Metalpha Technology Holding Ltd 20-F for FY2026
Metalpha Technology Holding Ltd (MATH)
About this 20-F
Metalpha Technology Holding Ltd filed this 20-F on August 6, 2026, covering the fiscal year ended March 31, 2026 (FY2026).
Headline figures
Fiscal year ended March 31, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $37.13M
- down 16.7% from $44.57M a year earlier
- Net income
- $1.28M
- down 91.9% from net income of $15.89M a year earlier
- Diluted EPS
- $0.02
- down 92.9% from $0.28 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
OR
For the fiscal year ended
OR
OR
Date of event requiring this shell company report:
For the transition period from _____________ to _____________
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(Name, Telephone, and/or Facsimile number and Address of Company Contact Person)
Securities registered or to be registered pursuant to Section 12(b) of the Act:
| Title of Each Class | Trading Symbol(s) | Name of Each Exchange on Which Registered | ||
Securities registered or to be registered pursuant to Section 12(g) of the Act:
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Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.
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Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐
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Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of “large accelerated filer,” accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| ☒ | Emerging growth company |
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| † | The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012. |
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
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| U.S. GAAP ☐ | as issued by the International Accounting Standards Board ☒ | Other ☐ |
| * | If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow. Item 17 ☐ Item 18 ☐ |
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ☐ No ☐
TABLE OF CONTENTS
i
INTRODUCTION
Except where the context otherwise indicates and for the purpose of this annual report only:
| ● | “China” or “PRC” refers to the People’s Republic of China and only when this annual report refers to specific laws and regulations adopted by the PRC, excludes Hong Kong, Macau and Taiwan; |
| ● | “IFRS” refers to the International Financial Reporting Standards as issued by the International Accounting Standards Board; |
| ● | “HKD” refers to the legal currency of Hong Kong; |
| ● | “Metalpha,” “we,” “us,” “our company” or “our” refers to Metalpha Technology Holding Limited and its subsidiaries; |
| ● | “Meta Rich” refers to Meta Rich Limited, a business company limited by shares incorporated under the laws of the British Virgin Islands and a wholly owned subsidiary of Sweet Lollipop; |
| ● | “Metalpha HK” refers to Metalpha Holding (HK) Limited (formerly known as Longyun International Holdings Limited), a private company limited by shares incorporated under the laws of Hong Kong and a wholly owned subsidiary of Sweet Lollipop; |
| ● | “Northstar Technologies” refers to Northstar Technologies Holdings Limited, formerly known as Antalpha Holdings Limited, a business company incorporated under the laws of British Virgin Islands, and/or its subsidiaries, including but not limited to Northstar Technologies Holdings Limited, formerly known as Armada Technologies Holdings Limited before July 19, 2024 and Antalpha Technologies Holdings Limited before November 30, 2023, and Polaris Technologies Group Limited, formerly known as Antalpha Technologies Limited; |
| ● | “PCAOB” refers to the Public Company Accounting Oversight Board; |
| ● | “RMB” or “Renminbi” refers to the legal currency of China; |
| ● | “SEC” refers to the U.S. Securities and Exchange Commission; |
| ● | “SFC” refers to Securities and Futures Commission of Hong Kong; |
| ● | “shares,” “Shares,” or “Ordinary Shares” refers to the ordinary shares, par value US$0.0001 per share, of Metalpha Technology Holding Limited; |
| ● | “Sweet Lollipop” refers to Sweet Lollipop Co., Ltd., a business company limited by shares incorporated under the laws of the British Virgin Islands and a wholly-owned subsidiary of Metalpha Technology Holding Limited; and |
| ● | “transaction size” refers to the total amount paid by our customers for the derivative products that were traded with us in a given period; |
| ● | “U.S. dollars,” “US$,” “$,” or “dollars” refers to the legal currency of the United States. |
Our reporting currency is U.S. dollars. This annual report contains translations of certain foreign currency amounts into U.S. dollars for the convenience of the reader. Unless otherwise stated, the conversions between U.S. dollars and Hong Kong dollars were made at the rate of HK$7.8400 to US$1.00, the exchange rate on March 31, 2026 set forth in the H.10 statistical release of The Board of Governors of the Federal Reserve Board. We make no representation that any Hong Kong dollars or U.S. dollar amounts could have been, or could be, converted into U.S. dollars or Hong Kong dollars, as the case may be, at any particular rate, or at all. Any discrepancies in any table between totals and sums of amounts listed therein are due to rounding.
ii
FORWARD-LOOKING INFORMATION
This annual report on Form 20-F contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that involve substantial risks and uncertainties. These statements involve known and unknown risks, uncertainties, and other factors, including those listed under “Item 3. Key Information—D. Risk Factors,” that may cause our actual results, performance, or achievements to be materially different from those expressed or implied by the forward-looking statements.
You can identify some of 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. We have based these forward-looking statements largely on our current expectations and projections about future events that we believe may affect our financial condition, results of operations, business strategy, and financial needs. These forward-looking statements include statements relating to:
| ● | future financial and operating results, including revenue, income, expenditures, cash balances, and other financial items; |
| ● | our ability to execute our growth, expansion, and acquisition strategies, including our ability to meet our goals; |
| ● | anticipated trends, growth rates, and challenges in our business, the crypto economy, the price and market capitalization of crypto assets and in the markets in which we operate; |
| ● | market acceptance of our products and services; |
| ● | current and future economic and political conditions; |
| ● | our ability to compete in an industry with low barriers to entry; |
| ● | our capital requirements and our ability to raise any additional financing which we may require; |
| ● | our ability to stay in compliance with applicable laws and regulations and relevant government policies that currently apply or become applicable to our business both in the United States and internationally given the highly evolving and uncertain regulatory landscape; |
| ● | our ability to maintain competitiveness in the markets in which we operate; |
| ● | our ability to protect our intellectual property rights and secure the right to use other intellectual property that we deem to be essential or desirable to the conduct of our business; |
| ● | our ability to hire and retain qualified management personnel and key employees in order to enable us to develop our business; |
| ● | our ability to retain the services of key personnel; |
| ● | overall industry and market performance; and |
| ● | other assumptions described in this annual report underlying or relating to any forward-looking statements. |
These forward-looking statements involve various risks and uncertainties. Although we believe that our expectations expressed in these forward-looking statements are reasonable, our expectations may later be found to be incorrect. Our actual results could be materially different from our expectations. Other sections of this annual report include additional factors that could adversely impact our business and financial performance. Moreover, we operate in an evolving environment. New risk factors and uncertainties emerge from time to time and it is not possible for our management to predict all risk factors and uncertainties, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. You should read thoroughly this annual report and the documents that we refer to with the understanding that our actual future results may be materially different from, or worse than, what we expect. We qualify all of our forward-looking statements by these cautionary statements.
The forward-looking statements made in this annual report relate only to events or information as of the date on which the statements are made in this annual report. You should not rely upon forward-looking statements as predictions of future events. Except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events, or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events. You should read this annual report and the documents that we refer to in this annual report and exhibits to this annual report completely and with the understanding that our actual future results may be materially different from what we expect.
iii
PART I
ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
Not Applicable.
ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE
Not Applicable.
ITEM 3. KEY INFORMATION
Corporate Structure
Metalpha Technology Holding Limited is a Cayman Islands holding company. It does not engage in operations itself but rather conducts its operations through its subsidiaries incorporated in the British Virgin Islands, Panama and Hong Kong.
The following diagram illustrates our corporate structure as of the date of this annual report, including our significant subsidiaries.
| A. | [Reserved] |
| B. | Capitalization and Indebtedness |
Not Applicable.
| C. | Reasons for the Offer and Use of Proceeds |
Not Applicable.
| D. | Risk Factors |
1
Summary of Risk Factors
Investing in our Ordinary Shares involves significant risks. You should carefully consider all of the information in this annual report before making an investment in our Ordinary Shares. Below please find a summary of the principal risks we face, organized under relevant headings. These risks are discussed more fully below in this section.
Risks Relating to Our Business and Industry
Risks and uncertainties related to our business and industries include, but are not limited to, the following:
| ● | We have a limited operating history and are subject to the risks encountered by early-stage companies; |
| ● | We may need additional capital to fund our future operations and, if it is not available when needed, we may need to reduce our planned expansion and marketing efforts, which may reduce our income; |
| ● | Our digital asset business is subject to customer concentration risk; |
| ● | We rely on certain related party for products subscription and any shortage or interruption in subscription could slow our growth and reduce our profitability; |
| ● | Our business operations significantly depend on several key partners in the crypto industry for trading and asset custody. If these key partners experience operational disruptions due to mismanagement or regulatory sanctions resulting from non-compliance, their services may be interrupted or we may lose our assets which materially and adversely affect our business operations, financial condition and future growth; |
| ● | We are subject to a highly evolving regulatory landscape and any adverse changes to, or our failure to comply with, any laws and regulations could adversely affect our business, reputation, prospects or operations; and |
| ● | The loss or destruction of private keys required to access any digital assets held by us may be irreversible. If we are unable to access our private keys or if we experience a hack or other data loss relating to our ability to access any digital assets, it could cause regulatory scrutiny, reputational harm, and other losses. |
Risks Related to Doing Business in Jurisdictions Where We Operate
Risks and uncertainties related doing business in jurisdictions we operate include, but are not limited to, the following:
| ● | A downturn in the Hong Kong, China or global economy, and economic and political policies of China could materially and adversely affect our business and financial condition; |
| ● | The Hong Kong legal system embodies uncertainties which could limit the legal protections available to us; |
| ● | Hong Kong laws and regulations related to the cryptocurrency business is still under development and subject to significant changes, and any potential changes in the legal and regulatory landscape may adversely affect our business financial condition and future expansion; |
| ● | Hong Kong regulatory requirement of prior approval for transfer of shares in excess of certain threshold may restrict future takeovers and other transactions; and |
| ● | You may experience difficulties in effecting service of legal process, enforcing foreign judgments, or bringing actions in China against us or our management named in this annual report based on foreign laws. It may also be difficult for you or overseas regulators to conduct investigations or collect evidence within China. |
2
Risks Relating to Our Ordinary Shares and the Trading Market
Risks and uncertainties related to our Ordinary Shares and the trading market include, but are not limited to, the following:
| ● | If we become directly subject to the scrutiny, criticism, and negative publicity involving U.S.-listed Chinese companies, we may have to expend significant resources to investigate and resolve the matter which could harm our business operations, stock price and reputation; |
| ● | The joint statement by the SEC and the PCAOB, rule changes by Nasdaq, and the Holding Foreign Companies Accountable Act all call for additional and more stringent criteria to be applied to emerging market companies upon assessing the qualification of their auditors, especially the non-U.S. auditors who are not inspected by the PCAOB. These developments could add uncertainties to our continued listing or future offerings of our securities in the U.S.; |
| ● | The market price of our Ordinary Shares may be volatile or may decline regardless of our operating performance; |
| ● | If we cannot continue to satisfy listing requirements and other rules of Nasdaq Capital Market, although we exempt from certain corporate governance standards applicable to U.S. issuers as a Foreign Private Issuer, our securities may be delisted, which could negatively impact the price of our securities and your ability to sell them; and |
| ● | We have a substantial number of warrants outstanding. The exercise of our outstanding warrants can have a dilutive effect on our Ordinary Shares. |
Risks Relating to Our Business and Industry
We have a limited operating history and are subject to the risks encountered by early-stage companies.
We have been a provider of digital asset services since December 2021. As a fairly new operation, our business strategies and model are constantly being tested by the market. As such, our business may be subject to significant fluctuations in operating results.
Accordingly, you should consider our prospects in light of the costs, uncertainties, delays, and difficulties frequently encountered by companies with a limited operating history. In particular, you should consider that there is a significant risk that:
| ● | Our ability to introduce and manage the development of new digital asset business; |
| ● | We may require additional capital to develop and expand our operations, which may not be available to us when we require such additional capital; |
| ● | Our digital asset business is subject to customer concentration risk; |
| ● | Our marketing and growth strategy may not be successful; and |
| ● | Our business may be subject to significant fluctuations in operating results. |
Our future growth will depend substantially on our ability to address these and the other risks described in this annual report. If the operating entities do not successfully address these risks, their, and consequentially, our business would be significantly harmed.
3
We may need additional capital to fund our future operations and, if it is not available when needed, we may need to reduce our planned expansion and marketing efforts, which may reduce our income.
We believe that our existing working capital and cash available from operations will enable us to meet our working capital requirements for at least the next 12 months. However, if cash from our future operations is insufficient, or if cash is used for acquisitions or other currently unanticipated purposes, we may need additional capital. In addition, if we fail to generate sufficient net income from our business, it may continue to expend significant amounts of capital. As a result, we could be required to raise additional capital. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the issuance of such securities could result in dilution of the shares held by existing shareholders. If additional funds are raised through the issuance of debt or equity securities, such securities may provide the holders certain rights, preferences, and privileges senior to those of shareholders holding our Ordinary Shares, and the terms of any such debt securities could impose restrictions on the operating entities’ operations. We cannot assure you that additional capital, if required, will be available on acceptable terms, or at all. If we are unable to obtain sufficient amounts of additional capital, we may be required to reduce our scope of planned product development and marketing efforts, which could harm our business, financial condition and operating results.
Our success depends substantially on the continued retention of certain key personnel and our ability to hire and retain qualified personnel in the future to support our growth and execute our business strategy.
If our senior executives or other key personnel are unable or unwilling to continue in their present positions, our business may be disrupted and its financial condition and results of operations may be materially and adversely affected. While we depend on the abilities and participation of our current management team generally, we rely particularly upon our trading team. The loss of the services of our trading team for any reason could significantly adversely impact our business and results of operations. Competition for senior management and senior technology personnel is intense and the pool of qualified candidates is very limited. We cannot assure you that the services of our senior executives, trading team and other key personnel will continue to be available to us, or that we will be able to find a suitable replacement if any of them were to leave.
We rely on certain related party for products subscription and any shortage or interruption in subscription could slow our growth and reduce our profitability.
Northstar Technologies is a substantial shareholder of the Company and hence it is a related party of the Company. Northstar Technologies is one of our key customers who subscribe to our issued cryptocurrency derivative products. For the fiscal year ended March 31, 2026, the aggregate transaction size of products we issued was approximately $1,124.2 million, among which Northstar Technologies subscribed to products with a transaction size of approximately $223.1 million, accounting for approximately 19.8% of the total transaction size for the same fiscal year.
In addition, Northstar Technologies provides significant support to our operations through its subsidiaries. These subsidiaries deliver technical management services and customer referral services, contributing significantly to our business growth and operational efficiency.
If our relationship with Northstar Technologies deteriorates for any reason, Northstar Technologies may slow down or even stop subscriptions to our products and/or terminate the services provided to us through its subsidiaries. As a result, our business, results of operations, financial condition and prospects could be materially and adversely affected.
4
Our digital asset business is subject to customer concentration risk.
For the fiscal year ended March 31, 2026, the aggregate transaction size of the products we issued was approximately $1,124.2 million, among which our top three customers subscribed to products of an aggregate transaction size of approximately $416.9 million, representing approximately 37.1% of the total transaction size for the same fiscal year. Our largest customer subscribed to products with a transaction size of approximately $223.1 million, accounting for approximately 19.8% of the total transaction size for the same fiscal year. There is no assurance that we will be able to maintain or expand our relationships with our top customers, or that they will continue to subscribe to our products in current subscription amounts or at all. If our top customers significantly reduce or even cease their subscriptions to our products, we may not be able to timely find alternative customers with comparable subscription amounts, or at all, and we may experience a significant decline in our income as a result. Moreover, the business and financial condition of our top customers may deteriorate, which may materially and adversely affect their subscriptions to our products. Any of the foregoing, if materializes, may materially and adversely affect our business, results of operations and financial condition.
The acceptance and widespread use of digital assets are subject to a variety of factors beyond our control. A decline in the acceptance and use of digital assets may adversely affect the investment in our securities.
Digital assets have only recently become accepted as a means of payment for goods and services by certain major retail and commercial outlets. There is currently limited use of digital assets, such as Bitcoin, in the retail and commercial markets, thus contributing to price volatility that could adversely affect an investment in our securities. In contrast, a significant portion of demand for digital assets is generated by speculators and investors seeking to profit from the short- or long-term holding of tokens. The relative lack of acceptance and use of digital assets in the retail and commercial markets, or a reduction of such use, limits the ability of end users to use digital assets to pay for goods and services. Such lack of acceptance or contraction in acceptance or use of digital assets may increase the price volatility or affect the value of digital assets we acquire or hold, which could materially and adversely affect our business operations, financial performance and prospects, as well as the investment in our securities.
Our business operations significantly depend on several key partners in the crypto industry for trading and asset custody. If these key partners experience operational disruptions due to fraud, security failures, mismanagement or regulatory sanctions resulting from non-compliance, their services may be interrupted or we may lose our assets which materially and adversely affect our business operations, financial condition and future growth.
Operational disruptions of crypto asset trading venues and asset custody providers due to fraud, business failures, hackers or malware, or regulatory sanctions may reduce confidence in the crypto assets market and result in our loss of assets which could have a material adverse effect on our business operations, financial condition and future growth.
Regulatory authorities in the United States and other jurisdictions have increased their scrutiny of crypto trading service providers in recent years, with several high-profile enforcement actions and settlements involving major industry participants, including Binance. Binance serves as our primary trading service provider with the majority of our hedging trades taking place on their platform. Simultaneously, Binance also acts as a crucial subscriber to our products. Our business relationship with Binance or any other crypto asset trading service provider, may expose us to heightened regulatory scrutiny or reputational risk, particularly if such entities are found to have engaged in or facilitated actions that are in violation of applicable laws, or become subject to enforcement actions. As a result, we may be required to restrict certain business relationships or incur additional costs for compliance or management of these risks, and face potential disruptions in our business operations. Any of these factors could adversely affect our business, financial condition and future growth.
5
We are subject to a highly evolving regulatory landscape and any adverse changes to, or our failure to comply with, any laws and regulations could adversely affect our business, reputation, prospects or operations.
Until recently, relatively little regulatory attention has been directed toward the crypto assets market by U.S. federal and state governments, non-U.S. governments and self-regulatory agencies. As crypto assets have grown in popularity and in market size, the U.S. regulatory regime - namely the Federal Reserve Board, U.S. Congress and certain U.S. agencies (e.g., the SEC, the U.S. Commodity Futures Trading Commission (the “CFTC”), the Financial Crimes Enforcement Network (the “FinCEN”) and the Federal Bureau of Investigation), and local and foreign governmental organizations, consumer agencies and public advocacy groups have been examining the operations of crypto networks, users and platforms, with a focus on how crypto assets can be used to launder the proceeds of illegal activities, fund criminal or terrorist enterprises, and the safety and soundness of platforms and other service providers that hold crypto assets for users. Many of these entities have called for heightened regulatory oversight, and have issued consumer advisories describing the risks posed by crypto assets to users and investors. For instance, in March 2022, Federal Reserve Chair Jerome Powell expressed the need for regulation to prevent “cryptocurrencies from serving as a vehicle for terrorist finance and just general criminal behavior.” On March 8, 2022, President Biden announced an executive order on cryptocurrencies which seeks to establish a unified federal regulatory regime for cryptocurrencies. In the past year, several significant legislative and regulatory initiatives have been introduced or advanced, including proposed legislation to clarify the jurisdiction of the SEC and CFTC over digital assets, and licensing requirements, and enhanced AML and know-your-customer (“KYC”) obligations. The complexity and evolving nature of our business and the significant uncertainty surrounding the regulation of the crypto assets industry requires us to exercise our judgment as to whether certain laws, rules, and regulations apply to us, and it is possible that governmental bodies and regulators may disagree with our conclusions. To the extent we have not complied with such laws, rules and regulations, we could be subject to significant fines, revocation of licenses, limitations on our products and services, reputational harm, and other regulatory consequences, each of which may be significant and could adversely affect our business, operating results, and financial condition.
Additionally, the digital asset and cryptocurrency sector has experienced significant volatility and disruption, such as the bankruptcy filing of FTX, the third largest digital asset exchange by volume at the time of its filing, and its affiliated hedge fund Alameda Research LLC, in recent years. These high-profile insolvencies, along with other operational failures and market events, have drawn increased attention from regulatory authorities such as the SEC. In response to these developments, regulatory agencies have intensified their scrutiny of participants in the crypto industry. Increasing regulation and regulatory scrutiny may result in additional costs for us and our management having to devote increased time and attention to regulatory matters, change aspects of our business or result in limits on the utility of Bitcoin. In addition, regulatory developments and/or our business activities may require us to comply with certain regulatory regimes. Increasingly strict legal and regulatory requirements and any regulatory investigations and enforcement may result in changes to our business, as well as increased costs, supervision and examination. Moreover, new laws, regulations, or interpretations may result in additional litigation, regulatory investigations, and enforcement or other actions. Adverse changes to, or our failure to comply with, any laws and regulations may have, an adverse effect on our reputation and brand and our business, operating results, and financial condition.
In addition, cryptocurrencies may be used by market participants for black market transactions, to conduct fraud, money laundering and terrorism-funding, tax evasion, economic sanction evasion or other illegal activities. As a result, governments may seek to regulate, restrict, control or ban the mining, using, holding and transferring of cryptocurrencies. We may not be able to eliminate all instances where other parties use cryptocurrencies in money laundering or other illegal or improper activities. We cannot assure you that we will successfully detect and prevent all money laundering or other illegal or improper activities which may adversely affect our reputation, business, financial condition and results of operations.
Any failure to obtain or renew any required approvals, licenses, permits or certifications could materially and adversely affect our business and results of operations.
As of the date of this annual report, the entirety of our cryptocurrency business is operated outside of mainland China and the United States. In accordance with the laws and regulations in the jurisdictions in which we operate, we may be required to maintain various approvals, licenses, permits and certifications in order to operate our cryptocurrency business. Complying with such laws and regulations may require substantial expense, and any non-compliance may expose us to liability. In the event of non-compliance, we may have to incur significant expenses and divert substantial management time to rectify the incidents. In the future, if we fail to obtain all the necessary approvals, licenses, permits and certifications, we may be subject to fines or the suspension of operations of any business that do not have all the requisite approvals, licenses, permits and certifications, which could materially and adversely affect our business and results of operations. We may also experience adverse publicity arising from non-compliance with government regulations, which would negatively impact our reputation.
6
We have adopted the development strategy to focus on the expansion of our business products of issuing cryptocurrency derivative products in international markets. As such, we are subject to regulations applicable to operators of cryptocurrency business and derivative products business in these jurisdictions. Our subsidiary, LSQ Capital Limited, engages in advising on securities and asset management and is subject to the regulatory framework of the SFC. Furthermore, the regulatory landscape for digital assets is rapidly evolving, including the SFC’s recent implementation of the VASP licensing regime. We are continuously evaluating our cryptocurrency derivative product offerings and operational footprint against these highly complex and evolving local requirements to determine if additional VASP or other regulatory licenses are required in Hong Kong or other jurisdictions. Because these regulatory frameworks are new and subject to varying interpretations by regulators, we cannot assure you that our current operations will not be deemed to require additional licenses or that we will be able to obtain, maintain or renew any such required government approvals on commercially reasonable terms or at all. We do not believe we need to obtain additional governmental approvals or licenses for issuing cryptocurrency derivative products to our customers in these jurisdictions at this time. However, we cannot assure you that we will be able to obtain, maintain or renew any required government approval, permit, licenses for our future operations on commercially reasonable terms and in a timely manner or at all. Failure to maintain or renew these government approvals, permit or licenses for our international operations may cause us to suspend or terminate our cryptocurrency derivative product operations in such jurisdictions, and may subject us to regulatory investigations or legal proceedings and fines in these jurisdictions, which could disrupt our international operations and materially and adversely affect our business, financial condition and results of operations.
More broadly, we cannot assure you that we will be able to fulfill all the conditions necessary to obtain the required government approvals in the jurisdictions where we operate, or that relevant government officials in these jurisdictions will always, if ever, exercise their discretion in our favor, or that we will be able to adapt to any new laws, regulations or policies. There may also be delays on the part of government authorities in reviewing our applications and granting approvals, whether due to the lack of administrative resources or the imposition of new rules, regulations, government policies or their implementation, interpretation and enforcement, or for no discernible reason at all. If we are unable to obtain, or experience material delays in obtaining, necessary government approvals, our operations may be substantially disrupted, which could materially and adversely affect our business, financial condition and results of operations.
We may face several risks due to disruptions in the crypto asset markets, including but not limited to the risk from depreciation in our stock price, loss of customer demand, financing risk, risk of increased losses or impairments in our investments or other assets, risks of legal proceedings and government investigations, and risks from price declines or price volatility of crypto assets.
In 2022, some of the well-known crypto asset market participants, including Celsius Network, Voyager Digital Ltd. and Three Arrows Capital, declared bankruptcy, resulting in a loss of confidence in participants of the digital asset ecosystem and negative publicity surrounding digital assets more broadly. In November 2022, FTX, which was the third largest digital asset exchange by volume at the time, halted customer withdrawals and subsequently filed for bankruptcy. The collapse of FTX, followed by a high-profile conviction of its former chief executive officer for fraud and related offences, has resulted in negative publicity and may have led to a loss of confidence among participants in the digital asset ecosystem.
In addition, several other entities in the digital asset industry filed for bankruptcy following FTX’s bankruptcy filing, such as BlockFi Inc. and Genesis Global Capital, LLC. In January 2023, the SEC brought charges against Genesis Global Capital, LLC and Gemini Trust Company, LLC for their alleged unregistered offer and sale of securities to retail investors. In February 2023, the SEC also entered into a settlement agreement with cryptocurrency exchange Payward Ventures, Inc. and Payward Trading Ltd. (doing business as, and hereinafter, “Kraken”) for failing to register its “staking-as-a-service” program as a securities offering in violation of Section 5 of the Securities Act. Pursuant to the settlement agreement, Kraken agreed to cease operations of its staking program in the U.S. and pay the SEC $30 million in fines. Moreover, in November 2023, the U.S. Department of the Treasury settled charges against Binance for violations of U.S. anti-money laundering and sanctions laws.
In response to these events, the digital asset markets have experienced extreme price volatility and several other entities in the digital asset industry have been, and may continue to be, negatively affected, further undermining confidence in the digital assets markets. These events have also negatively impacted the liquidity of the digital assets markets as certain entities affiliated with FTX engaged in significant trading activity. If the liquidity of the digital assets markets continues to be negatively impacted by these events, digital asset prices may continue to experience significant volatility and confidence in the digital asset markets may be further undermined. These events are continuing to develop, and it is not possible to predict at this time all of the risks that they may pose to us or on the digital asset industry as a whole.
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We had no direct exposure to FTX or any of the above-mentioned cryptocurrency companies. We do not have material assets that may not be recovered or may otherwise be lost or misappropriated due to the bankruptcies. However, the failure or insolvency of large exchanges like FTX may cause decreases in the prices of cryptocurrencies and investor confidence in the ecosystem, which could adversely affect investments in our products. The high volatility and downturns in cryptocurrency prices generally do not directly impact our business, and heightened volatility in cryptocurrency prices can even increase our trading profits. However, high volatility and downturns in cryptocurrency prices may impact our customers’ confidence in the market, thereby adversely affecting our operations and financial condition. We will timely adjust our strategies to expand our business and optimize our operating efficiency in the current dynamic market conditions.
We cannot assure that the price of cryptocurrencies will remain high enough to sustain our operation or that the price of cryptocurrencies will not decline significantly in the future. Fluctuations in the price of cryptocurrencies have had and are expected to continue to have an immediate impact on the trading price of our Ordinary Shares even before our financial performance is affected, if at all. To the extent investors view our Ordinary Shares as linked to the value of our cryptocurrency derivative product services, the decline of cryptocurrency value may have a material adverse effect on the market value of our Ordinary Shares.
In addition, a perceived lack of stability in the digital asset exchange market and the closure or temporary shutdown of digital asset exchanges due to business failure, hackers or malware, government-mandated regulation, or fraud, may reduce confidence in digital asset networks and result in greater volatility in cryptocurrency values. These potential consequences of a digital asset exchange’s failure could adversely affect an investment in us or the loss of customer demand for our products and services with respect to our cryptocurrency business.
As of the date of this annual report, we are not subject to any legal proceedings or government investigations in the United States or in other jurisdictions. However, in the past, following periods of volatility in the market price of a company’s securities, securities class-action litigation has often been brought against that company. We may become involved in this type of litigation in the future. Litigation of this type may be expensive to defend and may divert our management’s attention and resources from the operation of our business.
Political or economic crises may result in large-scale sales of digital assets, which could cause a reduction in the value of some or all digital assets and adversely affect the investment in our securities.
As a relatively new alternative to fiat currencies that are backed by central governments, digital assets are subject to supply and demand forces based upon the desirability of an alternative and decentralized means of buying and selling goods and services. It is also unclear how such supply and demand will be impacted by geopolitical events. Nevertheless, political or economic crises may result in large-scale acquisitions or sales of digital assets either globally or locally. Large-scale sales of digital assets would cause a reduction in their value and could adversely affect the investment in our securities.
Changes in digital asset networks and blockchain vulnerabilities could adversely affect the investment in our securities.
Various technical issues and changes in the underlying digital asset networks or blockchains may adversely affect the value of digital assets and could adversely affect the investment in our securities, including:
| ● | changes to the protocols and software of digital asset networks, which are proposed by network contributors and could alter the properties and functionality of the networks; |
| ● | updates to the blockchain’s structure, such as block size or transaction limitations, which could impact transaction speed and overall network functionality, and in extreme cases, could lead to a “hard fork”, creating incompatible blockchain implementations; |
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| ● | the lack of guaranteed financial incentives for contributors to maintain and develop the open-source digital asset networks, which could lead to failures in monitoring and upgrading the network; |
| ● | potential manipulation of the blockchain by persons gain control of more than 50% of the network’s processing power; |
| ● | significant reductions in the aggregate processing power or hash rate on any digital asset network, which could lead to delays in transaction confirmations; |
| ● | insufficient award of award of digital assets for solving blocks and transaction fees, which could impact the network’s functionality. |
The recent disruption in the crypto asset markets may harm our reputation.
Due to the recent disruption in the crypto asset markets, our customer, suppliers and other business partners may deem our business to be risky and lose confidence in entering into business transactions with us. It may be difficult for us to reach the same business terms with such business partners like we did before. For example, our suppliers may require more deposits or advance payments from us.
In addition, additional regulations may subject us to investigation, administrative or regulatory proceedings, and civil or criminal litigations, all of which could harm our reputation and affect our business operation and the value of our Ordinary Shares. If we have difficulties to comply with such additional regulatory and registration requirements, we may have to cease certain or all of our operations. As of the date of this annual report, there is no material impact on our operations or financial conditions associated with any reputational harm that we may face in light of the recent disruption in the crypto asset markets. However, there is no guarantee that there will not be any material adverse effect on our business, financial condition and results of operations associated with the reputational harm that we may face in light of the recent disruption in the crypto asset markets.
Our offering of digital asset services may be subject to U.S. jurisdiction if it is not able to avoid offering or selling cryptocurrency derivative products to U.S. customers. Additionally, the offering of digital asset services may be deemed as securities offerings in other jurisdictions where it is offered.
To the extent that we are appropriately restricting U.S. persons from obtaining our cryptocurrency derivative products, such business should not be subject to U.S. securities laws. However, whether we are effective in avoiding U.S. jurisdiction by actually not offering or selling our cryptocurrency derivative products to U.S. customers would depend on, among others, the existence and effectiveness of measures adopted in practice against U.S. persons obtaining its services, such as screening mechanisms and/or contractual restrictions over transfers of the contracts to U.S. persons in the secondary market. If certain U.S. customers, or customers from other jurisdictions where our offering of cryptocurrency derivative products may be deemed as securities offerings, end up obtaining access to our cryptocurrency derivative products, and we have not registered the offering of such products, we may be deemed in breach of applicable securities laws. Such breach may result in sizable fines, reputational harms, restrictions of certain businesses, and materially adversely affect our business operation and financial conditions.
Because there has been limited precedent set for financial accounting for cryptocurrencies, the determinations that we have made for how to account for cryptocurrency-related transactions may be subject to change.
The accounting rules and regulations that we must comply with are complex and subject to interpretation by the International Accounting Standards Board (“IASB”), the SEC, and various bodies formed to promulgate and interpret appropriate accounting principles. A change in these principles or interpretations could have a significant effect on our reported financial results, and may even affect the reporting of transactions completed before the announcement or effectiveness of a change. Further, there has been limited precedents for the financial accounting of cryptocurrencies and related valuation and revenue recognition, and no official guidance has been provided by the IASB or the SEC. As such, there remains significant uncertainty on how companies can account for cryptocurrency transactions, cryptocurrencies, and related income. Uncertainties in or changes to in regulatory or financial accounting standards could result in the need to changing our accounting methods and restate our financial statements and impair our ability to provide timely and accurate financial information, which could adversely affect our financial statements, result in a loss of investor confidence, and more generally impact our business, operating results, and financial condition.
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The loss or destruction of private keys required to access any digital assets held by us may be irreversible. If we are unable to access our private keys or if we experience a hack or other data loss relating to our ability to access any digital assets, it could cause regulatory scrutiny, reputational harm, and other losses.
Cryptocurrencies are generally controllable only by the possessor of the unique private key relating to the digital wallet in which the digital assets are held. While blockchain protocols typically require public addresses to be published when used in a transaction, private keys must be safeguarded and kept private in order to prevent a third party from accessing the digital assets held in such a wallet. We will publish the public key relating to digital wallets in use when we verify the receipt of transfers and disseminate such information into the network, but we will need to safeguard the private keys relating to such digital wallets. We safeguard and keep private the private keys relating to our digital assets by primarily utilizing enterprise multi-signature storage solution provided by an established third-party digital asset financial services platform.
To the extent that any of the private keys relating to our wallets containing digital assets held by us is lost, destroyed, or otherwise compromised or unavailable, and no backup of the private key is accessible, we will be unable to access digital assets held in the related wallet. Furthermore, as currently our digital wallet is maintained by a third-party digital asset financial services platform, we cannot provide assurance that our wallet will not be hacked or compromised, or that any information leakage and data security breach of such platform will not compromise the security of our digital wallet. Digital assets and blockchain technologies have been, and may in the future be, subject to security breaches, hacking, or other malicious activities. Any loss of private keys relating to, or hack or other compromise of, digital wallets used to store our digital assets could subject us to significant financial losses, and we may be unable to distribute mining rewards to customers of our mining pool services, or adequately compensate our customers for damages caused by such security breach. As such, any loss of private keys due to a hack, employee or service provider misconduct or error, or other compromise by third parties could hurt our brand and reputation, result in significant losses, and adversely impact our business, results of operations and/or financial condition.
We may not have adequate sources of recovery if the cryptocurrencies held by us are lost, stolen or destroyed, which could have a material adverse effect on our business, financial condition and results of operations.
Our portfolio of digital assets is held under the custodianship of various cryptocurrency service providers, including but not limited to Binance, Ceffu, Cobo and Northstar Technologies. We believe that the security procedures that the cryptocurrency service providers utilize, such as issuing username, password, hardware tokens and manual review of the transactions inflow and outflow, are reasonably designed to safeguard the cryptocurrencies from theft, loss, destruction or other issues relating to hackers and technological attack. Nevertheless, the security procedures cannot guarantee the prevention of any loss due to a security breach, software defect or act of God that may be borne by us. If such cryptocurrencies are lost, stolen or destroyed under circumstances rendering a third party liable to us, we may not have the financial resources or insurance sufficient to satisfy any or all of our claims against the third party, or have the ability to retrieve, restore or replace the lost, stolen or destroyed cryptocurrencies due to governing network protocols and the strength of the cryptographic systems associated with such cryptocurrencies. To the extent that we are unable to recover on any of our claims against any such third party, such loss could have a material adverse effect on our business, financial condition and results of operations.
If such services are commercially available, we will consider adding regulated banks, rather than solely relying on crypto custodian, as the custodian for a material amount of our cryptocurrencies. Obtaining cryptocurrency custody services from a regulated bank may confer benefits such as improved security and reduced fraud. Nevertheless, until now, banks have generally declined to provide custody services for cryptocurrencies and other virtual assets, due to the absence of clarity on permissibility and on regulators’ views of these activities generally. On July 22, 2020, the U.S. Office of the Comptroller of the Currency released publicly an interpretive letter confirming the authority of a national bank to provide cryptocurrency custody services for customers, providing that a national bank engaging in such activities should develop and implement those activities consistent with sound risk management practices and align them with the bank’s overall business plans and strategies as set forth in the guidance. On January 27, 2023, the Board of Governors of the Federal Reserve System released publicly a policy statement to interpret section 9(13) of the Federal Reserve Act, clarifying that the state member banks are not prohibited under the policy from providing safekeeping services for crypto-assets in a custodial capacity, if such activities are conducted in a safe and sound manner and in compliance with consumer, anti-money-laundering, and anti-terrorist-financing laws. However, it will take time for banks to start offering cryptocurrencies custodian services, and before then, we may have to continue to rely on crypto custodians for our crypto custodian needs.
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A particular digital asset’s status as a “security” in any relevant jurisdiction is subject to a high degree of uncertainty, and if we are unable to properly characterize a digital asset, we may be subject to regulatory scrutiny, investigations, fines, and other penalties, which may adversely affect our business, results of operations and/or financial condition.
The SEC and its staff have taken the position that certain digital assets fall within the definition of a “security” under the U.S. federal securities laws. The legal test for determining whether any given digital asset is a security is a highly complex, fact-driven analysis that evolves over time, and the outcome is difficult to predict. The SEC generally does not provide advance guidance or confirmation on the status of any particular digital asset as a security. Additionally, the SEC’s views in this area have evolved over time, and it is difficult to predict the direction or timing of any continuing evolution. Furthermore, it is also possible that a change in the governing administration or the appointment of new SEC commissioners could substantially impact the views of the SEC and its staff. Public statements by senior officials at the SEC indicate that the SEC does not intend to take the position that Bitcoin or Ethereum, in their current form, are securities. However, Bitcoin and Ethereum are the only digital assets as to which senior officials at the SEC have publicly expressed such a view. Such statements are not official policy statements by the SEC and reflect only the speakers’ views, which are not binding on the SEC or any other agency or court, and cannot be generalized to any other digital asset, such as Dogecoin. With respect to all other digital assets, there is currently no certainty under the applicable legal test that such assets are not securities, notwithstanding the conclusions we may draw based on our assessment regarding the likelihood that a particular digital asset could be deemed a “security” under applicable laws. Similarly, though the SEC’s Strategic Hub for Innovation and Financial Technology published a framework for analyzing whether any given digital asset is a security in April 2019, this framework is also not a rule, regulation or statement of the SEC and is not binding on the SEC.
Several foreign jurisdictions have taken a broad-based approach to classifying digital assets as “securities,” while other foreign jurisdictions have adopted a narrower approach. As a result, certain digital assets may be deemed to be a “security” under the laws of some jurisdictions but not others. Various foreign jurisdictions may, in the future, adopt additional laws, regulations, or directives that affect the characterization of digital assets as “securities.”
The classification of a digital asset as a security under applicable law has wide-ranging implications for the regulatory obligations that flow from the offer, sale, trading, and clearing of such assets. For example, a digital asset that is a security in the United States may generally only be offered or sold in the United States pursuant to a registration statement filed with the SEC or in an offering that qualifies for an exemption from registration. Persons that effect transactions in digital assets that are securities in the United States may be subject to registration with the SEC as a “broker” or “dealer.” Platforms that bring together purchasers and sellers to trade digital assets that are securities in the United States are generally subject to registration as national securities exchanges, or must qualify for an exemption, such as by being operated by a registered broker-dealer as an alternative trading system (“ATS”), in compliance with rules for ATSs. Persons facilitating clearing and settlement of securities may be subject to registration with the SEC as a clearing agency. Foreign jurisdictions may have similar licensing, registration, and qualification requirements.
We have adopted risk-based policies and procedures to analyze whether the digital assets that we hold and sell for our own account could be deemed to be a “security” under applicable laws. Our policies and procedures do not constitute a legal standard, but rather represent our management’s assessment, based on advice of our securities counsel, regarding the likelihood that a particular digital asset could be deemed a “security” under applicable laws. Regardless of our conclusions, we could be subject to legal or regulatory action in the event the SEC, a foreign regulatory authority, or a court were to determine that a digital asset currently held by us is a “security” under applicable laws. If the digital assets mined and held by us are deemed as securities, it could limit distributions, transfers, or other actions involving such digital assets in the global markets.
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Because cryptocurrencies may be determined to be investment securities, we may inadvertently violate the Investment Company Act of 1940, as amended, and we may incur substantial losses and become subject to such act as a result.
We believe that we are not engaged in the business of investing, reinvesting, or trading in securities, and we do not hold ourselves out as being engaged in those activities. However, under the Investment Company Act of 1940, as amended (the “Investment Company Act”), a company may be deemed an investment company under section 3(a)(1)(C) thereof if the value of its investment securities is more than 40% of its total assets (exclusive of government securities and cash items) on an unconsolidated basis.
The cryptocurrency we own and acquire may be deemed an investment security by the SEC, although we do not believe any of the cryptocurrencies we own and acquire are securities.
Current and future legislation and the SEC rulemaking and other regulatory developments, including interpretations released by a regulatory authority, may impact the manner in which cryptocurrencies are treated for classification and clearing purposes. The SEC’s July 25, 2017 Report expressed its view that digital assets may be securities depending on the facts and circumstances. As of the date of this annual report, we are not aware of any rules that have been proposed to regulate cryptocurrencies as securities. We cannot be certain as to how future regulatory developments will impact the treatment of cryptocurrency under the applicable U.S. federal or state laws. Such additional registrations may result in extraordinary, non-recurring expenses, thereby materially and adversely impacting an investment in us. If we determine not to comply with such additional regulatory and registration requirements, we may seek to cease certain of our operations. Any such action may adversely affect an investment in us.
Classification as an investment company under the Investment Company Act requires registration with the SEC. If an investment company fails to register, it would have to stop doing almost all business, and its contracts would become voidable. Registration is time consuming and restrictive and would require a restructuring of our operations, and we would be very constrained in the kind of business we could do as a registered investment company. Furthermore, we would become subject to substantial regulation concerning management, operations, transactions with affiliated persons and portfolio composition, and would need to file reports under the Investment Company Act regime. The cost of such compliance would result in substantial additional expenses, and the failure to complete the required registration would have a materially adverse impact to conduct our operations.
We do not maintain insurance for our digital assets, which may expose us and our shareholders to the risk of loss of our digital assets, and there will be limited rights of legal recourse available to us to recover our losses.
We do not maintain insurance for the digital assets held by us. Banking institutions will not accept our digital assets, and they are therefore not insured by the Federal Deposit Insurance Corporation or the Securities Investor Protection Corporation. Therefore, we may suffer loss with respect to our digital assets which is not covered by insurance, and we may not be able to recover any of our carried value in these digital assets if they are lost or stolen or suffer significant and sustained reduction in conversion spot price. If we are not otherwise able to recover damages from a malicious actor in connection with these losses, our business, results of operations and share price may be adversely affected.
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We may not be able to adequately protect our intellectual property rights, and our competitors may be able to offer similar products and services, which would harm our competitive position.
Our success depends in part upon our intellectual property rights. The algorithms we use in providing the digital asset services are all self-developed. As of March 31, 2026, we held two main domain names relating to our business, including our current and previous corporate websites. As of March 31, 2026, we held ten registered trademarks and the relevant rights to the logos of Metalpha and MeTone in various jurisdictions, including European Union, Hong Kong, Australia, Canada, Colombia, United Kingdom, Gambia, Indonesia, India, Iceland, Japan, South Korea, Mexico, Malaysia, Norway, New Zealand, Philippines, Rwanda, Singapore, Thailand, Tunisia, Turkey, Zambia, Zimbabwe, Belarus, Switzerland, Egypt, Morocco, Namibia, Russia, Ukraine, and Vietnam. The affiliates of our shareholder, Northstar Technologies, held 12 registered trademarks and nine pending trademark applications and the relevant rights to the logo of Metalpha in various jurisdictions, including China Taiwan, Bangladesh, and the United States have use and other relevant rights related to the “Metalpha” registered trademark and logo for our business operations. We rely primarily on trademark, copyright, service mark and trade secret laws, confidentiality procedures, license agreements and contractual provisions to establish and protect our proprietary rights over our products, procedures, algorithms and services. Other persons, including our competitors, could copy or otherwise obtain and use our technology without authorization, or develop similar intellectual property independently, and thus may be able to duplicate our products and services or design around any intellectual property rights we hold. We may also pursue the registration of our domain names, trademarks and service marks in various jurisdictions, including the United States. Although the protection afforded by copyright, trade secret and trademark law, written agreements and common law may provide some advantages, these statutory protections along with non-disclosure agreements with their employees may not be adequate to enable us to protect our intellectual property. Moreover, the intellectual property laws in certain jurisdictions are not considered as strong as comparable laws in the United States or the European Union. The enforcement of intellectual property rights in certain jurisdictions is difficult and, if we seek to commence litigation against any alleged infringer, there is no assurance that they will prevail. We cannot assure you that we will be able to protect our proprietary rights.
We face risks related to natural disasters, health epidemics, and other outbreaks, which could significantly disrupt our operations.
Our business could be materially and adversely affected by natural disasters, health epidemics, or calamities. Fire, floods, typhoons, earthquakes, power loss, telecommunications failures, break-ins, war, riots, terrorist attacks, or similar events may give rise to server interruptions, breakdowns, system failures, technology platform failures, or Internet failures, which could cause the loss or corruption of data or malfunctions of software or hardware as well as adversely affect our ability to provide products and services.
Our business could also be adversely affected by the effects of future global health epidemics. While the operational disruptions of historical pandemics have largely subsided, any future breakouts of epidemics around the world could disrupt our business operations if any of our employees gets or is suspected of getting infected, since it could require our employees to be quarantined and/or our offices to be closed and disinfected. In addition, our results of operations could be adversely affected to the extent that any of these epidemics harms the global economy in general.
Our management and compliance personnel have limited experience handling a listed cryptocurrency-related services company, and our compliance program has a recent history only.
Our management and compliance personnel have limited experience in handling regulatory and compliance matters relating to a listed cryptocurrency-related services company. Our key compliance documents and compliance programs, such as anti-money laundering and know-your-client procedures, also have a recent history only. We believe that we have measures designed to limit our counterparty risks. In order to further limit our exposure to counterparty risk, we adopted a two-pronged strategy. First, we carefully select our counterparties and only partner with industry-leading entities renowned for their robust operations, strong capabilities and impeccable reputation. Second, to mitigate the concentration risk, we strategically opt to work with multiple counterparties rather than relying on a single entity. Moreover, we also have a dedicated team of compliance experts and all of our significant business decisions are made following in-depth consultations with legal advisors and industry veterans. While we have been devoting a substantial amount of time and resources to various compliance initiatives and risk management measures, we cannot assure you the practical application and effectiveness of our compliance program and risk management measures, nor that there will not be a failure in detecting regulatory compliance issues or managing risk exposure, which may adversely affect our reputation, business, financial condition and results of operations.
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Risks Related to Doing Business in Jurisdictions We Operate
A downturn in the Hong Kong, China or global economy, and economic and political policies of China could materially and adversely affect our business and financial condition.
A substantial part of our operations is located in Hong Kong. Accordingly, our business, prospects, financial condition and results of operations may be influenced to a significant degree by political, economic and social conditions in Hong Kong and China generally and by continued economic growth in Hong Kong and China as a whole. The Chinese economy differs from the economies of most developed countries in many respects, including the amount of government involvement, level of development, growth rate, control of foreign exchange and allocation of resources. While the Chinese economy has experienced significant growth over the past decades, growth has been uneven, both geographically and among various sectors of the economy. The Chinese government has implemented various measures to encourage economic growth and guide the allocation of resources. Some of these measures may benefit the overall Chinese economy, but may have a negative effect on us.
Economic conditions in Hong Kong and China are sensitive to global economic conditions. Any prolonged slowdown in the global or Chinese economy may affect potential clients’ confidence in financial market as a whole and have a negative impact on our business, results of operations and financial condition. Additionally, continued turbulence in the international markets may adversely affect our ability to access the capital markets to meet liquidity needs.
The Hong Kong legal system embodies uncertainties which could limit the legal protections available to us.
Hong Kong is a Special Administrative Region of the PRC. Following British colonial rule from 1842 to 1997, China assumed sovereignty under the “one country, two systems” principle. The Hong Kong Special Administrative Region’s constitutional document, the Basic Law, ensures that the current political situation will remain in effect for 50 years. Hong Kong has enjoyed the freedom to function in a high degree of autonomy for its affairs, including currencies, immigration and custom, independent judiciary system and parliamentary system. On July 14, 2020, the United States signed an executive order to end the special status enjoyed by Hong Kong post-1997. As the autonomy currently enjoyed were compromised, it could potentially impact Hong Kong’s common law legal system and may in turn bring about uncertainty in, for example, the enforcement of our contractual rights. This could, in turn, materially and adversely affect our business and operation. Additionally, intellectual property rights and confidentiality protections in Hong Kong may not be as effective as in the United States or other countries. Accordingly, we cannot predict the effect of future developments in the Hong Kong legal system, including the promulgation of new laws, changes to existing laws or the interpretation or enforcement thereof, or the pre-emption of local regulations by national laws. These uncertainties could limit the legal protections available to us, including our ability to enforce our agreements with our clients.
Hong Kong laws and regulations related to the cryptocurrency business is still under development and subject to significant changes, and any potential changes in the legal and regulatory landscape may adversely affect our business financial condition and future expansion.
We are headquartered in Hong Kong, where we predominantly rely on the regulatory exemptions for trading cryptocurrency derivative products with seasoned professional investors to conduct our cryptocurrency business. Nevertheless, we cannot assure you that Hong Kong regulatory authorities will not tighten or even revoke these exemptions. If these exemptions are tightened or revoked, or if we are required to obtain additional licenses and are unable to do so in a timely manner, we may not be able to continue to expand our customer base, and our business model may be materially and adversely affected. We will closely monitor the potential changes in exemptions available to us and laws and regulations related to the cryptocurrency business in Hong Kong.
Hong Kong regulatory requirement of prior approval for any company or individual becoming a “substantial shareholder” may restrict future takeovers and other transactions.
Section 132 of the Securities and Futures Ordinance (Cap. 571 of the laws of Hong Kong) (the “SFO”) requires prior approval from the HKSFC for any company or individual to become a substantial shareholder of an SFC-licensed company in Hong Kong. Under the SFO, a person will be a “substantial shareholder” of a licensed corporation if the person, either alone or with associates, has an interest in shares in the licensed corporation or is entitled to exercise or control the exercise of voting power at general meetings of the licensed corporation, in each case above the prescribed thresholds under the SFO. In addition, a person may also be regarded as a substantial shareholder where the person exercises or controls the exercise of voting power in another company that itself has the relevant level of voting power in the licensed corporation. Accordingly, all potential parties who will become new substantial shareholder(s) of the HKSFC-licensed subsidiaries are required to seek prior approval from the HKSFC. This regulatory requirement may discourage, delay or prevent a change in control of our Company, which could deprive our shareholders of the opportunity to receive a premium for their shares as part of a future sale and may reduce the price of our shares upon the consummation of a future proposed business combination.
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You may experience difficulties in effecting service of legal process, enforcing foreign judgments, or bringing actions in China against us or our management named in this annual report based on foreign laws. It may also be difficult for you or overseas regulators to conduct investigations or collect evidence within China.
We are a company incorporated under the laws of the Cayman Islands. We conduct most of our cryptocurrency-based operations in Hong Kong through our subsidiaries, and almost all of our assets are located in Hong Kong. In addition, one of our directors reside in mainland China for a significant portion of the time. As a result, it may be difficult for you to effect service of process upon us or those persons inside mainland China or Hong Kong. In addition, there is uncertainty as to whether the courts of the Cayman Islands, mainland China or Hong Kong would recognize or enforce judgments of U.S. courts against us, or such persons predicated upon the civil liability provisions of the securities laws of the U.S. or any state. It may also be difficult for you or overseas regulators to conduct investigations or collect evidence in Hong Kong or mainland China. The inability for an overseas securities regulator to directly conduct investigation or evidence collection activities in Hong Kong or mainland China may further increase difficulties faced by you in protecting your interests.
Risks Relating to Our Ordinary Shares and the Trading Market
If we become directly subject to the scrutiny, criticism, and negative publicity involving U.S.-listed Chinese companies, we may have to expend significant resources to investigate and resolve the matter which could harm our business operations, stock price and reputation.
U.S. public companies with the majority of their operations in China have faced extensive scrutiny, criticism and negative publicity from investors, financial commentators and regulatory agencies like the SEC. Much of the criticism has centered around financial and accounting irregularities, the absence of effective internal financial controls, inadequate or non-compliant corporate governance policies and in numerous cases, fraud allegations. Such negative publicity has led to sharp decreases in the stock value of many U.S. listed Chinese companies, with some becoming virtually worthless. These companies are often subject to shareholder lawsuits, SEC enforcement actions and both internal and external investigations into the allegations.
We have taken proactive steps to address these concerns. In March 2023, we divested all our operations in mainland China. However, due to our past operational history in mainland China, we may be perceived as a Chinese company, which may subject us to the negative effects of sector-wide scrutiny even though we no longer operate in mainland China. Although we have taken significant measures to distance ourselves from these risks, it remains unclear what the enduring impact of this widespread scrutiny, criticism and negative publicity will have on us, our business and our stock price. If we become the subject of any unfavorable allegations, regardless of whether they prove to be true or not, we would need to expend considerable resources investigating such allegations and defending ourselves. Such efforts would be costly and time-consuming and could potentially divert management attention away from our growth strategy. Furthermore, if such allegations turn out to be substantiated, our business operations would be materially and adversely affected, which could lead to a significant decline in the value of our stock.
The disclosures in our reports and other filings with the SEC and our other public pronouncements are not subject to the scrutiny of any regulatory bodies in the PRC or Hong Kong.
We are regulated by the SEC and our reports and other filings with the SEC are subject to SEC review in accordance with the rules and regulations promulgated by the SEC under the Securities Act and the Exchange Act. Our SEC reports and other disclosure and public pronouncements are not subject to the review or scrutiny of any PRC or Hong Kong regulatory authority. For example, the disclosure in our SEC reports and other filings are not subject to the review by the China Securities Regulatory Commission or the HKSFC. Accordingly, you should review our SEC reports, filings, and our other public pronouncements with the understanding that no local regulator has done any review of us, our SEC reports, other filings, or any of our other public pronouncements.
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The joint statement by the SEC and the PCAOB, rule changes by Nasdaq, and the Holding Foreign Companies Accountable Act all call for additional and more stringent criteria to be applied to emerging market companies upon assessing the qualification of their auditors, especially the non-U.S. auditors who are not inspected by the PCAOB. These developments could add uncertainties to our continued listing or future offerings of our securities in the United States.
Pursuant to the Holding Foreign Companies Accountable Act (the “HFCA Act”), if the SEC determines that a company retains a foreign accounting firm that cannot be subject to inspections by the Public Company Accounting Oversight Board (the “PCAOB”), for two consecutive years, the SEC will prohibit its securities from being traded on a national securities exchange or in the over-the-counter trading market in the United States. On December 16, 2021, the PCAOB issued a report relaying to the SEC its determinations that it was unable to inspect or investigate completely registered public accounting firms in mainland China and Hong Kong. In March 2022, the SEC issued its first “Conclusive list of issuers identified under the HFCA Act” indicating that those companies were formally subject to the delisting provisions.
On August 26, 2022, the PCAOB signed with the CSRC, and the Ministry of Finance of the PRC a Statement of Protocol, which gives the PCAOB sole discretion to select the firms, audit engagements and potential violations it inspects and investigates and put in place procedures for PCAOB inspectors and investigators to view complete audit work papers with all information included and for the PCAOB to retain information as needed. On December 15, 2022, the PCAOB issued a report that vacated its December 16, 2021 determination and removed mainland China and Hong Kong from the list of jurisdictions where it was unable to inspect or investigate completely registered public accounting firms. Each year, the PCAOB will determine whether it can inspect and investigate completely audit firms in mainland China and Hong Kong, among other jurisdictions.
Our auditor, the independent registered public accounting firm that issues the audit report contained in this annual report, as an auditor of companies that are traded publicly in the United States and a firm registered with the PCAOB, is subject to laws in the United States pursuant to which the PCAOB conducts regular inspections to assess its compliance with the applicable professional standards. Our auditor is headquartered in Singapore, and has been inspected by the PCAOB on a regular basis with the last inspection in April 2022. We cannot assure you whether Nasdaq or regulatory authorities would apply additional and more stringent criteria to us since the majority of our operations are conducted in Hong Kong. If the PCAOB determines in the future that it no longer has full access to inspect and investigate our auditor, or another independent registered public accounting firm we may engage in the future to issue an audit report on our financial statements filed with the SEC, we may be identified as a Commission-Identified Issuer following the filing of the annual report on Form 20-F for the relevant fiscal year. There can be no assurance that we would not be identified as a Commission-Identified Issuer for any future fiscal year, and if we were so identified for two consecutive years, we would become subject to the prohibition on trading under the HFCA Act.
We do not intend to pay dividends for the foreseeable future.
We currently intend to retain any future earnings to finance the operation and expansion of our business, and we do not expect to declare or pay any dividends in the foreseeable future. As a result, you may only receive a return on your investment in our Ordinary Shares if the market price of our Ordinary Shares increases.
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If securities or industry analysts do not publish research or reports about our business, or if they publish a negative report regarding our Ordinary Shares, the price of our Ordinary Shares and trading volume could decline.
The trading market for our Ordinary Shares may depend in part on the research and reports that industry or securities analysts publish about us or our business. We do not have any control over these analysts. If one or more of the analysts who cover us downgrade us, the price of our Ordinary Shares would likely decline. If one or more of these analysts cease coverage of our Company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which could cause the price of our Ordinary Shares and the trading volume to decline.
If we fail to maintain an effective system of internal controls, we may be unable to accurately or timely report our results of operations or prevent fraud, and investor confidence and the market price of our Ordinary Shares may be materially and adversely affected.
