Neo-Concept posts roughly HKD9.1M H1 2026 loss
The six-month period ended with a HKD9.1 million loss as operating expenses rose and operations used cash.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Neo-Concept International Group Holdings Ltd (NCI) reported first-half 2026 results for the six months ended June 30, 2026, with revenue of approximately HKD55.8 million, down approximately 7.3% from HKD60.2 million for the six months ended June 30, 2025. Gross profit was HKD22.5 million versus HKD25.8 million. NCI recorded a net loss of approximately HKD9.1 million, compared with net income of approximately HKD2.0 million, and basic and diluted loss per share of HKD4.71 versus income per share of HKD4.01.
Selling, general and administrative expenses increased approximately 40% to HKD33.0 million from HKD23.5 million; NCI attributed the increase mainly to staff costs and a higher provision for expected credit losses. Operating activities used HKD44.8 million in cash, compared with HKD3.4 million generated in the prior-year period. Cash and cash equivalents were HKD10.1 million (USD1.3 million) as of June 30, 2026, compared with HKD2.3 million as of December 31, 2025.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- None.
Negative
- Major pointNet loss: approximately HKD9.1 million, versus approximately HKD2.0 million income.
- Major pointOperating cash use: HKD44.8 million, versus HKD3.4 million generated.
- Moderate pointRevenue fell approximately 7.3% to HKD55.8 million in first-half 2026.
- Moderate pointSG&A rose approximately 40% to HKD33.0 million.
Filing Explained
At June 30, 2026, a HKD 67,116,925 balance due from a company controlled by NCI’s controlling shareholder had no specific repayment terms.
NCI furnishes unaudited results for the six months ended
At
This related-party balance was
Key Figures
Key Terms
expected credit losses financial
weighted average number of ordinary shares financial
operating lease liabilities financial
fair value option financial
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What was NCI’s revenue in the first half of 2026?
Did NCI make a profit in the first half of 2026?
How much did NCI raise in its February 2026 share placement?
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For
the month of October,
Commission
File Number:
(Registrant’s Name)
Kwun Tong
(Address of Principal Executive Offices)
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
Form 20-F ☒ Form 40-F ☐
Financial Statements and Exhibits.
The following exhibits are being filed herewith:
Exhibit No. |
Description | |
| 99.1 | Neo-Concept International Group Holdings Limited Announces First Half 2026 Unaudited Financial Results |
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.
|
Neo-Concept International Group Holdings Limited | |
| Date: October 30, 2026 | By: | /s/ Pengfei Jiang |
| Name: | Pengfei Jiang | |
| Title: | Chief Executive Officer and Chairman of the Board | |
2
Exhibit 99.1
Neo-Concept International Group Holdings Limited Announces First Half 2026 Unaudited Financial Results
Hong Kong, October 30, 2026 (GLOBE NEWSWIRE) – Neo-Concept International Group Holdings Limited (“NCI” or the “Company”) (NASDAQ: NCI), today announced its unaudited financial results for the six months ended June 30, 2026.
Overview:
| ● | Revenue was approximately HKD55.8 million (USD7.1 million) for the six months ended June 30, 2026, representing a decrease of approximately 7.3% from the same period in 2025. |
| ● | Net loss was approximately HKD9.1 million (USD1.16 million) for the six months ended June 30, 2026 (2025: net income approximately HKD2.0 million). |
Six Month Financial Results Ended June 30, 2026
Revenue. Revenue decreased by approximately 7.3% from approximately HKD60.2 million for the six months ended June 30, 2025, to approximately HKD55.8 million (approximately USD7.1 million) for the six months ended June 30, 2026. The decrease was mainly caused by the decrease in sales of private-labelled apparel products by 12.2% to HKD28.7 million (approximately USD3.6 million) for the six months ended June 30, 2026, from HKD32.7 million for the six months ended June 30, 2025 and the decrease in retail sales of owned-branded apparel products, by approximately 1.8% from approximately HKD27.5 million for the six months ended June 30, 2025, to approximately HKD 27.0 million for the six months ended June 30, 2026.
Selling, general and administrative expenses. Selling, general and administrative expenses increased by approximately 40% from approximately HKD23.5 million for the six months ended June 30, 2025 to approximately HKD33 million (USD4.2 million) for the six months ended June 30, 2026, which was mainly due to (i) increase in staff costs from increase in payroll to our staff, (ii) increase in provision for expected credit losses on trade receivables, offset by (iii) decrease in legal and professional fee as no accounting service fee was incurred during the period.
Other income, net. Other income increased by approximately 21.0% from approximately HKD 0.7 million for the six months ended June 30, 2025 to approximately HKD 0.8 million (approximately USD 0.1 million) for the six months ended June 30, 2026. The primary reason for the increase was the company receive the funding from the “Technology Voucher Programme” issued by the Hong Kong Government.
Income tax credit (expense). Income tax credit was HKD 0.5 million for the six months ended June 30, 2026 (six months ended June 30, 2025: Income tax expense of HKD 0.9 million) primarily due to the reversal of deferred tax expenses for provision of expected credit loss and depreciation allowance.
Net income (loss). Net income decreased from approximately HKD 2 million for the six months ended June 30,2025 to net loss of approximately HKD 9.1 million (USD1.2 million) for the six months ended June 30, 2026, The decrease was mainly due to the increase in selling, general and administrative expenses.
Basic and diluted EPS. Basic and diluted EPS were approximately loss per share of HKD 4.71 (USD0.6) per ordinary share for the six months ended June 30, 2026, as compared to income per share of HKD 4.01 per ordinary share for the six months ended June 30, 2025, respectively.
- END -
About Neo-Concept International Group Holdings Limited
Neo-Concept International Group Holdings Limited (“NCI”) is a one-stop apparel solution services provider. It offers a full suite of services in the apparel supply chain, including market trend analysis, product design and development, raw material sourcing, production and quality control, and logistics management serving customers located in the European and North American markets. It also sells its own branded apparel products under the brand “Les 100 Ciels” through retail stores in UK as well as the e-commerce platform www.les100ciels.com.
NCI is committed to reducing its environmental impact through recycling, clean processes, traceable sourcing and other eco-friendly practices. It also pushes for sustainable solutions to fulfil its customers’ needs throughout garment production. For more information, visit the Company’s website at www.neo-ig.com.
Exchange Rate Information
This announcement contains translations of certain HKD amounts into U.S. dollars (“USD”) at specified rates solely for the convenience of the reader. Unless otherwise stated, all translations from HKD to USD were made at the rate of HKD 7.8420 to USD1.00, the exchange rate on June 30, 2026, set forth in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the HKD or USD amounts referred could be converted into USD or HKD, as the case may be, at any particular rate or at all.
SAFE HARBOR STATEMENTS
Certain statements in this announcement are forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties and are based on the Company’s current expectations and projections about future events that the Company believes may affect its financial condition, results of operations, business strategy and financial needs. Investors can identify these forward-looking statements by words or phrases such as “may,” “will,” “expect,” “anticipate,” “aim,” “estimate,” “intend,” “plan,” “believe,” “is/are likely to,” “potential,” “continue” or other similar expressions. The Company undertakes no obligation to update or revise publicly any forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and the Company cautions investors that actual results may differ materially from the anticipated results and encourages investors to review other factors that may affect its future results in the Company’s registration statement and other filings with the SEC, which are available for review at www.sec.gov.
