Concorde International Group Ltd F-1, filed Aug 27, 2024
Concorde International Group Ltd. (CIGL)
As filed with the U.S. Securities and Exchange Commission on August 27, 2024.
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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 AUGUST 27, 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 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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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 $4.20 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 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 $2.5 million, for the purchase and rollout of electric vehicular mobile command centers; |
| ● | approximately 20%, or $1.0 million, for research and development activities, regional market development and exploration of new markets, product development; and |
| ● | approximately 30%, or $1.5 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 $1,250,000, 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 and (ii) our estimated other offering expenses of $225,000 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 $4.20 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 | $ | 4.20 |
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 $4.23 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 $1.05 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; Chair of Audit Committee | ||
| Sim Peng Thia(1)(2)(3)(4) | 50 | Independent Director; Chair of Compensation Committee | ||
| Mark Allen Brisson(1)(2)(3)(4) | 57 | Independent Director; Chairman; 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 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 and officers and all of our outstanding shareholders 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 relating to the ownership and disposition of 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 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 relating to 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 2020 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 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 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 of a PFIC.
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’s Class A Ordinary Shares. To the extent the distribution exceeds the adjusted tax basis of the U.S. Holder’s 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 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.
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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.
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 and officers and all of our outstanding shareholders 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 Lions Chambers LLC.
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. |
II-1
| (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. |
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 |
| * | To be filed by amendment |
| (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.
II-2
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 August 27, 2024.
| CONCORDE INTERNATIONAL GROUP LTD | ||
| By: | /s/ Swee Kheng Chua | |
| Name: | Swee Kheng Chua | |
| Title: | Chief Executive Officer and Chairman | |
POWER OF ATTORNEY
The undersigned directors and officers of Concorde International Group Ltd hereby constitute and appoint Swee Kheng Chua with full power to act without the other and with full power of substitution and resubstitution, our true and lawful attorneys-in-fact with full power to execute in our name and behalf in the capacities indicated below this registration statement on Form F-1 and any and all amendments thereto, including pre-effective and post-effective amendments to this registration statement and to sign any and all additional registration statements relating to the same offering of securities as this registration statement that are filed pursuant to the Securities Act of 1933, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission and thereby ratify and confirm that all such attorneys-in-fact, or any of them, or their substitutes shall lawfully do or cause to be done by virtue hereof.
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 | August 27, 2024 | ||
| Swee Kheng Chua | ||||
| /s/ Sze Yin Ong | Chief Financial Officer | August 27, 2024 | ||
| Sze Yin Ong | ||||
| /s/ Terence Wing Khai Yap | Director | August 27, 2024 | ||
| Terence Wing Khai Yap |
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 August 27, 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 3.1
BVI COMPANY NUMBER: 2123195
TERRITORY OF THE BRITISH VIRGIN ISLANDS
THE BVI BUSINESS COMPANIES
ACT, 2004
MEMORANDUM AND ARTICLES
OF ASSOCIATION
OF
CONCORDE INTERNATIONAL GROUP LTD
A COMPANY LIMITED BY SHARES
Incorporated on the 2nd day of May, 2023
INCORPORATED IN THE BRITISH VIRGIN ISLANDS
|
TERRITORY OF THE BRITISH VIRGIN ISLANDS THE BVI BUSINESS COMPANIES ACT, 2004
MEMORANDUM OF ASSOCIATION
OF | ||
| CONCORDE INTERNATIONAL GROUP LTD | ||
|
A COMPANY LIMITED BY SHARES |
| 1. | DEFINITIONS AND INTERPRETATION | |
| 1.1. | In this Memorandum of Association and the Articles of Association of the Company, if not inconsistent with the subject or context: | |
| “Act” means the BVI Business Companies Act, 2004 (No. 16 of 2004) and includes the regulations made under the Act; | ||
| “Articles” means the Articles of Association of the Company; | ||
| “Chairman of the Board” has the meaning specified in Regulation 12; | ||
| “Distribution” in relation to a distribution by the Company to a Shareholder means the direct or indirect transfer of an asset, other than Shares, to or for the benefit of the Shareholder, or the incurring of a debt to or for the benefit of a Shareholder, in relation to Shares held by a Shareholder, and whether by means of the purchase of an asset, the purchase, redemption or other acquisition of Shares, a transfer of indebtedness or otherwise, and includes a dividend; | ||
| “Memorandum” means this Memorandum of Association of the Company; | ||
| “Person” includes individuals, corporations, trusts, the estates of deceased individuals, partnerships and unincorporated associations of persons; | ||
| “Registrar” means the Registrar of Corporate Affairs appointed under section 229 of the Act; | ||
| “Resolution of Directors” means either: | ||
| (a) | a resolution approved at a duly convened and constituted meeting of directors of the Company by the affirmative vote of a majority of the directors present at the meeting who voted except that where a director is given more than one vote, he shall be counted by the number of votes he casts for the purpose of establishing a majority; or | |
| (b) | a resolution consented to in writing or by telex, telegram, cable or other written electronic communication by a majority of the directors of the Company. A written resolution consented to in such manner may consist of several documents including written electronic communication, in like form each signed or assented to by one or more directors. | |
-1-
“Resolution of Shareholders” means either:
| (a) | a resolution approved at a duly convened and constituted meeting of the Shareholders of the Company by the affirmative vote of a majority of in excess of 50 percent of the votes of the Shares entitled to vote thereon which were present at the meeting and were voted; or |
| (b) | a resolution consented to in writing by a majority of in excess of 50 percent of the votes of Shares entitled to vote thereon; |
“Seal” means any seal which has been duly adopted as the common seal of the Company;
“Securities” means Shares and debt obligations of every kind of the Company, and including without limitation options, warrants and rights to acquire Shares or debt obligations;
“Share” means a share issued or to be issued by the Company;
“Shareholder” means a Person whose name is entered in the register of members as the holder of one or more Shares or fractional Shares;
“Treasury Share” means a Share that was previously issued but was repurchased, redeemed or otherwise acquired by the Company and not cancelled; and
“Written” or any term of like import includes information generated, sent, received or stored by electronic, electrical, digital, magnetic, optical, electromagnetic, biometric or photonic means, including electronic data interchange, electronic mail, telegram, telex or telecopy, and “in writing” shall be construed accordingly.
| 1.2. | In the Memorandum and the Articles, unless the context otherwise requires a reference to: |
| (a) | a “Regulation” is a reference to a regulation of the Articles; |
| (b) | a “Clause” is a reference to a clause of the Memorandum; |
| (c) | voting by Shareholders is a reference to the casting of the votes attached to the Shares held by the Shareholder voting; |
| (d) | the Act, the Memorandum or the Articles is a reference to the Act or those documents as amended or, in the case of the Act, any re-enactment thereof and any subsidiary legislation made thereunder; and |
| (e) | the singular includes the plural and vice versa. |
| 1.3. | Any words or expressions defined in the Act unless the context otherwise requires bear the same meaning in the Memorandum and the Articles unless otherwise defined herein. |
| 1.4. | Headings are inserted for convenience only and shall be disregarded in interpreting the Memorandum and the Articles. |
| 2. | NAME |
The name of the Company is CONCORDE INTERNATIONAL GROUP LTD.
| 3. | STATUS |
The Company is a company limited by Shares.
-2-
| 4. | REGISTERED OFFICE AND REGISTERED AGENT |
| 4.1. | The first registered office of the Company is at Vistra Corporate Services Centre, Wickhams Cay II, Road Town, Tortola, VG1110, British Virgin Islands, the office of the first registered agent. |
| 4.2. | The first registered agent of the Company is Vistra (BVI) Limited of Vistra Corporate Services Centre, Wickhams Cay II, Road Town, Tortola, VG1110, British Virgin Islands. |
| 4.3. | The Company may by Resolution of Shareholders or by Resolution of Directors change the location of its registered office or change its registered agent. |
| 4.4. | Any change of registered office or registered agent will take effect on the registration by the Registrar of a notice of the change filed by the existing registered agent or a legal practitioner in the British Virgin Islands acting on behalf of the Company. |
| 4.5. | The registered agent shall: |
| (a) | act on the instructions of the directors of the Company if those instructions are contained in a Resolution of Directors and a copy of the Resolution of Directors is made available to the registered agent; and |
| (b) | recognise and accept the appointment or removal of a director or directors by Shareholders. |
| 5. | CAPACITY AND POWERS |
| 5.1. | Subject to the Act and any other British Virgin Islands legislation, the Company has, irrespective of corporate benefit: |
| (a) | full capacity to carry on or undertake any business or activity, do any act or enter into any transaction; and |
| (b) | for the purposes of paragraph (a), full rights, powers and privileges. |
| 5.2. | For the purposes of section 9(4) of the Act, there are no limitations on the business that the Company may carry on. |
| 6. | NUMBER AND CLASSES OF SHARES |
| 6.1. | Shares in the company shall be issued in the currency of the United States of America. |
| 6.2. | The Company is authorised to issue a maximum of 50,000 Shares of a single class each with a par value of US$1.00. |
| 6.3. | The Company may issue fractional Shares and a fractional Share shall have the corresponding fractional rights, obligations and liabilities of a whole Share of the same class or series of Shares. |
| 6.4. | Shares may be issued in one or more series of Shares as the directors may by Resolution of Directors determine from time to time. |
| 7. | RIGHTS OF SHARES |
| 7.1. | Each Share confers upon the Shareholder: |
| (a) | the right to one vote at a meeting of the Shareholders or on any Resolution of Shareholders; |
| (b) | the right to an equal share in any dividend paid by the Company; and |
| (c) | the right to an equal share in the distribution of the surplus assets of the Company on its liquidation. |
-3-
| 7.2. | The Company may by Resolution of Directors redeem, purchase or otherwise acquire all or any of the Shares subject to Regulation 3 of the Articles. |
| 8. | VARIATION OF RIGHTS |
If at any time the Shares are divided into different classes, the rights attached to any class may only be varied, whether or not the Company is in liquidation, with the consent in writing of or by a resolution passed at a meeting by the holders of not less than 50 percent of the issued Shares in that class.
| 9. | RIGHTS NOT VARIED BY THE ISSUE OF SHARES PARI PASSU |
The rights conferred upon the holders of the Shares of any class shall not, unless otherwise expressly provided by the terms of issue of the Shares of that class, be deemed to be varied by the creation or issue of further Shares ranking pari passu therewith.
| 10. | REGISTERED SHARES |
| 10.1. | The Company shall issue registered Shares only. |
| 10.2. | The Company is not authorized to issue bearer Shares, convert registered Shares to bearer Shares or exchange registered Shares for bearer Shares. |
| 11. | TRANSFER OF SHARES |
| 11.1. | The Company shall, on receipt of an instrument of transfer complying with Sub-Regulation 6.1 of the Articles, enter the name of the transferee of a Share in the register of members unless the directors resolve to refuse or delay the registration of the transfer for reasons that shall be specified in a Resolution of Directors. |
| 11.2. | The directors may not resolve to refuse or delay the transfer of a Share unless the Shareholder has failed to pay an amount due in respect of the Share. |
| 12. | AMENDMENT OF THE MEMORANDUM AND THE ARTICLES |
| 12.1. | Subject to Clause 8, the Company may amend the Memorandum or the Articles by Resolution of Shareholders or by Resolution of Directors, save that no amendment may be made by Resolution of Directors: |
| (a) | to restrict the rights or powers of the Shareholders to amend the Memorandum or the Articles; |
| (b) | to change the percentage of Shareholders required to pass a Resolution of Shareholders to amend the Memorandum or the Articles; |
| (c) | in circumstances where the Memorandum or the Articles cannot be amended by the Shareholders; or |
| (d) | to Clauses 7, 8, 9 or this Clause 12. |
| 12.2. | Any amendment of the Memorandum or the Articles will take effect on the registration by the Registrar of a notice of amendment, or restated Memorandum and Articles, filed by the registered agent. |
-4-
We, Vistra (BVI) Limited of Vistra Corporate Services Centre, Wickhams Cay II, Road Town, Tortola, VG1110, British Virgin Islands for the purpose of incorporating a BVI Business Company under the laws of the British Virgin Islands hereby sign this Memorandum of Association the 2nd day of May, 2023.
| Incorporator | |
| /s/ (Sd.) Rexella D. Hodge | |
|
(Sd.) Rexella D. Hodge Authorised Signatory |
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TERRITORY OF THE BRITISH VIRGIN ISLANDS
THE BVI BUSINESS COMPANIES
ACT, 2004
ARTICLES OF ASSOCIATION
OF
CONCORDE INTERNATIONAL GROUP LTD
A COMPANY LIMITED BY SHARES
| 1. | REGISTERED SHARES |
| 1.1. | Every Shareholder is entitled, on request to a certificate signed by a director or officer of the Company, or any other person authorised by Resolution of Directors, or under the Seal specifying the number of Shares held by him and the signature of the director, officer or authorised person and the Seal may be facsimiles. |
| 1.2. | Any Shareholder receiving a certificate shall indemnify and hold the Company and its directors and officers harmless from any loss or liability which it or they may incur by reason of any wrongful or fraudulent use or representation made by any person by virtue of the possession thereof. If a certificate for Shares is worn out or lost it may be renewed on production of the worn out certificate or on satisfactory proof of its loss together with such indemnity as may be required by Resolution of Directors. |
| 1.3. | If several Persons are registered as joint holders of any Shares, any one of such Persons may give an effectual receipt for any Distribution. |
| 2. | SHARES |
| 2.1. | Shares and other Securities may be issued at such times, to such Persons, for such consideration and on such terms as the directors may by Resolution of Directors determine. |
| 2.2. | Section 46 of the Act (Pre-emptive rights) does not apply to the Company. |
| 2.3. | A Share may be issued for consideration in any form or a combination of forms, including money, a promissory note, or other written obligation to contribute money or property, real property, personal property (including goodwill and know-how), services rendered or a contract for future services. |
| 2.4. | The consideration for a Share with par value shall not be less than the par value of the Share. If a Share with par value is issued for consideration less than the par value, the person to whom the Share is issued is liable to pay to the Company an amount equal to the difference between the issue price and the par value. |
| 2.5. | A bonus share issued by the Company shall be deemed to have been fully paid for on issue. |
| 2.6. | No Shares may be issued for a consideration, which is in whole or in part, other than money, unless a Resolution of Directors has been passed stating: |
| (a) | the amount to be credited for the issue of the Shares; and |
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| (b) | that, in the opinion of the directors, the present cash value of the non-money consideration and money consideration, if any, is not less than the amount to be credited for the issue of the Shares. |
| 2.7. | The consideration paid for any Share, whether a par value Share or a no par value Share, shall not be treated as a liability or debt of the Company for the purposes of: |
| (a) | the solvency test in Regulations 3 and 18; and |
| (b) | sections 197 and 209 of the Act. |
| 2.8. | The Company shall keep a register (the “register of members”) containing: |
| (a) | the names and addresses of the Persons who hold Shares; |
| (b) | the number of each class and series of Shares held by each Shareholder, including the nature of the associated rights unless such rights are contained in the Memorandum or these Articles; |
| (c) | the date on which the name of each Shareholder was entered in the register of members; and |
| (d) | the date on which any Person ceased to be a Shareholder. |
| 2.9. | The register of members may be in any such form as the directors may approve, but if it is in magnetic, electronic or other data storage form, the Company must be able to produce legible evidence of its contents. Until the directors otherwise determine, the magnetic, electronic or other data storage form shall be the original register of members. |
| 2.10. | A Share is deemed to be issued when the name of the Shareholder is entered in the register of members. |
| 3. | REDEMPTION OF SHARES AND TREASURY SHARES |
| 3.1. | The Company may purchase, redeem or otherwise acquire and hold its own Shares in such manner and upon such other terms as the directors may agree with the relevant Shareholder(s) save that the Company may not purchase, redeem or otherwise acquire its own Shares without the consent of Shareholders whose Shares are to be purchased, redeemed or otherwise acquired unless the Company is permitted by the Act or any other provision in the Memorandum or Articles to purchase, redeem or otherwise acquire the Shares without their consent. |
| 3.2. | The Company may acquire its own fully paid Share or Shares for no consideration by way of surrender of the Share or Shares to the Company by the Shareholder holding the Share or Shares. Any surrender of a Share or Shares under this Sub-Regulation 3.2 shall be in writing and signed by the Shareholder holding the Share or Shares. |
| 3.3. | The Company may only offer to purchase, redeem or otherwise acquire Shares if the Resolution of Directors authorising the purchase, redemption or other acquisition contains a statement that the directors are satisfied, on reasonable grounds, that immediately after the acquisition the value of the Company’s assets will exceed its liabilities and the Company will be able to pay its debts as they fall due. |
| 3.4. | Sections 60 (Process for acquisition of own Shares), 61 (Offer to one or more shareholders) and 62 (Shares redeemed otherwise than at the option of company) of the Act shall not apply to the Company. |
| 3.5. | Shares that the Company purchases, redeems or otherwise acquires pursuant to this Regulation may be cancelled or held as Treasury Shares except to the extent that such Shares are in excess of 50 percent of the issued Shares in which case they shall be cancelled but they shall be available for reissue. |
| 3.6. | All rights and obligations attaching to a Treasury Share are suspended and shall not be exercised by the Company while it holds the Share as a Treasury Share. |
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| 3.7. | Treasury Shares may be transferred by the Company on such terms and conditions (not otherwise inconsistent with the Memorandum and the Articles) as the Company may by Resolution of Directors determine. |
| 3.8. | Where Shares are held by another body corporate of which the Company holds, directly or indirectly, Shares having more than 50 percent of the votes in the election of directors of the other body corporate, all rights and obligations attaching to the Shares held by the other body corporate are suspended and shall not be exercised by the other body corporate. |
| 4. | MORTGAGES AND CHARGES OF SHARES |
| 4.1. | Shareholders may mortgage or charge their Shares. |
| 4.2. | There shall be entered in the register of members at the written request of the Shareholder: |
| (a) | a statement that the Shares held by him are mortgaged or charged; |
| (b) | the name of the mortgagee or chargee; and |
| (c) | the date on which the particulars specified in subparagraphs (a) and (b) are entered in the register of members. |
| 4.3. | Where particulars of a mortgage or charge are entered in the register of members, such particulars may be cancelled: |
| (a) | with the written consent of the named mortgagee or chargee or anyone authorised to act on his behalf; or |
| (b) | upon evidence satisfactory to the directors of the discharge of the liability secured by the mortgage or charge and the issue of such indemnities as the directors shall consider necessary or desirable. |
| 4.4. | Whilst particulars of a mortgage or charge over Shares are entered in the register of members pursuant to this Regulation: |
| (a) | no transfer of any Share the subject of those particulars shall be effected; |
| (b) | the Company may not purchase, redeem or otherwise acquire any such Share; and |
| (c) | no replacement certificate shall be issued in respect of such Shares, |
without the written consent of the named mortgagee or chargee.
| 5. | FORFEITURE |
| 5.1. | Shares that are not fully paid on issue are subject to the forfeiture provisions set forth in this Regulation. |
| 5.2. | A written notice of call specifying the date for payment to be made shall be served on the Shareholder who defaults in making payment in respect of the Shares. |
| 5.3. | The written notice of call referred to in Sub-Regulation 5.2 shall name a further date not earlier than the expiration of 14 days from the date of service of the notice on or before which the payment required by the notice is to be made and shall contain a statement that in the event of non-payment at or before the time named in the notice the Shares, or any of them, in respect of which payment is not made will be liable to be forfeited. |
| 5.4. | Where a written notice of call has been issued pursuant to Sub-Regulation 5.3 and the requirements of the notice have not been complied with, the directors may, at any time before tender of payment, forfeit and cancel the Shares to which the notice relates. |
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| 5.5. | The Company is under no obligation to refund any moneys to a Shareholder whose Shares have been cancelled pursuant to Sub-Regulation 5.4 and that Shareholder shall be discharged from any further obligation to the Company. |
| 6. | TRANSFER OF SHARES |
| 6.1. | Subject to the Memorandum, Shares may be transferred by a written instrument of transfer signed by the transferor and containing the name and address of the transferee, which shall be sent to the Company for registration. |
| 6.2. | The transfer of a Share is effective when the name of the transferee is entered on the register of members. |
| 6.3. | If the directors of the Company are satisfied that an instrument of transfer relating to Shares has been signed but that the instrument has been lost or destroyed, they may resolve by Resolution of Directors: |
| (a) | to accept such evidence of the transfer of Shares as they consider appropriate; and |
| (b) | that the transferee’s name should be entered in the register of members notwithstanding the absence of the instrument of transfer. |
| 6.4. | Subject to the Memorandum, the personal representative of a deceased Shareholder may transfer a Share even though the personal representative is not a Shareholder at the time of the transfer. |
| 7. | MEETINGS AND CONSENTS OF SHAREHOLDERS |
| 7.1. | Any director of the Company may convene meetings of the Shareholders at such times and in such manner and places within or outside the British Virgin Islands as the director considers necessary or desirable. |
| 7.2. | Upon the written request of Shareholders entitled to exercise 30 percent or more of the voting rights in respect of the matter for which the meeting is requested the directors shall convene a meeting of Shareholders. |
| 7.3. | The director convening a meeting shall give not less than 7 days’ notice of a meeting of Shareholders to: |
| (a) | those Shareholders whose names on the date the notice is given appear as Shareholders in the register of members and are entitled to vote at the meeting; and |
| (b) | the other directors. |
| 7.4. | The director convening a meeting of Shareholders may fix as the record date for determining those Shareholders that are entitled to vote at the meeting the date notice is given of the meeting, or such other date as may be specified in the notice, being a date not earlier than the date of the notice. |
| 7.5. | 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 in relation to all the Shares which that Shareholder holds. |
| 7.6. | The inadvertent failure of a director who convenes a meeting to give notice of a meeting to a Shareholder or another director, or the fact that a Shareholder or another director has not received notice, does not invalidate the meeting. |
| 7.7. | A Shareholder may be represented at a meeting of Shareholders by a proxy who may speak and vote on behalf of the Shareholder. |
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| 7.8. | The instrument appointing a proxy shall be produced at the place designated for the meeting before the time for holding the meeting at which the person named in such instrument proposes to vote. The notice of the meeting may specify an alternative or additional place or time at which the proxy shall be presented. |
| 7.9. | The instrument appointing a proxy shall be in substantially the following form or such other form as the chairman of the meeting shall accept as properly evidencing the wishes of the Shareholder appointing the proxy. |
[COMPANY NAME]
(the “Company”)
I/We, ……………………………, being a Shareholder of the Company HEREBY APPOINT ………………………………… of …………………………… or failing him ………..……………… of ………..……………… to be my/our proxy to vote for me/us at the meeting of Shareholders to be held on the …… day of …………..…………, 20…… and at any adjournment thereof.
(Any restrictions on voting to be inserted here.)
Signed this …… day of …………..…………, 20……
……………………………
Shareholder |
| 7.10. | The following applies where Shares are jointly owned: |
| (a) | if two or more persons hold Shares jointly each of them may be present in person or by proxy at a meeting of Shareholders and may speak as a Shareholder; |
| (b) | if only one of the joint owners is present in person or by proxy he may vote on behalf of all joint owners; and |
| (c) | if two or more of the joint owners are present in person or by proxy they must vote as one. |
| 7.11. | A Shareholder shall be deemed to be present at a meeting of Shareholders if he participates by telephone or other electronic means and all Shareholders participating in the meeting are able to hear each other. |
| 7.12. | A meeting of Shareholders is duly constituted if, at the commencement of the meeting, there are present in person or by proxy not less than 50 percent of the votes of the Shares entitled to vote on Resolutions of Shareholders to be considered at the meeting. A quorum may comprise a single Shareholder or proxy and then such person may pass a Resolution of Shareholders and a certificate signed by such person accompanied where such person be a proxy by a copy of the proxy instrument shall constitute a valid Resolution of Shareholders. |
| 7.13. | If within two hours from the time appointed for the meeting a quorum is not present, the meeting, if convened upon the requisition of Shareholders, shall be dissolved; in any other case it shall stand adjourned to the next business day in the jurisdiction in which the meeting was to have been held at the same time and place or to such other time and place as the directors may determine, and if at the adjourned meeting there are present within one hour from the time appointed for the meeting in person or by proxy not less than one third of the votes of the Shares or each class or series of Shares entitled to vote on the matters to be considered by the meeting, those present shall constitute a quorum but otherwise the meeting shall be dissolved. |
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| 7.14. | At every meeting of Shareholders, the Chairman of the Board shall preside as chairman of the meeting. If there is no Chairman of the Board or if the Chairman of the Board is not present at the meeting, the Shareholders present shall choose one of their number to be the chairman. 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 failing which the oldest individual Shareholder or representative of a Shareholder present shall take the chair. |
| 7.15. | The chairman may, with the consent of the meeting, adjourn any meeting from time to time, and from place to place, but no business shall be transacted at any adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place. |
| 7.16. | At any meeting of the Shareholders the chairman is responsible for deciding in such manner as he considers appropriate whether any resolution proposed has been carried or not and the result of his decision shall be announced to the meeting and recorded in the minutes of the meeting. If the chairman has any doubt as to the outcome of the vote on a proposed resolution, he shall cause a poll to be taken of all votes cast upon such resolution. If the chairman fails to take a poll then any Shareholder present in person or by proxy who disputes the announcement by the chairman of the result of any vote may immediately following such announcement demand that a poll be taken and the chairman shall cause a poll to be taken. If a poll is taken at any meeting, the result shall be announced to the meeting and recorded in the minutes of the meeting. |
| 7.17. | Subject to the specific provisions contained in this Regulation for the appointment of representatives of Persons other than individuals the right of any individual to speak for or represent a Shareholder shall be determined by the law of the jurisdiction where, and by the documents by which, the Person is constituted or derives its existence. In case of doubt, the directors may in good faith seek legal advice from any qualified person and unless and until a court of competent jurisdiction shall otherwise rule, the directors may rely and act upon such advice without incurring any liability to any Shareholder or the Company. |
| 7.18. | Any Person other than an individual which is a Shareholder may by resolution of its directors or other governing body authorise such individual as it thinks fit to act as its representative at any meeting of Shareholders or of any class of Shareholders, and the individual so authorised shall be entitled to exercise the same rights on behalf of the Shareholder which he represents as that Shareholder could exercise if it were an individual. |
| 7.19. | The chairman of any meeting at which a vote is cast by proxy or on behalf of any Person other than an individual may call for a notarially certified copy of such proxy or authority which shall be produced within 7 days of being so requested or the votes cast by such proxy or on behalf of such Person shall be disregarded. |
| 7.20. | Directors of the Company may attend and speak at any meeting of Shareholders and at any separate meeting of the holders of any class or series of Shares. |
| 7.21. | An action that may be taken by the Shareholders at a meeting may also be taken by a resolution consented to in writing, without the need for any notice, but if any Resolution of Shareholders is adopted otherwise than by the unanimous written consent of all Shareholders, a copy of such resolution shall forthwith be sent to all Shareholders not consenting to such resolution. The consent may be in the form of counterparts, each counterpart being signed by one or more Shareholders. If the consent is in one or more counterparts, and the counterparts bear different dates, then the resolution shall take effect on the earliest date upon which Shareholders holding a sufficient number of votes of Shares to constitute a Resolution of Shareholders have consented to the resolution by signed counterparts. |
| 8. | DIRECTORS |
| 8.1. | The first directors of the Company shall be appointed by the first registered agent within 6 months of the date of incorporation of the Company; and thereafter, the directors shall be elected by Resolution of Shareholders or by Resolution of Directors. |
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| 8.2. | No person shall be appointed as a director, alternate director, or nominated as a reserve director, of the Company unless he has consented in writing to be a director, alternate director or to be nominated as a reserve director respectively. |
| 8.3. | Subject to Sub-Regulation 8.1, the minimum number of directors shall be one and there shall be no maximum number. |
| 8.4. | Each director holds office for the term, if any, fixed by the Resolution of Shareholders or the Resolution of Directors appointing him, or until his earlier death, resignation or removal. If no term is fixed on the appointment of a director, the director serves indefinitely until his earlier death, resignation or removal. |
| 8.5. | A director may be removed from office, |
| (a) | with or without cause, by Resolution of Shareholders passed at a meeting of Shareholders called for the purposes of removing the director or for purposes including the removal of the director or by a written resolution passed by at least 75 percent of the votes of the Shareholders of the Company entitled to vote; or |
| (b) | with cause, by Resolution of Directors passed at a meeting of directors called for the purpose of removing the director or for purposes including the removal of the director. |
| 8.6. | A director may resign his office by giving written notice of his resignation to the Company and the resignation has effect from the date the notice is received by the Company or from such later date as may be specified in the notice. A director shall resign forthwith as a director if he is, or becomes, disqualified from acting as a director under the Act. |
| 8.7. | The directors may at any time appoint any person to be a director either to fill a vacancy or as an addition to the existing directors. Where the directors appoint a person as director to fill a vacancy, the term shall not exceed the term that remained when the person who has ceased to be a director ceased to hold office. |
| 8.8. | A vacancy in relation to directors occurs if a director dies or otherwise ceases to hold office prior to the expiration of his term of office. |
| 8.9. | Where the Company only has one Shareholder who is an individual and that Shareholder is also the sole director of the Company, the sole Shareholder/director may, by instrument in writing, nominate a person who is not disqualified from being a director of the Company as a reserve director of the Company to act in the place of the sole director in the event of his death. |
| 8.10. | The nomination of a person as a reserve director of the Company ceases to have effect if: |
| (a) | before the death of the sole Shareholder/director who nominated him, |
| (i) | he resigns as reserve director, or |
| (ii) | the sole Shareholder/director revokes the nomination in writing; or |
| (b) | the sole Shareholder/director who nominated him ceases to be able to be the sole Shareholder/director of the Company for any reason other than his death. |
| 8.11. | The Company shall keep a register of directors (the “register of directors”) containing: |
| (a) | in the case of an individual director or alternate director, the particulars stated in section 118A(1)(a) of the Act; |
| (b) | in the case of a corporate director, the particulars stated in section 118A(1)(b) of the Act; and |
| (c) | such other information as may be prescribed by the Act. |
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| 8.12. | The register of directors may be kept in any such form as the directors may approve, but if it is in magnetic, electronic or other data storage form, the Company must be able to produce legible evidence of its contents. Until a Resolution of Directors determining otherwise is passed, the magnetic, electronic or other data storage shall be the original register of directors. |
| 8.13. | The Company shall file for registration with the Registrar a copy of its register of directors (and any changes to the register of directors) in accordance with the provisions of the Act. |
| 8.14. | The directors may, by Resolution of Directors, fix the emoluments of directors with respect to services to be rendered in any capacity to the Company. |
| 8.15. | A director is not required to hold a Share as a qualification to office. |
| 8.16. | A director, by written instrument deposited at the registered office of the Company may from time to time appoint another director or another person who is not disqualified for appointment as a director under section 111 of the Act to be his alternate to: |
| (a) | exercise the appointing director’s powers; and |
| (b) | carry out the appointing director’s responsibilities, |
in relation to the taking of decisions by the directors in the absence of the appointing director.
