UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 20-F

☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2024

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of event requiring this shell company report

For the transition period from ________ to ________

Commission file number: 001-42290

HOMESTOLIFE LTD

(Exact name of Registrant as specified in its charter)

N/A

(Translation of Registrant’s name into English)

Cayman Islands

(Jurisdiction of incorporation or organization)

6 Raffles Boulevard, #02-01/02

Marina Square, Singapore 039594

(Address of principal executive offices)

Chew Kwang Yong

Telephone: +65 9730 3718

6 Raffles Boulevard, #02-01/02

Marina Square, Singapore 039594

(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act.

Securities registered or to be registered pursuant to Section 12(g) of the Act.

None

(Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.

None

(Title of Class)

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.

As of December 31, 2024, the issuer had 14,687,500 Ordinary Shares, par value $0.0001 per share, issued and outstanding.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes ☐ No ☒

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

Yes ☐ No ☒

Note - Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

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 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

TABLE OF CONTENTS

INTRODUCTION

In this annual report on Form 20-F, unless the context otherwise requires, references to:

This annual report on Form 20-F includes our audited consolidated financial statements for the years ended December 31, 2024, 2023, and 2022. In this annual report, we refer to assets, obligations, commitments, and liabilities in our consolidated financial statements in United States dollars. These dollar references are based on the exchange rate of Singapore dollars to United States dollars, determined as of a specific date or for a specific period. Changes in the exchange rate will affect the amount of our obligations and the value of our assets in terms of United States dollars which may result in an increase or decrease in the amount of our obligations and the value of our assets.

FORWARD-LOOKING STATEMENTS

This annual report contains forward-looking statements that reflect our current expectations and views of future events. The forward-looking statements are contained principally in “Item 3. Key Information—D. Risk Factors,” “Item 4. Information on the Company—B. Business Overview,” and “Item 5. Operating and Financial Review and Prospects.” These forward-looking statements are made under the “safe-harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. Known and unknown risks, uncertainties and other factors, including those listed under “Item 3. Key Information—D. Risk Factors,” may cause our actual results, performance, or achievements to be materially different from those expressed or implied by the forward-looking statements.

The words “may,” “might,” “will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “goal,” “objective,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “continue” and “ongoing,” or the negative of these terms, similar expressions or other comparable terminology intended to identify statements about the future. We have based these forward-looking statements largely on our current expectations and projections about future events that we believe may affect our financial condition, results of operations, business strategy, and financial needs. These forward-looking statements include statements relating to:

These forward-looking statements involve various risks and uncertainties. Although we believe that our expectations expressed in these forward-looking statements are reasonable, our expectations may later be found to be incorrect. Our actual results could be materially different from our expectations. Important risks and factors that could cause our actual results to be materially different from our expectations are generally set forth in “Item 3. Key Information—D. Risk Factors,” “Item 4. Information on the Company—B. Business Overview,” “Item 5. Operating and Financial Review and Prospects,” and other sections in this annual report. You should read thoroughly this annual report and the documents that we refer to with the understanding that our actual future results may be materially different from and worse than what we expect. We qualify all of our forward-looking statements by these cautionary statements.

This annual report contains translations of certain Singapore dollar amounts into U.S. dollars at specified rates. Unless otherwise stated, the following exchange rates are used in this annual report:

Part I

Item 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not applicable.

Item 2. OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable.

Item 3. KEY INFORMATION

A. [Reserved]

B. Capitalization and indebtedness.

Not applicable.

C. Reasons for the offer and use of proceeds.

Not applicable.

D. Risk factors.

Our business is subject to a number of risks, including risks that may prevent us from achieving our business objectives or may materially and adversely affect our business, financial condition, results of operations, cash flows and prospects that you should consider before making a decision to invest in our Ordinary Shares. These risks include, but are not limited to, the following:

Risks Related to Our Business

We may incur losses in the future.

We anticipate that our operating expenses, together with the increased general administrative expenses incurred as a public company, will increase in the foreseeable future as we seek to maintain and continue to grow our business and attract potential customers. These efforts may prove more expensive than we currently anticipate, and we may not succeed in increasing our revenue sufficiently to offset these higher expenses. As a result of the foregoing and other factors, we may incur net losses in the future and may be unable to achieve or maintain profitability on a quarterly or annual basis for the foreseeable future.

If we fail to manage our growth effectively, our business, financial condition and operating results could be harmed.

Our historical growth rates may not be sustainable or indicative of future growth. To manage our growth effectively, we must continue to implement our operational plans and strategies, improve and expand our infrastructure of people and information systems and expand, train and manage our employee base. If our new hires perform poorly, if we are unsuccessful in hiring, training, managing and integrating these new employees and staff, or if we are not successful in retaining our existing employees and staff, our business may be harmed. We also face significant competition for personnel. Failure to manage our hiring needs effectively or successfully integrate our new hires may have a material adverse effect on our business, financial condition and operating results. Properly managing our growth will also require us to establish consistent policies across regions and functions, and a failure to do so could likewise harm our business.

Additionally, the growth of our business places significant demands on our operations, as well as our management and other employees. Further, we have faced and may continue to face a number of challenges to our expansion into physical retail locations, including locating retail space with a cost and geographic profile that will allow us to operate in highly desirable shopping locations, hiring in-store talent and expanding our physical retail operations in a cost-effective manner. We have entered into and may continue to enter into long-term leases before we know whether our physical retail strategy or a particular geography will be successful. We are also required to manage relationships with a growing number of suppliers, customers and other third parties across the world. Our information technology systems and our internal controls and procedures may not be adequate to support future growth of our supplier and employee base.

Failure to manage our growth and organizational change effectively could lead us to over-invest or under-invest in technology and operations; result in weaknesses in our infrastructure, systems or controls; give rise to operational mistakes, losses or loss of productivity or business opportunities; reduce customer satisfaction; limit our ability to respond to competitive pressures; and result in loss of employees and reduced productivity of remaining employees. If we are unable to manage the growth of our organization effectively, our business, financial condition and operating results may be materially adversely affected.

If we fail to acquire new customers, reactivate prior customers or retain existing customers, or fail to do so in a cost-effective manner, our business, financial condition and operating results could be harmed.

Our success depends on our ability to acquire and retain customers in a cost-effective manner. In order to expand our customer base, we must appeal to and acquire customers who have historically used other means of commerce to purchase home goods and may prefer alternatives to our offerings, such as the websites of our competitors or our suppliers’ own websites. We have made significant investments related to customer acquisition and expect to continue to spend significant amounts to acquire additional customers and to reactivate prior customers. Our paid advertising efforts are primarily online channel advertising, including social media advertising, search engine marketing and paid engagement of online media companies. We engage influencers or key opinion leaders within the community via product sponsorship. We also conduct offline advertisements including printed display ads, direct mailing and magazine advertisements. These efforts are expensive and may not result in the cost-effective acquisition of customers. Our marketing expenses have varied from period to period, and we expect this trend to continue as we test new channels and refine our marketing strategies. We may increase or decrease our marketing spend within a period, based on the degree of our achievement of intended results, which may result in increased or decreased customer engagement in any given period. We cannot assure you that the net profit from new or returning customers we acquire will ultimately exceed the cost of acquiring those customers. Additionally, actions by third parties to block or impose restrictions on the delivery of certain advertisements could also adversely impact our business. If we fail to deliver a quality shopping experience, or if consumers do not perceive the products we offer to be of high value and quality, we may not be able to acquire new customers or retain existing customers. If we are unable to acquire new customers or reactivate prior customers who purchase products in numbers sufficient to grow our business, we may not be able to generate the scale necessary to drive beneficial network effects with our suppliers or efficiencies in our logistics network, our net revenue may decrease, and our business, financial condition and operating results may be materially adversely affected.

We also utilize non-paid advertising. Our website benefits significantly from direct searches via various platforms. In addition, our non-paid advertising strategy includes leveraging the value of our organic social media content and user-generated content within our community. Although we employ search engine optimization and search engine marketing strategies, our ability to maintain and increase the number of visitors directed to our website and application is not entirely within our control. Search engines frequently update and change the logic that determines the placement and display of results of a user’s search, such that the purchased or algorithmic placement of links to our sites can be negatively affected. Moreover, a search engine could, for competitive or other purposes, alter its search algorithms or results, causing our sites to place lower in search query results. A major search engine could change its algorithms in a manner that negatively affects our paid or non-paid search ranking, and competitive dynamics could impact the effectiveness of search engine marketing or search engine optimization. We also obtain a significant amount of traffic via social networking websites or other channels used by our current and prospective customers. As e-commerce and social networking continue to rapidly evolve, we must continue to establish relationships with these channels and may be unable to develop or maintain these relationships on acceptable terms. If we are unable to cost-effectively drive traffic to our sites, our ability to acquire new customers, reactivate prior customers or retain our existing customers and our financial condition would suffer.

Further, some of our new customers originate from word of mouth or other non-paid referrals from existing customers. If our efforts to satisfy our existing customers are not successful, we may not be able to acquire new customers or reactivate prior customers through these referrals, which may adversely affect how we continue to grow our business, or may require us to incur significantly higher marketing expenses in order to acquire new customers.

Our success depends in part on our ability to increase our net revenue per active customer. If our efforts to increase customer loyalty and repeat purchasing as well as maintain high levels of customer engagement are not successful, our growth prospects and net revenue will be materially adversely affected.

Our ability to grow our business depends on our ability to generate increased net revenue and repeat purchases from our customer base. Since our customer base in almost exclusively retail in nature, that would require us to maintain high levels of customer engagement. To do this, we must continue to provide our customers and potential customers with a unified, convenient, efficient and differentiated shopping experience by:

If we fail to increase net revenue per active customer, generate repeat purchases or maintain high levels of customer engagement, our growth prospects, operating results and financial condition could be materially adversely affected.

We have faced and will continue to face price competition in the future. In addition, competitors with whom we compete, or who can obtain better pricing, more favorable contractual terms and conditions, or more favorable mix of products during periods of limited supply may be able to offer lower prices than we are able to offer. Our operating results and financial condition may be adversely affected by these and other industry-wide pricing pressures.

Our business depends on our ability to build and maintain strong brands. We may not be able to maintain and enhance our “HomesToLife” brand if we receive unfavorable customer complaints, negative publicity or otherwise fail to live up to consumers’ expectations, which could materially adversely affect our business, results of operations and growth prospects.

We mainly engaged in the sales of (i) upholstered sofas under the brands “Domicil,” “Fabbrica” and other HTL brands; and (ii) to a lesser extent, complementary furniture pieces, such as case goods, tables, bedding and mattress. Our ability to maintain and enhance our one-stop shop concept depends largely on our ability to maintain customer confidence in our product offerings, including by customizing our recommendations of high quality furniture to fit customers’ living style; maintaining product availability and delivering products on time and without damage. If customers do not have a satisfactory shopping experience, they may seek out alternative offerings from our competitors and may not return to our retail stores as often in the future, or at all. In addition, unfavorable publicity regarding, product quality or availability, poor customer service, delivery problems, competitive pressures, litigation or regulatory activity, could seriously harm our reputation. Such negative publicity also could have an adverse effect on the size, engagement and loyalty of our customer base and result in decreased net revenue, which could adversely affect our business and financial results.

In addition, maintaining and enhancing our “HomesToLife” brand name may require us to make substantial investments, and these investments may not be successful. If we fail to promote and maintain our brand, or if we incur excessive expenses in this effort, our business, operating results and financial condition may be materially adversely affected. We anticipate that, as our market becomes increasingly competitive, maintaining and enhancing our brand may become increasingly difficult and expensive. Maintaining and enhancing our brand will depend largely on our ability to provide high quality products to our customers.

Customer complaints or negative publicity about our stores, products, delivery times, company practices, employees, customer data handling and security practices or customer support, could rapidly and severely diminish consumer confidence in us and result in harm to our “HomesToLife” brand name and decreased revenue, whether or not the complaints and negative sentiment are based in fact.

Our physical retail stores may not achieve sales or operations targets and may negatively impact our financial results.

We operate six physical retail stores in Singapore. We believe that continued expansion into new physical retail stores represents a growth opportunity for us. Our growth strategy is dependent on our ability to identify and open future store locations in new and existing markets. Our ability to open stores in a timely and successful manner depends in part on the following factors: the availability of desirable store locations; the availability and costs of construction labor and materials; local permitting timelines; the ability to negotiate acceptable lease and development terms at reasonable rates, including the length of rental periods and renewal options and the ability to obtain termination rights; our ability to obtain all required approvals and comply with other regulatory requirements; our relationships with current and prospective landlords; the ability to secure and manage the inventory necessary for the launch and operation of new stores; the availability of capital funding for expansion; and general economic conditions. Any or all of these factors and conditions could materially adversely affect our growth and profitability.

New store openings may negatively impact our financial results due to the effect of store opening costs and lower sales during the initial period following opening. New stores, particularly those in new markets, build their brand recognition and customer base over time and, as a result, may have lower margins and incur higher operating expenses. We may not anticipate all of the challenges imposed by the expansion of our operations into new geographic markets. We may not manage our expansion effectively, and our failure to achieve or properly execute our expansion plans could limit our growth or have a material adverse effect on our business, financial condition and results of operations.

Our efforts to expand our business into new geographic markets internationally will subject us to additional business, legal, financial and competitive risks, may not be successful and could adversely affect our profitability and operating results.

Our business success depends to some extent on our ability to expand our existing one-stop shop concept and product offerings into new geographic markets from time to time. Our plan to expand and further penetrate in the Singapore and Asian home furnishings market may be subject to risks such as:

The occurrence of any of these risks could negatively affect our expansion plan and consequently our business and operating results.

With the proceeds of our IPO, we have plans to open new HomesToLife stores in not only Singapore, but also Taiwan, Korea, Indonesia, Malaysia, and other parts of Asia in the next six months and in the longer term. We have also incorporated HTL FE, through which we source, distribute, and deliver premium furniture and related products to both consumer and business sectors across the Asia-Pacific region. Expanding internationally is time-consuming, requires significant amounts of management time and resources, substantial upfront investments, including investments in marketing, information technology and additional personnel. Expanding our one-stop shop concept internationally is particularly challenging because it requires us to gain country-specific knowledge about consumers, regional competitors and local laws, construct catalogs specific to the country, open new physical stores, and build local logistics capabilities. These technological and logistical challenges can result in failures or other quality issues that may cause customer dissatisfaction and harm our reputation and brand. In the future, we may also consider incorporating the franchise model in our international expansion plan although there is no assurance at this time that that is what we will do. We also cannot guarantee the success of the franchise model. We may not be able to generate satisfactory net revenue from these efforts to offset related costs. Any lack of market acceptance of our efforts to expand our one-stop shop concept and product offerings into new geographic markets could have a material adverse effect on our business, prospects, financial condition and operating results.

In addition, our current and potential competitors in these new geographic markets may have greater brand recognition, financial resources, longer operating histories and larger customer bases than we do in these markets. If we are not successful to recoup our investments in these new markets, our business, financial condition and operating results may be materially adversely affected.

The upholstered furniture industry we are in is heavily reliant on consumer spending, housing market conditions, and design trends.

The upholstered furniture industry is heavily reliant on consumer spending, housing market conditions, and design trends. We target the premium mass market and at the middle and upper class consumer markets. If there is a decline of discretionary consumer spending or purchasing power in that demographics due to general economic conditions or other reasons, our business and operating results will be adversely affected. We target the customers who may be purchasing their second or third home and prefer furniture of premium quality at affordable prices. An unfavorable housing market condition can have material adverse effect on our business and operating results. We sell luxury contemporary leather and fabric upholstered furniture, such as, sofas, armchairs, recliners, and related accessories in Singapore. If we fail to move with the latest changes to the popular design trends in the market we operate, our business and operating results will suffer.

A cybersecurity attack, data breach or other security incident could impact our sites, networks, systems, platforms, confidential information and assets causing damage and substantial harm to our business and operating results, reputation and brand, and resulting in proceedings or actions against us by government regulatory bodies or private parties.

We collect, maintain, transmit and store data about our customers, employees, contractors, suppliers, vendors and others, including payment information and personally identifiable information, as well as other personal, confidential and proprietary information. In certain instances, we leverage and rely on third-party service providers to collect, maintain, transmit and store certain proprietary, personal and confidential information on our behalf, such as credit card data. To protect such data and other information from being breached, compromised or lost, we maintain and regularly assess against industry standard cybersecurity safeguards and best practices.

Like many businesses, despite all of our efforts to defend against cyber threats and respond to incidents, we, and our third party service providers, have in the past and will in the future continue to be subject to cyber-attacks, cyber security threats and attempts to compromise and penetrate our data security systems and disrupt our operations. Recent cybersecurity incidents impacting large institutions, including those resulting in the compromise of sensitive data and the disruption of critical systems, suggest that the risk of such cyber events is significant, even when reasonable measures to protect the confidentiality, integrity, and availability of information are implemented. This may be as a result of deliberate malicious attempts to infiltrate our systems, including but not limited to, state-sponsored attackers or cybercriminal efforts, zero-day vulnerabilities, phishing attacks, software supply chain compromises, or non-malicious factors, including but not limited to, disruptions during the process of upgrading or replacing computer software or hardware, errors by the vendors we rely upon, or other disruptions that may jeopardize the security of our assets or information. We and our service providers may not anticipate or prevent all types of attacks until after they have already been launched and techniques used to obtain unauthorized access may change frequently and may not be known in the market. Security incidents such as ransomware attacks are becoming increasingly prevalent and severe, as well as increasingly difficult to detect. In addition, security breaches or data and asset leaks can also occur as a result of non-technical issues, including intentional or inadvertent actions by our employees or by persons with whom we have commercial relationships. Further, the prevalence of remote work by some of our employees and those of our third-party service providers creates increased risk that a cybersecurity incident may occur.

In addition to data loss and compromise, cybersecurity incidents or breaches of our security measures or those of our third-party service providers could result in interruption, disruption or malfunction of operations; costs relating to breach remediation, deployment or training of additional personnel and protection technologies, responses to governmental investigations and media inquiries and coverage; engagement of third party experts and consultants; litigation, regulatory action and other potential liabilities. Any compromise or breach of our security measures, or those of our third-party service providers, could violate applicable privacy, data security and other laws and regulations, and cause significant legal and financial exposure, adverse publicity and a loss of confidence in our security measures, which could have a material adverse effect on our business, financial condition and operating results. Our reputation and brand could be damaged, our business may suffer, we could be required to expend significant capital and other resources to alleviate problems caused by such incidents and we could be exposed to a risk of loss, litigation or regulatory action and possible liability. Although we maintain cyber liability insurance, we cannot be certain that our coverage will be adequate for liabilities actually incurred or that insurance will continue to be available to us on economically reasonable terms, or at all. We may need to devote significant resources to protect against security breaches or to address problems caused by breaches, diverting resources from the growth and expansion of our business.

