As filed with the Securities and Exchange Commission on February 22, 2024
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM F-1
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
Mobile-health Network Solutions
(Exact name of Registrant as specified in its charter)
Not Applicable
(Translation of Registrant’s name into English)
Cayman Islands | 7372 | Not Applicable | ||
(State or other jurisdiction of incorporation or organization) |
(Primary Standard Industrial Classification Code Number) |
(I.R.S. Employer Identification Number) |
2 Venture Drive, #07-06/07 Vision Exchange
Singapore 608526
+65 6222 5223
(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)
Cogency Global Inc.
122 East 42nd Street, 18th Floor
New York, NY 10168
(Name, address, including zip code, and telephone number, including area code, of agent for service)
copies to:
Meng Ding, Esq. Sidley Austin c/o 39/F, Two Int’l Finance Centre 8 Finance St, Central, Hong Kong +852 2509-7888 |
Lawrence Venick, Esq. David J. Levine, Esq. Loeb & Loeb LLP 345 Park Avenue New York, NY 10154 +1 212 407-4000 |
Approximate date of commencement of proposed sale to the public: as soon as practicable after the effective date of this registration statement.
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. ☒
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933. Emerging growth company ☒
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐
† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.
The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to such Section 8(a), may determine.
EXPLANATORY NOTE
This registration statement on Form F-1 (the “Registration Statement”) contains two prospectuses, as set forth below.
● | Public offering prospectus. A prospectus to be used for the public offering of 2,250,000 Class A Ordinary Shares, par value US$0.000004 per share of the Registrant (the “Public Offering Prospectus”) through the underwriter named on the cover page of the Public Offering Prospectus. |
● | Resale prospectus. A prospectus to be used for the resale by the selling shareholders of 3,091,667 Class A Ordinary Shares of the Registrant (the “Resale Prospectus”). |
The Resale Prospectus is substantively identical to the Public Offering Prospectus, except for the following principal points:
● | They contain different outside and inside front covers and back covers; |
● | They contain different Offering sections; |
● | They contain different Use of Proceeds sections; |
● | A Selling Shareholder section is included in the Resale Prospectus; |
● | The Underwriting section from the Public Offering Prospectus is deleted from the Resale Prospectus and a Selling Shareholders Plan of Distribution section is included in the Resale Prospectus; and |
● | The Legal Matters section in the Resale Prospectus on page ALT-3 deletes the reference to counsel for the underwriter, among others. |
The Registrant has included in this Registration Statement a set of alternate pages after the back-cover page of the Public Offering Prospectus (the “Alternate Pages”) to reflect the foregoing differences in the Resale Prospectus as compared to the Public Offering Prospectus. The Public Offering Prospectus will exclude the Alternate Pages and will be used for the public offering by the Registrant. The Resale Prospectus will be substantively identical to the Public Offering Prospectus except for the addition or substitution of the Alternate Pages and will be used for the resale offering by the Selling Shareholders.
The information in this preliminary prospectus is not complete and may be changed. The securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell nor does it seek an offer to buy the securities in any jurisdiction where such offer or sale is not permitted.
Preliminary Prospectus (Subject to Completion)
Dated , 2024
Mobile-health Network Solutions
2,250,000 Class A Ordinary Shares being offered by Mobile-health Network Solutions
3,091,667 Class A Ordinary Shares being sold by the Selling Shareholders
This is the initial public offering of Class A Ordinary Shares, by Mobile-health Network Solutions. We are offering 2,250,000 Class A Ordinary Shares, par value US$0.000004 per share, and the registration of an additional 3,091,667 Class A Ordinary Shares held by the Selling Shareholders.
Prior to this offering, there has been no public market for our Class A Ordinary Shares. We anticipate the initial public offering price of our Class A Ordinary Shares will be between US$4.00 and US$5.00. We have applied to list our Class A Ordinary Shares on the Nasdaq Capital Market under the symbol “MNDR.” Of the total securities being offered under this prospectus, we are offering 2,250,000 Class A Ordinary Shares, and the selling shareholders named in the section entitled “Selling Shareholders” in this prospectus (the “Selling Shareholders”) are offering 3,091,667 Class A Ordinary Shares. No shares offered by the Selling Shareholders will be sold until after our Class A Ordinary Shares have begun trading on the NASDAQ Capital Market. The underwriter is not underwriting the shares of the Selling Shareholders. Any sales will occur from time to time at prevailing market prices or in privately negotiated prices. The distribution of securities offered hereby may be effected in one or more transactions that may take place in ordinary brokers’ transactions, privately negotiated transactions or through sales to one or more dealers for resale of such securities as principals. Usual and customary or specifically negotiated brokerage fees or commissions may be paid by the Selling Shareholders. Neither we nor the underwriter will receive any proceeds from the sales of any of the Class A ordinary shares being offered by the Selling Shareholders.
We are both an “emerging growth company” and a “foreign private issuer” as defined under the applicable U.S. federal securities laws and, as such, may elect to comply with certain reduced public company reporting requirements for this and future filings. See “Prospectus Summary—Implications of Being an Emerging Growth Company” and “Prospectus Summary—Implications of Being a Foreign Private Issuer.”
Immediately prior to the completion of this offering, our issued and outstanding share capital will consist of Class A Ordinary Shares and Class B Ordinary Shares. Siaw Tun Mine, Denis Christopher Nyam Ngian Kwong, Siaw Tung Yeng, and Teoh Pui Pui beneficially own all of our then issued and outstanding Class B Ordinary Shares. These Class B Ordinary Shares will constitute approximately 35.5% of our total issued and outstanding share capital immediately after the completion of this offering and approximately 84.6% of the aggregate voting power of our total issued and outstanding share capital immediately after the completion of this offering, assuming that the underwriter does not exercise their option to purchase additional Class A Ordinary Shares. Holders of Class A Ordinary Shares and Class B Ordinary Shares have the same rights except for voting and conversion rights. Each holder of our Class A Ordinary Share is entitled to one vote per share. Each holder of our Class B Ordinary Share is entitled to 10 votes per share. Our Class A Ordinary Shares and Class B Ordinary Shares vote together as a single class on all matters submitted to a vote of our shareholders, except as may otherwise be required by law. Our Class B Ordinary Shares are convertible at any time into Class A Ordinary Shares on a one-for-one basis by the holder thereof. Class A Ordinary Shares are not convertible into Class B Ordinary Shares under any circumstances. Upon any transfer of Class B Ordinary Shares by a holder thereof or a change of ultimate beneficial ownership of any Class B Ordinary Shares to any person other than an affiliate of such person or a beneficial owner of Class B Ordinary Shares, such Class B Ordinary Shares are automatically and immediately converted into the same number of Class A Ordinary Shares.
Investing in the Class A Ordinary Shares involves a high degree of risk. See “Risk Factors” beginning on page 11.
Neither the Securities and Exchange Commission nor any other regulatory body has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.
PRICE US$ PER CLASS A ORDINARY SHARE
Price to Public | Underwriting Discounts and Commissions(1) | Proceeds, before Expenses | ||||||||||
Per Share | US$ | US$ | US$ | |||||||||
Total | US$ | US$ | US$ |
(1) | For a description of compensation payable to the underwriter, see “Underwriting.” |
The underwriter has an option to purchase up to 337,500 additional Class A Ordinary Shares from us at the initial public offering price, less the underwriting discounts and commissions, within 45 days from the date of closing of this offering, to cover any over-allotments.
The underwriter expects to deliver the Class A Ordinary Shares against payment in U.S. dollars in New York, NY to purchasers on or about , 2024.
Network 1 Financial Securities, Inc.
The date of this prospectus is , 2024
TABLE OF CONTENTS
This prospectus contains certain estimates and information concerning our industry, including market position, market size, and growth rates of the markets in which we participate. This information involves a number of assumptions and limitations, and you are cautioned not to give undue weight to these estimates. We have not independently verified the accuracy or completeness of the data contained in these industry publications and reports. The industry in which we operate is subject to a high degree of uncertainty and risk due to a variety of factors, including those described in the “Risk Factors” section. These and other factors could cause results to differ materially from those expressed in these publications and reports.
You should rely only on the information contained in this prospectus or in any related free-writing prospectus. We have not authorized anyone to provide you with information different from that contained in this prospectus or in any related free-writing prospectus. We are offering to sell, and seeking offers to buy, the Class A Ordinary Shares offered hereby, but only under circumstances and in jurisdictions where offers and sales are permitted and lawful to do so. The information contained in this prospectus is current only as of the date of this prospectus, regardless of the time of delivery of this prospectus or of any sale of the Class A Ordinary Shares.
Neither we nor the underwriter have taken any action that would permit a public offering of the Class A Ordinary Shares outside the United States or permit the possession or distribution of this prospectus or any related free-writing prospectus outside the United States. Persons outside the United States who come into possession of this prospectus or any related free-writing prospectus must inform themselves about and observe any restrictions relating to the offering of the Class A Ordinary Shares and the distribution of the prospectus outside the United States.
Until , 2024 (the 25th day after the date of this prospectus), all dealers that buy, sell or trade Class A Ordinary Shares, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the obligation of dealers to deliver a prospectus when acting as underwriter and with respect to their unsold allotments or subscriptions.
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The following summary is qualified in its entirety by, and should be read in conjunction with, the more detailed information and financial statements and notes appearing elsewhere in this prospectus. In addition to this summary, we urge you to read the entire prospectus carefully, especially the risks of investing in the Class A Ordinary Shares discussed under “Risk Factors,” before deciding whether to buy the Class A Ordinary Shares. This prospectus contains information from a report that was commissioned by us and prepared by Frost & Sullivan, an independent market research firm, to provide information regarding our industry and our market position.
Our Mission
To be our users’ trusted companion on their lifelong healthcare journey by providing a seamless healthcare experience from start to finish, which is affordable, accessible and easy to understand to both users and healthcare providers.
Our Business
We have set up one of the smartest integrated all-in-one patient care-centric platforms in the region to deliver affordable care to users. We are a leading telehealth solutions provider in Singapore in terms of the number of countries covered by our MaNaDr platform, including countries in the APAC region.
We are a leading telehealth solutions provider in Singapore in terms of various matrices, such as the number of patient consultations per day and the ranking of our mobile application, according to Frost & Sullivan. According to Frost & Sullivan, we have the largest number of teleconsultations per day in the six months ending May 2023, and are amongst the fastest-growing telehealth solutions providers in Singapore. Our MaNaDr mobile application has received a 4.8 and 4.9 star rating on the Apple App Store and Google Play Store in Singapore respectively as of June 14, 2023. According to Frost & Sullivan, on a combined basis, MaNaDr was the most reviewed and highest rated mobile application in Singapore as of June 14, 2023 and has the largest number of teleconsultations per day in the six months ending May 2023.
We provide our services on our MaNaDr platform, which is accessible via our mobile application and website. We serve both the community of users, by offering personalized and reliable medical attention to users worldwide, as well as the community of healthcare providers, by allowing them to have a broader reach to users through virtual clinics without any start-up costs and the ability to connect to a global network of peer-to-peer support groups and partners. Through our mobile application, we offer users with a range of seamless and hassle-free telehealth solutions, which encompasses teleconsultation services, including the issuance of electronic medical certificates and delivery of medications to users’ homes, as well as other personalized services such as weight management programs. Furthermore, we have set up one of the smartest 24/7 virtual care ecosystems and support groups to help users navigate the complexities faced in receiving correct and timely care, according to Frost & Sullivan. With MaNaChat, the 24/7 customer support service, we operate Singapore’s only in-app live group chat service and have one of the fastest response times in Singapore and globally to support users.
We have developed our business with the aim of addressing each of these global healthcare concerns and issues, and this problem-solving approach is one of our Group’s key unique features and competitive strengths:
● | Inequalities in healthcare: We have set up one of the smartest integrated all-in-one patient care-centric platforms in the region to deliver affordable care to users. According to Frost & Sullivan, as at May 31, 2023, we offered the most affordable care to nearly 100,000 teleconsultation activities per month through our MaNaDr platform and we continue to strive to deliver quality, timely and seamless care. |
● | Inaccessibility in healthcare: To alleviate inaccessibility in healthcare encountered, we have capitalized on the ubiquity of mobile technology and the rise in social platforms to set up MaNaForum, which is a social forum with multimedia capabilities within our MaNaDr mobile application, to empower our users and providers from all around the world to share and transmit information on medical conditions, interact with one another freely and ask questions at no charge. The MaNaForum is supported by doctors, healthcare professionals and other key players in the healthcare sector such as dieticians and gym instructors. |
● | Complexities in obtaining correct healthcare in a timely manner: To break down and simplify the complexities in healthcare faced by users, we seek to provide simplified care. This is achieved by breaking down barriers in time, place, and space with the setting up of one of the smartest 24/7 virtual care ecosystems and support groups to help users navigate the complexities faced in receiving correct and timely care. |
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● | Confusion due to the wide range of healthcare products and services available: With the volume of healthcare products and services available on the market, users often face difficulties in finding the products and services they need, which could result in confusion and adverse outcomes. To address this, we have set up a web store, MaNaShop/MaNaStore, containing more than 2,000 curated products and services from reliable suppliers and service providers worldwide, so as to deliver quality trusted products to users at affordable prices. We offer targeted products which meet our quality standards for our users across different genders and age brackets to address their specific healthcare and wellness needs. |
● | Global healthcare burden of obesity and chronic diseases: To alleviate chronic healthcare conditions, we have identified the needs of users and developed a 360-degree healthcare ecosystem offering holistic, comprehensive, continuing and long-term preventive and pre-emptive care centered around such needs. The ecosystem is supported by a community of healthcare providers, patient support groups, healthcare coordinators, pharmaceutical companies and paramedical service providers whom we partner with. |
Our Main Business Activities
Our MaNaDr platform is a 360-degree healthcare ecosystem which connects users and service providers through the range of healthcare services and product offerings that can be accessed through our mobile application and website:
The platform primarily encompasses the following components:
● | MaNaDr Mobile Application: Our MaNaDr mobile application is an avenue for us to provide timely, curated and personalized care to our users. It primarily involves the provision of teleconsultation services via online video consultation, which allows users to chat in real-time with, and send photos or videos to, doctors online, as well as hospital and/or clinic referral and appointment and inpatient arrangement by our in-house medical team and doctors from our network of clinic service providers. |
● | MaNaDr Clinic – Primary healthcare services via our brick-and-mortar clinic: We have one GP clinic in Singapore which offers a comprehensive range of primary healthcare services. We also derive revenue from collecting transaction fees for appointments, issuing electronic medical certificates, laboratory review fees and memorandum fees. The clinic also serves as our Innovative Hub where we pioneer various models of care such as gender-affirming service and aesthetic care. |
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● | MaNaPharma – B2B sales to clinics and other healthcare service providers: We procure pharmaceutical products and medical devices, as well as engage in the wholesale distribution of pharmaceutical products to clinics in Singapore. |
● | MaNaShop/MaNaStore – B2C sales of products and services to users: We offer a diversified and evolving range of products to users on the MaNaShop/MaNaStore online e-commerce platform (via both the website and mobile application), including healthcare products (such as medicines, health supplements, skincare, nutrition products and medical devices) and wellness products (such as personal care products and health screening packages). |
● | MaNaCare – Corporate healthcare and wellness services, which is focused on corporate customers: We provide comprehensive corporate healthcare and wellness services, ranging from GP, specialist and allied healthcare panel services to tele-consultation, in-person clinics, on-site health screening, online marketplace and wellness programs. |
Collectively, we believe that our holistic ecosystem enhances the utilization efficiency of medical and healthcare resources, while providing a positive user experience.
Our Market Opportunities
Emerging as an evolved model of telehealth, the integrated smart health-tech service market overcomes the limitations of traditional telehealth approaches. This market encompasses a wide range of offerings, including convenient online consultations, walk-in clinics, chronic disease management, online retail pharmacies, health knowledge forums, enterprise telehealth services, as well as wholesale services for pharmaceutical and healthcare products. It represents a more advanced and holistic approach as compared to traditional telehealth methods.
Smart health-tech service market players in Singapore can be divided into three types. The first type of players are tech-first doctor-led healthcare delivery innovators. The second type of players are brick & mortar hospitals/clinic chain operators. The third type of players are generally entities or individuals outside the medical industry. The growth drivers of the smart health-tech service market include the following:
● | online and offline integrated fulfillment in one network; | |
● | increasing prevalence of chronic disease; | |
● | growing population and service needs of aging population; | |
● | growing health awareness; | |
● | technology updates and service improvement; and | |
● | wide coverage of the internet and high popularity of smartphones. |
We expect that the future trends of the smart health-tech service market will focus on: (1) integration of online retail pharmacy and healthcare services: (2) building a user-centered ecosystem; (3) customized and intelligent telehealth solutions; (4) specialized chronic disease management; and (5) better user experience empowered by advanced technology.
Our Strengths
We are well-positioned to achieve our strategic goals through several key business strengths, including the following:
Leading position in Singapore’s rapidly growing telehealth solutions industry
We are a leading telehealth solutions provider in Singapore, in terms of various matrices, according to Frost & Sullivan. According to Frost & Sullivan, we had the largest number of teleconsultations per day in the six months ending May 2023, and are amongst the fastest-growing telehealth solutions providers in Singapore. Our MaNaDr mobile application has received a 4.8 and 4.9 star rating on the Apple App Store and Google Play Store in Singapore respectively as of June 14, 2023. According to Frost & Sullivan, on a combined basis, MaNaDr was the most reviewed and highest rated mobile application in Singapore as of June 14, 2023 and had the largest number of teleconsultations per day in the six months ending May 2023.
As at October 31, 2023, we had recorded more than 1 million registered users on our MaNaDr platform.
Multi-faceted business model that offers a one-stop portal connecting our users with both online and offline healthcare resources
Our multi-faceted business model positions us as a one-stop portal to the healthcare ecosystem, connecting users to online and offline healthcare resources. We offer a comprehensive suite of medical-related and other services including teleconsultations and health check-up services, vaccinations, skin and aesthetics services and other services on our MaNaDr platform and at the MaNaDr Clinic.
Innovative technological solutions empowered by an experienced in-house medical team
We have digitalized all of our core operations, building a full suite of digital operations systems solutions to ensure end-to-end quality control. In addition, we offer 24/7 quality teleconsultation services with minimal waiting time through our self-developed mobile application, which also allows optimizing of delivery routes by matching the closest clinic from our network of service providers to the user, such that the prescription submitted by the doctor following the teleconsultation will be quickly fulfilled by the dispatch and home delivery of the medications.
See the section entitled “Business” for more details on our strengths.
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Our Strategies
We will adopt and implement the following strategies to build upon our strengths and expand the outreach of our business:
Expand our user base and systematically enhance our user engagement, including through technological tools, to strengthen our market position
We plan to continue to expand our user base through natural traffic, external marketing and promotional activities. Expansion through external marketing will be achieved by the acquisition of new users through mobile application stores, as well as online and offline marketing activities.
Expand our service and product offerings to cover the healthcare value chain
We intend to further improve user stickiness through expanding service offerings to serve differentiated user needs on our platform and improving the quality of the products and services offered on our MaNaDr platform, and offer a broader range of healthcare services and products along the healthcare value chain.
Selectively pursue strategic partnerships, investments and acquisitions to expand and scale up our affordable and high-quality platform beyond Singapore to other countries in the APAC region
We intend to continue to grow our user base, expand our service offerings, enhance our technological leadership, and optimize our ecosystem through selected partnerships, investments, and acquisitions covering our comprehensive medical and wellness service offerings. Additionally, we plan to expand our reach to other countries in the APAC region, through strategic partnerships, investments, mergers and acquisitions.
See the section entitled “Business” for more details on these strategies.
Risk Factors
Investing in our Class A Ordinary Shares involves risks. The risks summarized below are qualified by reference to the section entitled “Risk Factors”, which you should carefully consider before deciding to purchase our Class A Ordinary Shares. If any of these risks actually occurs, our business, financial condition, or results of operations would likely be materially and adversely affected. In such cases, the trading price of our Class A Ordinary Shares would likely decline, and you may lose all or part of your investment.
We believe some of the major risks and uncertainties that may materially and adversely affect us include the following:
Risks Related to Our Business and Industry
● | Maintaining users’ trust is critical to our success, and any failure to do so could severely damage our reputation and brand; | |
● | We may not be able to manage the growth of our business and operations or implement our business strategies on schedule or within our budget, or at all; | |
● | If we fail to effectively estimate, price and manage our costs, or if our fees and charges are regulated, prescribed or otherwise required to be reduced, the profitability of our Group could decline; | |
● | If our healthcare solutions do not drive users’ engagement or if we fail to provide superior user experience, our business and reputation may be materially and adversely affected; | |
● | We may not be able to develop our existing technology infrastructure or recoup the investments we have made for such development, and failure to continue to innovate or adapt to industry changes may materially and adversely affect our business, financial condition, results of operations and prospects; | |
● | Our self-developed technologies are complex and may contain undetected errors or may not operate properly, which could adversely affect our business, financial condition, results of operations and prospects; |
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● | Our failure to properly manage participants and stakeholders in our MaNaDr ecosystem may materially and adversely affect our business; | |
● | We have limited or no control over our suppliers and the quality of products supplied to us and if such products are not manufactured in accordance with the applicable quality standards, our business and reputation could be materially and adversely affected; | |
● | Product liability claims in respect of defective products sold to our customers in our pharmaceutical business could adversely affect our reputation and our financial prospects; | |
● | Any lack of requisite approvals, licenses or permits applicable to our business may have a material and adverse effect on our business, financial condition, results of operations and prospects; | |
● | Our failure to properly manage the registration of our in-house doctors may materially and adversely affect our business; | |
● | Our failure to maintain optimal inventory levels and the risk of inventory obsolescence could increase our operating costs or lead to unfulfilled customer orders, either of which could have a material and adverse effect on our business, financial condition, results of operations and prospects; | |
● | We may be adversely affected by negative publicity, litigation and regulatory investigations and proceedings, and may not always be successful in defending ourselves against such claims or proceedings; | |
● | Security breaches and attacks against our systems and network, and any potential resultant breach or failure to otherwise protect confidential and proprietary information, and network disruptions in general could damage our reputation and adversely affect our business, financial condition, results of operations and prospects; | |
● | Our business generates and processes a large amount of data, and the improper use or disclosure of such data could harm our reputation as well as have a material adverse effect on our business and prospects; | |
● | We may not have sufficient insurance coverage to cover our business risks and face the risk of becoming subject to medical liability claims, which could cause us to incur significant expenses and be liable for significant damages if not covered by insurance; | |
● | We may not be able to prevent others from unauthorized use of our intellectual property, which could harm our business and competitive position; | |
● | We may be subject to intellectual property infringement claims, which may be expensive to defend and may disrupt our business and operations; | |
● | User growth and activity depend upon effective use of operating systems, networks and standards that we do not control; | |
● | A limited number of customers have accounted for, and are expected to continue to account for, a significant portion of our revenues. The failure to maintain or to increase revenues from these customers could adversely affect our prospects; | |
● | We may not be able to conduct our marketing activities cost-effectively and we are subject to limitations in promoting our business; | |
● | We are subject to limitations in promoting healthcare-related services and products; | |
● | If we fail to maintain adequate internal controls, we may not be able to effectively manage our business and may experience errors or information lapses affecting our business; | |
● | Our performance depends on key management as well as skilled and qualified medical professional and support staff generally, and any failure to attract, motivate and retain such medical professionals and our support staff could hinder our ability to maintain and grow our business; | |
● | We may not be able to detect or prevent fraud or other misconduct committed by our employees or third parties; | |
● | We rely on assumptions and estimates to calculate certain key operating metrics, and inaccuracies in such metrics may harm our reputation and adversely affect our business; | |
● | We may need additional capital but may not be able to obtain such on favorable terms or at all; | |
● | Our strategic alliances, investments or acquisitions may have a material adverse effect on our business, financial condition, results of operations and prospects; | |
● | We are subject to credit risk with respect to trade receivables; | |
● | We face risks relating to the political, economic, regulatory, social and legal environments in the jurisdictions in which we currently or may in the future operate; | |
● | COVID-19 or any other infectious and communicable diseases, as well as the occurrence of any acts of God, war, terrorist attacks and other catastrophic events may have a material adverse effect on our business, financial condition, results of operations and prospects; and | |
● | Fluctuations in exchange rates could have a material and adverse effect on our results of operations. |
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Risks Related to Doing Business in Vietnam
● | Geopolitical risks may have an adverse impact on our business, financial condition and results of operations; | |
● | The economy in Vietnam may be subject to periods of high inflation which could materially and adversely affect our business, financial condition and results of operations as well as our growth prospects; | |
● | Changes in the economic, political and legal environment of Vietnam, and Vietnam’s less developed legal system, may adversely affect our business, financial condition and results of operations; | |
● | Asset realization in bankruptcy proceedings may be time-consuming and expensive; | |
● | Vietnamese foreign exchange control may limit our ability to utilize our revenue effectively and affect our ability to receive dividends and other payments from our Vietnamese subsidiary; and | |
● | The VND may be subject to foreign exchange controls imposed by the Vietnamese government. |
Risks related to Regulations and Litigations
● | We are subject to extensive and evolving regulatory requirements, non-compliance with which, or changes in which, may materially and adversely affect our business and prospects; | |
● | As we expand our international operations, we will increasingly face political, legal and compliance, operational, regulatory, economic and other risks that we do not face or are more significant than in our domestic operations. Our exposure to these risks is expected to increase; | |
● | We are subject to evolving laws, regulations, standards and policies, and any actual or perceived failure to comply could harm our brand and reputation, subject us to significant fines and liability, or otherwise adversely affect our business; and | |
● | We may be involved in certain legal proceedings from time to time. Any adverse decision in such proceedings may render us liable to liabilities and may adversely affect our business, financial condition, results of operations and prospects. |
Risks Related to Our Class A Ordinary Shares and this Offering
● | There has been no public market for our Class A Ordinary Shares prior to the completion of this offering, and you may not be able to resell our Class A Ordinary Shares at or above the price you pay for them, or at all; | |
● | The validity of certain issuances and transfers of shares of our Company cannot be verified; | |
● | The initial public offering price for our Class A Ordinary Shares may not be indicative of prices that will prevail in the trading market and such market prices may be volatile; | |
● | You will experience immediate and substantial dilution in the net tangible book value of Class A Ordinary Shares purchased; | |
● | If we fail to implement and maintain an effective system of internal controls, we may be unable to accurately or timely report our results of operations or prevent fraud, and investor confidence and the market price of our Class A Ordinary Shares may be materially and adversely affected; | |
● | We are an “emerging growth company” within the meaning of the Securities Act, and may take advantage of certain reduced reporting requirements; | |
● | We will incur substantial increased costs as a result of being a public company; | |
● | Substantial future sales of our Class A Ordinary Shares or the anticipation of future sales of our Class A Ordinary Shares in the public market could cause the price of our Class A Ordinary Shares to decline; | |
● | We do not intend to pay dividends for the foreseeable future; | |
● | If securities or industry analysts do not publish research or reports about our business, or if they publish a negative report regarding our Class A Ordinary Shares, the price of our Class A Ordinary Shares and trading volume could decline; | |
● | The trading price of our Class A Ordinary Shares may be volatile or may decline regardless of our operating performance, which could result in substantial losses to investors; | |
● | Our dual-class voting structure will limit your ability to influence corporate matters and could discourage others from pursuing any change of control transactions that holders of our Class A Ordinary Shares may view as beneficial; | |
● | Our management has broad discretion to determine how to use the funds raised in the offering and may use them in ways that may not enhance our results of operations or the price of our Class A Ordinary Shares; | |
● | If we cease to qualify as a foreign private issuer, we would be required to comply fully with the reporting requirements of the Exchange Act applicable to U.S. domestic issuers, and we would incur significant additional legal, accounting and other expenses that we would not incur as a foreign private issuer; | |
● | As we are a foreign private issuer and are exempt from certain Nasdaq corporate governance standards applicable to U.S. issuers, you will have less protection than you would have if we were a domestic issuer; | |
● | Although as a foreign private issuer we are exempt from certain corporate governance standards applicable to U.S. issuers, if we cannot satisfy, or continue to satisfy, the initial listing requirements and other rules of the Nasdaq Capital Market, our securities may not be listed or may be delisted, which could negatively impact the price of our securities and your ability to sell them; | |
● | Our Board may decline to register transfers of Class A Ordinary Shares in certain circumstances; |
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● | You may be unable to present proposals before annual general meetings or extraordinary general meetings not called by shareholders; | |
● | If we are classified as a passive foreign investment company, U.S. taxpayers who own our Class A Ordinary Shares may have adverse U.S. federal income tax consequences; | |
● | Our shareholders may be held liable for claims by third parties against us to the extent of distributions received by them upon redemption of their shares; and | |
● | You may face difficulties in protecting your interests as a shareholder, as Cayman Islands law provides substantially less protection when compared to the laws of the U.S. and it may be difficult for a shareholder of ours to effect service of process or to enforce judgements obtained in the U.S. courts. |
In addition, we face risks and uncertainties related to our compliance with applicable regulations and policies in our principal markets and operations. See “Risk Factors” and other information included in this prospectus for a detailed discussion of the above and other challenges and risks.
Corporate History and Structure
Our Group’s history began in 2016 when we were founded by Dr. Siaw Tung Yeng and Dr. Teoh Pui Pui along with a group of doctors in Singapore with considerable experience in healthcare, government policy and IT. We launched our MaNaDr mobile application in October 2016 and our website in January 2019. We have achieved a global reach on our mobile application and website and as at September 2023, we had active users from more than 18 various jurisdictions across the world, including Singapore, Vietnam, Malaysia, Australia, India and the Philippines. As at October 31, 2023, we had onboarded more than 700 Singapore clinics and more than 1,500 medical professionals comprising GPs, specialized and allied health providers. We have also recorded more than 120,000 teleconsultation requests in October 2023 and as at October 31, 2023, have completed more than 1,600,000 tele-consultation requests since our inception in 2016. As at October 31, 2023, we had more than 1 million registered users on our MaNaDr platform, having grown from a handful of registered users since our inception in 2016.
Our Company was incorporated in the Cayman Islands on July 28, 2016, under the Companies Act as an exempted company with limited liability. Our authorized share capital is US$50,000 divided into 6,250,000,000 Class A Ordinary Shares and 6,250,000,000 Class B Ordinary Shares, with par value of US$0.000004 each. Our Company is the holding company of our Group.
Corporate Information
Our principal executive offices are located at 2 Venture Drive, #07-06/07 Vision Exchange, Singapore 608526. Our telephone number at this address is +65 6222 5223. Our registered office in the Cayman Islands is located at Harneys Fiduciary (Cayman) Limited, 4th Floor, Harbour Place, 103 South Church Street, PO Box 10240, Grand Cayman, KY1-1002, Cayman Islands. Our agent for service of process in the United States is Cogency Global Inc., located at 122 East 42nd Street, 18th Floor, New York, NY 10168.
Investors should contact us for any inquiries through the address and telephone number of our principal executive offices. Our corporate website is https://manadr.com/. The information contained on our website is not a part of this prospectus.
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Corporate Structure
The following diagram illustrates our corporate structure, including our principal subsidiaries:
Implications of Being an Emerging Growth Company
As a company with less than US$1.235 billion in revenue for our last fiscal year, we qualify as an “emerging growth company” pursuant to the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. An emerging growth company may take advantage of specified reduced reporting and other requirements compared to those that are otherwise applicable generally to public companies. These provisions include exemption from the auditor attestation requirement under Section 404 of the Sarbanes-Oxley Act of 2002 in the assessment of the emerging growth company’s internal control over financial reporting. The JOBS Act also provides that an emerging growth company does not need to comply with any new or revised financial accounting standards until such date that a private company is otherwise required to comply with such new or revised accounting standards.
We will remain an emerging growth company until the earliest of (a) the last day of the fiscal year during which we have total annual gross revenue of at least US$1.235 billion; (b) the last day of our fiscal year following the fifth anniversary of the completion of this offering; (c) the date on which we have, during the preceding three-year period, issued more than US$1.0 billion in non-convertible debt; or (d) the date on which we are deemed to be a “large accelerated filer” under the Exchange Act, which would occur if the market value of the Class A Ordinary Shares that are held by non-affiliates exceeds US$700 million as of the last business day of our most recently completed second fiscal quarter. Once we cease to be an emerging growth company, we will not be entitled to the exemptions provided in the JOBS Act discussed above.
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Implications of Being a Foreign Private Issuer
Upon completion of this offering, we will report under the Exchange Act as a non-U.S. company with foreign private issuer status. Even after we no longer qualify as an emerging growth company, as long as we qualify as a foreign private issuer under the Exchange Act, we will be exempt from certain provisions of the Exchange Act that are applicable to U.S. domestic public companies, including:
● | the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of a security registered under the Exchange Act; | |
● | the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liability for insiders who profit from trades made in a short period of time; and | |
● | the rules under the Exchange Act requiring the filing with the Securities and Exchange Commission of quarterly reports on Form 10-Q containing unaudited financial and other specified information, or current reports on Form 8-K, upon the occurrence of specified significant events. |
Both foreign private issuers and emerging growth companies are also exempt from certain more stringent executive compensation disclosure rules. Thus, even if we no longer qualify as an emerging growth company but remain a foreign private issuer, we will continue to be exempt from the more stringent compensation disclosures required of companies that are neither emerging growth companies nor foreign private issuers.
In addition, as a company incorporated in the Cayman Islands, we are permitted to adopt certain home country practices in relation to corporate governance matters that differ significantly from the corporate governance requirements of the Nasdaq. For example, if we elect to adopt home country practice, a majority of the Directors is not required to be independent directors, and neither our compensation committee nor our nomination committee is required to be comprised entirely of independent directors. These practices may afford less protection to shareholders than they would enjoy if we complied fully with corporate governance requirements of the Nasdaq.
Conventions Which Apply to This Prospectus
Unless we indicate otherwise, all information in this prospectus reflects no exercise by the underwriter of its option to purchase up to 337,500 additional Class A Ordinary Shares from us.
Except where the context otherwise requires:
● | “AI” means artificial intelligence; | |
● | “APAC” means Asia-Pacific; | |
● | “ART” means antigen rapid test; | |
● | “AWS” means Amazon Web Services; | |
● | “B2B” means business-to-business; | |
● | “B2C” means business-to-consumer; | |
● | “CAGR” means compound annual growth rate; | |
● | “CEO” means chief executive officer; | |
● | “COO” means chief operating officer; | |
● | “Class A Ordinary Shares” refer to our Class A ordinary shares in the capital of the Company of a nominal or par value of US$0.000004 each designated as Class A Ordinary Shares, and having the rights provided for in our amended and restated memorandum and articles of association; | |
● | “Class B Ordinary Shares” refer to our Class B ordinary shares in the capital of the Company of a nominal or par value of US$0.000004 each designated as Class B Ordinary Shares, and having the rights provided for in our amended and restated memorandum and articles of association; | |
● | “COVID-19” means Coronavirus disease 2019, a contagious respiratory disease caused by the virus SARS-CoV-2; | |
● | “Directors” means the directors of our Company as at the date of this prospectus; | |
● | “Exchange Act” means the Securities Exchange Act of 1934, as amended; | |
● | “GDP” means gross domestic product; | |
● | “GP” means general practitioner; | |
● | “H5N1” means Influenza A virus subtype H5N1, a subtype of the influenza A virus; | |
● | “IT” means information technology; | |
● | “MAU” means monthly active users; | |
● | “Mobile-health Network Solutions”, “we”, “us”, “our company” and “our” refer to Mobile-health Network Solutions, a Cayman Islands company, its consolidated subsidiaries, and its consolidated affiliated entities; | |
● | “MPU” means monthly paying users; | |
● | “Ordinary Shares” refers to our Class A Ordinary Shares and Class B Ordinary Shares collectively; | |
● | “OTC” means over-the-counter; | |
● | “PCR” means polymerase chain reaction; | |
● | “ROU” means right-of-use; | |
● | “SEC” or “Securities and Exchange Commission” means the United States Securities and Exchange Commission; | |
● | “Singapore” refers to the Republic of Singapore; | |
● | “S$” or “SGD” refer to Singapore dollar(s), the legal currency of Singapore; | |
● | “U.S.” means the United States; | |
● | “US$,” “U.S. dollars,” “$” and “dollars” refer to United States dollar(s), the legal currency of the United States; and | |
● | “VND” means Vietnamese dong, the legal currency of Vietnam. |
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The following assumes that the underwriter will not exercise its option to purchase additional Class A Ordinary Shares in the offering, unless otherwise indicated.
Offering Price | We expect that the initial public offering price will be between US$4.00 and US$5.00 per Class A Ordinary Share. |
Class A Ordinary Shares Offered by Us | 2,250,000 Class A Ordinary Shares (or 2,587,500 Class A Ordinary Shares if the underwriter exercises its option to purchase additional Class A Ordinary Shares in full). |
Class A Ordinary Shares Outstanding Immediately After This Offering | 21,921,750 Class A Ordinary Shares (or 22,259,250 Class A Ordinary Shares if the underwriter exercises its option to purchase additional 337,500 Class A Ordinary Shares in full). |
Ordinary Shares Issued and Outstanding Prior to This Offering |
19,671,750 Class A Ordinary Shares and 12,078,250 Class B Ordinary Shares. |
Ordinary Shares Outstanding Immediately After This Offering | 34,000,000 Ordinary Shares (or 34,337,500 Ordinary Shares if the underwriter exercises its option to purchase additional Class A Ordinary Shares in full). |
Voting Rights | Each holder of Class A Ordinary Shares is entitled to one vote per share. Each holder of Class B Ordinary Shares is entitled to 10 votes per share. Each Class B Ordinary Share is convertible into one Class A Ordinary Share at any time by the holder thereof. Class A Ordinary Shares are not convertible into Class B Ordinary Shares under any circumstances. |
Listing | We have applied to have our Class A Ordinary Shares listed on the Nasdaq Capital Market. The closing of this offering is conditioned upon Nasdaq’s final approval of our listing application, and there is no guarantee or assurance that our Ordinary Shares will be approved for listing on Nasdaq. |
Proposed Nasdaq Capital Market symbol | MNDR |
Option to Purchase Additional Class A Ordinary Shares | We have granted to the underwriter an option, exercisable within 45 days from the date of closing of this offering, to purchase up to 337,500 additional Class A Ordinary Shares. |
Use of Proceeds | We estimate that we will receive net proceeds from this offering of approximately US$8.6 million (or US$10.0 million if the underwriter exercises its option to purchase additional Class A Ordinary Shares in full), after deducting the underwriting discounts, commissions and estimated offering expenses payable by us and assuming an initial public offering price of US$4.50 per Class A Ordinary Share, being the mid-point of the estimated range of the initial public offering price shown on the front cover of this prospectus. We will not receive any of the proceeds from the sale of Class A ordinary shares being offered by the Selling Shareholders. See “Use of Proceeds” for additional information. |
Lock-up | We, each of our directors, executive officers, shareholders, and all option holders have agreed with the underwriter, subject to certain exceptions, not to sell, transfer or otherwise dispose of any Class A Ordinary Shares or similar securities or any securities convertible into or exchangeable or exercisable for our Class A Ordinary Shares for a period of 180 days from the date of this prospectus. See “Underwriting” for more information. |
Risk Factors | Investing in the Class A Ordinary Shares is highly speculative and involves a high degree of risk. As an investor you should be able to bear a complete loss of your investment. See “Risk Factors” and other information included in this prospectus for a discussion of risks you should carefully consider before investing in the Class A Ordinary Shares. |
Transfer Agent | Vstock Transfer, LLC |
Payment and settlement | The underwriter expects to deliver the Class A Ordinary Shares against payment therefor through the facilities of on or about , 2024. |
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Investing in our Class A Ordinary Shares entails a significant level of risk. Before investing in the Class A Ordinary Shares, you should carefully consider all of the risks and uncertainties mentioned in this section, in addition to all of the other information in this prospectus, including the financial statements and related notes. We may face additional risks and uncertainties aside from the ones mentioned below. There may be risks and uncertainties that we are unaware of, or that we currently do not consider material, that may become important factors that could adversely affect our business in the future. Any of the following risks and uncertainties could have a material adverse effect on our business, financial condition, results of operations and prospects. In such case, the market prices of the Class A Ordinary Shares could decline, and you may lose part or all of your investment.
Risks Related to Our Business and Industry
Maintaining users’ trust is critical to our success, and any failure to do so could damage our reputation and brand.
We have developed a comprehensive ecosystem that connects users with our healthcare solutions. We have been building our brand name and reputation for our ecosystem as we believe that our ability to maintain users’ trust in our MaNaDr ecosystem is critical to our success in the rapidly expanding telehealth solutions market in Singapore. Our ability to maintain users’ trust in the services and product offerings on our MaNaDr platform is primarily affected by the following factors:
● | our ability to maintain superior user experience and the quality of services and products provided through our ecosystem; | |
● | the breadth of offerings of our services and products and their efficacy in addressing our users’ needs and meeting their expectations; | |
● | the reliability, security and functionality of our ecosystem; | |
● | our ability to adopt new technologies or adapt our technology infrastructure to changing user requirements or emerging industry standards; | |
● | the strength of our consumer protection measures; and | |
● | our ability to increase brand awareness among existing and potential users through various marketing and promotional activities. |
Any loss of trust could harm the value of our brand and reputation, and result in users ceasing to utilize our ecosystem or reducing the demand for the services and product offerings available on our platforms, which could materially and adversely affect our business, financial condition, results of operations and prospects. Furthermore, there can be no assurance that our brand promotion and marketing efforts would be effective. Such efforts may be expensive, which may, in turn, materially and adversely affect our business, financial condition, results of operations and prospects, without any corresponding increase in user demand and/or sales for the services and products offered over our ecosystem.
Any negative review, comment or allegation about us, our in-house medical team, external doctors, clinic network and/or service providers, among others, or services and products offered over our ecosystem by the media, on social media or other public online forums may harm our brand, reputation and public image. We may also face challenges from others seeking to profit from, or defame, our reputation and brand. Any of the foregoing may result in the loss of potential and existing users or other stakeholders and, in turn, have a material adverse effect on our business, financial condition, results of operations and prospects.
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We may not be able to manage the growth of our business and operations or implement our business strategies on schedule or within our budget, or at all.
Our business has become increasingly complex in terms of both the type and scale of business we operate. Any expansion may increase the complexity of our operations and place a significant strain on our managerial, operational, financial and human resources. Our current and planned personnel, systems, procedures and controls may not be adequate to support our future operations. There can be no assurance that we will be able to effectively manage our growth or implement all these systems, procedures and control measures successfully. If we are not able to manage our growth effectively, our business, financial condition, results of operations and prospects may be materially and adversely affected.
As part of our business strategies, we expect to further expand our business to new jurisdictions, which may expose us to additional risks, including, among other things:
● | difficulties with managing operations into new geographical regions, including complying with the various regulatory and legal requirements of different jurisdictions; | |
● | different approval or licensing requirements; | |
● | recruiting sufficient personnel in these new markets; | |
● | challenges in providing services and products as well as support in these new markets; | |
● | challenges in attracting business partners and users and remaining competitive; | |
● | potential adverse tax consequences; | |
● | foreign exchange losses; | |
● | limited protection for intellectual property rights; | |
● | inability to effectively enforce contractual or legal rights; and | |
● | local political, regulatory and economic instability or civil unrest. |
If we are unable to effectively avoid or mitigate these risks, our ability to expand our business to these new jurisdictions will be affected, which could have a material adverse effect on our business, financial condition, results of operations and prospects.
The anticipated benefits from these efforts are based on assumptions that may prove to be inaccurate. Moreover, we may not be able to successfully complete these growth initiatives, strategies and operating plans and realize all of the benefits that we expect to achieve or it may be more costly to do so than we anticipate. If, for any reason, the benefits we realize are less than our estimates or the implementation of these growth initiatives, strategies and operating plans adversely affect our operations or cost more or take longer to effectuate than we expect, or if our assumptions prove inaccurate, our business, financial condition, results of operations and prospects may be materially and adversely affected.
If we fail to effectively estimate, price and manage our costs, or if our fees and charges are regulated, prescribed or otherwise required to be reduced, the profitability of our Group could decline.
We are subject to the risks of rising business costs. While we seek to impute these costs in our fee pricing, we may not always be able to do so due to our contractual arrangements, or if unanticipated costs arise that we have not priced into our contracts, or for any number of reasons beyond our control. These costs include payments to our staff, overheads and various other costs incurred for the provision of our services and product offerings under our ecosystem. Many other factors may cause a rise in actual operating expenses, including, but not limited to increased employee compensation (including economic arrangements and share-based compensation), catastrophes, including acts of terrorism, public health epidemics or severe weather, general inflation and government-mandated benefits or other regulatory changes.
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Furthermore, we may face higher costs associated with inflationary pressure in the economic environment in which we operate and changes in laws and regulations may also adversely affect our cost basis. Any such increases in operating expenses may affect our profits adversely if we are unable to raise our fees commensurately due to regulatory restrictions or the competitive nature of our business. Any changes in the amount and manner in which we are able to charge for our services, including the amount and manner in which we are able to charge our service providers, may have a material adverse impact on our business, financial condition, results of operations and prospects.
If our healthcare solutions do not drive users’ engagement or if we fail to provide superior user experience, our business and reputation may be materially and adversely affected.
Our business is highly dependent on the receptiveness of our users to our services and products as well as their willingness to use, and to increase the frequency and extent of their utilization of our solutions. Their degree of receptiveness to our services and products depends on a number of factors, including the demonstrated accuracy and efficacy of our services and product offerings compared to that offered by our competitors, turnaround time, cost-effectiveness, convenience and marketing support. Additionally, negative publicity concerning our healthcare solutions, our brand or our MaNaDr ecosystem in general, or the telehealth solutions market as a whole, could limit market acceptance and demand for our healthcare solutions. Furthermore, there can be no assurance that our efforts and ability to demonstrate the value of our solutions and the relative benefits of our services and products over those of our competitors to our users would be successful. We may fail to achieve an adequate level of acceptance by the users of our services and products, and we may not be able to effectively expand the registered user base, promote user engagement or convert existing registered users to active users. Consequently, our business may not develop as expected, or at all, and our business, financial condition, results of operations and prospects may be materially and adversely affected.
The success of our business also hinges on our ability to provide superior user experience, which depends on our ability to continue to deliver quality care to our users, to maintain the quality of our services and products, to source for and provide services and products that are responsive to user demands, and to provide timely and reliable delivery, flexible payment options and superior after-sales services. Such ability, in turn, depends on a variety of factors beyond our control. In particular, we rely on a number of third parties, and in particular doctors in our network of clinical service providers who are independent contractors and logistics partners who despatch the medication to our patients, in the provision of our services and products. Their failure to provide high-quality customer experience to our users may adversely affect our users’ receptiveness of, and willingness to utilize, our solutions, which may damage our reputation and cause us to lose users.
Additionally, we operate a user service center to provide real-time assistance to our customers via WhatsApp. If our customer service representatives fail to provide satisfactory service, or if waiting times are too long due to the high volume of inquiries from users at peak times, our brand and customer loyalty may be adversely affected. Furthermore, any negative publicity or poor feedback on our customer service may harm our brand and reputation and, in turn, cause us to lose users and market share, all of which may materially and adversely affect our business, financial condition, results of operations and prospects.
We may not be able to develop our existing technology infrastructure or recoup the investments we have made for such development, and failure to continue to innovate or adapt to industry changes may materially and adversely affect our business, financial condition, results of operations and prospects.
The telehealth solutions industry is characterized by rapidly changing technology, evolving industry standards and regulatory requirements, introduction of new services and products as well as changing user demands. We are also subject to other changes and developments in the telehealth solutions, Internet and healthcare industries and other industries in which we operate. These changes and developments may require us to continue to innovate, and failure to do so would have a material adverse effect on our business, financial condition, results of operations and prospects.
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We may need to constantly upgrade our technology infrastructure to provide increased scale, improved performance and additional built-in functionality of our mobile application and website, and to keep pace with our business development, which may require significant investments in time and resources, including adding new hardware, updating software and recruiting and training new engineering personnel. Failure to improve our technology infrastructure accordingly may materially affect our ability to adopt new services and products, and could result in unanticipated system disruptions, slower response times and impaired quality of our users’ and other participants’ experiences, which may, in turn, materially and adversely affect our business, financial condition, results of operations and prospects.
While we have been enhancing our technological capabilities and developing a number of technologies to support our ecosystem, if we experience problems with the functionality and effectiveness of our technologies in the course of development, or if we are unable to continually improve our technologies to handle our business needs as expected, our business, financial condition, results of operations and prospects could be materially and adversely affected.
Furthermore, we have invested, and are expected to continually invest, significant amounts in upgrading our technological infrastructure and developing our technologies. We are likely to recognize costs associated with these investments earlier than some of the anticipated benefits and the return on these investments may be lower, or may develop more slowly, than we expected. We may not be able to recover our capital expenditures or investments, in part or in full, or the recovery of these capital expenditures or investments may take longer than expected. As a result, the carrying value of the related assets may be subject to an impairment charge, which may materially and adversely affect our business, financial condition, results of operations and prospects.
Our self-developed technologies are complex and may contain undetected errors or may not operate properly, which could adversely affect our business, financial condition, results of operations and prospects.
Our self-developed technology platform, and in particular, our MaNaDr mobile application, provides our users and other participants in our ecosystem with the ability to conduct a variety of actions essential to the operations of our business and the delivery of our healthcare solutions. Self-developed technology development is time-consuming, expensive and complex, and may involve unforeseen difficulties. We may encounter technical obstacles, and it is possible that we may discover additional problems that prevent our technologies from operating properly and consequently adversely affect our technology infrastructure and other aspects of our business where our technologies are applied. If our solutions do not function reliably or fail to achieve users’ and business partners’ expectations in terms of performance, we may lose existing, or fail to attract new users or business partners, which may damage our reputation and adversely affect our business, financial condition, results of operations and prospects.
Furthermore, data services are complex and those we offer may develop or contain undetected defects or errors. Material performance problems, defects or errors in our existing or new software and applications and services may arise in the future and may result from interface between our healthcare solutions and systems and data that we did not develop and the function of which is beyond our control or undetected in our testing. These defects and errors, and any failure by us to identify and address them, could result in a loss of revenue or market share, diversion of development resources, harm to our reputation and increased service and maintenance costs. Defects or errors may discourage existing or potential users from utilizing our solutions. Correction of defects or errors could prove to be impossible or impracticable. The costs incurred in correcting any defects or errors may be substantial and could have a material adverse effect on our business, financial condition, results of operations and prospects.
Our failure to properly manage participants and stakeholders in our MaNaDr ecosystem may materially and adversely affect our business.
We rely on various participants and stakeholders, including, but not limited to, medical professionals, service providers and product suppliers and vendors, in the provision of services and products on our platform, and the success of our business depends on our ability to properly manage them. We consider a variety of factors before entering into contractual arrangements with them. Nevertheless, we have limited control over the quality of work and performance of these participants and stakeholders in their provision of services and products over our MaNaDr mobile application and website, and they may breach such contractual arrangements and subject us to claims and liabilities that may affect our business operations.
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We have also implemented quality control standards and procedures to manage their work and performance on our MaNaDr platform. However, there can be no assurance that our monitoring of their work and performance would be sufficient to control the quality of their work. In the event that a third party fails to meet our quality and operating standards contracted in our agreements or as required by relevant Singapore laws and regulations, our operations may suffer and our business, financial condition, results of operations and prospects may be materially and adversely affected. Furthermore, because of the contractual relationships, we could be perceived as being responsible for the actions of such participants and, as a result, suffer reputational damage. This may adversely affect our ability to attract new business partners and to engage them as providers of the healthcare solutions that we offer.
In particular, our in-house medical team, external doctors, clinics and other medical institutions, as well as healthcare institutions, may provide sub-standard services, mishandle sensitive information, engage in other misconduct or commit medical malpractice, which could subject us to medical liability or other legal claims. Our business, financial condition, results of operations and prospects may be materially and adversely affected if any claims are made against us and are not fully covered by insurance. With respect to external doctors, as they are not working physically with us, we have limited control over them as well as the quality of their online consultation services. Despite our background checks relating to their qualification and their contractual obligations to strictly adhere to the specified work scope and quality requirements and comply with applicable laws, there can be no assurance that our risk management procedures would be sufficient to monitor their performance and control the quality of their work. In the event that the external doctors fail to comply with the contractual obligations and applicable laws in relation to the provision of our teleconsultation services, our user experience could deteriorate, and we may suffer as a result of any actual or alleged misconduct by them, which could materially and adversely affect our business, financial condition, results of operations and prospects.
Under MaNaShop and MaNaPharma, we manage inventories of certain medicines and health supplements, and we do not have as much control over the storage and delivery of the other products sold. Many of our suppliers and vendors use their own facilities to store their products and utilize their own or third-party delivery systems to deliver their products to our users, which makes it difficult for us to ensure that our users get uniformly high-quality service for all products sold through ManaShop and MaNaPharma. If any supplier or vendor does not deliver the products or delivers them late or delivers products that are materially different from their description or of poor quality, or if it sells counterfeit or unlicensed products despite our background checks, the reputation of our MaNaShop and MaNaPharma businesses and our brand may be materially and adversely affected and we could face claims and may be held liable for any losses.
Furthermore, for those products of which we actively manage inventories, we rely primarily on contracted third-party couriers to deliver our products. Interruptions or failures in our delivery services could prevent the timely and successful delivery of our products. These interruptions may be due to unforeseen events that are beyond our control or the control of our third-party couriers, such as inclement weather, natural disasters, transportation disruptions, inadequate manpower or labor unrest. If our products are not delivered on time or are delivered in a damaged state, users may refuse to accept our products and have less confidence in our services. Any failure to provide high-quality delivery services to our users may adversely affect the user experience for MaNaShop and MaNaPharma, and adversely affect our business, financial condition, results of operations and prospects.
We have limited or no control over our suppliers and the quality of products supplied to us and if such products are not manufactured in accordance with the applicable quality standards, our business and reputation could be materially and adversely affected
The manufacturing processes for pharmaceutical products are required to meet good manufacturing practice and/or other applicable quality standards. We source all of our products from third party suppliers, including brand principals and wholesalers. We have limited or no control over the operations of such third-party suppliers and the quality of the products which they supply to us, and there cannot be any assurance that such products will be free of defects and meet the applicable quality standards. From time to time, the pharmaceutical products that we market have been subject to recalls by the manufacturers. While such recalls did not have a material adverse impact on our business, financial condition, results of operations and prospects for the six months ended December 31, 2022 and during the years ended June 30, 2022 and 2021, there cannot be any assurance that future recalls, if any, will not have such an impact.
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Failure to detect quality defects in our products or to prevent defective products from being delivered to our customers could result in injuries or even deaths, product recalls or withdrawals, license revocations or fines, or lead to other problems that could adversely affect our business and reputation, and materially and adversely affect our business, financial condition, results of operations and prospects.
Product liability claims in respect of defective products sold to our customers in our pharmaceutical business could adversely affect our reputation and our financial prospects
We do not maintain any insurance policy which covers us for product liability. Our business involves an inherent risk of product liability, product recalls and exposure to public liability claims. Although our suppliers may, on a case-by-case basis, provide us with a written indemnity covering the full extent of any third party liability we may incur as a result of the sale of their products, we cannot assure you that we will be successful in obtaining such indemnity payment (if any) or that any such indemnity payment will fully cover all of our losses associated with the original liability. If we were found responsible for damage caused by defective products, our reputation may be adversely affected, which could result in the erosion of customer confidence in the brands that we sell and a consequent reduction in sales. In such circumstances, our business, financial condition, results of operations and prospects may be materially and adversely affected.
As at December 31, 2022, we had not encountered any incidents in relation to the foregoing that have materially and adversely affected our business, financial condition, results of operations and prospects, but this is no assurance that any such incidents will not occur in the future.
Any lack of requisite approvals, licenses or permits applicable to our business may have a material and adverse effect on our business, financial condition, results of operations and prospects.
Our business is subject to governmental supervision and regulation by various governmental and regulatory authorities in Singapore, including but not limited to, the Ministry of Health, the Health Sciences Authority and the Singapore Medical Council, and in other jurisdictions where we conduct our business operations. Such government authorities, statutory board, agencies and bodies promulgate and enforce laws and regulations that cover a variety of business activities that our operations relate to, such as the provision of medical services online, retail, sales and online operation of pharmaceutical products and medical devices, and software development, among other things. These regulations in general regulate the entry into, the permitted scope of, as well as approvals, licenses and permits for, the relevant business activities. Due to uncertainties in the regulatory environment of the industries and/or jurisdictions in which we operate, there can be no assurance that we have obtained or applied for all the approvals, permits and licenses required for conducting our business in Singapore or elsewhere, or would be able to maintain our existing approvals, permits and licenses or obtain any new approvals, permits and licenses if required by any future laws or regulations. If we fail to obtain and maintain the necessary approvals, licenses or permits required for our business, we could be subject to liabilities, penalties and operational disruption and our business, financial condition, results of operations and prospects could be materially and adversely affected.
Our failure to properly manage the registration of our in-house doctors may materially and adversely affect our business.
The practice of doctors is strictly regulated under Singapore laws, rules and regulations. Under applicable Singapore regulations, a person must not practice medicine or do any act as a medical practitioner without a valid practicing certificate in place. If a person is found to be practicing medicine without a valid practicing certificate, he or she shall be guilty of an offense and shall be liable on conviction to a fine not exceeding S$100,000 or to imprisonment for a term not exceeding 12 months or to both and, in the case of a second or subsequent conviction, to a fine not exceeding S$200,000 or to imprisonment for a term not exceeding two years or to both.
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There can be no assurance that our future in-house doctors will obtain and/or maintain the relevant certification in a timely manner, or at all, or that our in-house doctors will not practice outside the permitted scope of their respective licenses. Our failure to properly manage the registration of our in-house doctors may materially and adversely affect our business. Furthermore, if any of our in-house doctors are found to have deficient registration or found to be practicing beyond the scope permitted by relevant authorities, they may be disciplined and lose their practicing licenses. As a result, we may no longer be able to employ them in offering our teleconsultation and other services. In addition, there can be no assurance that we can timely find qualified replacements on commercially reasonable terms, or at all.
As of December 31, 2022, all of our practicing in-house doctors in our team had obtained and maintained valid practicing certificates under the relevant Singapore laws, rules and regulations. Nevertheless, there can be no assurance that the relevant healthcare administrative authorities would not retrospectively find deficiency in the registration of these in-house doctors and subject the relevant medical professionals to penalties, all of which could materially and adversely affect our business, financial condition, results of operations and prospects.
Our failure to maintain optimal inventory levels and the risk of inventory obsolescence could increase our operating costs or lead to unfulfilled customer orders, either of which could have a material and adverse effect on our business, financial condition, results of operations and prospects.
We need to ensure optimal inventory levels for both our MaNaShop and MaNaPharma businesses. We manage inventories of certain medicines and health supplements, while direct sales suppliers and vendors manage inventories of some of our other products.
For the medicines and health supplements of which we manage inventories, we are exposed to inventory risk as a result of rapid changes in product life cycles, changing consumer preferences, uncertainty of product developments and launches, manufacturer back orders and other related problems as well as the general volatile economic environment globally. There can be no assurance that we can accurately predict these trends and events and avoid over-stocking or under-stocking of products. Furthermore, demand for products could change significantly between the time when the products are ordered and the time when they are ready for delivery. When we begin to sell a new product, it is particularly difficult to forecast product demand accurately. We may be unable to sell such inventory in sufficient quantities or during the relevant sales seasons. Inventory levels in excess of customer demand may result in inventory write-downs, expiration of products or an increase in inventory holding costs and a potential negative effect on our liquidity. Conversely, if we underestimate customer demand or if our suppliers fail to provide products to us or deliver products to our customers in a timely manner, we may experience inventory shortages, which may, in turn, result in unfulfilled customer orders, leading to an adverse effect on our customer relationships. Our customers, such as clinics, do not have an obligation to drawdown on the inventory that we stock for them and as such, we bear the risk of inventory obsolescence in the event that the demand from our customers fall short of the inventory that we stockpile to cater to their needs. In addition, we may have to reduce the sale price of our products in order to reduce our inventory level, which may lead to lower gross margins. In such circumstances, our business, results of operations, financial condition and prospects may be materially and adversely affected.
Additionally, we closely monitor the inventory levels of other products of which our direct sales suppliers and vendors manage inventories. However, there can be no assurance that our monitoring and related measures would be effective in ensuring fulfillment of our customers’ orders. Our failure to maintain proper inventory levels for our businesses under MaNaShop and/or MaNaPharma may have a material and adverse effect on our business, financial condition, results of operations and prospects.
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We may be adversely affected by negative publicity, litigation and regulatory investigations and proceedings, and may not always be successful in defending ourselves against such claims or proceedings.
Our business operations entail substantial litigation and regulatory risks, including the risk of lawsuits and other legal actions relating to medical disputes, fraud and misconduct, sales and customer services and control procedures deficiencies, as well as the protection of personal and confidential information of our users and business partners, among others. We may be subject to claims and lawsuits in the ordinary course of our business. We may also be subject to inquiries, inspections, investigations and proceedings by relevant regulatory and other governmental agencies. Actions brought against us may result in settlements, injunctions, fines, penalties or other results adverse to us that could harm our business, financial condition, results of operations and prospects and reputation. Even if we are successful in defending ourselves against these actions, the costs of such defense may be significant to us. A significant judgement or regulatory action against us or a material disruption in our business arising from adverse adjudications in proceedings against our Directors, officers or employees would have a material adverse effect on our business, financial condition, results of operations and prospects.
Security breaches and attacks against our systems and network, and any potential resultant breach or failure to otherwise protect confidential and proprietary information, and network disruptions in general could damage our reputation and adversely affect our business, financial condition, results of operations and prospects.
We rely heavily on technology, particularly the Internet, to provide high-quality online services. However, our technology operations are vulnerable to disruptions arising from human error, natural disasters, power failure, computer viruses, spam attacks, unauthorized access, network disruptions and other similar events. Disruptions to, or instability of, our technology or external technology that allows our customers to use our online services and products could materially harm our business and reputation.
Although we have employed significant resources to develop security measures against breaches, our cybersecurity measures may not detect or prevent all attempts to compromise our systems, including distributed denial-of-service attacks, viruses, malicious software, break-ins, phishing attacks, social engineering, security breaches or other attacks and similar disruptions that may jeopardize the security of information stored in and transmitted by our systems or that we otherwise maintain. Breaches of our cybersecurity measures could result in unauthorized access to our systems, misappropriation of information or data, deletion or modification of user information, or a denial-of-service or other interruption to our business operations. As techniques used to obtain unauthorized access to or sabotage systems change frequently and may not be known until launched against us, we may be unable to anticipate, or implement adequate measures to protect against, these attacks. While we had not been subject to these types of attacks that had materially and adversely affected our business operations since the inception of our business operations, there can be no assurance that we would not in the future be subject to such attacks that may result in material damages or remediation costs. If we are unable to avert these attacks and security breaches, we could be subject to significant legal and financial liability, our reputation would be harmed and we could sustain substantial revenue loss from lost sales and customer dissatisfaction.
In addition, we may not have the resources or technical sophistication to anticipate or prevent rapidly evolving types of cyber-attacks. Cyber-attacks may target us, our users or other participants of our ecosystem, or the information infrastructure on which we depend. Actual or anticipated attacks and risks may cause us to incur significantly higher costs, including costs to deploy additional personnel and network protection technologies, train employees, and engage third-party experts and consultants. Cybersecurity breaches may harm our reputation, and materially and adversely affect our business, financial condition, results of operations and prospects. Furthermore, despite any precautions we may take, the occurrence of a flood or fire, or other unanticipated incidents at our information infrastructure facilities in Singapore, including power outages, telecommunications delays or failures, break-ins to our systems or computer viruses, could result in delays or interruptions to our platform and operations as well as loss of our users’ and other participants’ data. Any of these events could damage our reputation, materially disrupt our ecosystem and subject us to liability and claims, which may materially and adversely affect our business, financial condition, results of operations and prospects.
Our business generates and processes a large amount of data, and the improper use or disclosure of such data could harm our reputation as well as have a material adverse effect on our business and prospects.
Our platform generates and processes a large amount of personal, transaction, demographic and behavioral data. Sensitive user information in our business operations is stored in third party datacenters. Such information includes, but is not limited to, personal information (such as users’ name, cell phone number, delivery address, age and gender, consultation record, order record and activity log). We have kept all sensitive user information in our database such as order records and consultation records since inception. We face risks inherent in handling large volumes of data and in securing and protecting such data. In particular, we face a number of data-related challenges from consultations, transactions and other activities on our platform, including:
● | protecting the data in and hosted on our system, including against attacks on our system by external parties or improper behavior by our employees; | |
● | addressing concerns related to privacy and sharing, safety, security and other factors; and | |
● | complying with applicable laws, rules and regulations relating to the collection, use, disclosure or security of personal information, including any requests from regulatory and government authorities relating to such data. |
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Any systems failure or security breach or lapse that results in the unauthorized release of our user data could harm our reputation and brand and, consequently, our business, in addition to exposing us to potential legal liability.
Our terms of service concerning the collection, use and disclosure of user data are posted on our MaNaDr mobile application and website. Any failure, or perceived failure, by us to comply with our privacy policies or any applicable regulatory requirements or privacy protection-related laws, rules and regulations could result in proceedings or actions against us by governmental or regulatory authorities or others. These proceedings or actions may subject us to significant penalties and negative publicity, require us to change our business model or practices, increase our costs and disrupt our business. As we expand our operations, we may be subject to additional laws in other jurisdictions where our users and business partners of our ecosystem are located. The laws, rules and regulations of other jurisdictions may impose on us more stringent or conflicting requirements with financial penalties for non-compliance higher than those in Singapore, and the compliance with such requirements could require significant resources and result in substantial costs, which may materially and adversely affect our business, financial condition, results of operations and prospects.
We may not have sufficient insurance coverage to cover our business risks and face the risk of becoming subject to medical liability claims, which could cause us to incur significant expenses and be liable for significant damages if not covered by insurance.
We face risks of medical liability claims against our in-house medical team, external doctors and ourselves. We have obtained insurance to cover certain potential risks and liabilities, such as professional liability insurance for our in-house medical team and external doctors in connection with their provision of GP services over our platform and product liability insurance for us and our suppliers with respect to products sold under MaNaShop and MaNaPharma.
However, we may not be able to acquire any insurance for certain types of risks such as business liability or service disruption insurance for all of our operations in Singapore, and our coverage may not be adequate to compensate for all losses that may occur, particularly with respect to loss of business or operations. For example, we do not maintain business interruption insurance, nor do we maintain key-man life insurance. Any business disruption, litigation, regulatory action, outbreak of epidemic disease or natural disaster may also expose us to substantial costs and diversion of resources. Any claims made against us that are not fully covered by insurance could be costly to defend against, result in substantial damage awards against us and divert the attention of our management and our in-house medical team and external doctors from our operations, which could have a material adverse effect on our business, financial condition, results of operations, and prospects. There can be no assurance that our insurance coverage is sufficient to prevent us from any loss or that we will be able to successfully claim our losses under our current insurance policies on a timely basis, or at all. If we incur any loss that is not covered by our insurance policies, or if the compensated amount is significantly less than our actual loss, our business, financial condition, results of operations and prospects could be materially and adversely affected. In addition, professional liability insurance premiums may increase significantly in the future, particularly as we expand our services. Further, adequate professional liability insurance may not be available to our in-house medical team, external doctors or ourselves in the future on commercially acceptable terms, or at all.
We may not be able to prevent others from unauthorized use of our intellectual property, which could harm our business and competitive position.
We regard our trademarks, patents and similar intellectual property as critical to our success, and we rely on a combination of intellectual property laws and contractual arrangements, including confidentiality agreements with our employees and third parties, to protect our proprietary rights. Despite these measures, any of our intellectual property rights could be challenged, invalidated, circumvented or misappropriated, or such intellectual property may not be sufficient to provide us with competitive advantages. In addition, although we are not aware of any imitation websites or mobile applications that attempt to cause confusion or traffic diversion from us at the moment, we may become an attractive target to such attacks in the future because of our brand recognition in the Singapore telehealth solutions industry.
In addition, there can be no assurance that our patent applications would be approved, that any issued patents would adequately protect our intellectual property, or that such patents would not be challenged by third parties or found by a judicial or regulatory authority to be invalid or unenforceable.
Confidentiality agreements may be breached by counterparties, and there may not be adequate remedies available to us for any such breach. Accordingly, we may not be able to effectively protect our intellectual property rights or to enforce our contractual rights in Singapore. Policing any unauthorized use of our intellectual property is difficult and costly and the steps that we take may be inadequate to prevent the infringement or misappropriation of our intellectual property. In the event that we resort to litigation to enforce our intellectual property rights, such litigation could result in substantial costs and a diversion of our managerial and financial resources, and could put our intellectual property at risk of being invalidated or narrowed in scope. There can be no assurance that we would prevail in such litigation, and even if we manage to prevail, we may not obtain a meaningful recovery. In addition, our trade secrets may be leaked or otherwise become available to, or be independently discovered by, our competitors. Any failure in maintaining, protecting or enforcing our intellectual property rights could have a material adverse effect on our business, financial condition, results of operations and prospects.
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We may be subject to intellectual property infringement claims, which may be expensive to defend and may disrupt our business and operations.
We cannot be certain that our operations or any aspects of our business do not or would not infringe upon or otherwise violate patents, copyrights or other intellectual property rights held by third parties. We have been, and from time to time in the future may be, subject to legal proceedings and claims relating to the intellectual property rights of others. In addition, there may be other third-party intellectual property that is infringed by our products, services or other aspects of our business. There could also be existing patents of which we are not aware that our products may inadvertently infringe. There can be no assurance that holders of patents purportedly relating to some aspect of our technology infrastructure or business, if any such holders exist, would not seek to enforce such patents against us in Singapore, or any other jurisdictions as applicable. Furthermore, the application and interpretation of Singapore patent laws and the procedures and standards for granting patents in Singapore are still evolving, and there can be no assurance that Singapore courts or regulatory authorities would agree with our analysis. If we are found to have violated the intellectual property rights of others, we may be subject to liability for our infringement activities or may be prohibited from using such intellectual property, and we may incur licensing fees or be forced to develop alternatives of our own. In addition, we may incur significant expenses, and may be forced to divert management’s time and other resources from our business and operations to defend against these third-party infringement claims, regardless of their merits. Successful infringement or licensing claims made against us may result in significant monetary liabilities and may materially disrupt our business and operations by restricting or prohibiting our use of the intellectual property in question, which may materially and adversely affect our business, financial condition, results of operations and prospects.
User growth and activity depend upon effective use of operating systems, networks and standards that we do not control.
Users access our MaNaDr platform through the mobile application and the website on their devices. To optimize the user mobile experience, we are, to some extent, dependent on our users downloading our MaNaDr mobile application and website for their particular devices. As new mobile devices and platforms are released, it is difficult to predict the problems we may encounter in developing the software required to operate our MaNaDr mobile application for these alternative devices and platforms, and we may need to devote significant resources to the development, support and maintenance of the mobile application and/or the website. In addition, our future growth and results of operations could suffer if we experience difficulties in the future in integrating our MaNaDr mobile application into mobile devices or if problems arise with our relationships with providers of mobile operating systems or mobile application stores, if our MaNaDr mobile application receive unfavorable reviews compared to competing applications by other telehealth solutions service providers, or if we face increased costs to distribute or have users use our MaNaDr mobile application and/or website.
In the event that it becomes more difficult for our users to access and use our MaNaDr platform and healthcare solution on their mobile devices, or if our users choose not to access or use our MaNaDr platform and healthcare solutions on their mobile devices or to use mobile devices that do not offer access to our MaNaDr platform and healthcare solutions, the growth of our user base could be harmed and our business, financial condition, results of operations and prospects may be adversely affected.
A limited number of customers have accounted for, and are expected to continue to account for, a significant portion of our revenues. The failure to maintain or to increase revenues from these customers could adversely affect our prospects.
For the years ended June 30, 2023 and 2022, revenue from a customer in the public sector, Customer A, accounted for 1.17% and 66.04% of our total revenues respectively.
Due to our revenue concentration attributable to a limited number of customers, should any of the following events, among others, occur, our business, financial condition, results of operations and prospects may be adversely affected:
● | contract reduction, delay or cancellation by any significant customer and our failure to identify and acquire additional or replacement customers; | |
● | a substantial reduction by any significant customer in the price they are willing to pay for our services and/or products; and | |
● | financial difficulty of any significant customer who become unable to make timely payment for the services and/or products that such customer purchases from us. |
We have entered into an agreement with Customer A pursuant to which Customer A would fund the provision of certain medical services, including telemedicine, mobile medicine and home medical and nursing services provided by us (the “Medical Services Agreement”). Such agreement has been extended and the current term of the agreement is for the period commencing on April, 1 2023 and ending on March, 31 2024, unless we are otherwise notified. Pursuant to the Medical Service Agreement, we will be directed to provide certain medical services to certain patients. The cost of our services is based on an agreed set of rates, and following the provision of our services we would then be reimbursed by Customer A within 30 days from the date of approval of the claim.
The above is a brief summary of the material provisions of the Medical Services Agreement and does not purport to be a complete statement of its terms and conditions.
We may not be able to conduct our marketing activities cost-effectively and we are subject to limitations in promoting our business.
We have incurred expenses on a variety of different marketing and brand promotion efforts designed to enhance our brand recognition and increase sales of our services and products. However, our brand promotion and marketing activities may not be well received by users and may not result in the levels of sales that we anticipate. Additionally, marketing approaches and tools in the Singapore telehealth solutions market are evolving, which may further require us to enhance our marketing approaches and experiment with new marketing methods to keep pace with industry developments and user preferences. Failure to refine our existing marketing approaches or to introduce new marketing approaches in a cost-effective manner could reduce our market share and materially and adversely affect our business, financial condition, results of operations and prospects.
We are subject to limitations in promoting healthcare-related services and products.
We are subject to certain limitations in promoting healthcare-related services and products. Our in-house medical team and other relevant parties in the provision of our medical and wellness services have to comply with rules and regulations that restrict the promotion or dissemination of information about the professional healthcare services and practice provided by licensed doctors, and the publication or marketing efforts for the predominant purpose of promoting the products or services of doctors to users or potential users. Such restrictions may affect our ability to further enhance our brand recognition or secure new business opportunities in the future.
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Additionally, there can be no assurance that our existing practices of monitoring our information dissemination process and publication would continue to be effective. Should there be any change in the relevant rules and regulations, or change of interpretation thereof, we, our in-house medical team and other relevant third parties may be regarded as breaching the relevant rules and regulations and may be subject to regulatory penalties or disciplinary actions, which may materially and adversely affect our reputation, business, financial condition, results of operations and prospects.
If we fail to maintain adequate internal controls, we may not be able to effectively manage our business and may experience errors or information lapses affecting our business.
Our success depends on our ability to effectively utilize our standardized management system, information systems, resources and internal controls. As we continue to expand, we will need to modify and improve our financial and managerial controls, reporting systems and procedures and other internal controls and compliance procedures to meet our evolving business needs. If we are unable to improve or maintain our internal controls, systems and procedures, they may become ineffective and adversely affect our ability to manage our business and cause errors or information lapses that affect our business. Our efforts in improving our internal control system may not result in the elimination of all risks. If we are not successful in discovering and eliminating weaknesses in our internal controls, our ability to effectively manage our business may be affected, which may materially and adversely affect our business, financial condition, results of operations and prospects.
Our performance depends on key management as well as skilled and qualified medical professional and support staff generally, and any failure to attract, motivate and retain such medical professionals and our support staff could hinder our ability to maintain and grow our business.
Our future success is significantly dependent upon the continued service of our management and key personnel, including skilled and qualified medical professionals such as doctors, support staff such as nurses and assistants, as well as other healthcare professionals. We rely on the services of these medical professionals and support staff to provide the comprehensive range of services we offer through our self-owned GP clinics and specialist clinics, and we face intense competition from other medical services providers to recruit skilled and qualified medical professionals and support staff. If we lose the services of any member of management or key personnel, we may not be able to locate suitable or qualified replacements, and may incur additional expenses to recruit and train new staff, which could disrupt our business and growth, thereby materially and adversely affecting our business, financial condition, results of operations and prospects.
Additionally, the size and scope of our ecosystem and our expansion plans may require us to hire and retain a wide range of effective and experienced personnel who can adapt to a dynamic, competitive and challenging business environment. We will need to continue to attract and retain experienced and capable personnel at all levels, including qualified healthcare professionals for our in-house medical team, as we expand our business and operations. Competition for talent in the Singapore telehealth solutions industry is intense, and the availability of suitable and qualified candidates in Singapore is limited. Competition for these individuals could cause us to offer higher compensation and other benefits to attract and retain them. In addition, even if we were to offer higher compensation and other benefits, there can be no assurance that these individuals would choose to join or continue working for us.
Moreover, if any of our senior management or other key personnel joins or establishes a competing business, we may lose some of our users, which may have a material adverse effect on our business, financial condition, results of operations and prospects.
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We may not be able to detect or prevent fraud or other misconduct committed by our employees or third parties.
Fraud or other misconduct by our employees, such as unauthorized business transactions, bribery and breach of our internal policies and procedures, or by third parties, such as breach of law, may be difficult to detect or prevent. It could subject us to financial loss and sanctions imposed by governmental authorities while seriously damaging our reputation. This may also impair our ability to effectively attract prospective users, develop user loyalty, obtain financing on favorable terms and conduct other business activities.
While we had not encountered any incidents in relation to the foregoing that had materially and adversely affected our business, financial condition, results of operations and prospects for the six months ended December 31, 2022 and during the years ended June 30, 2022 and 2021, and our risk management systems, IT systems and internal control procedures are designed to monitor our operations and overall compliance, we may be unable to identify non-compliance or suspicious transactions promptly, or at all. Furthermore, it is not always possible to detect and prevent fraud or other misconduct committed by our employees or third parties, and the precautions we take to prevent and detect such activities may not be effective. Therefore, we are subject to the risk that fraud or other misconduct may have previously occurred but was undetected, or may occur in the future. This may materially and adversely affect our business, financial condition, results of operations and prospects.
We rely on assumptions and estimates to calculate certain key operating metrics, and inaccuracies in such metrics may harm our reputation and adversely affect our business.
Certain key operating metrics, such as the MAU by age group and MPU by age group in this prospectus are calculated using our internal data that has not been independently verified by third parties. While these numbers are based on what we believe to be reasonable calculations for the applicable periods of measurement, there are inherent challenges in measuring usage and user engagement across our user base. In addition, our key operating metrics are derived and calculated based on different assumptions and estimates, and you should be cautious of such assumptions and estimates when assessing our operating performance.
Our measures of user growth and user engagement may differ from estimates published by third parties or from similarly titled metrics used by our competitors due to differences in data availability, sources and methodology. If third parties do not perceive our user metrics to be accurate representations of our user base or user engagement, or if we discover material inaccuracies in our user metrics, our reputation may be harmed and third parties may be less willing to allocate their resources or spending to us, which could adversely affect our business, financial condition, results of operations and prospects.
We may need additional capital but may not be able to obtain such on favorable terms or at all.
We may require additional cash resources due to operating losses or future growth and development of our business, including any investments or acquisitions we may decide to pursue. If our cash resources are insufficient to satisfy our cash requirements, we may seek to issue additional equity or debt securities or obtain new or expanded credit facilities. Our ability to obtain external financing in the future is subject to a variety of uncertainties, including our future financial condition, results of operations, cash flows, share price performance and the liquidity of international capital and lending markets. In addition, incurring indebtedness would subject us to increased debt service obligations and could result in operating and financing covenants that would restrict our operations. There can be no assurance that financing would be available in a timely manner or in amounts or on terms favorable to us, or at all. Any failure to raise needed funds on terms favorable to us, or at all, could restrict our liquidity as well as have a material adverse effect on our business, financial condition, results of operations and prospects. Furthermore, any issuance of equity or equity-linked securities could result in significant dilution to our existing shareholders.
Our strategic alliances, investments or acquisitions may have a material adverse effect on our business, financial condition, results of operations and prospects.
We may evaluate and consider strategic investments and acquisitions or enter into strategic alliances to develop new services or solutions and enhance our competitive position. Investments or acquisitions involve numerous risks, including the potential failure to achieve the expected benefits of the combination or acquisition; difficulties in, and the cost of, integrating operations, technologies, services and personnel; potential write-offs of acquired assets or investments; and downward effect on our operating results. These transactions will also divert the management’s time and resources from our normal operations, and we may have to incur unexpected liabilities or expenses. We may also in the future enter into strategic alliances with various third parties. Strategic alliances with third parties could subject us to a number of risks, including risks associated with potential leakage of proprietary information, non-performance by the counterparty and an increase in expenses incurred in establishing new strategic alliances, any of which may materially and adversely affect our business, financial condition, results of operations and prospects.
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We are subject to credit risk with respect to trade receivables.
We generally allow a credit period of 30 days to our customers, in particular other clinics that purchase medicine from us. As of June 30, 2023 and 2022, our trade receivables turnover days were 7 days and 6 days, respectively. As of the same dates, trade receivables of approximately US$30,000 and US$34,000, respectively, were past due but not impaired. These mainly relate to a number of customers whom there is no significant financial difficulty for and, based on our past experience, the overdue amounts can be recovered from. Nevertheless, there can be no assurance that all such amounts due to us will be settled on time, or that such amounts will not continue to increase in the future. Accordingly, we face credit risk in collecting trade receivables due from customers. Our performance, liquidity and profitability would be adversely affected if significant amounts due to us are not settled on time or substantial impairment is incurred. The bankruptcy or deterioration of the credit condition of any of these customers could also materially and adversely affect our business, financial condition, results of operations and prospects.
We face risks relating to the political, economic, regulatory, social and legal environments in the jurisdictions in which we currently or may in the future operate.
We have operations and a presence in Singapore and may expand into other jurisdictions in the future. We are subject to certain risks inherent in conducting business, such as political, economic, regulatory, social and legal developments in each jurisdiction in which we currently or may in the future operate, many of which are beyond our control. These risks include but are not limited to:
● | laws and policies affecting trade, investment, foreign ownership restrictions and taxes, including laws and policies relating to the repatriation of funds and withholding taxes, and changes in these laws; | |
● | differing degrees of protection for intellectual property; | |
● | inflation, interest rates and general conditions; | |
● | changes in laws, regulations, local regulatory requirements and accounting standards and the interpretation, application and/or enforcement thereof, including any unexpected changes thereto. In particular, changes in social and/or health insurance requirements and standards as well as healthcare subsidies and support by local governments; | |
● | the political and/or regulatory climate in such jurisdictions, including any instability of foreign economies and governments and any social unrest or political instability; | |
● | fluctuating foreign exchange rates; | |
● | expropriation or nullification of contracts; | |
● | the spread of communicable diseases in such jurisdictions, which may impact local business operations; and | |
● | climate change, natural disasters, demonstrations, riots, coups, wars and acts of terrorism. |
The jurisdictions in which we currently or may in the future operate may be in a state of rapid political, economic and social changes, and may also be subject to unforeseeable circumstances such as natural disasters and other uncontrollable events, which will entail risks to our business and operations. There can also be no assurance that we will be able to adapt to the local conditions, regulations and business practices and customs. Any changes implemented by the government of these jurisdictions resulting in, among other things, currency and interest rate fluctuations, capital restrictions and changes in duties and taxes detrimental to our business could materially and adversely affect our business, financial condition, results of operations and prospects.
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The political and/or economic conditions of the jurisdictions in which we operate may also be affected by geopolitical risks, including lingering trade tensions and other political disputes which have resulted in and may continue to lead to, among other things, the imposition of sanctions on or blacklisting of politically connected persons and corporations, or persons and corporations perceived to be politically connected. As at December 31, 2022, we did not, to our knowledge, have business dealings with any person or corporation which is currently the subject of political sanctions. However, the geopolitical environment is constantly evolving and there can be no assurance that we will not in the future be found to be in contravention of political sanctions, for example, should it transpire that any of our business partners or other persons or corporations with whom we have business dealings are or become the subject of political sanctions.
Our business may also be affected by macroeconomic factors, such as general economic conditions, market sentiment and consumer confidence in the jurisdictions we operate in, social and political unrest, regulatory, fiscal and other governmental policies, all of which are beyond our control. Any adverse developments related to any of the abovementioned factors or other associated risks may have a material adverse effect on our business, financial condition, results of operations and prospects.
COVID-19 or any other infectious and communicable diseases, as well as the occurrence of any acts of God, war, terrorist attacks and other catastrophic events may have a material adverse effect on our business, financial condition, results of operations and prospects.
Our Group faces risks from the outbreak of communicable or virulent diseases and pandemics or epidemics such as severe acute respiratory syndrome, H5N1 avian flu, Middle East respiratory syndrome, Ebola and more recently, the outbreak of COVID-19 in countries which we operate, which may materially and adversely affect our operations. While our Group has put in place measures and protocols to contain the spread of contagious and virulent diseases, our medical doctors, healthcare practitioners and other employees nonetheless remain susceptible to infection as frontline workers in the event of disease outbreaks. Despite our strict infection control protocols, there can be no assurance that our patients, employees, medical doctors and other healthcare professionals will not be infected with such diseases. We may, as a result, be required to temporarily shut down our clinics and offices for an uncertain period of time to contain the spread of such diseases. Such disruptions to our business and operations may have a negative impact on our business, financial condition, results of operations and prospects.
Acts of God, such as natural disasters which are beyond our control, may materially and adversely affect the economy, infrastructure and livelihood of the local population. Similarly, man-made catastrophes, such as terrorist attacks and wars may disrupt the economies of the countries we operate in. A catastrophic event or multiple catastrophic events may cause unexpected large losses and may have a material adverse effect on our business, financial condition, results of operations and prospects. There can be no assurance that our efforts to protect ourselves against catastrophic losses would be adequate. In addition, other events that are outside the control of our Group, such as fire, deliberate acts of sabotage, vendor failure or negligence, blackouts, terrorist attacks or criminal acts, could damage, cause operational interruptions to, or otherwise adversely affect our operating facilities and activities, as well as potentially cause injury or death to our employees, patients and/or customers. We cannot give any assurance that the occurrence of any catastrophic events, wars, terrorist attacks or other hostilities in any part of the world, potential, threatened or otherwise, will not, directly or indirectly, have a material and adverse effect on our business, financial condition, results of operations and prospects.
Fluctuations in exchange rates could have a material and adverse effect on our results of operations
We currently purchase a proportion of our pharmaceutical products and medical equipment from our suppliers in foreign currency (namely, U.S. dollars and SGD). Our Group is also exposed to fluctuations in VND as our representative office is located in Vietnam. Accordingly, our Group is exposed to fluctuations in the U.S. dollar and VND, against the SGD. An appreciation of any such foreign currency may result in an increase in the costs of our supplies. It is difficult to predict how market forces or government / international policy may impact fluctuations of the U.S. dollar, VND and/or SGD in the future, and there can be no assurance that the U.S. dollar, VND and/or SGD will not appreciate significantly in value in the future.
In the event that such fluctuations in the relevant foreign currency are substantial, and we are unable to pass on our costs to users, our earnings, financial position and results of operations may be materially and adversely affected.
At present, we do not have a formal policy for hedging against our foreign exchange exposure to the U.S. dollar, VND and/or SGD and have not used any hedging instruments due to the high associated costs. However, we will continue to monitor our foreign exchange exposure to the U.S. dollar, VND and/or SGD and we may employ hedging instruments to manage our foreign exchange exposure should the need arise.
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Risks Related to Doing Business in Vietnam
Geopolitical risks may have an adverse impact on our business, financial condition and results of operations.
Certain aspects of our business operations are conducted in Vietnam, including the software development for our mobile application. The social conditions and political stability of Vietnam will also have a direct impact on the feasibility in conducting such business operations in Vietnam. Our future business operations in Vietnam where the economy and legal systems remain susceptible to risks associated with an emerging economy may be subject to higher geopolitical risks than developed countries. Unexpected social and political events such as the social unrests in Vietnam targeting Chinese-related businesses, and territorial and other disputes among neighboring countries in Asia may adversely affect our operations in Vietnam. Any social and political unrest, which are beyond our control, may give rise to various risks, such as loss of employment and safety and security risks to persons and properties and in turn adversely affect the Vietnam economy. Any such event may in turn have an adverse impact on our business, financial condition and results of operations.
The economy in Vietnam may be subject to periods of high inflation which could materially and adversely affect our business, financial condition and results of operations as well as our growth prospects.
Government anti-inflation policies and a decline in commodity and petroleum prices have led to a decrease in Vietnam’s inflation rate. While these inflation rates are lower than rates of earlier years, there can be no assurance that the Vietnamese economy will not be subject to future periods of high inflation. Should inflation in Vietnam increase significantly, our costs, including labor costs and transportation costs, are expected to increase. Furthermore, high inflation rates could have an adverse effect on Vietnam’s economic growth, business climate and dampen consumer purchasing power. As a result, a high inflation rate in Vietnam could materially and adversely affect our business, financial condition and results of operations as well as our growth prospects.
Changes in the economic, political and legal environment of Vietnam, and Vietnam’s less developed legal system, may adversely affect our business, financial condition and results of operations.
Our future business operations in Vietnam are subject to the economic, political and legal environment in Vietnam. Vietnam’s economy differs from the economies of many countries in such respects as governmental involvement, level of development, growth rate, allocation of resources and inflation rate. Prior to the 1990s, Vietnam’s economy was largely a planned economy. Since about 1987, increasing emphasis has been placed on the utilization of market forces in the development of the economy. Although state-owned enterprises still account for a substantial portion of Vietnam’s industrial output, the Vietnamese government in general is reducing the level of direct control that it exercises over the economy through state plans and other measures. It is our understanding that there is an increasing level of freedom and autonomy in areas such as resource allocation, production and management and a gradual shift in emphasis to a market economy and enterprise reform.
The legal system of Vietnam also differs from most common law jurisdictions, in that it is a system in which decided legal cases have little precedential value. The laws and regulations are subject to broad and varying interpretations by government officials and courts. For vague regulations, the courts of Vietnam have the power to read implied terms into contracts, adding a further layer of uncertainty. As a result, government officials and courts often express different views from lawyers on the legality, validity and effect of a particular legal document. In addition, the views of governmental authority received on a particular issue have no binding effect or finality, so there can be no assurance that similar issues will be dealt with in a similar way by other governmental authorities. Furthermore, recognition and enforcement of legal rights through Vietnam courts, arbitration centers and administrative agencies in the event of a dispute is uncertain. As part of its transition from a planned economy to a more market-oriented one, the Vietnamese government has implemented a series of economic reforms. In preparation for Vietnam’s accession to the World Trade Organization in 2007, the Vietnamese government had also promulgated a series of laws and regulations on local and foreign investment, including the law on investment, which regulates investments in Vietnam, and the law on enterprises, which sets out the types of corporate vehicle investors may establish to carry out their investment projects. However, conflicting interpretations between local regulators in different provinces and between different ministries may create confusion over key issues. In the context of pursuing and maintaining economic reforms, the Vietnamese government has promulgated other laws and regulations in recent years designed to attract foreign investment and business development in Vietnam, which may intensify the competition in our industry.
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Although the Vietnamese government has made progress in economic reform and the development of laws and regulations, there remain inherent uncertainties and inconsistencies in the interpretation, implementation and enforcement of laws and government policies. Many of the reforms are unprecedented or experimental and may be subject to revision, change or abolition, depending upon the outcome of these experiments. Furthermore, there can be no assurance that the Vietnamese government will continue to pursue policies of economic reform or that any reforms will be successful or the impetus to reform will continue. If any of the changes adversely affect us or our business, or we are unable to capitalize on the economic reform measures of the Vietnamese government, our business, financial condition and results of operations could be adversely affected.
Asset realization in bankruptcy proceedings may be time-consuming and expensive.
Despite the improved Vietnamese law on bankruptcy that came into effect on January 1, 2015, there is significant uncertainty on its implementation and interpretation due to the lack of regulatory guidance and political sensitivities. Accordingly, the bankruptcy process in Vietnam may be complex, uncertain and time-consuming. After bankruptcy is declared, the general meeting of creditors may, subject to certain provisions of law, decide to apply either business rehabilitation or asset liquidation on the enterprise. However, in the event that any creditor or any participant in the general meeting of creditors has any objection to the resolution passed by the general meeting of creditors, it can request for a judicial review of the resolution. Upon review, the judge may convene another general meeting of the creditors if he finds reasonable grounds to do so. The decision to apply either business rehabilitation or asset liquidation on the enterprise must be confirmed by the judge before being implemented by the parties. Due to these complexities, a significant amount of time may pass before a creditor is able to recover from a Vietnamese debtor.
Vietnamese foreign exchange control may limit our ability to utilize our revenue effectively and affect our ability to receive dividends and other payments from our Vietnamese subsidiary.
Our operations are also based in Vietnam and therefore faces the risk of foreign exchange controls limiting our ability to receive dividends from our Vietnamese subsidiary in the future. At present, foreign invested enterprises in Vietnam are, subject to conditions, generally permitted to exchange VND into foreign currency at credit institutions licensed to provide foreign exchange services in Vietnam to repatriate profits and make outward remittances of foreign currency for the purchase of supplies and services, among others, provided that such foreign invested enterprise declares the intended use of the money and provides appropriate supporting documents. Such remittances are restricted to being made through registered accounts at authorized banks which are licensed to operate in Vietnam, and profits must first be converted into foreign currency prior to remittance. While under the Vietnamese government’s current foreign exchange policy, there is a low risk of foreign exchange controls restricting our ability to freely utilize our revenue and to receive dividends from our Vietnamese subsidiary, there can be no assurance that the Vietnamese government will not, in future, extend its foreign exchange controls to restrict or prevent profits from being repatriated by foreign invested entities. Such a change would limit our ability to receive dividends from our Vietnamese subsidiary, through which all of our revenue is generated, and would cause a material and adverse effect on our business, financial condition and results of operations.
The VND may be subject to foreign exchange controls imposed by the Vietnamese government.
In Vietnam, the currency is VND, which is not generally freely convertible into other currencies. Under certain conditions, such as fulfilment of Vietnam’s financial obligations, the Vietnamese government allows foreign invested enterprises to convert VND into other currencies for repatriation of profits from their Vietnam operations abroad. However, there can be no assurance that such rules and regulations will not be subject to change in the future and any tightening of foreign control laws in Vietnam may impair our ability to repatriate profits from our Vietnamese operations to our Company. If any of the above occurs, our business, results of operations and financial condition may be materially and adversely affected.
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Risks Related to Regulations and Litigations
We are subject to extensive and evolving regulatory requirements, non-compliance with which, or changes in which, may materially and adversely affect our business and prospects.
Many of our business operations are highly regulated. See “Regulation.” Our business is subject to laws, regulations, licensing and accreditation requirements in Singapore and other countries where we may operate. Such laws, regulations, licensing and accreditation requirements cover many aspects of our business, including, but not limited to:
● | the conduct of our operations; | |
● | the provision of services; | |
● | the quality of medical facilities, equipment and services; | |
● | the purchase and sale of medications and pharmaceutical drugs; | |
● | the handling and disposal of regulated items and associated environmental regulations for medical facilities; | |
● | the qualifications of medical and other clinical personnel; and | |
● | the confidentiality and maintenance of, and security issues associated with, health-related information and medical records. |
The qualifications and practicing activities of our medical professionals, nurses and assistants are strictly regulated under the laws and regulations of the jurisdictions in which we may operate, as well as by other applicable codes of professional conduct or ethics. If our medical professionals and nurses fail to comply with their professional licensing requirements, we may be subject to administrative penalties including fines, loss of licenses or restrictions on our medical facility operations, which could materially and adversely affect our business and reputation.
In addition, there are various licensing requirements governing different aspects of our business with which we must comply and which may impose conditions that may restrict our operations. Regulatory authorities may exercise broad discretion in assessing our compliance with licensing requirements, varying licensing requirements or introducing new licensing requirements, and we may incur significant costs and suffer operational restrictions that could be harmful to our business.
Our pharmaceutical services business is also regulated by various healthcare laws and regulations and we are subject to, among others, licensing and certification requirements, product registration requirements, quality and safety standards and periodic renewal and reassessment procedures. For example, we are required to possess various permits, licenses or certifications to provide our services and products, and the third parties on whom we rely to sell and distribute our products are subject to similar requirements. If we or these third parties are unable to obtain or renew such permits, licenses or certifications in a timely manner, or at all, we and/or such third parties may not be able to provide the relevant services and/or sell or distribute the relevant products in the relevant jurisdiction and our business operations in such jurisdiction may be materially disrupted. As a licensed wholesaler of pharmaceutical products, we are required by the relevant laws and regulations to only supply such products to certain specified persons, such as licensed retail pharmacies, licensed healthcare institutions and qualified healthcare professionals. While we have implemented measures to prevent unauthorized persons from purchasing pharmaceutical products from us (for example, we require persons who wish to open a purchasing account with us to provide us with copies of the relevant licenses to establish that they are registered healthcare professionals and we only deliver to the address of the account holder), there is a risk that unauthorized persons may nevertheless, fraudulently or otherwise, manage to create a purchasing account with us and/or acquire pharmaceutical products from us. In such an event, we may be exposed to civil and criminal liability under the relevant laws and regulations.
Furthermore, the introduction of new services and products may require us to comply with additional, yet undetermined, laws and regulations. Compliance may require obtaining appropriate permits, licenses or certificates as well as expending additional resources to monitor developments in the relevant regulatory environment. The failure to adequately comply with these future laws and regulations may delay, or possibly prevent, some of our products or services from being offered to users, which may have a material adverse effect on our business, financial condition, results of operations and prospects.
Changes to existing laws, regulations and guidelines, or the introduction of new laws, regulations and guidelines could also have a negative impact on our operations, even if such laws and regulations are not directly applicable to us. Should there be any subsequent modifications, additions or new restrictions to the current compliance standards, we may incur additional costs or administrative burdens in complying with the new or modified standards which may materially and adversely affect our profitability and, consequently, our business, financial condition, results of operations and prospects.
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As we expand our international operations, we will increasingly face political, legal and compliance, operational, regulatory, economic and other risks that we do not face or are more significant than in our domestic operations. Our exposure to these risks is expected to increase.
As we expand our international operations, we will increasingly face political, legal and compliance, operational, regulatory, economic and other risks that we do not face or that are more significant than in our domestic operations. These risks vary widely by country and include varying regional and geopolitical business conditions and demands, government intervention and censorship, discriminatory regulation, nationalization or expropriation of assets and pricing constraints. Our international services and products need to meet country-specific user preferences as well as country-specific legal requirements, including those related to licensing, digital health, privacy, data storage, location, protection and security. Our ability to conduct digital health services internationally is subject to the applicable laws governing remote healthcare and the practice of medicine in such location, and the interpretation of these laws is evolving and vary significantly from country to county and are enforced by governmental, judicial and regulatory authorities with broad discretion. Nonetheless, we cannot be certain that our interpretation of such laws and regulations is correct in how we structure our operations, our arrangements with physicians, services agreements and customer arrangements.
Our international operations increase our exposure to, and require us to devote significant management resources to implement controls and systems to comply with the privacy and data protection laws of non-U.S. jurisdictions and the anti-bribery, anti-corruption and anti-money laundering laws of the U.S. (including the Foreign Corrupt Practices Act of 1977) and the United Kingdom (including the Bribery Act) and similar laws in other jurisdictions. Implementing our compliance policies, internal controls and other systems upon our expansion into new countries and geographies may require the investment of considerable management time and financial and other resources over a number of years before any significant revenues or profits are generated. Violations of these laws and regulations could result in fines, criminal sanctions against us, our officers or employees, restrictions or outright prohibitions on the conduct of our business and significant brand and reputational harm. We must regularly reassess the size, capability and location of our global infrastructure and make appropriate changes, and must have effective change management processes and internal controls in place to address changes in our business and operations.
Our success depends, in part, on our ability to anticipate these risks and manage these difficulties, and the failure to do so could have a material adverse effect on our business, operating results, financial position, brand, reputation and/or long-term growth. Our international operations require us to overcome logistical and other challenges based on differing languages, cultures, legal and regulatory schemes and time zones. Our international operations encounter labor laws, customs and employee relationships that can be difficult, less flexible than in our domestic operations and expensive to modify or terminate. In some countries where we are required to, or choose to, operate with local business partners in the future, this may require us to manage our partner relationships and may reduce our operational flexibility and ability to quickly respond to business challenges.
We are subject to evolving laws, regulations, standards and policies, and any actual or perceived failure to comply could harm our brand and reputation, subject us to significant fines and liability, or otherwise adversely affect our business.
The laws, regulations, standards and policies governing the telehealth solutions business vary from jurisdiction to jurisdiction. The application of these types of laws to our operations continues to be difficult to predict but could pose operational challenges for us in the future. As laws vary from jurisdiction to jurisdiction, our services must be continually monitored for compliance with the various rules and requirements, which may change from time to time. Furthermore, the costs of compliance, including remediation of any discovered issues and any changes to our operations mandated by new or amended laws, may be significant, and any failures to comply could result in additional expenses, delays or fines. The applicable laws, regulations, standards and policies in the different jurisdictions in which our users are located continue to rapidly change, which increases the likelihood of a patchwork of complex or conflicting regulations, or which could adversely increase our compliance costs or otherwise materially and adversely affect our business, financial condition, results of operations and prospects.
We may be involved in certain legal proceedings from time to time. Any adverse decision in such proceedings may render us liable to liabilities and may adversely affect our business, financial condition, results of operations and prospects.
We may be involved in legal proceedings from time to time. In addition to the related costs, managing and defending in legal proceedings can divert our management’s attention from our business. We may also need to pay damages to settle claims with a substantial amount of cash. Any of these could have a material adverse effect on our business, financial condition, results of operations and prospects.
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Risks Related to Our Class A Ordinary Shares and This Offering
There has been no public market for our Class A Ordinary Shares prior to the completion of this offering, and you may not be able to resell our Class A Ordinary Shares at or above the price you pay for them, or at all.
Prior to the completion of this offering, there has not been a public market for our Class A Ordinary Shares. We plan to apply for the listing of our Class A Ordinary Shares on the Nasdaq Capital Market. An active public market for our Class A Ordinary Shares, however, may not develop or be sustained after the offering, in which case the market price and liquidity of our Class A Ordinary Shares will be materially and adversely affected.
The validity of certain issuances and transfers of shares of our Company cannot be verified.
We are subject to laws and regulations governing our corporate administration and management, including corporate laws and regulations in relation to the issuances and transfers of shares of our Company, and there is no assurance that we will be able to maintain at all times full compliance with such laws and regulations. We have in the past encountered and may encounter corporate secretarial irregularities, which may conflict with or affect the validity of corporate actions we take or have taken. These past corporate secretarial irregularities include records of waivers or approvals of shareholders of their rights of pre-emption and rights of first refusal under the memorandum and articles of association of our Company effective at the relevant time and/or under the shareholder agreement, subscription agreement or investment agreement entered into with such shareholders not having been obtained prior to issuances and transfers of shares of our Company.
In the event such legal proceedings or claims are commenced against our Company, we may have to devote substantial time and resources to defending such proceedings and such proceedings may also divert the attention of our management from our core business. Further, in the event a claimant successfully challenges the validity of a transfer or allotment, certain corporate actions may be considered void or we may be required to issue or transfer certain shares to the claimant. If the foregoing events occur, it could adversely affect our business, financial condition, results of operations and prospects.
The initial public offering price for our Class A Ordinary Shares may not be indicative of prices that will prevail in the trading market and such market prices may be volatile.
The initial public offering price for our Class A Ordinary Shares will be determined by negotiations between us and the Underwriters, and may not bear a direct relationship to our earnings, book value, or any other indicia of value. We cannot assure you that the market price of our Class A Ordinary Shares will not decline significantly below the initial public offering price. The financial markets in the United States and other countries have experienced significant price and volume fluctuations in the last few years. Volatility in the price of our Class A Ordinary Shares may be caused by factors outside of our control and may be unrelated or disproportionate to changes in our results of operations.
You will experience immediate and substantial dilution in the net tangible book value of Class A Ordinary Shares purchased.
The initial public offering price of our Class A Ordinary Shares is substantially higher than the (pro forma) net tangible book value per share of our Class A Ordinary Shares. Consequently, when you purchase our Class A Ordinary Shares in the offering, upon completion of the offering, you will incur immediate dilution of $ per share, assuming an initial public offering price of $ . See “Dilution”. In addition, you may experience further dilution to the extent that additional Class A Ordinary Shares are issued upon exercise of outstanding options we may grant from time to time.
If we fail to implement and maintain an effective system of internal controls, we may be unable to accurately or timely report our results of operations or prevent fraud, and investor confidence and the market price of our Class A Ordinary Shares may be materially and adversely affected.
Prior to the completion of this offering, we have been a private company with limited accounting personnel. Furthermore, prior to the completion of this offering, our management has not performed an assessment of the effectiveness of our internal control over financial reporting, and our independent registered public accounting firm has not conducted an audit of our internal control over financial reporting. Effective internal control over financial reporting is necessary for us to provide reliable financial reports and, together with adequate disclosure controls and procedures, is designed to prevent fraud.
