SEC Form 20-F filed by Top Win International Limited

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 20-F

(Mark One)

☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the year ended December 31, 2024

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of event requiring this shell company report:

For the transition period from _________ to _____________.

Commission file number: 001-42572

TOP WIN INTERNATIONAL LIMITED

(Exact name of Registrant as Specified in its Charter)

(Translation of Registrant’s name into English)

Cayman Islands

(Jurisdiction of Incorporation or Organization)

33/F Sunshine Plaza
353 Lockhart Road, Wan Chai, Hong Kong

(Address of Principal Executive Offices)

Kwan Ngai

Telephone: +852 2815 7988

Email: [email protected]

33/F Sunshine Plaza
353 Lockhart Road, Wan Chai, Hong Kong

(Name, Telephone, E-mail and/or Facsimile Number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act:

Securities registered or to be registered pursuant to Section 12(g) of the Act: None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report: 22,200,000 Ordinary Shares, par value $0.0005 per share issued and outstanding as of December 31, 2024.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes  ☐ No ☒

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

Yes  ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes  ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow: Item 17 ☐ Item 18 ☐

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

TOP WIN INTERNATIONAL LIMITED

ANNUAL REPORT ON FORM 20-F

TABLE OF CONTENTS

CERTAIN TERMS AND CONVENSIONS

Unless otherwise indicated, in this annual report, the following terms shall have the meaning set out below:

This annual report contains translations of certain Hong Kong dollar amounts into US dollar amounts at specified rates solely for the convenience of the reader. All reference to “US dollars”, “USD”, “US$” or “$” are to United States dollars. All reference to “HK dollars”, “HKD”, or “HK$” are to Hong Kong dollars. The relevant exchange rates are listed below:

Our year end is December 31. References to a particular “fiscal year” are to our year ended December 31 of that calendar year. Our audited consolidated financial statements (“CFS”) were prepared in accordance with the generally accepted accounting principles in the United States (the “U.S. GAAP”).

We have proprietary rights to trademarks used in this annual report that are important to our business, many of which are registered under applicable intellectual property laws. Solely for convenience, the trademarks, service marks and trade names referred to in this annual report are without the ^{®, ™} and other similar symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensors to these trademarks, service marks and trade names.

This annual report contains additional trademarks, service marks and trade names of others. All trademarks, service marks and trade names appearing in this annual report are, to our knowledge, the property of their respective owners. We do not intend our use or display of other companies’ trademarks, service marks or trade names to imply a relationship with, or endorsement or sponsorship of us by, any other person.

When used herein, the references to laws and regulations of “China” or the “PRC” are only to such laws and regulations of mainland China, excluding, for the purpose of this annual report only, Taiwan, Hong Kong and Macau.

FORWARD-LOOKING STATEMENTS

This annual report contains forward-looking statements that involve substantial risks and uncertainties. In some cases, you can identify forward-looking statements by the words “may”, “might”, “will”, “could”, “would”, “should”, “expect”, “intend”, “plan”, “goal”, “objective”, “anticipate”, “believe”, “estimate”, “predict”, “potential”, “continue” and “ongoing”, or the negative of these terms, or other comparable terminology intended to identify statements about the future. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, levels of activity, performance or achievements to be materially different from the information expressed or implied by these forward-looking statements. The forward-looking statements and opinions contained in this annual report are based upon information available to us as of the date of this annual report and, while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. Factors that could cause actual results to differ from those discussed in the forward-looking statements include, but are not limited to:

You should refer to the section titled “Item 3. Key Information—D. Risk Factors” for a discussion of important factors that may cause our actual results to differ materially from those expressed or implied by our forward-looking statements. As a result of these factors, we cannot assure you that the forward-looking statements in this annual report will prove to be accurate. Furthermore, if our forward-looking statements prove to be inaccurate, the inaccuracy may be material. In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified time frame, or at all. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

PART I

ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not Applicable.

ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE

Not Applicable.

ITEM 3. KEY INFORMATION

Company Structure

Below is a chart illustrating our current corporate structure:

Holding Company Structure

Top Win International Limited (“Top Win”), was incorporated as a Cayman Islands exempted company with limited liability on June 27, 2024 under the laws of the Cayman Islands. As of the date of this annual report, Top Win is authorized to issue a maximum of 100,000,000 Ordinary Shares of par value US$0.0005 each, of which 24,864,000 Ordinary Shares are issued and outstanding.

Top Win International Limited is a holding company and is not actively engaged in any business, and it conducts operations through the Operating Subsidiary, namely Top Win International Trading Limited (“Top Win Hong Kong”) incorporated under the laws of Hong Kong, on June 15, 2001. Top Win Hong Kong is our operating entity and is indirectly wholly-owned by Top Win through Grand Moon International Limited, an intermediate holding company.

Grand Moon International Limited (“Grand Moon”) was incorporated on June 4, 2024 under the laws of the British Virgin Islands. Grand Moon is wholly owned by Top Win, as the intermediate holding company and not actively engaging in any business. For more details, see “Item 3. Key Information—D. Risk Factors— Risks Relating to Our Corporate Structure”

On July 25, 2024, the Company completed the reorganization through a series of planned transactions. As a result of the Reorganization, the Company has become the holding company for Grand Moon and Top Win Hong Kong.

Immediately before the reorganization, Top Win Hong Kong was wholly owned and controlled by Mr. Hon, SIT and functioned as the sole operational entity. Top Win was established by a registered agent in the Cayman Islands, with the sole purpose of acting as holding company for the Group. On the same day of its incorporation, 100% ownership of Top Win was transferred from the registered agent to Pride River, which at the time was 100% owned by Mr. Sit Hon.

Grand Moon was established by a registered agent in the B.V.I. On July 9, 2024, 100% ownership of Grand Moon, was acquired by Top Win. Subsequently on July 25, 2024, Grand Moon acquired 10,000 shares of Top Win Hong Kong from Mr. Sit Hon, representing the entire issued share capital of Top Win Hong Kong at the time, for a consideration of HK$10,000, thereby completing the reorganization.

On September 16, 2024, the board of directors of Top Win resolved and approved to issued 550 Ordinary Shares with a par value of US$1.00 to Kelven, WONG and Ming Yuk, NGAI, at a consideration of US$1,000,000, respectively.

On October 29, 2024, Mr. Hon, SIT transferred 10,000 Ordinary Shares of Pride River Limited to Mr. Kwan, NGAI, for a consideration of US$10,000,000.

On October 29, 2024, the board of directors of Top Win resolved and approved: (1) to transfer 555 Ordinary Shares from Pride River Limited to Seng Kar Men, at a consideration of US$1,000,000; and (2) to transfer 555 Ordinary Shares from Pride River Limited to Shi Dongqin, at a consideration of US$1,000,000; and (3) to transfer 555 Ordinary Shares from Pride River Limited to Kon Teck Tien, at a consideration of US$1,000,000; and (4) to transfer 555 Ordinary Shares from Pride River Limited to Yang Shengguang, at a consideration of US$1,000,000; and (5) to transfer 555 Ordinary Shares from Pride River Limited to HELPIZO Holdings Inc., at a consideration of US$1,000,000.

On November 20, 2024, Top Win executed a shareholder resolution to (1) approve and adopt amended and restated memorandum and articles of association which dated November 20, 2024; and (2) change the par value of the Ordinary Shares from US$1.00 to $0.0005, a 2,000 for 1 share subdivision (“Share Subdivision”). Pursuant to such resolution, the authorized share capital of Top Win International Limited was US$50,000 divided into 100,000,000 Ordinary Shares with a nominal or par value of US$0.0005 each, in accordance with section 13 of the Cayman Islands Companies Act. For more details, see “Item 3. Key Information—D. Risk Factors— Risks Relating to Our Corporate Structure”

The Holding Foreign Companies Accountable Act

The Holding Foreign Companies Accountable Act, or the HFCAA, was enacted on December 18, 2020. The HFCAA states if the SEC determines that we have filed audit reports issued by a registered public accounting firm that has not been subject to inspection by the PCAOB for three consecutive years beginning in 2021, the SEC shall prohibit our shares from being traded on a national securities exchange or in the over-the-counter trading market in the United States.

On March 24, 2021, the SEC adopted interim final rules relating to the implementation of certain disclosure and documentation requirements of the HFCA Act. A company will be required to comply with these rules if the SEC identifies it as having a “non-inspection” year under a process to be subsequently established by the SEC. The SEC is assessing how to implement other requirements of the HFCA Act, including the listing and trading prohibition requirements described above. Furthermore, on June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act (the “AHFCAA”), which was signed into law on December 29, 2022, amending the HFCAA and requiring the SEC to prohibit an issuer’s securities from trading on any U.S. stock exchange if its auditor is not subject to PCAOB inspections for two consecutive years instead of three consecutive years. On September 22, 2021, the PCAOB adopted a final rule implementing the HFCAA, which provides a framework for the PCAOB to use when determining, as contemplated under the HFCAA, whether the PCAOB is unable to inspect or investigate completely registered public accounting firms located in a foreign jurisdiction because of a position taken by one or more authorities in that jurisdiction. On December 2, 2021, the SEC issued amendments to finalize rules implementing the submission and disclosure requirements in the HFCA Act. The rules apply to registrants that the SEC identifies as having filed an annual report with an audit report issued by a registered public accounting firm that is located in a foreign jurisdiction and that PCAOB is unable to inspect or investigate completely because of a position taken by an authority in foreign jurisdictions. On December 16, 2021, the PCAOB issued a Determination Report which found that the PCAOB is unable to inspect or investigate completely registered public accounting firms headquartered in: (i) Mainland China, and (ii) Hong Kong.

On August 26, 2022, the PCAOB announced and signed a Statement of Protocol (the “Protocol”) with the China Securities Regulatory Commission and the Ministry of Finance of the PRC. The Protocol provides the PCAOB with: (1) sole discretion to select the firms, audit engagements and potential violations it inspects and investigates, without any involvement of Chinese authorities; (2) procedures for PCAOB inspectors and investigators to view complete audit work papers with all information included and for the PCAOB to retain information as needed; (3) direct access to interview and take testimony from all personnel associated with the audits the PCAOB inspects or investigates.

On December 15, 2022, the PCAOB issued a new Determination Report which: (1) vacated the December 16, 2021 Determination Report; and (2) concluded that the PCAOB has been able to conduct inspections and investigations completely in the PRC in 2022. The December 15, 2022 Determination Report cautions, however, that authorities in the PRC might take positions at any time that would prevent the PCAOB from continuing to inspect or investigate completely. As required by the HFCAA, if in the future the PCAOB determines it no longer can inspect or investigate completely because of a position taken by an authority in the PRC, the PCAOB will act expeditiously to consider whether it should issue a new determination.

Our auditor, Marcum Asia CPAs LLP, the independent registered public accounting firm, as a firm headquartered in Manhattan, New York, and registered with the PCAOB, is subject to laws in the United States pursuant to which the PCAOB conducts regular inspections to assess our auditor’s compliance with the applicable professional standards. As of the date of this annual report, our auditor is not subject to and not affected by the PCAOB’s December 2021 Determination Report.

However, in the event it is later determined that the PCAOB is unable to inspect or investigate completely the auditor because of a position taken by an authority in a foreign jurisdiction, such as the PRC authorities, then such lack of inspection could cause trading in the Company’s securities to be prohibited under the HFCAA, and ultimately result in a determination by a securities exchange to delist the Company’s securities. Furthermore, as more stringent criteria have been imposed by the SEC and the PCAOB, recently, which would add uncertainties to our listing, and we cannot assure you whether Nasdaq or regulatory authorities would apply additional and more stringent criteria to us after considering the effectiveness of our auditor’s audit procedures and quality control procedures, adequacy of personnel and training, or sufficiency of resources, geographic reach or experience as it relates to the audit of our financial statements. See “Item 3. Key Information—D. Risk Factors—Risks Relating to our Ordinary Shares— Our Ordinary Shares may be prohibited from being traded on a national exchange under the Holding Foreign Companies Accountable Act if the PCAOB is unable to inspect our auditors. The delisting of our Ordinary Shares, or the threat of their being delisted, may materially and adversely affect the value of your investment. Furthermore, on June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act, which was signed into law on December 29, 2022, amending the HFCAA to require the SEC to prohibit an issuer’s securities from trading on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive years instead of three.”

3.A. [Reserved]

3.B. Capitalization and Indebtedness

Not Applicable.

3.C. Reasons for the Offer and Use of Proceeds

Not Applicable.

3.D. Risk Factors

Investing in our Ordinary Shares is highly speculative and involves a significant degree of risk. You should carefully consider the following risks as well as all other information contained in this annual report, including the matters discussed under the headings “Forward-Looking Statements” and “Item 5. Operating and Financial Review and Prospects” before you decide to make an investment in our Ordinary Shares. Top Win International Limited is a holding company with substantial all of its operations in China and Hong Kong and is subject to a legal and regulatory environment that in many respects differs from the United States. The risks discussed below could materially and adversely affect our business, prospects, financial condition, results of operations, cash flows, ability to pay dividends and the trading price of our Ordinary Shares. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially and adversely affect our business, prospects, financial condition, results of operations, cash flows and ability to pay dividends, and you may lose all or part of your investment.

Such risks are not exhaustive. We may face additional risks that are presently unknown to us or that we believe to be immaterial as of the date of this annual report. Known and unknown risks and uncertainties may significantly impact and impair our business operations through our subsidiaries in Hong Kong.

Risk Factors Summary

Our business is subject to numerous risks described in the section titled “Risk Factors” and elsewhere in this annual report. The main risks set forth below and others you should consider are discussed more fully in the section entitled “Risk Factors”, which you should read in its entirety.

Risks Relating to Our Business and Operations

Risks Related to Doing Business in Hong Kong

Risks Relating to Our Corporate Structure

Risks Related to our Ordinary Shares

Risks Relating to Our Business and Operations

If we fail to manage and expand our relationships with suppliers of luxury watches, or otherwise fail to procure products on favorable terms and quality, our business, financial condition, and results of operations may be materially and adversely affected.

We source substantially all luxury watch items from both authorized or independent watch distributors, luxury watch wholesaler, or dealers worldwide. Maintaining stable relationships with these suppliers is important to the growth of our business. In particular, we depend on our ability to procure products on favorable pricing terms. Our current suppliers network allows us to select the best prices and quality watches for our operation. However, there is no guarantee that the volume of supplies and stability will continue in the future. If we receive fewer offers from our suppliers than in the past, we may be unable to maintain stable inventory levels, which could hinder our ability to promptly supply the watches our customer’s desire. This could adversely affect our business operations and financial performance.

We enter the spot purchase order with our supplier on an order-by-order basis, specifying the model, quantity, and method of payment, but do not have long-term agreements or supply arrangement with any of such suppliers. We may be subject to price fluctuations due to a lack of long-term supply arrangements, and we cannot assure you that our current suppliers will continue to supply the luxury watch products to us on commercially acceptable terms, if at all. In the event that we are not able to source luxury watches at favorable prices, our revenue and cost of revenue may be materially and adversely affected. If we are unable to develop and maintain good relationships with suppliers that would allow us to obtain a sufficient amount and variety of luxury watches on commercially acceptable terms, it may inhibit our ability to offer sufficient products sought by luxury watch buyers, or to offer these products at competitive prices. Any adverse developments in our relationships with our suppliers, as well as with merchants and individual sellers on our marketplaces, could materially and adversely affect our business and growth prospects. Even if we maintain good relations with our suppliers, their ability to supply products to us in sufficient quantity and at competitive prices may be adversely affected by changes in their relationship with brand owners of the watches, economic conditions, labor unrest, regulatory or legal decisions, natural disasters or other contingencies. Furthermore, any inability of a manufacturer or supplier to ship the time pieces in a timely manner or to meet our quality standards could result in the temporary suspension of certain model of watches we offered, refund, or loss of customers, any of which could have a material adverse effect on our revenues. Any such delay or interruption could have a material adverse effect on our business, prospects, financial condition, and results of operations.

We do not have direct contractual or business relationships with luxury watch brand owners, and as a result we may face legal risks from potential liability for goods sold by us, outside brand owners’ authorized distribution channels and potential claims related to “parallel import” activities, and we may also face commercial risks from actions by luxury brand owners.

We do not have direct contractual or business relationships with watch brand owners. Instead, we source watches primarily from authorized distributors, independent watch dealers, and watch wholesalers in various countries. The contractual arrangements between some luxury brand owners and certain of our suppliers could contain restrictions on the price, geographic region and manner in which goods may be resold. We also source luxury goods through distribution channels outside the control of brand owners, which are often referred to as “parallel imports.” We believe that the import and sale of parallel import goods is generally permitted under the laws and regulations of the primary jurisdictions in which we operate, subject to certain exceptions. Section 20(2) of the Trade Marks Ordinance (Chapter 559 of the laws of Hong Kong) (“TMO”) provides that, once a piece of goods bearing a registered trade mark has been put on the market anywhere in the world by the owner or with his consent (whether express or implied or conditional or unconditional), the registered trade mark in respect of such goods is not infringed unless (i) the condition of the goods has been changed or impaired after they have been put on the market and (ii) the use of the registered trade mark in relation to those goods is detrimental to the distinctive character or repute of the trade mark. If we fail to adequately inspect the watches for defects before sale, we may fall within the exceptions outlined above and risk infringing on the registered trade mark. Considering our strict quality control procedure, and our intention to uphold and enhance the watch brands, we do not believe that our business is likely to fall within the exceptions outlines above. However, if our sourcing from any supplier is in violation of contractual arrangements with brand owners or legal restrictions on parallel import activities, we could be subject to claims of intellectual property rights infringement, tortious interference or inducement of contract breach, among others, and face significant liabilities. Any such perception that we are a parallel importer may undermine our reputation among buyers and sellers of luxury goods.

We are also subject to the commercial risks that brand owners may instruct our suppliers not to sell goods to us or may cease selling goods to our suppliers completely or in sufficient quantities to meet our sourcing needs. In particular, brand owners may object to our pricing practices, especially the discounts to the retail prices fixed or suggested by brand owners. If we are successful in increasing the scale of our business and become more prominent in the luxury watch industry, the risk that brand owners may take legal or commercial action against us or our suppliers may increase. Any such actions could harm our reputation and adversely impact our product offerings, which could have a material and adverse effect on our results of operations and growth prospects.

We might in the future receive claims alleging that sales of luxury goods by us are not through brand owners’ authorized distribution channels. Irrespective of the validity of such claims, we could incur significant costs and effort in either defending or settling such claims, which could divert our management’s attention from day-to-day operations. If a successful claim is made against us, we might be required to pay substantial damages or refrain from further sale of the relevant products. Regardless of whether we successfully defend against such claims, we could suffer negative publicity, our reputation could be severely damaged, and our product offerings could be significantly reduced. Any of these events could have a material and adverse effect on our business, results of operations or financial condition.

We depend on a small number of clients to derive a significant portion of our revenues and the loss of any of these clients could have a material adverse effect on our business.

We receive a significant portion of our net revenues from a limited number of major clients. For the year ended December 31, 2024, there were two customers each generating over 10% of our total revenue for the year, and they in aggregate accounted for approximately 33% of our total revenue for the year. For the year ended December 31, 2023, there were three customers each generating over 10% of our total revenue for the year, and they in aggregate accounted for approximately 40% of our total revenue for the year. For the year ended December 31, 2022, there were one customer each generated over 10% of our total revenue for the year, and they in aggregate accounted for approximately 11% of our total revenue for the year. Although our business does not heavily depend on any single client, the loss of one or more of these clients, or a significant reduction in the volume of their purchases, could materially and adversely affect our business and financial performance in the short term. This is particularly because we do not have long-term agreements with these clients; instead, sales are made on an order-by-order basis. Consequently, there is no guarantee that these clients will continue to make purchases from us at current levels, or at all. Additionally, due to the concentration of revenues from a limited number of customers, if we do not receive the payments expected from any of these clients, our revenue, financial condition and results of operations will be negatively and materially impacted in the short term.

Historically, we have been able to retain a longstanding and well-established relationship with our customers. While we are confident in our ability to continue attracting new customers and adapting to evolving market conditions, any inability to retain or replace key customers could have a material adverse effect on our business, results of operations, and financial condition.

We rely on a limited number of vendors for a significant portion of our purchases, and the loss of any of these vendors could have a material adverse effect on our business.

