Financial Performance - Revenue for the six months ended June 30, 2024, was approximately HKD 51.1 million, compared to HKD 0 for the same period in 2023[2] - Gross profit for the same period was approximately HKD 17.4 million, with no gross profit reported in the first half of 2023[2] - Profit for the period was approximately HKD 5.6 million, a significant recovery from a loss of approximately HKD 6.8 million in the first half of 2023[2] - Basic and diluted earnings per share for the period were HKD 0.22, compared to a loss per share of HKD 0.26 in the same period last year[3] - Total comprehensive income for the period was approximately HKD 6.1 million, compared to a loss of approximately HKD 6.9 million in the first half of 2023[3] - Total operating expenses for the first half of 2024 were approximately HKD 6.4 million, an increase of about 23.1% compared to approximately HKD 5.2 million in the first half of 2023[31] - The company reported a profit of HKD 5,619,000 for the six months ended June 30, 2024, compared to a loss of HKD 6,807,000 in the same period last year[19] Assets and Liabilities - Non-current assets as of June 30, 2024, included right-of-use assets valued at HKD 1.579 million[4] - Current assets included cash and cash equivalents of approximately HKD 51.066 million as of June 30, 2024[4] - Current liabilities increased to approximately HKD 388.5 million from HKD 342.7 million at the end of 2023[4] - The company reported a cumulative loss of HKD 691,257,000 as of June 30, 2024, compared to HKD 682,718,000 as of January 1, 2024[6] - The company’s total equity attributable to owners decreased to HKD (334,884,000) as of June 30, 2024, from HKD (327,656,000) as of January 1, 2024[6] - As of June 30, 2024, the group's current liabilities exceeded current assets by approximately HKD 335,716,000[11] - Total liabilities exceeded total assets by approximately HKD 334,791,000 as of June 30, 2024[11] - Total assets as of June 30, 2024, were approximately HKD 54.4 million, a significant increase from approximately HKD 1.8 million in the fiscal year 2023[36] - Total liabilities as of June 30, 2024, were approximately HKD 389.2 million, compared to approximately HKD 342.7 million in the fiscal year 2023[36] - The debt-to-asset ratio as of June 30, 2024, was approximately 471.3%, a decrease from 14,216.7% in the fiscal year 2023[36] Cash Flow and Financing - The net cash generated from operating activities for the six months ended June 30, 2024, was HKD 320,000, compared to HKD 725,000 in the same period of 2023[7] - The company had a net cash outflow from financing activities of HKD 332,000 for the six months ended June 30, 2024[7] - As of June 30, 2024, the company's cash and cash equivalents decreased to HKD 587,000 from HKD 599,000 at the beginning of the period[7] - The group's cash balance was maintained at a low level of approximately HKD 587,000 as of June 30, 2024[11] - The group identified potential investors to provide ongoing financial support as necessary to ensure daily operations[12] - The group is actively exploring other financing sources, including seeking new investments and business opportunities to strengthen its capital base[12] - The group has implemented cost control measures to tighten operational expenses and improve future cash flow[12] Debt and Restructuring - The company is currently in discussions with creditors regarding a restructuring plan to address its overall debt issues[8] - A statutory demand for repayment of HKD 15,000,000 was issued to the company on March 19, 2024, which could lead to a winding-up petition if not addressed[8] - The group is negotiating with various creditors for debt restructuring and settlement plans[12] - The company has engaged in loan transfer agreements with various parties, indicating ongoing financial restructuring efforts[23] Corporate Governance and Compliance - The financial statements were prepared in accordance with Hong Kong Financial Reporting Standards, ensuring compliance with applicable disclosure requirements[9] - The company has committed to maintaining high standards of corporate governance, adhering to all principles and rules of the corporate governance code[38] - The company continues to review and enhance its corporate governance practices to ensure compliance[38] - The audit committee reviewed the group's unaudited financial performance for the first half of 2024[42] Revenue and Customer Information - Revenue from China reached HKD 47,692,000 for the six months ended June 30, 2024, with total revenue of HKD 51,084,000[16] - Major customers contributing over 10% of total revenue include Customer A with HKD 7,501,000, Customer B with HKD 7,276,000, and Customer C with HKD 5,334,000[17] - Revenue is recognized when control of goods is transferred to customers, typically upon delivery, with a normal credit term of up to 90 days[15] Employee and Operational Information - Total employee costs amounted to HKD 1,840,000 for the six months ended June 30, 2024, compared to HKD 1,375,000 in the previous year, reflecting a 34% increase[18] - As of June 30, 2024, the group employed 26 staff members, a decrease from 50 in the same period of 2023[40] Inventory and Accounts Receivable - Inventory balance as of June 30, 2024, was approximately HKD 1.1 million, up from zero on December 31, 2023[33] - Accounts receivable from third parties increased to HKD 81,934,000 as of June 30, 2024, up from HKD 