| 8.17. | No person shall be appointed as an alternate director unless he has consented in writing to be an alternate director. The appointment of an alternate director does not take effect until written notice of the appointment has been deposited at the registered office of the Company. |
| 8.18. | The appointing director may, at any time, terminate or vary the alternate’s appointment. The termination or variation of the appointment of an alternate director does not take effect until written notice of the termination or variation has been deposited at the registered office of the Company, save that if a director shall die or cease to hold the office of director, the appointment of his alternate shall thereupon cease and terminate immediately without the need of notice. |
| 8.19. | An alternate director has no power to appoint an alternate, whether of the appointing director or of the alternate director. |
| 8.20. | An alternate director has the same rights as the appointing director in relation to any directors’ meeting and any written resolution of directors circulated for written consent. Unless stated otherwise in the notice of the appointment of the alternate, or a notice of variation of the appointment, if undue delay or difficulty would be occasioned by giving notice to a director of a resolution of which his approval is sought in accordance with these Articles his alternate (if any) shall be entitled to signify approval of the same on behalf of that director. Any exercise by the alternate director of the appointing director’s powers in relation to the taking of decisions by the directors is as effective as if the powers were exercised by the appointing director. An alternate director does not act as an agent of or for the appointing director and is liable for his own acts and omissions as an alternate director. |
| 8.21. | The remuneration of an alternate director (if any) shall be payable out of the remuneration payable to the director appointing him (if any), as agreed between such alternate and the director appointing him. |
| 9. | POWERS OF DIRECTORS |
| 9.1. | The business and affairs of the Company shall be managed by, or under the direction or supervision of, the directors of the Company. The directors of the Company have all the powers necessary for managing, and for directing and supervising, the business and affairs of the Company. The directors may pay all expenses incurred preliminary to and in connection with the incorporation of the Company and may exercise all such powers of the Company as are not by the Act or by the Memorandum or the Articles required to be exercised by the Shareholders. |
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| 9.2. | Each director shall exercise his powers for a proper purpose and shall not act or agree to the Company acting in a manner that contravenes the Memorandum, the Articles or the Act. Each director, in exercising his powers or performing his duties, shall act honestly and in good faith in what the director believes to be the best interests of the Company. |
| 9.3. | If the Company is the wholly owned subsidiary of a holding company, a director of the Company may, when exercising powers or performing duties as a director, act in a manner which he believes is in the best interests of the holding company even though it may not be in the best interests of the Company. |
| 9.4. | Any director which is a body corporate may appoint any individual as its duly authorised representative for the purpose of representing it at meetings of the directors, with respect to the signing of consents or otherwise. |
| 9.5. | The continuing directors may act notwithstanding any vacancy in their body. |
| 9.6. | The directors may by Resolution of Directors exercise all the powers of the Company to incur indebtedness, liabilities or obligations and to secure indebtedness, liabilities or obligations whether of the Company or of any third party. |
| 9.7. | All cheques, promissory notes, drafts, bills of exchange and other negotiable instruments and all receipts for moneys paid to the Company shall be signed, drawn, accepted, endorsed or otherwise executed, as the case may be, in such manner as shall from time to time be determined by Resolution of Directors. |
| 9.8. | For the purposes of Section 175 (Disposition of assets) of the Act, the directors may by Resolution of Directors determine that any sale, transfer, lease, exchange or other disposition is in the usual or regular course of the business carried on by the Company and such determination is, in the absence of fraud, conclusive. |
| 10. | PROCEEDINGS OF DIRECTORS |
| 10.1. | Any one director of the Company may call a meeting of the directors by sending a written notice to each other director. |
| 10.2. | The directors of the Company or any committee thereof may meet at such times and in such manner and places within or outside the British Virgin Islands as the directors may determine to be necessary or desirable. |
| 10.3. | A director is deemed to be present at a meeting of directors if he participates by telephone or other electronic means and all directors participating in the meeting are able to hear each other. |
| 10.4. | A director shall be given not less than 3 days’ notice of meetings of directors, but a meeting of directors held without 3 days’ notice having been given to all directors shall be valid if all the directors entitled to vote at the meeting who do not attend waive notice of the meeting, and for this purpose the presence of a director at a meeting shall constitute waiver by that director. The inadvertent failure to give notice of a meeting to a director, or the fact that a director has not received the notice, does not invalidate the meeting. |
| 10.5. | A meeting of directors is duly constituted for all purposes if at the commencement of the meeting there are present in person or by alternate not less than one-half of the total number of directors, unless there are only 2 directors in which case the quorum is 2. |
| 10.6. | If the Company has only one director the provisions herein contained for meetings of directors do not apply and such sole director has full power to represent and act for the Company in all matters as are not by the Act, the Memorandum or the Articles required to be exercised by the Shareholders. In lieu of minutes of a meeting the sole director shall record in writing and sign a note or memorandum of all matters requiring a Resolution of Directors. Such a note or memorandum constitutes sufficient evidence of such resolution for all purposes. |
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| 10.7. | At meetings of directors at which the Chairman of the Board is present, he shall preside as chairman of the meeting. If there is no Chairman of the Board or if the Chairman of the Board is not present, the directors present shall choose one of their number to be chairman of the meeting. |
| 10.8. | An action that may be taken by the directors or a committee of directors at a meeting may also be taken by a Resolution of Directors or a resolution of a committee of directors consented to in writing or by telex, telegram, cable or other written electronic communication by a majority of the directors or by a majority of the members of the committee, as the case may be, without the need for any notice. A written resolution consented to in such manner may consist of several documents, including written electronic communication, in like form each signed or assented to by one or more directors. If the consent is in one or more counterparts, and the counterparts bear different dates, then the resolution shall take effect on the date upon which the last director has consented to the resolution by signed counterparts. |
| 11. | COMMITTEES |
| 11.1. | The directors may, by Resolution of Directors, designate one or more committees, each consisting of one or more directors, and delegate one or more of their powers, including the power to affix the Seal, to the committee. |
| 11.2. | The directors have no power to delegate to a committee of directors any of the following powers: |
| (a) | to amend the Memorandum or the Articles; |
| (b) | to designate committees of directors; |
| (c) | to delegate powers to a committee of directors; |
| (d) | to appoint or remove directors; |
| (e) | to appoint or remove an agent; |
| (f) | to approve a plan of merger, consolidation or arrangement; |
| (g) | to make a declaration of solvency or to approve a liquidation plan; or |
| (h) | to make a determination that immediately after a proposed Distribution the value of the Company’s assets will exceed its liabilities and the Company will be able to pay its debts as they fall due. |
| 11.3. | Sub-Regulation 11.2(b) and (c) do not prevent a committee of directors, where authorised by the Resolution of Directors appointing such committee or by a subsequent Resolution of Directors, from appointing a sub-committee and delegating powers exercisable by the committee to the sub-committee. |
| 11.4. | The meetings and proceedings of each committee of directors consisting of 2 or more directors shall be governed mutatis mutandis by the provisions of the Articles regulating the proceedings of directors so far as the same are not superseded by any provisions in the Resolution of Directors establishing the committee. |
| 11.5. | Where the directors delegate their powers to a committee of directors they remain responsible for the exercise of that power by the committee, unless they believed on reasonable grounds at all times before the exercise of the power that the committee would exercise the power in conformity with the duties imposed on directors of the Company under the Act. |
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| 12. | OFFICERS AND AGENTS |
| 12.1. | The Company may by Resolution of Directors appoint officers of the Company at such times as may be considered necessary or expedient. Such officers may consist of a Chairman of the Board of Directors, a president and one or more vice-presidents, secretaries and treasurers and such other officers as may from time to time be considered necessary or expedient. Any number of offices may be held by the same person. |
| 12.2. | The officers shall perform such duties as are prescribed at the time of their appointment subject to any modification in such duties as may be prescribed thereafter by Resolution of Directors. In the absence of any specific prescription of duties it shall be the responsibility of the Chairman of the Board to preside at meetings of directors and Shareholders, the president to manage the day to day affairs of the Company, the vice-presidents to act in order of seniority in the absence of the president but otherwise to perform such duties as may be delegated to them by the president, the secretaries to maintain the register of members, minute books and records (other than financial records) of the Company and to ensure compliance with all procedural requirements imposed on the Company by applicable law, and the treasurer to be responsible for the financial affairs of the Company. |
| 12.3. | The emoluments of all officers shall be fixed by Resolution of Directors. |
| 12.4. | The officers of the Company shall hold office until their successors are duly appointed, but any officer elected or appointed by the directors may be removed at any time, with or without cause, by Resolution of Directors. Any vacancy occurring in any office of the Company may be filled by Resolution of Directors. |
| 12.5. | The directors may, by Resolution of Directors, appoint any person, including a person who is a director, to be an agent of the Company. |
| 12.6. | An agent of the Company shall have such powers and authority of the directors, including the power and authority to affix the Seal, as are set forth in the Articles or in the Resolution of Directors appointing the agent, except that no agent has any power or authority with respect to the following: |
| (a) | to amend the Memorandum or the Articles; |
| (b) | to change the registered office or agent; |
| (c) | to designate committees of directors; |
| (d) | to delegate powers to a committee of directors; |
| (e) | to appoint or remove directors; |
| (f) | to appoint or remove an agent; |
| (g) | to fix emoluments of directors; |
| (h) | to approve a plan of merger, consolidation or arrangement; |
| (i) | to make a declaration of solvency or to approve a liquidation plan; |
| (j) | to make a determination that immediately after a proposed Distribution the value of the Company’s assets will exceed its liabilities and the Company will be able to pay its debts as they fall due; or |
| (k) | to authorise the Company to continue as a company incorporated under the laws of a jurisdiction outside the British Virgin Islands. |
| 12.7. | The Resolution of Directors appointing an agent may authorise the agent to appoint one or more substitutes or delegates to exercise some or all of the powers conferred on the agent by the Company. |
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| 12.8. | The directors may remove an agent appointed by the Company and may revoke or vary a power conferred on him. |
| 13. | CONFLICT OF INTERESTS |
| 13.1. | A director of the Company shall, forthwith after becoming aware of the fact that he is interested in a transaction entered into or to be entered into by the Company, disclose the interest to all other directors of the Company. |
| 13.2. | For the purposes of Sub-Regulation 13.1, a disclosure to all other directors to the effect that a director is a member, director or officer of another named entity or has a fiduciary relationship with respect to the entity or a named individual and is to be regarded as interested in any transaction which may, after the date of the entry into the transaction or disclosure of the interest, be entered into with that entity or individual, is a sufficient disclosure of interest in relation to that transaction. |
| 13.3. | A director of the Company who is interested in a transaction entered into or to be entered into by the Company may: |
| (a) | vote on a matter relating to the transaction; |
| (b) | attend a meeting of directors at which a matter relating to the transaction arises and be included among the directors present at the meeting for the purposes of a quorum; and |
| (c) | sign a document on behalf of the Company, or do any other thing in his capacity as a director, that relates to the transaction, |
and, subject to compliance with the Act shall not, by reason of his office be accountable to the Company for any benefit which he derives from such transaction and no such transaction shall be liable to be avoided on the grounds of any such interest or benefit.
| 14. | INDEMNIFICATION |
| 14.1. | Subject to the limitations hereinafter provided the Company shall indemnify 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 any person who: |
| (a) | is or was a party or is threatened to be made a party to any threatened, pending or completed proceedings, whether civil, criminal, administrative or investigative, by reason of the fact that the person is or was a director of the Company; or |
| (b) | is or was, at the request of the Company, serving as a director of, or in any other capacity is or was acting for, another body corporate or a partnership, joint venture, trust or other enterprise. |
| 14.2. | The indemnity in Sub-Regulation 14.1 only applies if the person acted honestly and in good faith with a view to the best interests of the Company and, in the case of criminal proceedings, the person had no reasonable cause to believe that their conduct was unlawful. |
| 14.3. | For the purposes of Sub-Regulation 14.2, a director acts in the best interests of the Company if he acts in the best interests of |
| (a) | the Company’s holding company; or |
| (b) | a Shareholder or Shareholders; |
in either case, in the circumstances specified in Sub-Regulation 9.3 or the Act, as the case may be.
| 14.4. | The decision of the directors as to whether the person acted honestly and in good faith and with a view to the best interests of the Company and as to whether the person had no reasonable cause to believe that his conduct was unlawful is, in the absence of fraud, sufficient for the purposes of the Articles, unless a question of law is involved. |
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| 14.5. | The termination of any proceedings by any judgment, order, settlement, conviction or the entering of a nolle prosequi does not, by itself, create a presumption that the person did not act honestly and in good faith and with a view to the best interests of the Company or that the person had reasonable cause to believe that his conduct was unlawful. |
| 14.6. | Expenses, including legal fees, incurred by a director in defending any legal, administrative or investigative proceedings may be paid by the Company in advance of the final disposition of such proceedings upon receipt of an undertaking by or on behalf of the director to repay the amount if it shall ultimately be determined that the director is not entitled to be indemnified by the Company in accordance with Sub-Regulation 14.1. |
| 14.7. | Expenses, including legal fees, incurred by a former director in defending any legal, administrative or investigative proceedings may be paid by the Company in advance of the final disposition of such proceedings upon receipt of an undertaking by or on behalf of the former director to repay the amount if it shall ultimately be determined that the former director is not entitled to be indemnified by the Company in accordance with Sub-Regulation 14.1 and upon such terms and conditions, if any, as the Company deems appropriate. |
| 14.8. | The indemnification and advancement of expenses provided by, or granted pursuant to, this section is not exclusive of any other rights to which the person seeking indemnification or advancement of expenses may be entitled under any agreement, Resolution of Shareholders, resolution of disinterested directors or otherwise, both as acting in the person’s official capacity and as to acting in another capacity while serving as a director of the Company. |
| 14.9. | If a person referred to in Sub-Regulation 14.1 has been successful in defence of any proceedings referred to in Sub-Regulation 14.1, the person is entitled to be indemnified against all expenses, including legal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred by the person in connection with the proceedings. |
| 14.10. | The Company may purchase and maintain insurance in relation to any person who is or was a director, officer or liquidator of the Company, or who at the request of the Company is or was serving as a director, officer or liquidator of, or in any other capacity is or was acting for, another company or a partnership, joint venture, trust or other enterprise, against any liability asserted against the person and incurred by the person in that capacity, whether or not the Company has or would have had the power to indemnify the person against the liability as provided in the Articles. |
| 15. | RECORDS AND UNDERLYING DOCUMENTATION |
| 15.1. | The Company shall keep the following documents at the office of its registered agent: |
| (a) | the Memorandum and the Articles; |
| (b) | the register of members, or a copy of the register of members; |
| (c) | the register of directors, or a copy of the register of directors; and |
| (d) | copies of all notices and other documents filed by the Company with the Registrar of Corporate Affairs in the previous 10 years. |
| 15.2. | Until the directors determine otherwise by Resolution of Directors the Company shall keep the original register of members and original register of directors at the office of its registered agent. |
| 15.3. | If the Company maintains only a copy of the register of members or a copy of the register of directors at the office of its registered agent, it shall: |
| (a) | within 15 days of any change in either register, notify the registered agent in writing of the change; and |
| (b) | provide the registered agent with a written record of the physical address of the place or places at which the original register of members or the original register of directors is kept. |
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| 15.4. | Where the original register of members or the original register of directors is maintained other than at the office of the registered agent, and the place at which the original records is changed, the Company shall provide the registered agent with the physical address of the new location of the records of the Company within 14 days of the change of location. |
| 15.5. | The Company shall keep the following records at the office of its registered agent or at such other place or places, within or outside the British Virgin Islands, as the directors may determine: |
| (a) | the records and underlying documentation of the Company; |
| (b) | minutes of meetings and Resolutions of Shareholders and classes of Shareholders; |
| (c) | minutes of meetings and Resolutions of Directors and committees of directors; and |
| (d) | an impression of the Seal. |
| 15.6. | The records and underlying documentation of the Company shall be in such form as: |
| (a) | are sufficient to show and explain the Company’s transactions; and |
| (b) | will, at any time, enable the financial position of the Company to be determined with reasonable accuracy. |
| 15.7. | The Company shall retain the records and underlying documentation for a period of at least five years from the date: |
| (a) | of completion of the transaction to which the records and underlying documentation relate; or |
| (b) | the Company terminates the business relationship to which the records and underlying documentation relate. |
| 15.8. | Where the records and underlying documentation of the Company are kept at a place or places other than at the office of its registered agent, the Company shall provide the registered agent with a written: |
| (a) | record of the physical address of the place at which the records and underlying documentation are kept; and |
| (b) | record of the name of the person who maintains and controls the Company’s records and underlying documentation. |
| 15.9. | Where the place or places at which the records and underlying documentation of the Company, or the name of the person who maintains and controls the Company’s records and underlying documentation, change, the Company shall, within 14 days of the change, provide its registered agent with: |
| (a) | the physical address of the new location of the records and underlying documentation; or |
| (b) | the name of the new person who maintains and controls the Company’s records and underlying documentation. |
| 15.10. | The Company shall file with its registered agent in accordance with section 98A(2) of the Act, financial returns in respect of each calendar year, or if the Company’s fiscal or financial year is not a calendar year, the fiscal or financial year of the Company. |
| 15.11. | The Company shall provide its registered agent without delay any records and underlying documentation in respect of the Company that the registered agent requests pursuant to the Act or that the Company is required to file with its registered agent pursuant to the Act. |
| 15.12. | The records and underlying documentation kept by the Company under this Regulation shall be in written form or either wholly or partly as electronic records complying with the requirements of the Electronic Transactions Act, 2001 (No. 5 of 2001) as from time to time amended or re-enacted. |
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| 16. | REGISTER OF CHARGES |
| 16.1. | The Company shall maintain at the office of its registered agent a register of charges in which there shall be entered the following particulars regarding each mortgage, charge and other encumbrance created by the Company: |
| (a) | the date of creation of the charge; |
| (b) | a short description of the liability secured by the charge; |
| (c) | a short description of the property charged; |
| (d) | the name and address of the trustee for the security or, if there is no such trustee, the name and address of the chargee; |
| (e) | unless the charge is a security to bearer, the name and address of the holder of the charge; and |
| (f) | details of any prohibition or restriction contained in the instrument creating the charge on the power of the Company to create any future charge ranking in priority to or equally with the charge. |
| 16.2. | Where a change occurs in the relevant charges or in the details of the charges required to be recorded in the Company’s register of charges maintained in accordance with Sub-Regulation 16.1, the Company shall, within 14 days of the change occurring, transmit details of the change to the registered agent. |
| 17. | SEAL |
The Company shall have a Seal and may have more than one Seal and references herein to the Seal shall be references to every Seal which shall have been duly adopted by Resolution of Directors. The directors shall provide for the safe custody of the Seal and for an imprint thereof to be kept at the registered office. Except as otherwise expressly provided herein the Seal when affixed to any written instrument shall be witnessed and attested to by the signature of any one director or other person so authorised from time to time by Resolution of Directors. Such authorisation may be before or after the Seal is affixed, may be general or specific and may refer to any number of sealings. The directors may provide for a facsimile of the Seal and of the signature of any director or authorised person which may be reproduced by printing or other means on any instrument and it shall have the same force and validity as if the Seal had been affixed to such instrument and the same had been attested to as hereinbefore described.
| 18. | DISTRIBUTIONS |
| 18.1. | The directors of the Company may, by Resolution of Directors, authorise a Distribution at a time and of an amount they think fit if they are satisfied, on reasonable grounds, that, immediately after the Distribution, the value of the Company’s assets will exceed its liabilities and the Company will be able to pay its debts as they fall due. |
| 18.2. | Distributions may be paid in money, Shares, or other property. |
| 18.3. | Notice of any Distribution that may have been declared shall be given to each Shareholder as specified in Sub-Regulation 20.1 and all Distributions unclaimed for 3 years after having been declared may be forfeited by Resolution of Directors for the benefit of the Company. |
| 18.4. | No Distributions shall bear interest as against the Company and no Distribution shall be paid on Treasury Shares. |
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| 19. | ACCOUNTS AND AUDIT |
| 19.1. | The Company shall keep records that are sufficient to show and explain the Company’s transactions and that will, at any time, enable the financial position of the Company to be determined with reasonable accuracy. |
| 19.2. | The Company may by Resolution of Shareholders call for the directors to prepare periodically and make available a profit and loss account and a balance sheet. The profit and loss account and balance sheet shall be drawn up so as to give respectively a true and fair view of the profit and loss of the Company for a financial period and a true and fair view of the assets and liabilities of the Company as at the end of a financial period. |
| 19.3. | The Company may by Resolution of Shareholders call for the accounts to be examined by auditors. |
| 19.4. | The first auditors shall be appointed by Resolution of Directors; subsequent auditors shall be appointed by Resolution of Shareholders or by Resolution of Directors. |
| 19.5. | The auditors may be Shareholders, but no director or other officer shall be eligible to be an auditor of the Company during their continuance in office. |
| 19.6. | The remuneration of the auditors of the Company may be fixed by Resolution of Directors. |
| 19.7. | The auditors shall examine each profit and loss account and balance sheet required to be laid before a meeting of the Shareholders or otherwise given to Shareholders and shall state in a written report whether or not: |
| (a) | in their opinion the profit and loss account and balance sheet give a true and fair view respectively of the profit and loss for the period covered by the accounts, and of the assets and liabilities of the Company at the end of that period; and |
| (b) | all the information and explanations required by the auditors have been obtained. |
| 19.8. | The report of the auditors shall be annexed to the accounts and shall be read at the meeting of Shareholders at which the accounts are laid before the Company or shall be otherwise given to the Shareholders. |
| 19.9. | Every auditor of the Company shall have a right of access at all times to the books of account and vouchers of the Company, and shall be entitled to require from the directors and officers of the Company such information and explanations as he thinks necessary for the performance of the duties of the auditors. |
| 19.10. | The auditors of the Company shall be entitled to receive notice of, and to attend any meetings of Shareholders at which the Company’s profit and loss account and balance sheet are to be presented. |
| 20. | NOTICES |
| 20.1. | Any notice, information or written statement to be given by the Company to Shareholders may be given by personal service or by mail addressed to each Shareholder at the address shown in the register of members. |
| 20.2. | Any summons, notice, order, document, process, information or written statement to be served on the Company may be served by leaving it, or by sending it by registered mail addressed to the Company, at its registered office, or by leaving it with, or by sending it by registered mail to, the registered agent of the Company. |
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| 20.3. | Service of any summons, notice, order, document, process, information or written statement to be served on the Company may be proved by showing that the summons, notice, order, document, process, information or written statement was delivered to the registered office or the registered agent of the Company or that it was mailed in such time as to admit to its being delivered to the registered office or the registered agent of the Company in the normal course of delivery within the period prescribed for service and was correctly addressed and the postage was prepaid. |
| 21. | VOLUNTARY LIQUIDATION |
The Company may by Resolution of Shareholders or, subject to section 199(2) of the Act, by Resolution of Directors appoint an eligible individual physically resident in the British Virgin Islands for not less than 180 days prior to his or her appointment, as voluntary liquidator.
| 22. | CONTINUATION |
The Company may by Resolution of Shareholders or by a Resolution of Directors, subject to section 184(1) of the Act, continue as a company incorporated under the laws of a jurisdiction outside the British Virgin Islands in the manner provided under those laws.
We, Vistra (BVI) Limited of Vistra Corporate Services Centre, Wickhams Cay II, Road Town, Tortola, VG1110, British Virgin Islands for the purpose of incorporating a BVI Business Company under the laws of the British Virgin Islands hereby sign these Articles of Association the 2nd day of May, 2023.
| Incorporator | |
| /s/ (Sd.) Rexella D. Hodge | |
| (Sd.) Rexella D. Hodge | |
| Authorised Signatory | |
| Vistra (BVI) Limited |
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Exhibit 3.2
Exhibit 10.1
INDEMNIFICATION AGREEMENT
This Indemnification Agreement (this “Agreement”), made and entered into as of the ________ day of ___________, 2024, by and between CONCORDE INTERNATIONAL GROUP LTD, a British Virgin Islands business company (the “Company”) and (“Indemnitee”).
W I T N E S S E T H:
WHEREAS, the Indemnitee has agreed to serve as a director or executive officer of the Company and in such capacity will render valuable services to the Company;
WHEREAS, both the Company and Indemnitee recognize the increased risk of litigation and other claims being asserted against directors and executive officers of public companies;
WHEREAS, in order to induce and encourage highly experienced and capable persons such as the Indemnitee to serve as directors and officers of the Company, the board of directors of the Company (the “Board”) has determined that it is reasonably prudent and necessary for the Company contractually to obligate itself to indemnify, and to advance expenses on behalf of, such persons;
NOW, THEREFORE, in consideration of the premises and mutual agreements hereinafter set forth, and other good and valuable consideration, including, without limitation, the service of the Indemnitee, the receipt of which hereby is acknowledged, and in order to induce the Indemnitee to serve, or continue to serve, as a director or an executive officer of the Company, the Company and the Indemnitee hereby agree as follows:
1. Definitions. As used in this Agreement:
(a). “Change of Control” shall mean any of the following:
(i) any “person” (as such term is used in Sections 13(d) and 14(d) of the United States Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (collectively, the “Exchange Act”)), but excluding (1) the Company, (2) any trustee or other fiduciary holding securities pursuant to an employee benefit or welfare plan or employee share plan of the Company or any subsidiary or affiliate of the Company, or any entity organized, appointed, established or holding securities of the Company with voting power for or pursuant to the terms of any such plan and (3) any entity owned, directly or indirectly, by the shareholders of the Company in substantially the same proportions as their ownership of stock of the Company, becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 30% or more of the combined voting power of the Company’s then outstanding securities without the prior approval of at least majority of the directors in office immediately prior to such person’s attaining such interest;
(ii) any merger or consolidation of the Company with any other entity, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 50% of the combined voting power of the voting securities of the surviving entity outstanding immediately after such merger or consolidation and with the power to elect at least a majority of the Board or other governing body of such surviving entity;
(iii) the approval by the shareholders of the Company of a complete liquidation of the Company or an agreement for the sale or disposition by the Company, in one transaction or a series of related transactions, of all or substantially all of the Company’s assets;
(iv) any other event of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or in response to any similar item or any similar or successor schedule or form) promulgated under the Exchange Act whether or not the Company is then subject to such reporting requirements; and
(v) during any period of two (2) consecutive years (not including any period prior to the execution of this Agreement), individuals who at the beginning of such period constitute the Board, and any new director (other than a director designated by a person who has entered into an agreement with the Company to effect a transaction described in Sections 1(a)(i), 1(a)(iii) or 1(a)(iv)) whose election by the Board or nomination for election by the Company’s shareholders was approved by a vote of at least two-thirds of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, ceasing for any reason to constitute a least a majority of the members of the Board.
(b). “Disinterested Director” with respect to any request by the Indemnitee for indemnification or advancement of expenses hereunder shall mean a director of the Company who neither is nor was a party to the Proceeding (as defined below) in respect of which indemnification or advancement is being sought by the Indemnitee.
(c). “Expenses” shall mean shall mean, without limitation, expenses of Proceedings, including attorneys’ fees, disbursement and retainers, accounting and witness fees, expenses related to preparation for service as a witness and to service as a witness, travel and deposition costs, expenses of investigations, judicial or administrative proceedings and appeals, amounts paid in settlement of a Proceeding by or on behalf of the Indemnitee, costs of attachment or similar bonds, any expenses of attempting to establish or establishing a right to indemnification or advancement of expenses, under this Agreement, the Company’s Memorandum of Association and Articles of Association as currently in effect (the “Articles”), applicable law or otherwise, and reasonable compensation for time spent by the Indemnitee in connection with the investigation, defense or appeal of a Proceeding or action for indemnification for which the Indemnitee is not otherwise compensated by the Company or any third party. The term “Expenses” shall not include the amount of judgments, fines, interest or penalties, which are actually levied against or sustained by the Indemnitee to the extent sustained after final adjudication.
(d). “Independent Legal Counsel” shall mean any firm of attorneys that is not presently representing and has not in the preceding five (5) years represented the Company, the Company’s subsidiaries or affiliates, the Indemnitee, any entity controlled by the Indemnitee, or any party adverse to the Company in any matter material to any such party (other than with respect to matters concerning the Indemnitee under this Agreement, or of other indemnitees under similar indemnification agreements). Notwithstanding the foregoing, the term “Independent Legal Counsel” shall not include any person who, under applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or the Indemnitee in an action to determine the Indemnitee’s right to indemnification or advancement of expenses under this Agreement, the Articles, applicable law or otherwise.
(e). “Proceeding” shall mean any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, or other proceeding (including, without limitation, an appeal therefrom), formal or informal, whether brought in the name of the Company or otherwise, whether of a civil, criminal, administrative or investigative nature, and whether by, in or involving a court or an administrative, other governmental or private entity or body (including, without limitation, an investigation by the Company or its Board), by reason of (i) the fact that the Indemnitee is or was a director or officer of the Company, or is or was serving at the request of the Company as an agent of another enterprise, whether or not the Indemnitee is serving in such capacity at the time any liability or expense is incurred for which indemnification or reimbursement is to be provided under this Agreement, (ii) any actual or alleged act or omission or neglect or breach of duty, including, without limitation, any actual or alleged error or misstatement or misleading statement, which the Indemnitee commits or suffers while acting in any such capacity, or (iii) the Indemnitee attempting to establish or establishing a right to indemnification or advancement of expenses pursuant to this Agreement, the Articles, applicable law or otherwise.
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(f). The phrase “serving at the request of the Company as an agent of another enterprise” or any similar terminology shall mean, unless the context otherwise requires, serving at the request of the Company as a director, officer, employee or agent of another corporation, partnership, joint venture, limited liability company, trust, employee benefit or welfare plan or other enterprise, foreign or domestic. The phrase “serving at the request of the Company” shall include, without limitation, any service as a director/an executive officer of the Company which imposes duties on, or involves services by, such director/executive officer with respect to the Company or any of the Company’s subsidiaries, affiliates, employee benefit or welfare plans, such plan’s participants or beneficiaries or any other enterprise, foreign or domestic. In the event that the Indemnitee shall be a director, officer, employee or agent of another corporation, partnership, joint venture, limited liability company, trust, employee benefit or welfare plan or other enterprise, foreign or domestic, 50% or more of the ordinary shares, combined voting power or total equity interest of which is owned by the Company or any subsidiary or affiliate thereof, then it shall be presumed conclusively that the Indemnitee is so acting at the request of the Company.
2. Services By Indemnitee. The Indemnitee agrees to serve as a director or officer of the Company under the terms of the Indemnitee’s agreement with the Company for so long as the Indemnitee is duly elected or appointed or until such time as the Indemnitee tenders a resignation in writing or is removed from the Indemnitee’s position; provided, however, that the Indemnitee may at any time and for any reason resign from such position (subject to any other contractual obligation or other obligation imposed by operation of law).
3. Proceedings by or in the Right of the Company. The Company shall, to the fullest extent permitted by applicable laws, indemnify the Indemnitee if the Indemnitee is a party to or threatened to be made a party to or is otherwise involved in any Proceeding by or in the right of the Company to procure a judgment in its favor by reason of the fact that the Indemnitee is or was a director or officer of the Company, or is or was serving at the request of the Company as an agent of another enterprise, against all Expenses, judgments, fines, interest or penalties, which are actually and reasonably incurred by the Indemnitee in connection with the defense or settlement of such a Proceeding, if the Indemnitee acted in good faith and in a manner the Indemnitee reasonably believed to be in, or not opposed to, the best interests of the Company; except that no indemnification under this section shall be made in respect of any claim, issue or matter as to which such person shall have been adjudicated by final judgment by a court of competent jurisdiction to be liable to the Company for willful misconduct in the performance of his/her duty to the Company, unless and only to the extent that the court in which such Proceeding was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such amounts which such other court shall deem proper.
4. Proceeding Other Than a Proceeding by or in the Right of the Company. The Company shall, to the fullest extent permitted by applicable laws, indemnify the Indemnitee if the Indemnitee is a party to or threatened to be made a party to or is otherwise involved in any Proceeding (other than a Proceeding by or in the right of the Company) by reason of the fact that the Indemnitee is or was a director or officer of the Company, or is or was serving at the request of the Company as an agent of another enterprise, against all Expenses, judgments, fines, interest or penalties, which are actually and reasonably incurred by the Indemnitee in connection with such a Proceeding, to the fullest extent permitted by applicable law; provided, however, that any settlement of a Proceeding must be approved in advance in writing by the Company (which approval shall not be unreasonably withheld).
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5. Indemnification for Costs, Charges and Expenses of Witness or Successful Party. Notwithstanding any other provision of this Agreement, to the extent that the Indemnitee (a) has prepared to serve or has served as a witness in any Proceeding in any way relating to (i) the Company or the Company’s subsidiaries, affiliates, employee benefit or welfare plans or such plan’s participants or beneficiaries or (ii) anything done or not done by the Indemnitee as a director or officer of the Company or in connection with serving at the request of the Company as an agent of another enterprise, or (b) has been successful in defense of any Proceeding or in defense of any claim, issue or matter therein, on the merits or otherwise, including the dismissal of a Proceeding without prejudice or the settlement of a Proceeding without an admission of liability, the Indemnitee shall be indemnified against all Expenses actually and reasonably incurred by the Indemnitee in connection therewith to the fullest extent permitted by applicable law. All such indemnification against Expenses shall be offset by the amount of cash, if any, received by the Indemnitee resulting from his/her success therein.
6. Partial Indemnification. If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for a portion of Expenses, but not for the total amount of Expenses, the Company shall indemnify the Indemnitee for the portion of such Expenses to which Indemnitee is entitled.
7. Advancement of Expenses. The Expenses incurred by the Indemnitee in any Proceeding shall be paid promptly by the Company in advance of the final disposition of the Proceeding at the written request of the Indemnitee, to the fullest extent permitted by applicable law; provided, however, that the Indemnitee shall set forth in such request reasonable evidence that such Expenses have been incurred by the Indemnitee in connection with such Proceeding and an undertaking in writing to repay any advances if it is ultimately determined as provided in Section 8(b) of this Agreement that the Indemnitee is not entitled to indemnification under this Agreement, the Articles, applicable law or otherwise.
8. Indemnification Procedure; Determination of Right to Indemnification.
(a) Promptly after receipt by the Indemnitee of notice of the commencement of any Proceeding, the Indemnitee shall, if a claim for indemnification or advancement of Expenses in respect thereof is to be made against the Company under this Agreement, notify the Company of the commencement thereof in writing. The failure and delay to so notify the Company will not relieve the Company from any liability which the Company may have to the Indemnitee under this Agreement unless the Company shall have lost significant substantive or procedural rights with respect to the defense of any Proceeding as a result of such omission to so notify.
(b) The Indemnitee shall be conclusively presumed to be entitled to indemnification under this Agreement unless a determination is made that the Indemnitee is not entitled to indemnification under this Agreement, the Articles, applicable law or otherwise by one of the following two methods, which, if there has not been a Change in Control, shall be at the election of the Board: (i) by a majority vote of the Board of a quorum consisting of Disinterested Directors or (ii) if a quorum of the Board consisting of Disinterested Directors is not obtainable or, even if obtainable, said Disinterested Directors so direct, by Independent Legal Counsel in a written opinion to the Board, a copy of which shall be delivered to the Indemnitee. If a Change in Control shall have occurred and the Indemnitee so requests in writing, such determination shall be made only by Independent Legal Counsel in the manner set forth in this subsection.