Although we operate as a watch trading company, we purchase a significant portion of our supplies from a few major vendors. For the year ended December 31, 2024, three vendors accounted for 10% or more of the Group’s total purchase. Total purchase from these three vendors accounted for 25% and 18% and 10% of the Group’s total purchase, respectively. For the year ended December 31, 2023, two vendors accounted for 10% or more of the Group’s total purchase. Total purchase from these two vendors accounted for 64% and 14% of the Group’s total purchase, respectively. For the year ended December 31, 2022, one vendor accounted for 10% or more of the Group’s total purchase. Total purchase from the vendor accounted for 65% of the Group’s total purchase. While we receive numerous offers daily from authorized dealers, distributors, and brand owners worldwide, and while these offers may be comparable to those from our existing vendors, the specific terms would need to be renegotiated if we want to engage with new vendors. Although identifying alternative vendors will not pose a significant challenge, losing one or more key vendors could lead to short-term difficulties, such as negotiating favorable terms or pricing with new suppliers. We believe that over the long term, we will be able to find alternative vendors without significant disruption to our operations.

Historically, we have been able to retain good relationships with our vendors, which has supported the stability of our supply chain. However, there is no guarantee that we will be able to maintain these relationships or secure new vendors on similarly favorable terms if one or more of these key vendors were to cease supplying to us. A loss of a major vendor could lead to higher costs in the near term, which could negatively impact our profit margins until alternative arrangements are secured.

We may be exposed to credit risks in relation to defaults from customers.

Our exposure to credit risk may be influenced mainly by the individual characteristics of each customer and may be concentrated on few numbers of customers. As of December 31, 2024, there was no customer whose receivables accounted for 10% or more of the Group’s total balances of accounts receivable. As of December 31, 2023, there was one customer whose receivables accounted for 10% or more of the Group’s total balances of accounts receivable and it accounted for 98% of the total balances of accounts receivables. As of December 31, 2022, there were three customers whose receivables accounted for 10% or more of the Group’s total balances of accounts receivable and accounted for 46%, 20% and 11% of the total balances of accounts receivables, respectively.  Although we will monitor our exposure to credit risk on an ongoing basis and make periodic judgment on impairment of overdue receivables based on the likelihood of collectability, we cannot assure you that all of our customers are creditworthy and reputable and will not default on payments in the future. If we encounter significant delays or defaults in payment by our customers or are otherwise unable to recover our accounts receivables, our cash flow, liquidity and financial condition may be materially and adversely affected.

We trade worldwide and as such are exposed to currency fluctuation risks.

As a watch trading company receiving offers from all over the world, currency fluctuations play a significant role in our transactions. The exchange rate at the time of order placement directly affects the cost of our inventory. Volatile currency rates can lead to unpredictable costs and profit margins, as we must pay based on the currency rate of the day. Adverse movements in exchange rates could increase our expenses, reduce our profitability, and create financial instability. This exposure to currency risk could materially and negatively impact our business operations and financial condition.

We are exposed to interest rate risks.

As of December 31, 2024 and December 31, 2023, we had outstanding bank loans of approximately $5.2 million and $5.8 million, respectively. The Group is exposed to floating interest rate risk on bank borrowings, particularly during periods when the interest rate is expected to significant changes. On the other hand, the deposited cash raised by IPO would generate interest income, and it is also exposed to floating interest rate risk. We have not been exposed to material risks due to changes in interest rates. An increase, however, may raise the cost of any debt we incur presently and, in the future, and result in an adverse impact on our income. 

If we fail to manage our inventory effectively, the results of operations, financial condition and liquidity may be materially and adversely affected.

Our business often requires us to manage a high volume of valuable inventory effectively. We depend on our forecasts of demand for and popularity of our products to make purchase decisions and to manage our inventory. Demand for products, however, can change significantly between the time inventory or components are ordered and the date of sale. The demand for the watches we sell is highly dependent on the end customers’ preferences for our watches, which are beyond our control.

Demand may be affected by seasonality, new product launches, rapid changes in product cycles and pricing, product defects, changes in consumer spending patterns, changes in consumer tastes with respect to our products and other factors, and our customers may not order products in the quantities that we expect. It may be difficult to accurately forecast demand and determine the appropriate product or component to be in inventory. If we cannot manage to source appropriate products to suit the consumer preference and market trends in the future, the volume of obsolete and slow-moving inventory may increase and we may need to either sell off such inventory at a lower price or write off such inventory. If we fail to manage our inventory effectively or negotiate favorable credit terms with suppliers, we may be subject to a decline in inventory values, and significant inventory write-downs or write-offs. If we are required to lower sale prices to reduce inventory level or to pay higher prices to our suppliers in order to secure the right to return products to our suppliers, our profit margins might be negatively affected. Any of the above may materially and adversely affect the results of operations and financial condition.

Any changes or disruption in our shipping arrangements or any interruptions in shipping could adversely affect our results of operations.

We primarily rely international and domestic courier and logistic companies for the shipping from the suppliers, DHL, FedEx, UPS, or SF Express. If we are not able to negotiate acceptable pricing and other terms with these entities, if they significantly increase their shipping charges or they experience performance difficulties, including as a result of the pandemic, natural disaster, force majeure events, or other difficulties, it could negatively impact our results of operations and our customer experience. In addition, our ability to receive inbound inventory efficiently and ship merchandise to customers may be negatively affected by the pandemic and related response measures, inclement weather, fire, flood, power loss, earthquakes, labor disputes, acts of war or terrorism, trade embargoes and similar factors. For example, strikes at major international shipping ports may in the future impact our supply of inventory from our supply partners, and the escalating trade disputes between the United States, the European Union, China and certain other regions could lead to increased tariffs on our goods and restrict the flow of the goods between the United States the European Union. We are also subject to risks of damage or loss during delivery by our shipping vendors. Any of these factors could result in reduced sales or canceled orders, which may limit our growth and damage our reputation. If our merchandise is not delivered in a timely fashion or is damaged or lost during the delivery process, our customers could become dissatisfied and cease shopping on our sites, which would have a material adverse effect on our business, financial condition, results of operations and prospects.

We are subject to credit risk in relation to the collectability of our trade receivables from customers.

We usually do not offer a credit period to our customers; customers are required to make payment in advance or pay upon delivery. Under some circumstances, customers may settle the sales proceeds after delivery, but the aging of such receivables would normally be less than 30 days. We cannot assure you that our customers will make payment in full to us on a timely basis. Delays in receiving payments from or non-payment by our customers may result in pressure on our cash flow position and our ability to meet our working capital requirements. Our liquidity and cash flows from operations may be materially and adversely affected if our collection periods lengthen further or if we encounter any material defaults of payment, or provisions for impairment, of our trade receivables from customers. Should these events occur, we may be required to obtain working capital from other sources, such as from third-party financing, in order to maintain our daily operations, and such financing from outside sources may not be available at acceptable terms or at all.

We may incur liability or become subject to claims or penalties for counterfeit, infringing, illegal or stolen products inadvertently sold by us or through us, and our reputation and results of operations could be materially and adversely affected.

We purchase the luxury watches we sell from a variety of suppliers and distribution methods, so are subject to the risk that counterfeit, infringing, illegal or stolen goods could be sold through us. We have taken steps to prevent potential violation of third parties’ intellectual property rights while sourcing and selling products, as well as to confirm the authenticity of the watch sold by us and we reject items we believe to be counterfeit. We also conduct due diligence on our suppliers and have quality control procedures in place to ensure and verify that luxury watches and product sold through us are authentic. However, these measures may not always be successful. We cannot assure you that we are able to identify any and all unauthorized, counterfeit or illegal products, given the large number of luxury watches being inspected.

Manufacturers and distributors of counterfeit goods are also increasingly sophisticated, it may be increasingly difficult to identify counterfeit watches and their components, parts and accessories. To the date of this annual report, we have not encountered any issue regarding distributing counterfeit watches in the course of our business. In the event that counterfeit, unauthorized, or infringing products are sold by us or infringing content is posted by us, we could face claims that may subject us to liabilities. Any sale of counterfeit goods or the discovery of counterfeit products sold under our brand names and trademarks could significantly harm our reputation, cause existing or potential customers to refrain from making future purchases from us, which would materially and adversely affect our business operations and financial results, could result in brand owners making legal claims against us for infringement of trademark, copyright or other intellectual property rights. From time to time in the ordinary course of our business, buyers, brand owners or other third parties may allege that counterfeit products have been sold by us or through our platform. Any perception that our platform may contain counterfeit goods, even without merit, could have a material and adverse impact on our reputation.

Furthermore, if we fail to identify any infringing or counterfeiting watches, including components and parts or accessories and such products are sold to purchasers, we risk facing infringement claims, which would also be bad for our reputation. Regardless of the truth of such accusations, we could have to spend a lot of money and time defending ourselves or settling them. We can be forced to pay significant damages if the lawsuit against us is found to be valid or stop marketing the relevant items. If we were to be held to have sold or facilitated the sale of counterfeit goods, potential legal sanctions may include injunctions to cease infringing activities, rectification, compensation, administrative penalties and even criminal liability, depending on the governing law and the seriousness of the misconduct. Moreover, such third-party claims or administrative penalties could result in negative publicity and our reputation could be severely damaged. In addition, stolen products that unknowingly sold by us could also result in negative publicity, and thus damage our reputation. Pursuant to the Hong Kong laws, we would be subject to criminal liability if we knowingly engage in any sale of stolen good that we sourced from other parties. We may implement further measures in an effort to strengthen our protection against these potential liabilities, which could require us to spend substantial resources or discontinue certain service offerings. Any costs incurred as a result of liability or asserted liability relating to the sale of unlawful goods or other infringement could harm our business.

We depend on our in-house team of trained experts, to ensure the authenticity of the luxury watches we sell. If we fail to identify counterfeit goods or it is unable to recruit and train qualified professionals for quality control and assurance, our business may be materially and adversely affected.

We believe that an important measure to maintain buyer confidence in the Top Win brand is to provide buyers with the assurance that the items they purchase are authentic. Our in-house team of appraisers and watch technicians authenticate all watches goods sold by us. Each time piece we sourced is authenticated and appraised. However, there can be no assurance that our in-house team of appraisers and watch technicians will identify all counterfeit goods and not certify such goods as genuine. Any failure by us to identify counterfeit goods could significantly harm our reputation and could result in brand owners making legal claims for infringement of trademark, copyright or other intellectual property rights, which in turn could materially and adversely affect our results of operations and prospects.

As our business grows, we may need to retain additional watch technicians, and we could experience a backlog if we are unable to increase the size and efficiency of our watch technicians team as we grow. The market competition for experienced luxury goods authentication professionals, especially watch authentication, is intense, and there is no assurance that we will be able to hire and retain a sufficient number of professionals with the required experience on acceptable terms or that our training programs for new ateliers will be effective. Furthermore, counterfeiters and the products they produce are increasingly sophisticated, such that there can be no assurance that our technicians will be able to consistently differentiate between authentic and counterfeit goods. If we are unable to grow our team of watch technicians at the rate, and with the degree of sophistication, that we expect to require as our business grows, our authentication capabilities could be impacted, which could result in counterfeit or defective products being sold through us. Any of the foregoing could have a material and adverse effect on our business, results of operations and prospects.

Our revenue flow is subject to seasonality and a variety of factors.

Revenue fluctuations throughout the year are common for the watch industry which is subject to the seasonal and festival purchase patterns of consumers. Our sales vary from month to month and we generally record higher sales revenue during major holidays and summertime, such as Chinese New Year, Valentine’s Day, PRC Labor Festival, National Day and Christmas. Further, our revenue flow and periodical financial performance are also subject to a variety of factors, including changes in our products, the effectiveness of our inventory management, timing and effectiveness of our marketing activities, actions by our existing and new competitors, and employee motivation and effectiveness, among others. Accordingly, any comparison of sales and results of operations between different periods within a single financial year is not necessarily meaningful and cannot be relied on as indicators of our Group’s performance. Any seasonal fluctuations in the future may not match the expectations of investors and could cause fluctuations in the trading price of our Shares.

We may implement business strategies and future plans that may not be successful.

The successful implementation of our business strategies and future plans depends on a number of factors including general market conditions, government policies, the availability of funds, competition and our ability to retain and recruit competent employees. There is no assurance that our business strategies and future plans can be implemented effectively and successfully, as some of these factors are beyond our control. If any implementation of these strategies and plans fails or is delayed, we may be adversely affected by investment expenses that have not led to the anticipated results, by the distraction of management from our core business or by damage to our brand or reputation. Additionally, if we fail to secure adequate funds in a timely manner, we may also be unable to pursue opportunities to expand our business.

Any harm to our brand or reputation may materially and adversely affect our business and results of operations.

Brand recognition and reputation are invaluable assets in the luxury goods market. We believe that the recognition and reputation of our Top Win brand among our customers, in particular, the luxury watch dealers, our suppliers, merchants and individual buyers have contributed significantly to the growth and success of our business. Maintaining and enhancing such brand recognition and reputation are critical to our business and competitiveness. Many factors, including those beyond our control, are important to maintaining and enhancing our brand. These factors include our ability to:

Any public perception (i) that counterfeit watches or unauthorized or stolen watches are sold by us, (ii) that we, or our third-party service providers, do not provide satisfactory customer service or (iii) that we infringe upon any brand owners’ intellectual property rights could damage our reputation, diminish our brand value, undermine our credibility and adversely impact our business. If we are unable to maintain our reputation, enhance our brand recognition or increase positive awareness of our brand, products and services, we may be difficult to maintain and grow our customer base, and our business and growth prospects may be materially and adversely affected. We cannot assure you that any allegations, complaints and claims will not be made against us in the future. Any allegations, complaints or claims against us, regardless of their validity, could cause negative publicity, give rise to potential liability and adversely affect our reputation and the price of our shares. In addition, we may have to divert management and other resources to address relevant allegations, complaints or claims which may adversely affect our business and results of operations. If any complaint escalates to become a claim against us, even unsuccessful, we may have to divert resources to address the claim. In the event that our insurance coverage is inadequate, we may have to pay out of our own resources to compensate the personnel for any damages suffered if the court does not rule in our favor based on its interpretation of the facts of such claims and we are found to be at fault.

Our business depends to a significant extent upon general economic conditions, consumer demand, preferences and discretionary spending patterns, we may be adversely affected if our customers’ purchasing patterns change due to negative economic trends.

Since we primarily trade luxury watches, our target customers are high-end clients whose purchase patterns are sensitive to economic trends. Our business is significant exposed to the volatility of the general economic conditions and reductions in disposable income levels and discretionary consumer spending. Consumers’ willingness to purchase luxury watches may fluctuate as a result of changes in national, regional or global economic conditions, disposable income, discretionary spending, lifestyle choices, public perception of life style, publicity and image of the watch we trade. Future economic conditions such as employment levels, business conditions, housing, interest rates, inflation rates, energy and fuel costs and tax rates could reduce consumer spending or change consumer purchasing habits. The demand for luxury watches may be adversely affected from time to time by economic downturns.

During economic downturns, high-end customers may become more cautious with their discretionary spending, opting to delay or reduce purchases of luxury items, including watches. This shift in consumer behavior could result in decreased demand for our products, negatively impacting our sales and revenue. Prolonged economic instability could further exacerbate this trend, challenging our ability to maintain our market presence and profitability. If the weak economy continues for a prolonged period of time or worsens, the consumers may choose to spend discretionary money less frequently which could result in a decline in consumers’ purchases of luxury items, consequently, the businesses of our customers. If our customers’ sales decrease, our profitability could decline. Moreover, if the negative economic conditions persist for an extended period of time, consumers might ultimately make long-lasting changes to their discretionary spending behavior, including their spending on watches. Accordingly, adverse changes to consumer preferences or consumer discretionary spending, each of which could be affected by many different factors which are out of our control, could harm our business, financial condition or results of operations. Our continued success will depend in part upon our ability to anticipate, identify and respond to changing economic and other conditions and the impact that they may have on discretionary consumer spending. If we fail to successfully adapt our business strategy, brand image and product portfolio to changes in market trends or shifts in consumer preferences and spending patterns, our business, financial conditions and results of operations may be materially and adversely affected.

We are affected by the macroeconomic, political, regulatory, social and other factors beyond our control mainly in Hong Kong.

Currently, we have our entire operations in Hong Kong. We are affected by macroeconomic factors, such as general economic conditions, population growth, infrastructure development, and market sentiment which are in part, influenced by government spending, infrastructure spending, unemployment rates, real disposable income, inflation, recession, stock market performance, interest rate environment, regulatory policies, foreign investment, gross domestic product growth, business sentiment and economic outlook, all of which are beyond our control. Moreover, political and social stability, taxation, price and exchange control regulations, industry laws and regulations in Hong Kong. There is no assurance that such conditions will not develop in a manner that will have an adverse effect for our operations and financial performance.

Acts of God, acts of war, epidemics and other disasters could materially and adversely affect our business.

Our business is subject to the general and social conditions in Hong Kong and other jurisdictions in or to which the watches we are trading are made, distributed or bought. Natural disasters, epidemics, acts of God and other disasters that are beyond our control could adversely affect the economy, infrastructure and livelihood of the people of such jurisdictions. Our business, results of operations and financial conditions could be adversely affected if these natural disasters occur. Moreover, political unrest, wars and terrorist attacks may cause damage or disruption to us, our employees, suppliers or customers, any of which could adversely affect our business, results of operations, financial conditions or share price. Potential war or threat of terrorist attacks may also cause uncertainty and cause our business to suffer in ways that we cannot currently predict. We cannot control the occurrence of these catastrophic events and our business operations will at the times be subject to the risks of these uncertainties.

Any future occurrence of force majeure events, natural disasters or outbreaks of contagious diseases, including the COVID-19 outbreak, may materially and adversely affect our business, financial conditions and results of operations.

Any future occurrence of force majeure events, natural disasters or outbreaks of epidemics and contagious diseases, including avian influenza, severe acute respiratory syndrome, H1N1 influenza, Ebola virus and the COVID-19 outbreak in Hong Kong, the PRC and other jurisdictions may materially and adversely affect our business, financial conditions and results of operations. An outbreak of an epidemic or contagious disease or other adverse public health developments in the world could result in a widespread health crisis and restrict the level of business activities in affected areas, which may, in turn, materially and adversely affect our business. We cannot assure you that any future occurrence of natural disasters or outbreaks of epidemics and contagious diseases, or the measures taken by the government of different countries in response to such contagious diseases will not seriously disrupt our operations or those of our customers or suppliers, which may materially and adversely affect our business, financial conditions and results of operations.

Failure to comply with cybersecurity, data privacy, data protection, or any other laws and regulations related to data may materially and adversely affect our business, financial condition, and results of operations.

We may be subject to a variety of cybersecurity, data privacy, data protection, and other laws and regulations related to data, including those relating to the collection, use, sharing, retention, security, disclosure, and transfer of confidential and private information, such as personal information and other data. These laws and regulations, such as the Data Protection Act (As Revised) of the Cayman Islands, apply not only to third-party transactions, but also to transfers of information within our organization, which relates to our investors, employees, contractors and other counterparties. These laws and regulations may restrict our business activities and require us to incur increased costs and efforts to comply, and any breach or non-compliance may subject us to proceedings against us, damage our reputation, or result in penalties and other significant legal liabilities, and thus may materially and adversely affect our business, financial conditions, and results of operations.

We are dependent on our senior management team and other key employees, and the loss of any such personnel could materially and adversely affect our business, operating results and financial conditions.

Our success is, to a large extent, attributable to our executive director’ strategies and visions as well as their involvement in key aspects of our business, including but not limited to the acquisition and maintenance of new and existing customer relationships, pricing of our products, and overall management of our operations. In addition, our sales team has contributed significantly to our past success. Their sensitivity to the trends of watch trading industry is essential to our business. Further, our team of executive officers and sales possess extensive industry contacts and knowledge and are familiar with our business operations and have established good relationships with our customers.

Our success and growth therefore depend on our ability to identify, hire, train and retain suitable, skilled and qualified key personnel. The loss of service of our executive officers, sales team, or other key personnel without suitable and timely replacements or the inability to attract and retain qualified management personnel, will materially and adversely affect our operations and financial performance.

Our management team lacks experience in managing a U.S. public company and complying with laws applicable to such company, the failure of which may adversely affect our business, financial condition and results of operations.

Our current management team lacks experience in managing a U.S. publicly traded company, interacting with public company investors and complying with the increasingly complex laws pertaining to U.S. public companies. Prior to the completion of the IPO, we were a private company mainly operating our businesses in Hong Kong. As a result of the IIPO, our Company became subject to significant regulatory oversight and reporting obligations under the federal securities laws and the scrutiny of securities analysts and investors, and our management currently has limited experience in complying with such laws, regulations and obligations. Our management team may not successfully or efficiently manage our transition to becoming a U.S. public company. These new obligations and constituents will require significant attention from our senior management and could divert their attention away from the day-to-day management of our business, which could adversely affect our business, financial condition and results of operations.

