| Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of presentation and principle of consolidation The accompanying consolidated financial statements
have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and pursuant
to the rules and regulations of the Securities Exchange Commission (“SEC”). The consolidated financial statements include
the financial statements of the Company and its subsidiaries. All intercompany transactions and balances among the Company and its subsidiaries
have been eliminated upon consolidation. Use of estimates and assumptions The preparation of consolidated financial statements
in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses
during the reporting period. These estimates and judgments are based on historical information, information that is currently available
to the Company and on various other assumptions that the Company believes to be reasonable under the circumstances. Significant estimates
required to be made by management include, but not limited to, allowance for expected credit losses, determination of the useful lives
of long-lived assets, impairment of long-lived assets, allowance for deferred tax assets, operating lease right-of-use assets, operating
lease liabilities, fair value and estimation of forfeiture of share based payment. Actual results could differ from the estimates, and
as such, differences could be material to the consolidated financial statements. Cash Cash include balances maintained with banks in
Hong Kong that can be added or withdrawn without limitation. Restricted cash Restricted cash represents bank balances the Group
holds on behalf of its customers. The Group maintains segregated accounts with banks in Hong Kong to hold customers’ monies arising
from its normal course of business. These segregated customers’ monies are strictly restricted for customers’ transactions
and governed by the Securities and Futures (Client Money) Rules under the HKSFO. Such regulations are promulgated to protect customers’
assets. The Group has classified such segregated customers’ monies as restricted cash. Corresponding payables to customers are recorded
upon receipt of cash from or for the customers. Receivables from broker-dealers and clearing organizations Receivables from broker-dealers and clearing organizations
represent balances due from broker-dealers and clearing organizations, including cash deposits placed, net commission receivables, receivables
arising from unsettled trades on trade-date basis. The Group adopted ASU No.2016-13 “Financial
Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASC Topic 326”)
on its receivables from broker-dealers and clearing organizations, starting from April 1, 2023, and records the allowance for expected
credit losses as an offset to receivables from broker-dealers and clearing organizations, and the estimated credit losses charged to the
allowance is classified as “other administrative expenses” in these consolidated statements of operations and comprehensive
loss. The Group assesses collectability by reviewing receivables from broker-dealers and clearing organizations on a collective basis
where similar characteristics exist or on an individual basis when the Group identifies specific broker-dealers and clearing organizations
with known disputes or collectability issues. In determining the amount of the allowance for expected credit losses, the Group considers
historical collectability based on past due status, the age of the balances of receivables from broker-dealers and clearing organizations,
credit quality of the Group’s customers based on ongoing credit evaluations, current economic conditions, reasonable and supportable
forecasts of future economic conditions, and other factors that may affect the Group’s ability to collect from counterparties. Under
this accounting guidance, the Group measures credit losses on its receivables from broker-dealers and clearing organizations using the
current expected credit loss model under ASC 326. The Group concludes that there is no impact over the initial adoption of current expected
credit loss model, which should be treated as cumulative-effect adjustment on accumulated deficits as of April 1, 2023. As of March 31,
2024 and 2023, no allowance for expected credit losses were recorded, respectively. Receivables from customers Receivables from customers include (i) amounts
due on brokerage transactions on trade-date basis, those not yet settled by customers on settlement dates and other brokerage commission
receivables related to primary market; (ii) fee receivables related to underwriting and placement activities, introducing and referral
services and investment management services provided. The Group adopted ASU No.2016-13 “Financial
Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASC Topic 326”)
on its receivables from customers, starting from April 1, 2023, and records the allowance for credit losses as an offset to receivables
from customers, and the estimated credit losses charged to the allowance is classified as “other administrative expenses”