Our failure to implement and maintain effective internal controls over financial reporting could result in errors in our financial statements that could result in a restatement of our financial statements, cause us to fail to meet our reporting obligations and cause investors to lose confidence in our reported financial information, which may result in volatility in and a decline in the market price of our Class A Ordinary Shares.
Upon the completion of this offering, we will become a public company in the United States subject to the Sarbanes-Oxley Act of 2002. Section 404 of the Sarbanes-Oxley Act of 2002, or Section 404, will require that we include a report of management on our internal control over financial reporting in our annual report on Form 20-F. In addition, if we cease to be an “emerging growth company” as such term is defined in the JOBS Act, our independent registered public accounting firm must attest to and report on the effectiveness of our internal control over financial reporting on an annual basis. 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, after we become a public company, our reporting obligations may place a burden 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.
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During the course of documenting and testing our internal control procedures, in order to satisfy the requirements of Section 404, we may identify material weaknesses and deficiencies in our internal control over financial reporting. The Public Company Accounting Oversight Board, or PCAOB, has defined a material weakness as “a deficiency, or a combination of deficiencies in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim statements will not be prevented or detected on a timely basis”.
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 in accordance with Section 404. Generally speaking, if we fail to achieve and maintain an effective internal control environment, we could suffer material misstatements in our financial statements and fail to meet our 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 Class A Ordinary Shares. Additionally, ineffective internal control over financial reporting could expose us to increased risk of fraud, misuse of corporate assets and legal actions under the United States securities laws and subject us to potential delisting from Nasdaq, to regulatory investigations and to civil or criminal sanctions.
We are an emerging growth company within the meaning of the Securities Act and may take advantage of certain reduced reporting requirements.
We are an “emerging growth company”, as defined in the JOBS Act, and we may take advantage of certain exemptions from various requirements applicable to other public companies that are not emerging growth companies including, most significantly, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act for so long as we are an emerging growth company. As a result, if we elect not to comply with such auditor attestation requirements, our investors may not have access to certain information they may deem important.
The JOBS Act also provides that an emerging growth company does not need to comply with any new or revised financial accounting standards until such date that a private company is otherwise required to comply with such new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the extended transition period, although we have already adopted certain new and revised accounting standards based on transition guidance permitted under such standards. As a result of this election, our future financial statements may not be comparable to other public companies that comply with the public company effective dates for these new or revised accounting standards.
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We will incur substantial increased costs as a result of being a public company.
Upon consummation of this offering, we will incur significant legal, accounting, and other expenses as a public company that we did not incur as a private company. The Sarbanes-Oxley Act, as well as rules subsequently implemented by the SEC and Nasdaq, impose various requirements on the corporate governance practices of public companies.
Compliance with these rules and regulations increases our legal and financial compliance costs and makes some corporate activities more time-consuming and costlier. In addition, we incur additional costs associated with our public company reporting requirements. It may also be more difficult for us to find qualified persons to serve on our Board or as executive officers.
We are an “emerging growth company,” as defined in the JOBS Act and will remain an emerging growth company until the earlier of (a) the last day of the fiscal year in which the fifth anniversary of the completion of this offering occurs; (b) the last day of the fiscal year in which we have total annual gross revenue of at least US$1.235 billion; (c) the date on which we are deemed to be a “large accelerated filer” under the Exchange Act, which means the market value of our Class A Ordinary Shares that are held by non-affiliates is US$700.00 million or more as of the last business day of our most recently completed second fiscal quarter; and (d) the date on which we have issued more than US$1.0 billion in non-convertible debt during the prior three-year period. We may choose to take advantage of some, but not all, of the available exemptions. An emerging growth company may take advantage of specified reduced reporting and other requirements that are otherwise applicable generally to public companies. These provisions include exemption from the auditor attestation requirement under Section 404 in the assessment of the emerging growth company’s internal control over financial reporting and permission to delay adopting new or revised accounting standards until such time as those standards apply to private companies.
After we are no longer an “emerging growth company”, or until five years following the completion of our initial public offering, whichever is earlier, we expect to incur significant additional expenses and devote substantial management effort toward ensuring compliance with the requirements of Section 404 and the other rules and regulations of the SEC. For example, as a public company, we have been required to increase the number of independent directors and adopt policies regarding internal controls and disclosure controls and procedures.
We are currently evaluating and monitoring developments with respect to these rules and regulations, and we cannot predict or estimate with any degree of certainty the amount of additional costs we may incur or the timing of such costs.
Substantial future sales of our Class A Ordinary Shares or the anticipation of future sales of our Class A Ordinary Shares in the public market could cause the price of our Class A Ordinary Shares to decline.
Sales of substantial amounts of our Class A Ordinary Shares in the public market after this offering, or the perception that these sales could occur, could cause the market price of our Class A Ordinary Shares to decline. An aggregate of 19,671,750 Class A Ordinary Shares are issued and outstanding before the consummation of this offering and Class A Ordinary Shares will be issued and outstanding immediately after the consummation of this offering. Sales of these shares into the market could cause the market price of our Class A Ordinary Shares to decline.
We do not intend to pay dividends for the foreseeable future.
We currently intend to retain any future earnings to finance the operation and expansion of our business, and we do not expect to declare or pay any dividends in the foreseeable future. As a result, you may only receive a return on your investment in our Class A Ordinary Shares if the market price of our Class A Ordinary Shares increases.
If securities or industry analysts do not publish research or reports about our business, or if they publish a negative report regarding our Class A Ordinary Shares, the price of our Class A Ordinary Shares and trading volume could decline.
Any trading market for our Class A Ordinary Shares may depend in part on the research and reports that industry or securities analysts publish about us or our business. We do not have any control over these analysts. If one or more of the analysts who cover us downgrade us, the price of our Class A Ordinary Shares would likely decline. If one or more of these analysts cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which could cause the price of our Class A Ordinary Shares and the trading volume to decline.
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The trading price of our Class A Ordinary Shares may be volatile or may decline regardless of our operating performance, which could result in substantial losses to investors.
There have been instances of extreme stock price run-ups followed by rapid price declines and strong stock price volatility with a number of recent initial public offerings, especially among companies with relatively smaller public floats. As a relatively small-capitalized company with relatively small public float after this offering, we may experience greater stock price volatility, lower trading volume and less liquidity than large-capitalized companies. In particular, our Class A Ordinary Shares may be subject to rapid and substantial price volatility, low volumes of trades and large spreads in bid and ask prices due to factors beyond our control. 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 Class A Ordinary Shares. In addition to market and industry factors, the price and trading volume for our shares may be highly volatile for factors specific to our own operations, including the following:
(a) | actual or anticipated fluctuations in our revenue and other operating results; | |
(b) | the financial projections we may provide to the public, any changes in these projections or our failure to meet these projections; | |
(c) | actions of securities analysts who initiate or maintain coverage of us, changes in financial estimates by any securities analysts who follow our company, or our failure to meet these estimates or the expectations of investors; | |
(d) | announcements by us or our competitors of significant products or features, technical innovations, acquisitions, strategic partnerships, joint ventures, or capital commitments; | |
(e) | additions or departures of key personnel; | |
(f) | release of lock-up or other transfer restrictions on our issued and outstanding equity securities or sales of additional equity securities; and | |
(g) | potential litigation or regulatory investigations. |
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. In the past, stockholders 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, financial condition, results of operations and prospects.
Our dual-class voting structure will limit your ability to influence corporate matters requiring shareholder approval, and could discourage others from pursuing any change of control transactions that holders of our Class A Ordinary Shares may view as beneficial.
Our authorized share capital is divided into Class A Ordinary Shares and Class B Ordinary Shares. Holders of Class A Ordinary Shares will be entitled to one vote per share, while holders of Class B Ordinary Shares will be entitled to 10 votes per share. Each Class B Ordinary Share is convertible into one Class A Ordinary Share at any time by the holder thereof, while Class A Ordinary Shares are not convertible into Class B Ordinary Shares under any circumstances. We will issue Class A Ordinary Shares in this offering.
Upon the completion of this offering, Siaw Tung Yeng, Teoh Pui Pui, Siaw Tun Mine and Denis Christopher Nyam Ngian Kwong will beneficially own all of our then issued and outstanding Class B Ordinary Shares. These Class B Ordinary Shares will constitute approximately % of our total issued and outstanding share capital immediately after the completion of this offering and approximately % of the aggregate voting power of our total issued and outstanding share capital immediately after the completion of this offering, assuming the underwriter does not exercise the over-allotment option. As a result of the dual-class share structure and the concentration of ownership, holders of Class B Ordinary Shares will have considerable influence over corporate matters requiring shareholder approval, such as election of directors, amendment of constitutional documents including our memorandum and articles of association, and significant corporate transactions. Such holders may take actions that are not in the best interest of us or our other shareholders. This concentration of ownership may also discourage, delay or prevent a change in control of our Company, which could have the effect of depriving our other shareholders of the opportunity to receive a premium for their shares as part of a sale of our Company and may reduce the price of our Class A Ordinary Shares. This concentrated control will limit your ability to influence corporate matters and could discourage others from pursuing any potential merger, takeover or other change of control transactions that holders of Class A Ordinary Shares may view as beneficial.
Our management has broad discretion to determine how to use the funds raised in the offering and may use them in ways that may not enhance our results of operations or the price of our Class A Ordinary Shares.
We anticipate that we will use the net proceeds from this offering for working capital and other corporate purposes. See “Use of Proceeds.” However, our management will have significant discretion as to the use of the net proceeds to us from this offering and could spend the net proceeds in ways that do not improve our results of operations or enhance the trading price of our Class A Ordinary Shares. The net proceeds from this offering may be placed in investments that do not produce income or that lose value. You will not have the opportunity, as part of your investment decision, to assess whether proceeds are being used appropriately.
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If we cease to qualify as a foreign private issuer, we would be required to comply fully with the reporting requirements of the Exchange Act applicable to U.S. domestic issuers, and we would incur significant additional legal, accounting and other expenses that we would not incur as a foreign private issuer.
We expect to qualify as a foreign private issuer upon the completion of this offering. As a foreign private issuer, we will be exempt from the rules under the Exchange Act prescribing the furnishing and content of proxy statements, and our officers, directors and principal shareholders will be exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act. In addition, we will not be required under the Exchange Act to file periodic reports and financial statements with the SEC as frequently or as promptly as United States domestic issuers, and we will not be required to disclose in our periodic reports all of the information that United States domestic issuers are required to disclose. While we currently expect to qualify as a foreign private issuer immediately following the completion of this offering, we may cease to qualify as a foreign private issuer in the future, in which case we would incur significant additional expenses that could have a material adverse effect on our results of operations.
As we are a foreign private issuer and are exempt from certain Nasdaq corporate governance standards applicable to U.S. issuers, you will have less protection than you would have if we were a domestic issuer.
Nasdaq listing rules require listed companies to have, among other things, a majority of its board members be independent. As a foreign private issuer, however, we are permitted to, and we may follow home country practice in lieu of the above requirements, or we may choose to comply with the above requirement within one year of listing. The corporate governance practice in our home country, the Cayman Islands, does not require a majority of our Board to consist of independent directors. Thus, although a director must act in the best interests of the Company, it is possible that fewer Board members will be exercising independent judgment and the level of Board oversight on the management of our company may decrease as a result. In addition, Nasdaq listing rules also require U.S. domestic issuers to have a compensation committee, a nominating/corporate governance committee composed entirely of independent directors, and an audit committee with a minimum of three members. We, as a foreign private issuer, are not subject to these requirements. Nasdaq listing rules may require shareholder approval for certain corporate matters, such as requiring that shareholders be given the opportunity to vote on all equity compensation plans and material revisions to those plans, certain ordinary share issuances. We intend to comply with the requirements of Nasdaq listing rules in determining whether shareholder approval is required on such matters and to appoint a nominating and corporate governance committee. We may, however, consider following home country practice in lieu of the requirements under Nasdaq listing rules with respect to certain corporate governance standards which may afford less protection to investors.
Although as a foreign private issuer we are exempt from certain corporate governance standards applicable to U.S. issuers, if we cannot satisfy, or continue to satisfy, the initial listing requirements and other rules of the Nasdaq Capital Market, our securities may not be listed or may be delisted, which could negatively impact the price of our securities and your ability to sell them.
We will seek to have our securities approved for listing on the Nasdaq Capital Market upon consummation of this offering. We cannot assure you that we will be able to meet those initial listing requirements at that time. Even if our securities are listed on the Nasdaq Capital Market, we cannot assure you that our securities will continue to be listed on the Nasdaq Capital Market.
In addition, following this offering, in order to maintain our listing on the Nasdaq Capital Market, we will be required to comply with certain rules of the Nasdaq Capital Market, including those regarding minimum stockholders’ equity, minimum share price, minimum market value of publicly held shares, and various additional requirements. Even if we initially meet the listing requirements and other applicable rules of the Nasdaq Capital Market, we may not be able to continue to satisfy these requirements and applicable rules. If we are unable to satisfy the Nasdaq Capital Market criteria for maintaining our listing, our securities could be subject to delisting.
If the Nasdaq Capital Market does not list our securities, or subsequently delists our securities from trading, we could face significant consequences, including:
(a) | a limited availability for market quotations for our Class A Ordinary Shares; | |
(b) | reduced liquidity with respect to our Class A Ordinary Shares; | |
(c) | a determination that our Class A Ordinary Shares are “penny stock”, which will require brokers trading in our Class A Ordinary Shares to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our Class A Ordinary Shares; | |
(d) | a limited amount of news and analyst coverage; and | |
(e) | a decreased ability to issue additional securities or obtain additional financing in the future. |
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Our Board may decline to register transfers of Class A Ordinary Shares in certain circumstances.
Except in connection with the settlement of trades, transactions or transfers of Class A Ordinary Shares entered into through the facilities of a stock exchange or automated quotation system on which our Class A Ordinary Shares are listed or traded from time to time, our Board may, in its sole discretion, decline to register any transfer of any Ordinary Share which is not fully paid up or on which we have a lien. Our directors may also decline to register any transfer of any Ordinary Share unless (i) the instrument of transfer is lodged with us, accompanied by the certificate for the shares to which it relates and such other evidence as our board of directors may reasonably require to show the right of the transferor to make the transfer; (ii) the instrument of transfer is in respect of only one class of shares; (iii) the instrument of transfer is properly stamped, if required; (iv) in the case of a transfer to joint holders, the number of joint holders to whom the share is to be transferred does not exceed four; (v) the shares transferred are free of any lien in favor of us; and (vi) a fee of such maximum sum as the Nasdaq Capital Market may determine to be payable, or such lesser sum as our Board may from time to time require, is paid to us in respect thereof.
If our directors refuse to register a transfer they shall, within two months after the date on which the instrument of transfer was lodged, send to each of the transferor and the transferee notice of such refusal. The registration of transfers may, after compliance with any notice required in accordance with the rules of the relevant stock exchange, be suspended and our register of members closed at such times and for such periods as our Board may from time to time determine, provided, however, that the registration of transfers shall not be suspended nor the register of members closed for more than 30 days in any year.
This, however, is unlikely to affect market transactions of the Class A Ordinary Shares purchased by investors in the public offering. Once the Class A Ordinary Shares have been listed on the Nasdaq Capital Market, the legal title to such Class A Ordinary Shares and the registration details of those Class A Ordinary Shares in the Company’s register of members will remain with Depository Trust Company (“DTC”)/Cede & Co. All market transactions with respect to those Class A Ordinary Shares will then be carried out without the need for any kind of registration by the directors, as the market transactions will all be conducted through the “DTC” systems.
You may be unable to present proposals before annual general meetings or extraordinary general meetings not called by shareholders.
Cayman Islands law provides shareholders with only limited rights to requisition a general meeting, and does not provide shareholders with any right to put any proposal before a general meeting. These rights, however, may be provided in a company’s articles of association. Our Articles of Association allow our shareholders holding shares which carry in aggregate not less than one-third of all votes attaching to the issued and outstanding shares of the Company entitled to vote at general meetings to requisition an extraordinary general meeting of our shareholders, in which case our board is obliged to convene an extraordinary general meeting and to put the resolutions so requisitioned to a vote at such meeting. Advance notice of not less than seven days is required for the convening of our annual general shareholders’ meeting (if any) and any other general meeting of our shareholders. A quorum required for a general meeting of shareholders consists of, at the time when the meeting proceeds to business, at least one shareholder present or by proxy, representing not less than one-third of all votes attaching to the issued and outstanding shares in the Company entitled to vote at such general meeting of the Company.
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If we are classified as a passive foreign investment company, U.S. taxpayers who own our Class A Ordinary Shares may have adverse U.S. federal income tax consequences.
A non-U.S. corporation such as ourselves will be classified as a passive foreign investment company, which is known as a PFIC, for any taxable year if, for such year, either:
(a) | At least 75% of our gross income for the year is passive income; or | |
(b) | The average percentage of our assets (determined at the end of each quarter) during the taxable year which produce passive income or which are held for the production of passive income is at least 50%. |
Passive income generally includes dividends, interest, rents and royalties (other than rents or royalties derived from the active conduct of a trade or business), and gains from the disposition of passive assets.
Based on the current and projected composition of our income and assets (including the amount of cash we raise in this offering), and the expected value of our assets, including goodwill, which is based in part on the expected price of our Class A Ordinary Shares in the offering, we do not expect to be a PFIC for the current taxable year. However, because PFIC status is determined on an annual basis, and therefore our PFIC status for the current taxable year and any future taxable year will depend upon the future composition of our income and assets, there can be no assurance that we will not be a PFIC for any taxable year.
If we are a PFIC for any taxable year (or portion thereof) during which a U.S. taxpayer holds Class A Ordinary Shares, we generally would continue to be treated as a PFIC with respect to that U.S. taxpayer for all succeeding years during which the U.S. taxpayer holds such Class A Ordinary Shares, even if we ceased to meet the threshold requirements for PFIC status. In such case, such a U.S. taxpayer generally will be subject to adverse U.S. federal income tax consequences, including (i) the treatment of all or a portion of any gain on disposition as ordinary income, (ii) the application of a deferred interest charge on such gain and the receipt of certain dividends and (iii) compliance with certain reporting requirements. We do not intend to provide the information that would enable investors to make a qualified electing fund election that could mitigate the adverse U.S. federal income tax consequences should we be a PFIC. You are urged to consult your tax advisor concerning the U.S. federal income tax consequences of owning and disposing of Class A Ordinary Shares if we are to become classified as a PFIC.
For a more detailed discussion of the application of the PFIC rules to us and the consequences to U.S. taxpayers if we were determined to be a PFIC, see “Taxation— United States Federal Income Tax Considerations.”
Our shareholders may be held liable for claims by third parties against us to the extent of distributions received by them upon redemption of their shares.
If we make a liquidating distribution, any distributions received by shareholders could be viewed as an unlawful payment if it was proved that immediately following the date on which the distribution was made, we were unable to pay our debts as they fall due in the ordinary course of business. As a result, a liquidator could seek to recover some or all amounts received by our shareholders. Furthermore, our directors may be viewed as having breached their fiduciary duties to us or our creditors and/or may have acted in bad faith, thereby exposing themselves and our company to claims, by paying public shareholders prior to addressing the claims of creditors.
We cannot assure you that claims will not be brought against us for these reasons. Under Cayman Islands law, a Cayman Islands company may pay a dividend out of either profit or its share premium account, provided that in no circumstances may a dividend be paid out of the share premium account if this would result in the company being unable to pay its debts as they fall due in the ordinary course of business. Our Company and any director or manager of the Company who knowingly and willfully authorizes or permits any distribution or dividend to be paid out of our share premium account while we were unable to pay our debts as they fall due in the ordinary course of business would commit an offense and may be liable to a fine of Cayman Islands dollars 15,000 and to imprisonment for five years in the Cayman Islands.
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You may face difficulties in protecting your interests as a shareholder, as Cayman Islands law provides substantially less protection when compared to the laws of the U.S. and it may be difficult for a shareholder of ours to effect service of process or to enforce judgements obtained in the U.S. courts.
We are an exempted company incorporated under the laws of the Cayman Islands. Our corporate affairs are governed by our Memorandum and Articles of Association, as amended and by the Companies Act (As Revised) and common law of the Cayman Islands. The rights of shareholders to take legal action against our directors, officers and us, 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 English common law. Decisions of the English courts are generally of persuasive authority but are not binding on the courts of 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 precedents in the United States. In particular, the Cayman Islands has a different body of securities laws as compared to the United States, and provides significantly less protection to investors. In addition, Cayman Islands companies may not have standing to initiate a shareholder derivative action before the U.S. federal courts. There is no statutory recognition in the Cayman Islands of judgments obtained in the United States, although the courts of the Cayman Islands will generally recognize and enforce a non-penal judgment of a foreign court of competent jurisdiction without retrial on the merits.
The courts of the Cayman Islands are unlikely (i) to recognize or enforce judgments of courts of the United States predicated upon the civil liability provisions of the federal securities laws of the United States or any state securities laws; and (ii) in original actions brought in the Cayman Islands, to impose liabilities predicated upon the civil liability provisions of the federal securities laws of the United States or any state securities laws, so far as the liabilities imposed by those provisions are penal in nature. In those circumstances, although there is no statutory enforcement in the Cayman Islands of judgments obtained in the United States, the courts of the Cayman Islands will recognize and enforce a foreign money judgment of a foreign court of competent jurisdiction without retrial on the merits based on the principle that a judgment of a competent foreign court imposes upon the judgment debtor an obligation to pay the sum for which judgment has been given provided certain conditions are met. For a foreign judgment to be enforced in the Cayman Islands, such judgment must be final and conclusive and for a liquidated sum, and must not be in respect of taxes or a fine or penalty, inconsistent with a Cayman Islands judgment in respect of the same matter, impeachable on the grounds of fraud or obtained in a manner, or be of a kind the enforcement of which is, contrary to natural justice or the public policy of the Cayman Islands (awards of punitive or multiple damages may well be held to be contrary to public policy). A Cayman Islands Court may stay enforcement proceedings if concurrent proceedings are being brought elsewhere.
Currently, all of our operations are conducted outside the United States, and substantially all of our assets are located outside the United States. All of our directors and officers are nationals or residents of jurisdictions other than the United States and all or a substantial portion of their assets are located outside the United States. As a result, it may be difficult or impossible for a shareholder to bring an action against us or against these individuals outside of the United States, or to enforce against us or them judgments obtained in U.S. courts, including judgments predicated upon the civil liability provisions of the securities laws of the United States or any state in 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, a list of the current directors of the company, the register of mortgages and charges and any special resolutions passed by our shareholders) or to obtain copies of lists of shareholders of these companies. Our directors are not required under our memorandum and articles of association to make our corporate records available for inspection by our shareholders. This may make it more difficult for you to obtain the information needed to establish any facts necessary for a shareholder resolution or to solicit proxies from other shareholders in connection with a proxy contest.
Certain corporate governance practices in the Cayman Islands, which is our home country, differ significantly from requirements for companies incorporated in other jurisdictions such as the United States. To the extent we choose to follow home country practice with respect to corporate governance matters, our shareholders may be afforded less protection than they otherwise would under rules and regulations applicable to U.S. domestic issuers.
As a result of all of the above, our shareholders may have more difficulty in protecting their interests through actions against us or our officers, directors or major shareholders than would shareholders of a corporation incorporated in the United States. For a discussion of significant differences between the provisions of the Companies Act and the laws applicable to companies incorporated in a U.S. state and their shareholders, see “Description of Share Capital — Differences in Corporate Law.”
The offering price of the primary offering and resale offering could differ.
The offering price of our Class A Ordinary Shares in the initial public offering has been determined by negotiations between the Company and the underwriter. The offering price in the initial public offering bears no relationship to our assets, earnings or book value, or any other objective standard of value. The selling shareholders may sell the resale shares at prevailing market prices or privately negotiated prices after close of the offering and listing of the Class A Ordinary Shares on Nasdaq. Therefore, the offering prices of the initial public offering and resale offering could differ. As a result, the purchasers in the resale offering could pay more or less than the offering price in the primary offering.
Resales of our Class A Ordinary Shares in the public market by the Selling Shareholders may cause the market price of our Ordinary Shares to decline.
Resales of 3,091,667 Class A Ordinary Shares by our Selling Shareholders from time to time, after the closing of this offering, could compete with the resale of the Class A Ordinary Shares purchased from this offering and have the effect of depressing the market price for our Class A Ordinary Shares.
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Special Note regarding Forward-Looking Statements
This prospectus contains forward-looking statements that reflect our current expectations and views of future events. The forward-looking statements are contained principally in the sections entitled “Prospectus Summary,” “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business.” Known and unknown risks, uncertainties and other factors, including those listed under “Risk Factors,” may cause our actual results, performance or achievements to be materially different from those expressed or implied by the forward-looking statements.
You can identify some of these forward-looking statements by words or phrases such as “aim,” “anticipate,” “believe,” “continue,” “estimate,” “expect,” “hope,” “intend,” “is/are likely to,” “may,” “plan,” “potential,” “predict,” “target,” “will,” or other similar expressions. 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:
● | our ability to execute our strategies, manage growth and maintain our corporate culture; |
● | our future business development, financial conditions and results of operations; |
● | our expectations regarding demand for and market acceptance of our products and services; |
● | our ability to successfully compete in the highly competitive markets; |
● | our expectations regarding our relationships with service partners; |
● | the safety, affordability, and convenience of our platform and our offerings; |
● | our anticipated investments in new products and offerings, and the effect of these investments on our results of operations; |
● | our ability to successfully enter into new geographies, expand our presence in countries in which we are limited by regulatory restrictions, and manage our international expansion; |
● | our expected growth in the number of platform users, and our ability to promote our brand and attract and retain platform users; |
● | anticipated technology trends and developments and our ability to address those trends and developments with our products and offerings; |
● | our ability to identify, recruit, and retain skilled personnel, including key members of senior management; |
● | our ability to maintain, protect, and enhance our intellectual property rights; |
● | our ability to successfully acquire and integrate companies and assets; |
● | changes in the need for capital and the availability of financing and capital to fund these needs; |
● | our ability to prevent disturbance to our IT systems; |
● | our ability to successfully defend litigation brought against us; |
● | relevant government policies and regulations relating to our industry; |
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● | man-made or natural disasters, including war, acts of international or domestic terrorism, civil disturbances, occurrences of catastrophic events and acts of God such as floods, earthquakes, wildfires, typhoons and other adverse weather and natural conditions that affect our business or assets; |
● | our ability to implement, maintain, and improve effective internal controls; |
● | our anticipated uses of net proceeds from this offering; and | |
● | other matters beyond our control. |
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 “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Business,” “Regulation” and other sections in this prospectus. You should read thoroughly this prospectus 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 prospectus contains certain data and information that we obtained from various government and private publications. Statistical data in these publications also include projections based on a number of assumptions. The industries in which we operate may not grow at the rate projected by market data, or at all. Failure of those industries to grow at the projected rate may have a material and adverse effect on our business and the market price of the Class A Ordinary Shares. In addition, the rapidly evolving nature of this industry results in significant uncertainties for any projections or estimates relating to the growth prospects or future condition of our market. Furthermore, if any one or more of the assumptions underlying the market data are later found to be incorrect, actual results may differ from the projections based on these assumptions. You should not place undue reliance on these forward-looking statements.
The
forward-looking statements made in this prospectus relate only to events or information as of the date on which the statements are made
in this prospectus. Except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements,
whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the
occurrence of unanticipated events. You should read this prospectus and the documents that we refer to in this prospectus and have filed
as exhibits to the registration statement, of which this prospectus is a part, completely and with the understanding that our actual
future results may be materially different from what we expect.
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We estimate that we will receive net proceeds from this offering of approximately US$8.6 million, or approximately US$10.0 million if the underwriter exercises its option to purchase additional Class A Ordinary Shares in full, after deducting underwriting discounts and commissions and the estimated offering expenses payable by us. These estimates are based upon an assumed initial offering price of US$4.50 per Class A Ordinary Share, the mid-point of the estimated range of the initial public offering price shown on the front cover page of this prospectus. Each US$1.00 increase (decrease) in the assumed initial public offering price of US$4.50 per Class A Ordinary Share would increase (decrease) the net proceeds of this offering by US$2.1 million, or approximately US$3.8 million if the underwriter exercises its option to purchase additional Class A Ordinary Shares in full.
We plan to use the net proceeds of this offering as follows:
○ | approximately 20% for product development to expand the functionality and value of our core technology platform; | |
○ | approximately 25% for development and expansion of business and operations; | |
○ | approximately 30% for potential merger and acquisitions although we have no commitments with respect to any such acquisitions at this time; and | |
○ | approximately 25% for general corporate purposes, including working capital, operating expenses and capital expenditures. |
The precise amounts and percentage of the net proceeds we would devote to particular categories of activity will depend on prevailing market and business conditions as well as particular opportunities that may arise from time to time. This foregoing expected use of the net proceeds from this offering represents our intentions based upon our current plans and business conditions, which could change in the future as our plans and business conditions evolve. The amounts and timing of our actual expenditures may vary significantly depending on numerous factors, including any unforeseen cash needs. Similarly, the priority of our prospective uses of the net proceeds will depend on business and market conditions as they develop. Accordingly, our management will have significant flexibility and broad discretion in applying the net proceeds of the offering. If an unforeseen event occurs or business conditions change, we may use the net proceeds of this offering differently than as described in this prospectus. See “Risk Factors — Risks Related to Our Class A Ordinary Shares and This Offering — Our Management Has Broad Discretion to Determine How to Use the Funds Raised in the Offering and May Use Them in Ways that May not Enhance our Results of Operations or the Price of Our Class A Ordinary Shares.”
Pending any use of proceeds described above, we plan to invest the net proceeds from this offering in short-term, interest-bearing, debt instruments or demand deposits.
Although we may use a portion of the net proceeds for the acquisition of, or investment in, companies, technologies, products or assets that complement our business, we have no present understandings, commitments or agreements to enter into any acquisitions or make any investments. We cannot assure you that we will make any acquisitions or investments in the future.
We will not receive any of the proceeds from the sale of the Class A Ordinary Shares being offered by the Selling Shareholders.
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Our board of directors (“Board”) has discretion on whether to distribute dividends, subject to certain requirements of Cayman Islands law. In addition, our shareholders may by ordinary resolution declare a dividend, but no dividend may exceed the amount recommended by the Board. In either case, all dividends are subject to certain restrictions under Cayman Islands law, namely that our Company may only pay dividends out of profits or share premium, and provided always that, in no circumstances may a dividend be paid if this would result in our Company being unable to pay its debts as they fall due in the ordinary course of business. Even if we decide to pay dividends, the form, frequency and amount will depend upon our future operations and earnings, capital requirements and surplus, general financial condition, contractual restrictions and other factors that the Board may deem relevant.
We have not previously declared or paid any cash dividends and we do not have any present plan to pay any cash dividends on our Class A Ordinary Shares in the foreseeable future after this offering. We currently intend to retain most, if not all, of our available funds and any future earnings to operate and expand our business.
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The following table sets forth our capitalization as of June 30, 2023:
● | on an actual basis; | |
● | on a pro forma basis to give effect to the 1 for 250 forward share split, change in par value and increase in authorized shares, and the issuance of 6,268,000 Class A Ordinary Shares at par under share allotment post share split as at the date of the registration statement of which this prospectus forms a part; and; | |
● | on a pro forma basis to give effect to the issuance and sale of Class A Ordinary Shares by us in this offering at an assumed initial public offering price of US$4.50 per Class A Ordinary Share, the mid-point of the estimated range of the initial public offering price shown on the front cover of this prospectus, after deducting underwriting discounts and commissions and estimated offering expenses payable by us. |
You should read this table together with our consolidated financial statements and the related notes included elsewhere in this prospectus and the information under “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
As of June 30, 2023 | ||||||||||||
Actual | Pro Forma Adjustment | Pro Forma | ||||||||||
(unaudited) | (unaudited) | |||||||||||
(US$ thousands, except for share and per share data) | ||||||||||||
Cash and cash equivalents | 2,225,806 | 1,722,030 | 12,512,211 | |||||||||
Long-term borrowings: | ||||||||||||
Interest bearing loans | - | - | - | |||||||||
Total long-term borrowings | - | - | - | |||||||||
Shareholders’ equity/(deficit)(2): | ||||||||||||
Class A Ordinary Shares (of nominal or par value of US$0.000004 per share; 6,250,000,000 Class A Ordinary Shares authorized and 19,671,750 Class A Ordinary Shares issued and outstanding, actual; 21,921,750 Class A Ordinary Shares issued and outstanding, pro forma as of June 30, 2023, respectively) | 53 | 25 | 88 | |||||||||
Class B Ordinary Shares (of nominal or par value of US$0.000004 per share; 6,250,000,000 Class B Ordinary Shares authorized and 12,078,250 Class B Ordinary Shares issued and outstanding, actual and pro forma as of June 30, 2023, respectively) | 49 | - | 49 | |||||||||
Additional paid-in capital(1) | 8,496,710 | 25,446,005 | 42,648,381 | |||||||||
Accumulated deficit | (9,153,001 | ) | (23,724,000 | ) | (33,018,301 | ) | ||||||
Accumulated other comprehensive loss | 288,990 | - | 288,990 | |||||||||
Total shareholders’ equity (1) | (367,199 | ) | 1,722,030 | 9,919,207 | ||||||||
Total capitalization(1) | (367,199 | ) | 1,722,030 | 9,919,207 |
(1) | Each US$1.00 increase (decrease) in the assumed initial public offering price of US$4.50 per Class A Ordinary Share, the mid-point of the estimated range of the initial public offering price shown on the front cover of this prospectus, would increase (decrease) each of additional paid-in capital, total shareholders’ equity and total capitalization by US$2.1 million, assuming the number of Class A Ordinary Shares offered by us, as set forth on the front cover of this prospectus, remains the same and after deducting underwriting discounts and commissions and estimated offering expenses payable by us. |
(2) | On February 14, 2024, the Company completed the sub-division of the issued Class A and Class B Ordinary Shares of a nominal or par value of $0.001 each in the capital of the Company into 250 ordinary shares of a nominal or par value of $0.000004 each. Before the subdivision and further issuance of shares, the Company’s ordinary shares issued and outstanding was 53,615 Class A Ordinary Shares of a nominal or par value of $0.001 each and 48,313 Class B Ordinary Shares of a nominal or par value of $0.001 each as at 30 June 2023. After the subdivision and further issuance of shares, the Company’s ordinary shares issued and outstanding was 19,671,750 Class A Ordinary Shares of a nominal or par value of $0.000004 each and 12,078,250 Class B Ordinary Shares of a nominal or par value of $0.000004 each. |
The discussion and table above exclude exercise of any outstanding options pursuant to our share incentive plan after June 30, 2023. See “Management—2023 Employee Incentive Plan” for details of these awards.
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If you invest in our Class A Ordinary Shares, your interest will be diluted to the extent of the difference between the initial public offering price per Class A Ordinary Share and our net tangible book value per both Class A and Class B Ordinary Share after this offering. Dilution results from the fact that the initial public offering price per Class A Ordinary Share is substantially in excess of the book value per both Class A and Class B Ordinary Share attributable to the existing shareholders for our presently outstanding Class A and Class B Ordinary Share.
Our net tangible book value as of June 30, 2023 was US$1.3 million, or US$0.04 per both Class A and Class B Ordinary Share as of that date. Net tangible book value represents the amount of our total consolidated tangible assets, less the amount of our total consolidated liabilities. Dilution is determined by subtracting net tangible book value per both Class A and Class B Ordinary Share, after giving effect to the additional proceeds we will receive from this offering, from the assumed initial public offering price of US$4.50 per Class A Ordinary Share, which is the mid-point of the estimated initial public offering price range set forth on the cover page of this prospectus, and after deducting underwriting discounts and commissions and estimated offering expenses payable by us.
Without taking into account any other changes in net tangible book value after June 30, 2023, other than to give effect to our sale of the Class A Ordinary Shares offered in this offering at the assumed initial public offering price of US$4.50 per Class A Ordinary Share, the mid-point of the estimated range of the initial public offering price, after deduction of the underwriting discounts and commissions and estimated offering expenses payable by us, our pro forma as adjusted net tangible book value as of June 30, 2023 would have been US$9.8 million, or US$0.29 per both Class A and Class B Ordinary Share. This represents an immediate increase in net tangible book value of US$0.25 per both Class A and Class B Ordinary Share to the existing shareholders and an immediate dilution in net tangible book value of US$4.19 per Class A Ordinary Share to investors purchasing Class A Ordinary Shares in this offering. The following table illustrates such dilution:
Offering Without Over-Allotment | ||||
Assumed initial public offering price per Class A Ordinary Share | US$ | 4.50 | ||
Net tangible book value per both Class A and Class B Ordinary Share as of June 30, 2023 | US$ | 0.04 | ||
Pro forma net tangible book value per both Class A and Class B Ordinary Share after this offering | US$ | 0.29 | ||
Amount of dilution in net tangible book value per Class A Ordinary Share to new investors in this offering | US$ | 4.19 |
Each US$1.00 increase (decrease) in the assumed public offering price of US$4.50 per Class A Ordinary Share would increase (decrease) our pro forma as adjusted net tangible book value after giving effect to this offering by US$2.1 million, the pro forma as adjusted net tangible book value per Class A and Class B Ordinary Share after giving effect to this offering by US$0.06 per both Class A and Class B Ordinary Share and the dilution in pro forma as adjusted net tangible book value per Class A Ordinary Share to new investors in this offering by US$0.06 per both Class A and Class B Ordinary Share, assuming no change to the number of Class A Ordinary Shares offered by us as set forth on the cover page of this prospectus, and after deducting underwriting discounts and commissions and other offering expenses.
The following table summarizes, on a pro forma as adjusted basis as of June 30, 2023, the differences between existing shareholders and the new investors with respect to the number of both Class A and Class B Ordinary Shares purchased from us, the total consideration paid and the average price per Class A Ordinary Share paid before deducting the underwriting discounts and commissions and estimated offering expenses. The total number of Class A Ordinary Shares does not include Class A Ordinary Shares issuable upon the exercise of the over-allotment option granted to the underwriter.
Ordinary Shares Purchased | Total Consideration | Average Price Per Ordinary | ||||||||||||||||||
Number | Percent | Amount | Percent | Share | ||||||||||||||||
Existing shareholders (Class A and Class B Ordinary Shares) | 31,750,000 | 93.38 | % | US$ | 10,218,842 | 50.23 | % | US$ | 0.32 | |||||||||||
New investors | 2,250,000 | 6.62 | % | US$ | 10,125,000 | 49.77 | % | US$ | 4.50 | |||||||||||
Total | 34,000,000 | 100 | % | US$ | 20,343,842 | 100 | % |
The pro forma as adjusted information discussed above is illustrative only. Our net tangible book value following the completion of this offering is subject to adjustment based on the actual initial public offering price of our Class A Ordinary Shares and other terms of this offering determined at pricing.
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Enforceability of Civil Liabilities
We are incorporated under the laws of the Cayman Islands as an exempted company with limited liability. We are incorporated in the Cayman Islands to take advantage of certain benefits associated with being a Cayman Islands exempted company, such as:
● | political and economic stability; |
● | an effective judicial system; |
● | a favorable tax system; |
● | the absence of exchange control or currency restrictions; and |
● | the availability of professional and support services. |
However, certain disadvantages accompany incorporation in the Cayman Islands. These disadvantages include, but are not limited to:
● | the Cayman Islands has a less developed body of securities laws as compared to the United States and these securities laws provide significantly less protection to investors as compared to the United States; and |
● | Cayman Islands companies may not have standing to sue before the federal courts of the United States. |
Our constituent documents do not contain provisions requiring that disputes, including those arising under the securities laws of the United States, between us, our officers, directors and shareholders, be arbitrated.
Substantially all of our operations are conducted in Singapore, and substantially all of our assets are located in Singapore. A majority of our directors and officers are nationals or residents of jurisdictions other than the United States and most of their assets are located outside the United States. As a result, it may be difficult for a shareholder to effect service of process within the United States upon these individuals, or to bring an action against us or these individuals in the United States, or to enforce against us or them judgments obtained in United States courts, including judgments predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States. See “Risk Factors – Risks Related to Our Class A Ordinary Shares and This Offering – You may face difficulties in protecting your interests as a shareholder, as Cayman Islands law provides substantially less protection when compared to the laws of the United States and it may be difficult for a shareholder of ours to effect service of process or to enforce judgements obtained in the U.S. courts.”
We have appointed Cogency Global Inc., located at 122 East 42nd Street, 18th Floor, New York, NY 10168, as our agent upon whom process may be served in any action brought against us under the securities laws of the United States.
Cayman Islands
Harney Westwood & Riegels Singapore LLP, our counsel as to Cayman Islands law, has advised us that there is uncertainty as to whether the courts of the Cayman Islands will allow shareholders of our company to originate actions in the Cayman Islands based upon securities laws of the United States. In addition, there is uncertainty regarding Cayman Islands law related to whether a judgment obtained from the U.S. courts under civil liability provisions of U.S. securities laws will be determined by the courts of the Cayman Islands as penal or punitive in nature. If such a determination is made, the courts of the Cayman Islands will not recognize or enforce the judgment against a Cayman Islands company, such as our company. As the courts of the Cayman Islands have yet to rule on making such a determination in relation to judgments obtained from U.S. courts under civil liability provisions of U.S. securities laws, it is uncertain whether such judgments would be enforceable in the Cayman Islands. We have been further advised that although there is no statutory enforcement in the Cayman Islands of judgments obtained in the United States, a final and conclusive monetary judgment for a definite sum obtained in such jurisdiction will be recognized and enforced in the courts of the Cayman Islands at common law, without any re-examination of the merits of the underlying dispute, by an action commenced on the foreign judgment debt in the Grand Court of the Cayman Islands, provided that:
(a) the foreign court had jurisdiction in the matter and the Company either submitted to such jurisdiction or was resident or carrying on business within such jurisdiction and was duly served with process;
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(b) the judgment given by the foreign court was not in respect of penalties, fines, taxes or similar fiscal or revenue obligations;
(c) in obtaining judgment there was no fraud on the part of the person in whose favor judgment was given or on the part of the foreign court;
(d) recognition or enforcement in the Cayman Islands would not be contrary to public policy; and
(e) the proceedings pursuant to which judgment was obtained were not contrary to the principles of natural justice.
Singapore
There is uncertainty as to whether the courts of Singapore would (i) recognize or enforce judgments of United States 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 Singapore against us or our directors or officers predicated upon the securities laws of the United States.
In making a determination as to enforceability of a judgment of the courts of the United States, and subject to the Singapore courts having jurisdiction over the judgment debtor, the Singapore courts would have regard to whether the judgment was final and conclusive and on the merits of the case, given by a court of law of competent jurisdiction, and was expressed to be for a fixed sum of money. In general, an in personam foreign judgment that is final and conclusive (that is, in general, a judgment that makes a final determination of rights between the parties and cannot be re-opened or altered by the court that delivered it, or be overridden by another body not being an appellate or supervisory body, although it may be subject to an appeal), given by a competent court of law having jurisdiction over the parties subject to such judgment, and for a fixed and ascertainable sum of money, may be enforceable as a debt in the Singapore courts under common law unless procured by fraud, or the proceedings in which such judgments were obtained were not conducted in accordance with principles of natural justice, or the enforcement thereof would be contrary to fundamental public policy, or if the judgment would conflict with earlier judgment(s) from Singapore or earlier foreign judgment(s) recognized in Singapore, or if the judgment would amount to the direct or indirect enforcement of foreign penal, revenue or other public laws (save where any such component of the judgment can be duly severed from the rest of the judgment sought to be enforced). Civil liability provisions of the federal and state securities law of the United States permit the award of punitive damages against us, our Directors and officers. The Singapore courts do not allow the enforcement of foreign judgments which amount to the direct or indirect enforcement of foreign penal, revenue or other public laws. It is uncertain as to whether a judgment of the courts of the United States awarding punitive damages would be regarded by the Singapore courts as being pursuant to foreign, penal, revenue or other public laws. Such determination has yet to be conclusively made by a Singapore court in a reported decision.
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Corporate History and Structure
Corporate History
Our Group’s history began in 2016 when we were founded by Dr. Siaw Tung Yeng and Dr. Teoh Pui Pui along with a group of doctors in Singapore with considerable experience in healthcare, government policy and IT. We launched our MaNaDr mobile application in October 2016 and our website in January 2019. Since September 2023, our MaNaDr mobile application and website have a global reach and we had active users from more than 18 various jurisdictions across the world, including Singapore, Vietnam, Malaysia, Australia, India and the Philippines. As at October 31, 2023, we had onboarded more than 700 Singapore clinics and more than 1,500 medical professionals comprising GPs, specialized and allied health providers. We had also recorded more than 120,000 teleconsultation requests in October 2023 and as at October 31, 2023, we have completed more than 1,600,000 tele-consultation requests since our inception in 2016. As at October 31, 2023, we had more than 1 million registered users on our MaNaDr platform, having grown from a handful of registered users since our inception in 2016.
Our Company was incorporated in the Cayman Islands on July 28, 2016, under the Companies Act as an exempted company with limited liability. Our authorized share capital is US$50,000 divided into 6,250,000,000 Class A Ordinary Shares and 6,250,000,000 Class B Ordinary Shares, with par value of US$0.000004 each.
Corporate Structure
The following diagram illustrates our corporate structure, including our principal subsidiaries:
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Key Milestones
The table below sets forth the key development milestones in our Group’s history.
Year | Milestones | ||
2009 |
Our Group was founded | ||
2016 |
Launched our MaNaDr mobile application | ||
2018 to 2019 |
Our Group first expanded our operations overseas, in Australia followed by Cambodia in year 2019 | ||
2019 |
● | Launched our MaNaDr website | |
● | Our Group was awarded the Data Protection Trustmark (DPTM) by the Infocomm Media Development Authority of Singapore (IMDA) | ||
2020 | ● | Launched our MaNaShop online e-commerce platform to sell a diversified range of curated healthcare and wellness products | |
● | Awarded government contracts by the Ministry of Manpower in 2020 for the provision of telehealth solutions to foreign migrant workers and patients under the COVID-19 home recovery program | ||
2021 |
We launched MaNaCare, to provide comprehensive corporate healthcare and wellness services to our corporate customers | ||
2022 |
We successfully raised S$13.2 million through our Series A funding, led by ICHAM Master Fund VCC – ICH Gemini Global Fund | ||
2022 | We received a Certificate of Appreciation by the Singapore Ministry of Manpower for our services rendered during the COVID-19 pandemic. | ||
2023 | ● |
We were awarded The President’s Certificate of Commendation (COVID-19) for our services rendered during the COVID-19 pandemic. | |
● | We received a Certificate of Conformance demonstrating our conformance to the requirements of the Cyber Security Agency of Singapore (CSA) Cyber Security Certification Cyber Essentials mark | ||
● | Our subsidiary in Vietnam was established. |
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Selected Consolidated Financial And Other Data
The following selected consolidated financial data for the years ended June 30, 2023 and 2022 have been derived from our audited consolidated financial statements included elsewhere in this prospectus. The selected financial data set forth below should be read in conjunction with, and are qualified by reference to “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and notes thereto included elsewhere in this prospectus. Our consolidated financial statements are prepared and presented in accordance with U.S. GAAP. Our historical results do not necessarily indicate results expected for any future period.
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE LOSS
For the year ended June 30, 2023 | For the year ended June 30, 2022 | |||||||
USD | USD | |||||||
Total revenue | 7,874,886 | 6,988,849 | ||||||
Gross profit | 1,094,994 | 1,935,106 | ||||||
Total operating expenses | (4,383,694 | ) | (1,741,444 | ) | ||||
(Loss) Income from operations | (3,288,700 | ) | 193,662 | |||||
Total other income, net | 75,340 | 64,810 | ||||||
Income tax expense | - | (165,775 | ) | |||||
NET (LOSS) INCOME | (3,213,360 | ) | 92,697 | |||||
Foreign currency translation adjustment, net of income tax | 396,262 | (114,433 | ) | |||||
Comprehensive loss | (2,817,098 | ) | (21,736 | ) | ||||
Weighted average number of ordinary shares - Basic and diluted | 108,311 | 86,402 | ||||||
NET (LOSS) INCOME PER SHARE – BASIC AND DILUTED | (29.67 | ) | 1.07 |
SUMMARY CONSOLIDATED BALANCE SHEETS
June 30, 2023 | June 30, 2022 | |||||||
USD | USD | |||||||
Cash and cash equivalents | 2,225,806 | 10,243,088 | ||||||
Total current assets | 2,717,809 | 10,541,603 | ||||||
Property and equipment, net | 178,799 | 34,350 | ||||||
Total non-current assets | 724,730 | 214,021 | ||||||
Total assets | 3,442,539 | 10,775,624 | ||||||
Total current liabilities | 2,500,088 | 1,269,252 | ||||||
Total non-current liabilities | 1,309,650 | 1,050,243 | ||||||
Total liabilities | 3,809,738 | 2,319,495 | ||||||
Total shareholders’ equity | (367,199 | ) | 8,436,129 |
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the information presented in “Selected Consolidated Financial and Other Data” and our historical consolidated financial statements and the related notes included elsewhere in this prospectus. In addition to historical information, the following discussion contains forward-looking statements, such as statements regarding our expectation for future performance, liquidity and capital resources, that involve risks, uncertainties and assumptions that could cause actual results to differ materially from our expectations. Our actual results may differ materially from those contained in or implied by any forward-looking statements. Factors that could cause such differences include those identified below and those described in “Special Note Regarding Forward-Looking Statements,” “Risk Factors” and elsewhere in this prospectus. We assume no obligation to update any of these forward-looking statements.
Overview
We are a leading telehealth solutions provider in Singapore in terms of various matrices, such as the number of patient consultations per day and the ranking of our mobile application. We focus on delivering superior in-app experiences to both our healthcare providers and patients. We have the largest number of teleconsultations per day in August 2023, and are amongst the fastest-growing telehealth solutions providers in Singapore, according to the industry market research by Frost & Sullivan.
We enable and empower healthcare professionals to focus on the delivery of care to their patients through our unified, hybrid and AI-enabled care platform, developed by our founders who collectively have over 30 years of healthcare and medical informatics experiences. We are passionate about solving global healthcare challenges, and concentrate our efforts to provide simple, easy-to-understand, affordable and accessible healthcare solutions regionally.
Key Factors that Affect Operating Results
We believe the key factors affecting our financial condition and results of operations include the following:
Our ability to maintain users’ trust.
Our ability to maintain users’ trust in the services and product offerings on our MaNaDr platform is primarily affected by the following factors:
● | our ability to maintain superior user experience and the quality of services and products provided through our ecosystem; | |
● | the breadth of offerings of our services and products and their efficacy in addressing our users’ needs and meeting their expectations; | |
● | the reliability, security and functionality of our ecosystem; | |
● | our ability to adopt new technologies or adapt our technology infrastructure to changing user requirements or emerging industry standards; | |
● | the strength of our consumer protection measures; and | |
● | our ability to increase brand awareness among existing and potential users through various marketing and promotional activities. |
Our ability to manage the growth of our business and operations or implement our business strategies on schedule or within our budget.
Our business has become increasingly complex in terms of both the type and scale of business we operate. Our ability to successfully execute our plans, including product development roll-out, marketing and branding, obtaining and continued compliance with relevant regulatory laws, regulations and requirements in Singapore and other jurisdictions where we may operate will significantly impact our financial results and conditions.
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Our ability to price our products and services or manage our cost effectively.
We are subject to risks of rising business costs due to, amongst others, tight labor market conditions for talents. Depending on our ability to price and manage our costs of operations, our margins may be subject to changes going forward.
Fluctuations in exchange rates.
We operate mainly in multiple markets, which exposes us to the effects of fluctuations in currency exchange rates as we report our financials and key operational metrics in USD. In the event that such fluctuations in the relevant foreign currency are substantial, and we are unable to pass on our costs to users, our earnings, financial position and results of operations may be materially and adversely affected.
Number of MAU and MPU.
MAU by age group and MPU by age group are the key metrics used by us. MAU by age group refers to the count of users with specific age segments who have engaged with a product and service within a given month. This metric is used by us to understand the distribution of user engagement across different age categories and to customize the strategies accordingly. It provides insights into the popularity of a product among different age segments, aiding in the assessment of user engagement trends and potential growth opportunities. By understanding which age groups are most active, we can customize the marketing campaigns, user experiences, and product features to better cater to the preferences and needs of specific age cohorts. The formula for calculating MAU by age group involves identifying users within each age category who have interacted with the product or service in a given month. The steps involved are as follows:
(1) Divide the users into different age groups.
(2) For each age group, count the number of users who have engaged with the product and service within the past month.
(3) Sum up the user counts from each age group to get the total MAU by age group.
MPU by age group provides valuable insights into the spending behavior and preferences of different age segments. We use this information to optimize the pricing strategies, tailor marketing efforts, and develop products or features that resonate with specific age groups. Understanding which age categories contribute the most to revenue allows us to allocate resources effectively and prioritize customer retention strategies. The formula for calculating MPU by age group involves identifying users within each age category who have made payments or transactions within a given month. The steps involved are similar to those for MAU:
(1) Divide the users into different age groups.
(2) For each age group, count the number of users who have made payments or transactions within the past month. (3) Sum up the user counts from each age group to get the total MPU by age group.
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Discussion of Consolidated Results of Operations for Years ended June 30, 2023 and 2022
The following table sets forth our summarized consolidated statement of operations data for the years ended June 30, 2023 and 2022 and the dollar and percentage change between the respective periods:
Years Ended June 30, | ||||||||||||||||
2023 | 2022 | |||||||||||||||
USD | USD | Variance | % Change | |||||||||||||
Revenue | $ | 7,874,866 | $ | 6,988,849 | $ | 886,037 | 12.7 | |||||||||
Costs of revenue | (6,779,892 | ) | (5,053,743 | ) | (1,726,149 | ) | 34.2 | |||||||||
Gross Profit | 1,094,994 | 1,935,106 | (840,112 | ) | (43.4 | ) | ||||||||||
Operating expenses: | ||||||||||||||||
Salaries and benefits | 2,389,892 | 1,038,877 | 1,351,015 | 130.0 | ||||||||||||
Depreciation and amortisation | 94,816 | 87,094 | 7,722 | 8.9 | ||||||||||||
Selling, general and administrative expenses | 1,898,986 | 615,473 | 1,283,513 | 208.5 | ||||||||||||
Total operating expenses | 4,383,694 | 1,741,444 | 2,642,250 | 151.7 | ||||||||||||
Other income: | ||||||||||||||||
Government incentives | 27,892 | 2,357 | 25,535 | 1,083.4 | ||||||||||||
Other income, net | 47,448 | 62,453 | (15,005 | ) | (24.0 | ) | ||||||||||
Total other income, net | 75,340 | 64,810 | 10,530 | 16.2 | ||||||||||||
(Loss) income before income tax expense | (3,213,360 | ) | 258,472 | (3,471,832 | ) | (1,343.2 | ) | |||||||||
Income tax expense | - | (165,775 | ) | - | (100.0 | ) | ||||||||||
Net (loss) income | (3,213,360 | ) | 92,697 | (3,306,057 | ) | (3,566.5 | ) | |||||||||
Foreign currency translation adjustment, net of income tax | 396,262 | (114,433 | ) | 510,695 | (446.3 | ) | ||||||||||
Comprehensive loss | (2,817,098 | ) | (21,736 | ) | (2,795,362 | ) | 12,860.5 |
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Revenue
Our revenues are derived mainly from the provision of telemedicine and other services, sale of medicine and medical devices. Our revenue increased by 12.7% to $7.9 million for financial year ended June 30, 2023, as compared to $7.0 million for financial year ended June 30, 2022.
The $0.9 million increases in our revenue between financial year ended June 30, 2023 and 2022 was mainly due to the increased revenue contribution of $0.8 million from our telemedicine segment and $0.1 million from sale of medicine and medical devices segment.
The following table summarized our revenue breakdowns for the financial year ended June 30, 2023 and 2022:
Years Ended June 30, | ||||||||||||||||||||
2023 | 2022 | |||||||||||||||||||
USD | Percentage | USD | Percentage | % Change | ||||||||||||||||
Telemedicine - Private sector | $ | 6,704,414 | 85.1 | % | $ | 1,509,843 | 21.6 | % | 344.0 | |||||||||||
Telemedicine - Public sector | 125,689 | 1.6 | 4,615,595 | 66.0 | (97.3 | ) | ||||||||||||||
Other services | 68,063 | 0.9 | - | - | 100.0 | |||||||||||||||
Telemedicine and other services - sub-total | 6,898,166 | 87.6 | 6,125,438 | 87.6 | 12.6 | |||||||||||||||
Sale of medicine and medical devices | 976,720 | 12.4 | 863,411 | 12.4 | 13.1 | |||||||||||||||
Total revenue | 7,874,886 | 100.0 | 6,988,849 | 100.0 | 12.7 |
Telemedicine and other services
The increase in telemedicine revenue was driven by revenue contribution from private sector as following.
Financial Year Ended June 30, 2023 | Financial Year Ended June 30, 2022 | % Change | ||||||||||
Number of new users | 214,000 | 69,000 | 210.1 | |||||||||
Number of private telemedicine transactions | 908,000 | 176,000 | 415.9 | |||||||||
Number of public telemedicine transactions | 5,000 | 113,000 | (95.6 | ) | ||||||||
Total telemedicine transactions | 913,000 | 289,000 | 215.9 |
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Telemedicine revenue derived from public sector represents revenue generated from contracts with the relevant authorities and departments of the Singapore government. The decrease in revenue from the public sector was primarily driven by the lower patient volumes infected with COVID-19 who were using our telemedicine services through the relevant authorities and departments. As the COVID-19 infection numbers fell over the periods, the demand for COVID-19 related telemedicine services had fallen from about 113,000 cases for the financial year ended June 30, 2022 to about 5,000 cases for the financial year ended June 30, 2023.
Despite the drop in the telemedicine revenue derived from public sector, we manage to convert patients who have used our services through the relevant Singapore authorities and departments to continue using our services through our MaNaDr platform.
As a result, telemedicine revenue derived from private sector increased to $6.7 million for the financial year ended June 30, 2023, as compared to $1.5 million for the financial year ended June 30, 2022. This more than offsets the decrease in telemedicine revenue derived from public sector, resulting in an overall increase in revenue from our telemedicine segment. The number of private telemedicine transactions on our MaNaDr platform increased by about 515.9% when compared with the financial year ended June 30, 2022. The majority of these private telemedicine transactions are paid immediately with credit cards, which differs from other companies which might require reimbursement from other payors. The increase was primarily attributable to the increase in the number of users as well as the higher usage rate per user in our MaNaDr platform.
With the stable global and local COVID-19 situation, Singapore’s multi-ministry taskforce had announced that from February 13, 2023, Singapore will lower its Disease Outbreak Response System Condition level from Yellow to Green. As a result, we expect telemedicine revenue from the public sector to continue to decline and will not report the split between telemedicine revenue from the public sector and the private sector going forward.
The other services mainly refer to the Company’s clinic business which only started the operation from September 1, 2022.
Sale of medicine and medical devices
Revenues derived from sale of medicine and medical devices increased by about $0.1 million due mainly to higher medicine product sales in line with an increase in revenue contribution from in-app medicine sales.
Cost of revenue
Cost of revenue increased by $1.7 million for the financial year ended June 30, 2023. The increase was mainly due to an increase in healthcare provider and medicine costs, resulting in a lower gross margin when compared to the financial year ended June 30, 2022.
Salaries and benefits
Salaries and benefits were about $2.4 million for the financial year ended June 30, 2023, as compared to about $1.0 million for the financial year ended June 30, 2022. The increase was mainly due to the increase in staffing from 57 as at June 30, 2022 to 92 as at June 30, 2023 to support our increased needs in staffing for our operations, software development, business development departments.
Depreciation and amortization expenses
Depreciation and amortization expenses remained stable at approximately $95,000 and $87,000 for the financial years ended June 30, 2023 and 2022 respectively.
Selling, general and administrative expenses
Selling, general and administrative expenses increased by $1.3 million to $1.9 million for the financial year ended June 30, 2023. The increase was mainly due to the increase in IPO-related professional fees incurred.
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Other income, net
Other income, net remained stable at approximately $75,000 and $65,000 for the financial years ended June 30, 2023 and 2022 respectively.
Income tax expense
We did not incur any income tax expense for the financial year ended June 30, 2023 as we incurred a loss before income tax of $3.2 million.
Net (loss) income
As a result of the foregoing, we incurred a net loss of $3.2 million for the financial year ended June 30, 2023 as compared to a net income of $0.1 million for the financial year ended June 30, 2022.
Liquidity and Capital Resources
Since inception, we have financed our operations primarily through proceeds received from shareholder loan (see the section headed “Index to Consolidated Financial Statements” in the prospectus for further details), sales of equity securities and payments received from our customers. As of June 30, 2023, our principal sources of liquidity were cash and cash equivalents of approximately $2.2 million.
We believe that our existing sources of liquidity, along with cash expected to be generated from sales and services, will be sufficient to fund our operations, anticipated capital expenditures, working capital and other financing requirements for at least the next twelve months from the issuance of the financial statements included elsewhere in this prospectus. In the event we are unable to achieve profitable operations in the near term, we may require additional equity and/or debt financing; however, we cannot provide assurance that such financing will be available to us on favorable terms, or at all. See the section headed “Risk Factors – Risks Related to Our Business and Industry – We May Need Additional Capital but May Not Be Able to Obtain Such on Favorable Terms or at All” in the prospectus for further details.
Our primary uses of cash have been used in the furtherance of growing our business, development of operations, establishing our staffing and investment in our technology platform. The following trends are reasonably likely to result in a material decrease in our liquidity over the near to long term:
● | A substantial increase in working capital requirements to finance our operations; | |
● | Addition of administrative and professional personnel as our business continues to grow; | |
● | The cost of being a public company; and | |
● | Payments for seeking and securing quality staffing personnel. |
The following table presents a summary of our cash flow activity for the periods set forth below:
Years Ended June 30, | |||||||||
2023 | 2022 | ||||||||
USD | USD | ||||||||
Consolidated Statements of Cash Flows Data: | |||||||||
Net cash (used in) provided by operating activities | $ | (2,248,626 | ) | $ | 975,656 | ||||
Net cash used in investing activities | (186,001 | ) | (15,211 | ) | |||||
Net cash (used in) provided by financing activities | (5,800,452 | ) | 9,233,896 | ||||||
Total | (8,235,079 | ) | 10,194,341 |
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Cash Flow Activities for the Years Ended June 30, 2023 and 2022
Net Cash (Used in) Provided by Operating Activities
For the year ended June 30, 2023, cash used in operating activities was approximately $2.2 million. This consisted of net loss of approximately $3.2 million, adjusted for non-cash items of approximately $0.3 million and net changes in operating assets and liabilities of approximately $0.7 million. Non-cash items primarily consisted of depreciation and amortization expense of approximately $0.2 million and allowance for doubtful debts of approximately $0.1 million. The net changes in operating assets and liabilities were primarily driven by an increase of approximately $0.7 million in account payable and an increase of $0.4 million in accruals and other current liabilities, partially offset by the increase of approximately $0.2 million in other current assets, a decrease in operating lease assets and liabilities, net of approximately $0.1 million and the decrease in income taxes payable of approximately $0.1 million.
For the year ended June 30, 2022, cash provided by operating activities was approximately $1.0 million. This consisted of net income of approximately $0.1 million, adjusted for non-cash items of approximately $0.1 million and net changes in operating assets and liabilities of approximately $0.8 million. Non-cash items primarily consisted of depreciation and amortization expense of approximately $0.1 million. The net changes in operating assets and liabilities were primarily driven by a decrease of approximately $0.1 million in accounts receivable due to timing of collections, an increase of approximately $0.3 million in accounts payable, an increase of $0.3 million in accruals and other current liabilities and an increase of approximately $0.1 million in income taxes payable.
Net Cash Used in Investing Activities
Cash used in investing activities was approximately $0.2 million for the year ended June 30, 2023, which primarily consisted of purchase of property and equipment.
Cash used in investing activities was approximately $15,000 for the year ended June 30, 2022, which primarily consisted of purchase of property and equipment.
Net Cash (Used in) Provided by Financing Activities
Cash used in financing activities for the year ended June 30, 2023 was approximately $5.8 million, which primarily consisted of repurchase of Class A Ordinary Shares issued amounting to approximately $6.6 million, and partially offset by proceeds from sale of our Class A Ordinary Shares of approximately $0.8 million.
Cash provided by financing activities for the year ended June 30, 2022 was approximately $9.2 million, which primarily consisted of approximately $9.7 million of proceeds from the sale of our Class A Ordinary Shares, and partially offset by repayments on advances due to our director of approximately $0.5 million.
Commitments and Contingencies
The following table summarizes our contractual obligations and commitments as of June 30, 2023:
Payment Due by Period | ||||||||||||
Total | Less than 1 Year | 1 to 3 Years | ||||||||||
USD | USD | USD | ||||||||||
Operating lease commitments | $ | 411,018 | $ | 164,038 | $ | 246,980 | ||||||
Total | $ | 411,018 | $ | 164,038 | $ | 246,980 |
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Off-Balance Sheet Arrangements
During the periods presented, we did not have, nor do we currently have, significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to our shareholders.
Critical Accounting Policies and Estimates
Our management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with GAAP. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The Company bases its estimates on historical experience, current business factors, and various other assumptions that the Company believes are necessary to consider to form a basis for making judgments about the carrying values of assets and liabilities, the recorded amounts of revenue and expenses, and the disclosure of contingent assets and liabilities. The Company is subject to uncertainties such as the impact of future events, economic and political factors, and changes in the Company’s business environment; therefore, actual results could differ from these estimates. Accordingly, the accounting estimates used in the preparation of the Company’s consolidated financial statements will change as new events occur, as more experience is acquired, as additional information is obtained, and as the Company’s operating environment evolves.
We believe that the accounting policies discussed below are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management’s judgments and estimates. See Note 2 to our consolidated financial statements appearing at the end of this prospectus for a description of our other significant accounting policies.
Revenue Recognition
The Company follows the revenue requirements of Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“Accounting Standards Codification (“ASC”) 606”). The core principle underlying the revenue recognition of this ASC allows the Company to recognize revenue that represents the transfer of goods and services to customers in an amount that reflects the consideration to which the Company expect to be entitled in such exchange. This will require the Company to identify contractual performance obligations and determine whether revenue should be recognized at a point in time or over time, based on when control of goods and services transfers to a customer.
To achieve that core principle, the Company applies a five-step model to recognize revenue from customer contracts. The five-step model requires that the Company (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance obligation.
The Company derives revenue from two main segments: (1) telemedicine and other services; and (2) sale of medicine and medical devices.
Telemedicine and other services
Telemedicine services are provided to both the private sector and public sector. The Company earns telemedicine services revenue from private sector by providing teleconsultation services to patients who have subscribed to MaNadr APP by contractual service providers and sale of prescribed medicine. Telemedicine revenue derived from public sector represents revenue generated from contracts with the relevant authorities and departments of the Singapore government by providing teleconsultation services to patients identified by the authorities and departments of the Singapore government. Telemedicine services with prescribed medicine are two distinct performance obligations with standalone prices that are fixed and paid post rendering of teleconsultation service with patients. Prescribed medicine will be delivered to the customer on the same day. The amount paid by the patient is then allocated to each performance obligation in a contract based on its relative standalone selling price (“SSP”). The SSP is the observable price at which we sell the product or service separately.
Revenue from teleconsultation services and sale of prescribed medicine are recognized at a point in time when the services are rendered and the products are delivered to the customers respectively.
The Company considers the following indicators amongst others when determining whether it is acting as a principal in the contract where revenue would be recorded on a gross basis:
(i) | the Company is primarily responsible for fulfilling the promise to provide the specified products or services; |
(ii) | the Company has control over services provided in which the prescription issued by our service providers is under the clinic name of the Company; and |
(iii) | the Company has discretion in establishing the price for the specified products or services. |
The services are rendered by the Company’s in-house doctors and external providers who are registered and credentialed to deliver care on MaNaDr platform. The Company contracts with the external service providers who are paid based on the consultation fee set by the Company. Patient contracts with the Company and make payment on the MaNadr platform. In these arrangements, as the Company assumes a principal role in the transaction, revenue is recognized gross. The Company has the right to determine the service price to patients and is responsible for the holding and fulfilment of prescribed medicine to the patients, the Company assumes the credit risk and rewards of ownership of the inventory. Accordingly, the Company accounts for the telemedicine service contracts on a gross basis.
The Company also provided the medical consultation services for the physical walk-in patients in its own clinic. The services are rendered by the Company’s in-house doctor who is registered and credentialed to deliver care for the physical walk-in patients, as well as sale of prescribed medicine.
Sale of medicine and medical devices
The Company sells prescription drugs, non-prescription drugs and healthcare products to clinics and end customers offline and online. The online transactions are performed through MaNaShop/MaNaStore. These products are purchased by the Company as inventory for onward sale to customers. Revenue from sale of these products under direct sales model is recognized on a gross basis upon delivery of the medicines or products to the customers. For products that are not purchased by the Company as inventory for onward sale to customers through online market model , the Company facilitates setting product prices with vendors. The Company is not responsible for fulfilling the contracts being provided to the customers nor does the Company have inventory risk related to the contracts. Revenue from sales of these products is recognized on a net basis upon delivery of the medicines or products to the customers.
Intangible Assets, net
Intangible assets represent the MaNadr platform, patents and trademarks. These intangible assets arise primarily from the determination of their respective fair market values at the date of acquisition. The useful life of the intangible assets is assessed to be finite and amortization is computed using the straight-line method over the estimated useful lives or 3 to 10 years based upon the future cash flows attributable to the asset.
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Impairment of Long-Lived Assets
The Company evaluates the recoverability of its long-lived assets (asset groups), including property and equipment, definite-lived intangible assets and operating lease right-of-use assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of its asset (asset group) may not be fully recoverable. When these events occur, the Company measures impairment by comparing the carrying amount of the assets to the estimated undiscounted future cash flows expected to result from the use of the asset (asset group) and their eventual disposition. If the sum of the expected undiscounted cash flows is less than the carrying amount of the asset (asset group), the Company recognizes an impairment loss based on the excess of the carrying amount of the asset (asset group) over their fair value. Fair value is generally determined by discounting the cash flows expected to be generated by the asset (asset group), when the market prices are not readily available. The adjusted carrying amount of the asset is the new cost basis and is depreciated over the asset’s remaining useful life. Long-lived assets are grouped with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. For the years ended June 30, 2023 and 2022, no impairment of long-lived assets was recognized.
Leases
The Company is a lessee of non-cancellable operating leases for its corporate office premise. The Company determines if an arrangement is a lease at inception. Lease assets and liabilities are recognized at the present value of the future lease payments at the lease commencement date. The interest rate used to determine the present value of the future lease payments is the Company’s incremental borrowing rate based on the information available at the lease commencement date. The Company generally uses the base, non-cancellable lease term in calculating the right-of-use assets and liabilities.
The Company has elected not to recognize ROU assets and lease liabilities for short-term leases that have a lease term of 12 months or less. The Company recognizes the lease payments associated with its short-term leases as an expense on a straight-line basis over the lease term.
The Company evaluates the impairment of its ROU assets consistent with the approach applied for its other long-lived assets. The assessment of possible impairment is based on its ability to recover the carrying value of the asset from the expected undiscounted future pre-tax cash flows of the related operations. The Company has elected to include the carrying amount of finance and operating lease liabilities in any tested asset group and include the associated lease payments in the undiscounted future pre-tax cash flows. For the years ended June 30, 2023 and 2022, the Company did not have any impairment loss against its operating lease ROU assets.
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Share-Based Compensation
In assessing the valuation of our common stock, we employed a comprehensive approach that combines both market and income methodologies to determine the enterprise value, or fair value of our business. The market approach involves estimating value by comparing our company to similar publicly traded entities within the same business sector, as well as examining secondary transactions involving our capital stock. A representative market value multiple is derived from comparable companies and applied to our company’s financial results to estimate its value. This approach also takes into account transaction prices from secondary sales of our capital stock by investors.
Conversely, the income approach calculates the fair value by considering the present value of the company’s anticipated future cash flows and the residual value beyond the forecast period. These future cash flows, including those beyond the forecast period for residual value, are discounted to their present values using an appropriate discount rate to reflect the inherent risks associated with the company achieving these estimated cash flows.
Following the completion of this offering, our common stock will be publicly traded, and we will rely on the closing price of our common stock, as reported on the date of grant, to determine the fair value of our common stock.
In our financial disclosures, we report option-based compensation expenses connected to option awards, recognizing these expenses based on the fair value of the granted awards. The determination of each option award’s fair value is conducted at the grant date, utilizing the Black-Scholes option pricing model. This model depends on subjective factors such as the fair value of our common stock, the expected lifespan of the option, the projected volatility of our stock price, prevailing risk-free interest rates, and the anticipated dividend yield. These factors, guided by management’s estimates, inherently involve uncertainties and the need for sound managerial judgment.
For the recognition of compensation expense, we adopt a straight-line approach throughout the required service period of the awards. Notably, our initial assumption for the rate of award forfeitures is set at 0%, allowing for a more precise allocation of compensation costs. We then adjust this cost to reflect the actual rate of forfeitures as they transpire. This methodology is in strict adherence to ASC 718 “Stock Compensation,” which necessitates the accurate measurement and recording of expenses for equity-based awards that are expected to vest, taking into account real forfeitures throughout the service period.
The application of the Black-Scholes model is sensitive to changes in its underlying assumptions. Variations in these assumptions could lead to significant adjustments in our reported stock-based compensation expenses in future periods.
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Upon the successful completion of our IPO, the vesting of options awarded to employees and other stakeholders undergoes specific accounting treatment. This treatment is essential for accurately reflecting the impact of the IPO on our financial statements and ensuring compliance with Generally Accepted Accounting Principles (GAAP). Our proposed accounting approach is outlined to establish the Fair Value and Properly Recognize the Expense through to Proper Disclosures.
The vesting of options upon the IPO triggers an accounting recognition event. Any previously unrecognized option-based compensation expenses related to these vested options will be recognized on our income statement. This expense represents the cumulative compensation cost associated with the options that have now become fully vested.
As part of our financial disclosures for the financial year 2024, we will provide comprehensive information about the option granted on August 1, 2023 and December 18, 2023 and the impact of the IPO on our option-based compensation. This includes details on the number of options vested, the fair value at the date of vesting, and the corresponding expense recognized in the income statement. Our disclosures will ensure transparency and allow stakeholders to understand the financial implications of the IPO on our equity-based compensation programs. Any future vesting events will trigger similar accounting treatments, ensuring that our financial reporting remains accurate and in compliance with accounting standards.
Concentration and Credit Risks
The Company maintains cash with banks in Singapore (“SGN”). Should any bank holding cash become insolvent, or if the Company is otherwise unable to withdraw funds, the Company would lose the cash with that bank; however, the Company has not experienced any losses in such accounts and believes it is not exposed to any significant risks on its cash in bank accounts. In Singapore, a depositor has up to S$75,000 insured by Singapore Deposit Insurance Corporation (“SDIC”).
Financial instruments that potentially expose the Company to concentration of credit risk consist primarily of cash and cash equivalent and accounts receivable. The Company has designed its credit policies with an objective to minimize their exposure to credit risk. The Company’s accounts receivable are short term in nature and the associated risk is minimal. The Company conducts credit evaluations on its clients and generally does not require collateral or other security. The Company periodically evaluates the creditworthiness of the existing clients in determining the allowance for doubtful accounts primarily based upon the age of the receivables and factors surrounding the credit risk of specific clients.
For the years ended June 30, 2023 and 2022
Concentration of customers
None of the customers consisted of more than 10% of account receivables as of June 30, 2023 and 2022.
None of the customers accounted more than 10% of the Company’s total revenue for the year ended June 30, 2023. For the year ended June 30, 2022, customer A accounted for 66.04% of the Company’s total revenue.
Concentration of vendors
None of the suppliers accounted more than 10% of account payable as of June 30, 2023. As of June 30, 2022, supplier A and B, accounted for 14.21% and 15.77% of the account payable respectively.
For the year ended June 30, 2023, none of the suppliers accounted more than 10% of the Company’s total purchases. For the year ended June 30, 2022, supplier F, accounted for 19.33% of the Company’s total purchases.
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Recent Accounting Pronouncement
The Company is an “emerging growth company” (“EGC”) as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Under the JOBS Act, EGC can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. The Company made the election to delay the adoption of new or revised accounting standards.
In October 2020, the FASB issued ASU 2020-10, “Codification Improvements to Subtopic 205-10, presentation of financial statements”. The amendments in this Update improve the codification by ensuring that all guidance that requires or provides an option for an entity to provide information in the notes to financial statements is codified in the disclosure section of the codification that reduce the likelihood that the disclosure requirements would be missed. The amendments also clarify guidance so that an entity can apply the guidance more consistently. Early application of the amendments is permitted for any annual or interim period which financial statements are available to be issued. The amendments in this Update should be applied retrospectively. An entity should apply the amendments at the beginning of the period that includes the adoption date. The adoption of this standard is not expected to have a significant impact on the Company.
Except as mentioned above, the Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the Company’s consolidated balance sheets, statements of operations and cash flows.
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All the information and data presented in this section have been derived from a report that was commissioned by us and prepared by Frost & Sullivan unless otherwise noted. Frost & Sullivan has advised us that the statistical and graphical information contained herein is drawn from its database and other sources. The following discussion contains projections for future growth, which may not occur at the rates that are projected or at all.
Overview of the Integrated Smart Health-Tech Service Market
Definition and Limitation of Telehealth
Telehealth refers to the utilization of electronic information and telecommunications technologies to provide remote clinical healthcare, health-related education, public health services, and other healthcare functions. It encompasses various methods such as video conferencing, store-and-forward (which allows users to submit clinical information for evaluation without an in-person visit), and remote user monitoring. However, while telehealth offers valuable support, it is not a comprehensive solution for managing user care coordination, addressing healthcare costs, or alleviating the burden of diseases. It should not be considered a complete substitute for in-person visits, as it may not be suitable for all types of illnesses or clinical situations. Additionally, telehealth does not seamlessly integrate with offline health services. Compared to in-person interactions, remote communication lacks the natural physical presence, which can lead to potential misunderstandings and misinformation, especially in the making of critical medical decisions. As healthcare technology becomes more ingrained in standard care, the terms “telehealth” and “telemedicine” may gradually be replaced by the overarching concept of integrated smart health-tech services.
Overview of the Smart Health-Tech Service Market
Emerging as an evolved model of telehealth, the integrated smart health-tech service market overcomes the limitations of traditional telehealth approaches. It provides users with comprehensive direct-to-consumer healthcare solutions for managing their complete health journey. This market encompasses a wide range of offerings, including convenient online consultations, walk-in clinics, chronic disease management, online retail pharmacies, health knowledge forums, enterprise telehealth services, as well as wholesale services for pharmaceutical and healthcare products. It represents a more advanced and holistic approach as compared to traditional telehealth methods.
Source: Frost & Sullivan analysis
The Coverage of Smart Health-Tech Service Market
The integrated smart health-tech service market encompasses a broad spectrum of health-related services and products delivered through digital platforms and in-person settings. This includes telemedicine video conferencing software, remote user assessment tools, wearable monitoring devices and software, on-demand virtual healthcare portals, walk-in clinics, and various other offerings.
The Advantages of Smart Health-Tech Service Market
With its unique hybrid model, the integrated smart health-tech service market offers an intelligent and integrated solution that combines app-based telehealth with physical clinics. It caters to both B2B and B2C sectors through well-established commercial networks, which involve intricate interactions and transactions between users, providers, payors, and other stakeholders. Leveraging on digital technology, this market provides a more accessible means of delivering precise medicine and managing healthcare. By increasing access to physicians and specialists, these services ensure that users receive appropriate care at the right location and time. Moreover, the integrated smart health-tech service market fosters an ecosystem where users and healthcare professionals can engage in dialogue and share views on various healthcare issues and concerns. Effective communication, discussion, and consultation play a vital role in developing optimal treatment plans in the medical field. Consequently, integrated smart health-tech services promote more effective communication, precise diagnosis, and well-informed decision-making among experts, clinicians, and users alike.
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Pain Points of Current Southeast Asia/General Overview of Singapore’s Healthcare Industry
Southeast Asia (“SEA”) consists of 11 independent nations situated along Asia’s continental curves and island archipelagos, including Brunei Darussalam, Timor-Leste, Singapore, Malaysia, Thailand, the Philippines, Indonesia, Vietnam, Laos, Cambodia, and Myanmar. Ten nations in SEA form the Association of Southeast Asian Nations (“ASEAN”). This region is home to over half a billion people living in countries with significant diversity, ranging from affluent nations like Singapore (GDP per capita: USD72.8 thousand) to less developed economies such as Laos (GDP per capita: USD2.5 thousand), Cambodia (GDP per capita: USD1.6 thousand), and Myanmar (GDP per capita: USD1.2 thousand), according to the World Bank. According to a report about the time spent using the internet in SEA, in 2021 shows that people in SEA tend to spend more time online each day than the global average. For instance, Filipinos indicate that they spend an average of almost 11 hours online each day, which is almost 60 percent more than the global average. The wide range of geographical and historical factors has led to significant disparities in health status and healthcare systems both across and within these nations. As compared to other global regions, the SEA region is undergoing a more rapid epidemiological shift, with the burden of disease transitioning from infectious to chronic illnesses. While there is an upward trend towards universal healthcare coverage in the SEA region, much more needs to be accomplished to ensure access to healthcare services for disadvantaged populations. The lack of experts and specialists in rural areas is a significant concern in certain countries, especially when it comes to diagnosing rare diseases and challenging symptoms.
In addition, there exists five principal challenges for SEA, including user inequalities in healthcare, inaccessibility in healthcare, complexities in obtaining correct healthcare in a timely manner, confusion due to the wide range of healthcare products and services available as well as the global healthcare burden of obesity and chronic diseases. Although Singapore stands out in the SEA region, ranking 10th in the 2022 World Index of Healthcare Innovation, and has notable performance in terms of its outstanding research universities and superior digital healthcare system, the following problems still exist in Singapore:
● | Inequalities in healthcare |
There exist significant health inequalities in Singapore, particularly in relation to educational attainment, with men and women of lower education levels being more likely to develop certain chronic diseases, as compared to those with post-secondary education. According to the Ministry of Health of Singapore, males with primary education or lower are 1.3 times more likely to have diabetes compared to their counterparts with post-secondary education. Similarly, females with primary education or below are 3.4 times, 1.9 times, and 1.4 times more likely to develop diabetes, hypertension, and high cholesterol, respectively, as compared to women with post-secondary education.
● | Inaccessibility in healthcare |
Universal healthcare access requires two conditions to be fulfilled: mandatory payment from those who can afford it and subsidies for those who are unable to afford it, ensuring responsible use of public funds. In Singapore’s public hospitals, at least 65% of the beds are heavily subsidized. Means testing, which started in 2009, ensures that all Singaporeans have access to high-quality healthcare without compromising on healthcare standards.
● | Complexities of getting the right timely healthcare |
Long queues and waiting hours in hospitals, especially in the Accident and Emergency Department, pose a challenge. The complex nature of medical information can also make it difficult for users to comprehend their healthcare situation. On average, acute care hospital stays last 4.7 days, while the wait period for elective surgeries is typically one week.
● | Confusions in healthcare products and services |
Users often struggle to find the products and services required for their healthcare, leading to confusion and inefficient outcomes. For instance, a lack of clear and precise oral and written information from both the doctors and/or pharmacists on the management of prescribed medication has led to therapeutic failure as a result of users not comprehending instructions.
● | Healthcare burden of obesity and chronic diseases |
According to the 2019/2020 National Population Health Survey, after a minor drop in 2013 (8.6%) and 2017 (8.6%), the crude prevalence of obesity among people aged 18 to 74 years in 2019-2020 had reverted to the level reported in 2010 (10.5%). Alarmingly, the proportion of students who were overweight in schools has also risen. The prevalence of chronic diseases (i.e., diabetes mellitus, hypertension, and hyperlipidemia) continued to show an increasing trend over the years, with prevalence rates of 9.5%, 35.5%, and 39.1%, respectively.
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Analysis of Integrated Smart Health-Tech Service Market Players in Singapore
Smart health-tech service market players in Singapore can be divided into three types. The first type of players are tech-first doctor-led healthcare delivery innovators. Generally speaking, the founders or co-founders of the health providers (healthcare companies) are medical professionals or have medical backgrounds, and technology is at the forefront of their healthcare delivery strategy. The second type of players are brick & mortar hospitals/clinic chain operators. Most of these players started developing telehealth as an ancillary service out of necessity due to the COVID-19 pandemic. The third type of players are generally entities or individuals outside the medical industry. Their founders or co-founders of the healthcare providers (healthcare companies) are typically from other industries who identified telehealth as a promising trend and started telehealth companies.
Strengths and Weaknesses of Each Player
a) | Tech-first doctor-led healthcare delivery innovators |
These innovators frequently have more specialized resources available to them, such as the assistance of numerous independent clinics and licensed physicians. These platforms also have more stringent platform management and medical quality standards. These platforms’ doctors are also more devoted, which fosters substantial trust among users and the local medical community in Singapore. However, their IT security may be weak and susceptible to hacking. Additionally, these platforms will be impacted by government interference or negative changes in regulation and legislation.
As for the user interface (“UI”) and user experience (“UX”) of tech-first doctor-led healthcare platforms, they usually have a straightforward user interface as well as a fast, seamless, and convenient process. With knowledge from both doctors and industry, these apps are easy to use and navigate through and can directly solve problems. Furthermore, the apps for healthcare providers are also comprehensive, professional, and straightforward.
b) | Hospital/clinic chains operators |
With the support of offline services and a parent company that has several hospitals and clinics, these platforms usually have professional resources and can attract users from their offline hospitals and clinics. However, as part of their suite of ancillary services, they focus on appointments and pre-clinical calls and are not comprehensive in their range of service through mobile applications. Furthermore, because they do not have a large ecosystem, their services are limited to their own doctors; for instance, their internal chatrooms cannot be extended to all doctors. Last but not least, these kinds of platforms usually have barriers to insurance players and innovative payments and have technology difficulties such as inconsistent online and offline systems; for instance, on occasions they may not fulfil users request for an online appointment.
In terms of the UI and UX aspects, such platforms target users of certain hospitals and increase accessibility to healthcare. Their teleconsultation and virtual care services enable users to make appointments for COVID-19 tests, purchase health screening services, and book sessions with a GP doctor or a specialist of their choice. However, their tilted resources toward hospitals lead to a reduced focus on software management. Therefore, they usually have many potential problems / vulnerabilities, which cause frequent updates and unnecessary patch packages. Additionally, some follow-up service is also poor; for instance, delivery and fulfillment information is always missed on their apps. Last but not least, they are hard to navigate and only offer basic functions.
c) | Non-medical industry operators |
These platforms are usually experienced in marketing, and they can understand and meet users’ needs in a timely manner. However, they tend to be unprofessional and have limited expertise. Besides, compared to doctor-led and hospital-led platforms, users and doctors trust non-medical industry operators’ platforms less.
As for the UI and UX of non-medical industry operators’ platforms, they are usually professionals in UI and UX design. Offering a comprehensive range of services, they are straightforward, user-friendly, and easy to navigate through. Their response time to users is also quick. However, their drug accessibility is not as good as doctor-led and hospital-led platforms, and their online and offline fulfillment capabilities are relatively weak. For instance, orders on these platforms are easy to cancel, resulting in complaints from users. In addition, they also have weaker physician management, and doctors may take a longer time to respond to users.
Business Analysis of Integrated Smart Health-Tech Service Market Players
Source: Frost & Sullivan analysis
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Market Size of SEA Smart Health-Tech Service Market
Total Healthcare Expenditure in Singapore (USD Billion), 2020-2027E
Singapore is an affluent Asian economy with a nominal GDP of USD644 billion in 2022 and a multiethnic population of 5.6 million people. It has one of the most rapidly aging populations in Asia, resulting in an increasing burden of chronic diseases. In 2020, Singapore’s total healthcare expenditure amounted to USD20.9 billion. With the integration of online and offline medical service models, such as the digitalization of medical records enabling real-time flow and sharing of user information, the efficiency of medical services is improving. This integration is driving the expansion of the integrated smart health-tech service market from the digital market to the offline market. Singapore’s healthcare expenditure is forecasted to reach USD26.5 billion by 2022, representing a CAGR of 12.6% from 2020 to 2022. It is further projected to reach USD43.8 billion by 2027.
Total Healthcare Expenditure in Singapore, 2020-2027E
Source: WHO- The Global Health Expenditure Database (GHED), Frost & Sullivan analysis
Total Healthcare Expenditure in Singapore (Divided by General Government Health Expenditure / Private Health Expenditure, USD Billion), 2020-2027E
The aging population and a trend toward earlier identification of chronic diseases, closer monitoring and follow-up, increased government healthcare spending and local population’s use of healthcare services have contributed to the increase in total healthcare expenditure in Singapore. The multi-tiered healthcare financing approach in Singapore through Medisave, MediShield Life & Integrated Shield Plans, ElderShield, and Medifund is likely to drive the growth in general government healthcare spending. Increased household income and health awareness are likely to drive the growth in private healthcare expenditure. Singapore recorded general government healthcare expenditure and private healthcare expenditure of USD11.0 billion and USD 9.9 billion respectively in 2020. They are forecasted to reach USD14.8 billion and USD11.7 billion by 2022, respectively, representing a CAGR of 16.2% and 8.6% from 2020 to 2022. General government healthcare expenditure and private healthcare expenditure are anticipated to reach USD26.9 billion, and USD 16.9 billion respectively, by 2027. To help control rising healthcare expenses and lessen the strain on users’ families, some nationwide programs emphasizing preventive healthcare will be introduced. It is expected that there will be changes in the way that healthcare is provided, in order to provide healthcare treatment that is more user-centric. The digitalization of medical records allows for the real-time flow and sharing of user information, improving the efficiency of medical services and the integration of online and offline medicine.
Breakdown of Healthcare Expenditure by Government and Private in Singapore, 2020-2027E
Source: WHO- The Global Health Expenditure Database (GHED), Frost & Sullivan analysis
The Population of Aging People in Singapore (Million), 2020-2027E
Driven by a rapidly declining total fertility rate and an increasing life expectancy, Singapore has entered an aging society. From 2020 to 2022, the population was aging rapidly in Singapore with people aged above 65 growing at a CAGR of 4.1%. There were 0.9 million individuals aged above 65 years old in 2020 and accounted for 15.2% of the resident population. The number of individuals above 65 years old is growing at a fast pace and is expected to continue its growth momentum into the future. This number of people within this age bracket is expected to reach 1.2 million by 2027, representing a CAGR of 4.2% from 2022 to 2027 and will account for 19.5% of the resident population. The aging population in Singapore presents significant challenges for the primary healthcare system. As the population ages, there is a need to adapt the healthcare system to cater to the specific needs of older individuals. Singapore has recognized the importance of addressing these challenges proactively. The government has implemented measures to strengthen the healthcare system, focusing on preventive care and providing high-quality yet affordable care for all, especially seniors. For example, the recently introduced healthcare reform plan, Healthier SG, aims to shift the healthcare strategy towards preventive care. This initiative recognizes the importance of the primary healthcare system in addressing the needs of an aging population. By providing accessible and personalized healthcare services, integrated smart health-tech service market players can play a crucial role in enhancing primary healthcare services for the aging population. According to “White Paper on Healthier SG”, the government intends to upgrade IT systems to facilitate seamless data sharing and support the implementation of Healthier SG. Telehealth technologies enable remote consultations, monitoring, and health education, allowing seniors to receive care and advice without the need for frequent hospital visits. These digital solutions can bridge the gap between healthcare providers and users, especially those with limited mobility or living in remote areas.
By leveraging on telehealth, Singapore can extend the reach of primary healthcare services to a larger population, including seniors. It can facilitate early detection and intervention, enhance chronic disease management, and provide continuous monitoring and support. Telehealth also enables healthcare professionals to access real-time data, improving diagnostics and treatment decision-making.
The Population of Aging People in Singapore, 2020-2027E
Sources: Prime Minister’s Office Singapore, Singapore Department of Statistics, Frost & Sullivan analysis
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Total primary care consultations number in Singapore (Million Time), 2020-2027E
The rising demand for medical resources from an aging population and increasing chronic disease burden are putting a strain on the healthcare system and exerting pressure on finite healthcare resources in Singapore. Total primary care consultations number in Singapore was 25.5 million times in 2020, growing by an average of 7.5% annually to reach 29.5 million in 2022. The number is expected to grow at a higher annual rate of 9.0% to reach 45.3 million times by 2027. The total number of primary care consultations in Singapore consists of both walk-in primary care consultations and teleconsultations. The COVID-19 pandemic has increased the awareness and importance of health in the minds of the Singapore population. Services and products related to staying healthy are starting to gain popularity among consumers. Therefore, telehealth, as an effective method and integrated platform of health services and products, is expected to increase in popularity in the coming years as well.
Total primary care consultations number in Singapore, 2020-2027E
Source: “Admissions and Outpatient Attendances” from the Ministry of Health in Singapore, Frost & Sullivan analysis
The Number of Teleconsultation in Singapore (Million Time), 2020-2027E
In recent years, teleconsultation has gained significant popularity in Singapore, and its usage has been further accelerated by the COVID-19 pandemic. The convenience and safety offered by teleconsultation services have attracted a considerable number of users, and this trend is expected to continue in the coming years. The use of telemedicine by doctors and patients alike is gradually gaining acceptance in the healthcare landscape. The number of teleconsultations in Singapore was 2.9 million times in 2020 and accounted for 11.4% as share of the total consultation numbers. It increased to 4.0 million times in 2022, representing a CAGR of 16.6% from 2020 to 2022, and accounted for 13.5% as share of total consultation numbers. It will further reach 10.7 million times by 2027 with a CAGR of 21.3% and accounted for 23.5% of the total consultation numbers. One notable factor contributing to the growth of teleconsultation is the existence of inherent users within the market. Many individuals who experienced teleconsultation during the pandemic have found it to be a convenient alternative to traditional in-person consultations. These users have become accustomed to the benefits of teleconsultation and have expressed their preference for this mode of healthcare delivery. As a result, they are less inclined to return to physical clinics for routine healthcare needs. Moreover, as users continue to utilize teleconsultation services, they begin to realize the advantages and cost-effectiveness it offers. This increased awareness and familiarity with teleconsultation prompts users to recommend it to their family members and friends. The positive word-of-mouth recommendations act as a catalyst for the expansion of the teleconsultation market, attracting potential users who have yet to try the service. As depicted in the data, the growing number of users and the influence of inherent and potential users are expected to drive a steady increase in teleconsultation utilization in Singapore.
The Number of Teleconsultations in Singapore, 2020-2027E
Source: “Admissions and Outpatient Attendances” from the Ministry of Health in Singapore, Frost & Sullivan analysis
Market Size of Teleconsultation Market in Singapore (USD Million), 2020-2027E
Singapore is one of the countries with the highest penetration rate of mobile Internet in the world. This has established a good ecosystem for the integrated smart health-tech service market. The wide coverage of the internet and the high popularity of smartphones in Singapore have contributed to the growth and adoption of telehealth services. The teleconsultation market in Singapore has witnessed significant growth in recent years, and this trend is expected to continue in the coming years. Within Singapore, those telemedicine players operate in accordance with the Ministry of Health’s clinical and data governance, which ensures that all the practices done in applications are in accordance with professional and ethical standards. The market size of the teleconsultation market in Singapore was USD96 million in 2020, and it reached USD147 million by 2022, representing a CAGR of 23.9% from 2020 to 2022, and it is expected to reach USD498 million by 2027 with a CAGR of 26.7%. One key factor contributing to this expansion is the widening scope of online consultation services. Previously, teleconsultation primarily served as a platform for basic medical inquiries. However, it has now evolved to include additional services such as prescription fulfillment and doctor-patient follow-ups, thereby enhancing its value proposition. With the introduction of these expanded services, the average expenditure per teleconsultation session has increased. Users can now conveniently obtain prescriptions for their medical needs through teleconsultation, eliminating the need for a separate visit to a physical pharmacy. Additionally, the inclusion of doctor-patient follow-ups allows for ongoing monitoring of the user’s condition, further enhancing the quality of care provided through teleconsultation. This expanded scope of services has attracted more users to engage in teleconsultation, resulting in a substantial market size for the teleconsultation market in Singapore. As depicted in the data, the increasing range of services offered through teleconsultation is expected to drive the market’s growth and contribute to the overall revenue generated in the sector. According to ‘APAC m-Health Market Report’ from Mordor Intelligence, APAC mobile health market size is expected to grow from $16.85 billion in 2023 to $49.84 billion by 2028, at a CAGR of 24.22% during this period. The APAC market is driven by an increasing remotely-located consumer base, growing investments in the digitalization of healthcare institutions, a rising number of chronic/infectious disease patient populations, including COVID-19, and increasing internet penetration.
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Market Size of the Teleconsultation Market in Singapore, 2020-2027E
Source: “Admissions and Outpatient Attendances” from the Ministry of Health in Singapore, Frost & Sullivan analysis
Competitive Landscape in Singapore
The product & service portfolio of platform
Compared with integrated smart health-tech services market players who regard telemedicine as their main business in Singapore, MaNaDr has set up one of the smartest and most comprehensive integrated all-in-one user care-centric platforms in the APAC region to deliver affordable care to users. Through the mobile application, MaNaDr offers users a seamless and hassle-free range of telehealth solutions, which encompasses teleconsultation services, including the issuance of electronic medical certificates and delivery of medications to users’ homes, as well as other personalized services such as weight management programs. As at October 31, 2023, MaNaDr had more than 1,000,000 registered users on the MaNaDr platform. At the same time, MaNaDr had onboarded more than 700 Singapore clinics and more than 1,500 medical professionals comprising GPs, specialized and allied health providers.
Furthermore, MaNaDr set up one of the smartest 24/7 virtual care ecosystems and support groups to help users navigate the complexities of receiving correct and timely care. With MaNaChat. the 24/7 user support service, MaNaDr operates Singapore’s only in-app live group chat service and has one of the fastest response time in Singapore and globally to support users.
For users with chronic conditions on the platform, MaNaDr is a pioneer in the APAC region, spearheading the building of a comprehensive weight management ecosystem to target over 60% of users who are overweight. For healthcare providers on the platform, MaNaDr hosts the region’s only in-app drug support and discussion group, where users can organize bulk purchases of drugs, discuss matters relating to the purchase of drugs, as well as the uses, side effects, and latest news on drugs.
Source: Company Website, Frost & Sullivan analysis
Notes:
(1) | Self-operated Walk-in Clinics: the platform has its own offline clinics operated directly by the company; |
(2) | Online Retail Pharmacy: the platform operates an online retail pharmacy with a curated selection of pharmaceutical products, medical device, and wellness products; |
(3) | Chronic Disease Management Program: the platform offers comprehensive management services including chronic condition consultation, regular checkups, risk assessment, integrated intervention and management provided by professional medical staff; |
(4) | Health Knowledge Forum: the platform offers a health knowledge forum where users and healthcare professionals may discuss various themes, offer their thoughts on various concerns, and share evidence-based information in order to proactively manage lifecare; |
(5) | Enterprise Telehealth Service: the platform creates effective employee benefits programs for enterprise and provides customizable telehealth solutions for employees; |
(6) | Pharmaceutical & Healthcare Products Wholesale Service: the platform offers pharmaceutical & healthcare product circulation services to pharmacies and primary healthcare institutions; |
(7) | Company A is a Singapore-based telehealth company that provides on on-demand healthcare solutions to help users lead happier and healthier lives; |
(8) | Company B is led by a qualified team of staff doctors and offers a seamless patient-centric experience by providing quality on-demand healthcare for individuals and businesses alike; |
(9) | Company C is a digital healthcare platform that provides medical consultation, patient-centric care, and healthcare screening services; |
(10) | Company D is a patient-centric digital healthcare platform that is simplifying the business of getting well and staying well. |
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The average number of teleconsultations per day
MaNaDr is the largest telehealth solutions mobile application in Singapore in terms of the number of user consultations per day. It has the largest number of teleconsultations per day in the six months ending May 2023, and is amongst the fastest-growing telehealth solutions providers in Singapore. Based on the latest operational data, MaNaDr has recorded more than 120,000 teleconsultation requests in October 2023.
Sources: DATA.AI. Database. (formerly App Annie), Company websites, Frost & Sullivan analysis
User feedback and rating (As of 14 June 2023)
MaNaDr’s mobile application has received a 4.8 and 4.9 star rating on the Apple App Store and Google Play Store in Singapore as of 14 June 2023. On a combined basis, MaNaDr was the most reviewed and highest rated app in Singapore as of 14 June 2023.
Source: play.google.com, apps.apple.com, Frost & Sullivan analysis
Price Perception based on Cost of Standard Consultation
As of May 31, 2023, MaNaDr offered the most affordable care to nearly 100,000 teleconsultation activities per month through the MaNaDr platform and strived to deliver quality, timely, and seamless care. As of October 31, 2023, MaNaDr offered the most affordable teleconsultation solution in terms of starting price when compared to peers.
Note:
Company D is not included because it does not have a fixed rate service and charges are dependent on user’s health status & requirements.
Source: Company websites, Frost & Sullivan analysis
Downloads
MaNaDr is a leading telehealth solutions provider in Singapore in terms of downloads in mobile application stores (e.g., Apple App Store and Google Play Store) in the latest 6 months ended May 31, 2023.
Source: DATA.AI. Database. (formerly App Annie), Frost & Sullivan analysis
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The number of countries covered by platform
MaNaDr is a leading telehealth solutions provider in Singapore in terms of the number of countries covered by its platform. Furthermore, the reach of the MaNaDr platform extends to countries in the APAC region, and it is the only telehealth solutions company based in Singapore that provides integrated smart health-tech services in the APAC region.
Source: Company Website, Frost & Sullivan analysis
Comparison between traditional primary healthcare and MaNaDr
Compared with traditional primary healthcare in Singapore and United States, MaNaDr has transformed how healthcare is consumed from the perspective of patients and has transformed how healthcare is managed from the perspective of healthcare professionals.
Notes: (1) US$ equivalent: Based on US$1:S$1.37 (as of October, 3 2023) | (2) Source: https://www.statnews.com/2023/05/02/doctor-appointment-wait-times-solutions/ (accessed October 3, 2023) | (3) ~95% of MaNaDr patients will be attended by a physician in less than 1 minute during normal working hours of between 8am to 8pm. | (4) Patient can access AI Face-scan to continuously monitor their well-being, and soon, an AI-companion that reminds, encourages and tracks the patient’s healthcare journey | (5) Source: https://pubmed.ncbi.nlm.nih.gov/29982549/ (accessed October, 3 2023)
Sources: Company websites, Frost & Sullivan analysis
Growth Drivers of Smart Health-Tech Service Market
Online and Offline Integrated Fulfillment in One Network
The integration of online and offline medical service models accelerates the development of the telehealth market. The smart health-tech service platforms start to integrate medical services across online and offline channels, enabling providers to conduct online consultations, plan users’ in-person appointments, synchronize pertinent medical records, and then respond to online inquiries about follow-up and recovery whenever and wherever they arise. For example, the digitalization of medical records allows for the real-time flow and sharing of user information, thus improving the efficiency of medical services. This will help the integrated smart health-tech service market expand from the digital market to the offline market.
Increasing Prevalence of Chronic Disease
Chronic disease management requires long-term and integrated healthcare services. SEA is facing an epidemic of chronic non-communicable diseases that is likely to worsen further in the future because of the aging problem. With the help of digital technology as applied in the integrated smart health-tech service market, physicians can easily monitor and keep track of the electronic records of users.
Growing Population and Service Needs of Aging Population
An aging population normally has a greater demand for healthcare management due to their health conditions and pursuit of a higher quality of life. It might be inconvenient for the elderly to physically visit clinics and hospitals. The integrated smart health-tech service market provides a one-stop comprehensive service portfolio that covers various services, including health monitoring, remote health consultations, nutrition recommendations and chronic disease management.
Growing Health Awareness
The COVID-19 pandemic has increased the awareness and importance of health in the minds of the SEA population. Services and products to allow consumers to maintain their health are starting to gain popularity among consumers. Therefore, telehealth, as an effective method and integrated platform of health services and products, is expected to increase in popularity in the coming years as well.
Technology Updates and Service Improvement
A better service model will emerge and rise rapidly, which can promote the transformation of medical care to a personalized model and precisely meet different needs. Besides, the use of advanced technology can eliminate the information barrier between users and doctors. Last but not least, the portability of user data is experiencing significant developments. Travelling for medical treatment and receiving medical care abroad are becoming more common due to an increase in studies and business exchanges between people in different regions. User data may be easily transferred from one country to another or from one doctor to another thanks to telehealth platforms. The telehealth market is expanding as a result of technological advancements and better services.
