EX-99.3 4 ea022618701ex99-3_solowin.htm PRESS RELEASE DATED DECEMBER 31, 2024

Exhibit 99.3

 

SOLOWIN HOLDINGS Reports Unaudited Financial Results for The First Six Months of Fiscal Year 2025

 

Hong Kong, December 31, 2024 /PRNewswire/ -- SOLOWIN HOLDINGS (“SOLOWIN” or the “Company”, or “we”) (Nasdaq: SWIN), a leading financial services firm providing high-net-worth and institutional investors with solutions across traditional and virtual assets, today announced its unaudited financial results for the first six months of fiscal year 2025 ended September 30, 2024.

 

Mr. Shing Tak Tam, Chief Executive Officer of SOLOWIN, commented, “Amid macroeconomic headwinds and volatile market conditions in Hong Kong and Mainland China, SOLOWIN reports a decrease in revenue for the first six months of 2025, with a loss per share of $0.39 compared to a EPS of 0.10 for the same period in 2024.

 

To navigate these challenges, we have taken extensive measures to mitigate negative trends and pursue new breakthroughs and business opportunities. Our ongoing business transformation is driven by advancements in Web3 and the latest Fintech developments, as we expand partnerships with key Web3 industry players such as OSL, China AMC, and Zodia Custody. This collaboration allows us to explore emerging opportunities for sustainable growth, leveraging the rise of artificial intelligence and the expanding adoption of digital assets.

 

We remain confident in our brand strength, robust strategies, and commitment to long-term, sustainable growth within the financial services industry. Notably, in December 2024, SOLOWIN was shortlisted — alongside industry leaders like China AMC (HK), HSBC, Hang Seng Bank, and Fosun Wealth Holdings — to participate in the Hong Kong Monetary Authority’s (HKMA) Project Ensemble Sandbox. As part of this initiative, SOLOWIN became one of the first-phase testers, initially focusing on the “Fixed Income and Investment Funds” use case for local applications of tokenized currencies and assets.

 

Looking ahead, we believe our steady yet adaptable strategies, coupled with strong execution, will enable us to navigate uncertainties and seize opportunities, ultimately delivering long-term value to our shareholders.”

 

First Six Months of Fiscal Year 2025 Financial Results

 

Revenue

 

Revenue decreased by 60% to $1.06 million for the six months ended September 30, 2024, from $2.64 million for the same period of last year. The decrease in revenue was mainly driven by the decrease in revenue from investment advisory services.

 

   For the six months ended September 30, 
   2024   2023 
   (in thousands)   % of revenue   (in thousands)   % of revenue 
Securities brokerage commissions and handling income  $75    8%  $16    1%
Investment advisory fees   318    30%   1,559    59%
Corporate consultancy service income   237    22%   -    - 
Asset management income   380    36%   498    18%
Virtual assets transaction income   15    1%   -    - 
Interest income   30    3%   17    1%
Referral income   -    -    550    21 
Total  $1,055    100%  $2,640    100%

 

●Revenue from securities brokerage commissions and handling income increased to $75,000 for the six months ended September 30, 2024, from $16,000 for the same period of 2023. The slight increase in commissions earned is due to a higher volume of trading activity in the U.S. market.

 

●Revenue from investment advisory fees decreased by 80% to $318,000 for the six months ended September 30, 2024, from $1,559,000 for the same period of 2023. The decrease was primarily due to a reduced client base and decrease in value-added services to institutional clients.

 

 

●Revenue from corporate consultancy service increased to $237,000 for the six months ended September 30, 2024 and the Company did not have corporate consultancy service income for the same period of 2023. The increase was primarily driven by the acquisition of new clients and growing interest from corporate clients seeking to list in the U.S. market.

 

●Revenue from asset management from related parties decreased by 24% to $380,000 for the six months ended September 30, 2024, from $498,000 for the same period of 2023. The decrease was primarily due to decrease of performance fees derived from Solomon Capital Fund SPC - Solomon Capital SP2, resulting from reduced investor subscriptions and weaker fund performance for the six months ended September 30, 2024.

