Wellchange Holdings Co Ltd 6-K/A, filed Oct 17, 2025
Wellchange Holdings Co Ltd (WCT)
About this 6-K/A
Wellchange Holdings Co Ltd filed this 6-K/A on October 17, 2025.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of October
Commission File Number:
(Translation of registrant’s name into English)
Unit E, 11/F, Billion Plaza II, 10 Cheung Yue Street
Cheung Sha Wan, Kowloon, Hong Kong
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:
Form 20-F ☒ Form 40-F ☐
INFORMATION CONTAINED IN THIS FORM 6-K REPORT
A copy of the Management’s Discussion and Analysis of Financial Condition and Results of Operations for the Six Months Ended June 30, 2025 and 2024 is furnished as Exhibit 99.1, and a copy of the Interim Financial Statements is furnished as Exhibit 99.2 to this report on Form 6-K.
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EXHIBIT INDEX
| Exhibit No. | Description | |
| 99.1 | Management’s Discussion and Analysis of Financial Condition and Results of Operations for the Six Months ended June 30, 2025 and 2024 | |
| 99.2 | Unaudited Interim Consolidated Financial Statements for the Six Months ended June 30, 2025 and 2024 | |
| 101.INS | Inline XBRL Instance Document | |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document | |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Wellchange Holdings Company Limited | ||
| Date: October 17, 2025 | By: | /s/ Shek King Pong |
| Name: | Shek King Pong | |
| Title: | Chief Executive Officer | |
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Exhibit 99.1
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes thereto. In addition to historical consolidated financial information, the following discussion contains forward-looking statements that reflect our plans, estimates, and beliefs that involve risks and uncertainties. As a result of many important factors, our actual results and the timing of events may differ materially from those anticipated in these forward-looking statements. All amounts included herein with respect to the six months ended June 30, 2025 and 2024 are derived from our unaudited interim condensed consolidated financial statements in this filing. Our financial statements have been prepared in accordance with U.S. Generally Accepted Accounting Principles, or U.S. GAAP.
Overview
We are an enterprise software solution services provider headquartered in Hong Kong. We conduct operations through our Operating Subsidiary in Hong Kong, Wching HK. We provide customized software solutions, cloud-based software-as-a-service (“SaaS”) platforms, and “white-label” software design and development services. Our mission is to empower our customers and users, in particular, SMBs, to accelerate their digital transformation, optimize productivity, improve customer experiences, and enable resource-efficient growth with our low-cost, user-friendly, reliable and integrated all-in-one Enterprise Resource Planning (“ERP”) software solutions.
We believe that SMBs are, and will continue to be, a vital component of the economy. However, we have observed that most SMBs rely on antiquated, laborious, inefficient processes or software systems to manage and execute most of their back-office and front-office operational functions. To compete effectively, we believe SMBs require modern integrated software solutions that can automate and streamline operational functions to reduce costs and allow them to focus on higher value-added activities. Furthermore, the COVID-19 pandemic also accelerated technology adoption by SMBs as they were required to respond to new challenges, such as facilitating remote work and finding new methods to engage with customers. At the same time, SMBs also have distinctive technology needs when adopting and transforming to software technologies — we believe SMBs prefer low-cost solutions that are easy to implement, onboard, and integrate and require little ongoing maintenance.
We focused on innovation, agility, and reliability, enabling us to adapt to our customers’ needs, deliver user-friendly software solutions and services and develop a comprehensive portfolio of integrated solutions. Our ERP solutions, together with our proprietary software technology, are engineered to enable SMBs of different business models, scales of operations, and needs, in their day-to-day business activities, to support back-office and front-office functions, such as finance and accounting, procurement, manufacturing, inventory management, order management, warehouse management, supply chain management, Customer Relationship Management (“CRM”), professional services automation, project and file management, human resources management, e-commerce, and marketing automation. Our portfolio of software and applications modules also allows our customers and users to scale up and customize to meet specific business and operation needs.
Our total revenues increased by approximately US$136,486 or 12.9% to approximately US$1,197,566 for the six months ended June 30, 2025 from approximately US$1,061,080 for the six months ended June 30, 2024. Our net income and net loss for the six months ended June 30, 2024 and 2025, were US$381,153 and US$2,965,109, respectively.
Key Factors Affecting Our Results of Operations
We believe our future performance will depend on many factors, including the following:
Continued growth of e-commerce globally
The market for SaaS solutions has been experiencing a consistent and substantial increase in demand among SMBs. Factors such as cost-effectiveness, scalability, and streamlined operations have contributed to the growing popularity of SaaS solutions. By leveraging cloud-based technologies, companies can access a wide range of software applications and services without the need for extensive infrastructure investments.
As an enterprise software solution services provider in Hong Kong, we are well-positioned to capitalize on this growing trend. We anticipate attracting a larger customer base and expanding our platform as more enterprises recognize the benefits of adopting SaaS solutions. Our revenue model in MR. CLOUD, which is based on subscription fees, is related to the growth of the demand among SMBs. As the demand for SaaS solutions continues to rise, driven by the increasing need for efficient and cost-effective software services, we are confident in the sustained growth of our business.
Enhancing our software platform
We recognize the importance of continuously improving our offerings to meet the evolving needs of our clients. In the second half of 2025, we plan to enhance our proprietary cloud-based SaaS ERP software platform, MR. CLOUD. The development of new modules for MR. CLOUD will require a further investment of resources. The successful execution of this expansion and effective monetization of the new modules will depend on various factors, including securing sufficient capital for innovation, implementing effective marketing strategies, navigating competition, establishing competitive pricing, and ensuring our valued clients’ satisfaction and continued subscription. Our commitment lies in pushing the coverage of our software platform to deliver a greater diversity of solutions and services to our clients.
Retention and growth of our existing customers
Our current business and long-term revenue growth rely on the retention and expansion of our existing customer base. We will continue implementing updates and maintenance of our platform to maintain our platform capabilities to maximize customer satisfaction and retention. By consistently improving platform performance based on customer feedback, we aim to ensure high satisfaction, which is crucial for retaining and growing our customer base.
Our technical support team aims to consistently offer clear instructions, tutorials, and resources to help customers start using our software and platform quickly and effectively. We consider a positive onboarding experience sets the foundation for long-term customer satisfaction and reduces the likelihood of churn. Our sales team will continue implementing cross-selling and upselling strategies to increase the average revenue per customer. We will keep tracking the percentage of customers who adopt additional products or upgrade their existing plans.
Acquisition of new customers
Increasing our customer base is important to our continued revenue growth. Establishing a robust brand presence and implementing highly effective marketing strategies are essential for attracting new customers. To maximize our organic visibility, we will consistently optimize our website and content to enhance search engine rankings, thereby increasing our online visibility and reach. Additionally, we will leverage paid advertising platforms like Google Ads and social media advertising to precisely target relevant keywords, demographics, and interests. By leveraging data-driven advertising campaigns, we can quantitatively measure and optimize our marketing efforts to drive higher conversion rates and effectively reach our target audience. These strategies will enable us to efficiently acquire new customers and achieve sustainable revenue growth in line with our business objectives.
To drive customer acquisition, we plan to implement a referral program to encourage our existing customers to refer others to MR. CLOUD. By providing incentives for successful referrals, we leverage the power of word-of-mouth marketing to generate valuable leads and attract new customers. Additionally, we intend to offer free trials or freemium versions of our platform, allowing potential customers to experience the value and functionality of our solutions firsthand. This risk-free opportunity enables prospects to assess the benefits and suitability of our software for their specific needs, increasing the likelihood of conversion.
Expanding into new markets
We intend to expand into new international markets, focusing on those with low digital adoption and growing usage of software solutions. We will conduct thorough market research, analyzing factors such as market size, growth potential, competitive landscape, regulatory environment, and customer needs in each market to identify potential target markets that align with MR. CLOUD offerings. We will invest in our sales force to identify strategic partners in the potential markets to accelerate our entry and gain access to the potential customer base. By collaborating with local system integrators, resellers, or technology partners who have established networks and expertise in the market, such partnerships can help us navigate local business practices and increase our market reach.
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Continued investments in innovation and growth
Investments in innovation are pivotal factors that significantly influence the results of operations for our software solution services provider in Hong Kong. We intend to continue to invest in research and development to build new capabilities and maintain the core technology underpinning our white-labelled software design and development services. In addition, we expect to increase investment in sales and marketing to broaden our reach with new clients and abroad and deepen our penetration with existing clients. We are increasing our general and administrative spending to support our growing operations and prepare for operating as a public company. With our revenue growth objectives, we expect to continue to make such investments for the foreseeable future.
Basis of Presentation
Our unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“US GAAP”) and financial reporting requirements under the SEC rules. They include the financial statements of the Company and its subsidiaries. All transactions and balances among these entities have been eliminated upon consolidation.
Critical Accounting Policies, Judgments and Estimates
The preparation of unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities as at the date of the unaudited condensed consolidated financial statements and reported amounts of income and expenses during the reporting periods. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Significant accounting estimates reflected in the unaudited condensed consolidated financial statements include allowance for expected credit losses, the useful lives of property and equipment and intangible assets, and interest rate of lease, impairment assessment of property and equipment and intangible assets. Actual results may differ from these estimates.
We believe the following critical accounting policies reflect the more significant judgments and estimates we used in the preparations of our unaudited condensed consolidated financial statements.
Revenue recognition
The Company recognizes revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers, and subsequently issued additional related Accounting Standards Updates (collectively, “ASC 606”). The Company derives revenue principally from the provision of customized software solutions based on customers’ specifications, white labelled software design and development services and MR. CLOUD SaaS platform subscription services to SMBs customers. The Company enters into agreements with customers that create enforceable rights and obligations and for which it is probable that the Company will collect the consideration to which it will be entitled as services transfer to the customer. It is customary practice for the Company to have written agreements with its customers and revenue on oral or implied arrangements is generally not recognized. The Company recognizes revenue based on the consideration specified in the applicable agreement.
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Revenue from contracts with customers is recognized using the following five steps:
| 1. | identify the contract(s) with a customer; |
| 2. | identify the performance obligations in the contract; |
| 3. | determine the transaction price; |
| 4. | allocate the transaction price to the performance obligations in the contract; and |
| 5. | recognize revenue when (or as) the entity satisfies a performance obligation. |
The Company has elected to apply the practical expedient in paragraph ASC 606-10-50-14 and does not disclose information about remaining performance obligations that have original expected durations of one year or less.
The Company elected a practical expedient that it does not adjust the promised amount of consideration for the effects of a significant financing component if the Company expects that, upon the inception of revenue contracts, the period between when the Company transfers its promised services or deliverables to its clients and when the clients pay for those services or deliverables will be one year or less.
As a practical expedient, the Company elected to expense the incremental costs of obtaining a contract when incurred if the amortization period of the asset that the Company otherwise would have recognized is one year or less.
Generally, revenue is recognized when the Company has negotiated the terms of the transaction, which includes determining either the overall price, the service or product has been delivered to the customer, no obligation is outstanding regarding that service or product, and the Company is reasonably assured that funds have been or will be collected from the customer.
The service offerings by the Company mainly comprise the following:
(a) Customized software solutions
The Company is engaged to provide a wide range of customized IT software including desktop software development service, website and mobile application development services. The contract is typically fixed priced with no variable consideration and does not provide any post contract client support or upgrades. The Company’s contracts are generally non-cancellable and non-refundable in the event of cancellation. The Company designs software and system based on clients’ specific needs which require the Company to perform services including design, development, and integration. These services also require significant customization. A series of promises are identified in a contract. But these promises are interrelated and not distinct. These promises are inputs used to complete the service. The customers cannot benefit from any standalone promise. Thus only one performance obligation with standard quality guarantee is identified in a contract. The performance obligation is satisfied at a point of time and recognized as revenue upon the completion of services to the customers, usually at the time when the result of services is tested and accepted by the customers. The duration of the development period is short, usually less than one year. The contracts contain negotiated billing terms which generally include multiple payment phases throughout the contract term and a portion of contract amount usually is billed upon the completion of the related projects. Contract liabilities will be recognized when payment was received and charged to statements of operations once customized software delivered.
Additionally, the Company provides product warranty on customized IT software for a period of 90 days from delivery of such software. The warranty is not a separate performance obligation because the nature of the warranty is to provide assurance that the software will function as expected and comply with agreed-upon specifications. The Company has not experienced material warranty costs and, therefore, does not believe an accrual for these costs is necessary. There is no maintenance attached in the contract.
The Company provides technical support service to the customer subsequent to the transfer of customized IT software for a period of time, typically 90 days from delivery of such software. The Company provides the technical support services at no additional consideration, the transaction price of the contract is allocated to customized IT software and technical support service by reference to their standalone price estimated using a residual approach. The standalone price of technical support services is considered to be minimal as the Company has not had to provide significant technical support services to date for our platform, no transaction price is allocated to technical support services for the six months ended June 30, 2024 and 2025.
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(b) White label software
The Company provides self-developed software as “White label” products to corporate customers. White label software is software that is sold unbranded, that their own branding can be added and then the software can be resold by accessing to the software as if the corporate customers developed it. Similar to customized software solutions, the Company is engaged by the customer to provide white label software and the customer is able to customize the white label software/application and integrate custom features into the default white label applications and software per their needs. Revenue from white label software is recognized when the relevant services have been rendered. The contract is typically fixed priced with no variable consideration and does not provide any post contract client support or upgrades. The Company’s contracts are generally non-cancellable and non-refundable in the event of cancellation. A series of promises are identified in a contract. But these promises are interrelated and not distinct. These promises are inputs used to complete the service. The customers cannot benefit from any standalone promise. Thus only one performance obligation with standard quality guarantee is identified in a contract. The performance obligation is satisfied at a point of time and recognized as revenue upon the completion of services to the customers, usually at the time when the result of services is tested and accepted the white label software by the customer. The duration of the development period is short, usually less than one year. The contracts contain negotiated billing terms which generally include multiple payment phases throughout the contract term and a portion of contract amount usually is billed upon the completion of the related projects. Contract liabilities will be recognized when payment was received and charged to statements of operations once white label product delivered.