in these consolidated statements of operations and comprehensive loss. The Group assesses collectability by reviewing receivables from
customers on a collective basis where similar characteristics exist, primarily based on similar business line, service or product offerings
and on an individual basis when the Group identifies specific customers with known disputes or collectability issues. In determining the
amount of the allowance for expected credit losses, the Group considers historical collectability based on past due status, the age of
the balances of receivables from customers, credit quality of the Group’s customers based on ongoing credit evaluations, current
economic conditions, reasonable and supportable forecasts of future economic conditions, and other factors that may affect the Group’s
ability to collect from counterparties. Under this accounting guidance, the Group measures credit losses on its receivables from customers
using the current expected credit loss model under ASC 326. The Group concludes that there is no impact over the initial adoption of current
expected credit loss model, which should be treated as cumulative-effect adjustment on accumulated deficits as of April 1, 2023. As of
March 31, 2024 and 2023, the Group provided allowance for expected credit losses of $6,641 and nil Leases The Group is a lessee of non-cancellable operating
leases for corporate office premises. The Group determines if an arrangement is a lease at inception. A lease for which substantially
all the benefits and risks incidental to ownership remain with the lessor is classified by the lessee as an operating lease. All leases
of the Group are currently classified as operating leases. Operating leases are included in operating lease right-of-use (“ROU”)
assets and operating lease liabilities on the Group’s consolidated balance sheets. ROU assets represent the Group’s right to
use an underlying asset for the lease term and operating lease liabilities represent its obligation to make lease payments arising from
the lease. ROU assets and operating lease liabilities are recognized at lease commencement date based on the present value of lease payments
over the lease term. When determining the lease term, at lease commencement
date, the Group considers options to extend or terminate the lease when it is reasonably certain that it will exercise or not exercise
that option. The interest rate used to determine the present value of future lease payments is the Group’s incremental borrowing
rate based on the information available at the lease commencement date. The lease standard (ACS 842) provides practical
expedients for an entity’s ongoing accounting. The Group elects to apply short-term lease exception for leases with a lease term
of 12 months or less at commencement. Accordingly, ROU assets and operating lease liabilities do not include leases with a lease term
of 12 months or less. The Group also elects to adopt the practical expedient
that allows lessee to treat the lease and non-lease components of a lease as a single lease component. Non-lease components include building
management fees, utility expenses and property taxes included and payable in the lease contract. These non-lease components are not separated
from the lease components to which they relate and are collectively reflected as occupancy costs in the statement of operations and comprehensive
loss. The Group evaluates the impairment of its ROU
assets consistently with the approach applied for its other long-lived assets. The Group reviews the recoverability of its long-lived
assets when events or changes in circumstances indicate that the carrying value of the assets may not be recoverable. The assessment of
possible impairment is based on its ability to recover the carrying value of the assets from the expected undiscounted future pre-tax
cash flows of the related operations. For the years ended March 31, 2024 and 2023, the Group did not recognize any impairment loss against
its ROU assets. Property and equipment, net Property and equipment are stated at cost less
accumulated depreciation and impairment losses. Depreciation is provided using the straight-line method based on the estimated useful
life. The estimated useful lives of property and equipment are as follows: Computer equipment 3 years Furniture and office equipment 5 years Leasehold improvements Shorter of lease term or 5 years Expenditures for repairs and maintenance, which
do not materially extend the useful lives of the assets, are expensed as incurred. Expenditures for major renewals and betterments which
substantially extend the useful life of assets are capitalized. The cost and related accumulated depreciation of assets disposed of or
retired are removed from the accounts, and any resulting gain or loss is reflected in the consolidated statements of operations and comprehensive
loss under other income or expenses. Intangible assets Intangible assets are originally recognized at
cost. The useful lives of intangible assets are assessed to either be finite or indefinite based on the nature of the intangible assets.
