Leader Capital Holdings Corp.

What they do

Leader Capital Holdings Corp. conducts operations through its wholly owned subsidiaries, Leader Financial Group Limited (LFGL) and JFB Internet Service Limited (JFB). Through LFGL, it acts as the service provider for a mobile application investment platform owned by JFB, which connects investors with financial service providers. It also developed the FinMaster App, a mobile application offering real-time Taiwan stock market quotes, AI stock selection tools, and social media features. The company acquired Nice Products Inc. (NPI) in August 2020, which developed the FinMaster App, but later ceased the operation of NPI's subsidiary LOC in 2023 due to continued losses.

Revenue drivers

• FinMaster App — A mobile application with over 350,000 downloads as of the 10-K, offering real-time Taiwan stock market quotes, AI stock selection tools, and other features; revenue is generated from the app though specific monetization methods are not detailed in the excerpts.
• Investment platform for financial service providers — A customizable mobile application platform owned by JFB that connects investors with financial service providers; historically licensed to a third party until December 31, 2020, for a fee, but that agreement was terminated and no new licensing revenue is reported.
• Customized app contracts — Through LOC and BJDC, the company intended to conclude customized app contracts to help clients develop apps; however, LOC ceased operations in 2023, and no current revenue from these contracts is disclosed.

Recent performance

For the nine months ended May 31, 2023, the company generated revenue of $364,182, compared to $156,527 for the same period in 2022. The net loss was principally attributed to general and administrative expenses. As of May 31, 2023, the company had an accumulated deficit of $37,101,862, a working capital deficit of $2,525,159, and a shareholders' deficit of $2,671,199. Recent quarterly revenue declined from $254,540 in the quarter ended November 30, 2022, to $93,921 in the quarter ended February 28, 2023, and further to $15,721 in the quarter ended May 31, 2023. Total assets were $284,838, total liabilities were $3.0 million, and cash and equivalents were $162,802 as of May 31, 2023.

Strategy

The company continues to enhance the FinMaster App and fine-tune its R&D plans based on user feedback and data collected from over 350,000 downloads. It ceased the operation of LOC to cut losses, with LOC's business taken over by LCHD. Management expects to finance operations through profit-generating activities and/or obtaining necessary financing. The company may also pursue customized app contracts through its subsidiaries to help clients develop apps, though no specific contracts are mentioned in the excerpts.

Risks

• Going concern — As of May 31, 2023, the company had an accumulated deficit of $37,101,862 and a shareholders' deficit of $2,671,199, raising substantial doubt about its ability to continue as a going concern.
• COVID-19 impact — Border controls and travel restrictions in Taiwan and Hong Kong have adversely affected and are expected to continue to adversely affect the rollout of business plans and results of operations.
• PRC government intervention — The PRC government may intervene in or influence operations at any time, which could result in a material change in operations and significantly and adversely impact the value of common stock.
• Dependence on FinMaster App — The company's revenue is heavily dependent on the FinMaster App, which operates in a competitive market and may not achieve sufficient monetization to sustain operations.

Outlook

Management expects to continue developing the FinMaster App and may pursue financing to meet obligations, as the company has suffered recurring losses and has a going concern uncertainty. The company's ability to continue as a going concern is dependent on profit-generating operations or obtaining necessary financing. No specific revenue or earnings guidance is provided in the excerpts.