Additionally, the Company provides product warranty on white label services for a period of 90 days from delivery of such software. The warranty is not a separate performance obligation because the nature of the warranty is to provide assurance that the software will function as expected and comply with agreed-upon specifications. The Company has not experienced material warranty costs and, therefore, does not believe an accrual for these costs is necessary. There is no maintenance attached in the contract.
The Company provides technical support service to the customer subsequent to the transfer of white label software for a period of time, typically 90 days from delivery of such software. The Company provides the technical support services at no additional consideration, the transaction price of the contract is allocated to white label software and technical support service by reference to their standalone price estimated using a residual approach. The standalone price of technical support services is considered to be minimal as the Company has not had to provide significant technical support services to date for our platform, no transaction price is allocated to technical support services for the six months ended June 30, 2024 and 2025.
(c) Subscription services
The Company provides SaaS digital business management software services through subscription which includes the right to use the MR. CLOUD ERP software and continuous technical support services such as upgrading applications and fixing the minor bugs to SMBs. MR. CLOUD is a cloud-based software delivery model to develop, deliver, and maintain a variety of ERP software and applications modules in a single platform, including human resources management, project and file management, email and marketing automation, financial and accounting, quotation and invoice management, inventory management, group messenger and customer relationship management, merging all of customers’ business processes on a single platform instead of having a different software and applications for each function of its business. Customer who subscribes to the service plan logs in to their accounts to use the subscribed service over the internet or mobile on a clouded basis.
The Company enters into a distinct and fixed-fee contract with its customers as a principal for the provision of SaaS digital business management software services on subscription basis. Pursuant to the contracts, the Company requires to provide a series of digital business management applications online either being accessed on web or mobile over contract terms beginning on the commencement date of each contract, which is the date its service is made available to customers. Billings to the customers are generally on a monthly or quarterly basis over the contract term, which is typically one year. There is no variable consideration in the transaction price. The Company’s contracts are generally non-cancellable and non-refundable in the event of cancellation. The subscription services contracts typically include a single performance obligation. There will be an update or upgrade of the MR. CLOUD ERP system when necessary and which can be utilized by existing customers automatically for the new functions during their contract period. There is no additional consideration for the update or upgrade of the software and the additional costs for the updates and upgrades were charged to statements of operations directly in the period incurred. The transaction price of the contract is allocated to the remaining contract period from the date of the upgraded software available for customers to use. No significant costs were incurred to update or upgrade the software during the six months ended June 30, 2024 and 2025. There is no maintenance services attached in the contract.
The revenue from subscription services is recognized over the contract term as clients receive and consume benefits of such services as provided. Accordingly, the Company recognizes revenues from subscription services on a monthly basis when it satisfies its performance obligations throughout the contract terms.
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Accounts receivable, net
Accounts receivable mainly represent amounts due from customers for provision of cloud-based SaaS services from subscription which are recorded net of allowance for the Company’s expected credit losses. The Company generally grant credit terms of 90 days to the clients. In evaluating the collectability of receivable balances, the Company considers specific evidence including aging of the receivable, the client’s payment history, its current creditworthiness and current economic trends and customer specific quantitative and qualitative factors that may affect our customers’ ability to pay. The Company regularly reviews the adequacy and appropriateness of the allowance for expected credit losses. Accounts receivable are written off after all collection efforts have ceased. As of December 31, 2024 and June 30, 2025, allowance for expected credit losses was US$326,813 and US$323,511, respectively.
Lease
ASC 842 supersedes the lease requirements in ASC 840 “Leases,” and generally requires lessees to recognize operating and finance lease liabilities and corresponding right-of-use assets on the balance sheet and to provide enhanced disclosures surrounding the amount, timing and uncertainty of cash flows arising from leasing arrangements. All leases in the Company and its subsidiaries (“Group”) are accounted for as operating leases.
We determine if an arrangement is a lease at inception. On our balance sheet, our corporate office lease is included in operating lease right-of-use (ROU) asset, current portion of operating lease liability and operating lease liability, net of current portion.
ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. For leases that do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. We use the implicit rate when readily determinable. Lease expense for lease payments is recognized on a straight-line basis over the lease term.
Significant judgment may be required when determining whether a contract contains a lease, the length of the lease term, the allocation of the consideration in a contract between lease and non-lease components, and the determination of the discount rate included in our office lease. We review the underlying objective of each contract, the terms of the contract, and consider our current and future business conditions when making these judgments.
Any lease with a term of 12 months or less is considered short-term. As permitted by ASC 842, short-term leases are excluded from the ROU assets and lease liabilities on the unaudited condensed consolidated balance sheets. Consistent with all other operating leases, short-term lease expense is recorded on a straight-line basis over the lease term.
The Financial Accounting Standards Board (“FASB”) issued a Q&A in March 2020 that focused on the application of lease guidance in ASC 842 for lease concessions related to the effects of COVID-19. The FASB staff has said that entities can elect to not evaluate whether concessions granted by lessors related to COVID-19 are lease modifications. Entities that make this election can then apply the lease modification guidance in ASC 842 or account for the concession as if it were contemplated as part of the existing contract. The Company has elected to not treat the concessions as lease modifications and will instead account for the lease concessions as if they were contemplated as part of the existing leases. The Company has recorded negative variable lease expense and adjusted lease liabilities at the point in which the rent concession has become accruable.
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The Company evaluates the impairment of its right-of-use assets consistent with the approach applied for its other long-lived assets. The Company reviews the recoverability of its long-lived assets when events or changes in circumstances occur that indicate that the carrying value of the asset may not be recoverable. The assessment of possible impairment is based on its ability to recover the carrying value of the asset from the expected undiscounted future pre-tax cash flows of the related operations. The Company has elected to include the carrying amount of finance and operating lease liabilities in any tested asset group and include the associated lease payments in the undiscounted future pre-tax cash flows. For the six months ended June 30, 2024 and 2025, the Group did not have any impairment loss against its operating lease right-of-use assets.
Income taxes
Cayman Islands
The Cayman Islands currently levy no taxes on individuals or corporations based upon profits, income, gains or appreciations and there is no taxation in the nature of inheritance tax or estate duty. There are no other taxes likely to be material to the Company levied by the Government of the Cayman Islands save for certain stamp duties which may be applicable, from time to time, on certain instruments.
BVI
Victory Hero is incorporated in the BVI and is not subject to tax on income or capital gains under current BVI law. In addition, upon payments of dividends by these entities to their shareholders, no BVI withholding tax will be imposed.
Hong Kong
Wching HK is incorporated in Hong Kong and is 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. The applicable tax rate is 16.5% in Hong Kong. From year of assessment of 2019/2020 onwards, Hong Kong profits tax rates are 8.25% on assessable profits up to HK$2,000,000 (approximately US$256,000), and 16.5% on any part of assessable profits over HK$2,000,000 (approximately US$256,000). Under Hong Kong tax law, the above-mentioned Hong Kong company is exempted from income tax on its foreign-derived income and there are no withholding taxes in Hong Kong on remittance of dividends.
For the six months ended June 30, 2024 and 2025, the Company generated substantially all of its taxable income in the Hong Kong. The tax expenses recorded in the Company’s result of operations are almost entirely attributable to income earned in Hong Kong. Should the Company’s operations expand or change in the future, where the Company generates taxable income in other jurisdictions, the Company’s effective tax rates may substantially change.
Recently issued accounting pronouncements
See the discussion of the recent accounting pronouncements contained in Note 2 to the unaudited condensed consolidated financial statements, “Summary of Significant Accounting Policies and Practices.”
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Results of Operations
The following table sets forth a summary of the unaudited condensed consolidated results of operations of us for the periods indicated:
| Six months ended June 30, | ||||||||
| 2024 | 2025 | |||||||
| US$ | US$ | |||||||
| REVENUES | ||||||||
| Customized software solutions | 803,830 | 627,753 | ||||||
| White label software | 9,260 | 487,013 | ||||||
| Subscription services | 247,990 | 82,800 | ||||||
| TOTAL REVENUES | 1,061,080 | 1,197,566 | ||||||
| COST OF REVENUES | 338,122 | 410,120 | ||||||
| GROSS PROFIT | 722,958 | 787,446 | ||||||
| OPERATING EXPENSES | ||||||||
| Marketing development expenses | — | 2,172,328 | ||||||
| Staff costs and employee benefits | 112,374 | 1,157,415 | ||||||
| Rental and office expenses | 54,120 | 46,969 | ||||||
| Legal and professional fees | 70,605 | 577,576 | ||||||
| Depreciation | 14,467 | 14,517 | ||||||
| Others | 8,302 | 76,561 | ||||||
| TOTAL OPERATING EXPENSES | 259,868 | 4,045,366 | ||||||
| INCOME (LOSS) FROM OPERATIONS | 463,090 | (3,257,920 | ) | |||||
| OTHER INCOME (EXPENSES) | ||||||||
| Interest income | 68 | 541 | ||||||
| Interest expense | (8,975 | ) | (6,359 | ) | ||||
| Investment gain (loss) | 255 | (276 | ) | |||||
| Government subsidies | 17,054 | — | ||||||
| Other income (expense) | (1,605 | ) | (8,203 | ) | ||||
| TOTAL OTHER INCOME (EXPENSE), NET | 6,797 | (14,297 | ) | |||||
| INCOME (LOSS) BEFORE INCOME TAX | 469,887 | (3,272,217 | ) | |||||
| INCOME TAX (EXPENSES) CREDITS | (88,734 | ) | 307,108 | |||||
| NET INCOME (LOSS) | 381,153 | (2,965,109 | ) | |||||
Revenue
We primarily generate our revenue by providing customized software solutions, cloud-based software-as-a-service (“SaaS”) platforms, and “white-label” software design and development services to our creators and customers. We recognize all our revenue on a gross basis, comprising (i) customized software solution; (ii) white label software; and (iii) subscription services.
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Our total revenues increased by approximately US$136,486 or 12.9% to approximately US$1,197,566 for the six months ended June 30, 2025 from approximately US$1,061,080 for the six months ended June 30, 2024. Such increase was mainly attributable to the increase in white label software services of approximately US$477,753 and partially offset by decrease in revenue generated from our provision of customized software solution services and subscription services by approximately US$176,077 and US$165,190, respectively. Details of further explanation were discussed below.
| (i) | Revenue by product categories |
| Six months ended June 30, | ||||||||||||||||
| 2024 | 2025 | |||||||||||||||
| US$ | % | US$ | % | |||||||||||||
| Customized software solutions | 803,830 | 75.8 | % | 627,753 | 52.4 | % | ||||||||||
| White label software | 9,260 | 0.8 | % | 487,013 | 40.7 | % | ||||||||||
| Subscription services | 247,990 | 23.4 | % | 82,800 | 6.9 | % | ||||||||||
| Total | 1,061,080 | 100.0 | % | 1,197,566 | 100.0 | % | ||||||||||
Customized software solutions
For the six months ended June 30, 2024 and 2025, revenue generated from our provision of customized software solutions accounted for approximately 75.8% and 52.4% of our total revenues, respectively. We provide customized software solutions based on customers’ specifications. The decrease in the revenues from customized software solutions by US$176,077 or 21.9% from US$803,830 for the six months ended June 30, 2024 to US$627,753 for the six months ended June 30, 2025 was principally due to the decrease in demand as government subsidies were reduced to SMBs for enhancing operations through ERP system acquisitions.
White label software
For the six months ended June 30, 2024 and 2025, revenue generated from our provision of white label software accounted for approximately US$9,260 or 0.8% and US$487,013 or 40.7% of our total revenues, respectively. We provide self-developed software as “White label” products to our customers. White label software is software that is sold unbranded, that their own branding can be added and then the software can be resold by accessing to the software as if the corporate customers developed it. The increase in the revenues in white label software by US$477,753 or 5,159.3% from US$9,260 for the six months ended June 30, 2024 to US$487,013 for the six months ended June 30, 2025, was due to the completion and acceptance of one of white label software project during the period.
Subscription services
For the six months ended June 30, 2024 and 2025, revenue generated from the provision of subscription services accounted for approximately US$247,990 or 23.4% and US$82,800 or 6.9% of our total revenues, respectively. We provide SaaS digital business management software subscription services, which include the right to use the software and continuous technical support services to SMBs. Decrease in the revenue from subscription services by US$165,190 or 66.6% from US$247,990 for the six months ended June 30, 2024 to US$82,800 for the six months ended June 30, 2025 which was principally contributed to the subscription service period extended from 12 months to 24 months which led to the decrease in revenue recognized during the period.
Cost of revenues
| Six months ended June 30, | ||||||||||||||||
| 2024 | 2025 | |||||||||||||||
| US$ | % | US$ | % | |||||||||||||
| Customized software solutions | 104,627 | 30.9 | % | 62,268 | 15.2 | % | ||||||||||
| White label software | 8,307 | 2.5 | % | 297,305 | 72.5 | % | ||||||||||
| Subscription services | 225,188 | 66.6 | % | 50,547 | 12.3 | % | ||||||||||
| Total | 338,122 | 100.0 | % | 410,120 | 100.0 | % | ||||||||||
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Cost of revenues mainly consists of amortization of intangible assets, subcontracting costs, IT personnel staff cost and rental of server. For the six months ended June 30, 2024 and 2025, cost of revenues was US$338,122 and US$410,120, respectively, increase in cost of revenues by US$71,998 or 21.3% is mainly due to the increase in amortization of intangible asset of US$184,980 which was resulted from the purchase of additional modules of the ERP system from third parties at a consideration of US$955,500 during the six months ended June 30, 2025 and partially offset against the decrease in maintenance cost by US$93,742 as due to the additional ERP systems acquired and the waiver of certain maintenance fee during the period.