Our lack of effective internal controls over financial reporting may affect our ability to accurately report our financial results or prevent fraud which may affect the market for and price of our Ordinary Share.

To implement Section 404 of the Sarbanes-Oxley Act of 2002, the SEC adopted rules requiring public companies to include a report of management on our internal control over financial reporting. Prior to the initial public filing, we were a group of private companies with limited accounting personnel and other resources for addressing our internal control over financial reporting. Our management has completed an assessment of the effectiveness of our internal control over financial reporting and our independent registered public accounting firm has not conducted an audit of our internal control over financial reporting.  However, in connection with the audits of our consolidated financial statements for the years ended December 31, 2024, 2023 and 2022, we and our independent registered public accounting firm identified material weaknesses in our internal control over financial for the above mentioned periods.  As defined in the standards established by the PCAOB, a “material weakness” is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

Material weaknesses that have been identified are summarized as the followings: (1) our lack of appropriate levels of accounting knowledge and experience to address complex U.S. GAAP accounting issues and related disclosures, in accordance with U.S. GAAP and SEC financial reporting requirements; (2) our lack of an internal audit function to establish formal risk assessment process and internal control framework; and (3) our lack of proper IT control environment and the deficiencies identified in control areas including Logical Assess Management, Change Management, IT operation as well as Cyber Security Management.

We intend to implement measures designed to improve our internal control over financial reporting to address the underlying causes of these material weaknesses, including: (i) recruiting additional full-time employees and external consultants with extensive knowledge of U.S. GAAP within our finance and accounting department; (ii) conducting regular and continuous U.S. GAAP training programs and webinars for our financial reporting and accounting personnel; (iii) continuously developing and enhancing our internal audit function for the financial reporting matters; and (iv) strengthening our IT control environment and procedures by engaging third party expertise in introducing and implementing the required changes to the overall IT environment and required upgrades to our systems. However, the implementation of these measures may not fully address the deficiencies in our internal control over financial reporting. We are not able to estimate with reasonable certainty the costs that we will need to incur to implement these and other measures designed to improve our internal control over financial reporting.

Pursuant to the JOBS Act, we qualify as an “emerging growth company” as we recorded revenues less than US$1.235 billion in our most recent fiscal year, which allows us to take advantage of specified reduced reporting and other requirements that are otherwise applicable generally to public companies. These provisions include exemption from the auditor attestation requirement under Section 404 of the Sarbanes-Oxley Act, in the assessment of the emerging growth company’s internal control over financial reporting.

We will be subject to the requirement that we maintain internal controls and that management perform periodic evaluation of the effectiveness of the internal controls. Effective internal control over financial reporting is important to prevent fraud. As a result, our business, financial condition, results of operations and prospects, as well as the market for and trading price of our Ordinary Shares, may be materially and adversely affected if we do not have effective internal controls. We may not discover any problems in a timely manner and current and potential shareholders could lose confidence in our financial reporting, which would harm our business and the trading price of our Ordinary Shares. The absence of internal controls over financial reporting may inhibit investors from purchasing our Ordinary Shares and may make it more difficult for us to raise funds in a debt or equity financing. Additional material weaknesses or significant deficiencies may be identified in the future. If we identify such issues or if we are unable to produce accurate and timely financial statements, our stock price may decline, and we may be unable to maintain compliance with the NASDAQ listing rules.

We are subject to risks relating to litigation and disputes, which could adversely affect our business, prospects, results of operations and financial conditions, and may face significant liabilities as a result.

We may be subject to litigation, disputes or claims of various types brought by our competitors, suppliers, customers, employees, business partners, lenders or other third parties. We cannot assure you that we will not be subject to disputes, complaints or legal proceedings in the future, which may damage our reputation, evolve into litigations or otherwise have a material adverse impact on our reputation and business.

Should any future claims against us fall outside the scope and/or limit of insurance coverage, our financial position may be adversely affected. Regardless of the merits, legal proceedings can be time-consuming and costly, and may divert our management’s attention away from our business operation, thereby adversely affecting our business operation and financial position. Legal proceedings which result in unfavorable judgment against us may cause financial losses and damages to our reputation, thereby materially and adversely affecting our business, financial position, results of operations and prospect.

We may grow, in part, through acquisitions, which involve various risks, and we may not be able to identify or acquire companies consistent with our growth strategy or successfully integrate acquired businesses into our operations.

We may intend to pursue opportunities to expand our business by acquiring other companies in the future. Acquisitions involve risks, including those relating to:

Acquisitions also may affect our short-term cash flow and net income as we expend funds, potentially increase indebtedness and incur additional expenses. If we are not able to identify or acquire companies consistent with our growth strategy, or if we fail to successfully integrate any acquired companies into our operations, we may not achieve anticipated increases in revenue, cost savings and economies of scale, our operating results may actually decline and acquired goodwill and intangibles may become impaired.

We may not be able to obtain finance from time to time to fund our operations and maintain growth.

In order to fund our operations and maintain our growth or expand our business beyond the scale permitted by the net proceeds from the initial public offering, we may need to obtain future funding including equity financing or banking facilities from our banks from time to time. However, we may face the limitation of not having sufficient amount of security or pledge to secure additional debt financing. Further, there may be occasions where we are unable to obtain financing at commercial terms favorable or acceptable to us or at all. If these circumstances arise, our business, results of operations, and growth could be compromised.

Risks Relating to Doing Business in Hong Kong

All of our operations are in Hong Kong. However, due to the long arm application of the current PRC laws and regulations, the PRC government may exercise significant direct oversight and discretion over the conduct of our business and may intervene or influence our operations, which could result in a material change in our operations and/or the value of our Ordinary Shares. Our Operating Subsidiary in Hong Kong may be subject to the PRC laws and regulations, which may impair our ability to operate profitably and result in a material negative impact on our operations and/or the value of our Ordinary Shares. Furthermore, the changes in the policies, regulations, rules, and the enforcement of the PRC laws and regulations may also occur quickly with little advance notice and our assertions and beliefs of the risk imposed by the PRC legal and regulatory system cannot be certain.

We have no operations in Mainland China. Our Operating Subsidiary are located and operate their business in Hong Kong, a special administrative region of the PRC. Pursuant to the Basic Law of Hong Kong (“Basic Law”), national laws of Mainland China do not apply in Hong Kong unless they are listed in Annex III of the Basic Law and applied locally by promulgation or local legislation. National laws that may be listed in Annex III are currently limited under the Basic Law to those which fall within the scope of defense and foreign affairs as well as other matters outside the limits of the autonomy of Hong Kong National laws and regulations relating to data protection, cybersecurity and the anti-monopoly have not been listed in Annex III and so do not apply directly to Hong Kong.

However, due to long-arm provisions under the current PRC laws and regulations, there remain regulatory and legal uncertainty with respect to the implementation of the PRC laws and regulations to Hong Kong. As a result, there is no guarantee that the PRC government may not choose to implement the PRC laws and regulations to Hong Kong and exercise significant direct influence and discretion over the operation of our Operating Subsidiary in the future and, it will not have a material adverse impact on our business, financial condition and results of operations, due to changes in laws, political environment or other unforeseeable reasons.

In the event that we or our Hong Kong Operating Subsidiary were to become subject to the PRC laws and regulations, it is possible that all the legal and operational risks associated with being based in and having operations in Mainland China may also apply to the operations in Hong Kong in the future, and we face the risks and uncertainties associated with the PRC legal system, complex and evolving PRC laws and regulation, and as to whether and how the recent PRC government statements and regulatory developments, such as those relating to data and cyberspace security and anti-monopoly concerns, would be applicable to a companies like our Operating Subsidiary and us, given the substantial operations of our Operating Subsidiary in Hong Kong and the Chinese government may exercise significant oversight over the conduct of business in Hong Kong.

The laws and regulations in Mainland China are evolving, and their enactment timetable, interpretation, enforcement, and implementation involve significant uncertainties and may change quickly with little advance notice, along with the risk that the PRC government may intervene or influence our Operating Subsidiary’ operations at any time could result in a material change in our operations and/or the value of our securities. Moreover, there are substantial uncertainties regarding the interpretation and application of PRC laws and regulations including, but not limited to, the laws and regulations related to our business and the enforcement and performance of our arrangements with clients in certain circumstances. The laws and regulations are sometimes vague and may be subject to future changes, and their official interpretation and enforcement may involve substantial uncertainty. The effectiveness and interpretation of newly enacted laws or regulations, including amendments to existing laws and regulations, may be delayed, and our business may be affected if we rely on laws and regulations which are subsequently adopted or interpreted in a manner different from our understanding of these laws and regulations. New laws and regulations that affect existing and proposed future businesses may also be applied retroactively. We cannot predict what effect the interpretation of existing or new PRC laws or regulations may have on our business.

The laws, regulations, and other government directives of the PRC may also be costly to comply with, and such compliance or any associated inquiries or investigations or any other government actions may:

We are aware that recently, the PRC government initiated a series of regulatory actions and statements to regulate business operations in certain areas in Mainland China with little advance notice, including cracking down on illegal activities in the securities market, enhancing supervision over Mainland China-based companies listed overseas using a variable interest entity structure, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement. We have no operations in Mainland China. Based on our understanding of the PRC laws and regulations currently in effect as of the date of this annual report, as our Operating Subsidiary are located in Hong Kong, we are not currently required to obtain permission from the PRC government to list on a U.S. securities exchange. However, there is no guarantee that this will continue to be the case in the future in relation to the continued listing of our securities on a securities exchange outside of the PRC, or even when such permission is obtained, it will not be subsequently denied or rescinded.

The PRC government may intervene or influence our operations at any time or may exert control over offerings conducted overseas and foreign investment in Hong Kong-based issuers, which may result in a material change in our operations and/or the value of our Ordinary Shares. For example, there is currently no restriction or limitation under the laws of Hong Kong on the conversion of HK dollar into foreign currencies and the transfer of currencies out of Hong Kong and the laws and regulations of the PRC on currency conversion control do not currently have any material impact on the transfer of cash between the ultimate holding company and the Operating Subsidiary in Hong Kong.

The PRC government may, in the future, impose restrictions or limitations on our ability to move money out of Hong Kong to distribute earnings and pay dividends to and from the other entities within our organization or to reinvest in our business outside of Hong Kong. Such restrictions and limitations, if imposed in the future, may delay or hinder the expansion of our business to the outside of Hong Kong and may affect our ability to receive funds from our Operating Subsidiary in Hong Kong. The promulgation of new laws or regulations, or the new interpretation of existing laws and regulations, in each case, that restrict or otherwise unfavorably impact the ability or way we conduct our business, could require us to change certain aspects of our business to ensure compliance, which could decrease demand for our services, reduce revenues, increase costs, require us to obtain more licenses, permits, approvals or certificates, or subject us to additional liabilities. To the extent any new or more stringent measures are required to be implemented, our business, financial condition and results of operations could be adversely affected and such measured could materially decrease the value of our Ordinary Shares, potentially rendering it worthless.

There remain some uncertainties as to whether we will be required to obtain approvals from the PRC authorities to list on the U.S. exchanges and offer securities in the future, and if required, we cannot assure you that we will be able to obtain such approval. We may become subject to a variety of PRC laws and other obligations regarding data security in relation to offerings that are conducted overseas and/or foreign investment in Mainland China-based issuers, and any failure to comply with applicable laws and obligations could have a material and adverse effect on our business, financial condition and results of operations and may hinder our ability to offer or continue to offer Ordinary Shares to investors and cause the value of our Ordinary Shares to significantly decline or be worthless.

On June 10, 2021, the Standing Committee of the National People’s Congress enacted the PRC Data Security Law, which took effect on September 1, 2021. The law requires data collection to be conducted in a legitimate and proper manner, and stipulates that, for the purpose of data protection, data processing activities must be conducted based on data classification and hierarchical protection system for data security.

On July 6, 2021, the General Office of the Communist Party of China Central Committee and the General Office of the State Council jointly issued a document to crack down on illegal activities in the securities market and promote the high-quality development of the capital market, which, among other things, requires the relevant governmental authorities to strengthen cross-border oversight of law-enforcement and judicial cooperation, to enhance supervision over China-based companies listed overseas, and to establish and improve the system of extraterritorial application of the PRC securities laws.

On August 20, 2021, the 30^th meeting of the Standing Committee of the 13^th National People’s Congress voted and passed the “Personal Information Protection Law of the People’s Republic of China”, or “PRC Personal Information Protection Law (PIPL)”, which became effective on November 1, 2021. The PIPL stipulates the rules for cross-border provision of personal information and applies to the processing of personal information of natural persons within the territory of Mainland China that is carried out outside of Mainland China where (1) such processing is for the purpose of providing products or services for natural persons within Mainland China, (2) such processing is to analyze or evaluate the behavior of natural persons within Mainland China, or (3) there are any other circumstances stipulated by related laws and administrative regulations. Pursuant to the PIPL, personal data processors (“data processors”) shall meet one of the conditions in order to transmit personal information overseas for their business operations: (i) passing the security evaluation organized by the Cyberspace Administration of China (the “CAC”); (ii) acquiring personal information protection certification from the professional organizations regulated by the CAC; (iii) adopting the standard contract forms stipulated by the CAC when entering into contracts with overseas information receivers, setting forth the rights and obligations of the parties; and (iv) other conditions regulated by laws, regulations and the CAC. Prior to the cross-border provision of personal information of the natural persons, personal information processors shall obtain the approval of the corresponding natural persons and advise them of the overseas receiver’s name, contact information, processing purpose and methods, classification of personal information and information reception procedures, etc.

On December 28, 2021, the CAC jointly with the relevant authorities formally published Measures for Cybersecurity Review (2021) which took effect on February 15, 2022, and replace the former Measures for Cybersecurity Review (2020) issued on July 10, 2021. Measures for Cybersecurity Review (2021) stipulates that in addition to “operator of critical information infrastructure (the “Operator”),” any “data processor” carrying out data processing activities that affect or may affect national security should also be subject to cybersecurity review, and further elaborated the factors to be considered when assessing the national security risks of the relevant activities, including, among others, (i) the risk of core data, important data or a large amount of personal information being stolen, leaked, destroyed, and illegally used or transferred outside the country; and (ii) the risk of critical information infrastructure, core data, important data or a large amount of personal information being affected, controlled, or maliciously used by foreign governments after listing abroad. CAC has said that under the proposed rules companies holding data on more than one million users must apply for cybersecurity approval when seeking listings in other nations because of the risk that such data and personal information could be “affected, controlled, and maliciously exploited by foreign governments.” The cybersecurity review will also investigate the potential national security risks from overseas IPOs.

On December 24, 2021, the China Securities Regulatory Commission (“CSRC”), together with other relevant government authorities in China issued the Provisions of the State Council on the Administration of Overseas Securities Offering and Listing by Domestic Companies (Draft for Comments) and the Measures for the Filing of Overseas Securities Offering and Listing by Domestic Companies (Draft for Comments) (collectively to be referred as the “Draft Overseas Listing Regulations”). The Draft Overseas Listing Regulations requires that a PRC domestic enterprise seeking to issue and list its shares overseas (“Overseas Issuance and Listing”) shall complete the filing procedures of and submit the relevant information to CSRC. The Overseas Issuance and Listing includes direct and indirect issuance and listing.

Where a company whose principal business activities are conducted in Mainland China seeks to issue and list its shares in the name of an overseas enterprise (“Overseas Issuer”) on the basis of the equity, assets, income or other similar rights and interests of the relevant PRC domestic enterprise, such activities shall be deemed an indirect overseas issuance and listing (“Indirect Overseas Issuance and Listing”) under the Draft Overseas Listing Regulations.

On February 17, 2023, the CSRC promulgated the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies (the “Trial Administrative Measures”), which came into effect on March 31, 2023. Compared to the Draft Overseas Listing Regulations, the Trial Administrative Measures further clarified and emphasized that the comprehensive determination of the “indirect overseas offering and listing by PRC domestic companies” shall comply with the principle of “substance over form” and particularly, an issuer will be required to go through the filing procedures under the Trial Administrative Measures if the following criteria are met at the same time: a) 50% or more of the issuer’s operating revenue, total profits, total assets or net assets as documented in its audited consolidated financial statements for the most recent accounting year are accounted for by PRC domestic companies, and b) the main parts of the issuer’s business activities are conducted in Mainland China, or its main places of business are located in Mainland China, or the senior managers in charge of its business operation and management are mostly Chinese citizens or domiciled in Mainland China. On the same day, the CSRC held a press conference for the release of the Trial Administrative Measures and issued the Notice on Administration for the Filing of Overseas Offering and Listing by Domestic Companies, which, among others, provided the exemption from immediate filings for issuers that a) have been listed or have been registered but not yet listed in foreign securities markets, including U.S. markets, prior to the effective date of the Trial Administrative Measures, b) are not required to re-perform the regulatory procedures with the relevant overseas regulatory authority or the overseas stock exchange, and c) will complete the overseas securities offering and listing before September 30, 2023. Nonetheless, such issuers shall carry out the filing procedures as required if they subsequently conduct refinancing or are involved in other circumstances that require filings with the CSRC. Furthermore, the Trial Administrative Measures and its supporting guidelines provide a negative list of types of issuers banned from listing overseas, the issuers’ obligation to comply with national security measures and the personal data protection laws, and certain other matters such as the requirements that an issuer (i) file with the CSRC within three business days after it submits an application for initial public offering to the competent overseas regulator and (ii) file subsequent reports with the CSRC on material events, including change of control and voluntary or forced delisting, after its overseas offering and listing.

Our Operating Subsidiary may collect and store certain data (including certain personal information) from our clients, who may be Mainland China individuals, in connection with our business and operations and for “Know Your Customers” purposes. The Measures for Cybersecurity Review (2021), PRC Data Security Law, the PIPL, and the Draft Overseas Listing Regulations currently does not have an impact on our business, operations, nor do we or our Hong Kong subsidiaries are covered by permission requirements from the CAC that is required to approve our Hong Kong subsidiaries’ operations and our Offering, as our Hong Kong subsidiaries will not be deemed to be an “Operator” or a “data processor” that required to file for cybersecurity review before listing in the United States. Because: (i) our Hong Kong subsidiaries were incorporated in Hong Kong and operate only in Hong Kong without any subsidiary or VIE structure in Mainland China and each of the Measures for Cybersecurity Review (2021), the PIPL, the Draft Overseas Listing Regulations and the Trial Administrative Measures do not clearly provide whether it shall be applied to a company based in Hong Kong; (ii) as of date of this annual report, our Operating Subsidiary has in aggregate collected and stored the personal information of less than one million users and we have acquired the clients’ separate consents for collecting and storing of their personal information and data; (iii) all of the data our Operating Subsidiary have collected is stored in servers located in Hong Kong, and we do not place any reliance on collection and processing of any personal information to maintain our business operation; (iv) as of the date of this annual report, neither of our Operating Subsidiary has been informed by any PRC governmental authority of any requirement that it files for a CSRC review, nor received any inquiry, notice, warning, or sanction in such respect initiated by the CAC or related governmental regulatory authorities; and (v) data processed in our business should not have a bearing on national security nor affect or may affect national security, and we have not been notified by any authorities of being classified as an Operator. Therefore, based on the PRC laws and regulations effective as of the date of this annual report and subject to interpretations of these laws and regulations that may be adopted by Mainland China authorities, neither we, nor our Operating Subsidiary in Hong Kong are currently required to obtain any permission or approval from any PRC government authorities, including the CSRC and CAC, to operate our business or to offer the securities being registered to foreign investors. As of the date of this annual report, neither we nor our Operating Subsidiary have ever applied for any such permission or approval.

Furthermore, based on laws and regulations currently in effect in the PRC as of the date of this annual report, we are not required to obtain regulatory approval from the CSRC or go through the filing procedures under the Trial Administrative Measures before our Ordinary Shares can be listed or offered in the U.S since neither we, nor our subsidiaries, are “PRC domestic companies” which subject to the Trial Administrative Measure, because (i) we are headquartered in Hong Kong, with our officers and all members of the board of directors based in Hong Kong who are not Mainland China citizens; (ii) we do not, directly or indirectly, own or control any entity or subsidiary in Mainland China, nor is it controlled by any Mainland Chinese company or individual directly or indirectly; (iii) we only operate in Hong Kong, all of our revenues and profits are generated by our Operating Subsidiary in Hong Kong, none of our business activities are conducted in Mainland China, and we have not generated revenues or profits from Mainland China in the most recent accounting year accounts for more than 50% of the corresponding figure in our audited consolidated financial statements for the same period; (iv) we do not have or intend to set up any subsidiary or enter into any contractual arrangements to establish a variable interest entity structure with any entity in Mainland China; (v) pursuant to the Basic Law of Hong Kong, or the Basic Law, PRC laws and regulations shall not be applied in Hong Kong except for those listed in Annex III of the Basic Law (which is confined to laws relating to national defense, foreign affairs and other matters that are not within the scope of autonomy).

