UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE
13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of October
Commission File Number:
(Translation of registrant’s name into English)
33/F Sunshine Plaza
353 Lockhart Road, Wan Chai, Hong Kong
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F ☒ Form 40-F ☐
Exhibit Index
| Exhibit No. | Description | |
| 99.1 | Unaudited Condensed Consolidated Financial Statements for the Six Months Ended June 30, 2026 | |
| 99.2 | Management’s Discussion and Analysis of Financial Condition and Results of Operations for the Six Months Ended June 30, 2026 | |
| 101.INS | Inline XBRL Instance Document* | |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document* | |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document* | |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document* | |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document* | |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document* | |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)* |
1
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Date: October 6, 2026 | AsiaStrategy | |
| By: | /s/ Jason Kin Hoi Fang | |
| Name: | Jason Kin Hoi Fang | |
| Title: | Co-Chief Executive Officer and Director | |
| By: | /s/ Mary Fung Yee Wong | |
| Name: | Mary Fung Yee Wong | |
| Title: | Chief Financial Officer and Director | |
2
Exhibit 99.1
AsiaStrategy
TABLE OF CONTENTS
F-1
AsiaStrategy
Unaudited Condensed Consolidated Balance Sheets
(Expressed in U.S. Dollars, except for the number of shares)
| As of | ||||||||
| June 30, 2026 |
December 31, 2025 |
|||||||
| (Unaudited) | (Audited) | |||||||
| Assets | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts receivable, net | ||||||||
| Inventories, net | ||||||||
| Investment in equity securities, current | ||||||||
| Digital assets, current | ||||||||
| Amount due from a related party | ||||||||
| Loans receivable, net | ||||||||
| Prepaid expenses, current | ||||||||
| Deposits and other current assets, net | ||||||||
| Total current assets | ||||||||
| Property and equipment, net | ||||||||
| Digital assets, non-current | ||||||||
| Restricted digital assets | ||||||||
| Investment in equity securities, non-current | ||||||||
| Operating lease right-of-use asset, net | ||||||||
| Prepaid expenses, non-current | ||||||||
| Total assets | $ | $ | ||||||
| Liabilities and shareholders’ equity | ||||||||
| Liabilities | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | $ | ||||||
| Bank borrowings, current | ||||||||
| Contract liabilities | ||||||||
| Accrued expenses and other current liabilities | ||||||||
| Total current liabilities | ||||||||
| Bank borrowings, non-current | ||||||||
| Third party borrowing | ||||||||
| Convertible debts | ||||||||
| Total liabilities | $ | $ | ||||||
| Commitments and contingencies | ||||||||
| Shareholders’ equity | ||||||||
| Ordinary shares ($ | $ | $ | ||||||
| Additional paid-in capital | ||||||||
| Retained earnings | ||||||||
| Accumulated other comprehensive loss | ( | ) | ( | ) | ||||
| Total shareholders’ equity | $ | $ | ||||||
| Total liabilities and shareholders’ equity | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
F-2
AsiaStrategy
Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss
(Expressed in U.S. dollar, except for the number of shares)
| For the Six Months Ended June 30, | ||||||||||||
| 2026 | 2025 | 2024 | ||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||
| Revenue | $ | $ | $ | |||||||||
| Cost of revenue | ( | ) | ( | ) | ( | ) | ||||||
| Gross profit | ||||||||||||
| Operating expenses | ||||||||||||
| Selling and marketing | ( | ) | ( | ) | ( | ) | ||||||
| General and administrative | ( | ) | ( | ) | ( | ) | ||||||
| Total operating expenses | ( | ) | ( | ) | ( | ) | ||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ||||||
| Other income (expense) | ||||||||||||
| Interest expense | ( | ) | ( | ) | ( | ) | ||||||
| Interest income | ||||||||||||
| Unrealized losses on digital assets | ( | ) | ||||||||||
| Unrealized gains on investment in equity securities, net | ||||||||||||
| Sundry income (expense), net | ( |
) | ||||||||||
| Total other income (expense), net | ( | ) | ( | ) | ||||||||
| Loss before income taxes | ( | ) | ( | ) | ( | ) | ||||||
| Income tax benefits | ||||||||||||
| Net loss | ( | ) | ( | ) | ( | ) | ||||||
| Foreign currency translation adjustments | ( | ) | ( | ) | ( | ) | ||||||
| Total comprehensive loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
| Loss per share* | ||||||||||||
| Ordinary shares – basic and diluted | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
| Weighted average shares outstanding used in calculating basic and diluted loss per share* | ||||||||||||
| Ordinary shares – basic and diluted | ||||||||||||
| * |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
F-3
AsiaStrategy
Unaudited Condensed Consolidated Statements of Changes in Shareholders’ (Deficit) Equity
(Expressed in U.S. dollar, except for the number of shares)
For the Six Months Ended June 30, 2024
| Accumulated | ||||||||||||||||||||||||||||
| Additional | other | |||||||||||||||||||||||||||
| Ordinary shares* | Subscription | paid-in | Accumulated | comprehensive | ||||||||||||||||||||||||
| Shares | Amount | receivable | capital | deficit | income | Total | ||||||||||||||||||||||
| Balance as of December 31, 2023 (Audited) | $ | $ | ( | ) | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||||||||||
| Net loss | — | ( | ) | ( | ) | |||||||||||||||||||||||
| Foreign currency translation adjustment | — | ( | ) | ( | ) | |||||||||||||||||||||||
| Balance as of June 30, 2024 (Unaudited) | $ | $ | ( | ) | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||||||||||
For the Six Months Ended June 30, 2025
| Accumulated | ||||||||||||||||||||||||
| Additional | other | |||||||||||||||||||||||
| Ordinary shares* | paid-in | Accumulated | comprehensive | |||||||||||||||||||||
| Shares | Amount | capital | deficit | income (loss) | Total | |||||||||||||||||||
| Balance as of December 31, 2024 (Audited) | $ | $ | $ | ( |
) | $ | $ | |||||||||||||||||
| Issuance of ordinary shares pursuant to initial public offering (“IPO”), net of offering cost | ||||||||||||||||||||||||
| Net loss | — | ( |
) | ( |
) | |||||||||||||||||||
| Foreign currency translation adjustment | — | ( |
) | ( |
) | |||||||||||||||||||
| Balance as of June 30, 2025 (Unaudited) | $ | $ | $ | ( |
) | $ | ( |
) | $ | |||||||||||||||
For the Six Months Ended June 30, 2026
| Accumulated | ||||||||||||||||||||||||
| Additional | other | |||||||||||||||||||||||
| Ordinary shares* | paid-in | Retained | comprehensive | |||||||||||||||||||||
| Shares | Amount | capital | earnings | loss | Total | |||||||||||||||||||
| Balance as of December 31, 2025 (Audited) | $ | $ | $ | $ | ( |
) | $ | |||||||||||||||||
| Net loss | — | ( |
) | ( |
) | |||||||||||||||||||
| Foreign currency translation adjustment | — | ( |
) | ( |
) | |||||||||||||||||||
| Balance as of June 30, 2026 (Unaudited) | $ | $ | $ | $ | ( |
) | $ | |||||||||||||||||
| * |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
F-4
AsiaStrategy
Unaudited Condensed Consolidated Statements of Cash Flows
(Expressed in U.S. dollar)
| For the Six Months Ended June 30, |
||||||||||||
| 2026 | 2025 | 2024 | ||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||
| Cash flows from operating activities: | ||||||||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||||||||||
| Depreciation | ||||||||||||
| Amortization of operating lease right-of-use asset | ||||||||||||
| Allowance (recovery) of expected credit losses | ( | ) | ||||||||||
| Write-downs of inventories | ||||||||||||
| Net realized gains on digital assets | ( |
) | ||||||||||
| Unrealized losses on digital assets | ||||||||||||
| Expenses paid with digital assets | ||||||||||||
| Interest income received with digital assets | ( |
) | ||||||||||
| Gain on loan settlement with digital assets | ( |
) | ||||||||||
| Unrealized gains on investment in equity securities, net | ( | ) | ||||||||||
| Deferred tax benefit | ( | ) | ( | ) | ||||||||
| Changes in operating assets and liabilities: | ||||||||||||
| Accounts receivable | ( | ) | ||||||||||
| Inventories | ( | ) | ||||||||||
| Prepaid expenses | ( | ) | ( | ) | ( | ) | ||||||
| Deposits and other current assets | ( | ) | ( | ) | ||||||||
| Accounts payable | ( | ) | ( | ) | ||||||||
| Contract liabilities | ( | ) | ||||||||||
| Accrued expenses and other current liabilities | ( | ) | ||||||||||
| Net cash provided by (used in) operating activities | ( | ) | ||||||||||
| Cash flows from investing activities: | ||||||||||||
| Purchase of property and equipment | ( | ) | ( | ) | ||||||||
| Purchase of digital assets | ( | ) | ||||||||||
| Proceeds from disposal of digital assets | ||||||||||||
| Advances of loans receivable | ( | ) | ( | ) | ||||||||
| Net cash provided by (used in) investing activities | ( | ) | ||||||||||
| Cash flows from financing activities: | ||||||||||||
| Proceeds from issuance of ordinary shares pursuant to Initial Public Offering (“IPO”), net of issuance cost | ||||||||||||
| Proceeds from bank borrowings | ||||||||||||
| Repayments of bank borrowings | ( | ) | ( | ) | ( | ) | ||||||
| Repayments (to) from a related party | ( |
) | ||||||||||
| Payments of offering costs related to IPO | ( | ) | ( | ) | ||||||||
| Net cash (used in) provided by financing activities | ( | ) | ( | ) | ||||||||
| Effect of exchange rate changes on cash and cash equivalents, and restricted cash | ( | ) | ( | ) | ||||||||
| Net (decrease) increase in cash and cash equivalents, and restricted cash | ( | ) | ||||||||||
| Cash and cash equivalents, and restricted cash, beginning of the period | ||||||||||||
| Cash and cash equivalents, and restricted cash, end of the period | $ | $ | $ | |||||||||
| Reconciliation of cash and cash equivalents, and restricted cash to the consolidated balance sheets | ||||||||||||
| Cash and cash equivalents | $ | $ | $ | |||||||||
| Restricted cash | ||||||||||||
| Total cash and cash equivalents, and restricted cash | $ | $ | $ | |||||||||
| Supplemental disclosures of cash flow information: | ||||||||||||
| Interest paid | ||||||||||||
| Supplemental disclosure of non-cash investing and financing activities: | ||||||||||||
| Deferred IPO cost charged to additional paid-in capital | ||||||||||||
| Settlement of the sale proceeds of life insurance policies with amount due to a related party | ||||||||||||
| Proceeds from third party borrowing received in digital assets | ||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
F-5
AsiaStrategy
Notes to Unaudited Condensed Consolidated Financial Statements
1. Organization and Description of Business
AsiaStrategy (formerly known as Top Win International Limited) (“AsiaStrategy” or “the Company”) is a company incorporated in the Cayman Islands with limited liability on June 27, 2024. AsiaStrategy is a parent holding company with no operations. On August 5, 2025, the Company changed its legal name from Top Win International Limited to AsiaStrategy.
Grand Moon International Limited (“Grand Moon”), a wholly-owned subsidiary of the Company, is a company incorporated in the British Virgin Islands (“B.V.I”) with limited liability on June 4, 2024. Grand Moon has
Top Win International Trading Limited (“Top Win Hong Kong”), a wholly-owned subsidiary of Grand Moon, is a private company limited by shares incorporated in Hong Kong on June 15, 2001. Top Win Hong Kong had a share capital of HK$
AsiaStrategy Topwin SG Pte. Limited (“AsiaStrategy SG”), a wholly-owned subsidiary of the Company, is a private company limited by shares incorporated in Singapore on May 19, 2025. AsiaStrategy SG has
AsiaStrategy (BVI) Limited (“AsiaStrategy BVI”), a wholly-owned subsidiary of the Company, is a company incorporated in the British Virgin Islands (“B.V.I”) with limited liability on June 6, 2025. AsiaStrategy BVI has
AsiaStrategy Topwin Limited (“AsiaStrategy Topwin”), a wholly-owned subsidiary of Top Win Hong Kong, is a private company limited by shares incorporated in Hong Kong on September 30, 2025. AsiaStrategy Topwin had a share capital of HK$
Top Asia Capital Limited (“Top Asia”), a wholly-owned subsidiary of Top Win Hong Kong, is a company incorporated in the British Virgin Islands (“B.V.I”) with limited liability on October 14, 2025. Top Asia has
The Company, together with its subsidiaries (collectively, the “Group”), primarily operates in Hong Kong, and its principal business activity is the trading of luxury watches. The Group primarily sources its luxury watches from Hong Kong, South America, Europe and Singapore, and sells these goods to retailers and other distributors in the watch industry. Going forward, AsiaStrategy is expanding into the Web3 ecosystem, with digital assets becoming an additional focus of its future business development. As of June 30, 2026, the Group held digital assets with a value of $
The Company completed its initial public offering on the NASDAQ in April 2025, issuing
F-6
AsiaStrategy
Notes to Unaudited Condensed Consolidated Financial Statements
1. Organization and Description of Business (cont.)
The accompanying unaudited condensed consolidated financial statements reflect the activities of the Company, and each of the following entities as of June 30, 2026:
| Name of Company | Place of Incorporation | Attributable equity interest % | Issued share capital | |||||||
| Grand Moon | % | |||||||||
| Top Win Hong Kong | % | HK$ | ||||||||
| AsiaStrategy BVI | % | US$ | ||||||||
| AsiaStrategy SG | % | US$ | ||||||||
| AsiaStrategy Topwin | % | HK$ | ||||||||
| Top Asia | % | US$ | ||||||||
Reorganization
Reorganization was completed on July 25, 2024 through a series of planned transactions. As a result of the Reorganization, the Company has become the holding company for the subsidiaries of its group.
Immediately before the Reorganization, Top Win Hong Kong was wholly owned and controlled by Mr. Sit Hon and functioned as the sole operational entity. AsiaStrategy was established on June 27, 2024, 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,
Grand Moon was established on June 4, 2024, by a registered agent in the B.V.I. On July 9, 2024,
Immediately before and after the Reorganization, AsiaStrategy, Grand Moon, and Top Win Hong Kong remained under the complete ownership and control of Mr. Sit Hon. Consequently, the Reorganization is classified as a common control transaction under ASC 805-50.
Following this, the consolidation of the Company and its subsidiaries has been accounted for at historical cost and prepared on the basis as if the aforementioned transactions had become effective as of the beginning of the first period presented in these unaudited condensed consolidated financial statements. Results of operations for the periods presented comprise those of the previously separate entities combined from the beginning of the period to the end of the period, eliminating the effects of intra-entity transactions.
Subsequent to the re-organization, Mr. Sit Hon was divested from his interest in the Company on October 29, 2024.
F-7
AsiaStrategy
Notes to Unaudited Condensed Consolidated Financial Statements
2. Liquidity
In assessing the Group’s liquidity, the Group monitors and analyzes its cash on-hand and its operating and capital expenditure commitments. The Group’s liquidity needs are to meet its working capital requirements, operating expenses and capital expenditure obligations.
The Group recorded net cash inflow from operating activities of $
As of June 30, 2026, the Group had working capital of $
3. Summary of Significant Accounting Policies
Basis of presentation and principle of consolidation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The unaudited condensed consolidated financial statements for the six months ended June 30, 2026, 2025 and 2024 include all adjustments (consisting of only normal recurring adjustments) considered necessary to present fairly the financial position, results of operations and cash flows for such interim periods. The results of operations for the six months ended June 30, 2026, 2025 and 2024 are not necessarily indicative of results to be expected for the full years ending or ended December 31, 2026, 2025 and 2024. Accordingly, these unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited financial statements for the years ended December 31, 2025, 2024 and 2023.
These unaudited condensed consolidated financial statements include the financial statements of the Company and its subsidiaries. All intercompany transactions and balances among the Company and its subsidiaries have been eliminated upon consolidation.
A subsidiary is an entity in which the Company, directly or indirectly, controls more than one half of the voting power; or has the power to govern the financial and operating policies, to appoint or remove the majority of the members of the board of directors, or to cast a majority of votes at the meeting of directors.
