Exhibit
99.1
Mega
Fortune Company Limited Announces Financial Results for the First Half of Fiscal Year 2026
Mega
Fortune Company Limited (“Mega” or the “Company”) (Nasdaq: MGRT) is an offshore holding company incorporated
in the Cayman Islands with no material operations of its own. Through its Hong Kong operating entities, the Company provides a full range
of Internet of Things (“IoT”) solutions and services, including development and implementation, support and maintenance,
as well as the sale of hardware and other IoT-related products to customers in Hong Kong. The Company today announced its unaudited financial
results for the six months ended March 31, 2026 (“First Half 2026”).
First
Half of Fiscal Year 2026 Financial Results
| | |
For
the Six Months Ended March 31, | |
| | |
2026 | | |
2025 | | |
Variance | |
| | |
US$ | | |
US$ | | |
US$ | | |
% | |
| Revenues | |
| | | |
| | | |
| | | |
| | |
| - IoT Solutions services | |
| 313,174 | | |
| 2,903,798 | | |
| (2,590,624 | ) | |
| (89.2 | ) |
| - Business Process Outsourcing (“BPO”) services | |
| 33,289 | | |
| 1,277,950 | | |
| (1,244,661 | ) | |
| (97.4 | ) |
| - IoT Support and Maintenance services | |
| 156,393 | | |
| 1,155,204 | | |
| (998,811 | ) | |
| (86.5 | ) |
| - Trading income | |
| 19,315 | | |
| 34,661 | | |
| (15,346 | ) | |
| (44.3 | ) |
| Total Revenue | |
| 522,171 | | |
| 5,371,613 | | |
| (4,849,442 | ) | |
| (90.3 | ) |
| Cost of revenue | |
| (365,574 | ) | |
| (3,986,272 | ) | |
| (3,620,698 | ) | |
| (90.8 | ) |
| Gross profit | |
| 156,597 | | |
| 1,385,341 | | |
| (1,228,744 | ) | |
| (88.7 | ) |
| Selling and marketing expenses | |
| (2, 545,185) | | |
| (126,296 | ) | |
| 2, 418,889 | | |
| 1915.3 | |
| General and administrative expenses | |
| (1,093,663 | ) | |
| (219,766 | ) | |
| 873,897 | | |
| 397.6 | |
| Other income, net | |
| 99,239 | | |
| 49,041 | | |
| 50,198 | | |
| 102.4 | |
| (Loss) Income before income tax expense | |
| (3, 383,012) | | |
| 1,088,320 | | |
| (4, 471,332) | | |
| (410.8 | ) |
| Income tax expenses | |
| (28,595 | ) | |
| (175,881 | ) | |
| (147,286 | ) | |
| (83.7 | ) |
| Net (loss) income | |
| (3, 411,607) | | |
| 912,439 | | |
| (4,324,046 | ) | |
| (473.9 | ) |
Revenues
Total
revenues decreased by $4,849,442, or 90.3%, from $5,371,613 for the six months ended March 31, 2025 to $522,171 for the six months ended
March 31, 2026. This decrease in total revenues was primarily driven by a substantial decline across all of our IoT Integration Solutions
services, BPO services and IoT Support and Maintenance services.
IoT
Integration Solutions services – Revenue from IoT Integration Solutions services significantly decreased by 89.2%, from $2,903,798
for the six months ended March 31, 2025, to $313,174 for the six months ended March 31, 2026. The decline was mainly driven by the downsizing
of our scale of operations, which hinder engaging in any significant and complex projects with high contract values, along with limited
capacity of our client base for the six months ended March 31, 2026.
BPO
services – Revenue from BPO services decreased by 97.4%, from $1,277,950 for the six months ended March 31, 2025, to $33,289 for
the six months ended March 31, 2026. This contraction was driven by no new BPO customers engaged, but only one existing customer left
during the period.