Enquiries:
Neo-Concept International Group Holdings Limited Investor Relations Contact:
10/F, Seaview Centre
No.139-141 Hoi Bun Road
Kwun Tong, Kowloon, Hong Kong
(+852) 2798-8639
Email: ir@neo-ig.com
NEO-CONCEPT
INTERNATIONAL GROUP HOLDINGS LIMITED AND ITS SUBSIDIARIES
INDEX TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
| Page | ||
| Consolidated Balance Sheet as of December 31, 2025 and Unaudited Interim Condensed Consolidated Balance Sheet as of June 30, 2026 | F-2 | |
| Unaudited Interim Condensed Consolidated Statements of Income and Comprehensive Income for the Six Months Ended June 30, 2025 and 2026 | F-3 | |
| Unaudited Interim Condensed Consolidated Statements of Changes of Shareholders’ Equity for the Six Months Ended June 30, 2025 and 2026 | F-4 | |
| Unaudited Interim Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2025 and 2026 | F-5 | |
| Notes to Unaudited Interim Condensed Consolidated Financial Statements | F-6 |
F-1
NEO-CONCEPT
INTERNATIONAL GROUP HOLDINGS LIMITED AND ITS SUBSIDIARIES
INTERIM CONDENSED CONSOLIDATED BALANCE
SHEETS
AS OF DECEMBER 31, 2025 AND JUNE 30, 2026
| As of December 31, | As of June 30, | |||||||||||
| 2025 | 2026 | 2026 | ||||||||||
| HKD | HKD | USD | ||||||||||
| (Audited) | (Unaudited) | |||||||||||
| ASSETS | ||||||||||||
| CURRENT ASSETS | ||||||||||||
| Cash and cash equivalents | ||||||||||||
| Accounts receivable, net | ||||||||||||
| Prepayment and other current assets | ||||||||||||
| Prepayment – related party | ||||||||||||
| Inventories, net | ||||||||||||
| Total current assets | ||||||||||||
| NON-CURRENT ASSETS | ||||||||||||
| Property and equipment, net | ||||||||||||
| Right-of-use assets, net | ||||||||||||
| Intangible assets, net | ||||||||||||
| Investment in a joint venture | ||||||||||||
| Other non-current assets, net | ||||||||||||
| Deferred tax assets | ||||||||||||
| Total non-current assets | ||||||||||||
| Total assets | ||||||||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||
| CURRENT LIABILITIES | ||||||||||||
| Bank borrowings | ||||||||||||
| Accruals and other payables | ||||||||||||
| Due to related parties | ||||||||||||
| Operating lease liabilities | ||||||||||||
| Tax payable | ||||||||||||
| Total current liabilities | ||||||||||||
| NON-CURRENT LIABILITIES | ||||||||||||
| Operating lease liabilities | ||||||||||||
| Deferred tax liabilities | ||||||||||||
| Total non-current liabilities | ||||||||||||
| Total liabilities | ||||||||||||
| COMMITMENTS AND CONTINGENCIES | ||||||||||||
| SHAREHOLDERS’ EQUITY | ||||||||||||
| Class A Ordinary shares US$ | ||||||||||||
| Class B Ordinary shares, US$ | ||||||||||||
| Additional paid-in capital | ||||||||||||
| Accumulated other comprehensive income | ||||||||||||
| Accumulated losses | ( | ) | ( | ) | ( | ) | ||||||
| Total shareholders’ equity | ||||||||||||
| Total liabilities and shareholders’ equity | ||||||||||||
| * |
The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
F-2
NEO-CONCEPT
INTERNATIONAL GROUP HOLDINGS LIMITED AND ITS SUBSIDIARIES
UNAUDITED INTERIM CONDENSED CONSOLIDATED
STATEMENTS OF INCOME AND
COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED JUNE 30, 2025
AND 2026
| For the six months ended June 30, | ||||||||||||
| 2025 | 2026 | 2026 | ||||||||||
| HKD | HKD | USD | ||||||||||
| REVENUES, NET | ||||||||||||
| COST OF REVENUES | ||||||||||||
| – Related party | ( | ) | ( | ) | ( | ) | ||||||
| – External | ( | ) | ( | ) | ( | ) | ||||||
| ( | ) | ( | ) | ( | ) | |||||||
| Gross profit | ||||||||||||
| EXPENSES | ||||||||||||
| Selling and marketing | ( | ) | ( | ) | ( | ) | ||||||
| General and administrative: | ||||||||||||
| Lease expenses – related party | ( | ) | ( | ) | ( | ) | ||||||
| Depreciation | ( | ) | ( | ) | ( | ) | ||||||
| Amortization | ( | ) | ( | ) | ( | ) | ||||||
| Staff cost | ( | ) | ( | ) | ( | ) | ||||||
| Leases expenses | ( | ) | ( | ) | ( | ) | ||||||
| Professional fee | ( | ) | ( | ) | ( | ) | ||||||
| Impairment on inventories | ( | ) | ( | ) | ( | ) | ||||||
| Reversal of (provision for) expected credit losses | ( | ) | ( | ) | ||||||||
| Others | ( | ) | ( | ) | ( | ) | ||||||
| Total expenses | ( | ) | ( | ) | ( | ) | ||||||
| INCOME (LOSS) FROM OPERATION | ( | ) | ( | ) | ||||||||
| OTHER INCOME (EXPENSES) | ||||||||||||
| Interest expense, net | ( | ) | ( | ) | ( | ) | ||||||
| Change in fair value of investment in a joint venture | ||||||||||||
| Agency income – related party | ||||||||||||
| Other income | ||||||||||||
| Other expense | ( | ) | ( | ) | ( | ) | ||||||
| Total other income, net | ||||||||||||
| INCOME (LOSS) BEFORE TAX EXPENSES | ( | ) | ( | ) | ||||||||
| INCOME TAX (EXPENSES) CREDIT | ( | ) | ||||||||||
| NET INCOME (LOSS) | ( | ) | ( | ) | ||||||||
| FOREIGN CURRENCY TRANSLATION ADJUSTMENT | ( | ) | ( | ) | ( | ) | ||||||
| TOTAL COMPREHENSIVE INCOME (LOSS) | ( | ) | ( | ) | ||||||||
| Weighted average number of ordinary shares: | ||||||||||||
| Basic and diluted* | ||||||||||||
| EARNINGS PER SHARE – BASIC AND DILUTED | ( | ) | ( | ) | ||||||||
| * |
The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
F-3
NEO-CONCEPT
INTERNATIONAL GROUP HOLDINGS LIMITED AND ITS SUBSIDIARIES
UNAUDITED INTERIM CONDENSED STATEMENTS
OF CHANGES OF SHAREHOLDERS’ EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 2025 AND 2026
| Class A Ordinary shares | Class B Ordinary shares | Additional | Accumulated other | Total | ||||||||||||||||||||||||||||
| no. of shares* | Par value | no. of shares* | Par value | paid-in capital | comprehensive income | Accumulated losses | shareholders’ (deficit) equity | |||||||||||||||||||||||||
| HKD | HKD | HKD | HKD | HKD | HKD | |||||||||||||||||||||||||||
| BALANCE, January 1, 2025 | ( | ) | ||||||||||||||||||||||||||||||
| Net income | — | — | ||||||||||||||||||||||||||||||
| Foreign currency translation | — | — | — | — | — | ( | ) | — | ( | ) | ||||||||||||||||||||||
| BALANCE, June 30, 2025 | ( | ) | ||||||||||||||||||||||||||||||
| BALANCE, January 1, 2026 | ( | ) | ||||||||||||||||||||||||||||||
| Proceeds from shares placement | — | — | — | — | ||||||||||||||||||||||||||||
| Net loss | — | — | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Foreign currency translation | — | — | — | ( | ) | ( | ) | |||||||||||||||||||||||||
| BALANCE, June 30, 2026 | ( | ) | ||||||||||||||||||||||||||||||
| BALANCE, June 30, 2026 (USD) | ( | ) | ||||||||||||||||||||||||||||||
| * |
The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
F-4
NEO-CONCEPT
INTERNATIONAL GROUP HOLDINGS LIMITED AND ITS SUBSIDIARIES
UNAUDITED INTERIM CONDENSED STATEMENTS
OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2025 AND 2026
| For the six months ended June 30, | ||||||||||||
| 2025 | 2026 | 2026 | ||||||||||
| HKD | HKD | USD | ||||||||||
| Cash flows from operating activities | ||||||||||||
| Net income (loss) | ( | ) | ( | ) | ||||||||
| Adjustments to reconcile net income (loss) to net cash provided by operating activities | ||||||||||||
| Depreciation of property and equipment | ||||||||||||
| Amortization of intangible assets | ||||||||||||
| (Reversal of) provision for expected credit loss | ( | ) | ||||||||||
| Change in fair value of investment in a joint venture | ( | ) | ||||||||||
| Inventory provision | ||||||||||||
| Deferred tax expense / (credit) | ( | ) | ( | ) | ||||||||
| Changes in operating assets and liabilities | ||||||||||||
| Accounts receivable | ||||||||||||
| Prepayment and other current assets | ( | ) | ||||||||||
| Prepayment - related party | ( | ) | ( | ) | ( | ) | ||||||
| Tax recoverable | ( | ) | ||||||||||
| Inventories | ( | ) | ||||||||||
| Accruals and other payables | ||||||||||||
| Tax payable | ( | ) | ( | ) | ||||||||
| Cash generated from (used in) operating activities | ( | ) | ( | ) | ||||||||
| Cash flows from investing activities | ||||||||||||
| Purchase of property and equipment | ( | ) | ( | ) | ( | ) | ||||||
| Advanced to a joint venture | ( | ) | ||||||||||
| Cash used in investing activities | ( | ) | ( | ) | ( | ) | ||||||
| Cash flows from financing activities | ||||||||||||
| Proceeds from bank borrowings | ||||||||||||
| Repayment of bank borrowings | ( | ) | ( | ) | ( | ) | ||||||
| Proceeds from share placing | ||||||||||||
| Advance from related parties | ||||||||||||
| Repayment to related parties | ( | ) | ( | ) | ( | ) | ||||||
| Cash (used in) generated from financing activities | ( | ) | ||||||||||
| Net (decrease) increase in cash and cash equivalents | ( | ) | ||||||||||
| Effect of foreign currency translation on cash and cash equivalents | ( | ) | ||||||||||
| Cash and cash equivalents at the beginning of the period | ||||||||||||
| Cash and cash equivalents at the end of the period | ||||||||||||
| Supplementary cash flow information | ||||||||||||
| Interest received | ||||||||||||
| Interest paid | ( | ) | ( | ) | ( | ) | ||||||
| Cash paid for operating leases | ( | ) | ( | ) | ||||||||
| Operating lease right-of-use assets obtained in exchange for operating lease liabilities | ||||||||||||
| Tax paid | ||||||||||||
The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
F-5
NEO-CONCEPT
INTERNATIONAL GROUP HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
| 1. | ORGANIZATION AND PRINCIPAL ACTIVITIES |
Business
Neo-Concept International Group Holdings Limited (“We”, “us”, “Our”, “our Company”, the “Company” or “NCI”), through its wholly-owned subsidiaries is engaged in one-stop apparel solution services, offering a full suite of services in the apparel supply chain, including market trend analysis, product design and development, raw material sourcing, production and quality control, and logistics management serving the European, and North American markets. In addition, we sell apparel products in the United Kingdom (“UK”) under the licensed brand “Les 100 Ciels” through our retail stores since 2000 and we started to sell apparel products in the United Arab Emirates (“UAE”) under the licensed brand “Les 100 Ciels” through our retail store in 2025 . NCI and its subsidiaries are thereafter referred as the “Group” hereafter.