F-8
AsiaStrategy
Notes to Unaudited Condensed Consolidated Financial Statements
3. Summary of Significant Accounting Policies (cont.)
Use of estimates and assumptions
The preparation of unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. These estimates and judgments are based on historical information, information that is currently available to the Group and on various other assumptions that the Group believes to be reasonable under the circumstances. Significant estimates required to be made by management include, but not limited to, allowance for expected credit losses against financial assets, write-down of inventories and allowance for deferred tax assets, accounting of operating lease right-of-use assets, and valuation of investment in equity securities, non-current. Actual results could differ from the estimates, and as such, differences could be material to these unaudited condensed consolidated financial statements.
Cash and cash equivalents
Cash includes balances maintained with banks which are unrestricted and immediately available for withdrawal and use, as well as cash on hand. Cash equivalents include short-term, highly liquid deposits held in the securities trading account, which are readily convertible to known amounts of cash and could be withdrawn without limitation.
Digital assets
The Group accounts for digital assets in accordance with the applicable provisions of U.S. GAAP. In determining the appropriate accounting for a digital asset, the Group first evaluates whether any asset classification other than intangible asset would be appropriate. If so, the Group would apply the relevant accounting for that asset class. If none of these classifications are appropriate, the Group may need to apply the guidance on intangible assets by default.
For digital assets that meet all of the scope criteria in Subtopic 350-60, Intangibles—Goodwill and Other—Crypto Assets, the Group applies the subsequent measurement and disclosure requirements of Subtopic 350-60. For digital assets that do not meet the scope criteria of Subtopic 350-60 and do not qualify for any asset classification, they are likely to meet the definition of an intangible asset and would generally be accounted for under Subtopic 350-30 as indefinite-lived intangible assets measured at cost less impairment.
For digital assets within the scope of Subtopic 350-60, the Group subsequently measures such assets at fair value at each reporting date in accordance with ASC 820, Fair Value Measurement. Fair value is generally determined based on quoted prices in active markets and is classified within Level 1 of the fair value hierarchy when such quoted prices represent unadjusted quoted prices in active markets for identical assets that are accessible to the Group. Changes in fair value are recognized in net income and presented as unrealized gains (losses) on digital assets in the unaudited condensed consolidated statements of operations and comprehensive loss.
The Group held digital assets consisting of Bitcoin (“BTC”), Tether USD (“USDT”), USD Coin (“USDC”) and XRP for investment and treasury diversification purposes, as well as for use in meeting its operational needs. The Group’s digital assets are initially recorded at cost, including transaction costs and fees directly attributable to their acquisition. BTC and XRP meet all of the scope criteria in Subtopic 350-60 because they are fungible, cryptographically secured digital assets that reside on blockchain-based distributed ledgers, lack physical substance, do not provide the Group with enforceable rights to or claims on underlying goods, services, or other assets, and were not created or issued by the Group or any of its related parties. For USDT and USDC, the Group evaluated the contractual rights associated with its holdings, including whether the Group has enforceable rights to or claims on underlying goods, services or other assets. Based on the terms applicable to the Group’s holdings and the manner in which USDT and USDC were acquired and held, the Group does not have enforceable right to, or claims on, underlying cash, services or other assets. Accordingly, all digital assets held by the Group meet all of the criteria in Subtopic 350-60 and are subsequently measured at fair value.
F-9
AsiaStrategy
Notes to Unaudited Condensed Consolidated Financial Statements
3. Summary of Significant Accounting Policies (cont.)
As of June 30, 2026,
All other digital assets are held with a third-party qualified custodian and are not subject to contractual sale restrictions. The Group does not engage in staking or mining activities. During the six months ended June 30, 2026, the Group advanced a USDT-denominated loan to a third party, as described in Note 10. Digital assets that the Group intends to hold for the long term, or that are subject to restrictions on use or disposal beyond twelve months after the reporting date, are classified as non-current digital assets. All other digital assets are classified as current digital assets. This classification is reassessed at each reporting date.
Investment in equity securities
The Group accounts for its investment in equity securities in accordance with ASC 321, Investments—Equity Securities. Investment in equity securities comprise the following:
(i) investment in equity securities, current
Investment in equity securities, current, represents publicly traded equity securities measured at fair value. Fair value is determined in accordance with ASC 820, Fair Value Measurement (“ASC 820”), based on quoted prices in active markets for identical assets, which are classified as Level 1 inputs. Changes in fair value, including unrealized holding gains and losses and realized gains and losses upon sale, are recognized in the unaudited condensed consolidated statements of operations and comprehensive loss as a component of other income (expense). These investments are classified as current assets because the securities are readily marketable and may be sold to meet liquidity needs, if necessary.
(ii) investment in equity securities, non-current
Investment in equity securities, non-current, represents investments in private equity funds. The Group does not have the ability to exercise significant influence over these private equity funds. Accordingly, the Group estimates the fair value of these investments using the net asset value per share, or its equivalent, as a practical expedient in accordance with ASC 820 (the “NAV practical expedient”). Changes in fair value, including unrealized holding gains and losses and realized gains and losses upon sale, are recognized in the unaudited condensed consolidated statements of operations and comprehensive loss as a component of other income (expense).
The Group evaluates its investments in equity securities at each reporting date. If facts and circumstances indicate that the fair value of an investment in a private equity fund is less than the value determined using the NAV practical expedient, the investment is adjusted to its estimated fair value, with the change in fair value recognized in net income and presented in the unaudited condensed consolidated statements of operations and comprehensive loss.
The Group evaluates each individual investment periodically for indicators of changes in fair value and appropriate classification and presentation.
F-10
AsiaStrategy
Notes to Unaudited Condensed Consolidated Financial Statements
3. Summary of Significant Accounting Policies (cont.)
Accounts receivable, net
Accounts receivable are recognized and carried at the original invoiced amount less an allowance for credit losses and do not bear interest. The Group adopted ASU No.2016-13 Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASC 326”) on its accounts receivable and records the allowance for credit losses as an offset to accounts receivable, and the estimated credit losses charged to the allowance is recognized under “general and administrative” in the unaudited condensed consolidated statements of operations and comprehensive loss. The Group assesses collectability by reviewing accounts receivable on a collective basis where similar characteristics exist, primarily based on similar business line or product offered and on an individual basis when the Group identifies specific customers with known disputes or collectability issues. In determining the amount of the allowance for expected credit losses, the Group considers historical collectability based on past due status, the age of the accounts receivable balances, credit quality of the Group’s customers based on ongoing credit evaluations, current economic conditions, reasonable and supportable forecasts of future economic conditions, and other factors that may affect the Group’s ability to collect from customers. Under this accounting guidance, the Group measures credit losses on its accounts receivable using the current expected credit loss model under ASC 326. As of June 30, 2026 and December 31, 2025, the Group provided allowance for expected credit losses against accounts receivable of $ and $, respectively.
Inventories, net
Inventories are stated at the lower of cost or net realizable value. Cost of inventories are determined using the first in first out method. Management reviews inventories for obsolescence and slow-moving inventories periodically and writes down the inventories to net realizable value when the carrying value exceeds net realizable value. A write-down establishes a new cost basis for the inventories and is not subsequently reversed. For the six months ended June 30, 2026, 2025 and 2024, the write-downs of inventories were $
Loans receivable, net
Loans receivable are initially recognized at the amount of cash advanced, net of any origination fees received and direct transaction costs incurred. Loans receivable are subsequently measured at amortized cost using the effective interest method. The amortized cost basis represents the unpaid principal balance, adjusted for unamortized premiums or discounts, deferred loan fees and costs, if any. Loans receivable are classified as current assets since the loans are scheduled to mature within
The Group assesses credit risk and evaluates collectability of loans receivable on an ongoing basis in accordance with ASC 326, Financial Instruments – Credit Losses. The Group reviews loans receivable on a regular basis and makes allowance for expected credit losses if there is evidence indicating that loans receivable may be unrecoverable based on the Group’s historical losses, specific circumstances, and general economic conditions. As of June 30, 2026 and December 31, 2025, the balances of allowance for expected credit loss against loans receivable were $
Prepaid expenses
Prepaid expenses are comprised of prepaid consultancy fees, professional fees and office supplies. These amounts are recognized as expenses on a straight-line basis over the relevant non-cancellable contract term or expected benefit period, so the balances are realized over the life of the underlying arrangements, with the portion expected to be expensed within the next twelve months classified as current and the remainder as non-current. Prepaid expenses are not subject to expected credit loss assessment, as they represent advance payments for goods or services to be received from counterparties rather than contractual rights to receive cash.
F-11
AsiaStrategy
Notes to Unaudited Condensed Consolidated Financial Statements
3. Summary of Significant Accounting Policies (cont.)
Deposits and other current assets, net
Deposits and other current assets are comprised of other receivables and deposits, including rental deposits and interest receivables. The Group adopted ASC 326 on its other current assets. The new credit losses guidance replaces the old model for measuring the allowance for credit losses with a model that is based on the expected losses. Under this accounting guidance, the Group measures expected credit losses on its other current assets using the current expected credit loss model under ASC 326. As of June 30, 2026 and December 31, 2025, the balances of allowance for expected credit loss against other current assets were $
Leases
The Group adopted ASU No. 2016-02, Leases (“Topic 842”), which generally requires lessees to recognize operating and financing lease liabilities and corresponding right-of-use assets on the balance sheet and to provide enhanced disclosures surrounding the amount, timing and uncertainty of cash flows arising from leasing arrangements.
The Group is the lessee of a non-cancellable operating lease for corporate office premises. The Group determines if the arrangements are lease at inception. A lease for which substantially all the benefits and risks incidental to ownership remain with the lessor is classified by the lessee as an operating lease. All leases of the Group are currently classified as operating leases.
Operating lease ROU assets and lease liabilities are recognized at the commencement date based on the present value of future lease payments over the lease term. ROU assets represent the Group’s right to use an underlying asset for the lease term and operating lease liabilities represent its obligation to make lease payments arising from the lease.
When determining the lease term, at lease commencement date, the Group considers options to extend or terminate the lease when it is reasonably certain that it will exercise or not exercise that option. The interest rate used to determine the present value of future lease payments is the Group’s incremental borrowing rate based on the information available at the lease commencement date.
The lease standard (ASC 842) provides practical expedients for an entity’s ongoing accounting. The Group elects to apply short-term lease exception for leases with a lease term of
The Group evaluates the impairment of its ROU assets consistently with the approach applied for its other long-lived assets. The Group reviews the recoverability of its long-lived assets when events or changes in circumstances indicate that the carrying value of the assets may not be recoverable. The assessment of possible impairment is based on its ability to recover the carrying value of the assets from the expected undiscounted future pre-tax cash flows of the related operations. As of June 30, 2026 and December 31, 2025, the Group did recognize any impairment loss against its ROU assets.
F-12
AsiaStrategy
Notes to Unaudited Condensed Consolidated Financial Statements
3. Summary of Significant Accounting Policies (cont.)
Property and equipment, net
Property and equipment are stated at cost less accumulated depreciation and impairment losses.
| Office equipment |
| |||
| Furniture and fixture |
| |||
| Motor vehicle |
|
Expenditures for repairs and maintenance, which do not materially extend the useful lives of the assets, are expensed as incurred. Expenditures for major renewals and betterments which substantially extend the useful lives of assets are capitalized. The cost and related accumulated depreciation of assets disposed of or retired are removed from the accounts, and any resulting gain or loss is reflected in the unaudited condensed consolidated statements of operations and comprehensive loss under other income or expenses.
Impairment of long-lived assets
The Group reviews long-lived assets, including property and equipment, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the undiscounted future pre-tax cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Fair value is generally determined by discounting the cash flows expected to be generated by the asset (asset group), when the market prices are not readily available. The adjusted carrying amount of the asset is the new cost basis and is depreciated over the asset’s remaining useful life. Long-lived assets are grouped with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. As of June 30, 2026 and December 31, 2025, impairment of long-lived assets was recognized.
Revenue recognition
The Group follows the rules and guidance set out under ASC 606, Revenue from Contracts with Customers (“ASC 606”), when recognizing revenue from contracts with customers. The core principle of ASC 606 requires an entity to recognize revenues to depict the transfer of goods to customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange for those goods recognized as performance obligations are satisfied. In accordance with ASC 606, revenues are recognized when the Group satisfies the performance obligations by delivering the promised goods to the customers, in an amount that reflects the consideration the Group expects to be entitled to in exchange for those goods. The following five steps are applied to achieve that core principle:
| Step 1: | Identify the contract with the customer | |
| Step 2: | Identify the performance obligations in the contract |
F-13
AsiaStrategy
Notes to Unaudited Condensed Consolidated Financial Statements
3. Summary of Significant Accounting Policies (cont.)
| Step 3: | Determine the transaction price | |
| Step 4: | Allocate the transaction price to the performance obligations in the contract | |
| Step 5: | Recognize revenue when the company satisfies a performance obligation. |
The Group identifies each distinct sales transaction as a performance obligation. The recognition and measurement of revenues is based on the assessment of individual contract terms. The Group applies a practical expedient to expense costs as incurred for those suffered in order to obtain a contract with a customer when the amortization period would have been
The Group has only one principal revenue stream, which is the trading of luxury watches. The Group carried out all its business activities and operations in Hong Kong. All transactions are concluded and completed in Hong Kong with similar terms and conditions.
The Group enters into a distinct agreement with its customers, through sales order and sales invoice, to sell luxury watches in exchange for sales proceeds. The Group’s promise to sell watches to its customers is considered distinct and is identified as one performance obligation. The shipping term is local delivery in Hong Kong. The Group charges its customers sales proceeds at a fixed amount, which is explicitly stated in the sales order and sales invoice and is based on the unit price and quantity supplied to the customer. The Group usually does not offer a credit period to its 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.
Customers’ obligation to make payment upon or before delivery, and physical possession of watches indicates that control over the assets is transferred to the customer upon delivery. Furthermore, upon delivery, customers take on the risks and rewards associated with ownership of the luxury watches and are ready to derive benefits from the assets. Consequently, revenue from the sales of luxury watches is recognized at a point in time when the transaction and the Group’s performance obligation are completed, as evidenced by the delivery of watches.
Warranty
Under ASC 460, Guarantees, at the time a sale is recognized, the Group shall record estimated future warranty costs. These estimated costs for warranties are determined at completion and are not for warranties separately sold by the Group. Generally, the estimated claim rates of warranties are based on actual warranty experience or the Group’s best estimate. There were no such reserves for the six months ended June 30, 2026, 2025 and 2024, because the Group considered that the claim rates of warranties had been immaterial historically and are expected to remain immaterial for the periods in question.
Contract assets and contract liabilities
The Group classifies its right to consideration in exchange for goods transferred to a customer as either a receivable or a contract asset. A receivable is a right to consideration that is unconditional as compared to a contract asset which is a right to consideration that is conditional upon factors other than the passage of time. The Group recognizes accounts receivable in its unaudited condensed consolidated balance sheets when it transfers the goods in advance of receiving consideration and it has the unconditional right to receive consideration. A contract asset is recorded when the Group has transferred the goods to the customer before payment is received or is due, and the Group’s right to consideration is conditional on future performance or other factors in the contract. As of June 30, 2026 and December 31, 2025, the Group did not have any contract assets.
F-14
AsiaStrategy
Notes to Unaudited Condensed Consolidated Financial Statements
3. Summary of Significant Accounting Policies (cont.)
Cost of revenue
Cost of revenue primarily consists of the cost of luxury watches and incremental transportation expenses incurred for the sales and delivery of watches.
Employee benefit plan
Employees of the Group located in Hong Kong participate in a compulsory retirement benefit scheme as required by the local laws in Hong Kong. Contributions are required by both the Group and its employees at a rate of
Borrowing costs
All borrowing costs are recognized as finance expense in the unaudited condensed consolidated statements of operations and comprehensive loss in the period in which they are incurred.
Convertible debts
The Group accounts for its convertible debt instruments in accordance with ASC 470-20, Debt with Conversion and Other Options. Upon initial recognition, convertible debts are recorded as liabilities at the proceeds received, net of unamortized debt issuance costs, discounts, or premiums, as applicable. Debt issuance costs are presented as a direct deduction from the carrying amount of the related debt liability and are amortized to interest expense using the effective interest method.