Our independent registered public accounting firm is currently not required to conduct an audit of our internal control over financial reporting. In the course of auditing our consolidated financial statements as of March 31, 2026, our management has not received from our independent registered public accounting firm any report regarding deficiencies in our internal controls over financial reporting. While management concluded that our internal control over financial reporting was effective as of March 31, 2026 following the remediation of a previously identified material weakness, we must continue to monitor and assess our internal controls. Any future failure to maintain effective internal control over financial reporting could severely inhibit our ability to accurately report our financial condition or results of operations.
| ● | Our failure to discover and address any future material weaknesses could result in inaccuracies in our financial statements and could also impair our ability to comply with applicable financial reporting requirements and related regulatory filings on a timely basis. As a result, our business, financial condition, results of operations, and prospects, as well as the trading price of our Ordinary Shares, may be materially and adversely affected. Moreover, ineffective internal control over financial reporting significantly hinders our ability to prevent fraud. |
We are a public company in the United States subject to the Sarbanes-Oxley Act of 2002. Section 404 of the Sarbanes-Oxley Act of 2002, or Section 404, requires that we include a report from management on our internal control over financial reporting in this annual report on Form 20-F. In addition, we are no longer an “emerging growth company” as such term is defined in Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Because we are currently classified as a “non-accelerated filer,” we are exempt from the requirement that our independent registered public accounting firm attest to and report on the effectiveness of our internal control over financial reporting. However, if our public float increases and we become an accelerated filer or large accelerated filer in the future, we will lose this exemption. In addition, as a public company, our reporting obligations may place a significant strain on our management, operational and financial resources and systems for the foreseeable future. We may be unable to timely complete our evaluation testing and any required remediation if new deficiencies are identified.
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During the course of documenting and testing our internal control procedures, in order to satisfy the requirements of Section 404, we may identify additional or other weaknesses and deficiencies in our internal control over financial reporting. In addition, if we fail to maintain the adequacy of our internal control over financial reporting, as these standards are modified, supplemented or amended from time to time, we may not be able to conclude on an ongoing basis that we have effective internal control over financial reporting in accordance with Section 404. Generally speaking, if we fail to achieve and maintain an effective internal control environment, we could suffer material misstatements in our financial statements and fail to meet our reporting obligations, which would likely cause investors to lose confidence in our reported financial information. This could in turn limit our access to capital markets, harm our results of operations and lead to a decline in the trading price of our Ordinary Shares. Additionally, ineffective internal control over financial reporting could expose us to increased risk of fraud or misuse of corporate assets and subject us to potential delisting from the stock exchange on which we list, regulatory investigations and civil or criminal sanctions.
For more information regarding our internal controls, please see “Item 15. Controls and Procedures.”
We will incur increased costs as a result of being a public company.
As a public company, we expect to incur significant legal, accounting and other expenses that we did not incur as a private company. The Sarbanes-Oxley Act of 2002, as well as rules subsequently implemented by the SEC and the Nasdaq Capital Market, impose various requirements on the corporate governance practices of public companies. We expect these rules and regulations to increase our legal and financial compliance costs and to make some corporate activities more time-consuming and costly. For example, operating as a public company makes it more difficult and more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. In addition, we will incur additional costs associated with our public company reporting requirements. We are currently evaluating and monitoring developments with respect to these rules and regulations, and we cannot predict or estimate with any degree of certainty the amount of additional costs we may incur or the timing of such costs.
If we cease to qualify as a foreign private issuer, we would be required to comply fully with the reporting requirements of the Exchange Act applicable to U.S. domestic issuers, and we would incur significant additional legal, accounting and other expenses that we would not incur as a foreign private issuer.
As a foreign private issuer, we are exempt from, among others, the rules under the Exchange Act prescribing the furnishing and content of proxy statements and the rules relating to selective disclosure of material non-public information under Regulation FD. In addition, our executive officers, directors and principal shareholders are exempt from the short-swing profit and recovery provisions and our principal shareholders are exempt from the reporting requirements contained in Section 16 of the Exchange Act. We are also not required under the Exchange Act to file periodic reports and financial statements with the SEC as frequently or as promptly as United States domestic issuers, and we are not required to disclose in our periodic reports all of the information that United States domestic issuers are required to disclose. While we currently qualify as a foreign private issuer, we may cease to qualify as a foreign private issuer in the future.
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As a foreign private issuer, we are permitted to, and we may rely on exemptions from certain Nasdaq Capital Market corporate governance standards applicable to U.S. issuers. This may afford less protection to holders of our Ordinary Shares.
As a foreign private issuer, we are permitted to take advantage of certain provisions in the Nasdaq Capital Market listing rules that allow us to follow Cayman Islands law for certain governance matters. Certain corporate governance practices in the Cayman Islands may differ significantly from corporate governance listing standards as, except for general fiduciary duties and duties of care, Cayman Islands law has no corporate governance regime which prescribes specific corporate governance standards. We may follow Cayman Islands corporate governance practices in lieu of the corporate governance requirements of the Nasdaq Capital Market in respect of the following. Cayman law does not require that we make our interim results available to shareholders, although as a Nasdaq listed company, we are required to publicly file interim results for the first six months of our fiscal year. Furthermore, Nasdaq Listing Rule 5635 generally provides that shareholder approval is required of U.S. domestic companies listed on the Nasdaq Capital Market prior to issuance (or potential issuance) of securities (i) equaling 20% or more of the company’s common stock or voting power for less than the greater of market or book value (ii) resulting in a change of control of the company; (iii) which is being issued pursuant to a stock option or purchase plan to be established or materially amended or other equity compensation arrangement made or materially amended; and (iv) in connection with the acquisition of the stock or assets of another company under certain conditions. However, Nasdaq Listing Rule 5615(a)(3)(A) permits foreign private issuers to follow their home country practice rather than these shareholder approval requirements, and the Cayman Islands laws do not require shareholder approval prior to any of the foregoing types of issuances. The Company has chosen to follow its home country practices with respect to the requirements set forth under Nasdaq Listing Rules 5635(a), 5635(b), 5635(c), and 5635(d), and therefore is not required to obtain shareholder approval prior to (1) the acquisition of stock or assets of another company, (2) the issuance of 20% or more of its outstanding ordinary shares, (3) the issuance of securities pursuant to a stock option or purchase plan to be established or materially amended or other equity compensation arrangement made or materially amended, and (4) the issuance of securities when the issuance or potential issuance will result in a change of control of the Company. Also, Nasdaq Listing Rule 5605(b)(1) requires listed companies to have, among other things, a majority of its board members be independent. As a foreign private issuer, however, we are permitted to, and we may follow home country practice in lieu of the above requirements, or we may choose to comply with the above requirement within one year of listing. The corporate governance practice in our home country, the Cayman Islands, does not require a majority of our board to consist of independent directors. Currently, a majority of our board members are independent. However, we may consider following home country practice in lieu of the requirements under Nasdaq Listing Rules with respect to certain corporate governance standards. Since a majority of our board of directors may not consist of independent directors, fewer board members may be exercising independent judgment and the level of board oversight on the management of our Company may decrease as a result. In addition, the Nasdaq listing rules also require U.S. domestic issuers to have a compensation committee, a nominating/corporate governance committee composed entirely of independent directors, and an audit committee with a minimum of three members. We, as a foreign private issuer, are not subject to these requirements. We may consider following home country practice in lieu of the requirements under Nasdaq listing rules with respect to certain corporate governance standards. Therefore, our shareholders may be afforded less protection than they otherwise would have under corporate governance listing standards applicable to U.S. domestic issuers. For more information regarding our corporate governance, please see “Item 16G. Corporate Governance.”
The market price of our Ordinary Shares may be volatile or may decline regardless of our operating performance.
The market price of our Ordinary Shares may fluctuate significantly in response to numerous factors, many of which are beyond our control, including:
| ● | actual or anticipated fluctuations in our income and other operating results; |
| ● | the financial projections we may provide to the public, any changes in these projections or our failure to meet these projections; |
| ● | actions of securities analysts who initiate or maintain coverage of us, changes in financial estimates by any securities analysts who follow our company, or our failure to meet these estimates or the expectations of investors; |
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| ● | announcements by us or our competitors of significant services or features, technical innovations, acquisitions, strategic partnerships, joint ventures, or capital commitments; |
| ● | price and volume fluctuations in the overall stock market, including as a result of trends in the economy as a whole; |
| ● | lawsuits threatened or filed against us; and |
| ● | other events or factors, including those resulting from war or incidents of terrorism, or responses to these events. |
In addition, the stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. Stock prices of many companies have fluctuated in a manner unrelated or disproportionate to the operating performance of those companies. In the past, stockholders have filed securities class action litigation following periods of market volatility. If we were to become involved in securities litigation, it could subject us to substantial costs, divert resources and the attention of management from our business, and adversely affect our business.
If we cannot continue to satisfy listing requirements and other rules of Nasdaq Capital Market, although we exempt from certain corporate governance standards applicable to U.S. issuers as a Foreign Private Issuer, our securities may be delisted, which could negatively impact the price of our securities and your ability to sell them.
Our Ordinary Shares are listed on the Nasdaq Capital Market. We cannot assure you that our Ordinary Shares will continue to be listed on the Nasdaq Capital Market. In order to maintain our listing on the Nasdaq Capital Market, we are required to comply with certain rules of Nasdaq Capital Market, including those regarding minimum shareholder’s equity, minimum share price, and certain corporate governance requirements. We may not be able to continue to satisfy continuing listing requirements and other applicable rules of the Nasdaq Capital Market. If we are unable to satisfy the Nasdaq Capital Market criteria for maintaining our listing, our securities could be subject to delisting.
We received a written notification on September 21, 2022 from the Nasdaq Listing Qualifications Department that we were not in compliance with the minimum bid price requirement set forth under the Nasdaq Listing Rule 5550(a)(2) (the “Minimum Bid Price Requirement”), as the closing bid price of our Ordinary Shares was below $1.00 per share for a period of 30 consecutive business days. We were provided 180 calendar days, or until March 20, 2023, to regain compliance with the Minimum Bid Price Requirement. In accordance with Nasdaq Listing Rule 5810(c)(3)(A), to regain compliance, our Ordinary Shares must have a closing bid price of at least $1.00 per share for a minimum of 10 consecutive business days. On March 31, 2023, we received a notice from Nasdaq notifying us that we regained compliance with the Minimum Bid Price Requirement when the closing bid price of the Company’s Ordinary Shares maintained $1.00 per share or greater for 19 consecutive business days. In the event that we lose compliance with Nasdaq Listing Rule 5550(a)(2) again and do not regain compliance prior to the expiration of the compliance period, we will receive written notification that our securities are subject to delisting. At that time, we may appeal the delisting determination to a hearings panel pursuant to the procedures set forth in the applicable Nasdaq Listing Rules.
We received a written notification on August 13, 2023 from the Nasdaq Listing Qualification Department stating that, as a result of not having timely filed our annual report on Form 20-F for the fiscal year ended March 31, 2023 (the “FY2023 Annual Report”), we were not in compliance with Nasdaq Listing Rule 5250(c)(1), which requires timely filing of all periodic financial reports with the SEC. On November 1, 2023, we obtained an extension from Nasdaq permitting us to regain compliance with Nasdaq Listing Rule 5250(c)(1) provided we file the FY2023 Annual Report on or before February 12, 2024. On February 15, 2024, we received a notice from Nasdaq notifying us that we regained compliance with the periodic filing requirement set forth under Nasdaq Listing Rule 5250(c)(1) after filing the FY2023 Annual Report with the SEC on February 12, 2024.
We received an additional written notification on April 8, 2024 from the Nasdaq Listing Qualification Department indicating that we were not in compliance with Nasdaq Listing Rule 5250(c)(2) due to our failure to file an interim balance sheet and income statement as of and for the six months ended September 30, 2023 on Form 6-K. or the Interim Report, with the SEC. On July 26, 2024, we received a notice from Nasdaq notifying us that we regained compliance with Nasdaq Listing Rule 5250(c)(2) after filing the Interim Report with the SEC on July 12, 2024.
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We received a written notification on August 15, 2024 from the Nasdaq Listing Qualification Department stating that, as a result of not having timely filed our annual report on Form 20-F for the fiscal year ended March 31, 2024 (the “FY2024 Annual Report”), we were not in compliance with Nasdaq Listing Rule 5250(c)(1), which requires timely filing of all periodic financial reports with the SEC. We had regained compliance with the periodic filing requirement set forth under Nasdaq Listing Rule 5250(c)(1) after filing the FY2024 Annual Report with the SEC on October 30, 2024.
If we fail to meet any of Nasdaq’s listing standards, our securities may be delisted from the Nasdaq Capital Market. If the Nasdaq Capital Market subsequently delists our securities from trading, we could face significant consequences, including:
| ● | a limited availability for market quotations for our securities; |
| ● | reduced liquidity with respect to our securities; |
| ● | a determination that our ordinary share is a “penny stock,” which will require brokers trading in our ordinary shares to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our ordinary shares; |
| ● | limited amount of news and analyst coverage; and |
| ● | a decreased ability to issue additional securities or obtain additional financing in the future. |
We have granted, and may continue to grant, share incentive awards, which may result in increased share-based compensation expenses.
As of March 31, 2026, we had warrants issued and outstanding to purchase an aggregate of 18,900,000 Ordinary Shares. The issuance of shares of Ordinary Shares upon exercise of outstanding warrants could result in substantial dilution to our shareholders. On June 30, 2022, our Company implemented our 2022 Share Incentive Plan to foster the success of our Company and to increase shareholder value by providing an additional means, through the grant of awards to attract, motivate, retain and reward selected employees and other eligible persons, and to enhance the alignment of the interests of such selected participants with the interests of our shareholders. An aggregate of 3,300,000 Ordinary Shares had been reserved for issuance under the 2022 Share Incentive Plan. On September 26, 2024, our Company implemented our 2024 Share Incentive Plan with an aggregate of 2,000,000 Ordinary Shares initially reserved for issuance, subject to an evergreen mechanism thereof. As of June 30, 2026, an aggregate of 3,142,000 restricted share units have been granted under the 2024 Plan, of which 360,500 have been vested, and 2,781,500 remain outstanding.
See “Item 6. Directors, Senior Management and Employees —B. Compensation of Directors and Executive Officers” for details. Any future grants will result in more stock-based compensation expenses and additional dilution.
We believe the granting of share incentive awards is of significant importance to our ability to attract and retain our management, employees and relevant service providers, and we will continue to grant stock incentive awards to our management, employees and relevant service providers as appropriate in the future. As a result, our expenses associated with share-based compensation may increase, which may have an adverse effect on our results of operations. In addition, the granting, vesting and exercise of the awards under these stock incentive plans will have a dilutive effect on your shareholding in our Company.
Anti-takeover provisions in our third amended and restated memorandum and articles of association may discourage, delay or prevent a change in control.
Some provisions of our third amended and restated memorandum and articles of association, which became effective on March 31, 2025, may discourage, delay or prevent a change in control of our Company or management that shareholders may consider favorable, including, among other things, the following:
| ● | provisions that authorize our board of directors to issue shares with preferred, deferred or other special rights or restrictions without any further vote or action by our shareholders; and |
| ● | provisions that restrict the ability of our shareholders to call meetings and to propose special matters for consideration at shareholder meetings. |
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Our board of directors may decline to register transfers of Ordinary Shares in certain circumstances.
Our board of directors may, in its sole discretion, decline to register any transfer of any ordinary share which is not fully paid up or on which we have a lien. Our directors may also decline to register any transfer of any share unless (i) the instrument of transfer is lodged with us, accompanied by the certificate for the shares to which it relates and such other evidence as our board of directors may reasonably require to show the right of the transferor to make the transfer; (ii) the instrument of transfer is in respect of only one class of shares; (iii) the instrument of transfer is properly stamped, if required; (iv) in the case of a transfer to joint holders, the number of joint holders to whom the share is to be transferred does not exceed four; (v) the shares transferred are fully paid up and free of any lien in favor of us; and (vi) a fee of such maximum sum as Nasdaq Capital Market may determine to be payable, or such lesser sum as our board of directors may from time to time require, is paid to us in respect thereof.
If our directors refuse to register a transfer they shall, within three months after the date on which the instrument of transfer was lodged, send to each of the transferor and the transferee notice of such refusal. The registration of transfers may, on 14 days’ notice being given by advertisement in such one or more newspapers or by electronic means, be suspended and the register closed at such times and for such periods as our board of directors may from time to time determine, provided, however, that the registration of transfers shall not be suspended nor the register closed for more than 30 days in any year.
This, however, is unlikely to affect market transactions of the Ordinary Shares held by our public shareholders. Since our Ordinary Shares are listed, the legal title to such Ordinary Shares and the registration details of those Ordinary Shares in the Company’s register of members remain with the Depository Trust Company. All market transactions with respect to those Ordinary Shares are carried out without the need for any kind of registration by the directors, as the market transactions are all conducted through the Depository Trust Company systems.
The laws of the Cayman Islands may not provide our shareholders with benefits comparable to those provided to shareholders of corporations incorporated in the United States.
Our corporate affairs are governed by our third amended and restated memorandum and articles of association, by the Companies Act (as amended) of the Cayman Islands, and by the common law of the Cayman Islands. The rights of shareholders to take action against our directors, actions by minority shareholders, and the fiduciary responsibilities of our directors to us under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands. The common law in the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands and from English common law. Decisions of the Privy Council (which is the final Court of Appeal for British overseas territories such as the Cayman Islands) are binding on a court in the Cayman Islands. Decisions of the English courts, and particularly the Supreme Court and the Court of Appeal are generally of persuasive authority but are not binding in the courts of the Cayman Islands. Decisions of courts in other Commonwealth jurisdictions are similarly of persuasive but not binding authority. The rights of our shareholders and the fiduciary responsibilities of our directors under Cayman Islands law are not as clearly established as they would be under statutes or judicial precedents in the United States. In particular, the Cayman Islands has a less developed body of securities laws relative to the United States. Therefore, our public shareholders may have more difficulty protecting their interests in the face of actions by our management, directors or controlling shareholders than would shareholders of a corporation incorporated in a jurisdiction in the United States.
You may be unable to present proposals before annual general meetings or extraordinary general meetings not called by shareholders.
Cayman Islands law provides shareholders with only limited rights to requisition a general meeting, and does not provide shareholders with any right to put any proposal before a general meeting. However, these rights may be provided in a company’s articles of association. Our articles of association allow our shareholders holding shares representing in aggregate not less than 10% of our voting share capital in issue, to requisition a general meeting of our shareholders, in which case our directors are obliged to call such meeting. Advance notice of at least 21 clear days is required for the convening of our annual general shareholders’ meeting and at least 14 clear days’ notice is required for any other general meeting of our shareholders. A quorum required for a meeting of shareholders is present in person or by proxy, which is the shareholder if the Company has only one shareholder and one third of shareholders if the Company has more than one shareholder.
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If we are classified as a passive foreign investment company (“PFIC”), United States taxpayers who own our Ordinary Shares may be subject to adverse United States federal income tax consequences.
A non-U.S. corporation generally will be treated as a PFIC for U.S. federal income tax purposes if either (i) at least 75% of its gross income in a taxable year, including its pro rata share of the gross income of any corporation in which it is considered to own at least 25% of the shares by value, is passive income or (ii) at least 50% of its assets in a taxable year (ordinarily determined based on fair market value and averaged quarterly over the year), including its pro rata share of the assets of any corporation in which it is considered to own at least 25% of the shares by value, are held for the production of, or produce, passive income. Passive income generally includes dividends, interest, rents and royalties (other than rents or royalties derived from the active conduct of a trade or business), and gains from the disposition of passive assets.
Based on our analysis of our income, assets, activities and market capitalization, we believe that we were a PFIC for our taxable year ended March 31, 2026. However, the determination of whether a non-U.S. corporation is a PFIC is a fact-intensive determination made on an annual basis and the applicable law is subject to varying interpretation. In particular, the characterization of our assets as active or passive may depend in part on our current and intended future business plans, which are subject to change. In addition, the total value of our assets for PFIC testing purposes may be determined in part by reference to the market price of Ordinary Shares from time to time, which may fluctuate considerably. As a result, there can be no assurance with respect to our status as a PFIC for any taxable year, and our U.S. counsel expresses no opinion with respect to our PFIC status for any taxable year.
For a more detailed discussion of the application of the PFIC rules to us and the consequences to U.S. taxpayers if we were determined to be a PFIC, see “Item 10. Additional Information—E. Taxation—United States Federal Income Taxation—Passive Foreign Investment Company Rules.”
ITEM 4. INFORMATION ON THE COMPANY
| A. | History and Development of the Company |
We are not an operating company but a Cayman Islands holding company. Currently, we are a provider of digital asset services.
We were incorporated in the Cayman Islands on June 19, 2015. Our wholly-owned subsidiary, Sweet Lollipop, was incorporated in the British Virgin Islands on May 8, 2014. Metalpha HK was incorporated in Hong Kong on May 2, 2015. Metalpha Limited was incorporated in the British Virgin Islands on October 29, 2021. In November 2022, we changed our corporate name from Dragon Victory International Limited to Metalpha Technology Holding Limited.
On August 22, 2019, we incorporated a wholly owned subsidiary, Zhejiang Shengqian Business Consulting Co., Ltd. (“Shengqian”). We dissolved Shengqian on August 19, 2021.
On April 1, 2021, Hangzhou Longyun Network Technology Co., Ltd., a company previously controlled and beneficially owned by an indirect wholly owned subsidiary of our Company by means of a series of contractual arrangements, entered into an equity transfer agreement with Mr. Qiang Huang, who owned 100% of the equity interests in Hangzhou Xuzhihang Supply Chain Management Co., Ltd. (“Xuzhihang”), a limited liability company organized under the laws of the PRC. Xuzhihang provides supply chain management and other logistics related services. Pursuant to the equity transfer agreement, Mr. Qiang Huang transferred 60% of the equity interests in Xuzhihang to Long Yun for a consideration of RMB600,000.
On June 28, 2021, we, through Sweet Lollipop, formed a wholly owned subsidiary, Meta Rich Limited (“Meta Rich”), in the British Virgin Islands.
On July 7, 2021, we, through Metalpha HK, formed a wholly owned subsidiary, LSQ Capital Limited, in Hong Kong.
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On October 29, 2021, Meta Rich, together with Northstar Technologies, formed Metalpha Limited. Meta Rich held 51%, and Northstar Technologies held 49%, of the equity interests in Metalpha Limited. On November 28, 2022, we entered into a sale and purchase agreement with Polaris Technologies Group Limited (formerly Antalpha Technologies Limited), Northstar Technologies and Meta Rich to acquire 49% equity interest held by Northstar Technologies in Metalpha Limited. The total consideration is $2,500,000, satisfied by the allotment and issuance of 2,500,000 Ordinary Shares of the Company to Northstar Technologies. The deal was closed in November 2022 and Metalpha Limited is now a wholly-owned subsidiary of the Company.
On December 29, 2021, we, through Meta Rich, formed a wholly owned subsidiary, Radiant Alpha Limited (“Radiant Alpha”), in the British Virgin Islands. We disposed of Radiant Alpha on September 21, 2022.
On March 18, 2022, we, through Metalpha HK, formed a wholly owned subsidiary, LSQ Investment Limited (“LSQ Investment”), in Hong Kong.
On November 28, 2022, we entered into a securities subscription and warrant purchase agreement (the “Northstar Technologies Purchase Agreement”) with Northstar Technologies. Pursuant to this Northstar Technologies Purchase Agreement, Northstar Technologies subscribed for and purchased 4,500,000 Ordinary Shares of the Company. Northstar Technologies was also granted a type A warrant to purchase up to 4,500,000 Ordinary Shares (the “Type A Warrant”) and a type B warrant to purchase up to 3,000,000 Ordinary Shares (the “Type B Warrant”), upon the terms and conditions in the Northstar Technologies Purchase Agreement, the Type A Warrant and the Type B Warrant.
On January 20, 2023, our board of directors approved our plan to discontinue and cease all business operations in mainland China (collectively, the “Mainland China Business”), which were conducted through certain operating entities in the PRC, and to dispose of the Mainland China Business by selling it to one or more third parties (the “Disposition”). On February 20, 2023, Metalpha HK, Limin Liu and Wei Wang entered into a sale and purchase agreement with Yang Xu and Liqing Zheng (collectively, the “Purchasers”), to sell all the interest in the PRC operating entities to the Purchasers and to discontinue the Mainland China Business. The aggregate consideration was $1.00, which had been approved and authorized by our board of directors. Upon the completion of the Disposition on March 31, 2023, we discontinued and ceased the Mainland China Business and terminated the VIE structure.
In February 2023, our board of directors approved and authorized a share repurchase program (the “Share Repurchase Program”), to buy back our Ordinary Shares from the open market for an aggregate purchase price of no more than $5,000,000. The purpose of the Share Repurchase Program is to reduce our issued share capital. The Share Repurchase Program will last a period of twelve months upon the date on which it was approved.
In April 2024, we partnered with Algos Electronics Corp. to establish a joint venture, NOWLIT FinTech Solutions Corp. (the “NOWLIT”), in Canada, which focuses on blockchain fintech advisory and research. Through NOWLIT, we expect to build our digital asset business presence in the North American market and further expand our market reach.
Our principal executive offices are located at Suite 5506-07, Central Plaza, 18 Harbour Road, Wan Chai, Hong Kong, China and our phone number is +(852) 3565 2920. We maintain a corporate website at http://www.metalpha.net/. The information contained in, or accessible from, our website or any other website does not constitute a part of this report. We have appointed Cogency Global Inc., with its address at 122 East 42nd Street, 18th Floor, New York, NY 10168 to serve as our agent to receive service of process.
The SEC maintains a website at www.sec.gov that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC using its EDGAR system.
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| B. | Business Overview |
Overview
Our primary business operation centers around digital asset services, which we offer through our subsidiaries. We initiated digital asset services in December 2021 and generate income primarily from the execution of cryptocurrency-related transactions, which includes the provision of derivative solutions to over-the-counter (“OTC”) clients and our proprietary trading activities. In the fiscal year ended March 31, 2024, 2025 and 2026, we provided crypto derivative solutions and liquidity to our clients, facilitated through our principal trading activities, enabling seamless trading of crypto derivative solutions. In addition, to meet their diverse digital asset demands, we also traded with certain clients through traditional derivative instruments. For the fiscal years ended March 31, 2024, 2025 and 2026, the income generated from our digital asset services was $16.8 million, $41.5 million and $37.1 million, respectively.
In addition, our Hong Kong subsidiary, LSQ Capital Limited, is licensed by SFC to provide securities advising and asset management services in Hong Kong. During the current financial year, we have commenced generating revenue from these SFC-licensed activities. We generated $3.1 million in revenue from these SFC-licensed activities during the fiscal year ended March 31, 2025 and we did not generate revenue from this segment during the fiscal year ended March 31, 2026.
The Digital Asset Services
Since December 2021, we have embarked on our digital asset-focused digital asset business, aiming to provide structured derivative solutions and related services to institutional clients and high-net-worth individuals interested in cryptocurrency exposure. By closely observing market trends and understanding customer needs, we have crafted a range of unique structured derivative solutions for potential clients in the market. These derivative solutions are based on mainstream cryptocurrencies such as Bitcoin, Ethereum, Tether tokens, USD Coin and more. Compared to direct purchases of cryptocurrencies, these structured solutions offer risk-adjusted exposure, shielding customers from the substantial volatility typically associated with the cryptocurrency market. After transacting these structured derivative solutions with our clients, we ensure risk hedging of our trading positions through several industry trading platforms. This approach prevents us from forming a large one-sided position due to the provision of structured solutions, thereby protecting our results of operations from unilateral market fluctuations.
In the fiscal year ended March 31, 2024, 2025 and 2026, we provided crypto derivative solutions and liquidity to our clients, facilitated through our principal trading activities, enabling seamless trading of crypto derivative solutions. In addition, to meet their diverse digital asset demands, we also traded with certain clients through traditional derivative instruments.
We recognize (i) the fair value change of trading of digital assets, listed securities, funds and derivative contracts, (ii) realized gain on trading of listed securities, funds and derivative contracts, (iii) interest income on trading of digital assets and derivative contracts, (iv) services fee income and (v) fair value change on investment in trusts as our income from our digital asset business. Income from such business was $16.8 million, $41.4 million and $37.1 million for the fiscal years ended March 31, 2024, 2025 and 2026, respectively.
The Securities Advising and Asset Management Business
Our Hong Kong subsidiary, LSQ Capital Limited, provides securities advising and asset management services to customers in Hong Kong. LSQ Capital Limited holds the Type 4 (Advising on Securities) and Type 9 (Asset Management) licenses as per the SFC regulations. In December 2023, LSQ Capital Limited successfully obtained an uplift to its existing Type 4 license from the SFC, which enables it to issue analysis and reports on virtual assets to qualified investors in addition to offering securities advising services. In April 2024, LSQ Capital Limited was granted a Type 1 (Dealing in Securities) license by the SFC, allowing it to provide securities and virtual assets dealing services. During the current financial year, we have commenced generating revenue from these SFC-licensed activities. For the fiscal year ended March 31, 2025, income from our securities advising and asset management services accounted for 11.2% of our total income.
In December 2023, we entered into the sales and purchase agreement to acquire 40% equity interest of NextGen Digital Venture Limited (“NextGen Fund”) for an aggregate of 300,000 share purchase warrants and $300,000 in cash. NextGen Fund focused on structured investments in the suite of products offered by Grayscale Investments LLC, a leading crypto asset manager in the world. Upon completion of its lifecycle, we divested all of our 40% equity interest in the NextGen Fund in June 2025.
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Discontinued Business – The Supply Chain Management Platform Services
We previously provided supply chain management platform services in mainland China. This platform, launched in May 2019, served as an integrated online hub for transaction data management, shipping and handling information management, and transaction financing, catering to auto parts suppliers, auto repair shops, and logistics companies. Our operations in mainland China ceased in January 2023 and were fully divested by March 2023, and we have not generated any revenue from this segment in the fiscal years ended March 31, 2024, 2025, or 2026.
Marketing
Our clientele for our digital asset services comprises institutional investors and high-net-worth individuals who meet the criteria of professional investors. Given the compliance requirements and our client demographic, we do not, and cannot, advertise our business to the public. Our marketing efforts have therefore been focused solely on promoting our company itself through limited online channels, without referring specifically to our digital asset-focused operations. Looking ahead, under the guidance of our legal team, we will continue to market our company within the confines of legality and compliance, without explicitly advertising our cryptocurrency-related activities.
Strategy
Our business strategies for the cryptocurrency derivative product services are constantly being tested by the market.
The current business strategies of cryptocurrency derivative product services are: (1) keeping up with the fast-paced evolution of the digital currency industry and the web3 industry; and (2) Catering primarily to large institutions and high net worth individuals within the cryptocurrency world.
| (1) | Keeping up with the fast-paced evolution of the digital currency industry and the web3 industry. The past three years have seen significant growth in the cryptocurrency and web3 sectors, despite several challenging circumstances. Cryptocurrencies are increasingly recognized within traditional finance, and major internet companies such as Facebook have shown significant interest in web3. However, the industry has been shaken by certain adverse events, including the collapse of industry giants like FTX and Luna. Furthermore, regulatory bodies such as the SEC have been increasingly scrutinizing major platforms like Binance and Coinbase, leading to ongoing investigations and lawsuits. These incidents have caused considerable market volatility and uncertainty. Despite these setbacks, we anticipate the industry’s upward trend to persist for decades to come, providing numerous opportunities for fresh business development. To navigate these complexities, we have assembled a team of professionals from conventional financial and internet companies. This allows us to leverage our technical prowess and industry experience to capitalize on less mature areas of the cryptocurrency sector, and respond effectively to the industry’s challenges, thereby maintaining a competitive edge. |
| (2) | Catering primarily to large institutions and high-net-worth individuals within the cryptocurrency world. Unlike other cryptocurrency enterprises that primarily cater to retail individuals, we have always maintained that our ideal clientele comprises large institutions and affluent individuals within the cryptocurrency sphere. These institutional clients appreciate the fixed returns and risk mitigation our products offer, and are more likely to recognize our trading and product design capabilities. In addition, prioritizing high-net-worth clients echoes proven strategies from the traditional financial structured product sector. Given that our company is in its early stages with a growing team, we can more effectively service a selected number of institutional clients with our current staffing levels. |
Regulations
This section summarizes the principal regulations in relevant jurisdictions related to our business.
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Regulation on Cryptocurrency Related Services in the British Virgin Islands
Existing Financial Service Legislation in the British Virgin Islands
The British Virgin Islands has developed a specific regulatory framework for virtual assets (“VA”). The Virtual Assets Service Providers Act (as amended) (the “VASP Act”) came into effect on February 1, 2023, and provides for the registration and supervision of virtual asset service providers (each a “VASP” and collectively, the “VASPs”) operating in and from within the British Virgin Islands. In conjunction with the VASP Act, the British Virgin Islands Financial Services Commission (“FSC”), which is the main regulator for virtual assets, published the Guidance on the Application for Registration of a Virtual Assets Service Provider and the Virtual Assets Service Providers Guide to the Prevention of Money Laundering, Terrorist Financing and Proliferation Financing, providing VASPs with additional information to aid in compliance with anti-money laundering and counter-terrorist financing (“AML/CFT”) obligations. Prior to the enactment of the VASP Act, the FSC had published the Guidance on Regulation of Virtual Assets on July 10, 2020, (the “2020 Guidance”), in accordance with which licensing, authorization or approval for VA-related activities was considered under existing financial services legislation. For VA-related activities that do not fall within the scope of the VASP Act, the 2020 Guidance may apply.
The VASP Act defines a virtual asset service provider (“VASP”), as a person who provides, as a business, a virtual assets service and is registered under the VASP Act to conduct one or more of the following activities or operations for or on behalf of another person: (a) exchange between VA and fiat currencies; (b) exchange between one or more forms of VA; (c) transfer of VA, where the transfer relates to conducting a transaction on behalf of another person that moves a virtual asset from one virtual asset address or account to another; (d) safekeeping or administration of VA or instruments enabling control over VA; (e) participation in, and provision of, financial services related to an issuer’s offer or sale of a virtual asset; or (f) such other activity or operation as may be specified in the VASP Act. “Virtual assets service” means the business of engaging, on behalf of another person, in any VASP activity or operation, and includes: (a) hosting wallets or maintaining custody or control over another person’s virtual asset, wallet or private key; (b) providing financial services relating to the issuance, offer or sale of a virtual asset; (c) providing kiosks, such as automatic teller machines, bitcoin teller machines or vending machines, for the purpose of facilitating VA activities through electronic terminals to enable the owner or operator of the kiosk to actively facilitate the exchange of virtual assets for fiat currency or other VA; or (d) engaging in any other activity that, under guidance, constitutes the carrying on of the business of providing virtual asset service or issuing VA or being involved in virtual asset activity. While not expressly excluded, the issuing of virtual assets in or from within the British Virgin Islands is not an activity regulated by the VASP Act. In addition, the VASP Act is not intended to regulate the technology that underlies VA or VASP activities.
Any entity wishing to provide virtual asset services in or from within the BVI is now required to be registered by the FSC. Except for certain exemptions by the FSC, a VASP must have following functionaries appointed at all times: (a) at least 2 individual directors, with one of them being physically resident in the British Virgin Islands; (b) an authorized representative approved by the FSC; (c) an qualified auditor for the purposes of auditing its financial statements; and (d) a compliance officer. The VASP Act sets out a number of general obligations for VASPs which include: (a) maintaining records that (i) are sufficient to show and explain its transactions, (ii) enable its financial position to be determined with reasonable accuracy, (iii) enable it to prepare all necessary financial returns and statements, (iv) enable its financial statements to be audited, (v) show any complaints made by clients and how such complaints have been dealt with and (vi) show the steps it takes to guard against money laundering, terrorist financing and proliferation financing; (b) reporting information to FSC including the level of exposure of clients, the financial position of the VASP and any other information set out in the section 20 of VASP Act and submitting a copy of its auditor’s report to the FSC within 6 months of the end of its financial year; (c) ensuring that client assets are identified, or identifiable, and appropriately segregated and accounted for; (d) co-operating with the FSC to ensure compliance with the VASP Act and any other enactment relating to a regulated activity which applies to a VASP, and providing the FSC with any documents or information it may require to discharge its functions; and (e) obtaining the FSC’s prior approval to any proposed change of name, and prior written approval to appoint a director or senior officer and dispose of any significant interest or controlling interest in the VASP and provide fiat currency-to-fiat currency exchange services to users of its virtual assets exchange and provide innovative FinTech in relation to virtual assets where “significant interest” means a holding or interest in the entity or any holding company of the entity held or owned by a person, either alone or with any other person and whether legally or equitably, that entitles or enables the person, directly or indirectly to (i) control ten percent or more of the voting rights of that entity at a meeting of the entity or of its members; (ii) a share of ten percent or more in any distribution (if applicable) made by the entity;(iii) a share of ten percent or more in any distribution (if applicable) of the surplus assets of the entity; or( iv) appoint or remove one or more directors of the entity; and “controlling interest” means interest in an entity whereby (i) the person holding the interest has an influence over the activities of any undertaking of the entity without having a significant interest in the undertaking; or (ii) a director or senior officer of the entity is accustomed to acting on the instructions of the person.
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Under the existing financial service legislation, virtual asset products may be captured from regulatory perspective in one of two ways:
| ● | Regulated Activities – At Initial Issue Investments |
The FSC has confirmed that virtual assets and virtual asset-related products used as a means of payment for goods and services, which provide the purchaser with an ability only to purchase goods and services, would not be captured by financial services legislation. However, where a virtual asset product or service provides a benefit or right beyond a medium of exchange, it may be captured under the Securities and Investment Business Act of the British Virgin Islands (as amended) (the “SIBA”).
The SIBA provides that no person shall carry on “investment business” of any kind in or from within the British Virgin Islands unless licensed or authorized by the FSC to carry on such investment business unless otherwise excluded under Schedule 2. If virtual asset-related products constitute, including but not limited to, mutual funds, shares or interests in an entity, debentures, instruments giving entitlement to shares, interests or debentures, certificates representing investments, options, futures, contracts for differences, instruments for foreign exchange, long-term insurance contracts, and rights and interests in investments, the initial issuance of such products is likely to be subject to the SIBA and, therefore, licensing, authorization and approval may be required.
| ● | Regulated Activities – After Issuance |
After issuance, activities involving virtual assets and virtual asset-related products that may be considered regulated activities and therefore require licensing in accordance with the following legislation:
| ● | SIBA |
When a virtual asset product fits the definition of an investment, persons carrying on investment business activity will require a license. The following two conditions must be satisfied to determine whether a license is required (1) whether the product satisfies the definition of an “investment” as outlined above under “Regulated Activities – At Initial Issue Investments”; and (2) provided the definition of “investment” is met, whether the investment activity is captured and not excluded pursuant to the SIBA.
| ● | Financial and Money Service Act (as amended) (“FMSA”) |
The FMSA provides for the licensing, registration and supervision of persons carrying on financing business and money services business in or from within the British Virgin Islands. “Money” is defined in the Regulatory Code (as amended) of the British Virgin Islands as including notes and coins; postal orders; cheques of any kind, including traveler’s checks; bankers’ drafts and other payable orders; and money deposited in an account; in each case, in any currency. “Coin” is defined in the Interpretation Act (as amended) of the British Virgin Islands to mean any coin that is legally current in the British Virgin Islands. Given the definitions outlined above, the transmission of virtual assets or virtual asset related products would not require a money services business license. However, considering the launch of the Sandbox (as defined below), the views and guidance of the FSC should first be secured before proceeding with the activity in or from within the British Virgin Islands.
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Financial Services (Regulatory Sandbox) Regulations (as amended) of the British Virgin Islands
Notwithstanding the existing financial services legislation, the FSC also introduced the Financial Services (Regulatory Sandbox) Regulations(as amended) (the “Sandbox Regulations”) in the British Virgin Islands to launch a regulatory sandbox designated to support and facilitate innovation in the financial technology sector and allow businesses to trial new products and services which amount to “innovative FinTech” (the “Sandbox”), for a limited period, without the need to apply for a license to conduct financial services business in the British Virgin Islands. Pursuant to the Sandbox Regulations, “innovative FinTech” is defined as the “development or implementation of a new system, mechanism, idea, method, or other arrangement through the use of technology to create, enhance or promote a product or service with respect to the conduct or provision of a financial services business”. The Sandbox is open to (i) a BVI business company; (ii) a foreign company; (iii) a limited partnership; (iv) a micro business company; (v) a licensee; and (vi) any other person that the FSC has otherwise approved to participate in the Sandbox. In approving an applicant as a Sandbox participant, the FSC must be satisfied that:
| ● | it has received all requisite information and documents from the applicant; |
| ● | the requirements outlined in S. 4(2) of Sandbox Regulations have been materially complied with; |
| ● | the applicant is fit and proper; and |
| ● | the granting of approval is not against the public interest. |
The maximum period permitted under the Sandbox Regulations is 18 months; although, an application to extend this by up to 6 months may be submitted to the FSC (by no later than 30 days before the end of the period). At the end of a Sandbox participant’s period, the participant may elect to either apply to become a fully licensed entity under applicable BVI regulatory legislation, or cease its Sandbox operations. The FSC may revoke a Sandbox participant’s approval to participate in the Sandbox in certain circumstances as specified in the Sandbox Regulations.
The ML/TF/PF (defined below) Regime in the British Virgin Islands
The British Virgin Islands, as an international finance center, remains committed to the global fight against money laundering (“ML”), terrorist financing (“TF”) and proliferation financing (“PF”) by ensuring that it is in compliance with the Financial Action Task Force’s (“FATF”) International Standards on Combatting Money Laundering and the Financing of Terrorism and Proliferation (the “FATF Recommendations”). The National AML/CFT Coordinating Council leads on all AML/CFT-related policy matters and the FSC is responsible for ensuring compliance with the Territory’s AML/CFT systems and controls through supervision of regulated financial institutions in accordance with the Anti-Money Laundering Regulations (as amended) and the Anti-Money Laundering and Terrorist Financing Code of Practice (as amended) (together, the “BVI AML/CTF Regime”). Under the BVI AML/CTF Regime, in conducting “relevant business”, a relevant person shall comply with certain obligations, including but not limited to maintaining identification procedures, record keeping procedures, internal reporting procedures and internal control and communication procedures, taking appropriate measures to make employees aware of the legislation and providing training for employees, before forming a business relationship or carrying out a one-off transaction with or for another person.
Currently, the business of carrying on or providing virtual assets service when a transaction involves virtual assets valued at $1,000 or more is considered “relevant business”. VASPs under such condition are treated as “relevant persons” accordingly and therefore need to comply with the BVI AML Regime. Other than obligations mentioned above, specific obligations relating to the VASPs include but not limited to: (a) appointing a qualified money laundering reporting officer; (b) complying with the new VASP Travel Rule Guidance published by the FSC (“Travel Rule”) in relation to transfers of VA, which requires originating and beneficiary VASPs to obtain, verify, and maintain complete information on the originator and beneficiary of each transfer of virtual assets, before the transaction is executed, or accepted. Intermediary VASPs have separate obligations related to ensuring all such information is complete and to detect missing or incomplete information. VASPs holding both sides of the transfer must determine whether a suspicious activity report should be filed and, if required, make the filing. Originating and beneficiary VASPs can deem verification of such information if (i) it is to or from an account maintained by the VASP and the VASP has verified the identity of the account holder; or (ii) it is not to or from an account maintained by the VASP, does not exceed US$1,000 in value, does not form part of several operations that appear to be linked and together exceed US$1,000, and the relevant VASP does not otherwise suspect money laundering, terrorist financing, proliferation financing, or other financial crime. In addition, each VASP is required to collect customer due diligence is subject to a US$1,000 base for one-off transactions.
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Regulation on Cryptocurrency Related Services in Hong Kong
Currently, there is no specific legislative framework in Hong Kong which regulates VA and therefore no single regulatory body governs such VAs. However, a number of financial regulators have issued guidance relating to VAs, including the SFC, the Hong Kong Monetary Authority (the “HKMA”).
Securities and Futures Commission
Entities conducting activities relating to VAs where the relevant VA fits the definition of “securities” or “futures contracts” under the Securities and Futures Ordinance (Cap. 571) of Hong Kong (the “SFO”) are subject to the offering or marketing restrictions, licensing and registration requirements therein and must comply with the anti-money laundering (“AML”) and counter-terrorist financing (“CTF”) requirements under the AMLO. The vast majority of VAs (such as Bitcoin) do not fit the definition of “securities” or “futures contracts”, but the SFC has imposed specific regulatory requirements on VA trading platform operators (“VATP operators”), VA fund managers, intermediaries dealing in or advising on VA and intermediaries distributing VA-related products.
On November 1, 2018, the SFC published a Statement on Regulatory Framework for Virtual Assets Portfolio Managers, Fund Distributors and Trading Platform Operators (the “Regulatory Framework Statement”). The Regulatory Framework Statement brings portfolio managers and distributors of funds dealing with VAs under the SFC’s regulation and seeks to impose further regulatory requirements on such licensed corporations that the SFC currently regulates. It imposes an overarching “professional investors only” restriction on various types of activities, including the distribution of funds investing in virtual assets.
On November 6, 2019, in the position paper, regulation of VA trading platforms, the SFC announced a regulatory framework for VA trading platforms which offer trading of at least one security token. The framework sets out robust standards in the areas of custody of assets, cybersecurity, know-your-client, anti-money laundering, market surveillance, accounting and auditing, product due diligence and risk management.
On December 22, 2023, the SFC issued the joint circular on intermediaries’ VA-related activities (the “Joint Circular”), which replaced its previous versions dated January 28, 2022 and October 20, 2023. The Joint Circular applies to intermediaries that wish to engage in the distribution of VA-related products and the provision of VA dealing and advisory services. The Joint Circular clearly specifies the requirements applicable to intermediaries when they distribute VA-related products; and sets out the standards of conduct expected of intermediaries when distributing VA funds authorized by the SFC.
When the SFC issued the previous October 2023 version of the Joint Circular, it updated the terms and conditions for licensed corporations or registered institutions which manage portfolios that invest in virtual assets (the “VAFM Terms and Conditions”) in the appendix, replacing its previous version dated October 4, 2019. The VAFM Terms and Conditions regulates licensed corporations managing portfolios that directly invest in VA through the VAFM Terms and Conditions, applying to Type 9 (asset management) licensees managing portfolios solely or partially invested in virtual assets and Type 1 (dealing in securities) licensees managing collective investment schemes investing in non-security virtual assets. These terms adapt existing requirements to address virtual asset-specific risks. For portfolios with less than 10% virtual asset investment or indirect investments, the SFO regime for Type 9 regulated activity applies. The VAFM Terms and Conditions are also imposed on discretionary account management services exceeding the 10% threshold. Type 1(dealing in securities) intermediaries providing discretionary VA dealing services as an ancillary service must not exceed the 10% threshold on a portfolio basis for each client.
In addition, the terms and conditions for licensed corporations or registered institutions providing virtual asset advisory services (the “VA Dealing or Advisory Terms and Conditions”) was published in the previous October 2023 version of the Joint Circular. VA Dealing or Advisory Terms and Conditions are based on the “same business, same risks, same rules” principle and adapt existing securities dealing and advisory requirements to address the unique risks of VA. For investor protection, intermediaries must partner with SFC-licensed VA trading platforms, either by introducing clients for direct trading or establishing an omnibus account with the platform.
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The Joint Circular sets out new requirements and reminds intermediaries of the existing requirements that apply to the relevant activities:
| ● | Distribution of investment products with VA Exposure – distributors of investment products exposed to VA must comply with SFC’s complex product sales requirements, ensuring suitability regardless of solicitation or recommendation. The SFC and HKMA impose additional investor protection measures, including selling restrictions and a virtual asset knowledge test, especially for non-institutional investors. Certain VA-related derivative products traded on regulated exchanges and authorized VA futures ETFs are exempt from the “professional investors only” restriction. The distribution of VA funds authorized by the SFC for public offering is not restricted to professional investors, but intermediaries must conduct a knowledge test and comply with suitability and disclosure requirements. |
| ● | Provision of VA dealing services – the SFC and HKMA require intermediaries to partner only with SFC-licensed VA trading platforms for dealing services to ensure investor protection. Intermediaries must comply with all regulatory requirements and provide such services only to Type 1 (dealing in securities) regulated activity clients. Additional conduct requirements for dealing services under an omnibus account arrangement are set out, including assessing client knowledge and risk tolerance, setting exposure limits, and ensuring adequate controls. Intermediaries providing dealing services as introducing agents must not relay orders or hold client assets. |
| ● | Provision of Asset Management Services in VA – intermediaries providing virtual asset portfolio management services are subject to additional requirements set out in the VAFM Terms and Conditions. For discretionary account management services, intermediaries should invest less than 10% of the gross asset value of the client’s portfolio in VA. It is necessary to comply with existing asset management requirements and standards for tokenized securities. |
| ● | Provision of VA advisory services – intermediaries providing VA advisory services must comply with all regulatory requirements and provide such services only to Type 1 (dealing in securities) or Type 4 (advising on securities) regulated activity clients. The expected conduct requirements include observing suitability obligations and ensuring high liquidity and availability of recommended virtual assets on SFC-licensed platforms. |
On November 2, 2023, the SFC published the circular on intermediaries engaging in tokenised securities-related activities with recognition of the growing interest in tokenizing traditional financial instruments and provided guidance to support intermediaries in navigating the regulatory landscape for tokenized securities. The guidance aims to clarify the application of existing securities regulations to tokenized securities, address new risks associated with tokenization, and ensure investor protection. The SFC encourages innovation while requiring intermediaries to manage ownership and technology risks effectively. The circular also clarifies previous statements on security token offerings, outlines the requirements for fund managers and virtual asset trading platforms, and provides instructions for intermediaries engaging in digital securities activities. It emphasizes the need for intermediaries to notify the SFC of their intentions to engage in such activities and to comply with public offering regimes and investor protection measures.
On January 16, 2025, the SFC published the circular to new virtual asset trading platforms seeking to be licensed – enhanced licensing process and revamped external assessments. This circular focuses on the licensing process and revamped external assessment for new corporations applying for a license to operate a VATP, and supersedes the scope of external assessment reports issued in June 2023. VATPs will no longer be required to conduct the first-phase and second-phase assessments. There will only be one external assessment throughout the licensing application process. The external assessment will be performed under a tripartite agreement among the SFC, the VATP and a suitable external assessor.
On April 7, 2025, the SFC provided regulatory guidance respectively to licensed virtual asset trading platforms (VATPs) on their provision of staking services, and to SFC-authorized funds with exposure to virtual assets (VA Funds) on their engagement in staking. Staking refers to the process of committing or locking client virtual assets for a validator to participate in a blockchain protocol’s validation process based on a proof-of-stake consensus mechanism, with returns generated and distributed for that participation. It allows VATPs to expand product and service offerings, one of the five pillars set out in the SFC’s “ASPIRe” roadmap issued on February 19, 2025, to develop Hong Kong’s virtual asset ecosystem.
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On April 7, 2025, the SFC issued the circular on SFC-authorized funds with exposure to virtual assets that outlines the requirements for SFC-authorized funds with exposure to VA exceeding 10% of their net asset value for public offerings in Hong Kong. This updated circular replaces the previous one issued on December 22, 2023, and details the conditions under which such funds can invest directly or indirectly in VA tokens accessible on SFC-licensed VATPs. Management companies must have a good regulatory compliance record and staff with relevant VA management experience, and that funds can only invest in VA tokens accessible on SFC-licensed VATPs. The circular also mandates that investment strategies comply with specific liquidity and roll cost management requirements for VA futures, prohibits leveraged exposure to VA at the fund level, and requires transactions and acquisitions of spot VA to be conducted through SFC-licensed VATPs or authorized financial institutions (“AIs”). Additionally, custody must be delegated to SFC-licensed VATPs or AIs meeting HKMA standards, and that the valuation of spot VA should be based on an indexing approach reflecting significant trading activities. The circular emphasizes the need for investor education and proper disclosure of risks associated with VA investments and requires prior consultation and approval from the SFC for funds seeking authorization or intending to engage in VA-related activities.
On May 27 2026, the SFC issued the revised circular on SFC-authorized funds with exposure to virtual assets, which supersedes the circular issued on April 7 2025. The circular sets out the requirements under which the SFC would consider tokenized investment funds with exposure to virtual assets of more than 10% of their net asset value for public offerings in Hong Kong under sections 104 and 105 of the SFO, and the VA-related activities in which SFC-authorized VA Funds may engage. These requirements do not apply to SFC-authorized funds’ exposure to fiat referenced stablecoins the issue of which is authorized by a license granted under the Stablecoins Ordinance, or tokenized deposits. SFC-authorized VA Funds should only invest, directly or indirectly, in VA tokens that are accessible to the Hong Kong public for trading on SFC-licensed VATPs. For VA futures, only those traded on conventional regulated futures exchanges are allowed, subject to the management company demonstrating that the relevant VA futures have adequate liquidity and that roll costs are manageable and explaining how such roll costs will be managed. SFC-authorized VA Funds should not have leveraged exposure to VA at the fund level. Transactions and acquisitions of spot VA by SFC-authorized VA Funds should be conducted through SFC-licensed VATPs, or authorized financial institutions or subsidiaries of locally incorporated authorized financial institutions in compliance with HKMA regulatory requirements. The trustee or custodian of an SFC-authorized VA Fund should only delegate its VA custody function, where applicable, to an SFC-licensed VATP, an authorized financial institution or subsidiary of a locally incorporated authorized financial institution meeting the expected VA custody standards issued by the HKMA from time to time, or such other entities acceptable to the SFC. The circular also requires appropriate disclosure in offering documents and product key facts statements, investor education before launch, and prior consultation with and approval of the SFC for funds with or intending to have VA exposure of more than 10% of NAV seeking SFC authorization, existing SFC-authorized funds planning to obtain VA exposure of more than 10% of NAV, and SFC-authorized VA Funds intending to engage in staking and other VA-related activities.
Hong Kong Monetary Authority
On January 12, 2022, the HKMA released a Discussion Paper on Crypto-assets and Stablecoins (the “Discussion Paper”). The Discussion Paper set out the HKMA’s thinking on the regulatory approach for crypto-assets, particularly payment-stablecoins, and proposed bringing certain activities relating to payment-related stablecoins within regulatory perimeter. In January 2023, the HKMA issued the conclusion to the Discussion Paper, market feedback and proposing to bring certain activities relating to stablecoins into regulation.
On January 28, 2022, the HKMA published a circular on regulatory approaches to authorized institutions’ interface with virtual assets and virtual asset service providers (the “HKMA Circular”). The HKMA Circular requires an authorized institution to ensure that any VA-related activities it intends to engage in will not breach any applicable laws and regulations in Hong Kong or any other relevant jurisdictions, undertake risk assessments to identify and understand the associated risks, including prudential supervision risks, AML/CTF and financial crime risks and investor protection risks, and discuss with the HKMA and other applicable regulators and obtain the HKMA’s feedback on the adequacy of its risk-management controls before launching relevant products or services.
On December 27, 2023, the HKMA and the Financial Services and the Treasury Bureau (“FSTB”) jointly issued a public consultation paper on the legislative proposal to regulate issuers of stablecoins. The consultation paper proposed a regulatory regime for fiat-referenced stablecoin (“FRS”) issuers including a licensing regime requiring in-scope FRS issuers to be licensed by the HKMA, restrictions on the offering of FRS, restrictions on advertising, powers for the authorities to adjust the parameters of in-scope stablecoins and activities having regard to rapid virtue assets market development, and transitional arrangements to facilitate implementation of the regulatory regime.
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In connection with this consultation, the HKMA announced on March 12 2024 the launch of the stablecoin issuer sandbox arrangement.
On December 18, 2024, the Government of Hong Kong introduced the Stablecoins Bill into the Legislative Council of Hong Kong to establish a regulatory regime for the supervision of activities involving stablecoins and to provide the HKMA with relevant supervisory, investigatory an enforcement powers. The Stablecoins Bill was passed by the Legislative Council on May 21, 2025.
The Stablecoins Ordinance (Cap. 656) came into operation on August 1, 2025. Following implementation of the regulatory regime under the Stablecoins Ordinance, the business of issuing fiat-referenced stablecoins is a regulated activity in Hong Kong and a license is required.
Under the Stablecoins Ordinance, stablecoins are virtual assets used or intended to be used as a medium of exchange, such as for payments for goods or services, and which purport to maintain a stable value with reference to a single asset, or a pool or basket of assets. The definition excludes digital representations of value that are issued by central banks or governments, such as central bank digital currencies. The Stablecoins Ordinance establishes a regulatory framework for specified stablecoins, which are stablecoins that purport to maintain a stable value with reference to one or more official currencies or a digital representation of value. Regulated stablecoin activities include: (i) issuing, in the course of business, a specified stablecoin in Hong Kong; (ii) issuing, in the course of business, a specified stablecoin outside Hong Kong that is wholly or partly referenced to Hong Kong dollars; (iii) carrying on an activity specified by the HKMA under the Stablecoins Ordinance; and (iv) actively marketing, whether in Hong Kong or outside Hong Kong, to the Hong Kong public that the person carries on, or purports to carry on, an activity constituting a regulated stablecoin activity in Hong Kong. Carrying on these activities requires a license issued by the HKMA.
On May 26, 2025, the HKMA published consultation papers on the proposed AML/CFT requirements for regulated stablecoin activities and on the draft Guideline on Supervision of Licensed Stablecoin Issuers. On July 29, 2025, the HKMA published the implementation package for the stablecoin issuer regime, including the consultation conclusions and final Guideline on Supervision of Licensed Stablecoin Issuers, the consultation conclusions and final Guideline on Anti-Money Laundering and Counter-Financing of Terrorism (for Licensed Stablecoin Issuers), an Explanatory Note on Licensing of Stablecoin Issuers, and an Explanatory Note on Transitional Provisions for Pre-existing Stablecoin Issuers. The HKMA stated that the regulatory regime would come into effect on August 1, 2025 and advised market participants to observe the Stablecoins Ordinance and the relevant guidelines.
In August 2025, the HKMA’s finalized Guideline on Supervision of Licensed Stablecoin Issuers set out regulatory expectations for licensed stablecoin issuers, including matters relating to reserve asset management, issuance, redemption and distribution, business activities, financial resources and risk management. The HKMA’s finalized Guideline on Anti-Money Laundering and Counter- Financing of Terrorism sets out AML/CFT requirements for licensed stablecoin issuers, including the adoption of a risk-based approach, institutional ML/TF risk assessments, governance and senior management oversight, internal audit and staff training, controls to combat terrorist financing, financial sanctions and proliferation financing, suspicious transaction reporting, and record-keeping.
In addition, licensed stablecoin issuers are expected to comply with specific AML/CFT requirements appropriate to the activities they conduct, including measures relating to stablecoin issuance and redemption, custodial wallets, unhosted wallet risks and ongoing monitoring of customers to detect potential illicit activities involving specified stablecoins.
On April 10, 2026, the HKMA announced that it had granted stablecoin issuer licenses under the Stablecoins Ordinance to Anchorpoint Financial Limited and The Hong Kong and Shanghai Banking Corporation Limited for issuing stablecoins in Hong Kong. The HKMA maintains a register of licensed stablecoin issuers on its website, and members of the public are reminded to verify licensing status through the register and to use regulated channels when acquiring or using stablecoins.
