DarkIris Inc. Overview
DarkIris is a Hong Kong–based micro-cap mobile game publisher that monetises free-to-play titles, predominantly Three Kingdoms–themed strategy and role-playing games, through in-game purchases sold via third-party storefronts (Apple App Store, Google Play, Taiwan's My1737 and Hong Kong's Let's Play Art Planet). Revenue grew from USD 3.95 million in FY2023 to USD 10.08 million in FY2025, but profitability has been erased by rising platform fees and an USD 8.81 million post-IPO share-based compensation charge. Since February 2026 management has repositioned the company as a "dual-engine" gaming-plus-AI-generated-content (AIGC) enterprise, establishing a Singapore R&D subsidiary, acquiring ten film/TV IP titles, launching a Seedance-powered video generation platform and preparing an AI film production tool (Cine3.AI). The equity story is dominated by small scale, a founder holding over 97% of voting power through super-voting Class B shares, repeated dilutive financings, and Nasdaq listing-compliance pressure.
Company's own description (latest annual report and prospectus)
In its FY2025 Form 20-F and the September 2026 prospectus, DarkIris describes itself as a comprehensive technology enterprise engaged in developing, publishing and operating mobile digital games through various third-party digital storefronts, with activities spanning game design, programming and graphics as well as distribution and operation across multiple platforms. The company says it leverages the creative and technical expertise of Hong Kong's gaming community and the multicultural tastes of players in its markets, with a stated mission of creating a broader array of engaging and immersive mobile game genres for a global audience. It identifies two core product offerings: (1) Games Development — developing, marketing and distributing self-developed mobile games; and (2) Games Publishing and Operation — publishing and operating both self-developed titles and games licensed from third-party developers.
The September 2026 prospectus adds a third line: an AIGC business launched in 2026, framed as part of a "core gaming business + AI digital content" dual-engine strategy, covering script and storyboard generation, virtual character and scene production, short-form video creation and digital content production for film producers, content platforms and brand clients.
Business model and revenue model
| Dimension | Characterisation | Evidence |
|---|---|---|
| Monetisation | 100% free-to-play with in-game purchases of virtual items (consumable and durable) | 20-F FY2025; F-1 (Sep 2026): in-game purchases were 100% of revenue in FY2024, FY2025 and H1 FY2026 |
| Product vs. service vs. subscription vs. licensing mix | Effectively 100% "service/virtual goods" revenue; no subscription, no out-licensing revenue, no AIGC revenue separately disclosed as of H1 FY2026 | 20-F FY2025; H1 FY2026 6-K |
| Content sourcing | Mix of self-developed titles (45% of FY2025 revenue; 55% in H1 FY2026) and in-licensed titles (55% FY2025; 45% H1 FY2026) | F-1 (Sep 2026) |
| Distribution | Over 99% of revenue derived via publishing channels (Apple App Store, Google Play, My1737, Let's Play Art Planet); over 85% from these named platforms | 20-F FY2025 |
| Economics of licensed games | DarkIris retains a pre-determined share of 40%–85% of collections; developers receive the remainder (revenue sharing with developers ran at 10%–20% of licensed-game revenue as recorded in cost of revenue) | F-1 (Sep 2026); FY2025 results release |
| Platform take | Platform handling fees typically 15%–60% of player spend; USD 6.19M in FY2025 (61% of revenue) | FY2025 results release |
| Payments | Mycard, PayPal, WeChat, Alipay | 20-F FY2025 |
| Licence terms | In-licence agreements generally 2–3 years post-launch; licensors can terminate on 30 days' notice | 20-F FY2025; F-1 (Sep 2026) |
Value chain position
DarkIris sits in the middle of the mobile-game value chain. Upstream, it either develops content in-house (small studio in Hong Kong and, since October 2025, Xiamen) or in-licenses titles from mainland Chinese developers. Downstream, it relies on storefronts and regional distribution platforms that control player acquisition, payments and — critically — a large share of gross bookings. The company performs localisation (language, region-specific costumes and cultural features), live operations, marketing (social media, influencers, live-streaming, SEO, outdoor advertising) and community events. It does not own a distribution platform, payment network or engine technology. The FY2025 numbers illustrate the bargaining imbalance: platform handling fees rose 76% to USD 6.19 million while revenue grew 27%, compressing gross margin from 38.0% to 24.8% (FY2025 results release).
Customer types and end-markets
Under US GAAP, DarkIris's direct "customers" are the publishing channels, while the economic end-users are individual mobile gamers. The company states that substantially all operations are in Hong Kong and a majority of customers are located in Hong Kong; titles are distributed to Hong Kong, Macau and Taiwan, with data-vendor profiles also citing Southeast Asia, North America and the Middle East as target markets (20-F FY2025; vendor profiles). Paying-user metrics for H1 FY2026: 79,608 average monthly paying gamers (up from 70,866) and ARPPU of USD 22.38 (up from USD 20.50) (H1 FY2026 6-K).
The new AIGC line targets social media producers, documentary creators, advertising teams, film/TV producers and enterprise users (video.aideptus.com launch release, 29 May 2026; Cine3.AI update, 30 September 2026).