Organization and reorganization
NCI, incorporated in July 2021 under the laws of the Cayman Islands, is the holding company of our Group.
Neo-Concept
Apparel Group Limited (“NCA”), a British Virgin Islands (“BVI”) business company
limited by shares incorporated in August 2008, is the immediate holding company of Neo-Concept
International Company Limited (“Neo-Concept HK”). The equity interest of NCA was ultimately held
as to
Neo-Concept HK, a company incorporated in Hong Kong with limited liability in October 1992, is the immediate holding company of Neo-Concept (UK) Limited, and is our operating subsidiary in Hong Kong.
Neo-Concept (UK) Limited (“Neo-Concept UK”), a company incorporated in the UK with limited liability in August 2000, is a direct wholly owned subsidiary of Neo-Concept HK, and is our operating subsidiary in the UK.
Pursuant
to a group reorganization (the “Group Reorganization”) to rationalize the structure of the Company
and its subsidiary companies in preparation for the listing of our shares, the Company became the holding
company of the Group on October 29, 2021, which involved the transfer of
On
March 3, 2025, the Company held an Extraordinary General Meeting and approved the authorized share capital of
the Company shall be re-classified by re-classifying
On
June 16, 2025, the Company effected a share consolidation at a ratio of 5-to-1. As a result of the share
consolidation, the Company now have
On
February 9, 2026, the Company entered into securities purchase agreements with several investors and a
placement agency agreement with D. Boral Capital LLC (lead placement agent) and uSmart Securities Limited
(joint placement agent), pursuant to which the Company agreed to issue and sell
Gross
proceeds were approximately USD
On
May 18, 2026, the Company effected a share consolidation at a ratio of 8-to-1. As a result of the share
consolidation, the Company now has
F-6
NEO-CONCEPT
INTERNATIONAL GROUP HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
| 1. | ORGANIZATION AND PRINCIPAL ACTIVITIES (cont.) |
At the date of this report, details of the subsidiary companies are as follows:
| Name | Background | Ownership | ||
| Neo-Concept Apparel Group Limited (“NCA”) | ● A BVI company ● Incorporated in August 2008 ● Issued Share Capital of USD100 ● Intermediate holding company | |||
| Neo-Concept International Company Limited (“Neo-Concept HK”) | ● A Hong Kong company ● Incorporated in October 1992 ● Issued Share Capital of HKD100,000 ● Provision of one-stop apparel solution services | |||
| Neo-Concept (UK) Limited | ● A UK company ● Incorporated in August 2000 ● Issued Share Capital of GBP100 ● Provision of online and offline retail sales of apparel products | |||
| Neo-Concept Exquisite Couture Limited (“NCEC”) | ● A BVI company ● Incorporated in May 2024 ● Issued Share Capital of USD100 ● Investment holdings | |||
| NC Asia International Company Limited (“NCAIL”) | ● A Hong Kong company ● Incorporated in April 2026 ● Issued Share Capital of HKD 10,000 ● Provision of online and offline sales of apparel products | |||
| NC ASIA Investment Company Limited (“NCAIS”) | ● A Hong Kong company ● Incorporated in April 2026 ● Issued Share Capital of HKD 10,000 ● Intermediate holding company | |||
| Neo-Concept Elite Fashion Co., LLC (“NCEF”) | ● A UAE company ● Incorporated in May 2024 ● Issued Share Capital of AED100,000 ● Investment holdings |
| 2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES |
Basis of presentation
The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) for information pursuant to the rules and regulations of the Securities and Exchange Commission.
The unaudited interim condensed consolidated financial statements do not include all the information and footnotes required by the U.S. GAAP for complete financial statements. Certain information and note disclosures normally included in the annual financial statements prepared in accordance with the U.S. GAAP have been condensed or omitted consistent with Article 10 of Regulation S-X. In the opinion of the Company’s management, the unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited financial statements and include all adjustments, in normal recurring nature, as necessary for the fair statement of the Company’s financial position as of June 30, 2026, and results of operations and cash flows for the six-month periods ended June 30, 2025 and 2026. The audited consolidated balance sheet as of December 31, 2025 has been derived from the audited financial statements at that date but does not include all the information and footnotes required by the U.S. GAAP. Interim results of operations are not necessarily indicative of the results expected for the full fiscal year or for any future period. These financial statements should be read in conjunction with the audited consolidated financial statements as of and for the years ended December 31, 2024 and 2025, and related notes included in the Company’s audited consolidated financial statements.
Principles of consolidation
The unaudited interim condensed consolidated financial statements include the financial statements of the Company and its subsidiaries. All transactions and balances between the Company and its subsidiaries have been eliminated upon consolidation.
F-7
NEO-CONCEPT
INTERNATIONAL GROUP HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
| 2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES (cont.) |
Use of estimates and assumptions
The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The most significant estimates relate to allowance for uncollectible accounts receivable, inventory valuation, useful lives and impairment for property, plant and equipment, valuation allowance for deferred tax assets, fair value of financial instruments and contingencies. Actual results could vary from the estimates and assumptions that were used.
Functional currency and foreign currency translation
We use Hong Kong dollars (“HKD”) as our reporting currency. The functional currency of the Company and its subsidiaries incorporated in the Cayman Islands and BVI is the United States dollar (“USD”), the functional currency of its Hong Kong subsidiaries are the Hong Kong dollar (the “HKD”), the functional currency of its UK subsidiary is the Pound Sterling (“GBP”), and the functional currency of its UAE joint venture is United Arab Emirates Dirham (the “AED”). The determination of the respective functional currency is based on the criteria of Accounting Standards Codification (“ASC”) 830, Foreign Currency Matters.
Transactions denominated in currencies other than functional currency are translated into functional currency at the exchange rates quoted by authoritative banks prevailing at the dates of the transactions. Exchange gains and losses resulting from those foreign currency transactions denominated in a currency other than the functional currency are recorded as other income (expense), net in the unaudited interim condensed consolidated statements of comprehensive income.
The financial statements of the Group are translated from the functional currency into HKD. Assets and liabilities are translated at the exchange rates at the balance sheet date. Equity accounts other than earnings generated in the current period are translated into HKD using the appropriate historical rates. Revenues and expenses, gains and losses are translated into HKD using the periodic average exchange rate for the period. Translation adjustments are reported as foreign currency translation adjustments and are shown as a component of other comprehensive income (loss) in the unaudited interim condensed consolidated statements of comprehensive income.
Convenience translation
Translations
of amounts in the unaudited interim condensed consolidated balance sheet, consolidated statements of income
(loss) and consolidated statements of cash flows from HKD into USD as of and for the six months ended June 30,
2026, are solely for the convenience of the reader and were calculated at the noon buying rate of USD1 =
HKD
F-8
NEO-CONCEPT
INTERNATIONAL GROUP HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
| 2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES (cont.) |
Cash and cash equivalents
We consider all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.
Accounts receivable and allowance for expected credit loss
Accounts receivable, net are stated at the original amount less an allowance for expected credit loss on such receivables. The allowance for expected credit losses is estimated based upon our assessment of various factors including historical experience, the age of the accounts receivable balances, current general economic conditions, future expectations and customer specific quantitative and qualitative factors that may affect our customers’ ability to pay. An allowance is also made when there is objective evidence for us to reasonably estimate the amount of probable loss. The Company regularly reviews the adequacy and appropriateness of the allowance for expected credit losses. The receivables are written off after all collection efforts have ceased.
Other non-current assets, net
Other non-current assets are rental deposits.
Prepayment and other current assets
Prepayment and other current assets, net primarily include prepayments to suppliers and others.
Inventories, net
Inventories, representing finished goods for sales, are stated at the lower of cost or net realizable value, using the weighted average method. We evaluate the need for impairment associated with obsolete, slow-moving, and non-saleable inventory by reviewing net realizable values on a periodic basis but at least annually. Only defective products are eligible for returning to our materials suppliers.
Property and equipment, net
Property and equipment are stated at cost less accumulated depreciation and any impairment losses. Major renewals, betterments, and improvements are capitalized to the asset accounts while replacements, maintenance, and repairs, which do not improve or extend the lives of the respective assets, are expensed to operations. At the time property and equipment are retired or otherwise disposed of, the asset and related accumulated depreciation or amortization accounts are relieved of the applicable amounts. Gains or losses from retirements or sales are credited or charged to operations.
