EX-99.1 2 ea020280901ex99-1_garden.htm GARDEN STAGE LIMITED ANNOUNCES FINANCIAL RESULTS FOR THE FIRST HALF OF FISCAL YEAR 2024

Exhibit 99.1

 

Garden Stage Limited Announces Financial Results for the First Half of Fiscal Year 2024

 

Garden Stage Limited (“GSL” or the “Company”) (Nasdaq: GSIW) is an offshore holding company incorporated in the Cayman Islands with no material operations of its own. Through its Hong Kong operating entities, the Company engaged in providing securities brokerage, underwriting and placement, and other financial services to a wide range of customers in Hong Kong. The Company today announced its unaudited financial results for the six months ended September 30, 2023 (“First Half 2024”).

 

First Half of Fiscal Year 2024 Financial Results

 

   For the Six Months Ended September 30, 
Selected Unaudited Interim Condensed Consolidated Statements of Income Data: 

2023

USD

  

2022

USD

  

Change

%

 
Revenues   750,626    1,180,102    (36.39)
Expenses   (1,490,632)   (1,742,855)   (14.47)
Loss before income taxes   (740,006)   (562,753)   31.50 
Income tax (expense) benefits   (11,654)   171    6,915.20 
Net loss   (751,660)   (562,582)   33.61 
Loss per share – basic and diluted   0.06    0.05    20.00 

 

Revenues

 

Revenues decreased by 36.39% from $1,180,102 for the six months ended September 30, 2022 to $750,626 for the six months ended September 30, 2023. The decrease was primarily due to decrease in our brokerage commissions, underwriting and placement income, introducing and referral income, investment management fee income, and interest income and others, and partially offset by the increase in our advisory fees and handling income.

 

●Revenues from brokerage commissions was $159,389 in the six months ended September 30, 2023, compared to $422,326 in the six months ended September 30, 2022. This decrease was primarily attributed to reduced demand for securities brokerage activities in the United States market, resulting in a drop in trading volume on the exchanges in the United States during the six months ended September 30, 2023.
   
●Revenues from underwriting and placement income was $39,765 in the six months ended September 30, 2023, compared to $414,657 in the six months ended September 30, 2022. The decrease was primarily due to the Company engaging in fewer underwriting and placement activities.
   
●Revenues from introducing and referral income was $159,129 in the six months ended September 30, 2023, compared to $224,865 in the six months ended September 30, 2022. The decrease was primarily attributed to the Company facilitating a significant block trade transaction during the six months ending September 30, 2022, which contributed revenue of $189,813. In contrast, only smaller transactions were facilitated in six months ended September 30, 2023.
   
●Revenues from investment management fee income was $nil in the six months ended September 30, 2023, compared to $20,746 in the six months ended September 30, 2022. The decrease was primarily due to the full redemption of the fund managed by the Company in February 2023.
   
●Revenues from interest income and others was $25,212 in the six months ended September 30, 2023, compared to $79,385 in the six months ended September 30, 2022. The decrease was primarily due to a decrease in government subsidies, which were one-off entitlement granted by the Hong Kong Government under the Employment Support Scheme of the Anti-epidemic Fund amid the outbreak of COVID-19.
   
●Revenues from advisory fees was $321,558 in the six months ended September 30, 2023, compared to $nil in the six months ended September 30, 2022. The increase was primarily due to the Company providing a new type of service for investment advisory during the six months ended September 30, 2023.
   
●Revenues from handling income was $45,573 in the six months ended September 30, 2023, compared to $18,123 in the six months ended September 30, 2022. The increase was primarily due to the Company being more actively engaged in transferring the physical shares held by customer to CCASS for custodian services.

 

Expenses

 

Our total expenses decreased by $252,233, or 14.47%, from $1,742,855 for the six months ended September 30, 2022 to $1,490,632 for the six months ended September 30, 2023. This decrease was mainly attributable to (i) a decrease of approximately $0.3 million in compensation and benefits, (ii) a decrease of approximately $0.1 million in professional fees, and (iii) an increase of approximately $0.2 million in travel and business development.

 

The decrease in compensation and benefits in this period was due to a reduction in the average number of staff from 18 in the six months ended September 30, 2022 to 13 in the six months ended September 30, 2023.

 

The decrease in professional fees was attributable to a reduction in the fees previously associated with the set-up and annual charges related to a fund managed by the Company under its investment management business.

 

The increase in travel and business development expenses during this period was due to heightened activities in business development.

 

 

 

 

Income tax (expense) benefits

 

Our income tax expense changed from $171 benefits for the six months ended September 30, 2022 to $11,654 expense for the six months ended September 30, 2023. The change was primarily due to an increase in current tax expenses related to the profits generated by a subsidiary in Hong Kong as such taxable profits could not be offset by losses generated by other subsidiaries of the Company.

 

Net loss

 

Our net loss increased by $189,078, or 33.61%, from $562,582 for the six months ended September 30, 2022 to $751,660 for the six months ended September 30, 2023. Such change was the result of the combination of the changes as discussed above.

