{"url_path":"/sec/tjgc/10-k/2026/item-5","section_key":"item-5","section_title":"Item 5 OPERATING AND FINANCIAL REVIEW AND PROSPECTS**","topic":"sec","document":{"doc_type":"20-F","doc_date":"2026-07-22","source_url":"https://www.sec.gov/Archives/edgar/data/1969928/0001185185-26-003078-index.html","accession_number":"0001185185-26-003078","cik":"0001969928","ticker":"TJGC","issuer_name":"TJGC GROUP Ltd","edgar_url":"https://www.sec.gov/Archives/edgar/data/1969928/0001185185-26-003078-index.html","primary_entity_key":"0001969928","primary_entity_name":"TJGC GROUP Ltd"},"word_count":7006,"has_tables":true,"body_markdown":"**ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS**\n\n \n\n*The following discussion and analysis of our financial condition\nand results of operations should be read in conjunction with our consolidated financial statements and the related notes included elsewhere\nin this Annual Report. This discussion contains forward-looking statements reflecting our current expectations that involve risks and\nuncertainties. See “Disclosure Regarding Forward-Looking Statements” for a discussion of the uncertainties, risks and assumptions\nassociated with these statements. Actual results and the timing of events could differ materially from those discussed in our forward-looking\nstatements as a result of many factors, including those set forth under “Item 3. KEY INFORMATION — D. Risk Factors”\nand elsewhere in this Annual Report.*\n\n \n\n**A. Operating Results**\n\n \n\n**Overview**\n\n \n\nTJGC Group Limited (“TJGC Group”) is a limited liability\ncompany established under the laws of the British Virgin Islands on May 13, 2022. We are an integrated marketing and advertising\nservices provider in Hong Kong specializing in mobile games promotion for the local market. We provide services to mobile game developers,\nprincipally developers of mobile gaming applications or “apps” that gamers download from the developers’ websites and\napplicable mobile operating systems, such as Apple Store or Android Google Play Store. The market for specialized mobile game advertising\nin Hong Kong is occupied by a few market players who compete with one another. Based on our knowledge and understanding of our market\nposition, we consider ourselves a major player in the industry with a significant market share. Our prominent market share and proven\ntrack record are indicative of our audience reach and engagement, as well as our relevance to advertisers in our local markets.\n\n \n\n**Recent Developments**\n\n \n\n*April 2026 Registered Direct Offering*\n\n \n\nOn April 15, 2026, the Company entered into securities purchase\nagreements with certain investors to issue and sell 15,000,000 no-par value ordinary shares in a best-efforts offering at a price of US$0.40\nper share, generating aggregate gross proceeds of US$6,000,000. The offering was conducted under the Form F-1 registration statement (File\nNo. 333-294243), which was declared effective by the SEC on the same date.\n\n \n\nThe Nasdaq closing price of our ordinary shares on April 14, 2026\nwas US$0.9399. This offering has no minimum share volume or gross proceeds requirement for closing. Eddid Securities USA Inc. served as\nthe exclusive placement agent. Neither party established an escrow or trust account for investor funds, as the placement agent did not\ntake possession of investor proceeds. The placement agent had no obligation to purchase the offered shares or secure a fixed transaction\nsize.\n\n \n\nAs consideration for its services, the Company paid the placement\nagent a cash fee equal to 4% of the gross proceeds, or US$240,000, together with other customary compensation. The offering closed on\nApril 16, 2026. Our ordinary shares are listed on the Nasdaq Capital Market under the ticker symbol “TJGC”.\n\n \n\n*Share Consolidation in May 2026*\n\n \n\nOn May 6, 2026, the Board of Directors adopted a written resolution\nto approve a share consolidation. Pursuant to the resolution, every three (3) issued no-par ordinary shares of the Company will be combined\ninto one (1) no-par Ordinary Share (the “Share Consolidation”). No fractional shares will be issued; any fractional entitlement\nresulting from the consolidation will be rounded up to the nearest whole share. As a result, the Company’s issued Ordinary Shares\nwill be reduced from 30,300,000 shares to 10,100,000 shares. After rounding up, the final number of issued Ordinary Shares became 10,100,023\nshares, each carrying the rights and restrictions set forth in the memorandum and articles of association filed on November 11, 2025.\nThe Share Consolidation was effective on May 26, 2026. The Share Consolidation was reflected with the Nasdaq Capital Market and in the\nmarketplace at the opening of business on May 26, 2026.\n\n \n\n**Key factors that affect operating results**\n\n \n\nOur results of operations have been and will continue to\nbe affected by a number of factors, including those set out below:\n\n \n\n**Growth and infrastructure development of the mobile gaming\necosystem**\n\n \n\nOur business and results of operations will be impacted by industry\nfactors that drive the overall performance of the mobile gaming ecosystem. The mobile gaming ecosystem has grown rapidly in recent years\nwith technological advancement alongside an increase in the number and variety of mobile apps befitting for gaming application. We expect\nthat the acceleration, or, conversely, decline of this remarkable growth would continue to affect our business and the results of operations.\nIn addition, even if the mobile app ecosystem continues to grow at its current rate, our ability to position ourselves within the market\nwill impact our business and results of operations.\n\n \n\nLarge third-party internet platforms such as YouTube, Apple\nApp Store and Google Play Store, among others, predominate the distribution of online mobile games. Likewise, advertising agents target\nusers of mobile games by launching advertising campaigns in third-party media platforms, such as social media websites. We expect\nthis trend to continue for the foreseeable future. Some of these third-party platforms have significant market power and discretion\nto set platform fees and constraints over the dissemination of permissible content over their domains. All of these platform fees and\nconstraints affect mobile game developers’ operations and profitability, and in turn, could have repercussions on their advertising\nspendings with us. In addition, the imposition by these third-party platforms of constraints over permissible content could affect\nour ability to target users with personalized advertising materials and allocate marketing campaigns in an efficient and cost-effective manner.