OFA Group (OFAL) risk factors, FY2026 10-K

Risks Related to Our Business and Industry

1. 01Our industry is highly competitive, and we may be unable to compete effectively, which could result in reduced revenue, profitability and market share
2. 02We may be adversely affected if we do not retain the continued services of our senior management and key technical personnel
3. 03Demand for our services is impacted by economic downturns, reductions in government or private spending and times of political uncertainty
4. 04Our operating history may not be indicative of our future growth or financial results, and we may not be able to sustain our historical growth rates
5. 05Our utilization of artificial intelligence and machine learning technologies may expose us to operational, legal, and financial risks that could materially impact our business operations and financial results

Risks Related to the Valuation of Noncash Consideration Received in the Form of PPDF

1. 06We may encounter difficulties expanding into new businesses or industries, which may affect adversely our results of operations and financial condition
2. 07We may pursue expansion into new businesses, industries, or service areas in which we have limited or no operating experience. These efforts may expose us to a range of risks, including unfamiliar regulatory requirements, unproven demand, operational inefficiencies, and execution challenges
3. 08Continuing inflation, rising or continued high interest rates, and/or construction costs could reduce the demand for our services as well as decrease our profit on our existing contracts, in particular with respect to our fixed-price contracts
4. 09The nature of our contracts, particularly any fixed-price contracts, subjects us to risks of cost overruns. We may experience reduced profits or losses if costs increase above budgets or estimates or the project experiences delays
5. 10Our failure to meet performance requirements or contractual schedules could adversely affect our business, financial condition and results of operations
6. 11The contracts in our backlog may be adjusted, canceled or suspended by our clients and, therefore, our backlog is not necessarily indicative of our future revenues or earnings
7. 12Our business and operating results could be adversely affected by losses under fixed-price contracts
8. 13Our services expose us to significant risks of liability and our insurance policies may not provide adequate coverage
9. 14In conducting our business, we depend on other contractors and subcontractors. If these parties fail to satisfy their obligations to us or other parties, or if we are unable to maintain these relationships, our revenue, profitability and growth prospects could be adversely affected
10. 15We depend on a few major customers with which we do not enter into long-term contracts, the loss of any of which could cause a significant decline in our revenues
11. 16Hong Kong Tramways Ltd A&A Consultancy Application Commercial 12.34 %
12. 17Systems and information technology interruption could adversely impact our operations and financial results
13. 18Cybersecurity or privacy breaches, or systems and information technology interruption or failure could adversely impact our ability to operate or expose us to significant financial losses and reputational harm
14. 19We may need additional capital but may not be able to obtain it on favorable terms or at all