 

Cash Flow

 

Net cash provided by operating activities was $203,660 in the six months ended September 30, 2023, compared to $3,985,064 in the six months ended September 30, 2022. This decrease was mainly due to a reduction in payables to customers, significantly impacted by our customers’ fund allocation preferences on one specific date whereas on September 30, 2023, our customers left less cash with us in the designed accounts for their securities brokerage transactions.

 

Net cash used in investing activities was $nil in the six months ended September 30, 2023, compared to net cash used in investing activities of $22,171 in the six months ended September 30, 2022. This was due to no purchase of property and equipment during the period ended September 30, 2023.

 

Net cash used in financing activities was $249,246 in the six months ended September 30, 2023, compared to net cash provided by financing activities of $628,281 in the six months ended September 30, 2022. This change was primarily due to the receipt of deposits totaling $795,187 in the six months ending September 30, 2022, for subscribed shares related to the allotment of ordinary shares, an event that did not recur in the six months ending September 30, 2023. Additionally, the change was influenced by ongoing payments for financing costs associated with the IPO, which amounted to $249,246 in the period ending September 30, 2023, compared to $166,906 in the same period of 2022.

 

Recent Events

 

On December 1, 2023, the Company closed its initial public offering (the “IPO”) of 2,500,000 ordinary shares, par value $0.0001 per share (the “Ordinary Shares”). The Ordinary Shares were priced at $4.00 per share. The Ordinary Shares were previously approved for listing on The Nasdaq Capital Market and commenced trading under the ticker symbol “GSIW” on December 1, 2023.

 

About Garden Stage Limited

 

The Company is an offshore holding company incorporated in the Cayman Islands with no material operations of its own. Through its Hong Kong operating entities, the Company engaged in providing securities brokerage, underwriting and placement, and other financial services to a wide range of customers in Hong Kong. For more information, please visit the Company’s website at http://www.gardenstage-ky.com/.

 

Forward-Looking Statements

 

All statements other than statements of historical fact in this announcement are forward-looking statements, within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements involve known and unknown risks and uncertainties and are based on current expectations and projections about future events and financial trends that the Company believes may affect its financial condition, results of operations, business strategy, and financial needs. Investors can identify these forward-looking statements by words or phrases such as “may,” “will,” “expect,” “anticipate,” “aim,” “estimate,” “intend,” “plan,” “believe,” “potential,” “continue,” “is/are likely to,” or other similar expressions. The Company undertakes no obligation to update forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and the Company cautions investors that actual results may differ materially from the anticipated results and encourages investors to review other factors that may affect its future results in the Company’s registration statement and in its other filings with the SEC.

 

For more information, please contact:

 

Garden Stage Limited

Phone: +852 2688 6333
Email: cs@iwinsec.com 

 

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GARDEN STAGE LIMITED
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)

 

   September 30,
2023		   March 31,
2023		 
Assets        
Current Assets        
Cash  $676,873   $828,689 
Restricted cash   5,609,945    5,488,511 
Receivables from broker-dealers and clearing organizations   396,042    4,607,918 
Receivables from customers   237,472    1,505,627 
Receivables from customers-related parties   —    1,219 
Other assets, current   319,614    71,893 
Total current assets   7,239,946    12,503,857 
           
Operating lease right-of-use assets   28,645    62,868 
Deferred tax assets, net   434    163 
Property and equipment, net   23,478    28,188 
Intangible assets   63,848    63,694 
Deferred initial public offering (“IPO”) costs   693,132    442,762 
Other assets, non-current   29,370    29,299 
Total assets   8,078,853    13,130,831 
           
Liabilities and shareholders’ equity          
           
Liabilities          
Current liabilities          
Payables to customers  $5,776,417   $8,135,442 
Payables to customers-related parties   204,226    123,144 
Payables to broker-dealers and clearing organizations   44,758    2,030,523 
Amounts due to related parties   7,114    7,097 
Income tax payable   11,928    — 
Operating lease liabilities, current   31,903    69,584 
Accrued expenses and other liabilities   5,827    23,132 
Subscribed shares deposit liabilities   —    794,903 
Total current liabilities   6,082,173    11,183,825 
           
Total liabilities   6,082,173    11,183,825 
Commitments and contingencies          
Shareholders’ equity          
           
Ordinary shares, $0.0001 par value, 500,000,000 shares authorized; 12,750,000 shares issued and outstanding as of September 30, 2023 11,475,000 shares issued and outstanding as of March 31, 2023*   1,275    1,148 
Additional paid-in capital   2,819,098    2,024,327 
Accumulated deficit   (831,155)   (79,495)
Accumulated other comprehensive income   7,462    1,026 
Total shareholders’ equity   1,996,680    1,947,006 
Total liabilities and shareholders’ equity  $8,078,853   $13,130,831 

 

 

*Shares and per share data are presented on a retroactive basis to reflect the ordinary shares issuance and share split.

