BUUU Group (Nasdaq: BUUU) posts H1 2026 loss as costs surge
Rhea-AI Filing Summary
BUUU Group Limited reported higher revenue but a sharp swing to loss for the six months ended December 31, 2025. Revenue rose to $3.22 million, up about 12% from $2.87 million a year earlier, driven by both event management and stage production services.
Cost of revenue jumped to $2.87 million, compressing gross profit to $352,059 and reducing gross margin to roughly 10.9% from 26.1%. General administrative expenses more than doubled to $1.23 million, including $422,991 of share option expense and $168,000 of RSU expense, contributing to a net loss.
The Company recorded a net loss of $875,993, versus net income of $160,569 in the prior-year period, and basic and diluted EPS declined to $(0.06) from $0.01. Despite the loss, BUUU’s balance sheet strengthened: cash and cash equivalents increased to $5.72 million, largely reflecting $5.80 million in net IPO proceeds, while total equity rose to $6.15 million.
Positive
- Revenue growth with strong cash inflow: BUUU’s revenue increased to $3.22 million (up about 12% year over year), and operations generated $301,888 of cash, while the IPO added $5.80 million of net proceeds, boosting cash to $5.72 million and equity to $6.15 million.
Negative
- Sharp profitability deterioration: Gross margin fell from about 26.1% to 10.9%, and BUUU moved from $160,569 of net income to a $875,993 net loss, driven by higher direct costs and a 137.7% increase in general administrative expenses including significant share-based compensation.
Insights
BUUU grew revenue but margins collapsed and IPO-related costs drove a swing to loss.
BUUU’s revenue increased about 12% year over year to $3.22 million, with both event management and stage production contributing. However, cost of revenue climbed 35% to $2.87 million, cutting gross margin to roughly 10.9%, which is low for a project‑based services business.
General administrative expenses rose to $1.23 million, including $422,991 of share option expense and $168,000 of RSU expense. Combined with higher operating costs, this turned a prior $160,569 profit into a $875,993 net loss. Financing costs also increased as the company added motor-vehicle finance leases.
On the balance sheet, the Nasdaq IPO was transformative: BUUU received net proceeds of $5.80 million, lifting cash to $5.72 million and equity to $6.15 million. Operating cash flow of $301,888 shows the underlying business still generated cash in this period, but future filings will need to show whether margins can recover as public-company and compensation costs normalize.
Key Figures
Key Terms
event management services financial
stage production services financial
gross profit margin financial
right-of-use assets financial
non-controlling interests financial
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 May
Commission File Number:
(Translation of registrant’s name into English)
Flat B, 16/F, Ford Glory Plaza
37 Wing Hong Street
Cheung Sha Wan, 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 ☐
BUUU Group Limited, a British Virgin Islands company (the “Company”) is hereby furnishing this report on Form 6-K (the “Report”) to provide the Unaudited Interim Condensed Consolidated Financial Statements of the Company as of and for the six months ended December 31, 2025, included as Exhibit 99.1 of this Report, and the Management’s Discussion and Analysis of Financial Condition and Results of Operations as of and for the six months ended December 31, 2025, included as Exhibit 99.2 of this Report.
EXHIBIT INDEX
| Exhibit No. | Description | |
| 99.1 | Unaudited Interim Condensed Consolidated Financial Statements for the Six Months Ended December 31, 2025 | |
| 99.2 | Management’s Discussion and Analysis of Financial Condition and Results of Operations for the Six Months Ended December 31, 2025 | |
| 101.INS | Inline XBRL Instance Document | |
| 101.SCH | Inline XBRL Taxonomy Extension Schema | |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation | |
| 101.DEF | Inline XBRL Taxonomy Extension Definition | |
| 101.LAB | Inline XBRL Taxonomy Extension Label | |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation | |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
1
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Date: May 8, 2026 | ||
| BUUU Group Limited | ||
| By: | /s/ Wai Kwong, POON | |
| Name: | Wai Kwong, POON | |
| Title: | Chief Executive Officer | |
2
Exhibit 99.1
BUUU GROUP LIMITED AND SUBSIDIARIES
INDEX TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
| Page | ||
| Unaudited Interim Condensed Consolidated Balance Sheets as of December 31, 2025 and June 30, 2025 | F-2 | |
| Unaudited Interim Condensed Consolidated Statements of Operations for the six months ended December 31, 2025, 2024 and 2023 | F-3 | |
| Unaudited Interim Condensed Consolidated Statements of Comprehensive (Loss) Income for the six months ended December 31, 2025, 2024 and 2023 | F-4 | |
| Unaudited Interim Condensed Consolidated Statements of Changes in Equity for the six months ended December 31, 2025, 2024 and 2023 | F-5 | |
| Unaudited Interim Condensed Consolidated Statements of Cash Flows for the six months ended December 31, 2025, 2024 and 2023 | F-6 | |
| Notes to the Unaudited Interim Condensed Consolidated Financial Statements | F-7 – F-23 |
F-1
BUUU GROUP LIMITED AND SUBSIDIARIES
UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts expressed in US dollars (“$”) except for numbers of shares and par value)
| As of | ||||||||
December 31, 2025 (unaudited) | June 30, 2025 (audited) | |||||||
| Assets | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Trade receivables | ||||||||
| Deposits, prepayments and other current assets | ||||||||
| Contract assets | ||||||||
| Deferred initial public offering (“IPO”) costs | ||||||||
| Total Current Assets | ||||||||
| Non-Current Assets: | ||||||||
| Property, plant and equipment, net | ||||||||
| Right of use assets – operating lease | ||||||||
| Cash surrender value of life insurance policies | ||||||||
| Deferred tax assets, net | ||||||||
| Total Non-Current Assets | ||||||||
| Total Assets | $ | $ | ||||||
| Liabilities and Equity | ||||||||
| Current Liabilities: | ||||||||
| Trade payables | $ | $ | ||||||
| Other payables and accruals | ||||||||
| Advance from customers | ||||||||
| Bank borrowings | ||||||||
| Current portion of operating lease liabilities | ||||||||
| Loan payables | ||||||||
| Current portion of finance lease liabilities | ||||||||
| Income tax payable | ||||||||
| Total Current Liabilities | ||||||||
| Non-Current Liabilities: | ||||||||
| Deferred tax liabilities, net | ||||||||
| Operating lease liabilities | ||||||||
| Finance lease liabilities | ||||||||
| Total Non-Current Liabilities | ||||||||
| Total Liabilities | $ | $ | ||||||
| Equity | ||||||||
| Share capital* ( | $ | $ | ||||||
| Subscription receivable | ( | ) | ( | ) | ||||
| Additional paid-in capital | ||||||||
| Retained earnings | ||||||||
| Accumulated other comprehensive income (loss) | ( | ) | ||||||
| Capital and reserves attributable to equity holders of the Company | ||||||||
| Non-controlling interests | ||||||||
| Total Equity | ||||||||
| Total Liabilities and Equity | $ | $ | ||||||
| * |
The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
F-2
BUUU GROUP LIMITED AND SUBSIDIARIES
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts expressed in US dollars (“$”) except for numbers of shares)
| Six Months Ended December 31, | ||||||||||||
2025 (unaudited) | 2024 (unaudited) | 2023 (unaudited) | ||||||||||
| Revenue | $ | $ | $ | |||||||||
| Cost of revenue | ( | ) | ( | ) | ( | ) | ||||||
| Gross profit | ||||||||||||
| Operating expenses | ||||||||||||
| General administrative expenses | ( | ) | ( | ) | ( | ) | ||||||
| (Loss) profit from operations | ( | ) | ||||||||||
| Other income, net | ||||||||||||
| Finance costs | ( | ) | ( | ) | ( | ) | ||||||
| (Loss) income before income tax | ( | ) | ||||||||||
| Provision for income tax expense | ( | ) | ( | ) | ( | ) | ||||||
| Net (loss) income for the period | ( | ) | ||||||||||
| Less: Net income attributable to non-controlling interests | ( | ) | ( | ) | ( | ) | ||||||
| Net (loss) income attributable to equity holders of the Company | $ | ( | ) | $ | $ | |||||||
| Basic and diluted (loss) earnings per ordinary share | $ | ( | ) | $ | $ | |||||||
| Weighted average number of ordinary shares outstanding | * | * | * | |||||||||
| * |
The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
F-3
BUUU GROUP LIMITED AND SUBSIDIARIES
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
(Amounts expressed in US dollars (“$”) except for numbers of shares)
| Six Months Ended December 31, | ||||||||||||
2025 (unaudited) | 2024 (unaudited) | 2023 (unaudited) | ||||||||||
| Net (loss) income for the period | $ | ( | ) | $ | $ | |||||||
| Currency translation differences | ||||||||||||
| Total comprehensive (loss) income for the period | $ | ( | ) | $ | $ | |||||||
| Attributable to: | ||||||||||||
| Equity holders of the Company | ( | ) | $ | $ | ||||||||
| Non-controlling interests | ||||||||||||
| Total comprehensive (loss) income for the period | $ | ( | ) | $ | $ | |||||||
The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
F-4
BUUU GROUP LIMITED AND SUBSIDIARIES
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Amounts expressed in US dollars (“$”) except for numbers of shares)
| For the six months ended December 31, 2023 | ||||||||||||||||||||||||||||
| Ordinary Shares | Accumulated | |||||||||||||||||||||||||||
| Number of Shares* | Amount (no-par value)* | Subscription Receivable | Other Comprehensive (Loss) Income | Retained Earnings | Non- Controlling Interests | Total Equity | ||||||||||||||||||||||
| Balance as of June 30, 2023 (audited) | $ | $ | ( | ) | $ | ( | ) | $ | $ | $ | ||||||||||||||||||
| Disposal of BU Production (Note 10) | — | ( | ) | ( | ) | |||||||||||||||||||||||
| Net income for the period | — | |||||||||||||||||||||||||||
| Foreign currency translation | — | ( | ) | |||||||||||||||||||||||||
| Balance as of December 31, 2023 (unaudited) | $ | $ | ( | ) | $ | $ | $ | $ | ||||||||||||||||||||
| For the six months ended December 31, 2024 | ||||||||||||||||||||||||||||
| Ordinary Shares | Accumulated | |||||||||||||||||||||||||||
| Number of Shares* | Amount (no-par value)* | Subscription Receivable | Other Comprehensive Income | Retained Earnings | Non- Controlling Interests | Total Equity | ||||||||||||||||||||||