However, given the uncertainties arising from the legal system in Mainland China and Hong Kong, including uncertainties regarding the interpretation and enforcement of the PRC laws and regulations and the significant authority of the PRC government to intervene or influence the offshore holding company headquartered in Hong Kong, there remains significant uncertainty in the interpretation and enforcement of Draft Overseas Listing Regulations, Trial Administrative Measures, PIPL, relevant Mainland China data privacy, cybersecurity laws and other regulations. It is highly uncertain how soon the legislative or administrative regulation-making bodies will respond and what existing or new laws or regulations or detailed implementations and interpretations will be modified or promulgated, if any. It is also highly uncertain what the potential impact such modified or new laws and regulations will have on the daily business operations of our Operating Subsidiary and the listing of our Ordinary Shares on the U.S. or other foreign exchanges.

Although we are currently not required to obtain approvals from the PRC authorities to operate our business or list on the U.S. exchanges and offer securities, specifically, we are currently not required to obtain any permission or approval from the CSRC, the CAC or any other PRC governmental authority to operate our business or to list our securities on a U.S. securities exchange or issue securities to foreign investors, we cannot assure you that PRC regulatory agencies, including the CAC, would take the same view as we do, and there is no assurance that we can fully or timely comply with such laws. There remains uncertainty as to how the Measures for Cybersecurity Review (2021) will be interpreted or implemented and the relevant PRC governmental authority may not take a view that is consistent with ours. Also, significant uncertainty exists in relation to the interpretation and enforcement of relevant PRC cybersecurity laws and regulations. If we were deemed to be an “operator of critical information infrastructure” or a “data processor” controlling personal information of no less than one million users under the Measures, or if other regulations promulgated in relation to the Measures are deemed to apply to us, our business operations and the listing of our Ordinary Shares in the U.S. could be subject to cybersecurity review by the CAC, in the future. In the event that we are subject to any mandatory cybersecurity review and other specific actions required by the CAC, we face uncertainty as to whether any clearance or other required actions can be completed in a timely fashion or at all. Given such uncertainty, we may be further required to suspend our relevant business, shut down our website, or face other penalties which could materially and adversely affect our business, financial condition, and results of operations. Furthermore, as the Trial Administrative Measures are newly issued, there remains uncertainty as to how it will be interpreted or implemented. Therefore, we cannot assure you that when and whether we will be subject to such filing requirements or will be able to get clearance from the CSRC in a timely manner, or at all, even though we believe that none of the situations that would clearly prohibit overseas listing and offering applies to us.

Furthermore, if the Trial Administrative Measures, Measures for Cybersecurity Review (2021), the PIPL, become applicable to us or our Operating Subsidiary in Hong Kong, our operation and the listing of our Ordinary Shares in the United States could be subject to the CAC’s cybersecurity review or the CSRC Overseas Issuance and Listing review in the future. If the applicable laws, regulations, or interpretations change and our Operating Subsidiary become subject to the CAC or CSRC review, we cannot assure you that our Operating Subsidiary will be able to comply with the regulatory requirements in all respects and our current practice of collecting and processing personal information may be ordered to be rectified or terminated by regulatory authorities. Compliance with these laws and regulations could significantly increase the cost to us of providing our service offerings, require significant changes to our operations or even prevent us from providing certain service offerings in jurisdictions in which we currently operate or in which we may operate in the future.

If there is a significant change to the current political arrangements between Mainland China and Hong Kong, or the applicable laws, regulations, or interpretations change, and/or if we were required to obtain such permissions or approvals in the future in connection with the listing or continued listing of our securities on a stock exchange outside of the PRC, it is uncertain how long it will take for us to obtain such approval, and, even if we obtain such approval, the approval could be rescinded. Any failure to obtain or a delay in obtaining the necessary permissions from the PRC authorities to conduct offerings or list outside of the PRC may subject us to sanctions imposed by the CSRC, CAC, or other PRC regulatory authorities. It could include fines and penalties, proceedings against us, and other forms of sanctions, and our ability to conduct our business, invest into the Mainland China as foreign investments or accept foreign investments, ability to offer or continue to offer Ordinary Shares to investors or list on the U.S. or other overseas exchange may be restricted, and the value of our Ordinary Shares may significantly decline or be worthless, our business, reputation, financial condition, and results of operations may be materially and adversely affected. Any uncertainties and/or negative publicity regarding such an approval requirement could have a material adverse effect on the trading price of our securities.

Compliance with Hong Kong’s Personal Data (Privacy) Ordinance and any such other existing or future data privacy related laws, regulations and governmental orders may entail significant expenses and could materially affect our business.

Although we are not subject to cybersecurity review by the CAC or CSRC nor any other PRC authorities required to obtain regulatory approval regarding the data privacy and personal information requirements from the CAC nor any other PRC authorities for ours and our Operating Subsidiary’ operations in Hong Kong, we are subject to a variety of laws and other obligations regarding data privacy and protection in Hong Kong.

In particular, the Personal Data (Privacy) Ordinance (Chapter 486 of the laws of Hong Kong) (“PDPO”) imposes a duty on any data user who, either alone or jointly with other persons, controls the collection, holding, processing or use of any personal data which relates directly or indirectly to a living individual and can be used to identify that individual. Under the PDPO, data users shall take all practicable steps to protect the personal data they hold from any unauthorized or accidental access, processing, erasure, loss, or use. Once collected, such personal data should not be kept longer than necessary for the fulfilment of the purpose for which it is or is to be used and shall be erased if it is no longer required, unless erasure is prohibited by law or is not in the public interest. The PDPO also confers on the Privacy Commissioner for Personal Data (“Privacy Commissioner”) power to conduct investigations and institute prosecutions. The data protection principles (collectively, the “DPP”), which are contained in Schedule 1 to the PDPO, outline how data users should collect, handle, and use personal data, complemented by other provisions imposing further compliance requirements. The collective objective of DPPs is to ensure that personal data is collected on a fully informed basis and in a fair manner, with due consideration towards minimizing the amount of personal data collected. Once collected, the personal data should be processed in a secure manner and should only be kept for as long as necessary for the fulfilment of the purposes of using the data. Use of the data should be limited to or related to the original collection purpose. Data subjects are given certain rights, inter alia: (a) the right to be informed by a data user whether the data user holds personal data of which the individual is the data subject; (b) if the data user holds such data, to be supplied with a copy of such data; and (c) the right to request correction of any data they consider to be inaccurate. The Commissioner may carry out criminal investigations and institute prosecution for certain offenses. Depending on the severity of the cases, the Privacy Commissioner will decide whether to prosecute or refer cases involving suspected commission to the Department of Justice of Hong Kong. Victims may also seek compensation by civil action from data users for damage caused by a contravention of the PDPO. The Commissioner may provide legal assistance to the aggrieved data subjects if the Commissioner deems fit to do so. See “Regulation”.

We believe that we have been in compliance with the data privacy and personal information requirements of the PDPO. However, if we or our Operating Subsidiary conducting business operations in Hong Kong have violated certain provisions of the PDPO, we could face significant civil penalties and/or criminal prosecution, which could adversely affect our business, financial condition, and results of operations.

If the PRC government chooses to extend the oversight and control over offerings that are conducted overseas and/or foreign investment in Mainland China-based issuers to Hong Kong-based issuers, such action may significantly limit or completely hinder our ability to offer or continue to offer Ordinary Shares to investors and cause the value of our Ordinary Shares to significantly decline or be worthless.

Recent statements, laws and regulations by the PRC government, including the Measures for Cybersecurity Review (2021), the PRC Personal Information Protection Law and the Draft Rules on Overseas Listing published by CSRC on December 24, 2021 also have indicated an intent to exert more oversight and control over offerings that are conducted overseas and/or foreign investments in Mainland China-based issuers. It remains uncertain as to the enactment, interpretation, and implementation of regulatory requirements related to overseas securities offering and other capital markets activities and due to the possibility that laws, regulations, or policies in the PRC could change rapidly in the future.

It remains uncertain whether the PRC government will adopt additional requirements or extend the existing requirements to apply to our Operating Subsidiary. It is also uncertain whether the Hong Kong government will be mandated by the PRC government, despite the constitutional constraints of the Basic Law, to control over offerings conducted overseas and/or foreign investment of entities in Hong Kong, including our Operating Subsidiary. Any actions by the PRC government to exert more oversight and control over offerings (including of businesses, like us, whose operations are entirely in Hong Kong) that are conducted overseas and/or foreign investments in Hong Kong-based issuers could significantly limit or completely hinder our ability to offer or continue to offer securities to investors. If there is a significant change to current political arrangements between Mainland China and Hong Kong, or the applicable laws, regulations, or interpretations change, and, in such event, if we are required to obtain such approvals in the future and we do not receive or maintain the approvals or is denied permission from Mainland China or Hong Kong authorities, we will not be able to list our Ordinary Shares on a U.S. exchange, or continue to offer securities to investors, which would materially affect the interests of the investors and cause significant the value of our Ordinary Shares significantly decline or be worthless.

The enforcement of laws and rules and regulations in the PRC can change quickly with little advance notice. Additionally, the PRC laws and regulations and the enforcement of such that apply or are to be applied to Hong Kong can change quickly with little or no advance notice. As a result, the Hong Kong legal system embodies uncertainties which could limit the availability of legal protections, which could result in a material change in our Operating Subsidiary’ operations and/or the value of the securities we are offering.

As one of the conditions for the handover of the sovereignty of Hong Kong to China, China accepted conditions such as Hong Kong’s Basic Law. The Basic Law ensured Hong Kong will retain its currency (the Hong Kong Dollar), legal system, parliamentary system, and people’s rights and freedom for fifty years from 1997.

This agreement has given Hong Kong the freedom to function with a high degree of autonomy. The Special Administrative Region of Hong Kong is responsible for its domestic affairs, including, but not limited to, the judiciary and courts of last resort, immigration, and customs, public finance, currencies, and extradition. Hong Kong continues using the English common law system. However, if the PRC government attempts to alter its agreement to allow Hong Kong to function autonomously, this could potentially impact Hong Kong’s common law legal system and may in turn bring about uncertainty in, for example, the enforcement of our contractual rights. This could, in turn, materially and adversely affect our Operating Subsidiary’ business and operations. Additionally, intellectual property rights and confidentiality protections in Hong Kong may not be as effective as in the United States or other countries. Accordingly, we cannot predict the effect of future developments in the Hong Kong legal system, including the promulgation of new laws, changes to existing laws or the interpretation or enforcement thereof, or the pre-emption of local regulations by national laws. These uncertainties could limit the legal protections available to us, including the ability to enforce agreements with the customers.

The enactment of the law of the PRC on Safeguarding National Security in the Hong Kong Special Administrative Region (the “Hong Kong National Security Law”) could impact our Hong Kong subsidiaries, which represent substantially all of our business.

On June 30, 2020, the Standing Committee of the PRC National People’s Congress adopted the Hong Kong National Security Law. This law defines the duties and government bodies of the Hong Kong National Security Law for safeguarding national security and four categories of offenses — secession, subversion, terrorist activities, and collusion with a foreign country or external elements to endanger national security — and their corresponding penalties. On July 14, 2020, former U.S. President Donald Trump signed the Hong Kong Autonomy Act, or HKAA, into law, authorizing the U.S. administration to impose blocking sanctions against individuals and entities determined to have materially contributed to the erosion of Hong Kong’s autonomy. On August 7, 2020, the U.S. government imposed HKAA-authorized sanctions on eleven individuals, including former and current Chief Executives of HKSAR, Carrie Lam and John Lee, respectively. On October 14, 2020, the U.S. State Department submitted to relevant committees of Congress the report required under HKAA, identifying persons materially contributing to “the failure of the Government of China to meet its obligations under the Joint Declaration or the Basic Law.” The HKAA further authorizes secondary sanctions, including the imposition of blocking sanctions, against foreign financial institutions that knowingly conduct a significant transaction with foreign persons sanctioned under this authority. The imposition of sanctions may directly affect foreign companies, investment, or financial institutions and any third parties or customers dealing with any foreign entities that is targeted. It is difficult to predict the full impact of the Hong Kong National Security Law and HKAA on Hong Kong and companies located in Hong Kong. If our Hong Kong subsidiaries, which represent substantially all of our business, are determined to be in violation of the Hong Kong National Security Law or the HKAA by competent authorities, our business operations, financial position and results of operations could be materially and adversely affected.

Political risks, including the potential imposition of tariffs, could have an adverse impact on our business operations in Hong Kong.

All of our operations are in Hong Kong. Accordingly, the business operations and financial conditions of our Operating Subsidiary will be affected by the political and legal developments in Hong Kong. Any adverse economic, social and/or political conditions, material social unrest, strike, riot, civil disturbance or disobedience, as well as significant natural disasters, may affect the market and may adversely affect our operations. Given the relatively small geographical size of Hong Kong, any of such incidents may have a widespread effect on our business operations, which could in turn adversely and materially affect our business, results of operations and financial condition.

Hong Kong is a special administrative region of the PRC and the basic policies of the PRC regarding Hong Kong are reflected in the Basic Law, namely, Hong Kong’s constitutional document, which provides Hong Kong with a high degree of autonomy and executive, legislative and independent judicial powers, including that of final adjudication under the principle of “one country, two systems”. However, there is no assurance that there will not be any changes in the political arrangement between PRC and Hong Kong and the economic, political and legal environment in Hong Kong in the future. Since all of our operations are based in Hong Kong, any change of such political arrangements may pose an immediate threat to the stability of the economy in Hong Kong, thereby directly and adversely affecting our results of operations and financial positions.

Based on certain recent development including the Hong Kong National Security Law issued by the Standing Committee of the PRC National People’s Congress in June 2020, the U.S. State Department has indicated that the United States no longer considers Hong Kong to have significant autonomy from China and President Trump signed an executive order and Hong Kong Autonomy Act, or HKAA, to remove Hong Kong’s preferential trade status and to authorize the U.S. administration to impose blocking sanctions against individuals and entities who are determined to have materially contributed to the erosion of Hong Kong’s autonomy. The United States may impose the same tariffs and other trade restrictions on exports from Hong Kong that it places on goods from Mainland China. These and other recent actions may represent an escalation in political and trade tensions involving the U.S, the PRC and Hong Kong, which could potentially harm our business. It is difficult to predict the full impact of the HKAA on Hong Kong and companies with operations in Hong Kong like us. Furthermore, legislative or administrative actions in respect of China-U.S. relations could cause investor uncertainty for affected issuers, including us, and the market price of our Ordinary Shares could be adversely affected.

Tariffs restrictions imposed by the United States on Mainland China exports intensified since 2019 which resulted in a negative impact to the international trading activities globally and have attributed to the overall decrease in the cargo shipment volume of Hong Kong. Since February 2025, the U.S. government has imposed, and has proposed to impose additional, new or higher tariffs on specified products imported from China, and the Chinese government has responded by imposing, and proposing to impose additional, new or higher tariffs on specified products imported from the U.S.  In April 2025, President Trump announced that the United States would impose additional tariffs on most countries, including, among others, a 34% additional tariff on goods imported from China. Following this action, China responded by imposing an additional tariff on goods imported from the United States, and the two countries sequentially further increased the additional tariff charged on each other, bringing the cumulative tariffs imposed on each other to over 100%. Other economies that are affected by increased tariffs by the United States are also considering imposing or increasing tariffs on goods from the United States, although after President Trump announced a 90-day pause on the individualized higher tariff rates for other countries, it is unclear how this situation will develop. As of the date of this annual report, there is still a high degree of uncertainty surrounding U.S. tariff policy, how it will be implemented, and how other countries will react to it. It also remains uncertain whether increased tariffs and trade tensions will create further disruptions and uncertainties to the international trade and lead to a downturn to the global economy. Additionally, the U.S. government continues to signal that it may alter trade agreements and terms between China and the United States, including limiting trade with China, and may impose additional tariffs on imports from China and other countries. In addition, any further escalation in trade tensions between PRC and the United States or a trade war, or the perception that such escalation or trade war could occur, may have materially and negatively impact on the economies of not only the two countries concerned, but the global economy as a whole.

Our vendors are located worldwide/ The current trade tensions between United States and China, and other political events, international trade disputes, could harm or disrupt international commerce and the global economy, and they could have a material adverse effect on us and our customers, our vendors, and our other partners. In addition, political uncertainty surrounding international trade disputes and the potential of their escalation to trade war and global recession could have a negative effect on our profit margin, which could materially and adversely affect our business. We also may have access to fewer business opportunities, and our operations may be negatively impacted as a result. In addition, the current and future actions or escalations by either the United States or China that affect trade relations may cause global economic turmoil and potentially have a negative impact on trade markets, our business, or our results of operations, as well as the financial condition of our clients, and we cannot provide any assurances as to whether such actions will occur or the form that they may take.

Because our business is conducted in Hong Kong dollars and the price of our Ordinary Shares is quoted in United States dollars, changes in currency conversion rates may affect the value of your investments.

Since our business is conducted in Hong Kong, our books and records are maintained in Hong Kong dollars, which is the currency of Hong Kong, and the financial statements that we file with the SEC and provide to our shareholders are presented in United States dollars. Changes in the exchange rate between the Hong Kong dollar and U.S. dollar affect the value of our assets and the results of our operations in United States dollars. The value of the Hong Kong dollar against the United States dollar and other currencies may fluctuate and is affected by, among other things, changes in Hong Kong’s political and economic conditions and perceived changes in the economy of Hong Kong and the United States. Any significant revaluation of the Hong Kong dollar may materially and adversely affect our cash flows, revenue and financial condition. Further, our Ordinary Shares offered by this annual report are denominated in United States dollars, we will need to convert the net proceeds we receive into Hong Kong dollar in order to use the funds for our business. Changes in the conversion rate between the United States dollar and the Hong Kong dollar will affect that amount of proceeds we will have available for our business.

Since 1983, Hong Kong dollars have been pegged to U.S. dollars at the rate of approximately HK$7.80 to US$1.00. We cannot assure you that this policy will not be changed in the future. If the pegging system collapses and Hong Kong dollars suffer devaluation, the Hong Kong dollar cost of our expenditures denominated in foreign currency may increase. This would in turn adversely affect the operations and profitability of our business.

Risks Relating to Our Corporate Structure

Our corporate actions are substantially controlled by Mr. Kwan, NGAI, through his beneficial ownership of Pride River, which will have the ability to control or exert significant influence over important corporate matters that require approval of shareholders, which may deprive you of an opportunity to receive a premium for your Ordinary Shares and materially reduce the value of your investment. Additionally, we may be deemed to be a “controlled company” and may follow certain exemptions from certain corporate governance requirements that could adversely affect our public shareholders.

Pride River Limited, our Controlling Shareholder, beneficially owns 58.1% of our total issued and outstanding Ordinary Shares, representing 58.1% of the total voting power. Accordingly, Pride River has significant influence in determining the outcome of any corporate transaction or other matter submitted to the shareholders for approval, including mergers, consolidations, election of directors and other significant corporate actions. Mr. Kwan, NGAI (the Director and Chief Executive Officer) owns 100% of the equity interest of Pride River. Mr. Ngai is the beneficial owner of all Ordinary Shares held by Pride River.

The interests of our Controlling Shareholder may differ from the interests of our other shareholders. The concentration of ownership may also discourage, delay or prevent a change in control of our company, which could deprive our shareholders of an opportunity to receive a premium for their shares as part of a sale of our company and might reduce the price of our Ordinary Shares. These actions may be taken even if they are opposed by our other shareholders, including those who purchase Ordinary Shares in . Without the consent of our Controlling Shareholder, we may be prevented from entering into transactions that could be beneficial to us or our other shareholders. The concentration in the ownership of our shares may cause a material decline in the value of our shares.

Under the Nasdaq listing rules, a company of which more than 50% of the voting power is held by an individual, group, or another company is a “controlled company” and is permitted to elect to rely, and may rely, on certain exemptions from the obligation to comply with certain corporate governance requirements, including:

We intend to rely on the “controlled company” exemptions under the Nasdaq listing rules. As a result, a majority of the members of our board of directors might not be independent directors and our nominating and corporate governance and compensation committees might not consist entirely of independent directors. As a controlled company you will not have the same protections afforded to shareholders of companies that are subject to all of the corporate governance requirements of Nasdaq.

