UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of March
Commission File Number 001-41879
GARDEN STAGE LIMITED
(Translation of registrant’s name into English)
Room
201, 2/F, China Insurance Group Building
141 Des Voeux Road Central
Central, Hong Kong
Tel: +852 2688 6333
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:
☒ Form 20-F ☐ Form 40-F
Financial Statements and Exhibits.
The following exhibits are being filed herewith:
| Exhibit No. | Description | |
| 99.1 | Garden Stage Limited Announces Financial Results for the First Half of Fiscal Year 2024 |
1
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Date: March 28, 2024 | GARDEN STAGE LIMITED | |
| By: | /s/ Sze Ho, CHAN | |
| Name: | Sze Ho, CHAN | |
| Title: | Chief Executive Officer | |
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Exhibit 99.1
Garden Stage Limited Announces Financial Results for the First Half of Fiscal Year 2024
Garden Stage Limited (“GSL” or the “Company”) (Nasdaq: GSIW) is an offshore holding company incorporated in the Cayman Islands with no material operations of its own. Through its Hong Kong operating entities, the Company engaged in providing securities brokerage, underwriting and placement, and other financial services to a wide range of customers in Hong Kong. The Company today announced its unaudited financial results for the six months ended September 30, 2023 (“First Half 2024”).
First Half of Fiscal Year 2024 Financial Results
| For the Six Months Ended September 30, | ||||||||||||
| Selected Unaudited Interim Condensed Consolidated Statements of Income Data: | 2023 USD | 2022 USD | Change % | |||||||||
| Revenues | 750,626 | 1,180,102 | (36.39 | ) | ||||||||
| Expenses | (1,490,632 | ) | (1,742,855 | ) | (14.47 | ) | ||||||
| Loss before income taxes | (740,006 | ) | (562,753 | ) | 31.50 | |||||||
| Income tax (expense) benefits | (11,654 | ) | 171 | 6,915.20 | ||||||||
| Net loss | (751,660 | ) | (562,582 | ) | 33.61 | |||||||
| Loss per share – basic and diluted | 0.06 | 0.05 | 20.00 | |||||||||
Revenues
Revenues decreased by 36.39% from $1,180,102 for the six months ended September 30, 2022 to $750,626 for the six months ended September 30, 2023. The decrease was primarily due to decrease in our brokerage commissions, underwriting and placement income, introducing and referral income, investment management fee income, and interest income and others, and partially offset by the increase in our advisory fees and handling income.
| ● | Revenues from brokerage commissions was $159,389 in the six months ended September 30, 2023, compared to $422,326 in the six months ended September 30, 2022. This decrease was primarily attributed to reduced demand for securities brokerage activities in the United States market, resulting in a drop in trading volume on the exchanges in the United States during the six months ended September 30, 2023. | |
| ● | Revenues from underwriting and placement income was $39,765 in the six months ended September 30, 2023, compared to $414,657 in the six months ended September 30, 2022. The decrease was primarily due to the Company engaging in fewer underwriting and placement activities. | |
| ● | Revenues from introducing and referral income was $159,129 in the six months ended September 30, 2023, compared to $224,865 in the six months ended September 30, 2022. The decrease was primarily attributed to the Company facilitating a significant block trade transaction during the six months ending September 30, 2022, which contributed revenue of $189,813. In contrast, only smaller transactions were facilitated in six months ended September 30, 2023. | |
| ● | Revenues from investment management fee income was $nil in the six months ended September 30, 2023, compared to $20,746 in the six months ended September 30, 2022. The decrease was primarily due to the full redemption of the fund managed by the Company in February 2023. | |
| ● | Revenues from interest income and others was $25,212 in the six months ended September 30, 2023, compared to $79,385 in the six months ended September 30, 2022. The decrease was primarily due to a decrease in government subsidies, which were one-off entitlement granted by the Hong Kong Government under the Employment Support Scheme of the Anti-epidemic Fund amid the outbreak of COVID-19. | |
| ● | Revenues from advisory fees was $321,558 in the six months ended September 30, 2023, compared to $nil in the six months ended September 30, 2022. The increase was primarily due to the Company providing a new type of service for investment advisory during the six months ended September 30, 2023. | |
| ● | Revenues from handling income was $45,573 in the six months ended September 30, 2023, compared to $18,123 in the six months ended September 30, 2022. The increase was primarily due to the Company being more actively engaged in transferring the physical shares held by customer to CCASS for custodian services. |
Expenses
Our total expenses decreased by $252,233, or 14.47%, from $1,742,855 for the six months ended September 30, 2022 to $1,490,632 for the six months ended September 30, 2023. This decrease was mainly attributable to (i) a decrease of approximately $0.3 million in compensation and benefits, (ii) a decrease of approximately $0.1 million in professional fees, and (iii) an increase of approximately $0.2 million in travel and business development.