IoT
Support and Maintenance services – Revenue from IoT Support and Maintenance services decreased by 86.5%, from $1,155,204 for the
six months ended March 31, 2025, to $156,393 for the six months ended March 31, 2026. The sharp decrease reflected limited capacity of
customer base and less service contract engaged, particularly for advanced technical support and large-scale maintenance to meet evolving
customer requirements.
Trading
sales – Trading sales had a decrease from $34,661 for the six months ended March 31, 2025, to $19,315 for the six months ended
March 31, 2026. In line with our strategic shift toward IoT-related services, we maintained a limited level of sales with customers.
Cost
of revenues
Cost
of revenues decreased by $3,620,698, or 90.8%, from $3,986,272 for the six months ended March 31, 2025 to $365,574 for the six months
ended March 31, 2026. The decrease was primarily attributable to the smaller scale of services provided, which required less resources
to complete projects.
Gross
profit
Our
gross profit decreased by $1,228,744, or 88.7%, from $1,385,341 for the six months ended March 31, 2025 to $156,597 for the six months
ended March 31, 2026. Our gross profit margin for the six months ended March 31, 2026 was 30.0%, compared to 25.8% for the six months
ended March 31, 2025.
The
decline in margin was mainly due to limited engineering capacity on handling and supporting project delivery. In addition, less significant
and complex projects were engaged during the period.
Operating
expenses
Selling
and marketing expenses were increased to $2,545,185 for the six months ended March 31, 2026, from $126,296 for the six months ended March
31, 2025, reflecting the expansion of our sales and business development team to support outreach and engagement with new potential customers
with expectation on revenue growth in the future.
General
and administrative expenses increased from $219,766 for the six months ended March 31, 2025, to $1,093,663 for the six months ended March
31, 2026. The increase in general and administrative expenses was mainly because we incurred a significant amount of advisory and consultancy
services in the six months ended March 31, 2026.
Other
income, net
Other
income increased by $50,198 from $49,041 for the six months ended March 31, 2025 to $99,239 for the six months ended March 31, 2026.
The increase was mainly due to an increase of $51,643 in government subsidies.
(Loss)
Income before income taxes
We
had an income before income taxes of $1,088,320 for the six months ended March 31, 2025 but loss of $3,383,012 for the six months ended
March 31, 2026. The deterioration primarily reflected revenues driven by the contraction of our business activities, as well as increased
the operating expenses including selling and marketing expenses and general and administrative expenses, resulting in a net decrease
of $4,471,332 in our income before taxes for the six months ended March 31, 2026.
Income
tax expense
Income
tax expense decreased from $175,881 for the six months ended March 31, 2025 to $28,595 for the six months ended March 31, 2026. This
decrease was primarily due to lower taxable income as a result of our business downsizing.
Net
(loss) income
As
a result of the foregoing factors, net income decreased by $4,324,046, or 473.9%, from income of $912,439 for the six months ended March
31, 2025 to loss of $3,411,607 for the six months ended March 31, 2026.
Cash
Flows
Operating
activities
Net
cash used in operating activities for the six months ended March 31, 2026 was $1,620, as compared to the net loss of $3,411,607. The
difference was primarily attributable to (i) a decrease of $2,863,751 in accounts receivable due to large portion of payment collected
from customers during the period; (ii) a decrease of $1,935,405 in prepayments and other current assets by amortisation of the expense
for business development during the period; (iii) a decrease of $290,942 in accounts payable by efficient payments to our suppliers
during the period; and (iv) a decrease of $974,085 in accrued expenses and other liabilities with settlement of accrued professional
fee for auditing our consolidated financial statements.
Net
cash provided by operating activities for the six months ended March 31, 2025 was $1,125,454, as compared to the net income of $912,439.
The difference was primarily attributable to (i) an increase of $3,123,810 in accounts receivable due to intensified sales activities
with slower payment collected from customers; (ii) an increase of $3,258,714 in accounts payable by slowing payments to our suppliers
in order to better optimize our cash flow; (iii) an increase of $140,885 in income tax payables for the provision of Hong Kong Profits
tax; and (iv) a decrease of $151,501 in accrued expenses and other liabilities with less operating expenses for the six months ended
March 31, 2025.
