GRAN

Business Context and Reporting Period

Company: Grande Group Limited (Ticker: GRAN)

Filing Type: Form 20-F (Annual Report)

Reporting Period: Fiscal year ended March 31, 2025

Business Overview: Grande Group is a British Virgin Islands holding company with no material operations of its own. All operations are conducted through its wholly-owned operating subsidiary, Grande Capital Limited, a Hong Kong-based boutique financial firm. Grande Capital is licensed by the Securities and Futures Commission of Hong Kong (SFC) to engage in Type 1 (dealing in securities) and Type 6 (advising on corporate finance) regulated activities. The company provides IPO sponsorship, corporate financial advisory, compliance advisory, and referral services.

Recent Corporate Action: The company completed its Initial Public Offering (IPO) on July 2, 2025, listing on the Nasdaq Capital Market. The underwriters exercised the full over-allotment option on July 10, 2025.

Key Financial Metrics

Revenue Composition (FY 2025):

• Corporate Financial Advisory Services: $2,486,433 (57.3%)
• Referral Services: $1,594,619 (36.8%) - New revenue stream initiated mid-2024.
• IPO Sponsorship and Related Services: $257,775 (5.9%)

Debt and Liquidity: The company has no long-term debt. It maintains a significant related party liability of approximately $1.82 million due to its controlling shareholder, Grande Holding Limited. The company is in compliance with Hong Kong regulatory capital requirements, maintaining liquid capital significantly above the minimum threshold.

Material Changes vs. Prior Period

• Revenue Decline: Total revenue decreased by 4.2% ($0.19 million) compared to FY 2024. This was primarily due to a significant drop in IPO sponsorship revenue (down from $3.34 million to $0.26 million) as no IPOs were completed in FY 2025, offset by the introduction of referral services and growth in general advisory services.
• Profitability: Net income decreased by 10.0% to $1.62 million. Despite lower revenue, the gross margin expanded to 76.5% from 66.5% due to the high-margin nature of referral and advisory services and reduced bonuses payable to project execution staff.
• Expense Increase: General and administrative (G&A) expenses increased by 59.9% to $1.42 million, driven largely by a $0.3 million increase in audit fees associated with the IPO process.
• Client Concentration: While still high, concentration risk decreased. The top five clients accounted for 57.2% of revenue in FY 2025, down from 78.1% in FY 2024. The largest single client accounted for 30.8% of revenue in FY 2025.
• Geographic Shift: Revenue from Mainland China clients decreased by 58.0% to $0.6 million, while revenue from Hong Kong clients increased by 24.2% to $3.3 million.

Guidance, Outlook, Risks, and Unusual Items

Outlook and Strategy: Management intends to use IPO proceeds (approx. $8.86 million net) to expand equity capital market services, develop an asset management business, and enhance brand presence. The company aims to diversify its client base and reduce reliance on the construction industry, which currently represents 14 of 16 completed IPOs.

Material Risks:

• Regulatory Risk (PRC/HK): Significant uncertainty exists regarding the application of Mainland China laws (e.g., Trial Administrative Measures, Cybersecurity Law) to the company's Hong Kong operations, particularly regarding clients based in Mainland China. Non-compliance could lead to penalties or loss of access to the Mainland market.
• Client Concentration: Revenue is highly dependent on a limited number of clients and is non-recurring in nature (project-based). Loss of key clients could materially impact results.
• Internal Controls: The company identified material weaknesses in internal controls over financial reporting, including insufficient accounting personnel with U.S. GAAP expertise, lack of an internal audit function, and IT deficiencies. Remediation efforts are underway.
• Delisting Risk: As a foreign private issuer, the company faces potential delisting risks under the Holding Foreign Companies Accountable Act (HFCAA) if the PCAOB cannot inspect its auditor, though the auditor (WWC, P.C.) is currently not on the non-inspection list.
• Stock Price Volatility: The company has a small public float and a dual-class share structure, which may lead to extreme price volatility and limit liquidity.

Unusual Items: The company received government subsidies of $2,605 in FY 2025 (maternity leave reimbursement) and $53,846 in FY 2023 (employment support scheme). No such subsidies were received in FY 2024.

Investor Verification Checklist

• Revenue Sustainability: Verify the pipeline for future IPO mandates and the stability of the new referral service revenue stream, given the sharp decline in IPO sponsorship fees.
• Internal Control Remediation: Confirm the progress of remediation for the identified material weaknesses in financial reporting and IT controls.
• Regulatory Compliance: Monitor any changes in PRC regulations regarding overseas listings and data security that could impact the company's ability to serve Mainland China clients.
• Client Diversification: Assess the company's ability to reduce reliance on the construction industry and its top five clients, which collectively generated over 57% of revenue.
• Use of IPO Proceeds: Track the deployment of the $8.86 million in net IPO proceeds toward the stated strategic goals (asset management, ECM expansion).
• Related Party Transactions: Review the terms and repayment schedule of the $1.82 million loan due to the controlling shareholder, Grande Holding Limited.