Independent characterisation
DarkIris is best understood as a regional, platform-dependent, hit-driven mobile game operator focused on a narrow genre niche (Three Kingdoms historical strategy/RPG) for traditional-Chinese-speaking audiences. Its top three games generated 64% of FY2025 gross revenue (20-F FY2025), and its economics are governed by storefront take rates. The AIGC pivot announced in 2026 is, at this stage, an early-stage venture built largely on third-party foundation models (notably ByteDance's Seedance 2.0) rather than proprietary model IP, and had not been broken out as a revenue line in the latest reported period. The company's capital-markets profile — IPO at USD 4.00, a 1-for-16 reverse split nine months later, and a 2026 offering featuring warrants with a "zero exercise price option" that could represent up to ~96% of post-offering shares — places it firmly in the high-risk, high-dilution segment of the US-listed Hong Kong small-cap universe.
Strategy
Stated strategy (themes paraphrased from filings)
The 20-F FY2025 and September 2026 F-1 list four business strategies: (1) expansion of the game portfolio; (2) development and expansion of intellectual property rights; (3) strategic investments and partnerships; and (4) product-line diversification. Claimed competitive strengths are production and creative capability with an international perspective, an experienced game production and publishing team, global reach and market expertise, global infrastructure and player support, and key platform and payment partnerships. The FY2025 results commentary emphasised continued investment in creative game development, user operations and retention, and diversification of marketing and distribution channels, with the aim of gradually unlocking operating leverage.
Since February 2026, the overarching corporate narrative has shifted to a "dual-engine" model: core gaming plus AI digital content, with the AIGC business described as a low-marginal-cost content production capability serving both internal game/film needs and external clients.
Strategic initiatives — last 24 months
| Date | Initiative | Detail and targets | Source |
|---|---|---|---|
| Nov 2024 | Acquisition of Stellar | Adds in-house video marketing capability | 20-F FY2025 |
| Aug 2025 | IPO proceeds deployment | Stated uses: operations team expansion, product development, working capital | IPO releases |
| FY2025 | Post-IPO equity incentive programme | USD 8.81M SBC to attract/retain talent | FY2025 results |
| FY2025 | Game development prepayments and IP purchase | USD 2.70M prepayment for game development; USD 0.70M intangibles | 20-F FY2025 cash flow |
| Oct 2025 | Xiamen development studio | New PRC subsidiary for game development | 20-F FY2025 |
| Feb 2026 | AIGC film and video business | Proprietary platform Alpha Q2 2026, Beta 1.0 Q3 2026; ~60% production-efficiency gain and 50%–70% post-production cost reduction targeted; 11-member core team; phased project-based commercialisation | Chairman's Letter |
| Apr 2026 | Aether Intelligence (Singapore) | Global R&D HQ; MaaS/PaaS commercialisation model; long-term ambition framed around AGI transformation in gaming and film | Release, 9 Apr 2026 |
| Apr 2026 | PIPE and IP acquisition | USD 3.8M PIPE (strategic investor CashGame Global); 10 film/TV IPs for ~USD 800K in equity | Release, 24 Apr 2026 |
| May 2026 | Capital structure | 1-for-16 consolidation to meet Nasdaq standards and pursue AIGC expansion and synergistic acquisitions | Release, 7 May 2026 |
| May 2026 | video.aideptus.com | Commercial launch; English/localised versions planned later in 2026 | Release, 29 May 2026 |
| Aug 2026 | Platform suite and vendor qualification | Full-stack AI tools; frame-extraction tool >15% paid conversion; Aether listed as qualified vendor with a leading global social media/tech company; first AI premium film targeted for 2026 release | Release, 14 Aug 2026 |
| Sep 2026 | Cine3.AI global rollout preparation | US subsidiary; Singapore and US recruitment (business development, administration, IP licensing/rights operations, cross-border compliance) | Release and F-1, 30 Sep 2026 |
| Sep 2026 | Quantum Project X | Historical strategy game; open beta testing targeted to begin Q2 2027 | Release, 30 Sep 2026 |
| Oct 2026 | ~USD 6M unit offering | Proceeds for operations team expansion, rewards to existing team members, product development, working capital | F-1; pricing release, 8 Oct 2026 |
Sustainability/ESG commitments and cost programmes
No sustainability targets, ESG commitments or formal cost-reduction programmes with quantified targets have been publicly disclosed.
Medium-term financial targets / guidance
DarkIris has not issued quantitative revenue, margin or earnings guidance. The only quantified forward targets are operational: AIGC platform milestones (Alpha Q2 2026, Beta 1.0 Q3 2026), efficiency/cost-reduction expectations for AIGC workflows (≈60% efficiency gain; 50%–70% post-production cost reduction), an AI film release in 2026, and Quantum Project X open beta from Q2 2027.
