limited and its subsidiaries
Opinion on the Financial Statements
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 consolidated 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 audit 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.
| /s/
| |
| We have served as the Company’s auditor since 2024. | |
| August 17, 2026 | |
| F-2 |
DREAMLAND LIMITED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
| Note | 2025 | 2026 | ||||||||
| As at March 31, | ||||||||||
| Note | 2025 | 2026 | ||||||||
| HKD | HKD | |||||||||
| ASSETS | ||||||||||
| Equipment, net | 8 | $ | $ | |||||||
| Right-of-use assets | 9 | |||||||||
| Non-current assets | ||||||||||
| Current assets: | ||||||||||
| Intangible assets | 11 | |||||||||
| Deposits and prepayments | 12 | |||||||||
| Amount due from related parties | 21 | |||||||||
| Amount due from joint operation parties | 13 | |||||||||
| Investment on event projects | 10 | |||||||||
| Contract assets | 6 | |||||||||
| Inventory | 14 | |||||||||
| Accounts and other receivables | 7 | |||||||||
| Cash and bank balances | ||||||||||
| Total current assets | ||||||||||
| TOTAL ASSETS | $ | $ | ||||||||
| Non-current liabilities: | ||||||||||
| Bank borrowings | 18 | $ | $ | |||||||
| Lease liabilities | 9 | |||||||||
| Total non-current liabilities | ||||||||||
| Current liabilities: | ||||||||||
| Bank borrowings, current portion | 18 | |||||||||
| Lease liabilities, current portion | 9 | |||||||||
| Tax payable | ||||||||||
| Amount due to a shareholder | 21 | |||||||||
| Amount due to a related party | 21 | |||||||||
| Trade and other payables | 15 | |||||||||
| Shares to be issued | 15 | |||||||||
| Total current liabilities | ||||||||||
| TOTAL LIABILITIES | ||||||||||
| SHAREHOLDERS’ EQUITY | ||||||||||
| Class A Ordinary Shares US$ par value authorized shares shares as of March 31, 2025 and 2026; shares issued and outstanding as of March 31, 2025 and 2026* | 19 | |||||||||
| Class B Ordinary Shares US$ par value authorized shares shares as of March 31, 2025 and 2026; shares issued and outstanding as of March 31, 2025 and 2026* | 19 | |||||||||
| Ordinary shares, value | 19 | |||||||||
| Subscription receivables | 19 | ( | ) | ( | ) | |||||
| Reserves | ||||||||||
| Retained earnings / (accumulated deficit) | ( | ) | ||||||||
| TOTAL SHAREHOLDERS’ EQUITY | ||||||||||
| TOTAL SHAREHOLDERS’ EQUITY AND LIABILITIES | $ | $ | ||||||||
| * |
See accompanying notes to consolidated financial statements.
| F-3 |
DREAMLAND LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
| Note | 2024 | 2025 | 2026 | |||||||||||
| Year ended March 31, | ||||||||||||||
| Note | 2024 | 2025 | 2026 | |||||||||||
| HKD | HKD | HKD | ||||||||||||
| Revenues | $ | $ | $ | |||||||||||
| Revenues, related party | ||||||||||||||
| Total Revenues, net | 3 | |||||||||||||
| Costs and expenses: | ||||||||||||||
| Cost of revenue | ( | ) | ( | ) | ( | ) | ||||||||
| Cost of revenue – related party | ( | ) | ( | ) | ||||||||||
| Cost of revenue | ( | ) | ( | ) | ||||||||||
| Selling, general and administrative expenses | 5 | ( | ) | ( | ) | ( | ) | |||||||
| Research and development | ( | ( | ) | |||||||||||
| Amortization | ( | ) | ||||||||||||
| Impairment of investment on event projects | ( | ) | ||||||||||||
| Impairment of rights of use assets | ( | |||||||||||||
| Depreciation | ( | ) | ( | ) | ( | ) | ||||||||
| Profit/(Loss) from operations | ( | ) | ||||||||||||
| Other income/(expenses): | ||||||||||||||
| Interest income | ||||||||||||||
| Finance costs | ( | ) | ( | ) | ( | ) | ||||||||
| Other income/(expenses) | ( | ) | ||||||||||||
| Total other income/(expenses), net | 4 | ( | ) | ( | ) | |||||||||
| Profit/(Loss) before income taxes | ( | ) | ||||||||||||
| Income tax expense | 20 | ( | ) | ( | ) | ( | ) | |||||||
| NET PROFIT/(LOSS) | $ | $ | ( | ) | ||||||||||
| Profit/(Loss) per Class A Ordinary Share: | 17 | |||||||||||||
| - Basic* | $ | $ | ( | ) | ||||||||||
| - Diluted* | $ | $ | ( | ) | ||||||||||
| Weighted average number of Class A Ordinary Shares | ||||||||||||||
| - Basic* | ||||||||||||||
| - Diluted* | ||||||||||||||
| Weighted average number of Class B Ordinary Shares | ||||||||||||||
| Weighted average number of Ordinary Shares | ||||||||||||||
| - Basic and diluted* | ||||||||||||||
| * |
See accompanying notes to consolidated financial statements.
| F-4 |
DREAMLAND LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
Number of shares | Amount * | Number of shares | Amount * | Subscription Receivables | Capital Reserve | Retained Earnings | shareholders’ Equity | |||||||||||||||||||||||||
| Class A Ordinary Shares* | Class B Ordinary Shares* | (Accumulated Deficit)/ | Total | |||||||||||||||||||||||||||||
Number of shares | Amount | Number of shares | Amount | Subscription Receivables | Capital Reserve | Retained Earnings | shareholders’ Equity | |||||||||||||||||||||||||
| HKD | HKD | |||||||||||||||||||||||||||||||
| Balance as of April 1, 2023 | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||||||||||||||||
| Net Profit | - | - | ||||||||||||||||||||||||||||||
| Dividend | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Balance as of March 31, 2024 | $ | $ | $ | ( | ) | $ | $ | $ | ||||||||||||||||||||||||
| Net Profit | - | - | $ | $ | ||||||||||||||||||||||||||||
| Balance as of March 31, 2025 | $ | $ | $ | ( | ) | $ | $ | $ | ||||||||||||||||||||||||
| Balance | $ | $ | $ | ( | ) | $ | $ | $ | ||||||||||||||||||||||||
| Issuance of Class A Ordinary Shares for initial public offering, net of offering expenses | ||||||||||||||||||||||||||||||||
| Share-based payment | ||||||||||||||||||||||||||||||||
| Net losses | - | - | ( | ) | $ | ( | ) | |||||||||||||||||||||||||
| - | - | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||
| Balance as of March 31, 2026 | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||||||||||||||||
| Balance | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||||||||||||||||
| * |
See accompanying notes to consolidated financial statements.
| F-5 |
DREAMLAND LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
| 2024 | 2025 | 2026 | ||||||||||
| Year ended March 31, | ||||||||||||
| 2024 | 2025 | 2026 | ||||||||||
| HKD | HKD | HKD | ||||||||||
| Cash flows from operating activities: | ||||||||||||
| Net Profit/(Loss) before tax | $ | $ | $ | ( | ) | |||||||
| Adjustments to reconcile net profit/(loss) to net cash provided by operating activities | ||||||||||||
| Interest income | ( | ) | ( | ) | ( | ) | ||||||
| Finance costs | ||||||||||||
| Amortization | ||||||||||||
| Depreciation of equipment | ||||||||||||
| Depreciation of right of use assets | ||||||||||||
| Share-based payment for service fee | ||||||||||||
| Impairment of investment on event projects | ||||||||||||
| Gain on disposal of intangible assets | ( | ) | ||||||||||
| (Gain)/loss on investment on event projects | ( | ) | ||||||||||
| Loss/(Gain) on early termination of leases | ( | ) | ||||||||||
| Impairment of rights of use assets | ||||||||||||
| Change in operating assets and liabilities: | ||||||||||||
| Contract assets | ( | ) | ||||||||||
| Inventory | ( | |||||||||||
| Accounts and other receivables | ( | ) | ( | ) | ||||||||
| Deposits and prepayments | ( | ) | ( | ) | ( | ) | ||||||
| Amount due from/(to) related parties | ( | |||||||||||
| Amount due from/(to) joint operation parties | ( | ) | ( | ) | ||||||||
| Trade payable and other payable | ( | ) | ||||||||||
| Contract liabilities | ( | ) | ||||||||||
| Cash Generated from operation | ( | ) | ( | ) | ||||||||
| Income tax paid | ( | ) | ||||||||||
| Net cash provided by/(used in) operating activities | ( | ) | ( | ) | ||||||||
| Cash flows from investing activities: | ||||||||||||
| Acquisition of intangible assets | ( | ) | ||||||||||
| Proceeds from disposal of intangible assets | ||||||||||||
| Proceeds from investment on event projects | ||||||||||||
| Cash paid for event projects at loss | ( | ) | ||||||||||
| Cash paid for investment on event projects, net of investment return | ( | ) | ( | ) | ||||||||
| Interest received | ||||||||||||
| Disposal of motor vehicle | ||||||||||||
| Purchases of equipment | ( | ) | ||||||||||
| Net cash used in investing activities | ( | ) | ( | ) | ( | ) | ||||||
| Cash flows from financing activities: | ||||||||||||
| Proceeds from a shareholder | ||||||||||||
| Payments to a shareholder | ( | ) | ( | ) | ( | ) | ||||||
| Proceeds from issuance of ordinary shares, net of offering expenses | ||||||||||||
| Proceeds from shares to be issued | ||||||||||||
| Proceeds from investment partner | ||||||||||||
| Repayment of profit split for investments on event projects to investment partner | ( | ) | ||||||||||
| Repayment to investment partner | ( | ) | ||||||||||
| Proceeds from bank overdrafts | ||||||||||||
| Repayment of bank overdrafts | ( | ) | ( | ) | ||||||||
| Proceeds from bank borrowings | ||||||||||||
| Repayment of bank borrowings – principal | ( | ) | ( | ) | ( | ) | ||||||
| Repayment of bank borrowings and overdrafts – interest | ( | ) | ( | ) | ( | ) | ||||||
| Repayment of leases liabilities – principal | ( | ) | ( | ) | ( | ) | ||||||
| Repayment of leases liabilities – interest | ( | ) | ( | ) | ( | ) | ||||||
| Net cash provided by/(used in) financing activities | ( | ) | ||||||||||
| Net change in cash and bank balances | ||||||||||||
| BEGINNING OF YEAR | ||||||||||||
| END OF YEAR | $ | $ | ||||||||||
| SUPPLEMENTAL CASH FLOW INFORMATION: | ||||||||||||
| Cash paid for income taxes | $ | $ | $ | ( | ) | |||||||
| Cash paid for interest | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
| SUPPLEMENTAL NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||||||||||||
| Dividend offset amount due from a shareholder | $ | $ | $ | |||||||||
| Amount due from joint operation parties offset payment for investment on event projects | $ | $ | $ | |||||||||
| Completed events projects investment balances offset for other new investment on events projects | $ | $ | $ | |||||||||
| Accounts receivables offset payment for investment on event projects | $ | $ | $ | |||||||||
See accompanying notes to consolidated financial statements.
| F-6 |
DREAMLAND LIMITED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE－1 BUSINESS OVERVIEW AND BASIS OF PRESENTATION
Dreamland Limited, or the Company is incorporated under the laws of the Cayman Islands with limited liability on July 5, 2024. The Company, through its subsidiaries, collectively referred to as the Group, are mainly engaged in the provision of design, products sales and event management services.
Description of subsidiaries incorporated and controlled by the Company
SCHEDULE OF COMPANY’S SUBSIDIARIES AND THE VIES
| Name | Background | Effective ownership | |||
| Goal Success Limited, or Goal Success | ● | ||||
| ● | |||||
| ● | Issued and outstanding ordinary share for USD | ||||
| ● | Investment holding | ||||
| Trendic International Limited, or TIL | ● | ||||
| ● | |||||
| ● | Issued and paid up Ordinary Shares without par value of shares for HK$ | ||||
| ● | Provision of design, merchandised sales and event management services. | ||||
| ● | During the year, TIL also provided event services as event organizer. | ||||
| Incubase Arena Taiwan Holdings Limited | ● | ||||
| ● | |||||
| ● | Issued and paid up Ordinary Shares without par value of shares for HK$ |
||||
| ● | Dormant | ||||
| ● | Intended to be dissolved in the next financial year | ||||
Reorganization
Since July 5, 2024, the Company completed several transactions for the purposes of a group reorganization.
During the years presented in these consolidated financial statements, the control of these entities has been demonstrated by Ms. Seto, as if the reorganization had taken place at the beginning of the earlier date presented. Accordingly, the consolidation has been treated as a corporate restructuring, or Reorganization, of entities under common control and thus the current capital structure has been retroactively presented in prior periods as if such structure existed at that time, the entities under common control are presented on a consolidated basis for all periods to which such entities were under common control. The consolidation of the Company and its subsidiaries has been accounted for at historical cost and prepared on the basis as if the aforementioned transactions had become effective as of the beginning of the first period presented in the accompanying consolidated financial statements.
Initial Public Offering
The ordinary shares began trading on the Nasdaq Capital Market on July 23, 2025 under the ticker symbol “TDIC”.
| F-7 |
NOTE－2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
These accompanying consolidated financial statements reflect the application of certain significant accounting policies as described in this note and elsewhere in the accompanying consolidated financial statements and notes.
● Basis of Presentation
These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards and International Accounting Standards as issued by the International Accounting Standards Board (IASB) and Interpretations (collectively IFRS Accounting Standards).
The preparation of consolidated financial statements in compliance with adopted IFRS Accounting Standards requires the use of certain accounting estimates. It also requires Group management to exercise judgment in applying the Group’s accounting policies.
Changes in accounting policies
a) New standards, interpretations and amendments adopted from January 1, 2025
The following amendments are effective for the period beginning January 1, 2025:
| ● | Lack of Exchangeability (Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates); |
These amendments to various IFRS Accounting Standards are mandatorily effective for reporting periods beginning on or after January 1, 2025. These amendments have no effect on the measurement of any items in the financial statements of the Group.
b) New standards, interpretations and amendments not yet effective
There are a number of standards, amendments to standards, and interpretations which have been issued by the IASB that are effective in future accounting periods that the Group has decided not to adopt early. The Group is currently assessing the impact of these new accounting standards and amendments. The Group does not expect the amendments and other standards issued by the IASB, but are yet to be effective, to have a material impact on the Group.
● Basis of Consolidation
The consolidated financial statements include the financial statements of the Company and its subsidiaries. All significant inter-company balances and transactions within the Company have been eliminated upon consolidation.
| F-8 |
● Going Concern
During
the year ended March 31, 2026, the Company incurred net loss with amounts of HKD
In connection with the Company’s assessment of going concern considerations in accordance with International Accounting Standard 1 (IAS 1), “Presentation of Financial Statements,” paragraph 25, this net loss raises substantial doubt about the Company’s ability to continue as a going concern. However, Management believes that the Company will have sufficient funds to meet its working capital needs for at least twelve months following the issuance of these consolidated financial statements. This belief is supported by management’s financing plan, which includes (i) ongoing support from major shareholders, (ii) committed income from upcoming event projects and investments, and (iii) access to external credit facilities and equity financing arrangements. These plans are considered feasible and within management control, providing reasonable assurance of execution. Based on this assessment, Management has concluded that the substantial doubt about the Company’s ability to continue as a going concern is alleviated by this financing plan. Accordingly, the accompanying consolidated financial statements do not include any adjustments that might result should the Company be unable to continue as a going concern.
● Use of Estimates and Assumptions
The preparation of consolidated financial statements in conformity with IFRS Accounting Standards requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the periods presented. Significant accounting estimates in the period include the revenue recognition for provision of event management services, impairment on assets and provision for income tax. Actual results may differ from these estimates.
● Foreign Currency Translation and Transaction
The Company uses Hong Kong Dollars as its reporting currency. The functional currency of the Group is Hong Kong Dollar. All amounts have been rounded to the nearest thousand, unless otherwise indicated.
Monetary assets and liabilities denominated in currencies other than the applicable functional currencies are translated into the functional currencies at the prevailing rates of exchange at the balance sheet date. Nonmonetary assets and liabilities are remeasured into the applicable functional currencies at historical exchange rates.
Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. Translation gains and losses that arise from exchange rate fluctuations from transactions denominated in a currency other than the functional currency are translated, as the case may be, at the rate on the date of the transaction and included in the results of operations as incurred.
● Cash and Cash in Bank
Cash and cash in bank consist primarily of cash in readily available checking and saving accounts. The Company maintains most of its bank accounts in Hong Kong.
● Accounts Receivable and Allowance for Doubtful Accounts
Accounts receivable include trade accounts due from customers in the rendering of service.
Accounts receivable are recorded at the invoiced amount and do not bear interest, which are due upon invoice was presented. The Company seeks to maintain strict control over its outstanding receivables to minimize credit risk. Overdue balances are reviewed regularly by senior management. Management reviews its receivables on a regular basis to determine if the bad debt allowance is adequate and provides allowance when necessary. The allowance is based on management’s best estimates of specific losses on individual customer exposures, as well as the historical trends of collections. Account balances are charged off against the allowance after all means of collection have been exhausted and the likelihood of collection is not probable. The Company’s management continues to evaluate the reasonableness of the valuation allowance policy and update it if necessary.