Our failure to operate effectively in a highly competitive and evolving industry could have a material adverse effect on our business.

Our business is rapidly evolving and intensely competitive, with numerous competitors including furniture stores, big box retailers, department stores, specialty retailers and online retailers and marketplaces in Singapore.

We expect competition generally to continue to increase. We believe that our ability to compete successfully depends upon many factors both within and beyond our control, including:

Some of our current competitors have, and potential competitors may have, longer operating histories, greater brand recognition, larger fulfillment infrastructures, greater technical capabilities, faster and less costly shipping and assembling, lower prices, significantly greater financial, marketing and other resources and larger customer bases than we do. These factors may allow our competitors to derive greater net revenue and profits from their existing customer base, acquire customers at lower costs or respond more quickly than we can to new or emerging technologies and changes in consumer habits.

Our marketing efforts to help grow our business may not be effective, and failure to effectively develop and expand our sales and marketing capabilities could harm our ability to increase our customer base and achieve broader market acceptance of our products and services.

Our success will depend, in part, on our ability to attract new consumers and retain existing customers. We may have to incur significantly higher and more sustained advertising and promotional expenditures in order to attract additional consumers to our stores and convert them into purchasing customers.

In addition, if we do not have a clear and relevant promotional calendar to engage our customers, especially in the current macroeconomic environment, our customers may purchase fewer goods from us or we may have to increase our promotional activities. If the shopping experience we provide does not appeal to consumers or meet the expectations of existing customers, we may not acquire new customers at sustainable rates, acquired customers may not become repeat customers and existing customers’ buying patterns and levels may decrease.

Our business may be affected by increase in rental expenses or the termination of leases of our retail stores.

We operate our own retail stores under the name “HomesToLife” by offering a one-stop solution to retail customers to address their furniture needs. As of the date of this annual report, we have in operation 6 retail stores owned and operated by us under our brand name “HomesToLife” in Singapore. The retail stores are essential to our business as they are an important distribution channel of our products. However, there is no assurance that we can renew the existing tenancies upon their respective expiry or can renew the same on terms and conditions no less favorable to us that the existing ones. Failure to renew the existing tenancies on terms and conditions acceptable to us may lead to disruption of our business and additional costs being incurred for relocation and renovation. If we are unable to find alternative locations that are suitable or on commercially acceptable terms in a timely manner, it may lead to reduction in the number of retail stores and our business, results of operation and financial condition may be adversely affected.

Furthermore, rental expenditure is one of the major costs in our business operation. For the fiscal years ended December 31, 2024, 2023 and 2022, payments on lease liabilities, which represent rental costs, accounted to US$1.6 million, US$1.3 million and US$0.9 million. Any substantial increase in rental expenses of our retail venues may increase our cost of operation and may adversely affect our profitability and financial positions.

We materially rely on our related parties as our sofa suppliers. Such arrangement materially and adversely exposes us to unique risk. Any disruption in the supplier’s relationship could have a material adverse effect on our business. Any disruption in the manufacturing of sofas and our inability to identify alternative sofa suppliers may materially and adversely affect our business operations and financial results.

Historically, as we had disclosed in our IPO prospectus on October 1, 2024, we materially relied on HTL Marketing Pte. Ltd. (“HTL Marketing”) and HTL Manufacturing Pte. Ltd. (“HTL Manufacturing”), which are related parties to us for supply of goods to HomesToLife Singapore. For the year ended December 31, 2024, our purchases from HTL Marketing and HTL Manufacturing amounted to US$0.9 million and nil, representing 60% and 0% of our purchases, respectively. For the year ended December 31, 2023, our purchases from HTL Marketing and HTL Manufacturing amounted to US$1.0 million and nil, representing 72% and nil of our purchases, respectively. For the year ended December 31, 2022, our purchases from HTL Marketing and HTL Manufacturing amounted to US$0.9 million and US$0.7 million, representing 43% and 31% of our purchases, respectively.

Since January 1, 2025, HomesToLife Singapore has transitioned its major supply source from HTL Marketing to HTL Furniture (China) Co., LTD (“HTL Furniture”), another HTL Group company, through HTL FE. HTL FE signed a contract manufacturing agreement (the “Contract Manufacturing Agreement”) with HTL Furniture on November 1, 2024 and HomesToLife Singapore entered into a supply agreement with HTL FE on January 1, 2025, with substantially the same terms as the supply agreement that was originally entered into between HomesToLife Singapore and HTL Marketing.

Such arrangements materially and adversely exposes us to a unique risk. Our business relies solely and heavily on a stable and adequate supply of sofas from the sofa manufacturers. If our business relationships with the sofa suppliers are interrupted or terminated, this may lead to a material interruption of our operations or a suspension of our ability to procure sofas or delays in fulfilling our customer orders until we find another supplier that can supply our sofa products. Although we have entered into long term agreements with the sofa manufacturers, there is no assurance that the agreements can be renewed on commercially favorable terms upon their expiration.

Any disruption in our supplier relationships could have a material adverse effect on our business. Events that adversely affect our suppliers could impair our ability to obtain the sofa supply that we desire. Such events include problems with our suppliers’ businesses, finances, labor relations, ability to obtain raw materials, costs, production, quality control, insurance and reputation, as well as natural disasters, pandemics, or other catastrophic occurrences. A failure by any current or future supplier to comply with the environmental, safety or other laws and regulations, meet require timelines, and hire and retain qualified employees may disrupt our supply of products.

In the event of any early termination or non-renewal of our agreements with the sofa manufacturers, or in the event of any disruption, delay or inability on the part of our suppliers to manufacture sufficient and quality products to us, we cannot assure you that we would be able to identify alternative suppliers on commercially acceptable terms which may thereby result in material and adverse effects on our business, financial conditions and operating results. Failure to find a suitable replacement, even on temporary basis, would have an adverse effect on our brand image, financial conditions, and the result of operations.

If our sofa manufacturers fail to deliver the sofa supply we need on the terms we have agreed, it may be challenging to secure alternative sources at commercially acceptable prices or on other satisfactory terms, in a timely manner. Any extended delays in securing an alternative source could result in late shipments of our products to our customers, which could materially and adversely affect our customer relationship, our brand image, profitability, results of operations, and financial condition. If we experience significant increased demand for our products, there can be no assurance that additional supplies of sofas will be available for us when required on acceptable terms, or at all, or our suppliers would allocate sufficient capacity to us in order to meet our requirements, fulfill our orders in a timely manner or meet our strict quality standards. Even if our existing suppliers are able to meet our needs or if we are able to find new manufacturers, we may encounter delays in production, inconsistencies in quality and additional costs. We are not likely to be able to pass the increased costs to the customer immediately, if at all, which may decrease or eliminate our profitability in any period. Any delays or interruption in or increased costs of purchases could have a material and adverse effect on our ability to meet customers’ demand for our products and result in lower net sales and profitability both in the short and long term.

The supply and price of our products are influenced by a number of factors, some of which are beyond our control.

As we do not manufacture our products and instead source them from suppliers in the PRC and a few other Asian countries, the price, quality and supply of our products may be influenced by a number of factors that are beyond our control, including but not limited to the prices of raw materials, the imposition of import or export tariffs or sales taxes, the quality control of our suppliers, logistics costs, shipment delay, bad weather and natural hazards. Any of the above mentioned factors could impact on the price, quality and supply of our products which could materially and adversely affect our business, results of operation and financial condition.

We may be subject to product liability and other similar claims and lawsuits if people or property are harmed by the products we sell.

We source our products from suppliers and are subject to the inherent risks associated therewith, including product recalls, product liability claims, quality control and regulatory action relating to safety, personal injury, death or environmental or property damage. Our suppliers may not have adequate financial resources or insurance coverage to fulfill their obligations under any product warranties given by them. Seeking indemnifications from our suppliers may potentially lead to litigation and claims against us by our customers which may have an adverse effect on our reputation and brand image, lead to negative publicity and, regardless of the validity of such claims, may reduce our sales which may in turn adversely affect our financial performance. We may also be held liable for purchase or import of products made of restricted materials or failing safety standards under the relevant laws and regulations governing the supplier and/or our business operations in Singapore. In addition, if complaints from customers escalate into legal claims, resources such as time and legal costs would have to be incurred to address such claims, thereby further affecting our business and financial performance.

Seasonal trends in our business create variability in our financial and operating results and place increased strain on our operations.

Historically, we have experienced surges in orders associated with promotional activities and seasonal trends. This activity may place additional demands on our staff in our retail stores and our logistics network and could cause or exacerbate slowdowns or interruptions. Any such service interruptions could prevent us from efficiently receiving or fulfilling orders, which may reduce the volume or quality of goods or services we sell and may cause customer dissatisfaction and harm our reputation and brand. We generally record a higher volume of order in March, April, June, August, November and December. In addition, the comparison of our revenue and operating results between different periods in any given financial year may not be relied upon as indicators of our performance. Any unpredictable and material changes in the market during our peak seasons may materially and adversely affect our financial condition and profitability.

Merchandise returns could harm our business.

HomesToLife Singapore allows its customers to return products, subject to our return policy. While our current merchandise returns are minimal, if merchandise returns are significant in the future, our business, prospects, financial condition and results of operations could be affected. Further, we modify our policies relating to returns from time to time, which may result in customer dissatisfaction or an increase in the number of product returns. Many of our products are large and require special handling and delivery. From time to time, our products are damaged in transit, which can increase return rates and affect our brand image and reputation.

We are subject to risks related to online transactions and payment methods.

We accept payments using a variety of methods, including credit card, debit card, electronic and mobile payment technologies, credit accounts (including promotional financing), gift cards and customer invoicing. We rely on third parties to provide many of these payment methods and payment processing services, including certain promotional financing. As we offer new payment options to consumers, we may be subject to additional regulations, compliance requirements and fraud. For certain payment methods, including credit and debit cards, we pay interchange and other fees, which may increase over time and raise our operating costs and lower profitability. As our business changes, we may also be subject to different rules under existing standards, which may require new assessments that involve costs above what we currently pay for compliance. If we fail to comply with the rules or requirements of any provider of a payment method we accept, if the volume of fraud in our transactions limits or terminates our rights to use payment methods we currently accept, or if a data breach occurs relating to our payment systems, we may, among other things, be subject to fines or higher transaction fees and may lose, or face restrictions placed upon, our ability to accept credit card and debit card payments from consumers or to facilitate other types of online payments. If any of these events were to occur, our business, financial condition and operating results could be materially and adversely affected.

We rarely, if not never, have received orders placed with fraudulent credit card data, we may, in the future, suffer losses as a result of orders placed with such fraudulent credit card data even if the associated financial institution approved payment of the orders. Under current credit card practices, we may be liable for fraudulent credit card transactions. We may, in the future, also suffer losses from other online transaction fraud, including fraudulent returns. If we are unable to detect or control credit card or transaction fraud, our liability for these transactions could harm our business, financial condition and operating results.

We may not succeed in implementing our business strategies and future expansion plan.

We cannot guarantee our business strategies and future expansion plans as proposed will be successful as there are a number of factors which are beyond our control and may affect our business prospects such as economic and political conditions, global economic conditions, change in government regulations and customers’ behavior. In particular, there is no assurance that we will be able to find suitable locations for the opening of new retail stores on terms commercially acceptable to us. On the other hand, such expansion may put pressure on our managerial, financial and operational resources. If we are unable to manage our expansion and the rising costs associated with such expansion effectively, our financial condition and result of operation may be adversely affected.

We may be subject to risks associated with debt financing, including rising interest rates.

Due to our working capital requirements to support our day-to-day operations and business expansion, we may finance all or a substantial portion of our costs through bank loans and credit facilities.

While we believe that we have sufficient capital from our available cash resources, our cash generated from our business operations and our credit facilities to meet our current working capital and capital expenditure requirements, we may require additional debt financing to operate our business, implement our future business strategies and/or acquire complementary businesses.

Our ability to obtain debt financing depends on a number of factors including our financial strength, creditworthiness and prospects, as well as other factors beyond our control, including general economic, liquidity and political conditions. There is no assurance that we will be able to secure adequate debt financing on terms acceptable to us, or at all. In the event that we are unable to secure adequate debt financing on terms acceptable to us, we may not be able to implement our business strategies and our business and prospects could be materially and adversely affected as a result. Rising interest rates may increase the Company’s operational costs of funds.

Any disruptions, volatility or uncertainty of the credit markets could limit our ability to borrow funds or cause our borrowings to become more expensive. As such, we may be forced to pay unattractive interest rates, thereby increasing our interest expense, decreasing our profitability and reducing our financial flexibility if we take on additional debt financing. Any material increase in interest rates would also increase our cost of borrowing and debt financing costs, which may weaken our ability to obtain further future debt financing.

Further, debt financing may restrict our freedom to operate our business as it may require conditions and/or covenants that:

Our success depends on our ability to retain our core management team and other key personnel.

Our performance depends on the continued service and performance of our directors, officers and senior management as they are expected to play an important role in guiding the implementation of our business strategies and future plans. If any of our directors, officers or any members of our senior management were to terminate their service or employment, there can be no assurance that we would be able to find suitable replacements in a timely manner, at acceptable cost or at all. The loss of services of key personnel or the inability to identify, hire, train and retain other qualified and managerial personnel in the future may materially and adversely affect our business, financial condition, results of operations and prospects.

Our directors’ and executive officers’ other business activities may pose conflicts of time commitment and conflicts of interest.

Our directors and executive officers have other business interests outside the Company that could potentially give rise to conflicts of time commitment. For example, our directors and executive officers own and/or are employed in executive positions in other HTL Group companies that operate and conduct business outside of Asia, including in the retail sale of such upholstered furniture and related goods, as well as in the manufacturing of such upholstered furniture and related goods.

Below is a chart showing the approximate percentages of the time historically devoted by certain directors and officers to matters concerning the Company and other companies.

As these directors and officers devote considerable time and effort to other companies, these sort of business activities could both distract them from focusing on the Company and pose a conflict of time commitment.

Our management team has limited experience managing a public company listed in the U.S.

While the members of our management team have experience in managing a publicly traded company on the Singapore stock exchange in various capacities, prior to our IPO, most members of our management team had not previously served as management of a publicly traded company on a US stock exchange and may not have experience complying with the increasingly complex laws pertaining to such public companies. Our management team may not successfully or efficiently manage a public company that is subject to significant regulatory oversight and reporting obligations under the U.S. federal securities laws as well as the continuous scrutiny of securities analysts and investors. These new obligations and constituents will require significant attention from our management and could divert their attention away from the day-to-day management of our business, which could adversely affect our business and financial performance.

We are exposed to legal or other proceedings or to other disputes or claims.

In the event that our customers do not make payment in a timely manner, we may seek to enforce our contractual rights and seek recourse via litigation or arbitration. These legal procedures are time- consuming and the settlement of a contract dispute may require additional financial and other resources. Failure to secure adequate payments in time or to manage past due receivables effectively could have a material and adverse effect on our business, financial condition, results of operations and prospects.

Further, disputes and claims may arise, from time to time, between our Group and our customers, suppliers or sub-contractors for various reasons such as delays, unsatisfactory service delivery and alleged breaches of service contracts. To date, we have not been the subject of workplace safety and/or negligence claims from employees and/or members of the public, but there is a risk that such claims may be made against us in the future. These disputes, if remain unresolved or worsen, may eventually result in legal or other proceedings and therefore cause disruptions and delays to our operations, in addition to the extra costs that may be incurred in their settlement or other resolution. Our resources may also be diverted to defend the claims, thereby adversely affecting our Group’s business, financial condition, results of operations and prospects.

In the event that we are unable to resolve the aforementioned disputes or claims satisfactorily in a timely manner or at all, our Group’s business, financial condition and results of operation may be materially and adversely affected. Please refer to the section titled “Item 4. Information on the Company—B. Business Overview—Legal Proceedings.” of this annual report for further details.

We are exposed to foreign exchange fluctuation.

Some of our products are imported from overseas sourced from the PRC and a few other Asian countries and we are therefore subject to exchange rate risks. Most of our purchases are settled in USD, but our sales are in Singapore dollars. There is no assurance on sustainability of our growth. We do not undertake any hedging of the currency exchange risk. We cannot predict the impact of future exchange rate fluctuations on our results of operations. In the event of appreciation of USD and/or other foreign currencies against Singapore dollars, our profit margin will be affected if we are unable to transfer such additional cost to our customers, and our profitability and financial performance may suffer.

Our existing insurance may not sufficiently cover the risks related to our business operation.

We maintain business insurance of our stores and our office, such as combined general and products liability insurance. We also maintain directors and officers liability insurance. While our management believes that we have sufficient insurance coverage for our business operations in line with industry standards and business practices in Singapore and although we may be able to increase our insurance coverage when required, we cannot guarantee that our existing insurance policies will sufficiently cover all potential liabilities or risks associated with our business operations. In the event that our insurance does not or is insufficient to compensate, or should we be unable to effect any insurance, for the losses or damages arising from the potential liabilities, our financial condition and results of operations could be adversely affected.

As a public company, we expect the laws, rules and regulations governing U.S. public companies will make it more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage.

In the event that our existing insurance coverage is insufficient to indemnify us against all or any losses, our business, financial condition, results of operations and prospects may be materially and adversely affected.

We may not be able to adequately protect our intellectual property rights and there may be copycat counterfeit competition and an inability to protect or use our intellectual property rights may adversely affect our business.

As of the date of this annual report, we have two trademarks registered in Singapore and a few foreign countries. We are also authorized to use four trademark(s). We might from time to time apply for new trademarks. We cannot assure you that our pending trademark applications, if any, will proceed to registration, and even registered trademarks could be challenged by a third party including by way of revocation or invalidity actions. Unauthorized use of our trademarks may do damage to our brand and reputation and/or affect our business in other ways. We are not aware of any infringement of our intellectual property rights in the past in Singapore but there is no assurance that there will not be any infringement in the future. In the event that any infringement occurs, we may have to protect our intellectual property rights or other rights through litigation which may be costly and could have adverse impact on our business, results of operations and financial condition.

Moreover, there is no assurance that there will not be any counterfeit products of the furniture products we sourced overseas or our own products being sold in Singapore or neighboring countries. Demand for our products may be adversely affected should there be any copycat products and in which case, our performance and business operations may also be adversely affected.

In addition, there could be potential trade name or trademark ownership or infringement claims brought by owners of other rights, including registered trademarks, in our marks or marks similar to ours. Any such claims, brand dilution or consumer confusion related to our “HomesToLife” brand could damage our reputation and brand identity and substantially harm our business, financial condition, cash flows and results of operations.

Our products may be subject to third party intellectual property rights.

As the products sourced by us are procured from various suppliers, it is not commercially practicable for us to ascertain whether such products infringe on third party intellectual property rights. In the event that any product we sell infringes on third party intellectual property rights, we may also be found liable for such infringement and be compelled to discontinue the sale of the infringing products and/or pay damages or suffer other liabilities. It may also lead to litigation which could result in substantial costs and diversion of resources and negatively affect our reputation, profitability and prospects.