| Balance as of June 30, 2024 (audited) | $ | $ | ( | ) | $ | $ | $ | $ | ||||||||||||||||||||
| Net income for the period | — | |||||||||||||||||||||||||||
| Foreign currency translation | — | ( | ) | |||||||||||||||||||||||||
| Dividend declared during the period | — | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||
| Balance as of December 31, 2024 (unaudited) | $ | $ | ( | ) | $ | $ | $ | $ | ||||||||||||||||||||
| For the six months ended December 31, 2025 | ||||||||||||||||||||||||||||||||
| Ordinary Shares | Accumulated | |||||||||||||||||||||||||||||||
| Number of Shares* | Amount (no-par value)* | Subscription Receivable | Additional Paid-In Capital | Other Comprehensive (Loss) Income | Retained Earnings | Non- Controlling Interests | Total Equity | |||||||||||||||||||||||||
| Balance as of June 30, 2025 (audited) | $ | $ | ( | ) | $ | $ | ( | ) | $ | $ | $ | |||||||||||||||||||||
| Net loss (income) for the period | — | ( | ) | ( | ) | |||||||||||||||||||||||||||
| Foreign currency translation | — | |||||||||||||||||||||||||||||||
| Issuance of ordinary shares pursuant to the IPO, net of offering cost | ||||||||||||||||||||||||||||||||
| Issuance of ordinary shares under 2025 equity incentive plan | ||||||||||||||||||||||||||||||||
| Share-based compensation | — | |||||||||||||||||||||||||||||||
| Balance as of December 31, 2025 (unaudited) | $ | $ | ( | ) | $ | $ | $ | $ | $ | |||||||||||||||||||||||
| * |
The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
F-5
BUUU GROUP LIMITED AND SUBSIDIARIES
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts expressed in US dollars (“$”)
| Six Months Ended December 31, | ||||||||||||
2025 (unaudited) | 2024 (unaudited) | 2023 (unaudited) | ||||||||||
| Cash Flows From Operating Activities: | ||||||||||||
| Net (loss) income for the period | $ | ( | ) | $ | $ | |||||||
| Adjustments to reconcile net income to net cash used in (generated from) operating activities: | ||||||||||||
| Depreciation of property, plant and equipment | ||||||||||||
| Lease expenses | ||||||||||||
| Finance costs | ||||||||||||
| Deferred income tax | ||||||||||||
| Gain on disposal of property, plant and equipment | ( | ) | ||||||||||
| Loss on lease modification | ||||||||||||
| Share-based compensation | ||||||||||||
| Changes in operating assets and liabilities: | ||||||||||||
| Trade receivables | ( | ) | ( | ) | ||||||||
| Deposits, prepayments and other current assets | ( | ) | ( | ) | ( | ) | ||||||
| Contract asset | ( | ) | ( | ) | ||||||||
| Trade payables | ||||||||||||
| Other payables and accruals | ( | ) | ||||||||||
| Advance from customers | ( | ) | ||||||||||
| Operating lease liabilities | ( | ) | ( | ) | ( | ) | ||||||
| Income tax payable | ( | ) | ||||||||||
| Amounts due with related parties | ( | ) | ||||||||||
| Net Cash Provided By Operating Activities | ||||||||||||
| Cash Flows From Investing Activities: | ||||||||||||
| Acquisition of property, plant and equipment | ( | ) | ||||||||||
| Proceeds from disposal of property, plant and equipment | ||||||||||||
| Disposal of a subsidiary, net of cash disposed | ( | ) | ||||||||||
| Net Cash Provided By (Used In) Investing Activities | ( | ) | ||||||||||
| Cash Flows From Financing Activities: | ||||||||||||
| Payment of dividend to shareholders* | ( | ) | ||||||||||
| Proceeds from loan payables | ||||||||||||
| Repayment of loan payables | ( | ) | ||||||||||
| Repayment of bank borrowings | ( | ) | ( | ) | ( | ) | ||||||
| Payment of finance lease liabilities | ( | ) | ( | ) | ( | ) | ||||||
| Proceeds from issuance of ordinary shares pursuant to IPO, net of offering cost | ||||||||||||
| Payments of offering costs related to initial public offering | ( | ) | ( | ) | ||||||||
| Net Cash Provided By (Used In) Financing Activities | ( | ) | ( | ) | ||||||||
| Effect of movements in exchange rates on cash held | ||||||||||||
| Net changes in cash | ( | ) | ( | ) | ||||||||
| Cash at beginning of the period | ||||||||||||
| Cash at end of the period | $ | $ | $ | |||||||||
| Supplemental Disclosure of Cash Flow Information: | ||||||||||||
| Cash paid for interest | $ | $ | $ | |||||||||
| Cash paid for taxes | $ | |||||||||||
| Supplemental Disclosure of Non-Cash Financing Activities: | ||||||||||||
| Property, plant and equipment obtained in exchange of new finance lease liabilities | $ | |||||||||||
| * |
The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
F-6
BUUU GROUP LIMITED AND SUBSIDIARIES
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts expressed in US dollars (“$”) except for numbers of shares)
Note 1. Organization and nature of operations
BUUU Group Limited (“BUUU” or the “Company”) is a business company established under the laws of the British Virgin Islands on April 16, 2024. It is a holding company with no business operation. It is authorised to issue a maximum of
The Company, through its subsidiaries incorporated and domiciled in Hong Kong (collectively referred to as the “Company”), specializes in all aspects of the design, planning and production of face-to-face events, immersive environments and brand-based experiences for clients and venues, including event organizers, consumer brand marketers and retail shopping centers.
BU Creation Limited (“BU Creation”) was incorporated in Hong Kong under the Hong Kong Companies Ordinance (Chapter 622) on May 11, 2017. BU Creation is a
BU Workshop Limited (“BU Workshop”) was incorporated in Hong Kong under the Hong Kong Companies Ordinance (Chapter 622) on September 13, 2019. BU Workshop is a
BU Production Limited (“BU Production”) was incorporated in Hong Kong under the Hong Kong Companies Ordinance (Chapter 622) on February 14, 2023. BU Production is a
Reorganization
On October 17, 2024, BUUU resolved and approved to increase the maximum number of shares it is authorized to issue from
On October 22, 2024,
On December 13, 2024, pursuant to a sale and purchase agreement entered into between Glitter Win International Limited and Excellent Prospect Investment Holding Limited, Excellent Prospect Investment Holding Limited has acquired
F-7
BUUU GROUP LIMITED AND SUBSIDIARIES
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts expressed in US dollars (“$”) except for numbers of shares)
Note 1. Organization and nature of operations (cont.)
The following diagram illustrates the Company’s legal entity ownership structure after the reorganization as of December 31, 2025:
Note 2. Significant Accounting Policies
The following is a summary of significant accounting policies used in the preparation of these unaudited interim condensed consolidated financial statements.
2.1 Basis of presentation and going concern
The unaudited interim condensed consolidated financial statements are prepared on the basis as if the reorganization became effective as of the beginning of the first period presented in the accompanying unaudited interim condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). In the opinion of management, the unaudited interim condensed consolidated financial statements reflect all adjustments of a normal recurring nature that are necessary for a fair presentation of the results for the interim periods presented. The results of operations for the six months ended December 31, 2025 are not necessarily indicative of results to be expected for the full year ending June 30, 2026. Accordingly, these unaudited interim condensed consolidated financial statements should be read in conjunction with the Company’s audited financial statements as of and for the years ended June 30, 2025 and 2024.
The unaudited interim condensed consolidated financial statements include the financial statements of the Company and all its majority-owned subsidiaries from the dates they were incorporated. All intercompany balances and transactions have been eliminated on consolidation.
These unaudited interim condensed consolidated financial statements have been prepared on a going concern basis, which assumes that the Company will be able to continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities and commitments in the normal course of business. Management of the Company is satisfied that the Company’s operating profit has provided the Company adequate financial resources to continue in operational existence for the foreseeable future, a period of at least 12 months from the date of this report.
2.2 Basis of consolidation
The Company and its subsidiaries resulting from Reorganization has always been under the common control of the same controlling shareholders before and after the Reorganization. Accordingly, the combination of these entities has been accounted for as a reorganization of entities under common control in accordance with ASC 805 guidelines, whereby the resulting controlling entity, namely, BUUU recognized the assets and liabilities of the Subsidiaries transferred at their carrying amounts with a carry-over basis. The reorganization of entities under common control was retrospectively applied to the financial statements of all prior periods when the financial statements are issued for a period that includes the date the share exchange transaction occurred.
Equity interests in BU Workshop held by parties other than BUUU are presented as non-controlling interests in equity.
F-8
BUUU GROUP LIMITED AND SUBSIDIARIES
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts expressed in US dollars (“$”) except for numbers of shares)
Note 2. Significant Accounting Policies (cont.)
2.3 Use of estimates
The preparation of the unaudited interim condensed consolidated financial statements in conformity with U.S. GAAP requires the management of the Company to make estimates and assumptions relating to the reported amounts of assets and liabilities and the disclosures of contingent assets and liabilities at the balance sheet dates and the reported amounts of revenue and expenses during the reporting periods. Areas involving significant estimates and assumptions include revenue recognition for contracts, expected credit loss assessment, determination of useful lives of property, plant and equipment, principles of consolidation and reverse recapitalization. Actual results could differ from those estimates. These estimates are reviewed periodically, and as adjustments become necessary, they are reported in earnings in the period in which they become known.