The Company does not hold any collateral or other credit enhancements overs its accounts receivable balances.
| F-9 |
● Lease
The Group assesses at contract inception whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
Group as a lessee
The Group applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets. The Group recognizes lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets.
| (a) | Right-of-use assets |
Right-of-use assets are recognized at the commencement date of the lease (that is the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and any impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities 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 terms and the estimated useful lives of the assets as follows:
SCHEDULE OF ESTIMATED AVERAGE USEFUL LIVES
| Office premises |
If ownership of the leased asset transfers to the Group by the end of the lease term or the cost reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset.
| (b) | Lease liabilities |
| Lease liabilities are recognized at the commencement date of the lease at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in- substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Group and payments of penalties for termination of a lease, if the lease term reflects the Group exercising the option to terminate the lease. The variable lease payments that do not depend on an index or a rate are recognized as an expense in the period in which the event or condition that triggers the payment occurs. | |
| In calculating the present value of lease payments, the Group uses its incremental borrowing rate at the lease commencement date because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in lease payments (e.g., a change to future lease payments resulting from a change in an index or rate) or a change in assessment of an option to purchase the underlying asset. | |
| (c) | Short-term leases and leases of low-value assets |
| The Group applies the short-term lease recognition exemption to its short-term leases of equipment and warehouse rent (that is those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the recognition exemption for leases of low-value assets to leases of office equipment that are considered to be of low value. | |
| Lease payments on short-term leases and leases of low-value assets are recognized as an expense on a straight-line basis over the lease term. |
| F-10 |
● Equipment
Equipment are stated at cost less accumulated depreciation and accumulated impairment losses, if any. Depreciation is calculated on the straight-line basis over the following expected useful lives from the date on which they become fully operational and after taking into account their estimated residual values:
SCHEDULE OF EXPECTED USEFUL LIFE OF EQUIPMENT
| Expected useful life | ||
| Leasehold improvement |
Expenditure for repairs and maintenance is expensed as incurred. When assets have retired or sold, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is recognized in the results of operations.
● Interests in Joint Operations
During the year ended March 31, 2025 and 2026, the Group entered into joint operation arrangement for certain events. In return, the Group will have project sharing at agreed portion. A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the assets, and obligations for the liabilities, relating to the arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control.
The Group recognizes in relation to its interest in a joint operation:
| ● | its assets, including its share of any assets held jointly; | |
| ● | its liabilities, including its share of any liabilities incurred jointly; | |
| ● | its revenue from the sale of its share of the output arising from the joint operation; | |
| ● | its share of the revenue from the sale of the output by the joint operation; and | |
| ● | its expenses, including its share of any expenses incurred jointly. |
The assets, liabilities, revenues and expenses relating to the Group’s interest in a joint operation are accounted for in accordance with the relevant IFRSs such as IFRS 11 applicable to the particular assets, liabilities, revenues and expenses, and recognized based on the profit sharing ratio on each event. The amount due from/(to) joint operation parties will be recognized based on payment/receipt by the Group and joint operation accordingly.
● Intangible Assets
Purchased licenses and intellectual property (IP) usage rights for exhibitions or events are recognized as intangible assets when the Company obtains control over the rights through licensing or acquisition from third parties. These rights allow the Company to use and operate specific IP in exhibitions or venues, and are typically limited to short-term durations aligned with the event periods.
Such rights are initially measured at cost and subsequently amortized on a straight-line basis over the number of approved events and, thereafter, over the specific duration of each relevant event. The Company assesses these intangible assets for impairment whenever indicators of impairment exist.
These rights may be transferable. When a license or IP usage right is transferred to a third party, the Company recognizes a gain or loss on disposal in other income or other expenses, determined as the difference between the proceeds received and the carrying amount of the asset at the date of transfer.
● Inventories
Inventories are stated at the lower of cost and net realizable value. Cost, which comprises all costs of purchase and, where applicable, cost of conversion and other costs that have been incurred in bringing the inventories to their present location and condition, is calculated using the first in, first out method. Net realizable value represents the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.
| F-11 |
● Investment on event projects
Financial assets are classified, at initial recognition, as subsequently measured at amortized cost, fair value through other comprehensive income, and fair value through profit or loss. The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow characteristics and the Group’s business model for managing them. The Group initially measures a financial asset at its fair value plus in the case of a financial asset not at fair value through profit or loss, transaction costs. In order for a financial asset to be classified and measured at amortized cost or fair value through other comprehensive income, it needs to give rise to cash flows that are solely payments of principal and interest (“SPPI”) on the principal amount outstanding. Financial assets with cash flows that are not SPPI are classified and measured at fair value through profit or loss, irrespective of the business model. The Group’s business model for managing financial assets refers to how it manages its financial assets in order to generate cash flows. The business model determines whether cash flows will result from collecting contractual cash flows, selling the financial assets, or both. Financial assets classified and measured at amortized cost are held within a business model with the objective to hold financial assets in order to collect contractual cash flows, while financial assets classified and measured at fair value through other comprehensive income are held within a business model with the objective of both holding to collect contractual cash flows and selling. Financial assets which are not held within the aforementioned business models are classified and measured at fair value through profit or loss.
The
investment on event projects are recorded at fair value through profit or loss (FVTPL), with cost less impairment used as a proxy where
fair value is not reliably measurable due to absence of readily available market data. The investment on event projects represents monetary
funding in projects where the Group does not involve itself in event operations and has a contractual right to returns based on a percentage
of amounts invested over the net profit or loss of the event in accordance with binding agreements. As such, the contractual cash flows
are not solely payments of principal and interest (SPPI) and therefore the investment fails the SPPI test. The management believe the
carrying amounts of these investments approximate fair value. Historically, event projects were short-term in nature and expected to
be completed within one year, with such investments presented as current assets. Beginning in 2026, the Group invests in two medium-term
projects with durations of
Mirroring the above, the Group also receives funding from an investment partner and records the balance as payable to an investment partner. The payable represents funds received by the Group from a third-party investor to finance specific event projects. Under the terms of the agreement, the investment partner provides capital to the Group for the purpose of investing in event-related projects. In return, the investment partner is entitled to a share of the net returns (or bears a share of the losses) generated by those projects, in proportion to the percentage funded based on budget cost. The Group accounts for the amounts received as a financial liability until the underlying event is completed and the partner’s return entitlement is settled.
● Revenue Recognition
The Company adopted Accounting Standards Revenue from Contracts with Customers (IFRS 15), which provided the following overview of how revenue is recognized from the Company’s contracts with customers: The Company recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services.
Step 1: Identify the contract(s) with a customer.
Step 2: Identify the performance obligations in the contract.
Step 3: Determine the transaction price – The transaction price is the amount of consideration in a contract to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer.
Step 4: Allocate the transaction price to the performance obligations in the contract – Any entity typically allocates the transaction price to each performance obligation on the basis of the relative standalone selling prices of each distinct good or service promised in the contract.
Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation – An entity recognizes revenue when (or as) it satisfies a performance obligation by transferring a promised good or service to a customer (which is when the customer obtains control of that good or service). The amount of revenue recognized is the amount allocated to the satisfied performance obligation. A performance obligation may be satisfied at a point in time (typically for promises to transfer goods to a customer) or over time (typically for promises to transfer service to a customer).
Revenue related to event planner
The Company identified the following three types of performances under the event management contract: i) events planning, design, development and operation, or the Event Management Services; ii) Procurement and sales of goods (including but not limited to IP goods, drinks, tickets) to customer; iii) sponsorship commission income. The Company’s revenue is derived from contracts with customers in the rendering of Event Management Services, and as such, the revenue recognized depicts the transfer of promised services to its customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those services when the events start. The Company considers the terms of the contract and all relevant facts and circumstances when applying this guidance. The duration of the service period is usually less than one year. The Company recognize Event Management Services revenue when the event starts and during the event period ratably because: i) Based on the contract terms, none of parties that entered into the contract can terminate, and find other vendors to substitute the services; ii) And the customer benefits from our service beginning at the point of the event started to the event completion. The Company generally requires the customers to make the advanced payment at certain percentage of the total contract value upon signing the agreement. Contract liabilities are recorded when the advanced payment is received from the customers before all of the relevant criteria for revenue recognition has been met. The event management contract price is lump sum basis, consisted of sales of goods and Event Management Services consideration. For allocation of transaction price of sales of goods and Event Management Services, the company applied cost plus margin method to determine the sales of goods revenue based on standalone sales of goods gross margin, and allocate the remaining provision consideration into event management services. For sponsorship commission income, there is specified percentage calculation based on sponsorship fee raised (if any).
For sponsorship commission income, it is sponsorship for the whole event period and recognized over the event period align with Event Management Services.
| F-12 |
Revenue related to event organizer
The Company obtained IP directly from IP owner and authorized to convene events as organizer or co-organizer. The Company identified the following four types of performances under the event: i) sales of event tickets for the events; ii) Procurement and sales of goods (including but not limited to IP goods, drinks) to customer; iii) sponsorship commission income and (iv) ad hoc requested by customer say video production for the event
The Company sold the event tickets through on site or sales platform. For event tickets income, it is recognized upon the provision of events.
The Company sold the goods at the event. Revenue from sales of goods is recognized at a point in time when control of the goods has been transferred to the customers. Control is primarily evidenced by taking physical possession and inventory risk of the goods. The Group controls the goods and determines the selling price or allocated selling price (under event management services contracts) of the good before the good is transferred to the customers.
For sponsorship commission income, there is specified percentage calculation based on sponsorship fee raised (if any). For sponsorship commission income, it is sponsorship for the whole event period and recognized over the event period align with Event Management Services.
For ad hoc income say video production, it is recognized upon the video delivered and confirmed by customer.
For events have co-organizer, the revenue recognition is similar the above under heading revenue related to event organizer but proportion based on agreed terms to the agreement with joint operations parties. Please refer to interest in joint operations paragraph in Note 2.
Design
Revenue from designed services is recognized over the time. The revenue generated from design 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 design services. The design services provide involve a series of tasks which are distinct and meet the criteria for recognizing revenue overtime. In addition, the Group concludes that the services provided each month are substantially similar and result in the transfer of substantially similar services to the clients each month. The Group recognizes revenues from design services on a monthly basis when it satisfies its performance obligations throughout the contract terms. Due to the design works were performed by inhouse designer and/or monitored by in-house designer through external designer (value added services), the Company controls the specified designed services before that services are transferred to a customer and the Company will determine the selling price, and thus, the Company is principal instead of agent for design services.
Café income
Café income is recognized based on the nature of the entitlements provided to customers and sponsors. The café operations are typically integrated with themed exhibitions and sponsorship arrangements, and revenue streams include (i) rights to entry, (ii) rights to meals or merchandise, and (iii) exclusive functions or promotional entitlements.
For rights to entry and meals, where contracts grant customers or sponsors the right to attend exhibitions or receive a specified number of meals, the Group satisfies its performance obligation once such rights are made available, regardless of whether they are fully exercised. Revenue is recognized at the point-in-time when the rights are granted.
For exclusive functions and promotional rights, sponsorship arrangements often include venue use or promotional entitlements. These are recognized over-time as the exhibition or event occurs.
The Group does not control the preparation or delivery of meals, merchandise, or venue services, which are operated by third-party caterers and venue operators. Accordingly, the Group acts as an Agent under IFRS 15, with its performance obligation being to arrange for the provision of café services by third parties. Revenue is therefore recognized on a net basis, representing only the Group’s contractual share of profits or commission income, rather than the gross value of café sales.
● Cost of Revenue
Direct cost of revenues mainly consists of subcontracting to event facilitators, front line staff costs, cost of goods sold which are attributable to the revenue-generating activities of the Group provides for its clients,
● Contract costs
A contract cost represents cost incurred to fulfill a contract with a customer. Contract cost is capitalized as an asset if all of the following criteria are met:
(a) The cost relates directly to a contract or to an anticipated contract that the entity can specifically identify;
| F-13 |
(b) The cost generates or enhances resources of the entity that will be used in satisfying (or in continuing to satisfy) performance obligations in the future;
(c) The cost is expected to be recovered
The capitalized contract cost is amortized and charged to the statement of profit or loss on a systematic basis that is consistent with the pattern of the revenue to which the asset related is recognized.
For contract costs incurred for events with co-organizers, the project costs will be recognized in accordance with sharing agreed terms in the agreements.
● Contract liabilities
A contract liability is recognized when a payment is received or a payment is due (whichever is earlier) from a customer before the Group transfers the related goods or services. Contract liabilities are recognized as revenue when the Group performs under the contract (i.e., transfers control of the related goods or services to the customer).
● Dividends
Final dividends are recognized as a liability when they are approved by the shareholders in a general meeting. Proposed final dividends are disclosed in the notes to the financial statements. Interim dividends are simultaneously proposed and declared, and recognized immediately as a liability when they are proposed and declared.
● Income Taxes
Income tax
Income tax comprises current and deferred tax. Income tax relating to items recognized outside profit or loss is recognized outside profit or loss, either in other comprehensive income or directly in equity.
Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period, taking into consideration interpretations and practices prevailing in the countries in which the Group operates.
Deferred tax is provided, using the liability method, on all temporary differences at the end of the reporting period between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.
Deferred tax liabilities are recognized for all taxable temporary differences, except when the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss and does not give rise to equal taxable and deductible temporary differences; and in respect of taxable temporary differences associated with investments in subsidiaries, associates and joint ventures, when the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.
| F-14 |
● Income Taxes (continued)
Deferred tax assets are recognized for all deductible temporary differences, and the carryforward of unused tax credits and any unused tax losses. Deferred tax assets are recognized to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carryforward of unused tax credits and unused tax losses can be utilized, except when the deferred tax asset relating to the deductible temporary differences arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss and does not give rise to equal taxable and deductible temporary differences; and in respect of deductible temporary differences associated with investments in subsidiaries, associates and joint ventures, deferred tax assets are only recognized to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilized.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilized. Unrecognized deferred tax assets are reassessed at the end of each reporting period and are recognized to the extent that it has become probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.
Deferred tax assets and deferred tax liabilities are offset if and only if the Group has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities which intend either to settle current tax liabilities and assets on a net basis, or to realize the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.
The Company computes earnings/losses per share, or EPS, requires companies to present basic and diluted EPS. Basic EPS is measured as net income divided by the weighted average ordinary share outstanding for the period. Diluted EPS presents the dilutive effect on a per share basis of the potential Class A Ordinary Shares (e.g., convertible securities, options and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential Class A Ordinary Shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS.
As Class B Ordinary Shares do not have right to dividend. there is no impact when calculated basic net profit per Class A and Class B Ordinary Shares. However, as Class B Ordinary Shares have the right to convert into Class A Ordinary Shares, there is dilutive impact during the years ended March 31, 2024, 2025 and 2026.
● Retirement Plan Costs
Contributions
to retirement plans (which are defined contribution plans) are charged to general and administrative expenses in the accompanying statements
of operation as the related employee service are provided. The Company is required to make contribution for their employees under a government-mandated
multi-employer defined contribution pension scheme for its eligible full-time employees in Hong Kong. The Company is required to contribute
a specified percentage of the participants’ relevant income based on their ages and wages level. During the years ended March 31,
2024, 2025 and 2026, HKD$
| F-15 |
● Government Grant
A
government grant or subsidy is not recognized until there is reasonable assurance that: (a) the enterprise will comply with the conditions
attached to the grant; and (b) the grant will be received. When the Company receives government grant or subsidies but the conditions
attached to the grants have not been fulfilled, such government subsidies are deferred and recorded under other payables and accrued
expenses, and other long-term liability. The classification of short-term or long-term liabilities is depended on the management’s
expectation of when the conditions attached to the grant can be fulfilled. For the years ended March 31, 2024, 2025 and 2026, the Company
received government subsidies of HKD
● Segment Reporting
The Group operates and manages its business as a single segment. The Group’s chief operating decision maker, or CODM, is the Chairman of the Board. The Group’s CODM assess the Group’s performance and results of operations on a consolidated basis. The Group generates substantially all of its revenues from clients in Hong Kong. Accordingly, no geographical segments are presented. Substantially all of the Group’s long-lived assets are located in Hong Kong.
● Related Parties
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 of the same party, such as a family member or relative, shareholder, or a related corporation.
● Concentration of Credit Risk
Financial
instruments that potentially subject the Company to credit risk consist of cash equivalents and accounts receivable. Cash equivalents
are maintained with high credit quality institutions, the composition and maturities of which are regularly monitored by management.
The Hong Kong Deposit Protection Board pays compensation up to a limit of HKD
For accounts receivable, the Company determines, on a continuing basis, the allowance for doubtful accounts based on the estimated realizable value. The Company identifies credit risk on a customer by customer basis. The information is monitored regularly by management. Concentration of credit risk arises when a group of customers having similar characteristics such that their ability to meet their obligations is expected to be affected similarly by changes in economic conditions.