Competition for highly skilled personnel is often intense and we may incur significant costs or be unsuccessful in attracting, integrating, or retaining qualified personnel to fulfil our current or future needs.

We have, from time to time, experienced, and we expect to continue to experience, difficulty in hiring and retaining highly skilled employees with appropriate qualifications. In addition, if any of our senior management or key personnel joins a competitor or engages in a competing business, we may lose business, trade secrets, business partners and key personnel. Furthermore, prospective candidates and existing employees often consider the value of the equity awards they receive in connection with their employment. Thus, our ability to attract or retain highly skilled employees may be adversely affected by any declines in the perceived value of our equity or equity awards. Furthermore, there are no assurances that the number of shares reserved for issuance under our 2024 Incentive Securities Plan will be sufficient to grant equity awards adequate to recruit new employees and to compensate existing employees.

Our operating history may not be indicative of our future growth or financial results and we may not be able to sustain our historical growth rates.

Although our major operating entity, namely HomesToLife Singapore, was incorporated with limited liability in Singapore in 1989, the actual period of business operation of the retail sale of furniture only started from 2014. Our operating history may not be indicative of our future growth or financial results. There is no assurance that we will be able to grow our revenues in future periods. Our growth rates may decline for any number of possible reasons, and some of them are beyond our control, including decreasing customers, decreasing customer demand, increasing competition, declining growth of the furniture industry in general, shortage of raw materials, price increase of raw materials, or changes in government policies or general economic conditions. We will continue to expand our sales network and product and services offerings and to increase our customer base and volume of sales. However, the execution of our expansion plan is subject to uncertainty and the sales may not grow at the rate we expect for the reasons stated above. If our growth rates decline, investors’ perceptions of our business and prospects may be adversely affected and the market price of our securities could decline.

We may be exposed to liabilities under applicable anti-corruption laws and any determination that we violated these laws could have a materially adverse effect on our business.

We are subject to various anti-corruption laws that prohibit companies and their agents from making improper payments or offers of payments for the purpose of obtaining or retaining business. We may conduct business in countries and regions that are generally recognized as potentially more corrupt business environments. Activities in these countries create the risk of unauthorized payments or offers of payments by one of our employees or agents that could be in violation of various anti-corruption laws, including the United States Foreign Corrupt Practices Act (the “FCPA”) and the Singapore Prevention of Corruption Act 1960 (the “POCA”). We have implemented safeguards and policies to discourage these practices by our employees and agents but we cannot provide assurance that our internal controls and compliance systems will always protect us from acts committed by our employees or agents. If our employees or agents violate our policies or we fail to maintain adequate record keeping and internal accounting practices to accurately record our transactions, we may be subject to regulatory sanctions. Violations of the FCPA, POCA or other anti-corruption laws, or allegations of any such acts, could damage our reputation and subject us to civil or criminal investigations in the United States and in other jurisdictions. Those and any related shareholder lawsuits could lead to substantial civil and criminal, monetary and nonmonetary penalties and cause us to incur significant legal and investigatory fees which could adversely affect our business, combined financial condition and results of operations.

Any inability by us to consummate and effectively integrate acquisitions into our business operations may adversely affect our results of operations.

We may in the future invest time and resources into carefully assessing opportunities for acquisitions and/or strategic investments, and we continue to evaluate potential acquisition opportunities to support, strengthen and grow our business, including potentially in the near term.

Despite diligence and integration planning, acquisitions still present certain risks, including the time and economic costs of integrating an acquisition’s IT system, control and financial systems, unforeseen liabilities, and difficulties in bringing together different work cultures and personnel. There can be no assurance that we will be able to locate suitable acquisition candidates, acquire potential acquisition candidates, acquire such candidates on commercially reasonable terms, or integrate acquired businesses successfully in the future. Future acquisitions, including those we may consummate in the near term, may require us to incur additional debt and contingent liabilities, which may adversely affect our business, results of operations and combined financial condition. The process of integrating acquired businesses into our existing operations may result in operating, contractual and supply chain difficulties, such as the failure to retain customers or management personnel. Such difficulties may divert significant financial, operational and managerial resources from our existing operations, and make it more difficult to achieve our operating and strategic objectives.

We may be subject to claims against us relating to any acquisition or business combination.

There may be liabilities assumed in any acquisition or business combination that we did not discover or that we underestimated in the course of performing our due diligence. Although a seller generally will have indemnification obligations in favor of us under an acquisition or merger agreement, these obligations will usually be subject to financial limitations, such as general deductibles and maximum recovery amounts, as well as time limitations. We cannot ensure that our right to indemnification from any sellers will be enforceable, collectible or sufficient in amount, scope or duration to fully offset the amount of any undiscovered or underestimated liabilities that we may incur. Any such liabilities, individually or collectively, could have a material and adverse effect on our prospects, business and financial results.

We may be subject to supply chain disruptions, which could have a material adverse effect on our business, financial condition and results of operations.

We have experienced some, but limited disruptions to our supply chain during the PRC government mandated lockdown due to the COVID-19 pandemic. Additionally, our retail stores in Singapore had to close for two months from April 2020 to May 2020 during the Singapore government mandated “circuit breaker” (i.e., lockdown), due to the COVID-19 pandemic, which affected our business. While all our major suppliers are currently fully operational, any future disruption in their operations would impact our ability to produce and deliver our products to customers. Any future reductions in commercial airline and cargo flights, disruptions to ports and other shipping infrastructure resulting in increased transport times to deliver our products to customers, may limit our ability to fulfill orders and we may be unable to satisfy all of the demand for our products in a timely manner, which may adversely affect our relationships with our customers. As a result, any supply chain disruptions may materially affect our outlook or business goals.

Although we have long term and stable cooperation with our suppliers and will continue to work with our existing suppliers, we will continue to identify and secure new suppliers, to expand our supply base. We do not expect our mitigation efforts to introduce new material risks, including those related to product quality, reliability, or regulatory approval of products.

Failure to effectively manage inflationary pressures in our product procurement costs, wages, rental rates and freight charges could materially adversely affect our business, operating results and financial performance.

Our major costs include (i) product procurement; (ii) wages, (iii) rental rates, and (iv) freight charges. Our operating results can be materially affected by changes in our procurement costs, including product costs, rents at our retail stores, and transportation costs. Due to the uncertainty of product price fluctuations and inflation, we may not be able to pass some or all of these increased costs to our customers, which may result in lower profit margins. Even if we are able to pass on some of the increased freight charges to our customers in the case of customer ordered furniture, there is no assurance that we will always be successful in doing so. Accordingly, any rapid and significant changes in product prices or other supply chain costs may have a material adverse effect on our gross margins, operating results and financial performance.

Global economic conditions and the effect of economic pressures and other business factors on discretionary consumer spending and consumer preferences may have a material adverse effect on our business, results of operations and financial condition.

Uncertainties in global economic conditions that are beyond our control have in the past impacted our business and may in the future materially adversely affect our business, results of operations, financial condition and stock price. These adverse economic conditions include inflation, slower growth or recession, new or increased tariffs and other, changes to fiscal and monetary policy, higher interest rates, high unemployment, decreased consumer confidence in the economy, armed hostilities, such as the ongoing military conflict between Russia and Ukraine and the Israel-Hamas war, foreign currency exchange rate fluctuations, conditions affecting the retail environment for products we sell, and other matters that influence consumer spending and preferences.

In addition, consumer confidence and spending can be materially adversely affected in response to financial market volatility, negative financial news, conditions in the real estate and mortgage markets, including home equity loans and consumer credit, changes in net worth based on market changes and uncertainty, energy shortages and cost increases, labor and healthcare costs, government actions and general uncertainty regarding the overall future economic environment. Consumers may view a substantial portion of the products we offer as discretionary items rather than necessities. As a result, our operating results are sensitive to changes in macroeconomic conditions that impact consumer spending, including discretionary spending. Declines in consumer spending have and, in the future, may result in decreased demand for our products and services which may have an adverse effect on our results of operations.

A downturn in the economic environment can also lead to financial instability, increased credit and collectability risk on our receivables, the failure of important partners, including suppliers, logistics providers, derivative counterparties and other financial institutions, limitations on our ability to issue new debt, reduced liquidity and declines in the fair value of our financial instruments. These and other economic factors can materially adversely affect our business, results of operations, financial condition and stock price.

The ongoing COVID-19 pandemic, and any future outbreaks or other public health emergencies, could materially affect our business, liquidity, financial condition and operating results.

The COVID-19 pandemic has negatively impacted the global economy, disrupted consumer spending and global supply chains and created significant volatility and disruption of financial markets. The COVID-19 pandemic and the various responses to it globally have created significant volatility, uncertainty and economic disruption.

In particular, while we saw increased sales and order activity at times during the COVID-19 pandemic, the pandemic significantly disrupted the global supply chain, including many of our suppliers, logistics providers and other partners. Such disruptions, including staffing shortages, raw material and labor inflation, factory closures and production slowdowns, port closures a stoppages and/or disruptions in delivery systems, have and may continue to materially and adversely affect our suppliers’ ability to provide products in a timely manner, or at all, and have and may continue to materially and adversely affect our logistics providers’ ability to distribute products to our customers in a timely manner, or at all. The issues related to the global supply chain may continue into 2025.

Negative publicity relating to our Group or our Directors, Executive Officers or Major Shareholders or our major suppliers may materially and adversely affect our reputation and Share price.

Negative publicity or announcements relating to our Group or any of our Directors, Executive Officers or Major Shareholders, whether with or without merit, may materially and adversely affect the reputation and goodwill of our Group in the home furnishings industry, consequently affecting our relationships with our customers, suppliers and sub-contractors. Since we rely on a limited number of key suppliers for our leather and fabric upholstered furniture which contributed to a significant portion of our purchases of goods for the fiscal years ended December 31, 2024, 2023 and 2022, any negative publicity or announcements relating to our key suppliers may also adversely affect our reputation in the industry. In addition, such negative publicity may affect market perception of our Group and the performance of our Share price.

Negative publicity or announcements may include, among others, newspaper reports of accidents at our work sites, unsuccessful attempts in joint ventures, acquisitions or take-overs, any involvement we or our major suppliers may have in litigation or insolvency proceedings, and unfavorable or negative articles on any of our Directors, Executive Officers or Major Shareholders. Any claims and legal actions brought forward by our customers may also damage our brand image. If our customers, suppliers and sub-contractors subsequently lose confidence in us, this could result in the termination of business relationships or consumer orders. To this end, our business, financial condition, results of operations and prospects may be adversely impacted.

Risks Related to Doing Business in Singapore

Any adverse material changes to the Singapore market (whether localized or resulting from global economic or other conditions) such as the occurrence of an economic recession, pandemic or widespread outbreak of an infectious disease (such as COVID-19), could have a material adverse effect on our business, results of operations and financial condition.

During the years ended December 31, 2024, 2023 and 2022, substantially all of our revenue was derived from our operations in Singapore. Any adverse circumstances affecting the Singapore market, such as an economic recession, epidemic outbreak or natural disaster or other adverse incidents may adversely affect our business, financial condition, results of operations and prospects. Any downturn in the industry which we operate in resulting in the postponement, delay or cancellation of contracts and delay in recovery of account receivables is likely to have an adverse impact on our business and profitability.

Uncertain global economic conditions have had and may continue to have an adverse impact on our business in the form of lower net sales due to weakened demand, unfavorable changes in product price/mix, or lower profit margins. In addition, the effect of inflation often results in reduced consumer spending.

During economic downturns or recessions, there can be heightened competition for sales and increased pressure to reduce selling prices as our customers may reduce their demand for our products. If we lose significant sales volume or reduce selling prices significantly, then there could be a negative impact on our combined financial condition or results of operations, profitability and cash flows.

Reduced availability of credit may also adversely affect the ability of some of our customers and suppliers to obtain funds for operations and capital expenditures. This could negatively impact our ability to obtain necessary supplies. This could also result in reduced or delayed collections of outstanding accounts receivable.

The outbreak of COVID-19 contributed to a decrease in our sales revenue, from US$6.0 million in fiscal year ended December 31, 2022 to US$5.1 million in fiscal year ended December 31, 2023.

COVID-19 has impacted Singapore’s economy resulting in significant economic contraction and high unemployment rates during the years ended December 31, 2023 and 2022. Although this appears to have been reversed in the year ended December 31, 2024, we cannot be certain that there would not be a resurgence of such issues in the future. The general economic downturn may affect the ability of our counterparties to perform their obligations in a timely manner or at all. Singapore government measures to alleviate the economic impact of COVID-19 such as the imposition of relief from actions for inability to perform scheduled contracts, or relief for financially distressed individuals, firms and other businesses could adversely affect our ability to enforce and require our counterparties to perform their obligations under our contracts.

Our revenue and profitability may be materially impacted if COVID-19 (or any health epidemic or virus outbreak) affects or continues to affect the overall economic and market conditions in Singapore for a prolonged period of time. Such an economic slowdown and/or negative business sentiment could potentially have an adverse impact on our business and operations. We are uncertain as to when the Singapore market will be able to fully recover to pre-COVID-19 levels. If these disruptions are for a prolonged period of time, or if there are further outbreaks of infectious diseases, these may have a material adverse effect on our Group’s business, financial condition, results of operations, and prospects.

Many of the economies in Asia, including Singapore, are experiencing substantial inflationary pressures which may prompt the governments to take action to control the growth of the economy and inflation that could lead to a significant decrease in our profitability in the future.

While many of the economies in Asia have experienced rapid growth over the last two decades, they currently are experiencing inflationary pressures. As governments take steps to address the current inflationary pressures, there may be significant changes in the availability of bank credit, interest rate increases, limitations on loans, or restrictions on currency conversions and foreign investment. There also may be imposition of price controls. If prices for the products we source or if wages rise at a rate that is insufficient to compensate for the rise in these costs, it may have an adverse effect on our profitability. If these or other similar restrictions are imposed by a government to influence the economy, it may lead to a slowing of economic growth and lower discretionary spending by the consumers at large.

Our operating subsidiaries are subject to the laws of Singapore and the laws of other Asia Pacific countries that we do business in, which differ in certain material respects from the laws of the United States.

As our operating subsidiaries, namely, HomesToLife Singapore and HTL FE, are Singapore incorporated companies, they are required to comply with the laws of Singapore, certain of which are capable of extra-territorial application, as well as their charters. In particular, our operating subsidiaries are required to comply with certain provisions of the Securities and Futures Act 2001 of Singapore (the “SFA”), which prohibit certain forms of market conduct and information disclosures, and impose criminal and civil penalties on corporations, directors and officers in respect of any breach of such provisions.

Additionally, as HTL FE engages in the wholesale trade of upholstered furniture in various countries in the Asia Pacific region, it would be required to comply with the import and export laws of such countries.

Adverse change in government regulations may materially and adversely affect our operations and financial condition.

Our principal business operations are based in Singapore. Our operations are subject to laws and government regulations of Singapore. In addition, we are required to obtain and maintain several statutory and regulatory permits and approvals under central, state and local rules in Singapore, generally for carrying out our business. Some these approvals are granted for a limited duration and require renewal, and are generally subject to conditions stipulated in the licences and permits and/or relevant laws or regulations under which such licences and permits are issued. Failure to comply with such conditions could result in the revocation or non-renewal of the relevant licence or permit. As such, we have to constantly monitor and ensure our compliance with such conditions. Should there be any failure to comply with such conditions resulting in the revocation of any of the licences and permits, we will not be able to carry out our operations. In addition, any change in or introduction of new regulations that require our compliance may increase our cost of operations. All of these will have an adverse effect on our business and financial performance.

Currently we have obtained all licenses necessary for carrying on its businesses in the current scope. Should there be any changes in the regulatory requirements and we are not able to comply with them in a timely manner or if compliance of these requirements involved substantial costs, the business, results of operation and our financial position may be adversely affected.

The ability of our subsidiaries in Singapore to distribute dividends to us may be subject to restrictions under applicable laws.

We are a holding company, and our operating subsidiaries are located in Singapore. Part of our primary internal sources of funds to meet our cash needs is our share of the dividends, if any, paid by our operating subsidiaries. The distribution of dividends to us from our subsidiaries is subject to restrictions imposed by the applicable laws and regulations in these markets, which are more fully described in the section titled “Dividend Policy” in this annual report. In addition, although there are currently no foreign exchange control regulations which restrict the ability of our operating subsidiaries in Singapore to distribute dividends to us, the relevant regulations may be changed and the ability of our subsidiaries to distribute dividends to us may be restricted in the future.

It may be difficult for you to enforce any judgment obtained in the United States against us, our Directors, Executive Officers or our affiliates.

We are a company incorporated under the laws of the Cayman Islands. We conduct our operations outside the United States and, except for certain of our investments, substantially all of our assets are located outside the United States. In addition, certain of our Directors and Executive Officers reside outside the United States. As a result, it may be difficult to enforce in the United States any judgment obtained in the United States against us or any of these persons, including judgments based upon the civil liability provisions of the U.S. securities laws. In addition, in original actions brought in courts in jurisdictions located outside the United States, it may be difficult for investors to enforce liabilities based upon U.S. securities laws.

Even if you are successful in bringing an action of this kind, the laws of the Cayman Islands, Singapore or other relevant jurisdiction may render you unable to enforce a judgment against our assets or the assets of our directors and officers.

Accordingly, there can be no assurance that the Singapore courts would enforce against us, our Directors or our Executive Officers, judgments obtained in the United States which are predicated upon the civil liability provisions of the federal securities laws of the United States.

It is not certain if the Company will be classified as a Singapore tax resident.

Under the Singapore Income Tax Act 1947 (the “Singapore Income Tax Act”), a company established outside Singapore but whose governing body, being the board of directors, usually exercises de facto control and management of its business in Singapore could be considered a tax resident in Singapore. However, such control and management of the business should not be deemed to be in Singapore if physical board meetings are conducted outside of Singapore. Where board resolutions are passed in the form of written consent signed by the directors each acting in their own jurisdictions, or where the board meetings are held by teleconference or videoconference, it is possible that the place of de facto control and management will be considered to be where the majority of the board are located when they sign such consent or attend such conferences.

