TOP FINANCIAL GROUP LIMITED

Red flags

• Management concluded disclosure controls were ineffective as of March 31, 2026 because of a material weakness in U.S. GAAP/SEC reporting personnel and a separate CECL process weakness.
• US$11.8 million of cash exceeded applicable government-insurance limits and was uninsured as of March 31, 2026.
• Two customers represented 18% and 14% of fiscal 2026 revenue; the top five represented 47%, versus 49% in fiscal 2025.
• Two brokers accounted for 88% and 8% of commission expenses in fiscal 2026, creating substantial unidentified counterparty concentration.
• Loans receivable totaled US$11.2 million before allowances, while customer stock receivables carried a US$0.5 million allowance; fiscal 2026 included a US$0.2 million allowance on loans receivable.
• The company issued 214.4 million units in the private placement, each with one share and two warrants, compared with 27.1 million Class A shares outstanding at March 31, 2026; it also approved a possible 1-for-2 to 1-for-20 share consolidation.
• The acquisition of Zhong Yang Financial Services was a related-party transaction: relatives of the Chairwoman and CFO owned 79.8% of the target seller, although the purchase price was only HKD500,000.
• Junli Yang's 97% voting control can unilaterally determine director elections, mergers, amendments, and other significant corporate actions.