The Group did not elect the fair value option for its convertible debt instruments. The Group evaluates the embedded conversion feature and any other embedded features in such instruments under ASC 815-15, Derivatives and Hedging—Embedded Derivatives, to determine whether bifurcation is required. The Group concluded that the embedded conversion feature in its convertible debt instruments is not required to be separately accounted for as a derivative. Accordingly, the convertible debt instruments are accounted for wholly as debt and are subsequently measured at amortized cost.
F-15
AsiaStrategy
Notes to Unaudited Condensed Consolidated Financial Statements
3. Summary of Significant Accounting Policies (cont.)
Income taxes
The Group accounts for income taxes under ASC 740, Income Taxes. Provision for income taxes consists of current taxes and deferred taxes.
Current tax is recognized based on the results for the year as adjusted for items which are non-assessable or disallowed. It is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.
Deferred tax is recognized in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the unaudited condensed consolidated financial statements and the corresponding tax basis. Deferred tax is calculated using tax rates that are expected to apply to the period when the asset is realized, or the liability is settled. Deferred tax is charged or credited in the unaudited condensed consolidated statements of operations and comprehensive loss, except when it is related to items credited or charged directly to equity. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.
An uncertain tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. Penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the period incurred. The Group did not have any significant uncertain tax positions nor interest and penalty associated with tax positions as of June 30, 2026 and December 31, 2025.
Segment reporting
The Group determines its operating segments in accordance with ASC 280, Segment Reporting, using the management approach. Under this approach, operating segments are identified based on the internal reports regularly reviewed by the Group’s chief operating decision maker (the “CODM”) for purposes of allocating resources and assessing performance. The Group’s CODM is its Chief Executive Officer.
The CODM reviews and evaluates the Group’s operating results, allocates resources, and assesses performance on a consolidated basis. The CODM uses segment net loss, which is consistent with consolidated net loss as reported in the unaudited condensed consolidated statements of operations and comprehensive loss, as the primary measure of segment performance and resources allocation. The CODM also reviews total consolidated assets as the measure of segment assets. In addition, the CODM reviews consolidated functional expense information, including selling and marketing expenses and general and administrative expenses, together with other consolidated income and expense items, including interest expense, sundry income (expense), net, and income tax benefit.
During the six months ended June 30, 2026, 2025 and 2024, the Group had one principal revenue generating activity, namely the trading of luxury watches. The Group conducts its business activities and operations in Hong Kong, and substantially all transactions are concluded and completed in Hong Kong under similar economic characteristics and conditions. The Group does not have separate operating divisions for which discrete financial information is regularly reviewed by the CODM. Accordingly, the Group has determined that it operates as a single operating segment and a single reportable segment.
F-16
AsiaStrategy
Notes to Unaudited Condensed Consolidated Financial Statements
3. Summary of Significant Accounting Policies (cont.)
Comprehensive income (loss)
Comprehensive income (loss) is defined as the changes in equity of the Group during a period from transactions and other events and circumstances excluding transactions resulting from investments by owners and distributions to owners. Comprehensive income (loss) consists of two components, net income (loss) and other comprehensive income (loss). Other comprehensive income (loss) refers to revenue, expenses, gains and losses that under U.S. GAAP are recorded as an element of shareholders’ equity but are excluded from net income. Other comprehensive income (loss) consists of a foreign currency translation adjustment resulting from the Group not using the U.S. Dollars as its functional currency.
Earnings (loss) per share
Earnings (loss) per share is calculated in accordance with ASC 260, Earnings Per Share. Basic earnings (loss) per share is computed by dividing net income (loss) attributable to each class of ordinary shareholders by the weighted average number of shares of that particular class outstanding during the period.
Diluted earnings (loss) per share is calculated by dividing net income (loss) attributable to each class of ordinary shareholders, as adjusted for the effect of dilutive ordinary equivalent shares of that class, if any, by the weighted average number of that particular class of ordinary and dilutive ordinary equivalent shares outstanding during the period. Ordinary share equivalents are excluded from the computation of diluted earnings (loss) per share if their effects would be anti-dilutive. Basic and diluted earnings (loss) per ordinary share are presented in the Group’s unaudited condensed consolidated statements of operations and comprehensive loss.
ASC 260 considers all convertible securities, including convertible debt, which by their terms may be converted into common stock of the reporting entity, as potential common shares. Share-settled convertible debt is generally included in diluted earnings (loss) per share using the if-converted method, a method of computing earnings (loss) per share data that assumes conversion of convertible securities at the beginning of the reporting period (or at time of issuance, if later).
On October 13, 2025, the Company issued convertible debts with an aggregate principal amount of $
The diluted loss per share for the six months ended June 30, 2026 calculated under the if-converted method would be $(0.0185) per share, compared with the basic loss per share of $(
Diluted loss per share for the six months ended June 30, 2026, 2025 and 2024 were $(
F-17
AsiaStrategy
Notes to Unaudited Condensed Consolidated Financial Statements
3. Summary of Significant Accounting Policies (cont.)
Translation of foreign currencies
The functional currency of the Group’s Hong Kong entities is Hong Kong Dollars (“HKD” or “HK$”) and the functional currency of the entities in the Cayman Islands, B.V.I, and Singapore is U.S. Dollars (“US$” or “$”). The Group’s unaudited condensed consolidated financial statements are presented in U.S. Dollars (“US$” or “$”). The results of operations and the unaudited condensed consolidated statements of cash flows, denominated in the functional currency, are translated to US$ at the average rate of exchange during the reporting period. Assets and liabilities denominated in the functional currency at the balance sheet dates are translated to US$ at the applicable rates of exchange in effect at those dates. The equity, denominated in the functional currency, is translated to US$ at the historical rate of exchange at the time of the transaction. Because cash flows are translated based on the average translation rate, amounts related to assets and liabilities reported on the unaudited condensed consolidated statements of cash flows will not necessarily agree with changes in the corresponding balances on the unaudited condensed consolidated balance sheets. Translation adjustments arising from the use of different exchange rates from period to period are included as a separate component of accumulated other comprehensive income or loss in the unaudited condensed consolidated statements of changes in shareholders’ (deficit) equity. Gains and losses from foreign currency transactions are included in the Group’s unaudited condensed consolidated statements of operations and comprehensive loss.
The following table outlines the exchange rates between HK$ and US$ that are used in preparing these unaudited condensed consolidated financial statements:
| As of | ||||||||
| June 30, 2026 | December 31, 2025 | |||||||
| Year-end spot rate | ||||||||
| For the six months ended June 30, | ||||||||||||
| 2026 | 2025 | 2024 | ||||||||||
| Average rate | ||||||||||||
Fair value of financial instruments
The fair value of a financial instrument is defined as the exchange price that would be received from an asset or paid to transfer a liability (as exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. A three-level fair value hierarchy prioritizes the inputs used to measure fair value. The hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:
| Level 1 | — | Quoted prices in active markets for identical assets and liabilities. | |||
| Level 2 | — | Quoted prices in active markets for similar assets and liabilities, or other inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. | |||
| Level 3 | — | Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets and liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs. |
F-18
AsiaStrategy
Notes to Unaudited Condensed Consolidated Financial Statements
3. Summary of Significant Accounting Policies (cont.)
As of June 30, 2026 and December 31, 2025, the Group’s financial instruments comprised primarily cash and cash equivalents, accounts receivable, investment in equity securities, other current assets, loans receivable, accounts payable, bank borrowings, third party borrowing, convertible debts, amount due from a related party, accrued expenses and other current liabilities.
For publicly traded equity securities, the Group concludes the fair value of its investments is determined based on quoted prices in active markets for identical assets (Level 1 inputs). For investments in private equity funds, as a practical expedient, the Group uses NAV or its equivalent to measure the fair value of its investments which the Group does not have the ability to exercise significant influence.
Additionally, the Group concludes that the fair value of the Group’s bank borrowings approximates their carrying value as the bank borrowings are subject to floating rates that are close to the market interest rate. For the other financial instruments, the carrying amounts approximate their fair values due to the short-term nature of these instruments.
The Group’s digital assets are not financial instruments. They are crypto assets within the scope of ASC 350-60 and, as described above under “Digital assets”, are measured at fair value on a recurring basis in accordance with ASC 820. They are included in the table below so that the amounts measured at fair value reconcile to the unaudited condensed consolidated balance sheets.
As of June 30, 2026 and December 31, 2025, the Group held certain assets that are required to be measured at fair value on a recurring basis:
| Assets measured at fair value on a recurring basis | Fair value hierarchy |
Fair value as of June 30, 2026 | ||||
| Restricted digital assets - Bitcoin | Level 1 | $ | ||||
| Digital assets – USDT and USDC | Level 1 | |||||
| Investment in equity securities, current - DV8 Public Company Limited | Level 1 | |||||
| Investment in equity securities, non-current - ASP LLC portfolio | Net asset value as a practical expedient | $ | ||||
| Assets measured at fair value on a recurring basis | Fair value hierarchy | Fair value as of December 31, 2025 | ||||
| Digital assets - Bitcoin | Level 1 | $ | ||||
| Digital assets - USDT | Level 1 | |||||
| Investment in equity securities, current - DV8 Public Company Limited | Level 1 | |||||
| Investment in equity securities, non-current - ASP LLC portfolio | Net asset value as a practical expedient | $ | ||||
Related parties
Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control or significant influence of the same party, such as a family member or relative, shareholder, or a related corporation.
Commitments and contingencies
In the normal course of business, the Group is subject to contingencies, such as legal proceedings and claims arising out of its business, which cover a wide range of matters. Liabilities for contingencies are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.
F-19
AsiaStrategy
Notes to Unaudited Condensed Consolidated Financial Statements
3. Summary of Significant Accounting Policies (cont.)
If the assessment of a contingency indicates that it is probable that a material loss is incurred and the amount of the liability can be estimated, then the estimated liability is accrued in the Group’s unaudited condensed consolidated financial statements. If the assessment indicates that a potentially material loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss, if determinable and material, would be disclosed.
Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the nature of the guarantee would be disclosed.
Recent accounting pronouncements
The Group considers the applicability and impact of all accounting standards updates (“ASUs”). Management periodically reviews new accounting standards that are issued. Under the Jumpstart Our Business Startups Act of 2012, as amended (the “JOBS Act”), the Group meets the definition of an emerging growth company, or EGC, and has elected the extended transition period for complying with new or revised accounting standards, which delays the adoption of these accounting standards until they would apply to private companies.
Recent accounting pronouncements not yet adopted
In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. This update requires that at each interim and annual reporting period public entities disclose (1) the amounts of purchases of inventory, employee compensation, depreciation, amortization, and depletion in commonly presented expense captions; (2) certain amounts that are already required to be disclosed under current GAAP in the same disclosure as the other disaggregation requirements; (3) a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively; and (4) the total amount of selling expenses and, in annual reporting periods, the definition of selling expenses. In January 2025, the FASB issued ASU 2025-01, Income Statement—Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date (“ASU 2025-01”), which clarified that ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted, and the amendments may be applied prospectively or retrospectively. The Group expects the adoption of the amendments to result in additional disclosures but not to affect its financial position, results of operations or cash flows. The Group is currently evaluating the extent of the additional disclosures that will be required.
In July 2025, FASB issued ASU No. 2025-05, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets (“ASU 2025-05”). This provides all entities with a practical expedient in developing reasonable and supportable forecasts as part of estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under Topic 606. ASU No. 2025-05 is effective on a prospective basis for annual periods beginning after December 15, 2025, though early adoption and retroactive application is permitted. The Group has elected the practical expedient permitting it to assume that current conditions as of the balance sheet date do not change for the remaining life of current accounts receivable and current contract assets arising from transactions accounted for under Topic 606. Adoption did not have a material effect.
In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements. ASU 2025-11 clarifies the applicability of interim reporting guidance under ASC 270 and reorganizes interim disclosure requirements into a centralized framework. The amendments also introduce a disclosure principle requiring entities to disclose material events and changes occurring since the most recent annual reporting period. The guidance is effective for interim periods within fiscal years beginning after December 15, 2027 for public business entities, with early adoption permitted. The Group is currently evaluating the impact on its financial statements of adopting this guidance.
In December 2025, the FASB issued ASU 2025-12, Codification Improvements, to clarify ambiguities and improve consistency across multiple topics in the Accounting Standards Codification. Key provisions include amendments to Topic 260 (Earnings Per Share) to refine the treatment of anti-dilutive shares in year-to-date diluted EPS calculations when an entity experiences a loss from continuing operations, as well as modifications to Topic 842 (Leases) to clarify disclosure exemptions for certain lease receivables. The standard is effective for fiscal years beginning after December 15, 2026. The Group is currently evaluating the impact on its financial statements of adopting this guidance.
The Group does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the unaudited condensed consolidated financial position, statements of operations and comprehensive loss and statements of cash flows.
F-20
AsiaStrategy
Notes to Unaudited Condensed Consolidated Financial Statements
4. Significant Risks
Currency risk
The functional currency of the Group’s Hong Kong entities is HK$ and the functional currency of the entities in the Cayman Islands, B.V.I, and Singapore is US$. The accompanying unaudited condensed consolidated financial statements are presented in US$. The Group’s sales, operation activities and assets and liabilities are predominately denominated in the functional currency. The Group considers 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$, or vice versa, at a rate close to HK$
At the same time, the Group buys watches from distributors located in Hong Kong, South America, Europe and Singapore for the six months ended June 30, 2026, 2025 and 2024, primarily using HK$ and Swiss Franc (“CHF”), and sell them to customers in HK$. Any fluctuation in exchange rates against HK$ may result in higher costs of purchases.
For the six months ended June 30, 2026, the Group had $
The Group has not used any instruments or derivatives to manage or hedge its currency risk exposure.
Concentration and credit risks
Financial instruments that potentially subject the Group to the credit risks consist of cash and cash equivalents, accounts receivable, loans receivable, investment in equity securities, amount due from a 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.
The Group deposits its cash and cash equivalents and restricted cash with reputable banks located in Hong Kong, Taiwan, and third-party qualified custodian. As of June 30, 2026 and December 31, 2025, $
The Group has not experienced any losses in these bank accounts or with respect to its custodial cash balance, and management believes that the Group is not exposed to any significant credit risk on cash and cash equivalents.
F-21
AsiaStrategy
Notes to Unaudited Condensed Consolidated Financial Statements
4. Significant Risks (cont.)
Assets that potentially subject the Group to significant credit risks primarily consist of accounts receivable, loans receivable, and other current assets. The Group performs regular and ongoing credit assessments of the counterparts’ financial conditions and credit histories. The Group also assesses historical collection trends, aging of receivables and general economic conditions. The Group considers that it has adequate controls over these receivables in order to minimize the related credit risk. As of June 30, 2026 and December 31, 2025, the balances of allowance for expected credit losses against these balances were $
For the six months ended June 30, 2026, 2025 and 2024, the Group’s watch trading operations and related assets were located in Hong Kong, while the Group’s digital assets and investments in equity securities were held through its entities incorporated in Singapore and the Cayman Islands. At the same time, the Group considers that it is exposed to the following concentrations of risk:
(a) Major customers
For the six months ended June 30, 2026, only one customer accounted for 10% or more of the Group’s revenue. Revenue from this customer accounted for
For the six months ended June 30, 2025, three customers accounted for 10% or more of the Group’s revenue. Revenue from these three customers accounted for
For the six months ended June 30, 2024, two customers accounted for 10% or more of the Group’s revenue. Revenue from these two customers accounted for
| Six months ended June 30, 2026 | As of June 30, 2026 | |||||||||||
| Customer | Revenue | Percentage of revenue | Accounts receivables, gross | |||||||||
| (Unaudited) | (Unaudited) | |||||||||||
| Customer A | $ | % | $ | |||||||||
| Total: | $ | % | $ | |||||||||
| Six months ended June 30, 2025 | As of June 30, 2025 | |||||||||||
| Customer | Revenue | Percentage of revenue | Accounts receivables, gross | |||||||||
| (Unaudited) | (Unaudited) | |||||||||||
| Customer A | $ | % | $ | |||||||||
| Customer B | % | |||||||||||
| Customer C | % | |||||||||||
| Total: | $ | % | $ | |||||||||
| Six months ended June 30, 2024 | As of June 30, 2024 | |||||||||||
| Customer | Revenue | Percentage of revenue | Accounts receivables, gross | |||||||||
| (Unaudited) | (Unaudited) | |||||||||||
| Customer B | $ | % | $ | |||||||||
| Customer A | % | |||||||||||
| Total: | $ | % | $ | |||||||||
F-22
AsiaStrategy
Notes to Unaudited Condensed Consolidated Financial Statements
4. Significant Risks (cont.)
As of June 30, 2026, there were three customers whose receivables accounted for 10% or more of the Group’s total balances of accounts receivable and they accounted for
As of December 31, 2025, there was one customer whose receivables accounted for 10% or more of the Group’s total balances of accounts receivable and it accounted for
All the concentration percentages of accounts receivable are calculated before allowance for expected credit losses.
