UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM
For the quarterly period ended
OR
For the transition period from ___________ to __________
Commission File Number:
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of | (IRS Employer | |
| incorporation or organization) | Identification Number) |
| (Address of principal executive offices) | (Zip code) |
(Registrant’s telephone number including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading symbol(s) | Name of each exchange on which registered | ||
| The |
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:
| Large accelerated filer ☐ | Accelerated filer ☐ |
| Smaller reporting company | |
| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
As of October 28, 2026, the registrant had
EXPLANATORY NOTE
TOP Financial Group Limited (the “Company”) is a “foreign private issuer” as defined in Rule 3b-4 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Although the Company qualifies as a foreign private issuer and is therefore eligible to report on the forms and under the rules available to foreign private issuers (including Forms 20-F and 6-K), the Company has elected to file this Quarterly Report on Form 10-Q, and otherwise to report, under the forms and rules applicable to domestic U.S. registrants. The Company is making this filing voluntarily; nothing in this Quarterly Report on Form 10-Q is intended to, or shall be deemed to, constitute a determination that the Company has ceased to qualify as a foreign private issuer. The condensed consolidated financial statements included in this Quarterly Report on Form 10-Q are prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”).
Except as otherwise indicated, share and per share amounts in this Quarterly Report on Form 10-Q give retroactive effect to the 1-for-5 share consolidation of the Company’s Class A ordinary shares and Class B ordinary shares that became effective on August 3, 2026 (the “Share Consolidation”).
i
Part I - Financial Information
Item 1 - Consolidated Financial Statements
TOP Financial Group Limited
Condensed Consolidated Balance Sheets
(Expressed in U.S. Dollars, except for the number of shares)
| As of | ||||||||
| September 30, 2026 |
March 31, 2026 |
|||||||
| (unaudited) | ||||||||
| Assets | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Restricted cash | ||||||||
| Digital assets | ||||||||
| Receivables from broker-dealers and clearing organizations | ||||||||
| Receivables from customers | ||||||||
| Prepayment | ||||||||
| Loans receivable, net | ||||||||
| Due from a related party | ||||||||
| Securities owned, at fair value | ||||||||
| Fixed assets, net | ||||||||
| Intangible assets, net | ||||||||
| Goodwill | ||||||||
| Right-of-use assets | ||||||||
| Long-term investments | ||||||||
| Deposit for long-term investment | ||||||||
| Other assets | ||||||||
| Deferred tax assets | ||||||||
| Total assets | $ | $ | ||||||
| Liabilities and shareholders’ equity | ||||||||
| Payable to customers | $ | $ | ||||||
| Payable to customers – a related party | ||||||||
| Contract liabilities | ||||||||
| Income tax payable | ||||||||
| Promissory notes payable | ||||||||
| Accrued expenses and other liabilities | ||||||||
| Lease liabilities | ||||||||
| Total liabilities | ||||||||
| Commitments and contingencies | ||||||||
| Shareholders’ Equity | ||||||||
| Class A Ordinary shares (par value $ | ||||||||
| Class B Ordinary shares (par value $ | ||||||||
| Additional paid-in capital | ||||||||
| Retained earnings | ||||||||
| Accumulated other comprehensive income | ||||||||
| Total shareholders’ equity attributable to TOP Financial Group’s Shareholders | ||||||||
| Non-controlling interest | ||||||||
| Total shareholders’ equity | ||||||||
| Total liabilities and shareholders’ equity | $ | $ | ||||||
| * |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 1 |
TOP Financial Group Limited
Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income
(Expressed in U.S. dollar, except for the number of shares)
| For the Three Months Ended September 30, |
For the Six Months Ended September 30, |
|||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Revenues | ||||||||||||||||
| AI services | $ | $ | $ | $ | ||||||||||||
| Futures brokerage commissions | ||||||||||||||||
| Virtual asset commissions | ||||||||||||||||
| Trading solution service revenues | ||||||||||||||||
| Interest income from loan business | ||||||||||||||||
| Other service revenues | ||||||||||||||||
| Trading gains (losses) | ( | ) | ||||||||||||||
| Interest income and other | ||||||||||||||||
| Total revenues | ||||||||||||||||
| Expenses | ||||||||||||||||
| Cost of AI services | ||||||||||||||||
| Commission expenses | ||||||||||||||||
| Compensation and benefits | ||||||||||||||||
| Communications and technology | ||||||||||||||||
| Occupancy | ||||||||||||||||
| Travel and business development | ||||||||||||||||
| Professional fees | ||||||||||||||||
| Other administrative expenses | ||||||||||||||||
| Total expenses | ||||||||||||||||
| Income (loss) before income taxes | ( | ) | ||||||||||||||
| Income tax (expenses) benefits | ( | ) | ||||||||||||||
| Net income | ||||||||||||||||
| Less: Net loss attributable to non-controlling shareholders | ( | ) | ||||||||||||||
| Net income attributable to TOP Financial Group Limited’s shareholders | $ | $ | $ | $ | ||||||||||||
| Net income | $ | $ | $ | $ | ||||||||||||
| Other comprehensive income (loss) | ||||||||||||||||
| Foreign currency translation adjustment | ( | ) | ||||||||||||||
| Total comprehensive income | $ | $ | $ | $ | ||||||||||||
| Less: Total comprehensive loss attributable to non-controlling shareholders | ( | ) | ( | ) | ||||||||||||
| Total comprehensive income attributable to TOP Financial Group Limited’s shareholders | $ | $ | $ | $ | ||||||||||||
| Earnings per share: | ||||||||||||||||
| Basic and diluted* | $ | $ | $ | $ | ||||||||||||
| Weighted average number of ordinary shares outstanding: | ||||||||||||||||
| Basic and diluted* | ||||||||||||||||
| * |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 2 |
TOP Financial Group Limited
Unaudited Condensed Consolidated Statements of Changes in Shareholders’ Equity
(Expressed in U.S. dollar, except for the number of shares)
For the Three and Six Months Ended September 30, 2025
| Accumulated | ||||||||||||||||||||||||||||||||||||
| Other | ||||||||||||||||||||||||||||||||||||
| Class A | Class B | Additional | Comprehensive | Non- | ||||||||||||||||||||||||||||||||
| Ordinary Shares | Ordinary Shares | Paid-in | Retained | Income | controlling | |||||||||||||||||||||||||||||||
| Shares* | Amount | Shares* | Amount | Capital | Earnings | (Loss) | Interest | Total | ||||||||||||||||||||||||||||
| Balance as of March 31, 2025 | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Share-based compensation | ||||||||||||||||||||||||||||||||||||
| Net income | - | - | ||||||||||||||||||||||||||||||||||
| Foreign currency translation adjustment | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Balance as of June 30, 2025 | $ | $ | $ | $ | $ | ( | ) | $ | $ | |||||||||||||||||||||||||||
| Share-based compensation | ||||||||||||||||||||||||||||||||||||
| Net income | - | - | ||||||||||||||||||||||||||||||||||
| Foreign currency translation adjustment | - | - | ||||||||||||||||||||||||||||||||||
| Balance as of September 30, 2025 | $ | $ | $ | $ | $ | ( | ) | $ | $ | |||||||||||||||||||||||||||
| * | The share information is presented on a retroactive basis to reflect the share consolidation at a ratio of 1-for-5 effected on August 3, 2026 (Note 1). |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 3 |
TOP Financial Group Limited
Unaudited Condensed Consolidated Statements of Changes in Shareholders’ Equity
(Expressed in U.S. dollar, except for the number of shares)
For the Three and Six Months Ended September 30, 2026
| Accumulated | ||||||||||||||||||||||||||||||||||||
| Other | ||||||||||||||||||||||||||||||||||||
| Class A | Class B | Additional | Comprehensive | Non- | ||||||||||||||||||||||||||||||||
| Ordinary Shares | Ordinary Shares | Paid-in | Retained | Income | controlling | |||||||||||||||||||||||||||||||
| Shares* | Amount | Shares* | Amount | Capital | Earnings | (Loss) | Interest | Total | ||||||||||||||||||||||||||||
| Balance as of March 31, 2026 | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Share-based compensation | ||||||||||||||||||||||||||||||||||||
| Issuance of Class A ordinary shares pursuant to a private placement | ||||||||||||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Foreign currency translation adjustment | - | - | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Balance as of June 30, 2026 | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Share-based compensation | ||||||||||||||||||||||||||||||||||||
| Issuance of Class A ordinary shares pursuant to a private placement | ||||||||||||||||||||||||||||||||||||
| Issuance of ordinary shares to settle warrants | ( | ) | ||||||||||||||||||||||||||||||||||
| Issuance of ordinary shares due to roundup of fractional shares in share consolidation | ||||||||||||||||||||||||||||||||||||
| Net income | - | - | ||||||||||||||||||||||||||||||||||
| Foreign currency translation adjustment | - | - | ( | ) | ||||||||||||||||||||||||||||||||
| Balance as of September 30, 2026 | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| * |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 4 |
TOP Financial Group Limited
Unaudited Condensed Consolidated Statements of Cash Flows
(Expressed in U.S. dollar)
For the Six Months Ended September 30, |
||||||||
| 2026 | 2025 | |||||||
| Net income | $ | $ | ||||||
| Adjusted to reconcile net income to cash (used in) provided by operating activities: | ||||||||
| Depreciation | ||||||||
| Amortization of right-of-use assets | ||||||||
| Loss from disposal of property and equipment | ||||||||
| Share-based compensation | ||||||||
| Interest income from loan business | ( | ) | ( | ) | ||||
| Unrealized gain from available-for-sale investments | ( | ) | ||||||
| Share of equity loss | ||||||||
| Deferred tax benefits | ( | ) | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Receivables from broker-dealers and clearing organizations | ( | ) | ||||||
| Receivables from customers | ( | ) | ||||||
| Loans receivable, net | ( | ) | ||||||
| Securities owned, at fair value | ( | ) | ( | ) | ||||
| Prepayment | ( | ) | ||||||
| Due from a related party | ( | ) | ( | ) | ||||
| Other assets | ( | ) | ||||||
| Payable to customers | ||||||||
| Payable to customers – a related party | ||||||||
| Contract liabilities | ||||||||
| Income tax payable | ( | ) | ||||||
| Accrued expenses and other liabilities | ( | ) | ( | ) | ||||
| Lease liabilities | ( | ) | ( | ) | ||||
| Net cash (used in) provided by operating activities | $ | ( | ) | $ | ||||
| Cash flows from investing activities: | ||||||||
| Purchases of fixed assets | ( | ) | ( | ) | ||||
| Proceeds from sales of property | ||||||||
| Purchases of securities owned | ( | ) | ( | ) | ||||
| Deposits for long-term investment | ( | ) | ( | ) | ||||
| Acquisition of a subsidiary | ( | ) | ||||||
| Cash collected from acquisition of a subsidiary | ||||||||
| Proceeds from sales of digital assets | ||||||||
| Loans made to customers holding US or HK stocks | ( | ) | ( | ) | ||||
| Repayments received on loans to a third party | ||||||||
| Loans made to a related party | ( | ) | ||||||
| Net cash provided by (used in) investing activities | ( | ) | ||||||
| Effect of exchange rates on cash, cash equivalents and restricted cash | ( | ) | ( | ) | ||||
| Net increase in cash, cash equivalents and restricted cash | ||||||||
| Cash, cash equivalents and restricted cash, beginning of period | ||||||||
| Cash, cash equivalents and restricted cash, end of period | $ | | $ | | ||||
| Non-cash operating, investing and financing activities | ||||||||
| Right of use assets obtained in exchange for operating lease obligations | $ | $ | ||||||
| Net proceeds in the form of USDT from issuance of ordinary shares pursuant to a private placement | $ | $ | ||||||
| Loans advanced to customers in the form of USDT | $ | $ | ||||||
| Loans collected from customers in the form of USDT | $ | $ | ||||||
| Interest received from customers in the form of USDT | $ | $ | ||||||
| Supplemental disclosures of cash flow information: | ||||||||
| Cash paid for interest | $ | $ | ||||||
| Cash paid for taxes, net of refunds | $ | $ | ||||||
Reconciliation of cash, cash equivalents and restricted cash to the unaudited condensed consolidated balance sheets
| As of | ||||||||
| September 30, 2026 |
March 31, 2026 |
|||||||
| Cash and cash equivalents | $ | $ | ||||||
| Restricted cash | ||||||||
| Total cash, cash equivalents and restricted cash | $ | | $ | | ||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 5 |
TOP Financial Group Limited
Notes to Unaudited Condensed Consolidated Financial Statements
For the three and six months ended September 30, 2026 and 2025
1. Organization and Description of Business
TOP Financial Group Limited (formerly “Zhong Yang Financial Group Limited” and “ZYFGL”) (“TFGL”) is a company incorporated in Cayman Islands with limited liability on August 1, 2019. TFGL is a parent holding company with no operations. Effective on July 13, 2022, the Company changed its name from “Zhong Yang Financial Group Limited” to “TOP Financial Group Limited” (“Name Change”).
TFGL has two wholly-owned subsidiaries, ZYSL (BVI) Limited (“ZYSL (BVI)”) and ZYCL (BVI) Limited (“ZYCL (BVI)”), both which are investment holding entities formed under the laws and regulations of the British Virgin Islands on August 29, 2019.
Zhong Yang Securities Limited (“ZYSL”), a wholly-owned subsidiary of ZYSL (BVI), was established in accordance with laws and regulations of Hong Kong on April 22, 2015 with a registered capital of HKD
Zhong Yang Capital Limited (“ZYCL”), a wholly-owned subsidiary of ZYCL (BVI), was established in accordance with laws and regulations of Hong Kong on September 29, 2016 with a registered capital of HKD
Eight subsidiaries, ZYAL (BVI) Limited (“ZYAL (BVI)”), ZYTL (BVI) Limited (“ZYTL (BVI)”), ZYNL (BVI) Limited (“ZYNL (BVI)”), WIN100 Tech Limited (“WIN100 TECH”), ZYPL (BVI) Limited (“ZYPL (BVI)”), ZYXL (BVI) Limited (“ZYXL (BVI)”), ZYIL (BVI) Limited (“ZYIL (BVI)”) and ZYFL (BVI) Limited (“ZYFL (BVI)”) were incorporated under the laws of the British Virgin Islands on January 7, 2021, January 12, 2021, January 20, 2021, May 14, 2021, July 14, 2022, July 14, 2022, November 11, 2022, and November 11, 2022, respectively. These subsidiaries are dormant as of the date of this report, except for WIN100 TECH, which provides trading solutions for clients trading on the world’s major derivatives and stock exchanges.
