Prestige Wealth (US:PWM)2026-01-06 02:17Financial Reporting and Internal Controls - As of September 30, 2025, the company has engaged a qualified financial and accounting advisory team to strengthen its financial reporting function and internal controls [123]. - The company has material weaknesses in its internal controls over financial reporting, which could adversely affect its business and the trading price of its Ordinary Shares [124]. - The company expects to incur significant legal, accounting, and compliance costs as a public company, particularly after it no longer qualifies as an "emerging growth company" [139]. - The company’s auditor is based in Manhattan, New York, but faces challenges in fully cooperating with PCAOB due to Chinese regulations [146]. - The SEC has implemented rules requiring increased disclosures for issuers unable to be inspected by PCAOB, which could impact investor confidence [148]. Securities and Market Risks - The company has a substantial number of convertible securities outstanding, including Series A-1, Series A-2, Series B-1, and Series B-1 warrants, issued in a $100 million private placement on October 10, 2025 [127]. - The company is subject to Nasdaq Listing Rules, which require compliance with minimum stockholders' equity and other criteria to maintain its listing [129]. - The company received a notice from Nasdaq regarding non-compliance with the Minimum Bid Price Rule, with a compliance period until September 29, 2025 [158]. - If the company fails to regain compliance by March 30, 2026, it may face delisting from Nasdaq [159]. - The company may face delisting or trading restrictions under the Holding Foreign Companies Accountable Act (HFCAA) if the PCAOB cannot inspect its audit documentation located in mainland China [145]. - The market price of the company’s Class A Ordinary Shares may be volatile, influenced by various external factors [163]. - The market for Class A Ordinary Shares is expected to remain more volatile than that of seasoned issuers for the indefinite future, potentially leading to securities litigation [164]. - The company may lose visibility in financial markets if analysts cease coverage or publish negative reports, affecting share price and trading volume [161]. Shareholder Rights and Corporate Governance - Anti-takeover provisions in the company's memorandum and articles of association may discourage or delay changes in control that shareholders may favor [141]. - Class A Ordinary Shares have one vote per share, while Class B Ordinary Shares have 50 votes per share, significantly limiting the influence of Class A shareholders on corporate matters [165]. Financial Management and Risks - The Group limits credit risk by transacting with broker-dealers, banks, and regulated exchanges that have high credit ratings [464]. - Liquidity risk is managed by monitoring liquid capital and maintaining adequate cash and bank balances to finance operations [465]. - Interest rate risk is considered minimal as cash held with banks is short-term, with terms less than one month [466]. - Inflation has not had a material impact on the Group's results of operations in recent years [467]. - As of September 30, 2023, the Group has no significant foreign currency risk as most transactions are denominated in Hong Kong dollar or U.S. dollar, with minimal exposure due to the peg between the two currencies [462]. Dividend Policy - The company does not intend to pay dividends for the foreseeable future, opting to retain earnings for business operations and expansion [160].