The Group’s intangible assets represent eligibility rights to trade on or through SEHK. Management has determined that such assets
have indefinite useful lives. These intangible assets are not amortized and are tested for impairment annually either individually or
at the cash-generating unit level. These intangible assets are also evaluated annually to determine whether indefinite life assessment
continues to be supportable. If not, the change in the useful life assessment from indefinite to finite is accounted for on a prospective
basis. Impairment of long-lived assets The Group reviews long-lived assets, including
property and equipment, ROU assets and intangible assets, for impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying
amount of an asset to the undiscounted future pre-tax cash flows expected to be generated by the asset. If such assets are considered
to be impaired, the impairment recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value
of the assets. Fair value is generally determined by discounting the cash flows expected to be generated by the asset (asset group), when
the market prices are not readily available. The adjusted carrying amount of the asset is the new cost basis and is depreciated over the
asset’s remaining useful life. Long-lived assets are grouped with other assets and liabilities at the lowest level for which identifiable
cash flows are largely independent of the cash flows of other assets and liabilities. For the years ended March 31, 2024, 2023 and 2022,
no impairment of long-lived assets were recognized. Deferred IPO costs Deferred IPO costs consist of costs incurred in
connection with the Group’s planned initial public offering in the United States. These costs, together with the underwriting discounts
and commissions, will be charged to additional paid-in capital upon completion of the planned initial public offering. As of March 31,
2024 and 2023, the Group had deferred IPO costs of nil Payables to customers Payables to customers arise from the Group’s
brokerage business and include cash deposits received by the Group from the customers and payables arising from unsettled trades on trade-date
basis. Payables broker-dealers and clearing organizations Payables broker-dealers and clearing organizations
represent balances due to broker-dealers and clearing organizations, including net commission payables and payables arising from unsettled
trades on trade-date basis. Revenue recognition
a) Revenue
from contracts with customers The Group follows the rules and guidance set out
under ASC 606, Revenue from Contracts with Customers (“ASC 606”), when recognizing revenue from contracts with customers.
The core principle of ASC 606 requires an entity to recognize revenues to depict the transfer of goods or services to customers in an
amount that reflects the consideration that it expects to be entitled to receive in exchange for those goods or services recognized as
performance obligations are satisfied. In according with ASC 606, revenues are recognized when the Group satisfies the performance obligations
by delivering the promised services to the customers, in an amount that reflects the consideration the Group expects to be entitled to
in exchange for those services. The following five steps are applied to achieve that core principle: Step 1: Identify the contract with the customer Step 2: Identify the performance obligations in
the contract Step 3: Determine the transaction price Step 4: Allocate the transaction price to the
performance obligations in the contract Step 5: Recognize revenue when the company satisfies
a performance obligation. The Group identifies each distinct service as
a performance obligation. The recognition and measurement of revenues is based on the assessment of individual contract terms. The Group
applies a practical expedient to expense costs as incurred for those suffered in order to obtain a contract with a customer when the amortization
period would have been one year or less. The Group has no material incremental costs of obtaining contracts with customers that the Group
expects the benefit of those costs to be longer than one year, which need to be recognized as assets. The Group’s principal revenue streams include: Advisory fees The Group provides investment advisory services
by acting as advisor for its customers in return for advisory fees. The Group enters into distinct agreements with its customers for the
provision of financial advisory services. The financial advisory service is distinct and is identified as one performance obligation.
Revenue from advisory fees is recognized over time when the performance is satisfied throughout the contract terms and when it is probable
that a significant reversal of revenue recognized will not occur in future reporting periods. Brokerage commissions The Group earns fees and commissions from securities
brokerage services based on a fixed rate for each transaction. When a customer executes a securities trading transaction with the Group,
brokerage commission is recognized upon the completion of the transaction. Only a single performance obligation is identified for each
securities trading transaction, and the performance obligation is satisfied on the trade date because this is when the underlying financial
instrument is identified, the pricing of brokerage service is agreed upon and the promised services are delivered to customers. Brokerage
commissions are recognized at a point in time on the trade date. The securities trading transaction could not be cancelled once it is
executed and is not refundable, so returns and allowances are not applicable. Underwriting and placement income The Group provides underwriting and placement
services by acting as an underwriter, global coordinator, book runner or lead manager for securities issuances and bonds placements, in
return for underwriting and placement income. The Group enters into a distinct underwriting
or placement agreement with its customers, i.e. corporate issuers, for the provision of underwriting and placement services. The underwriting
and placement service is distinct and is identified as one performance obligation. As stipulated in the underwriting and placement agreement,
the Group will charge an underwriting and placement income based on certain percentage of the funds raised in the transaction, either
initial public offerings or other fundraising or placement activities. Revenue from providing underwriting and placement
services to customers is recognized at a point in time when the transaction and the performance is completed, which is generally at the
completion of the public offering, i.e., listing of the securities on relevant exchanges, or the completion of a placement. For certain underwriting and placement projects,
the Group will reduce its commitments and exposures by having sub-underwriting and sub-placement arrangements with other broker-dealers.
