Cre8 Enterprise files 20-F on HK and Japan risks | CRE SEC Filing

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

FORM 20-F

 

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

 

OR

 

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

 

For the fiscal year ended December 31, 2025

 

OR

 

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

 

OR

 

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

 

For the transition period from ______ to ________

 

Commission file number: 001-42759

 

Cre8 Enterprise Limited

(Exact name of Registrant as specified in its charter)

 

British Virgin Islands

(Jurisdiction of incorporation or organization)

 

1/F, China Building

29 Queen’s Road Central, Hong Kong

(Address of principal executive offices)

 

Sze Ting CHO

Tel: +852 3693 2688

Email:  ir@cre8corp.com

1/F, China Building
29 Queen’s Road Central, Hong Kong

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

 

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

 

Title of each class   Trading Symbol(s)   Name of each exchange on which registered Class A ordinary shares of no par value   CRE   The Nasdaq Stock Market LLC
(Nasdaq Capital Market)

 

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

 

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

 

 

Indicate the number of outstanding shares of each
of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report: 19,667,500 Class
A ordinary shares and 4,500,000 Class B ordinary shares issued and outstanding as of December 31, 2025.

 

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

 

☐
Yes ☒ No

 

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

 

☐
Yes ☒ No

 

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

 

☒
Yes ☐ No

 

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

 

☒
Yes ☐ No

 

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

 

Large accelerated filer ☐   Accelerated filer ☐   Non-accelerated filer ☒         Emerging growth company ☒

 

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

 

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

 

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

 

U.S. GAAP ☒   International Financial Reporting Standards as issued   Other ☐     by the International Accounting Standards Board ☐    

 

*If “Other” has been checked in response to the
previous question, indicate by check mark which financial statement item the registrant has elected to follow.

 

☐
Item 17 ☐ Item 18

 

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

 

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

 

If this is an annual report, indicate by check
mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934).

 

☐
Yes ☒ No

 

 

 

Table of Contents

 

 
 
 
Page

PART I
 
 
1

Item 1.
Identity of Directors, Senior Management and Advisers
 
1

Item 2.
Offer Statistics and Expected Timetable
 
1

Item 3.
Key Information
 
1

Item 4.
Information on the Company
 
35

Item 4A.
Unresolved Staff Comments
 
52

Item 5.
Operating and Financial Review and Prospects
 
53

Item 6.
Directors, Senior Management and Employees
 
61

Item 7.
Major Shareholders and Related Party Transactions
 
70

Item 8.
Financial Information
 
71

Item 9.
The Offer and Listing
 
72

Item 10.
Additional Information
 
72

Item 11.
Quantitative and Qualitative Disclosures About Market Risk
 
81

Item 12.
Description of Securities Other than Equity Securities
 
82

 
 
 
 

PART II
 
 
83

Item 13.
Defaults, Dividend Arrearages and Delinquencies
 
83

Item 14.
Material Modifications to the Rights of Security Holders and Use of Proceeds
 
83

Item 15.
Controls and Procedures
 
83

Item 16.
[Reserved]
 
84

Item 16A.
Audit Committee Financial Expert
 
84

Item 16B.
Code of Ethics
 
84

Item 16C.
Principal Accountant Fees and Services
 
84

Item 16D.
Exemptions from the Listing Standards for Audit Committees
 
85

Item 16E.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
 
85

Item 16F.
Change in Registrant’s Certifying Accountant
 
85

Item 16G.
Corporate Governance
 
85

Item 16H.
Mine Safety Disclosure
 
86

Item 16I.
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
 
86

Item 16J.
Insider Trading Policies
 
86

Item 16K.
Cybersecurity. 
 
86

 
 
 

PART III
 
 
87

Item 17.
Financial Statements
 
87

Item 18.
Financial Statements
 
87

Item 19.
Exhibits
 
87

 

 

INTRODUCTION

 

Throughout this annual report, unless the context
indicates otherwise, references to “Cre8 Enterprise Limited,” “CRE,” “Cre8 BVI,” “we,”
“Group,” “us,” the “Company,” “our,” or “our company,” refer to Cre8 Enterprise
Limited, a British Virgin Islands holding company and its subsidiaries, collectively. Unless otherwise indicated, in this annual report,
references to:

 

●“Amended and Restated Memorandum and Articles of Association”
refers to the Amended and Restated Memorandum and the Amended and Restated Articles adopted on August 12, 2024;

 

●“Amended and Restated Articles” refers to the amended
and restated articles of association of Cre8 BVI adopted on August 12, 2024 and filed with the Registry of Corporate Affairs of the BVI
on August 13, 2024;

 

●“Amended and Restated Memorandum” refers to the amended
and restated memorandum of association of Cre8 BVI adopted on August 12, 2024 and filed with the Registry of Corporate Affairs of the
BVI on August 13, 2024;

 

●“Articles” refers to articles of association of Cre8
BVI adopted on December 4, 2023;

 

●“Board of Directors” refers to the board of Directors
of Cre8 Enterprise Limited;

 

●“BVI Act” refers to the BVI Business Companies Act,
2004 (as amended);

 

●“BVI” refers to the British Virgin Islands;

 

●“CAGR” refers to compounded annual growth rate, the
year-on-year growth rate over a specific period of time;

 

●“China” or the “PRC” refers to the People’s
Republic of China, including the Hong Kong and Macau Special Administrative Regions of the People’s Republic of China;

 

●“Chinese government” or “PRC government”
refer to the government of Mainland China;

 

●“Class A Ordinary Shares” refers to the class A
ordinary shares of Cre8 BVI (as defined below) with no par value;

 

●“Class B Ordinary Shares” refers to the class B
ordinary shares of Cre8 BVI (as defined below) with no par value;

 

●“Cre8 BVI” or “Company” refers to Cre8 Enterprise
Limited, a BVI business company with limited liability incorporated under the laws of the BVI, as a holding company, unless otherwise
indicated or the context otherwise requires;

 

●“Cre8 Incorp” refers to Cre8 Incorporation Limited,
a BVI business company with limited liability incorporated under the laws of BVI, and an intermediate holding company wholly-owned by
Cre8 BVI;

 

●“Cre8 China” refers to Chuangbafang Enterprise Management
(Shanghai) Company Limited, a company with limited liability incorporated under the laws of the PRC (as defined below), and a wholly-owned
subsidiary of Cre8 BVI through Cre8 Hong Kong;

 

●“Cre8 Hong Kong” or “Operating Subsidiary”
refers to Cre8 (Greater China) Limited, a company with limited liability incorporated under the laws of Hong Kong, and a wholly-owned
subsidiary of Cre8 BVI through Cre8 Incorp;

 

●“Controlling Shareholder” refers to Cre8 Investments
Limited, a BVI business company with limited liability incorporated under the laws of BVI;

 

●“Exchange Act” refers to the Securities Exchange Act of 1934;

 

●“FY2023”, “FY2024” and “FY2025”
refer to fiscal year ended December 31, 2023, 2024 and 2025, respectively;

 

●“GEM” refers to GEM operated by the Hong Kong Stock
Exchange;

 

●“GEM Listing Rules” refers to the Rules Governing the Listing
of Securities on GEM, as amended, supplemented or otherwise modified from time to time;

 

 

●“HKD”, “Hong Kong dollar(s)”, or “HK$”
refer to the legal currency of Hong Kong;

 

●“HKSFC” refers to the Securities and Futures Commission
of Hong Kong;

 

●“Hong Kong” refers to the Hong Kong Special
Administrative Region of the People’s Republic of China;

 

●“Hong Kong Stock Exchange” or “Stock Exchange”
refers to the Stock Exchange of Hong Kong Limited;

 

●“IPO(s)” refers to initial public offering(s), the
listing of a company’s shares on the Stock Exchange (as defined above);

 

●“Listing Rules” refers to the Rules Governing the Listing
of Securities on the Stock Exchange (as defined below), as amended, supplemented or otherwise modified from time to time;

 

●“Main Board” refers to the stock exchange (excluding
the option market) operated by the Hong Kong Stock Exchange which is independent from and operates in parallel with GEM;

 

●“Mainland China” refers to the People’s Republic
of China, excluding Taiwan, the Hong Kong Special Administrative Region of the People’s Republic of China, and the Macao Special
Administrative Region of the People’s Republic of China;

 

●“Memorandum” refers to memorandum of association of
Cre8 BVI adopted on December 4, 2023;

 

●“Ordinary Shares” refers to Class A and Class B
Ordinary Shares;

 

●“PRC laws and regulations” or “PRC laws”
refers to the laws and regulations of Mainland China;

 

●“SEC” refers to the United States Securities and
Exchange Commission;

 

●“Second Amended and Restated Memorandum and Articles of Association”
refers to the Second Amended and Restated Memorandum and the Second Amended and Restated Articles adopted by a resolution of directors
on January 15, 2026;

 

●“US$”, “$”, or “U.S. dollars”
refer to the legal currency of the United States;

 

●“U.S.”, or “United States” refers
to the United States of America;

 

●“U.S. GAAP” refers to generally accepted accounting
principles in the United States; and

 

●“We,” “us,” “our,” “the
Company” and “Cre8 BVI” are to Cre8 Enterprise Limited, a BVI business company with limited liability incorporated
under the laws of the BVI, as a holding company, and does not include its subsidiaries, Cre8 Incorp, Cre8 Hong Kong, and Cre8 China.
Where appropriate, we shall refer to the subsidiaries by their legal names, collectively as “our subsidiaries”, or “Operating
Subsidiary” when we refer to our operating entity, which is Cre8 Hong Kong, as the case may be, and clearly identify the entity
in which investors are purchasing an interest.

 

Cre8 BVI is a holding company that does not have
any material operations of its own, with its operations conducted in Hong Kong through its Operating Subsidiary, Cre8 Hong Kong,
using Hong Kong dollars. The reporting currency of Cre8 Hong Kong is Hong Kong dollars. This annual report contains translations
of certain foreign currency amounts into U.S. dollars for the convenience of the reader. Assets and liabilities denominated in foreign
currencies are translated at year-end exchange rates, income statement accounts are translated at average rates of exchange for the year
and equity is translated at historical exchange rates. Any translation gains or losses are recorded in other comprehensive income (loss).
Gains or losses resulting from foreign currency transactions are included in net income. The conversion of Hong Kong dollars into
U.S. dollars are based on the exchange rates set forth in the H.10 statistical release of the Board of Governors of the Federal Reserve
System. Unless otherwise noted, all translations from Hong Kong dollars to U.S. dollars and from U.S. dollars to Hong Kong
dollars in this annual report were made at the following rates:

 

  
For the years ended December 31, 

  
2023  
2024  
2025 

Average rate 
 7.8110  
 7.7677  
 7.7833 

 

  
As of December 31, 

  
2023  
2024  
2025 

Year-end spot rate 
 7.8110  
 7.7677  
 7.7833 

 

 

Disclosure
Regarding FORWARD-LOOKING STATEMENTS

 

 

This annual report on Form 20-F contains forward-looking
statements that involve substantial risks and uncertainties. In some cases, you can identify forward-looking statements by the words “may”,
“might”, “will”, “could”, “would”, “should”, “expect”, “intend”,
“plan”, “goal”, “objective”, “anticipate”, “believe”, “estimate”,
“predict”, “potential”, “continue” and “ongoing”, or the negative of these terms, or other
comparable terminology intended to identify statements about the future. These statements involve known and unknown risks, uncertainties
and other important factors that may cause our actual results, levels of activity, performance or achievements to be materially different
from the information expressed or implied by these forward-looking statements. The forward-looking statements and opinions contained in
this annual report are based upon information available to us as of the date of this annual report and, while we believe such information
forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to
indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. Factors that
could cause actual results to differ from those discussed in the forward-looking statements include, but are not limited to:

 

●future financial and operating results, including
revenues, income, expenditures, cash balances and other financial items;

 

●our ability to execute our growth, expansion and acquisition
strategies, including our ability to meet our growth strategies;

 

●current and future economic and political conditions;

 

●expected changes in our revenues, costs or expenditures;

 

●our expectations regarding demand for and market acceptance
of our services;

 

●our expectations regarding our customer base;

 

●our ability to obtain, maintain or procure all necessary
government certifications, approvals, and/or licenses to conduct our business, and in the relevant jurisdictions in which we operate;

 

●competition in our industry;

 

●relevant government policies and regulations relating
to our industry;

 

●our capital requirements and our ability to raise
any additional financing which we may require;

 

●our ability to hire and retain qualified management
personnel and key employees in order to enable us to develop our business;

 

●overall industry, economic and market performance;
and

 

●other assumptions described in this annual report
underlying or relating to any forward-looking statements.

 

You should read this annual report and the documents
that we refer to in this annual report and have filed as exhibits to this annual report completely and with the understanding that our
actual future results may be materially different from what we expect. Factors that may cause actual results to differ materially from
current expectations include, among other things, those listed under the heading “Item 3. Key Information – 3.D. Risk Factors.”
and elsewhere in this annual report. If one or more of these risks or uncertainties occur, or if our underlying assumptions prove to be
incorrect, actual events or results may vary significantly from those implied or projected by the forward-looking statements. No forward-looking
statement is a guarantee of future performance.

 

You should not rely upon forward-looking statements
as predictions of future events. The forward-looking statements made in this annual report relate only to events or information as of
the date on which the statements are made in this annual report. Except as required by law, we undertake no obligation to update or revise
publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the
statements are made or to reflect the occurrence of unanticipated events.

 

We would like to caution you not to place undue
reliance on these forward-looking statements and you should read these statements in conjunction with the risk factors disclosed in “Item
3. Key Information – 3.D. Risk Factors.” Those risks are not exhaustive. We operate in an evolving environment. New risks emerge
from time to time and it is impossible for our management to predict all risk factors, nor can we assess the impact of all factors on
our business or the extent to which any factor, or combination of factors, may cause actual results to differ from those contained in
any forward-looking statement. We do not undertake any obligation to update or revise the forward-looking statements except as required
under applicable law. You should read this annual report and the documents that we reference in this annual report completely and with
the understanding that our actual future results may be materially different from what we expect.

 

 

PART I

 

Item 1. Identity of Directors,
Senior Management and Advisers

 

Not applicable for annual reports on Form 20-F.

 

Item 2. Offer Statistics
and Expected Timetable

 

Not applicable for annual reports on Form 20-F.

 

Item 3. Key Information

 

3.A. [Reserved]

 

3.B. Capitalization and Indebtedness

 

Not applicable for annual reports on Form 20-F.

 

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

 

Not applicable for annual reports on Form 20-F.

 

3.D. Risk Factors

 

You should carefully consider the following
risk factors, together with all of the other information included in this annual report. Investment in our securities involves a high
degree of risk. You should carefully consider the risks described below together with all of the other information included in this annual
report before making an investment decision. The risks and uncertainties described below represent our known material risks to our business.
If any of the following risks actually occurs, our business, financial condition or results of operations could suffer. In that case,
you may lose all or part of your investment. 

 

Risks Related to Our Business and Operations

 

Our financial performance may vary from
period to period due to (i) our Operating Subsidiary’s project-by-project engagements whereby its customers generally do not enter
into long-term service agreements with our Operating Subsidiary; (ii) the timing of completion of the projects by our Operating Subsidiary;
and (iii) seasonality.

 

We, through our Operating Subsidiary in Hong Kong,
provide one-stop printing services to our customers who are IPO applicants on a project-by-project basis and the term of engagement generally
commensurate with the customers’ IPO applications, expiring upon completion or termination of their IPO applications and thus, their
agreements with us are non-recurring by nature. Though we also provide financial printing services to listed companies in Hong Kong for
typesetting, proofreading and printing of their compliance documents such as financial reports, public announcements and circulars on
a periodic basis, the term of engagement is generally one year and subject to further negotiation upon expiration. Hence, there is no
guarantee that these customers will continue to engage our Operating Subsidiary for the same type of services, at the same volume of business,
or at all. Our ability to retain existing customers and attract new customers depends on a number of factors such as its marketing strategies,
sales coverage, quality of services, market demand for services and the degree of competition in the industry. As such, our financial
performance may vary from period to period.

 

Revenue derived from IPO applicants is generally
recognized based on stage of completion. Accordingly, the timing of completion and progress of the projects, which are subject to various
factors such as clearance from the relevant regulators in Hong Kong that are beyond our control and may vary from period to period, would
ultimately affect our financial performance. Any delay in completion of our Operating Subsidiary’s projects would result in defer
or even default payments from customers and thereby, adversely affect its cashflow and results of operations. If the projects cannot be
completed after a substantial amount of time and costs have been incurred by our Operating Subsidiary, our results of operations and financial
position may be adversely affected.

 

Our financial and operating performances are also
subject to seasonality. Demand for our Operating Subsidiary’s services from listed companies in relation to typesetting, proofreading
and printing of results announcements and financial reports is typically higher in March, April, August, and September due to the timing
requirement as set out in the relevant Listing Rules. Accordingly, our financial performance during March, April, August, and September,
being the peak seasons, may be better than that of the other periods and may not accurately indicate our overall performance of the entire
financial year. Although we have taken measures to maintain our Operating Subsidiary’s performance throughout the entire year, such
as maintaining sufficient manpower during peak seasons by rescheduling the rosters of our Operating Subsidiary’s staff, prospective
investors should be aware of such seasonal fluctuations when making any comparisons of our financial performance.

 

 

We rely on our service suppliers to conduct
all of the printing and binding/packaging works, delivery of final content outputs and substantially all of the translation works and
the performance of these suppliers may affect the quality of our overall services to customers.

 

Our Operating Subsidiary engages service suppliers
for all its printing and binding/packaging works, delivery of final content outputs and substantially all of its translation works for
higher operational efficiency and capital saving purposes and our Operating Subsidiary does not operate any printing factory. Generally,
the final content outputs are delivered to the customers’ designated locations directly by our printing house suppliers or through
third party logistic service providers. Though our Operating Subsidiary has in-house translation team, it is mainly responsible for quality
assurance of the translation works done by its translation service providers. In addition, our Operating Subsidiary may engage third party
service providers for concept creation and artwork design etc. at times when it does not have sufficient spare capacities.

 

While we will continue to engage printing and
translation service suppliers in the future, we do not have enough control over the operations of our suppliers. We cannot guarantee that
we can monitor the service suppliers’ production process as directly and effectively as monitoring our own staff. These suppliers
also face operational risks of their own. If they fail to meet our requirements such as the turnaround speed and quality of printing,
design or the accuracy of translation works, we may not be able to provide timely and quality services to our customers, especially our
Operating Subsidiary operates in a time-sensitive industry. As a result, our Operating Subsidiary may face complaints or claims from its
customers and thus, additional costs for settling or defending the claims against it would incur, which would adversely and materially
affect our operation, reputation and financial performance.

 

Moreover, we do not enter into any long-term agreement
with our suppliers for their services. We cannot guarantee that we or our Operating Subsidiary will continue to maintain our working relationship
with the suppliers. We have no direct control over the prices charged by our suppliers, who usually have their prescribed price lists,
which are subject to revision from time to time. We, therefore, cannot guarantee that we and our Operating Subsidiary can secure quotes
in similar level from our suppliers in the future. If our Operating Subsidiary’s suppliers are not available or refuse to provide
services to our Operating Subsidiary or increase the contracting prices substantially which may not be passed on to customers who have
already fixed their contract price with our Operating Subsidiary, and if we are unable to engage alternative service providers at a reasonable
price, our operation, business, reputation and profitability will be adversely affected.

 

Our final billings to our customers may
differ from the initial quotations which may cause disagreements between customers and us.

 

Our pricing policy is generally on a cost-plus
basis and does not contain price adjustment provisions in our service agreements with customers. Normally, the out of pocket expenses
are initially borne by our Operating Subsidiary and are billed to its customers as reimbursements. In most projects, the final documents
are generally different from the specification as set forth in the service agreements, especially the number of pages and the quantity
of printed documents. In addition, it is not uncommon for customers to request for additional items such as additional color pages, overseas
courier, overtime services and urgent printing services. Since the additional service fees for additional services cannot be ascertained
until the completion of respective projects, the final billing to customers with additional items and services may differ significantly
from the amount as stated in the agreement.

 

It is our general policy that, prior to rendering
the additional services requested by the customers, its sales personnel or account servicing team will obtain the consents and/or written
confirmation from the customers for charging such additional services based on list of prices for additional services as set out in the
initial service agreements and/or initial quotations. However, we cannot assure you that our customers will not raise any dispute over
final billing. Any prolonged period of such dispute may adversely affect our cash flows and result of operations.

 

We may be adversely affected by the losses
or liabilities arising from leakage of confidential or inside information or substantial errors in respect of documents handled by our
Operating Subsidiary.

 

It is the ordinary course of our Operating Subsidiary’s
business to handle confidential and inside information of our customers, for instance, the financial reports, announcements or circulars
of listed companies and the release of which may affect the customers’ share price. Our Operating Subsidiary is also usually entrusted
by the listed companies to upload this information onto the website of the Stock Exchange for and on their behalf at a designated time
slot. As such, any inadvertent errors made by our Operating Subsidiary, when handling, processing and uploading the confidential or inside
information of its customers may result in early or delay in release of such information or substantial errors in its content outputs,
which may mislead or cause losses to the readers and prospective investors of its customers.

 

Although we and our Operating Subsidiary have
adopted stringent internal procedures to protect the integrity and confidentiality of the information that we handle, there is no assurance
that the procedures can completely eliminate the risks of making substantial errors or leakage of confidential information of our customers
and our services will be free from human errors. There is also no assurance that no leakage of confidential or inside information would
arise from the breach of confidentiality by our employees or suppliers or the deficiency in the information technology system. If any
substantial errors are made in the documents our Operating Subsidiary processed and delivered or any confidential or inside information
is leaked, we and our Operating Subsidiary might be exposed to investigations by relevant regulatory authorities and other liabilities,
complaints or claims from our customers, which may adversely affect our customers’ confidence on our services, reputation, and ultimately
our business and financial position.

 

 

We and our subsidiaries may face financial
or reputational loss due to inadvertent errors occurred in our business operations.

 

Substantial errors in desktop publishing and/or
in-house translation may lead to material misstatements in documents that our Operating Subsidiary handles, such as results announcements
and financial reports; corporate announcements and shareholder circulars of our listed company customers; and IPO prospectuses of our
IPO applicant customers and debt offering circulars of companies listed. Our Operating Subsidiary generally communicates with its customers
and suppliers via e-mails. As such, mis-direction of e-mail messages to unintended recipients may result in leakage of confidential or
inside information of its customers. Notwithstanding its internal control measures, our Operating Subsidiary may still be exposed to liabilities
arising from any such inadvertent errors, such as complaints or legal actions, and our reputation and financial position may be materially
and adversely affected as a result.

 

We do not own our own business premises
for carrying out our business and thus, we are exposed to the risks relating to fluctuations in the commercial building rental market.

 

As an integrated financial printing service provider
for target customers including IPO applicants, listed companies and private companies in the capital market in Hong Kong, our Operating
Subsidiary, Cre8 Hong Kong, is usually entrusted by our customers to deliver printed documents to the Stock Exchange within a tight schedule.
It also provides meeting facilities in its business premises for its customers. Hence, we consider that it is imperative for our Operating
Subsidiary to have its own business premises located in the prime location in Hong Kong, which are in proximity to the office of the Stock
Exchange and the offices of its customers and/or their professional advisers such as sponsors, financial advisers, lawyers and accountants.

 

Our Operating Subsidiary’s current business
premise is located in a grade A commercial building in the central business district in Hong Kong and is rented to it by an independent
third party. As such, it is exposed to the risk on rental fluctuations of grade A commercial buildings in Hong Kong from time to time.
If there is any significant increase in the rental expenses for the leased business premises, we may experience substantial increases
in its operating costs and as a result, our business, results of operations, financial position and prospects may be materially and adversely
affected.

 

There is no assurance that the landlord will not
terminate the tenancy of our current business premises before the expiration of the tenancy. If the landlord terminates the tenancy with
our Operating Subsidiary or refuses to renew the tenancy upon expiration, our Operating Subsidiary’s renovation costs incurred on
its current business premises may be written off, and it may need to incur relocation and renovation costs, or it may fail to secure a
suitable alternative location at all. In such event, our business operations will be materially disrupted and our results of operations
and financial performance will be adversely affected.

 

Any unexpected and prolonged disruption
to access to our business premises may adversely affect our business.

 

As we have only one business premise in Hong Kong,
if there is any unexpected and prolonged disruption of usage or access to this business premise, such as fire or power failure and we
cannot timely relocate the business premise to another suitable location with well-equipped facilities, the normal operation of will be
disrupted. As such, our business, results of operations and financial position will be adversely affected.

 

Our Operating Subsidiary does not maintain
any insurance to cover claims for loss or damage to its final content outputs during delivery.

 

The printing and delivery of final content outputs
is generally carried out by our Operating Subsidiary’s suppliers such as printing houses and logistic service providers. Neither
we nor our Operating Subsidiary maintains any insurance for any loss or damage to the final content outputs during delivery. There is
no assurance that these printing houses or logistic service providers have maintained sufficient insurance to cover the final content
outputs printed and/or delivered by them. As such, our customers may bring liability claims against us if there is loss or damage to the
final content outputs during delivery or damages are incurred from untimely delivery. Any such claims, regardless of whether they are
ultimately successful, may cause us and our Operating Subsidiary to incur litigation costs, harm our business reputation and disrupt our
operations. If any such claims are ultimately successful, we may be required to pay for the damages. Our business, results of operations
and financial condition may, therefore, be materially and adversely affected.

 

We face possible infringement of our intellectual
property rights, which could harm our business and competitive position.

 

We regard our trademarks, domain names and other
intellectual properties as critical to our success, and we rely on a combination of intellectual property laws and contractual arrangements,
including confidentiality and non-compete agreements with our employees and others, to protect our proprietary rights.

 

 

As concerns intellectual property laws, our trademark
“cre8” is duly registered in Hong Kong under the Trade Marks Ordinance (Chapter 559 of the Laws of Hong Kong) as our Directors
consider that our success depends to a certain extent on our ability to maintain our proprietary interest in our trademark and our website
as well as our ability to defend ourselves against potential infringement claims by any third party. The trademark “cre8”
also represents our brand name, which is used by us and our subsidiaries in carrying out our sales and marketing activities to attract
new customers and retain our existing customers.

 

Although we have taken steps to protect our trademark
rights and have resolved a prior dispute involving the use of a similar mark by a third party in Hong Kong, there can be no assurance
that similar disputes will not arise again in the future. Any unauthorized use of our trademarks or other intellectual property by third
parties, including suppliers, customers or competitors, may harm our reputation, dilute our brand and adversely affect our business.

 

Apart from registration of our trademark, we also
rely on a combination of intellectual property laws and contractual arrangements, including confidentiality and non-compete agreements
with our employees and others to protect our proprietary rights. Despite these measures, any of our intellectual property rights could
be challenged, invalidated, circumvented or misappropriated, or such intellectual property may not be sufficient to provide us with competitive
advantages. Confidentiality and non-compete agreements may be breached by counterparties, and there may not be adequate remedies available
to us for any such breach. Accordingly, we may not be able to effectively enforce our contractual rights.

 

Hence, despite we use our best endeavors to protect
our intellectual property rights, there is no assurance that our measures are adequate or that we will always be able to identify cases
of infringement such as unauthorized use of our trademarks by any third party including our suppliers, customers, and competitors, where
such unauthorized use may lead to negative publicity in relation to our reputation and brand name.

 

Preventing any unauthorized use of our intellectual
properties is difficult and costly and the steps we take may be inadequate to prevent the misappropriation of our intellectual property.
In the event that we resort to litigation to enforce our intellectual property rights, such litigation could result in substantial costs
and a diversion of our managerial and financial resources. We can provide no assurance that we will prevail in such litigation. In addition,
our trade secrets may be leaked or otherwise become available to, or be independently discovered by, our competitors. Any failure in protecting
or enforcing our intellectual property rights could have a material adverse effect on our business, financial condition and results of
operations.

 

We rely on market recognition of our “Cre8”
brand and face risks associated with negative publicity.

 

We believe that the continued growth and success
of our group, rests in part with our ability to protect and enhance the value of our brand. This depends largely on the effectiveness
of our marketing efforts. However, our efforts to build our brand may not result in increased revenues in the immediate future or at all
and, even if they do, any increases in revenues may not offset the expenses incurred. If we fail to successfully promote and maintain
our brand while incurring substantial expenses, our results of operations and financial condition would be adversely affected, which may
impair our ability to grow our business.

 

There is no assurance that we will continue to
be successful in maintaining our brand visibility. In the event that there are incidents resulting in adverse publicity against us or
our brand, our market recognition and reputation may deteriorate, thereby materially and adversely affecting our business, results of
operations and prospects.

 

We rely on the continuing efforts of our
senior management team. If one or more of our key executives were unable or unwilling to continue in their present position, our business
may be severely disrupted.

 

We rely on the continued commitment, knowledge
and experience of our senior management team for developing our business plans, managing our operations, ensuring the quality of our services
provided through our Operating Subsidiary and maintaining our working relationships with customers and suppliers. With the support of
our senior management, they are primarily responsible for our vision, strategies and overall management. Moreover, certain customers originated
from the business networks and relationships maintained by our Directors.

 

While we provide a variety of attractive incentives
to our management members, we cannot assure you that we can continue to retain their services. We cannot assure you that our existing
senior management members will not terminate their employment with us in the future. In addition, we do not have any key man insurance
for our senior management members and/or executive officers or key employees. Should any of one or more of our key executives were unable
or unwilling to continue their positions, we may not be able to replace them easily or at all, our future growth may be constrained, our
business may be severely disrupted and our financial condition and results of operations may be materially and adversely affected, and
we may incur additional expenses to recruit, train and retain key personnel. In addition, there is no assurance that any member of our
senior management team will not join our competitors or form a competing business. If any dispute arises between our current or former
officers and us, we may have to incur substantial costs and expenses in enforcing the non-compete undertaking in their employment contracts
with us.

 

 

Our Operating Subsidiary may face difficulties
in recruiting and retaining experienced staff at stable salary levels.

 

As we conduct our operations and provide services
to customers through our Operating Subsidiary in Hong Kong, we rely on our experienced staff to provide integrated financial printing
services. In particular, our Operating Subsidiary requires quality services of our employees from different professions, such as translation
and artwork design on our operations, which is usually trained through on-the-job experience. The demand for these experienced staff by
our competitors and us in the financial printing industry is usually high. Our Directors notice that it is an industry norm that experienced
staff are poached from time to time. The turnover of these experienced staff is also contributed by the working conditions which include
long working hours and reporting duties on shifts, which is due to the nature of our business.

 

Hence, our Directors are of the view that the
ability to recruit and retain experienced staff is crucial to the stability and expansion of our Operating Subsidiary’s operations.
Although we had not experienced any material difficulties in recruiting and/or retaining employees for FY2023, FY2024, and FY2025, there
is no assurance that we are able to recruit and retain the appropriate talent to support our operations at all times. As such, any material
difficulties in recruiting and/or retaining experienced employees in the future may cause a shortage of manpower, delay our Operating
Subsidiary’s operations and/or affect the quality of its services, which may materially and adversely affect our results of operations,
reputation and financial performance.

 

Our financial performance may also be adversely
affected by the increasing staff costs, in particular when we have to offer further competitive remuneration packages and benefits to
our experienced staff in order to retain them. Hence, there is no assurance that we are able to maintain the staff cost at a similar level
as that in FY2023, FY2024, and FY2025. Moreover, we cannot assure that we are able to pass on the increased cost to customers in part
or in full. Therefore, any significant increase in staff costs may have a material and adverse effect on our results of operations and
financial performance.

 

We and our subsidiaries are susceptible
to information technology infrastructure failure caused by server failure and/or unexpected network interruptions, security breaches,
attacks by hackers, computer viruses, or natural or man-made disasters.

 

Our daily operations depends significantly on
the reliability of our information technology infrastructure, which involves the use of Internet connection to (i) make e-Submissions
to the Stock Exchange for and on behalf of some customers including IPO applicants and listed companies; (ii) upload documents to the
website of the Stock Exchange and/or the website of individual customers; and (iii) communicate with customers and suppliers, amongst
other activities, as well as data on the servers. Any failure of Internet connection or server due to the occurrence of fires, floods,
hardware and software failures, power loss, telecommunication failure, data leakage, hacking and break-ins, cyber-attacks, terrorist attacks
or other natural or man-made disasters would suspend or adversely disrupt our and our Operating Subsidiary’s operations and the
continuous provision of its services. As our Operating Subsidiary operates in a time-sensitive industry, any such suspension or disruption
of its operations may negatively affect its customers’ confidence in its ability to deliver its services in a timely manner. Our
reputation and financial performance may be adversely affected as a result.

 

Our Operating Subsidiary also routinely handles
confidential information, including inside information of its customers and rely on the integrity of its IT system to preserve confidentiality
and security. Apart from server failure that may lead to any loss of data, our servers may be vulnerable to unauthorized access, hacking,
computer vandalism and other forms of data theft, which may lead to leakage of confidential and/or price-sensitive information to unauthorized
third parties. Such vulnerability may occur in the event of any malfunctions in relation to the security of our IT infrastructure, such
as a firewall breakdown. As such, we and our subsidiaries are exposed to the risk of liabilities, such as complaints or legal actions,
arising from any such leakage or loss of data or delay in provision of our services, and our reputation and financial position may be
materially and adversely affected as a result.

 

Our business operation is subject to cybersecurity
risks. A cyberattack may disrupt our operations and compromise the personal data of our customers.

 

As we conduct our operations and provide services
to customers through our Operating Subsidiary in Hong Kong, our operations involve transmission, handling, publication and temporary storage
of data, confidential and inside information of customers. Hence, our subsidiaries’ information technology infrastructure is susceptible
to cyber-attacks and cyber incidents and the threats thereof. Cybersecurity risks could include, but are not limited to, malicious software,
attempts to gain unauthorized access to data and the unauthorized release, corruption or loss of data and personal information, interruptions
in communication, loss of intellectual property or theft of sensitive or proprietary technology, loss or damage to data delivery systems,
or other electronic security, including those with our properties and equipment.

 

 

These cybersecurity risks could:

 

●disrupt our Operating Subsidiary’s operations and damage
our Operating Subsidiary’s information technology systems;

 

●leak out confidential and inside information of our customers;

 

●negatively impact our ability to compete;

 

●enable theft or misappropriation of funds;

 

●cause loss, corruption or misappropriation of proprietary
or confidential information, expose us to litigation; and

 

●result in damage to our reputation, downtime, loss of revenue,
and increased costs to prevent, respond to or mitigate cybersecurity events.

 

If a cybersecurity event occurs, it could harm
our business and reputation and could result in a loss of customers, as sensitive or confidential customer data could be accessed by unauthorized
persons or open to the general public, and adversely impact our customers. Likewise, any data breaches by our former and current employees
and others who have access to our systems may pose a risk to the service provided by our Operating Subsidiary, employee relationships
and our reputation.

 

While we continue to make efforts to evaluate
and improve our information technology infrastructure, particularly the effectiveness of our security program, procedures and systems,
it is possible that our business, financial and other systems could be compromised, which could go unnoticed for a prolonged period of
time. There can be no assurance that the actions and controls that we implements, or which we cause third-party service providers to implement,
will be sufficient to protect the information technology infrastructure. Additionally, customers and suppliers upon whom we rely on face
similar threats, which could directly or indirectly impact our business and operations. The occurrence of a cyber-incident or attack could
have a material adverse effect on our business, financial condition and results of operations.

 

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

 

We and our subsidiaries may be subject to a variety
of cybersecurity, data privacy, data protection, and other laws and regulations related to data, including those relating to the collection,
processing, retention, use, disclosure, and transfer of confidential and sensitive information, including personal information and other
data. These laws and regulations, such as the Data Protection Act, 2021 under the laws of BVI and the Measures for Cybersecurity Review
under the laws of PRC, apply not only to third-party transactions, but also to transfers of information within our organization, which
relates to our investors, employees, contractors and other counterparties. These laws and regulations may restrict our business activities
and require us to incur increased costs and efforts to comply, and any breach or noncompliance may subject us to proceedings against us,
damage our reputation, or result in penalties and other significant legal liabilities, and thus may materially and adversely affect our
business, financial condition, and results of operations.

 

We may be unable to implement our future
plans successfully.

 

We may be unable to implement our strategies and
future plans according to our timetable, or at all, due to factors beyond our control, such as regulatory changes. There is no assurance
that our future plans will materialize and generate revenue as planned. Further, any growth in revenue generated by our future plans may
be outpaced in the short term by costs incurred in relation to expansion of our office, human resources and IT resources, and our operations
and financial position may be adversely affected as a result.

 

We recently completed the acquisition of
Upperhand Investment Limited and its Japanese operating subsidiary, UPPERHAND Japan Limited. The integration of this new subsidiary into
our existing operations involves risks that could adversely affect our business, financial condition, and results of operations.

 

On March 10, 2026, Cre8 Incorporation Limited,
our wholly-owned BVI intermediate holding company, entered into a share purchase agreement to acquire 100% of the issued and outstanding
shares of Upperhand Investment Limited (“Upperhand”), a BVI holding company whose wholly-owned Japanese operating subsidiary,
UPPERHAND Japan Limited, provides integrated financial printing services in Japan. The consideration for the acquisition was US$200,000,
paid in full on March 17, 2026, with legal title to the shares of Upperhand transferred to Cre8 Incorporation Limited on April 1, 2026.

 

 

The successful integration of Upperhand and its
Japanese operating subsidiary into our group presents a number of risks. We have no prior experience operating in Japan, and our management’s
attention and resources may be diverted from our existing Hong Kong operations to address integration challenges. We may encounter difficulties
in harmonizing business cultures, operational systems, compliance processes, and financial reporting practices across jurisdictions. We
may also fail to realize the strategic and financial benefits we anticipate from the acquisition on the timeline expected, or at all.
Any of these risks could adversely affect our business, financial condition, and results of operations.

 

We may be subject to material litigation,
including individual and class action lawsuits, as well as investigations and enforcement actions by regulators and governmental authorities.

 

We and our subsidiaries may from time to time
become subject to claims, arbitrations, individual and class action lawsuits, government and regulatory investigations, inquiries, actions
or requests, and other proceedings alleging violations of laws, rules and regulations, both foreign and domestic. The scope, determination
and impact of claims, lawsuits, government and regulatory investigations, enforcement actions, disputes and proceedings to which we are
subject cannot be predicted with certainty, and may result in:

 

●substantial payments to satisfy judgments, fines or penalties;

 

●substantial outside counsel legal fees and costs;

 

●additional compliance and licensure requirements;

 

●loss of productivity and high demands on employee time;

 

●criminal sanctions or consent decrees;

 

●termination of certain employees, including members of our
executive team;

 

●changes to our business model and practices; and

 

●damage to our brand and reputation.

 

As of the date of this annual report, Cre8 Hong
Kong is involved in certain legal proceedings arising in the ordinary course of business. On October 27, 2022, Cre8 Hong Kong filed
a lawsuit against a Hong Kong company in connection with the alleged infringement of one of Cre8 Hong Kong’s service marks. That
matter has since been resolved. On January 14, 2025, Cre8 Hong Kong, as the plaintiff, filed a lawsuit against a customer who defaulted
on its payment obligation, claiming HK$3,635,000 (approximately US$466,820) for outstanding payments due for printing services provided
by Cre8 Hong Kong. This matter remains ongoing.

 

Due to uncertainties inherent in litigation, it
is not possible for us to predict the duration or final outcome of the legal proceedings against the defendant or to determine the amount
of damages, if any, that may be awarded. To the best knowledge of our management after making all reasonable enquiries, these proceedings
are not likely to have material adverse effect on our business, financial condition or operation. Furthermore, we are not aware of any
threat of, any legal proceeding that, in the opinion of our management, is likely to have a material adverse effect on our business, financial
condition or operations, nor have we experienced any incident of non-compliance which, in the opinion of our directors, is likely to materially
and adversely affect our business, financial condition or operations. However, any such matters, regardless of whether such matters are
against us or filed by us, could have an adverse impact, which may be material, on our business, operating results or financial condition
because of legal costs, diversion of management resources, reputational damage and other factors. Litigation or any other legal or administrative
proceeding, regardless of the outcome, is likely to result in substantial costs and diversion of our resources, including our management’s
time and attention.

 

Any lack of effective internal controls
over financial reporting may affect our ability to accurately report our financial results which may affect the market for and price
of the Class A Ordinary Shares.

 

Prior to the initial public offering, we were
a private company with limited accounting personnel and other resources for addressing our internal control over financial reporting.
Our management has not completed an assessment of the effectiveness of our internal control over financial reporting and our independent
registered public accounting firm has not conducted an audit of our internal control over financial reporting. However, in connection
with the audits of our consolidated financial statements for the years ended December 31, 2025, 2024, and 2023, we identified material
weaknesses in our internal control over financial reporting as well as other control deficiencies for the above-mentioned periods.

 

 

As defined in the standards established by the
PCAOB, a “material weakness” is a deficiency, or a combination of deficiencies, in internal control over financial reporting,
such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented
or detected on a timely basis.

 

The material weaknesses identified related to: (1) a lack of accounting
staff and resources with appropriate knowledge of U.S. GAAP and SEC reporting and compliance requirements as well as the lack in formal
accounting policies and procedures manual to ensure proper financial reporting in accordance with U.S. GAAP and SEC reporting requirements,
and (2) our lack of internal audit function to establish formal risk assessment process and internal control framework.

 

To remediate our identified material weaknesses,
we have implemented several measures to improve our internal control over financial reporting, including (i) engaging qualified financial
and accounting advisory team, external consultants, and additional staff with working experience in U.S. GAAP and SEC reporting requirements
to strengthen our financial reporting function, to further improve the efficiency and quality of our financial reporting, and
to establish a comprehensive policy and procedure manual; (ii) hiring independent directors, establishing an audit committee and strengthening
corporate governance; and (iii) implementing regular and continuous U.S. GAAP accounting and financial reporting training programs
for our accounting and financial reporting personnel.

 

We are a public company in the United States subject
to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act of 2002 and the rules and regulations of Nasdaq Capital Market.
Section 404 of the Sarbanes-Oxley Act, or Section 404, require us to include a report from management on the effectiveness of our
internal control over financial reporting in our annual report on Form 20-F. In addition, once we cease to be an “emerging
growth company” as such term is defined in the JOBS Act, our independent registered public accounting firm must attest to and report
on the effectiveness of our internal control over financial reporting. Our management may conclude that our internal control over financial
reporting is not effective. Moreover, even if our management concludes that our internal control over financial reporting is effective,
our independent registered public accounting firm, after conducting its own independent testing, may issue a report that is qualified,
if it is not satisfied with our internal controls or the level at which our controls are documented, designed, operated, or reviewed,
or if it interprets the relevant requirements differently from us. In addition, after we become a public company, our reporting obligations
may place a significant strain on our management, operational, and financial resources and systems for the foreseeable future. We may
be unable to complete our evaluation testing and any required remediation in a timely manner.

 

Risks Related to Doing Business in the Jurisdictions
in Which We Operate

 

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

 

We conduct our operations and provide integrated
financial printing services to customers through Cre8 Hong Kong, our wholly-owned Operating Subsidiary in Hong Kong, a special administrative
region of the PRC. Although we have established a representative office in Mainland China, Cre8 China, solely for marketing and customer
support purposes, and some of our customers, including IPO applicants and listed companies, are PRC entities with shareholders or directors
who are PRC citizens, we do not have substantive operations in Mainland China. Furthermore, pursuant to the Basic Law of the Hong Kong
Special Administrative Region of the People’s Republic of China (“Basic Law”), PRC laws and regulations do not
automatically apply in Hong Kong unless they are listed in Annex III of the Basic Law and applied locally by promulgation or local legislation.
PRC laws and regulations that may be listed in Annex III are currently limited to those that fall within the scope of defense and foreign
affairs as well as other matters outside the limits of the autonomy of Hong Kong. In other words, as the PRC laws and regulations relating
to data protection, cybersecurity and the anti-monopoly have not been listed in Annex III of the Basic Law, they do not apply directly
to Hong Kong entities.

 

 

However, owing to long-arm provisions under the
current PRC laws and regulations, there remain regulatory and legal uncertainties with respect to the applicability, interpretation and
implementation of laws and regulations of Mainland China to Hong Kong entities and individuals. As a result, we may be subject to certain
legal and operational risks associated with our Operating Subsidiary being based in Hong Kong, despite the fact that we only have immaterial,
non-substantive operations in Mainland China. As such, even though our operations are substantially conducted in Hong Kong, we cannot
guarantee that the PRC government will not implement the laws of Mainland China on Hong Kong entities and individuals and exercise significant
direct influence and discretion over the operation of our Operating Subsidiary in Hong Kong in the future. There is no guarantee that
such implementation of PRC laws and regulations will not have a material and adverse impact on our business, financial condition and results
of operations, due to changes in economic, political, legal or social conditions, government policies, or any other unforeseeable reasons.

 

If we or our Operating Subsidiary in Hong Kong
were to become subject to laws and regulations of Mainland China, the legal and operational risks associated in Mainland China may also
apply to our operations in Hong Kong, and we and subsidiaries would face the risks and uncertainties associated with the legal system
in Mainland China, including whether and when we would need to adapt to comply with all applicable laws and regulation, and as to whether
and how the recent PRC government statements and regulatory developments, such as those relating to data and cyberspace security and anti-monopoly
concerns, would be applicable to Hong Kong-based companies like us, given the substantial operations of our Operating Subsidiary in Hong
Kong and the PRC government may exercise significant oversight over the conduct of business in Hong Kong.

 

The laws and regulations in Mainland China are
constantly evolving. Their enactment timetable, interpretation, enforcement, and implementation involve significant uncertainties for
Hong Kong-based entities like us to be compliant should we become subject to any such laws and regulations. They may change and update
quickly with little advance notice, along with the risk that the PRC government may intervene or influence our Operating Subsidiary’s
operations in Hong Kong at any time, which could result in a material change in our operations and/or the value of our securities. Moreover,
there are substantial uncertainties regarding the interpretation and application of PRC laws and regulations, including, but not limited
to, the laws and regulations related to our business and the enforcement and performance of our Operating Subsidiary’s arrangements
with customers in certain circumstances. The laws and regulations are sometimes vague and may be subject to future changes, and their
official interpretation and enforcement may also involve substantial uncertainty. The interpretation of newly enacted laws or regulations,
including amendments to existing laws and regulations, may have a retrospective effect and there may be delays in when the accompanying
statutory guidance would be published. Our business may be affected if we rely on laws and regulations that are subsequently adopted or
interpreted in a manner different from our legal team and PRC counsel’s understanding of these laws and regulations. New laws and
regulations that affect existing and proposed future businesses may also be applied retroactively. As such, we cannot predict what effects
the updated interpretation of existing PRC laws and regulations or those of new PRC laws or regulations may have on our business and operations.