Investing
activities
Net
cash used in investing activities for the six months ended March 31, 2026 and 2025 were $641,026 and $nil, respectively, which entirely
represented the purchase of intangible asset.during the six months ended March 31, 2026.
Financing
activities
Net
cash used in financing activities for the six months ended March 31, 2026 was $109,538. This was primarily due to the repayment of bank
loan of $21,051 and repayment to related parties of $88,487 during the period.
Net
cash used in financing activities for the six months ended March 31, 2025 was $1,111,567. This was primarily due to repayment to related
parties of $747,841 and payment of offering costs related to initial public offering of $323,237. In addition, SME Term Loan of $40,489
was settled during the six months ended March 31, 2025.
Recent
Events
On
July 17, 2025, the Company closed its initial public offering of 3,750,000 ordinary shares, par value $0.000001 per share (the “Ordinary
Shares”). The Ordinary Shares were priced at $4.00 per share. The Ordinary Shares were previously approved for listing on The Nasdaq
Capital Market and commenced trading under the ticker symbol “MGRT” on July 16, 2025.
About Mega
Fortune Company Limited
Mega
Fortune Company Limited (the “Company”) is an Internet of Things (“IoT”) solution provider in Hong Kong.
Through its operating subsidiary QBS System Limited (“QBS System”), the Company has specialized in delivering comprehensive
IoT solutions and services across various industries. QBS System’s business service portfolio includes the provision of IoT Integration
Solution Services, IoT Maintenance and Support services, Business Process Outsourcing (“BPO”) services and trading sales.
Through its IoT platform, tools and services, QBS system helps enterprises through their digital transformation, launch IoT initiatives,
upscale an existing IoT application or integrate any IoT solution with a legacy system to help them become more innovative, effective
and productive. The Company’s vision is to become the preferred choice for IoT solutions for enterprises and projects in the Asia-Pacific region.
Forward-Looking
Statements
Certain
statements in this announcement are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended, that involve substantial risks and uncertainties. These forward-looking
statements involve known and unknown risks and uncertainties and are based on the Company’s current expectations and projections
about future events that the Company believes may affect its financial condition, results of operations, business strategy and financial
needs, including the expectation that the Offering will be successfully completed. Investors can identify these forward-looking statements
by words or phrases such as “may,” “will,” “expect,” “anticipate,” “aim,”
“estimate,” “intend,” “plan,” “believe,” “is/are likely to,” “potential,”
“continue” or other similar expressions. The Company undertakes no obligation to update or revise publicly any forward-looking
statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law.
Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you
that such expectations will turn out to be correct, and the Company cautions investors that actual results may differ materially from
the anticipated results and encourages investors to review other factors that may affect its future results. Actual results could differ
materially from those contained in any forward-looking statement as a result of various factors, including, without limitation: the Company’s
limited operating history as a public company; the Company’s dependence on a limited number of customers and concentration of revenue;
the Company’s ability to attract new customers and retain existing customers; competition in the IoT solutions industry; the Company’s
ability to manage growth effectively; general economic conditions in Hong Kong and the Asia-Pacific region; regulatory changes affecting
the IoT industry; cybersecurity risks and data privacy concerns; the Company’s ability to protect its intellectual property; foreign
currency exchange rate fluctuations; and other risks and uncertainties described in the “Risk Factors” section of the Company’s
Annual Report on Form 20-F and other filings with the Securities and Exchange Commission, which are available for review at www.sec.gov.
The Company cautions that the foregoing list of factors is not exclusive, and investors should not place undue reliance on forward-looking
statements, which speak only as of the date of this report.