(b) Major vendors
For the six months ended June 30, 2026, four vendors accounted for 10% or more of the Group’s total purchase. Total purchase from these four vendors accounted for
For the six months ended June 30, 2025, three vendors accounted for 10% or more of the Group’s total purchase. Total purchase from these three vendors accounted for
For the six months ended June 30, 2024, four vendors accounted for 10% or more of the Group’s total purchase. Total purchase from these four vendors accounted for
| Six months ended June 30, 2026 | As of June 30, 2026 | |||||||||||
| Vendor | Purchase | Percentage of total purchase | Accounts payable | |||||||||
| (Unaudited) | (Unaudited) | |||||||||||
| Vendor A | $ | % | $ | |||||||||
| Vendor B | % | |||||||||||
| Vendor C | % | |||||||||||
| Vendor D | % | |||||||||||
| Total: | $ | % | $ | |||||||||
| Six months ended June 30, 2025 | As of June 30, 2025 | |||||||||||
| Vendor | Purchase | Percentage of total purchase | Accounts payable | |||||||||
| (Unaudited) | (Unaudited) | |||||||||||
| Vendor E | $ | % | $ | |||||||||
| Vendor B | % | |||||||||||
| Vendor F | % | |||||||||||
| Total: | $ | % | $ | |||||||||
| Six months ended June 30, 2024 | As of June 30, 2024 | |||||||||||
| Vendor | Purchase | Percentage of total purchase | Accounts payable | |||||||||
| (Unaudited) | (Unaudited) | |||||||||||
| Vendor E | $ | % | $ | |||||||||
| Vendor F | % | |||||||||||
| Vendor G | % | |||||||||||
| Vendor H | % | |||||||||||
| Total: | $ | % | $ | |||||||||
F-23
AsiaStrategy
Notes to Unaudited Condensed Consolidated Financial Statements
4. Significant Risks (cont.)
As of June 30, 2026, there was one vendor whose payables accounted for 10% or more of the Group’s total balances of accounts payable and it accounted for
As of December 31, 2025, there was one vendor whose payables accounted for 10% or more of the Group’s total balances of accounts payable and it accounted for
Interest rate risk
Fluctuations in market interest rates may negatively affect the Group’s financial condition and results of operations. The Group is exposed to floating interest rate risk on bank deposits and bank borrowings, particularly during periods when the interest rate is expected to change significantly. Nevertheless, given the amounts of bank deposits in question, the Group considers the related interest rate risk not material. On the other hand, as of June 30, 2026, the Group had outstanding bank borrowings of $
Price risk
As of June 30, 2026, the Group held investments in equity securities with an aggregate carrying value of approximately $
As of June 30, 2026, the Group held
5. Accounts Receivable, Net
As of June 30, 2026 and December 31, 2025, accounts receivable, net consisted of the following balances:
| As of | ||||||||
| June 30, 2026 |
December 31, 2025 |
|||||||
| (Unaudited) | (Audited) | |||||||
| Accounts receivable | $ | $ | ||||||
| Less: allowance for expected credit losses | ||||||||
| Accounts receivable, net | $ | $ | ||||||
There was movement in the allowance for expected credit losses during the relevant period/year.
F-24
AsiaStrategy
Notes to Unaudited Condensed Consolidated Financial Statements
6. Inventories, Net
As of June 30, 2026 and December 31, 2025, inventories, net consisted of the following balances:
| As of | ||||||||
| June 30, 2026 | December 31, 2025 | |||||||
| (Unaudited) | (Audited) | |||||||
| Inventories, net | $ | $ | ||||||
For the six months ended June 30, 2026, 2025 and 2024, the write-downs of inventories were $
7. Investment in Equity Securities
As of June 30, 2026 and December 31, 2025, investment in equity securities consisted of the following balances:
| As of | ||||||||
| June 30, 2026 | December 31, 2025 | |||||||
| (Unaudited) | (Audited) | |||||||
| Investment in equity securities, current | ||||||||
| DV8 Public Company Limited(1) | $ | $ | ||||||
| Investment in equity securities, non-current | ||||||||
| ASP LLC portfolio(2) | $ | $ | ||||||
| (1) | On July 3, 2025, the Group, through AsiaStrategy SG, announced its intention to make a tender offer with certain other offerors to acquire all the securities of DV8 Public Company Limited (“DV8”) (SET: DV8), a public company listed on The Stock Exchange of Thailand. The offer price for the ordinary shares was THB
Subsequently, on August 15, 2026, the Group entered into agreements to dispose of its entire equity interest in AsiaStrategy SG. The transaction was completed on August 24, 2026. As of the disposal date, DV8’s share price was THB |
F-25
AsiaStrategy
Notes to Unaudited Condensed Consolidated Financial Statements
7. Investment in Equity Securities (cont.)
| (2) | On August 27, 2025, the Company contributed $
On September 10, 2025, ASP LLC subscribed for
The Group classifies its interest in ASP LLC as an investment in a private equity fund over which it does not have the ability to exercise significant influence. Accordingly, the Group uses net asset value as a practical expedient to estimate the fair value of the investment in accordance with ASC 820. There is no indication that the investment will be sold at an amount different from net asset value per share. Gains and losses resulting from changes in fair value are recognized in the unaudited condensed consolidated statements of operations and comprehensive loss. The investment was classified as a non-current asset because the Group intends to hold the investment on a long term basis, and the interests are subject to restrictions on redemption and transfer.
As of the date of this Form 6-K, the net asset value of the Group’s interest in ASP LLC was $ |
The following table is a roll-forward of the investment in equity securities for the six months ended June 30, 2026, 2025 and 2024.
| For the Six Months Ended June 30, | ||||||||||||
| 2026 | 2025 | 2024 | ||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||
| Balance at January 1 | $ | $ | $ | |||||||||
| Investment in equity securities | ||||||||||||
| Unrealized gains on investment in equity securities, net | ||||||||||||
| Balance at June 30 | ||||||||||||
8. Lease
For the six months ended June 30, 2026, 2025 and 2024, the Group subsisted of the following non-cancellable lease arrangements.
| Description of lease | Lease term | |
| Office premise at 33/F of Sunshine Plaza, Hong Kong | 1-year fixed term lease from January 1, 2024 to December 31, 2024(1) 1-year fixed term lease from January 1, 2025 to December 31, 2025, and further replaced by a 4-year fixed term leases from August 1, 2025 to July 31, 2029 since August 1, 2025(2) |
| (1) | ASC 842-20 defines a short-term lease as a lease whose lease term, at commencement, is 12 months or less and that does not include a purchase option whose exercise is reasonably certain. The lease terms of the lease arrangements during the year ended December 31, 2024 were |
| (2) | On July 16, 2025, the Group entered into an amended lease agreement with New Harvest Investment Holding Limited, effective August 1, 2025, to replace the original |
F-26
AsiaStrategy
Notes to Unaudited Condensed Consolidated Financial Statements
8. Lease (cont.)
The following table summarizes the classification of operating lease right-of-use asset and operating lease liabilities in the Group’s unaudited condensed consolidated balance sheets:
| As of | ||||||||
| June 30, 2026 | December 31, 2025 | |||||||
| (Unaudited) | (Audited) | |||||||
| Assets | ||||||||
| Operating lease right-of-use asset, net | $ | $ | ||||||
| Liabilities | ||||||||
| Operating lease liabilities | ||||||||
Information related to operating lease activities during the six months ended June 30, 2026, 2025 and 2024 are as follows:
| For the Six Months Ended June 30, | ||||||||||||
| 2026 | 2025 | 2024 | ||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||
| Amortization of operating lease right-of-use asset | $ | $ | $ | |||||||||
| Accretion of interest on operating lease liabilities | ||||||||||||
| Total operating lease expenses | $ | $ | $ | |||||||||
The rental fee for the office lease was fully paid at the commencement of the lease term, and there were no future lease commitments as of June 30, 2026.
As of June 30, 2026 and December 31, 2025, the weighted average discount rate of operating leases was
For the six months ended June 30, 2026, 2025 and 2024, the short-term lease expenses were $, $
9. Property and Equipment, Net
As of June 30, 2026 and December 31, 2025, property and equipment, net, consisted of the following:
| As of | ||||||||
| June 30, 2026 | December 31, 2025 | |||||||
| (Unaudited) | (Audited) | |||||||
| Furniture and fixture | $ | $ | ||||||
| Office equipment | ||||||||
| Motor vehicle | ||||||||
| Less: accumulated depreciation | ( | ) | ( | ) | ||||
| Total property and equipment, net | $ | $ | ||||||
Depreciation expenses were $
F-27
AsiaStrategy
Notes to Unaudited Condensed Consolidated Financial Statements
10. Digital Assets and Restricted Digital Assets
During the year ended December 31, 2025, the Group purchased digital assets consisting of Bitcoin (BTC) and Tether USD (USDT) for investment and treasury diversification purposes. During the six months ended June 30, 2026, the Group purchased additional USDT for investment and treasury diversification purposes, received USDT from a third party borrowing, and received BTC, XRP and USDT upon enforcement of collateral, and USDC as interest, under a USDT loan advanced to a third party. During the same period, the Group sold certain of its USDT and BTC, and all XRP, resulting in a net realized gain of $
| As of June 30, 2026 | ||||||||||||
| Digital Assets | Holdings | Cost Basis | Fair value | |||||||||
| BTC (1) | $ | $ | ||||||||||
| USDT (2) | ||||||||||||
| USDC (2) | ||||||||||||
| Total digital assets | $ | $ | ||||||||||
| (1) | The fair value per unit of BTC as of June 30, 2026 was approximately $ |
| (2) | During the six months ended June 30, 2026, the Group increased its activities in purchasing and disposing of digital assets. The Group’s holding purpose for these digital assets is no longer for long-term investment. Instead, these assets are expected to be realized, sold, or consumed in the ordinary course of business within the Group’s normal operating cycle. Accordingly, the Group classified its holdings of USDT and USDC as current assets as of June 30, 2026. |
| As of December 31, 2025 | ||||||||||||
| Digital Assets | Holdings | Cost Basis | Fair value | |||||||||
| BTC (1) | $ | $ | ||||||||||
| USDT | ||||||||||||
| Total digital assets | $ | $ | ||||||||||
| (1) |
The following table presents the movement for the digital assets of the Group for the six months ended June 30, 2026, and there was no movement for the Group’s digital assets for the six months ended June 30, 2025 and 2024.
| BTC (1) | USDT | USDC | XRP | Total | ||||||||||||||||
| Balance as of January 1, 2026 | $ | $ | $ | $ | $ | |||||||||||||||
| Purchase of digital assets | ||||||||||||||||||||
| Disposal of digital assets | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
| Proceeds from third party borrowing received in digital assets (2) | ||||||||||||||||||||
| Expenses paid with digital assets | ( | ) | ( | ) | ||||||||||||||||
| Interest income received with digital assets (3) | ||||||||||||||||||||
| Loan issued to Borrower in digital assets (3) | ( | ) | ( | ) | ||||||||||||||||
| Digital assets acquired upon settlement of loan collateral (3) | ||||||||||||||||||||
| Conversions between digital assets (4) | ( | ) | ( | ) | ||||||||||||||||
| Realized (losses) gains on digital assets | ( | ) | ||||||||||||||||||
| Unrealized losses on digital assets | ( | ) | ) | ( | ) | |||||||||||||||
| Balance as of June 30, 2026 | $ | $ | $ | $ | $ | |||||||||||||||
F-28
AsiaStrategy
Notes to Unaudited Condensed Consolidated Financial Statements
10. Digital Assets and Restricted Digital Assets (cont.)
| (1) | |
| (2) | |
| (3) | In January 2026, the Group entered into a loan agreement with Mr. Masashi Hayama (the “Borrower”), a third-party individual, pursuant to which the Company lent USDT
Following a decline in the value of the Original Collateral below a default floor ($
Although the Borrower remedied each prior deficiency, it failed to cure the final valuation event that occurred at the end of June 2026. As a result, all pledged digital assets, including both the Original Collateral and the Additional Collateral subsequently provided, were transferred to and became owned by the Group. The Group recognized the digital assets received at their fair value of $ |
| (4) |
11. Loans Receivable, Net
As of June 30, 2026 and December 31, 2025, loans receivable, net consisted of the following balances:
| As of | ||||||||
| June 30, 2026 | December 31, 2025 | |||||||
| (Unaudited) | (Audited) | |||||||
| Loans receivable | $ | $ | ||||||
| Less: allowance for expected credit losses | ( | ) | ( | ) | ||||
| Loans receivable, net | $ | $ | ||||||
F-29
AsiaStrategy
Notes to Unaudited Condensed Consolidated Financial Statements
11. Loans Receivable, Net (cont.)
| (1) | On April 9, 2025, AsiaStrategy entered into a loan agreement with Leisure Stream Ltd, which is an independent third party, for a principal amount of $ |
| (2) | On April 14, 2025 and April 15, 2025, AsiaStrategy entered into two loan agreements with Power Partner Capital Limited, which is an independent third party for an aggregate principal amount of $ |
| (3) | On December 19, 2025, AsiaStrategy entered into a loan agreement with Top Pride International Ltd. (“Top Pride”) to provide an unsecured revolving loan facility with a maximum principal amount of HK$ |
The movement of allowance for expected credit losses is as follow:
| As of | ||||||||
| June 30, 2026 | December 31, 2025 | |||||||
| (Unaudited) | (Audited) | |||||||
| Balance at beginning of the period/year | $ | $ | ||||||
| Provision of expected credit losses | ||||||||
| Exchange rate differences | ( | ) | ||||||
| Balance at end of the period/year | $ | $ | ||||||
12. Prepaid Expenses
As of June 30, 2026 and December 31, 2025, prepaid expenses consisted of the following balances:
| As of | ||||||||
| June 30, 2026 | December 31, 2025 | |||||||
| (Unaudited) | (Audited) | |||||||
| Prepaid expenses | $ | $ | ||||||
| Less: amounts classified as non-current assets | ( | ) | ( | ) | ||||
| Amounts classified as current assets | $ | $ | ||||||
F-30
AsiaStrategy
Notes to Unaudited Condensed Consolidated Financial Statements
12. Prepaid Expenses (Cont.)
Prepaid expenses primarily represent prepaid administrative expenses and professional fees. As of June 30, 2026, the balance mainly comprised a prepaid professional fee of $
The estimated aggregate expense for the next three twelve-month periods is as follows:
| Twelve months ending June 30, | Estimated Expense | |||
| 2027 | $ | |||
| 2028 | ||||
| 2029 | ||||
| $ | ||||
13. Deposits and Other Current Assets, Net
As of June 30, 2026 and December 31, 2025, deposits and other current assets, net consisted of the following balances:
| As of | ||||||||
| June 30, 2026 | December 31, 2025 | |||||||
| (Unaudited) | (Audited) | |||||||
| Trade deposits | $ | $ | ||||||
| Interest receivable | ||||||||
| Tax recoverable | ||||||||
| Other assets | ||||||||
| Less: allowance for expected credit losses | ( | ) | ( | ) | ||||
| Deposits and other current assets, net | $ | $ | ||||||
The movement of allowances for expected credit losses is as follow:
| As of | ||||||||
| June 30, 2026 | December 31, 2025 | |||||||
| (Unaudited) | (Audited) | |||||||
| Balance at beginning of the period/year | $ | $ | ||||||
| Provision for expected credit losses | ||||||||
| Balance at the end of the period/year | $ | $ | ||||||
F-31
AsiaStrategy
Notes to Unaudited Condensed Consolidated Financial Statements
14. Contract Liabilities
The movement of the Group’s contract liabilities are presented as follows:
| As of | ||||||||
| June 30, 2026 | December 31, 2025 | |||||||
| (Unaudited) | (Audited) | |||||||
| Balance at beginning of the period/year | $ | $ | ||||||
| Billing in advance of performance obligation | ||||||||
| Revenue recognized from contract liabilities in prior period/year | ( | ) | ||||||
| Exchange rate differences | ( | ) | ||||||
| Balance at end of the period/year | $ | $ | ||||||
15. Bank Borrowings
As of June 30, 2026 and December 31, 2025, bank borrowings consisted of the following:
| Outstanding | ||||||||||||||
| principal amount | ||||||||||||||
| as of | ||||||||||||||
| Bank facility Provider | Nature of banking facility | Tenor | Amount of banking facility | June 30, 2026 | December 31, 2025 | |||||||||
| (Unaudited) | (Audited) | |||||||||||||
| Shanghai Commercial Bank (“SCB”) | HK$ | $ | $ | |||||||||||
| SCB | HK$ | |||||||||||||
| Less: non-current portion | ( | ) | ( | ) | ||||||||||
| Bank borrowings, current | $ | $ | ||||||||||||
These bank borrowings were primarily obtained for general working capital.