 

The PRC laws, regulations and other government
directives may also be costly for Hong Kong entities that are previously not subject to such regulations to comply with, and such compliance
or any associated inquiries or investigations or any government actions may:

 

●delay or impede our and our subsidiaries’ development;

 

●result in negative publicity or increase our and our subsidiaries’
operating costs;

 

●require significant management time and attention; and

 

●subject our Company and/or our subsidiaries to remedies,
administrative penalties and even criminal liabilities that may harm our and/or our subsidiaries’ business, including fines assessed
for our and our subsidiaries’ current or historical operations, or demands or orders that we modify or even cease our business
practices.

 

We are aware that recently, the PRC government
initiated a series of regulatory actions and statements to regulate business operations in certain areas in Mainland China with little
advance notice, including cracking down on illegal activities in the securities market, enhancing supervision over Mainland China-based
companies listed overseas using a VIE structure, adopting new measures to extend the scope of cybersecurity reviews, and expanding the
efforts in anti-monopoly enforcement. In addition to these statements, laws and regulations by the PRC government, including the Measures
for Cybersecurity Review, the PRC Personal Information Protection Law and the Draft Rules on Overseas Listing published by CSRC on December
24, 2021, also have indicated an intent to exert more oversight and control over offerings that are conducted overseas and/or foreign
investments in Mainland China-based issuers.

 

 

Based on the PRC laws, rules, and regulations
currently in effect as of the date of this annual report, we believe we are not currently required to obtain any approvals or permissions
from the PRC government or relevant PRC authorities to maintain our listing on the Nasdaq Capital Market. However, there is no guarantee
that this will continue to be the case in the future in relation to the continued listing of our securities on a securities exchange outside
of the PRC, or even when such permission is obtained, it will not be subsequently denied or rescinded.

 

The PRC government may intervene or influence
our operations at any time or may exert control over offerings conducted overseas and foreign investment in Hong Kong-based issuers, which
may result in a material change in our and our subsidiaries’ operations and/or the value of our Class A Ordinary Shares. For example,
there is currently no restriction or limitation under the laws of Hong Kong on the conversion of HK dollar into foreign currencies and
the transfer of currencies out of Hong Kong, and the laws and regulations of the PRC on currency conversion control do not currently have
any material impact on the transfer of cash between the ultimate holding company and the Operating Subsidiary in Hong Kong. However, the
Chinese government may, in the future, impose restrictions or limitations on our ability to move money out of Hong Kong to distribute
earnings and pay dividends to and from the other entities within our organization or to reinvest in our business outside of Hong Kong.
Such restrictions and limitations, if imposed in the future, may delay or hinder the expansion of our expansion into new geographic markets
and may affect our ability to receive funds from our Operating Subsidiary in Hong Kong. The promulgation of new laws or regulations, or
the new interpretation of existing laws and regulations, in each case, that may restrict or otherwise unfavorably impact the ability or
way we conduct our business, could require us to change certain aspects of our business to ensure compliance, which could decrease demand
for the services provided by our Operating Subsidiary, reduce revenues, increase costs, require us to obtain more licenses, permits, approvals
or certificates, or subject us to additional liabilities. To the extent any new or more stringent measures are required to be implemented,
our business, financial condition and results of operations could be adversely affected and such measures could materially decrease the
value of our Class A Ordinary Shares, potentially rendering them worthless.

 

If we and our subsidiaries were to be required
to comply with cybersecurity, data privacy, data protection, or any other PRC laws and regulations related thereto and we and our subsidiaries
are unable to comply with such PRC laws and regulations, our financial condition, and results of operations may be materially and adversely
affected.

 

We may become subject to a variety of laws and
regulations in the PRC regarding privacy, data security, cybersecurity, data protection and overseas offering. These laws and regulations
are continuously evolving and developing. The scope and interpretation of the laws that are or may be applicable to us are often uncertain
and may be conflicting, particularly with respect to foreign laws. In particular, there are numerous laws and regulations regarding privacy
and the collection, sharing, use, processing, disclosure, and protection of personal information and other user data. Such laws and regulations
often vary in scope, may be subject to differing interpretations, and may be inconsistent among different jurisdictions.

On June 10, 2021, the Standing Committee of the National People’s Congress enacted the PRC Data Security Law, which took effect
on September 1, 2021. The law requires data collection to be conducted in a legitimate and proper manner, and stipulates that, for
the purpose of data protection, data processing activities must be conducted based on data classification and hierarchical protection
system for data security. On July 6, 2021, the General Office of the Communist Party of China Central Committee and the General Office
of the State Council jointly issued a document to crack down on illegal activities in the securities market and promote the high-quality
development of the capital market, which, among other things, requires the relevant governmental authorities to strengthen cross-border
oversight of law-enforcement and judicial cooperation, to enhance supervision over China-based companies listed overseas, and to establish
and improve the system of extraterritorial application of the PRC securities laws.

 

On August 20, 2021, the 30th meeting
of the Standing Committee of the 13th National People’s Congress voted and passed the “Personal Information
Protection Law of the People’s Republic of China”, or “PRC Personal Information Protection Law,” or the “PIPL,”
which became effective on November 1, 2021. The PRC Personal Information Protection Law applies to the processing of personal information
of natural persons within the territory of China that is carried out outside of China where (1) such processing is for the purpose
of providing products or services for natural persons within China, (2) such processing is to analyze or evaluate the behavior of
natural persons within China, or (3) there are any other circumstances stipulated by related laws and administrative regulations.
Pursuant to the PIPL, personal data processors (“data processors”) shall meet one of the conditions in order to transmit personal
information overseas for their business operations: (i) passing the security evaluation organized by the Cyberspace Administration
of China (the “CAC”); (ii) acquiring personal information protection certification from the professional organizations
regulated by the CAC; (iii) adopting the standard contract forms stipulated by the CAC when entering into contracts with overseas
information receivers, setting forth the rights and obligations of the parties; and (iv) other conditions regulated by laws, regulations
and the CAC. Prior to the cross-border provision of personal information of the natural persons, personal information processors
shall obtain the approval of the corresponding natural persons and advise them of the overseas receiver’s name, contact information,
processing purpose and methods, classification of personal information and information reception procedures, etc. On December 28,
2021, the CAC, jointly with the relevant authorities, formally published Measures for Cybersecurity Review (2021) which took effect
on February 15, 2022 and replace the former Measures for Cybersecurity Review (2020) issued on July 10, 2021. Measures
for Cybersecurity Review (2021) stipulates that in addition to “operator of critical information infrastructure,” any
“data processor” carrying out data processing activities that affect or may affect national security should also be subject
to cybersecurity review, and further elaborated the factors to be considered when assessing the national security risks of the relevant
activities, including, among others, (i) the risk of core data, important data or a large amount of personal information being stolen,
leaked, destroyed, and illegally used or transferred outside the country; and (ii) the risk of critical information infrastructure,
core data, important data or a large amount of personal information being affected, controlled, or maliciously used by foreign governments
after listing abroad. CAC has said that under the proposed rules companies holding data on more than one million users must apply for
cybersecurity approval when seeking listings in other nations because of the risk that such data and personal information could be “affected,
controlled, and maliciously exploited by foreign governments.”

 

 

Although Cre8 Hong Kong, our Operating Subsidiary
in Hong Kong, may collect and store certain data (including certain personal information) from its customers, some of whom may be individuals
from or residing in Mainland China, in connection with our business and operations and for “Know Your Customers” purposes
(to combat money laundering), as confirmed by our legal advisors, we and our Operating Subsidiary will not be deemed to be an “operator
of critical information infrastructure” or an “data processor” carrying out data processing activities, and we do not
expect to be subject to cybersecurity review by the CAC for our operations and listing on the Nasdaq Capital Market, given that (i) we
conduct our operations through our Operating Subsidiary in Hong Kong. Our Operating Subsidiary is incorporated and operating in Hong Kong.
It is unclear whether the Measures for Cybersecurity Review (2021) is applicable to a Hong Kong company. We only have immaterial, non-substantive
operations in Mainland China, Cre8 China, for the sole purposes of marketing and customer support, and Cre8 China does not generate any
revenue at all; (ii) as of the date of this annual report, our Operating Subsidiary has in aggregate collected and stored the personal
information of less than one thousand individuals in Mainland China only and our Operating Subsidiary has acquired the clients’
separate consents for collecting and storing of their personal information and data; (iii) Cre8 Hong Kong does not place any reliance
on collection and processing of any personal information to maintain its business operation; (iv) data processed in the business of Cre8
Hong Kong should not have a bearing on national security nor affect or may affect national security; (v) all of the data our Operating
Subsidiary has collected is stored in servers located in Hong Kong; and (vi) as of the date of this annual report, neither we nor our
Operating Subsidiary has been informed by any PRC governmental authority of being classified as “operator of critical information
infrastructure” or “data processor” that is subject to CAC cybersecurity review or a CSRC review.

 

However, given the recent issuance of the above PRC laws and regulations related to cybersecurity and data privacy, the interpretation
and implementation of these laws and regulations may be subject to revisions and we cannot rule out the possibility that any PRC governmental
authorities may subject us and our subsidiaries to such laws and regulations in the future. If they are deemed to be applicable to us
and our subsidiaries, we cannot assure you that we and our subsidiaries will be compliant with such new regulations in all respects, and
we and our subsidiaries may be ordered to rectify and terminate any actions that are deemed illegal by the PRC governmental authorities
and become subject to fines and other government sanctions, which may materially and adversely affect the business of our subsidiaries
in Hong Kong, and our financial condition and results of operations.

 

If we and/or our subsidiaries were to be
required to obtain any permission or approval from or complete any filing procedure with the CSRC, the CAC, or other PRC governmental
authorities in connection with our IPO or future follow-on offerings under PRC laws, we and/or our subsidiaries may be fined or subject
to other sanctions, and our subsidiaries’ business and our reputation, financial condition, and results of operations may be materially
and adversely affected.

 

On February 17, 2023, the CSRC promulgated
the Trial Administrative Measures (the “Trial Administrative Measures”) and five supporting guidelines, which came into
effect on March 31, 2023. The Trial Administrative Measures further clarified and emphasized that the comprehensive determination
of the “indirect overseas offering and listing by PRC domestic companies” shall comply with the principle of “substance
over form” and particularly, an issuer will be required to go through the filing procedures under the Trial Administrative Measures
if the following criteria are met at the same time: (a) 50% or more of the issuer’s operating revenue, total profits, total assets
or net assets as documented in its audited consolidated financial statements for the most recent accounting year are accounted for by
PRC domestic companies, and (b) the main parts of the issuer’s business activities are conducted in Mainland China, or its main
places of business are located in Mainland China, or the senior managers in charge of its business operation and management are mostly
Chinese citizens or domiciled in Mainland China.

 

On the same day, the CSRC held a press conference
for the release of the Trial Administrative Measures and issued the Notice on Administration for the Filing of Overseas Offering and Listing
by Domestic Companies, which, among others, provided the exemption from immediate filings for issuers that (a) have been listed or have
been registered but not yet listed in foreign securities markets, including U.S. markets, prior to the effective date of the Trial
Administrative Measures, (b) are not required to re-perform the regulatory procedures with the relevant overseas regulatory authority
or the overseas stock exchange, and c) will complete the overseas securities offering and listing before September 30, 2023. Nonetheless,
such issuers shall carry out the filing procedures as required if they subsequently conduct refinancing or are involved in other circumstances
that require filings with the CSRC. Furthermore, the Trial Administrative Measures and its supporting guidelines provide a negative
list of types of issuers banned from listing overseas, the issuers’ obligation to comply with national security measures and the
personal data protection laws, and certain other matters such as the requirements that an issuer (i) file with the CSRC within three business days
after it submits an application for initial public offering to the competent overseas regulator and (ii) file subsequent reports
with the CSRC on material events, including change of control and voluntary or forced delisting, after its overseas offering and listing.

 

 

Based on the laws and regulations currently in
effect in the PRC as of the date of this annual report, we and our Operating Subsidiary in Hong Kong, Cre8 Hong Kong, are not required
to obtain any permissions or approvals from Hong Kong authorities nor any PRC authorities to issue our Class A Ordinary Shares to foreign
investors, including the CAC or the CSRC for the following reasons: (i) we are headquartered in Hong Kong, with our officers and all members
of the Board of Directors based in Hong Kong who are not Mainland China citizens; (ii) we do not have any VIE structure and has only immaterial,
non-substantive operations in Mainland China, nor is it controlled by any companies or individuals of Mainland China; (iii) we only operate
in Hong Kong, all of our revenues and profits are generated by our subsidiaries in Hong Kong, and we have not generated revenues or profits
from Mainland China in the most recent accounting year accounts for more than 50% of the corresponding figure in our audited consolidated
financial statements for the same period; (iv) we do not have or intend to set up any subsidiary or enter into any contractual arrangements
to establish a VIE structure with any entity in Mainland China; and (v) pursuant to the Basic Law of the Hong Kong Special Administrative
Region of the PRC, or the Basic Law, PRC laws and regulations shall not be applied in Hong Kong except for those listed in Annex III of
the Basic Law (which is confined to laws relating to national defense, foreign affairs and other matters that are not within the scope
of autonomy). As of the date of this annual report, neither the CAC, the CSRC nor any other PRC regulatory agency or administration has
contacted the Company in connection with the Company’s or our Operating Subsidiary’s operations or our listing.

 

However, given the uncertainties arising from
the legal systems in Mainland China and Hong Kong, including uncertainties regarding the interpretation and enforcement of the PRC laws
and regulations and the significant authority of the PRC government to intervene or influence the offshore holding company headquartered
in Hong Kong, there remains significant uncertainty in the interpretation and the scope of enforcement of the Trial Administrative Measures,
the PIPL, and other relevant PRC data privacy, cybersecurity laws and regulations. It is highly uncertain how soon the legislative or
administrative regulation-making bodies will respond and what existing or new laws or regulations or detailed implementations and interpretations
will be modified or promulgated, if any. It is also highly uncertain and unpredictable what the potential impacts of any such modified
or new laws and regulations will have on the daily business operations of our subsidiaries and the listing of our Class A Ordinary Shares
on the U.S. or other foreign exchanges. As the Trial Administrative Measures are recently issued, there remains uncertainty as to how
it will be interpreted or implemented. Therefore, we cannot assure you that when and whether we will be subject to such filing requirements,
or will be able to get clearance from the CSRC in a timely manner, or at all, even though we believe that none of the abovementioned situations
applies to us.

 

We are currently not required to obtain permissions
or approvals from the PRC authorities to operate our business or list on the U.S. exchanges and offer securities. Specifically, we are
currently not required to obtain any permissions or approvals from the CSRC, the CAC or any other PRC governmental authority to operate
our business or to list our securities on a U.S. securities exchange or issue securities to foreign investors. However, we cannot assure
you that we will not be subject to the regulation of relevant PRC regulatory authorities in the future. Nor can we guarantee that we will
continue to comply with potential additional requirements, if any, in a timely manner. There remains uncertainty as to how the Measures
for Cybersecurity Review (2021) will be interpreted or implemented. As such, the current interpretation of relevant PRC laws and regulations
provided by our PRC counsel may not be consistent with that of the relevant PRC governmental authority. If we were deemed as an “operator
of critical information infrastructure” or a “data processor” controlling personal information of no less than one million
users under the Measures, or if other regulations promulgated in relation to the Measures are later deemed to be applicable to us, then
our business operations and the listing of our Class A Ordinary Shares in the U.S. could be subject to potential cybersecurity reviews
by the CAC. In the event that we are subject to any such mandatory cybersecurity review and other specific actions required by the CAC,
we face uncertainty as to whether any clearance or other required actions can be completed in a timely fashion or at all. Given such uncertainty,
we could be further required to suspend our relevant business, shut down our website, or face other kinds of penalties that could materially
and adversely affect our business, financial condition, and results of operations.

 

Furthermore, if the Trial Administrative Measures,
the Measures for Cybersecurity Review (2021), and the PIPL become applicable to us or our Operating Subsidiary in Hong Kong, our operation
and the listing of our Class A Ordinary Shares in the U.S. could be subject to the CAC’s cybersecurity review or the CSRC Overseas
Issuance and Listing review in the future. If the applicable laws, regulations, or interpretations change and our Operating Subsidiary
become subject to the CAC or CSRC review, we cannot assure you that our Operating Subsidiary will be able to comply with the regulatory
requirements in all respects and our current practice of collecting and processing personal information may be ordered to be rectified
or terminated by regulatory authorities. Compliance with these laws and regulations could significantly increase our operating costs,
require significant changes to our operations or even prevent us from providing certain service offerings in jurisdictions in which we
currently operate or in which we may operate in the future. If there was such significant change to the current political arrangements
between Mainland China and Hong Kong, or any changes in the PRC laws, regulations, or interpretation or applicability of existing laws,
and/or if we were required to obtain such permissions or approvals in the future in connection with the listing or continued listing of
our securities on a stock exchange outside of the PRC, it is uncertain how long it would take for us to obtain such approval, and, even
if we obtained such approval, the approval could be rescinded. Any failure to obtain or delay in obtaining the necessary permissions from
the PRC authorities to conduct offerings or list outside of the PRC may subject us to sanctions imposed by the CSRC, CAC, or other PRC
regulatory authorities. It could include fines and penalties, proceedings against us, and other forms of sanctions, and our ability to
conduct our business, invest into Mainland China as foreign investments or accept foreign investments, ability to offer or continue to
offer Class A Ordinary Shares to investors or list on the U.S. or other overseas exchange may be restricted, and the value of our Class
A Ordinary Shares may significantly decline or be worthless, our business, reputation, financial condition, and results of operations
may be materially and adversely affected. The CSRC, the CAC, or other PRC regulatory agencies also may take actions requiring us, or making
it advisable for us, to refrain from conducting any future offerings. In addition, if the CSRC, the CAC, or other regulatory PRC agencies
later promulgate new rules requiring that we obtain their approvals for future offerings, we may be unable to obtain a waiver of such
approval requirements, if and when procedures are established to obtain such a waiver. Any uncertainties and/or negative publicity regarding
such an approval requirement could have a material adverse effect on the trading price of our securities.

 

 

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

 

Although we and our subsidiaries are not subject
to cybersecurity review by the CAC nor any other PRC authorities for our continued listing on the Nasdaq Capital Market or required to
obtain regulatory approval regarding the data privacy and personal information requirements from the CAC nor any other PRC authorities
for our and our subsidiaries’ operations Hong Kong, because all of our operations take place in Hong Kong, we are subject to a variety
of laws and other obligations regarding data privacy and protection in Hong Kong.

 

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

 

We believe that we have been in compliance with
the data privacy and personal information requirements of the PDPO. Moreover, we do not expect to be subject to any cybersecurity review
by Hong Kong and PRC government authorities to maintain our continued listing. However, if we or our Operating Subsidiary violated certain
provisions of the PDPO, we could face significant civil penalties and/or criminal prosecution, which could adversely affect our business,
financial condition, and results of operations.

 

Our financial condition, results of operations,
the value of our Ordinary Shares and/or our ability to continue to offer securities to investors may be materially and adversely affected
by existing or future PRC laws and regulations which may become applicable to us and our subsidiaries.

 

Substantial part of our operations are conducted
by our Operating Subsidiaries in Hong Kong. We and our subsidiaries do not have any operation, maintain office or personnel or physical
presence in Mainland China, nor currently do we have, nor intend to have, any contractual arrangements to establish a variable interest
entity (“VIE”) structure with any entity in Mainland China. However, we and our Operating Subsidiaries in Hong Kong are subject
to certain legal and operational risks associated with two of Operating Subsidiaries being based in Hong Kong, having all of their
operations to date in Hong Kong, and having existing or potential clients that are companies based in Mainland China or have shareholders
or directors that are Mainland China individuals. 

 

There is no guarantee that if certain existing
or future PRC laws become applicable to us and our subsidiaries, they will not have a material adverse impact on the business of our subsidiaries
in Hong Kong, our financial condition and results of operations and/or our ability to continue to offer securities to investors, any of
which may cause the value of such securities to significantly decline or be worthless.

 

Except for the Basic Law, national laws do not
apply in Hong Kong unless they are listed in Annex III of the Basic Law and are applied locally by promulgation or local legislation.
National Laws that may be listed in Annex III are currently limited under the Basic Law to those which fall within the scope
of defense and foreign affairs, as well as other matters outside the limits of the autonomy of Hong Kong. PRC laws and regulations relating
to data protection, cybersecurity and the anti-monopoly have not been listed in Annex III and, thus, they may not apply directly
to Hong Kong.

 

 

The PRC laws and regulations are evolving, and
their enactment timetable, interpretation and implementation may be revised from time to time. To the extent any PRC laws and regulations
become applicable to us and our subsidiaries, we and our subsidiaries may be subject to the risks associated with the legal system in
Mainland China, including with respect to the enforcement of laws and the possibility of changes of rules and regulations, which could
materially and adversely affect our financial condition and results of operations.

 

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

 

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

 

As one of the conditions for the handover of the
sovereignty of Hong Kong to China, China accepted conditions such as Hong Kong’s Basic Law. The Basic Law guarantees Hong Kong a
high degree of autonomy, which ensures Hong Kong will retain its own currency (the Hong Kong Dollar), legal system, parliamentary system
and people’s rights and freedom for fifty years from 1997. This agreement has given Hong Kong the freedom to function with a high
degree of autonomy. The Special Administrative Region of Hong Kong is responsible for its own domestic affairs, including, but not limited
to, the judiciary and courts of last resort, immigration and customs, public finance, currencies and extradition. Hong Kong continues
using the English common law system.

 

However, if there were any changes in relation
to the political arrangements that allow Hong Kong to function autonomously, this could potentially impact Hong Kong’s common law
legal system and may in turn, bring about uncertainty in, for example, the enforcement of our contractual rights. This could, in turn,
materially and adversely affect our Operating Subsidiary’s business and operations. Accordingly, we cannot predict the effect of
future developments in the Hong Kong legal system, including the promulgation of new laws, changes to existing laws or the interpretation
or enforcement thereof, or the pre-emption of local regulations by national laws. These uncertainties could limit the legal protections
available to us, including the ability to enforce agreements with the customers.

 

There are political risks associated with
conducting business in Hong Kong.

 

A substantial part of our operations is in Hong Kong. During the period covered by the financial information incorporated by reference
into and included in this annual report, we derive a substantially all of our revenue from operations in Hong Kong. Accordingly,
the business operations and financial conditions of our subsidiaries will be affected by the political and legal developments in Hong Kong.
Any adverse economic, social and/or political conditions, material social unrest, strike, riot, civil disturbance or disobedience, as
well as significant natural disasters, may affect the market and may adversely affect our business operations. Given the relatively small
geographical size of Hong Kong, any of such incident may have a widespread effect on our business operations, which could in turn adversely
and materially affect our business, results of operations and financial condition.

 

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

 

 

As a separate customs territory, Hong Kong maintains
and develops relations with foreign states and regions. On June 30, 2020, the Standing Committee of the PRC National People’s
Congress adopted the Hong Kong National Security Law. This law defines the duties and government bodies of the Hong Kong National Security
Law for safeguarding national security and four categories of offences – secession, subversion, terrorist activities, and collusion with
a foreign country or external elements to endanger national security – and their corresponding penalties. In response, the U.S. State
Department has indicated that the United States no longer considers Hong Kong to have significant autonomy from China and President Trump
signed an executive order and Hong Kong Autonomy Act, or HKAA, to remove Hong Kong’s preferential trade status and to authorize
the U.S. administration to impose blocking sanctions against individuals and entities who are determined to have materially contributed
to the erosion of Hong Kong’s autonomy. On August 7, 2020, the U.S. government imposed HKAA-authorized sanctions on eleven
individuals, including the former and current HKSAR chief executive Carrie Lam and John Lee, respectively. On October 14, 2020, the
U.S. State Department submitted to relevant committees of Congress the report required under HKAA, identifying persons materially contributing
to “the failure of the Government of China to meet its obligations under the Joint Declaration or the Basic Law”. The HKAA
further authorizes secondary sanctions, including the imposition of blocking sanctions, against foreign financial institutions that knowingly
conduct a significant transaction with foreign persons sanctioned under this authority. The imposition of sanctions may directly affect
the foreign financial institutions as well as any third parties or customers dealing with any foreign financial institution that is targeted.
It is difficult to predict the full impact of the Hong Kong National Security Law and HKAA on Hong Kong and companies located in Hong
Kong. If we or our subsidiaries are determined to be in violation of the Hong Kong National Security Law or the HKAA by competent authorities,
our subsidiary’s business operations, financial position and results of operations could be materially and adversely affected.

 

These regulations, along with other recent actions,
may represent an escalation in political and trade tensions involving the U.S, Mainland China and Hong Kong, which could potentially harm
our business. Our revenue is also susceptible to the ongoing incidents or factors that affect the stability of the social, economic and
political conditions in Hong Kong. Any drastic events may adversely affect our operating subsidiary’s business operations. Such
adverse events may include changes in economic conditions and regulatory environment, social and/or political conditions, civil disturbance
or disobedience, as well as significant natural disasters. Given the relatively small geographical size of Hong Kong, any of such incidents
may have a widespread effect on our operating subsidiary’s business operations, which could in turn adversely and materially affect
our business, results of operations and financial condition. It is difficult to predict the full impact of the HKAA on Hong Kong and companies
with operations in Hong Kong like us. Furthermore, legislative or administrative actions in respect of China-U.S. relations could cause
investor uncertainty for affected issuers, including us, and the market price of our Class A Ordinary Shares could be adversely affected.

 

Our recent acquisition of Upperhand Investment
Limited exposes us for the first time to the legal, regulatory, and business environment of Japan, which differs materially from the environments
in which we currently operate, and our failure to comply with applicable Japanese laws and regulations could result in material adverse
consequences.

 

Following the closing of the acquisition of Upperhand
Investment Limited on April 1, 2026, we have, through our newly acquired subsidiary UPPERHAND Japan Limited, commenced operations in Japan
for the first time. Japan has a complex regulatory environment that differs materially from that of Hong Kong and the British Virgin Islands,
and our management and compliance infrastructure have not previously been required to address Japanese regulatory requirements. Our Japan
operations are, or may become, subject to a broad range of Japanese laws and regulations, including those governing business licensing
and registration, employment and labor relations, data privacy and protection, corporate governance, consumer protection, and anti-monopoly
regulation. Compliance with these requirements will impose additional costs and demands on our management team. Any failure to comply
with applicable Japanese laws and regulations, whether due to inadvertence, resource constraints, or evolving regulatory interpretations,
could result in administrative sanctions, civil liability, reputational harm, compelled changes to our business practices, or other adverse
consequences that could materially and adversely affect our business, financial condition, and results of operations.

Our international operations involve special risks.

 

We are headquartered in Hong Kong, with presence
in Japan after the acquisition of Upperhand and representative office in Mainland China. Our international presence involve financial
and business risks that differ from or are in addition to those faced by our Hong Kong operations, including:

 

●cultural and language differences;

 

●limited brand recognition;

 

●different employment laws and
rules, employment or service contracts, and social and cultural factors that could result in employee turnover, lower utilization rates,
higher costs and cyclical fluctuations in utilization that could adversely affect financial and operating results;

 

 

●foreign currency disruptions
and currency fluctuations between the Hong Kong dollar and foreign currencies that could adversely affect financial and operating
results;

 

●different legal and regulatory
requirements and other barriers to conducting business;

 

●greater difficulties in resolving
the collection of receivables when legal proceedings are necessary;

 

●greater difficulties in managing
our non-Hong Kong operations, including client relationships, in certain locations;

 

●disparate systems, policies,
procedures and processes;

 

●failure to comply with the
FCPA and anti-bribery laws of other jurisdictions;

 

●higher operating costs;

 

●longer sales and/or collections
cycles;

 

●potential restrictions or adverse
tax consequences for the repatriation of foreign earnings, such as trapped foreign losses and importation or withholding taxes;

 

●different or less stable political
and/or economic environments;

 

●conflicts between and among
the Hong Kong and countries in which we conduct business, including those arising from trade disputes or disruptions, the termination
or suspension of treaties, or boycotts; and

 

●civil disturbances or other
catastrophic events that reduce business activity.

 

If we and our subsidiaries are not able to quickly
adapt to or effectively manage our operations in geographic markets outside Hong Kong, our business prospects and results of operations
could be negatively impacted.

 

Failure to comply with laws and regulations
applicable to our business could subject us and our subsidiaries to fines and penalties and could also cause us to lose customers or
otherwise harm our business.

 

The our business could be subject to regulation
by various governmental agencies in Japan and Mainland China, in addition to Hong Kong, including agencies responsible for monitoring
and enforcing compliance with various legal obligations, such as corporate law, data privacy laws and regulations, intellectual property
laws, employment and labor laws, workplace safety, governmental trade laws, import and export controls, anti-corruption and anti-bribery
laws, and tax laws and regulations. These laws and regulations impose added costs on our business. Noncompliance with applicable regulations
or requirements could subject us and our subsidiaries to:

 

●investigations, enforcement
actions, and sanctions;

 

●mandatory changes to our network
and products;

 

●disgorgement of profits, fines,
and damages;

 

 
●
civil and criminal penalties or injunctions;

 

 
●
claims for damages by our customers or business partners;

 

 
●
termination of contracts; and

 

 
●
failure to obtain, maintain or renew certain licenses, approvals, permits, registrations or filings necessary to conduct our operations;

 

If any governmental sanctions are imposed, or
if we do not prevail in any possible civil or criminal litigation, our business, results of operations, and financial condition could
be adversely affected. In addition, responding to any action will likely result in a significant diversion of our management’s attention
and resources and an increase in professional fees. Enforcement actions and sanctions could materially harm our business, results of operations,
and financial condition.

 

 

Any reviews by regulatory agencies or legislatures
may result in substantial regulatory fines, changes to our business practices, and other penalties, which could negatively affect our
business and results of operations. Changes in social, political, and regulatory conditions or in laws and policies governing a wide range
of topics may cause us to change our business practices. Further, our expansion into a variety of new fields also could raise a number
of new regulatory issues. These factors could negatively affect our business and results of operations in material ways.

 

Moreover, we are exposed to the risk of misconduct,
errors and failure to functions by our management, employees and parties that we collaborate with, who may from time to time be subject
to litigation and regulatory investigations and proceedings or otherwise face potential liability and penalties in relation to noncompliance
with applicable laws and regulations, which could harm our reputation and business.

 

Fluctuations in the exchange rate between
the Japanese yen and the Hong Kong dollar or the U.S. dollar could adversely affect the value of revenues, assets, and distributions derived
from our Japan operations and materially and adversely affect our results of operations and financial condition as reported in U.S. dollars.

 

Prior to the acquisition of Upperhand Investment
Limited, substantially all of our revenues and expenses were denominated in Hong Kong dollars, which is pegged to the U.S. dollar at a
rate of approximately HK$7.80 per US$1.00. Following the Closing, revenues and expenses attributable to UPPERHAND Japan Limited will be
denominated in Japanese yen. The exchange rate between the Japanese yen and the Hong Kong dollar or the U.S. dollar may fluctuate significantly
and is affected by factors beyond our control, including interest rate differentials, monetary policies of the Bank of Japan and the U.S.
Federal Reserve, inflation levels, general economic conditions, and geopolitical events. Any depreciation of the Japanese yen relative
to the U.S. dollar would reduce the U.S. dollar value of revenues, earnings, and assets attributable to our Japan operations, and could
materially and adversely affect our results of operations and financial condition as reported in this annual report and in future filings.
We do not currently maintain any currency hedging arrangements with respect to our yen-denominated exposures, and there can be no assurance
that we will implement any such arrangements in the future.

 

Risks Related to the Industry in which We Operate

 

We conduct our operations through our Operating
Subsidiary in Hong Kong. Our business performance is highly influenced by the conditions of capital and financial market in Hong Kong.
Unfavorable market and economic conditions and the material deterioration of the political and regulatory environment in Hong Kong and
Mainland China, could materially and adversely affect our business, financial condition, prospects, and results of operations.

 

All our business operations are carried out in
Hong Kong. As a financial printing service provider for the capital market sectors of Hong Kong, our results of operations and prospects
are highly susceptible to any development of change in government policies, as well as economic, social, political and legal development
in Hong Kong. Events with adverse impacts on investors’ confidence and risk appetites, such as riots or mass civil disobedience
movements and general deterioration of the local economy, may lead to a reduction in investment or trading activities and in turn our
business performance. Any change in the Hong Kong local economic, social and political environment, all of which are beyond our control,
may lead to a prolonged period of sluggish market activities which would in turn have material adverse impact on our business.

 

The capital market and the economic conditions
in general of Hong Kong are highly sensitive to conditions of the capital markets, political, social and economic conditions in Mainland
China. When there are unfavorable changes to the global or local market conditions, the capital market and the economy in Hong Kong may
experience negative fluctuations in its performance. Any prolonged slowdown in the Chinese economy may affect potential clients’
confidence in the capital market as a whole and have a negative impact on our business as a whole, the demand for our printing services,
the level of our business activities and consequently our revenue derived therefrom. This may materially and adversely affect our financial
condition and the results of operations.

 

We face intense competition in the financial
printing services industry in Hong Kong, and if we do not compete effectively, our results of operations and business prospects may be
adversely affected.

 

We primarily compete in the integrated financial
printer market in Hong Kong, which is highly competitive. New competitors that seek to enter our target market or existing market participants
that seek to increase their market share sometimes adopt a competitive pricing strategy and provide their customers with pricing or other
terms prevalent in that market, which could adversely affect our market share.

 

 

We cannot assure you that we will be able to continue
to compete successfully in our existing markets. A number of factors, including an increase in operational efficiency, adoption of competitive
pricing strategies, expansion of operations or adoption of innovative marketing strategies of our competitors, may reduce our competitiveness
in the market. Our Directors therefore consider that, given the price competition in relation to our business is keen, we may have to
adjust our price downward to remain competitive in the market, thereby materially and adversely affecting our profitability.

 

Furthermore, to the extent that our Operating
Subsidiary’s competitors are able to offer more attractive terms to its customers, its existing business relationships may be terminated.
If our Operating Subsidiary is unable to compete with such competitors, the demand for its services could stagnate or substantially decline,
and as a result, we could experience reduced revenues, which could harm our business and results of operations.

 

We and our Operating Subsidiary are susceptible
to regulatory changes affecting the needs of our customers.

 

The majority of our customers are companies either
listed on the Stock Exchange or IPO applicants. We provide services to support their compliance with obligations under the relevant laws
and Listing Rules to publish, amongst other documents, results announcements and financial reports; corporate announcements and shareholder
circulars; IPO prospectuses; and debt offering circulars. As such, we are susceptible to any regulatory changes to such obligations. In
particular, any relaxation of such obligations may reduce demand for our services. Regulatory changes are beyond our control and may significantly
affect our business, operating results and growth prospects.

 

There may be changes that may result in the reduction
in market demand for printed documents or financial printing services such as (i) relaxations on rules requiring the publication of shareholder
circulars; (ii) changes in legal requirements for distribution of summary financial reports instead of full annual reports; (iii) distribution
of financial reports by electronic means instead of printed copies; (iv) dissemination of corporate information to shareholders of listed
companies using electronic means and in electronic format or via the Exchange’s Website instead of printed form or publishing paid
announcements in newspapers; and (v) the use of Mixed Media Offers in a public offer without being accompanied by printed listing documents.
Such changes are beyond our control and any further amendments to the existing laws and regulations governing companies listed on the
Stock Exchange, if introduced, on the methods of disseminating corporate information to the public, may affect the demand of printed documents,
and hence, may significantly affect our business and prospects in the future. For instance, the Stock Exchange has implemented a number
of paperless initiatives. With effect on July 5, 2021, all listing documents are to be published solely in an online electronic form,
specifically on the Stock Exchange’s website and on the IPO issuers’ own website and all subscriptions to be made through
online electronic channels only. As such, printed copies of prospectuses are not required for distribution to investors and our revenue
to be generated from printing of prospectuses have been and would be largely reduced.

 

Our business is susceptible to the risks
in the capital market, particularly the IPO market in Hong Kong.

 

Our business and operations are based in Hong
Kong, and the nature of our business is the provision of services to companies listed on the Stock Exchange and IPO applicants seeking
to list thereon. Therefore, our business is dependent on, among others, a positive environment of the Hong Kong stock market and capital
market as a whole, which is directly affected by, among others, the global and local political and economic environments. In particular,
any prolonged period of bearish market conditions may deter applications for listing on the Stock Exchange and/or corporate activity,
which could in turn diminish demand for our services. Accordingly, our business, operating results and growth prospects may be adversely
affected.

 

The volatility of the global stock market may
adversely affect or delay our potential customers’ plans to commence their IPO and/or other fundraising and corporate activities.
As such, our revenue and profitability may fluctuate and there is no assurance that we will be able to maintain our historical financial
performance in times of difficult or unstable economic conditions. Historical levels of our profit should not be relied on as an indication
of our future financial performance.

 

Moreover, we have no business presence in overseas
jurisdictions and in the event of any material deterioration in the economic, political and regulatory environment in Hong Kong, may have
difficulty in relocating our entire business operations to other geographic markets. There is no assurance that we will be able to maintain
our historical financial performance amidst such difficult or unstable conditions. As such, historical levels of profit of our Group should
not be relied on as an indication of our future financial performance.

 

 

Our costs and expenses may remain constant
or increase even if our revenues decline.

 

A significant portion of our operating costs,
including salary and rent, is fixed. Accordingly, a decrease in our revenues could result in a disproportionately higher decrease in our
earnings because our operating costs and expenses may not decrease proportionately. In addition, our staff costs and rent may increase
over time. However, we cannot assure you that we have the ability to pass increased costs on to our customers through service fee increases,
as it depends on a variety of factors beyond our control, such as the global economic environment and stock market conditions. Therefore,
our costs and expenses may remain constant or increase even if our revenues decline, which would adversely affect our net margins and
results of operations.

 

Risk Related to Our Corporate Structure

 

We rely on dividends and other distributions
on equity paid by our Operating Subsidiary in Hong Kong to fund any cash and financing requirements we may have, and any limitation on
the ability of our Operating Subsidiary to make payments to us outside of Hong Kong, due to interventions in, or the imposition of restrictions
and limitations on, our or our Operating Subsidiary’s ability by the PRC government to transfer cash in the future could have a
material adverse effect on our ability to conduct business and might materially decrease the value of our Class A Ordinary Shares or cause
them to be worthless.

 

We are a holding company incorporated in the BVI,
and we rely on dividends and other distributions on equity from our Operating Subsidiary in Hong Kong for our cash and financing requirements,
including the funds necessary to pay dividends and other cash distributions to our shareholders and to service any debt we may incur.
If any of our subsidiaries incurs debt on its own behalf in the future, the instruments governing the debt may restrict its ability to
pay dividends or make other distributions to us.

 

Subject to the BVI Act and our Second Amended
and Restated Memorandum and Articles of Association, our Board of Directors may, by resolutions of directors, declare and pay a dividend
to shareholders from time to time and of an amount they think fit if they are satisfied, on reasonable grounds, that, immediately after
the distribution, the value of our assets will exceed our liabilities, and that we shall be able to pay our debts as they fall due in
the ordinary course of business.

 

Under Hong Kong law, dividends could only be paid
out of distributable profits (that is, accumulated realized profits less accumulated realized loss) or other distributable reserves. Dividends
cannot be paid out of share capital. Under the current practice of the Inland Revenue Department of Hong Kong, no tax is payable in Hong
Kong in respect of dividends paid to us. The PRC laws and regulations do not currently have any material impact on transfers of cash from
our Operating Subsidiary to our holding company, our shareholders, and U.S. investors. However, the PRC government may, in the future,
impose restrictions or limitations on our ability to transfer money out of Hong Kong, to distribute earnings and pay dividends to and
from the other entities within our organization, or to reinvest in our business outside of Hong Kong. Such restrictions and limitations,
if imposed in the future, may adversely limit our ability to grow and may affect our ability to receive funds from our operating subsidiary
in Hong Kong. The promulgation of new laws or regulations, or the new interpretation of existing laws and regulations, in each case, that
restrict or otherwise unfavorably impact the ability or way we conduct our business, could require us to change certain aspects of our
business to ensure compliance, which could decrease demand for our services, reduce revenues, increase costs, require us to obtain more
licenses, permits, approvals or certificates, or subject us to additional liabilities. To the extent any new or more stringent measures
are required to be implemented, our business, financial condition, and results of operations could be adversely affected, and such measures
could materially decrease the value of our Class A Ordinary Shares, potentially rendering them worthless.

 

Cre8 China, our subsidiary in Mainland China,
is subject to restrictions on paying dividends or making other payments to us or our Operating Subsidiary.

 

Currently and in the foreseeable future, Cre8
China solely serves and will continue to serve for our marketing and customer support purposes, and does not and will not have substantial
operations nor generate any revenue at all. However, if Cre8 China engages in any revenue-generating activities in the future, the PRC
regulations permit Cre8 China to pay dividends to its respective shareholders only out of their accumulated profits, if any, determined
in accordance with PRC accounting standards and regulations. In addition, Cre8 China is required to set aside at least 10% of its accumulated
profits each year, if any, to fund certain reserve funds until the total amount set aside reaches 50% of its registered capital. Cre8
China, our Mainland China subsidiary, may also, at the respective subsidiary’s discretion, allocate a portion of its after-tax profits
based on its articles of association and PRC accounting standards to certain reserve funds. These reserves are not distributable as cash
dividends. Furthermore, if Cre8 China incurs debt on its own behalf in the future, the instruments governing the debt may restrict its
ability to pay dividends or make other payments to us. Any limitation on the ability of our Mainland China subsidiary to distribute dividends
or to make payments to us may restrict our ability to satisfy our future liquidity requirements.

 

 

In addition, the Enterprise Income Tax Law and
its implementation rules provide that a withholding tax rate of up to 10% will be applicable to dividends payable by PRC companies to
non-PRC-resident enterprises unless otherwise exempted or reduced according to treaties or arrangements between the PRC central government
and governments of other countries or regions where the non-PRC-resident enterprises are incorporated.

 

If Cre8 China would have engaged in any revenue
generating activities in the future, and if we or our subsidiaries are deemed by the PRC tax authorities as a PRC tax resident enterprise
for tax purposes, any dividends we pay to our non-PRC resident shareholders may be regarded as China-sourced income and as a result, may
be subject to PRC withholding tax at a rate of up to 10.0%. Pursuant to the Arrangement between Mainland China and the Hong Kong Special
Administrative Region for the Avoidance of Double Taxation and Tax Evasion on Income, or the Double Tax Avoidance Arrangement, the 10%
withholding tax rate may be reduced to 5% if a Hong Kong resident enterprise owns no less than 25% of a PRC entity. However, the 5% withholding
tax rate does not automatically apply and certain requirements must be satisfied, including, without limitation, that (a) the Hong Kong
entity must be the beneficial owner of the relevant dividends; and (b) the Hong Kong entity must directly hold no less than 25% share
ownership in the PRC entity during the 12 consecutive months preceding its receipt of the dividends. In practice, a Hong Kong entity must
obtain a tax resident certificate from the Hong Kong tax authority to apply for the 5% lower PRC withholding tax rate. As the Hong Kong
tax authority will issue such a tax resident certificate on a case-by-case basis, we cannot be certain that we will be able to obtain
the tax resident certificate from the relevant Hong Kong tax authority and enjoy the preferential withholding tax rate of 5% under the
Double Taxation Arrangement with respect to any dividends to be paid by Cre8 China to our Operating Subsidiary, Cre8 Hong Kong. Moreover,
Cre8 Hong Kong may be subject to additional restrictions and government regulations if the Chinese government were to impose new laws
and regulations or exert more control over our business activities in Hong Kong.

 

PRC regulation on loans to, and direct investment
in, PRC entities by offshore holding companies and governmental control in currency conversion may delay or prevent us from making loans
to or making additional capital contributions to our Cre8 China, our Mainland China subsidiary.

 

Any funds we transfer to Cre8 China, our Mainland
China subsidiary, either as a shareholder loan or as an increase in registered capital, are subject to approval by or registration with
relevant governmental authorities in China. According to the relevant PRC regulations on foreign invested enterprises in China, capital
contributions to Cre8 China are subject to registration with the State Administration for Market Regulation or its local counterpart and
registration with a local bank authorized by the SAFE. In addition, (i) any foreign loan procured by Cre8 China is required to be registered
with the SAFE or its local branches and (ii) any of Cre8 China may not procure loans which exceed the difference between its total investment
amount and registered capital or, as an alternative, only procure loans subject to the calculation approach and limitation as provided
by the People’s Bank of China. Additionally, any medium or long-term loans to be provided by us to Cre8 China must be registered
with the National Development and Reform Commission and SAFE or its local branches. We may not be able to obtain these government approvals
or complete such registrations in a timely manner, or at all, with respect to future capital contributions or loans by us to Cre8 China.
Moreover, Cre8 China may be subject to additional restrictions and government regulations if the Chinese government were to impose new
laws and regulations or exert more control over Hong Kong’s business activities. If we fail to receive such approvals or complete
such registration or filing, our ability to use the proceeds of future offerings to capitalize our PRC operations may be negatively affected,
which could adversely affect our liquidity and our ability to fund and expand our business.

 

SAFE promulgated the Notice of the State Administration
of Foreign Exchange on Reforming the Administration of Foreign Exchange Settlement of Capital of Foreign-invested Enterprises, or SAFE
Circular 19, effective on June 1, 2015 and was amended on December 30, 2019, in replacement of the Circular on the Relevant
Operating Issues Concerning the Improvement of the Administration of the Payment and Settlement of Foreign Currency Capital of Foreign-Invested
Enterprises, the Notice from the State Administration of Foreign Exchange on Relevant Issues Concerning Strengthening the Administration
of Foreign Exchange Businesses, and the Circular on Further Clarification and Regulation of the Issues Concerning the Administration of
Certain Capital Account Foreign Exchange Businesses. According to SAFE Circular 19, the flow and use of the RMB capital converted
from foreign currency-denominated registered capital of a foreign-invested company is regulated such that RMB capital may not be used
for the issuance of RMB entrusted loans, the repayment of inter-enterprise loans or the repayment of bank loans that have been transferred
to a third party. Although SAFE Circular 19 allows RMB capital converted from foreign currency-denominated registered capital of a foreign-invested
enterprise to be used for equity investments within the PRC, it also reiterates the principle that RMB converted from the foreign currency-denominated
capital of a foreign-invested company may not be directly or indirectly used for purposes beyond its business scope. Thus, it is unclear
whether the SAFE will permit such capital to be used for equity investments in the PRC in actual practice. The SAFE promulgated the Notice
of the State Administration of Foreign Exchange on Reforming and Standardizing the Foreign Exchange Settlement Management Policy of Capital
Account, or SAFE Circular 16, effective on June 9, 2016, which reiterates some of the rules set forth in SAFE Circular 19,
but changes the prohibition against using RMB capital converted from foreign currency-denominated registered capital of a foreign-invested
company to issue RMB entrusted loans to a prohibition against using such capital to grant loans to non-associated enterprises. Violations
of SAFE Circular 19 and SAFE Circular 16 could result in administrative penalties. SAFE Circular 19 and SAFE Circular 16 may significantly
limit our ability to transfer any foreign currency it holds, including the net proceeds from our initial public offering or any future
offerings to Cre8 China, which may adversely affect our liquidity and our ability to fund and expand our business in the PRC. On October 23,
2019, SAFE issued the Notice of the State Administration of Foreign Exchange on Further Facilitating Cross-border Trade and Investment,
or “SAFE Circular 28,” which, among other things, expanded the use of foreign exchange capital to domestic equity investment
area. Non-investment foreign-funded enterprises are allowed to lawfully make domestic equity investments by using their capital if (i)
such investments do not violate the current Negative List and (ii) the domestic investment projects are authentic and are in compliance
with relevant regulations. However, since SAFE Circular 28 is newly promulgated, it is unclear how SAFE and competent banks will carry
it out in practice.

