HONG KONG, Feb. 1, 2024 /PRNewswire/ -- Alpha Technology Group Limited (the "Company" or "Alpha")(NASDAQ: ATGL), a holding company incorporated in the British Virgin Islands that currently provides cloud-based IT solution services through its operating subsidiaries, Techlution Service Limited and Neural Sense Limited (collectively, "Operating Subsidiaries"), today reported its financial results for the fiscal year ended September 30, 2023.

Fiscal Year 2023 Financial Highlights:

  • Revenues increased by HK$4.27 million (approximately US$0.55 million), or 96.55%, from HK$4.42 million for the year ended September 30, 2022 to HK$8.69 million (approximately US$1.11 million) for the year ended September 30, 2023.
  • Gross profit increased by HK$1.85 million (approximately US$0.24 million), or approximately 183.99%, from HK$1.00 million for the year ended September 30, 2022 to HK$2.85 (approximately US$0.36 million) for the year ended September 30, 2023.
  • Gross profit margin increased from 22.67% for the year ended September 30, 2022 to 32.75% for the year ended September 30, 2023.


For the Years Ended September 30

 (in HK$ millions; differences due

to rounding)


2023



2022



% Change

(differences due

to rounding,

and % were

extracted from

annual report)

Revenues


$

 

8.69



$

4.42



 

96.55 %

Cost of revenue



5.84




3.42



70.92 %

Gross profit



2.85




1.00



183.99 %

Gross profit margin



 

32.75 %




22.67 %



10.08 percentage

point

Selling, general, and administrative

expenses



 

7.23




3.72



 

94.47 %

Loss from operations



(6.75)




(2.71)



148.86 %

Net loss



(6.99)




(2.66)



162.33 %

Mr. Tsang Chun Ho Anthony, our executive director and president, and Mr. Leung Tsz Him, our Chief Executive Officer, commented, "Alpha recorded a significant increase in revenue of 96.55% to HK$8.69 million (approximately US$1.11 million) for the year ended September 30, 2023. This impressive growth was driven by (i) the increase in our revenue generated from system development services as a result of the completion of several projects for two carpark management companies in Hong Kong; (ii) the increase in revenue from NFT-related services resulting from our engagement of two NFT projects in 2023; and (iii) the increase in revenue from our technological support and maintenance service and other services resulting from provision of the maintenance services to a local non-government organization." 

"Alpha's cost of revenue saw a significant annual increase of 70.92% to HK$5.84 million (approximately US$0.75 million) for the year ended September 30, 2023. This increase was primarily stemmed from higher staff costs and the increase in consultancy fee, which was in line with our business growth."

"Despite the increased costs, Alpha still demonstrated it recorded an increased gross profit margin of 32.75% for the year ended September 30, 2023, compared to 22.67% in the previous year. This positive trend was primarily attributed to the higher gross profit margins associated with revenue from NFT-related services, which typically entailed higher profit margins compared to those of system development services and web and mobile application development services."

"Alpha's selling, general, and administrative expenses increased by 94.47% to HK$7.23 million (approximately US$0.92 million) for the year ended September 30, 2023, mainly attributable to (i) the increase in our staff costs and our Director's remuneration of our Operating Subsidiaries and our Company; (ii) the increase in the audit fee; and (iii) the increase in amortization of our intangible assets.  Consequently, Alpha incurred a net loss of HK$6.99 million (approximately US$0.89 million) for the year, reflecting the Company's continued expansion on its operations and capturing growth opportunities. "Looking ahead, Alpha remains committed to optimizing its cost structure while exploring avenues for revenue growth. With our solid foundation and a focus on strategic execution, we believe Alpha is well-positioned to enhance its financial performance in the future."