SCB banking facility
Under the banking facility letter dated May 5, 2020 and subsequent amendments made on October 21, 2021, Shanghai Commercial Bank Limited (“SCB”), a bank in Hong Kong, extended a banking facility to Top Win Hong Kong and Top Pride International Ltd. (“Top Pride”). Top Pride was a related party of the Company up to October 29, 2024, as it was controlled by Mr. Sit Hon, who served as the former controlling shareholder and director of Top Win Hong Kong until that date. The facility comprises:
| (i) | trade financing of HK$ |
| (ii) | instalment loan of HK$ |
F-32
AsiaStrategy
Notes to Unaudited Condensed Consolidated Financial Statements
15. Bank Borrowings (cont.)
The securities provided under the SCB banking facility include (i) a pledge of the property located at 33/F, Sunshine Plaza, 353 Lockhart Road, Hong Kong, which is owned by New Harvest Investment Holding Limited (“New Harvest”), a company controlled by Mr. Sit Hon; (ii) a personal guarantee given by Mr. Sit Hon in the amount of HK$
On June 25, 2025, SCB amended certain security terms of its banking facility. The amendment added a new security term: a personal guarantee provided by Mr. Ngai Kwan in the amount of HK$
Subsequently on July 6, 2026, SCB further amended certain security terms of its banking facility. The updated facility is now provided solely to Top Win Hong Kong, with the previous facility extended to Top Pride having been discontinued. Key revisions include: (i) the trade financing limit was reduced from HK$
Although Mr. Sit Hon, New Harvest, and Top Pride ceased to be related parties of the Group as of October 29, 2024, these parties have remained committed to providing the aforementioned securities to secure the Group’s banking facility. The terms of the existing banking facility remain in full force and effect.
As of June 30, 2026 and December 31, 2025, the Company utilized revolving trade financing in the amounts of $
For the six months ended June 30, 2026, 2025 and 2024, the weighted average annual interest rates for the bank loans were approximately
The table below summarizes the remaining contractual maturities of the bank borrowings as of June 30, 2026. The bank borrowings are categorized by the years in which repayments are due:
| During the years ended June 30, | ||||
| 2027 | $ | |||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| 2031 and after | ||||
| Total repayments of bank loans | ||||
| Less: imputed interest | ( | ) | ||
| Balance recognized as at June 30, 2026 | $ | |||
As of the date of this Form 6-K, a total of $
F-33
AsiaStrategy
Notes to Unaudited Condensed Consolidated Financial Statements
16. Third Party Borrowing
As of June 30, 2026 and December 31, 2025, third party borrowing consisted of the following:
| As of | ||||||||
| June 30, 2026 | December 31, 2025 | |||||||
| (Unaudited) | (Audited) | |||||||
| Third party borrowing | $ | $ | ||||||
On February 7, 2026, the Group entered into a loan agreement with Silkroad Industrial Ltd (“SIL”), a third-party lender. Under the agreement, SIL agreed to lend to the Group an amount equal to
The
17. Convertible Debts
On August 15, 2025, the Company entered into agreements with certain investors to issue convertible debts with an aggregate principal amount of $
The holders may convert the convertible debts into the Company’s ordinary shares at an initial conversion price of $
The Company concluded that bifurcation of the embedded features was not required. Accordingly, the convertible debts are accounted for wholly as debt and is subsequently measured at amortized cost using the effective interest method.
As of June 30, 2026 and December 31, 2025, the fair value of the convertible debts was:
| Fair value hierarchy | Valuation method | Fair value as of June 30, 2026 | Fair value as of December 31, 2025 | |||||||||
| Fair value of convertible debts | Level 3 | $ | $ | |||||||||
For the six months ended June 30, 2026, the interest expense related to the convertible debts were $
F-34
AsiaStrategy
Notes to Unaudited Condensed Consolidated Financial Statements
18. Shareholders’ Equity
Ordinary shares
The Company was established under the laws of Cayman Islands on June 27, 2024. The authorized number of ordinary shares was
The issuance of these shares is considered as a part of the reorganization of the Company, and is retroactively applied as if the transaction occurred at the beginning of the period presented.
On September 16, 2024, two investors, Mr. Kelven Wong and Mr. Ngai Ming Yuk, separately entered into a private placement subscription agreement and a registration rights agreement with the Company. Under these agreements, Mr. Kelven Wong and Mr. Ngai Ming Yuk subscribed for
On November 20, 2024, the Company effected a
On April 1, 2025, the Company entered into an underwriting agreement with Dominari Securities LLC, as representative of the underwriters named therein (the “Underwriters”), pursuant to which the Company agreed to sell, in a firm commitment underwritten public offering (the “Offering”), an aggregate of
On April 2, 2025, the Company’s Ordinary Shares commenced trading on the Nasdaq Capital Market under the trading symbol “TOPW.” On April 3, 2025, the Company closed the Offering of
Upon the completion of IPO of the Company, IPO costs capitalized as of December 31, 2024 amounted to $
As of June 30, 2026 and December 31, 2025, a total of
19. Income Taxes
Upon adoption of ASU 2023-09 on January 1, 2025, below disclosure and presentation have been retrospectively amended.
Cayman Islands and British Virgin Islands (“BVI”)
Under the current and applicable laws of Cayman Islands and British Virgin Islands, the Company, Grand Moon, AsiaStrategy BVI, and Top Asia, are not subject to tax on income or capital gains under these jurisdictions.
F-35
AsiaStrategy
Notes to Unaudited Condensed Consolidated Financial Statements
19. Income Taxes (cont.)
Hong Kong
Top Win Hong Kong and AsiaStrategy Topwin are incorporated in Hong Kong and are subject to Hong Kong Profits Tax on the taxable income as reported in their respective statutory financial statements adjusted in accordance with relevant Hong Kong tax laws. For the six months ended June 30, 2026, 2025 and 2024, Hong Kong Profits Tax is calculated in accordance with the two-tiered profits tax rates regime. The applicable income tax rate for the first HK$
Singapore
AsiaStrategy SG is subject to Singapore Profits Tax on the taxable income as reported in its statutory financial statements adjusted in accordance with relevant Singapore tax laws. The applicable corporate income tax rate is
The current and deferred portions of the income tax expense included in the unaudited condensed consolidated statements of operations and comprehensive loss as determined in accordance with ASC 740 are as follows:
| For the Six Months Ended June 30, | ||||||||||||
| 2026 | 2025 | 2024 | ||||||||||
| Current income tax benefits | ||||||||||||
| Hong Kong | $ | $ | $ | |||||||||
| Foreign | ||||||||||||
| Deferred income tax benefits | ||||||||||||
| Hong Kong | ||||||||||||
| Foreign | ||||||||||||
| Total income tax benefits | $ | $ | $ | |||||||||
A reconciliation of the difference between the expected income tax expenses computed at Hong Kong income tax rate of
| For the six months ended June 30, | ||||||||||||
| 2026 | 2025 | 2024 | ||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||
| Loss before income taxes | $ | $ | $ | |||||||||
| Income tax benefits at foreign taxes | ||||||||||||
| Hong Kong statutory income tax rate | % | % | % | |||||||||
| Computed income tax benefit with Hong Kong statutory income tax rate | $ | $ | $ | |||||||||
| Tax effects by locations: | ||||||||||||
| Hong Kong | ||||||||||||
| Non-taxable income | ||||||||||||
| Non-deductible expenses | ( | ) | ||||||||||
| Singapore | ||||||||||||
| Non-deductible expenses(2) | ( | ) | ||||||||||
| Cayman Islands | ||||||||||||
| Non-taxable income(1) | ||||||||||||
| Non-deductible expenses(2) | ( | ) | ( | ) | ||||||||
| BVI | ||||||||||||
| Non-deductible expenses | ( | ) | ||||||||||
| Changes in valuation allowance | ( | ) | ||||||||||
| Income tax benefits | $ | $ | $ | |||||||||
F-36
AsiaStrategy
Notes to Unaudited Condensed Consolidated Financial Statements
19. Income Taxes (cont.)
| (1) | Non-taxable income for the six months ended June 30, 2026 mainly represented unrealized gains on investment in equity securities, resulting from investment in ASP LLC. |
| (2) | Non-deductible expenses for the six months ended June 30, 2026 primarily represented (i) unrealized losses on digital assets; (ii) unrealized losses on investment in equity securities, resulting from investment in DV8 Public Company Limited; and (iii) the professional fees and other expenses incurred by entities.
Non-deductible expenses for the six months ended June 30, 2025 mainly represented expenses incurred by the Company. Since the Company is a holding company with no operations, the expenses were not allowed to be carried forward and set off profits in subsequent periods according to Hong Kong tax laws. |
The following table reconciles the statutory tax rate to the Group’s effective tax rate for the six months ended June 30, 2026, 2025 and 2024:
| For the six months ended June 30, | ||||||||||||
| 2026 | 2025 | 2024 | ||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||
| Foreign taxes rate | % | % | % | |||||||||
| Hong Kong statutory income tax rate | % | % | % | |||||||||
| Tax effects by locations: | ||||||||||||
| Hong Kong | ||||||||||||
| Non-taxable income | % | |||||||||||
| Non-deductible expenses | ||||||||||||
| Singapore | ||||||||||||
| Non-deductible expenses | ( | )% | ||||||||||
| Cayman Islands | ||||||||||||
| Non-taxable income | % | |||||||||||
| Non-deductible expenses | ( | )% | ( | )% | ||||||||
| BVI | ||||||||||||
| Non-deductible expenses | ( | )% | ||||||||||
| Changes in valuation allowance | ( | )% | ||||||||||
| Income tax benefits | % | % | ||||||||||
Deferred tax
The Group measures deferred tax assets and liabilities based on the difference between the financial statement and tax bases of assets and liabilities at the applicable tax rates.
| As of | ||||||||
| June 30, 2026 | December 31, 2025 | |||||||
| (Unaudited) | (Audited) | |||||||
| Deferred tax assets: | ||||||||
| Allowance for credit loss | $ | $ | ||||||
| Depreciation of property and equipment | ||||||||
| Write-downs of inventories | ||||||||
| Net operating losses carry forwards* | ||||||||
| Total deferred tax assets | $ | $ | ||||||
| Less: deferred tax assets valuation allowance | ( | ) | ( | ) | ||||
| Total deferred tax assets, net | ||||||||
| * | The net operating losses carry forwards of the entity in Hong Kong are $ |
F-37
AsiaStrategy
Notes to Unaudited Condensed Consolidated Financial Statements
19. Income Taxes (cont.)
Movement of the Group’s deferred tax assets during the years is as follows:
| As of | ||||||||
| June 30, 2026 | December 31, 2025 | |||||||
| (Unaudited) | (Audited) | |||||||
| Beginning balance | $ | $ | ||||||
| Deferred income tax benefit recognized during the period/year | ||||||||
| Deferred tax assets valuation allowance | ( | ) | ( | ) | ||||
| Exchange rate differences | ( | ) | ||||||
| Ending balance | $ | $ | ||||||
Uncertain tax positions
The Group evaluates each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measures the unrecognized benefits associated with the tax positions. As of June 30, 2026 and December 31, 2025, the Group did not have any significant unrecognized uncertain tax positions and the Group does not believe that its unrecognized tax benefits will change over the next twelve months. For the six months ended June 30, 2026, 2025 and 2024, the Group did not have any significant interest or penalties related to potential underpaid income tax expenses. The Group’s 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
20. Related Party Transactions and Balances
a. Nature of relationships with related parties
| Name | Relationship with the Group | |
| New Harvest Investment Holdings Limited | ||
| Mr. Sit Hon | ||
| Sora Venture Global Limited (formerly known as Pride River Limited) | ||
| SORA Ventures | ||
| Asia Strategy Partners LLC (“ASP LLC”) |
b. Transactions with related parties
| For the six months ended June 30, | ||||||||||||||
| Name | Nature | 2026 | 2025 | 2024 | ||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||
| New Harvest Investment Holdings Limited(1) | premise | $ | $ | $ | ||||||||||
| Mr. Sit Hon(2) | policies | |||||||||||||
| ASP LLC (3) | ||||||||||||||
F-38
AsiaStrategy
Notes to Unaudited Condensed Consolidated Financial Statements
20. Related Party Transactions and Balances (con.)
| (1) |
| (2) |
| (3) |
c. Balances with related parties
| As of | ||||||||||
| Name | Nature | June 30, 2026 | December 31, 2025 | |||||||
| (Unaudited) | (Audited) | |||||||||
| Sora Venture Global Limited (formerly known as Pride River Limited)(4) | $ | $ | ||||||||
| ASP LLC (5) | ||||||||||
| (4) |
| (5) |
21. Commitments and Contingencies
Commitments
The Group’s contractual obligations relating to bank borrowings, third party borrowing and convertible debts as of June 30, 2026 have been fully recognized as liabilities and disclosed in Notes 15, 16 and 17. Accordingly, the Group has no material unrecognized financial or capital commitments as of the reporting date.
Contingencies
As of June 30, 2026 and December 31, 2025, the Group was not a party to any legal or administrative proceedings, and there were no legal or regulatory proceedings, either individually or in the aggregate, that could reasonably foreseeably result or could have resulted in an unfavorable outcome with a material adverse effect on the Group’s results of operations, consolidated financial condition, or cash flows.
F-39
AsiaStrategy
Notes to Unaudited Condensed Consolidated Financial Statements
22. Segment Information
The Group has
The following table presents selected financial information for the Group’s single reportable segment:
| For the Six Months Ended June 30, | ||||||||||||
| 2026 | 2025 | 2024 | ||||||||||
| Revenue | $ | $ | $ | |||||||||
| Cost of revenue | ( | ) | ( | ) | ( | ) | ||||||
| Selling and marketing expenses | ( | ) | ( | ) | ( | ) | ||||||
| General and administrative expenses | ( | ) | ( | ) | ( | ) | ||||||
| Unrealized losses on digital assets | ( | ) | ||||||||||
| Unrealized gains on investment in equity securities, net | ||||||||||||
| Other segment items | ( | ) | ( | ) | ( | ) | ||||||
| Net loss of single operating segment | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
The measure of segment assets is total consolidated assets as reported in the unaudited condensed consolidated balance sheets. Total segment assets were $
23. Subsequent Events
On August 12, 2026, the Group entered into a non-binding memorandum of understanding with SORA Ventures and Kimber Labs Inc. (“Plume”) to explore the formation of a joint venture to develop and operate digital asset projects and share revenues. The memorandum is non-binding, and the joint venture remains subject to definitive documentation, internal approvals and regulatory requirements. As at the date of this Form 6-K, the Group is unable to reasonably estimate the financial impact of this matter.
On August 15, 2026, the Group entered into two separate share purchase agreements to dispose of its entire equity interest in AsiaStrategy SG. Under the first agreement, the Group agreed to sell
As of August 24, 2026, the net asset value of AsiaStrategy SG was approximately $
The concurrent disposal of the remaining
The Group evaluated all events and transactions that occurred after June 30, 2026, other than the event disclosed above and elsewhere in these unaudited condensed consolidated financial statements, there is no other subsequent event occurred that would require recognition or disclosure in the Group’s unaudited condensed consolidated financial statements.