We believe that the Company, which is a Cayman Islands exempted company, is not a Singapore tax resident for Singapore income tax purposes. However, the tax residence status of the Company is subject to determination by the Inland Revenue Authority of Singapore (“IRAS”), and uncertainties remain with respect to the interpretation of the term “control and management” for the purposes of the Singapore Income Tax Act. If IRAS determines that the Company is a Singapore tax resident for Singapore income tax purposes, the portion of the Company’s single company income on an uncombined basis that is received or deemed by the Singapore Income Tax Act to be received in Singapore, where applicable, may be subject to Singapore income tax at the prevailing tax rate of 17% before applicable income tax exemptions or relief. If the Company is regarded as a Singapore tax resident, any dividends received or deemed received by the Company in Singapore from our subsidiaries located in a foreign jurisdiction with a rate of income tax or tax of a similar nature of no more than 15% may generally be subject to additional Singapore income tax where there is no other applicable tax treaty between such foreign jurisdiction and Singapore. Income is considered to have been received in Singapore when it is: (i) remitted to, transmitted or brought into Singapore; (ii) applied in or towards satisfaction of any debt incurred in respect of a trade or business carried on in Singapore; or (iii) applied to purchase any movable property that is brought into Singapore. In addition, as Singapore does not impose withholding tax on dividends declared by Singapore resident companies, if the Company is considered a Singapore tax resident, dividends paid to the holders of our Shares will not be subject to withholding tax in Singapore. Regardless of whether or not the Company is regarded as a Singapore tax resident, holders of our Shares who are not Singapore tax residents would generally not be subject to Singapore income tax on gains derived from the disposal of our Shares if such shareholders do not maintain a permanent establishment in Singapore, to which the disposition gains may be effectively connected, and the entire process (including the negotiation, deliberation, execution of the acquisition and sale, etc.) leading up to the actual acquisition and sale of our Shares is performed outside of Singapore. For Singapore resident shareholders, if the gain from disposal of our Shares is considered by IRAS as income in nature, such gain will generally be subject to Singapore income tax, and not taxable in Singapore if the gain is considered by IRAS as capital gains in nature. Please refer to the section titled “Material Income Tax Considerations—Singapore Tax Considerations” in this annual report.

Risks Related to Our Corporate Structure and Our Securities

We incur significant expenses and devote other significant resources and management time as a result of being a public company, which may negatively impact our financial performance and could cause our results of operations and financial condition to suffer.

We incur significant legal, accounting, insurance and other expenses as a result of being a public company. Laws, regulations and standards relating to corporate governance and public disclosure for public companies, including the Dodd-Frank Act of 2010, the Sarbanes-Oxley Act, regulations related thereto and the rules and regulations of the SEC and Nasdaq, significantly increase our costs as well as the time that must be devoted to compliance matters. Compliance with these laws, rules, regulations and standards has substantially increased our expenses, including our legal and accounting costs, and make some of our operating activities more time-consuming and costly. Our public company obligations also require attention from our senior management and could divert their attention away from the day-to-day management of our business. These laws, rules, regulations and standards to make it more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. As a result, it may be more difficult for us to attract and retain qualified persons to serve on our Board of Directors or as officers. As a result of the foregoing, we have experienced a substantial increase in legal, accounting, insurance and certain other expenses, which will negatively impact our financial performance and could cause our results of operations and financial condition to suffer. Furthermore, if we are unable to satisfy our obligations as a public company, we could be subject to delisting of our Shares, fines, sanctions and other regulatory actions and potential civil litigation.

If we fail to implement and maintain an effective system of internal controls, we may be unable to accurately report our results of operations, meet our reporting obligations or prevent fraud, and investor confidence and the market price of our shares may be materially and adversely affected.

Our independent registered public accounting firm has not conducted an audit of our internal control over financial reporting. Section 404 of the Sarbanes-Oxley Act of 2002 requires that we include a report of management on our internal control over financial reporting in our annual report on Form 20-F beginning with our second annual report on Form 20-F after we have already become a publicly held company. In addition, once we cease to be an “emerging growth company” as such term is defined under the JOBS Act, our independent registered public accounting firm must attest to and report on the effectiveness of our internal control over financial reporting. Our management may conclude that our internal control over financial reporting is not effective. Moreover, even if our management concludes that our internal control over financial reporting is effective, our independent registered public accounting firm, after conducting its own independent testing, may issue a report that is qualified if it is not satisfied with our internal controls or the level at which our controls are documented, designed, operated or reviewed, or if it interprets the relevant requirements differently from us. In addition, when required, our new reporting obligations will likely place a significant strain on our management, operational and financial resources and systems for the foreseeable future. We may be unable to timely complete our evaluation testing and any required remediation.

During the course of documenting and testing our internal control procedures, in order to satisfy the requirements of Section 404 of the Sarbanes- Oxley Act of 2002, we may identify weaknesses and deficiencies in our internal control over financial reporting. In addition, if we fail to maintain the adequacy of our internal control over financial reporting, as these standards are modified, supplemented or amended from time to time, we may not be able to conclude on an ongoing basis that we have effective internal control over financial reporting. If we fail to achieve and maintain an effective internal control environment when required, we could suffer material misstatements in our financial statements and fail to meet our new reporting obligations, which would likely cause investors to lose confidence in our reported financial information. This could in turn limit our access to capital markets, harm our results of operations and lead to a decline in the trading price of our shares. Additionally, ineffective internal control over financial reporting could expose us to increased risk of fraud or misuse of corporate assets and subject us to potential delisting from the stock exchange on which we list, regulatory investigations and civil or criminal sanctions. We may also be required to restate our financial statements from prior periods.

We do not expect to be subject to certain Nasdaq corporate governance rules applicable to U.S. listed companies.

As a foreign private issuer, we are entitled to rely on a provision in Nasdaq’s corporate governance rules that allows us to follow Cayman Islands corporate law with regards to certain aspects of corporate governance. This allows us to follow certain corporate governance practices that differ in significant respects from the corporate governance requirements applicable to U.S. companies listed on Nasdaq.

In addition, our Audit Committee is not subject to additional Nasdaq requirements applicable to listed U.S. companies, including an affirmative determination that all members of the Audit Committee are “independent,” using more stringent criteria than those applicable to the Company under relevant SEC rules. Nasdaq’s corporate governance rules require listed U.S. companies to, among other things, seek shareholder approval for the implementation of certain equity compensation plans and issuances of shares, which the Company is not required to follow as a foreign private issuer.

We are a “controlled company” within the meaning of the Nasdaq Listing Rules and, as a result, may rely on exemptions from certain corporate governance requirements that provide protection to shareholders of other companies.

We are a “controlled company” as defined under the Nasdaq Listing Rules because our founders and Chairman/Vice Chairman, Messrs. Phua Yong Pin and Phua Yong Tat, beneficially own approximately 68.2% of our issued and outstanding Shares and are able to exercise approximately 68.2% of the total voting power of our issued and outstanding Shares. For so long as we remain a controlled company under that definition, we are permitted to elect to rely on, and may rely on, certain exemptions from corporate governance rules, including an exemption from the rule that a majority of our board of directors must be independent directors. At this time, we do not intend to rely on these exemptions to corporate governance requirements as a controlled company. However, we may elect to do so in the future. As a result, you may not have the same protection afforded to shareholders of companies that are subject to these corporate governance requirements.

We are subject to changing laws, rules and regulations in the U.S. regarding regulatory matters, corporate governance and public disclosure that will increase both our costs and the risks associated with non-compliance.

We are subject to rules and regulations by various governing bodies and self-regulatory organizations, including, for example, the SEC and The Nasdaq Stock Market, which are charged with the protection of investors and the oversight of companies whose securities are publicly traded, and to new and evolving regulatory measures under applicable law. Our efforts to comply with new and changing laws and regulations have resulted in and are likely to continue to result in increased general and administrative expenses and a diversion of management time and attention from revenue-generating activities to compliance activities.

Moreover, because these laws, regulations and standards are subject to varying interpretations, their application in practice may evolve over time as new guidance becomes available. This evolution may result in continuing uncertainty regarding compliance matters and additional costs necessitated by ongoing revisions to our disclosure and governance practices. If we fail to address and comply with these regulations and any subsequent changes, we may be subject to penalty and our business may be harmed.

An active trading market for our Shares or our Shares may not continue and the trading price for our Shares may fluctuate significantly.

We cannot assure you that a liquid public market for our Shares will continue. The public offering price for our securities in our initial public offering, or IPO, was determined by negotiation between us and the underwriters based upon several factors, and we can provide no assurance that the trading price of our Shares will not decline below the public offering price. As a result, investors in our securities may experience a significant decrease in the value of their Shares.

The market price of our Shares may be volatile or may decline regardless of our operating performance, and you may not be able to resell your shares at or above the public offering price.

The public offering price for our Shares was determined through negotiations between the underwriters and us and may vary from the current market price of our Shares. If you purchased our Shares in our public offering, you may not be able to resell those shares at or above the public offering price. The market price of our Shares may fluctuate significantly in response to numerous factors, many of which are beyond our control, including:

In addition, the stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. Stock prices of many companies have fluctuated in a manner unrelated or disproportionate to the operating performance of those companies. As a relatively small-capitalization company with relatively small public float, we may experience greater stock price volatility, extreme price run-ups, lower trading volume and less liquidity than large-capitalization companies. In particular, our Shares may be subject to rapid and substantial price volatility, low volumes of trades and large spreads in bid and ask prices. Such volatility, including any stock-run up, may be unrelated to our actual or expected operating performance and financial condition or prospects, making it difficult for prospective investors to assess the rapidly changing value of our Shares.

In addition, if the trading volumes of our Shares are low, persons buying or selling in relatively small quantities may easily influence prices of the Shares. This low volume of trades could also cause the price of the Shares to fluctuate greatly, with large percentage changes in price occurring in any trading day session. Holders of the Shares may also not be able to readily liquidate their investment or may be forced to sell at depressed prices due to low volume trading. Broad market fluctuations and general economic and political conditions may also adversely affect the market price of the Shares. As a result of this volatility, investors may experience losses on their investment in the Shares. A decline in the market price of the Shares also could adversely affect our ability to sell additional Shares or other securities and our ability to obtain additional financing in the future. No assurance can be given that an active market in the Shares will develop or be sustained. If an active market does not develop, holders of the Shares may be unable to readily sell the Shares they hold or may not be able to sell their Shares at all.

In the past, shareholders have filed securities class action litigation following periods of market volatility. If we were to become involved in securities litigation, it could subject us to substantial costs, divert resources and the attention of management from our business, and adversely affect our business.

The sale or availability for sale of substantial amounts of our Shares could adversely affect their market price.

Sales of substantial amounts of our Shares in the public market, or the perception that these sales could occur, could adversely affect the market price of our Shares and could materially impair our ability to raise capital through equity offerings in the future. As of the date of this annual report, we had 14,687,500 Shares outstanding. We cannot predict what effect, if any, market sales of securities held by our significant shareholders or any other shareholder or the availability of these securities for future sale will have on the market price of our Shares.

Techniques employed by short sellers may drive down the market price of the Shares.

Short selling is the practice of selling securities that the seller does not own but rather has borrowed from a third party with the intention of buying identical securities back at a later date to return to the lender. The short seller hopes to profit from a decline in the value of the securities between the sale of the borrowed securities and the purchase of the replacement shares, as the short seller expects to pay less in that purchase than it received in the sale. As it is in the short seller’s interest for the price of the security to decline, many short sellers publish, or arrange for the publication of, negative opinions and allegations regarding the relevant issuer and its business prospects in order to create negative market momentum and generate profits for themselves after selling a security short. These short attacks have, in the past, led to selling of shares in the market. If we were to become the subject of any unfavorable allegations, whether such allegations are proven to be true or untrue, we could have to expend a significant amount of resources to investigate such allegations and/or defend ourselves. While we would strongly defend against any such short seller attacks, we may be constrained in the manner in which we can proceed against the relevant short seller by principles of freedom of speech, applicable state law or issues of commercial confidentiality.

Securities analysts may not publish favorable research or reports about our business or may publish no information at all, which could cause our stock price or trading volume to decline.

The trading market for our securities are influenced to some extent by the research and reports that industry or financial analysts publish about us and our business. We do not control these analysts. As a newly listed company, we may be slow to attract research coverage and the analysts who publish information about our securities will have had relatively little experience with us, which could affect their ability to accurately forecast our results and could make it more likely that we fail to meet their estimates. In the event we obtain securities or industry analyst coverage, if any of the analysts who cover us provide inaccurate or unfavorable research or issue an adverse opinion regarding our stock price, our stock price could decline. If one or more of these analysts cease coverage of us or fail to publish reports covering us regularly, we could lose visibility in the market, which in turn could cause our stock price or trading volume to decline and result in the loss of all or a part of your investment in us.

Because we do not expect to pay dividends in the foreseeable future, you must rely on price appreciation of our Shares for return on your investment.

We currently intend to retain all of our available funds and any future earnings to fund the development and growth of our business. As a result, we do not expect to pay any cash dividends in the foreseeable future. Therefore, you should not rely on an investment in our Shares as a source for any future dividend income.

Our board of directors has complete discretion as to whether to distribute dividends. Even if our board of directors decides to declare and pay dividends, the timing, amount and form of future dividends, if any, will depend on, among other things, our future results of operations and cash flow, our capital requirements and surplus, the amount of distributions, if any, received by us from our subsidiaries, our financial condition, contractual restrictions and other factors deemed relevant by our board of directors. Accordingly, the return on your investment in our Shares will likely depend entirely upon any future price appreciation of our Shares. There is no guarantee that our Shares will appreciate in value in the future or even maintain the price at which you purchased our Shares. You may not realize a return on your investment in our Shares and you may even lose your entire investment.

As a company incorporated in the Cayman Islands, we may adopt certain home country practices in relation to corporate governance matters that differ significantly from corporate governance requirements of Nasdaq. These practices may afford less protection to shareholders than they would enjoy if we complied fully with corporate governance requirements of Nasdaq.

As a company incorporated under the laws of the Cayman Islands that is listed on Nasdaq, we are subject to Nasdaq corporate governance listing standards. However, Nasdaq rules permit a foreign private issuer like us to follow the corporate governance practices of its home country. Certain corporate governance practices in the Cayman Islands which is our home country, may differ significantly from corporate governance requirements of Nasdaq, including, but not limited to, board of directors independent requirements, director nomination procedures, compensation committee matters. We may follow our home country law instead of the Nasdaq Listing Rules that require us to obtain shareholder approval for certain dilutive events, such as certain transactions other than a public offering involving issuances of a 20% or greater interest in the Company, and acquisitions of the stock or assets of another Company. As a result, our shareholders may be afforded less protection than they otherwise would enjoy under the corporate governance requirements of Nasdaq applicable to U.S. domestic issuers.

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 Cayman Islands law.

We are an exempted company incorporated under the laws of the Cayman Islands. Our corporate affairs are governed by our amended and restated memorandum and articles of association (“Memorandum and Articles of Association”), the Companies Act (As Revised) of the Cayman Islands and the common law of the Cayman Islands. The rights of shareholders to take action against the directors, actions by minority shareholders and the fiduciary duties of our directors to us under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands. The common law of the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman 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 Cayman Islands. The rights of our shareholders and the fiduciary duties of our directors under Cayman Islands law are not as clearly established as they would be under statutes or judicial precedent in some jurisdictions in the United States and some states (such as Delaware) have more fully developed and judicially interpreted bodies of corporate law than the Cayman Islands. In addition, Cayman Islands companies may not have standing to initiate a shareholder derivative action in a federal court of the United States.

Shareholders of Cayman Islands exempted companies like us have no general rights under Cayman Islands law to inspect corporate records (other than the Memorandum and Articles of Association and any special resolutions passed by such companies, and the register of mortgages and charges of such companies) or to obtain copies of lists of shareholders of these companies. Our directors have discretion under our Memorandum and Articles of Association to determine whether or not, and under what conditions, our corporate records may be inspected by our share-holders, but are not obliged to make them available to our shareholders. This may make it more difficult for you to obtain the information needed to establish any facts necessary for a shareholder motion or to solicit proxies from other shareholders in connection with a proxy contest.

As a result of all of the above, our shareholders may have more difficulty in protecting their interests in the face of actions taken by our management, members of our board of directors or controlling shareholders than they would as public shareholders of a company incorporated in the United States.

We are a foreign private issuer and, as a result, will not be subject to U.S. proxy rules and will be subject to more lenient and less frequent Exchange Act reporting obligations than a U.S. issuer.

Because we qualify as a foreign private issuer under the Exchange Act, we are exempted from certain provisions of the Exchange Act that are applicable to U.S. public companies, including:

In addition, foreign private issuers are not required to file their annual report on Form 20-F until 120 days after the end of each fiscal year, while U.S. domestic issuers that are not large accelerated filers or accelerated filers are required to file their annual report on Form 10-K within 90 days after the end of each fiscal year. Foreign private issuers are also exempt from Regulation FD, aimed at preventing issuers from making selective disclosures of material information. As a result, you may not have the same protections afforded to shareholders of companies that are not foreign private issuers. In addition, our officers, directors and principal shareholders are exempt from the reporting and “short-swing” profit recovery provisions of Section 16 of the Exchange Act and the rules thereunder. Therefore, our shareholders may not know on a timely basis when our officers, directors and principal shareholders purchase or sell our Shares.

There can be no assurance that we will not be a passive foreign investment company, or PFIC, for U.S. federal income tax purposes for any taxable year, which could subject U.S. investors in our Shares to significant adverse U.S. income tax consequences.

In general, we will be treated as a passive foreign investment company (“PFIC”) for any taxable year in which either (1) at least 75% of our gross income (looking through certain 25% or more-owned subsidiaries) is passive income or (2) at least 50% of the average value of our assets (looking through certain 25% or more-owned subsidiaries) is attributable to assets that produce, or are held for the production of, passive income. Passive income generally includes, without limitation, dividends, interest, rents, royalties, and gains from the disposition of passive assets. If we are determined to be a PFIC for any taxable year (or portion thereof) that is included in the holding period of a U.S. Holder (as defined in the Section of this annual report captioned “Certain United States Federal Income Tax Considerations”) of our securities, the U.S. Holder may be subject to increased U.S. federal income tax liability and may be subject to additional reporting requirements. The determination of whether we are a PFIC is a fact-intensive determination made on an annual basis applying principles and methodologies that in some circumstances are unclear and subject to varying interpretation. Our actual PFIC status for any taxable year will not be determinable until after the end of such taxable year. Accordingly, there can be no assurance with respect to our status as a PFIC for our current taxable year or any subsequent taxable year. We urge U.S. Holders to consult their own tax advisors regarding the possible application of the PFIC rules in light of their individual circumstances.

For as long as we are an emerging growth company, we will not be required to comply with certain reporting requirements, including those relating to accounting standards and disclosure about our executive compensation, that apply to other public companies.

In April 2012, President Obama signed into law the JOBS Act. We are classified as an “emerging growth Company” under the JOBS Act. For as long as we are an emerging growth Company, which may be up to five full fiscal years, unlike other public companies, we will not be required to, among other things, (i) provide an auditor’s attestation report on management’s assessment of the effectiveness of our system of internal control over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act, (ii) comply with any new requirements adopted by the PCAOB requiring mandatory audit firm rotation or a supplement to the auditor’s report in which the auditor would be required to provide additional information about the audit and the financial statements of the issuer, (iii) provide certain disclosure regarding executive compensation required of larger public companies or (iv) hold nonbinding advisory votes on executive compensation. We will remain an emerging growth Company for up to five years, although we will lose that status sooner if we have more than $1.235 billion of revenues in a fiscal year, have more than $700 million in market value of our Shares held by non-affiliates, or issue more than $1.0 billion of non-convertible debt over a three-year period.