2.4 Foreign currency translation
The reporting currency of the Company is United States Dollar (“USD”) and the accompanying unaudited interim condensed consolidated financial statements have been expressed in “$”. The Company’s operating subsidiaries are based in Hong Kong, with its books and records maintained in its local currency, the Hong Kong Dollar (“HKD”), which is the functional currency as being the primary currency of the economic environment in which their operations are conducted. In general, for consolidation purposes, assets and liabilities of its subsidiaries whose functional currency is not USD are translated into USD, in accordance with ASC Topic 830-30, “Translation of Financial Statement”, using the exchange rate on the balance sheet date. Shareholders’ equity is translated using the historical rates and adjustments resulting from the translation, if any, are included in accumulated other comprehensive income or loss. Revenue and expenses are translated at average rates prevailing during the years. The gains and losses resulting from the translation of financial statements of foreign subsidiaries are recorded as a separate component of accumulated other comprehensive income within the statements of changes in shareholders’ equity.
The currency exchange rates were utilized as follows:
| December 31, 2025 | June 30, 2025 | |||||||
| Period-end HKD exchange rate | ||||||||
| Six Months Ended December 31, | ||||||||||||
| 2025 | 2024 | 2023 | ||||||||||
| Period average HKD exchange rate | ||||||||||||
2.5 Cash and cash equivalents
The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. As of December 31, 2025 and June 30, 2025, substantially all the Company’s cash and cash equivalents were deposited with financial institutions with high credit ratings and quality.
2.6 Deposits, prepayments and other current assets
Deposits, prepayments and other current assets primarily consists of advances to suppliers for purchasing furniture and decor, rental deposits made to the landlord, prepaid expenses and other receivables. Deposits, prepayments and other current assets are classified as either current or non-current based on the terms of the respective agreements. These advances are unsecured and are reviewed periodically to determine whether their carrying value has become impaired.
2.7 Trade receivables
Trade receivables are recorded at the invoiced amount less expected credit losses as needed.
To estimate expected credit losses, the Company has identified the relevant risk characteristics of its customers and considers past collection experience, current economic conditions, and expected future economic conditions. The Company did record provision for expected credit losses for the six months ended December 31, 2025, 2024 and 2023.
F-9
BUUU GROUP LIMITED AND SUBSIDIARIES
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts expressed in US dollars (“$”) except for numbers of shares)
Note 2. Significant Accounting Policies (cont.)
2.8 Property, plant and equipment, net
Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses. Cost represents the purchase price of the asset and other costs incurred to bring the asset into its existing use. Maintenance and repairs are charged to general administrative expenses; major additions to improve service potential or extend economic life are capitalized.
Depreciation of property, plant and equipment is computed using the straight-line method over the estimated useful lives of the assets with no residual value. The estimated useful lives are as follows:
| Useful life | ||
| Motor vehicles | ||
| Furniture and fixtures | ||
| Computer equipments | ||
| Leasehold improvements |
2.9 Impairment of Long-Lived Assets
The Company tests its long-lived assets for impairment at least annually and whenever events or circumstances change that indicate impairment may have occurred. A significant amount of judgment is involved in determining if an indicator of impairment has occurred. Such indicators may include, among others and without limitation: a significant decline in the Company’s expected future cash flows; a significant adverse change in legal factors or in the business climate of the Company’s operations; unanticipated competition; and slower growth rates. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
2.10 Life insurance policies
In September 2022 and February 2023, the Company purchased two life insurance policies (the “policies”) on a director that the Company is the policyholder and are recorded at the amount that can be realized under the insurance contracts at the balance sheet date, which is the cash surrender value adjusted for other charges or other amounts due that are probable at settlement. The Company may terminate the policies at any time and receive the cash surrender value at the date of withdrawal calculated by the insurance company. The gain or loss related to the change in cash value of these life insurance policies at the balance sheet date is recorded as other income under the Company’s unaudited interim condensed consolidated statements of operations.
As of December 31, 2025 and June 30, 2025, the cash surrender values of the life insurance policies of $
2.11 Leases
The Company leases all the office space, warehouse and motor vehicles to conduct the business. Leases are classified as either finance leases or operating leases. A lease is classified as a finance lease if any one of the following criteria is met: the lease transfers ownership of the asset by the end of the lease term, the lease contains an option to purchase the asset that is reasonably certain to be exercised, the lease term is for a major part of the remaining useful life of the asset or the present value of the lease payments equals or exceeds substantially all of the fair value of the asset. A lease is classified as an operating lease if it does not meet any one of these criteria. The Company’s operating leases are comprised of office space and warehouse leases, and finance leases are comprised of motor vehicles.
F-10
BUUU GROUP LIMITED AND SUBSIDIARIES
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts expressed in US dollars (“$”) except for numbers of shares)
Note 2. Significant Accounting Policies (cont.)
The Company recognizes a lease liability and a right-of-use (“ROU”) asset at the commencement date of a lease. A lease liability is initially measured as the Company’s obligation for the future fixed lease payments that will be made over the lease term, measured on a discounted basis. An ROU asset is an asset that represents the Company’s right to use or control the use of specified assets for the lease term. The lease term includes periods for which it’s reasonably certain that the renewal options will be exercised and periods for which it’s reasonably certain that the termination options will not be exercised. The future fixed lease payments are discounted using the rate implicit in the lease. If the rate implicit in the leases is not readily determinable, the lessee should use the incremental borrowing rate as the discount rate, which approximates the interest rate at which the lessee could borrow on a collateralized basis with similar terms and payments and in similar economic environments. The Company elected not to recognize any leases with lease terms of 12 months or less at the commencement date in the unaudited interim condensed consolidated balance sheets.
The ROU asset is subsequently measured at the amount of the lease liability with adjustments, if applicable. The Company will evaluate the carrying value of ROU assets if there are indicators of impairment and review the recoverability of the related asset group. If the carrying value of the asset group is determined to not be recoverable and is in excess of the estimated fair value, the Company will record an impairment loss in other expenses in the unaudited interim condensed consolidated statements of operations.
Operating leases are included in operating lease ROU assets and operating lease liabilities in the unaudited interim condensed consolidated balance sheets. Operating lease liabilities that become due within one year of the balance sheet date are classified as current portion of operating lease liabilities. Finance leases are included in motor vehicles and finance lease liabilities in the unaudited interim condensed consolidated balance sheets. Finance lease liabilities that become due within one year of the balance sheet date are classified as current portion of finance lease liabilities.
Lease expense for operating leases consists of the fixed lease payments recognized on a straight-line basis over the lease term. Lease expense for finance leases consists of the amortization of the right-of-use asset over the shorter of the lease term or useful life of the underlying asset. Interest accretion on the finance lease liabilities is recorded as finance costs. For both operating and finance leases, lease expense related to variable payments is recognized as incurred based on performance or usage in accordance with the contractual agreements.
2.12 Trade payables, other payables and accruals
Trade payables, other payables and accruals are liabilities for unpaid goods and services provided to the Company prior to the end of each reporting period. They are recognized initially at their fair value and subsequently measured at amortized cost using the effective interest method. They are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities.
2.13 Fair value measurements
The Company uses a three-tier fair value hierarchy to classify and disclose all assets and liabilities measured at fair value on a recurring basis, as well as assets and liabilities measured at fair value on a non-recurring basis, in periods subsequent to their initial measurement. The hierarchy requires the Company to use observable inputs when available and to minimize the use of unobservable inputs when determining fair value. The three tiers are defined as follows:
| ● | Level 1 — Observable inputs that reflect quoted market prices (unadjusted) for identical assets or liabilities in active markets; |
| ● | Level 2 — Observable inputs other than quoted prices in active markets that are observable either directly or indirectly in the marketplace for identical or similar assets and liabilities; and |
| ● | Level 3 — Unobservable inputs that are supported by little or no market data, which require the Company to develop its own assumptions. |
The cash surrender value of life insurance policies is classified as Level 2. The value was determined by inputs that are readily available in a public market or can be derived from information available in publicly quoted markets. These inputs include the underwriting insurance company’s valuation models, which take into account the passage of time, mortality tables, interest rates, cash values for paid-up additions and dividend accumulations. The cash surrender value represents the guaranteed value the Company would receive upon surrender of these policies held on a director as of December 31, 2025 and June 30, 2025. The fair value of the life insurance policies is marked to market at each reporting period and any changes in fair value is reflected in the unaudited interim condensed consolidated statements of operations for that period.
F-11
BUUU GROUP LIMITED AND SUBSIDIARIES
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts expressed in US dollars (“$”) except for numbers of shares)
Note 2. Significant Accounting Policies (cont.)
The carrying values of the Company’s financial instruments, including cash, trade receivables, deposits, prepayments and other assets, trade payables, other payables and accruals, approximate their fair values as of December 31, 2025 and June 30, 2025 due to the short-term nature of these instruments.
2.14 Revenue from contracts with customers
The Company adopts Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (ASC Topic 606) for all periods presented and determines revenue recognition by applying the following five-step model:
| ● | Identification of the contract, or contracts, with a customer; |
| ● | Identification of the performance obligations in the contract; |
| ● | Determination of the transaction price; |
| ● | Allocation of the transaction price to the performance obligations in the contract; and |
| ● | Recognition of revenue when, or as, the Company satisfies a performance obligation. |
Segment reporting
In accordance with ASC 280, Segment Reporting, the Company is required to report financial and descriptive information about its reportable segments. Reportable segments are operating segments or aggregations of operating segments that meet specific quantitative thresholds. The identification of operating segments is based on the internal reporting used by the Chief Operating Decision Maker (“CODM”) to assess performance and allocate resources.
The Company has determined that it operates as a single operating and reportable segment. This conclusion is based on the following considerations:
| ● | The Company is managed as a single business, with a single set of operating metrics used to assess performance and allocate resources; |
| ● | The CODM, who is the Company’s Chief Executive Officer, reviews consolidated financial information to make operational and strategic decisions; |
| ● | The nature of the products and services, customer base, and methods of distribution are consistent across the business. |
The CODM uses revenue to evaluate segment performance and allocate resources.