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(c) If (i) a determination is made that the Indemnitee is not entitled to indemnification under this Agreement or (ii) a claim for indemnification or advancement of Expenses under this Agreement is not paid by the Company within thirty (30) days after receipt by the Company of written notice thereof, the Indemnitee is entitled to an adjudication in any court of competent jurisdiction. Such judicial proceeding shall be made de novo. The burden of proving that indemnification or advances are not appropriate shall be on the Company. Neither the failure of the directors of the Company or Independent Legal Counsel to have made a determination prior to the commencement of such action that indemnification or advancement of Expenses is proper in the circumstances because the Indemnitee has met the applicable standard of conduct, if any, nor an actual determination by the directors of the Company or Independent Legal Counsel that the Indemnitee has not met the applicable standard of conduct shall be a defense to an action by the Indemnitee or create a presumption for the purpose of such an action that the Indemnitee has not met the applicable standard of conduct. The termination of any Proceeding by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself (i) create a presumption that the Indemnitee did not act in good faith and in a manner which he reasonably believed to be in the best interests of the Company and/or its shareholders, and, with respect to any criminal Proceeding, that the Indemnitee had reasonable cause to believe that his conduct was unlawful or (ii) otherwise adversely affect the rights of the Indemnitee to indemnification or advancement of Expenses under this Agreement, except as may be provided herein.
(d) If a court of competent jurisdiction shall determine that the Indemnitee is entitled to any indemnification or advancement of Expenses hereunder, the Company shall pay all Expenses actually and reasonably incurred by the Indemnitee in connection with such adjudication (including, but not limited to, any appellate proceedings).
(e) With respect to any Proceeding for which indemnification or advancement of Expenses is requested, the Company will be entitled to participate therein at its own expense and, except as otherwise provided below, to the extent that it may wish, the Company may assume the defense thereof, with counsel reasonably satisfactory to the Indemnitee. After notice from the Company to the Indemnitee of its election to assume the defense of a Proceeding, the Company will not be liable to the Indemnitee under this Agreement for any Expenses subsequently incurred by the Indemnitee in connection with the defense thereof, other than as provided below. The Company shall not settle any Proceeding in any manner which would impose any penalty or limitation on the Indemnitee without the Indemnitee’s written consent. The Indemnitee shall have the right to employ his/her own counsel in any Proceeding, but the fees and expenses of such counsel incurred after notice from the Company of its assumption of the defense of the Proceeding shall be at the expense of the Indemnitee, unless (i) the employment of counsel by the Indemnitee has been authorized by the Company, (ii) the Indemnitee shall have reasonably concluded that there may be a conflict of interest between the Company and the Indemnitee in the conduct of the defense of a Proceeding, or (iii) the Company shall not in fact have employed counsel to assume the defense of a proceeding, in each of which cases the fees and expenses of the Indemnitee’s counsel shall be advanced by the Company. The Company shall not be entitled to assume the defense of any Proceeding brought by or on behalf of the Company or as to which the Indemnitee has reasonably concluded that there may be a conflict of interest between the Company and the Indemnitee.
9. Limitations on Indemnification. Notwithstanding any provision in this Agreement, the Company shall not be obligated under this Agreement to make any indemnity in connection with any claim made against the Indemnitee:
(a) in connection with any Proceeding initiated or brought voluntarily by the Indemnitee and not by way of defense, unless (i) the Board authorized the Proceeding prior to its initiation or (ii) the Proceeding is to enforce indemnification rights under this Agreement, the Articles, applicable law or otherwise and either (A) Indemnitee is successful in such Proceeding in establishing Indemnitee’s right, in whole or in part, to indemnification or advancement of Expenses hereunder (in which case such indemnification or advancement shall be to the fullest extent permitted by this Agreement) or (B) the court in such Proceeding shall determine that, despite Indemnitee’s failure to establish his or her right to indemnification, Indemnitee is entitled to indemnity for such expenses (in which case such indemnification or advancement shall be to the extent provided by such court);
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(b) in connection with the Indemnitee preparing to serve or serving, prior to a Change in Control, as a witness in voluntary cooperation with any non-governmental or non-regulatory party or entity who or which has threatened or commenced any action or proceeding against the Company, or any director, officer, employee, trustee, agent, representative, subsidiary, parent corporation or affiliate of the Company, but such indemnification may be provided by the Company if the Board finds it to be appropriate;
(c) for which payment has actually been made to the Indemnitee under a valid and collectible insurance policy, except in respect of any excess beyond the amount of payment under such insurance policy;
(d) for an accounting of profits made from the purchase or sale by the Indemnitee of securities of the Company pursuant to the provisions of Section 16(b) of the Act or similar provisions of any foreign or United States federal, state or local statute or regulation;
(e) for which the Indemnitee is indemnified and actually paid other than pursuant to this Agreement;
(f) for conduct that is finally adjudged by a court of competent jurisdiction to have been caused by the Indemnitee’s dishonesty, willful default or fraud, including, without limitation, breach of the duty of loyalty, unless and only to the extent that the court in which such Proceeding was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, the Indemnitee is fairly and reasonably entitled to indemnity for such amounts which such court shall deem proper;
(g) if a court of competent jurisdiction finally determines that such indemnification is unlawful. In this respect, the Company and the Indemnitee have been advised that the Securities and Exchange Commission (the “SEC”) takes the position that indemnification for liabilities arising under securities laws is against public policy and is, therefore, unenforceable and that claims for indemnification should be submitted to appropriate courts for adjudication;;
(h) in connection with Indemnitee’s personal tax matter;
(i) subject to the proviso in Section 9(a) hereof, in connection with any dispute or breach arising under any contract or similar obligation between the Company or any of its subsidiaries or affiliates and such Indemnitee; or
(j) in connection with any reimbursement made by Indemnitee to the Company pursuant to Section 304 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), Section 306 of the Sarbanes-Oxley Act or Section 954 of the Dodd–Frank Wall Street Reform and Consumer Protection Act and the rules promulgated by the SEC thereunder.
10. Insurance. To the extent that the Company maintains an insurance policy or policies providing liability insurance for directors, officers, employees, or agents or fiduciaries of the Company or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise that such person serves at the request of the Company, the Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any director, officer, employee, agent or fiduciary under such policy or policies. If, at the time of the receipt of a notice of a Proceeding pursuant to the terms hereof, the Company has directors’ and officers’ insurance in effect, the Company shall give prompt notice of the commencement of such Proceeding to the insurers in accordance with the procedures set forth in the respective policies. The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such Proceeding in accordance with the terms of such policies.
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11. No Employment Rights. Nothing in this Agreement is intended to create in the Indemnitee any right to continued employment with the Company.
12. Continuation of Indemnification. All agreements and obligations of the Company contained herein shall continue during the period that the Indemnitee is a director or an executive officer of the Company (or is or was serving at the request of the Company as an agent of another enterprise, foreign or domestic) and shall continue thereafter so long as the Indemnitee shall be subject to any Proceeding by reason of the fact that the Indemnitee is or was a director or an executive officer of the Company or is or was serving in any other capacity referred to in this Section 12.
13. Indemnification Hereunder Not Exclusive. The indemnification provided by this Agreement shall not be deemed to be exclusive of any other rights to which the Indemnitee may be entitled under the Articles, any agreement, vote of shareholders or vote of Disinterested Directors, provisions of applicable law, or otherwise, both as to action or omission in the Indemnitee’s official capacity and as to action or omission in another capacity on behalf of the Company while holding such office.
14. Contribution. To the fullest extent permissible under applicable law, if the indemnification provided for in this Agreement is unavailable to Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid or to be paid in settlement and/or for Expenses, in connection with any claim relating to an indemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable in light of all of the circumstances of such Proceeding in order to reflect (i) the relative benefits received by the Company and Indemnitee as a result of the event(s) and/or transaction(s) giving rise to such Proceeding; and/or (ii) the relative fault of the Company (and its directors, officers, employees and agents) and Indemnitee in connection with such event(s) and/or transaction(s). The relative fault of the Company on the one hand and of the Indemnitee on the other hand shall be determined by reference to, among other things, the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent the circumstances resulting in such judgments, fines, penalties, excise taxes, amounts paid or to be paid in settlement and/or for Expenses. The Company agrees that it would not be just and equitable if contribution pursuant to this Section 14 were determined by pro rata allocation or any other method of allocation which does not take account of the foregoing equitable considerations.
15. Entire Agreement. This Agreement and the documents referred to herein constitute the entire agreement between the parties hereto with respect to the matters covered hereby, and any other prior or contemporaneous oral or written understandings or agreements with respect to the matters covered hereby are superseded by this Agreement.
16. Amendment. This Agreement may not be modified or amended except by a written instrument executed by or on behalf of each of the parties hereto. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit, restrict or reduce any right of Indemnitee under this Agreement in respect of any act or omission, or any event occurring, prior to such amendment, alteration or repeal. To the extent that a change in applicable law, whether by statute or judicial decision limits rights with respect to indemnification, contribution or advancement of Expenses, it is the intent of the parties hereto that the rights with respect to indemnification, contribution or advancement of Expenses in effect prior to such change shall remain in full force and effect to the extent permitted by applicable law.
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17. Waivers. The observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively) by the party entitled to enforce such term only by a writing signed by the party against which such waiver is to be asserted. Unless otherwise expressly provided herein, no delay on the part of any party hereto in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any waiver on the part of any party hereto of any right, power or privilege hereunder operate as a waiver of any other right, power or privilege hereunder nor shall any single or partial exercise of any right, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder.
18. Assignment; Successors and Assigns. Neither this Agreement nor any of the rights or obligations hereunder may be assigned by either party thereto without the prior written consent of the other party, except that the Company may, without such consent, assign all such rights and obligations to a successor in interest to the Company which assumes all obligations of the Company under this Agreement in a written agreement in form and substance satisfactory to the Indemnitee. Notwithstanding the foregoing, this Agreement shall be binding upon and inure to the benefit of and be enforceable by and against the parties hereto and the Company’s successors (including any direct or indirect successor by purchase, merger, consolidation, or otherwise to all or substantially all of the business and/or assets of the Company) and assigns, as well as the Indemnitee’s spouses, heirs, and personal and legal representatives.
19. Notices. All notices, requests, demands and other communications under this Agreement shall be in writing (which may be by facsimile transmission or email). All such notices, requests and other communications shall be deemed received on the date of receipt by the recipient thereof if received prior to 5:00 p.m. in the place of receipt and such day is a business day in the place of receipt. Otherwise, any such notice, request or communication shall be deemed not to have been received until the next succeeding business day in the place of receipt. The address for notice to a party is as shown on the signature page of this Agreement, or such other address as any party shall have given by written notice to the other party as provided above.
20. Subrogation. In the event of payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of the Indemnitee, who shall execute all documents required and shall do all acts that may be necessary to secure such rights and to enable the Company effectively to bring suit to enforce such rights.
21. Severability. If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and shall remain enforceable to the fullest extent permitted by law; (b) such provision or provisions shall be deemed reformed to the extent necessary to conform to applicable law and to give the maximum effect to the intent of the parties hereto; and (c) to the fullest extent possible, the provisions of this Agreement (including each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby. To the extent required, any section, sentence, term or provision of this Agreement may be modified by a court of competent jurisdiction to preserve its validity and to provide the Indemnitee with the broadest possible indemnification permitted under applicable law. The Company’s inability, pursuant to a court order or decision, to perform its obligations under this Agreement shall not constitute a breach of this Agreement.
22. Governing Law. This Agreement and the legal relations among the parties shall be governed by, and construed and enforced in accordance with, the laws of the British Virgin Islands, without regard to its conflict of laws rules.
23. Headings. The Section headings in this Agreement are for convenience of reference only, and shall not be deemed to alter or affect the meaning or interpretation of any provisions hereof.
24. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement. Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence of this Agreement.
25. Use of Certain Terms. As used in this Agreement, the words “herein,” “hereof,” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular paragraph, subparagraph, section, subsection, or other subdivision. Whenever the context may require, any pronoun used in this Agreement shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns, pronouns and verbs shall include the plural and vice versa.
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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered to be effective as of the date first above written.
| CONCORDE INTERNATIONAL GROUP LTD | ||
| By: | ||
| Name: Swee Kheng Chua | ||
| Title: Chief Executive Officer | ||
| With a copy to: | ||
| Address: | ||
| Facsimile: | ||
| Attention: | ||
| INDEMNITEE | ||
| Name: | ||
| Title: | ||
Exhibit 10.2
CONCORDE INTERNATIONAL GROUP LTD
INDEPENDENT DIRECTOR AGREEMENT
THIS AGREEMENT (The “Agreement”) is made as of the _____ day of ____________, and is by and between Concorde International Group Ltd., a British Virgin Islands business company (hereinafter referred to as the “Company”), and __________________ (hereinafter referred to as the “Director”).
BACKGROUND
The Board of Directors of the Company desires to appoint the Director and to have the Director perform the duties of an independent director, subject to and upon effectiveness of the Form F-1 Registration Statement in connection with the Company’s initial public offering, and the Director desires to be so appointed for such position and to perform the duties required of such position in accordance with the terms and conditions of this Agreement.
AGREEMENT
In consideration for the above recited promises and the mutual promises contained herein, the adequacy and sufficiency of which are hereby acknowledged, the Company and the Director hereby agree as follows:
1. DUTIES. The Company requires that the Director be available to perform the duties of an independent director customarily related to this function as may be determined and assigned by the Board of Directors of the Company and as may be required by the Company’s constituent instruments, including its Memorandum and Articles of Association and its corporate governance and board committee charters, each as amended or modified from time to time, and by applicable law, including the BVI Business Companies Act, 2004 (as amended) (the “Act”). The Director agrees to devote as much time as is necessary to perform completely the duties as the Director of the Company, including duties as a member of the Audit Committee and such other committees as the Director may hereafter be appointed to. The Director will perform such duties described herein in accordance with the general fiduciary duty of directors arising under the Act.
2. TERM. The term of this Agreement shall commence as of the effectiveness of the Company’s Registration Statement on Form F-1 in connection with its initial public offering and shall continue until the Director’s removal or resignation.
3. COMPENSATION.
Following the commencement of the term of this Agreement, for all services to be rendered by the Director in any capacity hereunder, the Company agrees to compensate the Director a fee of $ per year in cash (the “Annual Fee”), which Annual Fee shall be paid to the Director in four equal installments no later than the seventh business day of each calendar quarter commencing in the first quarter following the date of this Agreement. The Director shall be responsible for his or her own individual income tax payment on the Annual Fee in jurisdictions where the Director resides.
In the event that the Director serves less than a full year on the Board, the Company shall only be obligated to pay the pro rata portion of such Annual Fee to the Director for his or her services performed during such year.
4. EXPENSES. In addition to the compensation provided in paragraph 3 hereof, the Company will reimburse the Director for pre-approved reasonable business related expenses incurred in good faith in the performance of the Director’s duties for the Company. Such payments shall be made by the Company upon submission by the Director of a signed statement itemizing the expenses incurred. Such statement shall be accompanied by sufficient documentary matter to support the expenditures.
5. CONFIDENTIALITY. The Company and the Director each acknowledge that, in order for the intents and purposes of this Agreement to be accomplished, the Director shall necessarily be obtaining access to certain confidential information concerning the Company and its affairs, including, but not limited to business methods, information systems, financial data and strategic plans which are unique assets of the Company (“Confidential Information”). The Director covenants not to, either directly or indirectly, in any manner, utilize or disclose to any person, firm, corporation, association or other entity any Confidential Information.
6. NON-COMPETE. During the term of this Agreement and for a period of twelve (12) months following the Director’s removal or resignation from the Board of Directors of the Company or any of its subsidiaries or affiliates (the “Restricted Period”), the Director shall not, without prior written consent of the Company, directly or indirectly, (i) provide the same or substantially the same services that he or she provides to the Company to any business competitive with the Company’s current lines of business or any business then engaged in by the Company in Singapore (the “Market Area”), any of its subsidiaries or any of its affiliates (the “Company’s Business”) for the Director’s own benefit or for the benefit of any person or entity other than the Company or any subsidiary or affiliate; or (ii) have any interest as owner, sole proprietor, shareholder, partner, lender, director, officer, manager, employee, consultant, agent or otherwise in any business competitive with the Company’s Business; provided, however, that the Director may hold, directly or indirectly, solely as an investment, not more than five percent (5%) of the outstanding securities of any person or entity which are listed on any national securities exchange or regularly traded in the over-the-counter market notwithstanding the fact that such person or entity is engaged in a business competitive with the Company’s Business. Should the Company expand geographically beyond the Market Area, the Director shall notify the Company in writing of any other services provided in those areas of the Company’s geographic expansion. In addition, during the Restricted Period, the Director shall not develop any property for use in the Company’s Business on behalf of any person or entity other than the Company, its subsidiaries and affiliates.
7. TERMINATION. With or without cause, the Company and the Director may each terminate this Agreement at any time upon ten (10) days written notice, and the Company shall be obligated to pay to the Director the compensation and expenses due up to the date of the termination. Nothing contained herein or omitted herefrom shall prevent the shareholder(s) of the Company from removing the Director with immediate effect at any time for any reason.
8. INDEMNIFICATION. The Company shall indemnify, defend and hold harmless the Director, to the full extent allowed by the law of the British Virgin Islands, and as provided by, or granted pursuant to, any charter provision, its Articles of Association, agreement (including, without limitation, the Indemnification Agreement executed herewith), vote of stockholders or disinterested directors or otherwise, both as to action in the Director’s official capacity and as to action in another capacity while holding such office. The Company and the Director are executing an indemnification agreement in the form attached hereto as Exhibit A.
9. EFFECT OF WAIVER. The waiver by either party of the breach of any provision of this Agreement shall not operate as or be construed as a waiver of any subsequent breach thereof.
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10. NOTICE. Any and all notices referred to herein shall be sufficient if furnished in writing at the addresses specified on the signature page hereto or, if to the Company, to the Company’s address as specified in filings made by the Company with the U.S. Securities and Exchange Commission .
11. GOVERNING LAW. This Agreement shall be interpreted in accordance with, and the rights of the parties hereto shall be determined by, the laws of the British Virgin Islands without reference to conflicts of laws principles.
12. ASSIGNMENT. The rights and benefits of the Company under this Agreement shall be transferable, and all the covenants and agreements hereunder shall inure to the benefit of, and be enforceable by or against, its successors and assigns. The duties and obligations of the Director under this Agreement are personal and therefore the Director may not assign any right or duty under this Agreement without the prior written consent of the Company.
13. D&O INSURANCE. The Company shall purchase and maintain D&O Insurance to insure the Director in respect of the Director’s appointment as a director of the Company, throughout the term of this Agreement, until the Director’s removal or resignation, to the extent that such insurance can be obtained on such terms as required under the underwriting agreement to be entered into among the Company and its underwriters upon the effectiveness of the Company’s Registration Statement on Form F-1 in connection with the Company’s initial public offering.
14. MISCELLANEOUS. If any provision of this Agreement shall be declared invalid or illegal, for any reason whatsoever, then, notwithstanding such invalidity or illegality, the remaining terms and provisions of this Agreement shall remain in full force and effect in the same manner as if the invalid or illegal provision had not been contained herein.
15. ARTICLE HEADINGS. The article headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.
16. COUNTERPARTS. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one instrument. Facsimile execution and delivery of this Agreement is legal, valid and binding for all purposes.
17. ENTIRE AGREEMENT. Except as provided elsewhere herein, this Agreement sets forth the entire agreement of the parties with respect to its subject matter and supersedes all prior agreements, promises, covenants, arrangements, communications, representations or warranties, whether oral or written, by any officer, employee or representative of any party to this Agreement with respect to such subject matter.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties hereto have caused this Independent Director Agreement to be duly executed and signed as of the day and year first above written.
| CONCORDE INTERNATIONAL GROUP LTD | ||
| By: | ||
| Name: | Swee Kheng Chua | |
| Title: | Chief Executive Officer | |
| Independent Director | ||
| Name: | ||
| Address: | ||
EXHIBIT A
Form of Indemnification Agreement
(See Attached)
Exhibit 10.4
Exhibit 10.5
Exhibit 10.6
CONCORDE INTERNATIONAL GROUP LTD
2024 EQUITY INCENTIVE PLAN
1. Purpose; Eligibility.
1.1. General Purpose. The name of this plan is Concorde International Group Ltd 2024 Equity Incentive Plan (the “Plan”). The purposes of the Plan are to (a) promote the long-term growth and profitability of Concorde International Group Ltd, a British Virgin Islands business company (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.
1.2. Eligible Award Recipients. The persons eligible to receive Awards are the Employees, Consultants and Directors of the Company and its Affiliates and such other individuals designated by the Committee who are reasonably expected to become Employees, Consultants and Directors after the receipt of Awards.
1.3. Available Awards. Awards that may be granted under the Plan include: (a) Incentive Share Options, (b) Non-qualified Share Options, (c) Share Appreciation Rights, (d) Restricted Awards, (e) Performance Share Awards, (f) Performance Compensation Awards, and other share-based Awards as the Committee may determine.
2. Definitions.
“Affiliate” means a company, corporation or other entity that, directly or through one or more intermediaries, controls, is controlled by or is under common control with, the Company, including, without limitation, any company, corporation or other entity that is a “parent corporation” or a “subsidiary corporation” with respect to the Company within the meaning of Section 424(e) or (f) of the Code, and any other non-corporate entity that would be such a subsidiary corporation if such entity were a corporation.
“Applicable Laws” means (i) laws of British Virgin Islands as they relate to the Company and its Ordinary Shares, (ii) the legal requirements relating to the Plan and the Awards under applicable provisions of the corporate, securities, tax and other laws, rules, regulations and government orders; and (iii) the rules of any applicable stock exchange, of any jurisdiction applicable to Awards granted to residents therein.
“Award” means any right granted under the Plan, including an Incentive Share Option, a Non- qualified Share Option, a Share Appreciation Right, a Restricted Award, a Performance Share Award or a Performance Compensation Award.
“Award Agreement” means a written agreement, contract, certificate or other instrument or document evidencing the terms and conditions of an individual Award granted under the Plan which may, in the discretion of the Company, be transmitted electronically to any Participant. Each Award Agreement shall be subject to the terms and conditions of the Plan.
“Beneficial Owner” has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the beneficial ownership of any particular “person” (as that term is used in Section 13(d)(3) of the Exchange Act), such “person” shall be deemed to have beneficial ownership of all securities that such “person” has the right to acquire by conversion or exercise of other securities, whether such right is currently exercisable or is exercisable only after the passage of time. The terms “Beneficially Owns” and “Beneficially Owned” have a corresponding meaning.
“Board” means the Board of Directors of the Company, as constituted at any time.
“Cause” means:
With respect to any Employee or Consultant: (a) if the Employee or Consultant is a party to an employment or service agreement with the Company or its Affiliates and such agreement provides for a definition of Cause, the definition contained therein; or (b) if no such agreement exists, or if such agreement does not define Cause: (i) the commission of, or plea of guilty or no contest to, a felony or a crime involving moral turpitude or the commission of any other act involving willful malfeasance or material fiduciary breach with respect to the Company or an Affiliate; (ii) conduct that results in or is reasonably likely to result in harm to the reputation or business of the Company or any of its Affiliates; (iii) gross negligence or willful misconduct with respect to the Company or an Affiliate; or (iv) material violation of state or federal securities laws.
With respect to any Director, a determination by a majority of the disinterested Board members that the Director has engaged in any of the following: (a) malfeasance in office; (b) gross misconduct or neglect; (c) false or fraudulent misrepresentation inducing the director’s appointment; (d) willful conversion of corporate funds; or (e) repeated failure to participate in Board meetings on a regular basis despite having received proper notice of the meetings in advance.
The Committee, in its absolute discretion, shall determine the effect of all matters and questions relating to whether a Participant has been discharged for Cause.
“Change in Control” means (a) the direct or indirect sale, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the properties or assets of the Company and its subsidiaries, taken as a whole, to any Person that is not a subsidiary of the Company; (b) the Incumbent Directors cease for any reason to constitute at least a majority of the Board; (c) the date which is 10 business days prior to the consummation of a complete liquidation or dissolution of the Company; (d) the acquisition by any person of beneficial ownership of more than 50% (on a fully diluted basis) of the combined voting power of the then issued and outstanding voting securities of the Company entitled to vote generally in the election of directors, taking into account as issued and outstanding for this purpose Ordinary Shares issuable upon the exercise of options or warrants, the conversion of convertible share or debt, and the exercise of any similar right to acquire Ordinary Shares (the “Outstanding Company Voting Securities”); provided, however, that for purposes of this Plan, the following acquisitions shall not constitute a Change in Control: (A) any acquisition by the Company or any Affiliate, (B) any acquisition by any employee benefit plan sponsored or maintained by the Company or any subsidiary, (C) any acquisition which complies with clauses, (i), (ii) and (iii) of subsection (e) of this definition or (D) in respect of an Award held by a particular Participant, any acquisition by the Participant or any group of persons including the Participant (or any entity controlled by the Participant or any group of persons including the Participant); or (e) the consummation of a reorganization, merger, consolidation, statutory share exchange or similar form of corporate transaction involving the Company that requires the approval of the Company’s shareholders, whether for such transaction or the issuance of securities in the transaction (a “Business Combination”), unless immediately following such Business Combination: (i) more than 50% of the total voting power of (A) the entity resulting from such Business Combination (the “Surviving Company”), or (B) if applicable, the ultimate parent entity that directly or indirectly has beneficial ownership of sufficient voting securities eligible to elect a majority of the members of the board of directors (or the analogous governing body) of the Surviving Company (the “Parent Company”), is represented by the Outstanding Company Voting Securities that were outstanding immediately prior to such Business Combination (or, if applicable, is represented by shares into which the Outstanding Company Voting Securities were converted pursuant to such Business Combination), and such voting power among the holders thereof is in substantially the same proportion as the voting power of the Outstanding Company Voting Securities among the holders thereof immediately prior to the Business Combination; (ii) no Person (other than any employee benefit plan sponsored or maintained by the Surviving Company or the Parent Company) is or becomes the Beneficial Owner, directly or indirectly, of 50% or more of the total voting power of the outstanding voting securities eligible to elect members of the board of directors of the Parent Company (or the analogous governing body) (or, if there is no Parent Company, the Surviving Company); and (iii) at least a majority of the members of the board of directors (or the analogous governing body) of the Parent Company (or, if there is no Parent Company, the Surviving Company) following the consummation of the Business Combination were Board members at the time of the Board’s approval of the execution of the initial agreement providing for such Business Combination. The foregoing notwithstanding, if the Award constitutes non-qualified deferred compensation under Section 409A of the Code, in no event shall a Change in Control be deemed to have occurred unless such change shall satisfy the definition of a change in control under Section 409A of the Code.
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“Class A Ordinary Shares” means Class A Ordinary Shares of the Company, with par value US$0.00001 per share, and as adjusted from time to time (and any shares or other securities into which such Class A Ordinary Shares may be converted or into which they may be exchanged).
“Code” means the Internal Revenue Code of 1986, as amended, and any successor thereto. References in this Plan to any section of the Code shall be deemed to include any regulations or other interpretative guidance under such section, and any amendments or successor provisions to such section, regulations or guidance.
“Committee” means the compensation committee of the Board, or if no such committee has been established, the full Board, or a committee of one or more members appointed to administer the Plan in accordance with Section 3.3 and Section 3.4.
“Consultant” means any individual who is engaged by the Company or any Affiliate to render consulting or advisory services.
“Continuous Service” means that the Participant’s service with the Company or an Affiliate, whether as an Employee, Consultant or Director, is not interrupted or terminated. The Participant’s Continuous Service shall not be deemed to have terminated merely because of a change in the capacity in which the Participant renders service to the Company or an Affiliate as an Employee, Consultant or Director or a change in the entity for which the Participant renders such service, provided that there is no interruption or termination of the Participant’s Continuous Service; provided further that if any Award is subject to Section 409A of the Code, this sentence shall only be given effect to the extent consistent with Section 409A of the Code. For example, a change in status from an Employee of the Company to a Director of an Affiliate will not constitute an interruption of Continuous Service unless otherwise required by Section 409A of the Code. The Committee or its delegate, in its sole discretion, may determine whether Continuous Service shall be considered interrupted in the case of any leave of absence approved by that party, including sick leave, military leave or any other personal or family leave of absence.
“Director” means a member of the Board.
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“Disability” means that the Participant is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment; provided, however, for purposes of determining the term of an Incentive Share Option pursuant to Section 6.10 hereof, the term Disability shall have the meaning ascribed to it under Section 22(e)(3) of the Code. The determination of whether an individual has a Disability shall be determined under procedures established by the Committee. Except in situations where the Committee is determining Disability for purposes of the term of an Incentive Share Option pursuant to Section 6.10 hereof within the meaning of Section 22(e)(3) of the Code, the Committee may rely on any determination that a Participant is disabled for purposes of benefits under any long-term disability plan maintained by the Company or any Affiliate in which a Participant participates. The foregoing notwithstanding, if the Award is subject to Section 409A of the Code, in no event shall a Disability be deemed to have occurred unless such disability satisfies the requirements of Section 409A of the Code.
“Effective Date” shall mean the date when the Plan has been approved and adopted by the Board of Directors of the Company.
“Employee” means any person, including an Officer or Director, employed by the Company or an Affiliate; provided, that, for purposes of determining eligibility to receive Incentive Share Options, an Employee shall mean an employee of the Company or a parent or subsidiary corporation within the meaning of Section 424 of the Code. Mere service as a Director or payment of a director’s fee by the Company or an Affiliate shall not be sufficient to constitute “employment” by the Company or an Affiliate.
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Fair Market Value” means, as of any date, the value of the Class A Ordinary Share as determined below:
(i) If the Class A Ordinary Share is listed on any established stock exchange or a national market system, including without limitation, the Nasdaq Capital Market or the NYSE American, its Fair Market Value will be the closing sales price for such share (or the closing bid, if no sales were reported) as quoted on such exchange or system for the last market trading day on or prior to the date of determination, as reported in The Wall Street Journal or such other source as the Committee deems reliable;
(ii) If the Class A Ordinary Share is regularly quoted by a recognized securities dealer but selling prices are not reported, the Fair Market Value of one Class A Ordinary Share will be the mean between the high bid and low asked prices for the Class A Ordinary Share for the last market trading day on or prior to the date of determination, as reported in The Wall Street Journal or such other source as the Committee deems reliable; or
(iii) In the absence of an established market for the Class A Ordinary Share, the Fair Market Value shall be determined in good faith by the Committee and such determination shall be conclusive and binding on all persons; provided that if an Award is subject to Section 409A of the Code, then the Fair Market Value shall be determined in accordance with Section 409A of the Code.
Notwithstanding the preceding, for federal, state, and local income tax reporting purposes and for such other purposes as the Committee deems appropriate, the Fair Market Value shall be determined by the Committee in accordance with uniform and nondiscriminatory standards adopted by it from time to time.
“Grant Date” means the date on which the Board adopts a resolution, or takes other appropriate action, expressly granting an Award to a Participant that specifies the key terms and conditions of the Award or, if a later date is set forth in such resolution, then such date as is set forth in such resolution.
“Incentive Share Option” means an Option that is designated by the Committee as an Incentive Share Option as described in Section 422 of the Code and otherwise meets the requirements set forth in this Plan.
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“Incumbent Directors” means individuals who, on the Effective Date, constitute the Board, provided that any individual becoming a Director subsequent to the Effective Date whose election or nomination for election to the Board was approved by a vote of at least two-thirds of the Incumbent Directors then on the Board (either by a specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee for Director without objection to such nomination) or duly appointed under the articles of association of the Company shall be an Incumbent Director. No individual initially elected or nominated as a director of the Company as a result of an actual or threatened election contest with respect to Directors or as a result of any other actual or threatened solicitation of proxies by or on behalf of any person other than the Board shall be an Incumbent Director.
“Non-qualified Share Option” means an Option that by its terms does not qualify or is not intended to qualify as an Incentive Share Option.
“Officer” means a person who is an officer of the Company within the meaning of Section 16 of the Exchange Act and the rules and regulations promulgated thereunder.
“Option” means an Incentive Share Option or a Non-qualified Share Option granted pursuant to the Plan.
“Optionholder” means a person to whom an Option is granted pursuant to the Plan or, if applicable, such other person who holds an outstanding Option.
“Ordinary Share” means the Ordinary Shares of the Company, and as adjusted from time to time (and any shares or other securities into which such Ordinary Shares may be converted or into which they may be exchanged), 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 Plan, there are zero Class A Ordinary Shares and 20,888,886 Class B Ordinary Shares issued and outstanding.
“Option Exercise Price” means the price at which one Class A Ordinary Share may be purchased upon the exercise of an Option.
“Participant” means an eligible person to whom an Award is granted pursuant to the Plan or, if applicable, such other person who holds an outstanding Award.
“Performance Compensation Award” means any Award designated by the Committee as a Performance Compensation Award pursuant to Section 7.4 of the Plan.
“Performance Criteria” means the criterion or criteria that the Committee shall select for purposes of establishing the Performance Goal(s) for a Performance Period with respect to any Performance Compensation Award under the Plan. The Performance Criteria that will be used to establish the Performance Goal(s) shall be based on the attainment of specific levels of performance of the Company (or Affiliate, division, business unit or operational unit of the Company) and may include the following: (a) net earnings or net income (before or after taxes); (b) basic or diluted earnings per share (before or after taxes); (c) net revenue or net revenue growth; (d) gross revenue; (e) gross profit or gross profit growth; (f) net operating profit (before or after taxes); (g) return on assets, capital, invested capital, equity, or sales; (h) cash flow (including, but not limited to, operating cash flow, free cash flow, and cash flow return on capital); (i) earnings before or after taxes, interest, depreciation and/or amortization; (j) gross or operating margins; (k) improvements in capital structure; (l) budget and expense management; (m) productivity ratios; (n) economic value added or other value added measurements; (o) share price (including, but not limited to, growth measures and total shareholder return); (p) expense targets; (q) margins; (r) operating efficiency; (s) working capital targets; (t) enterprise value; (u) safety record; (v) completion of acquisitions or business expansion; (w) achieving research and development goals and milestones; (x) achieving product commercialization goals; and (y) other criteria as may be set by the Committee from time to time.
