Concorde International Group Ltd F-1/A, filed Sep 18, 2024
Concorde International Group Ltd. (CIGL)
As filed with the U.S. Securities and Exchange Commission on September 17, 2024.
Registration No. 333-281799
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1
FORM F-1
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
CONCORDE INTERNATIONAL
GROUP LTD
(Exact name of Registrant as specified in its charter)
Not Applicable
(Translation of Registrant’s Name into English)
| British Virgin Islands | 7381 | Not Applicable | ||
| (State or other jurisdiction of incorporation or organization) |
(Primary Standard Industrial Classification Code Number) |
(I.R.S. Employer Identification No.) |
3 Ang Mo Kio Street 62, #01-49 LINK@AMK
Singapore 569139
+65 2960802
(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)
Cogency Global Inc.
122 East 42nd Street, 18th Floor
New York, NY 10168
(800)221-0102
(Names, address, including zip code, and telephone number, including area code, of agent for service)
Copies to:
| Louis A. Bevilacqua, Esq. Bevilacqua PLLC 1050 Connecticut Avenue, NW, Suite 500 Washington, DC 20036 (202) 869-0888 |
Barry I. Grossman, Esq. Lijia Sanchez, Esq. Ellenoff Grossman & Schole LLP 1345 Avenue of the Americas New York, New York 10105 (212) 370-1300 |
Approximate date of commencement of proposed sale to public: As soon as practicable after this Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. ☐
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement the same offering. ☐
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933.
Emerging growth company ☒
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐
| † | The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012. |
The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.
The information in this prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting offers to buy these securities in any state where the offer or sale is not permitted.
| PRELIMINARY PROSPECTUS | SUBJECT TO COMPLETION | DATED SEPTEMBER 17, 2024 |
$5,000,000 Class A Ordinary Shares
| CONCORDE INTERNATIONAL GROUP LTD |
This is the initial public offering of our Class A Ordinary Shares, par value $0.00001 per share. We anticipate that the initial public offering price will be $4.00. We are offering 1,250,000 Class A Ordinary Shares, assuming an estimated initial public offering price of $4.00 per share.
Currently, no public market exists for our Class A Ordinary Shares. We plan to apply to list our Class A Ordinary Shares on the Nasdaq Capital Market under the trading symbol “CIGL”. We will not close this offering unless the Nasdaq Capital Market has approved our Class A Ordinary Shares for listing.
We have two classes of authorized Ordinary Shares, Class A Ordinary Shares and Class B Ordinary Shares. The rights of the holders of Class A Ordinary Shares and Class B Ordinary Shares are identical, except with respect to voting and conversion. The Class A Ordinary Shares generally vote together with the Class B Ordinary Shares as a group, unless otherwise prohibited by law. Each Class A Ordinary Share is entitled to one vote. Each Class B Ordinary Share is entitled to one hundred votes and is convertible into one Class A Ordinary Share. As of the date of this prospectus, our founders, the holders of our outstanding Class B Ordinary Shares, held 100% of the voting power of our outstanding share capital and are therefore our controlling shareholders. Following this offering, taking into consideration the Class A Ordinary Shares expected to be offered hereby, even if 100% of such shares are sold, our founders, some of whom are also some of our officers and directors, will retain controlling voting power in the Company based on having approximately 97.57% of all voting rights.
We are an “emerging growth company,” as that term is used in the Jumpstart Our Business Startups Act of 2012, and as such, have elected to comply with certain reduced public company reporting requirements for this prospectus and future filings. See “Prospectus Summary — Implications of Being an Emerging Growth Company.”
We are a “foreign private issuer” as defined under the U.S. federal securities laws and, as such, may elect to comply with certain reduced public company reporting requirements for this and future filings. See “Prospectus Summary — Implications of Being a Foreign Private Issuer.”
We expect be a “controlled company” under the rules of the Nasdaq Capital Market, immediately after consummation of this offering and we expect to avail ourselves of the corporate governance exemptions afforded to a “controlled company” under the rules of the Nasdaq Capital Market. See “Risk Factors — Risks Related to This Offering and Ownership of Our Class A Ordinary Shares.” If we are approved to list our Class A Ordinary Shares on the Nasdaq Capital Market, we will be a “controlled company” as defined in Nasdaq listing rules because more than 50% of our voting power will be held by Mr. Swee Kheng Chua after the offering. As a “controlled company,” we are exempt by Nasdaq listing rules from certain corporate governance requirements. Accordingly, you may not have the same protections afforded to shareholders of companies that are subject to all of the corporate governance requirements of the Nasdaq Capital Market. See “Prospectus Summary — Implications of Being a Controlled Company.”
Investing in our Class A Ordinary Shares involves a high degree of risk. See “Risk Factors” beginning on page 13 of this prospectus for a discussion of information that should be considered in connection with an investment in our Class A Ordinary Shares.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
| Per Share | Total | |||||||
| Initial public offering price | $ | $ | ||||||
| Underwriting discounts and commissions(1) | $ | $ | ||||||
| Proceeds to us, before expenses | $ | $ | ||||||
| (1) | We have agreed to pay the underwriters a discount equal to 7.5% of the gross proceeds of the offering. Underwriting discounts and commissions do not include a non-accountable expense allowance equal to 1% of the initial public offering price payable to the underwriters. For other fees and expenses payable to the underwriters, we refer you to “Underwriting” beginning on page 99 for additional information regarding underwriters’ compensation. |
We have granted a 45-day option to the representative of the underwriters to purchase up to an additional Class A Ordinary Shares at the public offering price less the underwriting discount and commissions.
The underwriters expect to deliver the Class A Ordinary Shares to purchasers on or about , 2024.
The date of this prospectus is , 2024
TABLE OF CONTENTS
You should rely only on the information contained in this prospectus or in any free writing prospectus we may authorize to be delivered or made available to you. Neither we, nor the underwriters have authorized anyone to provide you with different information. The information in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus, or any free writing prospectus, as the case may be, or any sale of Class A Ordinary Shares.
For investors outside the United States: Neither we, nor the underwriters have done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. Persons outside the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of the Class A Ordinary Shares and the distribution of this prospectus outside the United States.
This prospectus includes statistical and other industry and market data that we obtained from industry publications and research, surveys and studies conducted by third parties. Industry publications and third-party research, surveys and studies generally indicate that their information has been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information. While we believe these industry publications and third-party research, surveys and studies are reliable, you are cautioned not to give undue weight to this information.
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COMMONLY USED DEFINED TERMS
Except as otherwise indicated by the context and for the purposes of this prospectus only, references in this prospectus to:
| ● | “we,” “us,” “the Company,” “our” or “our company” are to the combined business of Concorde International Group Ltd, a British Virgin Islands (“BVI”) business company incorporated on May 2, 2023, and its consolidated subsidiaries; |
| ● | “Concorde International” are to Concorde International Group Ltd, a holding company incorporated in the BVI under the BVI Business Companies Act (as amended) (the “BVI Act”) on May 2, 2023; |
| ● | “Concorde Singapore” are to Concorde International’s 100% owned subsidiary, Concorde International Group Pte Ltd a corporation formed in Singapore on June 12, 2023; |
| ● | “Concorde Security Singapore” are to Concorde Singapore’s 96.81% owned subsidiary, Concorde Security Pte Ltd, a corporation formed in Singapore on June 16, 2005; |
| ● | “Concorde Security Malaysia” are to Concorde Singapore’s 100% owned subsidiary, Concorde Security Sdn Bhd, a corporation formed in Malaysia on January 13, 2015; |
| ● | “Concorde UK” are to Concorde Singapore’s 100% owned subsidiary, Concorde Security Limited, a private company limited by shares incorporated in the United Kingdom on December 23, 2016; |
| ● | “Concorde Asia” are to Concorde Singapore’s 70% indirectly owned subsidiary, Concorde Asia Pte Ltd, a corporation formed in Singapore on October 8, 2013; |
| ● | “Berjaya Academy” are to Concorde Singapore’s 70% indirectly owned subsidiary, Berjaya Academy Pte Ltd, a corporation formed in Singapore on March 6, 2020; and |
| ● | “U.S. dollars,” “dollars,” “USD” or “$” are to the legal currency of the United States. |
Our reporting currency is the US dollar. Concorde International is a holding company with no operations of its own. All of operations are conducted in Singapore through Concorde International’s operating subsidiary in Singapore, Concorde Singapore. The functional currency of Concorde Singapore is the local currency (Singapore Dollar), as it is the monetary unit of account of the principal economic environment in which the Company’s operations are conducted. All assets and liabilities of the Company’s foreign operations are translated at the current exchange rate as of the end of the period, and revenue and expenses are translated at average exchange rates in effect during the period. The gain or loss resulting from the process of translating foreign currency financial transactions into US dollars is reflected as a foreign currency cumulative translation adjustment and reported as a component of accumulated other comprehensive income (loss). Foreign currency transaction gains and losses resulting from or expected to result from transactions denominated in a currency other than the functional currency are recognized in other income (expense), net in the statement of operations. Our fiscal year end is December 31. References to a particular “fiscal year” are to our fiscal year ended December 31 of that calendar year. Our consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards, or IFRS.
This prospectus includes statistical and other industry and market data that we obtained from industry publications and research, surveys and studies conducted by third parties. Industry publications and third-party research, surveys and studies generally indicate that their information has been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information. While we believe these industry publications and third-party research, surveys and studies are reliable, you are cautioned not to give undue weight to this information.
We have proprietary rights to trademarks used in this prospectus that are important to our business. Solely for convenience, the trademarks, service marks and trade names referred to in this prospectus are without the ®, ™ and other similar symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensors to these trademarks, service marks and trade names.
This prospectus may contain additional trademarks, service marks and trade names of others. All trademarks, service marks and trade names appearing in this prospectus are, to our knowledge, the property of their respective owners. We do not intend our use or display of other companies’ trademarks, service marks or trade names to imply a relationship with, or endorsement or sponsorship of us by, any other person.
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This summary highlights selected information contained elsewhere in this prospectus. This summary is not complete and does not contain all of the information that you should consider before deciding whether to invest in our Class A Ordinary Shares. You should carefully read the entire prospectus, including the risks associated with an investment in our company discussed in the “Risk Factors” section of this prospectus, before making an investment decision. Some of the statements in this prospectus are forward-looking statements. See the section titled “Cautionary Statement Regarding Forward-Looking Statements.”
In this prospectus, “we,” “us,” “our,” “our company,” “Concorde International,” and similar references refer to Concorde International Group Ltd and its consolidated subsidiaries.
Our Company
Overview
Concorde International Group Limited is an integrated security services providers that combines physical manpower and innovative technology to deliver effective security solutions. In 2014, we were awarded “The Business Model Innovation Award” by the Singapore Manufacturing Federation. In 2015, we were awarded the “Best Innovative Use of Infocomm Technology Award” by the Singapore Infocomm Technology Federation (“SiTF”). In 2016, we were awarded the “Most Innovative Use of Infocomm Technology (Private Sector-SME) Award” by the Infocomm Media Development Authority of Singapore (“IMDA”, formerly known as Infocomm Development Authority) and the SiTF. In 2017, we were awarded the “IP Awards” by the World Intellectual Property Organization — Intellectual Property Office of Singapore (WIPO-IPOS). In addition, in 2017 The Nanyang Technological University of Singapore recognized our innovative solution by publishing it as a case study entitled “The Transformation of Concorde Security Pte Ltd” via its Nanyang Technoprenuership Center. In the same year, the Singapore Management University and Harvard Business Publishing Education also recognized our innovation by publishing a case study entitled “Main Case: The Resilience of a Disruptive Innovator : Concorde Security”. From 2018 to 2019, in recognition of our solution in transforming the industry, the IMDA approved our solutions in the Singapore government’s Industry Transformation Map Pilot Programme. From 2020 to 2021, in recognition of our technology and solutions, we were included in the “Pre-approved IT solutions vendor” under the category of security, by the IMDA. From 2022 to 2023, in recognition of our technology solution, the IMDA approved our solutions in the Singapore government’s Advanced Digital Solutions (ADS) under the Small Medium Enterprises Go Digital Programme. With these awards and recognitions, we believe we are one of the leading solution providers in Singapore. Through the integration of our patented technology solution, we help our clients reduce costs and enhance security. We have experienced significant revenue growth, primarily driven by the increasing labor costs and increasing demands in security and facilities management.
Since our establishment in Singapore in 1997, we have built a track record in the professional security community by consistently providing high-quality security manpower. Recognizing manpower sustainability our ever-advancing society, in 2014, we decided to transit into a security solution services company using our innovative business model. With our patented technological innovation, we deliver a higher level of security performance while requiring fewer personnel. Traditionally, a 24-hour shift would necessitate at least three guards for coverage. Our solution involves deploying CCTV cameras, sensors, and other IoT devices at our clients’ premises to enable remote access control monitoring and management. These devices are integrated and controlled through our mobile command vehicles, known as “I-Man Facility Sprinters (IFS),” which patrol a cluster of client sites within a defined radius. This proactive approach enables swift responses to any incidents that arise. Consequently, our clients have experienced a reduction in the required on-site guards from three to two or even fewer, thanks to the efficient utilization of these technologies. The implementation of CCTV cameras, sensors, and other IoT devices has not only minimized human errors but has also decreased the overall need for additional personnel. Our specialists, tasked with operating the IFS, undergo rigorous training to efficiently handle the diverse technologies and respond adeptly to various situations. This approach not only enhances their skill sets but also contributes to a better work-life balance for our team members. As a result, we have received numerous awards in Singapore, recognizing our innovative technology and our contribution to producing the next generation of reliable security solutions. Anchored by our patented technology applications and pioneering solutions, we provide top-tier security and facilities management services to commercial, financial, industrial, and governmental customers in Singapore.
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We offer a range of services to enhance security and safety: (1) i-Guarding Services; (2) Man-Guarding Services; and (3) Consultancy and Training Services. Our i-Guarding Services leverages technology to increase efficiency, with a mobile platform and cluster® aggregation model of higher skillset workforce. Revenue from I-Guarding Services accounted for about 98.09% and 99.09% of revenues for fiscal years ended December 31, 2023 and 2022, respectively. Man-Guarding Services employs trained security officers to maintain safety and deter unlawful activities, making up about 1.41% and 0.24% of revenues for fiscal years ended December 31, 2023 and 2022. Consultancy and Training Services provide expert guidance tailored to clients’ needs, representing about 0.50% and 0.67% of total revenues for fiscal years ended December 31, 2023 and 2022.
We have gained recognition for our disruptive innovation in the integrated monitoring of properties, assets, and building service systems. This ensures round-the-clock surveillance for complete security and operational efficiency. This achievement is made possible through our suite of intelligent security solutions, known as “I-Guarding Services.” One of our flagship services, the groundbreaking “I-Man Facility Sprinter (“IFS”),” is a mobile vehicular platform that revolutionizes security and facility maintenance services. These pioneering solutions not only improve workers’ compensation, skill sets, and working conditions but also redefine the overall business landscape of the industry.
Our company’s second flagship product is the “Intelligent Facility Authenticator (“IFA”).” The IFA is an innovative solution that leverages advanced kiosk technology to enhance security and streamline visitor management. In response to the challenges of limited manpower and rising costs, the IFA system automates the issuance of secure passes and access cards, eliminating the need for physical human interaction. It works by sending secure pass-icons to visitors, verifying their identity upon entry, and dispensing access cards with varying levels of security clearance. This technology not only enhances security within buildings but also offers efficient visitor management services, making it a game-changer in industries where kiosk adoption is increasing. Ultimately, IFA represents a significant advancement in security access control without relying on human intervention.
For the fiscal year ended December 31, 2023 and 2022, more than 96% and 85% respectively, of our revenues were generated by annual recurring contracts. In both years, 99% of our clients were based in Singapore. In the fiscal year ended December 31, 2023, our top two customers, Singapore University of Technology and Design and People’s Assocation OnePunggol accounted for approximately 8 % and 7% of our total revenue, respectively. In the fiscal year ended December 31, 2022, our top two customers, Ceva Logistics Singapore Pte Ltd and JTC Corporation, accounted for approximately 10% and 10% of our total revenue, respectively. See “Risk Factor — Risks Related to Our Business and Industry — A significant amount of our revenue is generated from our existing long-term customers; thus, our inability to retain and maintain a good relationship with our existing customers can have a material adverse effect on our business and financial results.” and “Risk Factor — Risks Related to Our Business and Industry — We have substantial customer concentration, with a limited number of customers accounting for a substantial portion of our recent revenues.”
Our Products and Services
i-Guarding Services
In a traditional security deployment, each building or location hires at least one guard per shift. Each 24-hour shift requires at least three guards stationed at the building or location. Traditional security deployment, based solely on manpower, faces a few key challenges: (i) unreliability of guards due to human nature, as guards often fall asleep while on duty, especially during the night shift; (ii) shortages in hiring guards; and (iii) rising labor costs. Our i-Guarding services address these issues and improve the work-life balance of the guards.
According to the diagram, our i-Guarding service consists of a mobile monitoring and response vehicle (known as the IFS) that patrols a designated radius, covering numerous buildings or locations within a 24-hour period. Each building or location installs electronic security systems that include access control systems, security monitoring cameras, and sensors that can be integrated with our IFS. As a result, instead of deploying guards at each location, these electronic security systems can be used. These systems are connected to our IFS via existing telecommunications infrastructures, including Super Wifi, 4G, or 5G networks. Should an alarm be triggered, the IFS will immediately respond via the remote command center within the vehicle and provide on-site response if the need arises. As a result, clients can reduce their reliance on manpower guards.
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Each IFS will be manned by 3 I- specialists. This includes a driver and two security technicians. Each IFS can monitor and manage at least 15 buildings or locations within the deployment radius. This as a result increases manpower efficiency and enhance service levels due to the reduction of human errors resulting from the traditional security deployment model. Our installation and maintenance technicians, along with our customer service representatives, are dedicated to delivering a high-quality customer service experience. This commitment enhances our brand, improves customer satisfaction, increases customer retention, and accelerates the adoption of additional interactive automation solutions. The cluster® aggregation model allows a team of 3 security officers, with one of them being technically trained, to oversee a cluster of premises ranging from 5, 10, to 15 premises within a 15-minute radius.
For the fiscal year ended December 31, 2023 and 2022, our i-Guarding Services accounted for approximately 98.09% and 99.09% respectively, of our total revenues. It also encompasses the design, implementation, and installation of security systems to protect physical assets and personnel from potential threats and vulnerabilities. This includes IFA, Visitor Management Systems (“VMS”), Keys Management Systems (“KMS”), security turnstile facilities, Internet of Things (“IoT”) devices, and other smart security solutions. It involves a strategic assessment of risks, the selection and deployment of appropriate security measures, and the establishment of protocols for ongoing maintenance and monitoring. This integrated approach ensures the safety and integrity of the environment or infrastructure in question, encompassing both physical security elements such as surveillance systems, access controls, and alarm systems. The ultimate goal of a security project and installation is to mitigate risks and safeguard against unauthorized access, theft, and other security threats.
Man-Guarding Services
Our man-guarding services provides a vital layer of protection for various clients and properties. Our security officers are professionally trained and play a critical role in maintaining safety while preventing unauthorized access or unlawful activities in a given area. They offer a combination of prevention, deterrence, and response to maintain a safe and secure environment, making them an integral part of overall security measures. This service does not involve technology applications or solutions. Service contracts are signed on an annual basis, and revenues are collected and recognized on a monthly basis.
For the fiscal year ended December 31, 2023 and 2022, our Man-Guarding Services was approximately 1.41% and 0.24% of our total revenues.
Consultancy and Training Service
Consultancy and training services provide expert guidance and training support to clients seeking to enhance their security and safety knowledge domains. The service is structured specifically to meet the clients’ needs.
For the fiscal year ended December 31, 2023 and 2022, our Consultancy and Training Service was approximately 0.50% and 0.67% respectively, of our total revenues.
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Our Growth Strategies
We believe that implementing the following growth strategies will continue to position our company as the leader in the markets we serve:
| ● | Continue to grow our recurring revenue business. For the fiscal years ended December 31, 2023 and 2022, our recurring revenue was approximately 96% and 85% of our total revenues, respectively. Monthly recurring revenue allows us to achieve a more consistent and predictable income stream. In addition, it should improve our profitability as we continue to roll out more i-Guarding services. Each building or location deployed under the I-Guarding represents incremental revenues with almost the same cost levels as one IFS can service at least 15 or more buildings or locations. Serving our recurring customers should require lower acquisition and marketing costs as compared to new customers. Hence, signing on more buildings or locations will lead to increased revenues and profitability. We see significant market opportunities for our services because customers in our target markets prefer outsourced security and facilities management services that offer real-time security monitoring for continuous protection and rapid responses to security breaches and fire alarms. We intend to continue pursuing opportunities for recurring revenue by developing new and innovative products and by continuing our aggressive sales and marketing efforts. In order to build scale, we will have to continue to spend on marketing and development. As a result, this may impact our overall profitability. |
| ● | Maintain our commitment to best-in-class customer service. We are focused on fostering a culture dedicated to providing industry-leading customer service to our extensive customer base. We operate through a fleet of 5 cluster command centers in Singapore. From these mobile locations, our teams offer monitored security, interactive residential and commercial automation solutions, including installation, field service, repair, ongoing monitoring, and customer support. |
Our installation and service technicians, along with our customer service representatives, are dedicated to delivering a high-quality customer service experience. This commitment enhances our brand, improves customer satisfaction, increases customer retention, and accelerates the adoption of additional interactive automation solutions. As a result, it drives returns on new customer acquisition expenditures and enhances cash flow generation. We pride ourselves on providing on-site responses within a cluster® radius of 15 minutes of security alerts for the majority of our customers.
| ● | Maintain our high-quality customer base. We believe customer retention is also strongly correlated with the credit quality of our customers. We plan to maintain our focus on strict underwriting standards and will establish processes to evaluate potential new customers’ creditworthiness to improve our customer selection or require upfront payments for higher-risk customers. We expect that our focus on generating high-quality customers will continue to result in a portfolio of customers with attractive credit scores, thereby improving retention, decreasing credit risk exposure, and generating a strong, long-term customer portfolio that generates robust returns on new customer acquisition expenditures and drives strong cash flow generation. |
| ● | Disciplined expansion of our patented protected solution beyond Singapore. We strongly believe that there will be significant demand for our solutions due to the continuous increase in labor costs and the growing demand for high-quality security and facilities management services. Our plan is to expand our geographical coverage and export our successful business model beyond Singapore within the next 24 months. We aim to expand to Malaysia, Australia, and North America markets via partnerships with local security service provider who already have an existing customer base that needs our solution to improve service delivery and to mitigate the increasing labor costs. We have not signed up with any partners yet, but we aim to have them in place based upon the following plan. Our business plan is subject to change based on the change of global economy and other factors that may affect our business operations. |
| Market | Timeline | Estimated Cost | Source of funding | |||
| Malaysia | By Q4, 2024 | US$500,000 | Internal cashflows | |||
| North America | By Q3, 2025 | US$500,000 | Internal cashflows | |||
| Australia | By Q2, 2026 | US$500,000 | Internal cashflows |
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Our Competitive Strengths
We believe that the following competitive strengths contribute to our success and differentiate us from our competitors:
| ● | Proven Solution that is protected by Patents. Our patent-protected solution that has been proven to reduce the need for manpower while maintaining, and even increasing, the quality of service levels for security and facilities management. |
| ● | Superior-Class Customer Service. Rather than competing purely on price, we emphasize the quality of our services, which we believe is distinguished by superior customer service. |
| ● | Deep industrial knowledge and experience. We believe that our focus on safety and security, coupled with our sales consultants, our solid reputation for and expertise in providing reliable security and monitoring services through our patent-protected business model vide our cluster® mobile command centers, our dependable product solutions, and our highly skilled installation and service capabilities, position us well to compete with both traditional and new competitors. |
Our Risks and Challenges
Our prospects should be considered in light of the risks, uncertainties, expenses and difficulties frequently encountered by similar companies. Our ability to realize our business objectives and execute our strategies is subject to risks and uncertainties, including, among others, the following:
Risks Relating to Our Business and Industry
Risks and uncertainties related to our business and industry include, but are not limited to, the following:
| ● | A significant amount of our revenue is generated from our existing long-term customers; thus, our inability to retain and maintain a good relationship with our existing customers can have a material adverse effect on our business and financial results. |
| ● | We currently report our financial results under IFRS, which differs in certain significant respect from U.S. generally accepted accounting principles. |
| ● | A critical part of our success was driven by introducing and providing innovative and cost-saving security services. If our new products and services are not successful, it could have a material adverse effect on our business. |
| ● | The proper and efficient functioning of our computer, data backup, information technology, telecom and processing systems, and our monitoring stations are essential to our business. |
| ● | As a security service provider, we are exposed to greater risk of liability for employee acts or omissions or system failure, than may be inherent in other businesses. |
| ● | Our monitoring security facilities will call the police and fire departments when emergencies arise. If the police and fire departments fail or delay responding to our calls, our business and reputation could be adversely affected. |
| ● | From time to time, we are subject to claims for infringing, misappropriating or otherwise violating the intellectual property rights of others and will be subject to such claims in the future, which could have an adverse effect on our business and operations. |
| ● | Our inability to acquire necessary intellectual property or adequately protect our intellectual property could adversely affect our business and results of operation. |
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Risks Relating to Regulatory Compliance
Risks and uncertainties related to our regulatory compliance, but are not limited to, the following:
| ● | Increasing legislative and regulatory initiatives on cybersecurity and data privacy regulations could adversely impact our business and financial results. |
| ● | As we expand globally, we will be subject to more regulation by various governmental agencies. |
Risks Relating to This Offering and Ownership of Our Class A Ordinary Shares
Risks and uncertainties related to this offering and our Class A Ordinary Shares include, but are not limited to, the following:
| ● | Our dual class voting structure has the effect of concentrating the voting control to holders of our Class B Ordinary Shares, which will limit or preclude your ability to influence corporate matters, and your interests may conflict with the interests of these shareholders. It may also adversely affect the trading market for our Class A Ordinary Shares due to exclusion from certain stock market indices and depress the trading price of our Class A Ordinary Shares. |
| ● | There was no public market for our Class A Ordinary Shares prior to this offering, and if an active trading market does not develop, you may not be able to resell our shares at or above the price you paid, or at all. |
| ● | Our lack of effective internal controls over financial reporting may affect our ability to accurately report our financial results or prevent fraud, which may affect the market for and price of our Class A Ordinary Shares. |
| ● | Nasdaq Capital Market may apply additional and more stringent criteria for our initial and continued listing because our insiders will hold a large portion of our listed securities. |
| ● | The initial public offering price for our Class A Ordinary Shares may not be indicative of prices that will prevail in the trading market and such market prices may be volatile. |
| ● | In addition, we face other risks and uncertainties that may materially affect our business prospects, financial condition, and results of operations. You should consider the risks discussed in “Risk Factors” and elsewhere in this prospectus before investing in our Class A Ordinary Shares. |
Our Corporate Structure
Set forth below is our organizational chart as of the date of this prospectus:
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Concorde International was incorporated in the British Virgin Islands on May 2, 2023. Our registered office in the British Virgin Islands is at Conyers Trust Company (BVI) Limited of Commerce House, Wickhams Cay 1, PO Box 3140, Road Town, Tortola, British Virgin Islands VG1110. Our principal executive office is at 3 Ang Mo Kio Street 62, #01-49 LINK@AMK, Singapore 569139. Our telephone number at this location is +65 2960802.
Concorde International was incorporated to acquire and hold, indirectly, Concorde Security Pte Ltd (Singapore), Concorde Security Sdn Bhd (Malaysia), Concorde Security Limited (UK), Concorde Asia Pte Ltd (Singapore) and Berjaya Academy Pte Ltd (Singapore).
Concorde International Group Pte Ltd (Singapore) was incorporated on June 12, 2023. It is a holding company and a 100% owned subsidiary of Concorde International. Its registered office is at 3 Ang Mo Kio Street 62, #01-49 LINK@AMK, Singapore 569139.
Dual Class Structure
Under our current memorandum and articles of association, we are authorized to issue up to a maximum of 350,000,000 ordinary shares of with a par value of US$0.00001 each comprising (i) 250,000,000 Class A Ordinary Shares with a par value of US$0.00001 each; and (b) 100,000,000 Class B Ordinary Shares with a par value US$0.00001 each. Class B Ordinary Shares are entitled to one hundred votes per share on proposals requiring or requesting shareholder approval, unless prohibited by law. Class A Ordinary Shares are entitled to one vote on any such matter. Other than as to voting and conversion rights, Class B Ordinary Shares and Class A Ordinary Shares have the same rights and rank pari passu with one another, including the rights to dividends and other capital distribution. Each Class B Ordinary Share is convertible into one Class A Ordinary Share at any time by the holder thereof. Class A Ordinary Shares are not convertible into Class B Ordinary Shares under any circumstances.
In this offering, we are offering Class A Ordinary Shares. Our founders, some of whom are also our officers and directors, own 20,888,886 Class B Ordinary Shares which entitles them to 2,088,888,600 votes. Our founders have aggregate voting power of 100% prior to the consummation of the offering contemplated by this prospectus. Following this offering, taking into consideration the 1,250,000 Class A Ordinary Shares expected to be offered hereby, even if 100% of such shares are sold, our founders will retain controlling voting power in the Company based on having approximately 97.57% of all voting rights. This concentrated control may limit or preclude the ability of others to influence corporate matters including significant business decisions for the foreseeable future.
Corporate Information
Our website can be found at www.concordesecurity.com. The information contained on our website is not a part of this prospectus, nor is such content incorporated by reference herein, and should not be relied upon in determining whether to make an investment in our Class A Ordinary Shares.
Recent Developments
Convertible Notes Financing
On June 10, 2024, Softbank Robotics Singapore Pte Ltd (“Softbank”) subscribed to a USD1,000,000 convertible note with a 24 months maturity period with the Company. The Note shall be convertible to the Company’s Class A Ordinary Shares at a conversion price that is equal to the higher of (i) the price per share paid by investors for Class A Ordinary Shares in the Company’s initial public offering or (ii) a 15% discount to the volume weighted average price during the sixty-day period prior to the date of notice of conversion is given to the Company at Softbank’s sole discretion after one year from the date of issuance.
Singapore Subsidiary’s Loan with OCBC
On May 28, 2024, Concorde Security Pte Ltd, our 96.81% owned subsidiary, secured a SGD1.5 million loan from OCBC at a preferential interest rate for general working capital and to refinance an existing loan with a higher interest rate.
On June 14, 2024, Concorde Security Pte Ltd secured a term loan of SGD500,000 from OCBC. On June 25, 2024, Concorde Security Pte Ltd entered into a call option agreement annexed to the term loan, which grants OCBC the option to subscribe for shares at a 20% discount to the IPO price or the trade sale price.
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Class B Ordinary Shares Issuances
On March 18, 2024, we issued 20,788,886 Class B Ordinary Shares to members of our Board, executive officers or their affiliates and existing shareholders, at an issue price of $0.00001 per share, for a total consideration of $208.
On March 6, 2020, Berjaya Academy Pte. Ltd. issued 100,000 Ordinary Shares to Poh San Koh, who held them in a representative capacity for Swee Kheng Chua. On January 10, 2022, Poh San Koh transferred the 100,000 shares to Sharifah Noriati Binte Said Omar. On November 1, 2023, 100,000 shares were transferred from Sharifah Noriati Binte Said Omar to Concorde International Group Pte Ltd (Singapore) for 1 Singapore Dollar. The shares were held by Sharifah Noriati Binte Said Omar in a representative capacity for Swee Kheng Chua. On March 14, 2024, the Company re-designated and reclassified the 100,000 authorized shares to 100,000 Class B Ordinary Shares.
All of the shares were sold to members of our Board, executive officers or their affiliates and existing shareholders, in reliance upon (i) the exemption contained in Section 4(a)(2) of the Securities Act, and Rule 506(b) of Regulation D promulgated thereunder, and applicable state securities laws, or (ii) the provisions of Regulation S promulgated under the Securities Act.
The following table presents the amounts of Class B Ordinary Shares that were issued as of the date of this prospectus and aggregate purchase prices paid by the members of our Board, executive officers or their affiliates and existing shareholders. The terms of these purchases were the same for all purchasers of our Class B Ordinary Shares.
| Shareholder | Class B Common Shares | Aggregate Purchase Price Paid | ||||||
| Swee Kheng Chua(1) | 18,000,000 | $ | 180 | |||||
| Terence Wing Khai Yap(2) | 250,000 | $ | 2.5 | |||||
| Sze Yin Ong(3) | 46,296 | $ | 0.46296 | |||||
| Sharifah Noriati Binte Said Omar(4) | 185,185 | $ | 1.85185 | |||||
| Ping Ping Lim(5) | 377,775 | $ | 3.77775 | |||||
| Jia Wei Chua(6) | 14,815 | $ | 0.14815 | |||||
| Meang Fai Pang | 14,815 | $ | 0.14815 | |||||
| Weilekai Investments Pte Ltd(7) | 2,000,000 | $ | 20 | |||||
| (1) | Swee Kheng Chua, our Chief Executive Officer and Director. |
| (2) | Terence Wing Khai Yap, our Director. |
| (3) | Sze Yin Ong, our Chief Financial Officer. |
| (4) | Ms. Sharifah Noriati Binte Said Omar serves as a nominee director at Berjaya Academy Pte Ltd, our 70% owned subsidiary, as well as Concorde Security Pte Ltd (Singapore), our 96.81% owned subsidiary, and Concorde Asia Pte Ltd (Singapore), our 70% owned subsidiary. |
| (5) | Ping Ping Lim, Swee Kheng Chua’s spouse. |
| (6) | Jia Wei Chua, Swee Kheng Chua’s son. |
| (7) | Weilekai Investments Pte Ltd is a Singapore company, 50% owned by Swee Kheng Chua and 50% owned by Ping Ping Lim, Spouse of Swee Kheng Chua. Swee Kheng Chua is deemed to beneficially own the Class B Ordinary Shares owned by Weilekai Investments Pte Ltd and has sole voting and dispositive powers over its shares. Weilekai Investments Pte Ltd’s business address is 3 Ang Mo Kio Street 62 #01-49 LINK@AMK Singapore 569139. |
Implications of Being an Emerging Growth Company
Upon the completion of this offering, we will qualify as an “emerging growth company” under the Jumpstart Our Business Act of 2012, as amended, or the JOBS Act. As a result, we will be permitted to, and intend to, rely on exemptions from certain disclosure requirements. These provisions include exemption from the auditor attestation requirement under Section 404 of the Sarbanes-Oxley Act of 2002 in the assessment of the emerging growth company’s internal control over financial reporting. In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period. Our financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards.
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We will remain an emerging growth company until (for the first five fiscal years after the initial public offering is completed) the earliest of the following occurs: (i) our total annual gross revenues are $1.235 billion or more (ii) we have issued more than $1 billion in non-convertible debt in the past three years or (iii) we become a “large accelerated filer,” as defined in the Securities Exchange Act of 1934, which we refer to as the “Exchange Act,” Rule 12b-2. Once we cease to be an emerging growth company, we will not be entitled to the exemptions provided in the JOBS Act discussed above.
Implications of Being a Foreign Private Issuer
Once the registration statement of which this prospectus is a part is declared effective by the SEC, we will become subject to the information reporting requirements of the Exchange Act that are applicable to “foreign private issuers,” and under those requirements we will file certain reports with the SEC. As a foreign private issuer, we will not be subject to the same requirements that are imposed upon U.S. domestic issuers by the SEC. Under the Exchange Act, we will be subject to reporting obligations that, in certain respects, are less detailed and less frequent than those of U.S. domestic reporting companies. For example, although we report our financial results on a quarterly basis, we will not be required to issue quarterly reports, proxy statements that comply with the requirements applicable to U.S. domestic reporting companies, or individual executive compensation information that is as detailed as that required of U.S. domestic reporting companies. We also will have four months after the end of each fiscal year to file our annual reports with the SEC and we will not be required to file current reports as frequently or promptly as U.S. domestic reporting companies. We also present our financial statements pursuant to International Financial Reporting Standards, or IFRS. Furthermore, our officers, directors and principal shareholders will be exempt from the requirements to report transactions in our equity securities and from the short-swing profit liability provisions contained in Section 16 of the Exchange Act. As a foreign private issuer, we will also not be subject to the requirements of Regulation FD (Fair Disclosure) promulgated under the Exchange Act. In addition, as a foreign private issuer, we will be permitted, and intend to follow, certain home country corporate governance practices instead of those otherwise required under Nasdaq Marketplace Rules for domestic U.S. issuers. These exemptions and leniencies will reduce the frequency and scope of information and protections available to you in comparison to those applicable to a U.S. domestic reporting companies.
Implications of Being a Controlled Company
The “controlled company” exception to rules of the Nasdaq Capital Market provides that a company of which more than 50% of the voting power is held by an individual, group or another company, a “controlled company,” need not comply with certain requirements of the corporate governance rules of the Nasdaq Capital Market. As of the date of this prospectus, Swee Kheng Chua, the Chief Executive Officer and a director of the Company, beneficially owned an aggregate of 20,392,590 Class B Ordinary Shares (including 18,000,000 Class B Ordinary Shares owned directly by Swee Kheng Chua; 377,775 Class B Ordinary Shares beneficially owned by Ping Ping Lim, Swee Kheng Chua’s spouse; 14,815 Class B Ordinary Shares beneficially owned by Jia Wei Chua, Swee Kheng Chua’s son, as they live in the same household; and 2,000,000 Class B Ordinary Shares beneficially owned by Weilekai Investments Pte Ltd.), which represents approximately 97.62% of the voting power of our outstanding ordinary shares. Following this offering, Mr. Chua will control approximately 97.57% of the voting power of our outstanding ordinary shares if all the Class A Ordinary Shares being offered are sold (or 97.56% of our outstanding voting power if the underwriters’ option to purchase additional shares is exercised in full). Accordingly, if we obtain listing on the Nasdaq Capital Market, we will be a “controlled company” within the meaning of the corporate governance rules of the Nasdaq Capital Market. Controlled companies are exempt from the corporate governance rules of the Nasdaq Capital Market requiring that listed companies have (i) a majority of the board of directors consist of “independent” directors under the listing standards of the Nasdaq Capital Market, (ii) a nominating/corporate governance committee composed entirely of independent directors and a written nominating/corporate governance committee charter meeting the requirements of the Nasdaq Capital Market, and (iii) a compensation committee composed entirely of independent directors and a written compensation committee charter meeting the requirements of the Nasdaq Capital Market. We currently utilize and presently intend to continue to utilize these exemptions. As a result, we may not have a majority of independent directors, our nomination and corporate governance committee and compensation committee may not consist entirely of independent directors and such committees may not be subject to annual performance evaluations. Accordingly, you may not have the same protections afforded to shareholders of companies that are subject to all of the corporate governance requirements of the Nasdaq Capital Market. See “Management.”
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The Offering
| Shares offered | Class A Ordinary Shares, assuming an estimated initial public offering price of $4.00 per share | |
| Ordinary Shares outstanding immediately before the offering | Zero Class A Ordinary Shares and 20,888,886 Class B Ordinary Shares. Our Class B Ordinary Shares will become convertible at the option of the holder into Class A Ordinary Shares on a 1:1 basis following this offering. Class A Ordinary Shares are entitled to one (1) vote per share, and Class B Ordinary Shares are entitled to one hundred (100) vote per share. See “Description of Share Capital” for more information. | |
| Ordinary Shares outstanding immediately after the offering | 1,250,000 Class A Ordinary Shares (or 1,437,500 Class A Ordinary Shares if the underwriters exercise the over-allotment option in full) and 20,888,886 Class B Ordinary Shares. | |
| Over-allotment option | We have granted to the underwriters a 45-day option to purchase from us up to an additional 15% of the Class A Ordinary Shares sold in the offering (187,500 additional shares, assuming an estimated initial public offering price of $4.00 per share) at the initial public offering price, less the underwriting discounts and commissions. | |
| Use of proceeds |
We expect to receive net proceeds of approximately $5 million from this offering, assuming an estimated initial public offering price of $4.00 per share, and no exercise of the underwriters’ over-allotment option, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.
We plan to use the net proceeds of this offering for purchase and rollout of electric vehicular mobile command centers, research and development activities, regional market development and exploration of new markets, product development, working capital and general corporate purposes. See “Use of Proceeds” for more information on the use of proceeds. | |
| Risk factors | Investing in our Class A Ordinary Shares involves a high degree of risk and purchasers of our Class A Ordinary Shares may lose part or all of their investment. See “Risk Factors” for a discussion of factors you should carefully consider before deciding to invest in our Class A Ordinary Shares. |
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| Lock-up | We have agreed with the underwriters, not to, during a period of 180 days after the closing of this offering, (i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any shares of our capital stock or any securities convertible into or exercisable or exchangeable for shares of our capital stock; (ii) file or cause to be filed any registration statement with the Commission relating to the offering of any shares of our capital stock or any securities convertible into or exercisable or exchangeable for shares of our capital stock; (iii) complete any offering of our debt securities, other than entering into a line of credit with a traditional bank, or (iv) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of our capital stock, whether any such transaction described in clause (i), (ii), (iii) or (iv) above is to be settled by delivery of shares of our capital stock or such other securities, in cash or otherwise.
Additionally, our directors, officers and any other holder(s) of our issued and outstanding Ordinary Shares as of the effective date of the Registration Statement (and all holders of securities exercisable for or convertible into Ordinary Shares) entered into “lock-up” agreements pursuant to which such persons and entities shall agree, for a period of 180 days after the closing of this offering, that they shall not offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any shares of our capital stock or any securities convertible into or exercisable or exchangeable for shares of our capital stock, subject to customary exceptions. | |
| Proposed Nasdaq Capital Market trading symbols | We intend to apply to list our Class A Ordinary Shares on the Nasdaq Capital Market under the trading symbols “CIGL”, and we will not close this offering unless the Nasdaq Capital Market has approved our Class A Ordinary Shares for listing. | |
| Transfer Agent | Vstock Transfer, LLC. The address for VStock Transfer, LLC is 18 Lafayette Place, Woodmere, New York, 11598, and the telephone number is 212 828-8436. |
The number of Class A Ordinary Shares outstanding immediately following this offering is based on zero shares outstanding as of the date of this prospectus.
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Summary Consolidated Financial Information
The following selected historical financial information should be read in conjunction with our consolidated financial statements and related notes included elsewhere in the prospectus and the information contained in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” below.
The following summary consolidated financial data as of December 31, 2023 and 2022. This information is derived from our audited consolidated financial statements.
Our financial statements are prepared and presented in accordance with IFRS. Our historical results for any period are not necessarily indicative of our future performance.
| Years
Ended December 31, | ||||||||
| 2023 | 2022 | |||||||
| Consolidated Statements of Profit or Loss and Other Comprehensive Income | $ | $ | ||||||
| Revenue | 10,655,993 | 5,006,345 | ||||||
| Cost of revenue | 7,662,024 | 3,648,637 | ||||||
| Operating expenses | 1,955,820 | (2,291,856 | ) | |||||
| Profit/(Loss) from operations | 1,038,149 | (934,148 | ) | |||||
| Other income (expenses) | 236,911 | 205,201 | ||||||
| Finance costs | (149,626 | ) | (75,033 | ) | ||||
| Net profit/(loss) before tax | 1,125,434 | (803,980 | ) | |||||
| Net profit/(loss) per share – basic and diluted | 9.61 | (7.83 | ) | |||||
| Weighted average shares outstanding – basic and diluted | 100,000 | 100,000 | ||||||
| As of December 31, | ||||||||
| 2023 | 2022 | |||||||
| Consolidated Statements of Financial Position Data | $ | $ | ||||||
| Cash | 956,975 | 441,278 | ||||||
| Current assets | 5,287,321 | 4,050,813 | ||||||
| Total assets | 8,550,581 | 7,103,192 | ||||||
| Current liabilities | 3,514,897 | 3,059,866 | ||||||
| Total liabilities | 5,848,005 | 5,492,869 | ||||||
| Shareholders’ equity | 2,702,577 | 1,610,323 | ||||||
| Total liabilities and shareholders’ equity | 8,550,581 | 7,103,192 | ||||||
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An investment in our Class A Ordinary Shares involves a high degree of risk. Before deciding whether to invest in our Class A Ordinary Shares, you should carefully consider the risks described below, together with all of the other information set forth in this prospectus, including the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operation” and our consolidated financial statements and related notes. If any of these risks actually occur, our subsidiaries’ business, financial condition, results of operations or cash flow could be materially and adversely affected, which could cause the trading price of our Class A Ordinary Shares to decline, resulting in a loss of all or part of your investment. The risks described below are not the only ones that we face. Additional risks not presently known to us or that we currently deem immaterial may also affect us and our subsidiaries’ business. You should only consider investing in our Class A Ordinary Shares if you can bear the risk of losing your entire investment.
Risks Relating to Our Business and Industry
A significant amount of our revenue is generated from our existing long-term customers; thus, our inability to retain and maintain a good relationship with our existing customers can have a material adverse effect on our business and financial results.
As of the date of this prospectus, our main line of revenue is generated from providing security services by monitoring properties, assets and building systems under 24/7 surveillance, ensuring security and business efficiency for our customers. A significant driver of our growth is our recurring revenue business in which customers who contracted to purchase our products and services and are required to pay monthly fees. As such, our ability to maintain our existing significant customer base is important to our long-term profitability. For the fiscal year ended December 31, 2022, Ceva Logistics Singapore Pte Ltd and JTC Corporation each represented approximately 10% of our total net revenues, the loss or material reduction of business, either due to a reduction in demand from one or more of our significant customers, such as industrial and commercial customers, or our inability to timely meet any elevated level of customer demand for various reasons, the lack of success of sales initiatives or changes in customer preferences or loyalties for our products and services related to any such significant customer could have a material adverse impact on our business. This requires that we minimize our rate of customer disconnects, or attrition, which can increase as a result of factors such as problems experienced with our product or service quality, customer service, customer non-pay, unfavorable general economic conditions, and the preference for lower pricing of competitors’ products and services over ours. If attrition rates were to rise significantly, we may be required to accelerate the depreciation and amortization expense for, or to impair, certain of our assets, including with respect to customer relationships, which would cause a material adverse effect on our financial condition and results of operations.
We currently report our financial results under IFRS, which differs in certain significant respect from U.S. generally accepted accounting principles.
We report our financial statements under IFRS. There have been and there may in the future be certain significant differences between IFRS and United States generally accepted accounting principles, or U.S. GAAP, including differences related to revenue recognition, intangible assets, share-based compensation expense, income tax and earnings per share. As a result, our financial information and reported earnings for historical or future periods could be significantly different if they were prepared in accordance with U.S. GAAP. In addition, we do not intend to provide a reconciliation between IFRS and U.S. GAAP unless it is required under applicable law. As a result, you may not be able to meaningfully compare our financial statements under IFRS with those companies that prepare financial statements under U.S. GAAP.
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We have substantial customer concentration, with a limited number of customers accounting for a substantial portion of our recent revenues.
Historically, we have derived a significant portion of our revenues from our top five customers. In the fiscal year ended December 31, 2022, our top five customers accounted for approximately 36% of our revenue. Specifically, our top five customers contributed approximately 10%, 10%, 6%, 5%, and 5% of our total revenue, respectively.
There are inherent risks whenever a large percentage of total revenues are concentrated on a limited number of customers. It is not possible for us to predict the future level of demand for our services that will be generated by these customers. In addition, revenues from these larger customers may fluctuate from time to time based on the commencement and completion of projects, the timing of which may be affected by market conditions or other facts, some of which may be outside of our control. Further, some of our contracts with these larger customers permit them to terminate our services at any time (subject to notice and certain other provisions). If any of these customers experience declining or delayed sales due to market, economic or competitive conditions, we could be pressured to reduce the prices we charge for our services which could have an adverse effect on our margins and financial position, and could negatively affect our revenues and results of operations and/or trading price of our Class A Ordinary Shares. If any of these largest customers terminates our services, such termination would negatively affect our revenues and results of operations and/or trading price of our Class A Ordinary Shares.
If we fail to attract, retain and engage appropriately qualified employees, including employees in key positions, our operations and profitability may be harmed. In addition, changes in market compensation rates may adversely affect our profitability.
One of the key products we offer is a suite of smart security solutions called “I-Guarding Services”. The first of these solutions is our patented IFS, a mobile vehicular platform providing security and facility maintenance services. Our I-Guarding Services offer high-quality and advanced technological products and services for our customers and require a highly trained and engaged workforce. As a result, we rely on our ability to attract, train and retain sufficient numbers of qualified employees. Specifically, because employees become more productive and skillful as they gain experience, market demand for such employees will become more competitive and retaining those individuals is very important for our success, especially as we expand and grow our market. Further, failure to recruit or retain qualified employees in the future may impair our efficiency and effectiveness and our ability to pursue growth opportunities. A significant amount of turnover of our executive team or other employees in key positions, such as Chief Executive Officer, Chief Financial Officer, and Chief Operating Officer may negatively impact our operations. Factors that affect our ability to maintain sufficient numbers of qualified employees include, for example, employee engagement, our reputation, unemployment rates, competition from other employers, availability of qualified personnel and our ability to offer appropriate compensation and benefit packages. If we are unable to attract, train and retain sufficient numbers of qualified employees, our business, financial condition, cash flows or results of operations could be adversely affected.
We operate in a competitive labor market and there is a risk that market increases in compensation and employer-provided benefits could have a material adverse effect on our profitability. We may also be subject to continued market pressure to increase employee hourly wage rates and increased cost pressure on employer-provided benefits. Our need to implement corresponding adjustments within our labor model and compensation and benefit packages could have a material adverse impact to the profitability of our business.
A critical part of our success was driven by introducing and providing innovative and cost-saving security services. If our new products and services are not successful, it could have a material adverse effect on our business.
A critical part of our business success was driven by introducing and providing innovative and cost-saving security services for our customers. As of the date of this prospectus, we are offering products and services including I-Guarding Services, Man-Guarding Services, Consultancy and Training Services, etc. To stay competitive in the market, we believe we must continue to develop and commercialize new products and services that meet the varied and evolving needs of our customers in order to continue to grow our business. While we devote significant effort and resources to the research and development of new products, we cannot guarantee the new products and services we may launch in the future will be well received by our customers. In addition, the speed of development by our competitors and new market entrants is increasing. We cannot provide any assurance that any new product or service will be successfully commercialized in a timely manner, if ever, or, if commercialized, will result in returns greater than our investment. Investment in a product or service could divert our attention and resources from other projects that become more commercially viable in the market. We also cannot provide any assurance that any new product or service will be accepted by the market. In addition, new products and services may present new and difficult technological and intellectual property challenges that may subject us to claims or complaints if our customers experience service failures or other quality issues. To the extent our new products and services are not successful, it could have a material adverse effect on our business, financial condition, cash flow or results of operations.
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The proper and efficient functioning of our computer, data backup, information technology, telecom and processing systems, and our monitoring stations are essential to our business.
Our central monitoring facilities depend on the proper and efficient functioning of our computer, data backup, information technology, telecom and processing systems, and other platforms. If there is a catastrophic event, natural disaster, security breach, negligent or intentional act by an employee or other extraordinary event, the malfunctioning of our information technology system could cause us unable to respond to emergencies on a timely manner. Furthermore, because computer and data backup and processing systems are susceptible to malfunctions and interruptions, we cannot guarantee that we will not experience service failures in the future. A significant or large-scale malfunction or interruption of any computer or data backup and processing system could adversely affect our ability to keep our operations running efficiently and respond to alarm system signals. If a malfunction results in a wider or sustained disruption, it could have a material adverse effect on our reputation, business, financial condition, cash flows or results of operations.
Product defects or shortfalls in customer service may damage our reputation as a high-quality security service provider.
The success of our business depends on our reputation and ability to maintain good relationships with our customers, suppliers, and local regulators, among others. Our reputation may be harmed either through product defects or shortfalls in customer service. Customers generally judge our performance through their interactions with staff at our monitoring and customer care centers, and field installation and service technicians, as well as their day-to-day interactions with our products. Any failure to meet customers’ expectations in such customer service areas could cause an increase in attrition rates or make it difficult to obtain new customers. Any harm to our reputation or customer relationships caused by the actions of our personnel, or third-party product or service providers or any other factors could have a material adverse effect on our business, financial condition, results of operations, and cash flows. In addition, our products and services may contain undetected defects in the software, infrastructure, third-party components or processes. If these solutions fail for any reason, including due to defects in our equipment, software, a carrier outage or user error, we could be subject to liability for such failures and our business could suffer.
As a security service provider, we are exposed to greater risk of liability for employee acts or omissions or system failure, than may be inherent in other businesses.
The nature of the products and services we provide potentially exposes us to greater risks of liability for employee acts or omissions or system failures than may be inherent in other businesses. If customers believe that they incurred losses as a result of our action or inaction, the customers, or their insurers, could in the future bring claims against us. In addition, there can be no assurance that we are adequately insured for these risks. Certain of our insurance policies may limit or prohibit insurance coverage for punitive or certain other types of damages or liability arising from gross negligence. If significant uninsured damages are assessed against us, the resulting liability could have a material adverse effect on our business, financial condition, cash flows or results of operations.
A disruption in the operation of our monitoring facilities or customer care resources could materially adversely affect our business.
A disruption in our ability to provide security monitoring services or otherwise provide ongoing customer care to our customers could have a material adverse effect on our business. A disruption could occur for many reasons, including fire, natural disasters, weather, and the effects of climate change (such as sea level rise, drought, flooding, wildfires, and increased storm severity), health epidemics or pandemics, transmission interruption, extended power outages, human or other error, malicious acts, provider preferences regarding the signals that get transmitted, government actions, war, terrorism, sabotage, or other conflicts, or as a result of disruptions to internal and external networks or third party transmission lines. Monitoring and customer care could also be disrupted by information systems and network-related events or cybersecurity attacks, such as computer hacking, computer viruses, worms, or other malicious software, distributed denial of service attacks, malicious social engineering, or other destructive or disruptive activities that could also cause damage to our properties, equipment, and data. A failure of our back-up procedures or a disruption affecting monitoring facilities could disrupt our ability to provide security monitoring or customer care services to our customers. If we experience such disruptions, we may experience customer dissatisfaction and potential loss of confidence, and liabilities to customers or other third parties, each of which could harm our reputation and impact future revenues. We could also be subject to claims or litigation with respect to losses caused by such disruptions. Our insurance may not be sufficient to fully cover our losses or may not cover a particular event at all. Any such disruptions or outcomes could have a material adverse effect on our business, financial condition, results of operations, and cash flows.
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Our industry is highly competitive.
The markets in which we operate include a large number of participants, including multinational, regional and small, local companies. As we plan to expand beyond the Singaporean market, such as North America, Malaysia, and Australia, we will face increasing competition from internet service providers, large technology companies, singular experience companies, industrial and smart hardware companies, and others that may have greater capital and resources than us. We also face competition from large residential security companies that have or may have greater capital and other resources than we do. Competitors that are larger in scale and have greater resources may benefit from greater economies of scale and other lower costs that permit them to offer more favorable terms to consumers (including lower service costs) than we offer, causing such consumers to choose to enter into contracts with such competitors. These competitors may also benefit from greater name recognition and superior advertising, marketing, promotional and other resources. To the extent that such competitors utilize any competitive advantages in markets where our business is more highly concentrated, the negative impact on our business may increase over time. In addition to potentially reducing the number of new customers we are able to originate, increased competition could also result in increased customers acquisition costs and higher attrition rates that would negatively impact us over time. The benefit offered to larger competitors from economies of scale and other lower costs may be magnified by an economic downturn in which customers put a greater emphasis on lower cost products or services. In addition, we face competition from regional competitors that concentrate their capital and other resources in targeting local markets.
To stay competitive, we focus on quality, innovation, expertise, effective channels to market, breadth of product offering and price. We may be unable to effectively compete on all these bases. If we are unable to anticipate evolving trends in the market or the timing and scale of our competitors’ activities and initiatives, the demand for our products and services could be negatively impacted. In addition, we compete in an industry that is experiencing the convergence of mechanical, electronic and digital products. Technology and innovation play significant roles in the competitive landscape. Our success depends, in part, upon the research, development and implementation of new technologies and products including obtaining, maintaining and enforcing necessary intellectual property protections. Securing and maintaining key partnerships and alliances, recruiting and retaining highly skilled and qualified employee talent and having access to technologies, services, intellectual property and solutions developed by others will play a significant role in our ability to effectively compete. The continual development of new technologies by existing and new competitors, including non-traditional competitors with significant resources, could adversely affect our ability to sustain operating margins and desirable levels of sales volumes. To remain competitive, we must develop new products and service offerings and respond to new technologies in a timely manner.
Our monitoring security facilities will call the police and fire departments when emergencies arise. If the police and fire departments fail or delay responding to our calls, our business and reputation could be adversely affected.
Our monitoring security facilities will call the police and fire departments when emergencies arise. If the police and fire departments fail to respond or delay responding to our calls, our customers may suffer economically and incur physical injuries. In such instances, we may be subject to legal liability by potential lawsuits against us. As a result, our brand reputation would be damaged. Such events could adversely affect our ability to attract and retain customers and could negatively impact our business, financial condition, results of operations, and cash flow.
Our insurance policies may not cover all of our operating risks and a casualty loss beyond the limits of our coverage could negatively impact our business.
We are subject to all of the operating hazards and risks normally incidental to the provision of our products and services and business operations. We maintain insurance policies in such amounts and with such coverage and deductibles as required by law and that we believe are reasonable and prudent. Nevertheless, such insurance may not be adequate to protect us from all the liabilities and expenses that may arise from claims for personal injury, death or property damage arising in the ordinary course of our business and current levels of insurance may not be able to be maintained or available at economical prices. If a significant liability claim is brought against us that is not covered by insurance, then we may have to pay the claim with our own funds, which could have a material adverse effect on our business, financial condition, cash flows or results of operations.
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We will be subject to risks related to currency exchange rate fluctuations as we plan to expand our business internationally, and such risks may have an adverse effect on our business, financial condition, results of operations and cash flows.
We expect sales to non-Singaporean customers to represent a significant portion of our revenues in the future. Although we may enter into currency exchange contracts to reduce our risk related to currency exchange fluctuations, changes in the relative fair values of currencies occur from time to time. We do not hedge against all our currency exposure, and therefore, our results of operations will continue to be susceptible to impacts from currency fluctuations. Further, we may invoice customers in a currency other than its functional currency or may be invoiced by suppliers in a currency other than its functional currency, which could result in unfavorable translation effects on our results of operations.
Shareholder and customer emphasis on environmental, social, and governance responsibility may impose additional costs on us or expose us to new risks.
Our shareholders, customers and employees continue to expect a more proactive response to environmental, social, and governance (“ESG”) matters. We may incur increased costs and may be exposed to new risks responding to these higher expectations. Although we believe that our emphasis on ESG priorities can help drive sustainable business practices that are crucial to our long-term growth, we may face reputational challenges in the event that we are unable to achieve these goals or our ESG standards do not meet those set by certain constituencies. These reputational challenges could have a material adverse effect on our business, financial condition, results of operations and cash flows.
Our strategic initiatives, including enterprise excellence efforts among other significant capital expenditure projects, may not achieve the improvements or financial returns we expect.
We utilize a number of tools to improve efficiency and productivity. Implementation of new processes to our operations could cause disruptions and may prove to be more difficult, costly or time-consuming than expected. Additionally, from time to time we undertake substantial capital projects for varying reasons, such as to increase production capacity or to insource certain products, parts or components. We invest in areas we believe best align with our business strategies and that will optimize future returns. However, there can be no assurance that all our planned enterprise excellence projects or other capital expenditures will be fully implemented, or if implemented, will realize the expected improvements or financial returns.
We may pursue additional business opportunities and may decide to eliminate or acquire certain businesses, which could expose us to additional risks.
We frequently evaluate strategic opportunities both within and outside our existing lines of business. We expect from time to time to pursue additional business opportunities and may decide to eliminate or acquire certain businesses, products or services or expand into new channels or industries. Such acquisitions or dispositions could be material. There are various risks and uncertainties associated with potential acquisitions and divestitures, including: (1) availability of financing; (2) difficulties related to integrating previously separate businesses into a single unit, including product and service offerings, distribution and operational capabilities and business cultures; (3) general business disruption; (4) managing the integration process; (5) diversion of management’s attention from day-to-day operations, assumption of costs and liabilities of an acquired business, including unforeseen or contingent liabilities or liabilities in excess of the amounts estimated; (7) failure to realize anticipated benefits and synergies, such as cost savings and revenue enhancements; (8) potentially substantial costs and expenses associated with acquisitions and dispositions; (9) potential increases in compliance costs; (10) failure to retain and motivate key employees; and (11) difficulties in applying our internal control over financial reporting and disclosure controls and procedures to an acquired business. Any or all of these risks and uncertainties, individually or collectively, could have material adverse effect on our business, financial condition, cash flow or results of operations. We can offer no assurance that any such strategic opportunities will prove to be successful. Additionally, any new product or service offerings could require developmental investments or have higher cost structures than our current arrangements, which could reduce operating margins and require more working capital. Moreover, expansion into any new industry or channel could result in higher compliance costs as we may become subject to laws and regulations to which we are not currently subject.
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From time to time, we are subject to claims for infringing, misappropriating or otherwise violating the intellectual property rights of others and will be subject to such claims in the future, which could have an adverse effect on our business and operations.
We cannot be certain that our products and services or those of third parties that we incorporate into our offerings do not and will not infringe the intellectual property rights of others. Many of our competitors and others may now and in the future have significantly larger and more mature patent portfolios than we have. From time to time, we are subject to claims based on allegations of infringement, misappropriation or other violations of the intellectual property rights of others, including litigation brought by special purpose or so-called “non-practicing” entities that focus solely on extracting royalties and settlements by enforcing intellectual property rights and against whom our patents may therefore provide little or no deterrence or protection.
Regardless of their merits, intellectual property claims divert the attention of our personnel and are often time- consuming and expensive. In addition, to the extent claims against us are successful, we may have to pay substantial monetary damages or discontinue or modify certain products or services that are found to infringe another party’s rights or enter into licensing agreements with costly royalty payments. Defending against claims of infringement, misappropriation or other violations or being deemed to be infringing, misappropriating or otherwise violating the intellectual property rights of others could impair our ability to innovate, develop, distribute and sell our current and planned products and services.
Although third parties may offer a license to their technology or other intellectual property, the terms of any offered license may not be acceptable, and the failure to obtain a license or the costs associated with any license could cause our business, financial condition and results of operations to be materially and adversely affected. In addition, some licenses may be non-exclusive, and therefore our competitors may have access to the same technology licensed to us. If a third party does not offer us a license to its technology or other intellectual property on reasonable terms, or at all, we could be enjoined from continued use of such intellectual property. As a result, we may be required to develop alternative, non-infringing technology, which could require significant time (during which we could be unable to continue to offer our affected products, subscriptions or services), effort, and expense and may ultimately not be successful. Furthermore, a successful claimant could secure a judgment or we may agree to a settlement that prevents us from distributing certain products, providing certain subscriptions or performing certain services that requires us to pay substantial damages, royalties or other fees. Any of these events could harm our business, financial condition and results of operations.
Our inability to acquire necessary intellectual property or adequately protect our intellectual property could adversely affect our business and results of operation.
Our intellectual property, including our patents, trademarks, copyrights, trade secrets and other proprietary rights, constitutes a significant part of our value. Our success depends, in part, on our ability to protect our proprietary technology, brands and other intellectual property against dilution, infringement, misappropriation and competitive pressure by defending our intellectual property rights. To protect our intellectual property rights, we rely on a combination of patent, trademark, copyright and trade secret laws and a combination of confidentiality procedures, contractual provisions and other methods, all of which offer only limited protection. In addition, we make efforts to acquire rights to intellectual property necessary for our operations. However, there can be no assurance that these measures will be successful in any given case, particularly in those countries where the laws do not protect our proprietary rights as rigorously.
We own a portfolio of issued patents that relate to our security product and services utilized in our business. We may file additional patent applications in the future. The process of obtaining patent protection is expensive and time-consuming, and we may not be able to prosecute all necessary or desirable patent applications at a reasonable cost or in a timely manner all the way through to the successful issuance of a patent. We may choose not to seek patent protection for certain innovations and may choose not to pursue patent protection in certain jurisdictions. In addition, issuance of a patent does not guarantee that we have an absolute right to practice the patented invention.
If we fail to acquire the necessary intellectual property rights or adequately protect or assert our intellectual property rights, competitors may dilute our brands or manufacture and market similar products and services or convert our customers, which could adversely affect our market share and results of operations. We may not receive patents or trademarks for all our pending patent and trademark applications, and existing or future patents or licenses may not provide competitive advantages for our products and services. Furthermore, it is possible that our patent applications may not issue as granted patents, that the scope of our issued patents will be insufficient or not have the coverage originally sought, or that our issued patents will not provide us with any competitive advantages. Our competitors may challenge, invalidate or avoid the application of our existing or future intellectual property rights that we obtain or license. In addition, patent rights may not prevent our competitors from developing, using or selling products or services that are similar to or address the same market as our products and services. The loss of protection for our intellectual property rights could reduce the market value of our brands and our products and services, reduce new customers originations or upgrade sales to existing customers, lower our profits, and could have a material adverse effect on our business, financial condition, cash flows or results of operations.
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Our policy is to require our employees that were hired to develop material intellectual property included in our products to execute written agreements in which they assign to us their rights in potential inventions and other intellectual property created within the scope of their employment (or, with respect to consultants and service providers, their engagement to develop such intellectual property), but we cannot assure you that we have adequately protected our rights in every such agreement or that we have executed an agreement with every such party. Finally, in order to benefit from the protection of patents and other intellectual property rights, we must monitor and detect infringement, misappropriation or other violations of our intellectual property rights and pursue infringement, misappropriation or other claims in certain circumstances in relevant jurisdictions, all of which are costly and time-consuming. As a result, we may not be able to obtain adequate protection or to effectively enforce our issued patents or other intellectual property rights.
In addition to patents and registered trademarks, we rely on trade secret rights, copyrights and other rights to protect our unpatented proprietary intellectual property and technology. Despite our efforts to protect our proprietary technologies and our intellectual property rights, unauthorized parties, including our employees, consultants, or service providers, may attempt to copy aspects of our products or obtain and use our trade secrets or other confidential information. We generally enter into confidentiality agreements with our employees and third parties that have access to our material confidential information, and generally limits access to and distribution of our proprietary information and proprietary technology through certain procedural safeguards. These agreements may not effectively prevent unauthorized use or disclosure of our intellectual property or technology, could be breached or otherwise may not provide meaningful protection for our trade secrets and know-how related to the design, manufacture or operation of our products and may not provide an adequate remedy in the event of unauthorized use or disclosure. We cannot assure you that the steps taken by us will prevent misappropriation of our intellectual property or technology or infringement of our intellectual property rights. Competitors may independently develop technologies or products that are substantially equivalent or superior to our solutions or that inappropriately incorporate our proprietary technology into their products or they may hire our former employees who may misappropriate our proprietary technology or misuse our confidential information. In addition, if we expand the geography of our service offerings, the laws of some foreign countries where we may do business in the future do not protect intellectual property rights and technology to the same extent as the laws of Singapore, and these countries may not enforce these laws as diligently as government agencies and private parties in Singapore.
From time to time, legal action by us may be necessary to enforce our patents and other intellectual property rights, to protect our trade secrets, to determine the validity and scope of the intellectual property rights of others or to defend against claims of infringement, misappropriation or invalidity. Such litigation could result in substantial costs and diversion of resources and could negatively affect our business, operating results and financial condition. If we are unable to protect our intellectual property and technology, we may find ourselves at a competitive disadvantage to others who need not incur the additional expense, time and effort required to create the innovative products that have enabled us to be successful to date.
Unauthorized use of our brand names by third parties, and the expenses incurred in developing and preserving the value of our brand names, may materially adversely affect our business.
Our brand names are critical to our success. Unauthorized use of our brand names by third parties may materially adversely affect our business and reputation, including the perceived quality and reliability of our products and services. We rely on patents, trademark law, company brand name protection policies, and agreements with our employees, customers, business partners, and others to protect the value of our brand names. Despite our precautions, we cannot provide assurance that those procedures are sufficiently effective to protect against unauthorized third-party use of our brand names. Third parties may use our brand names to engage in fraudulent activities, including unauthorized telemarketing conducted in our names to induce our existing customers to switch to competing service providers, lead generation activities for competitors, and obtaining personally identifiable or personal financial information. Third parties sometimes use our names and trademarks, or other confusingly similar variations thereof, in other contexts that may impact our brands. We may not be successful in detecting, investigating, preventing, or prosecuting all unauthorized third-party use of our brand names. Future litigation with respect to such unauthorized use could also result in substantial costs and diversion of our resources. These factors could materially adversely affect our reputation, business, financial condition, results of operations, and cash flows.
We may be subject to class action and other lawsuits which may harm our business and results of operations.
We may be subject to litigation involving alleged violations of privacy, consumer protection laws, employment laws, or other matters. In addition, if we successfully launch our initial public offering, we may in the future be subject to securities litigation that may be lengthy and may result in substantial costs and a diversion of management’s attention and resources. Results cannot be predicted with certainty, and an adverse outcome in such litigation could result in monetary damages or injunctive relief that could materially adversely affect our business, financial condition, results of operations, and cash flows.
In addition, we are currently and may in the future become subject to legal proceedings and commercial or contractual disputes other than class actions. These are typically claims that arise in the normal course of business including, without limitation, commercial general liability claims, automobile liability claims, contractual disputes, worker’s compensation claims, labor law and employment claims, personal injuries, property damage, and claims that we infringed on the intellectual property of others. There is a possibility that such claims may have a material adverse effect on our business, financial condition, results of operations, and cash flows that is greater than we anticipate and/or negatively affect our reputation.
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Our prior growth rates in revenues and other operating and financial results should not be considered indicative of our future performance.
Prior growth rates in revenues and other operating and financial results should not be considered indicative of our future performance. Revenue for the years ended December 31, 2023 and 2022 was $10,655,993 and $5,006,345, respectively, representing an increase of 113%. For the fiscal years ended December 31, 2023, and 2022, we incurred a net profit/(loss) of $994,194 and $(803,980), respectively. Our future performance and operating results depend on, among other things: (1) our ability to renew and/or upgrade contracts with existing customers and maintain customers satisfaction with existing customers; (2) our ability to generate new customers; (3) our ability to increase the density of our customers base for existing service locations or continue to expand into new geographic markets; (4) our ability to successfully develop and market new and innovative products and services; (5) the level of product, service and price competition; (6) the degree of saturation in, and our ability to further penetrate, existing markets; (7) our ability to manage growth, revenues, origination or acquisition costs of new customers and attrition rates, the cost of servicing our existing customers and general and administrative costs; and (8) our ability to attract, train and retain qualified employees. If our future operating and financial results suffer as a result of any of the other reasons mentioned above, or any other reasons, there could be a material adverse effect on our business, financial condition, cash flows or results of operations.
The security of our information and technology networks is critical to the safety of our customers and success of our business, and failure to maintain the security of our information and technology networks could damage our brand reputation and adversely affect our business.
We rely on information technology networks and systems, including the internet, to monitor and maintain security of the properties that we serve. If we experience disruption or if there are security breaches of our information and technology networks, we may be unable to detect irregularities and emergencies that could occur on the properties we have contracted to protect. Such failure could expose us to substantial economic and legal liability. In addition, we also process, transmit and store electronic information and, in the normal course of our business, we collect and retain certain information pertaining to our distributors, customers, partners and employees, including personal information.
If security breaches in connection with the delivery of our solutions allow unauthorized third parties to access any of this data or obtain control of our systems, our reputation, business, financial condition, cash flows and results of operations could be harmed.
The legal, regulatory and contractual environment surrounding information security, privacy and credit card fraud is constantly evolving and companies that collect and retain such information are under increasing attack by cyber-criminals around the world. Further, as the regulatory focus on privacy issues continues to increase and worldwide laws and regulations concerning the protection of data and personal information expand and become more complex, these potential risks to our business will intensify. A significant actual or potential theft, loss, fraudulent use or misuse of distributors, customers, employee or other personally identifiable data, whether by third parties or as a result of employee malfeasance or otherwise, non-compliance with our contractual or other legal obligations regarding such data or a violation of our privacy and security policies with respect to such data could result in loss of confidential information, damage to our reputation, early termination of our business relationships, litigation, regulatory investigations or actions and other liabilities or actions against us, including significant fines by governmental authorities, and private claims by companies and individuals for violation of data privacy and security regulations.
In addition, cyber-attacks from computer hackers and cyber criminals and other malicious internet-based activity continue to increase generally, and perpetrators of cyber-attacks may be able to develop and deploy viruses, worms, ransomware, malware, DNS attacks, wireless network attacks, attacks on our cloud networks, phishing attempts, social engineering attempts, distributed denial of service attacks and other advanced persistent threats or malicious software programs that attack our products and services, our networks and network endpoints or otherwise exploit any security vulnerabilities of our products, services and networks. Techniques used to obtain unauthorized access or to sabotage systems change frequently and generally are not recognized until launched against a target. As a result, we may be unable to anticipate these techniques or to implement adequate preventative measures. We cannot be certain that advances in cyber-capabilities or other developments will not compromise or breach the technology protecting the networks that access our platforms and solutions, and we can make no assurance that we will be able to detect, prevent, timely and adequately address or mitigate the negative effects of cyber-attacks or other security breaches. If any one of these risks materializes, our business, financial condition, cash flows or results of operations could be materially and adversely affected.
We must successfully upgrade and maintain our information technology systems.
We rely on various information technology systems to manage our operations. As necessary, we implement modifications and upgrades to these systems, and replace certain of our legacy systems with successor systems with new functionality.
There are inherent costs and risks associated with modifying or changing these systems and implementing new systems, including potential disruption of our internal control structure, substantial capital expenditures, additional administration and operating expenses, retention of sufficiently skilled personnel to implement and operate the new systems, demands on management time and other risks and costs of delays or difficulties in transitioning to new systems or of integrating new systems into our current systems. While management seeks to identify and remediate issues, we can provide no assurance that our identification and remediation efforts will be successful or that we will not encounter additional issues as we complete the implementation of these and other systems. In addition, our information technology system implementations may not result in productivity improvements at a level that outweighs the costs of implementation, or at all. The implementation of new information technology systems may also cause disruptions in our business operations and have an adverse effect on our business, cash flows and operations.
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We rely on third-party providers of telecommunication technologies and services for our monitoring operations.
Our monitoring services depend upon third-party cellular and other telecommunications providers to communicate signals to and from our customers in a timely, cost-efficient and consistent manner. The failure of one or more of these providers to transmit and communicate signals in a timely manner could affect our ability to provide services to our customers. There can be no assurance that third-party telecommunications providers and signal processing centers will continue to transmit and communicate signals to or from our third-party providers and the monitoring stations without disruption. Any such disruption, particularly one of a prolonged duration, could have a material adverse effect on our business. In addition, failure to renew contracts with existing providers or to contract with other providers on commercially acceptable terms or at all may adversely impact our business.
We rely on certain third-party providers of licensed software and services integral to the operations of our business.
Certain aspects of the operation of our business depend on third-party software and service providers. We rely on certain software technology that we license from third parties and use in our products and services to perform key functions and provide critical functionality. With regard to licensed software technology, we are, to a certain extent, dependent upon the ability of third parties to maintain, enhance or develop their software and services on a timely and cost-effective basis, to meet industry technological standards and innovations to deliver software and services that are free of defects or security vulnerabilities, and to ensure their software and services are free from disruptions or interruptions. Further, these third-party services and software licenses may not always be available to us on commercially reasonable terms or at all.
If our agreements with third-party software or services vendors are not renewed or the third-party software or services become obsolete, fail to function properly, are incompatible with future versions of our products or services, are defective or otherwise fail to address our needs, there is no assurance that we would be able to replace the functionality provided by the third-party software or services with software or services from alternative providers. Any of these factors could have a material adverse effect on our financial condition, cash flows or results of operations.
The loss or changes to our senior management could disrupt our business.
Competition for senior management talent having security experience has increased. Factors that impact our ability to attract and retain senior management include compensation and benefits and our successful reputation as a top provider in these industries. Our success partly depends on our senior management and key employees’ ability to effectively implement our business strategies and to continue to identify and grow talent through our annual strategic talent planning process. In addition, the success of each of our segments depends on a highly qualified leader with relevant industry and operational experience, as well as its entire management team. The unexpected loss of any member of our senior management team and the related loss of their knowledge of products, offerings, and industry experience, and the difficulty of quickly finding qualified senior management talent to replace any such loss, could have a material adverse effect on our business, financial condition, results of operations, and cash flows.
We may be adversely affected by global economic and political instability.
As we seek to continue to expand our business, our overall performance will depend in part on worldwide economic and geopolitical conditions. Economies domestically and internationally have been affected from time to time by falling demand for a variety of goods and services, restricted credit, poor liquidity, reduced corporate profitability, employment pressures in services sectors, volatility in credit, equity and foreign exchange markets, bankruptcies and outbreaks of variants of COVID-19, as well as war between Russia and Ukraine, conflict between Israel and Gaza, terrorist activity, political or social unrest, civil strife and other geopolitical uncertainty, and the resulting impact on business continuity and travel, supply chain disruptions, inflation, security issues, and overall uncertainty with respect to the economy, including with respect to tariff and trade issues. To the extent that inflationary pressures and other global factors lead to an economic recession, demand for our solutions, our business and financial condition could be negatively impacted.
On February 24, 2022, Russian military forces invaded Ukraine, and continued conflict and disruption in the region is likely. Although the length, impact and outcome of the ongoing military conflict in Ukraine is highly unpredictable, this conflict could lead to significant market and other disruptions, including significant volatility in commodity prices and supply of energy resources, instability in financial markets, supply chain interruptions, political and social instability, changes in consumer or purchaser preferences as well as an increase in cyberattacks and espionage.
On October 7, 2023, the Palestinian Sunni Islamist group Hamas (a U.S.-designated foreign terrorist organization, or FTO) led surprise attacks against Israel from the Gaza Strip by land, sea, and air. The assault came on a Jewish holiday, 50 years after the Egypt-Syria surprise attack that sparked the 1973 Yom Kippur War. The attacks’ scope and lethality against Israel have no precedent in the 16 years Hamas has controlled Gaza, and the nature of the violence stunned Israelis. Since the attack, Israel’s Prime Minister Benjamin Netanyahu has declared war against Hamas. Israel has initiated air strikes and reportedly localized raids, but the questions of whether it will launch a ground assault, and, if it does, how extensive such a ground assault might be, loom large. The Israel Defense Forces has said it plans a wide-ranging offensive against Hamas, including coordinated attacks by land, air, and sea.
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We are actively monitoring the Russia-Ukraine and Israel-Gaza situations and assessing their impact on our business, but to date have not experienced any material impact. We have no way to predict the progress or outcome of the conflict in these afflicted countries, and any resulting government reactions, are rapidly developing and beyond our control. The extent and duration of the military action, sanctions and resulting market disruptions could be significant and could potentially have a substantial impact on the global economy and our business for an unknown period of time. As the adverse effects of this conflict continue to develop and potentially spread, both in Europe and Middle East and through the rest of the world, our customers, and customer behavior, may be negatively impacted, which could negatively affect sales and sales cycles and overall demand for our products and services. Further or prolonged impacts on the global economy could also cause businesses to curtail business expenses, which could hinder our ability to attract new customers or result in a decrease in revenue. It is not possible to predict the ultimate broader consequences of those conflict and any of the abovementioned factors could have a material adverse effect on our business, financial condition and results of operations, particularly to the extent the conflict escalates to involve additional countries, further economic sanctions and wider military conflict. Any such disruptions could also magnify the impact of other risks described in this prospectus.
In addition, inflation rates globally have increased rapidly in the past several years, which may result in decreased demand for our products and services, increases in our operating costs including our labor costs, constrained credit and liquidity, and volatility in financial markets. There continues to be uncertainty in the changing market and economic conditions, including the possibility of additional measures that could be taken by central banks and other government agencies. All of the abovementioned factors could have an adverse impact on our financial results.
The outbreak of the COVID-19 pandemic has and may continue to adversely affect the Company’s business and results of operations.
The rapid and continued spread of COVID-19, and the measures taken to slow its spread, have adversely affected the Company’s business and financial results. On May 5, 2023, the WHO ended the emergency status for COVID-19. However, COVID-19 is still a significant public health problem and may continue to challenge health systems worldwide in the long term. The COVID-19 pandemic negatively impacted our company’s business. During the pandemic, the demand for our services changed significantly. We experienced a decrease in the demand for our niche technology-integrated services, while more customers sought traditional security guards. Currently, COVID-19 no longer poses a threat to our business, and we have adapted our technology to meet the needs that arose during the pandemic.
Despite the Company’s efforts to manage these impacts and the positive growth in our revenue, due to the evolving situation with COVID-19, the effect on the Company’s operational and financial performance will depend on future developments, all of which are uncertain and difficult to predict and in the future may have material adverse effects on the Company’s business, financial condition, results of operations, liquidity and cash flows. Such developments may include, but are not limited to, the spread and future resurgences of the virus, the severity and duration of the outbreak and the severity and duration of the resulting impact on the economy. Even after the COVID-19 pandemic has subsided, we may experience impacts on the Company’s business as a result of any economic recession, downturn or volatility that has occurred or may occur in the future. The COVID-19 pandemic may also have the effect of heightening many of the other risks described below, including those related to ability to service indebtedness and share price fluctuation.
Risks Relating to Regulatory Compliance
Increasing legislative and regulatory initiatives on cybersecurity and data privacy regulations could adversely impact our business and financial results.
During our operations, we gather, process, transmit and store sensitive information, including personal, payment, credit and other confidential and private information. We may use some of this information for operational and marketing purposes while operating our business.
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As we plan to enter North America, Malaysia and Australia markets, our collection, retention, transfer and use of this information will be governed by Singaporean and foreign laws and regulations relating to privacy, data protection and information security, industry standards and protocols, or it may be asserted that such industry standards or protocols apply to us. The regulatory framework for privacy and information security issues worldwide is rapidly evolving and is likely to remain uncertain for the foreseeable future. For example, in the United States, federal and various state and provincial governmental bodies and agencies have adopted or are considering adopting laws and regulations limiting, or laws and regulations regarding the collection, distribution, use, disclosure, storage, and security of certain categories of information. These new laws and regulations may also impact the way we design and develop new technology solutions. Some of these requirements include obligations of companies to notify individuals of security breaches involving particular personal information, which could result from exploitation of a vulnerability in our systems or services or breaches experienced by our service providers and/or partners. For example, in the State of California, the California Consumer Privacy Act (“CCPA”) provides for enhanced consumer protections for California residents, a private right of action for data breaches of certain personal information and statutory fines and damages for such data breaches or other CCPA violations, as well as a requirement of “reasonable” cybersecurity. In addition, in November 2020, California voters passed the California Privacy Rights and Enforcement Act of 2020, which amends and expands the CCPA with additional data privacy compliance requirements and establishes a regulatory agency dedicated to enforcing those requirements. We are also subject to state and federal laws and regulations regarding telemarketing and other telephonic communications and state and federal laws regarding unsolicited commercial emails, as well as regulations relating to automated telemarketing calls, texts or SMS messages.
Many jurisdictions have established their own data security and privacy legal and regulatory frameworks with which we must comply to the extent our operations expand into these geographies or the laws and regulations in these frameworks otherwise may be interpreted to apply to us. Laws and regulations in these jurisdictions apply broadly to the collection, use, storage, disclosure and security of data that identifies or may be used to identify or locate an individual, such as names, email addresses and, in some jurisdictions, internet protocol addresses. We are also bound by contractual requirements relating to privacy, data protection and information security, and may agree to additional contractual requirements addressing these matters from time to time.
Our compliance with these various requirements increases our operating costs, and additional laws, regulations, standards or protocols (or new interpretations of existing laws, regulations, standards or protocols) in these areas may further increase our operating costs, require us to take on additional privacy and data security related obligations in our contracts and adversely affect our ability to effectively market our products and services. In view of new or modified legal obligations relating to privacy, data protection or information security, or any changes in their interpretation, we may find it necessary or desirable to fundamentally change our business activities and practices or to expend significant resources to modify our products and services and otherwise adapt to these changes. We may be unable to make such changes and modifications in a commercially reasonable manner or at all, and our ability to develop new services and features could be limited.
Further, our failure or perceived failure to comply with any of these laws, regulations, standards, protocols or other obligations could result in a loss of customer data, fines, sanctions and other liabilities and additional restrictions on our collection, transfer or use of customer data. In addition, our failure to comply with any of these laws, regulations, standards, protocols or other obligations could result in a material adverse effect on our reputation, customer attrition, new customer origination, financial condition, cash flows or results of operations.
As we expand globally, we will be subject to more regulation by various governmental agencies.
Our expansion plan includes entering the security service markets in North America, Malaysia, Australia, and more. As we expand our business into other countries, we will be subject to regulation by various federal, state, local and foreign governmental agencies, including, but not limited to, Personal Data Protection Act 2012 (PDPA), Infocomm Media Development Authority (IMDA), Regulations on Labor, Road Traffic Act 1961 and Workplace Safety and Health Act 2006.
Apart from the Private Security Industry Act 2007 and its subsidiary legislation, our business operations are not subject to any special legislation or regulatory controls other than those generally applicable to companies and businesses incorporated and/or operating in Singapore.
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Changes in laws that apply to us could result in increased regulatory requirements and compliance costs which could harm our business, financial condition, cash flows and results of operations. In certain jurisdictions, regulatory requirements may be more stringent than in Singapore. Noncompliance with applicable regulations or requirements could subject us to whistleblower complaints, investigations, sanctions, settlements, mandatory product recalls, enforcement actions, disgorgement of profits, fines, damages, civil and criminal penalties or injunctions, suspension or debarment from contracting with certain governments or other customers, the loss of export privileges, multi-jurisdictional liability, reputational harm, and other collateral consequences. If any governmental or other sanctions are imposed, or if we do not prevail in any possible civil or criminal litigation, our business, financial condition, cash flows and results of operations could be materially harmed. In addition, responding to any action will likely result in a materially significant diversion of management’s attention and resources and an increase in defense costs and other professional fees.
Risks Relating to This Offering and Ownership of Our Class A Ordinary Shares
Our dual class voting structure has the effect of concentrating the voting control to holders of our Class B Ordinary Shares, which will limit or preclude your ability to influence corporate matters, and your interests may conflict with the interests of these shareholders. It may also adversely affect the trading market for our Class A Ordinary Shares due to exclusion from certain stock market indices and depress the trading price of our Class A Ordinary Shares.
We adopted a dual class voting structure such that our ordinary shares consist of Class A Ordinary Shares and Class B Ordinary Shares. Class B Ordinary Shares are entitled to 100 votes per share on proposals requiring or requesting shareholder approval, and Class A Ordinary Shares are entitled to one vote on any such matter. Each Class B Ordinary Share is convertible into one Class A Ordinary Share at any time by the holder thereof. Class A Ordinary Shares are not convertible into Class B Ordinary Shares under any circumstances. Other than as to voting and conversion rights, Class B Ordinary Shares and Class A Ordinary Shares have the same rights and rank pari passu with one another, including the rights to dividends and other capital distribution. In this offering, we are offering Class A Ordinary Shares.
Following this offering, taking into consideration the Class A Ordinary Shares expected to be offered hereby, even if 100% of such shares are sold, Swee Kheng Chua will retain controlling voting power in the Company based on having approximately 97.57% of the combined voting power of our outstanding ordinary shares. Because of the one hundred-to-one voting ratio between our Class B and Class A Ordinary Shares, our founders, some of whom are also some of our officers and directors, will have the ability to control the outcome of most matters requiring shareholder approval, including:
| ● | the election of our Board and, through our Board, decision making with respect to our business direction and policies, including the appointment and removal of our officers; |
| ● | mergers, de-mergers and other significant corporate transactions; |
| ● | changes to our constitution; and |
| ● | our capital structure. |
This voting control and influence may discourage transactions involving a change of control of the Company, including transactions in which you, as a holder of our Class A Ordinary Shares, might otherwise receive a premium for your shares.
S&P Dow Jones and FTSE Russell have implemented changes to their eligibility criteria for inclusion of shares of public companies on certain indices, including the S&P 500, namely, to exclude companies with multiple classes of ordinary shares from being added to such indices. In addition, several shareholder advisory firms have announced their opposition to the use of multiple class structures. As a result, the dual class structure of our ordinary shares may prevent the inclusion of the Class A Ordinary Shares in such indices and may cause shareholder advisory firms to publish negative commentary about our corporate governance practices or otherwise seek to cause us to change our capital structure. Any such exclusion from indices could result in a less active trading market for our Class A Ordinary Shares. Any actions or publications by shareholder advisory firms critical of our corporate governance practices or capital structure could also adversely affect the value of the Class A Ordinary Shares. As a result, the market price of our Class A Ordinary Shares could be materially adversely affected.
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There was no public market for our Class A Ordinary Shares prior to this offering, and if an active trading market does not develop, you may not be able to resell our at or above the price you paid, or at all.
Prior to this initial public Offering, there has been no public market for our Class A Ordinary Shares. We expect to apply for our Class A Ordinary Shares to be listed on the Nasdaq Capital Market. There is no guarantee that our application will be approved by the Nasdaq Capital Market. If an active trading market for our Class A Ordinary Shares does not develop after this Offering, the market price and liquidity of our Class A Ordinary Shares will be materially adversely affected. You may not be able to sell any Class A Ordinary Shares that you purchase at or above the public offering price. Accordingly, investors should be prepared to face a complete loss of their investment.
Our lack of effective internal controls over financial reporting may affect our ability to accurately report our financial results or prevent fraud, which may affect the market for and price of our Class A Ordinary Shares.
To implement Section 404 of the Sarbanes-Oxley Act of 2002, the SEC adopted rules requiring public companies to include a report of management on the company’s internal control over financial reporting. Prior to filing the registration statement of which this prospectus is a part, we were a private company with limited accounting personnel and other resources for addressing our internal control over financial reporting. In connection with the audits of our consolidated financial statements as of December 31, 2022, we and our independent registered public accounting firms identified certain material weaknesses in our internal control over financial reporting PCAOB of the United States. A “material weakness” is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.
We intend to implement measures designed to improve our internal control over financial reporting to address the underlying causes of these material weaknesses, including i) hiring more qualified staff to fill up the key roles in the operations; ii) setting up a financial and system control framework with formal documentation of polices and controls in place; and iii) appointing independent directors, establishing an audit committee and strengthening corporate governance.
We will be subject to the requirement that we maintain internal controls and that management perform periodic evaluation of the effectiveness of the internal controls. Effective internal control over financial reporting is important to prevent fraud. As a result, our business, our financial condition, results of operations and prospects, as well as the market for and trading price of our Class A Ordinary Shares, may be materially and adversely affected if we do not have effective internal controls. Before this offering, we were a private company with limited resources. As a result, we may not discover any problems in a timely manner and current and potential shareholders could lose confidence in our financial reporting, which would harm our business and the trading price of our Class A Ordinary Shares. The absence of internal controls over financial reporting may inhibit investors from purchasing our Class A Ordinary Shares and may make it more difficult for us to raise funds in a debt or equity financing.
Nasdaq Capital Market may apply additional and more stringent criteria for our initial and continued listing because our insiders will hold a large portion of our listed securities.
Nasdaq Listing Rule 5101 provides Nasdaq with broad discretionary authority over the initial and continued listing of securities in Nasdaq and Nasdaq may use such discretion to deny initial listing, apply additional or more stringent criteria for the initial or continued listing of particular securities, or suspend or delist particular securities based on any event, condition, or circumstance that exists or occurs that makes initial or continued listing of the securities on Nasdaq inadvisable or unwarranted in the opinion of Nasdaq, even though the securities may meet all enumerated criteria for initial or continued listing on Nasdaq. In addition, Nasdaq has used its discretion to deny initial or continued listing or to apply additional and more stringent criteria in the instances, including, but not limited to: (i) where the company engaged an auditor that has not been subject to an inspection by PCAOB, an auditor that PCAOB cannot inspect, or an auditor that has not demonstrated sufficient resources, geographic reach, or experience to adequately perform the company’s audit; (ii) where the company planned a small public offering, which would result in insiders holding a large portion of the company’s listed securities, and Nasdaq had concerns that the offering size was insufficient to establish the company’s initial valuation, and there would not be sufficient liquidity to support a public market for the company; and (iii) where the company did not demonstrate sufficient nexus to the U.S. capital market, including having no U.S. shareholders, operations, or members of the board of directors or management. Our initial public offering will be relatively small. We estimate that there should not be more than 1% of the total issued capital in public hands after the listing. The insiders of our Company will still hold a large portion of the Company’s listed securities following the consummation of the Offering. Therefore, we may be subject to the additional and more stringent criteria of Nasdaq for our initial and continued listing, which might cause delay or even denial of our listing application.
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As a controlled company, we are not subject to all of the corporate governance rules of the Nasdaq Capital Market.
The “controlled company” exception to the rules of the Nasdaq Capital Market provides that a company of which more than 50% of the voting power is held by an individual, group or another company, a “controlled company,” need not comply with certain requirements of the Nasdaq Capital Market corporate governance rules. As of the date of this prospectus, Swee Kheng Chua, the Chief Executive Officer and a director of the Company, beneficially owned an aggregate of 20,392,590 Class B Ordinary Shares (including 18,000,000 Class B Ordinary Shares owned directly by Swee Kheng Chua; 377,775 Class B Ordinary Shares beneficially owned by Ping Ping Lim, Swee Kheng Chua’s spouse; 14,815 Class B Ordinary Shares beneficially owned by Jia Wei Chua, Swee Kheng Chua’s son, as they live in the same household; and 2,000,000 Class B Ordinary Shares beneficially owned by Weilekai Investments Pte Ltd.), which represents approximately 97.62% of the voting power of our outstanding ordinary shares. Following this offering, Mr. Chua will control approximately 97.57% of the voting power of our outstanding ordinary shares if all the Class A Ordinary Shares being offered are sold (or 97.56% of our outstanding voting power if the underwriters’ option to purchase additional shares is exercised in full). If we obtain listing on the Nasdaq Capital Market, we will be a “controlled company” within the meaning of the corporate governance rules of the Nasdaq Capital Market. Controlled companies are exempt from the corporate governance rules of the Nasdaq Capital Market requiring that listed companies have (i) a majority of the board of directors consist of “independent” directors under the listing standards of the Nasdaq Capital Market, (ii) a nominating/corporate governance committee composed entirely of independent directors and a written nominating/corporate governance committee charter meeting the requirements of the Nasdaq Capital Market, and (iii) a compensation committee composed entirely of independent directors and a written compensation committee charter meeting the requirements of the Nasdaq Capital Market. We currently utilize and presently intend to continue to utilize these exemptions. As a result, we may not have a majority of independent directors, our nomination and corporate governance committee and compensation committee may not consist entirely of independent directors and such committees may not be subject to annual performance evaluations. Accordingly, you may not have the same protections afforded to shareholders of companies that are subject to all of the corporate governance requirements of the Nasdaq Capital Market. See “Management.”
A significant portion of our total outstanding shares are restricted from immediate resale but may be sold into the market in the near future. This could cause the market price of our Class A Ordinary Shares to drop significantly, even if our business is doing well.
Sales of a substantial number of our Class A Ordinary Shares in the public market could occur at any time. These sales, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of our Class A Ordinary Shares. After this offering, we will have 1,250,000 Class A Ordinary Shares outstanding based on the number of shares outstanding as of the date of this prospectus. These Class A Ordinary Shares to be sold in this offering, will be freely tradable, without restriction, in the public market immediately following this offering. All remaining shares are currently restricted as a result of securities laws or lock-up arrangements but will be able to be sold after the offering as described in the “Shares Eligible for Future Sale” section of this prospectus.
The initial public offering price for our Class A Ordinary Shares may not be indicative of prices that will prevail in the trading market and such market prices may be volatile.
The initial public offering price does not bear any relationship to our earnings, book value or any other indicia of value. We cannot assure you that the market price of our Class A Ordinary Shares will not decline significantly below the initial public offering price. The financial markets in the United States and other countries have experienced significant price and volume fluctuations in the last few years. Volatility in the price of our Class A Ordinary Shares may be caused by factors outside of our control and may be unrelated or disproportionate to changes in our results of operations.
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You will experience immediate and substantial dilution in the net tangible book value of the Class A Ordinary Shares purchased.
The initial public offering price of our Class A Ordinary Shares is substantially higher than the (pro forma) net tangible book value per share of our Class A Ordinary Shares. Consequently, when you purchase our Class A Ordinary Shares in the Offering and upon completion of the Offering, you will incur immediate dilution of $3.68 per share, assuming an estimated initial public offering price of $4.00. In addition, you may experience further dilution to the extent that additional Class A Ordinary Shares are issued upon exercise of outstanding options we may grant from time to time.
The market price of our Class A Ordinary Shares may be volatile and may trade at prices below the initial public offering price.
The stock market in general, and the market for equities of new public companies in particular, have been highly volatile. As a result, the market price of our Class A Ordinary Shares is likely to be similarly volatile, and investors in our Class A Ordinary Shares may experience a decrease, which could be substantial, in the value of their Class A Ordinary Shares, including decreases unrelated to our operating performance or prospects, or a complete loss of their investment. The price of our Class A Ordinary Shares could be subject to significant fluctuations in response to a number of factors, including those listed elsewhere in this “Risk Factors” section and others such as:
| ● | variations in our operating performance and the performance of our competitors; |
| ● | actual or anticipated fluctuations in our quarterly or annual operating results; |
| ● | changes in our revenues or earnings estimates or recommendations by securities analysts; |
| ● | publication of research reports by securities analysts about us or our competitors in our industry; |
| ● | failure of securities analysts to initiate or maintain coverage of us, changes in ratings and financial estimates and the publication of other news by any securities analysts who follow our company, or our failure to meet these estimates or the expectations of investors; |
| ● | our failure or the failure of our competitors to meet analysts’ projections or guidance that we or our competitors may give to the market; |
| ● | additions or departures of key personnel; |
| ● | strategic decisions by us or our competitors, such as acquisitions, divestitures, spin-offs, joint ventures, strategic investments or changes in business strategy; |
| ● | announcement of technological innovations by us or our competitors; |
| ● | the passage of legislation, changes in interpretations of laws or other regulatory events or developments affecting us; |
| ● | speculation in the press or investment community; |
| ● | changes in accounting principles; |
| ● | terrorist acts, acts of war or periods of widespread civil unrest (including the Ukraine-Russia and Israel-Gaza conflicts); |
| ● | health pandemics (including COVID-19); |
| ● | changes in general market and economic conditions; |
| ● | changes or trends in our industry; |
| ● | investors’ perception of our prospects; and |
| ● | adverse resolution of any new or pending litigation against us. |
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In the past, securities class action litigation has often been initiated against companies following periods of volatility in their stock price. This type of litigation could result in substantial costs and divert our management’s attention and resources and could also require us to make substantial payments to satisfy judgments or to settle or defend litigation.
Certain recent initial public offerings of companies with public floats comparable to our anticipated public float have experienced extreme volatility that was seemingly unrelated to the underlying performance of the respective company. We may experience similar volatility, which may make it difficult for prospective investors to assess the value of our Class A Ordinary Shares.
In addition to the risk factor “The market price of our Class A Ordinary Shares may be volatile and may trade at prices below the initial public offering price,” addressed above, our Class A Ordinary Shares may be subject to extreme volatility that is seemingly unrelated to the underlying performance of our business. Recently, companies with comparable public floats and initial public offering sizes have experienced instances of extreme stock price run-ups followed by rapid price declines, and such stock price volatility was seemingly unrelated to the respective company’s underlying performance. Should our Class A Ordinary Shares experience run-ups and declines that are seemingly unrelated to our actual or expected operating performance and financial condition or prospects, prospective investors may have difficulty assessing the rapidly changing value of our Class A Ordinary Shares. In addition, investors of shares of our Class A Ordinary Shares may experience losses, which may be material, if the price of our Class A Ordinary Shares declines after this offering or if such investors purchase shares of our Class A Ordinary Shares prior to any price decline.