The following table identifies the disaggregation of the Company’s revenue for the six months ended December 31, 2025, 2024 and 2023, respectively:
| For the six months ended June 30, | ||||||||||||||||||||||||
| Service Type | 2025 | Percentage of Total revenue (in %) | 2024 | Percentage of Total revenue (in %) | 2023 | Percentage of Total revenue (in %) | ||||||||||||||||||
| Event management services | $ | $ | $ | |||||||||||||||||||||
| Stage production services | ||||||||||||||||||||||||
| Total | $ | $ | $ | |||||||||||||||||||||
During the six months ended December 31, 2025, 2024 and 2023, all revenue was generated from Hong Kong and from third parties.
Event management services
The Company provides customized event management services upon requests from its customers in exchange for a fixed transaction price. The service generally entail design, logistics, layout of events and coordination and supervision of the actual event set-up and implementation. These services are not distinct within the context of the contracts and are considered as a single performance obligation.
F-12
BUUU GROUP LIMITED AND SUBSIDIARIES
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts expressed in US dollars (“$”) except for numbers of shares)
Note 2. Significant Accounting Policies (cont.)
The Company recognizes revenue that are satisfied over time by measuring the progress toward complete satisfaction of the performance obligation using a single method of measuring progress which depicts the performance in transferring control of the associated goods or services to the customers. The Company uses input methods to measure the progress toward the complete satisfaction of performance obligations satisfied over time. Significant management judgment is required in determining the level of effort required under an arrangement and the period over which the Company is expected to complete the performance obligations under an arrangement. At each reporting period, the Company measures the progress based on the budgeting and costing systems and estimates the proportion of service rendered based on the ratio of costs incurred to estimated total costs.
Stage production services
Apart from the event management services, the Company also provides stage production services, including sales of furniture pieces, essential decor items, stage equipment and the corresponding installation service to its customers. The transaction price is fixed. The Company recognizes revenues from stage production services at a point of time when the goods are delivered to the customer.
Contract balances
Contract assets
The Company recognizes a contract asset when revenue is recognized in advance of invoicing on a customer contract, unless the right to payment for that revenue is unconditional (i.e. requiring no further performance and only the passage of time). If a right to payment is determined to meet the criteria to be considered ‘unconditional’, then the Company will recognize a trade receivable. As of December 31, 2025 and June 30, 2025, the balances of contract asset amounted to $
Contract liability
The Company presents the consideration that a customer pays before the Company transfers the service to the customer as a contract liability (advance from customers) when the payment is made. An advance from customers is the Company’s obligation to transfer services to a customer for which the Company has received consideration from the customer. As of December 31, 2025 and June 30, 2025, the balances of advance from customers amounted to $
Contract costs
The Company applies the practical expedient in ASC Topic 606 that permits the recognition of incremental costs of obtaining contracts as an expense when incurred if the amortization period of such costs is one year or less. These costs are included in cost of revenue.
2.15 Cost of revenue
Cost of revenue is recognized when incurred. Cost of revenue consists primarily of subcontracting costs associated with the tasks outsourced to a subcontractor to fulfill the Company’s revenue contracts and staff costs incurred that are directly attributable to the revenue-generating services to clients.
2.16 Income Taxes
The Company accounts for income taxes in accordance with ASC 740 “Income Taxes”.
F-13
BUUU GROUP LIMITED AND SUBSIDIARIES
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts expressed in US dollars (“$”) except for numbers of shares)
Note 2. Significant Accounting Policies (cont.)
Current taxes are the expected tax receivable or payable on the taxable income or loss for the current period, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax receivable or payable in respect of previous years. Deferred taxes are recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The Company conducts business activities and is subject to taxes in Hong Kong. The Company files tax returns in Hong Kong and is subject to examination by the Hong Kong tax authority.
Deferred tax assets and liabilities are recognized for the future tax consequences of transactions that have been recognized in the Company’s financial statements or tax returns. A valuation allowance is provided when it is more likely than not that some portion, or all, of the deferred tax asset will not be realized.
Deferred tax asset is recognized for unused tax losses, tax credits and deductible temporary differences, to the extent that it is probable that future taxable profits will be available against which they can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized. The Company considers positive and negative evidence to determine whether some portion or all of the deferred tax assets will more likely than not be realized. This assessment considers, among other matters, the nature, frequency and severity of recent losses, forecasts of future profitability, the duration of statutory carry forward periods, the Company’s experience with tax attributes expiring unused and tax planning alternatives. Valuation allowances have been established for deferred tax assets based on a more-likely-than-not threshold. The Company’s ability to realize deferred tax assets depends on its ability to generate sufficient taxable income within the carry forward periods provided for in the tax law.
Deferred taxes are not recognized for the following temporary differences: the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss, and differences relating to investments in subsidiaries and jointly controlled entities to the extent that it is probable that they will not reverse in the foreseeable future.
2.17 Earnings per share (“EPS”)
Basic EPS is calculated by dividing the net income attributable to ordinary equity holders by the weighted average number of ordinary shares outstanding during the period. Diluted EPS is calculated by using the weighted average number of ordinary shares outstanding adjusted to include the potentially dilutive effect of ordinary shares outstanding during the period using the treasury stock method and as if converted method, unless their inclusion in the calculation is anti-dilutive.
As of December 31, 2025, potentially dilutive securities (including
2.18 Non-controlling interests
A non-controlling interest in a subsidiary of the Company represents the portion of the equity (net assets) in the subsidiary not directly or indirectly attributable to the Company. Non-controlling interests are presented as a separate component of equity on the unaudited interim condensed consolidated balance sheets and net income and other comprehensive income attributable to non-controlling shareholders are presented as a separate component on the unaudited interim condensed consolidated statements of operations.
2.19 Related Parties
The Company follows ASC 850, “Related Party Disclosures,” for the identification of related parties and disclosure of related party transactions and balances. Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control or significant influence, such as a family member or relative, shareholder, or a related corporation.
2.20 Commitments and Contingencies
In the normal course of business, the Company is subject to loss contingencies, such as legal proceedings and claims arising out of its business, that cover a wide range of matters, including, among others, government investigations and tax matters. In accordance with ASC No. 450-20, “Loss Contingencies”, the Company will record accruals for such loss contingencies when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated.
In the opinion of the management of the Company, there were no pending or threatened claims and litigation as of December 31, 2025, and through the date of this report.
F-14
BUUU GROUP LIMITED AND SUBSIDIARIES
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts expressed in US dollars (“$”) except for numbers of shares)
Note 2. Significant Accounting Policies (cont.)
2.21 Deferred IPO costs
Deferred IPO costs consist primarily of direct expenses paid to attorneys, consultants, underwriters, and other parties related to the Company’s IPO. Pursuant to ASC 340-10-S99-1, IPO costs directly attributable to an offering of equity securities are deferred and would be charged against the gross proceeds of the initial public offering as a reduction of capital. During the six months ended December 31, 2025, 2024 and 2023, deferred IPO costs of $454,330, nil and nil, respectively, were charged against the gross proceeds of the initial public offering as a reduction of share capital.
2.22 Share-based compensation
Share-based awards granted are measured at fair value on grant date and share-based compensation expense is recognized (i) immediately at the grant date if no vesting conditions are required, or (ii) using the straight-line attribution method, net of estimated forfeitures, over the requisite service period. The fair values of restricted stock units (“RSUs”) and restricted shares are determined with reference to the fair value of the underlying shares and the fair value of share options is generally determined using the binomial option pricing model. The value is recognized as an expense over the respective service period, net of estimated forfeitures. Share-based compensation expense, when recognized, is charged to the unaudited condensed consolidated statements of operations with the corresponding credit to additional paid-in capital for the share options and RSUs to the extent that such awards are to be settled only in stock.
On each measurement date, the Company reviews internal and external sources of information to assist in the estimation of various attributes to determine the fair value of the share-based awards granted by the Company, including the fair value of the underlying shares, expected life and expected volatility. The Company recognizes the impact of any revisions to the original forfeiture rate assumptions in the unaudited condensed consolidated statements of operations, with a corresponding adjustment to equity.
2.23 Recent Accounting Pronouncements
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09), which requires disclosure of incremental income tax information within the rate reconciliation and expanded disclosures of income taxes paid, among other disclosure requirements. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company adopted the ASU on July 1, 2025. The additional required disclosures did not have a material impact on our unaudited interim condensed consolidated financial statements.
In November 2024, the FASB issued ASU no. 2024-03, Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosure (Subtopic 220-40). The amendments in this update enhance disclosures about a public business entity’s expense and provide more detailed information about the types of expenses included in certain notes in the consolidated financial statements. ASU no. 2024-03 is effective for annual periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption permitted. The amendments may be applied prospectively to reporting periods after the effective date or retrospectively to all periods presented in the unaudited interim condensed consolidated financial statements. The Company’s management is currently evaluating any new disclosures that may be required upon adoption of ASU 2024-03.
In May 2025, the FASB issued ASU No. 2025-03, Business Combinations (Topic 805) and Consolidation (Topic 810): Accounting Acquirer in a Business Combination Involving a Variable Interest Entity. This ASU clarifies that when a business that is a VIE is acquired primarily with equity interests, the determination of the accounting acquirer should follow ASC 805 rather than defaulting to the primary beneficiary under ASC 810. The standard is effective for fiscal years beginning after December 15, 2026, including interim periods within those fiscal years. Early adoption is permitted. The Company’s management is currently evaluating the impact of adopting this ASU 2025-03 on its unaudited interim condensed consolidated financial statements.