Our current corporate structure involves unique risks to investors.

Top Win International Limited, or Top Win, is a holding company incorporated in Cayman Islands. As a holding company with no material operations, Top Win conducts all its operations through its operating entities Top Win International Trading Limited incorporated in Hong Kong. Investors in our Ordinary Shares should be aware that they will not and may never directly hold equity interests in the Operating Subsidiary, but rather purchasing equity solely of Top Win, the Cayman Islands holding company. This structure involves unique risks to the investors, and the PRC regulatory authorities, through Hong Kong Government, could disallow this structure, which would likely result in a material change in Top Win’s operations and/or a material change in the value of the securities Top Win is registering for sale, including that such event could cause the value of such securities to significantly decline or become worthless.

All of our operations are conducted by the Operating Subsidiary in Hong Kong. We do not have any operation or maintain office or personnel in Mainland China, nor currently do we have, nor intend to have, any contractual arrangements to establish a variable interest entity (“VIE”) structure with any entity in Mainland China. We are subject to certain legal and operational risks associated with our Operating Subsidiary being based in Hong Kong, having all of its operations to date in Hong Kong and having some customers who are Mainland China individuals or companies that have shareholders or directors that are Mainland China individuals. We are also subject to the risks of uncertainty about any future actions the PRC government or authorities in Hong Kong may take in this regard. Should the PRC government choose to exercise significant oversight and discretion over the conduct of our business, or in the event that we or the Operating Subsidiary were to become subject to PRC laws and regulations, we could incur material costs to ensure compliance, and we or the Operating Subsidiary might be subject to fines, experience devaluation of securities or delisting, no longer be permitted to conduct offerings to foreign investors, and/or no longer be permitted to continue business operations as presently conducted.

We rely on dividends and other distributions on equity paid by our subsidiaries to fund any cash and financing requirements we may have. In the future, funds may not be available to fund operations or for other uses outside of Hong Kong, due to interventions in, or the imposition of restrictions and limitations on, our ability or our subsidiary by the PRC government to transfer cash. Any limitation on the ability of our subsidiaries to make payments to us could have a material adverse effect on our ability to conduct our business and might materially decrease the value of our Ordinary Shares or cause them to be worthless.

Top Win is a holding company incorporated in the Cayman Islands, and we rely on dividends and other distributions on equity paid by our subsidiaries for our cash and financing requirements, including the funds necessary to pay dividends and other cash distributions to our shareholders and service any debt we may incur. We do not expect to pay cash dividends in the foreseeable future. If any of our subsidiaries incurs debt on its own behalf in the future, the instruments governing the debt may restrict its ability to pay dividends or make other distributions to us.

Under the current practice of the Inland Revenue Department of Hong Kong, no tax is payable in Hong Kong in respect of dividends paid by us. There are no restrictions or limitations under the laws of Hong Kong imposed on the conversion of Hong Kong dollar into foreign currencies and the remittance of currencies out of Hong Kong, nor is there any restriction on any foreign exchange to transfer cash between Top Win and its subsidiaries, across borders and to U.S. investors, nor there is any restrictions and limitations to distribute earnings from the subsidiaries, to Top Win and U.S. investors and amounts owed.

Currently, the PRC law and regulations and foreign currency control in Mainland China do not currently have any material impact on the transfer of cash between Top Win, and our Operating Subsidiary, or vice versa. However, the PRC government may, in the future, impose restrictions or limitations on our ability to transfer money out of Hong Kong, to distribute earnings and pay dividends to and from the other entities within our organization, or to reinvest in our business outside of Hong Kong. Such restrictions and limitations, if imposed in the future, may delay or hinder the expansion of our business to outside of Hong Kong and may affect our ability to receive funds from our Operating Subsidiary in Hong Kong. The promulgation of new laws or regulations, or the new interpretation of existing laws and regulations, in each case, that restrict or otherwise unfavorably impact the ability or way we conduct our business, could require us to change certain aspects of our business to ensure compliance, which could decrease demand for our services, reduce revenues, increase costs, require us to obtain more licenses, permits, approvals or certificates, or subject us to additional liabilities. To the extent any new or more stringent measures are required to be implemented, our business, financial condition and results of operations could be adversely affected and such measured could materially decrease the value of our Ordinary Shares, potentially rendering them worthless. Further, any limitation on the ability of our subsidiaries to pay dividends or make other distributions to us could materially and adversely limit our ability to grow, make investments or acquisitions that could be beneficial to our business, pay dividends, or otherwise fund and conduct our business.

The enforcement of foreign civil liabilities in the Cayman Islands and Hong Kong is subject to certain conditions. Therefore, certain judgments obtained against us by our shareholders may be difficult or impossible to enforce in such jurisdictions.

We are a Cayman Islands exempted company and substantially all of our assets are located outside of the United States. In addition, except for Mr. Shuo, CHEN, who is a United States resident, all of our other executive officers, directors and senior management are located in Hong Kong and the nationals and residents of Hong Kong, and substantial portion of their assets are located outside the United States. As a result, it may be difficult or impossible for a shareholder to effect service of process within the United States upon these persons or to enforce against us or them judgments obtained in United States courts, including judgments predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States. Even if the shareholders are successful in bringing an action of this kind, the laws of the Cayman Islands may render the investors unable to enforce a judgment against our assets or the assets of our directors and officers. As a result of all of the above, our shareholders may have more difficulties in protecting their interests through actions against us or our officers, directors or major shareholders than would shareholders of a corporation incorporated in a jurisdiction in the United States.

Although there is no statutory enforcement in the Cayman Islands of judgments obtained in the federal or state courts of the United States (and the Cayman Islands are not a party to any treaties for the reciprocal enforcement or recognition of such judgments), the Grand Court of the Cayman Islands will at common law enforce final and conclusive in personam judgments of state and/or federal courts of the United States of America (the “Foreign Court”) of a debt or definite sum of money against the Company (other than a sum of money payable in respect of taxes or other charges of a like nature, a fine or other penalty (which may include a multiple damages judgment in an anti-trust action) or where enforcement would be contrary to public policy). The Grand Court of the Cayman Islands will also at common law enforce final and conclusive in personam judgments of the Foreign Court that are non-monetary against the Company, for example, declaratory judgments ruling upon the true legal owner of shares in a Cayman Islands company. The Grand Court of the Cayman Islands will exercise its discretion in the enforcement of non-money judgments by having regard to the circumstances, such as considering whether the principles of comity apply. To be treated as final and conclusive, any relevant judgment must be regarded as res judicata by the Foreign Court. A debt claim on a foreign judgment must be brought within six years of the date of the judgment, and arrears of interest on a judgment debt cannot be recovered after six years from the date on which the interest was due. The courts of the Cayman Islands are unlikely to enforce a judgment obtained from the Foreign Court under civil liability provisions of U.S. federal securities law if such a judgment is found by the courts of the Cayman Islands to give rise to obligations to make payments that are penal or punitive in nature. Such a determination has not yet been made by the Grand Court of the Cayman Islands. A court of the Cayman Islands may stay enforcement proceedings if concurrent proceedings are being brought elsewhere. A judgment entered in default of appearance by a defendant who has had notice of the Foreign Court’s intention to proceed may be final and conclusive notwithstanding that the Foreign Court has power to set aside its own judgment and despite the fact that it may be subject to an appeal the time-limit for which has not yet expired. The Grand Court of the Cayman Islands may safeguard the defendant’s rights by granting a stay of execution pending any such appeal and may also grant interim injunctive relief as appropriate for the purpose of enforcement.

According to Hong Kong law, judgment of United States courts will not be directly enforced in Hong Kong. There are currently no treaties or other arrangements providing for reciprocal enforcement of foreign judgments between Hong Kong and the United States. However, the common law permits an action to be brought upon a foreign judgment. A foreign judgment itself may form the basis of a cause of action since the judgment may be regarded as creating a debt between the parties to it. In a common law action for enforcement of a foreign judgment in Hong Kong, the enforcement is subject to various conditions, including but not limited to, that the foreign judgment is a final judgment conclusive upon the merits of the claim, the judgment is for a liquidated amount in a civil matter and not in respect of taxes, fines, penalties, or similar charges, the proceedings in which the judgment was obtained were not contrary to natural justice, and the enforcement of the judgment is not contrary to public policy of Hong Kong. Such a judgment must be for a fixed sum and must also come from a “competent” court as determined by the private international law rules applied by the Hong Kong courts. The defenses that are available to a defendant in a common law action brought on the basis of a foreign judgment include lack of jurisdiction, breach of natural justice, fraud, and contrary to public policy. However, a separate legal action for debt must be commenced in Hong Kong in order to recover such debt from the judgment debtor.

Risks Relating to our Ordinary Shares

Our Ordinary Shares may be prohibited from being traded on a national exchange under the Holding Foreign Companies Accountable Act if the PCAOB is unable to inspect our auditors. The delisting of our Ordinary Shares, or the threat of their being delisted, may materially and adversely affect the value of your investment. Furthermore, on June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act, which was signed into law on December 29, 2022, amending the HFCAA to require the SEC to prohibit an issuer’s securities from trading on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive years instead of three.

The Holding Foreign Companies Accountable Act, or the HFCAA, was enacted on December 18, 2020. The HFCAA states if the SEC determines that we have filed audit reports issued by a registered public accounting firm that has not been subject to inspection by the PCAOB for three consecutive years beginning in 2021, the SEC shall prohibit our shares from being traded on a national securities exchange or in the over-the-counter trading market in the United States.

On March 24, 2021, the SEC adopted interim final rules relating to the implementation of certain disclosure and documentation requirements of the HFCA Act. A company will be required to comply with these rules if the SEC identifies it as having a “non-inspection” year under a process to be subsequently established by the SEC. The SEC is assessing how to implement other requirements of the HFCA Act, including the listing and trading prohibition requirements described above. Furthermore, on June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act (the “AHFCAA”), which was signed into law on December 29, 2022, amending the HFCAA and requiring the SEC to prohibit an issuer’s securities from trading on any U.S. stock exchange if its auditor is not subject to PCAOB inspections for two consecutive years instead of three consecutive years. On September 22, 2021, the PCAOB adopted a final rule implementing the HFCAA, which provides a framework for the PCAOB to use when determining, as contemplated under the HFCAA, whether the PCAOB is unable to inspect or investigate completely registered public accounting firms located in a foreign jurisdiction because of a position taken by one or more authorities in that jurisdiction. On December 2, 2021, the SEC issued amendments to finalize rules implementing the submission and disclosure requirements in the HFCA Act. The rules apply to registrants that the SEC identifies as having filed an annual report with an audit report issued by a registered public accounting firm that is located in a foreign jurisdiction and that PCAOB is unable to inspect or investigate completely because of a position taken by an authority in foreign jurisdictions. On December 16, 2021, the PCAOB issued a Determination Report which found that the PCAOB is unable to inspect or investigate completely registered public accounting firms headquartered in: (i) Mainland China, and (ii) Hong Kong.

On August 26, 2022, the PCAOB announced and signed a Statement of Protocol (the “Protocol”) with the China Securities Regulatory Commission and the Ministry of Finance of the PRC. The Protocol provides the PCAOB with: (1) sole discretion to select the firms, audit engagements and potential violations it inspects and investigates, without any involvement of Chinese authorities; (2) procedures for PCAOB inspectors and investigators to view complete audit work papers with all information included and for the PCAOB to retain information as needed; (3) direct access to interview and take testimony from all personnel associated with the audits the PCAOB inspects or investigates.

On December 15, 2022, the PCAOB issued a new Determination Report which: (1) vacated the December 16, 2021 Determination Report; and (2) concluded that the PCAOB has been able to conduct inspections and investigations completely in the PRC in 2022. The December 15, 2022 Determination Report cautions, however, that authorities in the PRC might take positions at any time that would prevent the PCAOB from continuing to inspect or investigate completely. As required by the HFCAA, if in the future the PCAOB determines it no longer can inspect or investigate completely because of a position taken by an authority in the PRC, the PCAOB will act expeditiously to consider whether it should issue a new determination.

Our auditor, Marcum Asia CPAs LLP, the independent registered public accounting firm that issues the audit report included elsewhere in this annual report, as a firm headquartered in Manhattan, New York and registered with the PCAOB, is subject to laws in the United States pursuant to which the PCAOB conducts regular inspections to assess our auditor’s compliance with the applicable professional standards, and as of the date of this annual report, our auditor is not subject to and not affected by to the PCAOB’s December 2021 Determination Report. However, in the event it is later determined that the PCAOB is unable to inspect or investigate completely the auditor because of a position taken by an authority in a foreign jurisdiction, such as the PRC authorities, then such lack of inspection could cause trading in the Company’s securities to be prohibited under the HFCAA, and ultimately result in a determination by a securities exchange to delist the Company’s securities.

The SEC may propose additional rules or guidance that could impact us if our auditor is not subject to PCAOB inspection. For example, on August 6, 2020, the President’s Working Group on Financial Markets, or the PWG, issued the Report on Protecting United States Investors from Significant Risks from Chinese Companies to the then President of the United States. This report recommended the SEC implement five recommendations to address companies from jurisdictions that do not provide the PCAOB with sufficient access to fulfil its statutory mandate. Some of the concepts of these recommendations were implemented with the enactment of the HFCA Act. However, some of the recommendations were more stringent than the HFCA Act. For example, if a company’s auditor was not subject to PCAOB inspection, the report recommended that the transition period before a company would be delisted would end on January 1, 2022.

The SEC has announced that the SEC staff is preparing a consolidated proposal for the rules regarding the implementation of the HFCA Act and to address the recommendations in the PWG report. It is unclear when the SEC will complete its rulemaking and when such rules will become effective and what, if any, of the PWG recommendations will be adopted. The implications of this possible regulation in addition to the requirements of the HFCA Act are uncertain. Such uncertainty could cause the market price of our Ordinary Shares to be materially and adversely affected, and our securities could be delisted or prohibited from being traded on the national securities exchange earlier than would be required by the HFCA Act. If our Ordinary Shares are unable to be listed on another securities exchange by then, such a delisting would substantially impair your ability to sell or purchase our Ordinary Shares when you wish to do so, and the risk and uncertainty associated with a potential delisting would have a negative impact on the price of our Ordinary Shares.

Further, new laws and regulations or changes in laws and regulations in both the United States and the PRC could affect our ability to list our Ordinary Shares, which could materially impair the market for and market price of our Ordinary Shares.

We may experience extreme stock price volatility unrelated to our actual or expected operating performance, financial condition or prospects, making it difficult for prospective investors to assess the rapidly changing value of our Ordinary Shares.

The trading prices of our Ordinary Shares are likely to be highly volatile and could fluctuate widely due to factors beyond our control. This may happen due to broad market and industry factors, such as performance and fluctuation in the market prices or underperformance or deteriorating financial results of other listed companies based in Hong Kong and China. The securities of some of these companies have experienced significant volatility since their initial public offerings, including, in some cases, substantial price declines in the trading prices of their securities. The trading performances of other Hong Kong and Chinese companies’ securities after their offerings may affect the attitudes of investors towards Hong Kong-based U.S.–listed companies, which consequently may affect the trading performance of our Ordinary Shares, regardless of our actual operating performance. In addition, any negative news or perceptions about inadequate corporate governance practices or fraudulent accounting, corporate structure or matters of other Hong Kong and Mainland Chinese companies may also negatively affect the attitudes of investors towards Hong Kong and Mainland Chinese companies in general, including us, regardless of whether we have conducted any inappropriate activities. Furthermore, securities markets may from time to time experience significant price and volume fluctuations that are not related to our operating performance, which may have a material and adverse effect on the trading price of our Ordinary Shares.

In addition to the above factors, the price and trading volume of our Ordinary Shares may be highly volatile due to multiple factors, including the following:

Any of these factors may result in large and sudden changes in the volume and price at which our Ordinary Shares trades.

Recently, there have been instances of extreme stock price run-ups followed by rapid price declines and strong stock price volatility with several recent initial public offerings, especially among companies with relatively smaller public floats. As a relatively small-capitalization company with relatively small public float, we may experience greater stock price volatility, extreme price run-ups, lower trading volume and less liquidity than large-capitalization companies. In particular, our Ordinary Shares may be subject to rapid and substantial price volatility, low volumes of trades and large spreads in bid and ask prices. Such volatility, including any stock-run up, may be unrelated to our actual or expected operating performance, financial condition or prospects, making it difficult for prospective investors to assess the rapidly changing value of our Ordinary Shares. 

In addition, if the trading volumes of our Ordinary Shares are low, persons buying or selling in relatively small quantities may easily influence prices of our Ordinary Shares. This low volume of trades could also cause the price of our Ordinary Shares to fluctuate greatly, with large percentage changes in price occurring in any trading day session. Holders of our Ordinary Shares may also not be able to readily liquidate their investment or may be forced to sell at depressed prices due to low volume trading. Broad market fluctuations and general economic and political conditions may also adversely affect the market price of our Ordinary Shares. As a result of this volatility, investors may experience losses on their investment in our Ordinary Shares. A decline in the market price of our Ordinary Shares also could adversely affect our ability to issue additional shares of Ordinary Shares or other securities and our ability to obtain additional financing in the future. No assurance can be given that an active market in our Ordinary Shares will develop or be sustained. If an active market does not develop, holders of our Ordinary Shares may be unable to readily sell the shares they hold or may not be able to sell their shares at all.

In the past, shareholders of public companies have often brought securities class action suits against those companies following periods of instability in the market price of their securities. If we were involved in a class action suit, it could divert a significant amount of our management’s attention and other resources from our business and operations and require us to incur significant expenses to defend the suit, which could harm our results of operations. Any such class action suit, whether or not successful, could harm our reputation and restrict our ability to raise capital in the future. In addition, if a claim is successfully made against us, we may be required to pay significant damages, which could have a material adverse effect on our financial condition and results of operations.

If we cannot satisfy, or continue to satisfy, the initial listing requirements and other rules of Nasdaq Capital Market, although we are exempt from certain corporate governance standards applicable to US issuers as a Foreign Private Issuer, our Ordinary Shares may be delisted, which could negatively impact the price of our Ordinary Shares and your ability to sell them.

Our Ordinary Shares are listed on the Nasdaq Capital Market. We cannot assure you that our Ordinary Shares will continue to be listed on the Nasdaq Capital Market. In order to maintain our listing on the Nasdaq Capital Market, we are required to comply with certain rules of Nasdaq Capital Market, including those regarding minimum shareholders’ equity, minimum share price and certain corporate governance requirements. Even if we initially meet the listing requirements and other applicable rules of the Nasdaq Capital Market, we may not be able to continue to satisfy these requirements and applicable rules. If we are unable to satisfy the Nasdaq Capital Market criteria for maintaining our listing, our Ordinary Shares could be subject to delisting.

If the Nasdaq Capital Market delists our Ordinary Shares from trading, we could face significant consequences, including:

As a company incorporated in the Cayman Islands, we are permitted to adopt certain Cayman Islands’ practices in relation to corporate governance matters that differ significantly from the Nasdaq listing standards; these practices may afford less protection to shareholders than they would enjoy if we complied fully with the Nasdaq listing standards.

As a Cayman Islands company listed on the Nasdaq, we are subject to the Nasdaq listing standards. However, the Nasdaq rules permit a foreign private issuer like us to follow the corporate governance practices of its home country. Certain corporate governance practices in the Cayman Islands, which is our home country, may differ significantly from the Nasdaq listing standards. Currently, we do not plan to rely on home country practices with respect to our corporate governance. However, if we choose to follow home country practices in the future, our shareholders may be afforded less protection than they would otherwise enjoy under the Nasdaq rules applicable to U.S. domestic issuers.

We may lose our foreign private issuer status in the future, which could result in significant additional costs and expenses.

We are a foreign private issuer, and therefore, we are not required to comply with all of the periodic disclosure and current reporting requirements of the Exchange Act. The determination of foreign private issuer status is made annually on the last business day of an issuer’s most recently completed second fiscal quarter. We would lose our foreign private issuer status if, for example, more than 50% of our Ordinary Shares are directly or indirectly held by residents of the United States and we fail to meet additional requirements necessary to maintain our foreign private issuer status. If we lose our foreign private issuer status on this date, we will be required to file with the SEC periodic reports and registration statements on U.S. domestic issuer forms, which are more detailed and extensive than the forms available to a foreign private issuer. We will also have to mandatorily comply with U.S. federal proxy requirements, and our officers, directors and principal shareholders will become subject to the short-swing profit disclosure and recovery provisions of Section 16 of the Exchange Act. In addition, we will lose our ability to rely upon exemptions from certain corporate governance requirements under the Nasdaq rules. As a U.S. listed public company that is not a foreign private issuer, we will incur significant additional legal, accounting and other expenses that we will not incur as a foreign private issuer, and accounting, reporting and other expenses in order to maintain a listing on a U.S. securities exchange.