We do not intend to pay dividends after listing our Class A Ordinary Shares on Nasdaq Capital Market.
We currently intend to retain all remaining funds and future earnings, if any, for the operations and expansion of the business of our operating subsidiaries and do not anticipate declaring or paying any further dividends after listing our Class A Ordinary Shares on Nasdaq Capital Market. Any future determination related to our dividend policy will be made at the discretion of our board of directors after considering our financial condition, results of operations, capital requirements, contractual requirements, business prospects and other factors the board of directors deems relevant and will be subject to the restrictions contained in any future financing instruments.
If securities or industry analysts do not publish research or reports about our business, or if they publish a negative report regarding our Class A Ordinary Shares, the price of our Class A Ordinary Shares and trading volume could decline.
The trading market for our Class A Ordinary Shares may depend in part on the research and reports that industry or securities analysts publish about us. We do not have any control over these analysts. If one or more of the analysts who cover us downgrades us, the price of our Class A Ordinary Shares would likely decline. If one or more of these analysts ceases coverage of our Company or fails to regularly publish reports on us, we could lose visibility in the financial markets, which could cause the price of our Class A Ordinary Shares and the trading volume to decline.
You may face difficulties in protecting your interests, and your ability to protect your rights through U.S. courts may be limited, because we are incorporated under British Virgin Islands law.
We are a company incorporated under the laws of the British Virgin Islands. Our corporate affairs are governed by our Memorandum and Articles, the BVI Act and the common law of the British Virgin Islands. The rights of shareholders to take action against our directors, actions by our minority shareholders and the fiduciary duties of our directors to us under the British Virgin Islands law are to a large extent governed by the common law of the British Virgin Islands. The common law of the British Virgin Islands is derived in part from comparatively limited judicial precedent in the British Virgin Islands as well as from the common law of England, the decisions of whose courts are of persuasive authority, but are not binding, on a court in the British Virgin Islands. The rights of our shareholders and the fiduciary duties of our directors under the British Virgin Islands law are not as clearly established as they would be under statutes or judicial precedent in some jurisdictions in the United States. In particular, the British Virgin Islands has a less developed body of securities laws than the United States. Some U.S. states, such as Delaware, have more fully developed and judicially interpreted bodies of corporate law than the British Virgin Islands. In addition, British Virgin Islands companies may not have standing to initiate a shareholder derivative action in a federal court of the United States.
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Certain corporate governance practices in the British Virgin Islands, where our holding company was incorporated, differ significantly from requirements for companies incorporated in other jurisdictions such as the United States. We can rely on home country practice with respect to our corporate governance after we complete this offering. If we choose to follow the British Virgin Islands’ practice in the future, our shareholders may be afforded less protection than they otherwise would under rules and regulations applicable to U.S. domestic issuers.
As a result of the foregoing, public shareholders may have more difficulties in protecting their interests in the face of actions taken by our management, or members of our board of directors than they would as public shareholders of a company incorporated in the United States.
If we cannot satisfy, or continue to satisfy, the initial listing requirements and other rules of NASDAQ Capital Market, our Class A Ordinary Shares may not be listed or may be delisted, which could negatively impact the price of our Class A Ordinary Shares and your ability to sell them.
We will seek to have our Class A Ordinary Shares approved for listing on the Nasdaq Capital Market upon consummation of this offering. We cannot assure you that we will be able to meet those initial listing requirements at that time. Even if our Class A Ordinary Shares are listed on the Nasdaq Capital Market, we cannot assure you that our Class A Ordinary Shares will continue to be listed on the Nasdaq Capital Market.
In addition, following this Offering, in order to maintain our listing on the Nasdaq Capital Market, we will be required to comply with certain rules of the Nasdaq Capital Market, including those regarding minimum shareholders’ equity, minimum share price and certain corporate governance requirements. Even if we initially meet the listing requirements and other applicable rules of the Nasdaq Capital Market, we may not be able to continue to satisfy these requirements and applicable rules. If we are unable to satisfy the Nasdaq Capital Market criteria for maintaining our listing, our Class A Ordinary Shares could be subject to delisting.
If the Nasdaq Capital Market delists our Class A Ordinary Shares from trading, we could face significant consequences, including:
| ● | a limited availability for market quotations for our Class A Ordinary Shares; |
| ● | reduced liquidity with respect to our Class A Ordinary Shares; |
| ● | a determination that our Ordinary Share is a “penny stock,” which will require brokers trading in our Ordinary Share to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our Ordinary Share; |
| ● | limited amount of news and analyst coverage; and |
| ● | a decreased ability to issue additional securities or obtain additional financing in the future. |
We will incur significant costs as a result of operating as a public company, and our management will devote substantial time to new compliance initiatives. We may fail to comply with the rules that apply to public companies, including Section 404 of the Sarbanes-Oxley Act of 2002, or Section 404, which could result in sanctions or other penalties that could materially and adversely affect our business, financial condition, results of operations and prospects.
We will incur significant legal, accounting and other expenses as a public company, including costs resulting from public company reporting obligations under the Exchange Act and regulations regarding corporate governance practices. The listing requirements of the Nasdaq Capital Market, and the rules of the SEC require that we satisfy certain corporate governance requirements relating to director independence, filing annual and interim reports, stockholder meetings, approvals and voting, soliciting proxies, conflicts of interest and a code of conduct. Our management and other personnel will need to devote a substantial amount of time to ensure that we comply with all of these requirements. Moreover, the reporting requirements, rules and regulations will increase our legal and financial compliance costs and will make some activities more time-consuming and costly. Any changes we make to comply with these obligations may not be sufficient to allow us to satisfy our obligations as a public company on a timely basis, or at all. These reporting requirements, rules and regulations, coupled with the increase in potential litigation exposure associated with being a public company, could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors or board committees or to serve as executive officers, or to obtain certain types of insurance, including directors’ and officers’ insurance, on acceptable terms.
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After this offering, we will be subject to Section 404 and the related rules of the SEC, which generally require our management and independent registered public accounting firm to report on the effectiveness of our internal control over financial reporting. Beginning with the second annual report that we will be required to file with the SEC, Section 404 requires an annual management assessment of the effectiveness of our internal control over financial reporting. However, for so long as we remain an emerging growth company as defined in the JOBS Act, we intend to take advantage of certain exemptions from various reporting requirements that are applicable to public companies that are not emerging growth companies, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404. Once we are no longer an emerging growth company or, if prior to such date, we opt to no longer take advantage of the applicable exemption, we will be required to include an opinion from our independent registered public accounting firm on the effectiveness of our internal control over financial reporting.
During the course of our review and testing, we may identify deficiencies and be unable to remediate them before we must provide the required reports. In connection with the audits of our consolidated financial statements for the year ended December 31, 2022, we identified material weaknesses in our internal control over financial reporting as well as other control deficiencies for the above-mentioned period. As defined in the standards established by the PCAOB, a “material weakness” is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. We intend to implement measures designed to improve our internal control over financial reporting to address the underlying causes of these material weaknesses. In addition, as a public company we will be required to file accurate and timely quarterly and annual reports with the SEC under the Exchange Act. In order to report our results of operations and financial statements on an accurate and timely basis, we will depend in part on third parties to provide timely and accurate notice of their costs to us. Any failure to report our financial results on an accurate and timely basis could result in sanctions, lawsuits, delisting of our shares from the Nasdaq Capital Market or other adverse consequences that would materially and adversely affect our business, financial condition, results of operations and prospects.
We have broad discretion in the use of the net proceeds from this offering and we may use these proceeds in ways with which you may not agree.
We intend to use the proceeds from this offering for resource development activities including, possibly, regionally market development, Research & Development, Electric Vehicle fleet conversion and expansion, product development and general corporate purposes. However, our management will have broad discretion in the application of the net proceeds, including for any of the purposes described in the section entitled “Use of Proceeds,” and you will not have the opportunity as part of your investment decision to assess whether the net proceeds are being used appropriately. You must rely on the judgment of our management regarding the application of the net proceeds of this offering. The net proceeds may be used for corporate or other purposes with which you do not agree or that do not improve our profitability or increase our share price. Because of the number and variability of factors that will determine our use of the net proceeds from this offering, their ultimate use may vary substantially from their currently intended use. The net proceeds from this offering may also be placed in investments that do not produce income or that lose value. The failure by our management to apply these funds effectively could harm our business.
There can be no assurance that we will not be deemed a passive foreign investment company, or PFIC, for U.S. federal income tax purposes for any taxable year, which could result in adverse U.S. federal income tax consequences to U.S. holders of our Class A Ordinary Shares.
A non-U.S. corporation will be a PFIC for any taxable year if either (1) at least 75% of its gross income for such year consists of certain types of “passive” income (the “income test”); or (2) at least 50% of the value of its assets (based on an average of the quarterly values of the assets) during such year is attributable to assets that produce passive income or are held for the production of passive income (the “asset test”). Based on our current and expected income and assets (taking into account the expected cash proceeds and our anticipated market capitalization following this offering), we do not currently expect to be a PFIC for the current taxable year or the foreseeable future. However, no assurance can be given in this regard because the determination of whether we are or will become a PFIC is a fact-intensive inquiry made on an annual basis that depends, in part, upon the composition of our income and assets at the relevant time. In addition, there can be no assurance that the Internal Revenue Service, or IRS, will agree with our conclusion or that the IRS would not successfully challenge our position. Fluctuations in the market price of our Class A Ordinary Shares may cause us to become a PFIC for the current or subsequent taxable years because the value of our assets for the purpose of the asset test may be determined by reference to the market price of our Class A Ordinary Shares. The composition of our income and assets may also be affected by how, and how quickly, we use our liquid assets and the cash raised in this offering. If we were to be or become a PFIC for any taxable year during which a U.S. holder holds our Class A Ordinary Shares, certain adverse U.S. federal income tax consequences could apply to such U.S. holder and such U.S. Holder may be subject to additional reporting requirements.
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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements that are based on our management’s beliefs and assumptions and on information currently available to us. All statements other than statements of historical facts are forward-looking statements. The forward-looking statements are contained principally in, but not limited to, the sections entitled “Prospectus Summary,” “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business.” These statements relate to future events or to our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Forward-looking statements include, but are not limited to, statements about:
| ● | our goals and strategies; |
| ● | expectations regarding revenue, expenses and operations; |
| ● | our having sufficient working capital and be able to secure additional funding necessary for the continued exploration of our property interests; |
| ● | expectations regarding the potential mineralization, geological merit and economic feasibility of our projects; |
| ● | expectations regarding exploration results at the Project; |
| ● | mineral exploration and exploration program cost estimates; |
| ● | expectations regarding any environmental issues that may affect planned or future exploration programs and the potential impact of complying with existing and proposed environmental laws and regulations; |
| ● | receipt and timing of exploration permits and other third-party approvals; |
| ● | government regulation of mineral exploration and development operations; |
| ● | expectations regarding any social or local community issues that may affected planned or future exploration and development programs; and |
| ● | key personnel continuing their employment with us. |
In some cases, you can identify forward-looking statements by terms such as “may,” “could,” “will,” “should,” “would,” “expect,” “plan,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “project” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions. You should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties and other factors, which are, in some cases, beyond our control and which could materially affect results. Factors that may cause actual results to differ materially from current expectations include, among other things, those listed under the heading “Risk Factors” and elsewhere in this prospectus. If one or more of these risks or uncertainties occur, or if our underlying assumptions prove to be incorrect, actual events or results may vary significantly from those implied or projected by the forward-looking statements. No forward-looking statement is a guarantee of future performance.
This prospectus also contains certain data and information, which we obtained from various government and private publications. Although we believe that the publications and reports are reliable, we have not independently verified the data. Statistical data in these publications includes projections that are based on a number of assumptions. If any one or more of the assumptions underlying the market data is later found to be incorrect, actual results may differ from the projections based on these assumptions.
The forward-looking statements made in this prospectus relate only to events or information as of the date on which the statements are made in this prospectus. Although we will become a public company after this offering and have ongoing disclosure obligations under United States federal securities laws, we do not intend to update or otherwise revise the forward-looking statements in this prospectus, whether as a result of new information, future events or otherwise.
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After deducting the estimated underwriters’ commissions and offering expenses payable by us, we expect to receive net proceeds of approximately $ 4,400,000 from this offering (or approximately $5,086,250 if the underwriters exercise the over-allotment option in full), based on an assumed and estimated public offering price of $4.00 per share.
We plan to use the net proceeds of this offering as follows:
| ● | approximately 50%, or $2.2 million, for the purchase and rollout of electric vehicular mobile command centers; |
| ● | approximately 20%, or $0.88 million, for research and development activities, regional market development and exploration of new markets, product development; and |
| ● | approximately 30%, or $1.32 million, for working capital and general corporate purposes. |
Each $1.00 increase or decrease in the assumed and estimated initial public offering price of $4.00 per share, would increase or decrease the net proceeds that we receive from this offering by approximately $1,143,750, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions payable by us.
The foregoing represents our current intentions to use and allocate the net proceeds of this offering based upon our present plans and business conditions. Our management, however, will have broad discretion in the way that we use the net proceeds of this offering. See “Risk Factors — Risks Related to This Offering and Ownership of Our Class A Ordinary Shares — We have considerable discretion as to the use of the net proceeds from this offering and we may use these proceeds in ways with which you may not agree.”
Pending our use of the net proceeds from this offering, we may invest the net proceeds in a variety of capital preservation investments, including short-term, investment grade, interest bearing instruments and U.S. government securities.
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Concorde International is a holding company incorporated in the British Virgin Islands, and it relies principally on dividends from its Singapore subsidiaries for its cash requirements, including any payment of dividends to its shareholders. Singapore regulations may restrict the ability of our Singapore subsidiaries to pay dividends to Concorde International.
We have never declared or paid cash dividends on our Class A Ordinary Shares. We currently intend to retain all available funds and any future earnings for use in the operation of our business and do not anticipate paying any cash dividends on our Class A Ordinary Shares in the near future. We may also enter into credit agreements or other borrowing arrangements in the future that will restrict our ability to declare or pay cash dividends on our Class A Ordinary Shares. Any future determination to declare dividends will be made at the discretion of our board of directors and will depend on our financial condition, operating results, capital requirements, contractual restrictions, general business conditions and other factors that our board of directors may deem relevant. See also “Risk Factors — Risks Related to This Offering and Ownership of Our Class A Ordinary Shares — We do not expect to declare or pay dividends in the foreseeable future.”
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The following table sets forth our cash and capitalization as of December 31, 2023:
| ● | on an actual basis; and |
| ● | on a pro forma basis to reflect the sale of 1,250,000 Class A Ordinary Shares by us in this offering at an assumed and estimated price to the public of $4.00 per share, resulting in net proceeds to us of $4,400,000 after deducting (i) underwriter commissions of $375,000; (ii) non-accountable expense allowance of $50,000; and (ii) our estimated other offering expenses of $175,000 payable by us and the receipt by us of the proceeds of such sale, assuming the underwriters do not exercise their option to purchase additional shares. |
The pro forma information below is illustrative only and our capitalization following the completion of this offering is subject to adjustment based on the initial public offering price of our Class A Ordinary Shares and other terms of this offering determined at pricing. You should read this table together with our financial statements and the related notes included elsewhere in this prospectus and the information under “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
| December 31, 2023 | ||||||||
| Actual | Pro Forma | |||||||
| $ | $ | |||||||
| Cash and cash equivalents | 956,975 | 5,356,975 | [1] | |||||
| Bank loans, secured by Company’s property | 1,801,718 | 1,801,718 | ||||||
| Bank loans, unsecured and guaranteed | 831,443 | 831,443 | ||||||
| Bank loans, secured by one of shareholder’s property | 1,339,487 | 1,339,487 | ||||||
| Indebtedness to director | 405,632 | 405,632 | ||||||
| Other liabilities | 1,469,725 | 1,469,725 | ||||||
| Total liabilities | 5,848,005 | 5,848,005 | ||||||
| Shareholders’ equity: | ||||||||
| Share capital | ||||||||
| Class A Ordinary Shares, par value $0.00001 per share, 250,000,000 Class A Ordinary Shares authorized, zero shares issued and outstanding, actual; 1,250,000 shares issued and outstanding, pro forma. | — | 13 | ||||||
| Class B Ordinary Shares, par value $0.00001 per share, 100,000,000 Class B Ordinary Shares authorized, 20,888,886 shares issued and outstanding, actual; 20,888,886 shares issued and outstanding, pro forma. | 1 | 209 | ||||||
| Reserves | 2,387,587 | 6,787,574 | [2] | |||||
| Accumulated profits | 177,649 | 177,649 | ||||||
| Non-controlling interests | 137,339 | 137,339 | ||||||
| Total shareholder’s equity | 2,702,576 | 7,102,784 | ||||||
| Total Capitalization | 8,550,581 | 12,950,789 | ||||||
If the underwriters exercise the over-allotment option in full, each of our as adjusted cash, share capital, total shareholders’ equity and total capitalization would be $6,043,225, $223, $7,789,034, $13,637,039, respectively.
Each $1.00 increase or decrease in the assumed offering price per share of $4.00, assuming no change in the number of shares to be sold, would increase or decrease the net proceeds that we receive in this offering and each of total shareholders’ equity and total capitalization by approximately $1,143,750 (or $1,315,313) if the underwriters exercise the over-allotment option in full), after deducting (i) estimated underwriter commissions and (ii) offering expenses, in each case, payable by us.
| [1] | The company’s cash and cash equivalents include pre-offering cash balance of $956,975 and net proceeds of $4,400,000. |
| [2] | The company’s reserves include pre-offering reserves of $2,387,587 and a security premium of $4,399,987 received from its assumed offering. The security premium is the amount by which the issue price of the securities exceeds their nominal value. |
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If you invest in our Class A Ordinary Shares, your interest will be diluted to the extent of the difference between the initial public offering price per Class A Ordinary Share and our net tangible book value per Class A and B of Ordinary Share after this offering. Dilution results from the fact that the assumed initial public offering price per Class A Ordinary Share is substantially in excess of the net tangible book value per Class A and B Ordinary Share attributable to the existing shareholders for our presently outstanding Class B Ordinary Shares.
Our net tangible book value was approximately $2,521,158, or $0.12 per Class B of Ordinary Share, as of December 31, 2023. Our net tangible book value represents the amount of our total consolidated tangible assets (which is calculated by subtracting deferred tax assets from our total consolidated assets), less the amount of our total consolidated liabilities. Dilution is determined by subtracting net tangible book value per share after giving effect to this offering. Net tangible book value per Ordinary Share represents net tangible book value divided by 20,888,886 Ordinary Shares outstanding as of December 31, 2023, and pro forma net tangible book value per Ordinary Share represents net tangible book value divided by 22,138,886 Ordinary Shares outstanding as of December 31, 2023 after giving effect to the issuance of 20,788,886 Class B Ordinary Shares on March 14, 2024.
After giving effect to our sale of 1,250,000 Class A Ordinary Shares in this offering at an assumed and estimated initial public offering price of $4.00 per Class A Ordinary Share, and after giving effect to (i) the issuance of 20,788,886 Class B Ordinary Shares on March 14, 2024, assuming no exercise of over-allotment option and after deducting underwriting discounts, non-accountable expense allowance, and estimated offering expenses payable by us, but without adjusting for any other change in our net tangible book value subsequent to December 31, 2023, our pro forma as adjusted net tangible book value as of December 31, 2023 would have been approximately $7,037,558, or approximately $0.32 per share. This amount represents an immediate increase in pro forma net tangible book value of $0.20 per share to existing shareholders and an immediate dilution in pro forma net tangible book value of $3.68 per share to new investors purchasing our Class A Ordinary Shares in this offering. The following table illustrates this per Ordinary Share dilution to the new investors purchasing Class A Ordinary Shares in this offering.
| Assumed initial public offering price per Class A Ordinary Share | $ | 4.00 | ||
| Net tangible book value per Ordinary Share at December 31, 2023 | $ | 0.12 | ||
| Pro forma net tangible book value per Ordinary Share as of December 31, 2023 | $ | 0.32 | ||
| Pro forma as adjusted net tangible book value attributable to payments by existing investors | $ | 0.20 | ||
| Pro forma net tangible book value immediately after this offering | $ | 7,037,558 | ||
| Amount of dilution in net tangible book value to new investors in the offering | $ | 3.68 |
If the underwriters exercise their over-allotment option in full, the pro forma as adjusted net tangible book value per Class A Ordinary Share, as adjusted to give effect to this offering, would be $0.35 per share, and the dilution in pro forma net tangible book value per share to new investors purchasing Class A Ordinary Shares in this offering would be $3.65 per share.
A $1.00 increase (decrease) in the assumed and estimated public offering price of $4.00 per Class A Ordinary Share would increase (decrease) our pro forma as adjusted net tangible book value after giving effect to the offering by $1,143,750, the pro forma as adjusted net tangible book value per Ordinary Share after giving effect to this offering by $0.05 per Ordinary Share and the dilution in net tangible book value per Ordinary Share to new investors in this offering by $0.95 per Ordinary Share, assuming no change to the number of Class A Ordinary Shares offered by us as set forth on the cover page of this prospectus, no exercise of over-allotment option and after deducting underwriting commissions and estimated offering expenses payable by us.
The pro forma as adjusted information discussed above is illustrative only. Our net tangible book value following the completion of this offering is subject to adjustment based on the actual initial public offering price of our Class A Ordinary Shares and other terms of this offering determined at pricing.
The following tables summarize the differences between our existing shareholders and the new investors with respect to the number of Class A Ordinary Shares purchased from us in this offering, the total consideration paid and the average price per Class A Ordinary Share paid at an assumed and estimated initial public offering price of $4.00 per share, and before deducting estimated underwriting discounts and commissions and estimated offering expenses (assuming no exercise of the over-allotment option). As the table shows, new investors purchasing shares in this offering may in certain circumstances pay an average price per share substantially higher than the average price per share paid by our existing shareholders.
| Share Purchased | Total Consideration | Average Price | ||||||||||||||||||
| Number | % | Amount | % | Per Share | ||||||||||||||||
| Existing shareholders* | 20,888,886 | 94 | % | $ | 209 | 0.004 | % | $ | 0.00001 | |||||||||||
| New investors | 1,250,000 | 6 | % | $ | 5,000,000 | 99.996 | % | $ | 4 | |||||||||||
| Total | 22,138,886 | 100 | % | $ | 5,000,209 | 100 | % | $ | 0.23 | |||||||||||
| * | Including 20,888,886 Class B Ordinary Shares, each of par value of $0.00001 |
To the extent that new options, restricted share units or other securities that will be issued under Concorde International Group Ltd 2024 Equity Incentive Plan, to be adopted promptly following the closing of this offering; or we issue additional Ordinary Shares in the future, there will be further dilution to investors participating in this offering.
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MANAGEMENT’S DISCUSSION AND ANALYSIS
OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
You should read the following discussion together with our consolidated financial statements and the related notes included elsewhere in this prospectus. This discussion contains forward-looking statements that are based on our current expectations, estimates and projections about our business and operations. Our actual results may differ materially from those currently anticipated and expressed in such forward-looking statements as a result of a number of factors, including those which we discuss under “Risk Factors” and elsewhere in this prospectus. See “Special Note Regarding Forward-Looking Statements.”
The audited consolidated financial statements for the years ended December 31, 2023 and 2022 are prepared pursuant to IFRS. As permitted by the rules of the SEC for foreign private issuers, we do not reconcile our financial statements to U.S. generally accepted accounting principles.
Overview
Concorde International Group Limited is an integrated security services providers that combines physical manpower and innovative technology to deliver effective security solutions. In 2014, we were awarded “The Business Model Innovation Award” by the Singapore Manufacturing Federation. In 2015, we were awarded the “Best Innovative Use of Infocomm Technology Award” by the Singapore Infocomm Technology Federation (“SiTF”). In 2016, we were awarded the “Most Innovative Use of Infocomm Technology (Private Sector-SME) Award” by the Infocomm Media Development Authority of Singapore (“IMDA”, formerly known as the Infocomm Development Authority) and the Singapore Infocomm Technology Federation (“SiTF”). In 2017, we were awarded the “IP Awards” by the World Intellectual Property Organization — Intellectual Property Office of Singapore (WIPO-IPOS). In addition, in 2017 The Nanyang Technological University of Singapore recognized our innovative solution by publishing it as a case study entitled “The Transformation of Concorde Security Pte Ltd” via its Nanyang Technoprenuership Center. In the same year, the Singapore Management University and Harvard Business Publishing Education also recognized our innovation by publishing a case study entitled “Main Case : The Resilience of a Disruptive Innovator : Concorde Security”. From 2018 to 2019, in recognition of our solution in transforming the industry, the Infocomm Media Development Authority of Singapore (“IMDA”) approved our solutions in the Singapore government’s Industry Transformation Map Pilot Programme. From 2020 to 2021, in recognition of our technology and solutions, we were included in the “Pre-approved IT solutions vendor” under the category of security, by the Infocomm Media Development Authority of Singapore (“IMDA”). From 2022 to 2023, in recognition of our technology solution, the Infocomm Development Authority of Singapore (“IMDA”) approved our solutions in the Singapore government’s Advanced Digital Solutions (ADS) under the Small Medium Enterprises Go Digital Programme. With these awards and recognitions, we believe we are the leading solution provider in Singapore. Through the integration of our patented technology solution, we help our clients reduce costs and enhance security. We have experienced significant revenue growth, primarily driven by the increasing labor costs and increasing demands in security and facilities management.
Since our establishment in Singapore in 1997, we have built a track record in the professional security community by consistently providing high-quality security manpower. Recognizing manpower sustainability with our ever-advancing society, in 2014, we decided to transit into a security solution services company using our innovative business model. With our technological inventive solution, we deliver a higher level of security performance with headcount uplifted of higher skillset, better reward as well as much sought after work-life balances for the new era security workforce. As a result, we have received numerous awards in Singapore, recognizing our innovative technology and our contribution to producing the next generation of reliable security solutions. Anchored by our patented technology applications and pioneering solutions, we provide top-tier security and facilities management services to commercial, financial, industrial, and governmental customers in Singapore.
We offer a range of services to enhance security and safety: (1) i-Guarding Services; (2) Man-Guarding Services; and (3) Consultancy and Training Services. Our i-Guarding Services leverages technology to increase efficiency, with a mobile platform and cluster® aggregation model of higher skillset workforce. It accounted for about 98.09% and 99.09% of revenues for fiscal year 2023 and 2022, respectively. Man-Guarding Services employs trained security officers to maintain safety and deter unlawful activities, making up about 1.41% and 0.24% of revenues for fiscal year 2023 and 2022, respectively. Consultancy and Training Services provide expert guidance tailored to clients’ needs, representing about 0.50% and 0.67% of total revenues in for fiscal year 2023 and 2022, respectively.
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We have gained recognition for our disruptive innovation in the integrated monitoring of properties, assets, and building service systems. This ensures round-the-clock surveillance for complete security and operational efficiency. This achievement is made possible through our suite of intelligent security solutions, known as “I-Guarding Services.” One of our flagship services, the groundbreaking I-Man Facility Sprinter, is a mobile vehicular platform that revolutionizes security and facility maintenance services. These pioneering solutions not only improve workers’ compensation, skill sets, and working conditions but also redefine the overall business landscape of the industry.
Our company’s second flagship product is the Intelligent Facility Authenticator. The IFA is an innovative solution that leverages advanced kiosk technology to enhance security and streamline visitor management. In response to the challenges of limited manpower and rising costs, the IFA system automates the issuance of secure passes and access cards, eliminating the need for physical human interaction. It works by sending secure pass-icons to visitors, verifying their identity upon entry, and dispensing access cards with varying levels of security clearance. This technology not only enhances security within buildings but also offers efficient visitor management services, making it a game-changer in industries where kiosk adoption is increasing. Ultimately, IFA represents a significant advancement in security access control without relying on human intervention.
For the fiscal year ended December 31, 2023 and 2022, more than 96% and 85% respectively, of our revenues were generated by annual recurring contracts. 99% of our clients were based in Singapore. In the fiscal year ended December 31, 2022, our top two customers, Ceva Logistics Singapore Pte Ltd and JTC Corporation, accounted for approximately 10% and 10% of our total revenue, respectively. In the fiscal year ended December 31, 2023, our revenue generated by annual recurring contract increased 11% to 96% as we continued to focus on securing recurring contracts to ensure long-term financial stability and growth. Our top two customers, Singapore University of Technology and Design and People’s Association at OnePunggol accounted for approximately 8% and 7% of our total revenue, respectively.
Overall Performance
Our revenue increased by $5,649,648, or 113 %, from $5,006,345 for the year ended December 31, 2022 to $10,655,933 for the year ended December 31, 2023. Our profit increased by $1,798,174, or 224%, from a net loss of $803,980 for the year ended December 31, 2022 to a net profit of $994,194 for the year ended December 31, 2023, which was mainly due to by (i) an increase in sales by 5,649,648 or 113% driven by market demand, and; by (ii) a decrease of other expenses of $672,157, or 68% from $986,796 for the year ended December 31, 2022 to $314,639 for the year ended December 31, 2023 due to step up collection effort of the new established finance team, there was improvement in bad debt allowances and recovery of previously written off bad debt.
There were more new clients acquired during the year because our services were favored by customers compared to those of competitors in the Singapore markets, this shows that our market demand is on an increasing trend.
Reorganization under Common Control
In connection with this offering, we have undertaken a reorganization of our corporate structure (the “Reorganization”) in the following steps:
| ● | On May 2, 2023, Concorde International Group Ltd was incorporated under the laws of the British Virgin Islands; |
| ● | On June 12, 2023, Concorde International Group Pte Ltd was incorporated as a wholly owned subsidiary of Concorde International Group Ltd; |
| ● | On July 31, 2023, Concorde International Group Pte Ltd acquired 100% of the equity interests in Concorde Security Limited from Concorde Group Pte Ltd. |
| ● | On October 27, 2023, Concorde International Group Pte Ltd acquired 100% of the equity interests in Concorde Security Sdn Bhd from Swee Kheng Chua; |
| ● | On November 1, 2023, Concorde International Group Pte Ltd acquired 96.81% of the equity interests in Concorde Security Pte Ltd from Swee Kheng Chua. Concorde Security Pte Ltd is a 96.81% owned subsidiary of Concorde International Group Pte Ltd; |
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| ● | On November 1, 2023, Concorde International Group Pte Ltd acquired 100% of the equity interests in Concorde Asia Pte Ltd from Swee Kheng Chua. On November 3, 2023, Weilekai Investment Pte Ltd acquired 30% of the equity interests in Concorde Asia Pte Ltd from Concorde International Group Pte Ltd. Consequently, Concorde Asia Pte Ltd is a 70% indirectly owned subsidiary of Concorde International Group Pte Ltd; |
| ● | On November 1, 2023, Concorde International Group Pte Ltd acquired 100% of the equity interests in Berjaya Academy Pte Ltd from Sharifah Noriati Binte Said Omar. On November 8, 2023, Weilekai Investment Pte Ltd acquired 30% of the equity interests in Berjaya Academy Pte Ltd from Concorde International Group Pte Ltd. Consequently, Berjaya Academy Pte Ltd is a 70% indirectly owned subsidiary of Concorde International Group Pte Ltd. |
Consequently, Concorde International Group Ltd, through a restructuring which is accounted for as a reorganization of entities under common control, became the ultimate holding company of all the companies mentioned above.
Key Factors Affecting Our Results of Operations
Impact of Coronavirus Pandemic
The outbreak of coronavirus disease 2019 (“COVID-19”) in early 2020 has brought about additional uncertainties in the Company’s operating environment and has impacted the Company’s operations and financial position. The Company has been closely monitoring the impact of COVID-19 on the Company’s businesses and has commenced putting in place various measures. Based on the information currently available, the directors confirm that there has been no material adverse change in the financial or trading position of the Company up to the date of this prospectus.
We are pleased to report that since COVID-19 has been largely contained, it has had minimal impact on the Company’s operations. We are aware that the COVID-19 pandemic has had a significant impact on businesses around the world, with many facing significant disruptions to their operations, supply chains, and financial performance. However, we have been able to maintain our operations and minimize the impact of the pandemic on our business due to the measures we have put in place to manage the risks associated with COVID-19. While we expect the situation to continue to improve with the sustained implementation of the disease prevention and containment policies and the development of vaccines, we cannot be entirely certain as to when the impact of COVID-19 will be completely alleviated. Therefore, we are closely monitoring the development of the situation and continuously evaluating any potential impact on our business, results of operations, and financial condition.
Demand for Our Services
In the fiscal years ended December 31, 2023 and 2022, where our business was primarily locally derived, we believe our results of operations were affected by the general factors impacting the Singapore economy.
Demand for security services is evergreen, stable, and on the rise, benefitting from environmental regulatory requirements for security infrastructure services. However, demand for our services is affected by government and regulatory policies. Changes in government and regulatory policies might affect the demand for our security services. Competition in an established market might adversely affect our pricing and profitability. The demand for our services is also influenced by customer satisfaction. We may not be able to retain existing customers if we fail to meet our customers’ requirements.
Our Relationships with Major Customers
Our future growth and profitability are significantly dependent on our ability to maintain close and mutually beneficial relationships with existing customers and to expand our customer base. For the years ended December 31, 2023 and 2022, the total sales to our five largest customers accounted for 33% and 36% of our total revenue, respectively, and the total sales to our largest customer accounted for approximately 8% and 10% of our total revenue, respectively. The composition of our five largest customers differs for the fiscal year 2023 and 2022. There is no assurance that our five largest customers will continue to be satisfied with our services and will continue to be our customer. Any material deteriorations in our relationships with any of our five largest customers may materially and adversely affect our business, results of operations and financial condition.
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Ability to secure new contract
Our results of operations and sales growth are affected by our ability to secure new contracts. Competition in the established market might affect our profitability.
Cost of Labor
Our results of operations are affected by the rising cost of labor and the implementation of the Progressive Wage Model (a Singapore minimum wage policy). The increase in labor costs may adversely affect our gross profit margin.
Cost of subcontracting
Our results of operations are affected by the rising costs of subcontracting. As we refocus on patented technology-integrated services, we are subcontracting traditional manpower and installation work to external vendors. Due to the rising cost of labor, this increase in subcontracting costs might affect our gross profit margins.
Gross profit margin
Our gross profit margin relies on our ability to negotiate subcontracting costs and on our customers’ adoption of technology to reduce reliance on manual labor.
Emerging Growth Company
Upon the completion of this offering, we will qualify as an “emerging growth company” under the JOBS Act. As a result, we will be permitted to, and intend to, rely on exemptions from certain disclosure requirements. These provisions include exemption from the auditor attestation requirement under Section 404 of the Sarbanes-Oxley Act of 2002 in the assessment of the emerging growth company’s internal control over financial reporting. In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period. Our financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards.
We will remain an emerging growth company until one of the following occurs: (i) our total annual gross revenues are $1.235 billion or more. (ii) we issue more than $1 billion in non-convertible debt in the past three years. or (iii) we become a “large accelerated filer” under the Exchange Act, which could occur if the market value of our Class A Ordinary Shares that are held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter. Once we cease to be an emerging growth company, we will not be entitled to the exemptions provided in the JOBS Act discussed above.
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Results of Operations
The following table sets forth key components of our results of operations during the years ended December 31, 2023 and 2022.
| Years Ended December 31, | ||||||||||||
| 2023 | 2022 | Increase/ | ||||||||||
| $ | $ | (Decrease) | ||||||||||
| Revenues | ||||||||||||
| Man-Guarding Services | 150,314 | 12,193 | 1,133 | % | ||||||||
| I-Guarding Services | 10,452,263 | 4,960,585 | 111 | % | ||||||||
| Others | 53,416 | 33,567 | 59 | % | ||||||||
| Total Revenue | 10,655,993 | 5,006,345 | 113 | % | ||||||||
| Cost and expenses | ||||||||||||
| Cost of revenue, excluding depreciation and amortization | 7,662,024 | 3,648,637 | 110 | % | ||||||||
| Other income | ||||||||||||
| Receipt of government grants | 47,895 | 132,836 | ||||||||||
| Interest income | 30,560 | 48,405 | ||||||||||
| Other income | 158,456 | 23,960 | ||||||||||
| 236,911 | 205,201 | 15 | % | |||||||||
| Employee benefits expenses | 1,311,345 | 912,772 | 44 | % | ||||||||
| Depreciation and amortization expense | 329,836 | 389,449 | 15 | % | ||||||||
| Other expenses | ||||||||||||
| Bad debt allowance | (246,619 | ) | 463,463 | 153 | % | |||||||
| Professional fees | 121,775 | 193,838 | 37 | % | ||||||||
| Distribution expenses | 102,971 | 142,513 | 28 | % | ||||||||
| Office expenses | 221,371 | 154,802 | 43 | % | ||||||||
| Rental expenses | 31,342 | 29,865 | 5 | % | ||||||||
| Others | 83,799 | 5,154 | 1,526 | % | ||||||||
| 314,639 | 989,635 | |||||||||||
| Finance cost | 149,626 | 75,033 | 99 | % | ||||||||
| Net Profit/(Loss) before tax | 1,125,434 | (803,980 | ) | |||||||||
| Income tax expense | 131,240 | — | ||||||||||
| Net Profit/(Loss) for the year | 994,194 | (803,980 | ) | |||||||||
Comparison of Years Ended December 31, 2023 and 2022
The following table sets forth key components of our results of operations during the years ended December 31, 2023 and 2022.
Revenues
Revenues. The principal activities of the Company for the years ended December 31, 2023 and 2022 were providing man guarding service and I-Guarding service. Revenue for the years ended December 31, 2023 and 2022 was $10,655,993 and $5,006,345, respectively, representing an increase of 113%. The increase was due to an increase in revenues from I-Guarding services due to acquisition of new customers.
Revenue from Man-Guarding Services. Revenue from Man-Guarding Services increased by $138,121, or 1,133%, to $150,314 for the year ended December 31, 2023, from $12,193 for the year ended December 31, 2022. This increase was primarily because our sole man-guarding customer was contracted at the end of the fiscal year 2022 and did not contribute a full year of sales. In the fiscal year 2023, the sole major customer contributed a full year of sales. Revenue from Man-Guarding Services accounted for 1.41% of our total revenue for the year ended December 31, 2023, compared to 0.24% for the year ended December 31, 2022.
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Revenue from I-Guarding Services. Revenue from I-Guarding Services increase by $5,491,678, or 111%, to $10,452,263 for the year ended December 31, 2023 from $4,960,585 for the year ended December 31, 2022. Our current country of operation is Singapore, the increase was primarily due to growth in the number of customers and contract value, signifying improved market penetration in the local market. In the fiscal year ending 2023, we experienced a 23% growth in the number of customers served. Our contract value per customer was $107,755 for the fiscal year ended 2023, up from $62,792 in 2022, reflecting a 72% increase in per-customer value. We are currently facing more demand than our capacity can meet, prompting us to strategize on acquiring high-value customers. The growth in the number of customers and contract value indicates sustained market demand and underscores our competitiveness in the market through our ability to increase per-contract value. We plan to enhance our operational capacity by expanding our fleet of IFS (response vehicles). Concurrently, we will increase management hiring to implement more efficient processes and optimize routes and schedules to maximize efficiency.
Revenue from Others. Revenue from others increase by $19,849, or 59%, to $53,416 for the year ended December 31, 2023 from $33,567 for the year ended December 31, 2022. Such increase was primarily because Berjaya Academy Pte Ltd started generating revenue in the fiscal year 2023. Revenue from others accounted for 0.50% of our total revenue for the year ended December 31, 2023, as compared to 0.67% for the year ended December 31, 2022.
For the year ended December 31, 2023, Berjaya Academy Pte Ltd started generating revenue in February and generated $34,980.52 revenue for the rendering of government approved courses in security. This evidenced a market demand and further strengthened our position as one of the market leaders in the local security industry. No such revenue was generated in the year ended December 31, 2022.
Other income
Our other income consists primarily of rental income, government credit scheme and government grant and miscellaneous income. Our other income increased by $31,710, or 15%, to $ 236,911 for the year ended December 31, 2023 from $205,201 for the year ended December 31, 2022. Such increase was due to (i) gain from disposal of fixed assets amounting to $63,626 compare to $0 in 2022 and compensation received from our past lawsuit claims amounting to $37,280 comparing to $0 in 2022 which offset the absence of covid related grant given by Government amounting to $80,863 in year 2023 due to the recovery of Covid situation in Singapore.
Cost and expenses
Cost of revenue (exclusive of depreciation and amortization). Cost of revenue (exclusive of depreciation and amortization mainly includes sub-contractor cost, guards labor cost, guards related employees’ expenses and consumables. Our cost of sales increased by $4,013,387, or 110%, to $7,662,024 for the year ended December 31, 2023, from $3,648,637 for the year ended December 31, 2022. Such an increase is in line with the increase in sales.
Depreciation and amortization expense. Depreciation and amortization include depreciation and amortization of IT equipment, vehicles, leasehold property; and intangible assets such as Research and Developments and Patents. Depreciation and amortization decreased by $59,613, or 15%, to $329,836 for the year ended December 31, 2023 from $389,449 for the year ended December 31, 2022. Such decrease was due to many assets being fully depreciated during the fiscal year ended 2023.
Employee Benefits Expenses. Our staff expenses consist primarily of non-guard related employee expenses. Our employee expenses increased by $398,573, or 44%, to $1,311,345 for the year ended December 31, 2023 from $912,772 for the year ended December 31, 2022. Such increase was due to overall general increased hiring of management staffs including key appointment personnels. Our year-end headcount in our primary subsidiary, Concorde Security Pte Ltd, increased by 100% in the fiscal year ended December 31, 2023.
Bad Debt Allowance. Bad debt allowance includes specific and general provision for trade receivables. Bad debt decreased by $ 710,082, or 153%, to a write-back of $246,619 for the year ended December 31, 2023 from $463,463 for the year ended December 31, 2022. Such decrease was due to step up collection effort of the newly established finance team.
Professional fees. Professional fees include consultancy fees incurred in the area of accounting, auditing, legal and secretarial work. Professional fees decreased by $72,065, or 37%, to $121,773 for the year ended December 31, 2023 from $193,838 for the year ended December 31, 2022. Such decrease was attributed to lower legal costs incurred in the fiscal year 2023, amounting to $44,917, due to a case being closed in 2022. Additionally, consultancy fees decreased by $28,920.
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Distribution expenses. Distribution expenses include expenses incurred for transportation, telecommunication, publicity and entertainment. Distribution expenses decreased by $39,542, or 28%, to $102,971 for the year ended December 31, 2023 from $142,513 for the year ended December 31, 2022. Such decrease was due to lower communication costs amounting to $29,430, reduced salesman commissions paid amounting to $6,379, and decreased spending on traditional marketing amounting to $10,245. However, this decrease was offset by increased costs incurred on vehicles, amounting to $8,698.44.
Office expenses. Office expenses include expenses incurred for miscellaneous office administration such as subscriptions, office supplies, utility and office insurance. Office expenses increased by $66,569, or 43%, to $221,371 for the year ended December 31, 2023 from $154,802 for the year ended December 31, 2022. Such increase was due to increase patent maintenance cost.
Rental expenses. Rental expenses include on leased properties at 808 Kitchener road and unit at #07-33 at Link@AMK. Rental expense increased by $1,477, or 5%, to $31,342 for the year ended December 31, 2023 from $29,865 for the year ended December 31, 2022. Such increase was due to insignificant increase in rental.
Others. Others include unrealized currency exchange loss and other small-value miscellaneous expenses. Other increased by $78,645, or 1,526%, to $83,799 for the year ended December 31, 2023 from $5,154 for the year ended December 31, 2022. Such increase was mainly due to increase in unrealized currency exchange loss of $51,906.30.
Interests cost. The interests cost is the interest incurred on bank loans. Finance cost increased by $74,593, or 99%, to $149,626 for the year ended December 31, 2023 from $75,003 for the year ended December 31, 2022. Such increase was due to the drawdown of an additional loan in the fiscal year 2023.
Liquidity and Capital Resources
As of December 31, 2023 and 2022, we had cash and cash equivalents of $956,975 and $441,278, respectively. To date, we have financed our operations primarily through business income and working capital loan from the Bank.
As of December 31, 2023, our audited financial statements were prepared on the assumption that we would continue as a going concern. The Company’s ability to continue as a going concern is dependent upon the Company’s profit generating operations in the future and/or obtaining the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they become due. In assessing the going concern, management and the Board has considered:
| a. | The improved cash flows including liquidity and borrowings from future fund-raising activities. In the fiscal year 2023, the company had a positive cash flow of $482,259, an improvement from a negative cash flow of $1,240,194 in the fiscal year 2022. As a result, the company’s cash and cash equivalents as of December 31, 2023, amounted to $956,975, an increase from $441,278 in the previous fiscal year The Company’s principal uses of cash have been, and management expects will continue to be, for working capital to support a reasonable increase in our scale of operations as well as for business expansion investments. |
| b. | The improved sales and profits resulted from the acquisition of new customers. Total revenue rose to $10,655,993 in the fiscal year 2023 from $5,006,345 in the fiscal year 2022. As a result, our net profit increased to $994,194 in the fiscal year 2023 from a net loss of $803,980 in the fiscal year 2022. |
| c. | The ability to meet debt obligations. The Company has an improved gearing ratio of 1.18 in the fiscal year 2023 compared to 2.65 in the fiscal year 2022. In the fiscal year 2023, the company’s total bank loans amounted to $3,972,648, slightly lower than $3,990,312 in 2022. Current liabilities for fiscal year 2023 stood at $1,863,110, up from $1,567,292 in fiscal year 2022, while non-current liabilities decreased to $2,109,538 from $2,423,020 in the previous year. These loans have a fixed interest rates ranging between 1.5% and 6.4% per annum. Loan 1, secured by a leasehold property and guaranteed by a director and family member, has monthly repayments and an interest rate of 1.30%. Loan 2 and Loan 3, both unsecured and guaranteed similarly, have different repayment schedules and interest rates of 2.5% per annum. Loan 4, secured against a director’s freehold property with a joint guarantee, is a money market loan with variable interest rates ranging from 4.9% to 6.4% per annum, drawn in tranches of at least $372,150 for up to three months. The Company’s continuation as a going concern is dependent on the Company’s ability to meet obligations as they become due and to obtain additional equity or alternative financing required to fund operations until sufficient sources of recurring revenues can be generated. While there can be no assurance that the Company will be successful in its plans described above or in attracting equity or alternative financing on acceptable terms, management of the Company believes that, based on consideration of its most recent projections for year 2024, the Company can meet its working capital requirements over the next 12 months. |
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The consolidated financial statements do not include any adjustments to the carrying amounts and classification of assets, liabilities, and reported expenses that may be necessary if the Company were unable to continue as a going concern.
The directors have, at the time of approving the consolidated financial statements, a reasonable expectation that we have adequate resources to continue in operational existence for the foreseeable future. Thus, they continue to adopt the going concern basis of accounting in preparing financial statements.
Anticipated Cash Requirements
We estimate our minimum operating expenses and working capital requirements for the next 12-month period to be as follows:
| Expense | Estimated Amount | |||
| Cost of revenue, excluding depreciation and amortization | $ | 12,787,000 | ||
| Professional fees | $ | 1,363,000 | ||
| Travel expenses | $ | 20,000 | ||
| General and administrative expenses | $ | 1,006,000 | ||
| Transfer agent and regulatory fees | $ | 200,000 | ||
| Bank fees and interest | $ | 150,000 | ||
| Total Operating Expenses | $ | 15,526,000 | ||
We plan to raise our required funds primarily through this offering and business income. Under such circumstances, there is no assurance that we will be able to obtain further funds required for our continued working capital requirements. Any issuance of our equity securities in the near future may result in substantial dilution to our existing shareholders.
Summary of Cash Flow
Comparison of Years Ended December 31, 2023 and 2022
The following table provides detailed information about our net cash flow for all financial statement periods presented in this prospectus.
| Years Ended December 31, | ||||||||
| 2023 | 2022 | |||||||
| $ | $ | |||||||
| Net cash from/(used in) operating activities | 790,944 | (931,028 | ) | |||||
| Net cash used in investing activities | (309,632 | ) | (912,089 | ) | ||||
| Net cash provided by financing activities | 947 | 602,923 | ||||||
| Effect of exchange rate changes on cash and cash equivalents | 33,438 | 74,861 | ||||||
| Net change in cash during period | 515,697 | (1,165,333 | ) | |||||
Our net cash from operating activities was $790,944 for the year ended December 31, 2023, as compared to a net cash used of $931,028 for the year ended December 31, 2022. For the year ended December 31, 2023, net cash from operating activities primarily reflected the positive cashflow generated from the increase in revenue. The net cash from operating activities consists of a profit before tax of $1,125,435, a $509,315 positive impact from non-cash items mainly adjusted by (i) depreciation and amortization of $329,836, and (ii) increase in trade and other receivables of approximately $930,482 together with an increase in trade and other payables of $190,338.
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For the year ended December 31, 2022, the net cash used in operating activities consists of a net loss of $803,980, a $649,574 positive impact from non-cash items mainly adjusted by (i) depreciation and amortization of $389,449, and (ii) write off of amount due from related parties of $233,497; and increase in trade and other receivables of approximately $1,537,479 together with an increase in trade and other payables of $760,857.
Our net cash used in investing activities was $309,632 for the year ended December 31, 2023, as compared $912,089 for the year ended December 31, 2022. Our net cash used in investing activities for the year ended December 31, 2023 includes $407,204 used for purchase of property and equipment and $71,449 from repayment of related parties loan, while our net cash used in investing activities for the year ended December 31, 2022 consisted entirely of advances to related parties.
Our net cash from financing activities was $947 for the year ended December 31, 2023, as compared to $602,923 net cash provided by financing activities for the year ended December 31, 2022. Our net cash used in financing activities for the year ended December 31, 2023 consisted of proceed from a debt of $2,036,696, offset by repayment of borrowing and lease of $2,035,749, while our net cash provided by financing activities for the year ended December 31, 2022 mainly consisted of proceeds from a debt of $1,116,450, offset by repayment of borrowing and lease of $513,527.
Related Party Transactions
The following schedule describes the transactions and balances with related parties in the last three fiscal years:
Amount due from related parties.
| Year Ended December 31, | ||||||||||||
| 2023 (Audited) | 2022 (Audited) | 2021 (Unaudited) | ||||||||||
| $ | $ | $ | ||||||||||
| Concorde Global I Pte Ltd | 15,168 | — | 6,041 | |||||||||
| Total Protection Pte Ltd | 753,976 | 651,702 | 233,264 | |||||||||
| Swee Kheng Chua | 75,838 | 342,137 | 73,970 | |||||||||
| Ping Ping Lim | — | 11,551 | — | |||||||||
| Total amount due from related parties | 844,982 | 1,005,390 | 313,275 | |||||||||
The following schedule describes the amount due to related parties in the last three fiscal years:
| Year Ended December 31, | ||||||||||||
| 2023 (Audited) | 2022 (Audited) | 2021 (Unaudited) | ||||||||||
| $ | $ | $ | ||||||||||
| Ping Ping Lim | — | 70,320 | 49,383 | |||||||||
| Swee Kheng Chua | 405,632 | 538,985 | 465,525 | |||||||||
| Total amount due to related parties | 405,632 | 609,305 | 505,963 | |||||||||
The following schedule describes the related parties transactions during the fiscal years ended December 31, 2023, 2022 and 2021:
| January 1, | Year Ended December 31, | |||||||||||||||
| 2024 to date | 2023 | 2022 | 2021 | |||||||||||||
| (Unaudited) | (Audited) | (Audited) | (Audited) | |||||||||||||
| $ | $ | $ | ||||||||||||||
| Subcontracting costs | ||||||||||||||||
| Total Protection Solution Pte Ltd | 2,504,458 | 1,668,048 | 107,896 | |||||||||||||
| iMatrix Global Pte Ltd | 16,403 | 150,305 | 33,150 | |||||||||||||
| Total subcontracting costs | 2,520,861 | 1,818,353 | 141,046 | |||||||||||||
Compensation payable to key management personnel comprises of salaries, bonus, allowances and Employer’s contribution to Central Provident Funds. In the financial year 2023, Swee Kheng Chua and Ping Ping Lim both requested for a voluntary pay cut in Concorde Security Pte Ltd.
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Key management personnel compensation for the fiscal years ended December 31, 2023, 2022 and 2021 is as follows:
| Year Ended December 31, | ||||||||||||
| 2023 (Audited) | 2022 (Audited) | 2021 (Unaudited) | ||||||||||
| $ | $ | $ | ||||||||||
| Swee Kheng Chua | 70,725 | 212,047 | 178,586 | |||||||||
| Sharifah Noriati Binte Said Omar* | 21,983 | 34,632 | 13,692 | |||||||||
| Ping Ping Lim** | 88,193 | 157,119 | — | |||||||||
| Terence Wing Khai Yap | 86,098 | — | — | |||||||||
| Sze Yin Ong | 52,190 | — | — | |||||||||
| Total compensation | 319,190 | 403,798 | 192,278 | |||||||||
| * | Ms. Sharifah Noriati Binte Said Omar serves as a nominee director at Berjaya Academy Pte Ltd, our 70% owned subsidiary, as well as Concorde Security Pte Ltd (Singapore), our 96.81% owned subsidiary, and Concorde Asia Pte Ltd (Singapore), our 70% owned subsidiary. |
| ** | Ping Ping Lim, Swee Kheng Chua’s spouse. |
Contractual Obligations, Commitments and Contingencies
Our contractual obligations as of December 31, 2023 and 2022 consist of the obligations under the lease agreements covering our sublet space and debt.
The following table summarizes our lease obligations:
| Year ended December 31, 2023 | Within 1 year | 1 to 5 years | >5 years | Total | ||||||||||||
| Undiscounted lease liabilities | 65,160 | 96,588 | — | 161,748 | ||||||||||||
| Interest expense | (5,339 | ) | (6,506 | ) | — | (11,845 | ) | |||||||||
| 59,821 | 90,082 | — | 149,903 | |||||||||||||
| Year ended December 31, 2022 | Within 1 year | 1 to 5 years | >5 years | Total | ||||||||||||
| Undiscounted lease liabilities | 20,096 | 10,048 | — | 30,144 | ||||||||||||
| Interest expense | (464 | ) | (65 | ) | — | (529 | ) | |||||||||
| 19,632 | 9,983 | — | 29,615 | |||||||||||||
The follow table summarizes our debt:
| Year ended December 31, | 2023 (Audited) | 2022 (Audited) | ||||||
| Within 1 year | 1,863,110 | 1,567,292 | ||||||
| 1 to 5 years | 2,109,538 | 2,423,020 | ||||||
| 3,972,648 | 3,990,312 | |||||||
No other significant capital or commitments, long-term obligations, or guarantees as of December 31, 2023 and 2022.
Off-Balance Sheet Commitments Arrangements
We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
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Taxation
Although we have subsidiaries formed in the United Kingdom and Malaysia, those entities do not have active business activities as of the date of this prospectus.
British Virgin Islands
Concorde International Group Limited is incorporated in the British Virgin Islands. Under the current laws of the British Virgin Islands, Concorde International Group Limited is not subject to tax on income or capital gains. Additionally, upon payments of dividends by the Company to its shareholders, no withholding tax from British Virgin Islands will be imposed.
Singapore Income Taxes
Our subsidiaries incorporated in Singapore are subject to the uniform tax rate of 17% under Singapore income tax law on taxable income. Under Singapore tax laws, we are exempted from Singapore income tax on our foreign sourced dividend income received in Singapore by our company and Singapore tax resident subsidiaries provided that (i) such income is subject to income tax of a similar character under the laws of the jurisdiction from which such income is received at the time the income is received in Singapore; (ii) the highest rate of such tax on any gains or profits from a trade or business carried on in such jurisdiction is not less than 15%; and (iii) the Singapore Comptroller of Income Tax is satisfied that the tax exemption would be beneficial to the person resident in Singapore.
No income tax expense was provided by our Company as we are in a tax loss position. The unutilized tax benefits are accumulated and carried forward to offset future chargeable income.
We have not recognized deferred tax assets with respect to our carried forward tax losses as we are not able to estimate the timing of the availability of future taxable profits to utilize these tax losses, based on our operating history. In addition, before utilizing these tax losses carried forward, we would need to obtain the approval of the Inland Revenue Authority of Singapore.
Quantitative and Qualitative Disclosures about Market Risk
Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates. Our market risk exposure is primarily the result of fluctuations in interest rates and foreign exchange rates as well as, to a lesser extent, inflation.
Credit Risk
Our exposure to credit risk arises primarily from trade receivables. For other financial assets (including cash and cash equivalents), we minimize credit risk by dealing exclusively with high credit rating counterparties.
We have adopted a policy of only dealing with creditworthy counterparties. We perform ongoing credit evaluation of its counterparties’ financial condition and generally does not require collateral.
If our customers delay or default in their payments to us, we may have to make impairment provisions and write-off the relevant receivables. This in turn may materially and adversely affect our business, financial condition, and results of operation.
Trade receivables
Trade receivables is stated at the original amount less an allowance for doubtful receivable.
Trade receivable is recognized in the period when we have rendered services to our customers and when its right to consideration is unconditional. The amounts due are stated at their net estimated realizable value. We review the accounts receivable on a periodic basis and make general and specific allowances when there is doubt as to the collectability of individual balances.
In application of the general provision, the Company applies the simplified approach to provide for expected credit losses (“ECLs”). To measure the ECLs, trade receivables have been grouped based on shared credit risk characteristics and the days past due. We consider factors in assessing the collectability of its receivables, such as historical bad debts, changes in customers’ payment patterns, credit-worthiness and financial condition of the customers, current economic trends and other specific circumstances related to the accounts. An allowance for doubtful accounts is recorded in the period in which a loss is determined to be probable. Accounts receivable balances are written off after all collection efforts have been exhausted.
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Cash and cash equivalents
No expected credit losses are recognized from cash and cash equivalents arising from bank balances with financial institution because the probability of default by these financial institutions are negligible.
Liquidity risk
We are also exposed to liquidity risk which is the risk that we are unable to provide sufficient capital resources and liquidity to meet our commitments and business needs. Liquidity risk is controlled by the application of financial position analysis and monitoring procedures. When necessary, we will turn to other financial institutions and the shareholders to obtain short-term funding to meet the liquidity shortage.
Market risk
Interest Rate Risk
Our exposure to interest rate risk arises primarily from its debt and lease liabilities. Although interest rates for our loans are about fixed for the terms of the loans, the interest rates are subject to change upon renewal and at the bank’s discretion. Additionally, we may need to raise additional financing to support our operations, which could include equity or debt financing, in the immediate and near term. Rising interest rates would negatively impact our ability to obtain such financing on commercially reasonable terms or at all. Recently, due to the fixed interest rates in our terms of loans, our borrowing costs have not increased. However, we cannot predict the ultimate impact on our business of any prolonged or continued interest rate increases. To the extent we are required to obtain financing at higher borrowing costs to support our operations, we may be unable to offset such costs through price increases, other cost control measures, or other means. Any attempts to offset cost increases with price increases may result in reduced sales, increased customer dissatisfaction, or otherwise harm our reputation.
At the end of reporting period, the weighted average effective interest rates for the debt and lease liabilities were as follows:
| 2023 | 2022 | |||
| Fixed rates | ||||
| Debt | 1.5% – 6.4% | 1.5% – 6.4% | ||
| Lease liabilities | 1.5% – 2.5% | 1.5% – 2.5% |
Possible changes in interest rate are not expected to have a material impact on the result of our Company.
Foreign Currency Exchange Risk
The reporting currency of the Company is the U.S. dollar (“USD”). The functional currency of CGPL, CSPL, BAPL and CAPL is the SGD. The functional currency of CIGL is the U.S. dollar(“USD). The functional currency of CSSB is Malaysia Ringgit(“MYR”). The functional currency of CSL is Great Britain Pound(“GBP”).
For the subsidiaries whose functional currency is the MYR and GBP dollar, profit or loss and other comprehensive income and cash flows are translated at the average exchange rates during the reporting periods, assets and liabilities are translated at the unified exchange rate at the end of the period, and equity is translated at historical exchange rates. As a result, amounts relating to assets and liabilities reported on the statements of cash flows may not necessarily agree with the changes in the corresponding balances on the statements of financial position. Translation adjustments resulting from the process of translating the local currency financial statements into USD are included in comprehensive income/loss. Transactions denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing on the transaction dates. Assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing at the consolidated statement of financial position’s date with any transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in profit or loss as incurred.
Recently issued accounting pronouncements
The Company is an emerging growth company (“EGC”) as defined by the Jumpstart Our Business Startups Act (“JOBS Act”). The JOBS Act provides that an EGC can take advantage of extended transition periods for complying with new or revised accounting standards. This allows an EGC to delay adoption of certain accounting standards until those standards would otherwise apply to private companies. The Company elected to take advantage of the extended transition periods. However, this election will not apply should the Company cease to be classified as an EGC.
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For a discussion on certain revised IFRS accounting policies recently adopted, see Note 2 to our consolidated financial statements beginning on page F-8 of this prospectus.
In applying the group’s accounting policies, the directors are required to make judgements that have a significant impact on the amounts recognized and to make estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources in accordance with IFRS 1 First-time Adoption of International Financial Reporting Standards. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
Critical Accounting Policy
Revenue recognition
Revenue is measured based on the consideration to which the Company expects to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties.
The Group recognizes revenue from contracts with customers for the sale of goods based on the five-step model as set out below:
| (i) | Identify contract(s) with a customer. A contract is defined as an agreement between two or more parties that creates enforceable rights and obligations and sets out the criteria that must be met. |
| (ii) | Identify performance obligations in the contract. A performance obligation is a promise in a contract with a customer to transfer a good or service to the customer. |
| (iii) | Determine the transaction price. The transaction price is the amount of consideration to which the Group expects to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties. |
| (iv) | Allocate the transaction price to the performance obligations in the contract. For a contract that has more than one performance obligation, the Group allocates the transaction price to each performance obligation in an amount that depicts the amount of consideration to which the Group expects to be entitled in exchange for satisfying each performance obligation. |
| (v) | Recognize revenue when the Group satisfies a performance obligation. |
Revenue is recognized when the Company satisfies a performance obligation by transferring promised goods or services to the customer, which is when the customer obtains control of the goods or services.
A performance obligation may be satisfied at a point in time or over time.
Performance obligations satisfied over time
A performance obligation is satisfied over time when an entity transfers control of a good or service over a period. This occurs when one of three conditions is met: (a) the customer simultaneously receives and consumes the benefits provided by the entity’s performance; (b) the entity’s performance creates or enhances an asset that the customer controls during creation or enhancement; or (c) the entity’s performance does not result in an asset with an alternative use, and there exists an enforceable right to payment for the performance completed to date
In providing round-the-clock security manning, the customer simultaneously receives and consumes the benefits of the company’s performance. Therefore, the nature of the service sales is recognized over time, on a monthly billing cycle basis.
An asset created by an entity’s performance lacks an alternative use if contractual or practical restrictions prevent the entity from redirecting it during creation or completion. This assessment is fixed at contract inception and can only be revised if a contract modification substantially alters the performance obligation with mutual agreement from the parties involved. In providing installation solely as a prerequisite to our patent-protected service at the customer’s site, the customer will not have an alternate use for such installation. Performance obligations are satisfied over time, primarily through the provision of service sales.
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Right to payment for performance completed to date, an entity considers both contractual terms and applicable laws. This right does not necessarily specify a fixed amount but must ensure that the entity is compensated for work completed if the contract is terminated for reasons unrelated to the entity’s performance failure. Customers have entered into a contract with the Company that does recurring monthly billing, securing the Company’s right to payment for services rendered as they are consumed.
Performance obligations satisfied at a point in time
In cases where a performance obligation is not satisfied over time, it is fulfilled at a specific point in time. This determination relies on factors including the entity’s present right to payment, the transfer of legal title, physical possession of the asset by the customer, the transfer of significant risks and rewards of ownership, and the customer’s acceptance of the asset. Consideration of these indicators, alongside the control requirements outlined in the standard, helps determine when control of the asset is transferred, and the performance obligation is satisfied.
In the provision of installation at customer’s site amounting to creation of assets where customer has an alternative use. Such installation’s performance obligation are satisfied at the point in time.
The amount of revenue recognized is the amount allocated to the satisfied performance obligation under IFRS 15 Revenue from Contracts with Customers (“IFRS 15”).
Some contract(s) with customers include a variable consideration where revenue is recognized based on key performance indicators (“KPI”) assessed by the Company and the customer. Revenue is recognized on the percentage of KPI on contracted monthly fees.
| (a) | Man Guarding Services |
Revenue from a contract to provide man guarding services is recognized over time, using the output method to measure progress towards complete satisfaction of the service, as the customer simultaneously receives and consumes the benefits provided by the Company. In the applicable of the output method, the Company has used the appraisal of results achieved method. Accordingly, in view of the nature of the service income on a contract basis, management considers that this output method is most appropriate in measuring the progress towards complete satisfaction of these performance’s obligation.
| (b) | I-Guarding Services (including installation and maintenance services) |
I-Guarding Services is a comprehensive technology-integrated package of round-the-clock ongoing security monitoring and maintenance services, the service is consumed continuously and revenue is recognized over time through monthly invoicing.
The Company sells a range of products such as closed-circuit cameras, turnstiles, gates, authenticators, and cabling, and provides installation services for these products.
In the case, where the installation is part of a comprehensive package that includes monthly security monitoring and maintenance services, revenue is recognized over time as these services are consumed. This installation is a prerequisite for our comprehensive package, involving continuous service and maintenance of the installed facilities by the company. Therefore, the setup of these facilities constitutes a continuous performance obligation, inseparable from the provision of security services.
In the case, where the installation is part of a security setup without ongoing monthly security monitoring or maintenance services, revenue is recognized at a point in time upon completion of installation and acceptance by customers. This recognition occurs when control of the goods is transferred to the customers, in accordance with the agreed terms, and significant risks and rewards of ownership have been passed to them. Such service denotes a small portion of the total i-guarding services sales. The point-in-time sales are 3% (USD339,568) and 15% (USD749,021) of the total I-guarding sales in the financial year ended 2023 and 2022, respectively. These installations are standalone and capable of operating independently from our security services. Examples include installing turnstiles, modifying gates, and installing biometric locks.
| (c) | Training and consulting |
Training and consulting income is recognized at the time when such services have been performed and rendered.
| (d) | Licensing fee and vehicle rental income |
Licensing and vehicle rental income is recognized at the time when such services have been performed and rendered. These incomes were generated from related companies within the Group and the amount was eliminated in the consolidated financial statements.
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Cost of revenues (exclusive of depreciation and amortization shown separately)
Cost of revenues mainly consists of service costs, sub-contracting cost, salaries, consumables and others excluding depreciation and amortization expenses which is shown separately.
Financial instruments
Financial assets and financial liabilities are recognized in the group’s consolidated statement of financial position when the group becomes a party to the contractual provisions of the instrument.
Financial assets and financial liabilities are initially measured at fair value, except for trade receivables that do not have a significant financing component which are measured at transaction price. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in profit or loss and other comprehensive income.
Financial assets
All regular way purchases or sales of financial assets are recognized and derecognized on a trade date basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the marketplace.
All recognized financial assets are measured subsequently in their entirety at either amortized cost or fair value, depending on the classification of the financial assets.
Classification of financial assets
Debt instruments that meet the following conditions are measured subsequently at amortized cost:
The financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows.
The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Foreign exchange gains and losses
The carrying amount of financial assets that are denominated in a foreign currency is determined in that foreign currency and translated at the spot rate at the end of each reporting period. The exchange differences are recognized in the statement of profit or loss and other comprehensive income.
Impairment of financial assets
The group recognizes a loss allowance for expected credit losses on investments in debt instruments that are measured at amortized cost. The amount of expected credit losses is updated at each reporting date to reflect changes in credit risk since initial recognition of the respective financial instrument.
The group always recognizes lifetime expected credit losses (ECL) for trade and other receivables. The expected credit losses on these financial assets are estimated using a provision matrix based on the group’s historical credit loss experience, adjusted for factors that are specific to the debtors, general economic conditions, and an assessment of both the current as well as the forecast direction of conditions at the reporting date, including time value of money where appropriate.
For all other financial instruments, the group recognizes lifetime ECL when there has been a significant increase in credit risk since initial recognition. However, if the credit risk on the financial instrument has not increased significantly since initial recognition, the group measures the loss allowance for that financial instrument at an amount equal to 12-month ECL. Lifetime ECL represents the expected credit losses that will result from all possible default events over the expected life of a financial instrument. In contrast, 12-month ECL represents the portion of lifetime ECL that is expected to result from default events on a financial instrument that are possible within 12 months after the reporting date.
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Derecognition of financial assets
The group derecognizes a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the group neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the group recognizes its retained interest in the asset and an associated liability for amounts it may have to pay. If the group retains substantially all the risks and rewards of ownership of a transferred financial asset, the group continues to recognize the financial asset and also recognizes a collateralized borrowing for the proceeds received.
On derecognition of a financial asset measured at amortized cost, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognized in.
Financial liabilities and equity
Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.
Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the group are recognized at the proceeds received, net of direct issue costs.
Financial liabilities
All financial liabilities are measured subsequently at amortized cost using the effective interest method.
Financial liabilities that are not (i) contingent consideration of an acquirer in a business combination, (ii) held-for trading, or (iii) designated as at FVTPL, are measured subsequently at amortized cost using the effective interest method.
The effective interest method is a method of calculating the amortized cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial liability, or (where appropriate) a shorter period, to the amortized cost of a financial liability.
Derecognition of financial liabilities
The group derecognizes financial liabilities when, and only when, the group’s obligations are discharged, cancelled or have expired. The difference between the carrying amount of the financial liability recognized and the consideration paid and payable is recognized in.
Provisions and contingent liabilities
With reference to IAS 37, provisions are recognized when the group has a present obligation (legal or constructive) as a result of a past event, it is probable that the group will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.
The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the reporting date, taking into account the risks and uncertainties surrounding the obligation.
A contingent liability is a possible obligation that arises from past events whose existence would be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Group or a present obligation that is not recognized because it is not probable that an outflow of resources would be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. The Group does not recognize a contingent liability but discloses its existence in the consolidated financial statements (Refer Note 21 to the consolidated financial statements).
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Taxation
The income tax expense represents the sum of current and deferred income tax expense.
Current tax
The tax currently payable is based on taxable profit for the year. No provision for tax recognized is recognized during the fiscal year as the Group is in a tax loss position.
Deferred tax
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit and is accounted for using the liability method. Deferred tax liabilities are generally recognized for all taxable temporary differences and deferred tax assets are recognized to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilized. No deferred tax assetassets or liabilities were recognized by the Group during the fiscal year as the Group has net deferred tax asset arising from business losses that is not probable to be utilized.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled, or the asset is realized based on tax laws and rates that have been enacted or substantively enacted at the reporting date.
The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the group intends to settle its current tax assets and liabilities on a net basis.
Current tax and deferred tax for the year
Current and deferred tax are recognized in profit or loss and other comprehensive income, except when they relate to items that are recognized in other comprehensive income or directly in equity, in which case the current and deferred tax are also recognized in other comprehensive income or directly in equity respectively. Where current tax or deferred tax arises from the initial accounting for a business combination, the tax effect is included in the accounting for the business combination.
Goods and services tax (GST)
Revenues, expenses and assets are recognized net of the amount of associated GST, unless the GST incurred is not recoverable from the taxation authority. In this case it is recognized as part of the cost of acquisition of the asset or as part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the taxation authority is included with other receivables or payables in the balance sheet.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to the taxation authority, are presented as operating cash flows.
Leases — The Group as lessee
With reference to IFRS 16, the group assesses whether a contract is, or contains, a lease, at inception of the contract. The group recognizes a right-of-use asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee, except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low value assets (such as tablets and personal computers, small items of office furniture and telephones). For these leases, the group recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased assets are consumed.
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The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the group uses its incremental borrowing rate.
Lease payments included in the measurement of the lease liability comprise:
| ● | Fixed lease payments (including in-substance fixed payments), less any lease incentives receivable |
| ● | Variable lease payments that depend on an index or rate, initially measured using the index or rate at the commencement date |
| ● | The amount expected to be payable by the lessee under residual value guarantees |
| ● | The exercise price of purchase options, if the lessee is reasonably certain to exercise the options |
| ● | Payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to terminate the lease |
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the lessee’s incremental borrowing rate.
The Company generally uses the incremental borrowing rate as the discount rate. To determine the incremental borrowing rate, the Company obtains a reference rate and makes certain adjustments to reflect the terms of the lease and the asset leased.
Lease payments included in the measurement of the lease liability comprise:
| ● | Fixed lease payments (including in-substance fixed payments), less any lease incentives receivable |
| ● | Variable lease payments that depend on an index or rate, initially measured using the index or rate at the commencement date |
| ● | The amount expected to be payable by the lessee under residual value guarantees |
| ● | The exercise price of purchase options, if the lessee is reasonably certain to exercise the options |
| ● | Fixed lease payments (including in-substance fixed payments), less any lease incentives receivable |
| ● | Variable lease payments that depend on an index or rate, initially measured using the index or rate at the commencement date |
| ● | The amount expected to be payable by the lessee under residual value guarantees |
| ● | The exercise price of purchase options, if the lessee is reasonably certain to exercise the options |
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The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made.
The group remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever:
| ● | The lease term has changed or there is a significant event or change in circumstances resulting in a change in the assessment of exercise of a purchase option, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate. |
| ● | The lease payments change due to changes in an index or rate or a change in expected payment under a guaranteed residual value, in which cases the lease liability is remeasured by discounting the revised lease payments using an unchanged discount rate (unless the lease payments change is due to a change in a floating interest rate, in which case a revised discount rate is used). |
| ● | A lease contract is modified, and the lease modification is not accounted for as a separate lease, in which case the lease liability is remeasured based on the lease term of the modified lease by discounting the revised lease payments using a revised discount rate at the effective date of the modification. |
The group did not make any such adjustments during the periods presented.
The Company recognizes a right-of-use asset and lease liability at the lease commencement date for all lease arrangement for which the Company is the lessee, except for leases which have lease term of 12 months or less and leases of low value assets for which the Company applied the recognition exemption allowed under IFRS 16 Leases (“IFRS 16”). For these leases, the Company recognizes the lease payment as an operating expense on a straight-line basis over the term of the lease.
The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, less any lease incentives received, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease term. When the lease transfers ownership of the underlying asset to the Company by the end of the lease term or the cost of the right-of-use asset reflects that the Company will exercise a purchase option, the right-of-use asset will be depreciated over the useful life of the underlying asset, which is determined on the same basis as those of property and equipment. The right-of-use asset is also reduced by allowances for expected credit losses, if any, and adjusted for certain remeasurements of the lease liability, where applicable.
Right-of-use assets are presented within “property and equipment”
The group applies IAS 36 to determine whether a right-of-use asset is impaired and accounts for any identified impairment loss as described in the ‘Property and Equipment’ policy.
Where a contract contains more than one lease component, the Company allocates the consideration in the contract to each lease component on the basis of the relative standalone price of the lease component. Where the contract contains non-lease components, the Company applied the practical expedient to not to separate non-lease components from lease components, and instead account for each lease component and any associated non-lease components as a single lease component.
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Critical Accounting Estimates
Key sources of estimation uncertainty
The key assumptions concerning the future, and other key sources of estimation uncertainty at the reporting period that may have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next fiscal year, are discussed below
| i. | Estimated useful lives of property and equipment |
The Group reviews annually the estimated useful lives of property and equipment based on factors such as business plans and strategies, expected level of usage and future technological developments. It is possible that future results of operations could be materially affected by changes in these estimates brought about by changes in the factors mentioned. The carrying amounts of the Group’s property and equipment are disclosed in Note 5 of the consolidated financial statements.
| ii. | Expected credit losses assessment on trade and other receivables |
The expected credit losses on trade and other receivables of the Group are estimated using a provision matrix based on the group’s historical credit loss experience, adjusted for factors that are specific to the debtors, general economic conditions and an assessment of both the current as well as the forecast direction of conditions at the reporting date, including time value of money where appropriate.
In assessing the credit risk of the trade and other receivables, the group considers qualitative and quantitative reasonable and supportable forward-looking information.
| iii. | Provision for accrued expenses |
The Group recognized the provisions according to the best estimate of the expenditure required to settle the present obligation at the end of the reporting period. If it is no longer probable that an outflow of resources embodying economic benefits will be required to settle the obligation, the provision is reversed. In assessing the provision, the group considers qualitative and quantitative reasonable and supportable forward-looking information.
| iv. | Contingent liabilities |
The disclosure of contingent liabilities requires the management to assess the probability of the outflow of resources required to settle the obligation arising from legal cases as disclosed in Note 20 to the consolidated financial statements. In assessing probability of the contingent liabilities, the group considers qualitative and quantitative information including penal solicitors’ opinion on the relevant cases.
| v. | Estimated useful lives of intangible assets |
The Group reviews annually the estimated useful lives of intangible assets based on factors such as business plans and strategies, expected level of usage and future technological developments. It is possible that future results of operations could be materially affected by changes in these estimates brought about by changes in the factors mentioned. The carrying amounts of the Group’s intangible assets are disclosed in Note 7 of the consolidated financial statements.
| vi. | Fair value of financial instruments |
The financial instruments of the Group such as receivables, borrowings and payables are carried at fair value. The management reviews periodically the degree of which fair value input of the financial instruments are observable to determine the fair value of the financial assets or liabilities. The fair value adopted by management is based on quoted price in active markets or unquoted price for identical assets or liabilities.
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CORPORATE HISTORY AND STRUCTURE
Our Corporate History
Concorde International was incorporated in the British Virgin Islands on May 2, 2023. Our registered office in the British Virgin Islands is at Conyers Trust Company (BVI) Limited of Commerce House, Wickhams Cay 1, PO Box 3140, Road Town, Tortola, British Virgin Islands VG1110. Our principal executive office is at 3 Ang Mo Kio Street 62, #01-49 LINK@AMK, Singapore 569139. Our telephone number at this location is +65 2960802. Our principal website address is https://concordesecurity.com. The information contained on our website does not form part of this prospectus.
Concorde International was incorporated to acquire and hold, indirectly, Concorde Security Pte Ltd (Singapore), Concorde Security Sdn Bhd (Malaysia), Concorde Security Limited (UK), Concorde Asia Pte Ltd (Singapore) and Berjaya Academy Pte Ltd (Singapore).
Concorde International Group Pte Ltd (Singapore) was incorporated on June 12, 2023. It is a holding company and a 100% owned subsidiary of Concorde International. Its registered office is at 3 Ang Mo Kio Street 62, #01-49 LINK@AMK, Singapore 569139.
Concorde Security Pte Ltd (Singapore) was incorporated on June 16, 2005. Concorde Security Pte Ltd’s main business is in the provision of man-guarding and i-Guarding services in Singapore. It has received numerous awards and recognition. Notably, it has received various grants from the Infocomm Media Development Authority of Singapore (IMDA).
Security Industry Transformation Map (ITM) Pilot Program 2018/2019 — Funding of SG$1.8M for building owners/security agencies to adopt IFS solutions.
Productivity Solutions Grant (PSG) 2021/2022 — IFS solutions is the only pre-approved IT solutions under PSG in the Go Business Singapore portal under the category of security surveillance.
Advanced Digital Solutions (ADS) 2022/2023 — An initiative under the SMEs Go Digital programme for building owners/facilities managing agencies to adopt IFS solutions enhanced further as a complete Smart Security Solutions.
On January1, 2019, Lek Seck Tin (“Lek Family”) invested US$1,000,000 in exchange for an equity stake of 1.48% of Concorde Security Pte Ltd (Singapore).
On November 27, 2018, Wolfgang Steuerle and Yogeshwari A/P Subramaniam (“Wolfgang”) invested US$500,000 in exchange for an equity stake of 0.74% of Concorde Security Pte Ltd (Singapore).
On July 29, 2005, Sharifah Noriati Binte Said Omar (“Sharifah”) was allocated 0.98% of Concorde Security Pte Ltd (Singapore) in lieu of services provided.
Concorde Security Sdn Bhd (Malaysia), Concorde Singapore’s 100% owned subsidiary, was incorporated in Malaysia on January 13, 2015. It is currently at a development stage.
Concorde Security Limited (UK), Concorde Singapore’s 100% owned subsidiary, was incorporated in the United Kingdom on December 23, 2016. It is currently in a development stage.
Concorde Asia Pte Ltd, Concorde Singapore’s 70% indirectly owned subsidiary, was incorporated in Singapore on October 8, 2013.
Berjaya Academy Pte Ltd, Concorde Singapore’s 70% indirectly owned subsidiary, was formed in Singapore on March 6, 2020.
Concorde i-FAST USA Inc.(Texas), Concorde Singapore’s 100% owned subsidiary, was incorporated in State of Texas on April 25, 2024.
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Group Reorganization
In connection with this offering, we have undertaken a reorganization of our corporate structure (the “Reorganization”) in the following steps:
| ● | On May 2, 2023, we incorporated Concorde International Group Ltd under the laws of the British Virgin Islands; |
| ● | On June 12, 2023, we incorporated Concorde Singapore as a wholly owned subsidiary of Concorde International Group Ltd; |
| ● | On July 31, 2023, Concorde Singapore acquired 100% of the equity interests in Concorde Security Limited from Concorde Group Pte Ltd. |
| ● | On October 27, 2023, Concorde International Group Pte Ltd acquired 100% of the equity interests in Concorde Security Sdn Bhd from Swee Kheng Chua; |
| ● | On November 1, 2023, Concorde International Group Pte Ltd acquired 96.81% of the equity interests in Concorde Security Pte Ltd from Swee Kheng Chua. Concorde Security Pte Ltd is a 96.81% subsidiary of Concorde International Group Pte Ltd; |
| ● | On November 1, 2023, Concorde International Group Pte Ltd acquired 100% of the equity interests in Concorde Asia Pte Ltd from Swee Kheng Chua. On November 3, 2023, Weilekai Investment Pte Ltd acquired 30% of the equity interests in Concorde Asia Pte Ltd from Concorde International Group Pte Ltd. Consequently, Concorde Asia Pte Ltd is a 70% indirectly owned subsidiary of Concorde International Group Pte Ltd; |
| ● | On November 1, 2023, Concorde International Group Pte Ltd acquired 100% of the equity interests in Berjaya Academy Pte Ltd from Sharifah Noriati Binte Said Omar. On November 8, 2023, Weilekai Investment Pte Ltd acquired 30% of the equity interests in Berjaya Academy Pte Ltd from Concorde International Group Pte Ltd. Consequently, Berjaya Academy Pte Ltd is a 70% indirectly owned subsidiary of Concorde International Group Pte Ltd. Consequently, Concorde International Group Ltd, through a restructuring which is accounted for as a reorganization of entities under common control, became the ultimate holding company of all the companies mentioned above. |
Our Corporate Structure
The following diagram illustrates our corporate structure as of the date of this registration statement.
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We operate within the security and facilities management industry. The markets that we address include residential communities, commercial, educational institutions, government organizations, shopping centers, healthcare centers and transportation hubs, and logistics centers.
We believe that the Singapore security and facilities market is large, growing and economically resilient. According to Mordor Intelligence (See https://www.mordorintelligence.com/industry-reports/singapore-facility-management-market), the Singapore security and facilities market is expected to grow from USD 1.01 billion in 2023 to USD 1.19 billion by 2028, representing a Compound Annual Growth Rate (CAGR) of approximately 1.99%.
The security and facilities management industry in Singapore is relatively fragmented. According to the Ministry of Home Affairs Singapore, there are currently more than 49,000 security officers and 250 security agencies in Singapore. With the heightened terrorism threat, increased demand for security services, and a slowing pace of workforce growth, the industry needs to undergo transformation to increase productivity and make job requirements less manpower intensive.
As a result, the Singapore government has developed the Security Industry transformation Map (“Security ITM”). The Security ITM seeks to develop a vibrant, technologically advanced and competitive security industry that delivers better security outcomes for Singapore and provides good jobs for Singaporeans. Led by the Ministry of Home Affairs, the Security ITM is a collective effort by industry associations, companies, unions, service buyers, security agencies and government agencies.
Shift from Headcount-based Model to Integrated Security Solutions
The Security ITM has identified four strategies to transform the industry and enable security companies to transition from merely supplying manpower to delivering integrated security solutions. The four strategies are: (i) supporting technology and innovation; (ii) promoting “best sourcing” of services, with Government taking the lead; (iii) aligning regulations with ITM objectives to improve standards; and (iv) improving skills to enable career progression.
The COVID-19 pandemic became an important catalyst of change, leading to the rapid adoption of technologies in the security industry. While we believe that the industry is still labor-intensive and relatively low-tech, the Singapore government’s support for industry transformation is expected to drive technology integration, presenting a significant opportunity for us.
As a result, we believe that there will be a shift in the industry as the market transforms from headcount based model to a more integrated security based solution over the next few years.
In addition, we believe that there are opportunities for us to expand globally, especially into markets where labor costs are rising rapidly and customers are demanding higher levels of service with technology integration. According to Fortune Business Insights (See https://www.fortunebusinessinsights.com/industry-reports/facility-management-market-101658), the global facility management market is projected to grow from $1,291.6 billion in 2023 to $2,031.4 billion by 2030, representing a compound annual growth rate (CAGR) of 6.7% during the forecast period.
We believe that the key drivers to the growth of the industry includes:
| ● | Growing demand for security related solutions and service |
| ● | Increasing awareness in cleanliness and maintenance management |
| ● | Development of Smart buildings and growing adoption of IOT sensors and other innovative technologies |
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Overview
Concorde International Group Limited is an integrated security services providers that combines physical manpower and innovative technology to deliver effective security solutions. In 2014, we were awarded “The Business Model Innovation Award” by the Singapore Manufacturing Federation. In 2015, we were awarded the “Best Innovative Use of Infocomm Technology Award” by the Singapore Infocomm Technology Federation (“SiTF”). In 2016, we were awarded the “Most Innovative Use of Infocomm Technology (Private Sector-SME) Award” by the Infocomm Media Development Authority of Singapore (“IMDA”, formerly known as the Infocomm Development Authority) and the Singapore Infocomm Technology Federation (“SiTF”). In 2017, we were awarded the “IP Awards” by the World Intellectual Property Organization — Intellectual Property Office of Singapore (WIPO-IPOS). In addition, in 2017 The Nanyang Technological University of Singapore recognized our innovative solution by publishing it as a case study entitled “The Transformation of Concorde Security Pte Ltd” via its Nanyang Technoprenuership Center. In the same year, the Singapore Management University and Harvard Business Publishing Education also recognized our innovation by publishing a case study entitled “Main Case : The Resilience of a Disruptive Innovator : Concorde Security”. From 2018 to 2019, in recognition of our solution in transforming the industry, the Infocomm Media Development Authority of Singapore (“IMDA”) approved our solutions in the Singapore government’s Industry Transformation Map Pilot Programme. From 2020 to 2021, in recognition of our technology and solutions, we were included in the “Pre-approved IT solutions vendor” under the category of security, by the Infocomm Development Authority of Singapore (“IMDA”). From 2022 to 2023, in recognition of our technology solution, the Infocomm Development Authority of Singapore (“IMDA”) approved our solutions in the Singapore government’s Advanced Digital Solutions (ADS) under the Small Medium Enterprises Go Digital Programme. With these awards and recognitions, we believe we are the leading solution provider in Singapore. Through the integration of our patented technology solution, we help our clients reduce costs and enhance security. We have experienced significant revenue growth, primarily driven by the increasing labor costs and increasing demands in security and facilities management.
Since our establishment in Singapore in 1997, we have built a track record in the professional security community by consistently providing high-quality security manpower. Recognizing manpower sustainability with our ever-advancing society, in 2014, we decided to transit into a security solution services company using our innovative business model. With our technological inventive solution, we deliver a higher level of security performance with headcount uplifted of higher skillset, better reward as well as much sought after work-life balances for the new era security workforce. As a result, we have received numerous awards in Singapore, recognizing our innovative technology and our contribution to producing the next generation of reliable security solutions. Anchored by our patented technology applications and pioneering solutions, we provide top-tier security and facilities management services to commercial, financial, industrial, and governmental customers in Singapore.
We offer a range of services to enhance security and safety: (1) i-Guarding Services; (2) Man-Guarding Services; and (3) Consultancy and Training Services. Our i-Guarding Services leverages technology to increase efficiency, with a mobile platform and cluster® aggregation model of higher skillset workforce. It accounted for about 98.09% and 99.09% of revenues for fiscal year 2023 and 2022, respectively. Man-Guarding Services employs trained security officers to maintain safety and deter unlawful activities, making up about 1.41% and 0.24% of revenues for fiscal year 2023 and 2022, respectively. Consultancy and Training Services provide expert guidance tailored to clients’ needs, representing about 0.50% and 0.67% of total revenues for fiscal year 2023 and 2022, respectively.
We have gained recognition for our disruptive innovation in the integrated monitoring of properties, assets, and building service systems. This ensures round-the-clock surveillance for complete security and operational efficiency. This achievement is made possible through our suite of intelligent security solutions, known as “I-Guarding Services.” One of our flagship services, the groundbreaking I-Man Facility Sprinter is a mobile vehicular platform that revolutionizes security and facility maintenance services. These pioneering solutions not only improve workers’ compensation, skill sets, and working conditions but also redefine the overall business landscape of the industry.
Our company’s second flagship product is the Intelligent Facility Authenticator. The IFA is an innovative solution that leverages advanced kiosk technology to enhance security and streamline visitor management. In response to the challenges of limited manpower and rising costs, the IFA system automates the issuance of secure passes and access cards, eliminating the need for physical human interaction. It works by sending secure pass-icons to visitors, verifying their identity upon entry, and dispensing access cards with varying levels of security clearance. This technology not only enhances security within buildings but also offers efficient visitor management services, making it a game-changer in industries where kiosk adoption is increasing. Ultimately, IFA represents a significant advancement in security access control without relying on human intervention.
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For the fiscal year ended December 31, 2023 and 2022, more than 96% and 85% respectively, of our revenues were generated by annual recurring contracts. 99% of our clients were based in Singapore. In the fiscal year ended December 31, 2022, our top two customers, Ceva Logistics Singapore Pte Ltd and JTC Corporation, accounted for approximately 10% and 10% of our total revenue, respectively. In the fiscal year ended December 31, 2023, our revenue generated by annual recurring contract increased 11% to 96% as we continued to focus on securing recurring contracts to ensure long-term financial stability and growth. Our top two customers, Singapore University of Technology and Design and People’s association at OnePunggol accounted for approximately 8% and 7% of our total revenue, respectively.
Our Products and Services
i-Guarding Services
In a traditional security deployment, each building or location hires at least one guard per shift. Each 24-hour shift requires at least three guards stationed at the building or location. Traditional security deployment, based solely on manpower, faces a few key challenges: (i) unreliability of guards due to human nature, as guards often fall asleep while on duty, especially during the night shift; (ii) shortages in hiring guards; and (iii) rising labor costs. Our i-Guarding services address these issues and improve the work-life balance of the guards.
According to the diagram, our i-Guarding service consists of a mobile monitoring and response vehicle (known as the IFS) that patrols a designated radius, covering numerous buildings or locations within a 24-hour period. Each building or location installs electronic security systems that include access control systems, security monitoring cameras, and sensors that can be integrated with our IFS. As a result, instead of deploying guards at each location, these electronic security systems can be used. These systems are connected to our IFS via existing telecommunications infrastructures, including Super Wifi, 4G, or 5G networks. Should an alarm be triggered, the IFS will immediately respond via the remote command center within the vehicle and provide on-site response if the need arises. As a result, clients can reduce their reliance on manpower guards.
Each IFS will be manned by 3 I-specialists. This includes a driver and two security technicians. Each IFS can monitor and manage at least 15 buildings or locations within the deployment radius. This as a result increases manpower efficiency and enhance service levels due to the reduction of human errors resulting from the traditional security deployment model. Our installation and maintenance technicians, along with our customer service representatives, are dedicated to delivering a high-quality customer service experience. This commitment enhances our brand, improves customer satisfaction, increases customer retention, and accelerates the adoption of additional interactive automation solutions. The cluster® aggregation model allows a team of 3 security officers, with one of them being technically trained, to oversee a cluster of premises ranging from 5, 10, to 15 premises within a 15-minute radius.
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For the fiscal year ended December 31, 2023 and 2022, our i-Guarding Services accounted for approximately 98.08% and 99.09%, respectively, of our total revenues. It also encompasses the design, implementation, and installation of security systems to protect physical assets and personnel from potential threats and vulnerabilities. This includes IFA, Visitor Management Systems (“VMS”), Keys Management Systems (“KMS”), security turnstile facilities, Internet of Things (“IoT”) devices, and other smart security solutions. It involves a strategic assessment of risks, the selection and deployment of appropriate security measures, and the establishment of protocols for ongoing maintenance and monitoring. This integrated approach ensures the safety and integrity of the environment or infrastructure in question, encompassing both physical security elements such as surveillance systems, access controls, and alarm systems. The ultimate goal of a security project and installation is to mitigate risks and safeguard against unauthorized access, theft, and other security threats.
Man-Guarding Services
Our man-guarding services provides a vital layer of protection for various clients and properties. Our security officers are professionally trained and play a critical role in maintaining safety while preventing unauthorized access or unlawful activities in a given area. They offer a combination of prevention, deterrence, and response to maintain a safe and secure environment, making them an integral part of overall security measures. This service does not involve technology applications or solutions. Service contracts are signed on an annual basis, and revenues are collected and recognized on a monthly basis.
For the fiscal year ended December 31, 2023 and 2022, our Man-Guarding Services was approximately 1.41% and 0.24%, respectively, of our total revenues.
Consultancy and Training Service
Consultancy and training services provide expert guidance and training support to clients seeking to enhance their security and safety knowledge domains. The service is structured specifically to meet the clients’ needs.
For the fiscal year ended December 31, 2023 and 2022, our Consultancy and Training Service was approximately 0.50% and 0.67%, respectively, of our total revenues.
Our Awards and Recognitions
Since our transition into a security solution services company using our unique business model innovation with our technological inventive solution in 2014, we received a number of awards and accreditations in recognition of our performance and quality services. The following table sets forth the awards and accreditations we have been granted up to December 31, 2023:
| Year | Award/Recognition | Awarded by or Recognized by | Recipient | |||
| 2014 | Business Model Innovation Award | Singapore Manufacturing Federation | Concorde Security Pte Ltd | |||
| 2015 | Best Innovative Use of Infocomm Technology Award | Singapore Infocomm Technology Federation (SiTF) | Concorde Security Pte Ltd | |||
| 2016 | Most Innovative Use of Infocomm Technology (Private Sector — SME) Award | Infocomm Media Development Authority of Singapore (IMDA) and Singapore Infocomm Technology Federation (SiTF) | Concorde Security Pte Ltd | |||
| 2017 | IP Awards | World Intellectual Property Organization — Intellectual Property Office of Singapore (WIPO-IPOS) | Concorde Security Pte Ltd & Concorde Asia Pte Ltd | |||
| 2017 | Case Study: The Transformation of Concorde Security Pte Ltd | Nanyang Technopreneurship Center | Concorde Security Pte Ltd | |||
| 2017 | Main Case The Resilience of a Disruptive Innovator: Concorde Security | Singapore Management University and Harvard Business Publishing Education | Concorde Security Pte Ltd |
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| Year | Award/Recognition | Awarded by or Recognized by | Recipient | |||
| 2018 – 2019 | Industry Transformation Map Pilot Programme | Infocomm Media Development Authority of Singapore (IMDA) | Concorde Security Pte Ltd | |||
| 2020 – 2021 | Pre-approved IT solutions vendor under category of security | Infocomm Media Development Authority of Singapore (IMDA) | Concorde Security Pte Ltd | |||
| 2022 – 2023 | Advanced Digital Solutions (ADS) under the SMEs Go Digital Programme | Infocomm Media Development Authority of Singapore (IMDA) | Concorde Security Pte Ltd |
Competition
The security and facilities management industry in Singapore is relatively fragmented. According to the Ministry of Home Affairs in Singapore, there are currently more than 49,000 security officers and 250 security agencies operating in the country. Due to the heightened terrorism threat, increased demand for security services, and a slowing pace of workforce growth, the industry is undergoing transformation to enhance productivity and reduce the manpower-intensive nature of the job requirements.
This industry faces high competition and pricing pressures. Its primary competitor dominating players are Certis Cisco Security, Aetos Security and SATS Security which is majorly owned by the Singapore government. Additionally, there are several other international security service providers, including Securitas, Prosegur and Allied Universal G4S. However, most of these competitors continue to focus on providing labor-intensive services.
Concorde stands out as the only security services provider that has successfully transitioned into a mobile command center security services model based on a cluster® of buildings concept with dedicated on-site response.
Our Competitive Strengths
We believe that the following competitive strengths contribute to our success and differentiate us from our competitors:
| ● | Proven Solution that is protected by Patents. Our patent-protected solution that has been proven to reduce the need for manpower while maintaining, and even increasing, the quality of service levels for security and facilities management. |
| ● | Superior-Class Customer Service. Rather than competing purely on price, we emphasize the quality of our services, which we believe is distinguished by superior customer service. |
| ● | Deep industrial knowledge and experience. We believe that our focus on safety and security, coupled with our sales consultants, our solid reputation for and expertise in providing reliable security and monitoring services through our patent-protected business model vide our cluster® mobile command centers, our dependable product solutions, and our highly skilled installation and service capabilities, position us well to compete with both traditional and new competitors. |
Our Growth Strategies
We believe that implementing the following growth strategies will continue to position our company as the leader in the markets we serve:
| ● | Continue to grow our recurring revenue business. For the fiscal years ended December 31, 2023 and 2022, our recurring revenue was approximately 96% and 85%, respectively, of our total revenues. Monthly recurring revenue allows us to achieve a more consistent and predictable income stream. In addition, it should improve our profitability as we continue to roll out more i-Guarding services. Each building or location deployed under the I-Guarding represents incremental revenues with almost the same cost levels as one IFS can service at least 15 or more buildings or locations. Serving our recurring customers should require lower acquisition and marketing costs as compared to new customers. Hence, signing on more buildings or locations will lead to increased revenues and profitability. We see significant market opportunities for our services because customers in our target markets prefer outsourced security and facilities management services that offer real-time security monitoring for continuous protection and rapid responses to security breaches and fire alarms. We intend to continue pursuing opportunities for recurring revenue by developing new and innovative products and by continuing our aggressive sales and marketing efforts. In order to build scale, we will have to continue to spend on marketing and development. We plan to enhance our operational capacity by expanding our fleet of IFS (response vehicles). Concurrently, we will increase management hiring to implement more efficient processes and optimize routes and schedules to maximize efficiency. As a result, this may impact our overall profitability. |
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| ● | Maintain our commitment to best-in-class customer service. We are focused on fostering a culture dedicated to providing industry-leading customer service to our extensive customer base. We operate through a fleet of 5 cluster command centers in Singapore. From these mobile locations, our teams offer monitored security, interactive residential and commercial automation solutions, including installation, field service, repair, ongoing monitoring, and customer support. |
Our installation and service technicians, along with our customer service representatives, are dedicated to delivering a high-quality customer service experience. This commitment enhances our brand, improves customer satisfaction, increases customer retention, and accelerates the adoption of additional interactive automation solutions. As a result, it drives returns on new customer acquisition expenditures and enhances cash flow generation. We pride ourselves on providing on-site responses within a cluster® radius of 15 minutes of security alerts for the majority of our customers.
| ● | Maintain our high-quality customer base. We believe customer retention is also strongly correlated with the credit quality of our customers. We plan to maintain our focus on strict underwriting standards and will establish processes to evaluate potential new customers’ creditworthiness to improve our customer selection or require upfront payments for higher-risk customers. We expect that our focus on generating high-quality customers will continue to result in a portfolio of customers with attractive credit scores, thereby improving retention, decreasing credit risk exposure, and generating a strong, long-term customer portfolio that generates robust returns on new customer acquisition expenditures and drives strong cash flow generation. |
| ● | Disciplined expansion of our patented protected solution beyond Singapore. We strongly believe that there will be significant demand for our solutions due to the continuous increase in labor costs and the growing demand for high-quality security and facilities management services. Our plan is to expand our geographical coverage and export our successful business model beyond Singapore within the next 24 months. We plan to expand to Malaysia, Australia, and North America markets via partnerships with local security service provider who already have an existing customer base that needs our solution to improve service delivery and to mitigate the increasing labor costs. We have not signed up with any partners yet, but we aim to have them in place by end 2024. We expect to spend approximately US$500,000 to develop each market and will rely on available internal cash flows. Our business plan is subject to change based on the change of global economy and other factors that may affect our business operations. |
Marketing and Advertising
As of the date of this prospectus, we serve approximately 89 customers in Singapore. Our marketing strategies target both our existing customers and potential new ones.