In May 2025, the FASB issued ASU No. 2025-04, Compensation—Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606): Clarifications to Share-Based Consideration Payable to a Customer. This ASU clarifies how entities account for share-based consideration payable to a customer. The ASU requires customer awards with vesting conditions tied to purchases to be treated as performance conditions, eliminates the forfeiture policy election, and states that the variable consideration constraint under ASC 606 does not apply to these awards. The standard is effective for annual periods beginning after December 15, 2026, with early adoption permitted. The Company’s management is currently evaluating the impact of adopting this ASU 2025-04 on its unaudited interim condensed consolidated financial statements.
F-15
BUUU GROUP LIMITED AND SUBSIDIARIES
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts expressed in US dollars (“$”) except for numbers of shares)
Note 3. Risks and uncertainties
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. This ASU provides a practical expedient for all entities related to the estimation of expected credit losses for current accounts receivable and current contract assets that arise from transactions accounted for under Topic 606. The standard is effective for annual periods beginning after December 15, 2025. Early adoption of ASU 2025-05 is permitted and should be applied prospectively. The Company’s management is currently evaluating the impact of adopting this ASU 2025-05 on its unaudited interim condensed consolidated financial statements.
Except for the above-mentioned pronouncements, there are no new recent issued accounting standards that will have a material impact on the unaudited interim condensed consolidated balance sheets, statements of operations and cash flows.
Economic and political risk
The Company’s operating subsidiaries conduct business in Hong Kong, a Special Administrative Region of the PRC. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic and legal environment in the PRC, and by the general state of the PRC economy.
The Company’s operations in Hong Kong are subject to special considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic and legal environment and foreign currency exchange. The Company’s results may be adversely affected by changes in the political and social conditions in the PRC, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation.
Concentration of credit risk
Financial instruments that potentially expose the Company to significant concentration of credit risk consist primarily of trade receivables. The Company conducts credit evaluations of its customers, and generally does not require collateral or other security from them. The Company evaluates its collection experience and long outstanding balances to determine the need for a provision for expected credit losses. The Company conducts periodic reviews of the financial condition and payment practices of its customers to minimize collection risk on trade receivables.
Details of the customers which accounted for 10% or more of the revenue are as follows:
| For the six months ended December 31, | ||||||||||||||||||||||||
| 2025 | % revenue | 2024 | % revenue | 2023 | % revenue | |||||||||||||||||||
| Customer A | $ | % | $ | % | $ | % | ||||||||||||||||||
| Customer B | % | % | % | |||||||||||||||||||||
| Customer C | % | % | % | |||||||||||||||||||||
| Customer D | % | % | % | |||||||||||||||||||||
| $ | % | $ | % | $ | % | |||||||||||||||||||
Details of the customers which accounted for 10% or more of the trade receivables are as follows:
| As of | ||||||||||||||||
December 31, 2025 | % trade receivables | June 30, 2025 | % trade receivables | |||||||||||||
| Customer A | $ | % | $ | % | ||||||||||||
| Customer E | % | % | ||||||||||||||
| Customer F | % | % | ||||||||||||||
| Customer G | % | % | ||||||||||||||
| Customer H | % | % | ||||||||||||||
| $ | % | $ | % | |||||||||||||
F-16
BUUU GROUP LIMITED AND SUBSIDIARIES
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts expressed in US dollars (“$”) except for numbers of shares)
Note 4. Deposits, prepayments and other current assets
At December 31, 2025 and June 30, 2025, deposits and prepayments consisted of the following:
| As of | ||||||||
December 31, 2025 | June 30, 2025 | |||||||
| Refundable deposits | ||||||||
| Advance to suppliers | ||||||||
| Other receivables* | ||||||||
| $ | $ | |||||||
| * |
Note 5. Property, plant and equipment, net
At December 31, 2025 and June 30, 2025, property, plant and equipment consisted of the following:
| As of | ||||||||
December 31, 2025 | June 30, 2025 | |||||||
| Motor vehicles | ||||||||
| Furniture and fixtures | ||||||||
| Computer equipment | ||||||||
| Leasehold improvements | ||||||||
| Accumulated depreciation | ( | ) | ( | ) | ||||
| Property, plant and equipment, net of accumulated depreciation | $ | $ | ||||||
| * | A motor vehicle with a net carrying amount of $ |
During the six months ended December 31, 2025, 2024 and 2023, the Company recorded additions to different categories of property, plant and equipment in aggregate costs of , and $
For the six months ended December 31, 2025, 2024 and 2023, depreciation expense, including the depreciation expense of fixed assets under finance leases, was $
Note 6. Right-of-use assets and operating lease liabilities
The Company has leases for the office premise and warehouse in Hong Kong expiring on various dates through January 2028, which are classified as operating leases. All cash payments of operating lease cost are classified within operating activities in the unaudited interim condensed consolidated statements of cash flows. For the six months ended December 31, 2025, 2024 and 2023, lease expense included in the Company’s general administrative expenses was $
F-17
BUUU GROUP LIMITED AND SUBSIDIARIES
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts expressed in US dollars (“$”) except for numbers of shares)
Note 6. Right-of-use assets and operating lease liabilities (cont.)
The carrying amounts of right-of-use assets are as below:
| As of | ||||||||
December 31, 2025 | June 30, 2025 | |||||||
| Office premise and warehouse | $ | $ | ||||||
| Less: Accumulated lease expense | ( | ) | ( | ) | ||||
| ROU assets, net | $ | $ | ||||||
The Company’s future minimum payments under long-term non-cancellable operating leases are as follows:
| As of December 31, 2025 | ||||
| Within 1 year | $ | |||
| 1 – 2 year | ||||
| Total operating lease payments | $ | |||
| Less: imputed interest | ( | ) | ||
| Total operating lease obligation | $ | |||
| Less: current portion of operating lease liabilities | ( | ) | ||
| Non-current portion of operating lease liabilities | $ | |||
Other information:
| For the six months ended December 31, | ||||||||||||
| 2025 | 2024 | 2023 | ||||||||||
| Cash paid for amounts included in the measurement of lease liabilities: | ||||||||||||
| Cash outflows from operating lease | $ | $ | $ | |||||||||
| Right-of-use assets obtained in exchange for operating lease liabilities | $ | $ | $ | |||||||||
| Loss on lease modification | $ | $ | $ | |||||||||
| Remaining lease term for operating leases (years) | ||||||||||||
| Weighted average discount rate for operating leases | % | % | % | |||||||||
Note 7. Other payables and accruals
| As of | ||||||||
December 31, 2025 | June 30, 2025 | |||||||
| Payroll payable | $ | $ | ||||||
| Other payables | ||||||||
| $ | $ | |||||||
F-18
BUUU GROUP LIMITED AND SUBSIDIARIES
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts expressed in US dollars (“$”) except for numbers of shares)
Note 8. Finance lease liabilities
In August 2022, July 2025 and December 2025, the Company acquired motor vehicles pursuant to a hire purchase financing arrangement.
| As of December 31, 2025 | ||||
| Within 1 year | $ | |||
| 1-2 year | ||||
| 2-3 year | ||||
| Over 3 years | ||||
| Total finance lease payments | $ | |||
| Less: imputed interest | ( | ) | ||
| Total finance lease obligation | $ | |||
| Less: current portion of finance lease liabilities | ( | ) | ||
| Non-current portion of finance lease liabilities | $ | |||
For the six months ended December 31, 2025, 2024 and 2023, interest expense of $
Note 9. Bank borrowings
| As of | ||||||||||
December 31, 2025 | June 30, 2025 | |||||||||
| Loan I | (a) | $ | $ | |||||||
| Loan II | (b) | |||||||||
| Loan III | (c) | |||||||||
| Total bank borrowings | $ | $ | ||||||||
| (a) |
| (b) |
| (c) |
All of these term loan agreements contain a repayable on demand clause that these loans shall be immediately due and payable by the Company on demand by the bank at any time. Therefore, as of December 31, 2025 and June 30, 2025, the outstanding balance of bank borrowings was classified as current liability on the Company’s unaudited interim condensed consolidated balance sheets. For the six months ended December 31, 2025, 2024 and 2023, interest expense of $
F-19
BUUU GROUP LIMITED AND SUBSIDIARIES
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts expressed in US dollars (“$”) except for numbers of shares)
Note 10. Disposal of subsidiaries
On September 25, 2023, the Company completed the disposal of its entire
Note 11. Income tax
British Virgin Islands
The Company was incorporated in the British Virgin Islands. Under the current laws of the British Virgin Islands, the Company is not subject to income or capital gains taxes. In addition, dividend payments are not subject to withholding tax in the British Virgin Islands.
Hong Kong
BU Creation and BU Workshop were incorporated in Hong Kong and subject to the Hong Kong corporate income tax rate of
The components of the income tax provision were as follows:
| For the six months ended December 31, | ||||||||||||
| 2025 | 2024 | 2023 | ||||||||||
| Current income tax expense | ||||||||||||
| Deferred income tax expense | ||||||||||||
| Total income tax expenses | $ | $ | $ | |||||||||
Deferred tax liabilities net was $
Deferred tax assets and liabilities are comprised of the following:
| As of | ||||||||
December 31, 2025 | June 30, 2025 | |||||||
| Deferred tax assets: | ||||||||
| Operating lease liabilities | $ | $ | ||||||
| Total deferred tax assets | $ | $ | ||||||
| Deferred tax liabilities: | ||||||||
| Right of use assets – operating lease | $ | ( | ) | $ | ( | ) | ||
| Total deferred tax liabilities | $ | ( | ) | $ | ( | ) | ||
| Deferred tax (liabilities) assets, net | $ | ( | ) | $ | ||||
F-20
BUUU GROUP LIMITED AND SUBSIDIARIES
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts expressed in US dollars (“$”) except for numbers of shares)
Note 12. Related Party Transactions
The table below sets forth the major related parties and their relationships with the Company as of December 31, 2025 and June 30, 2025:
| Name of related parties | Relationship with the Company | |
| Poon Wai Kwong (“Mr. Poon”) | ||
| Excellent Prospect Investment Holding Limited |
On December 20, 2024, the Company and Excellent Prospect Investment Holding Limited, being a shareholder of the Company, entered into a loan agreement, pursuant to which Excellent Prospect Investment Holding Limited agreed to lend $
Note 13. Equity
The shareholders’ equity structure as of December 31, 2025 and June 30, 2025 are presented after giving retroactive effect to the reorganization of the Company that was completed on November 18, 2024. Immediately before and after reorganization, the Company, together with its subsidiary, were effectively controlled by the same shareholder; therefore, for accounting purposes, the reorganization was accounted for as a recapitalization.
