| Summary of significant accounting policies | Note 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”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”). Principles of consolidation The consolidated financial
statements include the accounts of the Group and its subsidiaries. All inter-Group transactions and balances are eliminated upon consolidation. Use of estimates and assumptions The preparation of consolidated
financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts
of assets and liabilities including provision for credit losses, and disclosures of contingent assets and liabilities as of the date of
the consolidated financial statements and the reported amounts of revenues and expenses during the periods presented. Actual results could
differ from these estimates. Significant accounting estimates reflected in the Group’s consolidated financial statements include
the estimates of provision for credit losses.
Earnings per share Basic earnings per share is
computed by dividing net income attributable to the holders of ordinary shares by the weighted average number of ordinary shares outstanding
during period presented. Diluted income per share is calculated by dividing net income attributable to the holders of ordinary shares
as adjusted for the effect of dilutive ordinary share equivalents, if any, by the weighted average number of ordinary shares and dilutive
ordinary share equivalents outstanding during the period. However, ordinary share equivalents are not included in the denominator of the
diluted earnings per share calculation when inclusion of such shares would be anti-dilutive, such as in a period in which a net loss is
recorded. For the years ended June 30, 2024, 2023 and 2022, there were no dilutive shares. Foreign currency translation and transaction The Group uses Hong Kong Dollar
(“HKD”) as its reporting currency. The functional currency of Galaxy Payroll BVI is United States Dollar (“US$”)
and its subsidiaries which are incorporated in Hong Kong, Cayman, Macau, Taiwan and China is HKD, USD, MOP, NTD and RMB, respectively,
which are their respective local currency based on the criteria of ASC 830, “Foreign Currency Matters”. In the consolidated financial
statements of the Group, transactions in currencies other than the functional currency are measured and recorded in the functional currency
using the exchange rate in effect at the date of the transaction. At the balance sheet date, monetary assets and liabilities that are
denominated in currencies other than the functional currency are translated into the functional currency using the exchange rate at the
balance sheet date. All gains and losses arising from foreign currency transactions are recorded in the income statements during the year
in which they occur. Convenience translation
Translations of balances in
the consolidated balance sheets, consolidated statements of income and comprehensive income, consolidated statements of changes in shareholders’
equity and consolidated statements of cash flows from HKD into US$ as of June 30, 2024 are solely for the convenience of the readers and
are calculated at the rate of US$1.00=7.8083, representing the exchange rate set forth in the H.10 statistical release of the Federal
Reserve Board on June 28, 2024. No representation is made that the HKD amounts could have been, or could be, converted, realized or settled
into US$ at such rate, or at any other rate. 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 the Group. 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 unobserved and significant to the fair value. Financial instruments included
in current assets and current liabilities are reported in the balance sheets at face value or cost because of the short period of time
between the origination of such instruments and their expected realization and their current market rates of interest. Revenue recognition The
Group adopted ASC Topic 606, Revenue from Contracts with Customers. The
five-step model defined by ASC Topic 606 requires the Group to (1) identify its contracts with customers, (2) identify its performance
obligations under those contracts, (3) determine the transaction prices of those contracts, (4) allocate the transaction prices to its
performance obligations in those contracts and (5) recognize revenue when each performance obligation under those contracts is satisfied.
Revenue is recognized when promised goods or services are transferred to the customer in an amount that reflects the consideration expected
in exchange for those goods or services. Revenues are recognized when
control of the promised services and deliverables are transferred to the Group’s clients in an amount that reflects the consideration
the Group expects to be entitled to and receive in exchange for services and deliverables rendered. The Group has elected to apply
the practical expedient in paragraph ASC 606-10-50-14 and does not disclose information about remaining performance obligations that have
original expected durations of one year or less. The Group elected a practical
expedient that it does not adjust the promised amount of consideration for the effects of a significant financing component if the Group
expects that, upon the inception of revenue contracts, the period between when the Group transfers its promised services or deliverables
to its clients and when the clients pay for those services or deliverables will be one year or less. As a practical expedient,
the Group elected to expense the incremental costs of obtaining a contract when incurred if the amortization period of the asset that
the Group otherwise would have recognized is one year or less. The Group generates revenues
from fees charged for the services (payroll outsourcing services, employment services and consultancy and market research services) provided
to its clients. There are three revenue streams
within the Group’s operations: payroll outsourcing services, employment services, and consultancy and market research services. Employment services For the employment services,
the Group (i) employs candidates who are sourced by the customers themselves under the name of the Group’s entities or under the
name of the Group’s in-country partners and then the Group seconds the employees back to the customers; (ii) handles the seconded
employees’ payroll and other administrative matters as their employer of records directly or through its in-country partners; and
(iii) makes sure the employment is complied with the Labor Law in the respective jurisdictions. The performance obligations
in the agreements are generally combined into one performance obligation, as they are considered a series of distinct services, and are
satisfied over time because the client simultaneously receives and consumes the benefits provided as the Group performs the services.