The Company has determined the default event on a financial asset to be when internal and/or external information indicates that the financial asset is unlikely to be received, which could include default of contractual payments due for more than 365 days, default of interest due for more than 365 days or there is significant difficulty of the counterparty. To minimize credit risk, the Company has developed and maintained its credit risk grading to categorize exposures according to their degree of risk of default. The credit rating information is supplied by publicly available financial information and the Company’s own trading records to rate its major customers and other debtors.
As
of March 31, 2025 and 2026, there were accounts and other receivables of HKD
| F-16 |
● Liquidity Risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company’s policy is to ensure that it has sufficient cash to meet its liabilities when they become due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation. A key risk in managing liquidity is the degree of uncertainty in the cash flow projections. If future cash flows are fairly uncertain, the liquidity risk increases. Liquidity risk is controlled by the application of financial position analysis and monitoring procedures. When necessary, we will turn to financial institutions and related parties to obtain short-term funding to cover any liquidity shortage.
● Fair Value Measurement
The Company establishes a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair value as follows:
| ● | Level 1: Inputs are based upon unadjusted quoted prices for identical instruments traded in active markets; |
| ● | Level 2: Inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques (e.g. Black-Scholes Option-Pricing model) for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs; and |
| ● | Level 3: Inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques, including option pricing models and discounted cash flow models. |
The carrying value of the Company’s financial instruments: cash and bank balances, contract costs, accounts receivable, deposits, prepayments and other receivables, trade and other payables, tax payable, contract liabilities approximate at their fair values because of the short-term nature of these financial instruments.
Fair value estimates are made at a specific point in time based on relevant market information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates.
NOTE – 3 SEGMENT INFORMATION AND REVENUE
Information about major customers
Revenue from customers of the corresponding years contributing over 10% of the total revenue of the Group are as follows:
SCHEDULE OF REVENUE INFORMATION ABOUT MAJOR CUSTOMERS
| Percentage of | Year ended March 31, | |||||||||||||||||||||||
| respective fiscal year | 2024 | 2025 | 2026 | |||||||||||||||||||||
| 2024 | 2025 | 2026 | HKD | HKD | HKD | |||||||||||||||||||
| Customer A | % | % | % | $ | $ | $ | ||||||||||||||||||
| Customer B | ||||||||||||||||||||||||
| Customer C | ||||||||||||||||||||||||
| Customer D | ||||||||||||||||||||||||
| Customer E | ||||||||||||||||||||||||
| F-17 |
An analysis of revenue is as follows:
SCHEDULE OF ANALYSIS OF REVENUE
| 2024 | 2025 | 2026 | ||||||||||
| Year ended March 31, | ||||||||||||
| 2024 | 2025 | 2026 | ||||||||||
| HKD | HKD | HKD | ||||||||||
| Provision of event management | $ | $ | $ | |||||||||
| Sales of goods and others | ||||||||||||
| Tickets | ||||||||||||
| Sponsorship | ||||||||||||
| Video production | ||||||||||||
| Design and others | ||||||||||||
| Total: | $ | $ | $ | |||||||||
| Revenue | $ | $ | $ | |||||||||
The following tables present the Company’s revenue disaggregated by timing of revenue recognition, based on management’s assessment of available data:
SCHEDULE OF DISAGGREGATED BY TIMING OF REVENUE RECOGNITION
| 2024 | 2025 | 2026 | ||||||||||
| Year ended March 31, | ||||||||||||
| 2024 | 2025 | 2026 | ||||||||||
| HKD | HKD | HKD | ||||||||||
| Over time | $ | $ | $ | |||||||||
| At a point in time | ||||||||||||
| Total: | $ | $ | $ | |||||||||
| Revenue | $ | $ | $ | |||||||||
NOTE – 4 OTHER INCOME/(EXPENSES)
SCHEDULE OF OTHER INCOME EXPENSES
| 2024 | 2025 | 2026 | ||||||||||
| Year ended March 31, | ||||||||||||
| 2024 | 2025 | 2026 | ||||||||||
| HKD | HKD | HKD | ||||||||||
| Government grant | $ | $ | $ | |||||||||
| Bank interest income | ||||||||||||
| Finance costs | ( | ) | ( | ) | ( | ) | ||||||
| Gain on disposal of intangible assets | ||||||||||||
| Gain/(Loss) on investment on event projects | ( | ) | ||||||||||
| Gain/(Loss) on early termination of leases | ||||||||||||
| Sales of concert tickets and others | ||||||||||||
| Total | $ | ( | ) | $ | $ | ( | ) | |||||
| Other income/(expenses) | $ | ( | ) | $ | $ | ( | ) | |||||
Government
grant in relation to the funding support from the Technology Voucher Program set up by the Hong Kong Government during the year
ended March 31, 2024. There was government
grant during the year ended March 31, 2025 and March 31, 2026. During the year ended March 31, 2025, the Group disposed certain
intangible assets and recorded a gain. Please refer to note 11. Beginning from the year ended March 31, 2025, the Group started to
invest in event projects and receiving funding from other investors. During the year ended March 31, 2025 and 2026, the Group made a
realized gain of HKD
Finance costs represented interests for bank borrowings and leases liabilities during the years ended March 31, 2024, 2025 and 2026.
| F-18 |
NOTE – 5 GENERAL AND ADMINISTRATIVE EXPENSES
The following table sets forth the breakdown of our administrative expenses for the years ended March 31, 2024, 2025 and 2026:
SCHEDULE OF GENERAL AND ADMINISTRATIVE EXPENSES
| 2024 | 2025 | 2026 | ||||||||||
| Year ended March 31, | ||||||||||||
| 2024 | 2025 | 2026 | ||||||||||
| HKD | HKD | HKD | ||||||||||
| Accounting fee | $ | $ | $ | |||||||||
| Bank charges | ||||||||||||
| Insurance expenses | ||||||||||||
| Staff payroll costs | ||||||||||||
| Listing fees | ||||||||||||
| Legal and professional fees | ||||||||||||
| Travelling expenses | ||||||||||||
| Marketing fee for events | ||||||||||||
| Office expenses | ||||||||||||
| Share-based payment | ||||||||||||
| Variable lease payments | ||||||||||||
| Sundries | ||||||||||||
| Total: | $ | $ | $ | |||||||||
General and administrative expenses amounted to approximately HK$
Share-based payment represented the marketing and consultancy services acquired during the year at a consideration of the Company’s Class A Ordinary Shares (pre-split) issued on August 20, 2025 to service providers for the service contracts over a 12-month period. As the fair value of the services could not be reliably measured, the expense was determined by reference to the market price of the Company’s shares on NASDAQ at the dates the services were rendered. The resulting share-based payment expense was recognized over the service period, amounting to HK$ for the year ended March 31, 2026.
NOTE – 6 CONTRACT ASSETS
SCHEDULE OF CONTRACT ASSETS
| 2025 | 2026 | |||||||
| As of March 31, | ||||||||
| 2025 | 2026 | |||||||
| HKD | HKD | |||||||
| Project costs incurred | $ | $ | ||||||
Contract assets capitalized relate to prepaid project costs such as subcontracting fee, royalty fee incurred in satisfying performance obligations of respective projects in the future. Contract assets are recognized as part of direct costs in the statements of operations in the year in which revenue from the related projects is recognized. There is no impairment for the years ended March 31, 2025 and 2026, respectively. The expected timing of recovery or settlement for contract assets is normally within one year. The decrease in contract assets as at March 31, 2026 was due to that the Group made more investments or co-organizer in different event projects rather than events made by the Group as organizer.
NOTE – 7 ACCOUNTS AND OTHER RECEIVABLE
Accounts other receivable consisted of the following:
SCHEDULE OF ACCOUNTS AND OTHER RECEIVABLE
| 2025 | 2026 | |||||||
| As of March 31, | ||||||||
| 2025 | 2026 | |||||||
| HKD | HKD | |||||||
| Accounts receivable from third parties, net | ||||||||
| Other receivables for investments, disposal of intangible assets and concert tickets | ||||||||
| Total Accounts and other receivables | $ | $ | ||||||
The Company generally conducts its business with creditworthy third parties. The Company determines, on a continuing basis, the probable losses and an allowance for doubtful accounts, based on several factors including payment history, historical bad debt/write-off experience and forecasted economic and market conditions. Accounts receivable are written off after exhaustive collection efforts occur and the receivable is deemed uncollectible. In addition, receivable balances are monitored on an ongoing basis and its exposure to bad debts is not significant. Provision for allowance were nil during the years ended March 31, 2025 and 2026, respectively.
| F-19 |
NOTE – 8 EQUIPMENT, NET
Equipment consisted of the following:
SCHEDULE OF EQUIPMENT
| 2024 | 2025 | 2026 | ||||||||||
| As of March 31, | ||||||||||||
| 2024 | 2025 | 2026 | ||||||||||
| HKD | HKD | HKD | ||||||||||
| Office equipment, at cost | $ | $ | $ | |||||||||
| Leasehold improvement, at cost | ||||||||||||
| Total | ||||||||||||
| Less: accumulated depreciation | ( | ) | ( | ) | ||||||||
| Equipment, net | $ | $ | $ | |||||||||
Depreciation
expense for the years ended March 31, 2024, 2025 and 2026 were HKD
NOTE – 9 LEASES
As
of March 31, 2024, 2025 and 2026, the Group, as lessee, subsisted of the following lease contracts for office premises and finance lease
for motor vehicles. Except for the variable lease payment of HK$
| (a) | Right-of-use assets | |
| The carrying amounts of the Group’s right-of-use assets and the movements during the year are as follows: |
SCHEDULE OF RIGHT OF USE ASSETS
| Office Premises | Motor vehicles | Shops | Total | |||||||||||||
| HKD | HKD | HKD | HKD | |||||||||||||
| As at April 1, 2023 | ||||||||||||||||
| Additions | ||||||||||||||||
| Disposal | ( | ) | ( | ) | ||||||||||||
| Early termination of operating lease | ( | ) | ( | ) | ||||||||||||
| Depreciation charge | ( | ) | ( | ) | ( | ) | ||||||||||
| As at March 31, 2024 | ||||||||||||||||
| Additions | ||||||||||||||||
| Depreciation | ( | ) | ( | ) | ( | ) | ||||||||||
| Impairment | ( | ) | ( | ) | ||||||||||||
| As at March 31, 2025 | ||||||||||||||||
| Right-of-use assets, beginning balance | ||||||||||||||||
| Depreciation | ( | ) | ( | ) | ||||||||||||
| As at March 31, 2026 | ||||||||||||||||
| Right-of-use assets, ending balance | ||||||||||||||||
| F-20 |
| (b) | Lease liabilities | |
| The carrying amount of lease liabilities and the movements during the year are as follows: |
SCHEDULE OF LEASE LIABILITIES
| 2024 | 2025 | 2026 | ||||||||||
| HKD | HKD | HKD | ||||||||||
| Carrying amount at April 1 | ||||||||||||
| Carrying amount, beginning balance | ||||||||||||
| New leases | ||||||||||||
| Accretion of interest recognized during the year | ||||||||||||
| Early termination of operating lease during the year | ( | ) | ||||||||||
| Payments | ( | ) | ( | ) | ( | ) | ||||||
| Carrying amount at March 31 | ||||||||||||
| Analyzed into: | ||||||||||||
| Current portion | ||||||||||||
| Non-current portion | ||||||||||||
| Total | ||||||||||||
| Carrying amount, ending balance | ||||||||||||
The following tables summarize the maturity of lease liabilities as at March 31, 2024, 2025 and 2026:
SCHEDULE OF MATURITY LEASE LIABILITIES
| 2024 | 2025 | 2026 | ||||||||||
| HKD | HKD | HKD | ||||||||||
| With one year | ||||||||||||
| One to two years | ||||||||||||
| Two to three years | ||||||||||||
| Total | ||||||||||||
| (c) | The amounts recognized in profit or loss in relation to leases are as follows: |
SCHEDULE OF RECOGNIZED IN PROFIT OR LOSS
| 2024 | 2025 | 2026 | ||||||||||
| HKD | HKD | HKD | ||||||||||
| Loss/(Gain) on early termination | ( | ) | ||||||||||
| Interest on lease liabilities | ||||||||||||
| Impairment | ||||||||||||
| Depreciation: | ||||||||||||
| Depreciation charge of right-of-use assets | ||||||||||||
| Total amount recognized in statement of operations | ||||||||||||
| F-21 |
NOTE – 10 INVESTMENT ON EVENT PROJECTS
SCHEDULE OF INVESTMENTS
| 2025 | 2026 | |||||||
| As of March 31, | ||||||||
| 2025 | 2026 | |||||||
| HKD | HKD | |||||||
| Investment on event projects | $ | $ | ||||||
The
investment on event projects represented monetary investments in event projects which the Group does not involve event operations and
has return on investments based on percentage of amounts invested in the event over net profit or loss of the event in accordance with
binding agreements. As at March 31, 2025 and March 31, 2026, those investments in events are either expected to be completed or with
conditional right to recall within 12 months. Impairment of investment on event projects for the years ended March 31, 2025 and 2026 were and HK$
NOTE – 11 INTANGIBLE ASSETS, NET
SCHEDULE OF INTANGIBLE ASSETS NET
| 2025 | 2026 | |||||||
| As of March 31, | ||||||||
| 2025 | 2026 | |||||||
| HKD | HKD | |||||||
| Balance brought forward | ||||||||
| Additions | $ | $ | ||||||
| Less: transfer to joint operations parties | ( | ) | ( | ) | ||||
| Less: amortization | ( | ) | ||||||
| Less: disposal | ( | ) | ||||||
| Intangible assets, net | $ | $ | ||||||
The
balance represented licenses acquired for upcoming events. For events with co-organizers, relevant licenses will be transferred to joint
operations parties as contract costs and then recognized based on the agreed terms of the agreement with joint operations parties over
the event period as cost of revenue. Amortization expense for the years ended March 31, 2025 and 2026 were HKD
NOTE – 12 DEPOSITS AND PREPAYMENTS
SCHEDULE OF DEPOSITS AND PREPAYMENTS
| 2025 | 2026 | |||||||
| As of March 31, | ||||||||
| 2025 | 2026 | |||||||
| HKD | HKD | |||||||
| Rental and other deposits | $ | $ | ||||||
| Prepayments for events | ||||||||
| Prepayments for research and development of ERP system | ||||||||
| Prepaid administrative expenses | ||||||||
| Deposits and prepayments | $ | $ | ||||||
Rental and other deposits represented rental deposits for office and shops and other deposits mainly for e-ticket system.
Prepayment for events represented prepayments for events which had not occurred at the end of the reporting period.
Prepayment for research and development of ERP system represented advance payments for research and development activities on the Group’s enterprise resource planning (ERP) system. These expenditures cover contracted services such as system design, customization, and testing work to be performed by external vendors. The prepayment reflects amounts paid in advance for project milestones not yet delivered as at the reporting date.
Prepaid administrative expenses represented prepayments for the investor and public relations expenses and senior officers’ liability insurance covering until July 2027, as well as professional fees for counsel.
NOTE – 13 AMOUNT DUE FROM/(TO) JOINT OPERATION PARTIES
SCHEDULE OF AMOUNT DUE FROM/(TO) JOINT OPERATION PARTIES
| 2025 | 2026 | |||||||
| As of March 31, | ||||||||
| 2025 | 2026 | |||||||
| HKD | HKD | |||||||
| Amount due from/(to) joint operation parties | $ | $ | ||||||
The balance represented the amount due from/(to) joint operation parties for co-organizers with profit sharing for the event jointly operated. The relevant amount will be settled after the events completed.
NOTE – 14 INVENTORY
SCHEDULE OF INVENTORY
| 2025 | 2026 | |||||||
| As of March 31, | ||||||||
| 2025 | 2026 | |||||||
| HKD | HKD | |||||||
| Finished goods | $ | $ | ||||||
The balance as of March 31, 2025 represented finished goods to be sold at merchandise trading.
| F-22 |
NOTE – 15 TRADE AND OTHER PAYABLES
SCHEDULE OF TRADE AND OTHER PAYABLES
| 2025 | 2026 | |||||||
| As of March 31, | ||||||||
| 2025 | 2026 | |||||||
| HKD | HKD | |||||||
| Trade payables | $ | $ | ||||||
| Payables to an investment partner | ||||||||
| Accrued salaries and bonus | ||||||||
| Other accrued expenses | ||||||||
| Trade and other payables | $ | $ | ||||||
| Proceeds of subsequent issuance of ordinary shares received in advance | ||||||||
The payables to an investment partner represents funds received by the Group from a third-party investor to finance specific event projects. Under the terms of the agreement, the investment partner provides capital to the Group for the purpose of investing in event-related projects. In return, the investment partner is entitled to a share of the net returns (or bears a share of the losses) generated by those projects, in proportion to the percentage funded based on budget cost. The Group accounts for the amounts received as a financial liability until the underlying event is completed and the partner’s return entitlement is settled.