On November 28, 2022, ZYPL (BVI) established Top Financial Pte. Ltd. (“Top Fin”) in accordance with laws and regulations of Republic of Singapore. On the same date, ZYXL (BVI) set up Top Asset Management Pte. Ltd. (“Top AM”) in accordance with laws and regulations of Republic of Singapore. On February 24, 2023, ZYFL established Winrich Finance Limited in accordance with laws and regulations of Hong Kong. On February 9, 2023, the Company, through ZYIL (BVI), purchased
| 6 |
TOP Financial Group Limited
Notes to Unaudited Condensed Consolidated Financial Statements
For the three and six months ended September 30, 2026 and 2025
1. Organization and Description of Business (Continued)
On April 12, 2023, the Company, through ZYAL, closed an acquisition of
TFGL together with its subsidiaries (collectively, the “Company”) are primarily engaged in providing futures brokerage and other financial services in Hong Kong through a trading platform to its customers. The Company generates brokerage commission income by enabling its customer to trade on multiple exchanges around the world.
On June 24, 2025, the Board of the Company approved the re-designation of
On July 3, 2025, the Company, through ZYNL (BVI) Limited (“ZYNL”), a subsidiary of the Company, established Winrich Trust Limited (“Winrich Trust”) with other four shareholders. The Company owns
On July 9, 2025, the Company and ZYNL (BVI) Limited (“ZYNL”), a subsidiary of the Company, entered into a Share Purchase Agreement (the “Agreement”) with Zhong Yang Financial Services Limited (the “Target”) and the sole shareholder of the Target (“Seller”). The Seller is a company incorporated under the laws of Hong Kong, of which a family member of Ms. Junli Yang, the Chairwoman of the Board of Directors of the Company, and Ms. Yung Yung Lo, the Chief Financial Officer of the Company, hold
| 7 |
TOP Financial Group Limited
Notes to Unaudited Condensed Consolidated Financial Statements
For the three and six months ended September 30, 2026 and 2025
1. Organization and Description of Business (Continued)
On April 22, 2026, the Company, through ZYTL (BVI) Limited (“ZYTL”), a subsidiary of the Company, established Strategic Power Investment Limited.
On May 27, 2026, the Company held an extraordinary general meeting of shareholders and approved an increase of the Company’s authorized share capital from US$
On June 11, 2026, the Company setup TOP US Limited (“TOP US”) incorporated under the laws of the British Virgin Islands. On July 2, 2026 and July 13, 2026, the Company, through TOP US, setup two wholly owned subsidiaries, namely TOP Global Inc. and TOP AI, Inc. Both subsidiaries of which were incorporated under the laws of the United States.
On July 20, 2026, the board of directors approved (i) a share consolidation of the Company’s issued and unissued Class A ordinary shares and Class B ordinary shares at a ratio of 1-for-5 (the “Share Consolidation”), as a result, the Company’s authorized share capital was adjusted to US$
| 8 |
TOP Financial Group Limited
Notes to Unaudited Condensed Consolidated Financial Statements
For the three and six months ended September 30, 2026 and 2025
2. Summary of Significant Accounting Policies
Basis of presentation and principle of consolidation
The interim unaudited condensed consolidated financial statements are prepared and presented in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”).
The unaudited condensed consolidated balance sheet as of September 30, 2026 and the unaudited condensed consolidated statements of operations and comprehensive income for the three and six months ended September 30, 2026 and 2025 have been prepared pursuant to the rules and regulations of the SEC and pursuant to Regulation S-X. Certain information and footnote disclosures, which are normally included in annual financial statements prepared in accordance with U.S. GAAP, have been omitted pursuant to those rules and regulations. The unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements and the notes thereto, included in the Form 10-K for the fiscal year ended March 31, 2026, which was filed with the SEC on July 7, 2026.
In the opinion of the management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments which are necessary for a fair presentation of financial results for the interim periods presented. The Company believes that the disclosures are adequate to make the information presented not misleading. The accompanying unaudited condensed consolidated financial statements have been prepared using the same accounting policies as used in the preparation of the Company’s consolidated financial statements for the year ended March 31, 2026. The results of operations for the three and six months ended September 30, 2026 and 2025 are not necessarily indicative of the results for the full years.
The unaudited condensed consolidated financial statements include the financial statements of the parent company and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.
Prior year reclassification
Certain items in the financial statements of the comparative period have been reclassified to conform to the financial statements for the current period. The reclassification has no impact on the total assets, liabilities and shareholders’ equity as of September 30, 2026 and March 31, 2026.
Use of estimates
The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the U. S. (“U.S. GAAP”) requires the use of estimates and assumptions that affect both the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates.
| 9 |
TOP Financial Group Limited
Notes to Unaudited Condensed Consolidated Financial Statements
For the three and six months ended September 30, 2026 and 2025
2. Summary of Significant Accounting Policies (Continued)
Receivables from broker-dealers and clearing organizations
Receivables arise from the business of dealing in futures or investment securities. Broker-dealers will require balances to be placed with them in order to cover the positions taken by its customers. Clearing organization receivables typically represent proceeds receivable on trades that have yet to settle and are usually collected within two days. The balance of receivables from broker-dealers and clearing organizations represents such receivables related to the Company’s customer trading activities and proprietary trading activities.
As of September 30, 2026 and March 31, 2026, receivables from broker-dealers and clearing organizations consisted of the following:
| As of | ||||||||
September 30, 2026 | March 31, 2026 | |||||||
| Receivables from broker-dealers and clearing organizations for futures customer accounts | $ | $ | ||||||
| Receivables from broker-dealers and clearing organizations for securities customer accounts | ||||||||
| Receivables from broker-dealers and clearing organizations for securities proprietary trading | ||||||||
| $ | $ | |||||||
Receivables from customers
Receivables from customers include the trading solution services fees and other amounts due from customers once the transactions have been executed and completed. Receivables from customers are recorded net of allowance for expected credit losses. Revenues earned from the futures brokerage service are included in futures brokerage commission, and revenues earned from trading solution services are included in trading solution services income. The amounts receivable from customers that are determined by management to be uncollectible are recorded as expected credit losses in the unaudited condensed consolidated statements of operations. For the three and six months ended September 30, 2026 and 2025, the Company did not provide allowance for expected credit losses against receivables from customers.
Digital assets
For the three and six months ended September 30, 2026, the Company obtained USD Tether (“USDT”) from investors which subscribed for ordinary shares. As of September 30, 2026, digital assets are initially recorded at cost in the accompanying unaudited condensed consolidated balance sheets. Since USDT is redeemed at one USDT for one U.S. dollar on demand from the issuer, the fair value of USDT approximates its cost. As of September 30, 2026, the Company held
| 10 |
TOP Financial Group Limited
Notes to Unaudited Condensed Consolidated Financial Statements
For the three and six months ended September 30, 2026 and 2025
2. Summary of Significant Accounting Policies (Continued)
Revenue Recognition
a) Revenue from Contracts with Customers
ASC 606, Revenue from Contracts with Customers (“ASC 606”) establishes principles for reporting information about the nature, amount, timing and uncertainty of revenues and cash flows arising from the entity’s contracts to provide goods or services to customers. The core principle 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 accordance with ASC 606, revenues are recognized when the Company satisfies the performance obligations by delivering the promised services to the customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services.
The Company identified each distinct service as a performance obligation. The recognition and measurement of revenues is based on the assessment of individual contract terms. The Company applied a practical expedient to expense costs as incurred for costs to obtain a contract with a customer when the amortization period would have been one year or less. The Company has no material incremental costs of obtaining contracts with customers that the Company expects the benefit of those costs to be longer than one year, which needs to be recognized as assets.
AI services
In August 2026, the Company launched a new business which is to provide customers with access to artificial intelligence (“AI”) models via Application Programming Interfaces (“APIs”), specializing in investment research automation, Know Your Customer (KYC) onboarding, compliance processing, quantitative deep reinforcement learning (DRL) strategy execution, and Know Your Transaction (KYT) on-chain fund-flow tracking. The Company identifies one performance obligation in the contract with customers, which is to provide continuous access to AI models. The Company recognized itself as principal in delivery the AI services because the Company is primarily responsible for establishing its Al models, fine-tuning workflows, setting performance standards, and delivering technical support. The Company has full discretion in establishing API usage prices and bears service availability, SLA compliance, and technical support risks regarding API model delivery.
The transaction fee is calculated on the basis of consumption in AI models. The Company does not identify variable transaction price, financing components or payable to customers. The revenues is recognized over period. The Company adopted “right to invoice” practical expedient under ASC 606-10-55-18, and recognized revenues in an amount to which the entity has a right to invoice.
| 11 |
TOP Financial Group Limited
Notes to Unaudited Condensed Consolidated Financial Statements
For the three and six months ended September 30, 2026 and 2025
2. Summary of Significant Accounting Policies (Continued)
Revenue Recognition (continued)
Futures brokerage commissions
The Company earns fees and commissions from futures brokerage services based on a fixed rate for each transaction, all of which are under the consolidated accounts where the customer information is not disclosed to the third-party brokers. When a customer executes a futures transaction through the Company’s platform, futures brokerage commission is recognized upon the completion of this transaction. Only a single performance obligation is identified for each futures trading transaction, and the performance obligation is satisfied on the trade date because that is when the underlying financial instrument is identified, the pricing of brokerage services is agreed upon and the promised services are delivered to customers. All of the Company’s revenues from contracts with customers are recognized at a point in time. The futures brokerage service cannot be cancelled once it has been executed and is not refundable, so returns and allowances are not applicable. Commissions are charged for each customer trade order executed and cleared by the third-party brokers. The Company recognizes revenue on a gross basis as the Company is determined to be the primary obligor in fulfilling the trade order initiated by the customer. The Company may offer volume rebate as a trading incentive to certain customers. The Company will review the customer’s transaction volume monthly and provide volume rebates on the commission charged to specific customers with large volume transactions. The volume rebate offered to such customers is accounted for as a variable consideration and determined based on the most-likely amount method, which is recognized as a reduction of revenues. For the three and six months ended September 30, 2026 and 2025, the Company did not offer volume rebates, as no customer achieved the transaction volume threshold required for eligibility.
Virtual asset brokerage commissions
The Company earns commissions from virtual asset brokerage services, calculated at a fixed rate multiplied by transaction amount for each transaction, all of which are under the consolidated accounts where the customer information is not disclosed to the third-party broker. When a customer converts virtual assets to US dollars in the account through the Company’s platform, virtual asset brokerage commission is recognized upon the completion of this transaction. Only a single performance obligation is identified for each virtual asset conversion transaction, and the performance obligation is satisfied on the trade date because that is when the underlying US dollar is identified, the pricing of brokerage services is agreed upon and the promised services are delivered to customers. All of the Company’s revenues from contracts with customers are recognized at a point in time. The virtual asset brokerage service cannot be cancelled once it has been executed and is not refundable, so returns and allowances are not applicable. Commissions are charged for each customer trade order executed. The Company recognizes revenue on a gross basis as the Company is determined to be the primary obligor in fulfilling the trade order initiated by the customer. The Company did not offer volume rebate to customers.
| 12 |
TOP Financial Group Limited
Notes to Unaudited Condensed Consolidated Financial Statements
For the three and six months ended September 30, 2026 and 2025
2. Summary of Significant Accounting Policies (Continued)
Revenue Recognition (continued)
Trading solution services fees
The Company provides trading solution services to customers (e.g. individuals, proprietary trading companies or brokerage companies) for their trading on derivatives, equity, CFD and other financial products, through both internally and externally developed proprietary investment management software. The Company’s trading solution provides a variety of functions suitable for front-end transaction executions to back-office settlement operations. The Company implements the initial installation of such software for each customer and provides hosting services for a period of time, generally two years, as agreed in the contracts. The initial installation is considered as a set-up activity, rather than a promised service to customers, which provides no incremental benefit to customers beyond permitting the access and use of the hosted application. The Company identifies a single performance obligation from its contracts with customers. The Company charges each customer a fixed amount of initial installation fee and the monthly service fee based on a fixed rate for each transaction executed on the platform with a minimum monthly fee required. The Company recognizes the trading solution services as satisfied over time.
Other service revenues
The Company also provides other financial services, including securities brokerage and currency exchange services, and earns securities brokerage commissions and other revenues, which are recognized when the service is rendered according to the relevant contracts. The Company may offer volume rebate as a trading incentive to certain customers. The Company will review the customer’s transaction volume monthly and provide volume rebates on the securities brokerage charged to customers. The volume rebate offered to customers is accounted for as a variable consideration and determined based on the most-likely amount method, which is recognized as a reduction of revenues.
For the three months ended September 30, 2026 and 2025, other revenues accounted for
Contract balances
The Company classifies its right to consideration in exchange for services transferred to a customer as either a receivable or a contract asset. A receivable is a right to consideration that is unconditional as compared to a contract asset which is a right to consideration that is conditional upon factors other than the passage of time. The Company recognizes accounts receivable in its condensed consolidated balance sheets when it performs a service in advance of receiving consideration and it has the unconditional right to receive consideration. A contract asset is recorded when the Company has transferred services to the customer before payment is received or is due, and the Company’s right to consideration is conditional on future performance or other factors in the contract. As of September 30, 2026 and March 31, 2026, the Company did record contract assets.