The Group uses the output method based on a fixed fee per employee serviced to recognize revenue, as the value to the client of the goods
or services transferred to date (e.g. number of payees or number of payrolls processed) appropriately depicts performance towards complete
satisfaction of the performance obligation. The fees are typically billed in the period in which services are performed. The Group considers the guidance
in ASC 606 with respect to principal versus agent considerations, in determining the appropriate treatment for the transactions between
the Group and the Group’s in-country partners and the customers related to employment of candidates. The classification of transactions
under the arrangements is determined based on the nature and contractual terms of the arrangement along with the nature of the operations
of the participants. The Group arranges the employment for the Group’s customers who bear the cost of candidates’ salary.
The Group collects the payroll and pays the candidate on behalf of its customers. Therefore, the Group acts as an agent in the provision
of such services and recognizes the revenue with the gross billings to the customers less the amounts the Group pays to the candidates
sourced by the customers. The service fee for each seconded
employee is charged on a monthly basis during the service period based on an agreed percentage of the seconded employee’s monthly
remuneration package or at a fixed fee per seconded employee, at an agreed currency exchange rate on the monthly remuneration package
for settlement where applicable. The Group usually allows a credit term of 30 days to its customers or the invoices are due upon receipt. There is no variable consideration,
significant financing components or non-cash consideration in the contracts. Accordingly, based on the output methods, the Group recognizes
revenues for the employment services on a monthly basis when it satisfies its performance obligations that it renders employment services
throughout the contract terms. There is no contract asset
that the Group has right to consideration in exchange for its employment services that the Group has transferred to customers. Such right
is not conditional on something other than the passage of time. Payroll outsourcing services The Group provides payroll
outsourcing services to customers. Such services are recognized as a performance obligation satisfied over time when customer simultaneously
receives and consumes the benefits provided by the Group using output methods, i.e. to recognize revenue using a time-based method resulting
in straight-line revenue recognition. The performance obligations
in the agreements are generally combined into one performance obligation, as they are considered a series of distinct services, and are
satisfied over time because the client simultaneously receives and consumes the benefits provided as the Group performs the services.
The service fee for the payroll outsourcing services is charged and invoiced on a fixed fee per staff upon completion of each payroll
calculation, as the value to the client of the goods or services transferred to date (e.g. number of payees or number of payrolls processed)
appropriately depicts performance towards complete satisfaction of the performance obligation. The fees are typically billed in the period
in which services are performed. The Group usually allows a credit term of ranging from 30 days to 90 days to its customers. Therefore, The Group concludes
that the monthly payroll outsourcing services satisfy the requirements of ASC 606-10-25-14(b) to be accounted for as a single performance
obligation. The Group recognizes revenue for this type of payroll outsourcing services over time. There is no variable consideration,
significant financing components or non-cash consideration in the contracts. Accordingly, based on the output methods, The Group recognizes
revenues for the payroll outsourcing services on a monthly basis when it satisfies its performance obligations that it renders payroll
outsourcing services throughout the contract terms. There is no contract asset
that the Group has right to consideration in exchange for its payroll outsourcing services that the Group has transferred to its customers.
Such right is not conditional on something other than the passage of time. Consultancy and market research services Beginning July 2021, the
Group launched consultancy and market research services to its clients who have an intention to explore the foreign locations without
sufficient knowledge of the foreign labor policy and the labor environment. Consultancy and market research services include human capital
consulting services and market research services. There are two performance obligations of the Group’s market research services
due to the two separate natures of service provided in project basis and monthly basis. The entire transaction prices of each performance
obligation are allocated based on the relative estimated stand-alone selling price. The Group is engaged by its
clients for market research services on written agreements. The predetermined fees for market research services are agreed by both the
Group and its clients. The transaction price is allocated to two performance obligations including, 1) project basis for consultancy and
market research service and 2) monthly basis of human capital consulting service, respectively. There is no variable consideration, significant
financing components or noncash consideration in the contracts. The revenues are recognized in the amount that reflects the considerations
agreed by the Group and its clients and the Group expects to receive upon the provision deliverables are completed by the Group and delivered
to its clients. For the project basis consultancy
and market research services, the Group provides consultation for local policy in advanced level and delivery of country profile reports.