Subsequent
to the year ended March 31, 2026, the Company completes the placement of shares to a group of investors for a total consideration of
US$
An aging analysis of the trade and bills payables as at the end of the reporting period, based on the invoice date, is as follows:
SCHEDULE OF TRADE AND BILLS PAYABLE
| 2025 | 2026 | |||||||
| As of March 31, | ||||||||
| 2025 | 2026 | |||||||
| HKD | HKD | |||||||
| Within 1 month | $ | $ | ||||||
| 1 to 3 months | ||||||||
| Over 3 months | ||||||||
| Total | $ | $ | ||||||
NOTE – 16 DIVIDEND
SCHEDULE OF DIVIDEND
| 2024 | 2025 | 2026 | ||||||||||
| Years ended March 31, | ||||||||||||
| 2024 | 2025 | 2026 | ||||||||||
| HKD | HKD | HKD | ||||||||||
| Interim dividend | $ | $ | $ | |||||||||
For
the year ended March 31, 2024, the Group declared and paid a dividend of HK$
| F-23 |
Basic net profit/(loss) per share is computed using the weighted average number of Class A Ordinary Shares outstanding during the year. The following table sets forth the computation of basic and diluted net profit/(loss) per share for the years ended March 31, 2024, 2025 and 2026:
| 2024 | 2025 | 2026 | ||||||||||
| Years ended March 31, | ||||||||||||
| 2024 | 2025 | 2026 | ||||||||||
| HKD | HKD | HKD | ||||||||||
| Net profit/(loss) attributable to ordinary shareholders | $ | $ | $ | ( | ) | |||||||
| Weighted average Class A Ordinary Shares outstanding | ||||||||||||
| – Basic | ||||||||||||
| Weighted average Class A Ordinary Shares outstanding | ||||||||||||
| – Diluted | ||||||||||||
| Weighted average Class B Ordinary Shares outstanding – Basic and diluted | ||||||||||||
| Net (loss)/profit per Class A Ordinary Share – Basic | $ | $ | $ | ( | ) | |||||||
| Net (loss)/profit per Class A Ordinary Share – Diluted | $ | $ | $ | ( | ) | |||||||
As Class B Ordinary Shares do not have right to dividend there is no impact when calculated basic net profit per Class A and Class B Ordinary Shares. However, as Class B Ordinary Shares have the right to convert into Class A Ordinary Shares, there is dilutive impact during the year ended March 31, 2024 and 2025. For the year ended March 31, 2026, the Group incurred a net loss attributable to ordinary shareholders, as such the potential Class A Ordinary Shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS.
NOTE – 18 INTEREST BEARING BANK BORROWINGS
SCHEDULE
OF INTEREST BEARING BANK BORROWINGS
| 2025 | 2026 | |||||||
| As of March 31, | ||||||||
| 2025 | 2026 | |||||||
| HKD | HKD | |||||||
| Bank loans secured and repayable | ||||||||
| Within 12 months | ||||||||
| Over 1 year | ||||||||
| Total | ||||||||
During
the year ended March 31, 2024, the Group entered into loan agreements with a financial institution in Hong Kong to borrow loans of HK$
As of March 31, 2025 and 2026, the bank loans of the Company were secured by personal guarantee from Ms. Seto, the director and shareholder of the Company.
Interest
related to the bank loans and facilities was HK$
Principal repayments to maturity by fiscal year are as follows:
SCHEDULE OF PRINCIPAL REPAYMENTS TO MATURITY
| Year ended March 31, | HKD | |||
| 2026 | $ | |||
| 2027 | ||||
| Thereafter | ||||
| Total | $ | |||
| F-24 |
Authorized shares
The Company was incorporated in the Cayman Islands with limited liability on July 5, 2024 and the initial share was transferred to Ms. Seto on the same date for cash at par. The initial authorized share capital of the Company is US$ divided into Shares of a par value of US$ each. The details about reorganization subsequent to the balance sheet date is stated in note 21.
On August 19, 2024, Ms. Seto and Kilo Wonders (Ms. Yip’s nominee) subscribed for and Shares for cash at par.
Subsequently, on even date, Ms. Seto, Kilo Wonders and Yield Rights further subscribed for , and Shares of the Company for cash at par. Following this step, the Company is held as to , and Shares by Ms. Seto, Kilo Wonders and Yield Rights respectively representing %,% and % of the issued share capital of the Company.
On July 25, 2024, Goal Success was incorporated in the BVI with limited liability. Goal Success is authorized to issue a maximum of shares of a single class each with a par value of US$. On July 25, 2024, the Company subscribed for, and Goal Success allotted and issued to it share for cash at par.
On March 6, 2025, Ms. Seto, Ms. Yip and the Company entered into an agreement whereby Ms. Seto and Ms. Yip transferred their entire shareholding interest in Trendic to the Company’s nominee, Goal Success. The consideration is settled by the Company allotting and issuing Share to each of Ms. Seto and Kilo Wonders (Ms. Yip’s nominee), credited as fully paid and Goal Success allotting and issuing share to the Company credited as fully paid.
On March 31, 2025 for purposes of recapitalization in anticipation of the initial public offering, the Company’s shareholders passed resolutions to (i) sub-divide each of the issued and unissued shares in its share capital of par value US$ each into shares of par value US$each, (ii) to re-classify and re-designate its authorized share capital into shares with a par value of US$ each comprising of (a) Class A Ordinary Shares with a par value of US$ each and (b) Class B Ordinary Shares with a par value of US$ each and (iii) to adopt an amended and restated memorandum of association and articles of association reflecting such amended share capital and containing the rights, preferences and privileges attached to each class of shares. Concurrently, Ms. Seto, Prime Crest, Fuji Holdings, Kilo Wonders, Yield Rights and Allied Target surrendered , , , , and Class A Ordinary Shares to the Company, respectively.
On March 31, 2025, the Company allotted and issued Class B Ordinary Shares to Ms. Seto for cash at par, and a resolution was passed on March 31, 2025 giving effect to the same.
As at March 31, 2026, the subscription receivables has yet been paid.
On July 23, 2025, the Company completed the initial public offering and listed its Class A Ordinary Shares on the Nasdaq Capital Market under the symbol “TDIC”. With the initial public offering, the Company received aggregate gross proceeds of US$ million from the Offering, prior to deducting underwriting discounts and other offering expenses and a total of Class A Ordinary Shares were issued.
On August 20, 2025, the Company allotted and issued Class A Ordinary Shares to various service providers in consideration for marketing and consultancy services to be rendered over a 12-month period, pursuant to a resolution passed on August 18, 2025. The Group rebutted the presumption that the fair value of goods or services received could be measured directly because the consulting services were highly specialized, bespoke in nature, and not comparable to standard market transactions. Observable market prices for similar services were not available, and management determined that any attempt to measure fair value directly would not provide a reliable estimate. Consequently, the fair value of the goods and services received was measured indirectly, by reference to the fair value of the equity instruments granted. The fair value of equity shares granted was determined at the date the services were rendered, by reference to the observable market price of the Company’s shares quoted on NASDAQ on that date. The resulting fair value was recognized as an expense in profit or loss over the period in which the related services were received, with a corresponding increase in equity. Share-based payment expense for the year ended March 31, 2025 and 2026 were and HKD, respectively.
On
April 20, 2026, the Company made effective a
On
June 15, 2026, the Company made effective a
The Company has retroactively presented all shares and per share data for all periods presented. As a result of the issuances and reclassification stated above, the Company had authorized Class A Ordinary Shares, par value of US$, of which and Class A Ordinary Shares were issued and outstanding as of March 31, 2025 and 2026, respectively. The Company had authorized Class B Ordinary Shares, par value of US$, of which and Class B Ordinary Shares were issued and outstanding as of March 31, 2024 and 2025, respectively.
| F-25 |
NOTE – 20 INCOME TAXES
The provision for income taxes consisted of the following:
SCHEDULE OF PROVISION FOR INCOME TAXES
| 2024 | 2025 | 2026 | ||||||||||
| Years ended March 31, | ||||||||||||
| 2024 | 2025 | 2026 | ||||||||||
| HKD | HKD | HKD | ||||||||||
| Current | $ | $ | $ | |||||||||
| Deferred | ||||||||||||
| Total income tax expense | $ | $ | $ | |||||||||
The effective tax rate in the years presented is the result of the mix of income earned in various tax jurisdictions that apply a broad range of income tax rate. The Company’s subsidiaries mainly operate in Hong Kong that are subject to taxes in the jurisdictions in which they operate, as follows:
Cayman Islands
Under the current laws of the Cayman Islands, the Company is not subject to tax on income or capital gain. Additionally, upon payments of dividends to the shareholders, no Cayman Islands withholding tax will be imposed.
BVI
LTV is considered to be an exempted British Virgin Islands Company and is presently not subject to income taxes or income tax filing requirements in the British Virgin Islands.
Hong Kong
TIL
is incorporated in Hong Kong and are subject to Hong Kong Profits Tax on the taxable income as reported in its statutory financial statements
adjusted in accordance with relevant Hong Kong tax laws. Under the two-tiered profit tax rates regime, the profit tax rate for the first
$
The reconciliation of income tax rate to the effective income tax rate based on loss before income taxes for the years ended March 31, 2024, 2025 and 2026 are as follows:
SCHEDULE OF EFFECTIVE INCOME TAX RATE
| 2024 | 2025 | 2026 | ||||||||||
| HKD | HKD | HKD | ||||||||||
| Profit/(Loss) before income taxes | $ | $ | $ | ( | ) | |||||||
| Statutory income tax rate | % | % | % | |||||||||
| Income tax benefit at statutory rate | ( | ) | ||||||||||
| Effect of two-tier tax regime | ||||||||||||
| Items not subject to taxes | ( | ) | ( | ) | ( | ) | ||||||
| Over/(Under) provision of tax | ||||||||||||
| Tax loss from previous periods utilized | ( | ) | ||||||||||
| Temporary timing difference | ( | ) | ||||||||||
| Income tax expense | $ | $ | $ | |||||||||
Uncertain tax positions
The Company evaluates the uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measure the unrecognized benefits associated with the tax positions. As of March 31, 2025 and 2026, the Company did not have any significant unrecognized uncertain tax positions. The Company did not incur any interest and penalties related to potential underpaid income tax expenses for the years ended March 31, 2024, 2025 and 2026 and also did not anticipate any significant increases or decreases in unrecognized tax benefits in the next 12 months from March 31, 2026.
| F-26 |
NOTE – 21 RELATED PARTY TRANSACTIONS AND BALANCES
The related party of the Company with whom transactions are reported in these financial statements are as follows:
| Name of Individual | Relationship with the Company | |
| Ms. Seto Wai Yue | Shareholder and Director of the Company | |
| Exit (HK) Limited | Ms. Seto is a 40% shareholder and sole director of Exit (HK) | |
| Earthling Catering Limited | Ms. Seto is a 64% shareholder and a director of Earthling | |
| Exit Catering Limited | Ms. Seto was a 51% shareholder and director of Exit Catering Limited (Exit Catering Limited was deregistered during the year ended Maech 31, 2026) | |
| Exit Operations Limited | Exit Catering Limited was a 60% shareholder and director of Exit Operations Limited (Following the deregistration of Exit Catering Limited during the year months ended March 31, 2026, Ms. Seto’s beneficial interest in Exit Operations Limited was lost) | |
| I Dao Cao Limited | Brother of Ms. Seto is the sole shareholder and director of I Dao Cao Limited |
SCHEDULE OF RELATED PARTY TRANSACTIONS
| 2025 | 2026 | |||||||
| As of March 31, | ||||||||
| 2025 | 2026 | |||||||
| HKD | HKD | |||||||
| Seto Wai Yue | $ | ( | ) | $ | ( | ) | ||
| Amount due from/(to) a shareholder | $ | ( | ) | $ | ( | ) | ||
On
April 10, 2024, Ms. Seto Wai Yue entered into an interest-free loan facility agreement with TIL, for a revolving loan facility agreement
of up to HK$
SCHEDULE OF PROCEEDS AND PAYMENTS TO SHAREHOLDER
| 2024 | 2025 | 2026 | ||||||||||
| Years ended March 31, | ||||||||||||
| 2024 | 2025 | 2026 | ||||||||||
| HKD | HKD | HKD | ||||||||||
| Proceeds from a shareholder | $ | $ | $ | |||||||||
| Payments to a shareholder | ( | ) | ( | ) | ( | ) | ||||||
| Proceeds and payments to a shareholder | ( | ) | ( | ) | ( | ) | ||||||
Amount due from/(to) a related party
SCHEDULE OF AMOUNT DUE FROM TO RELATED PARTY
| March 31, 2025 | March 31, 2026 | |||||||
| As of | As of | |||||||
| March 31, 2025 | March 31, 2026 | |||||||
| HKD | HKD | |||||||
| I Dao Cao Limited | $ | ( | ) | $ | ||||
| Exit Operations Limited | $ | $ | ||||||
| Amount due from/(to) a related party | $ | $ | ||||||
| F-27 |
As of March 31, 2025, the amount due from I Dao Cao represented deposits for concert tickets for resell. The relevant concert tickets will be delivered before the concert commenced. The amount due from Exit Operations Limited represented deposits for café operation for events and will be used up when provision of café services for upcoming events.
Revenue
SCHEDULE OF REVENUE FROM RELATED PARTY
| 2024 | 2025 | 2026 | ||||||||||
| Years ended March 31, | ||||||||||||
| 2024 | 2025 | 2026 | ||||||||||
| HKD | HKD | HKD | ||||||||||
| Exit (HK) Limited | ||||||||||||
| - Provision of event management services | ||||||||||||
| - Sales of goods | ||||||||||||
| - Design and others | ||||||||||||
| Exit Catering Limited – sale of goods | ||||||||||||
| Exit Operations Limited | ||||||||||||
| - Revenue of café operation | ||||||||||||
| - Sales of goods | ||||||||||||
| Earthling Catering Limited – design and others | ||||||||||||
| $ | $ | $ | ||||||||||
Cost of Revenue
SCHEDULE OF COST REVENUE
| 2024 | 2025 | 2026 | ||||||||||
| Years ended March 31, | ||||||||||||
| 2024 | 2025 | 2026 | ||||||||||
| HKD | HKD | HKD | ||||||||||
| Exit Operations Limited –cost of café operation | $ | - | $ | 264,350 | $ | - | ||||||
| Exit HK Limited – royalty fee | $ | $ | $ | |||||||||
Defined contribution insurance to Ms. Seto
During
the year ended March 31, 2025, the Company purchased insurance for Ms. Seto with defined contribution of US$
Dividend
For
the year ended March 31, 2024, Trendic declared and paid a dividend of HK$
NOTE – 22 CONCENTRATIONS OF RISK
The Company is exposed to the following concentrations of risk:
(a) Major customers
For the years ended March 31, 2024, 2025 and 2026, there were individual customer accounts for 10% or more of the Company’s revenues as stated in note 3 above.
Most of the customers are located in Hong Kong.
| F-28 |
(b) Major vendors
For the years ended March 31, 2024, 2025 and 2026, the vendors who accounted for 10% or more of the Company’s cost of revenue and is presented as follows:
SCHEDULES OF CONCENTRATION OF RISK
| 2024 | 2025 | 2026 | 2024 | 2025 | 2026 | |||||||||||||||||||
| Vendors | Percentage of respective fiscal year | Year ended March 31, | ||||||||||||||||||||||
| 2024 | 2025 | 2026 | 2024 | 2025 | 2026 | |||||||||||||||||||
| HKD | HKD | HKD | ||||||||||||||||||||||
| Vendor A | % | % | % | |||||||||||||||||||||
| Vendor B | % | |||||||||||||||||||||||
| Vendor C | % | |||||||||||||||||||||||
| Vendor D | % | |||||||||||||||||||||||
| Cost of revenue | % | |||||||||||||||||||||||
Most of the vendors are located in Hong Kong.
(b) Credit risk
Please refer to note 2 for details.
(c) Interest rate risk
As the Company has no significant interest-bearing assets, the Company’s income and operating cash flows are substantially independent of changes in market interest rates.
(d) Economic and political risk
The Company’s major operations are conducted in Hong Kong. Accordingly, the political, economic, and legal environments in Hong Kong, as well as the general state of Hong Kong’s economy may influence the Company’s business, financial condition, and results of operations.
(e) Liquidity risk
Please refer to notes 2, 9 and 18 for details.
NOTE – 23 COMMITMENTS AND CONTINGENCIES
The Company currently is not aware of any legal proceedings or claims that it believes will have, individually or in the aggregate, a material adverse effect on its business, financial condition, operating results, or cash flows.
Commitment on investments for event projects
The
Company signed few investments for event projects as at March 31, 2026 and there are outstanding commitments for investments of HK$
Except for the above, as of March 31, 2025 and 2026, the Company has no material commitments or contingencies.
NOTE – 24 SUBSEQUENT EVENTS
Reverse Stock Split – April 2026 and June 2026
On April 20, 2026, the Company made effective a
On June 15, 2026, the Company further
made effective a
Placement of Shares
On April 21, 2026, the Company issued Class A Ordinary Shares (post-split) to a group of investors. The total funds received from these investors are US$.