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Financial Services and the Treasury Bureau
In May 2026, the FSTB and the SFC published the consultation conclusions on the legislative proposal to regulate virtual asset advisory service providers and virtual asset management service providers in Hong Kong, following a consultation paper issued on 24 December 2025. Based on the consultation conclusions, the FSTB and the SFC will finalize legislative proposals for establishing licensing regimes for VA advisory service providers and VA management service providers under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap. 615), with a view to introducing a bill into the Legislative Council in 2026. The proposed VA Advisory Regime will cover any person who carries on a business in Hong Kong of giving advice on whether, which, the time at which, or the terms or conditions on which, VAs should be acquired or disposed of, or issuing analyses or reports to facilitate recipients’ decisions on whether, which, the time at which, or the terms or conditions on which, VAs are to be acquired or disposed of, unless an exemption applies. The proposed VA Management Regime will cover any person who carries on a business in Hong Kong of providing a service of managing a portfolio of VAs for another person. The FSTB and the SFC stated that no de minimis threshold will be set for the VA Management Regime. Accordingly, intermediaries licensed by or registered with the SFC to carry on Type 9 regulated activity under the SFO which currently manage portfolios with VA exposure below the existing de minimis threshold will be required to obtain a license or registration for providing VA management services under the VA Management Regime once the regime takes effect.
New Licensing Regime for Virtual Asset Exchanges
Following a consultation process which started in November 2020, the Hong Kong government introduced the Anti-Money Laundering and Counter-Terrorist Financing (Amendment) Bill 2022 (the “AMLO Amendment”) on 6 July 2022. The AMLO Amendment introduces changes to the AMLO, including the introduction of a licensing regime for virtual asset service providers (“VASP”) and imposing statutory AML/CTF obligations on VASPs in Hong Kong.
Under the new licensing regime introduced by the AMLO Amendment, any person carrying on a business of providing VA services in Hong Kong, or holding themselves out as doing so, will need to be licensed as a VASP by the SFC. It will also be an offence for a person to actively market any VA service it provides outside Hong Kong to the public in Hong Kong without a VASP license.
The AMLO Amendment defines VA as a digital representation of value that:
| ● | is expressed as a unit of account or a store of economic value; either: |
| - | functions (or is intended to function) as a medium of exchange accepted by the public as payment for goods or services or for the discharge of debt, or for investment purposes; or |
| - | provides rights, eligibility or access to vote on the management, administration or governance of the affairs in connection with any cryptographically secured digital representation of value; and |
| ● | can be transferred, stored or traded electronically. |
The AMLO Amendment defines VA services as only including the operation of an VA exchange, which is defined as the provision of services through means of electronic facility
| ● | whereby: |
| - | offers to sell or purchase VAs are regularly made or accepted in a way that forms or results in binding transaction; or |
| - | persons are regularly introduced, identified to other persons in order that they may negotiate or conclude, or with the reasonable expectation that they will negotiate or conclude sales or purchases of VAs in a way that forms or results in a binding transaction; and |
| ● | where client money or client VA comes into direct or indirect possession of the person providing such service. |
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The definition of VA service may be expanded by the Secretary for Financial Services and the Treasury through notice published in the Gazette.
The VASP licensing regime under the AMLO Amendment came into effect on June 1, 2023.
The SFC is the key regulator under the VASP licensing regime and is responsible for assessing licensing applications and supervising licensed VASPs. Applicants for a VASP license must satisfy certain requirements, including corporate structure and location, financial resources, fitness and propriety, and premises approval. Once licensed, a VASP will be subject to certain AML/CTF requirements and other ongoing obligations for investor protection purposes.
Regulations relating to Labor and Social Welfare of Hong Kong
Our employees in Hong Kong are subject to the Hong Kong Employment Ordinance (the “EO”). The EO is the principal employment legislation in Hong Kong and provides for minimum statutory benefits and protections, including paid annual leave, paid sickness days and sickness allowance, maternity leave, paternity leave, statutory rest days, statutory holidays, and statutory termination-related protections and payments, including severance payments and long service payments where applicable.
Subject to limited exceptions, the EO applies to employees working in Hong Kong, regardless of nationality. Other mandatory laws that are likely to apply to the employment relationship with our Hong Kong employees include the following:
| ● | Personal Data (Privacy) Ordinance. This ordinance regulates the collection, holding, processing, use and transfer or disclosure of employees’ personal data, including personal data contained in emails and other workplace communications. |
| ● | Mandatory Provident Fund Schemes Ordinance. Subject to limited exceptions, this ordinance requires employers in Hong Kong to enroll relevant employees in a Mandatory Provident Fund scheme, to which both the employer and employee are required to make contributions. Foreign nationals may be exempt if they are posted in Hong Kong to work for a period not exceeding 13 months or are members of an overseas retirement, provident, pension or superannuation scheme. In certain cases, a Hong Kong employee working outside Hong Kong may still be subject to this ordinance if the employment has a sufficient connection with Hong Kong. The Legislative Council passed the Employment and Retirement Schemes Legislation (Offsetting Arrangement) (Amendment) Bill 2022 on 9 June 2022 to abolish the use of accrued benefits derived from employers’ mandatory contributions under the Mandatory Provident Fund system to offset severance payments and long service payments. The abolition of the MPF offsetting arrangement took effect on 1 May 2025. |
| ● | Occupational Safety and Health Ordinance. This ordinance imposes a duty on employers, so far as reasonably practicable, to ensure the safety and health at work of their employees. The Occupational Safety and Health Ordinance covers most industrial and non-industrial workplaces in Hong Kong. |
| ● | Employees’ Compensation Ordinance. This ordinance establishes a no-fault, non-contributory employee compensation system for work injuries. If an employee suffers injury by accident arising out of and in the course of employment, the employer is generally liable to compensate the employee under the Employees’ Compensation Ordinance. Eligible family members of an employee who dies as a result of an accident at work may also be entitled to compensation. All employers are required to maintain valid employees’ compensation insurance policies to cover their liabilities under the ordinance and at common law. |
| ● | Sex Discrimination Ordinance, Disability Discrimination Ordinance, Family Status Discrimination Ordinance and Race Discrimination Ordinance. These ordinances prohibit various forms of discrimination, harassment, victimization and vilification in prescribed areas, including employment. |
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| ● | Labour Tribunal Ordinance. This ordinance empowers the Labour Tribunal to hear and resolve employment-related disputes, including claims relating to employment contracts and alleged breaches of the Employment Ordinance. |
| ● | Factories and Industrial Undertakings Ordinance. This ordinance applies to industrial undertakings, including factories, construction sites, catering establishments, cargo and container handling undertakings, repair workshops and other industrial workplaces, and imposes duties on proprietors and persons employed at industrial undertakings to ensure safety and health at work. |
| ● | Minimum Wage Ordinance. This ordinance establishes a statutory minimum wage regime in Hong Kong. |
Seasonality
Currently, our business operations do not experience any seasonality.
Employees
As of March 31, 2026, we had an aggregate of 31 employees, all of which are full-time employees. In addition, we were further supported by a team of 3 external consultants. As of March 31, 2024, 2025 and 2026, we had an aggregate of 19, 25 and 31 employees, respectively.
The following table sets forth a breakdown of our employees by function as of March 31, 2026:
| As of March 31, 2026 | ||||||||
| Functions: | Number | % of Total | ||||||
| Management | 4 | 12.9 | ||||||
| Sales and trading team | 15 | 48.4 | ||||||
| SFC licensed employees | 4 | 12.9 | ||||||
| General and administrative | 8 | 25.8 | ||||||
| Total | 31 | 100.0 | ||||||
None of our employees are represented by a labor union. We have not experienced any work stoppages, and we consider our relations with our employees to be good. We compensate our employees with basic salaries. As required by Hong Kong laws and regulations, we participated in Mandatory Provident Fund plans for our employees.
Intellectual Property
As of March 31, 2026, we held two main domain names relating to our business, including our current and previous corporate websites. As of March 31, 2026, we held ten registered trademarks and the relevant rights to the logos of Metalpha and MeTone in various jurisdictions, including European Union, Hong Kong, Australia, Canada, Columbia, United Kingdom, Gambia, Indonesia, India, Iceland, Japan, South Korea, Mexico, Malaysia, Norway, New Zealand, Philippines, Rwanda, Singapore, Thailand, Tunisia, Turkey, Zambia, Zimbabwe, Belarus, Switzerland, Egypt, Morocco, Namibia, Russia, Ukraine, and Vietnam. The affiliates of our shareholder, Northstar Technologies, held 12 registered trademarks and nine pending trademark applications and the relevant rights to the logo of Metalpha in various jurisdictions, including China Taiwan, Bangladesh, and the United States. We have use and other relevant rights related to the “Metalpha” registered trademark and logo for our business operations.
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Foreign Private Issuer Status
We are a foreign private issuer within the meaning of the rules under the Exchange Act. As such, even after we no longer qualify as an emerging growth company, as long as we qualify as a foreign private issuer under the Exchange Act we are exempt from certain provisions of the Exchange Act that are applicable to U.S. domestic public companies. For example:
| ● | we are not required to provide as many Exchange Act reports, or as frequently, as a domestic public company; |
| ● | for interim reporting, we are permitted to comply solely with our home country requirements, which are less rigorous than the rules that apply to domestic public companies; |
| ● | we are not required to provide the same level of disclosure on certain issues, such as executive compensation; |
| ● | we are exempt from provisions of Regulation FD aimed at preventing issuers from making selective disclosures of material information; |
| ● | we are not required to comply with the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of a security registered under the Exchange Act; and |
| ● | our executive officers, directors and principal shareholders are exempt from the short-swing profit and recovery provisions and our principal shareholders are exempt from the reporting requirements contained in Section 16 of the Exchange Act. |
| C. | Organizational Structure |
The following diagram illustrates our corporate structure, including our significant subsidiaries, as of the date of this annual report:
Investors are purchasing their interest in the holding company in the Cayman Islands, Metalpha Technology Holding Limited. The operations are conducted through its subsidiaries.
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| D. | Property, Plants and Equipment |
The address of our principal executive offices is Suite 5506-07, Central Plaza, 18 Harbour Road, Wan Chai, Hong Kong, China, where we lease office space of approximately 2,024 square feet, pursuant to a lease agreement with a third party, for the period from October 1, 2025 to September 30, 2027. The monthly rent is HKD243,048.00 (approximately $29,973) and the monthly service charge is HKD45,198.40 (approximately $5,788).
ITEM 4A. UNRESOLVED STAFF COMMENTS
None.
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS
| A. | Operating Results |
Overview
Upon the completion of the Disposition in March 2023, we discontinued and ceased the supply chain management business and terminated the VIE structure. Currently, we provide digital asset services to customers through our subsidiaries. We began offering these services in December 2021 and generated income primarily from the execution of cryptocurrency-related transactions, including the issuance of derivative products to OTC clients and income from our proprietary trading activities. For the fiscal years ended March 31, 2024, 2025 and 2026, the income generated from our digital asset services was $16.8 million, $41.5 million and $37.1 million, respectively. Moreover, our Hong Kong subsidiary, LSQ Capital Limited, is licensed by SFC to provide asset management services in Hong Kong.
For the fiscal years ended March 31, 2024, 2025 and 2026, our total revenue was $16.8 million, $44.6 million and $37.1 million, respectively, and our net profit (loss) for the year amounted to a loss of $3.7 million, a profit of $15.9 million, and a profit of $1.2 million, respectively.
| B. | Factors Affecting Our Results of Operations |
In the course of our operations, our performance is influenced by several key factors. Below are the principal factors that we believe significantly impact our results of operations.
Trends and Volatility in the Crypto Industry
The trends and volatility in the crypto industry have a direct bearing on our results of operations. The value of our products and the underlying cryptocurrencies are subject to market conditions. A downturn in market prices of cryptocurrencies or increased volatility may impact our customers’ willingness to purchase our products, subsequently affecting our revenue, income and profits. See “Item 3. Key Information—D. Risk Factors—Risks Relating to Our Business and Industry—We may face several risks due to disruptions in the crypto asset markets, including but not limited to the risk from depreciation in our stock price, loss of customer demand, financing risk, risk of increased losses or impairments in our investments or other assets, risks of legal proceedings and government investigations, and risks from price declines or price volatility of crypto assets.”
Our Risk and Portfolio Management Capabilities
Our results of operations are largely dependent on our ability to effectively manage the market risks in our trading portfolio. Leveraging our growing experience in the crypto industry, we have effectively executed our risk-hedging trading strategies in our daily operation. However, market conditions can change rapidly and we may not be able to adjust our trading strategies in a timely manner, which may impact our results of operations.
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Our Relationships with Certain Key Customers
We generate a significant amount of income from certain key customers. For the fiscal year ended March 31, 2024, the aggregate transaction size of the products traded was approximately $517.0 million, among which our top three customers subscribed to products of an aggregate transaction size of approximately $275.3 million, representing approximately 53.2% of the total transaction size for the same fiscal year. For the fiscal year ended March 31, 2025, the aggregate transaction size of the products traded was approximately $816.6 million, among which our top three customers subscribed to products of an aggregate transaction size of approximately $291.3 million, representing approximately 35.7% of the total transaction size for the same fiscal year. For the fiscal year ended March 31, 2026, the aggregate transaction size of the products traded was approximately $1,124.2 million, among which our top three customers subscribed to products of an aggregate transaction size of approximately $223.1 million, representing approximately 19.8% of the total transaction size for the same fiscal year. If our relationships with such top customers deteriorate, they may significantly reduce or even cease their purchase of our products, which could materially impact our results of operations. See “Item 3. Key Information—D. Risk Factors—Risks Relating to Our Business and Industry— Our digital asset business is subject to customer concentration risk.”
Our Ability to Acquire Qualified New Customers
Our growth also depends on our ability to acquire new customers. Currently, our clientele for our digital asset services comprises institutional investors and high-net-worth individuals who meet the criteria of professional investors. We plan to constantly tap into new markets and attract and retain new customers to maintain our business growth. However, given the compliance requirements and our client demographic, we do not, and cannot, advertise our business to the public. Our marketing campaigns may not be effective in attracting new customers and there is no assurance that existing customers will stay with us. We may also incur significant expenses in connection with our branding and marketing efforts to acquire new customers and retain existing ones. Our results of operations may be adversely affected if we fail to acquire qualified new customers.
Our Partnerships with Key Service Providers in the Crypto Industry
Our business operations depend on several key partners in the crypto industry for trading and asset custody, such as Binance and Deribit. Our portfolio of digital assets is held under the custodianship of these key partners. The state of our partnerships with these key service providers directly affects the availability of our products and underlying digital assets, which may impact our results of operations.
Key Line Items Affecting Our Results of Operations
Revenue
The following table sets forth our income generated from continuing operation for the periods indicated:
| For the fiscal year ended March 31, | ||||||||||||
| 2026 | 2025 | 2024 | ||||||||||
| US$ | US$ | US$ | ||||||||||
| Income from digital asset services | ||||||||||||
| - Unrealized fair value change of trading of digital assets, listed securities, funds and derivative contracts | 6,634,615 | 45,354,354 | 5,865,294 | |||||||||
| - Realized gain (loss) on trading of listed securities, funds and derivative contracts | 27,809,199 | (5,828,824 | ) | 9,745,407 | ||||||||
| - Interest income on trading of digital assets and derivative contracts | 2,146,423 | 1,859,490 | 916,616 | |||||||||
| - Services fee income | 542,726 | 73,209 | 236,228 | |||||||||
| 37,132,963 | 41,458,229 | 16,763,545 | ||||||||||
| Income from securities advising and asset management services | ||||||||||||
| - Performance fee income | - | 2,785,944 | - | |||||||||
| - Gain on disposal of financial assets at FVTPL | - | 323,084 | - | |||||||||
| - | 3,109,028 | - | ||||||||||
| Total Revenue | 37,132,963 | 44,567,257 | 16,763,545 | |||||||||
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We started the digital asset business in December 2021. For such business, we generate income primarily from the execution of cryptocurrency-related transactions, including the issuance of derivative products to OTC clients and income from our proprietary trading activities. For the fiscal years ended March 31, 2024, 2025 and 2026, income from our digital asset services was $16.8 million, $41.5 million and $37.1 million, respectively.
Our Hong Kong subsidiary, LSQ Capital Limited, provides securities advising and asset management services to customers in Hong Kong. LSQ Capital Limited holds the Type 1 (Dealing in Securities), Type 4 (Advising on Securities) and Type 9 (Asset Management) licenses as per the SFC regulations. We did not recognize any income from such services during the fiscal year ended March 31 2024. For the fiscal year ended March 31, 2025 and 2026, income from our securities advising and asset management services was $3.1 million and nil, respectively.
Cost of Income
Cost of income consists of commission to traders, technical support fees and transaction fees. For the fiscal years ended March 31, 2024, 2025 and 2026, our cost of income for continuing operation was $11.1 million, $23.3 million and $21.7 million, respectively.
Share Purchase Warrants Expenses
Share purchase warrants expenses represent the expenses in relation to the issuance of warrants to certain consultants, employees, and Northstar Technologies in the fiscal years ended March 31, 2022 and 2023. For the fiscal years ended March 31, 2024, 2025 and 2026, our share purchase warrants expenses for continuing operation was $6.0 million, $1.7 million and nil, respectively.
General and Administrative Expenses
General and administrative expenses for continuing operation consist primarily of share-based compensation, the professional fees paid to legal advisors, consultants and the auditor, wages and benefits for our general and administrative personnel, director fees in relation to compensation and incentives paid for services rendered by our directors, insurance costs and amortization of right-of-use assets. For the fiscal years ended March 31, 2024, 2025 and 2026, our general and administrative expenses for continuing operation were $4.3 million, $3.8 million and $14.0 million, respectively.
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Results of Operations
The following table sets forth a summary of our consolidated results of operations for the periods presented, both in absolute amount and as a percentage of our income from principal activities for the years presented. This information should be read together with our consolidated financial statements and related notes included elsewhere in this annual report. The results of operations in any period are not necessarily indicative of our future results.
| For the fiscal year ended March 31, | ||||||||||||||||||||||||
| 2026 | 2025 | 2024 | ||||||||||||||||||||||
| US$ | % | US$ | % | US$ | % | |||||||||||||||||||
| Revenue | 37,132,963 | 100.0 | 44,567,257 | 100.0 | 16,763,545 | 100.0 | ||||||||||||||||||
| Cost of income | (21,743,170 | ) | (58.6 | ) | (23,264,964 | ) | (52.2 | ) | (11,135,797 | ) | (66.4 | ) | ||||||||||||
| Gross profit | 15,389,793 | 41.4 | 21,302,293 | 47.8 | 5,627,748 | 33.6 | ||||||||||||||||||
| Operating expenses | ||||||||||||||||||||||||
| Selling and promotion | (5,745 | ) | (0.0 | ) | (69,663 | ) | (0.2 | ) | (41,411 | ) | (0.2 | ) | ||||||||||||
| General and administrative | (14,031,348 | ) | (37.8 | ) | (3,793,419 | ) | (8.5 | ) | (4,254,719 | ) | (25.4 | ) | ||||||||||||
| Total operating expenses | (14,037,093 | ) | (37.8 | ) | (3,863,082 | ) | (8.7 | ) | (4,296,130 | ) | (25.6 | ) | ||||||||||||
| Profit from operation | 1,352,700 | 3.6 | 17,439,211 | 39.1 | 1,331,618 | 7.9 | ||||||||||||||||||
| Other income and expenses, net | ||||||||||||||||||||||||
| Other income | 237,525 | 0.6 | 882,238 | 2.0 | 1,041,062 | 6.2 | ||||||||||||||||||
| Impairment on financial asset at fair value through profit or loss | - | - | (671,403 | ) | (1.5 | ) | - | - | ||||||||||||||||
| Share purchase warrants expenses | - | - | (1,680,038 | ) | (3.8 | ) | (6,047,848 | ) | (36.1 | ) | ||||||||||||||
| Finance costs | (17,777 | ) | (0.0 | ) | (75,253 | ) | (0.2 | ) | (4,241 | ) | (0.0 | ) | ||||||||||||
| Total other income and expenses, net | 219,748 | 0.6 | (1,544,456 | ) | (3.5 | ) | (5,011,027 | ) | (29.9 | ) | ||||||||||||||
| Profit (loss) before income tax expense | 1,572,448 | 4.2 | 15,894,755 | 35.7 | (3,679,409 | ) | (21.9 | ) | ||||||||||||||||
| Income tax expense | (289,094 | ) | (0.8 | ) | - | - | - | - | ||||||||||||||||
| Profit (loss) for the year | 1,283,354 | 3.5 | 15,894,755 | 35.7 | (3,679,409 | ) | (21.9 | ) | ||||||||||||||||
Fiscal Year ended March 31, 2026 Compared to Fiscal Year ended March 31, 2025
Income
Our income decreased from $44.6 million for the fiscal year ended March 31, 2025 to $37.1 million for the fiscal year ended March 31, 2026, primarily because of a decrease in unrealized fair value gains on our digital asset and derivative trading, and the absence of income from our securities advising and asset management services (which was $3.1 million for the fiscal year ended March 31, 2025), which were partially offset by an increase in realized gains on trading of digital assets and derivative contracts.
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Cost of Income
Our cost of income decreased from $23.3 million for the fiscal year ended March 31, 2025 to $21.7 million for the fiscal year ended March 31, 2026, which was primarily driven by a reduction in consulting fee related to trading support services and performance bonus paid to traders, which generally decreased in line with the overall reduction in our total income.
General and Administrative Expenses
Our general and administrative expenses increased to $14.0 million for the fiscal year ended March 31, 2026, as compared to $3.8 million for the fiscal year ended March 31, 2025, primarily due to the recognition of share-based compensation expenses following the grant of new share awards to eligible participants, combined with a substantial increase in wages and benefits associated with the expansion of our digital asset operations and management teams.
Share Purchase Warrants Expenses
Our share purchase warrants expenses for continuing operation were $1.7 million and nil for the fiscal year ended March 31, 2025 and 2026, respectively, mainly in relation to the fact that previously issued warrants had been fully amortized and expensed in prior periods.
Net Profit
As a result of the foregoing, we recorded a net profit of $1.3 million for the fiscal year ended March 31, 2026, as compared to a net profit of $15.9 million for the fiscal year ended March 31, 2025.
Fiscal Year ended March 31, 2025 Compared to Fiscal Year ended March 31, 2024
Income
Our income generated from continuing digital asset business increased significantly from $16.8 million for the fiscal year ended March 31, 2024 to $44.6 million for the fiscal year ended March 31, 2025, primarily because (i) we secured more digital asset deals from our customers for the fiscal year ended March 31, 2025, (ii) provides more securities advising and asset management services to customers in Hong Kong, and (iii) we recognized income from both the unrealized fair value change and interest income of the deals in other investments including digital assets, listed securities and its related derivative contracts. We entered these deals with the aim to diversify our investment portfolio and reduce the related risks.
Cost of Income
Our cost of income generated from continuing digital asset business increased significantly from $11.1 million for the fiscal year ended March 31, 2024 to $23.3 million for the fiscal year ended March 31, 2025, which was generally in line with the growth in income generated from our continuing business.
General and Administrative Expenses
Our general and administrative expenses from continuing operation remained relatively stable at $3.8 million for the fiscal year ended March 31, 2025, as compared to $4.3 million for the fiscal year ended March 31, 2024.
Share Purchase Warrants Expenses
Our share purchase warrants expenses for continuing operation were $6.0 million and $1.7 million for the fiscal year ended March 31, 2024 and 2025, respectively, mainly in relation to issuance of warrants to certain consultants pursuant to the May 2022 Consulting Agreement (defined below), to certain of our employees in May 2022 and to Northstar Technologies in November 2022. Consulting Agreement (defined below) and October 2021 Consulting Agreement (defined below) with these personnel. See “Item 10. Additional Information—C. Material Contracts.”
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Net Profit (Loss)
As a result of the foregoing, we recorded a net profit of $15.9 million for the fiscal year ended March 31, 2025, as compared to a net loss of $3.7 million for the fiscal year ended March 31, 2024.
| C. | Liquidity and Capital Resources |
Cash Flows
The following table sets forth a summary of our cash flows for the years presented:
| For the Fiscal Year Ended March 31, | ||||||||||||
| 2026 | 2025 | 2024 | ||||||||||
| US$ | ||||||||||||
| Net cash (used in) generated from operating activities | (14,861,934 | ) | 71,990 | (11,599,148 | ) | |||||||
| Net cash (used in) generated from investing activities | 208,422 | (23,309 | ) | 32,678 | ||||||||
| Net cash generated from financing activities | 11,791,758 | 2,108,179 | 9,733,969 | |||||||||
| Net (decrease) increase of cash and cash equivalents | (2,861,754 | ) | 2,156,860 | (1,832,501 | ) | |||||||
| Effect of foreign currency translation | (119,994 | ) | (117,404 | ) | (35,201 | ) | ||||||
| Cash and cash equivalents at beginning of the year | 6,919,869 | 4,880,413 | 6,748,115 | |||||||||
| Cash and cash equivalents at end of the year | 3,938,121 | 6,919,869 | 4,880,413 | |||||||||
Our cash and cash equivalents consist of cash, bank deposits and other currency of value. As of March 31, 2024, 2025 and 2026, our cash and cash equivalents were $4.9 million, $6.9 million and $3.9 million, respectively. Our change in prepayments and other receivables as of March 31, 2024, 2025 and 2026 were increased by $0.1 million, decreased by $4.5 million and decreased by $15.3 million, respectively. We expect that substantially all of our future income will be denominated in USD.
Operating Activities
Net cash used in operating activities for the fiscal year ended March 31, 2026 was $14,861,934. The net cash inflow was primarily attributable to our profit before income tax expense of $1.5 million, adjusted by (i) certain non-cash items, primarily comprising (a) unrealized fair value change of trading of digital assets, listed securities, funds and derivative contracts of $6.6 million, (b) cost of income of $17.1 million, and (c) share-based compensation expenses of $3.3 million; and (ii) changes in working capital, primarily comprising (a) an increase in financial assets at fair value through profit or loss of $90.5 million, (b) an increase in other receivables and prepayments of $15.3 million offset by (c) an increase in payable to customers of $77.2 million, (d) an increase in other payables of $7.2 million, and (e) an increase in financial liabilities at fair value through profit or loss of $1.7 million.
Net cash generated from operating activities for the fiscal year ended March 31, 2025 was $71,990. The net cash inflow was primarily attributable to our profit before income tax expense of $16.0 million, adjusted by (i) certain non-cash items, primarily comprising (a) unrealized fair value change of trading of digital assets, listed securities, funds and derivative contracts of $45.3 million, (b) cost of income of $23.3 million, (c) impairment loss on financial assets at fair value through profit or loss of $0.7 million, and (d) share purchase warrants expense of $1.7 million ;and (ii) changes in working capital, primarily comprising (a) increase in other receivables and prepayments $4.5 million, (b) decrease in financial assets at fair value through profit or loss $20.5 million, (c) decrease in other payables $4.5 million, and (d) decrease in payable to customer $7.3 million.
Net cash used in operating activities for the fiscal year ended March 31, 2024 was $11.6 million. The net cash outflow was primarily attributable to our loss before income tax expense of $3.7 million, adjusted by (i) certain non-cash items, primarily comprising (a) cost of income of $6.7 million, (b) share purchase warrants expenses of $6.0 million, and (c) unrealized fair value change of trading of digital assets, listed securities, funds and derivative contracts of $5.9 million; and (ii) changes in working capital, primarily comprising (a) increase in financial assets at fair value through profit and loss of $18.6 million, (b) an increase in accounts and other payables of $3.8 million, and (c) an increase in payable to customers of $0.5 million.
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Investing Activities
Net cash generated from investing activities for the fiscal year ended March 31, 2026 was $208,422, which was entirely attributable to interest received and the proceed received from disposal of investment.
Net cash used in investing activities for the fiscal year ended March 31, 2025 was $23,309, primarily due to proceed paid on purchase of property and equipment.
Net cash generated from investing activities for the fiscal year ended March 31, 2024 was $32,678, primarily due to interest received of $33,959, which was partially offset by addition of property and equipment of $1,281.
Financing Activities
Net cash generated from financing activities for the fiscal year ended March 31, 2026 was $11.8 million, primarily due to proceeds of approximately $12.0 million from the issuance of shares in private placements, which was partially offset by the payment of the principal portion of lease liabilities of $189,802 and the repurchase of shares of $18,340.
Net cash generated from financing activities for the fiscal year ended March 31, 2025 was $2.1 million, primarily due to proceed from shares issued on private placement of $2.3 million.
Net cash generated from financing activities for the fiscal year ended March 31, 2024 was $9.7 million, primarily due to (i) proceeds from shares issued on private placement of $4.8 million, partially offset by the repurchase of shares of $82,127, (ii) issuance of notes of $5.0 million and (iii) the payment of principal portion of lease liabilities of $0.1 million. Net cash used in financing activities for discontinued operation for the fiscal year ended March 31, 2024 was nil.
Material Cash Requirements
Capital Expenditures
Our capital expenditure was nil, $47,000 and nil for the fiscal years ended March 31, 2024, 2025 and 2026, respectively. We intend to fund our future capital expenditures, if any, with our existing cash balance and cash flow from operating activities. We will continue to make capital expenditures to meet the expected growth of our business.
Lease Liabilities
As of March 31, 2026, the Company had leased buildings used for its operations. The following table sets forth a breakdown of the carrying amounts of lease liabilities as of the dates indicated.
| As of March 31, 2026 | ||||
| US$ | ||||
| Lease Liabilities | ||||
| Current | 353,221 | |||
| Non-current | 183,342 | |||
| Total | 536,563 | |||
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For the fiscal years ended March 31, 2024, 2025 and 2026, we incurred lease payments of $0.1 million, $0.14 million and $0.19 million, respectively, which was mainly associated with our leased offices in Hong Kong and mainland China.
For the fiscal years ended March 31, 2024, 2025 and 2026, we incurred interest on lease liabilities of $4,241, $7,702 and $17,777, respectively.
There have been no material changes to our contractual obligations since March 31, 2026.
| D. | Research and Development, Patents and Licenses, etc. |
See “Item 4. Information on the Company—B. Business Overview—Intellectual Property.”
| E. | Trend Information |
The value of crypto assets are subject to price volatility due to various factors , including but not limited to market demand, regulatory developments, macroeconomic trends and monetary policies, technological advancements and security vulnerabilities and market manipulation risks. Significant events such as the bankruptcy of certain well-known crypto assets market participants, e.g. FTX, may also reduce market confidence. See “Risk Factors—Risks Relating to Our Business and Industry—We may face several risks due to disruptions in the crypto asset markets, including but not limited to the risk from depreciation in our stock price, loss of customer demand, financing risk, risk of increased losses or impairments in our investments or other assets, risks of legal proceedings and government investigations, and risks from price declines or price volatility of crypto assets” for more details. Digital asset markets have experienced extreme price volatility and several other entities in the digital asset industry have been, and may continue to be, negatively affected, further undermining confidence in the digital assets markets. These events have also negatively impacted the liquidity of the digital assets markets as certain entities affiliated with FTX engaged in significant trading activity. If the liquidity of the digital assets markets continues to be negatively impacted by these events, digital asset prices may continue to experience significant volatility and confidence in the digital asset markets may be further undermined. These events are continuing to develop and it is not possible to predict at this time all of the risks that they may pose to us or on the digital asset industry as a whole.
We had no direct exposure to FTX or any of the above-mentioned cryptocurrency companies. We do not have material assets that may not be recovered or may otherwise be lost or misappropriated due to the bankruptcies. However, the failure or insolvency of large exchanges like FTX may cause decreases in the prices of cryptocurrencies and investor confidence in the ecosystem, which could adversely affect the valuation of our solutions. High volatility and downturns in cryptocurrency prices may impact our customers’ confidence in the market, thereby adversely affecting our operations and financial condition. We will timely adjust our strategies to expand our business and optimize our operating efficiency in the current dynamic market conditions.
| F. | Critical Accounting Estimates |
Critical Accounting Policies, Estimates and Judgments
The consolidated financial statements of our Company have been prepared in accordance with IFRS. This basis of accounting involves the application of accrual accounting and consequently, revenue and gains are recognized when earned, and expenses and losses are recognized when incurred. Our consolidated financial statements are expressed in U.S. dollars.
The accompanying consolidated financial statements include the accounts of our Company and significant subsidiaries on a consolidated basis. We also include subsidiaries over which a direct or indirect legal or effective control exists and for which we are deemed to direct the significant activities and has the obligation to absorb the losses or benefits of the entities. All intercompany accounts, balances and transactions with consolidated entities have been eliminated.
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The preparation of financial statements in conformity with IFRS requires that management make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
Digital Assets
Digital assets are held mainly for the purposes of trading in the ordinary course of our digital asset business.
Digital assets are held mainly for the purposes of both trading for another token and entering a derivative contract in which such digital tokens are provided as margin in the ordinary course of our digital asset business.
Digital assets held in our digital asset wallets primarily comprise digital assets that are prefunded by and traded with, but not yet withdrawn by counterparties (or “customers”) under Digital Asset Trading Agreements (“DATA”).
Digital assets obtained from counterparties are recorded as digital assets of our Company (see below for the measurement) which can be used in our ordinary business, with a corresponding liability recorded due to the counterparties (under “digital assets payables” measured at fair value through profit or loss in current liabilities). Upon maturity of the financing arrangements, we transfer the digital assets at a rate stipulated in the DATA to the counterparty’s wallet and the related digital assets and liabilities due to the counterparty is derecognized.
Our digital asset portfolio mainly comprises cryptocurrencies and since we actively trade cryptocurrencies, purchasing them with a view to their resale in the near future, and generating a profit from fluctuations in the price. We apply the guidance in IAS 2 for commodity broker-traders and measures the digital assets at fair value less costs to sell. We consider there are no significant “costs to sell” digital assets and hence measurement of digital assets is based on their fair values with changes in fair values recognized in profit or loss in the period of the changes.
Fair Value
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, we take into account the characteristics of the asset or liability which market participants would take into account when pricing the asset or liability at the measurement date. Fair value for measurement and/or disclosure purposes in these financial statements is determined on such a basis.
In addition, for financial reporting purposes, fair value measurements are categorized into Level 1, 2 or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:
Level 1 – inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;
Level 2 – inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and
Level 3 – inputs are unobservable inputs for the asset or liability.
Our policy is to recognize transfers into and transfers out of any of the three levels as of the date of the event or change in circumstances that caused the transfer.
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The following table summarizes our assets and liabilities that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy:
| (i) | Disclosures of level in fair value hierarchy: |
| Fair value measurements using | ||||||||||||||||
| Description | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| US$ | US$ | US$ | US$ | |||||||||||||
| As of March 31, 2026 | ||||||||||||||||
| Digital assets | 379,920,883 | — | — | 379,920,883 | ||||||||||||
| Digital assets receivables | — | 20,973 | — | 20,973 | ||||||||||||
| Listed equity securities | 81,163,900 | — | — | 81,163,900 | ||||||||||||
| Listed futures contracts | (1,679,636 | ) | — | — | (1,679,636 | ) | ||||||||||
| Unlisted equity securities | — | — | 100,000 | 100,000 | ||||||||||||
| Digital assets payable | — | — | (135,267,935 | ) | (135,267,935 | ) | ||||||||||
| Digital assets payable – related party | — | — | (38,721,758 | ) | (38,721,758 | ) | ||||||||||
| Payable to client | (240,280,513 | ) | — | — | (240,280,513 | ) | ||||||||||
| Payable to client – related party | (1,411,323 | ) | — | — | (1,411,323 | ) | ||||||||||
| Total | 217,713,311 | 20,973 | (173,889,693 | ) | 43,844,591 | |||||||||||
| As of March 31, 2025 | ||||||||||||||||
| Digital assets | 221,162,809 | — | — | 221,162,809 | ||||||||||||
| Listed equity securities | 13,538,564 | — | — | 13,538,564 | ||||||||||||
| Listed futures contracts | 1,005 | — | — | 1,005 | ||||||||||||
| Unlisted equity securities | — | — | 240,001 | 240,001 | ||||||||||||
| Investments in funds | 79 | — | — | 79 | ||||||||||||
| Digital assets payable | — | — | (138,224,157 | ) | (138,224,157 | ) | ||||||||||
| Digital assets payable – related party | — | — | (10,702,814 | ) | (10,702,814 | ) | ||||||||||
| Payable to client | (53,141,585 | ) | — | — | (53,141,585 | ) | ||||||||||
| Payable to client – related party | (691,588 | ) | — | — | (691,588 | ) | ||||||||||
| Total | 180,869,205 | — | (148,686,891 | ) | 32,182,314 | |||||||||||
| (ii) | Disclosures of valuation process used by the Company and valuation techniques and inputs used in fair value measurements as of March 31, 2026 and 2025: |
Our directors are responsible for the fair value measurements of assets and liabilities required for financial reporting purposes, including level 3 fair value measurements.
For level 3 fair value measurements, we will normally engage external valuation experts with the recognized professional qualifications and recent experience to perform the valuations.
The Company’s digital assets payables are revalued as of March 31, 2026 and 2025 by independent professional qualified valuer, who has the recent experience in the categories of digital assets payables being valued.
The digital assets are measured at level 1 fair value. The determination of fair value hierarchy level for valuation of the digital assets would depend on whether the underlying digital assets is traded in an active market.
For the year ended March 31 2026, the fair value of the digital assets payable are determined based on the Summation, Monte Carlo Simulation and Black-Scholes Pricing Model. The significant unobservable inputs under Monte Carlo Simulation mainly include risk-free rate from 3% to 4% and volatility of cryptocurrency from 45% to 80%. The significant unobservable input under Black-Scholes Pricing Model mainly included risk free rate range of 2% to 3 % and expected volatility of 25%. The fair value increase with the increase in the risk-free rate or expected volatility or the value of the underlying portfolio asset values
For the year ended March 31 2025, the fair value of the digital assets payable are determined based on the Summation, Binomial Option Pricing Model and Black-Scholes Pricing Model. The significant unobservable inputs under Binomial Option Pricing Model mainly include risk free rate of nil and expected volatility of 51.57%. The significant unobservable input under Black-Scholes Pricing Model mainly included risk free rate range of nil and expected volatility of range of 52.92% to 88.84%. The fair value increase with the increase in the risk-free rate or expected volatility or the value of the underlying portfolio asset values
There were no transfers between levels 2 and 3 for recurring fair value measurements during the fiscal years ended March 31, 2026 and 2025.
During the fiscal years ended March 31, 2026, there the valuation techniques used Summation, Monte Carlo Simulation and Black-Scholes Pricing Model (2025: Summation, Binomial Option Pricing Model and Black-Scholes Pricing Model.)
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Our directors consider that the carrying amounts of our financial assets and financial liabilities approximate their respective fair values due to the relatively short-term maturity of these financial instruments.
The fair values of our lease liabilities are determined by using the discounted cash flows method using discount rate that reflects our borrowing rate as of the end of the reporting period. The own non-performance risk as of March 31, 2026 and 2025 was assessed to be insignificant.
Income
Digital Asset Business
We participate in digital asset business and earn profits, at a point in time, when executing buy and sell orders on various exchanges.
We present trading income from digital asset business that primarily represents trading margin arising from trading various digital assets and net gain or loss from remeasurement of digital assets and digital assets payable. We are exposed to net trading gains or losses from holding digital assets for trading up to the point when a trade (to buy or sell digital assets) with a customer is concluded with fixed terms of trade with respect to the type, unit and price of digital assets.
ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
| A. | Directors and Senior Management |
Set forth below is information concerning our directors, executive officers and other key employees.
| Name | Age | Position(s) | ||
| Bingzhong Wang | 43 | Chief Executive Officer, Chairman of the Board of Directors, and Director | ||
| Pengyuan Fan | 43 | Chief Financial Officer and Director | ||
| Xiaosi Zhang | 41 | Chief Operation Officer | ||
| Jingxin Tian | 46 | Independent Director | ||
| Sen Lin | 50 | Independent Director | ||
| Kiyohiro Kawayanagi | 57 | Independent Director |
The following is a brief biography of each of our executive officers and directors:
Mr. Bingzhong Wang has served as our CEO and Chairman of the Board of Directors since September 2024 and has served as our director since December 9, 2021. Mr. Wang has extensive experience in financial investment and corporation management. He currently serves as a director at multiple companies including LSQ Investment Management Limited, Metalpha Limited, and Natural Selection Capital Holdings Limited. From July 2017 to October 2020, Mr. Wang has served as the chief executive officer and an executive director at Loto Interactive Limited, a Hong Kong listed company mainly engaged in the provision of data analysis and storage services. From December 2021 to October 2022, Mr. Wang has served as an independent director at Peking University Resources (Holdings) Co., Ltd., a Hong Kong-based investment holding company principally engaged in sales of information products and real property-related businesses, since December 2021. Mr. Wang received his bachelor’s degree in Computer Science from Nanjing University in 2005 and his MBA degree from Hong Kong University of Science and Technology in 2013.
Mr. Pengyuan Fan has served as our CFO since November 28, 2024 and has served as our director since April 7, 2025. Mr. Pengyuan Fan brings over 15 years’ experience in the financial services and technology sectors. Most recently, he served as a founding member and COO at Quantum Vector Capital Management in Shanghai from September 2015 to April 2024, a high-frequency trading firm. Prior to that, Mr. Fan held key positions in credit derivatives and structured credit valuation at Royal Bank of Scotland from August 2012 to March 2014 and UBS from February 2009 to August 2012 in London. Earlier in his career, he worked as an Assistant Audit Manager at KPMG from October 2005 to December 2008 in Cambridge, UK, where he specialized in statutory audits and internal controls under IFRS and SOX compliance. Mr. Fan graduated with both Bachelor of Arts (BA) and Master of Arts (MA) in Engineering from the University of Cambridge, UK in 2005, and is a Fellow of Chartered Accountant (FCA) of ICAEW.
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Ms. Xiaosi Zhang has served as our COO since June 16, 2025. Ms. Zhang brings over 15 years of leadership experience in global financial institutions, with a distinguished focus on human resource strategy, organizational development, and operational management. From May 2014 to June 2025, Ms. Zhang served as Executive Director, Head of Risk Control, and Head of the Executive Office at China Development Bank International Investment Limited, which is a key subsidiary of CDB’s overseas investments and a Hong Kong listed investment company. From October 2010 to May 2014, Ms. Zhang was HR & Admin Manager at HuaTai Financial Holdings, a leading Chinese securities firm. Ms. Zhang obtained her bachelor’s degree in Journalism from Nanjing University in 2007 and her master’s degree in Communication from Hong Kong Baptist University in 2008.
Ms. Jingxin Tian has served as our director since June 3, 2019. Ms. Tian has served as the deputy director of Beijing Qiancheng Law Firm since April 7, 2026. Prior to this, she was a partner of Jingsh Law Firm, a law firm headquartered in Beijing with more than 40 branch offices in China, and served as the director of construction biddings department of the firm. Ms. Tian has over 20 years of experience as a litigation and transaction lawyer, especially in areas including legal risk management and dispute resolution. Ms. Tian also serves as member of mergers, acquisitions, reorganizations, and financially-distressed assets committee of Beijing Lawyers Association, member of Chinese Society of International Law, and arbitrator of Hainan International Arbitration Court of China. Ms. Tian received a bachelor’s degree in law from Capital University of Economics and Business in China, and a master degree in civil and business law from University of Chinese Academy of Sciences.
Mr. Sen Lin has served as our director since December 9, 2021. Mr. Lin has over 25 years of experience in accounting and auditing. Since May 2026, Mr. Lin has served as the chief financial officer of ChainUp Pte. Ltd., a Singapore-based company focusing on blockchain technology. Since May 2025, Mr. Lin has served as a director of Shenzhen Zhaowei Machinery & Electronics Co., Ltd.. Since May 2023, Mr. Lin has served as a director of Bright Future Technology Holdings Limited. Since January 2023, Mr. Lin has served as a director of J and Friends Holdings Limited. Since December 2023, Mr. Lin has served as a financial controller of Sinohope Technology Holding Limited, a company focusing on the R&D and service of Blockchain and Asset management. From March 2021 to August 2022, Mr. Lin served as the chief financial officer at Shenzhen Thunderstone Technology Co., Ltd., a company focusing on the research and development, production, and sales of electronic cigarettes. He has been an independent non-executive director since July 2017 at Loto Interactive Limited, a Hong Kong listed company mainly engaged in the provision of data analysis and storage services. From October 2020 to February 2021, Mr. Lin served as a partner at ONEWO Space-Tech Service Co., Ltd., a real property service provider. From June 2017 to April 2019, Mr. Lin served as the chief financial officer of 7Road Holdings Limited, a China-based investment holding company focusing on the development and operation of online games. From November 2006 to January 2017, he also served as the chief financial officer of Palm Commerce Information Technology (China) Co., Ltd., a company focusing on the development and operation of lottery software. From February 2001 to November 2006, Mr. Lin served as a manager of PricewaterhouseCoopers, and he became a certified public accountant in China in 2010. Mr. Lin received his bachelor’s degree in international business administration from Central University of Finance and Economics in 1998 and an EMBA degree from China Europe International Business School in 2011.
Mr. Kiyohiro Kawayanagi has served as our director since May 6, 2022. Mr. Kawayanagi has served as the Chief Executive Officer and Chairman of the board of directors of Pomelo Acquisition Corporation Limited, a blank check company incorporated as a Cayman Islands exempted company, since May 2021. Mr. Kawayanagi has been a founding partner of Bit World Japan Investment Limited, a Japanese investment firm, focusing on telecommunications, media, and technology areas, since its inception in March 2018. Prior to that, from March 2016 to March 2018, Mr. Kawayanagi served as a Managing Director for Zhongzhi Industry Investment Co., Ltd., a Beijing-based Chinese Private Equity Fund, and a Partner at Shanghai Honghao Investment Consulting Co., Ltd., an integrated consulting company, from December 2014 to February 2016. He also served as a Managing Director at Shanghai Fuson Hi-Tech (Group) Co., Ltd., a Shanghai-based Chinese investment firm, from April 2013 to November 2014. Mr. Kawayanagi served as the Assistant Director for DAIWA Securities Co., Ltd., the second largest investment bank in Japan, from June 2004 to April 2013, and served as an Associate Manager for NIKKO Securities Co., Ltd., the third largest investment bank in Japan, from April 1994 to December 1999. Mr. Kawayanagi received an MBA from the University of Arizona in 2004, and his bachelor’s degree in law from Waseda University in Japan in March 1994. Mr. Kawayanagi became a member of the Securities Analysts Association of Japan in October 1998.
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Family Relationships
There is no family relationship among any of our directors or executive officers.
| B. | Compensation of Directors and Executive Officers |
For the fiscal year ended March 31, 2026, we paid an aggregate amount of approximately HKD42.9 million (approximately $5.5 million) in cash as compensation to our directors and executive officers.
We have adopted an Incentive Compensation Recoupment Policy that complies with Section 10D of the Exchange Act, Rule 10D-1 promulgated thereunder, and the applicable Nasdaq Listing Rules. In the event that an accounting restatement is required due to our material noncompliance with any financial reporting requirement under the securities laws, following review and determination by the Compensation Committee (or our Board of Directors) pursuant to such policy, we will reasonably promptly seek recovery of any incentive-based compensation determined to have been erroneously awarded to our covered executive officers during the applicable lookback period, and take such other actions as may be required under the policy.
On June 30, 2022, the Company implemented its 2022 Performance Incentive Plan (the “2022 Plan”) to foster the success of the Company and to increase shareholder value by providing an additional means, through the grant of awards to attract, motivate, retain and reward selected employees and other eligible persons, and to enhance the alignment of the interests of such selected participants with the interests of the Company’s shareholders. The 2022 Plan and a form of Share Unit Award Agreement have been approved by the board of directors of the Company for use in connection with the grant of share units of the Company to be issued under the 2022 Plan. Under the 2022 Plan, an aggregate of 3,300,000 Ordinary Shares are reserved for issuance for purposes of the 2022 Plan, subject to adjustments as contemplated by the 2022 Plan. All of the 3,300,000 Ordinary Shares have been issued under the 2022 Plan as of the date of this annual report. The Company has elected to follow home country practice instead of Nasdaq Listing Rule 5635(c).
On September 24, 2024, our board of directors approved the 2024 Share Incentive Plan (the “2024 Plan”), which became effective on October 12, 2024. The maximum aggregate number of shares of our Company which may be issued pursuant to all awards under the 2024 Plan (the “Share Limit”) shall initially be 2,000,000 Ordinary Shares. On the first day of each of the subsequent fiscal years during the term of the 2024 Plan (each, an “Evergreen Date”), the Share Limit shall automatically increase by an amount determined by the board of directors that is equal to no more than three percent (3%) of the total number of Ordinary Shares outstanding on the last day of the immediately preceding fiscal year; provided, however, if the board of directors does not determine such amount of increase by an Evergreen Date, the Share Limit shall automatically increase by three percent (3%) of the total number of Ordinary Shares outstanding on the last day of the immediately preceding fiscal year. As of June 30, 2026, an aggregate of 3,142,000 restricted share units have been granted under the 2024 Plan, of which 360,500 have been vested, and 2,781,500 remain outstanding.
The following table summarizes the outstanding equity awards held by our directors and executive officers as of June 30, 2026.
| Name | Title | Type of Awards | Number of Ordinary Shares Underlying Awards Granted | Exercise / Purchase Price (US$) | Grant Date | Expiration Date | ||||||||||||
| Bingzhong Wang | Chief Executive Officer, | Restricted Share Units | 375,000 | Nil | April 1, 2025 | December 1, 2038 | ||||||||||||
| Chairman and Director | Restricted Share Units | 1,039,000 | Nil | June 30, 2025 | July 1, 2039 | |||||||||||||
| Pengyuan Fan | Chief Financial Officer and | Restricted Share Units | 7,500 | Nil | April 1, 2025 | December 1, 2038 | ||||||||||||
| Director | Restricted Share Units | 15,000 | Nil | June 30, 2025 | July 1, 2039 | |||||||||||||
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| C. | Board Practices |
Pursuant to our third amended and restated articles of association, the minimum number of directors shall consist of not less than one person unless otherwise determined by the shareholders in a general meeting. Unless removed or re-appointed, each director shall be appointed for a term expiring at the next-following annual general meeting, if any is held. At any annual general meeting held, our directors will be elected by a majority vote of shareholders eligible to vote at that meeting. At each annual general meeting, each director so elected shall hold office for a one-year term and until the election of their respective successors in office or removed.
Board of Directors
Our board of directors currently consists of five directors, including three independent directors. A director is not required to hold any shares in our Company to qualify to serve as a director. Subject to any separate requirement for Audit Committee’s (as defined in our articles of association) approval under applicable law or the listing rules of Nasdaq Capital Market, a director may vote with respect to any contract, transaction or arrangement in which he or she is materially interested provided the nature of the interest is disclosed prior to its consideration and as long as he has not been disqualified by the chairman of the relevant board meeting. All of the directors will serve until and will stand for re-election on the date of the next annual general meeting, unless resigned or otherwise removed prior to such date.
Committees of the Board of Directors
We have established three committees under the board of directors: an audit committee, a compensation committee and a nominating and corporate governance committee. We have adopted a charter for each of the three committees. Each committee’s members and functions are described below.
Audit Committee
Our audit committee consists of Mr. Sen Lin, Mr. Kiyohiro Kawayanagi and Ms. Jingxin Tian. Mr. Sen Lin is the chairperson of our audit committee. We have determined that Mr. Sen Lin, Mr. Kiyohiro Kawayanagi and Ms. Jingxin Tian satisfy the “independence” requirements of Section 5605(c)(2) of the Nasdaq Listing Rules and Rule 10A-3 under the Securities Exchange Act. Our board also has determined that Mr. Sen Lin qualifies as an audit committee financial expert within the meaning of the SEC rules or possesses financial sophistication within the meaning of the Nasdaq Listing Rules. The audit committee oversees our accounting and financial reporting processes and the audits of the financial statements of our Company. The audit committee is responsible for, among other things:
| ● | appointing the independent auditors and pre-approving all auditing and non-auditing services permitted to be performed by the independent auditors; |
| ● | reviewing with the independent auditors any audit problems or difficulties and management’s response; |
| ● | discussing the annual audited financial statements with management and the independent auditors; |
| ● | reviewing the adequacy and effectiveness of our accounting and internal control policies and procedures and any steps taken to monitor and control major financial risk exposures; |
| ● | reviewing and approving all proposed related party transactions; |
| ● | meeting separately and periodically with management and the independent auditors; and |
| ● | monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance. |
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Compensation Committee
Our compensation committee consists of Mr. Sen Lin, Mr. Kiyohiro Kawayanagi and Ms. Jingxin Tian. Mr. Sen Lin is the chairperson of our compensation committee. We have determined that Mr. Sen Lin, Mr. Kiyohiro Kawayanagi and Ms. Jingxin Tian satisfy the “independence” requirements of Section 5605(c)(2) of the Nasdaq Listing Rules and Rule 10A-3 under the Securities Exchange Act. The compensation committee assists the board in reviewing and approving the compensation structure, including all forms of compensation, relating to our directors and executive officers. Our chief executive officer may not be present at any committee meeting during which his compensation is deliberated. The compensation committee is responsible for, among other things:
| ● | reviewing and approving to the board with respect to the total compensation package for our most senior executive officers; |
| ● | approving and overseeing the total compensation package for our executives other than the most senior executive officers; |
| ● | reviewing and recommending to the board with respect to the compensation of our directors; |
| ● | reviewing periodically and approving any long-term incentive compensation or equity plans; |
| ● | selecting compensation consultants, legal counsel or other advisors after taking into consideration all factors relevant to that person’s independence from management; and |
| ● | programs or similar arrangements, annual bonuses, employee pension, and welfare benefit plans. |
Nominating and Corporate Governance Committee
Our nominating and corporate governance committee consists of Mr. Sen Lin, Mr. Kiyohiro Kawayanagi and Ms. Jingxin Tian. Mr. Kiyohiro Kawayanagi is the chairperson of our nominating and corporate governance committee. We have determined that Mr. Sen Lin, Mr. Kiyohiro Kawayanagi and Ms. Jingxin Tian satisfy the “independence” requirements of Section 5605(c)(2) of the Nasdaq Listing Rules and Rule 10A-3 under the Securities Exchange Act. The nominating and corporate governance committee assists the board of directors in selecting individuals qualified to become our directors and in determining the composition of the board and its committees. The nominating and corporate governance committee is responsible for, among other things:
| ● | identifying and recommending nominees for election or re-election to our board of directors or for appointment to fill any vacancy; |
| ● | reviewing annually with our board of directors its current composition in light of the characteristics of independence, age, skills, experience and availability of service to us; |
| ● | identifying and recommending to our board the directors to serve as members of committees; |
| ● | advising the board periodically with respect to significant developments in the law and practice of corporate governance as well as our compliance with applicable laws and regulations, and making recommendations to our board of directors on all matters of corporate governance and on any corrective action to be taken; and |
| ● | monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance. |
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Director Independence
Our board of directors reviewed the materiality of any relationship that each of our proposed directors has with us, either directly or indirectly. Based on this review, it is determined that Sen Lin, Kiyohiro Kawayanagi and Jingxin Tian satisfy the “independence” requirements of Section 5605(c)(2) of the Nasdaq Listing Rules.
Terms of Directors and Officers
Our officers are elected by and serve at the discretion of the board of directors and the shareholders voting by ordinary resolution.
Employment Agreements
We have entered into employment agreements with each of our executive officers, where each is employed for a specified time period, which will be automatically extended for successive one-year terms unless either party gives the other party a three-month prior written notice to terminate the employment prior to the expiration of such one-year term or unless terminated earlier pursuant to the terms of such employment agreements. We may terminate the employment for cause, at any time, without notice or remuneration, for certain acts of the executive officer, including but not limited to the commitments of any serious or persistent breach or non-observance of the terms and conditions of the employment, conviction of a criminal offense, willful disobedience of a lawful and reasonable order, fraud or dishonesty, receipt of bribery, or severe neglect of his or her duties. An executive officer may terminate his or her employment at any time with a three-month prior written notice to the Company or by payment of three months’ salary in lieu of notice. Each executive officer has agreed to hold, both during and after the employment agreement expires, in strict confidence and not to use or disclose to any person, corporation or other entity without written consent, any confidential information.
| D. | Employees |
See “Item 4. Information on the Company—B. Business Overview—Employees.”
| E. | Share Ownership |
The following table sets forth information with respect to the beneficial ownership of our ordinary shares as of June 30, 2026 by:
| ● | each of our directors and executive officers, which excludes our former directors and officers as of the date of this annual report; and |
| ● | each person known to us to beneficially own more than 5% of our ordinary shares. |
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The calculations in the table below are based on 47,113,236 ordinary shares issued and outstanding as of June 30, 2026.
