BUUU Group Ltd

BUUU Group Limited operates across two distinct industry verticals: the meetings, incentives, conferences and exhibitions (MICE) industry in Hong Kong, where it provides event management and stage production services, and, following the September 15, 2026 acquisition of a 60% interest in Brightray Science Inc., the prefabricated modular data center solutions industry. The MICE industry in Hong Kong and internationally is highly competitive and remains highly fragmented, with management expecting competition to increase from existing competitors as well as new and emerging entrants, and with competition leading to additional pricing pressure on services. Demand for MICE services is seasonal, depending on activity during major festivals, holidays and the summer season in Hong Kong, with higher demand experienced during Easter, the summer holiday and Christmas. The data center business addresses demand for AI computing infrastructure, where results depend on the level of investment by customers in data center and AI computing infrastructure, and where demand may fluctuate significantly as a result of changes in technology, the capital expenditure plans of technology companies, the availability and cost of financing and general economic conditions. The development of data center projects depends on the availability of land, electricity supply and grid connections and on governmental approvals, any of which may be limited or delayed, and the data center industry is subject to export controls, sanctions, tariffs and other trade measures, including the U.S. Export Administration Regulations governing advanced computing items.

In the MICE business, customers generally compare proposals, solutions and quotations of various MICE service providers and select the plans and works most suitable for them, and success depends on the capability to anticipate customer preferences and develop suitable proposals. The MICE business is project-based, with services offered on an individual project basis and typically no long-term contracts, and customers normally engage the company on an as-needed basis and are under no obligation to hire for future projects. In the data center business, Brightray designs, manufactures and delivers prefabricated modular data center solutions, and its project pipeline includes projects that are not subject to definitive contracts, including a prefabricated module sales framework agreement entered into by a subsidiary of Brightray on September 25, 2026 for a planned AI data center project in Macao, which does not create any obligation to purchase or supply modules, provides only for provisional and non-binding pricing and terminates automatically if its conditions are not satisfied by September 30, 2027, and a letter of intent entered into by a subsidiary of Brightray on October 6, 2026 for a planned data center project in Indiana, United States, which is non-binding as to its principal cooperation terms, creates no obligation to purchase, supply or pay and will expire 12 months after signing unless replaced by a definitive agreement. Brightray has not yet commenced business and has no binding customer contracts, and its results will depend on its ability to secure definitive contracts.

The MICE business generates revenue from service contracts, with each contract sum determined with reference to quotations formulated on a cost-plus margin basis and substantially agreed upon between customers and the company at the time a project is awarded. Revenue for MICE services can vary significantly from period to period depending on the specific services requested by customers, and fees under service contracts are generally due for payment at the end of the MICE services, while some suppliers may require an upfront payment at the time of their engagement, creating potential cash flow challenges. The company typically grants MICE customers a credit period ranging from 60 to 90 days from the invoice date, and average accounts receivable turnover days were approximately 57.5 days ¹ and 63.6 days ² for the financial years ended June 30, 2026 and 2025, respectively. The MICE business is subject to seasonality, with higher demand during Easter, the summer holiday and Christmas, and during non-peak seasons the company faces certain fixed-cost expenses such as rental and staff expenses. The data center business generates revenue from the design, manufacture and delivery of prefabricated modular data center solutions, and in the near term Brightray may continue to rely on third-party manufacturers for its prefabricated modules, including companies that were affiliates of Brightray before the Acquisition and remain affiliated with Mr. Wang Bin, with a longer-term plan to nearshore production by establishing its own manufacturing facility closer to customers' projects.

