Business context and reporting period
Roma Green Finance Limited filed this Form 20-F annual report for the fiscal year ended March 31, 2024. It is not a report for calendar 2023 Q4. The Cayman Islands holding company provides ESG, sustainability, climate-change, corporate-governance and risk-advisory services through subsidiaries in Hong Kong and Singapore. Financial statements are prepared under U.S. GAAP and reported in Hong Kong dollars (HKD); USD figures are convenience translations.
Financial performance and position
| Metric | FY2024 | FY2023 |
|---|---|---|
| Revenue | HKD 9.90 million (USD 1.27 million) | HKD 13.64 million |
| Gross profit / margin | HKD 3.12 million / 31.5% | HKD 5.78 million / 42.4% |
| Operating loss | HKD 6.09 million | HKD 1.35 million |
| Net loss | HKD 5.84 million (USD 0.75 million) | HKD 1.01 million |
| Operating cash flow | Use of HKD 25.05 million | Generation of HKD 0.55 million |
| Cash and cash equivalents at year-end | HKD 43.11 million (USD 5.53 million) | HKD 0.53 million |
Revenue fell 27.4%, principally because recurring-client revenue declined by about HKD 2.8 million. Hong Kong revenue decreased to HKD 8.50 million from HKD 12.75 million; Singapore revenue rose to HKD 1.41 million from HKD 0.88 million. Gross margin contracted as consulting and professional costs increased relative to revenue and staff costs did not fall proportionately. Sales and marketing expense rose to HKD 2.15 million from HKD 0.69 million, while general and administrative expense rose to HKD 7.06 million from HKD 6.44 million.
Cash used in operations was driven largely by an HKD 18.20 million increase in deposits, prepayments and other receivables. At March 31, 2024, these current balances were HKD 14.99 million, with another HKD 3.90 million in long-term prepayments; the filing describes some as operational, market-advisory and marketing service prepayments. The company reported working capital of HKD 54.14 million and said available cash and IPO proceeds should cover working-capital needs for 12 months from issuance of the financial statements, absent unforeseen circumstances.
Total assets were HKD 63.56 million and total liabilities HKD 5.47 million at year-end. The filing reports no material bank borrowings or material capital commitments. It reports HKD 1.27 million due to director Claire Luk; the related-party note describes advances as unsecured, non-interest-bearing and payable on demand, while another section describes director balances as secured and interest-bearing. This inconsistency warrants review.
Notable changes, outlook and risks
- The January 2024 IPO issued 2,449,943 shares at USD 4.00, raising gross proceeds of USD 9.80 million and net proceeds of USD 8.68 million. A selling shareholder separately sold shares; the company received none of those proceeds.
- After the reporting date, the company entered into promissory notes totaling approximately HKD 24 million with three independent parties, bearing 6.5% annual interest and expected to become receivable by September 30, 2024. These are described as receivables, not company debt.
- Management plans to grow in Hong Kong and Singapore, expand internationally (particularly in the U.S.), recruit professionals and pursue strategic acquisitions. The filing gives no company-specific revenue or earnings guidance; industry growth estimates cited are third-party market projections, not management forecasts.
- Nasdaq notified the company on May 17, 2024 that its bid price had been below USD 1.00 for 31 consecutive business days. The stated initial compliance period ran to November 13, 2024, with possible further time subject to conditions; continued noncompliance could lead to delisting.
- Management concluded disclosure controls and internal control over financial reporting were ineffective at March 31, 2024, citing insufficient U.S. GAAP/SEC reporting expertise and the absence of a comprehensive accounting policies and procedures manual. Remediation efforts were underway; the auditor did not audit internal controls.
- The FY2024 auditor issued an unqualified opinion on the financial statements and identified revenue recognition and credit-loss allowance as critical audit matters. The prior auditor’s reports for FY2022 and FY2023 raised substantial doubt about going concern. KCCW was replaced by J&S Associate PLT in March 2024; management reported no accounting disagreements.
- Key risks include recurring losses and volatile project-based revenue, collections and liquidity, customer concentration, reliance on key personnel, Hong Kong and PRC regulatory/political uncertainty, cybersecurity and data protection, and Nasdaq listing compliance. No material litigation or contingencies were reported. No dividends were declared, and management does not expect cash dividends in the foreseeable future.
Important facts for investors to verify
- Reconcile reported share counts: 10,425,290 shares at March 31, 2024; 11,964,571 stated elsewhere as outstanding at the report date after a May issuance; and a 15,564,571-share denominator used in the ownership section. Confirm current shares outstanding and dilution from the equity plan.
- Review the nature, counterparties, terms and recoverability of the HKD 18.89 million combined current and long-term prepayments, particularly the substantial marketing and advisory prepayments, and their connection to the sharp operating cash outflow.
- Clarify the conflicting descriptions of the director advance’s security and interest terms, and assess related-party governance and approval.
- Track remediation of the disclosed material weaknesses, future cash generation, receivable collection and progress toward Nasdaq’s minimum bid-price requirement.