Fiscal Year 2023 Financial Results:

Revenues

Our revenue significantly increased by HK$4.27 million (approximately US$0.55 million), or 96.55%, from HK$4.42 million for the year ended September 30, 2022 to HK$8.69 million (approximately US$1.11 million) for the year ended September 30, 2023, primarily due to (i) the increase in our revenue generated from system development services, attributed to the completion of several projects including the development of parking management solution, pre-booking systems and other internal systems for two carpark management companies in Hong Kong in 2023; (ii) the increase in revenue from NFT-related services resulting from our engagement of two NFT projects in 2023, which involved creating an NFT marketplace, developing NFT-related artworks, building an NFT minting site, and preparing a proposal in relation to an NFT-related game; and (iii) the increase in revenue from our technological support and maintenance service and other services, primarily attributable to the provision of the maintenance services on the enrollment and payment system of a local non-government organization which is dedicated to the welfare services of children and youth in Hong Kong.

The following table set forth the breakdown of our revenue by services types for the years indicated:



For the Years Ended September 30,

 (In HK$ millions; difference due

to rounding)


2023


2022


Variance



Amount



Amount



Amount


%

System development


$

5.97



$

3.60



$

2.37



65.83

%

Web and mobile application

    development



-




0.39




(0.39)



(100)

%

AI-OCR services



0.08




0.07




0.01



14.29

%

Technological support and

    maintenance service and

    other services



1.05




0.36




0.69



191.67

%

NFT



1.59




-




1.59



100

%

Total


$

8.69



$

4.42



$

4.27



96.55

%

Cost of revenue

Our cost of revenue saw a significant increase of HK$2.42 million (approximately US$0.31 million), or 70.92%, from HK$3.42 million for the year ended September 30, 2022 to HK$5.84 million (approximately US$0.75 million) for the year ended September 30, 2023. This increase primarily stemmed from (i) the increase in staff costs as a result of our business growth, which required us to increase the headcount to support our business; and (ii) the increase in the consultancy fee which was charged by our Operating Subsidiaries' independent suppliers for providing cloud architecture services to support our cloud-based IT solution services. Our management fee mainly represented the fee charged by Simplus IO Limited and ProAlgories Limited, which provided ad-hoc technical support services and staff to assist us on project execution. Since February 8, 2023, following our team's expansion, our Operating Subsidiaries have ceased to procure the ad-hoc technical support services and human resources from these two related companies, resulting in a 56.01% decrease in our management fee for the year ended September 30, 2023. We anticipate that our management fee will continue to decrease in the future.

Gross profit and margin

Our gross profit for the years ended September 30, 2022 and 2023, amounted to HK$1.00 million and HK$2.85 million (approximately US$0.36 million), respectively, which was in line with our revenue growth as mentioned above. Our gross profit margin has also increased from 22.67% for the year ended September 30, 2022 to 32.75% for the year ended September 30, 2023, which was mainly attributable to the increase in our revenue from NFT-related services which generally entailed higher gross profit margins as compared to those of system development services and web and mobile application development services.

Selling, general and administrative expenses

Our selling, general and administrative expenses increased by HK$3.51 million (approximately US$0.45 million), or 94.47%, from HK$3.72 million for the year ended September 30, 2022 to HK$7.23 million (approximately US$0.92 million) for the year ended September 30, 2023 for the year ended September 30, 2023. The increase was primarily due to (i) the increase in staff costs as a result of the increase in number of our administrative and marketing staff to support our business expansion; (ii) an increase in director's remuneration of our Operating Subsidiaries and our Company, primarily attributable to our appointments of two executive directors in February 2023 and an independent non-executive director in January 2023; (iii) the increase in audit fee due to an audit fee for a listed corporation charged by our auditor; and (iv) the increase in amortization of our intangible assets (i.e. our technical know-how and coding for our system development services and our AI-OCR services). However, such increase was partially offset by the decrease in consultancy fees, mainly attributable to the service fee for composing the codes and developing programs to facilitate our web and mobile application development services during the year ended September 30, 2022, which was not replicated during the year ended September 30, 2023. Additionally, we purchased a data scraper software for preliminary works for the system development projects in the fiscal year ended September 30, 2022, while no such cost was incurred during this year.

Net loss

As a result of the foregoing, net loss increased by HK$4.32 million (approximately US$0.55 million), or 162.33% from HK$2.66 million for the year ended September 30, 2022 to HK$6.99 million (approximately US$0.89 million) for the year ended September 30, 2023.