\nSignificant changes to the policies of these third-party platforms could drive rapid change across the mobile gaming ecosystem. Further,\nnew tools for gaming developers, industry standards, and platforms may also emerge in the future.\n\n \n\nWe have made, and expect to continue to make, considerable investments\nof management resources in responding to emerging technologies, especially those pertaining to advancement in internet digital technologies\nand mobile app utilization, in order to respond to rapid technological changes with the mobile gaming ecosystem. These include the deployment\nof our internal and financial resources, including our management’s time and effort, to explore the technological infrastructure\nand evaluate its suitability for application in our business models.\n\n \n\nWe may also need to partner with new media platforms and incur\nfurther expense outlays such as the hiring of additional staff workforce or consultants of technical expertise to harness the application\nof new technologies. While our investments in innovations may not result in revenue in the near term, we believe these investments have\nallowed us to adapt our business model to emerging trends and enable us to maintain competitiveness in the changing marketplace.\n\n \n\n43\n\n[Table of Contents](#toc)\n\n \n\n**New developments in PRC laws and regulations regarding the\npublic use of mobile games in the country**\n\n \n\nWe have benefited in the past from the tightening of the rules\nand regulations in the PRC concerning the public’s use of mobile games in the country. As the mobile gaming developers and operators\nin the PRC sought after alternative revenue channels through the new launching of mobile games in our local market in Hong Kong,\nthey require corresponding advertising services for their marketing campaigns and, we believe, afforded us promising opportunities to\ngrow our client portfolio.\n\n \n\nThere are significant uncertainties regarding the future direction\nthat new developments in PRC legislation regarding the use of mobile games may assume. These legislative developments, if materialized,\nare beyond our control and could turn out to be either advantageous or detrimental to our future business prospects. Some of the mobile\ngaming developers responding to these changes may decide to seek alternative revenue channels by opening up overseas markets outside of\nour local market and allocate their advertising budget to these regions, thus reducing their spending with us. Our ability to navigate\nthese changes and grow our business over time depends on our being able to capture new opportunities and respond to challenges arising\nfrom these new developments in a timely and adequate manner.\n\n \n\nOur local market in Hong Kong will continue to have overriding\nsignificance for our business. At the same time, we serve to reduce our heavy reliance on our local market by diversifying our business\nto specific East Asian countries.\n\n \n\n**Manage our pricing for advertising services and profit margin**\n\n \n\nThe margin of our advertising services is derived from the service\nfees we charged our clients less the cost of services incurred, which included, importantly, the fees we paid to media publishers for\naccessing advertising traffic over their platforms and procurement of advertising inventories. Each of these factors varies according\nto the market conditions.\n\n \n\nWe formulate the pricing for our advertising services based on\nan equitable mark-up on our estimated cost to execute the advertising campaign, having regard to the results of price negotiation\nwith our clients, prevailing market trends and industry information available to us. We determine our service fee on a case-by-case basis,\ntaking into account many factors including: the nature of advertising services required; the scale and complexity of the advertising campaign\nand the timeframe involved; the specific media channels for deploying the advertisement placement and the associated advertising traffic\ncosts.\n\n \n\nWhile we have begun to establish our market niche with mobile\ngaming advertising in our local market, the competition within the advertising industry is intense. We not only face direct competition\nfrom other advertising agencies, but also competition from other conventional marketing channels in the marketplace that could potentially\nreplace us. Intensified competition from existing and new entrants into the market aspiring to capture market share could result in price\ncutting, which could erode our profit margin and profitability.\n\n \n\nWe strive to maintain our competitiveness and market position\nby providing a comprehensive range of advertising solutions, outstanding quality of customer services, and complementary value-added solution\npackages. To maintain our profit margin, we must continue to deploy management and financial resources to maintain our competitive advantage\nand consolidate our market position.\n\n \n\n**Solicit and retain clients from new business ventures**\n\n \n\nWe also see business opportunities outside of our traditional\nbusiness in advertising and we intend to expand our business downstream by entering into the acquisition of operation rights with upcoming\nmobile games in the local Hong Kong market. To successfully harness these new business ventures, we must navigate the competitive\nand fast-moving mobile gaming market environment in a proactive manner to adequately assess their profiles and stay competitive.