On June 22, 2026, the Company entered into a securities purchase agreement with Imperial Vision Fund SPC Series 1SP, issuing (post-split) Class A Ordinary Shares at a purchase price of US$ per Class A Ordinary Share, for aggregate gross proceeds of US$. This was conducted as an offshore offering in reliance on Regulation S.
On June 25, 2026, the Company entered into a securities purchase agreement with Golden Crown Consulting Limited, issuing (post-split) Class A Ordinary Shares at a purchase price of US$ per Class A Ordinary Share, for aggregate gross proceeds of US$. Like the other recent placements, this was an offshore offering conducted in reliance on Regulation S.
On July 7, 2026, the Company entered into a securities purchase agreement with its Chief Executive Officer, Ms. Seto Wai Yue, issuing an aggregate of Class A Ordinary Shares and Class B Ordinary Shares at an aggregate price of approximately US$.
Share Transfer Between Chief Executive Officer and Shareholder
On August 6, 2026, Ms. Seto entered into a Sale
and Purchase Agreement to purchase Class A Ordinary Shares at a purchase price of US$ per share for an aggregate purchase
price of US$ from Imperial Vision Fund SPC Series 1SP. As of the date of this Annual Report, Ms. Seto beneficially owns an aggregate
of ordinary shares, consisting of Class A Ordinary Shares and Class B Ordinary Shares, representing approximately
Entry into Memorandum of Understanding
On May 12, 2026, the Company has entered into a non-binding Memorandum of Understanding (“MoU”) with LinkFung Innovation Limited, a designated Service Provider, to collaborate on the development, implementation, and deployment of a comprehensive AI-Powered Intelligent Image Library Platform. The project scope includes integrating advanced artificial intelligence features such as real-time face detection, video/photo AI-driven hashtag decoding, and intelligent content-based filtering, supported by a scalable cloud infrastructure and a high-performance database system supporting vector embeddings for AI search and recommendations.
Investment in mid-term oversea anime cultural hub projects
Further to the investment arrangements entered during the year ended March 31, 2026 in relation to two mid-term anime cultural hub projects in Taiwan and Thailand, subsequent to the reporting date, the Group entered into further investment arrangements in relation to the mid-term anime cultural hub projects in China and Korea. Under these agreements, the Group participates as an investor alongside the local operator and other investment partners. These investments are expected to run for three to four years.
| F-29 |
ITEM 19. EXHIBITS
EXHIBIT INDEX
| * | Filed herewith |
| 100 |
SIGNATURE
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
| Signature | Title | Date | ||
| /s/ Seto Wai Yue | August 17, 2026 | |||
| Seto Wai Yue | Director and Chief Executive Officer (principal executive officer) |
| 101 |
Exhibit 1.3
Exhibit 2.1
Exhibit 2.2
DESCRIPTION OF THE REGISTRANT’S SECURITIES
REGISTERED PURSUANT TO SECTION 12 OF THE
SECURITIES EXCHANGE ACT OF 1934
As of the date of this annual report on Form 20-F of which this Exhibit 2.2 is a part, our authorized share capital is US$100,000 divided into 80,000,000 shares with a par value of US$0.00125 each comprising of (a) 76,000,000 Class A Ordinary Shares with a par value of US$0.00125 each and (b) 4,000,000 Class B Ordinary Shares with a par value of US$0.00125 each.
Our Memorandum and Articles of Association
The following are summaries of material provisions of our memorandum and articles of association and of the Companies Act, insofar as they relate to the material terms of our Class A Ordinary Shares.
Objects of Our Company. Under our memorandum and articles of association, the objects of our company are unrestricted, and we are capable of exercising all the functions of a natural person of full capacity irrespective of any question of corporate benefit, as provided by section 27(2) of the Companies Act.
Ordinary Shares. Our Ordinary Shares are issued in registered form and are issued when registered in our register of members. We may not issue shares to bearer. Our shareholders who are non-residents of the Cayman Islands may freely hold and vote their shares.
Class A Ordinary Shares. Each Class A Ordinary Share is entitled to one (1) vote on any matter on which action of the shareholders of the Company is sought. Our Class A Ordinary Shares are not convertible into Class B Ordinary Shares under any circumstances.
Class B Ordinary Shares. Each Class B Ordinary Share is entitled to twelve (12) votes on any matter on which action of the shareholders of the Company is sought. Each Class B Ordinary Share is convertible into one Class A Ordinary Share at the option of the holder thereof on a one-for-one basis. In addition, upon any sale, transfer, assignment or disposition of Class B Ordinary Shares by a holder thereof to any person or entity which is not an Affiliate of such holder, such Class B Ordinary Shares shall be automatically and immediately converted into an equal number of Class A Ordinary Shares.
Dividends. Subject to the Companies Act and our Articles of Association, our board of directors may from time to time declare dividends in any currency to be paid to the holders of Class A Ordinary Shares. Holders of Class B Ordinary Shares are not entitled to any dividends or distributions. Our dividends may be declared and paid out of our profits, realized or unrealized, or from any reserve set aside from profits which our board of directors determine are no longer needed. Dividends may also be declared and paid out of share premium account or any other fund or account which can be authorized for this purpose in accordance with the Companies Act. No dividend may be declared and paid unless our directors determine that, immediately after the date of payment, we will be able to pay our debts as they become due in the ordinary course of business and we have funds lawfully available for such purpose.
Except in so far as the rights attaching to, or the terms of issue of, any share may otherwise provide (i) all dividends shall be declared and paid according to the amounts paid up on the shares in respect of which the dividend is paid, although no amount paid up on a share in advance of calls shall for this purpose be treated as paid up on the share; and (ii) all dividends shall be apportioned and paid pro rata in accordance with the amount paid up on the shares.
Our Board may deduct from any dividend or other monies payable to any member all sums of money (if any) presently payable by him to our Company on account of calls, instalments or otherwise.
Whenever our Board or our Company in general meeting has resolved that a dividend should be paid or declared on any class of the share capital of the Company, our board of directors may resolve:
| a) | that such dividend be satisfied wholly or in part in the form of an allotment of shares credited as fully paid up, provided that the members entitled to such dividend will be entitled to elect to receive such dividend (or part thereof) in cash in lieu of such allotment; or |
| b) | that the members entitled to such dividend will be entitled to elect to receive an allotment of shares credited as fully paid up in lieu of the whole or such part of the dividend as our board of directors may think fit. |
Our Board may determine in respect of any one particular dividend of our Company that such dividend may be satisfied wholly in the form of an allotment of shares credited as fully paid up without offering any right to members to elect to receive such dividend in cash in lieu of such allotment.
Any dividend, interest or other sum payable in cash to the holder of shares may be paid by cheque or warrant sent through the post. Every such cheque or warrant shall be made payable to the order of the person to whom it is sent and shall be sent at the holder’s or joint holders’ risk and payment of the cheque or warrant by the bank on which it is drawn shall constitute a good discharge to our Company. Any one of two or more joint holders may give effectual receipts for any dividends or other monies payable or property distributable in respect of the shares held by such joint holders.
Whenever our Board or our Company in general meeting has resolved that a dividend be paid or declared, our Board may further resolve that such dividend be satisfied wholly or in part by the distribution of specific assets of any kind.
All dividends, or distributions unclaimed for six years from the date of having been declared shall be forfeited and shall revert to our Company.
No dividend payable by our Company on or in respect of any share shall bear interest against our Company.
Differences in Corporate Law
The Companies Act is derived, to a large extent, from the older Companies Acts of England but does not follow recent English statutory enactments and accordingly there are significant differences between the Companies Act and the current Companies Act of England. In addition, the Companies Act 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 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 undertaking, 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 undertaking, 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 plan must be filed with the Registrar of Companies of the Cayman Islands together with a declaration as to the solvency of the consolidated or surviving company, a list of 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. Court approval is not required for a merger or consolidation which is effected in compliance with these statutory procedures.
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.
Save in certain limited circumstances, a shareholder of a Cayman constituent company who dissents from the merger or consolidation is entitled to payment of the fair value of his shares (which, if not agreed between the parties, will be determined by the Cayman Islands court) upon dissenting to the merger or consolidation, provided the dissenting shareholder complies strictly with the procedures set out in the Companies Act. The exercise of dissenter rights will preclude the exercise by the dissenting shareholder of any other rights to which he or she might otherwise be entitled by virtue of holding shares, save for the right to seek relief on the grounds that the merger or consolidation is void or unlawful.
Separate from the statutory provisions relating to mergers and consolidations, the Companies Act also contains statutory provisions that facilitate the reconstruction and amalgamation of companies by way of schemes of arrangement, provided that the arrangement is approved (i) in the case of a shareholder scheme, by seventy-five per cent in value of the members or class of members, as the case may be, with whom the arrangement is to be made and (ii) in the case of a creditor scheme only, by a majority in number of each class of creditors with whom the arrangement is to be made and who must in addition represent seventy-five per cent 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. 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:
| ● | the statutory provisions as to the required majority vote have been met; |
| ● | 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; |
| ● | 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 |
| ● | 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 a dissentient minority shareholder upon a tender offer. When a tender offer is made and accepted by holders of 90% of the shares for which the offer is made, the offeror may, within a two-month period from such acceptance, require the holders of the remaining shares to transfer such shares to the offeror on the terms of the offer. An objection can be made to the Grand Court of the Cayman Islands, but this is unlikely to succeed in the case of an offer which has been so approved unless there is evidence of fraud, bad faith or collusion or lack of compliance with the statutory requirements.
If an arrangement and reconstruction by way of scheme of arrangement is thus approved and sanctioned, or if a tender offer is made and accepted, in accordance with the foregoing statutory procedures, a 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 Delaware corporations, providing rights to receive payment in cash for the judicially determined value of the shares.
The Companies Act also contains statutory provisions which provide that a company may present a petition to the Grand Court of the Cayman Islands for the appointment of a restructuring officer on the grounds that the company (a) is or is likely to become unable to pay its debts within the meaning of section 93 of the Companies Act; and (b) intends to present a compromise or arrangement to its creditors (or classes thereof) either, pursuant to the Companies Act, the law of a foreign country or by way of a consensual restructuring. The petition may be presented by a company acting by its directors, without a resolution of its members or an express power in its articles of association. On hearing such a petition, the Cayman Islands court may, among other things, make an order appointing a restructuring officer or make any other order as the court thinks fit.
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, the Cayman Islands courts can be expected to follow and apply the common law principles (namely the rule in Foss v. Harbottle and the exceptions thereto) so that a non-controlling shareholder may be permitted to commence a class action against or derivative actions in the name of the company to challenge actions where:
| ● | a company acts or proposes to act illegally or ultra vires; |
| ● | the act complained of, although not ultra vires, could only be effected duly if authorized by more than the number of votes which have actually been obtained; and |
| ● | those who control the company are perpetrating a “fraud on the minority.” |
A shareholder may have a direct right of action against us where the individual rights of that shareholder have been infringed or are about to be infringed.
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 civil fraud or the consequences of committing a crime. Our memorandum and articles of association provide that that we shall indemnify our directors and officers, and their personal representatives, against all actions, proceedings, costs, charges, expenses, losses, damages or liabilities incurred or sustained by such persons, other than by reason of such person’s dishonesty, willful 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 our directors and executive officers that provide such persons with additional indemnification beyond that provided in our 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 acts 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, 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 owes the following duties to the company — a duty to act in good faith in the best interests of the company, a duty not to make a personal profit based on his position as director (unless the company permits him to do so), a duty not to put himself in a position where the interests of the company conflict with his personal interest or his 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. It was previously considered that a director need not exhibit in the performance of his duties a greater degree of skill than may reasonably be expected from a person of his knowledge and experience. However, English and Commonwealth courts have moved towards an objective standard with regard to the required skill and care and these authorities are likely to be followed in the Cayman Islands.
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 permits us to eliminate the right of shareholders to act by written consent and our Memorandum and Articles of Association provide that any action required or permitted to be taken at any general meetings may be taken upon the vote of shareholders at a general meeting duly noticed and convened in accordance with our Memorandum and Articles of Association and may not be taken by written consent of the shareholders without a meeting.
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 does not provide shareholders with any right to requisition a general meeting or 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 shares which carry in aggregate not less than one-third of all votes attaching to the issued and outstanding shares of our company entitled 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 resolutions so requisitioned to a vote at such meeting. Other than this right to requisition a shareholders’ meeting, our 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. As an exempted Cayman Islands company, we are not obliged by law to call shareholders’ annual general meetings.
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. There are no prohibitions in relation to cumulative voting under the laws of the Cayman Islands, but our Memorandum and Articles of Association do not provide for cumulative voting. As a result, our shareholders are not afforded any less protections or rights on this issue than shareholders of a Delaware corporation.
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 Memorandum and Articles of Association, subject to certain restrictions as contained therein, directors may be removed with or without cause, by an ordinary resolution of our shareholders. An appointment of a director may be on terms that the director shall automatically retire from office (unless he has sooner vacated office) at the next or a subsequent annual general meeting or upon any specified event or after any specified period in a written agreement between the company and the director, if any; but no such term shall be implied in the absence of express provision. Under our Memorandum and Articles of Association, a director’s office shall be vacated if the director (i) becomes bankrupt or has a receiving order made against him or suspends payment or compounds with his creditors; (ii) is found to be or becomes of unsound mind or dies; (iii) resigns his office by notice in writing to the company; (iv) without special leave of absence from our board of directors, is absent from three consecutive meetings of the board and the board resolves that his office be vacated; (v) is prohibited by law from being a director or; (vi) is removed from office pursuant to the laws of the Cayman Islands or any other provisions of our memorandum and articles of association.
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, 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 Memorandum and Articles of Association, if our share capital is divided into more than one class of shares, the rights attached to any such class may only be varied with the sanction of a special resolution passed by a majority of two-thirds of the votes cast at a separate 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. Under Cayman Islands law, our 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 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 memorandum and articles of association governing the ownership threshold above which shareholder ownership must be disclosed.
Exhibit 4.2
Exhibit 4.3
Exhibit 4.4
Exhibit
4.5
Exhibit 4.7
Exhibit 11.2
INSIDER TRADING POLICY
OF
DREAMLAND LIMITED
Introduction
Engaging in transactions involving the securities of a Company while in possession of material nonpublic information is referred to as insider trading. Material nonpublic information is information that could reasonably be expected to affect the price of a Company’s securities, whether it is positive or negative, and is generally not known or has not been made available to the investing public. At Dreamland Limited, its subsidiaries and consolidated entities (collectively, the “Company”), a variety of roles throughout the organization have access to material nonpublic information, either from time-to-time or on a more continuous basis. It is therefore critical that all officers of the Company, all members of the Company’s Board of Directors, all employees and all contractors and consultants of the Company read and understand this policy.
The Company’s Insider Trading Policy is designed to help you understand your obligations when it comes to trading in securities of the Company, and securities of the Company’s ecosystem partners and customers that in many cases have listed securities (collectively, the “Relevant Entities,” and the securities of the Relevant Entities, the “Relevant Securities”).
This policy will help you protect yourself and the Company against the potentially serious consequences of insider trading. Directors, officers, employees, contractors and consultants of the Company should always consult the Company’s compliance officer [ ] at [ ] with any questions concerning this policy.
Reporting a breach
If you believe that there has or might have been a breach of the Company’s Insider Trading Policy or any applicable insider trading laws, you should immediately report your concerns to the Company’s Compliance Officer at [ ]. Reports are kept confidential and can be made anonymously, where permitted by local law.
The Company takes every concern raised seriously and each report will be assessed fully, promptly, and fairly. The Company actively encourages people to raise concerns in a transparent and open way, so that issues can be resolved quickly and effectively. Reports may be made anonymously where the concern relates to financial accounting or fraud, and where local law and regulations allow. Subject to the requirements of applicable law and to the greatest extent possible, all reports and investigations will be treated as confidential.
Purpose
This Insider Trading Policy provides guidelines for transactions involving the Relevant Securities and the handling of material nonpublic information about the Relevant Entities.
The Company’s business relies on the safeguarding of proprietary information. The Company has established its reputation for integrity and ethical conduct, and it is critical that the Company maintains this reputation and it conducts its business in accordance with the highest ethical standards.
The Company’s Board of Directors has adopted this policy to promote compliance with any laws applicable to transactions involving the Relevant Securities and avoid the appearance of impropriety. All persons subject to this policy must comply globally with all insider trading laws and regulations that apply to them (which may be subject to amendment from time to time), in addition to complying with this policy.
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Consequences of Violations
It is important that you understand the breadth of activities that constitute illegal insider trading and the consequences of non-compliance, which can be severe. Engaging in transactions involving securities while aware of material nonpublic information relating to such securities is illegal and prohibited by insider trading laws. It is also illegal to pass along material nonpublic information to others who then trade based on that information.
The recipient of the material nonpublic information is referred to as the “tippee” and the person who transmitted the material nonpublic information is referred to as the “tipper.” Both the tippee and tipper may be subject to liability for insider trading where the tippee trades, even if the tipper does not.
All persons subject to this policy must comply with all applicable insider trading laws and regulations globally. Law enforcement authorities vigorously pursue parties globally who violate the insider trading laws and punish offenders severely. Punishment for insider trading violations is serious and could include significant fines and imprisonment.