Beneficial ownership is determined in accordance with the rules and regulations of the SEC. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, we have included shares that the person has the right to acquire within 60 days, including through the exercise of any option, warrant or other right or the conversion of any other security. These shares, however, are not included in the computation of the percentage ownership of any other person.
| Name of Beneficial Owners | Number of Ordinary Shares | Percentage of Total Ordinary Shares | Percentage of Aggregate Voting Power (6) | |||||||||
| Directors and Executive Officers†: | ||||||||||||
| Bingzhong Wang (1) | 6,965,092 | 14.3 | % | 14.3 | % | |||||||
| Pengyuan Fan(2) | 6,250 | * | * | |||||||||
| Jingxin Tian | — | — | — | |||||||||
| Xiaosi Zhang | — | — | — | |||||||||
| Sen Lin | — | — | — | |||||||||
| Kiyohiro Kawayanagi | — | — | — | |||||||||
| All directors and executive officers as a group (six individuals) | 6,971,342 | 14.3 | % | 14.3 | % | |||||||
| 5% Shareholders: | ||||||||||||
| Northstar Technologies (3) | 12,500,000 | 23.8 | % | 23.8 | % | |||||||
| Xisha Hu (4) | 6,965,092 | 12.9 | % | 12.9 | % | |||||||
| Folius Digital Opportunities Master Fund Ltd. (5) | 3,819,008 | 8.1 | % | 8.1 | % | |||||||
| * | Less than 1% of our total outstanding ordinary shares. |
| (1) | Consists of (i) 2,330,430 Ordinary Shares held directly by Mr. Wang, (ii) 3,049,912 Ordinary Shares held by MetaSphere Limited, an entity wholly owned by Ms. Xisha Hu, spouse of Mr. Wang, (iii) 1,200,000 Ordinary Shares issuable upon exercise of the warrants issued to Mr. Bingzhong Wang pursuant to a securities subscription and warrant purchase agreement among Mr. Bingzhong Wang, our Company and certain other parties dated June 30, 2022, and (iv) 384,750 Ordinary Shares issuable upon the vesting of restricted share units held by Mr. Wang and his spouse within 60 days from June 30, 2026. Mr. Wang disclaims beneficial ownership of the securities held by his spouse and her wholly owned entity, except to the extent of his pecuniary interest therein. |
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| (2) | Consists of (i) 2,500 Ordinary Shares and (ii) 3,750 Ordinary Shares issuable upon the vesting of restricted share units within 60 days from June 30, 2026. |
| (3) | Consists of (i) 7,000,000 Ordinary Shares held by Northstar Technologies and its affiliates and (ii) 5,500,000 Ordinary Shares issuable upon exercise of a type A warrant to purchase up to an aggregate of 4,500,000 Ordinary Shares and type B warrant to purchase up to an aggregate of 1,000,000 Ordinary Shares to Northstar Technologies’ affiliate pursuant to the Northstar Technologies Purchase Agreement, within 60 days from June 30, 2026. Information set forth above is based upon Northstar Technologies’ Schedule 13D filing with the SEC on January 10, 2023, the record on our shareholder register as of June 30, 2026 and the information provided by Northstar Technologies to the Company. The principal business office of Northstar Technologies is at 8 Kallang Avenue, Aperia Tower 1, #04-02, Singapore, 339509. |
| (4) | Consists of (i) 3,049,912 Ordinary Shares held of record by MetaSphere Limited, an entity wholly owned and controlled by Ms. Xisha Hu, (ii) 125,000 Ordinary Shares issuable upon the vesting of restricted share units held directly by Ms. Hu within 60 days from June 30, 2026, and (iii) 2,330,430 Ordinary Shares, 1,200,000 Ordinary Shares issuable upon exercise of warrants, and 259,750 Ordinary Shares issuable upon the vesting of restricted share units within 60 days from June 30, 2026, all held directly by Mr. Bingzhong Wang, the spouse of Ms. Hu. Ms. Hu disclaims beneficial ownership of the securities held by her spouse, except to the extent of her pecuniary interest therein. Information set forth above is based upon the Schedule 13D/A Amendment No. 3 filed with the SEC on May 14, 2026, and subsequent equity awards as provided by Ms. Hu to the Issuer. |
| (5) | Consists of (i) 3,819,008 Ordinary Shares held directly by Folius Digital Opportunities Master Fund Ltd. The principal business office of Folius Digital Opportunities Master Fund Ltd. is at 4th Floor, Harbour Place, 103 South Church Street, P.O. Box 10240, Georgetown, Cayman Islands. Information set forth above is based upon the Schedule 13G/A filed with the SEC on December 4, 2023 by Folius Digital Opportunities Master Fund Ltd., as well as the proxy voting records submitted to the Company by this shareholder in connection with the Company’s annual general meeting held on March 31, 2026. The Company notes that these shares may no longer be held of record in the name of this shareholder on our register of members due to transfers to broker or nominee accounts, but the Company has not received or identified any subsequent Schedule 13G/A filing indicating that this shareholder’s beneficial ownership has fallen below 5%. |
| (6) | For each person included in this column, percentage of voting power is calculated by dividing the voting power beneficially owned by such person by the voting power of all of our Ordinary Shares as a single class. |
| † | Unless otherwise indicated, the address of our directors and executive officers is Suite 5506-07, Central Plaza, 18 Harbour Road, Wan Chai, Hong Kong, China. |
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As of the date of June 30, 2026, none of our existing shareholders have different voting rights from other shareholders. We are currently not aware of any arrangement that may, at a subsequent date, result in a change of control of our company.
| F. | Disclosure of a Registrant’s Action to Recover Erroneously Awarded Compensation |
None.
See “Item 6. Directors, Senior Management and Employees—B. Compensation of Directors and Executive Officers” for a description of our Incentive Compensation Recoupment Policy.
ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
| A. | Major Shareholders |
Please refer to “Item 6. Directors, Senior Management and Employees—E. Share Ownership.”
| B. | Related Party Transactions |
Transactions with Northstar Technologies
Our substantial shareholder, Northstar Technologies, is one of our key customers who subscribe to our issued cryptocurrency derivative products. In addition, Northstar Technologies provides significant support to our operations through its subsidiaries within its group. These subsidiaries deliver technical management services and customer introduction services, contributing significantly to our business growth and operational efficiency.
As of March 31, 2024, 2025 and 2026, we had digital assets payables of $2.9 million, nil and $32.1 million, respectively, to Northstar Technologies. As of March 31, 2024, 2025 and 2026, we had payables to customers of $3,548, $10,483 and $8,606, respectively, to Northstar Technologies. As of March 31, 2024, 2025 and 2026, we had other payables of $1.0 million, nil and nil, respectively, to Northstar Technologies.
Other Transactions with Related Parties
In addition to Northstar Technologies, certain of our shareholder, directors and officers or their affiliates, are our customers who subscribe to our issued cryptocurrency derivative products.
For the fiscal year ended March 31, 2026, the aggregate value of derivative products entered with such related customers is around $15.7 million while the derivative products expired to such related customers is around $19.5 million. As of March 31, 2026, we had digital assets payables of $6.6 million and payables to customer of $1.4 million respectively to such related customers.
For the fiscal year ended March 31, 2025, the aggregate value of derivative products entered with such related customers is around $28.7 million while the derivative products expired to such related customers is around $25.0 million. As of March 31, 2025, we had digital assets payables of $10.7 million and payables to customer of $0.7 million, respectively, to such related customers.
For the fiscal year ended March 31, 2024, the aggregate value of derivative products entered with such related customers is around $59.2 million while the derivative products expired to such related customers is around $64.8 million. As of March 31, 2024, we had digital assets payables of $6.0 million and payables to customer of $41.6 million to such related customers.
Employment Agreements
See “Item 6. Directors, Senior Management and Employees—C. Board Practices—Employment Agreements.”
| C. | Interests of Experts and Counsel |
Not applicable.
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ITEM 8. FINANCIAL INFORMATION
| A. | Consolidated Statements and Other Financial Information |
See “Item 18. Financial Statements,” which contains our financial statements prepared in accordance with IFRS.
Legal Proceedings
We are not currently a party to any litigation the outcome of which, if determined adversely to us, would individually or in the aggregate be reasonably expected to have a material adverse effect on our business, operating results, cash flows or financial condition.
Dividend Policy
We intend to keep any future earnings to finance the expansion of our business, and we do not anticipate that any cash dividends will be paid in the foreseeable future.
Under Cayman Islands law, a Cayman Islands company may pay a dividend on its shares out of either profit or share premium amount, provided that in no circumstances may a dividend be paid if this would result in the Company being unable to pay its debts due in the ordinary course of business immediately following the date on which the distribution or dividend is proposed to be paid.
If we determine to pay dividends on any of our Ordinary Shares in the future, as a holding company, we will be dependent on receipt of funds from our BVI subsidiary, Sweet Lollipop. Cash dividends, if any, on our Ordinary Shares will be paid in U.S. dollars.
| B. | Significant Changes |
Except as disclosed elsewhere in this annual report on Form 20-F, we have not experienced any significant changes since the date of our audited consolidated financial statements included in this annual report.
ITEM 9. THE OFFER AND LISTING
| A. | Offering and Listing Details |
Our Ordinary Shares are listed on the Nasdaq Capital Market under the symbol “MATH.” Our Ordinary Shares began trading on October 20, 2017.
| B. | Plan of Distribution |
Not applicable.
| C. | Markets |
Our Ordinary Shares, have been listed on the Nasdaq Capital Market since October 20, 2017 and currently trade under the symbol “MATH.”
| D. | Selling Shareholders |
Not applicable.
| E. | Dilution |
Not applicable.
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| F. | Expenses of the Issue |
Not applicable.
ITEM 10. ADDITIONAL INFORMATION
| A. | Share Capital |
Not applicable.
| B. | Memorandum and Articles of Association |
We are an exempted company with limited liability, incorporated under the laws of the Cayman Islands, and our affairs are governed by our third amended and restated memorandum and articles of association, as amended and restated from time to time, and the Companies Act (Revised) of the Cayman Islands, which we refer to as the Companies Act below, and the common law of the Cayman Islands.
We have filed our third amended and restated memorandum and articles of association as Exhibit 3.1 to our current report on Form 6-K filed with the SEC on March 31, 2025.
| C. | Material Contracts |
August 2021 Securities Purchase Agreement
On August 9, 2021, the Company entered into a Securities Purchase Agreement (the “August 2021 SPA”) with LSQ Investment Fund SPC-Disruptive Opportunity Fund II SP, a Cayman Islands Segregated Portfolio Company (“LSQ”), and certain other purchasers (the “Purchasers”) listed in Schedule A to the August 2021 SPA. In November 2021, the Company issued 4,100,000 Ordinary Shares to LSQ for an aggregate purchase price of $4,100,000 pursuant to the August 2021 SPA and in reliance on Rule 902 of Regulation S promulgated under the Securities Act.
On March 3, 2022, the Company, LSQ and the Purchasers entered into Amendment No.1 to Securities Purchase Agreement to extend the closing deadline applicable to the Purchasers. Pursuant to the Amendment to the August 2021 SPA, the closing applicable to the Purchasers will occur no later than 12 months following the effective date of the Registration Statements (as defined in the August 2021 SPA) covering the resale of all of the Purchaser’s Subscribed Shares (as defined in the August 2021 SPA).
August 2021 Consulting Agreement
On August 6, 2021, the Company entered into a Consulting and Warrant Issuance Agreement (the “August 2021 Consulting Agreement”) with Natural Selection Capital Holdings Limited, a Cayman company of which Mr. Bingzhong Wang is the sole shareholder, and Mr. Ming Ni. Pursuant to the August 2021 Consulting Agreement, Natural Selection Capital Holdings Limited and Mr. Ni agreed to provide certain services to the Company in connection with the development and ultimate transformation of the business of the Company into a blockchain-related business, and the Company agreed to, among other things, issue warrants to Natural Selection Capital Holdings Limited in four equal tranches to purchase an aggregate of 14,000,000 Ordinary Shares (the “Consulting Company Warrants”). The Consulting Company Warrants will become exercisable on the later of (i) the one-year anniversary of the issuance and (ii) the applicable vesting dates, with exercise prices between $1 and $2.5 per share, and will expire on the 10th anniversary from the date on which they become exercisable (each, a “Consulting Company Warrant Expiry Date”). The Company issued the warrants to Natural Selection Capital Holdings Limited on October 29, 2021.
The Company agreed to, among other things, issue warrants to Mr. Ni to purchase an aggregate of 2,000,000 Ordinary Shares (the “Ni Warrants”, together with the Consulting Company Warrants, the “August Consulting Warrants”). The Ni Warrants would become exercisable once issued, with an exercise price that is the lower of (i) $1.5 per share and (ii) 88% of the lowest daily volume-weighted average price of the ordinary shares for the 10-trading-day period immediately prior to the exercise of the August Consulting Warrants, and would expire five years after issuance. On November 30, 2021, the Issuer issued the Ni Warrants to Mr. Ni.
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On August 6, 2021, the Company entered into a Registration Rights Agreement (the “2021 Registration Rights Agreement”) with LSQ, the Purchasers, Natural Selection Capital Holdings Limited, and Mr. Ni Ming.
On March 3, 2022, the Company, LSQ, the Purchasers, Natural Selection Capital Holdings Limited, and Mr. Ni, entered into Amendment No.1 to 2021 Registration Rights Agreement (the “Amendment to 2021 RRA”) to extend the Effectiveness Deadline and the Filing Deadline (as defined in the 2021 Registration Rights Agreement). Pursuant to the Amendment to 2021 RRA, the Effectiveness Deadline for the 2nd Closing Registration Statement (as defined in the 2021 Registration Rights Agreement) will be no later than the calendar day that is no later than 16 months from the date of the 2021 Registration Rights Agreement.
On January 26, 2023, the Company, Natural Selection Capital Holdings Limited and Mr. Ni entered into an amendment agreement to the August 2021 Consulting Agreement, to, among others, change each and all the Consulting Company Warrant Expiry Date to August 6, 2031.
On September 26, 2024, the Company entered into a deed of termination with Natural Selection Capital Holdings Limited, pursuant to which the Company and Natural Selection Capital Holdings Limited agreed to terminate the Consulting Company Warrants. As a result of such termination, the respective rights and obligations under the Consulting Company Warrants are terminated as well.
October 2021 Consulting Agreement
On October 27, 2021, the Company entered into a Consulting and Warrant Issuance Agreement (the “October 2021 Consulting Agreement”) with Xianqun Hu, Ying Cai, Jiarui Li, and Ailing Zhang (collectively, the “Consultants” and each a “Consultant”). Pursuant to the October 2021 Consulting Agreement, the Consultants agreed to provide certain services to the Company in connection with the business operation of a joint venture company which will be formed by the Company and an industry leader (the “Joint Venture”, Metalpha BVI). The services to be provided by the Consultants, include, among other things, the following: (i) establishing a proprietary system for cryptocurrency derivatives trading; (ii) designing different structure products for use in trading with counterparties; (iii) optimizing internal pricing and dynamic hedging models; (iv) ongoing monitoring and improving of the proprietary system to maximize the return of invested capital and grow the size of proprietary assets; (v) assisting in the hiring process and establishment of a team for the development of the Joint Venture; and (vi) providing industry expertise to help shape the Joint Venture’s long-term strategy.
Pursuant to the October 2021 Consulting Agreement, the Company agreed to issue (i) warrants to Xianqun Hu to purchase an aggregate of 900,000 Ordinary Shares (the “2021 Hu Warrants”), (ii) warrants to Ying Cai to purchase an aggregate of 300,000 Ordinary Shares (the “Cai Warrants”), (iii) warrants to Jiarui Li to purchase an aggregate of 300,000 Ordinary Shares (the “Li Warrants”), and (iv) warrants to Ailing Zhang to purchase an aggregate of 300,000 Ordinary Shares (the “Zhang Warrants,” together with the 2021 Hu Warrants, the Cai Warrants, and the Li Warrants, the “October 2021 Consulting Warrants”).
The October 2021 Consulting Warrants will become exercisable once issued, with an exercise price that is the lower of (i) $1.5 per share and (ii) 88% of the lowest daily volume-weighted average price of the Ordinary Shares for the 10-trading-day period immediately prior to the exercise of the October Consulting Warrants, and will expire five years after issuance.
In connection with the August 2021 SPA, the August 2021 Consulting Agreement, and the October 2021 Consulting Agreement, the Company filed a registration statement on Form F-3 dated December 27, 2021, to register the Ordinary Shares to be issued pursuant to the August 2021 SPA and the Ordinary Shares issuable upon exercise of the August Consulting Warrants and October Consulting Warrants for resale. The registration statement on Form F-3 did not become effective, which was declared abandoned by the Division of Corporation Finance for the SEC on December 30, 2022.
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Employee Warrant Issuance Agreements
On May 10, 2022, the Company entered into an employee warrant issuance agreement with Yingjun Zhou, to further incentivize the Employee’s services to be rendered under and pursuant to an employment contract, dated March 2, 2022, between LSQ Capital Limited, a subsidiary of the Company, and Yingjun Zhou (the “Employee Warrant Issuance Agreement”).
Pursuant to the Employee Warrant Issuance Agreement, the Company agreed to issue warrants to Yingjun Zhou to purchase an aggregate of 200,000 Ordinary Shares of the Company (the “Employee Warrants”).
The Employee Warrants will become exercisable once issued, with an exercise price that is the lower of (i) $1.5 per share and (ii) 88% of the lowest daily volume-weighted average price of the Ordinary Shares for the 10-trading-day period immediately prior to the exercise of the Employee Warrants, and will expire five years after issuance.
In addition, the Company also agreed that, as soon as practicable, and in no event later than 60 days after the execution of the Employee Warrants pursuant to the Employee Warrant Issuance Agreement, the Company shall file with the SEC (at the Company’s sole cost and expense) a registration statement, which shall be on Form F-3, if eligible, registering the resale of the Ordinary Shares issuable upon exercise of the Employee Warrants.
May 2022 Consulting Agreement
On May 26, 2022, the Company entered into a consulting and warrant issuance agreement (the “May 2022 Consulting Agreement”) with Jing Hu, Sek Yee Khor, and Jiaping Sun (collectively, the “2022 Consultants”, and each, a “2022 Consultant”). Pursuant to the May 2022 Consulting Agreement, the 2022 Consultants agreed to provide certain services to the Company in connection with the business operation of a joint venture company formed by the Company and Northstar Technologies. The services to be provided by the 2022 Consultants, include, among other things, the following: (1) establishing a proprietary system for cryptocurrency derivatives trading; (2) designing different structure products for use in trading with counterparties; (3) optimizing internal pricing and dynamic hedging models; (4) ongoing monitoring and improving of the proprietary system to maximize the return of invested capital and grow the size of proprietary assets; (5) assisting in the hiring process and establishment of a team for the development of the Metalpha BVI; and (6) providing industry expertise to help shape the Metalpha BVI’s long-term strategy.
Pursuant to the May 2022 Consulting Agreement, the Company agreed to issue (i) warrants to Jing Hu to purchase an aggregate of 200,000 Ordinary Shares (the “2022 Hu Warrants”), (ii) warrants to Sek Yee Khor to purchase an aggregate of 200,000 Ordinary Shares (the “Khor Warrants”), and (iii) warrants to Jiaping Sun to purchase an aggregate of 100,000 Ordinary Shares (the “Sun Warrants”; the Sun Warrants, together with the 2022 Hu Warrants and the Khor Warrants, the “2022 Consulting Warrants”).
The 2022 Consulting Warrants will become exercisable once issued, with an exercise price that is the lower of (i) $1.5 per share and (ii) 88% of the lowest daily volume-weighted average price of the Ordinary Shares for the 10-trading-day period immediately prior to the exercise of the 2022 Consulting Warrants, and will expire five years after issuance.
In addition, the Company also agreed that, as soon as practicable, and in no event later than 60 days after the execution of the 2022 Consulting Warrants pursuant to the Consulting Agreement, the Company shall file with the “SEC (at the Company’s sole cost and expense) a registration statement, which shall be on Form F-3, if eligible, registering the resale of the Ordinary Shares issuable upon exercise of the 2022 Consulting Warrants.
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June 2022 Private Placement Agreement
On June 30, 2022, the Company entered into a securities subscription and warrant purchase agreement (the “June 2022 Private Placement Agreement”) with certain investors, including directors and senior members of management of the Company (collectively, the “Purchasers”, and each, a “Purchaser”). Pursuant to the June 2022 Private Placement Agreement, each Purchaser agrees to subscribe for and purchase, and the Company agrees to issue and sell:
| ● | such number of Ordinary Shares (the “Subscription Shares”) calculated by dividing (i) the purchase price paid by such Purchaser to the Company, as set forth in Schedule A of the June 2023 Private Placement Agreement, by (ii) the per share purchase price (the “Per Share Purchase Price”) that is the higher of (a) US$1.00 and (b) 88% of the lowest daily dollar volume-weighted average price of the Ordinary Shares on the Nasdaq Capital Market (as reported by Bloomberg) during the last 10 trading days immediately preceding the execution date of the 2022 June Private Placement Agreement; and |
| ● | certain warrants (the “Subscription Warrants”) to purchase an aggregate number of Ordinary Shares that equals twice the number of the Subscription Shares. |
The aggregate purchase price payable by all of the Purchasers will be no more than US$3,300,000.
The Subscription Warrants are exercisable after vesting, in whole or in part, by the Purchaser within a period of five years, commencing on the date of the issuance of the Subscription Warrants. The vesting of the Subscription Warrants will be conditioned on the attainment of the performance goals of the Company and any other vesting schedule/conditions as set forth in the terms of the Subscription Warrants.
November 2022 Sale and Purchase Agreement and Northstar Technologies Purchase Agreement
On November 28, 2022, the Company entered into a sale and purchase agreement with Polaris Technologies Group Limited (formerly Antalpha Technologies Limited), Northstar Technologies, and Meta Rich to acquire 49% equity interest held by Polaris Technologies Group Limited in Metalpha Limited. The total consideration is US$2,500,000, satisfied by the allotment and issuance of 2,500,000 Ordinary Shares to Northstar Technologies. The deal was closed in November 2022 and Metalpha Limited became a wholly-owned subsidiary of the Company.
On November 28, 2022, the Company and Northstar Technologies entered into a securities subscription and warrant purchase agreement (the “Northstar Technologies Purchase Agreement”), pursuant to which Northstar Technologies agreed to subscribe for, and the Company agreed to issue to Northstar Technologies, (i) 4,500,000 Ordinary Shares (the “Subscription Shares”); (ii) a type A warrant to purchase up to 4,500,000 Ordinary Shares (the “Type A Warrant”), and (iii) a type B warrant to purchase up to 3,000,000 Ordinary Shares (the “Type B Warrant”), for an aggregate consideration of US$4,500,000.
| ● | Subscription Shares. The sale and subscription of the Subscription Shares will be completed in up to four (4) tranches, on a date that is no later than 180 days, 365 days, 545 days and 730 days from the signing date of the Northstar Technologies Purchase Agreement, respectively, upon the fulfillment of the closing conditions set forth in the Northstar Technologies Purchase Agreement. As of the date of this annual report, all of the Subscription Shares, or 4,500,000 Ordinary Shares have been issued. |
| ● | Type A Warrant. The Type A Warrant was issued by the Company on November 28, 2022. The Type A Warrant shall vest in tranches at the same rate and in the same proportion as the issuance and allotment of the Subscription Shares upon each closing thereof as set out in the Northstar Technologies Purchase Agreement. Upon vesting, the Type A Warrant is exercisable at an exercise price of US$1.00 per Ordinary Share. The Type A Warrant shall expire on the fifth (5th) anniversary of the date of issuance. |
| ● | Type B Warrant. The Type B Warrant was issued by the Company on November 28, 2022. The Type B Warrant shall vest in tranches at the same rate and in the same proportion as the issuance and allotment of the Subscription Shares upon each closing thereof as set out in the Northstar Technologies Purchase Agreement. |
| ● | Pre-emptive Rights. Subject to certain exceptions set forth in the Northstar Technologies Purchase Agreement, if the Company proposes to issue, grant or sell any equity securities within five years since the date of the Northstar Technologies Purchase Agreement, Northstar Technologies shall have the right to elect to purchase up to 40% of the total number of new securities to be issued by the Company. Northstar Technologies shall exercise its pre-emptive rights within 20 calendar days after receipt of a written issuance notice given by our Company, which sets forth the price, amount and other terms on which such new securities are proposed to be issued, granted or sold. |
On February 20, 2023, Metalpha HK, Mr. Limin Liu and Mr. Wei Wang entered into a sale and purchase agreement (the “SPA”) with Yang Xu and Liqing Zheng (collectively, the “Purchasers”). Pursuant to the SPA, the Purchasers will, at an aggregate consideration of US$1.00, purchase:
| ● | from Metalpha HK, the entire registered and issued share capital of Hangzhou Dacheng Investment Management Co., Ltd., an indirect wholly-owned subsidiary of the Company then; and |
| ● | from Mr. Limin Liu and Mr. Wei Wang, the entire registered and issued share capital of Hangzhou Longyun Network Technology Co., Ltd., a company controlled and beneficially owned by Hangzhou Dacheng Investment Management Co., Ltd. by means of a series of contractual arrangements. |
The above transaction was proposed to implement the Company’s decision to discontinue its business in mainland China and was closed in March 2023.
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June 2025 Sale and Purchase Agreement
On June 11, 2025, Sweet Lollipop, a limited liability company organized under the laws of the British Virgin Islands and an indirect subsidiary of Metalpha Technology Holding Limited, entered into a sale and purchase agreement (the “SPA”) with Jason Huang and Hermitage Management Limited, pursuant to which Sweet Lollipop agreed to sell and Jason Huang agreed to purchase 4 Ordinary Shares (the “Sale Shares”), representing 40% of the issued and outstanding share capital of NextGen Digital Venture Limited, at a consideration of US$40,000, of which 50% is payable to Sweet Lollipop and 50% is payable to Hermitage Management Limited. The transaction was subject to customary conditions precedent, including the approval of the board of directors of the ultimate controlling company of Sweet Lollipop, and was required to be completed no later than one month following the date of the SPA unless otherwise extended by the Parties in writing. Upon completion of the transaction, Sweet Lollipop and its affiliates agreed not to use, reference or mention “NDV”, “NextGen Digital Venture”, or any similar trade names in any public medium without the prior consent of the Buyer, and Hermitage Management Limited irrevocably waived and agreed not to assert any claims against the Company relating to any matter occurring prior to completion. The SPA is governed by the laws of Hong Kong.
October 2025 PIPE Agreement
October 30, 2025, Metalpha Technology Holding Limited entered into (i) a Subscription Agreement with Avenir Tech Limited, pursuant to which Metalpha Technology Holding Limited issued to Avenir Tech Limited 651,400 Ordinary Shares, par value US$0.0001 per share, at a purchase price of US$3.07 per share, for aggregate consideration of approximately US$2.0 million (the “Avenir Subscription Amount”), and (ii) a Subscription Agreement with Gortune International Investment Limited Partnership, pursuant to which Metalpha Technology Holding Limited issued to Gortune International Investment Limited Partnership 3,257,300 Ordinary Shares at the same price of US$3.07 per share, for aggregate consideration of approximately US$10.0 million (the “Gortune Subscription Amount”). The transactions were effected through a private placement exempt from registration under Regulation S of the U.S. Securities Act of 1933, as amended, and were consummated on December 5, 2025. Each purchaser agreed not to resell, pledge, or transfer any of the Ordinary Shares acquired within the United States or to any U.S. person during the 40-day distribution compliance period following the closing date. The Company agreed to use commercially reasonable efforts to file a resale shelf registration statement on Form F-3 (or another appropriate form if eligible) to register the resale of the purchased shares, and to cause such registration statement to be declared effective as promptly as practicable. The Ordinary Shares issued are subject to a restrictive legend indicating that they are “restricted securities” and may not be transferred in violation of U.S. securities laws. The respective Subscription Agreements also provide for indemnification by the Company of each purchaser against losses arising from breaches of representations, warranties or covenants, and include standard confidentiality and governing law provisions (New York law).
We have not entered into any material contracts other than in the ordinary course of business and other than those described in this section and in “Item 4. Information on the Company” or elsewhere in this annual report.
| D. | Exchange Controls |
Not appliable.
| E. | Taxation |
The following summary of the Cayman Islands and U.S. federal income tax considerations of an investment in the Ordinary Shares is based upon laws and relevant interpretations thereof in effect as of the date of this annual report, all of which are subject to change. This summary does not deal with all possible tax considerations relating to an investment in the Ordinary Shares, such as the tax considerations under U.S. state and local tax laws or under the tax laws of jurisdictions other than the Cayman Islands and the United States.
The 2017 Tax Act signed on December 22, 2017, may have changed the tax consequences to U.S. shareholders that own, or are considered to own, as a result of the attribution rules, 10% or more of the voting power or value of the stock of a non-U.S. corporation (a “10% U.S. shareholder”) under the U.S. Federal income tax law applicable to owners of U.S. controlled foreign corporations (“CFCs”). We do not believe any of our shareholders, or of our subsidiaries, were CFCs, and the 2017 Tax Act had no impact for the fiscal years ended March 31, 2022, 2021, and 2020. We are an exempted company incorporated in the Cayman Islands and conduct our primary business operations through a BVI subsidiary.
Cayman Islands Taxation
The Cayman Islands currently levies no taxes on individuals or corporations based upon profits, income, gains or appreciation, and there is no taxation in the nature of inheritance tax or estate duty. There are no other taxes likely to be material to us or holders of our Ordinary Shares levied by the government of the Cayman Islands, except for stamp duties which may be applicable on instruments executed in, or after execution brought within the jurisdiction of the Cayman Islands. The Cayman Islands are not party to any double tax treaties that are applicable to any payments made to or by our Company. There are no exchange control regulations or currency restrictions in the Cayman Islands.
Payments of dividends and capital in respect of Ordinary Shares will not be subject to taxation in the Cayman Islands and no withholding will be required on the payment of a dividend or capital to any holder of Ordinary Shares, nor will gains derived from the disposal of Ordinary Shares be subject to Cayman Islands income or corporation tax.
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United States Federal Income Tax Considerations
The following is a discussion of certain material U.S. federal income tax considerations generally applicable to the acquisition, ownership, and disposition of Ordinary Shares by a “U.S. Holder.” This discussion applies only to Ordinary Shares that are held by a U.S. Holder as “capital assets” within the meaning of Section 1221 of the Code (generally, property held for investment). This discussion does not describe all U.S. federal income tax considerations that may be relevant to a U.S. Holder in light of such U.S. Holder’s particular circumstances, nor does it address any state, local, or non-U.S. tax considerations, any non-income tax (such as gift or estate tax) considerations, the alternative minimum tax, the special tax accounting rules under Section 451(b) of the Code, the Medicare contribution tax on net investment income, or any tax consequences that may be relevant to U.S. Holders that are subject to special tax rules, including, without limitation:
| ● | banks or other financial institutions; |
| ● | insurance companies; |
| ● | mutual funds; |
| ● | pension or retirement plans; |
| ● | S corporations; |
| ● | broker or dealers in securities or currencies; |
| ● | traders in securities that elect mark-to-market treatment; |
| ● | regulated investment companies; |
| ● | real estate investment trusts; |
| ● | trusts or estates; |
| ● | tax-exempt organizations (including private foundations); |
| ● | persons that hold Ordinary Shares as part of a “straddle,” “hedge,” “conversion,” “synthetic security,” “constructive sale,” or other integrated transaction for U.S. federal income tax purposes; |
| ● | persons that have a functional currency other than the U.S. dollar; |
| ● | certain U.S. expatriates or former long-term residents of the United States; |
| ● | persons owning (directly, indirectly, or constructively) 5% (by vote or value) or more of our stock; |
| ● | persons that acquired Ordinary Shares pursuant to an exercise of employee stock options or otherwise as compensation; |
| ● | partnerships or other entities or arrangements treated as pass-through entities for U.S. federal income tax purposes and investors in such entities; |
| ● | “controlled foreign corporations” within the meaning of Section 957(a) of the Code; |
| ● | “passive foreign investment companies” within the meaning of Section 1297(a) of the Code; and |
| ● | corporations that accumulate earnings to avoid U.S. federal income tax. |
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If a partnership (including an entity or arrangement treated as a partnership for U.S. federal income tax purposes) holds Ordinary Shares, the tax treatment of a partner in such partnership generally will depend on the status of the partner and the activities of the partnership and the partner. Partnerships holding Ordinary Shares should consult their tax advisors regarding the tax consequences in their particular circumstances.
This discussion is based on the Code, the U.S. Treasury regulations promulgated thereunder, administrative rulings, and judicial decisions, all as currently in effect and all of which are subject to change or differing interpretation, possibly with retroactive effect. Any such change or differing interpretation could alter the tax consequences described herein. Furthermore, there can be no assurance that the Internal Revenue Service (the “IRS”) will not challenge the tax considerations described herein and that a court will not sustain such challenge.
For purposes of this discussion, a “U.S. Holder” is a beneficial owner of Ordinary Shares, that is, for U.S. federal income tax purposes:
| ● | an individual who is a U.S. citizen or resident of the United States; |
| ● | a corporation (including an entity treated as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States, any state thereof, or the District of Columbia; |
| ● | an estate the income of which is subject to U.S. federal income taxation regardless of its source; or |
| ● | a trust (i) if a court within the United States is able to exercise primary supervision over the administration of the trust and one or more “United States persons” within the meaning of Section 7701(a)(30) of the Code have the authority to control all substantial decisions of the trust or (B) that has in effect a valid election under applicable U.S. Treasury regulations to be treated as a United States person. |
THIS DISCUSSION IS FOR GENERAL INFORMATIONAL PURPOSES ONLY AND IS NOT TAX ADVICE. U.S. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS REGARDING THE TAX CONSEQUENCES OF THE ACQUISTION, OWNERSHIP, AND DISPOSITION OF ORDINARY SHARES IN THEIR PARTICULAR CIRCUMSTANCES.
Distributions on Ordinary Shares
Subject to the PFIC rules discussed below under “—Passive Foreign Investment Company Rules,” distributions on Ordinary Shares generally will be taxable as a dividend for U.S. federal income tax purposes to the extent paid from our current or accumulated earnings and profits, as determined under U.S. federal income tax principles. Such distributions in excess of our current and accumulated earnings and profits will constitute a return of capital that will be applied against and reduce (but not below zero) the applicable U.S. Holder’s adjusted tax basis in its Ordinary Shares. Any remaining excess will be treated as gain realized on the sale or other taxable disposition of the Ordinary Shares and will be treated as described below under “—Sale or Other Taxable Disposition of Ordinary Shares.” The amount of any such distributions will include any amounts required to be withheld by us (or another applicable withholding agent) in respect of any non-U.S. taxes. Any such amount treated as a dividend will be treated as foreign-source dividend income. Any such dividends received by a corporate U.S. Holder generally will not qualify for the dividends-received deduction generally allowed to U.S. corporations in respect of dividends received from other U.S. corporations. With respect to non-corporate U.S. Holders, any such dividends generally will be taxed at currently preferential long-term capital gains rates only if (i) Ordinary Shares are readily tradable on an established securities market in the United States or we are eligible for benefits under an applicable tax treaty with the United States, (ii) we are not treated as a PFIC with respect to the applicable U.S. Holder at the time the dividend was paid or in the preceding year, and (iii) certain holding period and other requirements are met. Any such dividends paid in a currency other than the U.S. dollar generally will be the U.S. dollar amount calculated by reference to the exchange rate in effect on the date of actual or constructive receipt, regardless of whether the payment is in fact converted into U.S. dollars at that time. A U.S. Holder may have foreign currency gain or loss if the dividend is converted into U.S. dollars after the date of actual or constructive receipt.
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As noted above and subject to applicable limitations, taxing jurisdictions other than the United States may withhold taxes from distributions on Ordinary Shares, and a U.S. Holder may be eligible for a reduced rate of withholding to the extent there is an applicable tax treaty between the applicable taxing jurisdiction and the United States and/or may be eligible for a foreign tax credit against the U.S. Holder’s U.S. federal income tax liability. Recently issued U.S. Treasury regulations, which apply to foreign taxes paid or accrued in taxable years beginning on or after December 28, 2021, may in some circumstances prohibit a U.S. Holder from claiming a foreign tax credit with respect to certain foreign taxes that are not creditable under applicable tax treaties. In lieu of claiming a foreign tax credit, a U.S. Holder may, at such U.S. Holder’s election, deduct foreign taxes in computing such U.S. Holder’s taxable income, subject to generally applicable limitations under U.S. tax law. An election to deduct foreign taxes in lieu of claiming a foreign tax credit applies to all foreign taxes paid or accrued in the taxable year in which such election is made. The foreign tax credit rules are complex and U.S. Holders should consult their tax advisers regarding the application of such rules, including the creditability of foreign taxes, in their particular circumstances.
Sale or Other Taxable Disposition of Ordinary Shares
Subject to the PFIC rules discussed below under “—Passive Foreign Investment Company Rules,” upon any sale or other taxable disposition of Ordinary Shares, a U.S. Holder generally will recognize gain or loss in an amount equal to the difference, if any, between (i) the sum of (A) the amount of cash and (B) the fair market value of any other property received in such sale or disposition and (ii) the U.S. Holder’s adjusted tax basis in the Ordinary Shares. Any such gain or loss generally will be capital gain or loss and will be long-term capital gain or loss if the U.S. Holder’s holding period for such Ordinary Shares exceeds one year. Long-term capital gain recognized by non-corporate U.S. Holders generally will be taxed at currently preferential long-term capital gains rates. The deductibility of capital losses is subject to limitations. For foreign tax credit purposes, any such gain or loss generally will be treated as U.S. source gain or loss.
If the consideration received by a U.S. Holder upon a sale or other taxable disposition of Ordinary Shares is not paid in U.S. dollars, the amount realized will be the U.S. dollar value of such payment calculated by reference to the exchange rate in effect on the date of such sale or disposition. A U.S. Holder may have foreign currency gain or loss to the extent of the difference, if any, between (i) the U.S. dollar value of such payment on the date of such sale or disposition and (ii) the U.S. dollar value of such payment calculated by reference to the exchange rate in effect on the date of settlement.
U.S. Holders should consult their tax advisors regarding the tax consequences of a sale or other taxable disposition of Ordinary Shares, including the creditability of foreign taxes imposed on such sale or disposition by a taxing jurisdiction other than the United States, in their particular circumstances.
Passive Foreign Investment Company Rules
The U.S. federal income tax treatment of U.S. Holders could be materially different from that described above if we are treated as a PFIC for U.S. federal income tax purposes. A non-U.S. corporation generally will be treated as a PFIC for U.S. federal income tax purposes if either (i) at least 75% of its gross income in a taxable year, including its pro rata share of the gross income of any corporation in which it is considered to own at least 25% of the shares by value, is passive income or (ii) at least 50% of its assets in a taxable year (ordinarily determined based on fair market value and averaged quarterly over the year), including its pro rata share of the assets of any corporation in which it is considered to own at least 25% of the shares by value, are held for the production of, or produce, passive income. Passive income generally includes dividends, interest, rents and royalties (other than rents or royalties derived from the active conduct of a trade or business), and gains from the disposition of passive assets.
Based on our analysis of our income, assets, activities and market capitalization, we believe that we were a PFIC for our taxable year ended March 31, 2026. However, the determination of whether a non-U.S. corporation is a PFIC is a fact-intensive determination made on an annual basis and the applicable law is subject to varying interpretation. In particular, the characterization of our assets as active or passive may depend in part on our current and intended future business plans, which are subject to change. In addition, the total value of our assets for PFIC testing purposes may be determined in part by reference to the market price of Ordinary Shares from time to time, which may fluctuate considerably. As a result, there can be no assurance with respect to our status as a PFIC for any taxable year, and our U.S. counsel expresses no opinion with respect to our PFIC status for any taxable year.
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Although PFIC status is generally determined annually, if we are determined to be a PFIC for any taxable year (or portion thereof) that is included in the holding period of a U.S. Holder in its Ordinary Shares and the U.S. Holder did not make either a mark-to-market election or a qualifying electing fund (“QEF”) election, which are referred to collectively as the “PFIC Elections” for purposes of this discussion, for the first taxable year in which we are treated as a PFIC, and in which the U.S. Holder held (or was deemed to hold) Ordinary Shares, or the U.S. Holder does not otherwise make a purging election, as described below, the U.S. Holder generally will be subject to special and adverse rules with respect to (i) any gain recognized by the U.S. Holder on the sale or other taxable disposition of its Ordinary Shares and (ii) any “excess distribution” made to the U.S. Holder (generally, any distributions to the U.S. Holder during a taxable year of the U.S. Holder that are greater than 125% of the average annual distributions received by the U.S. Holder in respect of its Ordinary Shares during the three preceding taxable years of the U.S. Holder or, if shorter, the U.S. Holder’s holding period in its Ordinary Shares).
Under these rules:
| ● | the U.S. Holder’s gain or excess distribution will be allocated ratably over the U.S. Holder’s holding period in its Ordinary Shares; |
| ● | the amount allocated to the U.S. Holder’s taxable year in which the U.S. Holder recognized the gain or received the excess distribution, and to any period in the U.S. Holder’s holding period before the first day of the first taxable year in which we are treated as a PFIC, will be taxed as ordinary income; |
| ● | the amount allocated to other taxable years (or portions thereof) of the U.S. Holder and included in the U.S. Holder’s holding period will be taxed at the highest tax rate in effect for that year and applicable to the U.S. Holder; and |
| ● | an additional tax equal to the interest charge generally applicable to underpayments of tax will be imposed on the U.S. Holder with respect to the tax attributable to each such other taxable year of the U.S. Holder. |
PFIC Elections
If we are treated as a PFIC and Ordinary Shares constitute “marketable stock,” a U.S. Holder may avoid the adverse PFIC tax consequences discussed above if such U.S. Holder makes a mark-to-market election with respect to its Ordinary Shares for the first taxable year in which the U.S. Holder holds (or is deemed to hold) the Ordinary Shares and each subsequent taxable year. Such U.S. Holder generally will include for each of its taxable years as ordinary income the excess, if any, of the fair market value of its Ordinary Shares at the end of such year over its adjusted tax basis in its Ordinary Shares. The U.S. Holder also will recognize an ordinary loss in respect of the excess, if any, of its adjusted tax basis in its Ordinary Shares over the fair market value of its Ordinary Shares at the end of its taxable year (but only to the extent of the net amount of previously included income as a result of the mark-to-market election). The U.S. Holder’s adjusted tax basis in its Ordinary Shares will be adjusted to reflect any such income or loss amounts, and any further gain recognized on a sale or other taxable disposition of its Ordinary Shares will be treated as ordinary income.
The mark-to-market election is available only for “marketable stock,” generally, stock that is regularly traded on a national securities exchange that is registered with the Securities and Exchange Commission, including the Nasdaq (on which Ordinary Shares are currently listed), or on a foreign exchange or market that the IRS determines has rules sufficient to ensure that the market price represents a legitimate and sound fair market value. As such, such election generally will not apply to any of our non-U.S. subsidiaries, unless the shares in such subsidiaries are themselves “marketable stock.” As such, U.S. Holders may continue to be subject to the adverse PFIC tax consequences discussed above with respect to any lower-tier PFICs, as discussed below, notwithstanding their mark-to-market election with respect to Ordinary Shares.
If made, a mark-to-market election would be effective for the taxable year for which the election was made and for all subsequent taxable years unless Ordinary Shares cease to qualify as “marketable stock” for purposes of the PFIC rules or the IRS consents to the revocation of the election. U.S. Holders should consult their tax advisors regarding the availability and tax consequences of a mark-to-market election with respect to Ordinary Shares in their particular circumstances.
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The tax consequences that would apply if we were a PFIC and a U.S. Holder made a valid QEF election would also be different from the adverse PFIC tax consequences described above. In order to comply with the requirements of a QEF election, however, a U.S. Holder generally must receive a PFIC Annual Information Statement from us and we do not currently intend to provide the information necessary for U.S. Holders to make or maintain a QEF election. As such, U.S. Holders should assume that a QEF election will not be available with respect to Ordinary Shares.
If we are treated as a PFIC and a U.S. Holder failed or was unable to timely make a PFIC Election for prior periods, the U.S. Holder might seek to make a purging election to rid its Ordinary Shares of the PFIC taint. Under the purging election, the U.S. Holder will be deemed to have sold its Ordinary Shares at their fair market value and any gain recognized on such deemed sale will be treated as an excess distribution, as described above. As a result of the purging election, the U.S. Holder will have a new adjusted tax basis and holding period in the Ordinary Shares solely for purposes of the PFIC rules.
Related PFIC Rules
If we are treated as a PFIC and, at any time, has a non-U.S. subsidiary that is treated as a PFIC, a U.S. Holder generally would be deemed to own a proportionate amount of the shares of such lower-tier PFIC, and generally could incur liability for the deferred tax and interest charge described above if we receive a distribution from, or sell or otherwise dispose of all or part of our interest in, such lower-tier PFIC, or the U.S. Holder otherwise was deemed to have sold or otherwise disposed of an interest in such lower-tier PFIC. U.S. Holders should consult their tax advisors regarding the application of the lower-tier PFIC rules in their particular circumstances.
A U.S. Holder that owns (or is deemed to own) shares in a PFIC during any taxable year may have to file an IRS Form 8621 (whether or not a QEF election or a mark-to-market election is made) and to provide such other information as may be required by the U.S. Treasury Department. Failure to do so, if required, will extend the statute of limitations applicable to such U.S. Holder until such required information is furnished to the IRS and could result in penalties.
THE PFIC RULES ARE VERY COMPLEX AND U.S. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS REGARDING THE APPLICATION OF SUCH RULES IN THEIR PARTICULAR CIRCUMSTANCES.
Information Reporting and Backup Withholding
Payments of dividends and sales proceeds that are made within the United States or through certain U.S.-related financial intermediaries are subject to information reporting, and may be subject to backup withholding, unless (i) the U.S. Holder is a corporation or other exempt recipient or (ii) in the case of backup withholding, the U.S. Holder provides a correct taxpayer identification number and certifies that it is not subject to backup withholding.
Backup withholding is not an additional tax. The amount of any backup withholding from a payment to a U.S. Holder will be allowed as a credit against the U.S. Holder’s U.S. federal income tax liability and may entitle the U.S. Holder to a refund, provided that the required information is timely furnished to the IRS.
U.S. Holders should consult their tax advisors regarding the information reporting requirements and the application of the backup withholding rules in their particular circumstances.
THIS DISCUSSION IS FOR GENERAL INFORMATIONAL PURPOSES ONLY AND IS NOT TAX ADVICE. U.S. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS REGARDING THE U.S. FEDERAL, STATE, AND LOCAL AND NON-U.S. INCOME AND NON-INCOME TAX CONSEQUENCES OF THE ACQUISITION, OWNERSHIP, AND DISPOSITION OF ORDINARY SHARES, INCLUDING THE IMPACT OF ANY POTENTIAL CHANGE IN LAW, IN THEIR PARTICULAR CIRCUMSTANCES.
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| F. | Dividends and Paying Agents |
Not applicable.
| G. | Statement by Experts |
Not applicable.
| H. | Documents on Display |
We are subject to the periodic reporting and other informational requirements of the Exchange Act. Under the Exchange Act, we are required to file reports and other information with the SEC. Specifically, we are required to file annually a Form 20-F within four months after the end of each fiscal year. Copies of reports and other information, when so filed, may be inspected without charge and may be obtained at prescribed rates at the public reference facilities maintained by the SEC at Judiciary Plaza, 100 F Street, N.E., Washington, D.C. 20549. The public may obtain information regarding the Washington, D.C. Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also maintains a web site at http://www.sec.gov that contains reports, proxy and information statements, and other information regarding registrants that make electronic filings with the SEC using its EDGAR system. As a foreign private issuer, we are exempt from, among others, the rules prescribing the furnishing and content of proxy statements under the Exchange Act and the rules relating to selective disclosure of material non-public information under Regulation FD under the Exchange Act. In addition, our executive officers, directors and principal shareholders are exempt from the short-swing profit and recovery provisions and our principal shareholders are exempt from the reporting requirements contained in Section 16 of the Exchange Act.
In accordance with Rule 5250(d) of the Nasdaq Listing Rules, we will post this annual report on Form 20-F on our website http://www.metalpha.net/. In addition, we will provide hardcopies of our annual report free of charge to upon request.
| I. | Subsidiary Information |
For a list of our subsidiaries, see “Item 4. Information on the Company—C. Organizational Structure.”
| J. | Annual Report to Security Holders |
Not applicable.
ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
You should read the following information in conjunction with “Item 5. Operating and Financial Review and Prospects,” “Item 3. Key Information—D. Risk Factors,” and our consolidated financial statements, including the related notes thereto, which are included elsewhere in this annual report on Form 20-F. The following discussion about our financial risk management activities includes “forward-looking statements” that involve risks and uncertainties. Actual results could differ materially from those projected in these forward-looking statements.
Credit Risk
Our maximum exposure to credit risk in the event that counterparties fail to perform their obligations in relation to each class of recognized financial assets is the carrying amounts of those assets as stated in the consolidated statements of financial position. Our credit risk is primarily attributable to its loan receivables, deposits and other receivables, and cash and cash equivalents. In order to minimize credit risk, the directors of the Company have delegated a team to be responsible for the determination of credit limits, credit approvals and other monitoring procedures. In addition, the directors review the recoverable amount of each individual debt regularly to ensure that adequate impairment losses are recognized for irrecoverable debts. The credit risk on cash and cash equivalents are limited because the counterparties are banks with high credit-ratings assigned by international credit-rating agencies. In this regard, the directors consider that our credit risk is significantly reduced.
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We have no significant concentration on credit risk, with exposure spread over a number of our counterparties.
We consider whether there has been a significant increase in credit risk of financial assets on an ongoing basis throughout each reporting period by comparing the risk of a default occurring as of the reporting date with the risk of default as of the date of initial recognition. We consider available reasonable and supportive forwarding-looking information, including internal credit rating, actual or expected significant adverse changes in business, financial or economic conditions that are expected to cause a significant change to the counterparties’ ability to meet its obligatons, actual or expected significant changes in the operating results of the counterparties, and significant changes in the expected performance and behavior of the counterparties.
Foreign Exchange Risk
We have minimal exposure to foreign currency risk as most of our business transactions, assets and liabilities are principally denominated in the functional currencies of our entities. As Hong Kong dollar is pegged to United States dollar, we consider the risk of movements in exchange rates between Hong Kong dollars and United States dollars to be insignificant.
We currently do not have a foreign currency hedging policy in respect of foreign currency transactions, assets and liabilities. We will monitor our foreign currency exposure closely and will consider hedging significant foreign currency exposure should the need arise.
Price Risk
Digital assets that we deal with in our trading activities are digital assets such as Bitcoin (“BTC”) and Ethereum (“ETH”) which can be traded in a number of public exchanges.
Our exposure to price risk arises from digital assets and digital assets payables which are both measured on a fair value basis. In particular, our operating results may depend upon the market price of BTC and ETH, as well as other digital assets. Digital asset prices have fluctuated significantly from time to time. There is no assurance that digital asset prices will reflect historical trends.
The price risk of digital assets arising from trading of digital assets business is partially offset by remeasurement of digital assets payables representing the obligations to deliver digital assets held by us in the customers’ accounts to the customers under the respective trading and lending arrangements with us.
Risks Associated with the Storage and Protection of Digital Assets
We primarily stored our digital assets in cryptocurrency exchanges to facilitate our proprietary trading in digital assets business. Due to lack of insurance for our digital assets, any disruptions or closures of cryptocurrency exchanges, as well as potential cyberattacks or cyberthefts, could result in substantial losses for us.
Investment Risk Related to Trading of Digital Assets
We have implemented quantitative trading strategies for our investment in digital assets. The investment performance primarily relies on market liquidity and strategies effectiveness and reliability of the system. Our strategies have the potential to generate profits over time, but they are also vulnerable to significant losses during unforeseen and extreme catastrophes. Furthermore, trading in this asset carries inherent risks, such as defective algorithms, hacking, liquidation resulting from significant market fluctuations, and counterparty risks. We closely monitor market liquidity using a systematic alerting process. However, during extreme market conditions, there is a possibility of experiencing significant mark-to-market losses.
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We have established a unique risk management system to continuously examine the success of our strategies and employ data analytics to assess and adjust such strategies. We continuously monitor the trading systems to detect any abnormalities.
Concentration Risk
As of March 31, 2024, 2025 and 2026, we had two counterparties, two counterparties and one counterparty who accounted for more than 10% of our digital assets payable, respectively. As of March 31, 2024, 2025 and 2026, we had two counterparties, one counterparty and no counterparty who accounted for more than 10% of our payable to customers, respectively.
Anti-Money Laundering Risk
Digital assets are capable of being traded directly between entities via decentralized networks that facilitate anonymous transactions. These transactions give rise to complicated technical challenges concerning matters including asset ownership and the identification of the parties involved. We have established anti-money laundering and know-your-customer policies and procedures, which are initiated during the client onboarding process, and applied through continuous monitoring , review, and reporting to mitigate such risks.
Liquidity Risk
Liquidity risk is the risk that we will encounter difficulty in meeting obligations associated with our financial liabilities that are settled by delivering cash or another financial asset. We monitor our liquidity risk and maintain a level of cash and bank balances deemed adequate by management to finance our operations and to mitigate the effects of fluctuations in cash flows.
ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
| A. | Debt Securities |
Not applicable.
| B. | Warrants and Rights |
Not applicable.
| C. | Other Securities |
Not applicable.
| D. | American Depositary Shares |
Not applicable.
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PART II
ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
None.
ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
Material Modifications to the Rights of Security Holders
See “Item 10. Additional Information” for a description of the rights of securities holders, which remain unchanged.
ITEM 15. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including our chief executive officer and our chief financial officer, we carried out an evaluation of the effectiveness of our disclosure controls and procedures, which is defined in Rules 13a-15(e) of the Exchange Act, as of March 31, 2026. Based on that evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures as of March 31, 2026 were effective in ensuring that material information required to be disclosed in this annual report is recorded, processed, summarized and reported to them for assessment, and that required disclosure is made within the time period specified in the rules and forms of the SEC.
Management’s Annual Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of financial statements for external purposes in accordance with IFRS and includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of our Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with IFRS, and that receipts and expenditures of our Company are being made only in accordance with authorizations of our management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of the unauthorized acquisition, use or disposition of our Company’s assets that could have a material effect on the consolidated financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect all potential misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risks that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
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As required by Section 404 of the Sarbanes-Oxley Act of 2002 and related rules as promulgated by the SEC, our management, including our chief executive officer and chief financial officer, assessed the effectiveness of internal control over financial reporting as of March 31, 2026 using the criteria set forth in the report “Internal Control—Integrated Framework (2013)” published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this assessment, management concluded that our internal control over financial reporting was effective as of March 31, 2026.
We ceased to qualify as an “emerging growth company” pursuant to the JOBS Act on March 31, 2023. However, since our public float was not over $75 million on September 30, 2025, we are a non-accelerated filer and exempted from the auditor attestation requirement under Section 404 of the Sarbanes-Oxley Act of 2002 for the assessment of our internal control over financial reporting for the fiscal year ended March 31, 2026.
Attestation Report of the Registered Public Accounting Firm
This annual report on Form 20-F does not include an attestation report of the Company’s registered public accounting firm due to rules of the SEC where domestic and foreign registrants that are non-accelerated filers, which we are, are not required to provide the auditor attestation report.
Changes in Internal Control over Financial Reporting
During the fiscal year ended March 31, 2026, we completed the implementation of measures to remediate the previously identified material weakness in our internal control over financial reporting regarding the lack of qualified internal accounting personnel with sufficient knowledge of IFRS and SEC reporting standards.
Specifically, under the direction of our Chief Financial Officer—who was appointed in a prior fiscal year and possesses the requisite knowledge and experience in IFRS and SEC reporting requirements—management has formalized and implemented our internal control framework to ensure the accuracy and quality of our financial reporting. Based on the evaluation of these implemented controls, management has concluded that the previously reported material weakness has been remediated as of March 31, 2026.
Except for the remediation measures described above, there were no other changes in our internal controls over financial reporting that occurred during the period covered by this annual report on Form 20-F that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
ITEM 16. [RESERVED]
ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT
Our board of directors has determined that Mr. Sen Lin, an independent director of our Company is the audit committee financial expert, who possesses financial sophistication and expertise within the meaning of the Nasdaq Listing Rules and SEC rules.
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ITEM 16B. CODE OF ETHICS
Our board of directors has adopted a code of ethics that applies to all of the directors, officers, and employees of our Company, whether they work for the Company on a full-time, part-time, consultative or temporary basis. We have filed our code of business conduct and ethics as Exhibit 99.1 to our registration statement on Form F-1 (File Number 333-214932), as amended, initially filed with the SEC on December 6, 2016.
ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The following table sets forth the aggregate fees by categories specified below in connection with certain professional services rendered by our principal external auditors, for the periods indicated.
| For the fiscal year ended March 31, | ||||||||
| 2026 | 2025 | |||||||
| US$ | US$ | |||||||
| Audit fees (1) | 200,000 | 188,000 | ||||||
| Audit-related fees (2) | 81,000 | 73,000 | ||||||
| Tax fees (3) | — | — | ||||||
| All other fees (4) | — | — | ||||||
| Total | 281,000 | 261,000 | ||||||
| (1) | “Audit fees” means the aggregate fees billed for each of the fiscal years for professional services rendered by our principal accountant for the audit of our annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years. |
| (2) | “Audit-related fees” means the aggregate fees billed for professional services rendered by our principal accountant for the assurance and related services, which mainly included the audit and review of financial statements and are not reported under “Audit fees” above. |
| (3) | “Tax fees” means the aggregate fees billed for professional services rendered by our principal accountant for tax compliance, tax advice and tax planning. |
| (4) | “Other fees” means the aggregate fees incurred in each of the fiscal years listed for the professional tax services rendered by our principal accountant other than services reported under “Audit fees,” “Audit-related fees” and “Tax fees.” |
The policy of our audit committee is to pre-approve all audit and non-audit services provided by our independent auditor including audit services, audit-related services, tax services and other services.
ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
Not applicable.
ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
On February 13, 2025, our board of directors approved a share repurchase program under which we may repurchase up to US$5,000,000 of the Ordinary Shares, effective until February 13, 2028. As of March 31, 2026, the remaining capacity available for repurchase under the program was US$4,981,996.
The following table sets forth information regarding purchases of our equity securities by us and affiliated purchasers during the year ended March 31, 2026.
| Period | Total number of shares purchased | Average price paid per share (US$) | Total number of shares purchased as part of publicly announced plans or programs | Approximate dollar value of shares that may yet be purchased under the plans or programs (US$) | ||||||||||||
| March 1 - March 31, 2026 | 16,130 | 1.116 | 16,130 | 4,981,996 | ||||||||||||
Note:
| (1) | For a description of the share repurchase program, see discussion above in this section. |
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ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT
WWC, P.C. was previously our independent registered public accounting firm. On April 3, 2024, WWC, P.C. was dismissed, and OneStop Assurance PAC (“OneStop Assurance”) was appointed as our independent registered public accounting firm. The decision to change our independent registered public accounting firm was made after a careful and thorough evaluation process and approved by our board of directors and its audit committee.
WWC, P.C.’s audit reports on the Company’s consolidated statements of financial position as of March 31, 2023 and 2022, and consolidated statements of profit or loss and comprehensive loss, changes in equity, and cash flows for each of the years in the three-year period ended March 31, 2023 along with related notes did not contain any adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope or accounting principles, except for an explanatory paragraph in such reports regarding substantial doubt about our Company’s ability to continue as a going concern.
During the fiscal years ended March 31, 2021, 2022 and 2023 and the subsequent interim period preceding April 4, 2024, there were (i) no disagreements (as defined in Item 16F(a)(1)(iv) of Form 20-F and the related instructions thereto) between our Company and WWC, P.C. on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which, if not resolved to the satisfaction of WWC, P.C., would have caused WWC, P.C. to make reference to the disagreements in its audit reports on the consolidated financial statements for such periods, and (ii) no reportable events (as defined in Item 16F(a)(1)(v) of Form 20-F).
During the two most recent fiscal years ended March 31, 2023, and in the subsequent interim period preceding April 4, 2024, neither we nor anyone acting on our behalf consulted with OneStop Assurance regarding either (i) the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on our consolidated financial statements, and neither a written report nor oral advice was provided to us that OneStop Assurance concluded was an important factor considered by us in reaching a decision as to any accounting, audit or financial reporting issue, (ii) any matter that was the subject of a disagreement pursuant to Item 16F(a)(1)(iv) of Form 20-F and the related instructions thereto, or (iii) any reportable event pursuant to Item 16F(a)(1)(v) of Form 20-F.
WWC, P.C. addressed a letter to the SEC stating that it concurs with the statements made by our Company with respect to WWC, P.C. A copy of such letter was included in our Company's report on Form 6-K furnished with the SEC on April 4, 2024, which is hereby incorporated by reference as Exhibit 16.1 to this annual report on Form 20-F.
ITEM 16G. CORPORATE GOVERNANCE
As a Cayman Islands company listed on the Nasdaq Capital Market, we are subject to the Nasdaq Capital Market corporate governance listing standards. However, Nasdaq Capital Market rules permit a foreign private issuer like us to follow the corporate governance practices of its home country. Certain corporate governance practices in the Cayman Islands, which is our home country, may differ significantly from the Nasdaq Capital Market corporate governance listing standards.