We manage our existing customer base to maximize customer lifetime value. This involves continuous evaluation of our product offerings, pricing, and service strategies, as well as cost management to provide better services and upgrade customers to technology-related solutions, ultimately achieving long customer tenure. Our ability to increase average selling prices for individual customers depends on factors such as service quality, the introduction of additional features, and the competitive environment.
To support customer base growth and enhance brand awareness, we promote our seminars, events, and public speaking opportunities.
Seasonality
Seasonality does not materially affect our business or operating results. Due to our business diversification, we have not experienced significant seasonal fluctuations in market demands.
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Intellectual Property
Patents, trademarks, copyrights, and other proprietary rights are important to our business, thus we continuously refine our intellectual property strategy to maintain and improve our competitive position. We register new intellectual property to protect our ongoing technological innovations and strengthen our brand, and we take appropriate action against infringements or misappropriations of our intellectual property rights by others. We review third-party intellectual property rights to help avoid infringement and to identify strategic opportunities.
We own a portfolio of patents and patent applications that relate to a variety of monitored security and automation technologies utilized in our business. Our portfolio of patent applications are as follows:
| Patent #1: A mobile control unit, a facility management system, a mobile unit control system, a facility management method and a mobile unit control method | ||||||
| Country | Patent Number | Grant Date | Notes | |||
| Australia | 2013403341 | 29 November 2018 | — | |||
| Austria | — | 3 March 2021 | Validated | |||
| Belgium | — | 3 March 2021 | Validated | |||
| Canada | — | 3 March 2021 | Pending | |||
| Denmark | — | 3 March 2021 | Validated | |||
| Europe | 3058557 | 3 March 2021 | — | |||
| Finland | — | 3 March 2021 | Validated | |||
| France | — | 3 March 2021 | Validated | |||
| Germany | — | 3 March 2021 | Validated | |||
| Hong Kong | — | — | Pending | |||
| Indonesia | IDP000068823 | 18 May 2020 | — | |||
| Ireland | — | 3 March 2021 | Validated | |||
| Italy | 502021000045734 | 3 March 2021 | Validated | |||
| Luxembourg | — | 3 March 2021 | Validated | |||
| Malaysia | MY-187149-A | 4 September 2021 | — | |||
| Mexico | 366057 | 26 June 2019 | — | |||
| Netherlands | — | 3 March 2021 | Validated | |||
| Portugal | — | 3 March 2021 | Validated | |||
| Saudi Arabia | 6402 | 2 April 2019 | — | |||
| Singapore | 11201401790Q | 30 March 2015 | — | |||
| South Africa | 2016/03082 | 29 November 2017 | — | |||
| Spain | — | 3 March 2021 | Validated | |||
| Sri Lanka | 18746 | 16 October 2017 | — | |||
| Sweden | — | 3 March 2021 | Validated | |||
| Switzerland & Liechtenstein | — | 3 March 2021 | Validated | |||
| Taiwan | I647662 | 11 January 2019 | — | |||
| Thailand | 90976 | 16 January 2023 | — | |||
| Turkey | TR2021009092T4 | 3 March 2021 | Validated | |||
| UK | — | 3 March 2021 | Validated | |||
| US | US 11,854,354B2 | 26 December 2023 | ||||
| US (continue-in-part) | 18512004 (application no.) | Filed on 16 Nov 2023 | ||||
| Vietnam | 28278 | 7 April 2021 | — | |||
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| Patent #2: Security control system for granting access and security control method thereof | ||||||
| Country | Patent Number | Grant Date | Notes | |||
| Australia | 2014398695 | 3 January 2019 | — | |||
| Cambodia | KH/RRP.SG/2017/00009 | 5 March 2018 | — | |||
| Canada | 2,953,503 | 17 September 2019 | — | |||
| Europe | — | — | Pending | |||
| Hong Kong | — | — | Pending | |||
| Indonesia | IDP000054272 | 30 October 2018 | — | |||
| Japan | 6816218 | 25 December 2020 | — | |||
| Korea | 10-2387126 | 12 April 2022 | — | |||
| Malaysia | MY-177786-A | 23 September 2020 | — | |||
| Philippines | 1-2016 502598 | 16 March 2022 | — | |||
| Qatar | B.K.Q. 184/2021 | 28 November 2021 | — | |||
| Saudi Arabia | SA 7729 | 21 March 2021 | — | |||
| Singapore | 11201407621R | 29 March 2017 | — | |||
| South Africa | 2017/00401 | 25 April 2018 | — | |||
| Taiwan | I653608 | 11 March 2019 | — | |||
| Thailand | — | — | Pending | |||
| UAE | 4981 | 16 December 2022 | ||||
| US | US 9,786,106 B2 | 10 October 2017 | — | |||
| Vietnam | 31865 | 4 April 2022 | — | |||
| Patent #3: An offshore security monitoring system and method | ||||||
| Country | Patent Number | Grant Date | Notes | |||
| Australia | 2014405635 | 25 July 2019 | — | |||
| Europe | 3188964 | 4 August 2021 | — | |||
| Malaysia | MY-184329-A | 1 April 2021 | — | |||
| Singapore | 11201701752U | 7 April 2020 | — | |||
| Taiwan | I674559 | 11 October 2019 | — | |||
| UK | 3188964 | 4 August 2021 | Validated | |||
| US | US 9,953,513 B2 | 24 April 2018 | — | |||
| Patent #4: Mobile Monitoring System, Mobile Monitoring Unit and Mobile Monitoring Method | ||||||
| Country | Patent Number | Grant Date | Notes | |||
| Australia | — | — | Allowed on 2-Jan-2024 | |||
| Bangladesh | 1006362 | 9 February 2022 | — | |||
| Europe | — | — | Pending | |||
| Hong Kong | — | — | Pending | |||
| Malaysia | — | — | Pending | |||
| Qatar | — | — | Pending | |||
| Singapore | — | — | Pending | |||
| UAE | — | — | Pending | |||
| US | US 11,688,270 B2 | 27 June 2023 | ||||
We also own a portfolio of trademarks and trademark applications in Singapore and globally as shown below:
| Trademark #1: CONCORDE | ||||||
| Country | Trademark Number | Grant Date | Notes | |||
| Singapore | 40201806077W | 4 July 2019 | — | |||
| International Registration (IR) | 1446192 | 2 October 2018 | — | |||
| IR — UK | 1446192 | 15 April 2019 | — | |||
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| Trademark #2: CLUSTER | ||||||
| Country | Trademark Number | Grant Date | Notes | |||
| Singapore | 40202110784Q | 16 December 2021 | — | |||
| Design #1: Terminal with Screen | ||||||
| Country | Design Number | Grant Date | Notes | |||
| Singapore | 30201703562R | 5 April 2017 | — | |||
Facilities
We own approximately 735 sqm of office space in Singapore, which serves as our corporate headquarters. It is located at 3 Ang Mo Kio Street 62, #01-49 LINK@AMK, Singapore 569139.
Additionally, we lease approximately 292 sqm of office space in Singapore, as follows:
| ● | Block 808 French Road, #03-27 Kitchener Complex, Singapore 200808. Approximately 92 (Sqm) |
| ● | 3 Ang Mo Kio Street 62, #07-33, LINK@AMK Singapore 569139. Approximately 200 (Sqm) |
Employees
As of the date of this prospectus, we employed about 100 full-time staff.
| Department | Number of Employees | |||
| Management | 3 | |||
| Finance and Accounting | 3 | |||
| Operations Management | 5 | |||
| Business Development | 3 | |||
| Technology & Engineering | 6 | |||
| Administrative | 2 | |||
| Security officers | 75 | |||
| Others | 3 | |||
| Total | 100 | |||
Collaborations
| S/No | Company/Organization | Summary of Collaboration | ||
| 1 | ST Engineering Synthesis Pte Ltd | Provision of technology solutions including security services for the Punggol Digital District as part of Singapore’s Smart Nation initiative, in which is a key project aimed at integrating digital technology and smart solutions to create a modern and connected urban environment. | ||
| 2 | Infocomm Media Development Authority | Funding grants from the Singapore government to support technological transformation of clients in Singapore. | ||
| 3 | Kyowa Security Guard & General Services Pte Ltd | Provision of I Guarding Services and Solutions to reduce the reliance of security manpower and enhance of security outcome. | ||
| 4 | Exploit Technologies Pte Ltd | Deployment and integration of network devices with the TV white space technology in Singapore. | ||
| 5 | Guardforce AI Singapore Pte Ltd | Distribution and technology integration of Guardforce AI’s robotics solutions in Singapore. Target market includes shopping centers, hotels, exhibition centers. |
Legal Proceedings
We may be subject to legal proceedings, investigations and claims incidental to the conduct of our business from time to time. We are currently not party to any material legal or arbitration proceedings, including those relating to bankruptcy, receivership or similar proceedings and those involving any third party, which may have, or have had in the recent past, significant effects on our financial position or profitability.
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Our business operations are not subject to any special legislation or regulatory controls other than those generally applicable to companies and businesses incorporated and/or operating in Singapore.
Police Licensing and Regulatory Department (PLRD)
The Police Licensing and Regulatory Department (PLRD) of Singapore regulates sectors that pose risks to a safe, secure and orderly society under various regimes in support of Singapore’s Police Force’s mission to prevent, deter and detect crime. The PLRD is responsible for policy formulation, application processing and enforcement action across its licensing regimes. The private security industry falls under the PLRD’s licensing regime which is regulated by the Private Security Industry Act 2007 and its subsidiary legislation.
Personal Data Protection Act (PDPA)
Data Protection Obligations
The Personal Data Protection Act 2012 of Singapore (“PDPA”) establishes the Singapore regime for the protection of personal data, and governs the collection, use and disclosure of personal data by organizations. In this regard, “personal data” as defined under the PDPA refers to data, whether true or not, about an individual who can be identified from that data or other information to which the organization has or is likely to have access.
An organization is required to comply with, amongst other things, the following obligations prescribed by the PDPA:
| (a) | Purpose limitation obligation — personal data must be collected, used or disclosed only for purposes that a reasonable person would consider appropriate in the circumstances, and if the individual concerned has been informed of the said purpose; |
| (b) | Notification obligation — individuals must be notified of the purposes for the collection, use or disclosure of their personal data, prior to such collection, use or disclosure; |
| (c) | Consent obligation — the consent of individuals must be obtained for any collection, use or disclosure of their personal data, unless exceptions apply. Additionally, an organization must allow the withdrawal of consent which has been given or is deemed to have been given; |
| (d) | Access and correction obligations — when requested by an individual and unless exceptions apply, an organization must: (i) provide that individual with access to his personal data in the possession or under the control of the organization and information about the ways in which his personal data may have been used or disclosed during the past year, and/or (ii) correct an error or omission in his personal data that is in the possession or under the control of the organization; |
| (e) | Accuracy obligation — an organization must make reasonable efforts to ensure that personal data collected by or on its behalf is accurate and complete if such data is likely to be used by the organization to make a decision affecting the individual to whom the personal data relates or if such data is likely to be disclosed to another organization; |
| (f) | Protection obligation — an organization must implement reasonable security arrangements for the protection of personal data in its possession or under its control; |
| (g) | Retention limitation obligation — an organization must not keep personal data for longer than it is necessary to fulfill; (i) the purposes for which it was collected, or (ii) a legal or business purpose; |
| (h) | Transfer limitation obligation — personal data must not be transferred out of Singapore except in accordance with the requirements prescribed under the PDPA; and |
| (i) | Openness obligation — an organization must implement the necessary policies and procedures in order to meet the obligations under the PDPA and shall make information about its policies and procedures available on request. |
Organizations have mandatory obligations to assess data breaches they suffer, and to notify the Singapore Personal Data Protection Commission (“PDPC”) and the relevant individuals where the data breach is of a certain severity.
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The PDPA creates various offenses in connection with the improper use of personal data, certain methods of collecting personal data and certain failures to comply with the requirements under the PDPA. These offenses may be applicable to organizations, their officers and/or their employees. Offenders are liable on conviction to fines and/or imprisonment. The PDPA empowers the PDPC with significant regulatory powers to ensure compliance with the PDPA, including powers to investigate, give directions and impose a financial penalty of up to S$1 million or 10% of the annual turnover in Singapore of the organization. In addition, the PDPA created a right of private action, pursuant to which the Singapore courts may grant damages, injunctions and relief by way of declaration, to persons who suffer loss or damages directly as a result of contraventions of certain requirements under the PDPA.
Infocomm Media Development Authority (IMDA)
The Infocomm Media Development Authority (IMDA) is a statutory board under the Singapore Ministry of Communications and Information (MCI). IMDA provides numerous programmes, policies and grants that cater to industries and communities. IMDA also protects consumers’ privacy through the Personal Data Protection Commission (PDPC).
Regulations on Labor
The Employment Act 1968 of Singapore (the “Employment Act”) generally extends to all employees, with the exception of certain groups of employees. It provides employees falling within its ambit protections such as minimum notice periods, maximum working hours, a maximum amount of deductions from wages, minimum holidays and rest days, maternity and childcare leave, paid childcare leave, sick leave, etc. The Employment Act also applies to employees who are foreigners so long as they fall within the definition of “employee” under the Employment Act. In addition, the employment of foreign manpower in Singapore is also governed by the Employment of Foreign Manpower Act 1990 of Singapore.
Aside from minimum benefits in respect of the aforesaid terms of employment in the Employment Act, employees in Singapore are entitled to contributions to the central provident fund by the employer as prescribed under the Central Provident Fund Act 1953 of Singapore. The specific contribution rate to be made by employers varies depending on whether the employee is a Singapore citizen or permanent resident and the age group and wage band of the employee. Generally, for employees who are Singapore citizens, 55 years old or below and that earn more S$750 a month, the employer’s contribution rate is 17% of the employee’s wages.
Road Traffic Act 1961
The Road Traffic Act 1961 in Singapore is a comprehensive piece of legislation that outlines the legal framework for road safety and regulation in the country. It covers various aspects of road traffic, including vehicle registration and licensing, traffic rules and regulations, the powers of traffic police, and the penalties for offenses related to road safety. The Act plays a crucial role in maintaining order on Singapore’s roadways, ensuring the safety of all road users, and facilitating the efficient functioning of the transportation system.
Workplace Safety and Health Act 2006
The Workplace Safety and Health Act covers the safety, health and welfare of persons at work in a workplace. It requires stakeholders to take reasonably practicable steps for the safety and health of workers and others affected by work.
A related legislation is the Work Injury Compensation Act 2019 which provides for the payment of compensation to employees for injury suffered arising out of and in the course of their employment and to regulate providers of insurance for liability.
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Directors and Executive Officers
The following table sets forth certain information regarding our directors and executive officers.
| NAME | AGE | POSITION | ||
| Swee Kheng Chua(3)(4) | 57 | Chief Executive Officer; Chairman | ||
| Terence Wing Khai Yap(3)(4) | 52 | Director | ||
| Sze Yin Ong | 36 | Chief Financial Officer | ||
| Yuen Fatt Yong(1)(2)(3)(4) | 65 | Independent Director Nominee; Chair of Audit Committee | ||
| Sim Peng Thia(1)(2)(3)(4) | 50 | Independent Director Nominee; Chair of Compensation Committee | ||
| Mark Allen Brisson(1)(2)(3)(4) | 57 | Independent Director Nominee; Chair of Nominating and Corporate Governance Committee |
| (1) | Yuen Fatt Yong, Sim Peng Thia and Mark Allen Brisson have accepted appointments as our independent directors, effective upon the effectiveness of the registration statement of which this prospectus forms a part. |
| (2) | Member of the Audit Committee. |
| (3) | Member of the Compensation Committee. |
| (4) | Member of the Nominating and Corporate Governance Committee. |
Swee Kheng Chua
Mr. Swee Kheng Chua (Alan) is the Executive Director and the Chairman of the Board of Concorde Group. He founded the business in 1997 and founded Concorde Security Pte Ltd in 2005. He invented 4 solutions and received certificate of grants of patent in more than 50 global cities; IFS, the I-Man Access Control System (IMACS), and Secured Aerial Viewer and Secured Cruise Vessel marketed under the “I-GuardingTM”. 4 patents; mobile control unit, a facility management system, a mobile unit control system, a facility management method and a mobile unit control method; Security control system for granting access and security control method thereof; An offshore security monitoring system and method; Mobile Monitoring System, Mobile Monitoring Unit and Mobile Monitoring Method.
Mr. Chua graduated from Singapore Polytechnic with a Diploma in Building.
Terence Wing Khai Yap
Mr. Yap was appointed the Executive Director of Concorde Group in February 2024. Mr. Yap has more than 25 years in the telecommunications and security industry. He is also the founder and director of Infinity Advisors Limited. Prior to that he was the chairman of the Board and a Director of the Guardforce AI Co., Limited from December 2019 to August 2022. Mr. Yap has been served as an independent director and a member of renumeration committee at Newmark Security Plc since May 2020. He also has been working as a consultant at Softbank Robotics Singapore Pte Ltd since June 2023. Prior to joining our Company, Mr. Yap was the Executive Director and CEO of the Guardforce Group, a security solutions provider with more than 12,000 employees located in Hong Kong, Australia, Macau and Thailand, from 2014 to 2019. Mr. Yap graduated from Swinburne University of Technology, Victoria, Australia with a BBUS (Bachelor’s Degree in Business — Accounting & Finance) in 1994 and the Chinese University of Hong Kong for an Masters in Business Administration in 2000. He is a Fellow member of the Hong Kong Institute of Directors, a Fellow member of the Chartered Management Institute (UK), a member of the Australian Institute of Company Directors and a Certified ESG Planner CEP®.
Sze Yin Ong
Ms. Sze Yin Ong joined Concorde in April 2023 as Finance Manager and was appointed as Chief Financial Officer in October 2023. Ms. Ong has more than 10 years of diversified and progressive professional experience across a wide spectrum of companies and industries. From 2017 to 2023, she left the corporate due to pro family reasons. From 2016 to 2017, she was the internal Accountant of Mazars LLP, Singapore office, where she did financial and management reporting within the company and reported to headquarter in France. From 2013 to 2015, she was the Accounts Executive (Reviewer role) at Deliciae Hospitality Management Pte Ltd, reporting directly to the CFO. She was extensively involved and implemented an ERP accounting system which entails a point-of-sales to end report function. From 2012 to 2013, she was the Financial Consultant at Prudential. From 2010 to 2012, she was the Audit Senior at Astute Group Pte Ltd, a Certified Public Accounting firm where she led a team of audit juniors to perform audits. In 2010, she was the Audit Associate at K.G. Tan & Co. During her stint in audit, she had worked on a wide spectrum of companies such as renowned luxury goods Group of Companies, investment funds and companies in the manufacturing and Food and Beverages industry. In 2009, she was the Accounts Assistant at Johnson & Johnson. She is a Member of the Institute of Singapore Chartered Accountants and member of the Association of Chartered Certified Accountants. She graduated from Singapore Polytechnic with a Diploma in Biomedical Science and holds the following certificates from the Capital Markets and Financial Advisory Services (CMFAS): M5, M8, M8A, M9, M9A and CHI.
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Yuen Fatt Yong
Mr. Yong will become our independent director upon the effectiveness of the registration statement of which this prospectus is a part.
Mr. Yong has over 39 years of experience in the Malaysian capital markets industry, including institutional and retail equity stockbroking, derivative trading, financial sales, corporate advisory and investment advisory. He is a qualified financial professional and holds the Capital Markets Services Representatives License — Modules 6 & 7 (“CMSRL”). Mr. Yong currently serves as the Executive Director of CGS-CIMB Wealth Management Sdn Bhd (Malaysia). He is also a shareholder and has been working at Electronet Sdn. Bhd. as a director since January 21, 2011. He was the Head of Private Wealth and Head of Business Development for CGS-CIMB Wealth Management Sdn Bhd (Malaysia) from July 2019 to March 2023. Prior to that he was the Chief Executive Officer of Jupiter Securities Sdn Bhd (Malaysia) from January 2012 to June 2019. Mr. Yong obtained a Bachelor’s Degree with Honours in Applied Economics from the University of East London, UK in 1981. He also obtained a Masters in Business Administration from the United States International University, San Diego USA in 1983.
Sim Peng Thia
Ms. Thia will become our independent director upon the effectiveness of the registration statement of which this prospectus is a part.
Ms. Thia has over 20 years of experience in the Technology and Banking industry including wholesale corporate banking, institutional & international banking portfolio management and general management. Ms. Thia currently serves as the Executive Coach, Founder & Director of Catenary Pte Ltd Singapore since June 2021. She was the Senior Regional Manager, Global Financial Institutions for OCBC Bank Singapore from June 2020 to August 2021. She was the Executive Director, Business Planning & Strategic Initiatives for Standard Chartered Bank Singapore from February 2018 to June 2020. She was the Head, PM Loan Sales, Institutional & International Banking Portfolio Management for Australia and New Zealand Banking Group Limited Singapore from July 2015 to February 2018. She is a Certified Financial Analyst (“CFA” — CFA Institute), certified in Green & Sustainable Finance (CBI), Professional Certified Coach (“PCC” — ICF), Team Coach (“Practitioner Level” — EMCC), Certified Neuro-Behavioral Modelling Coach (SAC) and a qualified Practitioner Program (Global Team Coaching Institute). Ms. Thia obtained a Bachelor of Engineering (Electrical & Electronics from Imperial College, University of London in 1996. She also obtained a Master Science in Applied Finance from the National University of Singapore in 2000. In addition, she also obtained a Master in Business Administration from INSEAD in 2005. In addition, she was awarded an Overseas Merit Scholarship from the Singapore Technologies Group in 1993.
Mark Allen Brisson
Mr. Brisson will become our independent director upon the effectiveness of the registration statement of which this prospectus is a part.
Mr. Brisson currently is an Independent Non Executive Director of the Nasdaq-listed Shine Union Group (SUGP) since December 2023, a Non Executive Director of the Australian listed Intelligent Monitoring Group Limited (IMB) since June 2024 and advises a number of overseas startups, Security and Industrial related companies. He has been working as a Director at Team Properties Limited Hong Kong since February 2002 and The Barefoot SL in Spain since May 2022. Mr. Brisson has worked as a consultant in the Electronic Security and Life Safety sector and serves as a Director at Kaizntree Hong Kong Limited, a small business specializing in inventory management software since December 2020. Previously, from December 2016 to November 2020, he held the role of President at Chubb Fire and Security (Australia and New Zealand), an international provider of security and fire safety solutions. Before that, from December 2013 to December 2016, he was President of the Building & Industrial Services divisions at United Technologies Corporation (Australia and New Zealand), overseeing Chubb Field operations, Otis Elevators, Carrier HVAC, and Fire and Security Products. Prior to these roles, from May 2010 to December 2013, Mr. Brisson served as President of various divisions within United Technologies Corporation (Australia and New Zealand), focusing on Chubb Cash in Transit, Fire Systems Installation, Fire Service, Electronic Security, Monitoring, and Security products. Earlier in his career, from June 2006 to April 2010, he was Managing Director at UTC Fire and Security, covering Hong Kong, Macau, Taiwan, and Guangdong. From December 2004 to June 2006, he served as General Manager at Chubb Hong Kong Electronic Security. Mr. Brisson holds a Bachelor of Arts degree in Political Science from Simon Fraser University in Canada and is a Fellow of the Hong Kong Institute of Directors.
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Family Relationships
No family relationship exists between any of our directors and executive officers. There are no arrangements or understandings with major shareholders, customers, suppliers or others pursuant to which any person referred to above was selected as a director or member of senior management.
Board of Directors
The Nasdaq Capital Market listing rules generally require that a majority of an issuer’s board of directors must consist of independent directors. Our board of directors currently consists of five (5) directors, Swee Kheng Chua, Terence Wing Khai Yap, Yuen Fatt Yong, Sim Peng Thia and Mark Allen Brisson, three (3) of whom, are independent within the meaning of Nasdaq rules. We will enter into independent director agreements with Yuen Fatt Yong, Sim Peng Thia and Mark Allen Brisson, pursuant to which they have been appointed to serve as independent directors effective automatically upon, and subject to, the closing of this offering.
A director is not required to hold any shares in our company to qualify to serve as a director. Our board of directors may exercise all the powers of our company to borrow money, mortgage or charge its undertaking, property and uncalled capital, and to issue debentures, bonds and other securities, subject to applicable stock exchange limitations, if any, whenever money is borrowed or as security for any debt, liability or obligation of our company or of any third-party.
Board Committees
Immediately prior to, and subject to, the closing of this offering, we intend to establish an audit committee, a compensation and a nominating and corporate governance committee of our board of directors. We intend to adopt a charter for each of the three committees. Each committee’s members and functions are described below.
Audit Committee
Our Audit Committee will consist of three directors, namely, Mark Allen Brisson, Yuen Fatt Yong and Sim Peng Thia, each of whom satisfies the “independence” requirements of Rule 10A-3 under the Exchange Act and Section 5605 of the Nasdaq Marketplace Rules. All members are considered to be financially literate. Yuen Fatt Yong will serve as chairman of the compensation committee.
A member of the Audit Committee is independent if the member has no direct or indirect material relationship with our company. A material relationship means a relationship which could, in the view of our Board, reasonably interfere with the exercise of a member’s independent judgment.
A member of the Audit Committee is considered financially literate if he or she has the ability to read and understand a set of financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of the issues that can reasonably be expected to be raised by our company.
The audit committee will be responsible for, among other things: (i) retaining and overseeing our independent accountants; (ii) assisting the board in its oversight of the integrity of our financial statements, the qualifications, independence and performance of our independent auditors and our compliance with legal and regulatory requirements; (iii) reviewing and approving the plan and scope of the internal and external audit; (iv) pre-approving any audit and non-audit services provided by our independent auditors; (v) approving the fees to be paid to our independent auditors; (vi) reviewing with our chief executive officer and chief financial officer and independent auditors the adequacy and effectiveness of our internal controls; (vii) reviewing hedging transactions; and (viii) reviewing and assessing annually the audit committee’s performance and the adequacy of its charter.
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Compensation Committee
Our Compensation Committee will consist of five directors, namely, Swee Kheng Chua, Terence Wing Khai Yap, Yuen Fatt Yong, Sim Peng Thia and Mark Allen Brisson. Three (3) of whom satisfies the “independence” requirements of Rule 10A-3 under the Exchange Act and Section 5605 of the Nasdaq Marketplace Rules. Sim Peng Thia will serve as chairperson of the compensation committee. Each member of the Compensation Committee has business and other experience which is relevant to their position as a member of the Compensation Committee. By virtue of having differing professional backgrounds, business experience, knowledge of our industry, knowledge of corporate governance practices and, where appropriate, service on compensation committees of other reporting issuers and experience interacting with external consultants and advisors, the members of the Compensation Committee are able to make decisions on the suitability of our compensation policies and practices. See “Directors and Officers” for a description of each Compensation Committee member’s experience and education.
While the Board is ultimately responsible for determining all forms of compensation to be awarded to executive officers and directors, the Compensation Committee will, when appropriate, review our compensation philosophy, policies, plans and guidelines and recommend any changes to the Board. See “Executive Compensation” for a discussion of, among other things, the process by which the Compensation Committee in collaboration with the Board determines the compensation of our directors and officers.
The compensation committee will assist the board in reviewing and approving the compensation structure, including all forms of compensation relating to our directors and executive officers.
The compensation committee will be responsible for, among other things: (i) reviewing and approving the remuneration of our executive officers; (ii) making recommendations to the board regarding the compensation of our independent directors; (iii) making recommendations to the board regarding equity-based and incentive compensation plans, policies and programs; and (iv) reviewing and assessing annually the compensation committee’s performance and the adequacy of its charter.
Nominating and Corporate Governance Committee
Our Nominating and Corporate Governance Committee will consist of five directors, namely, Swee Kheng Chua, Terence Wing Khai Yap, Yuen Fatt Yong, Sim Peng Thia and Mark Allen Brisson. Three (3) of whom satisfies the “independence” requirements of Rule 10A-3 under the Exchange Act and Section 5605 of the Nasdaq Marketplace Rules. Mark Allen Brisson will serve as chairman of the nominating and corporate governance committee. The nominating and corporate governance committee will assist the board of directors in selecting individuals qualified to become our directors and in determining the composition of the board and its committees.
The nominating and corporate governance committee will be responsible for, among other things: (i) identifying and evaluating individuals qualified to become members of the board by reviewing nominees for election to the board submitted by shareholders and recommending to the board director nominees for each annual meeting of shareholders and for election to fill any vacancies on the board; (ii) advising the board with respect to board organization, desired qualifications of board members, the membership, function, operation, structure and composition of committees (including any committee authority to delegate to subcommittees), and self-evaluation and policies; (iii) advising on matters relating to corporate governance and monitoring developments in the law and practice of corporate governance; (iv) overseeing compliance with our code of ethics; and (v) approving any related party transactions.
The nominating and corporate governance committee’s methods for identifying candidates for election to our board of directors will include the solicitation of ideas for possible candidates from a number of sources — members of our board of directors, our executives, individuals personally known to the members of our board of directors, and other research. The nominating and corporate governance committee may also, from time-to-time, retain one or more third-party search firms to identify suitable candidates.
In making director recommendations, the nominating and corporate governance committee may consider some or all of the following factors: (i) the candidate’s judgment, skill, experience with other organizations of comparable purpose, complexity and size, and subject to similar legal restrictions and oversight; (ii) the interplay of the candidate’s experience with the experience of other board members; (iii) the extent to which the candidate would be a desirable addition to the board and any committee thereof; (iv) whether or not the person has any relationships that might impair his or her independence; and (v) the candidate’s ability to contribute to the effective management of our company, taking into account the needs of our company and such factors as the individual’s experience, perspective, skills and knowledge of the industry in which we operate.
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Duties of Directors
Under British Virgin Islands law, our directors have a duty to act honestly, in good faith and with a view to our best interests. Our directors also have a duty to exercise care, diligence and skills that a reasonable director would exercise in same circumstances taking into account, but without limitation, (a) the nature of the company, (b) the nature of the decision, and (c) the position of the director and the nature of the responsibilities undertaken by him or her. In fulfilling their duty of care to us, our directors must ensure compliance with our memorandum of association and articles of association. We have the right to seek damages if a duty owed by our directors is breached.
Conflicts of Interest
A director may vote, attend a board meeting or sign a document on our behalf with respect to any contract or transaction in which he or she is interested. After becoming aware of the fact that he or she is interested in a transaction we have entered into or are to enter into, a director must promptly disclose such interest to all other directors.
Terms of Directors and Officers
Our officers are appointed by and serve at the discretion of our board of directors. Each director shall hold office for the term, if any, as may be specified in the resolution appointing him or until his earlier death, resignation or removal.
Employment and Indemnification Agreements
We plan to enter into labor contracts, which will take effect upon the initial public offering of the Company, with our executive officers under British Virgin Islands laws. Each of our executive officers will be employed for a specified time period, which may be renewed by the mutual agreement between us and the executive officer. The employment will be terminated in accordance with relevant laws and regulations. An executive officer may terminate his or her employment at any time with not less than 30 days’ prior written notice. When the employment is terminated, the executive officer should return any company property that he or she is using and transition any work in progress to the person designated by us.
Each executive officer will agree to hold in strict confidence and not to use or disclose to any person, corporation or other entity any confidential information, including but not limited to our business secrets and intellectual property. Each executive officer will represent to us that when the labor contract was executed, he or she will not enter in an employment relationship with any other entity or corporation and he or she had not executed any non-competition agreement.
We expect to enter into indemnification agreements with our directors and executive officers, pursuant to which we will agree to indemnify our directors and executive officers against certain liabilities and expenses incurred by such persons in connection with claims made by reason of their being such a director or officer.
Compensation of Directors and Officers
For the fiscal year ended December 31, 2023, we paid aggregate cash compensation of $319,190 to our directors and executive officers as a group. We did not pay any other cash compensation or benefits in kind to our directors and executive officers. We have not set aside or accrued any amount to provide pension, retirement or other similar benefits to our directors and executive officers. Our board of directors may determine compensation to be paid to the directors and the executive officers. The compensation committee will assist the directors in reviewing and approving the compensation structure for the directors and the executive officers. For information regarding share awards granted to our directors and executive officers, see “Options and Other Rights to Purchase Securities of Our Company.”
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2024 Equity Incentive Plan
Promptly following the closing of this Offering, we plan to adopt the Concorde International Group Ltd 2024 Equity Incentive Plan (the “Plan”), pending the approval of our Board of Directors (the “Board”). The adoption of the Plan does not require shareholder approval as the Company is relying on the home country practice in lieu of the shareholder approval requirement under the Nasdaq Listing Rule 5635(c).
The Plan provides for an aggregate number of Class A Ordinary Shares that may be reserved for issuance under the Plan as may be determined, in its sole and absolute discretion, by the compensation committee, or the board of directors of the Company, which shall not exceed 15% of the issued and outstanding Class A Ordinary Shares at the time of the granting of awards, less the aggregate number of Class A Ordinary Shares then reserved for issuance pursuant to any other share compensation arrangement, in the form of incentive share options, non-qualified share options, restricted shares, restricted share units, share appreciation rights, performance share awards and performance compensation awards to employees, directors, and consultants of the Company or any affiliates of the Company.
The purposes of the Plan are to (a) promote the long-term growth and profitability of the Company, and any affiliate to attract and retain the types of employees, consultants and directors who will contribute to the Company’s long-term success; (b) provide incentives that align the interests of employees, consultants and directors with those of the shareholders of the Company; and (c) promote the success of the Company’s business.
The following is a summarized description of the Plan. Capitalized terms not defined herein shall have the meaning given to them in the Plan.
Administration of the Plan: The Plan is currently administered by compensation committee of the Board, or the Committee. Our compensation committee will be formed upon the effectiveness of the registration statement of which this prospectus is a part. Among other things, the Committee has the authority to construe and interpret the Plan, to select persons who will receive awards, to determine the types of awards and the number of shares to be covered by awards, and to establish the terms, conditions, performance criteria, restrictions and other provisions of awards.
Participant: Persons eligible to receive awards under the Plan will be those employees, consultants, and directors of the Company and its affiliates who are selected by the Committee.
Share Options:
General. Subject to the provisions of the Plan, the Committee has the authority to determine all grants of share options. That determination will include: (i) the number of shares subject to any option; (ii) the exercise price per share; (iii) the expiration date of the option; (iv) the manner, time and date of permitted exercise; (v) other restrictions, if any, on the option or the shares underlying the option; and (vi) any other terms and conditions as the Committee may determine. No fractional Class A Ordinary Shares shall be issued or delivered pursuant to the Plan.
Option Price. The exercise price for share options will be determined at the time of grant. The exercise price will not be less than the fair market value on the date of grant. The exercise price for any incentive share option award may not be less than the fair market value of the shares on the date of grant. A ten percent shareholder shall not be granted an incentive share option unless the option exercise price is at least 110% of the fair market value of the Class A Ordinary Share at the grant date and the option is not exercisable after the expiration of five years from the grant date.
Exercise of Options. An option may be exercised only in accordance with the terms and conditions for the option agreement as established by the Committee at the time of the grant. The option must be exercised by notice to the Company, accompanied by payment of the exercise price. Payments may be made in cash or, at the option of the Committee, by actual or constructive delivery of Class A Ordinary Shares to the holder of the option based upon the fair market value of the shares on the date of exercise.
Expiration of Options. If not previously exercised, an option will expire on the expiration date established by the Committee at the time of grant. The term of a non-qualified share option granted under the Plan shall be determined by the Committee; provided, however, no non-qualified share option shall be exercisable after the expiration of 10 years from the grant date.
Vesting Schedule. Awards shall vest as determined by the Committee.
Incentive and Non-Qualified Options. As described elsewhere in this summary, an incentive share option is an option that is intended to qualify under certain provisions of the Internal Revenue Code of 1986, or the Code, for more favorable tax treatment than applies to non-qualified share options. Any option that does not qualify as an incentive share option will be a non-qualified share option. Under the Code, certain restrictions apply to incentive share options. For example, the exercise price for incentive share options may not be less than the fair market value of the shares on the grant date and the term of the option may not exceed ten years. In addition, an incentive share option may not be transferred, other than by will or the laws of descent and distribution, and is exercisable during the holder’s lifetime only by the holder. In addition, no incentive share options may be granted to a holder that is first exercisable in a single year if that option, together with all incentive share options previously granted to the holder that also first become exercisable in that year, relate to shares having an aggregate fair market value in excess of $100,000, measured at the grant date.
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Share Appreciation Rights: Share appreciation rights, or SARs, may be granted alone or in tandem with share options. A SAR is a right to receive a payment in Class A Ordinary Shares or cash (as determined by the Committee) equal in value to the excess of the fair market value of one share of Class A Ordinary Share on the date of exercise over the exercise price per share established in connection with the grant of the SAR. The exercise price per share of Class A Ordinary Share subject to a SAR may not be less than fair market value at the time of grant.
Restricted Awards: Restricted awards are awards of Class A Ordinary Shares or hypothetical Class A Ordinary Shares units having a value equal to the fair market value of an identical number of Class A Ordinary Shares. Restricted awards are forfeitable and non-transferable until the awards vest. The vesting date or dates and other conditions for vesting are established when the shares are awarded. Restricted shareholders generally have the rights of a shareholder with respect to the shares, including the right to receive dividends, the right to vote the shares of restricted share and, conditioned upon full vesting of shares of restricted share, the right to tender such shares, subject to the conditions and restrictions generally applicable to restricted share or specifically set forth in the recipient’s restricted share agreement. The Committee may determine at the time of award that the payment of dividends, if any, will be deferred until the expiration of the applicable restriction period. Restricted share unit holders will have no voting rights with respect to any restricted share units. Restricted share units may also be granted with a deferral feature, whereby settlement is deferred beyond the vesting date until the occurrence of a future payment date or event set forth in the award agreement. The Committee may provide that the restricted share units will be credited with cash and share dividends paid by the Company in respect of one share of Class A Ordinary Shares, or Dividend Equivalents. Dividend Equivalents will be deferred until the expiration of the applicable restriction period.
Performance Compensation Awards: The Plan also provides for performance compensation awards, representing the right to receive a payment, which may be in the form of cash, Class A Ordinary Shares, or a combination, based on the attainment of pre-established goals set forth in the applicable award agreement. Performance compensation awards that become vested following the achievement of the performance goals will be paid to participants as soon as administratively practicable following completion of the certification of the achievement of the performance goals by the Committee but in no event later than 21/2 months following the end of the fiscal year during which the performance period is completed.
Performance Criteria. Under the Plan, one or more performance criteria will be used by the Committee in establishing performance goals. Any one or more of the performance criteria may be used on an absolute or relative basis to measure the performance, as the Administrator may deem appropriate, or as compared to the performance of a group of comparable companies, or published or special index that the Committee deems appropriate. In determining the actual size of an individual performance compensation award, the Committee may reduce or eliminate the amount of the award through the use of negative discretion if, in its sole judgment, such reduction or elimination is appropriate. The Committee will not have the discretion to grant or provide payment in respect of performance compensation awards if the performance goals have not been attained.
Governing Law. The Plan, all award agreements, the grant and exercise of awards thereunder, and the sale, issuance and delivery of Class A Ordinary Shares thereunder upon exercise of awards are governed by the laws of British Virgin Islands.
Other Material Provisions. Awards will be evidenced by a written agreement, in such form as may be approved by the Committee. In the event of various changes to Company capitalization, such as stock splits, stock dividends and similar re-capitalizations, an appropriate adjustment will be made by the Committee to the number of shares covered by outstanding awards or to the exercise price of such awards. The Committee is also permitted to include in the written agreement provisions that provide for certain changes in the award in the event of a change of control of the Company, including acceleration of vesting. Except as otherwise determined by the Committee at the date of grant, awards will not be transferable, other than by will or the laws of descent and distribution. The Committee also has the authority to alter or amend the Plan or any outstanding award or may terminate the Plan as to further grants, provided that no amendment will, to the extent that such approval is required by law or the rules of an applicable exchange, increase the number of shares available under the Plan, change the persons eligible for awards under the Plan, extend the time within which awards may be made, or amend the provisions of the Plan related to amendments. The plan will automatically terminate on the ten-year anniversary of the date when the company adopts the Plan. No amendment that would adversely affect any outstanding award made under the Plan can be made without the consent of the holder of such award.
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The following table sets forth certain information with respect to the beneficial ownership of our ordinary shares as of the date of this prospectus for (i) each of our executive officers and directors; (ii) all of our executive officers and directors as a group; and (iii) each other shareholder known by us to be the beneficial owner of more than 5% of our outstanding ordinary shares (Class A Ordinary Shares or Class B Ordinary Shares). The following table assumes that the underwriters have not exercised the over-allotment option.
Beneficial ownership is determined in accordance with SEC rules and generally includes voting or investment power with respect to securities. For purposes of this table, a person or group of persons is deemed to have “beneficial ownership” of any Ordinary Shares that such person or any member of such group has the right to acquire within sixty (60) days of the date of this prospectus. For purposes of computing the percentage of outstanding shares held by each person or group of persons named above, any shares that such person or persons has the right to acquire within sixty (60) days of the date of this prospectus are deemed to be outstanding for such person, but not deemed to be outstanding for the purpose of computing the percentage ownership of any other person. The inclusion herein of any shares listed as beneficially owned does not constitute an admission of beneficial ownership by any person.
Unless otherwise indicated, the address of each beneficial owner listed in the table below is c/o our company, Concorde International Group Ltd, 3 Ang Mo Kio Street 62, #01-49 LINK@AMK, Singapore 569139.
| Ordinary Shares Beneficially Owned Prior to this Offering(1) |
Ordinary Shares Beneficially Owned After this Offering(2) |
|||||||||||||||||||||||||||||||||||||||
| Name of Beneficial Owner | Class A Ordinary Shares |
Percent of Class A Ordinary Shares (%) |
Class B Ordinary Shares |
Percent of Class B Ordinary Shares (%) |
Total Voting Power (3) (%) |
Class A Ordinary Shares |
Percent of Class A Ordinary Shares (%) |
Class B Ordinary Shares |
Percent of Class B Ordinary Shares (%) |
Total Voting Power (3) (%) |
||||||||||||||||||||||||||||||
| Swee Kheng Chua, CEO and Director(4) | 0 | — | 20,392,590 | 97.62 | % | 97.62 | % | 0 | — | 20,392,590 | 97.62 | % | 97.57 | % | ||||||||||||||||||||||||||
| Terence Wing Khai Yap, Director(5) | 0 | — | 250,000 | 1.20 | % | 1.20 | % | 0 | — | 250,000 | 1.20 | % | 1.20 | % | ||||||||||||||||||||||||||
| Sze Yin Ong, Chief Financial Officer(6) | 0 | — | 46,296 | * | * | 0 | — | 46,296 | * | * | ||||||||||||||||||||||||||||||
| Yuen Fatt Yong, Independent Director Nominee | 0 | — | 0 | — | — | 0 | — | 0 | — | — | ||||||||||||||||||||||||||||||
| Sim Peng Thia, Independent Director Nominee | 0 | — | 0 | — | — | 0 | — | 0 | — | — | ||||||||||||||||||||||||||||||
| Mark Allen Brisson, Independent Director Nominee | 0 | — | 0 | — | — | 0 | — | 0 | — | — | ||||||||||||||||||||||||||||||
| All directors and executive officers as a group (six persons) | 0 | — | 20,688,886 | 99.04 | % | 99.04 | % | 0 | — | 20,688,886 | 99.04 | % | 98.98 | % | ||||||||||||||||||||||||||
| Weilekai Investments Pte Ltd(7) | 0 | — | 2,000,000 | 9.57 | % | 9.57 | % | 0 | — | 2,000,000 | 9.57 | % | 9.57 | % | ||||||||||||||||||||||||||
| * | Less than 1% |
| (1) | Based on zero Class A Ordinary Shares issued and outstanding as of the date of this prospectus. |
| (2) | Based on 1,250,000 Class A Ordinary Shares and 20,888,886 Class B Ordinary Shares issued and outstanding after this offering. Immediately after the consummation of this offering. |
| (3) | The holders of Class A Ordinary Shares are entitled to one (1) vote for each Class A Ordinary Share held of record, and the holders of Class B Ordinary Shares are entitled to one hundred (100) votes for each Class B Ordinary Share held of record, and on all matters submitted to a vote of the shareholders. A total of 20,888,886 Class B Ordinary Shares representing total voting power of 2,088,888,600 votes are outstanding as of the date of this prospectus. |
| (4) | Consists of 18,000,000 Class B Ordinary Shares beneficially owned by Swee Kheng Chua, our Chief Executive Officer and Director; 377,775 Class B Ordinary Shares beneficially owned by Ping Ping Lim, Swee Kheng Chua’s spouse; 14,815 Class B Ordinary Shares beneficially owned by Jia Wei Chua, Swee Kheng Chua’s son, who lives in the same household; and 2,000,000 Class B Ordinary Shares beneficially owned by Weilekai Investments Pte Ltd. Weilekai Investments Pte Ltd is a Singapore company, 50% owned by Swee Kheng Chua and 50% owned by Ping Ping Lim, Spouse of Swee Kheng Chua. Swee Kheng Chua is deemed to beneficially own the Class B Ordinary Shares owned by Weilekai Investments Pte Ltd and has sole voting and dispositive powers over its shares. Each of them received their respective shares on March 18, 2024. |
| (5) | Consists of 250,000 Class B Ordinary Shares beneficially owned by Terence Wing Khai Yap, our Director, which he received on March 18, 2024. |
| (6) | Consists of 46,296 Class B Ordinary Shares beneficially owned by Sze Yin Ong, our Chief Financial Officer, which she received on March 18, 2024. |
| (7) | Weilekai Investments Pte Ltd is a Singapore company, 50% owned by Swee Kheng Chua and 50% owned by Ping Ping Lim, Spouse of Swee Kheng Chua. Swee Kheng Chua is deemed to beneficially own the Class B Ordinary Shares owned by Weilekai Investments Pte Ltd and has sole voting and dispositive powers over its shares. Weilekai Investments Pte Ltd’s business address is 3 Ang Mo Kio Street 62 #01-49 LINK@AMK Singapore 569139. Weilekai Investments Pte Ltd received such shares on March 18, 2024. |
See “Description of Share Capital — History of Securities Issuances” for historical changes in our shareholding.
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In addition to the compensation arrangements discussed under “Management,” the following is a description of the material terms of those transactions with related parties to which we are party and which we are required to disclose pursuant to the disclosure rules of the SEC.
The table below sets forth the major related parties and their relationships with our Company as of December 31, 2023:
| Name of related parties | Relationship with the Company | |
| Concorde Global I Pte Ltd | Controlled by Mr. Chua Swee Kheng and Lim Ping Ping | |
| iMatrix Global Pte Ltd* | Mr. Chua Swee Kheng has significant influence over the company | |
| Total Protection Solutions Pte Ltd* | Lim Ping Ping is a shareholder of Total Protection Solutions Pte Ltd until November 2023 | |
| Ping Ping, Lim* | Non-controlling shareholder and spouse of Mr. Chua Swee Kheng | |
| Swee Kheng Chua* | Controlling shareholder and Chief Executive Officer | |
| Concorde International Group Pte Ltd | Subsidiary of Concorde International Group Ltd | |
| Concorde i-FAST USA Inc. | Subsidiary of Concorde International Group Ltd | |
| Concorde Security Pte Ltd | Subsidiary of Concorde International Group Pte Ltd | |
| Concorde Security Sdn Bhd | Subsidiary of Concorde International Group Pte Ltd | |
| Concorde Security Limited | Subsidiary of Concorde International Group Pte Ltd | |
| Concorde Asia Pte Ltd | Subsidiary of Concorde International Group Pte Ltd | |
| Berjaya Academy Pte Ltd | Subsidiary of Concorde International Group Pte Ltd | |
| Directors and the key management | Key Management** |
| * | These are the related parties that have engaged in significant transactions with the Company for the fiscal years ended December 31, 2023, 2022 and 2021. |
| ** | Below table listed the key management personnels for the fiscal years ended December 31, 2023, 2022 and 2021. |
Compensation of key management personnel for the fiscal years ended December 31, 2023, 2022 and 2021 is as follows:
| Year Ended December 31, | ||||||||||||
| 2023 (Audited) | 2022 (Audited) | 2021 (Unaudited) | ||||||||||
| $ | $ | $ | ||||||||||
| Swee Kheng Chua | 70,725 | 212,047 | 178,586 | |||||||||
| Sharifah Noriati Binte Said Omar* | 21,983 | 34,632 | 13,692 | |||||||||
| Ping Ping Lim** | 88,193 | 157,119 | — | |||||||||
| Terence Wing Khai Yap | 86,098 | — | — | |||||||||
| Sze Yin Ong | 52,191 | — | — | |||||||||
| Total compensation | 319,190 | 403,798 | 192,278 | |||||||||
| * | Ms. Sharifah Noriati Binte Said Omar serves as a nominee director at Berjaya Academy Pte Ltd, our 70% owned subsidiary, as well as Concorde Security Pte Ltd (Singapore), our 96.81% owned subsidiary, and Concorde Asia Pte Ltd (Singapore), our 70% owned subsidiary. |
| ** | Ping Ping Lim, Swee Kheng Chua’s spouse. |
The following schedule describes the transactions and balances of related parties in the last three fiscal years:
Amount due from related parties.
| Year Ended December31, | ||||||||||||
| 2023 (Audited) | 2022 (Audited) | 2021 (Unaudited) | ||||||||||
| $ | $ | $ | ||||||||||
| Concorde Global I Pte Ltd | 15,168 | — | 6,041 | |||||||||
| iMatrix Global Pte Ltd | — | — | — | |||||||||
| Total Protection Pte Ltd | 753,976 | 651,702 | 233,264 | |||||||||
| Swee Kheng Chua | 75,838 | 342,137 | 73,970 | |||||||||
| Ping Ping Lim | — | 11,551 | — | |||||||||
| Total amount due from related parties | 844,982 | 1,005,390 | 313,275 | |||||||||
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The following schedule describes the amount due to related parties in the last three fiscal years:
| Year Ended December 31, | ||||||||||||
| 2023 (Audited) | 2022 (Audited) | 2021 (Unaudited) | ||||||||||
| $ | $ | $ | ||||||||||
| Lim Ping Ping | — | 70,320 | 49,383 | |||||||||
| Swee Kheng Chua | 405,632 | 538,985 | 465,525 | |||||||||
| Total amount due to related parties | 405,632 | 609,305 | 505,963 | |||||||||
The following schedule describes the related party transactions during the last three fiscal years:
| Year Ended December 31, | ||||||||||||
| 2023 (Audited) | 2022 (Audited) | 2021 (Unaudited) | ||||||||||
| $ | $ | $ | ||||||||||
| Subcontracting costs | ||||||||||||
| Total Protection Solution Pte Ltd | 2,504,458 | 1,668,048 | 107,896 | |||||||||
| iMatrix Global Pte Ltd | 16,403 | 150,305 | 33,150 | |||||||||
| Total subcontracting costs | 2,520,861 | 1,818,353 | 141,046 | |||||||||
Employment and Indemnification Agreements
See “Management — Employment and Indemnification Agreements.”
Compensation of Directors and Officers
See “Management — Compensation of Directors and Officers.”
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DESCRIPTION OF SHARE
We are a BVI business company, and our affairs are governed by our memorandum and articles of association, as amended from time to time, and the BVI Act. We were incorporated under the laws of the British Virgin Islands on May 2, 2023. The original authorized share capital of our Company was $50,000 divided into 50,000 Ordinary Shares, par value $1 per share with 1 share issued and outstanding at incorporation.
On November 1, 2023, 100,000 shares were transferred from Sharifah Noriati Binte Said Omar to Concorde International Group Pte Ltd (Singapore) at $1 Singapore Dollar. The shares were held by Sharifah Noriati Binte Said Omar in representative capacity of Swee Kheng Chua.
On March 14, 2024, we sub-divided, re-designated and reclassified the 50,000 authorized shares as below:
| (i) | 50,000 authorized shares were sub-divided to 5,000,000,000 shares of a single class each with a par value of US$0.00001. |
| (ii) | 4,650,000,000 shares of US$0.00001 each was cancelled to reduce the number of shares to 350,000,000 of a single class each with a par value of US$0.00001. |
| (iii) | The 100,000,000 of such authorized shares with a par value of US$0.00001 each, including the 100,000 then issued shares of the Company, held by Swee Kheng Chua, were re-designated and re-classified as 100,000,000 Class B Ordinary Shares with a par value of US$0.00001 each, while the remaining 250,000,000 authorized shares with a par value of US$0.00001 each, none of which were then issued, were re-designated and re-classified as 250,000,000 Class A Ordinary Shares with a par value of US$0.00001 each. |
As of the date of this prospectus, we are authorized to issue up to a maximum of 350,000,000 ordinary shares of a single class with a par value of US$0.00001 each comprising (i) 250,000,000 Class A Ordinary Shares with a par value of US$0.00001 each; and (b) 100,000,000 Class B Ordinary Shares with a par value US$0.00001 each. As of the date of this prospectus, zero Class A Ordinary Shares and 20,888,886 Class B Ordinary Shares are issued and outstanding.
Immediately prior to the completion of this offering, we will have zero Class A Ordinary Shares and 20,888,886 Class B Ordinary Shares issued and outstanding. All of our shares issued and outstanding prior to the completion of the offering are and will be fully paid, and all of our shares to be issued in the offering will be issued as fully paid.
If we are approved to list our Class A Ordinary Shares on the Nasdaq Capital Market, we will be a “controlled company” as defined in Nasdaq listing rules because more than 50% of our voting power will be held by Mr. Swee Kheng Chua after the offering. As a “controlled company,” we are exempt by Nasdaq listing rules from certain corporate governance requirements. Accordingly, you may not have the same protections afforded to shareholders of companies that are subject to all of the corporate governance requirements of the Nasdaq Capital Market. Controlled companies are exempt from the corporate governance rules of the Nasdaq Capital Market requiring that listed companies have (i) a majority of the board of directors consist of “independent” directors under the listing standards of the Nasdaq Capital Market, (ii) a nominating/corporate governance committee composed entirely of independent directors and a written nominating/corporate governance committee charter meeting the requirements of the Nasdaq Capital Market, and (iii) a compensation committee composed entirely of independent directors and a written compensation committee charter meeting the requirements of the Nasdaq Capital Market. We currently utilize and presently intend to continue to utilize these exemptions. As a result, we may not have a majority of independent directors, our nomination and corporate governance committee and compensation committee may not consist entirely of independent directors and such committees may not be subject to annual performance evaluations. Accordingly, you may not have the same protections afforded to shareholders of companies that are subject to all of the corporate governance requirements of the Nasdaq Capital Market. See “Risk Factors — Risks Relating to This Offering and Ownership of Our Class A Ordinary Shares — As a controlled company, we are not subject to all of the corporate governance rules of the Nasdaq Capital Market.”
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Our Post-Offering Memorandum and Articles of Association
We have adopted a second amended and restated memorandum of association (the “Memorandum”) and articles of association (the “Articles”), which replaced our amended and restated memorandum of association and articles of association in its entirety prior to the completion of this offering. The following are summaries of the material provisions of our Memorandum and Articles that are in force and the BVI Act, insofar as they relate to the material terms of our Ordinary Shares.
The following description of our Ordinary Shares and provisions of our Memorandum and Articles are summaries and are qualified by reference to the Memorandum and the Articles of association. Copies of these documents have been filed with the SEC as exhibits to our registration statement, of which this prospectus forms a part.
Ordinary Shares
General
All of our issued Ordinary Shares are fully paid and non-assessable. Certificates evidencing the Ordinary Shares are issued in registered form. Our shareholders who are non-residents of the BVI may freely hold and vote with their Ordinary Shares. Immediately after the completion of this offering, we will have 1,250,000 Class A Ordinary Shares and 20,888,886 Class B Ordinary Shares issued and outstanding, assuming no exercise of their over-allotment option by the underwriters.
Holders of our Class A Ordinary shares and Class B Ordinary Shares will have the same rights except for voting and conversion rights. Other than in respect of voting and conversion, the Class A Ordinary Shares and the Class B Ordinary Shares carry equal rights and rank pari passu with one another, including the rights to dividends and other capital distribution.
Conversion
Each Class B Ordinary Share is convertible into one Class A Ordinary Share at any time by the holder thereof. Class A Ordinary Shares are not convertible into Class B Ordinary Shares under any circumstances. Upon any sale, transfer, assignment or disposition of Class B Ordinary Shares or the transfer or assignment of the voting power attached to such number of Class B Ordinary Shares through voting proxy or otherwise by a holder thereof to any person or entity which is neither ultimately controlled by Swee Kheng Chua (the “Founder”) nor another holder of Class B Ordinary Shares or an Affiliate (as defined in the Articles) of such another holder, all Class B Ordinary Shares held by a holder thereof shall be automatically and immediately converted into an equal number of Class A Ordinary Shares. Upon any sale, transfer, assignment or disposition of a majority of the issued and outstanding voting securities of, or the transfer or assignment of the voting power attached to such voting securities through voting proxy or otherwise, or the sale, transfer, assignment or disposition of all or substantially all of the assets of, a holder of Class B Ordinary Shares that is an entity to any person or entity which is neither ultimately controlled by the Founder nor another holder of Class B Ordinary Shares or an Affiliate (as defined in the Articles) of such another holder, all Class B Ordinary Shares held by a holder thereof shall be automatically and immediately converted into an equal number of Class A Ordinary Shares.
Distributions
The holders of our Ordinary Shares are entitled to such dividends as may be declared by our board of Directors subject to the BVI Act.
Voting rights
Any action required or permitted to be taken by the shareholders must be effected at a duly called general meeting of the shareholders entitled to vote on such action or may be effected by a resolution in writing. At each general meeting, each shareholder who is present in person or by proxy (or, in the case of a shareholder being a corporation, by its duly authorized representative) will have one vote for each Class A Ordinary Share which such shareholder holds and 100 votes for each Class B Ordinary Share which such shareholder holds. Holders of Class A Ordinary Shares and holders of Class B Ordinary Shares shall vote together as a single class, on all matters that require shareholders’ approval (other than in respect of separate general meetings of the holders of a class or series of shares).
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Qualification
There is currently no shareholding qualification for directors.
Meetings
We must provide not less than seven days’ notice of all meetings of shareholders to those persons whose names appear as shareholders in the register of members on the date of the notice is given and are entitled to vote at the meeting. Our board of directors shall call a meeting of the shareholders upon the written request of shareholders holding at least 30% of voting rights. In addition, our board of directors may call a meeting of shareholders on its own motion. A meeting of shareholders held in contravention of the requirement to give notice is valid if shareholders holding at least 90 percent of the total voting rights on all the matters to be considered at the meeting have waived notice of the meeting and, for this purpose, the presence of a shareholder at the meeting shall constitute waiver on his part.
At any meeting of shareholders, a quorum will be present if there are shareholders present in person or by proxy representing not less than 50% of the votes of Ordinary Shares entitled to vote on the resolutions to be considered at the meeting. Such a quorum may be represented by only a single shareholder or proxy. If no quorum is present within two hours of the start time of the meeting, the meeting shall be dissolved if it was requested by shareholders. In any other case, the meeting shall be adjourned to the next business day at the same time and place or to such other time and place as the board of directors may determine, and if shareholders representing not less than one-third of the votes of the Ordinary Shares entitled to vote on the matters to be considered at the meeting are present within one hour of the start time of the adjourned meeting, a quorum will be present. No business may be transacted at any general meeting unless a quorum is present at the commencement of business. If present, the chair of our board of directors shall be the chair presiding at any meeting of the shareholders. If the chair of our board of directors is not present, then the shareholders present shall choose a shareholder to chair the meeting of shareholders. If the shareholders are unable to choose a chairman for any reason, then the person representing the greatest number of voting shares present in person or by proxy at the meeting shall preside as chairman.
A corporation that is a shareholder shall be deemed for the purpose of our Memorandum and Articles to be present in person if represented by its duly authorized representative. This duly authorized representative shall be entitled to exercise the same powers on behalf of the corporation which he represents as that corporation could exercise if it were our individual shareholder.
Protection of minority shareholders
There are no provisions in the Articles of Association relating to the rights of minority shareholders in relation to fraud or oppression. However, certain remedies are available to shareholders of the Company under the BVI law as summarized below.
The BVI Companies Act contains various mechanism to protect minority shareholders, including:
| (i) | Restraining or Compliance Orders: if a company or a director of a company engages in, or proposes to engage in or has engaged in, conduct that contravenes the BVI Act or the company’s memorandum and articles of association, the court may, on the application of a member or a director of the company, make an order directing the company or its director to comply with, or restraining the company or director from engaging in conduct that contravenes, the BVI Act or the company’s memorandum and articles of association; |
| (ii) | Derivative Actions: the court may, on the application of a member of a company, grant leave to that member to: |
| (aa) | bring proceedings in the name and on behalf of that company; or |
| (bb) | intervene in proceedings to which the company is a party for the purpose of continuing, defending or discontinuing the proceedings on behalf of the company; and |
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| (iii) | Unfair Prejudice Remedies: a member of a company who considers that the affairs of the company have been, are being or are likely to be, conducted in a manner that is, or any acts of the company have been, or are, likely to be oppressive, unfairly discriminatory, or unfairly prejudicial to him, may apply to the court for an order and, if the court considers that it is just and equitable to do so, it may make such order as it thinks fit, including, without limitation, one or more of the following orders: |
| (aa) | in the case of a shareholder, requiring the company or any other person to acquire the shareholder’s shares; |
| (bb) | requiring the company or any other person to pay compensation to the member; |
| (cc) | regulating the future conduct of the company’s affairs; |
| (dd) | amending the memorandum or articles of association of the company; |
| (ee) | appointing a receiver of the company; |
| (ff) | appointing a liquidator of the company under section 159(1) of the Insolvency Act; |
| (gg) | directing the rectification of the records of the company; and |
| (hh) | setting aside any decision made or action taken by the company or its directors in breach of the BVI Companies Act or the company’s memorandum and articles of association. |
| (iv) | Personal and Representative Actions: a member is able to bring an action against the company for a breach of a duty owed by the company to member in his capacity as a member. Where a member brings such an action and other members have the same (or substantially the same) action against the company, the court may appoint the first member to represent all or some of the members having the same interest and may make an order: |
| (aa) | as to the control and conduct of the proceedings; |
| (bb) | as to the costs of the proceedings; and |
| (cc) | directing the distribution of any amount ordered to be paid by a defendant in the proceedings among the members represented. |
The BVI Companies Act provides that any member of a company is entitled to payment of the fair value of his shares upon dissenting from any of the following:
| (i) | a merger, if the company is a constituent company, unless the company is the surviving company and the member continues to hold the same or similar shares; |
| (ii) | a consolidation, if the company is a constituent company; |
| (iii) | any sale, transfer, lease, exchange or other disposition of more than 50% of the assets or business of the company if not made in the usual or regular course of the business carried on by the company but not including: |
| (aa) | a disposition pursuant to an order of the court having jurisdiction in the matter; |
| (bb) | a disposition for money on terms requiring all or substantially all net proceeds to be distributed to the members in accordance with their respective interests within one (1) year after the date of disposition; or |
| (cc) | a transfer pursuant to the power of the directors to transfer assets for the protection thereof; |
| (iv) | a redemption of 10% or less of the issued shares of the company required by the holders of 90% or more of the shares of the company pursuant to the terms of the BVI Companies Act; and |
| (v) | an arrangement, if permitted by the court. |
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Generally, any other claims against a company by its shareholders must be based on the general laws of contract or tort applicable in the BVI or their individual rights as shareholders as established by the company’s memorandum and articles of association.
Pre-emptive rights
There are no pre-emptive rights applicable to the issue by us of new Ordinary Shares under either BVI law or our Memorandum and Articles.
Transfer of Ordinary Shares
Subject to the restrictions in our Memorandum and Articles, the lock-up agreements with the representative of the underwriters described in “Shares Eligible for Future Sale — Lock-Up Agreements” and applicable securities laws, any of our shareholders may transfer all or any of his or her Ordinary Shares by written instrument of transfer signed by the transferor and containing the name and address of the transferee. Our board of directors may resolve by resolution to refuse or delay the registration of the transfer of any Ordinary Shares.
Liquidation
The BVI court has authority under the Insolvency Act of the BVI to order winding up in a number of specified circumstances including where it is, in the opinion of the court, just and equitable to do so.
A BVI company may enter into voluntary liquidation under the BVI Companies Act if it has no liabilities or is able to pay its debts as they fall due and the value of its assets equals or exceeds its liabilities.
Calls on Ordinary Shares and forfeiture of Ordinary Shares
Our board of directors may from time to time make calls upon shareholders for any amounts unpaid on their Ordinary Shares in a notice served to such shareholders at least fourteen days prior to the specified time of payment. The Ordinary Shares that have been called upon and remain unpaid are subject to forfeiture. For the avoidance of doubt, if the issued shares have been fully paid in accordance with the terms of its issuance and subscription, the board of directors shall not have the right to make calls on such fully paid shares and such fully paid shares shall not be subject to forfeiture.
Purchase or redemption of Ordinary Shares
Subject to the provisions of the BVI Act, the board of directors may purchase, redeem or otherwise acquire and hold its own shares on such terms and in such manner as may be determined by our Memorandum and Articles and subject to any applicable requirements imposed from time to time by, the BVI Act, the SEC, the Nasdaq Capital Market, or by any recognized stock exchange on which our securities are listed.
Modification of rights
All or any of the special rights attached to any class of shares may, subject to the provisions of the BVI Act, be amended only pursuant to consent in writing of all the holders of the issued shares of that class or with the sanction of a resolution passed by a majority of the votes cast at a separate meeting of the holders of the shares of that class.
To every such separate general meeting all the provisions of the Articles relating to general meetings of shareholders shall, mutatis mutandis, apply, but so that:
| (a) | separate general meetings of the holders of a class or series of shares may be called only by (i) the chairman of the board of directors, or (ii) a majority of the entire board of directors (unless otherwise specifically provided by the terms of issue of the shares of such class or series); |
| (b) | the necessary quorum (whether at a separate general meeting or at its adjourned meeting) shall be a person or persons (or in the case of a shareholder being a corporation, its duly authorized representative) together holding or representing by proxy not less than one-third in nominal or par value of the issued shares of that class (but so that if at any adjourned meeting of such holders a quorum as above defined is not present, those shareholders who are present shall form a quorum); |
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| (c) | every holder of shares of the class shall be entitled (whether on show of hands or on a poll) to one vote for every such share held by him; and |
| (d) | any holder of shares of the class present in person or by proxy or authorized representative may demand a poll. |
Changes in the number of shares we are authorized to issue and those in issue
We may from time to time by a resolution of shareholders or resolution of our board of directors:
| ● | amend our Memorandum and Articles to increase or decrease the maximum number of shares we are authorized to issue; |
| ● | subject to our Memorandum and Articles, sub-divide our authorized and issued shares into a larger number of shares than our existing number of shares; and |
| ● | subject to our Memorandum and Articles, consolidate our authorized and issued shares into a smaller number of shares than our existing number of shares. |
Untraceable shareholders
Our Memorandum and Articles contain no provision entitling us to sell the shares of a shareholder who is untraceable.
Inspection of books and records
Members of the general public, on a payment of a nominal fee, can inspect the public records of a company available at the office of the BVI Registrar of Corporate Affairs (the “Registrar”) which will include, inter alia, the company’s certificate of incorporation, its memorandum and articles of association (with any amendments) and the records of license fees paid to date.
A director of a BVI company may, on giving reasonable notice, inspect (and make copies of) the documents and records of a BVI company without charge and at a reasonable time specified by the director.
A member of a BVI company may, on giving written notice to a BVI company, inspect the company’s memorandum and articles of association, the register of members, the register of directors and the minutes of meetings and resolutions of members and of those classes of members of which he is a member.
Subject to any provision to the contrary in the company’s memorandum and articles of association, the directors may, if they are satisfied that it would be contrary to the company’s interests to allow a member to inspect any document, or part of a document, refuse to permit the member to inspect the document or limit the inspection of the document, including limiting the making of copies or the taking of extracts from the records. The directors shall, as soon as reasonably practicable, notify a member of any exercise of such powers. Where a company fails or refuses to permit a member to inspect a document or permits a member to inspect a document subject to limitations, that member may apply to the BVI court for an order that he should be permitted to inspect the document or to inspect the document without limitation.
A company shall keep minutes of all meetings of directors, members, committees of directors and committees of members and copies of all resolutions consented to by directors, members, committees of directors and committees of members. The books, records and minutes required by the BVI Companies Act shall be kept at the office of the BVI registered agent of the company or at such other place as the directors determine. See “Where You Can Find More Information.”
Rights of non-resident or foreign shareholders
There are no limitations imposed by our Memorandum and Articles on the rights of non-resident or foreign shareholders to hold or exercise voting rights on our shares. In addition, there are no provisions in our Memorandum and Articles governing the ownership threshold above which shareholder ownership must be disclosed.
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Issuance of additional Ordinary Shares
Our Memorandum and Articles authorizes our board of directors to issue additional Ordinary Shares from authorized but unissued Ordinary Shares, to the extent available, from time to time as our board of directors shall determine.
Certain BVI Company Considerations
Differences in Corporate Law
The BVI Act and the laws of the BVI affecting BVI companies like us and our shareholders differ from laws applicable to U.S. corporations and their shareholders. Set forth below is a summary of the significant differences between the provisions of the laws of the BVI applicable to us and, for illustrative purposes only, the Delaware General Corporation Law (the “DGCL”), which are applicable to us and the companies incorporated in the state of Delaware and their shareholders.
Mergers and similar arrangements
Under the BVI Act, two or more BVI companies may merge or consolidate in accordance with the statutory provisions. A merger means the merging of two or more constituent companies into one of the constituent companies, and a consolidation means the uniting of two or more constituent companies into a new company. In order to merge or consolidate, the directors of each constituent BVI company must approve a written plan of merger or consolidation which must be authorized by a resolution of shareholders. One or more BVI companies may also merge or consolidate with one or more companies incorporated under the laws of jurisdictions outside the BVI, if the merger or consolidation is permitted by the laws of the jurisdictions in which the companies incorporated outside the BVI are incorporated. In respect of such a merger or consolidation a BVI company is required to comply with the provisions of the BVI Act and a company incorporated outside the BVI is required to comply with the laws of its jurisdiction of incorporation.
Shareholders of BVI companies not otherwise entitled to vote on the merger or consolidation may still acquire the right to vote if the plan of merger or consolidation contains any provision which, if proposed as an amendment to the memorandum association or articles of association, would entitle them to vote as a class or series on the proposed amendment. In any event, all shareholders must be given a copy of the plan of merger or consolidation irrespective of whether they are entitled to vote at the meeting or consent to the written resolution to approve the plan of merger or consolidation.
Under Delaware law each corporation’s board of directors must approve a merger agreement. The merger agreement must state, among other terms, the terms of the merger and method of carrying out the merger. This agreement must then be approved by the majority vote of the outstanding stock entitled to vote at an annual or special meeting of each corporation, and no class vote is required unless provided in the certificate of incorporation.
Delaware permits an agreement of merger to contain a provision allowing the agreement to be terminated by the board of directors of either corporation, notwithstanding approval of the agreement by the stockholders of all or any of the corporations (1) at any time prior to the filing of the agreement with the Secretary of State or (2) after filing if the agreement contains a post-filing effective time and an appropriate filing is made with the Secretary of State to terminate the agreement before the effective time. In lieu of filing an agreement of merger, the surviving corporation may file a certificate of merger, executed in accordance with Section 103 of the DGCL. The surviving corporation is also permitted to amend and restate its certification of incorporation in its entirety. The agreement of merger may also provide that it may be amended by the board of directors of either corporation prior to the time that the agreement filed with the Secretary of State becomes effective, even after approval by stockholders, so long as any amendment made after such approval does not adversely affect the rights of the stockholders of either corporation and does not change any term in the certificate of incorporation of the surviving corporation. If the agreement is amended after filing but before becoming effective, an appropriate amendment must be filed with the Secretary of State. If the surviving corporation is not a Delaware corporation, it must consent to service of process for enforcement of any obligation of the corporation arising as a result of the merger; such obligations include any suit by a stockholder of the disappearing Delaware corporation to enforce appraisal rights under Delaware law.
If a proposed merger or consolidation for which appraisal rights are provided is to be submitted for approval at a shareholder meeting, the subject company must give notice of the availability of appraisal rights to its shareholders at least 20 days prior to the meeting.
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A dissenting shareholder who desires to exercise appraisal rights must (a) not vote in favor of the merger or consolidation; and (b) continuously hold the shares of record from the date of making the demand through the effective date of the applicable merger or consolidation. Further, the dissenting shareholder must deliver a written demand for appraisal to the company before the vote is taken. The Delaware Court of Chancery will determine the fair value of the shares exclusive of any element of value arising from the accomplishment or expectation of the merger, together with interest, if any, to be paid upon the amount determined to be the fair value. In determining such fair value, the court will take into account “all relevant factors.” Unless the Delaware Court of Chancery in its discretion determines otherwise, interest from the effective date of the merger through the date of payment of the judgment will be compounded quarterly and accrue at 5% over the Federal Reserve discount rate.
Shareholders’ suits
The BVI Act provides for remedies which may be available to shareholders. Where a company incorporated under the BVI Act or any of its directors engages in, or proposes to engage in, conduct that contravenes the BVI Act or the company’s memorandum and articles of association, the BVI courts can issue a restraining or compliance order. Shareholders can also bring derivative, personal and representative actions under certain circumstances. The traditional English basis for members’ remedies has also been incorporated into the BVI Act: where a shareholder of a company considers that the affairs of the company have been, are being or are likely to be conducted in a manner likely to be oppressive, unfairly discriminating or unfairly prejudicial to him, he may apply to the court for an order based on such conduct.
Any shareholder of a company may apply to court for the appointment of a liquidator of the company and the court may appoint a liquidator of the company if it is of the opinion that it is just and equitable to do so.
The BVI Act provides that any shareholder of a company is entitled to payment of the fair value of his shares upon dissenting from any of the following: (a) a merger, if the company is a constituent company, unless the company is the surviving company and the member continues to hold the same or similar shares; (b) a consolidation, if the company is a constituent company; (c) any sale, transfer, lease, exchange or other disposition of more than 50% in value of the assets or business of the company if not made in the usual or regular course of the business carried on by the company but not including (i) a disposition pursuant to an order of the court having jurisdiction in the matter, (ii) a disposition for money on terms requiring all or substantially all net proceeds to be distributed to the shareholders in accordance with their respective interest within one year after the date of disposition, or (iii) a transfer pursuant to the power of the directors to transfer assets for the protection thereof; (d) a redemption of 10% or fewer of the issued shares of the company required by the holders of 90% or more of the shares of the company pursuant to the terms of the BVI Act; and (e) an arrangement, if permitted by the court.
Indemnification of directors and executive officers and limitation of liability
BVI law does not limit the extent to which a company’s articles of association may provide for indemnification of directors, officers and any other person, except to the extent any such provision may be held by the court to be contrary to public policy (e.g. for purporting to provide indemnification against the consequences of committing a crime.) provided that the indemnified person acted honestly and in good faith and in what he believed to be in the best interests of the company and, in the case of criminal proceedings, the person had no reasonable cause to believe that his conduct was unlawful.
This standard of conduct is generally the same as permitted under the DGCL for a Delaware corporation.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers or persons controlling us under the foregoing provisions, we have been advised that in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.
Directors’ fiduciary duties
BVI law provides that every director of a BVI company in exercising his powers or performing his duties shall act honestly and in good faith and in what the director believes to be in the best interests of the company. Additionally, the director shall exercise the care, diligence, and skill that a reasonable director would exercise in the same circumstances taking into account the nature of the company, the nature of the decision and the position of the director and his responsibilities. In addition, BVI law provides that a director shall exercise his powers as a director for a proper purpose and shall not act, or agree to the company acting, in a manner that contravenes BVI law or the memorandum association or articles of association of the company.
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Under Delaware corporate law, a director of a Delaware corporation has a fiduciary duty to the corporation and its shareholders. This duty has two components: the duty of care and the duty of loyalty. The duty of care requires that a director act in good faith, with the care that an ordinarily prudent person would exercise under similar circumstances. Under this duty, a director must inform himself of, and disclose to shareholders, all material information reasonably available regarding a significant transaction. The duty of loyalty requires that a director act in a manner he reasonably believes to be in the best interests of the corporation. He must not use his corporate position for personal gain or advantage. This duty prohibits self-dealing by a director and mandates that the best interest of the corporation and its shareholders take precedence over any interest possessed by a director, officer or controlling shareholder and not shared by the shareholders generally. In general, actions of a director are presumed to have been made on an informed basis, in good faith and in the honest belief that the action taken was in the best interests of the corporation. However, this presumption may be rebutted by evidence of a breach of one of the fiduciary duties. Should such evidence be presented concerning a transaction by a director, a director must prove the procedural fairness of the transaction and that the transaction was of fair value to the corporation.
Shareholder action by written consent
Our Memorandum and Articles provide that shareholders may approve corporate matters by way of a resolution approved at a duly constituted meeting of shareholders by the affirmative vote of a simple majority of the votes of those shareholders entitled to vote and voting on the resolution, subject to the Articles. Following the Company’s IPO, any action required or permitted to be taken by the shareholders of the Company must be effected by a meeting of the shareholders, such meeting to be duly convened and held in accordance with the Articles.
Under the DGCL, a corporation may eliminate the right of shareholders to act by written consent by amendment to its certificate of incorporation.
Shareholder proposals
BVI law and our Memorandum and Article provide that our directors shall call a meeting of the shareholders if requested in writing to do so by shareholders entitled to exercise at least 30% of the voting rights in respect of the matter for which the meeting is requested.
Under the DGCL, a shareholder has the right to put any proposal before the annual meeting of shareholders, provided it complies with the notice provisions in the governing documents. A special meeting may be called by the board of directors or any other person authorized to do so in the governing documents, but shareholders may be precluded from calling special meetings.
Cumulative voting
There are no prohibitions to cumulative voting under the laws of the BVI, but our Memorandum and Articles do not provide for cumulative voting.
Cumulative voting potentially facilitates the representation of minority shareholders on a board of directors since it permits the minority shareholder to cast all the votes to which the shareholder is entitled on a single director, which increases the shareholder’s voting power with respect to electing such director.
Under the DGCL, cumulative voting for elections of directors is not permitted unless the corporation’s certificate of incorporation specifically provides for it. As a result, our shareholders are not afforded any less protections or rights on this issue than shareholders of a Delaware corporation.
Removal of directors
Our Articles provides that a director may be removed from office by a resolution of shareholders or by resolution of directors. A resolution for the removal of a director may only be passed at a meeting called for the purpose of removing the director or for purposes including the removal of the director or by a written resolution passed by at least seventy-five percent (75%) of the votes of the members or directors of the Company entitled to vote.
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Under the DGCL, a director of a corporation with a classified board may be removed only for cause with the approval of a majority of the outstanding shares entitled to vote, unless the certificate of incorporation provides otherwise.
Transactions with interested shareholders
The DGCL contains a business combination statute applicable to Delaware public corporations whereby, unless the corporation has specifically elected not to be governed by such statute by amendment to its certificate of incorporation, it is prohibited from engaging in certain business combinations with an “interested shareholder” for three years following the date that such person becomes an interested shareholder. An interested shareholder generally is a person or group who or which owns or owned 15% or more of the target’s outstanding voting shares within the past three years. This has the effect of limiting the ability of a potential acquirer to make a two-tiered bid for the target in which all shareholders would not be treated equally. The statute does not apply if, among other things, prior to the date on which such shareholder becomes an interested shareholder, the board of directors approves either the business combination or the transaction which resulted in the person becoming an interested shareholder. This encourages any potential acquirer of a Delaware public corporation to negotiate the terms of any acquisition transaction with the target’s board of directors.
BVI law has no comparable provision. As a result, we cannot avail ourselves of the types of protections afforded by the Delaware business combination statute. Although BVI law does not regulate transactions between a company and its significant shareholders, it does provide that transactions by the Company must be entered into bona fide in the best interests of the company and not with the effect of oppressing or constituting a fraud on the minority shareholders.
Dissolution; Winding Up
As permitted by BVI law and our Memorandum and Articles, we may be voluntarily liquidated under Part XII of the BVI Act by resolution of directors and resolution of shareholders if we have no liabilities or we are able to pay our debts as they fall due and value of the Company’s assets equals or exceeds its liabilities.
Under the Delaware General Corporation Law, unless the board of directors approves the proposal to dissolve, dissolution must be approved by shareholders holding 100% of the total voting power of the corporation. Only if the dissolution is initiated by the board of directors may it be approved by a simple majority of the corporation’s outstanding shares. Delaware law allows a Delaware corporation to include in its certificate of incorporation a supermajority voting requirement in connection with dissolutions initiated by the board.
Variation of rights of shares
Under the Delaware General Corporation Law, a corporation may vary the rights of a class of shares with the approval of a majority of the outstanding shares of such class, unless the certificate of incorporation provides otherwise.
Under our Memorandum and Articles, if at any time our shares are divided into different classes of shares, the rights attached to any class may only be varied pursuant to consent in writing of all the holders of the issued shares of that class or with the sanction of a resolution passed by a majority of the votes cast at a separate meeting of the holders of the shares of that class.
To every such separate general meeting all the provisions of the Articles relating to general meetings of shareholders shall, mutatis mutandis, apply, but so that:
| (a) | separate general meetings of the holders of a class or series of shares may be called only by (i) the chairman of the board of directors, or (ii) a majority of the entire board of directors (unless otherwise specifically provided by the terms of issue of the shares of such class or series): |
| (b) | the necessary quorum (whether at a separate general meeting or at its adjourned meeting) shall be a person or persons (or in the case of a shareholder being a corporation, its duly authorized representative) together holding or representing by proxy not less than one-third in nominal or par value of the issued shares of that class (but so that if at any adjourned meeting of such holders a quorum as above defined is not present, those shareholders who are present shall form a quorum); |
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| (c) | every holder of shares of the class shall be entitled (whether on show of hands or on a poll) to one vote for every such share held by him; and |
| (d) | any holder of shares of the class present in person or by proxy or authorized representative may demand a poll. |
Amendment of governing documents
As permitted by BVI law, our Memorandum and Articles may be amended by a resolution of shareholders and, subject to certain exceptions, by a resolution of directors. Any amendment is effective from the date it is registered at the Registry of Corporate Affairs in the BVI. Under the Delaware General Corporation Law, a corporation’s governing documents may be amended with the approval of a majority of the outstanding shares entitled to vote, unless the certificate of incorporation provides otherwise.
History of Securities Issuances
Convertible Notes Financing
On June 10, 2024, Softbank subscribed to a USD1,000,000 convertible note with a 24 months maturity period with the Company. The Note shall be convertible to the Company’s Class A Ordinary Shares at a conversion price that is equal to the higher of (i) the price per share paid by investors for Class A Ordinary Shares in the Company’s initial public offering or (ii) a 15% discount to the volume weighted average price during the sixty-day period prior to the date of notice of conversion is given to the Company at Softbank’s sole discretion after one year from the date of issuance.
Class B Ordinary Shares Issuances
On March 18, 2024, we issued 20,788,886 Class B Ordinary Shares to members of our Board, executive officers or their affiliates and existing shareholders, at an issue price of $0.00001 per share, for a total consideration of $208.
On March 6, 2020, Berjaya Academy Pte. Ltd. issued 100,000 Ordinary Shares to Poh San Koh, who held them in a representative capacity for Swee Kheng Chua. On January 10, 2022, Poh San Koh transferred the 100,000 shares to Sharifah Noriati Binte Said Omar. On November 1, 2023, 100,000 shares were transferred from Sharifah Noriati Binte Said Omar to Concorde International Group Pte Ltd (Singapore) for 1 Singapore Dollar. The shares were held by Sharifah Noriati Binte Said Omar in a representative capacity for Swee Kheng Chua. On March 14, 2024, the Company re-designated and reclassified the 100,000 authorized shares to 100,000 Class B Ordinary Shares.
All of the shares were sold to members of our Board, executive officers or their affiliates and existing shareholders, in reliance upon (i) the exemption contained in Section 4(a)(2) of the Securities Act, and Rule 506(b) of Regulation D promulgated thereunder, and applicable state securities laws, or (ii) the provisions of Regulation S promulgated under the Securities Act.
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The following table presents the amounts of Class B Ordinary Shares that were issued as of the date of this prospectus and aggregate purchase prices paid by the members of our Board, executive officers or their affiliates and existing shareholders. The terms of these purchases were the same for all purchasers of our Class B Ordinary Shares.
| Shareholder | Class B Common Shares | Aggregate Purchase Price Paid | ||||||
| Swee Kheng Chua(1) | 18,000,000 | $ | 180 | |||||
| Terence Wing Khai Yap(2) | 250,000 | $ | 2.5 | |||||
| Sze Yin Ong(3) | 46,296 | $ | 0.46296 | |||||
| Sharifah Noriati Binte Said Omar(4) | 185,185 | $ | 1.85185 | |||||
| Ping Ping Lim(5) | 377,775 | $ | 3.77775 | |||||
| Jia Wei Chua(6) | 14,815 | $ | 0.14815 | |||||
| Meang Fai Pang | 14,815 | $ | 0.14815 | |||||
| Weilekai Investments Pte Ltd(7) | 2,000,000 | $ | 20 | |||||
| (1) | Swee Kheng Chua, our Chief Executive Officer and Director. |
| (2) | Terence Wing Khai Yap, our Director. |
| (3) | Sze Yin Ong, our Chief Financial Officer. |
| (4) | Ms. Sharifah Noriati Binte Said Omar serves as a nominee director at Berjaya Academy Pte Ltd, our 70% owned subsidiary, as well as Concorde Security Pte Ltd (Singapore), our 96.81% owned subsidiary, and Concorde Asia Pte Ltd (Singapore), our 70% owned subsidiary. |
| (5) | Ping Ping Lim, Swee Kheng Chua’s spouse. |
| (6) | Jia Wei Chua, Swee Kheng Chua’s son. |
| (7) | Weilekai Investments Pte Ltd is a Singapore company, 50% owned by Swee Kheng Chua and 50% owned by Ping Ping Lim, Spouse of Swee Kheng Chua. Swee Kheng Chua is deemed to beneficially own the Class B Ordinary Shares owned by Weilekai Investments Pte Ltd and has sole voting and dispositive powers over its shares. Weilekai Investments Pte Ltd’s business address is 3 Ang Mo Kio Street 62 #01-49 LINK@AMK Singapore 569139. |
Listing
We intend to apply to list our Class A Ordinary Shares on the Nasdaq Capital Market under the trading symbols “CIGL”, and we will not close this offering unless the Nasdaq Capital Market has approved our Class A Ordinary Shares for listing.
Transfer Agent and Registrar
Upon the closing of this offering, the transfer agent and registrar for our Class A Ordinary Shares in the United States will be Vstock Transfer, LLC. The address for Vstock Transfer, LLC is 18 Lafayette Place, Woodmere, New York, 11598, and the telephone number is 212 828-8436.
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SHARES ELIGIBLE FOR FUTURE SALE
Before this offering, there has not been a public market for shares of our Class A Ordinary Shares. Future sales of substantial amounts of Class A Ordinary Shares, including shares issued upon the conversion of convertible notes, the exercise of outstanding options and warrants, in the public market after this offering, or the possibility of these sales occurring, could cause the prevailing market price for our Class A Ordinary Shares to fall or impair our ability to raise equity capital in the future.
Immediately following the closing of this offering, we will have Class A Ordinary Shares issued and outstanding. In the event the underwriters exercise the over-allotment option in full, we will have Class A Ordinary Shares issued and outstanding. The Class A Ordinary Shares sold in this offering will be freely tradable without restriction or further registration or qualification under the Securities Act.
Previously issued Class A Ordinary Shares that were not offered and sold in this offering, as well as shares issuable upon the exercise of warrants and subject to employee stock options, are or will be upon issuance, “restricted securities,” as that term is defined in Rule 144 under the Securities Act. These restricted securities are eligible for public sale only if such public resale is registered under the Securities Act or if the resale qualifies for an exemption from registration under Rule 144 or Rule 701 under the Securities Act, which are summarized below.
Rule 144
In general, a person who has beneficially owned restricted Class A Ordinary Shares for at least twelve months, or at least six months in the event we have been a reporting company under the Exchange Act for at least ninety (90) days before the sale, would be entitled to sell such securities, provided that such person is not deemed to be an affiliate of ours at the time of sale or to have been an affiliate of ours at any time during the ninety (90) days preceding the sale. A person who is an affiliate of ours at such time would be subject to additional restrictions, by which such person would be entitled to sell within any three-month period only a number of shares that does not exceed the greater of the following:
| ● | 1% of the number of Class A Ordinary Shares then outstanding; or |
| ● | 1% of the average weekly trading volume of our Class A Ordinary Shares during the four calendar weeks preceding the filing by such person of a notice on Form 144 with respect to the sale; |
provided that, in each case, we are subject to the periodic reporting requirements of the Exchange Act for at least 90 days before the sale. Rule 144 trades must also comply with the manner of sale, notice and other provisions of Rule 144, to the extent applicable.
Rule 701
In general, Rule 701 allows a shareholder who purchased shares pursuant to a written compensatory plan or contract and who is not deemed to have been an affiliate of ours during the immediately preceding 90 days to sell those shares in reliance upon Rule 144, but without being required to comply with the public information, holding period, volume limitation or notice provisions of Rule 144. All holders of Rule 701 shares, however, are required to wait until ninety (90) days after the date of this prospectus before selling shares pursuant to Rule 701.
Lock-Up Agreements
We, all of our directors, officers and any other holder(s) of our issued and outstanding Ordinary Shares as of the effective date of this prospectus (and all holders of securities exercisable for or convertible into Ordinary Shares) have agreed with the underwriters, subject to certain exceptions, not to sell, transfer or dispose of, directly or indirectly, any of our Class A Ordinary Shares or securities convertible into or exercisable or exchangeable for our Class A Ordinary Shares for a period of 180 days after the closing of this offering in the case of our company. See “Underwriting — Lock-Up Agreements.”
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MATERIAL UNITED STATES, BRITISH VIRGIN ISLANDS
AND SINGAPORE
INCOME TAX CONSIDERATIONS
BVI Taxation
As Concorde International is incorporated under the BVI Act, it is exempt from all provisions of the Income Tax Act (as amended) of the British Virgin Islands (including with respect to all dividends, interests, rents, royalties, compensation and other amounts payable by Concorde International to persons who are not persons resident in the British Virgin Islands).
Capital gains realized with respect to any shares, debt obligations or other securities of Concorde International by persons who are not persons resident in the British Virgin Islands are also exempt from all provisions of the Income Tax Act (as amended) of the British Virgin Islands.
No estate, inheritance, succession or gift tax is payable by persons who are not persons resident in the British Virgin Islands with respect to any shares, debt obligations or other securities of Concorde International, save for interest payable to or for the benefit of an individual resident in the European Union.
U.S. Federal Income Taxation Considerations
The following discussion describes the material U.S. federal income tax consequences applicable to the ownership and disposition of our Class A Ordinary Shares by U.S. Holders (as defined below). This discussion applies to U.S. Holders that purchase our Class A Ordinary Shares pursuant to this prospectus and hold such Class A Ordinary Shares as capital assets. This discussion is based on the U.S. Internal Revenue Code of 1986, as amended, or the Code, U.S. Treasury regulations promulgated thereunder and administrative and judicial interpretations thereof, all as in effect on the date hereof and all of which are subject to change, possibly with retroactive effect. This discussion does not address all of the U.S. federal income tax consequences that may be relevant to specific U.S. Holders in light of their particular circumstances or to U.S. Holders subject to special treatment under U.S. federal income tax law (such as certain financial institutions, insurance companies, broker-dealers and traders in securities or other persons that generally mark their securities to market for U.S. federal income tax purposes, tax-exempt entities, retirement plans, regulated investment companies, real estate investment trusts, certain former citizens or residents of the United States, persons who hold our Class A Ordinary Shares as part of a “straddle”, “hedge”, “conversion transaction”, “synthetic security” or integrated investment, persons that have a “functional currency” other than the U.S. dollar, persons that own directly, indirectly or through attribution 10% or more of the voting power of our shares, corporations that accumulate earnings to avoid U.S. federal income tax, persons subject to special tax accounting rules under Section 451(b) of the Code, partnerships and other pass-through entities, and investors in such pass-through entities). This discussion does not address any U.S. state or local or non-U.S. tax consequences or any U.S. federal estate, gift or alternative minimum tax consequences.
As used in this discussion, the term “U.S. Holder” means a beneficial owner of our Class A Ordinary Shares that is, for U.S. federal income tax purposes, (i) an individual who is a citizen or resident of the United States, (ii) a corporation (or an entity treated as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States, any state thereof, or the District of Columbia, (iii) an estate the income of which is subject to U.S. federal income tax regardless of its source or (iv) a trust (x) with respect to which a court within the United States is able to exercise primary supervision over its administration and one or more United States persons have the authority to control all of its substantial decisions or (y) that has elected under applicable U.S. Treasury regulations to be treated as a domestic trust for U.S. federal income tax purposes.
If an entity treated as a partnership for U.S. federal income tax purposes holds our Class A Ordinary Shares, the U.S. federal income tax consequences relating to an investment in our Class A Ordinary Shares will depend in part upon the status and activities of such entity and the particular partner. Any such entity should consult its own tax advisor regarding the U.S. federal income tax consequences applicable to it and its partners of the purchase, ownership and disposition of our Class A Ordinary Shares. Persons considering an investment in our Class A Ordinary Shares should consult their own tax advisors as to the particular tax consequences applicable to them that may result from the purchase, ownership and disposition of our Class A Ordinary Shares, including the applicability of U.S. federal, state and local tax laws and non-U.S. tax laws.
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Passive Foreign Investment Company Consequences
In general, a corporation organized outside the United States will be treated as a passive foreign investment company, or PFIC, for any taxable year in which either (1) at least 75% of its gross income is “passive income” or (2) on average at least 50% of its assets, determined on a quarterly basis, are assets that produce passive income or are held for the production of passive income. Passive income for this purpose generally includes, among other things, dividends, interest, royalties, rents, and gains from the sale or exchange of property that gives rise to passive income. Assets that produce or are held for the production of passive income generally include cash, even if held as working capital or raised in a public offering, marketable securities, and other assets that may produce passive income. Generally, in determining whether a non-U.S. corporation is a PFIC, a proportionate share of the income and assets of each corporation in which it owns, directly or indirectly, at least a 25% interest (by value) is taken into account.
Although we do not believe that we were a PFIC for the year ending December 31, 2023, our determination is based on an interpretation of complex provisions of the law, which are not addressed in a significant number of administrative pronouncements or rulings by the Internal Revenue Service, or IRS. Accordingly, there can be no assurance that our conclusions regarding our status as a PFIC for the 2023 taxable year will not be challenged by the IRS and, if challenged, upheld in appropriate proceedings. In addition, because PFIC status is determined on an annual basis and generally cannot be determined until the end of the taxable year, there can be no assurance that we will not be a PFIC for the current taxable year. Because we may continue to hold a substantial amount of cash and cash equivalents, and because the calculation of the value of our assets may be based in part on the value of our Class A Ordinary Shares, which may fluctuate considerably, we may be a PFIC in future taxable years. Even if we determine that we are not a PFIC for a particular taxable year, there can be no assurance that the IRS will agree with our conclusion and that the IRS would not successfully challenge our position. Our status as a PFIC is a fact-intensive determination made on an annual basis.
If we are a PFIC in any taxable year during which a U.S. Holder owns our Class A Ordinary Shares, the U.S. Holder could be liable for additional taxes and interest charges under the “PFIC excess distribution regime” upon (1) a distribution paid during a taxable year that is greater than 125% of the average annual distributions paid in the three preceding taxable years, or, if shorter, the U.S. Holder’s holding period for our Class A Ordinary Shares, and (2) any gain recognized on a sale, exchange or other disposition, including a pledge, of our Class A Ordinary Shares, whether or not we continue to be a PFIC. Under the PFIC excess distribution regime, the tax on such distribution or gain would be determined by allocating the distribution or gain ratably over the U.S. Holder’s holding period for our Class A Ordinary Shares. The amount allocated to the current taxable year (i.e., the year in which the distribution occurs or the gain is recognized) and any year prior to the first taxable year in which we are a PFIC will be taxed as ordinary income earned in the current taxable year. The amount allocated to other taxable years will be taxed at the highest marginal rates in effect for individuals or corporations, as applicable, to ordinary income for each such taxable year, and an interest charge, generally applicable to underpayments of tax, will be added to the tax.
If we are a PFIC for any year during which a U.S. Holder holds our Class A Ordinary Shares, we must generally continue to be treated as a PFIC by that holder for all succeeding years during which the U.S. Holder holds our Class A Ordinary Shares, unless we cease to meet the requirements for PFIC status and the U.S. Holder makes a “deemed sale” election with respect to our Class A Ordinary Shares. If the election is made, the U.S. Holder will be deemed to sell our Class A Ordinary Shares it holds at their fair market value on the last day of the last taxable year in which we qualified as a PFIC, and any gain recognized from such deemed sale would be taxed under the PFIC excess distribution regime. After the deemed sale election, the U.S. Holder’s Class A Ordinary Shares would not be treated as shares of a PFIC unless we subsequently become a PFIC.
If we are a PFIC for any taxable year during which a U.S. Holder holds our Class A Ordinary Shares and one of our non-U.S. corporate subsidiaries is also a PFIC (i.e., a lower-tier PFIC), such U.S. Holder would be treated as owning a proportionate amount (by value) of the shares of the lower-tier PFIC and would be taxed under the PFIC excess distribution regime on distributions by the lower-tier PFIC and on gain from the disposition of shares of the lower-tier PFIC even though such U.S. Holder would not receive the proceeds of those distributions or dispositions. Each U.S. Holder is advised to consult its tax advisors regarding the application of the PFIC rules to our non-U.S. subsidiaries.
If we are a PFIC, a U.S. Holder will not be subject to tax under the PFIC excess distribution regime on distributions or gain recognized on our Class A Ordinary Shares if such U.S. Holder makes a valid “mark-to-market” election for our Class A Ordinary Shares. A mark-to-market election is available to a U.S. Holder only for “marketable stock”.
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Our Class A Ordinary Shares will be marketable stock as long as they remain listed on the Nasdaq Capital Market and are regularly traded, other than in de minimis quantities, on at least 15 days during each calendar quarter. If a mark-to-market election is in effect, a U.S. Holder generally would take into account, as ordinary income each year, the excess of the fair market value of our Class A Ordinary Shares held at the end of such taxable year over the adjusted tax basis of such Class A Ordinary Shares. The U.S. Holder would also take into account, as an ordinary loss each year, the excess of the adjusted tax basis of such our Class A Ordinary Shares over their fair market value at the end of the taxable year, but only to the extent of the excess of amounts previously included in income over ordinary losses deducted as a result of the mark-to-market election. The U.S. Holder’s tax basis in our Class A Ordinary Shares would be adjusted to reflect any income or loss recognized as a result of the mark-to-market election. Any gain from a sale, exchange or other disposition of our Class A Ordinary Shares in any taxable year in which we are a PFIC would be treated as ordinary income and any loss from such sale, exchange or other disposition would be treated first as ordinary loss (to the extent of any net mark-to-market gains previously included in income) and thereafter as capital loss.