In addition, a person’s failure to comply with this policy may subject them to Company-imposed sanctions, including dismissal for cause, whether or not the person’s failure to comply results in a violation of law.
Persons Subject to the Policy
This policy applies to all officers1 of the Company, all members of the Company’s Board of Directors, all employees and all contractors and consultants of the Company. The Company may also determine that other persons who have access to material nonpublic information should be subject to this policy. The restrictions of this policy also apply to transactions involving the Relevant Securities by any of the following individuals and entities:
| ● | any family members whose transactions involving the Relevant Securities are directed by, or are subject to, your influence or control, as further described under the heading “Transactions by Family Members and Others;” |
| ● | anyone who lives in your household, as further described under the heading “Transactions by Family Members and Others;” |
| ● | any corporation or other entity controlled or managed by you, as further described under the heading “Transactions by Entities that You Influence or Control;” |
| ● | trusts for which you are the trustee or with respect to which you have the ability to vote, transfer or sell Relevant Securities in the trust, as further described under the heading “Transactions by Entities that You Influence or Control;” |
| ● | anyone acting as your agent, nominee or person acting at your direction; and |
| ● | anyone who execute trades on your behalf. |
These restrictions apply to any Relevant Securities over which you have voting power or power to transfer or sell, as well as Relevant Securities that you own. Regulators and prosecutors may presume that trading by your family members is based on information you supplied and may treat any such transactions as if you had traded yourself.
| 1 | Each individual who is currently or was previously designated as an “officer” of the Company as defined in Rule 16a-1(f) under the Exchange Act. |
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Transactions Subject to the Policy
This policy applies to transactions involving the Relevant Securities, including in the Company ordinary shares, options to purchase ordinary shares, or any other type of securities that the Company may issue, as well as derivative securities that are not issued by the Company, such as exchange-traded put or call options or swaps relating to the Company securities. Transactions subject to this policy include purchases, sales and gifts of the Company securities made by the persons subject to this policy.
Individual Responsibility
Persons subject to this policy have ethical and legal obligations to maintain the confidentiality of information about the Relevant Entities and to not engage in transactions involving the Relevant Securities while in possession of material nonpublic information. They must not engage in illegal trading and must avoid the appearance of improper trading to preserve the Company’s reputation for adhering to the highest standards of conduct. Each person subject to this policy is responsible for ensuring compliance with this policy, and that any family member, household member or entity whose transactions are subject to this policy, as discussed below, also comply with this policy.
In all cases, the responsibility for determining whether a person is in possession of material nonpublic information rests with that person. Any action on the part of the Company, the Compliance Officer, any approval party, any director or any other employee in accordance with this policy does not in any way constitute legal advice or insulate a person from liability under applicable global securities laws.
Administration of the Policy
[ ] serves as the Compliance Officer for the purposes of this policy. The Compliance Officer, and in his absence, [ ], or another employee designated by the Compliance Officer or [ ] shall be responsible for administration of this policy and oversight of the pre-clearance process, subject to any reviews, determinations and interpretations by the Compliance Officer. All determinations and interpretations by the Compliance Officer or Sam Kai Mun shall be final and not subject to further review.
Statement of Policy
Persons subject to this policy, who are aware of material nonpublic information relating to the Relevant Entities, may not, directly, or indirectly through family members or other persons or entities:
| 1. | Engage in transactions involving the Company securities, except as otherwise specified in this policy under the headings “Exceptions to Insider Trading Policy and Trading Restrictions” and “Rule 10b5-1 Plans;” |
| 2. | Recommend, encourage or induce another person to engage in the purchase, sale or gift of any of the Company securities; |
| 3. | Disclose (either directly or via an intermediary) material nonpublic information of the Relevant Entities to persons within the Company whose jobs do not require them to have that information, or outside of the Company to any other persons, unless any such disclosure is made in accordance with the Company’s policies regarding the protection or authorized external disclosure of information regarding the Company; or |
| 4. | Assist anyone engaged in the above activities. |
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In addition, it is the policy of the Company that no director, officer or other employee of the Company (or any other person designated as subject to this policy) who, in the course of working for the Company, learns of material nonpublic information about another company (1) with which the Company does business, such as the Company’s partners, customers, vendors and suppliers, or (2) that is involved in a potential transaction or business relationship with the Company, may engage in transactions involving that other company’s securities until the information becomes public or is no longer material.
It is also the policy of the Company that it will not engage in transactions involving its securities while aware of material nonpublic information relating to the Company or Company securities, including share repurchase programs, other than in compliance with applicable law.
There are no exceptions to this policy, except as specifically noted herein. Small transactions or the existence of a personal financial emergency do not excuse you from compliance with this policy and is not a basis for an exception to this policy. Insider trading laws do not recognize any mitigating circumstances, and, in any event, even the appearance of an improper transaction must be avoided to preserve the Company’s reputation for adhering to the highest standards of conduct.
Definition of Material Nonpublic Information
Insider trading laws define the concept of material nonpublic information in a variety of ways, all of which focus on factors such as the nature of the information, the significance of the information to investors and whether the information has been adequately disseminated to the public. All persons subject to this policy must comply globally with all applicable laws and regulations regarding insider trading and the handling of material nonpublic information.
Material Information
Information is considered “material” if a reasonable investor would consider that information important in making a decision
to buy, hold or sell securities. Any information that could reasonably be expected to affect the price of a company’s securities,
whether it is positive or negative, should be considered material. Information can be considered material even before a specific corporate
action is taken by a board of directors or a company’s management, depending on the specific circumstances and an evaluation of
the likelihood of the occurrence of a specific event, action or development. There is no bright-line standard for assessing materiality;
rather, materiality is based on an assessment of all of the facts and circumstances, and is often evaluated by enforcement authorities
with the benefit of hindsight.
While it is not possible to define all categories of material information, some examples of information that ordinarily would be regarded as material are:
| ● | Financial forecasts of any kind, industry projections of future earnings or losses, or other earnings guidance; |
| ● | A change (or anticipated change) to previously announced earnings guidance, or the decision to suspend earnings guidance; |
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| ● | Any anticipated or planned restatements of financial results, or material impairments, write-offs or restructurings; |
| ● | Unpublished financial or operational reports or projections; |
| ● | Significant related party transactions; |
| ● | The Company’s business plans, budgets, models or strategies, or any changes or anticipated changes thereto; |
| ● | Significant developments in research and development of a significant new technology, product, process, service or other intellectual property; |
| ● | Information about major contracts, including the gain or loss (or the probable gain or loss) of a significant customer, business partner or supplier; |
| ● | The institution of, or developments in, major litigation, investigations, or regulatory actions or proceedings; |
| ● | A pending or proposed merger, acquisition, investment, tender offer, changes in control or ownership, divesture, joint venture, restructuring, repurchase, financing transactions, or similar transaction; |
| ● | A change (or anticipated change) in dividend policy (if any), the declaration of a share split or subdivision, or the issuance, redemption or repurchase of securities (e.g., share repurchase programs); |
| ● | Financing transactions; |
| ● | Repurchases of the Company securities; |
| ● | A change (or anticipated change) in the Company’s pricing or cost structure; |
| ● | A change (or anticipated change) in senior management, board of directors or auditors, or notification that the auditor’s reports may no longer be relied upon; |
| ● | A significant cybersecurity incident or identified significant cybersecurity vulnerability involving the Company or a significant customer or business partner of the Company, such as a data breach, or any other significant disruption in the company’s operations or loss, potential loss, breach or unauthorized access of its property or assets, whether at its facilities or through its information technology infrastructure; |
| ● | Bankruptcies, receiverships, potential defaults under any credit agreements or indentures, or the existence of material liquidity deficiencies; |
| ● | The imposition of an event-specific restriction on trading in the Company securities or the securities of any other Company or the extension or termination of such restriction; or |
| ● | News of the sale or acquisition of significant assets or a subsidiary. |
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This list is for illustrative purposes only and is not an exhaustive list of all types of material information. Investigators and/or relevant law enforcement agencies will scrutinize a questionable trade after the fact with the benefit of hindsight, so if information is not clearly immaterial or already public you should always err on the side of deciding that information is material nonpublic information and not trade. If you have questions regarding specific information or transactions, please contact the Compliance Officer at [ ].
When Information is Considered Public
Information that is generally not known or that has not been made available to the investing public is generally considered to be nonpublic information, even if the information is widely known within the Company. In order to establish that the information has been made available to the investing public, it may be necessary to demonstrate that the information has been widely disseminated. Information generally would be considered widely disseminated if it has been disclosed through a widely disseminated press release distributed through the newswire services, a broadcast on widely-available radio or television programs, or publication in a widely-available newspaper, magazine or news website or public disclosure document filed with, or furnished to, the SEC that is available on the SEC’s website.
By contrast, information likely would not be considered widely disseminated if it is available only to the Company’s employees, or if it is only available to a select group of analysts, brokers and institutional investors. The circulation of market rumors, even if accurate and reported in the media, does not constitute effective public dissemination; therefore, information should not be considered to be public if it has become known through the circulation of market rumors.
Once information is widely disseminated, it is still necessary to provide the investing public with sufficient time to absorb and evaluate the information. As a general rule, information should not be considered fully absorbed by the marketplace until at least two full trading days have passed following release of the information to the marketplace, where trading days are days on which Nasdaq is open for trading. If, for example, the Company were to make an announcement on a Monday, you should not trade in the Company securities until Thursday. Depending on the particular circumstances, the Company may determine that a longer or shorter period should apply to the release of specific material nonpublic information. Any changes to the time period will be detailed at that time.
Transactions by Entities that You Influence or Control
This policy applies to any entities that you influence or control, including any corporations, partnerships, investment funds, retirement plans, trusts, or any other types of entities over which you have the ability to influence or direct management, policies or investment decisions, and other than in compliance with applicable law. Transactions by these controlled entities will be treated for the purposes of this policy and applicable securities laws as if they were made by you for your own account.
Transactions by Family Members and Others
This policy applies to your family members who reside with you (including a spouse or domestic partner, a child, a child away at college, stepchildren, grandchildren, parents, stepparents, grandparents, siblings and in-laws), your children or your spouse’s children who are financially dependent on you, anyone else who lives in your household, and any family members who do not live in your household but whose transactions involving Relevant Securities are directed by you or are subject to your influence or control, such as individuals who consult with you before they trade in Relevant Securities. You are responsible for the transactions of these other persons and therefore should make them aware of the need to confer with you before they trade in Relevant Securities, and you should treat all such transactions for the purposes of this policy and applicable securities laws as if the transactions were for your own account. This policy does not, however, apply to personal securities transactions of family members where the purchase or sale decision is made by a third party who is not controlled by, influenced by or related to you or your family members.
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Exceptions to Insider Trading Policy and Trading Restrictions
This policy does not apply in the case of the following transactions, except as specifically noted:
Share Option Exercises
This policy does not apply to the exercise of an employee share option acquired under the Company’s plans, or to the exercise of a tax withholding right to which a person has elected to have the Company withhold the Company securities subject to an option to satisfy tax withholding requirements. This policy does apply, however, to any sale of the Company securities as part of a broker-assisted cashless exercise of an option, or any other market sale for the purpose of generating the cash needed to pay the exercise price of an option.
Restricted Share Awards or Restricted Stock Units
This policy does not apply to the vesting of restricted share awards or restricted stock units, or the exercise of a tax withholding right to which you elect to have the Company withhold shares to satisfy tax withholding requirements upon the vesting of any restricted share awards or restricted stock units. The policy does apply, however, to any market sale of restricted shares.
401(k)/Pension Plan, Annual Bonus Plan and All-Employee Plan
This policy does not apply to purchases of the Company securities in the Company’s 401(k)/Pension plan or other retirement plans resulting from your periodic contribution of money to the plan, provided that such purchases are the result of a payroll deduction election that you made at a time when you were not aware of material nonpublic information and that was not a restricted trading period, subject to the pre-clearance process. This policy does apply, however, to certain elections you may make under such plans, including: (a) beginning or terminating investing in the Company securities fund of the 401(k) plan; (b) an election to increase or decrease the percentage of your periodic contributions that will be allocated to the Company securities fund; (c) an election to make an intra-plan transfer of an existing account balance into or out of the Company securities fund; (d) an election to borrow money, to the extent otherwise permitted, against your plan accounts if the loan will result in a liquidation of some or all of your the Company securities fund balance; and (e) an election to pre-pay any plan loan if the pre-payment will result in allocation of loan proceeds to the Company securities fund.
It should be noted that sales of the Company securities from a 401(k) account are also subject to Rule 144 under the Securities Act of 1933 (or any other applicable exemption under securities laws), and therefore directors and executive officers may be deemed to be an “affiliate” of the Company, If this is the case, Rule 144 places limits on the number of shares you may be able to sell and provides that certain procedures must be followed before selling the Company securities. Contact the Company’s legal team for more information on Rule 144 and when you should ensure that a Form 144 is filed with the SEC.
Employee Share Purchase Plan
This policy does not apply to purchases of the Company securities in an employee share purchase plan resulting from your periodic contribution of money to the plan pursuant to a payroll deduction election that you made at a time when you were not aware of material nonpublic information and that was not a restricted trading period, subject to the pre-clearance process. This policy also does not apply to purchases of the Company securities resulting from lump sum contributions to the employee share purchase plan, if you elected to participate by lump sum payment at the beginning of the applicable enrollment period. This policy does apply, however, to certain elections you may make under such plan, including: (a) your election to participate in the employee share purchase plan for any enrollment period; (b) an election to increase or decrease your level of participation in the plan; and (c) to your sales of the Company securities purchased pursuant to the employee share purchase plan.
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Dividend Reinvestment Plan
This policy does not apply to purchases of the Company securities under any Company-sponsored dividend reinvestment plan resulting from an election to reinvest dividends paid on the Company securities that you made when you were not aware of material nonpublic information at the time of the election and that was not a restricted trading period, subject to the pre-clearance process. This policy does apply, however, to any (a) voluntary purchase of the Company securities resulting from additional contributions you choose to make to the dividend reinvestment plan, (b) election to participate in the plan or increase your level of participation in the dividend reinvestment plan, and (c) sale of any the Company securities purchased pursuant to the dividend reinvestment plan.
Other Similar Transactions. Any other purchase of the Company securities directly from the Company or sales of the Company securities directly to the Company are not subject to this policy.
If there is a Regulation BTR blackout (and no Quarterly Trading Restricted Period or Event-Specific Restricted Periods), then the limited exceptions set forth in Regulation BTR will apply. Please be aware that even if a transaction is subject to an exception to this Policy, you will need to separately assess whether the transaction complies with applicable law. Any other Policy exceptions must be approved by the Compliance Officer, in consultation with the Company’s board of directors or an independent committee of the board of directors.
Special and Prohibited Transactions
The Company has determined that there is a heightened legal risk and/or the appearance of improper or inappropriate conduct if the persons subject to this policy engage in certain types of transactions. It therefore is the Company’s policy that any persons covered by this policy, regardless of whether in possession of material nonpublic information, may not engage in any of the following transactions, or should otherwise consider the Company’s preferences as described below:
Short-Term Trading. Short-term trading of the Company securities may be distracting to the person and may unduly focus the person on the short-term appreciation in the value of the Company securities rather than the Company’s long-term business objectives. For these reasons, pursuant to the Company’s policy, any director or officer of the Company who purchases the Company securities in the open market may not sell any the Company securities of the same class during the six months following the purchase. Similarly, such persons who sell the Company securities in the open market may not purchase any the Company securities of the same class during the six months following the sale.
No Short Sales. Short sales of the Company securities (i.e., the sale of a security that the seller does not own at the time of the transaction), including ‘sales against the box’ (i.e., the short sale of a security that the seller owns at the time of the transaction) may evidence an expectation on the part of the seller that the securities will decline in value, and therefore have the potential to signal to the market that the seller lacks confidence in the Company’s prospects. In particular, short sales create misalignment with the Company and may reduce a seller’s incentive (or create a disincentive) to seek to improve the Company’s performance. For these reasons, short sales of the Company securities are prohibited under the Company’s policy.
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Derivative Securities Transactions. Derivative securities, such as call options or put options, which give the holder a right to buy or sell, respectively, a security at a specific price before a set date, are typically transacted over a relatively short time period. As a consequence, transactions involving derivative securities may create the appearance that a director, officer or employee is trading based on material nonpublic information and could focus a director’s, officer’s or other employee’s attention on short-term performance at the expense of the Company’s long-term objectives. Accordingly, transactions involving put options, call options or other derivative securities, on an exchange or in any other organized market, are prohibited by this policy.
Hedging Transactions. Hedging or monetization transactions can be accomplished through a number of possible mechanisms, including without limitation through the use of financial instruments such as prepaid variable forwards, equity swaps, collars and exchange funds. Such transactions may permit a person subject to this policy to continue to own the Company securities obtained through employee benefit plans or otherwise, but without the full risks and rewards of ownership. When that occurs, the director, officer or employee may no longer have the same objectives as, or alignment with, the Company’s other shareholders. Therefore, directors, officers and employees are prohibited from engaging in any such transactions under this policy.