 

 

In light of the various requirements imposed by
PRC regulations on loans to, and direct investment in, PRC entities by offshore holding companies, we cannot assure you that we will be
able to complete the necessary government registrations or obtain the necessary government approvals on a timely basis, if at all, with
respect to future loans or future capital contributions by us to Cre8 China. If we fail to complete such registrations or obtain such
approvals, our ability to capitalize or otherwise fund our PRC subsidiary may be negatively affected, which could materially and adversely
affect our liquidity and our ability to fund and expand our business.

 

You may face difficulties in protecting
your interests, and your ability to protect your rights through U.S. courts may be limited, because we are incorporated in the BVI.

 

We are incorporated under the laws of the BVI. We
conduct our operations in Hong Kong, outside the United States and substantially all of our assets are located outside the United States.
In addition, all our directors, officers and senior management are located in Hong Kong, and all or a substantial portion of their assets
are located outside of the United States. As a result, it may be difficult or impossible for investors to effect service of process within
the United States upon us or such persons or to enforce judgments obtained in United States courts against them or against us, including
judgments predicated upon the civil liability provisions of the securities laws of the United States or any state thereof. Even if you
are successful in bringing an action of this kind, the laws of the BVI or Hong Kong could render you unable to enforce a judgment
against our assets or the assets of our directors and officers.

 

There are also uncertainties as to whether the
courts of the BVI would:

 

●recognize or enforce against
us judgments of courts of the United States based on certain civil liability provisions of U.S. securities laws; and

 

●entertain original actions
brought in each respective jurisdiction against us or our Directors or officers predicated upon the securities laws of the United States
or any state in the United States.

 

The U.S. and the BVI do not have a treating
providing for reciprocal recognition and enforcement of judgments of courts of the U.S. in civil and commercial matters and that
a final judgment for the payment of money rendered by any general or state court in the U.S. based on civil liability, whether or
not predicated solely upon the U.S. federal securities laws would not be enforceable in the BVI. A final and conclusive judgment
obtained in U.S. federal or state courts under which a sum of money is payable as compensatory damages (i.e., not being a sum claimed
by a revenue authority for taxes or other charges of a similar nature by a governmental authority, or in respect of a fine or penalty
or multiple or punitive damages) may be the subject of an action on a debt in the court of the BVI under the common law doctrine of obligation.
Furthermore, it is uncertain that BVI courts would: (i) recognize or enforce judgments of U.S. courts obtained in actions against
us or our directors or officers predicated upon the civil liability provisions of the U.S. federal securities laws; or (ii) entertain
original actions brought against us or other persons predicated upon the Securities Act.

 

There is also uncertainty as to whether the courts of Hong Kong would (i) recognize or enforce judgments of the U.S. courts
obtained against us, our subsidiaries, or our directors or officers predicated upon the civil liability provisions of the securities laws
of the U.S. or any state in the U.S. or (ii) entertain original actions brought in Hong Kong against us, our subsidiaries
or our directors or officers predicated upon the securities laws of the U.S. or any state in the U.S.

 

A judgment of a court in the U.S. predicated
upon U.S. federal or state securities laws may be enforced in Hong Kong at common law by bringing an action in a Hong Kong
court on that judgment for the amount due thereunder, and then seeking summary judgment on the strength of the foreign judgment, provided
that the foreign judgment, among other things, is (1) for a debt or a definite sum of money (not being taxes or similar charges to
a foreign government taxing authority or a fine or other penalty) and (2) final and conclusive on the merits of the claim, but not
otherwise. Such a judgment may not, in any event, be so enforced in Hong Kong if (a) it was obtained by fraud; (b) the
proceedings in which the judgment was obtained were opposed to natural justice; (c) its enforcement or recognition would be contrary
to the public policy of Hong Kong; (d) the court of the U.S. was not jurisdictionally competent; or (e) the judgment
was in conflict with a prior Hong Kong judgment.

 

Hong Kong has no arrangement for the reciprocal
enforcement of judgments with the U.S. As a result, there is uncertainty as to the enforceability in Hong Kong, in original
actions or in actions for enforcement, of judgments of the U.S. courts of civil liabilities predicated solely upon the federal securities
laws of the U.S. or the securities laws of any State or territory within the U.S. You may incur additional costs and procedural
obstacles in effecting service of legal process, enforcing foreign judgments or bringing actions in Hong Kong against our subsidiaries,
or our management named in the annual report, as judgments entered in the U.S. can be enforced in Hong Kong only at common law.

 

 

The laws of BVI provide limited protections
for minority shareholders, so minority shareholders will not have the same options as to recourse in comparison to the U.S if the shareholders
are dissatisfied with the conduct of our affairs.

 

Under the laws of the BVI, there is limited statutory
protection of minority shareholders other than the provisions of the BVI Act dealing with shareholder remedies. The principal protections
under BVI statutory law are derivative actions, actions brought by one or more shareholders for relief from unfair prejudice, oppression
and unfair discrimination and/or to enforce the BVI Act or the Second Amended and Restated Memorandum and Articles of Association. Shareholders
are entitled to have the affairs of the company conducted in accordance with the BVI Act and the Second Amended and Restated Memorandum
and Articles of Association, and are entitled to payment of the fair value of their respective shares upon dissenting from certain enumerated
corporate transactions.

 

There are common law rights for the protection
of shareholders that may be invoked, largely dependent on English company law, since the common law of the BVI is limited. Under the general
rule pursuant to English company law known as the rule in Foss v. Harbottle, a court will generally refuse to interfere with the management
of a company at the insistence of a minority of its shareholders who express dissatisfaction with the conduct of the company’s affairs
by the majority or the board of directors. However, every shareholder is entitled to seek to have the affairs of the company conducted
properly according to BVI law and the constitutional documents of the company. As such, if those who control the company have persistently
disregarded the requirements of the BVI law and the constitutional documents of the company, then the courts may grant relief. Generally,
the areas in which the courts will intervene are the following: (i) an act complained of which is outside the scope of the authorized
business or is illegal or not capable of ratification by the majority; (ii) acts that constitute fraud on the minority where the
wrongdoers control the company; (iii) acts that infringe or are about to infringe on the personal rights of the shareholders, such
as the right to vote; or (iv) where the company has not complied with provisions requiring approval of a special or extraordinary
majority of shareholders. This means that even if shareholders were to sue us successfully, they may not be able to recover anything to
make up for the losses suffered.

 

Under the laws of the BVI, the rights of minority
shareholders are protected by provisions of the BCA dealing with shareholder remedies and other remedies available under common law (in
tort or contractual remedies). The principal protection under statutory law is that shareholders may bring an action to enforce the constitutional
documents of the company (i.e. the Amended and Restated Memorandum and Articles of Association) as shareholders are entitled to have the
affairs of the company conducted in accordance with the BCA and the Amended and Restated Memorandum and Articles of Association of the
company. A shareholder may also bring an action under statute if he feels that the affairs of the company have been or will be carried
out in a manner that is unfairly prejudicial or discriminating or oppressive to him. The BCA also provides for certain other protections
for minority shareholders, including in respect of investigation of the company and inspection of the company books and records. There
are also common law rights for the protection of shareholders that may be invoked, largely dependent on English common law, since the
common law of the BVI for business companies is limited.

 

As a result of all of the above, our public shareholders
may have more difficulty in protecting their interests in the face of actions taken by our management, members of the board of directors
or controlling shareholders than they would as public shareholders of a company incorporated in the United States.

 

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

 

As a BVI company to be listed on the Nasdaq Capital
Market, we are subject to the Nasdaq Capital Market listing standards. However, the Nasdaq Capital Market rules permit a foreign private
issuer like us to follow the corporate governance practices of its home country. Certain corporate governance practices in the BVI, which
is our home country, may differ significantly from the Nasdaq Capital Market listing standards. We intend to rely on home country practices
with respect to our corporate governance. As a result, our shareholders may be afforded less protection than they would otherwise enjoy
under the Nasdaq Capital Market listing standards applicable to U.S. domestic issuers.

 

Risks Related to our Class A Ordinary Shares

 

Our Class A Ordinary
Shares may be delisted or prohibited from being traded on a national exchange under the Holding Foreign Companies Accountable Act if the
PCAOB is unable to inspect our auditors.

 

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

 

 

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

 

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

 

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

 

Our auditor, WWC, P.C., he independent registered
public accounting firm that issues the audit report included elsewhere in this annual report, as a firm headquartered in California and
registered with the PCAOB, is subject to laws in the United States pursuant to which the PCAOB conducts regular inspections to assess
our auditor’s compliance with the applicable professional standards with the last inspection in 2023, and as of the date of this
annual report, our auditor is not subject to and not affected by to the PCAOB’s December 2021 Determination Report. However, in
the event it is later determined that the PCAOB is unable to inspect or investigate completely the auditor because of a position taken
by an authority in a foreign jurisdiction, such as the PRC authorities, then such lack of inspection could cause trading in the Company’s
securities to be prohibited under the HFCAA, and ultimately result in a determination by a securities exchange to delist the Company’s
securities.

 

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

 

 

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

 

The recent joint statement by the SEC,
proposed rule changes submitted by Nasdaq, and an act passed by the U.S. Senate and the U.S. House of Representatives, all call for additional
and more stringent criteria to be applied to emerging market companies. These developments could add uncertainties to our business operations,
share price and reputation.

 

U.S. public companies that have substantially
all of their operations in China (including in Hong Kong) have been the subject of intense scrutiny, criticism and negative publicity
by investors, financial commentators and regulatory agencies, such as the SEC. Much of the scrutiny, criticism and negative publicity
has centered on financial and accounting irregularities and mistakes, a lack of effective internal controls over financial accounting,
inadequate corporate governance policies or a lack of adherence thereto and, in many cases, allegations of fraud.

 

As a result of these scrutiny, criticism and
negative publicity, the publicly traded stock of many U.S. listed Chinese companies sharply decreased in value and, in some cases, has
become virtually worthless. Many of these companies are now subject to shareholder lawsuits and SEC enforcement actions and are conducting
internal and external investigations into the allegations. It is not clear what effect this sector-wide scrutiny, criticism and negative
publicity will have on us, our business and our share price. If we become the subject of any unfavorable allegations, whether such allegations
are proven to be true or untrue, we will have to expend significant resources to investigate such allegations and/or defend our company.
This situation will be costly and time consuming and distract our management from developing our growth. If such allegations are not
proven to be groundless, we and our business operations will be severely affected and you could sustain a significant decline in the
value of our shares.

 

If we become directly subject to the recent
scrutiny, criticism and negative publicity involving U.S.-listed Chinese companies, we may have to expend significant resources to investigate
and resolve the matter which could harm our business operations, price of our shares and reputation and could result in a loss of your
investment in our stock, especially if such matter cannot be addressed and resolved favorably.

 

Recently, U.S. public companies that have substantially
all of their operations in China, have been the subject of intense scrutiny, criticism and negative publicity by investors, financial
commentators and regulatory agencies, such as the SEC. Much of the scrutiny, criticism and negative publicity has centered around financial
and accounting irregularities and mistakes, a lack of effective internal controls over financial accounting, inadequate corporate governance
policies or a lack of adherence thereto and, in many cases, allegations of fraud. As a result of the scrutiny, criticism and negative
publicity, the publicly traded stock of many U.S. listed Chinese companies has sharply decreased in value and, in some cases, has become
virtually worthless. Many of these companies are now subject to shareholder lawsuits and SEC enforcement actions and are conducting internal
and external investigations into the allegations. It is not clear what effect this sector-wide scrutiny, criticism and negative publicity
will have on our Company, our business and price of our shares. Although substantially all of our operations are based in Hong Kong,
we do have corporate clients who are based in Mainland China. If we become the subject of any unfavorable allegations, whether such allegations
are proven to be true or untrue, we will have to expend significant resources to investigate such allegations and/or defend our Company.
This situation will be costly and time consuming and distract our management from growing our Company.

 

 

The dual-class structure of our Ordinary
Shares has the effect of concentrating voting control with our Controlling Shareholder, Cre8 Investments Limited, which may prevent you
and other shareholders from influencing significant decisions, including the election of directors, amendments to our organizational
documents and any merger, consolidation, sale of all or substantially all of our assets, or other major corporate transaction requiring
shareholder approval.

 

Our authorized and issued Ordinary Shares are
divided into Class A Ordinary Shares and Class B Ordinary Shares.

 

As of the date of this annual report, the Company
is authorized by its Second Amended and Restated Memorandum and Articles of Association to allot a maximum of (i) 27,000,000 Class A
Ordinary Shares of no par value and (ii) 3,000,000 Class B Ordinary Shares of no par value. As of the date of this annual report, there
are currently 1,638,985 Class A Ordinary Shares and 375,000 Class B Ordinary Shares issued and outstanding. Holders of Class A Ordinary
Shares and Class B Ordinary Shares shall at all times vote together as one class on all matters submitted to a vote by the shareholders.
Each Class A Ordinary Share has one (1) vote and each Class B Ordinary Share has twenty (20) votes. The Class B Ordinary Shares are convertible
into Class A Ordinary Shares, in whole or in part, at any time and from time to time at the option of the holder, on the basis of one
Class A Ordinary Share for each Class B Ordinary Share. The holder of Class B Ordinary Shares would have, upon conversion of its Class
B Ordinary Shares into Class A Ordinary Shares, one vote per Class A Ordinary Share held on all matters submitted to a vote of our shareholders.
Class A Ordinary Shares are not convertible into Class B Ordinary Shares under any circumstances.

 

The Class B Ordinary Shares outstanding are held
by Cre8 Investments Limited, a limited liability company incorporated under the laws of the BVI, which is beneficially owned by Mr. Xian
Hong Jordan LEE, Mr. Seng Jin LEE and Mr. Kit Ying SHAM, representing 87.93% of the aggregate voting power of our currently outstanding
Ordinary Shares. Because of the one-to-twenty voting ratio between our Class A and Class B Ordinary Shares, Mr. Xian Hong Jordan LEE,
Mr. Seng Jin LEE, and Mr. Kit Ying SHAM, through Cre8 Investments Limited, control a majority of the combined voting power of our Ordinary
Shares and therefore be able to control all matters submitted to our shareholders for approval so long as the Class B Ordinary Shares
represent at least 51% of the voting power of all outstanding Ordinary Shares. This concentrated control will limit the ability of holders
of Class A Ordinary Shares to influence corporate matters for the foreseeable future. Furthermore, should the Company decide to issue
additional Class A Ordinary Shares in the future, the one-to-twenty voting ratio between the two classes of our ordinary shares will
result in further dilutive effect on the holders of Class A Ordinary Shares.

 

As a result, for so long as Cre8 Investments
Limited owns a controlling or significant voting interest in our Ordinary Shares, it is able to control or significantly
influence, directly or indirectly, and subject to applicable law, all matters affecting us, including:

 

●the election of
directors;

 

●determinations with respect to our
business direction and policies, including the appointment and removal of directors;

 

●determinations with respect to corporate
transactions, such as mergers, business combinations, change in control transactions or the
acquisition or the disposition of assets;

 

●our financing and dividend policy;

 

●determinations with respect to our
tax returns; and

 

●compensation and benefits programs
and other human resources policy decisions.

 

Even if Cre8 Investments Limited were
to dispose of certain of its shares of our Class B Ordinary Shares such that it would control less than a majority of the voting power
of our outstanding Ordinary Shares, it may be able to influence the outcome of corporate actions so long as it retains Class B Ordinary
Shares.

 

Cre8 Investments Limited may
have interests that differ from yours and may vote in a way with which you disagree, and which may be adverse to your interests. Corporate
action might be taken even if other shareholders oppose them. This concentration of ownership may have the effect of delaying, preventing
or deterring a change of control or other liquidity event of our Company, could deprive our shareholders of an opportunity to receive
a premium for their shares of Class B Ordinary Shares as part of a sale or other liquidity event and might ultimately affect the market
price of our Class A Ordinary Shares.

 

 

Furthermore, we cannot predict whether our dual-class
structure will result in a lower or more volatile market price of our Class A Ordinary Shares or in adverse publicity or other adverse
consequences. For example, certain index providers have announced restrictions on including companies with multiple-class share structures
in certain of their indices. In July 2017, FTSE Russell and S&P Dow Jones announced that they would cease to allow most newly public
companies utilizing dual-class capital structures to be included in their indices. Affected indices include the Russell 2000 and the
S&P 500, S&P MidCap 400 and S&P SmallCap 600, which together make up the S&P Composite 1500. Beginning in 2017, MSCI,
a leading stock index provider, opened public consultations on their treatment of dual-class structures and temporarily barred new dual-class
listings from certain of its indices; however, in October 2018, MSCI announced its decision to include equity securities “with
unequal voting structures” in its indices and to launch a new index that specifically includes voting rights in its eligibility
criteria. Under the announced policies, our dual-class capital structure makes us ineligible for inclusion in certain indices, and as
a result, mutual funds, exchange-traded funds and other investment vehicles that attempt to passively track those indices are not expected
to invest in our Class A Ordinary Shares. These policies are still fairly new and it is as of yet unclear what effect, if any, they will
have on the valuations of publicly traded companies excluded from the indices, but it is possible that they may depress these valuations
compared to those of other similar companies that are included. Because of our multi-class structure, we will likely be excluded from
certain of these indices and we cannot assure you that other stock indices will not take similar actions. Given the sustained flow of
investment funds into passive strategies that seek to track certain indices, exclusion from stock indices would likely preclude investment
by many of these funds and could make our Class A Ordinary Shares less attractive to other investors. As a result, the market price of
our Class A Ordinary Shares could be adversely affected.

 

As a “controlled company” under
the rules of the Nasdaq Stock Market LLC, we may choose to exempt our company from certain corporate governance requirements that could
have an adverse effect on our public shareholders.

 

The Controlling Shareholder, Cre8 Investment
Limited, beneficially own the majority of the voting power of our outstanding Ordinary Shares. Under the Rule 4350(c) of the
Nasdaq Stock Market LLC, a company of which more than 50% of the voting power is held by an individual, group or another company is a
“controlled company” and may elect not to comply with certain corporate governance requirements, including the requirement
that a majority of our directors be independent, as defined in the rules of the Nasdaq Stock Market LLC, and the requirement that our
compensation and nominating committees consist entirely of independent directors.

 

Although we do not intend to rely on the “controlled
company” exemption under the Nasdaq listing rules, we could elect to rely on this exemption in the future. If we elect to rely
on the “controlled company” exemption, a majority of the members of our Board of Directors might not be independent directors
and our nominating and compensation committees might not consist entirely of independent directors. Accordingly, during any time while
we remain a controlled company relying on the exemption and during any transition period following a time when we are no longer a controlled
company, you would not have the same protections afforded to shareholders of companies that are subject to all of the Nasdaq Capital
Market corporate governance requirements. Our status as a controlled company could cause our Class A Ordinary Shares to look less
attractive to certain investors or otherwise harm our trading price.

 

We may experience extreme stock price volatility
unrelated to our actual or expected operating performance, financial condition or prospects, making it difficult for prospective investors
to assess the rapidly changing value of our Class A Ordinary Share, and could result in substantial losses to you.

 

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

 

●the financial
projections we may provide to the public, any changes in these projections or our failure
to meet these projections;

 

●actual or anticipated fluctuations
in our operating results;

 

 

●changes in financial estimates by
securities research analysts;

 

●negative publicity, studies or reports
about us, our services, our officers, directors, Controlling Shareholder, other beneficial
owners, our business partners, or our industry;

 

●our capability to catch up with
the technology innovations in the industry, and maintain such technological innovations,
once attained;

 

●announcements by us or our competitors
of acquisitions, strategic partnerships, joint ventures or capital commitments;

 

●additions or departures of key personnel;

 

●fluctuations of exchange rates between
Hong Kong dollar, the Renminbi, and the U.S. dollar;

 

●litigation or regulatory proceedings
involving us, our directors, officers or Controlling Shareholders;

 

●realization of any of the other
risk factors presented in this annual report;

 

●changes in investors’ perception
of our company and the investment environment promptly;

 

●the general market reactions and
financial market fluctuation due to the continuous Russo-Ukraine conflicts;

 

●changes in the economic performance
or market valuations of other financial printing firms;

 

●economic, social and political conditions
in Hong Kong and Mainland China;

 

●the liquidity of the market for
our Class A Ordinary Shares;

 

●release or expiry of lock-up or
other transfer restrictions on our outstanding Class A Ordinary Shares;

 

●sales and perceived potential sales
of additional Class A Ordinary Shares.

 

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

 

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

 

In addition, if the trading volumes of our Class
A Ordinary Shares are low, persons buying or selling in relatively small quantities may easily influence the price of our Class A Ordinary
Shares. This low volume of trades could also cause the price of our Class A Ordinary Shares to fluctuate greatly, with large percentage
changes in price occurring in any trading day session. Holders of our Class A Ordinary Shares may also not be able to readily liquidate
their investment or may be forced to sell at depressed prices due to low volume trading. Broad market fluctuations and general economic
and political conditions may also adversely affect the market price of our Class A Ordinary Shares.

 

 

As a result of this volatility, investors may
experience losses on their investment in our Class A Ordinary Shares. A decline in the market price of our Class A Ordinary Shares also
could adversely affect our ability to issue additional shares of Class A Ordinary Shares or other securities and our ability to obtain
additional financing in the future. No assurance can be given that an active market in our Class A Ordinary Shares will develop or be
sustained. If an active market does not develop, holders of our Class A Ordinary Shares may be unable to readily sell the shares they
hold or may not be able to sell their shares at all.

 

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

 

Volatility in our Class A Ordinary Shares
price may subject us to securities litigation.

 

The market for our Class A Ordinary Shares may
have, when compared to seasoned issuers, significant price volatility and we expect that our share price may continue to be more volatile
than that of a seasoned issuer for the indefinite future. In the past, plaintiffs have often initiated securities class action litigation
against a company following periods of volatility in the market price of its securities. We may, in the future, be the target of similar
litigation. Securities litigation could result in substantial costs and liabilities and could divert management’s attention and
resources.

 

Our Class A Ordinary Shares may be thinly-traded
and you may be unable to sell at or near ask prices or at all if you need to sell your shares to raise money or otherwise desire to liquidate
your shares.

 

Our Class A Ordinary Shares may be “thinly-traded”,
meaning that the number of persons interested in purchasing our Class A Ordinary Shares at or near bid prices at any given time may be
relatively small or non-existent. This situation may be attributable to a number of factors, including the fact that we are relatively
unknown to stock analysts, stock brokers, institutional investors and others in the investment community that generate or influence sales
volume, and that even if we come to the attention of such persons, they tend to be risk-averse and might be reluctant to follow an unproven
company such as ours or purchase or recommend the purchase of our shares until such time as we became more seasoned. As a consequence,
there may be periods of several days or more when trading activity in our shares is minimal or non-existent, as compared to a seasoned
issuer which has a large and steady volume of trading activity that will generally support continuous sales without an adverse effect
on share price. A broad or active public trading market for our Class A Ordinary Shares may not develop or be sustained.

 

If we fail to meet applicable listing requirements,
Nasdaq may delist our Class A Ordinary Shares from trading, in which case the liquidity and market price of our Class A Ordinary Shares
could decline.

 

We cannot assure you that we will be able to
meet the continued listing standards of Nasdaq in the future. If we fail to comply with the applicable listing standards and Nasdaq delists
our Class A Ordinary Shares, we and our shareholders could face significant material adverse consequences, including:

 

●a limited availability
for market quotations for our Class A Ordinary Shares;

 

●reduced liquidity
with respect to our Class A Ordinary Shares;

 

●a determination that our Class A
Ordinary Share is a “penny stock” which will require brokers trading in our Class
A Ordinary Shares to adhere to more stringent rules and possibly result in a reduced level
of trading activity in the secondary trading market for our Class A Ordinary Shares;

 

●limited amount of news and analyst
coverage; and

 

●a decreased ability to issue additional
securities or obtain additional financing in the future.

 

 

On October 3, 2025, the Company received a formal
notification from the staff (the “Staff”) of the Listing Qualifications Department of The Nasdaq Stock Market LLC stating
that the Company was not in compliance with Nasdaq Listing Rule 5550(a)(2), which requires a minimum bid price of US$1.00 per share for
at least 30 consecutive business days (the “Minimum Bid Price Requirement”). The Company was granted a 180-day compliance
period, through April 1, 2026, to regain compliance with the Minimum Bid Price Requirement.

 

On January 15, 2026, the Board of Directors of
the Company approved a reverse stock split of all of the Company’s issued and unissued shares, including the Class A Ordinary Shares
with no par value and Class B Ordinary Shares with no par value, at an exchange ratio of one (1) share for twelve (12) shares (the “Reverse
Stock Split”). The Reverse Share Split primarily served as a mechanism to regain compliance with the Minimum Bid Price Requirement.
Our Class A Ordinary Shares began trading on an adjusted basis, reflecting the Reverse Share Split, on February 13, 2026, under the existing
ticker symbol “CRE.”

 

On March 2, 2026, the Company received a formal
notification from the Staff indicating that the Company has regained compliance with the Nasdaq Minimum Bid Price Requirement, based
on the determination that the closing bid price of the Company’s Class A Ordinary Shares from February 13, 2026 to February 27,
2026, was at or above $1.00 per share. Accordingly, the Company has regained compliance with Nasdaq Listing Rule 5550(a)(2) and Nasdaq
considers the prior bid price deficiency matter has been closed.

 

The National Securities Markets Improvement Act
of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred
to as “covered securities”. Because we expect that our shares will be listed on Nasdaq, such securities will be covered securities.
Although the states are preempted from regulating the sale of our securities, the federal statute does allow the states to investigate
companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the
sale of covered securities in a particular case. Further, if we were no longer listed on Nasdaq, our securities would not be covered
securities and we would be subject to regulations in each state in which we offer our securities.

 

If we fail to maintain our Nasdaq listing,
we may face increased regulatory burdens and reduced investor protections on over-the-counter markets.

 

Our Class A Ordinary Shares will continue to
be listed and traded on the Nasdaq Capital Market, subject to our compliance with the other listing requirements of the Nasdaq Capital
Market. We cannot assure you that we will not receive other deficiency notifications from Nasdaq in the future. A decline in the closing
price of our Class A Ordinary Shares could result in a breach of the requirements for listing on the Nasdaq Capital Market. If we do
not maintain compliance, Nasdaq could commence suspension or delisting procedures in respect of our Class A Ordinary Shares. The commencement
of suspension or delisting procedures by an exchange remains at the discretion of such exchange and would be publicly announced by the
exchange.

 

If our Class A Ordinary Shares are delisted from
Nasdaq, they would likely trade, if at all, on over-the-counter markets such as the OTCQX, OTCQB or OTC Pink marketplaces. These alternative
markets are generally considered to be less efficient and less liquid than Nasdaq. Trading on the over-the-counter markets could subject
Class A Ordinary Shares and our shareholders to additional risks, including limited availability of market quotations, reduced liquidity,
decreased market-making activity, reduced analyst coverage, and decreased ability to issue additional Class A Ordinary Shares or obtain
additional financing. Additionally, the price of our Class A Ordinary Shares on these markets may be more volatile than on Nasdaq, and
shareholders may find it more difficult to dispose of or obtain accurate price information about our Class A Ordinary Shares.

 

Our share is traded under $5.00 per Class
A Ordinary Share and thus would be known as a penny stock. Trading in penny stocks has certain restrictions and these restrictions could
negatively affect the price and liquidity of our share.

 

The SEC has adopted a number of rules to regulate
“penny stock” that restricts transactions involving stock which is deemed to be penny stock. Such rules include Rules 3a51-1,
15g-1, 15g-2, 15g-3, 15g-4, 15g-5, 15g-6, 15g-7, and 15g-9 under the Exchange Act. These rules may have the effect of reducing the liquidity
of penny stocks. “Penny stocks” generally are equity securities with a price of less than $5.00 per share (other than securities
registered on certain national securities exchanges or quoted on Nasdaq if current price and volume information with respect to transactions
in such securities is provided by the exchange or system). Our Class A Ordinary Shares could be considered to be a “penny stock”
within the meaning of the rules. The additional sales practice and disclosure requirements imposed upon U.S. broker-dealers may discourage
such broker-dealers from effecting transactions in our Class A Ordinary Shares, which could severely limit the market liquidity of such
Class A Ordinary Shares and impede their sale in the secondary market.

 

 

A U.S. broker-dealer selling a penny stock to
anyone other than an established customer or “accredited investor” (generally, an individual with a net worth in excess of
$1,000,000 or an annual income exceeding $200,000, or $300,000 together with his or her spouse) must make a special suitability determination
for the purchaser and must receive the purchaser’s written consent to the transaction prior to sale, unless the broker-dealer or
the transaction is otherwise exempt. In addition, the “penny stock” regulations require the U.S. broker-dealer to deliver,
prior to any transaction involving a “penny stock”, a disclosure schedule prepared in accordance with SEC standards relating
to the “penny stock” market, unless the broker-dealer or the transaction is otherwise exempt. A U.S. broker-dealer is also
required to disclose commissions payable to the U.S. broker-dealer and the registered representative and current quotations for the securities.
Finally, a U.S. broker-dealer is required to submit monthly statements disclosing recent price information with respect to the “penny
stock” held in a customer’s account and information with respect to the limited market in “penny stocks”.

 

The market for “penny stocks” has
suffered in recent years from patterns of fraud and abuse. Such patterns include (i) control of the market for the security by one or
a few broker-dealers that are often related to the promoter or issuer; (ii) manipulation of prices through prearranged matching of purchases
and sales and false and misleading press releases; (iii) “boiler room” practices involving high-pressure sales tactics and
unrealistic price projections by inexperienced sales persons; (iv) excessive and undisclosed bid-ask differentials and markups by selling
broker-dealers; and (v) the wholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated
to a desired level, resulting in investor losses. Our management is aware of the abuses that have occurred historically in the penny
stock market. Although we do not expect to be in a position to dictate the behavior of the market or of broker-dealers who participate
in the market, management will strive within the confines of practical limitations to prevent the described patterns from being established
with respect to our securities.

 

Nasdaq’s newly amended Low Price
Requirement may result in immediate suspension and delisting of our Class A ordinary shares without a cure period if our share price
falls to $0.10 or less for 10 consecutive trading days.

 

On August 22, 2025, Nasdaq filed a proposed rule
change to raise the consequences of failing to satisfy the Low Price Requirement, which was approved by the SEC on an accelerated basis
and became operative on January 19, 2026. Under the amended Low Price Requirement, a failure to meet the continued listing requirement
for minimum bid price shall be determined to exist if a company’s security has a closing bid price of $0.10 or less for 10 consecutive
trading days, regardless of whether the company is under any compliance period specified in Nasdaq Rule 5810(c)(3)(A), and upon such
failure, a delisting determination will be issued under Nasdaq Rule 5810, the security shall be immediately suspended from trading, and
the company shall be ineligible for any compliance period otherwise described in Nasdaq Rule 5810(c)(3)(A). In addition, a request for
a hearings panel review will not stay the trading suspension.

 

If the price of our Class A Ordinary Shares deteriorates
further and falls to $0.10 or less for 10 consecutive trading days, we would be immediately suspended from trading and delisted without
any opportunity to cure the deficiency or stay the suspension pending a hearing. Nasdaq has observed deep financial or operational distress
from companies whose security’s price drops to $0.10 or less for 10 consecutive trading days, and these financial or operational
issues are generally not temporary. This accelerated delisting mechanism creates significant uncertainty for our shareholders and could
result in the sudden and complete loss of a public trading market for our Class A Ordinary Shares.

 

Nasdaq has proposed a new $5 million minimum
market value continued listing requirement that, if approved, could result in immediate suspension and delisting of our Class A ordinary
shares without any cure period or opportunity to regain compliance.

 

On January 13, 2026, Nasdaq proposed new listing
rules requiring companies on the Nasdaq Global and Capital Markets to maintain a minimum Market Value of Listed Securities of at least
$5 million. Under this proposal, if our market value falls below $5 million for 30 consecutive business days, our Class A ordinary shares
would be immediately suspended from trading and delisted from Nasdaq, with no cure period, no compliance period, and no stay of suspension
during any appeal.

 

 

This proposed rule represents a fundamental departure
from Nasdaq’s traditional approach to listing deficiencies. Unlike other continued listing requirements that provide companies
with 180 days or more to regain compliance, the proposed market value requirement would result in immediate and irreversible consequences.
While we could request a hearing before a Nasdaq Listing Qualifications Hearings Panel to appeal a delisting determination, such a request
would not prevent the immediate suspension of our Class A ordinary shares from trading. Furthermore, the Hearings Panel would have extremely
limited discretion and could only reverse the delisting decision if it determines that the initial determination was in error, and the
Panel could not consider evidence that we had subsequently regained compliance or grant us additional time to do so.

 

Nasdaq’s proposal reflects its belief that
once a company’s market value falls below $5 million, the challenges facing that company are generally not temporary and are so
severe that the company is unlikely to regain and sustain compliance for the long term. Nasdaq further believes it is difficult to maintain
fair and orderly markets for such low-value companies. The SEC must decide on the proposal within 45 days of publication in the Federal
Register, unless it extends the review period, creating uncertainty regarding whether and when this rule may become effective.

 

There is a risk that our market value could fall
below $5 million if the proposed rule is adopted. Our market value is calculated as our consolidated closing bid price multiplied by
our total Listed Securities. Factors that could cause our market value to fall below the proposed threshold include continued stock price
decline, lack of investor interest, adverse market conditions, negative developments in our business operations, dilutive financing transactions,
or broader market volatility affecting microcap companies. If we are simultaneously addressing our existing minimum bid price deficiency
when the proposed rule becomes effective, we could face multiple overlapping listing threats that compound the risk of delisting.

 

This proposal is part of a broader trend of Nasdaq
tightening listing standards for small issuers, including recent rules granting Nasdaq discretion to deny initial listings based on susceptibility
to manipulative trading and other market value-based requirements. This increasingly stringent regulatory environment creates greater
challenges for microcap companies like us to maintain public listings.

 

If the proposed $5 million market value continued
listing requirement is approved and we subsequently fail to maintain the required market value for 30 consecutive business days, our
Class A Ordinary Shares would be immediately suspended and delisted from Nasdaq with no opportunity to cure the deficiency, which would
have severe adverse consequences for our business, our ability to raise capital, and the liquidity and value of our shareholders’
investments.

 

If securities or industry analysts do not
publish research or reports about us or the business of our subsidiaries, or if they publish a negative report regarding our Class A
Ordinary Shares, the price of our Class A Ordinary Shares and trading volume could decline.

 

The trading market for our Class A Ordinary Shares
may depend in part on the research and reports that industry or securities analysts publish about us or the business of our subsidiaries.
We do not have any control over these analysts. If one or more of the analysts who cover us downgrade us, the price of our Class A Ordinary
Shares would likely decline. If one or more of these analysts cease coverage of our Company or fail to regularly publish reports on us,
we could lose visibility in the financial markets, which could cause the price of our Class A Ordinary Shares and the trading volume
to decline.

 

Future issuances of our Class B Ordinary
Shares may be dilutive to the voting power of our Class A Ordinary Shareholders.

 

Future issuances of our Class B Ordinary Shares,
which can be approved by our Board of Directors, could result in dilution to existing holders of our Class A Ordinary Shares. Such issuances,
or the perception that such issuances may occur, could depress the market price of the Class A Ordinary Shares.

 

 

The sale or availability for sale of substantial
amounts of our Class A Ordinary Shares could adversely affect their market price.

 

Sales of substantial amounts of our Class A Ordinary
Shares in the public market could adversely affect the market price of our Class A Ordinary Shares and could materially impair our ability
to raise capital through equity offerings in the future. Shares held by our existing shareholders may be sold in the public market in
the future, subject to the restrictions in Rule 144 and Rule 701 under the Securities Act and the applicable lock-up agreements, if any.
We cannot predict what effect, if any, market sales of securities held by our significant shareholders or any other shareholder or the
availability of these securities for future sale will have on the market price of our Class A Ordinary Shares. 

 

Because the amount, timing, and whether
or not we distribute dividends at all are entirely at the discretion of our board of directors, you must rely on the price appreciation
of our Class A Ordinary Shares for return on your investment.

 

Our board of directors has complete discretion
as to whether to distribute dividends. In addition, our shareholders may by ordinary resolution, declare a dividend, but no dividend
may exceed the amount recommended by our board of directors. In either case, all dividends are subject to certain restrictions under
the BVI law, namely, the Company may only pay dividends if we are solvent immediately after the dividend payment in the sense that the
value of our assets will exceed our liabilities and we will be able to pay our debts as they become due.

 

We currently intend to retain all remaining funds
and future earnings, if any, for the operation and expansion of our business and do not anticipate declaring or paying any further dividends
in the foreseeable future. Any future determination related to our dividend policy will be made at the discretion of our board of directors
after considering our financial condition, results of operations, capital requirements, contractual requirements, business prospects
and other factors the board of directors deems relevant, and will be subject to the restrictions contained in any future financing instruments.

 

Even if our board of directors decides to declare
and pay dividends, the timing, amount and form of future dividends, if any, will depend on, among other things, our future results of
operations and cash flow, our capital requirements and surplus, the amount of distributions, if any, received by us from our subsidiaries,
our financial condition, contractual restrictions and other factors deemed relevant by our board of directors. Accordingly, the return
on your investment in our Class A Ordinary Shares will likely depend entirely upon any future price appreciation of our Class A Ordinary
Shares. We cannot assure you that our Class A Ordinary Shares will appreciate in value or even maintain the price at which you purchased
the Class A Ordinary Shares. You may not realize a return on your investment in our Class A Ordinary Shares and you may even lose your
entire investment in our Class A Ordinary Shares.

 

We are a foreign private issuer within
the meaning of the rules under the Exchange Act, and as such we are exempt from certain provisions applicable to U.S. domestic
public companies.

 

Because we qualify as a foreign private issuer
under the Exchange Act, we are exempt from certain provisions of the securities rules and regulations in the United States
that are applicable to U.S. domestic issuers, including:

 

●the rules under
the Exchange Act requiring the filing with the SEC of quarterly reports on Form 10-Q or current
reports on Form 8-K;

 

●the sections of
the Exchange Act regulating the solicitation of proxies, consents, or authorizations in respect
of a security registered under the Exchange Act; and

  

●the selective
disclosure rules by issuers of material nonpublic information under Regulation FD.

 

 

We are required to file an annual report on Form 20-F within
four months of the end of each fiscal year. Press releases relating to financial results and material events will also be furnished
to the SEC on Form 6-K. Beginning March 18, 2026, members of our board of directors, executive board members and senior management
are subject to short-swing profit and insider trading reporting obligations under Section 16 of the Exchange Act. They are also subject
to the obligations to report changes in share ownership under section 13 of the Exchange Act and related SEC rules. However, the information
we are required to file with or furnish to the SEC will be less extensive and less timely compared to that required to be filed with
the SEC by U.S. domestic issuers. As a result, you may not be afforded the same protections or information that would be made available
to you were you investing in a U.S. domestic issuer.

 

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

 

We are a foreign private issuer,
and therefore, we are not required to comply with all of the periodic disclosure and current reporting requirements of the Exchange Act.
The determination of foreign private issuer status is made annually on the last business day of an issuer’s most recently completed
second fiscal quarter. We would lose our foreign private issuer status if, for example, more than 50% of our shares are directly or indirectly
held by residents of the United States and we fail to meet additional requirements necessary to maintain our foreign private issuer status.
If we lose our foreign private issuer status on this date, we will be required to file with the SEC periodic reports and registration
statements on U.S. domestic issuer forms, which are more detailed and extensive than the forms available to a foreign private issuer.
We will also have to mandatorily comply with U.S. federal proxy requirements, and our officers, directors and principal shareholders
will become subject to the short-swing profit disclosure and recovery provisions of Section 16 of the Exchange Act. On December 18, 2025,
President Trump signed into law the Holding Foreign Insiders Accountable Act (HFIAA), which eliminates the exemption to comply with Section
16 of the Exchange Act. The new law took effect on March 18, 2026. Directors and officers of foreign private issuers will be required
to publicly report their ownership in, and transactions involving, the applicable foreign private issuer’s securities to the SEC
on Forms 3, 4, and 5.

 

In addition, we will lose our ability to rely
upon exemptions from certain corporate governance requirements under the Nasdaq rules. As a U.S. listed public company that is not a
foreign private issuer, we will incur significant additional legal, accounting and other expenses that we will not incur as a foreign
private issuer, and accounting, reporting and other expenses in order to maintain a listing on a U.S. securities exchange.

 

If we are classified as a passive foreign
investment company, U.S. taxpayers who own our Class A Ordinary Shares may have adverse U.S. federal income tax consequences.

 

A non-U.S. corporation such as ourselves will
be classified as a passive foreign investment company, which is known as a PFIC, for any taxable year if, for such year, either:

 

●at least 75% of
our gross income for the year is passive income; or

 

●the average percentage
of our assets (determined at the end of each quarter) during the taxable year which produce
passive income or which are held for the production of passive income is at least 50%.

 

Passive income generally includes dividends,
interest, rents and royalties (other than rents or royalties derived from the active conduct of a trade or business) and gains from the
disposition of passive assets.

 

If we are determined to be a PFIC for any taxable
year (or portion thereof) that is included in the holding period of a U.S. taxpayer who holds our Ordinary Shares, the U.S. taxpayer
may be subject to increased U.S. federal income tax liability and may be subject to additional reporting requirements. With the amount
of cash we raised in our past offerings, together with any other assets held for the production of passive income, it is possible that,
for any subsequent year, more than 50% of our assets may be assets which produce passive income. It is believed we are not a PFIC for
the taxable year ending December 31, 2025. We will continue to make this determination following the end of any particular tax year.

 

The classification of certain of our income as
active or passive, and certain of our assets as producing active or passive income, and hence whether we are or will become a PFIC, depends
on the interpretation of certain United States Treasury Regulations as well as certain IRS guidance relating to the classification of
assets as producing active or passive income. Such regulations and guidance are potentially subject to different interpretations. If
due to different interpretations of such regulations and guidance the percentage of our passive income or the percentage of our assets
treated as producing passive income increases, we may be a PFIC in one of more taxable years.

 

 

For a more detailed discussion of the application
of the PFIC rules to us and the consequences to U.S. taxpayers if we were determined to be a PFIC, see “Item 10. Additional Information
— 10.E. Taxation — Material United States Federal Income Tax Considerations — Passive Foreign Investment Company
Considerations.”

 

We are an “emerging growth company”
within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available to emerging
growth companies, this could make it more difficult to compare our performance with other public companies.

 

We are an “emerging growth company”
within the meaning of the Securities Act, as modified by the Jumpstart Our Business Startups (“JOBS”) Act. Section 102(b)(1)
of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until
private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class
of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS
Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging
growth companies but any such an election to opt out is irrevocable. We have elected not to opt out of such extended transition period,
which means that when a standard is issued or revised, and it has different application dates for public or private companies, we, as
an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This
may make comparison of our financial statements with another public company which is neither an emerging growth company nor an emerging
growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences
in accountant standards used.

 

As an “emerging growth company”
under applicable law, we will be subject to lessened disclosure requirements. Such reduced disclosure may make our Class A Ordinary Shares
less attractive to investors.

 

For as long as we remain an “emerging growth
company,” as defined in the JOBS Act, we will elect to take advantage of certain exemptions from various reporting requirements
that are applicable to other public companies that are not “emerging growth companies”, including, but not limited to, not
being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure
obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding
a non-binding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.
Because of these lessened regulatory requirements, our shareholders would be left without information or rights available to shareholders
of more mature companies. If some investors find our Ordinary Shares less attractive as a result, there may be a less active trading
market for our Class A Ordinary Shares and our share price may be more volatile.

 

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

 

We will incur significant legal, accounting and
other expenses as a public company that we did not incur as a private company. The Sarbanes-Oxley Act of 2002, as well as rules subsequently
implemented by the SEC, Nasdaq, impose various requirements on the corporate governance practices of public companies.

 

Compliance with these rules and regulations increases
our legal and financial compliance costs and makes some corporate activities more time-consuming and costly. After we are no longer an
“emerging growth company,” or until five years following the completion of our initial public offering, whichever is earlier,
we expect to incur significant expenses and devote substantial management effort toward ensuring compliance with the requirements of
Section 404 and the other rules and regulations of the SEC. For example, as a public company, we have been required to increase
the number of independent directors and adopt policies regarding internal controls and disclosure controls and procedures. In addition,
we will incur additional costs associated with our public company reporting requirements. It may also be more difficult or costly for
us to find qualified persons to serve on our board of directors or as executive officers as a public company. We are currently evaluating
and monitoring developments with respect to these rules and regulations, and we cannot predict or estimate with any degree of certainty
the amount of additional costs we may incur or the timing of such costs.

 

 

Item
4. Information on the Company

 

4.A. History and Development of the Company

 

Our Corporate History and Structure

 

On September 16, 2006, Cre8 (Greater China) Limited
(“Cre8 Hong Kong”), the Operating Subsidiary, was incorporated as a company with limited liability under the laws of Hong
Kong. On November 5, 2021, Chuangbafang Enterprise Management (Shanghai) Company Limited (“Cre8 China”) was incorporated
under the laws of the PRC as Cre8 Hong Kong’s wholly-owned subsidiary, for the purpose of maintaining a representative office in
Mainland China to conduct marketing and customer support in Mainland China, Since its incorporation, Cre8 China has not actively engaged
in any revenue-generating activities.

 

In December 2023, we completed a series of transactions
effectuating the reorganization of the Cre8 group of companies (the “Reorganization”). As part of the Reorganization, Cre8
Enterprise Limited (“Cre8 BVI”) was incorporated under the laws of BVI on December 4, 2023, as the holding company, and its
wholly-owned intermediate holding company, Cre8 Incorporation Limited (“Cre8 Incorp”) was incorporated on December 6, 2023
under the laws of BVI. On December 4, 2023, the date of the incorporation of Cre8 Enterprise Limited, an aggregate of 10,000 Class A
Ordinary Shares were issued to 15 founding shareholders.

 

Cre8 BVI and Cre8 Incorp are holding companies
and not actively engaging in any business.

 

On December 12, 2023, 5,000,000 ordinary shares,
the entire ownership interests of Cre8 Hong Kong held by Cre8 Investment Limited, were transferred from Cre8 Investments Limited to Cre8
Incorp by way of share exchange, pursuant to the Reorganization Agreement between Cre8 BVI, Cre8 Incorp, and Cre8 Investments
Limited. In exchange of the entire ownership interests of Cre8 Hong Kong, Cre8 BVI allotted and issued 2,500 Class B Ordinary Shares
to Cre8 Investment Limited.