Products & Services
Gaming — self-developed titles
| Title | Description / genre | Target customer | Launch | Pricing model | Notes / source |
|---|---|---|---|---|---|
| Taoyuan Three Kingdoms (桃園三國) | Three Kingdoms–themed mobile game; one of top three revenue contributors | Traditional-Chinese-speaking players in HK, Macau, Taiwan | — | Free-to-play, in-game purchases | Distributed non-exclusively via My1737 (Taiwan) and Let's Play Art Planet (HK) — F-1 (Sep 2026); 20-F FY2025 |
| The Great Story of Wei, Shu and Wu (大話魏蜀吳) | Three Kingdoms–themed mobile RPG/strategy; top-three contributor | Same | Feb 2024 | Free-to-play, in-game purchases | 20-F FY2025; F-1 (Sep 2026) |
| Record of the Divine Serpent in the Ninth Heaven (九霄靈蛇錄) | Mobile RPG; still actively played per 20-F | Same | — | Free-to-play | Vendor profiles list as self-developed — 20-F FY2025; roic.ai |
| Danmo Three Kingdoms | Single-player Three Kingdoms game | Same | Jan 2026 | — | 20-F FY2025 |
| Alchemy and Magic | Mobile game in development; art production costs of ~USD 0.90M expensed as R&D in FY2025 | — | In development | — | FY2025 results release |
| Quantum Project X | Historical strategy game; development aimed at open beta testing beginning Q2 2027 | — | Planned (open beta Q2 2027) | — | Release, 30 Sep 2026 |
Gaming — licensed / co-developed titles
| Title | Description / genre | Launch | Notes / source |
|---|---|---|---|
| Myth of the Floating Sky (浮空神話) | Mobile RPG; top-three contributor | — | Described as licensed in 20-F FY2025 risk factors; some vendor profiles list it as self-developed — classification conflict flagged |
| Third Century | Co-developed with an authorised third-party developer | Jan 2025 | 20-F FY2025 |
| Meow Planet Nurturing | Casual nurturing game | Jun 2025 | 20-F FY2025 (developer status not specified) |
| Rise of the Dynasty | Mobile game (strategy, per title) | Sep 2025 | 20-F FY2025 (developer status not specified) |
| Other licensed titles | The company states it has been licensed to launch and operate 12 mobile games cumulatively; the 20-F variously cites 10 licensed games currently operated and 5 licensed games held as of 30 Sep 2025 | Various | Internal inconsistency in 20-F FY2025 flagged; individual titles not publicly disclosed |
Genre focus. Vendor profiles summarising the filings describe the target genres as action RPGs (ARPGs) and massively multiplayer online games (MMOs), with a pronounced Three Kingdoms historical theme across the core self-developed portfolio.
Monetisation design. Virtual items are classified as consumable (immediate benefits such as temporary power-ups) or durable (long-term enhancements such as premium outfits or permanent upgrades). Items have no monetary value outside the games (F-1, September 2026). Operations include holiday-limited items, loyalty benefits for long-standing players and offline events.
Video marketing services (Stellar)
Hongkong Stellar Wisdom, operational since April 2025, conducts video marketing on social media and video content platforms such as YouTube. No separate revenue or pricing is disclosed; it appears to function primarily as an in-house user-acquisition and content arm (F-1, September 2026).
AIGC products and services (launched 2026)
| Product / initiative | Description and capabilities | Target customer | Status / year | Pricing model | Source |
|---|---|---|---|---|---|
| video.aideptus.com (AIGC video platform) | Text-to-video and image-to-video generation integrating ByteDance's Seedance 2.0 model; initial Simplified Chinese interface, English and other localisations expected later in 2026 | Social media producers, documentary creators, advertising teams | Commercially launched 29 May 2026 | — | Release, 29 May 2026 |
| Proprietary AIGC platform (MaaS/PaaS) | Platform to commercialise AIGC technologies for developers, filmmakers and creators; Alpha targeted Q2 2026, Beta 1.0 targeted Q3 2026 | Developers, filmmakers, creators | Alpha/Beta targets announced Feb 2026; delivery status not separately confirmed | — | Chairman's Letter, 17 Feb 2026; release, 9 Apr 2026 |
| Full-stack AI platform suite | Text-to-video, drama and film workflows, AIGC marketing, enterprise APIs | Enterprises, content producers | Described Aug 2026 | — | Release, 14 Aug 2026 |
| Game animation frame extraction platform | Tool for extracting animation frames for game production; reported paid conversion above 15% in first month | Game studios / artists | Launched by Aug 2026 | Paid (terms not disclosed) | Release, 14 Aug 2026 |
| Cine3.AI | AI film/video production platform for professional and enterprise users covering pre-visualisation, scene and character generation, and post-production support | Professional and enterprise film/video producers | Pre-launch compliance review, testing and operational preparation as of 30 Sep 2026 | — | Release and F-1, 30 Sep 2026 |
| AI-powered premium film | First independently produced AI-powered film, targeted for release later in 2026 | Audiences / distributors | In production | Not applicable | Release, 14 Aug 2026 |
| Film/TV IP library | 10 completed film and television titles acquired from a Hong Kong production company for ~USD 800K (equity-settled), to be enhanced via AI post-production workflows | Distribution / remastering | Acquired 24 Apr 2026 | Not applicable | Release, 24 Apr 2026 |
| Technical testing and multimodal AI development services | Opportunity arising from Aether's inclusion in a leading global social media/technology company's qualified vendor directory | Large technology platforms | Vendor status obtained by Aug 2026; revenue not disclosed | — | Release, 14 Aug 2026 |
The Chairman's Letter (17 February 2026) projected production-efficiency gains of roughly 60% and post-production cost reductions of 50%–70% from the AIGC workflow, and committed to phased, project-based commercialisation designed to protect the core gaming business.
Financial Narrative
Data availability. DarkIris was incorporated as a holding company in May 2024 and listed in August 2025. Audited consolidated financial statements are publicly available for FY2023, FY2024 and FY2025 (20-F FY2025), plus unaudited interim results for H1 FY2026 (six months to 31 March 2026). FY2021 and FY2022 financials are not publicly disclosed; the multi-year tables therefore cover FY2023–FY2025, with H1 data shown separately. Balance-sheet data are disclosed for 30 September 2024 and 2025 only (FY2023 year-end cash is derivable from the cash-flow statement).
Income statement
Source: 20-F FY2025 consolidated statements of operations and cash flows; EBITDA and adjusted EBITDA computed. Management stated that excluding non-recurring equity incentives the company generated operating profit of approximately USD 0.17M in FY2025; arithmetic on reported figures (−8.596 + 8.808) gives ~USD 0.21M — minor discrepancy flagged.