To the extent that we rely on any of the exemptions available to emerging growth companies, you will receive less information about our executive compensation and internal control over financial reporting than issuers that are not emerging growth companies. If some investors find our Shares to be less attractive as a result, there may be a less active trading market for our Shares and our share price may be more volatile.

We may lose our foreign private issuer status in the future, which could result in significant additional costs and expenses.

As discussed above, we are a foreign private issuer, and therefore, we are not required to comply with all of the periodic disclosure and current reporting requirements of the Exchange Act. The determination of foreign private issuer status is made annually on the last business day of an issuer’s most recently completed second fiscal quarter. In the future, we would lose our foreign private issuer status if (1) more than 50% of our outstanding voting securities are owned by U.S. residents and (2) a majority of our directors or executive officers are U.S. citizens or residents, or we fail to meet additional requirements necessary to avoid loss of foreign private issuer status. If we lose our foreign private issuer status, we will be required to file with the SEC periodic reports and registration statements on U.S. domestic issuer forms, which are more detailed and extensive than the forms available to a foreign private issuer. We will also have to mandatorily comply with U.S. federal proxy requirements, and our officers, directors and principal shareholders will become subject to the short-swing profit disclosure and recovery provisions of Section 16 of the Exchange Act. In addition, we will lose our ability to rely upon exemptions from certain corporate governance requirements under the Nasdaq Listing Rules.

Our Major Shareholders have substantial influence over our company. Their interests may not be aligned with the interests of our other shareholders, and they could prevent or cause a change of control or other transactions.

As of the date of this annual report, our founders and Chairman/Vice Chairman, Messrs. Phua Yong Pin and Phua Yong Tat, beneficially own approximately 68.2% of our issued and outstanding Shares and are able to exercise approximately 68.2% of the total voting power of our issued and outstanding Shares.

Accordingly, Major Shareholders could have significant influence in determining the outcome of any corporate transaction or other matter submitted to the shareholders for approval, including mergers, consolidations, the election of directors and other significant corporate actions. Without the consent of our Major Shareholders, we may be prevented from entering into transactions that could be beneficial to us or our minority shareholders. In addition, our directors and officers could violate their fiduciary duties by diverting business opportunities from us to themselves or others. The interests of our Major Shareholders may differ from the interests of our other shareholders. The concentration in the ownership of our Shares may cause a material decline in the value of our Shares. For more information regarding our principal shareholder, see “Principal Shareholders.”

Judgments obtained against us by our shareholders may not be enforceable.

We are an exempted company incorporated under the laws of the Cayman Islands. We conduct our operations outside the United States and substantially all of our assets are located outside the United States. In addition, substantially all of our directors and executive officers and the experts named in this annual report reside outside the United States, and most of their assets are located outside the United States. As a result, it may be difficult or impossible for you to bring an action against us or against them in the United States in the event that you believe that your rights have been infringed under the U.S. federal securities laws or otherwise. Even if you are successful in bringing an action of this kind, the laws of the Cayman Islands, or other relevant jurisdictions may render you unable to enforce a judgment against our assets or the assets of our directors and officers.

Ogier, our counsel as to the laws of the Cayman Islands, has advised us that there is uncertainty as to whether the courts of the Cayman Islands would (i) recognize or enforce judgments of U.S. courts obtained against us or our directors or officers predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States, or (ii) entertain original actions brought in the Cayman Islands against us or our directors or officers predicated upon the securities laws of the United States or any state in the United States.

We are subject to changing law and regulations regarding regulatory matters, corporate governance and public disclosure that have increased both our costs and the risk of non-compliance.

We are subject to rules and regulations by various governing bodies, including, for example, the Securities and Exchange Commission, which are charged with the protection of investors and the oversight of companies whose securities are publicly traded, and to new and evolving regulatory measures under applicable law. Our efforts to comply with new and changing laws and regulations have resulted in and are likely to continue to result in, increased general and administrative expenses and a diversion of management time and attention from revenue generating activities to compliance activities.

Moreover, because these laws, regulations and standards are subject to varying interpretations, their application in practice may evolve over time as new guidance becomes available. This evolution may result in continuing uncertainty regarding compliance matters and additional costs necessitated by ongoing revisions to our disclosure and governance practices. If we fail to address and comply with these regulations and any subsequent changes, we may be subject to penalty and our business may be harmed.

We cannot assure you that we will be able to meet the continued listing standards of Nasdaq in the future.

We cannot assure you that we will be able to meet the continued listing standards of Nasdaq in the future. If we fail to comply with the applicable listing standards and Nasdaq delists our Shares, we and our Shareholders could face significant material adverse consequences, including:

The National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as “covered securities.” Because we expect that our Shares will be listed on Nasdaq, such securities will be covered securities. Although the states are preempted from regulating the sale of our securities, the federal statute does allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular case. Further, if we were no longer listed on Nasdaq, our securities would not be covered securities and we would be subject to regulations in each state in which we offer our securities.

Item 4. INFORMATION ON THE COMPANY

A. History and Development of the Company

Our Company was incorporated in the Cayman Islands on February 16, 2024 under the Companies Act as an exempted company with limited liability. Our authorized share capital is currently US$10,000 divided into 100,000,000 Shares, par value US$0.0001 each.

Our principal operating subsidiary, HomesToLife Singapore, was initially incorporated in September 1989 under the name, “Hwa Tat Lee Leather Pte Ltd” in Singapore by three brothers, Messrs. Phua Yong Pin, Phua Yong Sin and Phua Yong Tat (altogether known as, the “Phua Brothers”), as part of the then HTL Group of companies founded by the Phua Brothers. It was initially engaged in the leather trading business. In 1999, it changed its name to “HTL Leather Pte Ltd.” In 2009, it changed its name to “Trends Furniture Pte. Ltd.” In 2014, it shifted to the furniture retail business. In 2019, it changed its name to “HomesToLife Pte. Ltd.”

In May 2014, HomesToLife Singapore started operating as the retail arm of HTL International Holdings Pte. Ltd., a Singapore incorporated holding company with subsidiaries operating in the leather and fabric manufacturing and production of leather and fabric upholstered furniture business in different parts of China. Until September 2016, the Phua Brothers held at least a majority equity interest in HTL International Holdings Pte. Ltd. In August 2018, HomesToLife Singapore was sold as a stand-alone entity to a third party, Champion Retailing Pte. Ltd., a Singapore incorporated company, and from May 2022, the beneficial ownership of HomesToLife Singapore returned to Messrs. Phua Yong Pin and Phua Yong Tat. Prior to the reorganization described below, HomesToLife Singapore was a wholly-owned subsidiary of New Century International Homes Pte. Ltd., a Singapore incorporated company, which was in turn an indirect wholly-owned subsidiary of Golden Hill Investments.

In preparation for our Company’s IPO, our Group completed a reorganization (the “Reorganization”) from February to April 2024, which involved the following steps:

After the Reorganization, HomesToLife Cayman directly owns HomesToLife International, which is the direct holding company of 100% shares of HomesToLife Singapore. Golden Hill BVI, Summer Capital Pte. Ltd. and the Pre-IPO Investors collectively own all issued and outstanding Shares of HomesToLife Cayman.

Subsequently, our Shares were priced on September 30, 2024, and began trading on the Nasdaq Capital Market under the ticker “HTLM” on October 1, 2024. Our IPO closed on October 2, 2024.

On October 28, 2024, we incorporated HTL FE as a second operating company under HomesToLife International Pte. Ltd.. HTL FE engages in the wholesale trading of upholstered furniture within the Asia-Pacific region.

Corporate Structure

As at the date of this annual report, our Group comprised of the Company and its subsidiaries, HomesToLife International, HomesToLife Singapore, and HTL FE.

The chart below illustrates our corporate structures and identifies our subsidiaries as of the date of this annual report:

B. Business Overview

Overview

HomesToLife Singapore is one of the leading home furniture retailers that offers and sells customized furniture solutions in Singapore. As of the date of this annual report, it has six retail store locations, and among furniture companies that sell furniture manufactured from China and other Asian countries, HomesToLife Singapore is the second largest in Singapore by the number of retail store locations. It has helped homeowners create living spaces that reflect their individuality since 2014. Its product offerings include leather and fabric upholstered furniture, case goods and accessories, and offers a one-stop shop for retail customers to furnish their homes. HomesToLife Singapore offers and sells selected HTL Group’s products and brands of luxury contemporary furniture in Singapore, as well as products supplied by trusted third party suppliers. Previously pursuant to a 20-year exclusive Products Supply Agreement it has with HTL Marketing, a HTL Group company owned and controlled by our controlling shareholders and Chairman/Vice Chairman, Messrs. Phua Yong Pin and Phua Yong Tat, and now pursuant to a Contract Manufacturing Agreement with HTL Furniture and a supply agreement between HomesToLife Singapore and HTL FE, HomesToLife Singapore has secured a long-term and reliable supply of leather and fabric upholstered furniture from partners within the HTL Group in different parts of China, and is able to offer its customers a wide selection of design, leather and fabric materials, configuration and function of sofas. For the fiscal year ended December 31, 2024, sales of leather and fabric upholstered furniture and case goods and accessories amounted to US$3.6 million and US$0.6 million, representing approximately 87.3% and 12.7%, respectively, of HomesToLife Singapore’s total sales revenue.

To target the premium mass market by providing customers high-quality luxury products with affordable, reliable and customizable options, HomesToLife Singapore also reserves and dedicates an exclusive space in certain HomesToLife Singapore retail stores in Singapore for the marketing and selling of furniture under HTL’s “Domicil” brand and “Fabbrica” brand, two European furniture brands offering premium and luxury products that are designed by designers from around the world and targeted at the middle and upper class consumer markets.

Apart from HomesToLife Singapore, HTL FE was incorporated on October 28, 2024, shortly after our IPO, which engages in the wholesale trade of upholstered furniture in other markets in Asia-Pacific region.

“HomesToLife” has a long-standing pledge to offer fair prices, great value, consistent and reliable quality, and on-time delivery to its customers. It maintains a website: www.homestolife.com offering consumers a seamless shopping experience online and post-sales customer service support. HomesToLife Cayman plans to use a significant portion of the proceeds in the IPO to fund the expansion of its business and opening of new store locations in other parts of Asia including, Taiwan, Korea, Indonesia and Malaysia. Its mission is to become a leading home furniture retailer in all of Asia.

Competitive Strength

We believe the following key competitive strengths are crucial to our success and future growth.

Multi-year supplier agreements with established leather and fabric upholstered furniture manufacturers

HomesToLife Singapore has entered into a 20-year exclusive Products Supply Agreement and Exclusive Brand Distributor Agreement with HTL Marketing, a HTL Group company. Since January 1, 2025, HomesToLife Singapore has transitioned its supply source from HTL Marketing to HTL Furniture, another HTL Group company, through HTL FE. HTL FE signed a Contract Manufacturing Agreement with HTL Furniture on November 1, 2024 and HomesToLife Singapore entered into a supply agreement with HTL FE on January 1, 2025, with substantially the same terms as the supply agreement that was originally entered into between HomesToLife Singapore and HTL Marketing. Accordingly, we have switched our supplier from HTL Marketing to HTL Furniture although we have not terminated the agreements with HTL Marketing.

HomesToLife Singapore is Domicil’s and Fabbrica’s exclusive distributor in Singapore. Because of (1) our relationship with HTL Furniture as our major supplier and HTL Marketing, which owns the Domicil and Fabbrica trademarks, (2) the rich resources such as manufacturers that HTL Group has, and (3) stable supply of products with reasonable prices based on the group-level negotiation, we are able to secure good-quality products and deliver the customized products within 8-12 weeks after our customers place an order. We believe this is faster than many of our competitors.

Established brand

HomesToLife Singapore has been engaged in the furniture retail business in Singapore since 2014. Between January 2016 and December 2019, we established five store locations. In 2023, we added two stores, one of which was closed in 2024. Our retail stores are strategically located in areas with good market potential or customer demands, taking into account population density, average income level of residents and their discretionary spending, and the presence of related trade mix in proximity.

Over the past ten years, HomesToLife Singapore has established its brand and reputation as a premium furniture retailer that offers and sells products that deliver exceptional value. Its products are designed by leading industry designers, hand crafted by dedicated and experienced craftsman using a wide selection of quality and durable materials.

Deep knowledge in local market

HomesToLife Singapore’s management has decades of experience in the global upholstered furniture industry. Its deep knowledge in the local consumer market allows HomesToLife Singapore to anticipate market trends and changing consumer tastes, and offer the premium customization options and product offerings in Singapore.

Unique position to offer a one-stop shop for retail customers

In addition to a broad range of upholstered product offering, HomesToLife Singapore also offers and sells case goods and accessories, and a carefully curated range of home furniture that are sourced internationally and handpicked by HomesToLife Singapore, giving its customers a one-stop shop with all furnishings they need to furnish their homes and express their individuality through their choice furniture. Because of our management’s decades long track record in the upholstered furniture industry and ownership in the HTL Group which has multiple luxury brands of furniture, HomesToLife Singapore is in a unique position to offer a one-stop shop for its retail customers.

Additionally, HomesToLife Singapore positions itself as a luxury furniture retailer, and our sales staff provided significant value-added services at no additional cost to our customers, in order to promote better conversion rates. For example, our sales staff at each of our retail stores are hired for and trained to provide interior design consultancy services for our potential customers. Thus, a customer could provide our sales staff with a general description of the type of furniture are looking for, and our sales staff would be able to recommend furniture based on each such customer’s needs.

Industry veterans holding leadership positions

Our management team has extensive knowledge and experience in the global upholstered furniture industry. Both Mr. Phua Yong Pin, our Chairman, and Mr. Phua Yong Tat, our vice Chairman have over 40 years of experience in the furniture industry. Messrs. Phua Yong Tat and Phua Yong Pin are primarily responsible for the overall management, formulation of business strategies and day-to-day management of our operations. We benefit from the extensive experience of our management team in the industry, which has enabled us to understand the market trends and develop strong business relationship with our customers and suppliers. We believe that the commitment of our management team has been one of the key factors to our success and a competitive edge in our planned expansion in other parts of Asia.

Expansion into other Asia-Pacific markets

Apart from our focus on the Singapore retail market through HomesToLife Singapore, leveraging on our deep expertise in the upholstered furniture industry, we have also identified opportunities in the wholesale trade of upholstered furniture market in various countries within the Asia-Pacific region, including but not limited to Japan, Korea, and Indonesia, and we have expanded into such markets through HTL FE.

Business Strategies

Reinforcing our brand’s core identity

Whilst the “HomesToLife” brand has been around for many years, we are in the process of reinforcing our brand’s core identity as one that is trusted and with high integrity, promising and delivering high quality goods and products, whilst also being a modern, fun, and “cool” brand. To this end, we do not view the “HomesToLife” brand as a mere furniture retailer and furniture brand. Rather, we aim to provide our customers with a way to express themselves through their homes, and more specifically, the furniture in their homes. We target the customers who may be purchasing their second or third home and prefer furniture of premium quality at affordable prices.

Strengthen our brand recognition by marketing campaigns

We will continue to reinforce our brand recognition and image by conducting frequent marketing and promotional activities, targeted across various age groups, to enhance our brand image and promote our products to retail customers. We intend to continue promoting our “HomesToLife” brand and products through modern mass media such as social media and apps on a regular basis, including specifically through marketing by Key Opinion Leaders (i.e., “influencers”, which includes “micro-influencers” with a follower-count of between 5,000 to 20,000) on social media, instead of traditional mass media such as television and newspaper advertisements, as we have found that social media focused advertisements resonate well with our potential customers due to their localized approach, and have a strong positive effect on our sales and revenue figures.

At present, we focus our marketing efforts specifically on Facebook, Instagram and influencers. Whilst we do maintain a subtle brand presence on other social media platforms, such as TikTok and Xiao Hong Shu, by having a HomesToLife Singapore account, we do not have immediate plans to focus on these platforms, as our target market does not utilize such other social media platforms as much. However, we are constantly reviewing our marketing strategy to ensure that we reach our target market and potential customers in the most effective manner. We plan to undertake sponsorship of events and attend or host exhibitions or consumer trade fairs to further our brand recognition. We have, and will continue to, invite local celebrities or key-opinion-leaders with a strong social media presence to be our brand representatives to promote our products. These marketing campaigns will increase exposures of our “HomesToLife” brand and elevate our brand’s status, thereby enabling us to capture the potential target customer groups and increase our market presence.

Enhancement of our sales channels through opening additional retail stores in Singapore

We operate our own retail stores under the brand name “HomesToLife” by offering a one-stop solution to retail customers to address their furniture needs. As of the date of this annual report, we have in operation six retail stores owned by us under our brand name “HomesToLife” across Singapore. Within Singapore, we may open further retail stores in areas with good customer demand and footfall, such as shopping malls, to ensure a commanding presence within the domestic upholstered furniture market in Singapore. We pride ourselves on ensuring that most of our retail stores are only opened in shopping malls in commercial centers and furniture-centric malls, allowing our stores, products and goods to benefit from the higher foot traffic in these areas. Additionally, given the unique design of our flagship products, such as our sofa recliners that can take up less space when not being used, we are able to maximize the space in our malls to display all of our key products for our potential customers to test and evaluate in-store, thus promoting a higher sales conversion rate.

We intend to extend our reach in the overseas upholstered furniture market

As a well-recognized, trusted retail concept brand in the upholstered furniture market in Singapore, we intend to further enhance our competitive advantage by extending our footprint beyond the region and into other markets in the APAC region including, Taiwan, Korea, Indonesia and Malaysia. Specifically, we intend to land the HomesToLife Singapore retail store concept in a number of other key cities in countries within the APAC region, which will be decided on after market studies are conducted. In addition to our direct-to-consumer business, we will also explore the possibility of selectively pursuing mergers and acquisitions, investments and corporations co-operations with local companies or brands to deepen our connection with local furniture suppliers in the APAC region. We have also identified the wholesale of upholstered furniture as a growing market within the Asia-Pacific region, and we have incorporated HTL FE on October 28, 2024, which has since expanded into a number of markets in the Asia-Pacific region, including Japan and Korea in 2024, and Indonesia, Thailand, Taiwan, Philippines, Malaysia, Cambodia in 2025.

Sales Channel

HomesToLife Singapore

HomesToLife Singapore primarily engages in business-to-customer sales through its retail stores and occasionally online sales. HomesToLife Singapore believes that its brand recognition and reputation are critical for the growth of its business.