 

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GARDEN STAGE LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE LOSS
(Unaudited)

 

  

For the Six Months Ended

September 30,

 
   2023   2022 
Revenues        
Advisory fees  $321,558   $— 
Brokerage commissions   158,209    351,139 
Brokerage commissions-related parties   1,180    71,187 
Underwriting and placement income   39,765    414,657 
Introducing and referral income   159,129    224,865 
Handling income   43,516    18,123 
Handling income-related parties   2,057    — 
Investment management fee income   —    18,658 
Investment management fee income-related parties   —    2,088 
Interest income and others   24,141    73,643 
Interest income and others-related parties   1,071    5,742 
Total revenues   750,626    1,180,102 
           
Expenses          
Brokerage, clearing and exchange fees   22,524    40,772 
Compensation and benefits   757,189    1,060,491 
Communications and technology   65,586    62,117 
Deprecation   4,776    5,131 
Occupancy costs   40,967    44,162 
Professional fees   239,733    349,550 
Travel and business development   314,890    135,176 
Other administrative expenses   44,967    45,456 
Total expenses   1,490,632    1,742,855 
           
Loss before income taxes   (740,006)   (562,753)
Income tax (expense) benefits   (11,654)   171 
Net loss   (751,660)   (562,582)
           
Other comprehensive income (loss)          
Foreign currency translation adjustments   6,436    (89)
Total comprehensive loss  $(745,224)  $(562,671)
           
Loss per share:          
Basic and diluted  $0.06   $0.05 
           
Weighted average number of ordinary shares outstanding:          
Ordinary shares – Basic and diluted   12,618,552    11,475,000 

 

 

*Shares and per share data are presented on a retroactive basis to reflect the ordinary shares issuance and share split.

 

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GARDEN STAGE LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited)

 

Six months ended September 30, 2022

 

  

Ordinary Shares,

No par value

       Retained earnings   Accumulated
other		     
  

 Number

issued

  

 

Amount

  

Subscription

receivables

  

(Accumulated

deficit)

  

comprehensive

income

  

 

Total

 
Balance at March 31, 2022   11,475,000   $1,148   $(1,148)  $127,674   $1,028   $128,702 
Net loss   —    —    —    (562,582)   —    (562,582)
Foreign currency translation adjustments   —    —    —    —    (89)   (89)
Balance at September 30, 2022   11,475,000   $1,148   $(1,148)  $(434,908)  $939   $(433,969)

 

Six months ended September 30, 2023

 

   Ordinary shares  

 

Additional

   Retained
earnings		   Accumulated
other		     
  

Number

issued

  

 

Amount

  

paid-in

capital

   (Accumulated
deficit)		  

comprehensive

income

  

 

Total

 
Balance at March 31, 2023   11,475,000   $1,148   $2,024,327   $(79,495)  $1,026   $1,947,006 
Issuance of ordinary shares   1,275,000    127    794,771    —    —    794,898 
Net loss   —    —    —    (751,660)   —    (751,660)
Foreign currency translation adjustments   —    —    —    —    6,436    6,436 
Balance at September 30, 2023   12,750,000   $1,275   $2,819,098   $(831,155)  $7,462   $1,996,680 

 

 

*Shares and per share data are presented on a retroactive basis to reflect the ordinary shares issuance and share split

 

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GARDEN STAGE LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

  

   For the Six Months Ended
September 30,		 
   2023   2022 
Cash flows from operating activities:        
Net loss  $(751,660)  $(562,582)
Adjustments to reconcile net loss to net cash used in operating activities:          
Depreciation   4,776    5,131 
Amortization of operating lease right-of-use assets and interest of lease liabilities   34,961    35,751 
Deferred tax benefits   (271)   (171)
Change in operating assets and liabilities:          
Receivables from broker-dealers and clearing organizations   4,222,005    (180,720)
Receivables from customers   1,272,712    375,930 
Other assets   (247,491)   (4,043)
Payables to customers   (2,297,307)   4,513,081 
Payables to broker-dealers and clearing organizations   (1,990,199)   (105,413)
Operating lease liabilities   (38,435)   (38,365)
Income tax payable   11,925    — 
Accrued expenses and other liabilities   (17,356)   (53,535)
Net cash provided by operating activities   203,660    3,985,064 
           
Cash flows from investing activities:          
Purchases of property and equipment   —    (22,171)
Net cash used in investing activities   —    (22,171)
           
Cash flows from financing activities:          
Payments of offering costs related to IPO   (249,246)   (166,906)
Deposits received related to subscribed shares   —    795,187 
Net cash (used in) provided by financing activities   (249,246)   628,281 
           
Effect of exchange rate changes on cash and restricted cash   15,205    (19,109)
Net (decrease) increase in cash and restricted cash   (30,381)   4,572,065 
Cash and restricted cash, beginning of year   6,317,200    7,842,802 
Cash and restricted cash, end of year   6,286,819    12,414,867 
           
Reconciliation of cash and restricted cash to the consolidated balance sheets          
Cash  $676,874    1,620,180 
Restricted cash   5,609,945    10,794,687 
Total cash and restricted cash  $6,286,819    12,414,867 

 

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