A mark-to-market election will not apply to our Class A Ordinary Shares for any taxable year during which we are not a PFIC but will remain in effect with respect to any subsequent taxable year in which we become a PFIC. Such election will not apply to any non-U.S. subsidiaries that we may organize or acquire in the future. Accordingly, a U.S. Holder may continue to be subject to tax under the PFIC excess distribution regime with respect to any lower-tier PFICs that we may organize or acquire in the future, notwithstanding the U.S. Holder’s mark-to-market election for our Class A Ordinary Shares.
The tax consequences that would apply if we were a PFIC would also be different from those described above if a U.S. Holder were able to make a valid qualified electing fund, or QEF, election. At this time, we do not expect to provide U.S. Holders with the information necessary for a U.S. Holder to make a QEF election. Consequently, prospective investors should assume that a QEF election will not be available.
Each U.S. person that is an investor of a PFIC is generally required to file an annual information return on IRS Form 8621 containing such information as the U.S. Treasury Department may require. The failure to file IRS Form 8621 could result in the imposition of penalties and the extension of the statute of limitations with respect to U.S. federal income tax.
The U.S. federal income tax rules relating to PFICs are very complex. Prospective U.S. investors are strongly urged to consult their own tax advisors with respect to the impact of our potential PFIC status on the purchase, ownership and disposition of our Class A Ordinary Shares, the consequences to them of an investment in a PFIC, any elections available with respect to our Class A Ordinary Shares and the IRS information reporting obligations with respect to the purchase, ownership and disposition of the Class A Ordinary Shares under the PFIC rules.
Distributions
Subject to the discussion above under “— Passive Foreign Investment Company Consequences”, a U.S. Holder that receives a distribution with respect to our Class A Ordinary Shares generally will be required to include the gross amount of such distribution in gross income as a dividend when actually or constructively received to the extent of the U.S. Holder’s pro rata share of our current and/or accumulated earnings and profits (as determined under U.S. federal income tax principles). To the extent a distribution received by a U.S. Holder is not a dividend because it exceeds the U.S. Holder’s pro rata share of our current and accumulated earnings and profits, it will be treated first as a tax-free return of capital and reduce (but not below zero) the adjusted tax basis of the U.S. Holder in our Class A Ordinary Shares. To the extent the distribution exceeds the adjusted tax basis of the U.S. Holder in our Class A Ordinary Shares, the remainder will be taxed as capital gain. Because we may not account for our earnings and profits in accordance with U.S. federal income tax principles, U.S. Holders should expect all distributions to be reported to them as dividends. Distributions on our Class A Ordinary Shares that are treated as dividends generally will constitute income from sources outside the United States for foreign tax credit purposes and generally will constitute passive category income. Such dividends will not be eligible for the “dividends received” deduction generally allowed to corporate shareholders with respect to dividends received from U.S. corporations.
Dividends paid by a “qualified foreign corporation” are eligible for taxation for certain non-corporate U.S. Holders at a reduced capital gains rate rather than the marginal tax rates generally applicable to ordinary income provided that certain requirements are met. However, if we are a PFIC for the taxable year in which the dividend is paid or the preceding taxable year (see discussion above under “— Passive Foreign Investment Company Consequences”), we will not be treated as a qualified foreign corporation, and the reduced capital gains tax rate described above will not apply. Each U.S. Holder is advised to consult its tax advisors regarding the availability of the reduced tax rate on dividends in light of its particular circumstances.
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A non-United States corporation (other than a corporation classified as a PFIC for the taxable year in which the dividend is paid or the preceding taxable year) generally will be considered to be a qualified foreign corporation (a) if it is eligible for the benefits of a comprehensive tax treaty with the United States which the Secretary of the Treasury of the United States determines is satisfactory for purposes of this provision and which includes an exchange of information provision, or (b) with respect to any dividend it pays on shares that are readily tradable on an established securities market in the United States.
Sale, Exchange or Other Disposition of our Class A Ordinary Shares
Subject to the discussion above under “— Passive Foreign Investment Company Consequences”, a U.S. Holder generally will recognize capital gain or loss for U.S. federal income tax purposes upon the sale, exchange or other disposition of our Class A Ordinary Shares in an amount equal to the difference, if any, between the amount realized (i.e., the amount of cash plus the fair market value of any property received) on the sale, exchange or other disposition and such U.S. Holder’s adjusted tax basis in our Class A Ordinary Shares. Such capital gain or loss generally will be long-term capital gain taxable at a reduced rate for noncorporate U.S. Holders or long-term capital loss if, on the date of sale, exchange or other disposition, our Class A Ordinary Shares were held by the U.S. Holder for more than one year. Any capital gain of a non-corporate U.S. Holder that is not long-term capital gain is taxed as ordinary income rates. The deductibility of capital losses is subject to limitations. Any gain or loss recognized from the sale or other disposition of our Class A Ordinary Shares will generally be gain or loss from sources within the United States for U.S. foreign tax credit purposes.
Net Investment Income Tax
Certain U.S. Holders that are individuals, estates or trusts and whose income exceeds certain thresholds generally are subject to a 3.8% tax on all or a portion of their net investment income, which may include their gross dividend income and net gains from the disposition of our Class A Ordinary Shares. If you are a United States person that is an individual, estate or trust, you are encouraged to consult your tax advisors regarding the applicability of this net investment income tax to your income and gains resulting your investment in our Class A Ordinary Shares.
Information Reporting
U.S. Holders may be required to file certain U.S. information reporting returns with the IRS with respect to an investment in our Class A Ordinary Shares, including, among others, IRS Form 8938, Statement of Specified Foreign Financial Assets. As described above under “Passive Foreign Investment Company Consequences”, each U.S. Holder who is a shareholder of a PFIC must file an annual report containing certain information. U.S. Holders paying more than $100,000 for our Class A Ordinary Shares may be required to file IRS Form 926, Return by a U.S. Transferor of Property to a Foreign Corporation reporting this payment. Substantial penalties may be imposed upon a U.S. Holder that fails to comply with the required information reporting.
U.S. Holders should consult their own tax advisors regarding the information reporting rules.
Certain Singapore Taxation Considerations
The following summary is not intended to be or to be regarded as tax advice to any investors, and investors should consult their own professional tax advisors regarding the Singapore tax matters.
Corporate Income Tax
A company is regarded as a tax resident in Singapore if the control and management of its business is exercised in Singapore. “Control and management” is defined as the making of decisions on strategic matters, such as those concerning the company’s policy and strategy. Generally, the location of a company’s board of directors’ meetings where strategic decisions are made determines where the control and management of that company is exercised. However, under certain scenarios, holding board meetings in Singapore may not be sufficient and other factors will be considered to determine if the control and management of the business is indeed exercised in Singapore.
A Singapore tax resident corporate taxpayer is subject to Singapore income tax on:
| (a) | income accruing in or derived from Singapore; or |
| (b) | income derived from outside Singapore (i.e. foreign-sourced income) which is received or deemed received in Singapore, unless otherwise exempted. A non-Singapore tax resident corporate taxpayer is liable to Singapore income tax on income accruing in or derived from Singapore. |
A non-Singapore tax resident corporate taxpayer is also liable to Singapore income tax on income derived from outside Singapore which is received or deemed to have been received in Singapore but generally only where such taxpayer is considered to be operating in or from Singapore.
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Foreign-sourced income is deemed to be received in Singapore when it is:
| (a) | remitted to, transmitted or brought into Singapore; |
| (b) | used to pay off any debt incurred in respect of a trade or business carried on in Singapore; or |
| (c) | used to purchase any movable property brought into Singapore. |
Foreign-sourced income in the form of branch profits, dividends and service fee income (“specified foreign income”) received or deemed received in Singapore by a Singapore tax resident company are exempted from Singapore tax provided that the following qualifying conditions are met:
| (a) | such income is subject to tax of a similar character to income tax (by whatever name called) under the law of the territory from which such income is received; |
| (b) | at the time such income is received in Singapore by the person resident in Singapore, the highest rate of tax of a similar character to income tax (by whatever name called) levied under the law of the territory from which such income is received on any gains or profits from any trade or business carried on by any company in that territory at that time is at least 15.0%; and |
| (c) | the Comptroller of Income Tax (the “Comptroller”) is satisfied that the tax exemption would be beneficial to the person resident in Singapore who is receiving or deemed to be receiving the specified foreign income. |
The prevailing corporate income tax rate in Singapore is 17.0% with the first S$200,000 of chargeable income of a company being partially exempt from tax as follows:
| (a) | 75.0% of the first S$10,000 of chargeable income; and |
| (b) | 50.0% of the next S$190,000 of chargeable income. |
New companies will also, subject to certain conditions and exceptions, be eligible for tax exemption for each of the company’s first three (3) years of assessment as follows:
| (a) | 75.0% of the first S$100,000 of chargeable income; and |
| (b) | 50.0% of the next S$100,000 of chargeable income. |
The remaining chargeable income (after the tax exemption scheme for new companies or the partial tax exemption scheme for companies) will be fully taxable at the prevailing corporate tax rate. For the year of assessment 2024, companies will receive a 50% corporate income tax rebate capped at S$40,000. For companies which employed at least one local employee in 2023 will receive a cash payout of at least S$2,000. The maximum total benefits of the corporate income tax rebate and the cash payout that a company may receive is capped at S$40,000.
Dividend Distributions
All Singapore-tax resident companies are currently under the one-tier corporate tax system, or one-tier system.
Under the one-tier system, the income tax paid by a tax resident company is a final tax and its distributable profits can be distributed to shareholders as tax exempt (one-tier) dividends. Such dividends are tax exempt in the hands of a shareholder, regardless of the tax residence status, shareholding level or legal form of the shareholder.
Accordingly, dividends received in respect of the ordinary shares of a Singapore-tax resident company by either a resident or non-resident of Singapore are not subject to Singapore income tax (whether by withholding or otherwise).
Foreign shareholders are advised to consult their own tax advisers to take into account the tax laws of their respective countries of residence and the existence of any agreement for the avoidance of double taxation which their country of residence may have with Singapore.
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Gains on Disposal of Shares
Singapore does not currently impose tax on capital gains. Gains arising from the disposal of the shares may be construed to be of an income nature and subject to Singapore income tax, especially if they arise from activities which may be regarded as the carrying on of a trade or business in Singapore. Such gains may also be considered income in nature, even if they do not arise from an activity in the ordinary course of trade or business or an ordinary incident of some other business activity, if the shares were purchased with the intention or purpose of making a profit by sale rather than holding for long-term investment purposes in Singapore. Conversely, gains from disposition of the shares in Singapore, if considered as capital gains rather than income by the Inland Revenue Authority of Singapore (“IRAS”), are not taxable in Singapore.
There are no specific laws or regulations which deal with the characterization of whether a gain is income or capital in nature. The characterization of gains arising from the sale of our shares will depend primarily on the facts and circumstances (commonly referred to as the “badges of trade”) of each shareholder.
Subject to specified exceptions, Section 13W of the Income Tax Act 1947 (“SITA”) provides for certainty on the non-taxability of gains derived by a corporate taxpayer from the disposal of ordinary shares during the period from June 1, 2012 to December 31, 2027 (both dates inclusive) where:
| ● | the divesting company had legally and beneficially held a minimum shareholding of 20% of the ordinary shares of the company whose shares are being disposed; and |
| ● | the divesting company had maintained the minimum 20% shareholding for a continuous period of at least 24 months immediately prior to the disposal. |
The exemption prescribed under Section 13W of the SITA is not applicable under the following scenarios:
| (a) | the disposal(s) of shares the gains or profits of which are included as part of the income of an insurer company; |
| (b) | the disposal of shares before 1 June 2022 in a company that is: |
| (i) | is in the business of trading Singapore immovable properties; or |
| (ii) | principally carries on the activity of holding Singapore immovable properties, other than property development, where the shares are not listed on a stock exchange in Singapore or elsewhere; |
| (c) | the disposal of shares on or after 1 June 2022 not listed on a stock exchange in Singapore or elsewhere, being shares in a company that the Comptroller is satisfied: |
| (i) | is in the business of trading immovable properties situated whether in Singapore or elsewhere; |
| (ii) | principally carries on the activity of holding immovable properties situated whether in Singapore or elsewhere; or |
| (iii) | has undertaken property development on Singapore or elsewhere, except where: |
| (A) | the immovable property developed is used by the company to carry on its trade or business (including the business of letting immovable properties), not being a business mentioned in sub-paragraph (i); and |
| (B) | the company did not undertake any property development in Singapore or elsewhere for a period of at least 60 consecutive months before the disposal of shares; or |
| (d) | the disposal(s) of shares by a partnership, limited partnership and limited liability partnership one or more of the partners of which is a company or are companies. |
Shareholders who apply, or who are required to apply, the Singapore Financial Reporting Standard 39 — Financial Instruments: Recognition and Measurement, or SFRS(I) 1-39; the Singapore Financial Reporting Standard 109 — Financial Instruments, or FRS 109; or the Singapore Financial Reporting Standard (International) 9 — Financial Instruments, or SFRS(I) 9, may for the purposes of Singapore income tax be required to recognize gains or losses in respect of financial instruments (not being gains or losses in the nature of capital) in accordance with SFRS(I) 1-39, FRS 109 or SFRS(I) 9 (as the case may be) (as modified by the applicable provisions of Singapore income tax law) even where no sale or disposal of the shares is made.
Shareholders who may be subject to the above-mentioned tax treatments, including under Sections 34A or 34AA of the SITA, should consult their accounting and tax advisers regarding the Singapore income tax consequences of their acquisition, holding and disposal of the shares.
EACH PROSPECTIVE INVESTOR IS URGED TO CONSULT ITS OWN TAX ADVISOR ABOUT THE TAX CONSEQUENCES TO IT OF AN INVESTMENT IN CLASS A ORDINARY SHARES IN LIGHT OF THE INVESTOR’S OWN CIRCUMSTANCES.
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ENFORCEABILITY OF CIVIL LIABILITIES
We were incorporated under the laws of British Virgin Islands. All of our directors and officers, as well as the certain experts named in the “Experts” section of this prospectus, reside outside of the United States. Service of process upon such persons may be difficult or impossible to effect within the United States. Furthermore, because a substantial portion of our assets, and substantially all the assets of our directors and officers named herein, are located outside of the United States, any judgment obtained in the United States, including a judgment based upon the civil liability provisions of United States federal securities laws, against us or any of such persons may not be collectible within the United States.
Our agent for service of process in the United States is Cogency Global Inc., located at 122 East 42nd Street, 18th Floor, New York, NY 10168.
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R.F. Lafferty & Co., Inc. is the representative for the several underwriters of this offering, or the representative. We have entered into an underwriting agreement dated , 2024, with R.F. Lafferty & Co., Inc. Subject to the terms and conditions of the underwriting agreement, we have agreed to sell to the underwriters, and each underwriter has agreed, severally and not jointly, to purchase, at the public offering price less the underwriting discounts set forth on the cover page of this prospectus, the number of Class A Ordinary Shares at the initial public offering price, less the underwriting discounts and commissions, as set forth on the cover page of this prospectus, the number of shares listed next to its name in the following table:
| Underwriter | Number of Shares |
|||
| R.F. Lafferty & Co., Inc. | ||||
| Total | 1,250,000 | |||
The underwriters are committed to purchase all Class A Ordinary Shares offered by us other than those covered by the over-allotment option described below, if any are purchased. The obligations of the underwriters may be terminated upon the occurrence of certain events specified in the underwriting agreement. Furthermore, the underwriting agreement provides that the obligations of the underwriters to pay for and accept delivery of the Class A Ordinary Shares offered by us in this prospectus are subject to various representations and warranties and other customary conditions specified in the underwriting agreement, such as receipt by the representative of officers’ certificates and legal opinions.
We have agreed to indemnify the underwriters against specified liabilities, including liabilities under the Securities Act, and to contribute to payments the underwriters may be required to make in respect thereof.
The underwriters are offering Class A Ordinary Shares subject to prior sale, when, as and if issued to and accepted by them, subject to approval of legal matters by its counsel and other conditions specified in the underwriting agreement. The underwriters reserve the right to withdraw, cancel or modify offers to the public and to reject orders in whole or in part.
We have granted the underwriters an over-allotment option. This option, which is exercisable for up to 45 days after the date of this prospectus, permits the underwriters to purchase up to an aggregate of 187,500 additional Class A Ordinary Shares (equal to 15% of the Class A Ordinary Shares sold in this offering) at the public offering price per share, less underwriting discounts and commissions, solely to cover over-allotments, if any. If the underwriters exercise this option in whole or in part, then the underwriters will be committed, subject to the conditions described in the underwriting agreement, to purchase the additional Class A Ordinary Shares in proportion to their respective commitments set forth in the prior table.
Discounts, Commissions and Reimbursement
The representative has advised us that the underwriters propose to offer the shares to the public at the initial public offering price per share set forth on the cover page of this prospectus. The underwriters may offer shares to securities dealers at that price less a concession of not more than $ per share of which up to $ per share may be reallowed to other dealers. After the initial offering to the public, the public offering price and other selling terms may be changed by the representative.
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The following table summarizes the underwriting discounts and commissions, and proceeds, before expenses, to us assuming both no exercise and full exercise by the underwriters of their over-allotment option:
| Total | ||||||||||||
| Per Share | Offering without Over-Allotment Option | Offering with Over-Allotment Option | ||||||||||
| Public offering price | $ | $ | $ | |||||||||
| Underwriting discounts and commissions (7.5%) | $ | $ | $ | |||||||||
| Proceeds, before expenses, to us | $ | $ | $ | |||||||||
We have agreed to pay an expense deposit of $15,000 to the representative of the underwriters upon execution of an engagement letter relating to this offering (the “Advance”), which will be applied against the actual out-of-pocket accountable expenses that will be incurred by the underwriters in connection with this offering, and will be reimbursed to us to the extent not incurred, of which $15,000 has been paid as of the date hereof.
In addition, we have also agreed to pay the accountable and out-of-pocket expenses of the underwriters relating to the offering up to a maximum aggregate expense allowance of $ 175,000, including, but not limited to background checks of our officers and directors, the fees and expenses of the representatives’ legal counsel, $5,000 of the representative’s clearing system data services and communications expenses and $10,000 of the representative’s Capital IQ system for comparable company analysis and valuation. We have also granted to the Representative non-accountable expense allowance of 1% of the offering proceeds (excluding proceeds from the exercise of the over-allotment option).
We estimate that the total expenses of this offering payable by us, not including underwriting discounts, commissions and expenses, will be approximately $900,000.
Representative’s Warrants
Upon the closing of this offering, we have agreed to issue to the representative warrants to purchase a number of Class A Ordinary Shares equal in the aggregate to 3% of the total shares sold in this public offering (the “Representative’s Warrants”). The Representative’s Warrants will be exercisable at a per share exercise price equal to 100% of the public offering price per share sold in this offering. The Representative’s Warrants are exercisable at any time and from time to time, in whole or in part, commencing six months after the effective date of the registration statement related to this offering and terminating on the fifth anniversary of the commencement of sales of the offering. The Representative’s Warrants also provide for one demand registration right of the shares underlying the Representative’s Warrants, and unlimited “piggyback” registration rights with respect to the registration of the ordinary shares underlying the Representative’s Warrants and customary antidilution provisions. The demand registration right provided will not be greater than five years from the effective date of the registration statement related to this offering in compliance with FINRA Rule 5110(g)(8)(C). The piggyback registration right provided will not be greater than seven years from the effective date of the registration statement related to this offering in compliance with FINRA Rule 5110(g)(8)(D).
The Representative’s Warrants and the Class A Ordinary Shares underlying the Representative’s Warrants have been deemed compensation by the Financial Industry Regulatory Authority, or FINRA, and are therefore subject to a 180-day lock-up pursuant to Rule 5110(e)(1) of FINRA. The Representative’s Warrants and underlying securities may not be sold, transferred, assigned, pledged, or hypothecated nor may they be subject to any hedging, short sale, derivative, put, or call transaction that would result in the effective economic disposition of the Representative’s Warrants or the underlying shares for a period of 180 days from the commencement of sales of the offering except as permitted by FINRA Rule 5110(e)(2). The Representative’s Warrants will provide for adjustment in the number and price of the Representative’s Warrants and the Class A Ordinary Shares underlying such Representative’s Warrants in the event of recapitalization, merger, stock split or other structural transaction, or a future financing undertaken by us.
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Tail Financing
In the event that the offering is not consummated during the time period when R.F. Lafferty & Co., Inc. is engaged with us as the Representative for the several underwriters of this offering (“the Engagement Period”), the Representative shall be entitled to a cash fee equal to seven (7.0%) of the gross proceeds received by us from the sale of any equity, debt and/or equity derivative instruments to any investor actually introduced by the Representative to us during the Engagement Period, in connection with any public or private financing or capital raise (each a “Tail Financing”), and such Tail Financing is consummated at any time during the Engagement Period or within the twelve (12) month period following the expiration or termination of the Engagement Period (the “Tail Period”), provided that such Tail Financing is by a party actually introduced to us in an offering in which we have direct knowledge of such party’s participation. For the avoidance of doubt, such Tail Financing shall not include the offering.
Right of First Refusal
Until six (6) months from the closing of this offering, the representative shall have a right of first refusal to act as sole investment banker, sole book-runner, sole financial advisor, sole underwriter and/or sole placement agent, at the representative’s sole discretion, for each and every future public and private equity offerings for our company, or any successor to or any subsidiary of our company, including all equity linked financings, on terms customary to the representative. The representative shall have the sole right to determine whether or not any other broker-dealer shall have the right to participate in any such offering and the economic terms of any such participation. The representative will not have more than one opportunity to waive or terminate the right of first refusal in consideration of any such transaction.
Discretionary Accounts
The underwriters do not intend to confirm sales of the securities offered hereby to any accounts over which they have discretionary authority.
Lock-Up Agreements
We, all of our directors, officers and any holder(s) of our issued and outstanding Ordinary Shares as of the effective date of this prospectus (and all holders of securities exercisable for or convertible into Ordinary Shares) agreed that for a period of 180 days after the closing of this offering we will not, without the prior written consent of the representative and subject to certain exceptions, directly or indirectly:
| ● | offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any Class A Ordinary Shares or any securities convertible into or exercisable or exchangeable for Class A Ordinary Shares; |
| ● | file or caused to be filed any registration statement with SEC relating to the offering of any Class A Ordinary Shares or any securities convertible into or exercisable or exchangeable for Class A Ordinary Shares; |
| ● | complete any offering of our debt securities, other than entering into a line of credit with a traditional bank; or |
| ● | enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of our Class A Ordinary Shares, whether any such transaction is to be settled by delivery of Class A Ordinary Shares or such other securities, in cash or otherwise. |
Electronic Offer, Sale and Distribution of Securities
A prospectus in electronic format may be made available on the websites maintained by the underwriters or selling group members. The underwriters may agree to allocate a number of securities to selling group members for sale to its online brokerage account holders. Internet distributions will be allocated by the underwriters and selling group members that will make internet distributions on the same basis as other allocations. Other than the prospectus in electronic format, the information on these websites is not part of, nor incorporated by reference into, this prospectus or the registration statement of which this prospectus forms a part, has not been approved or endorsed by us, and should not be relied upon by investors.
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Stabilization
In connection with this offering, the underwriters may engage in stabilizing transactions, over-allotment transactions, syndicate-covering transactions, penalty bids and purchases to cover positions created by short sales.
Stabilizing transactions permit bids to purchase shares so long as the stabilizing bids do not exceed a specified maximum, and are engaged in for the purpose of preventing or retarding a decline in the market price of the shares while this offering is in progress.
Over-allotment transactions involve sales by the underwriters of Class A Ordinary Shares in excess of the number of Class A Ordinary Shares the underwriters are obligated to purchase. This creates a syndicate short position which may be either a covered short position or a naked short position. In a covered short position, the number of Class A Ordinary Shares over-allotted by the underwriters are not greater than the number of Class A Ordinary Shares that they may purchase in the over-allotment option. In a naked short position, the number of Class A Ordinary Shares involved is greater than the number of Class A Ordinary Shares in the over-allotment option. The underwriters may close out any short position by exercising their over-allotment option and/or purchasing Class A Ordinary Shares in the open market.
Syndicate covering transactions involve purchases of Class A Ordinary Shares in the open market after the distribution has been completed in order to cover syndicate short positions. In determining the source of Class A Ordinary Shares to close out the short position, the underwriters will consider, among other things, the price of Class A Ordinary Shares available for purchase in the open market as compared with the price at which it may purchase Class A Ordinary Shares through exercise of the over-allotment option. If the underwriters sell more Class A Ordinary Shares than could be covered by exercise of the over-allotment option and, therefore, have a naked short position, the position can be closed out only by buying Class A Ordinary Shares in the open market. A naked short position is more likely to be created if the underwriters are concerned that after pricing there could be downward pressure on the price of the Class A Ordinary Shares in the open market that could adversely affect investors who purchase in this offering.
Penalty bids permit an underwriter to reclaim a selling concession from a syndicate member when the Class A Ordinary Shares originally sold by that syndicate member are purchased in stabilizing or syndicate covering transactions to cover syndicate short positions.
These stabilizing transactions, syndicate covering transactions and penalty bids may have the effect of raising or maintaining the market price of our Class A Ordinary Shares or preventing or retarding a decline in the market price of our Class A Ordinary Shares. As a result, the price of our Class A Ordinary Shares in the open market may be higher than it would otherwise be in the absence of these transactions. Neither we nor the underwriters make any representation or prediction as to the effect that the transactions described above may have on the price of our Class A Ordinary Shares. These transactions may be effected in the over-the-counter market or otherwise and, if commenced, may be discontinued at any time.
Passive Market Making
In connection with this offering, underwriters, and selling group members may engage in passive market making transactions in our securities on Nasdaq Capital Market in accordance with Rule 103 of Regulation M under the Exchange Act, during a period before the commencement of offers or sales of the shares and extending through the completion of the distribution. A passive market maker must display its bid at a price not in excess of the highest independent bid of that security. However, if all independent bids are lowered below the passive market maker’s bid, then that bid must then be lowered when specified purchase limits are exceeded.
Other Relationships
The underwriters and their affiliates may in the future provide various investment banking, commercial banking and other financial services for us and our affiliates for which they may in the future receive customary fees.
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Offer Restrictions Outside the United States
Other than in the United States, no action has been taken by us or the underwriters that would permit a public offering of the securities offered by this prospectus in any jurisdiction where action for that purpose is required. The securities offered by this prospectus may not be offered or sold, directly or indirectly, nor may this prospectus or any other offering material or advertisements in connection with the offer and sale of any such securities be distributed or published in any jurisdiction, except under circumstances that will result in compliance with the applicable rules and regulations of that jurisdiction. Persons into whose possession this prospectus comes are advised to inform themselves about and to observe any restrictions relating to this offering and the distribution of this prospectus. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities offered by this prospectus in any jurisdiction in which such an offer or a solicitation is unlawful.
Australia
This prospectus is not a disclosure document under Chapter 6D of the Australian Corporations Act, has not been lodged with the Australian Securities and Investments Commission and does not purport to include the information required of a disclosure document under Chapter 6D of the Australian Corporations Act. Accordingly, (i) the offer of the securities under this prospectus is only made to persons to whom it is lawful to offer the securities without disclosure under Chapter 6D of the Australian Corporations Act under one or more exemptions set out in section 708 of the Australian Corporations Act, (ii) this prospectus is made available in Australia only to those persons as set forth in clause (i) above, and (iii) the offeree must be sent a notice stating in substance that by accepting this offer, the offeree represents that the offeree is such a person as set forth in clause (i) above, and, unless permitted under the Australian Corporations Act, agrees not to sell or offer for sale within Australia any of the securities sold to the offeree within 12 months after its transfer to the offeree under this prospectus.
China
The information in this document does not constitute a public offer of the securities, whether by way of sale or subscription, in the People’s Republic of China (excluding, for purposes of this paragraph, Hong Kong Special Administrative Region, Macau Special Administrative Region and Taiwan). The securities may not be offered or sold directly or indirectly in the PRC to legal or natural persons other than directly to “qualified domestic institutional investors.”
European Economic Area — Belgium, Germany, Luxembourg and Netherlands
The information in this document has been prepared on the basis that no offers of securities will be in member states (“Member State”) of the European Economic Area (the “EEA”) other than:
| ● | to legal entities that are qualified investors as defined in the Prospectus Regulation; |
| ● | to fewer than 150 natural or legal persons (other than qualified investors within the meaning of the Prospectus Regulation) subject to obtaining the prior consent of our company or any underwriter for any such offer; or |
| ● | in any other circumstances falling within Article 1(4) of the Prospectus Regulation, provided that no such offer of securities shall result in a requirement for the publication by us of a prospectus pursuant to Article 3 of the Prospectus Directive. |
This prospectus has been prepared on the basis that any offer of Class A Ordinary Shares in any Member State of the EEA will be made pursuant to an exemption under the Prospectus Regulation from the requirement to publish a prospectus for offers of shares. Accordingly any person making or intending to make an offer in that Member State of shares of our ordinary shares which are the subject of the offering contemplated in this prospectus supplement may only do so in circumstances in which no obligation arises for us or any of the Representatives to publish a prospectus pursuant to Article 3 of the Prospectus Regulation or supplement a prospectus pursuant to Article 23 of the Prospectus Regulation, in each case, in relation to such offer. Neither we nor the Representatives have authorized, nor do they authorize, the making of any offer of our ordinary shares in circumstances in which an obligation arises for us or the Representatives to publish a prospectus for such offer.
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For the purposes of this provision, the expression an “offer of shares of our ordinary shares to the public” in relation to any Class A Ordinary Shares in any Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the Class A Ordinary Shares to be offered so as to enable an investor to decide to purchase or subscribe the Class A Ordinary Shares, as the same may be varied in that Member State by any measure implementing the Prospectus Regulation in that Member State, the expression “Prospectus Regulation” means Regulation (EU) 2017/1129.
The above selling restriction is in addition to any other selling restrictions set out below.
Notice to Prospective Investors in the United Kingdom
In relation to the United Kingdom, no offer of Class A Ordinary Shares which are the subject of the offering has been, or will be made to the public in the United Kingdom, other than:
| (a) | to any legal entity which is a qualified investor as defined in Article 2 of the UK Prospectus Regulation (as defined below); |
| (b) | to fewer than 150 natural or legal persons (other than qualified investors as defined in Article 2 of the UK Prospectus Regulation) in the United Kingdom subject to obtaining the prior consent of Representatives for any such offer; or |
| (c) | in any other circumstances falling within section 86 of the FSMA, |
provided that no such offer of Class A Ordinary Shares shall require us or any underwriter to publish a prospectus pursuant to section 85 of the FSMA or supplement a prospectus pursuant to Article 23 of the UK Prospectus Regulation.
In the United Kingdom, this prospectus is not a prospectus for the purposes of the UK Prospectus Regulation (as defined below). This prospectus has been prepared on the basis that any offer of shares of common stock in the United Kingdom will be made pursuant to an exemption under the UK Prospectus Regulation from the requirement to publish a prospectus for offers of shares of common stock. Accordingly, any person making or intending to make an offer in the United Kingdom of shares of common stock which are the subject of the offering contemplated in this prospectus supplement may only do so in circumstances in which no obligation arises for us or any of the underwriters to publish a prospectus pursuant to Article 3 of the UK Prospectus Regulation or supplement a prospectus pursuant to Article 23 of the UK Prospectus Regulation, in each case, in relation to such offer. Neither we nor the underwriters have authorized, nor do they authorize, the making of any offer of shares of common stock in circumstances in which an obligation arises for us or the underwriters to publish or supplement a prospectus for such offer.
For the purposes of this provision, the expression an “offer of shares of our common stock to the public” in relation to any shares of our common stock in the United Kingdom means the communication in any form and by any means of sufficient information on the terms of the offer and the Class A Ordinary Shares to be offered so as to enable an investor to decide to purchase or subscribe the Class A Ordinary Shares, as the same may be varied in United Kingdom by any measure implementing the UK Prospectus Regulation, the expression “UK Prospectus Regulation” means Regulation (EU) 2017/1129 as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018.
The communication of prospectus and any other document or materials relating to the issue of the Class A Ordinary Shares offered hereby is not being made, and such documents and/or materials have not been approved, by an authorized person for the purposes of section 21 of the United Kingdom’s Financial Services and Markets Act 2000, as amended (the “FSMA”). Accordingly, such documents and/or materials are not being distributed to, and must not be passed on to, the general public in the United Kingdom. The communication of such documents and/or materials as a financial promotion is only being made to those persons in the United Kingdom (i) who have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the “Order”) and/or (ii) who are high net worth companies (or persons to whom it may otherwise be lawfully communicated) falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as “relevant persons”). This document must not be acted on or relied on in the United Kingdom by persons who are not relevant persons. In the United Kingdom, any investment or investment activity to which this document relates is only available to, and will be engaged in with, relevant persons.
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Any invitation or inducement to engage in investment activity (within the meaning of Section 21 of the FSMA) in connection with the issue or sale of the shares of common stock may only be communicated or caused to be communicated in circumstances in which Section 21(1) of the FSMA does not apply to us.
All applicable provisions of the FSMA must be complied with in respect to anything done by any person in relation to the shares of common stock in, from or otherwise involving the United Kingdom.
France
This document is not being distributed in the context of a public offering of financial securities (offre au public de titres financiers) in France within the meaning of Article L.411-1 of the French Monetary and Financial Code (Code monétaire et financier) and Articles 211-1 et seq. of the General Regulation of the French Autorité des marchés financiers, or AMF. The securities have not been offered or sold and will not be offered or sold, directly or indirectly, to the public in France.
This document and any other offering material relating to the securities have not been, and will not be, submitted to the AMF for approval in France and, accordingly, may not be distributed or caused to distributed, directly or indirectly, to the public in France.
Such offers, sales and distributions have been and shall only be made in France to (i) qualified investors (investisseurs qualifiés) acting for their own account, as defined in and in accordance with Articles L.411-2-II-2° and D.411-1 to D.411-3, D. 744-1, D.754-1 and D.764-1 of the French Monetary and Financial Code and any implementing regulation and/or (ii) a restricted number of non-qualified investors (cercle restreint d’investisseurs) acting for their own account, as defined in and in accordance with Articles L.411-2-II-2° and D.411-4, D.744-1, D.754-1 and D.764-1 of the French Monetary and Financial Code and any implementing regulation.
Pursuant to Article 211-3 of the General Regulation of the AMF, investors in France are informed that the securities cannot be distributed (directly or indirectly) to the public by the investors otherwise than in accordance with Articles L.411-1, L.411-2, L.412-1 and L.621-8 to L.621-8-3 of the French Monetary and Financial Code.
Ireland
The information in this document does not constitute a prospectus under any Irish laws or regulations and this document has not been filed with or approved by any Irish regulatory authority as the information has not been prepared in the context of a public offering of securities in Ireland within the meaning of the Irish Prospectus (Directive 2003/71/EC) Regulations 2005, or the Prospectus Regulations. The securities have not been offered or sold, and will not be offered, sold or delivered directly or indirectly in Ireland by way of a public offering, except to (i) qualified investors as defined in Regulation 2(l) of the Prospectus Regulations and (ii) fewer than 100 natural or legal persons who are not qualified investors.
Israel
The securities offered by this prospectus have not been approved or disapproved by the Israeli Securities Authority, or the ISA, nor have such securities been registered for sale in Israel. The shares may not be offered or sold, directly or indirectly, to the public in Israel, absent the publication of a prospectus. The ISA has not issued permits, approvals or licenses in connection with this offering or publishing the prospectus; nor has it authenticated the details included herein, confirmed their reliability or completeness, or rendered an opinion as to the quality of the securities being offered. Any resale in Israel, directly or indirectly, to the public of the securities offered by this prospectus is subject to restrictions on transferability and must be effected only in compliance with the Israeli securities laws and regulations.
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Italy
The offering of the securities in the Republic of Italy has not been authorized by the Italian Securities and Exchange Commission (Commissione Nazionale per le Società e la Borsa), or CONSOB, pursuant to the Italian securities legislation and, accordingly, no offering material relating to the securities may be distributed in Italy and such securities may not be offered or sold in Italy, other than:
| ● | to Italian qualified investors, or Qualified Investors, as defined in Article 100 of Decree no.58 by reference to Article 34-ter of CONSOB Regulation no. 11971 of 14 May 1999, or Regulation no. 1197l, as amended; and |
| ● | in other circumstances that are exempt from the rules on public offer pursuant to Article 100 of Decree No. 58 and Article 34-ter of Regulation No. 11971 as amended. |
Any offer, sale or delivery of the securities or distribution of any offer document relating to the securities in Italy (excluding placements where a Qualified Investor solicits an offer from the issuer) under the paragraphs above must be:
| ● | made by investment firms, banks or financial intermediaries permitted to conduct such activities in Italy in accordance with Legislative Decree No. 385 of 1 September 1993 (as amended), Decree No.58, CONSOB Regulation No. 16190 of 29 October 2007 and any other applicable laws; and |
| ● | in compliance with all relevant Italian securities, tax and exchange controls and any other applicable laws. |
Any subsequent distribution of the securities in Italy must be made in compliance with the public offer and prospectus requirement rules provided under Decree No. 58 and the Regulation No. 11971 as amended, unless an exception from those rules applies. Failure to comply with such rules may result in the sale of such securities being declared null and void and in the liability of the entity transferring the securities for any damage suffered by the investors.
Japan
The securities have not been and will not be registered under Article 4, paragraph 1 of the Financial Instruments and Exchange Law of Japan (Law No. 25 of 1948), as amended, or the FIEL, pursuant to an exemption from the registration requirements applicable to a private placement of securities to Qualified Institutional Investors (as defined in and in accordance with Article2, paragraph 3 of the FIEL and the regulations promulgated thereunder). Accordingly, the securities may not be offered or sold, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan other than Qualified Institutional Investors. Any Qualified Institutional Investor who acquires securities may not resell them to any person in Japan that is not a Qualified Institutional Investor, and acquisition by any such person of securities is conditional upon the execution of an agreement to that effect.
Portugal
This document is not being distributed in the context of a public offer of financial securities (oferta pública de valores mobiliários) in Portugal, within the meaning of Article 109 of the Portuguese Securities Code (Código dos Valores Mobiliários). The securities have not been offered or sold and will not be offered or sold, directly or indirectly, to the public in Portugal. This document and any other offering material relating to the securities have not been, and will not be, submitted to the Portuguese Securities Market Commission (Comissăo do Mercado de Valores Mobiliários) for approval in Portugal and, accordingly, may not be distributed or caused to distributed, directly or indirectly, to the public in Portugal, other than under circumstances that are deemed not to qualify as a public offer under the Portuguese Securities Code. Such offers, sales and distributions of securities in Portugal are limited to persons who are “qualified investors” (as defined in the Portuguese Securities Code). Only such investors may receive this document and they may not distribute it or the information contained in it to any other person.
106
Sweden
This document has not been, and will not be, registered with or approved by Finansinspektionen (the Swedish Financial Supervisory Authority). Accordingly, this document may not be made available, nor may the securities be offered for sale in Sweden, other than under circumstances that are deemed not to require a prospectus under the Swedish Financial Instruments Trading Act (1991:980) (Sw. lag (1991:980) om handel med finansiella instrument). Any offering of securities in Sweden is limited to persons who are “qualified investors” (as defined in the Financial Instruments Trading Act). Only such investors may receive this document and they may not distribute it or the information contained in it to any other person.
Switzerland
The securities may not be publicly offered in Switzerland and will not be listed on the SIX Swiss Exchange, or SIX, or on any other stock exchange or regulated trading facility in Switzerland. This document has been prepared without regard to the disclosure standards for issuance prospectuses under art. 652a or art. 1156 of the Swiss Code of Obligations or the disclosure standards for listing prospectuses under art. 27 ff. of the SIX Listing Rules or the listing rules of any other stock exchange or regulated trading facility in Switzerland. Neither this document nor any other offering material relating to the securities may be publicly distributed or otherwise made publicly available in Switzerland.
Neither this document nor any other offering material relating to the securities have been or will be filed with or approved by any Swiss regulatory authority. In particular, this document will not be filed with, and the offer of securities will not be supervised by, the Swiss Financial Market Supervisory Authority.
This document is personal to the recipient only and not for general circulation in Switzerland.
United Arab Emirates
Neither this document nor the securities have been approved, disapproved or passed on in any way by the Central Bank of the United Arab Emirates or any other governmental authority in the United Arab Emirates, nor have we received authorization or licensing from the Central Bank of the United Arab Emirates or any other governmental authority in the United Arab Emirates to market or sell the securities within the United Arab Emirates. This document does not constitute and may not be used for the purpose of an offer or invitation. No services relating to the securities, including the receipt of applications and/or the allotment or redemption of such shares, may be rendered within the United Arab Emirates by us.
No offer or invitation to subscribe for securities is valid or permitted in the Dubai International Financial Centre.
Canada
The securities may be sold in Canada only to purchasers, purchasing, or deemed to be purchasing, as principal, that are accredited investors, as defined in National Instrument 45-106 Prospectus Exemptions or subsection 73.3(1) of the Securities Act (Ontario). Any resale of the securities must be made in accordance with an exemption from, or in a transaction not subject to, the prospectus requirements of applicable Canadian securities laws. Canadian purchasers should refer to any applicable provisions of the securities legislation of their province or territory for particulars of these rights or consult with a legal advisor.
107
EXPENSES RELATED TO THIS OFFERING
Set forth below is an itemization of our total expenses, excluding underwriting discounts and commissions, which are expected to be incurred in connection with the offer and sale of the Class A Ordinary Shares by us. Except for the SEC registration fee, the FINRA filing fee and the Nasdaq Capital Markets listing fee, all amounts are estimates.
| Amount | ||||
| SEC registration fee | $ | 874 | ||
| FINRA filing fee | 650 | |||
| Nasdaq listing fee | 50,000 | |||
| Accounting fees and expenses | 487,500 | |||
| Legal fees and expenses | 350,000 | |||
| Transfer agent fees and expenses | 950 | |||
| Printing fees and expenses | 8,674 | |||
| Miscellaneous | 1,352 | |||
| TOTAL | $ | 900,000 | ||
108
Certain legal matters as to the United States federal and New York law in connection with this offering will be passed upon for us by Bevilacqua PLLC. The underwriters are being represented by Ellenoff Grossman & Schole LLP with respect to certain legal matters as to U.S. federal securities and New York State law. The validity of the Class A Ordinary Shares offered in this offering and certain other legal matters as to BVI law will be passed upon for us by Conyers Dill & Pearman. Bevilacqua PLLC may rely upon Conyers Dill & Pearman with respect to matters governed by BVI law. Certain legal matters as to the Singapore law in connection with this offering will be passed upon for us by ReThink Legal.
Our consolidated financial statements as of December 31, 2023 and 2022 and for the years then ended included in this prospectus have been audited by Kreit & Chiu CPA LLP, an independent registered public accounting firm, as stated in their report appearing herein. Such financial statements are included in reliance upon the report of such firm given upon their authority as experts in accounting and auditing.
The office of Kreit & Chiu CPA LLP is located at 733 Third Avenue, Floor 16, #1014, New York, NY 10017, the United States.
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the SEC a registration statement on Form F-1, including relevant exhibits and schedules, under the Securities Act with respect to the Class A Ordinary Shares to be sold in this offering. This prospectus, which constitutes a part of the registration statement, does not contain all of the information contained in the registration statement. You should read the registration statement on Form F-1 and its exhibits and schedules for further information with respect to us and the Class A Ordinary Shares.
Immediately upon completion of this offering, we will become subject to periodic reporting and other informational requirements of the Exchange Act as applicable to foreign private issuers. Accordingly, we will be required to file reports, including annual reports on Form 20-F, and other information with the SEC. The SEC maintains a website that contains reports, proxy and information statements and other information regarding registrants that file electronically with the SEC. The address of the website is www.sec.gov. Additionally, we will make these filings available, free of charge, on our website at https:// www.concordesecurity.com as soon as reasonably practicable after we electronically file such materials with, or furnish them to, the SEC. The information on our website, other than these filings, is not, and should not be, considered part of this prospectus and is not incorporated by reference into this document.
As a foreign private issuer, we are exempt from the rules of the Exchange Act prescribing the furnishing and content of proxy statements to shareholders, and our executive officers, directors and principal shareholders are exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act. In addition, we will not be required under the Exchange Act to file periodic reports and financial statements with the SEC as frequently or as promptly as U.S. companies whose securities are registered under the Exchange Act.
109
Concorde International Group Ltd
CONSOLIDATED FINANCIAL STATEMENTS
For the Year Ended December 31, 2023 and 2022
(Expressed in US Dollars)
CONSOLIDATED FINANCIAL STATEMENTS
| Page | ||
| Consolidated Financial Statements as of and for the Year Ended December 31, 2023 and 2022 | ||
| Independent Auditor’s Report (PCAOB ID: 6651) | F-2 | |
| Consolidated Statement of Financial Position as of December 31, 2023 and 2022 | F-3 | |
| Consolidated Statement of Profit or Loss and other Comprehensive Income for the Year Ended December 31, 2023 and 2022 | F-4 | |
| Consolidated Statement of Changes in Equity for the Year Ended December 31, 2023 and 2022 | F-5 | |
| Consolidated Statement of Cash Flows for the Year Ended December 31, 2023 and 2022 | F-6 | |
| Notes to the Consolidated Financial Statements | F-7 |
F-1
Report of Independent Registered Public Accounting Firm
Board of Directors and Shareholders
Concorde International Group Ltd.
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated statements of financial position of Concorde International Group Ltd. (the “Company”) as of December 31, 2023, and 2022, and the related consolidated statements of profit or loss and other comprehensive income, changes in equity, and cash flows for the years then ended, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for the years then ended, in conformity with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).
Basis for Opinion
These consolidated financial statements are the responsibility of the entity’s management. Our responsibility is to express an opinion on the entity’s consolidated financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion.
/s/ Kreit and Chiu CPA LLP
We have served as the Company’s auditor since 2023.
New York, NY
June 26, 2024
F-2
CONCORDE INTERNATIONAL GROUP LTD.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
AS AT DECEMBER 31, 2023 AND 2022
| 2023 | 2022 | |||||||||
| Note | USD | USD | ||||||||
| Assets | ||||||||||
| Non-current assets: | ||||||||||
| Property and equipment, net | 5 | 2,904,413 | 2,871,231 | |||||||
| Right-of-use asset, net | 6 | 177,429 | 29,123 | |||||||
| Intangible assets, net | 7 | 65,396 | 152,025 | |||||||
| Deferred offering cost | 116,022 | — | ||||||||
| Total non-current assets | 3,263,260 | 3,052,379 | ||||||||
| Current assets: | ||||||||||
| Trade and other receivables | 8 | 3,485,364 | 2,604,145 | |||||||
| Amount due from related parties | 8 | 844,982 | 1,005,390 | |||||||
| Cash and cash equivalents | 9 | 956,975 | 441,278 | |||||||
| Total current assets | 5,287,321 | 4,050,813 | ||||||||
| Total assets | 8,550,581 | 7,103,192 | ||||||||
| Equity and liabilities | ||||||||||
| Equity | ||||||||||
| Share capital | 13 | 1 | 1 | |||||||
| Merger reserves | 2,336,848 | 2,336,848 | ||||||||
| Other reserves | 50,739 | (47,320 | ) | |||||||
| Accumulated deficit | 177,649 | (783,037 | ) | |||||||
| Equity attributable to equity holders of the parent company | 2,565,237 | 1,506,492 | ||||||||
| Non-controlling interests | 137,339 | 103,831 | ||||||||
| Total equity | 2,702,576 | 1,610,323 | ||||||||
| Liabilities | ||||||||||
| Non-current liabilities: | ||||||||||
| Lease liabilities, net of current portion | 6 | 90,082 | 9,983 | |||||||
| Long-term debt | 10 | 2,109,538 | 2,423,020 | |||||||
| Deferred tax liabilities | 11 | 133,488 | — | |||||||
| Total non-current liabilities | 2,333,108 | 2,433,003 | ||||||||
| Current liabilities: | ||||||||||
| Trade and other payables | 12 | 1,186,334 | 863,637 | |||||||
| Amount due to related parties | 12 | 405,632 | 609,305 | |||||||
| Lease liabilities | 6 | 59,821 | 19,632 | |||||||
| Current maturities of long-term debt | 10 | 1,863,110 | 1,567,292 | |||||||
| Total current liabilities | 3,514,897 | 3,059,866 | ||||||||
| Total liabilities | 5,848,005 | 5,492,869 | ||||||||
| Total equity and liabilities | 8,550,581 | 7,103,192 | ||||||||
The accompanying notes are an integral part of these consolidated financial statements.
F-3
CONCORDE INTERNATIONAL GROUP LTD.
CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED DECEMBER 31, 2023 AND 2022
| 2023 | 2022 | |||||||||
| Note | USD | USD | ||||||||
| Revenue | 15 | 10,655,993 | 5,006,345 | |||||||
| Cost of revenue (exclusive of depreciation and amortization shown separately below) | (7,662,024 | ) | (3,648,637 | ) | ||||||
| 2,993,969 | 1,357,708 | |||||||||
| Other income | 19 | 236,911 | 205,201 | |||||||
| Depreciation and amortization expenses | (329,836 | ) | (389,449 | ) | ||||||
| Employee benefit expenses | 17 | (1,311,345 | ) | (912,772 | ) | |||||
| Other expenses | 18 | (314,639 | ) | (989,635 | ) | |||||
| Finance costs | 20 | (149,626 | ) | (75,033 | ) | |||||
| Profit/(Loss) before tax | 1,125,434 | (803,980 | ) | |||||||
| Income tax expense | 16 | (131,240 | ) | — | ||||||
| Profit/(Loss) for the year | 994,194 | (803,980 | ) | |||||||
| Other comprehensive income | ||||||||||
| Other comprehensive income that may be reclassified to profit or loss in subsequent periods (net of tax): | ||||||||||
| Foreign currency translation | 26,610 | 46,459 | ||||||||
| Total comprehensive profit/(loss) for the year, net of tax | 1,020,804 | (757,521 | ) | |||||||
| Profit/(Loss) for the year attributable to: | ||||||||||
| Equity holders of the parent company | 960,686 | (783,037 | ) | |||||||
| Non-controlling interests | 33,508 | (20,943 | ) | |||||||
| 994,194 | (803,980 | ) | ||||||||
| Total comprehensive profit/(loss) for the year attributable to: | ||||||||||
| Equity holders of the parent company | 987,296 | (736,578 | ) | |||||||
| Non-controlling interests | 33,508 | (20,943 | ) | |||||||
| 1,020,804 | (757,521 | ) | ||||||||
| Earnings/(loss) per share | ||||||||||
| Basic | 14 | 9.61 | (7.83 | ) | ||||||
| Diluted | 14 | 9.61 | (7.83 | ) | ||||||
The accompanying notes are an integral part of these consolidated financial statements.
F-4
CONCORDE INTERNATIONAL GROUP LTD.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
FOR THE YEAR ENDED DECEMBER 31, 2023 AND 2022
| Share capital | Merger reserve | Other reserve | Foreign currency translation reserve | Accumulated deficit | Equity attributable to owners of the parent | Non- controlling interests | Total equity | |||||||||||||||||||||||||
| USD | USD | USD | USD | USD | USD | USD | USD | |||||||||||||||||||||||||
| Balance as at January 1, 2022 | — | 2,336,848 | — | (5,035 | ) | — | 2,331,813 | 124,774 | 2,456,587 | |||||||||||||||||||||||
| Loss for the year | — | — | — | — | (783,037 | ) | (783,037 | ) | (20,943 | ) | (803,980 | ) | ||||||||||||||||||||
| Other comprehensive income | — | — | — | 46,459 | — | 46,459 | — | 46,459 | ||||||||||||||||||||||||
| Total comprehensive loss | — | — | — | 41,424 | (783,037 | ) | (736,578 | ) | (20,943 | ) | (757,521 | ) | ||||||||||||||||||||
| Transactions with equity holders: | ||||||||||||||||||||||||||||||||
| Capital distribution | — | — | (88,744 | ) | — | — | (88,744 | ) | — | (88,744 | ) | |||||||||||||||||||||
| Issuance of new shares | 1 | — | — | — | — | 1 | — | 1 | ||||||||||||||||||||||||
| Balance as at December 31, 2022 | 1 | 2,336,848 | (88,744 | ) | 41,424 | (783,037 | ) | 1,506,492 | 103,831 | 1,610,323 | ||||||||||||||||||||||
| Profit for the year | — | — | — | — | 960,686 | 960,686 | 33,508 | 994,194 | ||||||||||||||||||||||||
| Other comprehensive income | — | — | — | 26,610 | — | 26,610 | — | 26,610 | ||||||||||||||||||||||||
| Total comprehensive income | — | — | — | 26,610 | 960,686 | 987,296 | 33,508 | 1,020,804 | ||||||||||||||||||||||||
| Transactions with equity holders: | ||||||||||||||||||||||||||||||||
| Capital distribution | — | — | 71,449 | — | — | 71,449 | — | 71,449 | ||||||||||||||||||||||||
| Balance as at December 31, 2023 | 1 | 2,336,848 | (17,295 | ) | 68,034 | 177,649 | 2,565,237 | 137,339 | 2,702,576 | |||||||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
F-5
CONCORDE INTERNATIONAL GROUP LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 2023 AND 2022
| 2023 | 2022 | |||||||
| USD | USD | |||||||
| Cash flows from operating activities | ||||||||
| Profit/(Loss) before tax | 1,125,434 | (803,980 | ) | |||||
| Adjustments for: | ||||||||
| Depreciation of property and equipment | 188,969 | 292,044 | ||||||
| Depreciation of right-of-use assets | 48,134 | 18,932 | ||||||
| Amortization of intangible assets | 92,734 | 78,473 | ||||||
| Interest expense | 149,626 | 75,033 | ||||||
| Interest income | (29,853 | ) | (48,405 | ) | ||||
| Write off amount due from related parties | — | 233,497 | ||||||
| Operating cash flows before movements in working capital | 1,575,044 | (154,406 | ) | |||||
| Change in working capital: | ||||||||
| Decrease/(increase) in trade and other receivables | (930,482 | ) | (1,537,479 | ) | ||||
| (Decrease)/increase in trade and other payables | 190,338 | 661,281 | ||||||
| (Decrease)/increase in amount due to related parties | (43,956 | ) | 99,576 | |||||
| Cash generated by operations | (790,944 | ) | (931,028 | ) | ||||
| Income taxes paid | — | — | ||||||
| Net cash from/(used in) operating activities | 790,944 | (931,028 | ) | |||||
| Cash flows from investing activities | ||||||||
| Purchase of property and equipment | (407,203 | ) | — | |||||
| Proceeds from disposal of property and equipment | 30,942 | — | ||||||
| Acquired intangible asset | (4,819 | ) | — | |||||
| Loan repaid/(to) related parties | 71,449 | (912,089 | ) | |||||
| Net cash used in investing activities | (309,631 | ) | (912,089 | ) | ||||
| Cash flows from financing activities | ||||||||
| Proceeds from borrowings | 2,036,696 | 1,116,450 | ||||||
| Repayment of borrowings | (1,984,699 | ) | (493,431 | ) | ||||
| Repayment of lease liabilities | (51,050 | ) | (20,096 | ) | ||||
| Net cash from financing activities | 947 | 602,923 | ||||||
| Net increase/(decrease) in cash and cash equivalents | 482,260 | (1,240,194 | ) | |||||
| Cash and cash equivalents at beginning of year | 441,278 | 1,606,611 | ||||||
| Effect of foreign exchange rate changes on cash and cash equivalents | 33,437 | 74,861 | ||||||
| Cash and cash equivalents at December 31, 2023 | 956,975 | 441,278 | ||||||
The accompanying notes are an integral part of these consolidated financial statements.
F-6
CONCORDE INTERNATIONAL GROUP LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
| 1. | General |
Concorde International Group Ltd (“Company” or “Concorde”), was incorporated in the British Virgin Islands on May 2, 2023. The Company’s registered office is at Conyers Trust Company (BVI) Limited of Commerce House, Wickhams Cay 1, PO Box 3140, Road Town, Tortola, British Virgin Islands VG1110. The Company’s agent for service of process in the United States is Cogency Global Inc., located at 122 East 42nd Street, 18th Floor, New York, NY 10168.
Concorde International Group Ltd (“CIGL”), was incorporated in 2023 to acquire via Concorde International Group Pte Ltd (Singapore) the following companies, Concorde Security Pte Ltd (Singapore), Concorde Security Sdn Bhd (Malaysia), Concorde Security Limited (UK), Concorde Asia Pte Ltd (Singapore) and Berjaya Academy Pte Ltd (Singapore).
Concorde International Group Pte Ltd (Singapore) (“CGPL”) was incorporated on June 12, 2023. On July 10, 2023, 1 share was transferred from Chua Swee Kheng to Concorde International Group Ltd at 1 Singapore dollar. It is a holding company and a 100% owned subsidiary of Concorde International. Its registered office is at 3 Ang Mo Kio Street 62, #01-49 LINK@AMK, Singapore 569139.
Concorde Security Pte Ltd (Singapore) (“CSPL”) was incorporated on June 16, 2005, 96.81% of shares of Concorde Security Pte Ltd (Singapore) are owned by Concorde International Group Pte Ltd (Singapore).
On January 1, 2019, Lek Seck Tin (“Lek Family”) invested US$1,000,000 in exchange for an equity stake of 1.48% of Concorde Security Pte Ltd (Singapore).
On November 27, 2018, Wolfgang Steuerle and Yogeshwari A/P Subramaniam (“Wolfgang”) invested US$500,000 in exchange for an equity stake of 0.74% of Concorde Security Pte Ltd (Singapore).
On July 29, 2005, Sharifah Noriati Binte Said Omar (“Sharifah”) was allocated 0.97% of Concorde Security Pte Ltd (Singapore) in lieu of services provided.
Concorde Security Sdn Bhd (Malaysia)(“CSSB”) was incorporated in Malaysia on January 13, 2015. On October 27, 2023, 100 shares was transferred from Chua Swee Kheng to Concorde International Group Pte Ltd (Singapore) at 100 Malaysian Ringgit. Concorde Security Sdn Bhd (Malaysia) is currently at a development stage. Concorde Security Sdn Bhd (Malaysia) is 100% owned subsidiary of Concorde International Group Pte Ltd (Singapore).
Concorde Security Limited (UK) (“CSL”) was incorporated in the United Kingdom on December 23, 2016. On July 31, 2023, 100 shares was transferred from Concorde Group Pte Ltd to Concorde International Group Pte Ltd (Singapore) at 0.77 Euro. Concorde Security Limited (UK) is currently in a development stage. Concorde Security Limited (UK) is 100% owned subsidiary of Concorde International Group Pte Ltd (Singapore).
Concorde Asia Pte Ltd (“CAPL”) was incorporated in Singapore on October 8, 2013. On November 1, 2023, 200,000 shares were transferred from Chua Swee Kheng to Concorde International Group Pte Ltd (Singapore) at $1 Singapore Dollar. On November 23, 2023, 60,000 (30%) shares were transferred from Concorde International Group Pte Ltd (Singapore) to Weilekai Investment Pte Ltd at $1 Singapore Dollar. The Shareholders of Weilekai Investment Pte Ltd are Chua Swee Kheng and Lim Ping Ping (Spouse of Chua Swee Kheng). Concorde Asia Pte Ltd is a 70% owned subsidiary of Concorde International Group Pte Ltd (Singapore).
Berjaya Academy Pte Ltd (Singapore) (“BAPL”) was incorporated on March 6, 2020. On November 1, 2023, 100,000 shares were transferred from Sharifah Noriati Binte Said Omar to Concorde International Group Pte Ltd (Singapore) at $1 Singapore Dollar. The shares were held by Sharifah Noriati Binte Said Omar in representative capacity of Chua Swee Kheng. On November 8, 2023, 30,000 (30%) shares were transferred from Concorde International Group Pte Ltd (Singapore) to Weilekai Investment Pte Ltd at $1 Singapore Dollar. The Shareholders of Weilekai Investment Pte Ltd are Chua Swee Kheng and Lim Ping Ping (Spouse of Chua Swee Kheng). Berjaya Academy Pte Ltd (Singapore) is a 70% owned subsidiary of Concorde International Group Pte Ltd (Singapore).
F-7
CONCORDE INTERNATIONAL GROUP LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
| 1. | General (cont.) |
Concorde i-FAST USA Inc.(Texas), (“CiF”) was incorporated in the State of Texas on April 25, 2024. Concorde International Group Pte Ltd (Singapore) holds 100 shares at US$0.01. Concorde i-FAST USA Inc. (Texas) is a 100% owned subsidiary of Concorde International Group Pte Ltd (Singapore).
The reorganization of Concorde International Group Ltd, and its subsidiaries (collectively referred to as the “Company) was completed in November 2023. Pursuant to the reorganization, Concorde International Group Ltd, became the holding company of the companies which were under the common control of the controlling shareholder before and after the reorganization. Accordingly, the Company’s financial statements have been prepared on a consolidated basis by applying the book value method, it is as if the reorganization had been completed at the beginning of the earliest reporting period.
The Company engages principally in providing man guarding and i-Guarding services including project installation and maintenance work located in Singapore.
i-Guarding services is a technology-integrated security service implementing and utilizing technologies such as I-Facility Sprinter (“IFS”), Visitor Management Systems (VMS), Keys Management Systems (KMS), Intelligent Facility Authenticators (IFA), security turnstile facilities, Internet of Things (IoT) devices, and other smart security solutions. Man-Guarding is the provision of traditional manpower to man-operate at the customer’s site.
These consolidated financial statements are presented in United States Dollars (“USD”) and have been rounded to the nearest USD.
| 2. | Adoption of new and revised Standards |
New and amended IFRS Accounting Standards that are effective for the current year
The following standards and amendments have been adopted by the Group for the first time for the financial year beginning on January 1, 2023:
| Amendments to IAS 1 Presentation of Financial Statements | Disclosure of Accounting Policies | |
| IFRS Practice Statement 2 | Disclosure of Accounting Policies | |
| Amendments to IAS 8 Accounting policies, Changes in Accounting Estimates and Errors | Definition of Accounting Estimates | |
| Amendments to IAS 12 Income Taxes | Deferred Tax related to Assets and Liabilities arising from a Single Transaction |
The adoption of these standards does not have material impact on the consolidated financial statements of the Group.
The following new standards and amendments to standards have not come into effect for the financial year beginning January 1, 2023, and have not been early adopted by the Group in preparing these consolidated financial statements. None of these new standards and amendments to standards is expected to have a material effect on the consolidated financial statements of the Group.
| Title | Effective date | |
| Amendments to IAS 1 Presentation of Financial Statements: Classification of Liabilities as Current or Non-current and Noncurrent Liabilities with Covenants | 1 January 2024 | |
| Amendments to IFRS 16 Leases: Lease Liability in a Sale and Leaseback | 1 January 2024 | |
| Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures: Supplier Finance Arrangements | 1 January 2024 | |
| Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates: Lack of Exchangeability | 1 January 2025 |
F-8
CONCORDE INTERNATIONAL GROUP LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
| 3. | Significant accounting policies |
The following is a summary of significant accounting policies used in the preparation of these consolidated financial statements.
| 3.1 | Basis of accounting |
The consolidated financial statements of Concorde have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). All amounts are presented in USD.
The accounting policies used for the preparation of these consolidated financial statements are based upon the application of IFRS 1.D17, which results in assets and liabilities being measured at the same carrying amount as in the standalone financial statements of subsidiaries for the years December 31, 2023 and 2022 after adjusting for consolidation and equity accounting adjustments and for the effects of the business combination in which the entity acquired the subsidiaries.
The consolidated statement of financial position, consolidated statement of profit or loss and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows of the Group for the relevant periods include the results and cash flows of all companies now comprising the Group from the earliest date presented as if the reorganization had been completed at the beginning of the earliest reporting period.
| 3.2 | Going concern |
Pursuant to IAS 1, Presentation of Financial Statements, the Company is required to and does evaluate at each annual and interim period whether there are conditions or events, considered in the aggregate, that raise substantial doubt about its ability to continue as a going concern within one year after the date that the consolidated financial statements are issued.
As of December 31, 2023, our consolidated financial statements were prepared on the assumption that we would continue as a going concern. The Company’s ability to continue as a going concern is dependent upon the Company’s profit generating operations in the future and/or obtaining the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they become due. In assessing the going concern, management and the Board has considered:
| a. | The improved cash flows including liquidity and borrowings from future fund-raising activities. In the financial year 2023, the Company had a positive cash flow of $482,259, an improvement from a negative cash flow of $1,240,194 in the financial year 2022. As a result, the company’s cash and cash equivalents as of December 31, 2023, amounted to $956,975, an increase from $441,278 in the previous financial year The Company’s principal uses of cash have been, and management expects will continue to be, for working capital to support a reasonable increase in our scale of operations as well as for business expansion investments. |
| b. | The improved sales and profits resulted from the acquisition of new customers. Total revenue rose to $10,655,993 in the financial year 2023 from $5,006,345 in the financial year 2022. As a result, our net profit increased to $994,194 in the financial year 2023 from a net loss of $803,980 in the financial year 2022. |
The Company’s continuation as a going concern is dependent on the Company’s ability to meet obligations as they become due and to obtain additional equity or alternative financing required to fund operations until sufficient sources of recurring revenues can be generated. While there can be no assurance that the Company will be successful in its plans described above or in attracting equity or alternative financing on acceptable terms, management of the Company believes that, based on considerations of above factors and its most recent projections for year 2024, the Company can meet its working capital requirements over the next 12 months.
F-9
CONCORDE INTERNATIONAL GROUP LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
| 3. | Significant accounting policies (cont.) |
The consolidated financial statements do not include any adjustments to the carrying amounts and classification of assets, liabilities, and reported expenses that may be necessary if the Company were unable to continue as a going concern.
The directors have, at the time of approving the consolidated financial statements, a reasonable expectation that the group have adequate resources to continue in operational existence for the foreseeable future. Thus, they continue to adopt the going concern basis of accounting in preparing consolidated financial statements.
| 3.3 | Principles of consolidation |
Pursuant to the reorganization, Concorde became the holding company for the entities that were under the common control of the controlling shareholders (the “Group”) both before and after the reorganization.
Entities under common control are entities, which are ultimately controlled by the same parties and that control is not transitory. Control exists when the same parties have, as a result of contractual agreements, ultimate collective power to govern the financial and operating policies of each of the combining entities so as to obtain benefits from their activities, and that ultimate collective power is not transitory. The financial statements of commonly controlled entities are included in the consolidated financial statements from the day that control commences until the date that control ceases.
Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the Group controls an investee if and only if the Group has:
| (a) | Power over the investee; |
| (b) | Exposure, or rights, to variable returns from its involvement with the investee; and |
| (c) | The ability to use its power over the investee to affect its returns. |
If the Group has less than a majority of the voting of similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including:
| (a) | The contractual arrangement with the other vote holders of the investee; |
| (b) | Rights arising from other contractual agreements; and |
| (c) | The voting rights of the Group and potential voting rights |
IFRS 3 Business combinations do not include specific measurement guidance for transfers of businesses or subsidiaries between entities under common control. Accordingly, the Group has accounted for such transactions taking into consideration other guidance in the IFRS framework and pronouncements of US Financial Accounting Standards Board and US Securities and Exchange Commission regulations.
Accordingly, the Group’s financial statements have been prepared on a consolidated basis by applying the Book Value method as if the reorganization had been completed at the beginning of the earliest reporting period.
The Group recorded assets and liabilities recognized as a result of transactions between entities under common control at the carrying value on the transferee’s standalone financial statements, and to have the consolidated statement of financial position, consolidated statement of profit or loss, and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows that reflect the results of combining entities for all periods presented for which the entities were under the transferor’s common control, irrespective of when the combination takes place.
Any difference between the consideration paid and the share capital and capital reserves of the “acquired” entity is reflected within equity as merger reserve. The statement of profit or loss and other comprehensive income reflects the results of the entities for the full year, irrespective of when the combination takes place. Comparatives are presented as if the entities had always been combined since the date the entities had come under common control.
F-10
CONCORDE INTERNATIONAL GROUP LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
| 3. | Significant accounting policies (cont.) |
Intercompany balances, transactions, income and expenses are eliminated in the consolidated financial statements.
Acquisition-related costs are recognized as expenses in the periods in which the costs are incurred, and the services are received.
Non-controlling interests, if any, represent equity in subsidiaries that are not attributable, directly or indirectly, to owners of the parent, and is presented separately in the consolidated statement of profit or loss and other comprehensive income and within equity in the consolidated statement of financial position, separately from equity attributable to owners of the Company. Profit or loss and each component of other comprehensive income are attributed to the owners of the parent and to the non-controlling interests. Total comprehensive income is attributed to non-controlling interests even if this results in the non-controlling interests having a deficit balance.
The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Subsidiaries are consolidated from the date on which control is transferred to the Group up to the effective date on which control ceases, as appropriate. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the financial year/ period are included in the statement of profit or loss and other comprehensive income from the date the Group gains control until the date the Group ceases to control the subsidiary.
Transaction under common control entities
Under common control entities represent those entities are controlled by Swee Kheng Chua and Ping Ping Lim. The Group determines the allowance for its receivable from controlling shareholders based on historical collection experience and economic conditions. The Company writes-off receivable when amounts are deemed uncollectible. The writes-off amounts are recognized in other reserve.
| Name of subsidiaries | Date of incorporation |
Principal activities |
Relationship with the Group | |||
| Concorde International Group Pte Ltd | June 12, 2023 | Holding company | 100% own subsidiary | |||
| Concorde i-FAST USA Inc. | April 25, 2024 | Security solution services | 100% own subsidiary | |||
| Concorde Security Pte Ltd | June 16, 2005 | Security solution services | 96.81% own subsidiary | |||
| Concorde Security Sdn Bhd | January 13, 2015 | Security solution services | 100% own subsidiary | |||
| Concorde Security Limited | December 23, 2016 | Security solution services | 100% own subsidiary | |||
| Concorde Asia Pte Ltd | October 08, 2013 | Security solution services | 100% own subsidiary (directly or indirectly) | |||
| Berjaya Academy Pte Ltd | March 06, 2020 | Consultancy and training course services | 100% own subsidiary (directly or indirectly) |
| 3.4 | Revenue recognition |
Revenue is measured based on the consideration to which the Company expects to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties.
The Group recognizes revenue from contracts with customers for the sale of goods based on the five-step model as set out below:
| (i) | Identify contract(s) with a customer. A contract is defined as an agreement between two or more parties that creates enforceable rights and obligations and sets out the criteria that must be met. |
| (ii) | Identify performance obligations in the contract. A performance obligation is a promise in a contract with a customer to transfer a good or service to the customer. |
F-11
CONCORDE INTERNATIONAL GROUP LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
| 3. | Significant accounting policies (cont.) |
| (iii) | Determine the transaction price. The transaction price is the amount of consideration to which the Group expects to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties. |
| (iv) | Allocate the transaction price to the performance obligations in the contract. For a contract that has more than one performance obligation, the Group allocates the transaction price to each performance obligation in an amount that depicts the amount of consideration to which the Group expects to be entitled in exchange for satisfying each performance obligation. |
| (v) | Recognize revenue when the Group satisfies a performance obligation. |
Revenue is recognized when the Company satisfies a performance obligation by transferring promised goods or services to the customer, which is when the customer obtains control of the goods or services.
A performance obligation may be satisfied at a point in time or over time.
Performance obligations satisfied over time
A performance obligation is satisfied over time when an entity transfers control of a good or service over a period. This occurs when one of three conditions is met: (a) the customer simultaneously receives and consumes the benefits provided by the entity’s performance; (b) the entity’s performance creates or enhances an asset that the customer controls during creation or enhancement; or (c) the entity’s performance does not result in an asset with an alternative use, and there exists an enforceable right to payment for the performance completed to date.
In providing round-the-clock security manning, the customer simultaneously receives and consumes the benefits of the company’s performance. Therefore, the nature of the service sales is recognized over time, on a monthly billing cycle basis.
An asset created by an entity’s performance lacks an alternative use if contractual or practical restrictions prevent the entity from redirecting it during creation or completion. This assessment is fixed at contract inception and can only be revised if a contract modification substantially alters the performance obligation with mutual agreement from the parties involved. In providing installation solely as a prerequisite to our patent-protected service at the customer’s site, the customer will not have an alternate use for such installation. Performance obligations are satisfied over time, primarily through the provision of service sales.
Right to payment for performance completed to date, an entity considers both contractual terms and applicable laws. This right does not necessarily specify a fixed amount but must ensure that the entity is compensated for work completed if the contract is terminated for reasons unrelated to the entity’s performance failure. Customers have entered into a contract with the Company that does recurring monthly billing, securing the Company’s right to payment for services rendered as they are consumed.
Performance obligations satisfied at a point in time
In cases where a performance obligation is not satisfied over time, it is fulfilled at a specific point in time. This determination relies on factors including the entity’s present right to payment, the transfer of legal title, physical possession of the asset by the customer, the transfer of significant risks and rewards of ownership, and the customer’s acceptance of the asset. Consideration of these indicators, alongside the control requirements outlined in the standard, helps determine when control of the asset is transferred, and the performance obligation is satisfied.
In the provision of installation at customer’s site amounting to creation of assets where customer has an alternative use. Such installation’s performance obligation are satisfied at the point in time.
F-12
CONCORDE INTERNATIONAL GROUP LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
| 3. | Significant accounting policies (cont.) |
The amount of revenue recognized is the amount allocated to the satisfied performance obligation under IFRS 15 Revenue from Contracts with Customers (“IFRS 15”).
Some contract(s) with customers include a variable consideration where revenue is recognized based on key performance indicators (“KPI”) assessed by the Company and the customer. Revenue is recognized on the percentage of KPI on contracted monthly fees.
| (a) | Man Guarding Services |
Revenue from a contract to provide man guarding services is recognized over time, using the output method to measure progress towards complete satisfaction of the service, as the customer simultaneously receives and consumes the benefits provided by the Company. In the applicable of the output method, the Company has used the appraisal of results achieved method. Accordingly, in view of the nature of the service income on a contract basis, management considers that this output method is most appropriate in measuring the progress towards complete satisfaction of these performance’s obligation.
| (b) | I-Guarding Services (including installation and maintenance services) |
I-Guarding Services is a comprehensive technology-integrated package of round-the-clock ongoing security monitoring and maintenance services, the service is consumed continuously and revenue is recognized over time through monthly invoicing.
The Company sells a range of products such as closed-circuit cameras, turnstiles, gates, authenticators, and cabling, and provides installation services for these products.
In the case, where the installation is part of a comprehensive package that includes monthly security monitoring and maintenance services, revenue is recognized over time as these services are consumed. This installation is a prerequisite for our comprehensive package, involving continuous service and maintenance of the installed facilities by the company. Therefore, the setup of these facilities constitutes a continuous performance obligation, inseparable from the provision of security services.
In the case, where the installation is part of a security setup without ongoing monthly security monitoring or maintenance services, revenue is recognized at a point in time upon completion of installation and acceptance by customers. This recognition occurs when control of the goods is transferred to the customers, in accordance with the agreed terms, and significant risks and rewards of ownership have been passed to them. Such service denotes a small portion of the total i-guarding services sales. The point-in-time sales are 3% (USD339,568) and 15% (USD749,021) of the total I-guarding sales in the financial year ended 2023 and 2022, respectively. These installations are standalone and capable of operating independently from our security services. Examples include installing turnstiles, modifying gates, and installing biometric locks.
| (c) | Training and consulting |
Training and consulting income is recognized at the time when such services have been performed and rendered.
| (d) | Licensing fee and vehicle rental income |
Licensing and vehicle rental income is recognized at the time when such services have been performed and rendered. This income is generated from related companies within the Group and the amount was eliminated in the consolidated financial statements.
F-13
CONCORDE INTERNATIONAL GROUP LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
| 3. | Significant accounting policies (cont.) |
| 3.5 | Cost of revenues (exclusive of depreciation and amortization shown separately) |
Cost of revenues mainly consists of service costs, sub-contracting cost, salaries, consumables and others excluding depreciation and amortization expenses which is shown separately.
| 3.6 | Government grants |
Grants from the government are recognized at their fair value where there is a reasonable assurance that the grant will be received, and the Group will comply with all attached conditions.
| 3.7 | Leases — The Group as lessee |
With reference to IFRS 16, the group assesses whether a contract is, or contains, a lease, at inception of the contract. The group recognizes a right-of-use asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee, except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low value assets (such as tablets and personal computers, small items of office furniture and telephones). For these leases, the group recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased assets are consumed.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the group uses its incremental borrowing rate.
Lease payments included in the measurement of the lease liability comprise:
| ● | Fixed lease payments (including in-substance fixed payments), less any lease incentives receivable |
| ● | Variable lease payments that depend on an index or rate, initially measured using the index or rate at the commencement date |
| ● | The amount expected to be payable by the lessee under residual value guarantees |
| ● | The exercise price of purchase options, if the lessee is reasonably certain to exercise the options |
| ● | Payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to terminate the lease |
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the lessee’s incremental borrowing rate.
The Company generally uses the incremental borrowing rate as the discount rate. To determine the incremental borrowing rate, the Company obtains a reference rate and makes certain adjustments to reflect the terms of the lease and the asset leased.
Lease payments included in the measurement of the lease liability comprise:
| ● | Fixed lease payments (including in-substance fixed payments), less any lease incentives receivable |
| ● | Variable lease payments that depend on an index or rate, initially measured using the index or rate at the commencement date |
| ● | The amount expected to be payable by the lessee under residual value guarantees |
| ● | The exercise price of purchase options, if the lessee is reasonably certain to exercise the options |
| ● | Fixed lease payments (including in-substance fixed payments), less any lease incentives receivable |
F-14
CONCORDE INTERNATIONAL GROUP LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
| 3. | Significant accounting policies (cont.) |
| ● | Variable lease payments that depend on an index or rate, initially measured using the index or rate at the commencement date |
| ● | The amount expected to be payable by the lessee under residual value guarantees |
| ● | The exercise price of purchase options, if the lessee is reasonably certain to exercise the options |
The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made.
The group remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever:
| ● | The lease term has changed or there is a significant event or change in circumstances resulting in a change in the assessment of exercise of a purchase option, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate. |
| ● | The lease payments change due to changes in an index or rate or a change in expected payment under a guaranteed residual value, in which cases the lease liability is remeasured by discounting the revised lease payments using an unchanged discount rate (unless the lease payments change is due to a change in a floating interest rate, in which case a revised discount rate is used). |
| ● | A lease contract is modified, and the lease modification is not accounted for as a separate lease, in which case the lease liability is remeasured based on the lease term of the modified lease by discounting the revised lease payments using a revised discount rate at the effective date of the modification. |
The group did not make any such adjustments during the periods presented.
The Company recognizes a right-of-use asset and lease liability at the lease commencement date for all lease arrangement for which the Company is the lessee, except for leases which have lease term of 12 months or less and leases of low value assets for which the Company applied the recognition exemption allowed under IFRS 16 Leases (“IFRS 16”). For these leases, the Company recognizes the lease payment as an operating expense on a straight-line basis over the term of the lease.
The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, less any lease incentives received, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease term. When the lease transfers ownership of the underlying asset to the Company by the end of the lease term or the cost of the right-of-use asset reflects that the Company will exercise a purchase option, the right-of-use asset will be depreciated over the useful life of the underlying asset, which is determined on the same basis as those of property and equipment. The right-of-use asset is also reduced by allowances for expected credit losses, if any, and adjusted for certain remeasurements of the lease liability, where applicable.
The group applies IAS 36 to determine whether a right-of-use asset is impaired and accounts for any identified impairment loss as described in the ‘Property and Equipment’ policy.
Where a contract contains more than one lease component, the Company allocates the consideration in the contract to each lease component on the basis of the relative standalone price of the lease component. Where the contract contains non-lease components, the Company applied the practical expedient to not to separate non-lease components from lease components, and instead account for each lease component and any associated non-lease components as a single lease component.
F-15
CONCORDE INTERNATIONAL GROUP LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
| 3. | Significant accounting policies (cont.) |
| 3.8 | Borrowing costs |
All borrowing costs are recognized in statements of profit or loss and other comprehensive income in the period in which they are incurred.
| 3.9 | Defined Contribution Plan |
Payments to defined contribution retirement plans are recognized as an expense when employees have rendered service entitling them to the contributions. Payments made to state-managed retirement plans are accounted for as payments to defined contribution plans where the group’s obligations under the plans are equivalent to those arising in a defined contribution retirement plan.
| 3.10 | Taxation |
The income tax expense represents the sum of current and deferred income tax expense.
Current tax
The tax currently payable is based on taxable profit for the year. No provision for tax is recognized during the financial year as the Group is in a tax profit position.
Deferred tax
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit and is accounted for using the liability method. Deferred tax liabilities are generally recognized for all taxable temporary differences and deferred tax assets are recognized to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilized. A deferred tax liability was recognized by the Group during the financial year 2023 as the Group’s net deferred tax stemming from business losses in previous years, may not completely offset the tax liability recognized for the year.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled, or the asset is realized based on tax laws and rates that have been enacted or substantively enacted at the reporting date.
The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the group intends to settle its current tax assets and liabilities on a net basis.
Current tax and deferred tax for the year
Current and deferred tax are recognized in profit or loss and other comprehensive income, except when they relate to items that are recognized in other comprehensive income or directly in equity, in which case the current and deferred tax are also recognized in other comprehensive income or directly in equity respectively. Where current tax or deferred tax arises from the initial accounting for a business combination, the tax effect is included in the accounting for the business combination.
Group relief in Singapore Taxation
Group Relief in Singapore taxation permits companies within the same group to consolidate their tax positions, treating them as a single entity for certain tax benefits. This includes allowing a company (the claimant) to deduct current year unutilized capital allowances, trade losses, and donations from another company in the group (the transferor). To utilize Group Relief in Singapore, the transferor and claimant companies must be Singapore incorporated, belong to the same group with at least 75% shareholding, and share the same financial year end for tax purposes. This allows for the deduction of current year unutilized capital allowances, trade losses, and donations between these entities.
F-16
CONCORDE INTERNATIONAL GROUP LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
| 3. | Significant accounting policies (cont.) |
Goods and services tax (GST)
Revenues, expenses and assets are recognized net of the amount of associated GST, unless the GST incurred is not recoverable from the taxation authority. In this case it is recognized as part of the cost of acquisition of the asset or as part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the taxation authority is included with other receivables or payables in the balance sheet.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to the taxation authority, are presented as operating cash flows.
| 3.11 | Foreign currency transactions and translation |
Foreign currency transactions are translated into the Company’s functional currency at the exchange rates prevailing on the date of the transaction. At the end of each financial year, monetary items denominated in foreign currencies are retranslated at the rate prevailing at the end of the financial year. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing on the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.
Exchange differences arising on the settlement of monetary items, and on retranslation of monetary items are included in profit or loss for the year. Exchange differences arising on the retranslation of non-monetary items carried at fair value are included in profit or loss for the year except for differences arising on retranslation of non-monetary items, any exchange component of that gain or loss is also recognized directly in other comprehensive income.
| 3.12 | Property and equipment |
All items of property and equipment are initially measured at cost. Cost includes expenditure that is directly attributable to the acquisition of the asset in accordance to IAS 16 Property and Equipment.
After initial recognition, property and equipment are stated at cost less accumulated depreciation and accumulated allowances for expected credit losses, if any
Depreciation is recognized so as to write off the cost less their residual values over their useful lives, using the straight-line method, on the following bases:
| Estimated useful life | ||
| Furniture and Fittings | 3 years | |
| Office equipment | 3 years | |
| Building | 50 years | |
| Motor Vehicles | 5 years | |
| Security Equipment | 3 – 7 years | |
| Renovation | 3 – 7 years |
F-17
CONCORDE INTERNATIONAL GROUP LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
| 3. | Significant accounting policies (cont.) |
The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.
An item of property and equipment is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sales proceeds and the carrying
| 3.13 | Intangible assets |
| 3.13.1 | Internally generated intangible assets |
In accordance to IAS 38 Intangible assets, expenditure on research activities is recognized as an expense in the period in which it is incurred. An internally-generated intangible asset arising from development (or from the development phase of an internal project) is recognized if, and only if, all of the following conditions have been demonstrated:
| ● | The technical feasibility of completing the intangible asset so that it will be available for use or sale |
| ● | The intention to complete the intangible asset and use or sell it |
| ● | The ability to use or sell the intangible asset |
| ● | How the intangible asset will generate probable future economic benefits |
| ● | The availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset |
| ● | The ability to measure reliably the expenditure attributable to the intangible asset during its development |
| ● | amount of the asset and is recognized in statement of profit or loss and other comprehensive income. |
| (a) | Research and development |
Expenditure on research activities is recognized as an expense in the period in which it is incurred. Where no internally generated intangible asset can be recognized, development expenditure is charged to profit or loss and other comprehensive income in the period in which it is incurred. Subsequent to initial recognition, internally generated intangible assets are reported at cost less accumulated amortization and accumulated impairment loss, on the same basis as intangible assets acquired separately. These costs are amortized to profit or loss and other comprehensive income over their estimated use of lives of 3 years.
| (b) | Patent and trademarks |
Patents and trademarks are measured initially at purchase cost and are amortized on a straight-line basis over their useful lives.
F-18
CONCORDE INTERNATIONAL GROUP LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
| 3. | Significant accounting policies (cont.) |
| 3.13.2 | Intangible assets acquired separately |
Intangible assets with finite useful lives that are acquired separately are carried at cost less accumulated amortization. Amortization is recognized on a straight-line basis over 3 years period which are disclosed in note 7.
| (a) | Software |
Software are measured initially at purchase cost and are amortized on a straight-line basis over a 3 year period.
Amortization is recognized on a straight-line basis over their estimated useful lives which are disclosed as follows:
| Intangible asset | Useful lives | |
| Patent | 20 years | |
| Trademark | 10 years | |
| Research and development | 3 years | |
| Software | 3 years |
The estimated useful life and amortization method are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis.
An intangible asset is derecognized on disposal, or when no future economic benefits are expected from use or disposal. Gains or losses arising from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset, are recognized in profit or loss and other comprehensive income when the asset is derecognized.
| 3.14 | Impairment of property and equipment and intangible assets |
With reference to IAS 36, at each reporting date, the group reviews the carrying amounts of its property and equipment and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated to determine the extent of the impairment loss (if any). Where the asset does not generate cash flows that are independent from other assets, the group estimates the recoverable amount of the cash-generating unit to which the asset belongs. When a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.
Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognized immediately in profit or loss and other comprehensive income, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease and to the extent that the impairment loss is greater than the related revaluation surplus, the excess impairment loss is recognized in profit or loss and other comprehensive income.
Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognized immediately in profit or loss and other comprehensive income to the extent that it eliminates the impairment loss which has been recognized for the asset in prior years. Any increase in excess of this amount is treated as a revaluation increase.
F-19
CONCORDE INTERNATIONAL GROUP LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
| 3. | Significant accounting policies (cont.) |
| 3.15 | Cash and cash equivalents |
In the consolidated statement of financial position, cash and bank balances comprise cash and cash equivalents. Cash equivalents are short-term (generally with original maturity of three months or less), highly liquid investments that are readily convertible to a known amount of cash and which are subject to an insignificant risk of changes in value. Cash equivalents are held for the purpose of meeting short-term cash commitments rather than for investment or other purposes.
Bank balances for which use by the group is subject to third party contractual restrictions are included as part of cash unless the restrictions result in a bank balance no longer meeting the definition of cash.
For the purposes of the statement of cash flows, cash and cash equivalents consist of cash and cash equivalents as defined above.
| 3.16 | Financial instruments |
Financial assets and financial liabilities are recognized in the group’s consolidated statement of financial position when the group becomes a party to the contractual provisions of the instrument.
Financial assets and financial liabilities are initially measured at fair value, except for trade receivables that do not have a significant financing component which are measured at transaction price. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in profit or loss and other comprehensive income.
Financial assets
All regular way purchases or sales of financial assets are recognized and derecognized on a trade date basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the marketplace.
All recognized financial assets are measured subsequently in their entirety at either amortized cost or fair value, depending on the classification of the financial assets.
Classification of financial assets
Debt instruments that meet the following conditions are measured subsequently at amortized cost:
| ● | The financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows. |
| ● | The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. |
F-20
CONCORDE INTERNATIONAL GROUP LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
| 3. | Significant accounting policies (cont.) |
Foreign exchange gains and losses
The carrying amount of financial assets that are denominated in a foreign currency is determined in that foreign currency and translated at the spot rate at the end of each reporting period. The exchange differences are recognized in the statement of profit or loss and other comprehensive income.
Impairment of financial assets
The group recognizes a loss allowance for expected credit losses on investments in debt instruments that are measured at amortized cost. The amount of expected credit losses is updated at each reporting date to reflect changes in credit risk since initial recognition of the respective financial instrument.
The group always recognizes lifetime expected credit losses (ECL) for trade and other receivables. The expected credit losses on these financial assets are estimated using a provision matrix based on the group’s historical credit loss experience, adjusted for factors that are specific to the debtors, general economic conditions, and an assessment of both the current as well as the forecast direction of conditions at the reporting date, including time value of money where appropriate.
For all other financial instruments, the group recognizes lifetime ECL when there has been a significant increase in credit risk since initial recognition. However, if the credit risk on the financial instrument has not increased significantly since initial recognition, the group measures the loss allowance for that financial instrument at an amount equal to 12-month ECL. Lifetime ECL represents the expected credit losses that will result from all possible default events over the expected life of a financial instrument. In contrast, 12-month ECL represents the portion of lifetime ECL that is expected to result from default events on a financial instrument that are possible within 12 months after the reporting date.
Derecognition of financial assets
The group derecognizes a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the group neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the group recognizes its retained interest in the asset and an associated liability for amounts it may have to pay. If the group retains substantially all the risks and rewards of ownership of a transferred financial asset, the group continues to recognize the financial asset and also recognizes a collateralized borrowing for the proceeds received.
On derecognition of a financial asset measured at amortized cost, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognized in profit or loss.
Financial liabilities and equity
Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.
Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the group are recognized at the proceeds received, net of direct issue costs.
F-21
CONCORDE INTERNATIONAL GROUP LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
| 3. | Significant accounting policies (cont.) |
Financial liabilities
All financial liabilities are measured subsequently at amortized cost using the effective interest method.
Financial liabilities that are not (i) contingent consideration of an acquirer in a business combination, (ii) held-for trading, or (iii) designated as at FVTPL, are measured subsequently at amortized cost using the effective interest method.
The effective interest method is a method of calculating the amortized cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial liability, or (where appropriate) a shorter period, to the amortized cost of a financial liability.
Derecognition of financial liabilities
The group derecognizes financial liabilities when, and only when, the group’s obligations are discharged, cancelled or have expired. The difference between the carrying amount of the financial liability recognized and the consideration paid and payable is recognized in profit or loss.
| 3.18 | Provisions and contingent liabilities |
With reference to IAS 37, provisions are recognized when the group has a present obligation (legal or constructive) as a result of a past event, it is probable that the group will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.
The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the reporting date, taking into account the risks and uncertainties surrounding the obligation.
A contingent liability is a possible obligation that arises from past events whose existence would be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Group or a present obligation that is not recognized because it is not probable that an outflow of resources would be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. The Group does not recognize a contingent liability but discloses its existence in the consolidated financial statements (Refer Note 21 to the consolidated financial statements).
| 3.19 | Earnings/(Loss) per share |
Basic earnings/(loss) per share
Basic earnings/(loss) per share is calculated by dividing the profit/(loss) attributable to the controlling interest, excluding any costs of servicing equity other than common shares, by the weighted average number of common shares outstanding during the year, adjusted for bonus elements in common shares issued during the year.
Diluted earnings/(loss) per share
Diluted earnings/(loss) per share adjusts the figures used in the determination of basic earnings/(loss) per share to take into account the after-tax effect of interest and other financing costs associated with dilutive potential common shares and the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential common shares.
F-22
CONCORDE INTERNATIONAL GROUP LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
| 3. | Significant accounting policies (cont.) |
| 3.20 | Foreign currency translation |
The reporting currency of the Company is the U.S. dollar (“USD”). The functional currency of CGPL, CSPL, BAPL and CAPL is the SGD. The functional currency of CIGL is the U.S. dollar(“USD). The functional currency of CSSB is Malaysia Ringgit(“MYR”). The functional currency of CSL is Great Britain Pound(“GBP”).
For the subsidiaries whose functional currency is the MYR and GBP dollar, profit or loss and other comprehensive income and cash flows are translated at the average exchange rates during the reporting periods, assets and liabilities are translated at the unified exchange rate at the end of the period, and equity is translated at historical exchange rates. As a result, amounts relating to assets and liabilities reported on the statements of cash flows may not necessarily agree with the changes in the corresponding balances on the statements of financial position. Translation adjustments resulting from the process of translating the local currency financial statements into USD are included in comprehensive income/loss. Transactions denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing on the transaction dates. Assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing at the consolidated statement of financial position’s date with any transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in profit or loss as incurred.
| 3.21 | Deferred offering costs |
Deferred Offering Costs consists of legal, accounting, underwriter’s fees, and other costs incurred through the balance date that are directly related to the proposed Initial Public Offering (IPO) and that would be charged to stockholder equity upon completion of the proposed IPO. Should the proposed IPO prove unsuccessful, deferred costs and additional expenses to be incurred would be charged to the statement of profit or loss.
| 3.22 | Reportable segments |
The accounting standard IFRS 8 requires the Company to report financial and descriptive information about its reportable segments. Reportable segments are operating segments or aggregations of operating segments that meet specified criteria:
| a) | its reported revenue, from both external customers and intersegment sales or transfers, is 10 per cent or more of the combined revenue, internal and external, of all operating segments, |
| b) | or the absolute measure of its reported profit or loss is 10 per cent or more of the greater, in absolute amount, of (i) the combined reported profit of all operating segments that did not report a loss and (ii) the combined reported loss of all operating segments that reported a loss, |
| c) | or its assets are 10 per cent or more of the combined assets of all operating segments. |
Two or more operating segments may be aggregated into a single operating segment if aggregation is consistent with the core principles of the standard, the segments have similar economic characteristics and are similar in various prescribed respects.
In application of the accounting policy, the Company has one reportable segment in the group being Concorde Security Pte Ltd being the main revenue driver. The other subsidiary, Berjaya Academy Pte Ltd, is the only revenue-generating subsidiary, with its revenue accounting for 0.31%.
F-23
CONCORDE INTERNATIONAL GROUP LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
| 4. | Critical accounting judgements and key sources of estimation uncertainty |
In applying the group’s accounting policies, the directors are required to make judgements that have a significant impact on the amounts recognized and to make estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources in accordance with IFRS 1 First-time Adoption of International Financial Reporting Standards. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
Key sources of estimation uncertainty
The key assumptions concerning the future, and other key sources of estimation uncertainty at the reporting period that may have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are discussed below:
| i. | Estimated useful lives of property and equipment |
The Group reviews annually the estimated useful lives of property and equipment based on factors such as business plans and strategies, expected level of usage and future technological developments. It is possible that future results of operations could be materially affected by changes in these estimates brought about by changes in the factors mentioned. The carrying amounts of the Group’s property and equipment are disclosed in Note 5 of the consolidated financial statements.
| ii. | Expected credit losses assessment on trade and other receivables |
The expected credit losses on trade and other receivables of the Group are estimated using a provision matrix based on the group’s historical credit loss experience, adjusted for factors that are specific to the debtors, general economic conditions and an assessment of both the current as well as the forecast direction of conditions at the reporting date, including time value of money where appropriate.
In assessing the credit risk of the trade and other receivables, the group takes into account qualitative and quantitative reasonable and supportable forward-looking information.
| iii. | Provision for accrued expenses |
The Group recognized the provisions according to the best estimate of the expenditure required to settle the present obligation at the end of the reporting period. If it is no longer probable that an outflow of resources embodying economic benefits will be required to settle the obligation, the provision is reversed. In assessing the provision, the group takes into account qualitative and quantitative reasonable and supportable forward-looking information.
| iv. | Contingent liabilities |
The disclosure of contingent liabilities requires the management to assess the probability of the outflow of resources required to settle the obligation arising from legal cases as disclosed in Note 20 to the consolidated financial statements. In assessing probability of the contingent liabilities, the group takes into account qualitative and quantitative information including penal solicitors’ opinion on the relevant cases.
| v. | Estimated useful lives of intangible assets |
The Group reviews annually the estimated useful lives of intangible assets based on factors such as business plans and strategies, expected level of usage and future technological developments. It is possible that future results of operations could be materially affected by changes in these estimates brought about by changes in the factors mentioned. The carrying amounts of the Group’s intangible assets are disclosed in Note 7 of the consolidated financial statements.
F-24
CONCORDE INTERNATIONAL GROUP LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
| 4. | Critical accounting judgements and key sources of estimation uncertainty (cont.) |
| vi. | Fair value of financial instruments |
The financial instruments of the Group such as receivables, borrowings and payables are carried at fair value. The management reviews periodically the degree of which fair value input of the financial instruments are observable to determine the fair value of the financial assets or liabilities. The fair value adopted by management are based on quoted price in active markets or unquoted price for identical assets or liabilities.
| 5. | Property and equipment |
| Building | Security equipment | Motor vehicle | Renovation | Office equipment | Furniture and fittings | Total | ||||||||||||||||||||||
| USD | USD | USD | USD | USD | USD | USD | ||||||||||||||||||||||
| Cost | ||||||||||||||||||||||||||||
| At January 1, 2022 | 2,788,466 | 657,190 | 403,440 | 396,201 | 199,360 | 43,669 | 4,488,356 | |||||||||||||||||||||
| Additions | — | — | — | — | — | — | — | |||||||||||||||||||||
| Disposals | — | — | — | — | — | — | — | |||||||||||||||||||||
| Currency translation adjustments | 17,340 | 4,087 | 973 | 2,464 | 279 | 272 | 25,415 | |||||||||||||||||||||
| At December 31, 2022 | 2,805,806 | 661,277 | 404,413 | 398,665 | 199,639 | 43,971 | 4,513,771 | |||||||||||||||||||||
| Additions | — | 36,582 | 137,476 | — | 21,852 | 3,034 | 198,944 | |||||||||||||||||||||
| Written off | — | — | (39,306 | ) | — | — | — | (39,306 | ) | |||||||||||||||||||
| Disposals | — | — | (38,314 | ) | — | — | — | (38,314 | ) | |||||||||||||||||||
| Currency translation adjustments | 76,038 | 22,055 | 6,188 | 7,542 | 2,864 | 832 | 115,519 | |||||||||||||||||||||
| At December 31, 2023 | 2,881,844 | 719,914 | 470,457 | 406,207 | 224,355 | 47,837 | 4,750,614 | |||||||||||||||||||||
| Accumulated Depreciation | ||||||||||||||||||||||||||||
| At January 1, 2022 | 90,040 | 508,398 | 341,264 | 234,518 | 123,412 | 38,054 | 1,335,686 | |||||||||||||||||||||
| Depreciation | 55,160 | 34,658 | 38,363 | 118,202 | 41,962 | 3,699 | 292,044 | |||||||||||||||||||||
| Disposal | — | — | — | — | — | — | ||||||||||||||||||||||
| Currency translation adjustments | 1,967 | 4,045 | 2,503 | 4,472 | 1,487 | 336 | 14,810 | |||||||||||||||||||||
| As December 31, 2022 | 147,167 | 547,101 | 382,130 | 357,192 | 166,861 | 42,089 | 1,642,540 | |||||||||||||||||||||
| Depreciation | 56,666 | 28,537 | 35,028 | 37,550 | 28,725 | 2,464 | 188,970 | |||||||||||||||||||||
| Written off | — | — | (30,135 | ) | — | — | — | (30,135 | ) | |||||||||||||||||||
| Disposal | — | — | (28,096 | ) | — | — | — | (28,096 | ) | |||||||||||||||||||
| Currency translation adjustments | 26,715 | 33,757 | (1,805 | ) | 7,401 | 6,012 | 842 | 72,922 | ||||||||||||||||||||
| As December 31, 2023 | 230,548 | 609,395 | 357,122 | 402,143 | 201,598 | 45,395 | 1,846,201 | |||||||||||||||||||||
| Net book value | ||||||||||||||||||||||||||||
| At December 31, 2022 | 2,658,639 | 114,176 | 22,283 | 41,473 | 32,778 | 1,882 | 2,871,231 | |||||||||||||||||||||
| At December 31, 2023 | 2,651,296 | 110,519 | 113,335 | 4,064 | 22,757 | 2,442 | 2,904,413 | |||||||||||||||||||||
As at December 31, 2023 and 2022, the Group’s building with carrying amount of USD2,651,297 and USD2,658,639 are mortgaged to secure the Group’s debt and certain credit facilities granted from banks.
