中概股收盘跌幅居前的个股为：明珠货运跌82.38%，INNO Holdings跌43.98%，童程童美跌22.78%，华 通金融跌20.34%，Mint跌17%。(格隆汇) | 代码 | 名称 | 最新价 | 涨跌幅 ^ | 涨跌额 | 成交额 | | --- | --- | --- | --- | --- | --- | | YGMZ | 明珠货运 | 0.187 | -82.38% | -0.873 | 559.68万 | | INHD | INNO Holdings | 0.2695 | -43.98% | -0.2116 | 5010.26万 | | VSA | 童程童美 | 0.1454 | -22.78% | -0.0429 | 721.97万 | | WTF | 华通金融 | 2.820 | -20.34% | -0.720 | 85.05万 | | MIMI | Mint | 0.4600 | -17.00% | -0.0942 | 108.41万 | ...

Core Insights - Waton Financial Limited has announced an expanded strategic partnership with Panda AI to explore the formation of a joint venture, enhancing their collaboration in AI-driven securities trading [1][2][3] - The partnership aims to leverage Panda AI's capabilities to improve Waton's DePearl™ core AI technology and trading agents, promoting automated trading strategies globally [1][2] - This collaboration is expected to strengthen Waton's position as a key infrastructure provider in the AI trading economy, creating new revenue opportunities and enhancing institutional client engagement [2][3] Company Overview - Waton Financial Limited operates primarily through its subsidiaries in Hong Kong, offering a range of financial services including securities brokerage, asset management, and software licensing [4] - The company emphasizes a technology-driven and customer-centric approach to deliver innovative financial solutions [4] Strategic Goals - The partnership with Panda AI reflects Waton's commitment to transforming traditional finance through AI, aiming for institutional-scale adoption of AI trading solutions [3] - The potential joint venture may expand Waton's AI product offerings, including the InfoMan investor relations agent, reinforcing its competitive edge in the fintech sector [3]

HONG KONG, Nov. 20, 2025 (GLOBE NEWSWIRE) -- Waton Financial Limited (NASDAQ: WTF), a provider of securities brokerage and financial technology services (“Waton” or the “Company”), today announced a strategic partnership with Chongqing Liangyun Zhijing Information Technology Limited (“Panda AI”) to jointly organize and launch the Global Competition for AI Agents in Securities Trading (the “Competition”). This collaboration is expected to enhance Waton’s AI capabilities and AI training models to establish a ...

Core Insights - Waton Financial Limited has delivered a tokenized AI agent named "DeMarc" to MOG Digitech Holdings Limited, marking its first commercial implementation under the "InfoMan" initiative [1][2] - The AI agent is designed to enhance investor relations through secure data management and intelligent automation, aligning with Waton's broader AI Enterprise Optimization strategy [2][4] - The integration of DePearl™ technology within the InfoMan framework positions Waton as a key player in the financial technology and intelligent automation sectors [4][5] Company Overview - Waton Financial Limited is a holding company based in the British Virgin Islands, providing a range of financial services including securities brokerage and asset management [6] - The company emphasizes technology-driven solutions and a customer-centric approach to deliver innovative financial services [6] Partner Company Overview - MOG Digitech Holdings Limited specializes in fintech solutions, focusing on digital infrastructure and enterprise solutions for the financial and commercial sectors in Asia [7] - The company is also involved in advancing stablecoin and decentralized finance ecosystems, highlighting its commitment to blockchain innovation [7]

Core Insights - Waton Financial Limited is transitioning from a traditional securities brokerage to a financial and crypto digital asset enterprise focused on integrating artificial intelligence and financial technology [1][4] - The company aims to position itself as a leader in AI trading technology and digital asset innovation, showcasing its proprietary AI agent technology and TradingWTF app [3][4] Company Overview - Waton Financial Limited operates primarily through its subsidiaries in Hong Kong, offering services such as securities brokerage, asset management, and software licensing [5] - The company emphasizes a technology-driven and customer-centric approach to deliver innovative financial solutions [5] Leadership and Strategy - The leadership team at Waton combines expertise in innovation, strategic vision, and capital markets, which is essential for driving the company's evolution in both traditional finance and digital asset ecosystems [2] - Waton is forming transformative partnerships to enhance its growth and solidify its position as an innovator in global financial technology [2] Technological Advancements - The redesigned website highlights Waton's AI-driven trading architecture, which integrates with its digital asset ecosystem, including cryptocurrencies and tokenized assets [3] - The company has established a Crypto Advisory Board and obtained a Type 1 license for participation in virtual asset trading platforms, enhancing its digital infrastructure [3] Commitment to Innovation - Waton's updated website reflects its commitment to transparency and innovation in AI-powered investment solutions, aiming to redefine investment management through AI [4] - The company seeks to merge machine intelligence with traditional finance to deliver institutional-grade solutions that connect legacy systems with the digital asset revolution [4]

