F-1: Roma Green Finance Seeks Up to $6.93 Million in Best Efforts Offering of Ordinary Shares and Warrants

Roma Green Finance Limited is launching a self-directed best efforts offering to sell up to 11 million ordinary shares and accompanying warrants to raise capital for brand strengthening, ESG investments, and working capital.

Summary

• Roma Green Finance Limited is conducting a self-directed best efforts offering to sell up to 11,000,000 ordinary shares at an assumed price of $0.60 per share, along with up to 33,000,000 common warrants.
• The offering does not have a minimum amount required to close.
• The company intends to use the net proceeds for strengthening brand and marketing, making investments in ESG and green environmental related projects, and for working capital.
• The company's ordinary shares are listed on the Nasdaq Capital Market under the symbol ROMA.
• The company will no longer be a controlled company after the offering, assuming all 11,000,000 Ordinary Shares are sold.
• The company faces risks associated with operating in Hong Kong, including potential intervention by the Chinese government.
• The company is an emerging growth company and a foreign private issuer, which allows for reduced reporting requirements.
• The company is subject to the Holding Foreign Companies Accountable Act (HFCA Act) and may face delisting if its auditor cannot be inspected by the PCAOB for a specified number of consecutive years.

Sentiment

Score: 4

Explanation: The document presents a mixed sentiment. While it highlights the company's growth strategies and competitive advantages, it also emphasizes significant risks and challenges, including financial losses, regulatory uncertainties, and potential delisting. The overall tone is cautiously optimistic but acknowledges substantial hurdles.

Positives

• The company intends to use the net proceeds for strengthening brand and marketing, making investments in ESG and green environmental related projects, and for working capital.
• The company is an emerging growth company and a foreign private issuer, which allows for reduced reporting requirements.

Negatives

• The company incurred net losses for the six months ended September 30, 2024 and the two years ended March 31, 2024 and 2023 and may be unable to generate sufficient operating cash flows and working capital to continue as a going concern.
• The company faces risks associated with operating in Hong Kong, including potential intervention by the Chinese government.
• The company is subject to the Holding Foreign Companies Accountable Act (HFCA Act) and may face delisting if its auditor cannot be inspected by the PCAOB for a specified number of consecutive years.

Risks

• The company's revenues, operating income, and cash flows are likely to fluctuate.
• The company may be unable to generate sufficient operating cash flows and working capital to continue as a going concern.
• The company relies on its management team and other key personnel in operating its business.
• The company's revenues are unpredictable due to the nature of its business.
• The company has a limited operating history and its future revenue and profits are subject to uncertainties.
• The company may be unable to successfully implement its business strategies and future plans for its Operating Subsidiaries.
• The company may face risks of clients default on payment.
• The company may be exposed to risks in relation to compliance standards.
• The company may be exposed to risks relating to its computer hardware system and data storage.
• The company's business may be adversely affected by the downturn of Hong Kong's economy or stock market owing to unforeseen circumstances.
• The company may be adversely affected by changes in the laws and regulations governing its customers and the stock exchanges in which they are listed.
• A downturn in the Hong Kong or global economy, or a change in economic and political policies of the PRC, could materially and adversely affect our Hong Kong Operating Subsidiary’s business and financial condition.
• The Company may rely on dividends and other distributions on equity paid by the Operating Subsidiaries to fund any cash and financing requirements it may have, and any limitations or restrictions, prohibitions, interventions or limitations by the PRC government on the ability of the Company or our Operating Subsidiaries to transfer cash or assets in or out of Hong Kong may result in these funds or assets not being available to fund operations or for other uses outside of Hong Kong, which could have a material and adverse effect on the business.
• The PCAOB’s HFCAA Determination report that the Board is unable to inspect or investigate completely registered public accounting firms headquartered in China or Hong Kong, a Special Administrative Region and dependency of the PRC, because of a position taken by one or more authorities in China or Hong Kong could result in the prohibition of trading in our securities by not being allowed to list on a U.S. exchange, and as a result an exchange may determine to delist our securities, which would materially affect the interest of our investors.
• The enactment of Law of the PRC on Safeguarding National Security in the Hong Kong Special Administrative Region (the Hong Kong National Security Law) could impact our Hong Kong subsidiaries, including one of our Operating Subsidiaries.
• We may become subject to a variety of PRC laws and other regulations regarding data security or securities offerings that are conducted overseas and/or other foreign investment in China-based issuers, and any failure to comply with applicable laws and regulations could have a material and adverse effect on our business, financial condition and results of operations and may hinder our ability to offer or continue to offer Ordinary Shares to investors and cause the value of our Ordinary Shares to significantly decline or be worthless.
• The Hong Kong legal system is subject to uncertainties which could limit the legal protections available to RRA.
• We are selling this offering without an underwriter and may be unable to sell any shares.
• The trading price for our Ordinary Shares may fluctuate significantly.
• We may not maintain the listing of our Ordinary Shares on the Nasdaq Capital Market, which could limit investors ability to make transactions in our Ordinary Shares and subject us to additional trading restrictions.
• The trading price of our Ordinary Shares may be volatile, which could result in substantial losses to investors.
• If securities or industry analysts do not publish research or reports about our business, or if they adversely change their recommendations regarding our shares, the market price for our shares and trading volume could decline.
• The sale or availability for sale of substantial amounts of our Ordinary Shares could adversely affect their market price.
• Short selling may drive down the market price of our Ordinary Shares.
• Because we do not expect to pay dividends in the foreseeable future, you must rely on price appreciation of our Ordinary Shares for a return on your investment.
• Because our public offering price is substantially higher than our net tangible book value per share, you will experience immediate and substantial dilution.
• You must rely on the judgment of our management as to the uses of the net proceeds from this offering, and such uses may not produce income or increase our share price.
• If we are classified as a passive foreign investment company, United States taxpayers who own our securities may have adverse United States federal income tax consequences.
• Our controlling shareholder has substantial influence over the Company. Its interests may not be aligned with the interests of our other shareholders, and it could prevent or cause a change of control or other transactions.
• As a company incorporated in the Cayman Islands, we are permitted to adopt certain home country practices in relation to corporate governance matters that differ significantly from Nasdaq corporate governance listing standards. These practices may afford less protection to shareholders than they would enjoy if we complied fully with Nasdaq corporate governance listing standards.
• You may face difficulties in protecting your interests, and your ability to protect your rights through U.S. courts may be limited, because we are incorporated under Cayman Islands law.
• Certain judgments obtained against us by our shareholders may not be enforceable.
• We are an emerging growth company within the meaning of the Securities Act and may take advantage of certain reduced reporting requirements.
• We are a foreign private issuer within the meaning of the rules under the Exchange Act, and as such we are exempt from certain provisions applicable to United States domestic public companies.
• We may lose our foreign private issuer status in the future, which could result in significant additional costs and expenses.
• The recent joint statement by the SEC, proposed rule changes submitted by Nasdaq, and an act passed by the U.S. Senate and the U.S. House of Representatives, all call for additional and more stringent criteria to be applied to emerging market companies. These developments could add uncertainties to our offering, business operations, share price and reputation.