F-9
NEO-CONCEPT
INTERNATIONAL GROUP HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
| 2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES (cont.) |
We depreciate property and equipment using the straight-line method as follows:
| Leasehold improvement | Over the shorter of the terms of leases or 5 years when the renewal of leases is unconditional | |
| Furniture, fixtures, and office equipment |
Intangible assets, net
Intangible
assets are primarily purchased from third parties and Neo-Concept (Holdings) Company Limited, a company
controlled by Ms. Siu. Purchased intangible assets are initially recognized and measured at cost upon
acquisition.
| Computer software – Point-of-sale system | ||||
| Trademarks – brand name |
Impairment for long-lived assets
Long-lived
assets, representing property and equipment and intangible assets with finite lives are reviewed for
impairment whenever events or changes in circumstances (such as a significant adverse change to market
conditions that will impact the future use of the assets) indicate that the carrying value of an asset may not
be recoverable. We assess the recoverability of the assets based on the undiscounted future cash flows the
assets are expected to generate and recognize an impairment loss when estimated undiscounted future cash flows
expected to result from the use of the asset plus net proceeds expected from disposition of the asset, if any,
are less than the carrying value of the asset. If an impairment is identified, we would reduce the carrying
amount of the asset to its estimated fair value based on a discounted cash flows approach or, when available
and appropriate, to comparable market values. As of December 31, 2025 and June 30, 2026,
Investment in equity investees
Equity investment represents the Company’s investment in privately held company. If it is determined that the Company has significant influence but does not own a majority equity interest or otherwise control over the equity investee, the equity method of accounting is used. Under this method, the investment, originally recorded at cost, is adjusted to recognize share of results of the equity investee as they occur, with losses limited to the extent of interest in the equity investee. The Company has elected the fair value option allowed by ASC 825-10-15-4 Financial Instruments, for its equity method investments because management believes this approach will better reflect the economics of its equity interest. Under the fair value option, the investment is remeasured at fair value (level 3) at each reporting period, if any, recorded in income statement.
Fair value measurement
The accounting standard regarding fair value of financial instruments and related fair value measurements defines financial instruments and requires disclosure of the fair value of financial instruments held by us.
F-10
NEO-CONCEPT
INTERNATIONAL GROUP HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
| 2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES (cont.) |
The accounting standards define fair value, establish a three-level valuation hierarchy for disclosures of fair value measurement and enhance disclosure requirements for fair value measures. The three levels are defined as follow:
Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.
Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments.
Level 3 inputs to the valuation methodology are unobservable and significant to the fair value.
Unless otherwise disclosed, fair values of the Company’s other financial instruments including cash and cash equivalents, accounts receivable, net, other current assets, amounts due from a joint venture, amounts due to related parties, accruals and other payables, tax recoverable, tax payable are approximated to their recorded values due to their short-term maturities.
Accruals and other payables
Accruals and other payables primarily include payroll payable, interest payable, accrued expense and other accrual and payables.
Leases
We
adopted ASC 842, “Leases” (“ASC 842”) on January 1, 2020, using the
modified retrospective transition method through a cumulative-effect adjustment in the period of adoption
rather than retrospectively adjusting prior periods and the package of practical expedient. We categorized
leases with contractual terms longer than twelve months as either operating or finance lease. The
adoption of ASC 842 resulted in recognition of Operating Right-of-use (“ROU”) assets of
HKD
ROU assets represent our rights to use underlying assets for the lease terms and lease liabilities represent our obligation to make lease payments arising from the leases. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term, reduced by lease incentives received, plus any initial direct costs, using the discount rate for the lease at the commencement date. If the implicit rate in lease is not readily determinable for our operating leases, we generally use the incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. We elected not to separate non-lease components from lease components; therefore, it will account for lease component and the non-lease components as a single lease component when there is only one vendor in the lease contract for the office leases. Lease payments are fixed.
For operating leases, lease expense is recognized on a straight-line basis in operations over the lease term.
Any lease with a term of 12 months or less is considered short-term. As permitted by ASC 842, short-term leases are excluded from the ROU asset and lease liabilities on the unaudited interim condensed consolidated balance sheets.
Lease payments that depend on the future use of the leased property, such as sales volume during the lease term, are contingent rentals and, accordingly, are excluded from minimum lease payments in their entirety in accordance with ASC 842-20-25-5. Accordingly, these contingent rentals are excluded from the ROU assets and lease liabilities on the unaudited interim condensed consolidated balance sheets. Lease payments of the Group’s retail stores located in the UK are charged based on the sales volume during the lease terms and therefore they are excluded from the recognition of ROU assets and lease liabilities on the unaudited interim condensed consolidated balance sheets.
F-11
NEO-CONCEPT
INTERNATIONAL GROUP HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
| 2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES (cont.) |
Bank borrowings
Borrowings are initially recognized at fair value, net of upfront fees incurred. Borrowings are subsequently measured at amortized cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognized in profit or loss over the period of the borrowings using the effective interest method.
Employee benefit plan
Payments to the Mandatory Provident Fund Scheme under the Hong Kong Mandatory Provident Fund Schemes Ordinance and state-managed retirement benefit schemes in other jurisdictions are recognized as an expense when employees have rendered service entitling them to the contributions.
Related parties
We adopted ASC 850, “Related Party Disclosures”, for the identification of related parties and disclosure of related party transactions.
The details of related party transactions during the six-month periods ended June 30, 2025 and 2026 and balances as at December 31, 2025 and June 30, 2026 are set out in note 13.
Revenue recognition
We adopted ASC Topic 606, “Revenue from Contracts with Customers”, and all subsequent ASUs that modified ASC 606 on April 1, 2017, using the full retrospective method which requires us to present the financial statements for all periods as if Topic 606 had been applied to all prior periods. We derive revenue principally from sales of private-labelled apparel products and sales of own-branded apparel products in our retail stores. Revenue from contracts with customers is recognized using the following five steps:
| 1. | Identify the contract(s) with a customer; |
| 2. | Identify the performance obligations in the contract; |
| 3. | Determine the transaction price; |
| 4. | Allocate the transaction price to the performance obligations in the contract; and |
| 5. | Recognize revenue when (or as) the entity satisfies a performance obligation. |
A contract contains a promise (or promises) to transfer goods or services to a customer. A performance obligation is a promise (or a group of promises) that is distinct. The transaction price is the amount of consideration a company expects to be entitled from a customer in exchange for providing the goods or services.
The unit of account for revenue recognition is a performance obligation (a good or service). A contract may contain one or more performance obligations. Performance obligations are accounted for separately if they are distinct. A good or service is distinct if the customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer, and the good or service is distinct in the context of the contract. Otherwise, performance obligations are combined with other promised goods or services until we identify a bundle of goods or services that is distinct. Promises in contracts which do not result in the transfer of a good or service are not performance obligations, as well as those promises that are administrative in nature, or are immaterial in the context of the contract. We have addressed whether various goods and services promised to the customer represent distinct performance obligations. We applied the guidance of ASC Topic 606-10-25-16 through 18 in order to verify which promises should be assessed for classification as distinct performance obligations.
F-12
NEO-CONCEPT
INTERNATIONAL GROUP HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
| 2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES (cont.) |
Our revenues from sales of private-labelled apparel products and sales of own-branded apparel products in our retail stores and digital channels are recognized at a point in time.
The transaction price is allocated to each performance obligation in the contract on the basis of the relative stand-alone selling prices of the promised goods or services. The individual standalone selling price of a good or service that has not previously been sold on a stand-alone basis, is determined based on the residual portion of the transaction price after allocating the transaction price to goods and/or services with observable stand-alone selling price.
Transaction price is the amount of consideration in the contract to which we expect to be entitled in exchange for transferring the promised goods or services. The transaction price is fixed and is adjusted for time value of money if the contract includes a significant financing component. Consideration payable to a customer is deducted from the transaction price if we do not receive a separate identifiable benefit from the customer. Revenue is recognized at a point in time. Typically, performance obligation for products where the process is described as below, the performance obligation is satisfied at point in time.
The Company currently generates its revenue from the following main sources:
Sale of private-labelled apparel products — customized original design manufacturer
We currently generate our revenue from the sale of private-labelled apparel products. We are an original design manufacturer. We offer customized design and manufacturing services to customers. We typically receive purchase orders from our customers who operate retail stores, which will set forth the terms and conditions including the transaction price, products to be delivered, terms of delivery, and terms of payment. The terms serve as the basis of the performance obligations that we must fulfil in order to recognize revenue. There is only one performance obligation as a series of services of this revenue stream are interrelated and are not separable or distinct as our customers cannot benefit from the standalone task (i.e., customers do not obtain any benefits other than the finished products). The key performance obligation is the delivery of the finished product to the customer at their specified location at which point title to that asset passes to the customer. The completion of this earning process is evidenced by a written customer acceptance indicating receipt of the product. Typical payment terms set forth in the purchase order range from 30 to 90 days from invoice date.
The transaction price does not include variable consideration provision for right of return as we do not have sales return policy and no sales return is offered. No right of return is included in the revenue of the Company.
F-13
NEO-CONCEPT
INTERNATIONAL GROUP HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
| 2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES (cont.) |
Retail sale of own-branded apparel products —“Les 100 Ciels”
We currently generate our revenue from the sale of own-branded apparel products through our physical and digital channels. Retail revenue at a point of sale is measured at the fair value of the consideration received at the time the sale is made to the customer, net of discounts. Customers settle the consideration by cash or credit cards. For online sales, we have elected to treat shipping and handling as fulfillment activities and not a separate performance obligation. Accordingly, we recognize revenue for our single performance obligation related to online sales at the time control of the merchandise passes to the customer, which is generally at the time of shipment.