Risks Related to Doing Business in Hong Kong

1. 20A downturn in the Hong Kong or global economy, or a change in economic, social and/or political conditions in Hong Kong, could materially and adversely affect our Hong Kong operating subsidiary’s business and financial condition
2. 21Our Hong Kong operating subsidiary may be subject to restrictions on paying dividends or making other payments to us, which may restrict its ability to satisfy liquidity requirements, conduct business and pay dividends to holders of our Class A Ordinary Shares
3. 22We may be negatively affected by adverse political or geopolitical developments that affects the conducting of business in Hong Kong
4. 23Changes in international trade policies, trade disputes, barriers to trade or the emergence of a trade war may dampen growth in markets where the majority of our customers reside
5. 24Fluctuations in exchange rates could result in foreign currency exchange losses to us and could impact our gross profit and gross margin
6. 25If the pegging system collapses and the value of the Hong Kong dollars against the US dollar is affected, our sales in the US or other US currency based regions may be affected
7. 26The costs of doing business in Hong Kong is high as compared to its surrounding regions
8. 27Our operating subsidiary, Office for Fine Architecture Limited, may collect and store certain data (including certain personal information) from our clients, who may be PRC individuals, in connection with our business and operations and for “Know Your Customers” purposes (to combat money laundering)
9. 28Our business concerning use of third party AI tools and our future plans concerning the development of proprietary AI tools may be materially and adversely affected by developments concerning AI regulations in Hong Kong
10. 29Failure to comply with Hong Kong Competition Law may result in material and adverse effect on our business, financial condition and results of operations
11. 30Failure to comply with PDPO may result in material and adverse effect on our business, financial condition and results of operations
12. 31Investors who buy Class A Ordinary Shares from our securityholders at different times will likely pay different prices
13. 32Sales of a substantial number of our Class A Ordinary Shares in the public market by our existing securityholders could cause the price of our ordinary share to fall
14. 33The trading market for our Class A Ordinary Shares is very new, and consistently robust and liquid trading market may not develop or be sustained over the long term
15. 34Nasdaq may apply additional and more stringent criteria for our continued listing because we plan to have a small public offering and insiders will hold a large portion of our listed securities
16. 35The conversion of our Preferred Shares may result in substantial dilution to existing shareholders, and the number of Class A Ordinary Shares issuable upon conversion may increase if the market price of our Class A Ordinary Shares declines
17. 36The trading price of our Class A Ordinary Shares may be volatile, which could result in substantial losses to investors
18. 37Any of these factors may result in large and sudden changes in the volume and price at which our Class A Ordinary Shares will trade
19. 38The future sales of Class A Ordinary Shares by existing shareholders may adversely affect the market price of our ordinary share
20. 39If securities or industry analysts do not publish research or reports about our business, or if they adversely change their recommendations regarding our Class A Ordinary Shares, the market price for our Class A Ordinary Shares and trading volume could decline
21. 40The sale or availability for sale of substantial amounts of our Class A Ordinary Shares could adversely affect their market price
22. 41We do not expect to pay any cash dividends in the foreseeable future. Therefore, you should not rely on an investment in our Class A Ordinary Shares as a source for any future dividend income
23. 42You must rely on the judgment of our management as to the use of the net proceeds from future financings, and such use may not produce income or increase our share price
24. 43If we are classified as a passive foreign investment company, United States taxpayers who own our Class A Ordinary Shares may have adverse United States federal income tax consequences
25. 44Passive income generally includes dividends, interest, rents, royalties (other than rents or royalties derived from the active conduct of a trade or business) and gains from the disposition of passive assets
26. 45We may issue additional Ordinary Shares or preference shares in the future. Any such issuances would dilute the interest of our shareholders and likely present other risks
27. 46The Second M&A that we adopted contain anti-takeover provisions and the Class B Ordinary Shares we issued have anti-takeover effects that could have a material adverse effect on the rights of holders of our Class A Ordinary Shares
28. 47We are a “controlled company” within the meaning of the Nasdaq Stock Market Rules and, as a result, may rely on exemptions from certain corporate governance requirements that provide protection to shareholders of other companies
29. 48You 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
30. 49You may be unable to present proposals before annual general meetings or extraordinary general meetings not called by shareholders
31. 50Certain judgments obtained against us by our shareholders may not be enforceable
32. 51We are an emerging growth company within the meaning of the Securities Act and may take advantage of certain reduced reporting requirements
33. 52We incur significantly increased costs and devote substantial management time as a result of the listing of our Class A Ordinary Shares
34. 53Nasdaq may delist our securities from trading on its exchange, which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions
35. 54Pursuant to Nasdaq Listing Rule 5810(c)(3)(A), the Company had until the Compliance Period, to regain compliance with Nasdaq’s minimum bid price requirement

Risks Related to Our Cryptocurrency Treasure Strategy

1. 55We may use the net proceeds from any future offering to purchase cryptocurrency, the price of which has been, and will likely continue to be, highly volatile
2. 56We may use the net proceeds from any future offering to purchase and hold Bitcoin (BTC), Solana (SOL), and potentially other digital assets. Each of these assets carries distinct risks that could materially and adversely affect the value of our treasury and the market price of our Class A Ordinary Shares
3. 57Our multi-asset cryptocurrency strategy may also increase correlation risks among our holdings, particularly in market downturns, which could amplify overall volatility
4. 58In addition, while the current administration has expressed support regarding the development and use of digital assets as the industry has anticipated, the specific regulatory frameworks are still to be developed
5. 59Regulatory change reclassifying bitcoin as a security could lead to our classification as an “investment company” under the Investment Company Act of 1940, as amended, or the 1940 Act, and could adversely affect the market price of bitcoin and the market price of our Class A Ordinary Shares
6. 60We may be subject to regulatory developments related to crypto assets and crypto asset markets, which could adversely affect our business, financial condition, and results of operations
7. 61Our ability to execute our business plan depends on the successful development, deployment, and commercialization of blockchain-based infrastructure that supports the tokenization of real-world assets, on-chain trading systems, and treasury management, which may not materialize as expected
8. 62Changes in laws and regulations, including increased regulation of blockchain technologies and digital assets, may adversely affect our business, product development, and compliance obligations
9. 63Our ability to build and scale a community of clients and investor end-users for blockchain-enabled financial services and products is uncertain and depends on successful market adoption, product development, and execution of our business strategy
10. 64There are risks associated with the Solana network, SOL token and the blockchain sector
11. 65Our Solana digital asset staking strategy is subject to unique and substantial risks related to the Solana network’s technology, governance, and ecosystem, which could result in a complete or partial loss of our investment
12. 66A cyberattack or other malicious attack on the Solana blockchain could have a material impact on the value of SOL held by the Company
13. 67Covered Call Option Writing Risk