As at December 31, 2023 The carrying value of a security equipment held under finance lease obligation as at 31 December 2023 is USD98,047 (2022: USDNil) The leased asset is pledged as security for the related finance lease liability.
There was no impairment of fixed assets recorded for the years ended December 31, 2023 and 2022.
F-25
CONCORDE INTERNATIONAL GROUP LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
| 6. | Leases |
Right-of-use assets
The Group entered into a tenancy arrangement with Housing Development Board to renew the tenancy of the Premises for a term of 3 years, commencing from July 1, 2021 at monthly rental $2,250. During the financial year, the Group also entered into a tenancy arrangement with Faith Global Pte Ltd to renew a tenancy of an office premise for a term of 2.5 years, commencing from July 1, 2023. The Group’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.
During the financial year, the Group purchased a security equipment at cost amounting to USD109,814 by a finance lease arrangement amounting to USD 78,871 with interest rate of 3.48% repayable by 60 monthly instalments.
The carrying amounts of right-of-use assets are as below:
| Office premise | Security equipment | Total | ||||||||||
| USD | USD | USD | ||||||||||
| At December 31, 2021 | 48,238 | — | 48,238 | |||||||||
| Depreciation expense | (18,932 | ) | — | (18,932 | ) | |||||||
| Foreign currency translation | (183 | ) | — | (183 | ) | |||||||
| At December 31, 2022 | 29,123 | — | 29,123 | |||||||||
| Addition | 86,900 | 109,814 | 196,714 | |||||||||
| Depreciation expense | (36,566 | ) | (11,568 | ) | (48,134 | ) | ||||||
| Foreign currency translation | (75 | ) | (199 | ) | (274 | ) | ||||||
| At December 31, 2023 | 79,382 | 98,047 | 177,429 | |||||||||
| Operating Lease | Finance Lease | Total | ||||||||||
| USD | USD | USD | ||||||||||
| Lease liabilities | ||||||||||||
| At December 31, 2021 | 48,507 | — | 48,507 | |||||||||
| Foreign currency translation | 325 | — | 325 | |||||||||
| Lease payments | (20,096 | ) | — | (20,096 | ) | |||||||
| Accretion of interest | 879 | — | 879 | |||||||||
| At December 31, 2022 | 29,615 | — | 29,615 | |||||||||
| Foreign currency translation | 583 | 60 | 643 | |||||||||
| Addition during the year | 86,901 | 78,871 | 165,772 | |||||||||
| Lease payments | (37,161 | ) | (13,889 | ) | (51,050 | ) | ||||||
| Accretion of interest | 1,359 | 3,564 | 4,923 | |||||||||
| At December 31, 2023 | 81,297 | 68,606 | 149,903 | |||||||||
| December 31, 2023 | December 31, 2022 | |||||||
| USD | USD | |||||||
| Represented by: | ||||||||
| Current liabilities | 59,821 | 19,632 | ||||||
| Non-current liabilities | 90,082 | 9,983 | ||||||
| 149,903 | 29,615 | |||||||
F-26
CONCORDE INTERNATIONAL GROUP LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
| 6. | Leases (cont.) |
Lease liabilities were measured at the present value of the remaining lease payments, discounted using the lessee’s incremental borrowing rate. The weighted average incremental borrowing rate applied to new leases during year 2023 and 2022 were 2.25%.
The following table summarizes the maturity of lease liabilities:
| Year ended December 31, 2023 | Within 1 year | 1 to 5 years | >5 years | Total | ||||||||||||
| Undiscounted lease liabilities | 65,160 | 96,588 | — | 161,748 | ||||||||||||
| Interest expense | (5,339 | ) | (6,506 | ) | — | (11,845 | ) | |||||||||
| 59,821 | 90,082 | — | 149,903 | |||||||||||||
| Year ended December 31, 2022 | Within 1 year | 1 to 5 years | >5 years | Total | ||||||||||||
| Undiscounted lease liabilities | 20,096 | 10,048 | — | 30,144 | ||||||||||||
| Interest expense | (464 | ) | (65 | ) | — | (529 | ) | |||||||||
| 19,632 | 9,983 | — | 29,615 | |||||||||||||
| 7. | Intangible assets |
| Research and development | Software | Patents | Trademark | Total | ||||||||||||||||
| USD | USD | USD | USD | USD | ||||||||||||||||
| Cost | ||||||||||||||||||||
| At December 31, 2021 | 256,350 | 15,782 | 4,941 | 8,063 | 285,136 | |||||||||||||||
| Additions | — | — | — | — | — | |||||||||||||||
| Currency translation adjustments | 1,595 | 98 | 30 | 50 | 1,773 | |||||||||||||||
| At December 31, 2022 | 257,945 | 15,880 | 4,971 | 8,113 | 286,909 | |||||||||||||||
| Additions | — | — | 4,819 | — | 4,819 | |||||||||||||||
| Currency translation adjustments | 4,879 | 300 | 94 | 153 | 5,426 | |||||||||||||||
| At December 31, 2023 | 262,824 | 16,180 | 9,884 | 8,266 | 297,154 | |||||||||||||||
| Accumulated amortization | ||||||||||||||||||||
| At December 31, 2021 | 49,380 | 2,192 | 1,590 | 2,900 | 56,062 | |||||||||||||||
| Amortization | 72,120 | 5,293 | 249 | 811 | 78,473 | |||||||||||||||
| Currency translation adjustments | 307 | 14 | 9 | 19 | 349 | |||||||||||||||
| At December 31, 2022 | 121,807 | 7,499 | 1,848 | 3,730 | 134,884 | |||||||||||||||
| Amortization | 86,132 | 5,303 | 486 | 813 | 92,734 | |||||||||||||||
| Currency translation adjustments | 3,780 | 232 | 44 | 84 | 4,140 | |||||||||||||||
| At December 31, 2023 | 211,719 | 13,034 | 2,378 | 4,627 | 231,758 | |||||||||||||||
| Net book value | ||||||||||||||||||||
| At December 31, 2022 | 136,138 | 8,381 | 3,123 | 4,383 | 152,025 | |||||||||||||||
| At December 31, 2023 | 51,105 | 3,146 | 7,506 | 3,639 | 65,396 | |||||||||||||||
There was no impairment of intangible assets recorded for the years ended December 31, 2023 and 2022.
F-27
CONCORDE INTERNATIONAL GROUP LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
| 8. | Trade and other receivables |
| December 31, 2023 | December 31, 2022 | |||||||
| USD | USD | |||||||
| Trade receivables | ||||||||
| Third parties (refer note a below) | 3,804,343 | 2,639,311 | ||||||
| Less: Allowances for expected credit losses | (428,099 | ) | (489,792 | ) | ||||
| Trade receivables, net | 3,376,244 | 2,149,519 | ||||||
| Ageing analysis of trade receivables | ||||||||
| Not past due | 1,409,649 | 780,461 | ||||||
| Up to 60 days | 726,333 | 674,765 | ||||||
| 60 to 365 days | 1,266,371 | 810,028 | ||||||
| Over 1 year | 401,990 | 374,057 | ||||||
| 3,804,343 | 2,639,311 | |||||||
| Other receivables | ||||||||
| Amount due from related parties (refer note 21) | 844,982 | 1,005,390 | ||||||
| Government grant receivable | 7,699 | 404,423 | ||||||
| Advance to employees | 10,037 | 8,182 | ||||||
| Deposit recoverable | 34,863 | 42,021 | ||||||
| Prepayments | 56,521 | — | ||||||
| 954,102 | 1,460,016 | |||||||
| Total trade and other receivables | 4,330,346 | 3,609,535 | ||||||
| a. | Included in trade receivables are unbilled revenue amounting to USD711,971 in 2023 and USD104,289 in 2022 which related to I-Guarding services. The services are provided within the financial year end however billing was made subsequent to the financial year ended. According to the contract with the customer, the consideration on the services provided are unconditional as the performance obligation has been complied with. |
| b. | Trade receivables are non-interest bearing and are generally on 30 days’ terms. |
| c. | Lifetime expected loss provision for trade receivables of the Group are as follows: |
| Weighted- | December 31, 2023 | December 31, 2022 | ||||||||||||||||||
| average | Gross | Allowance for | Gross | Allowance for | ||||||||||||||||
| expected | carrying | expected | carrying | expected | ||||||||||||||||
| credit loss | amount | credit losses | amount | credit losses | ||||||||||||||||
| Customers’ characteristics | rate | USD | USD | USD | USD | |||||||||||||||
| Low risk | 0% | 3,376,244 | — | 2,149,519 | — | |||||||||||||||
| Loss | 100% | 428,099 | 428,099 | 489,792 | 489,792 | |||||||||||||||
| 3,804,343 | 428,099 | 2,639,311 | 489,792 | |||||||||||||||||
| d. | The reconciliation of movement in the allowances for expected credit losses is as follows: |
| 2023 | 2022 | |||||||
| USD | USD | |||||||
| Balance at January 1 | 489,792 | 252,392 | ||||||
| Impairment during the year | (69,763 | ) | 235,830 | |||||
| Exchange differences | 8,070 | 1,570 | ||||||
| Balance at December 31 | 428,099 | 489,792 | ||||||
F-28
CONCORDE INTERNATIONAL GROUP LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
| 8. | Trade and other receivables (cont.) |
| e. | Government grants receivables are pre-approved government grants granted to customers for adoption of digitalization. Such grant is directly disbursed to Concorde. |
| f. | The trade and other receivables are denominated in the local currency of the Group operates in. |
| g. | The government grant receivables is in relation to approved innovation project implemented. There are no unfulfilled conditions or other contingencies attaching to this grant. |
| 9. | Cash and cash equivalents |
| December 31, 2023 | December 31, 2022 | |||||||
| USD | USD | |||||||
| Cash on hand | 5,224 | 3,756 | ||||||
| Cash at bank | 951,751 | 437,522 | ||||||
| Total cash and cash equivalents | 956,975 | 441,278 | ||||||
| 10. | Debt |
| December 31, 2023 | December 31, 2022 | |||||||
| USD | USD | |||||||
| Loan 1 – Property loan | 1,801,718 | 1,840,102 | ||||||
| Loan 2 – Bridge loan | 488,841 | 766,503 | ||||||
| Loan 3 – Bridge loan | 342,602 | 267,257 | ||||||
| Loan 4 – Money market loan | 1,339,487 | 1,116,450 | ||||||
| 3,972,648 | 3,990,312 | |||||||
| Represented by: | ||||||||
| Current liabilities | 1,863,110 | 1,567,292 | ||||||
| Non-current liabilities | 2,109,538 | 2,423,020 | ||||||
| 3,972,648 | 3,990,312 | |||||||
| a. | The details of the bank borrowings are as follows: |
Loan 1 with a carrying amount of USD1,801,718 (2022: USD1,840,102) is secured by a legal mortgage on a leasehold property of the Company with a carrying amount of USD2,651,297 (2022: USD2,658,640) and guaranteed personally by a director of the Company and a close family member of the director. It is repayable by 300 monthly instalments commencing from February 1, 2020 and bears interest at the rate of 1.30% per annum.
Loan 2 with a carrying amount of USD488,841 (2022: USD766,503) is unsecured and guaranteed personally by a director and a close family member of the director. It is repayable by 48-months instalments commencing from September 1, 2021 and bears interest at the rate of 2.5% per annum.
Loan 3 with a carrying amount of USD342,602 (2022: USD267,257) is unsecured and guaranteed personally by a director and a close family member of the director. It is repayable by 60-months instalments commencing from December 1, 2021 and bears interest at the rate of 2.5% per annum.
Loan 4 with a carrying amount of USD1,339,487 (2022: USD1,116,450) is secured by a legal mortgage on a freehold property of a director and joint and several guarantee of $2,902,770 executed by a director and a close family member of the director. The money market loan shall be drawn in one or more tranches, subject to a minimum of $372,150 for the period of one to three months and bear interest at rates ranging from 4.9% to 6.4% per annum.
F-29
CONCORDE INTERNATIONAL GROUP LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
| 10. | Debt (cont.) |
| b. | Debt are classified as financial liabilities and are measured at amortized costs. |
| c. | Debt are denominated in Singapore Dollar. |
| d. | At the end of the reporting period, all debt were on fixed rate. However, the bank has the discretion to revise the interest at sole discretion of the bank. |
| 11. | Deferred tax liability/(asset) |
The following are the major deferred tax liabilities and assets recognized by the group and movements thereon during the current and prior reporting period.
| December 31, 2023 | December 31, 2022 | |||||||
| USD | USD | |||||||
| Deferred tax liabilities: | ||||||||
| Deductible temporary differences | (108,009 | ) | — | |||||
| Deferred tax assets: | ||||||||
| Unutilized tax credits | (25,479 | ) | — | |||||
| Net deferred tax liabilities | (133,488 | ) | — | |||||
| 12. | Trade and other payables |
| December 31, 2023 | December 31, 2022 | |||||||
| USD | USD | |||||||
| Trade payables | ||||||||
| Third parties | 609,281 | 471,518 | ||||||
| Other payables and accruals | ||||||||
| Amounts due to related parties (refer note 21) | 405,632 | 609,306 | ||||||
| Other payables | 466,834 | 89,796 | ||||||
| Deferred revenue | — | 122,810 | ||||||
| Accrued expense | 110,219 | 179,512 | ||||||
| 982,685 | 1,001,424 | |||||||
| Total trade and other payables | 1,591,966 | 1,472,942 | ||||||
Trade payables are unsecured, interest free and have an average payment term of 30 days and its carrying amount approximates its fair value.
| 13. | Equity |
| December 31, 2023 | December 31, 2023 | December 31, 2022 | December 31, 2022 | |||||||||||||
| Par Value Per Share | Number of shares | Par Value Per Share | Number of shares | |||||||||||||
| USD | USD | |||||||||||||||
| Share capital | ||||||||||||||||
| Authorized shares | ||||||||||||||||
| Class A Ordinary Shares | 0.00001 | 250,000,000 | 0.00001 | 250,000,000 | ||||||||||||
| Class B Ordinary Shares | 0.00001 | 100,000,000 | 0.00001 | 100,000,000 | ||||||||||||
| Issued and outstanding shares | ||||||||||||||||
| Class A Ordinary Shares | — | — | — | — | ||||||||||||
| Class B Ordinary Shares | 0.00001 | 100,000 | 0.00001 | 100,000 | ||||||||||||
F-30
CONCORDE INTERNATIONAL GROUP LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
| 13. | Equity (cont.) |
The Company was incorporated under the laws of the British Virgin Islands on May 2, 2023. The original authorized share capital of the Company was USD 50,000 divided into 50,000 Ordinary Shares, par value USD1 per share with 1 share issued and outstanding at incorporation.
On March 14, 2024, the Company sub-divided, re-designated and reclassified the 50,000 authorized shares as below:
| (i) | 50,000 authorized shares were sub-divided to 5,000,000,000 shares of a single class each with a par value of US$0.00001. |
| (ii) | 4,650,000,000 shares of US$0.00001 each was cancelled to reduce the number of shares to 350,000,000 of a single class each with a par value of US$0.00001. |
| (iii) | The Company further reclassified the shares into (i) 250,000,000 Class A Ordinary Shares with a par value of US$0.00001 each; and (ii) 100,000,000 Class B Ordinary Shares with a par value of $0.00001 each. |
Equity
The shareholders’ equity structure as of December 31, 2023 and 2022 are presented after giving retrospective effect on January 1, 2022 to the reorganization of the Company that was under common control and completed on November 3, 2023. Immediately before and after reorganization, the Company, together with its subsidiaries, were effectively controlled by the same shareholders; therefore, for accounting purposes, the reorganization was accounted for as a recapitalization.
| a. | Merger reserves |
The merger reserves represent the differences between the consideration paid and the share capital and capital reserves of the subsidiaries acquired under common control.
| b. | Other reserves |
Other reserves represent reserves arising from bad debt of merger for the subsidiaries acquired under common control and foreign currency exchange translation reserve, which is used to record the foreign currency exchange differences arising from the translation of the consolidated financial statement of a foreign subsidiaries whose functional currency is different from that of the presentation currency of the Group.
Accordingly, the Company issued 0 Class A Ordinary Shares and 100,000 Class B Ordinary Shares, which were outstanding as of December 31, 2023 and 2022.
On March 18, 2024, the Company has further issued 20,788,886 Class B Ordinary Shares with par value of $0.00001 per share, to members of our Board, executive officers or their affiliates and existing shareholders resulting in a total of 20,888,886 Class B Ordinary Shares issued to members of our Board, executive officers or their affiliates and existing shareholders.
| 14. | Earnings/(Loss) per share |
| (a) | Basic earnings/(loss) per ordinary share |
| December 31, 2023 | December 31, 2022 | |||||||
| Profit/(Loss) attributable to equity holders of the parent (USD) | 960,686 | (783,037 | ) | |||||
| Weighted average number of ordinary shares outstanding | 100,000 | 100,000 | ||||||
| Basic earnings/(loss) per ordinary share (USD) | 9.61 | (7.83 | ) | |||||
F-31
CONCORDE INTERNATIONAL GROUP LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
| 14. | Earnings/(Loss) per share (cont.) |
| (b) | Diluted earnings/(loss) per ordinary share |
The diluted earnings/(loss) per ordinary share equal the basic earnings per ordinary share as there were no dilutive potential ordinary shares throughout the reporting periods.
| 15. | Revenue |
| 2023 | 2022 | |||||||
| USD | USD | |||||||
| Type of goods or services | ||||||||
| I-Guarding Services | 10,452,263 | 4,960,585 | ||||||
| Man Guarding Services | 150,314 | 12,193 | ||||||
| Others | 53,416 | 33,567 | ||||||
| 10,655,993 | 5,006,345 | |||||||
| 2023 | 2022 | |||||||
| USD | USD | |||||||
| Timing of transfer of goods or services | ||||||||
| At a point of time | 392,984 | 782,588 | ||||||
| Over time | 10,263,009 | 4,223,757 | ||||||
| 10,655,993 | 5,006,345 | |||||||
| 16. | Income tax expenses |
The components of income tax provision are:
| December 31, 2023 | December 31, 2022 | |||||||
| USD | USD | |||||||
| Current income tax expense | — | — | ||||||
| Deferred income tax expense | 131,240 | — | ||||||
| Total income tax expenses | 131,240 | — | ||||||
A reconciliation between income tax expense and the product of accounting loss multiple by the applicable corporate tax rate for the reporting periods ended December 31, 2023 and 2022 were as follows:
| December 31, 2023 | December 31, 2022 | |||||||
| USD | USD | |||||||
| Profit/(Loss) before income tax | 1,125,435 | (803,980 | ) | |||||
| Tax calculated at statutory rate of 17% (2022: 17%) | 191,324 | (136,677 | ) | |||||
| Income not subject to tax | (28,390 | ) | (360 | ) | ||||
| Expense not deductible for tax purpose | 73,097 | 93,008 | ||||||
| Other timing difference | 9,432 | (9,997 | ) | |||||
| Tax on enhance deductible for qualifying expenditure | — | (37,959 | ) | |||||
| Deferred tax assets previously not recognized, net of foreign exchange fluctuation | (88,615 | ) | — | |||||
| Deferred tax assets (net) not recognized | 25,608 | 91,985 | ||||||
| 131,240 | — | |||||||
F-32
CONCORDE INTERNATIONAL GROUP LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
| 16. | Income tax expenses (cont.) |
In previous financial year end, deferred tax assets (net) have not been recognized in respect of the following items.
| December 31, 2022 | ||||
| USD | ||||
| Deferred tax liabilities: | ||||
| Deductible temporary differences | (131,798 | ) | ||
| Deferred tax assets: | ||||
| Unutilized tax credits | 223,693 | |||
| Deferred tax assets (net) not recognized | 91,895 | |||
| 17. | Employee benefits expenses |
| December 31, 2023 | December 31, 2022 | |||||||
| USD | USD | |||||||
| Directors’ emoluments | 260,115 | 226,447 | ||||||
| Short term employment benefits | 895,300 | 522,391 | ||||||
| Defined contribution plan | 141,193 | 82,476 | ||||||
| Other employee benefits | 14,737 | 81,458 | ||||||
| 1,311,345 | 912,772 | |||||||
| 18. | Other expenses |
| December 31, 2023 | December 31, 2022 | |||||||
| USD | USD | |||||||
| Bad debt allowance* | (246,619 | ) | 463,463 | |||||
| Professional fees | 121,773 | 193,838 | ||||||
| Distribution expenses | 102,971 | 142,513 | ||||||
| Office expenses | 221,371 | 154,802 | ||||||
| Rental expenses | 31,342 | 29,865 | ||||||
| Others | 83,801 | 5,154 | ||||||
| 314,639 | 989,635 | |||||||
| * | Included in the bad debt allowance being an amount owing by iMatrix Global Pte Ltd written off in previous financial year 2022. |
| 19. | Other income |
| December 31, 2023 | December 31, 2022 | |||||||
| USD | USD | |||||||
| Receipt of government grants | 47,894 | 132,836 | ||||||
| Interest income | 30,560 | 48,405 | ||||||
| Others | 158,457 | 23,960 | ||||||
| Total other income | 236,911 | 205,201 | ||||||
F-33
CONCORDE INTERNATIONAL GROUP LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
| 20. | Finance costs |
| December 31, 2023 | December 31, 2022 | |||||||
| USD | USD | |||||||
| Interest on debts and borrowings | 144,703 | 74,154 | ||||||
| Interest on lease liabilities | 4,923 | 879 | ||||||
| Total finance costs | 149,626 | 75,033 | ||||||
| 21. | Related party transactions |
The table below sets forth the major related parties and their relationships with the Group as at the end of the reporting period:
| Name of related parties | Relationship with the Company | |
| Concorde Global I Pte Ltd | Controlled by Mr. Chua Swee Kheng and Lim Ping Ping | |
| iMatrix Global Pte Ltd | Mr. Chua Swee Kheng has significant influence over the company | |
| Total Protection Solutions Pte Ltd | Lim Ping Ping is a shareholder of Total Protection Solutions Pte Ltd until November 2023 | |
| Ping Ping, Lim | Non-controlling shareholder and spouse of Mr. Chua Swee Kheng | |
| Swee Kheng Chua | Controlling shareholder and Chief Executive Officer | |
| Concorde International Group Pte Ltd | Subsidiary of Concorde International Group Ltd | |
| Concorde i-FAST USA Inc. | Subsidiary of Concorde International Group Ltd | |
| Concorde Security Pte Ltd | Subsidiary of Concorde International Group Pte Ltd | |
| Concorde Security Sdn Bhd | Subsidiary of Concorde International Group Pte Ltd | |
| Concorde Security Limited | Subsidiary of Concorde International Group Pte Ltd | |
| Concorde Asia Pte Ltd | Subsidiary of Concorde International Group Pte Ltd | |
| Berjaya Academy Pte Ltd | Subsidiary of Concorde International Group Pte Ltd |
| (a) | The principal related party balances and transactions as of and for the years ended December 31, 2023 and 2022 is as follows: |
Amount due from related parties:
| December 31, 2023 | December 31, 2022 | |||||||||
| USD | USD | |||||||||
| Total Protection Solutions Pte Ltd | (a) | 753,976 | 651,702 | |||||||
| Concorde Global I Pte Ltd | 15,168 | — | ||||||||
| Swee Kheng Chua | (b) | 75,838 | 342,137 | |||||||
| Ping Ping Lim | (c) | — | 11,551 | |||||||
| 844,982 | 1,005,390 | |||||||||
| (a) | On December 31, 2022, the Group formalized an agreement with Total Protection Solutions Pte Ltd loaned $651,702. The loan is unsecured, and it bears an interest rate of 5%. The loan was initially due on demand. On February 1, 2024, the Group entered into a repayment agreement with Total Protection Solutions Pte Ltd. Total Protection Solutions Pte Ltd will repay this loan on a monthly basis over a 5 year period commencing March 2024. In the financial year 2023, the Group extended an additional loan of $89,575, following the initial formalized agreement. This loan remains unsecured and carries an interest rate of 5%. |
| (b) | The loan is unsecured, interest free and repayable on demand on the basis that the Group owed to Swee Kheng Chua. In the financial year 2023, Swee Kheng Chua voluntarily requested a pay cut for the year. Additionally, he received a debt repayment from iMatrix Global Pte Ltd on behalf of the Company (refer to note d). The amounts previously paid to him during the year and as mentioned in note d have been utilized to offset the Company’s outstanding debt to him. |
F-34
CONCORDE INTERNATIONAL GROUP LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
| 21. | Related party transactions (cont.) |
| (c) | The loan is unsecured, interest free and repayable on demand on the basis that the Group owed to Ping Ping Lim. In the financial year 2023, Ping Ping Lim voluntarily requested a pay cut. The amount she had been paid during the year resulted in a balance owed to the Company, which was then reassigned to Swee Kheng Chua. |
| (d) | In the financial year 2022, an amount of $233,497 was written off as pertaining to iMatrix Global Pte Ltd. This has been included under bad debt allowance under Note 18 During the financial year 2023, due to the collection efforts of the new onboarded finance team, iMatrix Global Pte Ltd repaid $222,141 of debt directly to Swee Kheng Chua. This amount was utilized to offset the debt owed to Swee Kheng Chua. |
Amount due to related parties:
| December 31, 2023 | December 31, 2022 | |||||||||
| USD | USD | |||||||||
| Swee Kheng Chua | (a) | 405,632 | 538,985 | |||||||
| Ping Ping Lim | (b) | — | 70,320 | |||||||
| 405,632 | 609,305 | |||||||||
| (a) | In the financial year 2023, Swee Kheng Chua voluntarily requested a pay cut resulting in payments made to him during the year as a balance owed to the Company. He also received a debt repayment from iMatrix Global Pte Ltd on behalf of the Company, and Ping Ping Lim’s due amount to the Company was reassigned to him. The resulting owed amount to the Company was then used to offset the outstanding debt. The amount due to Swee Kheng Chua represents a short-term non-interest-bearing loan. The loan is unsecured. |
| (b) | In the financial year 2022, the amount due to Ping Ping Lim represents a short-term non-interest-bearing loan. The loan is unsecured. In the financial year 2023, this amount due to Ping Ping Lim was reassigned to Swee Kheng Chua. |
| December 31, 2023 | December 31, 2022 | |||||||
| USD | USD | |||||||
| Subcontracting costs | ||||||||
| Total Protection Solution Pte Ltd | 2,504,458 | 1,668,048 | ||||||
| iMatrix Global Pte Ltd | 16,403 | 150,305 | ||||||
| 2,520,861 | 1,818,353 | |||||||
iMatrix Global Pte Ltd and Total Protection Solution Pte Ltd provided Subcontracting service to the Concorde Security Pte Ltd.
Key management personnel compensation for the year ended is as follows:
| December 31, 2023 | December 31, 2022 | |||||||
| USD | USD | |||||||
| Swee Kheng Chua | 70,725 | 212,047 | ||||||
| Sharifah Noriati Binte Said Omar* | 21,983 | 34,632 | ||||||
| Ping Ping Lim** | 88,193 | 157,119 | ||||||
| Terence Wing Khai Yap | 86,098 | — | ||||||
| Sze Yin Ong | 52,191 | — | ||||||
| Total compensation | 319,190 | 403,798 | ||||||
| * | Ms. Sharifah Noriati Binte Said Omar serves as a nominee director at Berjaya Academy Pte Ltd, our 70% owned subsidiary, as well as Concorde Security Pte Ltd (Singapore), our 96.81% owned subsidiary, and Concorde Asia Pte Ltd (Singapore), our 70% owned subsidiary. |
| ** | Ping Ping Lim, Swee Kheng Chua’s spouse. |
Compensation payable to key management personnel comprises of salaries, bonus, allowances and Employer’s contribution to Central Provident Funds. In the financial year 2023, Swee Kheng Chua and Ping Ping Lim both requested for a voluntary pay cut in Concorde Security Pte Ltd.
F-35
CONCORDE INTERNATIONAL GROUP LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
| 21. | Related party transactions (cont.) |
Terms and conditions of transactions with related parties
There have been no guarantees provided or received for any related party receivables or payables. For the year ended 31 December 2023, the Group has not recorded any expected credit loss allowances relating to amounts owed by related parties. This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.
| 22. | Commitments and Contingent Liabilities |
As part of the Board’s ongoing regulatory compliance process, the Board continues to monitor legal and regulatory developments and their potential impact on the Company under IAS 37 Provisions, Contingent Liabilities and Contingent Assets. Management is not aware of any contingencies that may have a significant impact on the financial position of the Company.
On July 2, 2022, the Group has issued a claim against Grocery Logistics of Singapore Ltd. (“GLS”), via its solicitor, Central Chamber Law Corporation, for willful termination of contract without due course. The Group was engaged by GLS to provide security services at various sites via service agreement dated 1 January 2019 and an Addendum dated 1 February 2020. The Group’s service has been terminated prematurely although GLS has agreed to renew their services. The total amount that the Group is claiming from GLS is SGD1,392,546.70. The Company reappointed Lions Chambers LLC Advocates & Solicitors as its legal counsel and is the process to issue another claim against Grocery Logistics of Singapore Ltd. The Group’s lawyers have advised that they consider that the claim has merit, and they have recommended that it be contested. No provision has been made in these consolidated financial statements as the group’s management does not consider that there is any probable loss.
On November 2, 2020, the Group issued a claim against Essilor Amera Pte Ltd. (“Essilor”), via its solicitor, Central Chamber Law Corporation, for willful termination of contract without due course. The Group was engaged by Essilor to provide security services 201 Kallang Bahru and 215 Kallang Bahru. The Group’s service has been terminated prematurely without notice. The total amount that the Group is claiming from Essilor is SGD179,724.07. No provision has been made in these consolidated financial statements as the group’s management does not consider that there is any probable loss.
The Group is in the process to issue a claim against C&W Services (S) Pte Ltd. (“C&W”), for non-fulfillment of contract obligations. The Group was engaged by C&W to provide security services at various Mapletree Logistics Trust Properties from November 14, 2022 to November 13, 2029. The Group’s service has been terminated prematurely with outstanding service fee unpaid amounting to SGD1,621,342.60. The total amount that the Group is claiming from C&W is SGD1,621,342.60. The Group’s legal counsel, Lions Chambers LLC Advocates & Solicitors, have advised that they consider that the claim has merit, and they have recommended that it be contested. No provision has been made in these consolidated financial statements as the group’s management does not consider that there is any probable loss .
The Group has engaged Lions Chambers LLC Advocates & Solicitors as its legal counsel and is in the process to issue a claim against Eurokars Group of Companies (“Eurokars”), for non-fulfillment of contract obligations. The Group was engaged by Eurokars to provide security services at various Eurokars sites from October 1, 2020 to September 30, 2021. The Group’s service has been terminated prematurely without notice. The total amount that the Group is claiming from Eurokars is SGD382,600. No provision has been made in these consolidated financial statements as the group’s management does not consider that there is any probable loss.
On May 14, 2021, the Group has issued a claim against V N Ganapathy (“Mr. Ganapathy”), via its solicitors, Edmond Pereira Law Corporation, for refund of deposit made for purchase of commercial vehicle. The total amount claiming from the Group is SGD15,328. No provision has been made in these consolidated financial statements as the group’s management does not consider that there is any probable loss. The Group decided not to pursue this case.
F-36
CONCORDE INTERNATIONAL GROUP LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
| 22. | Commitments and Contingent Liabilities (cont.) |
On December 28, 2021, the Group issued a claim against Ascendas Services Pte. Ltd. (“Ascendas”), for non-fulfillment of contract obligations. A Settlement Agreement was signed in March 2023 and a Notices of Discontinuance was issued on April 5, 2023. No provision has been made in these consolidated financial statements as the case was closed.
On May 25, 2022, Public Prosecutor of Singapore has issued a charge against Mr. Chua Swee Kheng, the controlling shareholder of the Group for criminal matter involving offences under the Private Security Industry Act and Private Security Industry (Security Service Providers) Regulations 2009. Mr. Chua Swee Kheng has applied for the case to be Discharged not amounted to Acquittal and the Attorney General’s Chambers via its letter dated May 20, 2022 approved the application. No provision has been made in these consolidated financial statements as the case was closed.
On June 22, 2020, the Group has issued a claim against Avipesh Rai (“Avipesh Rai”) via its solicitor, Central Chamber Law Corporation, for breach of contract and employee confidentiality obligations SGD224,000 No provision has been made in these consolidated financial statements as the group’s management does not consider that there is any probable loss.
On August 16, 2022, the Group issued a claim against PGI Holdings Pte Ltd (“PGI”) for damages to property for SGD5,350. No provision has been made in these consolidated financial statements as the case was closed.
Other than as disclosed above, the Group does not have any contingent liabilities as of the end of the reporting period.
| 23. | Capital Management |
The primary objective of the Group’s capital management is to ensure that it maintains a strong credit rating and net current asset position in order to support its business and maximize shareholder value. The capital structure of the Group comprises issued share capital, merger reserve, foreign currency translation reserve and accumulated losses.
The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Group is not subject to any externally imposed capital requirements. No changes were made in the objectives, policies or processes during the financial year ended December 31, 2023 and 2022. The net gearing ratios as at December 31, 2023 and 2022 are as follows:
| December 31, 2023 | December 31, 2022 | |||||||
| USD | USD | |||||||
| Borrowings | 3,972,648 | 3,990,312 | ||||||
| Less: cash and bank balances | (956,975 | ) | (441,278 | ) | ||||
| Net debt | 3,015,673 | 3,549,034 | ||||||
| Total Owner’s equity | 2,565,237 | 1,506,492 | ||||||
| Net gearing ratio | 1.18 | 2.65 | ||||||
F-37
CONCORDE INTERNATIONAL GROUP LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
| 24. | Financial Instruments and Risk Management |
The Group’s activities expose it to a variety of financial risks from its operation. The key financial risks include liquidity risk, credit risk and market risk (including interest rate risk and foreign currency risk).
The Board of Directors review and agree policies and procedures for the management of these risks, which are executed by the management team. It is and has been throughout the current and previous financial year, the Group’s policy that no trading in derivatives for speculative purposes should be undertaken.
The following sections provide details regarding the Group’s exposure to the abovementioned financial risks and the objectives, policies, and processes for the management of these risks.
There has been no change to the Group’s exposure to these financial risks or the manner in which it manages and measures the risks.
| (a) | Credit risk |
Credit risk refers to the risk that the counterparty will default on its contractual obligations resulting in a loss to the Group. The Group’s exposure to credit risk arises primarily from trade receivables. For other financial assets (including cash and cash equivalents), the Group minimizes credit risk by dealing exclusively with high credit rating counterparties.
The Group has adopted a policy of only dealing with creditworthy counterparties. The Group performs ongoing credit evaluation of its counterparties’ financial condition and generally does not require collateral.
The Group considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis throughout each reporting period.
The Group has determined the default event on a financial asset to be when internal and/or external information indicates that the financial asset is unlikely to be received, which could include default of contractual payments due for more than 60 days, default of interest due for more than 30 days or there is significant difficulty of the counterparty.
To minimize credit risk, the Group has developed and maintained the Group’s credit risk gradings to categorizes exposures according to their degree of risk of default. The credit rating information is supplied by publicly available financial information and the Group’s own trading records to rate its major customers and other debtors. The Group considers available reasonable and supportive forward-looking information which includes the following indicators:
| - | Internal credit rating |
| - | External credit rating |
| - | Actual or expected significant adverse changes in business, financial or economic conditions that are expected to cause a significant change to the debtor’s ability to meet its obligations. |
| - | Actual or expected significant changes in the operating results of the debtor. |
| - | Significant increases in credit risk on other financial instruments of the same debtor |
| - | Significant changes in the expected performance and behavior of the debtor, including changes in the payment status of debtors in the group and changes in the operating results of the debtor. |
Regardless of the analysis above, a significant increase in credit risk is presumed if a debtor is more than 30 days past due in making contractual payment.
F-38
CONCORDE INTERNATIONAL GROUP LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
| 24. | Financial Instruments and Risk Management (cont.) |
The Group determined that its financial assets are credit-impaired when:
| - | There is significant difficulty of the debtor. |
| - | A breach of contract, such as a default or past due event |
| - | It is becoming probable that the debtor will enter bankruptcy or other financial reorganization. |
| - | There is a disappearance of an active market for that financial asset because of financial difficulty. |
Financial assets are written off when there is evidence indicating that the debtor is in severe financial difficulty and the debtor has no realistic prospect of recovery.
The Group’s current credit risk grading framework comprises the following categories:
| Category | Definition of category | Basis for recognizing expected credit loss (ECL) | ||
| I | Counterparty has a low risk of default and does not have any past-due amounts. | 12-month ECL | ||
| II | Amount is >30 days past due or there has been a significant increase in credit risk since initial recognition. | Lifetime ECL — not credit-impaired | ||
| III | Amount is >60 days past due or there is evidence indicating the asset is credit-impaired (in default). | Lifetime ECL — credit impaired | ||
| IV | There is evidence indicating that the debtor is in severe financial difficulty and the debtor has no realistic prospect of recovery. | Amount is written-off |
The table below details the credit quality of the Group’s financial assets, as well as maximum exposure to credit risk by credit risk rating categories:
| Gross | ||||||||||||||||||
| 12-month or | carrying | Net carrying | ||||||||||||||||
| Group | Note | lifetime ECL | amount | Impairment | amount | |||||||||||||
| USD | USD | USD | ||||||||||||||||
| December 31, 2023 | ||||||||||||||||||
| Trade and other receivables | 12-month | 4,758,445 | (428,099 | ) | 4,330,346 | |||||||||||||
| Cash and cash equivalents | 12-month | 956,975 | — | 956,975 | ||||||||||||||
| December 31, 2022 | ||||||||||||||||||
| Trade and other receivables | 12-month | 4,099,327 | (489,792 | ) | 3,609,535 | |||||||||||||
| Cash and cash equivalents | 12-month | 441,278 | — | 441,278 | ||||||||||||||
| (i) | Trade and other receivables |
The Group assessed the latest performance and financial position of the counterparties, adjusted for the future outlook of the industry in which the counterparties operate in, and concluded that there has been no significant increase in the credit risk since the initial recognition of the financial assets. Accordingly, the Group measured the impairment loss allowance using 12-month ECL and determined that the ECL is insignificant.
| (ii) | Cash and cash equivalents |
No expected credit losses are recognized from cash and cash equivalents arising from bank balances with financial institution because the probability of default by these financial institutions are negligible.
F-39
CONCORDE INTERNATIONAL GROUP LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
| 24. | Financial Instruments and Risk Management (cont.) |
| (b) | Liquidity risk |
| Carrying amount | Contractual cash flow | Within 1 year | Within 2 to 5 years | After 5 years | ||||||||||||||||
| Group | USD | USD | USD | USD | USD | |||||||||||||||
| 2023 | ||||||||||||||||||||
| Financial assets | ||||||||||||||||||||
| Trade and other receivables | 4,330,346 | 4,330,346 | 4,330,346 | — | — | |||||||||||||||
| Cash and cash equivalents | 956,975 | 956,975 | 956,975 | — | — | |||||||||||||||
| Total undiscounted financial assets | 5,287,321 | 5,287,321 | 5,287,321 | — | — | |||||||||||||||
| Financial liabilities | ||||||||||||||||||||
| Trade and other payables | 1,591,562 | 1,591,562 | 1,591,562 | — | — | |||||||||||||||
| Lease liabilities | 149,903 | 161,748 | 65,160 | 96,588 | — | |||||||||||||||
| Debt | 3,972,648 | 4,264,451 | 1,909,420 | 781,172 | 1,573,859 | |||||||||||||||
| Total undiscounted financial liabilities | 5,714,113 | 6,017,761 | 3,566,142 | 877,760 | 1,573,859 | |||||||||||||||
| 2022 | ||||||||||||||||||||
| Financial assets | ||||||||||||||||||||
| Trade and other receivables | 3,609,535 | 3,609,535 | 3,609,535 | — | — | |||||||||||||||
| Cash and cash equivalents | 441,278 | 441,278 | 441,278 | — | — | |||||||||||||||
| Total undiscounted financial assets | 4,050,813 | 4,050,813 | 4,050,813 | — | — | |||||||||||||||
| Financial liabilities | ||||||||||||||||||||
| Trade and other payables | 1,472,942 | 1,472,942 | 1,472,942 | — | — | |||||||||||||||
| Lease liabilities | 29,615 | 30,144 | 20,096 | 10,048 | — | |||||||||||||||
| Debt | 3,990,312 | 4,304,600 | 1,611,586 | 1,055,830 | 1,637,184 | |||||||||||||||
| Total undiscounted financial liabilities | 5,492,869 | 5,807,686 | 3,104,624 | 1,065,878 | 1,637,184 | |||||||||||||||
| (c) | Market risk |
Market risk is the risk that changes in market prices, such as interest rates and foreign exchange rates will affect the Group’s income. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return on risk.
| (i) | Interest rate risk |
Interest rate risk is the risk that fair value or future cash flows of the Group’s financial instruments will fluctuate because of changes in market interest rates.
The Group’s exposure to interest rate risk arises primarily from its debt and lease liabilities. At the end of reporting period, the weighted average effective interest rates for the debt and lease liabilities were as follows:
| 2023 | 2022 | |||||||
| Fixed rates | ||||||||
| Debt | 1.5% – 6.4% | 1.5% – 6.4% | ||||||
| Lease liabilities | 1.5% – 2.5% | 1.5% – 2.5% |
Possible changes in interest rate are not expected to have a material impact on the result of the Group.
F-40
CONCORDE INTERNATIONAL GROUP LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
| 24. | Financial Instruments and Risk Management (cont.) |
| (ii) | Foreign currency risk |
The Group’s monetary assets and liabilities are exposed to foreign currency risk because of its transactions where the denominations differ from its functional currency. The Group’s foreign currency exposures arise mainly from the exchange rate movements of the Singapore Dollar (“SGD”), Malaysian Ringgit (“MYR”), Great Britain Pound(“GBP”) against the U.S. dollar (“USD). The Group manages the exchange risk by monitoring the movements in exchange rate regularly.
The Group does not enter into any forward contracts to hedge its exposure to movements in exchange rates.
If the MYR had strengthened/weakened by 2.32% and 1.61% against the SGD (the average monthly variance during the year period ended December 31, 2023 and 2022 with all other variables held constant), the post-tax profit would have been approximately $23,106 and $530 higher/lower for the years ended December 31, 2023 and 2022, as a result of net foreign exchange gains/losses on translation of net monetary assets denominated in the MYR/SGD which is not the functional currency of the respective Company’s entities.
If the GBP had strengthened/weakened by 0.52% and 1.62% against the SGD (the average monthly variance during the year period ended December 31, 2023 and 2022 with all other variables held constant), the post-tax profit would have been approximately $10,687 and $6,427 higher/lower for the years ended December 31, 2023 and 2022, as a result of net foreign exchange gains/losses on translation of net monetary assets denominated in the GBP/SGD which is not the functional currency of the respective Company’s entities.
| 25. | Subsequent events |
The Company has evaluated all events or transactions that occurred after December 31, 2023, up through June 26, 2024. During the period, the Company did not have any material subsequent events other than disclosed below.
On March 14, 2024, Concorde International Group Ltd passed resolutions to sub-divide, re-designate and reclassify the 50,000 authorized shares to 100,000 shares of par value US$0.00001 each, such that following the sub-division the Company shall be authorized to issue a maximum of 5,000,000,000 shares of a single class each with a par value of US$0.00001. 4,650,000,000 shares of US$0.00001 each was cancelled to reduce the number of shares to 350,000,000 of a single class each with a par value of US$0.00001. The Company further reclassified the shares into (i) 250,000,000 Class A Ordinary Shares with a par value of US$0.00001 each; and (ii) 100,000,000 Class B Ordinary Shares with a par value of $0.00001 each.
On March 18, 2024, the Company has further issued 20,788,886 Class B Ordinary Shares with par value of $0.00001 per share, to members of our Board, executive officers or their affiliates and existing shareholders resulting in a total of 20,888,886 Class B Ordinary Shares issued to members of our Board, executive officers or their affiliates and existing shareholders.
On April 25,2024, Concorde i-FAST USA Inc. is incorporated in the States of Texas as disclosed in Note 1.
On May 28, 2024, Concorde Security Pte Ltd secured a SGD1.5 million loan from OCBC at a preferential interest rate for general working capital and to refinance an existing loan with a higher interest rate.
On June 10, 2024, Softbank Robotics Singapore Pte Ltd subscribed to a USD1,000,000 convertible note with a 24 months maturity period with Concorde International Group Ltd. The Note shall be convertible at a conversion price that is equal to the higher of (i) the price per share paid by investors for Ordinary Shares in the Company’s initial public offering or (ii) a 15% discount to the volume weighted average price during the sixty-day period prior to the date of notice of conversion is given to the Company at Subscriber’s sole discretion after one year from the date of issuance.
On June 14, 2024, Concorde Security Pte Ltd secured a term loan of SGD500,000 from OCBC. On June 25, 2024, Concorde Security Pte Ltd entered into a call option agreement annexed to the term loan, which grants OCBC the option to subscribe for shares at a 20% discount to the IPO price or the trade sale price.
F-41
Class A Ordinary Shares
Concorde International Group Ltd
PROSPECTUS
, 2024
Through and including , 2024 (the 25th day after the date of this offering), all dealers effecting transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to a dealer’s obligation to deliver a prospectus when acting as an underwriter and with respect to an unsold allotment or subscription.
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 6. Indemnification of Directors and Officers.
We are permitted under the BVI Act, as well as our Memorandum and Articles, to indemnify any of our directors or anyone serving at our request as a director of another entity against all expenses, including legal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred in connection with legal, administrative or investigative proceedings. We may only indemnify a director if he or she acted honestly and in good faith with the view to our best interests and, in the case of criminal proceedings, the director had no reasonable cause to believe that his or her conduct was unlawful.
Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended, or the Securities Act, may be permitted to our directors, officers or persons controlling us under the foregoing provisions, we have been informed that in the opinion of the Securities and Exchange Commission, or the SEC, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.
Item 7. Recent Sales of Unregistered Securities.
Convertible Notes Financing
On June 10, 2024, Softbank Robotics Singapore Pte Ltd subscribed to a USD1,000,000 convertible note with a 24 months maturity period with the Company. The Note shall be convertible to the Company’s Class A Ordinary Shares at a conversion price that is equal to the higher of (i) the price per share paid by investors for Class A Ordinary Shares in the Company’s initial public offering or (ii) a 15% discount to the volume weighted average price during the sixty-day period prior to the date of notice of conversion is given to the Company at Subscriber’s sole discretion after one year from the date of issuance.
Class B Ordinary Shares Issuances
On March 18, 2024, we issued 20,788,886 Class B Ordinary Shares to members of our Board, executive officers or their affiliates and existing shareholders, at an issue price of $0.00001 per share, for a total consideration of $208.
On March 6, 2020, Berjaya Academy Pte. Ltd. issued 100,000 Ordinary Shares to Poh San Koh, who held them in a representative capacity for Swee Kheng Chua. On January 10, 2022, Poh San Koh transferred the 100,000 shares to Sharifah Noriati Binte Said Omar. On November 1, 2023, 100,000 shares were transferred from Sharifah Noriati Binte Said Omar to Concorde International Group Pte Ltd (Singapore) for 1 Singapore Dollar. The shares were held by Sharifah Noriati Binte Said Omar in a representative capacity for Swee Kheng Chua. On March 14, 2024, the Company re-designated and reclassified the 100,000 authorized shares to 100,000 Class B Ordinary Shares.
All of the shares were sold to members of our Board, executive officers or their affiliates and existing shareholders, in reliance upon (i) the exemption contained in Section 4(a)(2) of the Securities Act, and Rule 506(b) of Regulation D promulgated thereunder, and applicable state securities laws, or (ii) the provisions of Regulation S promulgated under the Securities Act.
The following table presents the amounts of Class B Ordinary Shares that were issued as of the date of this prospectus and aggregate purchase prices paid by the members of our Board, executive officers or their affiliates and existing shareholders. The terms of these purchases were the same for all purchasers of our Class B Ordinary Shares.
| Shareholder | Class B Common Shares | Aggregate Purchase Price Paid | ||||||
| Swee Kheng Chua(1) | 18,000,000 | $ | 180 | |||||
| Terence Wing Khai Yap(2) | 250,000 | $ | 2.5 | |||||
| Sze Yin Ong(3) | 46,296 | $ | 0.46296 | |||||
| Sharifah Noriati Binte Said Omar(4) | 185,185 | $ | 1.85185 | |||||
| Ping Ping Lim(5) | 377,775 | $ | 3.77775 | |||||
| Jia Wei Chua(6) | 14,815 | $ | 0.14815 | |||||
| Meang Fai Pang | 14,815 | $ | 0.14815 | |||||
| Weilekai Investments Pte Ltd(7) | 2,000,000 | $ | 20 | |||||
| (1) | Swee Kheng Chua, our Chief Executive Officer and Director. |
| (2) | Terence Wing Khai Yap, our Director. |
| (3) | Sze Yin Ong, our Chief Financial Officer. |
| (4) | Ms. Sharifah Noriati Binte Said Omar serves as a nominee director at Berjaya Academy Pte Ltd, our 70% owned subsidiary, as well as Concorde Security Pte Ltd (Singapore), our 96.81% owned subsidiary, and Concorde Asia Pte Ltd (Singapore), our 70% owned subsidiary. |
| (5) | Ping Ping Lim, Swee Kheng Chua’s spouse. |
| (6) | Jia Wei Chua, Swee Kheng Chua’s son. |
| (7) | Weilekai Investments Pte Ltd is a Singapore company, 50% owned by Swee Kheng Chua and 50% owned by Ping Ping Lim, Spouse of Swee Kheng Chua. Swee Kheng Chua is deemed to beneficially own the Class B Ordinary Shares owned by Weilekai Investments Pte Ltd and has sole voting and dispositive powers over its shares. Weilekai Investments Pte Ltd’s business address is 3 Ang Mo Kio Street 62 #01-49 LINK@AMK Singapore 569139. |
II-1
No underwriters were involved in these issuances. We believe that each of the above issuances was exempt from registration under the Securities Act in reliance on Regulation S under the Securities Act or pursuant to Section 4(2) of the Securities Act regarding transactions not involving a public offering.
Item 8. Exhibits and Financial Statement Schedules.
(a) Exhibits
| † | Executive Compensation Plan or Agreement |
| * | Filed herewith |
II-2
| (b) | Financial Statement Schedules |
Schedules have been omitted because the information required to be set forth therein is not applicable or is shown in the financial statements or the notes thereto.
Item 9. Undertakings.
The undersigned registrant hereby undertakes to provide to the underwriters at the closing specified in the underwriting agreement, certificates in such denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
The undersigned registrant hereby undertakes that:
| (1) | For purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective. |
| (2) | For purposes of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
II-3
Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form F-1 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Singapore on September 17, 2024.
| CONCORDE INTERNATIONAL GROUP LTD | ||
| By: | /s/ Swee Kheng Chua | |
| Name: | Swee Kheng Chua | |
| Title: | Chief Executive Officer and Chairman | |
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated. The document may be executed by signatories hereto on any number of counterparts, all of which shall constitute one and the same instrument.
| Signature | Title | Date | ||
| /s/ Swee Kheng Chua | Chief Executive Officer and Chairman | September 17, 2024 | ||
| Swee Kheng Chua | ||||
| * | Chief Financial Officer | September 17, 2024 | ||
| Sze Yin Ong | ||||
| * | Director | September 17, 2024 | ||
| Terence Wing Khai Yap |
| * By: | /s/ Swee Kheng Chua | |
| Swee Kheng Chua | ||
| Attorney-In-Fact |
II-4
SIGNATURE OF AUTHORIZED REPRESENTATIVE IN THE UNITED STATES
Pursuant to the Securities Act of 1933, the undersigned, the duly authorized representative in the United States of Concorde International Group Ltd has signed this registration statement or amendment thereto in New York on September 17, 2024.
| Cogency Global Inc. | ||
| Authorized U.S. Representative | ||
| By: | /s/ Colleen A. De Vries | |
| Name: | Colleen A. De Vries | |
| Title: | Senior Vice President | |
II-5
Exhibit 1.1
UNDERWRITING AGREEMENT
between
CONCORDE INTERNATIONAL GROUP LTD
and
R.F. LAFFERTY & CO., INC.
As representative of the several underwriters
New York, New York
[ ], 2024
R.F. Lafferty & Co., Inc.
40 Wall St.
New York, NY 10004
As Representative of the several Underwriters (as defined herein)
Ladies and Gentlemen:
CONCORDE INTERNATIONAL GROUP LTD, a British Virgin Islands business company (the “Company”), hereby confirms its agreement (this “Agreement”) with R.F. Lafferty & Co., Inc. (the “Representative”) and with the other underwriters named on Schedule 1 hereto for which the Representative is acting as representative (the Representative and such other underwriters being the “Underwriters” or, individually, an “Underwriter”) as follows:
1. PURCHASE AND SALE.
1.1.1. Purchase of Underwritten Shares. The Company agrees to issue and sell to the several Underwriters, severally and not jointly, and each Underwriter, on the basis of the representations, warranties and agreements set forth herein and subject to the terms and conditions set forth herein, agrees, severally and not jointly, to purchase from the Company an aggregate of [ ] [Class A] Ordinary Shares, par value $0.00001 per share, of the Company (such shares being the “Underwritten Shares” and such [Class A] Ordinary Shares being the “Ordinary Share”) at a price of $[ ] per share (the “Purchase Price”) from the Company the respective number of Underwritten Shares set forth opposite such Underwriter’s name in Schedule 1 hereto. The Underwritten Shares are to be offered initially to the public at the offering price set forth on the cover page of the Prospectus (as defined in Section 2.1.1 hereof).
1.1.2. Payment and Delivery. Delivery and payment for the Underwritten Shares shall be made at 10:00 a.m., New York City time, on the first (1st) Business Day (as defined below) following the effective date (the “Effective Date”) of the Registration Statement (as defined in Section 2.1.1 below) (or the second (2nd) Business Day following the Effective Date if the Registration Statement is declared effective after 4:00 p.m. New York City time) or at such earlier time as shall be agreed upon by the Representative and the Company, at the offices of Ellenoff Grossman & Schole LLP, counsel to the Underwriters, or at such other place (or remotely by facsimile or other electronic transmission) as shall be agreed upon by the Representative and the Company. The hour and date of delivery and payment for the Underwritten Shares is called the “Closing Date”. Payment for the Underwritten Shares shall be made on the Closing Date by wire transfer in Federal (same day) funds, payable to the order of the Company upon delivery to the Representative of the certificates (in form and substance satisfactory to the Representative) representing the Underwritten Shares (or through the facilities of the Depository Trust Company (“DTC”)) for the account of the Underwriters. The Underwritten Shares shall be registered in such name or names and in such authorized denominations as the Representative may request in writing at least two (2) Business Days prior to the Closing Date. The Company will permit the Representative to examine and package the Underwritten Shares for delivery, at least one (1) full Business Day prior to the Closing Date. The Company shall not be obligated to sell or deliver the Underwritten Shares except upon tender of payment by the Representative for all of the Underwritten Shares.
1
The term “Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized or required by law to remain closed; provided, however, for clarification, commercial banks shall not be deemed to be authorized or required by law to remain closed due to “stay-at-home,” “shelter-in-place,” “non-essential employee” or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority so long as the electronic funds transfer systems (including for wire transfers) of commercial banks in The City of New York generally are open for use by customers on such day.
1.2 Over-allotment Option.
1.2.1 Option Shares. For the purposes of covering any over-allotments in connection with the distribution and sale of the Underwritten Shares, the Company hereby grants to the Underwriters an option to purchase up to an additional [ ] shares of Ordinary Share (the “Option Shares”) representing fifteen percent (15%) of the Underwritten Shares sold in the offering, from the Company (the “Over-allotment Option”). The Option Shares shall be identical in all respects to the Underwritten Shares. The Option Shares shall be purchased for the account of each of the several Underwriters in the same proportion as the number of Underwritten Shares, set forth opposite such Underwriter’s name on Schedule 1 hereto, bears to the total number of Underwritten Shares (subject to adjustment by the Representative to eliminate fractions). No Option Shares shall be sold or delivered unless the Underwritten Shares previously have been, or simultaneously are, sold and delivered. The right to purchase the Option Shares, or any portion thereof, may be exercised from time to time and to the extent not previously exercised may be surrendered and terminated at any time upon notice by the Representative to the Company. The purchase price to be paid per Option Share shall be equal to the purchase price for the Underwritten Shares set forth in Section 1.1.1 hereof. The Underwritten Shares and the Option Shares are hereinafter collectively referred to as the “Public Shares”. The offering and sale of the Public Shares is hereinafter referred to as the “Offering”.
1.2.2. Exercise of Option. The Over-allotment Option granted pursuant to Section 1.2.1 hereof may be exercised by the Representative as to all (at any time) or any part (from time to time) of the Option Shares within 45 days after the Effective Date. The Underwriters shall not be under any obligation to purchase any Option Shares prior to the exercise of the Over-allotment Option. The Over-allotment Option granted hereby may be exercised by the giving of oral notice to the Company from the Representative, which must be confirmed in accordance with Section 1.2.1 hereof setting forth the number of Option Shares to be purchased and the date and time for delivery of and payment for the Option Shares (the “Option Closing Date”), which shall not be later than five (5) Business Days after the date of the notice or such other time as shall be agreed upon by the Company and the Representative, at the offices of counsel to the Underwriters or at such other place (including remotely by facsimile or other electronic transmission) as shall be agreed upon by the Company and the Representative. If such delivery and payment for the Option Shares does not occur on the Closing Date, the Option Closing Date will be as set forth in the notice. Upon exercise of the Over-allotment Option with respect to all or any portion of the Option Shares subject to the terms and conditions set forth herein, the Company shall become obligated to sell to the Underwriters the number of Option Shares specified in such notice and, subject to the terms and conditions set forth herein, the Underwriters, acting severally and not jointly, shall purchase the number of Option Shares specified in such notice.
2
1.2.3. Payment and Delivery. Payment for the Option Shares shall be made on the Option Closing Date by wire transfer in Federal (same day) funds, payable to the order of the Company upon delivery to the Representative of certificates (in form and substance satisfactory to the Representative) representing the Option Shares (or through the facilities of DTC) for the account of the Underwriters. The Option Shares shall be registered in such name or names and in such authorized denominations as the Representative may request in writing at least two (2) Business Days prior to the Option Closing Date. The Company will permit the Representative to examine and package the Option Shares for delivery, at least one (1) full Business Day prior to the Option Closing Date. The Company shall not be obligated to sell or deliver the Option Shares except upon tender of payment by the Representative for applicable Option Shares.
1.3. Representatives’ Warrants.
1.3.1. Purchase Warrants. The Company hereby agrees to issue and sell to the Representative (and/or their respective designees) on the Closing Date warrants (the “Representatives’ Warrants”) exercisable for an aggregate of [ ] Ordinary Share (or [ ] Ordinary Share if the Underwriters exercise the Over-allotment Option in full) representing 3% of the aggregate number of Ordinary Share sold in the Offering pursuant to a warrant agreement, substantially in the form attached hereto as Exhibit A (the “Representatives’ Warrant Agreement”). Each Representatives’ Warrant entitles the holder thereof to purchase the Ordinary Share at the exercise price thereof. The Representative’s Warrant shall be exercisable, in whole or in part, commencing on a date which is six (6) months after the Effective Date and expiring on the fifth anniversary of the Effective Date at an initial exercise price of $[ ] per share, which is equal to 100% of the initial public offering price of the Underwritten Shares. The Representative’s Warrant and the Ordinary Shares issuable upon exercise thereof are hereinafter referred to together as the “Representatives’ Securities”. Each of the Representative understands and agrees that there are significant restrictions pursuant to FINRA Rule 5110 on the transfer of the Representative’s Warrant and the Ordinary Shares issuable upon exercise of the Representative’s Warrant during the one hundred eighty (180) day period commencing on the Effective Date and by its acceptance thereof shall agree that it will not sell, transfer, assign, pledge or hypothecate the Representative’s Warrant, or any portion thereof, or subject the Representative’s Warrant to any hedging, short sale, derivative, put or call transaction that would result in the effective economic disposition of the Representatives’ Securities for a period of one hundred eighty (180) days following the Effective Date to anyone other than an Underwriter or a selected dealer in connection with the Offering, or an officer or partner, registered person or affiliate of the Representative or of any such Underwriter or selected dealer; and only if any such transferee agrees to the foregoing restrictions and those in the Representative’s Warrant Agreement.
1.3.2. Delivery. Delivery of the Representative’s Warrant shall be made on the Closing Date and shall be issued in the name or names and in such authorized denominations as each Representative may request.
1.4 Right of First Refusal. The Company agrees that, if, for the period ending six (6) months from the Closing Date, the Company, any of its current or future subsidiaries or any successor to the Company decides to (i) finance or refinance any indebtedness or (ii) raise funds by means of a public offering (including at-the-market facility) or a private placement or any other capital raising financing of equity, equity-linked or debt securities, in each case, the Representative (or any affiliate designated by the Representative) shall have the irrevocable right of first refusal to act as sole investment banker, sole book-runner and/or sole placement agent, at the Representative’s sole discretion, with respect to each and every such financing or refinancing on terms customary to the Representative. The Representative shall have the sole right to determine whether any other broker dealer shall have the right to participate in any such Offering and the economic terms of any such participation.
1.5 Tail Fee. The Representative shall be entitled to a cash fee equal to seven percent (7.0%) of the gross proceeds received by the Company from the sale of any equity, debt and/or equity derivative instruments to any investor actually introduced by the Representative to the Company, during the period commencing on January 10, 2024 though the Closing Date (the “Engagement Period”) in connection with any public or private financing or capital raise (each a “Tail Financing”), and such Tail Financing is consummated at any time during the Engagement Period or within the twelve (12) month period following the expiration or termination of the Engagement Period (the “Tail Period”), provided that such Tail Financing is by a party actually introduced to the Company in an offering in which the Company has direct knowledge of such party’s participation.
3
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to the Underwriters as of the Applicable Time (as defined below), as of the Closing Date and as of the Option Closing Date, if any, as follows:
2.1. Filing of Registration Statement.
2.1.1. Pursuant to the Securities Act. The Company has prepared and filed with the Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended (the “Securities Act”) and the rules and regulations of the Commission under the Securities Act (the “Securities Act Regulations”), a registration statement on Form F-1 (File No. 333-281799), including any related prospectus or prospectuses, for the registration of the Shares which registration statement and amendment or amendments have been prepared by the Company in conformity with the requirements of the Securities Act and the. Securities Act Regulations. The conditions for use of Form F-1 as set forth in the General Instructions to such Form, to register the Ordinary Shares under the Securities Act, have been satisfied.
Such registration statement, as amended at the time it became effective, including the information, if any, deemed to be part of the registration statement at the time of its effectiveness pursuant to Rule 430A or 430C under the Securities Act (“Rule 430 Information”), is referred to herein as the “Registration Statement”; and as used herein, the term “Preliminary Prospectus” means each prospectus included in such registration statement (and any amendments thereto) before effectiveness, any prospectus filed with the Commission pursuant to Rule 424(a) under the Securities Act and the prospectus included in the Registration Statement at the time of its effectiveness that omits Rule 430 Information, and the term “Prospectus” means the prospectus in the form first used (or made available upon request of purchasers pursuant to Rule 173 under the Securities Act) in connection with confirmation of sales of the Shares. If the Company has filed an abbreviated registration statement pursuant to Rule 462(b) under the Securities Act (the “Rule 462 Registration Statement”), then any reference herein to the term “Registration Statement” shall be deemed to include such Rule 462 Registration Statement. Capitalized terms used but not defined herein shall have the meanings given to such terms in the Registration Statement and the Prospectus.
At or prior to the Applicable Time (as defined below), the Company had prepared the following information (collectively with the pricing information set forth on Annex A, the “Pricing Disclosure Package”): a Preliminary Prospectus dated [ ], 2024 and each “free-writing prospectus” (as defined in Rule 405 under the Securities Act) listed on Annex A hereto.
“Applicable Time” means [8.30] p.m., New York City time, on the date of this Agreement.
“Issuer Free Writing Prospectus” means any “issuer free writing prospectus,” as defined in Rule 433 of the Securities Act Regulations (“Rule 433”), including without limitation any “free writing prospectus” (as defined in Rule 405 of the Securities Act Regulations) relating to the Public Shares that is (i) required to be filed with the Commission by the Company, (ii) a “road show for an offering that is a written communication” within the meaning of Rule 433(d)(8)(i), whether or not required to be filed with the Commission, or (iii) exempt from filing with the Commission pursuant to Rule 433(d)(5)(i) because it contains a description of the Public Shares or of the Offering that does not reflect the final terms, in each case in the form filed or required to be filed with the Commission or, if not required to be filed, in the form retained in the Company’s records pursuant to Rule 433(g).
“Issuer General Use Free Writing Prospectus” means any Issuer Free Writing Prospectus that is intended for general distribution to prospective investors (other than a “bona fide electronic road show,” as defined in Rule 433(h)(5) (the “Bona Fide Electronic Road Show”)), as evidenced by its being specified in Schedule 2-B hereto.
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“Issuer Limited Use Free Writing Prospectus” means any Issuer Free Writing Prospectus that is not an Issuer General Use Free Writing Prospectus.
“Pricing Disclosure Package” means any Issuer General Use Free Writing Prospectus issued at or prior to the Applicable Time, the Pricing Prospectus and the information included on Schedule 2-A hereto, all considered together.
2.1.2. Pursuant to the Exchange Act. The Company has filed with the Commission a Form 8-A (File No. [ ]) providing for the registration pursuant to Section 12(b) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), of the Ordinary Share; provided, however, that such registration is not for trading, but only pursuant to requirements of the Commission). The registration of the Ordinary Share under the Exchange Act has been declared effective by the Commission on or prior to the date hereof. The Company has taken no action designed to, or likely to have the effect of, terminating the registration of the Ordinary Share under the Exchange Act, nor has the Company received any notification that the Commission is contemplating terminating such registration.
2.2. Stock Exchange Listing. The Public Shares have been approved for listing on The Nasdaq Stock Market LLC (the “Exchange”), subject only to official notice of issuance, and the Company has taken no action designed to, or likely to have the effect of, delisting the Public Shares from the Exchange, nor has the Company received any notification that the Exchange is contemplating terminating such listing except as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus.
2.3. No Stop Orders, etc. Neither the Commission nor any state regulatory authority has issued any order preventing or suspending the use of the Registration Statement, any Preliminary Prospectus or the Prospectus or has instituted or, to the Company’s knowledge, threatened to institute, any proceedings with respect to such an order. The Company has complied with each request (if any) from the Commission for additional information.
2.4. Disclosures in Registration Statement.
2.4.1. Compliance with Securities Act and 10b-5 Representation.
(i) At the time of effectiveness of the Registration Statement (or at the time of any post-effective amendments thereto) and at all times subsequent thereto up to the Closing Date and the Option Closing Date, if any, the Registration Statement, the Preliminary Prospectus and the Prospectus do and will contain all material statements that are required to be stated therein in accordance with the Securities Act and the Securities Act Regulations, and did or will, in all material respects, conform to the requirements of the Securities Act and the Securities Act Regulations. Each of the Registration Statement and any post-effective amendments thereto, at the time it became effective, complied in all material respects with the requirements of the Securities Act and the Securities Act Regulations. Each Preliminary Prospectus, including the prospectus filed as part of the Registration Statement as originally filed or as part of any amendment or supplement thereto, and the Prospectus, at the time each was filed with the Commission, complied in all material respects with the requirements of the Securities Act and the Securities Act Regulations. Each Preliminary Prospectus delivered to the Underwriters for use in connection with this Offering and the Prospectus was or will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to the Commission’s EDGAR filing system (“EDGAR”), except to the extent permitted by Regulation S-T promulgated under the Securities Act (“Regulation S-T”).
(ii) Neither the Registration Statement nor any amendment thereto, at its effective time, as of the Applicable Time, at the Closing Date or at any Option Closing Date, contained, contains or will contain an untrue statement of a material fact or omitted, omits or will omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading.
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(iii) The Pricing Disclosure Package, as of the Applicable Time, at the Closing Date or at any Option Closing Date, did not, does not and will not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; and each Issuer Limited Use Free Writing Prospectus hereto does not conflict in any material respect with the information contained in the Registration Statement, any Preliminary Prospectus, the Pricing Prospectus or the Prospectus, and each such Issuer Limited Use Free Writing Prospectus, as supplemented by and taken together with the Pricing Prospectus as of the Applicable Time, did not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading; provided, however, that this representation and warranty shall not apply to statements made or statements omitted in reliance upon and in conformity with written information furnished to the Company with respect to the Underwriters by the Representative expressly for use in the Registration Statement, the Pricing Prospectus or the Prospectus or any amendment thereof or supplement thereto. The parties acknowledge and agree that such information provided by or on behalf of any Underwriter consists solely of the following disclosure contained in the “Underwriting” section of the Prospectus: the names of the Underwriters and the information under the subheadings titled “Price Stabilization, Short Positions, and Penalty Bids” and “Electronic Distribution” (the “Underwriters’ Information”).
(iv) Neither the Prospectus nor any amendment or supplement thereto, as of its issue date, at the time of any filing with the Commission pursuant to Rule 424(b), at the Closing Date or at any Option Closing Date, included, includes or will include an untrue statement of a material fact or omitted, omits or will omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that this representation and warranty shall not apply to the Underwriters’ Information.
2.4.2. Disclosure of Agreements. The agreements and documents described in the Registration Statement, the Pricing Disclosure Package and the Prospectus conform in all material respects to the descriptions thereof contained therein and there are no agreements or other documents required by the Securities Act and the Securities Act Regulations to be described in the Registration Statement, the Pricing Disclosure Package and the Prospectus or to be filed with the Commission as exhibits to the Registration Statement, that have not been so described or filed. Each agreement or other instrument (however characterized or described) to which the Company is a party or by which it is or may be bound or affected and (i) that is referred to in the Registration Statement, the Pricing Disclosure Package and the Prospectus, or (ii) is material to the Company’s business, has been duly authorized and validly executed by the Company, is in full force and effect in all material respects and is enforceable against the Company and, to the Company’s knowledge, the other parties thereto, in accordance with its terms. None of such agreements or instruments has been assigned by the Company, and neither the Company nor, to the Company’s knowledge, any other party is in default thereunder and, to the Company’s knowledge, no event has occurred that, with the lapse of time or the giving of notice, or both, would constitute a default thereunder except for such defaults that would not reasonably be expected to result in a Material Adverse Change (as defined in Section 2.5.1 below). Performance by the Company of the material provisions of such agreements or instruments will not result in a violation of any existing applicable law, rule, regulation, judgment, order or decree of any governmental or regulatory agency, authority, body, entity or court, domestic or foreign (including without limitation those of British Virgin Islands and Singapore, having jurisdiction over the Company or any of its assets or businesses (each, a “Governmental Entity”), including, without limitation, those relating to environmental laws and regulations.
2.4.3. Regulations. The disclosures in the Registration Statement, the Pricing Disclosure Package and the Prospectus concerning the effects of applicable federal, state, local and foreign laws, rules and regulations relating to the Offering and the Company’s business as currently conducted or contemplated are correct and complete in all material respects and no other such laws, rules or regulations are required under the Securities Act and the Securities Act Regulations to be disclosed in the Registration Statement, the Pricing Disclosure Package and the Prospectus which are not so disclosed.
2.4.4. No Other Distribution of Offering Materials. The Company has not, directly or indirectly, distributed and will not distribute any offering material in connection with the Offering other than any Preliminary Prospectus, any Issuer Free Writing Prospectus, the Prospectus and other materials, if any, permitted under the Securities Act and consistent with Section 3.2 below.
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2.5. Changes After Dates in Registration Statement.
2.5.1. No Material Adverse Change. Since the respective dates as of which information is given in the Registration Statement, the Pricing Disclosure Package and the Prospectus, except as otherwise specifically stated therein: (i) there has been no material adverse change in the condition, financial or otherwise, results of operations, or business, assets or prospects of the Company, nor to the Company’s knowledge, any change or development that, individually or in the aggregate, would have a material adverse effect on the condition (financial or otherwise), results of operations, business, or assets or prospects of the Company (a “Material Adverse Change”); (ii) there have been no material transactions entered into by the Company, other than as contemplated pursuant to this Agreement; and (iii) no officer or director of the Company has resigned from any position with the Company.
2.5.2. Recent Securities Transactions, etc. Subsequent to the respective dates as of which information is given in the Registration Statement, the Pricing Disclosure Package and the Prospectus, and except as may otherwise be indicated or contemplated herein or disclosed in the Registration Statement, the Pricing Disclosure Package and the Prospectus, the Company has not: (i) issued any securities or incurred any liability or obligation, direct or contingent, for borrowed money; or (ii) declared or paid any dividend or made any other distribution on or in respect to its shares.
2.6. Independent Accountants. Kreit & Chiu CPA LLP (the “Auditor”), whose reports are filed with the Commission as part of the Registration Statement, the Pricing Disclosure Package and the Prospectus, is an independent registered public accounting firm as required by the Securities Act and the Securities Act Regulations and the Public Company Accounting Oversight Board (the “PCAOB”), including the rules and regulations promulgated by such entity. To the Company’s knowledge, after reasonable inquiry, the Auditor is currently registered and in good standing with the PCAOB and the PCAOB has not made any determination with respect to the Auditor under the Holding Foreign Companies Accountable Act. The Auditor has not, during the periods covered by the financial statements included in the Registration Statement, the Pricing Disclosure Package and the Prospectus, provided to the Company any non-audit services, as such term is used in Section 10A(g) of the Exchange Act. To the Company’s knowledge, no person who has been suspended or barred from being associated with a registered public accounting firm, or who has failed to comply with any sanction pursuant to Rule 5300 promulgated by the PCAOB, has participated in or otherwise aided the preparation of, or audited, the financial statements, supporting schedules or other financial data filed with the Commission as a part of the Registration Statement, the Pricing Disclosure Package or the Prospectus.
2.7. Financial Statements, etc.
2.7.1 Financial Statements. The financial statements, including the notes thereto and supporting schedules (if any) included in the Registration Statement, the Pricing Disclosure Package and the Prospectus, fairly present the consolidated financial position, the results of operations, changes in shareholders’ equity and cash flows at the dates and for the periods to which they apply. Such financial statements have been prepared in conformity with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board applied on a consistent basis throughout the periods involved, provided that unaudited interim financial statements are subject to year-end audit adjustments that are not expected to be material in the aggregate and do not contain all of the notes required by IFRS and the supporting schedules, if any, included in the Registration Statement present fairly the information required to be stated therein. No other financial statements or supporting schedules are required to be included in the Registration Statement, the Pricing Disclosure Package or the Prospectus under the Securities Act or the Securities Act Regulations. The financial data set forth in each of the Registration Statement, the Pricing Disclosure Package and the Prospectus under the captions “Summary Consolidated Financial Information” and “Capitalization” fairly present, in all material respects, the information set forth therein on a basis consistent with that of the audited financial statements contained in the Registration Statement, the Pricing Disclosure Package and the Prospectus. The Registration Statement, the Pricing Disclosure Package and the Prospectus disclose all material off-balance sheet transactions, arrangements, obligations (including contingent obligations), and other relationships of the Company with unconsolidated entities or other persons that may have a material current or future effect on the Company’s financial condition, results of operations, liquidity, capital expenditures, capital resources, or significant components of revenues or expenses. Except as disclosed in the Registration Statement, the Pricing Disclosure Package and the Prospectus, (a) since the date of the last balance sheet included in the Registration Statement, the Pricing Disclosure Package and the Prospectus, the Company has not incurred any material liabilities or obligations, direct or contingent, or entered into any material transactions other than in the ordinary course of business, (b) the Company has not declared or paid any dividends or made any distribution of any kind with respect to its shares, (c) there has not been any change in the share of the Company or, other than in the ordinary course of business, any grants under any share compensation plan, and (d) there has not been any Material Adverse Change in the Company’s long-term or short-term debt.
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2.7.2. Company’s Accounting System. The Company makes and keeps accurate books and records and maintain a system of internal accounting controls designed, and which the Company reasonably believes is sufficient, to provide reasonable assurance that: (i) transactions are executed in accordance with management’s general or specific authorization; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with IFRS and to maintain accountability for assets; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences. The Company has not received any notice, oral or written, from the Company’s board of directors stating that it is reviewing or investigating, and neither the Company’s independent auditors nor its internal auditors have recommended that the Company’s board of directors review or investigate, (i) adding to, deleting, changing the application of, or changing the Company’s disclosure with respect to, any of the Company’s material accounting policies; or (ii) any matter which could result in a restatement of the Company’s financial statements for any annual or interim period during the current or prior three fiscal years.
2.8. Authorized Capital; Options, etc. The Company had at the date or dates indicated in the Registration Statement, the Pricing Disclosure Package and the Prospectus the duly authorized, issued and outstanding capitalization as set forth therein. Based on the assumptions stated in the Registration Statement, the Pricing Disclosure Package and the Prospectus, the Company will have on the Closing Date the adjusted capitalization set forth therein. Except as set forth in, or contemplated by, the Registration Statement, the Pricing Disclosure Package and the Prospectus, on the Effective Date, as of the Applicable Time and on the Closing Date and any Option Closing Date, there will be no share options, warrants, or other rights to purchase or otherwise acquire any authorized, but unissued Ordinary Share or any security convertible or exercisable into Ordinary Share, or any contracts or commitments to issue or sell the Ordinary Share or any such options, warrants, rights or convertible securities.
2.9. Valid Issuance of Securities, etc.
2.9.1. Outstanding Securities. All issued and outstanding securities of the Company issued prior to the transactions contemplated by this Agreement have been duly authorized and validly issued and are fully paid and non-assessable (which term when used in this Agreement means that no further sums are required to be paid by the holders thereof in connection with the issue thereof); the holders thereof have no rights of rescission or the ability to require the Company to repurchase any such securities, and are not subject to personal liability solely by reason of being such holders; and none of such securities were issued in violation of the preemptive rights, rights of first refusal or rights of participation of any holders of any security of the Company or similar contractual rights granted by the Company. The Public Shares conform in all material respects to all statements relating thereto contained in the Registration Statement, the Pricing Disclosure Package and the Prospectus. The offers and sales of the issued and outstanding Ordinary Share, options, warrants and other outstanding securities convertible into or exercisable for such shares, were at all relevant times either registered under the Securities Act and the applicable state securities or “blue sky” laws or, based in part on the representations and warranties of the purchasers of such shares, exempt from such registration requirements. The description of the Company’s share option, share bonus and other related plans or arrangements, and options and/or other rights granted thereunder, as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, accurately and fairly present, in all material respects, the information required to be shown with respect to such plans, arrangements, options and rights.
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2.9.2. Securities Sold Pursuant to this Agreement. The Public Shares have been duly authorized for issuance and sale and, when issued and paid for, will be validly issued, fully paid and non-assessable; the holders thereof are not and will not be subject to personal liability solely by reason of being such holders; the Public Shares are and will be free from all pre-emptive rights of any holders of any security of the Company, or similar contractual rights granted by the Company; and all corporate action required to be taken for the authorization, issuance and sale of the Public Shares has been duly and validly taken. The Public Shares conform in all material respects to all statements with respect thereto contained in the Registration Statement, the Pricing Disclosure Package and the Prospectus.
2.10. Registration Rights of Third Parties. Except as set forth in the Registration Statement, the Pricing Disclosure Package and the Prospectus, no holders of any securities of the Company or any options, warrants, rights or other securities exercisable for or convertible or exchangeable into securities of the Company have the right to require the Company to register any such securities of the Company under the Securities Act or to include any such securities in the Registration Statement or any other registration statement to be filed by the Company.
2.11. Validity and Binding Effect of Agreements. The execution, delivery and performance of this Agreement, the Representative’s Warrant Agreement, the Representative’s Warrant and each Lock-Up Agreement (as defined in Section 2.24) have been duly and validly authorized by the Company, and, when executed and delivered, will constitute the legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their respective terms; provided, however, that the enforceability thereof may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium, and similar laws relating to or affecting creditors’ rights generally and by general principles of equity (regardless of whether such enforceability is considered a proceeding in equity or at law). Each of this Agreement, the Representative’s Warrant Agreement, the Representative’s Warrant and each Lock-Up Agreement conforms in all material respects to the description thereof contained in the Registration Statement, the Pricing Disclosure Package and the Prospectus.
2.12. No Conflicts, etc. The execution, delivery and performance by the Company of this Agreement, the Representative’s Warrant Agreement, the Representative’s Warrant and each Lock-Up Agreement and all documents ancillary thereto, the consummation by the Company of the transactions herein and therein contemplated and the compliance by the Company with the terms hereof and thereof do not and will not, with or without the giving of notice or the lapse of time or both: (i) result in any violation of the provisions of the memorandum and articles of association (as amended or restated from time to time and as in effect on the date hereof) of the Company; (ii) result in a breach of, or conflict with any of the terms and provisions of, or constitute a default under, or result in the creation, modification, termination or imposition of any lien, charge or encumbrance upon any property or assets of the Company pursuant to the terms of any indenture, mortgage, deed of trust, loan agreement or any other agreement or instrument to which the Company is a party or as to which any property of the Company is a party except breaches, conflicts or defaults that would not reasonably be expected to result in a Material Adverse Change, or (iii) violate any existing applicable law, rule, regulation, judgment, order or decree of any Governmental Entity as of the date hereof, except, in the case of (ii) or (iii), for those breaches, conflicts, defaults or violations which (individually or in the aggregate) would not have or would not reasonably be expected to result in a Material Adverse Change.
2.13. No Defaults; Violations. Except as set forth in the Registration Statement, the Pricing Disclosure Package and the Prospectus, no default exists in the due performance and observance of any term, covenant or condition of any license, contract, indenture, mortgage, deed of trust, note, loan or credit agreement, or any other agreement or instrument evidencing an obligation for borrowed money, or any other agreement or instrument to which the Company is a party or by which the Company may be bound or to which any of the properties or assets of the Company is subject except, in each case, for any such default that would not be reasonably expected to result in a Material Adverse Change. The Company is not in violation of any franchise, license, permit, applicable law, rule, regulation, judgment or decree of any Governmental Entity, except for such violations that, individually or in the aggregate, would not have or would not reasonably be expected to result in a Material Adverse Change.
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2.14. Corporate Power; Licenses; Consents.
2.14.1. Conduct of Business. Except as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, the Company has all requisite corporate power and authority, and has all requisite consents, authorizations, approvals, licenses, certificates, clearances, permits and orders and supplements and amendments thereto (collectively, “Authorizations”) of and from all Governmental Entities that it needs as of the date hereof to conduct its business purpose as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, except, in each case, where the failure to have such Authorizations (individually or in the aggregate) would not have or would not reasonably be expected to have a Material Adverse Change.
2.14.2. Transactions Contemplated Herein. The Company has all corporate power and authority to enter into this Agreement, the Representative’s Warrant Agreement, the Representative’s Warrant and each Lock-Up Agreement and to carry out the provisions and conditions hereof and thereof, and all Authorizations required in connection therewith have been obtained. No Authorization of, and no filing with, any Governmental Entity, the Exchange or another body is required for the valid issuance, sale and delivery of the Public Shares and the consummation of the transactions and agreements contemplated by this Agreement, the Representative’s Warrant Agreement, the Representative’s Warrant or the Lock-Up Agreements and as contemplated by the Registration Statement, the Pricing Disclosure Package and the Prospectus, except with respect to applicable federal and state securities or blue-sky laws, the rules of the Exchange and the rules and regulations of the Financial Industry Regulatory Authority, Inc. (“FINRA”).
2.15. D&O Questionnaires. All information contained in the questionnaires (the “Questionnaires”) completed by each of the Company’s directors and officers prior to the Offering, as may be updated to the time of the Offering (the “Insiders”) and as may be supplemented by all information concerning the Insiders described in the Registration Statement, the Pricing Disclosure Package and the Prospectus provided to the Representative and to counsel to the Underwriters, is, to the knowledge of the Company, true and correct and the Company has not become aware of any information which would cause the information disclosed in the Questionnaires to become inaccurate, incorrect or incomplete.
2.16. Litigation; Governmental Proceedings. There is no action, suit, proceeding, inquiry, arbitration, investigation, litigation or governmental proceeding pending involving the Company or, to the Company’s knowledge, threatened against the Company, or, to the Company’s knowledge, any executive officer or director which has not been disclosed in the Registration Statement, the Pricing Disclosure Package and the Prospectus, or in connection with the Company’s listing application for the listing of the Public Shares on the Exchange, and is required to be disclosed therein.
2.17. Due Incorporation; Valid Existence. The Company has been duly incorporated, validly existing and in good standing as a business company under the law of the British Virgin Islands and has the corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, and to enter into and perform its obligations under this Agreement, the Representative’s Warrant Agreement, the Representative’s Warrant and each Lock-Up Agreement. The Company is duly qualified as a foreign corporation to transact business and is in good standing, where applicable, in each other jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure to so qualify or be in good standing would not have or would not reasonably be expected to result in a Material Adverse Change.
2.18. Insurance. The Company carries or is entitled to the benefits of insurance (including, without limitation, as to directors’ and officers’ insurance coverage), with reputable insurers, in such amounts and covering such risks as is customary for companies engaged in similar business which the Company believes are adequate to protect the Company and its business, and, to the Company’s knowledge, all such insurance is in full force and effect. The Company (i) has not received written notice from any insurer or agent of such insurer that capital improvements or other expenditures are required or necessary to be made in order to continue such insurance or (ii) has no reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage at reasonable cost from similar insurers as may be necessary to continue its business.
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2.19. Transactions Affecting Disclosure to FINRA.
2.19.1. Finder’s Fees. Except as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, there are no claims, payments, arrangements, agreements or understandings relating to the payment of a finder’s, consulting or origination fee by the Company or, to the Company’s knowledge, by any Insider with respect to the sale of the Public Shares hereunder or any other arrangements, agreements or understandings of the Company or, to the Company’s knowledge, any of its shareholders that may affect the Underwriters’ compensation, as determined by FINRA.
2.19.2. Payments Within Twelve (12) Months. Except as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, the Company has not made any direct or indirect payments in connection with the Offering (in cash, securities or otherwise) to: (i) any person, as a finder’s fee, consulting fee or otherwise, in consideration of such person raising capital for the Company or introducing to the Company persons who raised or provided capital to the Company; (ii) any FINRA member participating in the offering as defined in FINRA Rule 5110 (“Participating FINRA Member”); or (iii) any person or entity that has any direct or indirect affiliation or association with any Participating FINRA member, within the twelve (12) months prior to the Effective Date, other than the payment to the Underwriters as provided hereunder in connection with the Offering.
2.19.3. Use of Proceeds. None of the net proceeds of the Offering will be paid by the Company to any participating FINRA member or its affiliates, except as specifically authorized herein.
2.19.4. FINRA Affiliation. There is no (i) officer or director of the Company, (ii) beneficial owner of 10% or more of any class of the Company’s securities or (iii) beneficial owner of the Company’s unregistered equity securities which were acquired during the 180-day period immediately preceding the filing of the Registration Statement that is an affiliate or associated person of a FINRA member participating in the Offering (as determined in accordance with the rules and regulations of FINRA).
2.19.5. Information. All information provided by the Company in its FINRA questionnaire to counsel to the Underwriters specifically for use by them in connection with its Public Offering System filings (and related disclosure) with FINRA is true, correct and complete in all material respects.
2.20. Foreign Corrupt Practices Act. None of the Company or, to the Company’s knowledge, any director, officer, agent, employee or affiliate of the Company or any other person acting on behalf of, and with authority from, the Company, has, directly or indirectly, given or agreed to give any money, gift or similar benefit (other than legal price concessions to customers in the ordinary course of business) to any customer, supplier, employee or agent of a customer or supplier, or official or employee of any Governmental Entity (domestic or foreign) or any political party or candidate for office (domestic or foreign) or other person who was, is, or may be in a position to help or hinder the business of the Company (or assist it in connection with any actual or proposed transaction) that (i) might subject the Company to any damage or penalty in any civil, criminal or governmental litigation or proceeding, (ii) if not given in the past, might have had a Material Adverse Change or (iii) if not continued in the future, might adversely affect the assets, business, operations or prospects of the Company. The Company has taken reasonable steps to ensure that its accounting controls and procedures are sufficient to cause the Company to comply in all material respects with the Foreign Corrupt Practices Act of 1977, as amended.
2.21. Compliance with Sanction Laws. None of the Company or, to the Company’s knowledge, any director, officer, agent, employee or affiliate of the Company or any other person acting on behalf of, and with authority from, the Company, is currently subject to any sanctions administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury (“OFAC”), and the Company will not, directly or indirectly, use the proceeds of the Offering hereunder, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity, for the purpose of financing the activities of any person currently subject to any sanctions administered by OFAC.
2.22. Money Laundering Laws. The operations of the Company are and have been conducted at all times in compliance in all material respects with applicable financial recordkeeping and reporting requirements of the U.S. Currency and Foreign Transactions Reporting Act of 1970, as amended, including the U.S. Money Laundering Control Act of 1986, as amended, the rules and regulations thereunder, the rules and regulations thereunder, the U.K. Proceeds of Crime Act 2002, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 and Sanctions and Anti-Money Laundering Act 2018 and any related or similar rules, regulations or guidelines, issued, administered or enforced by any Governmental Entity (collectively, “Money Laundering Laws”); and no action, suit or proceeding by or before any Governmental Entity involving the Company with respect to Money Laundering Laws is pending or, to the knowledge of the Company, threatened.
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2.23. Officers’ Certificate. Any certificate signed by any duly authorized officer of the Company and delivered to the Representative or to counsel to the Underwriters on the Closing Date or on the Option Closing Date shall be deemed a representation and warranty by the Company to the Underwriters as to the matters covered thereby.
2.24. Lock-Up Agreements. Schedule 3 hereto contains a complete and accurate list of the Company’s officers, directors and any other holder(s) of the issued and outstanding Ordinary Shares of the effective date of the Registration Statement (and all holders of securities exercisable for or convertible into Ordinary Shares) (collectively, the “Lock-Up Parties”). The Company has requested that each of the Lock-Up Parties deliver to the Representative an executed Lock-Up Agreement substantially in the form of Exhibit B hereto (each, a “Lock-Up Agreement”), on or prior to the date of this Agreement.
2.25. Subsidiaries. Each of the Company’s direct and indirect subsidiaries (each, a “Subsidiary” and, collectively, the “Subsidiaries”) has been identified in the Registration Statement hereto. Each of the Subsidiaries has been duly incorporated, is validly existing as an entity in good standing under the laws of the jurisdiction of its incorporation, has the corporate power and authority to own its property and to conduct its business as described in the Pricing Disclosure Package and the Prospectus; all of the outstanding equity interests of each Subsidiary have been duly and validly authorized and issued, are owned directly or indirectly by the Company, are paid according to the applicable laws and the articles of association and non-assessable and, are free and clear of all liens, encumbrances, equities or claims. None of the outstanding share capital or equity interest in any Subsidiary was issued in violation of preemptive or similar rights of any security holder of such Subsidiary. All of the constitutive or organizational documents of each of the Subsidiaries comply with the requirements of applicable laws of its jurisdiction of incorporation or organization and are in full force and effect. Apart from the Subsidiaries, the Company has no direct or indirect subsidiaries or any other company over which it has direct or indirect effective control.
2.26. Related Party Transactions. There are no business relationships or related party transactions involving the Company or any other person required to be described in the Registration Statement, the Pricing Disclosure Package and the Prospectus that have not been described as required under the Securities Act and the Securities Act Regulations.
2.27. Board of Directors. The board of directors of the Company is comprised of the persons set forth under the heading of the Pricing Prospectus and the Prospectus captioned “Management”. The qualifications of the persons serving as board members, the overall composition of the board and the members of required committees of the board of directors comply with applicable provisions of the Exchange Act and the rules and regulations of the Commission promulgated thereunder (the “Exchange Act Regulations”), the Sarbanes-Oxley Act of 2002 and the rules promulgated thereunder (the “Sarbanes-Oxley Act”) and the listing rules of the Exchange. At least one member of the Audit Committee of the board of directors of the Company qualifies as an “audit committee financial expert,” as such term is defined in Item 407 of Regulation S-K and the listing rules of the Exchange. In addition, at least a majority of the persons serving on the board of directors qualify as “independent” as defined under the listing rules of the Exchange.
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2.28. Sarbanes-Oxley Compliance.
2.28.1. Disclosure Controls. The Company has developed and currently maintains disclosure controls and procedures that comply in all material respects with Rule 13a-15 or 15d-15 under the Exchange Act Regulations, and except as disclosed in the Registration Statement, the Pricing Disclosure Package and the Prospectus, such controls and procedures are effective to ensure that all material information concerning the Company will be made known on a timely basis to the individuals responsible for the preparation of the Company’s Exchange Act filings and other public disclosure documents.
2.28.2. Compliance. The Company is and at the Applicable Time and on the Closing Date will be, in material compliance with the provisions of the Sarbanes-Oxley Act applicable to it, and has implemented or will implement such programs and has taken reasonable steps to ensure the Company’s future compliance (not later than the relevant statutory and regulatory deadlines therefor) with all of the material provisions of the Sarbanes-Oxley Act.
2.29. Disclosure Controls and Procedures; Deficiencies in or Changes to Internal Control Over Financial Reporting. The Company is in the process of establishing systems of “internal control over financial reporting” (as defined under Rules 13a-15 and 15d-15 under the Exchange Act Regulations) and by the time of filing its initial periodic report under the Exchange Act will comply in all material respects with the requirements of the Exchange Act and will have been designed by, or under the supervision of, their respective principal executive and principal financial officers, or persons performing similar functions, which (i) enable the Company to comply with the applicable international rules for companies; (ii) are designed to ensure that material information relating to the Company is made known to the Company’s principal executive officer and its principal financial officer by others within those entities; and (iii) are effective in all material respects to perform the functions for which they were established. Since the end of the Company’s most recent audited fiscal year, there have been no significant deficiencies or material weakness in the Company’s internal control over financial reporting (whether or not remediated) and no change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting. The Company is not aware of any change in its internal control over financial reporting that has occurred during its most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting. Except as disclosed in the Registration Statement, the Pricing Disclosure Package and the Prospectus, the Company is not aware of any material weaknesses in its internal controls. The Company’s auditors and the Audit Committee of the board of directors of the Company have been advised of: (i) all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are known to the Company’s management and that have adversely affected or are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and (ii) any fraud known to the Company’s management, whether or not material, that involves management or other employees who have a significant role in the Company’s internal controls over financial reporting.
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2.30. No Investment Company Status. The Company is not and, after giving effect to the Offering and the application of the proceeds thereof as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, will not be, required to register as an “investment company”, as defined in and pursuant to the Investment Company Act of 1940, as amended.
2.31. No Labor Disputes. No labor dispute with the employees of the Company exists or, to the knowledge of the Company, is imminent. The Company is not aware that any officer, key employee or significant group of employees of the Company plans to terminate employment with the Company.
2.32. Intellectual Property Rights. The Company owns or possesses or has valid rights to use all patents, patent applications, trademarks, service marks, trade names, trademark registrations, service mark registrations, copyrights, licenses, inventions, trade secrets and similar rights (“Intellectual Property Rights”) for the conduct of the business of the Company as currently carried on and as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus. To the knowledge of the Company, no action or use by the Company is necessary for the conduct of its business as currently carried on and as described in the Registration Statement and the Prospectus will involve or give rise to any infringement of, or license or similar fees for, any Intellectual Property Rights of others. The Company has not received any notice alleging any such infringement, fee or conflict with asserted Intellectual Property Rights of others. Except as would not reasonably be expected to result, individually or in the aggregate, in a Material Adverse Change: (A) to the knowledge of the Company, there is no infringement, misappropriation or violation by third parties of any of the Intellectual Property Rights owned by the Company; (B) there is no pending or, to the knowledge of the Company, threatened action, suit, proceeding or claim by others challenging the rights of the Company in or to any such Intellectual Property Rights, and the Company is unaware of any facts which would form a reasonable basis for any such claim, that would, individually or in the aggregate, together with any other claims in this Section 2.32, reasonably be expected to result in a Material Adverse Change; (C) the Intellectual Property Rights owned by the Company and, to the knowledge of the Company, the Intellectual Property Rights licensed to the Company have not been adjudged by a court of competent jurisdiction invalid or unenforceable, in whole or in part, and there is no pending or, to the Company’s knowledge, threatened action, suit, proceeding or claim by others challenging the validity or scope of any such Intellectual Property Rights, and the Company is unaware of any facts which would form a reasonable basis for any such claim that would, individually or in the aggregate, together with any other claims in this Section 2.32, reasonably be expected to result in a Material Adverse Change; (D) there is no pending or, to the Company’s knowledge, threatened action, suit, proceeding or claim by others that the Company infringes, misappropriates or otherwise violates any Intellectual Property Rights or other proprietary rights of others, the Company has not received any written notice of such claim and the Company is unaware of any other facts which would form a reasonable basis for any such claim that would, individually or in the aggregate, together with any other claims in this Section 2.32, reasonably be expected to result in a Material Adverse Change; and (E) to the Company’s knowledge, no employee of the Company is in or has ever been in violation in any material respect of any term of any employment contract, patent disclosure agreement, invention assignment agreement, non-competition agreement, non-solicitation agreement, nondisclosure agreement or any restrictive covenant to or with a former employer where the basis of such violation relates to such employee’s employment with the Company, or actions undertaken by the employee while employed with the Company and could reasonably be expected to result, individually or in the aggregate, in a Material Adverse Change. To the Company’s knowledge, all material technical information developed by and belonging to the Company which has not been patented has been kept confidential. For all Company Intellectual Property, the Company and its representatives have met their duty of candor as required under 37 C.F.R. § 1.56 and complied with analogous law outside the United States requiring disclosure of references. To the Company’s knowledge, the Company has taken all actions reasonably necessary to protect, and where necessary register, the copyrights, trademarks, patent rights and trade secrets owned by or licensed exclusively to the Company (solely where the Company has the right to take such actions as to in-licensed intellectual property rights). Each current and former employee and individual contractor of the Company who is or was involved in the creation or development of any Company Intellectual Property has executed and delivered and, to the Company’s knowledge, is in compliance with an employment or consulting agreement containing nondisclosure, assignment and non-solicitation provisions, except as could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Change. The Company is not a party to or bound by any options, licenses or agreements with respect to the Intellectual Property Rights of any other person or entity that are required to be set forth in the Registration Statement, the Pricing Disclosure Package and the Prospectus and are not described therein. The Registration Statement, the Pricing Disclosure Package and the Prospectus contain in all material respects the same description of the matters set forth in the preceding sentence. None of the technology employed by the Company has been obtained or is being used by the Company in violation of any contractual obligation binding on the Company or, to the Company’s knowledge, any of its officers, directors or employees, or otherwise in violation of the rights of any persons.
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2.33. Taxes. Each of the Company and its Subsidiaries has (i) filed all returns (as hereinafter defined) required to be filed with taxing authorities prior to the date hereof or has duly obtained extensions of time for the filing thereof and (ii) has paid all taxes (as hereinafter defined) shown as due on such returns that were filed and has paid all taxes imposed on or assessed against the Company or such respective Subsidiary except as currently being contested in good faith. The provisions for taxes payable, if any, shown on the financial statements filed with or as part of the Registration Statement are sufficient for all accrued and unpaid taxes, whether or not disputed, and for all periods to and including the dates of such consolidated financial statements. Except as disclosed in writing to the Underwriters, (i) no issues have been raised (and are currently pending) by any taxing authority in connection with any of the returns or taxes asserted as due from the Company or its Subsidiaries, and (ii) no waivers of statutes of limitation with respect to the returns or collection of taxes have been given by or requested from the Company or its Subsidiaries. To the Company’s knowledge, there are no tax liens against the assets, properties or business of the Company. The term “taxes” means all federal, state, local, foreign and other net income, gross income, gross receipts, sales, use, ad valorem, transfer, franchise, profits, license, lease, service, service use, withholding, payroll, employment, excise, severance, stamp, occupation, premium, property, windfall profits, customs, duties or other taxes, fees, assessments or charges of any kind whatever, together with any interest and any penalties, additions to tax or additional amounts with respect thereto. The term “returns” means all returns, declarations, reports, statements and other documents required to be filed in respect to taxes.