The transaction price includes variable consideration provision for right of return as we have sales return policy. We record an allowance for estimated merchandise returns based on our historical return patterns and various other assumptions that management believes to be reasonable. For the six-month periods ended June 30, 2025 and 2026, we are not aware of any material claims against us in relation to defective products, nor any material product returns from our customers.
Following the adoption of ASC 606, we considered the guidance set forth in ASC 340-40, and determined that an asset would be recognized from costs incurred to fulfil a contract under ASC-340-40-25-5 only if those costs meet all of the following criteria:
| ● | The costs relate directly to a contract or an anticipated contract that the entity can specifically identify (for example, costs relating to services to be provided under the renewal of an existing contract or costs of designing an asset to be transferred under a specific contract that has not yet been approved). |
| ● | The costs generate or enhance resources of the entity that will be used in satisfying (or continuing to satisfy) performance obligations in the future. |
| ● | The costs are expected to be recovered. |
The Company elected to apply the practical expedient to recognize the incremental costs of obtaining a contract as an expense if the amortization period of the asset would have been one year or less.
Costs that relate directly to a contract include cost of purchasing private-labelled and own-branded apparel products from suppliers.
We elected to treat shipping and handling costs undertaken by the Company after the customer has obtained control of the related goods as a fulfillment activity and present as transportation costs in selling and marketing expenses.
Costs associated with the production of advertising, such as writing, printing, and other costs, are expensed as incurred. Costs associated with communicating advertising that has been produced, such as magazine costs, are expensed when the advertising event takes place.
Cost of revenues
Cost of revenues of private-labelled apparel products and cost of revenues of own-branded apparel products in our retail stores, which are directly related to revenue-generating transactions, primarily consist of cost of purchasing of private-labelled and own-branded apparel products from suppliers, and inbound shipping and handling cost.
Selling and marketing expenses
Selling and marketing expenses consist primarily of transportation and distribution expense and marketing and displaying expenses.
F-14
NEO-CONCEPT
INTERNATIONAL GROUP HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
| 2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES (cont.) |
General and administrative expenses
General and administrative expenses primarily consist of personnel-related compensation expenses, including salaries and related social insurance costs for our operations and supporting personnel, office rental and office expenses, insurance, amortization of intangible assets, write-down of inventories, allowance for expected credit loss, depreciation, professional services fees, and other expenses related to general operations.
Shipping and handling costs
Shipping and handling costs are expensed as incurred. Inbound shipping and handling cost associated with bringing the products from suppliers to the Company’s retail stores are included in cost of revenues. Outbound shipping and handling costs associated with shipping and delivery of the products to customers are included in selling and marketing expenses.
Income taxes
We account for income taxes pursuant to ASC Topic 740, “Income Taxes”. Income taxes are provided on an asset and liability approach for financial accounting and reporting of income taxes. Any tax paid by subsidiaries during the year is recorded. Current tax is based on the profit or loss from ordinary activities adjusted for items that are non-assessable or disallowable for income tax purpose and is calculated using tax rates that have been enacted or substantively enacted at the balance sheet date. ASC Topic 740 also requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statements and the tax basis of assets and liabilities, and for the expected future tax benefit to be derived from tax losses and tax credit carry-forwards.
ASC Topic 740 additionally requires the establishment of a valuation allowance to reflect the likelihood of realization of deferred tax assets. Realization of deferred tax assets, including those related to the U.S. net operating loss carry-forwards, are dependent upon future earnings, if any, of which the timing and amount are uncertain.
We adopted ASC Topic 740-10-05, “Income Tax”, which provides guidance for recognizing and measuring uncertain tax positions, it prescribes a threshold condition that a tax position must meet for any of the benefits of the uncertain tax position to be recognized in the unaudited interim condensed consolidated financial statements. It also provides accounting guidance on derecognizing, classification, and disclosure of these uncertain tax positions.
Our policy on classification of all interests and penalties related to unrecognized income tax positions, if any, is to present them as a component of income tax expense.
Value added tax (“VAT”)
Our
subsidiary in UK is subject to VAT and related surcharges on revenue generated from sales of products. The
Group records revenue net of VAT. Entities that are VAT general taxpayers are allowed to offset qualified
input VAT, paid to suppliers against their output VAT liabilities. The standard rate of the United Kingdom VAT
is
Comprehensive income (loss)
We present comprehensive income (loss) in accordance with ASC Topic 220, “Comprehensive Income”. ASC Topic 220 states that all items that are required to be recognized under accounting standards as components of comprehensive income (loss) be reported in the unaudited interim condensed consolidated financial statements. The components of comprehensive income (loss) were the net income for the period and the foreign currency translation adjustments.
Commitments and Contingencies
In the normal course of business, we are subject to contingencies, including legal proceedings and claims arising out of the business that relate to a wide range of matters, such as government investigations and tax matters. We recognize a liability for such contingency if it determines it is probable that a loss has occurred, and a reasonable estimate of the loss can be made. We may consider many factors in making these assessments including historical and the specific facts and circumstances of each matter.
F-15
NEO-CONCEPT
INTERNATIONAL GROUP HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
| 2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES (cont.) |
Earnings per share
We compute earnings per share (“EPS”) in accordance with ASC 260, “Earnings per Share”. ASC 260 requires companies to present basic and diluted EPS. Basic EPS is measured as net income divided by the weighted average ordinary share outstanding for the period. Diluted EPS presents the dilutive effect on a per share basis of the potential ordinary shares (e.g., convertible securities, options, and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential ordinary shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. For the six-month periods ended June 30, 2025 and 2026, there were no dilutive shares.
Recently issued accounting pronouncements
From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standard-setting bodies and adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on its financial position or results of operations upon adoption.
Accounting standards adopted
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The ASU requires the annual financial statements to include consistent categories and greater disaggregation of information in the rate reconciliation, and income taxes paid disaggregated by jurisdiction. ASU 2023-09 is effective for public business entities for annual periods beginning after December 15, 2024, and interim periods within those annual periods; early adoption is permitted. Adoption is either with a prospective method or a fully retrospective method of transition. The Company adopts ASU 2023-09 for the year beginning on January 1, 2025. The Company is evaluating the impact the updated guidance will have on its disclosures for the year ended December 31, 2026, and does not expect its impact to be material on the unaudited interim condensed consolidated financial statements. The adoption of ASU 2023-09 will impact the Company’s annual disclosures only.
In July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. The ASU provides a practical expedient that allows an entity, when estimating expected credit losses on current accounts receivable and current contract assets arising from transactions accounted for under ASC 606, to assume that current economic conditions as of the balance sheet date will continue unchanged throughout the remaining forecast period. ASU 2025-05 is effective for annual reporting periods beginning after December 15, 2025, including interim periods within those annual reporting periods. The Company adopted ASU 2025-05 on January 1, 2026 and elected the practical expedient. The adoption did not have a material impact on these unaudited interim condensed consolidated financial statements.
Accounting standards issued but not yet adopted
In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40). ASU 2024-03 requires public business entities to disclose, in the notes, specified information about certain costs and expenses included in expense captions presented on the face of the income statement. In January 2025, the FASB issued ASU 2025-01 to clarify that the amendments are effective for public business entities for annual reporting periods beginning after December 15, 2026, and for interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The amendments may be applied prospectively or retrospectively. The Company is currently evaluating the impact of ASU 2024-03 on its disclosures and does not expect the adoption to affect recognition or measurement in the consolidated financial statements.
Except for the above-mentioned pronouncements, there are no new recently issued accounting standards that will have a material impact on unaudited interim consolidated balance sheets, statements of operations and comprehensive loss and cash flows.
| 3. | SEGMENT INFORMATION |
Information regarding the Company’s net income and operating income is disclosed in the unaudited interim condensed consolidated statements of income. Segment expenses and other items are reviewed by the CODM on the same basis as presented in the unaudited interim condensed consolidated statements of income.