F-40
Exhibit 99.2
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and the related notes included elsewhere in this Form 6-K. For additional information relating to our management’s discussion and analysis of the financial condition and results of operations, please see our Annual Report on Form 20-F, which includes the consolidated audited financial statements for the year ended December 31, 2025 filed with the Securities and Exchange Commission (the “SEC”) on April 30, 2026. This discussion and analysis and other parts of this Form 6-K contain forward-looking statements reflecting our current expectations that involve risks, uncertainties and assumptions. Actual results and the timing of events could differ materially from those discussed in our forward-looking statements as a result of many factors, including those discussed below and identified elsewhere in this Report on Form 6-K, and those listed in the “Risk Factors” section in our SEC filings. Additionally, our historical results are not necessarily indicative of the results that may be expected for any period in the future.
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 Hong Kong, South America, Europe and Singapore 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. We have expanded into the Web3 ecosystem, with digital assets becoming an additional focus of our future business development. As of June 30, 2026, we held digital assets with a value of US$2.2 million and recognized unrealized losses on digital assets of US$0.9 million and net realized gains on digital assets of US$0.1 million for the six months ended June 30, 2026. We actively monitor our exposure to volatility in the cryptocurrency market.
Our revenue was US$6.1 million, US$4.4 million and US$7.9 million for the six months ended June 30, 2026, 2025, and 2024, respectively. We recorded a net loss of US$0.6 million, US$0.6 million and US$0.2 million for the six months ended June 30, 2026, 2025 and 2024, respectively. Our growth strategy includes strengthening our market share in existing markets, increasing our market presence through expansion into new geographical markets, diversifying our supply network, broadening our product range to include additional luxury brands and other categories. Furthermore, we intend to create new income streams by expanding into the Web3 ecosystem. While pursuing these opportunities, we remain committed to actively monitoring and managing our exposure to the market volatility to ensure long-term value creation.
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. Furthermore, as we expand into the Web3 ecosystem, our financial performance is increasingly affected by volatility in the digital asset and securities markets and the evolving regulatory environment for digital assets. Our profits are mainly determined by several key factors, including annual sales, gross profit margin, operating cost structure, financing expenses, and changes in the fair value of our digital assets and investment securities.
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 third-party lender and banks, as well as through the issuance of convertible debts. Interest rates on our convertible debts and borrowings from third-party lender are fixed, whereas our bank borrowings carry floating rates and are therefore subject to interest rate risk. As our business continues to expand, and in the absence of more favorable alternative financing channels, we anticipate that we may need to incur additional bank borrowings in the future. Accordingly, fluctuations in interest rates could increase our borrowing costs and have a material adverse effect on our results of operations and financial condition.
Fluctuations in exchange rates
Our Hong Kong entities conduct their operating activities primarily in Hong Kong Dollars (“HK$”), which is also their functional currency, while certain of our entities incorporated in the Cayman Islands, the British Virgin Islands and Singapore have the United States Dollar (“USD”) as their functional currency. Foreign exchange risk arises from our watch purchases. We buy watches from distributors located in Hong Kong, South America, Europe and Singapore, in each case in the currency specified by the vendor, 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.
Apart from our watch trading business, we hold digital assets and investment in equity securities, through the Company and our overseas subsidiaries. Some of these investments and assets are denominated in foreign currencies other than our reporting currency, the USD. Any fluctuations in exchange rates may affect the carrying values of these assets, which could adversely impact our financial position and results of operations.
The volatility of digital asset and securities markets
Since 2025, we have invested in digital assets and equity securities related to the digital assets treasury sector. These investments are measured at fair value, and their valuation is significantly influenced by market conditions in the digital assets treasury sector, as well as the operational performance of these listed companies. Consequently, our operating results may experience significant volatility due to fluctuations in the prices of digital assets and our equity securities. We expect this market volatility to persist in future periods, which may introduce uncertainty into our financial results.
2
The evolving regulatory environment for digital assets
As we expand into the Web3 ecosystem, our results of operations may be affected by the evolving legal and regulatory frameworks governing digital assets in Hong Kong and other international jurisdictions. Changes in tax laws, anti-money laundering regulations, or specific digital asset licensing requirements could increase our compliance costs or limit our ability to hold or trade certain digital assets, which may in turn affect our financial position and growth strategy.
Impact of Russia’s Invasion of Ukraine, Israel-Hamas War, Israel-Iran 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 October 7, 2023. In 2026, tensions between Israel and Iran escalated into another direct military conflict. Israel, United States, and Iran commenced a series of attacks and counterattacks. 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; (ii) our strategic investments in equity securities and digital assets are held by the Company and its subsidiaries in stable jurisdictions such as Singapore and the Cayman Islands; (iii) our watch trading industry has been less dependent on oil, natural resources or global supply chain which have been disrupted by these military actions; and (iv) we actively monitor our investment portfolio to manage exposure to market volatility, 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 six months ended June 30, 2026, 2025 and 2024, our total revenue was US$6.1 million, US$4.4 million and US$7.9 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 six months ended June 30, 2026, 2025 and 2024, cost of revenue represented approximately 97.7%, 96.0% and 93.2% of our revenue, respectively.
3
We buy watches from vendors located in Hong Kong, South America, Europe and Singapore. The following table sets forth a breakdown of our purchases from vendors by country for the six months ended June 30, 2026, 2025, and 2024.
| For the six months ended June 30, | ||||||||||||
| 2026 | 2025 | 2024 | ||||||||||
| Hong Kong | 25.9 | % | 59.1 | % | 79.2 | % | ||||||
| Croatia | 23.6 | % | 2.1 | % | — | % | ||||||
| Argentina | 19.3 | % | 18.3 | % | — | % | ||||||
| Switzerland | 18.8 | % | 1.9 | % | 6.8 | % | ||||||
| Uruguay | 10.0 | % | — | % | — | % | ||||||
| Colombia | 2.3 | % | 13.6 | % | — | % | ||||||
| Singapore | 0.1 | % | 3.1 | % | 13.3 | % | ||||||
| Italy | — | % | 1.9 | % | 0.7 | % | ||||||
| 100 | % | 100 | % | 100 | % | |||||||
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 0.9%, 0.9% and 0.4% of our total revenue for the six months ended June 30, 2026, 2025 and 2024, 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 fees 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 17.4%, 15.0% and 7.9% of our total revenue for the six months ended June 30, 2026, 2025 and 2024, respectively.
Other income (expense), net
The following table sets forth our other income (expense), net, both in absolute amount and as a percentage of total revenue, for the six months ended June 30, 2026, 2025 and 2024:
| For the six months ended June 30, | ||||||||||||||||||||||||
| 2026 | 2025 | Variances | ||||||||||||||||||||||
| US$ | % of total revenue |
US$ | % of total revenue |
US$ | % | |||||||||||||||||||
| Other income (expense) | ||||||||||||||||||||||||
| Interest expense | (241,278 | ) | 3.9 | (117,354 | ) | 2.7 | 123,924 | 105.6 | ||||||||||||||||
| Interest income | 60,919 | 1.0 | 24,245 | 0.5 | 36,674 | 151.3 | ||||||||||||||||||
| Unrealized losses on digital assets | (867,554 | ) | 14.2 | — | — | 867,554 | 100.0 | |||||||||||||||||
| Unrealized gains on investment in equity securities, net | 1,263,002 | 20.6 | — | — | 1,263,002 | 100.0 | ||||||||||||||||||
| Sundry income (expense), net | 114,367 | 1.9 | (1,667 | ) | — | 116,034 | 6,960.6 | |||||||||||||||||
| Total other income (expense), net | 329,456 | 5.4 | (94,776 | ) | 2.2 | 424,232 | 447.6 | |||||||||||||||||
4
| For the six months ended June 30, | ||||||||||||||||||||||||
| 2025 | 2024 | Variances | ||||||||||||||||||||||
| US$ | % of total revenue |
US$ | % of total revenue |
US$ | % | |||||||||||||||||||
| Other income (expense) | ||||||||||||||||||||||||
| Interest expense | (117,354 | ) | 2.7 | (144,234 | ) | 1.8 | (26,880 | ) | (18.6 | ) | ||||||||||||||
| Interest income | 24,245 | 0.5 | 1,442 | — | 22,803 | 1,581.3 | ||||||||||||||||||
| Sundry income (expense), net | (1,667 | ) | — | 3 | — | (1,670 | ) | (55,666.7 | ) | |||||||||||||||
| Total other income (expense), net | (94,776 | ) | 2.2 | (142,789 | ) | 1.8 | (48,013 | ) | (33.6 | ) | ||||||||||||||
Our interest expense primarily consists of interest incurred on bank borrowings, including revolving trade finance and installment loan facilities, interest on third party borrowings, as well as interest on convertible debts. Interest rates for these bank borrowings are determined by a premium over a benchmark interest rate, whereas interest rate for third party borrowings is fixed at 1.25% per annum and the interest rate for convertible debts is fixed at 3% per annum. Interest expense accounted for 3.9%, 2.7% and 1.8% of our total revenue for the six months ended June 30, 2026, 2025 and 2024, respectively.
Interest income represents (i) interest earned on our cash deposits held in banks; (ii) interest income on the US$1.5 million of our loans receivable that bear interest at an annual rate of 8%; and (iii) interest income of US$1,715 on a USDT loan advanced to a third party, received in the form of digital assets. The remaining balance of our loans receivable, comprising an unsecured revolving loan facility made available to a third party, is interest-free. Interest income accounted for 1.0%, 0.5%, and nil% of our total revenue for the six months ended June 30, 2026, 2025 and 2024, respectively.
In September 2025, we purchased digital assets consisting of Bitcoin (BTC) and Tether USD (USDT) for investment and treasury diversification purposes. During the six months ended June 30, 2026, we purchased additional USDT for investment and treasury diversification purposes, received USDT from a third party borrowing, and received BTC, XRP and USDT upon enforcement of collateral, and USD Coin (USDC) as interest, under a USDT loan advanced to a third party. The digital assets are remeasured at fair value, and the changes of fair value would be recognized in unrealized losses on digital assets in the unaudited condensed consolidated statement of operations and comprehensive loss. Unrealized losses on digital assets accounted for 14.2%, nil%, and nil% of our total revenue for the six months ended June 30, 2026, 2025 and 2024, respectively.
Unrealized gains on investment in equity securities, net refer to the fair value change of investment in equity securities. In August 2025, we invested in DV8 Public Company Limited (“DV8”) and made a portfolio investment managed by Asia Strategy Partners LLC (“ASP LLC”). The investment in equity securities is remeasured at fair value, and the changes of fair value would be recognized in unrealized gains on investment in equity securities, net in the unaudited condensed consolidated statement of operations and comprehensive loss. Unrealized gains on investment in equity securities, net accounted for 20.6%, nil%, and nil% of our total revenue for the six months ended June 30, 2026, 2025 and 2024, respectively.
Sundry income, net was US$114,367 and US$3 for the six months ended June 30, 2026 and 2024, respectively, and sundry expense, net was US$1,667 for the six months ended June 30, 2025. Sundry income, net for the six months ended June 30, 2026 was primarily attributable to net realized gains on digital assets of US$105,767, arising mainly from the conversion of XRP into USDT, and a gain on loan settlement of US$8,869. Sundry expense, net for the six months ended June 30, 2025 was primarily due to a donation made to National Taiwan University in support of its MBA program.
Income tax benefits
We operate principally in Hong Kong and are subject to Hong Kong Profits Tax. Our Singapore subsidiary is subject to Singapore corporate income tax at a rate of 17%, and our entities incorporated in the Cayman Islands and the British Virgin Islands are not subject to income tax in those jurisdictions. Under the two-tiered profits tax rates regime, the first HK$2 million (approximately US$0.3 million) 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$0.3 million) are charged at the profits tax rate of 16.5%. For the six months ended June 30, 2026, 2025 and 2024, income tax benefits accounted for nil%, 1.2% and 0.5% of our total revenue, respectively.
5
We did not have any significant unrecognized uncertain tax positions, and we did not incur any interest and penalties related to potential underpaid income taxes for the six months ended June 30, 2026, 2025 and 2024. Our major tax jurisdiction is Hong Kong. Under relevant Hong Kong tax laws, a tax case is normally subject to investigation by the tax authority for up to 6 years of assessment prior to the current year of assessment. In the case of fraud or wilful evasion, the investigation may be extended to cover 10 years of assessment.
Results of Operations
Comparison of six months ended June 30, 2026 and 2025
The following table sets forth a summary of our unaudited condensed consolidated results of operations for the six months ended June 30, 2026 and 2025 as indicated. The operating results in any year are not necessarily indicative of the results that may be expected for any future trends.
| For the six months ended June 30, | ||||||||||||||||||||||||
| 2026 | 2025 | Variances | ||||||||||||||||||||||
| US$ | % of total revenue |
US$ | % of total revenue |
US$ | % | |||||||||||||||||||
| Revenue | 6,122,827 | 100.0 | 4,387,569 | 100.0 | 1,735,258 | 39.5 | ||||||||||||||||||
| Cost of revenue | (5,982,436 | ) | 97.7 | (4,212,332 | ) | 96.0 | 1,770,104 | 42.0 | ||||||||||||||||
| Gross profit | 140,391 | 2.3 | 175,237 | 4.0 | (34,846 | ) | (19.9 | ) | ||||||||||||||||
| Operating expenses | ||||||||||||||||||||||||
| Selling and marketing | (54,776 | ) | 0.9 | (38,863 | ) | 0.9 | 15,913 | 40.9 | ||||||||||||||||
| General and administrative | (1,063,769 | ) | 17.4 | (658,888 | ) | 15.0 | 404,881 | 61.4 | ||||||||||||||||
| Total operating expenses | (1,118,545 | ) | 18.3 | (697,751 | ) | 15.9 | 420,794 | 60.3 | ||||||||||||||||
| Loss from operations | (978,154 | ) | 16.0 | (522,514 | ) | 11.9 | 455,640 | 87.2 | ||||||||||||||||
| Other income (expense) | ||||||||||||||||||||||||
| Interest expense | (241,278 | ) | 3.9 | (117,354 | ) | 2.7 | 123,924 | 105.6 | ||||||||||||||||
| Interest income | 60,919 | 1.0 | 24,245 | 0.5 | 36,674 | 151.3 | ||||||||||||||||||
| Unrealized losses on digital assets | (867,554 | ) | 14.2 | — | — | 867,554 | 100.0 | |||||||||||||||||
| Unrealized gains on investment in equity securities, net | 1,263,002 | 20.6 | — | — | 1,263,002 | 100.0 | ||||||||||||||||||
| Sundry income (expense), net | 114,367 | 1.9 | (1,667 | ) | — | 116,034 | 6,960.6 | |||||||||||||||||
| Total other income (expense), net | 329,456 | 5.4 | (94,776 | ) | 2.2 | 424,232 | 447.6 | |||||||||||||||||
| Loss before income taxes | (648,698 | ) | 10.6 | (617,290 | ) | 14.1 | 31,408 | 5.1 | ||||||||||||||||
| Income tax benefits | — | — | 54,143 | 1.2 | (54,143 | ) | (100.0 | ) | ||||||||||||||||
| Net loss | (648,698 | ) | 10.6 | (563,147 | ) | 12.9 | 85,551 | 15.2 | ||||||||||||||||
Revenue
Total revenue increased by 39.5% from US$4.4 million for the six months ended June 30, 2025 to US$6.1 million for the six months ended June 30, 2026.
The increase in revenue was primarily driven by a 10% increase in sales volume and a 27% increase in the average unit price of our products. Following a challenging 2025, the first half of 2026 has demonstrated an improvement of market conditions. 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 rose by 7.8% during the six months ended June 30, 2026, compared with the same period in 2025. This rebound reflects an improving economic environment, underpinned by rising local incomes and steady growth in inbound tourism. These factors have strengthened consumer confidence and spending, prompting our customers—primarily distributors and retailers—to ease inventory caution and place larger orders with us.
6
The increase in average unit price was primarily driven by shifts in the product sales mix during the period. Sales volumes in the mid-to-high-end segment (unit price above US$2,000) rose from 588 units, representing 32% of total sales volumes in the six months ended June 30, 2025, to 781 units, accounting for 39% of total sales volumes in the same period of 2026. In addition, we sold five collector-grade timepieces (unit price above US$100,000) during the current period, compared with none in the six months ended June 30, 2025.