Core Insights - Waton Financial Limited has launched its proprietary AI agent core, DePearl™, aimed at creating an AI-native financial ecosystem that bridges traditional finance with digital assets [1][3] - DePearl allows users to create, train, and monetize autonomous AI traders, known as "DeTraders," within a secure blockchain framework [2][4] - The technology is designed to facilitate secure transactions and settlements, enhancing scalability, transparency, and value creation in the financial sector [3][4] Company Overview - Waton Financial Limited is a holding company based in the British Virgin Islands, primarily operating through subsidiaries in Hong Kong, offering services such as securities brokerage and asset management [5] - The company emphasizes a technology-driven and customer-centric approach to deliver innovative financial solutions [5] Technological Innovation - DePearl encapsulates the "soul" of an AI trader, enabling it to learn and evolve autonomously while functioning as a verifiable digital asset [2][3] - The integration of AI, blockchain, and digital asset management is central to Waton's strategy, aiming to redefine the financial landscape [4] Strategic Vision - The launch of DePearl is part of Waton's broader vision to create a sustainable and scalable ecosystem that empowers various stakeholders, including investors and institutions [4] - The company plans to partner with stablecoins to enhance liquidity and collateralization within its ecosystem [3]

Core Viewpoint - Waton Financial Limited is expanding into the cryptocurrency sector by forming a Crypto Advisory Board to guide its strategic initiatives and enhance its position in the digital asset ecosystem [1][2]. Group 1: Advisory Board Formation - The newly established Crypto Advisory Board will oversee all cryptocurrency initiatives, including the development of a crypto reserve and institutional-grade solutions for clients [2]. - The Advisory Board aims to maintain high standards of innovation, transparency, and compliance in digital asset operations, with plans to add more industry experts as the company's crypto strategy evolves [2][3]. Group 2: Leadership Appointment - Arben Kane has been appointed as the first member of the Advisory Board, bringing expertise from his previous roles in blockchain infrastructure and Web3 investment strategies [3]. - His experience in cryptocurrency treasury management and decentralized finance is expected to help the company unlock new revenue streams and enhance its competitive advantage in digital asset markets [3][4]. Group 3: Strategic Goals - The company aims to develop proprietary AI agent technology and establish a robust digital infrastructure to create a unique competitive advantage in the digital asset space [4]. - With the enhanced regulatory capabilities following the approval of its Type 1 license upgrade, the company is positioned to participate in virtual asset trading platforms and crypto-related offerings in Hong Kong [2][4].

Core Viewpoint - Waton Financial Limited has appointed Mr. Junfeng Qin as Lead Web3 Scientist to enhance its brokerage systems by integrating traditional securities with digital asset markets, aiming to innovate financial infrastructure for global investors [1][2][3]. Group 1: Strategic Importance - The appointment of Mr. Qin is a strategic move to strengthen Waton's leadership and support its long-term growth strategy by developing a next-generation brokerage infrastructure [2][4]. - Waton aims to capture new revenue opportunities and expand its client base by bridging traditional securities with digital asset markets, positioning itself as a leader in Asia's evolving financial services landscape [2][3]. Group 2: Expertise and Role - Mr. Qin brings over 17 years of experience in developing trading systems, which will be crucial in creating solutions that connect conventional securities trading with the demand for digital assets [3][4]. - His role will involve working closely with the future Chief AI Officer and the Chairman to build a world-class infrastructure that enhances efficiency in traditional operations and sets new standards for digital asset integration [4]. Group 3: Company Overview - Waton Financial Limited is a holding company based in the British Virgin Islands, primarily operating through subsidiaries in Hong Kong, offering services such as securities brokerage, asset management, and software licensing [5]. - The company is committed to delivering innovative and reliable financial solutions driven by technology and a customer-centric approach [5].