Source: 20-F FY2025; split adjustment computed (×16). The split-adjusted FY2025 figure matches the TTM EPS of −8.32 displayed by Yahoo Finance in July 2026.
Computed from 20-F FY2025 figures. FY2023 growth not computable (FY2022 not disclosed). Revenue CAGR FY2023–FY2025: 59.7% (computed).
Commentary — income statement. Three distinct regimes are visible. FY2023 was a heavy-marketing year: selling expenses of USD 2.73M (69% of revenue) produced an operating loss despite a 61% gross margin, reflecting a self-publishing model with low platform take. FY2024 was the inflection year: revenue doubled on the back of the February–March 2024 launch cohort, selling expenses fell 62% as the company leaned on two third-party digital platforms to promote titles in exchange for a larger revenue share, and the business delivered its only disclosed profit (USD 1.10M net). FY2025 shows the cost of that platform strategy: platform handling fees rose 76% to USD 6.19M (61% of revenue), compressing gross margin by 13 points, while the post-IPO equity incentive programme added an USD 8.81M non-cash charge recorded in selling expenses, producing an USD 8.64M net loss. Underlying (ex-SBC) operating profitability was close to breakeven. The structural lesson is that DarkIris has effectively traded marketing expense for platform take, and gross margin is now the key variable to watch.
Interim results — H1 FY2026 vs H1 FY2025
Source: H1 FY2026 6-K (13 August 2026); F-1 (September 2026). H1 FY2025 operating expenses derived from the stated 718.3% increase. Quarterly data displayed by Google Finance imply H2 FY2025 revenue of ~USD 4.88M, giving TTM revenue to 31 March 2026 of ~USD 10.81M (computed).
Commentary — interim. Revenue growth slowed to 13.9% but was healthier in composition: both paying users and ARPPU rose, and gross margin recovered modestly as self-developed titles (which avoid developer revenue-sharing) rose to 55% of revenue. However, USD 2.13M of "game enhancement costs" drove a net loss, and cash fell to USD 0.47M with working capital of only ~USD 0.4M at 31 March 2026 — a precarious liquidity position that preceded the April 2026 PIPE.
Balance sheet
Source: 20-F FY2025 consolidated balance sheets. FY2023 year-end cash was USD 0.081M (cash-flow statement); other FY2023 balance-sheet items not publicly disclosed. As of 31 March 2026: cash USD 0.47M and working capital ~USD 0.4M (H1 FY2026 6-K).
Commentary — balance sheet. The balance sheet is debt-free but thin. The FY2025 expansion in total assets was funded by IPO proceeds and was largely deployed into a USD 2.7M non-current prepayment for game development and USD 0.70M of purchased intangibles — the counterparties and specific titles for which are not detailed in the sources reviewed. Receivables nearly doubled (DSO rose from ~62 to ~95 days), and contract liabilities (deferred revenue on unconsumed virtual items) doubled. The accumulated deficit reached USD 12.3M. By March 2026 liquidity had fallen to a level that made fresh equity a necessity.
Cash flow
Source: 20-F FY2025 consolidated statements of cash flows; FCF computed. Note that the FY2025 results release headline cites "positive operating cash flow", while the statement shows net cash used in operations of USD 0.46M — the headline is inconsistent with the reported figure (discrepancy flagged).
Commentary — cash flow. Operating cash generation has hovered around breakeven in the best year and has been negative otherwise. Historically the business was funded through large two-way flows with shareholders (advances of USD 5.6M and repayments of USD 5.0M in FY2023 alone), signalling dependence on founder financing before the IPO. Post-IPO, the company has relied on successive equity raises: USD 6.9M IPO (Aug 2025), USD 0.47M capital contribution (Mar 2026), USD 3.8M PIPE (Apr 2026) and an ~USD 6M unit offering (Oct 2026).
Ratios
Computed from 20-F FY2025 figures. Net debt/EBITDA and interest coverage are not meaningful (no debt, no interest expense; net cash position). FY2023 ratios not computable due to missing balance-sheet data.
Commentary — ratios. Return metrics swing violently because of the tiny equity base; FY2024's triple-digit ROE/ROIC reflects USD 1.1M of profit on under USD 1M of equity rather than a durable franchise. The deterioration in the cash conversion cycle (receivables collected from platforms more slowly while payables were paid down) is a quiet but real drain on liquidity.