Nasdaq Listing Rule 5635 generally provides that shareholder approval is required of U.S. domestic companies listed on the Nasdaq Capital Market prior to issuance (or potential issuance) of securities (i) equaling 20% or more of the company’s common stock or voting power for less than the greater of market or book value (ii) resulting in a change of control of the company; (iii) which is being issued pursuant to a stock option or purchase plan to be established or materially amended or other equity compensation arrangement made or materially amended; and (iv) in connection with the acquisition of the stock or assets of another company under certain conditions. Notwithstanding this general requirement, Nasdaq Listing Rule 5615(a)(3)(A) permits foreign private issuers to follow their home country practice rather than these shareholder approval requirements. The Cayman Islands laws do not require shareholder approval prior to any of the foregoing types of issuance. The Company, therefore, is not required to obtain such shareholder approval prior to entering into a transaction with the potential to issue securities as described above. Specifically, the Board of Directors of the Company has elected to follow the Company’s home country rules and be exempt from the requirements to obtain shareholder approval for (1) the issuance of securities in connection with the acquisition of stock or assets of another company under Nasdaq Listing Rule 5635(a), (2) the issuance of 20% or more of its outstanding ordinary shares under Nasdaq Listing Rule 5635(d), (3) the issuance of securities when the issuance or potential issuance will result in a change of control of the Company under Nasdaq Listing Rule 5635(b), and (4) the issuance of securities pursuant to a stock option or purchase plan to be established or materially amended or other equity compensation arrangement made or materially amended under Nasdaq Listing Rule 5635(c).
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Nasdaq Listing Rule 5605(b)(1) requires listed companies to have, among other things, a majority of its board members be independent. As a foreign private issuer, however, we are permitted to, and we may follow home country practice in lieu of the above requirements, or we may choose to comply with the above requirement within one year of listing. The corporate governance practice in our home country, the Cayman Islands, does not require a majority of our board to consist of independent directors. Currently, a majority of our board members are independent. However, if we change our board composition such that independent directors do not constitute a majority of our board of directors, our shareholders may be afforded less protection than they would otherwise enjoy under Nasdaq’s corporate governance requirements applicable to U.S. domestic issuers. See “Item 3. Key Information—D. Risk Factors— Risks Relating to Our Ordinary Shares and the Trading Market—As a foreign private issuer, we are permitted to, and we may rely on exemptions from certain Nasdaq Capital Market corporate governance standards applicable to U.S. issuers. This may afford less protection to holders of our Ordinary Shares.”
Other than those described above, there are no significant differences between our corporate governance practices and those followed by U.S. domestic companies under Nasdaq Capital Market corporate governance listing standards.
ITEM 16H. MINE SAFETY DISCLOSURE
Not applicable.
ITEM 16I. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
ITEM 16J. INSIDER TRADING POLICIES
Our board of directors has adopted
ITEM 16K. CYBERSECURITY
Risk Management and Strategy
We have implemented and maintained various information security processes designed to identify, assess and manage material risks from cybersecurity threats to our critical computer networks, third party hosted services, communications systems, hardware and software, and our critical data, including intellectual property, and confidential information that is proprietary, strategic or competitive in nature (“Information Systems and Data”).
Our IT team helps identify, assess and manage our cybersecurity threats and risks. Our IT team identifies and assesses risks from cybersecurity threats by monitoring and evaluating our threat environment using various methods including, for example, manual tools, automated tools, analyzing reports of threats and actors, conducting scans of the threat environment, evaluating our and our industry’s risk profile, evaluating threats reported to us, conducting threat assessments for internal and external threats, engaging third party threat assessments, etc.
Depending on the environment, we implement and maintain various technical, physical, and organizational measures, processes, standards and policies designed to manage and mitigate material risks from cybersecurity threats to our Information Systems and Data, including, for example, cybersecurity incident response policy, vulnerability management policy, disaster recovery/business continuity plans, security standards, encryption of data, network security controls, data segregation, access controls, physical security, asset management, tracking and disposal, systems monitoring and employee training.
75
Our assessment and management of material risks from cybersecurity threats are
We use
Governance
Our cybersecurity risk assessment and management processes are implemented and maintained by certain of our management, including our chief executive officer, our chief operating officer, our chief financial officer and our in-house general counsel. With the experience of setting up servers and firewalls, our senior network engineer is responsible for hiring appropriate personnel, helping to integrate cybersecurity risk considerations into our overall risk management strategy, communicating key priorities to relevant personnel, and overseeing the operation of our cybersecurity risks and cloud services. With the experience of software programming, our vice president of software department is mainly responsible for supervising our IT and software departments, including helping prepare for cybersecurity incidents, approving cybersecurity processes, and reviewing security assessments and other security-related reports. Our vice president of software department reports to our chief executive officer and our chief executive officer is responsible for approving budgets.
Our cybersecurity incident response and vulnerability management policies are designed to escalate certain cybersecurity incidents to cybersecurity incident management team (the “CSI management team”) depending on the circumstances, including our chief operating officer, chief financial officer and in-house general counsel. The CSI management team works with our company’s senior management team to help our company mitigate and remediate cybersecurity incidents of which they are notified. In addition, our company’s cybersecurity incident response and vulnerability management policies include reporting to the audit committee of the board of directors for certain cybersecurity incidents. The audit committee receives periodic reports from our CSI management team concerning our company’s significant cybersecurity threats and risk and the processes our company has implemented to address them. The audit committee also has access to various reports, summaries or presentations related to cybersecurity threats, risk and mitigation.
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PART III
ITEM 17. FINANCIAL STATEMENTS
We have elected to provide financial statements pursuant to Item 18.
ITEM 18. FINANCIAL STATEMENTS
The consolidated financial statements of Metalpha Technology Holding Limited and its subsidiaries are included at the end of this annual report.
ITEM 19. EXHIBITS
EXHIBIT INDEX
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78
| * | Filed with this annual report on Form 20-F. |
| ** | Furnished with this annual report on Form 20-F. |
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SIGNATURES
The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.
| Metalpha Technology Holding Limited | ||
| By: | /s/ Bingzhong Wang | |
| Name: | Bingzhong Wang | |
| Title: | Chief Executive Officer and Chairman of the Board | |
Date: August 6, 2026
80
INDEX TO FINANCIAL STATEMENTS
METALPHA TECHNOLOGY HOLDING
LIMITED (FORMERLY KNOWN AS
DRAGON VICTORY INTERNATIONAL LIMITED)
F-1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 | Onestop Assurance PAC 10 Anson Road #21-14 International Plaza Email:audit@onestop-audit.com Website: https://www.onestop-audit.com |
| To: | The Board of Directors and Shareholders of |
| Metalpha Technology Holding Limited |
Opinion on the Financial Statements
We have audited the accompanying consolidated statements of financial position of Metalpha Technology Holding Limited and its subsidiaries (collectively, the “Company”) as of March 31, 2026 and 2025 , the related consolidated statements of profit or loss and comprehensive loss, changes in shareholders’ equity, and cash flows for each of the three years in the period ended March 31, 2026, and the related notes to the consolidated financial statements and schedule (collectively, the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of March 31, 2026 and 2025, and the results of its operations and its cash flows for each of the three years in the period ended March 31, 2026, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.
F-2
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
Accounting of digital asset transactions and balances
We assessed the accounting for digital assets transactions and balances as a critical audit matter. As described in Notes 6, 7 and 11 to the financial statements, as of March 31, 2026, the Company’s digital assets transactions and balances were an amount that was quantitatively material to the financial statements as a whole, and the account are subject to estimation, judgment, and complex calculations. IFRSs do not specifically address accounting for digital assets. Accordingly, management needs to apply judgements in determining appropriate accounting policies based on the existing accounting framework and the facts and circumstances of the Company’s digital assets.
How We Addressed the Matter in Our Audit
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These audit procedures included:
| ● | agreed wallet balances as at year end between the operating system and accounting system; |
| ● | understood and evaluated the accounting policies adopted by management for its digital assets based on the business arrangements with respective counterparties; |
| ● | circularized independent audit confirmations for digital assets in platforms and digital assets payable to customers to confirm year end account balances; |
| ● | obtained of the valuation report and independently checked the reliability of the calculation by verify the skill, knowledge and experience of the valuer and the applicable fair value methodology and key parameters applied in the valuation of the products; and |
| ● | Evaluated the fair value of digital assets adopted by management to external data quoted in the primary exchange market. |
/s/
August 6, 2026
PCAOB ID:
We have served as the Company’s auditor since 2024
F-3
Metalpha Technology Holding Limited
Consolidated statements of financial position
As of March 31, 2026 and 2025
(Stated in U.S. Dollars, except for the number of shares)
| Note | 2026 | 2025 | ||||||||||
| Assets | ||||||||||||
| Non-current assets | ||||||||||||
| Plant and equipment, net | 4 | |||||||||||
| Right-of-use assets, net | 5 | |||||||||||
| Rental deposits | ||||||||||||
| Total non-current assets | ||||||||||||
| Current assets | ||||||||||||
| Financial assets at fair value through profit or loss | 6 | |||||||||||
| Digital assets and digital assets receivables | 7 | |||||||||||
| Prepayments and other receivables, net | 8 | |||||||||||
| Cash and cash equivalents | 9 | |||||||||||
| Total current assets | ||||||||||||
| Total assets | ||||||||||||
| Equity | ||||||||||||
| Share capital | 10 | |||||||||||
| Additional paid-in capital | 10 | |||||||||||
| Treasury shares | 10 | ( | ) | ( | ) | |||||||
| Other reserve | 10 | |||||||||||
| Accumulated deficit | 10 | ( | ) | ( | ) | |||||||
| Accumulated other comprehensive loss | ( | ) | ( | ) | ||||||||
| Total equity | ||||||||||||
| Liabilities | ||||||||||||
| Non-current liabilities | ||||||||||||
| Lease liabilities - non-current | 5 | |||||||||||
| Total non-current liabilities | ||||||||||||
| Current liabilities | ||||||||||||
| Financial liabilities at fair value through profit or loss | 14 | |||||||||||
| Digital assets payable | 11 | |||||||||||
| Digital assets payable – related party | 11 | |||||||||||
| Payable to customers | 12 | |||||||||||
| Payable to customers – related party | 12 | |||||||||||
| Other payables | 13 | |||||||||||
| Taxes payable | ||||||||||||
| Lease liabilities | 5 | |||||||||||
| Total current liabilities | ||||||||||||
| Total liabilities | ||||||||||||
| Total liabilities and equity | ||||||||||||
The accompanying notes form an integral part of these consolidated financial statements.
F-4
Metalpha Technology Holding Limited
Consolidated statements of profit or loss and comprehensive loss
For the years ended March 31, 2026, 2025 and 2024
(Stated in U.S. Dollars, except for the number of shares)
| Note | 2026 | 2025 | 2024 | ||||||||||||
| Income from principal activities | |||||||||||||||
| Revenue | 15 | ||||||||||||||
| Cost of income | 16 | ( | ) | ( | ) | ( | ) | ||||||||
| Gross profit | |||||||||||||||
| Operating expenses: | |||||||||||||||
| Selling and promotion | ( | ) | ( | ) | ( | ) | |||||||||
| General and administrative | 17 | ( | ) | ( | ) | ( | ) | ||||||||
| Total operating expenses | ( | ) | ( | ) | ( | ) | |||||||||
| Profit from operation | |||||||||||||||
| Other income and expenses | |||||||||||||||
| Other income | 19 | ||||||||||||||
| Impairment loss on financial asset at fair value through profit or loss | ( | ) | |||||||||||||
| Share purchase warrants expenses | 10 | ( | ) | ( | ) | ||||||||||
| Finance costs | 18 | ( | ) | ( | ) | ( | ) | ||||||||
| Total other income and expense, net | ( | ) | ( | ) | |||||||||||
| Profit (loss) before income tax expense from continuing operations | ( | ) | |||||||||||||
| Income tax expense | 20 | ( | ) | ||||||||||||
| Profit (loss) for the year | ( | ) | |||||||||||||
| Other comprehensive income (loss) | |||||||||||||||
| Foreign operations – foreign currency translation differences | ( | ) | ( | ) | ( | ) | |||||||||
| Total comprehensive income (loss) for the year | ( | ) | |||||||||||||
| Income (loss) attributable to owners of the Company | ( | ) | |||||||||||||
| Total comprehensive income (loss) for the year attributable to Owners of the Company | ( | ) | |||||||||||||
| Income (loss) per share attributable to owners of the Company | |||||||||||||||
| - Basic | 23 | ( | ) | ||||||||||||
| - Diluted | 23 | ( | ) | ||||||||||||
| Weighted average number of shares outstanding | |||||||||||||||
| - Basic | 23 | ||||||||||||||
| - Diluted | |||||||||||||||
The accompanying notes form an integral part of these consolidated financial statements.
F-5
Metalpha Technology Holding Limited
Consolidated statements of changes in equity
For the years ended March 31, 2026, 2025 and 2024
(Stated in U.S. Dollars, except for the number of shares)
| Available to the equity holders of the Company | Accumulated | |||||||||||||||||||||||||||||||||||
| Ordinary shares | Additional | other | ||||||||||||||||||||||||||||||||||
| Note | Number of shares |
Amount | paid- in capital |
Treasury shares |
Other reserves |
Accumulated deficit |
comprehensive (loss) income |
Total equity |
||||||||||||||||||||||||||||
| Balances at March 31, 2024 | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Profit for the year | — | — | ||||||||||||||||||||||||||||||||||
| Issue share purchase warrants | 10 | — | — | |||||||||||||||||||||||||||||||||
| Shares issued on private placement | 10 | — | ||||||||||||||||||||||||||||||||||
| Cumulative translation adjustment | — | — | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Balances at March 31, 2025 | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Profit for the year | — | — | ||||||||||||||||||||||||||||||||||
| Share repurchase | — | ( | ) | ( | ) | |||||||||||||||||||||||||||||||
| Share based payment expense | — | — | ||||||||||||||||||||||||||||||||||
| Shares issued on private placement | — | |||||||||||||||||||||||||||||||||||
| Termination of share award | — | — | ( | ) | ||||||||||||||||||||||||||||||||
| Cumulative translation adjustment | — | — | ( | ( | ) | |||||||||||||||||||||||||||||||
| Balances at March 31, 2026 | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
The accompanying notes form an integral part of these consolidated financial statements.
F-6
Metalpha Technology Holding Limited
Consolidated statements of cash flows
For the years ended March 31, 2026, 2025 and 2024
(Stated in U.S. Dollars)
| 2026 | 2025 | 2024 | ||||||||||
| Cash flows from operating activities | ||||||||||||
| Profit (loss) before income tax | ( | ) | ||||||||||
| Adjustments for: | ||||||||||||
| Interest income | ( | ) | ( | ) | ( | ) | ||||||
| Finance costs | ||||||||||||
| Unrealized fair value change of trading of digital assets, listed securities, funds and derivative contracts | ( | ) | ( | ) | ( | ) | ||||||
| Interest income on trading of digital assets, listed securities, funds and derivative contracts | ( | ) | ( | ) | ( | ) | ||||||
| Cost of income | ||||||||||||
| Impairment loss on financial assets at fair value through profit or loss | ||||||||||||
| Depreciation of plant and equipment | ||||||||||||
| Depreciation of right of use assets | ||||||||||||
| Share-based compensation | ||||||||||||
| Share purchase warrants expenses | ||||||||||||
| Gain on early termination of leases | ( | ) | ( | ) | ||||||||
| Unrealized loss (gain) on change in fair value of financial asset at fair value through profit or loss | ( | ) | ||||||||||
| Changes in working capital | ||||||||||||
| (Increase) decrease in other receivables and prepayments | ( | ) | ( | ) | ||||||||
| (Increase) decrease in financial assets at fair value through profit or loss | ( | ) | ( | ) | ||||||||
| Increase in financial liabilities at fair value through profit or loss | ||||||||||||
| Increase (decrease) in other payables | ( | ) | ||||||||||
| Increase (decrease) in payable to customers | ( | ) | ||||||||||
| Net cash (used in) generated from operating activities | ( | ) | ( | ) | ||||||||
| Cash flows from investing activities | ||||||||||||
| Purchase of plant and equipment | ( | ) | ( | ) | ||||||||
| Proceed from disposal of investment | ||||||||||||
| Interest received | ||||||||||||
| Net cash generated from (used in) investing activities | ( | ) | ||||||||||
| Cash flows from financing activities | ||||||||||||
| Proceeds from shares issued on private placement | ||||||||||||
| Proceeds from issuance of notes | ||||||||||||
| Repurchase of shares | ( | ) | ( | ) | ||||||||
| Advance from related party | ||||||||||||
| Payment of principal portion of lease liabilities | ( | ) | ( | ) | ( | ) | ||||||
| Net cash generated from financing activities | ||||||||||||
| Net (decrease) increase of cash and cash equivalents | ( | ) | ( | ) | ||||||||
| Effect of foreign currency translation on cash and cash equivalents | ( | ) | ( | ) | ( | ) | ||||||
| Cash and cash equivalents at beginning of year | ||||||||||||
| Cash and cash equivalents at end of year | ||||||||||||
Significant non-cash transactions
Non-cash investing and financing activities
Non-cash investing and financing activities for the years ended March 31, 2026, 2025 and 2024, as disclosed in the notes, are:
| (i) | Capitalization of US$ |
| (ii) | Issuance of ordinary share of the Company of |
| (iii) | Acquisition of |
The accompanying notes form an integral part of these consolidated financial statements.
F-7
Metalpha Technology Holding Limited
Notes to the consolidated financial statements
1. Overview of the Company
Metalpha Technology Holding Limited (“the Company”) was formed in the Cayman Islands on June 19, 2015. The Company mainly operates in trading of proprietary digital assets and derivative contracts in Hong Kong, through its British Virgin Islands subsidiary, Metalpha Limited (“Metalpha BVI”).
On September 21, 2022, the Company transferred
On November 15, 2022, the shareholders of the Company approved change of the name of the Company from “Dragon Victory International Limited” to “Metalpha Technology Holding Limited”.
On November 28, 2022, the Company entered into a sale and purchase agreement with Northstar Technologies to purchase
On February 20, 2023, Metalpha Holding (HK) Limited (“Metalpha HK”), an indirect wholly-owned subsidiary of the Company, Liu Limin and Wang Wei (as the registered nominee shareholders of HangZhou Longyun Network Technology Co., Ltd (“HangZhou Longyun”)) entered into a sale and purchase agreement (“SPA”) with two individual third parties, Xu Yang and Zheng Liqing (collectively, the “Purchasers”). Pursuant to the SPA, the Purchasers agreed to purchase the entire equity interest of Hangzhou Dacheng from Metalpha HK, and the entire equity interest of Hangzhou Longyun from Liu Limin and Wang Wei (the “Transaction”). The Transaction was proposed to implement the Company’s decision to discontinue the operations in Mainland China. The aggregate consideration for the Transaction was US$
Particulars of subsidiaries of the Company as of March 31, 2026 are as below:
| Place of incorporation | Issued share | Principal | Percentage of shareholding% | |||||||||||
| Company | and operation | capital | activities | Direct | Indirect | |||||||||
| Sweet Lollipop Co., Ltd. (“Sweet Lollipop”) | US$ | % | ||||||||||||
| Metalpha Holding (HK) Limited (formerly known as “Long Yun International Holdings Limited”) | HK$ | % | ||||||||||||
| Meta Rich Limited | US$ | % | ||||||||||||
| LSQ Capital Limited | HK$ | % | ||||||||||||
| Metalpha Limited (“Metalpha BVI”)(1) | US$ | % | ||||||||||||
| LSQ Investment Limited | HK$ | % | ||||||||||||
| Metalpha PTE. Limited | US$ | % | ||||||||||||
Notes:
| (1) |
F-8
2. Basis of preparation
| 2.1 | Basis of compliance |
The financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRSs”) as issued by the International Accounting Standards Board (“IASB”).
The consolidated financial statements were approved for issuance by the Company’s Board of Directors on August 6, 2026.
| 2.2 | Basis of measurement |
The financial statements have been prepared under the historical cost convention, except for financial assets measured at fair value through profit and loss, digital assets and digital assets payables which are measured at fair value through profit or loss as described in the accounting policies below.
| 2.3 | Functional and presentation currency |
These consolidated financial statements are presented in United States dollars (US$), which is the Company’s functional currency.
The functional currency of the Hong Kong subsidiaries is Hong Kong Dollars (“HK$”); all entries from these entities are presented in the Company’s presentational currency of US$. Where the subsidiaries’ functional currency is different from the parent, the assets and liabilities presented are translated at the closing rate as of the statement of financial position date. Income and expenses are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the rate on the dates of the transactions).
| 2.4 | Use of estimates and judgements |
The preparation of the consolidated financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.
Information about estimation uncertainties that have a significant risk of resulting in a material adjustment within the next financial year are included the following:
| (a) | Accounting of digital assets transactions and balances |
IFRSs do not specifically address accounting for digital assets. Accordingly, for the preparation of the Company’s consolidated financial statements, management needs to apply judgement in determining appropriate accounting policies based on the existing accounting framework and the facts and circumstances of the Company’s trading of digital assets business.
The Company’s digital assets portfolio mainly comprises cryptocurrencies. According to the business model of the Company’s activities and the characteristics of each of the relevant digital assets, the Company’s digital assets are accounted for as inventories measured at fair value less costs to sell on the consolidated statement of financial position while the respective digital assets obtained (under “digital assets payables”) from both non-controlling shareholders and third parties are measure at fair value through profit or loss.
Furthermore, in determining fair values, management needs to apply judgement to identify the relevant available markets, and to consider accessibility to and activity within cryptocurrency markets in order to identify the principal digital asset markets for the Company.
F-9
| (b) | Impairment allowances for other receivables |
The loss allowances for other receivables are based on assumptions about the risk of default and expected loss rates. The Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on the Company’s past history, existing market conditions as well as forward looking estimates at the end of each reporting period.
| (c) | Determination of share-based payments |
The estimation of share-based payments (including warrants and stock options) requires the selection of an appropriate valuation model and consideration as to the inputs necessary for the valuation model chosen. The model used by the Company is the Black-Scholes valuation model at the date of the grant. The Company makes estimates as to the risk-free interest rate, volatility, the expected life of the warrants and weighted average fair value per warrant, as applicable. The expected volatility is based on the average volatility of share prices of the Company over the period of the expected life of the applicable warrants and stock options. The expected life is based on historical data. These estimates may not necessarily be indicative of future actual patterns. Refer to note 10 for more details on the valuation model and relevant significant inputs.
3. Material accounting policies
The accounting policies set out below have been applied consistently by the Company to the years presented in these financial statements.
| 3.1 | Basis of consolidation |
The consolidated financial statements include the financial statements of the Company and its subsidiaries for the years ended March 31, 2026, 2025 and 2024. A subsidiary is an entity (including a structured entity), directly or indirectly, controlled by the Company. Control is achieved when the Company is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee (i.e., existing rights that give the Company the current ability to direct the relevant activities of the investee).
When the Company has, directly or indirectly, less than a majority of the voting or similar rights of an investee, the Company considers all relevant facts and circumstances in assessing whether it has power over an investee, including:
| (a) | the contractual arrangement with the other vote holders of the investee; |
| (b) | rights arising from other contractual arrangements; and |
| (c) | the Company’s voting rights and potential voting rights. |
The financial statements of the subsidiaries are prepared for the same reporting period as the Company, using consistent accounting policies. The results of subsidiaries are consolidated from the date on which the Company obtains control, and continue to be consolidated until the date that such control ceases. Profit or loss and each component of other comprehensive income are attributed to the owners of the parent of the Company and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance. All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Company are eliminated in full on consolidation.
The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control described above. A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. If the Company loses control over a subsidiary, it derecognizes (i) the assets (including goodwill) and liabilities of the subsidiary, (ii) the carrying amount of any non-controlling interest and (iii) the cumulative translation differences recorded in equity; and recognizes (i) the fair value of the consideration received, (ii) the fair value of any investment retained and (iii) any resulting surplus or deficit in profit or loss. The Company’s share of components previously recognized in other comprehensive income is reclassified to profit or loss or retained profits, as appropriate, on the same basis as would be required if the Company had directly disposed of the related assets or liabilities.
F-10
| 3.2 | Foreign currencies |
Transactions in foreign currencies are translated into the functional currency of the Company at exchange rates at the date of the transactions. Monetary assets and liabilities denominated in foreign currencies at the end of the reporting period are translated into the functional currency at the exchange rate on that date. The foreign currency gain or loss on monetary items is the difference between amortized cost in the functional currency at the beginning of the year, adjusted for effective interest and payments during the year, and the amortized cost in foreign currency translated at the exchange rate at the end of the year.
Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are translated to the functional currency at the exchange rate at the date that the fair value was determined. Non-monetary items in a foreign currency that are measured in terms of historical cost are translated using the exchange rate at the date of the transaction. Foreign currency differences arising from translation are recognized in profit or loss.
| 3.3 | Financial instruments |
Financial assets
| (i) | Classification |
The Company classifies its financial assets in the following measurement categories:
| ● | those to be measured subsequently at fair value through profit or loss, and |
| ● | those to be measured at amortized cost. |
The classification depends on the entity’s business model for managing the financial assets and the contractual terms of the cash flows.
For assets measured at fair value, gains and losses will be recorded in profit or loss.
The Company reclassifies debt instruments when and only when its business model for managing those assets changes.
| (ii) | Recognition and derecognition |
Regular way purchases and sales of financial assets are recognized on trade-date, the date on which the Company commits to purchase or sell the asset. Financial assets are derecognized when the rights to receive cash flows from the financial assets have expired or have been transferred and the Company has transferred substantially all the risks and rewards of ownership.
F-11
| (iii) | Measurement |
At initial recognition, the Company measures a financial asset at its fair value plus, in the case of a financial assets not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value through profit or loss are expensed in profit or loss.
The subsequent measurement of financial assets depends on their classification as follows:
Financial assets at amortized cost (debt instruments)
Financial assets at amortized cost are subsequently measured using the effective interest method and are subject to impairment. Gains and losses are recognized in the statement of profit or loss when the asset is derecognized, modified or impaired.
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss are carried in the statement of financial position at fair value with net changes in fair value recognized in the statement of profit or loss. This category includes derivative instruments and equity investments which the Company had not irrevocably elected to classify at fair value through other comprehensive income. Dividends on equity investments classified as financial assets at fair value through profit or loss are also recognized as other income in the statement of profit or loss when the right of payment has been established, it is probable that the economic benefits associated with the dividend will flow to the Company and the amount of the dividend can be measured reliably.
| (iv) | Derecognition of financial assets |
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognized (i.e., removed from the Company’s consolidated statement of financial position) when:
| ● | the rights to receive cash flows from the asset have expired; or |
| ● | the Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a “pass-through” arrangement; and either (a) the Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset. |
When the Company has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if, and to what extent, it has retained the risk and rewards of ownership of the asset. When it has neither transferred nor retained substantially all the risks and rewards of the asset nor transferred control of the asset, the Company continues to recognize the transferred asset to the extent of the Company’s continuing involvement. In that case, the Company also recognizes an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Company has retained. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Company could be required to repay.
F-12
| (v) | Impairment |
The Company assesses on a forward-looking basis the expected credit losses associated with its debt instruments carried at amortized cost. The impairment methodology applied depends on whether there has been a significant increase in credit risk.
For other receivables and loan receivables, a general approach is applied.
Financial liabilities
| (i) | Initial recognition and measurement |
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate.
All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.
The Company’s financial liabilities include accounts and other payables and lease liabilities.
| (ii) | Subsequent measurement |
The subsequent measurement of financial liabilities depends on their classification as follows:
Financial liabilities at amortized cost (loans and borrowings)
After initial recognition, accounts and other payables and lease liabilities are subsequently measured at amortized cost, using the effective interest rate method unless the effect of discounting would be immaterial, in which case they are stated at cost. Gains and losses are recognized in the statement of profit or loss when the liabilities are derecognized as well as through the effective interest rate amortization process. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the effective interest rate. The effective interest rate amortization is included in finance costs in the statements of profit or loss.
| (iii) | Derecognition of financial liabilities |
A financial liability is derecognized when the obligation under the liability is discharged or cancelled, or expires.
When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and a recognition of a new liability, and the difference between the respective carrying amounts is recognized in the statement of profit or loss.
Offsetting
Financial assets and financial liabilities are off-set and the net amount presented in the statement of financial position when, and only when, the Company currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realize the asset and settle the liability simultaneously.
| 3.4 | Impairment |
| (i) | Non-derivative financial assets |
The Company recognizes loss allowances for expected credit losses (“ECL”) on financial assets measured at amortized cost.
F-13
General approach
The Company applies the general approach to provide for ECL on all other financial instruments. Under the general approach, the loss allowance is measured at an amount equal to 12-month ECLs at initial recognition.
At each reporting date, the Company assesses whether the credit risk of a financial instrument has increased significantly since initial recognition. When credit risk has increased significantly since initial recognition, loss allowance is measured at an amount equal to lifetime ECL.
When determining whether the credit risk of financial assets have increased significantly since initial recognition and when estimating ECL, the Company considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the Company’s historical experience and informed credit assessment that includes forward-looking information.
Measurement of ECLs
The Company decided to assess the ECL of the financial asset at amortized cost based on the discounted product of exposure at default (‘EAD’), probability of default (‘PD’) and loss given default (‘LGD’) as defined below:
| ● | EAD is based on the other receivable amounts that the Company expects to be owed at the time of default. This represents the carrying value of the other receivable. |
| ● | PD represents the likelihood of a buyer defaulting on its financial obligation, either over the next 12 months or over the remaining lifetime of the obligation. |
| ● | LGD represents the Company’s expectation of the extent of loss on a defaulted exposure. LGD is expressed as a percentage loss per unit of exposure at the time of default. |
The ECL is computed by multiplying EAD, PD, LGD for each category. The PD and LGD are developed by utilizing historical default studies and publicly available data.
Credit-impaired financial assets
At each reporting date, the Company assesses whether financial assets carried at amortized cost are credit-impaired. A financial asset is ‘credit-impaired’ when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred.
Evidence that a financial asset is credit-impaired includes the following observable data:
| ● | significant financial difficulty of the borrower or issuer; |
| ● | a breach of contract such as a default after negotiation; |
| ● | the restructuring of a loan or advance by the Company on terms that the Company would not consider otherwise; or |
| ● | it is probable that the borrower will enter bankruptcy or other financial reorganization. |
Presentation of allowance for ECLs in the statement of financial position
Loss allowances for financial assets measured at amortized cost are deducted from the gross carrying amount of these assets.
F-14
Write-off
The gross carrying amount of a financial asset is written off (either partially or in full) to the extent that there is no realistic prospect of recovery. This is generally the case when the Company determines that the debtor does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject to the write-off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Company’s procedures for recovery of amounts due.
| (ii) | Non-financial assets |
The carrying amounts of the Company’s non-financial assets are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. An impairment loss is recognized if the carrying amount of an asset or its related cash-generating unit (CGU) exceeds its estimated recoverable amount.
The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU. For the purpose of impairment testing, assets that cannot be tested individually are combined together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or CGUs. Impairment losses are recognized in profit or loss.
Impairment losses recognized in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.
| 3.5 | Plant and equipment |
Plant and equipment are stated at cost less accumulated depreciation and any accumulated impairment losses. The cost of an item of property and equipment comprises its purchase price and any directly attributable costs of bringing the asset to its working condition and location for its intended use.
Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of any component accounted for a separate asset is derecognized when replaced. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.
Depreciation is calculated using the straight-line method to allocate their cost, net of their residual values, over their estimated useful lives. The principal annual rates used for this purpose are as follows:
| ● | Computer and equipment |
| ● | Motor vehicles |
Depreciation methods, useful lives and residual values are reviewed at the end of each reporting period and adjusted if appropriate.
An item of plant and equipment including any significant part initially recognized is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss on disposal or retirement recognized in the statement of profit or loss in the year the asset is derecognized is the difference between the net sales proceeds and the carrying amount of the relevant asset.
| 3.6 | Leases |
At inception of a contract, the Company assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
| (i) | As a lessee |
At commencement or on modification of a contract that contains a lease component, the Company allocates the consideration in the contract to each lease component on the basis of its relative stand-alone prices. However, for the leases of property the Company has elected not to separate non-lease components and account for the lease and non-lease components as a single lease component.
F-15
The Company recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease term, unless the lease transfers ownership of the underlying asset to the Company by the end of the lease term or the cost of the right-of-use asset reflects that the Company will exercise a purchase option. In that case the right-of-use asset will be depreciated over the useful life of the underlying asset, which is determined on the same basis as those of property and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company’s incremental borrowing rate. Generally, the Company uses its incremental borrowing rate as the discount rate.
The Company determines its incremental borrowing rate by obtaining interest rates from various external financing sources and makes certain adjustments to reflect the terms of the lease and type of the asset leased.
Lease payments included in the measurement of the lease liability comprise the following:
| ● | fixed payments, including in-substance fixed payments; |
| ● | variable lease payments that depend on an index or a rate, initially measured using the index or rate as of the commencement date; |
| ● | amounts expected to be payable under a residual value guarantee; and |
| ● | the exercise price under a purchase option that the Company is reasonably certain to exercise, lease payments in an optional renewal period if the Company is reasonably certain to exercise an extension option, and penalties for early termination of a lease unless the Company is reasonably certain not to terminate early. |
The lease liability is measured at amortized cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the Company’s estimate of the amount expected to be payable under a residual value guarantee, if the Company changes its assessment of whether it will exercise a purchase, extension or termination option or if there is a revised in-substance fixed lease payment.
When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
Short-term leases and leases of low-value assets
The Company has elected not to recognize right-of-use assets and lease liabilities for leases of low-value assets and short-term leases. The Company recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term.
F-16
| 3.7 | Investment in futures contract at market value |
The Company holds and invests in futures contract for the purposes of trading in the ordinary course of the Company’s digital assets business.
A futures contract is initially recognized at its fair value on the date the contract is entered into and is subsequently carried at its fair value. The futures contracts are generally placed on the third-party exchanges institution to earn from the changes in the fair value over the period. The changes in fair value of futures will be recognized as fair value change of future contracts in the consolidated statements of profit or loss.
| 3.8 | Digital assets |
Digital assets are held mainly for the purposes of trading in the ordinary course of the Company’s digital assets trading business in the OTC market.
Digital assets are held mainly for the purposes of both trading for another token and entering an option contract in which such digital tokens are provided as margin in the ordinary course of the Company’s digital assets business.
Digital assets held in the counterparty’s digital asset wallets primarily comprise digital assets that are prefunded by and traded with, but not yet withdrawn by counterparties (or “customers”) under Digital Asset Trading Agreements (“DATA”).
Digital assets obtained from counterparties are recorded as digital assets of the Company (see below for the measurement) which can be used in the Company’s ordinary business, with a corresponding liability recorded due to the counterparties (under “Digital assets payables” measured at fair value through profit or loss in current liabilities). Upon maturity of the financing arrangements, the Company transfers the digital assets at a rate stipulated in the DATA to the counterparty’s wallet and the related digital assets and liability due to the counterparty is derecognized.
The Company’s digital asset portfolio mainly comprises cryptocurrencies and since the Company actively trades cryptocurrencies, purchasing them with a view to their resale in the near future, and generating a profit from fluctuations in the price, the Company applies the guidance in IAS 2 for commodity broker-traders and measures the digital assets at fair value less costs to sell. The Company considers there are no significant “costs to sell” digital assets and hence measurement of digital assets is based on their fair values with changes in fair values recognized in profit or loss in the period of the changes.
See note 22 for estimation of fair value in respect of the digital assets and digital assets payables.
| 3.9 | Cash and cash equivalents |
For the purpose of the consolidated statements of cash flows, cash and cash equivalents comprise cash on hand and demand deposits, and short term highly liquid investments that are readily convertible into known amounts of cash, are subject to an insignificant risk of changes in value.
| 3.10 | Share-based payments |
The Company operates a share-based payment scheme (in the form of warrant shares and share options) for the purpose of providing incentives and rewards to eligible participants who contribute to the success of the Company’s operations. Under such schemes, consultants providing similar services with employees and services providers of the Company may receive equity instruments as remuneration for their services rendered (“equity-settled transactions”). Besides, the Company also gives investors the right, but not the obligation, to buy the Company shares on or by a certain date, at a specified price under the scheme (in the form of written call option).
F-17
Share purchase warrants and share options
The fair value of the share purchase warrants and share options granted to employees and consultants providing similar services in exchange for the grant of the warrants is recognized as an expense with a corresponding increase in share-based warrants reserve. The total amount to be expensed is determined by reference to the fair value of the share purchase warrants granted. The total amount to be expensed is determined by reference to the fair value of the share options granted:
| ● | including any market performance conditions (e.g. the Company’s share price), |
| ● | excluding the impact of any service and non-market performance vesting conditions (e.g. profitability, sales growth targets and remaining an employee of the entity over a specified time period), and |
| ● | including the impact of any non-vesting conditions (e.g. the requirement for employees to save or hold shares for a specified period of time). |
The total expense is recognized over the vesting period, which is the period over which all the specified vesting conditions are to be satisfied. At the end of each period, the entity revises its estimates of the number of warrants that are expected to vest based on the non-market vesting and service conditions. The Company will recognize the impact of the revision of warrant shares to original estimates, if any, in profit or loss, with a corresponding adjustment to equity.
The warrant reserve presents the proceeds from issuance of warrants, net of issue costs. Warrant reserve is non-distributable and will be transferred to additional paid-in capital account upon exercise of warrants.
Warrants liabilities
The Company determined that these warrants are puttable for cash upon a fundamental transaction at the option of the holder and as such required classification as a liability. The outstanding warrants are recognized as a warrant liability on the statement of financial position and are measured at their inception date fair value and subsequently re-measured at each reporting period with changes being recorded as component of other income (loss) in profit or loss.
| 3.11 | Share capital |
Ordinary shares
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares are recognized as a deduction from equity, net of any tax effects.
| 3.12 | Repurchase of shares |
Where any Group company purchases the Company’s equity share capital (treasury shares), the consideration paid, including any directly attributable incremental cost (net of income taxes) is recorded as a deduction from equity attributable to the Company’s equity holders as a treasury share reserve until the shares are cancelled, reissued or disposed of. When such shares are subsequently sold or reissued, any consideration received, net of any directly attributable incremental transaction costs and the related income tax effect, the nominal amount is reversed from the treasury share reserve, with any remaining difference to the total transaction value being recognized in additional paid-in capital.
F-18
| 3.13 | Earnings (Loss) per share |
The Company presents basic and diluted earnings per share data for its ordinary shares. Basic earnings per share is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted-average number of ordinary shares outstanding during the year, adjusted for own shares held. Diluted earnings per share is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted-average number of ordinary shares outstanding, adjusted for own shares held, for the effects of all dilutive potential ordinary shares, which comprise share options granted to employees and share purchase warrants granted to consultants. Diluted earnings per share considers the impact of potentially dilutive securities except in periods in which there is a loss because the inclusion of the potential common shares would have an anti-dilutive effect.
| 3.14 | Additional paid-in capital |
Amount subscribed for common stock in excess of nominal value.
| 3.15 | Digital assets payables |
Digital assets payables comprise the digital assets obtained from customers, including non-controlling shareholders and third parties under DATA as mentioned per above.
Digital assets obtained from customers are initially recognized at fair value, and are subsequently measured at fair value, which align with the fact that digital asset inventories are non-financial assets measured at fair value less costs to sell.
Digital assets payables are removed from the consolidated statement of financial position when the obligation specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of the liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognized in profit or loss.
Digital assets payables are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the reporting period.
| 3.16 | Income |
Proprietary trading in digital assets and traditional financial product
The Company participated in proprietary trading in digital assets and traditional financial product and earned profits, at a point in time, when executing buy and sell orders on various exchanges.
The Company presents trading income from digital assets trading and listed securities business that primarily represent trading margin arising from trading various digital assets and listed securities and net gain or loss from remeasurement of digital assets and listed securities to the extent it is not offset by remeasurement of liabilities due to customers arising from DATA. The Company is exposed to net trading gains or losses from holding digital assets and listed securities for trading up to the point when a trade (to buy or sell digital assets and listed securities) with customer is concluded with fixed terms of trade with respect to the type, unit and price of digital assets.
| 3.17 | Cost of income |
Cost of income mainly comprise the commission expenses paid to the trader, technical support fee and transaction fee.
F-19
| 3.18 | Selling and promotion |
Selling and promotion expenses comprise of marketing and promotional expenditures.
| 3.19 | General and administrative |
General and administrative costs mainly comprise of legal fees, professional fees, consultancy fees, staff costs and depreciation.
| 3.20 | Finance costs |
Finance costs comprise amortization of debt issuance cost and interest of lease liabilities.
| 3.21 | Interest income |
Interest income is presented as finance income where it is earned from financial institutions that are held for cash management purposes.
Interest income is calculated by applying the effective interest rate to the gross carrying amount of a financial asset except for financial assets that subsequently become credit-impaired. For credit-impaired financial assets the effective interest rate is applied to the net carrying amount of the financial asset (after deduction of the loss allowance).
| 3.22 | Income tax |
Income tax expense comprises current and deferred tax. Current tax and deferred tax are recognized in profit or loss except to the extent that it relates to a business combination, or items recognized directly in equity or in comprehensive loss.
Current tax is the expected tax payable or receivable on the taxable income or loss for the period, using tax rates enacted or substantively enacted at the reporting date.
Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognized for the following temporary differences: the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss, and differences relating to investments in subsidiaries to the extent that the Company is able to control the timing of the reversal of the temporary difference and it is probable that they will not reverse in the foreseeable future.
The measurement of deferred taxes reflects the tax consequences that would follow the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities. Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realized simultaneously.
A deferred tax asset is recognized for unused tax losses, tax credits and deductible temporary differences, to the extent that it is probable that future taxable profits will be available against which they can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.
F-20
In determining the amount of current and deferred tax, the Company takes into account the impact of uncertain tax positions and whether additional taxes and interest may be due. New information may become available that causes the Company to change its judgement regarding the adequacy of existing tax liabilities; such changes to tax liabilities will impact tax expense in the period that such a determination is made.
| 3.23 | Employee benefits |
| (i) | Short-term employee benefits |
Short-term employee benefits are expensed as the related service is provided. A liability is recognized for the amount expected to be paid if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.
| (ii) | Defined contribution plans |
Obligations for contributions to defined contribution plans are expensed as the related service is provided. Prepaid contributions are recognized as an asset to the extent that a cash refund or a reduction in future payments is available.
| 3.24 | Operating segment and geographic information |
An operating segment is a component of an entity:
| ● | that engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses relating to transactions with other components of the same entity); |
| ● | whose operating results are regularly reviewed by the entity’s chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance; and |
| ● | for which discrete financial information is available. |
The Company has identified
| ● | trading of proprietary digital assets and derivative contracts. |
The assessment of reportable segments is based upon having similar economic characteristics and if the operating segments are similar in the following respects:
| ● | the nature of the products and services; |
| ● | the nature of the production processes; |
| ● | the type or class of customer for their products and services; |
| ● | the methods used to distribute their products or provide their services; and |
| ● | if applicable, the nature of the regulatory environment, for example, banking, insurance, or public utilities. |
Reportable segments are distinguished due to their differences in their operations and economics. They are managed separately because they require different business, technological, and marketing strategies.
The Company’s CEO is considered to be the Company’s Chief Operating Decision Maker (“CODM”). The CODM reviews non-financial information, for purposes of allocating resources. Based on the internal financial information provided to the CODM, the Company has determined that the identified operating segment as
F-21
The CODM evaluates the assets and liabilities despite disaggregated financial information being available, the accounting policies used in the determination of the segment amounts are the same as those used in the preparation of the Company’s financial statements.
| 3.25 | Related parties |
A related party is a person or entity that is related to the Company.
| (A) | A person or a close member of that person’s family is related to the Company if that person: |
| (i) | has control or joint control over the Company; |
| (ii) | has significant influence over the Company; or |
| (iii) | is a member of the key management personnel of the Company or of a parent of the Company. |
| (B) | An entity is related to the Company if any of the following conditions applies: |
| (i) | The entity and the Company are members of the same group (which means that each parent, subsidiary and fellow subsidiary is related to the others); |
| (ii) | One entity is an associate or joint venture of the other entity (or an associate or joint venture of a member of a group of which the other entity is a member); |
| (iii) | Both entities are joint ventures of the same third party; |
| (iv) | One entity is a joint venture of a third entity and the other entity is an associate of the third entity; |
| (v) | The entity is a post-employment benefit plan for the benefit of employees of either the Group or an entity related to the Company. If the Company is itself such a plan, the sponsoring employers are also related to the Company; |
| (vi) | The entity is controlled or jointly controlled by a person identified in (A); |
| (vii) | A person identified in (A)(i) has significant influence over the entity or is a member of the key management personnel of the entity (or of a parent of the entity); or |
| (viii) | The entity, or any member of a group of which it is a part, provides key management personnel services to the Company or to a parent of the Group. |
| 3.26 | Provisions |
Provisions are recognized when the Company has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated. Provisions are not recognized for future operating losses.
Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognized even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small.
F-22
Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognized as interest expense.
| 3.27 | New standards and interpretations not adopted |
At the date of authorization of these financial statements, the Company has not adopted the new and revised IFRS and amendments to IFRS that have been issued but are not yet effective to them. The Company does not anticipate that the adoption of these new and revised IFRS pronouncements in future periods will have a material impact on the Company’s financial statements in the period of their initial adoption.
The Company has not applied the new IFRSs that have been issued but are not yet effective. The application of those new IFRSs will not have material impact on the financial statements of the Company.
4. Plant and equipment, net
| Computer and equipment | Motor vehicle | Total | ||||||||||
| US$ | US$ | US$ | ||||||||||
| Cost | ||||||||||||
| As of April 1, 2024 | ||||||||||||
| Additions | ||||||||||||
| Exchange realignment | ||||||||||||
| As of March 31, 2025 | ||||||||||||
| Exchange realignment | ( | ) | ( | ) | ||||||||
| As of March 31, 2026 | ||||||||||||
| Accumulated depreciation | ||||||||||||
| As of April 1, 2024 | ||||||||||||
| Depreciation for the year | ||||||||||||
| Exchange realignment | ||||||||||||
| As of March 31, 2025 | ||||||||||||
| Depreciation for the year | ||||||||||||
| Exchange realignment | ( | ) | ( | ) | ||||||||
| As of March 31, 2026 | ||||||||||||
| Net carrying amount | ||||||||||||
| As of March 31, 2026 | ||||||||||||
| As of March 31, 2025 | ||||||||||||
F-23
5. Right-of-use assets and lease liabilities
| (a) | Right-of-use assets |
The Company has entered into leases of office premises, which are used for the Company’s operations. Leases of buildings have lease terms of years.
| 2026 | 2025 | |||||||
| US$ | US$ | |||||||
| Office premises | ||||||||
| Cost: | ||||||||
| At beginning of year | ||||||||
| Addition during the year | ||||||||
| Early termination of lease | ( | ) | ( | ) | ||||
| Exchange realignment | ( | ) | ||||||
| At end of year | ||||||||
| Accumulated depreciation: | ||||||||
| At beginning of year | ||||||||
| Early termination of lease | ( | ) | ( | ) | ||||
| Depreciation for the year | ||||||||
| Exchange realignment | ( | ) | ||||||
| At end of year | ||||||||
| Net carrying amount | ||||||||
| (b) | Lease liabilities |
Set out below are the carrying amounts of lease liabilities and the movements during the years:
| 2026 | 2025 | |||||||
| US$ | US$ | |||||||
| At beginning of year | ||||||||
| Additions to lease liabilities | ||||||||
| Early termination of lease | ( | ) | ( | ) | ||||
| Interest charged | ||||||||
| Payment made | ( | ) | ( | ) | ||||
| Exchange realignment | ( | ) | ||||||
| At end of year | ||||||||
Represented by:
| 2026 | 2025 | |||||||
| US$ | US$ | |||||||
| Current liabilities | ||||||||
| Non-current liabilities | ||||||||
| Total | ||||||||
The effective interest rate applied to the lease liabilities recognized in the statement of financial position was
F-24
Reconciliation of liabilities arising from financing activities
| Lease liabilities | ||||
| US$ | ||||
| Balance as of April 1, 2024 | ||||
| Changes from financing cash flow | ||||
| Lease payment | ( | ) | ||
| Interest paid | ||||
| Total changes from financing cash flow | ( | ) | ||
| Other changes | ||||
| Addition to lease liabilities | ||||
| Early termination of a lease | ( | ) | ||
| Exchange realignments | ||||
| Total other changes | ||||
| Balance as of March 31, 2025 | ||||
| Changes from financing cash flow | ||||
| Lease payment | ( | ) | ||
| Interest paid | ||||
| Total changes from financing cash flow | ( | ) | ||
| Other changes | ||||
| Addition to lease liabilities | ||||
| Early termination of a lease | ( | ) | ||
| Exchange realignments | ( | ) | ||
| Total other changes | ||||
| Balance as of March 31, 2026 | ||||
The maturity analysis of the Company’s non-cancellable lease obligations as of March 31, 2026 is as follows:
| Lease liabilities | ||||
| USD | ||||
| Year ending March 31, 2027 | $ | |||
| Year ending March 31, 2028 | ||||
| Total undiscounted lease obligations | ||||
| Less: imputed interest | ( | ) | ||
Lease liabilities recognized in the consolidated statement of financial position | $ | |||
Company’s non-cancellable lease obligations as of March 31, 2025 is as follows:
| Lease liabilities | ||||
| USD | ||||
| Year ending March 31, 2026 | $ | |||
| Year ending March 31, 2027 | ||||
| Total undiscounted lease obligations | ||||
| Less: imputed interest | ( | ) | ||
| Lease liabilities recognized in the consolidated statement of financial position | $ | |||
F-25
6. Financial assets at fair value through profit or loss
The financial assets at fair value through profit or loss held on third party exchange institutions are measured at fair value.
| 2026 | 2025 | |||||||
| US$ | US$ | |||||||
| Listed equity securities | ||||||||
| Unlisted equity securities (Note (a)) | ||||||||
| Listed futures contracts | ||||||||
| Investments in funds | ||||||||
| Less: impairment on unlisted equity securities | ( | ) | ||||||
Note:
| (a) | On August 8, 2023, the Company entered into the share purchase agreement to acquired
On December 22, 2023, the Company entered the sales and purchase agreement to acquire
On June 11, 2024, the Company entered the sales and purchase agreement to acquire |
| (b) | They represented balance of financial assets at fair value through profit or loss attributable to the Company held in the investment account of which approximately $ |
The fair value of the investment in unlisted equity securities was measured by using significant unobservable input. By reference to the latest transaction of the unlisted equity securities, impairment loss of US$
On June 11, 2025, the Company entered into an agreement to dispose of its
On September 8, 2025, the Company entered into an agreement to dispose of its
Movement of financial assets at fair value through profit or loss were shown below:
| 2026 | 2025 | |||||||
| US$ | US$ | |||||||
| At the beginning of financial years | ||||||||
| Additions | ||||||||
| Disposal | ( | ) | ( | ) | ||||
| Impairment loss recognized in profit or loss | ( | ) | ||||||
| Fair value loss recognized in profit or loss | ( | ) | ( | ) | ||||
| At the end of financial year | ||||||||
F-26
7. Digital assets
| 2026 | 2025 | |||||||
| US$ | US$ | |||||||
| Digital assets held on exchange institutions | ||||||||
| Digital assets receivable | ||||||||
The digital assets held on third party exchange institutions are measured at fair value. They represented balance of digital assets attributable to the Company held in shared wallets of the third-party exchanges of which approximately $
8. Prepayments and other receivables
| 2026 | 2025 | |||||||
| US$ | US$ | |||||||
| Prepaid insurance | ||||||||
| Prepaid Nasdaq fee | ||||||||
| Performance fee receivables | ||||||||
| Receivable from broker | ||||||||
| Management fee receivable | ||||||||
| Interest receivables | ||||||||
| Others | ||||||||
| Total | ||||||||
| Allowance for expected credit loss | ||||||||
| Prepayments and other receivables after allowance for expected credit loss | ||||||||
Note:
| (a) | On March 28, 2023, the Company’s subsidiary, Metalpha, entered an investment agreement with Bsset Technology Limited (“Bsset”). According to the investment agreement, Metalpha transferred approximately US$ |
Movements of allowance for expected credit loss as followings:
| 2026 | 2025 | |||||||
| US$ | US$ | |||||||
| At the beginning of financial year | ||||||||
| Written-off | ( | ) | ||||||
| At the end of financial year | ||||||||
F-27
9. Cash and cash equivalents
| 2026 | 2025 | |||||||
| US$ | US$ | |||||||
| Bank balances | ||||||||
As of March 31, 2026 and 2025, the cash and cash equivalents of US$
10. Equity
| a. | Share capital and additional paid-in capital |
The addition of share capital and additional paid-in capital represented:
| (i) | The issuance of | |
| (ii) | The issuance of | |
| (iii) | The issuance of | |
| (iv) | The issuance of | |
| (v) | The issuance of | |
| (vi) | The issuance of | |
| (vii) | The issuance of | |
| (viii) | The issuance of | |
| (ix) | The issuance of | |
| (x) | The issuance of | |
| (xi) | The issuance of | |
| (xii) | The issuance of | |
| (xiii) | The issuance of | |
| (xiv) | The issuance of |
| b. | Warrants reserves |
Warrants are issued to management team and consultants on trading of digital assets as an incentive to boost overall performance of the company.
A continuity schedule of outstanding share purchase warrants and fair value charged to profit or loss are as follows:
Number of outstanding | ||||
| At April 1, 2024 | ||||
| Early termination | ( | ) | ||
| At March 31, 2025, April 1, 2025 and March 31, 2026 | ||||
On December 23, 2023, the Company issued
On September 26, 2024, the Company entered into a deed of termination with Natural Selection Capital Holding Limited which wholly owned by Mr. Bingzhong Wang, the director of the Company.
The fair value of the warrants was calculated at the respective grant date. The fair value of the warrants granted during the year ended March 31, 2024 was US$
F-28
The Company’s share purchase warrants are valued by independent professional qualified valuer by using binomial option pricing models. The inputs into the model were as follows:
| As of March 31, 2026 | As of March 31, 2025 | |||||||
| Risk-free interest rate | % | % | ||||||
| Expected life of warrants | ||||||||
| Volatility | % | % | ||||||
| Weighted average fair value per warrant (US$) | ||||||||
| Risk-free interest rate | 3.8 | % | 3.8 | |||||
As of March 31, 2025 and 2026, the Company had share purchase warrants outstanding as follows:
| Warrants outstanding as of March 31, 2025 | Termination | Warrants outstanding as of March 31, 2026 | Fair value at issue date | Fair value charged for current year | Exercise price | Weighted average remaining life | ||||||||||||||||||||||
| Expiry Date | US$ | US$ | US$ | (years) | ||||||||||||||||||||||||
| October 27, 2026 | ||||||||||||||||||||||||||||
| October 29, 2026 | ||||||||||||||||||||||||||||
| May 10, 2027 | ||||||||||||||||||||||||||||
| May 26, 2027 | ||||||||||||||||||||||||||||
| July 22, 2027 | ||||||||||||||||||||||||||||
| July 25, 2027 | ||||||||||||||||||||||||||||
| July 26, 2027 | ||||||||||||||||||||||||||||
| July 27, 2027 | ||||||||||||||||||||||||||||
| July 28, 2027 | ||||||||||||||||||||||||||||
| November 28, 2027 | ||||||||||||||||||||||||||||
| November 28, 2027 | ||||||||||||||||||||||||||||
| November 28, 2027 | ||||||||||||||||||||||||||||
| November 28, 2027 | ||||||||||||||||||||||||||||
| November 28, 2032 | ||||||||||||||||||||||||||||
| November 28, 2032 | ||||||||||||||||||||||||||||
| November 28, 2032 | ||||||||||||||||||||||||||||
| November 28, 2032 | ||||||||||||||||||||||||||||
| November 28, 2032 | ||||||||||||||||||||||||||||
| November 28, 2032 | ||||||||||||||||||||||||||||
| December 23, 2028 | ||||||||||||||||||||||||||||
| Total | ||||||||||||||||||||||||||||
Movement of respective share purchase warrants was shown below:
| Share purchase warrants | ||||||||
| 2026 | 2025 | |||||||
| US$ | US$ | |||||||
| At the beginning of financial year | ||||||||
| Additions and recognized in profit or loss | ||||||||
| Adjustment of warrants terminated | ( | ) | ||||||
| At the end of financial year | ||||||||
F-29
| (c) | Share award reserve |
On June 30, 2022, the Company implemented its 2022 Performance Incentive Plan (“Plan”) to foster the success of the Company and to increase shareholder value by providing an additional means, through the grant of awards to attract, motivate, retain and reward selected employees and other eligible persons, and to enhance the alignment of the interests of such selected participants with the interests of the Company’s shareholders.