Recent developments

Initial public offering:

On November 2, 2023, Alpha completed its initial public offering and raised approximately US$7.00 million from the sale of 1,750,000 Ordinary Shares at a price of US$4 per share. Additionally, the underwriters exercised the over-allotment option to purchase an additional 262,500 Ordinary Shares at the public offering price of $4.00 per share. After deducting underwriting discounts and all offering expenses paid or payable by us, the net proceeds totaled around US$5.32 million.

About Alpha Technology Group Limited

Alpha is a holding company incorporated in the British Virgin Islands and currently conducts its business through its Operating Subsidiaries, Techlution Service Limited and Neural Sense Limited. Our Operating Subsidiaries are cloud-based IT solution service providers in Hong Kong that utilize analytic skills, programming skills, artificial intelligence technologies, and technological know-how to provide comprehensive solutions designed to optimize business performance, meet various industry-specific operational challenges and create new business opportunities. Though its Operating Subsidiaries, Alpha provides (i) system development services; (ii) web and mobile application development services; and (iii) artificial intelligence-powered optical character recognition ("AI-OCR") services with a view to achieving digitalization of customers' business and operations. Alpha also provides technological support, maintenance and NFT-related services such as creation of NFT artwork, marketplace and development of NFT-related games to customers. Our Operating Subsidiaries have a diversified customer base and our customers come from a variety of industries with different scales of operations, including consulting, real estate planning, carpark management and social services, etc. For more information, please visit https://alphatechnologys.com and https://techlution.io.

Forward-Looking Statement

This press release contains forward-looking statements that involve substantial risks and uncertainties. All statements contained in this press release other than statements of historical fact, including statements regarding our future results of operations and financial position, our business strategy and plans, and our objectives for future operations, are forward-looking statements. The words "may," "might," "will," "could," "would," "should," "expect," "intend," "plan," "goal," "objective," "anticipate," "believe," "estimate," "predict," "potential," "continue" and "ongoing," or the negative of these terms, similar expressions or other comparable terminology intended to identify statements about the future. These statements are subject to uncertainties and risks including, but not limited to, the following: the Company's goals and strategies; the future business development, financial condition and results of operation, the expectations regarding demand for and market acceptance of our services; the ability to continue to develop new technologies and/or upgrade our existing technologies; and changes in general economic, business and industry conditions and  other risks contained in the annual reports for the year ended September 30, 2023 filed by our Company with the SEC. For these reasons, among others, investors are cautioned not to place undue reliance upon any forward-looking statements in this press release. Additional factors are discussed in the Company's filings with the SEC, which are available for review at www.sec.gov. Our Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof.

For more information, please contact:

Company

Alpha Technology Group Limited
Investor Relations Department
Email: ir@rainbowcaphk.com 

Investor Relations

WFS Investor Relations Inc.
Janice Wang, Managing Partner
Email: services@wealthfsllc.com
Phone: +86 13811768599
+1 628 283 9214

 

 

ALPHA TECHNOLOGY GROUP LIMITED
CONSOLIDATED BALANCE SHEETS




(Predecessor)



(Successor)



As of September 30,



2022



2023



HK$



HK$



US$ 

(Note)

Assets









Current assets:









Cash and cash equivalent



2,801,810




3,629,347




463,471

Accounts receivable, net



4,500




247,655




31,626

Rental deposit



119,548




119,548




15,266

Deferred cost of revenue



1,838,776




2,088,175




266,662

Deferred offering costs






18,758,367




2,395,460

Due from shareholders






100




13

Due from a related party



1,343,240




683,438




87,275

Total current assets



6,107,874




25,526,630




3,259,773

Property and equipment, net



33,511




55,117




7,038

Intangible assets






4,605,133




588,080

Goodwill






10,176,959




1,299,607

Right of use asset-finance lease



415,336




166,716




21,290

Total non-current assets



448,847




15,003,925




1,916,015

TOTAL ASSETS



6,556,721




40,530,555




5,175,788













Liabilities












Current liabilities:












Bank loans – current



681,046




562,331




71,810

Accrued expenses and other liabilities



657,704




11,886,957




1,517,975

Lease liability-finance lease



111,738




116,834




14,920

Deferred revenue



6,209,827




5,168,876




660,070

Advance from customers



325,000




842,433




107,579

Deferred tax liabilities






844,274




107,815

Tax payables






233,259




29,787

Due to directors






444,379




56,748

Due to related parties



1,065,569







Total current liabilities



9,050,884




20,099,343




2,566,704













Non-current liabilities












Bank loans – non-current



1,469,529




911,272




116,370

Lease liability-finance lease-non-current



259,897




143,057




18,268

Total non-current liabilities



1,729,426




1,054,329




134,638

TOTAL LIABILITIES



10,780,310




21,153,672




2,701,342

 

 

ALPHA TECHNOLOGY GROUP LIMITED
CONSOLIDATED BALANCE SHEETS — (Continued)




(Predecessor)



(Successor)



As of September 30,



2022



2023



HK$



HK$



US$
(Note)

Shareholders' equity (deficit)









Ordinary shares









Alpha Technology Group Limited, US$0.0001 par value;

    1,500,000,000 shares authorized; 13,250,000 shares issued as

    of September 30, 2023






10,000,100




1,273,914

Neural Sense Limited, no par value; 10,000 shares authorized;

    10,000 and 10,000 shares issued and outstanding as of

    September 30, 2021 and 2022, respectively



10,000







Techlution Service Limited, HK$1 par value; 10,000 shares

    authorized; 10,000 and 10,000 shares issued and outstanding

    as of September 30, 2021 and 2022, respectively



10,000







Capital reserves






16,364,143




2,084,633

Accumulated other comprehensive income









8,190

Accumulated deficit



(4,243,589)




(6,987,360)




(892,291)

Total shareholders' equity (deficit)



(4,223,589)




19,376,883




2,474,446

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)



6,556,721




40,530,555




5,175,788

 

 

ALPHA TECHNOLOGY GROUP LIMITED
CONSOLIDATED STATEMENTS OF OPERATION AND COMPREHENSIVE LOSS




(Predecessor)



(Successor)



For the year
ended
September 30,
2021



For the year
ended
September 30,
2022



From
October 1,
2022 to
October 11,
2022



From
October 12,
2022 to
September 30,
2023



HK$



HK$



HK$



HK$



US$ 

(Note)

Revenues



4,055,406




4,421,208







8,689,749




1,109,689

Cost of revenue



(2,598,293)




(3,419,035)







(5,843,677)




(746,243)

Gross profit



1,457,113




1,002,173







2,846,072




363,446





















Operating expenses:




















Listing expenses












(2,373,596)




(303,110)

Selling, general and administrative

    expenses



(2,382,351)




(3,716,233)




(173,188)




(7,053,591)




(900,749)

Total operating expenses



(2,382,351)




(3,716,233)




(173,188)




(9,427,187)




(1,203,859)

Loss from operations



(925,238)




(2,714,060)




(173,188)




(6,581,115)




(840,413)





















Other income:




















Other income, net



16,500




210,450




16,801




77,137




9,850

Interest expense, net



(47,74))




(86,621)







(74,587)




(9,525)

Total other income (loss), net



(31,243)




123,829




16,801




2,550




325





















Loss before tax expense



(956,481)




(2,590,231)




(156,387)




(6,578,565)




(840,088)

Income tax expense



(24,554)




(73,323)







(252,408)




(32,233)

Net loss



(981,035)




(2,663,554)




(156,387)




(6,830,973)




(872,321)





















Other comprehensive loss




















Foreign currency translation gain, net

    of taxes















8,190

Total comprehensive loss



(981,035)




(2,663,554)




(156,387)




(6,830,973)




(864,131)





















Net loss per share attributable to

    ordinary shareholders of the

    Company




















— Basic



(49)




(133)




(8)




(1)




— Diluted












(6)
























Weighted average number of

    ordinary shares used in computing

    net loss per share




















— Basic



20,000




20,000




20,000




13,250,000




— Diluted












1,169,808




 

 