Authorized Shares
The Company has
Ordinary Shares
As of June 30, 2025, the Company has
On August 13, 2025, the Company completed its IPO the Nasdaq Capital Market and the Class A ordinary shares commenced trading under the ticker symbol “BUUU”. Under this offering,
Upon the completion of IPO of the Company, IPO costs capitalized as of June 30, 2025 amounted to $
In November 2025 and December 2025, the Company issued
As of December 31, 2025,
F-21
BUUU GROUP LIMITED AND SUBSIDIARIES
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts expressed in US dollars (“$”) except for numbers of shares)
Note 13. Equity (cont.)
Subscription receivable and share allotment
On November 7, 2024, BUUU, via a subscription agreement for aggregate proceeds of $
Cash dividend
On September 1, 2024, BU Creation Limited, the subsidiary of the Company, declared a special dividend of approximately HK$
On September 1, 2024, BU Workshop Limited, the subsidiary of the Company, declared a special dividend of approximately HK$
Note 14. Share-based compensation
2025 Equity Incentive Plan
On September 23, 2025, the Board of Directors and compensation committee of the Company approved and adopted an equity incentive plan (“2025 Equity Incentive Plan”), which became effective on September 23, 2025. The 2025 Equity Incentive Plan provides up to
As of December 31, 2025, there are
Share-based compensation such as individually or collectively, any incentive stock option, nonqualified stock option, stock appreciation right, restricted stock, restricted stock unit (“RSUs”), stock bonus award and performance compensation award may be granted to any directors, officers, managers, employees, consultants and advisors (and prospective directors, officers, managers, employees, consultants and advisors) of the Company and its affiliates under 2025 Equity Incentive Plan.
Restricted Stock Units
Pursuant to the employment agreement dated October 16, 2025, the Company granted a RSU award of
A summary of the changes in the RSUs relating to Class A ordinary shares granted by the Company during the six months ended December 31, 2025 is as follows:
| Number of RSUs | Weighted average grant date fair value | |||||||
| Awarded and unvested as of July 1, 2025 | $ | |||||||
| Granted | ||||||||
| Vested | ( | ) | ( | ) | ||||
| Awarded and unvested as of December 31, 2025 | $ | |||||||
F-22
BUUU GROUP LIMITED AND SUBSIDIARIES
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts expressed in US dollars (“$”) except for numbers of shares)
Note 14. Share-based compensation (cont.)
The fair values of the RSUs at the grant date are determined with reference to the fair value of the underlying shares (i.e. closing price of the Company’s share as at grant date).
As of December 31, 2025 and June 30, 2025, there were unrecognized compensation costs of $
The Company recognized the share-based compensation related to these RSUs on a straight-line basis over the vesting periods. For the six months ended December 31, 2025, 2024 and 2023, the Company recognized share-based compensation expense of $
Share options
On October 16, 2025, the Company granted
The Company recognizes share-based compensation expenses related to these options on a straight-line basis over the vesting periods. For the six months ended December 31, 2025, 2024 and 2023, the Company recognized share-based compensation expenses of $
The following table summarized the share option activities for the six months ended December 31, 2025:
| Number of share options | Weighted average grant date fair value | Weighted average remaining contract life (in years) | ||||||||||
| Share options outstanding as of July 1, 2025 | $ | |||||||||||
| Granted | ||||||||||||
| Exercised | — | |||||||||||
| Share options outstanding as of December 31, 2025 | $ | |||||||||||
| Vested and exercisable as of December 31, 2025 | $ | |||||||||||
The fair value of the share options at the grant date was estimated at $
The following table provides quantitative information regarding Level 3 fair value measurements inputs for the Company’s share options at their measurement date:
| As of October 16, 2025 | ||||
| Volatility | % | |||
| Stock price ($) | ||||
| Time to maturity (in year) | ||||
| Risk free rate | % | |||
| Dividend yield | % | |||
Note 15. Subsequent events
Save as disclosed above, the Company’s management has evaluated subsequent events up to the date of these unaudited interim condensed consolidated financial statements were available to be issued, pursuant to the requirements of ASC 855 and has determined there are no material subsequent events to disclose.
F-23
Exhibit 99.2
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Overview
BUUU Group Limited (“BUUU” or the “Company”) (Nasdaq: BUUU) is a business company established under the laws of the British Virgin Islands on April 16, 2024. It is a holding company with no business operation. The Company, through its subsidiaries incorporated and domiciled in Hong Kong (collectively referred to as the “Group”, “we” or “our”), specializes in all aspects of the design, planning and production of face-to-face events, immersive environments and brand-based experiences for clients and venues, including event organizers, consumer brand marketers and retail shopping centers. BU Creation Limited (“BU Creation”) is a 100% owned subsidiary of BUUU. BU Creation engages principally in providing fully integrated event design, event planning, event production, and on-site event management services. BU Workshop Limited (“BU Workshop”) is a 75% owned subsidiary of BUUU. BU Workshop engages principally in stage production services, including merchandizing and selling event set furniture and decor.
Results of Operations for the First Half of Fiscal Year 2026
The following table sets forth certain data in respect of our results of operations for the six months ended December 31, 2025, 2024 and 2023:
| Six Months Ended December 31, | ||||||||||||
2025 (unaudited) | 2024 (unaudited) | 2023 (unaudited) | ||||||||||
| Revenue | $ | 3,222,435 | $ | 2,868,494 | $ | 2,926,578 | ||||||
| Cost of revenue | (2,870,376 | ) | (2,120,486 | ) | (2,210,424 | ) | ||||||
| Gross profit | 352,059 | 748,008 | 716,154 | |||||||||
| Operating expenses | ||||||||||||
| General administrative expenses | (1,234,567 | ) | (519,272 | ) | (220,831 | ) | ||||||
| (Loss) profit from operations | (882,508 | ) | 228,736 | 495,323 | ||||||||
| Other income, net | 31,570 | 1,077 | 957 | |||||||||
| Finance costs | (17,514 | ) | (10,279 | ) | (12,766 | ) | ||||||
| (Loss) income before income tax | (868,452 | ) | 219,534 | 483,514 | ||||||||
| Provision for income tax expense | (7,541 | ) | (58,965 | ) | (48,060 | ) | ||||||
| Net (loss) income for the period | (875,993 | ) | 160,569 | 435,454 | ||||||||
Revenue
We currently operate our business in Hong Kong and generate revenue primarily from the provision of event management and stage production services.
The table below sets forth a breakdown of our revenue for the six months ended December 31, 2025, 2024 and 2023:
| For the six months ended December 31, | ||||||||||||||||||||||||
| Service Type | 2025 | Percentage of total revenue (in %) | 2024 | Percentage of total revenue (in %) | 2023 | Percentage of total revenue (in %) | ||||||||||||||||||
| Event management services | $ | 2,488,183 | 77.2 | $ | 2,235,481 | 77.9 | $ | 2,267,221 | 77.5 | |||||||||||||||
| Stage production services | 734,252 | 22.8 | 633,013 | 22.1 | 659,357 | 22.5 | ||||||||||||||||||
| Total | $ | 3,222,435 | 100.0 | $ | 2,868,494 | 100.0 | $ | 2,926,578 | 100.0 | |||||||||||||||
For the six months ended December 31, 2025, our revenue was $3,222,435, representing an increase of $353,941, or approximately 12.3%, as compared to $2,868,494 for the six months ended December 31, 2024. We derived a significant portion of our total revenue from the provision of event management services, which contributed $2,488,183 or 77.2% of our total revenue and $2,235,481 or 77.9% of our total revenue for the six months ended December 31, 2025 and 2024, respectively. The increase of $252,702 or approximately 11.3% in revenue from the provision of event management services for the six months ended December 31, 2025 was primarily due to the gradual recovery of the local economy and increased corporate marketing activities, which resulted in a higher number of event management projects undertaken during the six months ended December 31, 2025 as compared to the corresponding period in 2024. Apart from providing event management services, we generated revenue from the provision of stage production services. During the six months ended December 31, 2025 and 2024, we recognized revenue of $734,252 or 22.8% of our total revenue and $633,013 or 22.1% of our total revenue from the provision of stage production services revenue, respectively. The increase of $101,239 or approximately 16.0% in revenue from the provision of stage production services for the six months ended December 31, 2025 was mainly attributable to the same reason resulting in the increase in provision of event management services.
For the six months ended December 31, 2024, our revenue was $2,868,494, representing a decrease of $58,084, or approximately 2.0%, as compared to $2,926,578 for the six months ended December 31, 2023. We derived a significant portion of our total revenue from the provision of event management services, which contributed $2,235,481 or 77.9% of our total revenue and $2,267,221 or 77.5% of our total revenue for the six months ended December 31, 2024 and 2023, respectively. The decrease of $31,740 or approximately 1.4% in revenue from the provision of event management services for the six months ended December 31, 2024 was primarily due to the downturn in the local economy, which significantly impacted our clients’ budgeting decisions and led to the cancellation of some non-festival events that were conducted in 2023. Fortunately, we secured several scalable new clients in 2024, and the festival events organized for these clients helped offset the negative effects of the economic downturn. Apart from providing event management services, we generated revenue from the provision of stage production services. During the six months ended December 31, 2024 and 2023, we recognized revenue from the provision of stage production services in the amount of $633,013 or 22.1% of our total revenue and $659,357 or 22.5% of our total revenue, respectively. The decrease of $26,344 or approximately 4.0% in revenue from the provision of stage production services for the six months ended December 31, 2024 was mainly attributable to the same reason resulting in the decrease in provision of event management services.