On November 19, 2024, the Company implemented its 2024 Performance Incentive Plan (“2024 Plan”) to foster the success of the Company and to increase shareholder value by providing an additional means, through the grant of awards to attract, motivate, retain and reward selected employees and other eligible persons, and to enhance the alignment of the interests of such selected participants with the interests of the Company’s shareholders. Under the 2024 Plan, an aggregate of
| Number of share awards grant | ||||||||
| 2026 | 2025 | |||||||
| At the beginning of financial year | ||||||||
| Grant during the year | ||||||||
| At the end of financial year | ||||||||
The fair value of the share awards was calculated based on the market price of the Company’s shares at the respective grant date. The fair value of the share awards granted during the year 2026 was US$
| (d) | Accumulated deficit |
The accumulated deficit comprises the cumulative net profit and losses for the year recognized in the consolidated statements of profit or loss.
| (e) | Accumulated other comprehensive (loss) income |
Accumulated other comprehensive (loss) income represents the foreign currency translation difference arising from the translation of the financial statements of companies within the Company from their functional currency to the Company’s presentation currency.
| (f) | Treasury shares |
On March 15, 2023, the Company repurchased
In April, 2023, the Company repurchased
In March 2026, the Company repurchased
11. Digital assets payable
| 2026 | 2025 | |||||||
| US$ | US$ | |||||||
| Digital assets payables to: | ||||||||
| Related parties | ||||||||
| Third party payables | ||||||||
| Total | ||||||||
F-30
Movement of digital assets payables was shown below:
| 2026 | 2025 | |||||||
| US$ | US$ | |||||||
| At the beginning of financial year | ||||||||
| Entered during the year | ||||||||
| Settled during the year | ( | ) | ( | ) | ||||
| Reclass to digital assets receivables | ||||||||
| Unrealized fair value gain | ( | ) | ( | ) | ||||
| At the end of financial year | ||||||||
12. Payable to customers
The deposits were the amount received from customers but not yet invested or entered into any contract, while, the Company has owned obligations to the customers.
| 2026 | 2025 | |||||||
| US$ | US$ | |||||||
| Payables to customers: | ||||||||
| Related parties | ||||||||
| Third party payables | ||||||||
| Total | ||||||||
13. Other payables
| 2026 | 2025 | |||||||
| US$ | US$ | |||||||
| Commission payables (note (a)) | ||||||||
| Other payables and accrued charges | ||||||||
| Payable to securities brokers | ||||||||
| Amount due to related company (note (b)) | ||||||||
| Consideration payables | ||||||||
| Wages payables (note (c)) | ||||||||
| Total | ||||||||
Note:
| (a) |
| (b) |
| (c) |
14. Financial liabilities at fair value through profit or loss
The financial liabilities at fair value through profit or loss held on third party exchange institutions are measured at fair value.
| 2026 | 2025 | |||||||
| US$ | US$ | |||||||
| Listed futures contracts | ||||||||
Movement of financial assets at fair value through profit or loss were shown below:
| 2026 | 2025 | |||||||
| US$ | US$ | |||||||
| At the beginning of financial years | ||||||||
| Fair value loss recognized in profit or loss | ||||||||
| At the end of financial year | ||||||||
F-31
15. Revenue
| 2026 | 2025 | 2024 | ||||||||||
| US$ | US$ | US$ | ||||||||||
| Income from proprietary trading in digital assets and traditional financial product | ||||||||||||
| Unrealized fair value change of trading of digital assets, listed securities, funds and derivative contracts (note (a)) | ||||||||||||
| Realized gain (loss) on trading of listed securities, funds and derivative contracts | ( | ) | ||||||||||
| Interest income on trading of digital assets and derivative contracts | ||||||||||||
| Services fee income | ||||||||||||
| Income from securities advising and asset management services | ||||||||||||
| Performance fee income | ||||||||||||
| Gain on disposal of financial assets at FVTPL | ||||||||||||
| Total revenue | ||||||||||||
Note
| (a) |
16. Cost of income
| 2026 | 2025 | 2024 | ||||||||||
| US$ | US$ | US$ | ||||||||||
| Trading consulting fee (note (a)) | ||||||||||||
| Technical support fees (note (b)) | ||||||||||||
| Transaction fee (note (c)) | ||||||||||||
| Total cost of income | ||||||||||||
Notes:
| (a) | |
| (b) | |
| (c) |
17. General and administrative
| 2026 | 2025 | 2024 | ||||||||||
| US$ | US$ | US$ | ||||||||||
| Professional fees | ||||||||||||
| Wages and benefits | ||||||||||||
| Director fees | ||||||||||||
| Travelling expenses | ||||||||||||
| Depreciation of plant and equipment | ||||||||||||
| Depreciation of right of use assets | ||||||||||||
| Management fee | ||||||||||||
| Meals and entertainment | ||||||||||||
| Share-based compensation (note 10(c)) | ||||||||||||
| Office expenses | ||||||||||||
| Insurance costs | ||||||||||||
| Consultancy fee | ||||||||||||
| IT expenses | ||||||||||||
| Other | ||||||||||||
| Total | ||||||||||||
F-32
18. Finance costs
| 2026 | 2025 | 2024 | ||||||||||
| US$ | US$ | US$ | ||||||||||
| Interest on: | ||||||||||||
| Notes payable | ||||||||||||
| Overdraft | ||||||||||||
| Lease liabilities | ||||||||||||
| Total finance costs | ||||||||||||
19. Other income
| 2026 | 2025 | 2024 | ||||||||||
| US$ | US$ | US$ | ||||||||||
| Interest income from financial institutions | ||||||||||||
| Unrealized gain on change in fair value of financial asset at FVTPL | ||||||||||||
| Commission fee income | ||||||||||||
| Gain on investment | ||||||||||||
| Consultancy fee income | ||||||||||||
| Gain on early termination of lease (note (a)) | ||||||||||||
| Reversal of impairment | ||||||||||||
| Sundries | ||||||||||||
| Total other income | ||||||||||||
20. Income tax expense
The Company is formed in Cayman Islands and is not subject to tax on its income or capital gains. In addition, upon payments of dividends by the Company to its shareholders, no Cayman Islands withholding tax is imposed.
The Company’s subsidiary formed in British Virgin Island is not subject to tax on its income or capital gains. In addition, upon payments of dividends by the Company to its shareholders, no British Virgin Island withholding tax is imposed.
The Company’s subsidiary formed in Hong Kong is subject to Hong Kong profits tax, which is calculated in accordance with the two-tiered profits tax rates regime. The applicable tax rate for the first HK$
| 2026 | 2025 | 2024 | ||||||||||
| US$ | US$ | US$ | ||||||||||
| Tax recognized in profit or loss | ||||||||||||
| Income tax expense | ||||||||||||
| Current tax | ||||||||||||
| Under provision of tax in prior years | ||||||||||||
| Income (loss) before income tax | ( | ) | ||||||||||
| Tax calculated at domestic tax rates applicable to respective profits (2026, 2025 and 2024: | ( | ) | ||||||||||
| Effect of non-taxable income | ( | ) | ( | ) | ( | ) | ||||||
| Effect of expenses not deductible for tax purposes | ||||||||||||
| Utilization of tax losses previously not recognized | ( | ) | ( | ) | ||||||||
| Under provision of tax in prior year | ||||||||||||
| Tax effect of tax losses not recognized | ||||||||||||
| Income tax expense | ||||||||||||
As at March 31, 2026, the Group has estimated unrecognized tax losses of approximately US$
F-33
21. Operating segment
Operating segments are identified on the basis of internal reports about components of the Company that are regularly reviewed by the Chief Operating Decision Maker (“CODM”) for the purpose of resource allocation and performance assessment.
Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis.
As of and for the year ended March 31, 2026, 2025 and 2024
During the year ended March 31, 2026, 2025 and 2024, the Management determined that the trading of proprietary digital assets and derivative contracts segment is the only operating segment.
The trading of proprietary digital assets and derivative contracts segment’s results is equivalent to the Company’s results from continuing operation which are disclosed in the statement of profit or loss and comprehensive loss.
Geographical information
Income
For the years ended March 31, 2026, 2025 and 2024, the income from continuing operation of the Company is mainly generated from Hong Kong.
Non-current assets
As of March 31, 2026, 2025 and 2024, all non-current assets of the Company are based in Hong Kong.
22. Financial risk management
Exposure to credit risk, foreign currency risks, price risk, fair value and liquidity arises in the normal course of the Company’s business. The Company has formal risk management policies and guidelines that set out its overall business strategies, its tolerance of risk and general risk management philosophy and has established processes to monitor and control its exposure to such risks in a timely manner. The Company reviews its risk management processes regularly to ensure the Company’s policy guidelines are adhered to.
| (a) | Credit risk |
The Company’s maximum exposure to credit risk in the event that counterparties fail to perform their obligations in relation to each class of recognized financial assets is the carrying amounts of those assets as stated in the consolidated statements of financial position. The Company’s credit risk is primarily attributable to its loan receivables, deposits and other receivables, and cash and cash equivalents. In order to minimize credit risk, the directors of the Company have delegated a team to be responsible for the determination of credit limits, credit approvals and other monitoring procedures. In addition, the directors of the Company review the recoverable amount of each individual debt regularly to ensure that adequate impairment losses are recognized for irrecoverable debts. The credit risk on cash and cash equivalents are limited because the counterparties are banks with high credit-ratings assigned by international credit-rating agencies. In this regard, the directors of the Company consider that the Company’s credit risk is significantly reduced.
F-34
The Company has no significant concentration on credit risk, with exposure spread over a number of counterparties.
The Company considers whether there has been a significant increase in credit risk of financial assets on an ongoing basis throughout each reporting period by comparing the risk of a default occurring as of the reporting date with the risk of default as of the date of initial recognition. It considers available reasonable and supportive forwarding-looking information. Especially the following information is used:
| ● | internal credit rating; | |
| ● | actual or expected significant adverse changes in business, financial or economic conditions that are expected to cause a significant change to the counterparties’ ability to meet its obligations; | |
| ● | actual or expected significant changes in the operating results of the counterparties; | |
| ● | significant changes in the expected performance and behavior of the counterparties, including changes in the payment status of counterparties. |
A significant increase in credit risk is presumed if a debtor is more than 30 days past due in making a contractual payment. A default on a financial asset is when the counterparty fails to make contractual payments within 90 days of when they fall due.
Financial assets are written off when there is no reasonable expectation of recovery, such as a customer failing to engage in a repayment plan with the Company. The Company normally categorizes a loan or receivable for write off when a debtor fails to make contractual payments greater than 365 days past due. Where loans or receivables have been written off, the Company, if practicable and economical, continues to engage in enforcement activity to attempt to recover the receivable due.
The Company uses two categories for non-trade receivables which reflect their credit risk and how the loan loss provision is determined for each of the categories. In calculating the expected credit loss rates, the Company considers historical loss rates for each category and adjusts for forward looking data.
| Category | Definition | Loss provision | ||
| Performing | ||||
| Non-performing |
General approach
ECLs are recognized in two stages. For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12 months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).
At each reporting date, the Company assesses whether the credit risk on a financial instrument has increased significantly since initial recognition. When making the assessment, the Company compares the risk of a default occurring on the financial instrument as of the reporting date with the risk of a default occurring on the financial instrument as of the date of initial recognition and considers reasonable and supportable information that is available without undue cost or effort, including historical and forward-looking information.
The Company considers a financial asset in default when contractual payments are 90 days past due. However, in certain cases, the Company may also consider a financial asset to be in default when internal or external information indicates that the Company is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the Company. A financial asset is written off when there is no reasonable expectation of recovering the contractual cash flows.
F-35
Financial assets at amortized cost are subject to impairment under the general approach and they are classified within the following stages for measurement of ECLs.
Stage 1 – Financial instruments for which credit risk has not increased significantly since initial recognition and for which the loss allowance is measured at an amount equal to 12-month ECLs
Stage 2 – Financial instruments for which credit risk has increased significantly since initial recognition but that are not credit-impaired financial assets and for which the loss allowance is measured at an amount equal to lifetime ECLs
Stage 3 – Financial assets that are credit-impaired at the reporting date (but that are not purchased or originated credit-impaired) and for which the loss allowance is measured at an amount equal to lifetime ECLs
| (b) | Foreign currency risk |
The Company has minimal exposure to foreign currency risk as most of its business transactions, assets and liabilities are principally denominated in the functional currencies of the Company entities.
As Hong Kong dollar is pegged to United States dollar, the Company considers the risk of movements in exchange rates between Hong Kong dollars and United States dollars to be insignificant.
The Company currently does not have a foreign currency hedging policy in respect of foreign currency transactions, assets and liabilities. The Company will monitor its foreign currency exposure closely and will consider hedging significant foreign currency exposure should the need arise.
| (c) | Price risk |
Exposure
Digital assets that the Company deals with in its trading activities are digital assets such as Bitcoin (“BTC”) and Ethereum (“ETH”) which can be traded in a number of public exchanges.
Company’s exposure to price risk arises from digital assets and digital assets payables which are both measured on fair value basis. In particular, the Company’s operating result may depend upon the market price of BTC and ETH, as well as other digital assets. Digital asset prices have fluctuated significantly from time to time. There is no assurance that digital asset prices will reflect historical trends.
The price risk of digital assets arising from trading of digital assets business is partially offset by remeasurement of digital assets payables representing the obligations to deliver digital assets held by the Company in the customers’ accounts to the customers under the respective trading and lending arrangements with the Company.
| (d) | Risks associated with the storage and protection of digital assets
|
The Company primarily stored its digital assets in cryptocurrency exchanges to facilitate its trading in digital assets business.
| (e) | Investment risk related to trading of digital assets |
The Company implemented quantitative trading strategies for its investment in digital assets. The investment performance primarily relies on market liquidity and strategies effectiveness and reliability of the system. The Company’s strategies have the potential to generate profits over time, but they are also vulnerable to significant losses during unforeseen and extreme catastrophes. Furthermore, trading in this asset carries inherent risks, such as defective algorithms, hacking, liquidation resulting from significant market fluctuations, and counterparty risks. The Company closely monitors market liquidity using a systematic alerting process. However, during extreme market conditions, there is a possibility of experiencing significant mark-to-market losses.
The Company possesses a unique risk management system that continuously examines the success of the strategies and employs data analytics to assess and adjust them. The Company continuously monitors the trading systems, to detect any abnormalities.
F-36
| (f) | Fair value |
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Company takes into account the characteristics of the asset or liability which market participants would take into account when pricing the asset or liability at the measurement date. Fair value for measurement and/or disclosure purposes in these financial statements is determined on such a basis.
In addition, for financial reporting purposes, fair value measurements are categorized into Level 1, 2 or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:
Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;
Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and
Level 3 inputs are unobservable inputs for the asset or liability.
The Company’s policy is to recognize transfers into and transfers out of any of the three levels as of the date of the event or change in circumstances that caused the transfer.
(i) Disclosures of level in fair value hierarchy:
| Fair value measurements using | ||||||||||||||||
| Description | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| US$ | US$ | US$ | US$ | |||||||||||||
| As of March 31, 2026 | ||||||||||||||||
| Digital assets | ||||||||||||||||
| Digital assets receivables | ||||||||||||||||
| Listed equity securities | ||||||||||||||||
| Listed futures contracts | ( | ) | ( | ) | ||||||||||||
| Unlisted equity securities | ||||||||||||||||
| Digital assets payable | ( | ) | ( | ) | ||||||||||||
| Digital assets payable – related party | ( | ) | ( | ) | ||||||||||||
| Payable to client | ( | ) | ( | ) | ||||||||||||
| Payable to client – related party | ( | ) | ( | ) | ||||||||||||
| Total | ( | ) | ||||||||||||||
| As of March 31, 2025 | ||||||||||||||||
| Digital assets | ||||||||||||||||
| Listed equity securities | ||||||||||||||||
| Listed futures contracts | ||||||||||||||||
| Unlisted equity securities | ||||||||||||||||
| Investments in funds | ||||||||||||||||
| Digital assets payable | ( | ) | ( | ) | ||||||||||||
| Digital assets payable – related party | ( | ) | ( | ) | ||||||||||||
| Payable to client | ( | ) | ( | ) | ||||||||||||
| Payable to client – related party | ( | ) | ( | ) | ||||||||||||
| Total | ( | ) | ||||||||||||||
(ii) Disclosures of valuation process used by the Company and valuation techniques and inputs used in fair value measurements as of March 31, 2026 and 2025:
The directors of the Company are responsible for the fair value measurements of assets and liabilities required for financial reporting purposes, including level 3 fair value measurements.
For level 3 fair value measurements, the Company will normally engage external valuation experts with the recognized professional qualifications and recent experience to perform the valuations.
F-37
The Company’s digital assets payables are revalued as of March 31, 2026 and 2025 by independent professional qualified valuer, who has the recent experience in the categories of digital assets payables being valued.
The digital assets are measured at level 1 fair value. The determination of fair value hierarchy level for valuation of the digital assets would depend on whether the underlying digital assets is traded in an active market.
For the year ended March 31, 2026, the fair value of the digital assets payable are determined based on the Summation, Monte Carlo Simulation and Black-Scholes Pricing Model. The significant unobservable inputs under Monte Carlo Simulation mainly include risk-free rate from
For the year ended March 31 2025, the fair value of the digital assets payable are determined based on the Summation, Binomial Option Pricing Model and Black-Scholes Pricing Model. The significant unobservable inputs under Binomial Option Pricing Model mainly include risk free rate of and expected volatility of
Please refer to note 10 for the key unobservable inputs used in valuation of share purchase warrants.
There were transfers between levels 2 and 3 for recurring fair value measurements during the year ended March 31, 2026 (2025: ).
During the year ended March 31, 2026, the valuation techniques change to Summation, Monte Carlo Simulation and Black-Scholes Pricing Model (2025: Summation Binomial Option Pricing Model and Black-Scholes Pricing Model).
The directors of the Company consider that the carrying amounts of Company’s financial assets and financial liabilities approximate their respective fair values due to the relatively short-term maturity of these financial instruments.
The fair values of the Company’s lease liabilities are determined by using the discounted cash flows method using discount rate that reflects the issuer’s borrowing rate as of the end of the reporting period. The own non-performance risk as of March 31, 2026 and 2025 as assessed to be insignificant.
| (g) | Concentration risk |
As of March 31, 2026 and 2025, the Company had two counterparties and one counterparty who accounted for more than 10% of the Company’s digital assets payable, respectively. As of March 31, 2026 and 2025, the Company had two counterparties who accounted for more than 10% of the Company’s payable to customers.
| (h) | Anti-money laundering risk |
Digital assets are capable of being traded directly between entities via decentralized networks that facilitate anonymous transactions. These transactions give rise to complicated technical challenges concerning matters including asset ownership and the identification of the parties involved. The Company established policies and procedures for AML and KYC that are applied through continuous monitoring, review, and reporting and are initiated during the client onboarding process in order to mitigate such risks.
| (i) | Liquidity risk |
Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations associated with its financial liabilities that are settled by delivering cash or another financial asset.
The Company monitors its liquidity risk and maintains a level of cash and bank balances deemed adequate by management to finance the Company’s operations and to mitigate the effects of fluctuations in cash flows.
F-38
The following are the contractual undiscounted cash outflows of non-derivative financial liabilities:
| Within 1 year | Over 1 year | Total | ||||||||||
| US$ | US$ | US$ | ||||||||||
| As of March 31, 2026 | ||||||||||||
| Non-derivative financial liabilities | ||||||||||||
| Other payables | ||||||||||||
| Lease liabilities | ||||||||||||
| As of March 31, 2025 | ||||||||||||
| Non-derivative financial liabilities | ||||||||||||
| Other payables | ||||||||||||
| Lease liabilities | ||||||||||||
| (h) | Capital management |
The Company’s primary objective when managing capital is to safeguard the Company’s ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain or adjust the capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders and issue new shares. The Company’s overall strategy remains unchanged from prior year.
Consistent with others in the industry, the Company monitors capital on the basis of the gearing ratio. This ratio is calculated as total liabilities divided by total assets. The gearing ratio as of March 31, 2026 was
The business plans of the Company mainly depend on maintaining sufficient funding to meet its expenditure requirements. The Company currently relies on funding from a variety of sources including equity financing.
In response to the above, the Company regularly reviews its major funding positions to ensure that it has adequate financial resources in meeting its financial obligations and relevant regulatory requirements of the group entities and seek to diversify its funding sources as appropriate.
23. Income (loss) per share attributable to equity holders of the Company
The basic income (loss) per share is calculated as the loss for the year attributable to equity holders of the Company divided by the weighted average number of ordinary shares of the Company in issue during the period.
The diluted income (loss) per share is calculated as the income(loss) for the year attributable to equity holders of the Company divided by the weighted average number of ordinary shares used in the calculation which is the weighted average number of ordinary shares in issue plus the number of shares held under the share purchase warrants and share optionsFor the year ended March 31, 2026, the Company had
F-39
| For the year ended March 31, | ||||||||||||
| 2026 | 2025 | 2024 | ||||||||||
| Basic Income (Loss) Per Share Numerator | ||||||||||||
| Income (loss) for the period attributable to owners of the Company | $ | $ | $ | ( | ) | |||||||
| Diluted Income (Loss) Per Share Numerator | ||||||||||||
| Income (loss) for the period attributable to owners of the Company | $ | $ | $ | ( | ) | |||||||
| Basic Income (Loss) Per Share Denominator | ||||||||||||
| Original shares: | ||||||||||||
| Additions from actual events: | ||||||||||||
| - Issuance of common stock, weighted | ||||||||||||
| Basic weighted average shares outstanding | ||||||||||||
| Diluted Income (Loss) Per Share Denominator | ||||||||||||
| Basic weighted average shares outstanding | ||||||||||||
| - Share purchases warrant | * | |||||||||||
| - Issuance of share award, weighted | * | |||||||||||
| Diluted Weighted Average Shares Outstanding: | ||||||||||||
| Income (Loss) Per Share | ||||||||||||
| - Basic | $ | $ | $ | ( | ) | |||||||
| - Diluted | $ | $ | $ | ( | ) | |||||||
| Weighted Average Shares Outstanding | ||||||||||||
| - Basic | ||||||||||||
| - Diluted | ||||||||||||
| * | For the year ended March 31, 2024, their effects would have been anti-dilutive. |
24. Related party balances and transactions
Related parties’ relationships are as follows:
| Name | Relationship | |
| Bingzhong Wang | ||
| Ming Ni | ||
| Pengyuan Fan | ||
| MetaSphere Limited (formerly known as Xisha Hu) | ||
| Xiaosi Zhang | ||
Northstar Technologies | ||
| Polaris Investment Management PTE Limited | ||
| Antpool Technologies Limited | ||
| LSQ Investment Fund SPC – Next Generation Fund I SP |
F-40
Related parties’ balance are consisted of the following:
| For the years ended March 31, | ||||||||
| 2026 | 2025 | |||||||
| US$ | US$ | |||||||
| a. Digital assets payables | ||||||||
| Northstar Technologies | ||||||||
| MetaSphere Limited | ||||||||
| Ming Ni | ||||||||
| Pengyuan Fan | ||||||||
| Xiaosi Zhang | ||||||||
| Total | ||||||||
| b. Payable to customer | ||||||||
| Northstar Technologies | ||||||||
| Folius Venture LLC | ||||||||
| MetaSphere Limited | ||||||||
| Pengyuan Fan | ||||||||
| LSQ Investment Fund SPC – Next Generation Fund I SP | ||||||||
| Ming Ni | ||||||||
| Xiaosi Zhang | ||||||||
| Total | ||||||||
| c. Other payables | ||||||||
| Polaris Investment Management PTE Limited | ||||||||
| Northstar Technologies | ||||||||
| Xiaosi Zhang | ||||||||
| Total | ||||||||
Related parties’ transactions are consisted of the following:
For the years ended | ||||||||||||
| 2026 | 2025 | 2024 | ||||||||||
| US$ | US$ | US$ | ||||||||||
| Derivative products entered with Northstar Technologies | ||||||||||||
| Derivative products expired to Northstar Technologies | ( | ) | ( | ) | ( | ) | ||||||
| Derivative products entered with MetaSphere Limited | ||||||||||||
| Derivative products expired to MetaSphere Limited | ( | ) | ( | ) | ( | ) | ||||||
| Derivative products entered with Ming Ni | ||||||||||||
| Derivative products expired to Ming Ni | ( | ) | ( | ) | ( | ) | ||||||
| Derivative products entered with Pengyuan Fan | ||||||||||||
| Derivative products expired to Pengyuan Fan | ( | ) | ( | ) | ||||||||
| Derivative products entered with Xiaosi Zhang | ||||||||||||
| Derivative products expired to Xiaosi Zhang | ( | ) | ||||||||||
| Derivative products entered with Folius Venture LLC | ||||||||||||
| Derivative products expired to Folius Venture LLC | ( | ) | ( | ) | ||||||||
Note:
| (a) | All amounts are due on demand, non-interest bearing and unsecured. |
F-41
Remuneration to senior management for the years ended March 31, 2026, 2025 and 2024 were:
| For the years ended March 31, | ||||||||||||
| 2026 | 2025 | 2024 | ||||||||||
| US$ | US$ | US$ | ||||||||||
| Salaries and other short term employee benefits | ||||||||||||
| Payments to defined contribution pension schemes | ||||||||||||
| Total | ||||||||||||
25. Commitments and contingencies
Lease Commitments
We entered into operating leases for a corporate office in Hong Kong for a term of three years. Our commitments for minimum lease payment under these operating lease obligations as of March 31, 2026 are listed in section “Note 5 — Right-of-use assets and lease liabilities”
Litigation
In the opinion of management of the Company, there were no pending or threatened claims and litigation as of March 31, 2026 and through the issuance date of these consolidated financial statements. We review the need for any such liabilities on a regular basis.
26. Subsequent events
The Company evaluated all events and transactions that occurred after March 31, 2026 up through August 6, 2026, which is the date that these consolidated financial statements are available to be issued, and there were no other material subsequent events that require disclosure in these consolidated financial statements.
F-42
Exhibit 2.1
This file contains proprietary, private and confidential information. Any unauthorised disclosure, copying, use or distribution is prohibited and may be unlawful. If you are not the intended recipient, please immediately delete all copies of this document.
Description of rights of
each class of securities
registered under Section 12 of the Securities Exchange Act of 1934 (the “Exchange Act”)
Ordinary shares of Metalpha Technology Holding Limited(“we,” “our,” “our company,” or “us”) are listed and traded on the Nasdaq Capital Market, and in connection with this listing (but not for trading), its ordinary shares are registered under Section 12(b) of the Exchange Act. This exhibit contains a description of the rights of the holders of ordinary shares.
Description of Ordinary Shares
The following is a summary of material provisions of our currently effective third amended and restated memorandum of association and articles of association (the “Memorandum and Articles of Association”), as well as the Companies Act (As Revised) of the Cayman Islands (the “Companies Act”) insofar as they relate to the material terms of our ordinary shares. Notwithstanding this, because it is a summary, it may not contain all the information that you may otherwise deem important. For more complete information, you should read the entire Memorandum and Articles of Association, which have been filed with the SEC as exhibits to our Registration Statement on Form 6-K (File No.001-38208), initially filed with the Securities and Exchange Commission on 31 March 2025.
Type and Class of Securities (Item 9.A.5 of Form 20-F)
Each ordinary share has a par value of US$0.0001 each. The number of ordinary shares that have been issued as of the last day of the financial year ended March 31, 2026 is provided on the cover of the annual report on Form 20-F filed on August 6, 2026 (the “2026 Form 20-F”).
Preemptive Rights
The ordinary shares are not subject to any pre-emptive or similar rights under the Companies Act or pursuant to the Memorandum and Articles of Association.
Limitations or Qualifications
Each ordinary share entitles the holder thereof to one vote, unless any ordinary share carries special voting rights.
Rights of Other Types of Securities
Not applicable.
Rights of ordinary shares (Item 10.B.3 of Form 20-F)
Ordinary Shares
Our share capital is US $50,000 divided into 500,000,000 shares of US$ 0.0001 par value each. There is no limit on the number of shares of any class which we are authorised to issue. All of our issued and outstanding ordinary shares are fully paid and non-assessable. Our ordinary shares are issued in registered form, and are issued when registered in our register of members. Each holder of our Ordinary Shares will be entitled to receive a certificate in respect of such ordinary shares.
Dividends
Subject to the provisions of the Companies Actand any rights for the time being attaching to any class or classes of shares, the directors may declare dividends or distributions out of our funds which are lawfully available for that purpose.
Subject to the provisions of the Companies Act and any rights for the being attaching to any class or classes of shares, our shareholders may, by ordinary resolution, declare dividends but no such dividend shall exceed the amount recommended by the directors.
Subject to the requirements of the Companies Act regarding the application of a company’s share premium account and with the sanction of an ordinary resolution, dividends may also be declared and paid out of any share premium account. The directors when paying dividends to shareholders may make such payment either in cash or in specie.
Unless provided by the rights attached to a share, no dividend shall bear interest against us.
Voting Rights
Subject to any rights or restrictions as to voting attached to any shares, unless any share carries special voting rights, on a show of hands every shareholder who is present in person and every person representing a shareholder by proxy shall have one vote. On a poll, every shareholder who is present in person and every person representing a shareholder by proxy shall have one vote for each share of which he or the person represented by proxy is the holder. In addition, all shareholders holding shares of a particular class are entitled to vote at a meeting of the holders of that class of shares. Votes may be given either personally or by proxy.
The directors may determine that presence at a general meeting may be by means of communications facilities, including that a general meeting may be held as a virtual meeting. The notice of any such meeting must disclose the communications facilities to be used and the procedures to be followed by shareholders or other participants using those facilities.
Calls on shares and forfeiture
Subject to the terms of allotment, the directors may make calls on the shareholders in respect of any monies unpaid on their shares including any premium and each shareholder shall (subject to receiving at least fourteen clear days’ notice specifying when and where payment is to be made), pay to us the amount called on his shares. Shareholders registered as the joint holders of a share shall be jointly and severally liable to pay all calls in respect of the share. If a call remains unpaid after it has become due and payable the person from whom it is due and payable shall pay interest on the amount unpaid from the day it became due and payable until it is paid at the rate fixed by the terms of allotment of the share or in the notice of the call or if no rate is fixed, at the rate of ten per cent. per annum. The directors may, at their discretion, waive payment of the interest wholly or in part.
We have a first and paramount lien on all shares (whether fully paid up or not) registered in the name of a shareholder (whether solely or jointly with others). The lien is for all monies payable to us by the shareholder or the shareholder’s estate:
(a) either alone or jointly with any other person, whether or not that other person is a shareholder; and
(b) whether or not those monies are presently payable.
At any time the directors may declare any share to be wholly or partly exempt from the Lien on Share provisions of the articles.
We may sell, in such manner as the directors may determine, any share on which the sum in respect of which the lien exists is presently payable, if due notice that such sum is payable has been given (as prescribed by the articles) and that sum is not paid within fourteen clear days after that notice is deemed to be given under the articles.
| 2 |
Companies ActUnclaimed Dividends
If a dividend cannot be paid to a shareholder or remains unclaimed within six weeks after it was declared or both, the directors may pay it into a separate account in our name. A dividend that remains unclaimed for a period of six years after it became due for payment shall be forfeited to, and shall cease to remain owing by, us.
Forfeiture or Surrender of Shares
If a shareholder fails to pay any call the directors may give to such shareholder not less than fourteen clear days’ notice requiring payment and specifying the amount unpaid including any interest which may have accrued, any expenses which have been incurred by us due to that person’s default and the place where payment is to be made. The notice shall also contain a warning that if the notice is not complied with, the shares in respect of which the call is made will be liable to be forfeited.
If such notice is not complied with, the directors may, before the payment required by the notice has been received, resolve that any share the subject of that notice be forfeited (which forfeiture shall include all dividends or other monies payable in respect of the forfeited share and not paid before such forfeiture).
A forfeited share may be sold, re-allotted or otherwise disposed of on such terms and in such manner as the directors determine and at any time before a sale, re-allotment or disposition the forfeiture may be cancelled on such terms as the directors think fit.
A person whose shares have been forfeited or surrendered shall cease to be a shareholder in respect of those shares, but shall, notwithstanding such forfeiture or surrender , remain liable to pay to us all monies which at the date of forfeiture or surrender were presently payable by him to us in respect of those shares, together with all expenses and interest from the date of forfeiture or surrender until payment The directors may waive payment wholly or in part.
A declaration, whether statutory or under oath, made by a director or the secretary shall be conclusive evidence that the person making the declaration is a director or secretary of us and that the particular shares have been forfeited or surrendered on a particular date.
Subject to the execution of an instrument of transfer, if necessary, the declaration shall constitute good title to the shares.
Share Premium Account
The directors shall establish a share premium account and shall carry to the credit of such account from time to time to a sum equal to the amount or value of the premium paid on the issue of any share or capital contributed or such other amounts required by the Companies Act .
Redemption and Purchase of Own Shares
Subject to the Companies Act and any rights for the time being conferred on the shareholders holding a particular class of shares, we may by our directors:
(a) issue shares that are to be redeemed or liable to be redeemed, at our option or the shareholder holding those redeemable shares, on the terms and in the manner its directors determine before the issue of those shares;
(b) with the consent by special resolution of the shareholders holding shares of a particular class, vary the rights attaching to that class of shares so as to provide that those shares are to be redeemed or are liable to be redeemed at our option on the terms and in the manner which the directors determine at the time of such variation; and
(c) purchase all or any of our own shares of any class including any redeemable shares on the terms and in the manner which the directors determine at the time of such purchase.
| 3 |
We may make a payment in respect of the redemption or purchase of our own shares in any manner authorised by the Companies Act, including out of any combination of capital, our profits and the proceeds of a fresh issue of shares.
When making a payment in respect of the redemption or purchase of shares, the directors may make the payment in cash or in specie (or partly in one and partly in the other) if so authorised by the terms of the allotment of those shares or by the terms applying to those shares, or otherwise by agreement with the shareholder holding those shares.
Transfer of Shares
Subject to the restrictions contained in our articles, any of our shareholders may transfer all or any of his or her Ordinary Shares by an instrument of transfer in any usual or common form or any other form approved by our board of directors, executed by or on behalf of the transferor (and, if in respect of a nil or partly paid up share, or if so required by our directors, by or on behalf of the transferee).
Our board of directors may, in its absolute discretion, decline to register any transfer of any Ordinary Share that has not been fully paid up or is subject to a company lien. Our board of directors may also decline to register any transfer of any Ordinary Share unless:
(a) the instrument of transfer is lodged with us, accompanied by the certificate for the Ordinary Shares to which it relates and such other evidence as our board of directors may reasonably require to show the right of the transferor to make the transfer;
(b) the instrument of transfer is in respect of only one class of Ordinary Shares;
(c) the instrument of transfer is properly stamped, if required;
(d) the Ordinary Share transferred is fully paid and free of any lien in favor of us;
(e) any fee related to the transfer has been paid to us; and
(f) the transfer is not to more than four joint holders.
If our directors refuse to register a transfer, they are required, within three months after the date on which the instrument of transfer was lodged, to send to each of the transferor and the transferee notice of such refusal.
The registration of transfers may, on 14 days’ notice being given by advertisement in such one or more newspapers or by electronic means, be suspended and our register of members closed at such times and for such periods as our board of directors may from time to time determine. However, the registration of transfers may not be suspended, and the register may not be closed, for more than 30 days in any year.
Capitalisation of Profits
The directors may resolve to capitalise:
(a) any part of our profits not required for paying any preferential dividend (whether or not those profits are available for distribution); or
(b) any sum standing to the credit of our share premium account or capital redemption reserve, if any.
The amount resolved to be capitalised must be appropriated to the shareholders who would have been entitled to it had it been distributed by way of dividend and in the same proportions.
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Liquidation Rights
If we are wound up, the shareholders may, subject to the articles and any other sanction required by the CompaniesAct, pass a special resolution allowing the liquidator to do either or both of the following:
(a) to divide in specie among the shareholders the whole or any part of our assets and, for that purpose, to value any assets and to determine how the division shall be carried out as between the shareholders or different classes of shareholders; and
(b) to vest the whole or any part of the assets in trustees for the benefit of shareholders and those liable to contribute to the winding up.
The directors have the authority to present a petition for our winding up to the Grand Court of the Cayman Islands on our behalf without the sanction of a resolution passed at a general meeting.
Requirements to Change the Rights of Holders of Ordinary Shares (Section 2.7and 2.9 of 3rd A&R MA)
Variations of Rights of Shares
Whenever our capital is divided into different classes of shares, the rights attaching to any class of share (unless otherwise provided by the terms of issue of the shares of that class) may be varied either with the consent in writing of the holders of not less than two-thirds of the issued shares of that class, or with the sanction of a resolution passed by a majority of not less than two-thirds of the holders of shares of the class present in person or by proxy at a separate general meeting of the holders of shares of that class.
Unless the terms on which a class of shares was issued state otherwise, the rights conferred on the shareholder holding shares of any class shall not be deemed to be varied by the creation or issue of further shares ranking pari passu with the existing shares of that class.
Limitations on the Rights to Own Ordinary Shares
There are no limitations under the laws of the Cayman Islands or under the Memorandum and Articles of Association that limit the right of non-resident or foreign owners to hold or vote ordinary shares.
Provisions Affecting Any Change of Control (Item 3D of Form 20-F)
Anti-Takeover Provisions. Some provisions of our articles may discourage, delay or prevent a change in control of our company or management that shareholders may consider favorable, including provisions that authorize our board of directors to issue shares with preferred, deferred or other special rights or restrictions at such times and on such terms and conditions as the board of directors may decide without any further vote or action by our shareholders.
Under the Cayman Islands law our directors may only exercise the rights and powers granted to them under our articles for what they believe in good faith to be in the best interests of our company and for a proper purpose.
Ownership Threshold
There are no provisions under the Companies Act or under the Memorandum and Articles of Association that govern the ownership threshold above which shareholder ownership must be disclosed.
Differences Between the Law of Different Jurisdictions
The Companies Act is derived, to a large extent, from the older Companies Acts of England and Wales but does not follow recent United Kingdom statutory enactments, and accordingly there are significant differences between the Companies Act and the current Companies Act of England. In addition, the Companies Act differs from laws applicable to United States corporations and their shareholders. Set forth below is a summary of certain significant differences between the provisions of the Companies Act applicable to us and the comparable laws applicable to companies incorporated in the State of Delaware in the United States.
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Mergers and Similar Arrangements
The Companies Act permits mergers and consolidations between Cayman Islands companies and between Cayman Islands companies and non-Cayman Islands companies. For these purposes, (a) “merger” means the merging of two or more constituent companies and the vesting of their undertaking, property and liabilities in one of such companies as the surviving company, and (b) a “consolidation” means the combination of two or more constituent companies into a consolidated company and the vesting of the undertaking, property and liabilities of such companies to the consolidated company. In order to effect such a merger or consolidation, the directors of each constituent company must approve a written plan of merger or consolidation, which must then be authorized by (a) a special resolution of the shareholders of each constituent company, and (b) such other authorization, if any, as may be specified in such constituent company’s articles of association. The plan must be filed with the Registrar of Companies together with a declaration as to the solvency of the consolidated or surviving company, a list of the assets and liabilities of each constituent company and an undertaking that a copy of the certificate of merger or consolidation will be given to the shareholders and creditors of each constituent company and that notification of the merger or consolidation will be published in the Cayman Islands Gazette, together with any other documents set forth in the Companies Act. Court approval is not required for a merger or consolidation which is effected in compliance with these statutory procedures.
A merger between a Cayman parent company and its Cayman subsidiary or subsidiaries does not require authorization by a resolution of shareholders. For this purpose a subsidiary is a company of which at least 90% of the issued shares entitled to vote are owned by the parent company.
The consent of each holder of a fixed or floating security interest of a constituent company is required unless this requirement is waived by a court in the Cayman Islands.
Except in certain limited circumstances, a dissenting shareholder of a Cayman Islands constituent company is entitled to payment of the fair value of his or her shares upon dissenting from a merger or consolidation. The exercise of such dissenter rights will preclude the exercise by the dissenting shareholder of any other rights to which he or she might otherwise be entitled by virtue of holding shares, except for the right to seek relief on the grounds that the merger or consolidation is void or unlawful.
In addition, there are statutory provisions that facilitate the reconstruction and amalgamation of companies, provided that the arrangement is approved by a majority in number of each class of shareholders and creditors with whom the arrangement is to be made, and who must, in addition, represent three-fourths in value of each such class of shareholders or creditors, as the case may be, that are present and voting either in person or by proxy at a meeting, or meetings, convened for that purpose. The convening of the meetings and subsequently the arrangement must be sanctioned by the Grand Court of the Cayman Islands. While a dissenting shareholder has the right to express to the court the view that the transaction ought not to be approved, the court can be expected to approve the arrangement if it determines that:
(a) the statutory provisions as to the required majority vote have been met;
(b) the shareholders have been fairly represented at the meeting in question and the statutory majority are acting bona fide without coercion of the minority to promote interests adverse to those of the class;
(c) the arrangement is such that may be reasonably approved by an intelligent and honest man of that class acting in respect of his interest; and
(d) the arrangement is not one that would more properly be sanctioned under some other provision of the Companies Act.
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When a takeover offer is made and accepted by holders of 90% of the shares affected within four months the offeror may, within a two-month period commencing on the expiration of such four month period, require the holders of the remaining shares to transfer such shares on the terms of the offer. An objection can be made to the Grand Court of the Cayman Islands but this is unlikely to succeed in the case of an offer which has been so approved unless there is evidence of fraud, bad faith or collusion.
If an arrangement and reconstruction is thus approved, or if a takeover offer is made and accepted, a dissenting shareholder would have no rights comparable to appraisal rights, which would otherwise ordinarily be available to dissenting shareholders of Delaware corporations, providing rights to receive payment in cash for the judicially determined value of the shares.
Shareholders’ Suits
In principle, we will normally be the proper plaintiff to sue for a wrong done to us as a company and as a general rule, a derivative action may not be brought by a minority shareholder. However, based on English law authorities, which would in all likelihood be of persuasive authority in the Cayman Islands, the Cayman Islands courts can be expected to follow and apply the common law principles (namely the rule in Foss v. Harbottle and the exceptions thereto) so that a non-controlling shareholder may be permitted to commence a class action against or derivative actions in the name of the company to challenge:
(a) an act which is illegal or ultra vires with respect to the company and is therefore incapable of ratification by the shareholders;
(b) an act which, although not ultra vires, requires authorization by a qualified (or special) majority (that is, more than a simple majority) which has not been obtained; and
(c) an act which constitutes a “fraud on the minority” where the wrongdoers are themselves in control of the company.
Indemnification of Directors and Executive Officers and Limitation of Liability
The Cayman Islands law does not limit the extent to which a company’s articles of association may provide for indemnification of officers and directors, except to the extent any such provision may be held by the Cayman Islands courts to be contrary to public policy, such as to provide indemnification against civil fraud or the consequences of committing a crime. Our articles provide to the extent permitted by law, we shall indemnify each existing or former secretary, director (including alternate director), and any of our other officers (including an investment adviser or an administrator or liquidator) and their personal representatives against:
(a) all actions, proceedings, costs, charges, expenses, losses, damages or liabilities incurred or sustained by the existing or former secretary or officer in or about the conduct of our business or affairs or in the execution or discharge of the existing or former secretary’s or officer’s duties, powers, authorities or discretions; and
(b) without limitation to paragraph (a) above, all costs, expenses, losses or liabilities incurred by the existing or former secretary or officer in defending (whether successfully or otherwise) any civil, criminal, administrative or investigative proceedings (whether threatened, pending or completed) concerning us or our affairs in any court or tribunal, whether in the Cayman Islands or elsewhere.
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No such existing or former secretary or officer, however, shall be indemnified in respect of any matter arising out of his own dishonesty.
To the extent permitted by law, we may make a payment, or agree to make a payment, whether by way of advance, loan or otherwise, for any legal costs incurred by an existing or former secretary or any of our officers in respect of any matter identified in above on condition that the secretary or officer must repay the amount paid by us to the extent that it is ultimately found not liable to indemnify the secretary or that officer for those legal costs.
This standard of conduct is generally the same as permitted under the Delaware General Corporation Law for a Delaware corporation. In addition, we intend to enter into indemnification agreements with our directors and executive officers that will provide such persons with additional indemnification beyond that provided in our articles.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers or persons controlling us under the foregoing provisions, we have been informed that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.
Anti-Takeover Provisions in Our Articles
Some provisions of our articles may discourage, delay or prevent a change in control of our company or management that shareholders may consider favorable, including provisions that authorize our board of directors to issue shares at such times and on such terms and conditions as the board of directors may decide without any further vote or action by our shareholders.
Under the Companies Act, our directors may only exercise the rights and powers granted to them under our articles for what they believe in good faith to be in the best interests of our company and for a proper purpose.
Directors’ Fiduciary Duties
Under Delaware corporate law, a director of a Delaware corporation has a fiduciary duty to the corporation and its shareholders. This duty has two components: the duty of care and the duty of loyalty. The duty of care requires that a director act in good faith, with the care that an ordinarily prudent person would exercise under similar circumstances. Under this duty, a director must inform himself of, and disclose to shareholders, all material information reasonably available regarding a significant transaction. The duty of loyalty requires that a director act in a manner he or she reasonably believes to be in the best interests of the corporation. He or she must not use his or her corporate position for personal gain or advantage. This duty prohibits self-dealing by a director and mandates that the best interests of the corporation and its shareholders take precedence over any interest possessed by a director, officer or controlling shareholder and not shared by the shareholders generally. In general, actions of a director are presumed to have been made on an informed basis, in good faith and in the honest belief that the action taken was in the best interests of the corporation. However, this presumption may be rebutted by evidence of a breach of one of the fiduciary duties. Should such evidence be presented concerning a transaction by a director, a director must prove the procedural fairness of the transaction, and that the transaction was of fair value to the corporation.
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As a matter of Cayman law, a director owes three types of duties to the company: (a) statutory duties, (b) fiduciary duties, and (iii) common law duties. The Companies Act imposes a number of statutory duties on a director. A Cayman Islands director’s fiduciary duties are not codified, however the courts of the Cayman Islands have held that a director owes the following fiduciary duties (a) a duty to act in what the director bona fide considers to be in the best interests of the company, (b) a duty to exercise their powers for the purposes they were conferred, (c) a duty to avoid fettering his or her discretion in the future and (d) a duty to avoid conflicts of interest and of duty. The common law duties owed by a director are those to act with skill, care and diligence that may reasonably be expected of a person carrying out the same functions as are carried out by that director in relation to the company and, also, to act with the skill, care and diligence in keeping with a standard of care commensurate with any particular skill they have which enables them to meet a higher standard than a director without those skills. In fulfilling their duty of care to us, our directors must ensure compliance with our amended articles of association, as amended and restated from time to time. We have the right to seek damages if a duty owed by any of our directors is breached.
Shareholder Proposals
The Delaware General Corporation Law does not provide shareholders an express right to put any proposal before the annual meeting of shareholders, but in keeping with common law, Delaware corporations generally afford shareholders an opportunity to make proposals and nominations provided that they comply with the notice provisions in the certificate of incorporation or bylaws. A special meeting may be called by the board of directors or any other person authorized to do so in the governing documents, but shareholders may be precluded from calling special meetings.
The Companies Act provides shareholders with only limited rights to requisition a general meeting, and does not provide shareholders with any right to put any proposal before a general meeting. However, these rights may be provided in a company’s articles of association. Our articles provide that general meetings shall be convened on the written requisition of one or more of the shareholders entitled to attend and vote at our general meetings who (together) hold not less than ten per cent of our paid up voting share capital deposited in accordance with the notice provisions in the articles, specifying the purpose of the meeting and signed by each of the shareholders making the requisition. If the directors do not convene such meeting for a date not later than twenty-one clear days’ after the date of receipt of the written requisition, those shareholders who requested the meeting may convene the general meeting themselves within three months after the end of such period of twenty-one clear days in which case reasonable expenses incurred by them as a result of the directors failing to convene a meeting shall be reimbursed by us. Our articles provide no other right to put any proposals before annual general meetings or extraordinary general meetings. As a Cayman Islands exempted company, we are not obligated by law to call shareholders’ annual general meetings. However, our corporate governance guidelines require us to call such meetings every year.
Cumulative Voting
Under the Delaware General Corporation Law, cumulative voting for elections of directors is not permitted unless the corporation’s certificate of incorporation specifically provides for it. Cumulative voting potentially facilitates the representation of minority shareholders on a board of directors since it permits the minority shareholder to cast all the votes to which the shareholder is entitled on a single director, which increases the shareholder’s voting power with respect to electing such director. As permitted under the Companies Act, our articles do not provide for cumulative voting. As a result, our shareholders are not afforded any less protections or rights on this issue than shareholders of a Delaware corporation.
Removal of Directors
Under the Delaware General Corporation Law, a director of a corporation with a classified board may be removed only for cause with the approval of a majority of the outstanding shares entitled to vote, unless the certificate of incorporation provides otherwise. Subject to the provisions of our articles, the office of a director may be terminated forthwith if (a) he is prohibited by the law of the Cayman Islands from acting as a director, (b) he is made bankrupt or makes an arrangement or composition with his creditors generally, (c) he resigns his office by notice to us, (d) he only held office as a director for a fixed term and such term expires, (e) in the opinion of a registered medical practitioner by whom he is being treated he becomes physically or mentally incapable of acting as a director, (f) he is given notice by the majority of the other directors (not being less than two in number) to vacate office (without prejudice to any claim for damages for breach of any agreement relating to the provision of the services of such director), (g) he is made subject to any law relating to mental health or incompetence, whether by court order or otherwise, or (h) without the consent of the other directors, he is absent from meetings of directors for continuous period of six months.
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Transactions with Interested Shareholders
The Delaware General Corporation Law contains a business combination statute applicable to Delaware public corporations whereby, unless the corporation has specifically elected not to be governed by such statute by amendment to its certificate of incorporation or bylaws that is approved by its shareholders, it is prohibited from engaging in certain business combinations with an “interested shareholder” for three years following the date that such person becomes an interested shareholder. An interested shareholder generally is a person or a group who or which owns or owned 15% or more of the target’s outstanding voting stock or who or which is an affiliate or associate of the corporation and owned 15% or more of the corporation’s outstanding voting stock within the past three years. This has the effect of limiting the ability of a potential acquirer to make a two-tiered bid for the target in which all shareholders would not be treated equally. The statute does not apply if, among other things, prior to the date on which such shareholder becomes an interested shareholder, the board of directors approves either the business combination or the transaction which resulted in the person becoming an interested shareholder. This encourages any potential acquirer of a Delaware corporation to negotiate the terms of any acquisition transaction with the target’s board of directors.
The Companies Act has no comparable statute. As a result, we cannot avail ourselves of the types of protections afforded by the Delaware business combination statute. However, although the Companies Act does not regulate transactions between a company and its significant shareholders, under Cayman Islands law such transactions must be entered into bona fide in the best interests of the company and for a proper corporate purpose and not with the effect of constituting a fraud on the minority shareholders.
Dissolution; Winding Up
Under the Delaware General Corporation Law, unless the board of directors approves the proposal to dissolve, dissolution must be approved by shareholders holding 100% of the total voting power of the corporation. Only if the dissolution is initiated by the board of directors may it be approved by a simple majority of the corporation’s outstanding shares. Delaware law allows a Delaware corporation to include in its certificate of incorporation a supermajority voting requirement in connection with dissolutions initiated by the board of directors.
Under the Companies Act and our articles, our company may be wound up by a special resolution of our shareholders, or if the winding up is initiated by our board of directors, by either a special resolution of our members or, if our company is unable to pay its debts as they fall due, by an ordinary resolution of our members. In addition, a company may be wound up by an order of the courts of the Cayman Islands. The court has authority to order winding up in a number of specified circumstances including where it is, in the opinion of the court, just and equitable to do so.
Variation of Rights of Shares
Under the Delaware General Corporation Law, a corporation may vary the rights of a class of shares with the approval of a majority of the outstanding shares of such class, unless the certificate of incorporation provides otherwise. Under the Companies Act and our articles, if our share capital is divided into more than one class of shares, the rights attaching to any class of share (unless otherwise provided by the terms of issue of the shares of that class) may be varied either with the consent in writing of the holders of not less than two-thirds of the issued shares of that class, or with the sanction of a resolution passed by a majority of not less than two-thirds of the holders of shares of the class present in person or by proxy at a separate general meeting of the holders of shares of that class.
Amendment of Governing Documents
Under the Delaware General Corporation Law, a corporation’s certificate of incorporation may be amended only if adopted and declared advisable by the board of directors and approved by a majority of the outstanding shares entitled to vote, and the bylaws may be amended with the approval of a majority of the outstanding shares entitled to vote and may, if so provided in the certificate of incorporation, also be amended by the board of directors. Under the Companies Act, our articles may only be amended by special resolution of our shareholders.
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Changes in Capital (Section 8.1 and 8.4 of 3rd A&R MA)
Subject to the Companies Act, our shareholders may, by ordinary resolution:
(a) increase our share capital by new shares of the amount fixed by that ordinary resolution and with the attached rights, priorities and privileges set out in that ordinary resolution;
(b) consolidate and divide all or any of our share capital into shares of larger amount than our existing shares;
(c) convert all or any of our paid up shares into stock, and reconvert that stock into paid up shares of any denomination;
(d) sub-divide our shares or any of them into shares of an amount smaller than that fixed, so, however, that in the sub-division, the proportion between the amount paid and the amount, if any, unpaid on each reduced share shall be the same as it was in case of the share from which the reduced share is derived; and
(e) cancel shares which, at the date of the passing of that ordinary resolution, have not been taken or agreed to be taken by any person and diminish the amount of our share capital by the amount of the shares so cancelled or, in the case of shares without nominal par value, diminish the number of shares into which our capital is divided.
Subject to the Companies Act and to any rights for the time being conferred on the shareholders holding a particular class of shares, our shareholders may, by special resolution, reduce its share capital in any way.
Debt Securities (Item 12.A of Form 20-F)
Not applicable.
Warrants and Rights (Item 12.B of Form 20-F)
Not applicable.
Other Securities (Item 12.C of Form 20-F)
Not applicable.
Description of American Depositary Shares (Items 12of Form 20-F)
Not applicable.
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Exhibit 4.6
Metalpha Technology Holding Limited
5506-07, Central Plaza, 18 Harbour Road
Wan Chai, Hong Kong
+852-35652921
[Date]
[Director Name]
[Director Address]
| Re: | Director Offer Letter |
Dear [Director Name],
Metalpha Technology Holding Limited, a Cayman Islands exempted company with limited liability (the “Company”), is pleased to offer you a position as a member of its board of directors (the “Board”). We believe your background and experience will be a significant asset to the Company and we look forward to your participation on the Board. Should you choose to accept this position as a member of the Board, this letter agreement (this “Agreement”) shall constitute an agreement between you and the Company and contains all the terms and conditions relating to the services you agree to provide to the Company.
1. Term. This Agreement is effective upon your acceptance and signature below. Your term as a director shall commence upon you being elected to the Board. Subject to the Company’s memorandum and articles of association, as amended, and the provisions in Section 8 below, your term shall continue until your successor is duly elected and qualified. The position shall be up for re-election each year at the annual shareholder’s meeting, and upon re-election, the terms and provisions of this Agreement shall remain in full force and effect.
2. Services. You shall render services as a member of the Board and the Board committees set forth on Schedule A attached hereto (hereinafter your “Duties”). During the term of this Agreement, you shall attend and participate in such number of meetings of the Board and of the Board committee(s) of which you are a member as regularly or specially called. You may attend and participate at each such meeting via teleconference, video conference, or in person. You shall consult with the other members of the Board and Board committee(s) as necessary via telephone, electronic mail, or other forms of correspondence.
3. Compensation. As compensation for your services to the Company, you will receive compensation as set forth on Schedule B attached hereto (hereinafter, the “Compensation”) for serving on the Board during your term as a director. You shall be reimbursed for reasonable and approved expenses incurred by you in connection with the performance of your Duties.
4. No Assignment. Because of the personal nature of the services to be rendered by you, this Agreement may not be assigned by you without the prior written consent of the Company.
5. Confidential Information; Non-Disclosure. In consideration of your access to certain Confidential Information (as defined below) of the Company, and in connection with your business relationship with the Company, you hereby represent and agree as follows:
a. Definition. For purposes of this Agreement the term “Confidential Information” means:
i. Any information which the Company possesses that has been created, discovered, or developed by or for the Company, and which has or could have commercial value or utility in the business in which the Company is engaged; or
ii. Any information which is related to the business of the Company and is generally not known by non-Company personnel.
iii. Confidential Information includes, without limitation, trade secrets and any information concerning services provided by the Company, concepts, ideas, improvements, techniques, methods, research, data, know-how, software, formats, marketing plans, general analyses, business plans and analyses, strategies, forecasts, customer and supplier identities, characteristics and agreements.
b. Exclusions. Notwithstanding the foregoing, the term “Confidential Information” shall not include:
i. Any information which becomes generally available to the public other than as a result of a breach of the confidentiality portions of this Agreement, or any other agreement requiring confidentiality between the Company and you;
ii. Information received from a third party in rightful possession of such information who is not restricted from disclosing such information; and
iii. Information known by you prior to receipt of such information from the Company, which prior knowledge can be documented.
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c. Documents. You agree that, without the express written consent of the Company, you will not remove from the Company’s premises, any notes, formulas, programs, data, records, machines, or any other documents or items which in any manner contain or constitute Confidential Information, nor will you make reproductions or copies of same. You shall promptly return any such documents or items, along with any reproductions or copies, to the Company upon the earliest of Company’s demand, termination of this Agreement, or your termination or Resignation, as defined in Section 8 herein.
d. Confidentiality. You agree that you will hold in trust and confidence all Confidential Information and will not disclose to others, directly or indirectly, any Confidential Information or anything relating to such information without the prior written consent of the Company, except as maybe necessary in the course of your business relationship with the Company. You further agree that you will not use any Confidential Information without the prior written consent of the Company, except as may be necessary in the course of your business relationship with the Company, and that the provisions of this paragraph (d) shall survive termination of this Agreement.
e. Ownership. You agree that Company shall own all right, title, and interest (including patent rights, copyrights, trade secret rights, mask work rights, trademark rights, and all other intellectual and industrial property rights of any sort throughout the world) relating to any and all inventions (whether or not patentable), works of authorship, mask works, designations, designs, know-how, ideas, and information made or conceived or reduced to practice, in whole or in part, by you during the term of this Agreement and that arise out of your Duties (collectively, “Inventions”) and you will promptly disclose and provide all Inventions to the Company. You agree to assist the Company, at its expense, to further evidence, record and perfect such assignments or conveyances as may be necessary in respect hereof, and to perfect, obtain, maintain, enforce, and defend any rights assigned or otherwise conveyed.
6. Non-Competition. You agree and undertake that you will not, so long as you are a member of the Board and for a period of 12 months following termination of this Agreement for whatever reason, directly or indirectly as owner, partner, joint venture, shareholder, employee, broker, agent principal, corporate officer, director, licensor, or in any other capacity whatsoever, engage in, become financially interested in, be employed by, or have any connection with any business or venture that is engaged in any activities involving services or products which compete, directly or indirectly, with the services or products provided or proposed to be provided by the Company or its subsidiaries or affiliates in the People’s Republic of China; provided, however, that you may own securities of any public corporation which is engaged in such business but in an amount not to exceed at any one time, one percent of any class of stock or securities of such company, so long as you has no active role in the publicly owned company as director, employee, consultant, or otherwise.
7. Non-Solicitation. So long as you are a member of the Board and for a period of 12 months thereafter, you shall not directly or indirectly solicit for employment any individual who was an employee of the Company during your tenure.
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8. Termination and Resignation. Your membership on the Board may be terminated for any or no reason by an Ordinary Resolution, as defined in the Company’s memorandum and articles of association, as amended. Your membership on the Board or on any Board committee shall be terminated if you become of unsound mind, are prohibited by law from acting as a director, or are subject to any other conditions as specified in the Company’s memorandum and articles of association, as amended. Your membership on any Board committee will be terminated on the same effective date when your membership on the Board is terminated. You may also terminate your membership on the Board or on any Board committee for any or no reason by delivering your written notice of resignation to the Company (“Resignation”), and such Resignation shall be effective upon the time specified therein or, if no time is specified, upon receipt of the notice of Resignation by the Company. Upon the effective date of the termination or Resignation, your right to compensation hereunder will be subject to the Company’s obligations to pay you any compensation (including the vested portion of the securities of the Company) that you have already earned and to reimburse you for approved expenses already incurred in connection with your performance of your Duties as of the effective date of such termination or Resignation. Any securities of the Company that have not vested as of the effective date of such termination or Resignation shall be forfeited and cancelled.
9. Governing Law. All questions with respect to the construction and/or enforcement of this Agreement, and the rights and obligations of the parties hereunder, shall be determined in accordance with the internal laws of the State of New York without regard to conflict of laws provisions therein.