Retail Stores

HomesToLife Singapore has a total of 6 retail stores across Singapore, specifically, at the following locations:

(1) In connection with the ongoing restructuring initiative (see page 42) designed to optimize operational performance, on April 1, 2025, HomesToLife Singapore notified its landlord of its intention to terminate the lease agreement of this store.

In each of these stores, the furnitures HomesToLife Singapore sells are displayed for potential customers to try and evaluate. Each of these stores is also staffed by at least one employee.

Online Channels

HomesToLife Singapore also offers its furniture and case goods through its website at “homestolife.com”, and customers may browse through its listings, each with high quality pictures and a detailed description of the product, including the dimensions of the product and the materials used. Customers may purchase furniture and case goods through HomesToLife Singapore’s website, and its sales staff will follow up with the customer on the delivery details of such purchases.

HomesToLife Singapore’s online sales are minimal, as customers prefer trying and experiencing its products at its retail stores and purchasing the products they like. HomesToLife Singapore maintains its online sales capabilities through its website in order to reinforce sales, as it understands that potential customers take longer to deliberate over their purchase for big ticket items like sofas. For each of the fiscal years ended December 31, 2024, 2023 and 2022, our online sales contributed less than 1% of the total sales.

Example of products being presented on line

Examples of case goods and other furnitures HomesToLife Singapore sells in its retail stores

HTL FE

HTL FE engages in business-to-business sales by fulfilling purchase orders from its customers which met HTL FE at fairs such as Canton Fair and Shanghai Fair, or know HTL FE based on existing relationships.

Sales Process

HomesToLife Singapore

HomesToLife Singapore is a consumer-facing business in Singapore, selling upholstered furniture through its retail stores in Singapore and through its online website. We set out below a detailed explanation of each of the steps involved in the sale process.

Order Placement and Confirmation through Retail Stores

With respect to HomesToLife Singapore’s retail stores in Singapore, when a potential customer enters a “HomesToLife” retail store, the potential customer will be greeted by a sales staff who will attempt to understand the potential customer’s needs and to assess what the potential customer is looking for (such as sofas and tables). The sales staff will then present appropriate products and related services (such as color customization options) to the potential customer. Once the potential customer narrows down on a few products, HomesToLife Singapore’s sales staff will then prepare and provide a detailed quotation including price, photos, and dimensions of the product(s) in question.

Given that furniture purchases are relatively big-ticket items, HomesToLife Singapore recognizes that such potential customers would require some time to deliberate on the purchase, and HomesToLife Singapore’s sales staff will highlight to the customer that they need not make their decision on the spot. HomesToLife Singapore’s sales staff will take down such potential customers’ contact details with their consent, and will follow up with time-limited offers and delivery lead times as key points to close the deal.

Once the customer decides to proceed with a purchase, HomesToLife Singapore’s sales staff will finalize the sale, including reviewing the expected delivery timelines with the customer, and confirming all relevant details with the customer. For orders above SGD1,200, HomesToLife Singapore will provide free delivery to the customer’s home.

HomesToLife Singapore’s sales staff will then create an order on the backend CRM system, and confirm the payment details with the customer. At present, full payment is required for ready stock, whereas custom orders require a 50% down payment.

Order Placement and Confirmation through HomesToLife Singapore’s Website

HomesToLife Singapore’s potential customers may also place an order of the furniture and case goods through HomesToLife Singapore’s website at “homestolife.com”. Upon placing an order and payment being made online, the order will be processed through HomesToLife Singapore’s backend, similar to the process that follows after an order is placed through HomesToLife Singapore’s retail stores.

Custom furniture

Most of the sofas HomesToLife Singapore sells are customized. If a customer purchases custom furniture such as sofa, HomesToLife Singapore’s sales staff will help the customer place an order with HomesToLife Singapore’s supplier within the HTL Group. HomesToLife Singapore will then coordinate with the supplier which will arrange manufacturing and delivering the custom furniture to its Singapore warehouse. The cycle from placing an order to the customer receiving the furniture is about 8 to 12 weeks, which we believe is faster than HomesToLife Singapore’s competitors and is one of HomesToLife Singapore’s competitive strengths.

Order Fulfilment and Delivery

Five days before the scheduled delivery date of the goods to the customer, HomesToLife Singapore’s delivery team will contact the customer to confirm the delivery, and to confirm the logistics of the delivery. For example, HomesToLife Singapore’s delivery team will confirm elevator dimensions with the customer if there is a bulky item, and will also confirm the exact time window of the delivery. Once the delivery is confirmed, there will be a delivery order generated and issued to the vendor providing the delivery services. All goods that are delivered by the vendor will require photographic proof, and requires the customer to receive and sign-off on the delivered goods.

After-Sales and Service Recovery

In the event that there is a defect with any delivered goods, the customer may reject the goods upon delivery, or to contact us after acceptance of the goods. HomesToLife Singapore’s sales team will then verify the purchase and the claim, and will assess the defect reported. In the event of a genuine defect with the goods, HomesToLife Singapore will arrange for on-site service to address the defect, or for return pickup if on-site service is not available. In the event of a return pickup, HomesToLife Singapore will receive and inspect the returned item, and document all findings meticulously. HomesToLife Singapore will also keep the customer updated on the status of the returned item, before arranging for the item to be sent back to the customer once the defect is addressed. HomesToLife Singapore will close the matter when the customer informs us that he/she is satisfied with the resolution. Additionally, in order to improve processes, HomesToLife Singapore will provide the findings from such returned item to HomesToLife Singapore’s quality control team, manufacturing team, as well as the third party vendor, to prevent future defects.

HTL FE

HTL FE sources, distributes, and delivers premium furniture and related products to business sectors across the Asia-Pacific region. HTL FE sources furnitures from HTL Furniture, a related party, and also from other unrelated parties. HTL FE entered into a Contract Manufacturing Agreement with HTL Furniture on November 1, 2024.

Fairs/long-term relationship. .

1. Order Placement

For HTL FE’s customers which are related parties (including HomesToLife Singapore), they place purchase orders directly with HTL FE via SAP, an electronic data interchange system.

For HTL FE’s customers which are non-related parties, they email detailed purchase order information to HTL FE. The order information includes key elements such as product specifications, quantities, and delivery dates.

2. Order Processing and Confirmation

Once HTL FE receives the purchase order from its related party customer via SAP, HTL FE processes it in the SAP system, which releases the order information to HTL Furniture or other related parties under HTL Group, and automatically generates an order confirmation number.

Once HTL FE receives the purchase order from its non-related party customer via email, HTL FE processes the such order in the SAP system, which automatically generates an order confirmation. HTL FE then emails the generated order confirmation to the customer for review and confirmation. After the non-related party customer confirms the order, HTL FE sends the order confirmation to HTL Furniture or other related parties under HTL Group.

3. Production and Shipment

HTL Furniture then initiates the production process after receiving the released order confirmation. Once production of the goods has been completed, HTL Furniture then directly export and ship the goods from the China factory to HTL FE’s customers. Upon completion of the production of goods, HTL Furniture then then directly export and ship the goods from its China factory to HTL FE’s customer. HTL FE coordinates the logistics arrangements to ensure that the goods are delivered to the customer’s designated location in accordance with the order terms.

4. Invoicing and Payment

HTL Furniture first issues an invoice to HTL FE after the shipment of goods, recording the production costs and related expenses in the SAP system.

For a related party customer, HTL FE then issues a sales invoice to such customer based on the terms of the purchase order after receiving the factory invoice on back to back basis, via the automatic sale invoicing function within SAP.

For a non-related party customer, HTL FE will then issue and email a sales invoice to such customer.

Once the related party or non-related party customer receives the invoice, this customer shall make its payment to HTL FE in accordance with the payment terms contained within the invoice. Separately, HTL FE makes the payment to HTL Furniture or other related party suppliers in accordance with the Contract Manufacturing Agreement through the SAP system.

HTL FE’s robust growth outlook is a testament to its savvy strategic initiatives and the market’s positive response to its offerings. We believe that HTL FE will satisfy the surging demand across the Asia-Pacific region for premium furniture at reasonable prices, and anticipate that such demand will continue to grow in 2025, permitting HTL FE to experience further expansion and success.

Products and Brands We Sell

HomesToLife Singapore

HomesToLife Singapore offers a number of brands of upholstered furniture to customers, mainly sofas and also case goods, such as such as coffee table, dining table and bedding.

Sofas

HomesToLife Singapore sells customized sofas and stock sofas. HomesToLife Singapore also exclusively carries the “Domicil” and “Fabbrica” brands in Singapore. HomesToLife Singapore stocks the Domicil brand in two retail stores, whilst the Fabbrica brand is stocked in another retail store. HomesToLife Singapore has entered an Exclusive Brand Distributor Agreement with HTL Marketing. HTL Marketing, owns the trademarks for these brands and authorizes HTL Furniture to manufacture the furnitures with these brands. HTL FE signed a Contract Manufacturing Agreement with HTL Furniture on November 1, 2024 and HomesToLife Singapore entered into a supply agreement with HTL FE on January 1, 2025 Therefore, HomesToLife Singapore is exclusively authorized to sell the products of these brands in Singapore.

Case Goods

HomesToLife Singapore also sells case goods such as coffee tables, dining tables and bedding, procured from unrelated third parties.

HomesToLife Singapore prides itself on offering not only exquisite seating solutions but also an extensive range of case goods products to elevate your living and dining spaces. HomesToLife Singapore’s living case goods range encompasses an array of elegant coffee tables, TV consoles, and shelving units, HomesToLife Singapore’s dining case goods line features sophisticated dining sets, sideboards, and bar units, and HomesToLife Singapore’s bedroom case goods include bedframes, bedside tables, dressing tables and bed-end benches. Each collection is thoughtfully curated to seamlessly blend functionality with timeless design, ensuring that your home reflects your unique taste and lifestyle.

HTL FE

Sofas

The main products that are sold by HTL FE to its customers, on a wholesale basis, are stock sofas that are manufactured through its manufacturing partners.

For HomesToLife Singapore and a related party in Korea, HTL FE sells the products under HTL Group’s brands, including but not limited to “Domicil”, “Fabbrica”, and “HTL” brands. Other customers purchase sofas from HTL FE on a white-label basis and sell these sofas under their own brands.

Our Customers

For HomesToLife Singapore, the majority of its sales are generated through its six retail stores in Singapore. HomesToLife Singapore’s customers come from all walks of life in Singapore, from the mass market to the affluent. For sofas, different brands are positioned to capture different segments of the market. The majority of HomesToLife Singapore’s customers are individuals and families. HomesToLife Singapore targets the customers who may be purchasing their second or third home and prefer the furniture of premium quality at affordable prices.

Apart from the Singapore market, we are also growing our brand footprint in Japan, Korea, Indonesia, Thailand, Taiwan, Philippines, Malaysia and Cambodia by engaging in the wholesale trade of upholstered furniture through HTL FE. A majority of HTL FE’s customers are upholstered furniture retailers in their respective countries and occasionally HTL FE sells products to other wholesalers. As the date of this report, below is a list of classifications of HTL FE’s customers in these countries:

Our Suppliers

Our major costs of purchases include (i) product procurement; (ii) rental costs and (iii) freight charges.

On May 20, 2024, HomesToLife Singapore entered into the amended and restated products supply agreement (the “Products Supply Agreement”) with another entity within the HTL Group, HTL Marketing, for the supply of products. HTL Marketing, in turn, sources for raw materials (including raw leather) and manufacturing services mainly from other related parties within the HTL Group (mainly other China subsidiaries within the HTL Group). Up until January 1, 2025, HTL Marketing supplies about 80% of the goods and products to HomesToLife Singapore, comprising of mainly sofas.

Since January 1, 2025, HomesToLife Singapore has transitioned its supply source from HTL Marketing to HTL Furniture, another HTL Group company, through HTL FE. HTL FE signed a Contract Manufacturing Agreement with HTL Furniture on November 1, 2024 and HomesToLife Singapore entered into a supply agreement with HTL FE on January 1, 2025, with substantially the same terms as the supply agreement that was originally entered into between HomesToLife Singapore and HTL Marketing.

The details of the Contract Manufacturing Agreement between HTL FE and HTL Furniture are set out below:

All of our other suppliers for the products that HomesToLife Singapore sells are third parties, unrelated to HomesToLife Singapore or the HTL Group. HTL FE’s suppliers are all related parties under HTL Group. Our founders visited various suppliers that manufacture and supply the products that HTL Group plans to sell, and then produced a list of approved third party suppliers for the companies under the HTL Group to procure the products. HTL Group entities have entered into master purchase agreements with these suppliers, but individual purchases for products manufactured by such third party suppliers are made by HomesToLife Singapore directly. These suppliers, which collectively supply around 20% of the goods and products sold by HomesToLife Singapore, are recognized by HomesToLife Singapore as approved suppliers, and collectively are the only non-related suppliers that supply goods and products to HomesToLife Singapore. One of the key reasons for the selection of such suppliers is that they provide favourable wholesale prices to HTL Group. They also have good selection of designs and/or products with premium quality. We engage directly with suppliers, and do not have any middlemen in our supply chain.

Related Services

Apart from goods and products that are supplied by our suppliers, we also contract with a number of other service providers, including freight/delivery services for the transport and delivery of goods and products from our Singapore warehouse to our customers as part of the order fulfilment process. For the transport and delivery of goods and products from our suppliers to our Singapore warehouse, we mainly work with the shipping companies which have signed the master agreements with HTL Group. All of them are third parties, unrelated to us or HTL Group. We also provide the repair services for free for our sold products within warranty period.

Seasonality

HomesToLife Singapore’s performance is subject to seasonality in a limited capacity. Large sales events, such as the Great Singapore Sale, take place in Singapore over the course of each year, and many retailers, including us, participate in such sales by offering discounts on our goods and products. Similar sales may also occur in the other countries that HTL FE operates in. During such promotion periods, there may be higher revenue recorded by us.

In general, for our Singapore market, based on HomesToLife Singapore’s historical data, it generally records an average revenue of between SGD 400,000 each calendar month. HomesToLife Singapore’s peak-sales periods tend to be in March, April, June, August, November, and December of each year, whilst our off-season tends to be in May and September of each year.

Pricing Strategies

HomesToLife Singapore

HomesToLife Singapore sell products at retail prices, with an appropriate mark-up to cost that accounts for, amongst others, labor, retail store rental, and other costs. HomesToLife Singapore takes into account factors such as quality of the products, market demand, popularity of the brands, the design and craftsmanship of the product, competitors’ pricing of comparable products, and the purchasing power of the target market.

During promotional events such as the Great Singapore Sale, HomesToLife Singapore offers a discount of up to 70% on the retail price of our goods and products. This generally attracts more potential customers to its retail stores and also increases its revenue during this period, through increased orders placed through our retail stores and through its website.

HTL FE

HTL FE’s products are sold at wholesale prices, with an appropriate mark-up to cost that accounts for, amongst others, cost of purchase, ocean freight, warranty, and other costs. HTL FE takes into account factors such as quality of the products, market demand, popularity of the brands, the design and craftsmanship of the product, competitors’ pricing of comparable products, and the purchasing power of the target market.

Quality Control

We emphasize safety and quality as fundamental requirements for all our products, and have a dedicated quality assurance and brand management team within HomesToLife Singapore and HTL FE. We ensure the quality of our goods and products through various measures.

First, we are stringent in our selection of suppliers. With respect to third party suppliers, our management team and product team visits and inspects the factories of such third party suppliers and manufacturers to ensure that the goods and products produced meet the standards consistent with the “HomesToLife” brand. We also constantly liaise with our furniture suppliers (both related-party and third party) to ensure products are of reliable quality. Each supplier, except our related parties, needs to be onboarded at the HTL Group level as an approved supplier, before we can place purchase orders with such approved vendors. The procurement team from the HTL Group will also regularly assess such approved vendors’ workmanship and product quality as well as their reputation. For products of new design, the procurement team from the HTL Group also inspects the products for workmanship and look into the product design to screen out safety or quality issue. Many of the HTL Group suppliers and third party suppliers and manufacturers passed the qualify certifications, such as ISO 14001:2015 for Leather Finishing for Upholstery Leather.

Second, we conduct quality control inspections of all goods and products in our warehouse, before such goods and products are delivered to customers. This allows us to identify any defects or deviations from our quality standards.

Third, we take our customer feedback and returns analysis very seriously. Each time a product is returned due to defects, we spare no effort in investigating the cause of such defect, in order to derive any recurring quality issues and taking corrective actions.

Fourth, HomesToLife Singapore’s goods and products come with a warranty period of up to 10 years, to provide its customers with assurance with respect to the quality and durability of our goods and products. HTL FE sells products on a wholesale basis, and provides a structure warranty period of up to two years.

Marketing

HomesToLife Singapore

To enhance its brand awareness, HomesToLife Singapore has conducted various marketing and promotional activities through different local media, including mainly social media (Facebook and Instagram), on regular basis.

HomesToLife Singapore’s marketing team is responsible for designing and launching marketing campaigns to promote its brand and image, and does so by focusing campaigns through the highest-impact channels such as social media platforms like Instagram and Facebook.

Unlike other retailers, HomesToLife Singapore creates most of its content in-house instead of relying on external agencies to have full control over its brand identity. Such content is usually more engaging and done with shorter lead times to respond to market changes. Most importantly, we believe it is also economically more effective. Combining gimmicks such as giveaways, collaborating with other brands, or working directly with key opinion leaders has proven to be effective in engaging and increasing awareness. In 2023, HomesToLife Singapore registered a 59.8% increase in reach on Instagram, i.e. the number of unique user that have seen our Instagram posts or stories.

When HomesToLife Singapore pays for advertising, it will work with established media agencies to increase brand awareness. For example, HomesToLife Singapore had engaged a popular Singaporean social media website and news media to design and execute an advertising campaign for the peak period from October 2023 to December 2023, and recorded around 33% more revenue in December 2023 compared to November 2023.

HomesToLife Singapore also engages performance marketing agencies to place data-driven digital advertisements that use AI algorithms for targeted audience outreach on the Google search engine, serving ads to potential customer across different platforms.

HomesToLife Singapore relies a lot less on traditional mass media such as television and newspaper advertisements, as it has found that social media focused advertisements resonate well with its potential customers due to their localized approach, and have a strong positive effect on our sales and revenue figures. At present, HomesToLife Singapore focuses its marketing efforts specifically on Facebook and Instagram. Whilst HomesToLife Singapore is aware of other social media platforms, such as TikTok and Xiao Hong Shu, it does not have immediate plans to focus on these platforms, as its target market does not utilize such other social media platforms as much. However, HomesToLife Singapore is constantly reviewing our marketing strategy to ensure that it reaches its target market and potential customers in the most effective manner. For example, although HomesToLife Singapore does not focus its efforts on TikTok, it has a presence through its account on TikTok.