Group 1 - A growing number of local Hong Kong companies are listing in the United States, with approximately 31 companies having already listed on NASDAQ this year, and at least 27 more in the application process [2] - Among the listed companies, there are several capital market intermediaries, including brokers, financial printing firms, and investor relations service providers [2] - According to Ryan's statistics, as of August 15, 2025, 10 Hong Kong brokerage firms have applied for U.S. listings this year, with 4 already listed and 6 still in process [2] Group 2 - The reasons for the influx of intermediaries to the U.S. market include lower listing thresholds, faster and easier listing processes, and relatively lower initial IPO costs compared to Hong Kong [3] - The U.S. listing requirements are less stringent, with some companies facing lower performance expectations than those on Hong Kong's GEM (Growth Enterprise Market) [3] - The U.S. operates under a registration system that requires only disclosure, while Hong Kong has a dual filing system that necessitates approval from both the Hong Kong Stock Exchange and the Securities and Futures Commission [3]

PART I [ITEM 3. KEY INFORMATION](index=8&type=section&id=ITEM%203.%20KEY%20INFORMATION) This section details the significant risks confronting Waton Financial Limited, categorized into three main areas: risks associated with operating in Hong Kong under PRC influence, risks inherent to the company's specific business and industry, and risks related to the ownership of its Ordinary Shares [Risk Factors](index=8&type=section&id=D.%20Risk%20Factors) This subsection elaborates on specific risks including geopolitical risks from PRC government intervention, business and industry risks like revenue volatility and customer/supplier concentration, and shareholder risks such as controlling shareholder influence and foreign private issuer status - The company identifies significant risk from potential PRC government intervention in its Hong Kong operations, despite currently having no operations in Mainland China, which could materially change operations and share value[22](index=22&type=chunk)[23](index=23&type=chunk) - Compliance with evolving PRC laws on cybersecurity and data privacy poses significant uncertainty, as their applicability to Hong Kong operations is unclear and could lead to sanctions if deemed non-compliant[31](index=31&type=chunk)[33](index=33&type=chunk)[36](index=36&type=chunk) Financial Performance Fluctuation | Fiscal Year Ended March 31 | Total Revenues (US$ million) | YoY Growth | Net Income/(Loss) (US$ million) | | :--- | :--- | :--- | :--- | | 2023 | 5.7 | - | 3.1 | | 2024 | 10.1 | 75.2% | 2.5 | | 2025 | 7.4 | -25.9% | (12.0) | - The company has a significant customer concentration risk, with the top five customers accounting for **88.2%**, **89.7%**, and **97.6%** of total revenues for fiscal years 2025, 2024, and 2023, respectively[61](index=61&type=chunk) - A substantial portion of revenue is derived from a single related party, Wealth Guardian Investment Limited (WGI), which accounted for **64.2%**, **39.5%**, and **81.5%** of total revenues in fiscal years 2025, 2024, and 2023, respectively, with an anticipated acquisition of WGI by a third party potentially altering this commercial relationship[63](index=63&type=chunk) - The company is dependent on a single related-party supplier, Shenzhen Jinhui Technology Co., Ltd., controlled by Chairman Mr. Zhou Kai, for trading platform APP development, and an anticipated acquisition of this supplier could disrupt services and increase costs[66](index=66&type=chunk)[67](index=67&type=chunk) - As of the report date, Chairman Mr. Zhou Kai beneficially owns approximately **84.95%** of the company's outstanding shares, giving him substantial influence over corporate decisions[169](index=169&type=chunk) - The company is a 'foreign private issuer' and a 'controlled company', allowing it to rely on exemptions from certain Nasdaq corporate governance standards, which may offer less protection to shareholders compared to domestic U.S. issuers[170](index=170&type=chunk)[180](index=180&type=chunk) - The company's auditor, UHY LLP, is a U.S.-based firm regularly inspected by the PCAOB, but the report notes the risk that if the PCAOB is unable to inspect auditors of foreign companies for two consecutive years under the HFCAA, the company's shares could be delisted[189](index=189&type=chunk)[190](index=190&type=chunk)[193](index=193&type=chunk) [ITEM 4. INFORMATION ON THE COMPANY](index=46&type=section&id=ITEM%204.