Future Outlook

The company intends to use the net proceeds from this offering for strengthening brand and marketing, making investment in ESG and green environmental related projects and working capital.

Industry Context

The company operates in the environmental, social, and governance (ESG) industry, providing advisory services to clients in Hong Kong, Singapore, and potentially the US. The industry is competitive and fragmented, with increasing demand for ESG-related services due to evolving global standards and regulations.

Comparison to Industry Standards

• The document does not provide specific details to compare Roma Green Finance's results to global benchmarks.
• Without more information, it's difficult to assess Roma Green Finance's performance against industry leaders like McKinsey Sustainability, Boston Consulting Group, or ERM.
• A thorough comparison would require analyzing revenue growth, profitability, client base, and service offerings relative to these established players.

Related Party Transactions

• As of March 31, 2024, the company had accounts payable to Ranger Advisory Co. Limited (Ranger) of HKD 205,767.
• As of March 31, 2024, the company had amounts due to Mr. Cheng of $501.797 and Ms. Luk of $58.500.
• As of March 31, 2024, the company had amounts due to Ms. Luk of $1.269.266.

Stakeholder Impact

• Shareholders may experience dilution due to the issuance of new shares.
• Shareholders face risks associated with the company's operations in Hong Kong and potential regulatory changes.
• Shareholders may be affected by the company's ability to maintain its listing on the Nasdaq Capital Market.
• Employees may be affected by the company's ability to recruit and retain professionals.
• Clients may benefit from the company's comprehensive ESG and sustainability services.
• The company's success in promoting ESG and sustainability practices may have a positive impact on the environment and society.

Next Steps

• The company intends to complete one closing of this offering but may undertake one or more closings on a rolling basis.
• The company intends to use the net proceeds from this offering for strengthening brand and marketing, making investment in ESG and green environmental related projects and working capital.
• The company intends to provide its ESG / sustainability services to US-listed foreign companies located in the Asia Pacific region including but not limited to Hong Kong, Singapore, Taiwan and Malaysia with our geographic reach and our local experience with global mindset.
• The company intends to deploy more resource in expanding the market in Singapore, including hiring additional experienced and professional staff and providing relevant training to our staff in Singapore office to enable them in perusing new clients and driving growth.
• The company intends to take the sales and marketing aspects inhouse so as to reduce outsourcing costs and to enable us to compile a larger internal database for expansion.
• The company intends to establish a formal ESG academy which will offer trainings, workshops and gaming services to boost the ESG awareness of professionals and the general public (including students).

Key Dates