The Group recognizes revenues for the project basis consultancy when it performs obligations at a point in time that the provision deliverables
are rendered to its clients. For the monthly basis human
capital consulting services, the Group delivers general consultation on different topics as well as Q&A session with local experts
on a monthly basis throughout the contract terms. The Group concludes that each monthly service (1) is distinct, (2) meets the criteria
for recognizing revenue over time, and (3) has the same method for measuring progress. In addition, the Group concludes that the services
provided each month are substantially the same and result in the transfer of substantially the same service to the customers each month.
That is, the benefit consumed by the customers is substantially the same for each monthly transaction, even though the exact volume of
services may vary each month. Therefore, the Group concludes that the monthly human capital consulting services satisfy the requirements
of ASC 606-10-25-14(b) to be accounted for as a single performance obligation. Accordingly, based on the output methods, the Group recognizes
revenues for the human capital consulting services on a monthly basis when it satisfies its performance obligations that it renders human
capital consulting services throughout the contract terms. The revenues generated from
consulting and market research services are generally based on the fixed fee billing arrangements that require the clients to pay a pre-established
fee in exchange for a predetermined set of services. The clients agree to pay a fixed fee periodically over the contract terms as specified
in the service agreements. There is no contract asset
that the Group has right to consideration in exchange for its consultancy and market research services that the Group has transferred
to its customers. Such right is not conditional on something other than the passage of time. Cost of Revenues Cost of revenues consists
of in-country partner cost, net exchange difference, employee compensation, related payroll benefits and the Group’s director remuneration
which are attributable to the revenue-generating activities. Related Parties The Group accounts for related
party transactions in accordance with FASB Accounting Standards Codification (ASC) Topic 850 (Related Party Disclosures). A party is considered
to be related to the Group if the party directly or indirectly or through one or more intermediaries, controls, is controlled by, or is
under common control with the Group. Related parties also include principal owners of the Group, its management, members of the immediate
families of principal owners of the Group and its management and other parties with which the Group may deal if one party controls or
can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be
prevented from fully pursuing its own separate interests. A party which can significantly influence the management or operating policies
of the transacting parties or if it has an ownership interest in one of the transacting parties and can significantly influence the other
to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests is also a related
party. Cash Cash primarily consists of
bank deposits with original maturities of three months or less, which are unrestricted as to withdrawal and use. Cash also consists of
funds earned from the Group’s operating revenues which were held at the third-party platform fund accounts which are unrestricted
as to immediate use or withdraw. The Group maintains its bank accounts in the Hong Kong SAR, China, Macau and Taiwan. Deposits accounts denominated
in Hong Kong Dollars, Renminbi or any other currencies at the banks and financial institutions who are the members of Deposit Protection
Scheme will be covered up to a limit of HKD500,000 HKD10,855,128 HKD16,436,490 Restricted cash Restricted cash represents
the deposit pledged to a bank to secure banking facilities granted to the Group. As of June 30, 2023, restricted cash carried at an interest
rate of from 0.1% to 4.6% per annum respectively. Accounts receivable, net Accounts receivable represents
the service fees earned from the clients but have not yet collected. Accounts receivable is recorded at the original invoice amount less
a reserve for estimated credit losses. On July 1, 2023, the Group
adopted ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASC
326”). ASC 326 requires the application of a credit loss model based prospectively on current expected credit losses (CECL), and
replaces the previous model based retrospectively on past incurred losses. The Group adopted ASC 326 using the modified retrospective
method for all financial assets measured at amortized cost. Results for reporting periods beginning July 1, 2023 are presented under ASC
326. The Company concludes that there is no impact over the initial adoption of CECL model, which should be treated as cumulative-effect
adjustment on accumulated deficits as of June 30, 2023. The Group estimated its reserve
for credit losses using relevant available information from internal and external sources relating to past events including aging schedule
of receivables, 598
Prepayment, deposits and other receivables Prepayment include the expenses
paid in advance to service providers. Deposits consist of security payments made to local in-country partner for the employment services
provided and are refundable upon termination of services. Other receivables include remuneration/ Mandatory Provident Fund (“MPF”)
payment to be collected from the Group’s customers. On July 1, 2023, the
Group adopted ASC 326 using the modified retrospective method for other receivables recorded in prepayment, deposits and other receivables.