The decrease in compensation and benefits in this period was due to a reduction in the average number of staff from 18 in the six months ended September 30, 2022 to 13 in the six months ended September 30, 2023.
The decrease in professional fees was attributable to a reduction in the fees previously associated with the set-up and annual charges related to a fund managed by the Company under its investment management business.
The increase in travel and business development expenses during this period was due to heightened activities in business development.
Income tax (expense) benefits
Our income tax expense changed from $171 benefits for the six months ended September 30, 2022 to $11,654 expense for the six months ended September 30, 2023. The change was primarily due to an increase in current tax expenses related to the profits generated by a subsidiary in Hong Kong as such taxable profits could not be offset by losses generated by other subsidiaries of the Company.
Net loss
Our net loss increased by $189,078, or 33.61%, from $562,582 for the six months ended September 30, 2022 to $751,660 for the six months ended September 30, 2023. Such change was the result of the combination of the changes as discussed above.
Cash Flow
Net cash provided by operating activities was $203,660 in the six months ended September 30, 2023, compared to $3,985,064 in the six months ended September 30, 2022. This decrease was mainly due to a reduction in payables to customers, significantly impacted by our customers’ fund allocation preferences on one specific date whereas on September 30, 2023, our customers left less cash with us in the designed accounts for their securities brokerage transactions.
Net cash used in investing activities was $nil in the six months ended September 30, 2023, compared to net cash used in investing activities of $22,171 in the six months ended September 30, 2022. This was due to no purchase of property and equipment during the period ended September 30, 2023.
Net cash used in financing activities was $249,246 in the six months ended September 30, 2023, compared to net cash provided by financing activities of $628,281 in the six months ended September 30, 2022. This change was primarily due to the receipt of deposits totaling $795,187 in the six months ending September 30, 2022, for subscribed shares related to the allotment of ordinary shares, an event that did not recur in the six months ending September 30, 2023. Additionally, the change was influenced by ongoing payments for financing costs associated with the IPO, which amounted to $249,246 in the period ending September 30, 2023, compared to $166,906 in the same period of 2022.
Recent Events
On December 1, 2023, the Company closed its initial public offering (the “IPO”) of 2,500,000 ordinary shares, par value $0.0001 per share (the “Ordinary Shares”). The Ordinary Shares were priced at $4.00 per share. The Ordinary Shares were previously approved for listing on The Nasdaq Capital Market and commenced trading under the ticker symbol “GSIW” on December 1, 2023.
About Garden Stage Limited
The Company is an offshore holding company incorporated in the Cayman Islands with no material operations of its own. Through its Hong Kong operating entities, the Company engaged in providing securities brokerage, underwriting and placement, and other financial services to a wide range of customers in Hong Kong. For more information, please visit the Company’s website at http://www.gardenstage-ky.com/.
Forward-Looking Statements
All statements other than statements of historical fact in this announcement are forward-looking statements, within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements involve known and unknown risks and uncertainties and are based on current expectations and projections about future events and financial trends that the Company believes may affect its financial condition, results of operations, business strategy, and financial needs. Investors can identify these forward-looking statements by words or phrases such as “may,” “will,” “expect,” “anticipate,” “aim,” “estimate,” “intend,” “plan,” “believe,” “potential,” “continue,” “is/are likely to,” or other similar expressions. The Company undertakes no obligation to update forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. 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 registration statement and in its other filings with the SEC.