2.34. Compliance with Laws. The Company (A) is and at all times has been in compliance with all statutes, rules, or regulations applicable to the business of the Company as currently conducted (“Applicable Laws”), except as could not, individually or in the aggregate, would not or would not reasonably be expected to result in a Material Adverse Change; (B) has not received any warning letter, untitled letter or other correspondence or notice from any Governmental Entity alleging or asserting noncompliance with any Applicable Laws or any Authorizations; (C) possesses all Authorizations and such Authorizations are valid and in full force and effect and is not in violation of any term of any such Authorizations, except where the invalidity of such Authorizations or the failure of such Authorizations to be in full force and effect or the violation of any term of such Authorizations would not or would not reasonably be expected to result in a Material Adverse Change; (D) has not received notice of any claim, action, suit, proceeding, hearing, enforcement, investigation, arbitration or other action from any Governmental Entity or third party alleging that any activity conducted by the Company is in violation of any Applicable Laws or Authorizations and has no knowledge that any such Governmental Entity or third party is considering any such claim, litigation, arbitration, action, suit, investigation or proceeding; (E) has not received notice that any Governmental Entity has taken, is taking or intends to take action to limit, suspend, modify or revoke any Authorizations and has no knowledge that any such Governmental Entity is considering such action; and (F) has filed, obtained, maintained or submitted all reports, documents, forms, notices, applications, records, claims, submissions and supplements or amendments as required by any Applicable Laws or Authorizations and that all such reports, documents, forms, notices, applications, records, claims, submissions and supplements or amendments were complete and correct on the date filed (or were corrected or supplemented by a subsequent submission), except where the failure to be so in compliance, individually or in the aggregate, would not or would not reasonably be expected to result in a Material Adverse Change.
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2.35. Environmental Laws. The Company is in compliance with all foreign, federal, state and local rules, laws and regulations relating to the use, treatment, storage and disposal of hazardous or toxic substances or waste and protection of health and safety or the environment which are applicable to their businesses (“Environmental Laws”), except where the failure to comply would not, singularly or in the aggregate, result in a Material Adverse Change. There has been no storage, generation, transportation, handling, treatment, disposal, discharge, emission, or other release of any kind of toxic or other wastes or other hazardous substances by, due to, or caused by the Company (or, to the Company’s knowledge, any other entity for whose acts or omissions the Company is or may otherwise be liable) upon any of the property now or previously owned or leased by the Company, or upon any other property, in violation of any law, statute, ordinance, rule, regulation, order, judgment, decree or permit or which would, under any law, statute, ordinance, rule (including rule of common law), regulation, order, judgment, decree or permit, give rise to any liability, except for any violation or liability which would not have, singularly or in the aggregate with all such violations and liabilities, a Material Adverse Change; and there has been no disposal, discharge, emission or other release of any kind onto such property or into the environment surrounding such property of any toxic or other wastes or other hazardous substances with respect to which the Company has knowledge, except for any such disposal, discharge, emission, or other release of any kind which would not have, singularly or in the aggregate with all such discharges and other releases, a Material Adverse Change. In the ordinary course of business, the Company conducts periodic reviews of the effect of Environmental Laws on its business and assets, in the course of which they identify and evaluate associated costs and liabilities (including, without limitation, any capital or operating expenditures required for clean-up, closure of properties or compliance with Environmental Laws or governmental permits issued thereunder, any related constraints on operating activities and any potential liabilities to third parties). On the basis of such reviews, the Company has reasonably concluded that such associated costs and liabilities would not have, singularly or in the aggregate, a Material Adverse Change.
2.36. Title to Property. Except as set forth in the Registration Statement, the Pricing Disclosure Package and the Prospectus, the Company has good and marketable title in fee simple to, or have valid rights to lease or otherwise use, all items of real or personal property which are material to the business of the Company, in each case free and clear of all liens, encumbrances, security interests, claims and defects that do not, singly or in the aggregate, materially affect the value of such property and do not interfere with the use made and proposed to be made of such property by the Company; and all of the leases and subleases material to the business of the Company, and under which the Company holds properties described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, are, to the Company’s knowledge, in full force and effect, and the Company has not received any notice of any material claim of any sort that has been asserted by anyone adverse to the rights of the Company under any of the leases or subleases mentioned above, or affecting or questioning the rights of the Company to the continued possession of the leased or subleased premises under any such lease or sublease.
2.37. Contracts Affecting Capital. There are no transactions, arrangements or other relationships between and/or among the Company, any of its affiliates (as such term is defined in Rule 405 under the Securities Act) and any unconsolidated entity, including, but not limited to, any structured finance, special purpose or limited purpose entity that could reasonably be expected to materially affect the Company’s liquidity or the availability of or requirements for their capital resources required to be described or incorporated by reference in the Registration Statement, the Pricing Disclosure Package and the Prospectus which have not been described or incorporated by reference as required.
2.38. Loans to Directors or Officers. There are no outstanding loans, advances (except normal advances for business expenses in the ordinary course of business) or guarantees or indebtedness by the Company to or for the benefit of any of the officers or directors of the Company or any of their respective family members, except as disclosed in the Registration Statement, the Pricing Disclosure Package and the Prospectus.
2.39. Ineligible Issuer. At the time of filing the Registration Statement and any post-effective amendment thereto, at the Effective Date and at the time of any amendment thereto, the Company was not and is not an “ineligible issuer” as defined in Rule 405, without taking account of any determination by the Commission pursuant to paragraph (2) of the definition of “ineligible issuer” in Rule 405 that it is not necessary under the circumstances that the Company be considered an ineligible issuer.
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2.40. Emerging Growth Company Status. From the time of initial confidential submission of the Registration Statement to the Commission (or, if earlier, the first date on which the Company engaged in oral or written communications within the meaning of Section 5(d) of the Securities Act) through the date hereof, the Company has been and is an “emerging growth company,” as defined in Section 2(a) of the Securities Act (an “Emerging Growth Company”). The Company will promptly notify the Representative if the Company ceases to be an Emerging Growth Company at any time prior to the later of (i) the time when a prospectus relating to the Public Shares is not required by the Securities Act to be delivered (whether physically or through compliance with Rule 172 under the Securities Act or any similar rule) and (ii) the expiration of the Lock-Up Period (as defined herein).
2.41. Free-Writing Prospectus and Testing-the-Waters. The Company has not made any offer relating to the Public Securities that would constitute an issuer free writing prospectus, as defined in Rule 433 under the Securities Act, or that would otherwise constitute a “free writing prospectus” as defined in Rule 405. The Company: (a) has not engaged in any Testing-the-Waters Communication (as defined herein) other than with the consent of the Representative with entities that are “qualified institutional buyers” within the meaning of Rule 144A under the Securities Act or institutions that are “accredited investors” within the meaning of Rule 501 under the Securities Act and (b) has not authorized anyone to engage in Testing-the-Waters Communications other than its officers and the Representative and individuals engaged by either of the Representative. The Company has not distributed any written Testing-the-Waters Communications. “Testing-the-Waters Communication” means any oral or written communication with potential investors undertaken in reliance on Section 5(d) of the Securities Act or Rule 163B thereunder.
2.42. Industry Data. The statistical and market-related data included in each of the Registration Statement, the Pricing Disclosure Package and the Prospectus are based on or derived from sources that the Company reasonably and in good faith believes are reliable and accurate or represent the Company’s good faith estimates that are made on the basis of data derived from such sources.
2.43. Electronic Road Show. The Company has made available a bona fide electronic road show in compliance with Rule 433(d)(8)(ii) of the Securities Act Regulations such that no filing of any “road show” (as defined in Rule 433(h) of the Securities Act Regulations) is required in connection with the Offering.
2.44. Margin Securities. The Company owns no “margin securities” as that term is defined in Regulation U of the Board of Governors of the Federal Reserve System (the “Federal Reserve Board”), and none of the proceeds of Offering will be used, directly or indirectly, for the purpose of purchasing or carrying any margin security, for the purpose of reducing or retiring any indebtedness which was originally incurred to purchase or carry any margin security or for any other purpose which might cause any of the Public Shares to be considered a “purpose credit” within the meanings of Regulation T, U or X of the Federal Reserve Board.
2.45. Forward-Looking Statements. No forward-looking statement (within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act) contained in the Registration Statement, the Pricing Disclosure Package or the Prospectus has been made or reaffirmed without a reasonable basis or has been disclosed other than in good faith.
2.46. Integration. Neither the Company, nor any of its affiliates, nor any person acting on its or their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause the Offering to be integrated with prior offerings by the Company for purposes of the Securities Act that would require the registration of any such securities under the Securities Act.
2.47. Confidentiality and Non-Competition. To the Company’s knowledge, no director, officer, key employee or consultant of the Company is subject to any confidentiality, non-disclosure, non-competition agreement or non-solicitation agreement with any employer (other than the Company) or prior employer that could materially affect his or her ability to be and act in his or her respective capacity of the Company or be expected to result in a Material Adverse Change.
2.48. Corporate Records. The minute books of the Company have been made available to the Representative and counsel to the Underwriters and such books (i) contain minutes of all material meetings and actions of the Board of Directors (including each board committee) and shareholders of the Company, and (ii) reflect all material transactions referred to in such minutes.
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2.49. Diligence Materials. The Company has provided to the Representative and counsel to the Underwriters all materials required or necessary to respond in all material respects to the diligence request submitted to the Company or Company Counsel (as defined in Section 4.2.1) by the Representative.
2.50. Stabilization. Neither the Company nor, to its knowledge, any of its employees, directors or shareholders (without the consent of the Representative) has taken, directly or indirectly, any action designed to or that has constituted or that might reasonably be expected to cause or result in, under Regulation M under the Exchange Act, or otherwise, stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Public Shares.
2.51. Non-Contravention of Existing Instruments; No Further Authorizations or Approvals Required. The Company is not (i) in violation of its memorandum and articles of association, or (ii) in default (or, with the giving of notice or lapse of time, would be in default) (“Default”) under any indenture, loan, credit agreement, note, lease, license agreement, contract, franchise or other instrument (including, without limitation, any pledge agreement, security agreement, mortgage or other instrument or agreement evidencing, guaranteeing, securing or relating to indebtedness) to which the Company is a party or by which it may be bound, or to which any of its properties or assets are subject (each, an “Existing Instrument”) by virtue of the Company’s entry into this Agreement, except for such Defaults as would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Change. The Company’s execution, delivery and performance of this Agreement, the Representative’s Warrant Agreement, the Representative’s Warrant and each Lock-Up Agreement and the consummation of the transactions contemplated hereby and thereby and by the Registration Statement, the Pricing Disclosure Package or the Prospectus and the issuance and sale of the Public Shares (including the use of proceeds from the sale thereof as described in the Registration Statement, the Pricing Disclosure Package or the Prospectus) (i) have been duly authorized by all necessary corporate action and will not result in any violation of the provisions of the memorandum and articles of association of the Company; (ii) will not conflict with or constitute a breach of, or Default or a Debt Repayment Triggering Event (as defined below) under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company pursuant to, or require the consent of any other party to, any Existing Instrument, and (iii) will not result in any violation of any law, administrative regulation or administrative or court decree applicable to the Company, except in the case of clauses (ii) and (iii), as would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Change. No consent, approval, authorization or other order of, or registration or filing with, any court or other governmental or regulatory authority or agency, is required for the Company’s execution, delivery and performance of this Agreement, the Representative’s Warrant Agreement, the Representative’s Warrant and each Lock-Up Agreement and consummation of the transactions contemplated hereby and thereby and by the Registration Statement, the Pricing Disclosure Package or the Prospectus, except such as have been obtained or made by the Company and are in full force and effect under the Securities Act and such as may be required under applicable state securities or blue sky laws or FINRA or the Exchange. As used herein, a “Debt Repayment Triggering Event” means any event or condition which gives, or with the giving of notice or lapse of time would give, the holder of any note, debenture or other evidence of indebtedness (or any person acting on such holder’s behalf) the right to require the purchase redemption or repayment of all or a portion of such indebtedness by the Company.
3. COVENANTS OF THE COMPANY.
The Company covenants and agrees as follows:
3.1. Amendments to Registration Statement. The Company shall deliver to the Representative, at least one (1) Business Day (or such shorter time mutually agreed by the parties hereto) prior to filing, any amendment or supplement to the Registration Statement or Prospectus proposed to be filed after the Effective Date and not file any such amendment or supplement to which the Representative shall reasonably object in writing.
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3.2. Federal Securities Laws.
3.2.1. Compliance. The Company, subject to Section 3.2.2, shall comply with the requirements of Rule 430A of the Securities Act Regulations, and will notify the Representative promptly, and confirm the notice in writing, (i) when any post-effective amendment to the Registration Statement shall become effective or any amendment or supplement to the Prospectus shall have been filed; (ii) of its receipt of any comments from the Commission; (iii) of any request by the Commission for any amendment to the Registration Statement or any amendment or supplement to the Prospectus or for additional information; (iv) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement, or any post-effective amendment or of any order preventing or suspending the use of any Preliminary Prospectus or the Prospectus, or of the suspension of the qualification of the Public Shares for offering or sale in any jurisdiction, or of the initiation or threatening of any proceedings for any of such purposes or of any examination pursuant to Section 8(d) or 8(e) of the Securities Act concerning the Registration Statement; or (v) if the Company becomes the subject of a proceeding under Section 8A of the Securities Act in connection with the Offering of the Public Shares. The Company shall effect all filings required under Rule 424(b) of the Securities Act Regulations, in the manner and within the time period required by Rule 424(b) (without reliance on Rule 424(b)(8)) and shall take such steps as it deems necessary to ascertain promptly whether the form of prospectus transmitted for filing under Rule 424(b) was received for filing by the Commission and, in the event that it was not, it will promptly file such prospectus. The Company shall use its best efforts to prevent the issuance of any stop order, prevention or suspension and, if any such order is issued, to obtain the lifting thereof at the earliest possible moment.
3.2.2. Continued Compliance. The Company shall comply with the Securities Act, the Securities Act Regulations, the Exchange Act and the Exchange Act Regulations so as to permit the completion of the distribution of the Public Shares as contemplated in this Agreement and in the Registration Statement, the Pricing Disclosure Package and the Prospectus. If at any time when a prospectus relating to the Public Shares is (or, but for the exception afforded by Rule 172 of the Securities Act Regulations (“Rule 172”), would be) required by the Securities Act to be delivered in connection with sales of the Public Shares, any event shall occur or condition shall exist as a result of which it is necessary, in the opinion of counsel to the Underwriters or Company Counsel (as defined in Section 4.2.1), to (i) amend the Registration Statement in order that the Registration Statement will not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; (ii) amend or supplement the Pricing Disclosure Package or the Prospectus in order that the Pricing Disclosure Package or the Prospectus, as the case may be, will not include any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading at the time it is delivered to a purchaser; or (iii) amend the Registration Statement or amend or supplement the Pricing Disclosure Package or the Prospectus, as the case may be, in order to comply with the requirements of the Securities Act or the Securities Act Regulations, the Company will promptly (A) give the Representative notice of such event; (B) prepare any amendment or supplement as may be necessary to correct such statement or omission or to make the Registration Statement, the Pricing Disclosure Package or the Prospectus comply with such requirements and, a reasonable amount of time prior to any proposed filing or use, furnish the Representative copies of any such amendment or supplement; and (C) file with the Commission any such amendment or supplement; provided that the Company shall not file or use any such amendment or supplement to which the Representative or counsel to the Underwriters shall reasonably object. The Company will furnish to the Underwriters such number of copies of such amendment or supplement as the Underwriters may reasonably request. The Company shall give the Representative notice of its intention to make any such filing from the Applicable Time until the later of the Closing Date and the exercise in full or expiration of the Over-allotment Option and will furnish the Representative with copies of the related document(s) a reasonable amount of time prior to such proposed filing, as the case may be, and will not file or use any such document to which the Representative or counsel to the Underwriters shall reasonably object.
3.2.3. Exchange Act Registration. For a period of three (3) years after the date of this Agreement, the Company shall use its reasonable best efforts to maintain the registration of the Ordinary Share under the Exchange Act. For a period of two (2) years after the date of this Agreement, the Company shall not deregister the Ordinary Share under the Exchange Act without the prior written consent of the Representative.
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3.2.4. Free Writing Prospectuses. The Company agrees that, unless it obtains the prior written consent of the Representative, it shall not make any offer relating to the Public Shares that would constitute an Issuer Free Writing Prospectus or that would otherwise constitute a “free writing prospectus,” or a portion thereof, required to be filed by the Company with the Commission or retained by the Company under Rule 433; provided that the Representative shall be deemed to have consented to each Issuer General Use Free Writing Prospectus set forth in Schedule 2-B. The Company represents that it has treated or agrees that it will treat each such free writing prospectus consented to, or deemed consented to, by the Representative as an “issuer free writing prospectus,” as defined in Rule 433, and that it has complied and will comply with the applicable requirements of Rule 433 with respect thereto, including timely filing with the Commission where required, legending and record keeping. If at any time following issuance of an Issuer Free Writing Prospectus there occurred or occurs an event or development as a result of which such Issuer Free Writing Prospectus conflicted or would conflict with the information contained in the Registration Statement or included or would include an untrue statement of a material fact or omitted or would omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances existing at that subsequent time, not misleading, the Company will promptly notify the Representative and will promptly amend or supplement, at its own expense, such Issuer Free Writing Prospectus to eliminate or correct such conflict, untrue statement or omission.
3.2.5. Testing-the-Waters Communications. If at any time following the distribution of any Written Testing-the-Waters Communication there occurred or occurs an event or development as a result of which such Written Testing-the-Waters Communication included or would include an untrue statement of a material fact or omitted or would omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances existing at that subsequent time, not misleading, the Company shall promptly notify the Representative and shall promptly amend or supplement, at its own expense, such Written Testing-the-Waters Communication to eliminate or correct such untrue statement or omission.
3.3. Delivery to the Underwriters of Registration Statements. The Company has delivered or made available or shall deliver or make available to the Representative and counsel to the Underwriters, without charge, conformed copies of the Registration Statement as originally filed and each amendment thereto (including exhibits filed therewith) and signed copies of all consents and certificates of experts, and will also deliver to each Underwriter, without charge, a conformed copy of the Registration Statement as originally filed and each amendment thereto (without exhibits) upon receipt of a written request therefor from such Underwriter. The copies of the Registration Statement and each amendment thereto furnished to the Underwriters will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.
3.4. Delivery to the Underwriters of Prospectuses. The Company has delivered or made available or will deliver or make available to each Underwriter, without charge, as many copies of each Preliminary Prospectus as such Underwriter reasonably requested, and the Company hereby consents to the use of such copies for purposes permitted by the Securities Act. The Company will furnish to each Underwriter, without charge, during the period when a prospectus relating to the Public Shares is (or, but for the exception afforded by Rule 172 of the Securities Act Regulations, would be) required to be delivered under the Securities Act, such number of copies of the Prospectus (as amended or supplemented) as such Underwriter may reasonably request. The Prospectus and any amendments or supplements thereto furnished to the Underwriters will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.
3.5. Effectiveness and Events Requiring Notice to the Representative. The Company shall use its best efforts to cause the Registration Statement to remain effective with a current prospectus for at least nine (9) months after the Applicable Time, and shall notify the Representative promptly and confirm the notice in writing: (i) of the effectiveness of the Registration Statement and any amendment thereto; (ii) of the issuance by the Commission of any stop order or of the initiation, or the threatening, of any proceeding for that purpose; (iii) of the issuance by any state securities commission of any proceedings for the suspension of the qualification of the Public Shares for offering or sale in any jurisdiction or of the initiation, or the threatening, of any proceeding for that purpose; (iv) of the mailing and delivery to the Commission for filing of any amendment or supplement to the Registration Statement or Prospectus; (v) of the receipt of any comments or request for any additional information from the Commission; and (vi) of the happening of any event during the period described in this Section 3.5 that, in the judgment of the Company, makes any statement of a material fact made in the Registration Statement, the Pricing Disclosure Package or the Prospectus untrue or that requires the making of any changes in (a) the Registration Statement in order to make the statements therein not misleading, or (b) in the Pricing Disclosure Package or the Prospectus in order to make the statements therein, in light of the circumstances under which they were made, not misleading. If the Commission or any state securities commission shall enter a stop order or suspend such qualification at any time, the Company shall use its commercially reasonable efforts to obtain promptly the lifting of such order.
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3.6. Review of Financial Statements. For a period of three (3) years after the date of this Agreement, the Company, at its expense, shall cause its regularly engaged independent registered public accounting firm to review (but not audit) the Company’s interim financial statements for each period covered by any Company’s announcement of financial information, before such announcement is made.
3.7. Listing. The Company shall use its reasonable best efforts to maintain the listing of the Public Shares on the Exchange until at least three (3) years after the date of this Agreement.
3.8. Financial Public Relations. The Company shall have retained a financial public relations firm reasonably acceptable to the Representative and the Company, which firm shall be experienced in assisting issuers in initial public offerings of securities and in their relations with their security holders, and shall retain such firm or another firm reasonably acceptable to the Representative for a period of not less than two (2) years after the Effective Date.
3.9. Reports to the Representative.
3.9.1. Periodic Reports, etc. For a period of three (3) years after the date of this Agreement, the Company shall furnish or make available to the Representative copies of such financial statements and other periodic and special reports as the Company from time to time furnishes generally to holders of any class of its securities and also promptly furnish to the Representative: (i) a copy of each periodic report the Company shall be required to file with the Commission under the Exchange Act and the Exchange Act Regulations; (ii) a copy of every press release and every news item and article with respect to the Company or its affairs which was released by the Company; (iii) a copy of each Current Report on Form 8-K prepared and filed by the Company; (iv) a copy of each registration statement filed by the Company under the Securities Act; (v) a copy of each report or other communication furnished to shareholders and (vi) such additional documents and information with respect to the Company and the affairs of any future subsidiaries of the Company as the Representative may from time to time reasonably request. Documents filed with the Commission pursuant to its EDGAR system or press releases shall be deemed to have been delivered to the Representative pursuant to this Section 3.9.1. Any documents not filed with the Commission pursuant to its EDGAR system shall be delivered to info@rflafferty.com.
3.9.2. Transfer Agent; Transfer Sheets. For a period of three (3) years after the date of this Agreement, the Company shall retain a transfer agent and registrar acceptable to the Representative (the “Transfer Agent”) and shall furnish to the Representative at the Company’s sole cost and expense such transfer sheets of the Company’s securities as either of the Representative may reasonably request, including the daily and monthly consolidated transfer sheets of the Transfer Agent and DTC. Colonial Stock Transfer Company, Inc. is acceptable to the Representative to act as Transfer Agent for the Ordinary Share.
3.9.3. Trading Reports. For a period of three (3) years after the date of this Agreement, during such time as any of the Public Shares are listed on the Exchange, the Company shall provide to the Representative, at the Company’s expense, such reports published by the Exchange relating to price trading of the Public Shares, as the either of Representatives shall reasonably request.
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3.10. Payment of Expenses
3.10.1. General Expenses Related to the Offering. The Company hereby agrees to pay on each of the Closing Date and the Option Closing Date, if any, to the extent not paid at the Closing Date, all expenses related to the Offering or otherwise incident to the performance of the obligations of the Company under this Agreement, including, but not limited to: (a) all filing fees and expenses relating to the registration of the Public Shares with the Securities and Exchange Commission; (b) all fees and expenses relating to the listing of the Public Shares on the Exchange and such other stock exchanges as the Company and the Representative together determine, including any fees charged by DTC; (c) all fees, expenses and disbursements relating to the registration or qualification of the Public Shares under “blue sky” or securities laws of such states of the United States of America and other jurisdictions designated by the Representative, including the reasonable fees and expenses of blue sky counsel to the Representative; (d) all fees, expenses and disbursements relating to the registration, qualification or exemption of the Public Shares under the securities laws of such foreign jurisdictions as reasonably designated by the Representative; (e) the costs of all mailing and printing of documents relating to the Offering (including, without limitation, the Underwriting Agreement, any Blue Sky Surveys and, if appropriate, any Agreement Among Underwriters, Selected Dealers’ Agreement, Underwriters’ Questionnaire and Power of Attorney, Registration Statements, Prospectuses and all amendments, supplements and exhibits thereto and as many preliminary and final Prospectuses as the Representative may reasonably deem necessary); (f) transfer and/or stamp taxes, if any, payable upon our transfer of the Public Shares to the Underwriters; (g) the fees and expenses of the Company’s accountants; (h) the fees and expenses of the Company’s legal counsel and other agents and representatives; (i) all filing fees and communication expenses associated with the review of the Offering by FINRA; (j) $5,000 cost associated with the Representative’s clearing system data services and communications expenses; (k) the $10,000 cost associated with the Representative’s Capital IQ system for comparable company analysis and valuation; (l) all fees, expenses and disbursements relating to background checks of directors and officers of the Company; (m) the costs associated with bound volumes of the offering materials as well as commemorative mementos and Lucite tombstones; (n) the fees of counsel to the Underwriters in an amount not to exceed $175,000; provided, that the Company agrees to pay the fees of external counsel legal costs to the underwriters regardless of whether the Offering is consummated, and provided further that, in the event there is not a Closing, the Company shall pay the actual expenses incurred by the Underwriters for such legal counsel up to $50,000. The Company paid an expense advance of $15,000 to the Representative upon the execution of the Engagement Letter (as defined in Section 9.4) for the Representative’s anticipated out-of-pocket expenses, which shall be included toward the maximum accountable expense allowance of [$ ] to be paid to the Representative as set forth under this Section; any expense advances will be returned to the Company to the extent the Representative’s accountable expenses are not actually incurred in accordance with FINRA Rule 5110(g)(4)(A). The Company shall also pay to the Representative a non-accountable expense allowance equal to 1% of the gross proceeds of the Offering (excluding any proceeds from the exercise of the over-allotment option) at Closing.
The Representative may deduct from the net proceeds of the Offering payable to the Company on the Closing Date, or the Option Closing Date, if any, the expenses set forth herein to be paid by the Company to the Underwriters.
3.11. Application of Net Proceeds. The Company shall apply the net proceeds from the Offering received by it in a manner consistent with the application thereof described under the caption “Use of Proceeds” in the Registration Statement, the Pricing Disclosure Package and the Prospectus.
3.12. Delivery of Earnings Statements to Security Holders. The Company shall make generally available to its security holders as soon as practicable, but not later than the first day of the fifteenth (15th) full calendar month following the date of this Agreement, an earnings statement (which need not be certified by an independent registered public accounting firm unless required by the Securities Act or the Securities Act Regulations, but which shall satisfy the provisions of Rule 158(a) under Section 11(a) of the Securities Act) covering a period of at least twelve (12) consecutive months beginning after the date of this Agreement.
3.13. Stabilization. Neither the Company nor, to its knowledge, any of its employees, directors or shareholders has taken or shall take, directly or indirectly, any action designed to or that has constituted or that might reasonably be expected to cause or result in, under Regulation M under the Exchange Act, or otherwise, stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Public Shares.
3.14. Internal Controls. For a period of one (1) year after the date of this Agreement, the Company shall maintain a system of internal accounting controls sufficient to provide reasonable assurances that: (i) transactions are executed in accordance with management’s general or specific authorization; (ii) transactions are recorded as necessary in order to permit preparation of financial statements in accordance with IFRS and to maintain accountability for assets; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences.
3.15. Accountants. As of the date of this Agreement, the Company has retained an independent registered public accounting firm, as required by the Securities Act and the Securities Act Regulations and the Public Company Accounting Oversight Board, reasonably acceptable to the Representative, and the Company shall continue to retain a nationally recognized independent registered public accounting firm for a period of at least three (3) years after the date of this Agreement. The Representative acknowledges that Kreit & Chiu CPA LLP is acceptable to the Representative.
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3.16. FINRA. For a period of 60 days from the later of the Closing Date or the Option Closing Date, the Company shall advise the Representative (who shall make an appropriate filing with FINRA) if it is or becomes aware that (i) any officer or director of the Company, (ii) any beneficial owner of 10% or more of any class of the Company’s securities or (iii) any beneficial owner of the Company’s unregistered equity securities which were acquired during the 180 days immediately preceding the filing of the Registration Statement is or becomes an affiliate or associated person of a FINRA member participating in the Offering (as determined in accordance with the rules and regulations of FINRA).
3.17. No Fiduciary Duties. The Company acknowledges and agrees that the Underwriters’ responsibility to the Company is solely contractual in nature and that none of the Underwriters or their affiliates or any selling agent shall be deemed to be acting in a fiduciary capacity, or otherwise owes any fiduciary duty to the Company or any of its affiliates in connection with the Offering and the other transactions contemplated by this Agreement.
3.18. Company Lock-Up Agreement. The Company, on behalf of itself and any successor entity, agrees that without the prior written consent of the Representative, it will not, for a period of one hundred eighty (180) days after the date of this Agreement (the “Lock-Up Period”), (i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract act to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any shares of the Company or any securities convertible into or exercisable or exchangeable for shares of the Company; (ii) file or cause to be filed any registration statement with the Commission relating to the offering of any shares of the Company or any securities convertible into or exercisable or exchangeable for shares of the Company other than a registration statement on Form F-4 or S-8; (iii) complete any offering of debt securities of the Company, other than entering into a line of credit or senior credit facility with a traditional bank or other lending institution; or (iv) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of shares of the Company, whether any such transaction described in clause (i), (ii), (iii), or (iv) above is to be settled by delivery of shares of the Company or such other securities, in cash or otherwise.
The restrictions contained in this Section 3.18 shall not apply to (i) the Public Shares to be sold hereunder; (ii) the issuance by the Company of the Ordinary Share upon the exercise of a share option or warrant, the conversion of a security, or pursuant to a contractual obligation, in each case issued and outstanding on the date hereof, provided that such options, warrants, securities or contracts are disclosed in the Registration Statement, the Pricing Disclosure Package or the Prospectus and have not been amended since the date of this Agreement to increase the number of such securities or to decrease the exercise price, exchange price or conversion price of such securities or to extend the term of such securities, (iii) the issuance of the Ordinary Shares issued as part of the purchase price in connection with the acquisitions or strategic transactions, provided certain conditions are met, or (iv) the issuance by the Company of any Ordinary Share or standard options to purchase such shares to directors, officers, employees or consultants of the Company in their capacity as such pursuant to an Approved Share Plan (as defined below), (v) the issuance of Ordinary Shares, options or convertible securities to banks, equipment lessors or other financial institutions, or to real property lessors, pursuant to a debt financing, equipment leasing or real property leasing transaction approved by a majority of the disinterested directors of the Company but shall not include a transaction in which the company is primarily issuing Ordinary Shares or Ordinary Share equivalents primarily for the purpose of raising capital or to a person or an entity whose primary business is investing in securities; (vi) the issuance of Ordinary Shares, options or convertible securities in connection with the provision of goods or services pursuant to transactions approved by a majority of the disinterested directors of the Company but shall not include a transaction in which the company is issuing Ordinary Shares or Ordinary Share equivalents primarily for the purpose of raising capital or to a person or an entity whose primary business is investing in securities; and (vii) the issuance of Ordinary Shares, options or convertible securities issued in connection with sponsored research, collaboration, technology license, development, investor or public relations, marketing or other similar agreements or strategic partnerships approved by a majority of the disinterested directors of the Company but shall not include a transaction in which the Company is primarily issuing Ordinary Shares or Ordinary Share equivalents primarily for the purpose of raising capital or to a person or an entity whose primary business is investing in securities. For purposes of this section, “Approved Share Plan” means any employee benefit plan which has been approved by the board of directors of the Company prior to or subsequent to the date hereof pursuant to which the Ordinary Share and standard options to purchase such shares may be issued to any employee, officer, director or consultant for services provided to the Company in their capacity as such.
3.19. Release of D&O Lock-up Period. If the Representative, in their sole discretion, agrees to release or waive the restrictions set forth in the Lock-Up Agreements described in Section 2.24 hereof for an officer or director or any other holder(s) of the issued and outstanding Ordinary Shares as of the effective date of the Registration Statement (and all holders of securities exercisable for or convertible into Ordinary Shares) of the Company and provides the Company with notice of the impending release or waiver at least three (3) Business Days before the effective date of the release or waiver, the Company agrees to announce the impending release or waiver by a press release substantially in the form of Exhibit C hereto through a major news service at least two (2) Business Days before the effective date of the release or waiver.
3.20. Blue Sky Qualifications. The Company shall use its best efforts, in cooperation with the Underwriters, if necessary, to qualify the Public Shares for offering and sale under the applicable securities laws of such states and other jurisdictions (domestic or foreign) as the Representative may designate and to maintain such qualifications in effect so long as required to complete the distribution of the Public Shares; provided, however, that the Company shall not be obligated to file any general consent to service of process or to qualify as a foreign corporation or as a dealer in securities in any jurisdiction in which it is not so qualified or to subject itself to taxation in respect of doing business in any jurisdiction in which it is not otherwise so subject.
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3.21. Reporting Requirements. The Company, during the period when a prospectus relating to the Public Shares is (or, but for the exception afforded by Rule 172, would be) required to be delivered under the Securities Act, will file all documents required to be filed with the Commission pursuant to the Exchange Act within the time periods required by the Exchange Act and Exchange Act Regulations. Additionally, the Company shall report the use of proceeds from the issuance of the Public Shares as may be required under Rule 463 under the Securities Act Regulations.
3.22. Emerging Growth Company Status. The Company shall promptly notify the Representative if the Company ceases to be an “emerging growth company” within the meaning of Section 2(a) of the Securities Act at any time prior to the later of (i) completion of the distribution of the Public Shares and (ii) fifteen (15) days following the completion of the Lock-Up Period.
3.23. Press Releases. Prior to the Closing Date and any Option Closing Date, the Company shall not issue any press release or other communication directly or indirectly or hold any press conference with respect to the Company, its condition, financial or otherwise, or earnings, business affairs or business prospects (except for routine oral marketing communications in the ordinary course of business and consistent with the past practices of the Company and of which the Representative are notified), without the prior written consent of the Representative, which consent shall not be unreasonably withheld, unless in the judgment of the Company and its counsel, and after notification to the Representative, such press release or communication is required by law.
3.24. Sarbanes-Oxley. The Company shall at all times comply in all material respects with all applicable provisions of the Sarbanes-Oxley Act in effect from time to time.
3.25. IRS Forms. If requested by the Representative, the Company shall deliver to each Underwriter (or its agent), prior to or at the Closing Date, a properly completed and executed Internal Revenue Service (“IRS”) Form W-9 or an IRS Form W-8, as appropriate, together with all required attachments to such form.
4. CONDITIONS OF UNDERWRITERS’ OBLIGATIONS.
The obligations of the Underwriters to purchase and pay for the Public Shares, as provided herein, shall be subject to (i) the continuing accuracy of the representations and warranties of the Company as of the date hereof and as of each of the Closing Date and the Option Closing Date, if any; (ii) the accuracy of the statements of officers of the Company made pursuant to the provisions hereof; (iii) the performance by the Company of its obligations hereunder; and (iv) the following conditions:
4.1. Regulatory Matters.
4.1.1. Effectiveness of Registration Statement; Rule 430A Information. The Registration Statement has become effective not later than 5:30 p.m., New York City time, on the date of this Agreement or such later date and time as shall be consented to in writing by the Representative, and, at each of the Closing Date and any Option Closing Date, no stop order suspending the effectiveness of the Registration Statement or any post-effective amendment thereto shall have been issued under the Securities Act, no order preventing or suspending the use of any Preliminary Prospectus or the Prospectus shall have been issued and no proceedings for any of those purposes shall have been instituted or are pending or, to the Company’s knowledge, contemplated by the Commission. The Company has complied with each request (if any) from the Commission for additional information. A prospectus containing the Rule 430A Information shall have been filed with the Commission in the manner and within the time frame required by Rule 424(b) under the Securities Act Regulations or a post-effective amendment providing such information shall have been filed with, and declared effective by, the Commission in accordance with the requirements of Rule 430A under the Securities Act Regulations.
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4.1.2. FINRA Clearance. On or before the date of this Agreement, the Representative shall have received a letter of no objections from FINRA as to the terms and arrangements and amount of compensation allowable or payable to the Underwriters as described in the Registration Statement.
4.1.3. Exchange Clearance. On the Closing Date, the Public Shares shall have been approved for listing on the Exchange, subject only to official notice of issuance.
4.2. Company Counsel Matters.
4.2.1. Closing Date Opinions of Counsel for the Company. On the Closing Date, the Representative shall have received the favorable opinion and negative assurance letter of Bevilacqua PLLC (“Company Counsel”), counsel to the Company as to federal law of the United States of America, the law of the State of New York, and the law of British Virgin Islands, dated the Closing Date and addressed to the Representative as representative of the Underwriters, each in form and substance reasonably satisfactory to the Representative and counsel to the Representative;
4.2.2. Option Closing Date Opinions of Counsel for the Company. On the Option Closing Date, if any, the Representative shall have received (i) the favorable opinion and negative assurance letter of Company Counsel, dated the Option Closing Date, addressed to the Representative and in form and substance satisfactory to the Representative and counsel to the Representative, confirming as of the Option Closing Date, the pursuant to Section 4.2.1 hereof.
4.2.3. Opinion of Singapore Counsel. On the Closing Date and the Option Closing Date, if any, the Representative shall have received the favorable opinion of ReThink Legal, Singapore counsel to the Company, dated the Closing Date and the Option Closing Date, respectively, and addressed to the Representative, in form and substance reasonably satisfactory to the Representative.
4.2.4 Opinion of British Virgin Islands Counsel. On the Closing Date and the Option Closing Date, if any, the Representative shall have received the favorable opinion of Conyers Dill & Pearman, British Virgin Islands counsel to the Company, dated the Closing Date and the Option Closing Date, respectively, and addressed to the Representative, in form and substance reasonably satisfactory to the Representative.
4.3. Comfort Letters.
4.3.1. Comfort Letter. At the time this Agreement is executed, the Representative shall have received a “cold comfort letter” from the Auditor containing statements and information of the type customarily included in accountants’ comfort letters with respect to the financial statements and certain financial information contained in the Registration Statement, the Pricing Disclosure Package and the Prospectus, addressed to the Representative and in form and substance satisfactory in all respects to the Representative and to counsel to the Underwriters, dated as of the date of this Agreement.
4.3.2. Bring-down Comfort Letters. At each of the Closing Date and the Option Closing Date, if any, the Representative shall have received from the Auditor a letter, dated as of the Closing Date or the Option Closing Date, as applicable, to the effect that the Auditors reaffirms the statements made in the letter furnished pursuant to Section 4.3.1.
4.4. Officers’ Certificates.
4.4.1. Officers’ Certificate. The Company shall have furnished to the Representative a certificate, dated the Closing Date and any Option Closing Date (if such date is other than the Closing Date), of its Chief Executive Officer or President, and its Chief Financial Officer stating that on behalf of the Company and not in an individual capacity that (i) such officers have examined the Registration Statement, the Pricing Disclosure Package, any Issuer Free Writing Prospectus and the Prospectus and, in their opinion, the Registration Statement and each amendment thereto after the Effective Date, as of the Applicable Time and as of the Closing Date (or any Option Closing Date if such date is other than the Closing Date) did not include any untrue statement of a material fact and did not omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, and the Pricing Disclosure Package, as of the Applicable Time and as of the Closing Date (or any Option Closing Date if such date is other than the Closing Date), any Issuer Free Writing Prospectus as of its date and as of the Closing Date (or any Option Closing Date if such date is other than the Closing Date), the Prospectus and each amendment or supplement thereto after the Effective Date, as of the respective date thereof and as of the Closing Date, did not include any untrue statement of a material fact and did not omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances in which they were made, not misleading, (ii) to their knowledge after reasonable investigation, as of the Closing Date (or any Option Closing Date if such date is other than the Closing Date), the representations and warranties of the Company in this Agreement are true and correct and the Company has complied with all agreements and satisfied all conditions on its part to be performed or satisfied hereunder at or prior to the Closing Date (or any Option Closing Date if such date is other than the Closing Date), and (iii) there has not been, subsequent to the date of the most recent audited financial statements included in the Pricing Disclosure Package, a Material Adverse Change.
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4.4.2. CEO’s Certificate. At each of the Closing Date and the Option Closing Date, if any, the Representative shall have received a certificate of the Company signed by the CEO of the Company, dated the Closing Date and any Option Closing Date (if such date is other than the Closing Date), certifying on behalf of the Company and not in an individual capacity: (i) that each of the memorandum and articles of association of the Company is true and complete, has not been modified and is in full force and effect; (ii) that the resolutions of the Company’s Board of Directors relating to the Offering are in full force and effect and have not been modified; (iii) as to the accuracy and completeness of all correspondence between the Company or its counsel and the Commission; and (iv) as to the incumbency of the officers of the Company. The documents referred to in such certificate shall be attached to such certificate.
4.5. No Material Changes. Prior to and on each of the Closing Date and each Option Closing Date, if any: (i) there shall have been no Material Adverse Change in the condition (financial or otherwise), results of operations, business, assets or prospects of the Company from the latest dates as of which such condition is set forth in the Registration Statement, the Pricing Disclosure Package and the Prospectus; (ii) no action, suit or proceeding, at law or in equity, shall have been pending or threatened against the Company or any Insider before or by any court or federal or state commission, board or other administrative agency wherein an unfavorable decision, ruling or finding may reasonably be expected to result in a Material Adverse Change, except as set forth in the Registration Statement, the Pricing Disclosure Package and the Prospectus; (iii) no stop order shall have been issued under the Securities Act and no proceedings therefor shall have been initiated or threatened by the Commission; and (iv) the Registration Statement, the Pricing Disclosure Package and the Prospectus and any amendments or supplements thereto shall contain all material statements which are required to be stated therein in accordance with the Securities Act and the Securities Act Regulations and shall conform in all material respects to the requirements of the Securities Act and the Securities Act Regulations, and neither the Registration Statement, the Pricing Disclosure Package nor the Prospectus nor any amendment or supplement thereto shall contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.
4.6. No Material Misstatement or Omission. The Underwriters shall not have discovered and disclosed to the Company on or prior to the Closing Date and any Option Closing Date that the Registration Statement or any amendment or supplement thereto contains an untrue statement of a fact which, in the opinion of counsel to the Underwriters, is material or omits to state any fact which, in the opinion of such counsel, is material and is required to be stated therein or is necessary to make the statements therein not misleading, or that the Registration Statement, the Pricing Disclosure Package, any Issuer Free Writing Prospectus or the Prospectus or any amendment or supplement thereto contains an untrue statement of fact which, in the opinion of counsel to the Underwriters, is material or omits to state any fact which, in the opinion of counsel to the Underwriters, is material and is necessary in order to make the statements, in the light of the circumstances under which they were made, not misleading.
4.7. Corporate Proceedings. All corporate proceedings and other legal matters incident to the authorization, form and validity of each of this Agreement, the Representative’s Warrant Agreement, the Representative’s Warrant and each Lock-Up Agreement the Public Shares, the Registration Statement, the Pricing Disclosure Package, each Issuer Free Writing Prospectus, if any, and the Prospectus and all other legal matters relating to this Agreement, the Representative’s Warrant Agreement, the Representative’s Warrant and each Lock-Up Agreement and the transactions contemplated hereby and thereby shall be reasonably satisfactory in all material respects to counsel to the Underwriters, and the Company shall have furnished to such counsel all documents and information that they may reasonably request to enable them to pass upon such matters.
4.8. Delivery of Agreements.
4.8.1. Lock-Up Agreements. On or before the date of this Agreement, the Company shall have delivered to the Representative executed copies of the Lock-Up Agreements from each of the persons listed in Schedule 3 hereto.
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4.8.2. Other Agreements. On the Closing Date, the Company shall have delivered to the Representative executed copies of Representatives’ Warrant Agreement and the Representative’s Warrant.
4.9. Additional Documents. At the Closing Date and at each Option Closing Date (if any) counsel to the Underwriters shall have been furnished with such documents and opinions as they may require for the purpose of enabling counsel to the Underwriters to deliver an opinion to the Underwriters, or in order to evidence the accuracy of any of the representations or warranties, or the fulfillment of any of the conditions, herein contained; and all proceedings taken by the Company in connection with the issuance and sale of the Public Shares as herein contemplated shall be satisfactory in form and substance to the Representative and counsel to the Underwriters.
5. INDEMNIFICATION.
5.1. Indemnification of the Underwriters.
5.1.1. General. The Company shall, to the fullest extent permitted by applicable laws, indemnify and hold harmless each Underwriter, its affiliates and each of its and their respective directors, officers, members, employees, representatives, partners, shareholders, affiliates, counsel and agents and each person, if any, who controls any such Underwriter within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act (collectively the “Underwriter Indemnified Parties,” and each an “Underwriter Indemnified Party”), against any and all loss, liability, claim, damage and expense whatsoever (including but not limited to any and all legal or other expenses reasonably incurred in investigating, preparing or defending against any litigation, commenced or threatened, or any claim whatsoever, whether arising out of any action between any of the Underwriter Indemnified Parties and the Company or between any of the Underwriter Indemnified Parties and any third party, or otherwise) to which they or any of them may become subject under the Securities Act, the Exchange Act or any other statute or at common law or otherwise or under the laws of foreign countries, arising out of or based upon any untrue statement or alleged untrue statement of a material fact contained in (i) the Registration Statement, the Pricing Disclosure Package, the Preliminary Prospectus, the Prospectus or any Issuer Free Writing Prospectus (as from time to time each may be amended and supplemented); (ii) any materials or information provided to investors by, or with the approval of, the Company in connection with the marketing of the Offering, including any “road show” or investor presentations made to investors by the Company (whether in person or electronically); or (iii) any application or other document or written communication (in this Section 5, collectively called “application”) executed by the Company or based upon written information furnished by the Company in any jurisdiction in order to qualify the Public Shares under the securities laws thereof or filed with the Commission, any state securities commission or agency, the Exchange or any other national securities exchange; or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, unless such statement or omission was made in reliance upon, and in conformity with, the Underwriters’ Information. With respect to any untrue statement or omission or alleged untrue statement or omission made in the Pricing Disclosure Package, the indemnity agreement contained in this Section 5.1.1 shall not inure to the benefit of any Underwriter Indemnified Party to the extent that any loss, liability, claim, damage or expense of such Underwriter Indemnified Party (a) is based on the Underwriters’ Information, (b) results from the fact that a copy of the Prospectus was not given or sent to the person asserting any such loss, liability, claim or damage at or prior to the written confirmation of sale of the Public Shares to such person as required by the Securities Act and the Securities Act Regulations, and if the untrue statement or omission has been corrected in the Prospectus, unless such failure to deliver the Prospectus was a result of non-compliance by the Company with its obligations under Section 3.3 hereof, or (c) is found in a final, non-appealable judgment of a court of competent jurisdiction to have resulted primarily from the fraud, willful misconduct or gross negligence of such Underwriter Indemnified Party.
5.1.2. Procedure. If any action is brought against an Underwriter Indemnified Party in respect of which indemnity may be sought against the Company pursuant to Section 5.1.1, such Underwriter Indemnified Party shall promptly notify the Company in writing of the institution of such action and the Company shall be entitled to participate therein and, to the extent that it wishes, jointly with any other similarly notified indemnifying party, to assume the defense of such action, including the employment and fees of counsel (subject to the reasonable approval of such Underwriter Indemnified Party) and payment of actual expenses. Such Underwriter Indemnified Party shall have the right to employ its or their own counsel in any such case, but the fees and expenses of such counsel shall be at the expense of such Underwriter Indemnified Party unless (i) the employment of such counsel at the expense of the Company shall have been authorized in writing by the Company in connection with the defense of such action, or (ii) the Company shall not have employed counsel to have charge of the defense of such action, or (iii) the action includes both the Company and the indemnified party as defendants and such indemnified party or parties shall have been advised by its counsel in writing that there may be defenses available to it or them which are different from or additional to those available to the Company which makes it impossible or inadvisable for the Company and such indemnified party to be represented in the action by the same counsel (in which case the Company shall not have the right to direct the defense of such action on behalf of the indemnified party), in any of which events the reasonable fees and expenses of not more than one additional firm of attorneys selected by the Underwriter Indemnified Parties who are party to such action (in addition to local counsel) shall be borne by the Company. Notwithstanding anything to the contrary contained herein, if any Underwriter Indemnified Party shall assume the defense of such action as provided above, the Company shall have the right to approve the terms of any settlement of such action, which approval shall not be unreasonably withheld.
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5.2. Indemnification of the Company. Each Underwriter, severally and not jointly, shall, to the fullest extent permitted by applicable laws, indemnify and hold harmless the Company, its directors, its officers who signed the Registration Statement and persons who control the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act against any and all loss, liability, claim, damage and expense described in the foregoing indemnity from the Company to the several Underwriters, as incurred, but only with respect to such losses, liabilities, claims, damages and expenses (or actions in respect thereof) which arise out of or are based upon untrue statements or omissions made in the Registration Statement, any Preliminary Prospectus, the Pricing Disclosure Package or Prospectus or any amendment or supplement thereto or in any application, in reliance upon, and in strict conformity with, the Underwriters’ Information. In case any action shall be brought against the Company or any other person so indemnified based on any Preliminary Prospectus, the Registration Statement, the Pricing Disclosure Package or Prospectus or any amendment or supplement thereto or any application, and in respect of which indemnity may be sought against any Underwriter, such Underwriter shall have the rights and duties given to the Company, and the Company and each other person so indemnified shall have the rights and duties given to the several Underwriters by the provisions of Section 5.1.2. The Company agrees promptly to notify the Representative of the commencement of any litigation or proceedings against the Company or any of its officers, directors or any person, if any, who controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, in connection with the issuance and sale of the Public Shares or in connection with the Registration Statement, the Pricing Disclosure Package, the Prospectus or any Issuer Free Writing Prospectus.
5.3. Contribution.
5.3.1. Contribution Rights. If the indemnification provided for in this Section 5 shall for any reason be unavailable to or insufficient to hold harmless an indemnified party under Section 5.1 or 5.2 in respect of any loss, claim, damage or liability, or any action in respect thereof, referred to therein, then each indemnifying party shall, in lieu of indemnifying such indemnified party, contribute to the amount paid or payable by such indemnified party as a result of such loss, claim, damage or liability, or action in respect thereof, (i) in such proportion as shall be appropriate to reflect the relative benefits received by the Company, on the one hand, and each of the Underwriters, on the other hand, from the Offering, or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company, on the one hand, and the Underwriters, on the other, with respect to the statements or omissions that resulted in such loss, claim, damage or liability, or action in respect thereof, as well as any other relevant equitable considerations. The relative benefits received by the Company, on the one hand, and the Underwriters, on the other, with respect to such Offering shall be deemed to be in the same proportion as the total proceeds from the Offering purchased under this Agreement (before deducting expenses) received by the Company bear to the total underwriting discount and commissions received by the Underwriters in connection with the Offering, in each case as set forth in the table on the cover page of the Prospectus. The relative fault of the Company, on the one hand, and the Underwriters, on the other, shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company, on the one hand, or the Underwriters, on the other, the intent of the parties and their relative knowledge, access to information and opportunity to correct or prevent such untrue statement, omission, act or failure to act; provided that the parties hereto agree that the written information furnished to the Company through the Representative by or on behalf of any Underwriter for use in any Preliminary Prospectus, any Registration Statement or the Prospectus, or in any amendment or supplement thereto, consists solely of the Underwriters’ Information. The Company and the Underwriters agree that it would not be just and equitable if contributions pursuant to this Section 5.3.1 were to be determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to herein. The amount paid or payable by an indemnified party as a result of the loss, claim, damage, expense, liability, action, investigation or proceeding referred to above in this Section 5.3.1 shall be deemed to include, for purposes of this Section 5.3.1, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating, preparing to defend or defending against or appearing as a third party witness in respect of, or otherwise incurred in connection with, any such loss, claim, damage, expense, liability, action, investigation or proceeding. Notwithstanding the provisions of this Section 5.3.1 no Underwriter shall be required to contribute any amount in excess of the total discount and commission received by such Underwriter in connection with the Offering less the amount of any damages which such Underwriter has otherwise paid or becomes liable to pay by reason of any untrue or alleged untrue statement, omission or alleged omission, act or alleged act or failure to act or alleged failure to act. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.
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5.3.2. Contribution Procedure. Within fifteen (15) days after receipt by any party to this Agreement (or its representative) of notice of the commencement of any action, suit or proceeding, such party will, if a claim for contribution in respect thereof is to be made against another party (“contributing party”), notify the contributing party of the commencement thereof, but the failure to so notify the contributing party will not relieve it from any liability which it may have to any other party other than for contribution hereunder. In case any such action, suit or proceeding is brought against any party, and such party notifies a contributing party or its representative of the commencement thereof within the aforesaid 15 days, the contributing party will be entitled to participate therein with the notifying party and any other contributing party similarly notified. Any such contributing party shall not be liable to any party seeking contribution on account of any settlement of any claim, action or proceeding affected by such party seeking contribution without the written consent of such contributing party. The contribution provisions contained in this Section 5.3.2 are intended to supersede, to the extent permitted by law, any right to contribution under the Securities Act, the Exchange Act or otherwise available. The Underwriters’ obligations to contribute as provided in this Section 5.3 are several and in proportion to their respective underwriting obligation, and not joint.
6. DEFAULT BY AN UNDERWRITER.
6.1. Default Not Exceeding 10% of Underwritten Shares or Option Shares. If any Underwriter or Underwriters shall default in its or their obligations to purchase the Underwritten Shares or the Option Shares, if the Over-allotment Option is exercised hereunder, and if the number of the Underwritten Shares or Option Shares with respect to which such default relates does not exceed in the aggregate 10% of the number of Underwritten Shares or Option Shares that all Underwriters have agreed to purchase hereunder, then such Underwritten Shares or Option Shares to which the default relates shall be purchased by the non-defaulting Underwriters in proportion to their respective commitments hereunder.
6.2. Default Exceeding 10% of Underwritten Shares or Option Shares. In the event that the default addressed in Section 6.1 relates to more than 10% of the number of Underwritten Shares or Option Shares, the Representative may in their discretion arrange for itself or for another party or parties to purchase such Underwritten Shares or Option Shares to which such default relates on the terms contained herein. If, within one (1) Business Day after such default relating to more than 10% of the number of Underwritten Shares or Option Shares, the Representative do not arrange for the purchase of such Underwritten Shares or Option Shares, then the Company shall be entitled to a further period of one (1) Business Day within which to procure another party or parties satisfactory to the Representative to purchase said Underwritten Shares or Option Shares on such terms. In the event that neither the Representative nor the Company arrange for the purchase of the Underwritten Shares or Option Shares to which a default relates as provided in this Section 6, this Agreement will automatically be terminated by the Representative or the Company without liability on the part of the Company (except as provided in Sections 3.10 and 5 hereof) or the several Underwriters (except as provided in Section 5 hereof); provided, however, that if such default occurs with respect to the Option Shares, this Agreement will not terminate as to the Underwritten Shares; and provided, further, that nothing herein shall relieve a defaulting Underwriter of its liability, if any, to the other Underwriters and to the Company for damages occasioned by its default hereunder.
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6.3. Postponement of Closing Date. In the event that the Underwritten Shares or Option Shares to which the default relates are to be purchased by the non-defaulting Underwriters, or are to be purchased by another party or parties as aforesaid, you or the Company shall have the right to postpone the Closing Date or Option Closing Date for a reasonable period, but not in any event exceeding five (5) Business Days, in order to effect whatever changes may thereby be made necessary in the Registration Statement, the Pricing Disclosure Package or the Prospectus or in any other documents and arrangements, and the Company agrees to file promptly any amendment to the Registration Statement, the Pricing Disclosure Package or the Prospectus that in the opinion of counsel to the Underwriters may thereby be made necessary. The term “Underwriter” as used in this Agreement shall include any party substituted under this Section 6 with like effect as if it had originally been a party to this Agreement with respect to such Underwritten Shares or Option Shares.
7. ADDITIONAL COVENANTS.
7.1. Prohibition on Press Releases and Public Announcements. The Company shall not issue press releases or engage in any other publicity, without the prior written consent of the Representative, for a period ending at 5:00 p.m., Eastern time, on the first (1st) Business Day following the fortieth (40th) day after the Closing Date, other than normal and customary releases issued in the ordinary course of the Company’s business.
7.2. Board Composition and Board Designations. The Company shall ensure that: (i) the qualifications of the persons serving as members of the board of directors and the overall composition of the board of directors comply with (to as long as the Company is an “emerging growth company” as defined in Section 2(a) of the Securities Act, with such provisions as may be applicable to the Company as such) the Sarbanes-Oxley Act, the Exchange Act and the listing rules of the Exchange or any other national securities exchange, as the case may be, in the event the Company seeks to have its Public Shares listed on another exchange or quoted on an automated quotation system, and (ii) if applicable, at least one member of the Audit Committee of the board of directors qualifies as an “audit committee financial expert”, as such term is defined in Item 407 of Regulation S-K and the listing rules of the Exchange.
8. EFFECTIVE DATE OF THIS AGREEMENT AND TERMINATION THEREOF.
8.1. Effective Date. This Agreement shall become effective when both the Company and the Representative have executed the same and delivered counterparts of such signatures to the other party.
8.2. Termination. The Representative shall have the right to terminate this Agreement at any time prior to any Closing Date, (i) if any domestic or international event or act or occurrence has materially disrupted, or in the opinion of the Representative will in the immediate future materially disrupt, general securities markets in the United States; or (ii) if trading on The Nasdaq Stock Market LLC shall have been suspended or materially limited, or minimum or maximum prices for trading shall have been fixed, or maximum ranges for prices for securities shall have been required by FINRA or by order of the Commission or any other government or other authority having jurisdiction; or (iii) if the United States shall have become involved in a new war or an increase in major hostilities; or (iv) if a banking moratorium has been declared by an authority in the State of New York State or of the United States of America; or (v) if a moratorium on foreign exchange trading has been declared which materially adversely impacts the United States securities markets; or (vi) if the Company shall have sustained a material loss by fire, flood, accident, hurricane, earthquake, theft, sabotage or other calamity or malicious act which, whether or not such loss shall have been insured, will, in your opinion, make it inadvisable to proceed with the delivery of the Underwritten Shares or Option Shares; or (vii) if the Company is in material breach of any of its representations, warranties or covenants hereunder; or (viii) if the Representative shall have become aware after the date hereof of a Material Adverse Change, or an adverse material change in general market conditions as in the judgment of the Representative would make it impracticable to proceed with the offering, sale and/or delivery of the Public Shares or to enforce contracts made by the Underwriters for the sale of the Public Shares.
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8.3. Expenses. Notwithstanding anything to the contrary in this Agreement, except in the case of a default by the Underwriters, pursuant to Section 6.2 above, in the event that this Agreement shall not be carried out for any reason whatsoever, within the time specified herein or any extensions thereof pursuant to the terms herein, the Company shall be obligated to pay to the Underwriters their actual and accountable out-of-pocket expenses related to the transactions contemplated herein then due and payable (including the fees and disbursements of counsel to the Underwriters) up to $150,000, and upon demand the Company shall pay the full amount thereof to the Representative on behalf of the Underwriters; provided, however, that such expense cap in no way limits or impairs the indemnification and contribution provisions of this Agreement.
8.4. Indemnification. Notwithstanding any contrary provision contained in this Agreement, any election hereunder or any termination of this Agreement, and whether or not this Agreement is otherwise carried out, the provisions of Section 5 shall remain in full force and effect and shall not be in any way affected by, such election or termination or failure to carry out the terms of this Agreement or any part hereof.
8.5. Representations, Warranties, Agreements to Survive. All representations, warranties and agreements contained in this Agreement or in certificates of officers of the Company submitted pursuant hereto, shall remain operative and in full force and effect regardless of (i) any investigation made by or on behalf of any Underwriter or its affiliates or selling agents, any person controlling any Underwriter, its officers or directors or any person controlling the Company or (ii) delivery of and payment for the Public Shares.
9. GENERAL PROVISIONS.
9.1. Notices. All communications hereunder, except as herein otherwise specifically provided, shall be in writing and shall be mailed (registered or certified mail, return receipt requested), personally delivered or sent by facsimile transmission and confirmed and shall be deemed given when so delivered or emailed and confirmed (which may be by email) or if mailed, two (2) days after such mailing.
If to the Representative:
R.F. Lafferty & Co., Inc.
40 Wall St.
New York, NY 10004
Attn: Robert Hackel, Chief Operating Officer
Email: info@rflafferty.com
with a copy (which shall not constitute notice) to:
Ellenoff Grossman & Schole LLP
1345 Avenue of the Americas
New York, New York 10105
Attention: Barry I. Grossman, Esq.
Email: bigrossman@egsllp.com
Facsimile: (212) 370-7889
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If to the Company:
CONCORDE INTERNATIONAL GROUP LTD
3 Ang Mo Kio Street 62, #01-49 LINK@AMK
Singapore 569139
Attention: Swee Kheng Chua, Chief Executive Officer
E-mail: alan.chua@concorde.com.sg
with a copy (which shall not constitute notice) to:
Bevilacqua PLLC
1050 Connecticut Ave NW #500
Washington, DC 20036
Attention: Louis Bevilacqua, Esq.
E-mail: lou@bevilacquapllc.com
9.2. Headings. The headings contained herein are for the sole purpose of convenience of reference, and shall not in any way limit or affect the meaning or interpretation of any of the terms or provisions of this Agreement.
9.3. Amendment. This Agreement may only be amended by a written instrument executed by each of the parties hereto.
9.4. Entire Agreement. This Agreement (together with the other agreements and documents being delivered pursuant to or in connection with this Agreement, constitutes the entire agreement of the parties hereto with respect to the subject matter hereof and thereof, and supersedes all prior agreements and understandings of the parties, oral and written, with respect to the subject matter hereof. Notwithstanding anything to the contrary set forth herein, it is understood and agreed by the parties hereto that all other terms and conditions of that certain engagement letter dated August 14, 2024 (the “Engagement Letter”), by and between the Company and the Representative, as amended, shall remain in full force and effect.
9.5. Binding Effect. This Agreement shall inure solely to the benefit of and shall be binding upon the Representative, the Underwriters, the Company and the controlling persons, directors and officers referred to in Section 5 hereof, and their respective successors, legal representatives, heirs and assigns, and no other person shall have or be construed to have any legal or equitable right, remedy or claim under or in respect of or by virtue of this Agreement or any provisions herein contained. The term “successors and assigns” shall not include a purchaser, in its capacity as such, of securities from any of the Underwriters. For the avoidance of doubt, it is specifically intended and the parties agree (including the Underwriters) that the Underwriters shall have all the rights and benefits of this Agreement and shall be able to rely upon and enforce this Agreement as if each was separately a signatory to it.
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9.6. Governing Law; Consent to Jurisdiction; Waiver of Trial by Jury. This Agreement shall be governed by and construed in accordance with the law of the State of New York. The Company hereby agrees that any action, proceeding or claim against it arising out of, or relating in any way to this Agreement shall be brought and enforced in the Supreme Court of the State of New York sitting in the County of New York, or in the United States District Court for the Southern District of New York, and irrevocably submits to such jurisdiction and to the jurisdiction of the appellate courts therefrom, which jurisdiction shall be exclusive. The Company hereby waives any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum. Any such process or summons to be served upon the Company may be served by transmitting a copy thereof by registered or certified mail, return receipt requested, postage prepaid, addressed to it at the address set forth in Section 9.1 hereof. Such mailing shall be deemed personal service and shall be legal and binding upon the Company in any action, proceeding or claim. The Company agrees that the prevailing party(ies) in any such action shall be entitled to recover from the other party(ies) all of its reasonable attorneys’ fees and expenses relating to such action or proceeding and/or incurred in connection with the preparation therefor. The Company (on its behalf and, to the extent permitted by applicable law, on behalf of its shareholders and affiliates) and each of the Underwriters hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.
9.7. Execution in Counterparts. This Agreement may be executed in one or more counterparts, and by the different parties hereto in separate counterparts, each of which shall be deemed to be an original, but all of which taken together shall constitute one and the same agreement, and shall become effective when one or more counterparts has been signed by each of the parties hereto and delivered to each of the other parties hereto. Delivery of a signed counterpart of this Agreement by facsimile or email/pdf transmission shall constitute valid and sufficient delivery thereof.
9.8. Waiver, etc. The failure of any of the parties hereto to at any time enforce any of the provisions of this Agreement shall not be deemed or construed to be a waiver of any such provision, nor to in any way effect the validity of this Agreement or any provision hereof or the right of any of the parties hereto to thereafter enforce each and every provision of this Agreement. No waiver of any breach, non-compliance or non-fulfillment of any of the provisions of this Agreement shall be effective unless set forth in a written instrument executed by the party or parties against whom or which enforcement of such waiver is sought; and no waiver of any such breach, non-compliance or non-fulfillment shall be construed or deemed to be a waiver of any other or subsequent breach, non-compliance or non-fulfillment.
[Signature Page Follows]
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If the foregoing correctly sets forth the understanding between the Underwriters and the Company, please so indicate in the space provided below for that purpose, whereupon this letter shall constitute a binding agreement between us as of the date first above written.
| Very truly yours, | ||
| CONCORDE INTERNATIONAL GROUP LTD | ||
| By: | ||
| Name: | Swee Kheng Chua | |
| Title: | Chief Executive Officer | |
| Confirmed as of the date first written above mentioned, on behalf of itself and as Representatives of the several Underwriters named on Schedule 1 hereto: | ||
| R.F. LAFFERTY & CO., INC. | ||
| By: | ||
| Name: | ||
| Title: | ||
SCHEDULE 1
| Underwriter | Number of Underwritten | Number of Option Shares to be Purchased if | ||||||
| R.F. Lafferty & Co., Inc. | [ ] | [ ] | ||||||
| TOTAL | [ ] | [ ] | ||||||
SCHEDULE 2-A
Pricing Information
| Number of Underwritten Shares: | [ ] | |||
| Number of Option Shares: | [ ] | |||
| Public Offering Price per Underwritten Share: | $ | [ ] | ||
| Public Offering Price per Option Share: | $ | [ ] | ||
| Underwriting Discount per Underwritten Share: | $ | [ ] | ||
| Underwriting Discount per Option Share: | $ | [ ] | ||
| Proceeds to Company per Underwritten Share (before expenses): | $ | [ ] | ||
| Proceeds to Company per Option Share (before expenses): | $ | [ ] |
SCHEDULE 2-B
Issuer General Use Free Writing Prospectuses
None.
SCHEDULE 3
List of Lock-Up Parties
| 1. | Swee Kheng Chua |
| 2. | Terence Wing Khai Yap |
| 3. | Sze Yin Ong |
| 4. | Yuen Fatt Yong |
| 5. | Sim Peng Thia |
| 6. | Mark Allen Brisson |
EXHIBIT A
Form of Representatives’ Warrant Agreement
THE REGISTERED HOLDER OF THIS PURCHASE WARRANT BY ITS ACCEPTANCE HEREOF, AGREES THAT IT WILL NOT SELL, TRANSFER OR ASSIGN THIS PURCHASE WARRANT EXCEPT AS HEREIN PROVIDED AND THE REGISTERED HOLDER OF THIS PURCHASE WARRANT AGREES THAT IT WILL NOT SELL, TRANSFER, ASSIGN, PLEDGE OR HYPOTHECATE THIS PURCHASE WARRANT FOR A PERIOD OF ONE HUNDRED EIGHTY DAYS FOLLOWING THE EFFECTIVE DATE (DEFINED BELOW) TO ANYONE OTHER THAN R.F. Lafferty & Co., Inc. OR AN UNDERWRITER OR A SELECTED DEALER IN CONNECTION WITH THE OFFERING, OR AN OFFICER OR PARTNER, rEGISTERED PERSON OR AFFILIATE OF R.F. Lafferty & Co., Inc. OR OF ANY SUCH UNDERWRITER OR SELECTED DEALER.
THIS PURCHASE WARRANT IS NOT EXERCISABLE PRIOR TO _____________, 2024. VOID AFTER 5:00 P.M., EASTERN TIME, ___________, 2029.1
CLASS A ORDINARY SHARE PURCHASE WARRANT
For the Purchase of [__] Class A Ordinary Share
of
CONCORDE INTERNATIONAL GROUP LTD
1. Purchase Warrant. THIS CERTIFIES THAT, in consideration of funds duly paid by or on behalf of R.F. Lafferty & Co., Inc. (“Holder”), as registered owner of this Purchase Warrant, CONCORDE INTERNATIONAL GROUP LTD, a British Virgin Islands business company (collectively with its subsidiaries and affiliates, including, without limitation, all entities disclosed or described in the Registration Statement as being subsidiaries (the “Company”), Holder is entitled, at any time or from time to time from _______, 2024 (the “Commencement Date”), and at or before 5:00 p.m., Eastern time, _______, 20292 (the “Expiration Date”), but not thereafter, to subscribe for, purchase and receive, in whole or in part, up to an aggregate of [__] Class A Ordinary Shares, par value $0.00001 per share (the “Shares”) of the Company’s Ordinary Share, subject to adjustment as provided in Section 6 hereof. If the Expiration Date is a day on which banking institutions are authorized by law to close, then this Purchase Warrant may be exercised on the next succeeding day which is not such a day in accordance with the terms herein. During the period ending on the Expiration Date, the Company agrees not to take any action that would terminate this Purchase Warrant. This Purchase Warrant is initially exercisable at a price of $____ per Share; provided, however, that upon the occurrence of any of the events specified in Section 6 hereof, the rights granted by this Purchase Warrant, including the exercise price per Share and the number of Shares to be received upon such exercise, shall be adjusted as therein specified. The term “Exercise Price” shall mean the initial exercise price of $____ per Share (equal to 100% of the initial public offering price) or the adjusted exercise price, depending on the context. The term “Effective Date” shall mean ___________, 2024, the date on which the Registration Statement on Form F-1, as amended (File No. [ ]) of the Company was declared effective by the Securities and Exchange Commission (the “Commission”).
2. Exercise.
2.1 Exercise Form. In order to exercise this Purchase Warrant, the exercise form attached hereto must be duly executed and completed and delivered to the Company, together with this Purchase Warrant and payment of the Exercise Price for the Shares being purchased payable in cash by wire transfer of immediately available funds to an account designated by the Company or by certified check or official bank check. If the subscription rights represented hereby shall not have been exercised in full at or before 5:00 p.m., New York City time, on the Expiration Date, the remaining unexercised rights represented by this Purchase Warrant shall expire and become and be void without further force or effect, and all rights represented hereby shall cease and expire.
| 1 | Fifth anniversary of effective date of registration statement. |
| 2 | Fifth anniversary of effective date of registration statement. |
A-1
2.2 Cashless Exercise. If at any time after the Commencement Date there is no effective registration statement registering, or no current prospectus available for, the resale of the Shares by the Holder, then in lieu of exercising this Purchase Warrant by payment of cash or check payable to the order of the Company pursuant to Section 2.1 above, Holder may elect to receive the number of Shares equal to the value of this Purchase Warrant (or the portion thereof being exercised), by surrender of this Purchase Warrant to the Company, together with the exercise form attached hereto, in which event the Company shall issue to Holder, Shares in accordance with the following formula:
| X | = | Y(A-B) | |
| A |
| Where, | |||
| X | = | The number of Shares to be issued to Holder; | |
| Y | = | The number of Shares for which the Purchase Warrant is being exercised; | |
| A | = | The fair market value of one Share; and | |
| B | = | The Exercise Price. |
For purposes of this Section 2.2, the fair market value of a Share is defined as follows:
| (i) | if the Company’s Shares are traded on a securities exchange, the value shall be deemed to be the closing price on such exchange prior to the exercise form being submitted in connection with the exercise of the Purchase Warrant; or |
| (ii) | if the Company’s Shares are actively traded over-the-counter, the value shall be deemed to be the closing bid price prior to the exercise form being submitted in connection with the exercise of the Purchase Warrant; if there is no active public market, the value shall be the fair market value thereof, as determined in good faith by the Company’s Board of Directors. |
2.3 Legend. Each certificate for the securities purchased under this Purchase Warrant shall bear a legend as follows unless such securities have been registered under the Securities Act of 1933, as amended (the “Securities Act”):
“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR APPLICABLE STATE LAW. NEITHER THE SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT AND APPLICABLE STATE LAW WHICH, IN THE OPINION OF COUNSEL TO THE COMPANY, IS AVAILABLE.”
3. Transfer.
3.1 General Restrictions. The registered Holder of this Purchase Warrant agrees by his, her or its acceptance hereof, that for a period of one hundred eighty (180) days following the Effective Date such Holder will not sell, transfer, assign, pledge or hypothecate the Purchase Warrant and securities issuable hereunder or subject them to any hedging, short sale, derivative, put or call transaction that would result in the effective economic disposition for a period of one hundred eighty (180) days following the Effective Date to anyone other than: (i) R.F. Lafferty & Co., Inc. “R.F. Lafferty” or an underwriter or a selected dealer participating in the Offering, or an officer or partner, registered person or affiliate of R.F. Lafferty or of any such underwriter or selected dealer, in each case in accordance with FINRA Rule 5110(e)(1), except as provided for in FINRA Rule 5110(e)(2). On and after one hundred eighty (180) days after the Effective Date, transfers to others may be made subject to compliance with or exemptions from applicable securities laws. In order to make any permitted assignment, the Holder must deliver to the Company the assignment form attached hereto duly executed and completed, together with the Purchase Warrant and payment of all transfer taxes, if any, payable in connection therewith. The Company shall within five (5) business days transfer this Purchase Warrant on the books of the Company and shall execute and deliver a new Purchase Warrant or Purchase Warrants of like tenor to the appropriate assignee(s) expressly evidencing the right to purchase the aggregate number of Shares purchasable hereunder or such portion of such number as shall be contemplated by any such assignment.
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3.2 Restrictions Imposed by the Securities Act. The securities evidenced by this Purchase Warrant shall not be transferred unless and until: (i) the Company has received the opinion of counsel for the Holder that the securities may be transferred pursuant to an exemption from registration under the Securities Act and applicable state securities laws, the availability of which is established to the reasonable satisfaction of the Company (the Company hereby agreeing that the opinion of Ellenoff Grossman & Schole LLP shall be deemed satisfactory evidence of the availability of an exemption), or (ii) a registration statement or a post-effective amendment to the Registration Statement relating to the offer and sale of such securities has been filed by the Company and declared effective by the Commission and compliance with applicable state securities law has been established.
4 Registration Rights.
4.1 Demand Registration.
4.1.1 Grant of Right. The Company, upon written demand (a “Demand Notice”) of the Holders of at least 51% of the Purchase Warrants and/or the underlying Shares, agrees to register, on one (1) occasion, all or any portion of Shares for which the Purchase Warrant is exercisable (collectively, the “Registrable Securities”). On such occasion, the Company will file such registration statements with the Commission covering the Registrable Securities within sixty (60) days after receipt of a Demand Notice and use its reasonable best efforts to have the registration statements declared effective promptly thereafter, subject to compliance with review by the Commission; provided, however, that the Company shall not be required to comply with a Demand Notice if the Company has filed a registration statement with respect to which the Holder is entitled to piggyback registration rights pursuant to Section 4.2 hereof and either: (i) the Holder has elected to participate in the offering covered by such registration statement or (ii) if such registration statement relates to an underwritten primary offering of securities of the Company, until the offering covered by such registration statement has been withdrawn or until thirty (30) days after such offering is consummated. The Company covenants and agrees to give written notice of its receipt of any Demand Notice by any Holders to all other registered Holders of the Purchase Warrants and/or the Registrable Securities within ten (10) days after the date of the receipt of any such Demand Notice.
4.1.2 Terms. The Company shall bear all fees and expenses attendant to the registration of the Registrable Securities pursuant to Section 4.1.1, but the Holders shall pay any and all underwriting commissions and the expenses of any legal counsel selected by the Holders to represent them in connection with the sale of the Registrable Securities. The Company agrees to use its reasonable best efforts to cause the filings required herein to become effective promptly and to qualify or register the Registrable Securities in such states of the Unites States of America or such foreign jurisdictions as may be reasonably requested by the Holders; provided, however, that in no event shall the Company be required to register the Registrable Securities in such states or jurisdictions in which such registration would cause: (i) the Company to be obligated to register or license to do business in such state or jurisdiction or submit to general service of process therein, or (ii) the principal shareholders of the Company to be obligated to escrow their shares of the Company. The Company shall cause any registration statements filed pursuant to the demand right granted under Section 4.1.1 to remain effective for a period of at least twelve (12) consecutive months after the date that the Holders of the Registrable Securities covered by such registration statement are first given the opportunity to sell all of such securities. The Holders shall only use the prospectuses provided by the Company to sell the shares covered by such registration statement and will immediately cease to use any prospectus furnished by the Company if the Company advises the Holder that such prospectus may no longer be used due to a material misstatement or omission. Notwithstanding the provisions of this Section 4.1.2, the Holder shall be entitled to a demand registration under this Section 4.1.2 on only one (1) occasion in accordance with FINRA Rule 5110(g)(8)(B) and such demand registration right shall terminate on the fifth anniversary of the Effective Date in accordance with FINRA Rule 5110(g)(8)(C).
4.2 “Piggy-Back” Registration.
4.2.1 Grant of Right. In addition to the demand right of registration described in Section 4.1 hereof, the Holder shall have the right, for a period of no more than five (5) years from the Effective Date in accordance with FINRA Rule 5110(g)(8)(D), to include the Registrable Securities as part of any other registration of securities filed by the Company (other than in connection with a transaction contemplated by Rule 145(a) promulgated under the Securities Act or pursuant to Form S-8 or Form F-4 or any successors to such forms); provided, however, that if, solely in connection with any primary underwritten public offering for the account of the Company, the managing underwriter(s) thereof shall, in its reasonable discretion, impose a limitation on the number of Registrable Securities which may be included in the Registration Statement because, in such underwriter(s)’ judgment, marketing or other factors dictate such limitation is necessary to facilitate public distribution, then the Company shall be obligated to include in such Registration Statement only such limited portion of the Registrable Securities with respect to which the Holder requested inclusion hereunder as the underwriter shall reasonably permit. Any exclusion of Registrable Securities shall be made pro rata among the Holders seeking to include Registrable Securities in proportion to the number of Registrable Securities sought to be included by such Holders; provided, however, that the Company shall not exclude any Registrable Securities unless the Company has first excluded all outstanding securities, the holders of which are not entitled to inclusion of such securities in such Registration Statement or are not entitled to pro rata inclusion with the Registrable Securities.
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4.2.2 Terms. The Company shall bear all fees and expenses attendant to registering the Registrable Securities pursuant to Section 4.2.1, but the Holders shall pay any and all underwriting commissions and the expenses of any legal counsel selected by the Holders to represent them in connection with the sale of the Registrable Securities. In the event of such a proposed registration, the Company shall furnish the then Holders of outstanding Registrable Securities with not less than thirty (30) days’ written notice prior to the proposed date of filing of such registration statement. Such notice to the Holders shall continue to be given for each registration statement filed by the Company until such time as all of the Registrable Securities have been sold by the Holder. The holders of the Registrable Securities shall exercise the “piggy-back” rights provided for herein by giving written notice within ten (10) days of the receipt of the Company’s notice of its intention to file a registration statement. Except as otherwise provided in this Purchase Warrant, there shall be no limit on the number of times the Holder may request registration under this Section 4.2.2; provided, however, that such registration rights shall terminate on the seventh (7th) anniversary of the Commencement Date.
4.3 General Terms.
4.3.1 Indemnification. The Company shall, to the fullest extent permitted by applicable laws, indemnify the Holders of the Registrable Securities to be sold pursuant to any registration statement hereunder and each person, if any, who controls such Holders within the meaning of Section 15 of the Securities Act or Section 20(a) of the Securities Exchange Act of 1934, as amended (“Exchange Act”), against all loss, claim, damage, expense or liability (including all reasonable attorneys’ fees and other expenses reasonably incurred in investigating, preparing or defending against any claim whatsoever) to which any of them may become subject under the Securities Act, the Exchange Act or otherwise, arising from such registration statement but only to the same extent and with the same effect as the provisions pursuant to which the Company has agreed to indemnify the Underwriters contained in Section 5.1 of the Underwriting Agreement between the Underwriters (as defined therein) and the Company, dated ________ ___, 2024 with respect to the Company’s initial public offering of the Shares. The Holders of the Registrable Securities to be sold pursuant to such registration statement, and their successors and assigns, shall severally, and not jointly, indemnify the Company, against all loss, claim, damage, expense or liability (including all reasonable attorneys’ fees and other expenses reasonably incurred in investigating, preparing or defending against any claim whatsoever) to which they may become subject under the Securities Act, the Exchange Act or otherwise, arising from information furnished by or on behalf of such Holders, or their successors or assigns, in writing, for specific inclusion in such registration statement to the same extent and with the same effect as the provisions contained in Section 5.2 of the Underwriting Agreement pursuant to which the Underwriters have agreed to indemnify the Company.
4.3.2 Exercise of Purchase Warrants. Nothing contained in this Purchase Warrant shall be construed as requiring the Holders to exercise their Purchase Warrants prior to or after the initial filing of any registration statement or the effectiveness thereof.
4.3.3 Documents Delivered to Holders. The Company shall furnish to each Holder participating in any of the foregoing offerings and to each underwriter of any such offering, if any, a signed counterpart, addressed to such Holder or underwriter, of: (i) an opinion of counsel to the Company, dated the effective date of such registration statement (and, if such registration includes an underwritten public offering, an opinion dated the date of the closing under any underwriting agreement related thereto), and (ii) a “cold comfort” letter dated the effective date of such registration statement (and, if such registration includes an underwritten public offering, a letter dated the date of the closing under the underwriting agreement) signed by the independent registered public accounting firm which has issued a report on the Company’s financial statements included in such registration statement, in each case covering substantially the same matters with respect to such registration statement (and the prospectus included therein) and, in the case of such accountants’ letter, with respect to events subsequent to the date of such financial statements, as are customarily covered in opinions of issuer’s counsel and in accountants’ letters delivered to underwriters in underwritten public offerings of securities. The Company shall also deliver promptly to each Holder participating in the offering requesting the correspondence and memoranda described below and to the managing underwriter, if any, copies of all correspondence between the Commission and the Company, its counsel or auditors and all memoranda relating to discussions with the Commission or its staff with respect to the registration statement and permit each Holder and underwriter to do such investigation, upon reasonable advance notice, with respect to information contained in or omitted from the registration statement as it deems reasonably necessary to comply with applicable securities laws or rules of FINRA. Such investigation shall include access to books, records and properties and opportunities to discuss the business of the Company with its officers and independent auditors, all to such reasonable extent and at such reasonable times as any such Holder shall reasonably request.
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4.3.4 Underwriting Agreement. The Company shall enter into an underwriting agreement with the managing underwriter(s), if any, selected by any Holders whose Registrable Securities are being registered pursuant to this Section 4, which managing underwriter shall be reasonably satisfactory to the Company. Such agreement shall be reasonably satisfactory in form and substance to the Company, each Holder and such managing underwriters, and shall contain such representations, warranties and covenants by the Company and such other terms as are customarily contained in agreements of that type used by the managing underwriter. The Holders shall be parties to any underwriting agreement relating to an underwritten sale of their Registrable Securities and may, at their option, require that any or all the representations, warranties and covenants of the Company to or for the benefit of such underwriters shall also be made to and for the benefit of such Holders. Such Holders shall not be required to make any representations or warranties to or agreements with the Company or the underwriters except as they may relate to such Holders, their Shares and their intended methods of distribution.
4.3.5 Documents to be Delivered by Holders. Each of the Holders participating in any of the foregoing offerings shall furnish to the Company a completed and executed questionnaire provided by the Company requesting information customarily sought of selling security holders.
4.3.6 Damages. Should the registration or the effectiveness thereof required by Sections 4.1 and 4.2 hereof be delayed by the Company or the Company otherwise fails to comply with such provisions, the Holders shall, in addition to any other legal or other relief available to the Holders, be entitled to obtain specific performance or other equitable (including injunctive) relief against the threatened breach of such provisions or the continuation of any such breach, without the necessity of proving actual damages and without the necessity of posting bond or other security.
4.4 Termination of Registration Rights. The registration rights afforded to the Holders under this Section 4 shall terminate on the earliest date when all Registrable Securities of such Holder either: (i) have been publicly sold by such Holder pursuant to a Registration Statement, (ii) have been covered by an effective Registration Statement on Form F-1 or Form F-3 (or successor form), which may be kept effective as an evergreen Registration Statement, or (iii) may be sold by the Holder within a 90-day period without registration pursuant to Rule 144 or consistent with applicable SEC interpretive guidance (including CD&I 201.04 (April 2, 2007) or similar interpretive guidance).
5. New Purchase Warrants to be Issued.
5.1 Partial Exercise or Transfer. Subject to the restrictions in Section 3 hereof, this Purchase Warrant may be exercised or assigned in whole or in part. In the event of the exercise or assignment hereof in part only, upon surrender of this Purchase Warrant for cancellation, together with the duly executed exercise or assignment form and funds sufficient to pay any Exercise Price and/or transfer tax if exercised pursuant to Section 2.1 hereto, the Company shall cause to be delivered to the Holder without charge a new Purchase Warrant of like tenor to this Purchase Warrant in the name of the Holder evidencing the right of the Holder to purchase the number of Shares purchasable hereunder as to which this Purchase Warrant has not been exercised or assigned.
5.2 Lost Certificate. Upon receipt by the Company of evidence satisfactory to it of the loss, theft, destruction or mutilation of this Purchase Warrant and of reasonably satisfactory indemnification or the posting of a bond, the Company shall execute and deliver a new Purchase Warrant of like tenor and date. Any such new Purchase Warrant executed and delivered as a result of such loss, theft, mutilation or destruction shall constitute a substitute contractual obligation on the part of the Company.
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6. Adjustments.
6.1 Adjustments to Exercise Price and Number of Securities. The Exercise Price and the number of Shares for which the Purchase Warrant may be exercised shall be subject to adjustment from time to time as hereinafter set forth, provided that in any event the adjusted Exercise Price shall not be below the par value of the Shares:
6.1.1 Share Dividends; Split Ups. If, after the date hereof, and subject to the provisions of Section 6.3 below, the number of issued and outstanding Shares is increased by a share dividend payable in Shares or by a split up of Shares or other similar event, then, on the effective day thereof, the number of Shares purchasable hereunder shall be increased in proportion to such increase in issued and outstanding Shares, and the Exercise Price shall be proportionately decreased.
6.1.2 Aggregation of Shares. If, after the date hereof, and subject to the provisions of Section 6.3 below, the number of issued and outstanding Shares is decreased by a consolidation, combination or reclassification of Shares or other similar event, then, on the effective date thereof, the number of Shares purchasable hereunder shall be decreased in proportion to such decrease in issued and outstanding Shares, and the Exercise Price shall be proportionately increased.
6.1.3 Replacement of Securities upon Reorganization, etc. In case of any reclassification or reorganization of the issued and outstanding Shares or a variation of share capital of the Company, other than a change covered by Section 6.1.1 or 6.1.2 or that solely affects the par value of such Shares, or in the case of any share reconstruction or amalgamation or consolidation of the Company with or into another corporation (other than a consolidation or share reconstruction or amalgamation in which the Company is the continuing corporation and that does not result in any reclassification or reorganization of the issued and outstanding Shares), or in the case of any sale or conveyance to another corporation or entity of the property of the Company as an entirety or substantially as an entirety in connection with which the Company is dissolved, the Holder of this Purchase Warrant shall have the right thereafter (until the expiration of the right of exercise of this Purchase Warrant) to receive upon the exercise hereof, for the same aggregate Exercise Price payable hereunder immediately prior to such event, the kind and amount of shares or other securities or property (including cash) receivable upon such reclassification, reorganization, share reconstruction or amalgamation, or consolidation, or upon a dissolution following any such sale or transfer, by a Holder of the number of Shares for which such Purchase Warrant might have been exercised immediately prior to such event; and if any reclassification also results in a change in Shares covered by Section 6.1.1 or 6.1.2, then such adjustment shall be made pursuant to Sections 6.1.1, 6.1.2 and this Section 6.1.3. The provisions of this Section 6.1.3 shall similarly apply to successive reclassifications, reorganizations, share reconstructions or amalgamations, or consolidations, sales or other transfers.
6.1.4 Changes in Form of Purchase Warrant. This form of Purchase Warrant need not be changed because of any change pursuant to this Section 6.1, and Purchase Warrants issued after such change may state the same Exercise Price and the same number of Shares as are stated in the Purchase Warrants initially issued pursuant to this Agreement. The acceptance by any Holder of the issuance of new Purchase Warrants reflecting a required or permissive change shall not be deemed to waive any rights to an adjustment occurring after the Commencement Date or the computation thereof.
6.2 Substitute Purchase Warrant. In case of any consolidation of the Company with, or share reconstruction or amalgamation of the Company with or into, another corporation (other than a consolidation or share reconstruction or amalgamation which does not result in any reclassification or change of the issued and outstanding Shares), the corporation formed by such consolidation or share reconstruction or amalgamation shall execute and deliver to the Holder a supplemental Purchase Warrant providing that the holder of each Purchase Warrant then issued and outstanding or to be issued and outstanding shall have the right thereafter (until the stated expiration of such Purchase Warrant) to receive, upon exercise of such Purchase Warrant, the kind and amount of shares and other securities and property receivable upon such consolidation or share reconstruction or amalgamation, by a holder of the number of Shares for which such Purchase Warrant might have been exercised immediately prior to such consolidation, share reconstruction or amalgamation, sale or transfer. Such supplemental Purchase Warrant shall provide for adjustments which shall be identical to the adjustments provided for in this Section 6. The above provision of this Section shall similarly apply to successive consolidations or share reconstructions or amalgamations.
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6.3 Elimination of Fractional Interests. The Company shall not be required to issue fractions of Shares upon the exercise of the Purchase Warrant, nor shall it be required to issue scrip or pay cash in lieu of any fractional interests, it being the intent of the parties that all fractional interests shall be eliminated by rounding any fraction up or down, as the case may be, to the nearest whole number of Shares or other securities, properties or rights.
7. Reservation and Listing. The Company shall at all times reserve and keep available out of its authorized Shares, solely for the purpose of issuance upon exercise of the Purchase Warrants, such number of Shares or other securities, properties or rights as shall be issuable upon the exercise thereof. The Company covenants and agrees that, upon exercise of the Purchase Warrants and payment of the Exercise Price therefor, in accordance with the terms hereby, all Shares and other securities issuable upon such exercise shall be duly and validly issued, fully paid and non-assessable (which term when used herein means that no further sums are required to be paid by the holders thereof in connection with the issue thereof) and not subject to preemptive rights of any shareholder. As long as the Purchase Warrants shall be outstanding, the Company shall use its commercially reasonable efforts to list (subject to official notice of issuance) on all national securities exchanges (or, if applicable, on the OTC Bulletin Board or any successor trading market) on which the Shares issued to the public in the Offering may then be listed and/or quoted.
8. Certain Notice Requirements.
8.1 Holder’s Right to Receive Notice. Nothing herein shall be construed as conferring upon the Holders the right to vote or consent or to receive notice as a shareholder for the election of directors or any other matter, or as having any rights whatsoever as a shareholder of the Company. If, however, at any time prior to the expiration of the Purchase Warrants and their exercise, any of the events described in Section 8.2 shall occur, then, in one or more of said events, the Company shall give written notice of such event at least fifteen (15) days prior to the date fixed as a record date or the date of closing the transfer books for the determination of the shareholders entitled to such dividend, distribution, conversion or exchange of securities or subscription rights, or entitled to vote on such proposed dissolution, liquidation, winding up or sale. Such notice shall specify such record date or the date of the closing of the transfer books, as the case may be. Notwithstanding the foregoing, the Company shall deliver to each Holder a copy of each notice given to the other shareholders of the Company at the same time and in the same manner that such notice is given to the shareholders.
8.2 Events Requiring Notice. The Company shall be required to give the notice described in this Section 8 upon one or more of the following events: (i) if the Company shall take a record of the holders of its Shares for the purpose of entitling them to receive a dividend or distribution payable otherwise than in cash, or a cash dividend or distribution payable otherwise than out of retained earnings, as indicated by the accounting treatment of such dividend or distribution on the books of the Company; (ii) the Company shall offer to all the holders of its Shares any additional shares of the Company or securities convertible into or exchangeable for shares of the Company, or any option, right or warrant to subscribe therefor; or (iii) a dissolution, liquidation or winding up of the Company (other than in connection with a consolidation or share reconstruction or amalgamation) or a sale of all or substantially all of its property, assets and business shall be proposed.
8.3 Notice of Change in Exercise Price. The Company shall, promptly after an event requiring a change in the Exercise Price pursuant to Section 6 hereof, send notice to the Holders of such event and change (“Price Notice”). The Price Notice shall describe the event causing the change and the method of calculating same and shall be certified as being true and accurate by the Company’s Chief Financial Officer.
8.4 Transmittal of Notices. All notices, requests, consents and other communications under this Purchase Warrant shall be in writing and shall be deemed to have been duly made when hand delivered or mailed by express mail or private courier service: (i) if to the registered Holder of the Purchase Warrant, to the address of such Holder as shown on the books of the Company, or (ii) if to the Company, to following address or to such other address as the Company may designate by notice to the Holders:
If to the Holder:
R.F. Lafferty & Co., Inc.
40 Wall St.
New York, NY 10004
Attention: Robert Hackel, Chief Operating Officer
E-Mail: info@rflafferty.com
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with a copy (which shall not constitute notice) to:
Ellenoff Grossman & Schole LLP
1345 Avenue of the Americas
New York, New York 10105
Attention: Barry I. Grossman, Esq.
Email: bigrossman@egsllp.com
Facsimile: (212) 370-7889
If to the Company:
CONCORDE INTERNATIONAL GROUP LTD
3 Ang Mo Kio Street 62, #01-49 LINK@AMK
Singapore 569139
Attention: Swee Kheng Chua, Chief Executive Officer
E-mail: alan.chua@concorde.com.sg
with a copy (which shall not constitute notice) to:
Bevilacqua PLLC
1050 Connecticut Ave NW #500
Washington, DC 20036
Attention: Louis Bevilacqua, Esq.
E-mail: lou@bevilacquapllc.com
9. Miscellaneous.
9.1 Amendments. The Company and R.F. Lafferty may from time to time supplement or amend this Purchase Warrant without the approval of any of the Holders in order to cure any ambiguity, to correct or supplement any provision contained herein that may be defective or inconsistent with any other provisions herein, or to make any other provisions in regard to matters or questions arising hereunder that the Company and R.F. Lafferty may deem necessary or desirable and that the Company and R.F. Lafferty deem shall not adversely affect the interest of the Holders. All other modifications or amendments shall require the written consent of and be signed by the party against whom enforcement of the modification or amendment is sought.
9.2 Headings. The headings contained herein are for the sole purpose of convenience of reference and shall not in any way limit or affect the meaning or interpretation of any of the terms or provisions of this Purchase Warrant.
9.3 Entire Agreement. This Purchase Warrant (together with the other agreements and documents being delivered pursuant to or in connection with this Purchase Warrant) constitutes the entire agreement of the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings of the parties, oral and written, with respect to the subject matter hereof.
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9.4 Binding Effect. This Purchase Warrant shall inure solely to the benefit of and shall be binding upon, the Holder and the Company and their permitted assignees, respective successors, legal representative and assigns, and no other person shall have or be construed to have any legal or equitable right, remedy or claim under or in respect of or by virtue of this Purchase Warrant or any provisions herein contained.
9.5 Governing Law; Submission to Jurisdiction; Trial by Jury. This Purchase Warrant shall be governed by and construed in accordance with the law of the State of New York. The Company hereby agrees that any action, proceeding or claim against it arising out of, or relating in any way to this Purchase Warrant shall be brought and enforced in the Supreme Court of the State of New York sitting in the County of New York, or in the United States District Court for the Southern District of New York, and irrevocably submits to the jurisdiction of such courts and the appellate courts therefrom, which jurisdiction shall be exclusive. The Company hereby waives any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum. Any process or summons to be served upon the Company may be served by transmitting a copy thereof by registered or certified mail, return receipt requested, postage prepaid, addressed to it at the address set forth in Section 8 hereof. Such mailing shall be deemed personal service and shall be legal and binding upon the Company in any action, proceeding or claim. The Company and the Holder agree that the prevailing party(ies) in any such action shall be entitled to recover from the other party(ies) all of its reasonable attorneys’ fees and expenses relating to such action or proceeding and/or incurred in connection with the preparation therefor. The Company (on its behalf and, to the extent permitted by applicable law, on behalf of its shareholders and affiliates) and the Holder hereby irrevocably waive, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Purchase Warrant or the transactions contemplated hereby.
9.6 Waiver, etc. The failure of the Company or the Holder to at any time enforce any of the provisions of this Purchase Warrant shall not be deemed or construed to be a waiver of any such provision, nor to in any way affect the validity of this Purchase Warrant or any provision hereof or the right of the Company or any Holder to thereafter enforce each and every provision of this Purchase Warrant. No waiver of any breach, non-compliance or non-fulfillment of any of the provisions of this Purchase Warrant shall be effective unless set forth in a written instrument executed by the party or parties against whom or which enforcement of such waiver is sought; and no waiver of any such breach, non-compliance or non-fulfillment shall be construed or deemed to be a waiver of any other or subsequent breach, non-compliance or non-fulfillment.
9.7 Execution in Counterparts. This Purchase Warrant may be executed in one or more counterparts, and by the different parties hereto in separate counterparts, each of which shall be deemed to be an original, but all of which taken together shall constitute one and the same agreement, and shall become effective when one or more counterparts has been signed by each of the parties hereto and delivered to each of the other parties hereto. Such counterparts may be delivered by facsimile transmission or other electronic transmission.
9.8 Exchange Agreement. As a condition of the Holder’s receipt and acceptance of this Purchase Warrant, Holder agrees that, at any time prior to the complete exercise of this Purchase Warrant by Holder, if the Company and R.F. Lafferty enter into an agreement (“Exchange Agreement”) pursuant to which they agree that all outstanding Purchase Warrants will be exchanged for securities or cash or a combination of both, then Holder shall agree to such exchange and become a party to the Exchange Agreement.
[Signature Page Follows]
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IN WITNESS WHEREOF, the Company has caused this Purchase Warrant to be signed by its duly authorized officer as of the ____ day of _______, 2024.
CONCORDE INTERNATIONAL GROUP LTD
| By: | ||
| Name: | ||
| Title: |
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[Form to be used to exercise Purchase Warrant]
Date: __________, 20___
The undersigned hereby elects irrevocably to exercise the Purchase Warrant for ______, par value $0.00001 per share (the “Shares”), Class A Ordinary Share(s) of CONCORDE INTERNATIONAL GROUP LTD (collectively with its subsidiaries and affiliates, including, without limitation, all entities disclosed or described in the Registration Statement as being subsidiaries (the “Company”), and hereby makes payment of $____ (at the rate of $____ per Share) in payment of the Exercise Price pursuant thereto. Please issue the Shares as to which this Purchase Warrant is exercised in accordance with the instructions given below and, if applicable, a new Purchase Warrant representing the number of Shares for which this Purchase Warrant has not been exercised.
or
The undersigned hereby elects irrevocably to convert its right to purchase Shares of the Company under the Purchase Warrant for ______ Shares, as determined in accordance with the following formula:
| X | = |
Y(A-B) A |
|
| Where, | |||
| X | = | The number of Shares to be issued to Holder; | |
| Y | = | The number of Shares for which the Purchase Warrant is being exercised; | |
| A | = | The fair market value of one Share which is equal to $_____; and | |
| B | = | The Exercise Price which is equal to $______ per share |
The undersigned agrees and acknowledges that the calculation set forth above is subject to confirmation by the Company and any disagreement with respect to the calculation shall be resolved by the Company in its sole discretion.