Contract liabilities are recognized if the Company receives consideration prior to satisfying the performance obligations, which include customer advances and deferred revenue under operation service arrangements. As of September 30, 2026 and March 31, 2026, the Company had customer advances of $
| 13 |
TOP Financial Group Limited
Notes to Unaudited Condensed Consolidated Financial Statements
For the three and six months ended September 30, 2026 and 2025
2. Summary of Significant Accounting Policies (Continued)
Revenue Recognition (continued)
Sources of revenue
The following table presents revenues from contracts with customers, in accordance with ASC Topic 606, by major source:
For the Three Months Ended September 30, | For the Six Months Ended September 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Futures brokerage commissions | ||||||||||||||||
| Commission on futures broking earned from Hong Kong Exchange | $ | $ | $ | $ | ||||||||||||
| Commission on futures broking from overseas Exchanges | ||||||||||||||||
| AI services | ||||||||||||||||
| Virtual asset brokerage commissions | ||||||||||||||||
| Trading solution service revenues | ||||||||||||||||
| Other service revenues | ||||||||||||||||
| $ | $ | $ | $ | |||||||||||||
| b) | Trading gains, interest income and other |
Trading gains and losses, interest income from loan business and other interest income fall within the scope of ASC Topic 825, Financial Instruments, which is excluded from the scope of ASC Topic 606. Trading gains and losses mainly consist of realized and unrealized gains and losses from the (1) investment in OTC derivative business, (2) US and HK common stocks, which are included in Securities owned, at fair value, and (3) foreign exchange forward purchased on the investment accounts in J. Safra Sarasin Bank. Regarding the investment in OTC derivative business,
For the three and six months ended September 30, 2026 and 2025, the Company provided the loan business to third party customers. The business was approved by Hong Kong Licensing Court under the Money Lenders Ordinance. The Company disbursed loans to customers to support securities trading for a fixed period and charged interests from the customers. The principal and interest are repayable upon the maturity of the loans. Interest and other income primarily consist of interest earned from margin calls.
| 14 |
TOP Financial Group Limited
Notes to Unaudited Condensed Consolidated Financial Statements
For the three and six months ended September 30, 2026 and 2025
2. Summary of Significant Accounting Policies (Continued)
Earnings per share
Basic earnings per ordinary share is computed by dividing net income attributable to ordinary shareholders by the weighted-average number of ordinary shares outstanding during the period. Diluted earnings per share is computed by dividing net income attributable to ordinary shareholders by the sum of the weighted average number of ordinary share outstanding and of potential ordinary share (e.g., convertible securities, options and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential ordinary shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted earnings per share. For the three and six months ended September 30, 2026 and 2025, the Company had no dilutive securities.
Translation of foreign currencies
The functional currency is the U.S. dollar for the Company’s Cayman Islands operations, Hong Kong dollar for Hong Kong subsidiaries’ operations, Australian dollar for the Australian subsidiary’s operation and Singapore dollar for Singapore subsidiaries’ operations. The Company’s reporting currency is the U.S. dollar. Assets and liabilities denominated in foreign currencies are translated at year-end exchange rates, income statement accounts are translated at average rates of exchange for the year and equity is translated at historical exchange rates. Any translation gains or losses are recorded in other comprehensive loss. Gains or losses resulting from foreign currency transactions are included in net income.
| As of | ||||||||
September 30, 2026 | March 31, 2026 | |||||||
| HKD spot rate | ||||||||
| AUD spot rate | ||||||||
| SGD spot rate | ||||||||
For the Six Months Ended September 30, | ||||||||
September 30, 2026 | March 31, 2026 | |||||||
| HKD average rate | ||||||||
| AUD average rate | | |||||||
| SGD average rate | ||||||||
| 15 |
TOP Financial Group Limited
Notes to Unaudited Condensed Consolidated Financial Statements
For the three and six months ended September 30, 2026 and 2025
2. Summary of Significant Accounting Policies (Continued)
Fair value of financial instruments
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three-level fair value hierarchy prioritizes the inputs used to measure fair value. The hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of the fair value hierarchy are described below:
Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 1 assets included digital assets and securities owned, at fair value.
Level 2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments. Foreign currency forward contracts, which were included in other assets on the balance sheet, were categorized in Level 2 of the fair value hierarchy.
Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value.
As of September 30, 2026 and March 31, 2026, financial instruments of the Company comprised primarily current assets and current liabilities including cash and cash equivalents, restricted cash, digital assets, receivables from broker-dealers and clearing organizations, receivables from customers, loans receivable, due from related parties, securities owned, at fair value, payables to both third party and related party customers, promissory note payable and other payables. In except for the digital assets and securities owned, at fair value, the carrying amount of the financial instruments approximate their fair values because of the short-term nature of these instruments. Digital assets is classified as level 1 financial instrument as it has open market price. Since USDT is redeemed at one USDT for one U.S. dollar on demand from the issuer, the fair value of USDT approximates its cost. Securities owned, at fair value as of September 30, 2026 and March 31, 2026, mainly consist of common stock investments and are based upon quoted market price.
Significant risks and uncertainties
1) Credit risk
Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of cash and cash equivalents. The maximum exposure of such assets to credit risk is their carrying amount as at the balance sheet dates.
As of September 30, 2026, the Company’s cash and cash equivalents were held with banks located in the United States, Hong Kong, Singapore, and Australia. Each bank account in the United States is insured by government authority with the maximum limit of US$
2) Concentration risk
For the three months ended September 30, 2026, three customers accounted for approximately
| 16 |
TOP Financial Group Limited
Notes to Unaudited Condensed Consolidated Financial Statements
For the three and six months ended September 30, 2026 and 2025
2. Summary of Significant Accounting Policies (Continued)
Significant risks and uncertainties (cont.)
2) Concentration risk (cont.)
For the three months ended September 30, 2026, two brokers accounted for
As of September 30, 2026, the payable balance due to two customers accounted for approximately
Recent Accounting Pronouncements
On December 17, 2025, the FASB issued ASU 2025-12, which is to correct, clarify, and otherwise improve U.S. GAAP. ASU 2025-12 includes 33 improvements that span a wide range of topics, including Clarifying diluted earnings per share (EPS) calculation when a loss from continuing operations exists, Clarifying disclosure requirements for lease receivables from sales-type or direct financing leases, Revising the calculation of the reference amount for beneficial interests to prevent double counting credit losses, Clarifying the permissible methods to account for treasury stock retirements, and Clarifying the guidance for transfers of receivables from contracts with customers. The amendments in this Update are effective for all entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. Early adoption is permitted in both interim and annual reporting periods in which financial statements have not yet been issued or made available for issuance. If an entity adopts the amendments in this Update in an interim period, it must adopt them as of the beginning of the annual reporting period that includes that interim reporting period. An entity may elect to early adopt the amendments on an issue-by-issue basis. For example, an entity may decide to early adopt certain amendments and adopt the remaining amendments at the effective date. An entity should apply the amendments in this Update (except for the amendments to Topic 260, Earnings Per Share, related to Issue 4) using one of the following transition methods: (i) Prospectively to all transactions recognized on or after the date that the entity first applies the amendments, or (ii) Retrospectively to the beginning of the earliest comparative period presented. An entity should adjust the opening balance of retained earnings (or other appropriate components of equity or net assets in the statement of financial position) as of the beginning of the earliest comparative period presented. The Company does not expect the adoption to have a material impact.
On December 8, 2025, the FASB issued ASU 2025-11, which is intended to improve the navigability of the guidance in ASC 270 and clarify when it applies. Under the amendments, an entity is subject to ASC 270 if it provides “interim financial statements and notes in accordance with GAAP.” The ASU also addresses the form and content of such financial statements, adds lists to ASC 270 of the interim disclosures required by all other Codification topics, and establishes a principle under which an entity must “disclose events since the end of the last annual reporting period that have a material impact on the entity.” For public business entities, the amendments in ASU 2025-11 are effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. For all other entities, the amendments in ASU 2025-11 are effective for interim reporting periods within annual reporting periods beginning after December 15, 2028. Early adoption is permitted for all entities. The Company does not expect the adoption to have a material impact.
| 17 |
TOP Financial Group Limited
Notes to Unaudited Condensed Consolidated Financial Statements
For the three and six months ended September 30, 2026 and 2025
2. Summary of Significant Accounting Policies (Continued)
Recent Accounting Pronouncements (cont.)
In January 2025, the FASB issued ASU 2025-01, “Income Statement – Comprehensive Income – Expense Disaggregation Disclosure (Subtopic 220-40): Clarifying the Effective Date.” This pronouncement revises the effective date of ASU 2024-03 and clarify that all public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Entities within the ASU’s scope are permitted to early adopt the accounting standard update. The Company does not expect the adoption to have a material impact.
In November 2024, the FASB issued ASU No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”), and in January 2025, the FASB issued ASU No. 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date (“ASU 2025-01”). ASU 2024-03 requires additional disclosure of the nature of expenses included in the income statement as well as disclosures about specific types of expenses included in the expense captions presented in the income statement. ASU 2024-03, as clarified by ASU 2025-01, is effective for annual periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, with early adoption permitted. This guidance will be applied either prospectively or retrospectively. The Company is currently evaluating the impact that the adoption of these standards will have on the Company.
In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements — codification amendments in response to SEC’s disclosure Update and Simplification initiative which amend the disclosure or presentation requirements of codification subtopic 230-10 Statement of Cash Flows—Overall, 250-10 Accounting Changes and Error Corrections— Overall, 260-10 Earnings Per Share— Overall, 270-10 Interim Reporting— Overall, 440-10 Commitments—Overall, 470-10 Debt—Overall, 505-10 Equity—Overall, 815-10 Derivatives and Hedging—Overall, 860-30 Transfers and Servicing—Secured Borrowing and Collateral, 932-235 Extractive Activities— Oil and Gas—Notes to Financial Statements, 946-20 Financial Services— Investment Companies— Investment Company Activities, and 974-10 Real Estate—Real Estate Investment Trusts—Overall. The amendments represent changes to clarify or improve disclosure and presentation requirements of above subtopics. Many of the amendments allow users to more easily compare entities subject to the SEC’s existing disclosures with those entities that were not previously subject to the SEC’s requirements. Also, the amendments align the requirements in the Codification with the SEC’s regulations. For entities subject to existing SEC disclosure requirements or those that must provide financial statements to the SEC for securities purposes without contractual transfer restrictions, the effective date aligns with the date when the SEC removes the related disclosure from Regulation S-X or Regulation S-K. Early adoption is not allowed. For all other entities, the amendments will be effective two years later from the date of the SEC’s removal.
The Company does not believe the above-mentioned recently issued but not yet effective accounting standards, if currently adopted, would have a material impact on its consolidated financial position, statements of operations and comprehensive loss and cash flows.
| 18 |
TOP Financial Group Limited
Notes to Unaudited Condensed Consolidated Financial Statements
For the three and six months ended September 30, 2026 and 2025
3. Receivables from customers
As of September 30, 2026 and March 31, 2026, receivables from customers consisted of the following:
| As of | ||||||||
September 30, 2026 | March 31, 2026 | |||||||
| Receivable due from trading solution services | $ | $ | ||||||
| Less: allowance for expected credit loss on receivables from customers | ( | ) | ( | ) | ||||
| Receivables from customers, net | $ | $ | ||||||
As of September 30, 2026 and March 31, 2026, the Company assessed the collection from the customers and recorded allowance for expected loss of $
4. Loans receivable
As of September 30, 2026 and March 31, 2026, loans receivable consisted of the following:
| As of | ||||||||
September 30, 2026 | March 31, 2026 | |||||||
| Receivable due from customers holding US stocks or HK stocks (i) | $ | $ | ||||||
| Less: allowance for expected credit loss on receivable due from customers holding US stocks or HK stocks | ( | ) | ( | ) | ||||
| Receivable due from customers holding US stocks or HK stocks, net | ||||||||
| Loans receivable (ii) | ||||||||
| Loan receivable, net | $ | $ | ||||||
| (i) |
(ii)
|
| 19 |
TOP Financial Group Limited
Notes to Unaudited Condensed Consolidated Financial Statements
For the three and six months ended September 30, 2026 and 2025
5. Fixed assets, Net
As of September 30, 2026 and March 31, 2026, fixed assets consisted of the following:
| As of | ||||||||
September 30, 2026 | March 31, 2026 | |||||||
| Investment properties | $ | $ | ||||||
| Office equipment | ||||||||
| Leasehold improvement | ||||||||
| Less: accumulated depreciation | ( | ) | ( | ) | ||||
| Fixed assets, net | $ | $ | ||||||
Depreciation expense was $
6. Employee Benefits
All salaried employees of the Company in Hong Kong are enrolled in a Mandatory Provident Fund Scheme (“MPF scheme”) scheme under the Hong Kong Mandatory Provident Fund Schemes Ordinance, within two months of employment. The MPF scheme is a defined contribution retirement plan administered by an independent trustee. The Company makes regular contributions of
7. Fair Value
The following table presents information about the Company’s assets by major category measured at fair value on a recurring basis as of September 30, 2026 and March 31, 2026, and indicates the fair value hierarchy of the valuation technique utilized by the Company to determine such fair value.
| As of September 30, 2026 | ||||||||||||||||||||
| Carrying | Fair Value | |||||||||||||||||||
| Value | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||
| Assets: | ||||||||||||||||||||
| Securities owned, equities at fair value | $ | $ | $ | $ | $ | |||||||||||||||
| Digital assets | ||||||||||||||||||||
| Foreign currency forward contracts | ( | ) | ( | ) | ( | ) | ||||||||||||||
| Total assets at fair value | $ | $ | $ | ( | ) | $ | $ | |||||||||||||
| As of March 31, 2026 | ||||||||||||||||||||
| Carrying | Fair Value | |||||||||||||||||||
| Value | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||
| Assets: | ||||||||||||||||||||
| Securities owned, equities at fair value | $ | $ | $ | $ | $ | |||||||||||||||
| Foreign currency forward contracts | ( | ) | ( | ) | ( | ) | ||||||||||||||
| Total assets at fair value | $ | $ | $ | ( | ) | $ | $ | |||||||||||||
There was no transfer between any levels during the three and six months ended September 30, 2026 and 2025.
| 20 |
TOP Financial Group Limited
Notes to Unaudited Condensed Consolidated Financial Statements
For the three and six months ended September 30, 2026 and 2025
8. Operating lease
As of September 30, 2026, the Company had four non-cancelable operating lease agreements with third-party lessors, with lease terms ranging between two years and three years. The lease agreements mature from September 2027 through October 2028. The Company considers the renewal or termination options that are reasonably certain to be exercised in the determination of the lease term and initial measurement of right of use assets and lease liabilities. Lease expense for lease payment is recognized on a straight-line basis over the lease term.
The Company determines whether a contract is or contains a lease at inception of the contract and whether that lease meets the classification criteria of a finance or operating lease. When available, the Company uses the rate implicit in the lease to discount lease payments to present value; however, most of the Company’s leases do not provide a readily determinable implicit rate. Therefore, the Company discount lease payments based on an estimate of its incremental borrowing rate. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.