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Any one or more of the Performance Criteria may be used on an absolute or relative basis to measure the performance of the Company and/or an Affiliate as a whole or any division, business unit or operational unit of the Company and/or an Affiliate or any combination thereof, as the Committee may deem appropriate, or as compared to the performance of a group of comparable companies, or published or special index that the Committee, in its sole discretion, deems appropriate, or the Committee may select Performance Criterion (o) above as compared to various stock market indices. The Committee also has the authority to provide for accelerated vesting of any Award based on the achievement of Performance Goals pursuant to the Performance Criteria specified in this paragraph, provided that if the Award is subject to Section 409A of the Code, such accelerated vesting does not violate the rules of Code Section 409A. The Committee shall, within the first 90 days of a Performance Period (or, such longer or shorter time period as the Committee shall determine) define in an objective fashion the manner of calculating the Performance Criteria it selects to use for such Performance Period. In the event that applicable tax and/or securities laws change to permit the Committee discretion to alter the governing Performance Criteria without obtaining shareholder approval of such changes, the Committee shall have sole discretion to make such changes without obtaining shareholder approval.
“Performance Formula” means, for a Performance Period, the one or more objective formulas applied against the relevant Performance Goal to determine, with regard to the Performance Compensation Award of a particular Participant, whether all, some portion but less than all, or none of the Performance Compensation Award has been earned for the Performance Period.
“Performance Goals” means, for a Performance Period, the one or more goals established by the Committee for the Performance Period based upon the Performance Criteria. The Committee is authorized at any time during the first 90 days of a Performance Period (or such longer or shorter time period as the Committee shall determine) or at any time thereafter, in its sole and absolute discretion, to adjust or modify the calculation of a Performance Goal for such Performance Period in order to prevent the dilution or enlargement of the rights of Participants based on the following events: (a) asset write-downs; (b) litigation or claim judgments or settlements; (c) the effect of changes in tax laws, accounting principles, or other laws or regulatory rules affecting reported results; (d) any reorganization and restructuring programs; (e) extraordinary nonrecurring items as described in Accounting Principles Board Opinion No. 30 (or any successor or pronouncement thereto) and/or in management’s discussion and analysis of financial condition and results of operations appearing in the Company’s annual report to shareholders for the applicable year; (f) acquisitions or divestitures; (g) any other specific unusual or nonrecurring events, or objectively determinable category thereof; (h) foreign exchange gains and losses; and (i) a change in the Company’s fiscal year.
“Performance Period” means the one or more periods of time not less than one fiscal quarter in duration, as the Committee may select, over which the attainment of one or more Performance Goals will be measured for the purpose of determining a Participant’s right to and the payment of a Performance Compensation Award.
“Performance Share” means the grant of a right to receive a number of actual Class A Ordinary Shares or share units based upon the performance of the Company during a Performance Period, as determined by the Committee.
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“Permitted Transferee” means: (a) a member of the Optionholder’s immediate family (child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including adoptive relationships), any person sharing the Optionholder’s household (other than a tenant or employee), a trust in which these persons have more than 50% of the beneficial interest, a foundation in which these persons (or the Optionholder) control the management of assets, and any other entity in which these persons (or the Optionholder) own more than 50% of the voting interests; (b) third parties designated by the Committee in connection with a program established and approved by the Committee pursuant to which Participants may receive a cash payment or other consideration in consideration for the transfer of a Non- qualified Share Option; and (c) such other transferees as may be permitted by the Committee in its sole discretion.
“Restricted Award” means any Award granted pursuant to Section 7.2(a).
“Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act or any successor to Rule 16b-3, as in effect from time to time.
“Securities Act” means the Securities Act of 1933, as amended.
“Share Appreciation Right” means the right pursuant to an Award granted under Section 7.1 to receive, upon exercise, an amount payable in cash or shares equal to the number of shares subject to the Share Appreciation Right that is being exercised multiplied by the excess of (a) the Fair Market Value of Class A Ordinary Shares on the date the Award is exercised, over (b) the exercise price specified in the Share Appreciation Right Award Agreement.
“Ten Percent Shareholder” means a person who owns (or is deemed to own pursuant to Section 424(d) of the Code) shares possessing more than 10% of the total combined voting power of all classes of shares of the Company or of any of its Affiliates.
3. Administration.
3.1. Authority of Committee. The Plan shall be administered by the Committee or, in the Board’s sole discretion, by the Board. Subject to the terms of the Plan and the provisions of Section 409A of the Code (if applicable), the Committee’s charter and Applicable Laws, and in addition to other express powers and authorization conferred by the Plan, the Committee (or, failing whom, the Board) shall have the authority:
(a) to construe and interpret the Plan and apply its provisions;
(b) to promulgate, amend, and rescind rules and regulations relating to the administration of the Plan;
(c) to authorize any person to execute, on behalf of the Company, any instrument required to carry out the purposes of the Plan;
(d) to delegate its authority to one or more Officers of the Company with respect to Awards that do not involve “insiders” within the meaning of Section 16 of the Exchange Act;
(e) to determine when Awards are to be granted under the Plan and the applicable Grant Date;
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(f) from time to time to select, subject to the limitations set forth in this Plan, those Participants to whom Awards shall be granted;
(g) to determine the number of Class A Ordinary Shares to be made subject to each Award;
(h) to determine whether each Option is to be an Incentive Share Option or a Non-qualified Share Option;
(i) to prescribe the terms and conditions of each Award, including, without limitation, the exercise price and medium of payment and vesting provisions, and to specify the provisions of the Award Agreement relating to such grant;
(j) to determine the target number of Performance Shares to be granted pursuant to a Performance Share Award, the performance measures that will be used to establish the performance goals, the performance period(s) and the number of Performance Shares earned by a Participant;
(k) to designate an Award (including a cash bonus) as a Performance Compensation Award and to select the Performance Criteria that will be used to establish the Performance Goals;
(l) to amend any outstanding Awards, including for the purpose of modifying the time or manner of vesting, or the term of any outstanding Award; provided, however, that if any such amendment impairs a Participant’s rights or increases a Participant’s obligations under his or her Award or creates or increases a Participant’s federal income tax liability with respect to an Award, such amendment shall also be subject to the Participant’s consent;
(m) to determine the duration and purpose of leaves of absences which may be granted to a Participant without constituting termination of their employment for purposes of the Plan, which periods shall be no shorter than the periods generally applicable to Employees under the Company’s employment policies;
(n) to make decisions with respect to outstanding Awards that may become necessary upon a change in corporate control or an event that triggers anti-dilution adjustments;
(o) to interpret, administer, reconcile any inconsistency in, correct any defect in and/or supply any omission in the Plan and any instrument or agreement relating to, or Award granted under, the Plan; and
(p) to exercise discretion to make any and all other determinations which it determines to be necessary or advisable for the administration of the Plan.
The Committee also may modify the purchase price or the exercise price of any outstanding Award, provided that if the modification effects a repricing of all outstanding Awards, shareholder approval shall be required before the repricing is effective.
3.2. Committee Decisions Final. All decisions made by the Committee pursuant to the provisions of the Plan shall be final and binding on the Company and the Participants, unless such decisions are determined by a court having jurisdiction to be arbitrary and capricious.
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3.3. Delegation. The Committee may delegate administration of the Plan to a subcommittee or subcommittees of one or more members of the Committee, and the term “Committee” shall apply to any person or persons to whom such authority has been delegated. The Committee shall have the power to delegate to a subcommittee any of the administrative powers the Committee is authorized to exercise (and references in this Plan to the Board or the Committee shall thereafter be to the committee or subcommittee), subject, however, to such resolutions, not inconsistent with the provisions of the Plan, as may be adopted from time to time by the Board. The Board may abolish the Committee at any time and re-vest in the Board the administration of the Plan. The members of the Committee shall be appointed by and serve at the pleasure of the Board. From time to time, the Board may increase or decrease the size of the Committee, add additional members to, remove members (with or without cause) from, appoint new members in substitution therefor, and fill vacancies, however caused, in the Committee. The Committee shall act pursuant to a vote of the majority of its members or, in the case of a Committee comprised of only two members, the unanimous consent of its members, whether present or not, or by the written consent of the majority of its members and minutes shall be kept of all of its meetings and copies thereof shall be provided to the Board. Subject to the limitations prescribed by the Plan and the Board, the Committee may establish and follow such rules and regulations for the conduct of its business as it may determine to be advisable.
3.4. Committee Composition. Except as otherwise determined by the Board, the Committee shall consist of a majority of non-employee directors. The Board shall have the discretion to determine whether or not it intends to comply with the exemption requirements of Rule 16b-3. However, if the Board intends to satisfy such exemption requirements, with respect to Awards to any insider subject to Section 16 of the Exchange Act, the Committee shall be a compensation committee of the Board that at all times consists solely of two or more non-employee directors. Within the scope of such authority, the Board or the Committee may delegate to a committee of one or more members of the Board who are not non-employee directors the authority to grant Awards to eligible persons who are not then subject to Section 16 of the Exchange Act. Nothing herein shall create an inference that an Award is not validly granted under the Plan in the event Awards are granted under the Plan by a compensation committee of the Board that does not at all times consist solely of two or more non-employee directors.
3.5. Indemnification. In addition to such other rights of indemnification as they may have as Directors or members of the Committee, and to the extent allowed by Applicable Laws, the Committee shall be indemnified by the Company against the reasonable expenses, including attorney’s fees, actually incurred in connection with any action, suit or proceeding or in connection with any appeal therein, to which the Committee may be party by reason of any action taken or failure to act under or in connection with the Plan or any Award granted under the Plan, and against all amounts paid by the Committee in settlement thereof (provided, however, that the settlement has been approved by the Company, which approval shall not be unreasonably withheld) or paid by the Committee in satisfaction of a judgment in any such action, suit or proceeding, except in relation to matters as to which it shall be adjudged in such action, suit or proceeding that such Committee did not act in good faith and in a manner which such person reasonably believed to be in the best interests of the Company, or in the case of a criminal proceeding, had no reason to believe that the conduct complained of was unlawful; provided, however, that within 60 days after institution of any such action, suit or proceeding, such Committee shall, in writing, offer the Company the opportunity at its own expense to handle and defend such action, suit or proceeding.
4. Shares Subject to the Plan.
4.1. Subject to adjustment in accordance with Section 11, an aggregate number of Class A Ordinary Shares that may be reserved for the grant of Awards under the Plan as may be determined, in its sole and absolute discretion, by the Committee or the board of directors of the Company, 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. Class A Ordinary Shares granted in connection with all Awards under the Plan shall be counted against this limit as one (1) Class A Ordinary Share for every one (1) Class A Ordinary Share granted in connection with such Award. During the terms of the Awards, the Company shall keep available at all times the number of Class A Ordinary Shares required to satisfy such Awards.
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4.2. Class A Ordinary Shares available for distribution under the Plan may consist, in whole or in part, of authorized and unissued shares, treasury shares or shares reacquired by the Company in any manner.
4.3. Any Class A Ordinary Shares subject to an Award that is canceled, forfeited or expired prior to exercise or realization, either in full or in part, shall again become available for issuance under the Plan. Any Class A Ordinary Shares that again become available for future grants pursuant to this Section 4.3 shall be added back as one (1) share. Notwithstanding anything to the contrary contained herein: shares subject to an Award under the Plan shall not again be made available for issuance or delivery under the Plan if such shares are (a) shares tendered in payment of an Option, (b) shares delivered or withheld by the Company to satisfy any tax withholding obligation, or (c) shares covered by a share-settled Share Appreciation Right or other Awards that were not issued upon the settlement of the Award.
5. Eligibility.
5.1. Eligibility for Specific Awards. Incentive Share Options may be granted only to Employees. Awards other than Incentive Share Options may be granted to Employees, Consultants and Directors and those individuals whom the Committee determines are reasonably expected to become Employees, Consultants and Directors following the Grant Date.
5.2. Ten Percent Shareholders. 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.
6. Option Provisions. Each Option granted under the Plan shall be evidenced by an Award Agreement. Each Option so granted shall be subject to the conditions set forth in this Section 6, and to such other conditions not inconsistent with the Plan as may be reflected in the applicable Award Agreement. All Options shall be separately designated Incentive Share Options or Non-qualified Share Options at the time of grant, and, if certificates are issued, a separate certificate or certificates will be issued for Class A Ordinary Shares purchased on exercise of each type of Option. Notwithstanding the foregoing, the Company shall have no liability to any Participant or any other person if an Option designated as an Incentive Share Option fails to qualify as such at any time or if an Option is determined to constitute “nonqualified deferred compensation” within the meaning of Section 409A of the Code and the terms of such Option do not satisfy the requirements of Section 409A of the Code. The provisions of separate Options need not be identical, but each Option shall include (through incorporation of provisions hereof by reference in the Option or otherwise) the substance of each of the following provisions:
6.1. Term. Subject to the provisions of Section 5.2 regarding Ten Percent Shareholders, no Incentive Share Option shall be exercisable after the expiration of 10 years from the Grant Date. 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.
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6.2. Exercise Price of An Incentive Share Option. Subject to the provisions of Section 5.2 regarding Ten Percent Shareholders, the Option Exercise Price of each Incentive Share Option shall be not less than 100% of the Fair Market Value of the Class A Ordinary Share subject to the Option on the Grant Date. Notwithstanding the foregoing, an Incentive Share Option may be granted with an Option Exercise Price lower than that set forth in the preceding sentence if such Option is granted pursuant to an assumption or substitution for another option in a manner satisfying the provisions of Section 424(a) of the Code. In no event may the Option Exercise Price of an Incentive Share Option be less than the par value of any Class A Ordinary Share.
6.3. Exercise Price of a Non-qualified Share Option. The Option Exercise Price of each Non-qualified Share Option shall be not less than 100% of the Fair Market Value of the Class A Ordinary Share subject to the Option on the Grant Date. Notwithstanding the foregoing, a Non-qualified Share Option may be granted with an Option Exercise Price lower than that set forth in the preceding sentence if such Option is granted pursuant to an assumption or substitution for another option in a manner satisfying the provisions of Section 409A of the Code. In no event may the Option Exercise Price of a Non-qualified Share Option be less than the par value of any Class A Ordinary Share.
6.4. Consideration. The Option Exercise Price of Class A Ordinary Share acquired pursuant to an Option shall be paid, to the extent permitted by applicable statutes and regulations, either (a) in cash or by certified or bank check at the time the Option is exercised or (b) in the discretion of the Committee, upon such terms as the Committee shall approve, the Option Exercise Price may be paid: (i) by delivery to the Company of other Class A Ordinary Share, duly endorsed for transfer to the Company, with a Fair Market Value on the date of delivery equal to the Option Exercise Price (or portion thereof) due for the number of shares being acquired, or by means of attestation whereby the Participant identifies for delivery specific Class A Ordinary Shares that have an aggregate Fair Market Value on the date of attestation equal to the Option Exercise Price (or portion thereof) and receives a number of Class A Ordinary Shares equal to the difference between the number of shares thereby purchased and the number of identified attestation Class A Ordinary Shares; (ii) a “cashless” exercise program established with a broker; (iii) by reduction in the number of Class A Ordinary Shares otherwise deliverable upon exercise of such Option with a Fair Market Value equal to the aggregate Option Exercise Price at the time of exercise; (iv) any combination of the foregoing methods; or (v) in any other form of legal consideration that may be acceptable to the Committee. Unless otherwise specifically provided in the Option, the exercise price of Class A Ordinary Share acquired pursuant to an Option that is paid by delivery (or attestation) to the Company of other Class A Ordinary Share acquired, directly or indirectly from the Company, shall be paid only by Class A Ordinary Shares of the Company that have been held for more than six months (or such longer or shorter period of time required to avoid a charge to earnings for financial accounting purposes). Notwithstanding the foregoing, during any period for which the Class A Ordinary Share is publicly traded (i.e., the Class A Ordinary Share is listed on any established stock exchange or a national market system) an exercise by a Director or Officer that involves or may involve a direct or indirect extension of credit or arrangement of an extension of credit by the Company, directly or indirectly, in violation of Section 402(a) of the Sarbanes-Oxley Act of 2002 shall be prohibited with respect to any Award under this Plan.
6.5. Transferability of An Incentive Share Option. An Incentive Share Option shall not be transferable except by will or by the laws of descent and distribution and shall be exercisable during the lifetime of the Optionholder only by the Optionholder. Notwithstanding the foregoing, the Optionholder may, by delivering written notice to the Company, in a form satisfactory to the Company, designate a third party who, in the event of the death of the Optionholder, shall thereafter be entitled to exercise the Option.
6.6. Transferability of a Non-qualified Share Option. A Non-qualified Share Option may, in the sole discretion of the Committee, be transferable to a Permitted Transferee, upon written approval by the Committee to the extent provided in the Award Agreement. If the Non-qualified Share Option does not provide for transferability, then the Non-qualified Share Option shall not be transferable except by will or by the laws of descent and distribution and shall be exercisable during the lifetime of the Optionholder only by the Optionholder. Notwithstanding the foregoing, the Optionholder may, by delivering written notice to the Company, in a form satisfactory to the Company, designate a third party who, in the event of the death of the Optionholder, shall thereafter be entitled to exercise the Option.
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6.7. Vesting of Options. Each Option may, but need not, vest and therefore become exercisable in periodic installments that may, but need not, be equal. The Option may be subject to such other terms and conditions on the time or times when it may be exercised (which may be based on performance or other criteria) as the Committee may deem appropriate. The vesting provisions of individual Options may vary. No Option may be exercised for a fraction of a Class A Ordinary Share. The Committee may, but shall not be required to, provide for an acceleration of vesting and exercisability in the terms of any Award Agreement upon the occurrence of a specified event, provided that if such Award is subject to Section 409A of the Code, such acceleration of vesting and exercisability complies with the provisions of Section 409A of the Code.
6.8. Termination of Continuous Service. Unless otherwise provided in an Award Agreement or in an employment agreement the terms of which have been approved by the Committee, in the event an Optionholder’s Continuous Service terminates (other than upon the Optionholder’s death or Disability), the Optionholder may exercise his or her Option (to the extent that the Optionholder was entitled to exercise such Option as of the date of termination) but only within such period of time ending on the earlier of (a) the date three months following the termination of the Optionholder’s Continuous Service or (b) the expiration of the term of the Option as set forth in the Award Agreement; provided that, if the termination of Continuous Service is by the Company for Cause, all outstanding Options (whether or not vested) shall immediately terminate and cease to be exercisable. If, after termination, the Optionholder does not exercise his or her Option within the time specified in the Award Agreement, the Option shall terminate.
6.9. Extension of Termination Date. An Optionholder’s Award Agreement may also provide that if the exercise of the Option following the termination of the Optionholder’s Continuous Service for any reason would be prohibited at any time because the issuance of Class A Ordinary Shares would violate the registration requirements under the Securities Act or any other state or federal securities law or the rules of any securities exchange or interdealer quotation system, then the Option shall terminate on the earlier of (a) the expiration of the term of the Option in accordance with Section 6.1 or (b) the expiration of a period after termination of the Participant’s Continuous Service that is three months after the end of the period during which the exercise of the Option would be in violation of such registration or other securities law requirements.
6.10. Disability of Optionholder. Unless otherwise provided in an Award Agreement, in the event that an Optionholder’s Continuous Service terminates as a result of the Optionholder’s Disability, the Optionholder may exercise his or her Option (to the extent that the Optionholder was entitled to exercise such Option as of the date of termination), but only within such period of time ending on the earlier of (a) the date 12 months following such termination or (b) the expiration of the term of the Option as set forth in the Award Agreement. If, after termination, the Optionholder does not exercise his or her Option within the time specified herein or in the Award Agreement, the Option shall terminate.
6.11. Death of Optionholder. Unless otherwise provided in an Award Agreement, in the event an Optionholder’s Continuous Service terminates as a result of the Optionholder’s death, then the Option may be exercised (to the extent the Optionholder was entitled to exercise such Option as of the date of death) by the Optionholder’s estate, by a person who acquired the right to exercise the Option by bequest or inheritance or by a person designated to exercise the Option upon the Optionholder’s death, but only within the period ending on the earlier of (a) the date 12 months following the date of death or (b) the expiration of the term of such Option as set forth in the Award Agreement. If, after the Optionholder’s death, the Option is not exercised within the time specified herein or in the Award Agreement, the Option shall terminate.
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6.12. Incentive Share Option $100,000 Limitation. To the extent that the aggregate Fair Market Value (determined at the time of grant) of Class A Ordinary Share with respect to which Incentive Share Options are exercisable for the first time by any Optionholder during any calendar year (under all plans of the Company and its Affiliates) exceeds $100,000, the Options or portions thereof which exceed such limit (according to the order in which they were granted) shall be treated as Non-qualified Share Options.
7. Provisions of Awards Other Than Options.
7.1. Share Appreciation Rights.
(a) General. Each Share Appreciation Right granted under the Plan shall be evidenced by an Award Agreement. Each Share Appreciation Right so granted shall be subject to the conditions set forth in this Section 7.1, and to such other conditions not inconsistent with the Plan as may be reflected in the applicable Award Agreement. Share Appreciation Rights may be granted alone (“Free Standing Rights”) or in tandem with an Option granted under the Plan (“Related Rights”). All such grants shall be exempt from, or comply with, the provisions of Section 409A of the Code.
(b) Grant Requirements. Any Related Right that relates to a Non-qualified Share Option may be granted at the same time the Option is granted or at any time thereafter but before the exercise or expiration of the Option. Any Related Right that relates to an Incentive Share Option must be granted at the same time the Incentive Share Option is granted.
(c) Term of Share Appreciation Rights. The term of a Share Appreciation Right granted under the Plan shall be determined by the Committee; provided, however, no Share Appreciation Right shall be exercisable later than the tenth anniversary of the Grant Date.
(d) Vesting of Share Appreciation Rights. Each Share Appreciation Right may, but need not, vest and therefore become exercisable in periodic installments that may, but need not, be equal. The Share Appreciation Right may be subject to such other terms and conditions on the time or times when it may be exercised as the Committee may deem appropriate. The vesting provisions of individual Share Appreciation Rights may vary. No Share Appreciation Right may be exercised for a fraction of a Class A Ordinary Share. The Committee may, but shall not be required to, provide for an acceleration of vesting and exercisability in the terms of any Share Appreciation Right upon the occurrence of a specified event, provided that if such Award is subject to Section 409A of the Code, such acceleration of vesting and exercisability complies with the provisions of Section 409A of the Code.
(e) Exercise and Payment. Upon exercise of a Share Appreciation Right, the holder shall be entitled to receive from the Company an amount equal to the number of Class A Ordinary Share subject to the Share Appreciation Right that is being exercised multiplied by the excess of (i) the Fair Market Value of one Class A Ordinary Share on the date the Award is exercised, over (ii) the exercise price specified in the Share Appreciation Right or related Option. Payment with respect to the exercise of a Share Appreciation Right shall be made on the date of exercise. Payment shall be made in the form of Class A Ordinary Shares (with or without restrictions as to substantial risk of forfeiture and transferability, as determined by the Committee in its sole discretion), cash or a combination thereof, as determined by the Committee.
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(f) Exercise Price. The exercise price of a Free Standing Share Appreciation Right shall be determined by the Committee, but shall not be less than the greater of (i) 100% of the Fair Market Value of one Class A Ordinary Share on the Grant Date of such Share Appreciation Right or (ii) the par value of any Class A Ordinary Share. A Related Right granted simultaneously with or subsequent to the grant of an Option and in conjunction therewith or in the alternative thereto shall have the same exercise price as the related Option, shall be transferable only upon the same terms and conditions as the related Option, and shall be exercisable only to the same extent as the related Option; provided, however, that a Share Appreciation Right, by its terms, shall be exercisable only when the Fair Market Value per Class A Ordinary Share subject to the Share Appreciation Right and related Option exceeds the exercise price per share thereof and no Share Appreciation Rights may be granted in tandem with an Option unless the Committee determines that the requirements of Section 7.1(b) are satisfied.
(g) Reduction in the Underlying Option Shares. Upon any exercise of a Related Right, the number of Class A Ordinary Shares for which any related Option shall be exercisable shall be reduced by the number of shares for which the Share Appreciation Right has been exercised. The number of Class A Ordinary Shares for which a Related Right shall be exercisable shall be reduced upon any exercise of any related Option by the number of Class A Ordinary Shares for which such Option has been exercised.
7.2. Restricted Awards.
(a) General. A Restricted Award is an Award of actual Class A Ordinary Shares (“Restricted Share”) or hypothetical Class A Ordinary Share units (“Restricted Share Units”) having a value equal to the Fair Market Value of an identical number of Class A Ordinary Shares, which may, but need not, provide that such Restricted Award may not be sold, assigned, transferred or otherwise disposed of, pledged or hypothecated as collateral for a loan or as security for the performance of any obligation or for any other purpose for such period (the “Restricted Period”) as the Committee shall determine. Each Restricted Award granted under the Plan shall be evidenced by an Award Agreement. Each Restricted Award so granted shall be subject to the conditions set forth in this Section 7.2, and to such other conditions not inconsistent with the Plan as may be reflected in the applicable Award Agreement.
(b) Restricted Share and Restricted Share Units.
(i) Each Participant granted Restricted Share shall execute and deliver to the Company an Award Agreement with respect to the Restricted Share setting forth the restrictions and other terms and conditions applicable to such Restricted Share. If the Committee determines that the Restricted Share shall be held by the Company or in escrow rather than delivered to the Participant pending the release of the applicable restrictions, the Committee may require the Participant to additionally execute and deliver to the Company (A) an escrow agreement satisfactory to the Committee, if applicable and (B) the appropriate blank instrument of transfer with respect to the Restricted Share covered by such agreement. If a Participant fails to execute an agreement evidencing an Award of Restricted Share and, if applicable, an escrow agreement and instrument of transfer, the Award shall be null and void. Subject to the restrictions set forth in the Award, the Participant generally shall have the rights and privileges of a shareholder as to such Restricted Share, including the right to vote such Restricted Share and the right to receive dividends; provided that, any cash dividends and share dividends with respect to the Restricted Share shall similarly be held in escrow by the Company for the Participant’s account, and interest may be credited on the amount of the cash dividends so placed in escrow at a rate and subject to such terms as determined by the Committee. The cash dividends or share dividends so placed in escrow by the Committee and attributable to any particular Restricted Share (and earnings thereon, if applicable) shall be distributed to the Participant in cash or, at the discretion of the Committee, in Class A Ordinary Shares having a Fair Market Value equal to the amount of such dividends, if applicable, upon the release of restrictions on such share and, if such share is forfeited, the Participant shall have no right to such dividends.
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(ii) The terms and conditions of a grant of Restricted Share Units shall be reflected in an Award Agreement. No Class A Ordinary Shares shall be issued at the time a Restricted Share Unit is granted, and the Company will not be required to set aside a fund for the payment of any such Award. A Participant shall have no voting rights with respect to any Restricted Share Units granted hereunder. The Committee may also grant Restricted Share Units with a deferral feature, if permitted in Section 409A of the Code, whereby settlement is deferred beyond the vesting date until the occurrence of a future payment date or event set forth in an Award Agreement (“Deferred Share Units”). At the discretion of the Committee, each Restricted Share Unit or Deferred Share Unit (representing one Class A Ordinary Share) may be credited with cash and share dividends paid by the Company in respect of one Class A Ordinary Share (“Dividend Equivalents”). Dividend Equivalents shall not be paid but shall be credited to the Participant’s account, and interest may be credited on the amount of cash Dividend Equivalents credited to the Participant’s account at a rate and subject to such terms as determined by the Committee. Dividend Equivalents credited to a Participant’s account and attributable to any particular Restricted Share Unit or Deferred Share Unit (and earnings thereon, if applicable) shall be distributed in cash or, at the discretion of the Committee, in Class A Ordinary Shares having a Fair Market Value equal to the amount of such Dividend Equivalents and earnings, if applicable, to the Participant upon settlement of such Restricted Share Unit or Deferred Share Unit and, if such Restricted Share Unit or Deferred Share Unit is forfeited, the Participant shall have no right to such Dividend Equivalents.
(c) Restrictions.
(i) Restricted Share awarded to a Participant shall be subject to the following restrictions until the expiration of the Restricted Period, and to such other terms and conditions as may be set forth in the applicable Award Agreement: (A) if an escrow arrangement is used, the Participant shall not be entitled to delivery of the share certificate; (B) the shares shall be subject to the restrictions on transferability set forth in the Award Agreement; (C) the shares shall be subject to forfeiture to the extent provided in the applicable Award Agreement; and (D) to the extent such shares are forfeited, the register of members shall be written up to reflect such forfeiture, the share certificates shall be returned to the Company, and all rights of the Participant to such shares and as a shareholder with respect to such shares shall terminate without further obligation on the part of the Company.
(ii) Restricted Share Units and Deferred Share Units awarded to any Participant shall be subject to (A) forfeiture until the expiration of the Restricted Period, and satisfaction of any applicable Performance Goals during such period, to the extent provided in the applicable Award Agreement, and to the extent such Restricted Share Units or Deferred Share Units are forfeited, all rights of the Participant to such Restricted Share Units or Deferred Share Units shall terminate without further obligation on the part of the Company and (B) such other terms and conditions as may be set forth in the applicable Award Agreement.
(iii) The Committee shall have the authority to remove any or all of the restrictions on the Restricted Share, Restricted Share Units and Deferred Share Units whenever it may determine that, by reason of changes in Applicable Laws or other changes in circumstances arising after the date the Restricted Share or Restricted Share Units or Deferred Share Units are granted, such action is appropriate.
(d) Restricted Period. With respect to Restricted Awards, the Restricted Period shall commence on the Grant Date and end at the time or times set forth on a schedule established by the Committee in the applicable Award Agreement. No Restricted Award may be granted or settled for a fraction of a Class A Ordinary Share. The Committee may, but shall not be required to, provide for an acceleration of vesting in the terms of any Award Agreement upon the occurrence of a specified event, provided that if such Award is subject to Section 409A of the Code, such acceleration is consistent with the provisions of Section 409A of the Code.
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(e) Delivery of Restricted Share and Settlement of Restricted Share Units. Upon the expiration of the Restricted Period with respect to any shares of Restricted Share, the restrictions set forth in Section 7.2(c) and the applicable Award Agreement shall be of no further force or effect with respect to such shares, except as set forth in the applicable Award Agreement. If an escrow arrangement is used, upon such expiration, the Company shall deliver to the Participant, or his or her beneficiary, without charge, the share certificate evidencing the shares of Restricted Share which have not then been forfeited and with respect to which the Restricted Period has expired (to the nearest full share) and any cash dividends or share dividends credited to the Participant’s account with respect to such Restricted Share and the interest thereon, if any. Upon the expiration of the Restricted Period with respect to any outstanding Restricted Share Units, or at the expiration of the deferral period with respect to any outstanding Deferred Share Units, the Company shall deliver to the Participant, or his or her beneficiary, without charge, one Class A Ordinary Share for each such outstanding vested Restricted Share Unit or Deferred Share Unit (“Vested Unit”) and cash equal to any Dividend Equivalents credited with respect to each such Vested Unit in accordance with Section 7.2(b)(ii) hereof and the interest thereon or, at the discretion of the Committee, in Class A Ordinary Shares having a Fair Market Value equal to such Dividend Equivalents and the interest thereon, if any; provided, however, that, if explicitly provided in the applicable Award Agreement, the Committee may, in its sole discretion, elect to pay cash or part cash and part Class A Ordinary Share in lieu of delivering only Class A Ordinary Shares for Vested Units. If a cash payment is made in lieu of delivering Class A Ordinary Shares, the amount of such payment shall be equal to the Fair Market Value of the Class A Ordinary Share as of the date on which the Restricted Period lapsed in the case of Restricted Share Units, or the delivery date in the case of Deferred Share Units, with respect to each Vested Unit.
(f) Share Restrictions. Each certificate representing Restricted Share awarded under the Plan shall bear a legend in such form as the Company deems appropriate.
7.3. Performance Share Awards.
(a) Grant of Performance Share Awards. Each Performance Share Award granted under the Plan shall be evidenced by an Award Agreement. Each Performance Share Award so granted shall be subject to the conditions set forth in this Section 7.3, and to such other conditions not inconsistent with the Plan as may be reflected in the applicable Award Agreement. The Committee shall have the discretion to determine: (i) the number of Class A Ordinary Shares or share-denominated units subject to a Performance Share Award granted to any Participant; (ii) the performance period applicable to any Award; (iii) the conditions that must be satisfied for a Participant to earn an Award; and (iv) the other terms, conditions and restrictions of the Award.
(b) Earning Performance Share Awards. The number of Performance Shares earned by a Participant will depend on the extent to which the performance goals established by the Committee are attained within the applicable Performance Period, as determined by the Committee. No payout shall be made with respect to any Performance Share Award except upon written certification by the Committee that the minimum threshold performance goal(s) have been achieved.
7.4. Performance Compensation Awards.
(a) General. The Committee shall have the authority, at the time of grant of any Award described in this Plan (other than Options and Share Appreciation Rights granted with an exercise price equal to or greater than the Fair Market Value per Class A Ordinary Share on the Grant Date), to designate such Award as a Performance Compensation Award. In addition, the Committee shall have the authority to make an Award of a cash bonus to any Participant and designate such Award as a Performance Compensation Award.
