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.

• Business model is project-based, with a focus on innovation, efficiency, and scalability, leveraging digital tools such as Houzz and developing proprietary AI solutions.

• Entered a co-development agreement for an AI-enabled building code compliance review system, aiming for a subscription-based service post-launch.

• Plans to expand into the US and broader Asia markets, with a new US office and future subsidiary.

Financial performance and metrics

• Revenue for the year ended March 31, 2024 was $530,606, down 51.7% from $1,099,225 in 2023, primarily due to economic downturn in Hong Kong.

• Net loss for the year ended March 31, 2024 was $93,197, compared to net income of $174,268 in 2023.

• Gross profit margin increased to 32.97% in 2024 from 31.70% in 2023, despite lower revenue.

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

• Outstanding bank borrowings as of September 30, 2024 were $475,434 at an annual interest rate of 3.625%.

• The company has an accumulated deficit of $505,250 as of September 30, 2024, raising substantial doubt about its ability to continue as a going concern.

Use of proceeds and capital allocation

• Plans to use approximately 45% of net proceeds for R&D of architectural AI services and tools.

• 15% of proceeds will enhance service capacity by establishing in-house teams for design and project management.

• 40% allocated to general working capital, daily operational needs, and establishing a US-based subsidiary.