The
Company has
F-16
NEO-CONCEPT
INTERNATIONAL GROUP HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
| 3. | SEGMENT INFORMATION (cont.) |
Key financial performance measures of the segments are as follows:
| For the six months ended June 30, | ||||||||||||
| 2025 | 2026 | 2026 | ||||||||||
| HKD | HKD | USD | ||||||||||
| REVENUES, NET | ||||||||||||
| COST OF REVENUES | ||||||||||||
| – Related party | ( | ) | ( | ) | ( | ) | ||||||
| – External | ( | ) | ( | ) | ( | ) | ||||||
| ( | ) | ( | ) | ( | ) | |||||||
| Gross profit | ||||||||||||
| EXPENSES | ||||||||||||
| Selling and marketing | ( | ) | ( | ) | ( | ) | ||||||
| General and administrative: | ||||||||||||
| Lease expenses – related party | ( | ) | ( | ) | ( | ) | ||||||
| Depreciation | ( | ) | ( | ) | ( | ) | ||||||
| Amortization | ( | ) | ( | ) | ( | ) | ||||||
| Staff cost | ( | ) | ( | ) | ( | ) | ||||||
| Leases expenses | ( | ) | ( | ) | ( | ) | ||||||
| Professional fee | ( | ) | ( | ) | ( | ) | ||||||
| Impairment on inventories | ( | ) | ( | ) | ( | |||||||
| Reversal of (provision for) expected credit losses | ( | ) | ( | ) | ||||||||
| Others | ( | ) | ( | ) | ( | ) | ||||||
| Total expenses | ( | ) | ( | ) | ( | ) | ||||||
| INCOME (LOSS) FROM OPERATION | ( | ) | ( | ) | ||||||||
| OTHER INCOME (EXPENSES) | ||||||||||||
| Interest expense, net | ( | ) | ( | ) | ( | ) | ||||||
| Change in fair value of investment in a joint venture | ||||||||||||
| Agency income – related party | ||||||||||||
| Other income | ||||||||||||
| Other expense | ( | ) | ( | ) | ( | ) | ||||||
| Total other income, net | ||||||||||||
| INCOME BEFORE TAX EXPENSES | ( | ) | ( | ) | ||||||||
| INCOME TAX (EXPENSES) CREDIT | ( | ) | ||||||||||
| NET INCOME (LOSS) | ( | ) | ( | ) | ||||||||
| As of December 31, 2025 | As of June 30, 2026 | |||||||||||
| HKD | HKD | USD | ||||||||||
| Total assets | ||||||||||||
| Total liabilities | ( | ) | ( | ) | ( | ) | ||||||
| Net assets | ||||||||||||
F-17
NEO-CONCEPT
INTERNATIONAL GROUP HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
| 4. | INVENTORIES, NET |
Inventories, net comprised the following:
| As of December 31, 2025 | As of June 30, 2026 | |||||||||||
| HKD | HKD | USD | ||||||||||
| Own-branded apparel products | ||||||||||||
| Less: inventory provision | ( | ) | ( | ) | ( | ) | ||||||
| Total | ||||||||||||
Inventory
write-down expense was HKD
Inventory provision consists of the following:
| As of December 31, 2025 | As of June 30, 2026 | |||||||||||
| HKD | HKD | USD | ||||||||||
| Beginning balance of the year/period | ||||||||||||
| Reserve of provisional | ( | ) | ||||||||||
| Addition | ||||||||||||
| Ending balance of the year/period | ||||||||||||
| 5. | ACCOUNTS RECEIVABLE, NET |
Accounts receivable, net comprised the following:
| As of December 31, 2025 | As of June 30, 2026 | |||||||||||
| HKD | HKD | USD | ||||||||||
| Accounts receivable | ||||||||||||
| Allowance for expected credit loss | ( | ) | ( | ) | ( | ) | ||||||
| Total | ||||||||||||
Allowance for expected credit losses consists of the following:
| As of December 31, 2025 | As of June 30, 2026 | |||||||||||
| HKD | HKD | USD | ||||||||||
| Beginning balance of the year/period | ||||||||||||
| (Reversal)/Provision | ( | ) | ||||||||||
| Exchange realignment | ( | ) | ( | ) | ||||||||
| Ending balance of the year/period | ||||||||||||
| 6. | PREPAYMENT AND OTHER CURRENT ASSETS, NET |
Prepayment and other current assets, net consist of the following:
| As of December 31, 2025 | As of June 30, 2026 | |||||||||||
| HKD | HKD | USD | ||||||||||
| Prepayment – third party | ||||||||||||
| Prepayment - related party | ||||||||||||
| Others – third party | ||||||||||||
| Total | ||||||||||||
| Allowance for expected credit losses | ( | ) | ( | ) | ( | ) | ||||||
| Total, net | ||||||||||||
F-18
NEO-CONCEPT
INTERNATIONAL GROUP HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
| 7. | PROPERTY AND EQUIPMENT, NET |
Property and equipment, net consist of the following:
| As of December 31, 2025 | As of June 30, 2026 | |||||||||||
| HKD | HKD | USD | ||||||||||
| Furniture, fixtures, and office equipment | ||||||||||||
| Leasehold improvement | ||||||||||||
| Less: accumulated depreciation | ( | ) | ( | ) | ( | ) | ||||||
| Exchange difference | ( | ) | ( | ) | ( | ) | ||||||
| Property and equipment, net | ||||||||||||
Depreciation
expenses recognized for the six-month periods ended June 30, 2025 and 2026 were HKD
| 8. | INTANGIBLE ASSETS, NET |
Intangible assets, net consist of the following:
| As of December 31, 2025 | As of June 30,2026 | |||||||||||
| HKD | HKD | USD | ||||||||||
| Software | ||||||||||||
| Trademarks | ||||||||||||
| Less: accumulated amortization | ( | ) | ( | ) | ( | ) | ||||||
| Intangible assets, net | ||||||||||||
Amortization
recognized for the six-month periods ended June 30, 2025 and 2026 were HKD
| 9. | INVESTMENT IN A JOINT VENTURE |
| As of December 31, 2025 | As of June 30, 2026 | |||||||||||||||||||
| HKD | Equity interest | HKD | USD | Equity interest | ||||||||||||||||
| Lineowa Fashion and Life Style L.L.C | % | % | ||||||||||||||||||
The Company has elected to measure the investment in joint venture using the fair value option at each reporting date. Under the fair value option, all related gains and losses on investment in joint venture due to change in the fair value will be reflected in other income (expenses) in the unaudited interim consolidated statements of income.
The Company used the income approach based on comparable publicly traded companies in similar lines of businesses. Cash flow assumptions used in income approach consider historical and forecasted revenue, earnings before interest, taxes, depreciation and amortization (EBITDA) and other relevant factors. The company classifies the income approach that use these inputs as Level 3 of fair value measurement.
The following table presents the assumptions used for the investment in a joint venture for the six months ended June 30, 2026:
| Weighted average cost of capital | % |
F-19
NEO-CONCEPT
INTERNATIONAL GROUP HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
| 9. | INVESTMENT IN A JOINT VENTURE (cont.) |
Lineowa
Fashion and Life Style L.L.C (“Lineowa”) is engaged in trade and business operation encompassing
retail, wholesale, distribution and e-commerce platform for apparel products that was established in United
Arab Emirates on October 14, 2024. The company recognized the investment in Lineowa in January 2025, as the
commercial registration certificate for amendment of share capital of Lineowa was issued on January 23, 2025.
The Company has jointly control over Lineowa, as it owns
The following table illustrates the summarized financial information of the Company’s joint venture for the six months ended June 30, 2026 (and not the Company’s share of those amounts), adjusted for difference in accounting policies between the Company and the joint venture, if any.
| As of June 30, 2026 | ||||
| HKD | ||||
| Current assets | ||||
| Non-current assets | ||||
| Current liabilities | ( | ) | ||
| Non-current liabilities | ( | ) | ||
| Net assets of the joint venture | ||||
| Revenue | ||||
| Loss for the period | ( | ) | ||
| 10. | ACCRUALS AND OTHER PAYABLES |
Accruals and other payables consist of the following:
| As of December 31, 2025 | As of June 30, 2026 | |||||||||||
| HKD | HKD | USD | ||||||||||
| Accruals | ||||||||||||
| Payroll payable | ||||||||||||
| VAT payable | ||||||||||||
| Receipts in advance | ||||||||||||
| Deposit received | ||||||||||||
| Others | ||||||||||||
| Total | ||||||||||||
| 11. | BANK BORROWINGS |
Outstanding balances of bank borrowings as of December 31, 2025 and June 30, 2026 consisted of the following:
| As of December 31, 2025 | As of June 30, 2026 | |||||||||||
| HKD | HKD | USD | ||||||||||
| Bank overdraft | ||||||||||||
| Bank borrowings: | ||||||||||||
| Collateralized and guaranteed | ||||||||||||
| Less: current maturities | ( | ) | ||||||||||
| Non-current maturities | ||||||||||||
F-20
NEO-CONCEPT
INTERNATIONAL GROUP HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
| 11. | BANK BORROWINGS (cont.) |
Bank borrowings as of December 31, 2025 and June 30, 2026 are as follows:
| Interest rate as of | Interest rate as of | Balance as of | ||||||||||||||||||||||||
| Lender | Type | Maturity date | Currency | December 31, 2025 | June 30, 2026 | December 31, 2025 | June 30, 2026 | |||||||||||||||||||
| HKD | HKD | USD | ||||||||||||||||||||||||
| China Construction Asia Bank (i) | ||||||||||||||||||||||||||
| Citibank, N.A., Hong Kong Branch | ||||||||||||||||||||||||||
| Total | ||||||||||||||||||||||||||
| Less: current maturities | ( | ) | ||||||||||||||||||||||||
| Non-current maturities | ||||||||||||||||||||||||||
| (i) |
| (a) | Unlimited personal guarantee by Ms. Siu; |
| (b) | Ms. Siu being a subordinated lender towards all sums of money owed by Neo-Concept HK and NCH; |
| (c) | Legal charge over certain properties and car parking spaces owned by Ms. Siu and an immediate family member of Ms. Siu and also assignment of rental from the properties and the car parking spaces; |
| (d) | Legal charge over certain deposits accounts held by NCH at the relevant banks; |
| (e) | Legal charge over certain investment funds held by NCH at the relevant banks; |
| (f) | Assignment of benefit from life insurances premium assets held by NCH at the relevant banks; |
| (g) | Assignment of benefit from life insurances premium assets held by Pure Diamond Limited, a related company in which Ms. Siu has interests, at a relevant bank; |
| (h) | Indemnity granted by NCH to relevant banks; |
| (i) | Guaranteed
by Neo-Concept Fashion (Zhongshan) Co., Ltd, a subsidiary company of NCH, amounting to HKD |
| (j) | Cross-corporate guaranteed by Neo-Concept HK and NCH; |
F-21
NEO-CONCEPT
INTERNATIONAL GROUP HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
| 12. | LEASES |
Our operating leases primarily consist of leases of offices and showrooms. The recognition of whether a contract arrangement contains a lease is made by evaluating whether the arrangement conveys the right to use an identified asset and whether we obtain substantially all the economic benefits from and has the ability to direct the use of the asset.
