Financial Performance - Income from wealth management business increased to $16.8 million for the fiscal year ended March 31, 2024, up from $5.7 million in 2023 and $122,711 in 2022[56] - For the fiscal year ended March 31, 2024, income from wealth management services increased significantly to $16.8 million, up from $5.7 million in the previous fiscal year, representing a growth of approximately 194.7%[142] - The net fair value change in digital assets for the fiscal year ended March 31, 2024, was $16.8 million, compared to $5.7 million for the fiscal year ended March 31, 2023, indicating a substantial increase[114] - The company recorded a net loss of $20.2 million for the fiscal year ended March 31, 2023, compared to a net loss of $14.4 million for the fiscal year ended March 31, 2022[150] - The company recorded a net loss of $3.7 million for the fiscal year ended March 31, 2024, a significant improvement compared to a net loss of $20.2 million for the fiscal year ended March 31, 2023[163] - The cost of income for continuing operations rose from $3.7 million in the fiscal year ended March 31, 2023, to $11.1 million in the fiscal year ended March 31, 2024[115] - General and administrative expenses remained stable at $4.3 million for the fiscal year ended March 31, 2024, compared to $3.5 million for the fiscal year ended March 31, 2023[120] - Net cash used in operating activities for continuing operations was $11.6 million for the fiscal year ended March 31, 2024, primarily due to a loss before income tax expense of $3.7 million and adjustments for non-cash items totaling $18.4 million[168] Assets and Investments - The Fund's total assets under management reached $61.3 million as of March 31, 2024, following a $5.0 million anchor investment in May 2023[57] - The total fair value of digital assets as of March 31, 2024, was $126,468,184, with a total of $168,851,387 in fair value level 1 measurements[179] - The company plans to diversify its investment portfolio and reduce risks through new deals in digital assets and related derivative contracts[146] Business Strategy and Operations - The company formed a joint venture, NOWLIT FinTech Solutions Corp., in Canada to expand its digital asset business presence in North America[53] - LSQ Capital Limited obtained a Type 1 license from the SFC in April 2024, allowing it to provide securities and virtual assets dealing services[84] - The company focuses on providing structured derivative products to institutional investors and high-net-worth individuals, aiming to mitigate risks associated with cryptocurrency volatility[83] - The current business strategy emphasizes catering to large institutions and high-net-worth individuals within the cryptocurrency sector[59] - The company aims to enhance its market reach by keeping up with the fast-paced evolution of the digital currency and web3 industries[59] - The company has established a wholly owned subsidiary, LSQ Investment Limited, in Hong Kong to support its business operations[52] Clientele and Shareholder Information - The company’s clientele for wealth management services consists of institutional investors and high-net-worth individuals, with a focus on acquiring new customers to maintain business growth[140] - Antalpha holds 9,250,000 Ordinary Shares, representing 22.2% of the total Ordinary Shares and voting power[210] - As of March 31, 2024, the company had digital assets payables of $2.9 million to Antalpha, a significant shareholder and customer[213] - As of March 31, 2023, the company had payables to customers of $5.2 million to a substantial shareholder[215] Employee and Corporate Governance - The company has 19 full-time employees as of March 31, 2024, a decrease from 49 employees in 2022[132] - The board of directors consists of nine members, including five independent directors[201] - The compensation committee is responsible for reviewing and approving the compensation structure for directors and executive officers[226] Future Plans and Dividends - The company does not anticipate paying cash dividends in the foreseeable future, intending to retain earnings for business expansion[220] - The company intends to fund future capital expenditures with existing cash balances and cash flow from operating activities, although capital expenditures were nil for the fiscal years ended March 31, 2022, 2023, and 2024[171] Regulatory and Market Considerations - The VASP licensing regime under the AMLO Amendment came into effect on June 1, 2023, which may impact the company's operations in the digital asset market[129] - The company has no direct exposure to FTX or other cryptocurrency companies, but acknowledges that market volatility may impact operations and financial condition[174] Share Issuance and Incentives - The board of directors approved the 2024 Share Incentive Plan, allowing for the issuance of up to 2,000,000 Ordinary Shares, effective October 12, 2024[188] - The company has reserved an aggregate of 3,300,000 Ordinary Shares for its 2022 Performance Incentive Plan, all of which have been issued as of the date of the annual report[198] - The company issued 4,100,000 Ordinary Shares to LSQ Investment Fund for an aggregate purchase price of $4,100,000 in November 2021[224] Derivative Products - For the fiscal year ended March 31, 2023, the aggregate value of derivative products entered with related customers was approximately $9.5 million, with $4.9 million expiring[215] - For the fiscal year ended March 31, 2024, the aggregate value of derivative products entered with Antalpha is approximately $139.4 million, while the derivative products expired to Antalpha amount to around $154.1 million[232] - The aggregate value of derivative products entered with related customers for the fiscal year ended March 31, 2024, is about $59.2 million, with expired derivative products totaling approximately $64.8 million[233]
Metalpha Technology (MATH) - 2024 Q4 - Annual Report