34,440,000 as of December 31, 2023[20] - Accounts receivable balance as of June 30, 2024, was approximately HKD 48.7 million, compared to approximately HKD 1.2 million for the fiscal year 2023[33] - The company has implemented strict controls on accounts receivable to minimize credit risk, with a maximum credit period of 90 days granted to customers[21] Shareholder Information - As of December 31, 2023, the company has issued 2,599,993,088 shares with a total value of HKD 259,999,000[25] - The board does not recommend any dividend payment for the first half of 2024, consistent with the previous year[37] - Trading of the company's shares has been suspended since April 3, 2023, pending compliance with the exchange's resumption guidelines[44] Management and Directors - The company is led by Executive Director Ms. Zhang Yuqi[45] - Non-executive directors include Mr. Cui Xiaoxian, Ms. Wu Guoning, and Mr. Tiger Charles Chen[45] - Independent non-executive director is Mr. Xu Jinwen[45]

Revenue and Profitability - Revenue for the fiscal year ended December 31, 2023, was approximately HKD 1.2 million, a decrease of 45.5% compared to HKD 2.2 million in the fiscal year 2022[1] - Gross profit for the fiscal year was approximately HKD 0.1 million, recovering from a gross loss of HKD 3.0 million in the previous fiscal year[2] - The group reported a loss of approximately HKD 14,158,000 for the year ending December 31, 2023[6] - The loss for fiscal year 2023 decreased by approximately 34.9% to about HKD 14.2 million, compared to a loss of approximately HKD 21.8 million in fiscal year 2022, due to staff streamlining and reduced financing costs[34] - Basic and diluted loss per share for the fiscal year was HKD 0.54, compared to HKD 0.84 in the fiscal year 2022[2] Operating Expenses and Cost Management - Total operating expenses decreased to approximately HKD 10.9 million from HKD 23.5 million in the fiscal year 2022, representing a reduction of 53.7%[1] - Total employee costs for the year ended December 31, 2023, amounted to HKD 3,457,000, a significant decrease from HKD 14,874,000 in 2022, reflecting a reduction of approximately 76.8%[16] - The group is implementing cost control measures to enhance profitability and improve future cash flow from operations[6] Financial Position and Liabilities - Current liabilities totaled HKD 342.7 million, slightly increasing from HKD 330.9 million in the previous year[3] - As of December 31, 2023, the group's current liabilities exceeded current assets by approximately HKD 340,916,000, and total liabilities exceeded total assets by the same amount[6] - The total liabilities were approximately HKD 342.7 million, compared to approximately HKD 330.9 million in the fiscal year 2022[41] - The company reported short-term borrowings of HKD 41,494,000 in 2023, a slight decrease from HKD 42,704,000 in 2022, with accrued interest rising from HKD 14,937,000 to HKD 18,040,000[26] Cash and Liquidity - The company had cash and cash equivalents of HKD 599,000 as of December 31, 2023, compared to HKD 430,000 in the previous year[3] - Cash and bank balances were maintained at a low level of approximately HKD 599,000 as of December 31, 2023[6] - Cash and bank balances decreased significantly from HKD 3,293,000 in 2022 to HKD 599,000 in 2023, with restricted cash balances of HKD (2,863,000) in 2022 no longer present in 2023[23] Dividend and Shareholder Returns - The board of directors does not recommend the payment of a dividend for the fiscal year 2023, consistent with the previous fiscal year[1] - There was no dividend declared or recommended for the years ended December 31, 2023, and December 31, 2022[19] Restructuring and Future Plans - The company is in discussions with creditors regarding a restructuring plan to address overall debt issues[4] - A restructuring plan has been committed by a counterparty to reorganize a loan of approximately HKD 196,398,000, with no repayment required for the next twelve months unless the group secures funding from other sources[6] - The company is implementing a corporate rescue plan to alleviate debt and secure necessary funding for ongoing operations[59] Operational Developments - In December 2023, the group launched its own online retail platform and established two online stores on overseas platforms[6] - The group is actively re-establishing connections with potential customers and suppliers to restart operations, with gradual recovery expected in the first quarter of fiscal year 2024[36] - The company resumed operations in December 2023 and has returned to profitability as of June 30, 2024, with sales of "Oregon Scientific" electronic products[58] Legal and Compliance Issues - The company has been involved in several legal disputes and has not resolved most of these due to insufficient funds[53] - The independent auditor did not express an opinion on the financial statements due to the inability to obtain sufficient appropriate audit evidence[55] - The board of directors acknowledged the significant uncertainties regarding the company's ability to continue as a going concern[56] Market and Customer Insights - The group had no significant customers contributing over 10% of total revenue for the year ended December 31, 2023, compared to 100% in 2022[15] - The group has received over HKD 70 million in orders, expected to be completed and delivered in Q3 2024[32]