10. Entire Agreement; Amendment; Waiver; Counterparts. This Agreement expresses the entire understanding with respect to the subject matter hereof and supersedes and terminates any prior oral or written agreements with respect to the subject matter hereof. Any term of this Agreement may be amended and observance of any term of this Agreement may be waived only with the written consent of the parties hereto. Waiver of any term or condition of this Agreement by any party shall not be construed as a waiver of any subsequent breach or failure of the same term or condition or waiver of any other term or condition of this Agreement. The failure of any party at any time to require performance by any other party of any provision of this Agreement shall not affect the right of any such party to require future performance of such provision or any other provision of this Agreement. This Agreement may be executed in separate counterparts each of which will be an original and all of which taken together will constitute one and the same agreement, and may be executed using facsimiles of signatures, and a facsimile of a signature shall be deemed to be the same, and equally enforceable, as an original of such signature.
11. Indemnification. The Company shall, to the maximum extent provided under applicable law, indemnify and hold you harmless from and against any expenses, including reasonable attorney’s fees, judgments, fines, settlements, and other legally permissible amounts (“Losses”), incurred in connection with any proceeding arising out of, or related to, your performance of your Duties, other than any such Losses incurred as a result of your negligence, fraud, bad faith, or willful misconduct. The Company shall advance to you any expenses, including reasonable attorneys’ fees and costs of settlement, incurred in defending any such proceeding to the maximum extent permitted by applicable law. Such costs and expenses incurred by you in defense of any such proceeding shall be paid by the Company in advance of the final disposition of such proceeding promptly upon receipt by the Company of (a) written request for payment; (b) appropriate documentation evidencing the incurrence, amount, and nature of the costs and expenses for which payment is being sought; and (c) an undertaking adequate under applicable law made by or on your behalf to repay the amounts so advanced if it shall ultimately be determined pursuant to any non-appealable judgment or settlement that you are not entitled to be indemnified by the Company.
12. Not an Employment Agreement. This Agreement is not an employment agreement, and shall not be construed or interpreted to create any right for you as an employee of the Company.
13. Acknowledgement. You accept this Agreement subject to all the terms and provisions of this Agreement. You agree to accept as binding, conclusive, and final all decisions or interpretations of the Board of the Company of any questions arising under this Agreement.
[Signature Page Follows]
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This Agreement has been executed and delivered by the undersigned and is made effective as of the date set first set forth above.
| Sincerely, |
| Metalpha Technology Holding Limited | ||
| By: | Bingzhong Wang | |
| Title: | Chief Executive Officer | |
AGREED AND ACCEPTED:
| By: |
5
Schedule A
The Director is offered to serve on the following Board committee(s):
| Committee | Title | |
| Audit Committee | Chair / Member | |
| Nominating and Corporate Governance Committee | Chair / Member | |
| Compensation Committee | Chair / Member |
6
Schedule B
Compensation
During your term as a member of the Board, you will receive cash compensation in the amount of HKD__________ per year, which shall be paid to you quarterly at the end of each quarter.
7
Exhibit 4.7
Employment Agreement
Metalpha Technology Holding Limited
This Employment Agreement is entered into on _____________ between Metalpha Technology Holding Limited (hereinafter referred to as “Company”) and __________ (hereinafter referred to as “you” or “Employee”) under the terms and conditions of employment below:
| 1 | Interpretation |
| 1.1 | In this Agreement, save where the context otherwise requires, the following terms shall have the meanings ascribed to them as follows: |
“Confidential Information” means any information, technical data, trade secrets, know-how and other information of a similar nature (whether or not originated by the Employee and whether or not reduced to writing or designated as confidential), relating to the Company or any member of the Group or their respective clients or otherwise obtained by the Employee in the course of performing his/her duties hereunder;
“Group” means the Company, its subsidiaries, its holding company (whether directly or indirectly) and other subsidiaries of the holding company and “member of the Group” shall be construed accordingly.
“Leave Year” means any period of 12 months commencing on the Commencement Date and an anniversary of such day.
| 1.2 | In this Agreement, words importing the singular include the plural and vice versa, words importing gender or the neuter include both genders and the neuter, and references to persons include bodies corporate. |
| 1.3 | Any words following the terms including, include, in particular, for example, or any similar expression shall be construed as illustrative and shall not limit the sense of the words, description, definition, phrase or term preceding those terms. |
Suite 5506-07, Central Plaza, 18 Harbour Road, Wan Chai, HONG KONG
| 2 | Appointment |
| 2.1 | You will be appointed as ______________ of the Company. |
| 2.2 | If you are not a Hong Kong permanent resident, your appointment under this Agreement is conditional on your possession of a valid visa for work in the Company. |
| 2.3 | Your official place of work will be Hong Kong. You will, however, work at and/or travel to such places (inside or outside Hong Kong) as the Company may reasonably require from time to time. |
| 3 | Duration |
| 3.1 | Subject to clause 2.2, your employment under this Agreement shall commence from the first day that you report to work for the Company (“Commencement Day”) which shall be mutually agreed by the parties hereto separately, and shall continue and be binding unless and until terminated in accordance with the provisions herein. |
| 3.2 | The first three (3) months of this Agreement will constitute a probationary period. During the first month of probation, either party may terminate the employment without advance notice or payment in lieu. During the remainder of the probationary period, either party may terminate the employment by giving 7 days’ notice in writing or payment in lieu of notice. Upon successful completion of the probationary period, either party may terminate the employment by giving one (1) month’s notice in writing or payment in lieu of notice. |
| 4 | Your Duties |
| 4.1 | You shall, during the continuance of this Agreement: |
| 4.1.1 | undertake such duties and exercise such powers as the Company shall from time to time assign to you; |
Suite 5506-07, Central Plaza, 18 Harbour Road, Wan Chai, HONG KONG
| 2 |
| 4.1.2 | devote such time, attention and skill substantially to the performance of your duties hereunder and faithfully and diligently perform your duties hereunder. |
| 4.2 | The directors of the Company reserve the right to vary your assignment and duties from time to time. |
| 4.3 | You shall at all times endeavor to promote the interests and reputation of the Company. |
| 5 | Working Hours |
| 5.1 | The normal working hours of the Company are from 9am to 6pm on Monday to Friday during which period one hour may be taken each day for lunch. |
| 5.2 | You may be required to work such hours outside normal working hours of the Company as the Company considers necessary to meet the needs of the business and you understand and agree that your salary has been set at a level to include these further working hours and therefore you will not be paid for such further hours. |
| 6 | Pay and Benefits in Kind |
| 6.1 | Your basic salary will be per month and will be _____________ paid in arrears at the end of the month. |
| 6.2 | At the sole discretion of the Company, you may be eligible to receive additional bonus based upon your performance. |
| 6.3 | The Company may cause any payment payable to you hereunder to be paid by any member of the Group. |
| 6.4 | If you are not an exempt person as defined under the Hong Kong Mandatory Provident Fund (“MPF”) legislation, you shall participate in Company’s MPF scheme. Both the Company and you will contribute to the MPF scheme at the rate specified by relevant legislation. |
| 7 | Annual Leave |
| 7.1 | Your annual leave entitlement is currently _____________ working days per Leave Year in addition to the normal Public Holidays in Hong Kong. |
Suite 5506-07, Central Plaza, 18 Harbour Road, Wan Chai, HONG KONG
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| 7.2 | You are entitled to pro-rata annual leave on completion of 3 months but less than 12 months’ service in a Leave Year if your employment is terminated unless you are dismissed by summary dismissal. |
| 7.3 | Annual leave must be taken in accordance with the Regulations (as defined below), at times convenient to the Company and sufficient notice of an intention to take leave must be given to your supervisor. |
| 8 | Sick Leave |
| 8.1 | In the event of absence on account of sickness or injury, you (or someone on your behalf) must inform the Company of the reason of your absence as soon as possible and must do so no later than the end of the working day on which absence first occurs. |
| 8.2 | In respect of absence lasting one or more calendar days you must provide the Company with a medical certificate acceptable to the Company certifying that you are advised by the doctor to take such leave in order to be entitled to any paid sick leave. |
| 8.3 | You shall be entitled to paid sick leave of up to two (2) days per calendar month or otherwise in accordance with the employment law of Hong Kong. |
| 8.4 | There will be no payment in lieu of any unused sick leave entitlement. |
| 9 | Termination |
| 9.1 | Your employment may be terminated by the Company in accordance with clause 3.2 above, or without advance notice or pay in lieu of notice in the event of your serious and willful misconduct or in accordance with clause 12 hereof, to the extent permitted by law. |
| 9.2 | At the end of your employment, for whatever reason, you must: |
| 9.2.1 | upon request, resign from any directorship or other offices held by you in the Company or any member of the Group by virtue of your employment and transfer to the Company, or as it may otherwise direct, any shares or other securities held by you as nominee or trustee for the Company or any member of the Group without payment in either case. If you fail to do so within seven days of such request, the Company is hereby irrevocably authorized to appoint a person in your name and on your behalf to execute any documents or do any things necessary for such purpose(s) (all of which shall be without prejudice to any claims which you might otherwise have against the Company); |
Suite 5506-07, Central Plaza, 18 Harbour Road, Wan Chai, HONG KONG
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| 9.2.2 | immediately deliver up to the Company all correspondence, documents, specifications papers and other property, including, without limitation, customer lists, reports, and other materials belonging to or relating to the business of any member of the Group in whatever form (including anything saved in any electronic media) which may be in your possession or under your control. |
| 10 | Confidentiality |
You shall not (except in the proper performance of your duties hereunder or with the express written consent of the Company) during or after termination of your employment disclose to any person whatsoever any Confidential Information, provided that this prohibition shall not apply to any information which shall have come into the public domain other than by your breach hereof.
| 11 | Company Regulations |
| 11.1 | You must comply with all rules, regulations, procedures, instructions, and policies of the Company or the Group, as shall apply from time to time, including without limitation, the Staff Handbook (collectively, the “Regulations”) and all such Regulations shall be read with, and shall be deemed to form part of, this Agreement. In the event of any conflict between the Regulations and the provisions of this Agreement, this Agreement shall prevail. The Company reserves the right to amend, supplement, withdraw or reissue all Regulations in its sole discretion and you shall be deemed to have agreed to all such amendments, supplements, withdrawal or reissuance of the Regulations upon notice. |
| 11.2 | Without limiting the generality of the foregoing, unless with prior written consent of the Company, you shall not market or otherwise provide any services or products of the Company or the Group to any PRC Person, U.S. Person or persons of any other jurisdictions which imposes any prohibition, conditions or restrictions or requires any license or regulatory approval on the provision of such services or products. You shall be solely responsible for any liabilities and shall fully indemnify the Company and any member of the Group against such liabilities (including any legal costs) arising out of your non-compliance with the foregoing provided that your liability shall not exceed the losses directly caused by your willful misconduct or gross negligence. For the purpose of this sub-clause, PRC Person include corporations or organizations established under the laws applicable in Mainland China and Mainland China citizens who ordinarily reside therein. US Person include US citizens and corporations or organizations established under US law. |
Suite 5506-07, Central Plaza, 18 Harbour Road, Wan Chai, HONG KONG
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| 12 | Dismissal |
| 12.1 | The Company can dismiss you without prior notice or pay in lieu of notice (and you will not be entitled to compensation or damages) if you: |
| 12.1.1 | commit any act of gross misconduct or gross incompetence or other repudiatory breach of this Agreement; |
| 12.1.2 | without reasonable excuse and after prior written warning, repeat or continue any breach of this Agreement; |
| 12.1.3 | commit such misconduct outside work or fall into such disrepute that in the opinion of the Company your continued employment will materially prejudice the interests of the Company or any member of the Group; |
| 12.1.4 | are convicted of any criminal offence (other than a road traffic offence for which you are not sentenced to any term of imprisonment); |
| 12.1.5 | become bankrupt, apply for or have a receiving order made against you or enter into any voluntary arrangement with your creditors; or |
| 12.1.6 | die or become mentally unsound or be incapacitated by illness for a continuous period of more than 120 working days. |
| 12.2 | Once notice of dismissal or resignation has been given by either side, the Company may at any time and for any period(s) require you to cease performing your job and/or exclude you from entering any premises of the Group. |
Suite 5506-07, Central Plaza, 18 Harbour Road, Wan Chai, HONG KONG
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| 13 | Miscellaneous |
| 13.1 | Any notice to be given under this Agreement must be in writing and must either be delivered by hand or courier or sent by first class pre-paid post (or facsimile if the recipient has a facsimile number). Notices to the Company must be addressed to its registered office or sent to the Company’s secretary’s facsimile number, as the case may be. Notices to you must be addressed to your last known home address or sent to your facsimile number (if any) at your last known home address, as the case may be. A notice shall be deemed to have been served at the time of delivery if delivered by hand or courier, two clear days after the time of posting if sent by first class pre-paid post, and at the time of completion of transmission by the sender if sent by facsimile. |
| 13.2 | No variation to this Agreement will be of any effect unless it is agreed in writing and signed by or on behalf of all parties. |
| 13.3 | If any provision of this Agreement (wholly or partly) is or becomes illegal, invalid or unenforceable, that shall not affect the legality, validity or enforceability of any other provision of this Agreement. If any provision of this Agreement (wholly or partly) is or becomes illegal, invalid or unenforceable but would be legal, valid and enforceable if the provision or some part of the provision was deleted or modified, the provision or part of the provision in question shall apply with such deletions and modifications as may be necessary to make it legal, valid and enforceable. |
| 13.4 | The validity, construction and performance of this Agreement shall be governed by the laws of Hong Kong. |
| 13.5 | All disputes, claims or proceedings between the parties relating to the validity, construction, performance or termination of this Agreement shall be subject to the non-exclusive jurisdiction of the Hong Kong courts. |
| 13.6 | Termination of this Agreement shall not affect any provisions which are intended to operate after termination. |
Suite 5506-07, Central Plaza, 18 Harbour Road, Wan Chai, HONG KONG
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| 13.7 | The Company reserves the right, and you agree, to the deduction of any debts you owe to the Company from your wages to the extent allowed by law. |
| 13.8 | This Agreement sets out the entire agreement and understanding between the parties relating to the matters contemplated hereunder and supersedes all previous agreements (if any and whether in writing or not) between the parties in relation to such matters. |
If you agree to the above terms and conditions, please sign and return the duplicate copy of this letter for our retention.
| For and on behalf of: | Confirmed and agreed by (Employee): | |
| Metalpha Technology Holding Limited | ||
| Name: | Name: | |
| Director | HKID: |
Suite 5506-07, Central Plaza, 18 Harbour Road, Wan Chai, HONG KONG
| 8 |
Exhibit 4.10
I N D E X
| PARTIES | ||
| CLAUSE 1 | AGREEMENT | |
| Premises | ||
| Term | ||
| CLAUSE 2 | ||
| Rent | ||
| CLAUSE 3 | ||
| (a) | Deposit | |
| (b) | Transfer of Deposit | |
| (c) | Deposit not to be treated as rent | |
| (d) | Increase in Services Charges Deposit | |
| CLAUSE 4 | TENANT’S OBLIGATIONS | |
| (a) | Rent | |
| (b) | Rates | |
| (c) | Utility Charges | |
| (d) | Directory Boards & consent fee | |
| (e) | Water Charges | |
| (f) | (i) | Service Charges |
| (ii) | Adjustment of Services Charges | |
| (iii) | Additional Service Charges | |
| (iv) | Air-conditioning Zone | |
| (g) | Non-payment of Rates & Services Charges treat as non-payment of Rent | |
| (h) | (i)-(ix) Interior Repair | |
| (x) | Indemnity against loss/damages from interior defects | |
| (xi) | Third Parties Insurance | |
| (i) | Storm and Typhoon | |
| (j) | Vermin and Infestation | |
| (k) | Use service lift | |
| (l) | Rules and Regulations | |
| (m) | Entry by Landlord | |
| (n) | Pipes and Conduits | |
| (o) | Adjacent excavation | |
| (p) | Explosive or unlawful goods | |
| (q) | Manufacturing of goods | |
| (r) | Floor loading | |
| (s) | Keep windows and doors closed | |
| 1 |
| (t) | (i) | Noise and disturbance |
| (ii) | Prohibition of Sale by auction | |
| (u) | Prohibition of illegal immoral use or gambling | |
| (v) | User | |
| (w) | Prohibition of alterations | |
| (x) | Movement of safe, etc. | |
| (y) | Observance of Laws and Conditions of Sale or Government Lease | |
| (z) | Prohibition of Subletting or Transfer | |
| (aa) | Prohibition of Domestic Use | |
| (bb) | Obstruction of common passages | |
| (cc) | Exhibition of signboard | |
| (dd) | Breach of insurance policy | |
| (ee) | Security guards | |
| (ff) | Tenant’s association | |
| (gg) | To permit viewing the premises | |
| (hh) | Installation of electrical wiring | |
| (ii) | Delivery of vacant possession upon expiration | |
| CLAUSE 5 | LANDLORD’S OBLIGATIONS | |
| (a) | Quiet possession | |
| (b) | Structural repair | |
| (c) | Government Rent and Property Tax | |
| CLAUSE 6 | PROVISOS | |
| (a) | Default | |
| (b) | Supply of air-conditioning services | |
| (c) | Damages by fire and other cause | |
| (d) | Landlord not bound by representation | |
| (e) | No waiver | |
| (f) | Landlord’s inability to perform no excuse for non-payment of rent | |
| (g) | Acts by Tenant’s servants etc. | |
| (h) | Meaning of Tenant | |
| (i) | Tenant waives protection | |
| (j) | Acceptance of rent | |
| (k) | Tenant to indemnify Landlord against claim by Third Party | |
| (l) | Access in repairing works | |
| (m) | Change of Building Name | |
| (n) | Distraint | |
| (o) | No fine | |
| (p) | Service of Notice | |
| (q) | Legal Cost & Stamp Duty | |
| 2 |
| CLAUSE 7 |
| Not to use Building name/logo |
| CLAUSE 8 |
| Confidentiality |
| CLAUSE 9 |
| Contracts (Rights of Third Parties) |
| CLAUSE 10 |
| Handover Condition |
| CLAUSE 11 |
| Miscellaneous charges |
| CLAUSE 12 |
| Governing Law and Jurisdiction |
| CLAUSE 13 |
| Government Definition |
| CLAUSE 14 |
| Lettable Area |
| FIRST SCHEDULE |
| Part IA - Landlord |
| Part IB - Tenant |
| Part II - Premises |
| Part III - Term |
| SECOND SCHEDULE |
| Part I - Particulars of rent |
| Part II - Deposit |
| Part III - Service Charges |
| THIRD SCHEDULE |
| Part I - Fit out Works |
| Part II - Building Rules & Regulations |
| Part III - Landlord’s right |
| Part IV - Management Company |
| FOURTH SCHEDULE |
| Special Condition |
| 3 |
AN AGREEMENT
made the day of
Two Thousand and Twenty-Five
BETWEEN the person, persons or company more particularly described in Part IA of the First Schedule hereto (hereinafter called “the Landlord”) of the one part and the person, persons or company more particularly described in Part IB of the First Schedule hereto (hereinafter called “the Tenant”) of the other part.
WHEREBY IT IS HEREBY AGREED as follows :-
1. The Landlord hereby demises and the Tenant hereby takes the premises more particularly described in Part II of the First Schedule hereto shown and coloured pink on the plan hereto annexed for the purpose of identification only and is hereinafter referred to as “the said premises” Together with the use in common with the Landlord and his tenants work-people and persons authorised by them of the entrances, passages and staircases leading to the said premises (so far as the same are necessary for the use and enjoyment of the said premises) And of the lavatories on the same floor and to enjoy the central air-conditioning services and of the lifts and escalators service (whenever the same shall be operating) Excepting and Reserving unto the Landlord the rights as set out in Part III of the Third Schedule hereto for the term more particularly specified in Part III of the First Schedule hereto both days inclusive (“the said term”) determinable as hereinafter mentioned.
2. The monthly rental for the said premises for the said term shall be such sum or sums as specified in Part I of the Second Schedule hereto which said sum or sums shall be payable exclusive of rates and service charges (which consist of the management fee which includes the internal cleaning charges and air-conditioning charges) payable in Hong Kong Currency in advance on the first day of each and every calendar month without deduction whatsoever, the first of such payments shall be apportioned according to the number of days then unexpired in the month in respect of which such payment is made and the last of such payments shall be apportioned according to the number of days of the said term remaining in the month in respect of which such payment is due.
| 3. | (a) The Tenant will on the signing of this Agreement pay to the Landlord the sum as set out in Part II of the Second Schedule hereto by way of total deposit for the due performance and observance of the agreements on the part of the Tenant herein contained (“the Deposit”). At the expiration or sooner determination of this Agreement subject to prior forfeiture in accordance with Clause 6(a)(i) hereof if the Tenant shall have paid all rent due hereunder and if there shall be no breach of any of the agreements on the Tenant’s part to be observed and performed the Landlord will repay to the Tenant the Deposit after delivery of vacant possession of the said premises to the Landlord by the Tenant and after full settlement of all outstanding payments due and payable by the Tenant hereunder whichever is later but without any interest thereon but if there shall be any rent or other sums due hereunder in arrears the Landlord shall apply the Deposit towards payment of such arrears and if there shall be any breach of any of the covenants terms and conditions herein contained the Landlord shall pay or apply the Deposit or such part thereof towards remedying such breach (in so far as this may be possible) and shall only pay the balance (if any) of the Deposit to the Tenant. |
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| (b) | The parties hereto agree that in the event of the Landlord assigning or transferring the ownership of the said premises or the said Building of which the said premises forms part to any person (“the New Owner”) prior to the termination of the term of this tenancy subject to and with the benefit of this Tenancy Agreement, the Landlord may transfer the Deposit paid by the Tenant hereunder (less any deduction which the Landlord may make according to the terms of this Agreement and the Deposit or the balance thereof after the said deduction) to the New Owner and in that event the Tenant shall waive all claims against the Landlord for the refund of the Deposit but nothing herein provided shall prejudice or affect the right of the Tenant to claim against the New Owner for refund of the same AND a written notice sent by the Landlord or the Landlord’s Solicitors by ordinary post to the Tenant to the address stated herein notifying the change of ownership of the said premises shall be conclusive evidence that the Deposit has been transferred to the New Owner unless the contrary intention is expressed in the said notice. |
| (c) | In no event shall the Tenant be entitled to treat payment of the Deposit as payment of the rent hereby reserved. |
| (d) | If at any time the rent and Service Charges payable by the Tenant hereunder shall increase the Tenant shall on demand, increase the amount of the Deposit paid so that it is equivalent to three (3) months’ rent and three (3) months’ Service Charges as defined in Clause 4(f) hereof and failure to pay such increase by the Tenant shall justify forfeiture of this tenancy pursuant to the provision of Clause 6(a)(i) hereof. |
4. THE TENANT AGREES WITH THE LANDLORD as follows:-
| (a) | To pay the rent herein reserved in manner aforesaid and to pay other charges due hereunder in manner hereinafter mentioned. |
| (b) | To pay and discharge punctually as from the date of possession of the said premises is delivered to the Tenant and during the said term all rates quarterly in advance within the months of January April July and October Provided that the first payment thereof shall be paid on the commencement of this Agreement and in the event of the said premises not having been assessed to rates by the Government to pay such sum (at 5% of the rent hereby reserved) as shall be required by the Landlord as a deposit by way of security for the due payment of rates subject to adjustment on actual rating assessment being received from the Government and also to pay and discharge all taxes assessments duties charges impositions and outgoings whatsoever now or hereafter to be imposed or charged on the said premises or upon the owner or occupier in respect thereof by the Government of Hong Kong or other lawful authority Government Rent and Property Tax alone excepted. |
| 5 |
| (c) | To pay and discharge punctually during the said term all charges for electricity (including charges for the air-conditioning variable air volume boxes or air-handling units installed therein and operated from the Tenant’s own metered electricity supply) telephone rental and other outgoings now or at any time hereafter consumed by the Tenant and chargeable in respect of the said premises and to make all necessary deposits for the supply of electricity and other utilities services to the said premises when required. |
| (d) | (i) To pay the Landlord or its Management Company as set out in Part IV of the Third Schedule hereto (hereinafter referred to as “the Management Company”) immediately upon demand the cost of affixing repairing altering or replacing as necessary the Tenant’s name to the directory boards at the said Building. |
| (ii) | To pay to the Landlord or the Management Company on demand all costs charges and expenses which may be incurred by the Landlord for any licence or consent required by this Agreement. |
| (e) | To pay or reimburse to the Landlord water charges consumed where water shall be required otherwise than for normal toilet flushing/washing purposes and the Landlord may cause to be installed at the expense of the Tenant a separate water meter to measure the consumption thereof by the Tenant. Upon default in payment the Landlord may pay the charges according to the meter which the Tenant shall be responsible to keep in reliable working order and the Tenant shall refund the same on demand and repeated defaults committed by the Tenant shall be a breach justifying the Landlord’s right of re-entry. |
| (f) | (i) To pay to the Landlord or the Management Company punctually together with payment of rent during the said term such monthly contribution towards the costs, charges and expenses for the management and maintenance of the said Building and for the supply of air-conditioning to the said premises (hereinafter together referred to as “the Service Charges”) as shall reasonably be required by the Landlord or the Management Company and unless and until otherwise demanded by the Landlord or the Management Company such monthly contribution shall be a sum as set out in Part III of the Second Schedule hereto which shall be paid by the Tenant to the Landlord or the Management Company in advance on the first day of each and every calendar month during the said term without deduction whatsoever. |
| (ii) | If at any time during the said term the operating cost relative to the management and maintenance of the said Building and to the supply of air-conditioning services shall have risen the Landlord or the Management Company shall be entitled from time to time to increase the said Service Charges in proportion to the said increase. |
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| (iii) | If the Tenant shall require air-conditioning service outside the hours set out in Clause 6(b) hereof, the same can normally be provided on reasonable advance notice (at least 24 hours in advance and must not be less than 2 consecutive hours during weekdays and 4 consecutive hours during Sunday and public holiday) to the Management Company at such special rate as the Landlord may from time to time charge according to the cost of providing the same for every zone area or part thereof for which air-conditioning is provided to be paid on demand from the Landlord or the Management Company. |
| (iv) | Each floor of the said Building is divided into 6 separate air-conditioning zones. The Tenant shall pay the cost of the additional air-conditioning on receipt of the demand note therefor which may be rendered weekly or at such other intervals as the Landlord may decide. |
| (g) | The Landlord shall be entitled to treat non-payment of any amount debited to the Tenant in accordance with Clauses 4(b) and (f) or any part thereof in all respects as non-payment of rent under this Agreement. |
| (h) | To keep all the interior of the said premises including the flooring and interior plaster or other finishing materials or rendering to walls floors and ceilings and the Landlord’s fixtures and fittings therein including all doors windows electrical installations in good clean tenantable substantial and proper repair and condition and properly preserved and painted as may be appropriate when from time to time required and to so maintain the same at the expense of the Tenant and deliver up the same to the Landlord at the expiration or sooner determination of the term in the like condition. The Tenant particularly agrees :- |
| (i) | to reimburse to the Landlord the cost of replacing all broken and damaged windows or window glass whether the same be broken or damaged by the negligence of the Tenant or owing to circumstances beyond the control of the Tenant; |
| (ii) | to reimburse to the Landlord the cost of repairing or replacing the curtain walls and shutters of or in the said Building or any part thereof in the event of the same being broken or damaged by the Tenant or by any servant, agent or licensee of the Tenant; |
| (iii) | to reimburse to the Landlord the cost of repairing or replacing any ceiling, lighting air-conditioning variable air volume boxes or any other part of the air-conditioning system which is damaged or rendered defective by the misuse or negligence of the Tenant or any of the Tenant’s servants, agents, licensees or customers; |
| 7 |
| (iv) | to repair or replace if so required by the appropriate Supply Company Statutory Undertaker or Authority as the case may be under the terms of any Electricity Ordinance for the time being in force or any statutory modification or re-enactment thereof or any Regulations made thereunder, all the electrical wiring installations and fittings within the said premises and the wiring from the Tenant’s meter or meter to and within the same to the satisfaction of the Landlord and to engage contractor approved by the Landlord in such installation and repair; |
| (v) | in the last 3 months prior to the expiration of this Agreement or upon earlier determination of this Agreement to paint french polish or otherwise treat as the case may be all the inside wood and metal work of the said premises in a workmanlike manner and grain varnish and clean the parts of the said premises as usually grained, varnished and cleaned and to paint or paper with good quality materials in a workmanlike manner all walls and ceilings to be executed in such colours patterns and materials as the Landlord may require; |
| (vi) | upon the signing of this Agreement, to submit to the Management Company 6 sets of decoration plan and mechanical and electrical drawing fire services installation drawing and air-conditioning plan in respect of the said premises for the approval of the Management Company who may in its absolute discretion accept, reject or demand amendments of such plan and drawing or any part thereof as they think fit and the Tenant shall pay the approval fee chargeable by the Management Company; |
| (vii) | for carrying out such items of the fitting out and decoration works as set out in Part I of the Third Schedule hereto, to employ and engage only contractor or contractors which are of reasonably competent skill not only by relevant industry standard but also to such level commensurate with the said Building as a premier top-class office building in the central business district of Hong Kong and recommended or approved by the Landlord basing on the said requirements; and for carrying out any other approved fitting out and decoration works to the said premises, to employ and engage contractor or contractors of reasonably competent skill by the relevant industry standard engaged by the Tenant and approved by the Landlord. |
| (viii) | to employ and engage contractor or contractors recommended or approved by the Landlord only for carrying out such items of the fitting out and decoration works as set out in Part I of the Third Schedule hereto and to employ and engage contractor or contractors engaged by the Tenant but approved by the Landlord for carrying out any other approved fitting out and decoration works to the said premises; |
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| (ix) | to be responsible for the installation of all necessary sub-main cable and wiring and the alterations of all mechanical and electrical installation at the said premises (if necessary) adaptable to the voltage supply as specified from time to time by the Landlord and pay for all installation and alteration charges; |
| (x) | to be wholly responsible for any damage or injury caused to any other person or property directly or indirectly through the defective or damaged condition of any part of the interior of the said premises and to make good the same by payment or otherwise and to indemnify the Landlord against all claims demands actions and legal proceedings whatsoever made upon the Landlord by any person in respect thereof. For the better observance of this clause the Tenant undertakes to effect adequate insurance cover in respect of such risks. The policy of such insurance shall be endorsed to show the Landlord as the registered owner of the said premises and loss payee of the proceeds and shall contain a clause to the effect that the insurance cover thereby effected and terms and conditions thereof shall not be cancelled modified or restricted without the prior written consent of the Landlord; and |
| (xi) | to maintain adequate Third Parties insurance against any Third Parties claim as a result of accident or mishap arising within the said premises. |
| (i) | (i) To take all reasonable precautions to protect the interior of the said premises from damage threatened by any approaching storm or typhoon. |
| (ii) | In the event of the said Building being threatened by an approaching storm or typhoon to properly erect the shutter (if any) provided by the Landlord for the protection of window pane for which the Landlord has made provision in the design of the external windows and to keep and preserve such shutters at the Tenant’s expense and not to remove the same from the said premises except for the purpose of necessary repair. |
| (j) | To ensure that the said premises do not become infested with insects or vermin. In the event of the said premises becoming so infested the Tenant shall pay the cost of extermination as arranged or approved by the Landlord and the selected exterminators shall be given full access to the said premises for such purpose. |
| (k) | To load and unload heavy furniture and chattels only at such times during business hours at such spaces and through such entrances and by such service lifts as shall be designated by the Management Company for this purpose from time to time. |
| (l) | To observe faithfully and comply strictly with the Building Rules and Regulations as the Landlord or the Management Company may from time to time adopt. Notice of any additional Building Rules and Regulations shall be given in such manner as the Landlord may elect. The Building Rules and Regulations set out in Part II of the Third Schedule hereto and such additional Building Rules and Regulations shall be binding upon the Tenant and shall have the same force and effect as if set out in the body of this Agreement. The main purpose of the Building Rules and Regulations is to maintain the said Building of which the said premises form part as a first-class office building. |
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| (m) | (i) To permit the Landlord or the Management Company with or without workmen or others and with or without appliances at all reasonable times to enter upon the said premises (and in the event of any emergency the Landlord or his agents may enter without notice and forcibly if need be) to view the condition thereof and to take inventories of the fixtures and fittings therein; to test the electric wiring; to read the meter and to do any other act or thing which may be required to be done by the Landlord or the Management Company in respect of the said premises, and to make good all defects and want of repair there found to be the liability of the Tenant to the satisfaction of the Landlord within the space of one calendar month or such shorter period as the case may demand from the time of receipt of notice written or verbal from the Landlord to amend or make good the same. |
| (ii) | If any defects or wants of repair shall be found and if the Landlord or the Management Company shall have either given or left a notice in writing at the said premises or given verbal notice to the Tenant requiring him to amend the same and if the Tenant shall not within 14 days after the service of such notice proceed diligently with the execution of such repairs then to permit the Landlord or the Management Company to enter upon the said premises and execute such repairs and the costs thereof (the amount thereof in case of difference to be determined by the Landlord) together with interest thereon at the rate of 12% per annum calculated from the commencement of such repair works shall be a debt due from the Tenant to the Landlord and be forthwith recoverable by action. |
| (n) | To permit the Landlord to erect use and maintain pipes and conduits in and through the said premises. The Landlord or the Management Company shall have the right to enter the said premises at all times to examine the same PROVIDED THAT the permission to the Landlord to use such pipes and conduits shall extend to the use of such pipes and conduits by the Landlord’s other authorized tenants and licensees, as the case may be. |
| (o) | If any excavation or other building works shall be made or authorised in the vicinity of the said Building, the Tenant shall permit the Landlord or the Management Company to enter the said premises to do such work as may be deemed necessary to preserve the exterior walls of the said Building from injury or damage without any claim for damages or indemnity against the Landlord. |
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| (p) | Not to keep or store or allow to be kept or stored upon the said premises or any part thereof during the term any arms, ammunition, saltpetre, gun-powder, kerosene or any other explosive combustible or unlawful or dangerous goods or substance on or in any part of the said premises save and except licensed shotguns for use by the guards for security purpose the keeping and storage of which shall in no way constitute a contravention of the Laws of Hong Kong. |
| (q) | Not to use or permit or suffer the said premises to be used for the purpose of the manufacture of goods and merchandise nor for the storage of goods or merchandise other than in small quantities in consistence with the nature of the Tenant’s business as by way of samples and exhibits. |
| (r) | The Tenant shall not place any load upon any floor of the said premises in excess of the loading capacity for which the floor is designed. The Landlord reserves the right to prescribe the weight and position of all safes which must be placed so as to distribute the weight, business machines and mechanical equipment authorised by the Landlord shall be placed and maintained by the Tenant at the Tenant’s expense in settings sufficient in the Landlord’s judgement to absorb and prevent vibration noise and annoyance to occupiers of other portions of the said Building. |
| (s) | The said premises are air-conditioned and the Tenant further agrees to keep all the windows and doors closed while air-conditioned ventilation is in operation and the Landlord shall have the right to send a representative to close the same for the Tenant should it be found that the Tenant does not comply with the notice to that effect and the persistent breach of the Tenant of this clause is a breach of the term of this Agreement justifying the Landlord to exercise the rights of re-entry or other remedies hereunder. |
| (t) | (i) Not to do or produce or suffer or permit to be done or produced any music noise (including sound produced by broadcasting from Television, Radio or any apparatus or instrument capable of producing or reproducing music and sound) or other acts or things in or on the said premises which is, are or may be a nuisance or annoyance to the Landlord or to the tenants or occupiers of adjacent or neighbouring premises. |
| (ii) | Not to permit or suffer any sale by auction to be held upon the said premises. |
| (u) | Not to use the said premises or any part thereof for any illegal or immoral purpose or for gambling of any nature. |
| (v) | Not to use the said premises for any purpose other than as office premises for carrying on the lawful business of the Tenant only and to conduct therein only such business which are duly authorised licensed or approved by the competent Government Authorities and to comply in all respects with the conditions terms and regulations relating to such business or imposed on the granting of the licence in respect thereof. |
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| (w) | (i) Not to make or permit to be made any alterations in or additions to the said premises or to the electrical installation or other Landlord’s fixtures and fittings therein or install any plant apparatus or machinery therein or cut maim or injure or suffer to be cut maimed or injured any doors windows walls structural members or other fabric thereof without having first obtained the written licence and consent of the Landlord therefor. In particular, any structural alterations additions so approved shall be carried out only by such person or contractor of reasonably competent skill by relevant industry standard as shall be approved by the Landlord or the Management Company. |
| (ii) | To fit out the interior of the said premises in accordance with the plans approved by the Landlord a copy whereof is retained by each of the parties hereto. The Tenant will not cause or permit to be made any variation to the interior design or layout of the said premises without the prior written approval of the Landlord first having been obtained and in the event of such approval being requested it shall be a condition precedent to the granting thereof that the Tenant shall pay to the Landlord any fees incurred by the Landlord in obtaining the approval of its architect for the relocation of any interior partitioning. |
| (x) | Not to move any safe heavy machinery equipment freight bulky matter or fixtures in and out of the said Building without first obtaining the Landlord’s written consent. The Tenant shall keep the Landlord indemnified against all damages sustained by any person or property and for any damages or monies paid out by the Landlord in settlement of any claim or judgments as well as legal costs incurred in connection therewith and all costs incurred in repairing any damage to the said Building or its appurtenances resulting from movement of any heavy machinery equipment freight bulky matter or fixtures. |
| (y) | To be answerable and responsible for the consequence of any breach of local ordinances orders in Council or Regulations by any inmate or occupier of the said premises and not to do anything in contravention of the provisions of the Conditions of Sale or Government Lease under which the Landlord holds the said premises or of the Deed of Mutual Covenant of the said Building (if any) and to indemnify the Landlord against any breach of the terms of this clause. |
| (z) | Not to assign underlet or otherwise part with the possession of the said premises or any part thereof either by way of subletting lending sharing or other means whereby any person or persons not a party to this Agreement obtains the use or possession of the said premises or any part thereof irrespective of whether any rental or other consideration is given for such use or possession and in the event of any such transfer subletting sharing assignment or parting with the possession of the said premises (whether for monetary consideration or not) this Agreement shall at the option of the Landlord absolutely determine and the Tenant shall forthwith surrender the said premises to the Landlord Provided that the happening of any of the following shall be considered a breach of this clause :- |
| (i) | in the case of a Tenant which is a partnership the taking in of one or more new partners whether on the death or retirement of an existing partner or otherwise. |
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| (ii) | in the case of a Tenant who is an individual (including a sole proprietor or a sole surviving partner of a partnership tenant) the death, insanity or other disability of that individual to the intent that no right to use, possess, occupy or enjoy the said premises or any part thereof shall vest in the executors, administrator, personal representatives, next of kin, trustee or committee of any such individual, or the admission of new partner or partners. |
| (iii) | in the case of a Tenant which is a corporation, any reconstruction, amalgamation, merger, liquidation (either voluntary or otherwise) or change in the person or persons who own a majority of its voting shares save, in the last mentioned case only, where the Tenant is a public company whose shares are quoted on any established stock exchange or over-the-counter market whether in Hong Kong or elsewhere. |
| (iv) | the giving by the Tenant of a Power of Attorney or similar authority whereby the donee of the Power obtains the right to use, possess, occupy or enjoy the said premises or any part thereof or does in fact use, possess, occupy or enjoy the same. |
| (v) | the change of the Tenant’s trade name without the previous written consent of the Landlord. In connection with any application for consent under this sub-clause, the Landlord may require the Tenant to produce such evidence as it may think fit to show that no breach of this clause has taken place or is about to take place. |
| (aa) | Not without the Landlord’s prior permission in writing to permit any person to remain in the said premises overnight. Such permission shall only be given to enable the Tenant to post watchmen to look after the contents of the said premises which shall not be used as sleeping quarters or as domestic premises within the meaning of any ordinance for the time being in force. |
| (bb) | Not to place or leave in the entrance or any of the staircases, common passages or landings of the said Building not in the exclusive occupation of the Tenant any boxes, goods, furniture, chattels, dust-bins, packing-cases, rubbish or other things or otherwise encumber the same and not to obstruct or permit or suffer to be obstructed any emergency lift access panels in the said premises. The Landlord or the Management Company shall have the right to remove the same at the Tenant’s expense and the Tenant shall indemnify the Landlord against all loss claims damages resulting from such removal. |
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| (cc) | Not to exhibit or display within or on the exterior of the said premises any writing sign or other device whether illuminated or not which may be visible from outside the said premises except the display of name-plate or signboard of the Tenant at the entrance to the said premises, the size and position of such name-plate or signboard shall be subject to the approval of the Landlord. The Landlord or the Management Company shall have absolute discretion in granting or refusing such approval and any approval to be granted shall be subject to such conditions as the Landlord or the Management Company may think fit or impose. The Landlord or his authorised agents shall have the right to remove at the cost and expense of the Tenant any signboard, sign, decoration or device which shall be affixed or put up or displayed without the prior approval of the Landlord or his agents. |
| (dd) | Not to do or permit to be done any act or thing whereby the policy or policies of insurance on the said premises against damage by fire or against claims by Third Parties for the time being subsisting may become void or voidable or whereby the rate of premium or premiums thereon may be increased and to repay to the Landlord on demand all sums paid by the Landlord by way of increased premium or premiums thereon and all expenses incurred by the Landlord in and about any renewal of such policy or policies rendered necessary by a breach of this clause. |
| (ee) | Not to employ any security organisation for the rendering of any services for or in connection with the said premises except with the prior written consent of the Landlord but to permit the Landlord’s servants or security guards to enter the said premises at all reasonable times for security purposes, and to connect and keep the said premises connected to any communal alarm or security system. |
| (ff) | Not to form or organise or attempt or make any effort to form or organise any tenants’ association or union jointly with any tenants of the said Building for whatever objects or purposes during the continuance of this Agreement. |
| (gg) | During the period of three months immediately before the expiration of the said term of this Agreement the Tenant shall permit all persons having written authorisation from the Landlord or the Management Company to enter and view the said premises and every part thereof at all reasonable times. |
| (hh) | To be responsible for all Tenant’s electrical wiring to the light fittings and to the other electrical outlets installations in the said premises and the connection thereto to the Electricity Authority meters and to make his own arrangement with the licensed telecommunication supplier in Hong Kong with regard to the installation of telephones in the said premises, but the installation of lines therefor outside the said premises must be in accordance with the Landlord’s directions. |
| (ii) | At the expiration or sooner determination of this Agreement to deliver up to the Landlord vacant possession of the said premises together with all Landlord’s fixtures and fittings in its original shell state and in such good repair and condition as aforesaid together with any additional erections alterations or improvements which the Tenant may with the consent of the Landlord as aforesaid have made upon or in the said premises and which the Landlord in his absolute discretion may be willing to retain without payment of any compensation for such additional erections alterations or improvements. The Tenant shall be entitled to remove and shall remove if so required by the Landlord its own trade fixtures subject to making good all damage including damage to the decoration within the said premises and within the said Building caused by such removal to the satisfaction of the Landlord. |
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5. THE LANDLORD AGREES WITH THE TENANT as follows:-
| (a) | To permit the Tenant (duly paying the rent and rates and observing and performing the terms and conditions herein contained) to have quiet possession and enjoyment of the said premises during the said term without any interruption by the Landlord or anyone lawfully claiming under or through or in trust for the Landlord save as specifically provided herein. |
| (b) | To amend and repair such defects in the roof main electricity supply cables main drain pipes main walls and exterior window frames of the said Building and the lifts escalators and air-conditioning plant therein as the Landlord shall discover or as the Tenant or other authorised person or Authority shall by notice in writing bring to the attention of the Landlord and to maintain the same in a proper state of repair and condition at the cost of the Landlord Provided that the Landlord shall be entitled to be given a reasonable period of time wherein to view any such defects and to amend and repair the same Provided further that the Landlord shall neither be liable to pay compensation to the Tenant in respect of any period during which due to circumstances beyond the control of the Landlord the proper operation of the said lifts and escalators shall be interrupted as the result of mechanical failure or need for repair or overhaul nor shall the Landlord be liable thereby to grant an abatement of rent or Service Charges in respect of such interruption. |
| (c) | To pay the Government Rent and Property Tax on the said Building. |
6. PROVIDED ALWAYS AND IT IS MUTUALLY AGREED as follows: -
| (a) | (i) If the rent reserved or any part thereof be in arrears for seven days (whether formally demanded or not) or in the case of the breach or non-performance of any of the stipulations and agreements herein contained on the part of the Tenant to be kept done or performed or if the Tenant (being an individual) shall become bankrupt or (being a corporation) shall go into liquidation or shall have any order made or resolution passed for its winding up or (being a firm or partnership) shall cease trading or shall have its Business Registration cancelled or shall enter into any composition or arrangement with his creditors or shall suffer execution to be levied upon any of his goods or effects it shall be lawful for the Landlord at any time thereafter to re-enter upon the said premises or any part thereof in the name of the whole and to forfeit the Deposit paid under Clause 3 hereof as and for liquidated damages and not as a penalty and thereupon this Agreement shall absolutely determine but without prejudice to any rights which may have accrued to the Landlord by reason of any antecedent breach of any of the obligations on the part of the Tenant hereinbefore contained AND a written notice served by the Landlord on the Tenant or left at the said premises to the effect that the Landlord thereby exercises the power of re-entry shall be a full and sufficient exercise of such power without actual entry on the part of the Landlord. Notwithstanding the foregoing, the Landlord may in any such event at its option elect not to terminate this Agreement but to deduct from the Deposit the amount of any monetary loss incurred by the Landlord in consequence of the breach, non-observance or non-performance by the Tenant (including legal cost and expenses mentioned in Clause 6(n) hereof) in which event the Tenant shall, as a condition precedent to the continuation of the tenancy, deposit with the Landlord the amount so deducted and, if the Tenant shall fail so to do, the Landlord shall forthwith be entitled to re-enter on the said premises and to determine this Agreement in which event the Deposit may be forfeited to the Landlord as hereinbefore provided. |
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| (ii) | Notwithstanding anything hereinbefore contained in the event rent and or Services Charges are not paid punctually on the first day of each month, the Tenant shall further pay to the Landlord on demand interest on the amount in arrears at the rate of 1.5% per month calculated from the date on which the same becomes due for payment (i.e. from the 1st day of each month as stipulated in First Schedule and Clause 4(f)(i) hereof) until the date of payment as liquidated damages and not as penalty provided that the demand and/or receipt by the Landlord of interest pursuant to this provisions shall be without prejudice to and shall not affect the right of the Landlord to exercise any other right or remedy hereof (including the right of re-entry) exercisable under the terms of this Agreement. |
| (iii) | In addition and without prejudice to the Landlord’s right under Clause 6(a)(i) and (ii) hereinabove, in the event of the Tenant failing to pay rent or committing any breach of this Agreement the Landlord may, and the Tenant hereby specifically authorises the Landlord to, cut off the supply of electricity and air-conditioning to the said premises and to dispose of all objects including goods merchandise equipment furniture and fixtures in or at the said premises in such manner as the Landlord shall deem fit, and any expenses in connection therewith shall be paid by the Tenant and shall be recoverable from it as a debt. |
| (b) | (i) The Landlord or the Management Company shall provide and maintain for the said premises during the said term a central air-conditioning service between 8:00 a.m. and 7:00 p.m. on weekdays and between 8:00 a.m. and 1:00 p.m. on Saturdays but no such service will be supplied on Sundays and Public Holidays Provided that if typhoon signal No.8 is hoisted, the Landlord or the Management Company may at its sole discretion suspend air-conditioning supply to the said premises for safety purposes And Provided that the Landlord shall neither be liable to pay compensation to the Tenant in respect of any period during which due to circumstances beyond the control of the Landlord the proper operation of the air-conditioning plant shall be interrupted as a result of mechanical failure or need for repair or overhaul nor shall the Landlord be liable thereby to grant an abatement of rent or Service Charges in respect of such interruption. |
| (ii) | Subject to the submission of a technical proposal to the Landlord for approval (which approval shall not be unreasonably withheld), the Tenant may at its own cost install its own fan coil equipment for its computer room for 24 hours operation but the supply of chilled water will be subject to a standard additional charge which shall be subject to review from time to time during the said term. |
| (c) | (i) If the said premises or any part thereof are rendered uninhabitable by fire water storm wind typhoon defective construction white ants earthquake or any calamity beyond the control of the Landlord and not attributable to any failure by the Tenant to observe and carry out the terms of this Agreement the rent or a part thereof proportionate to the extent to which the said premises shall have been so rendered uninhabitable shall abate and cease to be payable until the same shall have been again rendered fit for occupation Provided Always that the Landlord shall not be required to reinstate the said premises if by reason of the condition of the same or any local Regulations or other circumstances beyond the control of the Landlord it is not practicable economical or reasonable to do so PROVIDED THAT should the said premises or the said Building not have been reinstated and rendered inhabitable in the meantime either the Landlord or the Tenant may at any time after four months from the calamity give to the other of them a notice in writing to determine this Agreement and thereupon the same and everything herein contained shall determine as from the date of the calamity but without prejudice to the rights and remedies of either party against the other in respect of any antecedent claim or breach of the agreements stipulations terms and conditions herein contained or of the Landlord in respect of the rent payable hereunder prior to the coming into effect of the suspension or of the Tenant to the return of its deposit pursuant to Clause 3 hereof and any dispute concerning this clause shall be determined by arbitration in accordance with the Arbitration Ordinance Cap.609 of the Laws of Hong Kong or any statutory enactment in that behalf for the time being in force. |
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| (ii) | If at any time during the continuance of this Agreement the competent authorities shall condemn the said Building as a dangerous structure and it shall be pulled down or shall make a demolition order which shall become operative in respect of the said premises or any part thereof or a closure order in respect of a part of the said premises under their powers this Agreement hereby created shall cease as from the commencement of the pulling down of the said premises or from the time when such demolition or closure order shall become operative. |
| (d) | The Landlord shall not be bound by any representations or promises with respect to the said Building and its appurtenances or in respect of the said premises except as herein expressly set forth with the object and intention that the whole of the covenants between the Landlord and the Tenant shall be set forth herein and in no way modified by any discussions or correspondence which may have preceded the signing of this Agreement. |
| (e) | No condoning excusing or overlooking by the Landlord of any default breach or non-observance or non-performance by the Tenant at any time or times of any of the Tenant’s obligations herein contained shall operate as a waiver of the Landlord’s rights hereunder in respect of any continuing or subsequent default breach or non-observance or non-performance or so as to defeat or affect in any way the rights of the Landlord herein in respect of any such continuing or subsequent default or breach and no waiver by the Landlord shall be inferred from or implied by anything done or admitted by the Landlord unless expressed in writing and signed by the Landlord. |
| (f) | This Agreement and the obligations of the Tenant to pay rent and other sums due hereunder and perform the Tenant’s obligations hereunder shall in no way be affected impaired or excused because the Landlord is unable due to circumstances beyond his control to fulfil any of his obligations under this Agreement or to supply or is delayed in supplying any service expressly or impliedly to be supplied or is unable to make or is delayed in making any repair additions alterations or decoration or is unable to supply or is delayed in supplying any equipment or fixtures if the Landlord is prevented or delayed from so doing by reason of strike labour troubles or shortage of materials or any outside cause whatsoever or by reason of any order or regulation of any department of the Hong Kong Government. |
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| (g) | For the purposes of these presents any act default or omission of the agents servants visitors staffs and customers of the Tenant shall be deemed to be the act default or omission of the Tenant. |
| (h) | The expression “the Tenant” shall (where the context permits) mean and include the party or parties specifically named and shall not include the executors and administrators of any such party or where such party is a corporation any liquidator thereof. |
| (i) | To the extent that the Tenant can lawfully do so, the Tenant hereby expressly declares that at the expiration or sooner determination of this Agreement the Tenant will not invoke or seek to avail himself of any protection which may or shall hereafter be afforded by any ordinance or regulation of Hong Kong protecting tenants or lessees from eviction but will promptly and punctually quit and deliver up possession of the said premises at the expiration of this Agreement or sooner determination as aforesaid. |
| (j) | Acceptance of rent by the Landlord shall not be deemed to operate as a waiver by the Landlord of any right to proceed against the Tenant in respect of any breach non-observance or non-performance by the Tenant of any of the agreements stipulations and conditions herein contained and on the Tenant’s part to be observed and performed. |
| (k) | The Landlord shall not be under any liability to the Tenant or to any other person whomsoever in respect of :- |
| (i) | any loss or damage to person or property sustained by the Tenant or any such other person caused by or through or in any way owing to the overflow of water, influx of rain water or sea water into the said Building or the said premises or the activities of rats or other vermins in the said Building or the escape of fumes smoke fire or any other substance or thing from anywhere within the said Building or caused as a result of burglary or robbery. The Tenant shall fully and effectually indemnify the Landlord from and against all claims and demands made against the Landlord by any person in respect of any loss damage or injury caused by or through or in any way owing to the overflow of water or the escape of fumes smoke fire or any other substance or thing originating from the said premises or owing to the negligence or default of the Tenant his servants agents or licensees or to the defective or damaged condition of the interior of the said premises or any fixtures or fittings the repair for which the Tenant is responsible hereunder and against all costs and expenses incurred by the Landlord in respect of any such claim or demand. |
| (ii) | loss of life, injury damage to persons, or property sustained by the Tenant or any other person caused by the defect in or breakdown or suspension of services of the lifts, escalators, fire and security services, air-conditioning plant or other services of the said Building. |
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| (iii) | loss of life, injury damage to persons, property sustained by the Tenant or any other person caused by fracture, malfunction, explosion, breakdown or suspension of the electricity or water supply to the said Building or the said premises. |
| (iv) | loss of life, injury damage to persons, property sustained by the Tenant or any other person caused by the neglect or default of the tenants and or occupiers of any other parts of the said Building and their employees agents licensees and visitors. |
| (v) | for the security or safe keeping of the said Building or any persons or contents therein and in particular but without prejudice to the generality of the foregoing the provision by the Landlord of watchmen and caretakers, security guards or any mechanical or electrical systems of alarm of whatever nature shall not create any obligation on the part of the Landlord as to the security of the said premises or any contents therein and the responsibility for the safety of the said premises and the contents thereof shall at all times rest with the Tenant. Nor shall the rent or other charges payable hereunder or any part thereof abate or cease to be payable on account of any of the foregoing. |
| (vi) | loss or damage howsoever arising from the non-observance by the other tenants or occupiers of the said Building of the Building Rules and Regulations mentioned in Clause 4(l) hereof. |
| (l) | The Tenant particularly agrees that :- |
| (i) | The Landlord shall have access to the said premises at all reasonable times, and upon reasonable notice, for the purpose of carrying out any necessary repair, refurbishment, renovation or decoration works to the said Building or any part thereof (hereinafter referred to as “the said Works”), and |
| (ii) | The Landlord shall not be liable to the Tenant for any damage claim costs or expenses including loss and damage for inconvenience, disturbance, loss of profit or goodwill, interruption of services resulting from the execution of the said Works by the Landlord, nor shall the Tenant be entitled to claim any abatement of rent on account of any noise, vibration, or other disturbance to the Tenant’s business at the said premises PROVIDED THAT the Landlord shall endeavour to cause as little interference to the Tenant’s business operation or inconvenience to the Tenant as practicably as possible. |
| (m) | The Landlord shall also have the right at any time without the same constituting an actual or constructive eviction of the Tenant and without incurring any liability to the Tenant therefor to change the arrangement and/or location of entrances passageways doors doorways corridors landings staircases lobbies lifts escalators toilets or other public parts of the said Building or any services or apparatus serving the said Building and to change the name number or designation by which the said Building is known Provided that in the event of change of name number or designation of the said Building, the Landlord shall give to the Tenant and the Postal and other relevant Government Authorities not less than three months’ notice of its intention so to do. |
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| (n) | For the purposes of Landlord and Tenant (Consolidation) Ordinance, Chapter 7, Part III and of these presents, the rent payable in respect of the said premises shall be and be deemed to be in arrears if not paid in advance at the times and in manner hereinbefore provided for payment thereof. All legal costs of and incidental to the demand for rent distraint or any legal action for the recovery of rent and any other sums due hereunder shall be recoverable from the Tenant as a debt. |
| (o) | The Tenant hereby expressly declares that he has paid no premium, construction fee, key money or other sum of money of a similar nature to the Landlord or other person or persons authorised by him for the possession of the said premises or for the granting of this tenancy. |
| (p) | Any notice under this Agreement shall be in writing and any bills statements or notice to the Tenant shall be sufficiently served if left addressed to it at the said premises or any part thereof or sent to its registered office by registered post or left at its last known business address in Hong Kong and any notice to the Landlord shall be sufficiently served if delivered to its registered address or sent to its registered address by registered post or delivered to its last known business address in Hong Kong. |
| (q) | Each party shall bear its own legal cost to the preparing and completing of this Agreement. The stamp duty and registration fee (if any) on this Agreement and its duplicate shall be borne and paid by the parties hereto in equal shares. |
7. The Tenant hereby expressly acknowledges that nothing herein contained shall confer on the Tenant any right interest and privilege to use or permit to be used the name/logo or any part of the name/logo of the Landlord or of the said Building or any picture, representation or likeness of the whole or any part of such name/logo of the said Building as a trade name or part of the trade name for the Tenant’s business operating in the said premises or in anyway in connection with the operation of the Tenant’s business at the said premises save and except the use of the same as the address for the Tenant.
8. The Tenant shall keep confidential and shall not at any time disclose or permit to be disclosed the terms of this Agreement, or any negotiations or discussions relating to this Agreement or any other matter whatsoever in relation to this Agreement, except with the prior consent of the Landlord or as required by any Laws or to the extent that such information has become public knowledge not due to the Tenant’s breach of this undertaking.
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9. Notwithstanding any other provisions of this Agreement, a person who is not a party to this Agreement shall not have any right under the Contracts (Rights of Third Parties) Ordinance to enforce any provisions of this Agreement. This does not affect any right or remedy of such third party which exists or is available apart from that Ordinance.
10. The Tenant agrees to take possession of the said premises in its existing state and condition with fittings left by the previous tenant at the commencement of the said term. However, the Landlord does not guarantee that the fittings including but not limited to the mechanical and electrical installation in the said premises are concurrent or in full compliance with relevant government regulations. The Tenant shall be responsible solely to obtain all relevant approvals/consents from the relevant governmental authorities with respect thereto. The Tenant agrees to remove all fixtures and fittings in the said premises (including existing fittings installed by the previous tenant in the said premises) and subject to Clause 4(ii) of this Agreement, deliver the said premises in its original shell condition at the expiration or sooner determination of this Agreement.