Wide Coverage of the Internet and High Popularity of Smartphones
Singapore is one of the countries with the highest penetration rate of mobile Internet in the world. There were 5.81 million internet users in Singapore in early 2023, when internet penetration stood at 96.9% and 9.22 million cellular mobile connections were active, which were more than the total population, according to a report on Singapore about digital devices and services. This established a good ecosystem for the integrated smart health-tech service market.
Future Trends of the Smart Health-Tech Service Market
Integration of online retail pharmacy and healthcare services
The integration of online retail pharmacy and online consulting services will boost the growth of the integrated smart health-tech service market, especially in the sales of pharmaceutical products. The purchase of pharmaceutical products and healthcare services are complementary, and platforms that embody both elements and possess a comprehensive product portfolio are firmly positioned to capture greater demand as compared to platforms with a more singular business focus.
Building a User-Centered Ecosystem
The integrated smart health-tech service market has effectively built a user-centered ecological system that coordinates more complex interactions and transactions between users, providers, payors, and other healthcare stakeholders in an integrated and seamless manner. Firstly, online medical services led by doctors will eliminate the information gap between users and doctors. Lack of understanding of medical information by users can lead to adverse health outcomes and decreased satisfaction with the doctor. The information offered through this ecosystem will be current, precise, thorough, trustworthy, understandable, and useful. Secondly, benefiting from advanced technology, the treatment of users is well-customized based on users’ preferences and intentions. Finally, a stable offline supply chain can guarantee effective delivery and provide a convenient experience.
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Customized and Intelligent Telehealth solutions
Digital services will help establish a more intelligent and comprehensive health file for users in order for healthcare practitioners and providers to provide a tailored treatment plan. For instance, when users need to be referred for reasons such as job changes or travel, their medical records can be quickly, systematically, and comprehensively migrated. This, complemented by an offline delivery and fulfillment system, will aid telehealth providers in offering a more precise and convenient disease and health management system. Physicians could potentially expand their user base to include healthy people.
Specialized Chronic Disease Management
The integration of the internet, technological tools, and high-quality medical resources and the implementation of chronic disease management in specialized diseases will be major trends. For example, current market competitors have begun to focus on different types of chronic diseases, and internet hospitals can deeply cultivate a specialty in chronic disease medical treatment. Chronic disease management requires long-term and integrated healthcare services. With the help of digital technology applied in the integrated smart health-tech service market, physicians can easily monitor and keep track of the electronic records of users. This aids in the management of the increasing prevalence of chronic non-communicable diseases, which is expected to worsen due to the aging population.
Better user experience empowered by advanced technology
There are some problems, such as perceptions of technology security, that remain to be addressed in order to ensure that the user base is sustainable. With the upgrading of technology to optimize the content in all aspects of design, production, dissemination, and feedback, telehealth solutions platforms can attract more users and achieve higher user stickiness, including but not limited to online consulting services, online drug prescriptions, and online drug purchases.
Key Success Factors of Smart Health-Tech Service Market
Technology-driven platform
Safety and effectiveness of the services and products are key concerns in the integrated smart health-tech service market. Companies that provide more advanced technology, such as wearable medical devices, AI scans, and telesurgery, would be able to effectively improve user compliance. Caregivers can examine these aspects separately from hardware and software perspectives.
All services are direct-to-consumer
Companies should provide access to quality user-centered healthcare services and products at affordable prices and offer those users an omnichannel healthcare service combining online services and offline access for healthcare facilities to offer various healthcare services directly to them. This means that higher cost-effectiveness is a key success factor. Healthcare services that are more suitable for the individual users are introduced, thereby fulfilling consumers’ varying needs and promoting an efficient utilization of medical resources. In addition, making healthcare services more affordable can help reduce the financial burden on consumers.
Healthcare ecosystem in an integrated and seamless manner
COVID-19 has acted as a catalyst for telemedicine and telehealth in the past three years. In the post-COVID-19 era, providers with established telehealth platforms should consider how to pivot and promote their service. It has been observed that most users enjoy direct interaction with clinicians. Therefore, providers could capture the telehealth traffic through media such as health knowledge forums to grow their businesses. Enhanced communications between users and doctors facilitate proactive and ongoing lifecare management. Ultimately, providers can form an integrated healthcare management ecosystem by connecting multiple stakeholders. In addition, companies could provide care by going beyond the traditional channels and partnering with other partners and stakeholders in the healthcare industry.
Special mobile applications for users with obesity and chronic diseases
Such special applications which are targeted at users with obesity and chronic diseases are one of the strategic differentiators. Obesity is linked to chronic diseases such as high blood pressure, diabetes, cancer, and orthopedic disorders. Thus, the increasing rate of obesity fuels the increasing incidence of chronic diseases. As a result, there is a growing need for effective obesity treatment solutions to reduce the risk of chronic diseases. Companies that identify this huge market space and keep those users highly sticky will do well in the future.
User-friendly and optimized UI interaction system
Since information or technology in the medical field is sometimes difficult for users to understand, the tendency of users is to opt for platforms with a user-friendly user interaction system. Companies which provide streamlining medical procedures will enhance the quality of care by making routine medical processes more efficient.
Replicable Health-tech’s business model to the rest of world
Some mobile applications have been seen to successfully apply in Singapore. Although the types and sizes of medical institutions vary from country to country, outstanding business models can be imitated. As long as attention is paid to both the purpose and the process of copying, it is possible to replicate a successful business model in other nations. The player can extend the business internationally if the technology and business model are highly adaptable and repeatable.
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Overview
We are a leading telehealth solutions provider in Singapore in terms of various matrices, such as the number of patient consultations per day and the ranking of our mobile application, according to Frost & Sullivan. According to Frost & Sullivan, we have the largest number of teleconsultations per day in the six months ending May 2023, and are amongst the fastest-growing telehealth solutions providers in Singapore. Our MaNaDr mobile application has received a 4.8 and 4.9 star rating on the Apple App Store and Google Play Store in Singapore respectively as of June 14, 2023. According to Frost & Sullivan, on a combined basis, MaNaDr was the most reviewed and highest rated mobile application in Singapore as of June 14, 2023 and has the largest number of teleconsultations per day in the six months ending May 2023.
We provide our services on our MaNaDr platform, which is accessible via our mobile application and website. We seek to build a 360-degree holistic healthcare ecosystem supported by a global community of healthcare providers, with the mission to make healthcare simple and seamless, instantaneous, affordable and available to the masses. We serve both the community of users, by offering personalized and reliable medical attention to users worldwide, as well as the community of healthcare providers, by allowing them to have a broader reach to users through virtual clinics without any start-up costs and the ability to connect to a global network of peer-to-peer support groups and partners.
Our MaNaDr platform is a platform designed and created by doctors, for doctors and users. We were founded by a team of doctors with the aim of harnessing the power of IT and with a problem-solving centric approach to address global healthcare concerns and issues such as inequalities and inaccessibility in healthcare, complexities in obtaining correct healthcare in a timely manner, confusion due to the wide range of healthcare products and services available, and the global healthcare burden of obesity and chronic diseases.
The diagram below illustrates how we have developed our business with the aim of addressing each of these global healthcare concerns and issues, and this problem-solving approach is one of our Group’s key unique features and competitive strengths:
● Inequalities in healthcare: We have set up one of the smartest integrated all-in-one patient care-centric platforms in the region to deliver affordable care to users. According to Frost & Sullivan, as at May 31, 2023, MaNaDr offered the most affordable care to nearly 100,000 teleconsultation activities per month through our MaNaDr platform and strived to deliver quality, timely and seamless care. We have managed to offer affordable healthcare through the use of technological tools, as we have incorporated AI, smart logic and algorithms to simplify the entire consultation process, at a price point that does not compromise the quality of care afforded. The simplification of the teleconsultation process has allowed us to offer instantaneous care to our users round-the-clock. We also have an Al-driven platform that routes the patients to the relevant pool of healthcare providers and have one of the fastest response times in Singapore and globally, according to Frost & Sullivan. The quality of care is further bolstered by the fact that our MaNaDr platform is supported by a trusted network of healthcare professionals both in Singapore and the region, many of whom are part of the personal network and contacts of our doctor-founders, Dr. Siaw Tung Yeng and Dr. Teoh Pui Pui.
● Inaccessibility in healthcare: To alleviate inaccessibility in healthcare encountered, we have capitalized on the ubiquity of mobile technology and the rise in social platforms to set up MaNaForum, which is a social forum with multimedia capabilities within our MaNaDr mobile application, to empower our users and providers from all around the world to share and transmit information on medical conditions, interact with one another freely and ask questions at no charge. MaNaForum is supported by doctors, healthcare professionals and other key players in the healthcare sector such as dieticians and gym instructors. Furthermore, the reach on our MaNaDr platform extends to countries in the APAC region and according to Frost & Sullivan, we are the only telehealth solutions company based in Singapore that provides integrated smart health-tech service in the APAC region. It has also broadened access to healthcare to many in Singapore and the region, with many users in our ecosystem being able to post questions freely on various topics ranging from the pandemic, health and medical conditions and symptoms, fitness and to preventive care such as weight management.
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● Complexities in obtaining correct healthcare in a timely manner: To break down and simplify the complexities in healthcare faced by users, we seek to provide simplified care. This is achieved by breaking down barriers in time, place, and space with the setting up one of the smartest 24/7 virtual care ecosystems and support groups, according to Frost & Sullivan, to help users navigate the complexities faced in receiving correct and timely care. The platform is centered on providing trusted care to users, with users being automatically routed to the same doctor to ensure continuity of care and comprehensive healthcare, thereby bridging the gap between a teleconsultation and physical consultation process. Users also have ready access to a panel of healthcare professionals across various healthcare disciplines on the platform, which greatly simplifies the delivery of healthcare as users are able to find the right care timely and with ease. As opposed to waiting weeks or months for a physical appointment or a referral to a specialist doctor, we can provide our users with the right care within hours whenever or wherever they are in the world, without them having to leave their homes. The platform enables users to be provided with comprehensive and continuous care from their primary care doctors who act as their gatekeepers and can help them navigate the increasingly complex healthcare system, and yet have access to a pool of specialist doctors in the event they require specialist medical attention.
● Confusion due to the wide range of healthcare products and services available: With the volume of healthcare products and services available on the market, users often face difficulties in finding the products and services they need, which could result in confusion and adverse outcomes. To address this, we have set up a web store, MaNaShop/MaNaStore, containing more than 2,000 curated products and services from reliable suppliers and service providers worldwide, so as to deliver quality trusted products to users at affordable prices. We offer targeted products which meet our quality standards for our users across different genders and age brackets to address their specific healthcare and wellness needs. MaNaShop/MaNaStore utilizes smart logic and algorithms to allow users to navigate through the online store and locate what they require with ease. We have also incorporated a QR code into some of our key products, to allow users to access further information on any associated health or medical conditions that the product seeks to address, as well as access to doctors via consultation with just a scan. There is also a 24/7 customer support service to ensure timely delivery of orders placed and to address any questions that users may pose.
● Global healthcare burden of obesity and chronic diseases: To alleviate chronic healthcare conditions, we have identified the needs of users and developed a 360-degree healthcare ecosystem offering holistic, comprehensive, continuing and long-term preventive and pre-emptive care centered around such needs. The ecosystem is supported by a community of healthcare providers, patient support groups, healthcare coordinators, pharmaceutical companies and paramedical service providers whom we partner with. We have also incorporated technological tools like AI, smart diaries for patients to monitor their healthcare journey, smart devices, AI Facescan function in our MaNaDr mobile application and care pathway, or clinical care pathway, a set of guidelines that outline recommended steps and timeframes for managing and treating a specific medical condition or procedure to establish a standardized and efficient approach to the delivery of care, as part of the treatment and care regime. According to Frost & Sullivan, we are a pioneer in the APAC region, spearheading the building of a comprehensive weight management ecosystem that aims to target over 60% of users on our MaNaDr platform who access the “Consult Weight Management” function on our MaNaDr platform and who are overweight. Since the launch of the comprehensive weight management system in December 2022, most of the participants in our weight management program achieved the weight loss target set by our doctors as at September 30, 2023.
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As our founding team and management comprise doctors and other healthcare providers, we believe that we have an in-depth understanding on the needs of healthcare providers seeking to venture into providing healthcare solutions virtually and are able to readily tap on our network of doctors in Singapore, Malaysia and the region, to onboard them onto our platform. Since the inception of our MaNaDr platform, the number of healthcare providers had grown steadily from 22 as at December 31, 2016 to 1,230 as at December 31, 2022. Our MaNaDr platform facilitates access to a global network of peer-to-peer support groups and partners, which we believe has contributed greatly to the steady growth in the number of healthcare providers that have been onboarded.
Our platform and services have also been widely adopted in Singapore and was expanded during the COVID-19 pandemic in partnership with Singapore’s Ministry of Health and Ministry of Manpower, and with the support and endorsement from doctors, corporate partners and the public sector in both Singapore and Malaysia. We worked closely with the Singapore health authorities in the fight against COVID-19. In recognition of our efforts, our Company was awarded the President’s Certificate of Commendation (COVID-19) and our founders, Dr. Siaw Tung Yeng and Dr. Teoh Pui Pui were awarded the Public Service Medal (Pingat Bakti Masyaraka) (COVID-19) by the President of Singapore in 2023.
We launched our mobile application in October 2016 and the website in January 2019. Our MaNaDr mobile application is streamlined to provide users with ready access to healthcare and medical providers, and was designed and created by a team of doctors who have an extensive understanding of users’ healthcare needs and preferences. Through our mobile application, we offer our users with a range of seamless and hassle-free telehealth solutions, which encompasses teleconsultation services, including the issuance of electronic medical certificates and delivery of medications to users’ homes, as well as other personalized services such as weight management programs which, according to Frost & Sullivan, are offered at the most affordable price points in Singapore based on the cost of standard consultation.
We believe that we have established a comprehensive ecosystem which connects healthcare needs and services in a single platform. We have achieved a global reach on our mobile application and website and as at September 2023, we had active users from more than 18 various jurisdictions across the world, including Singapore, Vietnam, Malaysia, Australia, India and the Philippines. As at October 31, 2023, we had onboarded more than 700 Singapore clinics and more than 1,500 medical professionals comprising GPs, specialized and allied health providers. We had also recorded more than 120,000 teleconsultation requests in October 2023 and as at October 31, 2023, we have completed more than 1,600,000 tele-consultation requests since our inception in 2016. As at October 31, 2023, we had more than 1 million registered users on our MaNaDr platform, having grown from a handful of registered users since our inception in 2016. The specialists available through our platform include most major medical and surgical disciplines, such as cardiologists, dermatologists, endocrinologists, gastroenterologists, internal medicine specialists, obstetricians & gynecologists, otorhinolaryngologists, psychiatrists and urologists.
In the month of October 2023, we provided more than 120,000 teleconsultations through our MaNaDr mobile application. Users can connect with doctors from either our in-house team or one of the clinics in our network of service providers through the mobile application to chat in real-time via the in-application video call and text messaging function, as well as to send photos or videos to the doctors as part of the teleconsultation process. During the COVID-19 pandemic, we also provided services for supervised tele-ART tests with a certified ART supervisor over video calls on our MaNaDr mobile application, as well as for COVID-19 PCR home swab tests by our team of certified medical professionals comprising doctors and nurses.
Our MaNaDr platform also provides users with easy access to a variety of products and services through MaNaShop/MaNaStore, our online e-commerce platform for B2C sales of medical, pharmaceutical and other health products, such as OTC medications, vitamins and supplements. Services such as medical screenings and procedures including vaccinations, serology tests and swab tests are also offered. We also generate revenue by selling healthcare and wellness products under a direct sales model and also from earning commissions from third-party vendors under an online marketplace model. In addition, we have also set up MaNaPharma in January 2017 to engage in offline B2B sales of pharmaceutical products and medical devices to other clinics and healthcare providers in Singapore.
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Our Group also operates the MaNaDr Clinic, which is a brick-and-mortar GP clinic located in Singapore with an in-house medical team comprising three doctors and five other medical professionals as of December 31, 2022. It provides consultations and family doctor services, as well as geriatric care, health check-ups and other services for users who prefer in-person consultations and services, and also specializes in gender-affirming care.
In January 2023, we launched MaNaCare, a one-stop employee flexi-benefits platform offering affordable and accessible healthcare and wellness solutions for employees of our corporate customers, who will be able to access the full suite of products and services offered on our MaNaDr platform, ranging from general practitioners, specialist and allied healthcare panel services to teleconsultations, in-person clinics, on-site health screening, online marketplace and wellness programs.
We also collaborate with other consumer healthcare service providers such as physiotherapy and fitness centers, dieticians, eyecare professionals, mental health professionals, fertility specialists and aesthetic care. Through the comprehensive suite of products and services, we believe that we have developed a one-stop platform that connects users with an accessible and affordance range of healthcare and wellness solutions, and these have enabled us to establish a 360-degree healthcare ecosystem through which users are able to enjoy online and offline healthcare resources.
Our Mission
To be our users’ trusted companion on their lifelong healthcare journey by providing a seamless healthcare experience from start to finish, which is affordable, accessible and easy to understand to both users and healthcare providers.
Our Strengths
We believe that we are well-positioned to achieve our strategic goals through several key business strengths, including the following:
Leading position in Singapore’s rapidly growing telehealth solutions industry
We are a leading telehealth solutions provider in Singapore in terms of various matrices, such as the number of patient consultations per day and the ranking of our mobile application, according to Frost & Sullivan. According to Frost & Sullivan, we have the largest number of teleconsultations per day in the six months ending May 2023, and are amongst the fastest-growing telehealth solutions providers in Singapore. Our MaNaDr mobile application has received a 4.8 and 4.9 star rating on the Apple App Store and Google Play Store in Singapore respectively as of June 14, 2023. According to Frost & Sullivan, on a combined basis, MaNaDr was the most reviewed and highest rated mobile application in Singapore as of June 14, 2023 and has the largest number of teleconsultations per day in the six months ending May 2023.
As a result of developments in mobile Internet technology and AI, and greater access to such technology in the telehealth solutions industry, Internet healthcare is expected to further disrupt the traditional healthcare services industry and trigger a shift in how users seek and receive healthcare services in Singapore and globally. Since the launch of our mobile application and website in 2016 and 2019, respectively, we had recorded more than 420,000 registered users on our mobile application and more than 13,000 registered users on our website as of December 31, 2022.
On the back of the rapidly growing telehealth solutions industry, increasing disposable income, rising healthcare awareness and improving Internet technologies, the Singapore telehealth solutions market is poised for significant growth to meet the demand for efficient and quality healthcare services. As a leader in Singapore’s telehealth solutions industry, we believe that we are well-positioned to benefit from the rapid growth of this industry by accelerating user acquisition and business expansion. We believe that the comprehensive ecosystem that we have established, as well as the range and ease of access of the healthcare and wellness solutions that we offer, present unique value propositions for our users (both individuals and corporate customers) as well as our service providers, and are crucial to the continual growth of our business, for the following reasons:
● General Users: Our platform offers a one-stop portal for users to access extensive online and offline healthcare resources in a cost-effective and convenient manner, and user experience that is remarkably different from the traditional medical experience. Users can easily access our mobile application for teleconsultation and other telehealth solutions. Additionally, we integrate offline services and products and offer a variety of services to address the different needs of our users. Our online e-commerce platform, MaNaShop/MaNaStore, offers a wide range of selected healthcare products with timely delivery of products purchased. A growing community of users has also developed on MaNaForum, whereby users can also post their questions on various health topics and issues, which will be answered by our panel of doctors and other healthcare providers at no charge. We also create and maintain a personalized e-health profile for each user, which allows us to track and manage their health to improve and maintain their health status.
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● Service Providers: Taking advantage of our growing user base and understanding of our users, we channel our users to hospitals, clinics and other healthcare institutions in our network based on their needs and create monetization opportunities for pharmacies, retailers and distributors via our MaNaShop/MaNaStore as they benefit from the user traffic and an additional revenue source through sales on our platform. We lower the user acquisition costs for such service providers, and also help to increase awareness and generate publicity for the various services provided at healthcare institutions.
● Corporate Customers: We offer health membership plans and consumer healthcare service packages for employers to reduce their healthcare spending while at the same time offering convenient, affordable and quality healthcare to their employees under MaNaCare. MaNaCare offers a comprehensive range of corporate healthcare and wellness services, including GP, specialist and allied healthcare panel services, tele-consultation, in-person clinics, on-site health screening, online marketplace and wellness programs. We also collaborate with insurance companies to provide policyholders with value-added healthcare services complementary to the insurance products, so as to reduce costs.
Multi-faceted business model that offers a one-stop portal connecting our users with both online and offline healthcare resources
Our multi-faceted business model positions us as a one-stop portal to the healthcare ecosystem, connecting users to online and offline healthcare resources. We offer a comprehensive suite of medical-related and other services including teleconsultations and health check-up services, vaccinations, skin and aesthetics services and other services on our MaNaDr platform and at the MaNaDr Clinic. In addition, we engage in B2C sales of medical and other health products on the MaNaShop/MaNaStore online e-commerce platform to our users, B2C sales of pharmaceutical products and medical devices to other clinics and healthcare providers through MaNaPharma, as well as provide corporate healthcare and wellness services via MaNaCare to corporate customers.
We recognize the varying needs of our users – both when they are in need of medical care and when they want to stay healthy. In response to users’ needs, we offer family doctor services, including online consultation services provided primarily by our in-house team, with a primary focus on common and chronic illnesses, as well as hospital referral and appointment services. Such services can be accessed both online through the mobile application and website, and offline at the physical brick-and-mortar MaNaDr Clinic. Our MaNaShop/MaNaStore online e-commerce platform collaborates with third-party delivery couriers via our own platform to provide timely deliveries to our users in Singapore.
We believe that the range of online and offline services and product offerings enables us to better serve our users and to bridge the gap between them and quality healthcare service providers. Our analysis of user behavior and demand also allows us to optimize and expand service offerings and enhance user engagement on our platform. Users are able to create a personalized e-health profile that will be continuously updated and improved with new user functions throughout their lifetime, which is intended to form an integral part of their active health management on our MaNaDr platform. Through in-depth user understanding and a comprehensive network of healthcare providers across most medical disciplines, our MaNaDr platform is able to optimize the use of medical resources by matching users with doctors and physicians with the relevant expertise. To enhance user engagement, we have also created an online social platform, MaNaForum, for our base of global users to post questions anonymously on various health topics and issues, which will be answered by our panel of doctors and physicians. It also provides a platform for users having similar healthcare needs or problems to exchange opinions and ideas. According to Frost & Sullivan, we have set up one of the smartest 24/7 virtual care ecosystems and support groups to help users navigate the complexities faced in receiving correct and timely care. According to Frost & Sullivan, we operate Singapore’s only in-app live group chat service via MaNaChat, the 24/7 customer support service, and have one of the fastest response times in Singapore and globally to support users, and hosts the region’s only in-app drug support and discussion group via MaNaForum, where users can organize bulk purchases of drugs, discuss matters relating to the purchase of drugs, as well as the uses, side effects, and latest news on drugs. We believe that our healthcare ecosystem creates value for both healthcare service providers and users alike, in addition to providing convenient online and offline access to a wide range of medical services and cost-effective solutions.
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Innovative technological solutions empowered by an experienced in-house medical team
We have digitalized all of our core operations, building a full suite of digital operations systems solutions to ensure end-to-end quality control from procurement to fulfilment and delivery for the MaNaShop/MaNaStore online e-commerce platform and offline sales, teleconsultation services, issuance of electronic medical certificates, home delivery of medications, new product reviews to user feedback. For example, we employ technology for accurate demand forecasting to help us ensure the stability and quality of our product supply while increasing inventory turnover rates, and the data insights that we can gain also help us with upstream supplier selection and product selection.
We offer 24/7 quality teleconsultation services with minimal waiting time through our self-developed mobile application, which also allows optimizing of delivery routes by matching the closest clinic from our network of service providers to the user, such that the prescription submitted by the doctor following the teleconsultation will be quickly fulfilled by the dispatch and home delivery of the medications. We are also able to improve user engagement, repurchase rates, order size and user lifetime value by creating precise user preference profiles, optimizing product offerings and categories, and consistently enhancing personalized search functions and recommendations. One key feature that we have introduced to increase user engagement is the AI Facescan function on the mobile application, which allows users to know what their estimated vitals are, simply with a basic scan of their face by their phones. This is useful for one to monitor one’s own health condition, as well as for users to describe their condition to their physicians. We work with a Toronto-based technology firm that holds an award-winning and patented contactless smartphone-based blood pressure measurement technology known as transdermal optical imaging, which allows for changes in blood flow to be captured using light and the translucency of human skin, using simply the conventional camera in users’ mobile devices, to provide the AI Facescan function to our users.
In addition, as part of the MaNaCare program offered to corporate customers, we provide digital solutions such as automated and real-time administrative processing and claims management, and cashless payment services which eliminates the need for employees to first make payment before submitting claims for reimbursement. The digitization of our business enables us to optimize and provide positive user experience for both our users as well as our suppliers and service providers, which we believe has contributed to the continuous expansion of our user base and supply chain. As a result, we deeply value and will continue to invest in innovative technological solutions.
Our technology infrastructure is supported primarily by our in-house tech and medical team, and supplemented by our network of clinic service providers. We have adopted stringent hiring and screening procedures, and provide ongoing professional training for our medical staff. We believe that our dedicated in-house medical team and standardized consultation protocols also enable us to effectively deliver reliable and high-quality services, which further enhances the user experience. As of December 31, 2022, the medical team comprised more than 200 doctors and allied healthcare professionals.
Comprehensive service offerings that maximize user interactions and engagement
We believe that our success depends on the ability to serve users both when they are in need of medical care and when they are healthy, through a comprehensive range of medical-related and other service offerings. By addressing our users’ full range of healthcare needs, we maximize our user interaction frequency, which in turn increases user engagement and stickiness throughout our users’ lifetimes. We believe that consistently high-quality user experience is critical to increasing traffic on our website and mobile application.
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We offer our users a comprehensive range of family doctor services, which includes consultation, treatment, as well as healthcare and wellness programs. Additionally, we offer a wide spectrum of other types of services such as the sale of products like OTC medications, vitamins and supplements. We also provide services such as medical screenings, and procedures such as vaccinations, serology tests and swab tests to users via MaNaShop/MaNaStore, our online e-commerce platform. MaNaShop/MaNaStore offers a wide variety of healthcare and wellness products and services, and we recommend products of potential interest based on the user’s profile, history of interactions, and other users’ data. Furthermore, we offer relevant health and wellness information via MaNaForum. We have also implemented interactive reward plans and customer referral plans that are intended to stimulate constant user engagement with our MaNaDr platform for purposes of maintaining user loyalty and increase our user base. In the year ended June 30, 2022, an average of 10% of the users who utilized our family doctor services during a month also used our other services. Through frequent interactions that are of consistent quality, we believe we can build trust and user loyalty in order to facilitate the adoption and consistent participation in our ecosystem which, in turn, broaden our user base and strengthen user engagement.
Rapidly growing and diversified monetization channels
We have demonstrated our ability to monetize our large and increasingly diversified user base, and sustain our growth from diverse medical and wellness segments, through the (i) MaNaDr website and mobile application and the provision of consumer teleconsultations, medicine, appointments and e-medical certificate services, (ii) MaNaShop/MaNaStore, the e-commerce platform for B2C sales of products and services to users, (iii) MaNaDr Clinic, which offers a comprehensive list of medical services for users who prefer in-person consultations and services, (iv) offline B2B sales of pharmaceutical products to other clinics and healthcare providers and provide health check-up services to our users and (v) MaNaCare, a one-stop employee flexi-benefits platform offering affordable and accessible healthcare and wellness solutions for employees of corporate customers. With the expansion of the suite of products and services offered on our MaNaDr platform, our total revenue had also correspondingly increased by approximately 169%, from US$2.6 million in the year ended June 30, 2021 to US$7.0 million in the year ended June 30, 2022.
We maintain a balanced mix of medical and wellness offerings that are highly sought after, and those that are designed to meet both the general and specific healthcare and wellness needs of the public. As user traffic on the website and mobile application increases and our user base grows, more partners and third-party service providers will be attracted to join our network and create monetization opportunities, which further enhances our capabilities to serve our users and our competitiveness in the telehealth solutions industry.
Strong management team with both technology and medical experiences
We benefit from the leadership of our management team that combines in-depth understanding of the technology industry in Singapore and the APAC region with expertise in Singapore’s medical and healthcare industry. This integration has enabled us to become a leading telehealth solutions provider in the Singapore telehealth solutions market with innovative AI-driven mobile solutions.
Our executive officers have an average of over 25 years of relevant industry experience. Dr. Siaw Tung Yeng, our Co-Founder and CEO, has a wealth of experience in healthcare and medical informatics. He laid the foundation for the conceptualization, development and commercialization of MaNaDr. He has been complementing his work as a Senior Consultant Family Physician with knowledge and experience in IT and healthcare and medical informatics for more than 30 years and had previously worked with the Ministry of Health of Singapore to implement IT systems and solutions. He also sits on various task forces and advisory committees of the Ministry of Health of Singapore and is actively involved in the strategic planning of medical informatics programs. He is also a member of the National Telemedicine Advisory Committee (NTAC) and sits in the Singapore Medical Council (SMC) Disciplinary Tribunal currently. Prior to founding MaNaDr, he was also the Chief Information Officer of Healthway Medical Group.
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Dr. Teoh Pui Pui, our Co-Founder and Executive Director, is a pioneer in the telehealth solutions industry in Singapore. In 2020, she led a group of doctors, working closely with the Ministry of Health of Singapore and Migrant Workers’ Centre, to form the frontline forward triage medical care for foreign migrant workers during the peak of the COVID-19 outbreak in the dormitories in Singapore and spearheaded an island-wide roll out of tele-monitoring devices to the dormitories as part of the chronic care management and disease surveillance.
Both of our founders, Dr. Siaw Tung Yeng and Dr. Teoh Pui Pui, have been awarded the Public Service Medal (Pingat Bakti Masyaraka) (COVID-19) by the President of Singapore in 2023, in recognition of their contributions to public service during the COVID-19 pandemic.
Our Strategies
Expand our user base and systematically enhance our user engagement, including through technological tools, to strengthen our market position
We plan to continue to expand our user base through natural traffic, external marketing and promotional activities. Expansion through natural traffic will be achieved by word-of-mouth resulting from more comprehensive service offerings and high service quality, changes in user behavior and improved brand awareness. Expansion through external marketing will be achieved by the acquisition of new users through mobile application stores, as well as online and offline marketing activities.
We intend to further enhance our user engagement through further developing data-driven and predictive healthcare services to actively engage our users in their daily lives and further simplify their healthcare journey, such as by incorporating smart predicative AI into the mobile application and website to deliver the correct healthcare to our users on a round-the-clock basis, as well as build-in predictive and pre-emptive care automated by AI to prompt and alert the users round the clock with daily healthcare reminders and alerts. We also maintain a focus on delivering personalized and customized care to our users by allowing users to adjust and personalize their health goals.
We also intend to invest in the development of Internet of Medical Things (IoMT), which refers to a network of medical devices and applications that can connect to health care IT systems using networking technologies. Users can wear such medical devices, which contain heart rate monitoring and blood pressure sensors, with the information gathered transmitted to a cloud that can generate health reports to be reviewed by doctors. Such technology has the effects of enhanced patient care, improved workflow efficiency, better medication management and increased patient engagement and can also bring about potential cost savings to users.
We will also scale up MaNaForum into a global social forum beyond APAC to serve the healthcare needs of users across the world. To deepen user engagement, we intend to leverage on innovative algorithms and incorporate short clips and smart videos based on users’ interests and state of health. We also intend to employ AI tools to provide a bridge between individual users and the global community of patients and providers with similar health issues and health interests as themselves.
In addition, with the anticipated growth in our user base, we also plan to implement blockchain technology in the next phase for decentralized storage of user data, thereby allowing users greater control over their personal information.
To strengthen our market position, we intend to continue expanding on our key strengths in providing telemedicine services and creating a wellness marketplace. We also intend to develop a next-generation healthcare operating system that will aim to link service providers with patients through various tools, features and services including AI-forward Triage & Companion, physicians’ support network, continuous medical education (CME) programs, clinic management systems, and blockchain patient electronic health records (EHRs).
We believe that these tools, features and services, together with an AI-enabled tele-monitoring and allocation system, will enable us to develop a healthcare operating system that can intuitively connect patients with their healthcare services or providers instantly, through faster and smarter allocations. We aim to develop a system that will achieve a more seamless and instant connection from patients to providers by enhancing our existing smart virtual clinics with better predictive and preventative healthcare that will be supported by, amongst others, AI face scans and AI-enabled follow-up care. We believe that such a healthcare operating system will reduce the administrative resources required and also increase patient compliance with their medical treatment plans.
Expand our service and product offerings to cover the healthcare value chain
In addition to increased user engagement, we intend to further improve user stickiness through expanding service offerings to serve differentiated user needs on our platform and improving the quality of the products and services offered on our MaNaDr platform.
We plan to offer a broader range of healthcare services and products along the healthcare value chain, help our corporate clients organize targeted campaigns promoting both products and services, as well as organize workshops and seminars that target medical professionals so as to increase the brand awareness and stickiness of MaNaDr within the medical community. We will also continue our curation for quality healthcare products and services across the globe for our users so as to further improve our product offerings available on MaNaShop/MaNaStore.
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Building on the personalized care program that we have established for users who are keen to embark on a weight management journey, we intend to roll out a similar program to manage other chronic diseases such as diabetes as well as mental health conditions.
In addition to improving user stickiness, we believe that by offering a broader range of service and product offerings across the healthcare value chain will enable us to deepen the connection with healthcare industry stakeholders and integrate them into our ecosystem. The development of long-term strong business relationships with these industry stakeholders, including healthcare and other service providers, will correspondingly enable us to attract new users who will utilize our MaNaDr platform to gain access to these stakeholders on a global level.
Seek merger and acquisition opportunities and partnerships to add scale and diversify our business through new capabilities and services
We intend to continue to grow our user base, expand our service offerings and optimize our ecosystem through selected partnerships, investments, and acquisitions covering our comprehensive medical and wellness service offerings. We also intend to enhance our technological leadership by building additional features to our platform to improve patient data security and integrity, including adding connectivity with other payors such as insurers and corporate payors, establishing integration with major accounting and human resource management software, building clinical information systems, establishing inter-operability with health monitoring devices, as well as introducing AI-enabled medical companion and medical decision support systems that are built on blockchain databases. Further, we plan to recruit experienced IT professionals and acquire domestic and overseas companies with advanced technology and service solutions. We are also looking into establishing partnerships with other pharmacies to diversify our offerings.
Additionally, we plan to expand our existing reach in certain countries in the APAC region (such as Malaysia, the Philippines, Vietnam and Australia) and also expand our reach to other countries in the APAC region (including Cambodia, New Zealand, Thailand and Indonesia), through strategic partnerships, investments, mergers and acquisitions. We believe that we can replicate our business model in these countries to address their healthcare services industry issues and unmet healthcare demands effectively and efficiently. We plan to collaborate with local partners to tailor our business model to complement the demographics and healthcare demands of these countries, and in particular, to increase the reach of our unique healthcare ecosystem including our weight management program and the management of major chronic diseases to countries beyond Singapore. As at the date of this prospectus, we have not entered into any agreements in relation to the acquisition of any new business.
Our Main Business Activities
The diagram below illustrates how our MaNaDr platform is a 360-degree healthcare ecosystem which connects users and service providers through the range of healthcare services and product offerings that can be accessed through the mobile application and website:
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Our MaNaDr platform is a one-stop healthcare ecosystem that delivers an integrated and comprehensive suite of products and services as we recognize the needs of our users, both when they are in need of medical care and when they want to stay healthy. Building upon an integrated technology platform, professional in-house medical team, network of quality clinic service providers, diversified and evolving range of product and service offerings, sophisticated consumer engagement strategies and well-established distribution channels, the healthcare solutions offered on our MaNaDr platform primarily encompass the following:
● MaNaDr Mobile Application: Our MaNaDr mobile application is an avenue for us to provide timely, personalized and curated care to our users. It primarily involves the provision of teleconsultation services via online video consultation, which allows users to chat in real-time with, and send photos or videos to, doctors online, as well as hospital and/or clinic referral and appointment and inpatient arrangement by our in-house medical team and doctors from our network of clinic service providers. It thereby offers users a greater measure of convenience and satisfaction. We have also been awarded government contracts for the provision of telehealth solutions to foreign migrant workers and users under the COVID-19 home recovery program. The following screenshot shows the mobile application interface of our MaNaDr mobile application:
Our MaNaDr mobile application contains the following salient features:
▪ | Consult a Doctor Online: Doctors from our in-house team and from our network of clinical service providers provide teleconsultation services to our users. |
▪ | Consult a Doctor Without Medicine: This is similar to the feature above, but is used in instances where the user is unwell but only requires a medical certificate and does not require medication. This forward triage sets us apart from our competitors. |
▪ | Consult Weight Management: We have introduced a weight management program in view of the rising obesity rates in Singapore and the world, for users to embark on their weight management journey supported by an ecosystem of healthcare and weight management solutions, well-trained weight management providers and a community of users. Under this program, the user will be placed under a doctor who will be his adviser in his weight loss journey. The weight management tools adopted include the use of appetite-control medication and requiring the user to upload a picture of their meals every day for the doctor’s review and supervision. Notifications and personal reminders will be sent to keep users engaged and motivated throughout their healthcare journey. Apart from weight management, there are also comprehensive and tailored care solutions for users with pre-diabetes and chronic diseases to ensure that they receive the treatment and support required. According to Frost & Sullivan, we are the pioneer health and med tech player in the APAC region spearheading the building of a comprehensive weight management ecosystem that aims to target over 60% of users on our MaNaDr platform who access the “Consult Weight Management” function on our MaNaDr platform who are overweight, supported by a community comprising health care providers, patients support groups and pharmaceutical companies. | |
▪ | Pediatric Consult: This allows users to access a network of qualified and experienced doctors who are able to provide medical guidelines and answer users’ specific questions about their child’s health concerns. | |
▪ | Request Referral Memo: This allows users to consult a GP who will issue a letter to refer users to specialists if their health condition requires specialist medical attention. |
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▪ | Tele-ART: This involves the provision of real-time remote supervised self-swab ART. |
▪ | MaNaCare: This directs users to our MaNaCare website, a one-stop employee flexi-benefits platform offering affordable and accessible healthcare and wellness solutions for employees of our corporate customers. |
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AI Facescan: This is a unique feature of our mobile application which demonstrates our commitment to technological innovation and automation to enhance the user experience. With a basic face scan that users can conduct via their mobile phones, this feature allows users to know what their estimated vitals (e.g. heart rate, breathing rate, systolic blood pressure, diastolic blood pressure, cardiac workload and vascular capacity etc.) are, which are useful for users to monitor one’s own general health and wellness. |
▪ | MaNaForum: Clicking on the icon in the mobile application will direct users to our MaNaForum, the online forum platform, which can be accessed globally and allows members of the public to post their questions anonymously on various health topics and issues, which will be answered by our panel of doctors and physicians without any fees charged, thereby bridging the inequitable access to healthcare globally. In addition, it also allows for communities of users with similar health concerns or interests to interact and share their experience and ideas in real time. |
▪ | MaNaChat: Our MaNaDr mobile application is also supported by a dedicated user care support center comprising a team of multilingual care coordinators to aid in the resolution of any issues that our users may have and allows users to enquire about the services that we offer on a real time basis. |
▪ | Home Service: This allows users to arrange for a medical professional to visit their residence to provide medical services. |
▪ | Clinic Visit: This allows users to schedule an appointment with a hospital or clinic on our network of service providers via the mobile application. |
According to Frost & Sullivan, our MaNaDr mobile application has received a 4.8 and 4.9 star rating on the Apple App Store and Google Play Store in Singapore respectively as of June 14, 2023, and on a combined basis, MaNaDr was the most reviewed and highest rated mobile application in Singapore as of June 14, 2023 and has the largest number of teleconsultations per day in the six months ending May 2023.
● | MaNaDr Clinic – Primary healthcare services via our brick-and-mortar clinic: We have one GP clinic in Singapore which offers a comprehensive range of primary healthcare services, including general medical consultations, treatment and management of acute and chronic conditions in both adults and children, vaccinations, and health screenings for work permit applications, as well as pre-employment health screening, children’s health services, geriatric care and minor surgical procedures. We also derive revenue from collecting transaction fees for appointments, issuing electronic medical certificates, laboratory review fees and memorandum fees. The clinic also serves as our Innovative Hub where we pioneer various models of care such as gender-affirming service and aesthetic care. |
● | MaNaPharma – B2B sales to clinics and other healthcare service providers: We procure pharmaceutical products and medical devices, as well as engage in the wholesale distribution of pharmaceutical products to clinics in Singapore. |
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● | MaNaShop/MaNaStore – B2C sales of products and services to users: We offer a diversified and evolving range of products to users on the MaNaShop/MaNaStore online e-commerce platform (via both the website and mobile application), including healthcare products (such as medicines, health supplements, skincare, nutrition products and medical devices) and wellness products (such as personal care products and health screening packages). The products offered for sale are curated by our team of medical experts (including doctors) to ensure that the products meet the relevant quality and safety standards. |
● | MaNaCare – Corporate healthcare and wellness services, which is focused on corporate customers: We provide comprehensive corporate healthcare and wellness services, ranging from GP, specialist and allied healthcare panel services to tele-consultation, in-person clinics, on-site health screening, online marketplace and wellness programs. In particular, as part of our services, there are consultants who work with our corporate customers to design a tailored health program to keep their employees healthy and engaged. We also collaborate with insurers in providing value-added services to policyholders that enable the synergistic integration of insurance and healthcare. |
Collectively, we believe that our holistic ecosystem enhances the utilization efficiency of medical and healthcare resources, while providing a positive user experience.
MaNaDr Mobile Application
We offer teleconsultation services over our MaNaDr mobile application, through online consultations provided by our in-house medical team and external doctors from our network of clinic service providers. In the year ended June 30, 2022, over one million teleconsultations had been conducted on our MaNaDr mobile application.
We commenced online consultation services to address users’ needs for cost-effective and convenient evaluation of their health and other medical conditions. The teleconsultation services comprise medical consultations and wellness consultations. Medical consultations encompass consultations for a wide range of conditions and cases, with a primary focus on common and chronic illnesses, such as hypertension, diabetes, allergies and gastroenteritis. For conditions and cases that require further examination, we generally refer the user to hospitals or specialized clinics.
We also have an Al-driven platform that routes the patients to the relevant pool of healthcare providers and have one of the fastest response times in Singapore and globally, according to Frost & Sullivan.
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The screenshots below show the user interfaces on our MaNaDr mobile application during a typical online consultation session:
Each teleconsultation session can last up to 30 to 45 minutes, depending on the medical issues faced by the patients. Based on the customer’s response to enquiries on their condition, the doctor provides medical recommendations, issue prescriptions, medical certificates/memos or advises the customer to schedule examinations or appointments at hospitals or clinics and upload the results to the MaNaDr system for follow-up consultations. To enhance the efficiency and accuracy of delivery of care and increase the service capacity of the doctors, we have developed tools and algorithms that simplify the consultation process. We have also adopted a user review system for users to provide ratings and feedback on his or her teleconsultation experience in order to incentivize the doctors from our in-house team and from our network of clinic service providers to improve their quality of care. Our mobile platform also allows users to access past consultation history and communicate with doctors for follow-up consultations or new consultations.
In general, teleconsultations on our MaNaDr mobile application are provided at fees ranging from US$6 to US$15 per session, depending on the type of services, and length of consultation, and the day on which the consultation is requested. Some of our online consultation services are currently covered by government medical aid schemes, or commercially by employers.
In-house Medical Team
We have more than 1,000 members, most of whom are telemedicine locums in our medical team that provide 24/7 teleconsultation support to our users as at September 2023. They are supported by our 24/7 customer support officers who help to coordinate care and deliveries of medicine to our users.
We adopt stringent onboarding procedures for the doctors and medical assistants, which involve multiple rounds of interviews and in-role trial evaluations. The locum doctors and medical assistants are recruited through internal referrals and external recruiting. We generally select doctor candidates with strong professional and teamwork capabilities as well as experience as attending doctors in private clinics. We require our doctors to maintain relevant professional certifications. For medical assistants, we generally select candidates who possess medical-related degrees or above, adequate computer skills, strong communication skills, as well as prior working experience in private clinics.
We provide ongoing training and professional development programs for our doctors and medical assistants. These programs encompass general and specialized medical knowledge, case studies, corporate culture, and IT skills, which are designed to enhance their professional knowledge and management skills and improve their performance. For each medical specialty, we designate a leading medical expert to take charge of the professional development of our medical team. We also encourage our doctors to attend external symposiums for professional development purposes and conduct bi-monthly town hall meetings with all our doctors and healthcare providers on any recent mobile application updates, regulatory compliance as well as sharing of experience and tips in the remote delivery of healthcare.
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We conduct daily evaluations of our in-house doctors and medical assistants in respect of their quality of service, user feedback, and efficiency. We also practice quality control with standardized internal protocols for our teleconsulting services performed by our in-house medical team. Reminders, alerts, or even warnings are being sent out on a daily basis for any lapses in services or complaints received from users.
External Network of Service Providers
Our MaNaDr platform features a function which allows external doctors to register with us so as to access our user base. As of December 31, 2022, over 1,000 doctors had registered with us through this function. Users can leave messages for these external doctors in our network who may respond at their option when they are free. External doctors registered with us are required to agree to our terms of use, pursuant to which they need to comply with both our specified work scope and quality requirements and applicable rules and regulations. In particular, external doctors are required to provide evidence of their professional qualifications for verification. We also reserve the right to modify the relevant terms regarding external doctors’ scope of service, pricing, and how services are performed in light of market trends and commercial considerations. Additionally, under our terms of use, these external doctors are obligated to indemnify us for any losses resulting from violations of their obligations under the contracts with us.
MaNaDr Clinic
As of December 31, 2022, we had one GP clinic in Singapore, which offers a comprehensive range of primary healthcare services, including general medical consultations, treatment and management of acute and chronic conditions in both adults and children, vaccinations, and health screenings for work permit applications as well as pre-employment health screening, children’s health services, geriatric care and minor surgical procedures. Its main function is to serve as our Innovative Hub where we pioneer various models of care such as gender-affirming service and aesthetic care.
MaNaPharma
We procure pharmaceutical products (including medicines and health supplements) as well as medical devices. We have a retail pharmaceutical license issued by the Health Sciences Authority of Singapore, which allows us to undertake the wholesale distribution of pharmaceutical products to clinics in Singapore. We source such pharmaceutical products and medical devices from reputable partners in Singapore and other regions in the world such as China. Our partners are selected based on our stringent standards for quality, integrity and compliance with applicable laws, regulations and practices.
We add value to the clinics and other healthcare service providers which are our users by evaluating the pricing, specifications and the latest requirements in the healthcare and medical industry to assist them in procuring pharmaceutical products and medical devices in an efficient, timely and cost-effective manner (by conducting bulk purchases on behalf of the clinics).
MaNaShop/MaNaStore
We offer a wide spectrum of healthcare and wellness-related products to fulfill the needs of our users through our online e-commerce platform, MaNaShop/MaNaStore, which can be accessed via our website and mobile application.
MaNaShop/MaNaStore offers curated (i) healthcare products such as medicines, health supplements, skincare, nutrition products and medical devices, (ii) wellness products such as personal care products and health screening packages and (iii) online services such as medical screenings and procedures such as vaccinations, serology tests and swab tests to our users. We continuously seek to add more products and services that we believe will appeal to our users and which also meet the stringent standards of quality, while focusing on establishing a balanced offering of differentiated pharmaceutical and health-related products that are able to generate high volumes of traffic.
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The catalogue of products and services available on MaNaShop/MaNaStore is regularly updated in light of market trends as well as changes in consumer needs and preferences, based on the demand from the market and inputs from healthcare practitioners. Product and service offerings are carefully chosen across different categories and identify direct sales suppliers and third-party online marketplace vendors for fulfillment to supply these products and services.
The screenshot below shows the user interface of MaNaShop/MaNaStore on our mobile application and the website, respectively:
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There are easy site navigation, basic and advanced search functions, comprehensive product information and user reviews and ratings on MaNaShop/MaNaStore. Such functionalities address our users’ desire to view, understand and compare products before purchasing. Revenue is also generated under this segment through omni-channel advertisements placed and published on the website and the mobile application. Users are generally allowed to modify or cancel an order at any time through the online system or customer service center before the invoice is processed for the packing of the order. We accept return or exchange requests where the wrong goods are delivered, where the dosage delivered is incorrect or where the products are defective or damaged. However, once the goods are opened and/or used by the users, they cannot be returned or exchanged.
We operate MaNaShop/MaNaStore under two business models, namely, the direct sales model (whereby we procure the products from suppliers and services from service providers, which are then sold directly to users through MaNaShop/MaNaStore) and the online marketplace model (whereby we facilitate transactions between third party vendors and our users). As of December 31, 2022, there were a total of 13 direct sales suppliers and 4 marketplace vendors who supply products and/or services on MaNaShop/MaNaStore.
We require our direct sales suppliers and marketplace vendors to supply authentic products in a timely manner and provide quality delivery and customer services to our users. Direct sales suppliers and marketplace vendors are selected based on qualification, brand, past experience with e-commerce, reliability and volume. Background checks are also performed on the suppliers and vendors before we enter into any agreement, including on the products, the relevant licenses and certifications, compliance with applicable Singapore laws and regulations and brand recognition. We may also make inquiries about the market acceptance of their products among players in the same industry.
We have also put in place stringent rules to ensure that the sales of healthcare and wellness products within MaNaShop/MaNaStore complies with applicable Singapore laws and regulations. Direct sales suppliers and marketplace vendors may be subject to penalties or termination of their operations on MaNaShop/MaNaStore if they sell counterfeit products, delay shipment or mishandle user complaints. We have established a team dedicated to the management of direct sales suppliers and marketplace vendors on MaNaShop/MaNaStore with respect to, among others, product quality, logistics and after-sales customer services. We perform checks on the products before they are listed on MaNaShop/MaNaStore, and examine samples of those products with records of complaints or low ratings. Data relating to logistics and customer services on MaNaShop/MaNaStore is monitored on a daily basis, and regular communication with the sales suppliers and marketplace vendors is maintained in order to quickly address any issues when they arise. Regular reviews are also conducted on the performance of marketplace vendors, and we have the right to terminate their operations if they remain for an extended period or have unsatisfactory user reviews.
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We offer competitive pricing to attract and retain users. We seek to optimize our cost structure and create incentives for direct sales suppliers to provide us with competitive prices. Under the direct sales model, prices are set by us with reference to those on other major online retailers in Singapore and general market trends and industry dynamics. The direct sales suppliers can suggest pricing changes, but such pricing changes are subject to our consent. Under the online marketplace model, marketplace vendors have the discretion to set their own product prices, which they generally undertake to offer the best prices offered to any user. We may also offer special promotions of selected products on special occasions.
MaNaCare
MaNaCare is a one-stop employee flexi-benefits platform offered by us that aims to bring affordable, accessible and automated solutions to organisations. Under MaNaCare, we offer a comprehensive range of corporate healthcare and wellness services, including GP, specialist and allied healthcare panel services, tele-consultation, in-person clinics, on-site health screening, online marketplace and forum, as well as tailor-made wellness programs to our corporate customers.
Under our MaNaCare program, the employees of corporate customers are able to connect with our doctors 24/7 via the online platform. We also have consultants who will work with our corporate customers to design a tailored health program for their company, so as to keep their employees healthy and engaged.
We also collaborate with insurance companies to provide policyholders with value-added healthcare services complementary to the insurance products to reduce costs.
Technology
The sustainability of our MaNaDr platform depends on the competence and the stability of our technology infrastructure. We operate and maintain various platforms that connect the respective systems of our service providers, suppliers and marketplace vendors on MaNaShop/MaNaStore, as well as the network of health check-up centers, hospitals, clinics and other medical institutions, which enable our users to access the full range of our services and product offerings and our service providers to conduct their operations efficiently and effectively over our platform. Resulting from the scale and complexity of our businesses, our large-scale, multi-scenario environment has enabled us to obtain valuable data assets and constantly apply our technology across our business lines, therefore generating knowledge and innovations that drive further technological development. We have also developed OtterSG, an advanced clinic management system to centralize user data and streamline medical workflows for healthcare providers, and has the aim of enhancing user care and management, and ultimately, improving overall user outcomes.
As of December 31, 2022, our research and development team comprised 27 engineering and data analysis professionals, with an average of 8 years of research and development experience in mobile, web, data and AI sectors. They are primarily engaged in building our technology platform and developing our proprietary technologies.
As of June 30, 2022, our product development and technology expenditures were approximately US$6.0 million. Our product development and technology expenditures consist of employee benefit expenses of our product development and technology staff, IT-related equipment operation expenses, network service charges and cost of additions of IT-related equipment. We expect spending on product development and technology to increase over time as we add more experienced product development and technology staff, and continue to invest in our technology platform to enhance user experience and provide value-added services to our ecosystem participants.
Data Protection
Our network configuration is secured at multiple layers to protect our databases from unauthorized access. We use sophisticated security protocols for communications among our mobile app, website, and plug-ins. To prevent unauthorized access to our system, we utilize a system of firewalls and maintain a demilitarized zone to separate our external-facing services from our internal systems. For instance, we employ tools such as SSL certification, Microsoft Azure and AWS cloud services with end-to-end encryption.
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We conduct frequent reviews of our back-up systems to ensure that they are well-maintained and functional. We have also implemented procedures such as regular system checks, password policy, user authorization reviews and approval and data back-up, as well as data recovery tests, to safeguard our information assets and ensure the proper management of our operational data. We have data disaster recovery procedures in place and are in the process of establishing our active/active data centers.
Our data protection systems and procedures have led us to become recognized for our data protection practices by the Singapore authorities. We were the only MedTech company, and one of the six pilot organizations to be awarded the Data Protection Trustmark (DPTM) by the Infocomm Media Development Authority of Singapore (IMDA), which certifies that we have put in place responsible data protection practices and that consumers are consequently less likely to experience a data breach. Additionally, we were one of the 11 organizations invited to join the regulatory sandbox for telemedicine and mobile medicine services under Singapore’s Ministry of Health to prepare for licensing under the Healthcare Services Act (HCSA) in 2020. We have also received a Certificate of Conformance in April 2023 following an independent assessment conducted where we were found to conform to the requirements of the Cyber Security Agency of Singapore (CSA) Cyber Security Certification Cyber Essentials mark for the production and development environment for content management system (CMS) vendor providing software as a service (SaaS) solutions.
Healthcare Quality and Safety
We value the quality and safety of the medical services we provide. We have established comprehensive risk management systems and internal control procedures to minimize medical risks arising from our operations. During the six months ended December 31, 2022 and the years ended June 30, 2022 and 2021, we had not received any written notice or penalty for material non-compliance or violation of healthcare quality and safety laws or regulations, nor had we received any recommendation for improvement with respect to healthcare quality and safety from any government authority.
The skills, competence and attitude of our medical team are essential for the quality of care that our users receive. We continuously monitor the risk in relation to services provided by our medical team to ensure the risk management policies and procedures have been strictly followed so as to achieve effective and efficient governance, risk, and control processes.
We have adopted stringent onboarding procedures for doctors and medical assistants, which involve multiple rounds of written tests, interviews, and in-role trial evaluations. Our in-house medical team receives regular training on relevant safety policies, standards, protocols, and procedures and is required to strictly comply with them in all aspects of our operations. We conduct monthly evaluations of our in-house doctors and medical assistants in respect of quality of service, user feedback and efficiency.
In particular, we have adopted a quality control system with standardized consultation protocols for our teleconsulting services performed by our in-house medical team. Such systems have three-tier quality controls:
● Tier One: All doctors on-duty conduct reviews of and grade consultation cases through the doctor’s dashboard.
● Tier Two: Our medical directors will conduct reviews of consultation cases of low grades or those with issues and provide comments on and select a number of samples for review.
● Tier Three: Our Quality Control Training Department and the expert committee make determinations on the consultation cases with issues and select a number of samples for review.
Should any issues arise from any tier as stated above, our quality control personnel will report to the Quality Control Training Department within 24 hours for it to render intervention or grading for relevant cases. We have set up an expert committee to oversee the three-tiered quality control system and supervise the quality control process. As of December 31, 2022, the expert committee comprised six licensed doctors who are highly regarded authorities in their respective fields. During the six months ended December 31, 2022 and the years ended June 30, 2022 and 2021, we did not receive any medical malpractice claim against our medical team or ourselves.
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For external doctors, we generally require them to strictly adhere to the work scope and quality requirements specified in the agreements in compliance with applicable legal and regulatory requirements. Additionally, under our terms of use, these external doctors are obligated to indemnify us for any losses resulting from violations of their obligations under the contracts with us. After an external doctor has registered with us, we perform detailed checks on credentials and background before he or she is granted access to our user base, and the profile information of external doctors displayed on our mobile platform needs to be tailored accordingly and subject to internal review. We regularly analyze cases where a user requests a refund, and sample the consultation records of the external doctors to identify the reasons for such requests. We also monitor the volume of consultations conducted by external doctors and their response rates. Based on the foregoing factors, among other things, we have established an evaluation system that imposes penalties, such as reductions in fee and termination of services, on external doctors providing unsatisfactory service.
For healthcare service providers in our network, we consider a variety of factors such as reputation, scale of business, service quality and capability, as well as their facilities before commencing cooperation with them. We require such healthcare service providers to maintain appropriate licenses, comply with relevant laws and regulations, and follow our standardized service offering and pricing guidelines. We also carefully monitor feedback from our users on the services provided by these healthcare service providers, and take that into consideration when determining our continued cooperation with such healthcare service providers. The healthcare service providers are responsible for any losses to users resulting from disputes or breach of obligations in relation to the provision of the relevant services.
Competition
We have achieved a strong competitive position in the Singapore telehealth solutions industry. According to Frost & Sullivan, MaNaDr is a leading telehealth solutions provider in Singapore in terms of the number of countries covered by our platform. Furthermore, the reach of our MaNaDr platform extends to countries in the APAC region, and we are the only telehealth solutions company based in Singapore that provides integrated smart health-tech services in the APAC region. However, we face competition in certain of our business segments, including in terms of our provision of telehealth solutions and our MaNaShop/ MaNaStore e-commerce business.
We anticipate that the telehealth solutions market will continue to grow in response to rapid technological changes and innovation, evolving industry standards and shifting user preferences.
We believe that the primary competitive factors in our industry are user experience, brand recognition and reputation, service and product quality and selection, medical resources, technological capabilities and pricing. Additionally, new and enhanced technologies may increase the competition in the telehealth solutions industry. We believe that we are well positioned to effectively compete on the basis of the foregoing factors. However, some of our current or future competitors may have greater brand recognition, better supplier relationships, larger user bases or greater financial, technical or marketing resources than we do.
Sales and Marketing
We employ a variety of methods to attract potential users. Generally, we expand our user base through natural traffic, external marketing, and promotional programs:
● Natural traffic is achieved by word-of-mouth resulting from free and quality services and products offered on our platform, such as reward plans, and wellness content;
● We also organize frequent roadshows, events, seminars, webinars and health screenings for the promotion of our platform and services to healthcare professionals and users alike. These include talks that invite various healthcare professionals, including doctors, dieticians, counsellors, physiotherapists as keynote speakers. In 2023, we also organized a “MaNaDr Health Day” in conjunction with World Obesity Day, for participants to learn more about obesity from the perspective of various professional healthcare providers.
● Promotional activities include our reward programs which encourage users to share with their friends and family members, and facilitate the conversion of our active users to paying users.
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Our principal marketing programs include advertising our company and our solutions through our mobile platform and other media. We also participate in industry events, trade shows and conferences. Additionally, we have created integrated marketing campaigns, such as innovative reward plans programs to attract new users. As of December 31, 2022, our business team comprised five key business professionals supported by sales representatives.
Health, Safety and Environment
We do not operate any production facilities. Additionally, for direct sales on MaNaShop/MaNaStore, we engage third parties to ship and deliver products to our users. Therefore, we are not subject to significant health, safety or environmental risks. During the six months ended December 31, 2022 and the years ended June 30, 2022 and 2021, we had not been subject to any fines or other penalties due to non-compliance with health, safety or environmental regulations.
Intellectual Property
We seek to protect our intellectual property rights through a combination of trademark, copyright and trade secret protection laws in Singapore and other jurisdictions, as well as through confidentiality agreements and procedures with our employees, partners and others.
As of December 31, 2022, we had registered our domain name, manadr.com. As of December 31, 2022, we had 22 trademarks and 2 patents registered in Singapore.
Employees
As of December 31, 2022, we had 58 employees globally, with 29 employees who are based in Singapore and 29 employees who are based in Vietnam. The following table sets forth a breakdown of employees categorized by function as of December 31, 2022:
Number of Employees | Percentage | |||||||
Product Development and Technology | 27 | 46.56 | % | |||||
Operations | 2 | 3.45 | % | |||||
Medical Team | 6 | 10.34 | % | |||||
Sales and Marketing | 2 | 3.45 | % | |||||
Management, Administration, Finance, Human Resource and Pharmacist | 21 | 36.2 | % | |||||
Total | 58 | 100 | % |
As at December 31, 2022, we also had 19 part-time staff mainly for our operations division.
We have developed various methods to ensure that our employees are adequately and correctly trained for the functions they perform and are aware of the legislation affecting our business. Our success depends on our ability to attract, retain, and motivate qualified employees. We endeavor to offer our employees competitive compensation packages and a positive, dynamic, and creative work environment. We believe that we maintain a good working relationship with our employees, and we have not experienced any material employment disputes or work stoppages.
Save for the fact that the Vietnam representative office of our subsidiary, Mobile Health Pte. Ltd. has entered into a collective bargaining agreement with its employees, no collective bargaining agreement has been put in place.
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We enter into standard employment contracts with our employees. We also enter into standard confidentiality agreements with all of our employees.
Insurance
We maintain public liability and fire insurance for our clinic and pharmacy, as well as work injury compensation for our staff.
During the six months ended December 31, 2022 and the years ended June 30, 2022 and 2021, we had not made any material insurance claims in relation to our business.
Facilities
Our headquarters are located in Singapore. In Singapore, we leased an aggregate of approximately 1,500 square feet of office space, a commercial unit used for storage and office purposes of approximately 430 square feet and a clinic of approximately 480 square feet as of December 31, 2022. In Vietnam, we leased 1,500 square feet of office space as of December 31, 2022.
Legal Proceedings
We are currently not a party to any material legal or administrative proceedings. We may from time to time be subject to various legal or administrative claims and proceedings arising from the ordinary course of business. Any litigation or other legal or administrative proceedings, regardless of the outcome, is likely to result in substantial costs and diversion of our resources, including our management’s time and attention.
Corporate Social Responsibility
We view corporate social responsibility as both a responsibility and a competitive advantage. We recognize that we have an obligation towards our employees, investors, users and the community as a whole. We believe our reputation, together with the trust and confidence of those with whom we deal with, is one of our most valuable assets. We seek to maintain our reputation and such trust and confidence, and we are committed to achieving long-term mutually sustainable relationships with our stakeholders.
During the COVID-19 pandemic in Singapore, we worked with the Singapore Ministry of Manpower and Ministry of Health to curb the rising infection rates in the community. We had deployed more than 100 customized tele-kiosks to migrant worker dormitories to facilitate the provision of medical teleconsultation and timely delivery of medication. We also gathered more than 200 medical doctors and specialists to work together in the provision of timely teleconsultation at the peak of the COVID-19 pandemic. This contributed to the reduction of the number of visits to hospitals, which freed up resources in hospitals’ Emergency Department for medical emergencies to be attended to. Through the customized mobile application, the foreign migrant workers were able to easily raise a teleconsultation with our team of medical practitioners with a few simple clicks. The teleconsultation was also tagged to their identification number such that delivery of medication to their dormitories could be arranged in a timely manner.
In addition, our panel of medical practitioners also supported the Singapore Ministry of Health’s Home Recovery Program for COVID-positive patients under home recovery and quarantine order by screening patients virtually to confirm that they are suitable for home recovery, providing teleconsultations, delivering medication and in-person swabbing services.
For our services rendered to Singapore during the COVID-19 pandemic, including our support towards the provision of medical services to migrant workers and our assistance in the Singapore Government’s Home Recovery Program for COVID-positive patients, we were awarded The President’s Certificate of Commendation (COVID-19) in 2023 as well as a Certificate of Appreciation by the Singapore Ministry of Manpower in 2022.
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Our Group is subject to the laws and regulations of Singapore, where some of our Group Companies carry on their business and operations. This section sets forth a summary of the most significant rules and regulations that affect our business activities in Singapore. They are not exhaustive and are only intended to provide some general information to prospective investors. They are neither designed nor intended to be a substitute for professional advice. We recommend that prospective investors should consult their own advisers regarding the implications of such laws and regulations on our Group.
Healthcare Services Act 2020 (“HCSA”)
The HCSA was enacted in 2020 to replace the Private Hospitals and Medical Clinics Act (the “PHMC Act”). The PHMC Act was progressively implemented in three phases, which was completed in end-2023 when the PHMC Act was repealed. As part of Phase 1 of the implementation of the amendments to the HCSA, healthcare service providers that held PHMC Act licenses were encouraged to port over their existing license to a HCSA license or obtain a new HCSA license. As part of Phase 2 of the implementation, healthcare service providers would have had to transit their license under the PHMC Act to the HCSA in order to continue offering their healthcare services. One of our Group companies, MaNaDr Clinic Pte. Ltd., operates a medical clinic in Singapore. Our medical clinic in Singapore under the name “MaNaDr Clinic” located at 371 Beach Road, #02-52 City Gate, Singapore holds a license issued by the Ministry of Health of Singapore (the “MOH”), which is subject to the HCSA, the subsidiary legislation thereunder and any directions or guidelines as may be given or issued from time to time by the Director-General of Health (the “DGH”).
Section 8 of the HCSA provides that a person must not provide a licensable healthcare service unless the person is authorized to do so by a license under the HCSA. Any person who contravenes this provision shall be guilty of an offense and shall be liable on conviction to a fine not exceeding S$100,000 or to imprisonment for a term not exceeding two years or to both but if the person has any previous qualifying conviction, to a fine not exceeding S$200,000 or to imprisonment for a term not exceeding two years or to both. Section 9 of the HCSA further provides inter alia that a licensee must not provide a licensable healthcare service at any permanent premises in Singapore that is not an approved permanent premises for the provision of the licensable healthcare service or using any conveyance that is not an approved conveyance for the provision of the licensable healthcare service or by any other service delivery mode that is not approved for the provision of the licensable healthcare service. A licensee that contravenes this shall be guilty of an offense and shall be liable on conviction in the case of a first offense, to a fine not exceeding S$50,000 or to imprisonment for a term not exceeding 12 months or to both and if the licensee has a previous qualifying conviction, to a fine not exceeding S$100,000 or to imprisonment for a term not exceeding 12 months or to both.
Pursuant to the amendments to the HCSA, the regulatory scope under the HCSA is broadened to include healthcare services, nursing and allied health services. In recognition of new and emerging healthcare services that are not based out of physical locations, such as telemedicine and mobile medical services, the regulatory basis has been shifted from a “premises-based” licensing regime to a “services-based” licensing regime in which healthcare providers will be licensed based on the types of services they provide, instead of the physical premises in which the services are provided.
Governance and oversight over the provision of healthcare services have also been strengthened following the implementation of the amendments to the HCSA. In this regard, the HCSA introduces: (a) enhanced roles for the principal officer (in respect of a licensed healthcare service) responsible for overseeing the day-to-day operations of the service and ensuring operational compliance with the HCSA; (b) the requirement for the appointment of a clinical governance officer for certain selected services responsible for clinical and technical oversight of more complex services that require specialized expertise; and (c) the requirement that the governing body of a licensed healthcare service possesses the competence and skills to carry out its role.
The amendments to the HCSA will also authorize the MOH to obtain and publish information on non-compliant licensees and unlicensed providers. Publicity restrictions will also be tightened to prohibit unlicensed persons from advertising healthcare service claims. Additionally, licensees will be required to contribute to the National Electronic Health Record (the “NEHR”). NEHR enables a patient’s health record to follow them regardless of where they seek treatment such that a patient’s records will not be lost should a provider cease operations.
Safeguards will be put in place to ensure that patients’ NEHR records are kept confidential. NEHR can be accessed only for purposes of patient care, and not for other purposes, including assessment for employment and insurance. Measures, including the provision of access logs to patients and regular audits on NEHR access, will be instituted to protect against illegitimate access. Penalties will be imposed for unauthorized access. All patients will by default have their specified health data contributed to NEHR. Patients who do not wish for their records to be accessed via NEHR may opt out. Patients who have opted out will continue to have their information uploaded to NEHR, but with access blocked (that is, no healthcare providers can access their NEHR record) to allow past information to be unlocked should the patient choose to opt back in at a later point in time.
The amendments to the HCSA also aim to update the penalties for offenses to be aligned with comparable offenses under other recently enacted legislations.
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Medical Registration Act 1997 of Singapore (the “Medical Registration Act”)
The practice of medicine by doctors in Singapore is subject to the Medical Registration Act, which provides for, inter alia, the establishment of the Singapore Medical Council (the “SMC”) and the registration of medical practitioners in Singapore. The functions of the SMC include, inter alia:
(a) keeping and maintaining registers of registered medical practitioners;
(b) approving or rejecting applications for registration under the Medical Registration Act or approving any such application subject to such restrictions as it may think fit;
(c) issuing practising certificates to registered medical practitioners;
(d) making recommendations to the appropriate authorities for the training and education of registered medical practitioners; and
(e) determining and regulating the conduct and ethics of registered medical practitioners.
Under Section 13 of the Medical Registration Act, no person shall practice medicine or do any act as a medical practitioner unless he is registered under the Medical Registration Act and has a valid practising certificate. Under Section 17 of the Medical Registration Act, any person who is not qualified and inter alia, (a) practises medicine; (b) willfully and falsely pretends to be a duly qualified medical practitioner; (c) practises medicine or any branch of medicine, under the style or title of physician, surgeon or doctor; or (d) advertises or holds himself out as a medical practitioner, shall be guilty of an offense and shall be liable on conviction to a fine not exceeding S$100,000 or to imprisonment for a term not exceeding 12 months or to both. In the case of a second or subsequent conviction, a fine not exceeding S$200,000 or imprisonment for a term not exceeding two years or to both.
Nurses and Midwives Act 1999 of Singapore (the “Nurses and Midwives Act”)
The practice of nursing by nurses is regulated by the Nurses and Midwives Act. Nurses require a valid practising certificate issued by the Singapore Nursing Board under Section 18 of the Nurses and Midwives Act.
According to Section 26 of the Nurses and Midwives Act, any person who is not qualified and inter alia, (a) takes or uses the name or title of nurse in any language, either alone or in combination with any other words or letters, or any name, title, addition, description, uniform or badge, implying that the person is a qualified nurse or that the person is qualified to carry out an act of nursing; (b) being a person whose name is included in any part of the Roll of Nurses (the “Roll”), takes or uses any name, title, addition or description or otherwise does any act which falsely implies that the person’s name is included in some other part of the Roll, as the case may be; (d) knowing that some other person is not a qualified nurse and with intent to deceive, makes any statement or does any act calculated to suggest that that other person is a nurse or qualified nurse, shall be guilty of an offense and shall be liable on conviction to a fine not exceeding S$10,000.
Under Section 30 of the Nurses and Midwives Act, any person who (a) procures or attempts to procure registration, enrolment, a certificate of registration, a certificate of enrolment or a practising certificate, by knowingly making or producing or causing to be made or produced any false or fraudulent declaration, certification, application or representation whether in writing or otherwise; (b) willfully makes or causes to be made any false entry in the Roll; (c) forges or alters a certificate of registration, a certificate of enrolment or a practising certificate; (d) fraudulently or dishonestly uses as genuine a certificate of registration, a certificate of enrolment or a practising certificate which the person knows or has reason to believe is forged or altered; or (e) buys, sells or fraudulently obtains a certificate of registration, a certificate of enrolment or a practising certificate, shall be guilty of an offense and shall be liable on conviction to a fine not exceeding S$10,000 and, in the case of a second or subsequent conviction, to a fine not exceeding S$20,000 or to imprisonment for a term not exceeding six months or to both.
Section 28 of the Nurses and Midwives Act provides that there must not be the employment or engagement of a person who is not a qualified nurse to carry out any act of nursing. An employer who contravenes this by hiring unqualified persons to carry out nursing acts shall be guilty of an offense and shall be liable on conviction to a fine not exceeding S$10,000 and, in the case of a second or subsequent conviction, to a fine not exceeding S$20,000 or to imprisonment for a term not exceeding six months or to both.
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Pharmacists Registration Act 2007 of Singapore (the “Pharmacists Registration Act”)
If a person did not obtain the required certifications and requirements by the Singapore Pharmacy Council in accordance with Section 22 of the Pharmacists Registration Act, to act validly as a pharmacist, he or she would be deemed as unauthorized to act as a pharmacist.
Under Section 28 of the Pharmacists Registration Act, an unauthorized person shall be guilty of an offense if the person (a) practices pharmacy; (b) willfully and falsely pretends to be a duly qualified pharmacist; (c) practises pharmacy or any branch of pharmacy, under the style or title of a pharmacist or under any name, title, addition or description implying that the person holds any diploma or degree in pharmacy or in any branch of pharmacy; (d) takes or uses the name or title of pharmacist, pharmaceutical chemist, druggist, apothecary, or any other word in any language having the same meaning or with similar intent; (e) takes or uses any name, title, sign, uniform, badge, or any other addition or description implying, whether in itself or in the circumstances in which it is used, that the person is qualified to practise as a pharmacist; or (f) advertises or holds himself or herself out as a pharmacist. In addition, Section 29 of the Pharmacists Registration Act provides that where an offense is committed under Section 28 of the Pharmacists Registration Act by any unauthorized person acting as an employee, an agent or a partner of another person, that other person shall also be guilty of an offense.
Our subsidiary, 1Healthservice Pte. Ltd., holds a pharmacy license issued by the Health Sciences Authority (the “HSA”).
Health Products Act 2007 of Singapore (the “Health Products Act”)
The Health Products Act and the regulations thereunder regulate, inter alia, the manufacture, import, supply, presentation and advertisement of health products, which include therapeutic products, medical devices and cosmetic products.
Under the Health Products Act, except in such cases as may be prescribed, a valid importer’s license is required to import therapeutic products and medical devices and a valid wholesaler’s license is required to engage in the wholesale supply of therapeutic products and medical devices. In addition, no person shall supply any therapeutic product or medical device to any other person unless such therapeutic product or medical device has been registered in accordance with the provisions of the Health Products Act. Any person who contravenes these provisions is guilty of an offense.
An application for an importer’s license or a wholesaler’s license for a therapeutic product must be made to the HSA in the prescribed form and manner. The Health Products (Therapeutic Products) Regulations 2016 stipulate certain requirements that must be satisfied before such license may be issued to an applicant. An applicant of an importer’s license or a wholesaler’s license must also be able to provide and maintain, or ensure the provision and maintenance of, such staff, premises, equipment and facilities for the handling and storage of the therapeutic product as are necessary to prevent the deterioration of the therapeutic product while it is in the applicant’s ownership, possession or control. In addition, an applicant for an importer’s license or a wholesaler’s license must be able to comply with the Pharmaceutical Inspection Convention and Pharmaceutical Inspection Co-operation Scheme Guide to Good Manufacturing Practice for Medicinal Products in relation to the manufacture of the therapeutic product.
No license is required for the manufacture, importation or wholesale supply of cosmetic products in Singapore. However, the Health Products (Cosmetic Products – ASEAN Cosmetic Directive) Regulations 2007 provides that prior notification to the HSA in the prescribed form is required before a cosmetic product may be supplied in Singapore, unless the cosmetic product is supplied solely as a sample in connection with any advertising, sponsorship or promotional activity, is supplied solely by the transfer of possession as a gift, is supplied solely for testing or trial use in connection with any research or development of that product or is manufactured by or in accordance with the specifications of a medical practitioner, and supplied solely by that medical practitioner for the use of patients under his care. Any person who contravenes this provision is guilty of an offense.
The Health Products Act imposes various duties on importers, suppliers and registrants of health products. In particular, the Health Products Act stipulates that where an importer, a supplier or a registrant of a health product becomes aware of any defect in the health product or any adverse effect that has arisen or can arise from the use of the health product, such person has a duty to inform the HSA of the defect or adverse effect within the prescribed time. Any person who fails to do so is guilty of an offense and shall be liable on conviction to a fine not exceeding S$20,000 or to imprisonment for a term not exceeding 12 months or to both.
Regulation 4 of the Health Products (Licensing of Retail Pharmacies) Regulations 2016 stipulates that a person must not supply any specified health product through telepharmacy services unless the person has a valid pharmacy license and has obtained the prior approval of the HSA to provide telepharmacy services at or from the retail pharmacy specified in the pharmacy license and complies with the conditions imposed by the HSA.
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Medicines Act 1975 of Singapore (the “Medicines Act”)
Our pharmacy in Singapore holds a pharmacy license issued by the HSA and is subject to the provisions of the Medicines Act and any directions or guidelines as may be given or issued from time to time by the HSA. The Medicines Act makes provisions with respect to medicinal products and medical advertisements and matters connected therewith. It applies generally to medicinal products, including Chinese proprietary medicines, but does not apply to therapeutic products, medical devices and cosmetic products, which are governed under the Health Products Act. The Medicines Act stipulates, inter alia, that no person shall sell any medicinal product by way of wholesale dealing except in accordance with a wholesale dealer’s license. Any person who contravenes these provisions is guilty of an offense.
Pursuant to the provisions of the Medicines Act, in determining whether to issue or refuse to issue a license, the HSA shall have regard to the safety of medicinal products to which the application relates, the efficacy of medicinal products for the purposes for which it is proposed to be administered, the quality of medicinal products and the provisions proposed for securing that the products as sold or supplied will be of that quality and whether the grant of a product license for the medicinal products will be in the public interest.
Pursuant to the Medicines Act, the person selling or supplying any medicinal product must adhere to regulations concerning labelling, marking and display of distinctive marks on containers and packages of medicinal products. Further, persons who publish any medical advertisement that refers to any skill or service relating to the treatment of any disease or condition, or directly or indirectly suggest that the article advertised will prevent, alleviate or cure any disease or condition, shall be guilty of an offense under the Medicines Act.
The Health Products (Licensing of Retail Pharmacies) Regulations 2016 (the “Licensing of Retail Pharmacies) Regulations”) provides that a person must not supply by retail sale and specified health product, unless, inter alia, it holds a pharmacy license and the supply of the specified health product is carried out at or from the retail pharmacy specified in the pharmacy license by an in-store pharmaceutical officer or in the absence of that office, by a special mode with the prior approval of the HSA.
The qualification requirements and application processes for registration of pharmacists and the regulation of the practice of pharmacy in Singapore are governed by the Pharmacists Registration Act.
Personal Data Protection Act 2012 (the “PDPA”)
The PDPA generally requires organizations to give notice and obtain consents prior to collection, use or disclosure of personal data (being data, whether true or not, about an individual who can be identified from that data or other accessible information), and to provide individuals with the right to access and correct their own personal data. Organizations have mandatory obligations to assess data breaches that they suffer, and to notify the Personal Data Protection Commission (the “PDPC”) and the relevant individuals where the data breach is of a certain severity. The PDPA also imposes various baseline obligations on organizations in connection with permitted uses of, accountability for, the protection of, the retention of, and overseas transfers of, personal data.
The PDPA creates various offenses in connection with the improper use of personal data, certain methods of collecting personal data and certain failures to comply with the requirements under the PDPA. These offenses may be applicable to organizations, their officers and/or their employees. Offenders are liable on conviction to fines and/or imprisonment. The PDPA empowers the PDPC with significant regulatory powers to ensure compliance with the PDPA, including powers to investigate, give directions and impose a financial penalty of (i) 10% of the annual turnover in Singapore of the organization, in the case of a contravention on or after the date of commencement of Section 24 of the Personal Data Protection (Amendment) Act 2020 by an organization whose annual turnover in Singapore exceeds S$10 million or (ii) S$1 million in any other case. In addition, the PDPA created a right of private action, pursuant to which the Singapore courts may grant damages, injunctions and relief by way of declaration, to persons who suffer loss or damages directly as a result of contraventions of certain requirements under the PDPA.
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Directors and Executive Officers
The following table provides information regarding our directors, executive officers and key personnel upon the SEC’s declaration of effectiveness of our registration statement on Form F-1, of which this prospectus forms a part.
Name |
Age |
Position/Title | ||
Directors and Executive Officers | ||||
Siaw Tung Yeng | 58 | Co-Chief Executive Officer/Director | ||
Teoh Pui Pui | 46 | Co-Chief Executive Officer/Chief Operating Officer/Chairwoman of the Board/Director | ||
Lai Kuan Loong Victor | 45 | Independent Director | ||
Lun Kwok Chan | 76 | Independent Director | ||
Gabe Rijpma | 48 | Independent Director | ||
Peng Chee Yong | 38 | Chief Financial Officer | ||
Key Personnel | ||||
Rex Chin Chien Howh | 35 | Financial Controller | ||
Law Pei Bei | 34 | Chief Business Officer | ||
Nathan Siaw Seng Taat | 29 | Chief Medical Officer | ||
Felicia Chan Siew Siew | 39 | Chief Technology Officer |
Siaw Tung Yeng, our co-founder and director, has served as the Co-Chief Executive Officer since our inception in 2016. Dr. Siaw has more than 30 years of professional experience in healthcare and medical informatics, and has been a senior consultant in family medicine since 2004. Dr. Siaw has also been complementing his work as a physician with IT knowledge for over 20 years. Prior to founding the Company, Dr. Siaw served as chief information officer, chairman of medical audit subcommittee and regional medical director of Healthway Medical Group from 2000 to 2004. Healthway Medical Group has one of the largest networks of clinics and medical centers in Singapore, operating more than 100 clinics and medical centers. From 2004 to 2020, Dr. Siaw served as a director overseeing the operation of United Vision Holdings Pte Ltd, which owns several family medicine clinics across Singapore. During the same period, Dr. Siaw also served as a senior consultant family physician of Healthmark Family Medicine Clinic managed by United Vision Holdings Pte Ltd, where he was in charge of delivering comprehensive, continuing and holistic care of all patients in the context of family practice. From 2006 to 2021, Dr. Siaw had been a medical director at Gloco Pte Limited Singapore, which provides health IT services since 2006. Since 2013, Dr. Siaw has been an examiner for Graduate Diploma in Family Medicine. He was also a clinical lecturer (Family Medicine) for Yong Loo Lin School of Medicine, National University of Singapore from 2013 to 2020. Dr. Siaw graduated from the National University of Singapore with a Bachelor of Medicine, Bachelor of Surgery degree in 1991 and a Master of Medicine degree in 1995. He was also awarded fellowship at the College of Family Physician in 2000.
Currently, Dr. Siaw also serves as a member of Singapore Medical Council’s Complaints Panel, a member of Singapore Medical Council’s Disciplinary Committee, a senior consultant family physician of HealthLight Family Medicine Clinic, an examiner in Graduate Diploma in Family Medicine examination, and an advisor of Singapore Family Medicine Continuing Medical Education.
Teoh Pui Pui, our co-founder, director and Chairwoman of the Board, has been our Co-Chief Executive Officer and Chief Operating Officer since 2019 and is primarily responsible for developing and implementing business strategies, managing relationships with key stakeholders and overseeing the day-to-day operations of the organization. Dr. Teoh is also our medical doctor in charge of medical diagnosis and treatment. Dr. Teoh also serves as the director of EC Family Clinic and the director of Punggol Ripples Family Clinic in Singapore. In these roles, Dr. Teoh is primarily responsible for the management of the clinics, overseeing the clinics’ strategic objectives, policies and overall directions. From 2004 to 2007, Dr. Teoh served as an instructor in Advance Trauma Life Support. From 2003 to 2007, Dr. Teoh served as the surgical resident (general surgery and hand surgery) of National Healthcare Group, which is a leader in public healthcare in Singapore and recognized for the quality of its medical expertise and facilities. Dr. Teoh was a member of the American Academy of Family Physicians from 2013 to 2017 and an academy member of International Master Course on Aging Science Asia from 2016 to 2017. She currently serves as an associate of American Aesthetic Association, a member of American Society for Laser Medicine and Surgery, Inc, and a member of American Academy of Aesthetic Medicine. Dr. Teoh graduated with a Bachelor of Medicine, Bachelor of Surgery degree from National University of Singapore in 2002, a Post Graduate Diploma in Practical Dermatology from Cardiff University, UK in 2010, a Post Graduate Diploma in Family Medicine from National University of Singapore in 2011, and a Post Graduate Diploma in Aesthetic Medicine from American Academy of Aesthetic Medicine in 2016. She also holds various certificates, including the Certificate of Accreditation Family Physician awarded by the Ministry of Health of Singapore, the Certificate of Registration Family Physician awarded by the Singapore Medical Council, as well as Certificate in Aesthetic Medicine and Certificate in Mesotherapy awarded by the American Academy of Aesthetic Medicine.
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Lai Kuan Loong Victor will begin serving as our independent director immediately upon the SEC’s declaration of effectiveness of our registration statement on Form F-1, of which this prospectus forms a part. Mr. Lai will serve as the chairman of the audit committee and as a member of the compensation and nominations committees. Mr. Lai has over 20 years of professional and management experience with a focus on corporate advisory in the capital markets sector. He is currently the principal consultant at CitadelCorp Pte Ltd since 2020, where he advises clients on corporate transactions and governance matters. Mr. Lai started his career at PricewaterhouseCoopers in 2002, and his last position there was Director in 2014. During his tenure, he covered both audit and advisory engagements. From 2015 to 2019, he was the Regional Managing Director at Boardroom Limited, where he advised clients on corporate governance, compliance with listing rules, and various listing and de-listing transactions. At present, he also serves as an independent director and chairman of the board at Astaka Holdings Limited, a SGX-listed property development and management company, since 2019, and as an independent director at Universal Terminal(s) Pte Ltd, a company providing fuel storage services, since 2020. Since 2021, he has been an external adviser at Bain & Company, where he is engaged by Bain’s clients to advise on commercial and regulatory due diligence matters, and a member of the Audit Committee of the Research Entities of Agency for Science, Technology and Research (A*STAR), a statutory board under the Ministry of Trade and Industry of Singapore.
Mr. Lai obtained his bachelor of accountancy with honors from Nanyang Technological University and was qualified as a Chartered Accountant (Practising) by the Institute of Singapore Chartered Accountants in 2002. He obtained his Public Accountant qualification in 2014 from the Accounting & Corporate Regulatory Authority.
Lun Kwok Chan will begin serving as our independent director immediately upon the SEC’s declaration of effectiveness of our registration statement on Form F-1, of which this prospectus forms a part. Dr. Lun will serve as the chairman of the nominations committee and as a member of the audit and compensation committees. Dr. Lun has more than 40 years of professional experience in medical science and informatics. He founded and is currently the chief executive officer of Gateway Consulting Pte Ltd, since 2006 a company specializing in professional training in the areas of biostatistics and health informatics. He began his career as a lecturer at the Faculty of Science, National University of Singapore (“NUS”) in 1974, and left NUS as an associate professor in 2001. From 2007 to 2008, he briefly taught at Duke-NUS Graduate Medical School. From 2001 to 2010, Dr. Lun held various positions at Nanyang Technology University, including serving as the adjunct professor and vice dean of the School of Biological Science. He was the professorial fellow at the Department of Information Systems, NUS when he retired in 2014.
Dr. Lun obtained his bachelor of science degree from the University of Singapore in 2017, his Ph.D. degree from the University of Birmingham in 1971, and his master of science degree from the University of London in 1980. He has been appointed as the course director of 10x10 International Course on Health Informatics, in collaboration with Oregon Health and Science University, USA since 2022, and has been serving on the editorial board of the Journal of Experimental and Clinical Medicine since 2009.
Gabe Rijpma will begin serving as our independent director immediately upon the SEC’s declaration of effectiveness of our registration statement on Form F-1, of which this prospectus forms a part. Mr. Rijpma will serve as the chairman of the compensation committee and as a member of the audit and nominations committees. Mr. Rijpma is currently the chief executive officer and director of Aceso Health, a company delivering platform solutions for the healthcare industry aimed at enhancing the experience of care for both patients and healthcare providers. From 2006 to 2019, he held various positions at Microsoft across multiple geographies including Australia, the United States, and Singapore. His most recent role there was the senior director of Health & Social Services for Asia, where he led his team to scale up an emerging health business rapidly. Mr. Rijpma received his education in Business Computing from the Christchurch Institute of Technology from 1992 to 1994. He is also a fellow of the Australasian Institute of Digital Health and a founding fellow of Health Informatics New Zealand.
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Peng Chee Yong joined our Company in 2022 and is currently our Chief Financial Officer overseeing key financial aspects including management of a finance team to set up our financial reporting system, supporting senior management in developing plans for financial growth, financial reporting, forecasting and budgeting, compliance with applicable accounting and legal requirements, as well as tax matters. Mr. Peng was the assistant manager at KPMG from 2009 to 2013, and audit supervisor at Baker Tilly from 2013 to 2015. From 2015 to 2018, he served as the audit and investment manager at ISOTeam Ltd., a SGX-listed leading facilities maintenance specialist for the public sector company. From 2018 to 2021, he was the IPO consultant at Pinedex Pte. Ltd., a consultancy company, where his main duties concentrated on pre-IPO assessments and financial matters such as coordinating internal and external audits, and preparing profit and working capital forecasts. Immediately prior to joining our Company, Mr. Peng was the chief financial officer of IAG Holdings Limited, a HKEX-listed company specializing in medical devices manufacturing, where his duties primarily included overseeing and ensuring compliance with the regulatory requirements of HKEX in financial reporting, accounting, tax, and internal controls. Mr. Peng earned his Bachelor of Accountancy degree from Northern University of Malaysia and graduated with first class honors. He has been qualified as a CPA in Australia since 2012, and as a Chartered Accountant in Singapore since 2017.
Rex Chin Chien Howh has served as our financial controller since 2022 and is primarily responsible for the management of cashflow and financial statements, including reviewing of all the subsidiaries’ daily, weekly and monthly financial statements close process controls to ensure all financial statements presented are in accordance with IFRS and US GAAP. He also supported the senior management in overseeing the monthly financial performance and setting KPIs for each business unit to ensure their business performance and future business planning. Prior to joining our Company, since 2021, Mr. Chin was a project cost controller in UEM Sunrise Bhd, a leading property developer in Malaysia, where he managed tax and financial operations, including the review and approval of payments, the preparation of revenue analysis and annual budget, as well as the assessment of the company’s tax position. From 2018 to 2019, Mr. Chin was a finance manager in the Johor division of another leading Malaysian property developer, IOI Properties Bhd, overseeing financial reporting, cash flow forecasts, annual budget as well as daily financial and tax operations. From 2013 to 2017, Mr. Chin worked in Ernst & Yong in Malaysia and held various positions including audit associate and audit assistant manager, where he engaged in the audits of listed companies and multinational corporations across various industries. He obtained his Diploma in Accounting from the Southern College University, Malaysia in 2009, his Bachelor’s Degree in Accounting and Finance from the University of Wales, UK in 2012, and became a fellow member at the Association of Chartered Certified Accountants in 2016.
Law Pei Bei has served as our Chief Business Officer since 2022. Ms. Law is primarily in charge of the coordination of departments, supporting senior management in developing plans for business growth, and business development activities. Prior to assuming her role as our Chief Business Officer, Ms. Law served as the marketing executive of DMG & Partners Securities Pte Ltd from 2012 to 2014 and the asset management & operations executive of IHC Medical Assets Pte Ltd from 2014 to 2016. From 2017 to 2022, she served as the head of business development & operations of Sano Pain Care Group, a pain care specialist offering drugless therapies in Malaysia since 2008, where her main duties included managing the healthcare business chain, expanding business scale, identifying areas of growth, and developing strategic partnerships with key stakeholders. From 2019 to 2022, she was the co-founder and head of business development & operations of Moss Motion, a design studio creating contents and experiences for brands to help them achieving business goals, primarily responsible for identifying new business opportunities, overseeing day-to-day operations, and maintaining relationships with clients and partners. She earned her Bachelor of Business Management & Law degree from Aomori Chuo Gakuin University in Japan in 2012, and earned her MBA degree from University of Cardiff Metropolitan in the UK in 2017.
Nathan Siaw Seng Taat has joined us since 2022 as Deputy Medical Officer and is now serving as our Chief Medical Officer, overseeing the recruitment and supervision of medical staff, the compliance of medical staff with Company policies and agenda, the development and approval of medical-related policies and procedures, as well as the training and promotion of subordinate staff under medical directors. Prior to assuming his role as Chief Medical Officer, he was an ophthalmology medical practitioner with Tan Tock Seng Hospital, Changi General Hospital, Singapore National Eye Centre and National University Hospital, and a medical officer with Singapore General Hospital and Changi General Hospital, where he was responsible for the care of patients from the emergency department to the general wards. From 2020 to 2022, Dr. Siaw was also a Singapore Armed Forces Medical Officer, where he was responsible for the daily operations of the medical center, the training and education of the medics in his camp, as well as patient care. He was also appointed as the medical officer in charge of the army care facility during the COVID-19 pandemic, and together with the task force, crafted policies and directives related to the medical care of local and overseas soldiers. He obtained his Bachelor of Medicine, Bachelor of Surgery degree from National University of Singapore in 2018, and was awarded Singapore Health Quality Service Award by the Singapore National Eye Center and Singapore Health Services group in 2021.
Felicia Chan Siew Siew has served as our Chief Technology Officer since 2017 and is primarily responsible for leading projects, developing and delivering computer programs, system software and network solutions to internal and external customers. Before joining Mobile-health, Ms. Chan worked as the assistant manager and analyst programmer in Gloco Malaysia Sdn Bhd, a leading healthcare IT system provider in Malaysia since 1997, from 2008 to 2014. From 2014 to 2017, she served as the co-technical lead and senior software developer in Manulife Technology and Services Sdn Bhd, a company providing software development services to members of Manulife group which is a leading financial services provider worldwide, where she provided advice and proposed solutions to resolve technical problems, as well as developed or enhanced new and existing technological features and infrastructures while working closely with business analysts’ team. Ms. Chan graduated with first class honors from University Tun Abdul Razak with a Bachelor’s Degree in Computer Science/Information Technology in 2007.
Board of Directors
Our Board will consist of 5 directors upon the SEC’s declaration of effectiveness of our registration statement on Form F-1, of which this prospectus forms a part. A director is not required to hold any shares in our Company to qualify to serve as a director. A director who is in any way, whether directly or indirectly, interested in a contract or transaction or proposed contract with our Company is required to declare the nature of his or her interest at a meeting of our directors. A general notice given to the directors by any director to the effect that he is a shareholder of any specified company or firm and is to be regarded as interested in any contract or transaction with that company or firm shall be deemed a sufficient declaration of interest with regard to any contract so made or transaction so consummated.
Subject to any separate requirement for audit committee approval under applicable law or the Listing Rules of the Nasdaq Stock Market and disqualification by the chairman of the relevant board meeting, a director may not vote in respect of any contract or transaction or proposed contract, that he or she may be interested therein, but he or she may be counted in the quorum at any meeting of the directors at which any such contract or transaction or proposed contract shall come before the meeting for consideration. Our Board may exercise all of the powers of our Company to raise or borrow money and to mortgage or charge its undertaking, property and assets (present and future) and uncalled capital, or any part thereof, and to issue debentures, debenture stock, bonds and other securities, whether outright or as collateral security for any debt, liability or obligation of our Company or of any third-party. None of our directors has a service contract with us that provides for benefits upon termination of service.
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As a Cayman Islands company listed on the Nasdaq Capital Market, we are a foreign private issuer and are permitted to follow the home country practice with respect to certain corporate governance matters rather than complying with Nasdaq corporate governance standards. Cayman Islands law does not require a majority of a publicly traded company’s board of directors to be comprised of independent directors. However, to enhance our corporate governance, we elect to follow Nasdaq corporate governance standards in having a majority of our board comprised of independent directors.
Committees of the Board
Upon the effectiveness of this offering, we intend to establish an audit committee, a compensation committee and a nominations committee under the Board. We intend to adopt a charter for each of the three committees prior to the completion of this offering. Each committee’s members and functions are described below.
Audit Committee. Our audit committee will consist of Lai Kuan Loong Victor, Lun Kwok Chan and Gabe Rijpma, and will be chaired by Lai Kuan Loong Victor. Our Board has determined that each such member satisfies the “independence” requirements of Rule 5605(a)(2) of the Listing Rules of the Nasdaq Stock Market and meet the independence standards under Rule 10A-3 under the Exchange Act. Our audit committee will consist solely of independent directors that satisfy the Nasdaq Capital Market and SEC requirements within one year of the completion of this offering. Our Board has also determined that Lai Kuan Loong Victor qualifies as an “audit committee financial expert” within the meaning of the SEC rules and possesses financial sophistication within the meaning of the Listing Rules of the Nasdaq Stock Market. The audit committee will oversee our accounting and financial reporting processes and the audits of the financial statements of our Company. The audit committee will be responsible for, among other things:
● | selecting our independent registered public accounting firm and pre-approving all auditing and non-auditing services permitted to be performed by our independent registered public accounting firm; |
● | reviewing with our independent registered public accounting firm any audit problems or difficulties and management’s response and approving all proposed related party transactions, as defined in Item 404 of Regulation S-K; |
● | discussing the annual audited financial statements with management and our independent registered public accounting firm; |
● | periodically reviewing and reassessing the adequacy of our audit committee charter; |
● | meeting periodically with the management and our internal auditor and our independent registered public accounting firm; |
● | reporting regularly to the full Board; |
● | reviewing the adequacy and effectiveness of our accounting and integral control policies and procedures and any steps taken to monitor and control major financial risk exposure; and |
● | such other matters that are specifically delegated to our audit committee by our Board from time to time. |
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Compensation Committee. Our compensation committee will consist of Gabe Rijpma, Lai Kuan Loong Victor and Lun Kwok Chan, and will be chaired by Gabe Rijpma. Our Board has determined that each such member satisfies the “independence” requirements of Rule 5605(a)(2) of the Listing Rules of the Nasdaq Stock Market. Our compensation committee will assist the Board in reviewing and approving the compensation structure, including all forms of compensation, relating to our directors and executive officers. Our chief executive officer may not be present at any committee meeting during which his compensation is deliberated upon. The compensation committee will be responsible for, among other things:
● | reviewing and approving to the Board with respect to the total compensation package for our chief executive officer; |
● | reviewing the total compensation package for our employees and recommending any proposed changes to our management; |
● | reviewing and recommending to the Board with respect to the compensation of our directors; |
● | reviewing annually and administering all long-term incentive compensation or equity plans, programs or similar arrangements, annual bonuses, employee pension and welfare benefit plans; and |
● | selecting and receiving advice from compensation consultants, legal counsel or other advisors after taking into consideration all factors relevant to that person’s independence from management |
Nominations Committee. Our nominations committee will consist of Lun Kwok Chan, Lai Kuan Loong Victo and Gabe Rijpma, and will be chaired by Lun Kwok Chan. Our Board has determined that each such member satisfies the “independence” requirements of Rule 5605(a)(2) of the Listing Rules of the Nasdaq Stock Market. The nominations committee will assist the Board in selecting individuals qualified to become our directors and in determining the composition of the Board and its committees. The nominations committee will be responsible for, among other things:
● | identifying and recommending nominees for election or re-election to our Board or for appointment to fill any vacancy; |
● | reviewing annually with our Board its current composition in light of the characteristics of independence, age, skills, experience and availability of service to us; |
● | advising the Board periodically with respect to significant developments in the law and practice of corporate governance as well as our compliance with applicable laws and regulations, and making recommendations to our Board on all matters of corporate governance and on any corrective action to be taken; and |
● | monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance. |
Board Advisers
We appointed three advisers in December 2023 to advise our Board and Co-Chief Executive Officers with respect to business strategic and expansion opportunities. Below presents the information about our three advisers.
Fan Min is the co-founder of Ctrip.com International Limited, a Nasdaq-listed travel service provider in China. He has served as Ctrip’s president since 2009 and the vice chairman of its board since 2013. From 2006 to 2013, he was also Ctrip’s chief executive officer. He was awarded the Top 10 Great Leaders Award of the Year on the 2010 APEC China SME Value List, and 2008 EY Entrepreneur of the Year.
Ling Tiung Leng has more than 25 years of developing businesses in various industries, such as the distribution channels, security manpower, construction, food & beverage, sports, and IT industry. He currently serves as the President of the ASEAN-China Entrepreneurs Association. In 2012, he was awarded the D.I.M.P., the Knight Companion of the Order of the Crown of Pahang, by the Sultan of Pahang.
Gregory Leong Goh Han currently serves as the executive chairman of Goldplus Universal Pte Ltd, a regional pharmaceutical sales, marketing and distribution company with offices in Singapore, Myanmar and Brunei. He is also the founding partner of Shenton Family Medical Clinics in Singapore, and has been involved with the Economic Development Board of Singapore as a SEEDS investor with experience in helping guiding start-up companies.
Duties of Directors
Under Cayman Islands law, our directors owe fiduciary duties to our Company, including a duty of loyalty, a duty to act honestly, and a duty to act in what they consider in good faith to be in our best interests. Our directors must also exercise their powers only for a proper purpose. Our directors also owe to our Company a duty to act with skill and care. It was previously considered that a director need not exhibit in the performance of his duties a greater degree of skill than may reasonably be expected from a person of his knowledge and experience. However, English and Commonwealth courts have moved towards an objective standard with regard to the required skill and care and these authorities are likely to be followed in the Cayman Islands. In fulfilling their duty of care to us, our directors must ensure compliance with our memorandum and articles of association, as amended and restated from time to time. Our Company has the right to seek damages if a duty owed by our directors is breached. In limited exceptional circumstances, a shareholder may have the right to seek damages in our name if a duty owed by our directors is breached.
The functions and powers of our Board include, among others:
● | convening shareholders’ annual general meetings and reporting its work to shareholders at such meetings; |
● | declaring dividends and distributions; |
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● | appointing officers and determining the term of office of officers; |
● | exercising the borrowing powers of our Company and mortgaging the property of our Company; and |
● | approving the transfer of shares of our Company, including the registering of such shares in our share register. |
Terms of Directors and Executive Officers
Each of our directors holds office until the expiration of his or her term, as may be provided in a written agreement with our Company, and his or her successor has been elected and qualified, until his or her resignation or until his or her office is otherwise vacated in accordance with our articles of association. At each annual general meeting, one-third of the Directors for the time being shall retire from office by rotation. However, if the number of Directors is not a multiple of three, then the number nearest to but not less than one-third shall be the number of retiring Directors. A retiring director shall be eligible for re-election. All of our executive officers are appointed by and serve at the discretion of our Board. Our directors may be appointed or removed from office by an ordinary resolution of shareholders. A director will be removed from office automatically if, among other things, the director (i) resigns; (ii) dies; (iii) is declared to be of unsound mind and the Board resolves that his office be vacated; (iv) becomes bankrupt or has a receiving order made against him or suspends payment or compounds with his creditors generally; (v) is prohibited from being or ceases to be a director by operation of law;(vi) without special leave, is absent from meetings of the Board for three consecutive meetings, and the Board resolves that his office is vacated; (vii) has been required by the Nasdaq Capital Market to cease to be a Director; (viii) or is removed from office by the requisite majority of the Directors or otherwise pursuant to our amended and restated memorandum and articles of association then in effect. The compensation of our directors is determined by the Board. There is no mandatory retirement age for directors.
Employment Agreements and Indemnification Agreements
We have entered into employment agreements through the Company and MaNaDr Pte. Ltd. with our directors and executive officers. Each of them is employed for a continuous term, or a specified time period which will be automatically extended, unless either we or the director and executive officer gives prior notice to terminate such employment. We may terminate the employment for cause, at any time, without notice or compensation, for certain acts of the director or executive officer, including but not limited to the commitments of any breach of the provisions of the employment agreements, refusal to perform duties assigned or disobedience of a lawful and reasonable order, unlawful misconduct such as commission of fraud or embezzlement or a crime involving moral turpitude, or consistent willful misconduct or negligence. A director or an executive officer may terminate his or her employment at any time with a one- or three-month prior written notice.
Each director and executive officer has agreed to hold, both during and after the employment agreement expires or is earlier terminated, in strict confidence and not to use, disclose, divulge to any other person or entity without our written consent, any confidential information of the Group (including in particular lists or details of customers of the Group) relating to the working of any process, technology, invention or methods carried on or used by the Group or in respect of which the Group is bound by an obligation of confidence to a third party, or any financial or trading information or trade secrets relating to the Group, or any information which the director or executive officer might receive or obtain in relation to the Group’s business (including, without limitation, the Group’s finances, customers, clients or suppliers), which for the time being is confidential, proprietary or generally not available to the public. Each director and executive officer has also agreed that all notes, memoranda, records and writing made by him or her relating to the business of the Group shall be and remain the property of the Group, and shall be delivered by him or her to the Group upon request.