Cost of revenue
The cost of revenue increased by approximately US$1.8 million, or 42.0%, from approximately US$4.2 million for the six months ended June 30, 2025, to US$6.0 million for the six months ended June 30, 2026. This increase was attributable to higher watch sales during the period, as well as the material purchase costs associated with collector-grade timepieces.
Gross profit
Our gross profit decreased by US$34,846 or 19.9%, from approximately US$175,237 for the six months ended June 30, 2025 to approximately US$140,391 for the six months ended June 30, 2026. The total gross profit margin for the six months ended June 30, 2026, was approximately 2.3%, compared to approximately 4.0% for the six months ended June 30, 2025.
For the six months ended June 30, 2026 and 2025, approximately 83% and 55% of our watch purchase were settled in Swiss Franc (“CHF”), respectively. The appreciation of the average CHF/HKD exchange rate from 9.06 for the six months ended June 30, 2025 to 9.95 for the six months ended June 30, 2026 led to an increase in purchase costs settled in CHF. As a result, the increase in purchase costs more than offset the benefit from the higher average selling price, resulting in a decrease in gross profit margin during the six months ended June 30, 2026.
Operating expenses
Selling and marketing expenses increased to US$54,776 for the six months ended June 30, 2026, from US$38,863 for the six months ended June 30, 2025. The increase was primarily attributable to an increase of US$15,848 in sales team staff costs, driven by the onboarding of a new sales employee in April 2025. As a result, the employee’s salary was recognized for only three months during the six months ended June 30, 2025, whereas a full six-month salary expense was recognized in the six months ended June 30, 2026.
General and administrative expenses increased by US$0.4 million to US$1.1 million for the six months ended June 30, 2026, compared to US$0.7 million for the six months ended June 30, 2025. The increase was primarily due to (i) an increase in professional fees of US$0.4 million for audit fee, investor relations and internal control advisory services; (ii) an increase in rental expense of US$76,523 resulting from a monthly rent increase implemented by the landlord effective August 2025; which was partially offset by (iii) a decrease in expected credit loss of US$43,276 related to the loans receivables as of June 30, 2026; and (iv) a decrease in staff costs of US$36,286, due to the departure of an administrative staff in March 2025. The employee’s salary was recorded for only three months during the six months ended June 30, 2025, whereas no corresponding salary expense was recognized in the six months ended June 30, 2026.
Other income (expense), net
Other income improved significantly, shifting from a net other expense of US$0.1 million for the six months ended June 30, 2025 to a net other income of US$0.3 million for the six months ended June 30, 2026. It was mainly due to (i) net unrealized gains on investment in equity securities of US$1.3 million, resulting from the gains from the investment in the Asia Strategy Partners LLC portfolio, partially offset by an unrealized loss of DV8 Public Company Limited during the six months ended June 30, 2026; (ii) an increase of sundry income, net by US$0.1 million mainly due to the net realized investment income in trading digital assets during the six months ended June 30, 2026; (iii) an increase of interest income of US$36,674, derived from the recognition of a full six-months of interest income related to the US$1.5 million loan provided to third parties in April 2025. The increase was partially offset by (iv) the unrealized losses on digital asset of US$0.9 million, arising from the decrease in fair value of the BTC and USDT held as of June 30, 2026; and (v) an increase of interest expense of US$0.1 million, mainly due to the interest expense related to the convertible debts issued in October 2025.
7
Loss before income taxes
We had a loss before income taxes of US$648,698 and US$617,290 for the six months ended June 30, 2026 and 2025, respectively. The increase in loss before income taxes was primarily driven by an increase in operating expenses of US$420,794 and a decrease in gross profit of US$34,846, substantially offset by the change from a net other expense of US$94,776 to a net other income of US$329,456.
Income tax benefits
Income tax benefit was nil and US$54,143 for the six months ended June 30, 2026 and 2025, respectively. Because we incurred losses in both periods, income tax is presented as a net tax benefit, and our effective tax rate is calculated as the income tax benefit divided by loss before income tax. On this basis, our effective tax rate was 0.0% for the six months ended June 30, 2026 and 8.8% for the six months ended June 30, 2025.
During the six months ended June 30, 2026, we recognized US$1.9 million in non-taxable income, primarily representing unrealized gains on equity securities arising from our investment in ASP LLC. In the same period, we incurred US$2.2 million in non-deductible expenses, consisting mainly of (i) unrealized losses on digital assets, (ii) unrealized losses on our investment in DV8; and (iii) professional fees and other expenses incurred by foreign entities that could not be carried forward to offset profits in subsequent periods. Furthermore, as of June 30, 2026, we recorded a full valuation allowance of US$331,449 against our total deferred tax assets because we did not expect to generate sufficient future taxable profits to utilize those deferred tax assets. Our Hong Kong net operating losses available for carry forward amounted to US$880,735 as of June 30, 2026 and may be carried forward without expiry. As a result, our effective tax rate was nil for the six months ended June 30, 2026.
Net loss
As a result of the foregoing factors, net loss increased by US$85,551, or 15.2%, from US$563,147 for the six months ended June 30, 2025 to US$648,698 for the six months ended June 30, 2026.
Comparison of six months ended June 30, 2025 and 2024
The following table sets forth a summary of our unaudited condensed consolidated results of operations for the six months ended June 30, 2025 and 2024 as indicated. The operating results in any year are not necessarily indicative of the results that may be expected for any future trends.
| For the six months ended June 30, | ||||||||||||||||||||||||
| 2025 | 2024 | Variances | ||||||||||||||||||||||
| US$ | % of total revenue |
US$ | % of total revenue |
US$ | % | |||||||||||||||||||
| Revenue | 4,387,569 | 100.0 | 7,925,428 | 100.0 | (3,537,859 | ) | (44.6 | ) | ||||||||||||||||
| Cost of revenue | (4,212,332 | ) | 96.0 | (7,384,144 | ) | 93.2 | (3,171,812 | ) | (43.0 | ) | ||||||||||||||
| Gross profit | 175,237 | 4.0 | 541,284 | 6.8 | (366,047 | ) | (67.6 | ) | ||||||||||||||||
| Operating expenses | ||||||||||||||||||||||||
| Selling and marketing | (38,863 | ) | 0.9 | (33,445 | ) | 0.4 | 5,418 | 16.2 | ||||||||||||||||
| General and administrative | (658,888 | ) | 15.0 | (626,536 | ) | 7.9 | 32,352 | 5.2 | ||||||||||||||||
| Total operating expenses | (697,751 | ) | 15.9 | (659,981 | ) | 8.3 | 37,770 | 5.7 | ||||||||||||||||
| Loss from operations | (522,514 | ) | 11.9 | (118,697 | ) | 1.5 | 403,817 | 340.2 | ||||||||||||||||
| Other income (expense) | ||||||||||||||||||||||||
| Interest expense | (117,354 | ) | 2.7 | (144,234 | ) | 1.8 | (26,880 | ) | (18.6 | ) | ||||||||||||||
| Interest income | 24,245 | 0.5 | 1,442 | — | 22,803 | 1,581.3 | ||||||||||||||||||
| Sundry income (expense), net | (1,667 | ) | — | 3 | — | (1,670 | ) | (55,666.7 | ) | |||||||||||||||
| Total other income (expense), net | (94,776 | ) | 2.2 | (142,789 | ) | 1.8 | (48,013 | ) | (33.6 | ) | ||||||||||||||
| Loss before income taxes | (617,290 | ) | 14.1 | (261,486 | ) | 3.3 | 355,804 | 136.1 | ||||||||||||||||
| Income tax benefits | 54,143 | 1.2 | 43,363 | 0.5 | 10,780 | 24.9 | ||||||||||||||||||
| Net loss | (563,147 | ) | 12.9 | (218,123 | ) | 2.8 | 345,024 | 158.2 | ||||||||||||||||
8
Revenue
Total revenue decreased by 44.6% from US$7.9 million for the six months ended June 30, 2024 to US$4.4 million for the six months ended June 30, 2025.
The decrease in revenue was primarily driven by a 5% reduction in sales volume and a 42% decrease 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 9.6% during the six months ended June 30, 2025, compared to the six months ended June 30, 2024. This downturn caused our customers, primarily distributors and retail sellers, to become more cautious in maintaining their stock levels, resulting in reduced purchases from us.
The decline in the average unit price is primarily attributable to adjustments in the product sales mix this year. The sales volume of lower-priced watches (those with a unit price of less than US$1,280 per piece) increased by 608 units, and their share of total sales volume rose from 10% for the six months ended June 30, 2024 to 44% for the six months ended June 30, 2025. Conversely, sales of other mid-range and high-end watches decreased during the current period.
Cost of revenue
The cost of revenue decreased by approximately US$3.2 million, or 43.0%, from approximately US$7.4 million for the six months ended June 30, 2024, to US$4.2 million for the six months ended June 30, 2025. This decrease was mainly due to the reduction in watch sales.
Gross profit
Our gross profit decreased by US$0.3 million or 67.6%, from approximately US$0.5 million for the six months ended June 30, 2024 to approximately US$0.2 million for the six months ended June 30, 2025. The total gross profit margin for the six months ended June 30, 2025, was approximately 4.0%, compared to approximately 6.8% for the six months ended June 30, 2024.
For the six months ended June 30, 2025 and 2024, around 55% and 39% of our watch purchase were settled in Swiss Franc (“CHF”), respectively. The appreciation of the average CHF/HKD exchange rate from 8.79 for the six months ended June 30, 2024 to 9.06 for the six months ended June 30, 2025 led to an increase in purchase costs. As a result, the gross profit ratio decreased during the six months ended June 30, 2025.
Operating expenses
Selling and marketing expenses increased to US$38,863 for the six months ended June 30, 2025, from US$33,445 for the six months ended June 30, 2024. The slight increase was primarily due to a US$4,128 rise in sales team staff costs. This increase was driven by higher salaries aimed at retaining talent during the six months ended June 30, 2025.
General and administrative expenses increased by US$32,352 to US$658,888 for the six months ended June 30, 2025, compared to US$626,536 for the six months ended June 30, 2024. The increase was primarily due to (i) an increase in professional fees of US$56,693 for investor relations and internal control advisory services; (ii) an increase in expected credit loss of US$52,007 related to loans receivable; (iii) an increase in staff costs of US$44,464, resulting from remuneration paid to independent directors and general salary adjustments to retain talented staff; which was partially offset by (iv) a decrease in audit fees paid to our US auditor of approximately US$0.1 million.
Other income (expense), net
Other expenses decreased by US$48,013 from US$142,789 for the six months ended June 30, 2024 to US$94,776 for the six months ended June 30, 2025. 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 benchmark interest rate decreased in the six months ended June 30, 2025, which led to a decrease in interest expense by US$26,880. Additionally, interest income increased by US$22,803, driven by the higher average cash balance for the six months ended June 30, 2025.
9
Loss before income taxes
We had a loss before income taxes of US$0.6 million and US$0.3 million for the six months ended June 30, 2025 and 2024, respectively. The change in loss before income taxes was primarily driven by a decrease in revenue and gross profit.
Income tax benefits
Income tax benefits were US$43,363 for the six months ended June 30, 2024 and US$54,143 for the six months ended June 30, 2025. The increase in income tax benefits largely reflected the increase in loss before income tax expense between the two periods.
Because we incurred losses in both periods, income tax is presented as a net tax benefit, and our effective tax rate is calculated as the income tax benefit divided by loss before income tax. On this basis, our effective tax rate decreased from 16.6% for the six months ended June 30, 2024 to 8.8% for the six months ended June 30, 2025. The decrease in the effective tax rate primarily resulted from an increase in non-deductible expenses incurred by our holding company, which reduced the amount of losses available to generate tax benefits and therefore reduced the tax benefit relative to the loss before income tax.
Net loss
As a result of the foregoing factors, net loss increased from US$0.2 million for the six months ended June 30, 2024 to US$0.6 million for the six months ended June 30, 2025.
Liquidity and Capital Resources
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.
We recorded net cash inflow in operating activities of US$0.1 million and US$1.0 million for the six months ended June 30, 2026 and 2024, respectively, and net cash outflow in operating activities of US$3.0 million for the six months ended June 30, 2025. Our net loss was US$0.6 million, US$0.6 million and US$0.2 million for the six months ended June 30, 2026, 2025 and 2024.
As of June 30, 2026, we had positive working capital of US$27.2 million, and US$1.3 million in cash and cash equivalents. As of December 31, 2025, we had positive working capital of US$27.2 million, and US$1.5 million in cash and cash equivalents. We believe that our current cash and cash equivalents will be sufficient to meet our cash needs for general corporate purposes for at least the next 12 months from the date on which these unaudited condensed consolidated financial statements are issued. If we experience an adverse operating environment or incur unanticipated capital expenditure requirements, or if we determine to accelerate our growth, then additional financing may be required. Such financing may include the use of additional debt or the sale of additional equity securities. Any financing which involves the sale of equity securities or instruments that are convertible into equity securities could result in immediate and possibly significant dilution to our existing shareholders.
Cash Flows
The following table sets forth a summary of our cash flows for the six months ended June 30, 2026, 2025 and 2024 as indicated.
| For the six months ended June 30, | ||||||||||||
| 2026 | 2025 | 2024 | ||||||||||
| US$ | US$ | US$ | ||||||||||
| Net cash provided by (used in) operating activities | 80,549 | (3,002,015 | ) | 1,049,118 | ||||||||
| Net cash provided by (used in) investing activities | 438,246 | (2,835,460 | ) | — | ||||||||
| Net cash (used in) provided by financing activities | (662,652 | ) | 8,863,668 | (510,033 | ) | |||||||
| Exchange rate changes on cash and cash equivalents | (6,474 | ) | (76,448 | ) | 1,242 | |||||||
| Net (decrease) increase in cash and cash equivalents, and restricted cash | (150,331 | ) | 2,949,745 | 540,327 | ||||||||
| Cash and cash equivalents, and restricted cash, beginning of the period | 1,464,381 | 3,020,683 | 1,497,894 | |||||||||
| Cash and cash equivalents, and restricted cash, end of the period | 1,314,050 | 5,970,428 | 2,038,221 | |||||||||
10
Operating activities
Net cash provided by operating activities for the six months ended June 30, 2026 was US$80,549, as compared to the net loss of US$0.6 million. The difference was primarily attributable to (i) a decrease of US$3.6 million in inventories, primarily reflecting higher sales volume in the six months ended June 30, 2026, which resulted in a lower ending inventory balance; (ii) non-cash adjustments of approximately US$0.3 million, largely consisting of US$0.9 million in unrealized losses on digital assets, US$0.6 million in operating expenses paid with digital assets, US$0.1 million in amortization of operating lease right-of-use asset and US$0.1 million in write-downs of inventories, partially offset by US$1.3 million in net unrealized gains on investment in equity securities and US$0.1 million net realized gains on digital assets. The inflow was partially offset by (iii) a decrease of US$2.7 million in accounts payable, primarily due to reduced procurement activity during the current period and the active settlement of the accounts payable balance outstanding during the six months ended June 30, 2026; (iv) an increase of US$0.3 million in deposits and other current assets, mainly driven by more trade deposits paid for securing the upcoming orders.
Net cash used in operating activities for the six months ended June 30, 2025 was US$3.0 million, as compared to the net loss of US$0.6 million. The difference was primarily attributable to (i) an increase of US$0.9 million in prepaid expenses, attributable to higher professional fees related to compliance and internal control advisory services during the period; (ii) an increase of US$0.4 million in deposits and other current assets due to the increase in trade deposits for securing the upcoming orders; and (iii) an increase of US$1.2 million in inventories due to lower sales volume in the six months ended June 30, 2025, which resulted in a higher ending inventory balance.
Net cash provided by operating activities for the six months ended June 30, 2024 was US$1.0 million, as compared to the net loss of US$0.2 million. The difference was primarily attributable to (i) a decrease of US$0.7 million in inventories because we intentionally reduced our inventory holdings, which was driven by our anticipation of a decrease in sales during the second half year of 2024 due to the overall economic downturn and the declining trend in consumer spending on luxury watches in Hong Kong; (ii) a decrease of US$0.5 million in deposits and other current assets, driven by less trade deposit paid for securing the upcoming orders; and (iii) a decrease of US$0.1 million in accounts receivable, mainly because we had less sales conducted near the period end June 30, 2024.