%20INFORMATION%20ON%20THE%20COMPANY) This section provides a comprehensive overview of Waton Financial Limited, detailing its corporate history, structure, and its initial public offering in April 2025, along with its business model, competitive strengths, and regulatory landscape [History and Development of the Company](index=46&type=section&id=A.%20History%20and%20Development%20of%20the%20Company) This subsection covers the company's incorporation in the British Virgin Islands, its corporate structure consisting of subsidiaries in Hong Kong, the Cayman Islands, and the BVI, and confirms it does not operate through VIEs, also detailing the completion of its Initial Public Offering (IPO) on the Nasdaq Capital Market in April 2025 - The company was incorporated in the British Virgin Islands on **June 25, 2010**, and changed its name to Waton Financial Limited on **July 5, 2023**, operating through subsidiaries in Hong Kong, the Cayman Islands, and the BVI, with no subsidiaries or VIE structures in Mainland China[216](index=216&type=chunk) - On **April 2, 2025**, the company closed its IPO on the Nasdaq Capital Market under the ticker 'WTF', issuing **4,375,000 Ordinary Shares** at **$4.00 per share**, raising total gross proceeds of approximately **$20.075 million** including the full exercise of the over-allotment option[218](index=218&type=chunk) [Business Overview](index=48&type=section&id=B.%20Business%20Overview) The company operates as a provider of securities brokerage and financial technology services through its Hong Kong subsidiaries, WSI and WTI, with key services including securities brokerage, margin financing, bond distribution, and software licensing, and a growth strategy focusing on customer expansion, service enhancement, asset management, and a global AI initiative Revenue Breakdown by Service Type (FY2023-2025) | Service Category | FY2025 Revenue (US$ million) | FY2024 Revenue (US$ million) | FY2023 Revenue (US$ million) | | :--- | :--- | :--- | :--- | | Brokerage, Commission & Margin Financing | 5.5 | 9.4 | 2.3 | | Software Licensing & Related Support | 1.8 | 1.4 | 3.5 | - As of **March 31, 2025**, WSI had over **6,700 securities brokerage customers**, including **69 corporate accounts** and **three introducing broker omnibus accounts**, with approximately **1,000** active customers with assets in their accounts[226](index=226&type=chunk)[256](index=256&type=chunk) - The company has launched a global AI strategy to transition its business model to support AI-driven entities, with key initiatives including developing an application for users to train their own AI trading agents and enabling these agents to be marketed and exchanged like NFTs/RWAs[240](index=240&type=chunk)[241](index=241&type=chunk) - The company's subsidiary WSI holds Type 1 (dealing in securities), Type 4 (advising on securities), Type 5 (advising on futures contracts), and Type 9 (asset management) licenses from the Hong Kong HKSFC[226](index=226&type=chunk)[243](index=243&type=chunk) - The company has begun developing its asset management business, having launched one segregated portfolio, GRAND FULL SP I, which had received total subscriptions of **US$4 million** as of the report date[235](index=235&type=chunk)[285](index=285&type=chunk)[286](index=286&type=chunk) [Operating and Financial Review and Prospects](index=79&type=section&id=ITEM%205.%20OPERATING%20AND%20FINANCIAL%20REVIEW%20AND%20PROSPECTS) This section provides management's analysis of the company's financial performance for the fiscal years ended March 31, 2023, 2024, and 2025, detailing a revenue decrease of **25.9%** in FY2025 to **$7.4 million**, resulting in a net loss of **$12.0 million**, primarily driven by a significant increase in share-based compensation expenses, also covering liquidity, capital resources, cash flow analysis, and critical accounting policies Consolidated Results of Operations Summary (FY2023-2025) | Metric (US$ million) | FY2025 | FY2024 | FY2023 | | :--- | :--- | :--- | :--- | | **Total Revenues** | **7.4** | **10.1** | **5.7** | | Total Operating Costs and Expenses | 18.1 | 7.1 | 2.7 | | *Share-based compensation expenses* | *8.8* | *0* | *0.4* | | Operating (Loss) Income | (10.7) | 2.9 | 3.1 | | **Net (Loss) Income** | **(12.0)** | **2.5** | **3.1** | - Total revenues decreased by **25.9%** in FY2025, primarily due to a **47.0%** drop in brokerage and commission