2
Cost of Revenue
For the six months ended December 31, 2025, 2024 and 2023, cost of revenue consists of the following:
| For the six months ended December 31, | ||||||||||||||||||||||||
| 2025 | Percentage of total cost of revenue (in %) | 2024 | Percentage of total cost of revenue (in %) | 2023 | Percentage of total cost of revenue (in %) | |||||||||||||||||||
| Purchase costs | $ | 1,251,058 | 43.6 | $ | 883,370 | 41.7 | $ | 972,929 | 44.0 | |||||||||||||||
| Labor costs | 682,487 | 23.8 | 362,619 | 17.1 | 389,414 | 17.6 | ||||||||||||||||||
| Subcontracting costs | 936,831 | 32.6 | 874,497 | 41.2 | 848,081 | 38.4 | ||||||||||||||||||
| Total | $ | 2,870,376 | 100.0 | $ | 2,120,486 | 100.0 | $ | 2,210,424 | 100.0 | |||||||||||||||
For the six months ended December 31, 2025, our cost of revenue was $2,870,376, representing an increase of $749,890 or 35.4%, as compared to $2,120,486 for the six months ended December 31, 2024. The increase was mainly attributable to the following reasons:
Purchase costs represented 43.6% and 41.7% of our total cost of revenue for the six months ended December 31, 2025 and 2024, respectively. Purchase costs cover transportation, equipment and supplies, furniture, materials, and consumables in the implementation of our event and exhibition projects. An increase of $367,688 or 41.6% for the six months ended December 31, 2025 was mainly due to the higher number and larger scale of event projects undertaken during the period, which required increased procurement of materials and equipment and higher logistics costs during the six months ended December 31, 2025.
Labor costs, including labor compensation and related benefits for our full-time and part-time staff, represented 23.8% and 17.1% of our total cost of revenue for the six months ended December 31, 2025 and 2024, respectively. An increase of $319,868 or 88.2% in labor costs for the six months ended December 31, 2025 was mainly due to the greater deployment of direct labor for the projects undertaken during the six months ended December 31, 2025, as compared to that of the six months ended December 31, 2024.
Subcontracting costs represented 32.6% and 41.2% of our total cost of revenue for the six months ended December 31, 2025 and 2024, respectively. Subcontracting costs cover services for the implementation of a part of our event and exhibition projects that we outsourced to external providers due to the need for specialized expertise or lack of internal capacities, including (i) event decoration cost such as backdrop printing, banner and other accessories; (ii) cost of hiring event MC, entertainers and performers such as dance group, DJs, singer, etc. to make the event program more unique and attractive; (iii) cost of hiring service personnel such as PRs and event advisers to ensure professionalism for the event; and (iv) event technology set up and media rental cost such as linking and supporting sound and light equipment, projection equipment, LED screens, computers and other IT tools for the best effect. An increase of $62,334 or 7.1% in subcontracting costs for the six months ended December 31, 2025 was mainly driven by the rising market wages and higher utilization of subcontracted specialized services during the six months ended December 31, 2025, as compared to the six months ended December 31, 2024.
For the six months ended December 31, 2024, our cost of revenue was $2,120,486, representing a decrease of $89,938 or 4.1%, as compared to $2,210,424 for the six months ended December 31, 2023. The decrease was mainly attributable to the following reasons:
Purchase costs represented 41.7% and 44.0% of our total cost of revenue for the six months ended December 31, 2024 and 2023, respectively. Purchase costs cover transportation, equipment and supplies, furniture, materials, and consumables in the implementation of our event and exhibition projects. A decrease of $89,559 or 9.2% in purchase costs for the six months ended December 31, 2024 was mainly due to higher purchase costs incurred on certain projects during the six months ended December 31, 2023. During the six months ended December 31, 2023, we strategically focused on expanding our event management services into the entertainment and sports sectors. In particular, during the same period, we obtained a relatively large-scale and complex project, namely, “S2O Hong Kong Songkran Music Festival”. Our projects during the six months ended December 31, 2023 were more sizable and complex, which required a greater supply of high-quality and functional high-end furniture and equipment, resulting in higher purchase costs incurred on these projects as compared to the smaller-scale projects we completed during six months ended December 31, 2024.
3
Labor costs, including labor compensation and related benefits for our full-time and part-time staff, represented 17.1% and 17.6% of our total cost of revenue for the six months ended December 31, 2024 and 2023, respectively. A decrease of $26,795 or 6.9% in labor costs for the six months ended December 31, 2024 was mainly due to the decrease in the average headcount of our direct labor from approximately 16 headcount during the six months ended December 31, 2023 to approximately 15 headcounts during the six months ended December 31, 2024.
Subcontracting costs represented 41.2% and 38.4% of our total cost of revenue for the six months ended December 31, 2024 and 2023, respectively. An increase of $26,416 or 3.1% in subcontracting costs for the six months ended December 31, 2024 was mainly driven by inflation. Subcontracting costs cover services for the implementation of a part of our event and exhibition projects that we outsourced to external providers due to the need for specialized expertise or lack of internal capacities, including (i) event decoration cost such as backdrop printing, banner and other accessories; (ii) cost of hiring event MC, entertainers and performers such as dance group, DJs, singer, etc. to make the event program more unique and attractive; (iii) cost of hiring service personnel such as PRs and event advisers to ensure professionalism for the event; and (iv) event technology set up and media rental cost such as linking and supporting sound and light equipment, projection equipment, LED screens, computers and other IT tools for the best effect.
Overall, the decrease in the cost of revenue was proportionately larger than the decrease in revenue, primarily because we managed several relatively large-scale and complex projects during the six months ended December 31, 2023, which necessitated higher cost inputs. These projects were not repeated in the six months ended December 31, 2024.
Gross Profit
For the six months ended December 31, 2025, our gross profit was $352,059, representing a decrease of $395,949, or 52.9%, as compared to $748,008 for the six months ended December 31, 2024. Our gross profit margin decreased from approximately 26.1% for the six months ended December 31, 2024 to 10.9% for the six months ended December 31, 2025. The decrease in our gross profit margin was mainly due to the increase in cost of revenue being proportionately larger than the increase in revenue, primarily because we experienced significant increases in direct labor costs and purchase costs associated with event execution, particularly due to higher staffing requirements and increased material and equipment costs for projects completed during the period, which were not fully passed on to customers.
For the six months ended December 31, 2024, our gross profit was $748,008, representing an increase of $31,854, or 4.4%, as compared to $716,154 for the six months ended December 31, 2023. Our gross profit margin increased from approximately 24.5% for the six months ended December 31, 2023 to 26.1% for the six months ended December 31, 2024. The increase in our gross margin was mainly due to the decrease in cost of revenue being proportionately larger than the decrease in revenue, primarily because we managed several relatively large-scale and complex projects during the six months ended December 31, 2023, which necessitated higher cost inputs. These projects were not repeated in the six months ended December 31, 2024.
Operating Expenses
Our operating expenses include general administrative expenses which comprise administrative staff costs, entertainment and traveling expenses, depreciation of property, plant and equipment, lease expenses, office expenses and legal and professional fees.
For the six months ended December 31, 2025, our general administrative expenses were $1,234,567, representing an increase of $715,295, or 137.7%, as compared to $519,272 for the six months ended December 31, 2024. This increase was mainly due to:
| ● | Share-based compensation constituted $590,991 or 51.6% and nil or nil of our general administrative expenses for the six months ended December 31, 2025 and 2024, respectively. The increase was mainly due to the grant of restricted stock units under the 2025 equity incentive plan and share options to employees for the six months ended December 31, 2025, while no restricted stock units and share options were granted to employees for the six months ended December 31, 2024. |
4
For the six months ended December 31, 2024, our general administrative expenses were $519,272, representing an increase of $298,441, or 135.1%, as compared to $220,831 for the six months ended December 31, 2023. This increase was mainly due to:
| ● | Administrative staff costs, comprising compensation, related benefits and recruitment expenses for our management and operating personnel, constituted $61,990 or 25.6% and $49,957 or 11.9% of our general administrative expenses for the six months ended December 31, 2024 and 2023, respectively, representing an increase of $12,033 or 24.1%. The increase was mainly due to the salary increment during the six months ended December 31, 2024 and the additional headcount of operating staff, as our average headcount increased from approximately 2 staff in the six months ended December 31, 2023 to approximately 3 staff in the six months ended December 31, 2024 to support our business growth. |
| ● | Legal and professional fees constituted $287,421 or 55.4% and $7,693 or 3.5% of our general administrative expenses for the six months ended December 31, 2024 and 2023, respectively, representing an increase of $279,728 or 3,636.1%. The increase was mainly due to the audit fee incurred during the initial public offering (“IPO”) application process. The legal and professional fees mainly represent secretarial fee, statutory audit fee and tax consultancy fee for filing of annual returns, the provision of audit reports and the submission of tax returns as required under the relevant Hong Kong laws and regulations for all companies operating in Hong Kong. We expect our legal and professional fees to increase over time, reflecting the higher costs of operating as a public company after the completion of the IPO. |
Other Income
Other income is comprised mainly of miscellaneous income, interest income on bank deposits and government grants received for financial support to our business.
For the six months ended December 31, 2025, our other income was $31,570, representing an increase of $30,493 or 2,831.3%, as compared to $1,077 for the six months ended December 31, 2024. This increase was mainly due to the increase in interest income on bank deposits as we obtained additional funding from our IPO during the six months ended December 31, 2025.
For the six months ended December 31, 2024 and 2023, other income was $1,077 and $957, respectively. The amount was insignificant for the six months ended December 31, 2024 and 2023.
Finance Costs
Finance costs are comprised of finance charges for finance leases and interest expense on interest-bearing bank borrowings.