Financial Performance - Revenue for the first half of 2023 was zero, compared to HKD 2.2 million in the first half of 2022[2] - Gross loss for the first half of 2023 was zero, compared to a gross loss of approximately HKD 11.0 million in the first half of 2022[2] - Total operating expenses were approximately HKD 5.2 million, down from approximately HKD 37.1 million in the first half of 2022, representing a decrease of about 86%[2] - Loss for the period was approximately HKD 6.8 million, significantly reduced from a loss of approximately HKD 49.9 million in the first half of 2022, marking a decrease of about 86%[2] - The total comprehensive loss for the first half of 2023 was HKD 6.9 million, down from HKD 38.0 million in the first half of 2022[4] - Basic and diluted loss per share for the first half of 2023 was HKD 0.26, compared to HKD 1.92 in the first half of 2022[5] - The company reported a loss before tax of HKD 6,807,000 for the six months ended June 30, 2023, compared to a loss of HKD 49,888,000 for the same period in 2022, indicating a significant improvement[19] - The company recorded a net loss attributable to shareholders of HKD 6,807,000 for the first half of 2023, compared to a net loss of HKD 49,888,000 in the same period of 2022, showing a reduction in losses[19] Cash Flow and Liquidity - Cash and cash equivalents at the end of June 2023 were HKD 616,000, compared to HKD 2.6 million at the end of June 2022[9] - Net cash used in operating activities was HKD 725,000, a significant improvement from HKD 30.6 million used in the same period of 2022[9] - Net cash used in financing activities was HKD 539,000, compared to HKD 16.3 million in the first half of 2022[9] - The group's cash balance as of June 30, 2023, was approximately HKD 616,000, indicating a low liquidity level[13] - As of June 30, 2023, the bank balance and cash amounted to approximately HKD 0.6 million, down from HKD 3.3 million at the end of the previous fiscal year[34] Liabilities and Financial Position - As of June 30, 2023, the group's current liabilities exceeded current assets by approximately HKD 334,437,000[13] - The total liabilities of the group exceeded total assets by approximately HKD 334,437,000, with a loss of approximately HKD 6,807,000 during the period[13] - Total liabilities as of June 30, 2023, were approximately HKD 335.1 million, compared to HKD 330.9 million at the end of the previous fiscal year[37] - The asset-liability ratio as of June 30, 2023, was approximately 41,750.0%, significantly increased from 7,342.4% at the end of the previous fiscal year due to a substantial decrease in total assets[37] Dividends and Shareholder Returns - The company does not recommend the payment of dividends for the first half of 2023, consistent with no dividends paid in the first half of 2022[2] - No dividends are recommended for the first half of 2023, consistent with no dividends in the first half of 2022[38] Corporate Governance and Compliance - The company is committed to maintaining high standards of corporate governance and has adhered to the relevant rules and principles[39] - The company will continue to review and enhance its corporate governance practices to ensure compliance[39] - The audit committee has reviewed the unaudited financial performance for the first half of 2023[41] - The company's shares have been suspended from trading since April 3, 2023, pending compliance with the exchange's resumption guidance[42] Business Operations and Future Plans - The group launched its own online retail platform in December 2023 and established two online stores on overseas platforms[14] - The group is actively exploring other financing sources, including seeking new investments and business opportunities to strengthen its capital base[13] - The group is negotiating with various creditors for debt restructuring and settlement plans[13] - The company is actively re-establishing connections with potential customers and suppliers to restart its business, with operations gradually resuming in the first quarter of 2024[31] - The group plans to gradually resume operations in Q1 2024, focusing on the "Oregon Scientific" brand electronic products[26] Legal and Regulatory Matters - The company received a statutory demand for repayment of HKD 15,000,000 from a creditor, requiring payment within three weeks or face liquidation proceedings[10] - The company submitted a petition to the High Court of Hong Kong for a creditors' meeting to consider a restructuring plan on September 13, 2024[10] - The company has a total of 2,599,993,088 ordinary shares in issue, with a par value of HKD 0.10 per share[21] - The company’s litigation provision remained unchanged at HKD 2,874,000 as of June 30, 2023, compared to HKD 3,888,000 at the beginning of the reporting period[23] - The company’s total liabilities related to litigation were estimated at approximately HKD 1,014,000 after a settlement agreement was approved[23] - The group was ordered to pay approximately HKD 2,874,000 due to a lawsuit related to employment contract violations, which has been recognized in the financial statements[25] Employee and Operational Changes - As of June 30, 2023, the group employed 50 staff members, a decrease from 100 in the same period of 2022[40] - The Shenzhen factory was closed on May 31, 2022, due to the impact of COVID-19, leading to a significant halt in operations[29]

