Company: CHOW
Filing Date: 2025-04-01
Form Type: F-1
Source: 0001641172-25-001938
Chunk: 222

Company: ChowChow Cloud International Holdings Ltd
Filing Date: 2025-04-01
Form: F-1
Chunk 222
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 Company is required to make contributions based on a percentage of qualified employees’ salaries. The Company recognized employee benefit expenses of HK$2,926,105 and HK$3,513,248 (US$450,416) for the years ended December 31, 2022, and 2023, respectively.

Composition of Accrued Expenses

Accrued expenses primarily consist of amounts due for professional services, sales commission, marketing expenses and other office and operating expenses related to ongoing operational activities. These expenses are recognized as liabilities when the Company has received the services but has not yet paid for them as of the balance sheet date. The components of accrued expenses as of December 31, 2023, include:

| (i)   | Professional                                       
 services fees: HK$450,000 (US$57,693)              |
| (ii)  | Sales                                              
 commission: HK$7,723 (US$990)                      |
| (iii) | Marketing                                          
 expenses: HK$706,495 (US$90,576)                   |
| (iv)  | Other                                              
 office and operating expenses:HK$71,769 (US$9,201) |

The increase in accrued expenses from HK$1,026,201 in 2022 to HK$1,235,987 in 2023 is mainly attributable to an increase in professional fees and marketing expenses related to ongoing business expansion activities.

Timing and Classification

All amounts recorded in accrued expenses and other current liabilities are classified as current liabilities and are expected to be settled within 12 months of the balance sheet date. These liabilities represent the Company’s short-term obligations and are due in the normal course of business operations.

Employee Benefit Accrual Methodology

The Company calculates its employee benefit liabilities, including MPF contributions, based on statutory requirements and internal compensation policies. Contributions are calculated as a percentage of each eligible employee’s gross salary and are accrued monthly in accordance with ASC 710 (Compensation). The contributions are made to the MPF on behalf of employees as required under the Hong Kong Legislative Council’s regulations.

Liquidity Management

The Company continually monitors its cash flow and liquidity to ensure that it can meet its short-term obligations, including accrued expenses and employee benefits. As of December 31, 2023, the Company has sufficient cash reserves to settle these liabilities as they become due. The Company does not anticipate any liquidity constraints that would impact its ability to meet these obligations in a timely manner.

13. INCOME TAX