\n\n \n\nOn March 7, 2025, we entered into a Game Development Agreement with\na game development company to develop a mobile games platform, which amounted to US$2.1 million. Subsequently, on January 30, 2026, the\nparties entered into a supplemental agreement, pursuant to which they mutually agreed to reduce the total contract consideration under\nthe Game Development Agreement to approximately US$1.9 million. In addition, on June 13, 2025, CTRL Games entered into an agreement with\nQMO Digital Co., Ltd, another vendor, for the development of a game membership platform webpage and a software development kit (SDK) with\none-year technical maintenance and support. The aggregate contract value under the agreement is approximately US$500,000. The Game Development\nAgreement is attached as an exhibit to this Annual Report.\n\n \n\nWe hope to become a mobile game operator after the game is successfully\ndeveloped. However, there is no guarantee that the company will develop a game which works and/or is successful. During the year ended\nMarch 31, 2026, the Company recognized an impairment loss of HK$4,312,000 (US$550,000) on games development costs. As of March 31, 2026,\nthe development of the mobile games platform remains in progress, and we anticipate officially launching the platform and related games\nto the public during the year ending March 31, 2027.\n\n \n\n44\n\n[Table of Contents](#toc)\n\n \n\nOur founders, some of whom are also our executive directors, have\nprior work experience in the mobile gaming industry, and have accumulated extensive industry knowledge and in-depth understanding\nof the mobile gaming market, we believe we are well-positioned to harness these new business ventures. As we seek further scale by downstream\nexpansion, the necessary investments in management and financial resources could impact our profitability in the near term. We believe\nthis additional business ventures nevertheless will open broader revenue channels by enabling us to become the direct market player in\nthe mobile gaming industry. However, we cannot ensure you that we will be successful in developing these new business opportunities. See\n\n \n\n“Risks Related to Our Business and Industry” on page\n5 for more information.\n\n \n\n**We hope to continue obtaining favorable commercial terms\nof service from our media publishers**\n\n \n\nOur business viability and future growth will depend on our ability\nto maintain long-term cooperative relationships with media publishers to procure suitable advertisement inventories at competitive\npricing terms for placing advertisements on behalf of our clients.\n\n \n\nOur relationships with the media publishers are mainly governed\nby contractual agency agreements which provide for, among other things, the pricing for advertisement inventories and credit periods offered\nto us. These agency agreements typically have a term of one year and are subject to renewal upon expiry. The commercial terms under the\nagency agreements are subject to renegotiation when they are renewed. Our contracts with media publishers usually provide that they retain\nthe right to terminate our authorized agency relationship at their discretion.\n\n \n\nIf a media publisher terminates its cooperative relationship with\nus or we fail to negotiate service terms that are favorable to us, we may lose access to the relevant advertising channels and sustain\nadvertisers’ deflection, as a result, our revenue, results of operations and financial condition may be adversely affected.\n\n \n\nIn addition, the pricing discounts we obtain from media publishers\ndepend in part on the bulk volume of transactions we laid down for them. If our business declines and we are not able to obtain the current\nlevel of pricing discounts, we may need to pass on the price escalation to our clients as less competitive advertising packages or our\nprofitability will be affected.\n\n \n\nWe believe we have established business relationships with a wide\nnetwork of local media publishers covering various media channels, which mitigate our exposure to the termination of business relationships\nwith one or more media publishers. We also intend to enter into strategic acquisitions of media publishers in the local market for upstream\nintegration, which will provide us further control over the media publishing operation at our disposal. However, we do not have definitive\nagreements or commitments for any material acquisitions at this time. We believe the investment and operation of these new acquisitions\nwill add operating overheads for ourselves, which may impact our profitability.\n\n \n\n**Enter into exhibition business with exhibition partner**\n\n \n\nWe have identified an opportunity to leverage its core competencies\nand utilize currently idle resources to enter the lucrative live events market. The primary benefits include establishing a new revenue\nstream, enhancing brand visibility, cross-promoting our core mobile game and anime products, and capturing a new market segment by utilizing\nexisting expertise. After careful evaluation, management concludes that the potential benefits substantially outweigh the associated costs\nand risks and enter into the new business ventures.\n\n \n\nOn February 14, 2025, our wholly-owned subsidiary, CTRL Solutions,\nentered into four (4) cooperative agreements with the same exhibition service provider and one Exhibition Events Joint Investment Agreement\nwith respect to holding the event (collectively, the “Cooperative Agreements”). The total value of the four (4) Cooperative\nAgreements is approximately HK$ 15.3 million (US$2.7 million), and the value of the event is approximately HK$6.3 million (US$0.8 million).\nThe exhibition partner is scheduled to coordinate and organize five exhibitions in the year ending March 31, 2026. All five exhibitions\nwere completed during the year ended March 31, 2026 and the Company currently has no plans to hold further exhibitions. Collaborating\nwith the exhibition partner offers several key advantages. First, the partner has extensive expertise and experience, ensuring optimal\nplanning and execution of the event. They also have a vast network of suppliers and partners, allowing for the efficient integration of\nnecessary resources such as venues, equipment, and design services.\n\n \n\n45\n\n[Table of Contents](#toc)\n\n \n\nAdditionally, professional firms bring creative design solutions\nthat capture audience attention and enhance brand image. Their project management skills help streamline the entire process, from scheduling\nto budget control, reducing the stress on organizers. Furthermore, we believe this exhibition partners often have marketing capabilities\nthat can attract more visitors and media coverage, ultimately maximizing the impact of the exhibition.