Solowin Holdings, Ltd.

Solowin Holdings is an exempted limited liability company incorporated in the Cayman Islands, operating primarily through its wholly-owned Hong Kong subsidiaries, Solomon JFZ and Solomon Wealth ¹. The company functions as a holding company with no material operations of its own ². Solomon JFZ is a versatile securities brokerage company in Hong Kong, focusing on Chinese investors and offering a wide range of products and services from traditional to virtual assets via its electronic platform, Solomon VA+ ³. The company's core business model revolves around generating revenue from four reorganized segments: Corporate Finance Services, Wealth Management Services, Asset Management Services, and Virtual Assets Services ⁴. Revenue is derived from various fees including brokerage commissions, investment advisory fees, corporate consultancy income, asset management fees (management and performance fees), virtual asset transaction income, and interest income ⁵. The company serves mostly Chinese investors residing in Asia, as well as institutional clients in Hong Kong, Australia, and New Zealand ⁶. As of March 31, 2025, Solowin had over 15,600 clients who had opened trading accounts and more than 1,200 active clients with assets in their accounts ⁷.

The Corporate Finance Services segment, rebranded from "Corporate Consultancy Services," offers underwriting, private placement, and investment advisory solutions, including capital raising, debt financing, secondary offerings, and financial advisory services ⁸. This segment accounted for 36% of consolidated revenues for the fiscal year ended March 31, 2025 ⁹. The Wealth Management Services segment, formed by combining "Securities Related Services" and "Investment Advisory Services," provides brokerage services and integrated investment solutions, including advisory for high-net-worth individuals and institutional investors ¹⁰. This segment contributed 40% of consolidated revenues for the fiscal year ended March 31, 2025 ¹¹.

The Asset Management Services segment offers investment fund products managed by professional portfolio managers, generating management and performance-based income, and also provides managed account services ¹². This segment accounted for 23% of consolidated revenues for the fiscal year ended March 31, 2025 ¹³. The newly introduced Virtual Assets Services segment provides secure and innovative solutions in the virtual asset space, including trading, spot ETF creation and redemption, security token offerings, and blockchain solutions like real-world asset tokenization ¹⁴. This segment accounted for 1% of consolidated revenues for the fiscal year ended March 31, 2025 ¹⁵.

For the fiscal year ended March 31, 2025, total revenue was $2,819,000 ¹⁶, a decrease of $1,472,000 or 34% from $4,291,000 in the prior fiscal year ¹⁷. The company reported a net loss of $8,538,000 ¹⁸ for the fiscal year ended March 31, 2025, compared to a net loss of $4,556,000 ¹⁹ for the fiscal year ended March 31, 2024. Basic and diluted net loss per share increased to $0.53 ²⁰ for the fiscal year ended March 31, 2025, from $0.33 ²¹ in the prior year. Total expenses increased by $2,230,000 or 26% to $10,951,000 ²² for the fiscal year ended March 31, 2025, from $8,721,000 ²³ in the prior year. Cash and cash equivalents increased to $3.84 million ²⁴ as of March 31, 2025, from $2.14 million ²⁵ as of March 31, 2024. The filing does not provide specific figures for gross profit, gross margin percentage, operating income, operating margin, free cash flow, total debt, or net debt.

Year-over-year, revenue from investment advisory fees decreased by $1,835,000 or 64% to $1,025,000 ²⁶ for the fiscal year ended March 31, 2025, primarily due to a reduced client base and decreased demand for value-added services from institutional clients ²⁷. Conversely, corporate consultancy service income increased by $879,000 or 733% to $999,000 ²⁸, driven by new client acquisitions and interest from corporate clients seeking U.S. market listings ²⁹. Asset management income decreased by $216,000 or 25% to $655,000 ³⁰, mainly due to reduced performance fees from Solomon Capital Fund SPC - Solomon Capital SP2 ³¹. Virtual assets transaction income of $15,000 ³² was first recognized in fiscal year 2025, reflecting the launch and adoption of these new services ³³. Referral income was $0 ³⁴ in fiscal year 2025, down from $261,000 ³⁵ in fiscal year 2024. Employee benefits expenses decreased by $2,753,000 or 55% to $2,290,000 ³⁶ due to the absence of share rewards issued to employees in fiscal year 2025, unlike the 1,500,000 ordinary shares issued in fiscal year 2024 ³⁷. General and administrative expenses increased by $5,801,000 or 308% to $7,683,000 ³⁸, largely due to share-based compensation of $3,312,000 ³⁹ for a consultant, professional fees for a proposed follow-on offering, and increased office lease expenses ⁴⁰. A reversal of provision for expected credit losses of $502,000 ⁴¹ was recorded in fiscal year 2025, compared to a provision of $854,000 ⁴² in fiscal year 2024, reflecting improved recoverability of loan receivables ⁴³.