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Revenue stream (USD Mn)
| Revenue stream (USD Mn) | FY2024 | FY2025 |
|---|---|---|
Licensed third-party games | 5.68 | 5.94 |
Self-developed games | 2.24 | 4.14 |
Total revenue | 7.92 | 10.08 |
Revenue mix (% of total)
| Revenue mix (% of total) | FY2024 | FY2025 |
|---|---|---|
Licensed third-party games (% as stated) | 73 | 55 |
Self-developed games (% as stated) | 27 | 45 |
Growth by stream (%)
| Growth by stream (%) | FY2025 |
|---|---|
Licensed third-party games YoY growth | 4.6 |
Self-developed games YoY growth | 84.8 |
Driver Details
| Driver | Impact (USD Mn) | Source |
|---|---|---|
Five games launched March 2024 (full-year effect) | +5.04 | FY2025 results release |
New game launched in 2025 | +0.25 | FY2025 results release |
Decline in six older games | −2.92 | FY2025 results release |
Net change (approx.) | +2.16 | Computed (USD 10.08M − USD 7.92M) |
Revenue by Segment (%)
| Concentration metric (%) | FY2024 | FY2025 |
|---|---|---|
Top three games share of gross revenue | 44 | 64 |
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View Subscription PlansIncome Statement
| Metric (USD Mn) | FY2023 | FY2024 | FY2025 |
|---|---|---|---|
Revenue | 3.951 | 7.920 | 10.079 |
Cost of revenue | 1.551 | 4.912 | 7.576 |
Gross profit | 2.400 | 3.008 | 2.503 |
Selling expenses | 2.734 | 1.036 | 9.304 |
Research and development expenses | 0.000 | 0.000 | 0.900 |
General and administrative expenses | 0.924 | 0.816 | 0.895 |
Total operating expenses | 3.659 | 1.852 | 11.099 |
Operating income (loss) | -1.259 | 1.156 | -8.596 |
Depreciation and amortisation | 0.007 | 0.008 | 0.033 |
EBITDA (operating income + D&A) | -1.251 | 1.165 | -8.563 |
Share-based compensation | 0.000 | 0.000 | 8.808 |
Adjusted EBITDA (EBITDA + SBC) | -1.251 | 1.165 | 0.245 |
Total other income, net | 0.001 | 0.039 | 0.030 |
Pre-tax income (loss) | -1.258 | 1.195 | -8.566 |
Income tax expense | 0.000 | 0.098 | 0.076 |
Net income (loss) | -1.258 | 1.097 | -8.642 |
Per-share metric (USD)
| Per-share metric (USD) | FY2023 | FY2024 | FY2025 |
|---|---|---|---|
EPS basic, as reported (pre-consolidation) | -0.08 | 0.07 | -0.52 |
EPS diluted, as reported (pre-consolidation) | -0.08 | 0.07 | -0.52 |
EPS basic, split-adjusted for 1-for-16 consolidation | -1.28 | 1.12 | -8.32 |
Dividends per share | 0 | 0 | 0 |
Weighted average shares, as reported (M) | 16.000 | 16.000 | 16.527 |
Margin and growth metric (%)
| Margin and growth metric (%) | FY2023 | FY2024 | FY2025 |
|---|---|---|---|
Revenue growth YoY | — | 100.5 | 27.3 |
Gross margin | 60.7 | 38.0 | 24.8 |
Operating margin | -31.9 | 14.6 | -85.3 |
EBITDA margin | -31.7 | 14.7 | -85.0 |
Adjusted EBITDA margin | -31.7 | 14.7 | 2.4 |
Net margin | -31.8 | 13.8 | -85.7 |
Platform handling fees as % of revenue | — | 44.4 | 61.4 |
Selling expenses as % of revenue | 69.2 | 13.1 | 92.3 |
Income Statement and Margin Analysis (%)
| Metric (six months to 31 Mar) | H1 FY2025 | H1 FY2026 | Change |
|---|---|---|---|
Revenue (USD Mn) | 5.20 | 5.93 | +13.9% |
Gross profit (USD Mn) | 1.45 | 1.76 | +20.9% |
Gross margin (%) | 27.9 | 29.6 | +1.7 pts |
Total operating expenses (USD Mn) | 0.45 | 3.67 | +718.3% |
of which game enhancement costs (USD Mn) | — | 2.13 | — |
Net income (loss) (USD Mn) | 0.91 | -1.90 | swing to loss |
Basic and diluted EPS (USD) | not stated in summary | -1.51 | — |
Average monthly paying gamers | 70,866 | 79,608 | +12.3% |
ARPPU (USD) | 20.50 | 22.38 | +9.2% |
Cash at period end (USD Mn) | — | 0.47 | vs 1.80 at 30 Sep 2025 |
Working capital (USD Mn) | — | ~0.4 | — |
“—” = not publicly disclosed.
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View Subscription PlansBalance Sheet
| Metric (USD Mn, as of 30 Sep) | FY2024 | FY2025 |
|---|---|---|
Cash | 0.314 | 1.800 |
Accounts receivable | 1.350 | 2.617 |
Total current assets | 2.214 | 4.758 |
Prepayment for game development (non-current) | 0.000 | 2.700 |
Intangible assets, net | 0.000 | 0.679 |
Goodwill | 0.000 | 0.000 |
Total assets | 2.230 | 8.447 |
Contract liabilities | 0.706 | 1.402 |
Total current liabilities (= total liabilities) | 1.295 | 1.664 |
Short-term debt | 0.000 | 0.000 |
Long-term debt | 0.000 | 0.000 |
Total debt | 0.000 | 0.000 |
Net debt (negative = net cash) | -0.314 | -1.800 |
Total shareholders' equity | 0.935 | 6.783 |
Working capital | 0.918 | 3.094 |
Accumulated deficit | -3.706 | -12.349 |
Cash Flow
| Metric (USD Mn) | FY2023 | FY2024 | FY2025 |
|---|---|---|---|
Net cash from operating activities | -1.332 | 0.054 | -0.458 |
Purchase of property and equipment (capex) | 0.003 | 0.012 | 0.005 |
Free cash flow (OCF − PP&E capex) | -1.334 | 0.042 | -0.463 |
Prepayment for game development (investing) | 0.000 | 0.000 | 2.700 |
Purchase of intangible assets | 0.000 | 0.000 | 0.704 |
