Revenue Performance - Revenue decreased by HK$2,970,650 or 8.5% from HK$34,931,827 in 2022 to HK$31,961,177 in 2023, primarily due to declines in liquidity services and quotes/news/package subscription services [281]. - Revenue from initial set up, installation, and customization services increased by HK$1,833,003 or 25.7%, from HK$7,140,076 in 2022 to HK$8,973,079 in 2023 [282]. - Revenue from liquidity services decreased by HK$4,073,070 or 60.8%, from HK$6,699,586 in 2022 to HK$2,626,516 in 2023 [284]. - Revenue from white label services increased by HK$233,010 or 12.3%, from HK$1,889,188 in 2022 to HK$2,122,198 in 2023 [285]. - Revenue decreased by HK$5,875,859, or 18.4%, from HK$31,961,177 in 2023 to HK$26,085,318 in 2024, mainly due to declines in initial setup and customization services [311]. - Revenue from initial setup, installation, and customization services plummeted by HK$6,272,880, or 69.9%, from HK$8,973,079 in 2023 to HK$2,700,199 in 2024 [313]. - Liquidity service revenue dropped by HK$723,621, or 27.6%, from HK$2,626,516 in 2023 to HK$1,902,895 in 2024 [314]. - Hosting, support, and maintenance services revenue increased by HK$555,575, or 12.8%, from HK$4,338,184 in 2023 to HK$4,893,759 in 2024 [317]. - White label service revenue rose by HK$896,363, or 42.2%, from HK$2,122,198 in 2023 to HK$3,018,561 in 2024 [318]. Operating Expenses - Operating expenses increased by HK$406,637 or 3.7%, from HK$10,876,654 in 2022 to HK$11,283,291 in 2023 [280]. - Total operating expenses surged by HK$20,390,139 or 180.7%, from HK$11,283,291 in 2023 to HK$31,673,430 in 2024, driven by significant increases in selling and marketing expenses (2,498.4%) and general and administrative expenses (145.9%) [327]. - General and administrative expenses rose by HK$476,091 or 4.5% from HK$10,634,851 in 2022 to HK$11,110,942 in 2023, largely due to initial public offering expenses [299]. - Employee-related costs increased by HK$936,941 or 15.0%, from HK$6,253,858 in 2023 to HK$7,190,799 in 2024 due to bonuses and salary increases [321]. Net Income and Profitability - Net income decreased by HK$189,718 or 2.8%, from HK$6,818,599 in 2022 to HK$6,628,881 in 2023 [280]. - Total gross profit decreased by HK$453,618 or 2.5% from HK$18,419,125 in 2022 to HK$17,965,507 in 2023, while the gross profit margin increased from 52.7% to 56.2% [296]. - Total gross profit decreased by HK$5,663,313 or 31.5%, from HK$17,965,507 in 2023 to HK$12,302,194 in 2024, with gross profit margin falling from 56.2% to 47.2% [326]. - Net income turned into a net loss of HK$20,210,992 for the year ended December 31, 2024, compared to a net income of HK$6,628,881 in 2023 [340]. Cash Flow and Financing - Cash and restricted cash increased to HK$21,999,787 (US$2,832,213) as of December 31, 2024, from HK$6,810,418 in 2023, following the IPO proceeds of HK$44,376,168 (US$5,689,251) [343]. - The company generated positive working capital of HK$16,962,651 (US$2,183,741) in 2024, compared to negative working capital of HK$2,077,323 in 2023 [343]. - For the year ended December 31, 2024, the net cash used in operating activities was HK$21,877,518, primarily due to a net loss of HK$20,210,992 [353]. - The company experienced a net cash inflow from financing activities of HK$45,493,432 for the year ended December 31, 2024, mainly from IPO proceeds of HK$58,500,012 [359]. - The net cash used in investing activities for the year ended December 31, 2024, was HK$8,430,509, which included HK$7,967,033 for product and software development [356]. Research and Development - Research and development expenses decreased significantly by HK$68,639 or 85.8% from HK$80,012 in 2022 to HK$11,373 in 2023, with expectations for future increases in R&D spending [298]. - The company expects an increase in expenditures for research and development as it expands software development capacity to improve and develop new functions [298]. - Research and development expenses rose by HK$161,437 or 1,419.5%, from HK$11,373 in 2023 to HK$172,810 in 2024, reflecting an expansion in software development capacity [328]. - The company capitalized research and development costs of HK$7,967,033 in 2024, reflecting a growth from HK$5,993,675 in 2022 and HK$7,270,898 in 2023 [373]. Taxation - Total income tax expense decreased by HK$239,536, or 61.8%, from HK$387,845 in 2022 to HK$148,309 in 2023, primarily due to a decrease in income before taxes [308]. - The company reported a total income tax expense of HK$781,759 for 2024, an increase of HK$633,450 or 427.1% from HK$148,309 in 2023, primarily due to tax depreciation [339]. Governance and Shareholding - The company’s biggest shareholder, Gaderway Investments Limited, owns approximately 97.73% of the aggregate voting power of the outstanding Ordinary Shares, classifying it as a "controlled company" under NASDAQ standards [385]. - The board of directors consists of five members, with one female director and four male directors [382]. - The company has established three committees under the board of directors: an Audit Committee, a Compensation Committee, and a Nominating and Corporate Governance Committee [394]. - The Audit Committee is responsible for overseeing the accounting and financial reporting processes, including reviewing annual audited financial statements with management and independent auditors [395]. - The Compensation Committee reviews and approves the total compensation package for senior executive officers and oversees long-term incentive compensation plans [398]. - The company has adopted a compensation recovery policy to recover erroneously-awarded incentive compensation as required by the Dodd-Frank Act [402]. - The beneficial ownership of Class A Ordinary Shares is based on 4,204,775 shares outstanding, while Class B Ordinary Shares total 9,046,892 shares outstanding [415]. - Directors and executive officers collectively hold 9,046,892 Class B shares, representing 100% of Class B voting power and 97.73% of total voting power [418]. - Gaderway Investments Limited is the only 5% shareholder, holding 9,046,892 Class B shares, which also accounts for 100% of Class B voting power and 97.73% of total voting power [418]. - Tai Wai (Stephen) Lam owns 5,567,457 Class B shares, representing 61.54% of Class B voting power and 60.14% of total voting power [418]. - Chi Weng Tam owns 3,479,435 Class B shares, representing 38.46% of Class B voting power and 37.59% of total voting power [418].
m-FINANCE(MFI) - 2024 Q4 - Annual Report