Financial Performance - Revenue for the fiscal year ended December 31, 2022, was approximately HKD 2.2 million, a decrease of 87.1% compared to HKD 17.1 million in the fiscal year 2021[1]. - Gross loss for the year was approximately HKD 3.0 million, compared to a gross profit of HKD 1.9 million in the previous fiscal year[1]. - The company reported a loss of approximately HKD 21.8 million for the year, an improvement from a loss of HKD 84.2 million in the fiscal year 2021[1]. - Other income increased to HKD 18.8 million from HKD 6.6 million in the previous year, indicating a positive trend in non-operating revenue[2]. - The group reported revenue from external corporate customers of HKD 2,218,000 for the year ended December 31, 2022, compared to HKD 17,144,000 for the year ended December 31, 2021, indicating a significant decline[20]. - The group’s loss for the fiscal year 2022 was approximately HKD 21.8 million, a significant reduction of about 74.1% from HKD 84.2 million in the fiscal year 2021[40]. - The company reported a pre-tax loss of HKD 21,750,000 for 2022, compared to a loss of HKD 84,234,000 in 2021, indicating a significant improvement[26]. Operating Expenses and Cost Management - Total operating expenses were approximately HKD 23.5 million, significantly reduced from HKD 64.8 million in the fiscal year 2021[1]. - Research expenses decreased significantly to HKD 1.0 million from HKD 13.8 million in the previous fiscal year, reflecting cost-cutting measures[2]. - Total employee costs decreased to HKD 14,874,000 in 2022 from HKD 62,282,000 in 2021, reflecting a reduction of approximately 76%[6]. - The total impairment loss amounted to HKD 6,223,000 in 2022, down from HKD 11,832,000 in 2021, showing a reduction of about 47%[6]. - The group is implementing cost control measures to enhance profitability and improve future cash flow from operations[7]. Liquidity and Financial Position - The company’s current liabilities increased to HKD 330.9 million from HKD 322.5 million in the previous year, indicating a potential liquidity concern[3]. - As of December 31, 2022, the group's current liabilities exceeded current assets by approximately HKD 327,563,000[7]. - The total liabilities exceeded total assets by approximately HKD 327,563,000, with a loss of approximately HKD 21,750,000 for the year[7]. - The group recorded a net cash outflow from operations of approximately HKD 25,357,000 as of December 31, 2022[7]. - The bank balance and cash were maintained at a low level of approximately HKD 430,000 as of December 31, 2022[7]. - The group’s net current liabilities increased to approximately HKD 327.6 million, up from HKD 252.3 million in the fiscal year 2021, due to a decrease in current assets and an increase in current liabilities[44]. - As of December 31, 2022, total outstanding loans amounted to approximately HKD 576 million, a slight decrease from HKD 580 million in the previous fiscal year[45]. Debt and Restructuring Efforts - The company is currently in discussions with creditors regarding a restructuring plan to address its overall debt issues[5]. - The group continues to negotiate with creditors to restructure existing debts and reach settlement agreements[7]. - The company is implementing a corporate rescue plan to alleviate debt and secure necessary funding for continued operations[65]. - Several non-core subsidiaries have ceased operations, leading to legal actions regarding unpaid debts, which the company plans to address through liquidation[66]. Dividend and Shareholder Information - The board of directors does not recommend the payment of dividends for the fiscal year 2022, consistent with the previous fiscal year[1]. - The company did not declare or recommend any dividends for the years ending December 31, 2022, and 2021[25]. - The average number of ordinary shares used to calculate basic loss per share remained constant at 2,599,993,088 for both years[26]. Business Operations and Future Outlook - The group launched its own online retail platform in December 2023 and established two online stores on overseas platforms[7]. - The company plans to gradually resume operations in Q1 2024, focusing on the "Oregon Scientific" brand electronic products[38]. - The company has received over HKD 70 million in orders expected to be completed and delivered in Q3 2024[38]. - The group is actively re-establishing connections with potential customers and suppliers to restart its business operations, with gradual recovery expected in the first quarter of 2024[42]. Compliance and Regulatory Matters - The company has adopted a securities trading code for directors, ensuring compliance with the standards set forth by the listing rules[50]. - Trading of the company's shares has been suspended since April 3, 2023, pending compliance with the stock exchange's resumption guidelines[69]. Changes in Accounting Standards - The group has adopted the revised Hong Kong Financial Reporting Standard No. 16, which allows tenants to account for COVID-19 related rent concessions as if they are not lease modifications, applicable to lease payments due on or before June 30, 2022[10]. - The revised Hong Kong Accounting Standard No. 16 clarifies the accounting treatment for proceeds from the sale of items produced during the testing period before intended use, confirming that such proceeds and costs should be recognized in profit or loss[11]. - The adoption of the revised standards is not expected to have a significant impact on the consolidated financial statements of the group[10][11][12][13][14][15].