Free cash flow incl. game prepayments and intangibles | -1.334 | 0.042 | -3.867 |
Net cash used in investing activities | 0.003 | 0.012 | 3.423 |
Proceeds from issuance of ordinary shares | 0.000 | 0.000 | 5.050 |
Proceeds from capital contribution | 0.407 | 2.742 | 0.570 |
Advances from shareholders | 5.605 | 1.479 | 0.970 |
Repayments to shareholders | 4.970 | 3.993 | 1.222 |
Net cash from financing activities | 1.042 | 0.199 | 5.368 |
Dividends paid | 0 | 0 | 0 |
Share buybacks | 0 | 0 | 0 |
Returns & Leverage Ratios (%) and Financial Ratios (x)
| Ratio | FY2024 | FY2025 |
|---|---|---|
ROE on ending equity (%) | 117.3 | -127.4 |
ROE on average equity (%) | — | -224.0 |
ROA on ending assets (%) | 49.2 | -102.3 |
ROIC (NOPAT / (equity − cash)) (%) | 170.9 | -172.5 |
Current ratio (x) | 1.71 | 2.86 |
Debt / equity (x) | 0.00 | 0.00 |
Asset turnover on ending assets (x) | 3.55 | 1.19 |
Days sales outstanding (days) | 62 | 95 |
Days payables outstanding (days) | 15 | 2 |
Cash conversion cycle (days, no inventory) | 47 | 93 |
Geographic Disclosure Details
| Geographic disclosure | Status | Source |
|---|---|---|
Location of majority of customers | Hong Kong | 20-F FY2025 |
PRC subsidiary share of revenue, profit, assets, net assets (most recent audited year) | Each under 50% (company assertion for CSRC purposes) | F-1 (Sep 2026) |
Share Price & Returns
| Reference point | Price (USD, split-adjusted) | Source / note |
|---|---|---|
IPO price (Aug 2025) | 64.00 | USD 4.00 × 16 |
52-week / all-time high | 240.00 | USD 15.00 pre-consolidation (Google Finance; Yahoo 52-week range) |
Close 30 Jan 2026 | 5.33 | USD 0.333 pre-consolidation (Yahoo) |
Close 2 Feb 2026 (post-results spike) | 15.20 | USD 0.95 pre-consolidation, +185% (Yahoo) |
Close 10 Sep 2026 | 2.47 | MarketScreener |
Close 29 Sep 2026 | 2.55 | F-1 (Sep 2026) |
Last close 8 Oct 2026 | 1.67 | StockTitan |
Return metric (%) | Value | Basis |
Since IPO | -97.4 | 1.67 vs 64.00 (computed) |
Year-to-date 2026 (to 10 Sep 2026) | -51.2 | MarketScreener |
Year-to-date 2026 (to 8 Oct 2026, approx.) | -67 | Computed from MarketScreener-implied start-of-year price ≈ USD 5.06 |
1-year | Not computed reliably | Vendor data inconsistent around the consolidation |
Valuation Snapshot
| Multiple | Value | Basis |
|---|---|---|
Market capitalisation | USD 3.5M | 2,097,587 shares × USD 1.67 |
Price / TTM sales | 0.32x | USD 3.5M / USD 10.81M TTM revenue (computed) |
EV / Sales | Not reliably computable | Current cash not disclosed (USD 0.47M at 31 Mar 2026 before USD 3.8M PIPE in Apr 2026) |
P/B | ~0.52x on 30 Sep 2025 equity of USD 6.78M | likely changed materially |
Capital Markets
| Item | Status | Source |
|---|---|---|
Sell-side analyst consensus | None; no analyst ratings found | Google Finance |
Dividend history and policy | No dividends declared or paid; company may rely on subsidiary distributions; Hong Kong dividends payable only from distributable profits | F-1 (Sep 2026) |
Vendor dividend yield anomaly | One aggregator lists a 38.23% dividend yield — erroneous given no dividends paid | americancompanies.com — flagged |
Buyback authorisations | None disclosed | — |
Credit ratings (Moody's / S&P / Fitch) | Not rated | — |
Debt maturity profile | No debt outstanding | 20-F FY2025 |
Transaction by Date
| Date | Transaction | Terms | Gross proceeds / value |
|---|---|---|---|
Aug 2025 | IPO | 1,725,000 Class A at USD 4.00 (USD 64.00 split-adjusted) | USD 6.90M |
Mar 2026 | Capital contribution | — | USD 0.47M |
Apr 2026 | PIPE | At USD 0.35 pre-consolidation (USD 5.60 split-adjusted) | USD 3.8M |
Apr 2026 | Equity-settled IP acquisition | 10 film/TV titles | ~USD 0.8M |
May 2026 | 1-for-16 consolidation | 26,361,114 → ~1,647,570 Class A shares | — |
Oct 2026 | Best-efforts unit offering | 4,166,666 units at USD 1.44; warrants with six-month term and zero exercise price option (~12 shares each); exercise price stated as USD 2.04 in the pricing summary, whereas the F-1 sets it at 170% of the unit price (which would be ~USD 2.45 at USD 1.44) — discrepancy flagged; placement fee 5% | ~USD 6.0M |
Analyst Conclusions
Management guidance and consensus
Management provides no quantitative financial guidance, and there is no sell-side consensus. Qualitative guidance centres on: continued investment in game development and user operations; Cine3.AI commercialisation following pre-launch review; English/localised versions of video.aideptus.com later in 2026; release of a first AI-powered premium film in 2026; and Quantum Project X open beta from Q2 2027.
Bull case
-
Core gaming is a real, growing business at near-breakeven underlying economics. Revenue reached USD 10.08M in FY2025 and USD 10.81M TTM, with paying users and ARPPU both rising in H1 FY2026; excluding non-cash SBC, FY2025 operations were roughly breakeven.