Please issue the Shares as to which this Purchase Warrant is exercised in accordance with the instructions given below and, if applicable, a new Purchase Warrant representing the number of Shares for which this Purchase Warrant has not been exercised.
Signature _______________________________________
Signature Guaranteed ______________________________
INSTRUCTIONS FOR REGISTRATION OF SECURITIES
| Name: | |
| (Print in Block Letters) |
| Address: | |
NOTICE: The signature to this form must correspond with the name as written upon the face of the Purchase Warrant without alteration or enlargement or any change whatsoever, and must be guaranteed by a bank, other than a savings bank, or by a trust company or by a firm having membership on a registered national securities exchange.
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[Form to be used to assign Purchase Warrant]
ASSIGNMENT
(To be executed by the registered Holder to effect a transfer of the within Purchase Warrant):
FOR VALUE RECEIVED, __________________ does hereby sell, assign and transfer unto______________ the right to purchase ______ Class A Ordinary Shares, par value $0.00001 per share (the “Shares”), of the Ordinary Share of CONCORDE INTERNATIONAL GROUP LTD (collectively with its subsidiaries and affiliates, including, without limitation, all entities disclosed or described in the Registration Statement as being subsidiaries (the “Company”), evidenced by the Purchase Warrant and does hereby authorize the Company to transfer such right on the books of the Company.
Dated: __________, 20__
| Signature |
| Signature Guaranteed |
NOTICE: The signature to this form must correspond with the name as written upon the face of the within Purchase Warrant without alteration or enlargement or any change whatsoever, and must be guaranteed by a bank, other than a savings bank, or by a trust company or by a firm having membership on a registered national securities exchange.
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EXHIBIT B
Form of Lock-Up Agreement
_______, 2024
R.F. Lafferty & Co., Inc.
40 Wall St.
New York, NY 10004
| Re: | Underwriting Agreement (the “Underwriting Agreement”) between CONCORDE INTERNATIONAL GROUP LTD, a British Virgin Islands business company (the “Company”), R.F. Lafferty & Co., Inc. (“R.F. Lafferty”), (the “Representative”, and together with the underwriters named on Schedule 1 thereto, the “Underwriters”), as representative of the several Underwriters. |
Ladies and Gentlemen:
The undersigned, an officer and/or director and/or any other holder(s) of the Company’s Class A Ordinary Share, par value $0.00001 per share (the “Ordinary Share”), or rights to acquire shares of Ordinary Share, understands that you, as representatives of the several Underwriters, propose to enter into an underwriting agreement with the Company, providing for the initial public offering (the “Offering”) by the several Underwriters of the Ordinary Share pursuant to a registration statement on Form F-1 filed by the Company with the Securities and Exchange Commission (the “Commission”) pursuant to the Securities Act of 1933, as amended (the “Securities Act”). Defined terms used herein and not otherwise defined in this letter agreement (this “Letter Agreement”) shall have the meanings set forth in the Underwriting Agreement.
In consideration of the Underwriters’ agreement to enter into the Underwriting Agreement and to proceed with the Offering, and for other good and valuable consideration receipt and sufficiency of which is hereby acknowledged, the undersigned hereby agrees that, without the prior written consent of the Representative, the undersigned will not, and will not cause any direct or indirect affiliate to, during the period beginning on the date of this Letter Agreement and ending at the close of business 180 days after the date on which the Underwriting Agreement is signed (the “Restricted Period”), directly or indirectly offer, sell, contract to sell, hypothecate, pledge, grant any option, right, or warrant to purchase, lend or otherwise dispose of (or enter into any transaction which is designed to, or might reasonably be expected to, result in the disposition (whether by actual disposition or effective economic disposition due to cash settlement or otherwise) by the undersigned or any affiliate of the undersigned or any person in privity directly or indirectly with the undersigned or with any affiliate of the undersigned), or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), with respect to, any Ordinary Share, any warrant or option to purchase the Ordinary Share or any other security of the Company or any other entity that is convertible into or exchangeable or exercisable for the Ordinary Share or any other equity security of the Company (“Relevant Securities”) beneficially owned, held or hereafter acquired by the undersigned (the Relevant Securities so beneficially owned, held or acquired being, the “Restricted Securities”) or publicly disclose an intention to do any of the foregoing. Beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act.
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In furtherance of the obligations of the undersigned under this Letter Agreement, the undersigned hereby authorizes the Company during the Restricted Period to cause any transfer agent for the Relevant Securities to decline to transfer, and to note stop transfer restrictions on the share register and other records relating to, Relevant Securities for which the undersigned is the record owner and the transfer of which would be a violation of this Letter Agreement and, in the case of Relevant Securities for which the undersigned is the beneficial but not the record owner, agrees that during the Restricted Period it will use its reasonable best efforts to cause the record owner to authorize the Company to cause the relevant transfer agent to decline to transfer, and to note stop transfer restrictions on the share register and other records relating to, such Restricted Securities to the extent such transfer would be a violation of this Agreement.
The Representative may consent to an early release from the Restricted Period if, in its sole and absolute discretion, the market for the Ordinary Share would not be adversely impacted by sales of Relevant Securities and in cases of financial emergency. The restrictions contained in this Letter Agreement shall not apply to securities to be sold pursuant to the Underwriting Agreement on behalf of the undersigned, if any.
Notwithstanding the foregoing, and subject to the conditions below, the undersigned may transfer the Restricted Securities provided that, in the case of clauses (i) to (vii) below (1) the Company receives a signed lock-up letter agreement (in the form of this Letter Agreement) for the balance of the Restricted Period from each donee, trustee, distributee, or transferee, as the case may be, prior to such transfer, (2) any such transfer shall not involve a disposition for value, (3) such transfer is not required to be reported with the Commission in accordance with the Exchange Act and no report of such transfer shall be made voluntarily, and (4) neither the undersigned nor any donee, trustee, distributee or transferee, as the case may be, otherwise voluntarily effects any public filing or report regarding such transfers, with respect to transfer:
| i) | as a bona fide gift or gifts; |
| ii) | to any immediate family member or to any trust for the direct or indirect benefit of the undersigned or the immediate family of the undersigned (for purposes of this Letter Agreement, “immediate family” shall mean any relationship by blood, marriage or adoption, not more remote than first cousin); by will, other testamentary document, or intestacy; |
| iii) | to any corporation, partnership, limited liability company, or other business entity of which the undersigned and/or one or more members of the immediate family of the undersigned are, directly or indirectly, the legal and beneficial owner of all of the outstanding equity securities or similar interests; |
| iv) | if the undersigned is a corporation, partnership, limited liability company, trust or other business entity (a) to another corporation, partnership, limited liability company, trust or other business entity that is a direct or indirect affiliate (as defined in Rule 405 under the Securities Act) of the undersigned, or to any investment fund or other entity controlling, controlled by, managing or managed by or under common control with the undersigned or affiliates of the undersigned (including, for the avoidance of doubt, where the undersigned is a partnership, to its general partner or a successor partnership or fund, or any other funds managed by such partnership), (b) in the form of a distribution to limited partners, limited liability company members, shareholders of the undersigned or holders of similar equity interests in the undersigned or (c) in connection with a sale, merger or transfer of all or substantially all of the assets of the undersigned or any other change of control of the undersigned, not undertaken for the purpose of avoiding the restrictions imposed by this Letter Agreement; |
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| v) | if the undersigned is a trust, to the beneficiary of such trust; |
| vi) | by will, other testamentary document or intestate succession to the legal representative, heir, beneficiary or a member of the immediate family of the undersigned; |
| vii) | by operation of law, such as pursuant to a qualified domestic order or in connection with a divorce settlement or decree, separation agreement, or court order; |
| viii) | pursuant to the Underwriting Agreement; |
| ix) | to the Company solely in an amount necessary to satisfy tax obligations (withholding or otherwise) in connection with any grant of restricted Ordinary Share, exercise or vesting of options or warrants to purchase Ordinary Share, and |
| x) | of securities purchased in open market transactions after the Closing Date, provided that no filing under Section 16(a) of the Exchange Act is required and no such filing is voluntarily made. |
In addition, notwithstanding the foregoing, this Letter Agreement shall not restrict the delivery of the Ordinary Share to the undersigned upon (i) exercise of any options, settle any restricted share units or other equity awards granted under any employee benefit plan or other equity compensation arrangements of the Company; (ii) the exercise of warrants, or (iii) conversion of issued and outstanding preferred shares, warrants to acquire preferred shares or convertible securities or warrants to acquire the Ordinary Share into the Ordinary Share, provided, in each case, that any Ordinary Share or Restricted Securities acquired in connection with any such exercise, settlement or conversion will be subject to the restrictions set forth in this Letter Agreement.
Furthermore, the undersigned may enter into any new plan established in compliance with Rule 10b5-1 of the Exchange Act; provided that (i) such plan may only be established if no public announcement or filing with the Commission, or other applicable regulatory authority, is made in connection with the establishment of such plan during the Restricted Period and (ii) no sale of the Ordinary Share are made pursuant to such plan during the Restricted Period.
In addition, the undersigned further agrees that, except for the registration statement filed or to be filed in connection with the Offering, during the Restricted Period, the undersigned will not, without the prior written consent of the Representative: (a) file or participate in the filing with the Commission of any registration statement or circulate, or participate in the circulation of, any preliminary or final prospectus or other disclosure document, in each case with respect to any proposed offering or sale of a Relevant Security beneficially owned by the undersigned, or (b) exercise any rights the undersigned may have to require registration with the Commission of any proposed offering or sale of a Relevant Security beneficially owned by the undersigned.
The undersigned acknowledges and understands that the execution, delivery and performance of this Letter Agreement is a material inducement to the Underwriters to enter into and to perform the transactions contemplated by the Underwriting Agreement, that the Underwriters are proceeding with the Offering in reliance upon this Letter Agreement and that the Company shall be entitled to specific performance of the obligations of the undersigned in this Letter Agreement.
The undersigned hereby represents and warrants that (a) the undersigned has full power and authority to execute, deliver and perform this Letter Agreement, (b) this Letter Agreement has been duly authorized (if the undersigned is not a natural person) or, in the case of a natural person, such person has the legal capacity to enter into this Letter Agreement; (c) this Agreement constitutes the legal, valid and binding obligation of the undersigned, enforceable against the undersigned in accordance with its terms and (d) the undersigned has received adequate consideration therefor and that the undersigned will indirectly benefit from the closing of the transactions contemplated by the Underwriting Agreement.
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The undersigned understands that, if the Underwriting Agreement does not become effective, or if the Underwriting Agreement (other than the provisions thereof which survive termination) shall terminate or be terminated prior to payment for and delivery of the securities to be sold thereunder, the undersigned shall be released from all obligations under this Agreement.
This Letter Agreement may not be amended or otherwise modified in any respect without the written consent of the Representative, the Company and the undersigned.
This Letter Agreement shall be binding on successors and assigns of the undersigned with respect to the Restricted Securities.
This Letter Agreement shall be governed by and construed in accordance with the law of the State of New York.
The undersigned hereby irrevocably submits to the exclusive jurisdiction of the United States District Court for the Southern District of New York and the courts of the State of New York located in the City and County of New York and to the appellate courts therefrom, for the purposes of any suit, action or proceeding arising out of or relating to this Letter Agreement, and hereby waives, and agrees not to assert in any such suit, action or proceeding, any claim that (i) it is not personally subject to the jurisdiction of such court, (ii) the suit, action or proceeding is brought in an inconvenient forum, or (iii) the venue of the suit, action or proceeding is improper. The undersigned hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by receiving a copy thereof sent to the Company at the address in effect for notices to it under the Underwriting Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. The undersigned hereby waives any right to a trial by jury. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law.
[Signature Page Follows]
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| Very truly yours, | |
| Signature | |
| Print Name | |
| Position in Company, if any |
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EXHIBIT C
Form of Press Release
CONCORDE INTERNATIONAL GROUP LTD
[Date]
CONCORDE INTERNATIONAL GROUP LTD (the “Company”) announced today that R.F. Lafferty & Co., Inc., acting as representative for the underwriters in the Company’s recent public offering of _______ Class A Ordinary Share of the Company (“Shares”), par value $ ____ per Share, are [waiving] [releasing] a lock-up restriction with respect to _______ Shares held by [certain officers or directors] [an officer or director] of the Company. The [waiver] [release] will take effect on _______, 20___, and such Shares may be sold on or after such date.
This press release is not an offer or sale of the securities in the United States or in any other jurisdiction where such offer or sale is prohibited, and such securities may not be offered or sold in the United States absent registration or an exemption from registration under the Securities Act of 1933, as amended.
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Exhibit 5.1
17 September 2024
|
CONCORDE INTERNATIONAL GROUP LTD 3 Ang Mo Kio Street 62 #01-49 LINK@AMK Singapore 569139 |
Matter No. 865841 Doc Ref: 109563310
Direct line: (852) 2842 9530 Email: Richard.Hall@conyers.com |
Dear Sirs,
Re: CONCORDE INTERNATIONAL GROUP LTD (the “Company”)
We have acted as special British Virgin Islands legal counsel to the Company in connection with the Company’s registration statement on form F-1 (File No. 333-281799), including all amendments or supplements thereto, as filed with the U.S. Securities and Exchange Commission (the “Commission”) on 27 August 2024 (the “Registration Statement”, which term does not include any other document or agreement whether or not specifically referred to therein or attached as an exhibit or schedule thereto) relating to the registration under the U.S. Securities Act of 1933, as amended, (the “Securities Act”) of class A ordinary shares, par value US$0.00001 each (the "Class A Ordinary Shares") of the Company. The Registration Statement contains a prospectus (the “Prospectus”), to be used for the public offering by the Company of 1,250,000 Class A Ordinary Shares, together with the over-allotment option for a period of 45 days from the closing of the public offering for the underwriter(s) to purchase up to 15% additional Class A Ordinary Shares sold in the public offering (collectively, the “IPO Shares”).
| 1. | DOCUMENTS REVIEWED |
For the purposes of giving this opinion, we have examined the following document(s):
| 1.1. | a copy of the Registration Statement; |
| 1.2. | a copy of the certificate of incorporation, the second amended and restated memorandum of association and the second amended and restated articles of association of the Company (the “Listing M&A”), as obtained from the Registrar of Corporate Affairs at 3.00 p.m. on 12 September 2024; |
| 1.3. | copies of resolutions in writing signed by all the directors of the Company and dated 11 March 2024, 17 June 2024, 26 August 204 and 13 September 2024 (the “Resolutions”); |
| 1.4. | a copy of a certificate of good standing issued by the Registrar of Corporate Affairs and dated 12 September 2024; |
| 1.5. | a copy of the register of members of the Company certified by the assistant secretary of the Company on 13 September 2024; and |
| 1.6. | such other documents and made such enquiries as to questions of law as we have deemed necessary in order to render the opinion set forth below. |
| 2. | ASSUMPTIONS |
We have assumed
| 2.1. | the genuineness and authenticity of all signatures and the conformity to the originals of all copies (whether or not certified) examined by us and the authenticity and completeness of the originals from which such copies were taken; |
| 2.2. | that where a document has been examined by us in draft form, it will be or has been executed in the form of that draft, and where a number of drafts of a document have been examined by us all changes thereto have been marked or otherwise drawn to our attention; |
| 2.3. | the accuracy and completeness of all factual representations made in the Registration Statement, the Prospectus and other documents reviewed by us; |
| 2.4. | that the Resolutions were passed at one or more duly convened, constituted and quorate meetings or by unanimous written resolutions, remain in full force and effect and have not been rescinded or amended; |
| 2.5. | that there is no provision of the law of any jurisdiction, other than the British Virgin Islands, which would have any implication in relation to the opinions expressed herein; |
| 2.6. | the validity and binding effect under the laws of the United States of America of the Registration Statement and the Prospectus and that the Registration Statement and the Prospectus will be duly filed and/or declared effective by with the Commission; |
| 2.7. | that the Listing M&A remain in full force and effect and have not been amended; |
| 2.8. | that the Company will have sufficient authorised but unissued Class A Ordinary Shares in its share capital to effect the issue of any of the Class A Ordinary Shares at all relevant time; |
| 2.9. | that on the date of any issue of Class A Ordinary Shares, the Company is, and after any such issue of Class A Ordinary Shares, the Company is and will be able to, pay its debts; and |
| 2.10. | that upon issue of any Class A Ordinary Shares to be sold by the Company, the Company will receive consideration for the full issue price thereof which shall be equal to at least the par value thereof. |
| 3. | QUALIFICATIONS |
| 3.1. | We have made no investigation of and express no opinion in relation to the laws of any jurisdiction other than the British Virgin Islands. This opinion is to be governed by and construed in accordance with the laws of the British Virgin Islands and is limited to and is given on the basis of the current law and practice in the British Virgin Islands. This opinion is issued solely for your benefit and use in connection with the matter described herein and is not to be relied upon by any other person, firm or entity or in respect of any other matter. |
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| 4. | OPINION |
On the basis of and subject to the foregoing, we are of the opinion that:
| 1. | The Company is duly incorporated and existing under the laws of the British Virgin Islands in good standing (meaning solely that it has not failed to make any filing with any British Virgin Islands governmental authority, or to pay any British Virgin Islands government fee or tax, which would make it liable to be struck off the Register of Companies and thereby cease to exist under the laws of the British Virgin Islands). |
| 2. | The allotment and issue of the Class A Ordinary Shares have been duly authorised. When issued and paid for as contemplated by the Registration Statement and entered in the register of members of the Company, the IPO Shares will be validly issued, fully paid and non-assessable (which term when used herein means that no further sums are required to be paid by the holders thereof in connection with the issue thereof). |
| 3. | Based solely on our review of the Certified Register of Members, as at 13 September 2024, each of the shareholders of the Company was the registered holder of the number of Class B ordinary shares par value US$0.00001 of the Company (the “Class B Ordinary Shares”) set against their name in the Schedule and such Class B Ordinary Shares are validly issued, fully paid and non-assessable (which term when used herein means that no further sums are required to be paid by the holders thereof in connection with the issue of such shares) |
We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and the references to our firm under the captions “Enforcement of Civil Liabilities” and “Legal Matters” in the Prospectus. In giving this consent, we do not hereby admit that we are experts within the meaning of Section 11 of the Securities Act or that we are within the category of persons whose consent is required under Section 7 of the Securities Act or the Rules and Regulations of the Commission promulgated thereunder.
| Yours faithfully, | |
| /s/ Conyers Dill & Pearman | |
| Conyers Dill & Pearman |
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Schedule
| Name of shareholder | Number of Class B Ordinary Shares | |||
| Yap Wing Khai Terence | 250,000 | |||
| CHUA Swee Kheng | 18,000,000 | |||
| ONG Sze Yin | 46,296 | |||
| OMAR Sharifah Noriati Binte Said | 185,185 | |||
| LIM Ping Ping | 377,775 | |||
| CHUA Jia Wei | 14,815 | |||
| PANG Meang Fai | 14,815 | |||
| Weilekai Investments Pte Ltd | 2,000,000 | |||
| TOTAL | 20,888,886 | |||
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Exhibit 5.2
E: lou@bevilacquapllc.com
T: 202.869.0888
W: bevilacquapllc.com
September 17, 2024
CONCORDE INTERNATIONAL GROUP LTD
3 Ang Mo Kio Street 62, #01-49 LINK@AMK
Singapore 569139
| Re: | Securities Being Registered Under Registration Statement on Form F-1 |
Ladies and Gentlemen:
We have acted as United States counsel to Concorde International Group Ltd, a British Virgin Islands business company (the “Company”), in connection with the registration by the Company with the United States Securities and Exchange Commission (the “Commission”) of (i) the proposed underwritten public offering of $5,750,000 class A ordinary shares with a par value of US$0.00001 each (collectively, the “Class A Ordinary Shares”), including $750,000 Class A Ordinary Shares that may be issued upon the full exercise of the underwriters’ over-allotment option, (ii) warrants to purchase $172,500 Class A Ordinary Shares (the “Underwriter’s Warrants”), including $22,500 Class A Ordinary Shares that may be purchased upon the full exercise of the underwriters’ over-allotment option, issuable to the representative of the underwriters of such offering or its designees, and (iii) the Class A Ordinary Shares issuable upon exercise of the Underwriter’s Warrants, pursuant to a Registration Statement on Form F-1 (File No. 333-281799) initially filed by the Company with the Commission on August 27, 2024 (as amended, the “Registration Statement”). This opinion is being given in accordance with the Legal Matters section of the Registration Statement, as it pertains to the portions of New York law set forth below. This opinion does not cover the authorization and valid issuance or execution and delivery of the Class A Ordinary Shares or Underwriter’s Warrants under British Virgin Islands law, which are the subject of opinion of other counsel.
We have examined such documents and considered such legal matters as we have deemed necessary and relevant as the basis for the opinion set forth below. In rendering the opinion expressed herein, we have, without independent inquiry or investigation, assumed (i) the legal capacity of all natural persons executing documents, (ii) the genuineness of all signatures, (iii) the authenticity, accuracy and completeness of all documents submitted to us as originals and the conformity to authentic original documents submitted to us as certified, conformed or reproduced copies. We have relied upon the accuracy and completeness of the information, factual matters, representations, and warranties contained in such documents. We have also assumed that the persons identified as officers of the Company are actually serving in such capacity and that the Registration Statement will be declared effective. In our examination of documents, we have assumed that the parties thereto had the power, corporate or other, to enter into and perform all obligations thereunder and the due authorization by all requisite action, corporate or other, the execution and delivery by all parties of the documents, and the validity and binding effect thereof on such parties.
As to questions of fact material to this opinion, we have, to the extent deemed appropriate, relied upon certain representations of certain officers and employees of the Company.
Based upon and subject to the foregoing, we are of the opinion that, assuming the Underwriter’s Warrants have been duly authorized, executed and delivered by the Company in accordance with the laws of British Virgin Islands, when the Registration Statement becomes effective under the Securities Act of 1933, as amended (the “Act”), and when such Underwriter’s Warrants are duly executed and authenticated in accordance with their terms and issued and delivered, as contemplated by the Registration Statement and the underwriting agreement by and between the Company and the representative of the underwriters, such Underwriter’s Warrants will constitute the valid and legally binding obligations of the Company, enforceable in accordance with their terms, except: (a) as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally and by general equitable principles (regardless of whether enforceability is considered in a proceeding in equity or at law); (b) as enforceability of any indemnification or contribution provision may be limited under the federal and state securities laws, and (c) that the remedy of specific performance and injunctive and other forms of equitable relief may be subject to the equitable defenses and to the discretion of the court before which any proceeding therefor may be brought, and provided that we express no opinion as to the validity, legally binding effect or enforceability of any provision in the Underwriter’s Warrants that requires or relates to adjustments to the exercise price at a price or in an amount that a court would determine in the circumstances under applicable law to be commercially unreasonable or a penalty or forfeiture.
Mr. Bevilacqua is admitted to practice law in the District of Columbia, New York and Connecticut
1050 Connecticut Ave., NW, Suite 500
Washington, DC 20036
PG. 2
September 17, 2024 |
 |
Notwithstanding anything in this letter which might be construed to the contrary, our opinion expressed herein is limited to the laws of the State of New York. We express no opinion with respect to the applicability to, or the effect on, the subject transaction of the laws of any other jurisdiction or as to any matters of municipal law or the laws of any local agencies within any state other than the State of New York. The opinion expressed herein is based upon the law of the State of New York in effect on the date hereof and as of the effective date of the Registration Statement, and we assume no obligation to revise or supplement this opinion after the effective date of the Registration Statement should such law be changed by legislative action, judicial decision, or otherwise. Except as expressly set forth in our opinion above: (i) we express no opinion as to whether the laws of any other jurisdiction are applicable to the subject matter hereof, and (ii) we express no opinion as to compliance with any other federal or state law, rule or regulation relating to securities, or to the sale or issuance thereof.
We hereby consent to the use of this opinion as an exhibit to the Registration Statement, to the use of our name as the Company’s United States counsel and to all references made to us in the Registration Statement and in the prospectuses forming a part thereof. In giving this consent, we do not hereby admit that we are in the category of persons whose consent is required under Section 7 of the Act, or the rules and regulations promulgated thereunder. This opinion is given as of the effective date of the Registration Statement, and we are under no duty to update the opinions contained herein.
| Very truly yours, | |
| /s/ Bevilacqua PLLC | |
| Bevilacqua PLLC |
Exhibit 5.3
| Lawyer | : | Joseph Li | |
| Telephone | : | +65 8860 4013 | |
| : | josephli@rethinklegal.co | ||
| Our ref | : | 24010/CS | |
| Your ref | : | FILE NO. 333-281799 |
16 September 2024
| To: Concorde International Group Ltd | BY EMAIL |
| 3 Ang Mo Kio Street 62 | |
| #01-49 | |
| LINK@AMK | |
| Singapore 569139 |
Attention: The Board of Directors
Dear Sirs and Madams,
CONCORDE INTERNATIONAL GROUP LTD – FORM F-1 (FILE NO. 333-281799), REGISTRATION STATEMENT UNDER THE U.S. SECURITIES ACT OF 1933
We are a Singapore Law Practice and are qualified to issue this legal opinion on the laws and regulations of Singapore.
We have acted as the Singapore legal counsel for Concorde International Group Ltd, an exempted company incorporated under the laws of the British Virgin Islands (the “Company”), in connection with (i) the initial public offering (the “Offering”) of a certain number of Class A ordinary shares, par value $0.00001 per share (the “Class A Ordinary Shares”) by the Company, as set forth in the Company’s registration statement on Form F-1, including all amendments or supplements thereto, filed by the Company with the Securities and Exchange Commission (the “SEC”) under the U.S. Securities Act of 1933, as amended (the “Securities Act”), in relation to the Offering, and (ii) the Company’s proposed listing of its Class A Ordinary Shares on the Nasdaq Stock Market LLC.
ReThink Legal
1 North Bridge Road, #08-8 High Street Centre, Singapore 179094
We do not accept service of court documents by fax. Please contact us directly at +65 8860 4013 to make arrangements with us for the mailing and/or service of all hardcopy documents.
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| A. | Introduction |
| 1. | We have been engaged by the Company as their Singapore legal counsel to review and comment on the following sections of the Registration Statement on Form F-1 (the “Registration Statement”) submitted by the Company to the United States SEC on 16 September 2024: |
| (a) | Prospectus Summary (pages 1 to 12); |
| (b) | Risk Factors (pages 13 to 30); |
| (c) | Corporate History and Structure (pages 56 to 57); |
| (d) | Regulations of Our Industry (pages 67 to 68); |
| (e) | Certain Singapore Taxation Considerations (pages 95 to 97); |
| (f) | Enforceability of Civil Liabilities (page 98); and |
| (g) | Legal Matters (page 109). |
| 2. | This letter is being rendered solely to the Company in connection with the filing of the Registration Statement. |
| B. | Documents |
| 3. | We have examined the following documents to the extent necessary for rendering this letter only: |
| (a) | The Registration Statement dated 12 September 2024 (including all amendments or supplements thereto, in relation to the Offering that were provided to us), specifically the seven (7) sections detailed in paragraph 1 only; |
| (b) | Certificate of Incumbency of the Company dated 16 May 2023; |
| (c) | Certificate of Incorporation of the Company dated 2 May 2023; |
| (d) | Second Amended and Restated Memorandum of Association and Articles of Association of the Company as amended and adopted by written resolutions passed on 14 March 2024; |
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| (e) | Business profile of Concorde International Group Pte Ltd (Singapore) issued by the Accounting and Corporate Regulatory Authority of Singapore (“ACRA”) dated 17 May 2024; |
| (f) | Business profile of Concorde Security Pte Ltd (Singapore) issued by ACRA dated 24 February 2024; |
| (g) | Business profile of Concorde Asia Pte Ltd (Singapore) issued by ACRA dated 26 December 2023; |
| (h) | Business profile of Berjaya Academy Pte Ltd (Singapore) issued by ACRA dated 26 December 2023; and |
| (i) | Email from Chee FM & Associates (Public Accounts & Chartered Accounts Singapore) dated 8 July 2024 regarding Singapore tax law. |
(collectively, the “Reviewed Documents”)
| 4. | Other than the Reviewed Documents, we have not reviewed any other document or carried out any other enquiries or investigation (including without limitation, any due diligence on the business and operations of the Company and its operating subsidiaries in Singapore) for the purposes of rendering this letter. |
| 5. | This letter is accordingly subject to there not being any document(s) not reviewed by us or any information not disclosed to us that if so reviewed by or disclosed to us, would require us to update this letter and/or make any further inquiry and/or investigation which would be necessary or appropriate in our opinion. |
| C. | Assumptions |
| 6. | For the purposes of this letter, we have assumed (without making any investigation) the following: |
| (a) | All factual statements (express or implied), representations, warranties, undertakings and covenants contained in the Registration Statement are true, accurate and properly reflect the intention and matters concerning the Company and its operating subsidiaries in Singapore; |
| (b) | All opinions expressed in the Registration Statement (other than the opinions with respect to Singapore laws which are covered under this letter) are bona fide, honestly held and reached after careful consideration. In particular but without limitation, we have not concerned ourselves with and are not required to confirm any representations or warranties of the Company in the Registration Statement (if any). We are also not responsible for investigating and/or verifying the correctness of any facts contained therein; |
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| (c) | The Registration Statement complies with the requirements of the United States SEC; |
| (d) | All the Reviewed Documents which were submitted to us in electronic copies are true copies of the originals; |
| (e) | All signatures, seals and chops in the Reviewed Documents are genuine and each signature on behalf of a party thereto is that of a person duly authorised by such party to execute the same; |
| (f) | Each of the parties named in the Reviewed Documents, if it is a natural person has full capacity for civil conduct and if it is an entity, is duly organised and is validly existing in good standing under the laws of its jurisdiction of organisation and/or incorporation. Further, each of them has full power and authority to execute, deliver and perform its/her/his obligations to which it is a party, in accordance with the laws of its jurisdiction of organisation or incorporation or the laws that it/she/he is subject to; |
| (g) | The Reviewed Documents are up to date i.e. they remain in full force and effect on the date of this letter and have not been revoked, amended or supplemented, after they were submitted to us for the purposes of preparing this letter; |
| (h) | All the Reviewed Documents that have been provided to us and all factual statements made to us by the Company in connection with this letter are true, accurate, correct and complete; |
| (i) | The opinions of Chee FM & Associates contained in their email dated 8 July 2024 are bona fide and honestly held and were reached after careful consideration; and |
| (j) | There have been no material changes to the circumstances of the Company and its operating subsidiaries in Singapore which we have not been informed of. |
| 7. | The making of the above assumptions shall not be taken to imply that we have made any enquiry to verify any assumption(s). |
| D. | Scope |
| 8. | Save for the seven (7) sections listed at paragraph 1 above, we have not reviewed any other section(s) or pages of the Registration Statement. |
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| 9. | Save for the boxed statements in Annex A, we express no opinion or belief on the accuracy, correctness or reasonableness of the other statements contained in the Registration Statement. |
| 10. | We have also made no investigation into any non-legal regulation or standard including but not limited to accounting, financial or technical standards. |
| 11. | We have made no investigation into and neither express nor imply any views on the laws of any country apart from Singapore. |
| 12. | This letter relates only to the laws of general application in Singapore as at the date hereof and as currently applied by the Singapore Courts. |
| 13. | Singapore legal concepts are expressed in English terms. The concepts in question may not be identical to the concepts described by the same English terms in other legal jurisdictions. Accordingly, this letter may only be relied upon the express condition that any issues of the interpretation or liability arising hereunder will be governed by Singapore laws. |
| 14. | We assume no obligation to update this letter and/or to inform any person of any changes in Singapore law or other matters coming to our knowledge and occurring after the date of this letter which may affect this letter in any respect. |
| 15. | This letter is strictly limited to the matters stated in it and does not apply by implication to any other matters. |
| E. | Opinion |
| 16. | Subject to the Assumptions (Header C), Scope (Header D) and Qualifications (Header F) and subject to any matters not disclosed to us, and having regard to the Singapore laws in force as at the date of this letter as we consider relevant, we are of the opinion that: |
| (a) | The boxed statements (marked in yellow, see Annex A) set out in the Registration Statement under the headers “Prospectus Summary”, “Risk Factors”, “Corporate History and Structure”, “Regulations of Our Industry”, “Certain Singapore Taxation Considerations”, “Enforceability of Civil Liabilities”, and “Legal Matters” contain general statements which correctly and fairly summarise (i) Singapore laws, (ii) Singapore related legal matters and (iii) the legal related risks concerning the Singapore business activities of the Company’s operating subsidiaries; and |
| (b) | Nothing significant has been omitted from those general statements which would make them misleading in any material aspect. |
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| F. | Qualifications |
| 17. | Our opinion set out under Header E is subject to the following qualifications (“Qualifications”): |
| (a) | It is limited to the laws of general application in Singapore as at the date of this letter and as currently applied by the Singapore Courts. |
| (b) | Our opinion is not intended to constitute, nor should it be construed as advice regarding the securities law or any other laws of the United States or any other country. |
| (c) | This opinion is given based on our understanding of the laws of Singapore. For matters not explicitly and clearly provided under the laws of Singapore or have yet to be authoritatively decided by the Singapore Courts, they would be subject to the final discretion of competent Singapore legislative, administrative and judicial authorities. There can be no assurance that the Singapore authorities will ultimately take a view that is consistent with our opinion stated above. |
| (d) | The section titled “Certain Singapore Taxation Considerations” contains a brief summary of Singapore tax laws. For the avoidance of doubt, we neither give nor imply any opinion as to any tax consequences of any transactions contemplated by the proposed initial public offering. |
| (e) | Nothing in this letter shall be construed as an opinion that the contents of the Registration Statement comply with any legal or regulation requirement(s). |
| (f) | Except as may be expressly stated herein, we have not undertaken any investigation to determine the existence or absence of any facts. It shall not be inferred from our engagement as legal counsel that we have any knowledge of the existence or absence of any such facts. |
| (g) | If a person for whose benefit our letter is given is aware of or believes there to be a false or misleading statement in the Registration Statement and/or the Reviewed Documents, the person may not rely on this letter and should seek legal advice on the specific matter concerned. |
| (h) | This opinion is strictly limited to the matters stated herein and no further opinion shall be implied or inferred beyond the matters contained in this letter. The opinion expressed is as of the date of this letter. Accordingly, we assume no responsibility to advise you of any facts, circumstances, events or developments that may subsequently be brought to our attention which may alter, affect or modify our opinion. |
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| G. | Conclusion |
| 18. | This letter is prepared for the sole benefit of the Company. Except for the purposes of filing this letter with the SEC, this letter shall not be, without our prior written consent: |
| (a) | Circulated or relied upon by any other person or used for any other purpose; |
| (b) | Quoted or referred to in any public document or filed with any government body or agency or stock or other exchange or with any other person; or |
| (c) | Disclosed to any other person. |
| 19. | We hereby consent to the use of this letter in and the filing of this letter as an exhibit to the Registration Statement and to the reference(s) to our name in the Registration Statement. In giving such consent, we do not hereby admit that we come within the category of persons whose consent is required under Section 7 of the Securities Act, as amended or the regulations promulgated thereunder. |
Yours faithfully,
| /s/ Joseph Li | |
| Joseph Li | |
| ReThink Legal |
Enc.
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Annex A
i
We have proprietary rights to trademarks used in this prospectus that are important to our business. Solely for convenience, the trademarks, service marks and trade names referred to in this prospectus are without the ®, ™ and other similar symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensors to these trademarks, service marks and trade names.
This prospectus may contain additional trademarks, service marks and trade names of others. All trademarks, service marks and trade names appearing in this prospectus are, to our knowledge, the property of their respective owners. We do not intend our use or display of other companies’ trademarks, service marks or trade names to imply a relationship with, or endorsement or sponsorship of us by, any other person.
ii
PROSPECTUS SUMMARY
This summary highlights selected information contained elsewhere in this prospectus. This summary is not complete and does not contain all of the information that you should consider before deciding whether to invest in our Class A Ordinary Shares. You should carefully read the entire prospectus, including the risks associated with an investment in our company discussed in the “Risk Factors” section of this prospectus, before making an investment decision. Some of the statements in this prospectus are forward-looking statements. See the section titled “Cautionary Statement Regarding Forward-Looking Statements.”
In this prospectus, “we,” “us,” “our,” “our company,” “Concorde International,” and similar references refer to Concorde International Group Ltd and its consolidated subsidiaries.
Our Company
Overview
Concorde International Group Limited is an integrated security services providers that combines physical manpower and innovative technology to deliver effective security solutions. In 2014, we were awarded “The Business Model Innovation Award” by the Singapore Manufacturing Federation. In 2015, we were awarded the “Best Innovative Use of Infocomm Technology Award” by the Singapore Infocomm Technology Federation (“SiTF”). In 2016, we were awarded the “Most Innovative Use of Infocomm Technology (Private Sector-SME) Award” by the Infocomm Media Development Authority of Singapore (“IMDA”, formerly known as Infocomm Development Authority) and the SiTF. In 2017, we were awarded the “IP Awards” by the World Intellectual Property Organization — Intellectual Property Office of Singapore (WIPO-IPOS). In addition, in 2017 The Nanyang Technological University of Singapore recognized our innovative solution by publishing it as a case study entitled “The Transformation of Concorde Security Pte Ltd” via its Nanyang Technoprenuership Center. In the same year, the Singapore Management University and Harvard Business Publishing Education also recognized our innovation by publishing a case study entitled “Main Case: The Resilience of a Disruptive Innovator : Concorde Security”. From 2018 to 2019, in recognition of our solution in transforming the industry, the IMDA approved our solutions in the Singapore government’s Industry Transformation Map Pilot Programme. From 2020 to 2021, in recognition of our technology and solutions, we were included in the “Pre-approved IT solutions vendor” under the category of security, by the IMDA. From 2022 to 2023, in recognition of our technology solution, the IMDA approved our solutions in the Singapore government’s Advanced Digital Solutions (ADS) under the Small Medium Enterprises Go Digital Programme. With these awards and recognitions, we believe we are one of the leading solution providers in Singapore. Through the integration of our patented technology solution, we help our clients reduce costs and enhance security. We have experienced significant revenue growth, primarily driven by the increasing labor costs and increasing demands in security and facilities management.
Since our establishment in Singapore in 1997, we have built a track record in the professional security community by consistently providing high-quality security manpower. Recognizing manpower sustainability our ever-advancing society, in 2014, we decided to transit into a security solution services company using our innovative business model. With our patented technological innovation, we deliver a higher level of security performance while requiring fewer personnel. Traditionally, a 24-hour shift would necessitate at least three guards for coverage. Our solution involves deploying CCTV cameras, sensors, and other IoT devices at our clients’ premises to enable remote access control monitoring and management. These devices are integrated and controlled through our mobile command vehicles, known as “I-Man Facility Sprinters (IFS),” which patrol a cluster of client sites within a defined radius. This proactive approach enables swift responses to any incidents that arise. Consequently, our clients have experienced a reduction in the required on-site guards from three to two or even fewer, thanks to the efficient utilization of these technologies. The implementation of CCTV cameras, sensors, and other IoT devices has not only minimized human errors but has also decreased the overall need for additional personnel. Our specialists, tasked with operating the IFS, undergo rigorous training to efficiently handle the diverse technologies and respond adeptly to various situations. This approach not only enhances their skill sets but also contributes to a better work-life balance for our team members. As a result, we have received numerous awards in Singapore, recognizing our innovative technology and our contribution to producing the next generation of reliable security solutions. Anchored by our patented technology applications and pioneering solutions, we provide top-tier security and facilities management services to commercial, financial, industrial, and governmental customers in Singapore.
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We offer a range of services to enhance security and safety: (1) i-Guarding Services; (2) Man-Guarding Services; and (3) Consultancy and Training Services. Our i-Guarding Services leverages technology to increase efficiency, with a mobile platform and cluster® aggregation model of higher skillset workforce. Revenue from I-Guarding Services accounted for about 98.09% and 99.09% of revenues for fiscal years ended December 31, 2023 and 2022, respectively. Man-Guarding Services employs trained security officers to maintain safety and deter unlawful activities, making up about 1.41% and 0.24% of revenues for fiscal years ended December 31, 2023 and 2022. Consultancy and Training Services provide expert guidance tailored to clients’ needs, representing about 0.50% and 0.67% of total revenues for fiscal years ended December 31, 2023 and 2022.
We have gained recognition for our disruptive innovation in the integrated monitoring of properties, assets, and building service systems. This ensures round-the-clock surveillance for complete security and operational efficiency. This achievement is made possible through our suite of intelligent security solutions, known as “I-Guarding Services.” One of our flagship services, the groundbreaking “I-Man Facility Sprinter (“IFS”),” is a mobile vehicular platform that revolutionizes security and facility maintenance services. These pioneering solutions not only improve workers’ compensation, skill sets, and working conditions but also redefine the overall business landscape of the industry.
Our company’s second flagship product is the “Intelligent Facility Authenticator (“IFA”).” The IFA is an innovative solution that leverages advanced kiosk technology to enhance security and streamline visitor management. In response to the challenges of limited manpower and rising costs, the IFA system automates the issuance of secure passes and access cards, eliminating the need for physical human interaction. It works by sending secure pass-icons to visitors, verifying their identity upon entry, and dispensing access cards with varying levels of security clearance. This technology not only enhances security within buildings but also offers efficient visitor management services, making it a game-changer in industries where kiosk adoption is increasing. Ultimately, IFA represents a significant advancement in security access control without relying on human intervention.
For the fiscal year ended December 31, 2023 and 2022, more than 96% and 85% respectively, of our revenues were generated by annual recurring contracts. In both years, 99% of our clients were based in Singapore. In the fiscal year ended December 31, 2023, our top two customers, Singapore University of Technology and Design and People’s Assocation OnePunggol accounted for approximately 8 % and 7% of our total revenue, respectively. In the fiscal year ended December 31, 2022, our top two customers, Ceva Logistics Singapore Pte Ltd and JTC Corporation, accounted for approximately 10% and 10% of our total revenue, respectively. See “Risk Factor — Risks Related to Our Business and Industry — A significant amount of our revenue is generated from our existing long-term customers; thus, our inability to retain and maintain a good relationship with our existing customers can have a material adverse effect on our business and financial results.” and “Risk Factor — Risks Related to Our Business and Industry — We have substantial customer concentration, with a limited number of customers accounting for a substantial portion of our recent revenues.”
Our Products and Services
i-Guarding Services
In a traditional security deployment, each building or location hires at least one guard per shift. Each 24-hour shift requires at least three guards stationed at the building or location. Traditional security deployment, based solely on manpower, faces a few key challenges: (i) unreliability of guards due to human nature, as guards often fall asleep while on duty, especially during the night shift; (ii) shortages in hiring guards; and (iii) rising labor costs. Our i- Guarding services address these issues and improve the work-life balance of the guards.
According to the diagram, our i-Guarding service consists of a mobile monitoring and response vehicle (known as the IFS) that patrols a designated radius, covering numerous buildings or locations within a 24-hour period. Each building or location installs electronic security systems that include access control systems, security monitoring cameras, and sensors that can be integrated with our IFS. As a result, instead of deploying guards at each location, these electronic security systems can be used. These systems are connected to our IFS via existing telecommunications infrastructures, including Super Wifi, 4G, or 5G networks. Should an alarm be triggered, the IFS will immediately respond via the remote command center within the vehicle and provide on-site response if the need arises. As a result, clients can reduce their reliance on manpower guards.
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Each IFS will be manned by 3 I- specialists. This includes a driver and two security technicians. Each IFS can monitor and manage at least 15 buildings or locations within the deployment radius. This as a result increases manpower efficiency and enhance service levels due to the reduction of human errors resulting from the traditional security deployment model. Our installation and maintenance technicians, along with our customer service representatives, are dedicated to delivering a high-quality customer service experience. This commitment enhances our brand, improves customer satisfaction, increases customer retention, and accelerates the adoption of additional interactive automation solutions. The cluster® aggregation model allows a team of 3 security officers, with one of them being technically trained, to oversee a cluster of premises ranging from 5, 10, to 15 premises within a 15-minute radius.
For the fiscal year ended December 31, 2023 and 2022, our i-Guarding Services accounted for approximately 98.09% and 99.09% respectively, of our total revenues. It also encompasses the design, implementation, and installation of security systems to protect physical assets and personnel from potential threats and vulnerabilities. This includes IFA, Visitor Management Systems (“VMS”), Keys Management Systems (“KMS”), security turnstile facilities, Internet of Things (“IoT”) devices, and other smart security solutions. It involves a strategic assessment of risks, the selection and deployment of appropriate security measures, and the establishment of protocols for ongoing maintenance and monitoring. This integrated approach ensures the safety and integrity of the environment or infrastructure in question, encompassing both physical security elements such as surveillance systems, access controls, and alarm systems. The ultimate goal of a security project and installation is to mitigate risks and safeguard against unauthorized access, theft, and other security threats.
Man-Guarding Services
Our man-guarding services provides a vital layer of protection for various clients and properties. Our security officers are professionally trained and play a critical role in maintaining safety while preventing unauthorized access or unlawful activities in a given area. They offer a combination of prevention, deterrence, and response to maintain a safe and secure environment, making them an integral part of overall security measures. This service does not involve technology applications or solutions. Service contracts are signed on an annual basis, and revenues are collected and recognized on a monthly basis. For the fiscal year ended December 31, 2023 and 2022, our Man-Guarding Services was approximately 1.41% and 0.24% of our total revenues.
Consultancy and Training Service
Consultancy and training services provide expert guidance and training support to clients seeking to enhance their security and safety knowledge domains. The service is structured specifically to meet the clients’ needs.
For the fiscal year ended December 31, 2023 and 2022, our Consultancy and Training Service was approximately 0.50% and 0.67% respectively, of our total revenues.
3
Our Growth Strategies
We believe that implementing the following growth strategies will continue to position our company as the leader in the markets we serve:
| ● | Continue to grow our recurring revenue business. For the fiscal years ended December 31, 2023 and 2022, our recurring revenue was approximately 96% and 85% of our total revenues, respectively. Monthly recurring revenue allows us to achieve a more consistent and predictable income stream. In addition, it should improve our profitability as we continue to roll out more i-Guarding services. Each building or location deployed under the I-Guarding represents incremental revenues with almost the same cost levels as one IFS can service at least 15 or more buildings or locations. Serving our recurring customers should require lower acquisition and marketing costs as compared to new customers. Hence, signing on more buildings or locations will lead to increased revenues and profitability. We see significant market opportunities for our services because customers in our target markets prefer outsourced security and facilities management services that offer real-time security monitoring for continuous protection and rapid responses to security breaches and fire alarms. We intend to continue pursuing opportunities for recurring revenue by developing new and innovative products and by continuing our aggressive sales and marketing efforts. In order to build scale, we will have to continue to spend on marketing and development. As a result, this may impact our overall profitability. |
| ● | Maintain our commitment to best-in-class customer service. We are focused on fostering a culture dedicated to providing industry-leading customer service to our extensive customer base. We operate through a fleet of 5 cluster command centers in Singapore. From these mobile locations, our teams offer monitored security, interactive residential and commercial automation solutions, including installation, field service, repair, ongoing monitoring, and customer support. |
Our installation and service technicians, along with our customer service representatives, are dedicated to delivering a high-quality customer service experience. This commitment enhances our brand, improves customer satisfaction, increases customer retention, and accelerates the adoption of additional interactive automation solutions. As a result, it drives returns on new customer acquisition expenditures and enhances cash flow generation. We pride ourselves on providing on-site responses within a cluster® radius of 15 minutes of security alerts for the majority of our customers.
| ● | Maintain our high-quality customer base. We believe customer retention is also strongly correlated with the credit quality of our customers. We plan to maintain our focus on strict underwriting standards and will establish processes to evaluate potential new customers’ creditworthiness to improve our customer selection or require upfront payments for higher-risk customers. We expect that our focus on generating high-quality customers will continue to result in a portfolio of customers with attractive credit scores, thereby improving retention, decreasing credit risk exposure, and generating a strong, long-term customer portfolio that generates robust returns on new customer acquisition expenditures and drives strong cash flow generation. |
| ● | Disciplined expansion of our patented protected solution beyond Singapore. We strongly believe that there will be significant demand for our solutions due to the continuous increase in labor costs and the growing demand for high-quality security and facilities management services. Our plan is to expand our geographical coverage and export our successful business model beyond Singapore within the next 24 months. We aim to expand to Malaysia, Australia, and North America markets via partnerships with local security service provider who already have an existing customer base that needs our solution to improve service delivery and to mitigate the increasing labor costs. We have not signed up with any partners yet, but we aim to have them in place based upon the following plan. Our business plan is subject to change based on the change of global economy and other factors that may affect our business operations. |
| Market | Timeline | Estimated Cost | Source of funding | |||
| Malaysia | By Q4, 2024 | US$500,000 | Internal cashflows | |||
| North America | By Q3, 2025 | US$500,000 | Internal cashflows | |||
| Australia | By Q2, 2026 | US$500,000 | Internal cashflows |
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Our Competitive Strengths
We believe that the following competitive strengths contribute to our success and differentiate us from our competitors:
| ● | Proven Solution that is protected by Patents. Our patent-protected solution that has been proven to reduce the need for manpower while maintaining, and even increasing, the quality of service levels for security and facilities management. |
| ● | Superior-Class Customer Service. Rather than competing purely on price, we emphasize the quality of our services, which we believe is distinguished by superior customer service. |
| ● | Deep industrial knowledge and experience. We believe that our focus on safety and security, coupled with our sales consultants, our solid reputation for and expertise in providing reliable security and monitoring services through our patent-protected business model vide our cluster® mobile command centers, our dependable product solutions, and our highly skilled installation and service capabilities, position us well to compete with both traditional and new competitors. |
Our Risks and Challenges
Our prospects should be considered in light of the risks, uncertainties, expenses and difficulties frequently encountered by similar companies. Our ability to realize our business objectives and execute our strategies is subject to risks and uncertainties, including, among others, the following:
Risks Relating to Our Business and Industry
Risks and uncertainties related to our business and industry include, but are not limited to, the following:
| ● | A significant amount of our revenue is generated from our existing long-term customers; thus, our inability to retain and maintain a good relationship with our existing customers can have a material adverse effect on our business and financial results. |
| ● | We currently report our financial results under IFRS, which differs in certain significant respect from U.S. generally accepted accounting principles. |
| ● | A critical part of our success was driven by introducing and providing innovative and cost-saving security services. If our new products and services are not successful, it could have a material adverse effect on our business. |
| ● | The proper and efficient functioning of our computer, data backup, information technology, telecom and processing systems, and our monitoring stations are essential to our business. |
| ● | As a security service provider, we are exposed to greater risk of liability for employee acts or omissions or system failure, than may be inherent in other businesses. |
| ● | Our monitoring security facilities will call the police and fire departments when emergencies arise. If the police and fire departments fail or delay responding to our calls, our business and reputation could be adversely affected. |
| ● | From time to time, we are subject to claims for infringing, misappropriating or otherwise violating the intellectual property rights of others and will be subject to such claims in the future, which could have an adverse effect on our business and operations. |
| ● | Our inability to acquire necessary intellectual property or adequately protect our intellectual property could adversely affect our business and results of operation. |
5
Risks Relating to Regulatory Compliance
Risks and uncertainties related to our regulatory compliance, but are not limited to, the following:
| ● | Increasing legislative and regulatory initiatives on cybersecurity and data privacy regulations could adversely impact our business and financial results. |
| ● | As we expand globally, we will be subject to more regulation by various governmental agencies. |
Risks Relating to This Offering and Ownership of Our Class A Ordinary Shares
Risks and uncertainties related to this offering and our Class A Ordinary Shares include, but are not limited to, the following:
| ● | Our dual class voting structure has the effect of concentrating the voting control to holders of our Class B Ordinary Shares, which will limit or preclude your ability to influence corporate matters, and your interests may conflict with the interests of these shareholders. It may also adversely affect the trading market for our Class A Ordinary Shares due to exclusion from certain stock market indices and depress the trading price of our Class A Ordinary Shares. |
| ● | There was no public market for our Class A Ordinary Shares prior to this offering, and if an active trading market does not develop, you may not be able to resell our shares at or above the price you paid, or at all. |
| ● | Our lack of effective internal controls over financial reporting may affect our ability to accurately report our financial results or prevent fraud, which may affect the market for and price of our Class A Ordinary Shares. |
| ● | Nasdaq Capital Market may apply additional and more stringent criteria for our initial and continued listing because our insiders will hold a large portion of our listed securities. |
| ● | The initial public offering price for our Class A Ordinary Shares may not be indicative of prices that will prevail in the trading market and such market prices may be volatile. |
| ● | In addition, we face other risks and uncertainties that may materially affect our business prospects, financial condition, and results of operations. You should consider the risks discussed in “Risk Factors” and elsewhere in this prospectus before investing in our Class A Ordinary Shares. |
Our Corporate Structure
Set forth below is our organizational chart as of the date of this prospectus:
6
Concorde International was incorporated in the British Virgin Islands on May 2, 2023. Our registered office in the British Virgin Islands is at Conyers Trust Company (BVI) Limited of Commerce House, Wickhams Cay 1, PO Box 3140, Road Town, Tortola, British Virgin Islands VG1110. Our principal executive office is at 3 Ang Mo Kio Street 62, #01-49 LINK@AMK, Singapore 569139. Our telephone number at this location is +65 2960802.
Concorde International was incorporated to acquire and hold, indirectly, Concorde Security Pte Ltd (Singapore), Concorde Security Sdn Bhd (Malaysia), Concorde Security Limited (UK), Concorde Asia Pte Ltd (Singapore) and Berjaya Academy Pte Ltd (Singapore).
Concorde International Group Pte Ltd (Singapore) was incorporated on June 12, 2023. It is a holding company and a 100% owned subsidiary of Concorde International. Its registered office is at 3 Ang Mo Kio Street 62, #01-49 LINK@AMK, Singapore 569139.
Dual Class Structure
Under our current memorandum and articles of association, we are authorized to issue up to a maximum of 350,000,000 ordinary shares of with a par value of US$0.00001 each comprising (i) 250,000,000 Class A Ordinary Shares with a par value of US$0.00001 each; and (b) 100,000,000 Class B Ordinary Shares with a par value US$0.00001 each. Class B Ordinary Shares are entitled to one hundred votes per share on proposals requiring or requesting shareholder approval, unless prohibited by law. Class A Ordinary Shares are entitled to one vote on any such matter. Other than as to voting and conversion rights, Class B Ordinary Shares and Class A Ordinary Shares have the same rights and rank pari passu with one another, including the rights to dividends and other capital distribution. Each Class B Ordinary Share is convertible into one Class A Ordinary Share at any time by the holder thereof. Class A Ordinary Shares are not convertible into Class B Ordinary Shares under any circumstances.
In this offering, we are offering Class A Ordinary Shares. Our founders, some of whom are also our officers and directors, own 20,888,886 Class B Ordinary Shares which entitles them to 2,088,888,600 votes. Our founders have aggregate voting power of 100% prior to the consummation of the offering contemplated by this prospectus. Following this offering, taking into consideration the 1,250,000 Class A Ordinary Shares expected to be offered hereby, even if 100% of such shares are sold, our founders will retain controlling voting power in the Company based on having approximately 97.57% of all voting rights. This concentrated control may limit or preclude the ability of others to influence corporate matters including significant business decisions for the foreseeable future.
Corporate Information
Our website can be found at www.concordesecurity.com. The information contained on our website is not a part of this prospectus, nor is such content incorporated by reference herein, and should not be relied upon in determining whether to make an investment in our Class A Ordinary Shares.
Recent Developments
Convertible Notes Financing
On June 10, 2024, Softbank Robotics Singapore Pte Ltd (“Softbank”) subscribed to a USD1,000,000 convertible note with a 24 months maturity period with the Company. The Note shall be convertible to the Company’s Class A Ordinary Shares at a conversion price that is equal to the higher of (i) the price per share paid by investors for Class A Ordinary Shares in the Company’s initial public offering or (ii) a 15% discount to the volume weighted average price during the sixty-day period prior to the date of notice of conversion is given to the Company at Softbank’s sole discretion after one year from the date of issuance.
Singapore Subsidiary’s Loan with OCBC
On May 28, 2024, Concorde Security Pte Ltd, our 96.81% owned subsidiary, secured a SGD1.5 million loan from OCBC at a preferential interest rate for general working capital and to refinance an existing loan with a higher interest rate.
On June 14, 2024, Concorde Security Pte Ltd secured a term loan of SGD500,000 from OCBC. On June 25, 2024, Concorde Security Pte Ltd entered into a call option agreement annexed to the term loan, which grants OCBC the option to subscribe for shares at a 20% discount to the IPO price or the trade sale price.
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Class B Ordinary Shares Issuances
On March 18, 2024, we issued 20,788,886 Class B Ordinary Shares to members of our Board, executive officers or their affiliates and existing shareholders, at an issue price of $0.00001 per share, for a total consideration of $208.
On March 6, 2020, Berjaya Academy Pte. Ltd. issued 100,000 Ordinary Shares to Poh San Koh, who held them in a representative capacity for Swee Kheng Chua. On January 10, 2022, Poh San Koh transferred the 100,000 shares to Sharifah Noriati Binte Said Omar. On November 1, 2023, 100,000 shares were transferred from Sharifah Noriati Binte Said Omar to Concorde International Group Pte Ltd (Singapore) for 1 Singapore Dollar. The shares were held by Sharifah Noriati Binte Said Omar in a representative capacity for Swee Kheng Chua. On March 14, 2024, the Company re-designated and reclassified the 100,000 authorized shares to 100,000 Class B Ordinary Shares.
All of the shares were sold to members of our Board, executive officers or their affiliates and existing shareholders, in reliance upon (i) the exemption contained in Section 4(a)(2) of the Securities Act, and Rule 506(b) of Regulation D promulgated thereunder, and applicable state securities laws, or (ii) the provisions of Regulation S promulgated under the Securities Act.
The following table presents the amounts of Class B Ordinary Shares that were issued as of the date of this prospectus and aggregate purchase prices paid by the members of our Board, executive officers or their affiliates and existing shareholders. The terms of these purchases were the same for all purchasers of our Class B Ordinary Shares.
Shareholder | Class B Common Shares | Aggregate Purchase Price Paid | ||||||
| Swee Kheng Chua(1) | 18,000,000 | $ | 180 | |||||
| Terence Wing Khai Yap(2) | 250,000 | $ | 2.5 | |||||
| Sze Yin Ong(3) | 46,296 | $ | 0.46296 | |||||
| Sharifah Noriati Binte Said Omar(4) | 185,185 | $ | 1.85185 | |||||
| Ping Ping Lim(5) | 377,775 | $ | 3.77775 | |||||
| Jia Wei Chua(6) | 14,815 | $ | 0.14815 | |||||
| Meang Fai Pang | 14,815 | $ | 0.14815 | |||||
| Weilekai Investments Pte Ltd(7) | 2,000,000 | $ | 20 | |||||
| (1) | Swee Kheng Chua, our Chief Executive Officer and Director. |
| (2) | Terence Wing Khai Yap, our Director. |
| (3) | Sze Yin Ong, our Chief Financial Officer. |
| (4) |
Ms. Sharifah Noriati Binte Said Omar serves as a nominee director at Berjaya Academy Pte Ltd, our 70% owned subsidiary, as well as Concorde Security Pte Ltd (Singapore), our 96.81% owned subsidiary, and Concorde Asia Pte Ltd (Singapore), our 70% owned subsidiary. |
| (5) | Ping Ping Lim, Swee Kheng Chua’s spouse. |
| (6) | Jia Wei Chua, Swee Kheng Chua’s son. |
| (7) |
Weilekai Investments Pte Ltd is a Singapore company, 50% owned by Swee Kheng Chua and 50% owned by Ping Ping Lim, Spouse of Swee Kheng Chua. Swee Kheng Chua is deemed to beneficially own the Class B Ordinary Shares owned by Weilekai Investments Pte Ltd and has sole voting and dispositive powers over its shares. Weilekai Investments Pte Ltd’s business address is 3 Ang Mo Kio Street 62 #01-49 LINK@AMK Singapore 569139. |
Implications of Being an Emerging Growth Company
Upon the completion of this offering, we will qualify as an “emerging growth company” under the Jumpstart Our Business Act of 2012, as amended, or the JOBS Act. As a result, we will be permitted to, and intend to, rely on exemptions from certain disclosure requirements. These provisions include exemption from the auditor attestation requirement under Section 404 of the Sarbanes-Oxley Act of 2002 in the assessment of the emerging growth company’s internal control over financial reporting. In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period. Our financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards.
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We will remain an emerging growth company until (for the first five fiscal years after the initial public offering is completed) the earliest of the following occurs: (i) our total annual gross revenues are $1.235 billion or more (ii) we have issued more than $1 billion in non-convertible debt in the past three years or (iii) we become a “large accelerated filer,” as defined in the Securities Exchange Act of 1934, which we refer to as the “Exchange Act,” Rule 12b-2. Once we cease to be an emerging growth company, we will not be entitled to the exemptions provided in the JOBS Act discussed above.
Implications of Being a Foreign Private Issuer
Once the registration statement of which this prospectus is a part is declared effective by the SEC, we will become subject to the information reporting requirements of the Exchange Act that are applicable to “foreign private issuers,” and under those requirements we will file certain reports with the SEC. As a foreign private issuer, we will not be subject to the same requirements that are imposed upon U.S. domestic issuers by the SEC. Under the Exchange Act, we will be subject to reporting obligations that, in certain respects, are less detailed and less frequent than those of U.S. domestic reporting companies. For example, although we report our financial results on a quarterly basis, we will not be required to issue quarterly reports, proxy statements that comply with the requirements applicable to U.S. domestic reporting companies, or individual executive compensation information that is as detailed as that required of U.S. domestic reporting companies. We also will have four months after the end of each fiscal year to file our annual reports with the SEC and we will not be required to file current reports as frequently or promptly as U.S. domestic reporting companies. We also present our financial statements pursuant to International Financial Reporting Standards, or IFRS. Furthermore, our officers, directors and principal shareholders will be exempt from the requirements to report transactions in our equity securities and from the short-swing profit liability provisions contained in Section 16 of the Exchange Act. As a foreign private issuer, we will also not be subject to the requirements of Regulation FD (Fair Disclosure) promulgated under the Exchange Act. In addition, as a foreign private issuer, we will be permitted, and intend to follow certain home country corporate governance practices instead of those otherwise required under Nasdaq Marketplace Rules for domestic U.S. issuers. These exemptions and leniencies will reduce the frequency and scope of information and protections available to you in comparison to those applicable to a U.S. domestic reporting companies.
Implications of Being a Controlled Company
The “controlled company” exception to rules of the Nasdaq Capital Market provides that a company of which more than 50% of the voting power is held by an individual, group or another company, a “controlled company,” need not comply with certain requirements of the corporate governance rules of the Nasdaq Capital Market. As of the date of this prospectus, Swee Kheng Chua, the Chief Executive Officer and a director of the Company, beneficially owned an aggregate of 20,392,590 Class B Ordinary Shares (including 18,000,000 Class B Ordinary Shares owned directly by Swee Kheng Chua; 377,775 Class B Ordinary Shares beneficially owned by Ping Ping Lim, Swee Kheng Chua’s spouse; 14,815 Class B Ordinary Shares beneficially owned by Jia Wei Chua, Swee Kheng Chua’s son, as they live in the same household; and 2,000,000 Class B Ordinary Shares beneficially owned by Weilekai Investments Pte Ltd.), which represents approximately 97.62% of the voting power of our outstanding ordinary shares. Following this offering, Mr. Chua will control approximately 97.57% of the voting power of our outstanding ordinary shares if all the Class A Ordinary Shares being offered are sold (or 97.56% of our outstanding voting power if the underwriters’ option to purchase additional shares is exercised in full). Accordingly, if we obtain listing on the Nasdaq Capital Market, we will be a “controlled company” within the meaning of the corporate governance rules of the Nasdaq Capital Market. Controlled companies are exempt from the corporate governance rules of the Nasdaq Capital Market requiring that listed companies have (i) a majority of the board of directors consist of “independent” directors under the listing standards of the Nasdaq Capital Market, (ii) a nominating/corporate governance committee composed entirely of independent directors and a written nominating/corporate governance committee charter meeting the requirements of the Nasdaq Capital Market, and (iii) a compensation committee composed entirely of independent directors and a written compensation committee charter meeting the requirements of the Nasdaq Capital Market. We currently utilize and presently intend to continue to utilize these exemptions. As a result, we may not have a majority of independent directors, our nomination and corporate governance committee and compensation committee may not consist entirely of independent directors and such committees may not be subject to annual performance evaluations. Accordingly, you may not have the same protections afforded to shareholders of companies that are subject to all of the corporate governance requirements of the Nasdaq Capital Market. See “Management.”
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The Offering
| Shares offered | Class A Ordinary Shares, assuming an estimated initial public offering price of $4.00 per share | |
| Ordinary Shares outstanding immediately before the offering |
Zero Class A Ordinary Shares and 20,888,886 Class B Ordinary Shares. Our Class B Ordinary Shares will become convertible at the option of the holder into Class A Ordinary Shares on a 1:1 basis following this offering. Class A Ordinary Shares are entitled to one (1) vote per share, and Class B Ordinary Shares are entitled to one hundred (100) vote per share. See “Description of Share Capital” for more information. | |
| Ordinary Shares outstanding immediately after the offering | 1,250,000 Class A Ordinary Shares (or 1,437,500 Class A Ordinary Shares if the underwriters exercise the over-allotment option in full) and 20,888,886 Class B Ordinary Shares. | |
| Over-allotment option | We have granted to the underwriters a 45-day option to purchase from us up to an additional 15% of the Class A Ordinary Shares sold in the offering (187,500 additional shares, assuming an estimated initial public offering price of $4.00 per share) at the initial public offering price, less the underwriting discounts and commissions. | |
| Use of proceeds |
We expect to receive net proceeds of approximately $5 million from this offering, assuming an estimated initial public offering price of $4.00 per share, and no exercise of the underwriters’ over-allotment option, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.
We plan to use the net proceeds of this offering for purchase and rollout of electric vehicular mobile command centers, research and development activities, regional market development and exploration of new markets, product development, working capital and general corporate purposes. See “Use of Proceeds” for more information on the use of proceeds. | |
| Risk factors |
Investing in our Class A Ordinary Shares involves a high degree of risk and purchasers of our Class A Ordinary Shares may lose part or all of their investment. See “Risk Factors” for a discussion of factors you should carefully consider before deciding to invest in our Class A Ordinary Shares. |
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| Lock-up |
We have agreed with the underwriters, not to, during a period of 180 days after the closing of this offering, (i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any shares of our capital stock or any securities convertible into or exercisable or exchangeable for shares of our capital stock; (ii) file or cause to be filed any registration statement with the Commission relating to the offering of any shares of our capital stock or any securities convertible into or exercisable or exchangeable for shares of our capital stock; (iii) complete any offering of our debt securities, other than entering into a line of credit with a traditional bank, or (iv) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of our capital stock, whether any such transaction described in clause (i), (ii), (iii) or (iv) above is to be settled by delivery of shares of our capital stock or such other securities, in cash or otherwise.
Additionally, our directors and officers and all of our outstanding shareholders as of the effective date of the Registration Statement (and all holders of securities exercisable for or convertible into Ordinary Shares) entered into “lock-up” agreements pursuant to which such persons and entities shall agree, for a period of 180 days after the closing of this offering, that they shall not offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any shares of our capital stock or any securities convertible into or exercisable or exchangeable for shares of our capital stock, subject to customary exceptions. | |
| Proposed Nasdaq Capital Market trading symbols | We intend to apply to list our Class A Ordinary Shares on the Nasdaq Capital Market under the trading symbols “CIGL”, and we will not close this offering unless the Nasdaq Capital Market has approved our Class A Ordinary Shares for listing. | |
| Transfer Agent | Vstock Transfer, LLC. The address for VStock Transfer, LLC is 18 Lafayette Place, Woodmere, New York, 11598, and the telephone number is 212 828-8436. |
The number of Class A Ordinary Shares outstanding immediately following this offering is based on zero shares outstanding as of the date of this prospectus.
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Summary Consolidated Financial Information
The following selected historical financial information should be read in conjunction with our consolidated financial statements and related notes included elsewhere in the prospectus and the information contained in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” below.
The following summary consolidated financial data as of December 31, 2023 and 2022. This information is derived from our audited consolidated financial statements.
Our financial statements are prepared and presented in accordance with IFRS. Our historical results for any period are not necessarily indicative of our future performance.
| Years Ended December 31, | ||||||||
| 2023 | 2022 | |||||||
| Consolidated Statements of Profit or Loss and Other Comprehensive Income | $ | $ | ||||||
| Revenue | 10,655,993 | 5,006,345 | ||||||
| Cost of revenue | 7,662,024 | 3,648,637 | ||||||
| Operating expenses | 1,955,820 | (2,291,856 | ) | |||||
| Profit/(Loss) from operations | 1,038,149 | (934,148 | ) | |||||
| Other income (expenses) | 236,911 | 205,201 | ||||||
| Finance costs | (149,626 | ) | (75,033 | ) | ||||
| Net profit/(loss) before tax | 1,125,434 | (803,980 | ) | |||||
| Net profit/(loss) per share – basic and diluted | 9.61 | (7.83 | ) | |||||
| Weighted average shares outstanding – basic and diluted | 100,000 | 100,000 | ||||||
| As of December 31, | ||||||||
| 2023 | 2022 | |||||||
| Consolidated Statements of Financial Position Data | $ | $ | ||||||
| Cash | 956,975 | 441,278 | ||||||
| Current assets | 5,287,321 | 4,050,813 | ||||||
| Total assets | 8,550,581 | 7,103,192 | ||||||
| Current liabilities | 3,514,897 | 3,059,866 | ||||||
| Total liabilities | 5,848,005 | 5,492,869 | ||||||
| Shareholders’ equity | 2,702,577 | 1,610,323 | ||||||
| Total liabilities and shareholders’ equity | 8,550,581 | 7,103,192 | ||||||
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RISK FACTORS
An investment in our Class A Ordinary Shares involves a high degree of risk. Before deciding whether to invest in our Class A Ordinary Shares, you should carefully consider the risks described below, together with all of the other information set forth in this prospectus, including the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operation” and our consolidated financial statements and related notes. If any of these risks actually occur, our subsidiaries’ business, financial condition, results of operations or cash flow could be materially and adversely affected, which could cause the trading price of our Class A Ordinary Shares to decline, resulting in a loss of all or part of your investment. The risks described below are not the only ones that we face. Additional risks not presently known to us or that we currently deem immaterial may also affect us and our subsidiaries’ business. You should only consider investing in our Class A Ordinary Shares if you can bear the risk of losing your entire investment.
Risks Relating to Our Business and Industry
A significant amount of our revenue is generated from our existing long-term customers; thus, our inability to retain and maintain a good relationship with our existing customers can have a material adverse effect on our business and financial results.
As of the date of this prospectus, our main line of revenue is generated from providing security services by monitoring properties, assets and building systems under 24/7 surveillance, ensuring security and business efficiency for our customers. A significant driver of our growth is our recurring revenue business in which customers who contracted to purchase our products and services and are required to pay monthly fees. As such, our ability to maintain our existing significant customer base is important to our long-term profitability. For the fiscal year ended December 31, 2022, Ceva Logistics Singapore Pte Ltd and JTC Corporation each represented approximately 10% of our total net revenues, the loss or material reduction of business, either due to a reduction in demand from one or more of our significant customers, such as industrial and commercial customers, or our inability to timely meet any elevated level of customer demand for various reasons, the lack of success of sales initiatives or changes in customer preferences or loyalties for our products and services related to any such significant customer could have a material adverse impact on our business. This requires that we minimize our rate of customer disconnects, or attrition, which can increase as a result of factors such as problems experienced with our product or service quality, customer service, customer non-pay, unfavorable general economic conditions, and the preference for lower pricing of competitors’ products and services over ours. If attrition rates were to rise significantly, we may be required to accelerate the depreciation and amortization expense for, or to impair, certain of our assets, including with respect to customer relationships, which would cause a material adverse effect on our financial condition and results of operations.
We currently report our financial results under IFRS, which differs in certain significant respect from U.S. generally accepted accounting principles.
We report our financial statements under IFRS. There have been and there may in the future be certain significant differences between IFRS and United States generally accepted accounting principles, or U.S. GAAP, including differences related to revenue recognition, intangible assets, share-based compensation expense, income tax and earnings per share. As a result, our financial information and reported earnings for historical or future periods could be significantly different if they were prepared in accordance with U.S. GAAP. In addition, we do not intend to provide a reconciliation between IFRS and U.S. GAAP unless it is required under applicable law. As a result, you may not be able to meaningfully compare our financial statements under IFRS with those companies that prepare financial statements under U.S. GAAP.
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We have substantial customer concentration, with a limited number of customers accounting for a substantial portion of our recent revenues.
Historically, we have derived a significant portion of our revenues from our top five customers. In the fiscal year ended December 31, 2022, our top five customers accounted for approximately 36% of our revenue. Specifically, our top five customers contributed approximately 10%, 10%, 6%, 5%, and 5% of our total revenue, respectively.
There are inherent risks whenever a large percentage of total revenues are concentrated on a limited number of customers. It is not possible for us to predict the future level of demand for our services that will be generated by these customers. In addition, revenues from these larger customers may fluctuate from time to time based on the commencement and completion of projects, the timing of which may be affected by market conditions or other facts, some of which may be outside of our control. Further, some of our contracts with these larger customers permit them to terminate our services at any time (subject to notice and certain other provisions). If any of these customers experience declining or delayed sales due to market, economic or competitive conditions, we could be pressured to reduce the prices we charge for our services which could have an adverse effect on our margins and financial position, and could negatively affect our revenues and results of operations and/or trading price of our Class A Ordinary Shares. If any of these largest customers terminates our services, such termination would negatively affect our revenues and results of operations and/or trading price of our Class A Ordinary Shares.
If we fail to attract, retain and engage appropriately qualified employees, including employees in key positions, our operations and profitability may be harmed. In addition, changes in market compensation rates may adversely affect our profitability.
One of the key products we offer is a suite of smart security solutions called “I-Guarding Services”. The first of these solutions is our patented IFS, a mobile vehicular platform providing security and facility maintenance services. Our I- Guarding Services offer high-quality and advanced technological products and services for our customers and require a highly trained and engaged workforce. As a result, we rely on our ability to attract, train and retain sufficient numbers of qualified employees. Specifically, because employees become more productive and skillful as they gain experience, market demand for such employees will become more competitive and retaining those individuals is very important for our success, especially as we expand and grow our market. Further, failure to recruit or retain qualified employees in the future may impair our efficiency and effectiveness and our ability to pursue growth opportunities. A significant amount of turnover of our executive team or other employees in key positions, such as Chief Executive Officer, Chief Financial Officer, and Chief Operating Officer may negatively impact our operations. Factors that affect our ability to maintain sufficient numbers of qualified employees include, for example, employee engagement, our reputation, unemployment rates, competition from other employers, availability of qualified personnel and our ability to offer appropriate compensation and benefit packages. If we are unable to attract, train and retain sufficient numbers of qualified employees, our business, financial condition, cash flows or results of operations could be adversely affected.
We operate in a competitive labor market and there is a risk that market increases in compensation and employer- provided benefits could have a material adverse effect on our profitability. We may also be subject to continued market pressure to increase employee hourly wage rates and increased cost pressure on employer-provided benefits. Our need to implement corresponding adjustments within our labor model and compensation and benefit packages could have a material adverse impact to the profitability of our business.
A critical part of our success was driven by introducing and providing innovative and cost-saving security services. If our new products and services are not successful, it could have a material adverse effect on our business.
A critical part of our business success was driven by introducing and providing innovative and cost-saving security services for our customers. As of the date of this prospectus, we are offering products and services including I- Guarding Services, Man-Guarding Services, Consultancy and Training Services, etc. To stay competitive in the market, we believe we must continue to develop and commercialize new products and services that meet the varied and evolving needs of our customers in order to continue to grow our business. While we devote significant effort and resources to the research and development of new products, we cannot guarantee the new products and services we may launch in the future will be well received by our customers. In addition, the speed of development by our competitors and new market entrants is increasing. We cannot provide any assurance that any new product or service will be successfully commercialized in a timely manner, if ever, or, if commercialized, will result in returns greater than our investment. Investment in a product or service could divert our attention and resources from other projects that become more commercially viable in the market. We also cannot provide any assurance that any new product or service will be accepted by the market. In addition, new products and services may present new and difficult technological and intellectual property challenges that may subject us to claims or complaints if our customers experience service failures or other quality issues. To the extent our new products and services are not successful, it could have a material adverse effect on our business, financial condition, cash flow or results of operations.
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The proper and efficient functioning of our computer, data backup, information technology, telecom and processing systems, and our monitoring stations are essential to our business.
Our central monitoring facilities depend on the proper and efficient functioning of our computer, data backup, information technology, telecom and processing systems, and other platforms. If there is a catastrophic event, natural disaster, security breach, negligent or intentional act by an employee or other extraordinary event, the malfunctioning of our information technology system could cause us unable to respond to emergencies on a timely manner. Furthermore, because computer and data backup and processing systems are susceptible to malfunctions and interruptions, we cannot guarantee that we will not experience service failures in the future. A significant or large- scale malfunction or interruption of any computer or data backup and processing system could adversely affect our ability to keep our operations running efficiently and respond to alarm system signals. If a malfunction results in a wider or sustained disruption, it could have a material adverse effect on our reputation, business, financial condition, cash flows or results of operations.
Product defects or shortfalls in customer service may damage our reputation as a high-quality security service provider.
The success of our business depends on our reputation and ability to maintain good relationships with our customers, suppliers, and local regulators, among others. Our reputation may be harmed either through product defects or shortfalls in customer service. Customers generally judge our performance through their interactions with staff at our monitoring and customer care centers, and field installation and service technicians, as well as their day-to-day interactions with our products. Any failure to meet customers’ expectations in such customer service areas could cause an increase in attrition rates or make it difficult to obtain new customers. Any harm to our reputation or customer relationships caused by the actions of our personnel, or third-party product or service providers or any other factors could have a material adverse effect on our business, financial condition, results of operations, and cash flows. In addition, our products and services may contain undetected defects in the software, infrastructure, third-party components or processes. If these solutions fail for any reason, including due to defects in our equipment, software, a carrier outage or user error, we could be subject to liability for such failures and our business could suffer.
As a security service provider, we are exposed to greater risk of liability for employee acts or omissions or system failure, than may be inherent in other businesses.
The nature of the products and services we provide potentially exposes us to greater risks of liability for employee acts or omissions or system failures than may be inherent in other businesses. If customers believe that they incurred losses as a result of our action or inaction, the customers, or their insurers, could in the future bring claims against us. In addition, there can be no assurance that we are adequately insured for these risks. Certain of our insurance policies may limit or prohibit insurance coverage for punitive or certain other types of damages or liability arising from gross negligence. If significant uninsured damages are assessed against us, the resulting liability could have a material adverse effect on our business, financial condition, cash flows or results of operations.
A disruption in the operation of our monitoring facilities or customer care resources could materially adversely affect our business.
A disruption in our ability to provide security monitoring services or otherwise provide ongoing customer care to our customers could have a material adverse effect on our business. A disruption could occur for many reasons, including fire, natural disasters, weather, and the effects of climate change (such as sea level rise, drought, flooding, wildfires, and increased storm severity), health epidemics or pandemics, transmission interruption, extended power outages, human or other error, malicious acts, provider preferences regarding the signals that get transmitted, government actions, war, terrorism, sabotage, or other conflicts, or as a result of disruptions to internal and external networks or third party transmission lines. Monitoring and customer care could also be disrupted by information systems and network-related events or cybersecurity attacks, such as computer hacking, computer viruses, worms, or other malicious software, distributed denial of service attacks, malicious social engineering, or other destructive or disruptive activities that could also cause damage to our properties, equipment, and data. A failure of our back- up procedures or a disruption affecting monitoring facilities could disrupt our ability to provide security monitoring or customer care services to our customers. If we experience such disruptions, we may experience customer dissatisfaction and potential loss of confidence, and liabilities to customers or other third parties, each of which could harm our reputation and impact future revenues. We could also be subject to claims or litigation with respect to losses caused by such disruptions. Our insurance may not be sufficient to fully cover our losses or may not cover a particular event at all. Any such disruptions or outcomes could have a material adverse effect on our business, financial condition, results of operations, and cash flows.
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Our industry is highly competitive.
The markets in which we operate include a large number of participants, including multinational, regional and small, local companies. As we plan to expand beyond the Singaporean market, such as North America, Malaysia, and Australia, we will face increasing competition from internet service providers, large technology companies, singular experience companies, industrial and smart hardware companies, and others that may have greater capital and resources than us. We also face competition from large residential security companies that have or may have greater capital and other resources than we do. Competitors that are larger in scale and have greater resources may benefit from greater economies of scale and other lower costs that permit them to offer more favorable terms to consumers (including lower service costs) than we offer, causing such consumers to choose to enter into contracts with such competitors. These competitors may also benefit from greater name recognition and superior advertising, marketing, promotional and other resources. To the extent that such competitors utilize any competitive advantages in markets where our business is more highly concentrated, the negative impact on our business may increase over time. In addition to potentially reducing the number of new customers we are able to originate, increased competition could also result in increased customers acquisition costs and higher attrition rates that would negatively impact us over time. The benefit offered to larger competitors from economies of scale and other lower costs may be magnified by an economic downturn in which customers put a greater emphasis on lower cost products or services. In addition, we face competition from regional competitors that concentrate their capital and other resources in targeting local markets.
To stay competitive, we focus on quality, innovation, expertise, effective channels to market, breadth of product offering and price. We may be unable to effectively compete on all these bases. If we are unable to anticipate evolving trends in the market or the timing and scale of our competitors’ activities and initiatives, the demand for our products and services could be negatively impacted. In addition, we compete in an industry that is experiencing the convergence of mechanical, electronic and digital products. Technology and innovation play significant roles in the competitive landscape. Our success depends, in part, upon the research, development and implementation of new technologies and products including obtaining, maintaining and enforcing necessary intellectual property protections. Securing and maintaining key partnerships and alliances, recruiting and retaining highly skilled and qualified employee talent and having access to technologies, services, intellectual property and solutions developed by others will play a significant role in our ability to effectively compete. The continual development of new technologies by existing and new competitors, including non-traditional competitors with significant resources, could adversely affect our ability to sustain operating margins and desirable levels of sales volumes. To remain competitive, we must develop new products and service offerings and respond to new technologies in a timely manner.
Our monitoring security facilities will call the police and fire departments when emergencies arise. If the police and fire departments fail or delay responding to our calls, our business and reputation could be adversely affected.
Our monitoring security facilities will call the police and fire departments when emergencies arise. If the police and fire departments fail to respond or delay responding to our calls, our customers may suffer economically and incur physical injuries. In such instances, we may be subject to legal liability by potential lawsuits against us. As a result, our brand reputation would be damaged. Such events could adversely affect our ability to attract and retain customers and could negatively impact our business, financial condition, results of operations, and cash flow.
Our insurance policies may not cover all of our operating risks and a casualty loss beyond the limits of our coverage could negatively impact our business.
We are subject to all of the operating hazards and risks normally incidental to the provision of our products and services and business operations. We maintain insurance policies in such amounts and with such coverage and deductibles as required by law and that we believe are reasonable and prudent. Nevertheless, such insurance may not be adequate to protect us from all the liabilities and expenses that may arise from claims for personal injury, death or property damage arising in the ordinary course of our business and current levels of insurance may not be able to be maintained or available at economical prices. If a significant liability claim is brought against us that is not covered by insurance, then we may have to pay the claim with our own funds, which could have a material adverse effect on our business, financial condition, cash flows or results of operations.
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We will be subject to risks related to currency exchange rate fluctuations as we plan to expand our business internationally, and such risks may have an adverse effect on our business, financial condition, results of operations and cash flows.
We expect sales to non-Singaporean customers to represent a significant portion of our revenues in the future. Although we may enter into currency exchange contracts to reduce our risk related to currency exchange fluctuations, changes in the relative fair values of currencies occur from time to time. We do not hedge against all our currency exposure, and therefore, our results of operations will continue to be susceptible to impacts from currency fluctuations. Further, we may invoice customers in a currency other than its functional currency or may be invoiced by suppliers in a currency other than its functional currency, which could result in unfavorable translation effects on our results of operations.
Shareholder and customer emphasis on environmental, social, and governance responsibility may impose additional costs on us or expose us to new risks.
Our shareholders, customers and employees continue to expect a more proactive response to environmental, social, and governance (“ESG”) matters. We may incur increased costs and may be exposed to new risks responding to these higher expectations. Although we believe that our emphasis on ESG priorities can help drive sustainable business practices that are crucial to our long-term growth, we may face reputational challenges in the event that we are unable to achieve these goals or our ESG standards do not meet those set by certain constituencies. These reputational challenges could have a material adverse effect on our business, financial condition, results of operations and cash flows.
Our strategic initiatives, including enterprise excellence efforts among other significant capital expenditure projects, may not achieve the improvements or financial returns we expect.
We utilize a number of tools to improve efficiency and productivity. Implementation of new processes to our operations could cause disruptions and may prove to be more difficult, costly or time-consuming than expected. Additionally, from time to time we undertake substantial capital projects for varying reasons, such as to increase production capacity or to insource certain products, parts or components. We invest in areas we believe best align with our business strategies and that will optimize future returns. However, there can be no assurance that all our planned enterprise excellence projects or other capital expenditures will be fully implemented, or if implemented, will realize the expected improvements or financial returns.
We may pursue additional business opportunities and may decide to eliminate or acquire certain businesses, which could expose us to additional risks.
We frequently evaluate strategic opportunities both within and outside our existing lines of business. We expect from time to time to pursue additional business opportunities and may decide to eliminate or acquire certain businesses, products or services or expand into new channels or industries. Such acquisitions or dispositions could be material. There are various risks and uncertainties associated with potential acquisitions and divestitures, including: (1) availability of financing; (2) difficulties related to integrating previously separate businesses into a single unit, including product and service offerings, distribution and operational capabilities and business cultures; (3) general business disruption; (4) managing the integration process; (5) diversion of management’s attention from day-to-day operations, assumption of costs and liabilities of an acquired business, including unforeseen or contingent liabilities or liabilities in excess of the amounts estimated; (7) failure to realize anticipated benefits and synergies, such as cost savings and revenue enhancements; (8) potentially substantial costs and expenses associated with acquisitions and dispositions; (9) potential increases in compliance costs; (10) failure to retain and motivate key employees; and (11) difficulties in applying our internal control over financial reporting and disclosure controls and procedures to an acquired business. Any or all of these risks and uncertainties, individually or collectively, could have material adverse effect on our business, financial condition, cash flow or results of operations. We can offer no assurance that any such strategic opportunities will prove to be successful. Additionally, any new product or service offerings could require developmental investments or have higher cost structures than our current arrangements, which could reduce operating margins and require more working capital. Moreover, expansion into any new industry or channel could result in higher compliance costs as we may become subject to laws and regulations to which we are not currently subject.
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From time to time, we are subject to claims for infringing, misappropriating or otherwise violating the intellectual property rights of others and will be subject to such claims in the future, which could have an adverse effect on our business and operations.
We cannot be certain that our products and services or those of third parties that we incorporate into our offerings do not and will not infringe the intellectual property rights of others. Many of our competitors and others may now and in the future have significantly larger and more mature patent portfolios than we have. From time to time, we are subject to claims based on allegations of infringement, misappropriation or other violations of the intellectual property rights of others, including litigation brought by special purpose or so-called “non-practicing” entities that focus solely on extracting royalties and settlements by enforcing intellectual property rights and against whom our patents may therefore provide little or no deterrence or protection.
Regardless of their merits, intellectual property claims divert the attention of our personnel and are often time- consuming and expensive. In addition, to the extent claims against us are successful, we may have to pay substantial monetary damages or discontinue or modify certain products or services that are found to infringe another party’s rights or enter into licensing agreements with costly royalty payments. Defending against claims of infringement, misappropriation or other violations or being deemed to be infringing, misappropriating or otherwise violating the intellectual property rights of others could impair our ability to innovate, develop, distribute and sell our current and planned products and services.
Although third parties may offer a license to their technology or other intellectual property, the terms of any offered license may not be acceptable, and the failure to obtain a license or the costs associated with any license could cause our business, financial condition and results of operations to be materially and adversely affected. In addition, some licenses may be non-exclusive, and therefore our competitors may have access to the same technology licensed to us. If a third party does not offer us a license to its technology or other intellectual property on reasonable terms, or at all, we could be enjoined from continued use of such intellectual property. As a result, we may be required to develop alternative, non-infringing technology, which could require significant time (during which we could be unable to continue to offer our affected products, subscriptions or services), effort, and expense and may ultimately not be successful. Furthermore, a successful claimant could secure a judgment or we may agree to a settlement that prevents us from distributing certain products, providing certain subscriptions or performing certain services that requires us to pay substantial damages, royalties or other fees. Any of these events could harm our business, financial condition and results of operations.
Our inability to acquire necessary intellectual property or adequately protect our intellectual property could adversely affect our business and results of operation.
Our intellectual property, including our patents, trademarks, copyrights, trade secrets and other proprietary rights, constitutes a significant part of our value. Our success depends, in part, on our ability to protect our proprietary technology, brands and other intellectual property against dilution, infringement, misappropriation and competitive pressure by defending our intellectual property rights. To protect our intellectual property rights, we rely on a combination of patent, trademark, copyright and trade secret laws and a combination of confidentiality procedures, contractual provisions and other methods, all of which offer only limited protection. In addition, we make efforts to acquire rights to intellectual property necessary for our operations. However, there can be no assurance that these measures will be successful in any given case, particularly in those countries where the laws do not protect our proprietary rights as rigorously.
We own a portfolio of issued patents that relate to our security product and services utilized in our business. We may file additional patent applications in the future. The process of obtaining patent protection is expensive and time- consuming, and we may not be able to prosecute all necessary or desirable patent applications at a reasonable cost or in a timely manner all the way through to the successful issuance of a patent. We may choose not to seek patent protection for certain innovations and may choose not to pursue patent protection in certain jurisdictions. In addition, issuance of a patent does not guarantee that we have an absolute right to practice the patented invention.
If we fail to acquire the necessary intellectual property rights or adequately protect or assert our intellectual property rights, competitors may dilute our brands or manufacture and market similar products and services or convert our customers, which could adversely affect our market share and results of operations. We may not receive patents or trademarks for all our pending patent and trademark applications, and existing or future patents or licenses may not provide competitive advantages for our products and services. Furthermore, it is possible that our patent applications may not issue as granted patents, that the scope of our issued patents will be insufficient or not have the coverage originally sought, or that our issued patents will not provide us with any competitive advantages. Our competitors may challenge, invalidate or avoid the application of our existing or future intellectual property rights that we obtain or license. In addition, patent rights may not prevent our competitors from developing, using or selling products or services that are similar to or address the same market as our products and services. The loss of protection for our intellectual property rights could reduce the market value of our brands and our products and services, reduce new customers originations or upgrade sales to existing customers, lower our profits, and could have a material adverse effect on our business, financial condition, cash flows or results of operations.
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Our policy is to require our employees that were hired to develop material intellectual property included in our products to execute written agreements in which they assign to us their rights in potential inventions and other intellectual property created within the scope of their employment (or, with respect to consultants and service providers, their engagement to develop such intellectual property), but we cannot assure you that we have adequately protected our rights in every such agreement or that we have executed an agreement with every such party. Finally, in order to benefit from the protection of patents and other intellectual property rights, we must monitor and detect infringement, misappropriation or other violations of our intellectual property rights and pursue infringement, misappropriation or other claims in certain circumstances in relevant jurisdictions, all of which are costly and time- consuming. As a result, we may not be able to obtain adequate protection or to effectively enforce our issued patents or other intellectual property rights.
In addition to patents and registered trademarks, we rely on trade secret rights, copyrights and other rights to protect our unpatented proprietary intellectual property and technology. Despite our efforts to protect our proprietary technologies and our intellectual property rights, unauthorized parties, including our employees, consultants, or service providers, may attempt to copy aspects of our products or obtain and use our trade secrets or other confidential information. We generally enter into confidentiality agreements with our employees and third parties that have access to our material confidential information, and generally limits access to and distribution of our proprietary information and proprietary technology through certain procedural safeguards. These agreements may not effectively prevent unauthorized use or disclosure of our intellectual property or technology, could be breached or otherwise may not provide meaningful protection for our trade secrets and know-how related to the design, manufacture or operation of our products and may not provide an adequate remedy in the event of unauthorized use or disclosure. We cannot assure you that the steps taken by us will prevent misappropriation of our intellectual property or technology or infringement of our intellectual property rights. Competitors may independently develop technologies or products that are substantially equivalent or superior to our solutions or that inappropriately incorporate our proprietary technology into their products or they may hire our former employees who may misappropriate our proprietary technology or misuse our confidential information. In addition, if we expand the geography of our service offerings, the laws of some foreign countries where we may do business in the future do not protect intellectual property rights and technology to the same extent as the laws of Singapore, and these countries may not enforce these laws as diligently as government agencies and private parties in Singapore.
From time to time, legal action by us may be necessary to enforce our patents and other intellectual property rights, to protect our trade secrets, to determine the validity and scope of the intellectual property rights of others or to defend against claims of infringement, misappropriation or invalidity. Such litigation could result in substantial costs and diversion of resources and could negatively affect our business, operating results and financial condition. If we are unable to protect our intellectual property and technology, we may find ourselves at a competitive disadvantage to others who need not incur the additional expense, time and effort required to create the innovative products that have enabled us to be successful to date.
Unauthorized use of our brand names by third parties, and the expenses incurred in developing and preserving the value of our brand names, may materially adversely affect our business.
Our brand names are critical to our success. Unauthorized use of our brand names by third parties may materially adversely affect our business and reputation, including the perceived quality and reliability of our products and services. We rely on patents, trademark law, company brand name protection policies, and agreements with our employees, customers, business partners, and others to protect the value of our brand names. Despite our precautions, we cannot provide assurance that those procedures are sufficiently effective to protect against unauthorized third-party use of our brand names. Third parties may use our brand names to engage in fraudulent activities, including unauthorized telemarketing conducted in our names to induce our existing customers to switch to competing service providers, lead generation activities for competitors, and obtaining personally identifiable or personal financial information. Third parties sometimes use our names and trademarks, or other confusingly similar variations thereof, in other contexts that may impact our brands. We may not be successful in detecting, investigating, preventing, or prosecuting all unauthorized third-party use of our brand names. Future litigation with respect to such unauthorized use could also result in substantial costs and diversion of our resources. These factors could materially adversely affect our reputation, business, financial condition, results of operations, and cash flows.
We may be subject to class action and other lawsuits which may harm our business and results of operations.
We may be subject to litigation involving alleged violations of privacy, consumer protection laws, employment laws, or other matters. In addition, if we successfully launch our initial public offering, we may in the future be subject to securities litigation that may be lengthy and may result in substantial costs and a diversion of management’s attention and resources. Results cannot be predicted with certainty, and an adverse outcome in such litigation could result in monetary damages or injunctive relief that could materially adversely affect our business, financial condition, results of operations, and cash flows.
In addition, we are currently and may in the future become subject to legal proceedings and commercial or contractual disputes other than class actions. These are typically claims that arise in the normal course of business including, without limitation, commercial general liability claims, automobile liability claims, contractual disputes, worker’s compensation claims, labor law and employment claims, personal injuries, property damage, and claims that we infringed on the intellectual property of others. There is a possibility that such claims may have a material adverse effect on our business, financial condition, results of operations, and cash flows that is greater than we anticipate and/or negatively affect our reputation.
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Our prior growth rates in revenues and other operating and financial results should not be considered indicative of our future performance.
Prior growth rates in revenues and other operating and financial results should not be considered indicative of our future performance. Revenue for the years ended December 31, 2023 and 2022 was $10,655,993 and $5,006,345, respectively, representing an increase of 113%. For the fiscal years ended December 31, 2023, and 2022, we incurred a net profit/(loss) of $994,194 and $(803,980), respectively. Our future performance and operating results depend on, among other things: (1) our ability to renew and/or upgrade contracts with existing customers and maintain customers satisfaction with existing customers; (2) our ability to generate new customers; (3) our ability to increase the density of our customers base for existing service locations or continue to expand into new geographic markets; (4) our ability to successfully develop and market new and innovative products and services; (5) the level of product, service and price competition; (6) the degree of saturation in, and our ability to further penetrate, existing markets; (7) our ability to manage growth, revenues, origination or acquisition costs of new customers and attrition rates, the cost of servicing our existing customers and general and administrative costs; and (8) our ability to attract, train and retain qualified employees. If our future operating and financial results suffer as a result of any of the other reasons mentioned above, or any other reasons, there could be a material adverse effect on our business, financial condition, cash flows or results of operations.
The security of our information and technology networks is critical to the safety of our customers and success of our business, and failure to maintain the security of our information and technology networks could damage our brand reputation and adversely affect our business.
We rely on information technology networks and systems, including the internet, to monitor and maintain security of the properties that we serve. If we experience disruption or if there are security breaches of our information and technology networks, we may be unable to detect irregularities and emergencies that could occur on the properties we have contracted to protect. Such failure could expose us to substantial economic and legal liability. In addition, we also process, transmit and store electronic information and, in the normal course of our business, we collect and retain certain information pertaining to our distributors, customers, partners and employees, including personal information.
If security breaches in connection with the delivery of our solutions allow unauthorized third parties to access any of this data or obtain control of our systems, our reputation, business, financial condition, cash flows and results of operations could be harmed.
The legal, regulatory and contractual environment surrounding information security, privacy and credit card fraud is constantly evolving and companies that collect and retain such information are under increasing attack by cyber- criminals around the world. Further, as the regulatory focus on privacy issues continues to increase and worldwide laws and regulations concerning the protection of data and personal information expand and become more complex, these potential risks to our business will intensify. A significant actual or potential theft, loss, fraudulent use or misuse of distributors, customers, employee or other personally identifiable data, whether by third parties or as a result of employee malfeasance or otherwise, non-compliance with our contractual or other legal obligations regarding such data or a violation of our privacy and security policies with respect to such data could result in loss of confidential information, damage to our reputation, early termination of our business relationships, litigation, regulatory investigations or actions and other liabilities or actions against us, including significant fines by governmental authorities, and private claims by companies and individuals for violation of data privacy and security regulations.
In addition, cyber-attacks from computer hackers and cyber criminals and other malicious internet-based activity continue to increase generally, and perpetrators of cyber-attacks may be able to develop and deploy viruses, worms, ransomware, malware, DNS attacks, wireless network attacks, attacks on our cloud networks, phishing attempts, social engineering attempts, distributed denial of service attacks and other advanced persistent threats or malicious software programs that attack our products and services, our networks and network endpoints or otherwise exploit any security vulnerabilities of our products, services and networks. Techniques used to obtain unauthorized access or to sabotage systems change frequently and generally are not recognized until launched against a target. As a result, we may be unable to anticipate these techniques or to implement adequate preventative measures. We cannot be certain that advances in cyber-capabilities or other developments will not compromise or breach the technology protecting the networks that access our platforms and solutions, and we can make no assurance that we will be able to detect, prevent, timely and adequately address or mitigate the negative effects of cyber-attacks or other security breaches. If any one of these risks materializes, our business, financial condition, cash flows or results of operations could be materially and adversely affected.
We must successfully upgrade and maintain our information technology systems.
We rely on various information technology systems to manage our operations. As necessary, we implement modifications and upgrades to these systems, and replace certain of our legacy systems with successor systems with new functionality. There are inherent costs and risks associated with modifying or changing these systems and implementing new systems, including potential disruption of our internal control structure, substantial capital expenditures, additional administration and operating expenses, retention of sufficiently skilled personnel to implement and operate the new systems, demands on management time and other risks and costs of delays or difficulties in transitioning to new systems or of integrating new systems into our current systems. While management seeks to identify and remediate issues, we can provide no assurance that our identification and remediation efforts will be successful or that we will not encounter additional issues as we complete the implementation of these and other systems. In addition, our information technology system implementations may not result in productivity improvements at a level that outweighs the costs of implementation, or at all. The implementation of new information technology systems may also cause disruptions in our business operations and have an adverse effect on our business, cash flows and operations.