The MICE services comprise two principal service lines: event management services and stage production services. Event management services involve the planning and execution of meetings, incentives, conferences and exhibitions for clients on a project basis, with fees determined on a cost-plus margin basis and generally payable at the end of the services. Stage production services involve the production elements of events, including physical works at event sites carried out by subcontractors and their workers. The company engages its MICE suppliers on an individual project basis and does not enter into long-term agreements with them, and suppliers typically have prescribed price lists which are revised periodically. The company has obtained insurance to cover certain potential risks and liabilities, including work-related injury insurance for employees, director life insurance and property all risks insurance for office facilities, and one-off insurances for events on an as-needed basis such as contractors' all risks insurance and public liability insurance. The properties occupied for office and business purposes are leased from an independent third party, with current leases for office premises and warehouse expiring on various dates through March 2029.

The data center business, conducted through Brightray and its subsidiaries, provides fully integrated, prefabricated modular data center solutions. Brightray was founded by Mr. Wang Bin, and under the Share Purchase Agreement Mr. Wang Bin is required to enter into, and maintain until June 30, 2029, an employment agreement with the Brightray group, which had not been entered into as of the date of this annual report. Brightray's core trade marks are to be transferred to the Brightray group, and its other core intellectual property is to be made available to the Brightray group under royalty-bearing licences from affiliates of Mr. Wang Bin on arm's-length terms, and such transfer and licences are conditions to the settlement of the P-Note. The Brightray group has subsidiaries in Singapore and Hong Kong, and its main business is to supply prefabricated modules for data center projects. It has entered into non-binding arrangements for planned projects in Macao and the United States, and Brightray may pursue projects in other jurisdictions. The company has also announced its intention to relocate its corporate headquarters to Singapore.

Significant operational developments during and after the period include the completion on September 15, 2026 of the acquisition of a 60% equity interest in Brightray pursuant to the Share Purchase Agreement dated September 3, 2026 among the company, DeedTech Inc. and Mr. Wang Bin, for which the company issued to DeedTech 2,000,000 Class A Ordinary Shares (20,000,000 after giving effect to the Share Subdivision) as Consideration Shares at a fixed issue price of US$20.00 per share (US$2.00 after giving effect to the Share Subdivision) ³ and a P-Note with an initial face amount of US$200,000,000 ⁴. The P-Note is settled solely in Class A Ordinary Shares at the fixed issue price in annual instalments determined by reference to Brightray's Net Profit for the fiscal years ending June 30, 2027, 2028 and 2029, with the base portion corresponding to up to 10,000,000 Class A Ordinary Shares (100,000,000 after giving effect to the Share Subdivision) ⁵ and the aggregate number of Class A Ordinary Shares issuable as consideration for the 60% interest, including the Consideration Shares, subject to a share cap of 24,000,000 Class A Ordinary Shares (240,000,000 after giving effect to the Share Subdivision) ⁶. On September 3, 2026, the company entered into subscription agreements with two non-U.S. investors for a Private Placement under Regulation S of Purchaser Units at US$10.00 per Purchaser Unit (US$1.00 after giving effect to the Share Subdivision) ⁷, each Purchaser Unit consisting of one Class A Ordinary Share and one-half of a Purchaser Warrant; one agreement expired without any Purchaser Units being issued, and a first closing of 1,000,000 Purchaser Units (10,000,000 after giving effect to the Share Subdivision) ⁸ with the other investor was completed on September 16, 2026 for gross proceeds of US$10,000,000 ⁹, with Purchaser Warrants to purchase 500,000 Class A Ordinary Shares (5,000,000 after giving effect to the Share Subdivision) at an exercise price of US$10.00 per share (US$1.00 after giving effect to the Share Subdivision) ¹⁰ issued, exercisable for cash only through September 2, 2027. On September 28, 2026, the board of directors approved a 10-for-1 forward subdivision of shares, under which each issued Class A Ordinary Share and Class B Ordinary Share was subdivided into ten shares of the same class and authorised share capital was increased from 500,000,000 to 5,000,000,000 no par value shares ¹¹, effective on October 26, 2026. On May 4, 2026, the company announced that it had entered into a non-binding memorandum of understanding to explore a potential acquisition of PINK 308 LLC, a holding company for film and screenplay assets, as part of a planned expansion into AI-driven short-form drama, and as of the date of this annual report the proposed acquisition remains pending with its expected closing date extended from July 2026 to December 2026.