\n\n \n\nThis opportunity also involves risks that we may not be successful\nin holding these exhibitions and that such exhibitions will not be profitable. See “*Risks Related to Our Business and Industry\n- We may not be successful in holding exhibition or event*” for more information.\n\n \n\n**Exploration of emerging technologies**\n\n** **\n\nWe have begun to explore the use of AI technologies in internal\nworkflows. These exploratory initiatives are intended to enhance operational efficiency over time. As of the date of this Annual Report,\nsuch efforts remain at an early stage and are not expected to have a material impact on our results of operations in the near term.\n\n \n\n**Comparison of Fiscal Years Ended March 31, 2026 and 2025**\n\n \n\nThe following table sets forth key components of our results of\noperations for the fiscal years ended March 31, 2026 and 2025:\n\n \n\n  \nFor the years ended March 31,  \n% **of** \n\n  \n2025  \n2026  \n2026  \nVariance  \nvariance \n\n  \nHK$  \nHK$  \nUS$  \nHK$  \n  \n\nRevenue \n 30,472,131  \n 28,717,563  \n 3,662,954  \n (1,754,568) \n (5.8)%\n\nCost of services \n (23,885,710) \n (22,532,501) \n (2,874,043) \n 1,353,209  \n (5.7)%\n\nGross Profit \n 6,586,421  \n 6,185,062  \n 788,911  \n (401,359) \n (6.1)%\n\n  \n    \n    \n    \n    \n   \n\nOperating Expenses \n    \n    \n    \n    \n   \n\nGeneral and Administrative expense \n (22,351,548) \n (27,377,958) \n (3,492,086) \n (5,026,410) \n 22.5%\n\nImpairment loss on games development costs \n —  \n (4,312,000) \n (550,000) \n (4,312,000) \n 100.0%\n\nImpairment loss of prepayment \n (10,593,902) \n —  \n —  \n 10,593,902  \n (100.0)%\n\nReversal of impairment loss on prepayment \n —  \n 3,083,924  \n 393,358  \n 3,083,924  \n 100.0%\n\nLoss from operation \n (26,359,029) \n (22,420,972) \n (2,859,817) \n 3,938,057  \n (14.9)%\n\nOther income (expenses) \n    \n    \n    \n    \n   \n\nOther income, net \n 17,779  \n 414,229  \n 52,835  \n 396,450  \n 2229.9%\n\nOther gain (loss) \n 53,200  \n (566,243) \n (72,225) \n (619,443) \n (1164.4)%\n\nInterest expense \n (294,642) \n (675,671) \n (86,183) \n (381,029) \n 129.3%\n\nTotal other income (expenses), net \n (223,663) \n (827,685) \n (105,573) \n (604,022) \n 270.1%\n\nLoss before tax \n (26,582,692) \n (23,248,657) \n (2,965,390) \n 3,334,035  \n (12.5)%\n\nIncome tax \n (253,734) \n (255,420) \n (32,579) \n (1,686) \n 0.7%\n\nNet loss \n (26,836,426) \n (23,504,077) \n (2,997,969) \n 3,332,349  \n (12.4)%\n\nOther comprehensive (loss) income \n (16,276) \n 10,108  \n 1,289  \n 26,384  \n (162.1)%\n\nTotal comprehensive loss \n (26,852,702) \n (23,493,969) \n (2,996,680) \n 3,358,733  \n (12.5)%\n\n \n\n46\n\n[Table of Contents](#toc)\n\n \n\n**Revenue** \n\n \n\nThe following table sets forth the breakdown of our revenue by\nmajor revenue type for the years ended March 31, 2026 and 2025, respectively:\n\n \n\n  \nFor the years ended March 31,  \n% **of** \n\n  \n2025  \n2026  \n2026  \nVariance  \nvariance \n\n  \nHK$  \nHK$  \nUS$  \nHK$  \n  \n\nOnline advertising \n 10,728,665  \n 10,862,227  \n 1,385,488  \n 133,562  \n 1.2%\n\nOffline advertising and web banner marketing \n 17,966,617  \n 14,289,326  \n 1,822,618  \n (3,677,291) \n (20.5)%\n\nProvisioning of strategic planning services \n 369,124  \n 418,331  \n 53,359  \n 49,207  \n 13.3%\n\nOther services \n 1,407,725  \n 3,147,679  \n 401,489  \n 1,739,954  \n 123.6%\n\nTotal revenue \n 30,472,131  \n 28,717,563  \n 3,662,954  \n (1,754,568) \n (5.8)%\n\n \n\nOur revenue decreased by approximately HK$1.8 million, or\napproximately 5.8%, to approximately HK$28.7 million for the year ended March 31, 2026, compared to the year ended March 31,\n2025, mainly due to the decrease in revenue from offline and web banner marketing which outweighed the increase in revenue from the provision\nof strategic planning services.\n\n \n\nOf these, revenue from online advertising slightly increased by\napproximately HK$0.1 million, while offline advertising delivered by approximately HK$3.7 million for the year ended March 31, 2026, mainly\ndue to the economy downturns. Our clients decreased their marketing budget on large-scale advertising and generally shifted their budget\nto one-off offline events. As a result, the offline advertising revenue decreased by approximately 20.5%.\n\n \n\nThe provision of strategic planning services recorded an increase\nin revenue of approximately 13.3% during the year ended March 31, 2026, primarily because of the increase in one-off localization projects.\n\n \n\nOur other services increased by approximately HK$1.7 million or\napproximately 123.6% to approximately HK$1.7 million, mainly due to the increase in the revenue of a profit sharing on the crossover collaboration\nproducts.\n\n \n\n**Cost of services**\n\n \n\nThe following table sets forth the breakdown of cost of services\nfor the years ended March 31, 2026 and 2025, respectively:\n\n \n\n  \nFor the years ended March 31,  \n%** of** \n\n  \n2025  \n2026  \n2026  \nVariance  \nvariance \n\n  \nHK$  \nHK$  \nUS$  \nHK$  \n  \n\nOnline advertising fee \n 6,398,096  \n 6,930,926  \n 884,047  \n 532,830  \n 8.3%\n\nOffline advertising fee \n 12,846,555  \n 9,236,788  \n 1,178,162  \n (3,609,767) \n (28.1)%\n\nStaff cost \n 3,509,297  \n 3,774,592  \n 481,453  \n 265,295  \n 7.6%\n\nOthers \n 1,131,762  \n 2,590,195  \n 330,381  \n 1,458,433  \n 128.9%\n\nTotal Cost of services \n 23,885,710  \n 22,532,501  \n 2,874,043  \n (1,353,209) \n (5.7)%\n\n \n\nCost of services decreased by approximately HK$1.4 million\nor approximately 5.7% to approximately HK$22.5 million for the year ended March 31, 2026, compared to the year ended March 31,\n2025. The decrease in the cost of services was generally in line with our reduced total revenue derived during the year.