Gross profit
| Six months ended June 30, | ||||||||||||||||||||||||||||||||
| 2024 | 2025 | |||||||||||||||||||||||||||||||
| Category | Revenues | Cost of revenues | Gross profit | Gross profit margin | Revenues | Cost of revenues | Gross profit | Gross profit margin | ||||||||||||||||||||||||
| US$ | US$ | US$ | % | US$ | US$ | US$ | % | |||||||||||||||||||||||||
| Customized software solutions | 803,830 | 104,627 | 699,203 | 87.0 | % | 627,753 | 62,268 | 565,485 | 90.1 | % | ||||||||||||||||||||||
| White label software | 9,260 | 8,307 | 953 | 10.3 | % | 487,013 | 297,305 | 189,708 | 39.0 | % | ||||||||||||||||||||||
| Subscription services | 247,990 | 225,188 | 22,802 | 9.2 | % | 82,800 | 50,547 | 32,253 | 39.0 | % | ||||||||||||||||||||||
| Total | 1,061,080 | 338,122 | 722,958 | 68.1 | % | 1,197,566 | 410,120 | 787,446 | 65.8 | % | ||||||||||||||||||||||
For the six months ended June 30, 2024 and 2025, gross profit was US$722,958 and US$787,446, respectively, and gross profit margin was 68.1% and 65.8%, respectively, of operating revenue.
For customized software solutions, the gross profit decreased by US$133,718 or 19.1% from US$699,203 for the six months ended June 30, 2024 to US$565,484 for the six months ended June 30, 2025. The decrease mainly due to decrease in revenue from customized software solutions service as the government's subsidies were reduced to SMBs for enhancing operations through ERP system acquisitions during the period.
For white label software, the gross profit increased by US$188,755 or 19,806.4% from US$953 for the six months ended June 30, 2024 to US$189,708 for the six months ended June 30, 2025. The increase in gross profit and gross profit margin was mainly due to the completion and acceptance of the largest white label project during the current period
For subscription service, the gross profit increased by US$9,451 or 41.5% from US$22,802 for the six months ended June 30, 2024 to US$32,253 for the six months ended June 30, 2025. Such increase mainly due to the Company assigned more resources for the white label software projects as subscription service remained relatively stable and standardized during the period, resulting in a decrease in the cost of subscription services.
Operating expenses
| Six months ended June 30, | ||||||||||||||||
| 2024 | 2025 | Increase/(decrease) | ||||||||||||||
| US$ | US$ | US$ | % | |||||||||||||
| Marketing development expenses | — | 2,172,328 | 2,172,328 | N/A | ||||||||||||
| Staff costs and employee benefits | 112,374 | 1,157,415 | 1,045,041 | 930.0 | % | |||||||||||
| Rental and office expenses | 54,120 | 46,969 | (7,151 | ) | (13.2 | )% | ||||||||||
| Legal and professional fees | 70,605 | 577,576 | 506,971 | 718.0 | % | |||||||||||
| Depreciation | 14,467 | 14,517 | 50 | 0.3 | % | |||||||||||
| Others | 8,302 | 76,561 | 68,259 | 822.2 | % | |||||||||||
| TOTAL OPERATING EXPENSES | 259,868 | 4,045,366 | 3,785,498 | 1,456.7 | % | |||||||||||
10
Operating expenses includes selling expenses and administrative expenses for the daily operations of the Company. For the six months ended June 30, 2024 and 2025, total operating expenses were US$259,868 and US$4,045,366, respectively. The increase of operating expenses by US$3,785,498 or 1,456.7% was mainly due to increase in marketing development expenses, legal and professional fees and staff costs and employee benefit for the six months ended June 30, 2025. Increase in marketing development expenses by US$2,172,328 as the Company explored the new market in Asia and South Asia including Japan, Vietnam, Cambodia, etc., increase in legal and professional fees by US$506,971 or 718.0% from US$70,605 for the six months ended June 30, 2024 to US$577,576 for the six months ended June 30, 2025 was mainly due to the consultancy and advisory fee for technology development and product innovation for US$352,000 and internal control and compliance of US$76,677 and other listing maintenance fee during the six months ended June 30, 2024 and increase in staff costs and employee benefit due to the share award to Mr. Shek Kin Pong, the Controlling Shareholder, of US$880,000 and the salary increment due to inflation.
Other income (expense), net
For the six months ended June 30, 2024 and 2025, total other income, net was US$6,797 and total other expenses, net was US$14,297, respectively. The other income (expenses) mainly represented the interest income and investment gain (loss) for investment, interest expense on bank borrowings and government subsidies. Decrease in other income to other expenses is mainly due to the decrease in other income from government subsidies received pursuant to the Employment Support Scheme (“ESS”) under the Anti-epidemic Fund from the Hong Kong government by US$17,054 or 100.0% from US$17,054 for six months ended June 30, 2024 to nil for six months ended June 30, 2025.
Income tax
We are subject to income tax on an entity basis on profit arising in or derived from the jurisdiction in which members of our Group domicile or operate.
Cayman Islands
The Cayman Islands currently levy no taxes on individuals or corporations based upon profits, income, gains or appreciations and there is no taxation in the nature of inheritance tax or estate duty. There are no other taxes likely to be material to the Company levied by the Government of the Cayman Islands save for certain stamp duties which may be applicable, from time to time, on certain instruments.
BVI
Victory Hero is incorporated in the BVI and is not subject to tax on income or capital gains under current BVI law. In addition, upon payments of dividends by these entities to their shareholders, no BVI withholding tax will be imposed.
Hong Kong
Wching HK is incorporated in Hong Kong and is 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. The applicable tax rate is 16.5% in Hong Kong. From year of assessment of 2019/2020 onwards, Hong Kong profits tax rates are 8.25% on assessable profits up to HK$2,000,000 (approximately US$256,000), and 16.5% on any part of assessable profits over HK$2,000,000 (approximately US$256,000). Under Hong Kong tax law, the above-mentioned Hong Kong company is exempted from income tax on its foreign-derived income and there are no withholding taxes in Hong Kong on remittance of dividends.
11
Our income tax for the six months ended June 30, 2024 and 2025, was income tax expenses of US$88,734 and income tax credit of US$307,108, primarily due to the increase in deferred tax credit of US$418,019 derived from the tax losses. Our effective tax rates were 18.9% and 9.4% for the six months ended June 30, 2024 and 2025, respectively.
Net income (loss)
Our net income (loss) for the six months ended June 30, 2024 and 2025, was US$381,153 and US$2,965,109, respectively. The Company turned net income to net loss was mainly due to the predominantly the increase in our overall operating cost in 2025.
Liquidity and Capital Resources
The following table sets forth a breakdown of our current assets and liabilities as of the dates indicated.
| As of | ||||||||
| December 31, 2024 | June 30, 2025 | |||||||
| US$ | US$ | |||||||
| ASSETS | (Audited) | (Unaudited) | ||||||
| Current assets: | ||||||||
| Cash and cash equivalents | 250,312 | 71,538 | ||||||
| Accounts receivable, net | 452,823 | 1,070,251 | ||||||
| Deposits, prepayments and other receivables, net | 875,823 | 2,979,655 | ||||||
| Total current assets | 1,578,958 | 4,121,444 | ||||||
| Current liabilities: | ||||||||
| Accruals and other payables | 245,033 | 98,171 | ||||||
| Contract liabilities | 315,411 | 190,059 | ||||||
| Deferred government subsidy | 38,716 | 38,325 | ||||||
| Bank borrowings | 433,991 | 412,386 | ||||||
| Lease liabilities | 90,199 | 90,806 | ||||||
| Amount due to a director | 260,416 | — | ||||||
| Tax payables | 128,982 | 127,679 | ||||||
| Total current liabilities | 1,512,748 | 957,426 | ||||||
Accounts receivable, net
Accounts receivable mainly represent amounts due from customers for provision of cloud-based SaaS services from subscription and customized software solutions which are recorded net of allowance for the Company’s expected credit loss. The Company generally grant credit terms of 90 days to the clients. In evaluating the collectability of receivable balances, the Company considers specific evidence including aging of the receivable, the client’s payment history, its current creditworthiness and current economic trends and customer specific quantitative and qualitative factors that may affect our customers’ ability to pay. The Company regularly reviews the adequacy and appropriateness of the allowance for expected credit loss. Accounts receivables are written off after all collection efforts have ceased. As of December 31, 2024, accounts receivables were aged within one year and allowance for expected credit losses provided was US$326,813. As of June 30, 2025, accounts receivable were aged within two years and allowance for expected credit losses provided was US$323,511.
Our accounts receivable balance increased by US$617,428, or 136.4% from US$452,823 as of December 31, 2024 to US$1,070,251 as of June 30, 2025. The increase was mainly due to the increase in revenue and partially offset by the settlement of accounts receivable from customers during the six months ended June 30, 2025.
12
Deposits, prepayments and other receivables, net
Our deposits, prepayments and other receivables, net as of June 30, 2025 increased by approximately US$2,103,832 or 240.2% from approximately US$875,823 as of December 31, 2024 to approximately US$2,979,655 as of June 30, 2025, mainly due to prepayment for the Company’s rebranding and market development expenses for Asia and South Asia market.
Amount due to a director
| As of | ||||||||||
| Name | Relationship | December 31, 2024 | June 30, 2025 | |||||||
| US$ | US$ | |||||||||
| Mr. Shek Kin Pong | Director and Controlling Shareholder of the Company | (260,416 | ) | — | ||||||
| (260,416 | ) | — | ||||||||
The balance with the director of due to US$260,416 and nil as of December 31, 2024 and June 30, 2025, respectively, represented the fund transfer to Mr. Shek Kin Pong, the director and Controlling Shareholder of the Company, for the operations of related companies. The balances as of December 31, 2024 and June 30, 2025 with the director are unsecured, interest free with no specific repayment terms and non-trade nature.
Bank borrowings
Bank borrowings are initially recognized at fair value, net of upfront fees incurred. Borrowings are subsequently measured at amortized cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognized in statements of operations over the period of the borrowings using the effective interest method. All bank borrowings were classified as short term due to repayment on demand clauses attached on the borrowings. As of December 31, 2024 and June 30, 2025, the bank borrowings were approximately US$433,991 and US$412,386, respectively. There is no material movement was noted.
Accruals and other payables
Accruals and other payables primarily include accrued staff costs, accrued professional fee, payables for rental of server for the software a product that the Group is offering and other accrual and payable for the operation of the ordinary course of business.
Our accruals and other payables as of June 30, 2025 decreased by approximately US$146,862 or 59.9% from approximately US$245,033 as of December 31, 2024 to approximately US$98,171 as of June 30, 2025, mainly due to the decrease of accrued professional fee for of the audit fee for reporting purpose.
Deferred government subsidy
The balance represented the government subsidy of approximately US$38,536 received from the Hong Kong Government during the year ended December 31, 2022, in relation to the Dedicated Fund on Branding, Upgrading and Domestic Sales (“BUD Fund”) (Free Trade Agreement (“FTA”) Program) in Hong Kong which aims to fund projects and activities to assist Hong Kong enterprises in developing brands, upgrading and restructuring operations and promoting sales in the FTA economies, so as to enhance their competitiveness and facilitate their business development in the FTA economies. Such amount was recognized in the unaudited condensed consolidated balance sheets as deferred government subsidy due to the conditions attached in the BUD Fund have not been fulfilled as of December 31, 2024 and June 30, 2025.
Lease liabilities
Our lease liabilities represented the current position of our non-cancellable lease agreement of our corporate office in Hong Kong, and were reduced by amortization charge and lease payments were made, respectively.
Decrease in lease liabilities by approximately US$45,962 or 27.4% as of June 30, 2025 from approximately US$167,723 as of December 31, 2024 to approximately US$121,761 as June 30, 2025 was mainly due to the payment of lease during the six months ended June 30, 2025.
13
Contract liabilities
Contract liabilities are recorded when consideration is received from a customer prior to transferring the services to the customer or other conditions under the terms of a service contract. These payments are non-refundable and are recognized as revenue when our performance obligation is satisfied. As of December 31, 2024 and June 30, 2025, the Company recorded contract liabilities of US$315,411 and US$190,059, respectively. Decrease in our contract liabilities by approximately of US$125,352 or 39.7% as of June 30, 2025 was primarily due to the Company received customers in advance less than the recognition of revenues because of completion of performance obligations during the six months ended June 30, 2025.
Cash Flows
Our use of cash primarily related to operating activities. We have historically financed our operations primarily through our cash flow generated from our operations and advances from related parties.
The following table summarizes our cash flows for the years indicated:
| Six Months Ended June 30, | ||||||||
| 2024 | 2025 | |||||||
| US$ | US$ | |||||||
| Net cash generated from (used in) operating activities | 416,439 | (8,855,965 | ) | |||||
| Net cash used in investing activities | (630,123 | ) | (766,093 | ) | ||||
| Net cash generated from financing activities | 208,164 | 9,449,231 | ||||||
| Net decrease in cash and cash equivalents | (5,520 | ) | (172,827 | ) | ||||
| Cash and cash equivalents at beginning of period | 12,783 | 250,312 | ||||||
| Effect of foreign exchange differences | 936 | (5,947 | ) | |||||
| Cash and cash equivalents at end of period | 8,199 | 71,538 | ||||||
Cash flows generated from (used in) operating activities
During the six months ended June 30, 2024 and 2025, the cash inflows from our operating activities were primarily derived from the revenues generated from our provision for customized software solutions, white label software and subscription services; whereas the cash outflows for our operating activities mainly comprised staff cost and employee benefits, subcontracting costs, marketing development expenses, and other operating expenses including rental and office expenses and legal and professional fees.
Our net cash generated from operating activities primarily reflected our net income, as adjusted for non-cash items, such as depreciation and amortization of intangible assets, and effects of changes in operating assets and liabilities such as increase or decrease in accounts receivable, deferred tax assets, prepayments, accruals and other payables, deferred government subsidy, contract liabilities and deferred tax liabilities.
For the six months ended June 30, 2024, our net cash generated from operating activities was US$416,439, which primarily arising from our net income from operation of approximately US$381,153, as adjusted for non-cash items and changes in operating assets and liabilities. Adjustments for non-cash items mainly consisted of (i) depreciation of property and equipment of US$20,237; and (ii) amortization of intangible assets of US$97,722; and (iii) allowance for expected credit losses of US$4,635. Changes in operating assets and liabilities mainly include (i) the increase in accounts receivable by US$423,597 mainly due to the decrease in settlement of accounts receivable from the customers during the six months ended June 30, 2024; (ii) decrease in accruals and other payables of US$84,146 mainly due to the settlement of accrued professional fee for the IPO purpose, and partially offset by (i) deferred tax liabilities by US$88,734 mainly due to the temporary differences of depreciation and amortization of intangible assets and increase in tax losses; (ii) the increase in accounts payable by US$74,170 due to increase in purchase of system equipment; (iii) the increase in contract liabilities of US$247,079 due to receipt from the customers during the six months ended June 30, 2024; and (iv) decrease in deposits, other receivables and prepayments of US$10,707 due to the utilization of prepayment for the maintenance fee to the subcontractor.