In addition, all directors and executive officers have agreed to be bound by non-competition and non-solicitation restrictions, according to which the directors and executive officers shall not, during the term of his or her employment and for a period of one year or two years thereafter, (i) directly or indirectly engage in any business or activity which is substantially similar to those which he or she engaged in for the Company, if such activity is in competition with the Company; (ii) directly or indirectly, recruit or seek to hire any other employee of the Company who are still actively employed by or doing business with the Company; and (iii) directly or indirectly, solicit, attempt to solicit, or assist others to solicit any of the Company’s clients and customers with whom the director or executive officer had material contact during the term of employment. Each director and executive officer has agreed to devote a reasonable amount of his or her productive time, ability and attention to our business during the term of the employment.
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We expect to enter into indemnification agreements with our directors and executive officers, pursuant to which we will agree to indemnify our directors and executive officers against certain liabilities and expenses incurred by such persons in connection with claims made by reason of their being such a director or executive officer.
Corporate Governance Practice
We are a “foreign private issuer” as defined under the applicable U.S. federal securities laws. The Nasdaq corporate governance requirements include certain accommodations that allow foreign private issuers to follow “home country” corporate governance practices in lieu of the Nasdaq requirements. The application of such exemptions requires that we disclose each Nasdaq corporate governance rules that we do not follow and describe the Cayman Islands corporate governance practices we do follow. We currently follow Cayman Islands corporate governance practices in lieu of the Nasdaq corporate governance requirements in respect of the following:
● | the requirement under Section 5605(b)(2) of the Nasdaq listing rules that the independent directors have regularly scheduled meetings with only the independent directors present. |
However, to enhance our corporate governance, we elect to follow Nasdaq corporate governance standards in having a majority of our board comprised of independent directors, and having our nominations and compensation committees to be composed entirely of independent directors.
Code of Conduct and Code of Ethics
We will adopt a written code of business conduct and ethics that applies to our directors, officers and employees, including our chief executive officer, chief financial officer, principal accounting officer or controller or persons performing similar functions. We intend to disclose any amendments to the code of ethics, and any waivers of the code of ethics or the code of conduct for our directors, executive officers and senior finance executives, on our website to the extent required by applicable U.S. federal securities laws and the corporate governance rules of the Nasdaq.
Compensation of Directors and Executive Officers
In the year ended June 30, 2022, we had paid an aggregate of S$30,000 (US$22,500) in cash to our executive directors and S$2,500 (US$1,900) in cash to our non-executive directors. We have not set aside or accrued any amount to provide pension, retirement or other similar benefits to our directors and executive officers. Our Singapore subsidiaries are required by law to make contributions equal to certain percentages of each employee’s salary for his or her pension insurance, medical insurance, unemployment insurance and other statutory benefits and a housing provident fund.
Other than as disclosed above, none of our directors has entered into a service agreement with our Company or any of our subsidiaries that provides for benefits upon termination of employment.
2023 Employee Incentive Plan
On March 27, 2023, we adopted the Employee Incentive Plan, or the Plan, to provide a wealth creation opportunity for the employees, advisors, consultants and directors in line with value creation for the Company, drive retention of employees, advisors, consultants and directors for their continued association with the Company, and motivate employees, advisors, consultants and directors by rewarding high performance. Under the Plan, the maximum aggregate number of Shares which may be issued pursuant to all awards (including incentive share options) is 10% of the total issued Class A Ordinary Shares of our Company from time to time. On August 1, 2023, we granted options to purchase a total of 3,738 Class A Ordinary Shares of a nominal or par value of US$0.001 each to our Chief Financial Officer, certain key personnel and employees at the price of US$1.0 per share. On December 18, 2023, at the same price per share, we further granted options to purchase a total of 701 Class A Ordinary Shares of a nominal or par value of US$0.001 each to three of our employees. On February 13, 2024, the Company issued 4,439 Class A Ordinary Shares of a nominal or par value of US$0.001 each to the holders of the options, pursuant to the provisions of the Plan. On February 14, 2024, the issued 4,439 Class A Ordinary Shares of a nominal or par value of US$0.001 each were divided into 1,109,750 Class A Ordinary Shares of a nominal or par value of US$0.000004 each.
The following paragraphs summarize the key terms of the Plan:
Administration of the Plan. The Plan will be administered by the Employee Incentive Plan Committee of the Company (the “Committee”) in its sole and absolute discretion with such powers and duties as are conferred on it by the Board from time to time. The Committee shall have the power, from time to time, to make and vary such regulations for the implementation and administration of this Plan as it in its absolute discretion deems fit. Any matter pertaining or pursuant to the Plan and any dispute as to the interpretation of the Plan or any rule, regulation, procedure thereunder or as to any rights under the Plan, shall be determined by the Committee and such decision shall be final and binding.
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Duration of the Plan. The Plan may be terminated at any time by the Committee or, at the discretion of the Committee, by ordinary resolution of the Company, and if the Plan is so terminated, no further Options shall be offered hereunder.
Eligibility. The Committee shall in its sole and absolute discretion determine if a person is eligible to participate in the Plan, taking into consideration, among other things, role, seniority, length of service, performance history and potential contribution to the Company and/or any of its subsidiaries, and such person shall at least be a confirmed employee of the Company and/or any of its subsidiaries, or an advisor, consultant or director of the Company and/or any of its subsidiaries, and who have attained the age of 21 years (the “Participant”).
Grant of Options. An Option may be granted at any time as may be determined by the Committee in its sole and absolute discretion and may be granted subject to such conditions as may be determined by the Committee in its absolute discretion.
Subscription Price. The subscription price payable for each Option Share in respect of which an Option is exercisable (the “Subscription Price”) shall be determined by the Committee from time to time, provided that in no event shall the subscription price per Option Share be less than the par value of such Option Share.
Option period and vesting schedule. Options shall be exercisable only after vesting. Subject to the occurrence of certain events, the lapsing or the expiry of options as detailed in the Plan, the Options shall be exercisable in whole or in part, before the expiry of 10 years from the date of grant of the Option, or such other date as may be determined by the Committee. In the event the following occurs: (i) an initial public offering and listing of shares of the Company or a direct listing of shares of the Company (a “Listing”); or (ii) a change of control in the shares of the Company, (in the case of a Listing, subject to the provisions of the Plan) the Options granted to such Participants shall immediately vest and the Committee will, as soon as practicable and prior to the completion of such event, procure the allotment or transfer to each Participant of the relevant number of Option Shares. In the event of a Listing, subject to applicable law, the Articles of Association of the Company and the rules of the relevant securities exchange: the Participant (a) shall not, prior to the Listing, transfer any Option Shares without the prior written consent of the Committee; (b) shall not, prior to the Listing, transfer any Option Shares without first offering such Option Shares to the Company at a price and on terms no less favorable than those offered to a third party purchaser whose identity shall be disclosed to the Committee; (c) shall agree to be bound by any applicable lock-up restrictions and/or moratorium requirements under applicable law and the rules of the relevant securities exchange, or as otherwise requested by the Committee, for the relevant lock-up period; and (d) may, following the Listing, transfer any Option Shares held by such Participant at any time, subject to compliance with the Company’s Articles of Association.
Exercise of Options. An Option may be exercised, in whole or in part, by a Participant giving notice in writing to the Company in or substantially in the form set out in the Plan, subject to modifications as the Committee may from time to time determine, accompanied by (i) a remittance for the full amount of the aggregate Subscription Price payable in respect of all the Option Shares to be subscribed for upon exercise of the Option to the bank account of the Company, and (ii) any other documentation which the Committee may require in connection with an exercise of the Option.
Transfer Restrictions. An Option shall be personal to the Participant to whom it is granted and, prior to the allotment and/or transfer to the Participant of the Option Shares to which the Option relates, shall not be transferred (other than to a Participant’s personal representative on the death of that Participant), charged, assigned, pledged or otherwise disposed of, in whole or in part, except with the prior approval of the Committee. If a Participant shall do, suffer or permit any such act or thing as a result of which he would or might be deprived of any rights under an Option without the prior approval of the Committee, that Option shall immediately lapse.
Except as noted above, we did not, and will not, issue any other stock options or Class A Ordinary Share grants prior to this offering.
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The following table sets forth information concerning the beneficial ownership of our Ordinary Shares as of the date of this prospectus by:
● | each of our directors, director appointees and executive officers; and |
● | each person known to us to beneficially own more than 5% of our Class A or Class B Ordinary Shares. |
Beneficial ownership is determined in accordance with the rules and regulations of the SEC. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, we have included shares that the person has the right to acquire within 60 days, including through the exercise of any option, warrant, or other right or the conversion of any other security. These shares, however, are not included in the computation of the percentage ownership of any other person.
Ordinary Shares Beneficially Owned As of the Date of this Prospectus | % of Aggregate Voting Power As of the Date of this Prospectus † | |||||||||||||||||||
Class A Ordinary Shares | Class B Ordinary Shares | |||||||||||||||||||
Directors and Executive Officers | Shares | % | Shares | % | ||||||||||||||||
Siaw Tung Yeng | 787,625 | 4.0 | 7,046,000 | 58.3 | 50.7 | |||||||||||||||
Teoh Pui Pui |
3,176,250 |
16.1 |
1,610,000 | 13.3 |
13.7 | |||||||||||||||
Lai Kuan Loong Victor | - | - | - | - | - | |||||||||||||||
Lun Kwok Chan | - | - | - | - | - | |||||||||||||||
Gabe Rijpma | - | - | - | - | - | |||||||||||||||
Peng Chee Yong | 122,500 | 0.6 | - | - | 0.1 | |||||||||||||||
All Directors and Executive Officers as a Group | 4,086,375 | 20.7 | 8,656,000 | 71.6 | 64.5 | |||||||||||||||
Principal Shareholders | ||||||||||||||||||||
Siaw Tun Mine | - | - |
3,019,500 | 25.0 | 21.5 | |||||||||||||||
Ng Jet Wei | 2,012,500 | 10.2 | - | - | 1.4 |
The calculations in the table below are based on 21,921,750 Class A Ordinary Shares and 12,078,250 Class B Ordinary Shares issued and outstanding immediately after the completion of this offering, assuming the underwriter does not exercise their over-allotment option.
The following table sets forth information concerning the beneficial ownership of our Ordinary Shares immediately after the offering by:
● | each of our directors and executive officers; and |
● | each person known to us to beneficially own more than 5% of our Class A or Class B Ordinary Shares. |
Ordinary Shares Beneficially Owned Immediately After the Offering | % of Aggregate Voting Power Immediately After the Offering | |||||||||||||
Class A Ordinary Shares | Class B Ordinary Shares | |||||||||||||
Directors and Executive Officers | Shares | % | Shares | % | ||||||||||
Siaw Tung Yeng | 787,625 | 3.6 | 7,046,000 | 58.3 | 49.9 | |||||||||
Teoh Pui Pui | 3,176,250 | 14.5 | 1,610,000 | 13.3 | 13.5 | |||||||||
Lai Kuan Loong Victor | - | - | - | - | - | |||||||||
Lun Kwok Chan | - | - | - | - | - | |||||||||
Gabe Rijpma | - | - | - | - | - | |||||||||
Peng Chee Yong | 122,500 | 0.6 | - | - | 0.1 | |||||||||
All Directors and Executive Officers as a Group | 4,086,375 | 18.7 | 8,656,000 | 71.6 | ||||||||||
Principal Shareholders | ||||||||||||||
Siaw Tun Mine | - | - | 3,019,500 | 25.0 | 21.2 | |||||||||
Ng Jet Wei | 2,012,500 | 9.2 | 1.4 |
As of the date of this prospectus, we did not have any Class A Ordinary Shares outstanding that were held by record holders in the United States. None of our shareholders has informed us that it is affiliated with a registered broker-dealer or is in the business of underwriting securities. We are not aware of any arrangement that may, at a subsequent date, result in a change of control of our Company. See “Description of Share Capital—History of Securities Issuances” for a description of issuances of our securities that have resulted in significant changes in ownership held by our major shareholders.
† | For each person included in this column, percentage of aggregate voting power represents voting power based on Class A and Class B Ordinary Shares held by such person with respect to all outstanding shares of our Class A and Class B Ordinary Shares as a single class. Each holder of our Class A Ordinary Shares is entitled to one vote per share. Each holder of our Class B Ordinary Shares is entitled to 10 votes per share. Our Class B Ordinary Shares are convertible at any time by the holder into Class A Ordinary Shares on a one-for-one basis, while Class A Ordinary Shares are not convertible into Class B Ordinary Shares under any circumstances. |
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Shareholders Agreement
See “Description of Share Capital — History of Securities Issuances.”
Employment Agreements and Indemnification Agreements
See “Management — Employment Agreements and Indemnification Agreements.”
2023 Employee Incentive Plan
See “Management — 2023 Employee Incentive Plan.”
Other Related Party Transactions
In June 2020, we entered into a partnership agreement with five clinics, of which two clinics are jointly owned by our co-founders and directors Siaw Tung Yeng and Teoh Pui Pui, and one clinic is 50% owned by Teoh Pui Pui (collectively, the “Related Party Clinics”). Pursuant to such agreement, we offer our MaNaDr platform, including related IT, administration and accounting services to the clinics, and the clinics provide teleconsultation, including related medication supply, delivery, and phlebotomists services to us. For the years ended June 30, 2023, 2022 and 2021, the purchase of goods and services by us from the Related Party Clinics amounted to US$0.1 million, US$0.9 million and US$0.2 million, and the sales of goods and services by us to the Related Party Clinics amounted to US$0.4 million, US$0.5 million and US$0.4 million respectively. See Note 11 to the consolidated financial statements for more details.
We obtain advances from our directors or shareholders for working capital purpose from time to time in the year ended June 30, 2023, 2022 and 2021. The advances are interest-free and repayable on demand. As of June 30, 2023, 2022 and 2021, we had amount due to: (i) Siaw Tung Yeng of US$1.0 million, US$1.0 million and US$6.2 million, respectively; and (ii) David Cheong of US$0.1 million, US$0.1 million and US$0.1 million, respectively. In April 2022, Siaw Tung Yeng converted S$6.5 million (US$4.8 million) of the amount due to him into 11,631 of our Class A Ordinary Shares. See Note 11 to the consolidated financial statements for more details.
Employment of Related Person
Nathan Siaw Seng Taat, our Chief Medical Officer, is the son of our co-founder and director Siaw Tung Yeng and has been employed by us since September, 2022. He received compensation of S$58,800 (approximately US$43,000) for the year ended June 30, 2023.
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We are a Cayman Islands exempted company incorporated with limited liability and our affairs are governed by our memorandum and articles of association, the Companies Act (2022 Revision) of the Cayman Islands, which we refer to as the Companies Act below, and the common law of the Cayman Islands.
As of the date of this prospectus, our authorized share capital is US$50,000 divided into 12,500,000,000 shares of nominal or par value of US$0.000004 each, comprising of (i) 6,250,000,000 Class A Ordinary Shares of nominal or par value of US$0.000004 each, (ii) 6,250,000,000 Class B Ordinary Shares of nominal or par value of US$0.000004 each.
19,671,750 Class A Ordinary Shares of nominal or par value of US$0.000004 each and 12,078,250 Class B Ordinary Shares of nominal or par value of US$0.000004 each have been issued. All of our issued and outstanding shares are fully paid.
Our Post-Offering Memorandum and Articles of Association
Our shareholders have adopted an amended and restated memorandum and articles of association (adopted by special resolution dated 14 February 2024), which we refer to below as our post-offering memorandum and articles of association, and this memorandum and articles of association is effective currently and shall remain in effect after the date of the Company’s listing on the Nasdaq Capital Market. The following are summaries of material provisions of the post-offering memorandum and articles of association and of the Companies Act, insofar as they relate to the material terms of our Class A Ordinary Shares.
Objects of Our Company. Under our post-offering memorandum and articles of association, the objects of our company are unrestricted and we have the full power and authority to carry out any object not prohibited by the laws of the Cayman Islands.
Ordinary Shares. Our Ordinary Shares are divided into Class A Ordinary Shares and Class B Ordinary Shares. Holders of our Class A Ordinary Shares and Class B Ordinary Shares will have the same rights except for voting and conversion rights. Each Class A Ordinary Share shall entitle the holder thereof to one vote on all matters subject to vote at our general meetings and each Class B Ordinary Share shall entitle the holder thereof to 10 votes on all matters subject to vote at our general meetings. Our Class A Ordinary Shares are issued in registered form and are issued when registered in our register of members. We may not issue shares to bearer. Our shareholders who are non-residents of the Cayman Islands may freely hold and vote their shares.
Conversion. Class B Ordinary Shares may be converted into the same number of Class A Ordinary Shares at the option of the holders thereof at any time, while Class A Ordinary Shares cannot be converted into Class B Ordinary Shares under any circumstances.
Dividends. The holders of our Class A Ordinary Shares are entitled to such dividends as may be declared by our Board or declared by our shareholders by ordinary resolution (provided that no dividend may be declared by our shareholders which exceeds the amount recommended by our directors). Our post-offering memorandum and articles of association provide that dividends may be declared and paid out of our profits, realized or unrealized, or from any reserve set aside from profits which our Board determines is no longer needed. Under the laws of the Cayman Islands, our company may pay a dividend out of either profit or share premium account, provided that in no circumstances may a dividend be paid if this would result in our company being unable to pay its debts as they fall due in the ordinary course of business.
Voting Rights. Holders of Class A Ordinary Shares and Class B Ordinary Shares shall, at all times, vote together as one class on all matters submitted to a vote by the members at any general meeting of the Company. Each Class A Ordinary Share shall be entitled to one vote and each Class B Ordinary Share shall be entitled to 10 votes on all matters subject to the vote at general meetings of our Company. Voting at any meeting of shareholders is by show of hands unless a poll (before or on the declaration of the result of the show of hands) is demanded. A poll may be demanded by the chairperson of such meeting or any one shareholder present in person or by proxy.
An ordinary resolution to be passed at a meeting by the shareholders requires the affirmative vote of a simple majority of the votes attaching to the Ordinary Shares cast at a meeting, while a special resolution requires the affirmative vote of no less than two-thirds of the votes cast attaching to the outstanding and issued Ordinary Shares cast at a meeting. A special resolution will be required for important matters such as a change of name or making changes to our post-offering memorandum and articles of association. Our shareholders may, among other things, divide or combine their shares by ordinary resolution.
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General Meetings of Shareholders. As a Cayman Islands exempted company, we are not obliged by the Companies Act to call shareholders’ annual general meetings. Our post-offering memorandum and articles of association provide that we may (but are not obliged to) in each year hold a general meeting as our annual general meeting in which case we shall specify the meeting as such in the notices calling it, and the annual general meeting shall be held at such time and place as may be determined by our directors.
Shareholders’ general meetings may be convened by a majority of our Board. Advance notice of at least seven days is required for the convening of our annual general shareholders’ meeting (if any) and any other general meeting of our shareholders. A quorum required for any general meeting of shareholders consists of at least one shareholder present or by proxy, representing not less than one-third of all votes attaching to the issued and outstanding shares in our company entitled to vote at the general meeting.
The Companies Act provides shareholders with only limited rights to requisition a general meeting, and does not provide shareholders with any right to put any proposal before a general meeting. However, these rights may be provided in a company’s articles of association. Our post-offering memorandum and articles of association provide that upon the requisition of any one or more of our shareholders who together hold shares which carry in aggregate not less than one-third of all votes attaching to the issued and outstanding shares of our company entitled to vote at general meetings, our Board will convene an extraordinary general meeting and put the resolutions so requisitioned to a vote at such meeting. However, our post-offering memorandum and articles of association do not provide our shareholders with any right to put any proposals before annual general meetings or extraordinary general meetings not called by such shareholders.
Transfer of Ordinary Shares. Subject to the restrictions set out in our post-offering memorandum and articles of association as set out below, any of our shareholders may transfer all or any of his or her Ordinary Shares by an instrument of transfer in the usual or common form or any other form approved by our Board.
Our Board may, in its absolute discretion, decline to register any transfer of any ordinary share which is not fully paid up or on which we have a lien. Our Board may also decline to register any transfer of any ordinary share unless:
● | the instrument of transfer is lodged with us, accompanied by the certificate for the Ordinary Shares to which it relates and such other evidence as our Board may reasonably require to show the right of the transferor to make the transfer; |
● | the instrument of transfer is in respect of only one class of Ordinary Shares; |
● | the instrument of transfer is properly stamped, if required; |
● | in the case of a transfer to joint holders, the number of joint holders to whom the Ordinary Share is to be transferred does not exceed four; |
● | the ordinary shares transferred is free of any lien in favor of the Company; and |
● | a fee of such maximum sum as the Nasdaq Capital Market may determine to be payable or such lesser sum as our directors may from time to time require is paid to us in respect thereof. |
If our directors refuse to register a transfer they shall, within three months after the date on which the instrument of transfer was lodged, send to each of the transferor and the transferee notice of such refusal.
The registration of transfers may, after compliance with any notice required of Nasdaq Capital Market, be suspended and the register closed at such times and for such periods as our Board may from time to time determine, provided, however, that the registration of transfers shall not be suspended nor the register closed for more than 30 days in any year as our Board may determine.
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Liquidation. On the winding up of our company, if the assets available for distribution amongst our shareholders shall be more than sufficient to repay the whole of the share capital at the commencement of the winding up, the surplus shall be distributed amongst our shareholders in proportion to the par value of the shares held by them at the commencement of the winding up, subject to a deduction from those shares in respect of which there are monies due, of all monies payable to our company for unpaid calls or otherwise. If our assets available for distribution are insufficient to repay all of the paid-up capital, the assets will be distributed so that the losses are borne by our shareholders in proportion to the par value of the shares held by them.
Calls on Shares and Forfeiture of Shares. Our Board may from time to time make calls upon shareholders for any amounts unpaid on their shares in a notice served to such shareholders at least 14 days prior to the specified time and place of payment. The shares that have been called upon and remain unpaid are subject to forfeiture.
Redemption, Repurchase and Surrender of Shares. We may issue shares on terms that such shares are subject to redemption, at our option or at the option of the holders of these shares, on such terms and in such manner as may be determined by our Board or by special resolution of our shareholders. Our company may also repurchase any of our shares on such terms and in such manner as have been approved by our Board or by an ordinary resolution of our shareholders. Under the Companies Act, the redemption or repurchase of any share may be paid out of our Company’s profits or out of the proceeds of a new issue of shares made for the purpose of such redemption or repurchase, or out of capital (including share premium account and capital redemption reserve) if our company can, immediately following such payment, pay its debts as they fall due in the ordinary course of business. In addition, under the Companies Act no such share may be redeemed or repurchased (a) unless it is fully paid up, (b) if such redemption or repurchase would result in there being no shares issued and outstanding or (c) if the Company has commenced liquidation. In addition, our company may accept the surrender of any fully paid share for no consideration.
Variations of Rights of Shares. If at any time, our share capital is divided into different classes of shares, the rights attached to any class may be materially adversely varied with the consent in writing of the holders of at least two-thirds (2/3) of the issued shares of that class or with the sanction of a resolution passed by not less than two-thirds of the votes cast at a separate meeting of the holders of the shares of that class. The rights conferred upon the holders of the shares of any class issued shall not, be deemed to be materially adversely varied by the creation, allotment or issue of further shares ranking pari passu with or subsequent to them or the redemption or purchase of any shares of any class by the Company. The rights of the holders of shares shall not be deemed to be materially adversely varied by the creation or issue of shares with preferred or other rights including, without limitation, the creation of shares with enhanced or weighted voting rights.
Issuance of Additional Shares. Our post-offering memorandum and articles of association authorize our Board to issue additional Ordinary Shares from time to time as our Board shall determine, to the extent out of available authorized but unissued Ordinary Shares.
Our post-offering memorandum and articles of association also authorize our Board to establish from time to time one or more series of preferred shares and to determine, with respect to any series of preferred shares, the terms and rights of that series, including:
● | the designation of the series; | |
● | the number of shares of the series; | |
● | the dividend rights, dividend rates, conversion rights, voting rights; and | |
● | the rights and terms of redemption and liquidation preferences. |
Our Board may issue preferred shares without action by our shareholders to the extent out of authorized but unissued preferred shares. Issuance of these shares may dilute the voting power of holders of Ordinary Shares.
Inspection of Books and Records. Holders of our Class A Ordinary Shares will have no general right under Cayman Islands law to inspect or obtain copies of our list of shareholders or our corporate records. However, we will provide our shareholders with annual audited financial statements. See “Where You Can Find Additional Information.”
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Anti-Takeover Provisions. Some provisions of our post-offering memorandum and articles of association may discourage, delay or prevent a change of control of our company or management that shareholders may consider favorable, including provisions that:
● | authorize our Board to issue preferred shares in one or more series and to designate the price, rights, preferences, privileges and restrictions of such preferred shares without any further vote or action by our shareholders; and |
● | limit the ability of shareholders to requisition and convene general meetings of shareholders. |
However, under Cayman Islands law, our directors may only exercise the rights and powers granted to them under our post-offering memorandum and articles of association for a proper purpose and for what they believe in good faith to be in the best interests of our company.
Exempted Company. We are an exempted company with limited liability under the Companies Act. The Companies Act distinguishes between ordinary resident companies and exempted companies. Any company that is registered in the Cayman Islands but conducts business mainly outside of the Cayman Islands may apply to be registered as an exempted company. The requirements for an exempted company are essentially the same as for an ordinary company except that an exempted company:
● | does not have to file an annual return of its shareholders with the Registrar of Companies of the Cayman Islands; |
● | is not required to open its register of members for inspection; |
● | does not have to hold an annual general meeting; |
● | may obtain an undertaking against the imposition of any future taxation (such undertakings are usually given for 20 years in the first instance); |
● | may register by way of continuation in another jurisdiction and be deregistered in the Cayman Islands; |
● | may register as a limited duration company; and |
● | may register as a segregated portfolio company. |
“Limited liability” means that the liability of each shareholder is limited to the amount unpaid by the shareholder on the shares of the company (except in exceptional circumstances, such as involving fraud, the establishment of an agency relationship or an illegal or improper purpose or other circumstances in which a court may be prepared to pierce or lift the corporate veil).
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Differences in Corporate Law
The Companies Act is derived, to a large extent, from the older Companies Acts of England but does not follow recent English statutory enactments and accordingly there are significant differences between the Companies Act and the current Companies Act of England. In addition, the Companies Act differs from laws applicable to U.S. corporations and their shareholders. Set forth below is a summary of certain significant differences between the provisions of the Companies Act applicable to us and the laws applicable to companies incorporated in the United States and their shareholders.
Mergers and Similar Arrangements. The Companies Act permits mergers and consolidations between Cayman Islands companies and between Cayman Islands companies and non-Cayman Islands companies. For these purposes, (i) “merger” means the merging of two or more constituent companies and the vesting of their undertaking, property and liabilities in one of such companies as the surviving company, and (ii) a “consolidation” means the combination of two or more constituent companies into a consolidated company and the vesting of the undertaking, property and liabilities of such companies to the consolidated company. In order to effect such a merger or consolidation, the directors of each constituent company must approve a written plan of merger or consolidation, which must then be authorized by (a) a special resolution of the shareholders of each constituent company, and (b) such other authorization, if any, as may be specified in such constituent company’s articles of association. The written plan of merger or consolidation must be filed with the Registrar of Companies of the Cayman Islands together with a declaration as to the solvency of the consolidated or surviving company, a list of the assets and liabilities of each constituent company and an undertaking that a copy of the certificate of merger or consolidation will be given to the members and creditors of each constituent company and that notification of the merger or consolidation will be published in the Cayman Islands Gazette. Court approval is not required for a merger or consolidation which is effected in compliance with these statutory procedures.
A merger between a Cayman parent company and its Cayman subsidiary or subsidiaries does not require authorization by a resolution of shareholders of that Cayman subsidiary if a copy of the plan of merger is given to every member of that Cayman subsidiary to be merged unless that member agrees otherwise. For this purpose a company is a “parent” of a subsidiary if it holds issued shares that together represent at least ninety percent (90%) of the votes at a general meeting of the subsidiary.
The consent of each holder of a fixed or floating security interest over a constituent company is required unless this requirement is waived by a court in the Cayman Islands.
Save in certain limited circumstances, a shareholder of a Cayman constituent company who dissents from the merger or consolidation is entitled to payment of the fair value of his shares (which, if not agreed between the parties, will be determined by the Cayman Islands court) upon dissenting to the merger or consolidation, provided that the dissenting shareholder complies strictly with the procedures set out in the Companies Act. The exercise of dissenter rights will preclude the exercise by the dissenting shareholder of any other rights to which he or she might otherwise be entitled by virtue of holding shares, save for the right to seek relief on the grounds that the merger or consolidation is void or unlawful.
Separate from the statutory provisions relating to mergers and consolidations, the Companies Act also contains statutory provisions that facilitate the reconstruction and amalgamation of companies by way of schemes of arrangement, provided that the arrangement is approved by a majority in number of each class of shareholders and creditors with whom the arrangement is to be made, and who must in addition represent three-fourths in value of each such class of shareholders or creditors, as the case may be, that are present and voting either in person or by proxy at a meeting, or meetings, convened for that purpose. The convening of the meetings and subsequently the arrangement must be sanctioned by the Grand Court of the Cayman Islands. While a dissenting shareholder has the right to express to the court the view that the transaction ought not to be approved, the court can be expected to approve the arrangement if it determines that:
● | the statutory provisions as to the required majority vote have been met; |
● | the shareholders have been fairly represented at the meeting in question and the statutory majority are acting bona fide without coercion of the minority to promote interests adverse to those of the class; |
● | the arrangement is such that may be reasonably approved by an intelligent and honest man of that class acting in respect of his interest; and |
● | the arrangement is not one that would more properly be sanctioned under some other provision of the Companies Act. |
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The Companies Act also contains a statutory power of compulsory acquisition which may facilitate the “squeeze out” of dissentient minority shareholders upon a tender offer. When a tender offer is made and accepted by holders of 90.0% of the shares affected within four months, the offeror may, within a two-month period commencing on the expiration of such four-month period, require the holders of the remaining shares to transfer such shares to the offeror on the terms of the offer. An objection can be made to the Grand Court of the Cayman Islands but this is unlikely to succeed in the case of an offer which has been so approved unless there is evidence of fraud, bad faith or collusion.
If an arrangement and reconstruction by way of scheme of arrangement is thus approved and sanctioned, or if a tender offer is made and accepted in accordance with the foregoing statutory procedures, a dissenting shareholder would have no rights comparable to appraisal rights, which would otherwise ordinarily be available to dissenting shareholders of Delaware corporations, providing rights to receive payment in cash for the judicially determined value of the shares.
Shareholders’ Suits. In principle, we will normally be the proper plaintiff to sue for a wrong done to us as a company, and as a general rule a derivative action may not be brought by a minority shareholder. However, based on English authorities, which would in all likelihood be of persuasive authority in the Cayman Islands, the Cayman Islands court can be expected to follow and apply the common law principles (namely the rule in Foss v. Harbottle and the exceptions thereto) so that a non-controlling shareholder may be permitted to commence a class action against or derivative actions in the name of the company to challenge actions where:
● | a company acts or proposes to act illegally or ultra vires (and is therefore incapable of ratification by the shareholder); |
● | the act complained of, although not ultra vires, could only be effected duly if authorized by more than a simple majority vote that has not been obtained; |
● | an act purports to abridge or abolish the individual rights of a shareholder; and |
● | those who control the company are perpetrating a “fraud on the minority.” |
In the case of a company (not being a bank) having its share capital divided into shares, the Grand Court may, on the application of members holding not less than one fifth of the shares of the company in issue, appoint an inspector to examine the affairs of the company and to report thereon in such manner as the Grand Court shall direct.
Indemnification of Directors and Executive Officers and Limitation of Liability. Cayman Islands law does not limit the extent to which a company’s memorandum and articles of association may provide for indemnification of officers and directors, except to the extent any such provision may be held by the Cayman Islands courts to be contrary to public policy, such as to provide indemnification against civil fraud or the consequences of committing a crime. Our post-offering memorandum and articles of association provide that that we shall indemnify our officers and directors against all actions, proceedings, costs, charges, expenses, losses, damages or liabilities incurred or sustained by such directors or officer, other than by reason of such person’s dishonesty, willful default or fraud, in or about the conduct of our company’s business or affairs (including as a result of any mistake of judgment) or in the execution or discharge of his duties, powers, authorities or discretions, including, without prejudice to the generality of the foregoing, any costs, expenses, losses or liabilities incurred by such director or officer in defending (whether successfully or otherwise) any civil proceedings concerning our company or its affairs in any court whether in the Cayman Islands or elsewhere. This standard of conduct is generally the same as permitted under the Delaware General Corporation Law for a Delaware corporation.
In addition, we will enter into indemnification agreements with our directors and executive officers that provide such persons with additional indemnification beyond that provided in our post-offering memorandum and articles of association.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers or persons controlling us under the foregoing provisions, we have been informed that in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.
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Directors’ Fiduciary Duties. Under Delaware corporate law, a director of a Delaware corporation has a fiduciary duty to the corporation and its shareholders. This duty has two components: the duty of care and the duty of loyalty. The duty of care requires that a director act in good faith, with the care that an ordinarily prudent person would exercise under similar circumstances. Under this duty, a director must inform himself of, and disclose to shareholders, all material information reasonably available regarding a significant transaction. The duty of loyalty requires that a director acts in a manner he reasonably believes to be in the best interests of the corporation. He must not use his corporate position for personal gain or advantage. This duty prohibits self-dealing by a director and mandates that the best interest of the corporation and its shareholders take precedence over any interest possessed by a director, officer or controlling shareholder and not shared by the shareholders generally. In general, actions of a director are presumed to have been made on an informed basis, in good faith and in the honest belief that the action taken was in the best interests of the corporation. However, this presumption may be rebutted by evidence of a breach of one of the fiduciary duties. Should such evidence be presented concerning a transaction by a director, the director must prove the procedural fairness of the transaction, and that the transaction was of fair value to the corporation.
As a matter of Cayman Islands law, a director of a Cayman Islands company is in the position of a fiduciary with respect to the company and therefore it is considered that he owes the following duties to the company — a duty to act bona fide in the best interests of the company, a duty not to make a profit based on his position as director (unless the company permits him to do so), a duty not to put himself in a position where the interests of the company conflict with his personal interest or his duty to a third party, and a duty to exercise powers for the purpose for which such powers were intended. A director of a Cayman Islands company owes to the company a duty to act with skill and care. It was previously considered that a director need not exhibit in the performance of his duties a greater degree of skill than may reasonably be expected from a person of his knowledge and experience. However, English and Commonwealth courts have moved towards an objective standard with regard to the required skill and care and these authorities are likely to be followed in the Cayman Islands.
Shareholder Action by Written Consent. Under the Delaware General Corporation Law, a corporation may eliminate the right of shareholders to act by written consent by amendment to its certificate of incorporation. Cayman Islands law and our post-offering memorandum and articles of association provide that our shareholders may approve corporate matters by way of a unanimous written resolution signed by or on behalf of each shareholder who would have been entitled to vote on such matter at a general meeting without a meeting being held.
Shareholder Proposals. Under the Delaware General Corporation Law, a shareholder has the right to put any proposal before the annual meeting of shareholders; provided it complies with the notice provisions in the governing documents. A special meeting may be called by the board of directors or any other person authorized to do so in the governing documents, but shareholders may be precluded from calling special meetings.
The Companies Act provides shareholders with only limited rights to requisition a general meeting, and does not provide shareholders with any right to put any proposal before a general meeting. However, these rights may be provided in a company’s articles of association. Our post-offering memorandum and articles of association allow any one or more of our shareholders holding shares which carry in aggregate not less than one-third of the total number of votes attaching to all issued and the outstanding shares of our company entitled to vote at general meetings to requisition an extraordinary general meeting of our shareholders, in which case our Board is obliged to convene an extraordinary general meeting and to put the resolutions so requisitioned to a vote at such meeting. Other than this right to requisition a shareholders’ meeting, our post-offering memorandum and articles of association do not provide our shareholders with any other right to put proposals before annual general meetings or extraordinary general meetings. As a Cayman Islands exempted company, we are not obliged by law to call shareholders’ annual general meetings.
Cumulative Voting. Under the Delaware General Corporation Law, cumulative voting for elections of directors is not permitted unless the corporation’s certificate of incorporation specifically provides for it. Cumulative voting potentially facilitates the representation of minority shareholders on a board of directors since it permits the minority shareholder to cast all the votes to which the shareholder is entitled on a single director, which increases the shareholder’s voting power with respect to electing such director. There are no prohibitions in relation to cumulative voting under the laws of the Cayman Islands but our post-offering memorandum and articles of association do not provide for cumulative voting. As a result, our shareholders are not afforded any less protections or rights on this issue than shareholders of a Delaware corporation.
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Removal of Directors. Under the Delaware General Corporation Law, a director of a corporation with a classified board may be removed only for cause with the approval of a majority of the issued and outstanding shares entitled to vote, unless the certificate of incorporation provides otherwise. Under our post-offering memorandum and articles of association, directors may be removed with or without cause, by an ordinary resolution of our shareholders. A director will also cease to be a director if he (i) becomes bankrupt or makes any arrangement or composition with his creditors; (ii) dies or is found to be or becomes of unsound mind; (iii) resigns his office by notice in writing; (iv) without special leave of absence from our Board, is absent from meetings of our Board for three consecutive meetings and our Board resolves that his office be vacated; or (v) is removed from office pursuant to any other provision of our articles of association.
Transactions with Interested Shareholders. The Delaware General Corporation Law contains a business combination statute applicable to Delaware corporations whereby, unless the corporation has specifically elected not to be governed by such statute by amendment to its certificate of incorporation, it is prohibited from engaging in certain business combinations with an “interested shareholder” for three years following the date that such person becomes an interested shareholder. An interested shareholder generally is a person or a group who or which owns or owned 15% or more of the target’s outstanding voting share within the past three years. This has the effect of limiting the ability of a potential acquirer to make a two-tiered bid for the target in which all shareholders would not be treated equally. The statute does not apply if, among other things, prior to the date on which such shareholder becomes an interested shareholder, the board of directors approves either the business combination or the transaction which resulted in the person becoming an interested shareholder. This encourages any potential acquirer of a Delaware corporation to negotiate the terms of any acquisition transaction with the target’s board of directors.
Cayman Islands law has no comparable statute. As a result, we cannot avail ourselves of the types of protections afforded by the Delaware business combination statute. However, although Cayman Islands law does not regulate transactions between a company and its significant shareholders, it does provide that such transactions must be entered into bona fide in the best interests of the company and not with the effect of constituting a fraud on the minority shareholders.
Dissolution; Winding up. Under the Delaware General Corporation Law, unless the board of directors approves the proposal to dissolve, dissolution must be approved by shareholders holding 100% of the total voting power of the corporation. Only if the dissolution is initiated by the board of directors may it be approved by a simple majority of the corporation’s outstanding shares. Delaware law allows a Delaware corporation to include in its certificate of incorporation a supermajority voting requirement in connection with dissolutions initiated by either an order of the courts of the Cayman Islands or by the board of directors.
Under Cayman Islands law, a company may be wound up by either an order of the courts of the Cayman Islands or by a special resolution of its members or, if the company is unable to pay its debts as they fall due, by an ordinary resolution of its members. The court has authority to order winding up in a number of specified circumstances including where it is, in the opinion of the court, just and equitable to do so.
Variation of Rights of Shares. Under the Delaware General Corporation Law, a corporation may vary the rights of a class of shares with the approval of a majority of the outstanding shares of such class, unless the certificate of incorporation provides otherwise. Under our post-offering memorandum and articles of association, if our share capital is divided into more than one class of shares, the rights attached to any such class may, subject to any rights or restrictions for the time being attached to any class, only be materially adversely varied with the consent in writing of the holders of at least two-thirds (2/3) of the issued shares of that class or with the sanction of a special resolution passed at a separate meeting of the holders of the shares of that class. The rights conferred upon the holders of the shares of any class issued with preferred or other rights shall not, subject to any rights or restrictions for the time being attached to the shares of that class, be deemed to be materially adversely varied by the creation, allotment or issue of further shares ranking pari passu with or subsequent to them or the redemption or purchase of any shares of any class by our company. The rights of the holders of shares shall not be deemed to be materially adversely varied by the creation or issue of shares with preferred or other rights including, without limitation, the creation of shares with enhanced or weighted voting rights.
Amendment of Governing Documents. Under the Delaware General Corporation Law, a corporation’s governing documents may be amended with the approval of a majority of the outstanding shares entitled to vote, unless the certificate of incorporation provides otherwise. Under the Companies Act and our post-offering memorandum and articles of association, our memorandum and articles of association may only be amended by a special resolution of our shareholders.
Rights of Non-resident or Foreign Shareholders. There are no limitations imposed by our post-offering memorandum and articles of association on the rights of non-resident or foreign shareholders to hold or exercise voting rights on our shares. In addition, there are no provisions in our post-offering memorandum and articles of association governing the ownership threshold above which shareholder ownership must be disclosed.
History of Securities Issuances
During the past three years, we have issued an aggregate of 15,645,750 Class A Ordinary Shares, as described below:
As of February 13, 2024, we have issued an aggregate of 62,583 Class A Ordinary Shares of a nominal or par value of US$0.001 each, comprising: (i) 16,649 Class A Ordinary Shares of a nominal or par value of US$0.001 each issued to 5 advisors in February 2024 in consideration for services provided to the Company pursuant to various agreements, (ii) 4,439 Class A Ordinary Shares of a nominal or par value of US$0.001 each issued to 22 employees pursuant to the provisions of the 2023 Employee Incentive Plan in February 2024, (iii) 170 Class A Ordinary Shares of a nominal or par value of US$0.001 each issued in January 2024 to one investor for a total consideration of S$100,000, (iv) 2,879 Class A Ordinary Shares of a nominal or par value of US$0.001 each issued in September 2023 and October 2023 to four investors for a total consideration of S$1,694,843, (v) a total of 935 Class A Ordinary Shares of a nominal or par value of US$0.001 each issued to three investors in July and August 2023 for a total consideration of S$550,000, (vi) 2,225 Class A Ordinary Shares of a nominal or par value of US$0.001 each issued to two investors on April 18, 2023 for a total consideration of S$1,250,000 pursuant to share subscription agreements, (vii) 11,631 Class A Ordinary Shares of a nominal or par value of US$0.001 each issued to three persons on May 8, 2022 pursuant to the capitalization of a shareholder loan of S$6,500,000, and (viii) 23,655 Class A Ordinary Shares of a nominal or par value of US$0.001 each issued to four investors on May 8, 2022 for a total consideration of S$13,220,000 pursuant to a share subscription agreement, among which 16,104 Class A Ordinary Shares of a nominal or par value of US$0.001 each held by one of the investors were subsequently repurchased by the Company in January 2023 for a consideration of S$9,000,000.
We believe that each of the issuances was exempt from registration pursuant to Section 4(2) of the Securities Act, regarding transactions not involving a public offering, or in reliance on Regulation S under the Securities Act regarding sales by an issuer in offshore transactions. None of the transactions involved an underwriter.
On February 14, 2024, shareholders’ resolutions were passed to authorize the sub-division of each of the Company’s issued and unissued shares into 250 Ordinary Shares such that the authorized share capital of the Company was changed from US$50,000 divided into 50,000,000 Ordinary Shares of a nominal or par value of US$0.001 each, comprising 25,000,000 Class A Ordinary Shares of a nominal or par value of US$0.001 each, and 25,000,000 Class B Ordinary Shares of a nominal or par value of US$0.001 each to US$50,000 divided into 12,500,000,000 Ordinary Shares of a nominal or par value of US$0.000004 each, comprising 6,250,000,000 Class A Ordinary Shares of a nominal or par value of US$0.000004 each, and 6,250,000,000 Class B Ordinary Shares of a nominal or par value of US$0.000004 each. Accordingly, the issued 62,583 Class A Ordinary Shares of a nominal or par value of US$0.001 each were divided into 15,645,750 Class A Ordinary Shares of a nominal or par value of US$0.000004 each.
Agreements with Shareholders
In connection with our previous fund raising, we have entered into a series of agreements with our investors since 2016 and in certain instances, some of our early shareholders are also parties to such agreements. These agreements provide for certain investors’ rights, including but not limited to information rights, rights of first refusal, preemptive rights, rights to appoint directors, co-sale rights, drag-along rights and contain provisions governing our board of directors and other corporate governance matters. Most of these agreements, along with such rights accorded to certain shareholders and the corporate governance provisions contained therein, will be terminated on the date of the Company’s listing on the Nasdaq Capital Market, except that we expect four agreements will survive the completion of this offering. The investors of these agreements owned approximately 3.5% of the Company’s issued and outstanding Class A Ordinary Shares and approximately 3.3% of the Company’s issued and outstanding Class B Ordinary Shares, which in total represented approximately 3.3% of the aggregate voting power in the Company as of the date of this prospectus. Below is a summary of key shareholders’ special rights provided by these agreements which will survive the completion of this offering:
Pre-emption rights. The investors have the right to participate in any new issues of securities pro rata to their shareholding percentage, and the right to acquire the Company’s shares which are proposed to be transferred, including the right to acquire any excess shares not accepted by other shareholders of the Company.
Co-sale rights. If any other shareholders sell his or her shares, the investors have the right to sell a pro rata proportion of the number of shares being sold by other shareholders on the same terms and same price.
Drag-along rights. If the holders of not less than two-thirds of the ordinary shares (including certain investors) agree to sell their shares, all remaining shareholders and option holders will be required to sell their shares to the same purchaser at the same price.
Grants of Options
We have granted options to purchase our Class A Ordinary Shares to certain of our employees of the Company and/or any of its subsidiaries, including all directors, advisors and consultants of the Company and its subsidiaries, with effect from March 27, 2023. On August 1 and December 18, 2023, we granted options to our employees to purchase a total of 4,439 Class A Ordinary Shares of a nominal or par value of US$0.001 each. On February 13, 2024, the Company issued 4,439 Class A Ordinary Shares of a nominal or par value of US$0.001 each to the holders of the options, pursuant to the provisions of the Plan. On February 14, 2024, the issued 4,439 Class A Ordinary Shares of a nominal or par value of US$0.001 each were divided into 1,109,750 Class A Ordinary Shares of a nominal or par value of US$0.000004 each. See “Management—2023 Employee Incentive Plan.”
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Shares Eligible For Future Sale
Upon completion of this offering, we will have 21,921,750 Class A Ordinary Shares outstanding, representing approximately 64.5% of our outstanding Ordinary Shares, assuming the underwriter does not exercise its over-allotment option. All of the Class A Ordinary Shares sold in this offering will be freely transferable by persons other than by our “affiliates” without restriction or further registration under the Securities Act. Sales of substantial amounts of the Class A Ordinary Shares in the public market could adversely affect prevailing market prices of the Class A Ordinary Shares. Prior to this offering, there has been no public market for our Class A Ordinary Shares. We have applied to list the Class A Ordinary Shares on the Nasdaq Capital Market, but we cannot assure you that a regular trading market will develop in the Class A Ordinary Shares. We do not expect that a trading market will develop for our Class A Ordinary Shares.
Lock-up Agreements
The Company, on behalf of itself and any successor entity, agrees that, without the prior written consent of the representative, it will not, for a period of 180 days after the date of this prospectus, (i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any notion or contract to sell, grant any option, right or warrant to purchase, lead, or otherwise transfer or dispose of directly or indirectly, any share of capital share of the Company or any securities convertible into or exercisable or exchangeable for shares of capital share of the Company; (ii) file or caused to be filed any registration statement with the SEC relating to the offering of any shares of capital share of the Company of any securities convertible into or exercisable or exchangeable for shares of capital shares of the company; (iii) complete any offering of debt securities of the Company, other than entering into a line of credit with a traditional bank or (iv) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of capital share of the Company, whether any such transaction described in clause (i), (ii), (iii) or (iv) above is to be settled by delivery of shares of capital share of the Company or such other securities, in such or otherwise.
Our directors, executive officers and shareholders have agreed, subject to limited exceptions, not to offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any shares of capital stock of the Company or any securities convertible into or exercisable or exchangeable for shares of capital stock of the Company, that transfers, in whole or in part, any of the economic consequences of ownership of our Class A Ordinary Shares or such other securities for a period of 180 days after the date of this prospectus, without the prior written consent of the representative. See “Underwriting.”
Other than this offering, we are not aware of any plans by any significant shareholders to dispose of significant numbers of the Class A Ordinary Shares. However, one or more existing shareholders or owners of securities convertible or exchangeable into or exercisable for the Class A Ordinary Shares may dispose of significant numbers of the Class A Ordinary Shares in the future. We cannot predict what effect, if any, future sales of the Class A Ordinary Shares, or the availability of Class A Ordinary Shares for future sale, will have on the trading price of the Class A Ordinary Shares from time to time. Sales of substantial amounts of the Class A Ordinary Shares in the public market, or the perception that these sales could occur, could adversely affect the trading price of the Class A Ordinary Shares.
Rule 144
All of our Class A Ordinary Shares that will be issued and outstanding upon the completion of this offering, other than those Ordinary Shares sold in this offering, are “restricted securities” as that term is defined in Rule 144 under the Securities Act and may be sold publicly in the United States only if they are subject to an effective registration statement under the Securities Act or pursuant to an exemption from the registration requirement such as those provided by Rule 144 and Rule 701 promulgated under the Securities Act. In general, beginning 90 days after the date of this prospectus, a person (or persons whose shares are aggregated) who at the time of a sale is not, and has not been during the three months preceding the sale, an affiliate of ours and has beneficially owned our restricted securities for at least six months will be entitled to sell the restricted securities without registration under the Securities Act, subject only to the availability of current public information about us, and will be entitled to sell restricted securities beneficially owned for at least one year without restriction. Persons who are our affiliates and have beneficially owned our restricted securities for at least six months may sell a number of restricted securities within any three-month period that does not exceed the greater of the following:
● | 1% of the then issued and outstanding Ordinary Shares of the same class which immediately after the completion of this offering will equal Class A Ordinary Shares, assuming the underwriter does not exercise its over-allotment option; or |
● | the average weekly trading volume of our Class A Ordinary Shares of the same class during the four calendar weeks preceding the date on which notice of the sale is filed with the SEC. |
Sales by our affiliates under Rule 144 are also subject to certain requirements relating to manner of sale, notice and the availability of current public information about us.
Rule 701
In general, under Rule 701 of the Securities Act as currently in effect, each of our employees, consultants or advisors who purchases our Class A Ordinary Shares from us in connection with a compensatory stock plan or other written agreement executed prior to the completion of this offering is eligible to resell those Class A Ordinary Shares in reliance on Rule 144, but without compliance with some of the restrictions, including the holding period, contained in Rule 144. However, the Rule 701 shares would remain subject to lock-up arrangements and would only become eligible for sale when the lock-up period expires.
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The following summary of the material Cayman Islands, Singapore and U.S. federal income tax consequences of an investment in the Class A Ordinary Shares is based upon laws and relevant interpretations thereof in effect as of the date of this registration statement, all of which are subject to change. This summary does not deal with all possible tax consequences relating to an investment in the Class A Ordinary Shares, such as the tax consequences under U.S. state and local tax laws or under the tax laws of jurisdictions other than the Cayman Islands, Singapore and the United States. To the extent that the discussion relates to matters of Cayman Islands tax law, it represents the opinion of Harney Westwood & Riegels Singapore LLP, our Cayman Islands counsel.
Cayman Islands Taxation
The Cayman Islands currently levies no taxes on individuals or corporations based upon profits, income, gains or appreciation and there is no taxation in the nature of inheritance tax or estate duty. There are no other taxes likely to be material to us levied by the government of the Cayman Islands except for stamp duties which may be applicable on instruments executed in, or, after execution, brought within the jurisdiction of the Cayman Islands. The Cayman Islands is a party to a double tax treaty entered with the United Kingdom in 2010 but is otherwise not party to any double tax treaties that are applicable to any payments made to or by our company. There are no exchange control regulations or currency restrictions in the Cayman Islands. Pursuant to Section 6 of the Tax Concessions Act (Revised) of the Cayman Islands, our Company has obtained an undertaking from the Financial Secretary: (a) that no law which is enacted in the Cayman Islands imposing any tax to be levied on profits, income, gains or appreciations shall apply to our Company or its operations; and (b) that the aforesaid tax or any tax in the nature of estate duty or inheritance tax shall not be payable on or in respect of the shares, debentures or other obligations of our Company or by way of withholding in whole or in part of any relevant payment as defined in section 6(3) of the Tax Concessions Act (Revised) of the Cayman Islands. The undertaking for our Company is for a period of 20 years from June 27, 2023.
Payments of dividends and capital in respect of our Class A Ordinary Shares will not be subject to taxation in the Cayman Islands and no withholding will be required on the payment of a dividend or capital to any holder of our Class A Ordinary Shares, nor will gains derived from the disposal of our Class A Ordinary Shares be subject to Cayman Islands income or corporation tax.
No stamp duty is payable in the Cayman Islands in respect of the issue of our Class A Ordinary Shares or on an instrument of transfer in respect of our Class A Ordinary Shares so long as the instrument of transfer is not executed in, brought to, or produced before a court of the Cayman Islands.
Singapore Tax Considerations
Dividends Distributions
Under the one-tier corporate tax system which currently applies to all Singapore tax resident companies, tax on corporate profits is final, and dividends paid by a Singapore tax resident company will be income tax exempt in the hands of a shareholder, whether or not the shareholder is a company or an individual and whether or not the shareholder is a Singapore tax resident.
A company is regarded as tax resident in Singapore if the control and management of the company’s business is exercised in Singapore. Control and management is defined as the making of decisions on strategic matters, such as those concerning the company’s policy and strategy. Generally, the location of the company’s board of directors meetings where strategic decisions are made determines where the control and management is exercised. However, under certain scenarios, holding board meetings in Singapore may not be sufficient and other factors will be considered to determine if the control and management of the business is indeed exercised in Singapore.
Foreign shareholders are advised to consult their own tax advisers to take into account the tax laws of their respective countries of residence and the existence of any agreement for the avoidance of double taxation which their country of residence may have with Singapore.
Gains upon Disposal of Shares
Gains arising from the disposal of the shares may be construed to be of an income nature and subject to Singapore income tax, especially if they arise from activities which may be regarded as the carrying on of a trade or business in Singapore. Such gains may also be considered income in nature, even if they do not arise from an activity in the ordinary course of trade or business or an ordinary incident of some other business activity, if the shares were purchased with the intention or purpose of making a profit by sale rather than holding for long-term investment purposes in Singapore. Conversely, gains from disposition of the shares in Singapore, if considered as capital gains rather than income by the Inland Revenue Authority of Singapore (“IRAS”), are not taxable in Singapore to the extent that they do not fall within the ambit of the new section 10L of the Income Tax Act 1947 (“ITA”), which came into effect on January 1, 2024.
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There are no specific laws or regulations which deal with the characterization of whether a gain is income or capital in nature. The characterization of gains arising from the sale of our shares will depend primarily on the facts and circumstances (commonly referred to as the “badges of trade”) of each shareholder.
Subject to section 10L of the ITA and specified exceptions, Section 13W of the Income Tax Act 1947 of Singapore, or “SITA”, provides for certainty on the non-taxability of gains derived by a corporate taxpayer from the disposal of ordinary shares during the period from June 1, 2012 to December 31, 2027 (both dates inclusive) where:
● | the divesting company had legally and beneficially held a minimum shareholding of 20% of the ordinary shares of the company whose shares are being disposed; and | |
● | the divesting company had maintained the minimum 20% shareholding for a continuous period of at least 24 months immediately prior to the disposal. |
The above-mentioned “safe harbor rules” prescribed under Section 13W of SITA will not apply to a divesting company under certain scenarios. These include, but are not limited to, the divesting company that is in the business of trading or holding Singapore immovable properties (excluding property development), where the shares are not listed on a stock exchange in Singapore or elsewhere, the divesting company whose gains or profits from the disposal of ordinary shares are included as part of its income, disposal of shares by a partnership, limited partnership or limited liability partnership where one or more of the partners is a company or are companies, etc.
Under section 10L of the ITA, gains received in Singapore by an entity of a relevant group from the sale or disposal of any movable or immovable property outside Singapore will be treated as income chargeable to tax under section 10(1)(g) of the ITA under certain circumstances. Any registered shares, equity securities or securities will be deemed to be located outside Singapore if the register or principal register (if there is more than one register) is located outside Singapore regardless of where the company is incorporated. If our shares are deemed to be foreign assets, gains from their disposal will be subject to tax if an entity of a relevant group (other than an excluded entity) disposed of our shares on or after January 1, 2024. An entity is a member of a group of entities if its assets, liabilities, income, expenses and cash flows are (a) included in the consolidated financial statements of the parent entity of the group; or (b) excluded from the consolidated financial statements of the parent entity of the group solely on size or materiality grounds or on the grounds that the entity is held for sale. A group is a relevant group if (a) the entities of the group are not all incorporated, registered or established in Singapore; or (b) any entity of the group has a place of business outside Singapore. An excluded entity is defined in section 10L of the ITA to include a pure equity-holding company or any other entity without adequate economic substance in Singapore taking into account factors enumerated in section 10L of the ITA.
Investors are advised to consult their own tax advisors on the applicable tax treatment if they received gains in Singapore from the disposal of our shares.
Adoption of FRS 39, FRS 109 or SFRS(I) 9 for Singapore Income Tax Purposes
Shareholders who apply, or who are required to apply, the Singapore Financial Reporting Standard 39 –Financial Instruments: Recognition and Measurement, or FRS 39; the Singapore Financial Reporting Standard 109 – Financial Instruments, or FRS 109; or the Singapore Financial Reporting Standard (International) 9 – Financial Instruments, or SFRS(I) 9, may for the purposes of Singapore income tax be required to recognize gains or losses in respect of financial instruments (not being gains or losses in the nature of capital) in accordance with FRS 39, FRS 109 or SFRS(I) 9 (as the case may be) (as modified by the applicable provisions of Singapore income tax law) even where no sale or disposal of the shares is made.
Section 34A of the SITA provides for the tax treatment for financial instruments in accordance with FRS 39 (subject to certain exceptions and “opt-out” provisions) for taxpayers who are required to comply with FRS 39 for financial reporting purposes. The IRAS has also issued a circular entitled “Income Tax Implications Arising from the Adoption of FRS 39 — Financial Instruments: Recognition and Measurement”. FRS 109 or SFRS(I) 9 (as the case may be) is mandatorily effective for annual periods beginning on or after January 1, 2018, replacing FRS 39. Section 34AA of the SITA requires taxpayers who comply or who are required to comply with FRS 109 or SFRS(I) 9 (as the case may be) for financial reporting purposes to calculate their profit, loss or expense for Singapore income tax purposes in respect of financial instruments in accordance with FRS 109 or SFRS(I) 9 (as the case may be), subject to certain exceptions. The IRAS has also issued a circular entitled “Income Tax: Income Tax Treatment Arising from Adoption of FRS 109 — Financial Instruments”.
Shareholders who may be subject to the above-mentioned tax treatments, including under Sections 34A or 34AA of the SITA, should consult their accounting and tax advisers regarding the Singapore income tax consequences of their acquisition, holding and disposal of the shares.
Corporate Income Tax
Companies that carry on business in Singapore are subject to a flat rate of 17% of the companies’ chargeable income. Chargeable income refers to the companies’ taxable income (after deducting tax-allowable expenses).
Goods and Services Tax
The sale of the shares by a GST-registered investor belonging in Singapore for GST purposes to another person belonging in Singapore is an exempt supply not subject to GST. Any input GST (for example, GST on brokerage) incurred by the GST-registered investor in connection with the making of an exempt supply is generally not recoverable from the Singapore Comptroller of GST and will become an additional cost to the investor unless the investor satisfies certain conditions prescribed under the GST legislation or satisfies certain GST concessions.
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Where the shares are sold by a GST-registered investor in the course of or furtherance of a business carried on by such investor contractually to and for the direct benefit of a person belonging outside Singapore, the sale should generally, subject to satisfaction of certain conditions, be considered a taxable supply subject to GST at 0%. Any input GST (for example, GST on brokerage) incurred by the GST-registered investor in making such a supply in the course of or furtherance of a business may be fully recoverable from the Singapore Comptroller of GST. Investors should seek their own tax advice on the recoverability of GST incurred on expenses in connection with the purchase and sale of the shares.
Services consisting of arranging, brokering, underwriting or advising on the issue, allotment or transfer of ownership of the shares rendered by a GST-registered person to an investor belonging in Singapore for GST purposes in connection with the investor’s purchase, sale or holding of the shares will be subject to GST at the standard rate of 9% with effect from January 1, 2024. Similar services rendered by a GST registered person contractually to an investor belonging outside Singapore and for the direct benefit of such an investor or a GST registered person belonging in Singapore should generally, subject to the satisfaction of certain conditions, be subject to GST at 0%.
Stamp Duty
Where our shares evidenced in certificated forms are acquired in Singapore, stamp duty is payable on the instrument of their transfer at the rate of 0.2% of the consideration or market value of our shares, whichever is higher.
Where an instrument of transfer (including electronic documents) is executed outside Singapore, stamp duty may be payable if the instrument of transfer is executed outside Singapore and is received in Singapore. The stamp duty is borne by the purchaser unless there is an agreement to the contrary. An electronic instrument that is executed outside Singapore is considered received in Singapore if (a) it is retrieved or accessed by a person in Singapore; (b) an electronic copy of it is stored on a device (including a computer) and brought into Singapore; or (c) an electronic copy of it is stored on a computer in Singapore.
On the basis that any transfer instruments in respect of our shares traded on the NASDAQ are executed outside Singapore through our transfer agent and share registrar in the United States for registration in our branch share register maintained in the United States, no stamp duty would be payable in Singapore on such transfers to the extent that the instruments of transfer (including electronic documents) are not received in Singapore.
As the relevant deeming provisions under section 60F of the Singapore Stamp Duty Act 1929 of Singapore are quite broad, registered shareholders of our shares may wish to note that electronic document executed outside Singapore may still be deemed to be received in Singapore if the branch records is accessed/retried in Singapore. As it may not be practical to anticipate the circumstances where an instrument may be considered received in Singapore, investors should consult their tax advisors regarding the particular Singapore stamp duty implications for them.
United States Federal Income Tax Considerations
The following discussion is a summary of U.S. federal income tax considerations generally applicable to U.S. Holders (as defined below) of the ownership and disposition of Class A Ordinary Shares by U.S. Holders that acquire the Class A Ordinary Shares in this offering and hold the Class A Ordinary Shares as capital assets within the meaning of Section 1221 of the U.S. Internal Revenue Code of 1986, as amended (the “Code”). This summary is based on U.S. federal income tax laws in effect as of the date of this offering circular, including the Code and U.S. Treasury regulations, as in effect or proposed as of the date of this offering circular, and judicial and administrative interpretations thereof available on or before such date. All of the foregoing authorities are subject to change, which could apply retroactively and could affect the tax consequences described below. There can be no assurance that the Internal Revenue Service or a court will not take a contrary position to this summary.
This summary does not purport to be a comprehensive discussion of all the tax considerations that may be relevant to a particular investor’s decision to purchase, hold or dispose of Class A Ordinary Shares. Moreover, this summary does not address the Medicare tax on net investment income, alternative minimum tax, non-income tax (such as the gift and estate tax) or any state, local, and non-U.S. tax considerations, relating to the ownership and disposition of Class A Ordinary Shares. The following summary does not address all aspects of U.S. federal income taxation that may be important to particular investors in light of their individual circumstances or to persons in special tax situations such as:
● | certain financial institutions; | |
● | insurance companies; | |
● | pension plans; | |
● | cooperatives; | |
● | a mutual fund; | |
● | regulated investment companies; | |
● | real estate investment trusts; | |
● | a broker; | |
● | dealers in securities or currencies; | |
● | an individual retirement or other tax-deferred account; | |
● | traders that elect to use a mark-to-market method of accounting; | |
● | certain former U.S. citizens or long-term residents; | |
● | tax-exempt entities; | |
● | holders who acquire their Class A Ordinary Shares pursuant to any employee share option or otherwise as compensation; | |
● | an accrual method taxpayer subject to special tax accounting rules as a result of its use of financial statements; | |
● | an investor who is a U.S. expatriate, former U.S. citizen or former long term resident of the United States; | |
● | persons holding Class A Ordinary Shares as part of a straddle, hedging, conversion or integrated transaction; | |
● | persons holding Class A Ordinary Shares in connection with a trade or business outside the United States; | |
● | persons subject to special tax accounting rules as a result of their use of financial statements; | |
● | a controlled foreign corporation; | |
● | a passive foreign investment company; | |
● | U.S. Holders (as defined below) that have a functional currency other than the U.S. dollar; | |
● | persons that actually or constructively own 10% or more of (i) the total combined voting power of all classes of our voting Shares or (ii) the total value of all classes of our Shares; or | |
● | partnerships or other pass-through entities for U.S. federal income tax purposes, or persons holding the Class A Ordinary Shares through such entities, |
all of whom may be subject to tax rules that differ significantly from those discussed below.
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General
For purposes of this discussion, a “U.S. Holder” is a beneficial owner of the Class A Ordinary Shares that is, for U.S. federal income tax purposes:
● | an individual who is a citizen or resident of the United States; |
● | a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) created in, or organized under the law of, the U.S. or any state thereof or the District of Columbia; |
● | an estate the income of which is includible in gross income for U.S. federal income tax purposes regardless of its source; or |
● | a trust (A) the administration of which is subject to the primary supervision of a U.S. court and which has one or more U.S. persons who have the authority to control all substantial decisions of the trust or (B) that has otherwise validly elected to be treated as a U.S. person under the Code. |
If a partnership (or other entity treated as a partnership for U.S. federal income tax purposes) is a beneficial owner of the Class A Ordinary Shares, the tax treatment of a partner in the partnership will generally depend upon the status of the partner as a U.S. Holder, as described above, and the activities of the partnership. Partnerships holding the Class A Ordinary Shares and partners in such partnerships are urged to consult their tax advisors as to the particular U.S. federal income tax consequences of an investment in the Class A Ordinary Shares.
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Dividends
Any cash distributions paid on the Class A Ordinary Shares (including the amount of any Singapore tax withheld) out of our current or accumulated earnings and profits, as determined under U.S. federal income tax principles, will generally be includible in the gross income of a U.S. Holder as dividend income on the day actually or constructively received by the U.S. Holder, in the case of Class A Ordinary Shares. Because we do not intend to determine our earnings and profits on the basis of U.S. federal income tax principles, any distribution we pay will generally be treated as a “dividend” for U.S. federal income tax purposes. Dividends received on the Class A Ordinary Shares will not be eligible for the dividends-received deduction allowed to corporations in respect of dividends received from U.S. corporations.
Individuals and other non-corporate U.S. Holders will be subject to tax at the lower capital gain tax rate applicable to “qualified dividend income”; provided that certain conditions are satisfied, including that (1) the Class A Ordinary Shares on which the dividends are paid are readily tradable on an established securities market in the U.S., (2) we are neither a PFIC nor treated as such with respect to a U.S. Holder (as discussed below) for the taxable year in which the dividend is paid and the preceding taxable year, and (3) certain holding period and other requirements are met.
For U.S. foreign tax credit purposes, dividends paid on the Class A Ordinary Shares generally will be treated as income from non-U.S. sources and generally will constitute passive category income. A U.S. Holder who does not elect to claim a foreign tax credit for foreign tax withheld may instead claim a deduction for U.S. federal income tax purposes, in respect of such withholding, but only for a year in which such holder elects to do so for all creditable foreign income taxes. The rules governing the foreign tax credit are complex and U.S. Holders are urged to consult their tax advisors regarding the availability of the foreign tax credit under their particular circumstances.
Sale or Other Disposition
A U.S. Holder will generally recognize capital gain or loss upon a sale or other disposition of Class A Ordinary Shares, in an amount equal to the difference between the amount realized and the U.S. Holder’s adjusted tax basis, determined for federal income tax purposes, in such Class A Ordinary Shares, each amount determined in U.S. dollars. Any capital gain or loss will be long-term capital gain or loss if the Class A Ordinary Shares have been held for more than one year and will generally be U.S. source gain or loss for U.S. foreign tax credit purposes. The deductibility of a capital loss may be subject to limitations, particularly with regard to shareholders who are individuals. Each U.S. Holder is advised to consult its tax advisor regarding the tax consequences if a foreign tax is imposed on a disposition of our Class A Ordinary Shares, including the availability of the foreign tax credit under its particular circumstances.
A U.S. Holder that receives Singapore dollars or another currency other than U.S. dollars on the disposition of our Class A Ordinary Shares will realize an amount equal to the U.S. dollar value of the non-U.S. currency received at the spot rate on the date of sale (or, if the Class A Ordinary Shares are traded on a recognized exchange and in the case of cash basis and electing accrual basis U.S. Holders, the settlement date). An accrual basis U.S. Holder that does not elect to determine the amount realized using the spot rate on the settlement date will recognize foreign currency gain or loss equal to the difference between the U.S. dollar value of the amount received based on the spot market exchange rates in effect on the date of sale or other disposition and the settlement date. A U.S. Holder will have a tax basis in the currency received equal to the U.S. dollar value of the currency received on the settlement date. Any gain or loss on a subsequent disposition or conversion of the currency will be United States source ordinary income or loss.
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Passive Foreign Investment Company Considerations
For United States federal income tax purposes, a non-United States corporation, such as our Company, will be treated as a “passive foreign investment company,” or “PFIC” if, in the case of any particular taxable year, either (a) 75% or more of our gross income for such year consists of certain types of “passive” income or (b) 50% or more of the value of our assets (generally determined on the basis of a quarterly average) during such year produce or are held for the production of passive income. Based upon our current and expected income and assets (including goodwill and taking into account the expected proceeds from this offering) and the expected market price of our Class A Ordinary Shares following this offering, we do not expect to be a PFIC for the current taxable year or the foreseeable future.
However, while we do not expect to be or become a PFIC, no assurance can be given in this regard because the determination of whether we are or will become a PFIC for any taxable year is a fact-intensive inquiry made annually that depends, in part, upon the composition and classification of our income and assets. Fluctuations in the market price of our Class A Ordinary Shares may cause us to be or become a PFIC for the current or subsequent taxable years because the value of our assets for the purpose of the asset test, including the value of our goodwill and other unbooked intangibles, may be determined by reference to the market price of our Class A Ordinary Shares (which may be volatile). The composition of our income and assets may also be affected by how, and how quickly, we use our liquid assets and the cash raised in this offering. It is also possible that the Internal Revenue Service may challenge our classification of certain income or assets for purposes of the analysis set forth in subparagraphs (a) and (b), above or the valuation of our goodwill and other unbooked intangibles, which may result in our company being or becoming a PFIC for the current or future taxable years.
A U.S. Holder that holds stock in a non-U.S. corporation during any taxable year in which the corporation is treated as a PFIC is subject to special tax rules with respect to (a) any gain realized on the sale, exchange or other disposition of the stock and (b) any “excess distribution” by the corporation to the holder, unless the holder elects to treat the PFIC as a “qualified electing fund” (“QEF”) or makes a “mark-to-market” election, each as discussed below. An “excess distribution” is that portion of a distribution with respect to PFIC stock that exceeds 125% of the average of such distributions over the preceding three-year period or, if shorter, the U.S. Holder’s holding period for its shares. Excess distributions and gains on the sale, exchange or other disposition of stock of a corporation which was a PFIC at any time during the U.S. Holder’s holding period are allocated ratably to each day of the U.S. Holder’s holding period. Amounts allocated to the taxable year in which the disposition occurs and amounts allocated to any period in the shareholder’s holding period before the first day of the first taxable year that the corporation was a PFIC will be taxed as ordinary income (rather than capital gain) earned in the taxable year of the disposition. Amounts allocated to each of the other taxable years in the U.S. Holder’s holding period are not included in gross income for the year of the disposition, but are subject to a special tax (equal to the highest ordinary income tax rates in effect for those years, and increased by an interest charge at the rate applicable to income tax deficiencies) that is added to the tax otherwise due for the taxable year in which the disposition occurs. The tax liability for amounts allocated to years before the year of disposition or “excess distribution” cannot be offset by any net operating losses for such years, and gains (but not losses) realized on the sale of the Class A Ordinary Shares cannot be treated as capital, even if a U.S. Holder held such Class A Ordinary Shares as capital assets. The preferential U.S. federal income tax rates for dividends and long-term capital gain of individual U.S. Holders (as well as certain trusts and estates) would not apply, and special rates would apply for calculating the amount of the foreign tax credit with respect to excess distributions.
If a corporation is a PFIC for any taxable year during which a U.S. Holder holds shares in the corporation, then the corporation generally will continue to be treated as a PFIC with respect to the holder’s shares, even if the corporation no longer satisfies either the passive income or passive asset tests described above, unless the U.S. Holder terminates this deemed PFIC status by electing to recognise gain, which will be taxed under the excess distribution rules as if such shares had been sold on the last day of the last taxable year for which the corporation was a PFIC.
If we are a PFIC for any taxable year during which a U.S. Holder holds our Class A Ordinary Shares and we own any equity in a non-United States entity that is also a PFIC, or a lower-tier PFIC, such U.S. Holder would be treated as owning a proportionate amount (by value) of the shares of the lower-tier PFIC for purposes of the application of these rules. U.S. Holders are advised to consult their tax advisors regarding the application of the PFIC rules to any of the entities in which we may own equity.
The excess distribution rules may be avoided if a U.S. Holder makes a QEF election effective beginning with the first taxable year in the holder’s holding period in which the corporation is a PFIC. A U.S. Holder that makes a QEF election is required to include in income its pro rata share of the PFIC’s ordinary earnings and net capital gain as ordinary income and long-term capital gain, respectively, subject to a separate election to defer payment of taxes, which deferral is subject to an interest charge. A U.S. Holder whose QEF election is effective after the first taxable year during the holder’s holding period in which the corporation is a PFIC will continue to be subject to the excess distribution rules for years beginning with such first taxable year for which the QEF election is effective.
In general, a U.S. Holder makes a QEF election by attaching a completed IRS Form 8621 to a timely filed (taking into account any extensions) U.S. federal income tax return for the year beginning with which the QEF election is to be effective. In certain circumstances, a U.S. Holder may be able to make a retroactive QEF election. A QEF election can be revoked only with the consent of the IRS. In order for a U.S. Holder to make a valid QEF election, the corporation must annually provide or make available to the holder certain information. Our Company does not intend to provide to U.S. Holders the information required to make a valid QEF election and our Company currently makes no undertaking to provide such information. Accordingly, it is currently anticipated that a U.S. Holder will not be able to avoid the special tax rules described above by making the QEF election.
As an alternative to making a QEF election, a U.S. Holder may make a “mark-to-market” election with respect to its PFIC shares if the shares meet certain minimum trading requirements. If a U.S. Holder makes a valid mark-to-market election for the first tax year in which such holder holds (or is deemed to hold) stock in a corporation and for which such corporation is determined to be a PFIC, such holder generally will not be subject to the PFIC rules described above in respect of its stock. Instead, a U.S. Holder that makes a mark-to-market election will be required to include in income each year an amount equal to the excess, if any, of the fair market value of the shares that the holder owns as of the close of the taxable year over the holder’s adjusted tax basis in the shares. The U.S. Holder will be entitled to a deduction for the excess, if any, of the holder’s adjusted tax basis in the shares over the fair market value of the shares as of the close of the taxable year; provided, however, that the deduction will be limited to the extent of any net mark-to-market gains with respect to the shares included by the U.S. Holder under the election for prior taxable years. The U.S. Holder’s basis in the shares will be adjusted to reflect the amounts included or deducted pursuant to the election. Amounts included in income pursuant to a mark-to-market election, as well as gain on the sale, exchange or other taxable disposition of the shares, will be treated as ordinary income. The deductible portion of any mark-to-market loss, as well as loss on a sale, exchange or other disposition of shares to the extent that the amount of such loss does not exceed net mark-to-market gains previously included in income, will be treated as ordinary loss.
The mark-to-market election applies to the taxable year for which the election is made and all subsequent taxable years, unless the shares cease to meet applicable trading requirements (described below) or the IRS consents to its revocation. The excess distribution rules generally do not apply to a U.S. Holder for tax years for which a mark-to-market election is in effect. However, if a U.S. Holder makes a mark-to-market election for PFIC stock after the beginning of the holder’s holding period for the stock, a coordination rule applies to ensure that the holder does not avoid the tax and interest charge with respect to amounts attributable to periods before the election.
A mark-to-market election is available only if the shares are considered “marketable” for these purposes. Shares will be marketable if they are regularly traded on a national securities exchange that is registered with the Securities and Exchange Commission or on a non-U.S. exchange or market that the IRS determines has rules sufficient to ensure that the market price represents a legitimate and sound fair market value. For these purposes, shares will be considered regularly traded during any calendar year during which they are traded, other than in de minimis quantities, on at least 15 days during each calendar quarter. Any trades that have as their principal purpose meeting this requirement will be disregarded. Although we have applied for the listing of our Class A Ordinary Shares on the Nasdaq, we cannot guarantee that our listing will be approved. Furthermore, we cannot guarantee that, once listed, our Class A Ordinary Shares will continue to be listed and regularly traded on such exchange. Each U.S. Holder should ask its own tax advisor whether a mark-to-market election is available or desirable, including as to whether the Class A Ordinary Shares are considered marketable for these purposes.
Because a mark-to-market election generally cannot be made for any lower-tier PFICs that a PFIC may own, a U.S. Holder who makes a mark-to-market election with respect to our Class A Ordinary Shares may continue to be subject to the general PFIC rules with respect to such U.S. Holder’s indirect interest in any of our non-United States subsidiaries if any of them is a PFIC.
A U.S. Holder of PFIC stock must generally file an IRS Form 8621 annually. A U.S. Holder must also provide such other information as may be required by the U.S. Treasury Department if the U.S. Holder (i) receives certain direct or indirect distributions from a PFIC, (ii) recognises gain on a direct or indirect disposition of PFIC stock, or (iii) makes certain elections (including a QEF election or a mark-to-market election) reportable on IRS Form 8621.
U.S. Holders are urged to consult their tax advisors as to our Company’s status as a PFIC, and, if our Company is treated as a PFIC, as to the effect on them of, and the reporting requirements with respect to, the PFIC rules and the desirability of making, and the availability of, either a QEF election or a mark-to-market election with respect to our Class A Ordinary Shares. Our Company provides no advice on taxation matters.
Information with Respect to Foreign Financial Assets
In addition, certain U.S. Holders may be subject to certain reporting obligations with respect to Class A Ordinary Shares if the aggregate value of these and certain other “specified foreign financial assets” exceeds $50,000. If required, this disclosure is made by filing Form 8938 with the IRS. Significant penalties can apply if U.S. Holders are required to make this disclosure and fail to do so. In addition, a U.S. Holder should consider the possible obligation for online filing of a FinCEN Report 114—Foreign Bank and Financial Accounts Report as a result of holding Class A Ordinary Shares. U.S. Holders are thus encouraged to consult their U.S. tax advisors with respect to these and other reporting requirements that may apply to their acquisition of Class A Ordinary Shares.
Information Reporting and Backup Withholding
In general, information reporting requirements will apply to distributions made on our Class A Ordinary Shares within the U.S. to a non-corporate U.S. Holder and to the proceeds from the sale, exchange, redemption or other disposition of Class A Ordinary Shares by a non-corporate U.S. Holder to or through a U.S. office of a broker. Payments made (and sales or other dispositions effected at an office) outside the U.S. will be subject to information reporting in limited circumstances.
In addition, backup withholding of U.S. federal income tax may apply to such amounts if the U.S. Holder fails to provide an accurate taxpayer identification number (or otherwise establishes, in the manner provided by law, an exemption from backup withholding) or to report dividends required to be shown on the U.S. Holder’s U.S. federal income tax returns.
Backup withholding is not an additional income tax, and the amount of any backup withholding from a payment to a U.S. Holder will be allowed as credit against the U.S. Holder’s U.S. federal income tax liability provided that the appropriate returns are filed.
You should consult your own tax advisor as to the qualifications for exemption from backup withholding and the procedures for obtaining the exemption.
The foregoing does not purport to be a complete analysis of the potential tax considerations relating to the Placement, and is not tax advice. Prospective investors should consult their own tax advisors as to the particular tax considerations applicable to them relating to the purchase, ownership and disposition of the Class A Ordinary Shares, including the applicability of the U.S. federal, state and local tax laws or non-tax laws, non-U.S. tax laws, and any changes in applicable tax laws and any pending or proposed legislation or regulations.
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In connection with this offering, we will enter into an underwriting agreement with Network 1 Financial Securities, Inc., as representative of the underwriters, or the representative, in this offering. The representative may retain other brokers or dealers to act as sub-agents or selected dealers on their behalf in connection with this offering. The underwriters have agreed to purchase from us, on a firm commitment basis, the number of Class A Ordinary Shares set forth opposite its name below, at the offering price less the underwriting discounts set forth on the cover page of this prospectus:
Name of Underwriters | Number of Class A Ordinary Shares |
|||
Network 1 Financial Securities, Inc. | ||||
Total |
The underwriters are committed to purchase all the Class A Ordinary Shares offered by this prospectus if they purchase any Class A Ordinary Shares. The underwriters are not obligated to purchase the Class A Ordinary Shares covered by the underwriter’s over-allotment option to purchase Class A Ordinary Shares as described below. The underwriters are offering the Class A Ordinary Shares, subject to prior sale, when, as, and if issued to and accepted by them, subject to approval of legal matters by their counsel and other conditions contained in the underwriting agreement, such as the receipt by the underwriters of officer’s certificates and legal opinions. The underwriters reserve the right to withdraw, cancel, or modify offers to the public and to reject orders in whole or in part. The underwriter is not underwriting the shares registered for the Selling Shareholders.
Pricing of this Offering
Prior to this offering, there has been no public market for our Class A Ordinary Shares. The offering price for our Class A Ordinary Shares will be determined through negotiations between us and the representative. Among the factors to be considered in these negotiations will be prevailing market conditions, our financial information, market valuations of other companies that we and the representative believe to be comparable to us, estimate of our business potential and earning prospects, the present state of our development, and other factors deemed relevant. The offering price of our Class A Ordinary Shares in this offering does not necessarily bear any direct relationship to the assets, operations, book value, or other established criteria of value of our company.
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Over-Allotment Option
We have granted to the underwriters a 45-day option to purchase up to an aggregate of additional Class A Ordinary Shares (equal to 15% of the number of Class A Ordinary Shares sold in the offering) at the offering price per Class A Ordinary Share less underwriting discounts and commissions. The underwriters may exercise this option for 45 days from the date of closing of this offering solely to cover sales of Class A Ordinary Shares by the underwriters in excess of the total number of Class A Ordinary Shares set forth in the table above. If any of the additional Class A Ordinary Shares are purchased, the underwriters will offer the additional Class A Ordinary Shares at $ per Class A Ordinary Share, the offering price of each Class A Ordinary Share.
Discounts and Expenses
The underwriting discounts for the shares and the over-allotment shares are equal to 7.5% of the offering price.
The following table shows the price per share and total offering price, underwriting discounts, and proceeds before expenses to us. The total amounts are shown assuming both no exercise and full exercise of the over-allotment option.
Total | ||||||||||||
Per Share | No Exercise of Over-allotment Option |
Full Exercise of Over-allotment Option |
||||||||||
IPO price | $ | $ | $ | |||||||||
Underwriting discounts to be paid by us(1) | $ | $ | $ | |||||||||
Proceeds to us, before expenses | $ | $ | $ | |||||||||
Proceeds to the Selling Shareholders, before expenses | $ | $ | $ |
(1) | This only includes the proceeds of the sale of Class A ordinary shares underwritten by the underwriter. We will not receive any proceeds from the sale of Class A Ordinary Shares by the Selling Shareholders. |
We have agreed to pay to the underwriters, by deduction from the gross proceeds of the offering contemplated herein, a non-accountable expense allowance equal to one percent (1%) of the gross proceeds received by us from the sale of the Class A Ordinary Shares in this offering.
We estimate that the total expenses of the offering payable by us, excluding the underwriting discounts and non-accountable expense allowance, will be approximately $ . In connection with this offering, we made prior payments of $100,000 in total to EF Hutton LLC, the former representative of the underwriters, in February 2023 and January 2024, respectively.
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Underwriter Warrants
We have agreed to issue warrants to the representative or its designees (the “Underwriter Warrants”) to purchase a number of Class A Ordinary Shares equal to seven and one-half percent (7.5%) of the total number of Class A Ordinary Shares sold in this offering, including Class A Ordinary Shares issued upon exercise of underwriters’ over-allotment option. Such Underwriter Warrants shall have an exercise price equal to 140% of the public offering price of the Class A Ordinary Shares sold in this offering. The Underwriter Warrants are exercisable commencing six (6) months following the date of commencement of sales of the offering and for a period of five years following the date of commencement of sales of the offering, in whole or in part. The Class A Ordinary Shares underlying the Underwriter Warrants have resale registration rights including one demand and unlimited “piggy-back” rights for periods of five and seven years, respectively, from the commencement of sales of this offering. In compliance with FINRA Rule 5110(g)(8), such registration rights are limited to demand and “piggy back” rights for periods of five and seven years, respectively, from the effective date of the registration statement of which this prospectus forms a part, and such demand rights may be exercised on only one occasion.
The Underwriter Warrants and the underlying Class A Ordinary Shares are deemed compensation by FINRA and are therefore subject to a lock-up for a period of 180 days immediately following the commencement of sales of this offering. Pursuant to FINRA 5110(e)(1), these securities may not be sold, transferred, assigned, pledged or hypothecated, nor may they be the subject of any hedging, short sale, derivative, put or call transaction that would result in the economic disposition of the securities by any person for a period of 180 days immediately following the commencement of sales of this offering except to any underwriter and selected dealer participating in the offering and their officers or partners, registered persons of affiliates or as otherwise permitted under FINRA Rule 5110(e)(2).
Right of First Refusal
We have granted the representative a right of first refusal, for a period of twelve (12) months from the closing of the offering, to co-manage any public future public and private equity and debt offering, including all equity linked financings (excluding (i) shares issued under any compensation or stock option plan approved by the Company’s shareholders, (ii) shares issued as consideration of an acquisition or as part of a strategic partnership or transaction and (iii) conventional banking arrangements and commercial debt financing), during such twelve (12) month period, of the Company, or any successor to or any current or future subsidiary of the Company, with the representative receiving the right to underwrite or place a number of the securities to be sold therein having an aggregate purchase price therein equal to a minimum of the aggregate purchase price of the shares sold in this offering (excluding shares issued upon exercise of underwriters’ over-allotment option). If the representative fails to accept in writing any such proposal within ten (10) days after receipt of a written notice from us containing such proposal, the representative will have no claim or right with respect to any such sale contained in any such notice. If, thereafter, such proposal is modified in any material respect, the Company will adopt the same procedure as with respect to the original proposed public of private sale, and the representative shall have the right of first refusal with respect to such revised proposal as set forth above. In accordance with FINRA Rule 5110(g)(6)(A), such right of first refusal shall not have a duration of more than three years from the commencement of sales of this offering.
Lock-up Agreements
The Company, on behalf of itself and any successor entity, agrees that, without the prior written consent of the representative, it will not, for a period of 180 days after the date of this prospectus, (i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any notion or contract to sell, grant any option, right or warrant to purchase, lead, or otherwise transfer or dispose of directly or indirectly, any share of capital share of the Company or any securities convertible into or exercisable or exchangeable for shares of capital share of the Company; (ii) file or caused to be filed any registration statement with the SEC relating to the offering of any shares of capital share of the Company of any securities convertible into or exercisable or exchangeable for shares of capital shares of the company; (iii) complete any offering of debt securities of the Company, other than entering into a line of credit with a traditional bank or (iv) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of capital share of the Company, whether any such transaction described in clause (i), (ii), (iii) or (iv) above is to be settled by delivery of shares of capital share of the Company or such other securities, in such or otherwise.
Our directors, executive officers and shareholders have agreed, subject to limited exceptions set forth below, not to offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any shares of capital stock of the Company or any securities convertible into or exercisable or exchangeable for shares of capital stock of the Company (the “Lock-Up Securities”), that transfers, in whole or in part, any of the economic consequences of ownership of our Class A Ordinary Shares or such other securities for a period of 180 days after the date of this prospectus, without the prior written consent of the representative.
Notwithstanding the foregoing to the contrary and subject to the conditions below, a holder may transfer Lock-Up Securities without the prior written consent of the representative in connection with (a) transactions relating to Lock-Up Securities acquired in open market transactions after the completion of the Public Offering; provided that no filing under Section 16(a) of the Exchange Act, shall be required or shall be voluntarily made in connection with subsequent sales of Lock-Up Securities acquired in such open market transactions; (b) transfers of Lock-Up Securities (i) as a bona fide gift, by will or intestacy, (ii) by operation of law, such as pursuant to a qualified domestic order or as required by a divorce settlement, or (iii) to a family member or trust for the benefit of a family member (for purposes hereof, “family member” means any relationship by blood, marriage or adoption, not more remote than first cousin); (c) transfers of Lock-Up Securities to a charity or educational institution; or (d) if the holder, directly or indirectly, controls a corporation, partnership, limited liability company or other business entity, any transfers of Lock-Up Securities to any shareholder, partner or member of, or owner of similar equity interests in, the undersigned, as the case may be; provided that in the case of any transfer pursuant to the foregoing clauses (b), (c) or (d), (i) any such transfer shall not involve a disposition for value, (ii) each transferee shall sign and deliver to the representative a lock-up agreement substantially in the form of this lock-up agreement and (ii) no filing under Section 16(a) of the Exchange Act shall be required or shall be voluntarily made.
No Sales of Similar Securities
We have agreed not to offer; pledge; announce the intention to sell; sell; contract to sell; sell any option or contract to purchase; purchase any option or contract to sell; grant any option, right, or warrant to purchase; or otherwise transfer or dispose of, directly or indirectly, any Class A Ordinary Shares or any securities convertible into or exercisable or exchangeable for Class A Ordinary Shares or enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of our Class A Ordinary Shares, whether any such transaction is to be settled by delivery of Class A Ordinary Shares or such other securities, in cash or otherwise, without the prior written consent of the representative, for a period of 180 days from the date of this prospectus.
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Foreign Regulatory Restrictions on Purchase of our Class A Ordinary Shares
We have not taken any action to permit a public offering of our Class A Ordinary Shares outside the United States or to permit the possession or distribution of this prospectus outside the United States. People outside the United States who come into possession of this prospectus must inform themselves about and observe any restrictions relating to this offering of our Class A Ordinary Shares and the distribution of this prospectus outside the United States.
Indemnification
We have agreed to indemnify the underwriter and its affiliates against liabilities relating to the offering arising under the Securities Act and the Exchange Act and to contribute to payments that the underwriters may be required to make for these liabilities.
Application for Nasdaq Listing
We have applied to list our Class A Ordinary Shares on the Nasdaq Capital Market under the symbol “MNDR.” We will not consummate this offering without a listing approval letter from the Nasdaq Capital Market.
Electronic Offer, Sale, and Distribution
A prospectus in electronic format may be made available on websites or through other online services maintained by the underwriters or selling group members, if any, or by their affiliates, and the underwriters may distribute prospectus electronically. The underwriters may agree to allocate a number of Class A Ordinary Shares to selling group members for sale to their online brokerage account holders. The Class A Ordinary Shares to be sold pursuant to Internet distributions will be allocated on the same basis as other allocations. Other than the prospectus in electronic format, the information on, or that can be accessed through, these websites and any information contained in any other website maintained by these entities is not part of, and is not incorporated by reference into, this prospectus or the registration statement of which this prospectus forms a part, has not been approved and/or endorsed by us or the underwriters, and it should not be relied upon by investors.
In connection with this offering, certain of the underwriters or securities dealers may distribute prospectuses by electronic means, such as e-mail.
Passive Market Making
Any underwriter who is a qualified market maker on Nasdaq may engage in passive market making transactions on Nasdaq, in accordance with Rule 103 of Regulation M under the Exchange Act, during a period before the commencement of offers or sales of the shares and extending through the completion of the distribution. Passive market makers must comply with applicable volume and price limitations and must be identified as a passive market maker. In general, a passive market maker must display its bid at a price not in excess of the highest independent bid for such security. If all independent bids are lowered below the passive market maker’s bid, however, the passive market maker’s bid must then be lowered when certain purchase limits are exceeded.
Potential Conflicts of Interest
The underwriters and their affiliates may, from time to time, engage in transactions with and perform services for us in the ordinary course of their business for which they may receive customary fees and reimbursement of expenses. In the ordinary course of their various business activities, the underwriters and their affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (including bank loans) for their own accounts and for the accounts of their customers, and such investment and securities activities may involve securities and/or instruments of our Company. The underwriters and their affiliates may also make investment recommendations and/or publish or express independent research views in respect to such securities or instruments and may at any time hold, or recommend to clients that they acquire, long and/or short positions in such securities and instruments.
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Price Stabilization, Short Positions, and Penalty Bids
Until the distribution of the Class A Ordinary Shares offered by this prospectus is completed, rules of the SEC may limit the ability of the underwriters to bid for and to purchase our Class A Ordinary Shares. As an exception to these rules, the underwriters may engage in transactions effected in accordance with Regulation M under the Exchange Act that are intended to stabilize, maintain, or otherwise affect the price of our Class A Ordinary Shares. The underwriters may engage in over-allotment sales, syndicate-covering transactions, stabilizing transactions, and penalty bids in accordance with Regulation M.
● | Stabilizing transactions consist of bids or purchases made by the managing underwriter for the purpose of preventing or slowing a decline in the market price of our securities while this offering is in progress. | |
● | Short sales and over-allotments occur when the managing underwriter, on behalf of the underwriting syndicate, sells more of our shares than they purchase from us in this offering. In order to cover the resulting short position, the managing underwriter may exercise the over-allotment option described above and/or may engage in syndicate-covering transactions. There is no contractual limit on the size of any syndicate-covering transaction. The underwriters will deliver a prospectus in connection with any such short sales. Purchasers of shares sold short by the underwriters are entitled to the same remedies under the federal securities laws as any other purchaser of units covered by the registration statement. | |
● | Syndicate-covering transactions are bids for or purchases of our securities on the open market by the managing underwriter on behalf of the underwriters in order to reduce a short position incurred by the managing underwriter on behalf of the underwriters. Short sales may be “covered short sales,” which are short positions in an amount not greater than the underwriters’ option to purchase additional shares referred to above, or may be “naked short sales,” which are short positions in excess of that amount. The underwriters may close out any covered short position by either exercising their option, in whole or in part, or by purchasing shares in the open market. In making this determination, the underwriters will consider, among other things, the price of shares available for purchase in the open market as compared to the price at which they may purchase shares through the over-allotment option. Naked short sales are short sales made in excess of the over-allotment option. The underwriters must close out any naked short position by purchasing shares in the open market. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of our Class A Ordinary Shares in the open market that could adversely affect investors who purchased in this offering. | |
● | A penalty bid is an arrangement permitting the managing underwriter to reclaim the selling concession that would otherwise accrue to an underwriter if the Class A Ordinary Shares originally sold by the underwriter were later repurchased by the managing underwriter and therefore were not effectively sold to the public by such underwriter. |
Stabilization, syndicate-covering transactions, and penalty bids may have the effect of raising or maintaining the market price of our Class A Ordinary Shares or preventing or delaying a decline in the market price of our Class A Ordinary Shares. As a result, the price of our Class A Ordinary Shares may be higher than the price that might otherwise exist in the open market.
Neither we nor the underwriters make any representation or prediction as to the effect that the transactions described above may have on the prices of our Class A Ordinary Shares. These transactions may occur on Nasdaq or on any trading market. If any of these transactions are commenced, they may be discontinued without notice at any time.
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Offers Outside of the United States
Other than in the United States, no action has been taken by us or the underwriters that would permit a public offering of the Class A Ordinary Shares offered by this prospectus in any jurisdiction where action for that purpose is required. The Class A Ordinary Shares offered by this prospectus may not be offered or sold, directly or indirectly, nor may this prospectus or any other offering material or advertisements in connection with the offer and sale of any such shares be distributed or published in any jurisdiction, except under circumstances that will result in compliance with the applicable rules and regulations of that jurisdiction. Persons into whose possession this prospectus comes are advised to inform themselves about and to observe any restrictions relating to the offering and the distribution of this prospectus. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any Class A Ordinary Shares offered by this prospectus in any jurisdiction in which such an offer or a solicitation is unlawful.
Australia
This prospectus is not a disclosure document under Chapter 6D of the Australian Corporations Act, has not been lodged with the Australian Securities and Investments Commission and does not purport to include the information required of a disclosure document under Chapter 6D of the Australian Corporations Act. Accordingly, (i) the offer of the securities under this prospectus is only made to persons to whom it is lawful to offer the securities without disclosure under Chapter 6D of the Australian Corporations Act under one or more exemptions set out in section 708 of the Australian Corporations Act; (ii) this prospectus is made available in Australia only to those persons as set forth in clause (i) above; and (iii) the offeree must be sent a notice stating in substance that, by accepting this offer, the offeree represents that the offeree is such a person as set forth in clause (i) above, and, unless permitted under the Australian Corporations Act, agrees not to sell or offer for sale within Australia any of the securities sold to the offeree within 12 months after its transfer to the offeree under this prospectus.
Canada
The securities may be sold in Canada only to purchasers purchasing, or deemed to be purchasing, as principal that are accredited investors, as defined in National Instrument 45-106 Prospectus Exemptions or subsection 73.3(1) of the Securities Act (Ontario), and are permitted clients, as defined in National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations. Any resale of the securities must be made in accordance with an exemption from, or in a transaction not subject to, the prospectus requirements of applicable securities laws.
Securities legislation in certain provinces or territories of Canada may provide a purchaser with remedies for rescission or damages if this prospectus (including any amendment thereto) contains a misrepresentation, provided that the remedies for rescission or damages are exercised by the purchaser within the time limit prescribed by the securities legislation of the purchaser’s province or territory. The purchaser should refer to any applicable provisions of the securities legislation of the purchaser’s province or territory for particulars of these rights or consult with a legal advisor.
Pursuant to section 3A.3 of National Instrument 33-105 Underwriting Conflicts (NI 33-105), the underwriters are not required to comply with the disclosure requirements of NI 33-105 regarding underwriter conflicts of interest in connection with this offering.
China
The information in this document does not constitute a public offer of the securities, whether by way of sale or subscription, in the People’s Republic of China (“PRC”) (excluding, for purposes of this paragraph, Hong Kong Special Administrative Region, Macau Special Administrative Region and Taiwan). The securities may not be offered or sold directly or indirectly in the PRC to legal or natural persons other than directly to “qualified domestic institutional investors.”
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European Economic Area — Belgium, Germany, Luxembourg and Netherlands
In relation to each Member State of the European Economic Area that has implemented the Prospectus Regulation (each, a “Relevant Member State”), an offer to the public of our securities may not be made in that Relevant Member State, except that an offer to the public in that Relevant Member State of our securities may be made at any time under the following exemptions under the Prospectus Regulation:
(a) | to any legal entity which is a qualified investor as defined in the Prospectus Regulation; | |
(b) | to fewer than 150 natural or legal persons (other than qualified investors as defined in the Prospectus Regulation), subject to obtaining the prior consent of the representative for any such offer; or | |
(c) | in any other circumstances falling within Article 1(4) of the Prospectus Regulation, provided that no such offer of our securities shall result in a requirement for the publication by us or any underwriter of a prospectus pursuant to Article 3 of the Prospectus Regulation. |
For the purposes of this provision, the expression an “offer to the public” in relation to our securities in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and our securities to be offered so as to enable an investor to decide to purchase our securities, and the expression “Prospectus Regulation” means Regulation (EU) 2017/1129 (as amended).
This European Economic Area selling restriction is in addition to any other applicable selling restrictions set out below.
France
This document is not being distributed in the context of a public offering of financial securities (offre au public de titres financiers) in France within the meaning of Article L.411-1 of the French Monetary and Financial Code (Code Monétaire et Financier) and Articles 211-1 et seq. of the General Regulation of the French Autorité des Marchés Financiers (“AMF”). The securities have not been offered or sold and will not be offered or sold, directly or indirectly, to the public in France.
This document and any other offering material relating to the securities have not been, and will not be, submitted to the AMF for approval in France and, accordingly, may not be distributed or caused to distributed, directly or indirectly, to the public in France.
Such offers, sales and distributions have been and shall only be made in France to (i) qualified investors (investisseurs qualifiés) acting for their own account, as defined in and in accordance with Articles L.411-2-II-2° and D.411-1 to D.411-3, D. 744-1, D.754-1 and D.764-1 of the French Monetary and Financial Code and any implementing regulation; and/or (ii) a restricted number of non-qualified investors (cercle restreint d’investisseurs) acting for their own account, as defined in and in accordance with Articles L.411-2-II-2 and D.411-4, D.744-1, D.754-1 and D.764-1 of the French Monetary and Financial Code and any implementing regulation.
Pursuant to Article 211-3 of the General Regulation of the AMF, investors in France are informed that the securities cannot be distributed (directly or indirectly) to the public by the investors otherwise than in accordance with Articles L.411-1, L.411-2, L.412-1 and L.621-8 to L.621-8-3 of the French Monetary and Financial Code.
Ireland
The information in this document does not constitute a prospectus under any Irish laws or regulations, and this document has not been filed with or approved by any Irish regulatory authority, as the information has not been prepared in the context of a public offering of securities in Ireland within the meaning of the Irish Prospectus (Directive 2003/71/EC) Regulations 2005 (the “Prospectus Regulations”). The securities have not been offered or sold, and will not be offered, sold or delivered directly or indirectly in Ireland by way of a public offering, except to (i) qualified investors as defined in Regulation 2(l) of the Prospectus Regulations; and (ii) fewer than 100 natural or legal persons who are not qualified investors.
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Hong Kong
The securities may not be offered or sold in Hong Kong by means of any document other than (i) in circumstances which do not constitute an offer to the public within the meaning of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32 of the Laws of Hong Kong) (“Companies (Winding Up and Miscellaneous Provisions) Ordinance”) or which do not constitute an invitation to the public within the meaning of the Securities and Futures Ordinance (Cap. 571 of the Laws of Hong Kong) (“Securities and Futures Ordinance”); (ii) to “professional investors” as defined in the Securities and Futures Ordinance and any rules made thereunder; or (iii) in other circumstances which do not result in the document being a “prospectus” as defined in the Companies (Winding Up and Miscellaneous Provisions) Ordinance, and no advertisement, invitation or document relating to our securities may be issued or may be in the possession of any person for the purpose of issue (in each case whether in Hong Kong or elsewhere), which is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the securities laws of Hong Kong) other than with respect to our securities that are or are intended to be disposed of only to persons outside Hong Kong or only to “professional investors” in Hong Kong as defined in the Securities and Futures Ordinance and any rules made thereunder.
Israel
The securities offered by this prospectus have not been approved or disapproved by the Israeli Securities Authority (the ISA), nor have such securities been registered for sale in Israel. The shares may not be offered or sold, directly or indirectly, to the public in Israel, absent the publication of a prospectus. The ISA has not issued permits, approvals or licenses in connection with the offering or publishing of the prospectus; nor has it authenticated the details included herein, confirmed their reliability or completeness, or rendered an opinion as to the quality of the securities being offered. Any resale in Israel, directly or indirectly, to the public of the securities offered by this prospectus is subject to restrictions on transferability and must be effected only in compliance with the Israeli securities laws and regulations.
Italy
The offering of the securities in the Republic of Italy has not been authorized by the Italian Securities and Exchange Commission (Commissione Nazionale per le Societ - $$ - Aga e la Borsa, “CONSOB”) pursuant to Italian securities legislation, and, accordingly, no offering material relating to the securities may be distributed in Italy, and such securities may not be offered or sold in Italy in a public offer within the meaning of Article 1.1(t) of Legislative Decree No. 58 of 24 February 1998 (“Decree No. 58”), other than:
● | to Italian qualified investors, as defined in Article 100 of Decree no. 58 by reference to Article 34-ter of CONSOB Regulation no. 11971 of 14 May 1999 (“Regulation no. 1197l”) as amended (“Qualified Investors”); and | |
● | in other circumstances that are exempt from the rules on public offer pursuant to Article 100 of Decree No. 58 and Article 34-ter of Regulation No. 11971 as amended. |
Any offer, sale or delivery of the securities or distribution of any offer document relating to the securities in Italy (excluding placements where a Qualified Investor solicits an offer from the issuer) under the paragraphs above must be:
● | made by investment firms, banks or financial intermediaries permitted to conduct such activities in Italy in accordance with Legislative Decree No. 385 of 1 September 1993 (as amended), Decree No. 58, CONSOB Regulation No. 16190 of 29 October 2007 and any other applicable laws; and | |
● | in compliance with all relevant Italian securities, tax and exchange controls and any other applicable laws. |
Any subsequent distribution of the securities in Italy must be made in compliance with the public offer and prospectus requirement rules provided under Decree No. 58 and Regulation No. 11971, as amended, unless an exception from those rules applies. Failure to comply with such rules may result in the sale of such securities being declared null and void and in the liability of the entity transferring the securities for any damages suffered by the investors.