income, which was impacted by lower bond distribution services income[389](index=389&type=chunk)[390](index=390&type=chunk) - Operating expenses increased by **153.5%** in FY2025 to **$18.1 million**, largely due to **$8.8 million** in share-based compensation expenses related to the adoption of the 2024 Global Equity Incentive Plan prior to the IPO[393](index=393&type=chunk)[398](index=398&type=chunk) Cash Flow Summary (FY2023-2025) | Cash Flow (US$ million) | FY2025 | FY2024 | FY2023 | | :--- | :--- | :--- | :--- | | Net cash from/(used in) operating activities | 0.4 | (1.8) | 12.0 | | Net cash used in investing activities | (0.01) | (8.2) | (0.005) | | Net cash from/(used in) financing activities | 2.8 | (8.3) | 13.0 | - As of **March 31, 2025**, the company had cash and cash equivalents of approximately **$7.7 million**, compared to **$4.9 million** as of March 31, 2024[423](index=423&type=chunk) [Directors, Senior Management, and Employees](index=93&type=section&id=ITEM%206.%20DIRECTORS%2C%20SENIOR%20MANAGEMENT%20AND%20EMPLOYEES) This section provides details on the company's leadership, compensation, and governance structure, introducing the board of directors and executive officers, outlining compensation for FY2025 and the 2024 Global Equity Incentive Plan, detailing the board structure and committee compositions, and presenting the share ownership structure, highlighting Chairman Zhou Kai's substantial beneficial ownership Board of Directors and Executive Officers | Name | Position(s) | | :--- | :--- | | ZHOU Kai | Director, Chairman of the Board, and Chief Technology Officer | | CHU Chun On Franco | Director and Chief Executive Officer | | James Beeland Rogers Jr. | Director and Senior Advisor | | WEN Huaxin | Chief Financial Officer | | FUNG Chi Kin | Independent Director | | DU Haibo | Independent Director | | JIANG Wen | Independent Director | - In fiscal year 2025, the aggregate compensation paid to directors and executive officers was approximately **US$5.04 million**[477](index=477&type=chunk) - The company adopted the 2024 Global Equity Incentive Plan in **November 2024**, authorizing up to **10,245,000 Ordinary Shares** for equity awards, with **4,884,030 Restricted Share Units (RSUs)** granted under this plan as of the report date[479](index=479&type=chunk)[480](index=480&type=chunk)[489](index=489&type=chunk) - As of the report date, Mr. Zhou Kai, the Chairman, Director, and CTO, beneficially owns approximately **84.95%** of the company's issued and outstanding Ordinary Shares through entities he controls[509](index=509&type=chunk)[514](index=514&type=chunk) [Major Shareholders and Related Party Transactions](index=102&type=section&id=ITEM%207.%20MAJOR%20SHAREHOLDERS%20AND%20RELATED%20PARTY%20TRANSACTIONS) This section details the company's significant related party relationships and transactions, primarily with Chairman Zhou Kai, Shenzhen Jinhui (a company he controls), and Wealth Guardian Investment Limited (WGI), over which the company exercises significant influence, summarizing financial balances and revenues associated with these related parties Revenue from Related Party WGI (FY2023-2025) | Revenue Type (US$) | 2025 | 2024 | 2023 | | :--- | :--- | :--- | :--- | | Brokerage commission and handling charge | 2,539,260 | 1,757,731 | 1,707,334 | | Interest income | 1,040,634 | 1,016,179 | 181,550 | | Software licensing and related support services | 1,200,000 | 1,197,551 | 2,786,105 | | **Total** | **4,779,894** | **3,971,461** | **4,674,989** | - The company outsources software development to Shenzhen Jinhui, a company controlled by Chairman Zhou Kai, purchasing approximately **$1.0 million**, **$0.7 million**, and **$0.6 million** in services from Shenzhen Jinhui in FY2025, FY2024, and FY2023, respectively[531](index=531&type=chunk) - The company has outstanding balances due to related parties, primarily borrowings from Chairman Zhou Kai and unpaid service fees to Shenzhen Jinhui, with the total amount due to related parties approximately **$1.8 million** as of **March 31, 2025**[526](index=526&type=chunk) [Financial Information](index=104&type=section&id=ITEM%208.