For the six months ended June 30, 2025, our net cash used in operating activities was US$8,855,965, which primarily arising from our net loss from operation of approximately US$2,965,109, as adjusted from non-cash items and changes in operating assets and liabilities. Adjustments for non-cash items mainly consisted of (i) depreciation of property and equipment of US$20,069; (ii) amortization of intangible assets of US$282,702; (iii) investment loss of US$276 and (iv) share-based payment of US$1,232,000. Changes in operating assets and liabilities mainly include (i) the increase in accounts receivable by US$617,428 due to the settlement of accounts receivable from the customers during the period less than the increase in accounts receivable; (ii) increase in deposits, other receivables and prepayments of US$6,081,175 as the Company made prepayments for rebranding and market survey in Asia and South Asia and acquisition of intangible assets, (iii) decrease in accruals and other payables of US$295,691 mainly due to settlement of accrued professional fee of audit fee, and (iv) the increase in deferred tax assets and the decrease in deferred tax liabilities of US$113,592 and US$192,665 respectively mainly due to the temporary differences of depreciation, amortization of intangible assets and tax losses and (v) decrease in contract liabilities of US$125,352 due to decrease in receipt from the customers during the six months ended June 30, 2025.
14
Cash flows used in investing activities
Our cash flows used in investing activities primarily consisted of (i) the purchases of intangible assets;
For the six months ended June 30, 2024, net cash used in investing activities was approximately US$630,123, mainly arising from acquisition of intangible assets of approximately US$630,123 which represented the ERP software acquired from third parties during the period.
For the six months ended June 30, 2025, net cash used in investing activities was approximately US$766,093, mainly arising from purchase of intangible assets of approximately US$766,093 which represented the ERP software acquired from a third party during the period.
Cash flows generated from financing activities
Our cash flows generated from (used in) financing activities primarily consisted of (i) repayment of bank borrowings; (ii) advances from a director; (iii) repayment to a director; and (iv) repayment to related parties.
For the six months ended June 30, 2024, net cash generated from financing activities was approximately US$208,164, mainly arising from (i) repayment for bank borrowing of US$13,961; and partially offset by (i) repayment from a director of US$222,125.
For the six months ended June 30, 2025, net cash used in financing activities was approximately US$9,449,231, mainly arising from (i) proceeds from private placement of US$9,727,011 and offset by repayment to a director of approximately US$260,416; and (ii) repayment for bank borrowings of approximately US$17,364.
Cash Flow Sufficiency
In order to meet the debt obligations and operating needs of our business, our management expects to satisfy the cash flow needs through (i) maintaining stable relationships with banks in order to renew the bank borrowings upon maturity or to arrange for additional banking facilities for use when necessary; (ii) maintaining stable cash inflows and avoiding breaching any debt covenants attached in the existing bank borrowings which has original maturity of eight years; (iii) closely monitoring the collection status of accounts receivable and actively following up with our customers for settlements; (iv) diversifying and broadening our customer base to avoid reliance on particular customers and to expand our sources of revenue and cash flow; (v) effectively managing accounts payable and negotiating for longer credit periods from suppliers, when necessary; (vi) obtaining financial support from our Controlling Shareholder and investors to meet short-term operating expenses; and (vii) continuing to focusing on improving operational efficiency and cost reductions and enhancing efficiency.
The Company believes that, taking into consideration the present available banking facilities and internal financial resources we have, including the current levels of cash and cash flows from operations, and the measures mentioned above, will be sufficient to meet its anticipated cash needs for at least the next twelve months from the date of this report.
Commitments
Operating lease commitment as a lessee
The maturity analysis of the Company’s undiscounted non-cancellable operating lease obligations as of June 30, 2025 is as follows:
| Operating leases | ||||
| US$ | ||||
| Year ending June 30, 2026 | 93,257 | |||
| Year ending June 30, 2027 | 31,086 | |||
| Total undiscounted lease obligations | 124,343 | |||
| Less: imputed interest | (2,582 | ) | ||
| Lease liabilities recognized in the unaudited condensed consolidated balance sheet | 121,761 | |||
15
Capital commitments
As of December 31, 2024 and June 30, 2025, our Group did not have any capital commitments.
Capital Expenditure
Historical capital expenditures
Our capital expenditures during the six months ended June 30, 2024 and 2025 were mainly related to the addition of intangible asset of approximately US$630,123 and US$766,093, respectively. We principally funded our capital expenditures through cash flows from operations and borrowings during the six months ended June 30, 2024 and 2025.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements, including arrangements that would affect its liquidity, capital resources, market risk support, and credit risk support or other benefits.
Quantitative and Qualitative Disclosure About Market Risk
Credit risk
The Company’s assets that are potentially subject to a significant concentration of credit risk primarily consist of bank balances and accounts receivable.
Bank balances
The Company believes that there is no significant credit risk associated with cash in Hong Kong, which were held by reputable financial institutions in the jurisdiction where the Company and its subsidiaries are located. The Hong Kong Deposit Protection Board pays compensation up to a limit of approximately US$103,000 if the bank with which an individual/a company hold its eligible deposit fails. As of December 31, 2024 and June 30, 2025, bank balances of US$250,312 and US$71,538, respectively, maintained at financial institutions in Hong Kong were insured by the Hong Kong Deposit Protection Board.
Accounts receivable
The Company has designed credit policies with an objective to minimize their exposure to credit risk. The Company’s accounts receivable are short term in nature and the associated risk is minimal. The Company conducts credit evaluations on customers and generally do not require collateral or other securities from such customers. The Company periodically evaluates the creditworthiness of the existing customers in determining an allowance for expected credit loss primarily based upon the aging of the receivable, the client’s payment history, its current creditworthiness and current economic trends. Since minimum credit risk was noted for accounts receivable as at December 31, 2024 and 30 June, 2025. As of December 31, 2024 and June 30, 2025, accounts receivable were aged within one year and two years, respectively, and allowances for expected credit loss of US$326,813 and US$323,511, respectively were provided.
16
Customer concentration risk
For the six months ended June 30, 2024, two customers accounted for 21.6% and 10.8% of our total revenues. The two customers signed Wching Tech Ltd Co. Limited (“Wching HK”)’s standard software development agreement, including provisions regarding deliverables, payment, confidentiality, intellectual property, warranties, indemnification, assignment, and governing law. The non-breaching party may terminate the agreement for a material breach of any terms and conditions within such agreement, and either party may terminate the agreement if the other party receives convictions of criminal offenses or files for bankruptcy during the term of the agreement. We usually provide a 90-day continuing support service from the application delivery, including repairs of bugs, glitches, and other issues related to the delivered application, and we do not charge separately for these support services.
For the six months ended June 30, 2024, five customers accounted for 20.2%, 18.9%, 16.2%, 14.5% and 12.4% of our total revenues. For the six months ended June 30, 2025, two customers accounted for 40.7% and 12.9% of our total revenues. No other customer accounts for more than 10% of our revenues for the six months ended June 30, 2024 and 2025, respectively.
As of December 31, 2024, five customers accounted for 21.0%, 14.5%, 13.2%, 12.8% and 11.9% of the total balance of accounts receivable. As of June 30, 2025, three customers accounted for 21.0%, 11.6% and 11.0% of the total balance of accounts receivable. No other customer accounts for more than 10% of our accounts receivable as of December 31, 2024 and June 30, 2025, respectively.
Interest rate risk
The Company is exposed to cash flow interest rate risk through the changes in interest rates related mainly to the Company’s bank borrowings and cash and cash equivalents. The Company currently does not have any interest rate hedging policy in relation to fair value interest rate risk and cash flow interest rate risk. The directors monitor the Company’s exposures on an ongoing basis and will consider hedging the interest rate should the need arises.
Foreign currency risk
The reporting currency of the Company is US$. To date the majority of the revenues and costs are denominated in HK$ and a significant portion of the assets and liabilities are denominated in HK$. There was no significant exposure to foreign exchange rate fluctuations and the Company has not maintained any hedging policy against foreign currency risk. The management will consider hedging significant currency exposure should the need arise.
Trend Information
Other than the occurrence of force majeure events and natural disasters may adversely affect our business, financial condition and results of operations” in this interim report, we are not aware of any trends, uncertainties, demands, commitments or events that are reasonably likely to have a material effect on our operating revenue, income from continuing operations, profitability, liquidity or capital resources, or that would cause reported financial information not necessarily to be indicative of future operating results or financial condition.
17
Exhibit 99.2
WELLCHANGE HOLDINGS COMPANY LIMITED
INDEX TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
F-1
WELLCHANGE HOLDINGS COMPANY LIMITED
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 2024 AND JUNE 30, 2025
| As of | ||||||||
| December 31, 2024 | June 30, 2025 | |||||||
| US$ | US$ | |||||||
| ASSETS | (Audited) | (Unaudited) | ||||||
| Current assets: | ||||||||
| Cash and cash equivalents | ||||||||
| Accounts receivable, net | ||||||||
| Deposits, prepayments and other receivables, net | ||||||||
| Total current assets | ||||||||
| Non-current assets: | ||||||||
| Property and equipment, net | ||||||||
| Intangible assets, net | ||||||||
| Right-of-use assets, net | ||||||||
| Investment, net | ||||||||
| Long term deposit and prepayment | ||||||||
| Prepayments for acquisition of intangible assets | ||||||||
| Deferred offering costs | ||||||||
| Deferred tax assets | ||||||||
| Total non-current assets | ||||||||
| TOTAL ASSETS | ||||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accruals and other payables | ||||||||
| Contract liabilities | ||||||||
| Deferred government subsidy | ||||||||
| Bank borrowings | ||||||||
| Lease liabilities | ||||||||
| Amount due to a director | ||||||||
| Tax payables | ||||||||
| Total current liabilities | ||||||||
| Non-current liabilities: | ||||||||
| Lease liabilities | ||||||||
| Deferred tax liabilities | ||||||||
| Total non-current liabilities | ||||||||
| TOTAL LIABILITIES | ||||||||
| Commitments and contingencies (Note 17) | ||||||||
| Shareholders’ equity | ||||||||
| Ordinary shares, US$ | ||||||||
| Additional paid-in capital | ||||||||
| Share award reserve | ||||||||
| Retained earnings (accumulated losses) | ( | ) | ||||||
| Accumulated other comprehensive income | ||||||||
| Total shareholders’ equity | ||||||||
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| * |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
F-2
WELLCHANGE HOLDINGS COMPANY LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED JUNE 30, 2024 AND 2025
| Six months ended June 30, | ||||||||
| 2024 | 2025 | |||||||
| US$ | US$ | |||||||
| (Unaudited) | (Unaudited) | |||||||
| REVENUES | ||||||||
| Customized software solutions | ||||||||
| White label software | ||||||||
| Subscription services | ||||||||
| TOTAL REVENUES | ||||||||
| COST OF REVENUES | ||||||||
| GROSS PROFIT | ||||||||
| OPERATING EXPENSES | ||||||||
| Marketing development expenses | ||||||||
| Staff costs and employee benefits | ||||||||
| Rental and office expenses | ||||||||
| Legal and professional fees | ||||||||
| Depreciation | ||||||||
| Others | ||||||||
| TOTAL OPERATING EXPENSES | ||||||||
| INCOME (LOSS) FROM OPERATIONS | ( | ) | ||||||
| OTHER INCOME (EXPENSES) | ||||||||
| Interest income | ||||||||
| Interest expense | ( | ) | ( | ) | ||||
| Investment gain (loss) | ( | ) | ||||||
| Government subsidies | ||||||||
| Other income (expense) | ( | ) | ( | ) | ||||
| TOTAL OTHER INCOME (EXPENSE), NET | ( | ) | ||||||
| INCOME (LOSS) BEFORE INCOME TAX | ( | ) | ||||||
| INCOME TAX (EXPENSES) CREDITS | ( | ) | ||||||
| NET INCOME (LOSS) | ( | ) | ||||||
| OTHER COMPREHENSIVE INCOME (LOSS) | ||||||||
| Total foreign currency translation adjustment | ( | ) | ||||||
| TOTAL COMPREHENSIVE INCOME (LOSS) | ( | ) | ||||||
| EARNINGS (LOSS) PER SHARE | ||||||||
| Basic and diluted* | ( | ) | ||||||
| WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES | ||||||||
| Basic and diluted* | ||||||||
| * |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
F-3
WELLCHANGE HOLDINGS COMPANY LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 2024 AND 2025
| Ordinary shares | Additional | (Accumulated losses)/ | Accumulated other | |||||||||||||||||||||||||
| No. of | paid-in | Subscription | retained | comprehensive | ||||||||||||||||||||||||
| shares* | Amount | capital | receivables | earnings | income | Total | ||||||||||||||||||||||
| US$ | US$ | US$ | US$ | US$ | US$ | |||||||||||||||||||||||
| BALANCE, January 1, 2024 (Audited) | ||||||||||||||||||||||||||||
| Net income | — | |||||||||||||||||||||||||||
| Foreign currency translation adjustment | — | |||||||||||||||||||||||||||
| BALANCE, June 30, 2024 (Unaudited) | ||||||||||||||||||||||||||||
| BALANCE, January 1, 2025 (Audited) | ||||||||||||||||||||||||||||
| Net loss | — | ( | ) | ( | ) | |||||||||||||||||||||||
| Proceeds from private placement | ||||||||||||||||||||||||||||
| Share awards | ||||||||||||||||||||||||||||
| Foreign currency translation adjustment | — | ( | ) | ( | ) | |||||||||||||||||||||||
| BALANCE, June 30, 2025 (Unaudited) | ( | ) | ||||||||||||||||||||||||||
| * | The shares and per share data are presented on a retroactive basis to reflect the reorganization (Notes 1 and 12). |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
F-4
WELLCHANGE HOLDINGS COMPANY LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2024 AND 2025
| Six months ended June 30, | ||||||||
| 2024 | 2025 | |||||||
| US$ | US$ | |||||||
| (Unaudited) | (Unaudited) | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net income (loss) | ( | ) | ||||||
| Adjustments to reconcile net income (loss) to net cash provided by operating activities | ||||||||
| Depreciation | ||||||||
| Amortization of intangible assets | ||||||||
| Investment gain (loss) | ( | ) | ||||||
| Allowance for expected credit losses | ||||||||
| Share-based payments | ||||||||
| Changes in operating assets and liabilities | ||||||||
| Accounts receivable | ( | ) | ( | ) | ||||
| Deposits, other receivables and prepayments | ( | ) | ||||||
| Deferred tax assets | ( | ) | ||||||
| Accounts payable | ||||||||
| Accruals and other payables | ( | ) | ( | ) | ||||
| Contract liabilities | ( | ) | ||||||
| Deferred tax liabilities | ( | ) | ||||||
| Net cash generated from (used in) operating activities | ( | ) | ||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Purchase of intangible assets | ( | ) | ( | ) | ||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Repayment for bank borrowings | ( | ) | ( | ) | ||||
| Proceeds from private placements | ||||||||
| Repayment from a director | ||||||||
| Repayment to a director | ( | ) | ||||||
| Net cash generated from financing activities | ||||||||
| NET CHANGE IN CASH AND CASH EQUIVALENTS | ( | ) | ( | ) | ||||
| CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD | ||||||||
| NET FOREIGN EXCHANGE DIFFERENCES | ( | ) | ||||||
| CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD | ||||||||
| SUPPLEMENTARY CASH FLOW INFORMATION: | ||||||||
| Interest received | ||||||||
| Interest paid | ( | ) | ( | ) | ||||
| * | The shares and per share data are presented on a retroactive basis to reflect the reorganization (Notes 1 and 12). |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
F-5
WELLCHANGE HOLDINGS COMPANY
LIMITED
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. ORGANIZATION AND BUSINESS OVERVIEW
Business
Wellchange Holdings Company Limited (the “Company”
or “Wellchange”) is a holding company incorporated as an exempted company on
Organization and reorganization
The Company was incorporated under the laws of
the Cayman Islands as a limited company on July 13, 2024 and as a holding company. As at the date of its incorporation, the authorized
share capital of the Company was US$
Victory Hero Capital Limited (“Victory Hero”), a British Virgin Islands (“BVI”) company incorporated by the Company in the BVI on August 14, 2024, is the immediate holding company of Wching HK after the group reorganization (the “Group Reorganization”) (see below).