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Japan
The securities have not been and will not be registered under the Financial Instruments and Exchange Act of Japan (Act No. 25 of 1948, as amended), or the FIEA. The securities may not be offered or sold, directly or indirectly, in Japan or to or for the benefit of any resident of Japan (including any person resident in Japan or any corporation or other entity organized under the laws of Japan) or to others for reoffering or resale, directly or indirectly, in Japan or to or for the benefit of any resident of Japan, except pursuant to an exemption from the registration requirements of the FIEA and otherwise in compliance with any relevant laws and regulations of Japan.
Portugal
This document is not being distributed in the context of a public offer of financial securities (oferta pública de valores mobiliários) in Portugal, within the meaning of Article 109 of the Portuguese Securities Code (Código dos Valores Mobiliários). The securities have not been offered or sold and will not be offered or sold, directly or indirectly, to the public in Portugal. This document and any other offering material relating to the securities have not been, and will not be, submitted to the Portuguese Securities Market Commission (Comissão do Mercado de Valores Mobiliários) for approval in Portugal and, accordingly, may not be distributed or caused to distributed, directly or indirectly, to the public in Portugal, other than under circumstances that are deemed not to qualify as a public offer under the Portuguese Securities Code. Such offers, sales and distributions of securities in Portugal are limited to persons who are “qualified investors” (as defined in the Portuguese Securities Code). Only such investors may receive this document, and they may not distribute it or the information contained in it to any other person.
Singapore
This prospectus has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this prospectus and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of our securities may not be circulated or distributed, nor may our securities be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i) to an institutional investor (as defined under Section 4A of the Securities and Futures Act, 2001 of Singapore (“SFA”)) under Section 274 of the SFA; (ii) to a relevant person (as defined in Section 275(2) of the SFA) pursuant to Section 275(1) of the SFA, or any person pursuant to Section 275(1A) of the SFA, and in accordance with the conditions specified in Section 275 of the SFA and (where applicable) Regulation 3 of the Securities and Futures (Classes of Investors) Regulations 2018; or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA, in each case subject to conditions set forth in the SFA.
Where our securities are subscribed or purchased under Section 275 of the SFA by a relevant person which is a corporation (which is not an accredited investor (as defined in Section 4A of the SFA)) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor, the securities or securities-based derivatives contracts of that corporation shall not be transferable within six months after that corporation has acquired the securities or securities-based derivatives contracts under Section 275 of the SFA except: (1) to an institutional investor or to a relevant person, or to any person arising from an offer referred to in Section 275(1A) or Section 276(4)(c)(ii) of the SFA, (2) where no consideration is or will be given for the transfer, (3) where the transfer is by operation of law, (4) as specified in Section 276(7) of the SFA, or (5) as specified in Regulation 37A of the Securities and Futures (Offers of Investments) (Securities and Securities-based Derivatives Contracts) Regulations 2018.
Where our securities are subscribed or purchased under Section 275 of the SFA by a relevant person which is a trust (where the trustee is not an accredited investor (as defined in Section 4A of the SFA)) whose sole purpose is to hold investments and each beneficiary of the trust is an accredited investor, the beneficiaries’ rights and interest (howsoever described) in that trust shall not be transferable within six months after that trust has acquired the shares under Section 275 of the SFA except: (1) to an institutional investor or to a relevant person, or to any person arising from an offer referred to in Section 275(1A) or Section 276(4)(c)(ii) of the SFA, (2) where no consideration is or will be given for the transfer, (3) where the transfer is by operation of law, (4) as specified in Section 276(7) of the SFA, or (5) as specified in Regulation 37A of the Securities and Futures (Offers of Investments) (Securities and Securities-based Derivatives Contracts) Regulations 2018.
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Malaysia
The securities have not been and may not be approved by the Securities Commission Malaysia, or SC, and this document has not been and will not be registered as a prospectus with the SC under the Malaysian capital markets and services act of 2007, or CMSA. Accordingly, no securities or offer for subscription or purchase of securities or invitation to subscribe for or purchase securities are being made to any person in or from within Malaysia under this document except to persons falling within any of paragraphs 2(g)(i) to (xi) of schedule 5 of the CMSA and distributed only by a holder of a capital markets services license who carries on the business of dealing in securities and subject to the issuer having lodged this prospectus with the SC within seven days from the date of the distribution of this prospectus in Malaysia. The distribution in Malaysia of this document is subject to Malaysian laws. Save as aforementioned, no action has been taken in Malaysia under its securities laws in respect of this document. This document does not constitute and may not be used for the purpose of a public offering or an issue, offer for subscription or purchase, invitation to subscribe for or purchase any securities requiring the approval of the SC or the registration of a prospectus with the SC under the CMSA.
Sweden
This document has not been, and will not be, registered with or approved by Finansinspektionen (the Swedish Financial Supervisory Authority). Accordingly, this document may not be made available, nor may the securities be offered for sale in Sweden, other than under circumstances that are deemed not to require a prospectus under the Swedish Financial Instruments Trading Act (1991:980) (Sw. lag (1991:980) om handel med finansiella instrument). Any offering of securities in Sweden is limited to persons who are “qualified investors” (as defined in the Financial Instruments Trading Act). Only such investors may receive this document, and they may not distribute it or the information contained in it to any other person.
Switzerland
The securities may not be publicly offered in Switzerland and will not be listed on the SIX Swiss Exchange (“SIX”) or on any other stock exchange or regulated trading facility in Switzerland. This document has been prepared without regard to the disclosure standards for issuance prospectuses under art. 652a or art. 1156 of the Swiss Code of Obligations or the disclosure standards for listing prospectuses under art. 27 ff. of the SIX Listing Rules or the listing rules of any other stock exchange or regulated trading facility in Switzerland. Neither this document nor any other offering material relating to the securities may be publicly distributed or otherwise made publicly available in Switzerland.
Neither this document nor any other offering material relating to the securities has been or will be filed with or approved by any Swiss regulatory authority. In particular, this document will not be filed with, and the offer of securities will not be supervised by, the Swiss Financial Market Supervisory Authority (FINMA). This document is personal to the recipient only and not for general circulation in Switzerland.
United Arab Emirates
Neither this document nor the securities have been approved, disapproved or passed on in any way by the Central Bank of the United Arab Emirates or any other governmental authority in the United Arab Emirates, nor has the Company received authorization or licensing from the Central Bank of the United Arab Emirates or any other governmental authority in the United Arab Emirates to market or sell the securities within the United Arab Emirates. This document does not constitute and may not be used for the purpose of an offer or invitation. No services relating to the securities, including the receipt of applications and/or the allotment or redemption of such shares, may be rendered within the United Arab Emirates by the Company.
No offer or invitation to subscribe for securities is valid or permitted in the Dubai International Financial Centre.
United Kingdom
Neither the information in this document nor any other document relating to the offer has been delivered for approval to the Financial Services Authority in the United Kingdom, and no prospectus (within the meaning of section 85 of the Financial Services and Markets Act 2000, as amended (“FSMA”)) has been published or is intended to be published in respect of the securities. This document is issued on a confidential basis to “qualified investors” (within the meaning of section 86(7) of FSMA) in the United Kingdom, and the securities may not be offered or sold in the United Kingdom by means of this document, any accompanying letter or any other document, except in circumstances which do not require the publication of a prospectus pursuant to section 86(1) FSMA. This document should not be distributed, published or reproduced, in whole or in part, nor may its contents be disclosed by recipients to any other person in the United Kingdom.
The address of Network 1 Financial Securities, Inc. is 2 Bridge Avenue, Suite 241 Red Bank, NJ 07701.
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Expenses Related To This Offering
Set forth below is an itemization of the total expenses, excluding underwriting discounts and commissions, which are expected to be incurred in connection with the offer and sale of the Class A Ordinary Shares by us. With the exception of the SEC registration fee, the Nasdaq Capital Market listing fee and the Financial Industry Regulatory Authority (“FINRA”) filing fee, all amounts are estimates.
SEC registration fee | US$ | 4,392 | ||
Nasdaq listing fee | 50,000 | |||
FINRA filing fee | 4,295 | |||
Printing and engraving expenses | 5,995 | |||
Legal fees and expenses | 550,000 | |||
Accounting fees and expenses | 320,000 | |||
Miscellaneous | 330,000 | |||
Total | US$ |
1,264,682.00 |
Note: The expenses above are to be completed in amendment.
These expenses will be borne by us.
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We are being represented by Sidley Austin LLP with respect to certain legal matters as to United States federal securities law. The underwriter is being represented by Loeb & Loeb LLP with respect to certain legal matters as to United States federal securities law. The validity of the Class A Ordinary Shares offered in this offering will be passed upon for us by Harney Westwood & Riegels Singapore LLP. Certain legal matters as to Singapore law will be passed upon for us by Rajah & Tann Singapore LLP. Sidley Austin LLP may rely upon Harney Westwood & Riegels Singapore LLP with respect to matters governed by Cayman Islands law and Rajah & Tann Singapore LLP with respect to matters governed by Singapore law.
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The financial statements as of and for the years ended June 30, 2023 and 2022, and the related financial statement schedule included in this prospectus have been audited by Simon & Edward, LLP, an independent registered public accounting firm, as stated in their report appearing herein (which expresses an unqualified opinion on the financial statements and includes an explanatory paragraph referring to the translation of SGD amounts to United States dollar amounts). Such financial statements and financial statement schedule are included in reliance upon the report of such firm given upon their authority as experts in accounting and auditing.
The office of Simon & Edward, LLP is located at 17506 Colima Road Suite #101, Rowland Heights, CA 91748.
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Where You Can Find Additional Information
We have filed a registration statement, including relevant exhibits and schedules, with the SEC on Form F-1 under the Securities Act with respect to the Class A Ordinary Shares to be sold in this offering. This prospectus, which constitutes a part of the registration statement on Form F-1, does not contain all of the information contained in the registration statement. You should read our registration statement and its exhibits and schedules thereto for further information with respect to us and the Class A Ordinary Shares.
Immediately upon the effectiveness of the registration statement on Form F-1 of which this prospectus forms a part, we will become subject to periodic reporting and other informational requirements of the Exchange Act as applicable to foreign private issuers. Accordingly, we will be required to file reports, including annual reports on Form 20-F, and other information with the SEC. All information filed with the SEC can be obtained over the internet at the SEC’s website at www.sec.gov or inspected and copied at the public reference facilities maintained by the SEC at 100 F Street, N.E., Washington, D.C. 20549. You can request copies of documents, upon payment of a duplicating fee, by writing to the SEC.
132 |
MOBILE-HEALTH NETWORK SOLUTIONS
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
F-1 |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Shareholders and Board of Directors
Mobile-Health Network Solutions
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheets of Mobile-Health Network Solutions and subsidiary (the “Company”) as of June 30, 2023 and 2022, the related consolidated statements of operation and comprehensive income (loss), changes in stockholders’ equity, and cash flows for each of the two years in the period ended June 30, 2023 and 2022, and the related notes to the consolidated financial statements. In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2023 and 2022, and the results of its operations and its cash flows for each of the two years in the period ended June 30, 2023 and 2022, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.
F-2 |
Revenue recognition – Determination of principal versus agent
As discussed in Notes 2 to the consolidated financial statements, revenue is recognized on a gross or net basis based on whether the Company acts as a principal by controlling the service provided to the consumer, or whether it acts as an agent by arranging for third parties to provide the service to the consumer. During the years ended June 30, 2023 and 2022, telemedicine service was resulted in deliveries revenue of $6 million from contractual agreements in which the Company is responsible for arranging telemedicine consultation service provided to patients by in-house doctors and/or external contractual doctors and the Company is therefore acting as a principal.
We identified the determination of principal versus agent for revenue recognition for the telemedicine service arrangements as a critical audit matter. Specifically, subjective auditor judgment was required to evaluate whether the Company acted as either a principal or an agent with respect to whether the Company controls the promised service.
The primary procedures we performed to address this critical audit matter included:
» | Obtained understanding the legal requirements and operating environment of medical practice at Singapore. |
» | Obtained and understood the service contracts between the Company, Manadr APP users (i.e. patients) and service provider (i.e. doctors) for telemedine advises subscribed and medical advises and medicine prescription provided; |
» | Performed testing walkthroughs of sales and purchase transactions to confirm the working flow of the key business cycles; |
» | Obtained revenue recognition memo including analysis of principal versus agent along with the management’s conclusion; |
» | Assessed management’s determination of revenue recognition for the telemedicine service arrangements by analyzing whether the Company controls the promised service pursuant to the terms and conditions with Manadr APP users and service providers. |
» | Leveraged the testing result of substantive testing to further verify the management’s conclusion. |
/s/ Simon & Edward, LLP
We have served as the Company’s auditor since 2023.
Rowland Heights, California
October 27, 2023
F-3 |
MOBILE-HEALTH NETWORK SOLUTIONS
As of June, 30 | ||||||||
2023 | 2022 | |||||||
US$ | US$ | |||||||
ASSETS | ||||||||
Current assets | ||||||||
Cash and cash equivalents | 2,225,806 | 10,243,088 | ||||||
Accounts receivable, net | 74,315 | 112,526 | ||||||
Inventories, net | 146,381 | 71,655 | ||||||
Other current assets | 164,410 | 33,556 | ||||||
Amount due from related parties | 106,897 | 77,329 | ||||||
Amount due from officers | - | 3,449 | ||||||
Total current assets | 2,717,809 | 10,541,603 | ||||||
Non-current assets | ||||||||
Property and equipment, net | 178,799 | 34,350 | ||||||
Intangible assets, net | 70,783 | 122,225 | ||||||
Operating leases right-of-use assets | 393,198 | 57,445 | ||||||
Other assets | 81,950 | - | ||||||
Investment in joint venture | - | 1 | ||||||
Total non-current assets | 724,730 | 214,021 | ||||||
TOTAL ASSETS | 3,442,539 | 10,755,624 | ||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Current liabilities | ||||||||
Accounts payable | 1,358,816 | 560,730 | ||||||
Accruals and other payables | 826,167 | 372,350 | ||||||
Amount due to officers | 133,586 | 158,344 | ||||||
Amount due to related parties | 26,915 | 4,303 | ||||||
Operating lease liabilities, current | 154,604 | 39,163 | ||||||
Income taxes payable | - | 134,362 | ||||||
Total current liabilities | 2,500,088 | 1,269,252 | ||||||
Non-current liabilities | ||||||||
Amount due to officers | 994,708 | 958,440 | ||||||
Other liabilities | 73,763 | 71,849 | ||||||
Operating lease liabilities | 241,179 | 19,954 | ||||||
Total non-current liabilities | 1,309,650 | 1,050,243 | ||||||
TOTAL LIABILITIES | 3,809,738 | 2,319,495 | ||||||
COMMITMENTS AND CONTINGENCIES (Note 13) | ||||||||
SHAREHOLDERS’ EQUITY | ||||||||
Ordinary shares, Class A, $0.000004 par value, 25,000,000 shares authorized, 53,615 and 67,494 shares issued and outstanding as of June 30, 2023 and 2022, respectively | 53 | 67 | ||||||
Ordinary shares, Class B, $0.000004 par value, 25,000,000 shares authorized, 48,313 shares issued and outstanding as of June 30, 2023 and 2022, respectively | 49 | 49 | ||||||
Additional paid-in capital | 8,496,710 | 14,482,926 | ||||||
Accumulated deficit | (9,153,001 | ) | (5,939,641 | ) | ||||
Accumulated other comprehensive income (loss) | 288,990 | (107,272 | ) | |||||
Total shareholders’ (deficit) equity | (367,199 | ) | 8,436,129 | |||||
TOTAL LIABILITIES AND SHAREHOLDERS’ (DEFICIT) EQUITY | 3,442,539 | 10,755,624 |
The accompanying notes are an integral part of these consolidated financial statements.
F-4 |
MOBILE-HEALTH NETWORK SOLUTIONS
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
For the years ended June 30 | ||||||||
2023 | 2022 | |||||||
US$ | US$ | |||||||
Revenue | 7,874,886 | 6,988,849 | ||||||
- Third parties | 7,434,789 | 6,439,164 | ||||||
- Related parties | 440,097 | 549,685 | ||||||
Cost | (6,779,892 | ) | (5,053,743 | ) | ||||
- Third parties | (6,629,622 | ) | (4,096,651 | ) | ||||
- Related parties | (150,270 | ) | (957,092 | ) | ||||
Gross profit | 1,094,994 | 1,935,106 | ||||||
Operating expenses: | ||||||||
Salaries and benefits | 2,389,892 | 1,038,877 | ||||||
Depreciation and amortization | 94,816 | 87,094 | ||||||
Selling, general and administrative | 1,898,986 | 615,473 | ||||||
Total operating expenses | 4,383,694 | 1,741,444 | ||||||
Other (loss) income: | ||||||||
Government incentives | 27,892 | 2,357 | ||||||
Other income, net | 47,448 | 62,453 | ||||||
Total other income, net | 75,340 | 64,810 | ||||||
(Loss) Income before income tax expense | (3,213,360 | ) | 258,472 | |||||
Income tax expense | - | (165,775 | ) | |||||
Net (loss) income | (3,213,360 | ) | 92,697 | |||||
Other comprehensive income: | ||||||||
Foreign currency translation, net of income tax | 396,262 | (114,433 | ) | |||||
Comprehensive loss | (2,817,098 | ) | (21,736 | ) | ||||
Net (loss) income per share | ||||||||
Basic and diluted | (29.67 | ) | 1.07 | |||||
Weighted average number of ordinary shares | ||||||||
Basic and diluted | 108,311 | 86,402 |
The accompanying notes are an integral part of these consolidated financial statements.
F-5 |
MOBILE-HEALTH NETWORK SOLUTIONS
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (DEFICIT)
Ordinary shares, Class A | Ordinary shares, Class B | Additional | Accumulated other | |||||||||||||||||||||||||||||
Shares Outstanding | Par value | Shares Outstanding | Par value | paid-in capital | Accumulated losses | comprehensive income (loss) | Total | |||||||||||||||||||||||||
US$ | US$ | US$ | US$ | US$ | US$ | |||||||||||||||||||||||||||
Balance as of July 1, 2021 | 32,208 | 32 | 48,313 | 49 | - | (6,032,338 | ) | 7,161 | (6,025,096 | ) | ||||||||||||||||||||||
Issuance of ordinary shares (Note 10) | 35,286 | 35 | - | - | 14,482,926 | - | - | 14,482,961 | ||||||||||||||||||||||||
Net income | - | - | - | - | - | 92,697 | - | 92,697 | ||||||||||||||||||||||||
Foreign currency translation adjustment | - | - | - | - | - | - | (114,433 | ) | (114,433 | ) | ||||||||||||||||||||||
Balance as of June 30, 2022 | 67,494 | 67 | 48,313 | 49 | 14,482,926 | (5,939,641 | ) | (107,272 | ) | 8,436,129 | ||||||||||||||||||||||
Ordinary shares buy back (Note 10) | (16,104 | ) | (16 | ) | - | - | (6,848,257 | ) | - | - | (6,848,273 | ) | ||||||||||||||||||||
Issuance of ordinary shares (Note 10) | 2,225 | 2 | - | - | 862,041 | - | - | 862,043 | ||||||||||||||||||||||||
Net loss | - | - | - | - | - | (3,213,360 | ) | - | (3,213,360 | ) | ||||||||||||||||||||||
Foreign currency translation adjustment | - | - | - | - | - | - | 394,262 | 394,262 | ||||||||||||||||||||||||
Balance as of June 30, 2023 | 53,615 | 53 | 48,313 | 49 | 8,496,710 | (9,153,001 | ) | 288,990 | (367,199 | ) |
The accompanying notes are an integral part of these consolidated financial statements.
F-6 |
MOBILE-HEALTH NETWORK SOLUTIONS
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the years ended June 30 | ||||||||
2023 | 2022 | |||||||
US$ | US$ | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net (loss) income | (3,213,360 | ) | 92,697 | |||||
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||||||||
Depreciation and amortization | 94,816 | 87,094 | ||||||
Non cash lease expenses | 106,076 | 49,696 | ||||||
Intangible assets written off | 2,887 | (8,958 | ) | |||||
Deferred tax benefit provision | - | 549 | ||||||
Allowance for doubtful debts | 106,450 | - | ||||||
Provision for stock obsolesces | 20,438 | - | ||||||
Change in operating assets and liabilities: | ||||||||
Accounts receivable | (513 | ) | 119,360 | |||||
Other current assets | (210,622 | ) | (2,287 | ) | ||||
Inventories | (92,813 | ) | 22,065 | |||||
Accounts payable | 748,515 | 298,587 | ||||||
Accruals and other current liabilities | 431,812 | 229,844 | ||||||
Operating lease assets and liabilities, net | (105,212 | ) | (47,353 | ) | ||||
Income taxes payable | (137,100 | ) | 134,362 | |||||
Net cash (used in) provided by operating activities | (2,248,626 | ) | 975,656 | |||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Purchase of property and equipment | (186,001 | ) | (15,211 | ) | ||||
Net cash used in investing activities | (186,001 | ) | (15,211 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Proceeds from issuance of ordinary shares | 843,081 | 9,709,166 | ||||||
Repurchase of ordinary shares issued | (6,598,240 | ) | - | |||||
Repayment of other payables to related parties | (45,293 | ) | (11,889 | ) | ||||
Repayment to directors | - | (463,381 | ) | |||||
Net cash (used in) provided by financial activities | (5,800,452 | ) | 9,233,896 | |||||
Effect of exchange rate changes on cash and cash equivalents | 217,797 | (114,433 | ) | |||||
Net change in cash and cash equivalents | (8,017,282 | ) | 10,079,908 | |||||
Cash and cash equivalents - beginning of year | 10,243,088 | 163,180 | ||||||
Cash and cash equivalents - end of year | 2,225,806 | 10,243,088 | ||||||
SUPPLEMENTAL CASH FLOW INFORMATION: | ||||||||
Cash paid for interest | - | - | ||||||
Cash paid for income taxes | 217,228 | - | ||||||
Cash refund from income taxes | 27,844 | - | ||||||
SUPPLEMENTAL SCHEDULE OF NON-CASH FINANCING ACTIVITIES: | ||||||||
Shares issued via the capitalization of amount due to director | - | 4,773,795 |
The accompanying notes form an integral part of these consolidated financial statements.
F-7 |
1 | Organization and business overview |
Mobile-Health Network Solutions. is an investment holding company incorporated on 28 July 2016 under the laws of the Cayman Islands. The Company through its subsidiaries provides telehealth solutions through our MaNaDr platform, which is accessible via our mobile application and website to offer users with a range of seamless and hassle-free telehealth solutions. The platform seeks to offer users the ability to teleconsult with doctors and be prescribed and delivered with the medication at their doorsteps. We also sell prescription drugs, non-prescription drugs and healthcare products directly on our platform and indirectly through the Company’s retail pharmacy network. Mobile-Health Network Solutions and its subsidiaries are collectively referred to as the “Company”.
The Company is headquartered in Singapore.
The consolidated financial statements of the Company include the following entities:
Name |
Date of incorporation |
Percentage of direct or indirect interests | Place of incorporation |
Principal activities | ||||
Mobile-Health Network Solutions
|
28 July 2016 | Cayman Islands | Investment holding | |||||
Manadr Pte. Ltd. | 28 September 2016 | 70% (1) | Singapore | Providing healthcare services through mobile application and web portals | ||||
Mobile Health Pte. Ltd. | 2 July 2009 | 100% | Singapore | Developing IT systems on mobile phone | ||||
Songline Analytics Pvt Ltd. | 4 August 2015 | 99.99%(3) | India | Disposed on December 2022 | ||||
1 Healthservice Pte. Ltd. | 28 September 2016 | 100% | Singapore | Pharmacies, drug stores and other health services | ||||
Manahome care Pte. Ltd. | September 23, 2017 | 100% | Singapore | Struck off in January 2023 | ||||
Manacollege Pte. Ltd. | October 11, 2017 | 100% | Singapore | Struck off in September 2023 | ||||
Mana Aesthetics Pte. Ltd. | October 11, 2017 | 100% | Singapore | Beauty and other personal care services | ||||
Managourmet Pte. Ltd. | December 28, 2017 | 51% | Singapore | Struck off in April 2023 | ||||
Nano Mana Pte. Ltd. | August 2, 2018 | 50%(2) | Singapore | Struck off in September 2023 | ||||
Manaheart Pte. Ltd. | May 29, 2019 | 51% | Singapore | Struck off in April 2023 | ||||
Manapharma Pte. Ltd. | March 17, 2019 | 100% | Singapore | Struck off in December 2022 |
F-8 |
MOBILE-HEALTH NETWORK SOLUTIONS |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
1 | Organization and business overview (continued) |
Name |
Date of incorporation |
Percentage of direct or indirect interests |
Place of incorporation |
Principal activities | ||||
Manadr Clinic Pte. Ltd. | March 6, 2023 | 100%(4) | Singapore | Clinics and other general medical services | ||||
Manadr Vietnam Pte. Ltd. | June 29, 2023 | 100%(5) | Vietnam | Developing IT systems on mobile phone and web portals |
(1) | The Company entered into a trust deed with Teoh Pui Pui to hold 30% legal ownership of Manadr Pte. Ltd. on behalf of the Company with effective from April 8, 2021 in connection with the restructuring exercise to rationalize the Group structure. The Company had 100% beneficial ownership of Manadr Pte. Ltd. pursuant to the trust deed. On March 31, 2023, the 30% ownership was transferred back from Teoh Pui Pui to the Company in the same consideration to streamline the capital structure of the Company prior to the Nasdaq listing application. Manadr Pte. Ltd is consolidated in the accompanying consolidated financial statements as a wholly owned subsidiary during the period. | |
(2) | The Company has a 50% interest in Nano Mana Pte. Ltd., a dormant joint venture company. The joint venture company was struck off in September 2023. | |
(3) | In December 2022, the Company completed the disposal of the subsidiary, Songline Analytics Pvt Ltd. to an independent third party, for a consideration of approximately $8,000. The disposal of Songline Analytics Pvt Ltd. did not represent a strategic shift that has a major effect on the Company’s operations and financial results. Therefore, the disposal of the subsidiary is not reported in discontinued operations. | |
(4) | On March 6, 2023, Manadr Clinic Pte. Ltd had been incorporated and the capital injection was $75,358 (S$100,000) | |
(5) | On June 29, 2023, Manadr Vietnam Pte. Ltd had been incorporated and the capital injection was $50,000. |
2 | Summary of significant accounting policies |
This summary of significant accounting policies is presented to assist in understanding the Company’s consolidated financial statements and has been consistently applied in the preparation of the financial statements.
Basis of presentation
The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”).
Consolidation
The accompanying consolidated financial statements include the accounts of the Company and its subsidiaries. Significant inter-company balances, inter-company transactions, investment and capital, if any, have been eliminated upon consolidation.
Non-controlling interest represents the portion of the net assets of a subsidiary attributable to interests that are not owned by the Company. The non-controlling interest is presented in the consolidated balance sheets, separately from equity attributable to the shareholders of the Company. Non-controlling interest’s operating result is presented on the face of the consolidated statements of income and comprehensive income/(loss) as an allocation of the total income/(loss) for the year between non-controlling shareholders and the shareholders of the Company.
F-9 |
MOBILE-HEALTH NETWORK SOLUTIONS |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
2 | Summary of significant accounting policies (continued) |
Use of estimates
The preparation of consolidated financial statements in conformity with US GAAP requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Significant accounting estimates reflected in the Company’s consolidated financial statements include, but are not limited to, inventory valuation, impairment of long-lived assets, estimated useful life of property and equipment and intangible assets, and allowance for credit losses on receivables, and realisation of deferred tax assets. Actual results may differ from these estimates.
Foreign currency and translation
The functional currency of Mobile-Health Network Solutions and its Singapore subsidiaries is the Singapore dollar (“S$”) The functional currency of the Company’s Indian subsidiary is the Indian Rupee (INR). The reporting currency of the Company is the United States dollar (the “US$”).
The financial statements of the Company is translated from the functional currency to the reporting currency, the US$. Transactions denominated in foreign currencies are re-measured into the functional currency at the exchange rates prevailing on the transaction dates.
Monetary assets and liabilities denominated in foreign currencies are re-measured at the exchange rates prevailing at the balance sheet date. Non-monetary items that are measured in terms of historical costs in foreign currency. Exchange gains and losses are included in the consolidated statements of income and comprehensive income.
The Company uses the average exchange rate for the year and the exchange rate at the balance sheet date to translate the operating results and financial position, respectively. Equity accounts other than earnings generated in current year are translated into US$ at the appropriate historical rates. Translation differences are recorded in accumulated other comprehensive income, a component of shareholders’ equity (deficit).
Cash and cash equivalents
Cash and cash equivalents primarily consist of bank deposits with original maturities of three months or less, which are unrestricted as to withdrawal and use. The Company maintains most of its bank accounts in Singapore. Cash and cash equivalents represent cash in bank and are unrestricted as to withdrawal or use.
Accounts receivable, net
Accounts receivable mainly represent amounts due from customers that meet the revenue recognition criteria. These accounts receivables are recorded net of any allowance for credit losses and specific customer credit allowances. The Company maintains an allowance for estimated credit losses inherent in its accounts receivable portfolio. In establishing the required allowance, management considers historical losses adjusted to take into account current market conditions and the Company’s customers’ financial condition, the receivable amount in dispute, and the current receivables aging and current payment patterns, over the contractual life of the receivable. The Company writes off the receivable when it is determined to be uncollectible.
Other current assets
Other current assets, including deposits, other receivables (from staff), income tax receivable and prepayments, are classified based on the terms of the respective agreements. These advances are unsecured and are reviewed periodically to determine whether their carrying value has become impaired. As of June 30, 2023 and 2022, management believes that the Company’s prepayments and deposits are not impaired.
F-10 |
MOBILE-HEALTH NETWORK SOLUTIONS |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
2 | Summary of significant accounting policies (continued) |
Inventory, net
Inventories are measured at the lower of cost or net realizable value. The cost of inventories is based on the first-in, first-out principle, and includes expenditure incurred in acquiring the inventories and other costs incurred in bringing them to their existing location and condition.
We review inventory quarterly for salability and obsolescence based on expiration dates. A statistical allowance is provided for inventory considered unlikely to be sold. The statistical allowance is based on an analysis of the expiration dates, historical disposal activity, historical customer shipments, as well as estimated future sales. We write off inventory in the period in which disposal occurs.
Property and equipment, net
Property and equipment are stated at cost less accumulated depreciation and impairment if applicable. The Company computes depreciation using the straight-line method over the estimated useful lives of the assets as follows:
Categories | Useful life |
Computer and software | 3 years |
Furniture & fittings | 5 years |
Office equipment | 5 years |
Leasehold improvement | Shorter of the remaining lease term or 3 years |
The cost and related accumulated depreciation of assets sold or otherwise retired are eliminated from the accounts and any gain or loss is included in the consolidated statement of operations and comprehensive income. Expenditures for maintenance and repairs are charged to expense as incurred, while additions renewals and betterments, which are expected to extend the useful life of assets, are capitalized. The Company also re-evaluates the periods of depreciation to determine whether subsequent events and circumstances warrant revised estimates of useful lives.
Intangible assets, net
Intangible assets represent the Manadr platform, patents and trademarks. These intangible assets arise primarily from the determination of their respective fair market values at the date of acquisition. The useful life of the intangible assets is assessed to be finite and amortization is computed using the straight-line method over the estimated useful lives or 3 to 10 years based upon the future cash flows attributable to the asset.
Impairment of long-lived assets
The Company evaluates the recoverability of its long-lived assets (asset groups), including property and equipment, definite-lived intangible assets and operating lease right-of-use assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of its asset (asset group) may not be fully recoverable. When these events occur, the Company measures impairment by comparing the carrying amount of the assets to the estimated undiscounted future cash flows expected to result from the use of the asset (asset group) and their eventual disposition. If the sum of the expected undiscounted cash flows is less than the carrying amount of the asset (asset group), the Company recognizes an impairment loss based on the excess of the carrying amount of the asset (asset group) over their fair value. Fair value is generally determined by discounting the cash flows expected to be generated by the asset (asset group), when the market prices are not readily available. The adjusted carrying amount of the asset is the new cost basis and is depreciated over the asset’s remaining useful life. Long-lived assets are grouped with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. For the years ended June 30, 2023 and 2022, no impairment of long-lived assets was recognized.
F-11 |
MOBILE-HEALTH NETWORK SOLUTIONS |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
2 | Summary of significant accounting policies (continued) |
Leases
The Company is a lessee of non-cancellable operating leases for its corporate office premise. The Company determines if an arrangement is a lease at inception. Lease assets and liabilities are recognized at the present value of the future lease payments at the lease commencement date. The interest rate used to determine the present value of the future lease payments is the Company’s incremental borrowing rate based on the information available at the lease commencement date. The Company generally uses the base, non-cancellable lease term in calculating the right-of-use assets and liabilities.
The Company has elected not to recognize ROU assets and lease liabilities for short-term leases that have a lease term of 12 months or less. The Company recognizes the lease payments associated with its short-term leases as an expense on a straight-line basis over the lease term.
The Company evaluates the impairment of its right-of-use assets consistent with the approach applied for its other long-lived assets. The assessment of possible impairment is based on its ability to recover the carrying value of the asset from the expected undiscounted future pre-tax cash flows of the related operations. The Company has elected to include the carrying amount of finance and operating lease liabilities in any tested asset group and include the associated lease payments in the undiscounted future pre-tax cash flows. For the years ended June 30, 2023 and 2022, the Company did not have any impairment loss against its operating lease right-of-use assets.
Fair value measurements
The Company determines fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. ASC 820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:
Level 1 | - observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. |
Level 2 | - other inputs that are directly or indirectly observable in the marketplace. |
Level 3 | - unobservable inputs which are supported by little or no market activity. |
The carrying amounts of cash and cash equivalents, accounts receivable, other current assets, accounts payable, and accruals and other payables approximate their fair values because of their generally short maturities. Other non-current liabilities are stated at amortized cost, which approximates fair value. The carrying amounts of operating lease liabilities and the amount due to officers approximate their fair values since they bear an interest rate which approximates market interest rates.
Revenue recognition
The Company follows the revenue requirements of Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“Accounting Standards Codification (“ASC”) 606”). The core principle underlying the revenue recognition of this ASC allows the Company to recognize revenue that represents the transfer of goods and services to customers in an amount that reflects the consideration to which the Company expect to be entitled in such exchange. This will require the Company to identify contractual performance obligations and determine whether revenue should be recognized at a point in time or over time, based on when control of goods and services transfers to a customer.
To achieve that core principle, the Company applies five-step model to recognize revenue from customer contracts. The five-step model requires that the Company (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance obligation.
The Company derives revenue from two main segments: (1) telemedicine and other services; and (2) sale of medicine and medical devices.
F-12 |
MOBILE-HEALTH NETWORK SOLUTIONS |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
2 | Summary of significant accounting policies (continued) |
Revenue recognition (continued)
Telemedicine and other services
Telemedicine services are provided to both private sector and public sector. The Company earns telemedicine services revenue from private sector by providing teleconsultation services to patients who have subscribed to Manadr APP by contractual service providers and sale of prescribed medicine. Telemedicine revenue derived from public sector represents revenue generated from contracts with the relevant authorities and departments of the Singapore government by providing teleconsultation services to patients identified by the authorities and departments of the Singapore government. Telemedicine services with prescribed medicine are two distinct performance obligations with standalone prices that are fixed and paid post rendering of teleconsultation service with patients. Prescribed medicine will be delivered to the customer on the same day. The amount paid by the patient is then allocated to each performance obligation in a contract based on its relative standalone selling price (“SSP”). The SSP is the observable price at which we sell the product or service separately.
Revenue from teleconsultation services and sale of prescribed medicine are recognized at a point in time when the services are rendered and the products are delivered to the customers respectively.
The Company considers the following indicators amongst others when determining whether it is acting as a principal in the contract where revenue would be recorded on a gross basis:
(i) | the Company is primarily responsible for fulfilling the promise to provide the specified products or services; | |
(ii) | the Company has control over services provided in which the prescription issued by our service providers is under the clinic name of the Company; and | |
(iii) | the Company has discretion in establishing the price for the specified products or services. |
The services are rendered by the Company’s in-house doctors and external service providers who are registered and credentialed to deliver care on MaNaDr platform. The company contracts with the external service providers who are paid based on the consultation fee set by the Company. Patient contracts with the Company and make payment on the MaNadr platform. In these arrangements, as the Company assumes a principal role in the transaction, revenue is recognized gross. The Company has the right to determine the service price to patients and is responsible for the holding and fulfilment of prescribed medicine to the patients, the Company assumes the credit risk and rewards of ownership of the inventory. Accordingly, the Company accounts for the telemedicine service contracts on a gross basis.
The Company also provided the medical consultation services for the physical walk-in patients in our own clinics. The services are rendered by the Company’s in-house doctors who are registered and credentialed to deliver care for the physical walk-in patients, as well as sale of prescribed medicines.
Sale of medicine and medical devices
The Company sells prescription drugs, non-prescription drugs and healthcare products to clinics and end customers offline and online. The online transactions are performed through MaNaShop/MaNaStore. These products are purchased by the Company as inventory for onward sale to customers. Revenue from sale of these products under direct sales model is recognized on a gross basis upon delivery of the medicines or products to the customers. For products that are not purchased by the Company as inventory for onward sale to customers through online marketplace model, the Company facilitates setting product prices with vendors. The Company is not responsible for fulfilling the contracts being provided to the customers nor does the Company have inventory risk related to the contracts. Revenue from sale of these products is recognized on a net basis upon delivery of the medicines or products to the customers.
Deferred revenue
Deferred revenue includes amounts collected or billed in excess of revenue recognized. Deferred revenue is recognized as revenue as the related performance obligations are satisfied. Deferred revenue balances are generally expected to be recognized within 12 months.
Cost of revenue
Cost of revenue primarily consists of fees paid to the service providers, medicine costs and delivery fees.
F-13 |
MOBILE-HEALTH NETWORK SOLUTIONS |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
2 | Summary of significant accounting policies (continued) |
Related party transactions
Parties, which can be a corporation or individual, are considered to be related if the Company has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Companies are also considered to be related if they are subject to common control or common significant influence, such as a family member or relative, shareholder, or a related corporation.
Segment Reporting
In accordance with ASC 280, Segment Reporting, operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker (“CODM”), or decision making group, in deciding how to allocate resources and in assessing performance. The Company uses the “management approach” in determining reportable operating segments. The management approach considers the internal organization and reporting used by the Company’s CODM for making operating decisions and assessing performance as the source for determining the Company’s reportable segments. Management, including the CODM maker, reviews operation results by the revenue of different services. Based on management’s assessment, the Company has determined that it has two operating segments as follows:
1. Telemedicine and other services
2. Sale of medicine and medical devices
Concentrations and credit risk
The Company maintains cash with banks in Singapore (“SGN”). Should any bank holding cash become insolvent, or if the Company is otherwise unable to withdraw funds, the Company would lose the cash with that bank; however, the Company has not experienced any losses in such accounts and believes it is not exposed to any significant risks on its cash in bank accounts. In Singapore, a depositor has up to S$75,000 insured by Singapore Deposit Insurance Corporation (“SDIC”).
As of June 30, 2023 and 2022, $1,921,497 and $13,915,831 of the company’s cash held by financial institutions were uninsured respectively.
Financial instruments that potentially expose the Company to concentration of credit risk consist primarily of cash and cash equivalent and accounts receivable. The Company has designed its credit policies with an objective to minimize their exposure to credit risk. The Company’s accounts receivable are short term in nature and the associated risk is minimal. The Company conducts credit evaluations on its clients and generally does not require collateral or other security. The Company periodically evaluates the creditworthiness of the existing clients in determining the allowance for doubtful accounts primarily based upon the age of the receivables and factors surrounding the credit risk of specific clients.
For the year ended June 30, 2023, none of the customers accounted more than 10% of the Company’s total sales. For the year ended June 30, 2022, customer A accounted for 66.0% of the Company’s total sales.
As of June 30, 2023, customer B accounted 21.1% of the account receivables. None of the customers consisted of more than 10% of account receivables as of June 30, 2022.
For the year ended June 30, 2023, none of the suppliers accounted more than 10% of the Company’s total purchases. For the year ended June 30, 2022, supplier F, accounted for 19.3% of the Company’s total purchases.
As of June 30, 2023, none of the suppliers accounted more than 10% of the account payable. As of June 30, 2022, supplier A and B, accounted for 14.2% and 15.8% of the account payable respectively.
F-14 |
MOBILE-HEALTH NETWORK SOLUTIONS |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
2 | Summary of significant accounting policies (continued) |
Employee benefits
Employee benefits are recognized as an expense, unless the cost qualifies to be capitalized as an asset.
i) | Defined contribution plans |
Defined contribution plans are post-employment benefit plans under which the Company pays fixed contributions into separate entities such as the Central Provident Fund on a mandatory, contractual or voluntary basis. The Company has no further payment obligations once the contributions have been paid. |
ii) | Short-term compensated absences |
Employee entitlements to annual leave are recognized when they accrue to employees. A provision is made for the estimated liability for annual leave as a result of services rendered by employees up to the balance sheet date. |
Share-Based Compensation
The Company accounts for stock options and other equity-based compensation issued in accordance with ASC 718 “Stock Compensation”, which requires the measurement and recognition of compensation expenses related to the fair value of equity-based compensation awards that are ultimately expected to vest. Stock-based compensation expense recognized includes the compensation cost for all share-based compensation payments granted to employees and non-employees, net of estimated forfeitures, over the employees’ requisite service period or the non-employee performance period based on the grant date’s fair value estimated in accordance with the provisions of ASC 718. ASC 718 is also applied to award modified repurchased or cancelled during the periods reported.
The determination of each option award’s fair value is conducted at the grant date, utilizing the Black-Scholes option pricing model. This model depends on subjective factors such as the fair value of common stock, the expected lifespan of the option, the projected volatility of stock price, prevailing risk-free interest rates, and the anticipated dividend yield. These factors, guided by management’s estimates, inherently involve uncertainties and the need for sound managerial judgment. In assessing the valuation of common stock, the Company employed a comprehensive approach that combines both market and income methodologies to determine the enterprise value, or fair value of the business. The market approach involves estimating value by comparing the Company to similar publicly traded entities within the same business sector, as well as examining secondary transactions involving our capital stock. The income approach calculates the fair value by considering the present value of the Company’s anticipated future cash flows and the residual value beyond the forecast period.
The vesting of options upon the effectiveness of an IPO triggers an accounting recognition event. Any previously unrecognized option-based compensation expenses related to these vested options will be recognized on income statement. This expense represents the cumulative compensation cost associated with the options that have now become fully vested.
Income taxes
The Company accounts for income taxes under FASB ASC 740. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets are also provided for net operating loss carryforwards that can be utilized to offset future taxable income.
Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period including the enactment date. A valuation allowance is established, when necessary, to reduce net deferred tax assets to the amount expected to be realized. Current income taxes are provided for in accordance with the laws of the relevant taxing authorities.
The provisions of FASB ASC 740-10-25, “Accounting for Uncertainty in Income Taxes,” prescribe a more-likely-than-not threshold for consolidated financial statement recognition and measurement of a tax position taken (or expected to be taken) in a tax return. This interpretation also provides guidance on the recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, and related disclosures.
The Company did not accrue any liability, interest or penalties related to uncertain tax positions in its provision for income taxes for the years ended June 30, 2023 and 2022. The Company does not expect that its assessment regarding unrecognized tax positions will materially change over the next 12 months.
Comprehensive Income (Loss)
Comprehensive income (loss) is comprised of net income (loss) and other comprehensive income (loss). Other comprehensive income (loss) consists of foreign currency translation that have been excluded from the determination of net income (loss).
Earnings (loss) per share
Basic earnings (loss) per share is computed by dividing net earnings (loss) attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the year. Diluted earnings per share is computed in the same manner as basic EPS, except the number of shares include additional ordinary shares that would have been outstanding if potential ordinary shares with a dilutive effect had been issued. When the Company has a loss, diluted shares are not included as their effect would be anti-dilutive. The Company has no dilutive securities or debt for each of the years end June 30, 2023 and 2022.
F-15 |
MOBILE-HEALTH NETWORK SOLUTIONS |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
2 | Summary of significant accounting policies (continued) |
Recent Accounting Pronouncements
The Company is an “ emerging growth company “ (“EGC “) as defined in the Jumpstart Our Business Startups Act of 2012 (the “ JOBS Act “). Under the JOBS Act, EGC can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. The Company made the election to delay the adoption of new or revised accounting standards.
In October 2020, the FASB issued ASU 2020-10, “Codification Improvements to Subtopic 205-10, presentation of financial statements”. The amendments in this Update improve the codification by ensuring that all guidance that requires or provides an option for an entity to provide information in the notes to financial statements is codified in the disclosure section of the codification that reduce the likelihood that the disclosure requirements would be missed. The amendments also clarify guidance so that an entity can apply the guidance more consistently. Early application of the amendments is permitted for any annual or interim period which financial statements are available to be issued. The amendments in this Update should be applied retrospectively. An entity should apply the amendments at the beginning of the period that includes the adoption date. The adoption of this standard is not expected to have a significant impact on the Company.
Except as mentioned above, the Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the Company’s consolidated balance sheets, statements of operations and cash flows.
3 | Accounts receivable, net |
As of June, 30 | ||||||||
2023 | 2022 | |||||||
US$ | US$ | |||||||
Accounts receivable | 196,345 | 127,066 | ||||||
Less: allowance for doubtful accounts | (122,030 | ) | (14,540 | ) | ||||
Total accounts receivable | 74,315 | 112,526 |
Movements of allowance for doubtful accounts are as follows:
As of June, 30 | ||||||||
2023 | 2022 | |||||||
US$ | US$ | |||||||
Allowance for doubtful accounts, beginning balance | 14,540 | 9,944 | ||||||
Addition | 106,450 | 5,044 | ||||||
Exchange difference | 1,040 | (448 | ) | |||||
Allowance for doubtful accounts, ending balance | 122,030 | 14,540 |
For the years ended June 30, 2023 and 2022, the Company recognized $106,450 and $5,044 respectively of bad debts expense.
The significant amount of addition allowance for doubtful accounts during the financial year resulted from one of the major customers is in undergoing liquidation. The recoverability is uncertain therefore the receivable amount due from the customer was fully reserved for allowance for doubtful debts.
F-16 |
MOBILE-HEALTH NETWORK SOLUTIONS |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
4 | Inventories, net |
As of June, 30 | ||||||||
2023 | 2022 | |||||||
US$ | US$ | |||||||
Medicines | 168,559 | 73,426 | ||||||
Medical devices | 2,153 | 1,898 | ||||||
Finished goods | 170,712 | 75,324 | ||||||
Less: Allowance for stock obsolesces | (24,331 | ) | (3,669 | ) | ||||
Total inventories, net | 146,381 | 71,655 |
Movements of allowance for stock obsolesces are as follows:
As of June, 30 | ||||||||
2023 | 2022 | |||||||
US$ | US$ | |||||||
Allowance for stock obsolesces, beginning balance | 3,669 | 1,750 | ||||||
Addition | 20,438 | 2,022 | ||||||
Exchange difference | 224 | (103 | ) | |||||
Allowance for stock obsolesces ending balance | 24,331 | 3,669 |
There are no inventories pledged as security for liabilities.
5 | Other assets |
As of June, 30 | ||||||||
2023 | 2022 | |||||||
US$ | US$ | |||||||
Current | ||||||||
Deposits | 47,170 | 21,229 | ||||||
Prepayments | 38,758 | 8,333 | ||||||
Other receivables | 78,482 | 3,994 | ||||||
Other current assets | 164,410 | 33,556 | ||||||
Non-current | ||||||||
Other receivable | 81,950 | - |
F-17 |
MOBILE-HEALTH NETWORK SOLUTIONS |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
6 | Property and equipment, net |
As of June, 30 | ||||||||
2023 | 2022 | |||||||
US$ | US$ | |||||||
Computer and software | 65,725 | 34,789 | ||||||
Furniture & fittings | 19,109 | 12,742 | ||||||
Office equipment | 39,621 | 30,152 | ||||||
Leasehold improvement | 231,820 | 96,317 | ||||||
Total | 356,275 | 174,000 | ||||||
Less: accumulated depreciation | (177,476 | ) | (139,650 | ) | ||||
Net book value | 178,799 | 34,350 |
Depreciation expenses for the years ended June 30, 2023 and 2022 were $43,339 and $34,704 respectively.
7 | Intangible assets, net |
As of June, 30 | ||||||||
2023 | 2022 | |||||||
US$ | US$ | |||||||
Patent | 15,613 | 15,209 | ||||||
MaNadr APP Software | 603,177 | 587,532 | ||||||
Trademarks | 65,209 | 66,346 | ||||||
Total | 683,999 | 669,087 | ||||||
Less: accumulated amortization | (613,216 | ) | (546,862 | ) | ||||
Net book value | 70,783 | 122,225 |
Amortization expenses for the years ended June 30, 2023 and 2022 were $51,477 and $52,390 respectively.
Based on the carrying value of definite-lived intangible assets as of June 30, 2023, the Company estimates its amortization expense for following years will be as follows:
Amortization expense | ||||
US$ | ||||
Years Ended June 30, | ||||
2024 | 52,082 | |||
2025 | 6,811 | |||
2026 | 6,811 | |||
Thereafter | 5,079 | |||
Total amortization expense | 70,783 |
F-18 |
MOBILE-HEALTH NETWORK SOLUTIONS |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
8 | Lease |
The Company determines if a contract contains a lease at inception. US GAAP requires that the Company’s leases be evaluated and classified as operating or finance leases for financial reporting purposes. The classification evaluation begins at the commencement date and the lease term used in the evaluation includes the non-cancellable period for which the Company has the right to use the underlying asset, together with renewal option periods when the exercise of the renewal option is reasonably certain and failure to exercise such option which results in an economic penalty.
The Company has entered five lease agreements, including three for office premises, one for clinic premise and one for pharmacy premise, with lease terms ranging from 1 to 3 years. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. Upon adoption of ASU 2016-02, no right-of-use (“ROU”) assets nor lease liability was recorded for the lease with a lease term with one year.
Incremental rate applied to ROU and lease liabilities calculation refer to the central bank of Singapore.
As of June 30, 2022, the Company subsisted of the following non-cancellable lease contracts.
Description of lease | Lease term | |
Office premises, Vision exchange #07-06/07 | 3 years | |
Office premises, Vision exchange #07-04 | 3 years | |
Office premises, Icon 4 Tower #243A | 3 years | |
City Gate, Clinic #02-52 | 2 years | |
Pharmacy retail unit, Block 356 Hougang Ave 7 #01-799 | 1 year |
(a) Amount recognized in the consolidated balance sheet:
As of June, 30 | ||||||||
2023 | 2022 | |||||||
US$ | US$ | |||||||
Right-of-use assets | 393,198 | 57,445 | ||||||
Lease liabilities | ||||||||
Current | 154,604 | 39,163 | ||||||
Non-current | 241,179 | 19,954 | ||||||
395,783 | 59,117 |
(b) A summary of lease cost recognized in the Company’s consolidated statements of operations is as follows:
As of June, 30 | ||||||||
2023 | 2022 | |||||||
US$ | US$ | |||||||
Operating lease cost | 112,202 | 53,952 |
F-19 |
MOBILE-HEALTH NETWORK SOLUTIONS |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
8 | Lease (continued) |
Other information related to leases in as follows:
As of June, 30 | ||||||||
2023 | 2022 | |||||||
US$ | US$ | |||||||
Weighted average remaining lease term (in years) | 2.40 | 1.08 | ||||||
Weighted average discount rate | 5.25 | % | 5.25 | % |
As of June 30, 2023, the maturities of the Company’s operating lease liabilities (excluding short-term leases) are as following:
Years ending June 30, | US$ | |||
2024 | 164,038 | |||
2025 | 164,038 | |||
2026 | 82,942 | |||
Total future minimum lease payments | 411,018 | |||
Less imputed interest | (15,235 | ) | ||
Present value of operating lease liabilities | 395,783 | |||
Less: current portion | (154,604 | ) | ||
Long-term portion | 241,179 |
9 | Accrual and other payables |
As of June, 30 | ||||||||
2023 | 2022 | |||||||
US$ | US$ | |||||||
Accruals | ||||||||
Staff salaries | 95,480 | 50,070 | ||||||
Director | 44,258 | 21,555 | ||||||
Professional and consultancy fee | 503,286 | 143,595 | ||||||
Others | 11,761 | 17,956 | ||||||
GST payables | 171,382 | 139,174 | ||||||
826,167 | 372,350 |
The accruals of professional and consultancy fee represent unpaid IPO related professional and consultancy fees, such as audit fee, Singapore and US legal counsel review fee, market research fee and other IPO professional consultancy related expenses.
F-20 |
MOBILE-HEALTH NETWORK SOLUTIONS |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
9 | Accrual and other payables (continued) |
GST payable represents goods and services tax imposed by the Singapore authorities, collected from customers and patient, to be remitted to the local tax authorities. The Company’s policy is to record the GST collected as a liability on the books and then remove the liability when the sales tax is remitted. There is no impact on the statement of operations as revenue is recorded net of GST.
As of June 30, 2023 and 2022, the accruals of director refers to the directors’ fee payable amounted $7,376 and $7,185 each to 3 company’s directors named Nam Min Fern, Teo Kian Huat and Tsang Bih Shiou respectively.
10 | Equity |
The Company was incorporated under the laws of the Cayman Islands on 28 July 2016. The authorized share capital of the Company is US$50,000 divided into 6,250,000,000 Class A Ordinary Shares and 6,250,000,000 Class B Ordinary Shares. Holders of Class A Ordinary Shares and Class B Ordinary Shares have the same rights except for voting and conversion rights. Each holder of our Class A Ordinary Share is entitled to one vote per share. Each holder of our Class B Ordinary Share is entitled to 10 votes per share.
In connection with our fund raising, the Company entered into a series of agreements with investors since 2016. The Company issued 53,615 Class A Ordinary Shares and 48,313 Class B Ordinary Shares as of 30 June 2023.
On 8 May 2022, the Company issue an aggregate of 35,286 Class A Ordinary Shares, comprising (i) 11,631 Class A Ordinary Shares issued to three persons pursuant to the capitalization of a shareholder loan of S$6,500,000, and (ii) 23,655 Class A Ordinary Shares issued to four investors for a total consideration of S$13,200,000 pursuant to a share subscription agreement.
On January 18, 2023, the Company purchased 16,104 Class A Ordinary Shares at $425.25 (S$558.86) per share price at an aggregate purchase price of $6,848,273 (S$9,000,000) from an investor (the “Ex-investor”) which have been subsequently cancelled and are available for re-issue. The purchase price was agreed mutually between the Company and the Ex-investor on the same date the legal settlement entered, which is considered at its fair value given the share issuance price of the new Class A Ordinary Shares issued subsequently on April 18, 2023.
On April 18, 2023, the Company had issued 2,225 Class A Ordinary Shares at S$561.80 per share to two investors for a total consideration of $937,031 ($1,250,000). The Company incurred the incremental cost in connection to such Ordinary Shares issuance cost amounted $74,988, which was deducted from the funds received.
Employee Incentive Plan
On March 27, 2023, the Board of Directors of the Company approved the Employee Incentive Plan, (the “Incentive Plan”), to provide a wealth creation opportunity for the employees, advisors, consultants and directors in line with value creation for the Company, drive retention and increase motivation by rewarding high performance. Under the Plan, the maximum aggregate number of Shares under the Incentive Plan, including incentive share options is 10% of the total issued Class A Ordinary Shares of the Company from time to time. As of June 30, 2023, the maximum aggregate number of Shares under the Incentive Plan was 5,361 shares of Class A Ordinary Shares
The Plan will be administered by the Employee Incentive Plan Committee of the Company (the “Committee”) in its sole and absolute discretion with such powers and duties as are conferred on it by the Board from time to time. The subscription price payable or not for each Option Share in respect of which an Option is exercisable (the “Subscription Price”) shall be determined by the Committee from time to time, provided that in no event shall the subscription price be less than the par value of an Option Share. Options shall be exercisable only after vesting. Subject to the occurrence of certain events, the lapsing or the expiry of options as detailed in the Plan, the Options shall be exercisable in whole or in part, before the expiry of 10 years from the date of grant of the Option, or such other date as may be determined by the Committee. In the event of (i) an initial public offering and listing of shares of the Company or a direct listing of shares of the Company (a “Listing”); or (ii) a change of control in the shares of the Company, the Options granted to such Participants shall immediately vest. In the event of post-listing, any Options (if unvested) granted to participants under the Plan shall vest on the third anniversary of the date of grant.
F-21 |
MOBILE-HEALTH NETWORK SOLUTIONS |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
11 | Related party transactions and balances |
The table below sets forth the major related parties and their relationships with the Company as of June 30, 2023 and 2022:
Name of related parties | Relationship with the Company | |
Manadr Medical Holdings Pte. Ltd. (dba. Healthlight Family Medicine Clinic) | Related company under common control of directors, Dr. Siaw Tung Yeng and Dr. Rachel Teoh Pui Pui | |
Kim JL Healthcare Pte. Ltd. (dba. Punggol Ripples Family Clinic) | Related company under common control of the same directors, Dr. Siaw Tung Yeng and Dr. Rachel Teoh Pui Pui | |
EC Family Clinic Pte. Ltd. | 50% owned by Dr. Rachel Teoh Pui Pui | |
Manadr Malaysia Sdn. Bhd. | 76% owned by Dr. Siaw Tung Yeng | |
Rachel Teoh Pui Pui | Director | |
Siaw Tung Yeng | Director | |
Nam Min Fern | Director | |
Teo Kian Huat | Director | |
Tsang Bih Shiou | Director |
The Company provided services to Manadr Medical Holdings Pte. Ltd. amounting to $401,253 and $544,594 for the year ended June 30, 2023 and 2022, respectively. At the same time, the Company received goods and services from Manadr Medical Holdings Pte. Ltd. amounting to $99,817 and $913,140 for the years ended June 30, 2023 and 2022, respectively. The receivables balance due from Manadr Medical Holdings Pte. Ltd. were $53,853 and $53,168 as of June 30, 2023 and 2022, respectively. The payable balance due to Manadr Medical Holdings Pte. Ltd. were $6,315 and $23,964 as of June 30, 2023 and 2022, respectively. The credit term is 30 days.
The Company provided services to Kim JL Healthcare Pte. Ltd. amounting to $31,077 and $3,332 for the years ended June 30, 2023 and 2022, respectively. At the same time, the Company received goods and services from Kim JL Healthcare Pte. Ltd. amounting to $46 and $1,695 for the years ended June 30, 2023 and 2022, respectively. The receivables balance due from Kim JL Healthcare Pte. Ltd. were $12,471 and $9,006 as of June 30, 2023 and 2022, respectively. The payable balance due to Kim JL Healthcare Pte. Ltd. were $nil and $210 as of June 30, 2023 and 2022, respectively. The credit term is 30 days.
The Company provided services to EC Family Clinic Pte. Ltd. amounting to $2,589 and $1,759 for the years ended June 30, 2023 and 2022, respectively. At the same time, the Company received goods and services from Kim JL Healthcare Pte. Ltd. amounting to $7 and $15 for the years ended June 30, 2023 and 2022, respectively. The receivables balance due from EC Family Clinic Pte. Ltd. were $2,410 and $1,508 as of June 30, 2023 and 2022, respectively. The credit term is 30 days.
The receivables balance due from Manadr Malaysia Sdn. Bhd. were $38,161 and $37,051 as of June 30, 2023 and 2022, respectively. Such balance is interest free, unsecured, and due on demand.
The Company received goods and services from Rachel Teoh Pui Pui amounting to $2,798 and $14,455 for the year ended June 30, 2023 and 2022, respectively. The payable balance to Rachel Teoh Pui Pui were $nil and $13,618 as of June 30, 2023 and 2022, respectively. Such balance is interest free, unsecured, and due on demand.
The Company received goods and services from Siaw Tung Yeng amounting to $28,564 and $27,787 for the year ended June 30, 2023 and 2022, respectively. The payable balance to Siaw Tung Yeng were $994,708 and $963,543 as of June 30, 2023 and 2022, respectively. Such balance is interest free, unsecured, and due on demand. As of the date the financial statements were available to be issued, the Company did not make any payment. On 21 April 2022, the payable balance to Siaw Tung Yeng amounted $4,773,795 being capitalized into ordinary shares capital.
The Company accrued the annual directors’ fee payable to Nam Min Fern, Teo Kian Huat and Tsang Bih Shiou amounted $7,376 each.
F-22 |
MOBILE-HEALTH NETWORK SOLUTIONS |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
12 | Segment Reporting |
Based on management’s assessment, the Company has determined that it has two operating segments as follows:
1) Telemedicine and other services
2) Sale of medicine and medical devices
As of June, 30 | ||||||||
2023 | 2022 | |||||||
US$ | US$ | |||||||
Telemedicine and other services | 6,898,166 | 6,125,438 | ||||||
Sale of medicine and medical devices | 976,720 | 863,411 | ||||||
Total revenue | 7,874,886 | 6,988,849 | ||||||
Telemedicine and other services | 5,948,232 | 4,283,480 | ||||||
Sale of medicine and medical devices | 831,660 | 770,263 | ||||||
Total cost of revenue | 6,779,892 | 5,053,743 |
The following tables present summary information by segment for the years ended June 30, 2023 and 2022, respectively:
Years Ended June 30, 2023 | ||||||||||||
Telemedicine and other services | Sale of medicine and medical devices | Consolidated totals | ||||||||||
US$ | US$ | US$ | ||||||||||
Revenue | 6,898,166 | 976,720 | 7,874,886 | |||||||||
Gross profit | 949,934 | 145,060 | 1,094,994 | |||||||||
Loss before income tax expense | (2,965,165 | ) | (248,195 | ) | (3,213,360 | ) | ||||||
Net loss | (2,965,165 | ) | (248,195 | ) | (3,213,360 | ) | ||||||
Total reportable assets | 3,121,643 | 320,896 | 3,442,539 |
Years Ended June 30, 2022 | ||||||||||||
Telemedicine services | Sale of medicine and medical devices | Consolidated totals | ||||||||||
US$ | US$ | US$ | ||||||||||
Revenue | 6,125,438 | 863,411 | 6,988,849 | |||||||||
Gross profit | 1,841,958 | 93,148 | 1,935,106 | |||||||||
Income (Loss) before income tax expense | 329,827 | (71,355 | ) | 258,472 | ||||||||
Net income (loss) | 164,052 | (71,355 | ) | 92,697 | ||||||||
Total reportable assets | 10,529,651 | 225,973 | 10,755,624 |
The Company sells at one geographical location which is Singapore.
F-23 |
MOBILE-HEALTH NETWORK SOLUTIONS |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
13 | Taxes |
Income Taxes
Caymans
The Company is domiciled in the Cayman Island. The locality currently enjoys permanent income tax holidays; accordingly, the Company does not accrue for income taxes.
Singapore
The Singapore subsidiaries are incorporated in Singapore and are subject to Singapore Corporate Tax on the taxable income as reported in its statutory financial statements adjusted in accordance with relevant Singapore tax laws. The applicable tax rate is 17% in Singapore, with 75% of the first S$10,000 taxable income and 50% of the next S$190,000 taxable income exempted from income tax.
Significant components of the provision for income taxes are as follows:
Years Ended June 30, | ||||||||
2023 | 2022 | |||||||
US$ | US$ | |||||||
Income tax expense is comprised of the following: | ||||||||
Current | - | 165,226 | ||||||
Deferred | - | 549 | ||||||
Total income tax expense | - | 165,775 |
A reconciliation between the Company’s actual provision for income tax and the provision at the Singapore statutory rate was as follows:
Years Ended June 30, | ||||||||
2023 | 2022 | |||||||
US$ | US$ | |||||||
(Loss) Income before tax | (3,213,360 | ) | 258,472 | |||||
(Loss) Income tax expense computed at statutory rate | (17.0 | %) | 17.0 | % | ||||
Reconciling items: | ||||||||
Non-deductible expenses | 4.7 | % | 22.8 | % | ||||
Income not subject to tax | (0.3 | %) | (6.5 | %) | ||||
Underprovision in respect of prior years | 0.0 | % | 8.8 | % | ||||
Utilization of previously unrecognized tax losses | 0.0 | % | (17.5 | )% | ||||
Deferred tax assets not recognised | 12.6 | % | 39.3 | % | ||||
Others | 0.0 | % | 0.2 | % | ||||
Effective tax rate | 0.0 | % | 64.1 | % |
F-24 |
MOBILE-HEALTH NETWORK SOLUTIONS |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
13 | Taxes (continued) |
Deferred tax assets
Significant components of deferred tax were as follows:
Years Ended June 30, | ||||||||
2023 | 2022 | |||||||
US$ | US$ | |||||||
Deferred tax assets, gross: | ||||||||
Net operating loss carried forward | 406,251 | 549 | ||||||
Valuation allowance | (406,251 | ) | (549 | ) | ||||
Deferred tax assets, net of valuation allowance | - | - |
In assessing the realizability of deferred tax assets, the Company only consider to the extent that it is probable that future taxable profits will be available against which the Company can utilize the benefits. After consideration of all the information available, the Company has recorded a full valuation allowance against its deferred tax assets as of June 30, 2023 and 2022, respectively, because the Company has determined that is it more likely than not that these assets will not be fully realized due to continuous net operating losses incurred in those geographic areas.
14 | Contingencies and commitment |
Operating lease:
The company entered into lease agreements to rent the office premises for its own use. The office lease agreements included Vision exchange office unit #07-04, #07-06 and #07-07 in Singapore and Icon 4 Tower office #234A in Vietnam. The company also entered into lease agreements to rent one clinic and pharmacy each for business operation purpose. The monthly lease fee for all these premises are approximately equivalent to $14,300, and the tenancy periods range about 1 -3 years. The company accounted for the lease arrangements under operating leases.
The lease commitments are disclosed in note 8.
Legal settlement
On November 8, 2022, a shareholder filed a claim against the Company in the High Court of the Republic of Singapore, in connection with a dispute arising from a subscription agreement entered into by the Company and the Ex-investor on April 21, 2022. As of June 30, 2022, no liability has been accrued for this claim as the suit was settled on January 18, 2023 with the Company purchasing 16,104 Class A Ordinary Shares back from the Ex-investor at an aggregate purchase price of $6,848,273 (S$9,000,000) as detailed in “Shares buyback” section in note 10.
F-25 |
MOBILE-HEALTH NETWORK SOLUTIONS |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
15 | Subsequent events |
The Company has assessed all events of transactions that occurred after June 30, 2023 through the date that these consolidated financial statements are available to be issued and other than the following, there are no further material subsequent events that require disclosure in these consolidated financial statements.
On August 1, 2023 and December 18, 2023, the Company granted options with exercise price of $1 per Option Share to employees to purchase a total of 4,439 Class A Ordinary Shares of a nominal or par value of US$0.001 each under the Incentive Plan. The fair value per Option Share was approximately $434 which gives aggregate fair value of the 4,439 Option Shares of approximately $1.9 million on the grant date. The $1.9 million share-based compensation expense will be amortized and recognized under salaries and benefits expense over the three-year vesting term starting from the grant date. The effectiveness of the IPO will trigger the immediately recognition of the remaining unamortized share-based compensation expense of the grant on income statement. The details of the Incentive Plan are disclosed in note 10.
On August 14, 2023, the Company had issued 935 Class A Ordinary Shares of a nominal or par value of US$0.001 each at S$588.24 per share to three investors for a total consideration of $407,317 (S$550,000). The Company had received the consideration in full.
On September 18, 2023, the Company had issued 331 Class A Ordinary Shares of a nominal or par value of US$0.001 each at S$588.65 per share to three investors for a total consideration of $142,763 (S$194,843). The Company had received the cash subscription in full.
On October 5, 2023, the Company had issued 2,548 Class A Ordinary Shares of a nominal or par value of US$0.001 each at S$588.69 per share to three investors for a total consideration of $1,095,610 (S$1,500,000). The Company had received the cash subscription in full.
On December 15, 2023, the Company entered into a service agreement with Network 1 Financial Securities Inc. who is acting as an underwriter of the Company. The Company agreed to issue warrants to the underwriter to purchase a number of Class A Ordinary Shares equal to 7.5% of the total number of Class A Ordinary Shares sold in the IPO, including Class A Ordinary Shares issued upon exercise of underwriters’ over-allotment option at an exercise price equal to 125% of the public offering price of the Class A Ordinary Shares sold in the IPO. The warrants are exercisable commencing six months following the date of commencement of sales of the offering and for a period of five years thereafter, in whole or in part.
F-26 |
Until , 2024, all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers’ obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.
2,250,000 Class A Ordinary Shares Offered by Mobile-health Network Solutions
Mobile-health Network Solutions
Prospectus dated , 2024
The information in this preliminary prospectus is not complete and may be changed. The securities may not be sold until the registration statement filed with the U.S. Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting any offer to buy these securities in any jurisdiction where such offer or sale is not permitted.
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED , 2024
Mobile-health Network Solutions
3,091,667 Class A Ordinary Shares to be sold by the Selling Shareholders
This prospectus relates to the resale of 3,091,667 Class A Ordinary Shares by the Selling Shareholders named in this prospectus. We will not receive any of the proceeds from the sale of the Class A Ordinary Shares by the Selling Shareholders named in this prospectus.
We have reserved the symbol “MNDR” for purposes of listing our Class A Ordinary Shares on the NASDAQ Capital Market (“NASDAQ”) and have applied to list our Class A Ordinary Shares on the Nasdaq Capital Market. The closing of this resale offering is conditioned upon NASDAQ’s final approval of our listing application. We cannot assure you that our listing application will be approved; if it is not approved by NASDAQ, we will not proceed with this offering.
No sales of the Class A Ordinary Shares covered by this prospectus shall occur until after the closing of our initial public offering (the “IPO”). Any sales will occur from time to time at prevailing market prices or in privately negotiated prices. The distribution of securities offered hereby may be effected in one or more transactions that may take place in ordinary brokers’ transactions, privately negotiated transactions or through sales to one or more dealers for resale of such securities as principals. Usual and customary or specifically negotiated brokerage fees or commissions may be paid by the Selling Shareholders. The date of effectiveness of the registration statement for our IPO is 2024. The IPO price of the Class A Ordinary Shares is per share. On 2024, the last reported sale price of our Class A Ordinary Shares on NASDAQ was per share.
Investing in our Class A Ordinary Shares is highly speculative and involves a high degree of risk. Before buying any shares, you should carefully read the discussion of material risks of investing in our Class A Ordinary Shares in “Risk Factors” section of the Public Offering Prospectus.
We are both an “emerging growth company” and a “foreign private issuer” as defined under the applicable U.S. federal securities laws and, as such, may elect to comply with certain reduced public company reporting requirements for this and future filings. See “Prospectus Summary—Corporate Information.”
Neither the U.S. Securities and Exchange Commission nor any other regulatory body has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.
The date of this prospectus is , 2024
Class A Ordinary Shares offered by the Selling Shareholders: 3,091,667 Class A Ordinary Shares
Class A Ordinary Shares outstanding before the offering: 19,671,750 Class A Ordinary Shares
Class A Ordinary Shares to be outstanding after our initial public offering pursuant to the Public Offering Prospectus: 21,921,750 Class A Ordinary Shares
Use of proceeds: We will not receive any of the proceeds from the sale of the Class A Ordinary Shares by the Selling Shareholders named in this prospectus.
We will not receive any of the proceeds from the sale of Class A Ordinary Shares by the Selling Shareholders. In addition, the underwriter will not receive any compensation from the sale of the Class A Ordinary Shares by the Selling Shareholders. The Selling Shareholders will receive all of the net proceeds from the sales of Class A Ordinary Shares offered by the Selling Shareholders under this prospectus. We have agreed to pay all of the expenses of this registration, and the Selling Shareholders will not contribute to the costs.
We are registering the Selling Shareholders Shares. The Selling Shareholders are offering an aggregate of 3,091,667 Class A Ordinary Shares. See “Plan of Distribution for Stock Registered for Selling Shareholders.”
The table below lists the Selling Shareholders. The second column lists the number of Class A Ordinary Shares beneficially owned by each of the Selling Shareholders, prior to and immediately after this Offering. Prior to this Offering, 19,671,750 Class A Ordinary Shares were issued and outstanding. The third column lists the number of Class A Ordinary Shares being offered by this prospectus by the Selling Shareholders. None of the Selling Shareholders are officers, directors, or 5% or more shareholders of us. We have agreed to pay all of the expenses of this registration, and the Selling Shareholders will not contribute to the costs. The underwriter is not underwriting the shares of the Selling Shareholders. Any sales will occur from time to time at prevailing market prices or in privately negotiated prices. The distribution of securities offered hereby may be effected in one or more transactions that may take place in ordinary brokers’ transactions, privately negotiated transactions or through sales to one or more dealers for resale of such securities as principals. Usual and customary or specifically negotiated brokerage fees or commissions may be paid by the Selling Shareholders. Neither we nor the underwriter will receive any proceeds from the sales of any of the Class A Ordinary Shares being offered by the Selling Shareholders.
Name | Number of Class A Ordinary Shares Owned Prior to Offering | Maximum Number of Class A Ordinary Shares to be Sold Pursuant to this Prospectus* | Number of Class A Ordinary Shares Owned After Offering (if Sold) | % of Class A Ordinary Shares Owned After Offering (Excluding Over- Allotment) | % of Class A Ordinary Shares Owned After Offering (Including Over- Allotment of 337,500 Shares) | |||||||||||||||
Chua Koon Beng | 445,000 | 187,970 | 257,030 | 1.2 | 1.2 | |||||||||||||||
Foo Biao Da | 106,250 | 46,992 | 59,258 | 0.3 | 0.3 | |||||||||||||||
Diamond Hands Ventures Limited | 637,000 | 281,955 | 355,045 | 1.6 | 1.6 | |||||||||||||||
Houda Global Corporation | 850,000 | 850,000 | - | - | - | |||||||||||||||
Appoline Global Limited | 800,000 | 800,000 | - | - | - | |||||||||||||||
Soleil Venture Capital Pte. Ltd. | 924,750 | 924,750 | - | - | - | |||||||||||||||
Total | 3,763,000 | 3,091,667 | 671,333 | 3.1 | 3.1 |
* Assumes all shares registered for the Selling Shareholders are sold.
The Selling Shareholders named above acquired their shares in offerings that was exempt from registration under Section 4(a)(2) of the Securities Act. There was no placement agent for that offering.
SELLING SHAREHOLDERS PLAN OF DISTRIBUTION
We are registering 3,091,667 Class A Ordinary Shares for Selling Shareholders. We are required to pay all fees and expenses incidental to the registration of the shares of our securities to be offered and sold pursuant to this prospectus, including the shares of the Selling Shareholders. The Class A Ordinary Shares beneficially owned by the Selling Shareholders covered by this prospectus may be offered and sold from time to time by the Selling Shareholders, but only after our Class A Ordinary Shares have begun trading on the NASDAQ Capital Market. We anticipate receiving conditional approval to list our Class A Ordinary Shares on the NASDAQ Capital Market under the symbol “MNDR,” provided we have satisfied the initial listing requirements of NASDAQ. No assurance can be given that we will meet those requirements. If Class A Ordinary Shares are not approved for listing on NASDAQ, we will not consummate this offering. There can be no assurance that the Selling Shareholders will sell any or all of the shares offered under this prospectus.
The term “Selling Shareholders” includes donees, pledgees, transferees or other successors in interest selling securities received after the date of this prospectus from a Selling Shareholder as a gift, pledge, partnership distribution or other transfer. The Selling Shareholders will act independently of us in making decisions with respect to the timing, manner and size of each sale. Such sales may be made on one or more exchanges or in the over-the-counter market or otherwise, at prices and under terms then prevailing or at prices related to the then-current market price or in negotiated transactions. The Selling Shareholders may dispose of their securities by one or more of, or a combination of, the following methods once our Class A Ordinary Shares have commenced trading on the NASDAQ Capital Market:
● | distributions to members, partners, shareholders or other equity holders of the Selling Shareholders; | |
● | purchases by a broker-dealer as principal and resale by such broker-dealer for its own account pursuant to this prospectus; | |
● | ordinary brokerage transactions and transactions in which the broker solicits purchasers; | |
● | block trades in which the broker-dealer so engaged will attempt to sell the securities as agent but may position and resell a portion of the block as principal to facilitate the transaction; | |
● | an over-the-counter distribution in accordance with the rules of the NASDAQ; | |
● | through trading plans entered into by a Selling Shareholder pursuant to Rule 10b5-1 under the Exchange Act, that are in place at the time of an offering pursuant to this prospectus and any applicable prospectus supplement hereto that provide for periodic sales of their securities on the basis of parameters described in such trading plans; | |
● | to or through underwriters or broker-dealers; | |
● | in “at the market” offerings, as defined in Rule 415 under the Securities Act, at negotiated prices, at prices prevailing at the time of sale or at prices related to such prevailing market prices, including sales made directly on a national securities exchange or sales made through a market maker other than on an exchange or other similar offerings through sales agents; | |
● | in privately negotiated transactions; | |
● | in options transactions; | |
● | through a combination of any of the above methods of sale; or | |
● | any other method permitted pursuant to applicable law. |
In addition, any securities that qualify for sale pursuant to Rule 144 may be sold under Rule 144 rather than pursuant to this prospectus, provided that the Selling Shareholders meet the criteria and conform to the requirements of that rule, or pursuant to other available exemptions from the registration requirements of the Securities Act.
In effecting sales, broker-dealers or agents engaged by the Selling Shareholders may arrange for other broker-dealers to participate. Broker-dealers or agents may receive commissions, discounts or concessions from the Selling Shareholders in amounts to be negotiated immediately prior to the sale.
In offering the securities covered by this prospectus, the Selling Shareholders and any broker-dealers who execute sales for the Selling Shareholders may be deemed to be “underwriters” within the meaning of the Securities Act in connection with such sales. Any profits realized by the Selling Shareholders and the compensation of any broker-dealer may be deemed to be underwriting discounts and commissions. In order to comply with the securities laws of certain states, if applicable, the securities must be sold in such jurisdictions only through registered or licensed brokers or dealers. In addition, in certain states the securities may not be sold unless they have been registered or qualified for sale in the applicable state or an exemption from the registration or qualification requirement is available and is complied with.
We have advised the Selling Shareholders that the anti-manipulation rules of Regulation M under the Exchange Act may apply to sales of securities in the market and to the activities of the Selling Shareholders and their affiliates. In addition, we will make copies of this prospectus available to the Selling Shareholders for the purpose of satisfying the prospectus delivery requirements of the Securities Act. The Selling Shareholders may indemnify any broker-dealer that participates in transactions involving the sale of the securities against certain liabilities, including liabilities arising under the Securities Act.
At the time a particular offer of securities is made, if required, a prospectus supplement will be distributed that will set forth the number of securities being offered and the terms of the offering, including the name of any underwriter, dealer or agent, the purchase price paid by any underwriter, any discount, commission and other item constituting compensation, any discount, commission or concession allowed or reallowed or paid to any dealer, and the proposed selling price to the public.
The validity of the Class A Ordinary Shares offered in this offering and certain other legal matters as to Cayman Islands law will be passed upon for the Selling Shareholders by Harney Westwood & Riegels Singapore LLP, our counsel as to Cayman Islands law.
Mobile-health Network Solutions
3,091,667 Class A Ordinary Shares
to be sold by the Selling Shareholders
RESALE PROSPECTUS
February 22, 2024
You should rely only on the information contained in this Resale Prospectus. No dealer, salesperson or other person is authorized to give information that is not contained in this Resale Prospectus. This Resale Prospectus is not an offer to sell nor is it seeking an offer to buy these securities in any jurisdiction where the offer or sale is not permitted. The information contained in this Resale Prospectus is correct only as of the date of this prospectus, regardless of the time of the delivery of this prospectus or the sale of these securities.
Until , 2024, all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.
PART II
Information Not Required In Prospectus
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Cayman Islands law does not limit the extent to which a company’s articles of association may provide for indemnification of officers and directors, except to the extent any such provision may be held by the Cayman Islands courts to be contrary to public policy, such as to provide indemnification against civil fraud or the consequences of committing a crime. Under our post-offering memorandum and articles of association, which will become effective immediately prior to the completion of this offering, to the fullest extent permissible under Cayman Islands law every director and officer of our company shall be indemnified against all actions, proceedings, costs, charges, expenses, losses, damages or liabilities incurred or sustained by him, other than by reason of such person’s own dishonesty, willful default or fraud, in connection with the execution or discharge of his duties, powers, authorities or discretions as a director or officer of our company, including without prejudice to the generality of the foregoing, any costs, expenses, losses or liabilities incurred by him in defending (whether successfully or otherwise) any civil proceedings concerning our company or its affairs in any court whether in the Cayman Islands or elsewhere.
Pursuant to the form of indemnification agreements to be filed as Exhibit 10.2 to this Registration Statement, we will agree to indemnify our directors and officers against certain liabilities and expenses that they incur in connection with claims made by reason of their being a director or officer of our company.
The Underwriting Agreement, the form of which is filed as Exhibit 1.1 to this Registration Statement, will also provide for indemnification of the underwriter and its affiliates against liabilities relating to the offering arising under the Securities Act and the Exchange Act and to contribute to payments that the underwriters may be required to make for these liabilities.
Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended, may be permitted to directors, officers or persons controlling us pursuant to the foregoing provisions, we have been informed that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.
ITEM 7. RECENT SALES OF UNREGISTERED SECURITIES.
During the past three years, we have issued an aggregate of 15,645,750 Class A Ordinary Shares, as described below:
As of February 13, 2024, we have issued an aggregate of 62,583 Class A Ordinary Shares of a nominal or par value of US$0.001 each, comprising: (i) 16,649 Class A Ordinary Shares of a nominal or par value of US$0.001 each issued to 5 advisors in February 2024 in consideration for services provided to the Company pursuant to various agreements, (ii) 4,439 Class A Ordinary Shares of a nominal or par value of US$0.001 each issued to 22 employees pursuant to the provisions of the 2023 Employee Incentive Plan in February 2024, iii) 170 Class A Ordinary Shares of a nominal or par value of US$0.001 each issued in January 2024 to one investor for a total consideration of S$100,000; (iv) 2,879 Class A Ordinary Shares of a nominal or par value of US$0.001 each issued in September 2023 and October 2023 to four investors for a total consideration of S$1,694,843; (v) a total of 935 Class A Ordinary Shares of a nominal or par value of US$0.001 each issued to three investors on 14 August 2023 for a total consideration of S$550,000; (vi) 2,225 Class A Ordinary Shares of a nominal or par value of US$0.001 each issued to two investors on April 18, 2023 for a total consideration of S$1,250,000 pursuant to share subscription agreements, (vii) 11,631 Class A Ordinary Shares of a nominal or par value of US$0.001 each issued to three persons on May 8, 2022 pursuant to the capitalization of a shareholder loan of S$6,500,000, and (viii) 23,655 Class A Ordinary Shares of a nominal or par value of US$0.001 each issued to four investors on May 8, 2022 for a total consideration of S$13,220,000 pursuant to a share subscription agreement, among which 16,104 Class A Ordinary Shares of a nominal or par value of US$0.001 each held by one of the investors were subsequently repurchased by the Company in January 2023 for a consideration of S$9,000,000.
We believe that each of the issuances was exempt from registration pursuant to Section 4(2) of the Securities Act, regarding transactions not involving a public offering, or in reliance on Regulation S under the Securities Act regarding sales by an issuer in offshore transactions. None of the transactions involved an underwriter.
On February 14, 2024, shareholders’ resolutions were passed to authorize the sub-division of each of the Company’s issued and unissued shares into 250 Ordinary Shares such that the authorized share capital of the Company was changed from US$50,000 divided into 50,000,000 Ordinary Shares of a nominal or par value of US$0.001 each, comprising 25,000,000 Class A Ordinary Shares of a nominal or par value of US$0.001 each, and 25,000,000 Class B Ordinary Shares of a nominal or par value of US$0.001 each to US$50,000 divided into 12,500,000,000 Ordinary Shares of a nominal or par value of US$0.000004 each, comprising 6,250,000,000 Class A Ordinary Shares of a nominal or par value of US$0.000004 each, and 6,250,000,000 Class B Ordinary Shares of a nominal or par value of US$0.000004 each. Accordingly, the issued 62,583 Class A Ordinary Shares of a nominal or par value of US$0.001 each were divided into 15,645,750 Class A Ordinary Shares of a nominal or par value of US$0.000004 each.
II-1 |
ITEM 8. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits
See Exhibit Index beginning on page II-3 of this registration statement.
(b) Financial Statement Schedules
Schedules have been omitted because the information required to be set forth therein is not applicable or is shown in the Combined and Consolidated Financial Statements or the Notes thereto.
ITEM 9. UNDERTAKINGS.
The undersigned registrant hereby undertakes to provide to the underwriter at the closing specified in the underwriting agreements, certificates in such denominations and registered in such names as required by the underwriter to permit prompt delivery to each purchaser.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the provisions described in Item 6, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant under Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
II-2 |
Mobile-health
Network Solutions
Exhibit Index
* | To be filed by amendment. |
# | Portions of this exhibit have been omitted pursuant to Item 601(b)(10)(iv) of Regulation S-K on the basis that the Company customarily and actually treats that information as private or confidential and the omitted information is not material. |
II-3 |
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form F-1 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Singapore, on February 22, 2024.
Mobile-health Network Solutions | ||
By: | /s/ Siaw Tung Yeng | |
Name: | Siaw Tung Yeng | |
Title: | Co-Chief Executive Officer and Director |
II-4 |
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints each of Siaw Tung Yeng and Peng Chee Yong as an attorney-in-fact with full power of substitution, for him or her in any and all capacities, to do any and all acts and all things and to execute any and all instruments which said attorney and agent may deem necessary or desirable to enable the registrant to comply with the Securities Act of 1933, as amended (the “Securities Act”), and any rules, regulations and requirements of the Securities and Exchange Commission thereunder, in connection with the registration under the Securities Act of Class A Ordinary Shares of the registrant (the “Shares”), including, without limitation, the power and authority to sign the name of each of the undersigned in the capacities indicated below to the Registration Statement on Form F-1 (the “Registration Statement”) to be filed with the Securities and Exchange Commission with respect to such Shares, to any and all amendments or supplements to such Registration Statement, whether such amendments or supplements are filed before or after the effective date of such Registration Statement, to any related Registration Statement filed pursuant to Rule 462(b) under the Securities Act, and to any and all instruments or documents filed as part of or in connection with such Registration Statement or any and all amendments thereto, whether such amendments are filed before or after the effective date of such Registration Statement; and each of the undersigned hereby ratifies and confirms all that such attorney and agent shall do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
Signature | Title | Date | ||
/s/ Siaw Tung Yeng | Co-Chief Executive Officer and Director | February 22, 2024 | ||
Name: Siaw Tung Yeng | (principal executive officer) | |||
/s/ Peng Chee Yong | Chief Financial Officer | February 22, 2024 | ||
Name: Peng Chee Yong | (principal financial and principal accounting officer) |
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Signature of Authorized Representative in the United States
Pursuant to the Securities Act of 1933, as amended, the undersigned, the duly authorized representative in the United States of Mobile-health Network Solutions, has signed this registration statement or amendment thereto in New York, New York, United States on February 22, 2024.
Cogency Global Inc. Authorized U.S. Representative | ||
By: | /s/ Colleen A. De Vries | |
Name: | Colleen A. De Vries | |
Title: | Sr. Vice President on behalf of Cogency Global Inc. |
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Exhibit 1.1
MOBILE-HEALTH NETWORK SOLUTIONS
UNDERWRITING AGREEMENT
, 2024
Network 1 Financial Securities, Inc.
2 Bridge Avenue, Suite 241
Red Bank, NJ 07701
As Representative of the Underwriters
named on Schedule I hereto
Ladies and Gentlemen:
The undersigned, Mobile-health Network Solutions, an exempted company with limited liability incorporated under the laws of the Cayman Islands (the “Company”), hereby confirms its agreement (this “Agreement”) to issue and sell to the underwriter or underwriters, as the case may be, named in Schedule I hereto (each, an “Underwriter” and, collectively, the “Underwriters”), for whom Network 1 Financial Securities, Inc. is acting as representative (in such capacity, the “Representative”), (A) an aggregate of [ ] Class A ordinary shares (the “Firm Shares”), par value $0.000004 per share of the Company (“Class A Ordinary Shares”), and (B) at the election of the Representative, up to an additional [ ] Class A Ordinary Shares (the “Option Shares,” and together with the Firm Shares, the “Shares”). The offering and sale of the Shares contemplated by this Agreement is referred to herein as the “Offering”.
1. Purchase, Sale and Delivery of Securities; Over-Allotment Option.
(a) Purchase and Sale of Firm Shares. On the basis of the representations and warranties herein contained, but subject to the terms and conditions herein set forth, the Company agrees to issue and sell, severally and not jointly, to the several Underwriters, an aggregate of [ ] Firm Shares at a purchase price of $[ ] per Firm Share (the “Purchase Price”), which represents a 7.5% discount to the public offering price of $[ ] per Firm Share. The Underwriters, severally and not jointly, agree to purchase from the Company the number of Firm Shares set forth opposite their respective names on Schedule I attached hereto and made a part hereof.
(b) Payment and Delivery. Delivery and payment for the Firm Shares shall be made at 10:00 a.m., New York time, on the second Business Day (as defined in Section 24) following the effective date (the “Effective Date”) of the Registration Statement (as hereinafter defined) (or the third Business Day following the Effective Date, if the Registration Statement is declared effective after 4:30 p.m. New York time) or at such earlier time as shall be agreed upon by the Representative and the Company at such place as shall be agreed upon by the Representative and the Company. The hour and date of delivery and payment for the Firm Shares is called the “Closing Date.” The closing of the payment of the purchase price for, and delivery of certificates representing, the Firm Shares is referred to herein as the “Closing.” Payment for the Firm Shares shall be made on the Closing Date by wire transfer in immediately available funds upon delivery to you of certificates (in form and substance satisfactory to the Underwriters) representing the Firm Shares (or through the full fast transfer facilities of the Depository Trust Company (the “DTC”)) for the account of the Underwriters. The Firm Shares shall be registered in such name or names and in such authorized denominations as the Representative may request in writing at least one Business Day prior to the Closing Date. The Company will permit the Representative to examine and package the Firm Shares for delivery, at least one Business Day prior to the Closing Date. The Company shall not be obligated to sell or deliver the Firm Shares except upon tender of payment by the Representative for all the Firm Shares.
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(c) Over-allotment Option. For the purposes of covering any over-allotments in connection with the distribution and sale of the Firm Shares, the Representative on behalf of the Underwriters is hereby granted an option (the “Over-Allotment Option”) to purchase up to an additional [ ] Option Shares. The purchase price to be paid for each Option Share subject to the Over-Allotment Option will be equal to the Purchase Price.
(d) Exercise of Option. The Over-allotment Option granted pursuant to Section 1(c) hereof may be exercised by the Representative as to all (at any time) or any part (from time to time) of the Option Shares within 45 days after the Closing Date. The Underwriters will not be under any obligation to purchase any of such Option Shares prior to the exercise of the Over-allotment Option. The Over-allotment Option granted hereby may be exercised by the giving of written notice to the Company from the Representative, setting forth the number of Option Shares to be purchased and the date and time for delivery of and payment for such Option Shares, which will not be later than three (3) Business Days after the date of the notice or such other time as shall be agreed upon by the Company and the Representative, at such place as shall be agreed upon by the Company and the Representative. If such delivery and payment for all of the Option Shares does not occur on the Closing Date, the date and time of the closing for such Option Shares will be as set forth in the notice (hereinafter the “Option Closing Date”). Upon exercise of the Over-allotment Option, the Company will become obligated to allot and issue to the Underwriters, and, subject to the terms and conditions set forth herein, the Underwriters will become obligated to purchase, the number of Option Shares specified in such notice. If any Option Shares are to be purchased, each Underwriter agrees, severally and not jointly, to purchase the number of Option Shares (subject to such adjustments to eliminate fractional securities as the Representative may determine) that bears the same proportion to the number of Firm Shares to be purchased as set forth on Schedule I opposite the name of such Underwriter bears to the total number of Firm Shares.
(e) Payment and Delivery of Option Shares. Payment for Option Shares shall be made on the Option Closing Date by wire transfer in immediately available funds by deposit of the price for the Option Shares being purchased to the Company upon delivery to the Underwriters of certificates (in form and substance satisfactory to the Underwriters) representing such Option Shares (or through the full fast transfer facilities of DTC) for the account of the Underwriters. The certificates representing the Option Shares to be delivered will be in such denominations and registered in such names as the Representative requests not less than one Business Day prior to the Closing Date or the Option Closing Date, as the case may be, and will be made available to the Representative for inspection, checking and packaging at the aforesaid office of the Company’s transfer agent or correspondent not less than one Business Day prior to the Closing Date or the Option Closing Date, as the case may be.
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2. Representations and Warranties of the Company. The Company represents, warrants and covenants to, and agrees with, each of the Underwriters that, as of the date hereof and as of the Closing Date:
(a) The Company has prepared and filed with the Securities and Exchange Commission (the “Commission”) a registration statement on Form F-1 (Registration No. 333-[ ]), and amendments thereto, and related preliminary prospectuses for the registration under the Securities Act of 1933, as amended (the “Securities Act”), of the Securities which registration statement, as so amended (including post-effective amendments, if any), has been declared effective by the Commission and copies of which have heretofore been delivered to the Underwriters. The registration statement, as amended at the time it became effective, including the prospectus, financial statements, schedules, exhibits and other information (if any) deemed to be part of the registration statement at the time of effectiveness pursuant to Rule 430A under the Securities Act, is hereinafter referred to as the “Registration Statement.” If the Company has filed or is required pursuant to the terms hereof to file a registration statement pursuant to Rule 462(b) under the Securities Act registering additional securities (a “Rule 462(b) Registration Statement”), then, unless otherwise specified, any reference herein to the term “Registration Statement” shall be deemed to include such Rule 462(b) Registration Statement. Other than a Rule 462(b) Registration Statement, which, if filed, becomes effective upon filing, no other document with respect to the Registration Statement has heretofore been filed with the Commission. All of the Shares have been registered under the Securities Act pursuant to the Registration Statement or, if any Rule 462(b) Registration Statement is filed, will be duly registered under the Securities Act with the filing of such Rule 462(b) Registration Statement. The Company has responded to all requests of the Commission for additional or supplemental information. Based on communications from the Commission, no stop order suspending the effectiveness of either the Registration Statement or the Rule 462(b) Registration Statement, if any, has been issued and no proceeding for that purpose has been initiated or, to the Company’s knowledge, threatened by the Commission. The Company, if required by the Securities Act and the rules and regulations of the Commission (the “Rules and Regulations”), proposes to file a prospectus with the Commission pursuant to Rule 424(b) under the Securities Act (“Rule 424(b)”). The prospectus, in the form in which it is to be filed with the Commission pursuant to Rule 424(b), or, if the prospectus is not to be filed with the Commission pursuant to Rule 424(b), the prospectus in the form included as part of the Registration Statement at the time the Registration Statement became effective is hereinafter referred to as the “Prospectus,” except that if any revised prospectus or prospectus supplement shall be provided to the Underwriters by the Company for use in connection with the Offering which differs from the Prospectus (whether or not such revised prospectus or prospectus supplement is required to be filed by the Company pursuant to Rule 424(b)), the term “Prospectus” shall also refer to such revised prospectus or prospectus supplement, as the case may be, from and after the time it is first provided to the Underwriters for such use. Any preliminary prospectus subject to completion included in the Registration Statement or filed with the Commission pursuant to Rule 424(a) under the Securities Act is hereafter called a “Preliminary Prospectus.” Any reference herein to the Registration Statement, any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include the exhibits incorporated by reference therein pursuant to the Rules and Regulations on or before the Effective Date of the Registration Statement, the date of such Preliminary Prospectus or the date of the Prospectus, as the case may be. Any reference herein to the terms “amend,” “amendment” or “supplement” with respect to the Registration Statement, any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include: (i) the filing of any document under the Securities Exchange Act of 1934, as amended, and together with the Rules and Regulations promulgated thereunder (the “Exchange Act”) after the Effective Date, the date of such Preliminary Prospectus or the date of the Prospectus, as the case may be, which is incorporated therein by reference, and (ii) any such document so filed. All references in this Agreement to the Registration Statement, the Rule 462(b) Registration Statement, a Preliminary Prospectus and the Prospectus, or any amendments or supplements to any of the foregoing, shall be deemed to include any copy thereof filed with the Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval System (“EDGAR”). The Prospectus delivered to the Underwriters for use in connection with the Offering was or will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T promulgated by the Commission.
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(b) At the time of the effectiveness of the Registration Statement or any Rule 462(b) Registration Statement or the effectiveness of any post-effective amendment to the Registration Statement, when the Prospectus is first filed with the Commission pursuant to Rule 424(b), when any supplement to or amendment of the Prospectus is filed with the Commission, when any document filed under the Exchange Act was or is filed, at all other subsequent times until the completion of the public offer and sale of the Securities, and at the Closing Date, if any, the Registration Statement and the Prospectus and any amendments thereof and supplements or exhibits thereto complied or will comply in all material respects with the applicable provisions of the Securities Act, the Exchange Act and the Rules and Regulations, and did not and will not, as of the date of such amendment or supplement, contain an untrue statement of a material fact and did not and will not, as of the date of such amendment or supplement, omit to state any material fact required to be stated therein or necessary in order to make the statements therein: (i) in the case of the Registration Statement, not misleading, and (ii) in the case of the Prospectus, in light of the circumstances under which they were made as of its date, not misleading. When any Preliminary Prospectus was first filed with the Commission (whether filed as part of the registration statement for the registration of the Shares or any amendment thereto or pursuant to Rule 424(a) under the Securities Act) and when any amendment thereof or supplement thereto was first filed with the Commission, such Preliminary Prospectus and any amendments thereof and supplements thereto complied in all material respects with the applicable provisions of the Securities Act, the Exchange Act and the Rules and Regulations and did not contain an untrue statement of a material fact and did not omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. No representation and warranty is made in this subsection (b), however, with respect to any information contained in or omitted from the Registration Statement or the Prospectus or any related Preliminary Prospectus or any amendment thereof or supplement thereto in reliance upon and in conformity with information furnished in writing to the Company by or on behalf of any Underwriter through the Representative specifically for use therein. The parties acknowledge and agree that such information provided by or on behalf of any Underwriter consists solely of: the statements set forth in the “Underwriting” section of the Prospectus only insofar as such statements relate to the names and corresponding share amounts set forth in the table of Underwriters, the amount of selling concession and re-allowance or to over-allotment and related activities that may be undertaken by the Underwriters and the paragraph relating to stabilization by the Underwriters (the “Underwriters’ Information”).
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(c) Neither: (i) any Issuer-Represented General Free Writing Prospectus(es) (as defined below) issued at or prior to the Applicable Time (as defined below) and the Statutory Prospectus (as defined below), all considered together (collectively, the “General Disclosure Package”), nor (ii) any individual Issuer-Represented Limited-Use Free Writing Prospectus(es) (as defined below) when considered together with the General Disclosure Package, includes or included as of the Applicable Time any untrue statement of a material fact or omits or omitted as of the Applicable Time to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The preceding sentence does not apply to statements in or omissions from any Statutory Prospectus included in the Registration Statement, the General Disclosure Package or any Issuer-Represented Limited-Use Free Writing Prospectus (as defined below) in conformity with the Underwriters’ Information. Each of (i) any electronic road show or investor presentation (including without limitation any “bona fide electronic road show” as defined in Rule 433(h)(5) under the Securities Act) delivered to and approved by the Underwriters for use in connection with the marketing of the Offering as of the time of their use and at the Closing Date and on each Option Closing Date, if any and (ii) any individual Written Testing-the-Waters Communication (as defined herein), when considered together with the General Disclosure Package at the Closing Date and on each Option Closing Date, if any, did not and will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.
(d) Each Issuer-Represented Free Writing Prospectus, as of its issue date and at all subsequent times until the Closing Date or until any earlier date that the Company notified or notifies the Representative as described in the next sentence, did not, does not and will not include any information that conflicted, conflicts or will conflict with the information contained in the then-current Registration Statement, Statutory Prospectus or Prospectus. If at any time following issuance of an Issuer-Represented Free Writing Prospectus there occurred or occurs an event or development as a result of which such Issuer-Represented Free Writing Prospectus conflicted or would conflict with the information contained in the then-current Registration Statement, Statutory Prospectus or Prospectus relating to the Shares or included or would include an untrue statement of a material fact or omitted or would omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances prevailing at that subsequent time, not misleading, the Company has notified or will notify promptly the Representative so that any use of such Issuer-Represented Free Writing Prospectus may cease until it is promptly amended or supplemented by the Company, at its own expense, to eliminate or correct such conflict, untrue statement or omission. The preceding two sentences do not apply to statements in or omissions from any Issuer-Represented Free Writing Prospectus in conformity with the Underwriters’ Information.
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(e) The Company has not distributed and will not distribute any prospectus or other offering material in connection with the offering and sale of the Shares other than the General Disclosure Package, any Issuer-Represented Limited-Use Free Writing Prospectus or the Prospectus or other materials permitted by the Securities Act to be distributed by the Company. Unless the Company obtains the prior consent of the Representative, the Company has not made and will not make any offer relating to the Shares that would constitute an “issuer free writing prospectus,” as defined in Rule 433 under the Securities Act, or that would otherwise constitute a “free writing prospectus,” as defined in Rule 405 under the Securities Act, required to be filed with the Commission; provided that the prior written consent of the Representative shall be deemed to have been given in respect of any Issuer-Represented General Free Writing Prospectuses referenced on Schedule III attached hereto. The Company has complied and will comply with the requirements of Rules 164 and 433 under the Securities Act applicable to any Issuer-Represented Free Writing Prospectus as of its issue date and at all subsequent times through the Closing Date, including timely filing with the Commission where required, legending and record keeping. To the extent an electronic road show is used, the Company has satisfied and will satisfy the conditions in Rule 433 under the Securities Act to avoid a requirement to file with the Commission any electronic road show.
(f) The Representative agrees that, unless it obtains the prior written consent of the Company, it will not make any offer relating to the Shares that would constitute an Issuer-Represented Free Writing Prospectus or that would otherwise (without taking into account any approval, authorization, use or reference thereto by the Company) constitute a “free writing prospectus” required to be filed by the Company with the Commission or retained by the Company under Rule 433 of the Securities Act; provided that the prior written consent of the Company hereto shall be deemed to have been given in respect of any Issuer-Represented General Free Writing Prospectuses referenced on Schedule III attached hereto.
(g) As used in this Agreement, the terms set forth below shall have the following meanings:
(i) “Applicable Time” means [ ], 2024, 5:30 p.m. (Eastern time) on the date of this Agreement.
(ii) “Statutory Prospectus” as of any time means the prospectus that is included in the Registration Statement immediately prior to that time. For purposes of this definition, information contained in a form of prospectus that is deemed retroactively to be a part of the Registration Statement pursuant to Rule 430A or 430B shall be considered to be included in the Statutory Prospectus as of the actual time that form of prospectus is filed with the Commission pursuant to Rule 424(b) under the Securities Act.
(iii) “Issuer-Represented Free Writing Prospectus” means any “issuer free writing prospectus,” as defined in Rule 433 under the Securities Act, relating to the Shares that (A) is required to be filed with the Commission by the Company, or (B) is exempt from filing pursuant to Rule 433(d)(5)(i) under the Securities Act because it contains a description of the Shares or of the Offering that does not reflect the final terms or pursuant to Rule 433(d)(8)(ii) because it is a “bona fide electronic road show,” as defined in Rule 433 under the Securities Act, in each case in the form filed or required to be filed with the Commission or, if not required to be filed, in the form retained in the Company’s records pursuant to Rule 433(g) under the Securities Act.
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(iv) “Issuer-Represented General Free Writing Prospectus” means any Issuer-Represented Free Writing Prospectus that is intended for general distribution to prospective investors, as evidenced by its being specified in Schedule III to this Agreement.
(v) “Issuer-Represented Limited-Use Free Writing Prospectus” means any Issuer-Represented Free Writing Prospectus that is not an Issuer-Represented General Free Writing Prospectus. The term Issuer-Represented Limited-Use Free Writing Prospectus also includes any “bona fide electronic road show,” as defined in Rule 433 under the Securities Act, that is made available without restriction pursuant to Rule 433(d)(8)(ii), even though not required to be filed with the Commission.