%20FINANCIAL%20INFORMATION) This section confirms the inclusion of the company's consolidated financial statements and discusses legal proceedings and dividend policy, stating the company is not currently party to any material legal proceedings and has no present plan to declare or pay cash dividends, intending to retain earnings for business growth and development - The company has never declared or paid any cash dividends on its Ordinary Shares and has no present plan to do so in the foreseeable future[532](index=532&type=chunk) - The company intends to retain most, if not all, of its available funds and any future earnings to support operations and finance the growth and development of its subsidiaries' business[530](index=530&type=chunk)[532](index=532&type=chunk) [Additional Information](index=105&type=section&id=ITEM%2010.%20ADDITIONAL%20INFORMATION) This section provides supplementary corporate information, including details on the company's memorandum and articles of association, material contracts, and exchange controls, with a significant portion dedicated to a detailed analysis of the tax implications for the company and its shareholders in the British Virgin Islands, Hong Kong, the Cayman Islands, and the United States, notably discussing the potential classification of the company as a Passive Foreign Investment Company (PFIC) and its consequences for U.S. holders - The company is not subject to income, capital gains, or withholding taxes in its jurisdiction of incorporation, the British Virgin Islands[543](index=543&type=chunk)[544](index=544&type=chunk) - In Hong Kong, the company's subsidiaries are subject to a two-tiered profits tax regime: **8.25%** on the first **HK$2 million** of assessable profits and **16.5%** on profits thereafter, with capital gains from the sale of shares not taxed[372](index=372&type=chunk)[545](index=545&type=chunk) - The company does not expect to be treated as a Passive Foreign Investment Company (PFIC) for U.S. federal income tax purposes for the current taxable year, though its status is determined annually and depends on factors like the market price of its shares and the composition of its assets and income[555](index=555&type=chunk) - If the company were classified as a PFIC, U.S. holders of its shares would be subject to adverse U.S. tax rules, including ordinary income tax rates and an interest charge on gains and 'excess distributions', unless a timely 'mark-to-market' election is made[556](index=556&type=chunk)[558](index=558&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=112&type=section&id=ITEM%2011.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) This section outlines the company's exposure to various market risks, primarily identifying concentration and credit risk stemming from heavy reliance on a single major customer (WGI) and a single major supplier (Shenzhen Jinhui), also discussing foreign currency exchange risk, which is considered insignificant due to the HKD-USD peg, as well as interest rate and inflation risks, which are currently deemed not material - The company faces significant concentration risk, with related party WGI accounting for **64.2%** of total revenues in FY2025 and **61.0%** of total receivables as of **March 31, 2025**[579](index=579&type=chunk)[581](index=581&type=chunk) - There is a major supplier concentration risk, with related party Shenzhen Jinhui accounting for **5.4%**, **11.3%**, and **21.1%** of total expenses for fiscal years 2025, 2024, and 2023, respectively[580](index=580&type=chunk) - Foreign currency exchange risk is considered insignificant for transactions between HKD and USD due to the Hong Kong dollar's peg to the U.S. dollar[583](index=583&type=chunk) PART II [Material Modifications to the Rights of Security Holders and Use of Proceeds](index=115&type=section&id=ITEM%2014.%20MATERIAL%20MODIFICATIONS%20TO%20THE%20RIGHTS%20OF%20SECURITY%20HOLDERS%20AND%20USE%20OF%20PROCEEDS) This section details the use of proceeds from the company's Initial Public Offering (IPO) in April 2025, which raised gross proceeds of approximately **$20.1 million**, resulting in net proceeds of approximately **$17.5 million** after deducting expenses, with **$15.8 million** of the net proceeds remaining unused as of the report date - The company completed its IPO in **April 2025**, raising approximately **$17.5 million** in net proceeds after deducting underwriter discounts and other expenses of about **$2.7 million**[595](index=595&type=chunk)[597](index=597&type=chunk) - As of the report date, the company has used a portion of the IPO proceeds for enhancing its trading platform, developing its asset management business, expanding investment offerings, and for general working capital, with approximately **$15.8 million** of the net proceeds remaining unused[597](index=597&type=chunk) [Controls and Procedures](index=116&type=section&id=ITEM%2015.