 

Upon completion of the Reorganization, our Operating
Subsidiary, Cre8 Hong Kong, and its subsidiary, Cre8 China, have become indirect wholly-owned subsidiaries of Cre8 BVI, through Cre8
Incorp.

 

On August 13, 2024, Cre8 BVI resolved and
approved a subdivision of each of the issued and unissued Class A Ordinary Share and each of the issued and unissued Class B Ordinary
Share of no par value into 1,800 Class A Ordinary Shares of no par value and 1,800 Class B Ordinary Shares of no par value, respectively.
After the share subdivision took effect on 13 August 2024, Cre8 BVI is authorized to issue a maximum of 360,000,000 shares of no
par value divided into (i) 324,000,000 Class A Ordinary Shares of no par value and (ii) 36,000,000 Class B Ordinary Shares of no par
value, of which 18,000,000 Class A Ordinary Shares and 4,500,000 Class B Ordinary Shares are in issue.

 

Initial Public Offering

 

On July 24, 2025, the Company completed its initial
public offering of 1,450,000 Class A Ordinary Shares at the initial public offering price of US$4.00 per Class A Ordinary Share on the
Nasdaq Capital Market. On July 28, 2025, American Trust Investment Services, Inc., the representative (the “Representative”)
of the underwriters to the Company’s initial public offering, had exercised the over-allotment option in full to purchase an additional
217,500 Class A Ordinary Shares. The gross proceeds received from the initial public offering totalled approximately US$6.67 million.
Company’s Class A Ordinary Shares began trading on July 23, 2025 on the Nasdaq Capital Market under the ticker symbol “CRE.”

 

Nasdaq Listing Rule 5550(a)(2) Deficiency

 

The Company received a written notification on
October 3, 2025 from the Listing Qualifications Department of Nasdaq stating that the Company was not in compliance with Nasdaq Listing
Rule 5550(a)(2), which requires a minimum bid price of US$1.00 per share for at least 30 consecutive business days (the “Minimum
Bid Requirement”). The Company was granted a 180-day compliance period, through April 1, 2026, to regain compliance with the
Minimum Bid Price Requirement. If, at any time before April 1, 2026, the closing bid price for the common stock is at least $1.00 for
a minimum of 10 consecutive business days, the Nasdaq will provide us written confirmation of compliance with the Minimum Bid Price Requirement.

 

 

The
Reverse Share Split

 

On January 15, 2026, the Board of Directors of
the Company approved a reverse stock split of all of the Company’s issued and unissued shares, including the Class A Ordinary Shares
with no par value and Class B Ordinary Shares with no par value, at an exchange ratio of one (1) share for twelve (12) shares (the “Reverse
Stock Split”). The Reverse Stock Split is intended for the Company to regain compliance with the Minimum Bid Requirement.
Pursuant to the BVI Business Companies Act (as amended) and the Company’s Amended and Restated Memorandum and Articles of
Association, the Company’s Board of Directors is authorized to effect the Reverse Stock Split without the approval of the Company’s
shareholders. Accordingly, no shareholder vote, consent or approval is required or will be sought in respect of the Reverse Stock Split.

 

Our Class A Ordinary Shares began trading on
an adjusted basis, reflecting the Reverse Share Split, on February 13, 2026, under the existing ticker symbol “CRE.” The
new CUSIP number following the Reverse Stock Split is G2R63D113.

 

As a result, as of the date of this annual report,
there are 1,638,985 Class A Ordinary Shares and 375,000 Class B Ordinary Shares issued and outstanding.

 

Regained Compliance with Nasdaq Listing
Rule 5550(a)(2)

 

On March 2, 2026, the Company received a formal
notification from the Listing Qualifications Department of the Nasdaq indicating that the Company has regained compliance with the Nasdaq
Minimum Bid Price Requirement, based on the determination that the closing bid price of the Company’s Class A Ordinary Shares from
February 13, 2026 to February 27, 2026, was at or above $1.00 per share, and the prior Minimum Bid Price Deficiency matter is now closed.

 

Acquisition of Upperhand Investment Limited
(“Upperhand”)

 

On March 10, 2026, Cre8 Incorp entered into a
share purchase agreement to acquire 100% of the issued and outstanding shares of Upperhand Investment Limited, a BVI holding company
whose wholly-owned Japanese operating subsidiary, UPPERHAND Japan Limited, provides integrated financial printing services in Japan.
The consideration for the acquisition was US$200,000, paid in full on March 17, 2026, with legal title to the shares of Upperhand transferred
to Cre8 Incorp on April 1, 2026. The Company now owns 100% of the equity interest in Upperhand through Cre8 Incorporation.

 

 

Corporate Structure

 

The following chart illustrates our corporate
structure, including our subsidiaries, as of the date of this Annual Report. The percentages shown on the following chart represent percentages
of equity ownership: 

 

 

Subsidiaries and Business Functions

 

Cre8 Incorporation Limited was incorporated under
the laws of the British Virgin Islands on December 6, 2023. It is a holding company and is not engaging in any business.

 

Cre8 (Greater China) Limited was incorporated
as a company with limited liability under the laws of Hong Kong on September 16, 2006. It provides integrated financial printing services
in Hong Kong. It is our main operating subsidiary and is wholly owned by Cre8 Incorporation Limited.

 

Chuangbafang Enterprise Management (Shanghai)
Company Limited was incorporated under the laws of the PRC on November 5, 2021. It serves as a representative office in Mainland China
for marketing and customer support activities. It is wholly owned by Cre8 (Greater China) Limited.

 

Upperhand Investment Limited was incorporated
under the laws of the British Virgin Islands on June 24, 2024. It is wholly owned by Cre8 Incorporation Limited. It is a holding company
and is not engaging in any business.

 

E-Supply Chain Solutions Limited was incorporated
as a company with limited liability under the laws of Hong Kong on August 10, 2022. It is a holding company and is not engaging in any
business. It is wholly owned by Upperhand.

 

 

UPPERHAND Japan Limited was incorporated under
the laws of Japan on March 15, 2024. It provides integrated financial printing services in Japan. It is wholly owned by E-Supply Chain
Solutions Limited.

 

Corporate Information

 

Our principal executive
office is located at 1/F, China Building, 29 Queen’s Road Central, Hong Kong. The telephone number of our principal executive
office is +852 3693 2688. Our registered agent in the BVI is Ogier Global (BVI) Limited. Our registered office and our registered agent’s
office in the BVI are both located at the office of Ogier Global (BVI) Limited, Ritter House, Wickhams Cay II, PO Box 3170, Road
Town, Tortola VG1110, British Virgin Islands. We maintain a website at https://www.cre8corp.com/. The information contained
on our website is not a part of this annual report. Our agent for service of process in the United States is Cogency Global Inc. located
at 122 East 42nd Street, 18th Floor,
New York, NY 10168. 

 

4.B. Business Overview

 

We provide integrated financial printing services
primarily in Hong Kong through our Operating Subsidiary, Cre8 (Greater China) Limited (“Cre8 Hong Kong”), and, following
our recent acquisition of Upperhand Investment Limited and its wholly-owned Japanese operating subsidiary, UPPERHAND Japan Limited, we
have extended our operations to Japan.

 

Our Hong Kong operations are conducted through
Cre8 Hong Kong, which was founded in 2006. Cre8 Hong Kong provides 24/7 integrated financial printing services for listed companies,
IPO applicants, and private companies in the finance and capital markets in Hong Kong under our brand, “Cre8.” Our Operating
Subsidiary’s services cover concept creation and artwork design, typesetting, proofreading, translation, printing, binding, logistics
arrangement, uploading or making e-Submissions of our customers’ financial reports and compliance documents on the website of the
Stock Exchange and media placements. In addition to these core services, our Operating Subsidiary has expanded its offerings to include
complementary design services such as website design, branding, and content creation for marketing materials. Moreover, it is now providing
technological support to its customers to ensure their compliance with the Listing Rules. On this front, it disseminates and publishes
announcements, circulars, financial reports, and industry news feeds through a website of our “Cre8IR” brand. Owing to the
business nature of our customers, our revenue was principally derived from the provision of printing, media placement, translation and
printing related services from IPO services and non-IPO services.

 

The provision of IPO services by our Operating
Subsidiary generally represents the printing related services in relation to application proof of prospectus, announcement, application
forms and any other ancillary documents issued in connection with an application for listing on the Stock Exchange. The provision of
non-IPO services by our Operating Subsidiary generally represents the printing related services in relation to (i) financial reports,
which primarily comprise announcements, annual reports, interim reports and if applicable, quarterly reports for companies listed on
the Stock Exchange; (ii) compliance documents, which primarily include announcements and/or circulars to be published under various circumstances
for compliance with the requirements under the Listing Rules or GEM Listing Rules; and (iii) ad-hoc projects for customized products
which mainly includes corporate brochures, leaflets, newsletters, marketing materials and calendars etc. As the operations of our Operating
Subsidiary involve transmissions, handling and publication of customer data, information and documents and the nature of which is confidential
and/or price-sensitive, it is the mission of Cre8 Hong Kong to assist its customers to uphold the integrity and confidentiality of their
data, information and documents and ensuring smooth and timely publication thereof in the manner directed by its customers. Hence, our
Operating Subsidiary has adopted a stringent internal control policy focusing on data privacy protection.

 

Our Operating Subsidiary has achieved a number
of certifications, awards and prizes for several consecutive years in recognition of its success and achievements in respect of its services
such as the International ARC Awards and in respect of the annual reports it has produced.

 

 

Business Model

 

Our Operating Subsidiary provides integrated
financial printing services under our brand, “Cre8,” for customers mainly in the financial and capital markets in
Hong Kong. The following chart summarizes the business model of our Group:

 

 

Services

 

Our Operating Subsidiary principally provides
24/7 integrated printing services for customers mainly in the financial and capital markets in Hong Kong under our brand, “Cre8”.
Our Operating Subsidiary’s services mainly include designing the cover, layout, and artwork of documents, typesetting and proofreading,
translation, uploading, printing, and/or logistics arrangement services for listing applicants in respect of listing on the Stock Exchange,
listed companies on the Stock Exchange, and other private companies in the finance and capital market in Hong Kong. Our Operating Subsidiary
engages service providers for all printing works and most translation works, whereby it can focus its resources on its core business
aspects and to utilize its resources more efficiently. As part of our Operating Subsidiary’s integrated services to serve the different
needs of our customers, it also provides ancillary services such as the provision of conference room facilities, which are frequently
used by its customers in the preparation of their applications for listing on the Stock Exchange. Our Operating Subsidiary also records
a small portion of revenue from offering additional design services such as website design, branding, and content creation for marketing
materials, as well as disseminating announcements, circulars, financial reports, and industry news feeds on a website of our “Cre8IR”
brand.

 

Design

 

Our Operating Subsidiary’s design services
mainly include the design of the cover and layout of prospectuses and financial reports. It also participates in ad-hoc design
projects for the design of marketing materials such as corporate brochures, name cards, letter heads, leaflets and newsletters. Our Operating
Subsidiary’s designs have won numerous prizes and awards, which is attributable to the effort of our Creative and Graphic Department.
In general, our Operating Subsidiary’s Creative and Graphic Department commences preparation of the design artworks by discussing
with the customers to understand their requirements and the nature of the intended projects. Our Operating Subsidiary then prepares a
few draft design artworks based on those findings and turns some of the ideas into dummy designs, being physical copies of the proposed
design products. The dummy designs are presented to our customers for selection and further amendments would be made according to customer
feedback if necessary.

 

 

Typesetting and Proofreading

 

Our Operating Subsidiary provides 24-hour typesetting
and proofreading services to meet its customers’ needs and their timelines and place much emphasis on the accuracy, consistency,
and efficiency of our typesetting and proofreading services.

 

Translation

 

Our Operating Subsidiary provides English and
Chinese translation services to its customers through translation service supplier on a project-by-project basis. The supplier’s
translation work will then be reviewed by our in-house translators, particularly customers that are companies listed or IPO applicants
are required to submit their listing documents, financial reports, and compliance documents in both English and Chinese. Our Operating
Subsidiary also provides translation services to customers on an ad-hoc basis. It selects translation companies and freelance translators
as our suppliers based on a number of criteria, including turnaround time, quality and reliability of services, industry reputation and
cost of services.

 

Printing and Binding of Documents and Logistics
Arrangement

 

Our Operating Subsidiary provides printing and
binding services to our customers through its local independent printing service suppliers. The printing process will then be monitored
by our Operating Subsidiary’s Customer Service Department at the printing factories or remotely. Our Operating Subsidiary selects
printing suppliers based on, among others, their turnaround time, quality and reliability of services and cost of services. If necessary,
our Operating Subsidiary also liaises with paper suppliers to select the suitable type of paper for the printing of its customers’
documents and coordinates with its printing service suppliers to ensure that the printing schedules and printing effects meet the requirements
of its customers. Its printing service suppliers are also responsible for delivering the printed documents to locations in Hong Kong
designated by our customers. The printed documents are usually delivered to the recipients designated by our customers, such as the Stock
Exchange, the Securities and Futures Commission (the “HKSFC”), the Central Clearing and Settlement System the “CCASS”),
share registrars, banks, and law firms in Hong Kong. For deliveries to recipients outside Hong Kong, our Operating Subsidiary engages
international couriers to provide the distribution services.

 

Media Placement

 

Our Operating Subsidiary provides media placement
services to our customers, which include the placing of content outputs on the internet and in newspapers. According to the Listing Rules
and the GEM Listing Rules, listed companies on the Stock Exchange are required to submit electronic copies of financial reports and other
compliance documents, such as announcements, circulars and notices, on the website of the Stock Exchange. In respect of this, we perform
e-Submission and upload the documents to the website of the Stock Exchange and other designated websites on behalf of our customers.
We may also publish documents in newspapers upon our customers’ instructions.

 

Products Provided by Our Operating Subsidiary

 

Products provided by our Operating Subsidiary,
which are the documents that our Operating Subsidiary handles for its customers, can be categorized into four types: (i) listing documents,
(ii) financial reports, (iii) compliance documents, and (iv) miscellaneous and marketing materials.

 

 

Details of documents handled by our Operating
Subsidiary are summarized below:

 

Service Category
 
Types of deliverables
 
Examples of documents
 
Details of the documents

IPO services
 
Listing documents
 
Prospectuses and related listing documents
 
Listing documents generally include application proof of prospectus, announcement, application forms and any other ancillary documents issued in connection with an application for listing on the Stock Exchange.

 
 
 
 
 
 
 

 
 
 
 
 
 
As various professional parties are involved in a listing project and correspondences with the Stock Exchange and the HKSFC, there are more rounds of processing in handling listing documents as compared to other documents we handle.

 
 
 
 
 
 
 

Non-IPO services
 
Financial reports
 
Announcements, annual reports, interim reports and if applicable, quarterly reports
 
Companies listed on the Stock Exchange are required to publish announcements
on their financial results, an annual report, interim report and for the GEM listed company, quarterly reports as well.

 
 
 
 
 
 
 

 
 
 
 
 
 
The artwork designs in the financial reports are one of the decisive factors for customers to engage us. Accordingly, our Creative and Graphic Department actively communicates with our customers to understand their requirements and to deliver premium design services.

 
 
 
 
 
 
 

 
 
Compliance documents
 
Announcements, circulars and notices
 

Companies listed on the Stock Exchange are required to publish announcements
and/or circulars under various circumstances for compliance with the requirements under the Listing Rules or GEM Listing Rules within
a prescribed time or on voluntary basis.

 

Under normal circumstances, little design service is required for the
handling of compliance documents but the publication of these documents is usually under tight timetable.

 
 
 
 
 
 
 

 
 
Ad-hoc projects for customized products
 
Corporate brochures, name cards, letter heads, leaflets, newsletters, marketing materials, calendars
 
Ad-hoc projects of our customers for customized products which generally require our design, translation and printing services.

 

Competitive Strengths

 

We believe
that the following strengths differentiate us from our competitors and underpin our ability to maintain and grow our market position
in the Asia-Pacific financial printing market.

 

 

Our Operating Subsidiary has an established
operating history in providing one-stop integrated financial printing services with a strong customer base.

 

Our Operating Subsidiary provides round-the-clock
one-stop integrated financial printing services to our customers, ranging from concept creation and artwork design, typesetting, proofreading,
translation, printing, binding, logistics arrangement, to media placement of content outputs under its brand, “Cre8”.
In addition to these core services, our Operating Subsidiary has expanded its offerings to include complementary design services such
as website design, branding, and content creation for marketing materials. Moreover, our Operating Subsidiary is now providing technological
support to its customers to ensure their compliance with Listing Rules. As part of this support, our Operating Subsidiary disseminates
and publishes announcements, circulars, financial reports, and industry news feeds on a website under our “Cre8IR”
brand. With extensive experience in the industry, we have successfully built up our industry recognitions and have accumulated a solid
customer base in the financial and capital markets in Hong Kong. For the years ended December 31, 2023, 2024, and 2025, we had served
333, 401 and 467 customers, respectively. Customers which are IPO applicants would generally continue to engage services provided by
our Operating Subsidiary after successful listing of their companies on the Stock Exchange and some would become recurring customers
that engages the services offered by our Operating Subsidiary for publication of their financial reports and compliance documents. We
believe that our Operating Subsidiary’s ability to maintain recurring customers demonstrates these customers’ recognition
of its quality service, which we consider as one of the key factors leading to our success in the industry. We believe that the long-established
track record of our Group and industry recognitions in the market allow us to seize more business opportunities and to further develop
and expand our customer base.

 

We have developed a comprehensive and stringent
internal control policy to uphold data security and environmental protection.

 

As our Operating Subsidiary’s customers
are mainly listed companies, IPO applicants and private companies in the financial and capital market in Hong Kong, they are subject
to regulations and supervision of relevant regulatory bodies. Hence, the services provided by our Operating Subsidiary to these customers
would inevitably involve transmission and handling confidential and/or inside information, personal data of our customers or third parties.
We maintain comprehensive data security and confidentiality protocols designed to safeguard the price-sensitive and non-public information
routinely handled in the course of our engagements. These controls, together with our information security infrastructure, are integral
to our ability to earn and retain the confidence of listed company clients, their advisers, and the relevant regulators. To this end,
our Operating Subsidiary has an in-house IT Department and also engages an external IT consultant who handles the servers, firewall,
and other IT systems so that it meets the requirements of its customers. All data and information are disclosed and accessible to the
relevant staff (i.e., personnel who are handling the relevant projects and staff in the IT Department) and users on a need-to-know basis.
Each department shall comply with our in-house rules and policies in relation to information systems security, including but not limited
to, storage, transmission, processing, and destruction of information. Neither we nor our Operating Subsidiary had received any complaint
or dispute on IT matters which would have a material adverse impact on our and our Operating Subsidiary business and operation during
the years ended December 31, 2023, 2024, and 2025.

 

For projects involving confidential and price-sensitive
data printing, we and our subsidiaries have a strict internal data handling procedure to ensure that the confidentiality of privacy data
is protected. In particular, our Operating Subsidiary’s representative would attend the printing factories operated by suppliers
to oversee the printing process to ensure, among others, no leakage of printed documents and the quality of the printed copies of the
documents. We confirm that, during the years ended December 31, 2023, 2024 and 2025, neither we nor our Operating Subsidiary had experienced
any leakage of confidential information that had any material adverse impact on our business and results of operations.

 

Since February 2021, our Operating Subsidiary
has implemented an internal policy to embrace a paperless regime. Under this regime, all processes related to editing prospectuses, reports,
and design no longer rely on the use of physical paper. Instead, our Operating Subsidiary has transitioned to digital platforms and tools
to streamline our workflows. By eliminating the need for physical paper, our Operating Subsidiary not only contributes to environmental
conservation but also enhances collaboration and productivity within its teams and departments. This paperless approach enables it to
effortlessly share, edit, and review documents in real-time, reducing the time and effort previously required for manual handling of
paperwork.

 

We are led by an experienced management
team with over 20 years of industry expertise.

 

We have an experienced, dedicated, and capable
management team led by our Directors, comprising Mr. Sze Ting Cho and Mr. Yuen Chung Davy Li, both of whom have over 20 years
of experience in the financial printing services industry in Hong Kong. Most of our senior officers of our Operating Subsidiary, serving
as the heads of departments including sales and marketing, customer services, design and IT, have joined us for, in average, over 8 years
and have established their business connections in the industry with customers and intermediaries such as financial institutions and
law firms. In addition, our Operating Subsidiary has a team of committed and well-trained frontline staff and supporting staff. Hence,
the collective experience, knowledge and efforts of our and our Operating Subsidiary’s senior management team and staff have contributed
to the stability of our operations to the success of our business.

 

 

Our Operating Subsidiary has stable relationships
with its suppliers.

 

Our Operating Subsidiary engages the services
of suppliers for all printing works and most of its translation works in order to better focus its resources on its core business aspects,
such as marketing, typesetting, proofreading and design, in order to reduce capital investments and operating costs associated with running
a printing facility and a translation team. Accordingly, we engage third-party suppliers, including printing factories, translation companies
and freelance translators (collectively, “suppliers”) to carry out printing and binding works and translation works
in Hong Kong. Our Operating Subsidiary has established strong and close working relationships with its suppliers, 14 of which have maintained
business relationships with our Operating Subsidiary for more than 10 years. However, our Operating Subsidiary has not entered into long-term
or exclusive agreements or arrangements with its suppliers in order to maximize our flexibility.

 

Growth Strategies

 

Our business objectives are to maintain our position
as a one-stop financial printing service provider in Asia. We plan to grow our business through the following business strategies:

 

Increase our scale of operations and expand
our business in Asia

 

We established our business presence in Hong
Kong in 2006, and we currently operate our financial printing services business through our Operating Subsidiary at a business
premise located in a Grade A commercial building in the Central District in Hong Kong (the “Central Office”). The
gross floor area of the current Central Office is approximately 1,367 square meter which has to house not only all staff but also
all hardware and equipment. It provides 11 conference rooms that are fully equipped with advanced multi-media conferencing equipment
and three cozy and spacious customer lounges for customers. Nevertheless, as our customers in Hong Kong generally require their
financial printing services providers to provide them with conference rooms that are fully equipped with advanced multi-media
conferencing equipment and lounges, we believe that having only one business premise in Hong Kong would restrain our business
expansion. We have recently completed our acquisition of Upperhand Investment Limited, and we consider the integration of UPPERHAND
Japan Limited a near-term operational priority. We intend to apply the operational disciplines, quality standards, and client
service model that have defined our Hong Kong business to the Japan platform, with a view to establishing UPPERHAND Japan Limited as
a trusted provider to listed companies and IPO applicants in Japan. We anticipate that meaningful synergies will emerge over time
from shared infrastructure, technology platforms, and management oversight.

 

Our expansion strategy is anchored in the structural growth of Asia-Pacific capital markets and the increasing participation of Asia-Pacific
issuers on major regional exchanges. According to research published by the Hong Kong Stock Exchange in November 2023, Asia-Pacific companies
were dominant in number among non-Greater China issuers listed in Hong Kong from 2014 through the first half of 2023. We believe this
trend reflects a broader deepening of capital market activity across the Asia-Pacific region that creates sustained demand for professional
financial printing and compliance document services. Having established our first presence outside Hong Kong through the acquisition of
UPPERHAND Japan Limited, we will continue to evaluate further expansion opportunities in Asia-Pacific jurisdictions where capital market
development is driving demand for our services, whether through organic investment, strategic acquisition, or partnership. We intend to
be disciplined in our approach, prioritizing opportunities that present clear strategic fit, manageable integration complexity, and a
pathway to profitability within a defined timeframe.

 

Enhance our IT infrastructures for better
service quality and operational efficiency

 

As a financial printing service provider who
needs to deal with confidential and inside information of customers that are mainly listed companies, IPO applicants and other players
in the finance and capital market in Hong Kong, any leakage of information due to the deficiency of IT infrastructure or cyberattacks
may have a significant impact on the financial market and/or customers. We, therefore, believe that a secure and robust IT infrastructure
is crucial to us as a financial printing service provider. Moreover, documents and information handled by our Operating Subsidiary are
time-sensitive. It is imperative that our Operating Subsidiary can swiftly deliver content outputs within a limited time. To achieve
that, improving our and our Operating Subsidiary’s IT systems and infrastructures can also lead to automation of certain process,
eliminate content conversion, shorter lead time and higher efficiency for the business and therefore reducing the overall production
costs. For instance, with advanced IT systems, document access, typesetting, formatting and transfer with higher speed can speed up our
production process. Hence, we consider that investing in IT systems and infrastructures is a crucial business need for our Group to develop
and grow continuously and maintain the competitive position of our group in the industry.

 

 

We plan to enhance the capacity and quality of
our data server mainly through (i) rental of racks in cage to place data servers and private cloud space from a leading telecommunications
provider in Hong Kong; and (ii) installation of private point-to-point networks from our new business premises to our servers. We believe
that, by doing so, we can leverage the technical expertise of the service providers which in turn enable us and our subsidiaries to have
access to a more secure and stable environment for safekeeping important, confidential and inside information of customers. By decentralizing
our data servers to an external data center, service outages could be reduced when there is any relocation, renovation and facility maintenance
in our offices. The installation of private point-to-point networks can streamline our network setting which could improve the overall
operational performance due to faster processing time to different applications.

 

We, through our Operating Subsidiary, offer 24
x 7 around-the-clock services to our customers, ensuring uninterrupted support at all times. Our Operating Subsidiary’s in-house
programming team had developed a project management system that enables our management to remotely monitor the progress and status of
each task in real-time. To further optimize our Operating Subsidiary’s operations, we intend to implement a secure mobile office
system so that our Operating Subsidiary’s employees may access work through their mobile devices. The mobile office system is expected
to allow the staff to respond to the requests of customers more promptly and thus improving customer relationships and service quality
through better communication and operational efficiency. Further, the mobile office system can serve as a contingency in case of any
service disruptions in the Central Office.

 

Regarding the enhancement of the software and
upgrade of hardware equipment for improving the efficiency and quality of services in typesetting and artwork design, we also intend
to implement a human resources and administration system to improve the efficiency of managing internal resources as the system will
allow our Operating Subsidiary to have better control and monitoring on employee records such as payroll, training and leaves, as well
as enhance communications among the management and employees.

 

In light of the above, we are of the view that
the enhancement of the aforementioned IT infrastructures would enable us to further develop our business and strengthen our competitiveness
in the industry.

 

Continue to attract and retain top talent
in the industry

 

To broaden the current sales network and customer
base, we intend to expand and enhance the sales and marketing team of our Operating Subsidiary by recruiting more sales personnel to
facilitate our organic growth by solidifying our existing customer relationships and developing new relationships with potential customers.
In addition, we also plan to recruit more operation staff such as customer service and translation staff for development of our financial
printing services.

 

While the current in-house translation team’s
primary function is quality assurance by reviewing the translation works carried out by external translator, we believe that more corporations
from Mainland China will come to apply for listing on the Stock Exchange after the Mainland China-Hong Kong border has fully re-opened
since February 2023 following the fading out of COVID-19 pandemic, these customers would prefer perusing the Chinese version of their
listing documents and/or compliance documents soon after the draft in English are prepared. Hence, we expect that there will be increased
demand for translators who can deliver quality and speedy translated works. Thus, we aim to increase the capacity of our in-house translation
team by increasing the number of translators so that they can swiftly review the translation works prepared by external translation or
handle the translation works themselves if necessary or under tight time constraints.

 

We aim to attract talent by offering career development
opportunities through internal training and close guidance by senior staff, with a view to enhancing their technical and management skills,
as well as promotion and advancement opportunities.

 

Broaden the customer base through leveraging
synergies between various services

 

We believe that effective sales and marketing strategies are vital
to the expansion of market share. For the years ended December 31, 2023, 2024, and 2025, we had 333, 401 and 467 customers, respectively.
We aim to further enlarge our market share by attracting new customers while retaining existing customers. In this connection, we intend
to leverage on opportunities to cross-sell our integrated services and to provide quality services. Further, we intend to expand our financial
printing-related services by creating website content, producing high-quality corporate videos, making use of XBRL (eXtensible Business
Reporting Language) for business reporting and developing editing and language programs that reduce labor-intensive tasks.

 

 

Customers

 

Our customers are mainly companies listed or
which were/are applying to be listed on the Stock Exchange, and accordingly, our Operating Subsidiary is entrusted to provide services
for the handling of documents derived from the requirements of the Listing Rules and the GEM Listing Rules.

 

Our customers, particularly IPO applicant customers, generally engage
our services on a project-by-project basis, while other customers, such as listed companies in Hong Kong, may retain our Operating Subsidiary
as their financial printer on a yearly basis or for a specific task. For the years ended December 31, 2023, 2024, and 2025, we had
333, 401 and 467 customers, respectively.

 

For the years ended December 31, 2023, 2024,
and 2025, no customers contributed more than 10% of our total revenue on a consolidated basis. We do not over-rely on any major customer.

 

Agreement with Customers on A Project-by-project
Basis

 

Our Operating Subsidiary generally enters into
standard form agreements with IPO applicant customers and listed company customers. Upon receiving their confirmations on the terms of
the agreement, our Operating Subsidiary commences its work. The major terms of a standard form agreement with customers are set out below:

 

Services
offered
 
The type of services and any ancillary
services our Operating Subsidiary provides is explicitly set out in the agreement, such as typesetting, proofreading, translation,
graphic design, printing, binding, logistics arrangement, media placement, and ancillary services such as provision of conference
room and lounges. The services are generally charged by an hourly rate, at a unit price, or a package price depending on the service
nature involved. The agreements also specify the possible additional items and the respective additional charges, such as (i) additional
pages of translation and design; (ii) overtime services; (iii) conversion of document format; (iv) urgent printing services; and
(v) food and beverages.

 
 
 

Specification of the
deliverables
 
The specification of the deliverables, such
as the paper size of the document, number of pages, paper type, color of the documents, binding methods, and the quantity of printed
copies are also set out in the agreement.

 
 
 

Payment terms
 

In relation to the handling of listing documents,
the agreements generally specify the requirement of making deposits (generally approximately 30% of the agreed quotation amount)
prior to the commencement of our works. Our invoices will be issued and the remaining balances should be paid in stages after reaching
certain specified milestones, generally upon the submission of the application proof of the prospectuses and upon the listing of
our customers’ securities on the Stock Exchange.

 

In relation to the handling of the financial
reports and compliance documents, the agreements specify the requirement of payments and the invoices would be issued upon the delivery
of the documents or the completion of the projects.

 
 
 

Credit period
 

For IPO projects, the credit term is generally
within 14 days after invoice date.

 

For non-IPO projects, the credit term is
generally 30 days after delivery of the printed materials.

 

Other Agreements with Customers

 

Some of the customers prefer to adopt their in-house
agreements. Similar to our other contractual arrangements, we negotiate the service terms with such customers prior to entering into
those agreements. The major terms of such agreements would, in general, include at least (i) the services to be provided, (ii) the specifications
of the deliverables to be handled, and (iii) payment terms and credit periods. The details of these major terms are similar to those
included in our Operating Subsidiary’s standard form agreements, and customers who do not adopt the standard form agreements do
not usually obtain more favorable treatment or advantageous agreement terms than other customers who do.

 

 

Pricing Policy

 

Our Operating Subsidiary generally prices its
service and products on a cost-plus basis with reference to commercial factors, such as its price competitiveness, services to be provided,
turnaround speed, and special requirements from customers and its own capacity at the relevant time. Out-of-pocket expenses are first
borne by our Operating Subsidiary and are billed to its customers as service fees after completion of the projects.

 

For listing documents, financial reports, and
some miscellaneous and marketing materials, the price is mainly determined on a project-by-project basis and we provide quotations to
individual customers.

 

For compliance documents, which generally include
announcements and/or circulars that are required to be published timely to meet the Listing Rules or the GEM Listing Rules requirements,
our Operating Subsidiary usually receives draft documents from the customers on an ad-hoc basis and it is generally difficult to accurately
predict the costs at this stage, which are subject to the amount of works to be performed, volume of the final version of the document,
potential overtime charges or urgent printing charges, etc. Hence, our Operating Subsidiary can only provide an indicative price to customers
and issue the final bill, which is based on the incurred costs information and the activities recorded in our system to the customers
upon completion of the project.

 

Our customers, especially IPO applicant customers,
may request for alterations of specifications of documents or order additional services such as overtime services and food and beverages
services. Our Operating Subsidiary usually requests confirmation and acknowledgement from them prior to performing the alterations or
providing the additional services, instead of entering into any supplemental agreements.

 

Upon completion of the projects, our Operating
Subsidiary issues the invoices to customers based on the actual work done and other out-of-pocket expenses, which may differ from the
amount quoted in the quotations or the standard form agreements. Some customers may request a discount on the final bill. In such circumstances,
the head of our Sales and Marketing Department together with our Directors will review and approve the discount based on a number of
factors, including (i) the fees stated in the invoices; (ii) the relationship with the respective customers, particularly whether there
are opportunities for future businesses; and (iii) the amount of services that were provided and the costs involved. For the years ended
December 31, 2023, 2024, and 2025, we did not experience any material disputes with our customers in relation to the pricing policy and
the final price charged.

 

Suppliers

 

Given the nature of our Group’s business,
our major suppliers are printing and translation service providers. For the years ended December 31, 2023, 2024, and 2025, we engaged
independent translators and printing factories for all printing, binding, and translation works. We engage the suppliers on a project-by-project
basis and issue purchase orders accordingly.

 

For the years ended December 31, 2023, 2024,
and 2025, we did not enter into any long-term or exclusive cooperation agreement with any supplier. We believe that this arrangement
is in line with the common practice within the financial printing services industry.

 

Criteria for Selecting Our Suppliers

 

In selecting suppliers, we and our Operating
Subsidiary consider a number of factors, including but not limited to the respective service providers’ (i) availability, (ii)
quality of services, (iii) turnaround speed, and (iv) price competitiveness. We have full discretion with the choice of our suppliers
and it is not necessary to seek the approval of customers prior to engaging suppliers.

 

Arrangements with Our Suppliers

 

We do not enter into any long-term or exclusive cooperation agreement
with any printing and translation service provider. Instead, we engage our suppliers on a project-by-project basis and issue purchase
orders accordingly. For the years ended December 31, 2023, 2024 and 2025, the translation and printing fees amounted to approximately
HK$30.2 million, HK$22.1 million, and HK$31.1 million respectively, which represented approximately 44.2%, 35.6%, and 40.9%, respectively,
of our total cost of services for the same periods. Among the suppliers we engaged for the years ended December 31, 2023, 2024, and
2025, only one supplier contributed more than 10% of the total expense on a consolidated basis in FY2025.

 

 

Regulations

 

Our operations are subject to various laws and
regulations in Hong Kong where we operate. This section sets out summaries of certain aspects of Hong Kong laws and regulations
which are relevant to our Group’s operations and business.

 

Laws and Regulations Related to Our Business
and Operations in Hong Kong

 

Our operations are subject to various laws and
regulations in Hong Kong where we operate. This section sets out summaries of certain aspects of Hong Kong laws and regulations
which are relevant to our Group’s operations and business.

 

Business Registration

 

The Business Registration Ordinance (Chapter 310
of the Laws of Hong Kong) requires that every person carrying on any business shall make application to the Commissioner of Inland
Revenue in the prescribed manner for the registration of that business. The Commissioner of Inland Revenue must register each business
for which a business registration application is made and as soon as practicable after the prescribed business registration fee and levy
are paid and issue a business registration certificate or branch registration certificate for the relevant business or the relevant branch
as the case may be.

 

Supply of Services

 

The Supply of Services (Implied Terms) Ordinance
(Chapter 457 of the Laws of Hong Kong) which aims to consolidate and amend the law with respect to the terms to be implied
in contracts for the supply of services (including a contract for the supply of a service whether or not goods are also transferred or
to be transferred, or bailed or to be bailed by way of hire under the contract) provides that:

 

(a)where the supplier
is acting in the course of a business, there is an implied term that the supplier will carry
out the service with reasonable care and skill; and

 

(b)where the supplier
is acting in the course of a business, the time for service to be carried out is not fixed
by the contract, is not left to be fixed in a manner agreed by the contract or is not determined
by the course of dealing between the parties, there is an implied term that the supplier
will carry out the service within a reasonable time.

 

Where a supplier is dealing with a party to a
contract for supply of service who deals as a consumer, the supplier cannot, by reference to any contract term, exclude or restrict any
liability of his arising under the contract by virtue of the Supply of Services (Implied Terms) Ordinance. Otherwise, where any right,
duty or liability would arise under a contract for the supply of a service by virtue of the Supply of Services (Implied Terms) Ordinance,
it may (subject to the Control of Exemption Clauses Ordinance) be negatived or varied by express agreement, or by the course of dealing
between the parties, or by such usage as binds both parties to the contract.

 

Supply of Goods

 

The Sales of Goods Ordinance (Chapter 26
of the Laws of Hong Kong) which aims to codify the law relating to the sale of goods provides that:

 

(a)under Section 15,
where there is a contract for the sale of goods by description, there is an implied condition
that the goods shall correspond with the description;

 

(b)under Section 16,
where a seller sells goods in the course of a business, there is an implied condition that
the goods supplied under the contract are of merchantable quality, except that there is no
such condition (i) as regards defects specifically drawn to the buyer’s attention
before the contract is made; or (ii) if the buyer examines the goods before the contract
is made, as regards defects which examination ought to reveal; or (iii) if the contract
is a contract for sale by sample, as regards defects which would have been apparent on a
reasonable examination of the sample; and

 

(c)under Section 17,
where there is a contract for sale by sample, there are implied conditions that (i) the
bulk shall correspond with the sample in quality, (ii) the buyer shall have a reasonable
opportunity of comparing the bulk with the sample, and (iii) the goods shall be free
from any defects, rendering them unmerchantable, which would not be apparent on reasonable
examination of the sample.

 

Where any right, duty or liability arises under
a contract of sale of goods by implication of law, it may (subject to the Control of Exemption Clauses Ordinance (Chapter 71 of
the Laws of Hong Kong)) be negatived or varied by express agreement, or by course of dealings between the parties, or by usage if
the usage is such as to bind both parties to the contract.

 

 

Control of Exemption Clauses

 

The Control of Exemption Clauses Ordinance (Chapter 71
of the Laws of Hong Kong), which aims to limit the extent to which civil liability for breach of contract, or for negligence or
other breach of duty, can be avoided by means of contract terms and otherwise, among others, provides that:

 

(a)Under Section 7, a
person cannot by reference to any contract term or to a notice given to persons generally
or to particular persons exclude or restrict his liability for death or personal injury resulting
from negligence and in the case of other loss or damage, a person cannot exclude or restrict
his liability for negligence except in so far as the term or notice satisfies the requirements
of reasonableness.

 

(b)Under Section 8, as
between contracting parties where one of them deals as consumer or on the other’s written
standard terms of business, as against that party, the other cannot by reference to any contract
term (i) when himself in breach of contract, exclude or restrict any liability of his
in respect of the breach, or (ii) claim to be entitled to render a contractual performance
substantially different from that which was reasonably expected of him, or (iii) claim
to be entitled in respect of the whole or any part of his contractual obligation, to render
no performance at all, except in so far as the contract term satisfies the requirement of
reasonableness.

 

(c)Under Section 9, a
person dealing as a consumer cannot by reference to any contract term be made to indemnify
another person (whether a party to the contract or not) in respect of liability that may
be incurred by the other for negligence or breach of contract, except in so far as the contract
term satisfies the requirement of reasonableness; and

 

(d)Under Section 11,
as against a person dealing as consumer, the liability for breach of the obligations arising
under Sections 15, 16 and 17 of the Sales of Goods Ordinance cannot be excluded or restricted
by reference to any contract term, and as against person dealing otherwise than as consumer,
the liability arising under Sections 15, 16 and 17 of the Sales of Goods Ordinance can be
excluded or restricted by reference to a contract term, but only in so far as the terms satisfy
the requirement of reasonableness.

 

Sections 7, 8 and 9 of the Control of Exemption
Clauses Ordinance do not apply to, among others, any contract so far as it relates to the creation or transfer of a right or interest
in any patent, trademark, copyright, registered design, technical or commercial information or other intellectual property, or relates
to the termination of any such right or interest.

 

In relation to a contract term, the requirement
of reasonableness for the purpose of the Control of Exemption Clauses Ordinance is satisfied only if the court or arbitrator determines
that the term was a fair and reasonable one to be included having regarded to the circumstances which were, or ought reasonably to have
been, known to or in the contemplation of the parties when the contract was made.

 

Laws and Regulations Related to Employment

 

Pursuant to Employment Ordinance (Chapter 57
of the Laws of Hong Kong), or the EO, which came into full effect in Hong Kong on September 27, 1968, all employees covered
by the EO are entitled to basic protection under the EO including but not limited to payment of wages, restrictions on wages deductions
and the granting of statutory holidays.

 

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

 

 

Pursuant to Employees’ Compensation Ordinance
(Chapter 282 of the Laws of Hong Kong), or the ECO, which came into full effect in Hong Kong on December 1, 1953,
all applicable employers are required to take out insurance policies to cover their liabilities under the ECO and at common law for injuries
at work in respect of all of their employees. An employer failing to do so may be liable to a fine and imprisonment.

 

Pursuant to Minimum Wage Ordinance (Chapter 608
of the Laws of Hong Kong) (the “MWO”), which came into full effect in Hong Kong on May 1, 2011, an
employee covered by the MWO is entitled to be paid wages no less than the statutory minimum wage rate during the wage period. With effect
from May 1, 2019, the statutory minimum hourly wage rate is HK$37.5. Failure to comply with MWO constitutes an offence under EO.

 

Occupational Safety and Health

 

Pursuant to Occupational Safety and Health Ordinance
(Chapter 509 of the Laws of Hong Kong), which came into full effect on May 23, 1997, is purported to ensure the safety
and health of employees and improve the safety and health standards applicable to certain hazardous processes, plant and substances used
or kept in workplaces. Employers shall as far as reasonably practicable ensure the safety and health of their employees in their workplaces
by: (a) providing and maintaining plant and work systems that do not endanger safety or health; (b) making arrangement for
ensuring safety and health in connection with the use, handling, storage or transport of articles or substances; (c) providing all
necessary information, instruction, training and supervision for ensuring safety and health at work; (d) maintaining the workplace
in a condition that does not endanger safety and health; (e) providing and maintaining safe access to and egress from the workplaces;
and (f) providing and maintaining a reasonably practicable, safe and healthy work environment.

 

Failure to comply with the above provisions constitutes
an offence and the employer is liable on conviction to a fine of HK$200,000. An employer who fails to do so intentionally, knowingly
or recklessly commits an offence and is liable on conviction to a fine of HK$200,000 and to imprisonment for six months.

 

Regulations on Personal Data

 

The Personal Data (Privacy) Ordinance (Chapter 486
of the Laws of Hong Kong), as amended, supplemented or otherwise modified from time to time (‘‘Personal Data (Privacy)
Ordinance’’) places a statutory duty on data users to comply with the requirements of the six data protection principles
contained in Schedule 1 to this ordinance. The Personal Data (Privacy) Ordinance provides that a data user shall not do an act,
or engage in a practice, that contravenes a data protection principle unless the act or practice, as the case may be, is required or
permitted under the Personal Data (Privacy) Ordinance. The six data protection principles are:

 

●Principle 1 — purpose
and manner of collection of personal data;

 

●Principle 2 — accuracy
and duration of retention of personal data;

 

●Principle 3 — use
of personal data;

 

●Principle 4 — security
of personal data;

 

●Principle 5 — information
to be generally available; and

 

●Principle 6 — access
to personal data.

 

The Personal Data (Privacy) Ordinance also gives
data subjects certain rights, inter alia:

 

●the right to be
informed of whether any data user holds their personal data;

 

●the right to be
supplied with a copy of such data; and

 

●the right to request
correction of any data they consider to be inaccurate.

 

 

Non-compliance with a data protection principle
may lead to a complaint to the Privacy Commissioner for Personal Data. A claim for compensation may also be made by a data subject who
suffers damage by reason of a contravention of a requirement under the Personal Data (Privacy) Ordinance.

 

Regulation on Copyright and Intellectual Property

 

Pursuant to the Copyright Ordinance (Chapter 528
of the Laws of Hong Kong), a person may incur civil liability for ‘‘secondary infringement’’ if that person
possesses, sells, distributes or deals with a copy of a work which is, and which he knows or has reason to believe to be, an infringing
copy of the work for the purposes of or in the course of any trade or business without the consent of the copyright owner. The Copyright
Ordinance also imposes criminal liability which provides, among other things, that a person commits an offence if he, without the license
of the copyright owner of a copyright work, makes for sale or hire an infringing copy of the work or possesses an infringing copy of
the work with a view to its being, amongst others, sold or let for hire by any person for the purpose of or in the course of that trade
or business. It also imposes criminal liability against copying service business when a person, for the purpose of or in the course of
a copying service business, possesses a reprographic copy of a copyright work as published in a book, magazine or periodical, being a
copy that is an infringing copy of the copyright work.

 

Pursuant to the Trade Marks Ordinance (Chapter 559
of the Laws of Hong Kong), trademarks must be registered with the Trade Marks Registry of the Intellectual Property Department under
the Trade Marks Ordinance and the Trade Marks Rules (Chapter 559A of the Laws of Hong Kong) in order to enjoy protection by
the laws of Hong Kong. Trademarks registered in other countries or regions are not automatically entitled to protection in Hong Kong.
The owner of a registered trademark is entitled to the rights provided by the Trade Marks Ordinance and is conferred exclusive rights
in the trademark. Any use of the trademark by third parties without the consent of the registered owner is an infringement of the trademark.

 

4.C.
Organizational Structure

 

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

 

Subsidiaries
 
Place of Incorporation

Cre8 Incorporation Limited
 
British Virgin Islands

Cre8 (Greater China) Limited
 
Hong Kong SAR

Chuangbafang Enterprise Management (Shanghai) Company Limited
 
The People’s Republic of China

Upperhand Investment Limited
 
British Virgin Islands

E-Supply Chain Solutions Limited
 
Hong Kong SAR

UPPERHAND Japan Limited
 
Japan

 

 

The following diagram illustrates our corporate
structure, including our subsidiaries and consolidated affiliated entities, as of the date of the issuance of this annual report:

 

 

4.D. Property, Plant and Equipment

 

Properties

 

Our Operating Subsidiary leased an office space
in Hong Kong which serves as our principal executive office. Further, our subsidiary in Mainland China leased a relatively small office
space to provide for our customer service team. We believe that we and our subsidiaries will be able to obtain adequate facilities on
reasonable terms principally through leasing, to accommodate our future expansion plans.