(h) To the best knowledge of the Company, Simon & Edward, LLP (the “Auditor”), whose reports relating to the Company are included in the Registration Statement, the General Disclosure Package and the Prospectus is an independent registered public accounting firm as required by the Securities Act, the Exchange Act and the Rules and Regulations and the Public Company Accounting Oversight Board (the “PCAOB”). To the Company’s knowledge, the Auditor is not in violation of the auditor independence requirements of the Sarbanes-Oxley Act of 2002, as amended (“Sarbanes-Oxley”). The Auditor has not, during the periods covered by the financial statements included in the Registration Statement, the General Disclosure Package and the Prospectus, provided to the Company any non-audit services, as such term is used in Section 10A(g) of the Exchange Act.
(i) Subsequent to the respective dates as of which information is presented in the Registration Statement, the General Disclosure Package and the Prospectus, and except as disclosed in the Registration Statement, the General Disclosure Package and the Prospectus: (i) the Company has not declared, paid or made any dividends or other distributions of any kind on or in respect of its capital stock, and (ii) there has been no material adverse change (or, to the knowledge of the Company, any development which would reasonably be expected to result in a material adverse change in the future), whether or not arising from transactions in the ordinary course of business, in or affecting: (A) the business, condition (financial or otherwise), results of operations, shareholders’ equity, properties or prospects of the Company; or (B) the Offering or consummation of any of the other transactions contemplated by this Agreement, the Registration Statement, the General Disclosure Package and the Prospectus (a “Material Adverse Change”). Since the date of the latest balance sheet presented in the Registration Statement, the General Disclosure Package and the Prospectus, the Company has not incurred or undertaken any liabilities or obligations, whether direct or indirect, liquidated or contingent, matured or unmatured, or entered into any transactions, including any acquisition or disposition of any business or asset, which are material to the Company, except for liabilities, obligations and transactions which are disclosed in the Registration Statement, the General Disclosure Package and the Prospectus.
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(j) As of the dates indicated in the Registration Statement, the General Disclosure Package and the Prospectus, the authorized, issued and outstanding capital stock of the Company were as set forth in the Registration Statement, the General Disclosure Package and the Prospectus in the column headed “Actual” under the section thereof captioned “Capitalization” and, after giving effect to the Offering and the other transactions (excluding the offer and sale of the Option Shares) contemplated by this Agreement, the Registration Statement, the General Disclosure Package and the Prospectus, will be as set forth in the column headed “As Adjusted” in such section. All of the issued shares of the Company, including the outstanding Class A Ordinary Shares and Class B ordinary shares (the “Class B Ordinary Shares,” collectively with the Class A Ordinary Shares, the “Ordinary Shares”)) of the Company, have been duly authorized and validly issued and are fully paid and non-assessable and have been issued in compliance with all applicable state, federal and securities laws and none of those shares was issued in violation of any preemptive rights, rights of first refusal or other similar rights to the extent any such rights were not waived; the Shares have been duly authorized and, when issued and delivered against payment therefore as provided in this Agreement, will be validly issued, fully paid and non-assessable, and the issuance of the Shares is not subject to any preemptive rights, rights of first refusal or other similar rights that have not heretofore been waived (with copies of such waivers provided to the Underwriters); and no holder of any Shares or any Ordinary Shares is or will be subject to personal liability by reason of being such a holder. The Shares conform to the descriptions thereof contained in the Registration Statement, the General Disclosure Package and the Prospectus.
(k) Except as described in the Registration Statement, the General Disclosure Package and the Prospectus, (A) there are no outstanding rights (contractual or otherwise), warrants or options to acquire, or instruments convertible into or exchangeable for, or agreements or understandings with respect to the sale or issuance of, any shares of or other equity interest in the Company or any of its Subsidiaries and (B) there are no contracts, agreements or understandings between the Company and/or any of its Subsidiaries and any person granting such person the right to require the Company to file a registration statement under the Securities Act or otherwise register any securities of the Company owned or to be owned by such person and any such rights so disclosed have been waived by the holders thereof in connection with this Agreement and the transactions contemplated hereby including the Offering;
(l) The Company is a “foreign private issuer” within the meaning of Rule 405 under the Securities Act.
(m) The subsidiaries of the Company (the “Subsidiaries”), together with their respective jurisdictions of incorporation are listed on Exhibit 21.1 to the Registration Statement. Each of the Subsidiaries is directly or indirectly wholly-owned by the Company and no person or entity has any right to acquire any equity interest in any of the Subsidiaries. Except as otherwise disclosed in the Registration Statement, the General Disclosure Package and the Prospectus, the Company holds no ownership or other interest, nominal or beneficial, direct or indirect, in any corporation, partnership, joint venture or other business.
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(n) Each of the Company and its Subsidiaries has been duly incorporated and validly exists as a company or corporation, in good standing under the laws of the jurisdiction of its incorporation or has been duly formed and validly exists as a limited liability company under the laws of the jurisdiction of its incorporation. The Company and each of its Subsidiaries have all requisite power and authority to carry on their respective business as it is currently being conducted and as described in the Registration Statement, the General Disclosure Package and the Prospectus, and to own, lease and operate its properties. Each of the Company and its Subsidiaries is duly qualified to do business and is in good standing as a foreign corporation, partnership or limited liability company in each jurisdiction in which the character or location of its properties (owned, leased or licensed) or the nature or conduct of its business makes such qualification necessary, except, in each case, for those failures to be so qualified or in good standing which (individually and in the aggregate) would not reasonably be expected to have a material adverse effect on: (i) the business, condition (financial or otherwise), results of operations, shareholders’ equity, properties or prospects of the Company and its Subsidiaries, considered as a whole; or (ii) the Offering or consummation of any of the other transactions contemplated by this Agreement, the Registration Statement, the General Disclosure Package and the Prospectus (any such effect being a “Material Adverse Effect”).
(o) To the knowledge of the Company, neither the Company nor any of its Subsidiaries is: (i) in violation of its amended and restated memorandum and articles of association, bylaws, or other organizational documents (ii) in default under any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which it is a party or by which it is bound or to which any of its property or assets is subject; and no event has occurred which, with notice or lapse of time or both, would constitute a default under or result in the creation or imposition of any lien, security interest, charge or other encumbrance (a “Lien”) upon any of its property or assets pursuant to, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which it is a party or by which it is bound or to which any of its property or assets is subject, or (iii) in violation in any respect of any law, rule, regulation, ordinance, directive, judgment, decree or order of any judicial, regulatory or other legal or governmental agency or body, foreign or domestic, except, in the case of subsections (ii) and (iii) above, for such violations or defaults which (individually or in the aggregate) would not reasonably be expected to have a Material Adverse Effect.
(p) The Company has full right, power and authority to execute and deliver this Agreement and all other agreements, documents, certificates and instruments required to be delivered pursuant to this Agreement. The Company has duly and validly authorized this Agreement and each of the transactions contemplated thereby. This Agreement has been duly and validly executed and delivered by the Company and constitutes the legal, valid and binding obligations of the Company and are enforceable against the Company in accordance with their terms, except (i) as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally; (ii) as enforceability of any indemnification or contribution provision may be limited under federal and state securities laws; and (iii) that the remedy of specific performance and injunctive and other forms of equitable relief may be subject to the equitable defenses and to the discretion of the court before which any proceeding therefor may be brought.
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(q) The execution, delivery, and performance by the Company of this Agreement and all other agreements, documents, certificates and instruments required to be delivered pursuant to this Agreement, and consummation of the transactions contemplated hereby and thereby do not and will not: (i) conflict with, require consent under or result in a breach of any of the terms and provisions of, or constitute a default (or an event which with notice or lapse of time, or both, would constitute a default) under, or result in the creation or imposition of any Lien upon any property or assets of the Company or any of its Subsidiaries pursuant to, any indenture, mortgage, deed of trust, loan agreement or other agreement, instrument, franchise, license or permit to which the Company or any of its Subsidiaries is a party or by which the Company, any of its Subsidiaries or any of their respective properties, operations or assets may be bound or (ii) violate or conflict with any provision of the amended and restated memorandum and articles of incorporation, by-laws, or other organizational documents of the Company or any of its Subsidiaries, or (iii) violate or conflict with any law, rule, regulation, ordinance, directive, judgment, decree or order of any judicial, regulatory or other legal or governmental agency or body, domestic or foreign applicable to the Company or any of its Subsidiaries, or (iv) except as disclosed in the Registration Statement, the General Disclosure Package and the Prospectus, trigger a reset or repricing of any outstanding securities of the Company or any of its Subsidiaries, except in the case of subsections (i), (iii) and (iv) above, which would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(r) Except as disclosed in the Registration Statement, the General Disclosure Package and the Prospectus, the Company and each of its Subsidiaries have all material consents, approvals, authorizations, orders, registrations, qualifications, licenses, filings and permits of, with and from all judicial, regulatory and other legal or governmental agencies and bodies and all third parties, foreign and domestic (collectively, the “Consents”), to own, lease and operate their respective properties and conduct their respective businesses as they are now being conducted and as disclosed in the Registration Statement, the General Disclosure Package and the Prospectus, and each such Consent is valid and in full force and effect, except which (individually or in the aggregate), in each such case, would not reasonably be expected to have a Material Adverse Effect. Neither the Company nor any of its Subsidiaries has received notice of any investigation or proceedings which results in or, if decided adversely to the Company or any of its Subsidiaries could reasonably be expected to result in, the revocation of, or imposition of a materially burdensome restriction on, any Consent. No Consent contains a materially burdensome restriction not adequately disclosed in the Registration Statement, the General Disclosure Package and the Prospectus.
(s) The Company and each of its Subsidiaries is in compliance with all material applicable laws, rules, regulations, ordinances, directives, judgments, decrees and orders, foreign and domestic, except for any non-compliance the consequences of which would not have or reasonably be expected to have a Material Adverse Effect.).
(t) The Company has filed with the Commission a Form 8-A (File Number 001-[ ]) providing for the registration of the Class A Ordinary Shares (the “Form 8-A Registration Statement”). The Class A Ordinary Shares are registered pursuant to Section 12(b) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Form 8-A Registration Statement was declared effective by the Commission on or prior to the date hereof. The Company has taken no action designed to, or likely to have the effect of, terminating the registration of the Class A Ordinary Shares under the Exchange Act, nor has the Company received any notification that the Commission is contemplating terminating such registration;
(u) The Class A Ordinary Shares have been approved for listing on the NASDAQ Capital Market, subject to official notice of issuance (the “Exchange”), and the Company has taken no action designed to, or likely to have the effect of, delisting the Class A Ordinary Shares from the Exchange, nor has the Company received any notification that the Exchange is contemplating terminating such listing.
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(v) No consent of, with or from any judicial, regulatory or other legal or governmental agency or body or any third party, foreign or domestic is required for the execution, delivery and performance of this Agreement or the consummation of each of the transactions contemplated hereby and thereby, including the issuance, sale and delivery of the Shares to be issued, sold and delivered hereunder, except (i) such as may have previously been obtained (with copies of such consents provided to the Underwriters), (ii) the registration under the Securities Act of the Shares, which has become effective, (iii) such consents as may be required under state securities or blue sky laws or the by-laws and rules of the Nasdaq Capital Market, and (iii) the FINRA in connection with the purchase and distribution of the Shares by the Underwriters, each of which has been obtained and is in full force and effect.
(w) Except as disclosed in the Registration Statement, the General Disclosure Package and the Prospectus, there is no judicial, regulatory, arbitral or other legal or governmental proceeding or other litigation or arbitration, domestic or foreign, pending to which the Company or any of its Subsidiaries is a party or of which any property, operations or assets of the Company or any of its Subsidiaries is the subject which, individually or in the aggregate, if determined adversely to the Company or any of its Subsidiaries would reasonably be expected to have a Material Adverse Effect. To the Company’s knowledge, except as disclosed in the Registration Statement, the General Disclosure Package and the Prospectus, no such proceeding, litigation or arbitration is threatened or contemplated and the defense of any such proceedings, litigation and arbitration against or involving the Company or any of its Subsidiaries would not reasonably be expected to have a Material Adverse Effect.
(x) The financial statements, including the notes thereto, and the supporting schedules included in the Registration Statement, the General Disclosure Package and the Prospectus comply in all material respects with the requirements of the Securities Act and the Exchange Act, and present fairly in all material respects the financial position as of the dates indicated and the cash flows and results of operations for the periods specified of the Company and its Subsidiaries. Except as otherwise stated in the Registration Statement, the General Disclosure Package and the Prospectus, said financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) applied on a consistent basis throughout the periods involved, except in the case of unaudited financials which are subject to normal year-end adjustments and do not contain certain footnotes. The supporting schedules included in the Registration Statement, the General Disclosure Package and the Prospectus present fairly in all material respects the information required to be stated therein. No other financial statements or supporting schedules are required to be included or incorporated by reference in the Registration Statement, the General Disclosure Package or the Prospectus. The other financial information included in the Registration Statement, the General Disclosure Package and the Prospectus present fairly in all material respects the information included therein and have been prepared on a basis consistent with that of the financial statements that are included in the Registration Statement, the General Disclosure Package and the Prospectus and the books and records of the respective entities presented therein.
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(y) There are no pro forma or as adjusted financial statements which are required to be included in the Registration Statement, the General Disclosure Package and the Prospectus in accordance with Regulation S-X which have not been included as so required. The pro forma and pro forma as adjusted financial information included in the Registration Statement, the General Disclosure Package and the Prospectus has been properly compiled and prepared in accordance with the applicable requirements of the Securities Act and the Rules and Regulations and include all adjustments necessary to present fairly in accordance with GAAP the pro forma and as adjusted financial position of the respective entity or entities presented therein at the respective dates indicated and their cash flows and the results of operations for the respective periods specified. The assumptions used in preparing the pro forma and pro forma as adjusted financial information included in the Registration Statement, the General Disclosure Package and the Prospectus provide a reasonable basis for presenting the significant effects directly attributable to the transactions or events described therein. The related pro forma and pro forma as adjusted adjustments give appropriate effect to those assumptions; and the pro forma and pro forma as adjusted financial information reflect the proper application of those adjustments to the corresponding historical financial statement amounts.
(z) The statistical, industry-related and market-related data included in the Registration Statement, the General Disclosure Package and the Prospectus are based on or derived from sources which the Company reasonably and in good faith believes are reliable and accurate, and such data agree with the sources from which they are derived.
(aa) The Company has established and maintains disclosure controls and procedures over financial reporting (as defined in Rules 13a-15 and 15d-15 under the Exchange Act) and such controls and procedures are designed to ensure that information relating to the Company required to be disclosed in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. The Company has utilized such controls and procedures in preparing and evaluating the disclosures in the Registration Statement, in the General Disclosure Package and in the Prospectus.
(bb) Except as disclosed in the Registration Statement, the General Disclosure Package and the Prospectus, the Company’s board of directors has validly appointed an audit committee whose composition satisfies the requirements of the rules and regulations of the Nasdaq Stock Market and the board of directors and/or audit committee has adopted a charter that satisfies the requirements of the rules and regulations of the Nasdaq Stock Market. Except as disclosed in the Registration Statement, the General Disclosure Package and the Prospectus, neither the board of directors nor the audit committee has been informed, nor is the Company aware, of: (i) any significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; or (ii) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.
(cc) Neither the Company, its Subsidiaries or any of their respective Affiliates (as defined in the Securities Act) has taken, directly or indirectly, any action which constitutes or is designed to cause or result in, or which could reasonably be expected to constitute, cause or result in, the stabilization or manipulation of the price of any security to facilitate the sale or resale of the Shares.
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(dd) Neither the Company, its Subsidiaries or any of their respective Affiliates has, prior to the date hereof, made any offer or sale of any securities which are required to be “integrated” pursuant to the Securities Act or the Rules and Regulations with the offer and sale of the Shares pursuant to the Registration Statement. Except as disclosed in the Registration Statement, the General Disclosure Package, and the Prospectus, neither the Company nor, the Company’s knowledge, any of its Affiliates has sold or issued any Company’s securities during the six-month period preceding the date of the Prospectus, including but not limited to any sales pursuant to Rule 144A or Regulation D or Regulation S under the Securities Act.
(ee) To the knowledge of the Company, all information contained in the questionnaire completed by each of the Company’s officers and directors and 5% holders immediately prior to the Offering and provided to the Representative as well as the biographies of such officers and directors in the Registration Statement are true and correct in all material respects and the Company has not become aware of any information which would cause the information disclosed in the questionnaires completed by the directors and officers to become inaccurate and incorrect.
(ff) To the knowledge of the Company, no director or officer of the Company is subject to any non-competition agreement or non-solicitation agreement with any current employer or prior employer which could materially affect his ability to be and act in his respective capacity of the Company.
(gg) The Company is not and, at all times up to and including consummation of the transactions contemplated by this Agreement, and after giving effect to application of the net proceeds of the Offering, will not be, subject to registration as an “investment company” under the Investment Company Act of 1940, as amended, and is not and will not be an entity “controlled” by an “investment company” within the meaning of such act.
(hh) To the knowledge of the Company, no relationship, direct or indirect, exists between or among any of the Company or, to the knowledge of the Company, any Affiliate of the Company, on the one hand, and any director, officer, shareholder, customer or supplier of the Company or, to the knowledge of the Company, any Affiliate of the Company, on the other hand, which is required by the Securities Act, the Exchange Act or the Rules and Regulations to be described in the Registration Statement or the Prospectus which is not so described as required. There are no outstanding loans, advances (except normal advances for business expenses in the ordinary course of business) or guarantees of indebtedness by the Company to or for the benefit of any of the officers or directors of the Company or any of their respective family members. The Company has not, in violation of Sarbanes-Oxley directly or indirectly extended or maintained credit, arranged for the extension of credit, or renewed an extension of credit, in the form of a personal loan to or for any director or executive officer of the Company, except as disclosed in the Registration Statement, the General Disclosure Package and the Prospectus.
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(ii) The Company is in material compliance with the rules and regulations promulgated by the Nasdaq Stock Market (to the extent applicable to the Company prior to the listing of the Class A Ordinary Shares on the Nasdaq Capital Market) or any other governmental or self-regulatory entity or agency, except for such violations which, singly or in the aggregate, would not have a Material Adverse Effect. Without limiting the generality of the foregoing: (i) all members of the Company’s board of directors who are required to be “independent” (as that term is defined under applicable laws, rules and regulations), including, without limitation, all members of the audit committee of the Company’s board of directors, meet the qualifications of independence as set forth under applicable laws, rules and regulations and (ii) the audit committee of the Company’s board of directors has at least one member who is an “audit committee financial expert” (as that term is defined under applicable laws, rules and regulations).
(jj) To the knowledge of the Company, except as disclosed in the Registration Statement, the General Disclosure Package and the Prospectus, there are no contracts, agreements or understandings between the Company or any of its Subsidiaries and any person that would give rise to a valid claim against the Company or any of its Subsidiaries or, to the knowledge of the Company, any Underwriter for a brokerage commission, finder’s fee, financial consulting fee or other like payment in connection with the transactions contemplated by this Agreement or, to the knowledge of the Company, any arrangements, agreements, understandings, payments or issuance with respect to the Company or any of its officers, directors, shareholders, partners, employees or Affiliates that may affect the Underwriters’ compensation as determined by FINRA.
(kk) The Company and each of its Subsidiaries own or lease all such properties (other than intellectual property, which is covered by Section 2(ll)) as are necessary to the conduct of their respective business as presently operated as described in the Registration Statement, the General Disclosure Package and the Prospectus. The Company and each of its Subsidiaries do not own any real property. The Company and each of its Subsidiaries has good and marketable title to all personal property owned by them, in each case free and clear of all Liens except such as are described in the Registration Statement, the General Disclosure Package and the Prospectus or such as are not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect. Any real property and buildings held under lease or sublease by the Company or any of its Subsidiaries are held by it under valid, subsisting and, to the Company’s knowledge, enforceable leases with such exceptions as are not material to, and do not materially interfere with, the use made and proposed to be made of such property and buildings by the Company or any of its Subsidiaries. Neither the Company nor any of its Subsidiaries has received any notice of any claim adverse to its ownership of any real or personal property or of any claim against the continued possession of any real property, whether owned or held under lease or sublease by the Company or any of its Subsidiaries.
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(ll) Each of the Company and its Subsidiaries: (i) owns, possesses, or has the adequate right to use all patents, patent applications, trademarks, service marks, trade names, trademark registrations, service mark registrations, copyrights, licenses, formulae, customer lists, and know-how and other intellectual property (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures, “Intellectual Property”) necessary for the conduct of its businesses as being conducted and as described in the Registration Statement, the General Disclosure Package and Prospectus and (ii) has no knowledge that the conduct of its business conflicts or will conflict with the rights of others, and has not received any notice of any claim of conflict with, any right of others. Except as set forth in the Registration Statement, the General Disclosure Package or the Prospectus, neither the Company nor any of its Subsidiaries has granted or assigned to any other person any right to sell any of the products or services of the Company or any of its Subsidiaries. To the Company’s knowledge, there is no infringement by third parties of any such Intellectual Property; there is no pending or, to the Company’s knowledge, threatened action, suit, proceeding or claim by others challenging the rights of the Company or any of its Subsidiaries in or to any such Intellectual Property, and the Company is unaware of any facts which would form a reasonable basis for any such claim; and there is no pending or, to the Company’s knowledge, threatened action, suit, proceeding or claim by others that the Company or any of its Subsidiaries infringes or otherwise violates any patent, trademark, copyright, trade secret or other proprietary rights of others, and the Company is unaware of any other fact which would form a reasonable basis for any such claim. Except as set forth in the Registration Statement, the General Disclosure Package and the Prospectus, neither the Company nor any of its Subsidiaries has received any material claim for royalties or other compensation from any person, including any employee of the Company or any of its Subsidiaries who made inventive contributions to the technology or products of the Company or any of its Subsidiaries that are pending or unsettled, and except as set forth in the Registration Statement, the General Disclosure Package and the Prospectus, neither the Company nor any of its Subsidiaries has any obligation to pay material royalties to any person on account of inventive contributions.
(mm) The agreements and documents described in the Registration Statement, the General Disclosure Package and the Prospectus conform in all material respects to the descriptions thereof contained therein. Each agreement or other instrument (however characterized or described) to which the Company or any of its Subsidiaries is a party or by which any of their respective properties or business are or may be bound or affected and (i) that is referred to in the Registration Statement, the General Disclosure Package or the Prospectus or attached as an exhibit thereto, or (ii) is material to the businesses of the Company and its Subsidiaries, has been duly and validly executed by the Company or its Subsidiary, as the case may be, is in full force and effect in all material respects and is enforceable against the Company in accordance with its terms, except (x) as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally, (y) as enforceability of any indemnification or contribution provision may be limited under the foreign, federal and state securities laws, and (z) that the remedy of specific performance and injunctive and other forms of equitable relief may be subject to the equitable defenses and to the discretion of the court before which any proceeding therefor may be brought, and none of such agreements or instruments has been assigned by the Company or any of its Subsidiaries, and neither the Company nor any of its Subsidiaries, nor, to the Company’s knowledge, any other party is in breach or default thereunder and, to the Company’s knowledge, no event has occurred that, with the lapse of time or the giving of notice, or both, would constitute a breach or default thereunder, in any such case, which would result in a Material Adverse Effect.
(nn) The disclosures in the Registration Statement, the General Disclosure Package and the Prospectus concerning the effects of foreign, federal, state and local regulation on the respective businesses of the Company and each of its Subsidiaries as currently contemplated are correct in all material respects and do not omit to state a material fact necessary to make the statements therein, in light of the circumstances in which they were made, not misleading.
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(oo) Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect, each of the Company and its Subsidiaries (i) has made or filed all Cayman Islands, Singapore and other foreign income and franchise tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations and (iii) has set aside on its books provision reasonably adequate for the payment of all material taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company know of no basis for any such claim. The provisions for taxes payable, if any, shown on the financial statements filed with or as part of the Registration Statement are sufficient for all accrued and unpaid taxes, whether or not disputed, and for all periods to and including the dates of such consolidated financial statements. No deficiency assessment with respect to a proposed adjustment of the federal, state, local or foreign taxes of the Company or any of its Subsidiaries is pending or, to the Company’s knowledge, threatened. There is no tax lien, whether imposed by any federal, state, foreign or other taxing authority, outstanding against the assets, properties or business of the Company or any of its Subsidiaries, other than liens for taxes not yet delinquent, or being contested in good faith by appropriate proceedings and for which reserves in accordance with GAAP have been established in the Company’s books and records. The term “taxes” mean all federal, state, local, foreign , and other net income, gross income, gross receipts, sales, use, ad valorem, transfer, franchise, profits, license, lease, service, service use, withholding, payroll, employment, excise, severance, stamp, occupation, premium, property, windfall profits, customs, duties or other taxes, fees, assessments, or charges in the nature of taxes, together with any interest and any penalties, additions to tax, or additional amounts with respect thereto. The term “returns” means all returns, declarations, reports, statements, and other documents required to be filed in respect to taxes.
(pp) No labor disturbance or dispute by or with the employees of the Company or any of its Subsidiaries which, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect, currently exists or, to the Company’s knowledge, is threatened. The Company and each of its Subsidiaries are in compliance in all material respects with the labor and employment laws and collective bargaining agreements and extension orders applicable to their respective employees.
(qq) [Reserved].
(rr) [Reserved].
(ss) Except as disclosed in the Registration Statement, the General Disclosure Package and the Prospectus, and would not be reasonably expected, individually or in the aggregate, to have a Material Adverse Effect, the Company and each of its Subsidiaries has at all times operated its business in compliance with all Environmental Laws (as hereinafter defined), and no material expenditures are or will be required in order to comply therewith. Neither the Company nor any of its Subsidiaries has received any notice or communication that relates to or alleges any actual or potential violation or failure to comply with any Environmental Laws that would, individually or in the aggregate, be reasonably expected to have a Material Adverse Effect. As used herein, the term “Environmental Laws” means all applicable laws and regulations, including any licensing, permits or reporting requirements, and any action by a federal, state, local or foreign government entity pertaining to the protection of the environment, protection of public health, protection of worker health and safety, or the handling of hazardous materials.
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(tt) Except as would not result in a Material Adverse Effect, neither the Company nor any of its Subsidiaries has failed to file with the applicable regulatory authorities (any filing, declaration, listing, registration, report or submission that is required to be so filed for the business operation of the Company and its Subsidiaries as currently conducted. All such filings were in material compliance with applicable laws when filed and except as disclosed in the Registration Statement, the General Disclosure Package and the Prospectus, no deficiencies have been asserted in writing by any applicable regulatory authority with respect to any such filings, declarations, listings, registrations, reports or submissions. The Company and each of its Subsidiaries hold, and are in material compliance with, all franchises, grants, authorizations, licenses, permits, easements, consents, certificates and orders (“Permits”) of any governmental or self-regulatory agency, authority or body required for the conduct of the business of the Company and its Subsidiaries as currently conducted, and all such Permits are in full force and effect, in each case except where the failure to hold, or comply with, any of them is not reasonably likely to result in a Material Adverse Effect.
(uu) Neither the Company nor any Subsidiary of the Company nor, to the knowledge of the Company, any other person associated with or acting on behalf of the Company or any Subsidiary including, without limitation, any director, officer, agent or employee of the Company or any Subsidiary, has, directly or indirectly, while acting on behalf of the Company or such Subsidiary: (i) used any corporate funds for unlawful contributions, gifts, entertainment or other unlawful expenses relating to political activity; (ii) made any unlawful payment to foreign or domestic government officials or employees or to foreign or domestic political parties or campaigns from corporate funds; (iii) violated any provision of the Foreign Corrupt Practices Act of 1977, as amended; or (iv) made any other unlawful payment.
(vv) Neither the Company nor any of its Subsidiaries or Affiliates is subject to the Bank Holding Company Act of 1956, as amended (the “BHCA”) and to regulation by the Board of Governors of the Federal Reserve System (the “Federal Reserve”). Neither the Company nor any of its Subsidiaries or Affiliates owns or controls, directly or indirectly, five percent (5%) or more of the outstanding shares of any class of voting securities or twenty-five percent (25%) or more of the total equity of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve. Neither the Company nor any of its Subsidiaries or Affiliates exercises a controlling influence over the management or policies of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve.
(ww) The operations of the Company and each of its Subsidiaries are and have been conducted at all times in compliance in all material respects with applicable financial record keeping and reporting requirements and money laundering statutes of the Cayman Islands, Singapore and the United States and, to the Company’s knowledge, all other jurisdictions to which the Company is subject, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any applicable governmental agency (collectively, the “Money Laundering Laws”) and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any of its Subsidiaries with respect to the Money Laundering Laws is pending or, to the best knowledge of the Company, threatened.
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(xx) Neither the Company nor any of its Subsidiaries nor to the knowledge of the Company, any director, officer, agent, employee or Affiliate of the Company or any of its Subsidiaries is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”), the United Nations Security Council, the European Union, His Majesty’s Treasury (UK HMT), the Swiss Secretariat of Economic Affairs, the Monetary Authority of Singapore or other relevant authorities (collectively, “Sanctions”) nor located, organized or resident in a country or territory that is the subject of Sanctions. The Company will not directly or indirectly use the proceeds of the Offering, or lend, contribute or otherwise make available such proceeds to any joint venture partner or other person or entity, for the purpose of funding or financing the activities or business of or with any person or in any country or territory that at the time of such funding or facilitation is the subject of to any Sanctions, or in any other manner that will result in a violation of Sanctions by any person (including any person participating in the Offering). For the past five years, neither the Company nor any of its Subsidiaries has knowingly engaged in, is not knowingly engaged in, and will not engage in, any dealings or transactions with any person, or in any country or territory, that at the time of the dealing or transaction is or was the subject of Sanctions.
(yy) Except as set forth in the Registration Statement, the General Disclosure Package and the Prospectus, no brokerage or finder’s fees or commissions are or will be payable by the Company to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other person with respect to the transactions contemplated by this Agreement. There are no other arrangements, agreements or understandings of the Company or any of its Affiliates that may affect the Underwriters’ compensation, as determined by FINRA. The Company has not made any direct or indirect payments (in cash, securities or otherwise) to (i) any person, as a finder’s fee, investing fee or otherwise, in consideration of such person raising capital for the Company or introducing to the Company persons who provided capital to the Company, (ii) any FINRA member, or (iii) any person or entity that has any direct or indirect affiliation or association with any FINRA member participating in the Offering within the 12-month period prior to the date on which the Registration Statement was filed with the Commission (the “Filing Date”) or thereafter. To the Company’s knowledge, no (i) officer or director of the Company or its Subsidiaries, (ii) owner of 10% or more of the Company’s unregistered securities or that of its Subsidiaries or (iii) owner of any amount of the Company’s unregistered securities acquired within the 180-day period prior to the Filing Date, has any direct or indirect affiliation or association with any FINRA member participating in the Offering. The Company will advise the Underwriters and their respective counsel if it becomes aware that any officer, director or shareholder of the Company or its Subsidiaries is or becomes an affiliate or associated person of a FINRA member participating in the Offering.
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(zz) The Company and each of its Subsidiaries maintain insurance in such amounts and covering such risks as the Company reasonably considers adequate for the conduct of their respective businesses and the value of their respective properties and as is customary for companies engaged in similar businesses in similar industries, all of which insurance is in full force and effect, except where the failure to maintain such insurance could not reasonably be expected to have Material Adverse Effect. The Company reasonably believes that it and each of its Subsidiaries will be able to renew their existing insurance as and when such coverage expires or will be able to obtain replacement insurance adequate for the conduct of their respective business and the value of their respective properties at a cost that would not have a Material Adverse Effect.
(aaa) Except as disclosed in the Registration Statement, the General Disclosure Package and the Prospectus, under current laws and regulations of the Cayman Islands and any political subdivision thereof, all dividends and other distributions declared and payable on the Shares may be paid by the Company to the holder thereof in United States dollars and freely transferred out of the Cayman Islands and all such payments made to holders thereof or therein who are non-residents of the Cayman Islands will not be subject to income, withholding or other taxes under laws and regulations of the Cayman Islands or any political subdivision or taxing authority thereof or therein and will otherwise be free and clear of any other tax, duty, withholding or deduction in the Cayman Islands or any political subdivision or taxing authority thereof or therein and without the necessity of obtaining any governmental authorization in the Cayman Islands or any political subdivision or taxing authority thereof or therein.
(bbb) The choice of the laws of the State of New York as the governing law of this Agreement is a valid choice of law under the laws of the Cayman Islands and will be honored by courts in the Cayman Islands. The Company has the power to submit, and pursuant to Section 15 of this Agreement, has legally, validly, effectively and irrevocably submitted, to the personal jurisdiction of the New York Supreme Court, County of New York, or in the United States District Court for the Southern District of New York (each, a “New York Court”), and the Company has the power to designate, appoint and authorize, and pursuant to Section 15 of this Agreement, has legally, validly, effectively and irrevocably designated, appointed and authorized an agent for service of process in any action arising out of or relating to this Agreement, the Registration Statement, the Prospectus or the Shares in any New York Court, and service of process effected on such authorized agent will be effective to confer valid personal jurisdiction over the Company as provided in Section 15 hereof.
(ccc) Except as provided by laws or statutes generally applicable to transactions of the type described in this Agreement, neither the Company nor any of its respective properties, assets or revenues has any right of immunity under the Cayman Islands, Singapore, New York or United States law, from any legal action, suit or proceeding, from the giving of any relief in any Cayman Islands, Singapore, New York or United States federal court, from service of process, attachment upon or prior judgment, or attachment in aid of execution of judgment, or from execution of a judgment, or other legal process or proceeding for the giving of any relief or for the enforcement of a judgment, in any such court, with respect to its obligations, liabilities or any other matter under or arising out of or in connection with this Agreement. To the extent that the Company or any of its respective properties, assets or revenues may have or may hereafter become entitled to any such right of immunity in any such court in which proceedings may at any time be commenced, the Company waives or will waive such right to the extent permitted by law and has consented to such relief and enforcement as provided in Section 15 of this Agreement.
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(ddd) This Agreement is in proper form under the laws of the Cayman Islands for the enforcement thereof against the Company, and to ensure the legality, validity, enforceability or admissibility into evidence in the Cayman Islands of this Agreement, it is not necessary that this Agreement be filed or recorded with any court or other authority in the Cayman Islands, or Singapore, except as disclosed in the most recent Preliminary Prospectus or Prospectus, that any stamp or similar tax in the Cayman Islands or Singapore, be paid on or in respect of this Agreement or any other documents to be furnished hereunder. Any final judgment for a fixed or readily calculable sum of money rendered by a New York Court having jurisdiction under its own domestic laws in respect of any suit, action or proceeding against the Company based upon this Agreement and any instruments or agreements entered into for the consummation of the transactions contemplated herein and therein would be declared enforceable against the Company, without re-examination or review of the merits of the cause of action in respect of which the original judgment was given or re-litigation of the matters adjudicated upon, by the courts of the Cayman Islands or Singapore. The Company is not aware of any reason why the enforcement in the Cayman Islands or Singapore of such a New York Court judgment would be, as of the date hereof, contrary to public policy of the Cayman Islands or Singapore.
(eee) As used in this Agreement, references to matters being “material” with respect to the Company or any of its Subsidiaries shall mean a material event, change, condition, status or effect related to the condition (financial or otherwise), properties, assets (including intangible assets), liabilities, business, prospects, operations or results of operations of the Company and such Subsidiaries either individually or taken as a whole, as the context requires.
(fff) As used in this Agreement, the term “knowledge of the Company” (or similar language) shall mean the knowledge of the executive officers of the Company who are named in the Prospectus, with the assumption that such executive officers shall have made reasonable and diligent inquiry of the matters presented (with reference to what is customary and prudent for the applicable individuals in connection with the discharge by the applicable individuals of their duties as executive officers of the Company).
(ggg) Any certificate signed by or on behalf of the Company and delivered to the Underwriters or to Loeb & Loeb LLP (“Underwriters’ Counsel”) shall be deemed to be a representation and warranty by the Company to each Underwriter listed on Schedule I hereto as to the matters covered thereby.
3. Offering. Upon authorization of the release of the Shares by the Representative, the Underwriters propose to offer the Shares for sale to the public upon the terms and conditions set forth in the Prospectus.
4. Covenants of the Company. The Company acknowledges, covenants and agrees with the Representative that:
(a) The Registration Statement and any amendments thereto have been declared effective, and if Rule 430A is used or the filing of the Prospectus is otherwise required under Rule 424(b), the Company will file the Prospectus (properly completed if Rule 430A has been used) pursuant to Rule 424(b) within the prescribed time period and will provide evidence satisfactory to the Representative of such timely filing. The Company will file with the Commission all Issuer-Represented Free Writing Prospectuses in the time and manner required under Rules 433(d) or 163(b)(2), as the case may be.
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(b) During the period beginning on the date hereof and ending on the later of the Closing Date or such date as, in the opinion of Underwriters’ Counsel, the Prospectus is no longer required by law to be delivered (or in lieu thereof the notice referred to in Rule 173(a) under the Securities Act is no longer required to be provided), in connection with sales by an underwriter or dealer (the “Prospectus Delivery Period”), prior to amending or supplementing the Registration Statement or the Prospectus, the Company shall furnish to the Representatives for review a copy of each such proposed amendment or supplement, and the Company shall not file any such proposed amendment or supplement to which the Representatives reasonably object within 36 hours of delivery thereof to the Representatives and Underwriters’ Counsel.
(c) After the date of this Agreement, the Company shall promptly advise the Representative in writing (i) of the receipt of any comments of, or requests for additional or supplemental information from, the Commission, (ii) of the time and date of any filing of any post-effective amendment to the Registration Statement or any amendment or supplement to any prospectus, the General Disclosure Package or the Prospectus, (iii) of the time and date that any post-effective amendment to the Registration Statement becomes effective, and (iv) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or any post-effective amendment thereto or of any order preventing or suspending its use or the use of any prospectus, the General Disclosure Package, the Prospectus or any Issuer-Represented Free Writing Prospectus, or of any proceedings to remove, suspend or terminate from listing the Class A Ordinary Shares from any securities exchange upon which they are listed for trading, or of the threatening or initiation of any proceedings for any of such purposes. If the Commission shall enter any such stop order at any time, the Company will use its commercially reasonable efforts to obtain the lifting of such order at the earliest possible moment. Additionally, the Company agrees that it shall comply with the provisions of Rules 424(b), 430A and 430B, as applicable, under the Securities Act and will use its commercially reasonable efforts to confirm that any filings made by the Company under Rule 424(b) or Rule 433 were received in a timely manner by the Commission (without reliance on Rule 424(b)(8) or Rule 164(b)).
(d) During the Prospectus Delivery Period, the Company will comply in all material respects with all requirements imposed upon it by the Securities Act, as now and hereafter amended, and by the Rules and Regulations, as from time to time in force, and by the Exchange Act so far as necessary to permit the continuance of sales of or dealings in the Shares as contemplated by the provisions hereof, the General Disclosure Package, the Registration Statement and the Prospectus. If during such period any event occurs as a result of which the Prospectus (or if the Prospectus is not yet available to prospective purchasers, the General Disclosure Package ) would include an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which such statements were made, not misleading, or if during such period it is necessary or appropriate in the opinion of the Company or its counsel or the Representative or Underwriters’ Counsel to amend the Registration Statement or supplement the Prospectus (or if the Prospectus is not yet available to prospective purchasers, the General Disclosure Package ) to comply with the Securities Act or to file under the Exchange Act any document which would be deemed to be incorporated by reference in the Prospectus in order to comply with the Securities Act or the Exchange Act, the Company will promptly notify the Representative and will amend the Registration Statement or supplement the Prospectus (or if the Prospectus is not yet available to prospective purchasers, the General Disclosure Package) or file such document (at the expense of the Company) so as to correct such statement or omission or effect such compliance.
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(e) If at any time following issuance of an Issuer-Represented Free Writing Prospectus there occurred or occurs an event or development as a result of which such Issuer-Represented Free Writing Prospectus conflicted or would conflict with the information contained in the Registration Statement, the Statutory Prospectus or the Prospectus or included or would include an untrue statement of a material fact or omitted or would omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances prevailing at that subsequent time, not misleading, the Company has promptly notified or will promptly notify the Representative and has promptly amended or will promptly amend or supplement, at its own expense, such Issuer-Represented Free Writing Prospectus to eliminate or correct such conflict, untrue statement or omission.
(f) The Company will promptly upon request deliver to the Underwriters and Underwriters’ Counsel a signed copy of the Registration Statement, as initially filed and all amendments thereto, including all consents and exhibits filed therewith. The Company will promptly deliver to each of the Underwriters such number of copies (electronic or otherwise) of any Preliminary Prospectus, the Prospectus, the Registration Statement, and all amendments of and supplements to such documents, if any, and all documents which are exhibits to the Registration Statement and Prospectus or any amendment thereof or supplement thereto, as the Underwriters may reasonably request. Prior to 10:00 a.m., New York time, on the Business Day next succeeding the date of this Agreement and from time to time thereafter, the Company will furnish the Underwriters with copies of the Prospectus in such quantities as the Underwriters may reasonably request.
(g) The Company consents to the use and delivery of the Preliminary Prospectus by the Underwriters in accordance with Rule 430 and Section 5(b) of the Securities Act.
(h) If the Company elects to rely on Rule 462(b) under the Securities Act, the Company shall both file a Rule 462(b) Registration Statement with the Commission in compliance with Rule 462(b) and pay the applicable fees in accordance with Rule 111 of the Securities Act by the earlier of: (i) 10:00 p.m., New York City time, on the date of this Agreement, and (ii) the time that confirmations are given or sent, as specified by Rule 462(b)(2).
(i) The Company will use its commercially reasonable efforts, in cooperation with the Representative, at or prior to the time of effectiveness of the Registration Statement, to qualify the Shares for offering and sale under the securities laws relating to the offering or sale of the Shares of such jurisdictions, domestic or foreign, as the Representative may reasonably designate and to maintain such qualification in effect for so long as required for the distribution thereof, except that in no event shall the Company be obligated in connection therewith to qualify as a foreign corporation or other entity or as a dealer in securities in any such jurisdiction, to execute a general consent to service of process in any such jurisdiction, or to subject itself to taxation in any such jurisdiction if it is otherwise not so subject.
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(j) During the 180 days period following the date of this Agreement (the “Company Lock-up Period”), the Company may not, without the prior written consent of the Representative, (A) offer, sell, issue, agree or contract to sell or issue or grant any option for the sale of any securities of the Company, except for (i) the Class A Ordinary Shares to be sold hereunder, (ii) the issuance by the Company of Class A Ordinary Shares upon the exercise of an option or warrant or the conversion of a security outstanding on the date hereof of, provided that the Representative has been advised in writing of such issuance prior to the date hereof, (iii) the issuance by the Company of an option to purchase Class A Ordinary Shares or other securities of the Company under any stock compensation plan of the Company outstanding on the date hereof, (iv) the issuance of securities pursuant to a registration statement on Form S-8, or (v) the issuance of securities in connection with mergers, acquisitions, joint ventures, licensing arrangements or any other similar non-capital raising transactions provided such shares are not registered pursuant to a registration statement; or (B) file any registration statement relating to the offer or sale of any of the Company’s securities.
(k) Schedule II hereto contains a complete and accurate list of the Company’s executive officers, directors and holders of 5% or more of the Company’s Class A Ordinary Shares (collectively, the “Lock-Up Parties”). The Company has caused each of the Lock-Up Parties to deliver to the Representative an executed Lock-Up Agreement, in the form attached hereto as Annex I (the “Lock-Up Agreement”), prior to the execution of this Agreement.
(l) If the Representative, in its sole discretion, agrees to release or waive the restrictions set forth in a Lock-Up Agreement described in Section 4(j) hereof for an officer or director of the Company and provide the Company with notice of the impending release or waiver at least three (3) Business Days before the effective date of the release or waiver, the Company agrees to announce the impending release or waiver by (i) a press release substantially in the form of Annex V hereto through a major news service or (ii) any other method that satisfies the obligations described in FINRA Rule 5131(d)(2) at least two (2) Business Days before the effective date of the release or waiver.
(m) For a period of one year from the Closing Date, the Company shall retain [ ] as the Company’s transfer agent and registrar for the Class A Ordinary Shares or a transfer and registrar agent for the Class A Ordinary Shares reasonably acceptable to the Representative.
(n) [Reserved].
(o) For a period of at least two (2) years from the Effective Date, the Company shall retain a nationally recognized PCAOB registered independent public accounting firm reasonably acceptable to the Representative. The Representative acknowledges that the Auditor is acceptable to the Representative.
(p) During the period of one (1) year from the Effective Date, the Company will make available to the Representative copies of all reports or other communications (financial or other) furnished to security holders or from time to time published or publicly disseminated by the Company, and will deliver to the Representative: (i) as soon as practicable after they are available, copies of any reports, financial statements and proxy or information statements furnished to or filed with the Commission or any national securities exchange on which any class of securities of the Company is listed; and (ii) such additional information concerning the business and financial condition of the Company as the Representative may from time to time reasonably request in writing pursuant to a specific regulatory or liability issue or; provided, that any such item which is available on the EDGAR system (or successor thereto) need not be furnished in physical form.
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(q) The Company will not issue press releases or engage in any other publicity, without the Representative’s prior written consent, for a period ending at 5:00 p.m. Eastern time on the first Business Day following the fortieth (40th) day following the Closing Date, other than normal and customary releases issued in the ordinary course of the Company’s business, or as required by law.
(r) The Company hereby grants the Representative the right of first refusal for a period of twelve (12) months after the closing of this Offering to co-manage any future public or private equity or debt offering, including all equity linked financings (excluding (i) shares issued under any compensation or stock option plan approved by the Company’s shareholders, (ii) shares issued as consideration of an acquisition or as part of a strategic partnership or transaction and (iii) conventional banking arrangements and commercial debt financing) (each a “Subject Transaction”), undertaken by the Company or any successor to or current or future subsidiary of the Company. The Company shall notify the Representative in writing of its intention to pursue a Subject Transaction. In such event, the Representative shall notify the Company of its election to pursue a Subject Transaction within ten (10) days of written notice by the Company.
(s) The Company will apply the net proceeds from the sale of the Shares as set forth under the caption “Use of Proceeds” in the Prospectus.
(t) The Company will use its commercially reasonable efforts to effect and maintain the listing of the Class A Ordinary Shares on the Nasdaq Stock Market, the NYSE or the NYSE American for at least three (3) years after the Closing Date.
(u) The Company, during the Prospectus Delivery Period, will file all documents required to be filed with the Commission pursuant to the Securities Act, the Exchange Act and the Rules and Regulations within the time periods required thereby.
(v) The Company will use its commercially reasonable efforts to do and perform all things required to be done or performed under this Agreement by the Company prior to the Closing Date, and to satisfy all conditions precedent to the delivery of the Shares.
(w) The Company will not take, and will use its commercially reasonable efforts to cause its Affiliates not to take, directly or indirectly, any action which constitutes or is designed to cause or result in, or which could reasonably be expected to constitute, cause or result in, the stabilization or manipulation of the price of any security to facilitate the sale or resale of the Shares.
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(x) The Company shall cause to be prepared and delivered to the Representative, at its expense, within two (2) Business Days from the effective date of this Agreement, an Electronic Prospectus to be used by the Underwriters in connection with the Offering. As used herein, the term “Electronic Prospectus” means a form of prospectus, and any amendment or supplement thereto, that meets each of the following conditions: (i) it shall be encoded in an electronic format, satisfactory to the Representative, that may be transmitted electronically by the other Underwriters to offerees and purchasers of the Shares for at least the period during which a Prospectus relating to the Shares is required to be delivered under the Securities Act; (ii) it shall disclose the same information as the paper prospectus and prospectus filed pursuant to EDGAR, except to the extent that graphic and image material cannot be disseminated electronically, in which case such graphic and image material shall be replaced in the electronic prospectus with a fair and accurate narrative description or tabular representation of such material, as appropriate; and (iii) it shall be in or convertible into a paper format or an electronic format, satisfactory to the Representative, that will allow recipients thereof to store and have continuously ready access to the prospectus at any future time, without charge to such recipients (other than any fee charged for subscription to the Internet as a whole and for on-line time).
(y) [Reserved].
(z) In the event that at any time prior to the first (1st) anniversary of the Closing Date, the Company, or any of its affiliates or Subsidiary shall enter into any transaction (including, without limitation, any merger, consolidation, acquisition, financing, joint venture or other arrangement) with any party introduced directly to the Company by the Representative (each a “Tail Financing”), during such period, the Representative will be paid a success fee, payable at the closing thereof, equal to one percent (1.0%) of the consideration or value received by the Company and/or its shareholders. In the event that this Offering is terminated for cause, in compliance with FINRA Rule 5110(g)(5)(B), the Company shall not be obligated to pay the Tail Financing fee provided herein.
5. Payment of Expenses.
(a) Whether or not the transactions contemplated by this Agreement, the Registration Statement and the Prospectus are consummated or this Agreement is terminated, the Company hereby agrees to pay all reasonable and documented costs and expenses incident to the performance of its obligations hereunder including the following, provided that the actual accountable expenses of the Underwriter shall not exceed $150,000:
(i) all filing fees and communication expenses related to the registration of the Shares to be sold in the Offering including all expenses in connection with the preparation, printing, formatting for EDGAR and filing of the Registration Statement, any Preliminary Prospectus and the Prospectus and any and all amendments and supplements thereto and the mailing and delivering of copies thereof to the Underwriters and dealers;
(ii) all fees and expenses in connection with filings with FINRA;
(iii) all fees, disbursements and expenses of the Company’s counsel and accountants in connection with the registration of the Shares under the Securities Act and the Offering;
(iv) all fees and expenses in connection with listing the Class A Ordinary Shares on the Nasdaq Capital Market;
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(v) the costs of all mailing and printing of the underwriting documents (including this Agreement, any blue sky surveys and, if appropriate, any Agreement Among Underwriters, Selected Dealers’ Agreement, Underwriters’ Questionnaire and Power of Attorney);
(vi) all reasonable travel expenses of the Company’s officers and employees and any other expenses incurred in connection with attending or hosting meetings with prospective purchasers of the Shares;
(vii) any share transfer taxes payable upon the transfer of securities by the Company to the Underwriters and any other taxes incurred by the Company in connection with this Agreement or the Offering;
(viii) the costs associated with book building, prospectus tracking and compliance software and the cost of preparing certificates representing the Shares;
(ix) the cost and charges of any transfer agent or registrar for the Ordinary Shares;
(x) any reasonable cost and expenses in conducting background checks of the Company’s officers and directors by a background search firm acceptable to the Representative, not to exceed $15,000;
(xi) fees of Underwriters’ Counsel, not to exceed $100,000;
(xii) the cost of preparing, printing and delivering certificates representing each of the Shares;
(xiii) the costs associated with bound volumes and mementos in such quantities as the Underwriter may reasonably request, not to exceed $2,500; and
(xiv) all other costs, fees and expenses incident to the performance of the Company obligations hereunder which are not otherwise specifically provided for in this Section 5.
The Company and the Representative acknowledge that the Company has previously paid to the Representative advances in the amount of $75,000 (the “Advance”) against the Representative’s out-of-pocket expenses, where any expense item in excess of $10,000 shall be subject to the Company’s confirmation. Any portion of the Advance not used shall be returned back to the Company to the extent not incurred. The Representative’s total out-of-pocket accountable expenses (including legal fees and expenses) in connection with the Offering shall not exceed $150,000.
(b) The Company further agrees that, in addition to the expenses payable pursuant to Section 5(a), at the Closing it will pay to the Representative a non-accountable expense allowance equal to one percent (1.0%) of the gross proceeds received by the Company from the sale of the Firm Shares by deduction from the proceeds of the Offering.
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(c) Notwithstanding anything to the contrary in this Section 5, in the event that this Agreement is terminated by the Company pursuant to Section 11(b) hereof, or subsequent to a Material Adverse Change, the Company will pay the out-of-pocket expenses actually incurred as allowed under FINRA Rule 5110 by the Underwriters through the date of such termination (including the fees and disbursements of Underwriters’ Counsel ).
(d) The Company shall grant to the Representative or its designated affiliates share purchase warrants (the “Representative’s Warrants”) covering a number of shares equal to seven and a half percent (7.5%) of the total number of Firm Shares and Option Shares sold in this offering.
(d) In compliance with FINRA Rule 5110(e)(1), the Representative’s Warrants and the underlying securities will be locked up for 180 days beginning on the date of commencement of sales of the Offering and will expire five (5) years from the date of commencement of sales of Offering, subject to certain exceptions as set forth in FINRA Rule 5110(e)(2). The Representative’s Warrants will be exercisable at a price equal to one hundred and forty percent (140%) of the public offering price of the underlying Class A Ordinary Shares in connection with the Offering. The Representative’s Warrants shall not be redeemable. The Company will register the Class A Ordinary Shares underlying the Representative’s Warrants under the Act and will file all necessary undertakings in connection therewith. The Representative’s Warrants and the underlying securities shall not be sold during the Offering, or sold, transferred, assigned, pledged, or hypothecated, or be the subject of any hedging, short sale, derivative, put, or call transaction that would result in the effective economic disposition of the securities by any person for a period of 180 days beginning on the date of commencement of sales of the Offering, except that they may be transferred to any member participating in the Offering and the officers or partners thereof, if all securities so transferred remain subject to the lock-up restriction for the remainder of the time period. The Underwriter will have the option to exercise, transfer or assign the Representative’s Warrants at any time, provided that the underlying securities shall not be transferred during the lock-up period; i.e., the Shares underlying the Representative’s Warrants shall remain subject to the 180-day lock-up period. The Representative’s Warrants may be exercised as to all or a lesser number of the underlying Class A Ordinary Shares, will provide for cashless exercise and will contain provisions for one demand registration of the sale of the underlying Ordinary Share at the Company’s expense, an additional demand registration at the Representative’s Warrants holder’s expense, and unlimited “piggyback” registration rights at the Company’s expense, each with a duration of no more than five years from the date of commencement of sales of the offering in compliance with FINRA Rule 5110(g)(8)(D). The Representative’s Warrants shall further provide for adjustment in the number and price of such warrants (and the Ordinary Share underlying such Warrants) in the event of recapitalization, merger or other structural transaction to prevent dilution.
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6. Conditions of Underwriters’ Obligations. The obligations of the Underwriters to purchase and pay for the Firm Shares or the Option Shares, as the case may be, as provided herein shall be subject to: (i) the accuracy of the representations and warranties of the Company herein contained, as of the date hereof and as of the Closing Date, (ii) the absence from any certificates, opinions, written statements or letters furnished to the Representative or to Underwriters’ Counsel pursuant to this Section 6 of any misstatement or omission, (iii) the performance by the Company of its obligations hereunder, and (iv) each of the following additional conditions. For purposes of this Section 6, the terms “Closing Date” and “Closing” shall refer to the Closing Date for the Firm Shares or the Option Shares, as the case may be, and each of the foregoing and following conditions must be satisfied as of each Closing.
(a) The Registration Statement shall have become effective and all necessary regulatory or listing approvals shall have been received not later than 5:30 p.m., New York time, on the date of this Agreement, or at such later time and date as shall have been consented to in writing by the Representative. If the Company shall have elected to rely upon Rule 430A under the Securities Act, the Prospectus shall have been filed with the Commission in a timely fashion in accordance with the terms hereof and a form of the Prospectus containing information relating to the description of the Shares and the method of distribution and similar matters shall have been filed with the Commission pursuant to Rule 424(b) within the applicable time period; and, at or prior to the Closing Date or the actual time of the Closing, no stop order suspending the effectiveness of the Registration Statement or any part thereof, or any amendment thereof, nor suspending or preventing the use of the General Disclosure Package, the Prospectus or any Issuer-Represented Free Writing Prospectus shall have been issued; no proceedings for the issuance of such an order shall have been initiated or to the Company’s knowledge threatened; any request of the Commission for additional information (to be included in the Registration Statement, the General Disclosure Package, the Prospectus, any Issuer-Represented Free Writing Prospectus or otherwise) shall have been complied with to the Representative’s satisfaction; and FINRA shall have raised no objection to the fairness and reasonableness of the underwriting terms and arrangements.
(b) The Representative shall not have reasonably determined, and advised the Company, that the Registration Statement, the General Disclosure Package or the Prospectus, or any amendment thereof or supplement thereto, or any Issuer-Represented Free Writing Prospectus, contains an untrue statement of fact which, in the Representative’s reasonable opinion, is material, or omits to state a fact which, in the Representative’s reasonable opinion, is material and is required to be stated therein or necessary to make the statements therein not misleading; provided, however, that if in the Representative’s opinion such deficiency is curable Representative shall have given the Company reasonable notice of such deficiency and a reasonable chance to cure such deficiency.
(c) The Representative shall have received the written opinions of (i) Sidley Austin LLP, the U.S. legal counsel for the Company, dated as of the Closing Date and addressed to the Representative substantially in the form attached hereto as Annex II, (ii) Harney Westwood & Riegels Singapore LLP, Cayman Islands counsel for the Company dated as of the Closing Date and addressed to the Representative substantially in the form attached hereto as Annex III, and (iii) Rajah & Tann Singapore LLP, legal advisors as to Singapore law for the Company dated as of the Closing Date and addressed to the Representative substantially in the form attached hereto as Annex IV.
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(d) The Representative shall have received a certificate of the Chief Executive Officer and Chief Financial Officer of the Company, dated as of each Closing Date to the effect that: (i) the condition set forth in subsection (a) of this Section 6 has been satisfied, (ii) as of the date hereof and as of the applicable Closing Date, the representations and warranties of the Company set forth in Sections 1 and 2 hereof are accurate, (iii) as of the applicable Closing Date, all agreements, conditions and obligations of the Company to be performed or complied with hereunder on or prior thereto have been duly performed or complied with, (iv) the Company has not sustained any material loss or interference with their respective businesses, whether or not covered by insurance, or from any labor dispute or any legal or governmental proceeding, (v) no stop order suspending the effectiveness of the Registration Statement or any post-effective amendment thereof has been issued and no proceedings therefor have been initiated or threatened by the Commission, (vi) there are no pro forma or as adjusted financial statements that are required to be included or incorporated by reference in the Registration Statement and the Prospectus pursuant to the Rules and Regulations which are not so included or incorporated by reference, and (vii) subsequent to the respective dates as of which information is given in the Registration Statement and the Prospectus there has not been any Material Adverse Change or any development involving a prospective Material Adverse Change, whether or not arising from transactions in the ordinary course of business.
(e) On the date of this Agreement and on the Closing Date, the Representative shall have received a “cold comfort” letter from the Auditor as of the date of delivery and addressed to the Representative and in form and substance satisfactory to the Representative and Underwriters’ Counsel, confirming that they are independent certified public accountants with respect to the Company within the meaning of the Securities Act and the Rules and Regulations, and stating, as of the date of delivery (or, with respect to matters involving changes or developments since the respective dates as of which specified financial information is given in the Prospectus, as of a date not more than five (5) days prior to the date of such letter), the conclusions and findings of such firm with respect to the financial information and other matters relating to the Registration Statement and the Prospectus covered by such letter.
(f) Subsequent to the execution and delivery of this Agreement and prior to the Closing Date, there shall not have been any change in the capital stock or long-term debt of the Company or any change or development involving a change, whether or not arising from transactions in the ordinary course of business, in the business, condition (financial or otherwise), results of operations, shareholders’ equity, properties or prospects of the Company including but not limited to the occurrence of any fire, flood, storm, explosion, accident, act of war or terrorism or other calamity, the effect of which, in any such case described above, is, in the sole judgment of the Representative, so material and adverse as to make it impracticable or inadvisable to proceed with the Offering on the terms and in the manner contemplated in the Prospectus (exclusive of any supplement).
(g) Prior to the execution and delivery of this Agreement, the Representative shall have received a lock-up agreement from each Lock-Up Party, duly executed by the applicable Lock-Up Party, in each case substantially in the form attached hereto as Annex I.
(h) The Class A Ordinary Shares are registered under the Exchange Act and, as of the Closing Date, the Class A Ordinary Shares shall be listed and admitted and authorized for trading on the Nasdaq Capital Market and satisfactory evidence of such action shall have been provided to the Representative. The Company shall have taken no action designed to, or likely to have the effect of terminating the registration of the Class A Ordinary Shares under the Exchange Act or delisting or suspending from trading the Class A Ordinary Shares from the Nasdaq Capital Market, nor has the Company received any information suggesting that the Commission or the Nasdaq Capital Market is contemplating terminating such registration of listing. The Shares shall be DTC eligible.
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(i) FINRA shall have confirmed that it has not raised any objection with respect to the fairness and reasonableness of the underwriting terms and arrangements.
(j) No action shall have been taken and no statute, rule, regulation or order shall have been enacted, adopted or issued by any federal, state or foreign governmental or regulatory authority that would, as of the Closing Date, prevent the issuance or sale of the Shares; and no injunction or order of any federal, state or foreign court shall have been issued that would, as of the Closing Date, prevent the issuance or sale of the Shares or materially and adversely affect or potentially and adversely affect the business or operations of the Company.
(k) The Company shall have furnished the Representative with a Certificate of Good Standing for the Company and Subsidiaries issued by the Registrar of Companies of the Cayman Islands with the issuance date not more than five (5) Business Days earlier than the Closing Date.
(l) The Company shall have furnished the Representative and Underwriters’ Counsel with such other certificates, opinions or other documents as they may have reasonably requested.
If any of the conditions specified in this Section 6 shall not have been fulfilled when and as required by this Agreement, or if any of the certificates, opinions, written statements or letters furnished to the Representative or to Underwriters’ Counsel pursuant to this Section 6 shall not be reasonably satisfactory in form and substance to the Representative and to Underwriters’ Counsel, all obligations of the Underwriters hereunder may be cancelled by the Representative at, or at any time prior to, the consummation of the Closing. Notice of such cancellation shall be given to the Company in writing or by telephone. Any such telephone notice shall be confirmed promptly thereafter in writing.
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7. Indemnification.
(a) The Company agrees to indemnify and hold harmless each Underwriter, its officers, directors and employees, and each person, if any, who controls such Underwriter within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, against any losses, liabilities, claims, damages and expenses whatsoever as incurred (including but not limited to reasonable attorneys’ fees and any and all expenses whatsoever incurred in investigating, preparing or defending against any litigation, commenced or threatened, or any claim whatsoever, and any and all amounts paid in settlement of any claim or litigation), joint or several, to which they or any of them may become subject under the Securities Act, the Exchange Act or otherwise (including in settlement of any litigation if such settlement is effected with the written consent of the Company), insofar as such losses, liabilities, claims, damages or expenses (or actions in respect thereof) arise out of or are based upon (i) an untrue statement or alleged untrue statement of a material fact contained in (A) the Registration Statement, including the information deemed to be a part of the Registration Statement at the time of effectiveness and at any subsequent time pursuant to Rules 430A and 430B of the Rules and Regulations, the General Disclosure Package, the Prospectus, or any amendment or supplement thereto (including any documents filed under the Exchange Act and deemed to be incorporated by reference into the Prospectus), (B) any Issuer-Represented Free Writing Prospectus or in any other materials or information provided to investors by, or with the approval of, the Company in connection with the marketing of the offering of the Shares, including any road show or investor presentations made to investors by the Company (whether in person or electronically) (collectively “Marketing Materials”) or (C) any filings or reports filed by the Company under the Exchange Act or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse such indemnified party for any legal or other expenses reasonably incurred by it in connection with investigating or defending against such loss, claim, damage, liability or action; or (ii) in whole or in part upon any inaccuracy in the representations and warranties of the Company contained herein; or (iii) in whole or in part upon any failure of the Company to perform its obligations hereunder or under law; provided, however, that the Company shall not be liable in any such case to the extent that any such loss, claim, damage, liability or action arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in the Registration Statement, any Preliminary Prospectus, the General Disclosure Package, the Prospectus, or any such amendment or supplement, any Issuer-Represented Free Writing Prospectus or any other Marketing Materials, in reliance upon and in conformity with the Underwriters’ Information. With respect to any untrue statement or omission or alleged untrue statement or omission made in the Preliminary Prospectus, the indemnity agreement contained in this Section 7(a) shall not inure to the benefit of an Underwriter to the extent that any loss, liability, claim, damage or expense of such Underwriter results from the fact that a copy of the Prospectus was not given or sent to the person asserting any such loss, liability, claim or damage at or prior to the written confirmation of sale of the Shares to such person as required by the Securities Act and the rules and regulations thereunder, and if the untrue statement or omission has been corrected in the Prospectus, unless such failure to deliver the Prospectus was a result of non-compliance by the Company with its obligations under this Agreement. The Company agrees promptly to notify each Underwriter of the commencement of any litigation or proceedings against the Company or any of its officers, directors or controlling persons in connection with the issue and sale of the Shares or in connection with the Registration Statement or Prospectus.
(b) Each Underwriter, severally and not jointly, shall indemnify and hold harmless the Company, each of the directors of the Company, each of the officers of the Company who shall have signed the Registration Statement, and each other person, if any, who controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, against any losses, liabilities, claims, damages and expenses whatsoever as incurred (including but not limited to attorneys’ fees and any and all expenses whatsoever incurred in investigating, preparing or defending against any litigation, commenced or threatened, or any claim whatsoever, and any and all amounts paid in settlement of any claim or litigation), joint or several, to which they or any of them may become subject under the Securities Act, the Exchange Act or otherwise, insofar as such losses, liabilities, claims, damages or expenses (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, as originally filed or any amendment thereof, or any related Preliminary Prospectus, the General Disclosure Package, or the Prospectus, or in any amendment thereof or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that any such loss, liability, claim, damage or expense arises out of or is based upon any such untrue statement or alleged untrue statement or omission or alleged omission made therein in reliance upon and in conformity with the Underwriters’ Information; provided, however, that in no case shall any Underwriter be liable or responsible for any amount in excess of the aggregate underwriting discount applicable to the Shares to be purchased by such Underwriter hereunder. The parties agree that such information provided by or on behalf of any Underwriter through the Representative consists solely of the material referred to in the last sentence of Section 2(b) hereof.
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(c) Promptly after receipt by an indemnified party under subsection (a) or (b) above of notice of any claims or the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under such subsection, notify each party against whom indemnification is to be sought in writing of the claim or the commencement thereof (but the failure so to notify an indemnifying party shall not relieve the indemnifying party from any liability which it may have under this Section 7 to the extent that it is not materially prejudiced as a result thereof and in any event shall not relieve it from any liability that such indemnifying party may have otherwise than on account of the indemnity agreement hereunder). In case any such claim or action is brought against any indemnified party, and it notifies an indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate, at its own expense in the defense of such action, and to the extent it may elect by written notice delivered to the indemnified party promptly after receiving the aforesaid notice from such indemnified party, to assume the defense thereof with counsel satisfactory to such indemnified party; provided however, that counsel to the indemnifying party shall not (except with the written consent of the indemnified party) also be counsel to the indemnified party. Notwithstanding the foregoing, the indemnified party or parties shall have the right to employ its or their own counsel in any such case, but the fees and expenses of such counsel shall be at the expense of such indemnified party or parties unless (i) the employment of such counsel shall have been authorized in writing by one of the indemnifying parties in connection with the defense of such action, (ii) the indemnifying parties shall not have employed counsel to have charge of the defense of such action within a reasonable time after notice of commencement of the action, (iii) the indemnifying party does not diligently defend the action after assumption of the defense, or (iv) such indemnified party or parties shall have reasonably concluded that a conflict may arise between the positions of the indemnifying party and the indemnified party, or any of them, in conducting the defense of any such action or there may be legal defenses available to it or them which are different from or additional to those available to one or all of the indemnifying parties (in which case the indemnifying parties shall not have the right to direct the defense of such action on behalf of the indemnified party or parties), in any of which events such fees and expenses shall be borne by the indemnifying parties and shall be paid as incurred. No indemnifying party shall, without the prior written consent of the indemnified parties (which consent shall not be unreasonably delayed, withhold or denied), effect any settlement or compromise of, or consent to the entry of judgment with respect to, any pending or threatened claim, investigation, action or proceeding in respect of which indemnity or contribution may be or could have been sought by an indemnified party under this Section 7 or Section 8 hereof (whether or not the indemnified party is an actual or potential party thereto), unless (x) such settlement, compromise or judgment (i) includes an unconditional release of the indemnified party from all liability arising out of such claim, investigation, action or proceeding and (ii) does not include a statement as to or an admission of fault, culpability or any failure to act, by or on behalf of the indemnified party, and (y) the indemnifying party confirms in writing its indemnification obligations hereunder with respect to such settlement, compromise or judgment.
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8. Contribution. In order to provide for contribution in circumstances in which the indemnification provided for in Section 7 is for any reason held to be unavailable from any indemnifying party or is insufficient to hold harmless a party indemnified thereunder, the Company and the Underwriters shall contribute to the aggregate losses, claims, damages, liabilities and expenses of the nature contemplated by such indemnification provision (including any investigation, legal and other expenses incurred in connection with, and any amount paid in settlement of, any action, suit or proceeding or any claims asserted, but after deducting in the case of losses, claims, damages, liabilities and expenses suffered by the Company, any contribution received by the Company from persons, other than the Underwriters, who may also be liable for contribution, including persons who control the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, officers of the Company who signed the Registration Statement and directors of the Company) as incurred to which the Company and one or more of the Underwriters may be subject, in such proportions as is appropriate to reflect the relative benefits received by the Company and the Underwriters from the Offering or, if such allocation is not permitted by applicable law, in such proportions as are appropriate to reflect not only the relative benefits referred to above but also the relative fault of the Company and the Underwriters in connection with the statements or omissions which resulted in such losses, claims, damages, liabilities or expenses, as well as any other relevant equitable considerations. The relative benefits received by the Company and the Underwriters shall be deemed to be in the same proportion as (x) the total proceeds from the Offering (net of underwriting discounts and commissions but before deducting expenses) received by the Company bears to (y) the underwriting discount or commissions received by the Underwriters, in each case as set forth in the table on the cover page of the Prospectus. The relative fault of each of the Company and of the Underwriters shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or the Underwriters and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Underwriters agree that it would not be just and equitable if contribution pursuant to this Section 8 were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this Section. The aggregate amount of losses, liabilities, claims, damages and expenses incurred by an indemnified party and referred to above in this Section 8 shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in investigating, preparing or defending against any litigation, or any investigation or proceeding by any judicial, regulatory or other legal or governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue or alleged untrue statement or omission or alleged omission. Notwithstanding the provisions of this Section 8: (i) no Underwriter shall be required to contribute any amount in excess of the aggregate discounts and commissions applicable to the Shares underwritten by it and distributed to the public and (ii) no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this Section 8, each person, if any, who controls an Underwriter within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act shall have the same rights to contribution as such Underwriter, and each person, if any, who controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, each officer of the Company who shall have signed the Registration Statement and each director of the Company shall have the same rights to contribution as the Company, subject in each case to clauses (i) and (ii) of the immediately preceding sentence. Any party entitled to contribution will, promptly after receipt of notice of commencement of any action, suit or proceeding against such party in respect of which a claim for contribution may be made against another party or parties, notify each party or parties from whom contribution may be sought, but the omission to so notify such party or parties shall not relieve the party or parties from whom contribution may be sought from any obligation it or they may have under this Section 8 or otherwise. The obligations of the Underwriters to contribute pursuant to this Section 8 are several in proportion to the respective number of Shares to be purchased by each of the Underwriters hereunder and not joint.
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9. Underwriter Default.
(a) If any Underwriter or Underwriters shall default in its or their obligation to purchase Firm Shares hereunder, and if the securities with respect to which such default relates (the “Default Securities”) do not (after giving effect to arrangements, if any, made by the Representative pursuant to subsection (b) below) exceed in the aggregate 10% of the number of Firm Shares, each non-defaulting Underwriter, acting severally and not jointly, agrees to purchase from the Company that number of Default Securities that bears the same proportion of the total number of Default Securities then being purchased as the number of Firm Shares set forth opposite the name of such Underwriter on Schedule I hereto bears to the aggregate number of Firm Shares set forth opposite the names of the non-defaulting Underwriters, subject, however, to such adjustments to eliminate fractional shares as the Representative in its sole discretion shall make.
(b) In the event that the aggregate number of Default Securities exceeds 10% of the number of Firm Shares, the Representative may in its discretion arrange for themselves or for another party or parties (including any non-defaulting Underwriter or Underwriters who so agree) to purchase the Default Securities on the terms contained herein. In the event that within 48 hours after such a default the Representative does not arrange for the purchase of the Default Securities as provided in this Section 9, this Agreement shall thereupon terminate, without liability on the part of the Company with respect thereto (except in each case as provided in Sections 5, 7, 8, 9 and 11(d)) or the Underwriters, but nothing in this Agreement shall relieve a defaulting Underwriter or Underwriters of its or their liability, if any, to the other Underwriters and the Company for damages occasioned by its or their default hereunder.
(c) In the event that any Default Securities are to be purchased by the non-defaulting Underwriters, or are to be purchased by another party or parties as aforesaid, the Representative or the Company shall have the right to postpone the Closing Date for a period, not exceeding five (5) Business Days, in order to effect whatever changes may thereby be necessary in the Registration Statement or the Prospectus or in any other documents and arrangements, and the Company agrees to file promptly any amendment or supplement to the Registration Statement or the Prospectus which, in the reasonable opinion of Underwriters’ Counsel, may thereby be made necessary or advisable. The term “Underwriter” as used in this Agreement shall include any party substituted under this Section 9 with like effect as if it had originally been a party to this Agreement with respect to such Firm Shares.
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10. Survival of Representations and Agreements. All representations and warranties, covenants and agreements of the Company and the Underwriters contained in this Agreement or in certificates of officers of the Company submitted pursuant hereto, including the agreements contained in Sections 5, 10, 14 and 15, the indemnity agreements contained in Section 7 and the contribution agreements contained in Section 8 hereof, shall remain operative and in full force and effect regardless of any investigation made by or on behalf of any Underwriter or any controlling person thereof or by or on behalf of the Company, any of its officers and directors or any controlling person thereof, and shall survive delivery of and payment for the Shares to and by the Underwriters. The representations contained in Section 2 hereof and the covenants and agreements contained in Sections 5, 7, 8, this Section 10 and Sections 12, 13, 14 and 15 hereof shall survive any termination of this Agreement, including termination pursuant to Section 9 or 11 hereof. The representations and covenants contained in Sections 2, 3 and 4 hereof shall survive termination of this Agreement if any Shares are purchased pursuant to this Agreement.
11. Effective Date of Agreement; Termination.
(a) This Agreement shall become effective upon the later of: (i) receipt by the Representative and the Company of notification of the effectiveness of the Registration Statement or (ii) the execution of this Agreement. Notwithstanding any termination of this Agreement, the provisions of this Section 11 and of Sections 5, 7, 8, 12, 13, 14 and 15, inclusive, shall remain in full force and effect at all times after the execution hereof. If this Agreement is terminated after any Shares have been purchased hereunder, the provisions of Sections 2, 3 and 4 hereof shall survive termination of this Agreement.
(b) The Representative shall have the right to terminate this Agreement at any time prior to the consummation of the Closing if: (i) any domestic or international event or act or occurrence has materially disrupted, or in the opinion of the Representative will in the immediate future materially disrupt, the market for the Company’s securities or securities in general; or (ii) trading on the New York Stock Exchange or the Nasdaq Stock Market shall have been suspended or been made subject to material limitations, or minimum or maximum prices for trading shall have been fixed, or maximum ranges for prices for securities shall have been required, on the New York Stock Exchange or the Nasdaq Stock Market or by order of the Commission, FINRA or any other governmental authority having jurisdiction; or (iii) a banking moratorium has been declared by any state or federal authority or if any material disruption in commercial banking or securities settlement or clearance services shall have occurred; or (iv) (A) there shall have occurred any outbreak or escalation of hostilities or acts of terrorism involving the United States or there is a declaration of a national emergency or war by the United States, excluding a national emergency declared related to the COVID-19 pandemic, or (B) there shall have been any other calamity or crisis or any change in political, financial or economic conditions if the effect of any such event in (A) or (B), in the judgment of the Representative, is so material and adverse that such event makes it impracticable or inadvisable to proceed with the offering, sale and delivery of the Firm Shares on the terms and in the manner contemplated by the Prospectus.
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(c) Any notice of termination pursuant to this Section 11 shall be in writing.
(d) If this Agreement shall be terminated pursuant to any of the provisions hereof or if the sale of the Shares provided for herein is not consummated because any condition to the obligations of the Underwriters set forth herein is not satisfied or because of any refusal, inability or failure on the part of the Company to perform any agreement herein or comply with any provision hereof, the Company will, subject to demand by the Representative, reimburse the Underwriters for those out-of-pocket expenses (including the reasonable fees and expenses of Underwriters’ Counsel), actually incurred by the Underwriters in connection herewith less the Advance previously paid.
12. Notices. All communications hereunder, except as may be otherwise specifically provided herein, shall be in writing, and:
(a) if sent to the Representative or any Underwriter, shall be mailed, delivered, or faxed and confirmed in writing, to:
Network 1 Financial Securities, Inc.
2 Bridge Avenue, Suite 241
Red Bank, NJ 07701
Attention: Adam Pasholk, Managing Director of Investment Banking
Email: adampasholk@netw1.com
with a copy to Underwriters’ Counsel at:
Loeb & Loeb LLP
345 Park Avenue
New York, New York 10154
Attention: Lawrence Venick, Esq.
Email: lvenick@loeb.com
(b) if sent to the Company, shall be mailed, delivered, or faxed and confirmed in writing to the Company and its counsel at the addresses set forth in the Registration Statement.
13. Parties; Limitation of Relationship. This Agreement shall inure solely to the benefit of, and shall be binding upon, the Underwriters, the Company and the controlling persons, directors, officers, employees and agents referred to in Sections 7 and 8 hereof, and their respective successors and assigns, and no other person shall have or be construed to have any legal or equitable right, remedy or claim under or in respect of or by virtue of this Agreement or any provision herein contained. This Agreement and all conditions and provisions hereof are intended to be for the sole and exclusive benefit of the parties hereto and said controlling persons and their respective successors, officers, directors, heirs and legal representative, and it is not for the benefit of any other person. The term “successors and assigns” shall not include a purchaser, in its capacity as such, of Shares from any of the Underwriters.
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14. Governing Law; This Agreement shall be governed by and construed in accordance with the laws of the State of New York without regard to conflict of laws principles (other than Section 5-1401 of the General Obligations Law.
15. Submission to Jurisdiction, Etc. This Agreement shall be governed by and construed in accordance with the laws of the State of New York. The Company irrevocably (a) submits to the jurisdiction of any New York Court for the purpose of any suit, action, or other proceeding arising out of this Agreement, or any of the agreements or transactions contemplated by this Agreement, the Registration Statement and the Prospectus (each, a “Proceeding”), (b) agrees that all claims in respect of any Proceeding may be heard and determined in any such court, (c) waives, to the fullest extent permitted by law, any immunity from jurisdiction of any such court or from any legal process therein, (d) agrees not to commence any Proceeding other than in such courts, and (e) waives, to the fullest extent permitted by law, any claim that such Proceeding is brought in an inconvenient forum. EACH OF THE COMPANY (ON BEHALF OF ITSELF AND, TO THE FULLEST EXTENT PERMITTED BY LAW, ON BEHALF OF ITS RESPECTIVE EQUITY HOLDERS AND CREDITORS) HEREBY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED UPON, ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, THE REGISTRATION STATEMENT, AND THE PROSPECTUS.
16. Entire Agreement. This Agreement, together with the exhibits, schedules and annexes attached hereto and as the same may be amended from time to time in accordance with the terms hereof, constitutes the entire agreement of the parties to this Agreement and supersedes all prior or contemporaneous written or oral agreements, understandings, promises and negotiations with respect to the subject matter hereof.
17. Severability. If any term or provision of this Agreement or the performance thereof shall be invalid or unenforceable to any extent, such invalidity or unenforceability shall not affect or render invalid or unenforceable any other provision of this Agreement and this Agreement shall be valid and enforced to the fullest extent permitted by law.
18. Amendment. This Agreement may only be amended by a written instrument executed by each of the parties hereto.
19. Waiver, etc. The failure of any of the parties hereto to at any time enforce any of the provisions of this Agreement shall not be deemed or construed to be a waiver of any such provision, nor to in any way effect the validity of this Agreement or any provision hereof or the right of any of the parties hereto to thereafter enforce each and every provision of this Agreement. No waiver of any breach, non-compliance or non-fulfillment of any of the provisions of this Agreement shall be effective unless set forth in a written instrument executed by the party or parties against whom or which enforcement of such waiver is sought; and no waiver of any such breach, non-compliance or non-fulfillment shall be construed or deemed to be a waiver of any other or subsequent breach, non-compliance or non-fulfillment.
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20. No Fiduciary Relationship. The Company hereby acknowledges that the Underwriters are acting solely as underwriters in connection with the offering of the Company’s Shares. The Company further acknowledge that the Underwriters are acting pursuant to a contractual relationship created solely by this Agreement entered into on an arm’s length basis and in no event do the parties intend that the Underwriters act or be responsible as a fiduciary to the Company, its management, shareholders, creditors or any other person in connection with any activity that the Underwriters may undertake or have undertaken in furtherance of the offering of the Company’s Shares, either before or after the date hereof. The Underwriters hereby expressly disclaim any fiduciary or similar obligations to the Company, either in connection with the transactions contemplated by this Agreement or any matters leading up to such transactions, and the Company hereby confirms its understanding and agreement to that effect. The Company hereby further confirms its understanding that no Underwriter has assumed an advisory or fiduciary responsibility in favor of the Company with respect to the Offering contemplated hereby or the process leading thereto, including any negotiation related to the pricing of the Shares; and the Company has consulted its own legal and financial advisors to the extent it has deemed appropriate in connection with this Agreement and the Offering. The Company and the Underwriters agree that they are each responsible for making their own independent judgments with respect to any such transactions, and that any opinions or views expressed by the Underwriters to the Company regarding such transactions, including but not limited to any opinions or views with respect to the price or market for the Company’s securities, do not constitute advice or recommendations to the Company. The Company hereby waives and releases, to the fullest extent permitted by law, any claims that the Company may have against the Underwriters with respect to any breach or alleged breach of any fiduciary or similar duty to the Company in connection with the transactions contemplated by this Agreement or any matters leading up to such transactions.
21. Judgment Currency. The obligation of the Company in respect of any sum due to any Underwriter under this Agreement shall, notwithstanding any judgment in a currency other than U.S. dollars (the “Judgment Currency”), not be discharged until the first Business Day, following receipt by such Underwriter of any sum adjudged to be so due in the Judgment Currency, on which (and only to the extent that) such Underwriter may in accordance with normal banking procedures purchase U.S. dollars with the Judgment Currency; if the U.S. dollars so purchased are less than the sum originally due to such Underwriter hereunder, the Company agrees, as a separate obligation and notwithstanding any such judgment, to indemnify such Underwriter against such loss. If the U.S. dollars so purchased are greater than the sum originally due to such Underwriter hereunder, such Underwriter agrees to pay to the Company an amount equal to the excess of the U.S. dollars so purchased over the sum originally due to such Underwriter hereunder.
22. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute one and the same instrument. Delivery of a signed counterpart of this Agreement by facsimile or other electronic transmission shall constitute valid and sufficient delivery thereof.
23. Headings. The headings herein are inserted for convenience of reference only and are not intended to be part of, or to affect the meaning or interpretation of, this Agreement.
24. Time is of the Essence. Time shall be of the essence of this Agreement. As used herein, the term “Business Day” shall mean any day other than a Saturday, Sunday or any day on which the major stock exchanges in New York are not open for business.
[Signature Pages Follow]
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If the foregoing correctly sets forth your understanding, please so indicate in the space provided below for that purpose, whereupon this letter shall constitute a binding agreement among us.
Very truly yours, | ||
MOBILE-HEALTH NETWORK SOLUTIONS | ||
By: | ||
Name: | Siaw Tung Yeng | |
Title: | Co-Chief Executive Officer |
Accepted by the Representative, acting for themselves and as
Representative of the Underwriters named on Schedule I attached hereto,
as of the date first written above:
NETWORK 1 FINANCIAL SECURITIES, INC. | ||
By: | ||
Name: | Adam Pasholk | |
Title: | Managing Director Investment Banking |
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SCHEDULE I
Name of Underwriter | Number of Firm Shares Being Purchased | |
Network 1 Financial Securities, Inc. | [ ] | |
Total | [ ] |
SCHEDULE II
Lock-Up Parties
Siaw Tung Yeng
Teoh Pui Pui
Lai Kuan Loong Victor
Lun Kwok Chan
Gabe Rijpma
Peng Chee Yong
Rex Chin Chien Howh
Law Pei Bei
Nathan Siaw Seng Taat
Felicia Chan Siew
Siaw Tun Mine
Ng Jet Wei
SCHEDULE III
Issuer-Represented General Free Writing Prospectus
[None]
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ANNEX I
Form of Lock-Up Agreement
________, 2024
Network 1 Financial Securities, Inc.
2 Bridge Avenue, Suite 241
Red Bank, NJ 07701
Ladies and Gentlemen:
This Lock-Up Agreement (this “Agreement”) is being delivered to [UW] (the “Representative”) in connection with the proposed underwriting agreement (the “Underwriting Agreement”) between [__], a [__]company (the “Company”), and the Representative, relating to the proposed public offering (the “Offering”) of Class A Ordinary Shares, par value $0.000004 per share (the “Class A Ordinary Shares”), of the Company.
In order to induce the Underwriters (as defined in the Underwriting Agreement) to continue their efforts in connection with the Offering, and in light of the benefits that the Offering will confer upon the undersigned in its capacity as a shareholder and/or an officer, director or employee of the Company, and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the undersigned agrees with the Representative that, during the period beginning on and including the date of this Agreement through and including the date that is 180 days from the date of closing of the Offering (the “Lock-Up Period”), the undersigned will not, without the prior written consent of the Representative, directly or indirectly, (i) offer, sell, assign, transfer, pledge, contract to sell, or otherwise dispose of, or announce the intention to otherwise dispose of, any Class A Ordinary Shares now owned or hereafter acquired by the undersigned or with respect to which the undersigned has or hereafter acquires the power of disposition (including, without limitation, Class A Ordinary Shares which may be deemed to be beneficially owned by the undersigned in accordance with the rules and regulations promulgated under the Securities Act of 1933, as amended, and as the same may be amended or supplemented on or after the date hereof from time to time (the “Securities Act”)) (such shares, the “Beneficially Owned Shares”) or securities convertible into or exercisable or exchangeable for Class A Ordinary Shares, (ii) enter into any swap, hedge or similar agreement or arrangement that transfers in whole or in part, the economic risk of ownership of the Beneficially Owned Shares or securities convertible into or exercisable or exchangeable for Class A Ordinary Shares, whether now owned or hereafter acquired by the undersigned or with respect to which the undersigned has or hereafter acquires the power of disposition, or (iii) engage in any short selling of the Class A Ordinary Shares.
The restrictions set forth in the immediately preceding paragraph shall not apply to:
(1) if the undersigned is a natural person, any transfers made by the undersigned (a) as a bona fide gift to any member of the immediate family (as defined below) of the undersigned or to a trust the beneficiaries of which are exclusively the undersigned or members of the undersigned’s immediate family, (b) by will or intestate succession upon the death of the undersigned, (c) as a bona fide gift to a charity or educational institution, (d) any transfer pursuant to a qualified domestic relations order or in connection with a divorce; or (e) if the undersigned is or was an officer, director or employee of the Company, to the Company pursuant to the Company’s right of repurchase upon termination of the undersigned’s service with the Company;
Annex I |
(2) if the undersigned is a corporation, partnership, limited liability company or other business entity, any transfers to any shareholder, partner or member of, or owner of a similar equity interest in, the undersigned, as the case may be, if, in any such case, such transfer is not for value;
(3) if the undersigned is a corporation, partnership, limited liability company or other business entity, any transfer made by the undersigned (a) in connection with the sale or other bona fide transfer in a single transaction of all or substantially all of the undersigned’s share capital, partnership interests, membership interests or other similar equity interests, as the case may be, or all or substantially all of the undersigned’s assets, in any such case not undertaken for the purpose of avoiding the restrictions imposed by this Agreement or (b) to another corporation, partnership, limited liability company or other business entity so long as the transferee is an affiliate (as defined below) of the undersigned and such transfer is not for value;
(4) (a) exercises of stock options or equity awards granted pursuant to an equity incentive or other plan or warrants to purchase Class A Ordinary Shares or other securities (including by cashless exercise to the extent permitted by the instruments representing such stock options or warrants so long as such cashless exercise is effected solely by the surrender of outstanding stock options or warrants to the Company and the Company’s cancellation of all or a portion thereof to pay the exercise price), provided that in any such case the securities issued upon exercise shall remain subject to the provisions of this Agreement (as defined below); (b) transfers of Class A Ordinary Shares or other securities to the Company in connection with the vesting or exercise of any equity awards granted pursuant to an equity incentive or other plan and held by the undersigned to the extent, but only to the extent, as may be necessary to satisfy tax withholding obligations pursuant to the Company’s equity incentive or other plans;
(5) the exercise by the undersigned of any warrant(s) issued by the Company prior to the date of this Agreement, including any exercise effected by the delivery of shares of Class A Ordinary Shares of the Company held by the undersigned; provided, that, the Class A Ordinary Shares received upon such exercise shall remain subject to the restrictions provided for in this Agreement;
(6) the occurrence after the date hereof of any of (a) an acquisition by an individual or legal entity or “group” (as described in Rule 13d-5(b)(1) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) of effective control (whether through legal or beneficial ownership of share capital of the Company, by contract or otherwise) of 50% of the voting securities of the Company, (b) the Company merges into or consolidates with any other entity, or any entity merges into or consolidates with the Company, (c) the Company sells or transfers all or substantially all of its assets to another person, or (d) provided, that, the Class A Ordinary Shares received upon any of the events set forth in clauses (a) through (c) above shall remain subject to the restrictions provided for in this Agreement;
(7) the Offering;
(8) transfers consented to, in writing by the Representative;
(9) transactions relating to Class A Ordinary Shares acquired in open market transactions after the completion of the Offering; provided that, no filing by any party under the Exchange Act or other public announcement shall be required or shall be voluntarily made in connection with such transactions;
provided however, that in the case of any transfer described in clauses (1), (2) or (3) above, it shall be a condition to the transfer that the transferee executes and delivers to the Representative, acting on behalf of the Underwriters, not later than one business day prior to such transfer, a written agreement, in substantially the form of this Agreement (it being understood that any references to “immediate family” in the agreement executed by such transferee shall expressly refer only to the immediate family of the undersigned and not to the immediate family of the transferee) and otherwise satisfactory in form and substance to the Representative.
In addition, the restrictions set forth herein shall not prevent the undersigned from entering into a sales plan pursuant to Rule 10b5-1 under the Exchange Act after the date hereof, provided that (i) a copy of such plan is provided to the Representative promptly upon entering into the same and (ii) no sales or transfers may be made under such plan until the Lock-Up Period ends or this Agreement is terminated in accordance with its terms. For purposes of this paragraph, “immediate family” shall mean a spouse, child, grandchild or other lineal descendant (including by adoption), father, mother, brother or sister of the undersigned; and “affiliate” shall have the meaning set forth in Rule 405 under the Securities Act.
If the Undersigned is an officer or director of the Company, (i) the Representative agrees that at least three business days before the effective date of any release or waiver of the foregoing restrictions in connection with a Transfer of Class A Ordinary Shares, the Representative will notify the Company of the impending release or waiver and (ii) the Company has agreed in the Underwriting Agreement to announce the impending release or waiver by press release substantially in the form of Annex V thereto through a major news service at least two business days before the effective date of the release or waiver. Any release or waiver granted by the Representative hereunder to any such officer or director shall only be effective two business days after the publication date of such press release. The provisions of this paragraph will not apply if (a) the release or waiver is effected solely to permit a transfer not for consideration and (b) the transferee has agreed in writing to be bound by the same terms described in this Lock-Up Agreement to the extent and for the duration that such terms remain in effect at the time of the transfer.
In furtherance of the foregoing, (1) the undersigned also agrees and consents to the entry of stop transfer instructions with any duly appointed transfer agent for the registration or transfer of the securities described herein against the transfer of any such securities except in compliance with the foregoing restrictions, and (2) the Company, and any duly appointed transfer agent for the registration or transfer of the securities described herein, are hereby authorized to decline to make any transfer of securities if such transfer would constitute a violation or breach of this Agreement.
The undersigned hereby represents and warrants that the undersigned has full power and authority to enter into this Agreement and that this Agreement has been duly authorized (if the undersigned is not a natural person), executed and delivered by the undersigned and is a valid and binding agreement of the undersigned. This Agreement and all authority herein conferred are irrevocable and shall survive the death or incapacity of the undersigned (if a natural person) and shall be binding upon the heirs, personal representatives, successors and assigns of the undersigned for the term of the Lock-Up Period.
This Agreement shall automatically terminate upon the earliest to occur, if any, of (1) either the Representative, on the one hand, or the Company, on the other hand, advising the other that they have determined not to proceed with the Offering, (2) termination of the Underwriting Agreement before the sale of Class A Ordinary Shares, or (3) the withdrawal of the Registration Statement.
This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York, without regard to the conflict of laws principles thereof.
[Signature Page Follows]
Very truly yours, | ||
(Name - Please Print) | ||
(Signature) | ||
(Name of Signatory, in the case of entities - Please Print) | ||
(Title of Signatory, in the case of entities - Please Print) | ||
Address: | ||
# of Class A Ordinary Shares Held by Signatory: |
ANNEX II
FORM OF U.S. SECURITIES COUNSEL OPINION
[Intentionally Omitted.]
ANNEX III
FORM OF CAYMAN ISLANDS COUNSEL OPINION
[Intentionally Omitted.]
ANNEX IV
FORM OF OPINION OF SINGAPORE COUNSEL
[Intentionally Omitted.]
ANNEX V
FORM OF PRESS RELEASE
MOBILE-HEALTH NETWORK SOLUTIONS
__________, 202_
Mobile-Health Network Solutions (the “Company”) announced today that Network 1 Financial Securities, Inc., the sole book-running manager in the Company’s recent public sale of _____ Class A Ordinary Shares, are [waiving][releasing] a lock-up restriction with respect to ____ Class A Ordinary Shares held by [certain officers or directors] [an officer or director] of the Company. The [waiver][release] will take effect on ____, 202_ and the Class A Ordinary Shares may be sold on or after such date.
This press release is not an offer for sale of the securities in the United States or in any other jurisdiction where such offer is prohibited, and such securities may not be offered or sold in the United States absent registration or an exemption from registration under the United States Securities Act of 1933, as amended.
Exhibit 3.1
Exhibit 4.2
Underwriter’s Warrant
THE REGISTERED HOLDER OF THIS PURCHASE WARRANT AGREES BY HIS, HER OR ITS ACCEPTANCE HEREOF, THAT SUCH HOLDER WILL NOT FOR A PERIOD OF ONE HUNDRED EIGHTY (180) DAYS BEGINNING ON THE date of the commencemEnt of sales of the offering pursuant the registration statement No: 333-[ ] AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION: (A) SELL, TRANSFER, ASSIGN, PLEDGE OR HYPOTHECATE THIS PURCHASE WARRANT TO ANYONE OTHER THAN OFFICERS OR PARTNERS OF NETWORK 1 Financial Securities, Inc., EACH OF WHOM SHALL HAVE AGREED TO THE RESTRICTIONS CONTAINED HEREIN, IN ACCORDANCE WITH FINRA CONDUCT RULE 5110(E)(1), OR (B) CAUSE THIS PURCHASE WARRANT OR THE SECURITIES ISSUABLE HEREUNDER TO BE THE SUBJECT OF ANY HEDGING, SHORT SALE, DERIVATIVE, PUT OR CALL TRANSACTION THAT WOULD RESULT IN THE EFFECTIVE ECONOMIC DISPOSITION OF THIS PURCHASE WARRANT OR THE SECURITIES HEREUNDER, EXCEPT AS PROVIDED FOR IN FINRA RULE 5110(e)(2).
THIS PURCHASE WARRANT IS NOT EXERCISABLE PRIOR TO [ ], 202_1. VOID AFTER 5:00 P.M., EASTERN TIME, [ ], 202_2 .
ORDINARY SHARES PURCHASE WARRANT
For the Purchase of [ ] Ordinary Shares
of
MOBILE-HEALTH NETWORK SOLUTIONS.
1. Purchase Warrant. THIS ORDINARY SHARES PURCHASE WARRANT (this “Purchase Warrant”) certifies that, pursuant to that certain Underwriting Agreement by and between Mobile-health Network Solutions, a Cayman Islands exempted company (the “Company”) and Network 1 Financial Securities, Inc. (“Network 1”), dated [ ], 202_ (the “Underwriting Agreement”), Network 1 (in such capacity with its permitted successors or assigns, the “Holder”), as registered owner of this Purchase Warrant, is entitled, at any time or from time to time from [ ], 202_ (the “Exercise Date”)3, and at or before 5:00 p.m., Eastern time, [ ], 202_2 (the “Expiration Date”), but not thereafter, to subscribe for, purchase and receive, in whole or in part, up to [ ] Ordinary Shares of the Company, par value $0.001 per share (the “Shares”)4, subject to adjustment as provided in Section 5 hereof. If the Expiration Date is a day on which banking institutions are authorized by law or executive order to close, then this Purchase Warrant may be exercised on the next succeeding day which is not such a day in accordance with the terms herein. During the period commencing on the date hereof and ending on the Expiration Date, the Company agrees not to take any action that would terminate this Purchase Warrant. This Purchase Warrant is initially exercisable at $[ ] per Share (140% of the price of the Shares sold in the Offering); provided, however, that upon the occurrence of any of the events specified in Section 5 hereof, the rights granted by this Purchase Warrant, including the exercise price per Share and the number of Shares to be received upon such exercise, shall be adjusted as therein specified. The term “Exercise Price” shall mean the initial exercise price or the adjusted exercise price, depending on the context. Any term not defined herein shall have the meaning ascribed thereto in the Underwriting Agreement. [The Purchase Warrant is redeemable.]
2. Exercise.
2.1 Exercise Form. In order to exercise this Purchase Warrant, the exercise form attached hereto as Exhibit A (the “Exercise Form”) must be duly executed and completed and delivered to the Company, together with this Purchase Warrant and payment of the Exercise Price for the Shares being purchased payable in cash by wire transfer of immediately available funds to an account designated by the Company. If the subscription rights represented hereby shall not be exercised at or before 5:00 p.m., Eastern Time, on the Expiration Date, this Purchase Warrant shall become and be void without further force or effect, and all rights represented hereby shall cease and expire.
1 | Date that is 180 days following the date of the commencement of sales of the offering. |
2 | Date that is five years from the date of the commencement of sales of the offering. |
3 | Date that is 180 days following the date of the commencement of sales of the offering. |
4 | 7.5% of the number of Ordinary Shares sold in the Offering. |
2.2 Cashless Exercise. In lieu of exercising this Purchase Warrant by payment of cash pursuant to Section 2.1 above, Holder may elect to receive the number of Shares equal to the value of this Purchase Warrant (or the portion thereof being exercised), by surrender of this Purchase Warrant to the Company, together with the Exercise Form, in which event the Company shall issue to Holder, Shares in accordance with the following formula:
X = | Y(A – B) | |
A |
Where, | X = The number of Shares to be issued to Holder; |
Y = The number of Shares that would be issuable upon exercise of this Purchase Warrant in accordance with the terms of this Purchase Warrant if such exercise were by means of a cash exercise rather than a cashless exercise;
A = The fair market value of one Share; and
B = The Exercise Price of this Purchase Warrant, as adjusted hereunder.
For purposes of this Section 2.2, the fair market value of a Share is defined as follows:
(i) if the Company’s Ordinary Shares are traded on a securities exchange, the value shall be deemed to be the closing price on such exchange on the trading day immediately prior to the Exercise Form being submitted in connection with the exercise of this Purchase Warrant; or
(ii) if the Company’s Ordinary Shares are traded over-the-counter, the value shall be deemed to be the closing bid price on the trading day immediately prior to the Exercise Form being submitted in connection with the exercise of the Purchase Warrant;
(iii) if there is no active public market, the value shall be the fair market value thereof, as determined in good faith by the Company’s Board of Directors.
2.3 Legend. Each certificate for the securities purchased under this Purchase Warrant shall bear a legend as follows unless such securities have been registered under the Securities Act of 1933, as amended (the “Act”):
“(i) “THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR APPLICABLE STATE LAW. THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A LOCK-UP PERIOD OF ONE HUNDRED AND EIGHTY (180) DAYS FOLLOWING THE COMMENCEMENT OF SALES OF THE OFFERING PURSUANT TO THE REGISTRATION STATEMENT OF THE COMPANY’S SECURITIES (FILE NO. 333-[ ])) AND MAY NOT BE (A) SOLD, TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED TO ANYONE OTHER THAN NETWORK 1 FINANCIAL SERVICES INC. OR BONA FIDE OFFICERS OR PARTNERS OF NETWORK 1 FINANCIAL SECURITIES, INC., OR (B) CAUSED TO BE THE SUBJECT OF ANY HEDGING, SHORT SALE, DERIVATIVE, PUT OR CALL TRANSACTION THAT WOULD RESULT IN THE EFFECTIVE ECONOMIC DISPOSITION OF THIS SECURITIES HEREUNDER, EXCEPT AS PROVIDED FOR IN FINRA RULE 5110(E)(2).”
3. Transfer.
3.1 General Restrictions. The registered Holder of this Purchase Warrant agrees by his, her or its acceptance hereof, that such Holder will not for a period of one hundred eighty (180) days following the date of commencement of sales of the offering: (a) sell, transfer, assign, pledge or hypothecate this Purchase Warrant or any of the Shares issuable hereunder to anyone other than: (i) Network 1 or a selected dealer participating in the Offering contemplated by the Underwriting Agreement, or (ii) officers or partners of Network 1, each of whom shall have agreed to the restrictions contained herein, in accordance with FINRA Rule 5110(e)(1), or (b) cause this Purchase Warrant or the securities issuable hereunder to be the subject of any hedging, short sale, derivative, put or call transaction that would result in the effective economic disposition of this Purchase Warrant or the securities hereunder, except as provided for in FINRA Rule 5110(e)(2). The registered Holder of this Purchase Warrant will have the option to exercise, transfer or assign this Purchase Warrant at any time, provided that underlying securities shall not be transferred during the lock-up period; i.e., the Shares shall remain subject to the 180-day lock-up period. On and after that date that is one hundred eighty (180) days after the commencement of sales of the offering, transfers to others may be made subject to compliance with or exemptions from applicable securities laws. In order to make any permitted assignment, the Holder must deliver to the Company the assignment form attached hereto as Exhibit B duly executed and completed, together with this Purchase Warrant and payment of all transfer taxes, if any, payable in connection therewith. The Company shall within five (5) Business Days transfer this Purchase Warrant on the books of the Company and shall execute and deliver a new Purchase Warrant or Purchase Warrants of like tenor to the appropriate assignee(s) expressly evidencing the right to purchase the aggregate number of Shares purchasable hereunder or such portion of such number as shall be contemplated by any such assignment.
3.2 Restrictions Imposed by the Act. The securities evidenced by this Purchase Warrant shall not be transferred unless and until: (i) the Company has received the opinion of counsel for the Holder that the securities may be transferred pursuant to an exemption from registration under the Act and applicable state securities laws, the availability of which is established to the reasonable satisfaction of the Company, (ii) a Registration Statement relating to the offer and sale of such securities that includes a current prospectus has been filed and declared effective by the Securities and Exchange Commission (the “Commission”) and compliance with applicable state securities law has been established.
4. New Purchase Warrants to be Issued.
4.1 Partial Exercise or Transfer. Subject to the restrictions in Section 3 hereof, this Purchase Warrant may be exercised or assigned in whole or in part. In the event of the exercise or assignment hereof in part only, upon surrender of this Purchase Warrant for cancellation, together with the duly executed exercise or assignment form and funds sufficient to pay any Exercise Price and/or transfer tax if exercised pursuant to Section 2.1 hereof, the Company shall cause to be delivered to the Holder, without charge, a new Purchase Warrant of like tenor to this Purchase Warrant in the name of the Holder evidencing the right of the Holder to purchase the number of Shares purchasable hereunder as to which this Purchase Warrant has not been exercised or assigned.
4.2 Lost Certificate. Upon receipt by the Company of evidence satisfactory to it of the loss, theft, destruction or mutilation of this Purchase Warrant and of reasonably satisfactory indemnification or the posting of a bond, the Company shall execute and deliver a new Purchase Warrant of like tenor. Any such new Purchase Warrant executed and delivered as a result of such loss, theft, mutilation or destruction shall constitute a substitute contractual obligation on the part of the Company.