Operating lease assets and liabilities are included in the items of operating lease right-of-use assets, net, operating lease liabilities, current portion, and operating lease liabilities, non-current portion on the unaudited interim condensed consolidated balance sheets.
We adopted ASU No. 2016-02 and related standards (collectively ASC 842, Leases), which replaced previous lease accounting guidance, on January 1, 2020 using the modified retrospective method of adoption. We elected the transition method expedient which allows entities to initially apply the requirements by recognizing a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. As a result of electing this transition method, prior periods have not been restated.
Our ROU assets and relevant lease liabilities originated from our rented premises for office purpose in Hong Kong and showroom purpose in London.
Supplemental balance sheet information related to operating leases was as follows:
| As of December 31, 2025 | As of June 30, 2026 | |||||||||||
| HKD | HKD | USD | ||||||||||
| Operating lease: | ||||||||||||
| Operating lease right-of-use assets | ||||||||||||
| Current operating lease obligation | ||||||||||||
| Non-current operating lease obligation | ||||||||||||
| Total operating lease obligation | ||||||||||||
Operating
lease expense for the six-month periods ended June 30, 2025 and 2026 was HKD
F-22
NEO-CONCEPT
INTERNATIONAL GROUP HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
| 12. | LEASES (cont.) |
The undiscounted future minimum lease payment schedule as follows:
| For the twelve months ending June 30, | HKD | USD | ||||||
| 2027 | ||||||||
| 2028 | ||||||||
| 2029 | ||||||||
| 2030 | ||||||||
| 2031 or after | ||||||||
| Total lease payments | ||||||||
| Less: imputed interest | ( | ) | ( | ) | ||||
| Total operating lease liabilities | ||||||||
| As of June 30, 2026 | ||||
| Weighted average discount rate | % | |||
| Weighted average remaining lease term (years) | ||||
| 13. | RELATED PARTY BALANCES AND TRANSACTIONS |
Due from (to) related parties consist of the following:
| As
of December 31, 2025 | As of June 30, 2026 | |||||||||||||
| HKD | HKD | USD | ||||||||||||
| Prepayment from NCH | ||||||||||||||
| Due to NCH | ( | ) | ||||||||||||
The amounts due from (to) the related parties are unsecured, interest free with no specific repayment terms. Neo-Concept (Holdings) Company Limited (“NCH”) is a company incorporated in Hong Kong and controlled by Ms. Siu, the controlling shareholder of the Company. As of December 31, 2025, the amount due to NCH was non-trade nature, being fund advance from NCH for its general operation.
In addition to the transactions and balances detailed elsewhere in these unaudited interim condensed consolidated financial statements, we also had the following transactions with related parties:
| For the six months ended June 30, | ||||||||||||
| 2025 | 2026 | 2026 | ||||||||||
| HKD | HKD | USD | ||||||||||
| Agency income received by Neo-Concept UK from NCH | ||||||||||||
| Purchase of apparel products from NCH | ||||||||||||
| Rental expense paid to NCH | ||||||||||||
| Advance from HCH | ||||||||||||
| Repay to HCH | ||||||||||||
Agency income refers to other income from NCH, which was a discretionary payment made to Neo-Concept UK for promoting NCH’s products in UK upon a pre-determined yearly sale target was achieved. There are no enforceable rights and obligations, and the amount is recorded at a point in time.
F-23
NEO-CONCEPT
INTERNATIONAL GROUP HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
| 14. | DISAGGREGATED REVENUE |
The following table shows disaggregated revenue by major product categories for the periods ended June 30, 2025 and 2026, respectively:
| For the six months ended June 30, | ||||||||||||
| 2025 | 2026 | 2026 | ||||||||||
| HKD | HKD | USD | ||||||||||
| Private-labelled apparel products | ||||||||||||
| Own-branded apparel products | ||||||||||||
| Total | ||||||||||||
The following table shows disaggregated cost of sales by major product categories for the periods ended June 30, 2025 and 2026, respectively:
| For the six months ended June 30, | ||||||||||||
| 2025 | 2026 | 2026 | ||||||||||
| HKD | HKD | USD | ||||||||||
| Private-labelled apparel products | ||||||||||||
| Own-branded apparel products | ||||||||||||
| Total | ||||||||||||
To optimize procurement costs, the Group structuralized its supply chain during the period by transitioning certain purchasing channels from independent third-party to related party who offered more favorable pricing terms. during the period ended June 30, 2026.
The following table sets forth a breakdown of our gross profit and gross profit margin for periods ended June 30, 2025 and 2026, respectively:
| For the six months ended June 30, | ||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2026 | |||||||||||||||||||||||||||||||||||||||||||
| Product category | Revenue | Cost of revenue | Gross profit | Gross profit margin | Revenue | Cost of revenue | Gross profit | Gross profit margin | ||||||||||||||||||||||||||||||||||||
| HKD | HKD | HKD | % | HKD | USD | HKD | USD | HKD | USD | % | ||||||||||||||||||||||||||||||||||
| Private-labelled apparel products | % | % | ||||||||||||||||||||||||||||||||||||||||||
| Own-branded apparel products | % | % | ||||||||||||||||||||||||||||||||||||||||||
| Total | % | % | ||||||||||||||||||||||||||||||||||||||||||
In the following table, revenue is disaggregated by the geographical locations of customers:
| For the six months ended June 30, | ||||||||||||
| 2025 | 2026 | 2026 | ||||||||||
| HKD | HKD | USD | ||||||||||
| Geographical locations: | ||||||||||||
| The United States and Canada | ||||||||||||
| The UK | ||||||||||||
| Others | ||||||||||||
| Total | ||||||||||||
F-24
NEO-CONCEPT
INTERNATIONAL GROUP HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
| 15. | TAXES |
Income tax
Cayman Islands
The Cayman Islands currently levy no taxes on individuals or corporations based upon profits, income, gains or appreciations and there is no taxation in the nature of inheritance tax or estate duty. There are no other taxes likely to be material to our Company levied by the Government of the Cayman Islands save for certain stamp duties which may be applicable, from time to time, on certain instruments.
BVI
NCA is incorporated in the BVI and is not subject to tax on income or capital gains under current BVI law. In addition, upon payments of dividends by these entities to their shareholders, no BVI withholding tax will be imposed.
Hong Kong
Neo-Concept
HK is incorporated in Hong Kong and is subject to Hong Kong Profits Tax on the taxable income as
reported in its statutory financial statements adjusted in accordance with relevant Hong Kong tax laws.
The applicable tax rate is
Other jurisdictions
Taxation arising in other jurisdictions such as the UK and the USA is calculated at the rates prevailing in the relevant jurisdictions.
With
effect from 1 April 2025, the current main rate of corporation tax in the UK is
Significant components of the income tax (expense) credit are as follows:
| For the six months ended June 30, | ||||||||||||
| 2025 | 2026 | 2026 | ||||||||||
| HKD | HKD | USD | ||||||||||
| Current: | ||||||||||||
| Hong Kong | ||||||||||||
| The UK | ||||||||||||
| Deferred | ||||||||||||
| Hong Kong | ( | ) | ||||||||||
| The UK | ( | ) | ||||||||||
| Income tax (expense) credit | ( | ) | ||||||||||
The following table reconciles Cayman Islands statutory rates to our effective tax rate:
| For the six months ended June 30, | ||||||||
| 2025 | 2026 | |||||||
| Income tax rate in the Cayman Islands, permanent tax holiday | % | % | ||||||
| Hong Kong statutory income tax rate | % | % | ||||||
| Effect of different tax rates | % | ( | )% | |||||
| Tax loss not recognized | % | ( | )% | |||||
| Utilization of tax loss | ( | )% | % | |||||
| Temporary difference | % | % | ||||||
| Income not taxable | ( | )% | % | |||||
| Expenses not taxable | % | % | ||||||
| Effective tax rate | % | % | ||||||
F-25
NEO-CONCEPT
INTERNATIONAL GROUP HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
| 15. | TAXES (cont.) |
Deferred tax assets (liabilities)
Deferred tax assets (liabilities) as of December 31, 2025 and June 30, 2026 consisted of the following:
| As of December 31, 2025 | As of June 30, 2026 | |||||||||||
| HKD | HKD | USD | ||||||||||
| Deferred tax assets: | ||||||||||||
| Tax loss | ||||||||||||
| Allowance for expected credit losses | ||||||||||||
| Total deferred tax assets | ||||||||||||
| Valuation allowance | ( | ) | ( | ) | ( | ) | ||||||
| Deferred tax assets, net of valuation allowance | ||||||||||||
| Deferred tax liabilities: | ||||||||||||
| Depreciation | ( | ) | ( | ) | ( | ) | ||||||
| Total deferred tax liabilities | ( | ) | ( | ) | ( | ) | ||||||
As
of December 31, 2025, the Group had
| 16. | CONCENTRATION OF RISK |
Credit risk
Our assets that are potentially subject to a significant concentration of credit risk primarily consist of cash and accounts receivable.