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We rely on third-party providers of telecommunication technologies and services for our monitoring operations.
Our monitoring services depend upon third-party cellular and other telecommunications providers to communicate signals to and from our customers in a timely, cost-efficient and consistent manner. The failure of one or more of these providers to transmit and communicate signals in a timely manner could affect our ability to provide services to our customers. There can be no assurance that third-party telecommunications providers and signal processing centers will continue to transmit and communicate signals to or from our third-party providers and the monitoring stations without disruption. Any such disruption, particularly one of a prolonged duration, could have a material adverse effect on our business. In addition, failure to renew contracts with existing providers or to contract with other providers on commercially acceptable terms or at all may adversely impact our business.
We rely on certain third-party providers of licensed software and services integral to the operations of our business.
Certain aspects of the operation of our business depend on third-party software and service providers. We rely on certain software technology that we license from third parties and use in our products and services to perform key functions and provide critical functionality. With regard to licensed software technology, we are, to a certain extent, dependent upon the ability of third parties to maintain, enhance or develop their software and services on a timely and cost-effective basis, to meet industry technological standards and innovations to deliver software and services that are free of defects or security vulnerabilities, and to ensure their software and services are free from disruptions or interruptions. Further, these third-party services and software licenses may not always be available to us on commercially reasonable terms or at all. If our agreements with third-party software or services vendors are not renewed or the third-party software or services become obsolete, fail to function properly, are incompatible with future versions of our products or services, are defective or otherwise fail to address our needs, there is no assurance that we would be able to replace the functionality provided by the third-party software or services with software or services from alternative providers. Any of these factors could have a material adverse effect on our financial condition, cash flows or results of operations.
The loss or changes to our senior management could disrupt our business.
Competition for senior management talent having security experience has increased. Factors that impact our ability to attract and retain senior management include compensation and benefits and our successful reputation as a top provider in these industries. Our success partly depends on our senior management and key employees’ ability to effectively implement our business strategies and to continue to identify and grow talent through our annual strategic talent planning process. In addition, the success of each of our segments depends on a highly qualified leader with relevant industry and operational experience, as well as its entire management team. The unexpected loss of any member of our senior management team and the related loss of their knowledge of products, offerings, and industry experience, and the difficulty of quickly finding qualified senior management talent to replace any such loss, could have a material adverse effect on our business, financial condition, results of operations, and cash flows.
We may be adversely affected by global economic and political instability.
As we seek to continue to expand our business, our overall performance will depend in part on worldwide economic and geopolitical conditions. Economies domestically and internationally have been affected from time to time by falling demand for a variety of goods and services, restricted credit, poor liquidity, reduced corporate profitability, employment pressures in services sectors, volatility in credit, equity and foreign exchange markets, bankruptcies and outbreaks of variants of COVID-19, as well as war between Russia and Ukraine, conflict between Israel and Gaza, terrorist activity, political or social unrest, civil strife and other geopolitical uncertainty, and the resulting impact on business continuity and travel, supply chain disruptions, inflation, security issues, and overall uncertainty with respect to the economy, including with respect to tariff and trade issues. To the extent that inflationary pressures and other global factors lead to an economic recession, demand for our solutions, our business and financial condition could be negatively impacted.
On February 24, 2022, Russian military forces invaded Ukraine, and continued conflict and disruption in the region is likely. Although the length, impact and outcome of the ongoing military conflict in Ukraine is highly unpredictable, this conflict could lead to significant market and other disruptions, including significant volatility in commodity prices and supply of energy resources, instability in financial markets, supply chain interruptions, political and social instability, changes in consumer or purchaser preferences as well as an increase in cyberattacks and espionage.
On October 7, 2023, the Palestinian Sunni Islamist group Hamas (a U.S.-designated foreign terrorist organization, or FTO) led surprise attacks against Israel from the Gaza Strip by land, sea, and air. The assault came on a Jewish holiday, 50 years after the Egypt-Syria surprise attack that sparked the 1973 Yom Kippur War. The attacks’ scope and lethality against Israel have no precedent in the 16 years Hamas has controlled Gaza, and the nature of the violence stunned Israelis. Since the attack, Israel’s Prime Minister Benjamin Netanyahu has declared war against Hamas. Israel has initiated air strikes and reportedly localized raids, but the questions of whether it will launch a ground assault, and, if it does, how extensive such a ground assault might be, loom large. The Israel Defense Forces has said it plans a wide- ranging offensive against Hamas, including coordinated attacks by land, air, and sea.
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We are actively monitoring the Russia-Ukraine and Israel-Gaza situations and assessing their impact on our business, but to date have not experienced any material impact. We have no way to predict the progress or outcome of the conflict in these afflicted countries, and any resulting government reactions, are rapidly developing and beyond our control. The extent and duration of the military action, sanctions and resulting market disruptions could be significant and could potentially have a substantial impact on the global economy and our business for an unknown period of time. As the adverse effects of this conflict continue to develop and potentially spread, both in Europe and Middle East and through the rest of the world, our customers, and customer behavior, may be negatively impacted, which could negatively affect sales and sales cycles and overall demand for our products and services. Further or prolonged impacts on the global economy could also cause businesses to curtail business expenses, which could hinder our ability to attract new customers or result in a decrease in revenue. It is not possible to predict the ultimate broader consequences of those conflict and any of the abovementioned factors could have a material adverse effect on our business, financial condition and results of operations, particularly to the extent the conflict escalates to involve additional countries, further economic sanctions and wider military conflict. Any such disruptions could also magnify the impact of other risks described in this prospectus.
In addition, inflation rates globally have increased rapidly in the past several years, which may result in decreased demand for our products and services, increases in our operating costs including our labor costs, constrained credit and liquidity, and volatility in financial markets. There continues to be uncertainty in the changing market and economic conditions, including the possibility of additional measures that could be taken by central banks and other government agencies. All of the abovementioned factors could have an adverse impact on our financial results.
The outbreak of the COVID-19 pandemic has and may continue to adversely affect the Company’s business and results of operations.
The rapid and continued spread of COVID-19, and the measures taken to slow its spread, have adversely affected the Company’s business and financial results. On May 5, 2023, the WHO ended the emergency status for COVID-19. However, COVID-19 is still a significant public health problem and may continue to challenge health systems worldwide in the long term. The COVID-19 pandemic negatively impacted our company’s business. During the pandemic, the demand for our services changed significantly. We experienced a decrease in the demand for our niche technology-integrated services, while more customers sought traditional security guards. Currently, COVID-19 no longer poses a threat to our business, and we have adapted our technology to meet the needs that arose during the pandemic.
Despite the Company’s efforts to manage these impacts and the positive growth in our revenue, due to the evolving situation with COVID-19, the effect on the Company’s operational and financial performance will depend on future developments, all of which are uncertain and difficult to predict and in the future may have material adverse effects on the Company’s business, financial condition, results of operations, liquidity and cash flows. Such developments may include, but are not limited to, the spread and future resurgences of the virus, the severity and duration of the outbreak and the severity and duration of the resulting impact on the economy. Even after the COVID-19 pandemic has subsided, we may experience impacts on the Company’s business as a result of any economic recession, downturn or volatility that has occurred or may occur in the future. The COVID-19 pandemic may also have the effect of heightening many of the other risks described below, including those related to ability to service indebtedness and share price fluctuation.
Risks Relating to Regulatory Compliance
Increasing legislative and regulatory initiatives on cybersecurity and data privacy regulations could adversely impact our business and financial results.
During our operations, we gather, process, transmit and store sensitive information, including personal, payment, credit and other confidential and private information. We may use some of this information for operational and marketing purposes while operating our business.
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As we plan to enter North America, Malaysia and Australia markets, our collection, retention, transfer and use of this information will be governed by Singaporean and foreign laws and regulations relating to privacy, data protection and information security, industry standards and protocols, or it may be asserted that such industry standards or protocols apply to us. The regulatory framework for privacy and information security issues worldwide is rapidly evolving and is likely to remain uncertain for the foreseeable future. For example, in the United States, federal and various state and provincial governmental bodies and agencies have adopted or are considering adopting laws and regulations limiting, or laws and regulations regarding the collection, distribution, use, disclosure, storage, and security of certain categories of information. These new laws and regulations may also impact the way we design and develop new technology solutions. Some of these requirements include obligations of companies to notify individuals of security breaches involving particular personal information, which could result from exploitation of a vulnerability in our systems or services or breaches experienced by our service providers and/or partners. For example, in the State of California, the California Consumer Privacy Act (“CCPA”) provides for enhanced consumer protections for California residents, a private right of action for data breaches of certain personal information and statutory fines and damages for such data breaches or other CCPA violations, as well as a requirement of “reasonable” cybersecurity. In addition, in November 2020, California voters passed the California Privacy Rights and Enforcement Act of 2020, which amends and expands the CCPA with additional data privacy compliance requirements and establishes a regulatory agency dedicated to enforcing those requirements. We are also subject to state and federal laws and regulations regarding telemarketing and other telephonic communications and state and federal laws regarding unsolicited commercial emails, as well as regulations relating to automated telemarketing calls, texts or SMS messages.
Many jurisdictions have established their own data security and privacy legal and regulatory frameworks with which we must comply to the extent our operations expand into these geographies or the laws and regulations in these frameworks otherwise may be interpreted to apply to us. Laws and regulations in these jurisdictions apply broadly to the collection, use, storage, disclosure and security of data that identifies or may be used to identify or locate an individual, such as names, email addresses and, in some jurisdictions, internet protocol addresses. We are also bound by contractual requirements relating to privacy, data protection and information security, and may agree to additional contractual requirements addressing these matters from time to time.
Our compliance with these various requirements increases our operating costs, and additional laws, regulations, standards or protocols (or new interpretations of existing laws, regulations, standards or protocols) in these areas may further increase our operating costs, require us to take on additional privacy and data security related obligations in our contracts and adversely affect our ability to effectively market our products and services. In view of new or modified legal obligations relating to privacy, data protection or information security, or any changes in their interpretation, we may find it necessary or desirable to fundamentally change our business activities and practices or to expend significant resources to modify our products and services and otherwise adapt to these changes. We may be unable to make such changes and modifications in a commercially reasonable manner or at all, and our ability to develop new services and features could be limited.
Further, our failure or perceived failure to comply with any of these laws, regulations, standards, protocols or other obligations could result in a loss of customer data, fines, sanctions and other liabilities and additional restrictions on our collection, transfer or use of customer data. In addition, our failure to comply with any of these laws, regulations, standards, protocols or other obligations could result in a material adverse effect on our reputation, customer attrition, new customer origination, financial condition, cash flows or results of operations.
As we expand globally, we will be subject to more regulation by various governmental agencies.
Our expansion plan includes entering the security service markets in North America, Malaysia, Australia, and more. As we expand our business into other countries, we will be subject to regulation by various federal, state, local and foreign governmental agencies, including, but not limited to, Personal Data Protection Act 2012 (PDPA), Infocomm Media Development Authority (IMDA), Regulations on Labor, Road Traffic Act 1961 and Workplace Safety and Health Act 2006.
Apart from the Private Security Industry Act 2007 and its subsidiary legislation, our business operations are not subject to any special legislation or regulatory controls other than those generally applicable to companies and businesses incorporated and/or operating in Singapore.
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Changes in laws that apply to us could result in increased regulatory requirements and compliance costs which could harm our business, financial condition, cash flows and results of operations. In certain jurisdictions, regulatory requirements may be more stringent than in Singapore. Noncompliance with applicable regulations or requirements could subject us to whistleblower complaints, investigations, sanctions, settlements, mandatory product recalls, enforcement actions, disgorgement of profits, fines, damages, civil and criminal penalties or injunctions, suspension or debarment from contracting with certain governments or other customers, the loss of export privileges, multi- jurisdictional liability, reputational harm, and other collateral consequences. If any governmental or other sanctions are imposed, or if we do not prevail in any possible civil or criminal litigation, our business, financial condition, cash flows and results of operations could be materially harmed. In addition, responding to any action will likely result in a materially significant diversion of management’s attention and resources and an increase in defense costs and other professional fees.
Risks Relating to This Offering and Ownership of Our Class A Ordinary Shares
Our dual class voting structure has the effect of concentrating the voting control to holders of our Class B Ordinary Shares, which will limit or preclude your ability to influence corporate matters, and your interests may conflict with the interests of these shareholders. It may also adversely affect the trading market for our Class A Ordinary Shares due to exclusion from certain stock market indices and depress the trading price of our Class A Ordinary Shares.
We adopted a dual class voting structure such that our ordinary shares consist of Class A Ordinary Shares and Class B Ordinary Shares. Class B Ordinary Shares are entitled to 100 votes per share on proposals requiring or requesting shareholder approval, and Class A Ordinary Shares are entitled to one vote on any such matter. Each Class B Ordinary Share is convertible into one Class A Ordinary Share at any time by the holder thereof. Class A Ordinary Shares are not convertible into Class B Ordinary Shares under any circumstances. Other than as to voting and conversion rights, Class B Ordinary Shares and Class A Ordinary Shares have the same rights and rank pari passu with one another, including the rights to dividends and other capital distribution. In this offering, we are offering Class A Ordinary Shares.
Following this offering, taking into consideration the Class A Ordinary Shares expected to be offered hereby, even if 100% of such shares are sold, Swee Kheng Chua will retain controlling voting power in the Company based on having approximately 97.57% of the combined voting power of our outstanding ordinary shares. Because of the one hundred- to-one voting ratio between our Class B and Class A Ordinary Shares, our founders, some of whom are also some of our officers and directors, will have the ability to control the outcome of most matters requiring shareholder approval, including:
| ● | the election of our Board and, through our Board, decision making with respect to our business direction and policies, including the appointment and removal of our officers; |
| ● | mergers, de-mergers and other significant corporate transactions; |
| ● | changes to our constitution; and |
| ● | our capital structure. |
This voting control and influence may discourage transactions involving a change of control of the Company, including transactions in which you, as a holder of our Class A Ordinary Shares, might otherwise receive a premium for your shares.
S&P Dow Jones and FTSE Russell have implemented changes to their eligibility criteria for inclusion of shares of public companies on certain indices, including the S&P 500, namely, to exclude companies with multiple classes of ordinary shares from being added to such indices. In addition, several shareholder advisory firms have announced their opposition to the use of multiple class structures. As a result, the dual class structure of our ordinary shares may prevent the inclusion of the Class A Ordinary Shares in such indices and may cause shareholder advisory firms to publish negative commentary about our corporate governance practices or otherwise seek to cause us to change our capital structure. Any such exclusion from indices could result in a less active trading market for our Class A Ordinary Shares. Any actions or publications by shareholder advisory firms critical of our corporate governance practices or capital structure could also adversely affect the value of the Class A Ordinary Shares. As a result, the market price of our Class A Ordinary Shares could be materially adversely affected.
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There was no public market for our Class A Ordinary Shares prior to this offering, and if an active trading market does not develop, you may not be able to resell our at or above the price you paid, or at all.
Prior to this initial public Offering, there has been no public market for our Class A Ordinary Shares. We expect to apply for our Class A Ordinary Shares to be listed on the Nasdaq Capital Market. There is no guarantee that our application will be approved by the Nasdaq Capital Market. If an active trading market for our Class A Ordinary Shares does not develop after this Offering, the market price and liquidity of our Class A Ordinary Shares will be materially adversely affected. You may not be able to sell any Class A Ordinary Shares that you purchase at or above the public offering price. Accordingly, investors should be prepared to face a complete loss of their investment.
Our lack of effective internal controls over financial reporting may affect our ability to accurately report our financial results or prevent fraud, which may affect the market for and price of our Class A Ordinary Shares.
To implement Section 404 of the Sarbanes-Oxley Act of 2002, the SEC adopted rules requiring public companies to include a report of management on the company’s internal control over financial reporting. Prior to filing the registration statement of which this prospectus is a part, we were a private company with limited accounting personnel and other resources for addressing our internal control over financial reporting. In connection with the audits of our consolidated financial statements as of December 31, 2022, we and our independent registered public accounting firms identified certain material weaknesses in our internal control over financial reporting PCAOB of the United States. A “material weakness” is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.
We intend to implement measures designed to improve our internal control over financial reporting to address the underlying causes of these material weaknesses, including i) hiring more qualified staff to fill up the key roles in the operations; ii) setting up a financial and system control framework with formal documentation of polices and controls in place; and iii) appointing independent directors, establishing an audit committee and strengthening corporate governance.
We will be subject to the requirement that we maintain internal controls and that management perform periodic evaluation of the effectiveness of the internal controls. Effective internal control over financial reporting is important to prevent fraud. As a result, our business, our financial condition, results of operations and prospects, as well as the market for and trading price of our Class A Ordinary Shares, may be materially and adversely affected if we do not have effective internal controls. Before this offering, we were a private company with limited resources. As a result, we may not discover any problems in a timely manner and current and potential shareholders could lose confidence in our financial reporting, which would harm our business and the trading price of our Class A Ordinary Shares. The absence of internal controls over financial reporting may inhibit investors from purchasing our Class A Ordinary Shares and may make it more difficult for us to raise funds in a debt or equity financing.
Nasdaq Capital Market may apply additional and more stringent criteria for our initial and continued listing because our insiders will hold a large portion of our listed securities.
Nasdaq Listing Rule 5101 provides Nasdaq with broad discretionary authority over the initial and continued listing of securities in Nasdaq and Nasdaq may use such discretion to deny initial listing, apply additional or more stringent criteria for the initial or continued listing of particular securities, or suspend or delist particular securities based on any event, condition, or circumstance that exists or occurs that makes initial or continued listing of the securities on Nasdaq inadvisable or unwarranted in the opinion of Nasdaq, even though the securities may meet all enumerated criteria for initial or continued listing on Nasdaq. In addition, Nasdaq has used its discretion to deny initial or continued listing or to apply additional and more stringent criteria in the instances, including, but not limited to: (i) where the company engaged an auditor that has not been subject to an inspection by PCAOB, an auditor that PCAOB cannot inspect, or an auditor that has not demonstrated sufficient resources, geographic reach, or experience to adequately perform the company’s audit; (ii) where the company planned a small public offering, which would result in insiders holding a large portion of the company’s listed securities, and Nasdaq had concerns that the offering size was insufficient to establish the company’s initial valuation, and there would not be sufficient liquidity to support a public market for the company; and (iii) where the company did not demonstrate sufficient nexus to the U.S. capital market, including having no U.S. shareholders, operations, or members of the board of directors or management. Our initial public offering will be relatively small. We estimate that there should not be more than 1% of the total issued capital in public hands after the listing. The insiders of our Company will still hold a large portion of the Company’s listed securities following the consummation of the Offering. Therefore, we may be subject to the additional and more stringent criteria of Nasdaq for our initial and continued listing, which might cause delay or even denial of our listing application.
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As a controlled company, we are not subject to all of the corporate governance rules of the Nasdaq Capital Market.
The “controlled company” exception to the rules of the Nasdaq Capital Market provides that a company of which more than 50% of the voting power is held by an individual, group or another company, a “controlled company,” need not comply with certain requirements of the Nasdaq Capital Market corporate governance rules. As of the date of this prospectus, Swee Kheng Chua, the Chief Executive Officer and a director of the Company, beneficially owned an aggregate of 20,392,590 Class B Ordinary Shares (including 18,000,000 Class B Ordinary Shares owned directly by Swee Kheng Chua; 377,775 Class B Ordinary Shares beneficially owned by Ping Ping Lim, Swee Kheng Chua’s spouse; 14,815 Class B Ordinary Shares beneficially owned by Jia Wei Chua, Swee Kheng Chua’s son, as they live in the same household; and 2,000,000 Class B Ordinary Shares beneficially owned by Weilekai Investments Pte Ltd.), which represents approximately 97.62% of the voting power of our outstanding ordinary shares. Following this offering, Mr. Chua will control approximately 97.57% of the voting power of our outstanding ordinary shares if all the Class A Ordinary Shares being offered are sold (or 97.56% of our outstanding voting power if the underwriters’ option to purchase additional shares is exercised in full). If we obtain listing on the Nasdaq Capital Market, we will be a “controlled company” within the meaning of the corporate governance rules of the Nasdaq Capital Market. Controlled companies are exempt from the corporate governance rules of the Nasdaq Capital Market requiring that listed companies have (i) a majority of the board of directors consist of “independent” directors under the listing standards of the Nasdaq Capital Market, (ii) a nominating/corporate governance committee composed entirely of independent directors and a written nominating/corporate governance committee charter meeting the requirements of the Nasdaq Capital Market, and (iii) a compensation committee composed entirely of independent directors and a written compensation committee charter meeting the requirements of the Nasdaq Capital Market. We currently utilize and presently intend to continue to utilize these exemptions. As a result, we may not have a majority of independent directors, our nomination and corporate governance committee and compensation committee may not consist entirely of independent directors and such committees may not be subject to annual performance evaluations. Accordingly, you may not have the same protections afforded to shareholders of companies that are subject to all of the corporate governance requirements of the Nasdaq Capital Market. See “Management.”
A significant portion of our total outstanding shares are restricted from immediate resale but may be sold into the market in the near future. This could cause the market price of our Class A Ordinary Shares to drop significantly, even if our business is doing well.
Sales of a substantial number of our Class A Ordinary Shares in the public market could occur at any time. These sales, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of our Class A Ordinary Shares. After this offering, we will have 1,250,000 Class A Ordinary Shares outstanding based on the number of shares outstanding as of the date of this prospectus. These Class A Ordinary Shares to be sold in this offering, will be freely tradable, without restriction, in the public market immediately following this offering. All remaining shares are currently restricted as a result of securities laws or lock-up arrangements but will be able to be sold after the offering as described in the “Shares Eligible for Future Sale” section of this prospectus.
The initial public offering price for our Class A Ordinary Shares may not be indicative of prices that will prevail in the trading market and such market prices may be volatile.
The initial public offering price does not bear any relationship to our earnings, book value or any other indicia of value. We cannot assure you that the market price of our Class A Ordinary Shares will not decline significantly below the initial public offering price. The financial markets in the United States and other countries have experienced significant price and volume fluctuations in the last few years. Volatility in the price of our Class A Ordinary Shares may be caused by factors outside of our control and may be unrelated or disproportionate to changes in our results of operations.
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You will experience immediate and substantial dilution in the net tangible book value of the Class A Ordinary Shares purchased.
The initial public offering price of our Class A Ordinary Shares is substantially higher than the (pro forma) net tangible book value per share of our Class A Ordinary Shares. Consequently, when you purchase our Class A Ordinary Shares in the Offering and upon completion of the Offering, you will incur immediate dilution of $3.68 per share, assuming an estimated initial public offering price of $4.00. In addition, you may experience further dilution to the extent that additional Class A Ordinary Shares are issued upon exercise of outstanding options we may grant from time to time.
The market price of our Class A Ordinary Shares may be volatile and may trade at prices below the initial public offering price.
The stock market in general, and the market for equities of new public companies in particular, have been highly volatile. As a result, the market price of our Class A Ordinary Shares is likely to be similarly volatile, and investors in our Class A Ordinary Shares may experience a decrease, which could be substantial, in the value of their Class A Ordinary Shares, including decreases unrelated to our operating performance or prospects, or a complete loss of their investment. The price of our Class A Ordinary Shares could be subject to significant fluctuations in response to a number of factors, including those listed elsewhere in this “Risk Factors” section and others such as:
| ● | variations in our operating performance and the performance of our competitors; |
| ● | actual or anticipated fluctuations in our quarterly or annual operating results; |
| ● | changes in our revenues or earnings estimates or recommendations by securities analysts; |
| ● | publication of research reports by securities analysts about us or our competitors in our industry; |
| ● | failure of securities analysts to initiate or maintain coverage of us, changes in ratings and financial estimates and the publication of other news by any securities analysts who follow our company, or our failure to meet these estimates or the expectations of investors; |
| ● | our failure or the failure of our competitors to meet analysts’ projections or guidance that we or our competitors may give to the market; |
| ● | additions or departures of key personnel; |
| ● | strategic decisions by us or our competitors, such as acquisitions, divestitures, spin-offs, joint ventures,strategic investments or changes in business strategy; |
| ● | announcement of technological innovations by us or our competitors; |
| ● | the passage of legislation, changes in interpretations of laws or other regulatory events or developments affecting us; |
| ● | speculation in the press or investment community; |
| ● | changes in accounting principles; |
| ● | terrorist acts, acts of war or periods of widespread civil unrest (including the Ukraine-Russia and Israel-Gaza conflicts); |
| ● | health pandemics (including COVID-19); |
| ● | changes in general market and economic conditions; |
| ● | changes or trends in our industry; |
| ● | investors’ perception of our prospects; and |
| ● | adverse resolution of any new or pending litigation against us. |
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In the past, securities class action litigation has often been initiated against companies following periods of volatility in their stock price. This type of litigation could result in substantial costs and divert our management’s attention and resources and could also require us to make substantial payments to satisfy judgments or to settle or defend litigation.
Certain recent initial public offerings of companies with public floats comparable to our anticipated public float have experienced extreme volatility that was seemingly unrelated to the underlying performance of the respective company. We may experience similar volatility, which may make it difficult for prospective investors to assess the value of our Class A Ordinary Shares.
In addition to the risk factor “The market price of our Class A Ordinary Shares may be volatile and may trade at prices below the initial public offering price,” addressed above, our Class A Ordinary Shares may be subject to extreme volatility that is seemingly unrelated to the underlying performance of our business. Recently, companies with comparable public floats and initial public offering sizes have experienced instances of extreme stock price run- ups followed by rapid price declines, and such stock price volatility was seemingly unrelated to the respective company’s underlying performance. Should our Class A Ordinary Shares experience run-ups and declines that are seemingly unrelated to our actual or expected operating performance and financial condition or prospects, prospective investors may have difficulty assessing the rapidly changing value of our Class A Ordinary Shares. In addition, investors of shares of our Class A Ordinary Shares may experience losses, which may be material, if the price of our Class A Ordinary Shares declines after this offering or if such investors purchase shares of our Class A Ordinary Shares prior to any price decline.
We do not intend to pay dividends after listing our Class A Ordinary Shares on Nasdaq Capital Market.
We currently intend to retain all remaining funds and future earnings, if any, for the operations and expansion of the business of our operating subsidiaries and do not anticipate declaring or paying any further dividends after listing our Class A Ordinary Shares on Nasdaq Capital Market. Any future determination related to our dividend policy will be made at the discretion of our board of directors after considering our financial condition, results of operations, capital requirements, contractual requirements, business prospects and other factors the board of directors deems relevant and will be subject to the restrictions contained in any future financing instruments.
If securities or industry analysts do not publish research or reports about our business, or if they publish a negative report regarding our Class A Ordinary Shares, the price of our Class A Ordinary Shares and trading volume could decline.
The trading market for our Class A Ordinary Shares may depend in part on the research and reports that industry or securities analysts publish about us. We do not have any control over these analysts. If one or more of the analysts who cover us downgrades us, the price of our Class A Ordinary Shares would likely decline. If one or more of these analysts ceases coverage of our Company or fails to regularly publish reports on us, we could lose visibility in the financial markets, which could cause the price of our Class A Ordinary Shares and the trading volume to decline.
You may face difficulties in protecting your interests, and your ability to protect your rights through U.S. courts may be limited, because we are incorporated under British Virgin Islands law.
We are a company incorporated under the laws of the British Virgin Islands. Our corporate affairs are governed by our Memorandum and Articles, the BVI Act and the common law of the British Virgin Islands. The rights of shareholders to take action against our directors, actions by our minority shareholders and the fiduciary duties of our directors to us under the British Virgin Islands law are to a large extent governed by the common law of the British Virgin Islands. The common law of the British Virgin Islands is derived in part from comparatively limited judicial precedent in the British Virgin Islands as well as from the common law of England, the decisions of whose courts are of persuasive authority, but are not binding, on a court in the British Virgin Islands. The rights of our shareholders and the fiduciary duties of our directors under the British Virgin Islands law are not as clearly established as they would be under statutes or judicial precedent in some jurisdictions in the United States. In particular, the British Virgin Islands has a less developed body of securities laws than the United States. Some U.S. states, such as Delaware, have more fully developed and judicially interpreted bodies of corporate law than the British Virgin Islands. In addition, the British Virgin Islands companies may not have standing to initiate a shareholder derivative action in a federal court of the United States.
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Certain corporate governance practices in the British Virgin Islands, where our holding company was incorporated, differ significantly from requirements for companies incorporated in other jurisdictions such as the United States. We can rely on home country practice with respect to our corporate governance after we complete this offering. If we choose to follow the British Virgin Islands’ practice in the future, our shareholders may be afforded less protection than they otherwise would under rules and regulations applicable to U.S. domestic issuers.
As a result of the foregoing, public shareholders may have more difficulties in protecting their interests in the face of actions taken by our management, or members of our board of directors than they would as public shareholders of a company incorporated in the United States.
If we cannot satisfy, or continue to satisfy, the initial listing requirements and other rules of NASDAQ Capital Market, our Class A Ordinary Shares may not be listed or may be delisted, which could negatively impact the price of our Class A Ordinary Shares and your ability to sell them.
We will seek to have our Class A Ordinary Shares approved for listing on the Nasdaq Capital Market upon consummation of this offering. We cannot assure you that we will be able to meet those initial listing requirements at that time. Even if our Class A Ordinary Shares are listed on the Nasdaq Capital Market, we cannot assure you that our Class A Ordinary Shares will continue to be listed on the Nasdaq Capital Market.
In addition, following this Offering, in order to maintain our listing on the Nasdaq Capital Market, we will be required to comply with certain rules of the Nasdaq Capital Market, including those regarding minimum shareholders’ equity, minimum share price and certain corporate governance requirements. Even if we initially meet the listing requirements and other applicable rules of the Nasdaq Capital Market, we may not be able to continue to satisfy these requirements and applicable rules. If we are unable to satisfy the Nasdaq Capital Market criteria for maintaining our listing, our Class A Ordinary Shares could be subject to delisting.
If the Nasdaq Capital Market delists our Class A Ordinary Shares from trading, we could face significant consequences, including:
| ● | a limited availability for market quotations for our Class A Ordinary Shares; |
| ● | reduced liquidity with respect to our Class A Ordinary Shares; |
| ● | a determination that our Ordinary Share is a “penny stock,” which will require brokers trading in our Ordinary Share to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our Ordinary Share; |
| ● | limited amount of news and analyst coverage; and |
| ● | a decreased ability to issue additional securities or obtain additional financing in the future. |
We will incur significant costs as a result of operating as a public company, and our management will devote substantial time to new compliance initiatives. We may fail to comply with the rules that apply to public companies, including Section 404 of the Sarbanes-Oxley Act of 2002, or Section 404, which could result in sanctions or other penalties that could materially and adversely affect our business, financial condition, results of operations and prospects.
We will incur significant legal, accounting and other expenses as a public company, including costs resulting from public company reporting obligations under the Exchange Act and regulations regarding corporate governance practices. The listing requirements of the Nasdaq Capital Market, and the rules of the SEC require that we satisfy certain corporate governance requirements relating to director independence, filing annual and interim reports, stockholder meetings, approvals and voting, soliciting proxies, conflicts of interest and a code of conduct. Our management and other personnel will need to devote a substantial amount of time to ensure that we comply with all of these requirements. Moreover, the reporting requirements, rules and regulations will increase our legal and financial compliance costs and will make some activities more time-consuming and costly. Any changes we make to comply with these obligations may not be sufficient to allow us to satisfy our obligations as a public company on a timely basis, or at all. These reporting requirements, rules and regulations, coupled with the increase in potential litigation exposure associated with being a public company, could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors or board committees or to serve as executive officers, or to obtain certain types of insurance, including directors’ and officers’ insurance, on acceptable terms.
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After this offering, we will be subject to Section 404 and the related rules of the SEC, which generally require our management and independent registered public accounting firm to report on the effectiveness of our internal control over financial reporting. Beginning with the second annual report that we will be required to file with the SEC, Section 404 requires an annual management assessment of the effectiveness of our internal control over financial reporting. However, for so long as we remain an emerging growth company as defined in the JOBS Act, we intend to take advantage of certain exemptions from various reporting requirements that are applicable to public companies that are not emerging growth companies, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404. Once we are no longer an emerging growth company or, if prior to such date, we opt to no longer take advantage of the applicable exemption, we will be required to include an opinion from our independent registered public accounting firm on the effectiveness of our internal control over financial reporting.
During the course of our review and testing, we may identify deficiencies and be unable to remediate them before we must provide the required reports. In connection with the audits of our consolidated financial statements for the year ended December 31, 2022, we identified material weaknesses in our internal control over financial reporting as well as other control deficiencies for the above mentioned period. As defined in the standards established by the PCAOB, a “material weakness” is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. We intend to implement measures designed to improve our internal control over financial reporting to address the underlying causes of these material weaknesses. In addition, as a public company we will be required to file accurate and timely quarterly and annual reports with the SEC under the Exchange Act. In order to report our results of operations and financial statements on an accurate and timely basis, we will depend in part third parties to provide timely and accurate notice of their costs to us. Any failure to report our financial results on an accurate and timely basis could result in sanctions, lawsuits, delisting of our shares from the Nasdaq Capital Market or other adverse consequences that would materially and adversely affect our business, financial condition, results of operations and prospects.
We have broad discretion in the use of the net proceeds from this offering and we may use these proceeds in ways with which you may not agree.
We intend to the proceeds from this offering for resource development activities including, possibly, Regionally market development, Research & Development, Electric Vehicle fleet conversion and expansion, product development and general corporate purposes. However, our management will have broad discretion in the application of the net proceeds, including for any of the purposes described in the section entitled “Use of Proceeds,” and you will not have the opportunity as part of your investment decision to assess whether the net proceeds are being used appropriately. You must rely on the judgment of our management regarding the application of the net proceeds of this offering. The net proceeds may be used for corporate or other purposes with which you do not agree or that do not improve our profitability or increase our share price. Because of the number and variability of factors that will determine our use of the net proceeds from this offering, their ultimate use may vary substantially from their currently intended use. The net proceeds from this offering may also be placed in investments that do not produce income or that lose value. The failure by our management to apply these funds effectively could harm our business.
There can be no assurance that we will not be deemed a passive foreign investment company, or PFIC, for U.S. federal income tax purposes for any taxable year, which could result in adverse U.S. federal income tax consequences to U.S. holders of our Class A Ordinary Shares.
A non-U.S. corporation will be a PFIC for any taxable year if either (1) at least 75% of its gross income for such year consists of certain types of “passive” income; or (2) at least 50% of the value of its assets (based on an average of the quarterly values of the assets) during such year is attributable to assets that produce passive income or are held for the production of passive income, or the asset test. Based on our current and expected income and assets (taking into account the expected cash proceeds and our anticipated market capitalization following this offering), we do not presently expect to be a PFIC for the current taxable year or the foreseeable future. However, no assurance can be given in this regard because the determination of whether we are or will become a PFIC is a fact-intensive inquiry made on an annual basis that depends, in part, upon the composition of our income and assets. In addition, there can be no assurance that the Internal Revenue Service, or IRS, will agree with our conclusion or that the IRS would not successfully challenge our position. Fluctuations in the market price of our Class A Ordinary Shares may cause us to become a PFIC for the current or subsequent taxable years because the value of our assets for the purpose of the asset test may be determined by reference to the market price of our Class A Ordinary Shares. The composition of our income and assets may also be affected by how, and how quickly, we use our liquid assets and the cash raised in this offering. If we were to be or become a PFIC for any taxable year during which a U.S. holder holds our Class A Ordinary Shares, certain adverse U.S. federal income tax consequences could apply to such U.S. holder and such U.S. Holder may be subject to additional reporting requirements.
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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements that are based on our management’s beliefs and assumptions and on information currently available to us. All statements other than statements of historical facts are forward-looking statements. The forward-looking statements are contained principally in, but not limited to, the sections entitled “Prospectus Summary,” “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business.” These statements relate to future events or to our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or could be materially affected by changes in these estimates brought about by changes in the factors mentioned. The carrying amounts of the Group’s intangible assets are disclosed in Note 7 of the consolidated financial statements.
| vi. | Fair value of financial instruments |
The financial instruments of the Group such as receivables, borrowings and payables are carried at fair value. The management reviews periodically the degree of which fair value input of the financial instruments are observable to determine the fair value of the financial assets or liabilities. The fair value adopted by management is based on quoted price in active markets or unquoted price for identical assets or liabilities.
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CORPORATE HISTORY AND STRUCTURE
Our Corporate History
Concorde International was incorporated in the British Virgin Islands on May 2, 2023. Our registered office in the British Virgin Islands is at Conyers Trust Company (BVI) Limited of Commerce House, Wickhams Cay 1, PO Box 3140, Road Town, Tortola, British Virgin Islands VG1110. Our principal executive office is at 3 Ang Mo Kio Street 62, #01-49 LINK@AMK, Singapore 569139. Our telephone number at this location is +65 2960802. Our principal website address is https://concordesecurity.com. The information contained on our website does not form part of this prospectus.
Concorde International was incorporated to acquire and hold, indirectly, Concorde Security Pte Ltd (Singapore), Concorde Security Sdn Bhd (Malaysia), Concorde Security Limited (UK), Concorde Asia Pte Ltd (Singapore) and Berjaya Academy Pte Ltd (Singapore).
Concorde International Group Pte Ltd (Singapore) was incorporated on June 12, 2023. It is a holding company and a 100% owned subsidiary of Concorde International. Its registered office is at 3 Ang Mo Kio Street 62, #01-49 LINK@AMK, Singapore 569139.
Concorde Security Pte Ltd (Singapore) was incorporated on June 16, 2005. Concorde Security Pte Ltd’s main business is in the provision of man-guarding and i-Guarding services in Singapore. It has received numerous awards and recognition. Notably, it has received various grants from the Infocomm Media Development Authority of Singapore (IMDA).
Security Industry Transformation Map (ITM) Pilot Program 2018/2019 — Funding of SG$1.8M for building owners/security agencies to adopt IFS solutions.
Productivity Solutions Grant (PSG) 2021/2022 — IFS solutions is the only pre-approved IT solutions under PSG in the Go Business Singapore portal under the category of security surveillance.
Advanced Digital Solutions (ADS) 2022/2023 — An initiative under the SMEs Go Digital programme for building owners/facilities managing agencies to adopt IFS solutions enhanced further as a complete Smart Security Solutions.
On January1, 2019, Lek Seck Tin (“Lek Family”) invested US$1,000,000 in exchange for an equity stake of 1.48% of Concorde Security Pte Ltd (Singapore).
On November 27, 2018, Wolfgang Steuerle and Yogeshwari A/P Subramaniam (“Wolfgang”) invested US$500,000 in exchange for an equity stake of 0.74% of Concorde Security Pte Ltd (Singapore).
On July 29, 2005, Sharifah Noriati Binte Said Omar (“Sharifah”) was allocated 0.98% of Concorde Security Pte Ltd (Singapore) in lieu of services provided.
Concorde Security Sdn Bhd (Malaysia), Concorde Singapore’s 100% owned subsidiary, was incorporated in Malaysia on January 13, 2015. It is currently at a development stage.
Concorde Security Limited (UK), Concorde Singapore’s 100% owned subsidiary, was incorporated in the United Kingdom on December 23, 2016. It is currently in a development stage.
Concorde Asia Pte Ltd, Concorde Singapore’s 70% indirectly owned subsidiary, was incorporated in Singapore on October 8, 2013.
Berjaya Academy Pte Ltd, Concorde Singapore’s 70% indirectly owned subsidiary, was formed in Singapore on March 6, 2020.
Concorde i-FAST USA Inc.(Texas), Concorde Singapore’s 100% owned subsidiary, was incorporated in State of Texas on April 25, 2024.
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Group Reorganization
In connection with this offering, we have undertaken a reorganization of our corporate structure (the “Reorganization”) in the following steps:
| ● | On May 2, 2023, we incorporated Concorde International Group Ltd under the laws of the British Virgin Islands; |
| ● | On June 12, 2023, we incorporated Concorde Singapore as a wholly owned subsidiary of Concorde International Group Ltd; |
| ● | On July 31, 2023, Concorde Singapore acquired 100% of the equity interests in Concorde Security Limited from Concorde Group Pte Ltd. |
| ● | On October 27, 2023, Concorde International Group Pte Ltd acquired 100% of the equity interests in Concorde Security Sdn Bhd from Swee Kheng Chua; |
| ● | On November 1, 2023, Concorde International Group Pte Ltd acquired 96.81% of the equity interests in Concorde Security Pte Ltd from Swee Kheng Chua. Concorde Security Pte Ltd is a 96.81% subsidiary of Concorde International Group Pte Ltd; |
| ● | On November 1, 2023, Concorde International Group Pte Ltd acquired 100% of the equity interests in Concorde Asia Pte Ltd from Swee Kheng Chua. On November 3, 2023, Weilekai Investment Pte Ltd acquired 30% of the equity interests in Concorde Asia Pte Ltd from Concorde International Group Pte Ltd. Consequently, Concorde Asia Pte Ltd is a 70% indirectly owned subsidiary of Concorde International Group Pte Ltd; |
| ● | On November 1, 2023, Concorde International Group Pte Ltd acquired 100% of the equity interests in Berjaya Academy Pte Ltd from Sharifah Noriati Binte Said Omar. On November 8, 2023, Weilekai Investment Pte Ltd acquired 30% of the equity interests in Berjaya Academy Pte Ltd from Concorde International Group Pte Ltd. Consequently, Berjaya Academy Pte Ltd is a 70% indirectly owned subsidiary of Concorde International Group Pte Ltd. Consequently, Concorde International Group Ltd, through a restructuring which is accounted for as a reorganization of entities under common control, became the ultimate holding company of all the companies mentioned above. |
Our Corporate Structure
The following diagram illustrates our corporate structure as of the date of this registration statement.
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INDUSTRY
We operate within the security and facilities management industry. The markets that we address include residential communities, commercial, educational institutions, government organizations, shopping centers, healthcare centers and transportation hubs, and logistics centers.
We believe that the Singapore security and facilities market is large, growing and economically resilient. According to Mordor Intelligence (See https://www.mordorintelligence.com/industry-reports/singapore-facility-management- market), the Singapore security and facilities market is expected to grow from USD 1.01 billion in 2023 to USD 1.19 billion by 2028, representing a Compound Annual Growth Rate (CAGR) of approximately 1.99%.
The security and facilities management industry in Singapore is relatively fragmented. According to the Ministry of Home Affairs Singapore, there are currently more than 49,000 security officers and 250 security agencies in Singapore. With the heightened terrorism threat, increased demand for security services, and a slowing pace of workforce growth, the industry needs to undergo transformation to increase productivity and make job requirements less manpower intensive.
As a result, the Singapore government has developed the Security Industry transformation Map (“Security ITM”). The Security ITM seeks to develop a vibrant, technologically advanced and competitive security industry that delivers better security outcomes for Singapore and provides good jobs for Singaporeans. Led by the Ministry of Home Affairs, the Security ITM is a collective effort by industry associations, companies, unions, service buyers, security agencies and government agencies.
Shift from Headcount-based Model to Integrated Security Solutions
The Security ITM has identified four strategies to transform the industry and enable security companies to transition from merely supplying manpower to delivering integrated security solutions. The four strategies are: (i) supporting technology and innovation; (ii) promoting “best sourcing” of services, with Government taking the lead; (iii) aligning regulations with ITM objectives to improve standards; and (iv) improving skills to enable career progression.
| Department | Number of Employees | |||
| Management | 3 | |||
| Finance and Accounting | 3 | |||
| Operations Management | 5 | |||
| Business Development | 3 | |||
| Technology & Engineering | 6 | |||
| Administrative | 2 | |||
| Security officers | 75 | |||
| Others | 3 | |||
| Total | 100 | |||
Collaborations
| S/No | Company/Organization | Summary of Collaboration | ||
| 1 | ST Engineering Synthesis Pte Ltd |
Provision of technology solutions including security services for the Punggol Digital District as part of Singapore’s Smart Nation initiative, in which is a key project aimed at integrating digital technology and smart solutions to create a modern and connected urban environment. | ||
| 2 |
Infocomm Media Development Authority |
Funding grants from the Singapore government to support technological transformation of clients in Singapore. | ||
| 3 |
Kyowa Security Guard & General Services Pte Ltd |
Provision of I Guarding Services and Solutions to reduce the reliance of security manpower and enhance of security outcome. | ||
| 4 | Exploit Technologies Pte Ltd | Deployment and integration of network devices with the TV white space technology in Singapore. | ||
| 5 | Guardforce AI Singapore Pte Ltd |
Distribution and technology integration of Guardforce AI’s robotics solutions in Singapore. Target market includes shopping centers, hotels, exhibition centers. |
Legal Proceedings
We may be subject to legal proceedings, investigations and claims incidental to the conduct of our business from time to time. We are currently not party to any material legal or arbitration proceedings, including those relating to bankruptcy, receivership or similar proceedings and those involving any third party, which may have, or have had in the recent past, significant effects on our financial position or profitability.
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REGULATIONS OF OUR INDUSTRY
Our business operations are not subject to any special legislation or regulatory controls other than those generally applicable to companies and businesses incorporated and/or operating in Singapore.
Police Licensing and Regulatory Department (PLRD)
The Police Licensing and Regulatory Department (PLRD) of Singapore regulates sectors that pose risks to a safe, secure and orderly society under various regimes in support of Singapore’s Police Force’s mission to prevent, deter and detect crime. The PLRD is responsible for policy formulation, application processing and enforcement action across its licensing regimes. The private security industry falls under the PLRD’s licensing regime which is regulated by the Private Security Industry Act 2007 and its subsidiary legislation.
Personal Data Protection Act (PDPA)
Data Protection Obligations
The Personal Data Protection Act 2012 of Singapore (“PDPA”) establishes the Singapore regime for the protection of personal data, and governs the collection, use and disclosure of personal data by organizations. In this regard, “personal data” as defined under the PDPA refers to data, whether true or not, about an individual who can be identified from that data or other information to which the organization has or is likely to have access.
An organization is required to comply with, amongst other things, the following obligations prescribed by the PDPA:
| (a) | Purpose limitation obligation — personal data must be collected, used or disclosed only for purposes that a reasonable person would consider appropriate in the circumstances, and if the individual concerned has been informed of the said purpose; |
| (b) | Notification obligation — individuals must be notified of the purposes for the collection, use or disclosure of their personal data, prior to such collection, use or disclosure; |
| (c) | Consent obligation — the consent of individuals must be obtained for any collection, use or disclosure of their personal data, unless exceptions apply. Additionally, an organization must allow the withdrawal of consent which has been given or is deemed to have been given; |
| (d) | Access and correction obligations — when requested by an individual and unless exceptions apply, an organization must: (i) provide that individual with access to his personal data in the possession or under the control of the organization and information about the ways in which his personal data may have been used or disclosed during the past year, and/or (ii) correct an error or omission in his personal data that is in the possession or under the control of the organization; |
| (e) | Accuracy obligation — an organization must make reasonable efforts to ensure that personal data collected by or on its behalf is accurate and complete if such data is likely to be used by the organization to make a decision affecting the individual to whom the personal data relates or if such data is likely to be disclosed to another organization; |
| (f) | Protection obligation — an organization must implement reasonable security arrangements for the protection of personal data in its possession or under its control; |
| (g) | Retention limitation obligation — an organization must not keep personal data for longer than it is necessary to fulfill; (i) the purposes for which it was collected, or (ii) a legal or business purpose; |
| (h) | Transfer limitation obligation — personal data must not be transferred out of Singapore except in accordance with the requirements prescribed under the PDPA; and |
| (i) | Openness obligation — an organization must implement the necessary policies and procedures in order to meet the obligations under the PDPA and shall make information about its policies and procedures available on request. |
Organizations have mandatory obligations to assess data breaches they suffer, and to notify the Singapore Personal Data Protection Commission (“PDPC”) and the relevant individuals where the data breach is of a certain severity.
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The PDPA creates various offenses in connection with the improper use of personal data, certain methods of collecting personal data and certain failures to comply with the requirements under the PDPA. These offenses may be applicable to organizations, their officers and/or their employees. Offenders are liable on conviction to fines and/or imprisonment. The PDPA empowers the PDPC with significant regulatory powers to ensure compliance with the PDPA, including powers to investigate, give directions and impose a financial penalty of up to S$1 million or 10% of the annual turnover in Singapore of the organization. In addition, the PDPA created a right of private action, pursuant to which the Singapore courts may grant damages, injunctions and relief by way of declaration, to persons who suffer loss or damages directly as a result of contraventions of certain requirements under the PDPA.
Infocomm Media Development Authority (IMDA)
The Infocomm Media Development Authority (IMDA) is a statutory board under the Singapore Ministry of Communications and Information (MCI). IMDA provides numerous programmes, policies and grants that cater to industries and communities. IMDA also protects consumers’ privacy through the Personal Data Protection Commission (PDPC).
Regulations on Labor
The Employment Act 1968 of Singapore (the “Employment Act”) generally extends to all employees, with the exception of certain groups of employees. It provides employees falling within its ambit protections such as minimum notice periods, maximum working hours, a maximum amount of deductions from wages, minimum holidays and rest days, maternity and childcare leave, paid childcare leave, sick leave, etc. The Employment Act also applies to employees who are foreigners so long as they fall within the definition of “employee” under the Employment Act. In addition, the employment of foreign manpower in Singapore is also governed by the Employment of Foreign Manpower Act 1990 of Singapore.
Aside from minimum benefits in respect of the aforesaid terms of employment in the Employment Act, employees in Singapore are entitled to contributions to the central provident fund by the employer as prescribed under the Central Provident Fund Act 1953 of Singapore. The specific contribution rate to be made by employers varies depending on whether the employee is a Singapore citizen or permanent resident and the age group and wage band of the employee. Generally, for employees who are Singapore citizens, 55 years old or below and that earn more S$750 a month, the employer’s contribution rate is 17% of the employee’s wages.
Road Traffic Act 1961
The Road Traffic Act 1961 in Singapore is a comprehensive piece of legislation that outlines the legal framework for road safety and regulation in the country. It covers various aspects of road traffic, including vehicle registration and licensing, traffic rules and regulations, the powers of traffic police, and the penalties for offenses related to road safety. The Act plays a crucial role in maintaining order on Singapore’s roadways, ensuring the safety of all road users, and facilitating the efficient functioning of the transportation system.
Workplace Safety and Health Act 2006
The Workplace Safety and Health Act covers the safety, health and welfare of persons at work in a workplace. It requires stakeholders to take reasonably practicable steps for the safety and health of workers and others affected by work.
A related legislation is the Work Injury Compensation Act 2019 which provides for the payment of compensation to employees for injury suffered arising out of and in the course of their employment and to regulate providers of insurance for liability.
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MANAGEMENT
Dividends paid by a “qualified foreign corporation” are eligible for taxation for certain non-corporate U.S. Holders at a reduced capital gains rate rather than the marginal tax rates generally applicable to ordinary income provided that certain requirements are met. However, if we are a PFIC for the taxable year in which the dividend is paid or the preceding taxable year (see discussion above under “— Passive Foreign Investment Company Consequences”), we will not be treated as a qualified foreign corporation, and therefore the reduced capital gains tax rate described above will not apply. Each U.S. Holder is advised to consult its tax advisors regarding the availability of the reduced tax rate on dividends with regard to its particular circumstances.
A non-United States corporation (other than a corporation that is classified as a PFIC for the taxable year in which the dividend is paid or the preceding taxable year) generally will be considered to be a qualified foreign corporation (a) if it is eligible for the benefits of a comprehensive tax treaty with the United States which the Secretary of Treasury of the United States determines is satisfactory for purposes of this provision and which includes an exchange of information provision, or (b) with respect to any dividend it pays on our Class A Ordinary Shares that are readily tradable on an established securities market in the United States.
Sale, Exchange or Other Disposition of our Class A Ordinary Shares
Subject to the discussion above under “— Passive Foreign Investment Company Consequences”, a U.S. Holder generally will recognize capital gain or loss for U.S. federal income tax purposes upon the sale, exchange or other disposition of our Class A Ordinary Shares in an amount equal to the difference, if any, between the amount realized (i.e., the amount of cash plus the fair market value of any property received) on the sale, exchange or other disposition and such U.S. Holder’s adjusted tax basis in our Class A Ordinary Shares. Such capital gain or loss generally will be long-term capital gain taxable at a reduced rate for noncorporate U.S. Holders or long-term capital loss if, on the date of sale, exchange or other disposition, our Class A Ordinary Shares were held by the U.S. Holder for more than one year. Any capital gain of a non-corporate U.S. Holder that is not long-term capital gain is taxed as ordinary income rates. The deductibility of capital losses is subject to limitations. Any gain or loss recognized from the sale or other disposition of our Class A Ordinary Shares will generally be gain or loss from sources within the United States for U.S. foreign tax credit purposes.
Medicare Tax
Certain U.S. Holders that are individuals, estates or trusts and whose income exceeds certain thresholds generally are subject to a 3.8% tax on all or a portion of their net investment income, which may include their gross dividend income and net gains from the disposition of our Class A Ordinary Shares. If you are a United States person that is an individual, estate or trust, you are encouraged to consult your tax advisors regarding the applicability of this Medicare tax to your income and gains in respect of your investment in our Class A Ordinary Shares.
Information Reporting
U.S. Holders may be required to file certain U.S. information reporting returns with the IRS with respect to an investment in our Class A Ordinary Shares, including, among others, IRS Form 8938 (Statement of Specified Foreign Financial Assets). As described above under “Passive Foreign Investment Company Consequences”, each U.S. Holder who is a shareholder of a PFIC must file an annual report containing certain information. U.S. Holders paying more than $100,000 for our Class A Ordinary Shares may be required to file IRS Form 926 (Return by a U.S. Transferor of Property to a Foreign Corporation) reporting this payment. Substantial penalties may be imposed upon a U.S. Holder that fails to comply with the required information reporting.
U.S. Holders should consult their own tax advisors regarding the information reporting rules.
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Certain Singapore Taxation Considerations
The following summary is not intended to be or to be regarded as tax advice to any investors, and investors should consult their own professional tax advisors regarding the Singapore tax matters.
Corporate Income Tax
A company is regarded as a tax resident in Singapore if the control and management of its business is exercised in Singapore. “Control and management” is defined as the making of decisions on strategic matters, such as those concerning the company’s policy and strategy. Generally, the location of a company’s board of directors’ meetings where strategic decisions are made determines where the control and management of that company is exercised. However, under certain scenarios, holding board meetings in Singapore may not be sufficient and other factors will be considered to determine if the control and management of the business is indeed exercised in Singapore.
A Singapore tax resident corporate taxpayer is subject to Singapore income tax on:
| (a) | income accruing in or derived from Singapore; or |
| (b) | income derived from outside Singapore (i.e. foreign-sourced income) which is received or deemed received in Singapore, unless otherwise exempted. A non-Singapore tax resident corporate taxpayer is liable to Singapore income tax on income accruing in or derived from Singapore. |
A non-Singapore tax resident corporate taxpayer is also liable to Singapore income tax on income derived from outside Singapore which is received or deemed to have been received in Singapore but generally only where such taxpayer is considered to be operating in or from Singapore.
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Foreign-sourced income is deemed to be received in Singapore when it is:
| (a) | remitted to, transmitted or brought into Singapore; |
| (b) | used to pay off any debt incurred in respect of a trade or business carried on in Singapore; or |
| (c) | used to purchase any movable property brought into Singapore. |
Foreign-sourced income in the form of branch profits, dividends and service fee income (“specified foreign income”) received or deemed received in Singapore by a Singapore tax resident company are exempted from Singapore tax provided that the following qualifying conditions are met:
| (a) | such income is subject to tax of a similar character to income tax (by whatever name called) under the law of the territory from which such income is received; |
| (b) | at the time such income is received in Singapore by the person resident in Singapore, the highest rate of tax of a similar character to income tax (by whatever name called) levied under the law of the territory from which such income is received on any gains or profits from any trade or business carried on by any company in that territory at that time is at least 15.0%; and |
| (c) | the Comptroller of Income Tax (the “Comptroller”) is satisfied that the tax exemption would be beneficial to the person resident in Singapore who is receiving or deemed to be receiving the specified foreign income. |
The prevailing corporate income tax rate in Singapore is 17.0% with the first S$200,000 of chargeable income of a company being partially exempt from tax as follows:
| (a) | 75.0% of the first S$10,000 of chargeable income; and |
| (b) | 50.0% of the next S$190,000 of chargeable income. |
New companies will also, subject to certain conditions and exceptions, be eligible for tax exemption for each of the company’s first three (3) years of assessment as follows:
| (a) | 75.0% of the first S$100,000 of chargeable income; and |
| (b) | 50.0% of the next S$100,000 of chargeable income. |
The remaining chargeable income (after the tax exemption scheme for new companies or the partial tax exemption scheme for companies) will be fully taxable at the prevailing corporate tax rate. For the year of assessment 2024, companies will receive a 50% corporate income tax rebate capped at S$40,000. For companies which employed at least one local employee in 2023 will receive a cash payout of at least S$2,000. The maximum total benefits of the corporate income tax rebate and the cash payout that a company may receive is capped at S$40,000.
Dividend Distributions
All Singapore-tax resident companies are currently under the one-tier corporate tax system, or one-tier system.
Under the one-tier system, the income tax paid by a tax resident company is a final tax and its distributable profits can be distributed to shareholders as tax exempt (one-tier) dividends. Such dividends are tax exempt in the hands of a shareholder, regardless of the tax residence status, shareholding level or legal form of the shareholder.
Accordingly, dividends received in respect of the ordinary shares of a Singapore-tax resident company by either a resident or non-resident of Singapore are not subject to Singapore income tax (whether by withholding or otherwise).
Foreign shareholders are advised to consult their own tax advisers to take into account the tax laws of their respective countries of residence and the existence of any agreement for the avoidance of double taxation which their country of residence may have with Singapore.
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Gains on Disposal of Shares
Singapore does not currently impose tax on capital gains. Gains arising from the disposal of the shares may be construed to be of an income nature and subject to Singapore income tax, especially if they arise from activities which may be regarded as the carrying on of a trade or business in Singapore. Such gains may also be considered income in nature, even if they do not arise from an activity in the ordinary course of trade or business or an ordinary incident of some other business activity, if the shares were purchased with the intention or purpose of making a profit by sale rather than holding for long-term investment purposes in Singapore. Conversely, gains from disposition of the shares in Singapore, if considered as capital gains rather than income by the Inland Revenue Authority of Singapore (“IRAS”), are not taxable in Singapore.
There are no specific laws or regulations which deal with the characterization of whether a gain is income or capital in nature. The characterization of gains arising from the sale of our shares will depend primarily on the facts and circumstances (commonly referred to as the “badges of trade”) of each shareholder.
Subject to specified exceptions, Section 13W of the Income Tax Act 1947 (“SITA”) provides for certainty on the non- taxability of gains derived by a corporate taxpayer from the disposal of ordinary shares during the period from June 1, 2012 to December 31, 2027 (both dates inclusive) where:
| ● | the divesting company had legally and beneficially held a minimum shareholding of 20% of the ordinary shares of the company whose shares are being disposed; and |
| ● | the divesting company had maintained the minimum 20% shareholding for a continuous period of at least 24 months immediately prior to the disposal. |
The exemption prescribed under Section 13W of the SITA is not applicable under the following scenarios:
| (a) | the disposal(s) of shares the gains or profits of which are included as part of the income of an insurer company; |
| (b) | the disposal of shares before 1 June 2022 in a company that is: |
| (i) | is in the business of trading Singapore immovable properties; or |
| (ii) | principally carries on the activity of holding Singapore immovable properties, other than property development, where the shares are not listed on a stock exchange in Singapore or elsewhere; |
| (c) | the disposal of shares on or after 1 June 2022 not listed on a stock exchange in Singapore or elsewhere, being shares in a company that the Comptroller is satisfied: |
| (i) | is in the business of trading immovable properties situated whether in Singapore or elsewhere; |
| (ii) | principally carries on the activity of holding immovable properties situated whether in Singapore or elsewhere; or |
| (iii) | has undertaken property development on Singapore or elsewhere, except where: |
| (A) |
the immovable property developed is used by the company to carry on its trade or business (including the business of letting immovable properties), not being a business mentioned in sub-paragraph (i); and |
| (B) |
the company did not undertake any property development in Singapore or elsewhere for a period of at least 60 consecutive months before the disposal of shares; or |
| (d) | the disposal(s) of shares by a partnership, limited partnership and limited liability partnership one or more of the partners of which is a company or are companies. |
Shareholders who apply, or who are required to apply, the Singapore Financial Reporting Standard 39 — Financial Instruments: Recognition and Measurement, or SFRS(I) 1-39; the Singapore Financial Reporting Standard 109 — Financial Instruments, or FRS 109; or the Singapore Financial Reporting Standard (International) 9 — Financial Instruments, or SFRS(I) 9, may for the purposes of Singapore income tax be required to recognize gains or losses in respect of financial instruments (not being gains or losses in the nature of capital) in accordance with SFRS(I) 1-39, FRS 109 or SFRS(I) 9 (as the case may be) (as modified by the applicable provisions of Singapore income tax law) even where no sale or disposal of the shares is made.
Shareholders who may be subject to the above-mentioned tax treatments, including under Sections 34A or 34AA of the SITA, should consult their accounting and tax advisers regarding the Singapore income tax consequences of their acquisition, holding and disposal of the shares.
EACH PROSPECTIVE INVESTOR IS URGED TO CONSULT ITS OWN TAX ADVISOR ABOUT THE TAX CONSEQUENCES TO IT OF AN INVESTMENT IN CLASS A ORDINARY SHARES IN LIGHT OF THE INVESTOR’S OWN CIRCUMSTANCES.
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ENFORCEABILITY OF CIVIL LIABILITIES
We were incorporated under the laws of British Virgin Islands. All of our directors and officers, as well as the certain experts named in the “Experts” section of this prospectus, reside outside of the United States. Service of process upon such persons may be difficult or impossible to effect within the United States. Furthermore, because a substantial portion of our assets, and substantially all the assets of our directors and officers named herein, are located outside of the United States, any judgment obtained in the United States, including a judgment based upon the civil liability provisions of United States federal securities laws, against us or any of such persons may not be collectible within the United States.
Our agent for service of process in the United States is Cogency Global Inc., located at 122 East 42nd Street, 18th Floor, New York, NY 10168.
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UNDERWRITING
R.F. Lafferty & Co., Inc. is the representative for the several underwriters of this offering, or the representative. We have entered into an underwriting agreement dated , 2024, with R.F. Lafferty & Co., Inc. Subject to the terms and conditions of the underwriting agreement, we have agreed to sell to the underwriters, and each underwriter has agreed, severally and not jointly, to purchase, at the public offering price less the underwriting discounts set forth on the cover page of this prospectus, the number of Class A Ordinary Shares at the initial public offering price, less the underwriting discounts and commissions, as set forth on the cover page of this prospectus, the number of shares listed next to its name in the following table:
| Underwriter | Number of Shares | |||
| R.F. Lafferty & Co., Inc. | ||||
| Total | 1,250,000 | |||
The underwriters are committed to purchase all Class A Ordinary Shares offered by us other than those covered by the over-allotment option described below, if any are purchased. The obligations of the underwriters may be terminated upon the occurrence of certain events specified in the underwriting agreement. Furthermore, the underwriting agreement provides that the obligations of the underwriters to pay for and accept delivery of the Class A Ordinary Shares offered by us in this prospectus are subject to various representations and warranties and other customary conditions specified in the underwriting agreement, such as receipt by the representative of officers’ certificates and legal opinions.
We have agreed to indemnify the underwriters against specified liabilities, including liabilities under the Securities Act, and to contribute to payments the underwriters may be required to make in respect thereof.
The underwriters are offering Class A Ordinary Shares subject to prior sale, when, as and if issued to and accepted by them, subject to approval of legal matters by its counsel and other conditions specified in the underwriting agreement. The underwriters reserve the right to withdraw, cancel or modify offers to the public and to reject orders in whole or in part.
We have granted the underwriters an over-allotment option. This option, which is exercisable for up to 45 days after the date of this prospectus, permits the underwriters to purchase up to an aggregate of 187,500 additional Class A Ordinary Shares (equal to 15% of the Class A Ordinary Shares sold in this offering) at the public offering price per
| Nasdaq listing fee | 50,000 | |||
| Accounting fees and expenses | 487,500 | |||
| Legal fees and expenses | 350,000 | |||
| Transfer agent fees and expenses | 950 | |||
| Printing fees and expenses | 8,674 | |||
| Miscellaneous | 1,352 | |||
| TOTAL | $ | 900,000 |
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LEGAL MATTERS
Certain legal matters as to the United States federal and New York law in connection with this offering will be passed upon for us by Bevilacqua PLLC. The underwriters are being represented by Ellenoff Grossman & Schole LLP with respect to certain legal matters as to U.S. federal securities and New York State law. The validity of the Class A Ordinary Shares offered in this offering and certain other legal matters as to BVI law will be passed upon for us by Conyers Dill & Pearman. Bevilacqua PLLC may rely upon Conyers Dill & Pearman with respect to matters governed by BVI law. Certain legal matters as to the Singapore law in connection with this offering will be passed upon for us by ReThink Legal.
EXPERTS
Our consolidated financial statements as of December 31, 2023 and 2022 and for the years then ended included in this prospectus have been audited by Kreit & Chiu CPA LLP, an independent registered public accounting firm, as stated in their report appearing herein. Such financial statements are included in reliance upon the report of such firm given upon their authority as experts in accounting and auditing.
The office of Kreit & Chiu CPA LLP is located at 733 Third Avenue, Floor 16, #1014, New York, NY 10017, the United States.
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the SEC a registration statement on Form F-1, including relevant exhibits and schedules, under the Securities Act with respect to the Class A Ordinary Shares to be sold in this offering. This prospectus, which constitutes a part of the registration statement, does not contain all of the information contained in the registration statement. You should read the registration statement on Form F-1 and its exhibits and schedules for further information with respect to us and the Class A Ordinary Shares.
Immediately upon completion of this offering, we will become subject to periodic reporting and other informational requirements of the Exchange Act as applicable to foreign private issuers. Accordingly, we will be required to file reports, including annual reports on Form 20-F, and other information with the SEC. The SEC maintains a website that contains reports, proxy and information statements and other information regarding registrants that file electronically with the SEC. The address of the website is www.sec.gov. Additionally, we will make these filings available, free of charge, on our website at https:// www.concordesecurity.com as soon as reasonably practicable after we electronically file such materials with, or furnish them to, the SEC. The information on our website, other than these filings, is not, and should not be, considered part of this prospectus and is not incorporated by reference into this document.
As a foreign private issuer, we are exempt from the rules of the Exchange Act prescribing the furnishing and content of proxy statements to shareholders, and our executive officers, directors and principal shareholders are exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act. In addition, we will not be required under the Exchange Act to file periodic reports and financial statements with the SEC as frequently or as promptly as U.S. companies whose securities are registered under the Exchange Act.
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Exhibit 8.1
17 September 2024
|
CONCORDE INTERNATIONAL GROUP LTD 3 Ang Mo Kio Street 62 #01-49 LINK@AMK Singapore 569139 |
Matter No.865841 Doc Ref: 110270808
Direct line: (852) 2842 9530 Email: Richard.Hall@conyers.com |
Dear Sirs,
Re: CONCORDE INTERNATIONAL GROUP LTD (the “Company”)
We have acted as special British Virgin Islands legal counsel to the Company in connection with the Company’s registration statement on form F-1 (File No. 333-281799), including all amendments or supplements thereto, as filed with the U.S. Securities and Exchange Commission (the “Commission”) on 27 August 2024 (the “Registration Statement”, which term does not include any other document or agreement whether or not specifically referred to therein or attached as an exhibit or schedule thereto) relating to the registration under the U.S. Securities Act of 1933, as amended, (the “Securities Act”) of class A ordinary shares, par value US$0.00001 each (the "Class A Ordinary Shares") of the Company. The Registration Statement contains a prospectus (the “Prospectus”), to be used for the public offering by the Company of 1,250,000 Class A Ordinary Shares, together with the over-allotment option for a period of 45 days from the closing of the public offering for the underwriter(s) to purchase up to 15% additional Class A Ordinary Shares sold in the public offering (collectively, the “IPO Shares”).
| 1. | DOCUMENTS REVIEWED |
For the purposes of giving this opinion, we have examined the following document(s):
| 1.1. | a copy of the Registration Statement; |
| 1.2. | a copy of the Prospectus; and |
| 1.3. | such other documents and made such enquiries as to questions of law as we have deemed necessary in order to render the opinion set forth below. |
| 2. | ASSUMPTIONS |
We have assumed:
| 2.1. | the genuineness and authenticity of all signatures and the conformity to the originals of all copies (whether or not certified) examined by us and the authenticity and completeness of the originals from which such copies were taken; |
| 2.2. | the accuracy and completeness of all factual representations made in the Registration Statement and the Prospectus and other documents reviewed by us; |
| 2.3. | that there is no provision of the law of any jurisdiction, other than the British Virgin Islands, which would have any implication in relation to the opinions expressed herein; |
| 2.4. | the validity and binding effect under the laws of the United States of America of the Registration Statement and the Prospectus and that the Registration Statement and the Prospectus will be duly filed with and/or declared effective by the Commission; and |
| 2.5. | that the Prospectus, when published, will be in substantially the same form as that examined by us for the purpose of this opinion. |
| 3. | QUALIFICATIONS |
| 3.1. | We have made no investigation of and express no opinion in relation to the laws of any jurisdiction other than the British Virgin Islands. This opinion is to be governed by and construed in accordance with the laws of the British Virgin Islands and is limited to and is given on the basis of the current law and practice in the British Virgin Islands. This opinion is issued solely for your benefit and use in connection with the matter described herein and is not to be relied upon by any other person, firm or entity or in respect of any other matter. |
| 4. | OPINION |
| 4.1. | On the basis of and subject to the foregoing, we are of the opinion that the statements under the caption “Material United States, British Virgin Islands and Singapore income Tax Considerations - BVI Taxation” in the Prospectus, to the extent that they constitute statements of British Virgin Islands law, are true and accurate in all material respects and that such statements constitute our opinion, and nothing has been omitted from such statements which would make the same misleading in any material respects. |
We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and the references to our firm under the captions “Enforcement of Legal Liabilities” and “Legal Matters” in the Prospectus. In giving this consent, we do not hereby admit that we are experts within the meaning of Section 11 of the Securities Act or that we are within the category of persons whose consent is required under Section 7 of the Securities Act or the Rules and Regulations of the Commission promulgated thereunder.
Yours faithfully,
/s/ Conyers Dill & Pearman
Conyers Dill & Pearman
conyers.com | 2
Exhibit 8.2
Potomac Law Group, PLLC
1300 Pennsylvania Avenue, NW, Suite 700
Washington, D.C. 20004
Telephone: (202) 204-3005
Fax: (202) 789-7349
September 17, 2024
CONCORDE INTERNATIONAL GROUP LTD
3 Ang Mo Kio Street 62, #01-49 LINK@AMK
Singapore 569139
| Re: | Opinion of Potomac Law Group PLLC as to Tax Matters |
Ladies and Gentlemen:
You have requested our opinion concerning the statements in the Registration Statement (as defined below) under the caption “Material United States, British Virgin Islands and Singapore Income Tax Considerations — U.S. Federal Income Taxation Considerations” in connection with the public offering of certain Class A Ordinary Shares, par value $ 0.00001 per share (the “Class A Ordinary Shares”), of CONCORDE INTERNATIONAL GROUP LTD (the “Company”) pursuant to Form F-1 Registration Statement under the Securities Act of 1933, filed by the Company with the Securities and Exchange Commission (the “Commission”) on August 27, 2024, as amended from time to time (the “Registration Statement”).
This opinion is being furnished to you as Exhibit 8.2 to the Registration Statement.
In connection with rendering the opinion set forth below, we have examined and relied on originals or copies of the following (collectively the “Documents”)
(a) the Registration Statement; and
(b) such other documents, certificates and records as we have deemed necessary or appropriate as a basis for the opinion set forth below.
Our opinion is conditioned on the initial and continuing accuracy of the facts, information and analyses set forth in the Documents. All capitalized terms used but not otherwise defined herein shall have the respective meanings set forth in the Registration Statement.
For purposes of our opinion, we have assumed the legal capacity of all natural persons, the genuineness of all signatures, the authenticity of all Documents submitted to us as originals, the conformity to original Documents of all Documents submitted to us as certified, conformed, electronic, or photostatic copies, and the authenticity of the originals of such latter Documents. We have relied on a representation of the Company that such Documents are duly authorized, valid and enforceable. Furthermore, our opinion assumes, with your consent, that (i) the final executed version of any Document that has not been executed as of the date of this letter (including any underwriting agreement to be executed in connection with the offering of the Class A Ordinary Shares) will be, in substance, identical to the version that we have reviewed, (ii) no material term or condition set forth in any executed Document (or the executed version of any Document described in clause (i) immediately above) will be amended, waived, or otherwise modified, and (iii) any transaction contemplated by any Document shall be consummated in accordance with the terms and conditions of the Document.
In addition, we have relied on factual statements and representations of the officers and other representatives of the Company and others, and we have assumed that such statements and representations are and will continue to be correct without regard to any qualification as to knowledge or belief.
We have not independently verified, and do not assume any responsibility for, the completeness or fairness of the Registration Statement and make no representation that the actions taken in connection with the preparation and review of the Registration Statement are sufficient to cause the Registration Statement to be complete or fair.
Our opinion is based on the U.S. Internal Revenue Code of 1986, as amended, U.S. Treasury regulations, judicial decisions, published positions of the U.S. Internal Revenue Service, and such other authorities as we have considered relevant, all as in effect as of the date of this opinion and all of which are subject to differing interpretations or change at any time (possibly with retroactive effect). A change in the authorities upon which our opinion is based could affect the conclusions expressed herein. There can be no assurance, moreover, that the opinion expressed herein will be accepted by the U.S. Internal Revenue Service or, if challenged, by a court.
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Based upon and subject to the foregoing, we are of the opinion that, under current U.S. federal income tax law, although the discussion set forth in the Registration Statement under the heading “Material United States, British Virgin Islands and Singapore Income Tax Considerations — U.S. Federal Income Taxation Considerations” does not purport to summarize all possible U.S. federal income tax considerations of the ownership and disposition of the Class A Ordinary Shares to U.S. Holders (as defined therein), such discussion constitutes, in all material respects, an accurate summary of the U.S. federal income tax consequences of the ownership and disposition of the Class A Ordinary Shares that are anticipated to be material to U.S. Holders who hold the Class A Ordinary Shares pursuant to the Registration Statement, subject to the qualifications set forth in such discussion, and, to the extent that it sets forth any specific legal conclusion under U.S. federal income tax law, except as otherwise provided therein, it represents our opinion. Notwithstanding the foregoing, we do not express any opinion herein with respect to the Company’s status as a passive foreign investment company (“PFIC”) for U.S. federal income tax purposes for any taxable year, for the reasons stated in the discussion on PFICs set forth in the Registration Statement under the heading “Material United States, British Virgin Islands and Singapore Income Tax Considerations — U.S. Federal Income Taxation Considerations.”
Except as set forth above, we express no other opinion. This opinion is furnished to you in connection with the offering of the Class A Ordinary Shares. This opinion is expressed as of the date hereof, and we are under no obligation to supplement or revise our opinion to reflect any legal developments or factual matters arising subsequent to the date hereof.
We hereby consent to the filing of this opinion as an exhibit to the Registration Statement, to the use of our name in the prospectus included in the Registration Statement and to the discussion of this opinion in the prospectus included in the Registration Statement. In giving such consent, we do not thereby admit that we are within the category of persons whose consent is required under Section 7 of the Securities Exchange Act of 1933, as amended, or the rules or regulations of the Commission promulgated thereunder.
Very truly yours,
/s/ Potomac Law Group, PLLC
Potomac Law Group, PLLC
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Exhibit 10.3
EMPLOYMENT AGREEMENT
This Employment Agreement (the “Agreement”), dated as of , (the “Effective Date”), is entered into by and between CONCORDE INTERNATIONAL GROUP LTD, a British Virgin Islands business company (the “Company”) and (the “Executive”).
WHEREAS, the Company and the Executive wish to enter into an employment agreement whereby the Executive will be employed by the Company in accordance with the terms and conditions stated below;
NOW, THEREFORE, in consideration of the premises and of the mutual promises set forth herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE 1
EMPLOYMENT, DUTIES AND RESPONSIBILITIES
Section 1.01. Employment. The Executive shall serve as the of the Company. The Executive hereby accepts such employment and agrees to devote substantially all of the Executive’s time and efforts to promoting the interests of the Company.
Section 1.02. Duties and Responsibilities. Subject to the supervision of and direction by the Board of Directors of the Company (the “Board”), the Executive shall perform such duties as are similar in nature to those duties and services customarily associated with the positions set forth above.
Section 1.03. Base of Operation. The Executive’s principal base of operation for the performance of his or her duties and responsibilities under this Agreement shall be the offices of the Company in Singapore (“Residence”), and at such other places as shall from time to time be reasonably necessary to fulfill the Executive’s obligations hereunder.
ARTICLE 2
TERM
Section 2.01. Term. (a) The term of this Agreement (the “Term”) shall be 12 months. The Term and this Agreement will be renewed automatically thereafter for successive one-year terms unless a one-month notice of non-renewal is given by one party to the other.
(b) The Executive represents and warrants to the Company that neither the execution and delivery of this Agreement nor the performance of the Executive’s duties hereunder violates or will violate the provisions of any other agreement to which the Executive is a party or by which the Executive is bound.
ARTICLE 3
COMPENSATION AND EXPENSES
Section 3.01. Salary And Benefits. The Executive’s salary and benefits shall be . The Executive’s salary shall be payable in accordance with the Company’s regular payroll practices, as established from time to time.] Unless otherwise provided in such a separate agreement, the Executive’s salary and benefits are subject to annual review and adjustment by the Company.
Section 3.02 Expenses. The Company will reimburse the Executive for reasonable documented business-related expenses incurred by the Executive in connection with the performance of the Executive’s duties hereunder during the Term, subject, however, to the Company’s policies relating to business-related expenses as in effect from time to time during the Term.
Section 3.03. Equity Incentive Plan. The Executive shall be entitled to participate during the Term in any long-term compensation program as may be authorized and adopted from time to time by the Board, including any equity incentive plan the Company, subject to the terms and provisions of such plans and the execution of the award agreements between the Company and the Executive.
Section 3.04 Payer of Compensation. All compensation, salary, benefits and remuneration in this Agreement may be paid by the Company or any of its subsidiaries or affiliated entities, as decided by the Company in its sole discretion.
ARTICLE 4
EXCLUSIVITY, NON-COMPETE, ETC.
Section 4.01. Exclusivity. The Executive agrees to perform his or her duties, responsibilities and obligations hereunder efficiently and to the best of his or her ability. The Executive agrees to devote substantially all of his or her working time, care and attention and best efforts to such duties, responsibilities and obligations throughout the Term. The Executive agrees that all of his or her activities as an employee of the Company shall be in conformity with all present and future policies, rules and regulations and directions of the Company not inconsistent with this Agreement.
Section 4.02. Intellectual Property. The Executive agrees that Intellectual Property under this Agreement is the sole and exclusive property of the Company and further agrees to assign to the Company the ownership of all right, title and interest in Intellectual Property, including any Intellectual Property conceived, created, and otherwise obtained by the Executive (i) during the Term of this Agreement relating to the work he performs within the scope of such Executive’s employment with the Company, (ii) within twelve (12) months after the Executive retires or ends employment with the Company under the circumstances that such Intellectual Property relates to such Executive’s employment scope with the Company, and (iii) by using the resources of the Company during the Term of this Agreement. During the Executive’s employment with the Company and within twelve (12) months after his or her employment with the Company terminates, the Executive has the obligation to inform the Company of any Intellectual Property within ten days of its creation and the Executive has the obligation to assist the Company in its patent, copyright or trademark application related to the Intellectual Property.
“Intellectual Property” under this Section 4.02 means any and all intellectual property in any form or stage of development, including but not limited to any idea, concept, design, invention, method, process, system, model, software, know-how and any other subject matter, material or information that qualifies and/or is considered by the Company to qualify for patent, copyright, trademark, trade secret, or any other protection under the laws of British Virgin Islands or Singapore providing or creating intellectual property rights.
Section 4.03. Non-Competition, Non-Solicitation and Confidentiality.
(a) Non-Competition. During the Term and for twenty-four (24) months after his or her employment with the Company terminates for any reason, the Executive will not, directly or indirectly, be employed or self-employed in, engage in or own or hold any interest in (whether as a principal, partner, director, employee, shareholder, agent, advisor or otherwise) any business that is in direct or indirect competition, or would compete, with any businesses conducted by the Company, its subsidiaries or affiliated entities (the “Group”) upon or prior to the termination of the employment of the Executive, provided, however, it shall not be a violation of this Section 4.03(a) for the Executive to become the registered or beneficial owner of up to five percent (5%) of any class of the capital stock of a publicly traded corporation in competition with the Group, provided that the Executive does not otherwise participate in the business of such corporation.
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(b) Non-Solicitation; Non-Interference. During the Term and for twenty-four (24) months after his or her employment with the Company terminates for any reason, the Executive agrees that he or she will not, directly or indirectly, for the Executive’s benefit or for the benefit of any other person or entity, do any of the following: (i) approach the suppliers, clients, direct or end customers or contacts or other persons or entities introduced to the Executive in his or her capacity as a representative of the Group for the purpose of doing business of the same or of a similar nature to the business of the Group or doing business that will harm the business relationships of the Group with the foregoing persons or entities; (ii) solicit, encourage or assist other employees of the Group to seek employment with any business or organization in competition with the Group; or otherwise interfere with the business or accounts of the Group.
(c) Confidentiality. Throughout the course of the Executive’s employment with the Company and thereafter, the Executive shall keep in strict confidence all non-public information relating to the business, financial condition and other aspects of the Company, including but not limited to trade secrets, business methods, products, processes, procedures, development or experimental projects, plans, service providers, customers and users, intellectual property, information technology and any other information which is material to the Company’s business operations, and without the prior express written approval of the Company, may not disclose or provide to any person, firm, corporation or entity such non-public information, and may not use such non-public information for any purpose other than to fulfill his or her responsibilities as the in the best interest of the Company. The Executive shall also comply with the Company’s corporate policies and any other agreements on confidentiality that the Executive may enter into with the Company or any of its subsidiaries or affiliated entities. In the event that the Executive is required by law to disclose any confidential information of the Company, the Executive agrees to give the Company prompt advance written notice thereof and to provide the Company with reasonable assistance in obtaining an order to protect such confidential information from public disclosure. This provision and such other confidentiality policies and agreements are hereinafter collectively referred to as the “Confidentiality Terms.”
ARTICLE 5
TERMINATION AND INDEMNIFICATION
Section 5.01. Termination by Company. Unless otherwise provided in this Agreement, the Company shall have the right to terminate the Executive’s employment at any time with or without “Cause” by giving a one-month advance notice in writing pursuant to the terms hereof. For purposes of this Agreement, “Cause” shall mean: (i) the Executive’s willful and continued failure to substantially perform his or her duties hereunder (other than as a result of total or partial incapacity due to physical or mental illness), (ii) dishonesty in the performance of the Executive’s duties hereunder, (iii) an act or acts on the Executive’s part constituting a felony under the laws of the Residence or of the United States or any state thereof, (iv) any other act or omission which is materially injurious to the financial condition or business reputation of the Company or any of its subsidiaries or affiliates, or (v) the Executive’s breach of Section 4.03 hereof. For purposes of this Section, no act or failure to act, on the part of the Executive shall be deemed “willful” unless done, or omitted to be done, by the Executive not in good faith and without reasonable belief that the act or omission of the Executive was in the best interest of the Company.
Section 5.02. Termination by Executive. Unless otherwise provided in this Agreement, the Executive shall have the right to terminate this Agreement at any time by giving a one-month advance notice in writing pursuant to the terms hereof.
Section 5.03. Death. In the event the Executive passes away during the Term, this Agreement shall automatically terminate, such termination to be effective on the date of the Executive’s death.
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Section 5.04. Disability. In the event that the Executive shall suffer any physical or mental impairment which, as reasonably determined by the Board, renders the Executive unable to perform the essential functions of his or her position at the Company, even with reasonable accommodation that does not impose an undue burden on the Company, for more than 180 days in any 12-month period, unless a longer period is required by applicable law, in which case that longer period shall apply, the Company shall have the right to terminate this Agreement, such termination to be effective upon the giving of notice thereof to the Executive in accordance with Section 6.02 hereof.
Section 5.05. Effect of Termination. Unless otherwise provided in this Agreement, (a) in the event of termination of the Executive’s employment, whether before or after the Term, by either party for any reason, or by reason of the Executive’s death or disability, the Company shall pay to the Executive (or his or her beneficiary in the event of his or her death) any base salary or other compensation earned but not paid to the Executive prior to the effective date of such termination. All other benefits due the Executive following his or her termination of employment shall be determined in accordance with the plans, policies and practices of the Company.
(b) in the event of termination of the Executive’s employment by the Company other than for Cause, the Company shall pay to the Executive any additional amount as provided by applicable law.
ARTICLE 6
MISCELLANEOUS
Section 6.01. Benefit Assignment; Assignment; Beneficiary. The Executive agrees that he or she will not transfer, sell, assign or otherwise dispose of (whether voluntarily, involuntarily or by operation of law) any rights or interests under this Agreement, and the rights of the Executive shall not be subject to any security interest or creditors’ claims. Any such transfer, assign or other disposal shall be invalid. Nothing contained in this Agreement shall prevent the Company from merging into or with any other company or selling all or substantially all of the assets of the Company, or transfer this Agreement or any obligation under this Agreement. In the event of any change in the ownership interest or the control of the Company, the provisions of this Agreement shall continue to apply and shall be binding upon any successors. Notwithstanding and subject to the foregoing, this Agreement shall also inure to the benefit of, and be enforceable by, the Executive and his or her personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If the Executive should die while any amount would still be payable to him or her hereunder if the Executive had continued to live, all such amounts shall be paid in accordance with the terms of this Agreement to the Executive’s beneficiary, devisee, legatee or other designee, or if there is no such designee, to the Executive’s estate.
Section 6.02. Notices. Any notice required or permitted hereunder shall be in writing and shall be sufficiently given if personally delivered or if sent by registered or certified mail, national overnight courier, or email. In the case of the Company, to the office or email account of the human resource department; and in the case of the Executive, to the address or email account appearing on the employment records of the Company, from time to time. Any notice given hereunder shall be deemed to have been given at the time of receipt thereof by the person to whom such notice is given.
Section 6.03. Entire Agreement; Amendment. This Agreement contains the entire agreement of the parties hereto with respect to the terms and conditions of the Executive’s employment during the Term and supersedes any and all prior agreements and understandings, whether written or oral, between the parties hereto with respect to compensation due for services rendered hereunder. This Agreement may not be amended or revised unless by a written instrument executed by both of the parties hereto.
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Section 6.04. Waiver. The waiver by either party of a breach of any provision of this Agreement shall not operate or be construed as a continuing waiver or as a consent to or waiver of any subsequent breach hereof. Any failure or delay to assert any right, remedy or power shall not be construed as a waiver of such right, remedy or power. All rights and remedies existing under this Agreement are cumulative to, and not exclusive of, any rights or remedies otherwise available.
Section 6.05. Headings. The article and section headings herein are for convenience of reference only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof.
Section 6.06. Agreement To Take Actions. Each party hereto shall execute and deliver such documents, certificates, agreements and other instruments, and shall take such other actions, as may be reasonably necessary or desirable in order to perform his, her or its obligations under this Agreement or to effectuate the purposes hereof.
Section 6.07. Governing Law. This Agreement shall be governed and construed in accordance with the laws of Singapore.
Section 6.08. Submission to Jurisdiction. The parties hereto agree to submit to the exclusive jurisdiction of the courts of Singapore in the event of any dispute, claim or matter arising from this Agreement..
Section 6.09. Survivorship. The respective rights and obligations of the parties hereunder shall survive any termination of this Agreement to the extent necessary to the intended preservation of such rights and obligations.
Section 6.10. Severability. The invalidity or unenforceability of any provision or provisions of this Agreement shall not affect the validity or enforceability of any other provision or provisions of this Agreement, which shall remain in full force and effect.
Section 6.11. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.
Section 6.12. Withholding. All payments to the Executive hereunder shall be subject to withholding to the extent required by applicable law.
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IN WITNESS WHEREOF, each of the parties hereto has duly executed this Agreement as of the date first above written.
| CONCORDE INTERNATIONAL GROUP LTD | |||
| By: | |||
| Name: | |||
| Title: | |||
| EXECUTIVE | ||
| Name: | ||
| Title: | ||
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Exhibit 21.1
LIST OF SUBSIDIARIES
Name of Subsidiary | Jurisdiction of Organization | Percentage
of Ownership | ||||
| Concorde International Group Pte Ltd | Singapore | 100 | % | |||
| Concorde Security Pte Ltd | Singapore | 96.81 | % | |||
| Concorde i-FAST USA Inc. | Texas, United States | 100 | % | |||
| Concorde Security Sdn Bhd | Malaysia | 100 | % | |||
| Concorde Security Limited | United Kingdom | 100 | % | |||
| Concorde Asia Pte Ltd | Singapore | 70 | % | |||
| Berjaya Academy Pte Ltd | Singapore | 70 | % | |||
Exhibit 23.1
Consent of Independent Registered Public Accounting Firm
We hereby consent to the inclusion in this Registration Statement of Concorde International Group Ltd. (the “Company”) on Form F-1/A, to be filed on or about September 17, 2024, of our report dated June 26, 2024, with respect to our audits of the Company’s consolidated financial statements as of December 31, 2023, and 2022 and for the years then ended.
We also consent to the reference to us under the caption “Experts” in such Registration Statement.
/s/ Kreit & Chiu CPA LLP
Kreit & Chiu CPA LLP (PCAOB ID 6651)
New York, New York
September 17, 2024
Exhibit 99.5
CONCORDE INTERNATIONAL GROUP LTD
CLAWBACK POLICY
| A. | OVERVIEW |
In accordance with the applicable rules of The Nasdaq Stock Market LLC Rules (the “Nasdaq Rules”), Section 10D and Rule 10D-1 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (“Rule 10D-1”), the Board of Directors (the “Board”) of CONCORDE INTERNATIONAL GROUP LTD, a British Virgin Islands business company (the “Company”) has adopted this Policy (the “Policy”) to provide for the recovery of erroneously awarded Incentive-based Compensation from Executive Officers, effective upon the Company’s listing on Nasdaq Capital Market. All capitalized terms used and not otherwise defined herein shall have the meanings set forth in Section H, below.
| B. | RECOVERY OF ERRONEOUSLY AWARDED COMPENSATION |
(1) In the event of an Accounting Restatement, the Company will reasonably promptly recover the Erroneously Awarded Compensation Received in accordance with Nasdaq Rules and Rule 10D-1 as follows:
| (i) | After an Accounting Restatement, the Compensation Committee of the Board (the “Committee”) shall determine the amount of any Erroneously Awarded Compensation Received by each Executive Officer and shall promptly notify each Executive Officer with a written notice containing the amount of any Erroneously Awarded Compensation and a demand for repayment or return of such compensation, as applicable. |
| (a) | For Incentive-based Compensation based on (or derived from) the Company’s stock price or total shareholder return, where the amount of Erroneously Awarded Compensation is not subject to mathematical recalculation directly from the information in the applicable Accounting Restatement: |
| i. | The amount to be repaid or returned shall be determined by the Committee based on a reasonable estimate of the effect of the Accounting Restatement on the Company’s stock price or total shareholder return upon which the Incentive-based Compensation was Received; and |
| ii. | The Company shall maintain documentation of the determination of such reasonable estimate and provide the relevant documentation as required to Nasdaq. |
| (ii) | The Committee shall have discretion to determine the appropriate means of recovering Erroneously Awarded Compensation based on the particular facts and circumstances. Notwithstanding the foregoing, except as set forth in Section B(2) below, in no event may the Company accept an amount that is less than the amount of Erroneously Awarded Compensation in satisfaction of an Executive Officer’s obligations hereunder. |
| (iii) | To the extent that the Executive Officer has already reimbursed the Company for any Erroneously Awarded Compensation Received under any duplicative recovery obligations established by the Company or applicable law, it shall be appropriate for any such reimbursed amount to be credited to the amount of Erroneously Awarded Compensation that is subject to recovery under this Policy. |
| (iv) | To the extent that an Executive Officer fails to repay all Erroneously Awarded Compensation to the Company when due, the Company shall take all actions reasonable and appropriate to recover such Erroneously Awarded Compensation from the applicable Executive Officer. The applicable Executive Officer shall be required to reimburse the Company for any and all expenses reasonably incurred (including legal fees) by the Company in recovering such Erroneously Awarded Compensation in accordance with the immediately preceding sentence. |
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(2) Notwithstanding anything herein to the contrary, the Company shall not be required to take the actions contemplated by Section B(1) above if the Committee determines that recovery would be impracticable and any of the following two conditions are met:
| (i) | The Committee has determined that the direct expenses paid to a third party to assist in enforcing the Policy would exceed the amount to be recovered. Before making this determination, the Company must make a reasonable attempt to recover the Erroneously Awarded Compensation, document such attempt(s) and provide such documentation to Nasdaq; |
| (ii) | Recovery would violate home country law where that law was adopted prior to November 28, 2022, provided that, before determining that it would be impracticable to recover any amount of Erroneously Awarded Compensation based on violation of home country law, the Company has obtained an opinion of home country counsel, acceptable to Nasdaq, that recovery would result in such a violation and a copy of the opinion is provided to Nasdaq; and |
| (iii) | Recovery would likely cause an otherwise tax-qualified retirement plan, under which benefits are broadly available to employees of the Company, to fail to meet the requirements of Section 401(a)(13) or Section 411(a) of the Internal Revenue Code of 1986, as amended, and regulations thereunder. |
| C. | DISCLOSURE REQUIREMENTS |
The Company shall file all disclosures with respect to this Policy required by applicable U.S. Securities and Exchange Commission (“SEC”) filings and rules.
| D. | PROHIBITION OF INDEMNIFICATION |
The Company shall not be permitted to insure or indemnify any Executive Officer against (i) the loss of any Erroneously Awarded Compensation that is repaid, returned or recovered pursuant to the terms of this Policy, or (ii) any claims relating to the Company’s enforcement of its rights under this Policy. Further, the Company shall not enter into any agreement that exempts any Incentive-based Compensation that is granted, paid or awarded to an Executive Officer from the application of this Policy or that waives the Company’s right to recovery of any Erroneously Awarded Compensation, and this Policy shall supersede any such agreement (whether entered into before, on or after the Effective Date of this Policy). It is hereby acknowledged that Rule 10D-1(b)(1)(v) and Nasdaq Rule 5608 provide that the Company is prohibited from indemnifying any executive officer or former executive officer against the loss of erroneously awarded compensation. It is therefore acknowledged that such indemnification is prohibited by applicable law for all purposes, including any and all such agreements.
| E. | ADMINISTRATION AND INTERPRETATION |
This Policy shall be administered by the Committee, and any determinations made by the Committee shall be final and binding on all affected individuals.
The Committee is authorized to interpret and construe this Policy and to make all determinations necessary, appropriate, or advisable for the administration of this Policy and for the Company’s compliance with Nasdaq Rules, Section 10D, Rule 10D-1 and any other applicable law, regulation, rule or interpretation of the SEC or Nasdaq promulgated or issued in connection therewith.
| F. | AMENDMENT; TERMINATION |
The Committee may amend this Policy from time to time in its discretion and shall amend this Policy as it deems necessary. Notwithstanding anything in this Section F to the contrary, no amendment or termination of this Policy shall be effective if such amendment or termination would (after taking into account any actions taken by the Company contemporaneously with such amendment or termination) cause the Company to violate any federal securities laws, SEC rule or Nasdaq rule.
| G. | OTHER RECOVERY RIGHTS |
This Policy shall be binding and enforceable against all Executive Officers and, to the extent required by applicable law or guidance from the SEC or Nasdaq, their beneficiaries, heirs, executors, administrators or other legal representatives. The Committee intends that this Policy will be applied to the fullest extent required by applicable law. Any employment agreement, equity award agreement, compensatory plan or any other agreement or arrangement with an Executive Officer shall be deemed to include, as a condition to the grant of any benefit thereunder, an agreement by the Executive Officer to abide by the terms of this Policy. Any right of recovery under this Policy is in addition to, and not in lieu of, any other remedies or rights of recovery that may be available to the Company under applicable law, regulation or rule or pursuant to the terms of any policy of the Company or any provision in any employment agreement, equity award agreement, compensatory plan, agreement or other arrangement.
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| H. | DEFINITIONS |
For purposes of this Policy, the following capitalized terms shall have the meanings set forth below.
(1) “Accounting Restatement” means an accounting restatement due to the material noncompliance of the Company with any financial reporting requirement under the securities laws, including any required accounting restatement to correct an error in previously issued financial statements that is material to the previously issued financial statements (a “Big R” restatement), or that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period (a “little r” restatement).
(2) “Clawback Eligible Incentive Compensation” means all Incentive-based Compensation Received by an Executive Officer (i) on or after the effective date of the applicable Nasdaq rules, (ii) after beginning service as an Executive Officer, (iii) who served as an Executive Officer at any time during the applicable performance period relating to any Incentive-based Compensation (whether or not such Executive Officer is serving at the time the Erroneously Awarded Compensation is required to be repaid to the Company),
(iv) while the Company has a class of securities listed on a national securities exchange or a national securities association, and (v) during the applicable Clawback Period (as defined below).
(3) “Clawback Period” means, with respect to any Accounting Restatement, the three completed fiscal years of the Company immediately preceding the Restatement Date (as defined below), and if the Company changes its fiscal year, any transition period of less than nine months within or immediately following those three completed fiscal years.
(4) “Erroneously Awarded Compensation” means, with respect to each Executive Officer in connection with an Accounting Restatement, the amount of Clawback Eligible Incentive Compensation that exceeds the amount of Incentive-based Compensation that otherwise would have been Received had it been determined based on the restated amounts, computed without regard to any taxes paid.
(5) “Executive Officer” means each individual who is currently or was previously designated as an “officer” of the Company as defined in Rule 16a-1(f) under the Exchange Act. For the avoidance of doubt, the identification of an executive officer for purposes of this Policy shall include each executive officer who is or was identified pursuant to Item 401(b) of Regulation S-K or Item 6.A of Form 20-F, as applicable, as well as the principal financial officer and principal accounting officer (or, if there is no principal accounting officer, the controller).
(6) “Financial Reporting Measures” means measures that are determined and presented in accordance with the accounting principles used in preparing the Company’s financial statements, and all other measures that are derived wholly or in part from such measures. Stock price and total shareholder return (and any measures that are derived wholly or in part from stock price or total shareholder return) shall, for purposes of this Policy, be considered Financial Reporting Measures. For the avoidance of doubt, a Financial Reporting Measure need not be presented in the Company’s financial statements or included in a filing with the SEC.
(7) “Incentive-based Compensation” means any compensation that is granted, earned or vested based wholly or in part upon the attainment of a Financial Reporting Measure.
(8) “Nasdaq” means The Nasdaq Stock Market LLC.
(9) “Received” means, with respect to any Incentive-based Compensation, actual or deemed receipt, and Incentive-based Compensation shall be deemed received in the Company’s fiscal period during which the Financial Reporting Measure specified in the Incentive-based Compensation award is attained, even if the payment or grant of the Incentive-based Compensation to the Executive Officer occurs after the end of that period.
(10) “Restatement Date” means the earlier to occur of (i) the date the Board, a committee of the Board or the officers of the Company authorized to take such action if Board action is not required, concludes, or reasonably should have concluded, that the Company is required to prepare an Accounting Restatement, or (ii) the date a court, regulator or other legally authorized body directs the Company to prepare an Accounting Restatement.
Adopted by the Board of Directors on September 16, 2024
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