We incurred increased costs as a result of being a public company, particularly after we cease to qualify as an emerging growth company.

After the IPO, we became a public company and have incurred significant legal, accounting and other expenses that we did not incur as a private company. The Sarbanes-Oxley Act of 2002 and the rules subsequently implemented by the SEC and the Nasdaq detailed requirements concerning corporate governance practices of public companies. As a company with less than US$1.235 billion in net revenues for our last fiscal year, we qualify as an “emerging growth company” pursuant to the JOBS Act. An emerging growth company may take advantage of specified reduced reporting and other requirements that are otherwise applicable generally to public companies. These provisions include exemption from the auditor attestation requirement under Section 404 of the Sarbanes-Oxley Act of 2012 relating to internal controls over financial reporting.

These rules and regulations has increased our legal and financial compliance costs and made some corporate activities more time-consuming and costly. After we are no longer an “emerging growth company,” we expect to incur significant expenses and devote substantial management effort toward ensuring compliance with the requirements of Section 404 of the Sarbanes-Oxley Act of 2002 and the other time and attention to our public company reporting obligations and other compliance matters. For example, as a result of becoming a public company, we need to increase the number of independent directors and adopt policies regarding internal controls and disclosure controls and procedures. Operating as a public company makes it more difficult and more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. In addition, we also incur additional costs associated with our public company reporting requirements. It may also be more difficult for us to find qualified persons to serve on our board of directors or as executive officers. We are currently evaluating and monitoring developments with respect to these rules and regulations, and we cannot predict or estimate with any degree of certainty the amount of additional costs we may incur or the timing of such costs.

There can be no assurance that we will not be a passive foreign investment company, or PFIC, for United States federal income tax purposes for any taxable year, which could subject United States investors in our Ordinary Shares to significant adverse United States income tax consequences.

We will be classified as a passive foreign investment company, or PFIC, for any taxable year if either (i) 75% or more of our gross income for such year consists of certain types of “passive” income, or (ii) 50% or more of the value of our assets (determined on the basis of a quarterly average) during such year produce or are held for the production of passive income (the “asset test”). Based upon our current and expected income and assets, including goodwill and the value of the assets held by our strategic investment business, as well as projections as to the market price of our Ordinary Shares, we do not presently expect to be classified as a PFIC for the current taxable year or the foreseeable future.

While we do not expect to be a PFIC, because the value of our assets, for purposes of the asset test, may be determined by reference to the market price of our Ordinary Shares, fluctuations in the market price of our Ordinary Shares may cause us to become a PFIC classification for the current or subsequent taxable years. The determination of whether we will be or become a PFIC will also depend, in part, on the composition and classification of our income, including the relative amounts of income generated by and the value of assets of our strategic investment business as compared to our other businesses. Because there are uncertainties in the application of the relevant rules, it is possible that the U.S. Internal Revenue Service, or IRS, may challenge our classification of certain income and assets as non-passive which may result in our being or becoming a PFIC in the current or subsequent years. In addition, the composition of our income and assets will also be affected by how, and how quickly, we use our liquid assets and the cash raised in the IPO. If we determine not to deploy significant amounts of cash for active purposes, our risk of being a PFIC may substantially increase. Because there are uncertainties in the application of the relevant rules and PFIC status is a factual determination made annually after the close of each taxable year, there can be no assurance that we will not be a PFIC for the current taxable year or any future taxable year.

If we are a PFIC in any taxable year, a U.S. Holder may incur significantly increased United States income tax on gain recognized on the sale or other disposition of our Ordinary Shares and on the receipt of distributions on our Ordinary Shares to the extent such gain or distribution is treated as an “excess distribution” under the United States federal income tax rules, and such holder may be subject to burdensome reporting requirements. Further, if we are a PFIC for any year during which a U.S. Holder holds our Ordinary Shares, we will generally continue to be treated as a PFIC for all succeeding years during which such U.S. Holder holds our Ordinary Shares.

ITEM 4. INFORMATION ON THE COMPANY

4.A. History and Development of the Company

Top Win International Limited (“Top Win”), was incorporated as a Cayman Islands exempted company with limited liability on June 27, 2024 under the laws of the Cayman Islands. As of the date of this annual report, Top Win is authorized to issue a maximum of 100,000,000 Ordinary Shares of par value US$0.0005 each, of which 24,864,000 Ordinary Shares are issued and outstanding. The Ordinary Shares offered in this annual report are those of Top Win International Limited.

Top Win International Limited is a holding company and is not actively engaged in any business, and it conducts operations through the Operating Subsidiary, namely Top Win International Trading Limited (“Top Win Hong Kong”) incorporated under the laws of Hong Kong, on June 15, 2001. Top Win Hong Kong is our operating entity and is indirectly wholly-owned by Top Win through Grand Moon International Limited, an intermediate holding company.

Grand Moon International Limited (“Grand Moon”) was incorporated on June 4, 2024 under the laws of the British Virgin Islands. Grand Moon is wholly owned by Top Win, as the intermediate holding company and not actively engaging in any business.

On July 25, 2024, the Company completed the reorganization through a series of planned transactions. As a result of the Reorganization, the Company has become the holding company for Grand Moon and Top Win Hong Kong.

Immediately before the reorganization, Top Win Hong Kong was wholly owned and controlled by Mr. Hon, SIT and functioned as the sole operational entity. Top Win was established by a registered agent in the Cayman Islands, with the sole purpose of acting as holding company for the Group. On the same day of its incorporation, 100% ownership of Top Win was transferred from the registered agent to Pride River, which at the time was 100% owned by Mr. Sit Hon.

Grand Moon was established by a registered agent in the B.V.I. On July 9, 2024, 100% ownership of Grand Moon, was acquired by Top Win. Subsequently on July 25, 2024, Grand Moon acquired 10,000 shares of Top Win Hong Kong from Mr. Sit Hon, representing the entire issued share capital of Top Win Hong Kong at the time, for a consideration of HK$10,000, thereby completing the reorganization.

On September 16, 2024, the board of directors of Top Win resolved and approved to issued 550 Ordinary Shares with a par value of US$1.00 to Kelven, WONG and Ming Yuk, NGAI, at a consideration of US$1,000,000, respectively.

On October 29, 2024, Mr. Hon, SIT transferred 10,000 Ordinary Shares of Pride River Limited to Mr. Kwan, NGAI, for a consideration of US$10,000,000.

On October 29, 2024, the board of directors of Top Win resolved and approved: (1) to transfer 555 Ordinary Shares from Pride River Limited to Seng Kar Men, at a consideration of US$1,000,000; and (2) to transfer 555 Ordinary Shares from Pride River Limited to Shi Dongqin, at a consideration of US$1,000,000; and (3) to transfer 555 Ordinary Shares from Pride River Limited to Kon Teck Tien, at a consideration of US$1,000,000; and (4) to transfer 555 Ordinary Shares from Pride River Limited to Yang Shengguang, at a consideration of US$1,000,000; and (5) to transfer 555 Ordinary Shares from Pride River Limited to HELPIZO Holdings Inc., at a consideration of US$1,000,000.

On November 20, 2024, Top Win executed a shareholder resolution to (1) approve and adopt amended and restated memorandum and articles of association which dated November 20, 2024; and (2) change the par value of the Ordinary Shares from US$1.00 to $0.0005, a 2,000 for 1 share subdivision (“Share Subdivision”). Pursuant to such resolution, the authorized share capital of Top Win International Limited was US$50,000 divided into 100,000,000 Ordinary Shares with a nominal or par value of US$0.0005 each, in accordance with section 13 of the Cayman Islands Companies Act.

Corporate Structure

The chart below summarizes our corporate structure as of the date of this annual report:

Transfers of Cash to and from Our Subsidiaries

Initial Public Offering

On December 5, 2023, the Company closed its initial public offering of 2,664,000 Ordinary Shares at a public offering price of US$4.00 per Ordinary Share on the National Association of Securities Dealers Automated Quotations (“Nasdaq”). The gross proceeds received from the initial public offering totaled US$10.7 million. The Company’s Ordinary Shares began trading on April 2, 2025 on the Nasdaq Capital Market under the ticker symbol “TOPW.”

Together with Company’s initial public offering, Ming Yuk, NGAI, and Kelven, WONG, the existing shareholders of the Company, have registered the resale of up to 1,300,000 Ordinary Share pursuant to the registration statement on Form F-1 initially filed by the Company with the SEC on November 25, 2024 (File No. 333-283448), which was declared effective on March 27, 2025. Of which, Ming Yuk, NGAI offered to sell 650,000 Ordinary Shares, Kelven, WONG offered to sell 650,000 Ordinary Shares.

As of the date of the annual report, 24,864,000 Ordinary Shares were issued and outstanding.

Change of Directors

On April 24, 2025, the Board of Directors and Nominating Committee of the Company approved and confirmed the resignment of Ziyu ZHANG as a director and Chair of Audit Committee of the Company. Mr. ZHANG is resigning for personal reasons and his decision to resign was not as a result of any disagreements with the Board of the Company on any matter.

On April 24, 2025, the Board of Directors and Nominating Committee of the Company approved and confirmed the appointment of Jung Hui YEN as a director and Chair of Audit Committee of the Company.

Emerging Growth Company Status

As a company with less than US$1.235 billion in revenue for our last fiscal year, we qualify as an “emerging growth company” pursuant to the Jumpstart Our Business Startups Act of 2012, as amended, or the JOBS Act. An emerging growth company may take advantage of specified reduced reporting and other requirements compared to those that are otherwise applicable generally to public companies. These provisions include exemption from the auditor attestation requirement under Section 404 of the Sarbanes-Oxley Act of 2002 in the assessment of the emerging growth company’s internal control over financial reporting. The JOBS Act also provides that an emerging growth company does not need to comply with any new or revised financial accounting standards until such date that a private company is otherwise required to comply with such new or revised accounting standards. Pursuant to the JOBS Act, we have elected to take advantage of the benefits of this extended transition period for complying with new or revised accounting standards. As a result, our operating results and financial statements may not be comparable to the operating results and financial statements of other companies who have adopted the new or revised accounting standards.

We will remain an emerging growth company until the earliest of (i) the last day of the fiscal year during which we have total annual gross revenues of at least US$1.235 billion; (ii) the last day of our fiscal year following the fifth anniversary of the completion of our IPO; (iii) the date on which we have, during the preceding three-year period, issued more than US$1.0 billion in non-convertible debt; or (iv) the date on which we are deemed to be a “large accelerated filer” under the Securities Exchange Act of 1934, as amended, or the Exchange Act, which would occur if the market value of our Ordinary Shares that are held by non-affiliates exceeds US$700 million as of the last business day of our most recently completed second fiscal quarter. Once we cease to be an emerging growth company, we will not be entitled to the exemptions provided in the JOBS Act discussed above.

Foreign Private Issuer Status

We are incorporated in the Cayman Islands, and more than 50 percent of our outstanding voting securities are not directly or indirectly held by residents of the United States. Therefore, we are a “foreign private issuer,” as defined in Rule 405 under the Securities Act and Rule 3b-4(c) under the Exchange Act. As a result, we are not subject to the same requirements as U.S. domestic issuers. Under the Exchange Act, we will be subject to reporting obligations that, to some extent, are more lenient and less frequent than those of U.S. domestic reporting companies. For example, we will not be required to issue quarterly reports or proxy statements. We will not be required to disclose detailed individual executive compensation information. Furthermore, our directors and executive officers will not be required to report equity holdings under Section 16 of the Exchange Act and will not be subject to the insider short-swing profit disclosure and recovery regime. In addition, as a company incorporated in the Cayman Islands, we are permitted to adopt certain home country practices in relation to corporate governance matters that differ significantly from the Nasdaq Stock Market corporate governance requirements. These practices may afford less protection to shareholders than they would enjoy if we complied fully with the Nasdaq Stock Market corporate governance requirements.

Corporate Information

Our principal executive office is located at 33/F, Sunshine Plaza, 353 Lockhart Road, Wan Chai, Hong Kong. The telephone number of our principal executive office is +852 2815 7988. Our registered office and our registered agent’s office in the Cayman Islands are both located at Harneys Fiduciary (Cayman) Limited, 4^th Floor, Harbour Place, 103 South Church Street, P.O. Box 10240, Grand Cayman KY1-1002, Cayman Islands. Our agent for service of process in the United States is Cogency Global Inc., located at 122 East 42^nd Street, 18^th Floor, New York, NY 10168. 

Investors should contact us for any inquiries through the address and telephone number of our principal executive offices. Our websites are https://topw.com.hk/. The information contained on our website is not a part of this annual report.

4B. Business Overview

Our Products

Through our Operating Subsidiary in Hong Kong, Top Win International Trading Limited, we are a wholesaler engaged in trading, distribution, and retail of luxury watches of international brands.

As the purveyor of fine watches, we source luxury products directly or indirectly from authorized dealers, distributors, and brand owners, located in Europe, Japan, Singapore, and other locations, and sell them to our customers, comprising independent watch dealers, watch distributors, and retail buyers within the watch industry. Our strategic location in Hong Kong positions us advantageously within the Asia-Pacific luxury market. This region has seen significant growth in demand for luxury goods, driven by rising disposable incomes and a growing appreciation for high-quality, branded products. We currently offer a selection of over 30 internationally renowned watch brands, including Blancpain, Breguet, Cartier, Chopard, Hermes, IWC, Jaeger, Rolex, Omega, and Longines. We primarily trade watches within the price range of $1,900 to $7,500 with our target customers being middle to high-income earners. This sector has been a significant contributor to our sales, accounting for 50.7%, 83.4% and 80.2% of our total sales in 2024, 2023 and 2022, respectively. Notably, Omega watches have been a major driver of our sales revenue, comprising 49.5% of our total sales revenue in 2024, 81.1% of our total sales revenue in 2023 and 78.2% in 2022.

Our revenue was 17.6 million, $18.8 million and $14.2 million for the years ended December 31, 2024, 2023 and 2022, respectively. We recorded net loss of $42,219 for the year ended December 2024, and net income of $0.2 million and $71,990 for the years ended December 31, 2023 and 2022, respectively. We pride ourselves on operational excellence, which is reflected in our streamlined logistics and distribution processes. Our commitment to maintaining high standards of service and product quality has earned us a reputation for reliability and trustworthiness among our customers and business partners. Our growth strategy includes strengthening our brand recognition and reputation in existing markets, increasing our market presence through expansion into new geographical customers, diversifying our supply network, broadening our product range to include additional luxury brands and other categories, and creating new income streams.

Our Business Operation

The following table sets out some of the international brands featured in our stores

Through our sales network in Hong Kong, the PRC and Southeast Asia, the Company offers over 30 brands of luxury watch products. The company primarily trades watches within the price range of $1,900 to $7,500. This sector has been a significant contributor to our sales, accounting for 50.7%, 83.4% and 80.2% of our total sales in 2024, 2023 and 2022, respectively.

Luxury watches

As of the date of the annual report, we sell a broad portfolio of watches from over 30 international luxury brands on a non-exclusive basis, including Blancpain, Breguet, Cartier, Chopard, Hermes, IWC, Jaeger, Rolex, Omega, and Longines. The selling prices of the most watches we trade are ranging from $1,900 to $7500.

The following table shows a breakdown of the company’s revenue the approximate percentage thereof in relation to the total revenue in respect of watches sold by the company for the three years ended December 31, 2024, 2023 and 2022.

We source luxury watches worldwide, directly authorized watcher dealers, and independent watch suppliers. Over the years, we have built stable procurement routes through consistent and reliable partnerships. We maintain close relationships with a diverse array of suppliers who provide us with daily updates on their product offerings.

As a normal market practice, we do not enter into any long-term agreement with our suppliers. We purchase from these suppliers on an order-by-order basis, from time to time based on the inventory level, customer’s demand and request, and anticipated future demand by the management. This flexible approach enables us to select suppliers based on competitive pricing, ensuring that we consistently procure high-quality timepieces at the best possible prices for our customers.

Our order management is driven by our deep understanding and sensitivity to market trends rather than solely by customer requests. This proactive approach enables us to maintain a stable inventory level. Customers place their orders through our internal platform. Upon mutual confirmation of the orders, we efficiently process and ship the products to our customers. This system ensures streamlined operations and reliable product availability.

Sales and Marketing

We maintain close relationships with a diverse array of suppliers who provide us with daily or weekly updates on their luxury watch offerings. Our sales and marketing team would compare prices, monitor currency rates, and select the most reliable suppliers offering the best prices. The sales team takes the initiative to visit our upstream and downstream partners regularly to gain a comprehensive understanding of what matters most to them. By maintaining close relationships and staying attuned to customer needs, Top Win operates with a high level of efficiency and effectiveness.

As a wholesaler of luxury watches of established brands, we generally leverage the marketing efforts of the brand owners in promoting the brands and focus on spreading in-depth knowledge and enhancing the perception of the specific products we sell. We accomplish these objectives through target exposure of the products, in-person customer visits, and other sales and promotional events.

Our goal and practice have been to formulate effective and tailored marketing strategies that reflect the characteristics of the products being sold and the preferences of our target customers. Depending on our arrangements with our suppliers and the status of a particular product in the market, we may conduct more focused and intensive advertising and promotional activities as necessary.

Additionally, our sales team regularly visits or meets with our customers to educate them about our products. These activities help to cultivate customers’ in-depth knowledge and discerning taste, which we believe is especially important for luxury items sales. These activities enhance our reputation, generate goodwill and loyalty, and further solidify our overall relationship with our customers. We believe that our high-quality sales staff services result in strong word-of-mouth referrals and positive customer reviews, which increase our market recognition. Through word-of-mouth referrals from our existing customers and business contacts, the customers often refer us to their customer network or return to us for their other luxury accessories or other related needs.

Customers and Suppliers

Customers

Our customers primarily consist mainly of business-to-business (B2B) customers, including distributors, independent watch dealers, and retail sellers. Currently, we have strategically focused on business-to-business sales, which would allow us access to our customers’ sales network and consumer base and help us maximize the reach of our sales swiftly and effectively. We have a physical showroom in Hong Kong, which also caters to retail customers.

No written long-term agreements were entered into with any of the business-to-business (B2B) customers. Because of the longstanding and well-established relationship with its watch dealers, we have not imposed any requirement for a minimum quantity of sales to be achieved by any of its watch dealers. All of our sales in Hong Kong are outright sales whereby titles of goods will pass to independent watch dealers upon the delivery of watches to them.

The following table sets forth information as to each customer that accounted for 10% or more of the sale of the company for the fiscal years ended December 31, 2024, 2023 and 2022. All of which are other independent watch dealers.

For the year ended December 31, 2024, there were two customers each generating over 10% of our total revenue for the year, and they in aggregate accounted for approximately 33% of our total revenue for the year.

For the year ended December 31, 2023, there were three customers each generating over 10% of our total revenue for the year, and they in aggregate accounted for approximately 40% of our total revenue for the year.

For the year ended December 31, 2022, there were one customer each generated over 10% of our total revenue for the year, and they in aggregate accounted for approximately 11% of our total revenue for the year.

Although our sales were highly concentrated on our major customers in the fiscal years 2022 and 2023, we did not rely on sales to any single customer. However, the loss of one or more of these clients or a significant reduction in the volume of their purchases, could materially and adversely affect our business and financial performance in the short term. Historically, we have been able to retain a longstanding and well-established relationship with our customers. While we are confident in our ability to continue attracting new customers and adapting to evolving market conditions, any inability to retain or replace key customers could have a material adverse effect on our business, results of operations, and financial condition.

Major Suppliers

We procure the luxury watches we sell from the market ad hoc based on our business objectives and the prevailing market conditions. As such, we generally do not have formal long-term supply arrangements with suppliers of the watches.

Additionally, buying the right products at the right time, such as products with a great potential for value appreciation, is akin to investing. Decisions on the timing and choice of inventory procurement require a significant level of judgment based on industry expertise and insights into the relevant market conditions and other industry factors, which is crucial to the survival and success of luxury watch traders. Top Win has been in the business of importing and selling luxury watches in Hong Kong for 23 years. With our long operating history, established track record, and reputation in the business, we have not experienced significant difficulties in procuring watches globally in accordance with our operational objectives and budgets. Through the volume of products, we purchased over the years, we have established stable relationships with our major suppliers. The value of our purchase from these supplies accounted for a significant portion of our total purchase.