Another example is, in one of HomesToLife Singapore’s marketing campaigns in December 2023, executed through Instagram, HomesToLife Singapore found that the marketing campaign was able to gain viral traction with close to 90,000 impressions, which is sizable in a small market like Singapore, and greatly boosted visibility of its brand and its flash sales during the period. HomesToLife Singapore found that its sales figures for December 2023 and January 2024 was significantly over the baseline for the same period, as a result of the marketing campaign.

Business Improvement Initiative

In response to the operational losses experienced by HomesToLife Singapore, HomesToLife Cayman’s Chief Executive Officer, Phua Mei Ming, is leading a comprehensive restructuring initiative designed to enhance financial performance. The key measures of this initiative are as follows:

The restructuring initiative commenced on April 1, 2025.

HTL FE

HTL FE is a trading business entity. It is engaged in the latest sofa exhibitions, including at Canton Fair and Shanghai Fair, where its products are marketed to other retailers in the Asia-Pacific region.

Environmental protection and ESG

While due to the nature of our business, our operational activities do not directly generate industrial pollutants. As such, we have not directly incurred any cost of compliance with applicable Singapore laws and regulations as of the date of this annual report and do not expect that we will directly incur significant costs for such compliance in the future. As of the date of this annual report, we had not come across any material non-compliance issues in respect of any applicable laws and regulations on environmental protection. We have not been subject to any administrative sanctions or penalties that have a material and adverse effect on our financial condition or business operation.

At the retail level, HomesToLife Singapore has implemented initiatives such as marketing campaigns aimed at reducing wastage, including strategies to minimize the use of foam boards and the digitalization of its catalogues.

Impact of Inflation on Our Business and Mitigation Efforts 

The following table shows the factors contributing to the inflationary pressures that we have experienced, the resulting impact to our company, and the actions we have taken to mitigate the impact these inflationary pressures had on our operations.

Competition

The retail sale of upholstered furniture is a highly fragmented and competitive business. We believe that the primary elements of competition in our industry are merchandise (quality, style, selection, price and display), customer service, marketing and advertising, and store location and design. HomesToLife Singapore competes with numerous other independent and chain retail furniture stores. Its competitors that are larger chain retail furniture stores benefit from more established name recognition.

HomesToLife Singapore’s principal competitors in Singapore are:

HomesToLife Singapore believes that it is uniquely positioned in the Singapore market for upholstered furniture, with a targeted mix of goods and products that appeals to customers across various segments, from mass market to the affluent. HomesToLife Singapore also considers its experienced sales personnel and customer service as important factors in ensuring our competitive success. HomesToLife Singapore also believes that significant additional competitive advantages are also provided by our ability to make prompt delivery of orders through maintenance of ready-stock inventory in its Singapore warehouse, and to tailor merchandise to customers’ desires through custom orders. HomesToLife Singapore’s after-sales and service recovery processes are also robust, allowing it to ensure customer satisfaction with its goods and products.

HTL FE’s principal competitors are set out as follows:

HTL FE believes that it is uniquely positioned in these other markets for the wholesale trade of upholstered furniture, with its upholstered furniture designed to appeal to customers across various segments, from mass market to the affluent.

Intellectual Property Rights

We regard our trademarks, domain name and similar intellectual property as critical to our success. As of the date of this annual report, HomesToLife Singapore owns the following trademarks:

Place of registration		Trademark		Trademark number		Classes		Expiry Date
Singapore		HomesToLife		T1319858E		35		December 9, 2033
Australia, China, Japan and South Korea				1217190		35		June 2, 2034
Hong Kong				302844621		35		December 19, 2033
Indonesia				IDM00536586		35		December 19, 2033
Hong Kong				303016908		35		June 2, 2034
Malaysia				2014006135		35		June 3, 2034
Singapore				T1408378A		35		May 29, 2034
Australia, China, Japan, South Korea				1236315		35		September 29, 2034
Indonesia				IDM000548742		35		June 5, 2034

As of the date of this annual report, HomesToLife Singapore is authorized to use the following trademarks pursuant to a trademark license agreement dated February 19, 2024 between HTL Marketing and HomesToLife Singapore:

Regions of usage		Trademark		Authorized by
Asia, Europe, North America, Middle East, Africa, Australasia		DOMICIL		HTL Marketing
Asia, Europe, North America, Middle East, Africa, Australasia				HTL Marketing
North America, Asia, Australasia, Europe		FABBRICA		HTL Marketing
North America, Asia, Australasia, Europe				HTL Marketing

HomesToLife Singapore has also been granted an exclusive, non-transferable and royalty-free license by HTL Marketing for the use of certain trademarks related to the Domicil and Fabbrica brands, as well as all copyrights, trademarks, patents, design rights and all similar proprietary rights as may exist anywhere in the world (whether registered or unregistered) in Singapore, for the purpose of performing its obligations under the Exclusive Brand Distribution Agreement.

HomesToLife Singapore is also the registered owner of domain name “homestolife.com”, which expires on June 19, 2025. It will renew the domain name registration before its expiration.

Our employees

In total we had 34, 30 and 27 full-time employees as of December 31, 2024, 2023 and 2022, respectively. These employees are stationed in Singapore, with a portion of employees undertaking business travel as part of their job scopes.

The following table sets forth the number of our full-time employees categorized by function as of December 31, 2024, 2023 and 2022:

Our employees in Singapore are part of the Building Construction and Timber Industries Employees’ Union (“Union”) of Singapore, and we have entered into a collective agreement with the Union on December 8, 2021 (“Collective Agreement”), that, amongst others, sets out the working hours and rate of payment for overtime work for our employees, as well as the number of rest days per week for each employee. HomesToLife Singapore executed the new Collective Agreement with the National Trade Union (“NTUC”) on March 5, 2025. We are currently awaiting the Industrial Arbitration Court certification of the Collective Agreement, which is anticipated to be finalized by the end of June 2025. 

We consider that we have maintained a good relationship with our employees and have not experienced any significant disputes with our employees or any disruption to our operations due to any labor disputes. In addition, we have not experienced any difficulties in the recruitment and retention of experienced core staff or skilled personnel.

Our remuneration package includes salary and discretionary bonuses. In general, we determine employees’ salaries based on their qualifications, position and seniority. In order to attract and retain valuable employees, we review the performance of our employees annually which will be taken into account in annual salary review and promotion appraisal.

Properties

As of the date of this annual report, HomesToLife Singapore has entered into the following lease agreements:

(1) In connection with the ongoing restructuring initiatives (see page 42) designed to optimize operational performance, on April 1, 2025, HomesToLife Singapore notified its landlord of its intention to terminate the lease agreement of this store.

All of our properties are leased, and we do not own any properties.

Licenses and Permits

We confirm that we have obtained all material licenses, certificates and approvals required for carrying on our business activities in Singapore, Japan, Korea and other foreign countries that we have the business activities.

Insurance

We maintain business insurance of our stores and our office, and for goods and products in transit. We also maintain directors and officers liability insurance. We believe that our current insurance policies are sufficient for our operations.

Legal Proceedings

To the best of our knowledge, we are not currently the subject of any material governmental investigation, private lawsuit or other legal proceeding. From time to time, we may be involved in legal and regulatory proceedings or investigations concerning matters that arise in the ordinary course of our business and that could result in significant fines or penalties, have an adverse impact on our reputation, business and financial condition or results of operations and divert the attention of our management from the operation of our business. The outcome of any future litigation, regulatory or other proceedings cannot be predicted with certainty, and some lawsuits, claims, actions or proceedings may be disposed of unfavorably to us.

Government Regulations

As our material business operations are conducted in Singapore, we are subject to the relevant laws and regulations of Singapore and may be affected by policies which may be introduced by the Singaporean government from time to time. We may also be subject to the relevant laws and regulations of the countries where we export our products to. We have identified the main laws and regulations (apart from those pertaining to general business requirements) that materially affect our operations below. However, we believe that we comply with all these laws and regulations, and therefore none of them have materially affected the Company or operations in the past.

As of the date of this annual report, our directors believe that we are not in breach of any laws or regulations applicable to our business operations that would materially affect our business operations, and our Group is in compliance with all the applicable laws and regulations that are material to our business operations. The Group may be subject to certain fines/penalties arising from its ordinary course of business from time to time.

Singapore

Laws relating to Consumer Protection

The primary statute governing consumer protection is the Consumer Protection (Fair Trading) Act 2003 of Singapore (the “CPFTA”) and its subsidiary legislations. Besides the CPFTA, there are other statutes which govern the sale, supply or hire of goods that are relevant to consumer protection.

CPFTA

The CPFTA was enacted to protect consumers against unfair practices and to give consumers additional rights in respect of goods that do not conform to contract. The CPFTA sets out a legislative framework prohibiting suppliers from engaging in unfair practices in relation to transactions and to allow consumers aggrieved by unfair practices to have recourse to civil remedies before the Singapore courts. The definition of supplier under the CPFTA includes persons who promote the use or purchase of goods or services. Suppliers may be held liable for engaging in unfair practices in relation to consumer transactions.

The CPFTA was amended on 1 September 2012 by the Consumer Protection (Fair Trading) (Amendment) Act 2012 to, amongst others, in relation to a contract of sale of goods, give consumers additional rights and remedies against the seller for non-conforming goods. The CPFTA is administered by the Competition and Consumer Commission of Singapore (“CCCS”) and the Consumer Association of Singapore (“CASE”) and the Singapore Tourism Board are the first point of contact for local consumers and tourists respectively to handle complaints. Errant suppliers who persist in unfair trade practices will be referred to the CCCS for investigation.

Part II of the CPFTA provides that a consumer who has entered into a consumer transaction involving an unfair practice may bring an action against the supplier. It is an unfair practice under the CPFTA for a supplier, in relation to a consumer transaction: (i) to do or say anything, or omit to do or say anything, if as a result, a consumer might reasonably be deceived or misled; (ii) to make a false claim; (iii) to take advantage of a consumer if the supplier knows or ought reasonably to know that the consumer (a) is not in a position to protect his own interests; or (b) is not reasonably able to understand the character, nature, language, or effect of the transaction or any matter related to the transaction; or (iv) to commit any of the unfair practices specified in the Second Schedule of the CPFTA.

Part III of the CPFTA will apply to a contract of sale of goods if the buyer deals as consumer, and the goods do not conform to the applicable contract at any time within the period of six (6) months starting after the date on which the goods were delivered to the buyer, and if the contract was made on or after 1 September 2012. Goods do not conform to a contract of sale of goods if there is, in relation to the goods, a breach of, an express term of the contract, the implied condition that the goods will correspond with the description or samples provided by the seller to the buyer, or the implied condition that the goods are of satisfactory quality or fitness for the purpose for which the goods were supplied. Under Part III of the CPFTA, consumers will have a statutory right to (i) repair or replace the goods, or (ii) reduce the amount to be paid for the sale by an appropriate amount or rescind the contract with regard to the goods in question. If the consumer requires the vendor to repair or replace the goods, the vendor must repair or as the case may be, replace the goods within a reasonable time and without causing significant inconvenience to the consumer, and bear any necessary costs in doing so (including in particular, the cost of any labour, materials or postage). The consumer may require the vendor to reduce the amount to be paid for the goods by an appropriate amount or rescind the contract with regard to those goods if: (i) the remedy of repair or replacement is impossible, disproportionate in comparison to the other of those remedies or disproportionate, or (ii) the consumer has required the vendor to repair or replace the goods but the transferor is in breach of the requirement to do so within a reasonable time and without causing significant inconvenience to the vendor.

Consumer Protection (Fair Trading) (Cancellation of Contracts) Regulations 2009

The Consumer Protection (Fair Trading) (Cancellation of Contracts) Regulations 2009 is enacted under the CPFTA to complement and enhance consumer protection in Singapore, allowing consumers the right to cancel a direct sales contract within five (5) days (excluding Saturdays, Sundays and public holidays) after the date on which the contract is entered into or after the date on which the supplier informs the consumer about the right to cancel the contract. A consumer may also cancel the contract (or any subsequent contracts with the supplier on substantially the same terms as the cancelled contract), if the supplier enters into a contract with that consumer in breach of an accompanying court order made under section 9(4)(b) of the CPFTA. In this scenario, the consumer may give a notice of cancellation of the contract at any time within six (6) months after the date on which the contract was entered into.

Consumer Protection (Consumer Goods Safety Requirements) Regulations 2011 (the “CGSR”)

The CGSR requires all consumer goods ordinarily supplied for private use or consumption except for specified goods such as used or second-hand goods specifically excluded under CGSR to conform to the required safety standards. Enterprise Singapore is appointed by the Ministry of Trade and Industry to administer the CGSR and the Consumer Product Safety Office (the “CPSO”) is an office overseen by Enterprise Singapore that is responsible for the implementation of the CGSR. The CPSO has the power to investigate incidents and feedback involving unsafe general consumer goods, stop the sale of, or ban unsafe general consumer goods from the market.

The consumer goods covered by CGSR are classified into two (2) categories:

Category 1 goods shall conform to safety standards for such goods imposed by ISO, IEC, EN or ASTM safety standards, as well as any additional safety requirements for such goods specified by the CPSO and published in its Consumer Protection (Consumer Goods Safety Requirements) Information Booklet.

Category 2 goods shall conform to the safety standards for such goods that have been formulated or adopted and published by any regional or national standards body.

Under the CGSR, Enterprise Singapore may issue a public notice declaring any consumer goods to be unsafe and/or issue a directive for suppliers to (i) control or cease supply of such goods in Singapore; and (ii) inform users of the potential danger of the goods, if any of these consumer goods do not conform to the required safety standards. It is an offence under the CGSR to continue supplying any consumer goods as declared by Enterprise Singapore to be unsafe in Singapore in the course of trade or business and any person who fails to comply with such directive shall be guilty of an offence under the CGSR.

The CGSR provides that any person guilty of an offence under CGSR shall be liable on conviction to pay a fine not exceeding S$2,000 or to imprisonment for a term not exceeding 12 months or to both; and in the case of a second or subsequent offence, to a fine not exceeding S$10,000 or to imprisonment for a term not exceeding two (2) years or to both.

Singapore Code of Advertising Practice (the “SCAP”)

The SCAP is a code of practice set out by the Advertising Standards Authority of Singapore (the “ASAS”) prescribing general principles applicable to advertisements, which include decency, honesty and truthful presentation, and contains guidelines relating to specific services/products. While the SCAP has no force of law, a breach of the SCAP may lead to ASAS referring the matter to the CASE under the CPFTA if an advertiser has repeatedly violated the SCAP by marketing false, misleading or unsubstantiated claims. The ASAS has also issued additional guidelines from time to time, such as the Guidelines for Interactive Marketing Communication & Social Media, which emphasizes that marketing communication should be clearly distinguishable from editorial and personal opinion and should not take the form of social media content that appears to originate from a credible and impartial source, and the Guidelines on Advertising of Investments, which aim to minimize investments-related advertisement with claims that are speculative, misleading or not substantiable.

Consumer Protection (Trade Descriptions and Safety Requirements) Act 1975 (the “CPTDSR Act”)

The CPTDSR Act of Singapore prohibits the application of false trade descriptions to goods in the course of trade or business, as well as the supply of goods to which a false trade description has been applied. In particular, it is an offence to falsely indicate that any goods supplied or methods adopted are of a standard specified or recognized by any person or implied by the approval of any person, if there is no such person or no standard as specified, recognized or implied.

The CPTDSR Act provides in general that any person convicted of an offence under the CPTDSR Act for which no penalty is expressly provided shall be liable on conviction to pay a fine not exceeding S$10,000 or to imprisonment for a term not exceeding two (2) years or both.

Sale of Goods Act 1979 of Singapore (the “SGA”)

The SGA is the main governing law in Singapore in relation to sale of goods. The SGA applies to any contract for the sale of goods. A contract of sale of goods is a contract by which the seller transfers or agrees to transfer the property in goods to the buyer for a money consideration, called the price.

Section 14 of the SGA provides that where a seller sells goods in the course of a business, there is an implied condition that the goods supplied under the contract are of satisfactory quality, except that there is no such condition (i) as regards defects specifically drawn to the buyer’s attention before the contract is made; (ii) where the buyer examines the goods before the contract is made, as regards defects which the examination ought to reveal; or (iii) if the contract is a contract for sale by sample, defects which would have been apparent on a reasonable examination of the sample. For the purposes of the SGA, goods are of satisfactory quality if they meet the standard that a reasonable person would regard as satisfactory, taking account of any description of the goods, the price, and all other relevant circumstances.

Breach of this implied provision, it being a condition of the contract, would entitle the buyer to terminate the agreement and take action against the seller in respect of any loss suffered.

Unfair Contracts Terms Act 1977 of Singapore (the “UCTA”)

The UCTA generally regulates against unfair contract terms such as exclusion clauses and limitation of liability clauses in most consumer and standard form contracts. Amongst other things, the UCTA prohibits the exclusion or restriction of liability for death or personal injury caused by negligence in all contracts. It also prevents sellers/service providers from excluding or limiting their liability for a breach of contract, unless, in each case, the contract term satisfies the requirement of reasonableness (that is, the contract term must have been a fair and reasonable one to be included having regard to the circumstances which were, or ought reasonably to have been, known to or in the contemplation of the parties when the contract was made). Similarly, contract terms requiring the consumer to indemnify the supplier in respect of liability incurred by the supplier’s negligence or breach of contract are also prohibited unless they satisfy the requirement of reasonableness. The UCTA also circumscribes the limitation of liability in relation to certain implied terms in respect of goods purchased.

Misrepresentation Act 1967 of Singapore (the “Misrepresentation Act”)

The Misrepresentation Act applies this requirement of “reasonableness” to terms which would exclude or restrict any liability to which a party to a contract may be subject by reason of any misrepresentation made by him before the contract was made, or any remedy available to another party to the contract by reason of such a misrepresentation.

If the supplier is liable for fraudulent misrepresentation under the Misrepresentation Act, the Singapore Courts can award all losses flowing directly from the claimant’s reliance on the fraudulent misrepresentation, regardless of whether the loss was foreseeable. This measure of damages similarly applies if the supplier made a negligent misrepresentation to the claimant, unless the claimant had reasonable ground to believe, and did believe, that the facts represented were true.

Laws relating to Employment Matters

Employment Act 1968 of Singapore (the “Employment Act”)

The rights of all employees employed under a contract of service with our subsidiaries are governed under the Employment Act. The Employment Act generally extends to all employees regardless of their designation, salary level or type of work performed, with the exception of certain groups of employees (i.e., seafarers, domestic workers and public workers). It provides employees falling within its ambit certain protections such as minimum notice periods, restrictions in relation to the deductions from wages, minimum days of annual and sick leave, maternity/paternity leave and paid childcare leave. The Employment Act also applies to employees who are foreigners so long as they fall within the definition of “employee” under the Employment Act.

As at the date of this annual report, all of the 37 employees of our Company’s Singapore operating subsidiaries, HomesToLife Singapore and HTL FE, are covered under the Employment Act and granted the aforementioned rights.