5. Adjustments.
5.1 Adjustments to Exercise Price and Number of Shares. The Exercise Price and the number of Shares underlying this Purchase Warrant shall be subject to adjustment from time to time as hereinafter set forth:
5.1.1 Share Dividends; Split Ups. If, after the date hereof, and subject to the provisions of Section 5.3 below, the number of outstanding Shares is increased by a share dividend payable in Shares or by a split up of Shares or other similar event, then, on the effective day thereof, the number of Shares purchasable hereunder shall be increased in proportion to such increase in outstanding shares, and the Exercise Price shall be proportionately decreased.
5.1.2 Aggregation of Shares. If, after the date hereof, and subject to the provisions of Section 5.3 below, the number of outstanding Shares is decreased by a consolidation, combination or reclassification of Shares or other similar event, then, on the effective date thereof, the number of Shares purchasable hereunder shall be decreased in proportion to such decrease in outstanding shares, and the Exercise Price shall be proportionately increased.
5.1.3 Replacement of Shares upon Reorganization, etc. In case of any reclassification or reorganization of the outstanding Shares other than a change covered by Section 5.1.1 or Section 5.1.2 hereof or that solely affects the par value of such Shares, or in the case of any share reconstruction or amalgamation or consolidation of the Company with or into another corporation (other than a consolidation or share reconstruction or amalgamation in which the Company is the continuing corporation and that does not result in any reclassification or reorganization of the outstanding Shares), or in the case of any sale or conveyance to another corporation or entity of the property of the Company as an entirety or substantially as an entirety in connection with which the Company is dissolved, the Holder of this Purchase Warrant shall have the right thereafter (until the expiration of the right of exercise of this Purchase Warrant) to receive upon the exercise hereof, for the same aggregate Exercise Price payable hereunder immediately prior to such event, the kind and amount of shares of stock or other securities or property (including cash) receivable upon such reclassification, reorganization, share reconstruction or amalgamation, or consolidation, or upon a dissolution following any such sale or transfer, by a Holder of the number of Shares of the Company obtainable upon exercise of this Purchase Warrant immediately prior to such event; and if any reclassification also results in a change in Shares covered by Section 5.1.1 or Section 5.1.2, then such adjustment shall be made pursuant to Section 5.1.1, Section 5.1.2 and this Section 5.1.3. The provisions of this Section 5.1.3 shall similarly apply to successive reclassifications, reorganizations, share reconstructions or amalgamations, or consolidations, sales or other transfers.
5.1.4 Changes in Form of Purchase Warrant. This form of Purchase Warrant need not be changed because of any change pursuant to this Section 5.1, and Purchase Warrants issued after such change may state the same Exercise Price and the same number of Shares as are stated in the Purchase Warrants initially issued pursuant to this Agreement. The acceptance by any Holder of the issuance of new Purchase Warrants reflecting a required or permissive change shall not be deemed to waive any rights to an adjustment occurring after the date hereof or the computation thereof.
5.2 Substitute Purchase Warrant. In case of any consolidation of the Company with, or share reconstruction or amalgamation of the Company with or into, another corporation (other than a consolidation or share reconstruction or amalgamation which does not result in any reclassification or change of the outstanding Shares), the corporation formed by such consolidation or share reconstruction or amalgamation shall execute and deliver to the Holder a supplemental Purchase Warrant providing that the holder of each Purchase Warrant then outstanding or to be outstanding shall have the right thereafter (until the stated expiration of such Purchase Warrant) to receive, upon exercise of such Purchase Warrant, the kind and amount of shares of stock and other securities and property receivable upon such consolidation or share reconstruction or amalgamation, by a holder of the number of Shares of the Company for which such Purchase Warrant might have been exercised immediately prior to such consolidation, share reconstruction or amalgamation, sale or transfer. Such supplemental Purchase Warrant shall provide for adjustments which shall be identical to the adjustments provided for in this Section 5. The above provision of this Section 5 shall similarly apply to successive consolidations or share reconstructions or amalgamations.
5.3 Elimination of Fractional Interests. The Company shall not be required to issue certificates representing fractions of Shares upon the exercise of the Purchase Warrant, nor shall it be required to issue scrip or pay cash in lieu of any fractional interests, it being the intent of the parties that all fractional interests shall be eliminated by rounding any fraction up or down, as the case may be, to the nearest whole number of Shares or other securities, properties or rights.
6. Registration Rights. The Company has filed the Registration Statement with the Commission, which has been declared effective on Form F-1 (File No. 333-[●]), and registers the underlying shares of the Purchase Warrant(s) granted to the Holder(s) in connection to the Offering, under the terms of the Underwriting Agreement.
6.1 Demand Registration.
6.1.1 Grant of Right. Unless all of the Registrable Securities (defined as below) are included in an effective registration statement with a current prospectus, the Company, upon written demand (“Demand Notice”) of the Holder(s) of at least 51% of the Purchase Warrants and/or the underlying securities (“Majority Holder(s)”), agrees to register, once at the Company’s expense and once at the Majority Holder’s expense, all or any portion of the remaining Ordinary Shares (collectively, the “Registrable Securities”) as requested by the Majority Holder(s) in the Demand Notice, provided that no such registration will be required unless the Holders request registration of an aggregate of at least 51% of the outstanding Registrable Securities. On such occasion, the Company will file a new registration statement or a post-effective amendment to the Registration Statement covering the Registrable Securities within sixty (60) days after receipt of the Demand Notice and use its commercially reasonable efforts to have such registration statement or post-effective amendment declared effective as soon as possible thereafter. The demand for registration may be made at any time after one (1) year from the date of effectiveness of the Registration Statement, but no later than three (3) years from the effective date of the Registration Statement. The Company covenants and agrees to give written notice of its receipt of any Demand Notice by any Holder(s) to all other registered Holders of the Purchase Warrants and/or the Registrable Securities within ten (10) days from the date of the receipt of any such Demand Notice, who shall have five days from the receipt of such Notice in which to notify the Company of their desire to have their Registrable Securities included in the Registration Statement.
6.1.2 Terms. The Company shall bear all fees and expenses attendant to registering the Registrable Securities upon the first Demand Notice, including the reasonable expenses of any legal counsel selected by the Holders to represent them in connection with the sale of the Registrable Securities, but the Holders shall pay any and all underwriting commissions, if any. The Holders shall bear all fees and expenses attendant to registering the Registrable Securities upon the second Demand Notice. The Company agrees to use its commercially reasonable efforts to qualify or register the Registrable Securities in such States as are reasonably requested by the Majority Holder(s); provided, however, that in no event shall the Company be required to register the Registrable Securities in a State in which such registration would cause (i) the Company to be obligated to qualify to do business in such State or execute a general consent to service of process, or would subject the Company to taxation as a foreign corporation doing business in such jurisdiction or (ii) the principal shareholders of the Company to be obligated to escrow their shares of the Company. The Company shall cause any registration statement or post-effective amendment filed pursuant to the demand rights granted under Section 6.1.1 to remain effective for a period of twelve (12) consecutive months from the effective date of such registration statement or post-effective amendment or until the Holders have completed the distribution of the Registrable Securities included in the Registration Statement, whichever occurs first.
6.1.3. Deferred Filing. If (i) in the good faith judgment of the Board, filing a registration statement pursuant to Section 6.1 would be seriously detrimental to the Company and the Board concludes, as a result, that it is essential to defer the filing of such registration statement at such time, and (ii) the Company shall furnish to such Holders a certificate signed by a duly authorized officer of the Company stating that in the good faith judgment of the Board it would be seriously detrimental to the Company for such registration statement to be filed in the near future and that it is, therefore, essential to defer the filing of such registration statement, then the Company shall have the right to defer such filing on two occasions for an aggregate of not more than one hundred and twenty (120) days in any twelve-month period.
6.1.4. No Cash Settlement Option. The Company is only required to use its commercially reasonable efforts to cause a registration statement covering issuance of the Registrable Securities underlying the Purchase Warrant to be declared effective, and once effective, only to use its commercially reasonable efforts to maintain the effectiveness of the registration statement. The Company will not be obligated to deliver securities, and there are no contractual penalties for failure to deliver securities, if a registration statement is not effective at the time of exercise. Additionally, in no event is the Company obligated to settle any Purchase Warrant, in whole or in part, for cash in the event it is unable to register the Registrable Securities.
6.1.5. Notwithstanding anything to the contrary provided herein, as to any particular Registrable Securities, such securities shall cease to be Registrable Securities when (i) the Commission has declared a Registration Statement covering such securities effective and such securities have been disposed of pursuant to such effective Registration Statement, (ii) such securities are sold under circumstances in which all of the applicable conditions of Rule 144 under the Securities Act are met, (iii) such securities become eligible for sale pursuant to Rule 144 without volume or manner-of-sale restrictions and without the requirement for the Company to be in compliance with the current public information requirement under Rule 144(c)(1), or such securities have ceased to be outstanding.
6.2 “Piggy-Back” Registration.
6.2.1 Grant of Right. Unless all of the Registrable Securities are included in an effective registration statement with a current prospectus, the Holders of the Purchase Warrants shall have the right for a period of not more than five (5) years from the commencement of sales of the offering, to include the remaining Registrable Securities as part of any other registration of securities filed by the Company (other than in connection with a transaction contemplated by Rule 145(a) promulgated under the Act or pursuant to Form S-8 or any successor or equivalent form); provided, however, that if, in the written opinion of the Company’s managing underwriter or underwriters, if any, for such offering, the inclusion of the Registrable Securities, when added to the securities being registered by the Company or the selling shareholder(s), will exceed the maximum amount of the Company’s securities which can be marketed (i) at a price reasonably related to their then current market value, and (ii) without materially and adversely affecting the entire offering, then the Company will still be required to include the Registrable Securities, but may require the Holders to agree, in writing, to delay the sale of all or any portion of the Registrable Securities for a period of ninety (90) days from the effective date of the offering, provided, further, that if the sale of any Registrable Securities is so delayed, then the number of securities to be sold by all shareholders in such public offering shall be apportioned pro rata among all such selling shareholders, including all holders of the Registrable Securities, according to the total amount of securities of the Company owned by said selling shareholders, including all holders of the Registrable Securities.
6.2.2 Terms. The Company shall bear all fees and expenses attendant to registering the Registrable Securities, including the expenses of any legal counsel selected by the Holders to represent them in connection with the sale of the Registrable Securities, but the Holders shall pay any and all underwriting commissions. In the event of such a proposed registration, the Company shall furnish the then Holders of outstanding Registrable Securities with not less than ten (10) days written notice prior to the proposed date of filing of such registration statement. Such notice to the Holders shall continue to be given for each applicable registration statement filed (during the period in which the Purchase Warrant is exercisable) by the Company until such time as all of the Registrable Securities have been registered and sold. The holders of the Registrable Securities shall exercise the “piggy back” rights provided for herein by giving written notice, within ten (10) days of the receipt of the Company’s notice of its intention to file a registration statement. The Company shall use its commercially reasonable efforts to cause any registration statement filed pursuant to the above “piggyback” rights that does not relate to a firm commitment underwritten offering to remain effective for at least nine (9) consecutive months from the effective date of such registration statement or until the Holders have completed the distribution of the Registrable Securities in the registration statement, whichever occurs first.
7. Reservation and Listing. The Company shall at all times reserve and keep available out of its authorized Shares, solely for the purpose of issuance upon exercise of this Purchase Warrant, such number of Shares or other securities, properties or rights as shall be issuable upon the exercise thereof. The Company covenants and agrees that, upon exercise of this Purchase Warrant and payment of the Exercise Price therefor, in accordance with the terms hereby, all Shares and other securities issuable upon such exercise shall be duly and validly issued, fully paid and non-assessable and not subject to preemptive rights of any shareholder. As long as this Purchase Warrant shall be outstanding, the Company shall use its commercially reasonable efforts to cause all Shares issuable upon exercise of this Purchase Warrant to be listed (subject to official notice of issuance) on all national securities exchanges (or, if applicable, on the OTC Bulletin Board or any successor trading market) on which the Shares issued to the public in the Offering may then be listed and/or quoted.
8. Certain Notice Requirements.
8.1 Holder’s Right to Receive Notice. Nothing herein shall be construed as conferring upon the Holders the right to vote or consent or to receive notice as a shareholder for the election of directors or any other matter, or as having any rights whatsoever as a shareholder of the Company. If, however, at any time prior to the expiration of the Purchase Warrants and their exercise, any of the events described in Section 8.2 shall occur, then, in one or more of said events, the Company shall give written notice of such event at least fifteen (15) days prior to the date fixed as a record date or the date of closing the transfer books (the “Notice Date”) for the determination of the shareholders entitled to such dividend, distribution, conversion or exchange of securities or subscription rights, or entitled to vote on such proposed dissolution, liquidation, winding up or sale. Such notice shall specify such record date or the date of the closing of the transfer books, as the case may be. Notwithstanding the foregoing, the Company shall deliver to each Holder a copy of each notice given to the other shareholders of the Company at the same time and in the same manner that such notice is given to the shareholders.
8.2 Events Requiring Notice. The Company shall be required to give the notice described in this Section 8 upon one or more of the following events: (i) if the Company shall take a record of the holders of its Shares for the purpose of entitling them to receive a dividend or distribution payable otherwise than in cash, or a cash dividend or distribution payable otherwise than out of retained earnings, as indicated by the accounting treatment of such dividend or distribution on the books of the Company, (ii) the Company shall offer to all the holders of its Shares any additional shares of the Company or securities convertible into or exchangeable for shares of the Company, or any option, right or warrant to subscribe therefor, or (iii) a dissolution, liquidation or winding up of the Company (other than in connection with a consolidation or share reconstruction or amalgamation) or a sale of all or substantially all of its property, assets and business shall be proposed.
8.3 Notice of Change in Exercise Price. The Company shall, promptly after an event requiring a change in the Exercise Price pursuant to Section 5 hereof, send notice to the Holders of such event and change (“Price Notice”). The Price Notice shall describe the event causing the change and the method of calculating same and shall be certified as being true and accurate by the Company’s Chief Financial Officer.
8.4 Transmittal of Notices. All notices, requests, consents and other communications under this Purchase Warrant shall be in writing and shall be deemed to have been duly made (1) when hand delivered, (2) when mailed by express mail or private courier service, (3) if sent by electronic mail, on the day the notice was sent if during regular business hours and, if sent outside of regular business hours, on the following business day, or (4) when the event requiring notice is disclosed in all material respects and filed in a Current Report on Form 6-K prior to the Notice Date: (i) if to the registered Holder of the Purchase Warrant, to the address of such Holder as shown on the books of the Company, or (ii) if to the Company, to following address or to such other address as the Company may designate by notice to the Holders:
If to the Holder:
Network 1 Financial Securities, Inc.
2 Bridge Ave., Suite 241
Red Bank, NJ 07701
Attention: Adam Pasholk, Managing Director
Email: adampasholk@netw1.com
with a copy (which shall not constitute notice) to:
Loeb & Loeb LLP
2206-19 Jardine House
1 Connaught Place
Central, Hong Kong SAR
Attention: Lawrence Venick, Esq. and David Levine, Esq.
Email: lvenick@loeb.com and dlevine@loeb.com
If to the Company:
Mobile-health Network Solutions
2 Venture Drive, #07-06/07 Vision Exchange
Singapore 608526
Attention: Siaw Tung Yeng, Co-CEO
Email: [ ]
with a copy (which shall not constitute notice) to:
Sidley Austin
c/o 39/F, Two Int’l Finance Centre
8 Finance St, Central, Hong Kong
Attn: Meng Ding, Esq. and Lisa Forcht, Esq.
Email: [ ] and [ ]
9. Miscellaneous.
9.1 Amendments. The Company and Network 1 may from time to time supplement or amend this Purchase Warrant without the approval of any of the Holders in order to cure any ambiguity, to correct or supplement any provision contained herein that may be defective or inconsistent with any other provisions herein, or to make any other provisions in regard to matters or questions arising hereunder that the Company and Network 1 may deem necessary or desirable and that the Company and Network 1 deem shall not adversely affect the interest of the Holders. All other modifications or amendments shall require the written consent of and be signed by the party against whom enforcement of the modification or amendment is sought.
9.2 Headings. The headings contained herein are for the sole purpose of convenience of reference, and shall not in any way limit or affect the meaning or interpretation of any of the terms or provisions of this Purchase Warrant.
9.3 Entire Agreement. This Purchase Warrant (together with the other agreements and documents being delivered pursuant to or in connection with this Purchase Warrant) constitutes the entire agreement of the parties hereto with respect to the subject matter hereof, and supersedes all prior agreements and understandings of the parties, oral and written, with respect to the subject matter hereof.
9.4 Binding Effect. This Purchase Warrant shall inure solely to the benefit of and shall be binding upon, the Holder and the Company and their permitted assignees and respective successors and no other person shall have or be construed to have any legal or equitable right, remedy or claim under or in respect of or by virtue of this Purchase Warrant or any provisions herein contained.
9.5 Governing Law; Submission to Jurisdiction. This Purchase Warrant shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without giving effect to conflict of laws principles thereof. Each of the Company and the Holder hereby agrees that any action, proceeding or claim against it arising out of, or relating in any way to this Purchase Warrant shall be brought and enforced in the Borough of Manhattan in The City of New York (each, a “New York Court”), and irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive. Each of the Company and the Holder hereby waives any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum. Any process or summons to be served upon the Company may be served by transmitting a copy thereof by registered or certified mail, return receipt requested, postage prepaid, addressed to it at the address set forth in Section 8.4 hereof. Such mailing shall be deemed personal service and shall be legal and binding upon the Company in any action, proceeding or claim.
9.6 Waiver, etc. The failure of the Company or the Holder to at any time enforce any of the provisions of this Purchase Warrant shall not be deemed or construed to be a waiver of any such provision, nor to in any way affect the validity of this Purchase Warrant or any provision hereof or the right of the Company or any Holder to thereafter enforce each and every provision of this Purchase Warrant. No waiver of any breach, non-compliance or non-fulfillment of any of the provisions of this Purchase Warrant shall be effective unless set forth in a written instrument executed by the party or parties against whom or which enforcement of such waiver is sought; and no waiver of any such breach, non-compliance or non-fulfillment shall be construed or deemed to be a waiver of any other or subsequent breach, non-compliance or non-fulfillment.
9.7 Exchange Agreement. As a condition of the Holder’s receipt and acceptance of this Purchase Warrant, Holder agrees that, at any time prior to the complete exercise of this Purchase Warrant by Holder, if the Company and Network 1 enter into an agreement (“Exchange Agreement”) pursuant to which they agree that all outstanding Purchase Warrants will be exchanged for securities or cash or a combination of both, then Holder shall agree to such exchange and become a party to the Exchange Agreement.
9.8 Execution in Counterparts. This Purchase Warrant may be executed in one or more counterparts, and by the different parties hereto in separate counterparts, each of which shall be deemed to be an original, but all of which taken together shall constitute one and the same agreement, and shall become effective when one or more counterparts has been signed by each of the parties hereto and delivered to each of the other parties hereto. Such counterparts may be delivered by facsimile transmission or other electronic transmission.
9.9 Restrictions. The Holder acknowledges that the Shares acquired upon the exercise of this Purchase Warrant, if not registered, and the Holder does not utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.
9.10 Severability. Wherever possible, each provision of this Purchase Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Purchase Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Purchase Warrant.
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IN WITNESS WHEREOF, the Company has caused this Purchase Warrant to be signed by its duly authorized officer as of the ____ day of _______, 202_.
MOBILE-HEALTH NETWORK SOLUTIONS | ||
By: | ||
Name: | Siaw Tung Yeng | |
Title: | Co-Chief Executive Officer |
EXHIBIT A
EXERCISE FORM
Form to be used to exercise Purchase Warrant:
Date: __________, 20___
The undersigned hereby elects irrevocably to exercise the Purchase Warrant for ______ Shares of Mobile-health Network Solutions, a Cayman Islands exempted company (the “Company”) and hereby makes payment of $____ (at the rate of $____ per Share) in payment of the Exercise Price pursuant thereto. Please issue the Shares as to which this Purchase Warrant is exercised in accordance with the instructions given below and, if applicable, a new Purchase Warrant representing the number of Shares for which this Purchase Warrant has not been exercised.
or
The undersigned hereby elects irrevocably to convert its right to purchase ___ Shares under the Purchase Warrant for ______ Shares, as determined in accordance with the following formula:
X | = | Y(A-B) | ||
A |
Where,
X = The number of Shares to be issued to Holder;
Y = The number of Shares that would be issuable upon exercise of this Purchase Warrant in accordance with the terms of this Purchase Warrant if such exercise were by means of a cash exercise rather than a cashless exercise;
A = The fair market value of one Share; and
B = The Exercise Price of this Purchase Warrant, as adjusted hereunder
The undersigned agrees and acknowledges that the calculation set forth above is subject to confirmation by the Company and any disagreement with respect to the calculation shall be resolved by the Company in its sole discretion.
Please issue the Shares as to which this Purchase Warrant is exercised in accordance with the instructions given below and, if applicable, a new Purchase Warrant representing the number of Shares for which this Purchase Warrant has not been exercised.
Signature
Signature Guaranteed
INSTRUCTIONS FOR REGISTRATION OF SECURITIES
Name: | |
(Print in Block Letters) | |
Address: |
NOTICE: The signature to this form must correspond with the name as written upon the face of the Purchase Warrant without alteration or enlargement or any change whatsoever, and must be guaranteed by a bank, other than a savings bank, or by a trust company or by a firm having membership on a registered national securities exchange.
EXHIBIT B
ASSIGNMENT FORM
Form to be used to assign Purchase Warrant:
(To be executed by the registered Holder to effect a transfer of the within Purchase Warrant):
FOR VALUE RECEIVED, does hereby sell, assign and transfer unto the right to purchase shares of Mobile-health Network Solutions, a Cayman Islands exempted company (the “Company”), evidenced by the Purchase Warrant and does hereby authorize the Company to transfer such right on the books of the Company to
_______________________________________________ whose address is
_______________________________________________________________.
_______________________________________________________________
Dated: ____________, 20__
Holder’s Signature: _____________________________
Holder’s Address: _____________________________
_____________________________
Signature Guaranteed: ___________________________________________
NOTICE: The signature to this form must correspond with the name as written upon the face of the within Purchase Warrant without alteration or enlargement or any change whatsoever, and must be guaranteed by a bank or trust company. Officers of corporations and those acting in a fiduciary or other representative capacity should file proper evidence of authority to assign the foregoing Purchase Warrant.
Exhibit 4.3
DATED
BETWEEN
The Parties whose names are listed in Schedule 1
as the Investors
AND
Mobile-health Network Solutions
as the Company
SUBSCRIPTION AGREEMENT
relating to Mobile-health Network Solutions
TABLE OF CONTENTS
1. | DEFINITIONS AND INTERPRETATION | 1 |
2. | SUBSCRIPTION OF CLASS A SHARES | 5 |
3. | SUBSCRIPTION CONSIDERATION | 5 |
4. | CONDITIONS PRECEDENT | 5 |
5. | CONDUCT BEFORE THE CLOSING | 6 |
6. | REPRESENTATIONS AND WARRANTIES | 7 |
7. | COMPANY’S LIABILITY | 8 |
8. | INVESTOR’S WARRANTIES | 8 |
9. | INVESTOR RIGHTS | 9 |
10. | CLOSING AND PAYMENT OF CONSIDERATION | 9 |
11. | POST-CLOSING UNDERTAKINGS | 10 |
12. | TERMINATION | 10 |
13. | CONFIDENTIALITY AND ANNOUNCEMENT | 11 |
14. | MISCELLANEOUS | 12 |
SCHEDULE 1 | 15 | |
SCHEDULE 2 | 16 | |
SCHEDULE 3 | 17 | |
SCHEDULE 4 | 18 | |
SCHEDULE 5 | 19 |
THIS AGREEMENT is dated
PARTIES
(1) | The parties whose names are listed in Schedule 1 (the “Investors”, and each an “Investor”); and |
(2) | Mobile-health Network Solutions (Registration Number: CT-313720), a company duly incorporated in the Cayman Islands and having its registered office at Cricket Square, Hutchins Drive, P.O. Box 2681, Grand Cayman, KY1-1111, Cayman Islands (the “Company”). |
(Each a “Party” and together, the “Parties”).
WHEREAS
(A) | The Company was incorporated in the Cayman Islands on 28 July 2016 and has, at the date of this Agreement, an authorized share capital of US$50,000 divided into 25,000,000 Class A Shares of a nominal value of US$0.001 each (“Class A Shares”) and 25,000,000 Class B Shares of a nominal value of US$0.001 each (“Class B Shares”). The relevant particulars of the Group Companies (as defined below) are set out in Schedule 2. |
(B) | The Company proposes to raise additional capital that will result in the Company receiving capital from the Investors at the Pre-Money Valuation (as defined below). |
(C) | The Investors desire to invest in the Company and to subscribe for Class A Shares in the share capital of the Company, on the terms and subject to the conditions contained in this Agreement. |
IT IS AGREED:
1. | DEFINITIONS AND INTERPRETATION |
1.1 | In this Agreement and in the Schedules, unless the context otherwise requires: |
Accounts | means the audited (or unaudited if exempted from audit) financial statements, management reports, relevant balance sheets, profit and loss accounts, cash flow statements and related notes together with all documents which are or would be required by law to be annexed to the accounts of each of the Group Companies, to be laid down in a general meeting for the accounting period in question; |
Act | means the Cayman Islands Companies Act (2021 Revision) and includes any provision thereof as from time to time modified or re-enacted; |
Active Companies | means Manadr Pte. Ltd., Mobile Health Pte. Ltd. and 1HealthService Pte. Ltd.; |
Affiliate | means any person or entity which the Company and/or the Founder, directly or indirectly, through one or more intermediaries or otherwise, control |
Amended Articles | means the amended articles of association of the Company in the agreed form; |
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Applicable Laws | means, with respect to any person, any and all applicable constitutions, treaties, statutes, laws, by-laws, regulations, ordinances, codes, rules, rulings, judgments, rules of common law, orders, decrees, awards, injunctions or any form of decisions, determinations or requirements of or made or issued by, governmental, statutory, regulatory, administrative, supervisory or judicial authorities or bodies (including without limitation, any relevant stock exchange or securities council) or any court, arbitrator or tribunal with competent jurisdiction, whether in Singapore or elsewhere, as amended or modified from time to time, and to which such person is subject; |
Articles | means the articles of association of the Company; |
Board | means the board of directors of the Company; |
Business | means the business of the Group Companies which is the provision of both online and offline medical related services, including but not limited to the telemedicine app, MaNaDr; |
Business Day | means a day other than a Saturday, Sunday or public holiday in Singapore, on which banks are open in Singapore and the Cayman Islands for general commercial business; |
Closing | means the fulfilment of the obligations for subscription by the Investors and the allotment, and issuance by the Company of Subscription Shares pursuant to Clause 10; |
Closing Date | means the 3rd Business Day after the last of the conditions precedent in Clause 4.1 is satisfied or waived in accordance with this Agreement (or such other date as the Company and the Investors may agree); |
Closing Provisions | means the Parties’ obligations as set out in Clause 10.2 and 10.3; |
Company’s Bank Account | means the Company’s corporate bank account held with , under the account name Mobile-health Network Solutions, with the account number , and with SWIFT code ; |
Confidential Information | means the terms of this Agreement, the terms of any preceding term sheet, any information received by any Party from another Party in relation to this Agreement which is confidential and proprietary to the disclosing Party (including any information which is marked as ‘confidential’ by the disclosing Party), but does not include any information which is or has become generally available in the public domain (other than through a breach of the confidentiality obligations in this Agreement); |
Consolidated Group Audited Accounts | means the audited consolidated accounts of the Group Companies for the Financial Period; |
Consolidated Group Management Accounts | means the unaudited consolidated accounts of the Group Companies for the Financial Period; |
Consolidated Group Management Accounts Date | means 31 December 2022; |
Consideration | shall have the meaning ascribed to it in Clause 3.1.1; |
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Data | means any data or information (including any personal data), in whatever form; |
Encumbrance | means an interest or power reserved in or over an interest in any asset or created or otherwise arising in or over any interest in any asset under a security agreement, any mortgage, assignment of receivables, debenture, lien, hypothecation, charge, pledge, title retention, right to acquire, security interest, option, pre-emptive or other similar right, right of first refusal, restriction, third-party right or interest by way of, or having similar commercial effect to, security for the payment of a debt, any other monetary obligation or the performance of any other obligation and includes, without limitation, any other encumbrance, condition or security interest whatsoever; |
Existing Shareholders’ Agreements | means the Terms of Agreement entered into by the Shareholders as at the date of such Agreement; |
Financial Period | means the years ended 30 June 2021, 30 June 2022 and the six-months ended 31 December 2022; |
Financial Year | means the period in respect of which an audited (or unaudited if exempted from audit) profit and loss account of each Group Company has or is to be prepared for the purpose of laying before each Group Company at its annual general meeting, and “Financial Quarter” shall mean every period of three consecutive months starting from the beginning of that Financial Year; |
Founder | Dr Siaw Tung Yeng (Singapore NRIC Number ) of 2 Venture Drive, #07-06/07 Vision Exchange, Singapore 608526 |
Group or Group Companies | means collectively, the Company and its subsidiaries and their representative offices set out in Schedule 2; |
IPO | means initial public offering of the securities of the Company on Nasdaq or such other stock exchange as may be approved by the Investors; |
Key Persons | Means any key executives, including the Founder, who hold positions in the top management tier of the Company or other key members of the Group, such as chief executive officer, chief operating officer, chief financial officer, chief technological officer and other similar positions; |
Lead Investor | means ICHAM Master Fund VCC – ICH Gemini Global Fund (Class A Participating Shares); |
material nature | means the occurrence of any fact, matter, event or circumstance which directly relates to the Company and/or the Group that results in or could reasonably be expected to result in a material adverse effect amounting to a value of no less than US$100,000 on the net assets, business, liabilities, financial condition, or results of operations of the Company and/or the Group; |
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Pre-Money Valuation | means the pre-money valuation of the Company at S$ ; |
Registry | means the Cayman Islands General Registry (or the Cayman Islands Company Registry, as the case may be); |
shares | means shares in the share capital of the Company or its subsidiaries, as the case may be (whether Class A Shares or Class B Shares or any other class of shares); |
Shareholders | means the shareholders of the Company; |
Shareholders’ Resolution | means the resolution passed by the Shareholders; |
S$ | means the lawful currency of Singapore; |
Subscription Shares | shall have the meaning ascribed to it in Clause 2.1.1; |
Tax and Taxation | includes: |
(a) | all forms of taxation, duties, impost, levies and rates whenever created or imposed in any and all relevant jurisdictions in which the Group Companies operate their business and without prejudice to the generality of the foregoing and where the context so admits, shall include income tax, property tax, capital duty, stamp duty, sales tax, payroll tax, withholding tax, rates, customs and excise duties, and generally any tax, duty, impost, levy or rate or any amount payable to the revenue customs or fiscal authorities of any and all relevant jurisdictions; | |
(b) | all amounts equal to any deprivation of any relief, allowance, set-off or deduction in computing profits or right to repayment of taxation granted by or pursuant to legislation concerning or otherwise relating to taxation; and | |
(c) | all costs, interest, penalties, charges and expenses incidental or in relation to any of the above; |
US$ | means the lawful currency of the United States of America; |
Warranties | means the warranties contained in Clause 6 and Schedule 3; |
Warrantor | means the Company; and |
% | means percentage. |
1.1 | Headings are for convenience only and do not affect interpretation. |
1.2 | Words denoting the singular shall include the plural and vice versa, and references to one gender include the other gender. |
1.3 | Words denoting persons include individuals, corporations, companies, partnerships, firms, joint ventures, syndicates, or other business enterprises, and include their respective estates,personal representatives, successors in title or permitted assigns (as the case may be) and if there is more than one person, their obligations and liabilities shall be joint and several. |
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1.4 | If a word or phrase is defined, its other grammatical forms have corresponding meaning. |
1.5 | Any reference to a recital, clause, schedule, or party is to the relevant recital, clause, schedule, or party of or to this Agreement, and any reference to this Agreement or any of its provisions include all amendments and modifications made to this Agreement in accordance with the terms herein from time to time in force. |
1.6 | Any reference to legislation, subsidiary legislation or other rules and regulations enacted by any government agency, body or other regulatory authority includes a modification or re-enactment of it, a legislative provision substituted for it and a regulation or statutory instrument issued under it. |
1.7 | Any reference to “writing” or cognate expressions includes any communications effected by telex, cable facsimile transmission, electronic mail, or other modes of reproducing words in visible form. |
1.8 | Any reference to an “agreement” includes any undertaking, deed, agreement, and legally enforceable arrangement whether in writing and a reference to a document includes an agreement (as so defined) in writing and any certificate, notice, instrument, and document of any kind. |
1.9 | If any period is specified from a given day, or the day of a given act or event, it is to be calculated exclusive of that day and if any expiry of a period of time falls on a day which is not a Business Day, then that period is to be deemed to only expire on the next Business Day. |
2. | SUBSCRIPTION OF CLASS A SHARES |
2.1 | Class A Shares |
2.1.1 | Subject to the terms and conditions of this Agreement, the Company shall allot and issue, and the Investors shall subscribe for the number of Class A Shares in the Company set out against the name of the relevant Investor in Schedule 1 (the “Subscription Shares”) (being in aggregate Class A Shares in the Company), free from all Encumbrances and ranking pari passu with all other existing Shares in respect of all voting rights, dividends, entitlements and privileges attached to the existing Shares as of and including the Closing Date. |
3. | SUBSCRIPTION CONSIDERATION |
3.1 | Consideration |
3.1.1 | The consideration to be paid by the Investors for the allotment and issuance of the Subscription Shares (“Consideration”) shall be the amount as stated against their names in Schedule 1. |
3.2 | Use of Proceeds |
The Company hereby undertakes to the Investors that, unless the Investors otherwise agree in writing, the proceeds received will be used for working capital and Business expansion.
4. | CONDITIONS PRECEDENT |
4.1 | The obligation of the Investors to subscribe and make payment for the Subscription Shares at Closing is conditional upon the Investors being satisfied in their absolute discretion that the following conditions have been fulfilled (if not otherwise waived by the Investors) on or prior to the Closing Date in accordance with this Clause 4: |
(a) | all necessary approvals and consents (including from all relevant governmental or regulatory authorities and other third parties) (if any) having been obtained from all jurisdictions where the Group Companies have operations or subsidiaries in respect of the Company’s entry into this Agreement; |
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4.2 | The Parties (other than the Investors) shall use their reasonable efforts to ensure that all conditions in Clause 4.1 will be fulfilled without delay and shall co-operate with each other to the extent reasonably required in order to fully effectuate the transactions contemplated herein. |
4.3 | If, at any time, any of the Company or the Founder becomes aware of a fact or circumstance that might prevent the satisfaction of any condition set out in Clause 4.1, it/he/she shall, as soon as reasonably practicable, inform the Investors of the matter. |
4.4 | In the event that any of the conditions in Clause 4.1 are not fulfilled or not waived by the Investors on or before the Closing, the Investors shall, by way of written notice, (a) elect to terminate this Agreement without liability on their part; (b) effect Closing as far as practicable; or (c) fix a new date for Closing in which the foregoing provisions in this Clause 4 shall apply. |
5. | CONDUCT BEFORE THE CLOSING |
5.1 | From the date of this Agreement until the Closing (and except for any matter or thing hereafter done or omitted to be done to the extent required under this Agreement or otherwise at the request in writing or with the approval in writing of the Investors), the Company hereby undertakes with the Investors that the Company shall procure that: |
(a) | the Group Companies shall take all reasonable steps to preserve and protect the Group Companies’ assets and goodwill (including its existing relationships with customers and suppliers) and act at all times in the best interests of the Group Companies; | |
(b) | the Group Companies shall carry on its operations in the ordinary and usual course of business, consistent with past practice and existing policies and in accordance with Applicable Laws; | |
(c) | upon reasonable advance notice and upon the request of any Investor, the Group Companies shall permit such Investor making such request to have any of their authorised directors, employees, representatives or agents, at such Investor’s own cost, visit and inspect any of the Group Companies’ properties and discuss any Group Company’s affairs, finances and accounts with its officers during normal business hours of the relevant Group Company; | |
(d) | the Company shall confer with the Investors on all matters of a material nature relating to the Group Companies and their businesses; | |
(e) | neither the Company nor any Group Company shall carry out or enter into any arrangement or agreement to carry out any action of a material nature which will materially and adversely impact the value of the Company and any Group Company, including the matters listed below: |
(i) | the acquisition or disposal of any asset of the Company or any Group Company, in each case, involving consideration, expenditure or liabilities in excess of S$100,000; and | |
(ii) | the declaration, authorisation or payment by the Company or any Group Company of any dividend or other distribution (whether in cash, stock or in kind) or the reduction, purchase or redemption of any part of the paid-up share capital of the Company or Group Company (as the case may be); and |
(f) | neither the Company nor any Group Company shall carry out or enter into any arrangement or agreement to carry out any action which will result in any change in their respective share capital, the management or constitution of their board of directors, or a change of control of the Company (save as otherwise contemplated under this Agreement) or a change in the Company’s control of any Group Company. |
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5.2 | Nothing in Clause 5.1 shall operate so as to restrict or prevent any of the following: |
(a) | any action required or expressly contemplated by this Agreement; | |
(b) | any action reasonably undertaken by the Company, the Founder or any Group Company in the case of an emergency or disaster or other serious incident or circumstance with the intention of minimising any adverse effect on the Company or any Group Company (and of which the Investors will be notified as soon as reasonably practicable); | |
(c) | taking any action that the Company, the Founder or any Group Company reasonably considers is required to be undertaken in order to comply with any law or regulation (including the requirements of any Applicable Laws) in the best interests of the Company or Group Company provided that the Company: |
(i) | consult in good faith with the Investors prior to taking any such action to the extent reasonably practicable; and | |
(ii) | take account of any reasonable requests of the Investors with respect to such action. |
5.3 | The Company further undertakes with the Investors to notify the Investors in writing promptly if it/he becomes aware of any breach of the undertakings contained in this Clause 5. |
6. | REPRESENTATIONS AND WARRANTIES |
6.1 | Warrantor’s Representations and Warranties |
6.1.1 | Each of the Warrantors hereby jointly and severally represents, warrants, and undertakes to the Investors that each of the Warranties is true and accurate in all material respects, is not misleading in any material respect at the date of this Agreement, and that each will remain true and accurate in all material respects and is not misleading in any material respect on the Closing Date as if each has been repeated and given afresh on the Closing Date. |
6.1.2 | The Warranties are qualified to the extent fully, fairly and specifically disclosed with sufficient detail on the face of such document to enable the Investors to understand the nature and scope of its impact by any specific disclosures made by the Warrantors in writing, whether in agreed form, in response to queries or otherwise, providing explanation satisfactory to the Investors and detail to enable the Investors to clearly identify the nature, scope and implications of the matters so specifically disclosed. |
6.2 | Investors’ Reliance |
Each of the Warrantors acknowledges and accepts that the Investors are entering into this Agreement in reliance upon the Warranties.
6.3 | Warranties to be Independent |
Each Warranty is to be construed independently and (subject to Clause 6.1.2 and any other exceptions provided for under this Agreement) is not limited by any provision of this Agreement or another Warranty. For the avoidance of doubt, nothing contained in Clause 6.1.2 reverses the Warrantors’ burden of proving that they are entitled to rely on the qualifications set out therein.
6.4 | Awareness of the Warrantors |
Any Warranty qualified by the Warrantors’ awareness, the expression “so far as the Warrantors are aware” or any similar expression shall, unless otherwise stated, be deemed to refer to the actual knowledge of the Warrantors and such knowledge that the Warrantors would have had if they had made reasonable enquiry of all relevant persons.
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6.5 | Notification |
If prior to Closing, any event shall occur which results or may result in any of the Warranties being unfulfilled, untrue or incorrect at the date of this Agreement and/or at Closing, the Warrantors upon becoming aware of the same, shall as soon as reasonably possible, notify the Investors in writing prior to Closing and the Warrantors shall make all such investigations and/or do all such acts concerning the event or matter (including bearing the costs) which the Investors may reasonably require.
6.6 | Warrantors’ Indemnities |
6.6.1 | The Company undertakes to indemnify and keep indemnified the Investors from and against all losses that may be suffered or incurred by the Investors which arise out of or result from: |
(a) | any Tax liability incurred or payable by any of the Group Companies arising from any non-compliance under Applicable Laws in Singapore; | |
(b) | any breach of a covenant or undertaking of the Company contained in this Agreement or the Existing Shareholders’ Agreements; and | |
(c) | any omission or failure to register any of the Group Companies’ businesses or obtain business or operational licences or permits as required under Applicable Laws. |
6.6.2 | All amounts sought to be recovered by any Investor from the Company pursuant to Clause 6.6.1 shall be grossed up to exclude such Investor’s shareholding in the Company, to ensure that such Investor does not have to directly or indirectly bear a portion of such amounts by virtue of its shareholding in the Company. |
7. | COMPANY’S LIABILITY |
7.1 | The liability of the Company under or pursuant to any of the provisions of this Agreement shall be joint and several. Any liability to the Investors under this Agreement may in whole or in part be released, compounded or compromised or time or indulgence given by the Investors within their reasonable assessment as regards the Company under such liability without in any way prejudicing or affecting its rights against the other Parties under the same or a like liability whether joint or several or otherwise. |
7.2 | The Investors shall not be entitled to recover damages in respect of any claim or otherwise obtain reimbursement or restitution more than once in respect of the same amount of loss. For the avoidance of doubt, nothing in this Agreement shall in any way restrict or limit the general obligation at law of the Investor or each Group Company to mitigate any loss or damage which it may suffer in consequence of any breach by the Warrantors of the terms of the Agreement. |
8. | INVESTOR’S WARRANTIES |
8.1 | Each Investor hereby represents, warrants, and undertakes to the Warrantors that the statements below are true, accurate and not misleading as at the date of this Agreement, and that they will remain true and accurate on the Closing Date as if they have been repeated and given afresh on the Closing Date: |
8.2 | Each Investor hereby represents, warrants, and undertakes to the Warrantors that:- |
(a) | where such Investor is an individual, such Investor has attained the age of 21, is of sound mind and legal competence and have not been adjudged a bankrupt; | |
(b) | where such Investor is a corporation or entity, such Investor is duly organized and validly existing under the laws of is place of incorporation or establishment; and no steps have been taken or being taken to appoint a receiver, manager or liquidator over its assets or undertaking, or to wind up or dissolve the business of such Investor; |
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(c) | such Investor has the full power and authority to enter into and perform all obligations under this Agreement, and all other agreements and transactions contemplated in this Agreement, and all obligations hereby entered into and undertaken constitute valid and legally binding obligations enforceable against it; | |
(d) | the performance of its obligations under this Agreement, and all other agreements and transactions contemplated in this Agreement, will not result in: |
(i) | a breach of its constitutional documents (if such Investor is a corporation or entity), or any instrument, contract, document, agreement or any other obligation to which such Investor is bound; | |
(ii) | a breach of any order, judgment or decree of any court, governmental agency or regulatory body having jurisdiction over each Investor; or | |
(iii) | a breach of any Applicable Laws, |
(e) | such Investor shall have and maintains in effect at all times during the term of this Agreement, all licences, authorisations, permits, consents and approvals from the relevant governmental, regulatory or other competent authorities to perform its obligations under this Agreement; | |
(f) | on Closing, such Investor is or will be able to pay the Consideration as stated against such Investor’s name in Schedule 1 for the relevant Subscription Shares subscribed for and to meet his/its obligations under this Agreement, and the source of funds of such Investor is in compliance with all Applicable Laws and not the subject of any form of sanction under any Applicable Law. |
8.3 | If prior to Closing, any event shall occur which results or may result in any of such Investor’s warranties in Clause 8.1 being unfulfilled, untrue, incorrect or misleading at the date of this Agreement and/or at the Closing Date, such Investor upon becoming aware of the same, shall as soon as reasonably possible notify the Warrantors in writing prior to Closing and such Investor shall make all such investigations and/or do all such acts concerning the event or matter (including bearing the costs) which the Warrantors may reasonably require. |
9. | INVESTOR RIGHTS |
9.1 | Any further fund raising will similarly be by way of issuing new shares (be it by way of ordinary shares (regardless of share class), preferential shares, share options and/or similar instruments), with the shareholding interests of the then existing Shareholders diluted on a pro rata basis accordingly. |
9.2 | The Board reserved matters mentioned in Schedule 4 shall require the prior written consent or affirmative vote at the relevant Board meeting of a majority of the Board, including the prior written consent or affirmative vote of the directors appointed by the Lead Investor. |
9.3 | The Shareholders’ reserved matters mentioned in Schedule 5 shall require the prior written consent or affirmative vote at the relevant Shareholders’ meeting of the Shareholders collectively holding no less than 50% of the share capital of the Company as such point in time, including the prior written consent or affirmative vote of the Lead Investor. |
10. | CLOSING AND PAYMENT OF CONSIDERATION |
10.1 | Subject to Clause 10.2 and 10.3, Closing shall take place on the Closing Date at the office of the Company (or at such other place as the Parties may agree, including but not limited to Closing by way of electronic means) where all of the events described below shall occur. |
10.2 | On Closing, against compliance by the Company with Clause 10.3, the Investors shall transfer the relevant Consideration for the relevant Subscription Shares to the Company’s Bank Account. |
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10.3 | On Closing, the Company shall do the following on the Closing Date: |
(a) | enter the Investors as members of the Company on the Company’s share register; | |
(b) | do all things necessary in respect of the allotment and issuance of the Subscription Shares in accordance with all Applicable Laws; and | |
(c) | issue the respective share certificate(s) in the name of the Investors in respect of the relevant Subscription Shares duly and validly allotted and issued by the Company. |
11. | POST-CLOSING UNDERTAKINGS |
11.1 | As condition subsequent to the Investors investing in the Company and subject to the Closing taking place, the Company undertakes to: |
(a) | provide the Investors with a certified true copy of the Company’s share register which reflects the Investors as members of the Company following Closing within 5 Business Days after the Closing; | |
(b) | deliver the share certificates to the Investors in respect of their respective Subscription Shares within 5 Business Days after the Closing; | |
(c) | effect and put in place a share option plan for up to 10% of the enlarged share capital of the Company for the benefit of the key management and advisors of the Group which shall be administered by a committee appointed by the Board; and | |
(d) | enter into an appropriate lock-up agreement or undertaking in connection with the IPO on Nasdaq (or such other stock exchange as may be approved by the Investors) and as may be required by the relevant exchange regulator, save that such lock-up period shall be for at least a six month period post completion of IPO, and (ii) procure all other shareholders with at least 5% of the issued shares at IPO to enter into the same lock- up arrangement. |
12. | TERMINATION |
12.1 | Without prejudice to any other remedies available, if any Party either fails to comply with the conditions precedent in Clause 4.1, breaches any of the Warranties, fails to comply with the Closing Provisions, or breaches any other Clause in this Agreement, the Party/Parties (acting jointly, if the case may be) not in default may: |
(a) | defer Closing to an agreed date, and Clause 10 shall apply to the Closing as so deferred; or |
(b) | waive the relevant non-compliance with the Closing Provisions and proceed to Closing (without prejudice to its rights under the Applicable Laws); and |
(c) | if the option in Clause 12.1(a) is chosen, and Closing does not take place by the agreed deferred date, terminate this Agreement. |
12.2 | The Parties may, without any Party defaulting, terminate this Agreement by mutual agreement in writing before Closing. |
12.3 | Termination of this Agreement shall be without prejudice to any liability or obligations in respect of any matters, undertakings or conditions which shall not have been observed or performed by the relevant Party prior to such termination. |
12.4 | Any right of termination conferred upon the Parties shall be in addition to and without prejudice to all other rights and remedies available to them and no exercise or failure to exercise such a right of termination shall constitute a waiver of any such other right or remedy. |
12.5 | In respect of each Investor, this Agreement shall otherwise terminate with respect to such Investor upon the date when such Investor ceases to hold any Shares in the Company or when superseded by another agreement between the Parties on the same subject-matter. |
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13. | CONFIDENTIALITY AND ANNOUNCEMENT |
13.1 | Each of the Parties undertakes to keep confidential and at all times shall not disclose publicly or to any third party the Confidential Information, the substance of negotiations between the Parties relating to this Agreement, and shall not directly or indirectly make use of, copy in any form or reproduce on any medium, or disclose publicly or to any third party any Confidential Information, except and to the extent that the disclosure: |
(a) | is required by any Applicable Laws, provided that such Party shall (unless prohibited by any Applicable Law) promptly give to the other Parties such notice of such disclosure and shall co-operate with the other Parties, having due regard to the other Parties’ views, and take such steps as the other Parties may reasonably require in order to enable it to mitigate the effects of such disclosure; | |
(b) | is required for the purpose of any judicial proceeding arising out of this Agreement; | |
(c) | is made by the Group Companies, their shareholders and their representatives to the Group Companies’ employees and other approved third party advisors or consultants (“Representatives”) on a need-to-know basis for the purpose of executing and performing this Agreement and on terms that all Representatives receiving Confidential Information agree to comply with the provisions of this Clause 13.1 as if they were a party to this Agreement; | |
(d) | is of information that is or becomes publicly available (other than by breach of this Agreement); | |
(e) | is made after the Party whose information is to be disclosed has given prior written approval for the disclosure; or | |
(f) | is of information that is independently developed by the recipient or is lawfully in his possession prior to the disclosure to him of the information. |
13.2 | The Parties’ confidentiality obligations under Clause 13.1 shall survive for a period of two (2) years from the date all of the Investors cease to own any Shares in the Company. |
13.3 | No public announcement or publication in respect of this Agreement or any transactions contemplated under this Agreement shall be made without prior written consent from the other Parties, save that for any announcements or publications required by any Applicable Laws may be made with notice (whether before or after the announcement or publication is made) to the other Parties, with a reasonable opportunity to comment on such announcement or publication. For the avoidance of doubt, any announcement or publication includes the timing and contents of such announcements and/or publications. |
13.4 | Clause 13.1 shall not prohibit disclosure of any information by the Parties for the purpose of effecting a sale of shares, if such disclosure is made to a third party who had entered into bona fide discussions with the relevant Party to purchase its shares, or to the Representatives of such third party, and provided that the third party and its Representatives agree to keep such information confidential on terms which are reasonable for the protection of the interests of the Parties by the execution of confidentiality agreements. |
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13.5 | Clause 13.1 shall not prohibit disclosure of any information by the Parties for the purpose of inviting potential investors to participate in this financing round on the same or similar terms as found in this Agreement, or in any preceding term sheet, if such disclosure is made to a third party who had entered into bona fide discussions with the relevant Party to subscribe for ordinary shares, or to the Representatives of such third party, and provided that the third party and its Representatives agree to keep such information confidential on terms which are reasonable for the protection of the interests of the Parties by the execution of confidentiality agreements. |
13.6 | All Confidential Information shall remain the property of the Party disclosing such information. No rights, including but not limited to, intellectual property rights, in respect of the Confidential Information are granted to the other Party. Upon termination of this Agreement, the Party receiving Confidential Information shall return or destroy such Confidential Information, together with copies thereof. Where Confidential Information is in physical form, destruction shall mean the shredding of documents; where Confidential Information is in digital form, destruction shall mean the permanent deletion of digital copies. |
13.7 | The Parties agree that damages alone would not be an adequate remedy for any breach of this Agreement by the Receiving Party, as it would cause irreparable injury to the Company. In addition to all other rights and remedies available to the Company at law or in equity, the Company shall be entitled to an injunction to restrain any act in breach of this Agreement and to specific performance of any act required to perform this Agreement. |
14. | MISCELLANEOUS |
14.1 | Costs and Expenses |
Each Party shall bear its own costs and expenses incurred in connection with negotiating, preparing and completing this Agreement and the transactions contemplated in this Agreement, save that the Company shall (if Closing occurs) reimburse reasonable expenses incurred by the Investors in connection with the drafting, preparation, negotiation and entry into of the transaction contemplated under this Agreement up to S$10,000 in aggregate.
14.2 | Notices |
14.2.1 | All notices and communications given under this Agreement shall be in writing in the English language and shall be delivered personally, sent by registered post, courier or email (as applicable) to the addresses associated with each of the Parties as follows: |
Party: | Address / Email: |
Investor | Please refer to Schedule 1 |
Company | 2 Venture Drive, #07-06/07 Vision Exchange, Singapore 608526 |
14.2.2 | The Parties shall be entitled to mutually agree in writing to serve notices and communications by way of email, and email attachments, and in such a case, shall exchange valid email addresses in writing for this purpose. |
14.2.3 | Each Party shall notify the other Parties in writing when there is any change to its details. |
14.2.4 | A notice shall be effective upon receipt and shall be deemed to have been received (i) at the time of delivery, if delivered by hand, registered post or courier or (ii) at the time of transmission if delivered by email, provided that any notice received after 5 pm (Singapore time) on a Business Day or on any day that is not a Business Day will be deemed to have been received on the next Business Day. |
14.3 | Assignment |
This Agreement shall be binding upon and enure for the benefit of the successors of the Parties. None of the Parties shall be entitled to assign this Agreement or any of its rights and obligations hereunder, save that each Investor shall be entitled to assign its rights and obligations to another party with prior written approval from the Company.
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14.4 | Variation |
No variation of this Agreement shall be valid unless it is in writing and signed by all the Parties.
14.5 | Further Assurance |
Each Party undertakes to and for the benefit of each of the other Parties to this Agreement that it shall execute and do and take such steps as may be in its power to procure that all other necessary persons or companies, if any, execute and do all such further deeds, assurances, acts and things as may be required so that full effect may be given to the provisions of this Agreement.
14.6 | Severability |
14.6.1 | If any provision of this Agreement is deemed invalid, illegal, or unenforceable, it shall be modified to the minimum extent necessary to make it valid, legal, and enforceable. |
14.6.2 | If any provision of this Agreement is deemed invalid, illegal, or unenforceable, and cannot be modified, such provision shall be deleted from this Agreement, but without invalidating any of the other provisions which are severable and shall remain in full force and effect. |
14.7 | Waiver |
No failure or delay by a Party to exercise any right or remedy provided under this Agreement or by law shall constitute a waiver of that or any other right or remedy, nor shall it prevent or restrict the further exercise of that or any other right or remedy. No single or partial exercise of such a right or remedy shall prevent or restrict the further exercise of that or any other right or remedy.
14.8 | Counterparts and Signatures |
The Parties may execute this Agreement in any number of counterparts, each of which when executed shall constitute an original, but all counterparts shall together constitute the single Agreement. The Parties further agree that this Agreement may be executed electronically, and each Party’s electronic signature shall be valid and binding.
14.9 | Entire Agreement |
This Agreement constitutes the entire agreement between the Parties and supersedes all previous agreements, promises, assurances, warranties, representations, and understandings between them, whether written or oral, relating to its subject matter.
14.10 | Language |
This Agreement shall be executed and construed in the English language.
14.11 | Governing Law and Jurisdiction |
This Agreement and any non-contractual obligations arising out of, or in connection with it, shall be governed by, and interpreted in accordance with Singapore law, and the Parties irrevocably submit to the exclusive jurisdiction of Singapore courts.
14.12 | No Third-Party Enforcement |
The Contracts (Rights of Third Parties) Act 1999 of Singapore shall not under any circumstances apply to this Agreement and any person who is not a party to this Agreement (whether or not such person shall be named, referred to, or otherwise identified, or shall form part of a class of persons so named, referred to, or identified, in this Agreement) shall have no right whatsoever under the Contracts (Rights of Third Parties) Act 1999 of Singapore to enforce this Agreement or any of its terms.
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IN WITNESS WHEREOF, this Agreement has been entered on the day and year first above written:
The Investor
Signed by | |
in the presence of: | |
The Company
Signed by | |
DR SIAW TUNG YENG | |
for and on behalf of | |
MOBILE-HEALTH NETWORK SOLUTIONS | |
in the presence of: |
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SCHEDULE 1
Particulars of the Investors
Investor | Address / Contact details | No. of Subscription Shares |
Consideration | |||
(NRIC No. ) |
15 |
SCHEDULE 2
Particulars of the Group Companies
[Intentionally omitted]
16 |
SCHEDULE 3
Warranties
[Intentionally omitted]
17 |
SCHEDULE 4
Board Reserved Matters
1. | The appointment of or any subsequent change in the Key Persons. |
2. | The creation of any Encumbrance over any Group Company’s property, which when aggregated with such transactions by the Group Company in the same financial year, exceeds S$200,000 or which exceeds S$100,000 in a single transaction. |
3. | Any change in the nature and/or scope of the Business of any Group Company. |
4. | The approval of, or any amendment to, the business plan of the Group Companies. |
5. | The approval of the annual budget of the Group (including any amendments, modifications, addendum or additions thereto). |
6. | The establishment, terms (and amendment to such terms) or termination of any employee share option scheme or phantom employee share option scheme of any Group Company. |
7. | The exercise of any Group Company’s powers to provide guarantees or indemnities. |
8. | The exercise of the borrowing powers of any Group Company, other than borrowings approved in the annual budget, which when aggregated with borrowings by the Group Company in the same financial year, exceeds S$200,000 or which exceeds S$100,000 in a single transaction. |
9. | The incurring by any Group Company of any capital expenditure (including the acquisition of any undertaking or asset whether under lease or hire purchase or otherwise) other than capital expenditure approved in the annual budget, which exceeds S$100,000 in any 12-month period. |
10. | The approval of the audited financial statements (including any amendments, modifications, addendum or additions thereto) of any Group Company. |
11. | The commencement, defence or settlement by any Group Company of any litigation, arbitration or administrative proceedings which exceeds S$100,000 other than as plaintiff in the collection of debts arising in the ordinary course of business. |
12. | Any Group Company entering into any contract or arrangement (whether legally binding or not) outside of the ordinary course of business. |
13. | Any payments which exceeds $100,000 in a single transaction. |
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SCHEDULE 5
Shareholder Reserved Matters
1. | Any initial public offering of any Group Company or any public offer of shares in the Company and/or any Group Company. |
2. | Any amalgamation or reconstruction of the Company and/or any Group Company, or any merger of the Company and/or any Group Company with any corporation, firm or other body. |
3. | Any disposal or the acquisition of, or investment in, any undertaking, assets (including, without limitation, copyright, trademarks, service marks, patents or other intellectual property rights and any interest in any land or real property) or shares or other equity interests by the Company and/or any Group Company. |
4. | Any change in the maximum and minimum number of directors of the Company and/or any Group Company. |
5. | Any transaction by the Company and/or any Group Company with any of its related corporations, any shareholder or director of any Group Company, or any company or business in which the shareholders or directors of any Group Company or any one of them has a financial interest (except for any transaction with a wholly-owned company). |
6. | Any amendment to the Articles (other than the Amended Articles) and/or the constitution (or equivalent constitutional documents) of any Group Company. |
7. | The declaration or payment of any dividends or other distribution of profits of the Company (whether in cash or in specie). |
8. | Any repurchase, cancellation or redemption of the Company and/or any Group Company’s share capital or any reduction, consolidation, subdivision or reclassification or other alteration of the Company and/or any Group Company’s capital structure. |
9. | The variation of any rights attaching to any shares in the capital of the Company and/or any Group Company or making of any call upon monies unpaid in respect of any issued shares. |
10. | The dissolution, liquidation, or winding-up of the Company and/or any Group Company. |
11. | Any increase in the share capital of the Company and/or any Group Company, or the issue or grant of any option over the unissued share capital of the Company and/or any Group Company, or the issue of any new class of shares in the capital of the Company and/or any Group Company, or the issuing of any convertible securities by the Company and/or any Group Company. |
12. | The appointment or removal of, or change in, the auditors of the Company and/or any Group Company. |
13. | The Company and/or any Group Company entering into, or terminating any material partnership, joint venture, profit-sharing agreement or collaboration. |
14. | Any change to the anti-bribery and corruption policies of the Company and/or any Group Company. |
15. | The change of name of the Company and/or any Group Company. |
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Exhibit 4.4
Mobile-health Network Solutions
(the “Company”)
STRICTLY PRIVATE AND CONFIDENTIAL
TRANSFER OF SHARES
I, [ ] (NRIC: [ ]), residing at [ ]
Herein after called the said Transferor
In consideration of the Sum of S$[ ] (in Cash and Kind as spelled out at Clause 1.4 below)
paid by [ ] (NRJC: [ ]), residing at [ ]
herein after called the said Transferee
Do hereby bargain, sell, assign, and transfer to the said Transferee [ ] Ordinary Class A Shares (1% of the total paid up capital of the Company) in the undertaking called the
MOBILE-health Network Solutions (CT-313720)
With its registered address at the offices of Codan Trust Company (Cayman) Limited, Cricket Square, Hutchins Drive, PO Box 2681, Grand Cayman, KYl-1111, Cayman Islands.
To hold unto the said Transferee, its Executors, Administrators, and Assigns subject to several conditions stated on the shareholders’ agreement below on which I held the same immediately before the execution hereof; and the said Transferee, do hereby agree to accept the said Ordinary CLASS A Shares subject to the conditions aforesaid.
Mobile-health Network Solutions
(the “Company”)
STRICTLY PRIVATE AND CONFIDENTIAL
IN WITNESS WHEREOF,
Signed by the above-named Transferor | ) | |
) | ||
In the presence of: | ) | |
Signature: | ) | |
Name | ) | |
Address | ) | |
Occupation | ) | |
) | ||
Signed by the above-named Transferee ) | ||
) | ||
in the presence of: | ) | |
Signature and name | ) | |
Address | ) | |
Occupation | ) |
NOTE: A HUSBAND MUST NOT WITNESS THE SIGNATURE OF HIS WIFE OR VICE-VERSA
Mobile-health Network Solutions
(the “Company”)
STRICTLY PRIVATE AND CONFIDENTIAL
SHAREHOLDERS’ AGREEMENT (Ordinary Shares only)
The Shareholders’ agreement for an investment in Mobile-health Network Solutions (the
“Company”) is as followed:
1. | Investment |
1.1. | Investment: The proposed business plan (the “Business Plan”) calls for an equity injection of $[ ] (the “Investment”). Of this amount, will provide $[ ] in Cash/Kinds (the “Investor”) |
1.1. | Valuation: The company will be at a pre-money valuation of $[ ]. The investor will hold no less than 1.0% of the issued share capital of the Company on completion of the investment. |
1.2. | Type of Shares: The Investment will be made in the form of A shares in the capital of the Company (“Ordinary A Shares”), the terms of which are set out in appendix 1. |
1.3. | Considerations: The investment will be made in 2 tranches at $[ ] per annum over two years and is to be paid at [ ] of each calendar year. [ ] will take up company directorship position as specified in Appendix 2. |
1.4. | Use of proceeds: The proceeds from the Investment must be used for the Company’s working capital requirements and in the development of the App in furtherance of the Business Plan. |
2. | Terms of Investment |
2.1. | Warranties: The Company will provide the Investors with customary warranties. The Company will be liable up to the amount of the Investment in respect of the warranties. |
2.2. | Board: Board meetings will be held at intervals of not more than 12 weeks. |
2.3. | Information rights: The Company will have an obligation to supply normal financial and operational information about the Company to the Investors. |
2.4. | Obligations of the Founders: The Founders (being [ ]) will: (a) give customary non-competition, non-solicitation and confidentiality undertakings and (b) warrant an assignment of intellectual property rights |
2.5. | Shares held by the Founders: Shares in the Company held by the Founders will be subjected to the restrictions, vesting rights and bad leaver provisions as summarised in appendix 3. |
2.6. | Costs: The Company will pay the Investors’ fees and expenses in respect of the Investment at completion up to $1500.00 |
2.7. | Shares Dilution: For any dilution to raise more funds, [ ] will further dilute their shareholdings until their shareholding reach 25% and 20% respectively and [ ] will dilute his share until his shareholding reaches 15% and all threes will inject the fund into the company as shareholders’ loan which will eventually be forgiven. |
2.8. | Further Shares Dilution: Upon reaching the threshold as stated in 2.7 above, any further fund raising will be by way of issuing new shares (may it be ordinary shares, preferential shares or share options) with the exemption of clause 2.9 below. All the shareholders’ percentage holdings may it be Class A or Class B shares will be proportionately diluted except for the shareholding held by [ ] which will be protected from dilution. |
2.9. | Shareholders sales: At the end of 2 years or earlier subject to majority (75%) votes, the pre series shareholders will be allowed to sell in pro rata percentage shareholdings it hold up to a maximum of 5% of its shareholdings to the series VC funds at each series. The remaining shares will be proportionately diluted. |
2.10. | Salaries: All the founders will not be paid any salaries until the company is profitable at which time the founders will be paid a salary commensurate to market rate. |
2.11. | Shares pledged: It is understood that up to 5% of Class A ordinary share has been pledged to the original team of developers. These shares cannot be cashed out until there is an exit event in the way of IPO. The developers can only cash out at up to the maximum of 5% of its shareholdings per financial year. |
3. | Confidentiality |
3.1. | This Shareholders’ agreement is written on the basis that its content and existence are confidential and will not be revealed by the Investors, the Company or the Founders to any third party or be the subject of any announcement. |
3.2. | The Investor and the Company have entered into a non-disclosure agreement. |
4. | Applicable law |
This agreement (and any dispute or claim to it or its subject matter (including non-contractual claims) is governed by Singapore law and on acceptance of these terms the parties submit to the non-exclusive jurisdiction of the courts of the Republic of Singapore.
[On copy]
To: Transferee
I hereby acknowledge and accept the terms of the above Shareholders’ agreement
Signed by: | ||
Dr. Siaw Tung Yeng | Date: |
for and on behalf of Mobile-health Network Solutions
Signed by: | ||
Name of Transferee | Date: |
Mobile-health Network Solutions
(the “Company”)
STRICTLY PRIVATE AND CONFIDENTIAL
Appendix l
Rights attaching to Ordinary Shares
1. | Voting: The Ordinary Class A Shares will have one vote per share on all matters |
2. | Dividends: Any dividends or distributions will be payable to all shareholders on a pro rata basis. |
3. | Pre-emption rights on new issues: Investors will have the right to participate with the other shareholders in any new issues of securities prorate to their holding of shares including the right to acquire excess securities not accepted by other shareholders of the Company. The Investors may assign this right to another member of their fund group. |
4. | Pre-emption rights on transfer: Subject to customary permitted transfers, including transfers by Investors to affiliated funds, all shareholders will have a right of first refusal to acquire any shares of the Company which are proposed to be transferred or sold including the right to acquire any excess shares not accepted by any other shareholder. |
5. | Co-sale: Investors will have co-sale rights such that if any shareholder has an opportunity to sell any of his shares, Investors must be given the opportunity to sell a pro rata proportion of the number of shares being sold by such shareholder on the same terms and at the same price. |
6. | Drag-along: If the holders of not less than two-thirds of the Ordinary Share (including the Investor Majority) agree to sell their shares, there will be drag along rights so that all remaining shareholders and option holders will be required to sell their shares to the same purchaser at the same price. |
Mobile-health Network Solutions
(the “Company”)
STRICTLY PRIVATE AND CONFIDENTIAL
Appendix 2
Rights attaching to shares held by Founders
The roles and responsibilities of company directorship position covered by [ ] are (but not limited to) as followed:
1. | Company directorship for the Company and/or its subsidiaries and/or its associated companies over a 5 years’ period, with the following key advisory and fiduciary duties in: |
[ ]
2. | The Company may change the roles and responsibilities of company directorship position from time to time, pursuant to any applicable law or regulation. |
Mobile-health Network Solutions
(the “Company”)
STRICTLY PRIVATE AND CONFIDENTIAL
APPENDIX 3
Rights attaching to shares held by Founders
1. | Bad Leaver: means a Founder who ceases to be an employee or consultant of the Company within a period of 3 years of completion of the Investment by reason of: (a) voluntarily resigning or (b) dismissal by the Company by reason of breach of contract or if he is neither an employee nor a consultant is in material breach of the schedule of actions he has agreed to undertake. |
2. | Compulsory conversion: If a Founder is a Bad Leaver, all of his unvested shares will convert into worthless deferred shares |
3. | Application: The Board and the Investor Majority can determine whether any provisions of paragraphs 1 to 2 shall not apply to a Founder. |
Exhibit 5.1
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Harney Westwood & Riegels Singapore LLP |
138 Market Street | |
#24-04 CapitaGreen | |
Singapore 048946 | |
Tel: +65 6800 9830 | |
Fax: +65 6800 9831 |
22 February 2024
lishi.fong@harneys.com
+65 6800 9833 059929.0001/LZF
Mobile-health Network Solutions
Harneys Fiduciary (Cayman) Limited
4th Floor, Harbour Place, 103 South Church Street PO Box 10240
Grand Cayman KY1-1002 Cayman Islands
Dear Sir or Madam
Mobile-health Network Solutions (the Company)
We are lawyers qualified to practise in the Cayman Islands and have acted as Cayman Islands legal advisers to the Company in connection with the Company’s registration statement on Form F-1, including all amendments or supplements thereto (the Registration Statement), to be filed on or about the date of this opinion with the Securities and Exchange Commission (the Commission) under the United States Securities Act of 1933, as amended (the Securities Act), relating to (i) the offering (the Offering) of the Company’s Class A Ordinary Shares with a par value of US$0.000004 per share, including an option to issue certain Class A Ordinary Shares to be offered by the Company to cover the over-allotment option to be granted to the underwriters (collectively, the IPO Shares), to be issued pursuant to the Resolutions (as defined in Schedule 1) and (ii) the offering (the Resale) by certain existing shareholders (the Selling Shareholders) of the Company’s issued Class A Ordinary Shares with a par value of US$0.000004 per share (the Resale Shares) to be transferred pursuant to the Resolutions. The Company will also be issuing warrants to the underwriters (the Representative’s Warrants) to purchase such number of ordinary shares in the Company equal to seven and a half percent (7.5%) percent of the total number of ordinary shares sold in the Offering (including the ordinary shares sold pursuant to the over-allotment option) (the Underlying Shares, together with the IPO Shares, the Resale Shares and the Representative’s Warrants, the Shares).
We are furnishing this opinion as Exhibit 5.1 to the Registration Statement.
For the purposes of giving this opinion, we have examined the Documents (as defined in Schedule 1). We have not examined any other documents, official or corporate records or external or internal registers and have not undertaken or been instructed to undertake any further enquiry or due diligence in relation to the transaction which is the subject of this opinion.
In giving this opinion we have relied upon the assumptions set out in Schedule 2 which we have not independently verified.
Jersey legal services are provided through a referral arrangement with Harneys (Jersey) which is an independently owned and controlled Jersey law firm. | Anguilla | Bermuda | British Virgin Islands | Cayman Islands Cyprus | Hong Kong | Jersey | London | Luxembourg Montevideo | São Paulo | Shanghai | Singapore | |
Registered in Singapore with limited liability (T13LL2450G). | harneys.com |
Based solely upon the foregoing examinations and assumptions and upon such searches as we have conducted and having regard to legal considerations which we deem relevant, and subject to the qualifications set out in Schedule 3, we are of the opinion that under the laws of the Cayman Islands:
1 | Existence and Good Standing. The Company has been duly incorporated as an exempted company with limited liability and is validly existing and in good standing under the laws of the Cayman Islands. |
2 | Authorised Share Capital. Based on our review of the M&A (as defined in Schedule 1), the authorised share capital of the Company is US$50,000 divided into 12,500,000,000 Ordinary Shares of nominal or par value of US$0.001 each, comprising (a) 6,250,000,000 Class A Ordinary Shares of nominal or par value US$0.000004 each and (b) 6,250,000,000 Class B Ordinary Shares of nominal or par value of US$0.000004 each. |
3 | Valid Issuance of Underlying Shares and IPO Shares. |
(a) | The Underlying Shares and IPO Shares to be issued by the Company as contemplated by the Registration Statement have been duly authorised and, when allotted, issued and fully paid for in accordance with the Resolutions (as defined in Schedule 1), and when the name of the shareholder is entered in the register of members of the Company, the Underlying Shares and IPO Shares will be validly issued, allotted and fully paid and there will be no further obligation on the holder of any of the Underlying Shares and IPO Shares to make any further payment to the Company in respect of such Shares. | |
(b) | Subject to the satisfaction of any conditions or requirements set forth in the Underwriting Agreement (as defined in Schedule 1), when the Underlying Shares are issued upon the Exercise (as defined in Schedule 2) of the Representative’s Warrants in accordance with the M&A and the Representative’s Warrants and entered as fully paid on the register of members of the Company, the Underlying Shares will be validly allotted and issued, fully paid and without obligation of the holder to make further payment to the Company in respect of the issuance of such shares. |
4 | Valid Transfer of Resale Shares. |
The Resale Shares to be offered by the Selling Shareholders as contemplated by the Registration Statement have been issued and fully paid for, and the transfer of the Resale Shares has been duly authorised by the Resolutions (as defined in Schedule 1), and when the name of the shareholder is entered in the register of members of the Company, the Resale Shares will be validly transferred and there will be no further obligation on the holder of any of the Resale Shares to make any further payment to the Company in respect of such Shares. | |
5 | Cayman Islands Law. The statements under the caption “Taxation” in the prospectus forming part of the Registration Statement, to the extent that they constitute statements of Cayman Islands law, are accurate in all material respects as at the date of this opinion and such statements constitute our opinion. |
6 | MHNS Employee Incentive Plan. The Plan does not contravene the Companies Act (as revised) of the Cayman Islands (the Companies Act). |
This opinion is confined to the matters expressly opined on herein and given on the basis of the laws of the Cayman Islands as they are in force and applied by the Cayman Islands courts at the date of this opinion. We have made no investigation of, and express no opinion on, the laws of any other jurisdiction. Except as specifically stated herein, we express no opinion as to matters of fact.
In connection with the above opinion, we hereby consent to the filing of this opinion as an exhibit to the Registration Statement. In giving such consent, we do not thereby admit that we come within the category of persons whose consent is required under Section 7 of the Securities Act, as amended, or the Rules and Regulations of the Commission thereunder.
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This opinion is limited to the matters referred to herein and shall not be construed as extending to any other matter or document not referred to herein.
This opinion shall be construed in accordance with the laws of the Cayman Islands. Yours faithfully
Harney Westwood & Riegels Singapore LLP
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SCHEDULE 1
List of Documents and Records Examined
1 | the Certificate of Incorporation of the Company dated 28 July 2016; |
2 | the amended and restated memorandum and articles of association of the Company as adopted by a special resolution passed on 14 February 2024 (the M&A); |
3 | the register of members of the Company dated 21 February 2024 and register of directors and officers of the Company filed on 15 January 2024; |
4 | a certificate of good standing dated 23 January 2024 in respect of the Company, issued by the Registrar of Companies in the Cayman Islands (the Certificate of Good Standing); |
5 | the search results in relation to the Company obtained from the Cayman Islands Online Registry Information System (CORIS), the Cayman Islands’ General Registry’s online database, on 21 February 2024; |
6 | a copy of the confirmation letter from the Company dated 21 February 2024; and |
7 | a copy of the minutes of a meeting of the directors of the Company on 23 February 2023, a copy of the written resolutions of the directors of the Company dated 27 March 2023 and 21 February 2024, and a copy of the written resolutions of the employee incentive plan committee of the Company dated 21 September 2023 (the Resolutions), |
copies of 1 to 7 above have been provided to us by the Company and the Company’s registered office in the Cayman Islands (together the Corporate Documents),
8 | the Registration Statement; |
9 | a draft underwriting agreement (the Underwriting Agreement) to be entered into between the Company and Network 1 Financial Securities Inc., as representative of the underwriters named therein (the Representative); and |
10 | the MHNS Employee Incentive Plan approved and amended by the relevant Resolutions (the Plan, together with the Registration Statement and the Underwriting Agreement, the Transaction Documents), |
the Corporate Documents and the Transaction Documents are collectively referred to in this opinion as the Documents.
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SCHEDULE 2
Assumptions
1 | Validity under Foreign Laws. That (i) all formalities required under any applicable laws (other than the laws of the Cayman Islands) have been complied with; and (ii) no other matters arising under any foreign law will affect the views expressed in this opinion. |
2 | Draft Documents. That the Company will duly execute and deliver the relevant Transaction Document in the form of the drafts provided to us for review. |
3 | Memorandum and Articles. The M&A remain in full force and effect and are otherwise unamended. The M&A will be the memorandum and articles of association of the Company in effect at the time of the issue of the Underlying Shares and IPO Shares and also at the time of the transfer of the Resale Shares. |
4 | Choice of Laws. The choice of the laws of the State of New York selected to govern the respective Transaction Documents has been made in good faith and will be regarded as a valid and binding selection which will be upheld in the courts of that jurisdiction and all other relevant jurisdictions (other than the Cayman Islands) and the entry into and performance of the relevant Transaction Documents will not cause any of the parties thereto to be in breach of any agreement or undertaking. |
5 | Directors. The board of directors of the Company considers the transactions contemplated by the Transaction Documents to be in the best interests of the Company and no director has (i) a financial interest in a party to or in the transactions contemplated by the Transaction Documents or (ii) other relationship to a party to the transactions contemplated by the Transaction Documents which has not been properly disclosed in the Resolutions. |
6 | Conditions. All conditions to the obligations of the parties to the Underwriting Agreement will be satisfied or duly waived prior to the issue and sale of the relevant Shares and there will be no breach of the terms of the Underwriting Agreement. |
7 | Authenticity of Documents. All original Documents are authentic, all signatures, initials and seals are genuine, all copies of Documents are true and correct copies and the Transaction Documents conform in every material respect to the latest drafts of the same produced to us and, where the Transaction Documents have been provided to us in successive drafts marked-up to indicate changes to such documents, all such changes have been so indicated. |
8 | Corporate Documents. All matters required by law to be recorded in the Corporate Documents are so recorded, and all corporate minutes, resolutions, certificates, documents and records which we have reviewed are accurate and complete, and all facts expressed in or implied thereby are accurate and complete. |
9 | No Steps to Wind-up. The directors and shareholders of the Company have not taken any steps to have the Company struck off or placed in liquidation, no steps have been taken to wind up the Company and no receiver has been appointed over any of the property or assets of the Company. |
10 | Resolutions. The relevant Resolutions passed at a meeting were adopted at duly convened meetings of the board of directors of the Company, and such meetings were held and conducted in accordance with the M&A of the Company. The Resolutions remain in full force and effect. |
11 | Unseen Documents. Save for the Documents provided to us there are no resolutions, agreements, documents or arrangements which materially affect, amend or vary the transactions envisaged in the Documents. There is no contractual prohibition (other than as arising under Cayman Islands law) binding on the Company prohibiting it from issuing and allotting the Underlying Shares and IPO Shares, and approving the transfer of the Resale Shares. |
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12 | Proceeds of Crime. No monies paid to or for the account of any party under the Transaction Documents represent or will represent criminal property or terrorist property (as defined in the Proceeds of Crime Act (2020 Revision) and the Terrorism Act (2018 Revision), respectively). |
13 | Exercise. At the time of the exercise of the Representative’s Warrants in accordance with the M&A (the Exercise): |
(a) | the Companies Act will not have changed in such a way as to materially impact the Exercise; | |
(b) | the Company will have sufficient authorised but unallotted and unissued Underlying Shares, in each case to effect the Exercise in accordance with the M&A and the Companies Act; | |
(c) | the Company will be able to pay its debts as they fall due in the ordinary course of business immediately following the Exercise; | |
(d) | the Company will have shares in issue immediately prior to the Exercise other than the Underlying Shares to be issued; | |
(e) | all the considerations will have been fully paid and without obligation of the holder to make further payment to the Company in respect of the issuance of the Underlying Shares; | |
(f) | the Company will not have been struck off or placed in liquidation; | |
(g) | the issue price for the Underlying Shares to be issued on the Exercise will not be less than the par value of such Underlying Shares; and | |
(h) | the provisions of the M&A relating to the Exercise will not have been altered, amended and restated. |
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SCHEDULE 3
Qualifications
1 | Foreign Statutes. We express no opinion in relation to provisions making reference to foreign statutes in the Transaction Documents. |
2 | Stamp Duty. Cayman Islands stamp duty may be payable if the original Transaction Documents are executed in, brought to, or produced before a court of, the Cayman Islands. |
3 | Good Standing. The Company shall be deemed to be in good standing at any time if all fees (including annual filing fees) and penalties under the Companies Act have been paid and the Registrar of Companies in the Cayman Islands has no knowledge that the Company is in default under the Companies Act. |
4 | Conflict of Laws. An expression of an opinion on a matter of Cayman Islands law in relation to a particular issue in this opinion should not necessarily be construed to imply that the Cayman Islands courts would treat Cayman Islands law as the proper law to determine that issue under its conflict of laws rules. |
5 | Economic Substance. We have undertaken no enquiry and express no view as to the compliance of the Company with the International Tax Co-operation (Economic Substance) Act (2021 Revision). |
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Exhibit 10.1
RULES OF THE MHNS EMPLOYEE INCENTIVE PLAN
1. | NAME OF THE PLAN |
The “MHNS Employee Incentive Plan” (hereinafter referred to as the “Plan”) has been established by Mobile-health Network Solutions, an exempted company incorporated in the Cayman Islands with limited liability with registration number 313720 (the “Company”).
2. | OBJECTIVES OF THE PLAN |
2.1. | The MHNS Employee Incentive Plan is a share option plan. The Plan will give employees of the Company and/or any of its subsidiaries, including all directors of the Company and its subsidiaries, as well as advisors, consultants and directors engaged by the Company and/or any of its subsidiaries an opportunity to have a personal equity interest in the Company and will help to achieve the following objectives: |
(a) | provide a wealth creation opportunity for the employees, advisors, consultants and directors in line with value creation for the Company; |
(b) | drive retention of employees, advisors, consultants and directors for their continued association with the Company; and |
(c) | motivate employees, advisors, consultants and directors by rewarding high performance. |
2.2. | The Plan will align the interest of the Participants with that of the Company and provides for an incentive mechanism that rewards ownership and extraordinary contribution. |
3. | ADMINISTRATION OF THE PLAN |
3.1. | Implementation. The Plan has been approved by a written resolution passed on 27 March 2023 by the Board of Directors (the “Board”) of the Company. |
3.2. | Administration. The Plan will be administered by the Employee Incentive Plan Committee of the Company (the “Committee”) in its sole and absolute discretion with such powers and duties as are conferred on it by the Board from time to time. The Committee shall have the power, from time to time, to make and vary such regulations for the implementation and administration of this Plan as it in its absolute discretion deems fit. Any matter pertaining or pursuant to this Plan and any dispute as to the interpretation of this Plan or any rule, regulation, procedure thereunder or as to any rights under this Plan, shall be determined by the Committee and such decision shall be final and binding. |
3.3. | Directors’ Participation. Any director, employee or other person participating in this Plan who is a member of the Committee shall not be involved in the Committee’s deliberations in respect of any Options (as defined below) granted to him. |
3.4. | Determination of the Committee to be final. Any decision or determination of the Committee made pursuant to any provision of the Plan (other than a matter to be certified by the auditors of the Company) shall be final, binding and conclusive (including for the avoidance of doubt, any decisions pertaining to disputes as to the interpretation of the Plan or any rule, regulation or procedure hereunder or as to any rights under the Plan). The Committee shall not be required to furnish any reasons for any decision or determination made by it. |
3.5. | Duration of the Plan. The Plan may be terminated at any time by the Committee or, at the discretion of the Committee, by ordinary resolution of the Company, and if the Plan is so terminated, no further Options shall be offered hereunder. |
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4. | ELIGIBILITY |
4.1. | Eligibility. The Committee shall in its sole and absolute discretion determine if a person is eligible to participate in the Plan, taking into consideration, among other things, role, seniority, length of service, performance history and potential contribution to the Company and/or any of its subsidiaries, and such person shall at least be a confirmed employee of the Company and/or any of its subsidiaries, or an advisor, consultant or director of the Company and/or any of its subsidiaries, and who have attained the age of twenty-one (21) years (“Participant”). |
4.2. | Grant Frequency. The Committee may at any time grant Options to Participants, as the Committee may select based on the eligibility of the Participants under Rule 4.1 above, subject only to such restrictions as may be provided under any applicable law. |
4.3. | Number of Options. The number of Options to be granted to a Participant in accordance with the Plan shall be determined at the absolute discretion of the Committee, which shall take into account such criteria as it considers fit, including (but not limited to) his rank, job performance, years of service and potential for future development, his contribution to the success and development of the Company, the past performance of the Participant and any other key performance indicators. |
5. | SIZE OF PLAN |
The aggregate number of Class A Shares of a nominal or par value of US$0.000004 each in the capital of the Company (“Option Shares”) which may be issued upon exercise of the options granted under this Plan (“Options”) shall not exceed ten per cent. (10%) of the total issued Class A Shares of a nominal or par value of US$0.000004 each in the capital of the Company (“Class A Shares”) from time to time.
6. | GRANT OF OPTIONS AND OPTION SHARES |
6.1. | Grant of Options. An Option may be granted at any time as may be determined by the Committee in its sole and absolute discretion and may be granted subject to such conditions as may be determined by the Committee in its absolute discretion. |
6.2. | Subscription Price. The subscription price payable for each Option Share in respect of which an Option is exercisable (the “Subscription Price”) shall be determined by the Committee from time to time, provided that in no event shall the subscription price per Option Share be less than the par value of such Option Share. |
6.3. | Letter of Offer. As soon as reasonably practicable after the grant of an Option, the Committee shall send to each Participant a letter of offer (“Letter of Offer”) which shall be in or substantially in the form set out in Schedule A-1, subject to such modifications as the Committee may determine from time to time. |
6.4. | Acceptance of Option. The grant of an Option under this Rule 6 shall be accepted by the Participant within the date stipulated in the acceptance form, which shall be in or substantially in the form set out in Schedule A-2 (the “Acceptance Form”), subject to such modifications as the Committee may determine from time to time, by completing, signing and returning the Acceptance Form. If a grant of an Option is not accepted in the manner as provided in this Rule, such offer shall, upon the expiry of the date stipulated, automatically lapse and become null, void and of no effect. |
6.5. | Options are Personal. An Option shall be personal to the Participant to whom it is granted and, prior to the allotment and/or transfer to the Participant of the Option Shares to which the Option relates, shall not be transferred (other than to a Participant’s personal representative on the death of that Participant), charged, assigned, pledged or otherwise disposed of, in whole or in part, except with the prior approval of the Committee. If a Participant shall do, suffer or permit any such act or thing as a result of which he would or might be deprived of any rights under an Option without the prior approval of the Committee, that Option shall immediately lapse. |
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6.6. | Contravention of any Applicable Law. In the event that the grant of an Option results in a contravention of any applicable law, subsidiary legislation or other regulation, such grant shall be null, void and of no effect and the relevant Participant shall have no claim whatsoever against the Company. |
6.7. | For the avoidance of doubt, Participants who are granted and/or have exercised their Options shall not be parties to, nor shall they be entitled to any rights or benefits under any shareholders’ agreement or investment agreement entered into amongst the shareholders of the Company (as the case may be), except at the written request or with the written consent of the Committee (on behalf of the Company) and the shareholders of the Company (other than the Participants). |
7. | OPTION PERIOD AND VESTING SCHEDULE |
7.1. | Option Period. Options shall be exercisable only after vesting. Subject to the provisions of this Rule 7, the Options shall be exercisable in whole or in part, before the expiry of 10 years from the date of grant of the Option, or such other date as may be determined by the Committee (the “Option Period”). |
7.2. | Acceleration of Options upon Occurrence of Certain Events. In the event the following occurs: (i) an initial public offering and listing of shares of the Company or a direct listing of shares of the Company (a “Listing”); or (ii) a change of control in the shares of the Company, such as a trade sale, a takeover, any acquisition of a majority shareholding interest in the Company by a third party or a compromise or arrangement proposed for the purposes of, or in connection with, a scheme for the reconstruction of the Company or its amalgamation with another company or companies, (in the case of a Listing, subject to Rule 7.3) the Options granted to such Participants shall immediately vest and the Committee will, as soon as practicable and prior to the completion of such event, procure the allotment or transfer to each Participant of the relevant number of Option Shares. |
7.3. | In the event of a Listing, subject to applicable law, the Articles of Association of the Company and the rules of the relevant securities exchange: |
(a) | prior to the Listing, the Participant shall not transfer any Option Shares without the prior written consent of the Committee; |
(b) | prior to the Listing, subject to the Participant obtaining the Committee’s prior written consent under sub-paragraph (a), a Participant shall not transfer any Option Shares without first offering such Option Shares to the Company at a price and on terms no less favourable than those offered to a third party purchaser whose identity shall be disclosed to the Committee (the “Offer Terms”), and the Participant may only transfer the relevant Option Shares to such third party purchaser upon the approval of the Committee in its discretion: (i) on the Offer Terms within a period of one (1) month from the date the Committee notifies the Participant of the Company’s election not to accept the Participant’s Offer Terms; and (ii) subject to such approved third party transferee signing a transfer agreement, agreeing to be bound by the terms of the Plan and the applicable agreements governing the Option Shares. The Committee reserves the right to disapprove of the transfer of the Option Shares to any third-party purchaser and the Participant shall promptly furnish such evidence as the Committee may require of the bona fide completion of the transfer of the relevant Option Shares on the Offer Terms; |
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(c) | the Participant shall agree to be bound by any applicable lock-up restrictions and/or moratorium requirements under applicable law and the rules of the relevant securities exchange, or as otherwise requested by the Committee, for the relevant lock-up period, and further agrees to execute and deliver such other agreements as may be reasonably requested by the Committee or the underwriters that are consistent with the foregoing or that are necessary to give further effect thereto; and, to the extent permitted by applicable law and/or the rules of the relevant securities exchange in order to enforce the foregoing; and |
(d) | following the Listing, a Participant may transfer any Option Shares held by such Participant at any time, subject to compliance with the Company’s Articles of Association. |
7.4. | Post-Listing Vesting Schedule. In the event of a Listing, any Options (if unvested) granted to Participants under the Plan shall vest on the third anniversary of the date of grant. |
7.5. | Notwithstanding any other Rule of the Plan, all Options to the extent unvested and/or unexercised may be accelerated at the sole and absolute discretion of the Committee and upon such terms and conditions as it deems fit upon the occurrence of certain events. |
7.6. | Lapsing of Options. An Option shall, to the extent unexercised, immediately lapse and become null and void, without any claim whatsoever against the Company and the Participant shall have no further rights in respect thereof: |
(a) | if a Participant ceases to be employed by the Company and/or any of its subsidiaries, or ceases to be engaged by the Company and/or any of its subsidiaries as an advisor, consultant or director (as the case may be); |
(b) | upon the bankruptcy of the Participant or the happening of any event which results in his being deprived of the legal and beneficial ownership of such Option; or |
(c) | in the event of misconduct or negligence on the part of the Participant, as determined by the Committee in its discretion. |
7.7. | Expiry of Options. Subject to this Rule 7, upon the expiry of the relevant Option Period, the corresponding Options shall immediately become null and void. Upon such cancellation, all such Options such thereupon immediately lapse without any further claim against the Company and the Participants shall have no further rights in respect thereof. |
7.8. | Liquidity Event. In addition and notwithstanding any other Rule of this Plan, in the event a notice is given by the Company to its members to convene a general meeting for the purposes of considering and, if thought fit, approving a resolution to voluntarily wind-up the Company, the Company shall on the same date as or soon after it despatches such notice to each member of the Company give notice thereof to all Participants (together with a notice of the existence of the provision of this Rule 7.8) and thereupon, each Participant (or his personal representative) shall be entitled to exercise all or any of his Options at any time not later than two business days prior to the proposed general meeting of the Company by giving notice in writing to the Company, accompanied by a remittance for the full amount of the aggregate Subscription Price for the Option Shares in respect of which the notice is given whereupon the Company shall as soon as possible and in any event, no later than the business day immediately prior to the date of the proposed general meeting referred to above, allot the relevant Option Shares to the Participant credited as fully paid. Subject to the foregoing, upon an order being made or resolution passed for the winding up of the Company, all Options, to the extent unvested and unexercised, shall lapse and become null and void. |
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8. | EXERCISE OF OPTIONS AND ALLOTMENT AND ISSUE OF OPTION SHARES |
8.1. | Exercise of Options. An Option may be exercised, in whole or in part, by a Participant giving notice in writing to the Company in or substantially in the form set out in Schedule B (“Exercise Notice”), subject to such modification as the Committee may from time to time determine, accompanied by: |
(a) | a remittance for the full amount of the aggregate Subscription Price payable in respect of all the Option Shares to be subscribed for upon exercise of the Option to the bank account of the Company, details of which shall be notified to the Participant; and | |
(b) | any other documentation which the Committee may require in connection with an exercise of the Option, including evidence to verify the due execution of the Exercise Notice. |
8.2. | Delivery of Shares upon exercise of Options. Subject to the Companies Act of the Cayman Islands (as revised) (the “Companies Act”), the Company shall have the flexibility to deliver the Option Shares to the Participants upon the exercise of their Options by way of: |
(a) | subject to applicable laws, the transfer of existing Option Shares, including any Option Shares acquired by the Company pursuant to a share buy back and/or held by the Company as treasury shares; and/or |
(b) | an issue and allotment of new Option Shares. |
8.3. | Shares Allotted. New Option Shares allotted and issued, and existing Option Shares procured by the Company for transfer, pursuant to the exercise of an Option shall: |
(a) | be subject to all the provisions of the Articles of Association of the Company; and |
(b) | rank in full for all entitlements, including dividends or other distributions declared or recommended in respect of the then existing Class A Shares in the capital of the Company, save for any dividends, rights, allotments or other distributions, the Record Date for which is on or after the relevant vesting date. For the purposes of this Rule, “Record Date” means the date fixed by the Company for the purposes of determining entitlements to dividends or other distributions to or rights of holders of the Option Shares. |
8.4. | New Issue of Option Shares. An Option does not confer on a Participant any right to participate in any new issue of Option Shares. |
9. | REPURCHASE OF OPTION SHARES FROM PARTICIPANT IN THE EVENT OF CESSATION OF EMPLOYMENT OR ENGAGEMENT (AS THE CASE MAY BE) |
In addition and notwithstanding any other Rule of this Plan, in the event that a Participant ceases to be employed or engaged (as the case may be) by the Company and/or any of its subsidiaries for any reason whatsoever, the Company shall, subject to applicable law, have the right (but not the obligation) to require the Participant to sell and/or procure his nominee(s) (if any) to sell to the Company, or such other party or parties as the Company may direct, all the Option Shares owned or help by the Participant and/or his nominee(s) (if any) which has been issued to him pursuant to the exercise of the Option Shares granted to him at the same subscription price which price paid by the Participant for such Option Shares, and the Participant shall use its best efforts to promptly take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable under applicable laws to effect the transfer of the Option Shares contemplated under this Rule 9.
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10. | TERMS OF EMPLOYMENT AND/OR ENGAGEMENT UNAFFECTED |
The terms of employment and/or engagement (as the case may be) of a Participant shall not be affected by his participation in the Plan, which shall neither form part of such terms nor entitle him to take into account such participation in calculating any compensation or damages on the termination of his employment and/or engagement (as the case may be) for any reason.
11. | TAXES |
All taxes (including income tax) arising from the grant or exercise of any Option granted to any Participant under the Plan shall be borne by that Participant.
12. | DISCLAIMER OF LIABILITY |
Notwithstanding any provisions herein contained and subject to the Companies Act, the Committee and the Company shall not under any circumstances be held liable to any Participant or any other person whomsoever for any costs, losses, expenses and damages whatsoever and howsoever arising in any event, in connection with the Plan or the administration thereof.
13. | DISPUTES |
Any disputes or differences of any nature arising hereunder shall be referred to the Committee and its decision shall be final and binding in all respects.
14. | GOVERNING LAW |
The Plan shall be governed by, and construed in accordance with, the laws of the Republic of Singapore. The Participants, by accepting Options in accordance with the Plan, and the Company submit to the exclusive jurisdiction of the courts of the Republic of Singapore.
15. | CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 2001 |
No person other than the Company or a Participant shall have any right to enforce any provision of the Plan or any Option by virtue of the Contracts (Rights of Third Parties) Act 2001 of Singapore.
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Exhibit 10.2
INDEMNIFICATION
AGREEMENT
This INDEMNIFICATION AGREEMENT (this “Agreement”) is made and entered into this day of , 2023 (the “Effective Date”) by and between Mobile-health Network Solutions, a Cayman Islands exempted company the “Company”), and (Id: ) (the “Indemnitee”) (each a “Party” and collectively the “Parties”).
WHEREAS, the Company believes it is essential to retain and attract qualified directors and officers;
WHEREAS, the Indemnitee is a director and/or officer of the Company;
WHEREAS, both the Company and the Indemnitee recognize the increased risk of litigation and other claims that may be asserted against directors and officers of public companies, as well as the possibility that in certain situations a threat of litigation may be employed to deter them from exercising their judgment in the best interests of the Company, and the consequent need to allocate the risk of personal liability through indemnification and insurance;
WHEREAS, the Company’s Articles of Association, as amended from time to time (the “Articles of Association”), provide that the Directors, Secretary and other officers acting in relation to any of the affairs of the Company shall be indemnified and secured harmless from and against all actions, proceedings, costs, charges, losses, damages, expenses and liabilities which they shall or may incur or sustain by or by reason of any act done, concurred in or omitted in or about the execution of their duty, or supposed duty, in their respective offices.
WHEREAS, in recognition of the Indemnitee’s need for (i) substantial protection against personal liability and (ii) an inducement to continue to provide effective services to the Company as a director and/or officer thereof, the Company wishes to provide for the indemnification of the Indemnitee and to advance expenses to the Indemnitee to the fullest extent permitted by law and as set forth in this Agreement, and, to the extent insurance is maintained by the Company, to provide for the continued coverage of the Indemnitee under the Company’s directors’ and officers’ liability insurance policies.
NOW, THEREFORE, in consideration of the premises contained herein and of the Indemnitee continuing to serve the Company directly or, at its request, with another enterprise, and intending to be legally bound hereby, the Parties hereto agree as follows:
l. Certain Definitions.
(a) A “Change in Control” shall be deemed to have occurred if:
(i) any “person,” as such term is used in Sections 13(d) and 14(d) of the Exchange Act, as amended, and the rules and regulations thereunder (the “Exchange Act”), other than (a) a trustee or other fiduciary holding securities under an employee benefit plan of the Company; (b) a corporation owned, directly or indirectly, by the shareholders of the Company in substantially the same proportions as their ownership of stock of the Company; or (c) any current beneficial shareholder or group, as defined by Rule 13d-5 of the Exchange Act, including the heirs, assigns and successors thereof, of beneficial ownership, within the meaning of Rule 13d-3 of the Exchange Act, of securities possessing more than 50% of the total combined voting power of the Company’s outstanding securities; hereafter becomes the “beneficial owner,” as defined in Rule 13d-3 of the Exchange Act, directly or indirectly, of securities of the Company representing 20% or more of the total combined voting power represented by the Company’s then outstanding Voting Securities;
(ii) during any period of two consecutive years, individuals who at the beginning of such period constitute the Board and any new director whose appointment by the Board or appointment by ordinary resolution passed by the Company’s shareholders, cease for any reason to constitute a majority thereof; or
(iii) the shareholders of the Company approve a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which would result in the Voting Securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into Voting Securities of the surviving entity) at least two-thirds of the total voting power represented by the Voting Securities of the Company or such surviving entity outstanding immediately after such merger or consolidation, or the shareholders of the Company approve a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company, in one transaction or a series of transactions, of all or substantially all of the Company’s assets.
(b) “Expense” shall mean attorneys’ fees and all other costs, expenses and obligations paid or incurred in connection with investigating, defending, being a witness in or participating in (including on appeal), or preparing for any of the foregoing, any Proceeding relating to any Indemnifiable Event.
(c) “Indemnifiable Event” shall mean any event or occurrence that takes place either prior to or after the execution of this Agreement, related to the fact that the Indemnitee is or was a director or officer of the Company, or is or was serving at the request of the Company as a director, officer, employee, or agent of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, or by reason of anything done or not done by the Indemnitee in any such capacity.
(d) “Proceeding” shall mean any threatened, pending or completed action, suit, investigation or proceeding, and any appeal thereof, whether civil, criminal, administrative or investigative and/or any inquiry or investigation, whether conducted by the Company or any other party, that the Indemnitee in good faith believes might lead to the institution of any such action.
(e) “Reviewing Party” shall mean any appropriate person or body consisting of a member or members of the Company’s Board or any other person or body appointed by the Board (including the special independent counsel referred to in Section 6) who is not a party to the particular Proceeding with respect to which the Indemnitee is seeking indemnification.
(f) “Voting Securities” shall mean any securities of the Company which vote generally in the election of directors.
2. Indemnification. Subject to Section 4 below, in the event the Indemnitee was or is a party to or is involved (as a party, witness, or otherwise) in any Proceeding by reason of (or arising in part out of) an Indemnifiable Event, whether the basis of the Proceeding is the Indemnitee’s alleged action in an official capacity as a director or officer or in any other capacity while serving as a director or officer, the Company shall indemnify the Indemnitee to the fullest extent permitted by the laws of the Cayman Islands and the Articles of Association against any and all Expenses, liability, and loss (including judgments, fines, penalties and amounts paid or to be paid in settlement, and any interest, assessments, or other charges imposed thereon, and any taxes imposed on any director or officer as a result of the actual or deemed receipt of any payments under this Agreement) (collectively, “Liabilities”) actually incurred or suffered by such person in connection with such Proceeding. The Company shall provide indemnification pursuant to this Section 2 as soon as practicable, but in no event later than 30 days after it receives written demand from the Indemnitee. Notwithstanding anything in this Agreement to the contrary and except as provided in Section 5 below, the Indemnitee shall not be entitled to indemnification pursuant to this Agreement in connection with any Proceeding initiated by the Indemnitee against the Company or any director or officer of the Company unless the Company has joined in or consented to the initiation of such Proceeding.
3. Advancement of Expenses. Subject to Section 4 below, the Company shall advance Expenses to the Indemnitee within 30 business days of such request (an “Expense Advance”); provided, however, that if required by applicable laws such Expenses shall be advanced only upon delivery to the Company of an undertaking by or on behalf of the Indemnitee to repay such amount if it is ultimately determined that the Indemnitee is not entitled to be indemnified by the Company; and provided further, that the Company shall make such advances only to the extent permitted by law. Expenses incurred by the Indemnitee while not acting in his/her capacity as a director or officer, including service with respect to employee benefit plans, may be advanced upon such terms and conditions as the Board, in its sole discretion, deems appropriate.
4. Review Procedure for Indemnification. Notwithstanding the foregoing, (i) the obligations of the Company under Sections 2 and 3 above shall be subject to the condition that the Reviewing Party shall not have determined (in a written opinion, in any case in which the special independent counsel referred to in Section 6 hereof is involved) that the Indemnitee would not be permitted to be indemnified under applicable law or the Articles of Association, and (ii) the obligation of the Company to make an Expense Advance pursuant to Section 3 above shall be subject to the condition that, if, when and to the extent that the Reviewing Party determines that the Indemnitee would not be permitted to be so indemnified under applicable law or the Articles of Association, the Company shall be entitled to be reimbursed by the Indemnitee (who hereby agrees to reimburse the Company) for all such amounts theretofore paid; provided, however, that if the Indemnitee has commenced legal proceedings in a court of competent jurisdiction pursuant to Section 5 below to secure a determination that the Indemnitee should be indemnified under applicable law, any determination made by the Reviewing Party that the Indemnitee would not be permitted to be indemnified under applicable law shall not be binding and the Indemnitee shall not be required to reimburse the Company for any Expense Advance until a final judicial determination is made with respect thereto (as to which all rights of appeal therefrom have been exhausted or have lapsed). The Indemnitee’s obligation to reimburse the Company for Expense Advances pursuant to this Section 4 shall be unsecured and no interest shall be charged thereon. If there has not been a Change in Control, the Reviewing Party shall be selected by the Board, and if there has been such a Change in Control, other than a Change in Control which has been approved by a majority of the Company’s Board who were directors immediately prior to such Change in Control, the Reviewing Party shall be the special independent counsel referred to in Section 6 hereof.
5. Enforcement of Indemnification Rights. If the Reviewing Party determines that the Indemnitee would not be permitted to be indemnified in whole or in part under applicable law, or if the Indemnitee has not otherwise been paid in full pursuant to Sections 2 and 3 above within 30 days after a written demand has been received by the Company, the Indemnitee shall have the right to commence litigation in any court having subject matter jurisdiction thereof and in which venue is proper to recover the unpaid amount of the demand (an “Enforcement Proceeding”) and, if successful in whole or in part, the Indemnitee shall be entitled to be paid any and all Expenses in connection with such Enforcement Proceeding. The Company hereby consents to service of process for such Enforcement Proceeding and to appear in any such Enforcement Proceeding. Any determination by the Reviewing Party otherwise shall be conclusive and binding on the Company and the Indemnitee.