Wching HK, a company with limited liability
incorporated in Hong Kong on April 20, 2012 with issued shares of
Pursuant to a Group Reorganization, to rationalize
the structure of the Company and its subsidiaries (collectively, the “Group”) in preparation for the listing of the Company’s
shares, the Company became the holding company of the Group on August 30, 2024, which involved (i) the incorporation of the
Company on July 13, 2024 and allotment of
F-6
WELLCHANGE HOLDINGS COMPANY LIMITED
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. ORGANIZATION AND BUSINESS OVERVIEW (cont.)
The consolidation of the Company and its subsidiaries have been accounted for at historical cost. No amount is recognized in respect of goodwill or excess of acquirer’s interest in the net fair value of acquiree’s identifiable assets, liabilities and contingent liabilities over cost at the time of common control combination. The unaudited condensed consolidated statements of operations and comprehensive income, unaudited condensed consolidated statements of changes in shareholders’ equity and unaudited condensed consolidated statements of cash flows are prepared as if the current Group structure had been in existence throughout the two- period ended June 30, 2024 and 2025, or since the respective dates of incorporation/establishment of the relevant entity, where this is a shorter period. The unaudited condensed consolidated balance sheets as of December 31, 2024 and June 30, 2025 present the assets and liabilities of the companies now comprising the Group which had been incorporated/established as at the relevant balance sheet date as if the current group structure had been in existence at those dates.
Upon the Group Reorganization and as at the date of this report, details of the subsidiaries company are as follows:
| Name | Background | Ownership | Principal activities | ||||
| Victory Hero Capital Limited (“Victory Hero”) | — | ||||||
| — | |||||||
| — | |||||||
| Wching Tech Ltd Co. Limited (“Wching HK”) | — | ||||||
| — | |||||||
| — | |||||||
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES
Basis of preparation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for information pursuant to the rules and regulations of the Securities and Exchange Commission.
Principles of consolidation
The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. A subsidiary is an entity (including a structured entity), directly or indirectly, controlled by the Company. The financial statements of the subsidiaries are prepared for the same reporting period as the Company, using consistent accounting policies. All transactions and balances among the Company and its subsidiaries have been eliminated upon consolidation.
Use of estimates and assumptions
The preparation of unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as at the date of the unaudited condensed consolidated financial statements and reported amounts of income and expenses during the reporting periods. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Significant accounting estimates reflected in the unaudited condensed consolidated financial statements include allowance for expected credit losses, the useful lives of property and equipment and intangible assets, impairment assessment of property and equipment and intangible assets and interest rate of lease. Actual results may differ from these estimates.
F-7
WELLCHANGE HOLDINGS COMPANY LIMITED
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES (cont.)
Foreign currency translation and transaction
The Group uses United States Dollar (“US$”) as reporting currency. The functional currency of the Company and its subsidiary incorporated in the Cayman Islands and BVI is US$ and the functional currency of its Hong Kong subsidiary is Hong Kong Dollar (“HK$”). The determination of the respective functional currency is based on the criteria of Accounting Standards Codification (“ASC”) Topic 830, “Foreign Currency Matters”.
In the unaudited condensed consolidated financial statements of the Company, transactions in currencies other than the functional currency are measured and recorded in the functional currency using the exchange rate in effect at the date of the transaction. At the balance sheet date, monetary assets and liabilities that are denominated in currencies other than the functional currency are translated into the functional currency using the exchange rate at the balance sheet date. All gains and losses arising from foreign currency transactions are recorded in the statements of operations and comprehensive income during the year in which they occur.
Convenience translation
The functional currency is US$ for the Company’s
Cayman Islands and BVI operations and HK$ for Hong Kong subsidiary operations. The Company’s reporting currency is the U.S. dollar.
Assets and liabilities denominated in foreign currencies are translated at year-end exchange rates, statements of income accounts are
translated at average rates of exchange for the year and equity is translated at historical exchange rates. Any translation gains or
losses are recorded in other comprehensive income.
| Six months ended June 30, | ||||||||
| 2024 | 2025 | |||||||
| Average rate | ||||||||
| As of, | ||||||||
| December 31, 2024 | June 30, 2025 | |||||||
| Year-end/period-end spot rate | ||||||||
Recently adopted accounting pronouncements
From time to time, new accounting pronouncements are issued by the Financial Accounting Standard Board (“FASB”) or other standard setting bodies and adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on its financial position or results of operations upon adoption.
In October 2023, the FASB issued Accounting Standards Updates (“ASU”) No. 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative, which amends the disclosure or presentation requirements related to various subtopics in the FASB Accounting Standards Codification (the “Codification”). This update will improve disclosure and presentation requirements of a variety of topics and align the requirements in the FASB codification with the SEC’s regulations. The Company is currently evaluating the potential effect of this ASU on its combined financial statements, but does not expect the impact to be material.
In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The disclosures requirements included in ASU 2023-07 are required for all public entities, including those with a single reportable segment. ASU 2023-07 is effective for annual periods beginning after December 15, 2023, on a retrospective basis, and early adoption is permitted. The adoption did not have material impact on the Company’s combined financial statement.
F-8
WELLCHANGE HOLDINGS COMPANY
LIMITED
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES (cont.)
In March 2024, the FASB issued ASU No. 2024-02, which removes references to the Board’s concepts statements from the FASB Accounting Standards Codification (the “Codification” or ASC). The ASU is part of the Board’s standing project to make “Codification updates for technical corrections such as conforming amendments, clarifications to guidance, simplifications to wording or the structure of guidance, and other minor improvements.” The Company does not believe the adoption of ASU 2024-02 will have a material impact on its combined financial statements and disclosures.
In December 2023, FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The amendments in this ASU require an entity to disclose specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold, which is greater than five percent of the amount computed by multiplying pretax income by the entity’s applicable statutory rate, on an annual basis. Additionally, the amendments in this ASU require an entity to disclose the amount of income taxes paid (net of refunds received) disaggregated by federal, state, and foreign taxes and the amount of income taxes paid (net of refunds received) disaggregated by individual jurisdictions that are equal to or greater than five percent of total income taxes paid (net of refunds received). Lastly, the amendments in this ASU require an entity to disclose income (or loss) from continuing operations before income tax expense (or benefit) disaggregated between domestic and foreign and income tax expense (or benefit) from continuing operations disaggregated by federal, state, and foreign. This ASU is effective for annual periods beginning after December 15, 2024. Early adoption is permitted. The Company will apply the guidance in ASU 2023-09 for annual periods beginning after December 15, 2024, and will enhance its income tax disclosures in accordance with the requirements. The adoption will be applied prospectively and is not anticipated to have a material impact on the Company’s combined financial statements.
In November 2024, the FASB issued ASU No. 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. ASU 2024-03 requires public companies to disclose, in the notes to the financial statements, specific information about certain costs and expenses at each interim and annual reporting period. This includes disclosing amounts related to employee compensation, depreciation, and intangible asset amortization. In addition, public companies will need to provide qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively. ASU 2024-03 is effective for public business entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. In January 2025, the FASB issued ASU 2025-01, “Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date.” ASU 2025-01 amends the effective date of ASU 2024-03 to clarify that all public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Implementation of ASU 2024-03 may be applied prospectively or retrospectively. Early adoption of ASU 2024-03 is permitted. The Company does not expect the adoption of ASU 2024-03 to have a material impact on its combined financial statements.
In July 2025, the FASB issued ASU No. 2025-05, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. The amendment provides (1) all entities with a practical expedient to assume that current conditions as of the balance sheet date do not change for the remaining life of the assets and (2) entities other than public business entities with an accounting policy election to consider collection activity after the balance sheet date when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under Topic 606. This guidance is effective for annual reporting periods beginning after December 15, 2025 and interim reporting periods within those annual reporting periods. Early adoption is permitted. The Company is currently evaluating the impact of the above new accounting pronouncements or guidance on the combined financial statements.
Except for the above-mentioned pronouncements, there are no new recently issued accounting standards that will have a material impact on the combined balance sheets, statements of operations and cash flows.
Cash and cash equivalents
Accounts receivable, net
Accounts receivable mainly represent amounts
due from customers for provision of customized software solutions and cloud-based SaaS services from subscription which are recorded
net of allowance for the Company’s expected credit losses. The Company generally grant credit terms of
F-9
WELLCHANGE HOLDINGS COMPANY LIMITED
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES (cont.)
Deposits, prepayments and other receivables, net
Deposits, prepayments and other receivables consist of utility and rental deposits paid and cash prepaid to suppliers for computer maintenance service. Deposits paid and cash prepaid to suppliers are classified as either current or non-current based on the terms of the respective agreements. These advances are unsecured and reviewed periodically to determine whether their carrying value has become impaired. As of December 31, 2024 and June 30, 2025, management believes that the Company’s rental deposit is not impaired.
Property and equipment, net
Property and equipment are stated at cost less accumulated depreciation and any impairment losses. Major renewals, betterments, and improvements are capitalized to the asset accounts while replacements, maintenance, and repairs, which do not improve or extend the lives of the respective assets, are expensed to statements of income. At the time when property and equipment are retired or otherwise disposed of, the asset and related accumulated depreciation or amortization accounts are relieved of the applicable amounts. Gains or losses from retirements or sales are credited or charged to statements of income.
The Company depreciates property and equipment using the straight-line method as follows:
| Leasehold improvement | ||
| Office equipment | ||
| Furniture and fixture |
The Company also re-evaluates the periods of depreciation to determine whether subsequent events and circumstances warrant revised estimates of useful lives.
Intangible assets, net
Intangible assets consist of self-developed software capitalized costs and an ERP software system acquired by the Company.
For the self-developed software costs, the Company capitalizes costs related to the development of new software products or the enhancement of existing software products for use in the Company’s product offerings. These costs are capitalized from the point of time that technological feasibility has been established, as evidenced by a working model or detailed working program design to the point of time that the product is available for general release to customers to use and the Company can generate economic benefits. Software development costs are amortized on a straight-line basis over the estimated economic lives of the products, beginning when the product is placed into service.
The ERP software system was acquired from a third party and it was merged with the existing self-developed software as all-in-one MR. CLOUD platform for ERP software solutions in which the Company is offering wide range of applications to meet different customers’ needs on subscription basis.
F-10
WELLCHANGE HOLDINGS COMPANY LIMITED
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES (cont.)
Intangible assets are stated at cost less accumulated amortization and impairment losses, if any. It is amortized on a straight-line basis over the estimated useful life of ten years. The estimation of useful life of intangible assets is based on the economic benefits they can generate for the Company, in which management believes that the ERP software system can generate positive future cash flows in the coming ten years supported by objective evidence.
Impairment for long-lived assets
Long-lived assets, representing property and equipment and intangible assets with finite lives, are reviewed for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying value of an asset may not be recoverable. In evaluating long-lived assets for recoverability, the Company uses its best estimate of future cash flows expected to result from the use of the asset and eventual disposition in accordance with FASB ASC 360-10-15. To the extent that estimated future, undiscounted cash inflows attributable to the asset, less estimated future, undiscounted cash outflows, are less than the carrying amount, an impairment loss is recognized in an amount equal to the difference between the carrying value of such asset and its fair value. Assets to be disposed of and for which there is a committed plan of disposal, whether through sale or abandonment, are reported at the lower of carrying value or fair value less costs to sell. If an impairment is identified, The Company would reduce the carrying amount of the asset to its estimated fair value based on a discounted cash flows approach or, when available and appropriate, to comparable market values. As of December 31, 2024 and June 30, 2025, no impairment of long-lived assets was recognized.
Investment, net
The Company invests in equity securities that have readily determinable fair values.