Impairment Losses - The company reported an impairment of HKD 8.9 million for right-of-use assets and HKD 8.6 million for finance lease receivables as of December 31, 2021[3]. - The company recognized an investment property impairment loss of approximately HKD 1 million, right-of-use asset impairment loss of HKD 8.9 million, and finance lease receivables impairment loss of HKD 8.6 million due to shortened lease agreements[9]. - The company estimates that the recoverable amount of future lease receivables is zero, leading to an impairment loss of HKD 8.6 million[11]. - The company believes that the impairment assessment results are appropriately reflected in the financial statements published on May 31, 2022[11]. - The board confirmed that the additional information provided is solely for the purpose of supplementing the impairment of right-of-use assets and the impairment of finance lease receivables for the year 2021, and does not affect other information contained in the 2021 annual report[12]. - All other information in the 2021 annual report remains unchanged[12]. Rental Obligations - The company has not paid any rental payments to the landlord since August 2021, leading to overdue rental claims of approximately RMB 2 million per month[4]. - A memorandum of understanding was signed on May 31, 2022, to terminate the head lease agreement and relieve the company from overdue rental obligations[6]. Lease Agreements - The lease agreements have a term of two years, starting from February 1, 2021, and expiring on January 31, 2023[4]. - The company aims to sublet idle leased assets to minimize operational cost burdens[8]. Impact of COVID-19 - The company has been impacted by COVID-19 restrictions, which affected negotiations with the landlord[6]. Company Leadership - The executive director is Mr. Zhu Yongning, who serves as the Chief Executive Officer[12]. - The non-executive director is Mr. Cui Xiao[12]. - The independent non-executive directors include Mr. Zhou Meilin, Mr. Xu Jinwen, and Mr. Zhou Rui[12].

Financial Performance - Turnover for the six months ended June 30, 2022, was HK$2.2 million, a decrease of 82.0% compared to HK$12.2 million for the same period in 2021[13] - Gross loss for 1H2022 amounted to HK$11.0 million, compared to a gross profit of HK$0.1 million in 1H2021[13] - Loss for the period reached HK$49.9 million, which is a 40.0% increase from the loss of HK$35.6 million in 1H2021[13] - The segment profit for branded sales was HK$0.7 million, while the total loss before taxation for the group was HK$49.9 million, compared to a loss of HK$35.6 million in the prior year, indicating a worsening financial performance[56][67] - The Group incurred unallocated expenses of HK$37.1 million in the first half of 2022, compared to HK$33.4 million in the same period of 2021, reflecting rising operational costs[56] Operating Expenses - Total operating expenses increased to HK$37.1 million in 1H2022, up from HK$33.4 million in 1H2021, representing a rise of 11.0%[13] - Total operating expenses for 1H2022 were HK$37.1 million, up from HK$33.4 million in 1H2021, including one-off administrative expenses of approximately HK$6.3 million due to downsizing[81] Cash Flow and Liquidity - Cash and cash equivalents decreased significantly to HK$2.6 million as of June 30, 2022, from HK$49.5 million at the end of 2021[15] - Net cash used in operating activities was HK$30.6 million for the six months ended June 30, 2022, compared to HK$36.1 million in the same period of 2021[20] - Net cash used in financing activities was HK$16.3 million for the six months ended June 30, 2022, compared to a net cash inflow of HK$30.1 million in the same period of 2021[20] - The Group's bank balances and cash, including restricted balances, decreased to HK$6.1 million as of June 30, 2022, down from HK$52.9 million as of December 31, 2021[103][108] Liabilities and Equity - Total current liabilities amounted to HK$300.6 million as of June 30, 2022, compared to HK$322.6 million at the end of 2021, indicating a reduction of 6.8%[15] - Net current liabilities increased to HK$281.3 million as of June 30, 2022, compared to HK$252.4 million at the end of 2021[15] - As of June 30, 2022, the Group's total liabilities exceeded total assets by approximately HK$343.6 million[30] - The Group's equity attributable to owners of the Company was HK$343.7 million as of June 30, 2022, compared to HK$305.7 million as of December 31, 2021[18] Employee and Compensation - As of June 30, 2022, the Group had approximately 100 employees, a significant decrease from approximately 378 employees as of June 30, 2021[125] - The Group's remuneration policy aims to provide market-rate compensation packages to attract and retain high-quality employees[126] - The company provides a competitive compensation package, including base salary, double pay, and additional benefits such as retirement plans and medical insurance, reviewed annually[127] Corporate Governance - The company complied with most principles of the Corporate Governance Code, with some deviations noted[146] - The company has adopted a code of conduct for securities transactions by directors, confirming compliance with required standards throughout the first half of 2022[138] - The Audit Committee, comprising three independent non-executive directors, reviewed the unaudited financial results for the first half of 2022[158] Legal and Compliance Issues - The Group faced a legal claim for unpaid rental fees amounting to approximately HK$20.4 million, with a court ruling requiring payment of approximately HK$12.4 million[119][123] - The Group was ordered to pay approximately HK$2.8 million in compensation related to labor contract dismissals[120][125] - A subsidiary of the company faced a petition for winding up due to insolvency, scheduled for hearing on November 9, 2022[129] Future Outlook and Strategies - The Group is implementing measures to tighten cost controls over operating expenses to enhance profitability and improve future cash flow[33] - The Group is actively negotiating with financial institutions for new financing arrangements to meet future working capital needs[39] - The Group is exploring alternative sources of financing to support its operations[39] - The management is actively exploring domestic sales channels and conducting R&D for new products under the OS brand[88][95] - The Group aims to expand online sales channels for the OS brand by negotiating with e-commerce partners[89]