There is no impact over the initial adoption of CECL model. The Group did not have provision
for credit losses against other receivables as of June 30, 2024 and 2023, respectively (See Note 5). Deferred IPO costs 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. These costs include legal fees related to the registration drafting and counsel,
consulting fees related to the registration preparation, the SEC filing and print related costs. As of June 30, 2024, the Group did not
conclude its IPO. As of June 30, 2024 and 2023, the accumulated deferred IPO cost was HKD7,334,123 (US$939,272) and HKD4,935,602
Long-term rental deposits Long-term rental deposits
represent security payments made to a lessor for the office lease agreement entered over 1 year. The Group made such security payments
upon the commencement of the original lease agreement and extended the lease agreement. The security deposit will be refunded to the Group
upon the termination or expiration of the lease agreement as well as the delivery of the vacant leased properties to the lessor by the
Group. Property and equipment, net Property and equipment are
stated at cost less accumulated depreciation and impairment if applicable. Depreciation is computed using the straight-line method after
consideration of the estimated useful lives. The estimated useful lives are as follows: Lesser of Lease Estimated Leasehold improvements 5 years Furniture and fixtures 5 years Office equipment 5 years The cost and related accumulated
depreciation of assets sold or otherwise retired are eliminated from the accounts and any gain or loss is included in the statements of
operations. Expenditures for maintenance and repairs are charged to earnings as incurred, while additions, renewals and betterment, which
are expected to extend the useful life of assets, are capitalized. The Group also re-evaluates the periods of depreciation to determine
whether subsequent events and circumstances warrant revised estimates of useful lives. Impairment for long-lived assets Long-lived assets, including
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 Group assesses the recoverability
of the assets based on the non-discounted future cash flows the assets are expected to generate and recognize an impairment loss when
estimated discounted future cash flows expected to result from the use of the assets 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 Group 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. For the years ended June 30, 2024, 2023 and 2022, no impairment of long-lived assets was recognized. Employee benefits Under Hong Kong Mandatory
Provident Fund Schemes Ordinance, an employer shall enroll their regular employees in Mandatory Provident Fund Schemes. Regular employees
are those who are at between 18 and 65 years of age and have been employed for consecutive 60 days or more. An employer is required to
make regular mandatory contributions at least 5% of the employee’s monthly income between HKD7,000 HKD1,500 HKD30,000 The internal employees of
the Group’s subsidiary in the PRC are members of state-managed retirement pension schemes operated by the local government. The
subsidiary is required to contribute a specified percentage of its payroll costs to the retirement pension scheme to fund the benefits.
The only obligation of this subsidiary with respect to the retirement pension scheme is to make the specified contributions. The Group’s subsidiary
in Taiwan also participates in the employee retirement benefits plans in Taiwan in respect of employees solely under the Group’s
employment services. The Group is required to make monthly contributions calculated as a percentage of the monthly payroll costs and the
government undertakes to assume the retirement benefit obligations of all existing and future retired employees of the Group in Taiwan. The Group also operates a
defined contribution scheme which is a unitized scheme, for eligible employees in Macau. During the years ended June
30, 2024, 2023 and 2022, the Group provides employee benefits to its employees amounting to HKD703,239 HKD635,635 HKD609,710 Leases Under ASC Topic 842, lease
assets and liabilities are recognized at the present value of the future lease payments at the lease commencement date. The interest rate
used to determine the present value of the future lease payments is the Group’s incremental borrowing rate based on the information
available at the lease commencement date. The Group generally uses the base, non-cancellable lease term in calculating the right-of-use
assets and lease liabilities. The Group may recognize the
lease payments in the consolidated statements of income on a straight-line basis over the lease terms and variable lease payments in the
periods in which the obligations for those payments are incurred, if any. The lease payments under the lease arrangements are fixed. The Group elected the practical
expedients for an entity ongoing accounting and applied the short-term lease exception for lease arrangements with a lease term of 12
months or less at commencement. Lease terms used to compute the present value of lease payments do not include any option to extend, renew
or terminate the lease that the Group is not able to reasonably certain to exercise upon the lease inception. Accordingly, operating lease
right-of-use assets and liabilities do not include leases with a lease term of 12 months or less. The Group did not adopt the
practical expedient that allows lessees to treat the lease and non-lease components of a lease as a single lease component. Non-lease
components include payments for building management, utilities and property tax. It separates the non-lease components from the lease
components to which they relate. Operating lease expense is
recognized on a straight-line basis over the lease term. For the years ended June 30, 2024, 2023 and 2022, the Group’s operating
