Item 3. Legal Proceedings
ITEM 3. LEGAL PROCEEDINGS
From time to time, the Company may be subject
to various legal proceedings, investigations, or claims that arise in the ordinary course of our business activities. Except for the
proceeding below, the Company is not currently a party to any other legal proceedings the outcome of which, if determined adversely to
the Company, would individually or in the aggregate have a material adverse effect on its business, financial condition, and results
of operations.
Action Case: HCA702/2018
On March 27, 2018, the writ of summons was issued
against the Company and seven related companies of the former shareholder by the Plaintiff. This action alleged the infringement of certain
registered trademarks currently registered under the Plaintiff. Subsequent to the year ended December 31, 2023, in February 2023, the
Court granted leave for this action be set down for trial of 13 days, which the period has yet to be fixed. Legal counsel of the Company
will continue to handle in this matter. At this stage in the proceedings, it is unable to determine the probability of the outcome of
the matter or the range of reasonably possible loss, if any.
Action Case: HCA765/2019
On April 30, 2019, the writ of summons was issued
against the Company’s subsidiary, three related companies and the former directors, shareholders and financial consultant by the
Plaintiff. This action alleged the deceit and misrepresentation from an inducement of the fund subscription and claimed for compensatory
damage of approximately $2 million (equal to HK$17.1 million). The case is on-going and the parties have yet to attempt mediation. Legal
counsel of the Company will continue to handle in this matter. At this stage in the proceedings, it is unable to determine the probability
of the outcome of the matter or the range of reasonably possible loss, if any.
Action Case: HCA 2097/2020 and HCA 2098/2020
On December 15, 2020, the writs of summons were
issued against the Company and the former consultant by the Plaintiff. This action alleged the misrepresentation and conspiracy causing
the loss from the investment in corporate bond and claimed for compensatory damage of approximately $1.67 million (equal to HK$13 million).
The Company previously made $0.84 million as contingency loss for the year ended December 31, 2022. The parties participated in a mediation
held on March 25, 2022 and negotiated for settlement through without prejudice correspondence, no settlement was reached. The case is
on-going and legal counsel of the Company will continue to handle this matter. At this stage in the proceedings, it is unable to determine
the probability of the outcome of the matter or any further potential loss, if any.
Action Case: HCA 1957/2023
On December 15, 2023, the Company received an
order from the High Court of the Hong Kong Special Administrative Region, demanding the Company to pay and settle the outstanding rent/mesne
profit, management fees, air-conditioning charges, additional air-conditioning charges, government rates and interest in an aggregated
amount of $1,383,424 (equivalent to HK$10,799,560) to the landlord of the office premises in four instalments scheduled from January
15, 2024 to March 31, 2024, together with legal costs of $6,405 (equivalent to HK$50,000).
ITEM 4. MINE SAFETY DISCLOSURES
Not Applicable.
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PART II