Generally, the terms of these sub-underwriting and sub-placement arrangements would mirror the master underwriting and placement agreements
the Group has in place with its customers but give a concession fee to these broker-dealers for services rendered under the sub-underwriting
and sub-placement arrangements. The Group follows the rules and guidance set out
under ASC 606 when determining whether it is acting as a principal or an agent in the contract with its customers. The core principle
of ASC 606 requires an entity to determine whether the nature of its promise is a performance obligation to provide the services itself
(that is, the entity is a principal) or to arrange for those services to be provided by the other party (that is, the entity is an agent).
The following steps are applied to achieve that core principle: Step 1: Identify the specified services to be
provided to the customer Step 2: Assess whether it controls each specified
service before that service is transferred to the customer Under the underwriting and placement agreements
the Group has in place with its customers, the Group has a primary responsibility in rendering the underwriting and placement services
and meeting the specific requirements set out in these agreements. The whole process is primarily controlled by the Group who decides
to whom the offering shares it may sell and, if it thinks fit, has the full discretionary authority in engaging any broker-dealer for
such sub-underwriting and sub-placement arrangements without the consent from its customers. The Group has the primary responsibility
in the function. The Group also has full authority in negotiating and setting the fees with its customers and broker-dealers and deciding
the margin on each project without the consent from other parties. Accordingly, the Group has full control on the underwriting and placement
services it offers to the customers and is a principal in the contracts. The Group recognizes revenue at the gross amount it is entitled
to from its customers. Introducing and referral income The Group derives introducing and referral income
from the introduction of customers to other financial service providers or other interested parties. The Group enters into distinct referral
agreements with these parties in relation to the introducing and referral services rendered and the fee is crystalized at the point when
the referees executed a transaction with these parties. Under the distinct referral agreements the Group has in place, the Group is not
subject to any minimum referral numbers, any committed targets nor any other obligations once the referral is made. No claw back or adjustments
to the income are allowed under these agreements. Revenue from providing introducing and referral services is recognized at a point in
time when the transaction and the performance is completed. Handling income The Group provides other financial services including
dividend collection and custodian services and earns handling income in return for these services provided. Custodian services – The Group enters into
distinct custodian agreements with its customers for the provision of custodian and administration services. Among all other services
provided, the Group earns a fee by assisting its customers in transferring the physical shares certificates they hold into Central Clearing
and Settlement System (CCASS), a centralized electronic book-entry clearing and settlement system for transactions of securities listed
in SEHK, for custodian purposes. The Group earns a fee based on a fixed rate of the value of shares in concern. The custodian agreement
is distinct and is identified as one performance obligation. Revenue is recognized at a point in time upon the completion of the transaction. Dividend collection – When the securities
held by its customers have any corporate action, the Group may act as the agent of its customers in processing and collecting the related
dividends. The Group earns a fee based on a fixed rate of the amount of dividend in concern. Only a single performance obligation is identified