Equity securities with readily available marketable
trading price consist of investment in mutual fund marketed by a financial institution. The equity securities are not insured against
loss of principal and bearing a fixed interest of HK$
Prepayment for acquisition of intangible assets
Prepayment for acquisition of intangible assets is classified as non-current. The Company prepaid to the supplier for development and design of ERP software systems. The balances will be recognized as an intangible asset upon the completion of development and design of the ERP software systems and merge with the existing self-developed software, MR. CLOUD platform, for the subscription by customers.
Deferred offering costs
The Company follows the requirements of the FASB
ASC 340-10-S99-1 and SEC Staff Accounting Bulletin (“SAB”) Topic 5A — “Expenses of Offering”.
Deferred offering costs consist of underwriting, legal and other expenses incurred through the balance sheet date that are directly related
to the intended initial public offering (“IPO”). Deferred offering costs will be charged to shareholders’ equity netted
against the proceeds upon the completion of the IPO. Should the IPO prove to be unsuccessful, these deferred offering costs, as well
as additional expenses to be incurred, will be charged to statements of income. As of December 31, 2024 and June 30, 2025, the deferred
offering costs were US$
F-11
WELLCHANGE HOLDINGS COMPANY LIMITED
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES (cont.)
Fair value measurement
The accounting standard regarding fair value of financial instruments and related fair value measurements defines financial instruments and requires disclosure of the fair value of financial instruments held by the Company.
The accounting standard defines fair value, establishes a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosure requirements for fair value measures. The three levels are defined as follow:
| Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. | |
| Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liabilities, either directly or indirectly, for substantially the full term of the financial instruments. | |
| Level 3 inputs to the valuation methodology are unobservable and significant to the fair value. |
Unless otherwise disclosed, the fair value of Company’s financial instruments including cash and cash equivalents, accounts receivable, rental deposit, amounts due from a director, amounts due to related parties, bank borrowings, other payables and lease liabilities approximate their recorded values due to their short-term maturities.
Accruals and other payables
Accruals and other payables primarily include accrued staff costs, accrued professional fee, payables for rental of server for the software data storage and other accrual and payable for the operation of the ordinary course of business.
Contract liabilities
Contract liabilities are recorded when consideration is received from a customer prior to transferring the services to the customer or other conditions under the terms of a service contract. These payments are non-refundable and are recognized as revenue when our performance obligation is satisfied. As of December 31, 2024 and June 30, 2025, the Company recorded contract liabilities of US$315,411 and US$190,059, respectively, which was presented as contract liabilities on the accompanying unaudited condensed consolidated balance sheets.
Bank borrowings
Borrowings are initially recognized at fair value, net of upfront fees incurred. Borrowings are subsequently measured at amortized cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognized in statements of income over the period of the borrowings using the effective interest method. All bank borrowings were classified as short term due to repayment on demand clauses attached in the borrowings.
Lease
ASC 842 supersedes the lease requirements in ASC 840 “Leases”, and generally requires lessees to recognize operating and finance lease liabilities and corresponding right-of-use assets on the balance sheet and to provide enhanced disclosures surrounding the amount, timing and uncertainty of cash flows arising from leasing arrangements. All leases in the Group are accounted for as operating leases.
We determine if an arrangement is a lease at inception. On our balance sheet, our corporate office lease is included in operating lease right-of-use (ROU) assets, current portion of operating lease liability and operating lease liability, net of current portion.
ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. For leases that do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. We use the implicit rate when readily determinable. Lease expense for lease payments is recognized on a straight-line basis over the lease term.
F-12
WELLCHANGE HOLDINGS COMPANY LIMITED
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES (cont.)
Significant judgment may be required when determining whether a contract contains a lease, the length of the lease term, the allocation of the consideration in a contract between lease and non-lease components, and the determination of the discount rate included in our office lease. We review the underlying objective of each contract, the terms of the contract, and consider our current and future business conditions when making these judgments.
Any lease with a term of 12 months or less is considered short-term. As permitted by ASC 842, short-term leases are excluded from the ROU assets and lease liabilities on the unaudited condensed consolidated balance sheets. Consistent with all other operating leases, short-term lease expense is recorded on a straight-line basis over the lease term.
The Financial Accounting Standards Board (“FASB”) issued a Q&A in March 2020 that focused on the application of lease guidance in ASC 842 for lease concessions related to the effects of COVID-19. The FASB staff has said that entities can elect to not evaluate whether concessions granted by lessors related to COVID-19 are lease modifications. Entities that make this election can then apply the lease modification guidance in ASC 842 or account for the concession as if it were contemplated as part of the existing contract. The Company has elected to not treat the concessions as lease modifications and will instead account for the lease concessions as if they were contemplated as part of the existing leases. The Company has recorded negative variable lease expense and adjusted lease liabilities at the point in which the rent concession has become accruable.
The Company evaluates the impairment of its right-of-use assets consistent with the approach applied for its other long-lived assets. The Company reviews the recoverability of its long-lived assets when events or changes in circumstances occur that indicate that the carrying value of the asset may not be recoverable. The assessment of possible impairment is based on its ability to recover the carrying value of the asset from the expected undiscounted future pre-tax cash flows of the related operations. The Company has elected to include the carrying amount of finance and operating lease liabilities in any tested asset group and include the associated lease payments in the undiscounted future pre-tax cash flows. For the six months ended June 30, 2024 and 2025, the Group did not have any impairment loss against its operating lease right-of-use assets.
Related parties
The Company adopted ASC Topic 850, Related Party Disclosures, for the identification of related parties and disclosure of related party transactions.
Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control or significant influence of the same party, such as a family member or relative, shareholder, or a related corporation.
The details of related party transaction during the six months ended June 30, 2024 and 2025 and balances as at December 31, 2024 and June 30, 2025 are set out in the Note 15.
Revenue recognition
The Company recognizes revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers, and subsequently issued additional related Accounting Standards Updates (collectively, “ASC 606”). The Company derives revenue principally from the provision of customized software solutions based on customers’ specifications, white-labelled software design and development services and MR. CLOUD SaaS platform subscription services to SMBs customers. The Company enters into agreements with customers that create enforceable rights and obligations and for which it is probable that the Company will collect the consideration to which it will be entitled as services transfer to the customer. It is customary practice for the Company to have written agreements with its customers and revenue on oral or implied arrangements is generally not recognized. The Company recognizes revenue based on the consideration specified in the applicable agreement.
F-13
WELLCHANGE HOLDINGS COMPANY LIMITED
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES (cont.)
Revenue from contracts with customers is recognized using the following five steps:
| 1. | identify the contract(s) with a customer; |
| 2. | identify the performance obligations in the contract; |
| 3. | determine the transaction price; |
| 4. | allocate the transaction price to the performance obligations in the contract; and |
| 5. | recognize revenue when (or as) the entity satisfies a performance obligation. |
The Company has elected to apply the practical expedient in paragraph ASC 606-10-50-14 and does not disclose information about remaining performance obligations that have original expected durations of one year or less.
The Company elected a practical expedient that it does not adjust the promised amount of consideration for the effects of a significant financing component if the Company expects that, upon the inception of revenue contracts, the period between when the Company transfers its promised services or deliverables to its clients and when the clients pay for those services or deliverables will be one year or less.
As a practical expedient, the Company elected to expense the incremental costs of obtaining a contract when incurred if the amortization period of the asset that the Company otherwise would have recognized is one year or less.
Generally
The service offerings by the Company mainly comprise the following:
| (a) | Customized software solutions |
The Company is engaged to provide a wide range of customized IT software including desktop software development service, web and mobile application development services. The contract is typically fixed priced with no variable consideration and does not provide any post contract client support or upgrades. The Company’s contracts are generally non-cancellable and non-refundable in the event of cancellation. The Company designs software and system based on clients’ specific needs which require the Company to perform services including design, development, and integration. These services also require significant customization. A series of promises are identified in a contract. But these promises are interrelated and not distinct. These promises are inputs used to complete the service. The customers cannot benefit from any standalone promise. Thus only one performance obligation with standard quality guarantee is identified in a contract. The performance obligation is satisfied at a point of time and recognized as revenue upon the completion of services to the customers, usually at the time when the result of services is tested and accepted by the customers. The duration of the development period is short, usually less than one year. The contracts contain negotiated billing terms which generally include multiple payment phases throughout the contract term and a portion of contract amount usually is billed upon the completion of the related projects. Contract liabilities will be recognized when payment was received and charged to statements of operations once customized software delivered.
Additionally, the Company provides product warranty on customized IT software for a period of 90 days from delivery of such software. The warranty is not a separate performance obligation because the nature of the warranty is to provide assurance that the software will function as expected and comply with agreed-upon specifications. The Company has not experienced material warranty costs and, therefore, does not believe an accrual for these costs is necessary. There is no maintenance attached in the contract.
The Company provides technical support service to the customer subsequent to the transfer of customized IT software for a period of time, typically 90 days from delivery of such software. The Company provides the technical support services at no additional consideration, the transaction price of the contract is allocated to customized IT software and technical support service by reference to their standalone price estimated using a residual approach. The standalone price of technical support services is considered to be minimal as the Company has not had to provide significant technical support services to date for our platform, no transaction price is allocated to technical support services for the six months ended June 30, 2024 and 2025.
F-14
WELLCHANGE HOLDINGS COMPANY LIMITED
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES (cont.)
| (b) | White label software |
The Company provides self-developed software as “white label” products to corporate customers. White label software is software that is sold unbranded, that their own branding can be added and then the software can be resold by accessing to the software as if the corporate customers developed it. Similar to customized software solutions, the Company is engaged by the customer to provide white-label software and the customer is able to customize the white label software/application and integrate custom features into the default white label applications and software per their needs. Revenue from white label software is recognized when the relevant services have been rendered. The contract is typically fixed priced with no variable consideration and does not provide any post contract client support or upgrades. The Company’s contracts are generally non-cancellable and non-refundable in the event of cancellation. A series of promises are identified in a contract. But these promises are interrelated and not distinct. These promises are inputs used to complete the service. The customers cannot benefit from any standalone promise. Thus only one performance obligation with standard quality guarantee is identified in a contract. The performance obligation is satisfied at a point of time and recognized as revenue upon the completion of services to the customers, usually at the time when the result of services is tested and accepted the white label software by the customer. The duration of the development period is short, usually less than one year. The contracts contain negotiated billing terms which generally include multiple payment phases throughout the contract term and a portion of contract amount usually is billed upon the completion of the related projects. Contract liabilities will be recognized when payment was received and charged to statements of operations once white label product delivered.
Additionally, the Company provides product warranty on white label services for a period of 90 days from delivery of such software. The warranty is not a separate performance obligation because the nature of the warranty is to provide assurance that the software will function as expected and comply with agreed-upon specifications. The Company has not experienced material warranty costs and, therefore, does not believe an accrual for these costs is necessary. There is no maintenance attached in the contract.
The Company provides technical support service to the customer subsequent to the transfer of white label software for a period of time, typically 90 days from delivery of such software. The Company provides the technical support services at no additional consideration, the transaction price of the contract is allocated to white label software and technical support service by reference to their standalone price estimated using a residual approach. The standalone price of technical support services is considered to be minimal as the Company has not had to provide significant technical support services to date for our platform, no transaction price is allocated to technical support services for the six months ended June 30, 2024 and 2025.
| (c) | Subscription services |
The Company provides SaaS digital business management software services through subscription which includes the right to use the MR. CLOUD ERP software and continuous technical support services such as upgrading applications and fixing the minor bugs to SMBs. MR. CLOUD is a cloud-based software delivery model to develop, deliver, and maintain a variety of ERP software and applications modules in a single platform, including human resources management, project and file management, email and marketing automation, financial and accounting, quotation and invoice management, inventory management, group messenger and customer relationship management, merging all of customers’ business processes on a single platform instead of having a different software and applications for each function of its business. Customer who subscribes to the service plan logs in to their accounts to use the subscribed service over the internet or mobile on a clouded basis.
F-15
WELLCHANGE HOLDINGS COMPANY LIMITED
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES (cont.)
The Company enters into a distinct and fixed-fee contract with its customers as a principal for the provision of SaaS digital business management software services on subscription basis. Pursuant to the contracts, the Company requires to provide a series of digital business management applications online either being accessed on web or mobile over contract terms beginning on the commencement date of each contract, which is the date its service is made available to customers. Billings to the customers are generally on a monthly or quarterly basis over the contract term, which is typically one year. There is no variable consideration in the transaction price. The Company’s contracts are generally non-cancellable and non-refundable in the event of cancellation. The subscription services contracts typically include a single performance obligation. There will be an update or upgrade of the MR. CLOUD ERP system when necessary and which can be utilized by existing customers automatically for the new functions during their contract period. There is no additional consideration for the update or upgrade of the software and the additional costs for the updates and upgrades were charged to statements of operations directly in the period incurred. The transaction price of the contract is allocated to the remaining contract period from the date of the upgraded software available for customers to use. No significant costs were incurred to update or upgrade the software during the six months ended June 30, 2024 and 2025. There is no maintenance services attached in the contract.
The revenue from subscription services is recognized over the contract term as clients receive and consume benefits of such services as provided. Accordingly, the Company recognizes revenues from subscription services on a monthly basis when it satisfies its performance obligations throughout the contract terms.
Cost of revenues
Cost of revenues consists of depreciation of property and equipment, amortization of intangible assets (ERP software of MR. CLOUD platform), subcontracting costs for customized software solution (if any), staff cost and rental of server. Staff costs represent the salaries and wages of engineers and IT staff incurred in connection with the provision of customized software solutions, white label software design and development services and MR. CLOUD SaaS platform subscription services. These costs are charged to the unaudited condensed consolidated statements of income and comprehensive income as incurred.
Operating expenses
Operating expenses primarily consist of administrative and selling personnel-related compensation expenses, including salaries and related social insurance costs for operations, depreciation, legal and professional services fees, rental and other office expenses related to general operations.
Other income
Interest income is mainly generated from savings and time deposits and is recognized on an accrual basis using the effective interest method.
Government subsidies are recognized as income in other income or as deferred government subsidy before conditions attached to the government subsidy are met and charged to statements of income as other income once conditions are fulfilled.