 

Address 
Term 
Gross floor area
(square meter)  
Use of the
property

1/F, China Building, 29 Queen’s Road Central, Hong Kong 
February 1, 2022 – January 31, 2028 
 1,367  
Operating Office

Unit 1B-3, 15/F Garden Square, 968 West Beijing Road, Jingan District, Shanghai, PRC 
August 1, 2021 – July 31, 2027 
 52  
Sales Office

 

 

Intellectual
Property

 

As of the date of this annual report, we have
registered the following trademark:

 

Trademark  
Registered

Owner 
Class 
Place
of
Registration 
Trademark

No.  
Date
of
Registration  
Expiry
Date

  
Cre8 Hong Kong 
35, 38, 40, 41, 42 
Hong Kong 
 300937125  
 August 20, 2007  
August 19, 2027

 

As of the date of this annual report, we have
applied for the registration of the following trademark:

 

Trademark  
Registered

Owner 
Class  
Place
of
Registration 
Trademark

No.  
Date
of Filing

  
Cre8 Hong Kong 
 16, 35, 36, 41  
Hong Kong 
 306019155  
July 25, 2022

 

As of the date of this annual report, we have
registered the following domain names:

 

Domain Name 
Registered Owner 
Date of Registration 
Expiry Date

https://www.cre8corp.com 
Cre8 Hong Kong 
September 5, 2006 
September 5, 2029

http://www.cre8ir.com/ 
Cre8 Hong Kong 
May 21, 2021 
May 21, 2026

 

Item
4A. Unresolved Staff Comments

 

None.

 

 

Item
5. Operating and Financial Review and Prospects

 

5.A.
Operating Results

 

Our overall
revenue increased by HK$27.1 million or 26.1% from approximately HK$103.8 million in FY2024 to approximately HK$130.9 million (USD 16.8
million) in FY2025, which was mainly attributable to the increase in revenue from provision of integrated IPO financial printing services
from approximately HK$32.8 million in FY2024 to approximately HK$63.2 million (USD 8.1 million) in FY2025 as (i) the number of successful
projects increased from 5 in FY2024 to 8 in FY2025, (ii) recognized some high revenue projects and (iii) increased in amount of extra
services requested by clients during the year. Nevertheless, the number of successful projects and the amount of extra services requested
by clients are subject to a number of factors and beyond our control, such as the nature and scope of work requested by clients, and
timing of completion and progress of the IPO projects which are subject to the timing of clearance from the relevant regulators in Hong
Kong. Our revenue from provision of non-IPO financial printing services decreased from approximately HK$71.0 million in FY2024 to approximately
HK$67.8 million (USD 8.7 million) mainly due to the decrease in financial printing services in relation to annual reports from approximately
HK$41.6 million in FY2024 to approximately HK$34.6 million in FY2025 as a result of the effectiveness of paperless listing regime in
Hong Kong, under which we expected that the demand for printed publications would continue to decrease. Our total other incomes, increased
from approximately HK$0.3 million in FY2024 to approximately HK$1.0 million (USD 134,000) in FY2025, which was mainly due to the increase
in bank interest income after receiving funds from IPO.

 

Revenues

 

In FY2023, FY2024 and FY2025, our revenue was principally derived from
the provision of integrated IPO financial printing services and non-IPO financial printing services. The table below sets forth the breakdown
of revenue by service type for the years indicated.

 

For
the years ended December 31, 2023, 2024 and 2025

 

  
For the years ended December 31, 

  
2023  
2024  
2025  
2025 

  
HK$  
HK$  
HK$  
US$ 

Integrated IPO financial printing services 
 34,035,637  
 32,789,688  
 63,157,166  
 8,114,446 

Non-IPO financial printing services: 
    
    
    
   

Annual reports 
 53,021,533  
 41,608,778  
 34,625,309  
 4,448,667 

Circulars 
 8,694,347  
 8,029,862  
 11,907,715  
 1,529,906 

Others 
 19,533,696  
 21,392,075  
 21,242,006  
 2,729,177 

Total non-IPO services 
 81,249,576  
 71,030,715  
 67,775,030  
 8,707,750 

Total 
 115,285,213  
 103,820,403  
 130,932,196  
 16,822,196 

 

Our provision
of integrated IPO financial printing services generally represents the printing related services in relation to application proof of
a prospectus, prospectus, announcement, application forms and any other ancillary documents issued in connection with an application
for listing on the Hong Kong Stock Exchange.

 

In FY2023,
FY2024 and FY2025, our revenue from provision of integrated IPO financial printing services amounted to approximately HK$34.0 million,
HK$32.8 million and HK$63.2 million (USD 8.1 million), representing approximately 29.5%, 31.6% and 48.2% of our total revenue, respectively.

 

Our provision
of non-IPO financial printing services generally represents the printing related services in relation to (i) financial reports, which
primarily comprise announcements, annual reports, interim reports and if applicable, quarterly reports for companies listed on the Stock
Exchange; (ii) circulars to be published under various circumstances for compliance with the requirements under the Listing Rules or
GEM Listing Rules; and (iii) compliance documents, which primarily include announcements or other forms and checklists to be uploaded
through the e-submission system of the Hong Kong Stock Exchange, and ad-hoc projects for customized products which mainly includes corporate
brochures, leaflets, newsletters, marketing materials and calendars etc. In FY2023, FY2024 and FY2025, a majority of our revenue was
principally derived from the provision of non-IPO financial printing services, which amounted to approximately HK$81.2 million, HK71.0
million and HK67.8 million (USD 8.7 million), representing approximately 70.5%, 68.4% and 51.8% of our total revenue, respectively.

 

 

Cost
of Revenue

 

The table
below sets forth the breakdown of cost of revenue by service type for the years indicated.

 

  
For the years ended December 31, 

  
2023  
2024  
2025  
2024 

  
HK$  
HK$  
HK$  
USD 

Integrated IPO financial printing services 
 12,830,143  
 11,072,563  
 24,159,703  
 3,104,044 

Non-IPO financial printing services 
 55,444,139  
 50,355,601  
 51,891,431  
 6,667,021 

Total 
 68,274,282  
 61,428,164  
 76,051,134  
 9,771,065 

 

Our cost
of revenues amounted to approximately HK$68.3 million, HK$61.4 million and HK$76.1 million (USD 9.8 million) in FY2023, FY2024 and FY2025,
respectively. As we provide our integrated financial printing services to our customers for the handling of the documents according to
their requests, our cost of sales attributable to each service type is generally related to the demand for each service type. The cost
of revenue for non-IPO financial printing services contributed the majority of the total cost of services for FY2023, FY2024 and FY2025,
representing approximately 81.2%, 82.0% and 68.2% respectively.

 

The table
below sets forth the breakdown of cost of revenues by nature for the years indicated.

 

  
For the years ended December 31, 

  
2023  
2024  
2025  
2025 

  
HK$  
HK$  
HK$  
US$ 

Staff cost 
 22,124,133  
 24,127,135  
 27,719,122  
 3,561,358 

Depreciation on property and equipment 
 402,421  
 254,962  
 349,246  
 44,871 

Lease expense 
 9,964,742  
 9,553,419  
 7,765,146  
 997,668 

Translation expenses 
 19,496,992  
 15,398,955  
 22,715,684  
 2,918,516 

Printing expenses 
 10,687,486  
 6,747,171  
 8,418,183  
 1,081,570 

Water and electricity supply expenses 
 1,688,236  
 1,502,292  
 888,992  
 114,218 

Repair and maintenance 
 901,076  
 1,188,767  
 1,297,126  
 166,655 

Others 
 3,009,196  
 2,655,463  
 6,897,635  
 886,209 

Total 
 68,274,282  
 61,428,164  
 76,051,134  
 9,771,065 

 

Our cost
of revenues mainly comprised staff cost, depreciation on property and equipment, depreciation on right-of-use assets, translation expenses,
printing expenses and other overheads.

 

Staff
cost mainly represents wages of our staff who provide typesetting and customer service. In FY2023, FY2024 and FY2025, staff cost was
one of our major components of our cost of revenue, which amounted to approximately HK$22.1 million, HK$24.1 million and HK$27.7 million
(US$3.6 million), representing approximately 32.4%, 39.3% and 36.4% of our total cost of revenue, respectively.

 

Depreciation
on property and equipment mainly represents deprecation charge on furniture and fixture, computer and office equipment of our Hong Kong
office.

 

Depreciation
on right-of-use assets mainly represents depreciation charge on right-of-use assets in relation to the leased office space and leased
printing equipment of our Hong Kong office. Translation expenses mainly represent the costs payable to suppliers for translation services.

 

Printing
expenses mainly represent the costs payable to suppliers for printing services.

 

Others
mainly represent outsourced filming costs, food and beverage costs, depreciation charges and other utilities costs directly
attributable to the provision of our printing services.

 

 

Gross
profit

 

The table
below set forth the breakdown of gross profit by service type for the years indicated.

 

  
For the years ended December 31, 2023 

  
Revenue  
Cost of
revenue  
Gross
profit  
Gross profit
margin 

  
HK$  
HK$  
HK$  
% 

Revenue from Integrated IPO financial printing services 
 34,035,637  
 12,830,143  
 21,205,494  
 62.3%

Revenue from non-IPO financial printing services 
 81,249,576  
 55,444,139  
 25,805,437  
 31.8%

Total 
 115,285,213  
 68,274,282  
 47,010,931  
 40.8%

 

  
For the years ended December 31, 2024 

  
Revenue  
Cost of
revenue  
Gross
profit  
Gross profit
margin 

  
HK$  
HK$  
HK$  
% 

Revenue from Integrated IPO financial printing services 
 32,789,688  
 11,072,563  
 21,717,125  
 66.2%

Revenue from non-IPO financial printing services 
 71,030,715  
 50,355,601  
 20,675,114  
 29.1%

Total 
 103,820,403  
 61,428,164  
 42,392,239  
 40.8%

 

  
For the years ended December 31, 2025 

  
Revenue  
Cost of
revenue  
Gross
profit  
Gross
profit  
Gross profit
margin 

  
HK$  
HK$  
HK$  
US$  
% 

Revenue from Integrated IPO financial printing services 
 63,157,166  
 24,159,703  
 38,997,463  
 5,010,403  
 61.7%

Revenue from non-IPO financial printing services 
 67,775,030  
 51,891,431  
 15,883,599  
 2,040,728  
 23.4%

Total 
 130,932,196  
 76,051,134  
 54,881,062  
 7,051,131  
 41.9%

 

Our overall
gross profit amounted to approximately HK$47.0 million, HK$42.4 million and HK$54.9 million (USD 7.1 million) in FY2023, FY2024 and FY2025,
respectively. We recorded overall gross profit margin of approximately 40.8%, 40.8% and 41.9% for the corresponding years. The change
in overall gross profit and gross profit margin were generally in line with our change in our overall revenue during the years and periods.

 

Our gross
profit and gross profit margin are mainly affected by factors including, among others, (i) size and complexity of projects; (ii) the
agreed scope of work and the amount of extra service required by each client out of the originally agreed scope of work as extra service
would be charged at a comparatively higher margin than those agreed in initial agreed contracts; (iii) the effectiveness of cost control
in each project by us; and (iv) the progress of individual projects which may be affected by numerous factors including but not limited
to the vetting progress by the regulatory bodies such as the Hong Kong Stock Exchange.

 

Selling
and marketing expenses

 

The table
below sets forth the breakdown of selling and marketing expenses for the years indicated.

 

  
For the years ended December 31, 

  
2023  
2024  
2025 

  
HK$  
HK$  
HK$  
USD 

Employee compensation and benefits 
 9,325,107  
 8,379,333  
 18,865,185  
 2,423,803 

Commission 
 6,231,376  
 5,708,609  
 5,236,726  
 672,816 

Others 
 2,767,204  
 1,905,024  
 3,227,231  
 414,636 

Total 
 18,323,687  
 15,992,966  
 27,329,142  
 3,511,255 

 

Our selling
and marketing expenses were approximately HK$18.3 million, HK$16.0 million and HK$27.3 million (USD 3.5 million) in FY2023, FY2024 and
FY2025, representing approximately 15.9%, 15.4% and 20.9% of the total revenue for the corresponding years, respectively.

 

Employee
compensation and benefits mainly represented salaries, retirement benefit scheme contributions and employee benefits of staff in the
sales department.

 

 

Commission
represented commission payable to staff in the sales department, which is calculated based on the profitability of projects successfully
completed by each salesperson.

 

Others
mainly represented advertising and promotion expenses, entertainment expenses and travelling expenses incurred for business development,
networking and marketing events.

 

General and administrative expenses

 

The table below sets forth the breakdown of general and administrative
expenses for the years indicated.

 

  
For the years ended December 31, 

  
2023  
2024  
2025 

  
HK$  
HK$  
HK$  
USD 

Employee compensation and benefits 
 5,894,041  
 5,460,334  
 7,772,017  
 998,550 

Depreciation on property and equipment 
 765,091  
 451,729  
 32,997  
 4,239 

Lease expense 
 2,854,277  
 2,823,919  
 2,632,511  
 338,226 

Building management fee, rent and rate 
 2,561,621  
 2,700,055  
 2,559,568  
 328,854 

Legal and profession fee 
 1,502,443  
 1,555,347  
 4,587,440  
 589,395 

Provision for expected credit loss 
 2,908,913  
 1,197,330  
 759,752  
 97,613 

Other expenses 
 3,126,206  
 3,954,050  
 3,342,674  
 429,468 

Total 
 19,612,592  
 18,142,764  
 21,686,959  
 2,786,345 

 

Note: Others mainly represented domestic and overseas travelling
expenses, bank charges and other sundry expenses for administrative purposes.

 

Our general and administrative expenses were approximately HK$19.6
million, HK$18.1 million and HK$21.7 million (USD 2.8 million) in FY2023, FY2024 and FY2025, representing approximately 17.0%, 17.5%
and 16.6% of the total revenue for the corresponding years, respectively.

 

Employee compensation and benefits mainly represented salaries, retirement
benefit scheme contributions and employee benefits of the administrative staff.

 

Depreciation mainly represented depreciation charge on leasehold improvement
in our Shanghai office.

 

Lease expense represented lease expense in relation to the leased
office space in Hong Kong and Shanghai.

 

Legal and professional fee mainly represented professional information
technology service fees, customer and technical service fees and general legal consultancy fees.

 

Other expenses mainly represented audit fee, office expenses such
as office supplies, cleaning, computer and office securities, utilities expenses, internet and information technology expenses.

 

Bank interest income

 

Interest income represented bank interest received.

 

Interest expense

 

Interest expenses mainly represented interest charged on bank borrowings
and operating lease liabilities.

 

Government subsidies

 

In FY2024, government subsidies were granted under the Technology
Voucher Programme to support the use of technological services and solutions from the Hong Kong government.

 

 

Other (expenses) income

 

The table below sets forth the breakdown of other
(expenses) income for the years indicated.

 

  
For the years ended December 31, 

  
2023  
2024  
2025  
2025 

  
HK$  
HK$  
HK$  
US$ 

Exchange (loss) gain on foreign currency translation, net 
 (98,435) 
 73,322  
 69,371  
 8,913 

Others 
 29,200  
 (77,838) 
 118,055  
 15,167 

Total 
 (69,235) 
 (4,516) 
 187,426  
 24,080 

 

In FY2023, FY2024 and FY2025, we recorded other
expenses of approximately HK$69,000 and approximately HK$5,000, and other income of approximately HK$0.2 million (USD 24,000), respectively.

 

Exchange (loss) gain on foreign currency translation, net was mainly
derived from foreign exchange differences resulting from the fluctuation of RMB and USD against HKD.

 

Income tax

 

BVI

 

The Company
and Cre8 Investments Limited is incorporated in the BVI and is not subject to tax on income or capital gains under current BVI laws.
In addition, upon payments of dividends by these entities to their shareholders, no BVI withholding tax will be imposed.

 

Hong Kong

 

Cre8 Hong
Kong is incorporated in Hong Kong and subject to Hong Kong Profits Tax on the taxable income as reported in its statutory consolidated
financial statements adjusted in accordance with relevant Hong Kong tax laws. The applicable tax rate is 16.5% in Hong Kong.
From year of assessment of 2019/2020 onwards, Hong Kong profits tax rates are 8.25% on assessable profits up to HK$2,000,000, and
16.5% on any part of assessable profits over HK$2,000,000. Under Hong Kong tax laws, Cre8 Hong Kong is exempted from income tax
on its foreign-derived income, and there are no withholding taxes in Hong Kong on remittance of dividends.

 

PRC

 

Chuangbafang
is governed by the income tax laws of the PRC. Under the PRC Enterprise Income Tax Law (the “EIT Law”), the standard enterprise
income tax rate for all domestic enterprises and foreign invested enterprises is 25%. In January 2019, the State Administration
of Taxation provides a preferential corporate income tax rate of 20% and an exemption ranged from 50% to 75% in the assessable taxable
profits for entities qualified as small-size enterprises (the exemption range has been changed to from 50% to 87.5% for the period from
January 1, 2021 to December 31, 2023, then the exemption range has been changed to from 75% to 87.5% for the period from January 1,
2023 to December 31, 2024). The policy is effective for the period from January 1, 2019 to December 31, 2025.

 

 

Significant components of the provision for income taxes are as
follows:

 

 
 
For the years ended December 31,
 

 
 
2023
 
 
2024
 
 
2025
 
 
2025
 

 
 
HK$
 
 
HK$
 
 
HK$
 
 
US$
 

Hong Kong profit tax
 
 
 
 
 
 
 
 
 
 
 
 

Current tax expenses:
 
 
 
 
 
 
 
 
 
 
 
 

Provision for the year
 
 
—
 
 
 
909,153
 
 
 
1,697,670
 
 
 
218,117
 

Under provision in prior years
 
 
—
 
 
 
—
 
 
 
21,517
 
 
 
2,764
 

 
 
 
—
 
 
 
909,153
 
 
 
1,719,187
 
 
 
220,881
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Deferred tax expenses (credit)
 
 
1,500,878
 
 
 
1,220,451
 
 
 
(91,278
)
 
 
(11,727
)

Total
 
 
1,500,878
 
 
 
2,129,604
 
 
 
1,627,909
 
 
 
209,154
 

 

Net income

 

As a result of the above factors, our net income
decreased from approximately HK$6.4 million in FY2024 to approximately HK$5.3 million (USD 0.7 million) in FY2025.

 

Assets and liabilities

 

The following table sets forth a summary of the assets and liabilities
as of the dates indicated.

 

  
As of December 31, 

  
2024  
2025  
2025 

  
HK$  
HK$  
US$ 

Accounts receivable 
 25,125,372  
 29,606,430  
 3,803,840 

Allowance for expected credit losses 
 (6,263,876) 
 (7,023,628) 
 (902,397)

Total 
 18,861,496  
 22,582,802  
 2,901,443 

 

Net accounts receivable primarily consisted of accounts receivable
arising from provision of financial printing services to customers. Our net accounts receivable increased from approximately HK$18.9
million as of December 31, 2024 to approximately HK$22.6 million (USD 2.9 million) as of December 31, 2025, which was in line with the
increase in translation and printing expenses during the year.

 

Prepayments and other current assets

 

The following table sets forth the breakdown of prepayments and other
current assets as of the dates indicated:

 

  
As of December 31, 

  
2024  
2025  
2025 

  
HK$  
HK$  
US$ 

Current: 
   
   
  

Prepayment for operating expenses 
 3,693,799  
 6,622,072  
 850,805 

Prepayment for advertising expenses 
 —  
 784,997  
 100,857 

Deferred IPO costs 
 5,137,874  
 —  
 — 

Others 
 807,895  
 477,652  
 61,369 

  
 9,639,568  
 7,884,721  
 1,013,031 

  
    
    
   

Non-current: 
    
    
   

Prepayment for operating expenses 
 —  
 1,394,329  
 179,144 

Prepayment for advertising expenses 
 —  
 1,962,493  
 252,141 

  
 —  
 3,356,822  
 431,285 

  
    
    
   

Total prepayments and other current assets 
 9,639,568  
 11,241,543  
 1,444,316 

 

Our prepayments and other current assets primarily
consisted of prepayment for operating and advertising expenses, deferred IPO costs and others. In FY2025, the deferred IPO costs was offset
with the proceeds received at the closing of IPO.

 

Prepayments for operating expenses mainly represented
prepayment on expenses such as utilities, license fee for software, printing expenses and telephone charges etc.. Prepayments for advertising
expenses mainly represented payment in advance to Hong Kong securities company to promote the use of the Companies’ services to
listed companies or companies preparing to go listing in Hong Kong.

 

Our prepayments and other current assets increased
from approximately HK$9.6 million as of December 31, 2024 to approximately HK$11.2 million (USD 1.4 million) as of December 31, 2025,
which was mainly due to the increase in prepaid operating and advertising expenses.

 

 

Property and equipment, net

 

Our property and equipment, net mainly represented
furniture and fixture, computers, leasehold improvement and office equipment. The net book value of our property, plant and equipment
increased from approximately HK$0.3 million as of December 31, 2024 to approximately HK$0.6 million (USD 82,000) as of December 31, 2025,
which was mainly attributable to the purchase of new computers in FY2025.

 

Right-of-use asset

 

Our right-of-use asset represented our leases for offices in Hong
Kong and Shanghai, and printing machinery. The net book value of our right-of-use asset increased from approximately HK$6.5 million as
of December 31, 2024 to approximately HK$19.9 million (USD 2.6 million) as of December 31, 2025, which was mainly attributable to the
new lease of our Hong Kong office in FY2025.

 

Long-term rental and utility deposits, net

 

Our long-term rental and utilities deposits represented rental and
utilities deposits in relation to our lease of offices in Hong Kong and Shanghai. Our deposit remained relatively stable at approximately
HK$7.0 million as of December 31, 2024 and approximately HK$6.0 million (USD 0.8 million) as of December 31, 2025.

 

Accounts payable

 

Accounts payable primarily consisted of costs payable to suppliers
of translation, printing and binding service. Our accounts payable increased from approximately HK$8.6 million as of December 31, 2024
to approximately HK$10.8 million (USD 1.4 million) as of December 31, 2025, which was in line with the increase in translation and printing
expenses during the year.

 

Accruals and other payables

 

The following table sets forth the breakdown of accruals and other
payables as of the dates indicated:

 

  
As of December 31, 

  
2024  
2025  
2025 

  
HK$  
HK$  
US$ 

Accrued operating expenses 
 347,864  
 547,617  
 70,358 

Accrued rental expenses 
 220,830  
 113,458  
 14,577 

Accrued audit fees 
 153,698  
 644,864  
 82,852 

Provision for sales commissions 
 1,600,643  
 671,907  
 86,327 

Provision for long service payments and staff benefits 
 468,236  
 1,229,975  
 158,027 

Others 
 107,594  
 459,609  
 59,051 

Total 
 2,898,865  
 3,667,430  
 471,192 

 

Our accruals and other payables primarily consisted of accrued operating
expenses, accrued rental expenses, accrued audit fees, accrued listing expenses, provision for sales commissions, provision for long
service payments and staff benefits and payroll payables.

 

Accrued operating expenses mainly represented accrual made for operating
expenses such as IT support fees, utilities and network charges.

 

Provision for sales commissions mainly represented provision for commission
payable to staff in the sales department, which is calculated based on the profitability of projects successfully completed by each salesperson.

 

Provision for long service payments and staff benefits represented
the provision made for long service payments for our employees on cessation of employment in certain circumstances under the Hong Kong
Employment Ordinance and unused annual leave payment.

 

 

Bank borrowings

 

As of December 31, 2024 and 2025, our bank borrowings represented
government guaranteed SME loan denominated in HK$ from a registered bank in Hong Kong amounted to HK$8.9 million and HK$8.1 million (USD1.0
million), respectively, which was fully guaranteed by the Government of Hong Kong Special Administrative Region and repayable within
10 years or on demand and carried variable interests with a weighted average interest rate of 2.958% in FY2025.

 

Lease commitments

 

We entered into certain operating leases for office premises and printing
machinery in Hong Kong and Shanghai.

 

The following table sets forth the undiscounted future minimum lease
payment:

 

  
As of December 31,
2025 

For the years ending December 31, 
HK$  
US$ 

2026 
 10,502,899  
 1,349,415 

2027 
 9,733,729  
 1,250,591 

2028 
 899,214  
 115,531 

2029 
 36,720  
 4,718 

Total minimum lease payments 
 21,172,562  
 2,720,255 

Less: imputed interest component 
 (663,802) 
 (85,285)

Lease liabilities recognized in the consolidated balance sheets 
 20,508,760  
 2,634,970 

 

5.B. Liquidity and Capital Resources

 

Cash flows

 

Our source of funds for operations mainly comes from cash generated
from operation, bank borrowings and proceeds from IPO. The primary uses of cash are mainly to finance its operations, working capital
needs, and capital expenditure needs. As of December 31, 2023, 2024 and 2025, our cash and cash equivalents were approximately HK$14.8
million, HK$13.8 million and HK$54.7 million (US$7.0 million), respectively. Our cash and cash equivalent primarily consist of cash on
hand and cash at bank, mainly denominated in HK$.

 

  
For the years ended December 31, 

  
2023  
2024  
2025  
2025 

  
HK$  
HK$  
HK$  
US$ 

Net cash generated from operating activities 
 5,477,165  
 6,980,804  
 11,536,345  
 1,482,193 

Net cash used in investing activities 
 (191,005) 
 (134,709) 
 (708,341) 
 (91,008)

Net cash provided by (used in) financing activities 
 8,681,123  
 (7,727,117) 
 30,104,905  
 3,867,884 

Net change in cash and cash equivalent 
 13,967,283  
 (881,022) 
 40,932,909  
 5,259,069 

 

After the IPO, we have sufficient capital to fund our operations.

 

5.C. Research and Development, Patent and Licenses, etc.

 

Please refer to “Item 4. Information on
the Company – 4.B. Business Overview”.

 

5.D. Trend Information

 

Other than as disclosed elsewhere in this annual
report, we are not aware of any trends, uncertainties, demands, commitments, or events for the year ended December 31, 2025 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.

 

 

5.E. Critical Accounting Estimates

 

We prepare our financial statements in accordance with U.S. GAAP,
which requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, costs and expenses,
and related disclosures. On an ongoing basis, we evaluate our estimates based on historical experience and on various other assumptions
that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying
values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under
different assumptions or conditions.

 

Allowance for expected credit losses

 

Accounting Standards Update (“ASU”)
No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments requires entities
to use a current lifetime ECLs methodology to measure impairments of certain financial assets. Using this methodology will result in
earlier recognition of losses than under the current incurred loss approach, which requires waiting to recognize a loss until it is probable
of having been incurred. There are other provisions within the standard that affect how impairments of other financial assets may be
recorded and presented, and that expand disclosures. The Company adopted the new standard effective January 1, 2021, the first day
of the Company’s fiscal year and applied to contracts receivable and other financial instruments.

 

Item
6. Directors, Senior Management and Employees

 

6.A. Directors and Senior Management

 

The following table provides information regarding
our directors and executive officers as of the date of this annual report:

 

Directors and Executive officers
 
Age
 
Position

Sze Ting CHO
 
53
 
Director, Chairman of the Board, and Chief Executive
Officer

Yuen Chung Davy LI
 
49
 
Director

Ho Tung Armen HO
 
49
 
Independent Director, Chair of the Audit Committee

Ka Chun Matthew WONG
 
38
 
Independent Director, Chair of the Compensation
Committee

Lo Chanii KAM
 
44
 
Independent Director, Chair of the Nominating
Committee

Chi Kam Ray LEE
 
51
 
Chief Financial Officer

 

 

Sze Ting CHO is the Director, Chairman
of the Board, and Chief Executive Officer of Cre8 BVI, and also a Managing Director of Cre8 Hong Kong, our Operating Subsidiary. Mr.
Cho has over 20 years of professional experience in the financial printing industry. Prior to joining Cre8 Hong Kong in December 2006,
Mr. Cho held senior positions, including director and general manager, at several financial printing companies from August 2001 to November
2006. From September 1993 to July 2001, he worked at RR Donnelley Financial, liaising closely with UK and US offices and specializing
in SEC, London Stock Exchange, and Luxembourg Stock Exchange filings. Mr. Cho obtained a high school diploma in New York in 1992.

 

Yuen Chung Davy LI is a Director of Cre8
BVI, and also a Managing Director and Head of Sales at Cre8 Hong Kong. Mr. Li joined Cre8 Hong Kong in July 2017 and has over 22 years
of professional experience in the financial printing industry. Prior to joining Cre8 Hong Kong, Mr. Li served as Sales Director at iOne
Financial Press Limited (November 2005 to November 2016) and as Sales Manager at Roman Financial Press Limited (June 2001 to October
2005). Mr. Li holds a Bachelor of Arts degree from Simon Fraser University (Canada), obtained in May 2001.

 

Ho Tung Armen HO is an independent director
and Chair of the Audit Committee, and a member of the Compensation Committee and Nominating Committee. Mr. Ho has over 22 years of experience
in listed companies, corporate finance, private equity, advisory, and audit. He previously worked at PricewaterhouseCoopers Hong Kong,
KPMG UK, and Grant Thornton Corporate Finance UK (1998 to 2006), held senior positions at various asset management and private equity
firms (2006 to 2014), and served as CFO and Company Secretary of Tianyun International Holdings Limited (SEHK: 6836) (February 2015 to
May 2024). Mr. Ho has served as an independent non-executive director of Stream Ideas Group Limited (SEHK: 8401) since March 2018 and
as an independent director of Reitar Logtech Holdings Limited (NASDAQ: RITR) since June 2024. Mr. Ho holds a Master of Business Administration
from the University of Chicago Booth School of Business, a Master of Science in Financial Economics from the University of London, and
a Bachelor of Arts in Accountancy from City University of Hong Kong. He has been a member of the Hong Kong Institute of Certified Public
Accountants since January 2003.

 

Ka Chun Matthew WONG is an independent
director and Chair of the Compensation Committee, and a member of the Audit Committee and Nominating Committee. Mr. Wong has over ten
years of experience in capital markets and corporate finance. He previously worked as an auditor at Deloitte Touche Tohmatsu (September
2011 to November 2013) and PricewaterhouseCoopers (December 2013 to March 2017), as Assistant Vice President at Zhongtai International
Capital Limited (March 2017 to December 2017), and as Vice President at GF Capital (Hong Kong) Limited (December 2017 to June 2019).
Mr. Wong joined Ample Capital Limited in June 2019 and serves as Vice President of its corporate finance division. He has served as an
independent non-executive director of Sun Kong Holdings Limited (SEHK: 8631) since December 2018. Mr. Wong holds a Bachelor of Business
(Accounting) from Monash University (Australia), obtained in September 2011, and is a member of CPA Australia and an associate of the
Chartered Institute of Management Accountants.

 

Lo Chanii KAM is an independent director
and Chair of the Nominating Committee, and a member of the Audit Committee and Compensation Committee. Ms. Kam has over 15 years of experience
in executive search, public relations, investor relations, and strategic development. She previously served at China Harmony Auto Holding
Limited (SEHK: 03836) (July 2017 to June 2020 and from October 2022, currently as Overseas Development Director) and as Strategic Development
Director at iClick Interactive Asia Limited (NASDAQ: ICLK) (June 2020 to March 2021). Ms. Kam has served as an independent director of
Reitar Logtech Holdings Limited (NASDAQ: RITR) since June 2024 and of Mint Incorporation Limited (NASDAQ: MIMI) since December 2024.
Ms. Kam holds a Bachelor of Business Administration from the University of Central Oklahoma.

 

Chi Kam Ray LEE is the Chief Financial
Officer of Cre8 BVI. Mr. Lee has over 20 years of experience in auditing, financial reporting, and strategic planning. He previously
served as Group Finance Director at Henyep Capital Group (June 2022 to May 2023), Regional Financial Controller for the U.S., Europe,
and North Asia at Pico Far East Holding Limited (SEHK: 00752) (January 2019 to November 2021), and as financial controller at several
companies, including SMTC Asia Limited (NASDAQ: SMTX) (2013 to 2017). Mr. Lee holds a Bachelor of Commerce degree from the University
of British Columbia (Canada), obtained in May 1999, and is a member of the American Institute of Certified Public Accountants and a Chartered
Global Management Accountant.

 

 

Family Relationships

 

None of the directors or executive officers has
a family relationship as defined in Item 401 of Regulation S-K.

  

Involvement in Certain Legal Proceedings

 

To the best of our knowledge, none of our directors,
director appointees or executive officers has, during the past ten years, been involved in any legal proceedings described in subparagraph
(f) of Item 401 of Regulation S-K.

 

6.B. Compensation

 

Employment Agreements and Director Offer Letters

 

On December 4, 2023, Cre8 Enterprise Limited entered into separate
standard employment agreements (the “Director and Officer Employment Agreements”) with its directors and senior executive
officers, namely, Mr. Sze Ting Cho (Director, CEO, and Chairman of the Board), Mr. Yuen Chung Davy Li (Director), and Mr. Chi Kam Ray
Lee (CFO) (collectively, the “Named Directors and Executives”).

 

The initial term of the Director and Officer Employment Agreements
is for one (1) year unless terminated earlier. Upon expiration, the agreements automatically extend for successive one-year terms unless
a three-month prior written notice to terminate is provided. Pursuant to the Director and Officer Employment Agreements, the Named Directors
and Executives will not receive any form of compensation, cash or equity, from Cre8 BVI. Instead, they will continue to receive cash
compensation in the form of salary, bonus, and pension from the Operating Subsidiary, Cre8 Hong Kong.

We have entered into director offer letters with each of our independent
directors setting forth the terms and provisions of their engagement, including annual compensation of HK$120,000 per independent director.

 

Agreements with independent directors

 

We entered into director offer letters with each
of our independent director nominees which agreements set forth the terms and provisions of their engagement.

 

Compensation 

 

For the year ended December 31, 2025, the aggregate
cash compensation and benefits that we paid to the executive officers and directors were approximately HK$16,215,671 (approximately US$2,083,393),
as compensation to our directors and executive officers, as well as an aggregate of HK$78,000 (approximately US$10,021) as contributions
by the Operating Subsidiary to the Mandatory Provident Fund (“MPF”), a statutory retirement scheme introduced after the enactment
of the Mandatory Provident Fund Schemes Ordinance in Hong Kong.

 

Except our contribution to the MPF, we have not
set aside or accrued any amount to provide pension, retirement, or other similar benefits to our directors and executive officers. We
do not have any equity incentive plan in place as of the date of this annual report.

 

Clawback Policy adopted by the Board

 

The Board adopted an Executive Compensation Recovery
Policy (the “Clawback Policy”), effective July 10, 2024, providing for the recovery of certain incentive-based compensation
from current and former executive officers of the Company in the event the Company is required to restate any of its financial statements
filed with the SEC under the Exchange Act in order to correct an error that is material to the previously-issued financial statements,
or that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current
period. Adoption of the Clawback Policy was mandated by new Nasdaq listing standards introduced pursuant to Exchange Act Rule 10D-1.
The Clawback Policy is in addition to Section 304 of the Sarbanes-Oxley Act of 2002 which permits the SEC to order the disgorgement of
bonuses and incentive-based compensation earned by a registrant issuer’s chief executive officer and chief financial officer in
the year following the filing of any financial statement that the issuer is required to restate because of misconduct, and the reimbursement
of those funds to the issuer. A copy of the Clawback Policy has been filed as exhibit to this annual report.

 

 

Outstanding Equity Awards at Fiscal Year-End

 

As of December 31, 2025, 2024 and 2023, we had
no outstanding equity awards.

 

6.C. Board Practices

 

Duties of Directors

 

Under BVI law, our directors owe fiduciary duties
at both common law and under statute, including a statutory duty to act honestly, in good faith and with a view to our best interests.
When exercising powers or performing duties as a director, the director is required to exercise the care, diligence and skill that a
reasonable director would exercise in the circumstances taking into account, without limitation, the nature of the company, the nature
of the decision and the position of the director and the nature of the responsibilities undertaken by him. In exercising the powers of
a director, the directors must exercise their powers for a proper purpose and shall not act or agree to the company acting in a manner
that contravenes our memorandum and articles of association or the BVI Act.

 

Terms of Directors

 

Pursuant to our Second Amended and Restated Memorandum
and Articles of Association, each of our directors holds office for the term, if any, fixed by the resolution of shareholders or resolution
of directors appointing him/her, or until his/her earlier death, resignation or removal. If no term is fixed on the appointment of a
director, the director serves indefinitely until his/her earlier death, resignation or removal.

 

Election of Officers

 

Our executive officers are appointed by, and
serve at the discretion of, our board of directors.

 

Board of Directors

 

Our board of directors consists of 5 directors,
three of whom are independent as such term is defined by the Nasdaq Capital Market.

 

The directors are up for re-election at our annual
general meeting of shareholders.

 

A director may vote in respect of any contract
or transaction in which he is interested, provided, however that the nature of the interest of any director in any such contract or transaction
shall be disclosed by him at or prior to its consideration and any vote on that matter. A general notice or disclosure to the directors
or otherwise contained in the minutes of a meeting or a written resolution of the directors or any committee thereof of the nature of
a director’s interest shall be sufficient disclosure and after such general notice it shall not be necessary to give special notice
relating to any particular transaction. A director may be counted for a quorum upon a motion in respect of any contract or arrangement
which he shall make with our company, or in which he is so interested and may vote on such motion.

 

 

Board Committees

 

We have established three committees under the
board of directors: an audit committee, a compensation committee and a nominating committee. We have adopted a charter for each of the
three committees.

 

Each committee’s members and functions
are described below.

 

Audit Committee. Our audit committee consists
of Mr. Ho Tung Armen Ho, Ms. Lo Chanii Kam, and Mr. Ka Chun Matthew Wong. Mr. Ho Tung Armen Ho is the chair of our audit committee. The
audit committee oversees our accounting and financial reporting processes and the audits of the financial statements of our company.
The audit committee is responsible for, among other things:

 

 
●
appointing the independent auditors and pre-approving all auditing
and non-auditing services permitted to be performed by the independent auditors;

 

 
●
reviewing with the independent auditors any audit problems or difficulties
and management’s response;

 

 
●
discussing the annual audited financial statements with management
and the independent auditors;

 

 
●
reviewing the adequacy and effectiveness of our accounting and internal
control policies and procedures and any steps taken to monitor and control major financial risk exposures;

 

 
●
reviewing and approving all proposed related party transactions;

 

 
●
meeting separately and periodically with management and the independent
auditors; and

 

 
●
monitoring compliance with our code of business conduct and ethics,
including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance.

 

Compensation Committee. Our compensation
committee consists of Mr. Ho Tung Armen Ho, Ms. Lo Chanii Kam, and Mr. Ka Chun Matthew Wong. Mr. Ka Chun Matthew Wong is the chair of
our compensation committee. The compensation committee is responsible for, among other things:

 

 
●
reviewing and approving, or recommending to the board for its approval,
the compensation for our chief executive officer and other executive officers;

 

 
●
reviewing and recommending to the shareholders for determination with
respect to the compensation of our directors;

 

 
●
reviewing periodically and approving any incentive compensation or
equity plans, programs or similar arrangements; and

 

 
●
selecting compensation consultant, legal counsel or other adviser only
after taking into consideration all factors relevant to that person’s independence from management.

 

 

Nominating Committee. Our nominating committee
consists of Mr. Ho Tung Armen Ho, Ms. Lo Chanii Kam, and Mr. Ka Chun Matthew Wong. Ms. Lo Chanii Kam is the chair of our nominating committee.
We have determined that Mr. Ho Tung Armen Ho, Ms. Lo Chanii Kam, and Mr. Ka Chun Matthew Wong satisfy the “independence”
requirements under Nasdaq Rule 5605. The nominating committee assists the board of directors in selecting individuals qualified to become
our directors and determining the composition of the board and its committees. The nominating committee is responsible for, among other
things

 

 
●
selecting and recommending to the board nominees for election by the
shareholders or appointment by the board;

 

 
●
reviewing annually with the board the current composition of the board
with regards to characteristics such as independence, knowledge, skills, experience and diversity;

 

 
●
making recommendations on the frequency and structure of board meetings
and monitoring the functioning of the committees of the board; and

 

 
●
advising the board periodically with regards to significant developments
in the law and practice of corporate governance as well as our compliance with applicable laws and regulations, and making recommendations
to the board on all matters of corporate governance and on any remedial action to be taken.

 

Foreign Private Issuer Exemptions

 

We are a “foreign private issuer,”
as defined by the SEC. As a result, in accordance with the rules and regulations of Nasdaq, we may choose to comply with home country
governance requirements and certain exemptions thereunder rather than complying with Nasdaq corporate governance standards. We may choose
to take advantage of the following exemptions afforded to foreign private issuers:

 

●Exemption from filing quarterly
reports on Form 10-Q, from filing proxy solicitation materials on Schedule 14A or 14C in connection with annual or special meetings of
shareholders, or from providing current reports on Form 8-K disclosing significant events within four (4) days of their occurrence, and
from the disclosure requirements of Regulation FD.

 

●Exemption from the Nasdaq rules
applicable to domestic issuers requiring disclosure within four (4) business days of any determination to grant a waiver of the code
of business conduct and ethics to directors and officers. Although we will require board approval of any such waiver, we may choose not
to disclose the waiver in the manner set forth in the Nasdaq rules, as permitted by the foreign private issuer exemption.

 

Furthermore, Nasdaq Rule 5615(a)(3) provides
that a foreign private issuer, such as us, may rely on our home country corporate governance practices in lieu of certain of the rules
in the Nasdaq Rule 5600 Series and Rule 5250(d), provided that we nevertheless comply with Nasdaq’s Notification of Noncompliance
requirement (Rule 5625), the Voting Rights requirement (Rule 5640) and that we have an audit committee that satisfies Rule 5605(c)(3),
consisting of committee members that meet the independence requirements of Rule 5605(c)(2)(A)(ii). We intend to rely on home country
practices with respect to our corporate governance. As a result, our shareholders may not have the same protections afforded to
shareholders of companies that are subject to all of the corporate governance requirements of Nasdaq.

 

 

Other Corporate Governance Matters

 

The Sarbanes-Oxley Act of 2002, as well as related
rules subsequently implemented by the SEC, requires foreign private issuers, including us, to comply with various corporate governance
practices. In addition, Nasdaq rules provide that foreign private issuers may follow home country practices in lieu of the Nasdaq corporate
governance standards, subject to certain exceptions and except to the extent that such exemptions would be contrary to U.S. federal securities
laws.

 

Beginning March 18, 2026, members of our board
of directors, executive board members and senior management are subject to short-swing profit and insider trading reporting obligations
under Section 16 of the Exchange Act. They are also subject to the obligations to report changes in share ownership under section 13
of the Exchange Act and related SEC rules. 

 

Remuneration

 

The directors may receive such remuneration as
our board of directors may determine from time to time. The compensation committee will assist the directors in reviewing and approving
the compensation structure for the directors.

 

Qualification

 

There are no membership qualifications for directors.
Further, there are no share ownership qualifications for directors. There are no other arrangements or understandings pursuant to which
our directors are selected or nominated.

 

Meetings of directors

 

Our business and affairs are managed by our board
of directors, who will make decisions by voting on resolutions of directors. Our directors are free to meet at such times and in such
manner and places within or outside the BVI as the directors determine to be necessary or desirable. A director must be given not less
than 3 days’ notice of a meeting of directors. At any meeting of directors, a quorum will be present if not less than one half
of the total number of directors is present, unless there are only 2 directors in which case the quorum is 2. An action that may be taken
by the directors at a meeting may also be taken by a resolution of directors consented to in writing by a majority of the directors.
A person other than an individual which is a shareholder may by a resolution of its directors or other governing body authorize any individual
it thinks fit to act as its representative at any meeting of shareholders. The duly authorized representative shall be entitled to exercise
the same powers on behalf of the person which he represents as that person could exercise if it were an individual.

 

Involvement in Certain Legal Proceedings

 

To the best of our knowledge, none of our directors
or executive officers has, during the past 10 years, been involved in any legal proceedings described in subparagraph (f) of Item 401
of Regulation S-K.

 

Code of Business Conduct and Ethics, Insider Trading Policy, and Executive
Compensation Recovery Policy

 

We have adopted (i) a written Code of Business
Conduct and Ethics; (ii) Insider Trading Policy that applies to our directors, officers, and employees, including our chief executive
officer, chief financial officer, principal accounting officer or controller or persons performing similar functions; and (iii) Executive
Compensation Recovery Policy that applies to our officers, and employees, including our chief executive officer, chief financial officer,
principal accounting officer or controller or persons performing similar functions, (collectively the “Policies”). We intend
to disclose any amendments to the Policies, and any waivers of the Policies for our Directors, executive officers and senior finance
executives, on our website to the extent required by applicable U.S. federal securities laws and the corporate governance rules of Nasdaq.

 

 

6.D. Employees

 

Employees

 

As of December 31, 2025, 2024, and 2023, we had
91, 87, and 89 full-time employees, respectively, in the following departments: 

 

Departments 
As of
December 31,
2025  
As of
December 31,
2024  
As of
December 31,
2023 

Management 
 2  
 2  
 2 

Operations: Creative and Graphic, Typesetting, Project Departments 
 55  
 52  
 53 

Sales and marketing 
 14  
 13  
 13 

Finance and accounting, and Human Resources 
 14  
 14  
 14 

Customer Services 
 2  
 2  
 2 

IT 
 4  
 4  
 5 

Total 
 91  
 87  
 89 

 

We consider that we have maintained a good relationship with the employees and have not experienced any significant disputes with the
employees or any disruption to the operations due to any labor disputes. In addition, our Operating Subsidiary has not experienced any
difficulties in the recruitment and retention of experienced core staff or skilled personnel.

 

Our remuneration package includes salary and
discretionary bonuses. In general, we determine employees’ salaries based on their qualifications, position and seniority. In order
to attract and retain valuable employees, we review the performance of our employees annually, which will be taken into account in annual
salary review and promotion appraisal. We provide a defined contribution to the Mandatory Provident Fund as required under the Mandatory
Provident Fund Schemes Ordinance (Chapter 485 of the Laws of Hong Kong) for our eligible employees in Hong Kong.

 

6.E. Share Ownership

 

Except as specifically noted, the following table
sets forth information with respect to the beneficial ownership of our Ordinary Shares as of the date of this annual report by:

 

●Each person who is known by us to beneficially own more than
5% our outstanding Class A Ordinary Shares and Class B Ordinary Shares;

 

●Each of our Directors and named executive officers; and

 

●All Directors and named executive officers as a group.

 

Holders of our Class A Ordinary Shares are entitled
to one (1) vote per share. Holders of our Class B Ordinary Shares are entitled to twenty (20) votes per share. 

 

 

The percentage of beneficial ownership of each
listed person is based on 1,638,985 Class A Ordinary Shares of no par value, and 375,000 Class B Ordinary Shares of no par value, issued
and outstanding as of the date of this annual report. We have determined beneficial ownership in accordance with the rules of the SEC.
These rules generally attribute beneficial ownership of securities to persons who possess sole or shared voting power or investment power
with respect to those securities. The person is also deemed to be a beneficial owner of any security of which that person has a right
to acquire beneficial ownership within 60 days of this annual report. Unless otherwise indicated, the person identified in this table
has sole voting and investment power with respect to all shares shown as beneficially owned by him, subject to applicable community property
laws.

