Solowin (AXG) Registration Filing summary

Company overview and business model

• Operates as a Cayman Islands holding company with all operations conducted through Hong Kong subsidiaries focused on investment banking, wealth management, asset management, and virtual assets services.

• Solomon JFZ, the main subsidiary, is licensed by the HKSFC for securities, advisory, corporate finance, and asset management, and recently expanded into virtual asset services.

• Client base includes over 15,500 registered accounts, with a focus on Chinese investors in Asia and institutional clients in Hong Kong, Australia, and New Zealand.

• Launched Solomon VA+, an integrated trading app for traditional and virtual assets, and expanded into private wealth management with Solomon Wealth.

Financial performance and metrics

• Total revenues for the year ended March 31, 2024 were $4.29M, down 4% from $4.45M in 2023; net loss was $4.56M in 2024 compared to net income of $1.35M in 2023.

• For the six months ended September 30, 2024, revenue was $1.06M (down 60% YoY), with a net loss of $6.26M, driven by higher expenses and lower investment advisory fees.

• Expenses increased significantly due to higher employee benefits (Equity Incentive Plan), marketing, and professional fees related to virtual assets business.

• Cash and cash equivalents as of September 30, 2024 were $2.46M; company believes current liquidity is sufficient for at least 12 months.

Use of proceeds and capital allocation

• Net proceeds from the offering will be used to develop Virtual Assets Services and Web3 solutions, for working capital, and potentially for acquisitions or investments in complementary businesses.

• Pending use, proceeds may be invested in capital preservation assets, including digital assets, ETFs, and money market funds.