-
Mix shift should restore margins. Self-developed titles rose to ~55% of H1 FY2026 revenue; gross margin already recovered from 27.9% to 29.6% year on year, and further self-developed launches (Quantum Project X, Alchemy and Magic) could continue the trend.
-
Optionality in AIGC at a tiny valuation. At ~USD 3.5M market capitalisation (~0.3x TTM sales), any tangible revenue from the qualified-vendor relationship, the frame-extraction tool (>15% paid conversion) or Cine3.AI would be large relative to the equity value.
Bear case
-
Dilution is likely to overwhelm per-share value. The October 2026 warrants' zero exercise price option could, per the F-1, bring offering shares to ~96% of the post-offering share count with no additional cash to the company, effectively transferring value from existing holders.
-
Platform economics cap profitability. Platform handling fees consumed 61% of FY2025 revenue and over 99% of revenue flows through third-party channels; DarkIris has little leverage to change this.
-
The AIGC pivot is thin and dependent. It relies on ByteDance's Seedance model, has no disclosed revenue, competes with model owners, and has coincided with repeated capital raises and steep share-price declines (−38% on the day the latest F-1 was filed).
Catalysts and monitorables (next 12 months)
| Catalyst / monitorable | Expected timing | Why it matters |
|---|---|---|
| Closing of ~USD 6M offering and warrant exercises | From 9 Oct 2026; warrants expire ~six months after issuance (~Apr 2027) | Determines liquidity runway and the scale of dilution |
| Nasdaq minimum bid compliance | Ongoing | F-1 itself flags renewed deficiency risk post-offering |
| FY2026 annual results and 20-F | By 31 Jan 2027 (four months after FYE) | First full year including AIGC spend; gross margin trajectory; auditor opinion |
| Cine3.AI launch and US subsidiary activity | Late 2026 – 2027 | First test of AIGC commercial demand |
| AI premium film release | Targeted 2026 | Validation of AI production workflow claims |
| Disclosure of AIGC revenue as a separate line | FY2026 20-F | Evidence of second-engine traction |
| Quantum Project X open beta | From Q2 2027 | Pipeline health of core gaming |
| Platform fee ratio and self-developed revenue share | Each report | Key driver of gross margin |
| Further insider activity and Class B voting changes | Ongoing | Governance alignment |
Analyst verdict
DarkIris presents a stark divergence between its operating business and its equity. Operationally, the company has built a modest but genuine mobile-game franchise around Three Kingdoms–themed titles for Hong Kong, Macau and Taiwan, lifting revenue from under USD 4 million in FY2023 to about USD 10–11 million on a trailing basis, with improving paying-user counts, rising ARPPU and an expanding share of higher-margin self-developed content. Stripped of the one-off USD 8.8 million equity-compensation charge, FY2025 was roughly breakeven. That is a respectable outcome for a 20-odd-person studio.
The equity story, however, is dominated by structural negatives that the operating performance cannot offset. Platform take rates now absorb over 60% of revenue and leave little room for profit; the top three titles provide nearly two-thirds of sales; and liquidity fell to under half a million dollars of cash by March 2026. Management's response has been a pivot narrative toward AI-generated content that, on available disclosure, rests on third-party foundation models, an unnamed vendor-directory listing and early-stage tools with no separately reported revenue. Each strategic announcement has been accompanied or followed by equity issuance — a PIPE, an equity-settled IP purchase, a reverse split, and now a best-efforts unit offering whose zero-exercise-price warrants could expand the share count by more than twenty-fold. Meanwhile the founder's voting control has risen to over 97% even as his economic stake shrinks, and the board has become less independent.
On balance, DarkIris should be viewed as a highly speculative, financing-dependent micro-cap in which per-share value creation is unlikely until dilution from the October 2026 offering has fully played out and the company demonstrates either sustained gross-margin recovery in gaming or audited, material AIGC revenue. Key verification points are the FY2026 20-F, the final share count after warrant exercises, and continued Nasdaq compliance. Until then, the risk-reward skews unfavourably for minority shareholders.
*Data-integrity notes: (1) Class B voting rights stated as 20 votes (20-F FY2025) vs 150 votes (F-1 Sep 2026). (2) Management's ex-SBC operating profit (~USD 0.17M) vs computed ~USD 0.21M. (3) Licensed-game counts vary within the 20-F (12 cumulative; 10 currently operated; 5 held at FY-end). (4) Licensed revenue share stated as 55% vs 59% computed from absolute figures. (5) "Myth of the Floating Sky" described as licensed in the 20-F but as self-developed by a vendor profile. (6) FY2025 release headline cites positive operating cash flow while the statement shows USD 0.46M net cash used. (7) Employee count 19 vs 24 across vendors. (8) Warrant exercise price USD 2.04 (pricing summary) vs 170% of USD 1.44 (F-1 formula). (9) Yahoo Finance YTD returns appear not split-adjusted.
