| RELATED PARTY TRANSACTIONS |
| 8. |
RELATED PARTY TRANSACTIONS
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The table below sets forth major related parties of the Group and their relationships with the Group.
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Names of related parties
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Relationship
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Zhou Kai
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Principal shareholder, chief technology officer, chairman of the board
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Shenzhen Jinhui Technology Co., Ltd. (“Shenzhen Jinhui”)
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A company controlled by Zhou Kai
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Wealth Guardian Investment Limited (“WGI”)
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The Group is able to exercise significant influence over WGI because two
individuals, who are the senior management of WGI, are the shareholders of the Company holding more than or approximately 10%
aggregate equity interests
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Waton Trust Limited
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An entity Zhou Kai acted as a director
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ST MA Ltd
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The Company’s shareholder, ST MA Ltd, ceased to be a shareholder in June 2023
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WIG SPC
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A wholly-owned subsidiary of the Company incorporated in Cayman Islands, holding investment segregated portfolios (each of which is
referred to as “SP”, collectively “SPs”). The SPs are each formed for the purpose of investing in securities and are owned by different investors. Effective December 2024, WSI serves as the investment manager of the WIG SPC
series SPs. During the year ended March 31, 2025, there was no management income incurred.
|
Transactions with WGI
The Group conducts material transactions with WGI through WSI and/or WTI, which entities are services providers
for WGI. These transactions are as follows:
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As of March 31, |
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2025
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|
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2024
|
|
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Receivables – clients – unsettled trade
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$
|
1,549,709
|
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|
$
|
11,043,210
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|
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Receivables – clients – margin loan (net)(i)(ii)
|
|
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3,276,678
|
|
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|
1,873,556
|
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Receivables – software licensing (including subscription based) and related support services
|
|
|
600,000
|
|
|
|
1,197,352
|
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Receivables – Total(iii)
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$
|
5,426,387
|
|
|
$ |
14,114,118 |
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Contract assets - related party
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1,200,000 |
|
|
|
— |
|
| |
|
|
|
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|
|
|
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Payables – brokerage services
|
|
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1,417,153
|
|
|
|
13,867,823
|
|
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Payables – Broker-dealer
|
|
|
75,136
|
|
|
|
163,635
|
|
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Payables – Total
|
|
$
|
1,492,289
|
|
|
$
|
14,031,458
|
|
| |
(i) |
WSI extended a credit line of $6.2 million and $4.3 million to WGI for margin
transactions during the years ended March 31, 2025 and 2024.
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| |
(ii) |
As of March 31, 2025 and 2024, the amounts consisted of margin loan receivables of $3.5 million and $3.6
million, net of client payables of $0.2 and $1.7 million, respectively.
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| |
(iii) |
As of March 31, 2025 and 2024, receivables from this customer, including margin loan receivables,
have been either fully collateralized by the client-owned securities held in the customer’s account or fully collected.
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| |
|
For the years ended March 31,
|
|
| |
|
2025 |
|
|
2024
|
|
|
2023 |
|
|
Revenues – brokerage commission and handling charge income
|
|
$
|
2,539,260
|
|
|
$
|
1,757,731
|
|
|
$
|
1,707,334
|
|
|
Revenues – interest income
|
|
|
1,040,634
|
|
|
|
1,016,179
|
|
|
|
181,550
|
|
|
Revenues – software licensing (including subscription based) and related support services
|
|
|
1,200,000
|
|
|
|
1,197,551
|
|
|
|
2,786,105
|
|
|
Total
|
|
$
|
4,779,894
|
|
|
$
|
3,971,461
|
|
|
$
|
4,674,989
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|
For the years ended March 31, 2025, 2024 and 2023, the Group recognized a software licensing and related
support services revenue of $1,200,000, nil and nil, respectively before invoicing to WGI. The
amount was recorded under contract assets – related party in the consolidated balance sheets.
Due from ST MA Ltd
In April 2023, the Company made a loan in the amount of US$450,000 (approximately HK$3.5 million) to
ST MA LTD, a related party as of that time. The loan is unsecured during the period from April 2023 to October 2024, and subsequently is collateralized by securities held in the account of ST MA LTD, bears no interest and is
due on demand. ST MA LTD ceased to be a related party in June 2023, because ST MA LTD ceased to be a shareholder of the Company. The amount due from ST MA Ltd was recorded in prepaid expenses and other current assets as of
March 31, 2024 and 2025, respectively.
Due to related parties
| |
|
As of March 31,
|
|
|
|
|
2025
|
|
|
2024
|
|
|
Zhou Kai(i)
|
|
$
|
31,682
|
|
|
$
|
1,830,092
|
|
|
Shenzhen Jinhui(ii)
|
|
|
1,766,092
|
|
|
|
772,040
|
|
|
Due to related parties
|
|
$
|
1,797,774
|
|
|
$
|
2,602,132
|
|
| |
(i) |
The balance represents borrowings from Zhou Kai for the Group’s daily
operational purposes. The borrowings are interest-free, unsecured and due on demand. During the years ended March 31, 2025, 2024 and 2023, the Group borrowed from Zhou Kai of $0.03 million, $1.8 million and $5.3 million, respectively. During the years ended March 31, 2025, 2024, and 2023, the Group repaid borrowings from Zhou Kai of $1.8 million, nil
and nil, respectively. During the year ended March 31, 2024, the Group disposed certain portion of its other
investment to Zhou Kai at a consideration of approximately $2.0 million and the amount was settled with payable
with Zhou Kai.
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| |
(ii) |
The balance represents unpaid service fees to Shenzhen Jinhui, a service
provider and sub-contractor of the Group’s project management services. Based on the services agreement, Shenzhen Jinhui charges the Group certain percents of markup above its costs relating to service provided to the Group.
During the years ended March 31, 2025, 2024 and 2023, the Group purchased outsourcing and related support services of approximately $1.0
million, $0.7 million and $0.6 million, respectively, from Shenzhen Jinhui which were recorded as software licensing (including subscription based) and related support outsourcing costs, and
expects to settle the balance as of March 31, 2025 within 12 months.
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