The table below presents the operating lease related assets and liabilities recorded on the balance sheets.
| As of | ||||||||
September 30, 2026 | March 31, 2026 | |||||||
| Rights of use lease assets | $ | $ | ||||||
| Operating lease liabilities | $ | $ | ||||||
The weighted average remaining lease terms and discount rates for the above operating lease were as follows as of September 30, 2026 and March 31, 2026:
| As of | ||||||||
September 30, 2026 | March 31, 2026 | |||||||
| Remaining lease term and discount rate | ||||||||
| Weighted average remaining lease term (years) | ||||||||
| Weighted average discount rate | % | % | ||||||
During the three months ended September 30, 2026 and 2025, the Company incurred total operating lease expense of $
The following is a schedule, by years, of maturities of lease liabilities as of September 30, 2026:
| Six months ending March 31, 2027 | $ | |||
| Twelve months ending March 31, 2028 | ||||
| Twelve months ending March 31, 2029 | ||||
| Less: imputed interest | ( | ) | ||
| Present value of lease liabilities | $ |
| 21 |
TOP Financial Group Limited
Notes to Unaudited Condensed Consolidated Financial Statements
For the three and six months ended September 30, 2026 and 2025
9. Long-term investments
As of September 30, 2026 and March 31, 2026, long-term investments consisted of the following:
| As of | ||||||||
September 30, 2026 | March 31, 2026 | |||||||
| Investment measured using the measurement alternative | $ | $ | ||||||
For the three and six months ended September 30, 2026 and 2025, the Company did not make additional investments in investees.
The Company accounted for the investment in these privately held companies using the measurement alternative at cost, less impairment, with subsequent adjustments for observable price changes resulting from orderly transactions for identical or similar investments of the same issuers. These privately held companies just commenced their operations in the year of 2024 and incurred losses through September 30, 2026. For the three and six months ended September 30, 2026 and 2025, the Company did not record upward adjustments or downward adjustments on the investment. For the three and six months ended September 30, 2026 and 2025, the Company’s impairment analysis considers both qualitative and quantitative factors that may have a significant effect on the fair value of the equity investment, and did not provide impairment against investees.
In April 2025 and August 2024, the Company made investment in two installments of $
10. Share-based compensation
Effective on May 31, 2022, the Company employed three non-executive directors. As part of compensation expenses, the Company agreed to issue ordinary shares to the three directors. On quarterly basis, each director would receive ordinary shares with a fair value of $
For the three months ended September 30, 2026 and 2025, the Company issued an aggregation of
For the six months ended September 30, 2026 and 2025, the Company issued an aggregation of
| 22 |
TOP Financial Group Limited
Notes to Unaudited Condensed Consolidated Financial Statements
For the three and six months ended September 30, 2026 and 2025
11. Equity
Ordinary shares
On June 24, 2025, the Board of the Company approved re-designate
On May 27, 2026, the Company held an extraordinary general meeting of shareholders and approved an increase of the Company’s authorized share capital from US$
On July 20, 2026, the board of directors approved (i) a share consolidation of the Company’s issued and unissued Class A ordinary shares and Class B ordinary shares at a ratio of 1-for-5 (the “Share Consolidation”), as a result, the Company’s authorized share capital was adjusted to US$
For the six months ended September 30, 2026 and 2025, the Company issued an aggregation of
| 23 |
TOP Financial Group Limited
Notes to Unaudited Condensed Consolidated Financial Statements
For the three and six months ended September 30, 2026 and 2025
11. Equity (Continued)
Ordinary shares (cont.)
On June 25, 2026, the Company issued an aggregation of
On July 9, 2026, the Company closed a private placement by issuance of
As of September 30, 2026 and March 31, 2026, the Company had
12. Income Taxes
The Company evaluates the level of authority for each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measures the unrecognized benefits associated with the tax positions. For the three and six months ended September 30, 2026 and 2025, the Company had unrecognized tax benefits. Due to uncertainties surrounding future utilization, the Company estimates there will not be sufficient future income to realize the deferred tax assets arising from net operating losses for the Company’s subsidiaries. The Company maintains a full valuation allowance on its net deferred tax assets arising from net operating losses as of September 30, 2026 and March 31, 2026.
The Company does not anticipate any significant increase to its liability for unrecognized tax benefit within the next 12 months. The Company will classify interest and penalties related to income tax matters, if any, in income tax expense.
For the three and six months ended September 30, 2026, the Company recorded income tax expenses of $
| 24 |
TOP Financial Group Limited
Notes to Unaudited Condensed Consolidated Financial Statements
For the three and six months ended September 30, 2026 and 2025
13. Related Party Transactions and Balances
a. Nature of relationships with related parties
| Name | Relationship with the Company | |
| Ms. Junli Yang | ||
| Mr. Huaixi Yang | ||
| Ms. Tam Hoi Ling, Jennifer | ||
| Ms. Yung Yung Lo | ||
| Ever Victory Limited |
b. Related party transactions
For the Three Months Ended September 30, | For the Six Months Ended September 30, | |||||||||||||||||
| Nature | 2026 | 2025 | 2026 | 2025 | ||||||||||||||
| Mr. Huaixi Yang | $ | $ | $ | $ | ||||||||||||||
| Mr. Huaixi Yang | $ | $ | $ | $ | ||||||||||||||
| Mr. Huaixi Yang | $ | $ | $ | $ | ||||||||||||||
On July 24, 2025, the Company, through ZYNL, closed an acquisition of
c. Balances with related parties
| As of | ||||||||||
| September 30, | March 31, | |||||||||
| Nature | 2026 | 2026 | ||||||||
| Mr. Huaixi Yang | $ | $ | ||||||||
| Ever Victory Limited | $ | $ | ||||||||
| Mr. Huaixi Yang | $ | $ | ||||||||
| Ms. Junli Yang | $ | $ | ||||||||
| Ms. Tam Hoi Ling, Jennifer | $ | $ | ||||||||
As of September 30, 2026 and March 31, 2026, the balance due from Mr. Huaixi Yang represented credit facility offered to the related party as part of our securities brokerage services. The loans bear interest rate of
As of September 30, 2026 and March 31, 2026, the balance due from Ever Victory Limited represented advances made to the related party to support its operations. The loan was interest-free and repayable on demand.
| 25 |
TOP Financial Group Limited
Notes to Unaudited Condensed Consolidated Financial Statements
For the three and six months ended September 30, 2026 and 2025
14. Regulatory Requirements
The following table illustrates the minimum regulatory capital as established by the Hong Kong Securities and Futures Commission that the Company’s subsidiaries were required to maintain as of September 30, 2026 and March 31, 2026, and the actual amounts of capital that were maintained.
Capital requirements as of September 30, 2026
Minimum Regulatory Capital Requirements | Capital Levels Maintained | Excess Net Capital | Percent of Requirement Maintained | |||||||||||||
| Zhong Yang Securities Limited | $ | $ | $ | % | ||||||||||||
| Zhong Yang Capital Limited | $ | % | ||||||||||||||
| Total | $ | $ | $ | % | ||||||||||||
Capital requirements as of March 31, 2026
Minimum Regulatory Capital Requirements | Capital Levels Maintained | Excess Net Capital | Percent of Requirement Maintained | |||||||||||||
| Zhong Yang Securities Limited | $ | $ | $ | % | ||||||||||||
| Zhong Yang Capital Limited | $ | % | ||||||||||||||
| Total | $ | $ | $ | % | ||||||||||||
| 26 |
Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion should be read in conjunction with the Company’s unaudited condensed consolidated financial statements and notes thereto contained in this report.
Forward Looking Statements
This Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. When used in this Form 10-Q and in future filings by us with the Securities and Exchange Commission (“SEC”), the words or phrases “believe”, “expect,” “anticipate,” “intend”, “plan”, “may,” “will”, “should,” “could”, “estimate,” or similar expressions are intended to identify forward-looking statements. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. These statements are not guarantees of future performance and are subject to risks and uncertainties. There can be no assurance that future developments will be those that have been anticipated. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements. Further, such statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical earnings and those presently anticipated or projected. The risks are included in Part I, Item 1A - Risk Factors of our Annual Report on Form 10-K for the fiscal year ended March 31, 2026 (the “Form 10-K”).
The forward-looking statements contained in this Form 10-Q speak only as of the date of this report. Except as required by applicable law, we undertake no obligation to update or revise any forward-looking statements to reflect subsequent events, changed circumstances, or changes in expectations.
Overview
We, through our Operating Subsidiaries, are an online provider of securities and futures trading services founded in Hong Kong by a group of experienced professionals and talents. Our goal is to become the preferred trading platform for Asian investors worldwide. We enable our customers to trade on renowned stock and futures exchanges around the world, including the Chicago Mercantile Exchange (“CME”), Hong Kong Futures Exchange (“HKFE”), The New York Mercantile Exchange (“NYMEX”), The Chicago Board of Trade (“CBOT”), The Commodity Exchange (“COMEX”), Eurex Exchange (“EUREX”), ICE Clear Europe Limited (“ICEU”), Singapore Exchange (“SGX”), Australia Securities Exchange (“ASX”), Bursa Malaysia Derivatives Berhad (“BMD”), and Osaka Exchange (“OSE”). We create value for our customers by providing reliable trading platforms, a user-friendly web and app interface, and 24-hour seamless customer support. Our Operating Subsidiaries generate revenues primarily by charging commission fees on futures transactions at a flat rate for each futures transaction contract and trading solution services fees charged at a fixed rate per transaction with a minimum monthly fee. Currently our customers are mainly high volume and frequency trading institutional and individual investors.
In August 2026, the Board of Directors approved a major strategic initiative to expand the use of artificial intelligence (AI) across our core financial business. Under this new technical mandate, we will develop and deploy advanced AI solutions designed to create scalable, technology-driven business lines while directly supporting and optimizing our core fintech operations. We will deeply embed tools across our core operational entities. The goal is to revolutionize the user experience, optimize administrative costs, and enhance data reporting capabilities. Specific system integrations include Online Brokerage & Asset Management, Predictive Risk Assessment, Wealth Management & Advisory, Investment Banking Workflow. For the three and six months ended September 30, 2026, the Company generated revenue from AI services of approximately $0.2 million and $0.2 million, respectively.
Our revenues were US$2.2 million and US$1.5 million for the three months ended September 30, 2026 and 2025, respectively. We, through our Operating Subsidiaries, generated net income of US$0.3 million and US$0.1 million for the three months ended September 30, 2026 and 2025. Our revenues were US$3.3 million and US$2.9 million for the six months ended September 30, 2026 and 2025, respectively. We, through our Operating Subsidiaries, generated net income of US$0.2 million and US$0.2 million for the six months ended September 30, 2026 and 2025. We expect to create a scalable ecosystem for our financial services and generate higher revenues and net income from delivering the AI services.
We plan to keep our business growing by expanding our customer base to include retail investors of a wider range of wealth within the Asian communities across the globe, by increasing the products we offer to include securities and futures from a larger number of stock exchanges, by offering services such as asset management, trust services, investor relations and marketing services, corporation and fund consultancy and contract for difference (“CFD”) products and by blending enterprise-grade GPU compute infrastructure with localized AI software.
| 27 |
Recent Developments
On March 25, 2026, we entered into the Securities Purchase Agreement (the “Securities Purchase Agreement”), with certain non-U.S. investors (each a “Purchaser”) relating to the issuance and sale of 42,886,244 units (“Units”) (after giving effect to share consolidation at a ratio of 5-for-1 on August 3, 2026), with each Unit consisting of (i) one Class A ordinary share, par value US$0.005 per share (“Class A Ordinary Share” and such shares, the “Shares”), and (ii) two warrants, each to purchase one Class A ordinary share (the “Warrants”), at a price per Unit of US$1.8654 (after giving effect to share consolidation at a ratio of 5-for-1 on August 3, 2026) (the “Offering”). On May 5, 2026, we entered into Supplement No. 1 (the “Supplement”) to the Securities Purchase Agreement. The private placement closed on July 9, 2026 and the Company issued 42,886,244 Class A Ordinary Shares (after giving effect to share consolidation at a ratio of 5-for-1 on August 3, 2026) and Warrants to purchase up to 85,772,489 Class A Ordinary Shares (giving effect to share consolidation at a ratio of 1-for-5 effected in August 2026). The Company received gross proceeds in the amount of $80 million before deducting offering expenses. We received net proceeds of approximately $80.0 million from the private placement.
On May 27, 2026, we held an extraordinary general meeting of shareholders (the “Meeting”) to approve an increase of our authorized share capital from US$1,000,000 divided into 1,000,000,000 shares comprising of (i) 900,000,000 class A ordinary shares of a par value of US$0.001 each and (ii) 100,000,000 class B ordinary shares of a par value of US$0.001, to US$20,000,000.00 divided into 20,000,000,000 ordinary shares of a par value of US$0.001 each comprising (i) 18,000,000,000 class A ordinary shares of a par value of US$0.001 each (the “Class A Ordinary Shares”) and (ii) 2,000,000,000 class B ordinary shares of a par value of US$0.001 each (the “Class B Ordinary Shares”), by the creation of additional 17,100,000,000 Class A Ordinary Shares and 1,900,000,000 Class B Ordinary Shares, with immediate effect (the “Share Capital Increase”) and to authorize any of our director or the registered office provider to do all other acts and things as our board of directors (the “Board”) considers necessary or desirable in connection with the Share Capital Increase, including without limitation, notifying and attending to the necessary filings with the Registrar of Companies in the Cayman Islands. The Company’s third amended and restated memorandum and articles of association, which became effective immediately upon shareholder approval of Proposal Two on May 27, 2026.
On June 19, 2026, we entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) with certain investors (each, a “Purchaser”), pursuant to which we agreed to issue and sell to the Purchasers an aggregate of 1,288,203 Class A ordinary shares (giving effect to share consolidation at a ratio of 1-for-5 effected in August 2026), par value US$0.005 per share (the “Class A Ordinary Shares”), at a purchase price of US$2.2823 per share (giving effect to share consolidation at a ratio of 1-for-5 effected in August 2026), in a registered direct offering (the “Offering”), for aggregate gross proceeds of approximately US$2.9 million before deducting estimated offering expenses.
On July 19, 2026, the Company entered into Warrant Amendment Agreements (the “Amendment Agreements”) with holders of certain warrants (the “Warrants”) to purchase up to 85,772,489 Class A ordinary share (giving effect to share consolidation at a ratio of 1-for-5 effected in August 2026) of the Company, par value US$0.005 per share (“Class A Ordinary Share”), issued on July 9, 2026 pursuant to certain securities purchase agreements dated March 25, 2026, as supplemented on May 5, 2026 (the “Agreement”), by and between the Company and certain non-U.S. investors. On July 20, 2026, the Company issued 72,106,886 Class A Ordinary Shares (giving effect to share consolidation at a ratio of 1-for-5 effected in August 2026) (the “Warrant Shares”) as a result of the exercise of the Warrants, as amended.