lease expense was HKD1,156,024 HKD1,177 251,597 The Group evaluates the impairment
of its ROU assets consistent with the approach applied for its other long-lived assets. The Group reviews the recoverability of its long-lived
assets when events or changes in circumstances occur that indicate that the carrying value of the asset may not be recoverable. The assessment
of possible impairment is based on its ability to recover the carrying value of the asset from the expected undiscounted future pre-tax
cash flows of the related operations. The Group has elected to include the carrying amount of operating lease liabilities in any tested
asset group and include the associated lease payments in the undiscounted future pre-tax cash flows. For the years ended June 30, 2024,
2023 and 2022, the Group did not have any impairment loss against its operating lease ROU assets. Income taxes Galaxy Payroll BVI, Melkweg
Cayman and Melkweg BVI are not subject to tax on income or capital gains under the current laws of the Cayman Islands and British Virgin
Islands respectively. In addition, upon payments of dividends by the Melkweg BVI and Galaxy Payroll (HK), Melkweg BVI to the Group’s
shareholders, no British Virgin Islands and Cayman Island withholding tax will be imposed. Galaxy Payroll HK, Galaxy
GEO Services, Galaxy Payroll (China) and Galaxy Payroll (TW) are incorporated in and carry trade and business in Hong Kong Special Administrative
Region and is subject to Hong Kong profits tax under Inland Revenue Department Ordinance. No provision for taxation
in PRC has been made as the Group’s entities in PRC had no assessable profit for the years ended June 30, 2024, 2023 and 2022. The Group accounts for income
tax in accordance with U.S. GAAP. Under the asset and liability method as required by this accounting standard, the recognition of deferred
income tax liabilities and assets for the expected future tax consequences of temporary differences between the income tax basis and financial
reporting basis of assets and liabilities. Provision for income taxes consists of taxes currently due plus deferred tax. The charge for taxation is
based on the results for the fiscal year as adjusted for items, which are non-assessable or disallowed. It is calculated using tax rates
that have been enacted or substantively enacted by the balance sheet date. Deferred tax is charged or
credited in the statement of operations, except when it is related to items credited or charged directly to equity. Deferred tax assets
are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred
tax assets will not be realized. Current income taxes are provided for in accordance with the laws of the relevant taxing authorities. An uncertain tax position
is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination,
with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely
of being realized upon examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded.
Penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the period incurred. The
Group had no uncertain tax position as of June 30, 2024 and 2023. The Group does not expect that its assessment regarding unrecognized
tax positions will materially change over the next 12 months. No penalties and interest
incurred related to underpayment of income tax are classified as income tax expense in the period incurred. PRC tax returns filed in 2018
to 2024 are subject to examination by any applicable tax authorities. Hong Kong tax returns filed in 2016 to 2024 are subject to examination
by any applicable tax authorities. Taiwan tax returns filed in 2018 to 2024 are subject to examination by any applicable tax authorities. Commitments and Contingencies In the normal course of business,
the Group 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 Group recognizes a liability for such contingency if it determines
it is probable that a loss has occurred and a reasonable estimate of the loss can be made. The Group may consider many factors in making
these assessments including historical and the specific facts and circumstances of each matter. Segment reporting The Group operates and manages
its business as a single reportable segment, in accordance with ASC 280, Segment Reporting. The Group’s chief operating decision
maker (“CODM”) is the Chief Executive Officer. The Group’s CODM assess the Group’s performance and results of
operations on a consolidated basis. The Group generates majority of its revenues from clients in Taiwan, Hong Kong and PRC. Accordingly,
tabular disclosure regarding geographical segments have been presented under Note 3 – Revenues. Concentration of Risks Concentration of credit risk Financial instruments that
potentially expose the Group to concentrations of credit risk consist primarily of cash and cash equivalents and account receivable. The
Group places its cash and cash equivalents with financial institutions with high-credit ratings and quality. The Group’s credit
risk with respect to cash and cash equivalents is discussed under “Cash and restricted cash” in this section. Accounts receivable primarily
comprise of amounts receivable from the service clients. Other receivables consist of out-of-pocket payments to be receivable from the
service clients. To reduce credit risk, the Group performs on-going credit evaluations of the financial condition of these service clients.
The Group establishes a provision for credit losses based upon estimates, factors surrounding the credit risk of specific service clients
and other information. Concentration of customers As of June 30, 2024, four
customers accounted for 29.0%, 23.5%, 21.0% and 18.5%, respectively, of the Group’s total accounts receivable. As of June 30, 2023,
three customers accounted for 39.5%, 26.7% and 18.2%, respectively, of the Group’s total accounts receivable. For the year ended June 30,
2024, three major cus |