The company's consolidated financial statements for the year ended June 30, 2026 do not include Brightray's results of operations or financial position because the Acquisition occurred after the end of the fiscal year. The reporting currency of BUUU is the U.S. dollar and the functional currency of the Operating Subsidiaries in Hong Kong is the Hong Kong dollar, with assets and liabilities translated into U.S. dollars from Hong Kong dollars at the year-end exchange rate and revenues and expenses translated at the average exchange rate during the year. The year-end exchange rate of U.S. dollars to Hong Kong dollars was 0.1276 at June 30, 2026 ¹², 0.1274 at June 30, 2025 ¹³ and 0.1281 at June 30, 2024 ¹⁴, and the year-average exchange rate was 0.1280 for the year ended June 30, 2026 ¹⁵, 0.1284 for the year ended June 30, 2025 ¹⁶ and 0.1279 for the year ended June 30, 2024 ¹⁷. As of June 30, 2026, there were 148,780,000 Class A Ordinary Shares and 50,000,000 Class B Ordinary Shares outstanding, no par value, after giving effect to the Share Subdivision effective October 26, 2026 (14,878,000 Class A Ordinary Shares and 5,000,000 Class B Ordinary Shares before giving effect to the Share Subdivision) ¹⁸. The company is a non-accelerated filer and an emerging growth company.

On September 3, 2026, the company announced the Acquisition and that industrialized AI data center delivery would become its core growth business. The company intends to use the proceeds of the Private Placement to fund the capacity expansion and working capital requirements of Brightray's business. In the longer term, the company plans to nearshore production by establishing its own manufacturing facility closer to its customers' projects, which would require significant capital expenditure. The company has also announced its intention to relocate its corporate headquarters to Singapore. The company has a call option, exercisable on one or more occasions during the three years following the closing of the Acquisition, to acquire all or part of DeedTech's remaining 40% equity interest in Brightray for consideration equal to 40% of the aggregate consideration determined under the Share Purchase Agreement, on settlement terms to be set out in separate definitive agreements.

The data center growth vector is anchored on Brightray's prefabricated modular data center solutions, which address demand for AI computing infrastructure. Brightray's project pipeline includes a prefabricated module sales framework agreement entered into by a subsidiary of Brightray on September 25, 2026 for a planned AI data center project in Macao, which provides only for provisional and non-binding pricing and terminates automatically if its conditions are not satisfied by September 30, 2027, and a letter of intent entered into by a subsidiary of Brightray on October 6, 2026 for a planned data center project in Indiana, United States, which is non-binding as to its principal cooperation terms and will expire 12 months after signing unless replaced by a definitive agreement. Such projects may not result in definitive contracts or revenue. The settlement of the P-Note is conditional on the transfer of Brightray's core trade marks to, and the grant of licences of its other core intellectual property to, the Brightray group.

The AI-driven short-form drama growth vector is anchored on the non-binding memorandum of understanding entered into on May 4, 2026 to explore a potential acquisition of PINK 308 LLC, a holding company for film and screenplay assets, as part of a planned expansion into AI-driven short-form drama. As of the date of this annual report, the proposed acquisition remains pending, and its expected closing date has been extended from July 2026 to December 2026.

The MICE business faces margin pressure from the highly competitive and fragmented market for MICE services, which may continue to create adverse price pressures, and from the fact that the Operating Subsidiaries do not enter into long-term supply contracts with suppliers or subcontractors, so there is no assurance that they will not significantly increase the prices of their labor, materials and subcontracting charges in the future, nor that the Operating Subsidiaries will be able to pass any increase in costs of sales to customers in order to maintain gross profit margins. Since fees for MICE engagements are generally pre-determined when a project is awarded, any substantial increase in the cost of sales may materially and adversely affect results of operations and financial condition. Cost overruns may arise from an increase in costs of material, increase in manpower requirements to cope with unexpected delays, and other unforeseen circumstances, and the longer the duration of a project, the higher the risk of cost overruns. In the data center business, project delays, cost overruns, defects or warranty claims could reduce Brightray's margins and harm its reputation.