On July 20, 2026, the board of directors approved (i) a share consolidation of the Company’s issued and unissued Class A ordinary shares and Class B ordinary shares at a ratio of 1-for-5 (the “Share Consolidation”), such that (a) every five (5) issued and unissued Class A ordinary shares of a par value of US$0.001 each was consolidated into one (1) Class A ordinary share of a par value of US$0.005 each, (b) every five (5) issued and unissued Class B ordinary shares of a par value of US$0.001 each was consolidated into one (1) Class B ordinary share of a par value of US$0.005 each, and (c) any fractional shares resulting from the Share Consolidation was rounded up to the nearest whole share. The Share Consolidation was effective on August 3, 2026. As a result, the Company’s authorized share capital was adjusted to US$20,000,000 divided into 4,000,000,000 ordinary shares of a par value of US$0.005 each, comprising 3,600,000,000 Class A ordinary shares with a par value of US$0.005 each and 400,000,000 Class B ordinary shares with a par value of US$0.005 each. The Company’s Class A ordinary shares began trading on a post-split basis on the Nasdaq Stock Market LLC on August 3, 2026, under the current symbol “TOP”. The new CUSIP number following the Share Consolidation is G989A6110. As of September 30, 2026 and March 31, 2026, the share number was retroactively adjusted to reflect the share consolidation.
| 28 |
Operating Results.
Factors Affecting Our Results of Operations
Our business and operating results are influenced by general factors that affect the online securities and futures brokerage industry focusing on Southeast Asian investors, including economic and political conditions, the evolving needs of investors, changes in trading volume, changes in demand for online trading, changes in wealth and availability of funds of our target customers, and regulatory changes governing the online brokerage industry. In addition, the following company specific factors can directly affect our results of operations materially:
Our ability to retain existing customers and attract new customers in a cost-effective manner
We consider customer churn rate to be an important indicator of our attractiveness to customers. Our total registered customer number increased from 355 as of March 31, 2025 to 711 as of March 31, 2026, and further increased to 2371 As of September 30, 2026. In the six months ended September 30, 2025, we had 196 revenue-generating accounts in total, including 52 accounts for futures trading, 139 accounts for securities trading, and 5 accounts for trading solution services. In the six months ended September 30, 2026, we had 1193 revenue-generating accounts in total, including 53 accounts for futures trading, 1140 accounts for securities trading and 0 accounts for trading solution services.
Our top five customers accounted for 53% and 47% of our total revenues for the three months ended September 30, 2026 and 2025, respectively. Our top five customers accounted for 44% and 46% of our total revenues for the six months ended September 30, 2026 and 2025, respectively. Our customers are mainly sourced by referral through our shareholders’ expansive and expanding social and professional networks of high-net-worth individuals. Currently, we have not incurred significant spending on marketing activities. To expand our business, we aim to diversify our customer base by attracting smaller retail customers who we can charge higher commission rates. We expect to incur expenses in our promotional efforts through different online and offline media channels to increase the number of customer accounts, which can potentially lead to trading volume and revenues.
We currently pursue a niche market strategy in Hong Kong. We established two subsidiaries in Singapore during 2022 and planned to expand to Southeast Asia as the first step in achieving the final goal of becoming the preferred online trading platforms for Asian investors worldwide, including in the United States. As a relatively young firm new to the market, although we face competition from bigger, better capitalized, and well established companies, including other trading firms and banking institutions, our ability to understand and meet our target customers’ needs, coupled with our strong client relationships, allow us to rise to the challenge. Our ability to continuously provide our customers with low-latency trading platforms and high quality services at competitive prices and the outcome of our advertising and marketing activities will affect whether we can retain our existing customers and attract new customers.
Our ability to earn commissions from brokerage services
We charge commission fees for the brokerage services we offer. Our ability to earn commission fees and interest income largely depends on the number of customers on our trading platforms and their trading volume and the commission rates we charge.
It has become increasingly common for online trading platforms to offer free brokerage services. As a provider of brokerage services on chargeable-only trading platforms, we are confident that we can differentiate ourselves from our competitors, as we offer low-latency trading platforms, a wide range of products from multiple exchanges, and quality customer services, and we maintain good relationships with our customers. Rather than prioritizing cost saving, most of our customers are professional customers seeking quality trading platforms to execute their orders timely and accurately.
We anticipate a future possibility of having to lower our commission rates in order to remain competitive, but we believe that a larger trading volume would make up for the effects of lowered commission rates on our revenues. We also plan to develop new sources of income from asset management and contract for difference (“CFD”) products and services, as we have seen the demand for these services by our customers.
| 29 |
Our ability to effectively improve technology infrastructure
Our technological infrastructure and compliance capabilities are critical for us to offer high quality products and services as well as to retain and attract users and customers. They also enable us to facilitate secure, fast and cost-efficient financial transactions on our platform. We must continue to upgrade and expand our technological infrastructure and to strengthen our compliance system to keep pace with the growth of our business and to develop new features and services for our users and customers. With the continuous improvement of our technological infrastructure and compliance capabilities, we are able to serve more consolidated accounts. We also expect cash segregated for regulatory purposes and payables due to customers on our balance sheet to increase significantly as a result of such growth. We intend to invest more resources on customer verification, record keeping, compliance and trading-related functions for consolidated accounts. Our ability to serve more consolidated accounts depends on, among other things, our ability to support all aspects of customer verification, record keeping and compliance functions using our technology and human resources.
Our ability to develop a diverse customer base and offer new and innovative products and services
Historically, we have generated a significant portion of our revenues through the provision of online brokerage services including commissions for execution of trades and interest income. Key success factors of the online brokerage industry include expansion of products and services that add value to customers, acquisition of licenses in different jurisdictions and enhancement of user experience. To this end, we intend to continue strengthening the innovation, security, efficiency and effectiveness of our brokerage services, including our user-friendly interface, comprehensive functionalities and customer service capabilities. Particularly, we intend to expand our service offerings to contract for difference (“CFD”) trading and increase the proportion of revenues generated from them.
We also plan to continue integrating value-added services, including asset management services to increase revenues streams. Our ability to maintain and attract new customers principally depends on the quality of our products and services as well as our brand equity. We expect our operating cost and expenses to continue to increase as we provide more innovative and effective products and services.
Contract for Difference (“CFD”)
We are preparing the launch of CFD products and services in the year of 2027. We expect to generate CFD trading revenues from (i) commissions, (ii) bid/offer spreads, (iii) difference in interest rates. In particular, we plan to:
| i). | charge commissions for all CFD transactions. The amount of commissions we charge is largely based on the trading volume, with commission rates varying between US$2.25 and US$50 per lot, based on the per-lot value and the type of product traded, as well as discounts offered to different clients. |
| ii). | mark up the bid/offer spreads for CFD products on top of the prices offered by our clients, exchanges or third-party market makers, as the case may be. Our price mark-ups over the price offered by an exchange vary depending on the underlying product. |
| iii). | automatically roll-over currency positions each day and provide either a credit or debit for the interest rate difference between the two currencies in the pairs being held. The clients’ debits are our gains. |
Trust Services
We are in progress of establishing our trust services business in Hong Kong to provide family trust solutions, encompassing company formation, trust establishment and trust management. We intend to charge one-off trust establishment fees and annual administrative fees for our trust services in accordance with the trust service agreements that we will enter into with our clients.
| 30 |
Investor Relations and Marketing Services
We are in progress of establishing our investor relations and marketing services business to help companies manage their ongoing relationships with shareholders and market their brand. Through creating a corporate account, our corporate clients can livestream their earnings release and product launch campaigns, post business milestones and advertisements, and interact directly with our users. Therefore, we will be able to provide a direct channel for our corporate clients to communicate with their existing and prospective investors and increase their brand and product awareness.
Corporation and Fund Consultancy
We intend to provide professional advisory services on pre-IPO or funds setup for clients in Hong Kong and other jurisdictions. By providing our advice and expertise, we can safely guide our clients through the dynamics of operating and advancing their business in an environment where there is no predefined answer for management.
Asset Management Services
Based on our clients’ different needs, we plan to provide personalized investment strategies to optimize their asset allocations. Our clients can purchase a wide variety of investment portfolios, which include assets such as stocks, bonds, ETFs, investment funds and derivatives. We charge management fees based on their assets under management as well as commissions for certain transactions.
AI Services
In August 2026, our Board of Directors approved a major strategic initiative to expand the use of artificial intelligence (AI) across its core financial business. Under this new technical mandate, we will develop and deploy advanced AI solutions designed to create scalable, technology-driven business lines while directly supporting and optimizing our core fintech operations. We will deeply embed tools across its core operational entities. The goal is to revolutionize the user experience, optimize administrative costs, and enhance data reporting capabilities. Specific system integrations include Online Brokerage & Asset Management, Predictive Risk Assessment, Wealth Management & Advisory, Investment Banking Workflow. We charge AI service fees based on the number of AI models consumed by our customers.
Our ability to provide stable and low-latency trading platforms to our customers
As an online brokerage service provider, we attract new customers and retain our existing customers by providing them with stable and low-latency trading platforms. Especially when the market is volatile and high trade volume is expected, we are able to avoid delays in execution of customers’ trading orders and assist the customers to accomplish their investment plan.
Our plan to maintain our quality trading platform involves keeping our system hardware and software up to date, conducting regular stress tests, and providing IT training to our staff. We also plan to have regular meetings with our network provider to ensure the stability of internet services in support of our trading platform. We have implemented emergency backup plan in case of system failure. Our backup system is able to support our customers’ trading activities until the core system is fixed. Our stable and low-latency trading platforms are a core part of our strength, and we are committed to continue our efforts in maintaining the reliability and efficiency of our trading platforms.
| 31 |
Our ability to meet the regulatory requirements to provide brokerage, margin financing and asset management services in Hong Kong
Brokerage services, margin financing and asset management are highly regulated in Hong Kong. While our operations are mainly located in Hong Kong, we are inevitably subject to the relevant laws and regulations, in particular, the Securities and Futures Ordinance (Cap. 571) (“SFO”), under the supervision of the Securities and Futures Commission of Hong Kong (“HKSFC”). Pursuant to the SFO, we have to comply with all application provisions concerning statutory obligations such as maintenance of minimum capital adequacy, specific regulatory reporting, and availability of responsible officers.
We monitor our capital level on daily basis so as to fulfill the statutory requirements. Before making a significant movement of our cash, we will estimate the effect of sub activity on our capital level and make sure to remain compliant with the regulations. Accordingly, we also have statutory obligations to report to the authority on monthly basis about our capital level maintained at the end of the month and if any significant fluctuations occurred that we shall notify the authority.
Besides, as required by the SFO, there must be at least two responsible officers per regulated activity, who will supervise our regulated business and assume greater responsibilities over the SFO compliance. To maintain compliance, we have always maintained two to three experienced responsible officers for each regulated activity. To retain our responsible officers and stay compliant with the availability of responsible officers, we offer attractive remuneration packages and align their interests with the Company’s interests.
Loan Business
Winrich is a licensed money lending company governed by the Money Lenders Ordinance in Hong Kong to carrying on business as a money lender. According to the Money Lenders Ordinance, customers shall enter into agreement with Winrich in person and provide their personal information for the “know your client” purposes, or KYC. Winrich disbursed loans to customers for a fixed period and charged interest from the customers. The principal and interest are repayable upon the maturity of the loans. We recognized interest income using straight-line method over loan period.
Our ability to strategically position the risks related to doing business in jurisdictions we operate
A downturn in the Hong Kong, China or global economy, and economic and political policies of China could materially and adversely affect our business and financial condition.
A substantial part of our operations is located in Hong Kong. Accordingly, our business, prospects, financial condition and results of operations may be influenced to a significant degree by the economic conditions in Hong Kong and China which are also sensitive to global economic conditions. Any prolonged slowdown in the global or Chinese economy may affect potential clients’ confidence in financial market as a whole and have a negative impact on our business, results of operations and financial condition. Additionally, continued turbulence in the international markets may adversely affect our ability to access the capital markets to meet liquidity needs.
To remain competitive in an evolving financial landscape, we have been prepared for the future to adopt forward-thinking strategies, including the establishment of diversifying business activities, expanding alternative investments, and enhancing multi-asset trading capabilities that embrace diversification, technology, and global market trends. We must leverage technology, expand into alternative assets, and adapt to regulatory shifts to future-proof our trading and investment strategies. By aligning with global trends and adopting client-first approach, we can secure long-term growth in a dynamic market.
| 32 |
Key Components of Results of Operations
Revenues
Our revenues consist of AI service fees, commissions, trading solution services and other service revenues, trading gains, interest income and others. The following table sets forth the breakdown of our total revenues, both in absolute amount and as a percentage of our total revenues, for the years indicated:
| For the three months ended September 30, | For the six months ended September 30, | |||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||||||||
| US$ | % | US$ | % | US$ | % | US$ | % | |||||||||||||||||||||||||
| AI services | 222,111 | 10.1 | - | 0.0 | 222,111 | 6.8 | - | - | ||||||||||||||||||||||||
| Futures brokerage commissions | 138,687 | 6.3 | 630,497 | 41.1 | 302,888 | 9.2 | 1,269,043 | 44.2 | ||||||||||||||||||||||||
| Virtual asset commissions | 27,922 | 1.3 | - | 0.0 | 101,677 | 3.1 | - | 0.0 | ||||||||||||||||||||||||
| Trading solution service revenues | - | 0.0 | 110,000 | 7.2 | - | 0.0 | 260,000 | 9.1 | ||||||||||||||||||||||||
| Interest income from loan business | 1,386,377 | 62.7 | 237,670 | 15.5 | 1,802,516 | 54.8 | 474,719 | 16.5 | ||||||||||||||||||||||||
| Other service revenues | 318,903 | 14.4 | 115,508 | 7.5 | 693,218 | 21.1 | 146,079 | 5.1 | ||||||||||||||||||||||||
| Trading gains (losses) | 66,091 | 2.9 | 331,608 | 21.5 | (58,480 | ) | (1.8 | ) | 510,903 | 17.8 | ||||||||||||||||||||||
| Interest income and other | 49,875 | 2.3 | 110,259 | 7.2 | 222,736 | 6.8 | 208,191 | 7.3 | ||||||||||||||||||||||||
| Total revenues | 2,209,966 | 100 | 1,535,542 | 100 | 3,286,666 | 100 | 2,868,935 | 100 | ||||||||||||||||||||||||
AI services
In August 2026, we launched our AI services which is to provide customers with access to artificial intelligence (“AI”) models via Application Programming Interfaces (“APIs”), specializing in investment research automation, Know Your Customer (KYC) onboarding, compliance processing, quantitative deep reinforcement learning (DRL) strategy execution, and Know Your Transaction (KYT) on-chain fund-flow tracking. We recognized ourselves as principal in delivery the AI services because we are primarily responsible for establishing its Al models, fine-tuning workflows, setting performance standards, and delivering technical support. We have full discretion in establishing API usage prices and bear service availability, SLA compliance, and technical support risks regarding API model delivery. The transaction fee is calculated on the basis of consumption of AI models. We recognize revenues in an amount to which the entity has a right to invoice. Revenue from AI services account for 10.1% and 6.8% of the total revenues for the three and six months ended September 30, 2026, respectively.