Margin Accounts and Pledged Securities. Securities held in a margin account as collateral for a margin loan may be sold by the broker without the customer’s consent if the customer fails to satisfy a margin call. Similarly, securities pledged (or hypothecated) as collateral for a loan may be sold in foreclosure if the borrower defaults on the loan. Because a margin sale or foreclosure sale may occur at a time when the person is aware of material nonpublic information or otherwise is not permitted to trade in the Company securities, persons subject to this policy are prohibited from holding the Company securities in a margin account or otherwise pledging the Company securities as collateral for a loan, unless all the Company securities held in such account are blocked from being margined.
Standing and Limit Orders. Standing and limit orders (except standing and limit orders under approved Rule 10b5-1 plans, as described below) create heightened risks for insider trading violations. Because there is no control over the timing of purchases or sales that result from standing instructions to a broker, a broker could execute a transaction when a person subject to this policy is in possession of material nonpublic information. The Company therefore discourages placing standing or limit orders on the Company securities. If a person subject to this policy determines that they must use a standing order or limit order, the order should be limited to a period generally no more than five trading days and should otherwise comply with the restrictions and procedures outlined below under the headings “Special Trading Restrictions” and “Pre-Clearance Procedures.”
Special Trading Restrictions
The Company has established special trading restrictions to assist the Company in the administration of this policy, to facilitate compliance with laws prohibiting insider trading while in possession of material nonpublic information, and to avoid the appearance of any impropriety. These special trading restrictions are applicable to all persons subject to this policy.
Quarterly Trading Restricted Period. All persons subject to this policy, as well as their family members and/or controlled entities, may not conduct any transactions involving the Company securities (other than as specified by this policy), during a restricted period beginning ten trading days prior to the end of each fiscal quarter and ending upon the completion of the second full trading day following the date of the public release of the Company’s earnings results for that quarter. For example, if the Company publicly releases its earnings results on a Monday, the first time you can buy or sell the Company securities is the opening of the market on Thursday (assuming you are not aware of other material nonpublic information at that time).
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Event-Specific Restricted Periods. Occasionally, an event may occur (or be probable to occur) that is material to the Company and is known by only a limited number of directors, officers, employees, contractors or consultants. So long as the event remains material and nonpublic, the persons designated by the Compliance Officer, as communicated by the compliance team, may not trade the Company securities. In addition, the Company’s financial results may be sufficiently material in a particular fiscal quarter that, in the judgment of the Compliance Officer, as communicated by the compliance team, designated persons must refrain from trading in the Company securities during a period that commences even earlier than the commencement of the quarterly trading restricted period or ends even later than the expiration of the quarterly trading restricted period. In that situation, the compliance team may notify these persons by a Special Blackout Notice (substantially in the form of Exhibit C) that they may not trade in the Company securities until the compliance team subsequently notifies such person that the event-specific restricted period has ended, but shall not disclose the reason for the event-specific restriction on trading. The existence of an event-specific restricted period, including the extension of a quarterly trading restricted period, will not be announced to the Company as a whole and should not be communicated to any other person. Even if the Compliance Officer, as communicated by the compliance team, has not designated you as a person who should not trade during an event-specific restricted period, you should not trade while aware of material nonpublic information. Exceptions to this policy will not be granted during an event-specific restricted period.
Exceptions. The quarterly trading restrictions and event-specific trading restrictions do not apply to those transactions to which this policy does not apply, as described above under the heading “Exceptions to Insider Trading Policy and Trading Restrictions.” Further, the requirement for pre-clearance, the quarterly trading restrictions and event-specific trading restrictions do not apply to transactions conducted pursuant to pre-approved Rule 10b5-1 plans, described under the heading “Rule 10b5-1 Plans,” below.
Regulation BTR Blackouts. The directors and officers of the Company may also be subject to trading blackouts pursuant to Regulation Blackout Trading Restriction, or Regulation BTR, under U.S. federal securities laws. In general, Regulation BTR prohibits any director or officer from engaging in certain transactions involving Company securities during periods when 401(k) plan participants are prevented from purchasing, selling or otherwise acquiring or transferring an interest in certain securities held in individual account plans. Any profits realized from a transaction that violates Regulation BTR are recoverable by the Company, regardless of the intentions of the director or officer effecting the transaction. In addition, individuals who engage in such transactions are subject to sanction by the SEC as well as potential criminal liability. The Company will notify directors and officers if they are subject to a blackout trading restriction under Regulation BTR. Failure to comply with an applicable trading blackout in accordance with Regulation BTR is a violation of law and this Policy.
Pre-Clearance Procedures
No person identified in the table below may engage in transactions involving the Company securities without obtaining pre-clearance from the appropriate approval party in accordance with this policy. It is important to note that compliance with these additional procedures, including obtaining pre-clearance, does not insulate such party from insider trading liability. If a person subject to this policy obtains pre-clearance, such party must still make the determination that such person is not in possession of material nonpublic information when the trade is made, that the trade does not have the appearance of impropriety, and that the trade is not in violation of the insider trading and other applicable laws.
| 10 |
Approval Parties. The persons subject to this policy that are identified in the following table may not engage in any transaction in the Company securities without first obtaining pre-clearance of the transaction in accordance with the following:
| Person or Entity Subject to Pre-Clearance | Approval Party | |
| Members of the Board (other than the Audit Committee Chairperson) and the Chief Executive Officer | Audit Committee Chairperson | |
| Audit Committee Chairperson | Compliance Officer | |
| Officers and Executive Committee (other than the Chief Executive Officer) and Employees | Compliance Officer | |
| Designated persons on insider lists | Compliance Officer |
Request Form. A request for pre-clearance, which shall be submitted in the Company’s approved form of pre-clearance request attached to this policy as Exhibit A, including a certification that such person is not in possession of material nonpublic information, should be submitted to the applicable approval party noted above at least 48 hours in advance of the proposed transaction. The applicable approval party is under no obligation to approve a transaction submitted for pre-clearance and may determine not to permit the transaction in the approval party’s discretion. If a person that seeks pre-clearance and permission to engage in the transaction is denied, then such person must refrain from initiating any transaction in the Company securities and should not inform any other person of the fact that the pre-clearance request was denied.
Pre-Cleared Transactions. Pre-cleared transactions must be completed within five trading days following receipt of the pre-clearance (unless a specific exception has been granted by the applicable approval party). A pre-cleared transaction, or any portion of a pre-cleared transaction that has not been completed during such period, must be pre-cleared again prior to execution. All pre-cleared transactions will be reported to and overseen by the Compliance Officer.
Other Restrictions. Notwithstanding receipt of pre-clearance, if, before the transaction is completed, the person who received the pre-clearance becomes aware of material nonpublic information or becomes subject to a restricted period described above in “Special Trading Restrictions,” then the transaction cannot be completed.
Rule 10b5-1 Plans
Rule 10b5-1 under the Securities Exchange Act of 1934 provides a defense from insider trading liability under Rule 10b-5. In order to be eligible to rely on this defense, a person subject to this policy must enter into a Rule 10b5-1 plan for transactions involving the Company securities that meets certain conditions specified in Rule 10b5-1. Transactions involving the Company securities that are effected pursuant to a Rule 10b5-1 plan may occur even when the person who has entered into the plan is aware of material nonpublic information. To comply with this policy, a pre-approved Rule 10b5-1 plan must be approved by the Compliance Officer and satisfy the requirements of Rule 10b5-1 and the Company’s “Guidelines for Rule 10b5-1 Plans,” attached to this policy as Exhibit B.
Post-Termination Transactions
This policy continues to apply to transactions involving the Company securities even after termination of service to, or a relationship with the Company. If a person is in possession of material nonpublic information when such person’s service or relationship terminates, that person may not trade in the Company securities until that information has become public or is no longer material. If a person subject to a quarterly trading restricted period or an event-specific restricted period leaves the Company during that restricted period, they will continue to be subject to the applicable restricted period for the remainder of that restricted period.
Company Assistance
Any person who has a question about this policy or its application to any proposed transaction may obtain additional guidance from the compliance team.
If you have any questions, please send them by email to [ ].
Certification
All persons subject to this policy must certify their understanding of, and intent to comply with, this policy.
| 11 |
CERTIFICATION
I certify that:
| 1. | I have read and understand the Company Insider Trading Policy. I understand that the Compliance Team is available to answer any questions I have regarding the policy. |
| 2. | Since [ ], 202[ ], or such shorter period of time that I have been an officer, director, employee, contractor, or consultant of the Company, I have complied with the policy. |
| 3. | I will continue to comply with the policy for as long as I am subject to the policy. |
| Print name: | ||
| Signature: | ||
| Date: |
| 12 |
Exhibit A - Form of Pre-Clearance Request and Certification
The pre-clearance approval process normally takes two trading days, although individual circumstances may require additional time and you may not receive approval to trade at the time or price that you wanted. the Company will not indemnify you for any changes in the stock price as a result of the timing of your pre-clearance. If your trade is pre-cleared, the pre-clearance approval will be valid for five trading days. If you do not execute your trade within that five trading-day window, you will have to obtain a new pre-clearance approval prior to execution.
DREAMLAND LIMITED
PRE-CLEARANCE REQUEST AND CERTIFICATION FORM
| PLEASE COMPLETE THE FOLLOWING INFORMATION: | |
| NAME | |
| EMPLOYEE ID (if applicable) | |
| NATURE OF TRANSACTION [INDICATE PURCHASE OR SALE] | |
| NUMBER OF SHARES OR DOLLAR AMOUNT IN THIS TRANSACTION | |
| IF THIS IS A SALE: WHAT DATE(S) WERE THESE SHARES ACQUIRED? HAVE YOU PURCHASED ANY RELEVANT SECURITIES WITHIN THE PAST SIX MONTHS? | |
| IF THIS IS A PURCHASE: HAVE YOU SOLD ANY RELEVANT SECURITIES? | |
| ESTIMATED NUMBER OF SHARE HOLDINGS AFTER THIS TRANSACTION |
BY E-SIGNING THIS FORM, I AM CONFIRMING:
| 1. | I AM NOT IN POSSESSION OF MATERIAL NON-PUBLIC INFORMATION AT THIS TIME. |
| 2. | I WILL NOT ENTER INTO THE TRANSACTION DESCRIBED ABOVE IF I COME INTO POSSESSION OF MATERIAL NON-PUBLIC INFORMATION. |
| 3. | THE INFORMATION SET FORTH ABOVE IS TRUE AND CORRECT AS OF THE DATE HEREOF. |
| 4. | I ACKNOWLEDGE THAT ANY PRE-CLEARANCE GIVEN WILL BE VALID FOR FIVE (5) TRADING DAYS ONLY, AND I WILL NEED TO SUBMIT A NEW PRE-CLEARANCE REQUEST AND CERTIFICATION PRIOR TO EXECUTING THE TRADE IF I DO NOT TRADE WITHIN THE FIVE (5) TRADING-DAY PERIOD. |
| Print name: | ||
| Signature: | ||
| Date: |
ONCE YOU SUBMIT THIS REQUEST, IT WILL BE ROUTED TO THE OFFICE OF ETHICS AND COMPLIANCE FOR REVIEW AND FORWARDED TO ANY FURTHER APPROVING PARTIES REQUIRED BY THIS POLICY. PLEASE EXPECT TO RECEIVE A RESPONSE WITHIN TWO (2) TRADING DAYS. IF YOU HAVE ANY QUESTIONS REGARDING THIS REQUEST AND WOULD LIKE TO SPEAK WITH SOMEONE FIRST, PLEASE REACH OUT TO [ ].
| 13 |
Exhibit B - Guidelines for Rule 10b5-1 Plans
Introduction
Rule 10b5-1(c) under the Securities Exchange Act of 1934, as amended, provides for an affirmative defense against insider trading liability if a trade occurs pursuant to a pre-arranged “trading plan” that meets specified conditions. Specifically, if a purchase or sale is made pursuant to a trading plan that complies with the conditions in Rule 10b5-1(c), as described below, the trade will not be deemed to be made on the basis of material nonpublic information, and therefore will not violate insider trading laws. Trading plans can be established for a single trade or a series of trades. Because Rule 10b5-1(c) is complex, the Company recommends that you work with a broker and fully understand the limitations and conditions of the rule before establishing a plan.
The Company has adopted a written Insider Trading Policy, to which these guidelines for Rule 10b5-1 plans are an attachment, containing certain basic principles and policies concerning the trading by officers, directors and employees of the Company in the securities of the Company. These guidelines set forth the Company’s policy concerning Rule 10b5-1 pre-planned trading programs by its directors, officers and employees. All capitalized terms used but not defined in these guidelines have the same meanings provided for in the Insider Trading Policy.
As specified in the Insider Trading Policy, a Rule 10b5-1 plan must be approved by the Compliance Officer and meet the requirements of Rule 10b5-1 and these guidelines. Any Rule 10b5-1 plan (or the modification or termination of any existing Rule 10b5-1 plan) must be well documented and submitted for approval ten trading days prior to the entry into the Rule 10b5-1 plan. the Company reserves the right not to approve any proposed Rule 10b5-1 plan (or the modification of any existing Rule 10b5-1 plan) unless it meets the requirements of Rule 10b5-1 and these guidelines, as well as such additional terms and conditions as the Company may require from time to time. No further pre-approval of transactions conducted pursuant to the Rule 10b5-1 plan will be required.
The following guidelines apply to all Rule 10b5-1 plans:
| ● | You may not enter into, modify or terminate a Rule 10b5-1 plan during a restricted period or otherwise while you are aware of material nonpublic information. |
| ● | All Rule 10b5-1 plans must: (1) specify the amount, price and date of the transactions; (2) include a written formula, algorithm or computer program for determining amounts, prices and dates for the transactions; or (3) not permit the person to exercise any subsequent influence over how, when or whether to make purchases or sales (and any other person exercising such influence under the Rule 10b5-1 plan must not be aware of material nonpublic information when doing so). |
| ● | For officers and directors, no transaction may take place under a Rule 10b5-1 plan until the later of (a) 90 days after adoption or modification of the Rule 10b5-1 plan or (b) two trading days following the disclosure of the Company’s financial results in a current report for the fiscal quarter (or annual report on Form 20-F for the fourth fiscal quarter) in which the Rule 10b5-1 plan was adopted or modified (but in any event, the required cooling-off period is subject to a maximum of 120 days after adoption or modification of the Rule 10b5-1 plan). For persons other than officers and directors, no transaction may take place under a Rule 10b5-1 plan until 30 days following the adoption or modification of a Rule 10b5-1 plan. |
| ● | Subject to certain limited exceptions specified in Rule 10b5-1, you may not enter into more than one Rule 10b5-1 plan at the same time. |
| 14 |
| ● | Subject to certain limited exceptions specified in Rule 10b5-1, you are limited to only one Rule 10b5-1 plan designed to effect an open market purchase or sale of the total amount of securities subject to the Rule 10b5-1 plan as a single transaction in any 12-month period. |
| ● | You must act in good faith with respect to a Rule 10b5-1 plan. A Rule 10b5-1 plan cannot be entered into as part of a plan or scheme to evade the prohibition of Rule 10b-5. Therefore, although modifications to an existing Rule 10b5-1 plan are not prohibited, a Rule 10b5-1 plan should be adopted with the intention that it will not be amended or terminated prior to its expiration. |
| ● | Officers and directors must include a representation in the Rule 10b5-1 plan certifying that, on the date of adoption or modification of the plan (i) the person is not aware of material nonpublic information about the Company or its securities and (ii) the person is adopting the trading plan in good faith and not as part of plan or scheme to evade the prohibitions of Rule 10b-5. |
The Company and its officers and directors must make certain disclosures in SEC filings concerning Rule 10b5-1 plans and certain material terms. Officers and directors of the Company must undertake to provide any information requested by the Company regarding Rule 10b5-1 plans for the purpose of providing the required disclosures or any other disclosures that the Company deems to be appropriate under the circumstances.
If any questions arise, such person should consult with their own counsel in implementing a Rule 10b5-1 plan.
| 15 |
EXHIBIT C - FORM OF SPECIAL BLACKOUT NOTICE
DREAMLAND LIMITED
[Date]
CONFIDENTIAL COMMUNICATION
[Insert address]
Dear [Insert Name]:
Dreamland Limited (the “Company”) has imposed a special blackout period in accordance with the terms of the Company’s Insider Trading Policy (the “Policy”). Pursuant to the Policy, and subject to the exceptions stated in the Policy, you may not engage in any transaction involving the securities of the Company until you receive official notice that the special blackout period is no longer in effect.
You may not disclose to others the fact that a special blackout period has been imposed. In addition, you should take care to handle any confidential information in your possession in accordance with the Company’s policies.
If you have any questions at all, please contact me at [ ].
Sincerely,
Compliance Officer
| 16 |
Exhibit 11.3
WHISTLEBLOWER POLICY
OF
DREAMLAND LIMITED
This Whistleblower Policy (this “Policy”) has been adopted by the board of directors (the “Board”) of Dreamland Limited (the “Company”) to govern the receipt, retention, and treatment of complaints regarding the Company’s accounting, internal accounting controls, or auditing matters, and to protect the confidential, anonymous reporting of employees concerns regarding questionable financial and commercial practices.
| I. | POLICY |
It is the policy of the Company to treat complaints about accounting, internal accounting controls, auditing matters, or questionable financial and commercial practices (“Complaints”) seriously and expeditiously.