For
more information, please contact:
Mega
Fortune Company Limited
Phone:
+852 5627 5338
Email:
priscilla.cheng@megafortune-group.com
MEGA
FORTUNE COMPANY LIMITED
Unaudited
Condensed Consolidated Balance Sheets
(Expressed
in U.S. Dollars, except for the number of shares)
| | |
As of | |
| | |
March
31, 2026 | | |
September
30, 2025 | |
| | |
(Unaudited) | | |
(Audited) | |
| Assets | |
| | | |
| | |
| Current Assets | |
| | | |
| | |
| Cash and cash equivalents | |
$ | 9,813 | | |
$ | 764,761 | |
| Accounts receivable, net | |
| 3,518,956 | | |
| 6,239,813 | |
| Prepayments and other assets, net | |
| 5,081,067 | | |
| 5,272,206 | |
| Amount due from immediate holding company | |
| 1,148 | | |
| - | |
| Total current assets | |
| 8,610,984 | | |
| 12,276,780 | |
| | |
| | | |
| | |
| Property and equipment, net | |
| 4,735 | | |
| 6,147 | |
| Operating lease right-of-use assets, net | |
| 46,241 | | |
| 65,606 | |
| Intangible asset | |
| 598,291 | | |
| - | |
| Prepayments and other assets, net | |
| 4,223,194 | | |
| 6,041,737 | |
| Deferred initial public offering (“IPO”) costs | |
| - | | |
| - | |
| Deferred tax assets, net | |
| 43,781 | | |
| 72,762 | |
| Total assets | |
$ | 13,527,226 | | |
$ | 18,463,032 | |
| | |
| | | |
| | |
| Liabilities and shareholders’ equity | |
| | | |
| | |
| | |
| | | |
| | |
| Liabilities | |
| | | |
| | |
| Current liabilities | |
| | | |
| | |
| Accounts payable | |
$ | 12,378 | | |
$ | 303,956 | |
| Contract liabilities | |
| - | | |
| 22,255 | |
| Bank loans, current | |
| 310,802 | | |
| 283,186 | |
| Amounts due to related parties | |
| 29,640 | | |
| 117,360 | |
| Income tax payable | |
| 547,847 | | |
| 552,008 | |
| Operating lease liabilities, current | |
| 39,440 | | |
| 38,592 | |
| Accrued expenses and other liabilities | |
| 221,448 | | |
| 1,196,942 | |
| Total current liabilities | |
| 1,161,555 | | |
| 2,514,299 | |
| | |
| | | |
| | |
| Bank loans, non-current | |
| 297,753 | | |
| 351,080 | |
| Operating lease liabilities, non-current | |
| 6,801 | | |
| 27,014 | |
| Total liabilities | |
$ | 1,466,109 | | |
$ | 2,892,393 | |
| | |
| | | |
| | |
| Commitments and contingencies | |
| | | |
| | |
| | |
| | | |
| | |
| Shareholders’ equity | |
| | | |
| | |
| Ordinary shares, $0.000001 par value, 50,000,000,000 shares authorized, 13,750,000 shares issued and outstanding as of March 31, 2026 and September 30, 2025, respectively* | |
$ | 14 | | |
$ | 14 | |
| Subscription receivables | |
| (10 | ) | |
| (10 | ) |
| Additional paid-in capital | |
| 12,311,959 | | |
| 12,311,959 | |
| (Accumulated loss) Retained earnings | |
| (275,454 | ) | |
| 3,136,153 | |
| Accumulated other comprehensive income | |
| 24,608 | | |
| 122,523 | |
| Total shareholders’ equity | |
| 12,061,117 | | |
| 15,570,639 | |
| | |
| | | |
| | |
| Total liabilities and shareholders’ equity | |
$ | 13,527,226 | | |
$ | 18,463,032 | |
*
Retrospectively restated for effect of share reorganization and share split.