\n\n \n\n47\n\n[Table of Contents](#toc)\n\n \n\n*Online advertising fee*\n\n \n\nOnline advertising fee includes payments to media publishers\nand operators of websites, social media platforms and search engines for the procurement of advertising inventories, as well as the media\npromotion fees and patronage paid to YouTubers, KOL, hard-core gamers and local celebrities to film introductory gaming videos for\nbroadcast in their personal blogs and social media platforms. Online advertising fees increased by approximately HK$0.5 million or\napproximately 8.3% to approximately HK$6.9 million for the year ended March 31, 2026, compared to the year ended March 31,\n2025. This increase corresponded with the growth in online advertising revenue.\n\n* *\n\n*Offline advertising fee*\n\n \n\nOffline advertising fees principally includes payments to the\nowners or operators of the physical medium for the leased use of premises to broadcast advertising content. As discussed, with a generally\nreduced demand for the large scale of the large-scale advertising, our offline advertising fee was decreased by approximately HK$3.6 million\nor 28.1% compared to the year ended March 31, 2025. The Company’s offline advertising services primarily comprises outdoor channels,\nsuch as large-format LED billboards on buildings and advertisements on subway platforms. As these forms of advertising involve relatively\nhigh costs, the decrease in offline advertising fee has outpaced the decline in revenue.\n\n* *\n\n*Others*\n\n \n\nOthers mainly represent miscellaneous expenses related to the\nproduction of advertisements or videos, media boosting costs and other expenses incurred from the Company’s other services.\n\n \n\nOther costs increased by approximately HK$1.5 million, or\n128.9% to approximately HK$2.6 million, for the year ended March 31, 2026, compared to the year ended March 31, 2025. This\nincrease was primarily due to the costs associated with crossover collaboration products.\n\n** **\n\n**Gross profit**\n\n \n\n  \nFor the years ended March 31,  \n% of \n\n  \n2025  \n2026  \n2026  \nVariance  \nvariance \n\n  \nHK$  \nHK$  \nUS$  \nHK$  \n  \n\nGross profit \n 6,586,421  \n 6,185,062  \n 788,911  \n (401,359) \n (6.1)%\n\nGross profit margin \n 21.6% \n 21.5% \n 21.5% \n    \n   \n\n \n\nGross profit margin decreased slightly from 21.6% for the year\nended March 31, 2025, to 21.5% for the year ended March 31, 2026. The decrease in gross profit margin was primarily attributable to the\nreduction in gross profit margin from online advertising, which was partially offset by an improvement in gross profit margin from offline\nadvertising segment.\n\n \n\n48\n\n[Table of Contents](#toc)\n\n** **\n\n**Operating Expenses**\n\n* *\n\n*General and administrative expense*\n\n \n\nOur general and administrative expenses mainly represented the\nstaff costs, depreciation expenses of property and equipment, legal and professional fees and impairment loss. Our operation expenses\nincreased by HK$5.0 million, or 22.5%, from HK$22.4 million for the year ended March 31, 2025 to HK$27.4 million for the year ended March\n31, 2026, due to increase in total staff cost and professional fee of HK$5.9 million for the year ended March 31, 2026. Such increase\nmainly due to hiring additional staff and adviser for our compliance as public company and expansion.\n\n* *\n\n*Impairment loss of prepayment and reversal of impairment loss\non prepayment*\n\n \n\nOur impairment loss and subsequent reversals on prepayment related\nto advance payments made for exhibition services. During the year ended March 31, 2025, our subsidiary, CTRL Solutions, entered into four\ncooperative investment agreements with an exhibition service provider. The total value of these agreements amounts to approximately HK$15,3\nmillion for exhibitions scheduled to be held during the year ended March 31, 2026. Based on a review of previously held exhibitions, management\nanticipated that the four exhibitions would result in a net loss. Consequently, we recorded an impairment loss on the related prepayments\nof approximately HK$10.6 million for the year ended March 31, 2025. Upon completion of all four exhibitions during the year ended March\n31, 2026, and based on their actual financial results, we recorded a reversal of the previously recognized\nimpairment loss in the amount of approximately HK$3.1 million.\n\n** **\n\n*Impairment loss on games development costs*\n\n \n\nDuring the year ended March 31, 2026, our subsidiary, CTRL Games, entered\ninto agreements with third-party developers for an aggregate consideration of US$2.1 million to develop a mobile games platform and related\ngame software, which are anticipated to launch during the fiscal year ending March 31, 2027. As of March 31, 2026, we performed a recoverability\nassessment of the associated prepaid development costs. Following an analysis of the projected future cash flows for the platform and\nrelated game software, we determined that the carrying amount of these prepayments exceeded their estimated fair value. Consequently,\nwe recognized an impairment loss of approximately HK$4.3 million for the year ended March 31, 2026.\n\n \n\n**Other income, net**\n\n \n\n  \nFor the years ended March 31,  \n% of \n\n  \n2025  \n2026  \n2026  \nVariance  \nvariance \n\n  \nHK$  \nHK$  \nUS$  \nHK$  \n  \n\nOther income, net \n 17,779  \n 414,229  \n 52,835  \n 396,450  \n 2229.9%\n\n \n\nOther income, net, increased to approximately HK$0.4 million for\nthe year ended March 31, 2026, compared to approximately HK$18,000 for the year ended March 31, 2025. The increase was primarily attributable\nto a reversal of accounts receivable allowance of approximately HK$0.26 million and a reversal of accrued expenses of approximately HK$0.13\nmillion recognized during the current year, neither of which occurred in the prior year. The remainder of the balance primarily consisted\nof a slight year-over-year increase in net bank interest income.\n\n \n\n49\n\n[Table of Contents](#toc)\n\n** **\n\n**Other gain (loss)**\n\n** **\n\n  \nFor the years ended March 31,  \n% of \n\n  \n2025  \n2026  \n2026  \nVariance  \nvariance \n\n  \nHK$  \nHK$  \nUS$  \nHK$  \n  \n\nOther gain (loss) \n 53,200  \n (566,243) \n (72,225) \n (619,443) \n (1164.4)%\n\n \n\nWe recorded an other loss of HK566,243 for the year ended March\n31, 2026, compared to a net foreign exchange gain of HK$53,200 for the year ended March 31, 2025. This fluctuation was primarily driven\nby the recognition of a loss on exhibitions held of HK$496,075 and a net foreign exchange loss of HK$102,664 in the current year, arising\nfrom the translation of United States Dollar-denominated balances into Hong Kong Dollars, which is our reporting currency. These losses\nwere partially offset by a gain of HK$32,496 recognized on the disposal of property and equipment.