KB Global Holdings Ltd
• Business model: Cayman holding → Hong Kong WFOE → China VIE providing custom enterprise software. • 2024 revenue: $179,613 from one related-party client, gross profit $30,734. • Operating expenses: $133,595; net loss $74,221 (versus $96,372 loss in 2023). • Cash plummeted to $3,253; total asset...
KB Global Holdings Limited (KB Global) 10-K Review
In this in-depth review, we examine the 10-K filing for KB Global Holdings Limited (the “Company” or “KB Global”) for the fiscal year ended December 31, 2024. KB Global is a Cayman Islands holding company that, through a VIE structure, provides enterprise software development and consulting services in China. Here, we outline the business model, dissect the financial statements, highlight key risks, and offer an investment verdict.
Warren.AI 💰 2.0 / 10
1. Company Overview
Legal Structure & Ownership
- KB Global Holdings Limited is incorporated in the Cayman Islands.
- It has a wholly owned Hong Kong subsidiary, Kesheng Global (HK) Limited, which in turn owns a PRC WFOE, Suzhou Keju Enterprise Management Consulting Limited.
- This WFOE controls Beijing Kezhao Technology Co., Ltd. (“BJKZ”) through a series of VIE agreements, consolidating BJKZ’s financials under U.S. GAAP.
Business Description
- BJKZ provides custom enterprise software solutions, branded as “Enterprise Digital Management System Integration.”
- Key modules include CRM, ERP, project management, collaboration tools, financial data analytics, and more.
- The Company’s strategy extends into high-end material manufacturing, aiming for a synergy between software and hardware.
Market Position
- No public trading market for its ordinary shares.
- To date, only one contract has been completed (September 2023–September 2024) for RMB 1.3 million (USD ~180k), which translated into $179,613 revenue in Q1 2024.
2. Business Strategy & Competitive Strengths
Strategic Goals
- Brand Recognition: Enhance visibility among China’s enterprises.
- Industry Synergy: Partner with leading technology firms to accelerate growth.
- Product Innovation: Continuously upgrade software offerings.
- Market Penetration: Grow the client base nationwide.
- IT Infrastructure: Invest in CRM, OA, and Wealth Cloud platforms.
Competitive Strengths
- Targeted Sales Network: Focused approach to enterprise clients.
- Client-Oriented Culture: Custom product design tailored to client needs.
- Local Know-How: Leadership team with deep China market expertise.
- Risk Management: Dedicated division overseeing credit, market, operational, and reputational risks.
3. Financial Performance
3.1 Revenue & Gross Profit
| Year Ended 12/31 | 2024 | 2023 |
|---|---|---|
| Revenue | $179,613 | $0 |
| Cost of Sales | $148,879 | $0 |
| Gross Profit | $30,734 | $0 |
- First Contract: In Q1 2024, KB Global delivered its custom system to Beijing Kabeilongteng Investment Center.
- Revenue Recognition: Point-in-time upon delivery and client acceptance.
- Gross Margin: ~17.1%, reflecting high development costs.
3.2 Operating Expenses
| Category | 2024 | 2023 |
|---|---|---|
| Depreciation | $6,830 | $609 |
| Staff Costs | $60,146 | $50,843 |
| Professional Fees | $56,062 | $36,879 |
| Office & Other Costs | $10,557 | $20,187 |
| Total OpEx | $133,595 | $108,518 |
- Professional fees surged due to audit and consulting.
- Staff costs rose as the team expanded to develop the software.
3.3 Net Loss & EPS
| Metric | 2024 | 2023 |
|---|---|---|
| Loss from Operations | $(102,861) | $(108,518) |
| Other Income | $28,640 | $12,146 |
| Net Loss | $(74,221) | $(96,372) |
| Shares Outstanding | 130.1m | 130.1m |
| EPS (Basic/Dil) | $(0.00) | $(0.00) |
- Net loss narrowed by 23% due to first revenue.
- No income taxes recorded; full valuation allowance on deferred tax assets.
3.4 Balance Sheet Highlights
| Metric | 12/31/2024 | 12/31/2023 |
|---|---|---|
| Total Assets | $50,317 | $416,325 |
| Cash & Equivalents | $3,253 | $28,880 |
| Total Liabilities | $320,971 | $611,408 |
| Shareholders’ Deficit | $270,654 | $195,083 |
- Assets Down 88%: Loan to related party offset vs. related party payable.
- Cash Depletion: Down 89% to $3k, signaling critical liquidity risk.
- Deficit Position: Negative equity of $270k.
3.5 Cash Flow
| Cash Flow Category | 2024 | 2023 |
|---|---|---|
| Operating Activities | $(121,653) | $77,041 |
| Investing Activities | $365,852 | $(369,440) |
| Financing Activities | $(269,610) | $320,326 |
| Net Change in Cash | $(25,627) | $27,546 |
Key Drivers
- Investing: Repayment of related-party loan improved cash by $462k, offset capital outlays.
- Financing: Net outflow due to loan repayments.
4. Corporate Governance & Controls
- Board Composition: Single independent director; no audit committee.
- Material Weaknesses:
- Lack of functioning audit committee.
- Inadequate segregation of duties.
- Ineffective period-end controls.
- Remediation Plan: Hire independent directors, establish audit committee, strengthen finance team.
5. Key Risks
5.1 VIE & Regulatory
- The VIE structure is under regulatory scrutiny in China; contracts could be deemed unenforceable.
- China’s evolving guidance on offshore listings could impact operations or delisting risk.
5.2 Single Customer Concentration
- 100% of 2024 revenue derived from one related-party client.
- No pipeline of confirmed contracts, casting doubt on repeat business.
5.3 Liquidity & Capital Needs
- Cash of $3k at year-end provides no runway.
- Negative working capital requires immediate equity or debt financing.
5.4 Governance & Control Risks
- Material weaknesses in financial reporting could lead to misstatements.
- No public trading market limits liquidity for investors.
6. Investment Verdict & Score
Score: 2.0 / 10
Rationale
- Pros: Innovative product concept; seasoned management with China experience.
- Cons: Unproven revenue model (single sale), severe liquidity shortage, negative equity, VIE regulatory risk, governance gaps.
Despite promising technology ambitions, KB Global’s near-term outlook is hindered by cash constraints, concentration risk, and governance issues. A speculative play that requires significant capital infusion and new client wins to de-risk.
Net Loss (2024): $(74,221)
This review is based solely on KB Global’s 10-K filing and does not constitute investment advice. Investors should conduct their own due diligence.