Financial Performance - The Group's total revenue for FY2021 was approximately HK$17.1 million, a decrease of approximately 69.1% from HK$55.4 million in FY2020 due to the global impact of COVID-19[14]. - Gross profit for FY2021 totaled approximately HK$1.8 million, down approximately 67.9% from HK$5.6 million in FY2020, with a gross profit margin increase from approximately 10.1% to 10.5%[18]. - Total operating expenses for FY2021 were approximately HK$64.8 million, a decrease of approximately 29.2% from HK$91.5 million in FY2020, primarily due to a 63.3% reduction in distribution and selling expenses[19]. - Other income for FY2021 was approximately HK$1.9 million, down from approximately HK$10.9 million in FY2020, while net other losses were approximately HK$0.6 million compared to HK$4.7 million in FY2020[20]. - The Group recorded a loss of approximately HK$84.2 million for FY2021, compared to a loss of approximately HK$95.8 million in FY2020[21]. Impact of COVID-19 - The business has been severely impacted by COVID-19 since early 2020, with significant order cancellations from clients due to the pandemic and trade wars affecting the global supply chain[26]. - The Board anticipates that the impact of COVID-19 will be temporary, with expectations for substantial improvement in the business environment moving forward[24]. - The board believes that the impact of COVID-19 is temporary, and business conditions are expected to improve significantly as overseas clients regain confidence and orders[26]. - OS's total sales revenue for the year 2021 was approximately HK$12.5 million, a decrease of about 59.3% compared to HK$30.7 million in 2020, primarily due to the impact of the COVID-19 pandemic[67]. Business Strategy and Focus - The Company is shifting its long-term business focus towards design and sales, which require lighter asset commitments[25]. - The company is adjusting its business focus to concentrate on asset-light design and sales[26]. - The Group is focusing on developing health care products in partnership with a leading hospital and sleep science research institute in Jiangsu, China[64]. - The research and development team of VMS is exploring new partnership opportunities, including the joint development of innovative health measurement solutions[61]. Assets and Liabilities - The net liabilities value of the Group as of December 31, 2021, was approximately HK$305.6 million, an increase of about 38.1% from approximately HK$221.3 million in 2020[73]. - The Group's gearing ratio as of December 31, 2021, was approximately 321.9%, up from approximately 181.4% in 2020, due to an increase in loans from a shareholder[74]. - The Group's total assets as of December 31, 2021, were approximately HK$81.3 million, with total liabilities amounting to approximately HK$386.9 million[78]. Inventory and Receivables - As of December 31, 2021, trade receivables decreased by approximately 12.5% to approximately HK$0.7 million from HK$0.8 million in 2020[56]. - Inventory was maintained at a low level of approximately HK$5.2 million as of December 31, 2021, down approximately 26.8% from HK$7.1 million in 2020[65]. - The inventory turnover days increased to 147 days in FY2021, compared to 87 days in FY2020[65]. - Management is renegotiating commercial terms with VMS customers to improve gross margins and accelerate the recovery of trade receivables[62]. Legal Matters - The Group recognized a litigation loss provision of approximately HK$2.8 million in the consolidated statement of profit or loss for the year ended 31 December 2021 due to legal actions initiated by former employees[95]. - The Group was ordered by the PRC Court to pay approximately HK$2.0 million to a group of ten former employees and HK$0.8 million to three other former employees as compensation for breach of employment agreements[95]. - The Group has appealed the judgments related to the compensation claims from the three individual former employees[95]. - The Group's management believes that any potential legal liabilities from ongoing litigations will not have a material impact on its financial position[99]. Corporate Governance - The Company has complied with all principles and code provisions of the Corporate Governance Code, except for deviations from Code Provisions C.2.1, C.1.6, and C.1.8[111]. - The Company recognizes the importance of board diversity, considering factors such as cultural background, experience, skills, and gender[120]. - The Board of Directors consists of five members, including one Executive Director, one Non-Executive Director, and three Independent Non-Executive Directors[112]. - The Company aims to maintain an appropriate balance of independent Directors to ensure independent judgment[114]. - The Board is collectively responsible for the Company's activities and affairs, ensuring no individual or small group can dominate decision-making[143]. Board Meetings and Committees - The Board of Directors held a total of 4 meetings in FY2021, with all members attending all meetings[159]. - The Audit Committee (AC) is composed of three Independent Non-Executive Directors, ensuring that the majority possess the necessary accounting and financial management expertise[188]. - The Nomination and Corporate Governance Committee (NCGC) held two meetings during FY2021, with attendance from all members, and reviewed the structure and composition of the Board[177][181]. - The Remuneration Committee (RC) also held two meetings in FY2021, with all members present, and focused on reviewing the annual remuneration of Directors and senior management[185][186]. - The Company has established clear roles and responsibilities for its various committees to enhance governance and oversight[170].