We
believe that there is no significant credit risk associated with cash in Hong Kong, which were held by
reputable financial institutions in the jurisdiction where Neo-Concept HK is located. The Hong Kong
Deposit Protection Board pays compensation up to a limit of HKD
As
of June 30, 2026, HKD
We have designed credit policies with an objective to minimize their exposure to credit risk. Our accounts receivable is short term by nature and the associated risk is minimal. We conduct credit evaluations on our clients and generally do not require collateral or other security from such clients. We periodically evaluate the creditworthiness of the existing clients in determining an allowance for doubtful accounts primarily based upon the age of the receivables and factors surrounding the credit risk of specific clients.
We are also exposed to risk from accounts receivables. These assets are subject to credit evaluations. An allowance, where applicable, would make for estimated unrecoverable amounts which have been determined by reference to past default experience and the current economic environment.
Customer concentration risk
Information as to the revenue derived from those customers that accounted for more than 10% of total revenue for the six months ended June 30, 2025 and 2026 are as follows:
| 2025 | 2026 | |||||||
| Percentage of total revenue | ||||||||
| Customer A | % | % | ||||||
| Customer B | % | |||||||
| Customer E | % | |||||||
| * |
F-26
NEO-CONCEPT
INTERNATIONAL GROUP HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
| 16. | CONCENTRATION OF RISK (cont.) |
Information as to the accounts receivables derived from those customers that accounted for more than 10% of total accounts receivable as of December 31, 2025 and June 30, 2026 are as follows:
| December 31,
2025 | June
30, 2026 | |||||||
| Percentage of total accounts receivables | ||||||||
| Customer A | % | % | ||||||
| Customer B | % | |||||||
| Customer C | % | |||||||
| * |
Vendor concentration risk
Information as to the purchases derived from those vendors that accounted for more than 10% of total purchases for the six months ended June 30, 2025 and 2026 are as follows:
| 2025 | 2026 | |||||||
| Percentage of total purchase | ||||||||
| Vendor A | % | % | ||||||
| Vendor B | % | % | ||||||
No accounts payables as of December 31, 2025 and June 30, 2026. No other vendor accounts for more than 10% of our accounts payable as of December 31, 2025 and June 30, 2026.
Interest rate risk
Our exposure on fair value interest rate risk mainly arises from our cash balance in banks. We also have exposure on cash flow interest rate risk which is mainly arising from our bank balance in banks.
We are not exposed to significant interest rate risk as the interest rates are not expected to change significantly.
Foreign currency risk
We are exposed to foreign currency risk primarily through sales that are denominated in a currency other than the functional currency of the operations to which they relate. The currencies giving rise to this risk are primarily USD, GBP and AED.
We currently do not have a foreign currency hedging policy in respect of foreign currency transactions, assets and liabilities. We will monitor the foreign currency exposure closely and will consider hedging significant foreign currency exposure should the need arise.
Market and geographic risk
The Company’s operations are mainly conducted in Hong Kong and the United Kingdom. Accordingly, the political, economic, and legal environments, as well as the general state of Hong Kong and the United Kingdom’s economy may influence the Company’s business, financial condition, and results of operations.
The Company’s business is exposed to risks arising from geopolitical tensions and military conflicts, including the ongoing war in Ukraine and instability in the Middle East. These events create significant global market and geographic risks, the effects of these on the Company’s operations are still uncertain.
F-27
NEO-CONCEPT
INTERNATIONAL GROUP HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
| 17. | SHAREHOLDERS’ EQUITY |
Ordinary shares
On
March 3, 2025, the Company held an Extraordinary General Meeting and approved the authorized share capital of
the Company shall be re-classified by re-classifying
On
February 9, 2026, the Company entered into securities purchase agreements with several investors and a
placement agency agreement with D. Boral Capital LLC (lead placement agent) and uSmart Securities Limited
(joint placement agent), pursuant to which the Company agreed to issue and sell
Gross
proceeds were approximately USD
On
May 18, 2026, the Company effected a share consolidation at a ratio of 8-to-1. As a result of the share
consolidation, the Company now has
| 18. | COMMITMENTS AND CONTINGENCIES |
Litigation
From time to time, we are involved in claims and legal proceedings that arise in the ordinary course of business. Based on currently available information, we do not believe that the ultimate outcome of any unresolved matters, individually and in the aggregate, are reasonably possible to have a material adverse effect on our financial position, results of operations or cash flows. However, litigation is subject to inherent uncertainties and our view of these matters may change in the future. We record a liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. We review the need for any such liabilities on a regular basis.
| 19. | SUBSEQUENT EVENTS |
We evaluated all events and transactions that occurred after June 30, 2026 up through September 30, 2026 which is the date that these unaudited interim condensed consolidated financial statements. There were no material subsequent events that require disclosure in these unaudited interim condensed consolidated financial statements.
F-28
NEO-CONCEPT
INTERNATIONAL GROUP HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
| 20. | PARENT ONLY FINANCIAL INFORMATION |
The following presents condensed parent company only financial information of Neo-Concept International Group Holdings Limited.
Condensed balance sheets
| As of December 31, 2025 | As of June 30, 2026 | |||||||||||
| HKD | HKD | USD | ||||||||||
| Current assets | ||||||||||||
| Amount due from the subsidiaries | ||||||||||||
| Cash and cash equivalents | ||||||||||||
| Non-current assets | ||||||||||||
| Intangible assets | ||||||||||||
| Interests in a subsidiary | ||||||||||||
| Total assets | ||||||||||||
| Liabilities and shareholders’ equity | ||||||||||||
| Current liabilities | ||||||||||||
| Accrual | ||||||||||||
| Total liabilities | ||||||||||||
| Shareholders’ equity | ||||||||||||
| Class A Ordinary shares USD | ||||||||||||
| Class B Ordinary shares, USD | ||||||||||||
| Additional paid-up capital | ||||||||||||
| Accumulated losses | ( | ) | ( | ) | ( | ) | ||||||
| Total shareholders’ equity | ||||||||||||
| Total liabilities and shareholders’ equity | ||||||||||||
| * |
Condensed statements of loss
| For the six months ended June 30, | ||||||||||||
| 2025 | 2026 | 2026 | ||||||||||
| HKD | HKD | USD | ||||||||||
| Operating expenses | ||||||||||||
| Amortization of intangible asset | ||||||||||||
| Professional fee | ||||||||||||
| Other general and administrative expenses | ||||||||||||
| Total operating expenses | ||||||||||||
| Loss before income taxes | ||||||||||||
| Income taxes | ||||||||||||
| Net loss | ||||||||||||
F-29
NEO-CONCEPT
INTERNATIONAL GROUP HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
| 20. | PARENT ONLY FINANCIAL INFORMATION (cont.) |
Condensed statements of cash flows
| For the six months ended June 30, | ||||||||||||
| 2025 | 2026 | 2026 | ||||||||||
| HKD | HKD | USD | ||||||||||
| Cash flows from operating activities | ||||||||||||
| Net loss | ( | ) | ( | ) | ( | ) | ||||||
| Adjustments to reconcile net loss to net cash used in operating activities | ||||||||||||
| Amortization of intangible assets | ||||||||||||
| Amount due from the subsidiaries | ||||||||||||
| Accrual | ( | ) | ||||||||||
| Cash used in operating activities | ( | ) | ( | ) | ( | ) | ||||||
| Cash flows from financing activities | ||||||||||||
| Proceeds from share placing | ||||||||||||
| Advanced from/(to) subsidiaries | ( | ) | ( | ) | ||||||||
| Cash generated from financing activities | ||||||||||||
| Net (decrease) increase in cash and cash equivalents | ( | ) | ||||||||||
| Cash and cash equivalents at the beginning of the period | ||||||||||||
| Cash and cash equivalents at the end of the year/period | ||||||||||||
| (i) | Basis of presentation |
The Company was incorporated under the laws of the Cayman Islands as an exempted company with limited liability on July 29, 2021 and as a holding company.
Neo-Concept Apparel Group Limited (“NCA”), a British Virgin Island business company limited by shares, is the immediate holding company of Neo-Concept International Company Limited, which, in turn, holds the entire equity interests in Neo-Concept International Company Limited, a company incorporated in Hong Kong with limited liability, and Neo-Concept (UK) Limited, a company incorporated in the UK with limited liability.
NCA is also the immediate
holding company of Neo-Concept Exquisite Couture Limited, which, in turn, holds the entire equity interests in Neo-Concept Exquisite Couture
Limited, a company incorporated in BVI, Neo-Concept Elite Fashion Company L.L.C, a company incorporated in BVI and Neo-Concept (UK) Limited,
a company incorporated in the UAE and
In April 2026, NCA incorporated two wholly own subsidiaries, NC Asia International Company Limited and NC ASIA Investment Company Limited, which are company incorporated in Hong Kong with limited liabilities.
In the condensed parent-company-only financial statements, the Company’s investment in NCA is stated at cost.
The condensed parent-company-only financial statements are presented as if the incorporation of the Company and its acquisition of NCA had taken place at January 1, 2020 and throughout the period as at the date before the Group Reorganization.
F-30