Futures brokerage commissions
Futures brokerage commissions represent commission income on futures broking that are charged at a fixed rate for each transaction our customers executed through our online trading platforms, all of which are under the consolidated accounts where the customer information is not disclosed to the third-party brokers. We receive commissions from customers and pay the execution and clearing fees to our clearing brokers. The fixed rates applied to the customers vary depending on the type of customer, the type of transaction, the trading method, and the trade volume from the particular customer. Commissions from futures broking is a major component of our revenues, at 6.3% and 41.1% of the total revenues for the three months ended September 30, 2026 and 2025, respectively, and at 9.2% and 44.2% of the total revenues for the six months ended September 30, 2026 and 2025.
Virtual asset brokerage commissions
Virtual asset brokerage commissions represent commission income on virtual asset conversion from/into US dollar that are charged at a fixed rate for each transaction our customers executed through our online trading platforms, all of which are under the consolidated accounts where the customer information is not disclosed to the third-party broker. We receive commissions from customers. The virtual asset brokerage service cannot be cancelled once it has been executed and is not refundable, so returns and allowances are not applicable. Commissions are charged for each customer trade order executed. Commissions from virtual asset broking make up for most of our revenues at 1.3% and 3.1% of the total revenues for the three and six months ended September 30, 2026, respectively.
| 33 |
Trading solution services fees
Commencing in the year of 2021, we provided trading solution services to customers (including individuals, proprietary trading companies or brokerage companies) for their trading on derivatives, equity, CFD and financial products, through our internally developed proprietary investment management software. We provide a variety of functions suitable for front-end transaction executions and back-office settlement operations. We charge each customer a fixed amount of initial installation fee and the monthly service fee based on a fixed rate per transaction executed on the platform with a minimum monthly fee. We did not generate trading solution services fees for the three and six months ended September 30, 2026. Trading solution services fees accounted for 7.2% and 9.1%, respectively, of total revenues during the three and six months ended September 30, 2025.
Interest income from loan business
The Company disbursed loans to customers for a fixed period and charged interests from the customers. The principal and interest are repayable upon the maturity of the loans. We recognized interest income using straight-line method over loan period. For the three months ended September 30, 2026 and 2025, we recognized interest income of US$1.4 million and US$0.2 million from loan business, accounting for 62.7% and 15.5% of total revenues, respectively. For the six months ended September 30, 2026 and 2025, we recognized interest income of US$1.8 million and US$0.5 million from loan business, accounting for 54.8% and 16.5% of total revenues, respectively.
Other service revenues
Other service revenues represent the revenues generated from rendering other financial services including securities brokerage, consulting services, and currency exchange services. We generally receive subscription fees calculated with reference to the amount subscribed by our clients of the structured products. For the three months ended September 30, 2026 and 2025, other service revenues accounted for 14.4% and 7.5% of total revenues, respectively. For the six months ended September 30, 2026 and 2025, other service revenues accounted for 21.1% and 5.1% of total revenues, respectively.
Trading gains (losses)
The trading gains (losses) mainly consist of realized and unrealized gains and losses from investment in US and HK stocks, which are included in Securities owned, at fair value. Trading gains made up for 2.9% and 21.5% of total revenues for the three months ended September 30, 2026 and 2025, respectively. Trading losses make up for negative 1.8% and trading gains made up for 17.8% of total revenues for the six months ended September 30, 2026 and 2025, respectively.
Interest income and others
During the three months ended September 30, 2026, the interest income was comprised of $49,875 of interest income charged on our customer who traded HK & US stocks, interest income earned on deposits maintained with brokerage institutions, and interest income earned on bank deposits, including term deposits. During the six months ended September 30, 2026, the interest income was comprised of $0.2 million of interest income charged on our customer who traded HK & US stocks, interest income earned on deposits maintained with brokerage institutions, and interest income earned on bank deposits, including term deposits.
During the three months ended September 30, 2025, the interest income was comprised of $0.1 million of interest income charged on our clients who traded US stocks and interests earned on bank deposits. During the six months ended September 30, 2025, the interest income was comprised of $0.2 million of interest income charged on our clients who traded US stocks and interests earned on bank deposits.
| 34 |
Expenses
The following table sets forth our operating cost and expenses, both in absolute amount and as a percentage of total revenues, for the years indicated:
| For the three months ended September 30, | For the six months ended September 30, | |||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||||||||
| US$ | % | US$ | % | US$ | % | US$ | % | |||||||||||||||||||||||||
| Cost of AI services | 207,451 | 9.4 | - | - | 207,451 | 6.3 | - | - | ||||||||||||||||||||||||
| Commission expenses | 154,308 | 7.0 | 458,157 | 29.8 | 327,530 | 10.0 | 900,367 | 31.4 | ||||||||||||||||||||||||
| Compensation and benefits | 693,472 | 31.4 | 623,490 | 40.6 | 1,264,569 | 38.5 | 1,057,496 | 36.9 | ||||||||||||||||||||||||
| Communications and technology | 94,910 | 4.3 | 121,908 | 7.9 | 175,561 | 5.3 | 238,399 | 8.3 | ||||||||||||||||||||||||
| Occupancy | 237,251 | 10.7 | 47,653 | 3.1 | 661,738 | 20.1 | 73,289 | 2.6 | ||||||||||||||||||||||||
| Travel and business development | 17,100 | 0.8 | 9,519 | 0.6 | 30,687 | 0.9 | 12,682 | 0.4 | ||||||||||||||||||||||||
| Professional fees | 347,419 | 15.7 | 54,070 | 3.5 | 434,828 | 13.2 | 101,328 | 3.5 | ||||||||||||||||||||||||
| Other administrative expenses | 183,709 | 8.3 | 116,197 | 7.6 | 296,910 | 9.0 | 294,834 | 10.3 | ||||||||||||||||||||||||
| Total expenses | 1,935,620 | 87.6 | 1,430,994 | 93.1 | 3,399,274 | 103.3 | 2,678,395 | 93.4 | ||||||||||||||||||||||||
Cost of AI services
Cost of AI services represent the fees we paid for procurement of API model. Cost of AI services accounted for 9.4% and 6.3% of our revenues for the three and six months ended September 30, 2026.
Commission expenses
Commission expenses represent the fees we paid to our broker partners, when we place a client order to an exchange market through these partners. We expect that our commission expenses will increase in absolute amount as we expand our brokerage business and offer more products from securities and futures exchanges around the world. We place orders through broker partners except for orders to the Hong Kong Stock Exchange. Commission expenses accounted for 7.0% and 29.8% of our revenues for the three months ended September 30, 2026 and 2025, respectively. Commission expenses accounted for 10.0% and 31.4% of our revenues for the six months ended September 30, 2026 and 2025, respectively.
Compensation and benefits
Compensation and benefits represent the salaries, performance based discretionary bonuses and contribution to retirement fund, and share-based compensation expenses to non-executive directors. Compensation and benefits expenses accounted for 31.4% and 40.6% of our revenues for the three months ended September 30, 2026 and 2025, respectively. Compensation and benefits expenses accounted for 38.5% and 36.9% of our revenues for the six months ended September 30, 2026 and 2025, respectively.
Communications and technology
Communications and technology expenses represent fees we paid for the use of third party electronic trading systems, including an online stock trading system, an online futures trading system, and another futures trading system that was a one-time incidental cost pursuant to a customer’s special request, as well as the outsourced trading solution support services. Communications and technology expenses accounted for 4.3% and 7.9% of our revenues for the three months ended September 30, 2026 and 2025, respectively. Communications and technology expenses accounted for 5.3% and 8.3% of our revenues for the six months ended September 30, 2026 and 2025, respectively.
Occupancy
Occupancy expenses are the rental expenses we paid for our office premises, which accounted for 10.7% and 3.1% of our revenues for the three months ended September 30, 2026 and 2025, respectively. Occupancy expenses are the rental expenses we paid for our office premises, which accounted for 20.1% and 2.6% of our revenues for the six months ended September 30, 2026 and 2025, respectively.
| 35 |
Travel and business development, Professional fees and Other administrative expenses
Travel and business development expenses include overseas and local travelling, and the entertainment expenses. Professional fees are mainly the service fees for auditing, consulting, legal, and other professional services which are needed during the ordinary course of our business operation. Other administrative expenses primarily consist of fees paid to the Stock Exchange of Hong Kong and Chicago Mercantile Exchange, business entertainment expenses, exchange difference, depreciation expense, finance costs and other miscellaneous expenses such as utilities. In the six months ended September 30, 2025, we also recorded the one-off expenses we compensated for the losses incurred by our OTC derivatives customers. All of these expenses accounted for 24.8% and 11.7% of our revenues for the three months ended September 30, 2026 and 2025, respectively. All of these expenses accounted for 23.1% and 14.2% of our revenues for the six months ended September 30, 2026 and 2025, respectively.
Taxation
Cayman Islands and British Virgin Islands
Under the current laws of the Cayman Islands and British Virgin Islands, we are not subject to tax on income or capital gains. Neither Cayman Islands nor British Virgin Islands withholding tax will be imposed upon payments of dividends to our shareholders.
Hong Kong
ZYSL, ZYCL and Winrich are incorporated in Hong Kong and is subject to Hong Kong Profits Tax on the taxable income as reported in its statutory financial statements adjusted in accordance with relevant Hong Kong tax laws. for the three months ended September 30, 2026 and 2025, Hong Kong profits tax is calculated in accordance with the two-tiered profits tax rates regime. The applicable tax rate for the first HKD 2 million of assessable profits is 8.25% and assessable profits above HKD 2 million will continue to be subject to the rate of 16.5% for corporations in Hong Kong, effective from the year of assessment 2018/2019. Before that, the applicable tax rate was 16.5% for corporations in Hong Kong. Under Hong Kong tax laws, ZYSL, ZYCL and Winrich are exempted from income tax on its foreign-derived income and there are no withholding taxes in Hong Kong on remittance of dividends.
Singapore
Top Fin and Top AM are incorporated in Singapore and are subject to Singapore Corporate Tax on the taxable income as reported in its statutory financial statements adjusted in accordance with relevant Singapore tax laws. Top Fin and Top AM are subject to a flat rate of 17%.
Australia
Top 500 is incorporated in Australia and are subject to Australia Corporate Tax on the taxable income as reported in its statutory financial statements adjusted in accordance with relevant Australian tax laws. Top 500 is subject to a reduced rate of 25% as a “small or medium business” company.
| 36 |
Results of Operations
The following table sets forth a summary of our consolidated results of operations for the three and six months ended September 30, 2026 and 2025 as indicated. This information should be read together with our consolidated financial statements and related notes included elsewhere in this prospectus. The operating results in any period are not necessarily indicative of the results that may be expected for any future trends.
For the three months ended September 30, 2026 and 2025
| For the Three Months Ended September 30, | ||||||||
| 2026 | 2025 | |||||||
| Revenues | ||||||||
| AI services | $ | 222,111 | $ | - | ||||
| Futures brokerage commissions | 138,687 | 630,497 | ||||||
| Virtual asset commissions | 27,922 | - | ||||||
| Trading solution service revenues | - | 110,000 | ||||||
| Interest income from loan business | 1,386,377 | 237,670 | ||||||
| Other service revenues | 318,903 | 115,508 | ||||||
| Trading gains | 66,091 | 331,608 | ||||||
| Interest income and other | 49,875 | 110,259 | ||||||
| Total revenues | 2,209,966 | 1,535,542 | ||||||
| Expenses | ||||||||
| Cost of AI services | 207,451 | - | ||||||
| Commission expenses | 154,308 | 458,157 | ||||||
| Compensation and benefits | 693,472 | 623,490 | ||||||
| Communications and technology | 94,910 | 121,908 | ||||||
| Occupancy | 237,251 | 47,653 | ||||||
| Travel and business development | 17,100 | 9,519 | ||||||
| Professional fees | 347,419 | 54,070 | ||||||
| Other administrative expenses | 183,709 | 116,197 | ||||||
| Total expenses | 1,935,620 | 1,430,994 | ||||||
| Income before income taxes | 274,346 | 104,548 | ||||||
| Income tax expenses | (83 | ) | - | |||||
| Net income | $ | 274,263 | $ | 104,548 | ||||
Revenues
Total revenues increased by US$0.7 million, or 43.9% from US$1.5 million in three months ended September 30, 2025 to US$2.2 million in the three months ended September 30, 2026. The increase was mainly driven by an increase of US$0.2 million in revenue from AI services, an increase of US$1.1 million in loan interest and an increase of US$0.2 million in other service revenues, partially offset by a decrease of US$0.5 million in futures brokerage commission, a decrease of US$0.1 million in trading solution service revenues and a decrease of US$0.3 million from trading gains.
AI services – We commenced AI services from August 2026. For the three months ended September 30, 2026, we entered into sales agreements with four customers and received top-up fees of US$2.7 million from these customers. For the three months ended September 30, 2026, we delivered AI services to one customer and generated revenues of US$0.2 million. We currently develop customers by referral, mainly from our shareholders and existing financial service customer base. We plan to place our business focus on AI services and expand our customer base from diversified channels. We expect an increase in revenue generated from AI service in the near future.