11. The Tenant agrees to pay to the Landlord the following charges upon the signing of this Agreement :-
| (i) | Vetting fee | : | HK$8,528.00 or HK$2.00 per square foot |
| (ii) | Debris removal fee | : | HK$14,924.00 or HK$3.50 per square foot |
| (iii) | Fitting out deposit | : | HK$4,264.00 or HK$1.00 per square foot - (refundable) |
12. This Agreement and the rights and obligations of the parties hereto shall be governed by and construed and interpreted in all respects in accordance with the laws of Hong Kong and the parties hereto hereby irrevocably submit themselves to the non-exclusive jurisdiction of the courts of Hong Kong.
13. The reference to “Hong Kong” shall mean the Hong Kong Special Administrative Region and “the Government” shall mean the Government of the Hong Kong Special Administrative Region.
14. The lettable floor area of the said premises is approximately 4,264 square feet.
It is hereby declared that (if the context permits or requires) the singular number shall include the plural and the masculine gender shall include the feminine and the neuter and vice versa.
AS WITNESS the hands of the parties hereto the day and year first above written.
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THE FIRST SCHEDULE ABOVE REFERRED TO
PART IA
THE LANDLORD
CENTRAL PLAZA MANAGEMENT COMPANY LIMITED whose registered office is situate at Suite 2802 on 28th Floor, Central Plaza, No.18 Harbour Road, Wanchai, Hong Kong agent for the Landlords CHEER CITY PROPERTIES LIMITED (喜怡置業有限公司) and PROTASAN LIMITED.
PART IB
THE TENANT
METALPHA HOLDING (HK) LIMITED (BR No.: 63303102) whose registered office is situate at Suite 6703-04, 67th Floor, Central Plaza, No.18 Harbour Road, Wanchai, Hong Kong.
PART II
THE PREMISES
ALL THOSE OFFICE UNIT NOS. 5506-5507 on the 55th FLOOR of the building known as CENTRAL PLAZA (herein referred to as “the said Building”) at No.18 Harbour Road, Wanchai, Hong Kong erected on All That piece or parcel of ground registered in the Land Registry as INLAND LOT NO.8643.
PART III
TERM OF TENANCY
TWO (2) YEARS commencing on 1st October 2025 and expiring on 30th September 2027, both days inclusive.
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THE SECOND SCHEDULE ABOVE REFERRED TO
PART I
PARTICULARS OF RENT
The monthly rental for the said premises for the said term shall be HONG KONG DOLLARS TWO HUNDRED AND FORTY THREE THOUSAND AND FORTY EIGHT ONLY (HK$243,048.00) but the Tenant is entitled to have a rent-free period of THREE (3) MONTHS from 1st October 2025 to 31st December 2025, both days inclusive (“the Rent-Free Period”) Provided that the Tenant shall be required to pay rates, Service Charges and other charges in full during the Rent-Free Period.
PART II
DEPOSIT
| RENTAL DEPOSIT | HK$ | 729,144.00 | ||
| SERVICE CHARGES DEPOSIT | HK$ | 135,595.20 | ||
| TOTAL | HK$ | 864,739.20 |
PART III
The monthly Service Charges for the said premises at the commencement of the said term shall be HK$45,198.40 subject to review.
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THE THIRD SCHEDULE ABOVE REFERRED TO
PART I
FITTING OUT WORKS TO BE CARRIED OUT BY
CONTRACTORS RECOMMENDED OR APPROVED BY THE LANDLORD
| 1. | Air-conditioning-installation and modifications to the existing system |
| 2. | Electrical installations |
| 3. | Fire services - installation and modifications |
| 4. | Structural engineering works |
| 5. | Plumbing & Drainage |
PART II
BUILDING RULES AND REGULATIONS
| 1. | Plumbing fixtures and toilet facilities shall be used only for the purposes for which they were constructed. No throwing or sweepings rubbish rags or other alien foreign substances shall be deposited therein. All costs for making good damage resulting from any misuse of the plumbing fixtures shall be borne by the Tenant. |
| 2. | Unless with written consent of the Landlord or the Management Company, no Tenant shall drill into or in any way deface any part of the said premises or the said Building including the curtain walls, beams structural members of any part of the fabric of the same and of the decorative features of the common areas, stairs, lifts and escalators of the said Building and of the trees plants and shrubs therein. |
| 3. | Unless with prior written consent of the Landlord or the Management Company, which consent will not normally be granted, no flagpoles or aerials shall be erected, and no flags shall be flown from windows or elsewhere in or upon the said Building. The Landlord or the Management Company may at its discretion provide a communal aerial for the use of tenants of the said Building. |
| 4. | Each Tenant must upon the termination of this tenancy restore to the Landlord or the Management Company all keys of offices and toilet rooms used by the Tenant. |
| 5. | All removals or the carrying in or out of furniture or bulky matter of any description must take place after office hours and during the hours which the Landlord or the Management Company may designate from time to time. The Landlord reserves the right to exclude goods from the said Building which violate any of these Rules and Regulations of this tenancy of which these Rules and Regulations are a part. |
| 6. | No Tenant nor any of the Tenant’s servants employees agents visitors or licensees shall bring into any passenger lift in the said Building any goods effects chattels luggage bulky parcels food trays tiffin carriers or other space-occupying items and the Tenant shall ensure that such items are restricted to the designated cargo lift. |
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| 7. | No Tenant shall do or permit to be done in the said premises or any part thereof any act which shall or might subject the Landlord to any liability or responsibility for injury to any person or to property. |
| 8. | Windows shall remain closed and locked save in emergency such as fire or breakdown of the air-conditioning system and the reasonable extent necessary to enable the Tenant to clean the same. |
| 9. | Canvassing and peddling in the said Building is prohibited and each tenant must co-operate to prevent the same. |
| 10. | Save with the prior written consent of the Landlord or the Management Company, which consent will not normally be granted, no cooking or preparation of food shall be permitted by any Tenant in the said premises. |
| 11. | No Tenant shall permit any unusual or objectionable odours to be produced upon or permeated from the said premises or cause or permit any noise which is or may be a nuisance or annoyance to the occupants of other portions of the said Building. |
| 12. | The Tenant shall not install in the said premises any partitioning or sub-partitioning system other than that supplied or approved by the Landlord. |
| 13. | No animals or pets shall be kept in the said premises. |
| 14. | No other cleaning contractors for the internal cleaning of the said premises shall be employed by the Tenant without the Landlord’s or Management Company’s prior consent. |
| 15. | The Tenant shall not install its own security systems at the entrance of the said premises without the prior written approval of the Landlord or the Management Company such installation should be compatible with the security system to the said Building. |
| 16. | The Tenant shall install independent meters for utilities other than normal facilities provided by the Landlord and shall not install any equipment apparatus or machinery which requires any electrical main wiring or which consumes electricity not metered through the Tenant’s separate meter. |
| 17. | The Tenant shall inform the Management Company prior to the commencement of any approved works in the said premises and in carrying out such works the Tenant shall cause its servants contractors agents to co-operate fully with the Landlord or his agents or with other Tenants in the said Building the Tenant its agents servants contractors shall obey and comply with all instructions and directions which may be given by the Landlord or his agents or representative in connection with the carrying out of such work. |
| 18. | Not to lay or use any floor covering or do anything which may damage or penetrate the existing flooring or screed or slabs. |
| 25 |
| 19. | Not to block up darken destroy or obscure any window or lights belonging to the said premises without having obtained prior written consent of the Landlord which consent may be given subject to other conditions as the Landlord may in its absolute discretion consider fit to impose. |
| 20. | Not to load or permit or suffer to be loaded into any service lift or passenger lift in the said Building a weight greater than such lift is designed or permitted to carry. |
| 21. | Not to burn or permit to be burnt incense in the said premises or in any part of the said Building. |
| 22. | The Tenant shall be responsible for the removal of debris left by the Tenant’s contractors as a result of the fitting out and decoration works to the said premises. |
| 23. | Not to install additional locks bolts or other fittings to the entrance doors of the said premises or in any way to cut or alter the same without first having obtained the written licence or consent from the Landlord. |
| 24. | Except on Public Holidays, normal business hours for the office tower are defined as 08:00 to 19:00 hours from Monday to Friday, 08:00 to 13:00 hours on Saturday. |
| 25. | To use all toilets on the same floor of the said Building in a sanitary and tenantable manner in common with other tenants. |
| 26. | Save and except the Tenant’s staff and contractors properly registered with the Management Company for necessary night shift work, access to the said Building after normal business hour may be restricted. |
| 27. | The Tenant shall give notice to the Landlord or the Management Company of any damage that may be suffered to the said premises and of any accident to or defects found by the Tenant in the water pipes gas pipes fire services electrical wiring air-conditioning equipment or fittings fixtures or other facilities provided by the Landlord. |
| 28. | Not to install any air-conditioning machinery in the said premises (either in the windows or elsewhere) without the prior written consent of the Landlord. |
| 29. | The Tenant shall lock up the said premises properly at all times after office hours. |
| 30. | Wet Pantry is not allowed in the said premises. |
PART III
LANDLORD’S RIGHT
| 1. | The right of free and uninterrupted passage of services plus the right to enter the said premises for repair and replacement. |
| 26 |
| 2. | The right to enter the said premises for access to and egress from any machine room under the control of the Landlords on any of the floor of the said Building on which any part of the said premises is situated. |
| 3. | The right on giving reasonable notice to the Tenant (except in case of emergency) to suspend the air-conditioning, lifts, escalators, power supply or other building services for repair or replacement. |
| 4. | To allow or permit at the Landlord’s discretion any person, company or organization to hold functions or exhibitions of any nature or display any merchandise in any part of the common areas of the said Building PROVIDED THAT the Tenant’s free access to the said premises shall not be unduly affected. |
PART IV
MANAGEMENT COMPANY
The Management Company shall be Central Plaza Management Company Limited or any other company which may be from time to time appointed by the Landlord as its agent.
| 27 |
THE FOURTH SCHEDULE ABOVE REFERRED TO
1. (a) Notwithstanding anything herein contained to the contrary, the Landlord hereby expressly consents to the granting of licence(s) by the Tenant to its group company, subsidiary, associated or affiliated company (hereinafter referred to as “the Permitted Licensee(s)”) to occupy and use part of the said premises subject to the Tenant first providing the names and particulars of the Permitted Licensee(s) to the Landlord and subject to the following:
(i) The Tenant shall ensure and cause the Permitted Licensee(s) and each of them to observe and perform all the terms and conditions of this Agreement.
(ii) The Tenant hereby confirms that all of the chattels furniture machines plants equipments and any other articles in on or at the said premises belongs to the Tenant and can be distressed or distrained by the Landlord for non-payment of rent or other charges and execution can be levied upon the same.
(iii) The Tenant agrees to indemnify the Landlord and keep the Landlord indemnified against any losses damages demands suits actions proceedings costs and expenses arising out or directly or indirectly connected with the occupation of the said premises by the Permitted Licensees or any of them.
(b) For the avoidance of doubt, the Permitted Licensee(s) occupation of the said premises is as licensee only and shall not be construed as creating any lease or any interest in land nor as any consent to sublet by the Landlord and the Permitted Licensee(s) shall vacate the said premises at the expiration or earlier determination of this Agreement.
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|
SIGNED by
for and on behalf of Central Plaza Management Company Limited agent for the Landlord whose signature(s) is/are verified by :- |
) ) ) ) ) ) ) ) ) ) ) |
|
SIGNED by
for and on behalf of the Tenant in the presence of :- |
) ) ) ) ) ) ) ____________________ |
Witnessed by: ____________________
(Please sign)
Name of witness: ____________________
(Please fill in)
| 29 |
| RECEIVED the day and year first above written of and from the Tenant the sum of HONG KONG DOLLARS EIGHT HUNDRED AND SIXTY FOUR THOUSAND SEVEN HUNDRED AND THIRTY NINE AND CENTS TWENTY ONLY being the Deposit money hereinbefore mentioned to be paid by the Tenant to the Landlord. |
) ) ) ) ) ) ) HK$864,739.20 ) |
VERIFICATION of the signature(s) by :-
| 30 |
| 31 |
Dated the day of 2025
CENTRAL PLAZA MANAGEMENT COMPANY
LIMITED agent for the Landlords CHEER CITY
PROPERTIES LIMITED (喜怡置業有限公司)
and PROTASAN LIMITED
AND
METALPHA HOLDING (HK) LIMITED
TENANCY AGREEMENT
Of
All Those Office Unit Nos. 5506-5507 on the
55th Floor of the building known as CENTRAL
PLAZA at No.18 Harbour Road, Wanchai,
Hong Kong erected on All That piece or parcel
of land and registered in the Land Registry as
INLAND LOT NO.8643.
WOO KWAN LEE & LO
Solicitors & Notaries,
25th Floor, Jardine House,
Hong Kong.
PI/LWY/510932910/hl
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Exhibit 4.21
Sweet Lollipop Co., Ltd.
and
Hermitage Management Limited
and
Jason Huang
SALE AND PURCHASE AGREEMENT
in respect of
40% of the share capital of
NextGen Digital Venture Limited
(the “Agreement”)
THIS AGREEMENT is made on _______________________
BETWEEN: -
| (1) | Sweet Lollipop Co., Ltd., a limited liability company organized under the laws of the British Virgin Islands, with its registered address at Start Chambers, Wickham’s Cay II, P.O. Box 2221, Road Town, Tortola, British Virgin Islands (the “Seller”); |
| (2) | Jason Huang, an individual whose address is at 84 BURSWOOD DRIVE, PAKURANGA HEIGHTS, MANUKAU, AUCKLAND (the “Buyer”); and |
| (3) | Hermitage Management Limited, a company incorporated in the British Virgin Islands, with its registered address at Trinity Chambers, PO Box 4301, Road Town, Tortola, British Virgin Islands (“Hermitage”); |
(each a “Party” and collectively, the “Parties”).
WHEREAS: -
| A. | NextGen Digital Venture Limited (the “Company”) was incorporated under the laws of the British Virgin Islands with limited liability. |
| B. | The Seller has agreed to sell 4 Shares (as defined below) to the Buyer (the “Sale Shares”), which represents 40% of the issued capital of the Company, and the Buyer has agreed to purchase the Sale Shares from the Seller. |
| C. | The Seller purchased the Sale Shares from Hermitage pursuant to a sale and purchase agreement dated 22 December 2023. Under the said sale and purchase agreement and another agreement between an Affiliate of the Seller and Hermitage, Hermitage is entitled to share approximately 50% of the fees obtained by an Affiliate of the Seller under a sub-investment management agreement in relation to the Portfolio. |
| D. | The Seller agreed, among other things, that 50% of the consideration for the Sale Shares payable by the Buyer will be paid to Hermitage. |
NOW IT IS HEREBY AGREED as follows:-
| 1. | INTERPRETATION |
| 1.1 | The definitions and rules of interpretation in this clause apply in this Agreement. |
Affiliate: any entity that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with a Party to this Agreement. For this context, “control” shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such entity, whether through ownership of voting securities, by contract, or otherwise. Ownership of more than fifty percent (50%) of the voting interests of an entity shall be conclusive evidence of control.
Business Day: a day, other than a Saturday, Sunday or public holiday in Hong Kong, special administrative region of China (“Hong Kong”), when banks in Hong Kong are open for business.
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Buyer Warranties: the representations and warranties made by the Buyer contained in clause 6.2.
Completion: completion of the sale and purchase of the Sale Shares pursuant to Clause 5.
Conditions Precedent: the conditions precedent set out in Clause 4.
Encumbrance: any interest or equity of any person (including any right to acquire, option or right of pre-emption) or any mortgage, charge, pledge, lien, assignment, hypothecation, security, interest, title retention, right to acquire, security interest, option, pre-emptive or other similar right, right of first refusal, restriction, third-party right or interest, any other encumbrance, condition or security interest whatsoever or any other type of preferential arrangement (including without limitation, a title transfer or retention arrangement) having similar effect or any other security agreement or arrangement.
Fund: LSQ Investment Fund SPC, an exempted company established with limited liability and registered as a segregated portfolio company under the laws of the Cayman Islands.
Governmental Authority: any supranational, national, provincial, state, municipal, local or other government, any instrumentality, subdivision, administrative agency or commission thereof, court, other governmental authority or regulatory body or instrumentality, or any quasi-governmental or private body exercising any regulatory, taxing, importing or other governmental or quasi-governmental authority or any self-regulatory agency (including any stock exchange).
Portfolio: Next Generation Fund I SP, a segregated portfolio of the Fund.
Shares：ordinary shares of no par value in the capital of the Company.
Seller Warranties: the representations and warranties made by the Seller contained in Clause 6.1.
| 1.2 | In this Agreement, unless the context otherwise requires words in the singular include the plural and in the plural include the singular. |
| 1.3 | Clause and Schedule headings do not affect the interpretation of this Agreement. |
| 1.4 | A reference to writing or written includes also email. |
| 1.5 | Any words following the terms including, include, in particular, for example or any similar expression shall be construed as illustrative and shall not limit the sense of the words, description, definition, phrase or term preceding those terms. |
| 2. | SALE AND PURCHASE |
| 2.1 | At Completion, the Seller shall sell, and the Buyer shall buy, the Sale Shares with full title guarantee and free from all Encumbrances, together with all rights attached or accruing to them. |
| 3. | CONSIDERATION |
| 3.1 | The consideration for the sale and purchase of the Sale Shares shall be US$40,000 (the “Consideration”). |
| 3.2 | The Parties agree that the Buyer shall pay 50% of the Consideration to the Seller and 50% of the Consideration to Hermitage. |
3
| 4. | CONDITIONS PRECEDENT |
| 4.1 | The obligation of each Party to consummate the transactions contemplated hereunder shall be conditional upon the fulfilment of the following Conditions Precedent on or before the Completion Date (as defined below): |
| (A) | all necessary consents, approvals, permits and/or authorisations in respect of the transactions contemplated under this Agreement having been obtained, including but not limited to consents given by all shareholders of the Company other than the Seller and Buyer in respect of the transfer of the Sale Shares to the Buyer or its nominee; and |
| (B) | no temporary restraining order, preliminary or permanent injunction or other order issued by any court of competent jurisdiction or other legal or regulatory action, restraint or prohibition preventing or challenging the consummation of the transactions contemplated hereunder having been issued, nor shall there be any action taken, or any law enacted, entered, enforced or deemed applicable to the transactions contemplated hereunder which makes the consummation of such transactions illegal. |
| 4.2 | The obligation of the Buyer to consummate the transactions contemplated hereunder shall be conditional upon the fulfilment of the following Conditions Precedent on or before the Completion Date: |
| (A) | all Seller Warranties being true, accurate and not misleading in all material respects on the date of this Agreement and on the Completion Date (as though they had been made on such dates by reference to the facts and circumstances then subsisting); |
| (B) | the Seller having performed in all material respects all obligations required to be performed under this Agreement by it on or before the Completion Date; |
| 4.3 | The obligation of the Seller to consummate the transactions contemplated hereunder shall be conditional upon the fulfilment of the following Conditions Precedent on or before the Completion Date: |
| (A) | all Buyer Warranties being true, accurate and not misleading in all material respects on the date of this Agreement and on the Completion Date (as though they had been made on such dates by reference to the facts and circumstances then subsisting); and |
| (B) | the Buyer having performed in all material respects all obligations required to be performed under this Agreement by it on or before the Completion Date; |
| (C) | the board of directors of the ultimate controlling company of the Seller having approved this Agreement and the transactions contemplated herein. |
| 4.4 | To the extent permitted by applicable law, all Conditions Precedent may be waived by the Party or Parties entitled to the benefit of the relevant Conditions Precedent. |
| 5. | COMPLETION |
| 5.1 | Completion shall take place remotely by electronic means (i) as soon as practicable and in any event no later than five (5) Business Days after the date on which all Conditions Precedent (other than the Conditions that by their nature are to be satisfied at Completion, but subject to the satisfaction or, to the extent permissible, waiver of those Conditions Precedent at Completion) are satisfied (or waived), or (ii) on any other date as may be agreed upon by the Parties in writing (the “Completion Date”); provided that the Completion Date shall be no later than one (1) month following the date hereof, unless otherwise extended by the Parties in writing (the “Completion Deadline”) |
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| 5.2 | At Completion, the Buyer shall deliver, or cause to be delivered, to the Seller and Hermitage the Consideration in accordance with Clause 3. |
| 5.3 | At Completion, the Seller shall deliver or cause to be delivered to the Buyer and/or its nominee the instrument of transfer of the Sale Shares duly executed by the Seller as registered holder thereof in favour of the Buyer or its nominee and such other documents as may be reasonably required by the Buyer to, among other things, give good title to the Sale Share free from all Encumbrances and third party rights of any kind and to enable the Buyer or its nominees to become the registered holder thereof. |
| 6. | REPRESENTATIONS AND WARRANTIES |
| 6.1 | The Seller warrants, represents and undertakes to the Buyer as follows: - |
| (A) | The Seller is a company duly incorporated and validly existing under the laws of its incorporation place; |
| (B) | The Seller has full beneficial title and right to the Sale Shares and the power and authority to sell and transfer the Sale Shares to the Buyer and/or its designated nominee; |
| (C) | The Sale Shares are fully paid, free from all Encumbrances and no commitment has been given to create an Encumbrance affecting the Sale Shares; and |
| (D) | The Seller has full power to enter into and perform this Agreement and this Agreement will, when executed, constitute legal, valid and binding obligations on the Seller in accordance with its terms. |
| 6.2 | The Buyer warrants, represents and undertakes to the Seller as follows: |
| (A) | The Buyer is of full legal capacity and has the legal right, power, and authority to enter into and perform this Agreement; |
| (B) | This Agreement will, when executed, constitute legal, valid, and binding obligations on the Buyer in accordance with its terms; and |
| (C) | The Buyer has obtained any required consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing with, any Governmental Authority or any party to an agreement or any other third party in connection with its execution, delivery and performance and the consummation of the transactions contemplated by this Agreement. |
| 7. | OTHER AGREEMENTS BETWEEN THE PARTIES |
| 7.1 | Hermitage and its Affiliates hereby irrevocably waive and shall not, in any manner (including but not limited to litigation, arbitration, or any other dispute resolution mechanism), assert, claim, or seek relief against the Company, its Affiliates, or its shareholders in respect of any operation, management, debt, or any other matter relating to the Company that occurred prior to Completion, nor shall Hermitage or its Affiliates assist, induce, or finance any third party to make or pursue any such claim, complaint, or relief. |
| 7.2 | The Seller, its Affiliates and their respective directors, senior management, (including, but not limited to Metalpha Technology Holding Limited and its subsidiaries) shall not use, reference, or otherwise mention “NDV”, “NextGen Digital Venture”, or any similar names (the “Trade Names”) which could identify the Company in any public medium (including but not limited to stock exchange announcements, press releases, investor relations materials, social media, etc.) without the prior consent of the Buyer; provided, however, that the Buyer’s consent shall not be unreasonably withheld if the use, reference or mention of the Trade Names is necessary to comply with applicable regulatory or stock exchange requirements. |
5
| 7.3 | Following Completion, all names, goodwill, brands, intellectual property, operating results, and all other intangible assets and interests related to “NDV” or “NextGen Digital Venture” shall be exclusively owned by the Company. The Seller and its Affiliates shall not retain, claim, or exercise any rights with respect thereto. |
| 7.4 | Notwithstanding the foregoing, LSQ Capital Limited, an Affiliate of the Seller, may reference the Trade Names when it is necessary to accurately disclose facts or relationships in order to fulfil its obligations as required by applicable regulatory authorities. |
| 8. | RESTRICTIONS ON COMMUNICATION |
Each of the Parties undertakes to the other Party that it shall not at any time after the date of this Agreement divulge or communicate to any person other than to its professional advisers, or when required by law or by any Governmental Authority, or to its respective officers or employees whose province it is to know the same any confidential information concerning the business, accounts, finance or contractual arrangements or other dealings, transactions or affairs of the other which may be within or may come to its knowledge in connection with the transactions contemplated by this Agreement and it shall use its best endeavours to prevent the publication or disclosure of any such confidential information concerning such matters. This restriction shall not apply to information or knowledge which is or which properly comes into the public domain, through no fault of any of the Parties or to information or knowledge which is already known to any of the Parties at the time of its receipt.
| 9. | FURTHER ASSURANCE |
Each Party undertakes to the other Party to execute or procure to be executed all such documents and to do or procure to be done all such other acts and things as may be reasonable and necessary to give all Parties the full benefit of this Agreement.
| 10. | NOTICES |
| 10.1 | Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered: (a) upon receipt, when delivered personally; (b) upon receipt, when sent by facsimile or email (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party); (c) one (1) Business Day after deposit with an internationally recognized overnight courier service, or (d) when sent by confirmed electronic mail if sent during normal business hours of the recipient, and if not, then on the next Business Day, in each case properly addressed to the party to receive the same. The addresses and facsimile numbers for such communications shall be: |
If to the Seller, to:
Address: Suite 6703-04, Central Plaza, 18 Harbour Road, Wan Chai, Hong Kong, China
Attention: NI Ming
Email: ming.ni@metalpha.finance
6
If to the Buyer, to:
Address: 84 BURSWOOD DRIVE, PAKURANGA HEIGHTS, MANUKAU AUCKLAND
Email: jh@nextgendigital.vc
If to Hermitage, to:
Address: Trinity Chambers, PO Box 4301, Road Town, Tortola, British Virgin Islands
Attention: YOON Jung Hyun
Email: Junghyun.yoon@gmail.com
| 10.2 | Any Party may change its address for purposes of this Clause 10 by giving the other Parties hereto written notice of the new address in the manner set forth above. For the avoidance of doubt, only notice delivered to the address and person of the Parties to this Agreement shall constitute effective notice to such Party for the purposes of this Agreement. |
| 11. | TERMINATION |
| 11.1 | This Agreement may be terminated prior to the Completion: |
| (A) | by written consent of all Parties; or |
| (B) | by either Party, in the event that any Governmental Authority shall have issued a judgment or taken any other action restraining, enjoining or otherwise prohibiting the transactions contemplated by this Agreement and such judgment or other action shall have become final and non-appealable, |
provided that, this Agreement shall automatically terminate if the Completion has not occurred on or prior to the Completion Deadline.
| 11.2 | Upon the termination of this Agreement, this Agreement will have no further force or effect, except for the provisions of Clauses 8, 10, 12 and 13.1, which shall survive any termination under clause 11.1; provided that no Party shall be relieved or released from any liabilities or damages arising out of (i) fraud or (ii) any breach of this Agreement prior to such termination. |
| 12. | GOVERNING LAW AND JURISDICTION |
| 12.1 | This Agreement shall be governed by and construed in accordance with the laws of Hong Kong without giving effect to any choice or conflict of law provision or rule thereunder. |
| 12.2 | Any dispute, controversy, difference or claim arising out of or relating to this Agreement, including the existence, validity, interpretation, performance, breach or termination thereof or any dispute regarding non-contractual obligations arising out of or relating to it (the “Dispute”) shall be submitted to arbitration. The arbitration shall be conducted in Hong Kong under the auspices of the Hong Kong International Arbitration Centre (the “HKIAC”) in accordance with the HKIAC Administered Arbitration Rules then in effect. The number of arbitrators shall be one. The arbitration proceedings shall be conducted in English. |
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| 13. | MISCELLANEOUS |
| 13.1 | Each Party shall bear its own costs of and incidental to the preparation, negotiation and settlement of this Agreement and the transactions contemplated hereunder (including, without limitation, legal fees and expenses, and capital fees or stamp duty (if any) relating to this Agreement). |
| 13.2 | Save as specifically provided herein, a person who is not a Party of this Agreement has no right under the Contracts (Rights of Third Parties) Ordinance (Cap. 623 of the laws of Hong Kong) to enforce any term of this Agreement. |
| 13.3 | This Agreement shall be binding on and enure for the benefit of the personal representative or successors of the Parties. Except otherwise provided herein, no Party shall be entitled to assign or transfer or purport to assign or transfer any of their rights, interests, duties or obligations under this Agreement without the prior written consent of the other Parties. |
| 13.4 | The invalidity, illegality or unenforceability of any provision of this Agreement shall not affect the continuation in force of the remainder of this Agreement. |
| 13.5 | For the convenience of the Parties and to facilitate execution, this Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute but one and the same instrument. Signatures in the form of facsimile or electronically imaged “PDF” shall be deemed to be original signatures for all purposes hereunder. |
[Execution Pages Follow]
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AS WITNESS the hands of the Parties or their duly authorised representatives the day and year first above written.
| Sweet Lollipop Co., Ltd. | ||
| Authorized Signature: | ||
| Name: | Ni Ming | |
| Title: | Director |
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AS WITNESS the hands of the Parties or their duly authorised representatives the day and year first above written.
| Jason Huang | ||
| Signature: | ||
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AS WITNESS the hands of the Parties or their duly authorised representatives the day and year first above written.
| Hermitage Management Limited | ||
| Authorized Signature: | ||
| Name: | YOON Jung Hyun | |
| Title: | Director |
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Exhibit 4.24
METALPHA TECHNOLOGY HOLDING LIMITED
2024 SHARE INCENTIVE PLAN
NOTICE OF RESTRICTED SHARE UNITS AWARD
Participant’s Name and Address: _____________________________
You have been granted the number of restricted share units (the “RSUs”) designated below, each evidencing the right to receive one (1) ordinary share, par value US$0.0001 per share, of the Company (the “Shares” and each a “Share”) upon vesting, subject to the terms and conditions of this Notice of RSUs Award (the “Notice”), the Metalpha Technology Holding Limited 2024 Share Incentive Plan, as amended from time to time (the “Plan”) and the RSU Award Agreement (the “Award Agreement”) attached hereto, as follows. Unless otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in this Notice and the Award Agreement.
| Date of Award | 06/ 30/ 2025 |
| Vesting Commencement Date | 07/ 01/ 2026 |
| Total Number of RSUs | __________ |
| Expiration Date | 07/ 01/ 2039 |
| Post-Termination Settlement Period |
No post-termination settlement period if terminated for Cause.
If terminated for Disability or death, without Cause, due to voluntary termination or for reasons other than stated above, this period ends three (3) months after termination. |
Vesting Schedule:
Subject to Participant’s continuous employment and other limitations set forth in this Notice, the Plan and the Award Agreement, the RSUs may be vested, in whole or in part, in accordance with the following schedule:
The RSUs shall vest with respect to 25% of the Shares subject hereto in four equal instalments on each anniversary of the Vesting Commencement Date and vesting in full on 1 July 2029.
During any authorized leave of absence, the vesting of the RSUs as provided in this schedule shall be suspended after the leave of absence exceeds a period of ninety (90) days. Vesting of the RSUs shall resume upon the Participant’s termination of the leave of absence and return to service to the Company or a Related Entity. The Vesting Schedule of the RSUs shall be extended by the length of the suspension.
In the event of termination of the Participant’s continuous employment for Cause, the Participant’s right to settle the RSUs shall terminate concurrently with the termination of the Participant’s continuous employment, except as otherwise determined by the Committee.
[Remainder of Page Left Blank Intentionally]
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IN WITNESS WHEREOF, the Company and the Participant have executed this Notice and agree that the RSUs are to be governed by the terms and conditions of this Notice, the Plan, and the Award Agreement.
| METALPHA TECHNOLOGY HOLDING LIMITED | ||
| By: | ||
| Name: | Bingzhong Wang | |
| Title: | Chief Executive Officer and Chairman of the Board of Directors | |
THE PARTICIPANT ACKNOWLEDGES AND AGREES THAT THE SHARES SUBJECT TO THE RSUs SHALL VEST, IF AT ALL, ONLY DURING THE PERIOD OF THE PARTICIPANT’S CONTINUOUS EMPLOYMENT (NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THE RSUs OR ACQUIRING SHARES HEREUNDER). THE PARTICIPANT FURTHER ACKNOWLEDGES AND AGREES THAT NOTHING IN THIS NOTICE, THE AWARD AGREEMENT, OR THE PLAN SHALL CONFER UPON THE PARTICIPANT ANY RIGHT WITH RESPECT TO FUTURE AWARDS OR CONTINUATION OF PARTICIPANT’S CONTINUOUS EMPLOYMENT, NOR SHALL IT INTERFERE IN ANY WAY WITH THE PARTICIPANT’S RIGHT OR THE RIGHT OF THE PARTICIPANT’S EMPLOYER TO TERMINATE PARTICIPANT’S CONTINUOUS EMPLOYMENT PURSUANT TO PARTICIPANT’S WRITTEN EMPLOYMENT AGREEMENT. THE PARTICIPANT ACKNOWLEDGES THAT UNLESS THE PARTICIPANT HAS A WRITTEN EMPLOYMENT AGREEMENT WITH THE COMPANY TO THE CONTRARY, PARTICIPANT’S STATUS IS AT WILL.
The Participant acknowledges receipt of a copy of the Plan and the Award Agreement, and represents that he or she is familiar with the terms and provisions thereof, and hereby accepts the RSUs subject to all of the terms and provisions hereof and thereof. The Participant has reviewed this Notice, the Plan, and the Award Agreement in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Notice, and fully understands all provisions of this Notice, the Plan and the Award Agreement. The Participant further agrees to notify the Company upon any change in the residence address indicated in this Notice pursuant to Section 13 of the Award Agreement.
| Dated: 06/30/2025 | Signed: | ||
| Participant Signature | |||
| Name: | |||
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METALPHA TECHNOLOGY HOLDING LIMITED
2024 SHARE INCENTIVE PLAN
RESTRICTED SHARE UNITS AWARD AGREEMENT
1. Grant of RSUs. Metalpha Technology Holding Limited (the “Company”), hereby grants to the Participant (the “Participant”) named in the Notice of RSUs Award (the “Notice”), the number of restricted share units (“RSUs”) designated in the Notice, each evidencing the right to receive one (1) Share set forth in the Notice, subject to the terms and provisions of the Notice, this RSU Award Agreement (the “Award Agreement”) and the Company’s 2024 Share Incentive Plan, as amended from time to time (the “Plan”), which are incorporated herein by reference. Capitalized terms not specifically defined herein shall have the meanings specified in the Plan and the Notice.
2. Vesting of RSUs.
(a) Right to Settle. The RSUs shall be vested during its term in accordance with the Vesting Schedule set out in the Notice and with the applicable provisions of the Plan and this Award Agreement. In no event shall the Company issue fractional Shares.
(b) Method of Settlement. The RSUs may be settled in whole or in part upon your completing the settlement procedures established by the Company, which may be amended from time to time.
(c) Taxes. No Shares will be delivered to the Participant or other person pursuant to the settlement of the RSUs until the Participant or other person has made arrangements acceptable to the Company for the satisfaction of applicable income tax and employment tax withholding obligations, including, without limitation, such other tax obligations of the Participant incident to the receipt of Shares. Upon settlement of the RSUs, the Company or the Participant’s employer may offset or withhold (from any amount owed by the Company or the Participant’s employer to the Participant) or collect from the Participant or other person an amount sufficient to satisfy such tax obligations and/or the employer’s withholding obligations.
3. Acceleration of RSUs Vesting Schedule Upon a Corporate Transaction. In the event of a Corporate Transaction, the RSUs shall become fully vested and be released from any repurchase or forfeiture rights (other than repurchase rights settable at Fair Market Value), immediately prior to the specified effective date of such Corporate Transaction, for all of the Shares at the time represented by the RSUs.
4. Method of Payment. Payment of any applicable tax withholding shall be made by any of the following, any combination thereof or any such other method as the Board or Committee may permit in accordance with applicable law, in its sole discretion, at the election of the Participant; provided, however, that such settlement method does not then violate any applicable law or the applicable rules and regulations of the United States Securities and Exchange Commission or the applicable rules or regulations of any securities exchange or inter-dealer quotation system on which the securities of the Company are listed or traded (the “Applicable Rules”):
(a) cash;
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(b) check;
(c) surrender of Shares or delivery of a properly executed form of attestation of ownership of Shares as the Committee may require (including withholding of Shares otherwise deliverable upon settlement of the RSUs) which have a Fair Market Value on the date of surrender or attestation (but only to the extent that such settlement of the RSUs would not result in an accounting compensation charge with respect to the Shares used to pay the applicable tax withholding).
5. Restrictions on Settlement. The RSUs may not be settled if the issuance of the Shares subject to the RSUs upon such settlement would constitute a violation of any applicable laws or Applicable Rules.
6. Termination of Continuous Employment. In the event the Participant’s continuous employment terminates, other than for Cause, Disability or death, the Participant may, within three months after the date of such termination (the “Termination Date”), settle the portion of the RSUs that were vested at the Termination Date. In the event of termination of the Participant’s continuous employment for Cause, the Participant’s right to settle the RSUs shall, except as otherwise determined by the Committee, terminate concurrently with the termination of the Participant’s continuous employment (also the “Termination Date”). In no event shall the RSUs be settled later than the Expiration Date set forth in the Notice. Except as provided in Sections 7 and 8 below, to the extent that the RSUs were unvested on the Termination Date, or if the Participant does not settle the vested portion of the RSUs within the three month period, the RSUs shall terminate.
7. Disability of the Participant. In the event the Participant’s continuous employment terminates as a result of his or her Disability, the Participant may, within three months after the date of such termination (the “Termination Date”), settle the portion of the RSUs that were vested at the Termination Date. To the extent that the RSUs were unsettled on the Termination Date, or if the Participant does not settle the vested portion of the RSUs within the time specified herein, the RSUs shall terminate.
8. Death of the Participant. In the event of the termination of the Participant’s continuous employment as a result of his or her death, the Participant’s estate, or a person who acquired the right to settle the RSUs by bequest or inheritance, may settle the portion of the RSUs that were vested at the date of termination, within three (3) months from the date of death (but in no event later than the Expiration Date). To the extent that the RSUs were unsettled on the date of death, or if the vested portion of the RSUs are not settled within the time specified herein, the RSUs shall terminate.
9. Transferability of RSUs. The RSUs may not be sold, pledged, assigned, hypothecated, transferred or disposed of in any manner other than by will or by the laws of descent and distribution and may be settled, during the lifetime of the Participant, only by the Participant.
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10. Term of RSUs. The RSUs may be settled no later than the Expiration Date set forth in the Notice or such earlier date as otherwise provided herein.
11. Entire Agreement; Governing Law. The Notice, the Plan and this Award Agreement constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and the Participant with respect to the subject matter hereof, and may not be modified adversely to the Participant’s interest except by means of a writing signed by the Company and the Participant. Nothing in the Notice, the Plan and this Award Agreement (except as expressly provided therein) is intended to confer any rights or remedies on any persons other than the parties. The Notice, the Plan and this Award Agreement are to be construed in accordance with and governed by the laws of Cayman Islands and the Participant submits to the non-exclusive jurisdiction of the courts of Cayman Islands. Should any provision of the Notice, the Plan or this Award Agreement be determined by a court of law to be illegal or unenforceable, such provision shall be enforced to the fullest extent allowed by law and the other provisions shall nevertheless remain effective and shall remain enforceable.
12. Headings. The captions used in the Notice and this Award Agreement are inserted for convenience and shall not be deemed a part of the RSUs for construction or interpretation.
13. Notices. All notices, demands and other communications provided for or permitted hereunder shall be made in writing and shall be by email, registered or certified first-class mail, return receipt requested, facsimile, courier service or personal delivery:
If to the Company:
Email: betty.zhang@metalpha.finance
Attn: Betty Zhang
Address: Suite 6703-04, Central Plaza, 18 Harbour Road, Wan Chai, Hong Kong, China
If to the Participant:
Email:
Attn:
Address:
[Remainder of Page Left Blank Intentionally]
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Exhibit 11.2
Metalpha Technology Holding Limited
Insider Trading and Window Policy
(Originally Adopted on October 30, 2024 and Amended And Restated on May 5, 2026)
Introduction
During the course of your relationship with Metalpha Technology Holding Limited (“Metalpha”), you may receive material information that is not yet publicly available (“material nonpublic information”) about Metalpha or other publicly traded companies that Metalpha has business relationships with. Material nonpublic information may give you, or someone you pass that information on to, a leg up over others when deciding whether to buy, sell or otherwise transact in Metalpha’s securities or the securities of another publicly traded company. This policy sets forth guidelines with respect to transactions in Metalpha securities and in the securities of other applicable publicly traded companies, in each case by our employees, directors and consultants who may become aware of material non-public information (“designated consultants”) and the other persons or entities subject to this policy as described below.
Statement of Policy
It is the policy of Metalpha that an employee, director or designated consultant of Metalpha (or any other person or entity subject to this policy) who is aware of material nonpublic information relating to Metalpha may not, directly or indirectly:
| 1. | engage in any transactions in Metalpha’s securities, except as otherwise specified under the heading “Exceptions to this Policy” below; |
| 2. | recommend the purchase or sale of any Metalpha’s securities; |
| 3. | disclose material nonpublic information to persons within Metalpha whose jobs do not require them to have that information, or outside of Metalpha to other persons, such as family, friends, business associates and investors, unless the disclosure is made in accordance with Metalpha’s policies regarding the protection or authorized external disclosure of information regarding Metalpha; or |
| 4. | assist anyone engaged in the above activities. |
The prohibition against insider trading is absolute. It applies even if the decision to trade is not based on such material nonpublic information. It also applies to transactions that may be necessary or justifiable for independent reasons (such as the need to raise money for an emergency expenditure) and also to very small transactions. All that matters is whether you are aware of any material nonpublic information relating to Metalpha at the time of the transaction.
The U.S. federal securities laws do not recognize any mitigating circumstances to insider trading. In addition, even the appearance of an improper transaction must be avoided to preserve Metalpha’s reputation for adhering to the highest standards of conduct. In some circumstances, you may need to forgo a planned transaction even if you planned it before becoming aware of the material nonpublic information. So, even if you believe you may suffer an economic loss or sacrifice an anticipated profit by waiting to trade, you must wait.
It is also important to note that the laws prohibiting insider trading are not limited to trading by the insider alone; advising others to trade on the basis of material nonpublic information is illegal and squarely prohibited by this policy. Liability in such cases can extend both to the “tippee”—the person to whom the insider disclosed material nonpublic information—and to the “tipper,” the insider himself or herself. In such cases, you can be held liable for your own transactions, as well as the transactions by a tippee and even the transactions of a tippee’s tippee. For these and other reasons, it is the policy of Metalpha that no employee, director or designated consultant of Metalpha (or any other person or entity subject to this policy) may either (a) recommend to another person or entity that they buy, hold or sell Metalpha’s securities at any time or (b) disclose material nonpublic information to persons within Metalpha whose jobs do not require them to have that information, or outside of Metalpha to other persons (unless the disclosure is made in accordance with Metalpha’s policies regarding the protection or authorized external disclosure of information regarding Metalpha).
In addition, it is the policy of Metalpha that no person subject to this policy who, in the course of his or her relationship with Metalpha, learns of any confidential information that is material to another publicly traded company with which Metalpha does business, including a customer, supplier, partner or collaborator of Metalpha, may trade in that other company’s securities until the information becomes public or is no longer material to that other company.
There are no exceptions to this policy, except as specifically noted above or below.
Transactions Subject to this Policy
This policy applies to all transactions in securities issued by Metalpha, as well as derivative securities that are not issued by Metalpha, such as exchange-traded put or call options or swaps relating to Metalpha’s securities. Accordingly, for purposes of this policy, the terms “trade,” “trading” and “transactions” include not only purchases and sales of Metalpha’s ordinary shares in the public market but also any other purchases, sales, transfers, gifts or other acquisitions and dispositions of ordinary or preferred shares, options, warrants and other securities (including debt securities) and other arrangements or transactions that affect economic exposure to changes in the prices of these securities.
Persons Subject to this Policy
This policy applies to you and all other employees, directors and designated consultants of Metalpha and its subsidiaries. This policy also applies to members of your family who reside with you, any other persons with whom you share a household, any family members who do not live in your household but whose transactions in Metalpha’s securities are directed by you or are subject to your influence or control and any other individuals or entities whose transactions in securities you influence, direct or control (including, e.g., a venture or other investment fund, if you influence, direct or control transactions by the fund). The foregoing persons who are deemed subject to this policy are referred to in this policy as “Related Persons.” You are responsible for making sure that your Related Persons comply with this policy.
Material Nonpublic Information
Material information
It is not always easy to figure out whether you are aware of material nonpublic information. But there is one important factor to determine whether nonpublic information you know about a public company is material: whether the information could be expected to affect the market price of that company’s securities or to be considered important by investors who are considering trading that company’s securities. If the information makes you want to trade, it would probably have the same effect on others. Keep in mind that both positive and negative information can be material.
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There is no bright-line standard for assessing materiality; rather, materiality is based on an assessment of all of the facts and circumstances, and is often evaluated by relevant enforcement authorities with the benefit of hindsight. Depending on the specific details, the following items may be considered material nonpublic information until publicly disclosed within the meaning of this policy. There may be other types of information that would qualify as material information as well; use this list merely as a non-exhaustive guide:
| ● | financial results or forecasts; |
| ● | new products, services, licenses, features or processes; |
| ● | acquisitions or dispositions of assets, divisions or companies; |
| ● | public or private sales of debt or equity securities; |
| ● | share splits, dividends or changes in dividend policy; |
| ● | the establishment of a repurchase program for Metalpha’s securities; |
| ● | regulatory developments; |
| ● | management or control changes; |
| ● | employee layoffs; |
| ● | a disruption in Metalpha’s operations or breach or unauthorized access of its property or assets, including its facilities and information technology infrastructure; |
| ● | tender offers or proxy fights; |
| ● | accounting restatements; |
| ● | litigation or settlements; |
| ● | impending bankruptcy; |
| ● | gain or loss of a license agreement or other contracts with customers or suppliers; and |
| ● | pricing changes or discount policies. |
When information is considered public
The prohibition on trading when you have material nonpublic information lifts once that information becomes publicly disseminated. But for information to be considered publicly disseminated, it must be widely disseminated through a press release, a filing with the Securities and Exchange Commission (the “SEC”), or other widely disseminated announcement. Once information is publicly disseminated, it is still necessary to afford the investing public with sufficient time to absorb the information. Generally speaking, information will be considered publicly disseminated for purposes of this policy only after two full trading days have elapsed since the information was publicly disclosed. For example, if we announce material nonpublic information before trading begins on Wednesday, then you may execute a transaction in our securities on Friday; if we announce material nonpublic information after trading ends on Wednesday, then you may execute a transaction in our securities on Monday. Depending on the particular circumstances, Metalpha may determine that a longer or shorter waiting period should apply to the release of specific material nonpublic information.
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Trading Blackouts
Because our workplace culture tends to be open, odds are that the vast majority of our employees, directors and designated consultants will possess material nonpublic information at certain points during the year. To minimize even the appearance of insider trading among our employees, directors and designated consultants we have established “trading blackout periods” during which Metalpha employees, directors, designated consultants and their Related Persons—regardless of whether they are aware of material nonpublic information or not—may not conduct any trades in Metalpha securities. That means that, except as described in this policy, all Metalpha employees, directors, designated consultants and their Related Persons will be able to trade in Metalpha securities only during limited open trading window periods that generally will begin after two full trading days have elapsed since the public dissemination of Metalpha’s annual or semi-annual financial results and end at the beginning of the next trading blackout period. Of course, even during an open trading window period, you may not (unless an exception applies) conduct any trades in Metalpha’s securities if you are otherwise in possession of material nonpublic information.
For purposes of this policy, each “trading blackout period” will generally begin at the close of the market two business days before the end of each fiscal period for which financial results will be released and end after two full trading days have elapsed since the public dissemination of Metalpha’s financial results for that period. Please note that the trading blackout period may commence early or may be extended if, in the judgment of the Chief Operating Officer, there exists undisclosed information that would make trades by Metalpha employees, directors and designated consultants inappropriate. It is important to note that the fact that the trading blackout period has commenced early or has been extended should be considered material nonpublic information that should not be communicated to any other person.
A Metalpha employee, director or designated consultant who believes that special circumstances require him or her to trade during a trading blackout period should consult the Chief Operating Officer. Permission to trade during a trading blackout period will be granted only where the circumstances are extenuating, the Chief Operating Officer concludes that the person is not in fact aware of any material nonpublic information relating to Metalpha or its securities, and there appears to be no significant risk that the trade may subsequently be questioned.
Event-Specific Trading Blackouts
From time to time, an event may occur that is material to Metalpha and is known by only a few directors, officers and/or employees. So long as the event remains material and nonpublic, the persons designated by the Chief Operating Officer may not trade in Metalpha’s securities. In that situation, Metalpha will notify the designated individuals that neither they nor their Related Persons may trade in the Metalpha’s securities. The existence of an event-specific trading blackout should also be considered material nonpublic information and should not be communicated to any other person. Even if you have not been designated as a person who should not trade due to an event-specific trading blackout, you should not trade while aware of material nonpublic information. Exceptions will not be granted during an event-specific trading blackout.
The scheduled and event-driven trading blackouts do not apply to those transactions to which this policy does not apply, as described under the heading “Exceptions to this Policy” below.
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Exceptions to this Policy
This policy does not apply in the case of the following transactions, except as specifically noted:
1. Option Exercises. This policy does not apply to the exercise of options granted under Metalpha’s equity compensation plans for cash or, where permitted under the option, by a net exercise transaction with the Company or by delivery to Metalpha of already-owned Metalpha shares. This policy does, however, apply to any sale of shares as part of a broker-assisted cashless exercise or any other market sale, whether or not for the purpose of generating the cash needed to pay the exercise price or pay taxes.
2. Tax Withholding Transactions. This policy does not apply to the surrender of shares directly to Metalpha to satisfy tax withholding obligations as a result of the issuance of shares upon vesting or exercise of restricted stock units, warrants, options or other equity awards granted under Metalpha’s equity compensation plans. Of course, any market sale of the shares received upon exercise or vesting of any such equity awards remains subject to all provisions of this policy whether or not for the purpose of generating the cash needed to pay the exercise price or pay taxes.
3. 10b5-1 Automatic Trading Programs. Under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended (“Exchange Act”), and as permitted by Metalpha, directors, officers and designated consultants may establish a trading plan under which a broker is instructed to buy and sell Metalpha securities based on pre-determined criteria (a “10b5-1 Trading Plan”). So long as a 10b5-1 Trading Plan is properly established, purchases and sales of Metalpha securities pursuant to that Trading Plan are not subject to this policy. To be properly established, an eligible person’s Trading Plan must be established in compliance with the requirements of Rule 10b5-1 of the Exchange Act and any applicable 10b5-1 trading plan guidelines of Metalpha at a time when Metalpha was not in a trading blackout period and they were not otherwise aware of any material nonpublic information relating to Metalpha or the securities subject to the Trading Plan. Moreover, all 10b5-1 Trading Plans must be reviewed and approved by Metalpha before being established to confirm that the 10b5-1 Trading Plan complies with all pertinent company policies and applicable securities laws.
Special and Prohibited Transactions
1. Inherently Speculative Transactions. No Metalpha employee, director or designated consultant may engage in short sales, transactions in put options, call options or other derivative securities on an exchange or in any other organized market, or in any other inherently speculative transactions with respect to Metalpha’s shares.
2. Hedging Transactions. Hedging or monetization transactions can be accomplished through a number of possible mechanisms, including through the use of financial instruments such as prepaid variable forwards, equity swaps, collars and exchange funds. Such hedging transactions may permit a Metalpha employee, director or designated consultant to continue to own Metalpha’s securities obtained through employee benefit plans or otherwise, but without the full risks and rewards of ownership. When that occurs, the Metalpha employee, director or designated consultant may no longer have the same objectives as Metalpha’s other shareholders. Therefore, Metalpha employees, directors and designated consultants are prohibited from engaging in any such transactions.
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3. Margin Accounts and Pledged Securities. Securities held in a margin account as collateral for a margin loan may be sold by the broker without the customer’s consent if the customer fails to meet a margin call. Similarly, securities pledged (or hypothecated) as collateral for a loan may be sold in foreclosure if the borrower defaults on the loan. Because a margin sale or foreclosure sale may occur at a time when the pledgor is aware of material nonpublic information or otherwise is not permitted to trade in Metalpha’s securities, Metalpha employee, director and designated consultants are prohibited from holding Metalpha’s securities in a margin account or otherwise pledging Metalpha’s securities as collateral for a loan.
4. Standing and Limit Orders. Standing and limit orders (except standing and limit orders under approved Trading Plans, as discussed above) create heightened risks for insider trading violations similar to the use of margin accounts. There is no control over the timing of purchases or sales that result from standing instructions to a broker, and as a result the broker could execute a transaction when a Metalpha employee, director or designated consultant is in possession of material nonpublic information. Metalpha therefore discourages placing standing or limit orders on Metalpha’s securities. If a person subject to this policy determines that they must use a standing order or limit order (other than under an approved Trading Plan as discussed above), the order should be limited to short duration and the person using such standing order or limit order is required to cancel such instructions immediately in the event restrictions are imposed on their ability to trade pursuant to the “Trading Blackouts” and “Event-Specific Trading Blackouts” provisions above.
Pre-Clearance and Advance Notice of Transactions
In addition to the requirements above, officers, directors and other applicable members of management who have been notified that they are subject to pre-clearance requirements face a further restriction: Even during an open trading window, they may not engage in any transaction in, or enter into, modify or terminate any contract, instruction or written plan or arrangement in, Metalpha’s securities without first obtaining pre-clearance from Metalpha’s Chief Operating Officer or his designee at least two business days in advance. The Chief Operating Officer or his designee will then determine whether the Covered Insider may proceed and, if applicable, will assist with any required reporting requirements under Section 16(a) of the Exchange Act. Pre-cleared transactions not completed within two business days will require new pre-clearance.
Persons subject to pre-clearance must also provide advance notice of their plans to exercise an outstanding option to the Chief Operating Officer or his designee. Metalpha intends to advise all relevant persons if and when the reporting requirements under Section 16(a) of the Exchange Act become applicable. Following the date specified in that notice, once any transaction takes place, the officer, director or applicable member of management must immediately notify the Chief Operating Officer or his designee so that Metalpha may assist in any Section 16 reporting obligations.
Control Shares and Short-Swing Trading
Officers and directors may also be subject to restrictions on sales of shares by control persons (Rule 144 under the U.S. Securities Act of 1933, as amended). In addition, should Metalpha cease to be a foreign private issuer, officers and directors will be subject to the reporting obligations under Section 16 of the Exchange Act will also be subject to profit disgorgement on short-swing transactions (within the meaning of Section 16(b) of the Exchange Act). Officers and directors should take care not to violate these rules and to file any notices of sale required by Rule 144.
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Policy’s Duration
This policy continues to apply to your transactions in Metalpha’s securities and the securities of other applicable public companies as more specifically set forth in this policy, even after your relationship with Metalpha has ended. If you are aware of material nonpublic information when your relationship with Metalpha ends, you may not trade Metalpha’s securities or the securities of other applicable publicly traded companies until the material nonpublic information has been publicly disseminated or is no longer material. Further, if you leave Metalpha during a trading blackout period, then you may not trade Metalpha’s securities or the securities of other applicable companies until the trading blackout period has ended.
Individual Responsibility
Persons subject to this policy have ethical and legal obligations to maintain the confidentiality of information about Metalpha and to not engage in transactions in Metalpha’s securities or the securities of other applicable public companies while aware of material nonpublic information, as more specifically set forth in this policy. Each individual is responsible for making sure that he or she complies with this policy, and that any family member, household member or other person or entity whose transactions are subject to this policy, as discussed under the heading “Persons Subject to this Policy” above, also comply with this policy. In all cases, the responsibility for determining whether an individual is aware of material nonpublic information rests with that individual, and any action on the part of Metalpha or any employee or director of Metalpha pursuant to this policy (or otherwise) does not in any way constitute legal advice or insulate an individual from liability under applicable securities laws. You could be subject to severe legal penalties and disciplinary action by Metalpha for any conduct prohibited by this policy or applicable securities laws. See “Penalties” below.
Penalties
Anyone who engages in insider trading or otherwise violates this policy may be subject to both civil liability and criminal penalties. Violators also risk disciplinary action by Metalpha, including termination of employment. Anyone who has questions about this policy should contact their own attorney or Metalpha’s legal department, at info@metalpha.finance.
Amendments
Metalpha is committed to continuously reviewing and updating its policies and procedures. Metalpha therefore reserves the right to amend, alter or terminate this policy at any time and for any reason. A current copy of the Metalpha’s policies regarding insider trading may be obtained by contacting the legal department.
7
Exhibit 12.1
Certification by the Principal Executive Officer Pursuant to Exchange Act
Rule 13a-14(a)/15d-14(a) as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Bingzhong Wang, hereby certify that:
| 1. | I have reviewed this annual report on Form 20-F of Metalpha Technology Holding Limited (the “Company”); |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report; |
| 4. | The company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have: |
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| (c) | Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| (d) | Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by this annual report that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and |
| 5. | The company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions): |
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and |
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting. |
| Date: August 6, 2026 | ||
| By: | /s/ Bingzhong Wang | |
| Name: | Bingzhong Wang | |
| Title: | Chief Executive Officer | |
Exhibit 12.2
Certification of the Principal Financial Officer Pursuant to Exchange Act
Rule 13a-14(a)/15d-14(a) as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Pengyuan Fan, hereby certify that:
| 1. | I have reviewed this annual report on Form 20-F of Metalpha Technology Holding Limited (the “Company”); |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report; |
| 4. | The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have: |
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| (c) | Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| (d) | Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by this annual report that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and |
| 5. | The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions): |
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and |
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting. |
| Date: August 6, 2026 | ||
| By: | /s/ Pengyuan Fan | |
| Name: | Pengyuan Fan | |
| Title: | Chief Financial Officer | |
Exhibit 13.1
Certification of the Principal Executive Officer Pursuant to 18 U.S.C.
Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
In connection with the annual report on Form 20-F for the year ended March 31, 2026 of Metalpha Technology Holding Limited (the “Company”) as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Bingzhong Wang, Chief Executive Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:
| (1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
| (2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
| Date: August 6, 2026 | ||
| By: | /s/ Bingzhong Wang | |
| Name: | Bingzhong Wang | |
| Title: | Chief Executive Officer | |
Exhibit 13.2
Certification of the Principal Financial Officer Pursuant to 18 U.S.C.
Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
In connection with the annual report on Form 20-F for the year ended March 31, 2026 of Metalpha Technology Holding Limited (the “Company”) as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Pengyuan Fan, Chief Financial Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:
| (1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
| (2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
| Date: August 6, 2026 | ||
| By: | /s/ Pengyuan Fan | |
| Name: | Pengyuan Fan | |
| Title: | Chief Financial Officer | |
Exhibit 15.1
 |
Onestop Assurance PAC |
| 10 Anson Road | |
| #21-14 International Plaza | |
| Singapore 079903 | |
| Email: audit@onestop-audit.com | |
| Website: https://www.onestop-audit.com |
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (File No. 333-283335) of our report dated August 6, 2026, relating to the audit of the consolidated statements of financial position of Metalpha Technology Holding Limited and related consolidated statement of profit or loss and comprehensive loss, changes in equity, and cash flows of the year ended March 31, 2026 and related notes (collectively referred to as the “financial statements”), which appears in this Form 20-F Commission on August 6, 2026.
/s/ Onestop Assurance PAC
Singapore
August 6, 2026