Financial Performance - The Group's total revenue for FY2020 was approximately HK$55.4 million, a decrease of approximately 79.5% from HK$270.4 million in FY2019 due to the impact of COVID-19[14]. - Gross profit for FY2020 totaled approximately HK$5.6 million, down approximately 81.6% from HK$30.5 million in FY2019, with a gross profit margin decrease from approximately 11.3% to 10.1%[18]. - Loss for FY2020 was approximately HK$95.8 million, compared to a loss of approximately HK$83.1 million in FY2019[21]. - The sales revenue of the Value Manufacturing Services (VMS) business in FY2020 was approximately HK$24.7 million, a decrease from approximately HK$181.1 million in FY2019, accounting for approximately 44.6% of the Group's total revenue[68]. - OS business sales revenue totaled approximately HK$30.7 million in 2020, representing a 65.6% decrease from HK$89.3 million in 2019, making up about 55.4% of the Group's total sales revenue[73]. Operating Expenses and Efficiency - Total operating expenses decreased by approximately 26.7% to approximately HK$91.5 million in FY2020 from HK$124.9 million in FY2019, driven by a 57.5% reduction in distribution and selling expenses[19]. - The Group is streamlining its organizational structure and operational processes to reduce administrative costs[65]. - Management implemented measures to enhance lean manufacturing and streamline operations in overseas markets[66]. - The Group re-negotiated commercial terms with VMS customers to improve gross margin and accelerate accounts receivable collection[69]. Market Opportunities and Growth - The Group anticipates opportunities for growth in 2021 despite the ongoing impact of the COVID-19 pandemic[24]. - The focus will be on steady growth in overseas business, with a particular emphasis on the China market, which is expected to show remarkable growth[25]. - The market demand for Smart Learning & Immersive Technology (SLIT) remains strong, with a series of new SLIT products set to launch, enhancing the learning experience through advanced Augmented Reality technology[26]. - The Group anticipates steady growth in the Chinese market, emphasizing smart learning and healthcare as key product categories[28]. Financial Position and Liabilities - The Group's net liabilities value increased by approximately 76.9% to about HK$221.3 million as of December 31, 2020, compared to HK$125.1 million in 2019[85]. - The gearing ratio increased to approximately 181.4% in 2020 from 106.2% in 2019 due to decreased turnover and increased loans from a shareholder[86]. - Accounts receivables decreased by approximately 97.2% to approximately HK$0.8 million as of December 31, 2020, compared to approximately HK$28.8 million in 2019[67]. - Inventory levels were reduced to approximately HK$7.1 million as of December 31, 2020, down from approximately HK$16.8 million in 2019[67]. Corporate Governance - The Group is committed to corporate governance standards, complying with the Corporate Governance Code and relevant provisions of the Listing Rules[115]. - The Board composition includes a mix of Executive, Non-Executive, and Independent Non-Executive Directors, ensuring effective leadership and control[123]. - The Company emphasizes continuous professional development for Directors to ensure they are updated on relevant knowledge and skills[130]. - The Board has established guidelines to clearly divide responsibilities between itself and management, reserving key strategic matters for its approval[146]. Employee and Remuneration Policies - The group maintained a remuneration policy that offers compensation packages at market rates to attract and retain high-quality employees[106]. - The Group's remuneration policy aims to provide a competitive compensation package that aligns with market levels, including base salary, bonuses, and additional benefits[112]. - Fixed salaries and benefits are benchmarked at the median market level against comparable companies, while performance-related bonuses are linked to predefined performance targets[114]. - As of December 31, 2020, the group had 428 employees, emphasizing the importance of workforce training and development[105]. Legal and Compliance Matters - During FY2020, the group recognized a provision for loss of approximately HK$2.3 million related to a litigation claim from a supplier for allegedly unpaid purchase orders[96]. - The group was involved in several litigations during FY2020, including a claim for approximately HK$5.5 million related to subcontracting fees, which was recognized in trade payables[103]. - The Company developed and monitored a code of conduct and compliance manual applicable to employees and Directors, ensuring adherence to governance standards[192].