 

●Virtual assets transaction income of $15,000 was first recognized for the six months ended September 30, 2024. The increase is primarily attributable to the launch and growing adoption of the Company’s virtual assets services, including trading of digital assets through Solomon VA+, and subscription and redemption services for the Bitcoin spot ETF and Ethereum spot ETF.

 

●Revenue from interest income increased by $13,000, or 76% to $30,000 for the six months ended September 30, 2024, from $17,000 for the same period of 2023. The increase was primarily due to increase in outstanding deposits from the rolling balance cash clients in relation to the securities brokerage services.

 

●The Company did not have referral income for the six months ended September 30, 2024, compared to $550,000 referral income for the same period of 2023. The referral income was generated by referring investors to our corporate customers or brokers for IPO subscriptions in oversea markets. The Company acted as an agent and earned referral income in a percentage of subscription amount stipulated in the agreement. No such referral activities occurred for the six months ended September 30, 2024.

 

Expenses

 

Expenses increased to $7.35 million for the six months ended September 30, 2024, from $1.30 million for the same period of last year. The increase was mainly due to increase in general and administrative expenses, marketing and promotion expenses and employee benefits expenses for the six months ended September 30, 2024.

 

●Commission and handling expenses – Commission and handling expenses increased to $18,000 for the six months ended September 30, 2024, from $4,000 for the same period of 2023. The increase was mainly due to more trading activities in US market and was in line with the Company’s increase in securities brokerage commissions and handling income.

 

  ● General and administrative expenses – General and administrative expenses increased to $2,016,000 for the six months ended September 30, 2024, from $648,000 for the same period of 2023. The Company’s general and administrative expenses consist primarily of depreciation of property and equipment, amortization of intangible assets, professional fee, information technology expenses, office leases, and general office expenses. Such increase was mainly due to increase in professional and consultation fee in relation to the newly launched virtual assets business and increase in office lease expenses for new office.

 

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●Marketing and promotion expenses – The Company’s marketing and promotion expenses consist primarily of advertising and other promotional activities. The Company’s marketing and promotion expenses increased by $929,000, to $934,000 for the six months ended September 30, 2024, from $5,000 for the six months ended September 30, 2023. This increase includes expenses related to the Hong Kong FinTech Week 2024 and other significant marketing events which were aimed to enhance brand visibility, and promote the Company’s services to attract more investors and potential clients.

 

●(Reversal of) Provision for Expected Credit Losses – The Company recorded reversal of provision for expected credit losses of $412,000 for the six months ended September 30, 2024, compared to the provision for expected credit losses of $155,000. This is mainly due to the loan receivables which were previously subject to an allowance for expected credit losses but were fully repaid in July 2024. The reversal also reflects the improved recoverability of the receivables in accordance with the Company’s credit loss policy.

 

●Employee Benefits Expenses – The Company employee benefits expenses increased substantially by $3,875,000, or 788%, to $4,367,000 for the six months ended September 30, 2024, from $492,000 for the six months ended September 30, 2023. This significant increase was mainly due to the implementation of the 2023 Equity Incentive Plan under which 1,980,000 ordinary shares were issued to employees as share rewards and higher staff costs associated with retaining and recruiting employees to support the Company’s expanded business operations.

 

●Referral fee – For the six months ended September 30, 2024, the Company incurred referral fee of $139,000 related to the Company’s investment banking segment. These expenses were associated with the successful referral of clients for corporate consultancy or financial advisory service. No such referral expenses were recorded during the same period in 2023.

 

●Share of Results of an Associate – For the six months ended September 30, 2024, the Company recorded a share of results of an associate amounting to $27,000. This reflects the Company’s equity method accounting for the Company’s investment in an associate company.

 

  ● Impairment loss of long-term investments – For the six months ended September 30, 2024, the Company recorded an impairment loss of $259,000 on one of the Company’s long-term investments which does not have a readily determinable fair value. No impairment losses were recorded during the same period in 2023.