\n\n \n\n**Income tax**\n\n \n\n  \nFor the years ended March 31,  \n% of \n\n  \n2025  \n2026  \n2026  \nVariance  \nvariance \n\n  \nHK$  \nHK$  \nUS$  \nHK$  \n  \n\nCurrent income tax \n 262,812  \n 264,564  \n 33,745  \n 1,752  \n 0.7%\n\nDeferred income tax \n (9,078) \n (9,144) \n (1,166) \n (66) \n 0.7%\n\nTotal income tax \n 253,734  \n 255,420  \n 32,579  \n 1,686  \n 0.7%\n\n \n\nOur company, TJGC Group, was incorporated in the British Virgin\nIslands. Under the current laws of the British Virgin Islands, TJGC Group is not subject to tax on income or capital gain. Additionally,\nupon payments of dividends to the shareholders, no British Virgin Islands withholding tax will be imposed.\n\n \n\nIn accordance with the relevant tax laws and regulations of Hong\nKong, a company registered in Hong Kong is subject to income taxes within Hong Kong at the applicable tax rate on taxable income. Our\nincome tax for the year ended March 31, 2026 has remained consistent with the year ended March 31, 2025.\n\n \n\n**B. Liquidity and Capital Resources**\n\n \n\nAs of the date of this Annual Report, we have financed our operations\nprimarily through cash flows from operations, the proceeds of the IPO and loans from bank and other borrowings. We plan to support our\nfuture operations primarily from cash generated from our operations and the net proceeds raised from our IPO and our recent follow-on\noffering.\n\n \n\nOn January 23, 2025, the Company closed its IPO of 2,000,000 ordinary\nshares, no par value per share (the “Ordinary Shares”). The Ordinary Shares were priced at $4.00 per share, and the offering\nwas conducted on a firm commitment basis. On January 25, 2025, R.F. Lafferty & Co., Inc., as the representative of the underwriters\nfor the IPO, exercised its over-allotment option to purchase an additional 300,000 ordinary shares of the Company at the public offering\nprice of $4.00 per share. The closing for the sale of the over-allotment shares took place on January 27, 2025. The IPO and the exercise\nof the over-allotment option with net proceeds totaling HK$64,093,706 (US$8,238,371) from the offering after deducting underwriting discounts\nand offering expenses of $7,369,135 (US$947,202) from the gross proceeds totaling HK$71,462,841 (US$9,200,000).\n\n \n\nSubsequent to the fiscal year ended March 31, 2026, the Company\nentered into securities purchase agreements with certain investors to issue and sell 15,000,000 ordinary shares in a best-efforts offering\nat a price of US$0.40 per share, generating aggregate gross proceeds of US$6,000,000. This offering closed on April 16, 2026, and the\nCompany received net proceeds of approximately US$5,435,772 after deducting placement agent fees and other estimated offering expenses.\n\n \n\nAs of March 31, 2026, we had an outstanding bank and other borrowings\nbalance of approximately HK$15.6 million (US$2.0 million), of which the bank and other borrowings of approximately HK$9.3 million (US$1.2\nmillion) will be payable within one year and approximately HK$6.3 million (US$0.8 million) will be payable after one year. The weighted\naverage annual interest rate of the bank and other borrowings for the year ended March 31, 2026 was approximately 2.9%.\n\n \n\nAs reflected in our audited consolidated financial statements,\nwe had a net loss of approximately HK$23.5 million for the year ended March 31, 2026, as compared to net loss of approximately HK$26.8\nmillion for the year ended March 31, 2025. As of March 31, 2026 we had cash of approximately HK$2.6 million (US$0.3 million), compared\nto approximately HK$23.9 million as of March 31, 2025. We also had an accumulated deficit of approximately HK$47.7 million and positive\nworking capital that amounted to HK$1.8 million as of March 31, 2026, compared to HK$28.4 million as of March 31, 2025. These factors,\namong others, raise substantial doubt about our ability to continue as a going concern. Our working capital requirements are influenced\nby the size of our operations, the volume and dollar value of our sales contracts, the progress of execution on our customer contracts,\nand the timing for collecting accounts receivable, and repayment of accounts payable.\n\n \n\nWe believe that our current cash and cash flows provided by operating\nactivities, loans from banks and other borrowings, and the net proceeds from our IPO, and our April 2026 follow-on offering will be sufficient\nto meet our working capital needs in the next 12 months from the date the audited consolidated financial statements are issued. Notwithstanding\nthis belief, there can be no assurance that our operational initiatives to increase revenue and reduce costs will be successful, or that\nwe will be able to raise additional funds on reasonable terms if needed. If we experience an adverse operating environment or incur unanticipated\ncapital expenditure requirements, or if we determine to accelerate our growth, then additional financing may be required. Such financing\nmay include the use of additional debt or the sale of additional equity securities. Any financing which involves the sale of equity securities\nor instruments that are convertible into equity securities could result in immediate and possibly significant dilution to our existing\nshareholders.\n\n \n\nAs of March 31, 2026 and 2025, there are no outstanding dividends\npayable.\n\n \n\n50\n\n[Table of Contents](#toc)\n\n** **\n\n**Comparison of Years Ended March 31, 2026 and\n2025**\n\n \n\nWe do not plan to pay any further dividends out of our retained\nearnings, as of the date of this annual report.