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View Subscription PlansExecutive Leadership
Board of Directors
| Name | Title | Tenure / status | Prior roles, education, age | Source |
|---|---|---|---|---|
Hong Zhifang (also styled Zhifang Hong) | Chairman of the Board, Chief Executive Officer, Director; controlling shareholder | Director and CEO since at least the 2025 IPO; signed 20-F FY2025 | Not publicly disclosed in sources reviewed (details in 20-F Item 6) | 20-F FY2025 certifications; F-1 (Sep 2026) |
Xu Jiang | Chief Financial Officer; Director | CFO at least since IPO; appointed director 3 Jul 2026 | — | 20-F FY2025; 6-K, 6 Jul 2026 |
Hong Yuanfang | Former Director | Re-appointed at Feb 2026 AGM; resigned 3 Jul 2026 | Not publicly disclosed; reported to hold ~974,400 pre-consolidation shares per a March 2026 insider filing summary (MarketScreener) | AGM 6-K; 6-K, 6 Jul 2026 |
Ng Chee Jiong | Independent Director | Re-appointed Feb 2026 AGM | — | AGM 6-K; 20-F FY2025 |
Law Chee Hui | Independent Director | Re-appointed Feb 2026 AGM | — | AGM 6-K; 20-F FY2025 |
Li Feng Lin | Director (independence status not confirmed in sources reviewed) | Re-appointed Feb 2026 AGM | — | AGM 6-K |
“—” = not publicly disclosed.
Governance Overview
| Attribute | Detail | Source |
|---|---|---|
Board size | Five directors (post-July 2026: Hong Zhifang, Xu Jiang, Ng Chee Jiong, Law Chee Hui, Li Feng Lin) | AGM 6-K; 6-K Jul 2026 |
Chair/CEO separation | No — combined in Hong Zhifang | 20-F FY2025 |
Committees | Audit committee and nominating and corporate governance committee referenced; compensation committee composition not detailed in sources reviewed | 20-F FY2025; 6-K Jul 2026 |
Controlled company | Yes; may rely on Nasdaq exemptions from majority-independence and committee requirements, though the company states it does not currently intend to | F-1 (Sep 2026) |
AGM support | Each director received over 114.1 million votes in favour (pre-consolidation, reflecting super-voting Class B) | AGM 6-K (StockTitan summary) |
Board & Management Changes
| Date | Change | Context |
|---|---|---|
Feb 2026 | Five directors re-appointed at AGM | Routine; Enrome LLP ratified as auditor |
3 Jul 2026 | Hong Yuanfang resigned as director; CFO Xu Jiang appointed director | Company emphasised board-level financial oversight; reduces the number of non-executive voices on the board |
Major Shareholders
| Holder | Holding | Economic % | Voting % | As of | Source |
|---|---|---|---|---|---|
Hong Zhifang (via RongStar Holdings Ltd) | 5,449,600 Class B shares (pre-consolidation) | 27.08 | 88.13 | 30 Sep 2025 | 20-F FY2025 |
Hong Zhifang (aggregate beneficial) | Not itemised in summary; Class B outstanding 429,886 post-consolidation | 20.49 | 97.48 | 30 Sep 2026 | F-1 (Sep 2026) |
Hong Zhifang (pro forma, full offering sale and all warrants exercised via zero-price option) | — | 0.73 | 52.55 | Pro forma | F-1 (Sep 2026) |
Hong Chun'nan (angel investor since inception) | Participated in USD 3.8M PIPE; stake not disclosed | — | — | Apr 2026 | PIPE release |
CashGame Global (Singapore game developer) | Strategic PIPE investor; stake not disclosed | — | — | Apr 2026 | PIPE release |
Institutional holders (top 10) | Not publicly disclosed in meaningful size; free float ~1.21M shares (StockTitan) | — | — | Oct 2026 | Data vendors |
“—” = not publicly disclosed.
Competitive Landscape
Key Competitors
| Competitor | Segment overlap | Positioning relative to DarkIris | Source / basis |
|---|---|---|---|
Shanghai Junmeng Network Technology Co., Ltd. (Junmeng Games) | Mobile game development/publishing | Named by DarkIris as a direct competitor; larger PRC-based operator | 20-F FY2025 |
SPGame Co., Limited | Mobile game publishing (HK/Taiwan/SE Asia) | Named by DarkIris as a direct competitor | 20-F FY2025 |
Tencent Holdings | Mobile games across Greater China | Dominant scale player; sets genre and UA cost benchmarks | Industry context |
NetEase, Inc. | Mobile MMO/RPG, historical themes | Major developer/publisher with Chinese-history IP titles | Industry context |
Koei Tecmo | Three Kingdoms IP (Romance of the Three Kingdoms, Dynasty Warriors franchises) | Owner of the genre's most recognised commercial franchises; licenses mobile adaptations | Industry context |
Gamania Digital Entertainment (Taiwan) | Game publishing in Taiwan/HK | Established regional publisher with platform (Beanfun) | Industry context |
IGG Inc. | Mobile strategy games (global) | Larger strategy-game operator | Industry context |
XD Inc. (TapTap) | Publishing and distribution in Greater China | Owns a distribution platform — structural advantage over platform-dependent publishers | Industry context |
Gravity Co., Ltd. (Nasdaq: GRVY) | Mobile MMORPG publishing in Asia | Nasdaq-listed Asian mobile publisher peer | Industry context |
AIGC video peers: Kuaishou (Kling), MiniMax (Hailuo), Shengshu (Vidu), Runway, Pika; ByteDance itself (Seedance/Jimeng) | AI video generation | Model owners with proprietary technology and scale; DarkIris's platform resells/wraps a third-party model | Release, 29 May 2026; industry context |
Competitor Detail
| Metric | DarkIris (FY2025) |
|---|---|
Revenue | USD 10.08M |
Revenue growth | 27.3% |
Gross margin | 24.8% |
Operating margin | −85.3% (≈+2% ex-SBC) |
R&D intensity | 8.9% of revenue |
