Prestige Wealth (PWM)2025-02-13 21:30Financial Reporting and Internal Controls - As of September 30, 2024, the company has engaged a qualified financial and accounting advisory team to improve internal control over financial reporting[129] - The effectiveness of internal controls is crucial to prevent fraud, and weaknesses may adversely affect the company's financial condition and share price[131] - Increased costs are anticipated as a result of being a public company, particularly after ceasing to qualify as an "emerging growth company"[147] - The Group's financial statements have been prepared on a "going concern" basis, indicating reliance on the successful commercialization of current services to achieve profitability[178] Compliance and Regulatory Risks - The company is exempt from certain Nasdaq corporate governance standards as a foreign private issuer, which may afford less protection to investors[134] - If the company fails to meet Nasdaq listing requirements, it could face delisting, negatively impacting share price and liquidity[135] - The company received a notification from Nasdaq on July 23, 2024, regarding non-compliance with the minimum bid price requirement, as the closing bid price was below 1.00 or greater for more than ten consecutive business days[170] - The company may face delisting risks if it fails to meet Nasdaq's continued listing standards, which could adversely affect liquidity and market price[168] - The company is subject to the Holding Foreign Companies Accountable Act (HFCAA), which could impact its ability to access U.S. capital markets if audit documentation cannot be inspected[154] - The PCAOB has determined it can inspect registered public accounting firms in mainland China and Hong Kong, but future access could be obstructed by PRC authorities[163] - The company may be affected by legislative changes that could reduce the time frame for delisting if its auditor is not subject to PCAOB inspections for two consecutive years[159] Market and Shareholder Considerations - The company qualifies as an "emerging growth company," allowing it to take advantage of reduced disclosure requirements, which may affect investor attractiveness[144] - The market price of the company's Class A Ordinary Shares may be volatile, influenced by various factors including market fluctuations unrelated to the company's performance[174] - The company’s Class A Ordinary Shares may be thinly traded, leading to potential difficulties in selling shares at desired prices[167] - The dual-class share structure allows Class B shareholders 20 votes per share compared to 1 vote for Class A, potentially limiting influence on corporate matters[179] - The potential conversion of Class B shares into Class A shares may have a dilutive effect on existing Class A shareholders, affecting market price[180] - The trading market for the company's Ordinary Shares may decline if analysts do not publish research or issue negative reports[173] Operational and Financial Risks - The company faces risks related to acquisitions, including management distraction and difficulties in retaining key employees and customers[130] - The Group limits credit risk by transacting with broker-dealers, banks, and regulated exchanges that have high credit ratings[644] - Liquidity risk is managed by monitoring liquid capital and maintaining adequate cash and bank balances to finance operations[646] - Interest rate risk is considered minimal as cash held with banks is short-term, with terms less than one month[647] - Inflation has not had a material impact on the Group's results of operations in recent years[648] - The Group may require additional financing to fund ongoing operations and expected business plans[178] - The Group's operations may be influenced by fluctuations in quarterly results and changes in financial estimates by analysts[177]