In 2022, the Company successfully applied for
funding support from the Employment Support Scheme (“ESS”) under the Anti-epidemic Fund, set up by the Hong Kong Government,
to provide financial support to enterprises to retain their employees who may otherwise be made redundant. The wage subsidies provided
to eligible employers under ESS are disbursed in and was used for paying wages of employees from May to July 2022. Employers participating
in ESS were required to undertake and warrant that they would: (i) not implement redundancies during the subsidy period; and (ii) spend
all the wage subsidies on paying wages to their employees. If an employer fails to use all the subsidies received to pay the wages of
his/her employees, the Hong Kong Government will claw back the unspent balance of the subsidy. If the total number of employees on
the payroll in any one month of the subsidy period is less than the “committed headcount of paid employees”, the employer
will have to pay a penalty to the Hong Kong Government. For the six months ended June 30, 2024 and 2025, the Company recognized
government subsidies of approximately US$
F-16
WELLCHANGE HOLDINGS COMPANY LIMITED
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES (cont.)
In January 2022, the Company received US$
Employee benefit plan
The principal employee’s retirement scheme
is under the Hong Kong Mandatory Provident Fund Schemes Ordinance. Contributions are made by both the employer and the employee at
the rate of
During the six months ended June 30, 2024
and 2025, the total amount charged to the unaudited condensed consolidated statements of income in respect of the Company’s costs
incurred on the Mandatory Provident Fund Scheme were approximately US$
Income taxes
The Company accounts for income taxes pursuant to ASC Topic 740, Income Taxes (“ASC 740”). Income taxes are provided on an asset and liability approach for financial accounting and reporting of income taxes. Any tax paid by subsidiaries during the year is recorded. Current tax is based on the profit or loss from ordinary activities adjusted for items that are non-assessable or disallowable for income tax purpose and is calculated using tax rates that have been enacted or substantively enacted at the balance sheet date. ASC 740 also requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statements and the tax basis of assets and liabilities, and the expected future tax benefit to be derived from tax losses and tax credit carry-forwards. ASC 740 additionally requires the establishment of a valuation allowance to reflect the likelihood of realization of deferred tax assets. Realization of deferred tax assets, including those related to the U.S. net operating loss carry-forwards, is dependent upon future earnings, if any, of which the timing and amount are uncertain.
The Company adopted ASC 740-10-05, Income Tax, which provides guidance for recognizing and measuring uncertain tax positions, and prescribes a threshold condition that a tax position must meet for any of the benefits of the uncertain tax position to be recognized in the financial statements. It also provides accounting guidance on derecognizing, classification and disclosure of these uncertain tax positions.
The Company’s policy on classification of all interest and penalties related to unrecognized income tax positions, if any, is to present them as a component of income tax expense.
Comprehensive income
The Company presents comprehensive income in accordance with ASC Topic 220, Comprehensive Income, (“ASC 220”). ASC 220 states that all items that are required to be recognized under accounting standards as components of comprehensive income be reported in the unaudited condensed consolidated financial statements. The components of comprehensive income include the net income and foreign currency translation for the periods.
F-17
WELLCHANGE HOLDINGS COMPANY LIMITED
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES (cont.)
Commitments and contingencies
In the normal course of business, the Company is subject to contingencies, including legal proceedings and claims arising out of the business that relate to a wide range of matters, such as government investigations and tax matters. The Company recognizes a liability for such contingency if it determines it is probable that a loss has occurred, and a reasonable estimate of the loss can be made. The Company may consider many factors in making these assessments including historical and the specific facts and circumstances of each matter.
Earnings per share
The Company computes earnings per share, or EPS, in accordance with ASC Topic 260, Earnings per Share (“ASC 260”). ASC 260 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 year. Diluted EPS presents the dilutive effect on a per share basis of the potential ordinary shares (e.g., convertible securities, options and warrants) as if they had been converted at the beginning of the years presented, or issuance date, if later. Potential 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. For the six months ended June 30, 2024 and 2025, there were no dilutive shares.
Recently issued accounting pronouncements
From time to time, new accounting pronouncements are issued by the Financial Accounting Standard Board (“FASB”) or other standard setting bodies and adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on its financial position or results of operations upon adoption.
In March 2024, the FASB issued ASU No. 2024-01, Leases (Topic 842): Common Control Arrangements (“ASU 2024-01”) that is intended to improve the guidance for applying Topic 842 to arrangements between entities under common control. This ASU requires all entities (that is, including public companies) to amortize leasehold improvements associated with common control leases over the useful life to the common control group. The standard will be effective for fiscal years beginning after December 15, 2024, including interim periods within those fiscal years. Early adoption is permitted for both interim and annual financial statements that have not yet been made available for issuance. If an entity adopts the amendments in an interim period, it must adopt them as of the beginning of the fiscal year that includes that interim period. The Company is currently evaluating the potential impact of ASU 2024-01 on its unaudited condensed consolidated financial statements.
In November 2024, the FASB issued ASU No. 2024-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2024-07”), which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The disclosures requirements included in ASU 2024-07 are required for all public entities, including those with a single reportable segment. ASU 2024-07 is effective for annual periods beginning after December 15, 2025, on a retrospective basis, and early adoption is permitted. The Company is currently evaluating the potential impact of ASU 2024-07 on its unaudited condensed consolidated financial statements.
In December 2024, the FASB issued ASU 2024-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires disclosure of additional income tax information, primarily related to the rate reconciliation and income taxes paid. Annual disclosure requirements will be effective for the fourth quarter of 2025, with early adoption permitted. The Company is currently evaluating the impact of this ASU on our disclosures.
In March 2025, the FASB issued ASU No. 2025-02, Codification Improvements-Amendments to Remove References to the Concepts Statements (“ASU 2025-02”). The amendments in this Update affect a variety of Topics in the Codification. The amendments apply to all reporting entities within the scope of the affected accounting guidance. This update contains amendments to the Codification that remove references to various Concepts Statements. In most instances, the references are extraneous and not required to understand or apply the guidance. In other instances, the references were used in prior statements to provide guidance in certain topical areas. ASU 2025-02 is effective for public business entities for fiscal years beginning after December 15, 2025. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2025. Early adoption is permitted for both interim and annual financial statements that have not yet been issued or made available for issuance. The Company is currently evaluating the potential impact of the adoption of ASU 2025-02 on its unaudited condensed consolidated financial statements.
In November 2025, the FASB issued ASU 2025-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires additional disclosure about specific expense categories included in the income statement. Annual disclosure requirements will be effective for the fourth quarter of 2027, and quarterly disclosure requirements will be effective in the first quarter of 2028, with early adoption permitted. The Company is currently evaluating the impact of this ASU on the disclosures.
Except for the above-mentioned pronouncements, there are no new recently issued accounting standards that will have a material impact on the unaudited condensed consolidated balance sheets, statements of operations and comprehensive loss and cash flows.
F-18
WELLCHANGE HOLDINGS COMPANY LIMITED
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES (cont.)
Accounting Standards Update ASU No. 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848, that extends the sunset (or expiration) date of ASC Topic 848 to December 31, 2025. This gives reporting entities two additional years to apply the accounting relief provided under ASC Topic 848 for matters related to reference rate reform. The Company does not expect the cessation of LIBOR to have a material impact on the financial position, results of operations, cash flows or disclosures.
The Company’s management reviewed all recently issued ASU’s not yet adopted by the Company and does not believe the future adoptions of any such ASU’s may be expected to cause a material impact on the Company’s unaudited condensed consolidated financial condition or the results of its operations.
Except as mentioned above, the Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the unaudited condensed consolidated balance sheets, statements of income and comprehensive income and statements of cash flows.
3. SEGMENT INFORMATION
ASC Topic 280, Segment Reporting, establishes
standards for reporting information about operating segments on a basis consistent with the Company’s internal organizational structure
as well as information about geographical areas, business segments and major customers in financial statements for details on the Company’s
business segments. The Company uses the “management approach” in determining reportable operating segments. The management
approach considers the internal organization and reporting used by the Company’s chief operating decision maker for making operating
decisions and assessing performance as the source for determining the Company’s reportable segments. Management, including the
chief operating decision maker, reviews operation results by the revenue of different products or services. Based on management’s
assessment, the Company has determined that it has only
F-19
WELLCHANGE HOLDINGS COMPANY LIMITED
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
4. ACCOUNTS RECEIVABLE, NET
Accounts receivable, net is comprised of the following:
| As of | ||||||||
December 31, 2024 | June 30, 2025 | |||||||
| US$ | US$ | |||||||
| Accounts receivable | ||||||||
| Allowance for expected credit losses | ( | ) | ( | ) | ||||
| Accounts receivable, net | ||||||||
Movements of allowance for expected credit losses were as follows:
| As of | ||||||||
December 31, 2024 | June 30, 2025 | |||||||
| US$ | US$ | |||||||
| Balance, beginning of the year/period | ||||||||
| Addition | ||||||||
| Exchange realignment | ( | ) | ||||||
| Balance, end of year/period | ||||||||
Accounts receivable, net as of December 31, 2024 and June 30, 2025 are aged within two years.
5. PROPERTY AND EQUIPMENT, NET
Property and equipment, net consists of the following:
| As of | ||||||||
December 31, 2024 | June 30, 2025 | |||||||
| US$ | US$ | |||||||
| Leasehold improvement | ||||||||
| Office equipment | ||||||||
| Furniture and fixtures | ||||||||
| Total | ||||||||
| Less: accumulated depreciation | ( | ) | ( | ) | ||||
| Net carrying value | ||||||||
Depreciation expenses recognized for six months
ended June 30, 2024 and 2025 were US$
6. INTANGIBLE ASSETS, NET
Intangible assets, net consist of the following:
| As of | ||||||||
December 31, 2024 | June 30, 2025 | |||||||
| US$ | US$ | |||||||
| Self-developed software | ||||||||
| Acquired ERP system | ||||||||
| Total | ||||||||
| Less: accumulated amortization | ( | ) | ( | ) | ||||
| Intangible assets, net | ||||||||
Amortization expenses recognized for the six months
ended June 30, 2024 and 2025 were US$
F-20
WELLCHANGE HOLDINGS COMPANY LIMITED
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
7. INVESTMENT, NET
Investment, net consists of the following:
| As of | ||||||||
December 31, 2024 | June 30, 2025 | |||||||
| US$ | US$ | |||||||
| Marketable equity securities | ||||||||
Investments in Marketable Equity Securities
Equity securities with readily available marketable
trading price consist of investment in mutual fund marketed by a financial institution. The equity securities are not insured against
loss of principal and bearing a fixed interest of HK$
For the six months ended June 30, 2024 and
2025, the Company had unrealized investment gain of US$
8. ACCRUALS AND OTHER PAYABLES
Accruals and other payables consist of the following:
| As of | ||||||||
| December 31, 2024 | June 30, 2025 | |||||||
| US$ | US$ | |||||||
| Accrued staff costs | ||||||||
| Accrued professional fees | ||||||||
| Payables for rental of server | ||||||||
| Others | ||||||||
| Total | ||||||||
9. CONTRACT LIABILITIES
The movement of contract liabilities consist of the following:
| As of | ||||||||
December 31, 2024 | June 30, 2025 | |||||||
| US$ | US$ | |||||||
| Balance at beginning of the year/period | ||||||||
| Additions | ||||||||
| Recognized as revenues during the year/period | ( | ) | ( | ) | ||||
| Exchange realignment | ( | ) | ||||||
| Balance at end of year/period | ||||||||
F-21
WELLCHANGE HOLDINGS COMPANY LIMITED
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
10. BANK BORROWINGS
Outstanding balances of bank borrowings as of December 31, 2024 and June 30, 2025 consist of the following:
| As of | ||||||||
December 31, 2024 | June 30, 2025 | |||||||
| US$ | US$ | |||||||
| Bank borrowings | ||||||||
| Guaranteed(i) | ||||||||
| Short-term bank borrowings(ii),(iii) | ||||||||
| (i) |
| (ii) |
| (iii) |
Bank borrowings as at December 31, 2024 and June 30, 2025 are as follows:
| Balance as at | ||||||||||||||||
| Lender | Type | Maturity date | Currency | Interest rate | December 31, 2024 | June 30, 2025 | ||||||||||
| US$ | US$ | |||||||||||||||
| The Hongkong and Shanghai Banking Corporation Limited | Fixed rate at | |||||||||||||||
As of June 30, 2025, the contractual repayment schedule is as follows:
| US$ | ||||
| Year ending June 30, 2026 | ||||
| Year ending June 30, 2027 | ||||
| Year ending June 30, 2028 | ||||
| Year ending June 30, 2029 | ||||
| Year ending June 30, 2030 | ||||
| Total bank borrowings | ||||
F-22
WELLCHANGE HOLDINGS COMPANY LIMITED
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
11. RIGHT-OF-USE ASSETS AND OPERATING LEASE LIABILITIES
The Company is a lessee of non-cancellable operating
leases for a corporate office in Hong Kong with a lease term of years.
