Revenue Performance - Revenues from clients in Hong Kong increased by approximately $0.6 million from $2.7 million in the year ended March 31, 2024, to $3.3 million in the year ended March 31, 2025[34]. - Revenues from clients in Mainland China decreased by approximately $0.9 million from $1.5 million in the year ended March 31, 2024, to $0.6 million in the year ended March 31, 2025[34]. - Revenues from clients in Singapore increased by approximately $0.1 million from $0.3 million in the year ended March 31, 2024, to $0.4 million in the year ended March 31, 2025[34]. - A significant portion of the company's revenue is derived from clients based in Mainland China, impacting profitability based on their fundraising activities in Hong Kong[75]. - For the years ended March 31, 2025, 2024, and 2023, the top five clients accounted for 57.2%, 78.1%, and 85.6% of total revenues, with the largest client contributing 30.8%, 28.2%, and 25.6% respectively[97]. Regulatory Environment - The company is registered with the CSRC as an overseas securities company and has provided undertakings regarding the listing sponsorship for PRC domestic companies[36]. - The PRC government may intervene or influence the company's operations at any time, which could result in a material change in operations and/or the value of its securities[40]. - The company has complied with all applicable laws and regulations in connection with the engagement with PRC clients in all material respects[37]. - The PRC Data Security Law and the Personal Information Protection Law impose significant compliance requirements that could adversely affect the company's financial condition and results of operations[42][45]. - The company faces regulatory and legal uncertainties due to the evolving laws and regulations in Mainland China, which may change quickly with little advance notice[38]. - The company may be subject to inquiries, reviews, or investigations by regulatory authorities, which could result in penalties or restrictions on its operations[39]. - The company is not currently required to obtain regulatory approval from the CSRC or CAC for its U.S. listings[54]. - The enforcement of PRC laws and regulations may materially and adversely affect the company's financial condition and results of operations[61]. - The company is subject to extensive regulatory requirements in Hong Kong, with non-compliance potentially leading to penalties and adverse effects on business operations[79]. Operational Risks - The company’s ability to move money out of Hong Kong may be affected by future restrictions imposed by the PRC government, potentially hindering business expansion[40]. - The company faces significant risks due to its relatively short operating history since starting corporate finance advisory services in 2018, making future revenue predictions challenging[94]. - The demand for services is influenced by market conditions, which can lead to lower demand or delays in fundraising activities, adversely affecting financial performance[103]. - The company may face significant challenges in successfully implementing its business strategies and future plans, which could adversely affect profitability and prospects[111]. - Legal proceedings and claims could result in significant costs and adversely impact the company's financial condition and operations[116]. Financial Management - The company must comply with anti-money laundering regulations, and failures in this area could result in penalties and adversely affect financial results[120]. - The financial performance is subject to uncertainties due to potential default or delays in payments from clients, which may adversely affect cash flow[104]. - Future growth plans will require substantial improvements in operational and administrative systems, financial controls, and recruitment efforts, potentially leading to increased expenditures[112]. - The company relies on dividends from its subsidiaries to fund cash and financing requirements, which may be restricted by subsidiary debt or applicable laws[206]. Corporate Governance - The dual-class share structure concentrates voting power with Grande Holding, which holds 96.07% of the voting power, limiting influence of Class A shareholders[146]. - Class B Ordinary Shares, held by key executives, represent 83.40% of the aggregate voting power, allowing them to control significant corporate decisions[147]. - The company is classified as a "controlled company" under Nasdaq rules, allowing it to exempt itself from certain corporate governance requirements, which may adversely affect public shareholders[154]. - The majority voting power is held by Mr. Tak Kai Raymond and Ms. Yujie Chen, potentially limiting the influence of minority shareholders[154]. - The company’s corporate governance practices may differ significantly from U.S. standards, potentially affording less protection to shareholders[165]. Market Conditions - The corporate finance services industry in Hong Kong is highly competitive, with increasing market players potentially affecting the company's market share and financial condition[78]. - Heightened tensions in international economic relations, particularly between the U.S. and China, may negatively affect the capital market in Hong Kong[74]. - The ongoing conflict in Ukraine may adversely affect global economic markets, which could impact the company's operations despite no direct exposure to Russia[77]. - The trading prices of Class A Ordinary Shares may be highly volatile, influenced by factors such as market conditions and performance of other listed companies in Hong Kong and China[177]. Compliance and Internal Controls - Material weaknesses in internal control over financial reporting were identified, including insufficient personnel knowledgeable in U.S. GAAP and lack of an internal audit function[139]. - The company has engaged qualified financial and accounting advisory teams to strengthen financial reporting and improve internal controls[139]. - The company has implemented measures to enhance IT systems and policies to mitigate risks associated with data security and operational disruptions[139]. - Any failure to comply with data privacy laws could expose the company to significant liabilities and reputational damage[134]. Future Outlook - The company plans to expand its corporate finance advisory business and develop new services, but successful implementation depends on various factors including recruitment and regulatory compliance[110]. - The company aims to diversify its client base and reduce concentration risk, but there is no assurance of success in achieving this goal[99]. - Future restrictions by the PRC government on cash transfers could adversely affect the company's ability to conduct business and pay dividends[145]. - The company plans to grow both organically and through acquisitions or strategic alliances, which may involve unforeseen integration difficulties and additional capital requirements[113].
Grande Group Ltd-A(GRAN) - 2025 Q4 - Annual Report