Investing activities
Net cash provided by investing activities for the six months ended June 30, 2026 was US$0.4 million. This was primarily due to (i) proceeds of US$0.6 million from the disposal of digital assets; partially offset by (ii) US$0.1 million invested in digital assets for investment and treasury diversification purposes; (iii) US$88,065 advances of loans receivable; and (iv) payment of US$262 for the purchase of property and equipment during the period.
Net cash used in investing activities for the six months ended June 30, 2025 was US$2.8 million. This reflected US$2.8 million advances of loans receivable and payment of US$4,800 for the purchase of property and equipment during the period.
11
Financing activities
Net cash used in financing activities for the six months ended June 30, 2026 was US$0.7 million. This was primarily due to net repayments of banking facilities of US$0.7 million for the six months ended June 30, 2026. In addition, in February 2026, we obtained a three-year third party borrowing of US$1.3 million, which was disbursed in USDT and is therefore presented as a non-cash financing activity.
Net cash provided by financing activities for the six months ended June 30, 2025 was US$8.9 million. This was primarily due to (i) US$9.3 million cash proceeds from the issuance of ordinary shares pursuant to IPO; which was offset by (ii) US$0.5 million in payments for deferred IPO costs; and (iii) net drawdowns from banking facilities of US$72,379 for the six months ended June 30, 2025.
Net cash used in financing activities for the six months ended June 30, 2024 was US$0.5 million. This was primarily due to (i) net repayments of bank borrowings of US$1.3 million during the six months ended June 30, 2024; (ii) US$1.1 million advances obtained from a related party; and (iii) US$0.3 million payments of deferred IPO costs.
Quantitative and Qualitative Disclosures about Market Risks
Currency risk
The functional currency of our Hong Kong entities is HK$ and the functional currency of our entities in the Cayman Islands, B.V.I, and Singapore is US$. The accompanying unaudited condensed consolidated financial statements are presented in US$. Our sales, operation activities and assets and liabilities are predominately denominated in the functional currency. We consider the foreign exchange risk in relation to transactions denominated in HK$ with respect to US$ 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$1.00.
At the same time, we buy watches from distributors located in Hong Kong, South America, Europe and Singapore, primarily using HK$ and CHF, and sell them to customers in HK$. Any fluctuation in exchange rates against HK$ may result in higher costs of purchases.
For the six months ended June 30, 2026, we had US$3.3 million purchases denominated in CHF. We estimate that any appreciation of CHF against HK$ 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 the six months ended June 30, 2026, our costs related to purchases denominated in CHF would increase by US$33,191 if there is a 1% appreciation of CHF against HK$. Conversely, our costs would decrease by US$33,191 if there is a 1% depreciation of CHF against HK$.
Concentration and credit risks
Financial instruments that potentially subject us to the credit risks consist of cash and cash equivalents, accounts receivable, loans receivable, investment in equity securities, amount due from a 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 cash equivalents and restricted cash with reputable banks located in Hong Kong and Taiwan and with a third-party qualified custodian. As of June 30, 2026 and December 31, 2025, US$0.7 million and US$1.5 million, respectively, were deposited with banks in Hong Kong. Balances maintained with banks in Hong Kong are insured under the Deposit Protection Scheme introduced by the Hong Kong Government for a maximum amount HK$800,000 (equivalent to US$102,015) 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. As of June 30, 2026 and December 31, 2025, US$0.2 million and US$nil were deposited with a bank in Taiwan, respectively. Balances maintained with banks in Taiwan are insured under the Deposit Insurance Scheme administered by the Central Deposit Insurance Corporation (CDIC) for a maximum amount of NT$3,000,000 (equivalent to approximately US$94,000) per depositor at each participating bank, whilst the balances maintained by us may at times exceed the insured limits. Funds held on custodian platforms are not covered by any equivalent deposit protection scheme. As of June 30, 2026 and December 31, 2025, US$0.4 million and US$nil were deposited with a third-party qualified custodian, respectively. These balances are not subject to any deposit insurance or equivalent protection scheme. We have not experienced any losses in these bank accounts and we believe that we are not exposed to any significant credit risk on cash and cash equivalents and restricted cash.
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Assets that potentially subject us to a significant credit risk primarily consist of accounts receivable, loans 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 June 30, 2026 and December 31, 2025, the balances of allowance for expected credit losses against these balances were US$93,475 and US$90,851, respectively.
For the six months ended June 30, 2026, 2025 and 2024, our watch trading operations and related assets were located in Hong Kong, while our digital assets and investments in equity securities were held through our entities incorporated in Singapore and the Cayman Islands. At the same time, we consider that we were exposed to the following concentrations of risk:
(a) Major customers
For the six months ended June 30, 2026, only one customer accounted for 10% or more of our revenue. Revenue from this customer accounted for 19% of our total revenue for that period.
For the six months ended June 30, 2025, three customers accounted for 10% or more of our revenue. Revenue from these three customers accounted for 22%, 12% and 10% of our total revenue for that period, respectively.
For the six months ended June 30, 2024, two customers accounted for 10% or more of our revenue. Revenue from these two customers accounted for 25% and 14% of our total revenue for that period, respectively.
| Six months ended June 30, 2026 |
As of June 30, 2026 |
|||||||||||
| Customer | Revenue | Percentage of revenue |
Accounts receivables, gross |
|||||||||
| US$ | US$ | |||||||||||
| Customer A | 1,175,872 | 19 | % | 2,790 | ||||||||
| Total | 1,175,872 | 19 | % | 2,790 | ||||||||
| Six months ended June 30, 2025 |
As of June 30, 2025 |
|||||||||||
| Customer | Revenue | Percentage of revenue |
Accounts receivables, gross |
|||||||||
| US$ | US$ | |||||||||||
| Customer A | 947,824 | 22 | % | — | ||||||||
| Customer B | 509,600 | 12 | % | — | ||||||||
| Customer C | 444,210 | 10 | % | 3,522 | ||||||||
| Total | 1,901,634 | 44 | % | 3,522 | ||||||||
| Six months ended June 30, 2024 |
As of June 30, 2024 |
|||||||||||
| Customer | Revenue | Percentage of revenue |
Accounts receivables, gross |
|||||||||
| US$ | US$ | |||||||||||
| Customer B | 1,944,592 | 25 | % | — | ||||||||
| Customer A | 1,095,823 | 14 | % | — | ||||||||
| Total | 3,040,415 | 39 | % | — | ||||||||
13
As of June 30, 2026, there were three customers whose receivables accounted for 10% or more of our total balances of accounts receivable and they accounted for 53%, 32% and 12% of the total balances of accounts receivable, respectively.
As of December 31, 2025, 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 receivable.
All the concentration percentages of accounts receivable are calculated before allowance for expected credit losses.
(b) Major vendors
For the six months ended June 30, 2026, four vendors accounted for 10% or more of our total purchase. Total purchase from these four vendors accounted for 24%, 19%, 15% and 10% of our total purchase for that period, respectively.
For the six months ended June 30, 2025, three vendors accounted for 10% or more of our total purchase. Total purchase from these three vendors accounted for 22%,18% and 16% of our total purchase for that period, respectively.
For the six months ended June 30, 2024, four vendors accounted for 10% or more of our total purchase. Total purchase from these four vendors accounted for 29%, 19%, 18% and 13% of our total purchase for that period, respectively.
| Six months ended June 30, 2026 |
As of June 30, 2026 |
|||||||||||
| Vendor | Purchase | Percentage of total purchase |
Accounts payable |
|||||||||
| US$ | US$ | |||||||||||
| Vendor A | 946,549 | 24 | % | — | ||||||||
| Vendor B | 772,737 | 19 | % | — | ||||||||
| Vendor C | 601,700 | 15 | % | — | ||||||||
| Vendor D | 400,936 | 10 | % | — | ||||||||
| Total: | 2,721,922 | 68 | % | — | ||||||||
| Six months ended June 30, 2025 |
As of June 30, 2025 |
|||||||||||
| Vendor | Purchase | Percentage of total purchase |
Accounts payable |
|||||||||
| US$ | US$ | |||||||||||
| Vendor E | 1,165,468 | 22 | % | — | ||||||||
| Vendor B | 984,940 | 18 | % | — | ||||||||
| Vendor F | 840,968 | 16 | % | — | ||||||||
| Total | 2,991,376 | 56 | % | — | ||||||||
14
| Six months ended June 30, 2024 |
As of June 30, 2024 |
|||||||||||
| Vendor | Purchase | Percentage of total purchase |
Accounts payable |
|||||||||
| US$ | US$ | |||||||||||
| Vendor E | 1,942,365 | 29 | % | — | ||||||||
| Vendor F | 1,240,184 | 19 | % | — | ||||||||
| Vendor G | 1,209,550 | 18 | % | — | ||||||||
| Vendor H | 884,630 | 13 | % | 244,380 | ||||||||
| Total | 5,276,729 | 79 | % | 244,380 | ||||||||
As of June 30, 2026, there was one vendor whose payables accounted for 10% or more of our total balances of accounts payable and it accounted for 91% of the total balance of accounts payable.
As of December 31, 2025, there was one vendor whose payables accounted for 10% or more of our total balances of accounts payable and it accounted for 98% of the total balance of accounts payable.
Interest rate risk
Fluctuations in market interest rates may negatively affect our financial condition and results of operations. We are exposed to floating interest rate risk on bank deposits and bank borrowings, particularly during periods when the interest rate is expected to change significantly. Nevertheless, given the amounts of bank deposits in question, we consider the related interest rate risk not material. On the other hand, as of June 30, 2026, we had outstanding bank borrowings of US$3.5 million. We estimate that a 1% increase in HIBOR against bank borrowings outstanding as of June 30, 2026 would result in an increase in interest expense of US$34,718 per annum whilst we estimate that a 1% decrease in HIBOR against bank loans outstanding on June 30, 2026 would result in a decrease in interest expense of US$34,718 per annum. We have not used any instruments or derivatives to manage or hedge our interest rate risk exposure.
Price risk
As of June 30, 2026, we held investments in equity securities with an aggregate carrying value of approximately US$22.4 million, comprising our investment in DV8 and our portfolio investment managed by Asia Strategy Partners LLC. These investments are measured at fair value, with changes in fair value recognized in our unaudited condensed consolidated statements of operations and comprehensive loss. We estimate that a 10% adverse movement in the fair value of these investments would result in a pre-tax loss of approximately US$2.2 million, and a favorable movement of the same magnitude would result in a corresponding pre-tax gain. We do not currently use derivative instruments to hedge our equity price exposure.
As of June 30, 2026, we held 30 Bitcoins with an aggregate carrying value of US$1.8 million, together with USDT and USDC with an aggregate carrying value of US$0.5 million. All of our Bitcoins were pledged as collateral to secure a third party borrowing and are presented as restricted digital assets. Our digital assets are measured at fair value in accordance with ASC 350-60, with changes in fair value recognized in our unaudited condensed consolidated statements of operations and comprehensive loss. We estimate that a 10% adverse movement in the fair value of our Bitcoins would result in a pre-tax loss of approximately US$0.2 million, and a favorable movement of the same magnitude would result in a corresponding pre-tax gain. We monitor our digital asset exposure on an ongoing basis and have not entered into derivative arrangements to hedge that exposure.
Research and Development, Patents and Licenses, etc.
We have not historically incurred significant expenditures on research and development activities, and we do not currently have any material research and development programs. Our business is primarily focused on the trading of watches and related activities, and our business does not depend materially on research and development activities, patents or licenses.
15
Off-Balance Sheet Commitments and Arrangements
We did not have during the periods presented, and we do not currently have, any off-balance sheet financing arrangements or any relationships with unconsolidated entities or financial partnerships, including entities sometimes referred to as structured finance or special purpose entities, that were established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.
Specifically, we have not entered into any financial guarantees, commitments or other arrangements to guarantee payment obligations of any parties. In addition, we have not entered into any derivative contracts that are indexed to our shares and classified as shareholders’ equity or that are not reflected in our unaudited condensed consolidated financial statements. Moreover, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. We do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or product development services with us.
Commitments and Contingencies
The following table summarizes our contractual obligations as of June 30, 2026:
| Contractual obligations | Less than 1 year |
Between 1 – 2 years |
Over 2 years |
Total | ||||||||||||
| US$ | US$ | US$ | US$ | |||||||||||||
| Bank borrowings | 773,742 | 368,390 | 3,223,415 | 4,365,547 | ||||||||||||
| Third party borrowing | 16,759 | 16,759 | 1,353,208 | 1,386,726 | ||||||||||||
| Convertible debts | 300,000 | 300,000 | 10,087,123 | 10,687,123 | ||||||||||||
| Total | 1,090,501 | 685,149 | 14,663,746 | 16,439,396 | ||||||||||||
In addition, we entered into agreements with certain investors to issue convertible debt with an aggregate principal amount of US$10.0 million, and the transaction closed on October 13, 2025. The convertible debt bears interest at 3.0% per annum, payable annually, and matures three years from October 13, 2025. The holders may convert the convertible debt into our ordinary shares at an initial conversion price of US$4.64 per share at any time commencing six months after the issuance date and ending on the tenth trading day immediately preceding the maturity date. We may also redeem all or a portion of the outstanding convertible debt in cash at an amount equal to the principal amount redeemed plus accrued and unpaid interest.
The principal amounts of our bank borrowings, third party borrowing and convertible debts as of June 30, 2026 have been fully recognized as liabilities and disclosed in Notes 15, 16 and 17 in the unaudited condensed consolidated financial statements. The amounts in the table above include future contractual interest payments on an undiscounted basis. The rental fee for the office lease was fully paid at the commencement of the lease term, and there were no future lease commitments as of June 30, 2026. Accordingly, we have no material unrecognized financial, capital or operating commitments as of the reporting date.
As of June 30, 2026 and December 31, 2025, we were not a party to any legal or administrative proceedings, and there were no legal or regulatory proceedings, either individually or in the aggregate, that could reasonably foreseeably result or could have resulted in an unfavorable outcome with a material adverse effect on our results of operations, consolidated financial condition, or cash flows.
As of the date of this Form 6-K, we did not have any loss contingencies which are required to be recognized or disclosed in our unaudited condensed consolidated financial statements.
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Seasonality
Our business is not materially affected by seasonal variations. We may experience fluctuations in demand due to heightened or weakened economic conditions, geopolitical events, and shifts in trade patterns in areas where we operate.
Trend Information
Other than as disclosed elsewhere in this Form 6-K, we are not aware of any trends, uncertainties, demands, commitments, or events for the six months ended June 30, 2026, that are reasonably likely to have a material and adverse effect on revenues, income, profitability, liquidity, or capital resources, or that would cause the disclosed financial information to be not necessarily indicative of future operating results or financial condition.
Inflation
Whilst inflation has been a global issue impacting many countries around the globe, inflation in Hong Kong has not materially affected our results of operations in recent years. According to the Hong Kong Census and Statistics Department, Hong Kong’s core inflation rate remained stable at 1.7% for each of the six months ended June 30, 2026, 2025 and 2024. Although we have not been significantly affected by inflation at this point in time, we may be affected if Hong Kong and any other jurisdiction where we operate in the future experience higher rates of inflation in the future.
Critical Accounting Estimates
We prepare our unaudited condensed consolidated financial statements in accordance with U.S. GAAP, which requires us to make judgments, estimates and assumptions that affect (i) the reported amounts of our assets and liabilities; (ii) the disclosure of our contingent assets and liabilities at the end of each reporting period; and (iii) the reported amounts of revenue and expenses during each reporting period. We continually evaluate these judgments, estimates and assumptions based on our own historical experience, knowledge and assessment of current business and other conditions and our expectations regarding the future based on available information, which together form our basis for making judgments about matters that are not readily apparent from other sources. Since the use of estimates is an integral component of the financial reporting process, our actual results could differ from those estimates. Some of our accounting policies require a higher degree of judgment than others in their application.
Management has determined that there are no critical accounting estimates.
Recent Accounting Pronouncements
See the discussion of the recent accounting pronouncements contained in Note 3 to the unaudited condensed consolidated financial statements, “Recent accounting pronouncements”.
17