| As of | ||||||||
December 31, 2024 | June 30, 2025 | |||||||
| US$ | US$ | |||||||
| Right-of-use assets | ||||||||
| As of | ||||||||
December 31, 2024 | June 30, 2025 | |||||||
| US$ | US$ | |||||||
| Operating lease liabilities | ||||||||
| Current portion | ||||||||
| Non-current portion | ||||||||
| Total | ||||||||
During six months ended June 30, 2024 and 2025,
the Company incurred lease expenses of approximately US$
Other supplemental information about the Company’s operating lease as of December 31, 2024 and June 30, 2025:
| As of | ||||||||
December 31, 2024 | June 30, 2025 | |||||||
| Operating leases: | ||||||||
| Weighted average remaining lease term (years) | ||||||||
| Weighted average discount rate | % | % | ||||||
The maturity analysis of the Company’s undiscounted non-cancellable operating lease obligations as of June 30, 2025 is as follows:
| Operating leases | ||||
| US$ | ||||
| Year ending June 30, 2026 | ||||
| Year ending June 30, 2027 | ||||
| Total undiscounted lease obligations | ||||
| Less: imputed interest | ( | ) | ||
| Lease liabilities recognized in the unaudited condensed consolidated balance sheet | ||||
F-23
WELLCHANGE HOLDINGS COMPANY LIMITED
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
12. Shareholders’ equity
Ordinary shares
The Company was incorporated as an exempted company
with limited liability under the laws of the Cayman Islands on July 13, 2023. The authorized share capital of the Company was US$
On January 26, 2024, the Company effected
a
On October 3, 2024, the Company closed its initial
public offering of
Subsequent to the initial public offering, on
October 15, 2025, the representative of the underwriters in the Company’s initial public offering, Dominari Securities LLC, fully
exercised its over-allotment option to purchase an additional
On October 17, 2024, the Company issued Dominari
Securities LLC warrants to purchase up to
On January 15, 2025, the Company entered into
Securities Purchase Agreements with several investors, pursuant to which the Company agreed to issue and sell, in a best effort offering,
a total of
On June 6, 2025, the Company registered
As of the date of this report, we had
F-24
WELLCHANGE HOLDINGS COMPANY LIMITED
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
12. Shareholders’ equity (cont.)
Share award reserve
Share award reserve is recognized at the grant date, corresponding to the fair value of the awards granted. This reserve represents the cumulative amount recognized as expense over the vesting period
13. DISAGGREGATED REVENUES
The following table shows disaggregated revenues by major categories for the six months ended June 30, 2024 and 2025, respectively:
| Six months ended June 30, | ||||||||||||||||
| 2024 | 2025 | |||||||||||||||
| US$ | % | US$ | % | |||||||||||||
| Customized software solutions | % | % | ||||||||||||||
| White label software | % | % | ||||||||||||||
| Subscription services | % | % | ||||||||||||||
| Total | % | % | ||||||||||||||
The following table shows disaggregated cost of revenues by major categories for the six months ended June 30, 2024 and 2025, respectively:
| Six months ended June 30, | ||||||||||||||||
| 2024 | 2025 | |||||||||||||||
| US$ | % | US$ | % | |||||||||||||
| Customized software solutions | % | % | ||||||||||||||
| White label software | % | % | ||||||||||||||
| Subscription services | % | % | ||||||||||||||
| Total | % | % | ||||||||||||||
The following table shows disaggregated cost of revenues by nature for the six months ended June 30, 2024 and 2025, respectively:
| Six months ended June 30, | ||||||||||||||||
| 2024 | 2025 | |||||||||||||||
| US$ | % | US$ | % | |||||||||||||
| Staff costs and employee benefits | % | % | ||||||||||||||
| Amortization of intangible assets | % | % | ||||||||||||||
| Subcontracting costs | % | % | ||||||||||||||
| Depreciation | % | % | ||||||||||||||
| Total | % | % | ||||||||||||||
F-25
WELLCHANGE HOLDINGS COMPANY LIMITED
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
13. DISAGGREGATED REVENUES (cont.)
The following table sets forth a breakdown of gross profit and gross profit margin for the six months ended June 30, 2024 and 2025, respectively:
| Six months ended June 30, | ||||||||||||||||||||||||||||||||
| 2024 | 2025 | |||||||||||||||||||||||||||||||
| Category | Revenues | Cost of revenues | Gross profit | Gross profit margin | Revenues | Cost of revenues | Gross profit | Gross profit margin | ||||||||||||||||||||||||
| US$ | US$ | US$ | % | US$ | US$ | US$ | % | |||||||||||||||||||||||||
| Customized software solutions | % | % | ||||||||||||||||||||||||||||||
| White label software | % | % | ||||||||||||||||||||||||||||||
| Subscription services | % | % | ||||||||||||||||||||||||||||||
| Total | % | % | ||||||||||||||||||||||||||||||
Revenues disaggregated by timing of revenue recognition for the six months ended June 30, 2024 and 2025 are disclosed in the table below:
| Six months ended June 30, | ||||||||
| 2024 | 2025 | |||||||
| US$ | US$ | |||||||
| Point in time | ||||||||
| – Customized software solutions | ||||||||
| – White label software | ||||||||
| Over time | ||||||||
| – Subscription services | ||||||||
| Total | ||||||||
14. TAXES
Income tax
Cayman Islands
The Cayman Islands currently levy no taxes on individuals or corporations based upon profits, income, gains or appreciations and there is no taxation in the nature of inheritance tax or estate duty. There are no other taxes likely to be material to the Company levied by the Government of the Cayman Islands save for certain stamp duties which may be applicable, from time to time, on certain instruments.
BVI
Victory Hero is incorporated in the BVI and is not subject to tax on income or capital gains under current BVI law. In addition, upon payments of dividends by these entities to their shareholders, no BVI withholding tax will be imposed.
F-26
WELLCHANGE HOLDINGS COMPANY LIMITED
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
14. TAXES (cont.)
Hong Kong
Wching HK is incorporated in Hong Kong
and is 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. The applicable tax rate is
For the six months ended June 30, 2024 and 2025, the Company generated substantially all of its taxable income in the Hong Kong. The tax expenses recorded in the Company’s result of operations are almost entirely attributable to income earned in the Hong Kong. Should the Company’s operations expand or change in the future, where the Company generates taxable income in other jurisdictions, the Company’s effective tax rates may substantially change.
Taxation in the statements of operations represents:
| Six months ended June 30, | ||||||||
| 2024 | 2025 | |||||||
| US$ | US$ | |||||||
| Hong Kong profits tax provision for the year: | ||||||||
| Current | ||||||||
| Deferred | ( | ) | ||||||
| Total income tax expense | ( | ) | ||||||
A reconciliation of the provision for income taxes determined at the Hong Kong statutory income tax rate to the Company’s effective income tax rate is as follows:
| Six months ended June 30, | ||||||||||||||||
| 2024 | 2025 | |||||||||||||||
| US$ | % | US$ | % | |||||||||||||
| Net income (loss) before income tax | ( | ) | ||||||||||||||
| Tax at Hong Kong statutory tax rate of 16.5% | % | ( | ) | % | ||||||||||||
| Reconciling items: | ||||||||||||||||
| Tax effect of temporary difference | % | |||||||||||||||
| Tax effect of non-taxable income | ( | ) | ( | )% | ( | ) | % | |||||||||
| Tax effect of non-deductible expenses | % | ( | )% | |||||||||||||
| Income tax expense (credit) | % | ( | ) | % | ||||||||||||
F-27
WELLCHANGE HOLDINGS COMPANY LIMITED
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
14. TAXES (cont.)
Deferred tax
The following table sets forth the significant components of the deferred tax liabilities and assets of the Company:
| As of | ||||||||
December 31, 2024 | June 30, 2025 | |||||||
| US$ | US$ | |||||||
| Deferred tax liabilities: | ||||||||
| Accelerated depreciation and amortization | ||||||||
| Opening balances | ||||||||
| Addition | ||||||||
| Exchange realignment | ( | ) | ||||||
| Ending balances | ||||||||
| Deferred tax assets: | ||||||||
| Net operating loss | ||||||||
| Opening balances | ||||||||
| Addition | ||||||||
| Exchange realignment | ( | ) | ||||||
| Ending balances | ||||||||
| Less: valuation allowance | ||||||||
| Deferred tax assets, net | ||||||||
The Company did not recognize any valuation allowance against its deferred tax asset as management believes the Company will be able to fully utilize the assets in the foreseeable future.
15. RELATED PARTY BALANCES AND TRANSACTIONS
Relationships with related parties
| Name | Relationship | |
| Mr. Shek Kin Pong |
Amount due from/(to) a director consist of the following:
| As of | ||||||||||
| Name | Nature | December 31, 2024 | June 30, 2025 | |||||||
| US$ | US$ | |||||||||
| Mr. Shek Kin Pong | ( | ) | ||||||||
| ( | ) | |||||||||
The balance with related parties are unsecured, interest free with no specific repayment terms. The amounts due from (to) related parties are non-trade nature.
F-28
WELLCHANGE HOLDINGS COMPANY LIMITED
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
15. RELATED PARTY BALANCES AND TRANSACTIONS (cont.)
The Company does not have significant related party transactions incurred during the six months ended June 30, 2024 and 2025 except for the following:
Remuneration to senior management for the six months ended June 30, 2024 and 2025 were:
| Six months ended June 30, | ||||||||
| 2024 | 2025 | |||||||
| US$ | US$ | |||||||
| Salaries and other short term employee benefits | ||||||||
| Payments to defined contribution pension schemes | ||||||||
| Share-based payment | ||||||||
| Total | ||||||||
16. RISKS AND UNCERTAINTIES
Credit risk
The Company’s assets that are potentially subject to a significant concentration of credit risk primarily consist of bank balances and accounts receivable.
Bank balances
The Company believes that there is no
significant credit risk associated with cash in Hong Kong, which were held by reputable financial institutions in the
jurisdiction where the Company and its subsidiaries are located. The Hong Kong Deposit Protection Board pays compensation up to
a limit of approximately US$
Accounts receivable
The Company has designed credit policies with an objective to minimize their exposure to credit risk. The Company’s accounts receivable are short term in nature and the associated risk is minimal. The Company conducts credit evaluations on customers and generally do not require collateral or other securities from such customers. The Company periodically evaluates the creditworthiness of the existing customers in determining an allowance for expected credit losses primarily based upon the aging of the receivable, the client’s payment history, its current creditworthiness, current economic trends and future expectations and customer specific quantitative and qualitative factors that may affect our customers’ ability to pay. Since all accounts receivable as at December 31, 2024 and June 30, 2025 are aged within two years, minimum credit risk was noted for accounts receivable.
F-29
WELLCHANGE HOLDINGS COMPANY LIMITED
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
16. RISKS AND UNCERTAINTIES (cont.)
Customer concentration risk
For the six months ended June 30, 2024, five
customers accounted for
As of December 31, 2024, five customers accounted
for
Interest rate risk
The Company is exposed to cash flow interest rate risk through the changes in interest rates related mainly to the Company’s bank borrowings and cash and cash equivalents. The Company currently does not have any interest rate hedging policy in relation to fair value interest rate risk and cash flow interest rate risk. The directors monitor the Company’s exposures on an ongoing basis and will consider hedging the interest rate should the need arises.
Foreign currency risk
The reporting currency of the Company is US$. To date the majority of the revenues and costs are denominated in HK$ and a significant portion of the assets and liabilities are denominated in HK$. There was no significant exposure to foreign exchange rate fluctuations and the Company has not maintained any hedging policy against foreign currency risk. The management will consider hedging significant currency exposure should the need arise.
Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation.
Typically, the Company ensures that it has sufficient cash on demand to meet expected operational expenses for a period of twelve months, including through operations and financial support from our Controlling Shareholder, financial institutions, and investors. We are continuing to focus on improving operational efficiency and cost reductions and enhancing efficiency, as well as servicing of financial obligations: this excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural disasters. Our ability to continue as a going concern is dependent upon obtaining the necessary financing or negotiating the terms of the existing short-term liabilities to meet our current and future liquidity needs.
F-30
WELLCHANGE HOLDINGS COMPANY LIMITED
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
17. COMMITMENTS AND CONTINGENCIES
Lease Commitments
We entered into operating leases for a corporate office in Hong Kong for a term of years. Our commitments for minimum lease payment under these operating lease obligations as of December 31, 2024 and June 30, 2025 are listed in section “Note 11 — RIGHT-OF-USE ASSETS AND OPERATING LEASE LIABILITIES”.
Litigation
From time to time, we are involved in claims and legal proceedings that arise in the ordinary course of business. Based on currently available information, we do not believe that the ultimate outcome of any unresolved matters, individually and in the aggregate, is reasonably possible to have a material adverse effect on our financial position, results of operations or cash flows. However, litigation is subject to inherent uncertainties and our view of these matters may change in the future. We record a liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. We review the need for any such liabilities on a regular basis.
18. SUBSEQUENT EVENTS
The Company evaluated all events and transactions that occurred after June 30, 2025 up through October 17, 2025, which is the date that these unaudited condensed consolidated financial statements are available to be issued, there were no other any material subsequent events that require disclosure in these unaudited condensed consolidated financial statements other than disclosed below.
On August 7, 2025, the “Company held an
annual general meeting of shareholders and approved to re-designate the Company’s authorized share capital by changed of the authorized
share capital from US$
On September 9, 2025, the Company entered into
a securities purchase agreement and registration rights agreement with certain investors relating to the issuance and sale of
F-31
WELLCHANGE HOLDINGS COMPANY LIMITED
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
19. PARENT ONLY FINANCIAL INFORMATION
The Company did not have significant capital and other commitments, long-term obligations, or guarantees as of December 31, 2024 and June 30, 2025. Certain information and footnote disclosures generally included in financial statements prepared in accordance with U.S. GAAP have been condensed and omitted.
The following presents condensed parent company only financial information of Wellchange Holdings Company Limited.
Condensed balance sheets
| As of | ||||||||
| December 31, 2024 | June 30, 2025 | |||||||
| US$ | US$ | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Amounts due from a subsidiary | ||||||||
| Total current assets | ||||||||
| Non-current assets: | ||||||||
| Investment in a subsidiary | ||||||||
| Amounts due from a subsidiary | ||||||||
| Deferred offering cost | ||||||||
| Total non-current assets | ||||||||
| TOTAL ASSETS | ||||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Amount due to a director | ||||||||
| Total current liabilities | ||||||||
| TOTAL LIABILITIES | ||||||||
| Commitments and contingencies (Note 17) | ||||||||
| Shareholders’ equity | ||||||||
| Ordinary shares, US$ | ||||||||
| Additional paid-in capital | ||||||||
| Share-based award reserves | ||||||||
| Accumulated losses | ( | ) | ( | ) | ||||
| Accumulated other comprehensive income | ||||||||
| Total shareholders’ equity | ||||||||
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Condensed statements of loss
| Six months ended June 30, | ||||||||
| 2024 | 2025 | |||||||
| US$ | US$ | |||||||
| OPERATING EXPENSES | ||||||||
| Legal and professional fees | ( | ) | ||||||
| Staff costs and employee benefits | ( | ) | ||||||
| TOTAL OPERATING EXPENSES | ( | ) | ||||||
| Income tax expense | ||||||||
| NET LOSS | ( | ) | ||||||
F-32