Our commitment to fostering strong supplier relationships is a cornerstone of our business strategy, ensuring our continued success and growth. As part of our commitment to maintaining strong supplier relationships, we regularly visit our suppliers. For new suppliers, we conduct on-site visits to familiarize ourselves with their operations and perform thorough inspections of their products. As our relationships with these suppliers become more stable and mature, and trust is established, we continue to visit them once or twice a year to maintain our relationships. By working closely with our suppliers, we can negotiate favorable terms, such as better pricing, and exclusive access to high-demand or niche products, ensuring a steady supply of the items that our customers demand.

We consider our major suppliers to be those suppliers that account for more than 10% of our overall purchases. As we procure our products from the market ad hoc based on our business objectives and the prevailing market conditions, we do not normally have long-term supply contracts with our suppliers, including our major suppliers.

As of December 31, 2024, we had three major vendors, who accounted for more than 10% of our total purchases. Their respective percentage of our total purchases are as follows:

As of December 31, 2023, we had two major vendors, who accounted for more than 10% of our total purchases. Their respective percentage of our total purchases are as follows:

We had one major vendor for the year ended December 31, 2022, whose purchase accounted for an aggregate of 10% of our total purchases. Their respective percentage of our total purchases are as follows:

Although our supply was highly concentrated on our major vendors in the fiscal years 2024, 2023 and 2022, we did not rely on any single vendor. While we receive numerous offers daily from authorized dealers, distributors, and brand owners worldwide, and while these offers may be comparable to those from our existing vendors, the specific terms would need to be renegotiated if we want to engage with new vendors. Although identifying alternative vendors will not pose a significant challenge, losing one or more key vendors could lead to short-term difficulties, such as negotiating favorable terms or pricing with new suppliers. We believe that over the long term, we will be able to find alternative vendors without significant disruption to our operations.

Seasonality

Our sales follow the traditional seasonal shopping patterns in Hong Kong. A high proportion of our sales is typically recorded around the National holidays and summertime because of a concentration of promotional sales and other promotional events in the period surrounding these dates. As a result, our revenue is usually higher in the second quarter of the year.

Intellectual Property

As of the date of this annual report, we are currently in the process of registering the following trademarks in Hong Kong:

Country

Trademarks

Status

Applicant

Trademark Number

Classes

Filing Date

Hong Kong

Application Pending

Top Win International Trading Limited

306620599

35

July 24, 2024

Properties

As of the date of this annual report, we entered into the following lease agreement:

We do not own any property.

Insurance

We have taken out insurance for, among other things, the inventories which are the major assets of our business as well as the merchandise for sale in our head office and display room in Hong Kong, including insurance for the stock against robbery, burglary, shop lifting, fire, flooding, and malicious damage, and the insurance for the local transit of stocks within Hong Kong. We maintain employees’ compensation insurance for our employees at our office, which covers the liability to make payment in the case of death, injury or disability of all our employees under the Employees’ Compensation Ordinance (Chapter 282 of the Laws of Hong Kong) and at common law for injuries sustained at work. We believe that our current insurance policies are sufficient for our operations.

Legal Proceedings

We may from time to time become a party to various legal or administrative proceedings arising in the ordinary course of our business. During the years ended December 31, 2024, 2023 and 2022 and as of the date hereof, neither we nor any of our subsidiaries have been involved in any litigation, claim, administrative action or arbitration which had a material adverse effect on the operations or financial condition of the Company.

Regulations

Hong Kong Regulations

As we conduct business in Hong Kong through our wholly-owned subsidiary Top Win International Trading Limited, our business operation is subject to various regulations and rules promulgated by the Hong Kong government. The following is a brief summary of the Hong Kong laws and regulations that currently and materially affect our business. This section does not purport to be a comprehensive summary of all present and proposed regulations and legislation relating to the industries in which we operate.

Hong Kong Laws and Regulations relating to Dealings in Precious Metals and Stones

The Anti-Money Laundering and Counter-Terrorist Financing Ordinance (“AMLO”) (Chapter 615 of the Laws of Hong Kong), among other things, provides the regulation of dealings in precious metals and stones and the registration of dealers in precious metals and stones.

To enhance the regulatory regime for combating money laundering and terrorist financing (“ML/TF”) in fulfilment of Hong Kong’s obligations under the Financial Action Task Force (“FATF”), the AMLO has been amended to introduce a registration regime for dealers in precious metals and stones for commencement on 1 April 2023. The Customs and Excise Department would take charge of the regime to enforce the registration requirements and supervise the anti-money laundering and counter-terrorist financing (“AML/CTF”) conduct of registrants.

There are two categories of registration with the Commissioner of Customs and Excise:

A Category A registrant is not allowed to conduct any Specified Cash Transaction and is not required by any local laws or regulations to identify and verify the identities of its cash-settling customers whereas a Category B registrant is subject to AML/CTF supervision.

To facilitate existing dealers migration to the aforesaid registration regime, precious metals and stones dealers who have been in operation before commencement of the aforesaid registration regime are allowed to apply for registration within 9 months (“Relevant Period”) after commencement of the aforesaid registration regime (i.e. from 1 April to 31 December 2023). Any person, who would like to start up a precious metals and stones business after commencement of the Regime and plan to carry out specified transactions and/or specified cash transactions, is required to register before carrying out any specified transactions and/or specified cash transactions.

After the Relevant Period, any existing dealer that continues to deal with precious metals and stones in cash and/or non-cash transactions that exceed HKD120,000 annually without properly registration under the aforesaid registration regime will be liable on conviction to a maximum fine of HK$100,000 and imprisonment for six months.

As of the date of this annual report, our Hong Kong Operating Subsidiary has been registered as a Category B Registrant with a valid certificate of registration.

Hong Kong Laws and Regulations relating to Protection of Personal Data

The Personal Data (Privacy) Ordinance (Chapter 486 of the Laws of Hong Kong) (“PDPO”) aims to protect the privacy of individuals of their personal data. The PDPO imposes a statutory duty on data users to comply with the requirements of the six data protection principles (the “Data Protection Principles”) contained in Schedule 1 to the PDPO. The PDPO provides that a data user shall not do an act, or engage in a practice, that contravenes a Data Protection Principle unless the act or practice, as the case may be, is required or permitted under the PDPO. The six Data Protection Principles are:

Non-compliance with a Data Protection Principle may lead to a complaint to the Privacy Commissioner for Personal Data (the “Privacy Commissioner”). The Privacy Commissioner may serve an enforcement notice to direct the data user to remedy the contravention. A data user who contravenes an enforcement notice commits an offence which may lead to a fine and imprisonment.

The PDPO also gives data subjects certain rights, inter alia:

The PDPO criminalizes, including but not limited to, the misuse or inappropriate use of personal data in direct marketing activities, non-compliance with a data access request and the unauthorized disclosure of personal data obtained without the relevant data user’s consent.

Hong Kong Laws and Regulations relating to Trade Description

The Trade Descriptions Ordinance (Chapter 362 of the Laws of Hong Kong) (“TDO”) aims to prohibit false or misleading trade description and statements to goods and services provided by traders to the consumers during or after a commercial transaction. Pursuant to the TDO, any person in the course of any trade or business applies a false trade description to any goods and services or supply or offers to supply them commits an offence and a person also commits the same offence if he/she is in possession for sale or for any purpose of trade or manufacture of any goods with a false description. The TDO also provides that traders may commit an offence if they engage in a commercial practice that has a misleading omission of material information of the goods, an aggressive commercial practice, involves bait advertising, bait and switch or wrong acceptance of payment.

Hong Kong Laws and Regulations relating to Sales of Goods

Pursuant to the Sale of Goods Ordinance (Chapter 26 of the Laws of Hong Kong) (“SOGO”) in every contract of sale, there is an implied warranty that the goods are free, and will remain free until the time when the property is to pass, from any charge or encumbrance not disclosed or known to the buyer before the contract is made and that the buyer will enjoy quiet possession of the goods except so far as it may be disturbed by the owner or other person entitled to the benefit of any charge or encumbrance so disclosed or known. The SOGO provides that there is an implied condition that the goods shall correspond with the description where there is a contract for the sale of goods by description, and there is any implied condition or warranty as to the quality or fitness for any particular purpose of goods supplied under a contract of sale. Where the seller sells goods in the course of a business, there is an implied condition that the goods supplied under the contract are of merchantable quality.

Hong Kong Laws and Regulations relating to Exemption Clauses in a Contract

The Control of Exemption Clauses Ordinance (Chapter 71 of the Laws of Hong Kong) (“CECO”) aims to limit the scope where the seller may limit its liability via the terms of the contracts. The CECO provides that unless the concerned terms satisfy the test of reasonableness, a person dealing as consumer cannot by reference to any contract term be made to indemnify another person (whether a party to the contract or not) in respect of liability that may be incurred by the other for negligence or breach of contract.

Hong Kong Laws and Regulations relating to Intellectual Properties Rights

The Trade Marks Ordinance (Chapter 559 of the Laws of Hong Kong) (“TMO”) provides the framework for the Hong Kong’s system of registration of trademarks and sets out the rights attached to a registered trade mark, including logo and a brand name. The TMO restricts unauthorized use of a sign which is identical or similar to the registered mark for identical and/or similar goods and/or services for which the mark was registered, where such use is likely to cause confusion on the part of the public. The TMO provides that a person may also commit a criminal offence if that person fraudulently uses a trade mark, including selling and importing goods bearing a forged trade mar, or possessing or using equipment for the purpose of forging a trade mark.

The Patents Ordinance (Chapter 514 of the Laws of Hong Kong) provides the framework for “re-registration” system of Chinese, UK and European patents in Hong Kong. Pursuant to Patents (Amendment)Ordinance 2016, which came into full effect in Hong Kong on 19 December 2019 provide a new framework for a new patent system — an “original grant patent” system, running in parallel with the “re-registration” system.

The Copyright Ordinance (Chapter 528 of the Laws of Hong Kong) (“Copyright Ordinance”) provides comprehensive protection for recognized categories of work including artistic work. The Copyright Ordinance restricts certain acts such as copying and/or issuing or making available copies to the public of a copyright work without the authorization from the copyright owner as it may constitute primary infringement. The Copyright Ordinance provides that a person may also incur liability for secondary infringement if that person possesses, sells, distributes or deals with a copy of a work which is, and which he knows or has reason to believe to be, an infringing copy of work for the purposes of or in the course of any trade or business without the consent of the copyright owner.

Hong Kong Laws and Regulations relating to Competition

The Competition Ordinance (Chapter 619 of the Laws of Hong Kong) (“Competition Ordinance”) prohibits and deters undertakings in all sectors from adopting anti-competitive conduct which has the object or effect of preventing, restricting or distorting competition in Hong Kong. The key prohibitions include (i) prohibition of agreements between businesses which have the object or effect of preventing, restricting or distorting competition in Hong Kong; and (ii) prohibiting companies with a substantial degree of market power from abusing their power by engaging in conduct that has the object or effect of preventing, restricting or distorting competition in Hong Kong. The penalties for breaches of the Competition Ordinance include, but are not limited to, financial penalties of up to 10% of the total gross revenues obtained in Hong Kong for each year of infringement, up to a maximum of three years in which the contravention occurs.

Hong Kong Laws and Regulations relating to Employment

Pursuant to the Employment Ordinance (Chapter 57 of the Laws of Hong Kong) (“EO”) all employees covered by the EO are entitled to basic protection under the EO including but not limited to payment of wages, restrictions on wages deductions and the granting of statutory holidays.

Pursuant to the Mandatory Provident Fund Schemes Ordinance (Chapter 485 of the Laws of Hong Kong) (“MPFSO”), which came into full effect in Hong Kong on December 1, 2000, every employer must take all practicable steps to ensure that the employee becomes a member of a Mandatory Provident Fund (MPF) scheme. An employer who fails to comply with such a requirement may face a fine and imprisonment. The MPFSO provides that an employer who is employing a relevant employee must, for each contribution period, from the employer’s own funds, contribute to the relevant MPF scheme the amount determined in accordance with the MPFSO.

Pursuant to the Employees’ Compensation Ordinance (Chapter 282 of the Laws of Hong Kong) (“ECO”) all employers are required to take out insurance policies to cover their liabilities under the ECO and at common law for injuries at work in respect of all of their employees. An employer failing to do so may be liable to a fine and imprisonment.

Pursuant to the Minimum Wage Ordinance (Chapter 608 of the Laws of Hong Kong) (“MWO”) an employee is entitled to be paid wages no less than the statutory minimum wage rate during the wage period. With effect from 1 May 2023, the statutory minimum hourly wage rate is HK$40. Failure to comply with MWO constitutes an offence under EO.

4C. Organizational Structure

The following is a list of our subsidiaries as of the date of this annual report.

The following diagram illustrates the corporate structure of the Company and its subsidiaries as of the date of this annual report:

4D. Property, Plants and Equipment

Properties

As of the date of this annual report, we entered into the following lease agreement:

We do not own any property.

Intellectual Property

As of the date of this annual report, we are currently in the process of registering the following trademarks in Hong Kong:

Country

Trademarks

Status

Applicant

Trademark Number

Classes

Filing Date

Hong Kong

Application Pending

Top Win International Trading Limited

306620599

35

July 24, 2024

ITEM 4A. UNRESOLVED STAFF COMMENTS

Not Applicable.

ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our consolidated financial statements and the related notes included elsewhere in this annual report. This discussion and analysis and other parts of this annual report contain forward-looking statements based upon current beliefs, plans and expectations that involve risks, uncertainties and assumptions. Our actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of several factors, including those set forth under “Item 3. Key Information—D. Risk Factors” and elsewhere in this annual report. You should carefully read the “Item 3. Key Information—D. Risk Factors” section of this annual report to gain an understanding of the important factors that could cause actual results to differ materially from our forward-looking statements.

Overview

We are a well-established company based in Hong Kong, primarily engaged in trading of luxury watches. We purchase the watches from distributors located in Europe, Japan, Singapore, and other locations and sell to our customers in Hong Kong. Our customer base mainly comprises distributors and retail sellers within the watch industry. We offer a diverse selection of watch brands, spanning from affordable sports watches to premium international luxury watches.

Our revenue were US$17.6 million, US$18.8 million and US$14.2 million for the years ended December 31, 2024, 2023 and 2022, respectively. We recorded net loss of US$42,219 for the year ended December 31, 2024 and net income of US$0.2 million and US$71,990 for the year ended December 31, 2023 and 2022, respectively. Our growth strategy includes strengthening our market share in existing markets, increasing our market presence through expansion into new geographical customers, diversifying our supply network, broadening our product range to include additional luxury brands and other categories, and creating new income streams.

Factors Affecting Our Results of Operations

The watches trading business is influenced by various factors, including global economic growth, customer consumption patterns, exchange rate fluctuations, and advancements in international logistics and transportation. Our profits are mainly determined by several key factors, including annual sales, gross profit margin, operating cost structure and financing expenses.

Our results of operations have been affected in the periods under review, and are expected to continue to be affected, by the following factors relating to our operations:

Customer base and customer mix

Our business growth is heavily reliant on our ability to maintain strong relationships with existing customers while attracting new ones. Our current customer base primarily consists of distributors and retail sellers in the watch industry, with all our products delivered locally in Hong Kong. The luxury watch trading market is highly competitive, with numerous players vying for market share. We face competition from other luxury watch traders, both locally and internationally. Our ability to differentiate ourselves through superior customer service, exclusive product offerings, and competitive pricing is essential to maintaining and growing our market position.

Supplier Relations and Cost of Goods Sold

The cost of acquiring luxury watches from suppliers represents a significant component of our overall cost structure. This expense is critical because it directly influences our cost of goods sold, which in turn affects our gross profit margins. To manage this effectively, we depend on maintaining strong and positive relationships with our suppliers. These relationships enable us to negotiate favorable terms, such as better pricing, extended payment terms, and exclusive access to high-quality products, ensuring a steady supply of the luxury watches that our customers demand. Any disruption in these relationships or unfavorable changes in supplier terms could adversely affect our cost of goods sold and, consequently, our gross profit margins.

Maintenance of Key Personnel

Our success is heavily reliant on the skills, experience, and efforts of our key personnel. The expertise and dedication of our team members are fundamental to driving our business forward, ensuring operational efficiency, and maintaining the high standards our customers expect. The ability to recruit top talent ensures that we can continuously innovate and adapt to changing market conditions. Furthermore, retaining these individuals is essential for maintaining continuity, preserving institutional knowledge, and fostering a stable work environment. This focus on human capital not only supports the execution of our business strategy but also underpins our long-term success and sustainability in the competitive luxury watch market. Attracting and retaining skilled personnel will be critical to executing our business strategy effectively.

Fluctuations in interest rates

We have funded our operations primarily through financing from banks, our major shareholder, and cash flow from operating activities. As our business continues to expand, we anticipate that additional bank borrowings may be required. The financing costs associated with these bank borrowings have accounted for a significant portion of our total expenses, thus being a key factor impacting our net income. Therefore, any changes in interest rates may significantly impact our results of operations.

Fluctuations in exchange rates

Our operating activities are mainly transacted in Hong Kong Dollars, which is also our functional currency. Foreign exchange risk arises from our watch purchases. We buy watches from distributors located in Europe, Japan, Singapore, and other locations in foreign currencies, and sell them to our customers in Hong Kong Dollars. Any fluctuation in exchange rates may result in higher costs of purchases and adversely impact our results of operations.

Impact of Russia’s Invasion of Ukraine, Israel-Hamas War and Related Supply Chain Issues

Russia launched a large-scale invasion of Ukraine on February 24, 2022 and an armed conflict between Israel and Hamas-led Palestinian militant groups has been taking place in the Gaza Strip since 7 October 2023. The extent and duration of the military actions, resulting sanctions and resulting future market disruptions, including volatilities in stock markets, disruption to global supply chain and worsening of global inflation, are impossible to predict, but could be significant. Any such disruptions or resulting actual and threatened responses to such activity, including purchasing and financing restrictions, boycotts or changes in consumer or purchaser preferences, sanctions, tariffs or cyberattacks, may have significant collateral impact on global economy and our business model and revenue stream. Nevertheless, as of the date of this document, since (i) we principally operate in Hong Kong and do not have business presence in Russia, Ukraine and the Middle-East; and (ii) our industry has been less dependent on oil, natural resources or global supply chain which have been disrupted by these military actions, there is no material impact on our cash flows, liquidity, capital resources, cash requirements, financial position, or results of operations arising from, related to, or caused by the global disruption from Russia’s invasion of Ukraine and the tensions in the Middle-East.

Key Components of Results of Operations

Revenue

We only have one principal revenue stream, which is the trading of luxury watches. Our revenue represents proceeds from trading luxury watches, which are priced at a fixed amount per quantity sold in each transaction. When selling watches to our customers, sales income is recognized at a point in time upon the physical delivery of the watches to the customers. The price offered to customers varies and is influenced by the type of customer, quantity transacted, and the brand and model of the watches. For the years ended December 31, 2024, 2023 and 2022, our total revenue was US$17.6 million, US$18.8 million and US$14.2 million, respectively.

Cost of revenue

Cost of revenue mainly represents cost of luxury watches sold to the customers and other incremental costs, such as the associated delivery charges we incurred directly in relation to the sales. For the years ended December 31, 2024, 2023 and 2022, cost of revenue represented approximately 92.0%, 92.7% and 91.1% of our revenue, respectively.

We buy watches from vendors located in Europe, Japan, Singapore, and other locations. The following table sets forth a breakdown of our purchases from vendors by country for the years ended December 31, 2024, 2023 and 2022.

Operating expenses

Selling and marketing expenses

Selling and marketing expenses include (i) salaries and contributions to retirement benefit schemes for our sales and marketing employees; (ii) warehouse and storage expense; (iii) gift and promotion expense; (iv) advertisement expense; and (v) commission expense. Selling and marketing expenses accounted for 0.3%, 0.9% and 1.6% of our total revenue for the years ended December 31, 2024, 2023 and 2022, respectively.

General and administrative expenses

General and administrative expenses mainly comprise (i) salaries and contributions to retirement benefit schemes for our administration and operation employees; (ii) services fee for audit, company secretary, and other professional services; (iii) rental and related expenses for leasing of our office premises; (iv) insurance expenses; and (v) overseas and domestic business travelling expenses. General and administrative expenses accounted for 6.4%, 3.6% and 6.0% of our total revenue for the years ended December 31, 2024, 2023 and 2022, respectively.