MEGA
FORTUNE COMPANY LIMITED
Unaudited
Condensed Consolidated Statements of Operations and Comprehensive Income
(Expressed
in U.S. dollar, except for the number of shares)
| | |
For the Six Months Ended March 31, | |
| | |
2026 | | |
2025 | |
| | |
(Unaudited) | | |
(Unaudited) | |
| Revenues | |
$ | 522,171 | | |
$ | 5,371,613 | |
| | |
| | | |
| | |
| Cost of revenues | |
| (365,574 | ) | |
| (3,986,272 | ) |
| | |
| | | |
| | |
| Gross profit | |
| 156,597 | | |
| 1,385,341 | |
| | |
| | | |
| | |
| Operating expenses | |
| | | |
| | |
| Selling and marketing expenses | |
| (2,545,185 | ) | |
| (126,296 | ) |
| General and administrative expenses | |
| (1,093,663 | ) | |
| (219,766 | ) |
| Total operating expenses | |
| (3,638,848 | ) | |
| (346,062 | ) |
| | |
| | | |
| | |
| (Loss) Income from operations | |
| (3,482,251 | ) | |
| 1,039,279 | |
| | |
| | | |
| | |
| Other income, net | |
| | | |
| | |
| Foreign exchange transaction gain (losses) | |
| 8 | | |
| (147 | ) |
| Interest expense | |
| (4,759 | ) | |
| (7,316 | ) |
| Interest income | |
| 860 | | |
| 192 | |
| Government grants | |
| 84,045 | | |
| 32,402 | |
| Sundry income | |
| 19,085 | | |
| 23,910 | |
| Total other income, net | |
| 99,239 | | |
| 49,041 | |
| | |
| | | |
| | |
| (Loss) Income before income tax expenses | |
| (3,383,012 | ) | |
| 1,088,320 | |
| Income tax expenses | |
| (28,595 | ) | |
| (175,881 | ) |
| Net (loss) income | |
| (3,411,607 | ) | |
| 912,439 | |
| | |
| | | |
| | |
| Other comprehensive income | |
| | | |
| | |
| Foreign currency translation adjustments | |
| (97,915 | ) | |
| (6,736 | ) |
| Total comprehensive (loss) income | |
$ | (3,509,522 | ) | |
$ | 905,703 | |
| | |
| | | |
| | |
| (Loss) Earnings per share: | |
| | | |
| | |
| Basic and diluted | |
$ | (0.25 | ) | |
$ | 0.09 | |
| | |
| | | |
| | |
| Weighted average number of ordinary shares outstanding: | |
| | | |
| | |
| Ordinary shares - Basic and diluted* | |
| 13,750,000 | | |
| 10,000,000 | |
*
Retrospectively restated for effect of share reorganization and share split.
MEGA
FORTUNE COMPANY LIMITED
Unaudited
Condensed Consolidated Statements of Changes in Shareholders’ Equity
(Expressed
in U.S. dollar, except for the number of shares)
| | |
For the Six months ended March 31, 2025 | |
| | |
Ordinary shares | | |
| |
| | |
Number issued* | | |
Amount | | |
Subscription receivables | | |
Additional paid-in capital | | |
Retained earnings | | |
Accumulated other comprehensive income | | |
Total | |
Balance as of September 30, 2024 (Audited) | |
| 10,000,000 | | |
$ | 10 | | |
$ | (10 | ) | |
$ | 13 | | |
$ | 1,347,751 | | |
$ | 10,252 | | |
$ | 1,358,016 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Net income | |
| - | | |
| - | | |
| - | | |
| - | | |
| 912,439 | | |
| - | | |
| 912,439 | |
Foreign currency
translation
adjustment | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| (6,736 | ) | |
| (6,736 | ) |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Balance as of March 31, 2025 (Unaudited) | |
| 10,000,000 | | |
$ | 10 | | |
$ | (10 | ) | |
$ | 13 | | |
$ | 2,260,190 | | |
$ | 3,516 | | |
$ | 2,263,719 | |
| | |
For the Six months ended March 31, 2026 | |
| | |
Ordinary shares | | |
| |
| | |
Number issued* | | |
Amount | | |
Subscription receivables | | |
Additional paid-in capital | | |
Retained earnings | | |
Accumulated other comprehensive income | | |
Total | |
| Balance as of September 30, 2025 (Audited) | |
| 13,750,000 | | |
$ | 14 | | |
$ | (10 | ) | |
$ | 12,311,959 | | |
$ | 3,136,153 | | |
$ | 122,523 | | |
$ | 15,570,639 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Net loss | |
| - | | |
| - | | |
| - | | |
| - | | |
| (3,411,607 | ) | |
| - | | |
| (3,411,607 | ) |
Foreign currency
translation
adjustment | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| (97,915 | ) | |
| (97,915 | ) |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Balance
as of March 31, 2026 (Unaudited) | |
| 13,750,000 | | |
$ | 14 | | |
$ | (10 | ) | |
$ | 12,311,959 | | |
$ | (275,454 | ) | |
$ | 24,608 | | |
$ | 12,061,117 | |
*
Retrospectively restated for effect of share reorganization and share split.