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(b) Eligibility. The Committee will, in its sole discretion, designate within the first 90 days of a Performance Period (or such shorter or longer time period as the Committee shall determine) which Participants will be eligible to receive Performance Compensation Awards in respect of such Performance Period. However, designation of a Participant eligible to receive an Award hereunder for a Performance Period shall not in any manner entitle the Participant to receive payment in respect of any Performance Compensation Award for such Performance Period. The determination as to whether or not such Participant becomes entitled to payment in respect of any Performance Compensation Award shall be decided solely in accordance with the provisions of this Section 7.4. Moreover, designation of a Participant eligible to receive an Award hereunder for a particular Performance Period shall not require designation of such Participant eligible to receive an Award hereunder in any subsequent Performance Period and designation of one person as a Participant eligible to receive an Award hereunder shall not require designation of any other person as a Participant eligible to receive an Award hereunder in such period or in any other period.
(c) Discretion of Committee with Respect to Performance Compensation Awards. With regard to a particular Performance Period, the Committee shall have full discretion to select the length of such Performance Period (provided any such Performance Period shall be not less than one fiscal quarter in duration), the type(s) of Performance Compensation Awards to be issued, the Performance Criteria that will be used to establish the Performance Goal(s), the kind(s) and/or level(s) of the Performance Goal(s) that is (are) to apply to the Company and the Performance Formula. Within the first 90 days of a Performance Period (or such shorter or longer time period as the Committee shall determine), the Committee shall, with regard to the Performance Compensation Awards to be issued for such Performance Period, exercise its discretion with respect to each of the matters enumerated in the immediately preceding sentence of this Section 7.4(c) and record the same in writing.
(d) Payment of Performance Compensation Awards.
(i) Condition to Receipt of Payment. Unless otherwise provided in the applicable Award Agreement, a Participant must be employed by the Company on the last day of a Performance Period to be eligible for payment in respect of a Performance Compensation Award for such Performance Period.
(ii) Limitation. A Participant shall be eligible to receive payment in respect of a Performance Compensation Award only to the extent that: (A) the Performance Goals for such period are achieved; and (B) the Performance Formula as applied against such Performance Goals determines that all or some portion of such Participant’s Performance Compensation Award has been earned for the Performance Period.
(iii) Certification. Following the completion of a Performance Period, the Committee shall review and certify in writing whether, and to what extent, the Performance Goals for the Performance Period have been achieved and, if so, calculate and certify in writing the amount of the Performance Compensation Awards earned for the period based upon the Performance Formula. The Committee shall then determine the actual size of each Participant’s Performance Compensation Award for the Performance Period.
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(iv) Use of Discretion. The Committee shall not have the discretion to grant or provide payment in respect of Performance Compensation Awards for a Performance Period if the Performance Goals for such Performance Period have not been attained.
(v) Timing of Award Payments. Performance Compensation Awards granted for a Performance Period shall be paid to Participants as soon as administratively practicable following completion of the certifications required by this Section 7.4 but in no event later than 2 1/2 months following the end of the fiscal year during which the Performance Period is completed.
8. Securities Law Compliance. Each Award Agreement shall provide that no Class A Ordinary Shares shall be purchased or sold thereunder unless and until (a) any then applicable requirements of state or federal laws and regulatory agencies have been fully complied with to the satisfaction of the Company and its counsel and (b) if required to do so by the Company, the Participant has executed and delivered to the Company a letter of investment intent in such form and containing such provisions as the Committee may require. The Company shall use reasonable efforts to seek to obtain from each regulatory commission or agency having jurisdiction over the Plan such authority as may be required to grant Awards and to issue and sell Class A Ordinary Shares upon exercise of the Awards; provided, however, that this undertaking shall not require the Company to register under the Securities Act the Plan, any Award or any Class A Ordinary Share issued or issuable pursuant to any such Award. If, after reasonable efforts, the Company is unable to obtain from any such regulatory commission or agency the authority which counsel for the Company deems necessary for the lawful issuance and sale of Class A Ordinary Share under the Plan, the Company shall be relieved from any liability for failure to issue and sell Class A Ordinary Share upon exercise of such Awards unless and until such authority is obtained.
9. Use of Proceeds. Proceeds from the sale of Class A Ordinary Share pursuant to Awards, or upon exercise thereof, shall constitute general funds of the Company.
10. Miscellaneous.
10.1. Acceleration of Exercisability and Vesting. The Committee shall have the power to accelerate the time at which an Award may first be exercised or the time during which an Award or any part thereof will vest in accordance with the Plan, notwithstanding the provisions in the Award stating the time at which it may first be exercised or the time during which it will vest, provided that if such Award is subject to Section 409A of the Code, any such acceleration or exercisability or vesting is in compliance with the provisions of Section 409A of the Code.
10.2. Shareholder Rights. Except as provided in the Plan or an Award Agreement, no Participant shall be deemed to be the holder of, or to have any of the rights of a holder with respect to, any Class A Ordinary Shares subject to such Award unless and until such Participant has satisfied all requirements for exercise of the Award pursuant to its terms and no adjustment shall be made for dividends (ordinary or extraordinary, whether in cash, securities or other property) or distributions of other rights for which the record date is prior to the date such Class A Ordinary Share certificate is issued, except as provided in Section 11 hereof.
10.3. No Employment or Other Service Rights. Nothing in the Plan or any instrument executed or Award granted pursuant thereto shall confer upon any Participant any right to continue to serve the Company or an Affiliate in the capacity in effect at the time the Award was granted or shall affect the right of the Company or an Affiliate to terminate (a) the employment of an Employee with or without notice and with or without Cause or (b) the service of a Director pursuant to the articles of association or equivalent of the Company or an Affiliate, and any applicable provisions of the corporate law of the state in which the Company or the Affiliate is incorporated, as the case may be.
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10.4. Transfer; Approved Leave of Absence. For purposes of the Plan, no termination of employment by an Employee shall be deemed to result from either (a) a transfer of employment to the Company from an Affiliate or from the Company to an Affiliate, or from one Affiliate to another, or (b) an approved leave of absence for military service or sickness, or for any other purpose approved by the Company, if the Employee’s right to reemployment is guaranteed either by a statute or by contract or under the policy pursuant to which the leave of absence was granted or if the Committee otherwise so provides in writing, in either case, except to the extent inconsistent with Section 409A of the Code if the applicable Award is subject thereto.
10.5. Withholding Obligations. To the extent provided by the terms of an Award Agreement and subject to the discretion of the Committee, the Participant may satisfy any federal, state or local tax withholding obligation relating to the exercise or acquisition of Class A Ordinary Share under an Award by any of the following means (in addition to the Company’s right to withhold from any compensation paid to the Participant by the Company) or by a combination of such means: (a) tendering a cash payment; (b) authorizing the Company to withhold Class A Ordinary Shares from the Class A Ordinary Shares otherwise issuable to the Participant as a result of the exercise or acquisition of Class A Ordinary Share under the Award, provided, however, that no Class A Ordinary Shares are withheld with a value exceeding the minimum amount of tax required to be withheld by law; or (c) delivering to the Company previously owned and unencumbered Class A Ordinary Shares of the Company.
11. Adjustments Upon Changes in Shares. In the event of changes in the outstanding Class A Ordinary Share or in the authorized shares of the Company by reason of any share or extraordinary cash dividend, share split, reverse share split, an extraordinary corporate transaction such as any recapitalization, reorganization, merger, consolidation, combination, exchange, or other relevant change in capitalization occurring after the Grant Date of any Award, Awards granted under the Plan and any Award Agreements, the exercise price of Options and Share Appreciation Rights, the maximum number of Class A Ordinary Shares subject to all Awards stated in Section 4 and the maximum number of Class A Ordinary Shares with respect to which any one person may be granted Awards during any period stated in Section 4 will be equitably adjusted or substituted, as to the number, price or kind of a Class A Ordinary Share or other consideration subject to such Awards to the extent necessary to preserve the economic intent of such Award. In the case of adjustments made pursuant to this Section 11, unless the Committee specifically determines that such adjustment is in the best interests of the Company or its Affiliates, the Committee shall, in the case of Incentive Share Options, ensure that any adjustments under this Section 11 will not constitute a modification, extension or renewal of the Incentive Share Options within the meaning of Section 424(h)(3) of the Code and in the case of Non-qualified Share Options, ensure that any adjustments under this Section 11 will not constitute a modification of such Non-qualified Share Options within the meaning of Section 409A of the Code. Any adjustments made under this Section 11 shall be made in a manner which does not adversely affect the exemption provided pursuant to Rule 16b-3 under the Exchange Act. The Company shall give each Participant notice of an adjustment hereunder and, upon notice, such adjustment shall be conclusive and binding for all purposes.
12. Effect of Change in Control.
12.1. In the discretion of the Board and the Committee, any Award Agreement may provide, or the Board or the Committee may provide by amendment of any Award Agreement or otherwise, notwithstanding any provision of the Plan to the contrary, that in the event of a Change in Control, Options and/or Share Appreciation Rights shall become immediately exercisable with respect to all or a specified portion of the shares subject to such Options or Share Appreciation Rights, and/or the Restricted Period shall expire immediately with respect to all or a specified portion of the shares of Restricted Share or Restricted Share Units.
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12.2. In addition, in the event of a Change in Control, the Committee may in its discretion and upon at least 10 days’ advance notice to the affected persons, cancel any outstanding Awards and pay to the holders thereof, in cash or shares, or any combination thereof, the value of such Awards based upon the price per Class A Ordinary Share received or to be received by other shareholders of the Company in the event. In the case of any Option or Share Appreciation Right with an exercise price that equals or exceeds the price paid for a Class A Ordinary Share in connection with the Change in Control, the Committee may cancel the Option or Share Appreciation Right without the payment of consideration therefor.
12.3. The obligations of the Company under the Plan shall be binding upon any successor company, corporation or organization resulting from the merger, consolidation or other reorganization of the Company, or upon any successor company, corporation or organization succeeding to all or substantially all of the assets and business of the Company and its Subsidiaries, taken as a whole.
13. Amendment of the Plan and Awards.
13.1. Amendment of Plan. The Board may amend, alter, suspend, discontinue, or terminate this Plan or any portion thereof at any time; provided that (a) no amendment to the persons eligible to receive Awards set forth in Section 1.2 or to the maximum number of shares as to which Awards may be granted set forth in Section 4.1 (except for adjustments pursuant to Section 11), shall be made without shareholder approval, and (b) no such amendment, alteration, suspension, discontinuation or termination shall be made without shareholder approval if such approval is necessary to comply with any Applicable Laws (including, without limitation, as necessary to comply with any tax or regulatory requirement applicable to this Plan or to prevent the Company from being denied a tax deduction under Section 162(m) of the Code); and provided further, that any such amendment, alteration, suspension, discontinuance or termination that would materially and adversely affect the rights of any Participant or any holder or beneficiary of any Award theretofore granted shall not to that extent be effective without the prior written consent of the affected Participant, holder or beneficiary.
13.2. Contemplated Amendments. It is expressly contemplated that the Board may amend the Plan in any respect the Board deems necessary or advisable to provide eligible Employees, Consultants and Directors with the maximum benefits provided or to be provided under the provisions of the Code and the regulations promulgated thereunder relating to Incentive Share Options or to the nonqualified deferred compensation provisions of Section 409A of the Code and/or to bring the Plan and/or Awards granted under it into compliance therewith.
13.3. No Impairment of Rights. Rights under any Award granted before amendment of the Plan shall not be impaired by any amendment of the Plan unless (a) the Company requests the consent of the Participant and (b) the Participant consents in writing.
13.4. Amendment of Awards. The Committee may, to the extent consistent with the terms of any applicable Award Agreement, waive any conditions or rights under, amend any terms of, or alter, suspend, discontinue, cancel or terminate, any Award theretofore granted or the associated Award Agreement, prospectively or retroactively; provided, however that any such waiver, amendment, alteration, suspension, discontinuance, cancellation or termination that would materially and adversely affect the rights of any Participant with respect to any Award theretofore granted shall not to that extent be effective without the consent of the affected Participant.
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14. General Provisions.
14.1. Forfeiture Events. The Committee may specify in an Award Agreement that the Participant’s rights, payments and benefits with respect to an Award shall be subject to reduction, cancellation, forfeiture or recoupment upon the occurrence of certain events, in addition to applicable vesting conditions of an Award. Such events may include, without limitation, breach of non-competition, non-solicitation, confidentiality, or other restrictive covenants that are contained in the Award Agreement or otherwise applicable to the Participant, a termination of the Participant’s Continuous Service for Cause, or other conduct by the Participant that is detrimental to the business or reputation of the Company and/or its Affiliates.
14.2. Clawback. Notwithstanding any other provisions in this Plan, any Award which is subject to recovery under any law, government regulation or stock exchange listing requirement, will be subject to such deductions and clawback as may be required to be made pursuant to such law, government regulation or stock exchange listing requirement (or any policy adopted by the Company pursuant to any such law, government regulation or stock exchange listing requirement). Awards granted under the Plan and any gross proceeds received by Participants with respect to Awards granted under the Plan shall be subject to any clawback policy that may be adopted or amended thereafter by the Board or Committee from time to time, to comply with regulations related to recoupment or clawback of compensation adopted pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, the listing standards of any national securities exchange on which the Company’s securities are listed or any other applicable law, rule, or regulation. Clawback can, if applicable and where permitted by applicable local law, be made by deducting payments that will be due in the future (including salary, bonuses, and other forms of compensation). A Participant’s acceptance of an Award under the Plan shall constitute such Participant’s acknowledgement and recognition that the Participant’s compliance with this Section 14.2 is a condition for the Participant’s receipt of the Award.
14.3. Other Compensation Arrangements. Nothing contained in this Plan shall prevent the Board from adopting other or additional compensation arrangements, subject to shareholder approval if such approval is required; and such arrangements may be either generally applicable or applicable only in specific cases.
14.4. Sub-plans. The Committee may from time to time establish sub-plans under the Plan for purposes of satisfying blue sky, securities, tax or other laws of various jurisdictions in which the Company intends to grant Awards. Any sub-plans shall contain such limitations and other terms and conditions as the Committee determines are necessary or desirable. All sub-plans shall be deemed a part of the Plan, but each sub-plan shall apply only to the Participants in the jurisdiction for which the sub-plan was designed.
14.5. Deferral of Awards. The Committee may establish one or more programs under the Plan to permit selected Participants the opportunity to elect to defer receipt of consideration upon exercise of an Award, satisfaction of performance criteria, or other event that absent the election would entitle the Participant to payment or receipt of Class A Ordinary Shares or other consideration under an Award. The Committee may establish the election procedures, the timing of such elections, the mechanisms for payments of, and accrual of interest or other earnings, if any, on amounts, shares or other consideration so deferred, and such other terms, conditions, rules and procedures that the Committee deems advisable for the administration of any such deferral program. All of such programs and procedures shall be consistent with the rules of Section 409A of the Code.
14.6. Unfunded Plan. The Plan shall be unfunded. Neither the Company, the Board nor the Committee shall be required to establish any special or separate fund or to segregate any assets to assure the performance of its obligations under the Plan.
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14.7. Recapitalizations. Each Award Agreement shall contain provisions required to reflect the provisions of Section 11.
14.8. Delivery. Upon exercise of a right granted under this Plan, the Company shall issue Class A Ordinary Share or pay any amounts due within a reasonable period of time thereafter. Subject to any statutory or regulatory obligations the Company may otherwise have, for purposes of this Plan, thirty (30) days shall be considered a reasonable period of time.
14.9. No Fractional Shares. No fractional Class A Ordinary Shares shall be issued or delivered pursuant to the Plan. The Committee shall determine whether cash, additional Awards or other securities or property shall be issued or paid in lieu of fractional Class A Ordinary Shares or whether any fractional shares should be rounded, forfeited or otherwise eliminated.
14.10. Other Provisions. The Award Agreements authorized under the Plan may contain such other provisions not inconsistent with this Plan, including, without limitation, restrictions upon the exercise of the Awards, as the Committee may deem advisable.
14.11. Section 409A. The Plan and all Awards granted under the Plan are intended to comply with Section 409A of the Code to the extent subject thereto, and, accordingly, to the maximum extent permitted, the Plan and all Awards Agreements shall be interpreted and administered to be in compliance therewith. Any payments described in the Plan that are due within the “short-term deferral period” as defined in Section 409A of the Code shall not be treated as deferred compensation unless Applicable Laws require otherwise. Notwithstanding anything to the contrary in the Plan or any Award Agreement, to the extent required to avoid accelerated taxation and tax penalties under Section 409A of the Code, amounts that would otherwise be payable and benefits that would otherwise be provided pursuant to the Plan or Award Agreement during the six (6) month period immediately following the Participant’s termination of Continuous Service shall instead be paid on the first payroll date after the six-month anniversary of the Participant’s separation from service (or the Participant’s death, if earlier). Notwithstanding the foregoing, neither the Company nor the Committee shall have any obligation to take any action to prevent the assessment of any excise tax or penalty on any Participant under Section 409A of the Code and neither the Company nor the Committee will have any liability to any Participant for such tax or penalty.
14.12. Disqualifying Dispositions. Any Participant who shall make a “disposition” (as defined in Section 424 of the Code) of all or any portion of Class A Ordinary Shares acquired upon exercise of an Incentive Share Option within two years from the Grant Date of such Incentive Share Option or within one year after the issuance of the Class A Ordinary Shares acquired upon exercise of such Incentive Share Option (a “Disqualifying Disposition”) shall be required to immediately advise the Company in writing as to the occurrence of the sale and the price realized upon the sale of such Class A Ordinary Shares.
14.13. Section 16. It is the intent of the Company that the Plan satisfy, and be interpreted in a manner that satisfies, the applicable requirements of Rule 16b-3 as promulgated under Section 16 of the Exchange Act so that Participants will be entitled to the benefit of Rule 16b-3, or any other rule promulgated under Section 16 of the Exchange Act, and will not be subject to short-swing liability under Section 16 of the Exchange Act. Accordingly, if the operation of any provision of the Plan would conflict with the intent expressed in this Section 14.13, such provision to the extent possible shall be interpreted and/or deemed amended so as to avoid such conflict.
14.14. Beneficiary Designation. Each Participant under the Plan may from time to time name any beneficiary or beneficiaries by whom any right under the Plan is to be exercised in case of such Participant’s death. Each designation will revoke all prior designations by the same Participant, shall be in a form reasonably prescribed by the Committee and shall be effective only when filed by the Participant in writing with the Company during the Participant’s lifetime.
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14.15. Expenses. The costs of administering the Plan shall be paid by the Company.
14.16. Severability. If any of the provisions of the Plan or any Award Agreement is held to be invalid, illegal or unenforceable, whether in whole or in part, such provision shall be deemed modified to the extent, but only to the extent, of such invalidity, illegality or unenforceability and the remaining provisions shall not be affected thereby.
14.17. Plan Headings. The headings in the Plan are for purposes of convenience only and are not intended to define or limit the construction of the provisions hereof.
14.18. Non-Uniform Treatment. The Committee’s determinations under the Plan need not be uniform and may be made by it selectively among persons who are eligible to receive, or actually receive, Awards. Without limiting the generality of the foregoing, the Committee shall be entitled to make non-uniform and selective determinations, amendments and adjustments, and to enter into non-uniform and selective Award Agreements.
15. Effective Date of Plan. The Plan shall become effective as of the Effective Date.
16. Termination or Suspension of the Plan. The Plan shall terminate automatically on [ ], 2034. No Award shall be granted pursuant to the Plan after such date, but Awards theretofore granted may extend beyond that date. The Board may suspend or terminate the Plan at any earlier date pursuant to Section 13.1 hereof, provided any such suspension or termination is consistent with the provisions of Section 409A of the Code. No Awards may be granted under the Plan while the Plan is suspended or after it is terminated.
17. Choice of Law. Except to the extent governed by Federal law, the Plan and all Award Agreements shall be construed in accordance with and governed by the laws of British Virgin Islands.
Adopted by the Board of Directors of the Company on [ ], 2024.
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Exhibit 10.7
SHARE OPTION AGREEMENT
This Share Option Agreement (this “Agreement”) is made and entered into as of the Grant Date specified below by and between Concorde International Group Ltd, a British Virgin Islands business company (the “Company”), and the participant named below (the “Participant”).
| Name of Participant: | |
| Grant Date: | |
| Expiration Date: | |
| Exercise Price: | |
| Number of Option Shares: | |
| Type of Option: | |
| Vesting Start Date: | |
| Vesting Schedule: |
1. Grant of Option.
1.1. Grant. The Company hereby grants to the Participant an option (the “Option”) to purchase the total number of Class A Ordinary Shares of the Company equal to the number of Option Shares set forth above, at the Exercise Price set forth above. The Option is being granted pursuant to the terms of the Company’s 2024 Equity Incentive Plan (the “Plan”). Capitalized terms used but not defined herein will have the meanings ascribed to them in the Plan.
1.2. Type of Option. The Option is intended to be either a Non-qualified Share Option (i.e., not an Incentive Share Option) or an Incentive Share Option within the meaning of Section 422 of the Code, as indicated above, although the Company makes no representation or guarantee that the Option will qualify as an Incentive Share Option. To the extent that the aggregate Fair Market Value (determined on the Grant Date) of the Class A Ordinary Shares with respect to which Incentive Share Options are exercisable for the first time by the Participant during any calendar year (under all plans of the Company and its Affiliates) exceeds $100,000, the Options or portions thereof which exceed such limit (according to the order in which they were granted) shall be treated as Non-qualified Share Options.
1.3. Consideration. The grant of the Option is made in consideration of the services to be rendered by the Participant to the Company and is subject to the terms and conditions of the Plan.
2. Exercise Period; Vesting.
2.1. Vesting Schedule. The Option will become vested and exercisable in accordance with the Vesting Schedule specified above until the Option is 100% vested. The unvested portion of the Option will not be exercisable on or after the Participant’s termination of Continuous Service.
2.2. Expiration. The Option will expire on the Expiration Date set forth above, or earlier as provided in this Agreement or the Plan.
3. Termination of Continuous Service.
3.1. Termination for Reasons Other Than Cause, Death or Disability. If the Participant’s Continuous Service is terminated for any reason other than Cause, death or Disability, the Participant may exercise the vested portion of the Option, but only within such period of time ending on the earlier of (a) the date that is three months following the termination of the Participant’s Continuous Service or (b) the Expiration Date.
3.2. Termination for Cause. If the Participant’s Continuous Service is terminated for Cause, the Option (whether vested or unvested) shall immediately terminate and cease to be exercisable.
3.3. Termination Due to Disability. If the Participant’s Continuous Service terminates as a result of the Participant’s Disability, the Participant may exercise the vested portion of the Option, but only within such period of time ending on the earlier of (a) the date that is 12 months following the Participant’s termination of Continuous Service or (b) the Expiration Date.
3.4. Termination Due to Death. If the Participant’s Continuous Service terminates as a result of the Participant’s death, or the Participant dies within a period following termination of the Participant’s Continuous Service during which the vested portion of the Option remains exercisable, the vested portion of the Option may be exercised by the Participant’s estate, by a person who acquired the right to exercise the Option by bequest or inheritance or by the person designated to exercise the Option upon the Participant’s death, but only within the time period ending on the earlier of (a) the date that is 12 months following the Participant’s death or (b) the Expiration Date.
3.5. Extension of Termination Date. If following the Participant’s termination of Continuous Service for any reason the exercise of the Option is prohibited because the exercise of the Option would violate the registration requirements under the Securities Act or any other state or federal securities law or the rules of any securities exchange or interdealer quotation system, then the expiration of the Option shall be tolled until the date that is thirty (30) days after the end of the period during which the exercise of the Option would be in violation of such registration or other securities requirements.
4. Manner of Exercise.
4.1. Election to Exercise. To exercise the Option, the Participant (or in the case of exercise after the Participant’s death or incapacity, the Participant’s executor, administrator, heir or legatee, as the case may be) must deliver to the Company an executed share option exercise agreement in the form attached hereto as Exhibit A, or as is approved by the Committee from time to time (the “Exercise Agreement”), which shall set forth, inter alia: (a) the Participant’s election to exercise the Option; (b) the number of Class A Ordinary Shares being purchased; (c) any restrictions imposed on the shares; and (d) any representations, warranties and agreements regarding the Participant’s investment intent and access to information as may be required by the Company to comply with applicable securities laws. If someone other than the Participant exercises the Option, then such person must submit documentation reasonably acceptable to the Company verifying that such person has the legal right to exercise the Option.
4.2. Payment of Exercise Price. The entire Exercise Price of the Option shall be payable in full at the time of exercise to the extent permitted by applicable statutes and regulations, either: (a) in cash or by certified or bank check at the time the Option is exercised; (b) by delivery to the Company of other Class A Ordinary Shares, together with an instrument of transfer in favour of the Company, with a Fair Market Value on the date of delivery equal to the Exercise Price (or portion thereof) due for the number of shares being acquired, or by means of attestation whereby the Participant identifies for delivery specific shares that have a Fair Market Value on the date of attestation equal to the Exercise Price (or portion thereof) and receives a number of shares equal to the difference between the number of shares thereby purchased and the number of identified attestation shares (a “Stock for Stock Exchange”); (c) through a “cashless exercise program” established with a broker; (d) by reduction in the number of shares otherwise deliverable upon exercise of such Option with a Fair Market Value equal to the aggregate Exercise Price at the time of exercise; (e) by any combination of the foregoing methods; or (f) in any other form of legal consideration that may be acceptable to the Committee.
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4.3. Withholding. Prior to the issuance of shares upon the exercise of the Option, the Participant must make arrangements satisfactory to the Company to pay or provide for any applicable federal, state and local withholding obligations of the Company. The Participant may satisfy any federal, state or local tax withholding obligation relating to the exercise of the Option by any of the following means: (a) tendering a cash payment; (b) authorizing the Company to withhold Class A Ordinary Shares from the Class A Ordinary Shares otherwise issuable to the Participant as a result of the exercise of the Option; provided, however, that no Class A Ordinary Shares are withheld with a value exceeding the minimum amount of tax required to be withheld by law; or (c) delivering to the Company previously owned and unencumbered Class A Ordinary Shares. The Company has the right to withhold from any compensation paid to a Participant.
4.4. Issuance of Shares. Provided that the Exercise Agreement and payment are in form and substance satisfactory to the Company, the Company shall issue the Class A Ordinary Shares registered in the name of the Participant, the Participant’s authorized assignee, or the Participant’s legal representative which shall be evidenced by entry in the register of members of the Company and share certificates representing the shares with the appropriate legends affixed thereto, appropriate entry on the books of the Company or of a duly authorized transfer agent, or other appropriate means as determined by the Company.
5. No Right to Continued Service; No Rights as Shareholder. Neither the Plan nor this Agreement shall confer upon the Participant any right to be retained in any position, as an Employee, Consultant or Director of the Company. Further, nothing in the Plan or this Agreement shall be construed to limit the discretion of the Company to terminate the Participant’s Continuous Service at any time, with or without Cause. The Participant shall not have any rights as a shareholder with respect to any Class A Ordinary Shares subject to the Option prior to the date of exercise of the Option.
6. Transferability. The Option is not transferable by the Participant other than to a designated beneficiary upon the Participant’s death or by will or the laws of descent and distribution, and is exercisable during the Participant’s lifetime only by him or her. No assignment or transfer of the Option, or the rights represented thereby, whether voluntary or involuntary, by operation of law or otherwise (except to a designated beneficiary upon death by will or the laws of descent or distribution) will vest in the assignee or transferee any interest or right herein whatsoever, but immediately upon such assignment or transfer the Option will terminate and become of no further effect.
7. Change in Control. In the event of a Change in Control, the Committee may, in its discretion and upon at least ten (10) days’ advance notice to the Participant, cancel the Option and pay to the Participant the value of the Option based upon the price per share of Class A Ordinary Share received or to be received by other shareholders of the Company in the event. Notwithstanding the foregoing, if at the time of a Change in Control the Exercise Price of the Option equals or exceeds the price paid for a share of Class A Ordinary Share in connection with the Change in Control, the Committee may cancel the Option without the payment of consideration therefor.
8. Adjustments. The Class A Ordinary Shares subject to the Option may be adjusted or terminated in any manner as contemplated by Section 11 of the Plan.
9. Tax Liability and Withholding. Notwithstanding any action the Company takes with respect to any or all income tax, social insurance, payroll tax, or other tax-related withholding (“Tax-Related Items”), the ultimate liability for all Tax-Related Items is and remains the Participant’s responsibility and the Company (a) makes no representations or undertakings regarding the treatment of any Tax-Related Items in connection with the grant, vesting, or exercise of the Option or the subsequent sale of any shares acquired on exercise; and (b) does not commit to structure the Option to reduce or eliminate the Participant’s liability for Tax-Related Items.
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10. Qualification as an Incentive Share Option. If this Option is an Incentive Share Option, the Participant understands that in order to obtain the benefits of an Incentive Share Option, no sale or other disposition may be made of shares for which Incentive Share Option treatment is desired within one (1) year following the date of exercise of the Option or within two (2) years from the Grant Date. The Participant understands and agrees that the Company shall not be liable or responsible for any additional tax liability the Participant incurs in the event that the Internal Revenue Service for any reason determines that this Option does not qualify as an Incentive Share Option within the meaning of the Code.
11. Disqualifying Disposition. If this Option is an Incentive Share Option and the Participant disposes of the Class A Ordinary Shares prior to the expiration of either two (2) years from the Grant Date or one (1) year from the date the shares are transferred to the Participant pursuant to the exercise of the Option, the Participant shall notify the Company in writing within thirty (30) days after such disposition of the date and terms of such disposition. The Participant also agrees to provide the Company with any information concerning any such dispositions as the Company requires for tax purposes.
12. Non-competition and Non-solicitation.
12.1. Non-competition and Non-solicitation Restrictions. In consideration of the Option, the Participant agrees and covenants not to:
(a) contribute his or her knowledge, directly or indirectly, in whole or in part, as an employee, officer, owner, manager, advisor, consultant, agent, partner, director, shareholder, volunteer, intern or in any other similar capacity to an entity engaged in the same or similar business as the Company and its Affiliates for a period of one year following the Participant’s termination of Continuous Service;
(b) directly or indirectly, solicit, hire, recruit, attempt to hire or recruit, or induce the termination of employment of any employee of the Company or its Affiliates for one year following the Participant’s termination of Continuous Service; or
(c) directly or indirectly, solicit, contact (including, but not limited to, e-mail, regular mail, express mail, telephone, fax, and instant message), attempt to contact or meet with the current, former or prospective customers of the Company or any of its Affiliates for purposes of offering or accepting goods or services similar to or competitive with those offered by the Company or any of its Affiliates for a period of one year following the Participant’s termination of Continuous Service.
12.2. Enforcement of Non-competition and Non-solicitation Restrictions. In the event of a breach or threatened breach of any of the covenants contained in Section 12.1:
(a) any unvested portion of the Option shall be forfeited effective as of the date of such breach, unless sooner terminated by operation of another term or condition of this Agreement or the Plan;
(b) any vested, but unexercised, portion of the Option that vested upon the termination of the Participant’s Continuous Service or that vested within the one year period prior to the earlier of (i) the time the Participant first breached any of the covenants contained in Section 12.1 and (ii) the time of the Participant’s termination of Continuous Service, shall be forfeited as of the date of such breach, unless sooner terminated by operation of another term or condition of this Agreement or the Plan;
(c) the Company shall have the right, but not the obligation, during the one year period following the termination of the Participant’s Continuous Service to acquire any shares issued upon exercise of the Option during the one year period preceding the termination of the Participant’s Continuous Service that continue to be held by the Participant at the Exercise Price paid by the Participant, if any, for such shares; and
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(d) the Participant hereby consents and agrees that the Company shall be entitled to seek, in addition to other available remedies, a temporary or permanent injunction or other equitable relief against such breach or threatened breach from any court of competent jurisdiction, without the necessity of showing any actual damages or that money damages would not afford an adequate remedy, and without the necessity of posting any bond or other security. The aforementioned equitable relief shall be in addition to, not in lieu of, legal remedies, monetary damages or other available forms of relief.
13. Compliance with Law. The exercise of the Option and the issuance and transfer of Class A Ordinary Shares shall be subject to compliance by the Company and the Participant with laws of British Virgin Islands as they relate to the Company and its Class A Ordinary Shares, all applicable requirements of federal and state securities laws and with all applicable requirements of any stock exchange on which the Company’s Class A Ordinary Shares may be listed. No Class A Ordinary Shares shall be issued pursuant to this Option unless and until any then applicable requirements of British Virgin Islands laws, state or federal laws and regulatory agencies have been fully complied with to the satisfaction of the Company and its counsel. The Participant understands that the Company is under no obligation to register the Class A Ordinary Shares with the Securities and Exchange Commission, any state securities commission or any stock exchange to effect such compliance.
14. Notices. Any notice required to be delivered to the Company under this Agreement shall be in writing and addressed to the Chief Executive Officer of the Company at the Company’s principal corporate offices. Any notice required to be delivered to the Participant under this Agreement shall be in writing and addressed to the Participant at the Participant’s address as shown in the records of the Company. Either party may designate another address in writing (or by such other method approved by the Company) from time to time.
15. Governing Law. This Agreement will be construed and interpreted in accordance with the laws of the British Virgin Islands without regard to conflict of law principles.