ALPHA TECHNOLOGY GROUP LIMITED
CONSOLIDATED STATEMENTS OF CASH FLOWS




(Predecessor)



(Successor)



For the year

ended
September 30,



For the year

ended
September 30,



From
October

1,
2022 to
October

11,



From
October 12,
2022 to
September 30,



2021



2022



2022



2023



HK$



HK$



HK$



HK$



US$
(Note)

Operating activities















Net loss



(981,035)




(2,663,554)




(156,387)




(6,830,973)




(872,321)

Adjustments to reconcile net loss

    to net cash operating activities:




















Depreciation



450




6,429







9,904




1,265

Amortization of intangible

    assets












511,681




65,342

Amortization of right-of-use

    asset



43,720




131,159







248,620




31,749

Non cash lease expense



353,128




150,640










Loss on disposal on property

    and equipment












16,923




2,161

Allowance for doubtful

    account






313,362










Changes in operating assets and

    liabilities:




















Accounts receivable



(76,924)




69,138




(32,828)




(210,327)




(26,859)

Rental deposit






(119,548)










Accrued expenses and other

    liabilities



139,031




409,762




(452,715)




11,456,057




1,462,949

Advance from customers



160,000




165,000







517,433




66,076

Lease liability



(426,513)




(188,717)










Deferred revenue



517,315




4,666,012




365,328




(1,406,279)




(179,583)

Income taxes payable












233,259




29,787

Deferred cost of revenue



(261,000)




(1,377,776)







(249,399)




(31,848)

Cash provided by (used in)

    operating activities



(531,828)




1,561,907




(276,602)




4,296,899




548,718





















Investing activities




















Advance to a related party



(809,170)













Purchase of property and

    equipment



(14,935)




(25,455)







(48,432)




(6,185)

Repayment from a related party






404,182










Payment to acquire right of use

    assets-finance lease



(77,133)













Net cash used to acquire

    subsidiaries in business

    combinations












(10,000,000)




(1,277,008)

Cash provided by (used in)

    investing activities



(901,238)




378,727







(10,048,432)




(1,283,193)





















Financing activities




















Proceeds from issue of shares












10,000,100




1,273,914

Capital reserves from shareholders












16,364,143




2,084,633

Repayment to bank loans



(38,679)




(431,746)







(676,972)




(86,450)

Proceeds from bank loans



2,304,000













Deferred offering costs












(18,758,367)




(2,395,459)

Advanced to related parties






(38,000)







(1,749,007)




(223,350)

Borrowings from a related party



492,700













Borrowings to shareholders












(100)




(13)

Repayment from a director









(18,966)




1,806,585




230,702

Principal payment for obligation

    under finance leases



(34,578)




(106,869)







(111,744)




(14,270)

Cash (used in) provided by

    financing activities



2,723,443




(576,615)




(18,966)




6,874,638




869,707





















Net increase (decreased) in cash



1,290,377




1,364,019




(295,568)




1,123,105




135,232

Unrealized exchange difference

    separately from cash flows from

    financing activities















8,190

Cash as of beginning of the year/

    period



147,414




1,437,791




2,801,810




2,506,242




320,049

Cash as of the end of the year/

    period



1,437,791




2,801,810




2,506,242




3,629,347




463,471





















Supplementary Cash Flows

    Information




















Cash paid for interest



55,189




105,854







74,587




9,525

Cash paid for taxes



24,554




73,323







19,149




2,445





















Non-cash transaction




















Lease liabilities arising from

    obtaining right-of-use assets



513,082













Provision for income tax












270,466




34,539

 

Cision View original content:https://www.prnewswire.com/news-releases/alpha-technology-group-limited-reports-2023-financial-year-results-302050113.html

SOURCE Alpha Technology Group Limited

Copyright 2024 PR Newswire

Alpha Technology (NASDAQ:ATGL)
Historical Stock Chart
From Oct 2024 to Nov 2024 Click Here for more Alpha Technology Charts.
Alpha Technology (NASDAQ:ATGL)
Historical Stock Chart
From Nov 2023 to Nov 2024 Click Here for more Alpha Technology Charts.