 

(Loss) Income from Operations

 

Loss from operations increased to $6.29 million for the six months ended September 30, 2024, as compared to income from operations of $1.34 million for the same period of last year.

 

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Other Income

 

Other income for the six months ended September 30, 2024 mainly consisted of interest income from loan receivables. No other income was received for the six months ended September 30, 2023.

 

Net (Loss) Income

 

Net loss increased to $6.26 million for the six months ended September 30, 2024, as compared to the net income of $1.25 million for the same period of last year.

 

Basic and Diluted (Loss) Earnings per Share

 

Basic and diluted loss per share increased to $0.39 for the six months ended September 30, 2024, as compared to earnings per share of $0.10 for the same period of last year.

 

Financial Condition

 

As of September 30, 2024, cash and cash equivalents increased to $2.46 million, from $2.14 million as of March 31, 2024.

 

Net cash provided by operating activities was $0.78 million for the six months ended September 30, 2024, compared to net cash used in operating activities of $2.37 million for the same period of last year. The decrease of $2.36 million in receivables from customers, the decrease of $0.74 million in prepaid expenses and the increase in payables to customers of $0.57 million, offset by operating loss before working capital changes of $0.30 million, were the primary drivers of the cash provided by operating activities.

 

Net cash provided by investing activities was $0.26 million for the six months ended September 30, 2024, mainly consisted of repayment of loan from a third party, offset by the purchase of long-term investments, compared to net cash used in investing activities of $0.02 million for the same period of last year.

 

Net cash provided by financing activities decreased to $0.02 million for the six months ended September 30, 2024, representing advance from related parties, compared to $6.73 million for the same period of last year.

 

About SOLOWIN HOLDINGS

 

Solowin Holdings (NASDAQ: SWIN) is a Hong Kong based financial services firm providing comprehensive one-stop financial services and solutions for high-net-worth and institutional investors worldwide. Spanning both traditional and virtual assets, Solowin’s offerings include investment banking, wealth management, asset management, and Web3, tailored to support the next generation of investors. Solowin’s wholly owned subsidiary, Solomon JFZ (Asia) Holdings Limited (“Solomon JFZ”), is one of Hong Kong’s first batch regulated virtual asset service providers. Its advanced electronic platform, Solomon VA+, is Hong Kong’s first all in one app to integrate traditional and virtual asset trading with wealth management services.

 

For more information, please visit the Company’s website at https://solowin.io or its investor relationship page at https://ir.solowin.io.

 

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Forward-Looking Statements

 

Certain statements in this announcement are forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties and are based on the Company’s current expectations and projections about future events that the Company believes may affect its financial condition, results of operations, business strategy and financial needs. We have attempted to identify these forward-looking statements by words or phrases such as “may,” “will,” “expect,” “anticipate,” “aim,” “estimate,” “intend,” “plan,” “believe,” “is/are likely to,” “potential,” “continue” or other similar expressions. The Company undertakes no obligation to update or revise publicly any forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations that arise after the date hereof, except as may be required by law. These statements are subject to uncertainties and risks including, but not limited to, the uncertainties related to market conditions and other factors discussed in the Company’s filings with the SEC including the “Risk Factors” section of the Company’s most recent Annual Report on Form 20-F as well as in its other reports filed or furnished from time to time with the SEC. 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 filings with the SEC, which are available for review at www.sec.gov.

 

For investor and media inquiries please contact:

 

SOLOWIN HOLDINGS

 

Investor Relations Department
Email: ir@solomonwin.com.hk

 

Ascent Investor Relations LLC

 

Tina Xiao
Phone: +1-646-932-7242

Email: investors@ascent-ir.com

 

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SOLOWIN HOLDINGS 

INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF SEPTEMBER 30, 2024 AND MARCH 31, 2024

(Amount in U.S. dollars and in thousands, except for share and per share data, or otherwise noted)

 