For the six months ended December 31, 2025, finance costs were $17,514, representing an increase of $7,235 or approximately 70.4%, as compared to $10,279 for the six months ended December 31, 2024. The increase was mainly due to the addition of the two finance leases we entered into for the purchase of motor vehicles during the six months ended December 31, 2025.
For the six months ended December 31, 2024, finance costs were $10,279, representing a decrease of $2,487 or approximately 19.5%, as compared to $12,766 for the six months ended December 31, 2023. The decrease was mainly due to the change in the effective interest rates on bank borrowings.
Provision for Income Tax Expense
We operate our business in Hong Kong and are subject to the Hong Kong corporate income tax rate of 16.5% on income derived from Hong Kong.
For the six months ended December 31, 2025, 2024 and 2023, provision for income tax expense was $7,541, $58,965 and $48,060, respectively.
5
Net (Loss) Income
For the six months ended December 31, 2025, our net loss was $875,993, while our net income was $160,569 for the six months ended December 31, 2024, primarily due to the reasons discussed above.
For the six months ended December 31, 2024, our net income was $160,569, representing a decrease of $274,885 or 63.1%, as compared to a net income of $435,454 for the six months ended December 31, 2023, primarily due to the reasons discussed above.
Liquidity and Capital Resources
The following table summarizes the key cash flow components from our consolidated statements of cash flows for the periods indicated:
| Six Months Ended December 31, |
||||||||||||
| 2025 (unaudited) | 2024 (unaudited) | 2023 (unaudited) | ||||||||||
| Net Cash Provided By Operating Activities | 301,888 | 464,318 | 27,671 | |||||||||
| Net Cash Provided By (Used In) Investing Activities | 898 | — | (5,307 | ) | ||||||||
| Net Cash Provided By (Used In) Financing Activities | 5,281,004 | (523,223 | ) | (62,640 | ) | |||||||
| Effect of movements in exchange rates on cash held | 30,532 | 2,703 | 1,788 | |||||||||
| Net changes in cash | 5,614,322 | (56,202 | ) | (38,488 | ) | |||||||
| Cash at beginning of the period | 101,535 | 448,888 | 515,931 | |||||||||
| Cash at end of the period | $ | 5,715,857 | $ | 392,686 | $ | 477,443 | ||||||
Operating Activities
For the six months ended December 31, 2025
Net cash inflows from operating activities were $301,888 for the six months ended December 31, 2025. The difference between our net loss of $(875,993) and net cash inflows from operating activities was due to the adjustment of non-cash items in an aggregate amount of $671,344 and the cash generated in operating assets and liabilities in an aggregate amount of $506,537.
The adjustment of non-cash items was comprised of (i) depreciation of property, plant and equipment of $25,247; (ii) lease expenses of $36,749 for office premise and warehouse in Hong Kong; (iii) finance costs of $17,514 relating to the finance charges on finance leases and interest expense on bank borrowings; (iv) movement on deferred income tax of $418; (v) gain on disposal of property, plant and equipment of $(898); (vi) loss on lease modification of $1,323; and (vii) share-based compensation of $590,991.
The cash provided by operating assets and liabilities was mainly attributable to the (i) decrease in trade receivables of $104,656, mainly due to the increase in settlement from our customers closer to the end of the six months ended December 31, 2025, as compared to that of the fiscal year ended June 30, 2025; (ii) increase in deposits and prepayments of $(6,496), mainly resulting from the payment of refundable deposits during the period; (iii) decrease in contract assets of $171,343, mainly due to the increase in services provided billed to customers closer to the end of the six months ended December 31, 2025, as compared to that of the fiscal year ended June 30, 2025; (iv) increase in trade payables, other payables and accruals of $270,649, mainly due to the increase in the amount due to our vendors as more projects were completed near the period-end; and (v) decrease in income tax payable of $(11,144) due to payment of income tax for the period.
For the six months ended December 31, 2024
Net cash inflows from operating activities were $464,318 for the six months ended December 31, 2024. The difference between our net income of $160,569 and net cash inflows from operating activities was due to the adjustment of non-cash items in an aggregate amount of $69,253 and the cash generated in operating assets and liabilities in an aggregate amount of $234,496.
The adjustment of non-cash items was comprised of (i) depreciation of property, plant and equipment of $23,468; (ii) lease expenses of $35,214 for office premise and warehouse in Hong Kong; (iii) finance costs of $10,279 relating to the finance charges on finance leases and interest expense on bank borrowings; and (iv) movement on deferred income tax of $292.
6
The cash provided by operating assets and liabilities was mainly attributable to the (i) increase in trade receivables of $(191,795), mainly due to more event projects were completed near the period-end for which payment was due in the following period; (ii) increase in deposits and prepayments of $(158,486), mainly resulting from the payment of certain prepaid services during the period; (iii) increase in contract assets of $(174,883), mainly due to the increase in services provided but not yet billed to customers closer to the end of the six months ended December 31, 2024, as compared to that of the fiscal year ended June 30, 2024; (iv) increase in trade payables, other payables and accruals of $522,703, mainly due to the increase in the amount due to our vendors as more projects were completed near the period-end; (v) increase in income tax payable of $58,672, which represented the provision amount for income tax on our taxable income for the period; and (vi) decrease in amounts due with related parties of $203,955, which represented repayments made by related parties during the period.
For the six months ended December 31, 2023
Net cash inflows from operating activities were $27,671 for the six months ended December 31, 2023. The difference between our net income of $435,454 and net cash inflows from operating activities was due to the adjustment of non-cash items in an aggregate amount of $52,283 and the cash used in operating assets and liabilities in an aggregate amount of $(460,066).
The adjustment of non-cash items was comprised of (i) depreciation of property, plant and equipment of $24,064; (ii) lease expenses of $15,304 for office premise and warehouse in Hong Kong; (iii) finance costs of $8,597 relating to the finance charges on finance leases and interest expense on bank borrowings; and (iv) movement on deferred income tax of $149.
The cash used in operating assets and liabilities was mainly attributable to the (i) increase in trade receivables of $(689,224), mainly due to more event projects were completed near the period-end for which payment was due in the following period; (ii) increase in deposits and prepayments of $(130,344), mainly resulting from the payment of certain prepaid services during the period; (iii) increase in contract assets of $(53,236), mainly due to the increase in services provided but not yet billed to customers closer to the end of the six months ended December 31, 2023, as compared to that of the fiscal year ended June 30, 2023; (iv) increase in trade payables, other payables and accruals of $545,198, mainly due to the increase in the amount due to our vendors as more projects were completed near the period-end; (v) increase in income tax payable of $47,911, which represented the provision amount for income tax on our taxable income for the period; and (vi) increase in amounts due with related parties of $(156,636), which represented expense paid on behalf of our related parties.
Investing Activities
Net cash inflows from investing activities were $898 for the six months ended December 31, 2025, which was due to receipt of proceeds from disposal of property, plant and equipment of $898 during the period.
Net cash outflows from investing activities were $nil for the six months ended December 31, 2024
Net cash outflows from investing activities were $5,307 for the six months ended December 31, 2023, which was due to (i) payment of $3,708 for the purchase of property, plant and equipment; and (ii) cash outflow related to the disposal of BU Production Limited, the then 50% owned subsidiary of BU Workshop, on September 23, 2023 of $1,599.
Financing Activities
Net cash inflows from financing activities were $5,281,004 for the six months ended December 31, 2025, which was attributable to the (i) repayment of loan payables of $(180,000); (ii) repayment of bank borrowings of $(57,440) in relation to the term loans with a bank in Hong Kong; (iii) payment of finance lease liabilities of $(36,838) related to the hire purchase financing for our motor vehicles; (iv) proceeds from issuance of ordinary shares pursuant to the IPO, net of offering costs of $5,804,648; and (v) payments of offering costs related to the IPO of $(249,366) during the six months ended December 31, 2025.
Net cash outflows from financing activities were $(523,223) for the six months ended December 31, 2024, which was attributable to the (i) payments of a dividend to shareholders of $(508,205); (ii) proceeds from loans payables of $180,000; (iii) repayment of bank loan payables of $(60,941) in relation to the term loans with a bank in Hong Kong; (iv) payment of finance lease liabilities of $(14,108) related to the hire purchase financing for our motor vehicles; and (v) payments of offering costs related to the IPO of $(119,969) during the six months ended December 31, 2024.
Net cash outflows from financing activities were $(62,640) for the six months ended December 31, 2023, which was attributable to the (i) repayment of bank loan payables of $(48,591) in relation to the term loans with a bank in Hong Kong; and (ii) payment of finance lease liabilities of $(14,049) related to the hire purchase financing for our motor vehicles.
7
Off-Balance Sheet Arrangements
As of December 31, 2025 and June 30, 2025, we had no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to our shareholders.
Quantitative And Qualitative Disclosures About Market Risk
Inflation Risk
Inflationary factors, such as increases in personnel and overhead costs, could impair our operating results. Although we do not believe that inflation has had a material impact on our financial position or results of operations to date, a high rate of inflation in the future may have an adverse effect on our ability to maintain current levels of gross margin and operating expenses as a percentage of sales revenue if the revenues do not increase with such increased costs.
Credit Risk
Credit risk is controlled by the application of credit approvals, limits and monitoring procedures. We manage credit risk through regularly evaluating the collectability of financial assets, based on a combination of factors such as credit worthiness, past transaction history, current economic industry trends and changes in payment patterns. We identify credit risk collectively based on industry and customer type. In measuring the credit risk of our sales to our customers, we mainly reflect the “probability of default” by the customer on its contractual obligations and consider the current financial position of the customer and the current and likely future exposures to the customer.
Liquidity Risk
We are also exposed to liquidity risk, which is risk that we will be unable to provide sufficient capital resources and liquidity to meet our commitments and business needs. Liquidity risk is controlled by the application of financial position analysis and monitoring procedures. To manage liquidity risk, the Company monitors and maintains a level of cash and cash equivalents deemed adequate by the management to finance the Company’s operations and mitigate the effects of fluctuations in cash flows.
8