Employees will be given the opportunity to submit for review by the Company confidential and anonymous Complaints, including without limitation, the following:
| ● | fraud against investors, securities fraud, mail or wire fraud, bank fraud, or fraudulent statements to the U.S. Securities and Exchange Commission (the “SEC”) or members of the investing public; |
| ● | violations of SEC rules and regulations applicable to the Company and related to accounting, internal accounting controls and auditing matters; |
| ● | intentional error or fraud in the preparation, review or audit of any financial statement of the Company; |
| ● | significant deficiencies in or intentional non-compliance with the Company’s internal accounting controls; |
| ● | corruption or bribery in any form, including the offering or payment of bribes, kickbacks or any other improper benefits to actual or potential customers, agents, contractors, suppliers, government officials, employees of these entities or any other party; |
| ● | retaliation against an employee who submits a complaint – examples include statements, conduct or actions involving discharging, demoting, suspending, threatening, harassing or in any other manner discriminating against an employee who submits a complaints in good faith in accordance with this policy; and |
| ● | any other conduct that is in violation of the Company’s Code of Business Conduct And Ethics. |
If requested by the employee, the Company will protect the confidentiality and anonymity of the employee to the fullest extent possible, consistent with the need to conduct an adequate review. Vendors, customers, business partners and other parties external to the Company will also be given the opportunity to submit Complaints; however, the Company is not obligated to keep Complaints from non-employees confidential or to maintain the anonymity of non-employees.
Complaints will be reviewed by the Audit Committee of the Board (the “Audit Committee”) or such other persons as the Audit Committee determines to be appropriate.
The Company will abide by all laws that prohibit retaliation against employees who lawfully submit complaints under this Policy. However, anyone filing a Complaint concerning a violation or suspected violation must be acting in good faith and have reasonable grounds for believing the information disclosed indicated a violation. Any allegations that prove not to be substantiated and which prove to have been made maliciously or knowingly to be false will be viewed as a serious disciplinary offense.
In the event that the Company contracts with a third party to handle Complaints or any part of the complaint process, the third party will comply with this Policy.
| II. | PROCEDURES |
Receipt of Written Complaints
Any person may submit a Complaint by contacting the Audit Committee or the Compliance Officer (as defined below) in person, in writing, by email or by telephone. Employees submitting this information need not provide their name or other personal information and reasonable efforts will be used to conduct the investigation that follows from a Complaint from an employee in a manner that protects the confidentiality and anonymity of the employee submitting the Complaint.
If an employee feels uncomfortable about a situation or has any doubts about whether it is consistent with the Company’s ethical standards, seek help. The Company encourages employees to contact their supervisors for help first. If a supervisor cannot answer the question or if employees do not feel comfortable contacting their supervisors, they should contact the Compliance Officer or the Audit Committee.
Treatment of Complaints
| 1. | Unless otherwise directed by the Audit Committee, a Complaint made under this Policy shall be directed to the Compliance Officer of the Company (the “Compliance Officer”), who shall report directly to the Audit Committee on such matters. The Company has appointed [ ], as the Compliance Officer. The Compliance Officer can be reached by e-mail at [ ]. |
| 2. | The Compliance Officer shall review the Complaint, and may investigate it himself/herself or may assign another employee, outside counsel, advisor, expert (including internal auditing staff) or third-party service provider (including the external auditor) to investigate, or assist in investigating the Complaint. The Compliance Officer may direct that any individual assigned to investigate Complaint work at the direction of or in conjunction with the Compliance Officer or any other attorney in the course of the investigation. |
| 3. | Unless otherwise directed by the Compliance Officer, the person assigned to investigate will conduct an investigation of the Complaint and report his or her findings or recommendations to the Compliance Officer. If the investigator is in a position to recommend appropriate disciplinary or corrective action, the investigator also may recommend disciplinary or corrective action. |
| 4. | If determined to be necessary by the Compliance Officer or the Audit Committee, the Company shall provide for appropriate funding, as determined by the Compliance Officer or the Audit Committee, to obtain and pay for additional resources that may be necessary to conduct the investigation, including , but not limited to, retaining outside counsel and/or other advisor(s); provided that funding in excess of US$100,000 with respect to the investigation of any individual Complaint must be approved by the Audit Committee. |
| 5. | At least once per calendar quarter and whenever deemed necessary by the Compliance Officer, the Compliance Officer shall submit to the Audit Committee, and to any other member of Company management designated by the Audit Committee, a report that summarizes each Complaint made within the last 12 months and shows specifically: (a) the complainant (unless anonymous, in which case the report will so indicate), (b) a description of the substance of the Complaint, (c) the status of the investigation, (d) any conclusions reached by the investigator, and (e) findings and recommendations. |
| 6. | At any time with regard to any Complaint, the Compliance Officer, after obtaining approval from the Audit Committee, may specify a different procedure for investigating and treating such a Complaint. |
Access to Reports and Records and Disclosure of Investigation Results
All reports and records associated with Complaints are considered confidential information and access will be restricted to members of the Audit Committee and the Board, employees of the Company or outside counsel involved in investigating a Complaint as contemplated by this Policy. Access to reports and records may be granted to other parties at the discretion of the Audit Committee.
Complaints and any resulting investigations, reports or resulting actions will generally not be disclosed to the public except as required by any legal requirements or regulations or by any corporate policy in place at the time.
Retention of Records
All Complaints and documents relating to such Complaints made through this Policy shall be retained for at least five years from the date of the complaint, after which the information may be destroyed unless the information may be relevant to any pending or potential litigation, inquiry, or investigation, in which case the information may not be destroyed and must be retained for the duration of that litigation, inquiry, or investigation and thereafter as necessary.
Exhibit 11.4
DREAMLAND LIMITED
RELATED PARTY TRANSACTION POLICY
| 1. | Definitions - A “Related Party Transaction” is any transaction directly or indirectly involving any Related Party that would need to be disclosed under Item 404(a) of Regulation S-K. Under Item 404(a), the Company is required to disclose any transaction occurring since the beginning of the Company’s last fiscal year, or any currently proposed transaction, involving the Company where the amount involved exceeds USD$120,000, and in which any related person had or will have a direct or indirect material interest. “Related Party Transaction” also includes any material amendment or modification to an existing Related Party Transaction. |
| 2. | “Related Party” means any of the following: |
(a) a director (which term when used herein includes any director nominee);
(b) an executive officer;
(c) a person known by the Company to be the beneficial owner of more than 5% of the Company’s common stock (a “5% stockholder”); or
(d) a person known by the Company to be an immediate family member of any of the foregoing.
| ■ | “Immediate family member” means a child, stepchild, parent, stepparent, spouse, sibling, mother- in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law of such director, executive officer, nominee for director or beneficial owner, and any person (other than a tenant or employee) sharing the household of such director, executive officer, nominee for director or beneficial owner. |
| 3. | Identification of Potential Related Party Transactions |
| (a) | Related Party Transactions will be brought to management’s and the Board’s attention in a number of ways. Each of the Company’s directors and executive officers shall inform the Chairman of the Audit Committee of any potential Related Party Transactions. In addition, each such director and executive officer shall complete a questionnaire on an annual basis designed to elicit information about any potential Related Party Transactions. |
| (b) | Any potential Related Party Transactions that are brought to the Audit Committee’s attention shall be analyzed by the Audit Committee, in consultation with outside counsel or members of management, as appropriate, to determine whether the transaction or relationship does, in fact, constitute a Related Party Transaction requiring compliance with this Policy. |
| 4. | Review and Approval of Related Party Transactions |
| (a) | At each of its meetings, the Audit Committee shall be provided with the details of each new, existing, or proposed Related Party Transaction, including the terms of the transaction, any contractual restrictions that the Company has already committed to, the business purpose of the transaction, and the benefits to the Company and to the relevant Related Party. In determining whether to approve a Related Party Transaction, the Audit Committee shall consider, among other factors, the following factors to the extent relevant to the Related Party Transaction: |
| ● | whether the terms of the Related Party Transaction are fair to the Company and on the same basis as would apply if the transaction did not involve a Related Party; |
| ● | whether there are business reasons for the Company to enter into the Related Party Transaction; |
| ● | whether the Related Party Transaction would impair the independence of an outside director; |
| ● | whether the Related Party Transaction would present an improper conflict of interest for any director or executive officer of the Company, taking into account the size of the transaction, the overall financial position of the director, executive officer or Related Party, the direct or indirect nature of the director’s, executive officer’s or Related Party’s interest in the transaction and the ongoing nature of any proposed relationship, and any other factors the Audit Committee deems relevant; and |
| ● | any pre-existing contractual obligations. |
| (b) | Any member of the Audit Committee who has an interest in the transaction under discussion shall abstain from voting on the approval of the Related Party Transaction, but may, if so requested by the Chairman of the Audit Committee, participate in some or all of the Audit Committee’s discussions of the Related Party Transaction. Upon completion of its review of the transaction, the Audit Committee may determine to permit or to prohibit the Related Party Transaction. |
| (c) | A Related Party Transaction entered into without pre-approval of the Audit Committee shall not be deemed to violate this Policy, or be invalid or unenforceable, so long as the transaction is brought to the Audit Committee as promptly as reasonably practical after it is entered into or after it becomes reasonably apparent that the transaction is covered by this Policy. |
| (d) | A Related Party Transaction entered into prior to the effective date of this Charter shall not be required to be reapproved by the Audit Committee. |
Exhibit 12.1
Certification of Chief Executive Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Seto Wai Yue, certify that:
1. I have reviewed this annual report on Form 20-F of Dreamland Limited (the “Company”);
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;
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;
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:
(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;
(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;
(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
(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
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):
(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
(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.
| Date: | August 17, 2026 | |
| By: | /s/ Seto Wai Yue | |
| Name: | Seto Wai Yue | |
| Title: | Chief Executive Officer |
Exhibit 12.2
Certification of Chief Financial Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Lee Wai Kit, certify that:
1. I have reviewed this annual report on Form 20-F of Dreamland Limited (the “Company”);
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;
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;
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:
(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;
(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;
(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
(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
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):
(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
(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.
| Date: | August 17, 2026 | |
| By: | /s/ Lee Wai Kit | |
| Name: | Lee Wai Kit | |
| Title: | Chief Financial Officer |
Exhibit 13.1
Certification of Chief Executive Officer
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
In connection with the Annual Report of Dreamland Limited (the “Company”) on Form 20-F for the year ended March 31, 2026 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Seto Wai Yue, 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, as amended; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
| Date: | August 17, 2026 | |
| By: | /s/ Seto Wai Yue | |
| Name: | Seto Wai Yue | |
| Title: | Chief Executive Officer |
Exhibit 13.2
Certification of Chief Financial Officer
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
In connection with the Annual Report of Dreamland Limited (the “Company”) on Form 20-F for the year ended March 31, 2026 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Lee Wai Kit, Chief 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:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
| Date: | August 17, 2026 | |
| By: | /s/ Lee Wai Kit | |
| Name: | Lee Wai Kit | |
| Title: | Chief Financial Officer |
Exhibit 15.1
Consent of Independent Registered Public Accounting Firm
To the Board of Directors of Dreamland Limited and its subsidiaries:
We hereby consent to the inclusion in this Form 20-F Annual Report of Dreamland Limited and its subsidiaries (the “Company”) of our report dated August 17, 2026, related to the consolidated financial statements as of and for each of the three-year period ended March 31, 2026 and related prospectus of Dreamland Limited filed with the Securities and Exchange Commission.
We also consent to the reference to us under the caption “Experts” in such Prospectus.
Diamond Bar, California
August 17, 2026
Exhibit 97.1
DREAMLAND LIMITED
(the “Company”)
COMPENSATION RECOVERY POLICY
Introduction
The Board of Directors of the Company (the “Board”) believes that it is in the best interests of the Company and its shareholders to create and maintain a culture that emphasizes integrity and accountability and that reinforces the Company’s pay-for-performance compensation philosophy. The Board has therefore adopted this policy which provides for the recoupment of certain executive compensation in the event of an accounting restatement resulting from material noncompliance with financial reporting requirements under the federal securities laws (the “Policy”). This Policy is designed to comply with Section 10D of the Securities Exchange Act of 1934 (the “Exchange Act”).
Administration
This Policy shall be administered by the Board or, if so designated by the Board, the Compensation Committee, in which case references herein to the Board shall be deemed references to the Compensation Committee. Any determinations made by the Board shall be final and binding on all affected individuals.
Covered Executives
This Policy applies to the Company’s current and former executive officers, as determined by the Board in accordance with Section 10D of the Exchange Act and the listing standards of the national securities exchange on which the Company’s securities are listed, and such other senior executives/employees who may from time to time be deemed subject to the Policy by the Board (“Covered Executives”).
Recoupment; Accounting Restatement
In the event the Company is required to prepare an accounting restatement of its financial statements due to the Company’s material noncompliance with any financial reporting requirement under the securities laws, the Board will require reimbursement or forfeiture of any excess Incentive Compensation received by any Covered Executive during the three completed fiscal years immediately preceding the date on which the Company is required to prepare an accounting restatement.
Incentive Compensation
For purposes of this Policy, Incentive Compensation means any of the following; provided that such compensation is granted, earned, or vested based wholly or in part on the attainment of a financial reporting measure:
| ● | Annual cash bonuses and other short- and long-term cash incentives. |
| ● | Stock options. |
| ● | Stock appreciation rights. |
| ● | Restricted stock. |
| ● | Restricted stock units. |
| ● | Performance shares. |
| ● | Performance units. |
Financial reporting measures are measures that are determined and presented in accordance with the accounting principles used in preparing the Company’s financial statements, and any measures that are derived wholly or in part from such measures, including:
| ● | Company stock price. |
| ● | Total shareholder return. |
| ● | Revenues. |
| ● | Net income. |
| ● | Earnings before interest, taxes, depreciation, and amortization (EBITDA). |
| ● | Earnings per share. |
| ● | “Non-GAAP financial measures” for purposes of Exchange Act Regulation G and 17CFR 229.10. |
Excess Incentive Compensation: Amount Subject to Recovery
The amount to be recovered will be the excess of the Incentive Compensation paid to the Covered Executive based on the erroneous data over the Incentive Compensation that would have been paid to the Covered Executive had it been based on the restated results, as determined by the Board.
If the Board cannot determine the amount of excess Incentive Compensation received by the Covered Executive directly from the information in the accounting restatement, then it will make its determination based on a reasonable estimate of the effect of the accounting restatement.
Method of Recoupment
The Board will determine, in its sole discretion, the method for recouping Incentive Compensation hereunder which may include, without limitation:
| ● | requiring reimbursement of cash Incentive Compensation previously paid; |
| ● | seeking recovery of any gain realized on the vesting, exercise, settlement, sale, transfer, or other disposition of any equity- based awards; |
| ● | offsetting the recouped amount from any compensation otherwise owed by the Company to the Covered Executive; |
| ● | cancelling outstanding vested or unvested equity awards; and |
| ● | taking any other remedial and recovery action permitted by law, as determined by the Board. |
No Indemnification
The Company shall not indemnify any Covered Executives against the loss of any incorrectly awarded Incentive Compensation.
Interpretation
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. It is intended that this Policy be interpreted in a manner that is consistent with the requirements of Section 10D of the Exchange Act and any applicable rules or standards adopted by the Securities and Exchange Commission or any national securities exchange on which the Company’s securities are listed.
Effective Date
This Policy shall be effective as of the date it is adopted by the Board (the “Effective Date”) and shall apply to Incentive Compensation that is approved, awarded or granted to Covered Executives on or after that date. This Policy shall apply to any excess Incentive Compensation received by Covered Executives during the three immediately completed fiscal years preceding the date on which a company is required to prepare an accounting restatement.
Amendment; Termination
The Board may amend this Policy from time to time in its discretion and shall amend this Policy as it deems necessary to reflect final regulations adopted by the Securities and Exchange Commission under Section 10D of the Exchange Act and to comply with any rules or standards adopted by a national securities exchange on which the Company’s securities are listed. The Board may terminate this Policy at any time.
Other Recoupment Rights
The Board intends that this Policy will be applied to the fullest extent of the law. The Board may require that any employment agreement, equity award agreement, or similar agreement entered into on or after the Effective Date shall, as a condition to the grant of any benefit thereunder, require a Covered Executive to agree to abide by the terms of this Policy. Any right of recoupment under this Policy is in addition to, and not in lieu of, any other remedies or rights of recoupment that may be available to the Company pursuant to the terms of any similar policy in any employment agreement, equity award agreement, or similar agreement and any other legal remedies available to the Company.
Impracticability
The Board shall recover any excess Incentive Compensation in accordance with this Policy unless such recovery would be impracticable, as determined by the Board in accordance with Rule 10D-1 of the Exchange Act and the listing standards of the national securities exchange on which the Company’s securities are listed.
Successors
This Policy shall be binding and enforceable against all Covered Executives and their beneficiaries, heirs, executors, administrators or other legal representatives.