MEGA
FORTUNE COMPANY LIMITED
Unaudited
Condensed Consolidated Statements of Cash Flows
(Expressed
in U.S. dollar)
| | |
For
the Six Months Ended March 31, | |
| | |
2026 | | |
2025 | |
| | |
(Unaudited) | | |
(Unaudited) | |
| Cash flows from operating activities: | |
| | | |
| | |
| Net (loss) income | |
$ | (3,411,607 | ) | |
$ | 912,439 | |
| Adjustments to reconcile net income to net cash (used in) provided by operating activities: | |
| | | |
| | |
| Depreciation | |
| 1,374 | | |
| 1,932 | |
| (Reversal) Provision of expected credit losses | |
| (174,633 | ) | |
| 61,076 | |
| Amortization of intangible asset | |
| 42,735 | | |
| - | |
| Amortization of operating lease right-of-use assets | |
| 18,978 | | |
| 16,975 | |
| Deferred tax expense (benefits) | |
| 28,595 | | |
| (10,387 | ) |
| | |
| | | |
| | |
| Change in operating assets and liabilities: | |
| | | |
| | |
| Accounts receivable, net | |
| 2,863,751 | | |
| (3,123,810 | ) |
| Prepayments and other assets, net | |
| 1,935,405 | | |
| 3,002 | |
| Accounts payable | |
| (290,942 | ) | |
| 3,258,714 | |
| Contract liabilities | |
| (22,213 | ) | |
| 34,068 | |
| Income tax payable | |
| - | | |
| 140,885 | |
| Operating lease liabilities | |
| (18,978 | ) | |
| (17,939 | ) |
| Accrued expenses and other liabilities | |
| (974,085 | ) | |
| (151,501 | ) |
| Net cash (used in) provided by operating activities | |
| (1,620 | ) | |
| 1,125,454 | |
| | |
| | | |
| | |
| Cash flows from investing activities: | |
| | | |
| | |
| Purchases of intangible asset | |
| (641,026 | ) | |
| - | |
| Net cash used in investing activities | |
| (641,026 | ) | |
| - | |
| | |
| | | |
| | |
| Cash flows from financing activities: | |
| | | |
| | |
| Repayments of bank loans | |
| (21,051 | ) | |
| (40,489 | ) |
| Payments of offering costs related to IPO | |
| - | | |
| (323,237 | ) |
| Advance from related parties | |
| | | |
| - | |
| Repayment to related parties | |
| (88,487 | ) | |
| (747,841 | ) |
| Net cash used in financing activities | |
| (109,538 | ) | |
| (1,111,567 | ) |
| | |
| | | |
| | |
| Net (decrease) increase in cash and cash equivalents | |
| (752,184 | ) | |
| 13,887 | |
| Effect of exchange rate changes on cash and cash equivalents | |
| (2,764 | ) | |
| (5,722 | ) |
| Cash and cash equivalents, beginning of period | |
| 764,761 | | |
| 371,918 | |
| Cash and cash equivalents, end of period | |
$ | 9,813 | | |
$ | 380,083 | |
| | |
| | | |
| | |
| Supplemental disclosures of cash flow information: | |
| | | |
| | |
| Income tax paid | |
$ | - | | |
$ | 45,383 | |
| Interest received | |
| 860 | | |
| 192 | |
| Interest paid | |
| 4,759 | | |
| 7,316 | |
| Listing fee paid | |
$ | - | | |
$ | 323,237 | |