16. Interpretation. Any dispute regarding the interpretation of this Agreement shall be submitted by the Participant or the Company to the Committee for review. The resolution of such dispute by the Committee shall be final and binding on the Participant and the Company.
17. Options Subject to Plan. This Agreement is subject to the Plan and is not required to be approved by the Company’s shareholders. The terms and provisions of the Plan as it may be amended from time to time are hereby incorporated herein by reference. In the event of a conflict between any term or provision contained herein and a term or provision of the Plan, the applicable terms and provisions of the Plan will govern and prevail.
18. Successors and Assigns. The Company may assign any of its rights under this Agreement. This Agreement will be binding upon and inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer set forth herein, this Agreement will be binding upon the Participant and the Participant’s beneficiaries, executors, administrators and the person(s) to whom the Option may be transferred by will or the laws of descent or distribution.
19. Severability. The invalidity or unenforceability of any provision of the Plan or this Agreement shall not affect the validity or enforceability of any other provision of the Plan or this Agreement, and each provision of the Plan and this Agreement shall be severable and enforceable to the extent permitted by law.
20. Discretionary Nature of Plan. The Plan is discretionary and may be amended, cancelled or terminated by the Company at any time, in its discretion. The grant of the Option in this Agreement does not create any contractual right or other right to receive any Options or other Awards in the future. Future Awards, if any, will be at the sole discretion of the Company. Any amendment, modification, or termination of the Plan shall not constitute a change or impairment of the terms and conditions of the Participant’s employment with the Company.
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21. Amendment. The Committee has the right to amend, alter, suspend, discontinue or cancel the Option, prospectively or retroactively; provided, that, no such amendment shall adversely affect the Participant’s material rights under this Agreement without the Participant’s consent.
22. No Impact on Other Benefits. The value of the Participant’s Option is not part of his or her normal or expected compensation for purposes of calculating any severance, retirement, welfare, insurance or similar employee benefit.
23. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which together will constitute one and the same instrument. Counterpart signature pages to this Agreement transmitted by facsimile transmission, by electronic mail in portable document format (.pdf), or by any other electronic means intended to preserve the original graphic and pictorial appearance of a document, will have the same effect as physical delivery of the paper document bearing an original signature.
24. Acceptance. The Participant hereby acknowledges receipt of a copy of the Plan and this Agreement. The Participant has read and understands the terms and provisions thereof, and accepts the Option subject to all of the terms and conditions of the Plan and this Agreement. The Participant acknowledges that there may be adverse tax consequences upon exercise of the Option or disposition of the underlying shares and that the Participant should consult a tax advisor prior to such exercise or disposition.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the Grant Date set forth above.
| COMPANY: | |||
| CONCORDE INTERNATIONAL GROUP LTD | |||
| By: | |||
| Name: | |||
| Title: | Chief Executive officer | ||
| Address: | |||
| PARTICIPANT: | |||
| (Signature) | |||
| (Name) | |||
| Address: | |||
Exhibit A
SHARE OPTION EXERCISE AGREEMENT
This Share Option Exercise Agreement (this “Exercise Agreement”) is made and entered into as of _______________ by and between Concorde International Group Ltd, a BVI business company incorporated under the laws of the British Virgin Islands (the “Company”), and the purchaser named below (the “Purchaser”). Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Concorde International Group Ltd 2024 Equity Incentive Plan (the “Plan”).
| Purchaser Name: |
| Address: |
| Social Security Number: |
1. Option. The Purchaser was granted an option (the “Option”) to purchase Class A Ordinary Shares pursuant to the terms of the Plan and the Share Option Agreement between the Company and the Purchaser dated ________________, as follows:
Type of Option (check one):
☐ Incentive Share Option
☐ Non-qualified Share Option
Grant Date:___________________________________
Number of Option shares:________________________
Exercise Price per share:_________________________
Expiration Date:_______________________________
2. Exercise of Option. The Purchaser hereby elects to exercise the Option to purchase __________ Class A Ordinary Shares (“Shares”), all of which are vested pursuant to the terms of the Share Option Agreement. The total Exercise Price for all of the Shares is ________ (Total Shares times Exercise Price per Share).
3. Payment of the Exercise Price; Delivery of Required Documents. The Purchaser encloses payment in full of the total Exercise Price for the Shares in the following form(s), as authorized by the Share Option Agreement (check and complete as appropriate):
☐ In cash (by certified or bank check) in the amount of $_____, receipt of which is acknowledged by the Company.
☐ By delivery of ______ previously acquired Class A Ordinary Shares together with a duly executed instrument of transfer for transfer to the Company.
☐ Through a Stock for Stock Exchange (Contact Company CFO).
☐ By a broker-assisted cashless exercise (Contact Company CFO).
☐ By reduction in the number of Shares otherwise deliverable upon exercise with a Fair Market Value equal to the total Exercise Price (Contact Company CFO).
The Purchaser will deliver any other documents that the Company requires.
4. Tax Withholding. The Purchaser authorizes payroll withholding and will make arrangements satisfactory to the Company to pay or provide for any applicable federal, state and local withholding obligations of the Company. The Purchaser may satisfy any federal, state or local tax withholding obligation relating to the exercise of the Option by any of the methods set forth in the Plan or Share Option Agreement. The Purchaser understands that ownership of the Shares will not be transferred to the Purchaser until the total Exercise Price and all applicable withholding taxes have been paid.
5. Notice of Disqualifying Disposition. If the Option is an Incentive Share Option, the Purchaser agrees to promptly notify the Chief Executive Officer at the Company if he or she transfers any of the Shares purchased pursuant to this Exercise Agreement within one (1) year from the date of exercise of the Option or within two (2) years from the Grant Date.
6. Tax Consequences. The Purchaser understands that there may be adverse federal or state tax consequences as a result of his or her purchase or disposition of the Shares. The Purchaser also acknowledges that he or she has been advised to consult with a tax advisor in connection with the purchase or disposition of the Shares. The Purchaser is not relying on the Company for tax advice.
7. Compliance with Law. The issuance and transfer of the Shares will be subject to, and conditioned upon compliance by the Company and the Purchaser with, all applicable federal, state and local laws and regulations and all applicable requirements of any stock exchange or automated quotation system on which the Shares may be listed or quoted at the time of such issuance or transfer.
8. Successors and Assigns; Binding Effect. The Company may assign any of its rights under this Exercise Agreement. This Exercise Agreement will be binding upon and inure to the benefit of the successors and assigns of the Company. This Exercise Agreement will be binding upon the Purchaser and the Purchaser’s heirs, executors, legal representatives, successors and assigns.
9. Governing Law. This Exercise Agreement will be construed and interpreted in accordance with the laws of the British Virgin Islands without regard to conflict of law principles.
10. Severability. The invalidity or unenforceability of any provision of this Exercise Agreement shall not affect the validity or enforceability of any other provision, and each provision of this Exercise Agreement shall be severable and enforceable to the extent permitted by law.
11. Counterparts. This Exercise Agreement may be executed in counterparts, each of which shall be deemed an original but all of which together will constitute one and the same instrument.
12. Notice. Any notice required to be delivered to the Company under this Exercise Agreement shall be in writing and addressed to the Chief Executive Officer of the Company at the Company’s principal corporate offices. Any notice required to be delivered to the Purchaser under this Exercise Agreement shall be in writing and addressed to the Purchaser at the Purchaser’s address as set forth above. Either party may designate another address in writing (or by such other method approved by the Company) from time to time.
13. Acknowledgement. The Purchaser understands that he or she is purchasing the Shares pursuant to the terms and conditions of the Plan and the Share Option Agreement, copies of which the Purchaser has read and understands.
IN WITNESS WHEREOF, the parties have executed this Exercise Agreement as of the date first above written.
| COMPANY: | ||
| CONCORDE INTERNATIONAL GROUP LTD | ||
| By: | ||
| Name: | ||
| Title: | Chief Executive Officer | |
| PURCHASER: | ||
| [Name] | ||
Exhibit 10.8
CONCORDE INTERNATIONAL GROUP LTD
2024 EQUITY INCENTIVE PLAN
NOTICE OF RESTRICTED SHARE AWARD
Capitalized but otherwise undefined terms in this Notice of Restricted Share Award and the attached Restricted Share Award Agreement shall have the same defined meanings as in the Concorde International Group Ltd 2024 Equity Incentive Plan (the “Plan”).
| Grantee Name: | Address: |
You have been granted Restricted Shares subject to the terms and conditions of the Plan and the attached Restricted Share Award Agreement, as follows:
| Date of Grant: | |||
| Vesting Commencement Date | |||
| (if different from Date of Grant): | |||
| Purchase Price per Share: | |||
| Total Number of Shares Granted: | |||
| Agreement Date: | |||
| Vesting Schedule: |
RESTRICTED SHARE AWARD AGREEMENT
This Restricted Share Award Agreement (this “Agreement”) is made and entered into as of _______________ (the “Grant Date”) by and between Concorde International Group Ltd, a British Virgin Islands business company (the “Company”), and ______________ (the “Grantee”).
WHEREAS, the Company has adopted the Concorde International Group Ltd 2024 Equity Incentive Plan (the “Plan”) pursuant to which awards of Restricted Share may be granted; and
WHEREAS, the Committee has determined that it is in the best interests of the Company and its shareholders to grant the award of Restricted Share provided for herein.
NOW, THEREFORE, the parties hereto, intending to be legally bound, agree as follows:
1. Grant of Restricted Shares. Pursuant to Section 7.2 of the Plan, the Company hereby issues to the Grantee on the Grant Date a Restricted Share Award consisting of, in the aggregate, _________ Class A Ordinary Shares of the Company (the “Restricted Shares”), on the terms and conditions and subject to the restrictions set forth in this Agreement and the Plan. Capitalized terms that are used but not defined herein have the meaning ascribed to them in the Plan.
2. Consideration. The grant of the Restricted Shares is made in consideration of the services to be rendered by the Grantee to the Company.
3. Restricted Period; Vesting.
3.1. Except as otherwise provided herein, provided that the Grantee remains in Continuous Service through the applicable vesting date, and further provided that any additional conditions and performance goals set forth in Schedule I have been satisfied, the Restricted Shares will vest in accordance with the following schedule:
| Vesting Date | Restricted Shares | |
| [VESTING DATE] | [NUMBER OR PERCENTAGE OF SHARES THAT VEST ON THE VESTING DATE] | |
| [VESTING DATE] | [NUMBER OR PERCENTAGE OF SHARES THAT VEST ON THE VESTING DATE] |
The period over which the Restricted Share vests is referred to as the “Restricted Period”.
3.2. The foregoing vesting schedule notwithstanding, if the Grantee’s Continuous Service terminates for any reason at any time before all of his or her Restricted Shares have vested other than death or retirement (in the case of a Director), termination of the Grantee’s Continuous Service is terminated by the Company or an Affiliate for Disability, the Grantee’s unvested Restricted Shares shall be automatically forfeited upon such termination of Continuous Service and neither the Company nor any Affiliate shall have any further obligations to the Grantee under this Agreement.
3.3. The foregoing vesting schedule notwithstanding, in the event of the Grantee’s death or if the Grantee’s Continuous Service is terminated by the Company or an Affiliate for Disability, 100% of the unvested Restricted Shares shall vest as of the date of such termination.
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3.4. The foregoing vesting schedule notwithstanding, if the Grantee is an Outside Director, 100% of the unvested Restricted Shares shall vest on the Grantee’s attainment of mandatory retirement age for members of the Board, if any.
4. Restrictions. Subject to any exceptions set forth in this Agreement or the Plan, during the Restricted Period, the Restricted Shares or the rights relating thereto may not be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by the Grantee. Any attempt to assign, alienate, pledge, attach, sell or otherwise transfer or encumber the Restricted Shares or the rights relating thereto during the Restricted Period shall be wholly ineffective and, if any such attempt is made, the Restricted Shares will be forfeited by the Grantee and all of the Grantee’s rights to such shares shall immediately terminate without any payment or consideration by the Company.
5. Rights as Shareholder; Dividends.
5.1. The Grantee shall be the record owner of the Restricted Shares until the Class A Ordinary Shares are sold or otherwise disposed of, and shall be entitled to all of the rights of a shareholder of the Company including, without limitation, the right to vote such shares and receive all dividends or other distributions paid with respect to such shares. Notwithstanding the foregoing, any dividends or other distributions shall be subject to the same restrictions on transferability as the Restricted Shares with respect to which they were paid.
5.2. The Company may issue share certificates or evidence the Grantee’s interest by using a restricted book entry account with the Company’s transfer agent. Physical possession or custody of any share certificates that are issued may be retained by the Company until such time as the Restricted Shares vest.
5.3. If the Grantee forfeits any rights he or she has under this Agreement in accordance with Section 3, the Grantee shall, on the date of such forfeiture, no longer have any rights as a shareholder with respect to the Restricted Shares and shall no longer be entitled to vote or receive dividends on such shares.
6. Grantee Representations.
Grantee represents to the Company the following:
6.1. Acknowledgement of Terms. Grantee acknowledges that Grantee has received, read and understood the Plan and the Agreement and agrees to abide by and be bound by their terms and conditions.
6.2. Reliance on Exemptions. The Grantee understands that the Restricted Shares are being offered and sold to it in reliance upon specific exemptions from the registration requirements of United States federal and state securities laws and that the Company is relying upon the truth and accuracy of, and the Grantee’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of the Grantee set forth herein in order to determine the availability of such exemptions and the eligibility of the Grantee to receive the Restricted Shares. All of the information which the Grantee has provided to the Company is true, correct and complete as of the date this Agreement is signed.
6.3. Restrictions on Transfer. If, at the time of grant of the Restricted Shares, there does not exist a registration statement under the US Securities Act of 1933, as amended (the “Securities Act”), which registration statement shall have become effective and is current with respect to the Restricted Shares Grantee acknowledges that the Restricted Shares to be issued to Grantee must be held indefinitely unless subsequently registered and qualified under the Securities Act, or unless an exemption from registration and qualification is otherwise available.
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Grantee acknowledges that the Restricted Shares may be subject to such restrictions, conditions or limitations as the Company determines appropriate as to the timing and manner of any resales by Grantee or other subsequent transfers by Grantee of any Restricted Shares, including without limitation (a) restrictions under an insider trading policy, (b) restrictions designed to delay and/or coordinate the timing and manner of sales by Grantee, and (c) restrictions as to the use of a specified brokerage firm for such resales or other transfers.
6.4. Grantee Status.
6.4.1. U.S. Investor Investment Representations. If such Grantee is a U.S. Person, at the time such Grantee was offered the Restricted Shares, she/he was, and at the date hereof is, an “accredited investor” as defined in Rule 501(a) under the Securities Act, and has initialed the category of Accredited Investor applicable to Grantee on the Grantee Questionnaire attached as Exhibit A to the Agreement. Grantee is purchasing the Restricted Shares for Grantee’s own account and not with a view to the resale or distribution thereof. At no time was Grantee presented with or solicited by any publicly issued or circulated newspaper, mail, radio, television or other form of general advertising or solicitation in connection with the offer, sale and issue of the Restricted Shares. Grantee is not required to be registered as a broker-dealer under Section 15 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and is not affiliated with any broker-dealer registered under Section 15 of the Exchange Act.
6.4.2 Non-U.S. Investor Investment Representations. If such Grantee is not a U.S. Person (as such term is defined in Rule 902(k) of Regulation S), such Grantee shall initial the category for foreign persons on the Grantee Questionnaire attached as Exhibit A to the Agreement and such Grantee
(i) acknowledges that the certificate(s) or book entry account representing or evidencing the Restricted Shares contain a customary restrictive legend restricting the offer, sale or transfer of any Restricted Shares except in accordance with the provisions of Regulation S, pursuant to registration under the Securities Act, or pursuant to an available exemption from registration,
(ii) is purchasing the Restricted Shares for Grantee’s own account and not with a view to the resale or distribution thereof,
(iii) at no time was presented with or solicited by any publicly issued or circulated newspaper, mail, radio, television or other form of general advertising or solicitation in connection with the offer, sale and issue of the Restricted Shares,
(iv) is not required to be registered as a broker-dealer under Section 15 of the Exchange Act, and is not affiliated with any broker-dealer registered under Section 15 of the Exchange Act,
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(v) agrees that any subsequent offer for sale or sale of any such Restricted Shares shall be made pursuant to either (a) a registration statement under the Securities Act, which registration statement shall have become effective and shall be current with respect to the Restricted Shares being offered and sold, or (b) an exemption from the registration statement requirements of the Securities Act, including the provisions of Regulation S promulgated under the Act (“Regulation S”), provided that Grantee is not a U.S. person (as defined in Regulation S), is not acquiring the Restricted Shares for the account or benefit of a U.S. person, is the sole beneficial owner of the Restricted Shares and has not pre-arranged any sale with an investor in the United States, will resell the Restricted Shares only in accordance with the provisions of Regulation S and will not engage in any hedging transactions with regard to the Restricted Shares unless in compliance with the Act, but in claiming the exemption in (b), Grantee shall, prior to any offer for sale or sale of such Restricted Shares, obtain a favorable written opinion from counsel for or reasonably approved by the Company as to the applicability of such exemption, and the certificate evidencing such Restricted Shares shall bear an additional legend to the effect of the foregoing substantially as follows:
“THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE “SECURITIES ACT”) OR UNDER APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF OTHER THAN IN COMPLIANCE WITH AN AVAILABLE EXEMPTION FROM THE REGISTRATION STATEMENT REQUIREMENTS OF THE SECURITIES ACT, INCLUDING THE PROVISIONS OF REGULATION S PROMULGATED UNDER THE SECURITIES ACT, UNLESS REGISTERED UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS, PROVIDED THAT THE SELLER DELIVERS TO THE COMPANY AN OPINION OF COUNSEL (WHICH OPINION IS REASONABLY SATISFACTORY TO THE COMPANY) CONFIRMING THE AVAILABILITY OF SUCH EXEMPTION. THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT SECURED BY SUCH SECURITIES TO THE EXTENT PERMITTED BY APPLICABLE FEDERAL AND STATE SECURITIES LAWS.”
(vi) represents that the offer to purchase the Restricted Shares was made to such Grantee outside of the United States, and such Grantee was, at the time of the offer and will be, at the time of the sale and is now, outside the United States, (a) has not engaged in or directed any unsolicited offers to purchase Restricted Shares in the United States, (b) is neither a U.S. Person nor a Distributor (as such terms are defined in Rule 902(k) and 902(d), respectively, of Regulation S), and
(vii) is familiar with and understands the terms and conditions and requirements contained in Regulation S, specifically, without limitation, the Grantee understands that the statutory basis for the exemption claimed for the sale of the Restricted Shares would not be present if the sale, although in technical compliance with Regulation S, is part of a plan or scheme to evade the registration provisions of the Securities Act.
7. Exemption from Registration. Subject to the accuracy of Grantee’s representations and warranties set forth in the Section 6, the issuance of Restricted Shares by the Company to the Grantee will not require registration under the Securities Act. The Company is issuing Restricted Shares in accordance with and in reliance upon the exemption from securities registration afforded, inter alia, by Rule 506 under Regulation D or Rule 902 under Regulation S as promulgated by the Commission under the Securities Act.
8. No Right to Continued Service. Neither the Plan nor this Agreement shall confer upon the Grantee any right to be retained in any position, as an Employee, Consultant or Director of the Company. Further, nothing in the Plan or this Agreement shall be construed to limit the discretion of the Company to terminate the Grantee’s Continuous Service at any time, with or without Cause.
9. Adjustments. If any change is made to the outstanding Class A Ordinary Shares or the capital structure of the Company, if required, the Class A Ordinary Shares shall be adjusted or terminated in any manner as contemplated by Section 11 of the Plan.
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10. Tax Liability and Withholding.
10.1. The Grantee shall be required to pay to the Company, and the Company shall have the right to deduct from any compensation paid to the Grantee pursuant to the Plan, the amount of any required withholding taxes in respect of the Restricted Shares and to take all such other action as the Committee deems necessary to satisfy all obligations for the payment of such withholding taxes. The Committee may permit the Grantee to satisfy any federal, state or local tax withholding obligation by any of the following means, or by a combination of such means: (a) tendering a cash payment; (b) authorizing the Company to withhold Class A Ordinary Shares from the Class A Ordinary Shares otherwise issuable or deliverable to the Grantee as a result of the vesting of the Restricted Shares; provided, however, that no Class A Ordinary Shares shall be withheld with a value exceeding the minimum amount of tax required to be withheld by law; or (c) delivering to the Company previously owned and unencumbered Class A Ordinary Shares.
10.2. Notwithstanding any action the Company takes with respect to any or all income tax, social insurance, payroll tax, or other tax-related withholding (“Tax-Related Items”), the ultimate liability for all Tax-Related Items is and remains the Grantee’s responsibility and the Company (a) makes no representation or undertakings regarding the treatment of any Tax-Related Items in connection with the grant or vesting of the Restricted Shares or the subsequent sale of any shares; and (b) does not commit to structure the Restricted Shares to reduce or eliminate the Grantee’s liability for Tax-Related Items.
11. Section 83(b) Election. The Grantee may make an election under Code Section 83(b) (a “Section 83(b) Election”) with respect to the Restricted Shares. Any such election must be made within thirty (30) days after the Grant Date. If the Grantee elects to make a Section 83(b) Election, the Grantee shall provide the Company with a copy of an executed version and satisfactory evidence of the filing of the executed Section 83(b) Election with the US Internal Revenue Service. The Grantee agrees to assume full responsibility for ensuring that the Section 83(b) Election is actually and timely filed with the US Internal Revenue Service and for all tax consequences resulting from the Section 83(b) Election.
12. Non-competition and Non-solicitation.
12.1. In consideration of the Restricted Shares, the Grantee agrees and covenants not to:
(a) contribute his or her knowledge, directly or indirectly, in whole or in part, as an employee, officer, owner, manager, advisor, consultant, agent, partner, director, shareholder, volunteer, intern or in any other similar capacity to an entity engaged in the same or similar business as the Company and its Affiliates for a period of one year following the Grantee’s termination of Continuous Service;
(b) directly or indirectly, solicit, hire, recruit, attempt to hire or recruit, or induce the termination of employment of any employee of the Company or its Affiliates for one year following the Grantee’s termination of Continuous Service; or
(c) directly or indirectly, solicit, contact (including, but not limited to, e-mail, regular mail, express mail, telephone, fax, and instant message), attempt to contact or meet with the current, former or prospective customers of the Company or any of its Affiliates for purposes of offering or accepting goods or services similar to or competitive with those offered by the Company or any of its Affiliates for a period of one year following the Grantee’s termination of Continuous Service.
12.2. If the Grantee breaches any of the covenants set forth in Section 10.1:
(a) all unvested Restricted Shares shall be immediately forfeited; and
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(b) the Company shall have the right, but not the obligation, during the one-year period following the termination of the Participant’s Continuous Service to acquire any vested Restricted Shares that vested during the one-year period preceding the termination of the Participant’s Continuous Service that continue to be held by the Participant at the purchase price, if any, paid by the Participant for such vested Restricted Shares; and
(c) the Grantee hereby consents and agrees that the Company shall be entitled to seek, in addition to other available remedies, a temporary or permanent injunction or other equitable relief against such breach or threatened breach from any court of competent jurisdiction, without the necessity of showing any actual damages or that money damages would not afford an adequate remedy, and without the necessity of posting any bond or other security. The aforementioned equitable relief shall be in addition to, not in lieu of, legal remedies, monetary damages or other available forms of relief.
13. Compliance with Law. The issuance and transfer of Class A Ordinary Shares shall be subject to compliance by the Company and the Grantee with laws of British Virgin Islands as they relate to the Company and its Class A Ordinary Shares, with all applicable requirements of federal and state securities laws and with all applicable requirements of any stock exchange on which the Company’s Class A Ordinary Shares may be listed. No Class A Ordinary Shares shall be issued or transferred unless and until any then applicable requirements of British Virgin Islands laws, state and federal laws and regulatory agencies have been fully complied with to the satisfaction of the Company and its counsel. The Grantee understands that the Company is under no obligation to register the Class A Ordinary Shares with the Securities and Exchange Commission, any state securities commission or any stock exchange to effect such compliance.
14. Legends. A legend may be placed on any certificate(s) or other document(s) delivered to the Grantee indicating restrictions on transferability of the Restricted Shares pursuant to this Agreement or any other restrictions that the Committee may deem advisable under the rules, regulations and other requirements of the Securities and Exchange Commission, any applicable federal or state securities laws or any stock exchange on which the Class A Ordinary Shares are then listed or quoted.
15. Notices. Any notice required to be delivered to the Company under this Agreement shall be in writing and addressed to the Chief Executive Officer of the Company at the Company’s principal corporate offices. Any notice required to be delivered to the Grantee under this Agreement shall be in writing and addressed to the Grantee at the Grantee’s address as shown in the records of the Company. Either party may designate another address in writing (or by such other method approved by the Company) from time to time.
16. Governing Law. This Agreement will be construed and interpreted in accordance with the laws of the British Virgin Islands without regard to conflict of law principles.
17. Interpretation. Any dispute regarding the interpretation of this Agreement shall be submitted by the Grantee or the Company to the Committee for review. The resolution of such dispute by the Committee shall be final and binding on the Grantee and the Company.
18. Restricted Shares Subject to Plan. This Agreement is subject to the Plan and is not required to be approved by the Company’s shareholders. The terms and provisions of the Plan as it may be amended from time to time are hereby incorporated herein by reference. In the event of a conflict between any term or provision contained herein and a term or provision of the Plan, the applicable terms and provisions of the Plan will govern and prevail.
19. Successors and Assigns. The Company may assign any of its rights under this Agreement. This Agreement will be binding upon and inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer set forth herein, this Agreement will be binding upon the Grantee and the Grantee’s beneficiaries, executors, administrators and the person(s) to whom the Restricted Shares may be transferred by will or the laws of descent or distribution.
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20. Severability. The invalidity or unenforceability of any provision of the Plan or this Agreement shall not affect the validity or enforceability of any other provision of the Plan or this Agreement, and each provision of the Plan and this Agreement shall be severable and enforceable to the extent permitted by law.
21. Discretionary Nature of Plan. The Plan is discretionary and may be amended, cancelled or terminated by the Company at any time, in its discretion. The grant of the Restricted Shares in this Agreement does not create any contractual right or other right to receive any Restricted Shares or other Awards in the future. Future Awards, if any, will be at the sole discretion of the Company. Any amendment, modification, or termination of the Plan shall not constitute a change or impairment of the terms and conditions of the Grantee’s employment with the Company.
22. Amendment. The Committee has the right to amend, alter, suspend, discontinue or cancel the Restricted Shares, prospectively or retroactively; provided, that, no such amendment shall adversely affect the Grantee’s material rights under this Agreement without the Grantee’s consent.
23. No Impact on Other Benefits. The value of the Grantee’s Restricted Shares is not part of his normal or expected compensation for purposes of calculating any severance, retirement, welfare, insurance or similar employee benefit.
24. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which together will constitute one and the same instrument. Counterpart signature pages to this Agreement transmitted by facsimile transmission, by electronic mail in portable document format (.pdf), or by any other electronic means intended to preserve the original graphic and pictorial appearance of a document, will have the same effect as physical delivery of the paper document bearing an original signature.
25. Acceptance. The Grantee hereby acknowledges receipt of a copy of the Plan and this Agreement. The Grantee has read and understands the terms and provisions thereof, and accepts the Restricted Shares subject to all of the terms and conditions of the Plan and this Agreement. The Grantee acknowledges that there may be adverse tax consequences upon the grant or vesting of the Restricted Shares or disposition of the shares and that the Grantee has been advised to consult a tax advisor prior to such grant, vesting or disposition.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.
| COMPANY: | |||
| CONCORDE INTERNATIONAL GROUP LTD | |||
| By: | |||
| Name: | |||
| Title: | Chief Executive Officer | ||
| Address: | |||
| GRANTEE: | |||
| (Signature) | |||
| (Name) | |||
| Address: | |||
| SSN: | |||
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Exhibit A
GRANTEE Questionnaire
Non-U.S. Persons:
(A) ____ I hereby represent and warrant that I AM NOT a U.S. domestic Person.
U.S. Persons:
(B) ____ I hereby represent and warrant that I AM a U.S. domestic Person. (Please also indicate below which category of Accredited Investor is applicable)
[To be completed below ONLY IF you ARE a U.S. Person]
The purpose of this Questionnaire is to determine whether you are an “accredited investor” as that term is defined in Rule 501(a) of Regulation D promulgated under the Securities Act of 1933, as amended (the “Securities Act”), in connection with your Restricted Share Award (“Award”) from Concorde International Group Ltd (the “Company”).
Your answers to the questions contained herein must be true and correct in all respects, and a false representation by you may constitute a violation of law. All information supplied will be treated in strict confidence. This Questionnaire may be provided to such parties as deemed appropriate by the Company to establish the availability of an exemption from registration under the Securities Act and under state securities laws.
A. GENERAL INFORMATION
PLEASE ANSWER EACH QUESTION. (Please print or type.) If the answer to any question is “None” or “Not Applicable,” please so state.
| 1. | Name: | |||||
| 2. | Address: | |||||
| Number and street (no p.o. boxes) | ||||||
| City, state and zip code | ||||||
| 3. | Telephone: | Home | Work | |||
| 4. | Fax (if any): | Home | Work | |||
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| 5. | Email address: | |
| 6. | Send mail to: (check one): | Home | Office | |||
| Other: (address) | ||||||
| 7. | Social Security Number (or, if entity, EIN): | |||||
| 8. | Date of Birth: | |||||
| 9. | Account Registration Type (check one): | |||||
| ☐ Individual Account | ||||||
| ☐ Joint Account | ||||||
| ☐ Individual Retirement Account | ||||||
| ☐ Corporation/Partnership/Other | ||||||
| ☐ Trust | ||||||
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B. ACCREDITED INVESTOR QUALIFICATION
The undersigned understands that the representations contained below are made for the purpose of qualifying him or her as an “accredited investor” as that term is defined in Regulation D of the General Rules and Regulations promulgated under the Securities Act and for the purpose of inducing a sale of the securities to him or her. The undersigned hereby represents that the statement or statements initialed below are true and correct in all respects. The undersigned understands that a false representation may constitute a violation of law, and that any person who suffers damage as a result of a false representation may have a claim against the undersigned for damages.
| ☐ | The undersigned certifies that he or she is an “accredited investor” by virtue of being at least one of the following (CHECK ALL THAT ARE APPLICABLE): |
| ☐ (1) | I had individual income in excess of $200,000 in each of the two most recent years or joint income with my or spousal equivalent in excess of $300,000 in each of those years and have a reasonable expectation of reaching the same income level in the current year. |
| ☐ (2) | My individual net worth, or joint net worth with my spouse or spousal equivalent, exceeds $1,000,000. For purposes of calculating net worth under this paragraph my primary residence is not included as an asset; indebtedness that is secured by my primary residence, up to the estimated fair market value of the primary residence at the time of the purchase of securities, is not included as a liability (except that if the amount of such indebtedness outstanding at the time of purchase of securities exceeds the amount outstanding 60 days before such time, other than as a result of the acquisition of the primary residence, the amount of such excess is included as a liability); and indebtedness that is secured by my primary residence in excess of the estimated fair market value of the primary residence at the time of the purchase of securities is included as a liability. |
| ☐ (3) | I am a director or executive officer of the Company. |
| ☐ (4) | I hold one of the following licenses in good standing: General Securities Representative license (Series 7), the Private Securities Offerings Representative license (Series 82), or the Investment Adviser Representative license (Series 65). |
☐ The undersigned is not an “accredited investor”.
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C. REPRESENTATIONS AND SIGNATURE
The undersigned hereby represents that all the information supplied herein is true, correct and complete as of the date hereof. The undersigned understands that the answers to the questions submitted will be relied on by the Company in connection with the Award. The undersigned agrees to notify the Company immediately of any change in the foregoing answers.
| Print Name | ||
| By: | ||
| Signature of Authorized Signatory | ||
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Exhibit 10.9
RESTRICTED SHARE UNIT AWARD AGREEMENT
This Restricted Share Unit Award Agreement (this “Agreement”) is made and entered into as of _______________ (the “Grant Date”), by and between Concorde International Group Ltd, a British Virgin Islands business company (the “Company”), and ______________ (the “Grantee”).
WHEREAS, the Company has adopted the Concorde International Group Ltd 2024 Equity Incentive Plan (the “Plan”) pursuant to which awards of Restricted Share Units may be granted; and
WHEREAS, the Committee has determined that it is in the best interests of the Company and its shareholders to grant the award of Restricted Share Units provided for herein.
NOW, THEREFORE, the parties hereto, intending to be legally bound, agree as follows:
1. Grant of Restricted Share Units. Pursuant to Section 7.2 of the Plan, the Company hereby issues to the Grantee on the Grant Date _______________ Restricted Share Units (the “Restricted Share Units”). Each Restricted Share Unit represents an unfunded, unsecured right to receive one Class A Ordinary Share of the Company on the Payment Date(s) specified in Section 3.4, subject to the terms and conditions set forth in this Agreement and the Plan. Capitalized terms that are used but not defined herein have the meaning ascribed to them in the Plan.
2. Consideration. The grant of the Restricted Share Units is made in consideration of the services to be rendered by the Grantee to the Company.