During the fiscal year ended March 31, 2025, Solomon JFZ was approved by the HKSFC to provide virtual asset dealing and advisory services, becoming one of the initial HKSFC-approved licensed companies to offer these services to retail investors ⁴⁴. On April 16, 2024, Solomon JFZ was selected as one of three participating dealers for Harvest Global's spot Bitcoin and Ethereum ETF in Hong Kong ⁴⁵. On April 26, 2024, the company strengthened its partnership with OSL Digital Securities to facilitate in-kind subscription and redemption processes for spot virtual asset ETFs ⁴⁶. On May 28, 2024, a strategic partnership with MaiCapital Limited was announced to expand virtual asset allocation opportunities ⁴⁷. The company launched Solomon VA+, an institutional-grade all-in-one smart trading app, on July 16, 2024, integrating traditional and virtual asset trading with wealth management services ⁴⁸. On December 26, 2024, the company partnered with China AMC (HK), HSBC, Hang Seng Bank, OSL exchanges, and Fosun Wealth Holdings to participate in the HKMA's Project Ensemble Sandbox, exploring tokenized currencies and assets ⁴⁹. On March 12, 2025, Solomon Wealth acquired Solomon Global Asset Management Limited, which manages Solowin Digital Horizon SP, a Cayman-domiciled tokenized fund ⁵⁰. In June 2025, Solowin acquired a 48% equity interest in Tiger Coin (Hong Kong) Limited for $7,500,000 ⁵¹, satisfied by the issuance of 7,500,000 Class A Ordinary Shares ⁵².

The company anticipates continued growth in demand for online brokerage services among Chinese investors, driven by an increasing desire for globally diversified asset allocation and enhanced online broker functionality. Solowin's objective is to establish a dominant position in the Hong Kong securities brokerage industry and capitalize on its growth potential. The company plans to expand its customer base, increase trading volume, provide 24/7 access to more equities and derivative products globally, and improve its technology and social networking capabilities via the Solomon VA+ platform. Additionally, Solowin aims to consolidate Solomon JFZ's market position in Hong Kong, strengthen its competitive edge, and enhance corporate consultancy services for institutional clients, including listed firms or potential listing candidates. Through these strategies, Solomon JFZ expects to offer retail clients a wider variety of IPO placing and underwriting services and provide investment advisory and asset management services to help clients achieve long-term investment returns and global diversification.

To achieve its growth objectives, Solowin intends to grow its client base and enhance its brand through regulated and compliant solutions, leveraging its licensed platform for secure access to traditional and virtual asset investments. The company is fully compliant with regulatory requirements and committed to high security standards. Solowin also plans to strengthen its technological infrastructure by developing Solomon JFZ's infrastructure and integrating other brokers' trading systems via Application Programming Interface (API). This improved infrastructure will enable Solomon JFZ to provide customized Business-to-Business (B2B) solutions to institutional clients and specialize in agency brokerage, wealth management, private client, and retail brokerage divisions of regulated brokers in AML-compliant nations such as the United Kingdom, New Zealand, and Australia. The company aims to optimize Solomon JFZ's trading system, increase system concurrent accesses, improve stability and security, and enhance execution and order matching speed.

Solowin plans to attract and build a strong team of key talent, recognizing employees as critical to continued growth. Solomon JFZ aims to be a full-service financial services provider, requiring experts in securities dealing, corporate finance, investment advisory, and asset management. Solomon Wealth seeks to be a high-performance wealth management advisor, necessitating experienced professionals to establish and grow its services. The company strives to attract and retain skilled individuals by offering competitive compensation packages, including an equity incentive plan. Solowin also intends to enlarge its market share by expanding its product offerings, targeting to apply for a Type 2 license (Dealing in Futures Contracts) with the HKSFC to provide future contracts trading services via the Solomon VA+ platform. Furthermore, the company aims to develop virtual asset management services by upgrading its current Type 9 license.

