Garden Stage(US:GSIW)2025-07-31 20:16Financial Performance - Revenues for the year ended March 31, 2025, were US$5,466,243, a significant increase from US$1,408,469 in 2024 and US$3,259,296 in 2023[552] - The company recorded a net loss of US$4,317,642 for the year ended March 31, 2025, compared to losses of US$4,589,478 in 2024 and US$207,169 in 2023[552] - Total revenues increased by 288.1% from US$1,408,469 for the year ended March 31, 2024 to US$5,466,243 for the year ended March 31, 2025[603] - Net loss for the year ended March 31, 2025 was US$4,317,642, a decrease of 5.9% compared to a net loss of US$4,589,478 for the year ended March 31, 2024[602] - Total revenues decreased significantly by 56.8% from US$3,259,296 for the year ended March 31, 2023 to US$1,408,469 for the year ended March 31, 2024[629] Revenue Sources - Introducing and referral income accounted for 85.6% of total revenues in 2025, up from 18.8% in 2024 and 8.6% in 2023, indicating a strong growth in this segment[576] - Brokerage commissions represented approximately 6.0% of total revenues in 2025, a decrease from 28.3% in 2024 and 27.6% in 2023, reflecting a shift in revenue sources[570] - Due diligence service fees were introduced in 2025, contributing 1.5% to total revenues, while this segment had no contribution in 2024 and 2023[571] - Handling income accounted for 2.3% of total revenues in 2025, down from 9.1% in 2024 and 11.4% in 2023, indicating a decline in this revenue stream[575] - Advisory fees represented only 0.2% of total revenues in 2025, a sharp decline from 29.9% in 2024, highlighting a significant change in the advisory services market[566] - Investment management fee income for 2025 was $60,012, compared to $30,622 in 2023, showing growth in this area despite no revenue in 2024[577] Expenses and Losses - Total expenses for the year ended March 31, 2025, were $9,740,651,000, representing 178.2% of total revenues[588] - Compensation and benefits accounted for 68.0%, 233.3%, and 64.5% of total revenues for the years ended March 31, 2025, 2024, and 2023, respectively[592] - Communications and technology expenses accounted for 33.2%, 31.1%, and 3.6% of total revenues for the years ended March 31, 2025, 2024, and 2023, respectively[591] - Professional fees accounted for 14.1%, 26.8%, and 19.5% of total revenues for the years ended March 31, 2025, 2024, and 2023, respectively[596] - Total expenses increased by 62.8% from US$5,984,588 for the year ended March 31, 2024 to US$9,740,651 for the year ended March 31, 2025[602] Market Conditions - The financial services industry is influenced by economic conditions, trading volume, and regulatory changes, which can materially affect the company's results[553] - The competitive landscape in Hong Kong is intense, with larger competitors posing challenges in brand recognition and service offerings[561] - The ongoing geopolitical tensions, including the Russia-Ukraine conflict and the Israel-Hamas war, have not materially impacted the company's operations as of now[562] - The introduction of tariffs and trade tensions has created uncertainty in international markets, prompting the company to diversify trading strategies[563][564] - The company is focused on monitoring macroeconomic trends and maintaining communication with clients to mitigate potential adverse effects from global trade shifts[564] Compliance and Risk Management - Regulatory compliance is critical, with potential penalties for failing to meet capital requirements, which could adversely affect financial results[558][559] - The allowance for expected credit losses increased from US$7,668 in 2024 to US$105,920 in 2025, indicating a significant rise in anticipated credit risk[672] - The company has not entered into any financial guarantees or derivative contracts that would expose it to additional financial risks[682] Cash and Financing - As of March 31, 2025, the company had US$7,885,624 in cash and restricted cash, with US$7,185,937 held in Hong Kong dollars[655] - Net cash used in operating activities for the year ended March 31, 2024, was US$7,090,770, significantly impacted by advance payments for IT and marketing services[664] - Net cash provided by financing activities for the year ended March 31, 2024 was US$9,693,950, primarily from net proceeds of US$10,133,680 from the IPO, offset by offering costs of US$435,835[667] Customer Concentration - For the year ended March 31, 2025, two counterparties accounted for approximately 54% and 31% of total revenue, indicating significant customer concentration risk[673] - As of March 31, 2025, receivables from three counterparties accounted for approximately 37%, 23%, and 10% of total receivables before allowance for expected credit losses[674]