in the contract and income from dividend collection services is recognized at a point in time upon the completion of the transaction. Investment management fee income The Group provides investment management services
by acting as investment manager for its customers in return for investment management fee income. The Group enters into distinct investment
management agreements with its customers for the provision of investment management services. The investment management service is distinct
and is identified as one performance obligation. Revenue from investment management services is recognized over time when the performance
is satisfied throughout the contract terms and when it is probable that a significant reversal of revenue recognized will not occur in
future reporting periods. Sources of revenue Disaggregated information of revenue by major
sources are as follows:
For the Years Ended March 31, 2024
Third parties Related Total
Revenue from contracts with customers recognized at a point in time
Brokerage commissions related to
exchange in Hong Kong $ 371,930 $ 3,998 $ 375,928
exchanges in United States 19,130 3,121 22,251
Underwriting and placement income related to
equity securities 109,316 - 109,316
bonds and others 43,322 - 43,322
Introducing and referral income 264,941 - 264,941
Handling income on
custodian services 108,218 2,078 110,296
dividend collection 17,518 52 17,570
Revenue from contracts with customers recognized over time
Advisory fees 420,918 - 420,918
Interest income and others 42,489 1,438 43,927
$ 1,397,782 $ 10,687 $ 1,408,469
For the Years Ended March 31, 2023
Third parties Related Total
Revenue from contracts with customers recognized at a point in time
Brokerage commissions related to
exchange in Hong Kong $ 445,057 $ 10,854 $ 455,911
exchanges in United States 365,281 78,525 443,806
other exchanges 831 364 1,195
Underwriting and placement income related to
equity securities 914,234 - 914,234
bonds and others 660,379 - 660,379
Introducing and referral income 278,688 - 278,688
Handling income on
custodian services 350,706 2,262 352,968
dividend collection 17,167 13 17,180
Revenue from contracts with customers recognized over time
Investment management fee income 30,622 2,840 33,462
Interest income and others 91,311 10,162 101,473
$ 3,154,276 $ 105,020 $ 3,259,296
For the Years Ended March 31, 2022
Third parties Related parties Total
Revenue from contracts with customers recognized at a point in time
Brokerage commissions related to
exchange in Hong Kong $ 548,300 $ 40,637 $ 588,937
exchanges in United States 183,226 693,681 876,907
other exchanges 9,810 1,083 10,893
Underwriting and placement income related to
equity securities 293,709 - 293,709
bonds and others 61,662 - 61,662
Introducing and referral income 210,009 - 210,009
Handling income on
custodian services 69,774 - 69,774
dividend collection 106,706 498 107,204
Revenue from contracts with customers recognized over time
Investment management fee income 21,368 1,793 23,161
Interest income and others 58,587 5,593 64,180
$ 1,563,151 $ 743,285 $ 2,306,436
b) Interest income and others Interest income and others primarily consist of
interests earned on bank deposits and a customers’ overdue, and government subsidies, which are not within the scope of ASC 606. Interest income is recognized as it accrues using
the effective interest method. Interests on customers’ overdue represent interests charged on overdue receivables from customers
arising from brokerage transactions. According to the contracts entered into between the Group and
its customers, the Group shall charge its customers on amounts overdue, i.e. amounts due on brokerage transactions which are not yet settled
on settlement dates, at an interest at Hong Kong Prime Lending Rate plus 8% per annum accrued on daily basis. Government subsidies primarily relate to one-off
entitlement granted by the Hong Kong Government under the Employment Support Scheme of the Anti-epidemic Fund. The Group recognizes government
subsidies as other income when the conditions are met. Interest income and others recognized for the
years ended March 31, 2024, 2023 and 2022 is broken down as below.