Other expenses, net

The following table sets forth our expenses, net, both in absolute amount and as a percentage of total revenue, for the years ended December 31, 2024, 2023 and 2022:

Our interest expense primarily consists of interest payments incurred to banks on the revolving trade finance facility and installment loan facility. The interest rates for these loans are determined by adding a premium to a benchmark interest rate. Interest expense accounted for 1.6%, 1.8% and 1.2% of our total revenue for the years ended December 31, 2024, 2023 and 2022, respectively.

There was other income of US$2,081 for the year ended December 31, 2024 compared to US$22,419 for the year ended December 31, 2023 and US$52,762 for the year ended December 31, 2022. The primary source of other income in 2022 was US$30,649 received from the Hong Kong Government under the Employee Support Scheme of the Anti-epidemic Fund. This income falls outside the scope of ASC 606. Other income for the year ended December 31, 2023 was mainly attributable to the change in cash surrender value of life insurance policies. Other income accounted for nil%, 0.1% and 0.4% of our total revenue for the years ended December 31, 2024, 2023 and 2022, respectively.

Income tax benefits (provision for income taxes)

We operated in Hong Kong and we are subjected to Hong Kong Profits Tax. Under the two-tiered profits tax rates regime, the first HK$2 million (approximately US$255,395) of a company’s assessable profits are charged at a lower profits tax rate of 8.25%, while assessable profits in excess of HK$2 million (approximately US$255,395) are charged at the profits tax rate of 16.5%. For the years ended December 31, 2024, 2023 and 2022, income tax accounted for nil%, 0.1% and nil% of our total revenue, respectively.

We did not have any significant unrecognized uncertain tax positions, and we did not incur any interest and penalties related to potential underpaid income taxes for the years ended December 31, 2024, 2023 and 2022. Our major tax jurisdiction is Hong Kong. Under relevant Hong Kong tax laws, tax case is normally subject to investigation by the tax authority for up to 6 years of assessment prior to the current year of assessment, unless in a case of fraud or willful evasion, then the investigation can be extended to cover 10 years of assessment

Results of Operations

Comparison of Fiscal Years Ended December 31, 2024 and 2023

The following table sets forth a summary of our consolidated results of operations for the years ended December 31, 2024 and 2023 as indicated. The operating results in any year are not necessarily indicative of the results that may be expected for any future trends.

Year Ended December 31, 2024 Compared to Year Ended December 31, 2023

Revenue

Total revenue decreased by 6.4% from US$18.8 million for the year ended December 31, 2023 to US$17.6 million for the year ended December 31, 2024.

We introduced several new watch models in 2023, with some of them being affordable sports watches, defined as those priced below US$128 per unit. These newly launched significantly contributed to the increase in the overall sales quantity. However, due to the relatively low unit price and gross profit margin of sports watches, we decided to cease their sales in July 2023.

For our regular watch brands, the slight decrease in revenue was primarily driven by a 44% reduction in sales volume, partially offset by a 69% increase in the average unit price of our products. The drop in sales volume corresponded with the overall trend in consumer spending on luxury watches in Hong Kong, which has been significantly impacted by broader economic challenges in China. These economic difficulties have led to a general reduction in consumer spending on luxury goods. According to data from the Hong Kong Census and Statistics Department, the quantity of retail sales of jewelry, watches, clocks, and valuable gifts in Hong Kong decreased by 16.3% during the year ended December 31, 2024, compared to the year ended December 31, 2023. This downturn caused our customers, primarily distributors and retail sellers, to become more cautious in maintaining their stock levels, resulting in significantly reduced purchases from us.

Conversely, the increase in the average unit price was largely due to a shift in our sales mix towards higher-end luxury watches during the current year, which helped to partially mitigate the impact of the lower sales volume on our overall revenue.

Cost of revenue

The cost of revenue decreased by approximately US$1.2 million, or 7.1%, from approximately US$17.4 million for the year ended December 31, 2023, to US$16.2 million for the year ended December 31, 2024. This decrease was mainly due to the reduction in watch sales.

Gross profit

Our gross profit increased by US$44,550 or 3.2%, from approximately US$1.3 million for the year ended December 31, 2023 to approximately US$1.4 million for the year ended December 31, 2024. The total gross profit margin for the year ended December 31, 2024, was approximately 8.0%, compared to approximately 7.3% for the year ended December 31, 2023.

For the year ended December 31, 2023, most of our watches were purchased from Europe and settled in Swiss Franc (“CHF”). The appreciation of CHF in 2023 led to higher costs of purchases. To better manage exchange rate fluctuation risk and reduce transportation costs, we increased our local purchases during the year ended December 31, 2024, thereby better controlling the cost of purchases. Additionally, for the year ended December 31, 2024, we sold off some long-aging inventories that had previously been written down to their net realizable value, further decreasing the cost of purchases for these watches. As a result, the gross profit ratio increased for the year ended December 31, 2024.

Operating expenses

Selling and marketing expenses decreased to US$58,764 for the year ended December 31, 2024, from US$163,579 for the year ended December 31, 2023. We rented a warehouse in 2023 to store watch boxes and packaging materials, incurring an expense of US$42,150 for the year ended December 31, 2023. However, in 2024, we chose not to renew the lease contract. Instead, we now store these items in our office to control costs and improve packing efficiency. The gift and promotion expenses were better controlled and reduced by US$38,672 in 2024 compared with 2023. Additionally, the staff expense decreased by US$21,640 in 2024 due to one staff in our sales department resigned in May 2024. As a result, our selling and marketing expenses decreased.

General and administrative expenses increased by US$0.4 million to US$1.1 million for the year ended December 31, 2024, compared to US$0.7 million for the year ended December 31, 2023. The increase was primarily due to an increase in audit expense paid to our US auditor of US$0.4 million.

Other expenses, net

Other expenses decreased by US$34,669 from US$313,910 for the year ended December 31, 2023 to US$279,241 for the year ended December 31, 2024. The decrease was mainly driven by a reduction in interest expenses. We had installment loan facility and trade financing loan facility from banks, with variable interest rates based on a benchmark interest rate plus a premium. The average balance of bank borrowings decreased from US$5.8 million for the year ended December 31, 2023 to US$5.5 million for the year ended December 31, 2024, which led to a decrease in interest expense by US$53,793.

(Loss) income before income taxes

We had a loss before income taxes of US$50,834 for the year ended December 31, 2024, compared to income before income taxes of US$0.2 million for the year ended December 31, 2023. The change in (loss) income before income taxes was primarily driven by a decrease in revenue and an increase in operating expenses due to higher professional service fees related to the audit of our US GAAP consolidated financial statements.

Income tax benefits (provision for income taxes)

Income tax benefits (provision for income taxes) changed from US$16,123 expenses for the year ended December 31, 2023 to US$8,615 benefits for the year ended December 31, 2024. The change largely corresponded with the change in (loss) income before income tax expense.

Net (loss) income

As a result of the foregoing factors, net (loss) income changed from net income US$0.2 million for the year ended December 31, 2023 to net loss US$42,219 for the year ended December 31, 2024.

Comparison of Fiscal Years Ended December 31, 2023 and 2022

The following table sets forth a summary of our consolidated results of operations for the years ended December 31, 2023 and 2022 as indicated. The operating results in any year are not necessarily indicative of the results that may be expected for any future trends.

Revenue

Total revenue increased significantly by 32.3% from US$14.2 million for the year ended December 31, 2022 to US$18.8 million for the year ended December 31, 2023.

The number of watches sold increased by 5,317 from 7,294 for the year ended December 31, 2022 to 12,611 for the year ended December 31, 2023. The surge in sales volume for the year ended December 31, 2023 can be attributed primarily to the 5,195 additional units sold in the category of watches priced below US$128. We introduced several new watch models in 2023, with some of them being affordable sports watches. These newly launched watches gained immense popularity and significantly contributed to the increase in the overall sales. On the other hand, to the effect of the newly launch affordable sports watches, the average selling price of the watches decreased from US$1,950 for the year ended December 31, 2022 to US$1,492 for the year ended December 31, 2023.

Despite the decrease in the average selling price of the watches, the significant increase in the number of watches sold resulted in a US$4.6 million increase in revenue for the year ended December 31, 2023, compared to previous year.

Cost of revenue

The cost of revenue increased by approximately US$4.5 million, or 34.6%, from approximately US$13.0 million for the year ended December 31, 2022, to US$17.4 million for the year ended December 31, 2023. This increase was mainly attributable to the rise in sales of watches, which resulted in a higher cost of goods sold.

Gross profit

Our gross profit increased by approximately US$0.1 million or 8.7%, from approximately US$1.3 million for the year ended December 31, 2022 to approximately US$1.4 million for the year ended December 31, 2023. The total gross profit margin for the year ended December 31, 2023, was approximately 7.3%, compared to approximately 8.9% for the year ended December 31, 2022.

During the year ended December 31, 2022, the pandemic disrupted international logistics and restricted travel, making it inconvenient for customers to purchase watches from Europe or other foreign countries. We capitalized on our competitive advantage in the domestic market, allowing us to set higher selling prices and increase our gross profit margin during the period. During the year ended December 31, 2023, the economy and logistics rebounded after COVID-19 and competition intensified. In response, we adjusted our pricing strategy, lowering selling prices to maintain our customer base and capture a greater market share. In addition, for the years ended December 31, 2023 and 2022, most of our watches were purchased from Europe and settled in Swiss Franc (“CHF”). The appreciation of CHF in 2023 led to higher costs of purchases. Altogether, the gross profit ratio decreased for the year ended December 31, 2023.

Operating expenses

Selling and marketing expenses decreased to US$163,579 for the year ended December 31, 2023, from US$221,053 for the year ended December 31, 2022. We outsourced our packaging and warehouse management services in 2022. However, in 2023, we handled these tasks with our own staff, resulting in a more cost-efficient approach and a decrease in selling and marketing expenses.

General and administrative expenses decreased by US$0.2 million to US$0.7 million for the year ended December 31, 2023, compared to US$0.8 million for the year ended December 31, 2022. One major factor is the decrease in staff costs by US$0.1 million, which was mainly caused by the resignation of Mr. Yau Chiu, SIT as our managing director in March 2023. His last monthly salary before resignation was US$12,820. Moreover, we did not provide a staff quarter to our director during the year ended December 31, 2023 whilst the expense for director quarter amounted to US$41,213 for the year ended December 31, 2022. In addition, overseas travelling expense decreased by US$0.1 million, resulting from our gradual establishment of a stable supplier network and a corresponding decrease in the needs of seeking suppliers abroad and attending watch exhibitions. These factors collectively drove the decrease in total general and administrative expenses compared to the preceding year.

Other expenses, net

Other expenses increased by US$0.2 million from US$0.1 million for the year ended December 31, 2022 to US$0.3 million for the year ended December 31, 2023. The increase was mainly due to the increase in interest expense and the decrease in other income. We had installment loan facility and trade financing loan facility from banks, with variable interest rates based on a benchmark interest rate plus a premium. With the increase in market interest rate, our weighted average effective interest rate rose from 2.91% for the year ended December 31, 2022 to 5.84% for the year ended December 31, 2023, resulting in an additional interest expense of US$0.2 million. Moreover, other income decreased as we have received US$30,649 government subsidy under Employment Support Scheme of Anti-epidemic Fund granted by Hong Kong Government during the year ended December 31, 2022 whereas no such income received during the year ended December 31, 2023.

Income before income taxes

We had income before income taxes of US$0.2 million and US$76,064 for the years ended December 31, 2023 and 2022, respectively. The increase in income before income taxes was primarily due to the increase in our revenue and the decrease in our operating expenses as a result of our expense saving initiatives.

Provision for income taxes

Provision for income taxes increased from US$4,074 for the year ended December 31, 2022 to US$16,123 for the year ended December 31, 2023. The change largely corresponded with the increase in income before income tax expense.

Net income

As a result of the foregoing factors, net income increased by 173.3% from US$71,990 for the year ended December 31, 2022 to US$0.2 million for the year ended December 31, 2023.

Liquidity and Capital Resources

Prior to this offering, our principal sources of liquidity to finance our day to day operations are from the financing provided by banks, our major shareholder and cashflow from operating activities. We recorded net cash outflow in operating activities of US$0.5 million for the year ended December 31, 2024 and cash inflow from operating activities of US$1.4 million for the year ended December 31, 2023.

As of December 31, 2024, we had positive working capital of US$3.8 million, US$2.6 million in cash and US$0.4 million in restricted cash, out of which US$2.5 million was held in HK$, and the rest was held in Japanese Yen and other currencies. As of December 31, 2023, we had positive working capital of US$1.9 million, US$1.1 million in cash and US$0.4 million in restricted cash, out of which US$1.3 million was held in HK$, and the rest was held in Japanese Yen and other currencies. Our cash and restricted cash primarily consist of balances maintained with banks in Hong Kong.

In assessing our liquidity, we monitor and analyze our cash on hand and our operating and capital expenditure commitments. Our liquidity needs are to meet our working capital requirements, operating expenses and capital expenditure obligations.

Subsequently on April 3, 2025, we successfully completed the Offering of 2,664,000 ordinary shares, which were priced at $4.00 per share. The gross proceeds to us from the Offering, before deducting commissions, expense allowance, and expenses, are approximately $10.66 million, which have significantly helped to address our liquidity concerns.

Considering all facts and information on hand, we expect our cash on hand is sufficient to finance our working capital requirements within the normal operating cycle of a twelve-months period from the date of our financial statements are issued.

If we are unable to have sufficient fund to finance our working capital requirements within the normal operating cycle of a twelve-months period from the date of these financial statements are issued, we may consider supplementing our available sources of funds through the following sources:

Based on the above considerations, we are of the opinion that we have sufficient funds to meet our working capital requirements and current liabilities as they become due within twelve months from the date of our financial statements are issued. However, there is no assurance that we will be successful in implementing our plans. There are a number of factors that could potentially arise and could undermine our plans, such as changes in the demand for our products, general market conditions and the broader capital market climate in Hong Kong, etc.

Cash Flows

The following table sets forth a summary of our cash flows for the years ended December 31, 2024 and 2023 as indicated.

Operating activities

Net cash used operating activities for the year ended December 31, 2024 was US$0.5 million, as compared to the net loss of US$42,219. The difference was primarily resulted from (i) a decrease of US$0.2 million in accounts payable, mainly because the we settled more accounts payable balance near the year end December 31, 2024; (ii) an increase of US$0.2 million in inventories as we hold additional inventory in anticipation of the expected revenue growth in 2025; and (iii) a decrease of US$0.1 million in accounts receivable, mainly because all accounts receivables are collected near the year end December 31, 2024.

Net cash provided by operating activities for the year ended December 31, 2023 was US$1.4 million, as compared to the net income of US$0.2 million. The difference was primarily resulted from (i) a decrease of US$1.1 million in inventories as a result of the increase in sales with strong consumer demand for our watches during the year ended December 31, 2023; (ii) a decrease of US$0.2 million in accounts receivable, mainly because the we had less sales conducted near the year end December 31, 2023; and (iii) an increase of US$0.2 million in prepayments and other current assets, driven by higher trade deposit paid for securing the upcoming orders.

Net cash used in operating activities for the year ended December 31, 2022 was US$2.2 million, as compared to the net profit of US$0.07 million. The difference was primarily attributable to (i) an increase of US$1.4 million in inventories due to we hold additional inventory in anticipation of the expected revenue growth in 2023; (ii) an increase of US$0.2 million in accounts receivable, reflecting more sales conducted near the year end of December 31, 2022; (iii) a decrease of US$0.2 million in accounts payables, aligning with less purchase made near the year end of December 31, 2022; and (iv) a decrease of US$0.1 million in accrued expenses and other current liabilities due to salary payable was early settled before the end of 2022.

Financing activities

Net cash provided by financing activities for the year ended December 31, 2024 was US$2.0 million. This was primarily due to (i) US$2.0 million received from shareholder’s capital contribution; (ii) US$1.2 million advances obtained from a related party; which was partially offset by (iii) net repayments of bank borrowings of US$0.6 million and (iv) US$0.6 million payments of deferred IPO costs during the year ended December 31, 2024.

Net cash used in financing activities for the year ended December 31, 2023 was US$1.0 million. This was primarily due to (i) US$1.0 million repayments of advances from a related party; and (ii) net repayments of bank borrowings of US$76,810 during the year ended December 31, 2023.

Net cash provided by financing activities for the year ended December 31, 2022 was US$2.0 million. This was primarily due to (i) net drawdowns from banking facilities of US$2.0 million during the year ended December 31, 2022; (ii) US$0.5 million advances obtained from a related party; and (iii) payment of dividend of US$0.4 million during the year ended December 31, 2022.

Quantitative and Qualitative Disclosures about Market Risks

Currency risk

Our function currency is HK$ and our consolidated financial statements are presented in US$. Our sales, operation activities and assets and liabilities are predominately denominated in the function currency. We consider the foreign exchange risk in relation to transactions denominated in HK$ with respect to US$ is not significant as HK$ is pegged to US$. Hong Kong Monetary Authority guarantees to exchange US$ into HK$, or vice versa, at a rate close to HK$7.80 to US$1.00.

At the same time, we buy watches from distributors located in Europe, Japan, Singapore, and other locations in other foreign currencies, and sell them to customers in HK$. Any fluctuation in exchange rates against HK$ may result in higher costs of purchases.

For the year ended 2024, we had US$6.2 million purchases denominated in CHF. We estimate that any appreciation of CHF against HK$ in the future would result in an increase in our cost of purchases, and vice versa. If we cannot pass these increased costs on to our customers, it would negatively impact our gross profit margin and net income. Based on the same purchase volume as in 2024, our costs related to purchases denominated in CHF would increase by US$0.06 million if there is a 1% appreciation of CHF against HK$. Conversely, our costs would decrease by US$0.06 million if there is a 1% depreciation of CHF against HK$.

Concentration and credit risks

Financial instruments that potentially subject us to the credit risks consist of cash, restricted cash, accounts receivable, investments in life insurance policies, amounts due from related party and other current assets. The maximum exposures of such assets to credit risk are their carrying amounts as of the balance sheet dates.

We deposit our cash and restricted cash with reputable banks located in Hong Kong. As of December 31, 2024 and 2023, US$3,020,683 and US$1,456,631 were deposited with these banks, respectively. Balances maintained with banks in Hong Kong are insured under the Deposit Protection Scheme introduced by the Hong Kong Government for a maximum amount of HK$500,000 (equivalent to US$63,863), and further increased to HK$800,000 (US$102,991) effective on October 1, 2024, for each depositor at one bank, whilst the balances maintained by us may at times exceed the insured limits. Cash balances maintained with banks in Hong Kong are not otherwise insured by the Federal Deposit Insurance Corporation or other programs. We have not experienced any losses in these bank accounts and management believes that we are not exposed to any significant credit risk on cash.

Assets that potentially subject us to a significant credit risk primarily consist of accounts receivable and other current assets. We perform regular and ongoing credit assessments of the counterparts’ financial conditions and credit histories. We also assess historical collection, aging of receivables and general economic conditions. We consider that we have adequate controls over these receivables in order to minimize the related credit risk. As of December 31, 2024, and 2023, the balances of allowance for expected credit losses against these balances were $2 and $5,430, respectively.

For the years ended December 31, 2024 and 2023, most of our assets were located in Hong Kong. At the same time, we consider that we were exposed to the following concentrations of risk:

(a) Major customers

For the year ended December 31, 2024, two customers accounted for 10% or more of our revenue. Revenue from these two customers accounted for 17% and 16% of our total revenue, respectively.

For the year ended December 31, 2023, three customers accounted for 10% or more of our revenue. Revenue from these three customers accounted for 18%, 11%, and 11% of our total revenue, respectively.

For the year ended December 31, 2022, there was one customer accounted for 10% or more of our revenue. Revenue from the customer accounted for 11% of the Group’s total revenue for the year.

As of December 31, 2023, there was one customer whose receivables accounted for 10% or more of our total balances of accounts receivable and it accounted for 98% of the total balances of accounts receivables.

All the concentration percentages of accounts receivables are calculated before allowance for expected credit losses.

(b)    Major vendors

For the year ended December 31, 2024, three vendors accounted for 10% or more of our total purchase. Total purchase from these three vendors accounted for 25%, 18% and 10% of our total purchase, respectively.

For the year ended December 31, 2023, two vendors accounted for 10% or more of our total purchase. Total purchase from these two vendors accounted for 64% and 14% of the our total purchase, respectively.

For the year ended December 31, 2022, one vendor accounted for 10% or more of the Group’s total purchase. Total purchase from the vendor accounted for 65% of the Group’s total purchase for the year.