For more information, please contact:
Garden Stage Limited
| Phone: | +852 2688 6333 |
| Email: | cs@iwinsec.com |
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GARDEN
STAGE LIMITED
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
| September 30, 2023 | March 31, 2023 | |||||||
| Assets | ||||||||
| Current Assets | ||||||||
| Cash | $ | 676,873 | $ | 828,689 | ||||
| Restricted cash | 5,609,945 | 5,488,511 | ||||||
| Receivables from broker-dealers and clearing organizations | 396,042 | 4,607,918 | ||||||
| Receivables from customers | 237,472 | 1,505,627 | ||||||
| Receivables from customers-related parties | — | 1,219 | ||||||
| Other assets, current | 319,614 | 71,893 | ||||||
| Total current assets | 7,239,946 | 12,503,857 | ||||||
| Operating lease right-of-use assets | 28,645 | 62,868 | ||||||
| Deferred tax assets, net | 434 | 163 | ||||||
| Property and equipment, net | 23,478 | 28,188 | ||||||
| Intangible assets | 63,848 | 63,694 | ||||||
| Deferred initial public offering (“IPO”) costs | 693,132 | 442,762 | ||||||
| Other assets, non-current | 29,370 | 29,299 | ||||||
| Total assets | 8,078,853 | 13,130,831 | ||||||
| Liabilities and shareholders’ equity | ||||||||
| Liabilities | ||||||||
| Current liabilities | ||||||||
| Payables to customers | $ | 5,776,417 | $ | 8,135,442 | ||||
| Payables to customers-related parties | 204,226 | 123,144 | ||||||
| Payables to broker-dealers and clearing organizations | 44,758 | 2,030,523 | ||||||
| Amounts due to related parties | 7,114 | 7,097 | ||||||
| Income tax payable | 11,928 | — | ||||||
| Operating lease liabilities, current | 31,903 | 69,584 | ||||||
| Accrued expenses and other liabilities | 5,827 | 23,132 | ||||||
| Subscribed shares deposit liabilities | — | 794,903 | ||||||
| Total current liabilities | 6,082,173 | 11,183,825 | ||||||
| Total liabilities | 6,082,173 | 11,183,825 | ||||||
| Commitments and contingencies | ||||||||
| Shareholders’ equity | ||||||||
| Ordinary shares, $0.0001 par value, 500,000,000 shares authorized; 12,750,000 shares issued and outstanding as of September 30, 2023 11,475,000 shares issued and outstanding as of March 31, 2023* | 1,275 | 1,148 | ||||||
| Additional paid-in capital | 2,819,098 | 2,024,327 | ||||||
| Accumulated deficit | (831,155 | ) | (79,495 | ) | ||||
| Accumulated other comprehensive income | 7,462 | 1,026 | ||||||
| Total shareholders’ equity | 1,996,680 | 1,947,006 | ||||||
| Total liabilities and shareholders’ equity | $ | 8,078,853 | $ | 13,130,831 | ||||
| * | Shares and per share data are presented on a retroactive basis to reflect the ordinary shares issuance and share split. |
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GARDEN
STAGE LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE LOSS
(Unaudited)
For the Six Months Ended September 30, | ||||||||
| 2023 | 2022 | |||||||
| Revenues | ||||||||
| Advisory fees | $ | 321,558 | $ | — | ||||
| Brokerage commissions | 158,209 | 351,139 | ||||||
| Brokerage commissions-related parties | 1,180 | 71,187 | ||||||
| Underwriting and placement income | 39,765 | 414,657 | ||||||
| Introducing and referral income | 159,129 | 224,865 | ||||||
| Handling income | 43,516 | 18,123 | ||||||
| Handling income-related parties | 2,057 | — | ||||||
| Investment management fee income | — | 18,658 | ||||||
| Investment management fee income-related parties | — | 2,088 | ||||||
| Interest income and others | 24,141 | 73,643 | ||||||
| Interest income and others-related parties | 1,071 | 5,742 | ||||||
| Total revenues | 750,626 | 1,180,102 | ||||||
| Expenses | ||||||||
| Brokerage, clearing and exchange fees | 22,524 | 40,772 | ||||||
| Compensation and benefits | 757,189 | 1,060,491 | ||||||
| Communications and technology | 65,586 | 62,117 | ||||||
| Deprecation | 4,776 | 5,131 | ||||||
| Occupancy costs | 40,967 | 44,162 | ||||||
| Professional fees | 239,733 | 349,550 | ||||||
| Travel and business development | 314,890 | 135,176 | ||||||
| Other administrative expenses | 44,967 | 45,456 | ||||||
| Total expenses | 1,490,632 | 1,742,855 | ||||||
| Loss before income taxes | (740,006 | ) | (562,753 | ) | ||||
| Income tax (expense) benefits | (11,654 | ) | 171 | |||||
| Net loss | (751,660 | ) | (562,582 | ) | ||||
| Other comprehensive income (loss) | ||||||||
| Foreign currency translation adjustments | 6,436 | (89 | ) | |||||
| Total comprehensive loss | $ | (745,224 | ) | $ | (562,671 | ) | ||