The operational outlook includes the planned nearshoring of production by establishing the company's own manufacturing facility closer to customers' projects, which would require significant capital expenditure and may not be completed on schedule, within budget or at all, in which case Brightray would continue to depend on third-party manufacturers. In the near term, Brightray may continue to rely on third-party manufacturers for its prefabricated modules, including companies that were affiliates of Brightray before the Acquisition and remain affiliated with Mr. Wang Bin. The company has announced its intention to relocate its corporate headquarters to Singapore, which may affect its tax residence and the tax treatment of the group, increase its costs and require significant management attention. The company's current leases for office premises and warehouse expire on various dates through March 2029.

Capital allocation priorities include funding the capacity expansion and working capital requirements of Brightray's business with the proceeds of the Private Placement, and significant capital expenditure for a planned manufacturing facility. The Purchaser Warrants issued at the first closing of the Private Placement entitle their holder to purchase 500,000 Class A Ordinary Shares (5,000,000 after giving effect to the Share Subdivision) at an exercise price of US$10.00 per share (US$1.00 after giving effect to the Share Subdivision) ¹⁹, for cash only, until September 2, 2027, which would provide US$5,000,000 ²⁰ of additional gross proceeds if exercised in full. Under an addendum to the subscription agreement, any further closing of the Private Placement is to occur by November 9, 2026. The company has agreed to maintain the listing of its Class A Ordinary Shares on Nasdaq until the later of the third anniversary of the closing of the Acquisition and the final settlement date under the Share Purchase Agreement. The company has not announced a dividend policy, and during the option period Brightray may not issue securities or pay dividends without the consent of both the company and DeedTech.

Management has flagged structural headwinds and execution risks to the growth plan, including that the company may not realize the anticipated benefits of the Acquisition and that integration of Brightray's data center business may be more difficult, costly or time-consuming than expected, requiring significant management attention and resources and potentially diverting attention from the MICE business. The success of the Acquisition will depend on the ability to integrate Brightray's operations, personnel, financial reporting and internal controls, including the ability to prepare consolidated financial statements that include Brightray in accordance with U.S. GAAP on a timely basis. Brightray has not yet commenced business and has no binding customer contracts, and its results will depend on its ability to secure definitive contracts. Brightray's results depend on demand for AI computing infrastructure and are subject to risks relating to power availability, component supply, customer concentration, project execution and trade measures. The accounting for the Acquisition may cause volatility in reported results, including remeasurement of the P-Note at fair value in each reporting period with changes recognized in results of operations, and any impairment of goodwill or intangible assets could be material.

Geographic, regulatory and macro factors identified as constraints include that, following the Acquisition, the company may be exposed to legal, regulatory, tax, political and economic risks in Singapore, Malaysia and other jurisdictions in which it has no operating history, and is subject to laws and regulations governing data center development, electricity supply, land use and planning, environmental protection, data protection and cybersecurity, employment, foreign investment and taxation, all of which may change. Transfer pricing and permanent establishment rules in the jurisdictions in which the Brightray group operates may also affect the tax position. The data center industry is subject to export controls, sanctions, tariffs and other trade measures, including the U.S. Export Administration Regulations governing advanced computing items, and changes in such measures, or their application to Brightray's customers, suppliers or projects, could restrict Brightray's ability to deliver projects, increase its costs or reduce demand for its solutions. The MICE business is subject to seasonality, with demand highly dependent on activity during major festivals, holidays and the summer season in Hong Kong, and during non-peak seasons the company faces certain fixed-cost expenses such as rental and staff expenses.