 

  
Class A
Ordinary Shares
Beneficially Owned  
Class B
Ordinary Shares
Beneficially Owned  
Voting
Power
(2) 

Name of Beneficial Owner 
Number  
%  
Number  
%  
% 

Directors and Executive Officers: 
   
   
   
   
  

Sze Ting CHO 
 –  
 -% 
 –  
 -% 
 -%

Yuen Chung Davy LI 
 –  
 -% 
 –  
 -% 
 -%

Ho Tung Armen HO 
 –  
 -% 
 –  
 -% 
 -%

Ka Chun Matthew WONG 
 –  
 -% 
 –  
 -% 
 -%

Lo Chanii KAM 
 –  
 -% 
 –  
 -% 
 -%

Chi Kam Ray LEE 
 –  
 -% 
 –  
 -% 
 -%

Directors and executive officers as a group 
 –  
 -% 
 –  
 -% 
 -%

5% or Greater Shareholders: 
    
    
    
    
   

Cre8 Investments Limited(1)   
 536,250  
 32.72% 
 375,000  
 100% 
 87.93%

 

(1)Cre8 Investments Limited is a limited liability company incorporated
under the laws of the BVI, which is 57.14% owned by Mr. Seng Jin LEE, 14.29% owned by Mr. Xian Hong Jordan LEE (son of Mr. Seng Jin LEE)
and 28.57% owned by Mr. Kit Ying SHAM (father-in-law of Mr. Seng Jin LEE). The board of directors of Cre8 Investments Limited consists
of Mr. Seng Jin LEE and Ms. Yee Lan Peggy SHAM. Ms. Yee Lan Peggy SHAM is the spouse of Mr. Seng Jin LEE, daughter of Mr. Kit Ying SHAM,
and mother of Mr. Xian Hong Jordan LEE. Pursuant to an Acting-in-Concert Agreement (the “Agreement”), Mr. Seng Jin LEE, Mr.
Xian Hong Jordan LEE and Mr. Kit Ying SHAM have agreed to vote their respective shares collectively, and have designated Mr. Seng Jin
LEE as the sole representative with exclusive authority to determine and direct the vote of all shares subject to the Agreement. By virtue
of the Agreement, Mr. Seng Jin LEE has sole voting power over all shares held by the parties to the Agreement and therefore may be deemed
to beneficially own all such shares under Rule 13d-3(a) of the Exchange Act. The other parties to the Agreement retain sole dispositive
power over the shares they individually own. The registered address of Cre8 Investments Limited is at Vistra Corporate Services Centre,
Wickhams Cay II, Road Town, Tortola, VG1110, BVI.
  

(2)Percentage total voting power represents
voting power with respect to all shares of our Class A Ordinary Shares and Class B Ordinary
Shares, as a single class. Each holder of Class B Ordinary Shares shall be entitled to twenty
(20) votes per Class B Ordinary Share and each holder of Class A Ordinary Shares shall be
entitled to one (1) vote per Class A Ordinary Share on all matters submitted to our shareholders
for a vote. The Class A Ordinary Shares and Class B Ordinary Shares vote together as a single
class on all matters submitted to a vote of our shareholders, except as may otherwise be
required by law. The Class B Ordinary Share is convertible at any time by the holder into
shares of Class A Ordinary Share on a share-for-share basis. 

 

 

Item
7. Major Shareholders and Related Party Transactions

 

7.A. Major Shareholders

 

Please refer to “Item 6. Directors, Senior
Management and Employees – 6.E. Share Ownership” for a description of Cre8 BVI’s major shareholders.

 

7.B. Related Party Transactions

 

Terms of Directors and Officers

 

See “Item 6. Directors, Senior Management
and Employees – 6.C. Board Practices-Terms of Directors and Officers.”

 

Employment Agreements

 

See “Item 6. Directors, Senior Management
and Employees – 6.B. Compensation-Employment Agreements .”

 

Material Transactions with Related Parties

 

Nature of relationships with related parties

 

Name
 
Relationship

Starlux Limited
 
A company under the control by Mr. Jordan Lee

LingXpert Language Services Limited (“Lingxpert”)
 
A wholly owned subsidiary of Starlux Limited

Green IPO Ltd
 
A wholly owned subsidiary of Lingxpert and it is no longer a related
party in 2025.

YHY Holdings Limited
 
A company under the control of Mr. Jordan Lee

Ren Restaurants Limited
 
A company under the control of Mr. Jordan Lee

 

Amount due to related parties consist of the
following:

 

  
As of December 31, 

  
2024  
2025  
2025 

  
HK$  
HK$  
US$ 

Due to ultimate controlling shareholders 
 11,558,995  
 971,214  
 124,782 

Total 
 11,558,995  
 971,214  
 124,782 

 

The amounts due to the related parties are unsecured,
interest free with no specific repayment terms. The amount is of non-trade nature. We repaid our controlling shareholders in FY2025.

 

The related party balances included in accounts
payable:

 

  
As of December 31, 

  
2024  
2025  
2025 

  
HK$  
HK$  
US$ 

Lingxpert 
 16,568  
 —  
 — 

Total 
 16,568  
 —  
 — 

 

 

The Company have the following significant related
party transaction as follows:

 

  
For the years ended December 31, 

  
2023  
2024  
2025  
2025 

  
HK$  
HK$  
HK$  
US$ 

Other income – administrative service fee from: 
   
   
   
  

Lingxpert 
 84,000  
 84,000  
 84,000  
 10,792 

Green IPO Ltd 
 45,000  
 66,000  
 —  
 — 

Ren Restaurants Limited 
 240,000  
 240,000  
 100,000  
 12,848 

Total administrative service fee from related parties 
 369,000  
 390,000  
 184,000  
 23,640 

  
    
    
    
   

Translation cost to Lingxpert 
 4,272,333  
 3,261,056  
 3,853,053  
 495,041 

  
    
    
    
   

Flim cost to Green IPO Ltd 
 200,000  
 200,000  
 —  
 — 

 

7.C. Interests of Experts and Counsel

 

Not applicable.

 

Item
8. Financial Information

 

8.A. Consolidated Statements and Other Financial
Information

 

Please refer to “Item 18. Financial Statements.”

 

Legal and Administrative Proceedings

 

As of the date of this annual report, we and our subsidiaries had not been involved in any legal proceedings, investigations, claims
nor had we been aware of any pending or threatened litigation, arbitration or other claims which would have a material adverse impact
on the operations, financial position and reputation of us.

 

Dividend Policy

 

Cre8 BVI, our BVI holding company, has not declared
or made any dividend or other distribution to its shareholders, including U.S. investors, since its incorporation, nor have any dividends
or distributions been made by our subsidiaries to the BVI holding company. For the fiscal years ended December 31, 2023, 2024 and 2025,
neither we nor our subsidiaries have declared or made any dividend or contribution to our shareholders.

 

We anticipate that we will retain any earnings
to support operations and to finance the growth and development of our business. We currently have no plan to declare or pay any dividends
in the near future.

 

Subject to the BVI Act and our Second Amended
and Restated Memorandum and Articles of Association, our Board of Directors may, by resolution of directors, authorize and declare a
dividend to shareholders from time to time and of an amount they deem fit if they are satisfied, on reasonable grounds, that immediately
after the distribution: (a) the Company will be able to pay its debts as they fall due; and (b) the value of our assets exceeds our liabilities.
Cash dividends, if any, on our Class A Ordinary Shares will be paid in U.S. dollars. As we are a holding company, we rely on dividends
paid to us by our subsidiaries for our cash requirements, including funds to pay any dividends and other cash distributions to our shareholders,
service any debt we may incur and pay our operating expenses. Our ability to pay dividends to the shareholders will depend on, among
other things, the availability of dividends from our subsidiaries. According to the BVI Act, a BVI company may make dividends distribution
to the extent that immediately after the distribution, the value of the company’s assets exceeds its liabilities and that such
company is able to pay its debts as they fall due. There is no further British Virgin Islands statutory restriction on the amount of
funds which may be distributed by us by dividend. Even if we decide to pay dividends, the form, frequency and amount will depend upon
our future operations and earnings, capital requirements and surplus, general financial condition, contractual restrictions and other
factors that the board of directors may deem relevant.

 

8.B. Significant Changes

 

Except as otherwise disclosed in this annual
report, we have not experienced any significant changes since the date of our audited consolidated financial statements included herein.

 

 

Item
9. The Offer and Listing

 

9.A. Offer and listing details

 

Not applicable for annual reports on Form 20-F.

 

9.B. Plan of distribution

 

Not applicable for annual reports on Form 20-F.

 

9.C. Markets

 

Our Class A Ordinary Shares are listed on the
Nasdaq Capital Market under the symbol “CRE.”

 

9.D. Selling shareholders

 

Not applicable for annual reports on Form 20-F.

 

9.E. Dilution

 

Not applicable for annual reports on Form 20-F.

 

9.F. Expenses of the issue

 

Not applicable for annual reports on Form 20-F.

 

Item
10. Additional Information

 

10.A. Share Capital

 

Not applicable for annual reports on Form 20-F.

 

10.B. Memorandum and Articles of Association

 

We incorporate by reference into this annual report the description
of our Second Amended And Restated Memorandum and Articles Of Association, as currently in effect and filed as Exhibit 1.1 to this annual
report, and the description of our securities filed as Exhibit 2.1 to this annual report.

 

10.C. Material Contracts

 

Other than those described in this annual report,
we have not entered into any material agreements other than in the ordinary course of business.

 

 

10.D.
Exchange Controls

 

Hong Kong Exchange Controls

 

There is currently no restriction or limitation under the laws of Hong Kong on the conversion of Hong
Kong dollars into foreign currencies and the transfer of currencies out of Hong Kong. The foreign currency regulations of Mainland China
do not currently have any material impact on the transfer of cash between our Company and our Hong Kong subsidiaries. However, the PRC
government may impose controls on the conversion of RMB into foreign currencies and the remittance of currencies out of the PRC. Therefore,
there is a possibility that certain PRC laws and regulations, including existing laws and regulations and those enacted or promulgated
in the future were to become applicable to our Hong Kong subsidiaries in the future, and the PRC government may prevent our cash maintained
in Hong Kong from leaving or restrict the deployment of the cash into our business or for the payment of dividends in the future.

 

See “Item 3.D. Risk Factors – Risks
Related to our Corporate Structure – We rely on dividends and other distributions on equity paid by our Operating Subsidiary in
Hong Kong to fund any cash and financing requirements we may have, and any limitation on the ability of our Operating Subsidiary to make
payments to us outside of Hong Kong, due to interventions in, or the imposition of restrictions and limitations on, our or our Operating
Subsidiary’s ability by the PRC government to transfer cash in the future could have a material adverse effect on our ability to
conduct business and might materially decrease the value of our Class A Ordinary Shares or cause them to be worthless.” for more
information.

British Virgin Islands Exchange Controls

 

There are no exchange controls restrictions on
payment of dividends, interest or other payments to the holders of our Ordinary Shares or on the conduct of our operations in the BVI,
where we were incorporated. There are no BVI laws that impose any exchange controls on us or that affect the payment of dividends, interest
or other payments to nonresident holders of our ordinary shares. BVI law and our articles of association do not impose any material limitations
on the right of non-residents or foreign owners to hold or vote our Ordinary Shares.

 

PRC Exchange Controls

 

Under existing PRC foreign exchange regulations,
payment of current account items, such as profit distributions and trade and service-related foreign exchange transactions, can be made
in foreign currencies without prior approval from the SAFE, by complying with certain procedural requirements. Therefore, Cre8 China,
our Mainland China subsidiary is able to pay dividends in foreign currencies to us without prior approval from SAFE, subject to the condition
that the remittance of such dividends outside of the PRC complies with certain procedures under PRC foreign exchange regulations, such
as the overseas investment registrations by our shareholders or the ultimate shareholders of our corporate shareholders who are PRC residents.
Approval from, or registration with, appropriate government authorities is, however, required where the RMB is to be converted into foreign
currency and remitted out of Mainland China to pay capital expenses such as the repayment of loans denominated in foreign currencies.
The PRC government may also at its discretion restrict access in the future to foreign currencies for current account transactions. Current
PRC regulations permit our PRC subsidiaries to pay dividends to the Company only out of their accumulated profits, if any, determined
in accordance with Chinese accounting standards and regulations.

 

Currently and in the foreseeable future, Cre8
China solely serves and will continue to serve for our marketing and customer support purposes, and does not and will not have substantial
operations nor generate any revenue at all. However, if Cre8 China engages in any revenue-generating activities in the future, the PRC
regulations will be applicable and the approval from, or registration with, appropriate government authorities in Mainland China will
be required where the RMB is to be converted into foreign currency and remitted out of Mainland China.

 

 

10.E. Taxation

 

Material United States Federal Income Tax
Considerations

 

The following discussion is a summary of United States federal income tax considerations relating to the ownership and disposition
of our Class A Ordinary Shares by a U.S. holder (as defined below) that holds our Class A Ordinary Shares as “capital assets”
(generally, property held for investment) under the United States Internal Revenue Code of 1986, as amended (the “Code”).
This discussion is based upon existing United States federal income tax law, which is subject to differing interpretations and may
be changed, possibly with retroactive effect. No ruling has been sought from the Internal Revenue Service (the “IRS”) with
respect to any United States federal income tax consequences described below, and there can be no assurance that the IRS or a court
will not take a contrary position. This discussion does not address all aspects of United States federal income taxation that may
be important to particular investors in light of their individual circumstances, including investors subject to special tax rules (for
example, banks or other financial institutions, insurance companies, broker-dealers, pension plans, cooperatives, traders in securities
that have elected the mark-to-market method of accounting for their securities, partnerships and their partners, regulated investment
companies, real estate investment trusts, and tax-exempt organizations (including private foundations)), holders who are not U.S. holders,
holders who own (directly, indirectly, or constructively) 10% or more of our voting shares, holders who will hold their Ordinary Shares
as part of a straddle, hedge, conversion, constructive sale, or other integrated transaction for United States federal income tax
purposes, or investors that have a functional currency other than the United States dollar, all of whom may be subject to tax rules
that differ significantly from those summarized below. In addition, this discussion does not discuss any non-United States, alternative
minimum tax, state, or local tax considerations, or the Medicare tax on net investment income. Each U.S. holder is urged to consult
its tax advisors regarding the United States federal, state, local, and non-United States income and other tax considerations
with respect to the ownership and disposition of our Class A Ordinary Shares.

 

General

 

For purposes of this discussion, a “U.S.
holder” is a beneficial owner of our Class A Ordinary Shares that is, for United States federal income tax purposes, (i) an individual
who is a citizen or resident of the United States, (ii) a corporation (or other entity treated as a corporation for United States federal
income tax purposes) created in, or organized under the laws of, the United States or any state thereof or the District of Columbia,
(iii) an estate the income of which is subject to United States federal income taxation regardless of its source, or (iv) a trust (A)
the administration of which is subject to the primary supervision of a United States court and which has one or more United States persons
who have the authority to control all substantial decisions of the trust or (B) that has otherwise elected to be treated as a United
States person under applicable United States Treasury regulations.

 

If a partnership (or other entity treated as
a partnership for United States federal income tax purposes) is a beneficial owner of our Ordinary Shares, the tax treatment of a partner
in the partnership will generally depend upon the status of the partner and the activities of the partnership. Partnerships holding our
Ordinary Shares and partners in such partnerships are urged to consult their tax advisors as to the particular United States federal
income tax consequences of an investment in our Ordinary Shares.

 

 

Passive Foreign Investment Company Considerations

 

A non-United States corporation, such as our
company, will be a “passive foreign investment company,” or “PFIC,” for United States federal income tax purposes,
if, in any particular taxable year, either (i) 75% or more of its gross income for such year consists of certain types of “passive”
income or (ii) 50% or more of the average quarterly value of its assets (as determined on the basis of fair market value) during such
year produce or are held for the production of passive income. For this purpose, cash is categorized as a passive asset and the company’s
unbooked intangibles associated with active business activities may generally be classified as active assets. Passive income generally
includes, among other things, dividends, interest, rents, royalties, and gains from the disposition of passive assets. We will be treated
as owning a proportionate share of the assets and earning a proportionate share of the income of any other corporation in which we own,
directly or indirectly, at least 25% (by value) of the stock.

 

The discussion below under “Dividends”
and “Sale or Other Disposition of Ordinary Shares” is written on the basis that we will not be or become a PFIC for United
States federal income tax purposes. The United States federal income tax rules that apply if we are a PFIC for the current taxable year
or any subsequent taxable year are generally discussed below under “Passive Foreign Investment Company Rules.”

 

Dividends

 

Subject to the PFIC rules discussed below, any
cash distributions (including the amount of any tax withheld) paid on our Ordinary Shares out of our current or accumulated earnings
and profits, as determined under United States federal income tax principles, will generally be includible in the gross income of a U.S.
holder as dividend income on the day actually or constructively received by the U.S. holder. Because we do not intend to determine our
earnings and profits on the basis of United States federal income tax principles, any distribution paid will generally be reported as
a “dividend” for United States federal income tax purposes. A non-corporate recipient of dividend income will generally be
subject to tax on dividend income from a “qualified foreign corporation” at a reduced United States federal tax rate rather
than the marginal tax rates generally applicable to ordinary income provided that certain holding period requirements are met.

 

A non-United States corporation (other than a
corporation that is a PFIC for the taxable year in which the dividend is paid or the preceding taxable year) will generally be considered
to be a qualified foreign corporation (a) if it is eligible for the benefits of a comprehensive tax treaty with the United States which
the Secretary of Treasury of the United States determines is satisfactory for purposes of this provision and which includes an exchange
of information program, or (b) with respect to any dividend it pays on stock which is readily tradable on an established securities market
in the United States. In the event we are deemed to be a resident enterprise under the PRC Enterprise Income Tax Law, we may be eligible
for the benefits of the United States-PRC income tax treaty (which the U.S. Treasury Department has determined is satisfactory for this
purpose) and in that case we would be treated as a qualified foreign corporation with respect to dividends paid on our Ordinary Shares.
Each non-corporate U.S. holder is advised to consult its tax advisors regarding the availability of the reduced tax rate applicable to
qualified dividend income for any dividends we pay with respect to our Ordinary Shares. Dividends received on the Ordinary Shares will
not be eligible for the dividends received deduction allowed to corporations.

 

Dividends will generally be treated as income
from foreign sources for United States foreign tax credit purposes and will generally constitute passive category income. In the event
that we are deemed to be a PRC “resident enterprise” under the Enterprise Income Tax Law, a U.S. holder may be subject to
PRC withholding taxes on dividends paid on our Ordinary Shares. In that case, a U.S. holder may be eligible, subject to a number of complex
limitations, to claim a foreign tax credit in respect of any foreign withholding taxes imposed on dividends received on Ordinary Shares.
A U.S. holder who does not elect to claim a foreign tax credit for foreign tax withheld may instead claim a deduction, for United States
federal income tax purposes, in respect of such withholdings, but only for a year in which such U.S. holder elects to do so for all creditable
foreign income taxes. The rules governing the foreign tax credit are complex. U.S. holders are advised to consult their tax advisors
regarding the availability of the foreign tax credit under their particular circumstances.

 

 

Sale or Other Disposition of Ordinary Shares

 

Subject to the Passive Foreign Investment Company
(PFIC) rules discussed below, you will recognize taxable gain or loss on any sale, exchange or other taxable disposition of a share equal
to the difference between the amount realized (in U.S. dollars) for the share and your tax basis (in U.S. dollars) in the Ordinary Shares.
The gain or loss will be treated as a capital gain or loss. If you are a non-corporate U.S. Holder, including an individual U.S. Holder,
who has held the Ordinary Shares for more than one year, you will be eligible for reduced tax rates. The deductibility of capital losses
is subject to limitations. Any such gain or loss that you recognize will generally be treated as United States source income or loss
for foreign tax credit limitation purposes.

 

Passive Foreign Investment Company Rules

 

Based on our current and anticipated operations
and the composition of our assets, we were not PFIC for U.S. federal income tax purposes. It is possible that, for our taxable year or
for any subsequent year, more than 50% of our assets may be assets which produce passive income, in which case we would be deemed a PFIC,
which could have adverse US federal income tax consequences for US taxpayers who are shareholders. We will make this determination following
the end of any particular tax year. PFIC status is a factual determination for each taxable year which cannot be made until the close
of the taxable year. A non-U.S. corporation is considered a PFIC, as defined in Section 1297(a) of the US Internal Revenue Code (“IRC”),
for any taxable year if either:

 

 
●
at least 75% of its gross income is passive income; or

 

 
●
at least 50% of the value of its assets (based on an average of the
quarterly values of the assets during a taxable year) is attributable to assets that produce or are held for the production of passive
income (the “asset test”).

 

We will be treated as owning our proportionate
share of the assets and earning our proportionate share of income of any other corporation in which we own, directly or indirectly, at
least 25% (by value) of the stock.

 

We must make a separate determination each year
as to whether we are a PFIC, however, and there can be no assurance with respect to our status as a PFIC for our current taxable year
or any future taxable year. It is possible that, for our current taxable year or for any subsequent taxable year, more than 50% of our
assets may be assets held for the production of passive income. We will make this determination following the end of any particular tax
year. In addition, because the value of our assets for purposes of the asset test will generally be determined based on the market price
of our Ordinary Shares and because cash is generally considered to be an asset held for the production of passive income, our PFIC status
will depend in large part on the market price of our Ordinary Shares and the amount of cash we raise in the Follow-on Offering. Accordingly,
fluctuations in the market price of the Ordinary Shares may cause us to become a PFIC. In addition, the application of the PFIC rules
is subject to uncertainty in several respects and the composition of our income and assets will be affected by how, and how quickly,
we spend the cash we raise in the Follow-on Offering. We are under no obligation to take steps to reduce the risk of our being classified
as a PFIC, and as stated above, the determination of the value of our assets will depend upon material facts (including the market price
of our Ordinary Shares from time to time and the amount of cash we raise in the Follow-on Offering) that may not be within our control.
If we are a PFIC for any year during which you hold Ordinary Shares, we will continue to be treated as a PFIC for all succeeding years
during which you hold Ordinary Shares. If we cease to be a PFIC and you did not previously make a timely “mark-to-market”
election as described below, you will continue to be treated as a PFIC, however, you may avoid some of the adverse effects of the PFIC
regime by making a “purging election” (as described below) with respect to the Ordinary Shares.

 

 

If we are a PFIC for any taxable year during
which you hold Ordinary Shares, you will be subject to special tax rules with respect to any “excess distribution” that you
receive and any gain you realize from a sale or other disposition (including a pledge) of the Ordinary Shares, unless you make a “mark-to-market”
election as discussed below. Distributions you receive in a taxable year that are greater than 125% of the average annual distributions
you received during the shorter of the three preceding taxable years or your holding period for the Ordinary Shares will be treated as
an excess distribution. Under these special tax rules:

 

 
●
the excess distribution or gain will be allocated ratably over your
holding period for the Ordinary Shares;

 

 
●
the amount allocated to the current taxable year, and any taxable year
prior to the first taxable year in which we were a PFIC, will be treated as ordinary income,

 

 
●
the amount allocated to each other year will be subject to the highest
tax rate in effect for that year and the interest charge generally applicable to underpayments of tax will be imposed on the resulting
tax attributable to each such year, and

 

 
●
an additional tax equal to the interest charge generally applicable
to underpayments of tax will be imposed on the tax attributable to each prior taxable year, other than a pre-PFIC year.

  

The tax liability for amounts allocated to years
prior to the year of disposition or “excess distribution” cannot be offset by any net operating losses for such years, and
gains (but not losses) realized on the sale of the Ordinary Shares cannot be treated as capital, even if you hold the Ordinary Shares
as capital assets.

 

A U.S. Holder of “marketable stock”
(as defined below) in a PFIC may make a mark-to-market election for such stock to elect out of the tax treatment discussed above. If
you make a mark-to-market election for the Ordinary Shares, you will include in income each year an amount equal to the excess, if any,
of the fair market value of the Ordinary Shares as of the close of your taxable year over your adjusted basis in such Ordinary Shares.
You are allowed a deduction for the excess, if any, of the adjusted basis of the Ordinary Shares over their fair market value as of the
close of the taxable year. However, deductions are allowable only to the extent of any net mark-to-market gains on the Ordinary Shares
included in your income for prior taxable years. Amounts included in your income under a mark-to-market election, as well as gain on
the actual sale or other disposition of the Ordinary Shares, are treated as ordinary income. Ordinary loss treatment also applies to
the deductible portion of any mark-to-market loss on the Ordinary Shares, as well as to any loss realized on the actual sale or disposition
of the Ordinary Shares, to the extent that the amount of such loss does not exceed the net mark-to-market gains previously included for
such Ordinary Shares. Your basis in the Ordinary Shares will be adjusted to reflect any such income or loss amounts. If you make a valid
mark-to-market election, the tax rules that apply to distributions by corporations which are not PFICs would apply to distributions by
us, except that the lower applicable capital gains rate for qualified dividend income discussed above under “— Taxation of
Dividends and Other Distributions on our Ordinary Shares” generally would not apply.

 

The mark-to-market election is available only
for “marketable stock”, which is stock that is traded in other than de minimis quantities on at least 15 days during each
calendar quarter (“regularly traded”) on a qualified exchange or other market (as defined in applicable U.S. Treasury regulations),
including the Nasdaq Capital Market. If the Ordinary Shares are regularly traded on the Nasdaq Capital Market and if you are a holder
of Ordinary Shares, the mark-to-market election would be available to you were we to be or become a PFIC.

 

 

Alternatively, a U.S. Holder of stock in a PFIC
may make a “qualified electing fund” election with respect to such PFIC to elect out of the tax treatment discussed above.
A U.S. Holder who makes a valid qualified electing fund election with respect to a PFIC will generally include in gross income for a
taxable year such holder’s pro rata share of the corporation’s earnings and profits for the taxable year. However, the qualified
electing fund election is available only if such PFIC provides such U.S. Holder with certain information regarding its earnings and profits
as required under applicable U.S. Treasury regulations. We do not currently intend to prepare or provide the information that would enable
you to make a qualified electing fund election. If you hold Ordinary Shares in any year in which we are a PFIC, you will be required
to file U.S. Internal Revenue Service Form 8621 regarding distributions received on the Ordinary Shares and any gain realized on the
disposition of the Ordinary Shares. If you do not make a timely “mark-to-market” election (as described above), and if we
were a PFIC at any time during the period you hold our Ordinary Shares, then such Ordinary Shares will continue to be treated as stock
of a PFIC with respect to you even if we cease to be a PFIC in a future year, unless you make a “purging election” for the
year we cease to be a PFIC. A “purging election” creates a deemed sale of such Ordinary Shares at their fair market value
on the last day of the last year in which we are treated as a PFIC. The gain recognized by the purging election will be subject to the
special tax and interest charge rules treating the gain as an excess distribution, as described above. As a result of the purging election,
you will have a new basis (equal to the fair market value of the Ordinary Shares on the last day of the last year in which we are treated
as a PFIC) and holding period (which new holding period will begin the day after such last day) in your Ordinary Shares for tax purposes.

 

IRC Section 1014(a) provides for a step-up in
basis to the fair market value for our Ordinary Shares when inherited from a decedent that was previously a holder of our Ordinary Shares.
However, if we are determined to be a PFIC and a decedent that was a U.S. Holder did not make either a timely qualified electing fund
election for our first taxable year as a PFIC in which the U.S. Holder held (or was deemed to hold) our Ordinary Shares, or a mark-to-market
election and ownership of those Ordinary Shares are inherited, a special provision in IRC Section 1291(e) provides that the new U.S.
Holder’s basis should be reduced by an amount equal to the IRC Section 1014 basis minus the decedent’s adjusted basis just
before death. As such if we are determined to be a PFIC at any time prior to a decedent’s passing, the PFIC rules will cause any
new U.S. Holder that inherits our Ordinary Shares from a U.S. Holder to not get a step-up in basis under IRC Section 1014 and instead
will receive a carryover basis in those Ordinary Shares.

 

You are urged to consult your tax advisors regarding
the application of the PFIC rules to your investment in our Ordinary Shares and the elections discussed above.

 

Information Reporting

 

Dividend payments with respect to our Ordinary
Shares and proceeds from the sale, exchange or redemption of our Ordinary Shares may be subject to information reporting to the U.S.
Internal Revenue Service and possible U.S. backup withholding at a current rate of 24%. Backup withholding will not apply, however, to
a U.S. Holder who furnishes a correct taxpayer identification number and makes any other required certification on U.S. Internal Revenue
Service Form W-9 or who is otherwise exempt from backup withholding. U.S. Holders who are required to establish their exempt status generally
must provide such certification on U.S. Internal Revenue Service Form W-9. U.S. Holders are urged to consult their tax advisors regarding
the application of the U.S. information reporting and backup withholding rules.

 

Backup withholding is not an additional tax.
Amounts withheld as backup withholding may be credited against your U.S. federal income tax liability, and you may obtain a refund of
any excess amounts withheld under the backup withholding rules by filing the appropriate claim for refund with the U.S. Internal Revenue
Service and furnishing any required information. We do not intend to withhold taxes for individual shareholders. However, transactions
effected through certain brokers or other intermediaries may be subject to withholding taxes (including backup withholding), and such
brokers or intermediaries may be required by law to withhold such taxes.

 

 

Under the Hiring Incentives to Restore Employment
Act of 2010, certain U.S. Holders are required to report information relating to our Ordinary Shares, subject to certain exceptions (including
an exception for Ordinary Shares held in accounts maintained by certain financial institutions), by attaching a complete Internal Revenue
Service Form 8938, Statement of Specified Foreign Financial Assets, with their tax return for each year in which they hold Ordinary Shares.
Failure to report the information could result in substantial penalties. You should consult your own tax advisor regarding your obligation
to file Form 8938.

 

Hong Kong Taxation

 

Profits Tax

 

No tax is imposed in Hong Kong in respect of
capital gains from the sale of property, such as our Ordinary Shares. Generally, gains arising from disposal of the Ordinary Shares which
are held more than two years are considered capital in nature. However, trading gains from the sale of property by persons carrying on
a trade, profession or business in Hong Kong where such gains are derived from or arise in Hong Kong from such trade, profession or business
will be chargeable to Hong Kong profit tax. Liability for Hong Kong profits tax would therefore arise in respect of trading gains from
the sale of Ordinary Shares realized by persons in the course of carrying on a business of trading or dealing in securities in Hong Kong
where the purchase or sale contracts are effected (being negotiated, concluded and/or executed) in Hong Kong. Effective from April 1,
2018, profits tax is levied on a two-tiered profits tax rate basis, with the first HK$2 million of profits being taxed at 8.25% for corporations
and 7.5% for unincorporated businesses, and profits exceeding the first HK$2 million being taxed at 16.5% for corporations and 15% for
unincorporated businesses.

 

In addition, Hong Kong does not impose withholding
tax on gains derived from the sale of stock in Hong Kong companies and does not impose withholding tax on dividends paid outside of Hong
Kong by Hong Kong companies. Accordingly, investors will not be subject to Hong Kong withholding tax with respect to a disposition of
their Ordinary Shares or with respect to the receipt of dividends on their Ordinary Shares, if any. No income tax treaty relevant to
the acquiring, withholding or dealing in the Ordinary Shares exists between Hong Kong and the United States.

 

Stamp duty

 

Hong Kong stamp duty is generally payable on
the transfer of “Hong Kong stocks”. The term “stocks” refers to shares in companies incorporated in Hong Kong,
as widely defined under the Stamp Duty Ordinance (Cap. 117 of the laws of Hong Kong), or SDO, and includes shares. However, our Ordinary
Shares are not considered “Hong Kong stocks” under the SDO since the transfer of the Ordinary Shares are not required to
be registered in Hong Kong given that the books for the transfer of Ordinary Shares are located in the United States. The transfer of
Ordinary Shares is therefore not subject to stamp duty in Hong Kong. If Hong Kong stamp duty applies, both the purchaser and the seller
are liable for the stamp duty charged on each of the sold note and bought note at the ad valorem rate of 0.1% on the higher of the consideration
stated on the contract notes or the fair market value of the shares transferred. In addition, a fixed duty, currently of HK$5.00, is
payable on an instrument of transfer.

 

BVI Taxation

 

The following is a discussion on certain British Virgin Islands income tax consequences of an investment in our securities. The discussion
is a general summary of present law, which is subject to prospective and retroactive change. It is not intended as tax advice, does not
consider any investor’s particular circumstances, and does not consider tax consequences other than those arising under British
Virgin Islands law.

 

 

Payments of dividends and capital in respect
of our securities will not be subject to taxation in the British Virgin Islands and no withholding will be required on the payment of
a dividend or capital to any holder of the securities nor will gains derived from the disposal of the securities be subject to British
Virgin Islands income or corporation tax.

 

The British Virgin Islands currently levies no
taxes on individuals or corporations based upon profits, income, gains or appreciation and there is no taxation in the nature of inheritance
tax or estate duty. There are no other taxes likely to be material to us levied by the Government of the British Virgin Islands except
to the extent that we have any interest in real property in the BVI, all instruments relating to transactions in respect of the shares,
debt obligations or other securities of the Company and all instruments relating to other transactions relating to the business of the
Company are exempt from the payment of stamp duty in the BVI. There are no exchange control regulations or currency restrictions in the
British Virgin Islands. Under the laws of the British Virgin Islands, no stamp duty is payable in the British Virgin Islands on the issue
of shares by, or any transfers of shares of, British Virgin Islands companies (except those which hold interests in land in the British
Virgin Islands).

 

There are currently no withholding taxes or exchange
control regulations in the BVI applicable to our Company.

 

10.F. Dividends and Paying Agents

 

Not applicable for annual reports on Form 20-F.

 

10.G. Statement by Experts

 

Not applicable for annual reports on Form 20-F.

 

10.H. Documents on Display

 

We are subject to the information requirements
of the Exchange Act. In accordance with these requirements, the Company files reports and other information with the SEC. You may read
and copy any materials filed with the SEC at the Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. You may obtain
information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also maintains a web site at
http://www.sec.gov that contains reports and other information regarding registrants that file electronically with the SEC.

 

As a foreign private issuer, we are exempt from the proxy requirements of Section 14 of the Exchange Act and our officers, directors
and principal shareholders will be exempt from the insider short-swing disclosure and profit recovery rules of Section 16 of the Exchange
Act. On December 18, 2025, President Trump signed into law the Holding Foreign Insiders Accountable Act (HFIAA), which eliminates the
exemption to comply with Section 16 of the Exchange Act. The new law took effect on March 18, 2026. Directors and officers of foreign
private issuers are required to publicly report their ownership in, and transactions involving, the applicable foreign private issuer’s
securities to the SEC on Forms 3, 4, and 5.

 

10.I. Subsidiary Information

 

Not applicable.

 

 

Item
11. Quantitative and Qualitative Disclosures About Market Risk 

 

Foreign Currency Risk

 

Foreign currency risk is the risk of holding
of foreign currency assets will affect the Company’s financial position as a result of a change in foreign currency exchange rates.

 

The Company’s monetary assets and liabilities
are mainly denominated in HK$, US$ and RMB, which are the same as the functional currencies of the relevant Company entities. Hence,
the currency risk is considered insignificant. The Company currently does not have a foreign currency hedging policy to eliminate the
currency exposures. However, the Company monitors the related foreign currency exposures closely to consider the need for hedging.

 

Interest Rate Risk

 

The Company’s exposure to fair value interest
rate risk mainly arises from its fixed deposits with banks. It also has exposure to cash flow interest rate risk which mainly arises
from its deposits with banks.

 

In respect of the exposure to cash flow interest
rate risk arising from the floating rate of non-derivative financial instruments held by the Company, such as cash, at the end of the
reporting period, the Company is not exposed to significant interest rate risk as the interest rates of cash at bank are not expected
to change significantly

 

Credit Risk

 

The assets that are potentially subject to a
significant concentration of credit risk primarily consist of cash and accounts receivable.

 

The Company believes that there is no significant
credit risk associated with cash in Hong Kong, which were held by reputable financial institutions in the jurisdiction where Cre8 Hong
Kong is located. The Hong Kong Deposit Protection Board pays compensation up to a limit of HK$800,000 (approximately US$102,784) if a
bank, which an individual/a company deposits with, fails. As of December 31, 2025, cash balance of HK$53,848,459 (US$6,918,461) was maintained
at financial institutions in Hong Kong and approximately HK$2,400,000 (US$308,352) was insured by the Hong Kong Deposit Protection Board.

 

As of December 31, 2025, HK$753,506 (US$96,811)
was deposited with financial institutions located in the PRC, and each bank is insured by the government authority with the maximum limit
of RMB500,000 (equivalent to US$71,499) for all accounts held with that bank.

 

The Company has designed credit policies with
an objective to minimize their exposure to credit risk. The accounts receivable are short term in nature and the associated risk is minimal.
The Company conducts credit evaluations on customers and generally requires certain amounts of deposits after signing the contracts.
The Company periodically evaluates the creditworthiness of the existing customers in determining an allowance for expected credit losses
primarily based upon the age of the receivables and factors surrounding the credit risk of specific customers.

 

 

Item
12. Description of Securities Other than Equity Securities

 

12.A. Debt Securities

 

Not applicable.

 

12.B. Warrants and Rights

 

Not applicable.

 

12.C. Other Securities

 

Not applicable.

 

12.D. American Depositary Shares

 

Not applicable.

 

 

PART II

 

Item
13. Defaults, Dividend Arrearages and Delinquencies

 

We do not have any material
defaults, dividend arrearages or delinquencies. 

 

Item
14. Material Modifications to the Rights of Securities Holders and Use of Proceeds

 

14.A. – 14.D. Material Modifications to the
Rights of Security Holders

 

See “Item 10. Additional Information”
for a description of the rights of shareholders, which remain unchanged.

 

14.E. Use of Proceeds

 

The following “Use of Proceeds” information
relates to the registration statement on Form F-1 (File No. 333-281629), as amended, which was declared effective by the SEC on March
31, 2025 and post-effective amendments thereto were subsequently declared effective by the SEC on July 22, 2025, for the Company’s
initial public offering which was completed on July 24, 2025. In its initial public offering, the Company issued a total of 1,667,500
Class A Ordinary at the public offering price of $4.00 per Class A Ordinary Share. American Trust Investment Services, Inc. acted as the
representative of the underwriters. Including the full exercise of the over-allotment option for 217,500 Class A Ordinary Shares, the
Company received aggregate gross proceeds of approximately $6.67 million. After deducting underwriting discounts, commissions, and other
offering expenses, the net proceeds to the Company were approximately HK$38,907,534 (US$4,956,500).

 

The unutilized net proceeds received from our IPO were mainly kept
as bank deposits. As of December 31, 2025, we had utilized approximately US$1.4 million, approximately US$0.1 million and approximately
US$0.9 million for expanding our business, upgrading our IT system and working capital and other general corporate purposes, respectively
None of the net proceeds from our Offering were paid directly or indirectly to any of our directors, officers, or their associates, or
to persons owning 10% or more of our common equity or any of our affiliates.

 

Item
15. Controls and Procedures

 

(a) Disclosure Controls and Procedures

 

Our management, with the participation of our
chief executive officer and chief financial officer, has performed an evaluation of the effectiveness of our disclosure controls and procedures
(as defined in Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this Annual Report, as required by Rule 13a-15(b)
under the Exchange Act.

 

Based upon that evaluation, our management has concluded that, as of
December 31, 2025, our disclosure controls and procedures were effective.

 

 

(b) Management’s Annual Report on Internal
Control over Financial Reporting 

 

Our management is responsible for establishing
and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15 (f) under the Exchange Act. Our management,
with the participation of our chief executive officer and our chief financial officer, evaluated the effectiveness of our internal control
over financial reporting based on criteria established in the framework in Internal Control—Integrated Framework (2013) issued by
the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, our management has concluded that our
internal control over financial reporting was effective as of December 31, 2025.

 

Because of its inherent limitations, internal control over financial
reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject
to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and
procedures may deteriorate.

 

(c) Attestation report of the registered public
accounting firm

 

This Annual Report does not include an attestation report of our registered
public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by
our registered public accounting firm pursuant to the rules of the SEC.

 

(d) Changes in Internal Control over Financial
Reporting

 

Other than those disclosed above, there were no changes in our internal controls over financial reporting that occurred
during the period covered by this Annual Report on Form 20-F that have materially affected, or are reasonably likely to materially affect,
our internal control over financial reporting.

 

Item
16. [Reserved]

 

Item
16A. Audit Committee Financial Expert 

 

Our Board of Directors has determined that Mr.
Ho Tung Armen HO, the Chair of our Audit Committee, qualifies as an “audit committee financial expert” within the meaning
of Item 16A of Form 20-F and meets the applicable independence requirements of Nasdaq Rule 5605(c)(2)(A)(ii) and Rule 10A-3 under the
Exchange Act.

 

Item
16B. Code of Ethics

 

The Company has adopted a Code of Business Conduct
and Ethics that applies to the Company’s directors, officers, employees and advisors. A copy of the Code of Business Conduct and
Ethics is attached as an exhibit to this annual report.

 

Item 16C. Principal Accountant
Fees and Services

 

The following table sets forth the aggregate
fees by categories specified below in connection with certain professional services rendered by WWC, P.C., our independent registered
public accounting firm, for the fiscal years ended December 31, 2025, 2024, and 2023.

 

  
Year Ended December 31, 

Services 
2025  
2024  
2023 

  
US$  
US$  
US$ 

Audit fees 
 190,000  
 220,000  
 120,000 

Total 
 190,000  
 220,000  
 120,000 

 

Audit fees represent the aggregate fees billed for the audit of our annual financial statements, review of our interim financial statements,
review of registration statements or services that are normally provided in connection with statutory and regulatory filings or engagements
for those fiscal years.

 

The policy of our audit committee is to pre-approve
all audit and non-audit services provided by our independent registered public accounting firm, including audit services and audit-related
services as described above, other than those for the minimum services which are approved by the audit committee prior to the completion
of the audit.

 

 

Item
16D. Exemptions from the Listing Standards for Audit Committees

 

Not applicable.

 

Item
16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers

 

Not applicable.

 

Item
16F. Change in Registrant’s Certifying Accountant

 

Not applicable.

 

Item
16G. Corporate Governance

 

As a company listed on the Nasdaq Capital Market,
we are subject to the Nasdaq corporate governance listing standards. However, Nasdaq rules permit a foreign private issuer like us to
follow the corporate governance practices of its home country. Certain corporate governance practices in the British Virgin Islands,
which is our home country, may differ significantly from the Nasdaq corporate governance listing standards.

 

Currently, we do not plan to rely on home country
practice with respect to our corporate governance. However, to the extent we choose to follow home country practice in the future, our
shareholders may be afforded less protection than they otherwise would under the Nasdaq corporate governance listing standards applicable
to U.S. domestic issuers. See “Item 3. Key Information — 3.D. Risk Factors — Risks Related to Our Class A Ordinary
Shares — As a foreign private issuer, we are permitted to adopt certain home country practices in relation to corporate governance
matters that differ significantly from Nasdaq corporate governance listing standards. These practices may afford less protection to shareholders
than they would enjoy if we complied fully with corporate governance listing standards.”

The “controlled company” exception to Nasdaq’s rules provides that a company of which more than 50% of the voting power
is held by an individual, group or another company, a “controlled company” need not comply with certain requirements of Nasdaq’s
corporate governance rules. As of the date of this annual report, our Controlling Shareholder, Cre8 Investment Limited, beneficially
own the majority of the voting power of our outstanding Ordinary Shares. Accordingly, we are a “controlled company”
within the meaning of the corporate governance standards of Nasdaq. Under Nasdaq rules, a “controlled company” may elect
not to comply with certain Nasdaq corporate governance requirements.

 

As a “controlled company,” we may
elect not to comply with certain corporate governance standards, including that a majority of our board of directors consist of independent
directors. For so long as we qualify as a controlled company, we may take advantage of these exemptions. Accordingly, our shareholders
may not have the same protections afforded to shareholders of companies that are subject to all of these corporate governance requirements.

 

In the event that we cease to be a “foreign
private issuer” under the rules of Nasdaq and cease to be a “controlled company” and our Class A Ordinary Shares continue
to be listed on Nasdaq, the Company’s Board of Directors will take all action necessary to comply with the corporate governance
rules of Nasdaq, including but not limited to, establishing certain committees composed entirely of independent directors, subject to
a permitted “phase-in” period.

 

Notwithstanding the Company’s status as
a foreign private issuer or a controlled company, the Company will remain subject to the corporate governance standard of Nasdaq that
requires the Company to have an audit committee with at least three independent directors as well as composed entirely of independent
directors. For purposes of the audit committee composition requirements, we must have at least one independent director on our audit
committee at the time of listing, at least two independent directors within 90 days of listing and at least three independent directors
within one year of listing, where at least one of the independent directors qualifies as an audit committee financial expert under SEC
rules and as a financially sophisticated audit committee member under the Nasdaq rule.

 

 

Item
16H. Mine Safety Disclosure

 

Not applicable.

 

Item 16I. Disclosure Regarding
Foreign Jurisdictions that Prevent Inspections.

 

Not applicable.

 

Item 16J. Insider trading
policies

 

We have adopted an Insider Trading Policy governing
the purchase, sale, and other dispositions of our securities by directors, senior management, and employees. A copy of the Insider Trading
Policy is attached as an exhibit to this annual report.

 

Item 16K. Cybersecurity

 

Risk Management, Governance, and Strategy

 

Our Board of Directors plays an active role in
monitoring cybersecurity risks and is committed to the prevention, timely detection, and mitigation of cybersecurity incidents. Our senior
management team is responsible for day-to-day cybersecurity risk management and provides regular reports to the Board on material cybersecurity
risks.

 

We and our Operating Subsidiary have implemented
stringent internal cybersecurity controls. Our IT Department, supported by an external IT consultant, manages our servers, firewall,
and IT systems. Access to data and information is granted on a need-to-know basis only. All data collected by Cre8 Hong Kong is stored
on servers located in Hong Kong and is not accessible by Cre8 China.

 

As of the date of this annual report, the Company
has not identified any material cybersecurity incidents, nor has it experienced any known breaches that have had an impact on its business,
operations, or financial condition.

 

 

PART III

 

Item
17. Financial Statements

 

See “Item 18. Financial Statements.”

 

Item
18. Financial Statements

 

Our consolidated financial statements are included at the end of this
annual report, beginning with page F-1.