| Loss per share: | ||||||||
| Basic and diluted | $ | 0.06 | $ | 0.05 | ||||
| Weighted average number of ordinary shares outstanding: | ||||||||
| Ordinary shares – Basic and diluted | 12,618,552 | 11,475,000 | ||||||
| * | Shares and per share data are presented on a retroactive basis to reflect the ordinary shares issuance and share split. |
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GARDEN
STAGE LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited)
Six months ended September 30, 2022
Ordinary Shares, No par value | Retained earnings | Accumulated other | ||||||||||||||||||||||
Number issued |
Amount | Subscription receivables | (Accumulated deficit) | comprehensive income |
Total | |||||||||||||||||||
| Balance at March 31, 2022 | 11,475,000 | $ | 1,148 | $ | (1,148 | ) | $ | 127,674 | $ | 1,028 | $ | 128,702 | ||||||||||||
| Net loss | — | — | — | (562,582 | ) | — | (562,582 | ) | ||||||||||||||||
| Foreign currency translation adjustments | — | — | — | — | (89 | ) | (89 | ) | ||||||||||||||||
| Balance at September 30, 2022 | 11,475,000 | $ | 1,148 | $ | (1,148 | ) | $ | (434,908 | ) | $ | 939 | $ | (433,969 | ) | ||||||||||
Six months ended September 30, 2023
| Ordinary shares |
Additional | Retained earnings | Accumulated other | |||||||||||||||||||||
Number issued |
Amount | paid-in capital | (Accumulated deficit) | comprehensive income |
Total | |||||||||||||||||||
| Balance at March 31, 2023 | 11,475,000 | $ | 1,148 | $ | 2,024,327 | $ | (79,495 | ) | $ | 1,026 | $ | 1,947,006 | ||||||||||||
| Issuance of ordinary shares | 1,275,000 | 127 | 794,771 | — | — | 794,898 | ||||||||||||||||||
| Net loss | — | — | — | (751,660 | ) | — | (751,660 | ) | ||||||||||||||||
| Foreign currency translation adjustments | — | — | — | — | 6,436 | 6,436 | ||||||||||||||||||
| Balance at September 30, 2023 | 12,750,000 | $ | 1,275 | $ | 2,819,098 | $ | (831,155 | ) | $ | 7,462 | $ | 1,996,680 | ||||||||||||
| * | Shares and per share data are presented on a retroactive basis to reflect the ordinary shares issuance and share split |
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GARDEN
STAGE LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| For the Six Months Ended September 30, | ||||||||
| 2023 | 2022 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | (751,660 | ) | $ | (562,582 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation | 4,776 | 5,131 | ||||||
| Amortization of operating lease right-of-use assets and interest of lease liabilities | 34,961 | 35,751 | ||||||
| Deferred tax benefits | (271 | ) | (171 | ) | ||||
| Change in operating assets and liabilities: | ||||||||
| Receivables from broker-dealers and clearing organizations | 4,222,005 | (180,720 | ) | |||||
| Receivables from customers | 1,272,712 | 375,930 | ||||||
| Other assets | (247,491 | ) | (4,043 | ) | ||||
| Payables to customers | (2,297,307 | ) | 4,513,081 | |||||
| Payables to broker-dealers and clearing organizations | (1,990,199 | ) | (105,413 | ) | ||||
| Operating lease liabilities | (38,435 | ) | (38,365 | ) | ||||
| Income tax payable | 11,925 | — | ||||||
| Accrued expenses and other liabilities | (17,356 | ) | (53,535 | ) | ||||
| Net cash provided by operating activities | 203,660 | 3,985,064 | ||||||
| Cash flows from investing activities: | ||||||||
| Purchases of property and equipment | — | (22,171 | ) | |||||
| Net cash used in investing activities | — | (22,171 | ) | |||||
| Cash flows from financing activities: | ||||||||
| Payments of offering costs related to IPO | (249,246 | ) | (166,906 | ) | ||||
| Deposits received related to subscribed shares | — | 795,187 | ||||||
| Net cash (used in) provided by financing activities | (249,246 | ) | 628,281 | |||||
| Effect of exchange rate changes on cash and restricted cash | 15,205 | (19,109 | ) | |||||
| Net (decrease) increase in cash and restricted cash | (30,381 | ) | 4,572,065 | |||||
| Cash and restricted cash, beginning of year | 6,317,200 | 7,842,802 | ||||||
| Cash and restricted cash, end of year | 6,286,819 | 12,414,867 | ||||||
| Reconciliation of cash and restricted cash to the consolidated balance sheets | ||||||||
| Cash | $ | 676,874 | 1,620,180 | |||||
| Restricted cash | 5,609,945 | 10,794,687 | ||||||
| Total cash and restricted cash | $ | 6,286,819 | 12,414,867 | |||||
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