Futures brokerage commissions – Futures brokerage commissions decreased by US$0.5 million, or 78.0% from US$0.6 million for the three months ended September 30, 2025 to US$0.1 million for the three months ended September 30, 2026. The decrease in futures brokerage commissions was caused by a decrease in futures contract volume on our platform from 0.4 million contracts for the three months ended September 30, 2025 to 0.1 million contracts for the three months ended September 30, 2026. This decrease was partially offset by an increase in the average commission rate per trade, which rose from US$2.61 for the three months ended September 30, 2025 to US$3.19 for the same period in 2026.
| 37 |
Trading solution services fees – Trading solution service fees decreased by 100.0% from US$0.1 million for the three months ended September 30, 2025 to US$nil for the three months ended September 30, 2026. The decrease was mainly because of decreased service demand from our customers due to underperforming condition in Hong Kong stock market. For the three months ended September 30, 2026 and 2025, the Company generated revenues from provision of trading solution services to 0 and 5 customers, respectively.
Interest income from loan business – We recognized interest income from loan business, using straight-line method. For the three months ended September 30, 2026 and 2025, we recognized interest income of US$1.4 million and US$0.2 million from loan business, respectively. The increase in interest income is due to increase in outstanding weighted average loan balance during the three months ended September 30, 2026.
Other service revenues – Other service revenues increased by US$0.2 million in the three months ended September 30, 2026, as compared with that for the same period of 2025. The increase was primarily caused by an increase of securities brokerage of US$0.2 million.
Trading gains – We had trading gains of US$0.1 million for the three months ended September 30, 2026 as compared to trading gains of US$0.3 million in the three months ended September 30, 2025, which was mainly driven by the fluctuating market condition of the US stock market.
Interest income and other – We recognized interest income and other of US$49,875 and US$0.1 million for the three months ended September 30, 2026 and 2025, respectively. The decrease was primarily caused by a decrease of interest income earned from margin calls.
Expenses
Cost of AI services – Cost of AI services was incurred in connection with our delivery of AI services, which commenced in August 2026. For the three months ended September 30, 2026, we incurred cost of AI services of US$0.2 million.
Commission expenses – Commission expenses decreased from US$0.5 million for the three months ended September 30, 2025 to US$0.2 million for the three months ended September 30, 2026. The decrease in commission expenses was in line with the decrease in commission income for the three months ended September 30, 2026 and 2025.
Compensation and benefits – Compensation and benefits increased by 11.2% from US$0.6 million in the three months ended September 30, 2025 to US$0.7 million in the three months ended September 30, 2026, which was mainly caused by increase of headcount as we employed more staff in our Australia and Singapore offices.
Occupancy – Occupancy expenses increased by US$0.2 million from US$47,653 in the three months ended September 30, 2025 to US$0.2 million in the three months ended September 30, 2026. The increase was primarily because we relocated to a new office with higher rental fees.
Professional fees – Professional expenses increased by US$0.3 million, or 542.5% from US54,070 in the three months ended September 30, 2025 to US$0.3 million in the three months ended September 30, 2026. The increase was primarily because we incurred increased professional fees for legal services..
Other administrative expenses – Other administrative expenses increased by 58.1% from US$0.1 million in the three months ended September 30, 2025 to US$0.2 million in the three months ended September 30, 2026. The increase was primarily because we incurred increased administrative expenses for our new operating office.
Income before income taxes
We had an income before income taxes of US$0.3 million and US$0.1 million in the three months ended September 30, 2026 and 2025, respectively. Our operating margin was 12.4% and 6.8% in the three months ended September 30, 2026 and 2025, respectively.
| 38 |
Income tax benefits
We had income tax expenses of US$83 and US$nil for the three months ended September 30, 2026 and 2025, respectively. The increase in income tax expenses was primarily due to the onshore profit generated by ZYSL in the three months ended September 30, 2026.
Net income
As a result of the foregoing, we reported net income of US$0.3 million and US$0.1 million for the three months ended September 30, 2026 and 2025, respectively.
For the six months ended September 30, 2026 and 2025
| For the Six Months Ended September 30, | ||||||||
| 2026 | 2025 | |||||||
| Revenues | ||||||||
| AI services | $ | 222,111 | $ | - | ||||
| Futures brokerage commissions | 302,888 | 1,269,043 | ||||||
| Virtual asset commissions | 101,677 | - | ||||||
| Trading solution service revenues | - | 260,000 | ||||||
| Interest income from loan business | 1,802,516 | 474,719 | ||||||
| Other service revenues | 693,218 | 146,079 | ||||||
| Trading (losses) gains | (58,480 | ) | 510,903 | |||||
| Interest income and other | 222,736 | 208,191 | ||||||
| Total revenues | 3,286,666 | 2,868,935 | ||||||
| Expenses | ||||||||
| Cost of AI services | 207,451 | - | ||||||
| Commission expenses | 327,530 | 900,367 | ||||||
| Compensation and benefits | 1,264,569 | 1,057,496 | ||||||
| Communications and technology | 175,561 | 238,399 | ||||||
| Occupancy | 661,738 | 73,289 | ||||||
| Travel and business development | 30,687 | 12,682 | ||||||
| Professional fees | 434,828 | 101,328 | ||||||
| Other administrative expenses | 296,910 | 294,834 | ||||||
| Total expenses | 3,399,274 | 2,678,395 | ||||||
| (Loss) income before income taxes | (112,608 | ) | 190,540 | |||||
| Income tax benefits | 273,146 | - | ||||||
| Net income | $ | 160,538 | $ | 190,540 | ||||
Revenues
Total revenues increased by 14.6% from US$2.9 million in six months ended September 30, 2025 to US$3.3 million in the six months ended September 30, 2026. The increase was mainly driven by an increase of US$0.2 million in revenue from AI services, an increase of US$1.3 million in loan interest and an increase of US$0.5 million in other service revenues, partially offset by a decrease of US$1.0 million in futures brokerage commission, a decrease of US$0.3 million in trading solution service revenues and a change of US$0.6 million from trading gains to trading losses.
AI services – We commenced AI services from August 2026. For the six months ended September 30, 2026, we entered into sales agreements with four customers and received top-up fees of US$2.7 million from these customers. For the six months ended September 30, 2026, we delivered AI services to one customer and generated revenues of US$0.2 million.
| 39 |
Futures brokerage commissions – Futures brokerage commissions decreased by US$1.0 million, or 76.1% from US$1.3 million for the six months ended September 30, 2025 to US$0.3 million for the six months ended September 30, 2026. The decrease in futures brokerage commissions was caused by a decrease in futures contract volume on our platform from 0.8 million contracts for the six months ended September 30, 2025 to 0.22 million contracts for the six months ended September 30, 2026. This decrease was partially offset by an increase in the average commission rate per trade, which rose from US$1.6 for the six months ended September 30, 2025 to US$3.0 for the same period in 2026.
Virtual asset brokerage commissions – Virtual asset brokerage commissions was US$0.1 million and US$ nil for the six months ended September 30, 2026 and 2025, respectively. The increase in virtual asset brokerage commission was primarily because we just launched the business in the three months ended March 31, 2026.
Trading solution services fees – Trading solution service fees decreased by 100.0% from US$0.3 million for the six months ended September 30, 2025 to US$nil for the six months ended September 30, 2026. The decrease was mainly because of decreased service demand from our customers due to underperforming condition in Hong Kong stock market. For the six months ended September 30, 2026 and 2025, the Company generated revenues from provision of trading solution services to 0 and 5 customers, respectively.
Interest income from loan business – We recognized interest income from loan business, using straight-line method. For the six months ended September 30, 2026 and 2025, we recognized interest income of US$1.8 million and US$0.5 million from loan business, respectively. The increase in interest income is due to increase in outstanding weighted average loan balance during the six months ended September 30, 2026.
Other service revenues – Other service revenues increased by US$0.5 million in the six months ended September 30, 2026, as compared with that for the same period of 2025. The increase was primarily caused by an increase of securities brokerage of US$0.4 million.
Trading (loss) gains – We had trading losses of US$58,480 for the six months ended September 30, 2026 as compared to trading gains of US$0.5 million in the six months ended September 30, 2025, which was mainly driven by the fluctuating market condition of the US stock market.
Expenses
Cost of AI services – Cost of AI services was incurred in connection with our delivery of AI services, which commenced in August 2026. For the six months ended September 30, 2026, we incurred cost of AI services of US$0.2 million.
Commission expenses – Commission expenses decreased from US$0.9 million for the six months ended September 30, 2025 to US$0.3 million for the six months ended September 30, 2026. The decrease in commission expenses was in line with the decrease in commission income for the six months ended September 30, 2026 and 2025.
Compensation and benefits – Compensation and benefits increased by 19.6% from US$1.1 million in the six months ended September 30, 2025 to US$1.3 million in the six months ended September 30, 2026, which was mainly caused by increase of headcount as we employed more staff in our Australia and Singapore offices.
Occupancy – Occupancy expenses increased by US$0.6 million from US$73,289 in the six months ended September 30, 2025 to US$0.7 million in the six months ended September 30, 2026. The increase was primarily because we relocated to a new office with higher rental fees.
Professional fees – Professional expenses increased by US$0.3 million, or 329.1% from US0.1 million in the six months ended September 30, 2025 to US$0.4 million in the six months ended September 30, 2026. The increase was primarily because we incurred increased professional fees for legal services.
(Loss) income before income taxes
We had a loss before income taxes of US$0.1 million and an income before income taxes US$0.2 million in the six months ended September 30, 2026 and 2025, respectively. Our operating margin was negative 3.4% and 6.6% in the six months ended September 30, 2026 and 2025, respectively.
| 40 |
Income tax benefits
We had income tax benefits of US$0.3 million and US$nil for the six months ended September 30, 2026 and 2025, respectively. The increase in income tax benefits was primarily due to an increase in the onshore profit generated by ZYSL in the six months ended September 30, 2026.
Net income
As a result of the foregoing, we reported net income of US$0.2 million and US$0.2 million for the six months ended September 30, 2026 and 2025, respectively.
Discussion of Certain Balance Sheet Items
The following table sets forth selected information from our consolidated balance sheets As of September 30, 2026 and March 31, 2026. This information should be read together with our consolidated financial statements and related notes included elsewhere in this prospectus.
| As of | ||||||||
| September 30, 2026 | March 31, 2026 | |||||||
| (unaudited) | ||||||||
| Assets | ||||||||
| Cash and cash equivalents | $ | 8,898,412 | $ | 12,989,922 | ||||
| Restricted cash | 24,974,880 | 18,715,497 | ||||||
| Digital assets | 619,593 | - | ||||||
| Receivables from broker-dealers and clearing organizations | 25,654,395 | 32,535,854 | ||||||
| Receivables from customers | - | 1,668,312 | ||||||
| Prepayment | 2,430,149 | - | ||||||
| Loans receivable, net | 99,713,465 | 11,751,771 | ||||||
| Due from a related party | 234,158 | 232,565 | ||||||
| Securities owned, at fair value | 1,278,392 | 710,632 | ||||||
| Fixed assets, net | 1,007,162 | 1,114,541 | ||||||
| Intangible assets, net | 63,721 | 63,776 | ||||||
| Goodwill | 26,187 | 26,187 | ||||||
| Right-of-use assets | 1,242,855 | 1,557,438 | ||||||
| Long-term investments | 3,147,784 | 3,147,784 | ||||||
| Deposit for long-term investment | 1,400,800 | 600,000 | ||||||
| Other assets | 823,366 | 899,299 | ||||||
| Deferred tax assets | 43,531 | 43,365 | ||||||
| Total assets | $ | 171,558,850 | $ | 86,056,943 | ||||
| Liabilities | ||||||||
| Payable to customers | $ | 49,429,462 | $ | 48,850,774 | ||||
| Payable to customers – a related party | 9,418 | 8,570 | ||||||
| Contract liabilities | 2,477,889 | 53,255 | ||||||
| Income tax payable | 105,339 | 149,778 | ||||||
| Promissory notes payable | 637,211 | 637,755 | ||||||
| Accrued expenses and other liabilities | 312,882 | 527,484 | ||||||
| Lease liabilities | 1,273,825 | 1,584,183 | ||||||
| Total liabilities | $ | 54,246,026 | $ | 51,811,799 | ||||
Cash, cash equivalents and restricted cash
Cash and cash equivalents consist of funds deposited with banks, which are highly liquid and are unrestricted as to withdrawal or use. Restricted cash mainly represents the amount of cash deposited by our customers that has been segregated as obligated by the rules mandated by the primary regulators of our certain subsidiaries. A corresponding payable due to customers is recorded upon receipt of the cash from the customer.
The total balance of cash, cash equivalents and restricted cash increased from US$31.7 million as of March 31, 2026 to US$33.9 million as of September 30, 2026, primarily as a result of net cash of US$4.7 million provided by investing activities, partially offset by net cash of US$2.4 million used in operating activities.
| 41 |
Receivables from broker-dealers and clearing organizations
Receivables from broker-dealers and clearing organizations arise from the business of dealing in futures or investment securities. Broker-dealers will require balances to be placed with them in order to cover the positions taken by its customers, which are repayable on demand subsequent to settlement date. Clearing house receivables typically represent proceeds receivable on trades that have yet to settle and are usually collected within two days. Generally, our receivables from broker-dealers and clearing organizations change daily depending on various factors, including the trading volume in net buy/sell transactions, futures contracts, long/short position and frequency of transactions on each specific day. Our receivables from broker-dealers and clearing organizations decreased by 21.2% from US$32.5 million as of March 31, 2026 to US$25.7 million as of September 30, 2026, mainly due to such daily fluctuations.
Loans receivable
As of September 30, 2026 and March 31, 2026, loans receivable consisted for the following:
| As of | ||||||||
| September 30, 2026 | March 31, 2026 | |||||||
| Receivable due from customers holding US stocks or HK stocks (i) | $ | 5,973,984 | $ | 1,096,030 | ||||
| Less: allowance for expected credit loss on receivable due from customers holding US stocks or HK stocks | (505,948 | ) | (506,380 | ) | ||||
| Receivable due from customers holding US stocks or HK stocks, net | 5,468,036 | 589,650 | ||||||
| Loans receivable (ii) | 94,245,429 | 11,162,121 | ||||||
| Loan receivable, net | $ | 99,713,465 | $ | 11,751,771 | ||||
| (i) | The balance due from customers holding US stocks or HK stocks represented the purchase price of stock exceeding the deposits paid by customers which traded these US stocks or HK stocks through our platform. The US stocks and HK stocks were under custodian of us, and the customers shall fully pay the balance to us before they sold these stocks. For the three and six months ended September 30, 2026 and 2025, we did not provide expected credit loss against the receivables due from these customers. |
| (ii) | We disbursed loans to customers for a fixed period and charged interests from the customers. The principal and interest are repayable upon the maturity of the loans. For the three months ended September 30, 2026 and 2025, we recognized interest income of US$1.4 million and US$0.2 million from the loan business. For the six months ended September 30, 2026 and 2025, we recognized interest income of US$1.8 million and US$0.5 million from the loan business. As of September 30, 2026, the loans receivables were comprised of principal of US$92.4 million and interest of US$1.8 million, respectively. As of March 31, 2026, the loans receivables were comprised of principal of US$10.7 million and interest of US$0.4 million, respectively. |
Prepayment
As of September 30, 2026, the balance of prepayment represented advance to a supplier for procurement of API model for the AI services. The prepayment will be amortized to cost of revenues upon our consumption of AI models.