 

Item
19. Exhibits

 

Exhibit
Number
 
Description

1.1*
 
Second Amended and Restated Memorandum and Articles of Association

2.1*
 
Description of Securities

4.1
 
Employment Agreement by and between the Registrant and Chi Kam Ray Lee, dated as of August 27, 2024 (incorporated herein by reference to Exhibit 10.1 to the registration statement on Form F-1 (File No. 333-281629), as amended, initially filed with the U.S. Securities and Exchange Commission on August 19, 2024)

4.2*
 
Employment Agreement by and between the Registrant and Sze Ting Cho, dated as of December 4, 2025

4.3*
 
Employment Agreement by and between the Registrant and Yuen Chung Davy Li, dated as of December 4, 2025

4.4
 
Office Rental Agreement between Cre8 (Greater China) Limited and Trillium Investment Limited, dated July 13, 2021 (incorporated herein by reference to Exhibit 10.4 to the registration statement on Form F-1 (File No. 333-281629), as amended, initially filed with the U.S. Securities and Exchange Commission on August 19, 2024)

4.5
 
Office Rental Agreement between Chuangbafang Enterprise Management (Shanghai) Company Limited and Ting Jie (Shanghai) Property Company Limited, dated July 13, 2021 (incorporated herein by reference to Exhibit 10.5 to the registration statement on Form F-1 (File No. 333-281629), as amended, initially filed with the U.S. Securities and Exchange Commission on August 19, 2024)

4.6
 
Second Office Rental Agreement between Cre8 (Greater China) Limited and Trillium Investment Limited, dated July 29, 2024 (incorporated herein by reference to Exhibit 10.6 to the registration statement on Form F-1 (File No. 333-281629), as amended, initially filed with the U.S. Securities and Exchange Commission on August 19, 2024)

4.7
 
Form of the Director Offer Letter (incorporated herein by reference to Exhibit 10.7 to the registration statement on Form F-1 (File No. 333-281629), as amended, initially filed with the U.S. Securities and Exchange Commission on August 19, 2024)

4.8
 
Share Purchase Agreement between Mr. Ng Hei Man and Cre8 Incorporation Limited (incorporated herein by reference to Exhibit 10.1 to the Registrant’s Form 6-K filed on April 2, 2026)

8.1*
 
List of Subsidiaries

11.1
 
Code of Business Conduct and Ethics (incorporated herein by reference to Exhibit 14.1 to the registration statement on Form F-1 (File No. 333-281629), as amended, initially filed with the U.S. Securities and Exchange Commission on August 19, 2024)

11.2
 
Insider Trading Policy (incorporated herein by reference to Exhibit 14.3 to the registration statement on Form F-1 (File No. 333-281629), as amended, initially filed with the U.S. Securities and Exchange Commission on August 19, 2024)

12.1*
 
Certificate of Principal Executive Officer pursuant to Rule 13a-14(a)
of the Exchange Act

12.2*
 
Certificate of Principal Financial Officer pursuant to Rule 13a-14(a)
of the Exchange Act

13.1*
 
Certificate of Principal Executive Officer pursuant to 18 U.S.C. Section
1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

13.2*
 
Certificate of Principal Financial Officer pursuant to 18 U.S.C. Section
1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

97.1
 
Executive Compensation Recovery Policy (incorporated herein by reference to Exhibit 14.2 to the registration statement on Form F-1 (File No. 333-281629), as amended, initially filed with the U.S. Securities and Exchange Commission on August 19, 2024)

101.INS
 
Inline XBRL Instance Document

101.SCH
 
Inline XBRL Taxonomy Extension Schema

101.CAL
 
Inline XBRL Taxonomy Extension Calculation

101.DEF
 
Inline XBRL Taxonomy Extension Definition

101.LAB
 
Inline XBRL Taxonomy Extension Label

101.PRE
 
Inline XBRL Taxonomy Extension Presentation

104
 
Cover Page Interactive Data File. (formatted as Inline XBRL and contained
in Exhibit 101).

 

 

 

SIGNATURES

 

The registrant hereby certifies that it meets
all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report
on its behalf.

 

 
Cre8 Enterprise Limited

 
 
 

 
By:
/s/ Sze Ting Cho

 
 
Name: 
Sze Ting Cho

 
 
Title:
Chief Executive Officer and Chairman of the Board
(Principal Executive Officer)

 

Date: April 24, 2026

 

 

CRE8 ENTERPRISE LIMITED
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

 

Contents
 
Page

Report of Independent Registered Public Accounting Firm (PCAOB ID: 1171)
 
F-2

Consolidated Balance Sheets as of December 31, 2024 and 2025
 
F-3

Consolidated Statements of Income and Comprehensive Income for the Years Ended December 31, 2023, 2024 and 2025
 
F-4

Consolidated Statements of Equity for the Years Ended
December 31, 2023, 2024 and 2025
 
F-5

Consolidated Statements of Cash Flows for the Years Ended December 31, 2023, 2024 and 2025
 
F-6

Notes to Consolidated Financial Statements
 
F-7

 

 

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM

 

To:The Board of Directors and Shareholders of Cre8 Enterprise Limited

 

Opinion on the Financial Statements

 

We have audited the accompanying consolidated
balance sheets of Cre8 Enterprise Limited and its subsidiaries (collectively the “Company”) as of December 31, 2024 and
2025 and the related consolidated statements of income and comprehensive income, equity, and cash flows for each of the years in
the three-year period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial
statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position
of the Company as of December 31, 2024 and 2025, and the results of its operations and its cash flows for each of the years
in the three-year period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States
of America.

 

Basis for Opinion

 

These consolidated financial statements are the
responsibility of the Company’s management. Our responsibility is to express an opinion on our consolidated financial statements
based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States)
(PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the
applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 

We conducted our audits in accordance with the
standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the
consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have,
nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain
an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of
the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

 

Our audits included performing procedures to assess
the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures
that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the
consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by
management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide
a reasonable basis for our opinion.

 

 

WWC, P.C.
Certified Public Accountants
PCAOB ID: 1171

 

We have served as our auditor since 2023.
San Mateo, California

 

April 24, 2026

 

 

 

CRE8 ENTERPRISE LIMITED
CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 2024 AND 2025
(Amounts in HK$ and US$, except for number of shares and per share data, or otherwise noted)

 

 
 
As
of December 31,
 

 
 
2024
 
 
2025
 
 
2025
 

 
 
HK$
 
 
HK$
 
 
US$
 

ASSETS
 
 
 
 
 
 
 
 
 

Current assets
 
 
 
 
 
 
 
 
 

Cash
and cash equivalents
 
 
13,846,932
 
 
 
54,709,136
 
 
 
7,029,041
 

Accounts
receivable, net
 
 
18,861,496
 
 
 
22,582,802
 
 
 
2,901,443
 

Prepayments
and other current assets, net
 
 
9,639,568
 
 
 
7,884,721
 
 
 
1,013,031
 

Tax
recoverable
 
 
93,358
 
 
 
—
 
 
 
—
 

Total
current assets
 
 
42,441,354
 
 
 
85,176,659
 
 
 
10,943,515
 

 
 
 
 
 
 
 
 
 
 
 
 
 

Non-current
assets
 
 
 
 
 
 
 
 
 
 
 
 

Property
and equipment, net
 
 
297,238
 
 
 
634,678
 
 
 
81,544
 

Right-of-use
assets, net
 
 
6,476,145
 
 
 
19,925,105
 
 
 
2,559,982
 

Deferred
tax assets, net
 
 
850,181
 
 
 
941,459
 
 
 
120,958
 

Long-term
rental and utility deposits, net
 
 
6,982,110
 
 
 
5,986,489
 
 
 
769,145
 

Prepayments
– non-current
 
 
—
 
 
 
3,356,822
 
 
 
431,285
 

Total
non-current assets
 
 
14,605,674
 
 
 
30,844,553
 
 
 
3,962,914
 

TOTAL
ASSETS
 
 
57,047,028
 
 
 
116,021,212
 
 
 
14,906,429
 

 
 
 
 
 
 
 
 
 
 
 
 
 

LIABILITIES
AND SHAREHOLDERS’ EQUITY
 
 
 
 
 
 
 
 
 
 
 
 

Current
liabilities
 
 
 
 
 
 
 
 
 
 
 
 

Bank
borrowings
 
 
8,871,262
 
 
 
8,081,222
 
 
 
1,038,277
 

Accounts
payable
 
 
8,590,750
 
 
 
10,804,921
 
 
 
1,388,218
 

Accounts
payable – related party
 
 
16,568
 
 
 
—
 
 
 
—
 

Contract
liabilities
 
 
8,280,290
 
 
 
13,039,765
 
 
 
1,675,352
 

Advances
from customers
 
 
451,000
 
 
 
5,812,398
 
 
 
746,778
 

Accruals
and other payables
 
 
2,898,865
 
 
 
3,667,430
 
 
 
471,192
 

Amount
due to related parties
 
 
11,558,995
 
 
 
971,214
 
 
 
124,782
 

Operating
lease liabilities
 
 
2,836,343
 
 
 
10,013,131
 
 
 
1,286,489
 

Income
tax payable
 
 
—
 
 
 
1,697,670
 
 
 
218,117
 

Total
current liabilities
 
 
43,504,073
 
 
 
54,087,751
 
 
 
6,949,205
 

 
 
 
 
 
 
 
 
 
 
 
 
 

Non-current
liabilities
 
 
 
 
 
 
 
 
 
 
 
 

Operating
lease liabilities – non-current
 
 
3,639,802
 
 
 
10,495,629
 
 
 
1,348,481
 

Total
non-current liabilities
 
 
3,639,802
 
 
 
10,495,629
 
 
 
1,348,481
 

TOTAL
LIABILITIES
 
 
47,143,875
 
 
 
64,583,380
 
 
 
8,297,686
 

 
 
 
 
 
 
 
 
 
 
 
 
 

COMMITMENTS
AND CONTINGENCIES
 
 

 

 
 
 

 

 
 
 

 

 

 
 
 
 
 
 
 
 
 
 
 
 
 

SHAREHOLDERS’
EQUITY
 
 
 
 
 
 
 
 
 
 
 
 

Class A ordinary shares, no par value per share, 27,000,000 shares authorized, and 1,500,000 shares issued and outstanding as of December 31, 2024 and 27,000,000 shares authorized, and 1,638,959 shares issued and outstanding as of December 31, 2025*
 
 
—
 
 
 
—
 
 
 
—
 

Class B ordinary shares, no par value per share, 3,000,000 shares authorized, and 375,000 shares issued and outstanding as of December 31, 2024 and 2025*
 
 
—
 
 
 
—
 
 
 
—
 

Additional
paid-in capital
 
 
5,031,196
 
 
 
41,376,047
 
 
 
5,316,003
 

Retained
earnings
 
 
5,222,366
 
 
 
10,499,726
 
 
 
1,349,007
 

Accumulated
other comprehensive losses
 
 
(350,409
)
 
 
(437,941
)
 
 
(56,267
)

TOTAL
SHAREHOLDERS’ EQUITY
 
 
9,903,153
 
 
 
51,437,832
 
 
 
6,608,743
 

TOTAL
LIABILITIES AND SHAREHOLDERS’ EQUITY
 
 
57,047,028
 
 
 
116,021,212
 
 
 
14,906,429
 

 

 

The accompanying notes are an integral part of
these consolidated financial statements.

 

 

CRE8 ENTERPRISE
LIMITED
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025
(Amounts in HK$ and US$, except for number of shares and per share data, or otherwise noted)

 

  
For the years ended December 31, 

  
2023  
2024  
2025  
2025 

  
HK$  
HK$  
HK$  
US$ 

REVENUE 
 115,285,213  
 103,820,403  
 130,932,196  
 16,822,196 

  
    
    
    
   

COST OF REVENUE 
    
    
    
   

– external 
 (63,801,949) 
 (57,967,108) 
 (72,198,081) 
 (9,276,024)

– related party 
 (4,472,333) 
 (3,461,056) 
 (3,853,053) 
 (495,041)

Total cost of revenue 
 (68,274,282) 
 (61,428,164) 
 (76,051,134) 
 (9,771,065)

GROSS PROFIT 
 47,010,931  
 42,392,239  
 54,881,062  
 7,051,131 

  
    
    
    
   

SELLING AND MARKETING EXPENSES 
    
    
    
   

Employee compensation and benefits 
 (9,325,107) 
 (8,379,333) 
 (18,865,185) 
 (2,423,803)

Commission 
 (6,231,376) 
 (5,708,609) 
 (5,236,726) 
 (672,816)

Others 
 (2,767,204) 
 (1,905,024) 
 (3,227,231) 
 (414,636)

Total selling and marketing expenses 
 (18,323,687) 
 (15,992,966) 
 (27,329,142) 
 (3,511,255)

  
    
    
    
   

GENERAL AND ADMINISTRATIVE EXPENSES 
    
    
    
   

Employee compensation and benefits 
 (5,894,041) 
 (5,460,334) 
 (7,772,017) 
 (998,550)

Depreciation 
 (765,091) 
 (451,729) 
 (32,997) 
 (4,239)

Lease expense 
 (2,854,277) 
 (2,823,919) 
 (2,632,511) 
 (338,226)

Building management fee, government rent and rate 
 (2,561,621) 
 (2,700,055) 
 (2,559,568) 
 (328,854)

Legal and professional fee 
 (1,502,443) 
 (1,555,347) 
 (4,587,440) 
 (589,395)

Provision for expected credit losses 
 (2,908,913) 
 (1,197,330) 
 (759,752) 
 (97,613)

Other expenses 
 (3,126,206) 
 (3,954,050) 
 (3,342,674) 
 (429,468)

Total general and administrative expenses 
 (19,612,592) 
 (18,142,764) 
 (21,686,959) 
 (2,786,345)

  
    
    
    
   

INCOME FROM OPERATIONS 
 9,074,652  
 8,256,509  
 5,864,961  
 753,531 

  
    
    
    
   

OTHER INCOME, NET 
    
    
    
   

Bank interest income 
 33,332  
 31,523  
 391,825  
 50,342 

Interest expense 
 (124,021) 
 (316,717) 
 (250,943) 
 (32,241)

Administrative service fee from related parties 
 369,000  
 390,000  
 184,000  
 23,640 

Administrative service fee from non-related parties 
 

—

  
 

—

  
 528,000  
 67,838 

Government subsidies 
 

—

  
 175,688  
 

—

  
 

—

 

Other (expenses) income 
 (69,235) 
 (4,516) 
 187,426  
 24,080 

Total other income, net 
 209,076  
 275,978  
 1,040,308  
 133,659 

  
    
    
    
   

INCOME BEFORE INCOME TAX EXPENSES 
 9,283,728  
 8,532,487  
 6,905,269  
 887,190 

INCOME TAX EXPENSES 
 (1,500,878) 
 (2,129,604) 
 (1,627,909) 
 (209,154)

NET INCOME 
 7,782,850  
 6,402,883  
 5,277,360  
 678,036 

  
    
    
    
   

OTHER COMPREHENSIVE INCOME 
    
    
    
   

Foreign currency translation adjustment 
 (93,266) 
 (31,962) 
 (87,532) 
 (11,246)

TOTAL COMPREHENSIVE INCOME 
 7,689,584  
 6,370,921  
 5,189,828  
 666,790 

  
    
    
    
   

Weighted average number of ordinary shares: 
    
    
    
   

Basic and diluted* 
 1,875,000  
 1,875,000  
 1,935,996  
 1,935,996 

Earnings per share – basic and diluted* 
 4.15  
 3.41  
 2.73  
 0.35 

 

 

The accompanying notes are an integral part of
these consolidated financial statements.

 

 

CRE8 ENTERPRISE
LIMITED
CONSOLIDATED STATEMENTS OF EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025
(Amounts in HK$ and US$, except for number of shares and per share data, or otherwise noted)

 

  
Ordinary shares*  
   
   
Retained  
Accumulated  
Total 

  
Class A –
no. of
shares  
Amount  
Class B –
no. of
shares  
Amount  
Subscription
receivable  
Additional
paid-in
capital  
earnings
(accumulated
deficit)  
other
comprehensive
losses  
shareholders’
equity
(deficit) 

  
   
HK$  
   
HK$  
HK$  
HK$  
HK$  
HK$  
HK$ 

BALANCE, January 1, 2023 
 1,500,000  
 

—

  
 375,000  
 

—

  
 (31,196) 
 5,031,196  
 (8,963,367) 
 (225,181) 
 (4,188,548)

Net income 
 —  
 

—

  
 —  
 

—

  
 

—

  
 

—

  
 7,782,850  
 

—

  
 7,782,850 

Foreign currency translation 
 —  
 

—

  
 —  
 

—

  
 

—

  
 

—

  
 

—

  
 (93,266) 
 (93,266)

Subscription received 
 —  
 

—

  
 —  
 

—

  
 31,196  
 

—

  
 

—

  
 

—

  
 31,196 

BALANCE, December 31, 2023 
 1,500,000  
 

—

  
 375,000  
 

—

  
 

—

  
 5,031,196  
 (1,180,517) 
 (318,447) 
 3,532,232 

Net income 
 —  
 

—

  
 —  
 

—

  
 

—

  
 

—

  
 6,402,883  
 

—

  
 6,402,883 

Foreign currency translation 
 —  
 

—

  
 —  
 

—

  
 

—

  
 

—

  
 

—

  
 (31,962) 
 (31,962)

BALANCE, December 31, 2024 
 1,500,000  
 

—

  
 375,000  
 

—

  
 

—

  
 5,031,196  
 5,222,366  
 (350,409) 
 9,903,153 

Net income 
 —  
 

—

  
 —  
 

—

  
 

—

  
 

—

  
 5,277,360  
 

—

  
 5,277,360 

Initial public offering, net 
 138,959  
 

—

  
 —  
 

—

  
 

—

  
 36,344,851  
 

—

  
 

—

  
 36,344,851 

Foreign currency translation 
 —  
 

—

  
 —  
 

—

  
 

—

  
 

—

  
 

—

  
 (87,532) 
 (87,532)

BALANCE, December 31, 2025 
 1,638,959  
 

—

  
 375,000  
 

—

  
 

—

  
 41,376,047  
 10,499,726  
 (437,941) 
 51,437,832 

BALANCE, December 31, 2025 (US$) 
    
 

—

  
    
 

—

  
 

—

  
 5,316,003  
 1,349,007  
 (56,267) 
 6,608,743 

 

 

The accompanying notes are an integral part of
these consolidated financial statements.

 

 

CRE8 ENTERPRISE LIMITED
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2023, 2024 AND 2025
(Amounts in HK$ and US$, except for number of shares and per share data, or otherwise noted)

 

 

 

 
 
For the years ended December 31,
 

 
 
2023
 
 
2024
 
 
2025
 
 
2025
 

 
 
HK$
 
 
HK$
 
 
HK$
 
 
US$
 

Cash flows from operating activities
 
 
 
 
 
 
 
 
 
 
 
 

Net income
 
 
7,782,850
 
 
 
6,402,883
 
 
 
5,277,360
 
 
 
678,036
 

Adjustments to reconcile net income to net cash provided by operating activities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Depreciation – property and equipment
 
 
1,167,514
 
 
 
706,691
 
 
 
382,243
 
 
 
49,111
 

Provision for expected credit losses
 
 
2,908,913
 
 
 
1,197,330
 
 
 
759,752
 
 
 
97,613
 

Gain on disposal of plant and equipment
 
 
—
 
 
 
—
 
 
 
(9,000
)
 
 
(1,156
)

(Reversal) provision for unused annual leave
 
 
(67,843
)
 
 
(23,325
)
 
 
82,056
 
 
 
10,543
 

(Reversal) provision for long service payment
 
 
(2,624,862
)
 
 
(1,029,501
)
 
 
436,391
 
 
 
56,068
 

Deferred tax expenses (credit)
 
 
1,500,878
 
 
 
1,220,451
 
 
 
(91,278
)
 
 
(11,727
)

Changes in operating assets and liabilities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Accounts receivable
 
 
(2,018,707
)
 
 
9,493,529
 
 
 
(4,481,058
)
 
 
(575,727
)

Rental and utility deposits, prepayments and other current assets
 
 
(820,527
)
 
 
(3,960,807
)
 
 
(5,715,755
)
 
 
(734,361
)

Accounts payable
 
 
(77,052
)
 
 
(4,249,224
)
 
 
2,197,603
 
 
 
282,348
 

Contract liabilities
 
 
796,743
 
 
 
823,777
 
 
 
4,759,475
 
 
 
611,498
 

Advances from customers
 
 
24,475
 
 
 
201,000
 
 
 
5,361,398
 
 
 
688,833
 

Accruals and other payables
 
 
(1,891,701
)
 
 
(4,570,471
)
 
 
786,130
 
 
 
101,002
 

Income tax (payable) recoverable
 
 
(1,203,516
)
 
 
768,471
 
 
 
1,791,028
 
 
 
230,112
 

Net cash generated from operating activities
 
 
5,477,165
 
 
 
6,980,804
 
 
 
11,536,345
 
 
 
1,482,193
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Cash flows from investing activities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Purchase of property and equipment
 
 
(191,005
)
 
 
(134,709
)
 
 
(717,341
)
 
 
(92,164
)

Proceed from disposal of property, plant and equipment
 
 
—
 
 
 
—
 
 
 
9,000
 
 
 
1,156
 

Net cash used in investing activities
 
 
(191,005
)
 
 
(134,709
)
 
 
(708,341
)
 
 
(91,008
)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Cash flows from financing activities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Proceed of bank loan
 
 
9,000,000
 
 
 
—
 
 
 
—
 
 
 
—
 

Proceeds from IPO, net
 
 
—
 
 
 
—
 
 
 
45,131,640
 
 
 
5,798,522
 

Repayment of bank loan
 
 
(20,800,000
)
 
 
(128,738
)
 
 
(790,040
)
 
 
(101,505
)

Repayment from related parties
 
 
5,619,125
 
 
 
—
 
 
 
—
 
 
 
—
 

Advance from related parties
 
 
16,460,422
 
 
 
—
 
 
 
—
 
 
 
—
 

Repayment to related parties
 
 
—
 
 
 
(4,901,426
)
 
 
(10,587,781
)
 
 
(1,360,320
)

Deferred initial public offering (“IPO”) cost
 
 
(1,598,424
)
 
 
(2,696,953
)
 
 
(3,648,914
)
 
 
(468,813
)

Net cash provided by (used in) financing activities
 
 
8,681,123
 
 
 
(7,727,117
)
 
 
30,104,905
 
 
 
3,867,884
 

Net change in cash and cash equivalent
 
 
13,967,283
 
 
 
(881,022
)
 
 
40,932,909
 
 
 
5,259,069
 

Effect of changes in foreign exchange rate
 
 
(63,277
)
 
 
(24,181
)
 
 
(70,705
)
 
 
(9,085
)

Cash and cash equivalent at the beginning of the year
 
 
848,129
 
 
 
14,752,135
 
 
 
13,846,932
 
 
 
1,779,057
 

Cash and cash equivalent at the end of the year
 
 
14,752,135
 
 
 
13,846,932
 
 
 
54,709,136
 
 
 
7,029,041
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Supplementary cash flow information
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Interest received
 
 
33,332
 
 
 
31,523
 
 
 
391,825
 
 
 
50,342
 

Interest paid
 
 
(254,406
)
 
 
(316,717
)
 
 
(250,943
)
 
 
(32,241
)

Income tax (paid) refund
 
 
(1,203,516
)
 
 
(140,682
)
 
 
71,841
 
 
 
9,230
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Supplementary schedule of non-cash investing activities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Initial recognition of operating lease liabilities related to right-of-use-assets
 
 
1,564,098
 
 
 
5,308,803
 
 
 
22,934,609
 
 
 
2,946,643
 

 

 

The accompanying notes are an integral part of
these consolidated financial statements.

 

 

CRE8 ENTERPRISE LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

1.organization and
principal activities

 

Business

 

Cre8 Enterprise Limited (the “Company”)
is a limited liability company incorporated in British Virgin Islands (“BVI”) on December 4, 2023. The Company, through its
consolidated subsidiary, Cre8 (Greater China) Limited (“Cre8 Hong Kong”) in Hong Kong, is principally engaged in provision
of integrated financial printing services for listed companies, initial public offering (“IPO”) applicants and private companies
in the finance and capital market in Hong Kong. The Company has a wholly owned subsidiary, Chuangbafang Enterprise Management (Shanghai)
Company Limited (“Chuangbafang”) in the People’s Republic of China (“PRC”), as a promotion centre in PRC.

 

Organization and reorganization

 

For the purpose of the initial listing of shares
of the Company, the companies comprising the Group underwent the group reorganization (“Group Reorganization”) as described
below:

 

  (i) Cre8 Hong Kong, the operating subsidiary with limited liability under the laws of Hong Kong, was incorporated by Cre8 Investments Limited on September 16, 2006. Mr. Seng Jin Lee (“Mr. Lee”), Mr. Kit Ying Sham (“Mr. Sham”, father-in-law of Mr. Lee) and Xian Hong Jordan Lee (“Mr. Jordan Lee”, son of Mr. Lee) (together the “Ultimate Controlling Shareholders”), each of them holding 57.14%, 28.57% and 14.29% of equity interest of Cre8 Investments Limited, respectively.

 

  (ii) On December 4, 2023, the Company was incorporated in the BVI with limited liability and an authorized share capital of 180,000 class A shares and 20,000 class B shares with no par value per share. One class A share represents one voting right and one class B share represents 20 voting rights.

 

  (iii) On December 6, 2023, Cre8 Incorporation Limited was incorporated in the BVI with limited liability and an authorized share capital of 50,000 ordinary shares with no par value each. At the same date, one share was allotted and issued to the Company by Cre8 Incorporation Limited.

 

  (iv) On December 12, 2023, the Company became the holding company of the group which involved the transfer of entire equity interest of Cre8 Hong Kong, which are wholly-owned by Cre8 Investments Limited, in exchange for an allotment and issuance of 2,500 Class B ordinary shares of the Company. The Company, together with its wholly owned subsidiaries, are effectively controlled by the same group of Controlling Shareholders, i.e., ultimately held as to 100.00% and 89.29% by the Ultimate Controlling Shareholders, before and after the Group Reorganization and therefore the Group Reorganization is considered as a recapitalization of entities under common control. The consolidated statements of income and comprehensive income, consolidated statements of equity and consolidated statements of cash flows are prepared as if the current Company structure had been in existence throughout the two-year period ended December 31, 2024 and 2025, or since the respective dates of incorporation/establishment of the relevant entity, where this is a shorter period. The consolidated balance sheets as of December 31, 2024 and 2025 present the assets and liabilities of the companies now comprising the Company which had been incorporated/established as at the relevant balance sheet date as if the current Company structure had been in existence at those dates.

 

 

CRE8 ENTERPRISE LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

1.
organization and principal activities (cont.)

 

Upon the Group Reorganization and as at the date
of this report, details of the subsidiary companies are as follows:

 

Name   Background   Ownership Cre8 Incorporation Limited   – A BVI company   Wholly owned by the     – Established on December 6, 2023   Company     – Registered capital of 50,000 ordinary shares with no par value each         – Investment holding                 Cre8 (Greater China)   – A Hong Kong company   Wholly owned by Cre8 Limited (“Cre8 Hong Kong”)   – Established on September 16, 2006   Incorporation Limited     – Registered capital of HK$5,000,000         – provision of printing, media placement, translation and other printing related services in Hong Kong.                 Chuangbafang Enterprise   – A PRC company   Wholly owned by Management   – Established on May 11, 2021   Cre8 Hong Kong (Shanghai) Company   – Registered capital of RMB500,000     Limited (“Chuangbafang”)   – Provision of financial printing consultation services    

 

Initial Public Offering (“IPO”)

 

On July 24, 2025, the Company announced the
closing of its IPO of 1,450,000 Class A ordinary shares, with no par value per share at an offering price of US$4.00 per share for a
total of US$5,800,000 in gross proceeds. The Company raised total net proceeds of HK$38,907,534 (US$4,956,500), which was reflected
in the consolidated statements of cash flows, after deducting underwriting discounts and commissions and offering expenses. Deferred
IPO costs of HK$8,786,788 (US$1,119,365) was debited to additional paid-in capital to net off with the net proceeds from IPO. The
ordinary shares of the Company began trading on the Nasdaq Stock Market in the United States on July 23, 2025 under the Symbol
“CRE”.

 

On July 29, 2025, the Company consummated the
sales of additional 217,500 Class A ordinary shares, with no par value per share at an offering price of US$4.00 per share for a total
of US$870,000 in gross proceeds. The Company raised total net proceeds of HK$6,224,106 (US$792,900), which was reflected in the consolidated
statements of cash flows, after deducting underwriting discounts and commissions and offering expenses.

 

2.
Summary of Significant Accounting Policies

 

Basis of presentation

 

The accompanying consolidated financial statements
have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”)
for information pursuant to the rules and regulations of the Securities and Exchange Commission.

 

Principles of consolidation

 

The consolidated financial statements include
the financial statements of the Company and its subsidiaries. All transactions and balances among the Company and its subsidiaries have
been eliminated upon consolidation.

 

Use of estimates and assumptions

 

The preparation of these consolidated financial
statements requires the management of the Company to make estimates and judgments that affect the reported amounts of assets, liabilities,
revenues, costs and expenses, and related disclosures. On an on-going basis, the Company evaluates its estimates based on historical experience
and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making
judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ
from these estimates under different assumptions or conditions. Identified below are the accounting policies that reflect the Company’s
most significant estimates and judgments, and those that the Company believes are the most critical to fully understanding and evaluating
its consolidated financial statements.

 

Reclassifications

 

Certain prior period amounts have been reclassified
to conform with the current period presentation. The reclassification had no impact on net income and financial position. 

 

Functional currency and foreign currency
translation

 

The Company uses Hong Kong dollars (“HK$”)
as its reporting currency. The functional currencies of the Company and Cre8 Incorporation Limited are United States dollar (“US$”),
while Cre8 Hong Kong and Chuangbafang are HK$ and Renminbi (the “RMB”) respectively. The determination of the respective functional
currency is based on the criteria of Accounting Standards Codification (“ASC”) 830, Foreign Currency Matters.

 

 

CRE8 ENTERPRISE LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

2.
Summary of Significant Accounting Policies (cont.)

 

Transactions denominated in currencies other than
functional currency are translated into functional currency at the exchange rates quoted by authoritative banks prevailing at the dates
of the transactions. Exchange gains and losses resulting from those foreign currency transactions denominated in a currency other than
the functional currency are recorded as other income (expense), net in the consolidated statements of income and comprehensive income.

 

The consolidated financial statements of the Company are translated
from the functional currency into HK$. Assets and liabilities are translated at the exchange rates on the balance sheet date. Equity accounts
other than earnings generated in the current period are translated into HK$ using the appropriate historical rates. Revenues, expenses,
gains and losses are translated into HK$ using the periodic average exchange rate for the year. Translation adjustments are reported as
foreign currency translation adjustments and are shown as a component of other comprehensive income in the consolidated statements of
income and comprehensive income.

 

Convenience translation

 

Translations of amounts in the consolidated balance
sheets, consolidated statement of income and comprehensive income and consolidated statement of cash flows from HK$ into US$ as of and
for the year ended December 31, 2025 are solely for the convenience of the reader and were calculated at the rate of US$1 = HK$7.7833,
as published in H.10 statistical release of the United States Federal Reserve Board. No representation is made that the HK$ amounts
could have been, or could be, converted, realized or settled into US$ at such rate or at any other rate.

 

Cash and cash equivalents

 

Cash and cash equivalents consist of cash on hand
and deposit placed with banks, which are unrestricted as to withdrawal and use. The Company believes that it is not exposed to any significant
credit risk on cash and cash equivalents. The Company believes that it is not exposed to any significant credit risk in cash and cash
equivalents.

 

Account receivables, net

 

Account receivables are recorded at the net invoice
amount less estimates for expected credit losses. Management regularly reviews outstanding accounts and provides a provision for credit
loss accounts. The Company grants credit to customers, without collateral, under normal payment terms.

 

In establishing the required provision for expected
credit loss accounts, management considers historical collection experience, aging of the receivables, the economic environment, industry
trend analysis, and the credit history and financial conditions of the customers. Management reviews its receivables on a regular basis
to determine if the bad debt allowance is adequate and adjusts the allowance when necessary. Delinquent account balances are written off
against the allowance for expected credit losses after all means of collection have been exhausted and that the likelihood of collection
is not probable.

 

Allowance for expected credit losses

 

Accounting Standards Update (“ASU”) No. 2016-13, Financial
Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments requires entities
to use a current lifetime ECLs methodology to measure impairments of certain financial assets. Using this methodology will result in earlier
recognition of losses than under the current incurred loss approach, which requires waiting to recognize a loss until it is probable of
having been incurred. There are other provisions within the standard that affect how impairments of other financial assets may be recorded
and presented, and that expand disclosures.

 

 

CRE8 ENTERPRISE LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

2.
Summary of Significant Accounting Policies (cont.)

 

Prepayments and other current assets, net

 

Prepayments and other current assets, net primarily
include prepaid operating expenses and others. Management regularly reviews the aging of receivables and changes in payment trends and
records allowances when management believes collection of amounts due are at risk. Accounts considered uncollectable are written off against
allowances after exhaustive efforts at collection are made.

 

Deferred offering costs

 

The Company complies with the requirements of the ASC 340-10-S99 and
SEC Staff Accounting Bulletin (“SAB”) Topic 5A — “Expenses of Offering”. Pursuant to ASC 340-10-S99-1, IPO
costs directly attributable to an offering of equity securities are deferred and would be charged against the gross proceeds of the offering
as a reduction of additional paid-in capital. Deferred offering costs consist of professional and registration fees that are directly
related to the Proposed Public Offering. Should the in-process equity financing be abandoned, the deferred offering costs will be expensed
immediately as a charge to operating expenses in the consolidated statements of income and comprehensive income. As of December 31, 2024,
the Company has incurred deferred offering costs of HK$5,137,874. On July 24, 2025, deferred offering costs of HK$8,786,788 (US$1,119,365)
was debited to additional paid-in capital to net off with the proceeds from IPO.

 

Property and equipment, net

 

Property and equipment are stated at cost less
accumulated depreciation and any impairment losses. Major renewals, betterments, and improvements are capitalized to the asset accounts
while replacements, maintenance, and repairs, which do not improve or extend the lives of the respective assets, are expensed to operations.
At the time property and equipment are retired or otherwise disposed of, the asset and related accumulated depreciation or amortization
accounts are relieved of the applicable amounts. Gains or losses from retirements or sales are credited or charged to operations.

 

The Company depreciates property and equipment
using the straight-line method as follows:

 

Office equipment   3 – 5 years Computers   3 – 5 years Furniture and fixture   3 – 5 years Motor vehicle   3 years Leasehold improvement   Over the remaining term of the lease or 3 years, whichever is shorter

 

Impairment for long-lived assets

 

Long-lived assets, representing property and equipment
with finite lives, are reviewed for impairment whenever events or changes in circumstances (such as a significant adverse change to market
conditions that will impact the future use of the assets) indicate that the carrying value of an asset may not be recoverable. The Company
assesses the recoverability of the assets based on the undiscounted future cash flows the assets are expected to generate and recognizes
an impairment loss when estimated undiscounted future cash flows expected to result from the use of an asset plus net proceeds expected
from disposition of the asset, if any, are less than the carrying value of the asset. If an impairment is identified, the Company would
reduce the carrying amount of the asset to its estimated fair value based on a discounted cash flows approach or, when available and appropriate,
to comparable market values. As of December 31, 2024 and 2025, no impairment of long-lived assets was recognized.

 

 

CRE8 ENTERPRISE LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

2.
Summary of Significant Accounting Policies (cont.)

 

Leases

 

The Company adopted ASC 842, “Leases” (“ASC 842”)
on January 1, 2021, using the modified retrospective transition method through a cumulative-effect adjustment in the period of adoption
rather than retrospectively adjusting prior periods and the package of practical expedient. The Company categorized leases with contractual
terms longer than twelve months as either operating or finance lease.

 

Operating leases are included in operating lease
right-of-use (“ROU”) assets, operating lease liability, current and operating lease liability, non-current in the Company’s
consolidated balance sheets. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities
represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are
recognized at commencement date based on the present value of lease payments over the lease term. When determining the lease term, the
Company includes options to extend or terminate the lease when it is reasonably certain that it will exercise that option, if any. As
the Company’s leases do not provide an implicit rate, the Company used an incremental borrowing rate based on the information available
at commencement date in determining the present value of lease payments. For leases that have lease terms of 12 months or less and does
not include a purchase option that is reasonably certain to exercise, the Company elected not to apply ASC 842 recognition requirements.

 

Lease expense is recognized as depreciation and
interest; depreciation on a straight-line basis over the lease term and interest using the effective interest method.

 

Long-term rental and utility deposits, net

 

Long-term rental and utility deposits represent
security payments made to lessors and utility service providers for the Company’s entered lease agreements. The Company made such
security payments upon the commencement of the original lease agreement. The security deposit will be refunded to the Company upon the
termination or expiration of the lease agreements as well as the delivery of the vacant leased properties to the lessors by the Company.
Refundable rental and utility deposits are discounted based on interest rate of similar assets.

 

Fair value measurement

 

The accounting standard regarding fair value of
financial instruments and related fair value measurements defines financial instruments and requires disclosure of the fair value of financial
instruments held by us.

 

The accounting standards define fair value, establish
a three-level valuation hierarchy for disclosures of fair value measurement and enhance disclosure requirements for fair value measures.
The three levels are defined as follow:

 

Level 1 inputs to the valuation methodology are
quoted prices (unadjusted) for identical assets or liabilities in active markets.

 

Level 2 inputs to the valuation methodology include
quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either
directly or indirectly, for substantially the full term of the financial instruments.

 

Level 3 inputs to the valuation methodology are
unobservable and significant to the fair value.

 

Unless otherwise disclosed, fair values of the
Company’s other financial instruments including cash and cash equivalents, accounts receivable, net, prepayment, other current assets,
accounts payable, amounts due to related parties, accruals and other payables and tax recoverable are approximated to their recorded values
due to their short-term maturities. 

 

 

CRE8 ENTERPRISE LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

2.
Summary of Significant Accounting Policies (cont.)

 

Bank borrowings

 

Borrowings are initially recognized at fair value,
net of upfront fees incurred. Borrowings are subsequently measured at amortized cost. Any difference between the proceeds (net of transaction
costs) and the redemption amount is recognized in profit or loss over the period of the borrowings using the effective interest method.

 

Accounts payable

 

Accounts payable represent trade payables to vendors.
Typical payment terms set forth in ranges from 30 to 90 days from the invoice date.

 

Contract liabilities

 

Contract liability is recognized when a payment
is received or a payment is due (whichever is earlier) from a customer before the Company transfers the related goods or services. Contract
liability is recognized as revenue when the Company performs under the contract (i.e., transfers control of the related goods or services
to the customer).

 

Advances from customers

 

Advances from customers represent the non-refundable
advance payments from customers.

 

Accruals and other payables

 

Accruals and other payables primarily include
accrued expenses, and other accruals and payables.

 

Employee benefit plan

 

All salaried employees of the Company in Hong Kong
are enrolled in a Mandatory Provident Fund Scheme (“MPF scheme”) scheme under the Hong Kong Mandatory Provident Fund
Schemes Ordinance, within two months of employment. The MPF scheme is a defined contribution retirement plan administered by an independent
trustee. The Company makes 5% monthly contributions of each employee’s monthly relevant incomes to the MPF scheme, subject to a
maximum of HK$1,500 per month. Contributions to the plan vest immediately.

 

The Company provides long service payments for
its employees on cessation of employment in certain circumstances under the Hong Kong Employment Ordinance. The long service payment
obligation arises to the extent that it exceeds the employer balance in the MPF Scheme.

 

Full time employees in PRC participate in a government
mandated multi-employer defined contribution plan pursuant to which certain pension benefits, medical care, unemployment insurance and
other welfare benefits are provided to employees.

 

Related parties

 

The Company adopted ASC 850, Related Party
Disclosures, for the identification of related parties and disclosure of related party transactions.

 

Revenue recognition

 

The Company recognizes revenue in accordance with
ASC Topic 606, Revenue from Contracts with Customers, and subsequently issued additional related Accounting Standards Updates (collectively,
“ASC 606”). Revenue from contracts with customers is recognized using the following five steps:

 

 
1.
Identify the contract(s) with a customer;

 

 
2.
Identify the performance obligations in the contract;

 

 
3.
Determine the transaction price;

 

 

CRE8 ENTERPRISE LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

2.
Summary of Significant Accounting Policies (cont.)

 

 
4.
Allocate the transaction price to the performance obligations in the contract; and

 

 
5.
Recognize revenue when (or as) the entity satisfies a performance obligation.

 

The Company generating revenue from provision
of integrated financial printing services in Hong Kong. The Company enters into agreements with customers that create enforceable rights
and obligations and for which it is probable that the Company will collect the consideration to which it will be entitled as services
transfer to the customer. Revenue on oral or implied arrangements is generally not recognized. The services provided are divided into
two major type of services.

 

(a)
Integrated IPO financial printing services

 

The Company provides integrated IPO financial
printing services under contracts with customers. The Company is typically contracted through its sales team to have negotiations with
existing or potential customers, which are Hong Kong or China based companies who seeks for listing in the Stock Exchange of Hong Kong
Limited (“SEHK”). Contracts are signed before to the start of services. The Company and its customers agree on an estimated
total contract price that is specified in the contact. This price is based on the requirements of customers. As stated in the service
contract, customers consent to pay in four payments during the course of the agreement. Artwork design, typesetting, proofreading, translation,
printing, binding, logistical planning, and uploading or creating electronic submissions of customers’ prospectuses were among the
services offered.

 

The entire service fee from customers is non-refundable
and the Company is entitled to receive upfront payment upon signing the contract. The contract includes two performance obligations, which
are submission of prospectus to the SEHK and successfully listed on the SEHK. Revenue is recognized at a point in time upon completion
of each performance obligation. Revenue is also recognized when lapse of the financing printing contract. For arrangements with multiple
performance obligations, the transaction price is allocated to the separate performance obligations. As such, standalone selling price
is determined using an estimate of the standalone selling price of each distinct service, taking into consideration historical selling
price by customer for each distinct service, if available. These estimates may vary from the final amounts invoiced to the customer and
are adjusted upon completion of all performance obligations.

 

The transaction price contains a variable consideration.
The services that are rendered to customers determine the transaction price. Discounts on services rendered are offered by the Company
to its customers; these discounts are recorded as variable considerations and subtracted from revenue during the revenue recognition period.
These reductions to revenue are made based upon estimates that are determined according to historical experience and the specific terms
and conditions of the incentive. The amount of variable consideration is included in the transaction price only to the extent that it
is highly probable that such an inclusion will not result in a significant revenue reversal in the future when the uncertainty associated
with the variable consideration is subsequently resolved.

 

The Company’s invoices set forth payment
terms that require customers to make payment within in range of 14 days to 30 days of billing which is triggered by the Company reaching
the milestones to bill the customer.

 

For the years ended December 31, 2023, 2024
and 2025, the Company is not aware of any material claims against the Company in relation to services provided.

 

(b)
Non-IPO financial printing services

 

The Company engages with listed or non-listed
companies to satisfy the SEHK’s disclosure requirements or the own needs of the customers. The Company is typically contracted
through its sales team to have negotiations with existing or potential customers, which are Hong Kong or China based listed companies
in the SEHK. Non-IPO services include preparation of environmental, social and governance reports, sustainability reports, research reports,
booklets and brochures. Services include design, translation, typesetting and proofreading, printing, binding and publishing. Contracts
are entered into before the services begin.

 

 

CRE8 ENTERPRISE LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

2.
Summary of Significant Accounting Policies (cont.)

 

As the financial printing services involve a series
of tasks which are interrelated and are not separable or distinct as the Company’s customer cannot benefit from any standalone task,
the Company concludes that financial printing services to be accounted for as a single performance obligation. The entire service fee
of financial printing services is allocated to a single performance obligation. The completion of this earning process is evidenced by
a delivery of goods to customers or submissions of customers’ goods to the SEHK.

 

Revenue are recognized based on the point in time
either (a) at the time of submission of filing to the SEHK; (b) at the time of delivery the goods to the customer; or (c) lapse of
the financing printing contract.

 

The transaction price contains a variable consideration.
The services that are rendered to customers determine the transaction price. Discounts on services rendered are offered by the Company
to its customers; these discounts are recorded as variable considerations and subtracted from revenue during the revenue recognition period.
These reductions to revenue are made based upon estimates that are determined according to historical experience and the specific terms
and conditions of the incentive. The amount of variable consideration is included in the transaction price only to the extent that it
is highly probable that such an inclusion will not result in a significant revenue reversal in the future when the uncertainty associated
with the variable consideration is subsequently resolved.

 

The Company’s invoices set forth payment
terms that require customers to make payment within in range of 30 days to 120 days of billing which is triggered by the Company completing
the services or delivering the products to the customers.

 

For both integrated IPO financial printing services
and non-IPO financial printing services, the Company does not believe that its contracts include a significant financing component because
the period between delivery or the contracting services to the customer and the time of payment does not typically exceed one year.

 

The Company has no obligations for returns,
refunds or similar obligations of its services or products to customers. For the years ended December 31, 2023, 2024 and 2025, the
Company is not aware of any material claims against the Company in relation to services provided.

 

Cost of revenue

 

Cost of revenue of printing products, which are
directly related to revenue generating transactions, primarily consists of direct material cost such as paper cost, labor cost, subcontracting
fee and allocated overhead.

 

Selling and marketing expenses

 

Selling and marketing expenses consist primarily
of staff cost, commission to internal staff, advertising expense and other expenses related to selling and marketing activities.

 

General and administrative expenses

 

General and administrative expenses consist primarily
of staff costs, including salaries and related social insurance costs for administrative and support personnel, office rental and property
management fees, depreciation, professional services fees, bank charge, utilities, entertainment expense, office expense and expenses
related to general operations.

 

Interest income

 

Interest income is mainly generated from savings
and time deposits which are less than one year, and is recognized on an accrual basis using the effective interest method. Interest income
receives from banks on a monthly basis.

 

Government subsidies

 

Government subsidies are recognized as income
in other income, net or as a reduction of specific costs and expenses for which the subsidies are intended to compensate. Such amounts
are recognized in the consolidated statements of loss and loss upon receipt and when all conditions attached to the subsidies, such as
companies are required to stay at the same level of employment and contributed to the approved project, are fulfilled. Such grants are
presented under other income. During the years ended December 31, 2023, 2024 and 2025, the Company recognized government subsidies
of nil, HK$175,688 and nil, respectively, in the other income of consolidated statements of income and comprehensive income.

 

 

CRE8 ENTERPRISE LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

2.
Summary of Significant Accounting Policies (cont.)

 

Income taxes

 

The Company accounts for income taxes pursuant
to ASC Topic 740, Income Taxes. Income taxes are provided on an asset and liability approach for financial accounting and reporting
of income taxes. Any tax paid by subsidiaries during the year is recorded. Current tax is based on the profit or loss from ordinary activities
adjusted for items that are non-assessable or disallowable for income tax purpose and is calculated using tax rates that have been enacted
or substantively enacted at the balance sheet date. ASC Topic 740 also requires the recognition of deferred tax assets and liabilities
for both the expected impact of differences between the consolidated financial statements and the tax basis of assets and liabilities,
and for the expected future tax benefit to be derived from tax losses and tax credit carry-forwards. ASC Topic 740 additionally requires
the establishment of a valuation allowance to reflect the likelihood of realization of deferred tax assets. Realization of deferred tax
assets is dependent upon future earnings, if any, of which the timing and amount are uncertain.

 

The Company adopted ASC Topic 740-10-05,
Income Tax, which provides guidance for recognizing and measuring uncertain tax positions, it prescribes a threshold condition that a
tax position must meet for any of the benefits of the uncertain tax position to be recognized in the consolidated financial statements.
It also provides accounting guidance on derecognizing, classification and disclosure of these uncertain tax positions.

 

The policy on classification of all interest and
penalties related to unrecognized income tax positions, if any, is to present them as a component of income tax expense.