\n\n \n\n  \nFor the years ended March 31, \n\n  \n2025  \n2026  \n2026 \n\n  \nHK$  \nHK$  \nUS$ \n\nNet cash used in operating activities \n (26,637,785) \n (29,079,572) \n (3,709,129)\n\nNet cash used in investing activities \n (8,190,000  \n (1,640,454) \n (209,241)\n\nNet cash provided by financing activities \n 54,354,045  \n 9,425,636  \n 1,202,249 \n\nTranslation difference \n (16,276) \n 10,108  \n 1,289 \n\nNet increase (decrease) in cash \n 19,526,260  \n (21,294,390) \n (2,716,121)\n\nCash and restricted cash at the beginning of fiscal year \n 4,368,915  \n 23,878,899  \n 3,045,778 \n\nCash and restricted cash at the end of fiscal year \n 23,878,899  \n 2,594,617  \n 330,946 \n\n \n\n**Operating activities**\n\n \n\nNet cash used in operating activities amounted to approximately\nHK$29.1 million for the year ended March 31, 2026. This was primarily driven by (i) net loss of approximately HK$23.5 million for the\nyear ended March 31, 2026; (ii) an increase in deposit and prepayments of approximately HK$7.2 million, (iii) an increase in accounts\nreceivable of approximately HK$1.5 million; and (iv) the impact of non-cash adjustments, including an impairment loss on games development\ncosts of HK$4.3 million, partially offset by a reversal of impairment loss on prepayment of approximately HK$3.1 million. These outflows\nwere partially offset by (v) an increase in amounts due to shareholders of approximately HK$1.7 million.\n\n \n\nNet cash used in operating activities amounted to approximately\nHK$26.6 million for the year ended March 31, 2025, mainly derived from (i) net loss of approximately HK$26.8 million for\nthe year ended March 31, 2025; and (ii) increase in deposits and prepayments of approximately HK$11.7 million which was driven by\npayment in advance to our services provider for offline event of approximately HK$15.3 million and decrease of deferred IPO cost of HK$4.5\nmillion and offset by increase in impairment loss on prepayment of approximately HK$10.6 million.\n\n** **\n\n**Investing activities**\n\n \n\nNet cash used in investing activities amounted to approximately\nHK$1.6 million for the year ended March 31, 2026, mainly derived from (i) payments for capitalized games development costs of approximately\nHK$1.6 million; and (ii) the acquisition of motor vehicle for HK$0.6 million, which was subsequently disposed for proceeds of HK$0.5 million\n\n \n\nNet cash used in investing activities amounted to approximately\nHK$8.2 million for the year ended March 31, 2025, mainly derived from payments for capitalized games development costs of approximately\nHK$8.2 million.\n\n** **\n\n**Financing activities**\n\n \n\nNet cash provided by financing activities amounted to approximately\nof HK$9.4million for the year ended March 31, 2026, mainly derived from (i) proceeds from new and other borrowings of approximately of\nHK$8.4 million; (ii) advances from a shareholder of Company of approximately of HK$2.0 million, partially offset by the repayment of bank\nborrowings of approximately HK$0.9 million.\n\n \n\nNet cash provided by financing activities was approximately of HK$54.4million\nfor the year ended March 31, 2025, which was driven by proceeds from the IPO of approximately of HK$71.5million, offset by (i) payments\nfor deferred IPO costs of approximately HK$17.7 million; and advance from a shareholder of the Company of approximately HK$1.4 million\nand repayment of bank borrowings of approximately HK$0.9 million.\n\n \n\n**Off-balance sheet arrangements**\n\n \n\nWe did not have during the years presented, and we do not\ncurrently have, any off-balance sheet financing arrangements or any relationships with unconsolidated entities or financial partnerships,\nincluding entities sometimes referred to as structured finance or special purpose entities, that were established for the purpose of facilitating\noff-balance sheet arrangements or other contractually narrow or limited purposes\n\n \n\n51\n\n[Table of Contents](#toc)\n\n \n\n**Inflation**\n\n \n\nInflation does not materially affect the business or the results\nof operations of our Operating Subsidiaries.\n\n** **\n\n**Seasonality**\n\n \n\nThe nature of our business does not appear to be affected by seasonal\nvariations.\n\n \n\n**C. Research and Development, Patent and Licenses, etc.**\n\n \n\nPlease refer to “Item 4. Information on the Company –\nB. Business Overview”.\n\n \n\n**D. Trend Information**\n\n \n\nOther than as disclosed elsewhere in this annual report, we are\nnot aware of any trends, uncertainties, demands, commitments or events that are reasonably likely to have a material effect on our net\nrevenues, income from continuing operations, profitability, liquidity or capital resources, or that would cause reported financial information\nnot necessarily to be indicative of future operating results or financial condition.\n\n** **\n\n**E. Significant Accounting Policies**\n\n \n\nThe consolidated financial statements of us have been prepared\nin accordance with accounting principles generally accepted in the United States of America, or U.S. GAAP, and on a going-concern\nbasis.\n\n \n\nThe following descriptions of significant accounting policies,\njudgments and estimates should be read in conjunction with our consolidated financial statements and other disclosures included in this\nAnnual Report.\n\n \n\nThe selection of critical accounting policies, the judgments and\nother uncertainties affecting application of those policies and the sensitivity of reported results to changes in conditions and assumptions\nare factors that should be considered when reviewing our financial statements. We believe the following accounting policies involve the\nmost significant judgments and estimates used in the preparation of our financial statements.\n\n \n\n**Revenue Recognition**\n\n \n\nThe Company applied ASC Topic 606 “Revenue from Contracts\nwith Customers” (“ASC 606”) for all years presented.\n\n \n\nThe core principle of the revenue standard is that a company should\nrecognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which\nthe company expects to be entitled in exchange for those goods or services.\n\n \n\nThe following five steps are applied to achieve that core principle:\n\n \n\nStep 1: Identify the contract with the customer\n\n \n\nStep 2: Identify the performance obligations in the contract\n\n \n\nStep 3: Determine the transaction price\n\n \n\nStep 4: Allocate the transaction price to the performance obligations\nin the contract\n\n \n\nStep 5: Recognize revenue when the company satisfies a performance\nobligation.