OFA Group (OFAL) Registration Filing summary

Company overview and business model

• Provides architectural design and fit-out services for commercial and residential buildings in Hong Kong through a wholly owned subsidiary, leveraging technology such as AI and visualization tools to enhance efficiency and client experience.

• Operates a traditional project-based model but is transitioning to a subscription-based model for proprietary AI tools, including a co-development agreement for an automated building code compliance review system.

• Maintains a strong client referral network, with 90% of revenue from repeat or referred customers, and is expanding into the US and broader Asia markets.

Financial performance and metrics

• Revenue declined 51.7% year-over-year to $530,606 for the year ended March 31, 2024, primarily due to economic downturn and reduced demand in Hong Kong.

• Net loss of $93,197 for the year ended March 31, 2024, compared to net income of $174,268 in the prior year; accumulated deficit of $312,388 as of March 31, 2024.

• Gross profit margin increased to 32.97% in FY2024 from 31.7% in FY2023, despite lower revenue.

• As of September 30, 2024, cash and cash equivalents were $177,053, with positive working capital of $208,007 and outstanding bank borrowings of $475,434.

• The company has a going concern risk due to recurring losses and negative cash flows from operations.

Use of proceeds and capital allocation

• Plans to allocate approximately 45% of IPO net proceeds to R&D for AI services and tools, 15% to expand in-house design and project management teams, and 40% for general working capital, including US expansion.

• No current plans to pay dividends; future earnings will be retained to finance operations.