 

Value added tax (“VAT”)

 

Revenue represents the invoiced value of goods
and service, net of VAT. The VAT is based on gross sales price and VAT rates range up to 6%, depending on the type of products sold or
services provided. Entities that are VAT general taxpayers are allowed to offset qualified input VAT paid to suppliers against their output
VAT liabilities. Net VAT balance between input VAT and output VAT is recorded in taxes payable. All of the VAT returns filed by the Company’s
subsidiary in PRC remain subject to examination by the tax authorities for five years from the date of filing.

 

Statutory reserves

 

The Company’s PRC subsidiary is required
to allocate at least 10% of their after-tax profit to the general reserve in accordance with the PRC accounting standards and regulations.
The allocation to the general reserve will cease if such reserve has reached to 50% of the registered capital of respective company. These
reserves can only be used for specific purposes and are not transferable to the Company in form of loans, advances, or cash dividends.
There is no such regulation of providing statutory reserve in Hong Kong. As of December 31, 2024 and 2025, the Company’s PRC subsidiary
did not generated after-tax profit. As such, no profit was transferred to statutory reserves.

 

Comprehensive income

 

The Company presents comprehensive income in accordance
with ASC Topic 220, Comprehensive Income. ASC Topic 220 states that all items that are required to be recognized under accounting standards
as components of comprehensive income be reported in the unaudited interim condensed consolidated financial statements. The components
of comprehensive income were the net income for the years and the foreign currency translation adjustments.

 

 

CRE8 ENTERPRISE LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

2.
Summary of Significant Accounting Policies (cont.)

 

Commitments and contingencies

 

In the normal course of business, the Company
is subject to contingencies, including legal proceedings and claims arising out of the business that relate to a wide range of matters,
such as government investigations and tax matters. The Company recognizes a liability for such contingency if it determines it is probable
that a loss will occur, and a reasonable estimate of the loss can be made. The Company may consider many factors in making these assessments
including historical and the specific facts and circumstances of each matter.

 

Segment reporting

 

ASC 280, Segment Reporting, (“ASC 280”),
establishes standards for companies to report in their consolidated financial statements information about operating segments, products,
services, geographic areas, and major customers.

 

Based on the criteria established by ASC 280,
the chief operating decision maker (“CODM”) has been identified as the Company’s Chief Executive Officer. The CODM has
determined that the Company operates as a single operating segment and uses net income (loss) and operating income (loss) as measures
of profit or loss on a consolidated basis when making decisions regarding resource allocation and performance assessment. The CODM reviews
consolidated results when making decisions about allocating resources and assessing the performance of the Company as a whole and hence,
we have only one reportable segment.

 

Earnings per share

 

Basic earnings per share is computed by dividing
net earnings attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the year. Diluted
earnings per share reflect the potential dilution that could occur if securities or other contracts to issue ordinary shares were exercised
or converted into ordinary shares. For the years ended December 31, 2023, 2024 and 2025, there were no dilutive shares.

 

Recently adopted accounting standards

 

In December 2023, the FASB issued ASU 2023-09,
Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The ASU requires the annual financial statements to include consistent
categories and greater disaggregation of information in the rate reconciliation, and income taxes paid disaggregated by jurisdiction.
ASU 2023-09 is effective for public business entities for annual periods beginning after December 15, 2024, and interim periods within
those annual periods; early adoption is permitted. Adoption is either with a prospective method or a fully retrospective method of transition.
The Company has adopted ASU 2023-09 on January 1, 2025, which was applied retrospectively to all prior periods presented.

 

 

CRE8 ENTERPRISE LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

2.
Summary of Significant Accounting Policies (cont.)

 

New accounting standards not yet adopted

 

On November 4, 2024, the FASB issued ASU No. 2024-03,
Expense Disaggregation Disclosures (“ASU 2024-03”). ASU 2024-03 amends ASC 220, Comprehensive Income to expand income statement
expense disclosures and require disclosure in the notes to the financial statements of specified information about certain costs and expenses.
ASU 2024-03 is required to be adopted for fiscal years commencing after December 15, 2026, with early adoption permitted. The Company
is currently evaluating the impact of adopting the standard on the consolidated financial statements.

 

In January 2025, the FASB issued ASU 2025-01 Income
Statement-Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40). The FASB issued ASU 2024-03 on
November 4, 2024-03 states that the amendments are effective for public business entities for annual reporting periods beginning after
December 15, 2026, and interim reporting periods beginning after December 15, 2027. Following the issuance of ASU 2024-03, the FASB was
asked to clarify the initial effective date for entities that do not have an annual reporting period that ends on December 31 (referred
to as non-calendar year-end entities). Because of how the effective date guidance was written, a non-calendar year-end entity may have
concluded that it would be required to initially adopt the disclosure requirements in ASU 2024-03 in an interim reporting period, rather
than in annual reporting period. The FASB’s intent in the basis for conclusions of ASU 2024-03 is clear that all public business
entities should initially adopt the disclosure requirements in the first annual reporting period beginning after December 15, 2026, and
interim reporting periods within annual reporting periods beginning after December 15, 2027. The Company is currently evaluating the impact
that the adoption of ASU 2025-01 will have on its consolidated financial statement presentation or disclosures.

 

In July 2025, the FASB issued ASU 2025-05, Financial
Instruments – Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. The amendments
provide a practical expedient and, if applicable, an accounting policy election to simplify the measurement of credit losses for certain
receivables and contract assets. The amendments are effective for annual reporting periods beginning after December 15, 2025, and interim
reporting periods within those annual reporting periods. Early adoption is permitted in any interim or annual period in which financial
statements have not been issued or made available for issuance. The Company is currently evaluating the impact of this amendment and does
not expect that the adoption of this guidance will have a material impact on its financial position, results of operations, or cash flows.

 

In November 2025, the FASB issued ASU 2025-08,
Financial Instruments—Credit Losses (Topic 326): Purchased Loans (ASU 2025-08). The amendments expand the population of acquired
loans subject to the gross-up approach, treating non-credit-deteriorated loans (excluding credit cards) as “seasoned” if purchased
at least 90 days after origination or acquired in a business combination. ASU 2025-08 is effective for annual reporting periods beginning
after December 15, 2026 and interim reporting periods within those annual reporting periods, and the Group is currently evaluating the
impact of adopting this ASU on its consolidated financial statements.

 

In December 2025, the FASB issued ASU 2025-10,
Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities (ASU 2025-10), introducing U.S. GAAP guidance
on the accounting for government grants for business entities. The new standard closely aligns with International Accounting Standard
(IAS) 20, Accounting for Government Grants and Disclosure of Government Assistance, covering monetary and tangible nonmonetary assets
received from governments while excluding exchange transactions. ASU 2025-10 is effective for annual periods beginning after December
15, 2028 (including interim periods within) and one year later for all other entities, with early adoption permitted. The Group is currently
evaluating the impact of adopting this ASU on its consolidated financial statements.

 

Except for the above-mentioned pronouncements,
there are no new recent issued accounting standards that will have a material impact on the consolidated balance sheets, statements of
income and comprehensive income and cash flows. 

 

 

The Company has one reportable segment: provision
of integrated financial printing services. Segment was identified based on the Company’s internal reporting and how the chief operating
decision maker (“CODM”, the Chief Executive Officer of the Company) assesses the performance of the business. The CODM review
net income to assess the performance of the business.

 

All revenue of the Company is generated in Hong
Kong. Segment assets are based on the geographical location of the assets.

 

Non-current assets per geographical segment

 

  
As of December 31, 

  
2024  
2025 

  
HK$  
%  
HK$  
US$  
% 

Hong Kong 
 9,653,379  
 66% 
 27,383,448  
 3,518,231  
 89%

PRC 
 4,952,295  
 34% 
 3,461,105  
 444,683  
 11%

Total 
 14,605,674  
 100% 
 30,844,553  
 3,962,914  
 100%

 

 

CRE8 ENTERPRISE LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

3.
SEGMENT INFORMATION (cont.)

 

Key financial performance measures of the segments
are as follows:

 

 
 
For the years ended December 31,
 

 
 
2023
 
 
2024
 
 
2025
 
 
2025
 

 
 
HK$
 
 
HK$
 
 
HK$
 
 
US$
 

Revenue
 
 
115,285,213
 
 
 
103,820,403
 
 
 
130,932,196
 
 
 
16,822,196
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Cost of revenue
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

– External
 
 
(63,801,949
)
 
 
(57,967,108
)
 
 
(72,198,081
)
 
 
(9,276,024
)

– Related party
 
 
(4,472,333
)
 
 
(3,461,056
)
 
 
(3,853,053
)
 
 
(495,041
)

Total cost of revenue
 
 
(68,274,282
)
 
 
(61,428,164
)
 
 
(76,051,134
)
 
 
(9,771,065
)

Gross profit
 
 
47,010,931
 
 
 
42,392,239
 
 
 
54,881,062
 
 
 
7,051,131
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Selling and marketing expenses
 
 
(18,323,687
)
 
 
(15,992,966
)
 
 
(27,329,142
)
 
 
(3,511,255
)

General and administrative expenses
 
 
(19,612,592
)
 
 
(18,142,764
)
 
 
(21,686,959
)
 
 
(2,786,345
)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Income from operations
 
 
9,074,652
 
 
 
8,256,509
 
 
 
5,864,961
 
 
 
753,531
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Other income, net
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Bank interest income
 
 
33,332
 
 
 
31,523
 
 
 
391,825
 
 
 
50,342
 

Interest expense
 
 
(124,021
)
 
 
(316,717
)
 
 
(250,943
)
 
 
(32,241
)

Administrative service fee from related parties
 
 
369,000
 
 
 
390,000
 
 
 
184,000
 
 
 
23,640
 

Administrative service fee from non-related parties
 
 
—
 
 
 
—
 
 
 
528,000
 
 
 
67,838
 

Government subsidies
 
 
—
 
 
 
175,688
 
 
 
—
 
 
 
—
 

Other (expenses) income
 
 
(69,235
)
 
 
(4,516
)
 
 
187,426
 
 
 
24,080
 

Total other income, net
 
 
209,076
 
 
 
275,978
 
 
 
1,040,308
 
 
 
133,659
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Income before income tax expenses
 
 
9,283,728
 
 
 
8,532,487
 
 
 
6,905,269
 
 
 
887,190
 

Income tax expenses
 
 
(1,500,878
)
 
 
(2,129,604
)
 
 
(1,627,909
)
 
 
(209,154
)

Net income
 
 
7,782,850
 
 
 
6,402,883
 
 
 
5,277,360
 
 
 
678,036
 

 

 
 
As of December 31,
 

 
 
2024
 
 
2025
 
 
2025
 

 
 
HK$
 
 
HK$
 
 
US$
 

Total assets
 
 
57,047,028
 
 
 
116,021,212
 
 
 
14,906,429
 

Total liabilities
 
 
(47,143,875
)
 
 
(64,583,380
)
 
 
(8,297,686
)

 
 
 
 
 
 
 
 
 
 
 
 
 

Net assets
 
 
9,903,153
 
 
 
51,437,832
 
 
 
6,608,743
 

 

4.
ACCOUNTS RECEIVABLE, NET

 

Accounts receivable, net is comprised of the following:

 

  
As of December 31, 

  
2024  
2025  
2025 

  
HK$  
HK$  
US$ 

Accounts receivable 
 25,125,372  
 29,606,430  
 3,803,840 

Allowance for expected credit losses 
 (6,263,876) 
 (7,023,628) 
 (902,397)

Total 
 18,861,496  
 22,582,802  
 2,901,443 

 

Movement of allowance for expected credit losses
consists of the following:

 

  
As of December 31, 

  
2024  
2025  
2025 

  
HK$  
HK$  
US$ 

Beginning balance 
 5,066,546  
 6,263,876  
 804,784 

Addition 
 1,197,330  
 759,752  
 97,613 

Ending balance 
 6,263,876  
 7,023,628  
 902,397 

 

 

CRE8 ENTERPRISE LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

5.
PREPAYMENTS AND OTHER CURRENT ASSETS, NET

 

Prepayments and other current assets, net consist
of the following:

 

  
As of December 31, 

  
2024  
2025  
2025 

  
HK$  
HK$  
US$ 

Current: 
   
   
  

Prepayment for operating expenses 
 3,693,799  
 6,622,072  
 850,805 

Prepayment for advertising expenses 
 

—

  
 784,997  
 100,857 

Deferred IPO costs 
 5,137,874  
 

—

  
 

—

 

Others 
 807,895  
 477,652  
 61,369 

  
 9,639,568  
 7,884,721  
 1,013,031 

  
    
    
   

Non-current: 
    
    
   

Prepayment for operating expenses 
 

—

  
 1,394,329  
 179,144 

Prepayment for advertising expenses 
 

—

  
 1,962,493  
 252,141 

  
 

—

  
 3,356,822  
 431,285 

  
    
    
   

  
    
    
   

Total prepayments and other current assets 
 9,639,568  
 11,241,543  
 1,444,316 

 

6.
PROPERTY AND EQUIPMENT, NET

 

Property and equipment, net consist of the following:

 

  
As of December 31, 

  
2024  
2025  
2025 

  
HK$  
HK$  
US$ 

Furniture and fixture 
 806,471  
 806,471  
 103,616 

Computers 
 1,914,442  
 2,608,542  
 335,146 

Leasehold improvement 
 1,899,106  
 1,989,709  
 255,638 

Motor vehicles 
 9,000  
 

—

  
 

—

 

Office equipment 
 749,306  
 780,598  
 100,291 

Property and equipment 
 5,378,325  
 6,185,320  
 794,691 

Less: accumulated depreciation 
 (5,081,087) 
 (5,550,642) 
 (713,147)

Property and equipment, net 
 297,238  
 634,678  
 81,544 

 

Depreciation expenses recognized for the years
ended December 31, 2023, 2024 and 2025 were HK$1,167,514, HK$706,691 and HK$382,243 (US$49,111), respectively.

 

7.
ACCRUALS AND OTHER PAYABLES

 

Accruals and other payables consist of the following:

 

 
 
As of December 31,
 

 
 
2024
 
 
2025
 
 
2025
 

 
 
HK$
 
 
HK$
 
 
US$
 

Accrued operating expenses
 
 
347,864
 
 
 
547,617
 
 
 
70,358
 

Accrued rental expenses
 
 
220,830
 
 
 
113,458
 
 
 
14,577
 

Accrued audit fees
 
 
153,698
 
 
 
644,864
 
 
 
82,852
 

Provision for sales commissions
 
 
1,600,643
 
 
 
671,907
 
 
 
86,327
 

Provision for long service payments and staff benefits
 
 
468,236
 
 
 
1,229,975
 
 
 
158,027
 

Others
 
 
107,594
 
 
 
459,609
 
 
 
59,051
 

Total
 
 
2,898,865
 
 
 
3,667,430
 
 
 
471,192
 

 

 

CRE8 ENTERPRISE LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

 

Outstanding balances of bank borrowings as of
December 31, 2024 and 2025 consist of the following:

 

            Weighted   Weighted                          average   average                          interest   interest                          rate   rate                          as of   as of            Maturity     December 31,   December 31,   Balance as of December 31,  Lender  Type  date  Currency  2024   2025   2024   2025   2025                      HK$   HK$   US$  Standard Chartered Bank (Hong Kong) Limited  Government guaranteed SME loan  Within 10 years or on demand  HK$   3.52%   2.96%   8,871,262    8,081,222    1,038,277  Total                      8,871,262    8,081,222    1,038,277 

 

Note:

 

(i) As of 31 December, 2024 and 2025, the bank borrowing was under the special 100% loan guarantee of the SME Financing Guarantee Scheme, which was fully guaranteed by the Government of the Hong Kong Special Administrative Region; and

 

(ii)
The bank borrowings were classified as current liabilities as they were required to be repaid on demand of the bank.

 

9.
RIGHT-OF-USE ASSETS AND LEASE LIABILITIES

 

The operating leases primarily consist of leases
of office premises in Hong Kong and PRC, and printing machines in Hong Kong.

 

Supplemental balance sheet information related
to operating leases are as follows:

 

  
As of December 31, 

  
2024  
2025  
2025 

  
HK$  
HK$  
US$ 

Operating lease right-of-use assets 
   
   
  

Office premises 
 5,166,836  
 18,978,978  
 2,438,423 

Printing machines 
 1,309,309  
 946,127  
 121,559 

Operating lease right-of-use assets 
 6,476,145  
 19,925,105  
 2,559,982 

  
    
    
   

Current operating lease obligation 
    
    
   

Office premises 
 2,473,161  
 9,639,602  
 1,238,498 

Printing machines 
 363,182  
 373,529  
 47,991 

Total current operating lease obligation 
 2,836,343  
 10,013,131  
 1,286,489 

  
    
    
   

Non-current operating lease obligation 
    
    
   

Office premises 
 2,693,675  
 9,923,031  
 1,274,913 

Printing machines 
 946,127  
 572,598  
 73,568 

Total non-current operating lease obligation 
 3,639,802  
 10,495,629  
 1,348,481 

  
    
    
   

Total operating lease obligation 
 6,476,145  
 20,508,760  
 2,634,970 

 

 

CRE8 ENTERPRISE LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

9.
RIGHT-OF-USE ASSETS AND LEASE LIABILITIES (cont.)

 

Operating lease expense for the years ended December
31, 2023, 2024 and 2025 was HK$572,229, HK$295,374 and HK$10,397,657 (US$1,335,893), respectively.

 

The undiscounted future minimum lease payment
schedule are as follows:

 

  
As of December 31, 2025 

For the years ending December 31, 
HK$  
US$ 

2026 
 10,502,899  
 1,349,415 

2027 
 9,733,729  
 1,250,591 

2028 
 899,214  
 115,531 

2029 
 36,720  
 4,718 

Total minimum lease payments 
 21,172,562  
 2,720,255 

Less: imputed interest component 
 (663,802) 
 (85,285)

Lease liabilities recognized in the consolidated balance sheets 
 20,508,760  
 2,634,970 

 

Other supplemental information about the Company’s
operating lease as of December 31, 2024 and 2025:

 

   As of
December 31,
2024   As of
December 31,
2025  Weighted average discount rate*   4.56%   3.20% Weighted average remaining lease term (years)   2.48    2.22 

 

 

10.
Related party balances and transactions

 

Nature of relationships with related parties

 

Name   Relationship Starlux Limited   A company under the control by Mr. Jordan Lee LingXpert Language Services Limited (“Lingxpert”)   A wholly owned subsidiary of Starlux Limited Green IPO Limited   A wholly owned subsidiary of Lingxpert and it is no longer a related party in 2025. YHY Holdings Limited   A company under the control of Mr. Jordan Lee Ren Restaurants Limited   A company under the control of Mr. Jordan Lee

 

Amount due to related parties consist of
the following:

 

  
As of December 31, 

  
2024  
2025  
2025 

  
HK$  
HK$  
US$ 

Due to ultimate controlling shareholders 
 11,558,995  
 971,214  
 124,782 

Total 
 11,558,995  
 971,214  
 124,782 

 

The amounts due to the related parties are unsecured,
interest free with no specific repayment terms. The amount is of non-trade nature.

 

 

CRE8 ENTERPRISE LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

10.
Related party balances and transactions (cont.)

 

The related party balances included in accounts
payable:

 

  
As of December 31, 

  
2024  
2025  
2025 

  
HK$  
HK$  
US$ 

Lingxpert 
 16,568  
 

—

  
 

—

 

Total 
 16,568  
 

—

  
 

—

 

 

The Company have the following significant related
party transaction as follows:

 

  
For the years ended December 31, 

  
2023  
2024  
2025  
2025 

  
HK$  
HK$  
HK$  
US$ 

Other income – administrative service fee from: 
   
   
   
  

Lingxpert 
 84,000  
 84,000  
 84,000  
 10,792 

Green IPO Limited 
 45,000  
 66,000  
 

—

  
 

—

 

Ren Restaurants Limited 
 240,000  
 240,000  
 100,000  
 12,848 

Total administrative service fee from related parties 
 369,000  
 390,000  
 184,000  
 23,640 

  
    
    
    
   

Translation cost to Lingxpert 
 4,272,333  
 3,261,056  
 3,853,053  
 495,041 

  
    
    
    
   

Flim cost to Green IPO Limited 
 200,000  
 200,000  
 

—

  
 

—

 

 

Remuneration to senior management, included in selling and marketing,
and general administrative expenses, for the years ended December 31, 2023, 2024 and 2025 were:

 

  
For the years ended December 31, 

  
2023  
2024  
2025  
2025 

  
HK$  
HK$  
HK$  
US$ 

Salaries and other short term employee benefits 
 5,570,189  
 6,712,435  
 16,215,671  
 2,083,393 

Payments to defined contribution pension schemes 
 60,000  
 72,000  
 78,000  
 10,021 

Total 
 5,630,189  
 6,784,435  
 16,293,671  
 2,093,414 

 

11.
Disaggregation of Revenue

 

The following table disaggregates revenue by type
of services for the years ended December 31, 2023, 2024 and 2025. All service provided are recognized at a point in time.

 

  
For the years ended December 31, 

  
2023  
2024  
2025  
2025 

  
HK$  
HK$  
HK$  
US$ 

Integrated IPO financial printing services 
 34,035,637  
 32,789,688  
 63,157,166  
 8,114,446 

Non-IPO financial printing services: 
    
    
    
   

Annual reports 
 53,021,533  
 41,608,778  
 34,625,309  
 4,448,667 

Circulars 
 8,694,347  
 8,029,862  
 11,907,715  
 1,529,906 

Others 
 19,533,696  
 21,392,075  
 21,242,006  
 2,729,177 

Total non-IPO services 
 81,249,576  
 71,030,715  
 67,775,030  
 8,707,750 

Total 
 115,285,213  
 103,820,403  
 130,932,196  
 16,822,196 

 

 

CRE8 ENTERPRISE LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

11.
Disaggregation of Revenue (cont.)

 

The following table sets forth a breakdown of
revenue, cost of revenue and gross profit margin by major categories for the years ended December 31, 2023, 2024 and 2025, respectively:

 

  
For the year ended December 31, 2023 

  
Revenue  
Cost of
revenue  
Gross
profit  
Gross profit
margin 

  
HK$  
HK$  
HK$  
% 

Revenue from Integrated IPO financial printing services 
 34,035,637  
 12,830,143  
 21,205,494  
 62.3%

Revenue from non-IPO financial printing services 
 81,249,576  
 55,444,139  
 25,805,437  
 31.8%

Total 
 115,285,213  
 68,274,282  
 47,010,931  
 40.8%

 

  
For the year ended December 31, 2024 

  
Revenue  
Cost of
revenue  
Gross
profit  
Gross profit
margin 

  
HK$  
HK$  
HK$  
% 

Revenue from Integrated IPO financial printing services 
 32,789,688  
 11,072,563  
 21,717,125  
 66.2%

Revenue from non-IPO financial printing services 
 71,030,715  
 50,355,601  
 20,675,114  
 29.1%

Total 
 103,820,403  
 61,428,164  
 42,392,239  
 40.8%

 

  
For the year ended December 31, 2025 

  
Revenue  
Cost of
revenue  
Gross
profit  
Gross
profit  
Gross profit
margin 

  
HK$  
HK$  
HK$  
US$  
% 

Revenue from Integrated IPO financial printing services 
 63,157,166  
 24,159,703  
 38,997,463  
 5,010,403  
 61.7%

Revenue from non-IPO financial printing services 
 67,775,030  
 51,891,431  
 15,883,599  
 2,040,728  
 23.4%

Total 
 130,932,196  
 76,051,134  
 54,881,062  
 7,051,131  
 41.9%

 

During
the year ended December 31, 2023, 2024 and 2025, the contract liabilities transfer to revenue was HK$6,395,769, HK$7,301,563, and HK$7,782,140
(US$999,851), respectively.

 

 

Cost of revenue consists of cost directly related
to revenue generating activities. The following table shows disaggregated cost of revenues by major categories for the years ended December
31, 2023, 2024 and 2025:

 

  
For the years ended December 31, 

  
2023  
2024  
2025  
2025 

  
HK$  
HK$  
HK$  
US$ 

Staff cost 
 22,124,133  
 24,127,135  
 27,719,122  
 3,561,358 

Depreciation on property and equipment 
 402,421  
 254,962  
 349,246  
 44,871 

Lease expense 
 9,964,742  
 9,553,419  
 7,765,146  
 997,668 

Translation expenses 
 19,496,992  
 15,398,955  
 22,715,684  
 2,918,516 

Printing expenses 
 10,687,486  
 6,747,171  
 8,418,183  
 1,081,570 

Water and electricity supply expenses 
 1,688,236  
 1,502,292  
 888,992  
 114,218 

Repair and maintenance 
 901,076  
 1,188,767  
 1,297,126  
 166,655 

Others 
 3,009,196  
 2,655,463  
 6,897,635  
 886,209 

Total 
 68,274,282  
 61,428,164  
 76,051,134  
 9,771,065 

 

 

CRE8 ENTERPRISE LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

13.
OTHER (ERXPENSES) INCOME

 

Other (expenses) income consist of the followings:

 

  
For the years ended December 31, 

  
2023  
2024  
2025  
2025 

  
HK$  
HK$  
HK$  
US$ 

Government subsidies (note (i)) 
 

—

  
 175,688  
 

—

  
 

—

 

  
    
    
    
   

Exchange (loss) gain on foreign currency translation, net 
 (98,435) 
 73,322  
 69,371  
 8,913 

Others 
 29,200  
 (77,838) 
 118,055  
 15,167 

Total 
 (69,235) 
 (4,516) 
 187,426  
 24,080 

 

Note:

 

  

 

BVI

 

The Company and Cre8 Investments Limited is incorporated
in the BVI and is not subject to tax on income or capital gains under current BVI laws. In addition, upon payments of dividends by these
entities to their shareholders, no BVI withholding tax will be imposed.

 

Hong Kong

 

Cre8 Hong Kong is incorporated in Hong Kong
and subject to Hong Kong Profits Tax on the taxable income as reported in its statutory consolidated financial statements adjusted
in accordance with relevant Hong Kong tax laws. The applicable tax rate is 16.5% in Hong Kong. From year of assessment of 2019/2020
onwards, Hong Kong profits tax rates are 8.25% on assessable profits up to HK$2,000,000, and 16.5% on any part of assessable profits
over HK$2,000,000. Under Hong Kong tax laws, Cre8 Hong Kong is exempted from income tax on its foreign-derived income, and there
are no withholding taxes in Hong Kong on remittance of dividends.

 

PRC

 

Chuangbafang is governed by the income tax laws of the PRC. Under the
PRC Enterprise Income Tax Law (the “EIT Law”), the standard enterprise income tax rate for all domestic enterprises and foreign
invested enterprises is 25%. In January 2019, the State Administration of Taxation provides a preferential corporate income tax rate
of 20% and an exemption ranged from 50% to 75% in the assessable taxable profits for entities qualified as small-size enterprises (the
exemption range has been changed to from 50% to 87.5% for the period from January 1, 2021 to December 31, 2023, then the exemption
range has been changed to from 75% to 87.5% for the period from January 1, 2023 to December 31, 2024). The policy is effective
for the period from January 1, 2019 to December 31, 2025.

 

 

CRE8 ENTERPRISE LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

 

Significant components of the provision for income
taxes are as follows:

 

  
For the years ended December 31, 

  
2023  
2024  
2025  
2025 

  
HK$  
HK$  
HK$  
US$ 

Hong Kong profit tax 
   
   
   
  

Current tax expenses: 
   
   
   
  

Provision for the year 
 

—

  
 909,153  
 1,697,670  
 218,117 

Under provision in prior years 
 

—

  
 

—

  
 21,517  
 2,764 

  
 

—

  
 909,153  
 1,719,187  
 220,881 

  
    
    
    
   

Deferred tax expenses (credit) 
 1,500,878  
 1,220,451  
 (91,278) 
 (11,727)

Total 
 1,500,878  
 2,129,604  
 1,627,909  
 209,154 

 

The Company’s effective tax rates were as
follows:

 

  
For the years ended December 31, 

  
2023  
2024  
2025 

  
HK$  
   
HK$  
   
HK$  
US$  
  

Income before income tax expenses 
9,283,728  
   
8,532,487  
   
6,905,269  
887,190  
  

  
   
   
   
   
   
   
  

Income tax rate in the BVI, permanent tax holiday 
 

—

  
 0.0% 
 

—

  
 0.0% 
 

—

  
 

—

  
 0.0%

Hong Kong statutory income tax rate 
 1,531,815  
 16.5% 
 1,411,183  
 16.5% 
 1,139,366  
 146,386  
 16.5%

Effect of different tax rates available to different jurisdictions 
 

—

  
 

0.0

% 
 (333,552) 
 (3.9)% 
 (111,808) 
 (14,365) 
 (1.6)%

Effect of non-taxable income 
 

—

  
 

0.0

% 
 (8,553) 
 (0.1)% 
 (4,561) 
 (586) 
 (0.1)%

Effect of valuation allowance 
 

—

  
 

0.0

% 
 1,060,526  
 12.4% 
 886,554  
 113,905  
 12.9%

Effect of non-deductible expenses 
 (30,937) 
 (0.3)% 
 

—

  
 

0.0

% 
 96,303  
 12,373  
 1.4%

Utilization of tax loss 
 

—

  
 

0.0

% 
 

—

  
 

0.0

% 
 (231,462) 
 (29,738) 
 (3.4)%

Tax concession 
 

—

  
 

0.0

% 
 

—

  
 

0.0

% 
 (168,000) 
 (21,585) 
 (2.4)%

Under provision of tax in prior years 
 

—

  
 

0.0

% 
 

—

  
 

0.0

% 
 21,517  
 2,764  
 0.3%

Effective tax rate 
 1,500,878  
 16.2% 
 2,129,604  
 24.9% 
 1,627,909  
 209,154  
 23.6%

 

Deferred tax

 

The deferred tax assets which are principally
comprised of acceleration of depreciation on property and equipment, allowance for expected credit losses, provision for employee benefits
and net operating losses. Significant components of deferred tax were as follows:

 

  
Acceleration of
depreciation on
property and
equipment  
Allowance for expected credit losses  
Provision for employee benefits  
Tax losses  
Total  
Total 

  
HK$  
HK$  
HK$  
HK$  
HK$  
US$ 

Balance as of January 1, 2023 
 898,716  
 

—

  
 

—

  
 2,672,794  
 3,571,510  
 458,868 

Recognized in the income statement 
 (29,457) 
 

—

  
 

—

  
 (1,471,421) 
 (1,500,878) 
 (192,833)

Balance as of December 31, 2023 
 869,259  
 

—

  
 

—

  
 1,201,373  
 2,070,632  
 266,035 

Recognized in the income statement 
 (42,921) 
 197,559  
 (173,716) 
 (147,741) 
 (166,819) 
 (21,433)

Less: valuation allowance 
 

—

  
 

—

  
 

—

  
 (1,053,632) 
 (1,053,632) 
 (135,371)

Balance as of December 31, 2024 
 826,338  
 197,559  
 (173,716) 
 

—

  
 850,181  
 109,231 

Recognized in the income statement 
 (119,625) 
 125,360  
 85,543  
 886,554  
 977,832  
 125,632 

Less: valuation allowance 
 

—

  
 

—

  
 

—

  
 (886,554) 
 (886,554) 
 (113,905)

Balance as of December 31, 2025 
 706,713  
 322,919  
 (88,173) 
 

—

  
 941,459  
 120,958 

 

The Company had losses carried forward in
Chuangbafang amounting to HK$4,214,526 and HK$8,647,298 (US$1,111,007) as of December 31, 2024 and 2025, respectively. For financial
reporting purposes, the amount of the net deferred tax assets in Chuangbafang has been offset by a valuation allowance due to
uncertainty regarding the realization of the assets. The management evaluated position taken by the company will “more likely
than not” be sustained upon examination by the appropriate tax authority. The Company believes that its income tax filing
positions and deductions would be sustained and does not anticipate any adjustments that would result in a material change to its
financial position. Therefore, no reserves for uncertain tax positions have been recorded.

  

 

CRE8 ENTERPRISE LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

15.
RISKS AND UNCERTAINITIES

 

Credit risk

 

The assets that are potentially subject to a significant
concentration of credit risk primarily consist of cash and accounts receivable.

 

The Company believes that there is no significant
credit risk associated with cash in Hong Kong, which were held by reputable financial institutions in the jurisdiction where Cre8 Hong
Kong is located. The Hong Kong Deposit Protection Board pays compensation up to a limit of HK$800,000 (approximately US$102,784) if a
bank, which an individual/a company deposits with, fails. As of December 31, 2025, cash balance of HK$53,848,459 (US$6,918,461) was maintained
at financial institutions in Hong Kong and approximately HK$2,400,000 (US$308,352) was insured by the Hong Kong Deposit Protection Board.

 

As of December 31, 2025, HK$753,506 (US$96,811)
was deposited with financial institutions located in the PRC, and each bank is insured by the government authority with the maximum limit
of RMB500,000 (equivalent to US$71,499) for all accounts held with that bank.

 

The Company has designed credit policies with
an objective to minimize their exposure to credit risk. The accounts receivable are short term in nature and the associated risk is minimal.
The Company conducts credit evaluations on customers and generally requires certain amounts of deposits after signing the contracts. The
Company periodically evaluates the creditworthiness of the existing customers in determining an allowance for expected credit losses primarily
based upon the age of the receivables and factors surrounding the credit risk of specific customers.

 

Customers concentration risk

 

For the years ended December 31, 2023, 2024 and 2025, no customers
accounted for more than 10% of total revenue.

 

Information as to the revenue derived from those
customers that accounted for more than 10% of total accounts receivable for the years ended December 31, 2024 and 2025 are as follows:

 

  
2024  
2025 

Percentage of total accounts receivable 
        
      

Customer A 
 12.2% 
 

*

 

Customer B 
 

*

  
 12.2%

 

 Customer B accounted for less than 10% of the total accounts
receivable as of December 31, 2024.

 

Vendor concentration risk

 

Information as to the cost of revenue derived from those vendors that
accounted for more than 10% of total cost of revenue for the years ended December 31, 2023, 2024 and 2025 are as follows:

 

  
2023  
2024  
2025 

Percentage of total cost of revenue 
   
   
  

Vendor A 
 *  
 10.9% 
 13.7%

 

 

Information as to the cost of revenue derived from those vendors that
accounted for more than 10% of total accounts payable for the years ended December 31, 2024 and 2025 are as follows:

 

  
2024  
2025 

Percentage of total accounts payable 
   
  

Vendor B 
 29.3% 
 36.9%

Vendor C 
 22.9% 
 13.3%

Vendor D 
 15.4% 
 * 

Vendor E 
 10.3% 
 13.2%

 

 
*
Vendor D accounted for less than 10% of the total accounts payable as of December 31, 2025.

 

 

CRE8 ENTERPRISE LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

15.RISKS AND UNCERTAINITIES (cont.)

 

Interest rate risk

 

The Company’s exposure to fair value interest
rate risk mainly arises from its fixed deposits with banks. It also has exposure to cash flow interest rate risk which mainly arises from
its deposits with banks.

 

In respect of the exposure to cash flow interest
rate risk arising from the floating rate of non-derivative financial instruments held by the Company, such as cash, at the end of the
reporting period, the Company is not exposed to significant interest rate risk as the interest rates of cash at bank are not expected
to change significantly.

 

Foreign currency risk

 

Foreign currency risk is the risk of holding of
foreign currency assets will affect the Company’s financial position as a result of a change in foreign currency exchange rates.

 

The Company’s monetary assets and liabilities
are mainly denominated in HK$, US$ and RMB, which are the same as the functional currencies of the relevant Company entities. Hence, the
currency risk is considered insignificant. The Company currently does not have a foreign currency hedging policy to eliminate the currency
exposures. However, the Company monitors the related foreign currency exposures closely to consider the need for hedging.

 

Market and geographic risk

 

The Company’s major operations are conducted
in Hong Kong. Accordingly, the political, economic, and legal environments in Hong Kong, as well as the general state of Hong Kong’s
economy may influence the Company’s business, financial condition, and results of operations.

 

16.Shareholders’
equity

 

Ordinary shares

 

The Company was incorporated in the BVI as a limited company with limited
liability on December 4, 2023. The authorized number of ordinary shares was 200,000 shares with no par value each divided into (i) 180,000
Class A ordinary shares of no par value each and (ii) 20,000 Class B ordinary shares of no par value each.

 

On August 13, 2024, the Company effected
a share split at a ratio of 1-to-1,800. As a result of the share split, the Company now has 360,000,000 authorized ordinary shares with
no par value each divided into (i) 324,000,000 Class A ordinary shares of no par value each and (ii) 36,000,000 Class B ordinary
shares of no par value each. As a result, 18,000,000 Class A ordinary shares and 4,500,000 Class B ordinary shares issued and
outstanding as of the date hereof.

 

On July 24, 2025, the Company announced the closing
of its IPO of 1,450,000 Class A ordinary shares, with no par value per share at an offering price of US$4.00 per share for a total of
US$5,800,000 in gross proceeds. The Company raised total net proceeds of HK$38,907,534 (US$4,956,500), which was reflected in the consolidated
statements of cash flows, after deducting underwriting discounts and commissions and offering expenses. The ordinary shares of the Company
began trading on the Nasdaq Stock Market in the United States on July 23, 2025 under the Symbol “CRE”.

 

On July 29, 2025, the Company consummated the
sales of additional 217,500 Class A ordinary shares, with no par value per share at an offering price of US$4.00 per share for a total
of US$870,000 in gross proceeds. The Company raised total net proceeds of HK$6,224,106 (US$792,900), which was reflected in the consolidated
statements of cash flows, after deducting underwriting discounts and commissions and offering expenses.

 

On January 15, 2026, the Board of Directors of
the Company approved a reverse stock split of all of the Company’s issued and unissued shares, including the Class A ordinary shares
with no par value and Class B ordinary shares with no par value, at an exchange ratio of one (1) share for twelve (12) shares.

 

17.
COMMITMENTS AND CONTINGENCIES

 

Lease commitments

 

The Company entered certain operating leases for
office premises in Hong Kong and PRC for the period ranging from January 2021 to September 2029. The commitments for minimum lease payment
under these operating leases as of December 31, 2025 are listed in section “Note 9 — RIGHT-OF-USE ASSETS AND LEASE
LIABILITIES”.

 

Litigation

 

From time to time, the Company is involved in
claims and legal proceedings that arise in the ordinary course of business. Based on currently available information, the Company does
not believe that the ultimate outcome of any unresolved matters, individually and in the aggregate, is reasonably possible to have a material
adverse effect on the financial position, results of operations or cash flows.

 

 

CRE8 ENTERPRISE LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

 

The Company has assessed all events from December
31, 2025, up through April 24, 2026, which is the date of these consolidated financial statements are available to be issued, except as
disclosed below, there are no other material subsequent events that require disclosure in these consolidated financial statements.

 

 

On January 15, 2026, the Board of Directors of the Company approved
a reverse stock split of all of the Company’s issued and unissued shares, including the Class A ordinary shares with no par value
and Class B ordinary shares with no par value, at an exchange ratio of one (1) share for twelve (12) shares.

 

(ii)
Acquisition of Upperhand Investment Limited

 

On March 10, 2026, Cre8 Incorporation Limited
entered into a share purchase agreement to acquire 100% of the issued and outstanding shares of Upperhand Investment Limited (“Upperhand”),
a holding company incorporated in the British Virgin Islands, through its indirectly wholly-owned subsidiary in Japan to provide integrated
financial printing services in Japan. The total consideration for the acquisition was US$200,000 in cash, which was paid in full on March
17, 2026. Title to the shares of Upperhand was transferred to Cre8 Incorporation on April 1, 2026.

 

19.
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY

 

The following presents condensed parent-company-only
financial information of Cre8 Enterprise Limited.

 

Condensed balance sheets

 

  
As of December 31, 

  
2024  
2025  
2025 

  
HK$  
HK$  
US$ 

ASSETS 
   
   
  

Current assets 
   
   
  

Cash and cash equivalents 
 90,107  
 18,474,523  
 2,373,611 

Amount due from a fellow subsidiary 
 

—

  
 17,016,350  
 2,186,264 

Total current assets 
 90,107  
 35,490,873  
 4,559,875 

  
    
    
   

Non-current assets 
    
    
   

Investment in a subsidiary 
 8  
 8  
 1 

Total non-current assets 
 8  
 8  
 1 

TOTAL ASSETS 
 90,115  
 35,490,881  
 4,559,876 

  
    
    
   

LIABILITIES AND SHAREHOLDERS’ DEFICIT 
    
    
   

Current liabilities 
    
    
   

Amount due to a fellow subsidiary 
 373,429  
 

—

  
 

—

 

Total current liabilities and total liabilities 
 373,429  
 

—

  
 

—

 

  
    
    
   

SHAREHOLDERS’ (DEFICIT) EQUITY 
    
    
   

Class A ordinary shares, no par value per share, 27,000,000 shares
authorized, and 15,000,000 shares issued and outstanding as of December 31, 2024 and 27,000,000 shares authorized, and 1,638,959 shares
issued and outstanding as of December 31, 2025* 
 

—

  
 

—

  
 

—

 

Class B ordinary shares, no par value per share, 3,000,000 shares authorized,
and 375,000 shares issued and outstanding as of December 31, 2024 and 2025* 
 

—

  
 

—

  
 

—

 

Additional paid-in capital 
 31,196  
 36,376,047  
 4,673,602 

Accumulated deficit 
 (314,510) 
 (577,157) 
 (74,153)

Accumulated other comprehensive losses 
 

—

  
 (308,009) 
 (39,573)

Total shareholders’ (deficit) equity 
 (283,314) 
 35,490,881  
 4,559,876 

TOTAL LIABILITIES AND SHAREHOLDERS’ (DEFICIT) EQUITY 
 90,115  
 35,490,881  
 4,559,876 

 

 

  

CRE8 ENTERPRISE LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

19.
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY (cont.)

 

Condensed statements of loss

 

  
For the years ended December 31, 

  
2023  
2024  
2025  
2025 

  
HK$  
HK$  
HK$  
US$ 

Operating expenses: 
   
   
   
  

General and administrative expenses 
 (49,060) 
 (265,450) 
 (631,874) 
 (81,183)

Total operating expenses 
 (49,060) 
 (265,450) 
 (631,874) 
 (81,183)

  
    
    
    
   

Other income, net: 
    
    
    
   

Bank interest income 
 

—

  
 

—

  
 372,755  
 47,891 

Other expenses 
 

—

  
 

—

  
 (3,528) 
 (453)

Total other income, net 
 

—

  
 

—

  
 369,227  
 47,438 

Loss before income taxes 
 (49,060) 
 (265,450) 
 (262,647) 
 (33,745)

Income tax expense 
 

—

  
 

—

  
 

—

  
 

—

 

Net loss 
 (49,060) 
 (265,450) 
 (262,647) 
 (33,745)

 

Condensed statements of cash flows

 

  
For the years ended December 31, 

  
2023  
2024  
2025  
2025 

  
HK$  
HK$  
HK$  
US$ 

Cash flows from operating activities 
   
   
   
  

Net loss 
 (49,060) 
 (265,450) 
 (262,647) 
 (33,745)

Change in operating assets and liabilities: 
 —  
 —  
 —  
 — 

Net cash used in operating activities 
 (49,060) 
 (265,450) 
 (262,647) 
 (33,745)

  
    
    
    
   

Cash flows from investing activities 
    
    
    
   

Investment in a subsidiary 
 (8) 
 

—

  
 

—

  
 

—

 

Net cash used in investing activities 
 (8) 
 

—

  
 

—

  
 

—

 

  
    
    
    
   

Cash flows from financing activities 
    
    
    
   

Proceeds from IPO, net 
 

—

  
 

—

  
 45,131,640  
 5,798,522 

Advance from a subsidiary 
 17,872  
 355,557  
 

—

  
 

—

 

Advance to a subsidiary 
 

—

  
 

—

  
 (23,316,120) 
 (2,995,660)

Deferred initial public offering (“IPO”) cost 
 

—

  
 

—

  
 (2,860,448) 
 (367,510)

Subscription received from shareholders 
 31,196  
 

—

  
 

—

  
 

—

 

Net cash generated from financing activities 
 49,068  
 355,557  
 18,955,072  
 2,435,352 

  
    
    
    
   

Net change in cash and cash equivalents 
 

—

  
 90,107  
 18,692,425  
 2,401,607 

Effect of changes in foreign exchange rate 
 

—

  
 

—

  
 (308,009) 
 (39,573)

Cash and cash equivalents at the beginning of the year 
 

—

  
 

—

  
 90,107  
 11,577 

Cash and cash equivalents at the end of the year 
 

—

  
 90,107  
 18,474,523  
 2,373,611 

  

 

CRE8 ENTERPRISE LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

19.
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY (cont.)

 

 

The company was incorporated under the laws of
the BVI as a limited company on December 4, 2023 and as a holding company.

 

In the condensed parent company only financial statements, the Company’s
investment in subsidiary stated at cost of acquisition in Cre8 Incorporation Limited. Those condensed parent company only financial statements
should be read in connection with the consolidated financial statements and notes hereto.

 

(ii)Restricted net assets

 

Schedule I of Rule 5-04 of Regulation S-X
requires the condensed financial information of registrant shall be filed when the restricted net assets of consolidated subsidiaries
exceed 25 percent of consolidated net assets as of the end of the most recently completed fiscal year. For purposes of the above test,
restricted net assets of consolidated subsidiaries shall mean that amount of the registrant’s proportionate share of net assets
of consolidated subsidiaries (after intercompany eliminations) which as of the end of the most recent fiscal year may not be transferred
to the parent company by subsidiaries in the form of loans, advances or cash dividends without the consent of a third party (i.e., lender,
regulatory agency, foreign government, etc.).

 

The condensed parent company only consolidated
financial statements have to be prepared in accordance with Rule 12-04, Schedule I of Regulation S-X if the restricted net assets of the
subsidiaries of Cre8 Enterprise Limited exceed 25% of the consolidated net assets of Cre8 Enterprise Limited. The Company generates revenues
from its wholly owned subsidiary in the Hong Kong. The ability of Cre8 (Greater China) Limited in the Hong Kong to pay dividends is not
restricted. In this connection, the restricted net assets of the subsidiaries of Cre8 Enterprise Limited do not exceed 25% of the consolidated
net assets of Cre8 Enterprise Limited and accordingly the above condensed parent company only financial information of Cre8 Enterprise
Limited is presented for supplementary reference.

 

As of December 31, 2024 and 2025, there were no
material contingencies, significant provisions of long-term obligations, mandatory dividend or redemption requirements of redeemable stock
or guarantees of the Company, except for those that have been separately disclosed in the consolidated financial statements, if any.

 

 

A BVI company Established on December 6, 2023 Registered capital of 50,000 ordinary shares with no par value each Investment holding
Wholly owned by the Company
A Hong Kong company Established on September 16, 2006 Registered capital of HK$5,000,000 provision of printing, media placement, translation and other printing related services in Hong Kong.
wholly owned by Cre8 Incorporation Limited
A PRC company Established on May 11, 2021 Registered capital of RMB500,000 Provision of financial printing consultation services
Wholly owned by Cre8 Hong Kong

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