\n\n \n\n52\n\n[Table of Contents](#toc)\n\n \n\nThe Company has elected to apply the practical expedient in paragraph\nASC 606-10-50-14 and does not disclose information about remaining performance obligations that have original expected durations\nof one year or less. \n\n \n\nThe Company enters into contracts with customers that include\npromises to transfer various services, which are generally capable of being distinct and accounted for as separate performance obligations.\nThe transaction price is allocated to each performance obligation on a relative standalone selling price basis. The transaction price\nallocated to each performance obligation is recognized when that performance obligation is satisfied, at a point in time or over time\nas appropriate. Revenue is recognized when the promised services are transferred to customers, in an amount that reflects the consideration\nallocated to the respective performance obligation.\n\n \n\nThe Company is engaging in the one-stop advertising services to\ncustomers in Hong Kong. The Company’s principal revenue stream includes:\n\n \n\n*(a)**Online\nadvertising*\n\n \n\nFor revenue generated through the online placement of advertisements,\nthe Company’s performance obligation is fulfilled at the point in time when the advertisement content is broadcasted in the digital\nmedia and the marketing publication is publicly released, or the transfer of the broadcasting right to the customer is made.\n\n \n\nIn the event the contract with the customer further entitles the\nCompany to a one-off licensing fee for granting the customer the intellectual property right attached to the advertising contents and\nmaterials, the Company concluded that such licensing fee is integral to but not distinct or separated from the overall advertising solution\npackage.\n\n \n\nThe entire transaction price of the advertising contract, inclusive\nof the online advertising fee and the licensing fee, is attributed as a single performance obligation and revenue is recognized at the\npoint in time when the Company’s contractual obligation is completed that is the broadcast of the advertisement content and transfer\nof the intellectual property right are simultaneously fulfilled.\n\n \n\n*(b)**Offline\nadvertising and web banner marketing*\n\n \n\nFor revenue generated through the offline and web banner placement,\nthe Company performed its services over a specific tenure set out in the advertising contract. The performance obligation is fulfilled\nover this pre-determined period when the agreed-upon action is completed or when the advertisement is displayed in the relevant medium\nto the public or target audience.\n\n \n\nThe Company recognizes the revenue over the pre-determined contract\nperiod, generally the advertising period, during which its services are rendered to the advertiser and satisfied the relevant performance\nobligation. The Company enters a distinct contract with its customers. The Company concluded that each of the respective services (1) is\ndistinct and (2) meets the criteria for recognizing revenue over time. In addition, the nature of services provided for each successive\nperiod are substantially similar and result in the transfer of substantially the same benefit to the customers. Therefore, we concluded\nthat the periodic services fee satisfies the requirements of ASC 606-10-25-14(b) to be accounted for as a single performance\nobligation.\n\n \n\n*(c)**Provisioning\nof strategic planning services*\n\n \n\nRevenue generated from providing strategic planning services is\nrecognized over time as the Company successively fulfils its performance obligation over the contractual service period and the advertiser\nsimultaneously receives and consumes the benefits provided by the Company’s service performance.\n\n \n\nThe Company concluded that each of the respective services (1) is\ndistinct and (2) meets the criteria for recognizing revenue over contractual service period. In addition, the nature of services\nprovided for each successive period are substantially similar and result in the transfer of substantially the same benefit to the customers.\nThat is, the benefit consumed by the clients is substantially similar for each month, even though the exact volume of services may vary.\nTherefore, we concluded that the periodic services fee satisfies the requirements of ASC 606-10-25-14(b) to be accounted for\nas a single performance obligation.\n\n \n\n53\n\n[Table of Contents](#toc)\n\n \n\n*(d)**Other\nservices*\n\n \n\nOther services rendered by the Company to its clients include\nprovision of (i) administrative services; and (ii) strategic planning on a profit-sharing fee basis.\n\n \n\n**Share-based Compensation**\n\n \n\nWe apply ASC 718 (“ASC 718”), Compensation — Stock\nCompensation, to account for our employee share-based payments. In accordance with ASC 718, we determine whether an award should\nbe classified and accounted for as a liability award or an equity award. All of our share-based awards to employees were classified as\nequity awards. We measure the employee share-based compensation based on the fair value of the award at the grant date. Expense is recognized\nusing accelerated method over the requisite service period.\n\n \n\n**Use of Estimates and Assumptions**\n\n \n\nThe preparation of consolidated financial statements in conformity\nwith U.S. GAAP requires the management to make estimates and assumptions that affect the reported amounts of assets and liabilities\nand disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses\nduring the reporting period. These estimates and judgments are based on historical information that is currently available to the Company\nand on various other assumptions that the Company believes to be reasonable under the circumstances. Significant estimates required to\nbe made by management include, but are not limited to, the valuation of accounts receivable, the allowance for credit losses, useful lives\nof property and equipment, deferred income taxes, the realization of deferred tax assets, revenue recognition and other provisions and\ncontingencies. Actual results could differ from those estimates.\n\n \n\n**G. Safe Harbor**\n\n \n\nSee “Introductory Notes—Forward-Looking Information.”"}