For the Years Ended March 31,
2024 2023 2022
Interests on bank deposits $ 1,830 $ 314 $ 10
Interests on customers’ overdue 36,838 47,001 60,828
Government subsidies - 50,822 -
Sundry income 5,259 3,336 3,342
$ 43,927 $ 101,473 $ 64,180 Brokerage, clearing and exchange fees Brokerage, clearing and exchange fees primary
relate to transaction costs paid to broker-dealers and clearing organizations on securities brokerage services which are expensed as incurred. Sub-underwriting and sub-placement fees Sub-underwriting and sub-placement fees relate
to fees and expenses paid to broker-dealers in relation to the sub-underwriting and sub-placement arrangements which are expensed at the
completion of the public offering, i.e., listing of the securities on relevant exchanges, or the completion of a placement. Employee benefit plan Employees of the Group located in Hong Kong participate
in a compulsory retirement benefit scheme as required by the local laws in Hong Kong. Contributions are required by both the Group and
its employees at a rate of 5% on the employees’ relevant salary income, subject to a cap of monthly relevant income of HK$30,000
(equivalent to $3,834). During the years ended March 31, 2024, 2023 and 2022, the total amount charged to the consolidated statements
of operations and comprehensive loss in respect of the Group’s costs incurred in the scheme were $26,951, $31,548 and $33,111, respectively. Share based compensation expenses The Group uses the fair value method of accounting
for the share options granted to directors and employees to measure the cost services received in exchange for share based awards. The
Group has selected the binominal option-pricing model as the most appropriate fair value method for its option awards. The Binomial model
takes into account variables such as volatility, dividend yield rate, and risk-free interest rate and also allows for the use of dynamic
assumptions and considers the contractual term of the option, and the probability that the option will be exercised prior to the end of
its contractual life. The Group estimates the forfeitures at the time of grant and revised, if necessary, in subsequent periods if actual
forfeitures differ from those estimates. These inputs are subjective and generally require significant judgment. The resulting cost is
recognized over the period during which directors and employees are required to provide service in exchange for the awards. Share-based
compensation expense is recognized on a graded vesting basis, net of estimated forfeitures. During the years ended March 31, 2024, 2023
and 2022, the total amount charged to the consolidated statements of operations and comprehensive loss in respect of the Group’s
share based compensation expenses were $1,871,499, nil nil In accordance with ASC 718, modifications to stock-based
awards are accounted for as exchanges of the original awards for new awards. The incremental fair value, which is the difference between
the fair value of the modified award and the original award immediately before modification, is measured at the modification date. This
incremental fair value is recognized immediately as compensation cost for vested awards. For unvested awards, the incremental compensation
cost, along with any remaining unrecognized compensation cost of the original award, is recognized over the remaining requisite vesting
period. Income taxes The Group accounts for income taxes under ASC
740, Income Taxes. Provision for income taxes consists of current taxes and deferred taxes. Current tax is recognized based on the results
for the year as adjusted for items which are non-assessable or disallowed. It is calculated using tax rates that have been enacted or
substantively enacted by the balance sheet date. Deferred tax is recognized in respect of temporary
differences arising from differences between the carrying amount of assets and liabilities in the financial statements and the corresponding
tax basis. Deferred tax is calculated using tax rates that are expected to apply to the period when the asset is realized, or the liability
is settled. Deferred tax is charged or credited in the income statement, except when it is related to items credited or charged directly
to equity. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that
some portion or all of the deferred tax assets will not be realized. An uncertain tax position is recognized as a benefit
only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination
being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized
on examination. Penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the period
incurred. The Group does not consider that there was any uncertain tax position as of March 31, 2024 and 2023. Segment reporting ASC 280, “Segment Reporting”, establishes
standards for reporting information about operating segments on a basis consistent with the Group’s internal organizational structure
as well as information about geographical areas, business segments and major customers in financial statements for details on the Group’s
business segments. The Group uses the management approach to determine
reportable operating segments. The management approach considers the internal organization and reporting used by the Company’s chief
operating decision maker (“CODM”) for making decisions, allocating resources and assessing performance. The Group does not
distinguish revenues, costs and expenses between segments in its internal reporting, but instead reports costs and expenses by nature
as a whole. Loss per share Loss per share (“EPS”) is calculated
in accordance with ASC 260, Earnings Per Share. Basic EPS is computed by dividing net loss attributable to ordinary shareholders by the
weighted average number of shares outstanding during the year. Diluted EPS is calculated by dividing net loss
attributable to ordinary shareholders, as adjusted for the effect of dilutive ordinary equivalent shares, if any, by the weighted average
number of ordinary and dilutive ordinary equivalent shares outstanding during the year. Ordinary equivalent shares consist of the number
of additional common shares that would have been outstanding if the dilutive potential common shares had been issued. Ordinary share equivalents
are excluded from the computation of diluted loss per share if their effect would be antidilutive. With a net loss attributable to ordinary
shareholders, the inclusion of dilutive |