   As of
September 30,		   As of
March 31,		 
   2024   2024 
   $’000   $’000 
   (Unaudited)   (Audited) 
ASSETS        
Current assets:        
Cash and cash equivalents   2,459    2,140 
Cash segregated for regulatory purpose   5,862    5,111 
Receivables from:          
Customers, net of allowance for expected credit losses of $500,000 and $516,000 as of September 30, 2024 and March 31, 2024, respectively   203    2,668 
Customers - related parties, net of allowance for expected credit losses of $66,000 and $59,000 as of September 30, 2024 and March 31, 2024, respectively   333    220 
Brokers-dealers and clearing organizations, net of allowance for expected credit losses of $22,000 and $15,000 as of September 30, 2024 and March 31, 2024, respectively   865    664 
Prepaid expenses and other current assets, net   731    1,392 
Loan receivables, net of allowance for expected credit losses of nil and $410,000 as of September 30, 2024 and March 31, 2024, respectively   -    574 
Amount due from related parties   4    26 
Total current assets   10,457    12,795 
           
Non-current assets:          
Investment in an associate   227    254 
Long-term investments, net   401    - 
Property and equipment, net   135    150 
Operating right-of-use assets, net   729    1,057 
Intangible assets, net   129    77 
Refundable deposits   631    618 
Prepaid expenses, net   403    450 
Total non-current assets   2,655    2,606 
TOTAL ASSETS   13,112    15,401 
           
LIABILITIES AND SHAREHOLDERS’ EQUITY          
Current liabilities:          
Payables to customers   5,682    5,111 
Payables to clearing organizations   170    - 
Accruals and other current liabilities   303    232 
Contract liabilities   151    - 
Income taxes payable   55    55 
Operating lease liabilities - current   534    631 
Amount due to a director   3    3 
Amount due to a related party   6    6 
Total current liabilities   6,904    6,038 
           
Non-current liabilities:          
Operating lease liabilities - non-current   196    439 
Total non-current liabilities   196    439 
TOTAL LIABILITIES   7,100    6,477 
           
COMMITMENTS AND CONTINGENCIES          
           
Shareholders’ equity          
Ordinary shares (US$0.0001 par value per share; 1,000,000,000 shares authorized; 15,980,000 and 15,500,000 shares issued and outstanding as of September 30, 2024 and March 31, 2024)   2    1 
Additional paid-in capital   18,219    14,908 
Accumulated losses   (12,239)   (5,984)
Accumulated other comprehensive income (losses)   30    (1)
Total shareholders’ equity   6,012    8,924 
           
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY   13,112    15,401 

 

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SOLOWIN HOLDINGS

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF (LOSS) INCOME AND
COMPREHENSIVE (LOSS) INCOME

FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2024 AND 2023 

(Amount in U.S. dollars and in thousands, except for share and per share data, or otherwise noted)

 

   For the six months
ended
September 30,		 
   2024   2023 
   $’000   $’000 
Revenues        
Securities brokerage commissions and handling income   75    16 
Investment advisory fees   318    1,559 
Corporate consultancy service income   237    - 
Asset management income - related parties   380    498 
Virtual assets transaction income   15    - 
Interest income   30    17 
Referral income   -    550 
Total revenues   1,055    2,640 
           
Expenses          
Marketing and promotion expenses   934    5 
Commission and handling expenses   18    4 
Professional fee   539    180 
Information technology expenses   309    208 
Office expenses   447    113 
(Reversal of) provision for expected credit losses   (412)   155 
Employee benefits expenses   4,367    492 
Referral fee   139    - 
Share of results of an associate   27    - 
Impairment loss of long-term investments   259    - 
General and administrative expenses   721    147 
Total expenses   7,348    1,304 
           
Other income          
Interest income   34    - 
Other income   4    - 
Total other income   38    - 
           
(Loss) income before income tax expense   (6,255)   1,336 
           
Income tax expense   -    88 
           
Net (loss) income   (6,255)   1,248 
           
Other comprehensive income          
Foreign currency translation adjustment   31    10 
Total comprehensive (loss) income   (6,224)   1,258 
           
Basic and diluted net (loss) income per share   (0.39)   0.10 
Weighted average number of shares outstanding - basic and diluted   15,961,639    12,252,747 

 

 

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