3. Vesting; Payment.
3.1. Except as otherwise provided herein, provided that the Grantee remains in Continuous Service through the applicable vesting date, the Restricted Share Units will vest in accordance with the following schedule (each, a “Vesting Date”):
| Vesting Date | Restricted Share Units | |
| [VESTING DATE] | [NUMBER OR PERCENTAGE OF SHARES THAT VEST ON THE VESTING DATE] | |
| [VESTING DATE] | [NUMBER OR PERCENTAGE OF SHARES THAT VEST ON THE VESTING DATE] |
3.2. The foregoing vesting schedule notwithstanding, if the Grantee’s Continuous Service terminates for any reason at any time before all of his or her Restricted Share Units have vested, the Grantee’s unvested Restricted Share Units shall be automatically forfeited upon such termination of Continuous Service and neither the Company nor any Affiliate shall have any further obligations to the Grantee under this Agreement.
3.3. The foregoing vesting schedule notwithstanding, in the event of the Grantee’s death or if the Grantee’s Continuous Service is terminated by the Company or an Affiliate due to the Grantee’s Disability, 100% of the unvested Restricted Share Units shall vest as of the date of such termination.
3.4. The Company shall, as soon as reasonably, practicable following a Vesting Date (and in no event later than March 15th of the calendar year following the calendar year in which the Applicable Vesting Date occurs) (each a “Payment Date”), deliver (or cause to be delivered) to the Participant one Class A Ordinary Share with respect to each vested Restricted Share Unit, as settlement of such Restricted Share Unit and each such Restricted Share Unit shall thereafter be cancelled.
4. Restricted Share Unit Transfer Restrictions. Subject to any exceptions set forth in this Agreement or the Plan, the Restricted Share Units may not be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by the Grantee. Any attempt to assign, alienate, pledge, attach, sell or otherwise transfer or encumber the Restricted Share Units or the rights relating thereto shall be wholly ineffective and, if any such attempt is made, the Restricted Share Units shall be forfeited by the Grantee and all of the Grantee’s rights to such Restricted Share Units shall immediately terminate without any payment or consideration by the Company.
5. Rights as Shareholder; Dividend Equivalents.
5.1. The Grantee shall have no rights as a shareholder of the Company with respect to Class A Ordinary Shares covered by the Restricted Share Units.
5.2. With respect to ordinary cash dividends in respect of Class A Ordinary Shares covered by any outstanding Restricted Share Units, the Grantee shall have the right to receive an amount in cash equal to (i) the amount of any ordinary cash dividend paid with respect to one Class A Ordinary Share, multiplied by (ii) the number of Class A Ordinary Shares covered by such Restricted Share Units (a “Dividend Equivalent”). A Dividend Equivalent shall be subject to the same vesting restrictions as the Restricted Share Units to which such Dividend Equivalent relates, as set forth in Section 3.1. Unless otherwise determined by the Committee, Dividend Equivalents shall be held, without interest thereon, until delivered to the Grantee within 30 days after the date the Restricted Share Units to which such Dividend Equivalents related vest, in each case, subject to Section 8. Any Dividend Equivalents in respect of Restricted Share Units that do not vest, shall be forfeited and retained by the Company. In no event shall a Dividend Equivalent be paid that would result in the Grantee receiving both the Dividend Equivalent and the actual dividend with respect to a Restricted Share Unit and the corresponding Class A Ordinary Share.
6. No Right to Continued Service. Neither the Plan nor this Agreement shall confer upon the Grantee any right to be retained in any position, as an Employee, Consultant or Director of the Company. Further, nothing in the Plan or this Agreement shall be construed to limit the discretion of the Company to terminate the Grantee’s Continuous Service at any time, with or without Cause.
7. Adjustments. If any change is made to the outstanding Class A Ordinary Shares or the capital structure of the Company, if required, the Class A Ordinary Shares underlying the Restricted Share Units shall be adjusted or terminated in any manner as contemplated by Section 11 of the Plan.
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8. Tax Liability and Withholding.
8.1. Solely to the extent applicable, the Grantee shall be required to pay to the Company, and the Company shall have the right to deduct from any compensation paid to the Grantee pursuant to the Plan, the amount of any required withholding taxes in respect of the Restricted Share Units and to take all such other action as the Committee deems necessary to satisfy all obligations for the payment of such withholding taxes. The Committee may permit the Grantee to satisfy any federal, state or local tax withholding obligation by any of the following means, or by a combination of such means: (a) tendering a cash payment; (b) authorizing the Company to withhold Class A Ordinary Shares from the Class A Ordinary Shares otherwise issuable or deliverable to the Grantee as a result of the settlement of the Restricted Stock Units; provided, however, that no Class A Ordinary Shares shall be withheld with a value exceeding the minimum amount of tax required to be withheld by law; or (c) delivering to the Company previously owned and unencumbered Class A Ordinary Shares. Notwithstanding the foregoing, if the Company’s Class A Ordinary Shares are publicly-traded, in the event a taxable event with respect to this Agreement occurs during a “blackout” period (whether scheduled or unscheduled) during which Participants in the Plan, including the Grantee, are prohibited by Company policy from selling Class A Ordinary Shares, the Grantee’s statutorily required withholding obligation will be satisfied by the Company automatically withholding from the Class A Ordinary Shares otherwise deliverable to the Grantee a number of Class A Ordinary Shares having an aggregate Fair Market Value equal to the Grantee’s statutorily required withholding obligation (with any fraction of one Class A Ordinary Share required to satisfy such obligation being disregarded and the amount due paid instead in cash by the Participant); provided, however, the Grantee may elect, by written notice to the Committee during an open trading window, to satisfy his or her applicable federal, state or local tax withholding obligation, in which case the Grantee shall be required, prior to any applicable taxable event, to remit to the Company an amount in cash sufficient to satisfy his or her applicable federal, state or local tax withholding obligations in connection with such taxable event.
8.2. Notwithstanding any action the Company takes with respect to any or all income tax, social insurance, payroll tax, or other tax-related withholding (“Tax-Related Items”), the ultimate liability for all Tax-Related Items is and remains the Grantee’s responsibility and the Company (a) makes no representation or undertakings regarding the treatment of any Tax-Related Items in connection with the grant, vesting, or settlement of the Restricted Share Units or the subsequent sale of any shares; and (b) does not commit to structure the Restricted Share Units to reduce or eliminate the Grantee’s liability for Tax-Related Items.
9. Non-competition and Non-solicitation.
9.1. During the Grantee’s Continuous Service, in consideration of the Restricted Share Units, the Grantee agrees and covenants not to:
(a) contribute his or her knowledge, directly or indirectly, in whole or in part, as an employee, officer, owner, manager, advisor, consultant, agent, partner, director, shareholder, volunteer, intern or in any other similar capacity to an entity engaged in the same or similar business as the Company and its Affiliates;
(b) directly or indirectly, solicit, hire, recruit, attempt to hire or recruit, or induce the termination of employment of any employee of the Company or its Affiliates; or
(c) directly or indirectly, solicit, contact (including, but not limited to, e-mail, regular mail, express mail, telephone, fax, and instant message), attempt to contact or meet with the current, former or prospective customers of the Company or any of its Affiliates for purposes of offering or accepting goods or services similar to or competitive with those offered by the Company or any of its Affiliates.
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9.2. If the Grantee breaches any of the covenants set forth in Section 9.1:
(a) all unvested Restricted Share Units or vested Restricted Share Units that have not been settled shall be immediately forfeited; and
(b) the Grantee hereby consents and agrees that the Company shall be entitled to seek, in addition to other available remedies, a temporary or permanent injunction or other equitable relief against such breach or threatened breach from any court of competent jurisdiction, without the necessity of showing any actual damages or that money damages would not afford an adequate remedy, and without the necessity of posting any bond or other security. The aforementioned equitable relief shall be in addition to, not in lieu of, legal remedies, monetary damages or other available forms of relief.
10. Compliance with Law. The granting of the Restricted Share Units and the issuance and transfer of Class A Ordinary Shares shall be subject to compliance by the Company and the Grantee with laws of British Virgin Islands as they relate to the Company and its Class A Ordinary Shares, with all applicable requirements of federal and state securities laws and with all applicable requirements of any stock exchange on which the Company’s Class A Ordinary Shares may be listed. No Restricted Share Units shall be granted and no Class A Ordinary Shares shall be issued or transferred unless and until any then applicable requirements of British Virgin Islands laws, state and federal laws and regulatory agencies have been fully complied with to the satisfaction of the Company and its counsel. The Grantee understands that the Company is under no obligation to register the Class A Ordinary Shares with the Securities and Exchange Commission, any state securities commission or any stock exchange to effect such compliance.
11. Notices. Any notice required to be delivered to the Company under this Agreement shall be in writing and addressed to the Chief Executive Officer of the Company at the Company’s principal corporate offices. Any notice required to be delivered to the Grantee under this Agreement shall be in writing and addressed to the Grantee at the Grantee’s address as shown in the records of the Company. Either party may designate another address in writing (or by such other method approved by the Company) from time to time.
12. Governing Law. This Agreement will be construed and interpreted in accordance with the laws of the British Virgin Islands without regard to conflict of law principles.
13. Section 409A. Although the Company makes no guarantee with respect to the tax treatment of the Restricted Share Units, the award of Restricted Share Units and Dividend Equivalents pursuant to this Agreement is intended to comply with, or to be exempt from, Section 409A of the Code and shall be limited, construed and interpreted in accordance with such intent. The Restricted Share Units and Dividend Equivalents shall be limited, construed and interpreted in accordance with such intent; provided that the Company does not guarantee to the Grantee any particular tax treatment of the Restricted Share Units or Dividend Equivalents. In no event whatsoever shall the Company or its Affiliates be liable for any additional tax, interest or penalties that may be imposed on the Grantee by Section 409A of the Code or any damages for failing to comply with Section 409A of the Code. Dividend Equivalents shall be treated separately from the Restricted Share Units and the rights arising in connection therewith for purposes of the designation of time and form of payments required by Section 409A of the Code. Each payment under this Agreement shall be treated as a separate payment for purposes of Section 409A of the Code. In no event may the Grantee, directly or indirectly, designate the calendar year of any payment to be made under this Agreement.
14. Interpretation. Any dispute regarding the interpretation of this Agreement shall be submitted by the Grantee or the Company to the Committee for review. The resolution of such dispute by the Committee shall be final and binding on the Grantee and the Company.
15. Restricted Share Units Subject to Plan. This Agreement is subject to the Plan as approved by the Company’s shareholders. The terms and provisions of the Plan as it may be amended from time to time are hereby incorporated herein by reference. In the event of a conflict between any term or provision contained herein and a term or provision of the Plan, the applicable terms and provisions of the Plan shall govern and prevail.
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16. Successors and Assigns. The Company may assign any of its rights under this Agreement. This Agreement shall be binding upon and inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer set forth herein, this Agreement shall be binding upon the Grantee and the Grantee’s beneficiaries, executors, administrators and the person(s) to whom the Restricted Share Units may be transferred by will or the laws of descent or distribution.
17. Severability. The invalidity or unenforceability of any provision of the Plan or this Agreement shall not affect the validity or enforceability of any other provision of the Plan or this Agreement, and each provision of the Plan and this Agreement shall be severable and enforceable to the extent permitted by law.
18. Discretionary Nature of Plan. The Plan is discretionary and may be amended, cancelled or terminated by the Company at any time, in its discretion. The grant of the Restricted Share Units in this Agreement does not create any contractual right or other right to receive any Restricted Share Units or other Awards in the future. Future Awards, if any, shall be at the sole discretion of the Company. Any amendment, modification, or termination of the Plan shall not constitute a change or impairment of the terms and conditions of the Grantee’s employment with the Company.
19. Amendment. The Committee has the right to amend, alter, suspend, discontinue or cancel the Restricted Stock Units, prospectively or retroactively; provided, that, no such amendment shall adversely affect the Grantee’s material rights under this Agreement without the Grantee’s consent.
20. No Impact on Other Benefits. The value of the Grantee’s Restricted Share Units is not part of his normal or expected compensation for purposes of calculating any severance, retirement, welfare, insurance or similar employee benefit.
21. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. Counterpart signature pages to this Agreement transmitted by facsimile transmission, by electronic mail in portable document format (.pdf), or by any other electronic means intended to preserve the original graphic and pictorial appearance of a document, shall have the same effect as physical delivery of the paper document bearing an original signature.
22. Acceptance. The Grantee hereby acknowledges receipt of a copy of the Plan and this Agreement. The Grantee has read and understands the terms and provisions thereof, and accepts the Restricted Share Units subject to all of the terms and conditions of the Plan and this Agreement. The Grantee acknowledges that there may be adverse tax consequences upon the grant, vesting, or settlement of the Restricted Share Units or disposition of the shares and that the Grantee has been advised to consult a tax advisor prior to such grant, vesting or disposition.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.
| COMPANY: | |||
| CONCORDE INTERNATIONAL GROUP LTD | |||
| By: | |||
| Name: | |||
| Title: | Chief Executive Officer | ||
| Address: | ||
| GRANTEE: | |
| (Signature) | |
| (Name) |
| Address: | ||
| SSN: |
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, to be filed on or about August 27, 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
August 27, 2024
Exhibit 99.1
Concorde International Group Ltd
Code of Ethics and Business Conduct
| 1. | Introduction. |
1.1. The Board of Directors of Concorde International Group Ltd (together with its subsidiaries, the “Company”) has adopted this Code of Ethics and Business Conduct (this “Code”) in order to:
(a) promote honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest;
(b) promote full, fair, accurate, timely and understandable disclosure in reports and documents that the Company files with, or submits to, the Securities and Exchange Commission (the “SEC”) and in other public communications made by the Company;
(c) promote compliance with applicable governmental laws, rules and regulations;
(d) deter wrongdoing; and
(e) ensure accountability for adherence to this Code.
1.2. All directors, officers and employees, including principal executive officer, principal financial officer and principal accounting officer are required to be familiar with this Code, comply with its provisions and report any suspected violations as described below in Section 6.
| 2. | Honest and Ethical Conduct. |
2.1. The Company’s policy is to promote high standards of integrity by conducting its affairs honestly and ethically.
2.2. Each director, officer and employee must act with integrity and observe the highest ethical standards of business conduct in his or her dealings with the Company’s customers, suppliers, partners, service providers, competitors, employees and anyone else with whom he or she has contact in the course of performing his or her job.
| 3. | Conflicts of Interest. |
3.1. A conflict of interest occurs when an individual’s private interest (or the interest of a member of his or her family) interferes, or even appears to interfere, with the interests of the Company as a whole. A conflict of interest can arise when an employee, officer or director (or a member of his or her family) takes actions or has interests that may make it difficult to perform his or her work for the Company objectively and effectively. Conflicts of interest also arise when an employee, officer or director (or a member of his or her family) receives improper personal benefits as a result of his or her position in the Company.
3.2. Loans by the Company to, or guarantees by the Company of obligations of, employees or their family members are of special concern and could constitute improper personal benefits to the recipients of such loans or guarantees, depending on the facts and circumstances. Loans by the Company to, or guarantees by the Company of obligations of, any director (or person connected with a director) are expressly prohibited.
3.3. Whether or not a conflict of interest exists or will exist can be unclear. Conflicts of interest should be avoided unless specifically authorized as described in Section 3.4. In the event that a director has a material interest in a contract or a proposed contract with the Company the director must declare the nature of his or her interest at a meeting of the Board in accordance with the BVI Business Companies Act and the articles of association of the Company. The Company shall keep a record of every such declaration made.
3.4. Persons other than directors and executive officers who have questions about a potential conflict of interest or who become aware of an actual or potential conflict should discuss the matter with, and seek a determination and prior authorization or approval from, their supervisor or the Chief Compliance Officer. If the Company does not have a Chief Compliance Officer, then references in this Code to Chief Compliance Officer shall be deemed to be references to the Company’s Chief Financial Officer. A supervisor may not authorize or approve conflict of interest matters or make determinations as to whether a problematic conflict of interest exists without first providing the Chief Compliance Officer with a written description of the activity and seeking the Chief Compliance Officer’s written approval. If the supervisor is himself involved in the potential or actual conflict, the matter should instead be discussed directly with the Chief Compliance Officer.
3.5. Directors and executive officers must seek determinations and prior authorizations or approvals of potential conflicts of interest exclusively from the Audit Committee, or the Board of Directors if no Audit Committee exists.
| 4. | Compliance. |
4.1. Employees, officers and directors should comply, both in letter and spirit, with all applicable laws, rules and regulations in the cities, states and countries in which the Company operates.
4.2. Although not all employees, officers and directors are expected to know the details of all applicable laws, rules and regulations, it is important to know enough to determine when to seek advice from appropriate personnel. Questions about compliance should be addressed to the Chief Compliance Officer.
4.3. No director, officer or employee may purchase or sell any Company securities while in possession of material non-public information regarding the Company, nor may any director, officer or employee purchase or sell another company’s securities while in possession of material non-public information regarding that company. It is against Company policies and illegal for any director, officer or employee to use material non-public information regarding the Company or any other company to (a) obtain profit for himself or herself; or (b) directly or indirectly “tip” others who might make an investment decision on the basis of that information.
4.4. In the event that a director has a material interest in a contract or a proposed contract with the Company the director must declare the nature of his or her interest at a meeting of the Board in accordance with the BVI Business Companies Act and the articles of association of the Company. The Company shall keep a record of every such declaration made.
| 5. | Disclosure. |
5.1. The Company’s annual reports and other documents filed with the SEC, including all financial statements and other financial information, must comply with applicable federal securities laws and the SEC rules.
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5.2. Each director, officer and employee who contributes in any way to the preparation or verification of the Company’s financial statements and other financial information must ensure that the Company’s books, records and accounts are accurately maintained. Each director, officer and employee must cooperate fully with the Company’s accounting and internal audit departments, as well as the Company’s independent public accountants and counsel.
5.3. Each director, officer and employee who is involved in the Company’s disclosure process must: (a) be familiar with and comply with the Company’s disclosure controls and procedures and its internal control over financial reporting; and (b) take all necessary steps to ensure that all filings with the SEC and all other public communications about the financial and business condition of the Company provide full, fair, accurate, timely and understandable disclosure.
| 6. | Reporting. |
6.1. Actions prohibited by this Code involving directors or executive officers must be reported to the Audit Committee, or the Board of Directors if no Audit Committee exists.
6.2. Actions prohibited by this Code involving any other person must be reported to the reporting person’s supervisor or the Chief Compliance Officer.
6.3. After receiving a report of an alleged prohibited action, the Audit Committee, or the Board of Directors if no Audit Committee exists, the relevant supervisor, or the Chief Compliance Officer must promptly take all appropriate actions necessary to investigate.
6.4. All directors, officers and employees are expected to cooperate in any internal investigation of misconduct.
| 7. | Enforcement. |
7.1. The Company must ensure prompt and consistent action against violations of this Code.
7.2. If, after investigating a report of an alleged prohibited action by a director or executive officer, the Audit Committee determines that a violation of this Code has occurred, the Audit Committee will report such determination to the full Board of Directors.
7.3. If, after investigating a report of an alleged prohibited action by any other person, the relevant supervisor or the Chief Compliance Officer determines that a violation of this Code has occurred, the supervisor or the Chief Compliance Officer will report such determination to the Chief Executive Officer or the General Counsel, if the Company has a General Counsel.
7.4. Upon receipt of a determination that there has been a violation of this Code, the Board of Directors or the Chief Executive Officer or General Counsel will take such preventative or disciplinary action as it deems appropriate, including, but not limited to, reassignment, demotion, dismissal and, in the event of criminal conduct or other serious violations of the law, notification of appropriate governmental authorities.
| 8. | Waivers and Amendments. |
8.1. Each of the Audit Committee or the Board of Directors if no Audit Committee exists (in the case of a violation by a director or executive officer) and the Chief Executive Officer or General Counsel (in the case of a violation by any other person) may, in its discretion, waive any violation of this Code or make any amendment of this Code.
8.2. Any waiver for a director or an executive officer or any amendment of this Code shall be disclosed as required by SEC rules and the applicable rules of any trading market on which the Company’s securities are listed or quoted, or on the Company’s website within four (4) business days following the date of such amendment or waiver.
| 9. | Prohibition on Retaliation. |
The Company does not tolerate acts of retaliation against any director, officer or employee who makes a good faith report of known or suspected acts of misconduct or other violations of this Code.
Adopted by the Board of Directors on June 17, 2024.
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Exhibit 99.2
CONCORDE INTERNATIONAL GROUP LTD
AUDIT COMMITTEE CHARTER
The Audit Committee (the “Committee”) is appointed by the Board of Directors (the “Board”) of Concorde International Group Ltd (the “Company”) as a committee of the Board. The purpose of the Committee is to assist the Board in fulfilling its oversight responsibility relating to (i) the monitoring of the integrity of the Company’s and its subsidiaries’ financial statements and financial reporting process and the Company’s and its subsidiaries’ systems of internal accounting and financial controls, (ii) the monitoring of the effectiveness of and performance of the internal and external, control, risk management and audit services function, (iii) the monitoring of the annual independent audit of the Company’s and subsidiaries’ financial statements, the engagement of the independent auditors and the evaluation of the independent auditors’ qualifications, independence and performance, (iv) the compliance by the Company with legal and regulatory requirements, including the Company’s disclosure of controls and procedures, (v) the compliance with the Company’s Code of Ethics and Business Conduct and conduct of the Company’s officers and directors, (vi) the evaluation of enterprise risk issues, and (vii) the fulfillment of the other responsibilities set out herein.
| I. Purpose and authority |
The Committee shall oversee the accounting and financial reporting processes of the Company and the audits of the Company’s financial statements. The Committee is responsible for:
| ● | Overseeing the Company’s accounting and financial reporting processes and financial statement audits |
| ● | Overseeing the Company’s compliance with legal and regulatory requirements |
| ● | Overseeing the Company’s independent auditor’s qualifications and independence |
| ● | Overseeing the performance of the Company’s independent auditor |
| ● | Overseeing the Company’s systems of disclosure and controls procedures |
| ● | Overseeing the Company’s internal controls over financial reporting |
| ● | Overseeing the Company’s compliance with ethical standards adopted by the Company |
The Committee should encourage continuous improvement and should foster adherence to the Company’s policies, procedures and practices at all levels. The Committee has the authority to conduct investigations into any matters within its scope of responsibility and obtain advice and assistance from outside legal, accounting, or other advisers when necessary to perform its duties and responsibilities.
In carrying out its duties and responsibilities, the Committee has the authority to engage outside legal, accounting, or other advisers, and to seek any information it requires from employees, officers, and directors.
The Company will provide appropriate funding, as determined by the Committee, for the compensation to the independent auditor, to any advisers that the Committee chooses to engage, and for payment of ordinary administrative expenses of the Committee that are necessary or appropriate in carrying out its duties.
The Audit Committee serves a Board level oversight role where it oversees the relationship with the independent auditor, as set forth in this Charter, receives information and provides advice, counsel and general direction, as it deems appropriate, to management and the auditors, taking into account the information it receives, discussions with the auditor, and the experience of the Committee’s members in business, financial and accounting matters. The fundamental responsibility for the Company’s financial statements and disclosures rests with management and the independent auditor.
| II. Composition and meetings |
Membership and Structure. The Committee shall consist of at least three (3) independent non- executive director who has competence in accounting or auditing. The Committee members shall be elected by the Board, upon the recommendation of the Nominating and Corporate Governance Committee, on such terms as may be specified by the Board.
Appointment. Committee members will be appointed by the board at the annual board meeting to serve until their successors are elected. Unless a chair is elected by the full board, the members of the Committee may designate a chair by majority rule.
Qualifications. All Committee members shall meet all applicable independence requirements of The Nasdaq Stock Market LLC and any successor thereto (“Nasdaq”) and of Rule 10A- 3(b)(1) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), subject to the exemptions provided in Rule 10A-3(c) under the Exchange Act, and other applicable rules and regulations of the SEC. Additionally, no member of the Committee shall have participated in the preparation of the financial statements of the Company or any current subsidiary of the Company at any time during the preceding three (3) years and all members of the Committee must be able to read and understand fundamental financial statements, including a balance sheet, income statement, and cash flow statement.
Financial Expert. As a matter of best practices, the Committee will endeavor to have at least one of its members with the requisite qualifications to be designated by the Board as an “audit committee financial expert,” as such term is defined by Item 407(d)(5) of Regulation S-K as promulgated by the SEC (“Regulation S-K”). The Committee shall report to the Board for further action as appropriate, including, but not limited to, a determination by the Board that the Committee membership includes or does not include one or more “audit committee financial experts” and any related disclosure to be made concerning this matter. The designation of a member of the Committee as an “audit committee financial expert” will not increase the duties, obligations or liability of the designee as compared to the duties, obligations and liability imposed on the designee as a member of the Committee and of the Board. If the Committee does not have an “audit committee financial expert,” then, in accordance with Nasdaq requirements, at least one member of the Committee must be financially sophisticated, in that he or she has past employment experience in finance or accounting, requisite professional certification in accounting, or any other comparable experience or background which results in the individual’s financial sophistication, including but not limited to being or having been a chief executive officer, chief financial officer, other senior officer with financial oversight responsibilities.
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Chair. Unless the Chair of the Committee (the “Chair”) is elected by the full Board, the Committee members may designate a Chair consistent with any recommendation of the Nominating and Corporate Governance Committee.
Resignation, Removal and Replacement. Any director may resign from the Committee at any time upon notice of such resignation to the Company. An independent director who ceases to be independent under Nasdaq requirements shall promptly resign to the extent required for the Company to comply with applicable laws, rules and regulations. The Board shall have the power at any time to remove a member of the Committee with or without cause, to fill all vacancies, and to designate alternate members, upon the recommendation of the Committee, to replace any absent or disqualified members, so long as the Committee shall at all times have at least three (3) members and be composed solely of independent board members.
Meetings. The board will determine that a director’s simultaneous service on multiple Committees will not impair the ability of such member to serve on the Committee. The Committee will meet at least quarterly or more frequently as circumstances dictate. The Committee chair will approve the agenda for the Committee’s meetings and any member may suggest items for consideration. Briefing materials will be provided to the Committee as far in advance of meetings as practicable.
Each regularly scheduled meeting will conclude, at the discretion of the Committee chair, with an executive session of the Committee absent members of management. The Committee may also, at its discretion, meet with the independent auditors in executive session.
| III. Responsibilities and duties |
The function of the Committee is to oversee the Company’s management and independent accountants in the production of the Company’s financial statements, as well as all controls and procedures relating thereto. The Company’s management is primarily responsible for the preparation and presentation of the Company’s financial statements and for maintaining appropriate systems for accounting and financial reporting principles and policies and internal controls and procedures that provide for compliance with accounting standards and applicable laws and regulations. The Company’s independent accountants are primarily responsible for planning and carrying out a proper audit of the Company’s annual financial statements, reviewing the Company’s unaudited interim financial statements and auditing management’s assessment of effectiveness of internal control over financial reporting in accordance with the standards of the Public Company Accounting Oversight Board (the “PCAOB”) and other procedures. The independent accountants are accountable to the Board and the Committee, as representatives of the Company’s shareholders. The Board and the Committee have the ultimate authority and responsibility to select, evaluate and, where appropriate, replace the Company’s independent accountants. For purposes of this Charter, the term “management” means the appropriate officers of each of the Company and its subsidiaries and the phrase “internal accounting staff” means the appropriate officers and employees of each of the Company and its subsidiaries.
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In fulfilling their responsibilities hereunder, it is recognized that members of the Committee are not full-time employees of the Company or members of management and are not, and do not represent themselves to be, accountants or auditors by profession. As such, it is not the duty or the responsibility of the Committee or its members to conduct “field work” or other types of auditing or accounting reviews or procedures to determine if the financial statements are complete and accurate and whether they have been prepared in accordance with International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board, or to set auditor independence standards.
Each member of the Committee shall be entitled to rely on (i) the integrity of those persons within and outside the Company and management from which it receives information, (ii) the accuracy of the financial and other information provided to the Committee absent actual knowledge to the contrary (which shall be promptly reported to the Board), and (iii) statements made by the officers and employees of the Company and its subsidiaries or other third parties as to any information technology, internal and external audit and other non-audit services provided by the independent accountants to the Company. In carrying out its responsibilities, the Committee’s policies and procedures shall be adapted, as appropriate, to best react to changing markets and regulatory environments.
Nothing in this Charter shall be interpreted as diminishing or derogating the duties, responsibilities or obligations of the Board. Subject to the requirements of the Company’s second amended and restated articles and memorandum of association, the Committee shall:
Retention of Independent Accountants and Approval of Services
1. Select or retain each year a firm or firms of independent accountants to audit the accounts and records of the Company and its subsidiaries, to approve the terms of compensation of such independent accountants (including negotiating and executing on behalf of the Company engagement letters) and to terminate such independent accountants as it deems appropriate.
2. Pre-approve any independent accountants’ engagement to render audit and/or permissible non-audit services (including the fees charged and proposed to be charged by the independent accountants), subject to the de minimus exceptions under Section 10A(i)(1)(B) of the Exchange Act, and as otherwise required by law.
3. The Committee may delegate its pre-approval responsibilities to one (1) or more of its members. The member(s) to whom such responsibility is delegated must report, for informational purposes only, any pre-approval decisions to the Committee at its next scheduled meeting.
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Oversight of the Independent Accountants
4. Obtain and review a report from the independent accountants at least annually regarding:
| (a) | the independent accountants’ internal quality-control procedures; |
| (b) | any material issues raised by the most recent internal quality-control review, peer review, or review by the PCAOB, of the firm, or by any inquiry or investigation by governmental or professional authorities within the preceding five (5) years respecting one (1) or more independent audits carried out by the firm; |
| (c) | any steps taken with regard to the issues identified in (a) or (b) above; and |
| (d) | all relationships between the independent accountants and the Company and its subsidiaries. |
5. Obtain from the independent accountants annually a formal written statement of the fees billed in each of the last two (2) fiscal years for each of the following categories of services rendered by the independent accountants:
| (a) | the audit of the Company’s annual financial statements and the reviews of the financial statements included in the Company’s interim reports or services that are normally provided by the independent accountants in connection with statutory or regulatory filings or engagements; |
| (b) | that are reasonably related to the performance of the audit or review of the Company’s financial statements, in the aggregate and by each service; |
| (c) | tax compliance, tax advice and tax planning services, in the aggregate and by each service; and |
| (d) | all other products and services rendered by the independent accountants, in the aggregate and by each service. |
6. Evaluate the qualifications, performance and independence of the independent accountants, including the following:
| (a) | evaluating the performance of the lead (or coordinating) audit partner, and the quality and depth of the professional staff assigned to the Company and its subsidiaries; |
| (b) | considering whether the accountant’s quality controls are appropriate and adequate in light of the standards and requirements established by the PCAOB and under applicable law at such time; and |
| (c) | considering whether the provision of permitted non-audit services is compatible with maintaining the accountant’s independence. |
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7. Consider the opinions of management and the internal accounting staff in connection with the foregoing responsibilities. The Committee shall present its conclusions with respect to the independent accountants to the Board.
8. Monitor the rotation required by applicable law of the lead (or coordinating) audit partner having primary responsibility for the audit and the audit partner responsible for reviewing the audit.
9. Oversee compliance with the following guidelines relating to the Company’s hiring of employees or former employees of the independent accountants:
| (a) | no member of the audit team that is auditing the Company can be hired by the Company in a financial reporting oversight role (as defined in the SEC’s Regulation S-X) for a period of one (1) year following association with that audit; and |
| (b) | the Company’s Chief Financial Officer shall report annually to the Committee the profile of the preceding year’s hires from the independent accountants. |
10. Consider the effect on the Company of:
| (a) | any changes in accounting principles or practices proposed by management or the independent accountants; |
| (b) | any changes in service providers, such accountants, that could impact the Company’s internal control over financial reporting; and |
| (c) | any changes in schedules (such as fiscal or tax year-end changes) or structures or transactions that require special accounting activities, services or resources. |
11. Review any presentations or reports prepared by the independent accountants with respect to any applicable tax matters.
12. Annually review a formal written statement from the independent accountants delineating all relationships between the independent accountants and the Company, consistent with applicable requirements and standards of the SEC and the PCAOB, and discuss with the independent accountants their methods and procedures for ensuring independence.
13. Evaluate the efficiency and appropriateness of the services provided by the independent accountants, including any significant difficulties with the audit or any restrictions on the scope of their activities or access to required records, data and information.
14. Interact with the independent accountants, including reviewing and, where necessary, resolving any problems or difficulties the independent accountants may have encountered in connection with the annual audit or otherwise, any management letters provided to the Committee and the Company’s responses. Such review shall address any difficulties encountered in the course of the audit work, including any restrictions on the scope of activities or access to required information, any disagreements that have arisen between management and the independent accountants regarding financial reporting.
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15. Review with the independent accountants the effect of regulatory and accounting initiatives, as well as off-balance sheet structures, on the financial statements of the Company.
Financial Statements and Disclosure Matters
16. Review and discuss with management and the independent accountants the annual audited financial statements, including disclosures made in management’s discussion and analysis of financial condition and results of operations, and recommend to the Board whether the audited financial statements should be included in the Company’s Annual Report on Form 20-F.
17. Review and discuss with management and the independent accountants the Company’s interim financial statements, including disclosures made in management’s discussion and analysis of financial condition and results of operations, prior to the filing of its reports on Form 6-K, including the results of the independent accountants’ reviews of the interim financial statements.
18. Review with the Company’s Chief Executive Officer, Chief Financial Officer and independent accountants, the adequacy and effectiveness of the Company’s and its subsidiaries’ internal control over financial reporting and review periodically, but in no event less frequently than semiannually, management’s conclusions about the effectiveness of such internal control over financial reporting, including any significant deficiencies and material weaknesses in, or material non-compliance with, such internal control.