Financial Performance - Turnover for the first half of 2020 amounted to HK$32.1 million, a decrease of 71.6% compared to HK$113.3 million in 1H2019[12] - Gross profit for the period was HK$3.3 million, down 82.0% from HK$18.3 million in 1H2019[12] - Loss for the period increased to HK$37.4 million, compared to a loss of HK$30.4 million in 1H2019, representing a 23.0% increase[12] - The total comprehensive loss for the period was HK$42.7 million, compared to HK$30.0 million in 1H2019[13] - Loss per share for the period was HK$1.44 cents, compared to HK$1.17 cents in 1H2019[13] - The Group's total revenue for the six months ended June 30, 2020, amounted to HK$32.1 million, representing a decrease of approximately 71.7% compared to HK$113.3 million in the same period last year[68] - Gross profit totaled HK$3.3 million, a decrease of approximately 82.0% from HK$18.3 million in 1H2019, with a gross profit margin of 10.3%[69] - Losses for the six months ended June 30, 2020, were HK$37.4 million, compared to a loss of HK$30.4 million in 1H2019[71] Operating Expenses and Cash Flow - Total operating expenses decreased to HK$44.5 million, a reduction of 10.9% from HK$49.9 million in 1H2019[12] - Cash balances of the Group decreased to HK$10.5 million from HK$18.0 million as of December 31, 2019[12] - Net cash used in operating activities was HK$23.8 million, compared to HK$10.2 million in the same period of 2019, indicating a worsening cash flow situation[18] - The company generated HK$16.3 million from financing activities, down from HK$26.0 million in the previous year[18] - Cash and cash equivalents decreased to HK$10.5 million at the end of the period from HK$18.0 million at the beginning, a decline of 42%[18] Assets and Liabilities - As of June 30, 2020, non-current assets decreased to HK$12.2 million from HK$20.0 million as of December 31, 2019, representing a decline of 39%[14] - Current assets also decreased to HK$58.9 million from HK$81.9 million, a reduction of 28%[14] - Current liabilities increased to HK$238.9 million from HK$227.0 million, indicating a rise of 5%[14] - The net current liabilities worsened to HK$180.0 million from HK$145.1 million, reflecting an increase of 24%[14] - The equity attributable to owners of the company decreased to HK$167.9 million from HK$125.2 million, reflecting a decline of 34%[15] Revenue Breakdown - Branded sales contributed HK$13.3 million to total segment revenue in 2020, down from HK$31.4 million in 2019, indicating a decline of approximately 57.6%[45][46] - OEM/ODM sales accounted for HK$18.8 million in 2020, compared to HK$81.9 million in 2019, reflecting a decrease of about 77%[45][46] - The segment profit for the Connected Home and Communications segment was HK$0.7 million in 2020, while the Health and Wellness segment reported a loss of HK$0.3 million[45] Strategic Focus and Development - The company continues to focus on the design, development, and distribution of lifestyle electronic products despite the challenging market conditions[6] - The Group is focusing on new product development in Smart Learning & Immersive Technology and Sports, Fitness and Health categories[73] - The Group is focusing on the development of Smart Learning and Immersive Technology (SLIT) products, with a strong market demand for these categories[78] - New Smart Learning products featuring immersive AR technology and voice recognition will be launched to enhance children's learning experiences[94] - The Group aims to maintain strong relationships with reputable distributors to develop overseas markets despite the impact of COVID-19[79] Employee and Governance - The number of employees decreased to approximately 452 as of June 30, 2020, from approximately 525 a year earlier[116] - The Company complied with all Code Provisions of the Corporate Governance Code during the review period[133] - The Company confirmed compliance with the Model Code for Securities Transactions throughout the review period[128] Other Financial Information - The board does not recommend any dividend payment for the six months ended June 30, 2020, consistent with the previous year[107] - The company has not yet adopted any new and amendments to HKFRSs that have been issued but are not yet effective, and is assessing their impact on results and financial position[29] - The Group recorded net gains of HK$3.9 million in other gains and losses during the first half of 2020, compared to gains of HK$4.3 million in 1H2019[71]

2 Corporate Information Contents 目錄 公司資料 6 Chairman's Statement 主席報告書 11 Directors and Senior Management of the Group 本集團董事及高級管理層 17 Management Discussion and Analysis 管理層討論及分析 22 Corporate Governance Report 企業管治報告書 50 Environmental, Social and Governance Report 環境、社會及管治報告 75 Directors' Report 董事會報告書 87 Independent Auditor's Report 獨立核數師報告 96 Consolidated Statement of Profit or Loss and Other Comprehensive Income 綜合損益及其他全面收益表 97 Consolidated Statement of Financial Position 綜合財務狀況表 99 Consolidated Statement ...