The company plans to leverage its competitive edge by strengthening strategic partnerships. Collaborations with partners such as OSL, MaiCapital, China AMC, and Harvest Global are expected to showcase its unique advantages, tap into a wider pool of potential customers, and increase brand awareness. These partnerships underscore the company's commitment to offering regulated and high-quality comprehensive products to clients. Solowin plans to explore the development of additional compliant tokenized Money Market Fund (MMF) products, consider partnerships with blockchain providers like Securitize, and target institutional clients for innovative treasury solutions, building on its role in distributing the ChinaAMC fund. Integrating these funds into DeFi protocols for enhanced yields presents additional opportunities.

The company believes that its current levels of cash and cash flows from operations will be sufficient to meet its anticipated cash needs for operations and expansion plans for at least the next 12 months. However, it acknowledges that additional cash resources may be required in the future due to changing business conditions, business expansion, or potential investments or acquisitions. If internal financial resources are insufficient, the company may seek to sell additional equity or debt securities or obtain additional credit facilities. The company did not incur any capital expenditure for the fiscal years ended March 31, 2025, 2024, and 2023, but plans to make capital expenditures in the future to meet the needs resulting from expected business growth. For the years ended March 31, 2025, 2024, and 2023, the company invested approximately $0.46 million ⁵³, $0.4 million ⁵⁴, and $0.31 million ⁵⁵, respectively, in research and development.

Solowin faces several material risks, including a significant reduction in profitability due to decreases in certain revenue types and increased expenses, as evidenced by a total revenue decrease of 34% to $2,819,000 ¹⁶ for the fiscal year ended March 31, 2025, and a net loss of $8,538,000 ¹⁸. The company is highly dependent on external service providers for technology, processing, and supporting functions, and any failure by these providers could adversely affect its business and reputation. Operating in a heavily regulated Hong Kong securities brokerage industry, Solowin is subject to extensive and evolving regulatory requirements, with potential risks of non-compliance leading to sanctions, fines, or license revocations. A significant portion of revenue is derived from a small number of key clients, with the top five customers contributing 81% ⁵⁶ of total revenues for the fiscal year ended March 31, 2025, making the company vulnerable to fluctuations in their trading volumes or termination of relationships. The company's IT systems are critical, and failures could lead to service interruptions, disruptions, reputational damage, and losses. Solowin is also exposed to cyber-attacks, computer viruses, and physical or electronic break-ins, particularly given its handling of personal and sensitive data.

Geopolitical and regulatory risks are significant, as substantially all operations are in Hong Kong, and a majority of clients are PRC residents, potentially subjecting the company to evolving and uncertain PRC laws and regulations, including those related to cybersecurity, data protection, and overseas offerings. The PRC government could intervene or impose restrictions on HK Subsidiaries' ability to move cash out of Hong Kong to distribute earnings and pay dividends to Solowin or U.S. investors. PRC governmental control of currency conversion and cross-border remittance, particularly the $50,000 ⁵⁷ annual Renminbi-to-foreign-currency conversion limit for personal use, could directly impact trading volume on the platform, and the company's practices may be deemed in violation of PRC laws. Regulatory divergence between Hong Kong and Mainland China regarding virtual assets poses additional risks, as Mainland China prohibits virtual asset business activities while Hong Kong has a more permissive framework. The company's Class A Ordinary Shares may be prohibited from trading in the United States under the HFCA Act if its auditor is not subject to PCAOB inspections for two consecutive years ⁵⁸. Furthermore, the dual-class voting structure concentrates voting control in Class B Ordinary Shareholders, who collectively hold approximately 62.1% ⁵⁹ of the voting power, potentially limiting the influence of Class A Ordinary Shareholders.

Management's message to shareholders emphasizes the company's strategic vision to build an integrated financial services infrastructure for next-generation investors, aiming to become a one-stop, comprehensive financial services provider. This involves a continuous focus on expanding product offerings from traditional to virtual assets. Management highlights the recent reorganization of business segments to better align with this strategic focus, including the introduction of virtual assets services. Key strategic priorities for the period ahead include growing the client base and enhancing the brand through regulated and compliant solutions, strengthening technological infrastructure to provide customized B2B solutions and improve user experience, and attracting and building a strong team of key talent in securities dealing, corporate finance, investment advisory, and asset management. The company also plans to enlarge its market share by expanding product offerings, such as applying for a Type 2 license for futures contracts trading and upgrading its Type 9 license for virtual asset management services. Furthermore, management intends to leverage competitive advantages by strengthening strategic partnerships with industry leaders like OSL, MaiCapital, China AMC, and Harvest Global to offer more regulated and high-quality comprehensive products. The company believes its current cash and cash flows from operations will be sufficient for the next 12 months, but acknowledges the potential need for additional financing for future growth and acquisitions.