Central Provident Fund Act 1953 of Singapore (the “CPF Act”)

The Central Provident Fund (“CPF”) is a social security savings scheme funded by contributions from employers and employees formed pursuant to the CPF Act. It enables working Singapore citizens and permanent residents to set aside funds for retirement. It also addresses healthcare, home ownership, family protection and asset enhancement. Under the CPF Act, both employers and employees make monthly CPF contributions on the amount of wages at the rates set out in the CPF Act. CPF contributions are due at the end of the month and an employer has a grace period of 14 days to pay it. The employer must pay both the employer’s and employee’s share of the monthly CPF contribution. However, the employer can recover the employee’s share by deducting it from their wage when the contributions are paid for that month.

The CPF Act provides that in general if any person convicted of an offence under the CPF Act for which no penalty is provided shall be liable on conviction to pay a fine not exceeding S$5,000 or to imprisonment for a term not exceeding six (6) months or both, and if that person is a repeat offender for the same offence, to a fine not exceeding S$10,000 or to imprisonment for a term not exceeding 12 months or both.

Employment of Foreign Manpower Act 1990 of Singapore (the “EFMA”)

The employment of foreign workers in Singapore is governed by the EFMA and regulated by the Ministry of Manpower. In Singapore, under Section 5(1) of the EFMA, no person shall employ a foreign worker unless he has obtained in respect of the foreign worker a valid work pass. The foreign worker has to be employed and carry out duties in respect of his or her work pass. Any person who fails to comply with or contravenes Section 5(1) of the EFMA shall be guilty of an offence and shall:

Laws relating to Workplace Safety

Workplace Safety and Health Act 2006 of Singapore (the “WSHA”)

The WSHA provides that every employer has the duty to take, so far as is reasonably practicable, such measures as are necessary to ensure the safety and health of (a) his employees at work and (b) persons (not being his employees) who may be affected by any undertaking carried on by him in the workplace. These measures include, but are not limited to: (i) providing and maintaining for employees a work environment which is safe, without risk to health, and adequate as regards to facilities and arrangements for their welfare at work; (ii) ensuring that adequate safety measures are taken in respect of any machinery, equipment, plant, article or process used by the employees; (iii) ensuring that employees are not exposed to hazards arising out of the arrangement, disposal, manipulation, organization, processing, storage, transport, working or use of things in their workplace or near their workplace and under the control of the employer; (iv) developing and implementing procedures for dealing with emergencies that may arise while those employees are at work; and (v) ensuring that employees at work have adequate instruction, information, training and supervision as is necessary for them to perform their work.

Any person guilty of an offence under the WSHA (but not including the relevant regulations) for which no penalty is expressly provided by the WSHA shall be liable on conviction:

(a) in the case of a natural person, to a fine not exceeding S$200,000 or to imprisonment for a term not exceeding two (2) years or to both; and

(b) in the case of a body corporate, to a fine not exceeding S$500,000,

and, if the contravention in respect of which he was so convicted continues after the conviction, he shall (subject to Section 52 of the WSHA) be guilty of a further offence and shall be liable to a fine:

(i) in the case of a natural person, not exceeding S$2,000 for every day or part thereof during which the offence continues after conviction; or

(ii) in the case of a body corporate, not exceeding S$5,000 for every day or part thereof during which the offence continues after conviction.

Under the WSHA, the Commissioner for Workplace Safety and Health may serve a remedial or a stop-work order in respect of a workplace, for contravention or omission of any WSHA-specified condition.

As employers in Singapore, our Singapore operating subsidiaries, HomesToLife Singapore and HTL FE, are required to adhere to the WSHA and adopt these measures to ensure the safety and health of their employees and persons (not being employees of HomesToLife Singapore or HTL FE) who may be affected by any undertaking carried on by him in our Group’s office premises in Singapore.

As at the date of this annual report, our Group have not been served any orders by the Commissioner of Workplace Safety and Health in Singapore.

Workplace Safety and Health (Incident Reporting) Regulations (the “WSHIR”)

Under Regulation 4 of the WSHIR, where any accident at a workplace occurs which leads to the death of any employee, the employer shall, as soon as is reasonably practicable but no later than 10 days after the accident, submit a report to the Commissioner for Workplace Safety and Health.

Under Regulation 6 of the WSHIR, where an employee meets with an accident at a workplace on or after September 1, 2020, and the employee is certified by a registered medical practitioner or registered dentist to be unfit for work, or to require hospitalization or to be placed on light duties, on account of the accident, the employer shall submit a report to the Commissioner for Workplace Safety and Health of the accident within 10 days after the date the employer first has notice of the accident.

As employers in Singapore, our Singapore operating subsidiaries, HomesToLife Singapore and HTL FE, are required to adhere to the WSHIR reporting requirements in the situation where any accident at our Group’s office premises or workplace occurs which results in the injury or death of any employee.

As at the date of this annual report, our Group have not had any workplace accidents which would require it to adhere to the WSHIR reporting requirements.

Work Injury Compensation Act 2019 of Singapore (the “WICA”)

The WICA provides that if any employment personal injury by accident arises out of and in the course of the employment is caused to an employee, the employer shall be liable to pay compensation in accordance with the provisions of WICA. The amount of compensation under the WICA in respect of any personal injury of an employee caused by accident arising out of and in the course of his employment shall be computed in accordance with a fixed formula as set out in the First Schedule of the WICA, subject to a maximum and minimum limit.

Pursuant to Section 24(1) of WICA read with Regulation 3 and the Second Schedule of the Work Injury Compensation (Insurance) Regulations 2020, employers are required to maintain work injury compensation insurance for all employees doing manual work regardless of salary level and non-manual employees whose salary within the meaning of the Employment Act received from the employer falls below S$2,600 a month. Any employer who fails to insure himself in accordance with WICA shall be guilty of an offence and shall be liable to, on conviction, a fine not exceeding S$10,000 or to imprisonment for a term not exceeding 12 months or to both.

As at the date of this annual report, our Group has maintained the necessary insurance as required under the WICA and during the past three (3) years, one (1) of our employees have experienced a workplace injury that is subject to WICA jurisdiction.

Laws relating to Personal Data Protection

Personal Data Protection Act 2012 of Singapore (the “PDPA”)

The PDPA governs the collection, use and disclosure of the personal data of individuals (being data, whether true or not, about an individual, who can be identified from that data or other accessible information), and is administered and enforced by the regulator, the Personal Data Protection Commission (“PDPC”). The PDPA sets out data protection obligations which all organizations are required to comply with in undertaking activities relating to the collection, use or disclosure of personal data and to provide individuals with the right to access and correct their own personal data.

Organizations have mandatory obligations to assess data breaches they suffer, and to notify the PDPC and where applicable, the relevant individuals where the data breach is (or is likely to be) of a significant scale or resulting in (or is likely to result in) significant harm to individuals. Other obligations include accountability, protection, retention, and requirements around the overseas transfers of personal data.

Organizations are required to, among other things, (i) obtain consent from individuals and inform them of the applicable purposes before collecting, using or disclosing their personal data; and (ii) put in place reasonable measures to (a) protect the personal data in their possession or control from unauthorized access, loss or damage and (b) prevent the loss of any storage medium or device on which personal data is stored. In the event of a data breach involving any personal data in an organization’s possession or control, the PDPA requires the organization to reasonably and expeditiously assess whether the data breach is notifiable and notify the PDPC and, unless exceptions apply, the affected individuals of the data breach, if the data breach is assessed to be one that (a) is likely to result in significant harm or impact to the individuals to whom the information relates, or (b) is, or is likely to be, of a significant scale. Other obligations include accountability, retention and requirements around the overseas transfers of personal data.

In addition, the PDPA also established a Do-Not-Call Registry (“DNC Registry”) which allows individuals to register their Singapore telephone numbers in any of the three Do-Not-Call Registers (“DNC Register”) to opt out of receiving specified messages via voice call, specified text messages and specified fax messages. Under the PDPA, before an organisation sends a specified message to a Singapore telephone number, it must check with the DNC Registry to confirm that the number is not listed on the DNC Register, unless the personal has obtained clear and unambiguous consent in evidential form from the user or subscriber of the number.

Non-compliance with the PDPA may attract financial penalties or even criminal liability. The PDPC has broad powers to give any such directions as it thinks fit to ensure compliance, which include requiring an organization to pay a financial penalty. In this connection: (i) in the case of contravention of the parts of the PDPA which sets out the obligations of organizations relating to data protection (including the obligation to protect and care for personal data, and to conduct assessments of data breaches), the maximum financial penalty that may be imposed: (a) on an organization whose annual turnover in Singapore exceeds S$10 million is 10% of the organization’s annual turnover in Singapore, if the contravention occurs on or after October 1, 2022; and (b) in any other case is S$1 million; and (ii) in the case of contravention of the DNC requirements, the maximum financial penalty that may be imposed is S$1 million.

In the course of operating its business, our Company’s Singapore operating subsidiaries, HomesToLife Singapore and HTL FE, collects and uses personal data from consenting customers. HomesToLife Singapore and HTL FE have implemented various processes to safeguard the personal data collected from their customers, which include the appointment of a Data Protection Officer with an appropriate level of knowledge and specific responsibilities to ensure data protection within the Group, as well as providing data protection training to all employees of HomesToLife Singapore and HTL FE.

As at the date of this annual report, our Group believes that they are in compliance with all PDPA requirements.

Laws relating to Taxation

Goods and Services Tax Act 1993 of Singapore (the “GST Act”)

Goods and Services Tax (“GST”) is a broad-based consumption tax levied pursuant to the GST Act on the import of goods, as well as nearly all supplies of goods and services in Singapore. It is an indirect tax expressed as a percentage applied to the selling price of goods and services provided by GST registered entities in Singapore. The prevailing rate of GST is 9%. As GST is charged to the end consumer, the GST-registered entity does not generally incur any costs in relation to GST and merely collects taxes on behalf of the local tax authority.

A company is required to register for GST when the turnover of its business is more than S$1 million in the past 12 months, or is expected to exceed S$1 million in the next 12 months. If a company fails to make a correct return by omitting or understating any output tax or any other tax for which it is accountable, it will be guilty of an offence and on conviction be required to pay a penalty equal to the amount of tax which has been undercharged. Failure to make returns within the prescribed period under the GST Act will also expose a company to a penalty equal to 5% of the amount of tax payable.

GST exemptions apply to the provision of most financial services, the sale and lease of residential properties, and the importation and local supply of investment precious metals. Goods that are exported and international services are zero-rated.

Income Tax Act 1947 of Singapore (the “ITA”)

The corporate income tax (“CIT”) rate in Singapore is currently 17% of its chargeable income and applies to both local and foreign companies. In addition, 75% of up to the first S$10,000, and 50% of up to the next S$190,000, of a company’s chargeable income otherwise subject to normal taxation is exempt from corporate tax. The remaining chargeable income (after the tax exemption) will be fully taxable at the prevailing CIT. The Singapore Government announced in the Singapore Budget 2024 that in order to help companies manage rising costs, a CIT rebate (the “CIT Rebate”) of 50% of the corporate tax payable will be granted to all taxpaying companies, whether tax resident or not, for the year of assessment 2024. Additionally, companies that have employed at least one local employee in 2023 will receive S$2,000 in cash payout (the “CIT Rebate Cash Grant”). The maximum total benefits of CIT Rebate and CIT Rebate Cash Grant that a company may receive is S$40,000.

Payment of corporate tax must be made within one (1) month from the date of notice after which a 5% penalty can be imposed on the unpaid tax amount. If the amount of tax outstanding is not paid within 60 days of the imposition of the 5% penalty, an additional penalty of 1% of the tax outstanding shall be payable for each completed month that the tax remains unpaid, but the total additional penalty shall not exceed 12% of the amount of tax outstanding.

Laws relating to Anti-Money Laundering and Prevention of Terrorism Financing

Regulations on Anti-Money Laundering and Prevention of Terrorism Financing

The primary anti-money laundering legislation in Singapore is the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act 1992 of Singapore (the “CDSA”), which provides for the confiscation of benefits derived from, and to combat, corruption, drug dealing and other serious crimes. Generally, the CDSA criminalizes the concealment or transfer of the benefits of criminal conduct as well as the knowing assistance of the concealment, transfer or retention of such benefits. The CDSA permits the confiscation of benefits derived from, and to combat, corruption, drug dealing and other serious crimes.

The Terrorism (Suppression of Financing) Act 2002 of Singapore (the “TSOFA”), is the primary legislation for the combating of terrorism financing. The TSOFA criminalizes terrorism financing and prohibits any person in Singapore from dealing with or providing services to a terrorist entity, including those designated pursuant to the TSOFA. It was enacted to give effect to the International Convention for the Suppression of the Financing of Terrorism.

Besides criminalizing the laundering of proceeds derived from drug dealing and other serious crimes and terrorism financing, the CDSA and the TSOFA also require suspicious transaction reports to be lodged with the Suspicious Transaction Reporting Office, Singapore’s Financial Intelligence Unit within the Criminal Affairs Division of the Singapore Police Force. If any person fails to lodge the requisite reports under the CDSA and the TSOFA, it may be subject to criminal liability.

In addition, the TSOFA has extraterritorial reach, and any person outside Singapore who commits an act or omission that would constitute an offense under the TSOFA if committed in Singapore may be proceeded against, charged, tried and punished accordingly in Singapore.

As at the date of this annual report, our Company’s Singapore incorporated subsidiaries believes that it is in compliance with the provisions of the CDSA and the TSOFA.

Laws relating to Foreign Investment and Exchange Control

Singapore does not have an umbrella regime for regulating foreign investment. Instead, foreign investment is regulated (if at all) by sector. Singapore imposes no significant restrictions on the repatriation of earnings and capital, or on remittances, foreign exchange transactions and capital movements.

Laws relating to Intellectual Property

The Intellectual Property Office of Singapore administers the intellectual property legislative framework in Singapore, which includes copyrights, trademarks and patents. Singapore is a member of the main international conventions regulating intellectual property matters, and the World Trade Organization’s Agreement on Trade Related Aspects of Intellectual Property Rights.

Trade Marks Act 1998 of Singapore (the “TMA”)

Singapore operates a first-to-file system in respect of registered trademarks under the TMA, and the registered proprietor is granted a statutory monopoly of the trademark in Singapore in relation to the product or service for which it is registered. In the event of any trademark infringement, the registered proprietor will be able to rely on the registered trademark as proof of his right to the mark, and the infringement of a trademark may give rise to civil and criminal liabilities. Statutory protection of a registered trademark can last indefinitely, as long as the registration is renewed every 10 years. Unregistered trademarks are also protected under the common law of passing off, provided that the owner is able to prove that there is goodwill or reputation in the mark; misrepresentation on the part of the infringer; and damage to the mark as a result.

Under the TMA, it is unlawful to import goods into Singapore with falsely applied trade marks. Failure to comply may result in fines of up to an aggregate of S$100,000, and/or imprisonment for a term not exceeding five (5) years. In addition, the forfeiture and/or destruction of the infringing items may be ordered.

C. Organizational Structure

See “—A. History and Development of the Company.”

D. Property, Plants and Equipment

See “—B. Business Overview.”

Item 4A. UNRESOLVED STAFF COMMENTS

Not applicable.

Item 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS

You should read the following discussion and analysis of the Company’s financial condition and results of operations in conjunction with the Company’s consolidated and combined financial statements and the related notes included elsewhere in this annual report. This discussion may contain forward-looking statements based upon current expectations that involve risks and uncertainties. The Company’s actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Item 3. Key Information — 3.D. Risk Factors” or in other parts of this annual report.

Overview

HomesToLife Ltd is an exempted company with limited liability incorporated under the laws of Cayman Islands (“we,” “us,” “our,” “HomesToLife Cayman,” or the “Company”). Our major operating company, HomesToLife Pte. Ltd. (“HomesToLife Singapore”), is one of the leading home furniture retailers that offers and sells customized furniture solutions in Singapore under the brand of “HomesToLife”. Currently, we have six retail store locations, and among furniture companies that sell furniture manufactured from China and other Asian countries, HomesToLife Singapore is one of the largest in Singapore by the number of retail store locations. It has helped homeowners create living spaces that reflect their individuality since 2014. Its product offerings include leather and fabric upholstered furniture, case goods and accessories, and offers a one-stop shop for retail customers to furnish their homes. HomesToLife Singapore offers and sells selected our products and brands of luxury contemporary furniture in Singapore, as well as products supplied by trusted third party suppliers. In the fiscal years ended December 31, 2024, 2023 and 2022, pursuant to a 20-year exclusive Products Supply Agreement, with the exclusive period commencing from January 4, 2021, HomesToLife Singapore has with HTL Marketing Pte. Ltd. (“HTL Marketing”), a company of HTL Group (collectively all of the entities controlled or owned by our controlling shareholders and Chairman/Vice Chairman, Messrs. Phua Yong Pin and Phua Yong Tat), it secured a long-term and reliable supply of leather and fabric upholstered furniture from partners within the HTL Group in different parts of China, and was able to offer its customers a wide selection of design, leather and fabric materials, configuration and function of sofas.

Another subsidiary, HTL FE, is dedicated to sourcing, distributing, and delivering premium furniture and related products to both consumer and business sectors across the Asia-Pacific region.

Initial Public Offering (“IPO”)

On October 2, 2024, we consummated our IPO of an aggregate of 1,437,500 ordinary shares at a price of US$4.00 per share to the public, including 187,500 shares sold upon full exercise of the underwriter’s option to purchase additional shares, for a total of US$5.75 million of gross proceeds, before deducting underwriting discounts and estimated offering expenses.

The shares began trading on the NASDAQ Stock Market LLC under the symbol “HTLM” on October 1, 2024.

Recent Developments

We aim to target the premium mass market by providing customers high-quality luxury products with affordable, reliable and customizable options, we also reserve and dedicate an exclusive space in our retail stores in Singapore for the marketing and selling of furniture under our “Domicil” brand and “Fabbrica” brand, two European furniture brands offering premium and luxury products that are designed by top designers from around the world and targeted at the middle and upper class consumer markets.

On October 28, 2024, we formed a new subsidiary, HTL FE, in Singapore, to operate a wholesale business in the Asia Pacific market. This subsidiary focuses on trading leather and fabric upholstered furniture, further expanding our regional presence and strengthening our business capabilities.

HTL FE received sales orders exceeding US$1.5 million in January 2025 and it is expected to generate the estimated annual revenue ranging from US$12.0 million to US$14.0 million during 2025, driven by an accelerating sales ramp-up in response to strong demand.

A. Operating Results

KEY FACTORS THAT AFFECT OPERATING RESULTS

Our operating results are primarily affected by the following factors:

RESULTS OF OPERATIONS

The following table sets forth a summary of our consolidated results of operations for the periods indicated. This information should be read together with our consolidated/combined financial statements and related notes included elsewhere in this Report. The operating results in any period are not necessarily indicative of the results that may be expected for any future period.