Company: MEGL
Filing Date: 2025-07-11
Form Type: F-1/A
Source: 0001641172-25-018709
Chunk: 194

Company: Magic Empire Global Ltd
Filing Date: 2025-07-11
Form: F-1/A
Chunk 194
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 early equity investor. Considering the substance and reality of that (i) the SAFE holders could never force redemption of their SAFEs (nor accrual of interest or maturity), (ii) the SAFE holders do not have any significant influence, and (iii) the conversion does not meet the fixed-for-fixed criterion under ASC 815-40, the Group considers that SAFE should be accounted for as a derivative asset.

The Company has performed the investment analysis, the equity investment is determined as equity investment without a readily determinable fair value (as defined under ASC 321-10-35), therefore the equity investment shall measure at cost less impairment, if any, adjusted plus or minus changes resulting from observable price changes for an identical or similar investment of the same issuer. As of December 31, 2023, the total cost, net of provision, of long-term investment is HK$38,647,738 (US$4,975,442).

During the year ended December 31, 2023, the Group recorded loss due to mark-to-market of a derivative asset of HK$1,963,000 (US$252,713). The Group considered the likelihood of the triggering event to share conversion is uncertain and determined the fair value of the investment was less than its carrying value.

During the year ended December 31, 2024, the Group has new investment of HK$8,500,000 (US$1,094,275) in a private company (“Company D”), representing 1.9% equity ownership of Company D, in which the Group does not have any significant influence and such investment does not have readily determinable fair value. Company D is a contract manufacturer of affordable luxury leather goods. During the year ended December, 31 2024, the Company redeemed all the investments of HK$48,253,736 (US$6,212,101) with a net gain on sale of investment of HK$1,105,998 (US$142,384).

| F-23 |

<div align='center'>MAGIC EMPIRE GLOBAL LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</div>

7. ACCRUALS AND OTHER PAYABLES

Accruals and other payables consist of the following:

|                          |     |              As 
 of December 31, |           |     |      |         |     |      |        |
|                          |     |            2023 |           |     | 2024 |         |