Securities owned, at fair value
Securities owned, at fair value, mainly represented investments in both US stocks, all of which are on S&P500 index, and in HK stocks.
Contract liabilities
As of September 30, 2026, the balance of contract liabilities represented advance from four customers as top-up payment for AI services. The contract liabilities will be recognized as revenue over period upon customers consumed AI models.
| 42 |
Payables to customers
Payables to customers represent payables related to the Company’s customer trading activities, which include the cash deposits received by the Company as requested by third party broker-dealers to place with them in order to cover the positions taken by its customers, clearing house payables due on pending trades and payable on demand, as well as the bank balances held on behalf of customers. Our payables to customers change daily depending on various factors, including the trading volume, net buy/sell transactions, futures contracts, long/short position and frequency of transactions on each specific day. The balances as of September 30, 2026 increased by US$0.6 million from US$48.9 million as of March 31, 2026, which was primarily due to higher customer futures margin requirements and trading volume, with a secondary contribution from a notable rise in securities trading activities during the period.
Liquidity and Capital Resources.
As of September 30, 2026, we had US$33.9 million in cash, cash equivalents and restricted cash, of which US$27.6 million was held in U.S. dollars and the rest was held in Hong Kong dollars and other currencies. Our cash, cash equivalents and restricted cash primarily consist of general bank balances and segregated clients’ bank account balances.
We believe that our current cash, cash equivalents and restricted cash, together with our anticipated cash flows from operations will be sufficient to meet our cash needs for general corporate purposes for at least the next 12 months. We may decide in the future to enhance our liquidity position or increase our cash reserves for future operations and investments through additional financing. The issuance and sale of additional equity would result in further dilution to our shareholders. The incurrence of indebtedness would result in increasing fixed obligations and could result in operating covenants that would restrict our operations.
Regulatory Capital Requirements
Subject to certain exemptions specified under the Securities and Futures (Financial Resources) Rules of Hong Kong (the “HK Financial Resources Rules”), two of our Hong Kong subsidiaries, ZYSL and ZYCL, are securities dealers and asset management companies registered with the Securities and Futures Commission of Hong Kong (the “HKSFC”), an independent statutory body set up in accordance with the Securities and Futures Ordinance of the law of Hong Kong, and thus are required to maintain minimum paid-up share capital and required liquid capital in accordance with the HK Financial Resources Rules. The following table sets forth a summary of the key requirements under the HK Financial Resources Rules that are applicable to ZYSL and ZYCL:
| Company | Type of regulated activities governed by the HKSFC | Minimum amount of paid-up capital | Required liquid capital | |||||||
| ZYSL | Type 1 and 2 | $ | 5,276,103 | $ | 382,326 | (i) | ||||
| ZYCL | Type 4, 5 and 9 | $ | 637,210 | $ | 382,326 | (i) | ||||
| (i) | for company licensed for any regulated activities other than Type 3 regulated activities, its variable required liquid capital, which means 5% of the aggregate of (a) its adjusted liabilities, (b) the aggregate of the initial margin requirements in respect of outstanding futures contracts and outstanding options contracts held by it on behalf of its clients, and (c) the aggregate of the amounts of margin required to be deposited in respect of outstanding futures contracts and outstanding options contracts held by it on behalf of its clients, to the extent that such contracts are not subject to the requirement of payment of initial margin requirements. |
| 43 |
As of September 30, 2026 and March 31, 2026, all of our operating subsidiaries were in compliance with their respective regulatory capital requirements.
Cash Flows
| For the Six Months Ended September 30, | ||||||||
| 2026 | 2025 | |||||||
| Net cash (used in) provided by operating activities | $ | (2,386,211 | ) | $ | 11,328,477 | |||
| Net cash provided by (used in) investing activities | 4,676,494 | (2,836,666 | ) | |||||
| Effect of exchange rates on cash, cash equivalents and restricted cash | (122,410 | ) | (94,272 | ) | ||||
| Net increase in cash, cash equivalents and restricted cash | 2,167,873 | 8,397,539 | ||||||
| Cash, cash equivalents and restricted cash, beginning of period | 31,705,419 | 15,174,936 | ||||||
| Cash, cash equivalents and restricted cash, end of period | $ | 33,873,292 | $ | 23,572,475 | ||||
Operating activities
Net cash used in operating activities for the six months ended September 30, 2026 was US$2.4 million, as compared to the net income of US$0.2 million. The difference was primarily attributable interest income from loan business of US$1.5 million and changes in operating assets and liabilities including (i) an increase of US$10.0 million in loans receivables due from third party customers we expanded our loan business in the six months ended September 30, 2026, (ii) a decrease of US$6.9 million in receivables from broker-dealers and clearing organizations, (iii) a decrease of US$1.7 million in receivable form customers due to collection, (iv) an increase of US$2.4 million in prepayment as we made advances to one supplier for procurement of API model, and (v) an increase of US$2.4 million in contract liabilities for advance from customers for AI services.
Net cash provided by operating activities in the six months ended September 30, 2025 was US$11.3 million, as compared to the net income of US$0.2 million. The difference was primarily attributable to changes in operating assets and liabilities including (i) an increase of US$8.6 million in receivables from broker-dealers and clearing organizations, and (ii) an increase of US$17.3 million in payables to customers because more customers placed deposits with the Company for higher trading volume.
Investing activities
Net cash provided by investing activities for the six months ended September 30, 2026 was US$4.7 million, which was comprised of proceeds of US$8.4 million from sales of digital assets and collection of loans of US$2.2 million from third party customers, partially offset by purchase of securities of US$0.2 million, deposit of long-term investment of US$0.8 million and advances of US$4.9 million to customers.
Net cash used in investing activities in six months ended September 30, 2025 was US$2.8 million, which was primarily comprised of disbursed loans of US$2.5 million to a related party customer, respectively, purchase of securities owned of US$0.3 million and investment of US$0.1 million in one equity investee, partially offset by proceeds of US$0.1 million from sales of securities owned.
Financing activities
We did not report cash flow provided by or used in financing activities for the six months ended September 30, 2026 and 2025.
| 44 |
Off-Balance Sheet Commitments and Arrangements
We have not entered into any derivative contracts that are indexed to our shares and classified as shareholders’ equity or that are not reflected in our consolidated financial statements. Moreover, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. We do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or product development services with us.
Research and Development, Patent and Licenses, etc.
Please refer to “Item 4. Information on the Company – D. Property, Plant and Equipment – Intellectual Property.”
Trend Information.
Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events that are reasonably likely to have a material effect on our net revenues, income from continuing operations, profitability, liquidity or capital resources, or that would cause reported financial information not necessarily to be indicative of future operating results or financial condition or results of operations.
Recent Accounting Pronouncements
A list of recently issued accounting pronouncements that are relevant to us is included in note 2 of the unaudited condensed consolidated financial statements included elsewhere in this report.
Holding Company Structure
TFGL is a holding company incorporated in the Cayman Islands with no material operations of its own. We conduct our operations primarily in Hong Kong through our subsidiaries in Hong Kong.
As a result, TFGL’s ability to pay dividends may depend upon dividends paid by our Hong Kong subsidiaries. If our existing Hong Kong subsidiaries or any newly formed ones incur debt on their own behalf in the future, the instruments governing their debt may restrict their ability to pay dividends to us.
Inflation
Inflation in Hong Kong has not materially affected our results of operations in recent years. According to the Census and Statistics Department of Hong Kong, the year-over-year percent changes in the consumer price index was an increase of 1.7% and 1.5% for fiscal six months ended September 30, 2026 and 2025, respectively. Although we have not been affected by inflation in the past, we may be affected if Hong Kong and any other jurisdiction where we operate in the future experience higher rates of inflation in the future.
| 45 |
Item 3 - Quantitative and Qualitative Disclosures About Market Risk
Not applicable.
Item 4 - Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Co-Chief Executive Officers and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of September 30, 2026. Based on that evaluation, and in light of the material weaknesses in our internal control over financial reporting described below, our Co-Chief Executive Officers and Chief Financial Officer concluded that, as of September 30, 2026, our disclosure controls and procedures were not effective. As previously disclosed in our Annual Report on Form 10-K for the fiscal year ended March 31, 2026 (the “Form 10-K”), the material weaknesses identified relate to (i) our lack of sufficient financial reporting and accounting personnel with appropriate knowledge of U.S. GAAP and SEC reporting requirements to properly address complex U.S. GAAP accounting issues and to prepare and review our consolidated financial statements and related disclosures, and (ii) our lack of formal policies and procedures for the current expected credit loss (“CECL”) process, including insufficient estimation and review processes, inadequate support for key assumptions and documentation, and deficiencies in quantitative factor adjustments. These material weaknesses have not been remediated as of September 30, 2026. Notwithstanding the identified material weaknesses, management believes that the unaudited condensed consolidated financial statements included in this report fairly present, in all material respects, our financial condition, results of operations and cash flows for the periods presented, in conformity with U.S. GAAP. We are implementing, and will continue to implement, measures to remediate the material weaknesses, including: (i) engaging an experienced financial consultant to work closely with our internal finance team in preparing our financial statements and related disclosures in accordance with U.S. GAAP; (ii) additional U.S. GAAP training for our Chief Financial Officer through self-study and webinar courses, together with periodic review of major accounting literature updates; (iii) conducting regular and continuous U.S. GAAP training programs and webinars for our financial reporting and accounting personnel; and (iv) improving our financial oversight function for handling complex accounting issues under U.S. GAAP. We cannot assure you that these measures will fully remediate the material weaknesses, and we may identify additional material weaknesses or significant deficiencies in the future.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended September 30, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
| 46 |
Part II - Other Information
Item 1 - Legal Proceedings
We are currently not a party to any material legal or administrative proceedings, and we are not aware of any events that are likely to lead to any such proceedings. We may from time to time be subject to various legal or administrative claims and proceedings arising in the ordinary course of business.
Item 1A - Risk Factors
“Part I, Item 1A - Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended March 31, 2026 includes a discussion of significant factors known to us that could materially adversely affect our business, financial condition, or results of operations. There have been no material changes from the risk factors described in the Form 10-K.
Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds
On July 9, 2026, the Company completed the closing of the private placement contemplated by the Securities Purchase Agreement, dated March 25, 2026, as supplemented on May 5, 2026, with certain non-U.S. investors, and issued 42,886,244 Class A Ordinary Shares and warrants to purchase up to 85,772,489 Class A Ordinary Shares (214,431,222 Class A Ordinary Shares and warrants to purchase up to 428,862,444 Class A Ordinary Shares, respectively, prior to giving effect to the Share Consolidation at a ratio of 5-for-1 on August 3, 2026), for aggregate gross proceeds of US$80,000,000, in reliance on the exemption from registration provided by Regulation S under the Securities Act of 1933, as amended (the “Securities Act”). On July 19, 2026, the Company entered into Warrant Amendment Agreements with the holders of the warrants and, on the same date, all holders exercised their warrants in full on a cashless basis. On July 20, 2026, the Company issued 72,106,886 Class A Ordinary Shares (360,534,431 Class A Ordinary Shares prior to giving effect to the Share Consolidation at a ratio of 5-for-1 on August 3, 2026) upon such exercise in reliance on the exemptions from registration provided by Section 3(a)(9) and Section 4(a)(2) of the Securities Act. These transactions were previously reported in the Company’s Current Reports on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) on July 13, 2026 and July 20, 2026, respectively.
Item 3 - Defaults Upon Senior Securities
None.
Item 4 - Mine Safety Disclosures
Not applicable.
Item 5 - Other Information
During the fiscal quarter ended September 30, 2026, no director or officer of the Company
Outstanding Shares and Public Float
As of October 13, 2026, the Company had a total of 123,706,506 ordinary shares outstanding, consisting of 121,706,506 Class A Ordinary Shares and 2,000,000 Class B Ordinary Shares (after giving effect to share consolidation at a ratio of 5-for-1 on August 3, 2026). Of the outstanding Class A Ordinary Shares, 100,867,842 Class A Ordinary Shares were non-restricted shares held by non-affiliates, representing the Company’s free public float, and 20,838,664 Class A Ordinary Shares were restricted securities or were held by affiliates of the Company. All of the outstanding Class B Ordinary Shares are held by Ms. Junli Yang, the Chairwoman of the Company’s board of directors.
| 47 |
Item 6 - Exhibits
| * | Filed herewith |
| ** | Furnished herewith |
| † | Indicates management contract or compensatory plan or arrangement. |
Attached as Exhibit 101 to this report are the following formatted in Inline XBRL (Extensible Business Reporting Language): (i) Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and six months ended September 30, 2026 and 2025, (ii) Condensed Consolidated Balance Sheets as of September 30, 2026 and March 31, 2026, (iii) Condensed Consolidated Statements of Cash Flows for the six months ended September 30, 2026 and 2025, (iv) Condensed Consolidated Statements of Changes in Shareholders’ Equity for the three and six months ended September 30, 2026 and 2025 and (v) Notes to Condensed Consolidated Financial Statements.
| 48 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| TOP FINANCIAL GROUP LIMITED | ||
| Dated: October 28, 2026 | By. | /s/ Ka Fai Yuen |
| Ka Fai Yuen | ||
| Co-Chief Executive Officer (Principal Executive Officer) | ||
| Dated: October 28, 2026 | By. | /s/ Hoi Ling Jennifer Tam |
| Hoi Ling Jennifer Tam | ||
| Co-Chief Executive Officer (Principal Executive Officer) | ||
| Dated: October 28, 2026 | By. | /s/ Yung Yung Lo |
| Yung Yung Lo | ||
| Chief Financial Officer (Principal Financial and Accounting Officer) | ||
| 49 |