19. Review with the Company’s Chief Executive Officer, Chief Financial Officer and independent accountants, the adequacy and effectiveness of the Company’s and its subsidiaries’ disclosure controls and procedures and review periodically, but in no event less frequently than semiannually, management’s conclusions about the effectiveness of such disclosure controls and procedures, including any significant deficiencies in, or material non-compliance with, such controls and procedures.
20. Review disclosures made to the Committee by the Company’s Chief Executive Officer and Chief Financial Officer, or persons performing similar roles, during their certification process for the Company’s Annual Report on Form 20-F and reports on Form 6-K concerning any significant deficiencies in the design or operation of disclosure controls and procedures and, when applicable, internal control over financial reporting, or material weaknesses in such control, and any fraud involving management or other employees who have a significant role in the Company’s disclosure controls and procedures and internal control over financial reporting.
21. Review and discuss the types of information to be disclosed and the types of presentation to be made in connection with earnings releases by the Company and its subsidiaries.
22. Review and discuss the types of financial and non-financial information and earning guidance to be provided to analysts and ratings agencies.
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23. Meet with the Company’s independent accountants at least four times during each fiscal year, including private meetings, and review written materials prepared by the independent accountants, as appropriate. At these meetings, the Committee shall:
| (a) | review the arrangements for and the scope of the annual audit and any special audits or other special permissible services; |
| (b) | review the Company’s financial statements and to discuss any matters of concern arising in connection with audits of such financial statements, including any adjustments to such statements recommended by the independent accountants or any other results of the audits; |
| (c) | consider and review, as appropriate and in consultation with the independent accountants, the appropriateness and adequacy of the Company’s financial and accounting policies, internal control over financial reporting and, as appropriate, the internal controls of key service providers, and to review management’s responses to the independent accountants’ comments relating to those policies, procedures and controls, and to take any necessary action in light of material control deficiencies; |
| (d) | review with the independent accountants their opinions as to the fairness of the financial statements; and |
| (e) | review and discuss semiannual reports from the independent accountants relating to: (1) all critical accounting policies and practices to be used; (2) all alternative treatment of financial information within IFRS that have been discussed with management, ramifications of the use of such alternative disclosures and treatments and the treatment preferred by the independent accountants; and (3) other material written communications between the independent accountant and management, such as any management letter or schedule of unadjusted differences. |
24. Prepare the report and filing required by the SEC to be included in the Company’s public filing.
Compliance Oversight
25. Administer the following procedures relating to the receipt, retention and treatment of complaints received by the Company regarding questionable accounting, internal accounting controls over financial reporting or auditing matters, and the confidential, anonymous submission by employees of the Company of concerns regarding questionable accounting or auditing matters:
| (a) | the Company shall forward to the Committee any complaints or concerns that it has received regarding questionable financial statement disclosures, accounting, internal accounting controls or auditing matters; |
| (b) | the Company shall establish and publish on its website an e-mail address for receiving anonymous complaints or concerns related to questionable financial statement disclosures, accounting, internal accounting controls or auditing matters, provided that the Company may engage the services of a third-party service provider to receive such complaints on behalf of the Company via telephone, email or other appropriate method; |
| (c) | any employee of the Company may submit, on a confidential, anonymous basis if the employee so desires, any concerns regarding questionable financial statement disclosures, accounting, internal accounting controls or auditing matters by setting forth such concerns in writing and forwarding them in a sealed envelope to the Chairman of the Committee, such envelope to be labeled with a legend such as “To be opened by the Committee only” (employees may deposit such envelope in the Company’s internal mail system or deliver it by hand to a member of the Committee and if an employee would like to discuss any matter with the Committee, the employee should indicate this in the submission and include a telephone number at which he or she might be contacted if the Committee deems it appropriate); |
| (d) | the Committee shall review and consider any such complaints and concerns that it has received and take any action that it deems appropriate in order to respond thereto; |
| (e) | the Committee may request special treatment for any complaint or concern, including the retention of outside counsel or other advisors; and |
| (f) | the Committee shall retain any such complaints or concerns for a period of no less than five (5) years. |
The Committee shall annually reassess the effectiveness of the procedures described immediately above and modify them as necessary
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26. The Committee will be designated as and serve as the Qualified Legal Compliance Committee (the “QLCC”) for the Company in accordance with the provisions of Section 307 of Sarbanes-Oxley Act of 2002. Upon receipt of a report of evidence of a material legal violation, the Committee will notify the Board of such report, investigate and recommend appropriate measures to the Board. If the Company does not appropriately respond, the Committee may take further appropriate action, including notification to the SEC. In its capacity as the QLCC, the Committee shall have responsibility for the matters set forth in Appendix A to this charter.
27. Review with management or any external counsel as the Committee considers appropriate, any legal matters (including the status of pending litigation) that may have a material impact on the Company and any material reports or inquiries from regulatory or governmental agencies.
28. Review with management the adequacy and effectiveness of the Company’s procedures to ensure compliance with its legal and regulatory responsibilities.
29. Oversee compliance with the Company’s Code of Ethics and Business Conduct.
30. Discuss with management, the independent accountants, outside counsel, as appropriate, and, in the judgment of the Committee, such special counsel, separate accounting firm and other consultants and advisors as the Committee deems appropriate, any correspondence with regulators or governmental agencies and any published reports which raise material issues regarding the Company’s financial statements, accounting policies or internal control over financial reporting.
31. Obtain reports from management, the internal or external auditor or internal or external audit service provider, as the case may be, and the independent auditor regarding compliance with applicable legal and regulatory requirements.
Oversight of Company’s Internal And External Audit Function
32. The internal and external auditor or internal and external audit service provider, as the case may be, shall report periodically to the Committee regarding any significant deficiencies in the design or operation of the Company’s and its subsidiaries’ internal control over financial reporting, material weaknesses in the internal control over financial reporting and any fraud (regardless of materiality) involving persons having a significant role in the internal control over financial reporting, as well as any significant changes in internal control over financial reporting implemented by management during the most recent reporting period of the Company.
33. Discuss with management, the internal and external auditor or internal and external audit service provider, as the case may be, and the independent accountant the Company’s major risk exposures (whether financial, operations or both) and the steps management has taken to monitor and control such exposures, including the Company’s risk assessment and risk management policies.
34. With respect to any internal and external audit services that may be outsourced, engage, evaluate and terminate internal and external audit service providers and approve fees to be paid to such internal and external audit service providers.
Financial Oversight
35. Review and approve decisions by the Company and its subsidiaries to enter into derivative transactions (including, but limited to, swaps, put and call options or combinations thereof, caps, floors, collars, and forward or spot exchanges) and related matters, as appropriate, as well as non-cleared swaps that are exempt from the clearing and trade execution requirements established under applicable federal law, rules and regulations, including swaps that are entered into in reliance upon the “end-user exceptions” to the mandatory execution and clearing requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act and related regulations. The Committee may review and approve swap transactions submitted to it by management on (a) an individual transaction basis or (b) a blanket basis, with respect to all non- cleared swaps that are exempt from the federal clearing and trade execution requirements, which approval must be reviewed at least annually.
36. Periodically review, at least on an annual basis, or more often (particularly in the event of a material change in hedging strategy) and approve the Company’s policies for the use of swaps that are entered into in reliance upon the end-user exceptions.
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Other
37. Prepare the disclosure required by Item 407(d)(3)(i) of Regulation S-K.
38. Report its activities to the Board on a regular basis and to make such recommendations with respect to the matters described above and other matters as the Committee may deem necessary or appropriate.
39. Perform an annual self-evaluation of the Committee’s performance and annually review and reassess the adequacy of and, if appropriate, propose to the Board, any desired changes in, this Charter, all to supplement the oversight authority by the Nominating and Corporate Governance Committee with respect to such matters.
40. The Committee shall have such further responsibilities as are given to it from time to time by the Board. The Committee shall consult, on an ongoing basis, with management, the independent accountants and counsel as to legal or regulatory developments affecting its responsibilities, as well as relevant tax, accounting and industry developments.
The foregoing list of duties is not exhaustive, and the Committee may, in addition, perform such other functions as may be necessary or appropriate for the performance of its duties.
| IV. | Additional Resources. |
The Committee shall have the right to use reasonable amounts of time of the Company’s independent accountants, outside lawyers and other internal staff and also shall have the right to hire independent experts, lawyers and other consultants to assist and advise the Committee in connection with its responsibilities. The Committee shall also be given the resources, as determined by the Committee, for payment of (i) compensation to any registered independent public accounting firm engaged for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for the Company, (ii) compensation to any independent experts, lawyers and other consultants hired to assist and advise the Committee in connection with its responsibilities, and (iii) ordinary administrative expenses of the Committee that are necessary or appropriate in carrying out its duties. The Committee shall keep the Company’s Chief Financial Officer advised as to the general range of anticipated expenses for outside consultants, and shall obtain the concurrence of the Board in advance for any expenditures.
| V. | Amendments. |
Any amendments to this Charter must be approved or ratified by a majority vote of the Company’s Board, including a majority of independent directors.
| VI. | Disclosure of Charter. |
This Charter will be made available on the Company’s website at www.concordesecurity.com.
Adopted, by the Board of Directors on June 17, 2024
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APPENDIX A
THE AUDIT COMMITTEE’S RESPONSIBILITIES AS A
QUALIFIED LEGAL COMPLIANCE COMMITTEE
In its capacity as the Qualified Legal Compliance Committee, the Audit Committee shall have responsibility for the following matters:
| ● | To review any report by an attorney or a legal counsel representing the Company and/or its subsidiaries of a material violation of U.S. federal or state securities law, a material breach of fiduciary duty arising under U.S. federal or state law or a similar material violation of any U.S. federal or state law (each, a “material violation”). |
| ● | Any report or referral under this charter shall be made in the first instance to the Chair of the Audit Committee by direct communication, either in person or by telephone. If it is an exigent matter and the Chair of the Audit Committee is unavailable, then an attorney or a legal counsel representing the Company and/or its subsidiaries shall report the matter to another member of the Audit Committee. |
| ● | A reporting attorney or legal counsel shall ensure that the person to whom he or she reports is expressly advised that the attorney is making a report or referral under this charter. |
| ● | Reports to the Audit Committee by an attorney or a legal counsel representing the Company and/or its subsidiaries shall be subject to the attorney-client privilege. The Audit Committee shall maintain the confidentiality of such reports, except to the extent the Audit Committee deems it necessary to disclose such reports or related information in carrying out its functions under this charter and the SEC rules. |
| ● | Upon receipt of a report, the Audit Committee shall: |
| ● | inform Chief Executive Officer of such report, unless such notification would be futile; and |
| ● | determine whether an investigation is necessary regarding any report of evidence of a material violation by the Company, its officers, directors, employees or agents. |
| ● | If the Audit Committee determines an investigation is necessary or appropriate, the Audit Committee shall: |
notify the Board of Directors; and initiate an investigation, which may be conducted by an attorney or a legal counsel representing the Company and/or its subsidiaries.
| ● | At the conclusion of any such investigation, the Audit Committee shall: |
recommend that the Company implement an appropriate response to the evidence of a material violation, which appropriate response may include:
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| ● | a finding that no material violation has occurred, is ongoing or is about to occur; |
| ● | the adoption of appropriate remedial measures, including appropriate steps or sanctions to stop any material violations that are ongoing, to prevent any material violation that has yet to occur, and to remedy or otherwise appropriately address any material violation that has already occurred and to minimize the likelihood of its recurrence; or |
| ● | retaining or directing an attorney or a legal counsel representing the Company and/or its subsidiaries to review the reported evidence of a material violation, and either (i) the Company substantially implements any remedial recommendations made by an attorney or a legal counsel representing the Company and/or its subsidiaries after a reasonable investigation and evaluation of the reported evidence, or (ii) the attorney or legal counsel representing the Company and/or its subsidiaries advises the Company that he or she may, consistent with his or her professional obligations, assert a colorable defense on behalf of the Company or its officers, directors, employees or agents, in any investigation or judicial or administrative proceeding relating to the reported evidence or a material violation; and |
| ● | inform the Chief Executive Officer and the Board of Directors of the results of any such investigation initiated by the Audit Committee, and the appropriate remedial measures to be adopted. |
| ● | The Audit Committee may take all other appropriate action, including notifying the SEC, if the Company fails in any material respect to implement an appropriate response that the Audit Committee has recommended that the Company take. |
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Exhibit 99.3
CONCORDE INTERNATIONAL GROUP LTD
COMPENSATION COMMITTEE CHARTER
I. Purpose.
The Compensation Committee (the “Committee”) is established by the Board of Directors (the “Board”) of Concorde International Group Ltd (the “Company”) as a committee of the Board. The purpose of the Committee is to assist the Board in fulfilling its oversight responsibilities related to the Company’s compensation structure and compensation, including equity compensation, and other remunerations paid by the Company.
The Committee has overall responsibility for (i) reviewing and approving the compensation of the Company’s Chief Executive Officer, Chief Financial Officer and any other executive officers that serve in executive officer capacities for the Company, (ii) evaluating and making recommendations to the Board regarding the compensation of the directors of the Company; (iii) evaluating and making recommendations to the Board regarding equity-based and incentive-compensation plans, policies and programs that are subject to Board approval; and (iv) the fulfillment of the other responsibilities set out herein.
II. Membership, Structure and Qualifications.
Membership and Structure. The Committee shall consist of two (2) or more independent directors. The Committee members shall be elected by the Board, upon the recommendation of the Nominating and Corporate Governance Committee, on such terms as may be specified by the Board.
Qualifications. All Committee members shall meet all applicable independence requirements of The Nasdaq Stock Market LLC and any successor thereto (“Nasdaq”) and applicable rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”). In addition, each member of the Committee also shall satisfy all requirements necessary from time to time to be “non-employee directors” under Rule 16b-3 of the Exchange Act of 1934, as amended. In addition, in affirmatively determining the independence of any director who will serve on the Committee, the Board must consider all factors specifically relevant to determining whether a director has a relationship to the Company which is material to that director’s ability to be independent from management in connection with the duties of a Committee member, including, but not limited to: (i) the source of compensation of such director, including any consulting, advisory or other compensatory fee paid by the Company to such director; and (ii) whether such director is affiliated with the Company, a subsidiary of the Company or an affiliate of a subsidiary of the Company.
Chairman. Unless the Chairman of the Committee (the “Chairman”) is elected by the full Board, the Committee members may designate a Chairman consistent with any recommendation of the Nominating and Corporate Governance Committee.
Resignation, Removal and Replacement. Any director may resign from the Committee at any time upon notice of such resignation to the Company. An independent director who ceases to be independent under Nasdaq requirements shall promptly resign to the extent required for the Company to comply with applicable laws, rules and regulations. The Board shall have the power at any time to remove a member of the Committee with or without cause, to fill all vacancies, and to designate alternate members, upon the recommendation of the Committee, to replace any absent or disqualified members, so long as the Committee shall at all times have at least three (3) members and be composed solely of independent board members.
III. Meetings and Other Actions.
All meetings of and other actions by the Committee shall be held and taken pursuant to the second amended and restated memorandum and articles of association of the Company (as may be amended from time to time, the “Charter Documents”), including provisions governing notice of meetings and waiver thereof, the number of Committee members required to take action at meetings and by written consent, and other related matters. The Committee may invite any director who is not a member of the Committee, management, counsel, representatives of service providers or other persons to attend meetings and provide information as the Committee, in its sole discretion, considers appropriate.
Unless otherwise authorized by the Board, the Committee shall not delegate any of its authority to any subcommittee.
IV. Goals, Responsibilities and Authority.
The following are the general goals, responsibilities and authority of the Committee and are set forth only for its guidance. The Committee, however, may diverge from these responsibilities and/or may assume such other responsibilities as the Board may delegate from time to time and/or as the Committee may deem necessary or appropriate from time to time in performing its functions in accordance with the Charter Documents and other governance documents of the Company and with applicable law (it being understood that the Committee may condition its approval of any compensation on Board ratification to the extent so required to comply with applicable tax law).
Nothing in this Charter shall be interpreted as diminishing or derogating the duties, responsibilities or obligations of the Board. Subject to the requirements of the Charter Documents, the Committee shall have the following responsibilities:
Executive Compensation
1. Review from time to time, modify if necessary, and approve the Company’s corporate goals and objectives relevant to compensation and the Company’s executive compensation structure and compensation range to ensure that it is designed to achieve the objectives of rewarding the Company’s executive officers appropriately for their contributions to corporate growth and profitability.
2. Evaluate the Chief Executive Officer’s performance in light of such goals and objectives and, either as a Committee or together with the other independent directors (as directed by the Board), determine and approve the Chief Executive Officer’s compensation based on this evaluation. The Chief Executive Officer may not be present during voting or deliberations on his or her compensation.
3. Annually review and determine the compensation of the Company’s Chief Executive Officer and other executive officers.
4. Upon the engagement of and annually thereafter, determine and approve the compensation paid to the Company’s Chief Financial Officer and any other executive officers that serve in executive officer capacities for the Company.
Director Compensation
5. Select peer groups of companies that shall be used for purposes of determining competitive director compensation packages.
6. Periodically evaluate and make recommendations to the Board concerning the reimbursement of directors’ expenses, if any, for attendance of each meeting of the Board.
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7. Periodically evaluate and make recommendations to the Board concerning the total compensation package for directors including, without limitation, the annual retainer fee, the meeting fee, incentives, equity-based compensation and other benefits paid to directors, taking into account the compensation of directors at selected peer groups of companies. The Committee shall recommend to the Board any adjustments in director compensation that the Committee considers appropriate.
8. Recommend to the Board the terms and awards of any share compensation for members of the Board.
Long-Term Incentive Plans
9. Approve all long-term incentive awards for the executive officers of the Company and its subsidiaries.
10. Periodically evaluate (and approve any proposed amendments to) the terms and administration of the Company’s and its subsidiaries’ annual and long-term incentive plans to assure that they are structured and administered in a manner consistent with the Company’s and its subsidiaries’ goals and objectives as to participation in such plans, target annual incentive awards, corporate financial goals, actual awards paid to the executive officers of the Company’s subsidiaries, and total funds reserved for payment under the compensation plans.
11. Determine when it is necessary (based on advice of counsel) or otherwise desirable: (a) to modify, discontinue or supplement any such plans; or (b) to submit such amendment or adoption to a vote of the full Board and/or the Company’s shareholders to the extent required by law.
12. Evaluate and make recommendations to the Board concerning the adoption of any new equity-based and incentive-compensation plan.
13. Oversee the administration of any equity incentive plans of the Company in accordance with their terms, construe all terms, provisions, conditions and limitations of such plan and make factual determinations required for the administration of such plans. The Committee may amend or terminate such plans at any time, subject to the terms of the plans.
Compensation Advisers
14. In its sole discretion, retain or obtain the advice of a compensation consultant, independent legal counsel or other adviser.
15. Have the direct responsibility for the appointment, compensation and oversight of the work of any compensation consultant, independent legal counsel or other adviser retained by the Committee. The Company must provide for appropriate funding, as determined by the Committee, for payment of reasonable compensation to a compensation consultant, independent or legal counsel that is not independent or any other adviser retained by the Committee.
16. Prior to retaining or obtaining any compensation consultant, independent legal counsel or other adviser (other than in-house legal counsel), the Committee must conduct an independence assessment of such compensation consultant, legal counsel or other adviser, including the consideration of all relevant factors to that person’s independence from management. Such factors include, but are not limited to, the following: (a) the provision of other services to the Company by the person that employs the compensation consultant, legal counsel or other adviser; (b) the amount of fees received from the Company by the person that employs the compensation consultant, legal counsel or other adviser, as a percentage of the total revenue of the person that employs the compensation consultant, legal counsel or other adviser; (c) the policies and procedures of the person that employs the compensation consultant, legal counsel or other adviser that are designed to prevent conflicts of interest; (d) any business or personal relationship of the compensation consultant, legal counsel or other adviser with a Committee member; (e) any shares of the Company owned by the compensation consultant, legal counsel or other adviser; and (f) any business or personal relationship of the compensation consultant, legal counsel, other adviser or the person employing the adviser with an executive officer of the Company. Only after the Committee has considered the preceding independence factors, the Committee may select or receive advice from any compensation advisor they prefer, including those who are not independent. The Committee is not required to conduct any independence assessment if, pursuant to Regulation S-K Item 407, disclosure of the engagement of such compensation consultant, legal counsel or other adviser is not required.
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Other
17. Fulfill any disclosure, reporting or other requirements imposed on or required of the Committee by the SEC, Nasdaq or other applicable laws, rules and regulations, as the forgoing may be amended from time to time.
18. Review organizational and staffing matters with respect to the Company.
19. Prepare the disclosure required by Item 407(e)(5) of Regulation S-K or any equivalent disclosure of filing mandated or required by BVI law.
20. Grant the right to receive indemnification and right to be paid by the Company the expenses incurred in defending any proceeding in advance to its disposition, to any employees in their capacity as officer, director employee or agent of the Company, any of directors the Company and any of the Company’s and its subsidiaries’ executive officers to the fullest extent of the provisions of the Charter Documents and other governance documents of the Company and with applicable law.
21. Perform an annual self-evaluation of the Committee’s performance and annually review and reassess the adequacy of and, if appropriate, propose to the Board, any desired changes in, the Committee’s Charter, all to supplement the oversight authority by the Nominating and Corporate Governance Committee with respect to such matters.
22. Perform such other duties and responsibilities as may be assigned to the Committee, from time to time, by the Board of the Company and/or the Chairman of the Board, or as designated in plan documents.
23. Make regular reports to the Board and propose any necessary action to the Board. Such reports shall provide information with respect to any delegation of authority by the Committee to the Company and its subsidiaries’ executive officers or to a third party.
The foregoing list of duties is not exhaustive, and the Committee may, in addition, perform such other functions as may be necessary or appropriate for the performance of its duties.
V. Additional Resources.
Subject to the approval of the Board, the Committee shall have the right to use reasonable amounts of time of the Company’s independent accountants, outside lawyers and other internal staff to assist and advise the Committee in connection with its responsibilities. The Committee shall keep the Company’s Chief Financial Officer informed as to the general range of anticipated expenses for outside consultants.
VI. Amendments.
Any amendments to this Charter must be approved or ratified by a majority vote of the Company’s Board, including a majority of independent directors.
VII. Disclosure of Charter.
This Charter will be made available on the Company’s website at www.concordesecurity.com.
Adopted by the Board of Directors on June 17, 2024.
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Exhibit 99.4
CONCORDE INTERNATIONAL GROUP LTD
NOMINATING AND CORPORATE GOVERNANCE COMMITTEE CHARTER
| I. | Purpose. |
The Nominating and Corporate Governance Committee (the “Committee”) is appointed by the Board of Directors (the “Board”) of Concorde International Group Ltd (the “Company”) as a committee of the Board. The purpose of the Committee is to assist the Board in fulfilling its oversight responsibility to assure that the Company is governed in a manner consistent with the interests of the Company’s shareholders and in compliance with applicable laws, regulations, rules and orders.
The Committee has overall responsibility for: (i) identifying and evaluating individuals qualified to become members of the Board by reviewing nominees for election to the Board and recommending to the Board director nominees for election to fill any vacancies on the Board and whether at general meeting of the Company or otherwise, (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, in each case subject to the requirements of the second amended and restated memorandum and articles of association of the Company (as may be amended from time to time, the “Charter Documents”) and monitoring developments in the law and practice of corporate governance, and (iv) overseeing compliance with the Company’s Code of Ethics and Business Conduct and conduct of the Company’s officers and directors.
| II. | Membership, Structure and Qualifications. |
Membership and Structure. The Committee shall consist of two (2) or more independent directors. The Committee members shall be elected by the Board, upon the recommendation of the Committee, on such terms as may be specified by the Board or shareholders as applicable.
Qualifications. All Committee members shall meet all applicable independence requirements of The Nasdaq Stock Market LLC (“Nasdaq”) and applicable rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”).
Chairman. Unless the Chairman of the Committee (the “Chairman”) is elected by the full Board, the Committee members may designate a Chairman consistent with any recommendation of the Committee.
Resignation, Removal and Replacement. Any director may resign from the Committee at any time upon notice of such resignation to the Company. An independent director who ceases to be independent under Nasdaq requirements shall promptly resign to the extent required for the Company to comply with applicable laws, rules and regulations. The Board shall have the power at any time to remove a member of the Committee with or without cause, to fill all vacancies, and to designate alternate members, upon the recommendation of the Committee, to replace any absent or disqualified members, so long as the Committee shall at all times have at least two (2) members and be composed majority of independent board members.
| III. | Meetings and Other Actions. |
All meetings of and other actions by the Committee shall be held and taken pursuant to the Charter Documents, including provisions governing notice of meetings and waiver thereof, the number of Committee members required to take actions at meetings and by written consent, and other related matters. The Committee may invite any director who is not a member of the Committee, management, counsel, representatives of service providers or other persons to attend meetings and provide information as the Committee, in its sole discretion, considers appropriate.
Unless otherwise authorized by the Board, the Committee shall not delegate any of its authority to any subcommittee.
In the event that the Committee’s Chairman is unable to perform any of his or her functions or obligations hereunder, the Chairman of the Company’s Compensation Committee is hereby authorized and directed to act in the place and stead of the Chairman of this Committee and fulfill any and all functions or obligations that would otherwise be the responsibility of the Chairman of this Committee, without any further action or authorization by this Committee.
| IV. | Goals, Responsibilities and Authority. |
The following are the general goals, responsibilities and authority of the Committee and are set forth only for its guidance. The Committee, however, may diverge from these responsibilities and/or may assume such other responsibilities as the Board may delegate from time to time and/or as the Committee may deem necessary or appropriate from time to time in performing its functions in accordance with the Charter Documents and other governance documents of the Company with applicable law.
Nothing in this Charter shall be interpreted as diminishing or derogating the duties, responsibilities or obligations of the Board. Subject to the requirements of the Charter Documents and/or applicable law, the Committee shall have the following responsibilities:
Nominating Directors
1. Evaluate periodically the desirability of and recommend to the Board any changes in the size and composition of the Board or the qualifications for Board membership.
2. Select and evaluate nominated directors, nominated either by the Board or the shareholders, in accordance with the general and specific considerations set forth below:
(a) General Considerations. The Board shall be comprised of at least enough independent directors to comply with Nasdaq requirements as well as applicable rules and regulations of the SEC (each such independent director, an “Independent Director” and collectively, the “Independent Directors”). In making its recommendations, the Committee may consider some or all of the following factors:
1. the candidate’s judgment, skill, experience with other organizations of comparable purpose, complexity and size, and subject to similar legal restrictions and oversight;
2. the interplay of the candidate’s experience with the experience of other Board members;
3. the extent to which the candidate would be a desirable addition to the Board and any committee thereof;
4. whether or not the person has any relationships that might impair his or her independence, including, but not limited to, business, financial or family relationships with the Company’s management; and
5. the candidate’s ability to contribute to the effective management of the Company, taking into account the needs of the Company and such factors as the individual’s experience, perspective, skills and knowledge of the industries in which the Company’s subsidiaries operate.
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(b) Specific Considerations. In addition to the foregoing general considerations, the Committee shall develop, reevaluate at least annually and modify as appropriate a set of specific considerations outlining the skills, experiences (whether in business or in other areas such as public service, academia or scientific communities), particular areas of expertise, specific backgrounds, and other characteristics for which there is a specific need on the Board and which would enhance the effectiveness of the Board and its committees given its current composition.
3. Evaluate each new director candidate and each incumbent director before recommending that the Board nominate or re-nominate such individual for election or reelection (or that the Board elect such individual on an interim basis) as a director based upon the extent to which such individual satisfies the general criteria above and will contribute significantly to satisfying the overall mix of specific criteria identified above. Each decision to re-nominate an incumbent director should be based upon a careful consideration of such individual’s contributions, including the value of his or her experience as a director of the Company, the availability of new director candidates who may offer unique contributions and the Company’s changing needs.
4. Seek to identify potential director candidates who will strengthen the Board and will contribute to the overall mix of considerations identified above. This process should include establishing procedures for soliciting and reviewing potential nominees from directors and shareholders and for notifying those who suggest nominees of the outcome of such review. The Committee shall have sole authority to retain and terminate any third-party search firms to be used to identify director candidates, including sole authority to approve any such search firm’s fees and other terms of retention.
5. Submit to the Board the candidates for director to be recommended by the Board for election at the meetings of shareholders or otherwise and to be added to the Board at any other times due to any expansion of the Board, director resignations or retirements or otherwise.
6. In the event of a vacancy on the Board, following determination by the Board that such vacancy shall be filled, identify candidates for director qualified to fill such vacancy that satisfies the general criteria above.
Board of Directors
7. Monitor performance of the Board and its individual members based upon the general criteria and the specific criteria applicable to the Board and each of its members. If any serious issues are identified with any director, work with such director to resolve such issues or, if necessary, seek such director’s resignation or recommend to the Board such person’s removal.
8. Review director compensation process, self-evaluation and policies.
9. Develop and periodically evaluate initial orientation guidelines and continuing education guidelines for each member of the Board and each member of each committee thereof regarding his or her responsibilities as a director generally and as a member of any applicable committee of the Board, and monitor and evaluate annually (and at any additional time a new member joins the Board or any committee thereof).
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Board Committees
10. Review and evaluate at least annually the adequacy of the Committee’s own performance and Charter and provide a report on such evaluation and recommended proposed changes to the Charter to the Board.
11. Evaluate at least annually the performance, authority, operations, charter and composition of each standing or ad hoc committee of the Board (including any authority of a committee to delegate to a subcommittee) and the performance of each committee member and recommend any changes considered appropriate in the authority, operations, charter, number or membership of each committee.
12. Submit to the Board annually (and at any additional times that any committee members are to be selected) recommendations regarding candidates for membership on each committee of the Board.
Evaluation of and Succession Planning for Executive Officers
13. Assist the Board in evaluating the performance of and other factors relating to the retention of executive officers.
14. Develop and periodically review and revise as appropriate a management succession plan and related procedures. Consider and recommend to the Board candidates for successor to executive officers.
Corporate Governance
15. Develop, monitor and make recommendations to the Board on matters of Company policies and practices relating to corporate governance, including the Company’s corporate governance guidelines.
16. Review and make recommendations to the Board regarding proposals of shareholders that relate to corporate governance.
17. Oversee the evaluation of the Board.
18. Oversee compliance with the Company’s Code of Ethics and Business Conduct.
Other Matters
19. Perform such other duties and responsibilities as may be assigned to the Committee, from time to time, by the Board and/or the Chairman of the Board, or as designated in the Charter Documents or by applicable law.
The forgoing list of duties is not exhaustive, and the Committee may, in addition, perform such other functions as may be necessary or appropriate for the performance of its duties.
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| V. | Additional Resources. |
Subject to the approval of the Board, the Committee shall have the right to use reasonable amounts of time of the Company’s independent accountants, outside lawyers and other internal staff and also shall have the right to hire independent experts, lawyers and other consultants to assist and advise the Committee in connection with its responsibilities. The Committee shall keep the Company’s Chief Financial Officer informed as to the general range of anticipated expenses for outside consultants, and shall obtain the approval of the Board in advance for any expenditures.
| VI. | Amendments. |
Any amendments to this Charter must be approved or ratified by a majority vote of the Company’s Board, including a majority of independent directors.
| VII. | Disclosure of Charter. |
This Charter will be made available on the Company’s website at www.concordesecurity.com.
Adopted by the Board of Directors on June 17, 2024.
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Exhibit 99.5
CONSENT OF PERSON NAMED TO BECOME A DIRECTOR
Pursuant to Rule 438 promulgated under the Securities Act of 1933, as amended, the undersigned hereby consents to being named as a director appointee and to the disclosure of the undersigned’s biographical information included in the Registration Statement on Form F-1, and any amendments thereto, to be filed by Concorde International Group Ltd, a British Virgin Islands business company, with the Securities and Exchange Commission. The undersigned further consents to the filing of this consent as an exhibit to such Registration Statement.
| /s/ Yuen Fatt Yong | ||
| Name: | Yuen Fatt Yong | |
| Date: | August 27, 2024 | |
Exhibit 99.6
CONSENT OF PERSON NAMED TO BECOME A DIRECTOR
Pursuant to Rule 438 promulgated under the Securities Act of 1933, as amended, the undersigned hereby consents to being named as a director appointee and to the disclosure of the undersigned’s biographical information included in the Registration Statement on Form F-1, and any amendments thereto, to be filed by Concorde International Group Ltd, a British Virgin Islands business company, with the Securities and Exchange Commission. The undersigned further consents to the filing of this consent as an exhibit to such Registration Statement.
| /s/ Sim Peng Thia | ||
| Name: | Sim Peng Thia | |
| Date: | August 27, 2024 | |
Exhibit 99.7
CONSENT OF PERSON NAMED TO BECOME A DIRECTOR
Pursuant to Rule 438 promulgated under the Securities Act of 1933, as amended, the undersigned hereby consents to being named as a director appointee and to the disclosure of the undersigned’s biographical information included in the Registration Statement on Form F-1, and any amendments thereto, to be filed by Concorde International Group Ltd, a British Virgin Islands business company, with the Securities and Exchange Commission. The undersigned further consents to the filing of this consent as an exhibit to such Registration Statement.
| /s/ Mark Allen Brisson | ||
| Name: | Mark Allen Brisson | |
| Date: | August 27, 2024 | |