%20CONTROLS%20AND%20PROCEDURES) This section addresses the company's disclosure controls and internal control over financial reporting, concluding that as of **March 31, 2025**, disclosure controls were ineffective due to identified material weaknesses related to a lack of structured financial closing processes, ineffective IT general controls, and inadequate cybersecurity risk assessment and disaster recovery planning, with outlined remediation measures - Management concluded that disclosure controls and procedures were **ineffective** as of **March 31, 2025**[598](index=598&type=chunk) - Material weaknesses were identified in internal control over financial reporting, including: 1) lack of structured period-end financial closing processes, 2) ineffective IT general controls (user access, change management), and 3) inadequate cybersecurity risk assessment and disaster recovery planning[598](index=598&type=chunk) - The company has implemented remediation measures, including formalizing accounting policies, hiring an external consultant, and enhancing the design of IT general controls[599](index=599&type=chunk) [Corporate Governance](index=117&type=section&id=ITEM%2016G.%20CORPORATE%20GOVERNANCE) This section explains the company's corporate governance practices in the context of its status as a 'foreign private issuer' and a 'controlled company' under Nasdaq listing rules, allowing it to follow certain British Virgin Islands home country practices instead of Nasdaq requirements, such as not needing a majority of independent directors, and potentially electing exemptions from certain governance standards due to Chairman Zhou Kai holding over **50%** of voting power - As a 'foreign private issuer', the company follows its home country (British Virgin Islands) practices in lieu of certain Nasdaq rules, including the requirement for a majority of independent directors on the board[614](index=614&type=chunk) - The company qualifies as a 'controlled company' because Chairman Mr. Zhou Kai controls more than **50%** of the voting power, allowing for exemptions from certain Nasdaq corporate governance requirements[616](index=616&type=chunk) - Despite exemptions, the company must still comply with Nasdaq's audit committee requirements, which mandate at least three independent directors, with a phase-in period post-listing[619](index=619&type=chunk) PART III [Financial Statements](index=120&type=section&id=ITEM%2018.%20FINANCIAL%20STATEMENTS) This section presents the audited consolidated financial statements of Waton Financial Limited for the three-year period ended March 31, 2025, prepared in accordance with U.S. GAAP, including the independent auditor's report, consolidated balance sheets, statements of operations, changes in shareholders' equity, and cash flows, with notes providing detailed information on significant accounting policies, financial items, related party transactions, and regulatory capital requirements Consolidated Balance Sheet Summary | (US$ million) | As of March 31, 2025 | As of March 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **30.7** | **32.7** | | Cash and cash equivalents | 7.7 | 4.9 | | Receivables from clients (incl. related party) | 6.6 | 13.1 | | **Total Liabilities** | **18.0** | **21.9** | | Payables to clients (incl. related party) | 7.6 | 15.4 | | **Total Shareholders' Equity** | **12.8** | **10.7** | Consolidated Statement of Operations | (US$ million) | FY2025 | FY2024 | FY2023 | | :--- | :--- | :--- | :--- | | **Total Revenues** | **7.4** | **10.1** | **5.7** | | Brokerage and commission income | 4.4 | 8.2 | 2.1 | | Interest income | 1.2 | 1.2 | 0.2 | | Software licensing & support services | 1.8 | 1.4 | 3.5 | | **Total operating costs and expenses** | **18.1** | **7.1** | **2.7** | | **Net (Loss) Income** | **(12.0)** | **2.5** | **3.1** | - The company recognizes revenue from brokerage commissions at a point in time when trades are completed, while revenue from software licenses is recognized at a point in time when the software is made available, and revenue from maintenance, support, and SaaS services is recognized ratably over the contract term[696](index=696&type=chunk)[706](index=706&type=chunk)[713](index=713&type=chunk) - The company's Hong Kong subsidiary, WSI, is subject to a minimum liquid capital requirement of approximately **$385,609** (HK$3.0 million) and was in compliance as of **March 31, 2025**[802](index=802&type=chunk)