The most material risks to BUUU center on the September 15, 2026 acquisition of a 60% interest in Brightray and the resulting dilution and integration exposure. The P-Note has an initial face amount of US$200,000,000 ²¹ and is settled solely in Class A Ordinary Shares at a fixed issue price of US$20.00 per share (US$2.00 after giving effect to the Share Subdivision) ²², with the base portion corresponding to up to 10,000,000 Class A Ordinary Shares (100,000,000 after giving effect to the Share Subdivision) ²³ and the aggregate consideration for the 60% interest, including the Consideration Shares, subject to a share cap of 24,000,000 Class A Ordinary Shares (240,000,000 after giving effect to the Share Subdivision) ²⁴, plus an uplift for late issuance of 0.5% per month of delay up to a maximum of 10% ²⁵ not subject to that cap. Upon a Breach Event, DeedTech may accelerate the P-Note at an amount equal to the greater of the Attributable Consideration and US$240,000,000 ²⁶, being 60% of the base consideration, less amounts previously settled, and all lock-up restrictions would lapse. Brightray has not yet commenced business and has no binding customer contracts, and its pipeline projects, including the Macao framework agreement and the Indiana letter of intent, are non-binding and may not result in definitive contracts or revenue. The company holds only a 60% interest in Brightray, and until June 30, 2029, Brightray's annual budget, capital expenditure exceeding US$20 million ²⁷, external guarantees and related party transactions exceeding US$20 million ²⁸ require the approval of both the company's board and DeedTech. The Private Placement first closing raised gross proceeds of US$10,000,000 ²⁹, and if the transfer agent fails to remove restrictive legends within 30 days after a six-month restricted period, the company is required to refund all subscription proceeds together with any interest generated, which could materially and adversely affect liquidity.

Management's message to shareholders emphasizes a strategic pivot toward industrialized AI data center delivery as the company's core growth business, following the completion on September 15, 2026 of the acquisition of a 60% equity interest in Brightray, a provider of fully integrated, prefabricated modular data center solutions, for consideration consisting of 2,000,000 Class A Ordinary Shares (20,000,000 after giving effect to the Share Subdivision) as Consideration Shares at a fixed issue price of US$20.00 per share (US$2.00 after giving effect to the Share Subdivision) ³⁰ and a P-Note with an initial face amount of US$200,000,000 ³¹. The P-Note is settled solely in Class A Ordinary Shares at the fixed issue price in annual instalments determined by reference to Brightray's Net Profit for the fiscal years ending June 30, 2027, 2028 and 2029, with the base portion corresponding to up to 10,000,000 Class A Ordinary Shares (100,000,000 after giving effect to the Share Subdivision) ³² and the aggregate number of Class A Ordinary Shares issuable as consideration for the 60% interest, including the Consideration Shares, subject to a share cap of 24,000,000 Class A Ordinary Shares (240,000,000 after giving effect to the Share Subdivision) ³³. Management also completed a first closing of the Private Placement of 1,000,000 Purchaser Units (10,000,000 after giving effect to the Share Subdivision) ³⁴ for gross proceeds of US$10,000,000 ³⁵ on September 16, 2026, with Purchaser Warrants to purchase 500,000 Class A Ordinary Shares (5,000,000 after giving effect to the Share Subdivision) at an exercise price of US$10.00 per share (US$1.00 after giving effect to the Share Subdivision) ³⁶ issued, and approved a 10-for-1 forward subdivision of shares effective October 26, 2026, increasing authorised share capital from 500,000,000 to 5,000,000,000 no par value shares ³⁷. The strategic priorities emphasized for the period ahead are the integration of Brightray's data center business and realization of the anticipated benefits of the Acquisition, the pursuit of the planned expansion into AI-driven short-form drama through the pending non-binding memorandum of understanding to explore a potential acquisition of PINK 308 LLC with an expected closing date extended from July 2026 to December 2026, and the funding of Brightray's capacity expansion and working capital requirements with the proceeds of the Private Placement, alongside the longer-term plan to nearshore production by establishing the company's own manufacturing facility closer to customers' projects and the announced intention to relocate the corporate headquarters to Singapore.