6. Change in Control. The Company agrees that if there is a Change in Control of the Company, other than a Change in Control which has been approved by a majority of the Company’s Board who were directors immediately prior to such Change in Control, then with respect to all matters thereafter arising concerning the rights of the Indemnitee to indemnity payments and Expense Advances under this Agreement or any other agreement or under applicable law or the Articles of Association now or hereafter in effect relating to indemnification for Indemnifiable Events, the Company shall seek legal advice only from special independent counsel selected by the Indemnitee and approved by the Company, which approval shall not be unreasonably withheld. Such special independent counsel shall not have otherwise performed services for the Company or the Indemnitee, other than in connection with such matters, within the last five years. Such independent counsel shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or the Indemnitee in an action to determine the Indemnitee’s rights under this Agreement. Such counsel, among other things, shall render its written opinion to the Company and the Indemnitee as to whether and to what extent the Indemnitee would be permitted to be indemnified under applicable law. The Company agrees to pay the reasonable fees of the special independent counsel referred to above and to indemnify fully such counsel against any and all expenses (including attorneys’ fees), claims, liabilities and damages arising out of or relating to this Agreement or the engagement of special independent counsel pursuant to this Agreement.
7. Partial Indemnity. If the Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of the Expenses and Liabilities, but not, however, for all of the total amount thereof, the Company shall nevertheless indemnify the Indemnitee for the portion thereof to which the Indemnitee is entitled. Moreover, notwithstanding any other provision of this Agreement, to the extent that the Indemnitee has been successful on the merits or otherwise in defense of any or all Proceedings relating in whole or in part to an Indemnifiable Event or in defense of any issue or matter therein, including dismissal without prejudice, the Indemnitee shall be indemnified against all Expenses incurred in connection therewith. In connection with any determination by the Reviewing Party or otherwise as to whether the Indemnitee is entitled to be indemnified hereunder, the burden of proof shall be on the Company to establish that the Indemnitee is not so entitled.
8. Non-exclusivity. The rights of the Indemnitee hereunder shall be in addition to any other rights the Indemnitee may have under any statute, provision of the Articles of Association, vote of shareholders or disinterested directors or otherwise, both as to action in an official capacity and as to action in another capacity while holding such office. In the event of any change, after the date of this Agreement, in any applicable law, statute, or rule which expands the right of a Cayman Islands company to indemnify a member of its board of directors, such changes shall be, ipso facto, within the purview of the Indemnitee’s rights and the Company’s obligations, under this Agreement. In the event of any change in any applicable law, statute or rule which narrows the right of a Cayman Islands company to indemnify a member of its board of directors, such changes, to the extent not otherwise required by such law, statute, or rule to be applied to this Agreement shall have no effect on this Agreement or the Parties’ rights and obligations hereunder.
9. Liability Insurance. To the extent the Company maintains an insurance policy or policies providing directors’ and officers’ liability insurance, the Indemnitee shall be covered by such policy or policies, in accordance with its or their terms, to the maximum extent of the coverage available for any director or officer of the Company. If at the time a claim for indemnification arises hereunder in connection with a Proceeding the Company has director and officer liability insurance in effect, the Company shall give prompt notice of the commencement of such Proceeding to the insurers in accordance with the procedures set forth in the respective policies. The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such Proceeding in accordance with the terms of such policies.
10. Settlement of Claims. The Company shall not be liable to indemnify the Indemnitee under this Agreement (a) for any amounts paid in settlement of any action or claim effected without the Company’s written consent, which consent shall not be unreasonably withheld; or (b) for any judicial award if the Company was not given a reasonable and timely opportunity, at its expense, to participate in the defense of such action.
11. No Presumption. For purposes of this Agreement, to the fullest extent permitted by law, the termination of any Proceeding, action, suit, or claim, by judgment, order, settlement (whether with or without court approval) or conviction, or upon a plea of nolo contendere, or its equivalent, shall not create a presumption that the Indemnitee did not meet any particular standard of conduct or have any particular belief or that a court has determined that indemnification is not permitted by applicable law.
12. Consent and Waiver by Third Parties. The Indemnitee hereby represents and warrants that he or she has obtained all waivers and/or consents from third parties which are necessary for his or her employment with the Company on the terms and conditions set forth herein and to execute and perform this Agreement without being in conflict with any other agreement, obligation or understanding with any such third party. The Indemnitee represents that he or she is not bound by any agreement or any other existing or previous business relationship which conflicts with, or may conflict with, the performance of his or her obligations hereunder or prevent the full performance of his or her duties and obligations hereunder.
13. Amendment of this Agreement. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by the Parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar), nor shall such waiver constitute a continuing waiver. Except as specifically provided herein, no failure to exercise or any delay in exercising any right or remedy hereunder shall constitute a waiver thereof.
14. Subrogation. In the event of payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of the Indemnitee, who shall execute all papers required and shall do everything that may be necessary to secure such rights, including the execution of such documents necessary to enable the Company effectively to bring suit to enforce such rights.
15. No Duplication of Payments. The Company shall not be liable under this Agreement to make any payment in connection with any claim made against the Indemnitee to the extent the Indemnitee has otherwise actually received payment (under any insurance policy, vote, agreement or otherwise) of the amounts otherwise indemnifiable hereunder.
16. Binding Effect. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the Parties hereto and their respective successors, assigns, including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business and/or assets of the Company, spouses, heirs, and personal and legal representatives. The Company shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all, substantially all, or a substantial part, of the business and/or assets of the Company, by written agreement in form and substance satisfactory to the Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place. This Agreement shall continue in effect regardless of whether the Indemnitee continues to serve as a director or officer of the Company or of any other enterprise at the Company’s request.
17. Severability. The provisions of this Agreement shall be severable in the event that any of the provisions hereof (including any provision within a single section, paragraph, or sentence) is held by a court of competent jurisdiction to be invalid, void or otherwise unenforceable, and the remaining provisions shall remain enforceable to the fullest extent permitted by law. Furthermore, to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of this Agreement containing any provision held to be invalid, void or otherwise unenforceable that is not itself invalid, void, or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal, or unenforceable.
18. Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of Singapore. Each Party irrevocably agrees that the courts of the Singapore shall have exclusive jurisdiction to hear and determine any claim, suit, action or proceeding, and to settle any disputes, which may arise out of or are in any way related to or in connection with this Agreement, and, for such purposes, irrevocably submits to the exclusive jurisdiction of such courts.
The seat of the arbitration shall be Singapore.
The Tribunal shall consist of one arbitrator to be chosen by the President of the Court of Arbitration for the time being of the SIAC.
The language of the arbitration shall be English.
19. Entire Agreement; Counterparts. This Agreement expresses the entire understanding with respect to the subject matter hereof and supersedes and terminates any prior oral or written agreements with respect to the subject matter hereof.
This Agreement may be signed in any number of counterparts, all of which taken together and when delivered to the Parties by electronic mail in “portable document format (.pdf)” form, or by any other electronic means intended to preserve the original graphic and pictorial appearance of a document, or by a combination of such means, shall constitute one and the same instrument. Either Party may enter into this Agreement by signing any such counterpart manually or electronically (such as via Adobe Sign and DocuSign) and deliver the executed counterpart via electronic means to the other Party. The receiving Party may rely on the receipt of such document so executed and delivered by electronic means as if the original had been received. Such electronic signatures (such as Adobe Sign and DocuSign) shall be recognized and construed as secure electronic signatures pursuant to the Electronic Transactions Act 2010 of Singapore and such signatures shall be deemed to be original and binding signatures for all intents and purposes. The Parties agree that this document, if executed in accordance with this Clause 12, shall be valid, accurate and authentic, and given the same effect as, a written and signed document between the Parties in hard copy or “wet ink” signatures.
20. Notices. All notices, demands, and other communications required or permitted hereunder shall be made in writing and shall be deemed to have been duly given (a) if delivered by hand, when received (b) if transmitted by facsimile, on receipt of an error-free confirmation, or (c) if by international courier service, on the fourth (4th) business day following the date of deposit with such courier service, or such earlier delivery date as may be confirmed in writing to the sender by the courier service. All such notices, demands and other communications shall be addressed as follows:
If to the Company:
Mobile-health Network Solutions,
2 Venture Drive,
#07-06/07 Vision Exchange,
Singapore 608526
If to the Indemnitee:
Notice of change of address shall be effective only when done in accordance with this Section. All notices complying with this Section shall be deemed to have been received on the date of delivery or on the third business day after mailing.
21. Specific Performance. The failure of the Company to perform any of its obligations hereunder shall entitle the Indemnitee, as a matter of course, to request an injunction from any court of competent jurisdiction to enforce such obligations. Such right to request specific performance shall be cumulative and in addition to any other rights and remedies to which the Indemnitee shall be entitled.
IN WITNESS WHEREOF, the Parties hereto have duly executed and delivered this Agreement as of the day first set forth above.
THE COMPANY: | ||
Mobile-health Network Solutions | ||
By: |
INDEMNITEE: | ||
By: | ||
(Print Name and Title of Indemnitee Above) |
Exhibit 10.3
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made on the day of , 20 .
BETWEEN:
(1) | MOBILE-HEALTH NETWORK SOLUTIONS (Registration Number: CT-313720), a company incorporated in in the Cayman Islands and having its registered office at Cricket Square, Hutchins Drive, P.O. Box 2681, Grand Cayman, KY1-1111, Cayman Islands (the “Company”); and |
(2) | (Singapore NRIC No. ) of Address: (the “Executive”). |
WHEREAS:
The Company has agreed to employ the Executive, and the Executive has agreed to be employed by the Company as an Executive Director upon the terms and subject to the conditions set out in this Agreement.
NOW IT IS HEREBY AGREED as follows:
1. | DEFINITIONS |
1.1 | In this Agreement, unless the context otherwise requires: |
“Board” means the board of directors of the Company from time to time;
“Business” means the following business:
(a) | the provision of both online and offline medical related services, including but not limited to the telemedicine app, MaNaDr; and | |
(b) | such other business conducted or to be conducted by the Group; |
“Commencement Date” means ;
“Group” means the group of companies consisting of the Company and its subsidiaries from time to time;
“Initial Term” has the meaning ascribed to it in Clause 2;
“S$” means Singapore Dollars; and
“Term” means the period from the Commencement Date until the expiry or termination of this Agreement.
1.2 | Words in this Agreement denoting a singular number include the plural and vice versa; words denoting one gender include both genders and the neuter and words denoting a person include a corporation, sole proprietorship, firm, joint venture or syndicate, in each case vice versa. |
1.3 | Headings in this Agreement are for ease of reference only and do not form part of this Agreement. |
2. | APPOINTMENT AS EXECUTIVE DIRECTOR AND CHIEF [EXECUTIVE/OPERATING] OFFICER |
The Company shall employ the Executive and the Executive shall serve the Company as an Executive Director upon the terms and subject to the conditions of this Agreement. The employment shall commence on the Commencement Date and shall continue (subject to earlier termination as provided in this Agreement) thereafter for a period of one (1) year (the “Initial Term”) and thereafter continue from year to year, unless terminated pursuant to Clause 10.
3. | DUTIES |
3.1 | As an Executive Director of the Company, the Executive shall: |
(a) | undertake such duties and exercise such powers in relation to the Company and its business at such place as the Board may from time to time assign or vest in him; | |
(b) | in the discharge of such duties and in the exercise of such powers observe and comply with all resolutions and directions from time to time made or given by the Board; |
3.2 | The Executive shall at all times keep the Board promptly and fully informed of his conduct relating to material matters and decisions affecting the Group and provide such explanations as the Board may require. |
4. | SALARY & ALLOWANCES |
Subject as hereinafter provided, during the continuance of his employment hereunder, the Executive shall be entitled to a monthly basic salary of , payable in arrears at the end of each calendar month of his employment hereunder.
5. | BUSINESS EXPENSES |
5.1 | The Executive shall be reimbursed for all travelling, accommodation, entertainment and other out-of-pocket expenses reasonably incurred by him in or about the discharge of his duties hereunder. All business travel by air shall be of such class of travel as may be deemed appropriate by the Company. |
5.2 | The Executive is also entitled to full medical and dental coverage, including hospitalisation and surgical coverage, and to such other benefits generally accorded to executive directors as may be determined by the Board (with the Executive, being interested in this Agreement, abstaining from voting on any such resolution). |
6. | CONFIDENTIALITY |
6.1 | The Executive shall not either during his appointment or at any time after its termination: |
(a) | disclose, divulge or communicate to any person or persons (except to those authorised by the Company to know or as otherwise required by law) | |
(b) | use for his own purposes or for any purposes other than those of the Group; or | |
(c) | through any failure to exercise all due care and diligence cause any unauthorised disclosure of, |
any confidential information of the Group (including in particular lists or details of customers of the Group) relating to the working of any process, technology, invention or methods carried on or used by the Group or in respect of which the Group is bound by an obligation of confidence to a third party or any financial or trading information or trade secrets relating to the Group, or any information which the Executive might receive or obtain in relation to the Group’s business (including, without limitation, the Group’s finances, customers, clients or suppliers). These restrictions shall cease to apply to information or knowledge which may (otherwise than through the default of the Executive) become available to the public generally.
6.2 | All notes, memoranda, records and writing made by the Executive relating to the business of the Group shall be and remain the property of the Group to whose business they relate and shall be delivered by him to the company to which they belong forthwith upon request. |
6.3 | No statement or disclosure concerning this Agreement or the subject matter of, or any matter referred to in, this Agreement shall be made or issued by the Executive or on the Executive’s behalf without the prior written approval of the Company. |
7. | NON-SOLICITATION AND RESTRICTIVE COVENANTS |
7.1 | The Executive undertakes with the Company that, except with the consent in writing of the Company: |
(a) | for so long as he is an employee of the Company and for the period of 12 months from the Cessation Date, he will not either on his own account or in conjunction with or on behalf of any other person, firm or company, solicit or entice away or attempt to solicit or entice away from the Group the customer of any person, firm, company or organisation who shall at any time during the period of 12 months prior to the Cessation Date have been a customer, client, agent or correspondent of the Group or in the habit of dealing with the Group; |
(b) | for so long as he is an employee of the Company and for the period of 12 months from the Cessation Date, he will not either on his own account or in conjunction with or on behalf of any other person, firm or company, solicit or entice away or attempt to solicit or entice away from the Group any person who is an officer, manager or senior employee of the Group with whom he had dealings in the course of his employment at any time during the period of 12 months prior to the Cessation Date whether or not such person would commit a breach of his contract of employment by reason of leaving such employment; |
(c) | for so long as he is an employee of the Company and for the period of 12 months from the Cessation Date, he will not be interested in: |
(i) | any business or asset in which any member of the Group was during the Initial Term considering to acquire, turn to account, develop or invest, unless the Group shall have decided against such acquisition, turning to account, development or investment or invited the Executive or his associates in writing to participate in, or consented to in writing to the Executive or his associates’ acquisition, turning to account or development of or investment in, such business or asset; or |
(ii) | any asset of any member of the Group, unless such asset is offered by the relevant member of the Group for sale to, turning to account or development by third parties; and |
(iii) | he will not at any time hereafter make use of or disclose or divulge to any third party any information relating to the Group other than any information properly available to the public or disclosed or divulged pursuant to an order of a court of competent jurisdiction. |
7.2 | In this Clause 7: |
“Cessation Date” means the date that the Executive ceases to be an employee of the Company;
“Control” means the capacity to dominate decision-making, directly or indirectly, in relation to the financial and operating policies of an entity and
“Participate” means:
(a) | to in fact exercise Control over any entity engaged in the Business; |
(b) | to hold 15% or more of the issued share capital or equity interests of any entity (excluding treasury shares and preference shares) engaged in the Business; or |
(c) | to exercise control over 15% or more of the voting shares of any entity engaged in the Business. |
7.3 | Each and every obligation under this Clause 7 shall be treated as a separate obligation and shall be severally enforceable as such and in the event of any obligation or obligations being or becoming unenforceable in whole or in part, such part or parts as are unenforceable shall be deleted from this Clause 7 and any such deletion shall not affect the enforceability of all such parts of this Clause 7 as remain not so deleted. |
7.4 | While the restrictions in this Clause 7 are considered by the Executive and the Company to be reasonable in all the circumstances, it is agreed between the Executive and the Company that if any one or more of such restrictions shall either be taken by itself or themselves together be adjusted to go beyond what is reasonable in all the circumstances for the protection of the Group’s legitimate interests but would be adjudged reasonable if any particular restriction or restrictions were deleted or if any part or parts of the wording thereof were deleted, restricted or limited in a particular manner, then the restrictions shall apply with such deletions, restrictions or limitations, as the case may be. |
7.5 | In the event of and notwithstanding the expiry of the Executive’s employment hereunder, the Executive covenants and undertakes with the Company that he will at all times and in all respects continue to observe and comply with the provisions of this Clause 7 during the time stipulated herein. |
7.6 | The obligations stated in this Clause 7 shall survive the termination of this Agreement. |
8. | DATA PROTECTION |
8.1 | The Executive hereby consents to the Group using, disclosing and/or processing personal data relating to the Executive for legal, personal, administrative and management purposes, including monitoring and recording any use that the Executive may make of the Group’s electronic communications systems for the purpose of ensuring that the company policies are being complied with and for legitimate business purposes. |
8.2 | In connection with the consent provided in Clause 8.1, the Company may make available the Executive’s personal data to any of its subsidiaries, those who provide products or services to the Group (such as advisers and payroll administrators), regulatory authorities, potential or future employers, governmental or quasi-governmental organisations and potential purchasers of any Group company or the business in which the Executive works for. |
8.3 | The Executive hereby consents to the disclosure, processing and/or transfer of his personal data to any Group company or Group company’s business contacts outside Singapore in order to further its or their business interests in accordance with the Personal Data Protection Act 2012. |
8.4 | The Executive shall comply with the Personal Data Protection Act 2012 when handling personal data in the course of his employment including personal data relating to any employee, customer, client, supplier or agent of the Group. |
9. | INCAPACITY OR DEATH OF EXECUTIVE |
9.1 | Notiwthstanding anything in this Agreement, if the Executive shall at any time be incapacitated or prevented by illness, injury, accident or any other circumstances beyond his control (such incapacity or prevention being hereinafter referred to in this Clause 9 as the “incapacity”) from discharging in full of his duties hereunder for a total of six (6) months, the Company may, by three (3) months’ notice in writing given to the Executive at any time following the aforesaid six (6) month period so long as the incapacity shall continue, terminate his employment hereunder Provided Always That the Executive shall be paid his full remuneration (including bonus) for the period of three (3) months from the expiration of the aforesaid six (6) month period of incapacity and thereafter such remuneration, if any, as the Board shall in its absolute discretion determine. |
9.2 | Notwithstanding Clause 9.1, this Agreement shall forthwith automatically determine upon the death of the Executive, without any payment by way of compensation, damages or otherwise from the Group to the Executive. |
10. | TERMINATION |
10.1 | This Agreement shall be effective for the Initial Term and may not be terminated by either party by giving notice of termination during the Initial Term save in accordance with Clauses 9, 10.2, and 10.6. After the expiry of the Initial Term, subject always to Clauses 10.2 and 10.6, this Agreement may be terminated by either party upon giving to the other party notice in writing of one (1) month’s or by the Company paying the Executive an amount equal to one (1) month’s salary in lieu of notice. |
10.2 | Notwithstanding Clause 10.1 above, |
(a) | the Company may forthwith terminate the employment of the Executive prior to the expiry of the Initial Term by service of notice in writing in the event that: |
(i) | the Executive shall be disqualified to act as a director or an executive officer of the Company under any applicable laws or regulations or the memorandum and articles of association of the Company; |
(ii) | the Executive shall be guilty of any dishonesty, gross misconduct or wilful neglect of duty or shall commit any continued material breach of the terms of this Agreement after written warning (other than a breach which is capable of remedy and has been remedied by the Executive to the satisfaction of the Board within 30 days upon him being called upon to do so in writing by the Board); |
(iii) | the Executive shall be guilty of conduct likely to bring himself or any member of the Group into disrepute; |
(iv) | the Executive shall become bankrupt or make any arrangement or composition with his/her creditors or suffers a receiving order being made against him/her; |
(v) | any company (other than a member of the Group) in which the Executive is a director or an executive officer or a direct or indirect shareholder goes into liquidation on the ground of insolvency or becomes insolvent or suffers the presentation of a winding up petition or analogous proceedings brought against it; |
(vi) | the Executive is convicted of any criminal offence (other than an offence which in the reasonable opinion of the Board does not affect his position in the Company); |
(vii) | the Executive persistently refuses to carry out any reasonable lawful order given to him in the course of his employment or persistently fails diligently to attend to his duties hereunder; or |
10.3 | The Executive shall have no claim against the Company for damages or otherwise by reason of termination under Clauses 10.2 and no delay or forbearance by the Company in exercising such rights of termination shall constitute a waiver of that right. |
10.4 | Upon termination of this Agreement for whatever reason: |
(a) | the Executive shall immediately resign from all positions and offices held in the Group and execute an acknowledgement under seal to the effect that he has no claim against the Company or any member of the Group (as the case may be) for compensation for loss of office or otherwise. |
(b) | the Executive shall not at any time thereafter represent himself as being in any way connected with the business of the Group; |
(c) | the Executive shall deliver to the Company documents (including correspondence lists of clients or customers, notes, memoranda, plans and other documents of whatsoever nature), books, papers, materials and any other property or assets relating to the business or affairs of the Group which may then be in his possession or under his control, made or compiled by or delivered to him during his employment hereunder and concerning the business, finances or affairs of the Group or its related corporations. For the avoidance of doubt, it is hereby declared that the property and all such documents as aforesaid shall at times be vested in the Group; and |
(d) | the Executive shall not, at any time or for any purpose, use the name of the Group or any of its related corporations in connection with his own or any other name in any way which may suggest that he is or have been connected with the Group or the businesses of any of the related corporations of the Group, nor in any way hold himself out as having or having had any such connection and will not use any proprietary information concerning the Group or its related corporation in his businesses or affairs which he may have acquired in the course of or as incident to his employment for his own benefit or to the detriment or intended or probable detriment of the Group or any of its related corporations. |
10.5 | The expiration or determination of this Agreement howsoever arising shall not affect such of the provisions hereof as are expressed to operate or have effect thereafter and shall be without prejudice to any right of action already accrued to either party in respect of any breach of this Agreement by the other party. |
10.6 | If the Executive’s employment shall be determined by reason of the liquidation of the Company for the purposes of amalgamation or reconstruction and the Executive shall be offered employment with any concern or undertaking resulting from such amalgamation or reconstruction on terms not less favourable than the terms of this Agreement, the Executive shall have no claim against the Company in respect of the determination of his employment by the Company hereunder. |
11. | EFFECT OF TERMINATION ON UNDERTAKINGS |
The expiration or determination of this Agreement howsoever arising shall not affect such of the provisions hereof as are expressed to operate or have effect thereafter and shall be without prejudice to any right of action already accrued to either party in respect of any breach of this Agreement by the other party.
12. | INTELLECTUAL PROPERTY |
12.1 | For the purposes of this Clause 12, the following expressions bear the meanings ascribed to them respectively: |
“Intellectual Property” shall include:
(a} | letters patent and trade marks, whether registered or unregistered, including applications for any of the foregoing, and the right to apply for them in any part of the world; |
(b) | registered or unregistered designs, utility models and copyrights including applications for any of the foregoing, and the right to apply for them in any part of the world; |
(c) | discoveries, creations, inventions or improvements upon or additions to an invention; |
(d) | confidential information, know-how and any research effort relating to the Group and its business whether registrable or not; and |
(e) | moral rights and any similar rights in any country. |
12.2 | Subject to the provisions of the Patents Act 1994 of Singapore (the “Patents Act”) and the Copyright Act 2021 Singapore, if at any time during the Executive’s employment with the Group, the Executive discovers or participates in the making or discovery of any Intellectual Property relating to or capable of being used in the business, such Intellectual Property shall be the absolute property of the Group and the Executive shall immediately communicate full details of such Intellectual Property to the Group. At the request and expense of the Group, the Executive shall give and supply all information, data, drawings and assistance as may be required to enable the Group to exploit the Intellectual Property to the Group’s best advantage and shall execute all documents and do all things which may be necessary or desirable for obtaining patent, trademark, copyright or other protection for the Intellectual Property in such parts of the world as may be specified by the Group and for vesting the same in the Group or as it may direct. |
12.3 | The Executive hereby irrevocably appoints the Company to be his attorney in his name and on his behalf to sign, execute or do any such instrument or thing and generally to use his name for the purpose of giving to the Company (or its nominees) the full benefit of the provisions of this Clause 12. A certificate in writing in favour of any third party signed by any director or the secretary of the Company that any instrument or act falls within the authority conferred by this Clause 12.3 shall be conclusive evidence that such is the case. |
12.4 | If the Intellectual Property is not the property of the Group, the Group shall, subject to the provisions of the Patents Act, have the right to acquire for itself or its nominee the Executive’s rights in the Intellectual Property within 12 months after disclosure pursuant to Clause 12.2 on fair and reasonable terms to be agreed or settled by a single arbitrator. |
12.5 | Rights and obligations under this Clause 11 shall continue in force after termination of the Executive’s employment with the Company in respect of Intellectual Property made during his employment under this Letter and shall be binding upon his representatives. |
13. | ENTIRE AGREEMENT |
13.1 | This Agreement and the terms herein embody all the terms and conditions agreed upon between the parties hereto relating to the appointment of the Executive and supersedes and cancels all previous agreements and undertakings between the parties with respect to the appointment of the Executive whether such be written or oral. |
13.2 | The terms of this Agreement may only be varied in writing by the parties hereto or their duly authorised agents. |
14. | NOTICES |
Any notice under this Agreement shall be in writing by letter sent by registered post or by courier service requiring acknowledgment of receipt of delivery or mailed by certified mail, postage prepaid and return receipt requested. Any notice to the Company shall be sufficiently served if left addressed to the Company at its registered office for the time being and any notice to the Executive shall be sufficiently served if left at his last known address, and in the case of either party, any notice given by letter shall be deemed to have been given at the time at which the letter would be delivered in the ordinary course of registered post (notwithstanding the fact that the notice may be returned through the post undelivered).
15. | COUNTERPARTS |
This Agreement may be signed in any number of counterparts and by the parties on separate counterparts, each of which when so executed shall be an original, but all counterparts shall together constitute one and the same document. Each counterpart may be signed by a party or parties and transmitted by facsimile transmission which shall be valid and effectual as if executed as an original.
16. | CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 2001 |
The Contracts (Rights of Third Parties) Act 2001 shall not under any circumstances apply to this Agreement and any person who is not a party to this Agreement (whether or not such person shall be named referred to, or otherwise identified, or form part of a class of persons so named, referred to or identified in this Agreement) shall have no right under the Contracts (Rights of Third Parties) Act 2001 to enforce this Agreement.
17. | GOVERNING LAW |
This Agreement shall be governed by and construed in accordance with, the laws of Singapore and the parties hereby irrevocably submit to the non-exclusive jurisdiction of the courts of Singapore for any disputes arising in connection with this Agreement.
18. | SEVERABILITY |
The various provisions in this Agreement are severable and if any provision or identifiable part is held or found to be invalid or otherwise unenforceable, it shall be deemed to be severed from the provision, but the remainder of the provision shall remain in full force and effect.
IN WITNESS WHEREOF this Agreement has been entered into by parties on the date stated at the beginning.
The Company | |
SIGNED BY | |
for and on behalf of MOBILE-HEALTH NETWORK SOLUTIONS | |
in the presence of | |
The Executive Director and Chief [Executive/Operating] Officer | |
SIGNED BY | |
in the presence of | |
Exhibit 10.4
EMPLOYMENT CONTRACT
THIS EMPLOYMENT AGREEMENT is made this 01st day of AUGUST, 2022, (the Effective Date”), between MANADR PTE LTD, (hereinafter referred to as “Employer”, or the Company), having a principal place of business at 2 Venture Drive, #07 - 06 / 07, Vision Exchange, Singapore 608526 and PENG CHEE YONG (hereinafter referred to as “Employee”) who resides in . In consideration of the mutual covenants contained in this Agreement, the Employer and the Employee hereby agree as follows:
1. | Term of Employment. |
A. | Employer employs Employee and Employee accepts employment with the Employer for a period of twelve (12) months beginning on the 01 day of AUGUST, 2022; however, this Agreement may be terminated earlier as provided elsewhere in this Agreement. This Agreement shall be automatically renewed yearly beyond the period herein identified for an additional period of up to three (3) years, beyond which the terms and conditions herein may be subjected to changes as set by the company. |
2. | Duties of Employee. |
A. | Employee is employed as the Company’s FINANCIAL CONTROLLER. |
B. | Employee shall perform the duties and responsibilities customarily assigned to a company’s FINANCIAL CONTROLLER and as set forth in Exhibit A of this agreement. Employee shall report to and be subject to the direction and control of the CEO and COO of MANADR PTE LTD. |
C. | Employee shall devote a reasonable amount of his productive time, ability, and attention to the business of Employer during the term of this contract. |
3. | Compensation of Employee. |
A. | Base Compensation. As compensation for services rendered under this Agreement, Employee shall be entitled to receive from Employer a monthly salary of Singapore Dollars ($ ), payable in accordance with Employer’s regular payroll schedule. Refer Employee Incentive Plan 2023 v1, Table 1. |
B. | Quarterly Incentive. As additional compensation, the Employer agrees to pay to the Employee, Performance Incentives in accordance with the Performance Incentive Plan set forth on Table 2, attached. The computation as determined by the firm shall be final and conclusive for such purposes on both the Employer and the Employee. Refer Employee Incentive Plan 2023 v1, Table 1. |
C. | Six Monthly Incentive. Employee is eligible to receive a cash incentive based upon individual and company performance as determined by the Employer in its sole discretion. The incentive will be earned on six monthly basis, and paid sixty (60) days after the closing of the quarter. To determine the incentive, the Employer will use the following criteria, to arrive at their decision; increase in revenue, earnings, cash flow, debt reduction; economic value added, return on net assets, return on stockholders’ equity, return on assets, return on capital, stockholder returns, return on sales, gross or net profit margin, productivity, expense, margins, operating efficiency, objective measures of customer satisfaction, working capital, financing, earnings per share, market share, inventory turns, acquisitions or strategic transactions, or other means of bringing additional value to the Employer. Refer Employee Incentive Plan 2023 v1, Table 1. |
D. | Annual Base Salary Review. During an employee’s first year of work, their performance evaluation will be conducted at the end of their probation period and on the anniversary of their hire date. After the first year, performance evaluations will begin in January each year and any salary increases related to the evaluation will start in March. Refer Employee Incentive Plan 2023 v1, Table 1. |
E. | Annual Wage Supplement (AWS). Employer, in its sole discretion, may pay Employee an AWS, in such amount and under such terms and conditions as it determines to be appropriate and in the best interest of the Company. The AWS to be paid under this Agreement shall be determined in accordance to completion of twelve (12) months’ service on 31st December from the start date of the Employee employment. The actual quantum of the AWS will also depend on the performance of the Company. Employee will not be entitled to AWS if he/she is serving his/her notice of resignation. Refer Employee Incentive Plan 2023 v1, Table 1. |
4. | Confidential Information. |
A. | Trade Secret. Employee shall not, during the term of this Agreement or at any time thereafter, make unauthorized use of, or divulge to any other person or entity Company’s trade secrets, confidential or other information as is described in Article 4, Section B, without prior written permission from Company’s CEO. This Confidentiality Covenant shall apply to, but shall not be limited to all information protected under the Computer Misuse Act 1993 (“CMA”), and, in addition thereto, to all information described in, but not limited to, Section B and Section C of this Paragraph and the protections provided to the Company under this Agreement shall be in addition to and not in lieu of the protections afforded under said Act. |
B. | Confidential Information means and includes all oral, written and/or tangible information relating to the business, products, affairs, performance and finances of the Company, which for the time being is confidential, proprietary to it and/or not generally available to the public or treated by it as such and including, but not limited to, information relating in whole or in part to trade secrets, present and future products, services, business plans and strategies, marketing ideas and concepts, especially with respect to unannounced products and services, present and future product plans, pricing, volume estimates, financial data, product enhancement information, business plans, marketing plans, sales strategies, customer information (including customers’ Confidential applications and environments), market testing information, development plans, specifications, customer requirements, designs, plans or other technical and business information. |
C. | Intellectual Property includes ideas, concepts, creations, discoveries, inventions, improvements, know how, trade or business secrets ; trademarks, service marks, designs, utility models, tools, devices, models, methods, procedures, processes, systems, principles, algorithms, works of authorship, flowcharts, drawings, books, papers, models, sketches, formulas, teaching techniques, electronic codes, proprietary techniques, research projects, and other confidential and proprietary information, computer programming code, databases, software, programs, data, documents, instruction manuals, records, memoranda, notes, user guides; in either printed or machine- readable form, the whether or not copyrightable or patentable, or any written or verbal instruction or comments. |
D. | Exclusive Property of Company. The confidential information and trade secrets described above shall remain the exclusive property of Company and shall not be removed from the premises of Company under any circumstances whatsoever without the express prior written consent of Company. |
E. | Breach of Confidentiality. If Employee breaches or threatens to breach this Article 4, Company shall be entitled to obtain injunctive relief containing such mandatory or prohibitory clauses as are necessary to prevent the continued breach of this covenant of confidentiality. Company shall also be entitled to any other remedies provided under this contract or at law. If Company elects to enforce this Paragraph through a court of law of appropriate jurisdiction, Employee shall be liable for payment of all court costs, attorney’s fees, and necessary expenditures, which Company incurs. |
5. | Non-Competition and Other Restrictive Covenants. |
A. | Non-Compete. During the term of this Agreement and upon termination of Employee’s employment hereunder, and for a period of one (1) year from the date thereof, Employee shall not directly or indirectly engage in any business or other activity where the employee will engage in the same or substantially similar activities to those which he engaged in for the Company, if such activity or business is in competition with Company. |
B. | Non-Solicitation of Hire. During the term of this Agreement and for a period of two (2) years after its termination, Employee shall not recruit or seek to hire (whether directly or by assisting others) any other employee of Company or its affiliates who are still actively employed by or doing business with Company or its affiliates at the time Employee attempts to recruit or hire such persons, if employee had substantial contact with such other employee while employed by the Company. |
C. | Solicitation of Business. For a period of two (2) years after the termination of this Agreement Employee shall not, solicit or attempt to solicit, directly, indirectly, or by assisting others, any business from any of Company’s clients, customers, or actively-sought prospective customers with whom Employee had material contact during Employee’s employment for purposes of providing products or services that are competitive with those the Company provides. |
D. | Locations of Employment. The Non-Competition Covenants contained in this Article 5 shall apply within any geographic areas in which Employee conducted such activities for Company, and within the area where Employee is working at the time of the termination, and to any area wherein Employee worked at any time during the employment with the Company. |
E. | Locations of Business Activities. The parties understand that the Company does business throughout the South East Asia. Accordingly, they each understand and agree that these Non- Competition Covenants shall apply to any area wherein Employee conducts, performs supervises or assists in any operations on Company’s behalf, and to any area where clients, customers or actively sought prospective customers with whom Employee had material contact are present. | |
F. | Activities. The prohibitions in these Non-Competition Covenants shall apply to all such activities in such geographic area and during such period whether they are conducted for Employee’s own sake, or account, or on behalf of or in conjunction with another or others, or as a partner or joint venture, employee, agent, officer, director, beneficiary, or shareholder of such entity, person, partnership, association, firm, trust, or corporation. |
G. | Breach of Non-Competition Covenant. Employee understands and acknowledges that the provisions of Article 4 and 5 of this Agreement are required for the fair and reasonable protection of Company’s proprietary interest in its business, and are intended to prohibit third parties from benefitting from Employee’s relationship with Company at the Company’s expense and economic detriment. Employee recognizes and agrees that the ascertainment of damages in the event of Employee’s breach or violation of any covenant or undertaking contained in this Agreement, would be difficult, if not impossible to determine, and further that the various rights and duties created hereunder are extraordinary and unique, so that Company will suffer irreparable injury that cannot adequately be compensated for by monetary damages if Employee breaches or violates any covenant or undertaking contained in the Articles of this Agreement. Employee therefore agrees that, in addition to and without limiting any other remedy or right it may have, Company shall have the immediate right to obtain a preliminary and final injunction against Employee, from any court of competent jurisdiction enjoining any such alleged breach or violation without posting any bond that might otherwise be required, and agrees that Employee shall not plead or otherwise deny the adequacy of consideration given by Company in exchange for these covenants, nor the adequacy of any relief at law (including monetary damages) as a defense to Company’s petition, claim or motion for preliminary or final injunctive relief. |
H. | Agreement to Arbitrate and Jury Trial Waiver. Except as otherwise set forth in this Agreement, Employer and Employee agree that claims between the parties concerning this Agreement, which cannot be resolved through discussions or negotiations between them within fifteen (15) days of the commencement, shall be settled by arbitration through the services of an arbitrator mutually agreed upon by the parties, who shall apply the rules of the Singapore International Arbitration Centre (SIAC), or such other rules as the parties may mutually agree to observe. The decision of the arbitrator shall be final and may be enforced by any court having jurisdiction over the persons subject to such proceedings. The parties to this Agreement waive all rights to trial by jury which may otherwise exist with regard to the interpretation and enforcement of this Agreement. |
6. | Termination. |
A. | Termination With Notice. During the period of employment, if either party decides to terminate this employment agreement, with or without cause, the period of notice of termination shall be ninety (90) days, or pay in lieu of notice of termination. |
B. | Termination Without Notice Period. The Employer may terminate this Agreement immediately on any of the following grounds without any notice in advance and without compensation of any sort or kind whatever and without prejudice to any claim that the Company may establish against the Employee for debt or damage: |
a. | Previously possessed related knowledge, competency, qualifications, behaviour and biography declared either by documentation or orally, during the course of the employment evaluation leading to final employment, concealed false information; | |
b. | Refusal to perform duties assigned, or disobedience of orders and directives issued to the Employee; | |
c. | Violation of any rule or regulation of which the Employee has notice and that may be established from time to time for the conduct of the Company’s business; | |
d. | Unlawful misconduct by the Employee, including, without limitation, the commission of an act of fraud or embezzlement against the Company or commission of a crime involving moral turpitude; |
e. | Consistent wilful misconduct or negligence in performing of the Employee’s duties; | |
f. | Engaged in conduct materially detrimental to the business of the Employer; | |
g. | Breach of fiduciary duty in connection with the Employee’s employment with the Company; | |
h. | Being absent or being unable to perform the Employee’s duties and alleging ill-health as the cause thereof, the Employee shall refuse to medical practitioner nominated by the Company to examine the Employee or shall fail to give to such medical practitioner the information necessary to report upon the Employee’s state of health; | |
i. | Breach of any of the provision of this Agreement. |
C. | In the event of the bankruptcy or insolvency of Employer, this Agreement and all the obligations of either party hereunder shall terminate. |
7. | Miscellaneous. |
A. | Annual Leave. Employee shall be entitled to a total of twenty-one (21) days annual paid leave in addition to holiday and sick leave. Any unused vacation time may not be carried forward from year to year. |
B. | Sick Leave. Employee shall be entitled to Fourteen (14) days of sick leave annually, which shall be administered in accordance with Employer’s standard business practices. Any unused sick leave may not be carried forward from year to year. |
C. | Employee Benefit Plan. Employee shall be entitled to participate in such employee benefit plans as may be provided by the Company for the benefit of the Company’s executive officers, including any health insurance plan, disability insurance plan, stock option plan, or other employee welfare benefit plan. The existence of any such plans, along with the terms and conditions of inclusion, and the specific benefits thereby provided are matters within the sole discretion of the Company. |
D. | Public Holidays. Employee shall be entitled to receive paid time off for all nationally recognised or local holidays, in accordance with Employer’s policies and procedures as they may exist from time to time.
| |
E. | Expenses. Employer shall reimburse Employee for such expenses incurred by Employee which Employer, in its sole discretion, determines were reasonably necessary to the performance by Employee of her duties on behalf of the Company. |
F. | Stock Option. Refer MHNS Employee Incentive Plan for Stock Options. |
G. | Severability. All of the clauses of this Agreement are distinct and severable and if any clause shall be deemed illegal, void or unenforceable, the validity, legality or enforceability of any other clause or provision of this Agreement shall not be affected. |
H. | Waiver. Waiver by either party of any provision of this Agreement shall not operate as, or be construed to be, a waiver of any subsequent breach hereof. |
I. | Governing Law and Jurisdiction. This Agreement shall be governed and construed in accordance with the laws of Singapore in relation to any legal action or proceedings to enforce this Agreement. Subject to arbitration, the Parties irrevocably submit to the exclusive jurisdiction of any competent courts situated at Singapore and waive any objection to such proceedings on grounds of venue or on the grounds that the proceedings have been brought in an inconvenient forum. | |
J. | Entire Agreement. This Agreement, including Exhibits A and B, contains the entire agreement between the parties and supersedes any and all other agreements, whether oral or in writing, between the parties and contains all of the covenants and agreements between the parties with respect to the subject matter of this Agreement. Each party to this Agreement acknowledges that no representations, inducements, promises, or agreements, orally or otherwise, have been made by any party, or anyone acting on behalf of any party, that are not embodied in this Agreement, and that no other agreement, statement, or promise not contained in this Agreement shall be valid or binding. Any modification of this Agreement will be effective only if it is in writing signed by the party to be charged. | |
K. | Relationship of the Parties. The relationship between the Company and the Employee is solely that of hirer and Employee. | |
L. | Amendments. No change, modification, or end of service of any of the terms, provisions, or conditions of this Agreement shall be effective unless made in writing and signed or initialled by all signatories to this Agreement. | |
M. | Survival. End of service of this Agreement shall not affect those provisions hereof that by their nature are intended to survive such end of service. | |
N. | Assignment. The Employee acknowledges and agrees that the Company may assign any of its rights under this Agreement to any person or entity. This Agreement is not assignable by the Employee. |
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement to be effective as of the date first written above.
SIGNED by
/s/ Rachel Teoh Pui Pui | ||
Name: | Dr Rachel Teoh Pui Pui | |
Designation: | Co-CEO | |
FOR AND ON BEHALF OF MANADR PTE LTD |
/s/ Peng Chee Yong | ||
EMPLOYEE | ||
Name: | Peng Chee Yong | |
NRIC: |
1st July 2023
Peng Chee Yong
[Address]
Dear Chee Yong
LETTER OF PROMOTION
We are pleased to inform you that you have been promoted to Chief Financial Officer (CFO) with effect from 1st July 2023.
All other terms and conditions of employment remain unchanged, unless otherwise specified by the Company.
Thank you for your dedication and contribution to the company. We trust that you will continue to serve the company with diligence. Keep up the good work!
Yours sincerely
/s/ Rachel Teoh | |
Dr Rachel Teoh COO, Manadr Pte Ltd |
Exhibit 10.5
Mobile-health Network Solutions
2 Venture Drive, #07-06/07 Vision Exchange
Singapore 608526
+65 6222 5223
, 2024
[Name]___________________
[Address]_________________
_________________________
Re: Director’s Agreement
Dear :
Mobile-health Network Solutions (the “Company”), is pleased to offer you a position as an independent director on its Board of Directors and as chairman of the Committee, a member of the Committee and a member of the Committee that we intend to form (collectively the “Board”). This letter shall constitute an agreement (the “Agreement”) between you and the Company and contains all the terms and conditions relating to the services you are to provide and subject at all times to applicable laws, including the Companies Act (2023 Revision) of the Cayman Islands, as amended from time to time (the “Applicable Laws”) and the memorandum and articles of association of the Company for the time being, as amended, modified or supplemented from time to time (the “Constitution”).
1. Term. Your appointment shall be effective as of the date of the effectiveness of the registration statement on F-1 of the Company. Your term as director shall continue subject to the provisions in Section 8 below or until your successor is duly elected and qualified. The position shall be up for re-election each year at the annual shareholders’ meeting and upon re-election, the terms and provisions of this Agreement shall remain in full force and effect.
2. Services. You shall render services as a member of the Board, which shall include, amongst others, representing the interests of the shareholders of the Company in Board discussions and exercising your best endeavors to procure the Company’s compliance with the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) and the Nasdaq Stock Market LLC (the “Nasdaq”), the Constitution and all other Applicable Laws which are binding on or applicable to the Group. You shall be required to attend all meetings of the Board called from time to time either in-person or by telephone, Zoom or another online meeting or otherwise virtual meeting platform. You shall be required to attend all meetings of the Audit Committee, the Compensation Committee and the Nominations Committee either in-person or by telephone, Zoom or another online meeting or otherwise virtual meeting platform. As an independent director, you may also be required to attend at least one (1) meeting with the other independent directors without the presence of the Company’s officers and non-independent directors and to perform such other duties required of the independent directors, including but not limited to submitting relevant documents required of directors by the SEC or Nasdaq. The services described in this Section 2 shall hereinafter be referred to as your “Duties.”
3. Services for Others. You shall be free to represent or perform services for other persons during the term of this Agreement. You agree, however, that you do not presently perform and do not intend to perform, during the term of this Agreement, similar Duties, consulting, or other services for companies whose businesses are or would be, in any way, directly or indirectly, competitive with the Company (except for companies previously disclosed by you to the Company in writing). Should you propose to perform similar Duties, consulting, or other services for any such company, you shall notify the Company in writing in advance (specifying the name of the organization for whom you propose to perform such services) and to provide information to the Company sufficient to allow it to determine if the performance of such services would conflict with areas of interest to the Company.
4. Compensation.
4.1 Cash Compensation. Subject to the Applicable Laws and the Constitution, you will be paid a director’s fee of per year (“Director’s Fee”) for performing your Duties. The Company’s obligation to pay the full amount of the Director’s Fee shall be absolute and unconditional for so long as you serve as a director, notwithstanding the fact that payment is being made on an installment basis. Subject to Section 8 in this Agreement, in the event that you serve as a director of the Company for only part of the period for which the Director’s Fee is payable, you shall be entitled to a pro rata portion of the fee related to the period during which you have served as a director with effect from the date of the effectiveness of the registration statement on Form F-1 of the Company. The Director’s Fee shall be payable in 12 installments, each installment shall equal to unless you are entitled to a pro rata portion as provided in this Section above. You will be entitled to an installment every month of your service as a director, and the installments will be transferred to your account on or before the 7th day of the month immediately following which you are entitled to an installment. It is anticipated that the Directors Fee will continue for so long as you are a director and will continue to be paid in monthly increments.
4.2. Cash Reimbursement. You shall be reimbursed for reasonable expenses documented and incurred by you in connection with the performance of your Duties (including travel expenses for meetings you attend in-person).
4.3. Service on Board Committees. You will not receive additional compensation (other than the Director’s Fee) for your services on the Audit Committee, the Compensation Committee and the Nominations Committee.
5. D&O Insurance Policy. During the term under this Agreement, the Company shall include you as an insured under its officers and directors’ insurance policy with coverage determined annually by the Company and the Board. The Company agrees to maintain such insurance for so long as you serve as a Director, and thereafter for so long as you may be subject to any possible claim or proceeding by reason of fact that you were a director of the Company.
6. No Assignment. Because of the personal nature of the services to be rendered by you, this Agreement may not be assigned by you without the prior written consent of the Company.
7. Confidential Information; Non-Disclosure. In consideration of your access to the premises of the Company and/or you access to certain Confidential Information of the Company, in connection with your business relationship with the Company, you hereby represent and agree as follows:
7.1. Definitions. For purposes of this Agreement, the term “Confidential Information” means:
a. Any information that the Company possesses that has been created, discovered, or developed by or for the Company, and that has or could have commercial value or utility in the business in which the Company is engaged; or
b. Any information that is related to the business of the Company and is generally not known by non-Company personnel, including in particular lists or details of customers, suppliers of the Group, or working of any process, technology, invention or methods carried on or used by the Group in respect of which the Group is bound by an obligation of confidence to any third party or any financial or trading information or such other trade secrets relating to the Group, information which you might receive or obtain in relation to the Group’s business such as the Group’s finances, customers, clients or suppliers.
By way of illustration, but not limitation, Confidential Information includes trade secrets and any information concerning products, processes, formulas, designs, inventions (whether or not patentable or registrable under copyright or similar laws, and whether or not reduced to practice), discoveries, concepts, ideas, improvements, techniques, methods, research, development and test results, specifications, data, know-how, software, formats, marketing plans, and analyses, business plans and analyses, strategies, forecasts, customer and supplier identities, characteristics, and agreements.
7.2. Exclusions. Notwithstanding the foregoing, the term Confidential Information shall not include:
a. Any information that becomes generally available to the public other than as a result of a breach of the confidentiality portions of this Agreement, or any other agreement requiring confidentiality between the Company and you;
b. Information received from a third party in rightful possession of such information who is not restricted from disclosing such information; and
c. Information known by you prior to receipt of such information from the Company, which prior knowledge can be documented.
7.3. Documents. You agree that, without the express prior written consent of the Company, you will not remove from the Company’s premises, any notes, formulas, programs, data, records, machines, or any other documents or items that in any manner contain or constitute Confidential Information, nor will you make reproductions or copies of same. In the event you receive any such documents or items by personal delivery from any duly designated or authorized personnel of the Company, you shall be deemed to have received the express written consent of the Company. In the event that you receive any such documents or items, other than through personal delivery as described in the preceding sentence, you agree to inform the Company promptly of your possession of such documents or items. All notes, memoranda, records, correspondence, computer information (such as disks, files, spreadsheets and software), plans, drawings and other documents of whatsoever nature and all copies thereof made or compiled or acquired by you during the term of this Agreement in relation to the business, finances or affairs of the Group and all other property belonging to the Group, including but not limited to documents and other records (whether on paper, disc, tape or any electro-magnetic medium or in any other form) shall remain the property of the Group. You shall promptly return any such documents or items, along with any reproductions or copies to the Company upon the Company’s demand, upon termination of this Agreement, or upon your termination or Resignation, as defined in Section 8 herein.
7.4. No Disclosure. You agree that you will hold in trust and confidence all Confidential Information and will not disclose to others, directly or indirectly, any Confidential Information or anything relating to such information without the prior written consent of the Company, except for necessary disclosure in the course of your business relationship with the Company or required by the Applicable Laws. You further agree that you will not use any Confidential Information without the prior written consent of the Company, except as may be necessary in the course of your business relationship with the Company or required by the Applicable Laws, and that the provisions of this Section 7.4 shall survive the termination of this Agreement.
8. Termination and Resignation. Your membership on the Company’s Board may be terminated:
a. by failure of being re-elected as a director at the annual shareholders’ meeting;
b. for any or no reason at a meeting called expressly and duly constituted in accordance with the Company’s Amended and Restated Articles of Association for the purpose of termination by (i) a simple majority of votes of shareholders that are entitled to vote in person or by proxy, or (ii) approval in writing by all of the shareholders entitled to vote in one or more instruments, each signed by one or more of the shareholders;
c. for any or no reason by delivering your written notice of resignation to the Company (“Resignation”), and such Resignation shall be effective upon its acceptance by the Board, provided, however, that if the Board has not acted on such written notice within two months from its date of delivery, then your Resignation shall be deemed to be accepted by the Board; or
d. for good cause, which shall mean any one or more of the following as determined in the reasonable discretion of the Company: (1) a continuing material breach or material default by you of the terms of this Agreement, except for any such breach or default which is caused by physical disability as determined by a neutral physician; (2) gross negligence, willful misconduct or continuing failure to perform your Duties; and (3) the commission by you of an act of fraud, embezzlement or any felony or other crime of dishonesty in connection with your Duties or which would materially and adversely affect the business reputation of the Company.
Upon the effective date of the termination or Resignation, your right to compensation hereunder will terminate, subject to the Company’s obligations to pay you any cash compensation that you have already earned and to reimburse you for approved expenses already incurred in connection with your performance of your Duties as of the effective date of such termination or Resignation. Except in the event of termination for good cause, the Company’s obligation to pay you cash compensation in accordance with Section 4.1 above for the first year in which you have agreed to serve as a director shall not be changed or adjusted, without regard to the period that you serve as a Director.
9. Indemnification. Concurrent with the execution of this Agreement we shall enter into the Director’s Indemnification Agreement attached hereto as Exhibit A and incorporated herein by this reference.
10. Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of Singapore. Each Party irrevocably agrees that the courts of the Singapore shall have exclusive jurisdiction to hear and determine any claim, suit, action or proceeding, and to settle any disputes, which may arise out of or are in any way related to or in connection with this Agreement, and, for such purposes, irrevocably submits to the exclusive jurisdiction of such courts.
11. Entire Agreement; Amendment; Waiver; Counterparts. This Agreement expresses the entire understanding with respect to the subject matter hereof and supersedes and terminates any prior oral or written agreements with respect to the subject matter hereof. Any term of this Agreement may be amended and observance of any term of this Agreement may be waived only with the written consent of the parties hereto. Waiver of any term or condition of this Agreement by any party shall not be construed as a waiver of any subsequent breach or failure of the same term or condition or waiver of any other term or condition of this Agreement. The failure of any party at any time to require performance by any other party of any provision of this Agreement shall not affect the right of any such party to require future performance of such provision or any other provision of this Agreement.
This Agreement may be signed in any number of counterparts, all of which taken together and when delivered to the Parties by electronic mail in “portable document format (.pdf)” form, or by any other electronic means intended to preserve the original graphic and pictorial appearance of a document, or by a combination of such means, shall constitute one and the same instrument. Either Party may enter into this Agreement by signing any such counterpart manually or electronically (such as via Adobe Sign and DocuSign) and deliver the executed counterpart via electronic means to the other Party. The receiving Party may rely on the receipt of such document so executed and delivered by electronic means as if the original had been received. Such electronic signatures (such as Adobe Sign and DocuSign) shall be recognized and construed as secure electronic signatures pursuant to the Electronic Transactions Act 2010 of Singapore and such signatures shall be deemed to be original and binding signatures for all intents and purposes. The Parties agree that this document, if executed in accordance with this Clause 11, shall be valid, accurate and authentic, and given the same effect as, a written and signed document between the Parties in hard copy or “wet ink” signatures.
[Remainder of Page Left Blank Intentionally]
This Agreement has been executed and delivered by the undersigned and is made effective as of the date first set forth above.
Sincerely, | ||
Mobile-health Network Solutions | ||
By: |
AGREED AND ACCEPTED BY | ||
By: | ||
Printer Name | ||
(Identification Number: ) |
Exhibit 10.6
Exhibit 10.7
CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THE EXHIBIT BECAUSE IT IS BOTH NOT MATERIAL AND IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL. INFORMATION THAT HAS BEEN OMITTED HAS BEEN NOTED IN THIS DOCUMENT WITH A PLACEHOLDER IDENTIFIED BY THE MARK “[ ]”.
LETTER OF GRANT
Date: 5 April 2023
Ref: MH 50:10/4-850
MaNaDr Pte Ltd
2 Venture Drive
#07-06 & 07 Vision Exchange
Singapore 608526
Attention: Dr. Siaw Tung Yeng
LETTER OF GRANT FUNDING FOR THE PROVISION OF TELEMEDICINE (TM) SERVICES, MOBILE MEDICINE (MM) SERVICES, CHASER SERVICES, AND HOME MEDICAL & NURSING SERVICES AS DIRECTED BY THE AUTHORITY
1. The Government of the Republic of Singapore, represented by the Ministry of Health (the “Authority”), is pleased to offer (the “Offer”) MaNaDr Pte Ltd (Company Registration No.:201736361M) (the “Recipient”) funding in accordance with the rates set out in Clause 5 of Appendix I, for the provision of Telemedicine (TM) Services, Mobile Medicine (MM) Services, Chaser Services and Home Medical & Nursing Services directed by the Authority (“Programme”) for the period commencing on 1 April 2023 and ending on 31 March 2024 (or such other date as may be determined by the Authority and notified to the Recipient in writing from time to time, whether by way of electronic mail communication or otherwise) (the “Funding Period”), on the terms and conditions set out in the Agreement.
2. If the Recipient wishes to accept the Offer, please indicate your unconditional acceptance of the Offer by submitting a Letter of Acceptance in form and substance as set out in Appendix III, duly signed by authorised signatories of the Recipient, to the Authority within seven (7) calendar days from the date of this letter.
3. The Offer shall lapse and be of no effect whatsoever if it is not duly accepted by you in accordance with the provisions of this letter by the deadline stated in paragraph 2.
4. The delivery to the Authority of the signed Letter of Acceptance in form and substance satisfactory to the Authority shall create a binding agreement between the Authority and the Recipient, which terms are contained in this letter (including all the appendices thereto) and the signed Letter of Acceptance.
5. Please contact Ms. [ ] (email: [ ]) for clarifications
Thank you.
Yours Sincerely,
MR. [ ]
[ ]
MINISTRY OF HEALTH
FOR AND ON BEHALF OF THE GOVERNMENT OF SINGAPORE
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Appendix I
DETAILS OF THE PROGRAMME AND FUNDING
A. | Name of Programme |
1. | Funding for the provision of Telemedicine (TM) Services, Mobile Medicine (MM) Services, Chaser Services, and Home Medical & Nursing Services as directed by the Authority. |
B. | Summary of the Programme |
2. | All terms referred to in this Appendix I shall have the meanings ascribed to them in Appendix II, unless otherwise defined herein or the context otherwise requires. |
3. | The Authority agrees to provide Funding to the Recipient for the Programme. The Recipient shall ensure that the Funding is used for the sole purpose of the Programme and shall comply with the provisions of the Agreement. |
4. | For the purpose of the Agreement: |
(a) | “Case Notification” means a notification sent by the Authority to the Recipient directing the Recipient to provide TM Services or MM Services to the patient identified in that notification, via a Communication Platform; | |
(b) | “Claim Period” means all calendar days from the first day to the last day of each month; | |
(c) | “Communication Platform” means any platform of written communication used for the purpose of communications relating to the Programme between the Authority and the Recipient; | |
(d) | “COVID-19” means the infectious disease known as the Coronavirus Disease 2019; | |
(e) | “FormSG” means the specific e-reporting form provided by the Authority for the purpose of the Programme; | |
(f) | “Healthcare Professional” means a doctor engaged or employed by the Recipient who provides Mobile Medicine Services, Telemedicine Services and/or Healthcare Professional Services, or any other person who has been appointed by the Recipient to provide such services; |
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(g) | “Home Recovery Programme” or “HRP” means an arrangement where an eligible PCR Positive Patient will isolate and recover from COVID-19 at his / her residence during his/ her isolation period; | |
(h) | “Medical Operations and Policy Centre” or “MOPC” means the department within the Ministry of Health that primarily monitors and manages medical operations, determines funding rates for vendors, and develops policy in the areas of operations, vaccination, and testing. | |
(i) | “Member of Public” or “MOP” means any individual who is not a PCR Positive Patient or a Serology Positive Patient; | |
(j) | “Mobile Medicine Services” or “MM Services” means doctor-led and/or doctor-supervised medical services provided outside of a licensed healthcare institution, which are conducted in-person; | |
(k) | “PCR Positive Patient” means an individual who had tested positive on a COVID-19 polymerase chain reaction test; | |
(l) | “Serology Positive Patient” means an individual who had tested positive on a COVID-19 serology test; and | |
(m) | “Telemedicine Services” or “TM Services” means doctor-led and/or doctor-supervised medical services provided remotely from a distance via video-link. | |
(n) | “TMARS” means TeleMedicine Allocation and Reconciliation System developed by the Integrated Health Information Systems Pte Ltd and used by the Authority. |
C. | Funding Scope |
5. | The MSPs will be reimbursed under a grant contract and will render their services at a standardised pricing to reduce overall cost to the Government set out in Annex A. For the avoidance of doubt, GST will be paid for claims submitted by the Recipient for TM Services, MM Services, Chaser Services, and Home Medical & Nursing Services. |
6. | Subject to the other provisions of the Agreement and the Recipient’s compliance with such provisions, the Authority shall disburse the amount of Funding claimed by the Recipient to the Recipient within 30 days from the date that the Authority approves that claim from the Recipient. |
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D. | Roles and Responsibilities |
TM Services and MM Services
7. | The Authority shall send a Case Notification to the Recipient through a Communication Platform such as Whatsapp and TMARS. |
8. | Covid-19 patients will be eligible to be assessed by TM doctors for HRP suitability, follow-up consultation or to report sick to receive adhoc TM consultations during their isolation period, in alignment with Authority’s prevailing policies. |
9. | MM services could be provided in the event where TM doctors assessed that in-person medical services would need to be provided to Covid-19 patients at their residential homes during their isolation period. |
10. | TM providers onboarded to prescribe Oral Antivirals (OAVs) should assess their patients for suitability to receive such drugs and dispense them accordingly. |
11. | The scope of services rendered by the TM providers could be extended to include patients of any other communicable/infectious diseases as well, in addition to the current scope for Covid-19 patients. Patients are required to be assessed by telemedicine doctors, and as well as to be given adhoc consults (ie report sick) during their quarantine period when needed. Examples of other communicable/infectious diseases that are of MOH concern are Monkey Pox Virus, Yellow Fever, Middle East Respiratory Syndrome (MERS) and Viral Hemorrhagic Fever (VHF). |
12. | The Recipient shall not charge any person (including any healthcare institution, patient or facility) any fee or sum for or in connection with any TM Services, MM Services and prescription of OAVs to patients who meet eligibility criteria. |
13. | In the event that the TM Service or MM Service involves the prescription of medication, the delivery of the medication shall be made: |
a. | for each Case Notification issued by the Authority between 12am to 8pm (both timings inclusive), between 8am to 10pm of the day on which the Case Notification was issued; and | |
b. | for each Case Notification issued by the Authority between 8.01pm to 11.59pm (both timings inclusive), before 12pm of the day after the Case Notification was issued. |
Chaser Services
14. | In the event when Covid-19 patients cannot be contacted due to reasons such as not having their handphone switched-on or if they do not own a smart phone, a separate set of TM provider (termed as Chasers) will be assigned to make attempts to call these uncontactable patients. These providers are equipped with expanded capabilities to include Call Centres, Administrative runners to do house calls to track down the patients, and TM doctors who are readily available to follow-up with TM services when the uncontactable patients are found. |
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Mobile Medical & Nursing Services
15. | Mobile medical doctors and/or nurses are made available to provide medical care to Covid-19 patients in MSF Homes, and as well as to perform ART/PCR swabs on these patients when required. The medical doctors may be required to triage patients to assess their suitability for recovery in-situ (instead of conveying the patients to a Covid facility); to consult patients who report sick; to detect any possibility of deterioration of condition that requires escalation; and to execute discharge planning. The nurses may be required to take vital readings of patients daily, dispense medication, perform initial assessment of patients before doctor’s review, swab patients if required, dress wound, remove stitches, provide Activities of Daily Livings (ADL) care, and ensure patients are discharged in a timely and safe manner. These services from the MSPs may be required for several hours daily over a period of several days at the homes. |
Compliance with laws, regulations, guidelines and compliance statements
16. | The Recipient shall comply with, and shall ensure that the Healthcare Professionals comply with, all applicable laws, regulations and guidelines when providing TM Services, MM Services. Applicable laws, regulations and guidelines include, but are not limited to: |
(a) | the Singapore Medical Council’s Ethical Code and Ethical Guidelines; and |
(b) | the National Telemedicine Guidelines. |
17. | The Recipient shall ensure that it is listed on the Ministry of Health’s Listing of Direct Telemedicine Service Providers (as published on the relevant website) and shall comply with the compliance statements stated in the Application Form for Voluntary Listing of Direct Telemedicine Service Providers submitted by the Recipient to the Ministry of Health. |
Reviews
18. | The Recipient shall propose improvements and rectify all deficiencies and irregularities identified by the Authority. |
Consent and Data
19. | The Recipient shall obtain the necessary consent for all information obtained by it, in the course of providing any TM Service, MM Service to be disclosed to, collected, used and processed by the Authority. |
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20. | Against the Recipient’s compliance with Clause 19 above, the Recipient shall maintain and furnish such data to the Authority as the Authority may require from time to time. |
E. | Timeline and Key Outcomes/Deliverables |
Waiting Time for TM Services and MM Services
21. | For TM Services provided in HRP cases, the Recipient shall ensure that the patient to whom the TM Service is delivered, is seen by a Healthcare Professional within the following durations of the Authority’s issuance of the Case Notification relating to that patient: |
S/No | Description | Duration | ||
(a) | Assessment | 6 hours | ||
(b) | Assessment Vulnerable | 2 hours | ||
(c) | Follow up consultation | 12 hours | ||
(d) | Ad hoc consultation | 2 hours |
For (a) and (c) above, the durations do not include the hours from 10 p.m. to 9 a.m. For example, if a Case Notification for Assessment is issued to the Recipient at 7 p.m., the Recipient is required to complete the Assessment of the patient to which the Case Notification relates by 12 p.m. the following day.
22. | For MM Services provided in HRP cases, the Recipient shall ensure that the patient to whom the MM Service is provided, is seen by a Healthcare Professional within 6 hours of the Authority’s issuance of the Case Notification relating to that patient. |
Data Reporting
23. | For TM Services or MM Services that are provided pursuant to a Case Notification issued through a Communication Platform other than TMARS, the Recipient shall update the Authority on the outcome of the case and submit to the Authority a FormSG or any other form within 24 hours of the Authority’s issuance of the Case Notification relating to that TM Service or MM Service (as the case may be). |
F. | Payment Schedule |
Timeline for the Submission of Claims
24. | Funding for any service or procedure performed in a month shall be claimed on the tenth day of the next month. The Recipient shall ensure that each claim for Funding is submitted together with all supporting documents in the format required by the Authority, for the Authority’s review and approval. Examples of such supporting documents include TMARS report, nurses’ timesheets, etc. The Authority shall have the right to reject claims that are not submitted in accordance with the foregoing. |
Submission of Annual Audited Statement of Account/ Expenditure Report
25. | The Recipient shall submit an annual audited Statement of Account/ Expenditure Report. This is with reference to the requirement in Appendix II para 3.2 (b). |
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Annex A: Services and Funding Rates
S/No | Services | Rates (S$ excl. GST) | ||
1. | TM Services/Assessment of Patient | |||
[Day] 9am to 8.59pm: | ||||
For Patients aged 12 years and above: | ||||
a. | TM Services + simple acute medication + delivery of medication to the patient | [ ] | ||
b. | TM Services only, without medication and delivery of medication to the patient | [ ] | ||
For Patients aged < 12 years old: | ||||
c. | TM Services + simple acute medication + delivery of medication to the patient | [ ] | ||
d. | TM Services only, without medication and delivery of medication to the patient | [ ] | ||
By Specialist Paeds for Patients < 12 years old: | ||||
e. | TM Services + simple medication + delivery of medication to the patient | [ ] | ||
f. | TM Services only, without medication and delivery of medication to the patient | [ ] | ||
g. | Regardless of age,
TM services + chronic medication + acute medication (if any) + delivery of medication to the patient |
[ ] | ||
[Night] 9pm to 8.59am: | ||||
For Patients aged 12 years and above: | ||||
h. | TM Services + simple acute medication + delivery of medication to the patient | [ ] | ||
i. | TM Services only, without medication and delivery of medication to the patient | [ ] | ||
For patients aged < 12 years old: | ||||
j. | TM Services + simple acute medication + delivery of medication to the patient | [ ] | ||
k. | TM Services only, without medication and delivery of medication to the patient | [ ] | ||
By Specialist paeds for patients < 12 years old: | ||||
l. | TM Services + simple acute medication + delivery of medication to the patient | [ ] | ||
m. | TM Services only, without medication and delivery of medication to the patient | [ ] | ||
n. | Regardless of age,
TM services + chronic medication + acute medication (if any) + delivery of medication to the patient |
[ ] |
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S/No | Services | Rates (S$ excl. GST) | ||
2. | MM Services | *Reimbursement will not be provided for TM services that resulted in MM services | ||
[Day] 9am to 8.59pm: | ||||
a. | MM Services (inclusive of all consultations, medications, and procedures) | [ ] | ||
[Night] 9pm to 8.59am: | ||||
b. | MM Services (inclusive of all consultations, medications, and procedures) | [ ] | ||
3. | Chaser Services | |||
Visit to establish contact with patient | [ ] | |||
4. | Services to Homes | |||
Medical and Nursing Care Services | ||||
a. | Medical Care: Doctor | The actual funding rates will depend on whether it is a TM or MM consultation, with or without medication, and time of consultation per consult case. | ||
b. | Nursing care: Nurse | $[ ]/hour |
Appendix II
FUNDING TERMS AND CONDITIONS
1. | DEFINITIONS |
1.1 | In these Terms and Conditions, unless the context otherwise requires: |
“Agreement” means the resulting contract between the Authority and the Recipient, as may be amended from time to time, in relation to the Funding as a result of the Recipient’s acceptance of the Authority’s offer which terms and conditions are contained in the following:
(a) | the Authority’s Letter of Grant (including all appendices and annexes thereto); and |
(b) | the Recipient’s Letter of Acceptance; |
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“Appendix I” means Appendix I (Details of the Programme and Funding) to the Letter of Grant;
“Funding” means the funding provided by the Authority for the Programme in accordance with the rates set out in Clause 5 of Appendix I;
“Funding Period” has the meaning ascribed to it in the Letter of Grant;
“Incompatible Person” means a person with whom association would, in the Authority’s view, be incompatible with the Authority’s objectives;
“Letter of Acceptance” means the letter of acceptance signed by the Recipient accepting the Authority’s offer in the Letter of Grant;
“Letter of Grant” means the letter of grant issued by the Authority to the Recipient, offering to provide Funding to the Recipient on these Terms and Conditions, as may be amended from time to time;
“Parties” mean the Authority and the Recipient, and “Party” means any one of them;
“PDPA” means the Personal Data Protection Act 2012 (No. 26 of 2012);
“Personnel” means directors, officers, personnel, employees, servants and agents; and
“Subcontractor” means any person, firm or company engaged by the Recipient to perform any part or parts of the Recipient’s obligations and includes the Subcontractor’s duly appointed representatives, successors and permitted assignees and the Subcontractor’s subcontractor.
1.2 | All other capitalised terms used in the Agreement shall have the meanings ascribed to them in the Letter of Grant, unless otherwise defined herein or the context otherwise requires. |
1.3 | In the Agreement, unless the context otherwise requires: |
(a) | words importing the singular shall also include the plural and vice versa where the context requires; |
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(b) | the headings are for convenience of reference only and shall not be taken into consideration for the purpose of interpretation; | |
(c) | references to a person include any company, limited liability partnership, partnership, business trust, unincorporated association or government agency (whether or not having separate legal personality); | |
(d) | “month” means calendar month and “day” means calendar day; | |
(e) | a reference to “including” shall not be construed restrictively but shall mean “including without prejudice to the generality of the foregoing” and “including but without limitation”; and | |
(f) | the words “personal data” shall have the same meaning as its definition in the PDPA. |
2. | OBLIGATIONS OF THE RECIPIENT |
2.1 | The Agreement shall commence on 1 April 2023. |
2.2 | The Recipient undertakes to the Authority to: - |
(a) | use the Funding exclusively for the implementation of the Programme during the Funding Period; | |
(b) | implement the Programme in accordance with Appendix I; and | |
(c) | comply with all directions, instructions, guidelines and implementation issued by the Authority to the Recipient from time to time. |
2.3 | The Recipient shall maintain and retain, for a period of five (5) years from date of last action of this Agreement (or such longer period as may be required under any applicable laws), all documents and records in relation to the Agreement or the Programme. |
2.4. | The Authority shall have the right, at any time, to require the Recipient to repay to the Authority immediately upon demand any amount of the Funding that was wrongly claimed or paid, or which has not been utilised in accordance with the Agreement. |
2.5 | The Recipient shall promptly provide such information to the Authority as the Authority may require from time to time. |
3. | AUDIT |
3.1 | The Authority shall be entitled from time to time to conduct ad-hoc audits, including through audits conducted by its Audit Agents and on-site audits if the Authority or its Audit Agents deem it necessary, to ensure that the terms of the Agreement are being, or were met and that reports and all information submitted to the Authority by the Recipient are accurate, correct and not misleading. |
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3.2 | The Recipient shall: |
(a) | ensure that the Authority and its Audit Agents are given full access to all accounts, records, documents, assets and premises in connection with the Funding; | |
(b) | provide the Authority and its Audit Agents with copies of such accounts, records and documents as the Authority or its Audit Agents may request, within such time as the Authority or its Audit Agents may specify; and | |
(c) | provide the Authority and its Audit Agents with such other reasonable cooperation and assistance in connection with the audits as the Authority or its Audit Agents may request. |
3.3 | Each Party shall bear its own costs and expenses incurred in respect of compliance with its obligations under this Clause 3, unless the audit identifies a material breach or default of the Agreement by the Recipient, in which case the Recipient shall reimburse the Authority for all the Authority’s reasonable costs incurred in connection with the audit. |
3.4 | For the purpose of this Clause 3, the term “Audit Agents” means such auditor as may be appointed by the Authority. |
4. | EVENTS OF DEFAULT AND TERMINATION |
4.1 | If the Authority determines in its absolute discretion that: |
(a) | the Recipient has breached any provision of the Agreement, which failure is, in the Authority’s view, incapable of being remedied; | |
(b) | the Recipient has breached any provision of the Agreement, and failed to remedy such breach to the Authority’s satisfaction within the time stated in the Authority’s written notice to do so; | |
(c) | the Recipient is in material breach of any of its obligations under the Agreement, and such breach results, or is likely to result, in damage to the reputation of the Authority; | |
(d) | the Recipient has breached Clause 3 (Audit), 8 (Confidentiality and Security), 10 (Sub-contract, Transfer and Assignment), 21 (Data Protection) or 22 (Data Security); | |
(e) | the Recipient has used any part of the Funding other than in accordance with the Agreement; | |
(f) | the Recipient has provided the Authority with misleading, inaccurate or untrue information, or failed to disclose to the Authority material information, in relation to any matter (whether or not in connection with the Programme); |
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(g) | the Recipient is involved in any investigation by any regulatory authority or any litigation (whether or not in connection with the Programme) that, in the Authority’s opinion, may adversely impact the Authority’s reputation by virtue of its association with the Recipient through the Agreement; | |
(h) | any of the events referred to in Clause 14 (Gifts, Inducements and Rewards) has occurred; or | |
(i) | the Recipient has received funding from, accepted advertisements from, collaborated with, or engaged in any activities in association with, any Incompatible Person, |
4.2 | The Authority shall have the right (in addition to and without prejudice to all other rights or remedies available) to do one or more of the following at any time thereafter, and the Recipient shall have no claim for any damages or compensation: |
(i) | withhold any Funding which has yet to be disbursed; | |
(ii) | reduce any rate of Funding by such amount as the Authority may determine; | |
(iii) | require the Recipient to repay within thirty (30) days all or any part of the Funding that has been disbursed to the Recipient, regardless of whether the Recipient has utilised such funds; and/or | |
(iv) | terminate the Agreement with immediate effect by giving the Recipient written notice. |
4.3 | If any of the following events occur, save where such termination is prohibited under Section 440 of the Insolvency, Restructuring and Dissolution Act 2018, the Authority shall be entitled to terminate the Agreement with immediate effect by written notice to the Recipient, and the Recipient shall have no claim for any damages or compensation: |
(a) | the Recipient is unable to pay its debts as and when they fall due; | |
(b) | a receiver, a provisional liquidator or a liquidator is appointed over any undertaking or property of the Recipient or an order is made, or a resolution is passed for winding-up or dissolution without winding-up (other than for the purpose of amalgamation or reconstruction) of the Recipient; | |
(c) | where the Recipient is a partnership, society or association, the Recipient is dissolved or has a bankruptcy order made against it or any partner, member or officer of the Recipient; |
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(d) | legal proceedings are commenced for the winding up or bankruptcy of the Recipient; | |
(e) | any application is made for the winding-up, bankruptcy or dissolution of the Recipient; or | |
(f) | the Recipient enters into any composition or arrangements with creditors. |
4.4 | The Authority shall have the right to terminate the Agreement for convenience by giving thirty (30) days’ written notice to the Recipient without having to assign any reason, and the Recipient shall have no claim for any damages or compensation. |
4.5 | Upon the termination or expiry of the Agreement, the termination or expiry of the Agreement shall be without prejudice to any rights and obligations of either party to the Agreement which has accrued prior to such termination and any obligation which expressly or by implication is intended to come into or continue in force on or after such termination. |
5. | VARIATION |
5.1 | Save as expressly provided in the Agreement, no variation of the Agreement shall be of any force unless agreed upon in writing and signed by the authorised signatories of both Parties. |
5.2 | Notwithstanding Clause 5.1, the Authority shall have the right to revise or add to Appendix II by providing not less than one (1) day’s written notice of the revision to the Recipient. |
5.3 | Clause 5.1 shall not affect, restrict or prejudice in any way the Authority’s right under Clause 5.2 or other expressly reserved rights of the Authority to unilaterally amend, modify or make additions to the Agreement. The Authority shall not be obliged to pay any damages, compensation or costs to the Recipient upon the exercise of the Authority’s rights under Clause 5.2 or other expressly reserved rights of the Authority to unilaterally amend, modify or make additions to the Agreement. |
6. | INDEMNITY |
6.1 | The Recipient shall indemnify and hold harmless the Authority from and against any and all liabilities, losses, damages, actions, claims, demands, costs (including legal costs on a full indemnity basis and experts’ and consultants’ fees), settlement sums and sums paid in satisfaction of court, arbitral or expert award (collectively, “Losses”) sustained, incurred, paid by or suffered by the Authority arising out of or in connection with the implementation or operation of the Programme by the Recipient, provided that such Losses are not due to any gross negligence or wilful default on the part of the Authority. |
6.2 | This Clause 6 shall survive the termination or expiry of the Agreement. |
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7. | MEETINGS |
7.1 | The Recipient shall attend such meetings as the Authority may require from time to time by giving reasonable written notice to the Recipient: |
(a) | to provide updates to the Authority in relation to the progress of the implementation of the Programme; or | |
(b) | for any other purpose relating to the Agreement. |
8. | CONFIDENTIALITY AND SECURITY |
8.1 | Except with the prior written consent of the Authority, the Recipient shall: |
(a) | treat as strictly confidential and not disclose any Confidential Information to any person other than Personnel of the Recipient or of its Subcontractors on a need-to-know basis for the purposes of performing the Recipient’s obligations under the Agreement; and | |
(b) | only use the Confidential Information for the sole purpose of performing the Recipient’s obligations under the Agreement and shall not use it for any other purpose. |
8.2 | The Recipient shall take all reasonable precautions in dealing with Confidential Information so as to prevent any unauthorised person from having access to such Confidential Information. The Recipient shall procure that all its Personnel and those of its Subcontractors and agents to whom Confidential Information is to be made available observe the obligations contained in this Clause 8 and shall, at the request of the Authority, procure that each of the Recipient’s Personnel and those of its Subcontractors and agents, sign an undertaking to safeguard official information in a form required by the Authority, if they have not already done so. |
8.3 | The Recipient shall not publish or release, nor shall it allow or suffer the publication or release of, any news item, article, publication, advertisement, prepared speech or any other information or material pertaining to any part of the obligations to be performed under the Agreement, in any media without the prior written consent of the Authority. |
8.4 | For the purposes of this Clause 8, “Confidential Information” means any information received or obtained as a result of entering into the Agreement (or any agreement entered into pursuant to the Agreement), including: |
(a) | information which relates to the Authority; | |
(b) | information which relates to the existence and the provisions of the Agreement or of any agreement entered into pursuant to the Agreement; or |
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(c) | any analyses, compilations, notes, studies, memoranda or other documents derived from, containing or reflecting such information, |
but does not include information that is:
(i) | or has become public knowledge otherwise than through breach of agreement or other legal obligation or through the default or negligence of the Recipient, any Subcontractor, or any of their respective Personnel; | |
(ii) | lawfully in the possession of the Recipient or already known to the Recipient on a non-confidential basis prior to the Recipient receiving or obtaining such information as a result of entering into the Agreement, as evidenced by written records; or | |
(iii) | independently developed by the Recipient. |
8.5 | The Recipient shall not be liable for disclosure of Confidential Information in the event and to the extent any Confidential Information is required to be disclosed by the Recipient pursuant to any applicable law, regulations or directives of any relevant government, statutory or regulatory body (including stock exchange) or pursuant to any legal process issued by any court or tribunal of competent jurisdiction, provided the Recipient shall, to the extent practicably possible and permissible by law or regulations, give the Authority prompt and prior notice of any such requirement and shall cooperate with the Authority to limit the scope of such disclosure to the maximum extent legally possible. |
8.6 | No later than thirty (30) days from the termination or expiry of the Agreement: |
(a) | the Recipient shall, subject to Clause 2.3: |
(i) | return or destroy all Confidential Information received from the Authority for the purpose of the Agreement without keeping any copies thereof; and | |
(ii) | securely destroy and erase all softcopies of Confidential Information that exist in hard disk, removable storage media and other storage media or facility whatsoever, |
provided that the Recipient may retain any Confidential Information as may be required by any applicable law, regulations or directives of any relevant government, statutory or regulatory body, without prejudice to its confidentiality obligations in relation to such Confidential Information contained in this Clause 8; and
(b) | the Recipient shall upon completion of the obligations under Clause 8.6(a), provide a written confirmation that it has complied with Clause 8.6(a). |
8.7 | The Recipient shall immediately notify the Authority where the Recipient becomes aware of any breach of this Clause 8 by its Personnel, any Subcontractor or any of the Subcontractor’s Personnel and cooperate at its own costs with the Authority to limit the extent and impact of such breach. |
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8.8 | This Clause 8 shall survive the termination or expiry of the Agreement. |
9. | RIGHTS OF THIRD PARTIES |
9.1 | A person who is not a party to the Agreement shall have no right under the Contracts (Rights of Third Parties) Act (Cap. 53B) to enforce any term of the Agreement. |
10. | SUB-CONTRACT, TRANSFER AND ASSIGNMENT |
10.1 | The Recipient shall not, without the prior written consent of the Authority, subcontract its obligations, or transfer or assign the benefit of the whole or any part of the Agreement. |
10.2 | The Recipient shall be responsible for the acts, defaults, negligence and omissions of its Subcontractors and their Personnel. |
11. | WAIVER |
11.1 | In no event shall any delay, failure or omission on the part of either of the Parties in enforcing or exercising any right, power, privilege, claim or remedy (“Remedy”), which is conferred under the Agreement, at law or in equity, or arises from any breach by the other Party, (i) be deemed to be or be construed as a waiver or variation thereof, or of any other such Remedy, in respect of the particular circumstances in question, or (ii) operate so as to bar the enforcement or exercise thereof, or of any other such Remedy in any other instance at any time or times thereafter. |
11.2 | No waiver of any breach of the Agreement shall be deemed to be a waiver of any other or of any subsequent breach. |
11.3 | Any waiver granted under the Agreement must be in writing and may be given subject to conditions. Such waiver under the Agreement shall be effective only in the instance and for the purpose for which it is given. |
12. | CUMULATIVE REMEDIES |
12.1 | The rights and remedies of the Parties are cumulative and are without prejudice and in addition to any rights or remedies such Party may have at law or in equity. No exercise by a Party of any one right or remedy under the Agreement, or at law or in equity shall operate so as to hinder or prevent the exercise by it of any other right or remedy under the Agreement, at law or in equity. |
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13. | SET-OFF |
13.1 | Whenever under the Agreement any sum of money (including any damages) shall be recoverable from or payable by the Recipient, the same may be deducted from any sum then due or which at any time thereafter may become due to the Recipient under the Agreement or any other agreement with the Authority. |
14. | GIFTS, INDUCEMENTS AND REWARDS |
14.1 | The Authority shall be entitled to immediately terminate or rescind the Agreement and recover from the Recipient the amount of any loss resulting from such termination or rescission if: |
(a) | any Recipient Representative (as defined below) has offered or given or agreed to give to any person any gift or consideration of any kind as an inducement or reward for: |
(i) | doing or forbearing to do or for having done or forborne to do any act in relation to the obtaining or performance of the Agreement; or |
(ii) | showing favour or disfavour to any person in relation to any contract with the Authority; or |
(b) | any Recipient Representative has engaged in any activity or conduct that has resulted or will result in a violation of any Anti-Corruption Laws. |
14.2 | In this Clause 14: |
“Anti-Corruption Laws” means:
(a) | Chapter IX of the Penal Code (Cap. 224); | |
(b) | the Prevention of Corruption Act (Cap. 241); and | |
(c) | any other applicable law including any foreign law which: |
(i) | prohibits the conferring of any gift, payment or other benefit on any person or any Personnel or adviser of such person; or | |
(ii) | is broadly equivalent to the laws set out in paragraphs (a) or (b) or which has as its objective the prevention of corruption. |
“Recipient Representative” means any of the following:
(a) | the Recipient; | |
(b) | any person employed by the Recipient; or | |
(c) | any person acting on behalf of the Recipient (whether with or without the knowledge of the Recipient). |
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15. | SEVERABILITY |
15.1 | In the event any provision in the Agreement is determined to be illegal, invalid or unenforceable, in whole or in part, such provision or part of it shall, to the extent it is illegal, invalid or unenforceable, be deemed not to form part of the Agreement and the legality, validity and enforceability of the remainder of the Agreement shall not be affected. |
16. | FORCE MAJEURE |
16.1 | Neither Party shall be liable for any failure to perform its obligations under the Agreement if the failure results from events which are beyond its reasonable control (“Force Majeure Event”) provided always that whenever possible the affected Party will resume that obligation as soon as the factor or event occasioning the failure ceases or abates. For the purposes of the Agreement, “Force Majeure Event” shall include acts of God, acts of civil or military authority, civil disturbance, wars, strikes, fires, and other catastrophes. |
16.2 | If the effect of any Force Majeure Event continues for a period exceeding thirty (30) days, the Authority may at any time thereafter give notice to the Recipient to terminate the Agreement with immediate effect without being liable to the Recipient in damages or compensation. |
16.3 | If a Force Majeure Event occurs, the Recipient or the Authority (as the case may be) shall for the duration of such Force Majeure Event be relieved of any obligation under the Agreement as is affected by the Force Majeure Event except that the provisions of the Agreement shall remain in force with regard to all other obligations under the Agreement which are not affected by the Force Majeure Event. |
16.4 | Failure of the Recipient’s Subcontractors or suppliers to perform their obligations shall not be regarded as events beyond the control of the Recipient. |
17. | GOVERNING LAW |
17.1 | The Agreement shall be deemed to be made in Singapore and shall be governed by and construed in accordance with the laws of the Republic of Singapore. |
18. | ESCALATION OF DISPUTES |
18.1 | In the event of any dispute, claim, question or disagreement arising out of or relating to the Agreement or its subject matter or formation (a “Dispute”), no party shall proceed to mediation or any form of dispute resolution unless the Parties have referred the Dispute to a senior officer of each Party (each, an “Officer”) who shall negotiate in good faith with the view to resolution of such Dispute. |
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18.2 | If such Dispute is not resolved by agreement between the Officers within thirty (30) days after the date of referral of the Dispute to the Officers, any Party may proceed to give the other Party written notice for mediation as contemplated in Clause 19 (Mediation). |
19. | MEDIATION |
19.1 | Notwithstanding anything in the Agreement, in the event of any Dispute and subject to Clauses 18 and 19.3, no Party shall proceed to any form of dispute resolution unless the Parties have made reasonable efforts to resolve the same through mediation in accordance with the mediation procedure of the Singapore Mediation Centre. The Parties shall be deemed to have made reasonable efforts in accordance with this Clause 19.1 if they have gone through at least one mediation session at the Singapore Mediation Centre. |
19.2 | A Party who receives a written notice for mediation from the other Party shall consent and participate in the mediation process in accordance with Clause 19. |
19.3 | The mediation session is to commence no later than ninety (90) days from the date of the written notice of mediation failing which either Party may proceed to dispute resolution. |
19.4 | Failure to comply with Clause 19.1 or 19.2 shall be deemed to be a breach of the Agreement. |
20. | DISPUTE RESOLUTION |
20.1 | Each Party irrevocably agrees that the courts of Singapore shall have exclusive jurisdiction to settle any Dispute. Each Party irrevocably submits to the jurisdiction of such courts. |
21. | DATA PROTECTION |
21.1 | The Recipient shall not, and shall ensure that all of its Personnel, and its Subcontractors and their Personnel do not, access, monitor, use or process personal data obtained or held in connection with the Agreement, except as reasonably necessary to perform its obligations under the Agreement. |
21.2 | The Recipient shall not, and shall ensure that all of its Personnel, and its Subcontractors and their Personnel shall not, disclose any personal data obtained or held in connection with the Agreement without the prior written consent of the Authority. Any request for the Authority’s consent under this Clause 21 must include an explanation of why the proposed disclosure is necessary for the purposes of fulfilling the Recipient’s obligations under the Agreement. |
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21.3 | The Recipient shall not cause or permit personal data obtained or held in connection with the Agreement to be processed, stored, accessed or otherwise transferred outside Singapore, or allow parties outside Singapore to have access to it, unless with the prior written consent of the Authority and subject to such conditions as the Authority may impose. Any request for the Authority’s consent under this Clause 21 shall include an explanation of why the proposed transfer is necessary for the purposes of fulfilling the Recipient’s obligations under the Agreement. If consent is granted, the Recipient shall provide a written undertaking that the personal data which is transferred outside Singapore will be protected to a comparable standard as it is protected under the PDPA. |
21.4 | The Recipient shall immediately notify the Authority when it becomes aware of a breach of Clauses 21.1 to 21.3 by itself or any Subcontractor. |
21.5 | The Recipient shall immediately notify the Authority as soon as it becomes aware that a disclosure of personal data may be required by law or any guideline issued by a regulatory authority or judicial order and cooperate at its own costs with the Authority’s reasonable requests and directions. |
21.6 | The Recipient shall ensure that all personal data obtained or held in connection with the Agreement and any copies thereof, regardless of the medium of storage, and which is no longer necessary for the purposes of its performance of the Agreement is delivered to the Authority within thirty (30) days. Any retention of personal data by the Recipient after such personal data is no longer necessary for the purposes of its performance of the Agreement, or without the written authorisation of the Authority, is a breach of the Agreement. No later than thirty (30) days from the termination or expiry of the Agreement, the Recipient shall provide a written confirmation that it is no longer in possession of any personal data obtained or held in connection with the Agreement or copies thereof, regardless of the medium of storage. |
21.7 | This Clause 21 shall survive the termination or expiry of the Agreement. |
22. | DATA SECURITY |
22.1 | The Recipient shall take all reasonable measures to ensure that personal data held in connection with the Agreement is protected against loss or damage (whether accidental or otherwise), and against unauthorised access, use, modification, disclosure or other misuse and that only authorised personnel shall have access to the data. |
22.2 | The Recipient shall, in respect of any personal data held by it in connection with the Agreement, comply with any reasonable requests, directions or guidelines of the Authority relating to the handling of personal data. |
22.3 | The Recipient shall immediately notify the Authority when it becomes aware of a breach of Clause 22.1 by itself or any Subcontractor. |
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22.4 | This Clause 22 shall survive the termination or expiry of the Agreement. |
23. | NOTICES |
23.1 | Any notice given pursuant to the Agreement shall be in writing and shall be delivered by hand, prepaid local post, or electronic mail to the other Party at the address as set out in Clause 23.3. |
23.2 | A notice shall be effective upon receipt and shall be deemed to have been received: |
(a) | at the time of delivery, in the case of delivery by hand; | |
(b) | two (2) days after posting, in the case of delivery by prepaid local post; | |
(c) | at the time of transmission, in the case of delivery by electronic mail. |
23.3 | Notices shall be sent to the following addresses: |
The Authority
Address: [ ] | |
Attention: | Ms. [ ] |
Email Address: | [ ] |
The Recipient
Address: | 2 Venture Drive #07-06 & 07 Vision Exchange Singapore 608526 |
Attention: | Dr. Siaw Tung Yeng |
Email Address: | [ ] |
23.4 | Either Party may change its details in Clause 23.3 by giving the other Party written notice of the change. |
24. | ENTIRE AND WHOLE AGREEMENT |
24.1 | The Agreement contains the entire and whole agreement between the Parties relating to the subject matter of the Agreement. |
25. | SURVIVAL |
25.1 | Any provision of the Agreement that expressly or by implication is intended to come into or continue in force on or after termination or expiry of the Agreement, including Clauses 2.3 to 2.5 (Obligations of the Recipient), 3 (Audit), 4.4 (Events of Default and Termination), 6 (Indemnity), 8 (Confidentiality and Security), 9 (Rights of Third Parties), 11 (Waiver), 12 (Cumulative Remedies), 13 (Set-Off), 14 (Gifts, Inducements and Rewards), 15 (Severability), 17 (Governing Law), 18 (Escalation of Disputes), 19 (Mediation), 20 (Dispute Resolution), 21 (Data Protection), 22 (Data Security), 23 (Notices) and 24 (Entire and Whole Agreement) above and this Clause 25 shall survive the termination or expiry of the Agreement. |
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Appendix III
LETTER OF ACCEPTANCE
To: The Government of the Republic of Singapore
Attention: Ms. [ ]
[ ]Medical Operation and Policy Centre (MOPC) Ministry of Health
LETTER OF ACCEPTANCE FUNDING FOR THE PROVISION OF TELEMEDICINE (TM) SERVICES, MOBILE MEDICINE (MM) SERVICES, CHASER SERVICES AND HOME MEDICAL & NURSING SERVICES AS DIRECTED BY THE AUTHORITY
We, MaNaDr Pte Ltd. (Company Registration No.: 201736361M), refer to the letter of grant dated 5 April 2023 (MOH file ref: MH 50:10/4-850) (including its appendices) (the “Letter of Grant”) from the Government of the Republic of Singapore (as represented by the Ministry of Health) to us.
We have read and understood the Letter of Grant (including its appendices) and accept and agree to all the terms and conditions contained therein.
Signed for and on behalf of MaNaDr Pte Ltd by its authorised signatory:
Signature: |
Name: | Dr. Siaw Tung Yeng |
Designation: | CEO, Founder |
Date: 5 April 2023 |
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Exhibit 14.1
Mobile-health Network Solutions
CODE OF BUSINESS CONDUCT AND ETHICS
(Adopted by the Board of Directors effective _______)
Mobile-health Network Solutions (together with its subsidiaries, the “Company”) is committed to conducting its business in accordance with the highest standards of business conduct and ethics, and applicable laws, regulations, rules and standards. This Code of Business Conduct and Ethics (this “Code”) is designed to help to foster a culture of honesty and accountability by setting forth principles that govern how the Company does business, guidance in dealing with ethical issues and mechanisms to ask questions and report concerns. In addition, this Code does not reflect all policies and procedures of the Company, certain of which are set forth in other policies that are available either in the Employee Handbook, as amended from time to time, or upon request directed to the Company’s Human Resources.
Applicability and Certification
This Code applies to all employees, officers and directors of the Company, including all employees, officers and directors of the Company’s subsidiaries (collectively referred to herein as “you”), and applies whether you are working at the Company’s premises or at any other location, including working remotely. In addition, the Company seeks to do business with agents, consultants, contractors, suppliers and other third parties who act in a manner consistent with this Code.
You are required to become familiar with this Code and conduct yourself honestly, ethically and in compliance with applicable laws, regulations and standards, and the Company’s policies. You are required to certify, upon joining the Company and annually thereafter, as to your compliance with this Code.
Asking Questions and Raising Concerns
There may be times when you are faced with a difficult situation not specifically addressed in this Code or other policy. If you are ever unsure about the right thing to do in a business situation, you should seek guidance. In addition, you have a responsibility to promptly report if you know of or suspect misconduct. Reporting concerns contributes to the Company’s ethical culture and helps the Company promptly address situations that, if left unaddressed, could adversely impact the Company and others.
The Company is committed to fostering an environment in which all employees are encouraged to ask questions and raise concerns about any potential, suspected or known violation that has occurred, may occur and/or is occurring of any applicable law, regulation, rule or standard, this Code or any other Company policy, free from fear of discrimination, harassment or other forms of retaliation.
Reports or concerns may be made confidentiality or anonymously through the Ethics Hotline or Reporting Email below established by the Company. These reporting mechanisms are designed to protect confidentiality and requested anonymity while providing the Company with information so that it can investigate reports of actual or suspected misconduct as appropriate.
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Reporting Concerns
Any person may report a concern in writing or orally by communicating it to one of the following:
● | Your manager | |
● | Head of Human Resources | |
● | For accounting, auditing and financial disclosure related concerns: Audit Committee, Mobile-health Network Solutions, 2 Venture Drive, #07-06/07 Vision Exchange, Singapore 608526, +65 6222 5223, Attention: Audit Committee Chair | |
● | Ethics Hotline: +65 6222 5223 | |
● | Reporting Email: cindy.toh@manadr.com |
If you submit a concern orally to your manager, Head of Human Resources, or the Audit Committee, you should request written acknowledgment that you have submitted a concern.
If you make your report to the Ethics Hotline or the Reporting Email or Head of Human Resources of the Company will take your initial report and handle gathering any follow-up information. You will be assigned a case number that will serve as confirmation of your submission and facilitate the providing of additional information if needed or requested. The initial report and any additional information are then communicated to the Company.
All reported concerns will be reviewed by Head of Human Resources, and concerns regarding accounting, auditing and financial disclosure will also be communicated to the chair of the Audit Committee.
Confidential Reporting
You may request that your report of a concern through any of the channels listed above be treated confidentially subject to the Company’s interests in properly investigating the concern and/or taking other action to protect the health and safety of individuals and the Company’s interests.
Anonymous Reporting
You may also report concerns anonymously to:
● | Your manager | |
● | Head of Human Resources | |
● | For accounting, auditing and financial disclosure related concerns: Audit Committee, Mobile-health Network Solutions, 2 Venture Drive, #07-06/07 Vision Exchange, Singapore 608526, +65 6222 5223, Attention: Audit Committee Chair | |
● | Ethics Hotline: +65 6222 5223 | |
● | Reporting Email: cindy.toh@manadr.com |
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If you submit a concern anonymously, please ensure that you provide sufficiently detailed information to enable the concern to be properly investigated (including, for example, details relating to the facts underlying the concern and the person(s) involved).
If you choose to make your report anonymously to the Ethics Hotline or the Reporting Email, Head of Human Resources of the Company will take your initial report and handle gathering any follow-up information. The initial report and any additional information are then communicated to the Company without disclosing any information about you. You will be assigned a case number that will serve as confirmation of your submission and facilitate the providing of additional information if needed or requested.
All anonymously reported concerns will be reviewed by Head of Human Resources, and concerns regarding accounting, auditing and financial disclosure will also be communicated to the chair of the Audit Committee.
While the Company encourages internal reporting to the Company of concerns, nothing in this Code restricts or limits your ability to report concerns directly to a regulatory agency.
Protection for Reporting Concerns / Anti-Retaliation Policy
Certain laws and regulations prohibit retaliatory action against employees who report potential wrongdoing in certain circumstances. The Company prohibits retaliation against employees for reporting concerns in good faith or for participating in an investigation. Making a report in “good faith” means that you have provided all the information you have and that you reasonably believe there has been a possible violation of applicable law, regulation, rule or standard, this Code or any other Company policy, even if your report turns out to be unsubstantiated. Retaliation includes any unfavorable job action (such as termination, demotion, suspension, discipline, reduced hours, transfer or adverse compensation action), threat, harassment or other discrimination in the terms and conditions of employment.
Retaliation is a violation of this Code and may also violate the law. Any retaliation should be reported in accordance with this Code.
Accountability for Code Violations
Because this Code is a key component of the Company’s compliance program and plays an integral role in safeguarding the Company’s ethical culture and reputation, Code violations may result in serious disciplinary action—up to and including termination where permitted by law. In appropriate cases, the Company may also refer misconduct to the proper authorities for prosecution. This may subject the individuals involved to civil and/or criminal penalties.
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Waivers
Any waiver of this Code for an officer or a director must be granted in writing by the Audit Committee and shall be publicly disclosed in accordance with applicable law and regulations. Waivers for other employees must be granted in writing by the Head of Human Resources or its designee.
Refer to the Policy for Reporting Concerns and the Employee Handbook for more information about asking questions and reporting concerns, including confidential reporting and investigations.
MAINTAINING A SAFE AND FAIR WORKPLACE
Fair Employment
The Company is committed to providing a work environment in which each individual is treated with fairness and respect and without discrimination or harassment. This applies to recruiting, hiring, compensation, benefits, training, termination, promotions or any other terms and conditions of employment.
Do:
● | Seek out skilled individuals with integrity from a diverse range of cultural and educational backgrounds | |
● | Promote a workplace that allows each employee, officer or director the opportunity to develop his or her full potential to strengthen the Company | |
● | Make merit-based employment decisions | |
● | Provide reasonable accommodations to qualified individuals in all aspects of the employment process | |
● | Abide by wage and hour laws and regulations in the locations where the Company does business |
Do Not:
● | Discriminate against Company or non-Company personnel with whom the Company has a business relationship with regard to race, color, religion, disability, sexual orientation, gender, gender identity and expression, national origin, citizenship status, military service or reserve or veteran status, marital status, age or other characteristic protected by law | |
● | Employ children or forced labor or do business with third parties who do |
Non-Harassment
You must not harass others or create or allow an unprofessional, offensive or hostile work environment. Harassing behavior may be sexual or non-sexual and can include, for example, epithets, slurs, stereotyping, insulting jokes, unwelcome sexual advances or physical contact, offensive or sexually suggestive comments, touching, requests for sexual favors or the display or circulation of offensive or degrading images, text or other material.
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Safe and Healthy Workplace
Employees, officers and directors of the Company each have a responsibility to the Company and to each other to promote a safe and secure workplace for all employees. It is your responsibility to know and follow the safety policies, procedures and local laws that apply to your job. You must ensure work areas are secured and free from hazards and workplace violence and report accidents, injuries and unsafe equipment, practices or conditions.
Employees, officers and directors of the Company must not use, possess or be under the influence of alcohol, illegal drugs or any substance that could interfere with safely performing your work. While alcohol may be served at certain Company functions, you are reminded to consume at reasonable limits and to maintain a high level of professionalism at such functions.
You must not possess, use or distribute pornographic, racist, sexist or otherwise offensive materials on the Company’s property or use the Company’s property or networks to obtain or view such information.
Refer to the Employee Handbook for more information about maintaining a safe and fair workplace and other employment policies.
ACTING IN THE COMPANY’S BEST INTERESTS
Conflicts of Interest
A conflict of interest occurs when your personal interests interfere, or appear to interfere, with the interests of the Company as a whole. Conflicts of interest can make it difficult for personnel to perform their jobs objectively and effectively. In general, you must avoid, where possible, any interest, investment or association in which a conflict of interest, or the appearance of a conflict, might arise.
This Code requires the ethical handling of conflicts that cannot be avoided. Any situation, transaction or relationship that you are involved in that may give rise to an actual, apparent or potential conflict of interest must be disclosed in advance to and, if appropriate, approved by (a) for officers and directors, the Audit Committee and (b) for other employees, the Head of Human Resources or its designee.
Examples of Conflicts of Interest
● | Directly supervising a family member | |
● | Competing with the Company | |
● | Using Company property, information or position for personal gain | |
● | Engaging in a close personal relationship with someone in your department | |
● | Overseeing a customer or supplier in which a family member is the key contact/decision maker | |
● | Receiving a gift from a third party while negotiating, or during the course of a contractual relationship, on the Company’s behalf |
See also the “Gifts and Entertainment” section below.
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Corporate Opportunities
You are required to advance the Company’s legitimate business interests whenever possible. This means that you must not take for yourself any business opportunities that you discover through the use of Company property or information or through your position with the Company, unless disclosed in advance to and, if appropriate, approved by (a) for officers and directors, the Audit Committee and (b) for other employees, the Head of Human Resources or its designee.
Political and Charitable Contributions
The Company encourages giving personal time and funds to support the political candidates and charitable causes of your choice. However, employees, officers and directors of the Company cannot use Company resources or the Company’s name when making contributions to, or involving themselves in, such activities without first obtaining approval. Payments of corporate funds to any political party, candidate or campaign may be made only if permitted under applicable law and approved in writing in advance by the Head of Human Resources. Payments of corporate funds to any charitable organization or cause may be made only if approved in advance by the Head of Human Resources.
Refer to the Related Person Transaction Policy and the Employee Handbook for more information about conflicts of interests and outside employment.
PROTECTING COMPANY ASSETS AND INFORMATION
Refer to the Employee Handbook for more information regarding the software code of ethics, computer and security systems, and your obligations related to the Company’s assets and information.
Employees, officers and directors of the Company must ensure the proper and efficient use of Company property and protect it from theft, damage, loss and misuse. “Company property” includes the Company’s physical and intangible assets, such as facilities, equipment, vehicles, software, computers, funds and supplies, as well as the Company’s network and computer systems; power and energy sources; ideas and innovations; and confidential information and data.
Technological Equipment
Employees, officers and directors of the Company must use the Company’s technological equipment for business purposes and to serve the Company’s interests. This equipment includes computers and related equipment, smart phones and tablets, software, information technology systems, networks and storage media. The Company owns or has been licensed to use the technology you use in the Company’s businesses, including hardware, software and computer systems. You are responsible for taking proper security precautions when using the Company’s networks and information technology systems. Be sure to secure your computers, phones, tablets and other devices properly when unattended. Before sending information considered sensitive or vulnerable, you should password protect or encrypt the information.
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Confidential Information
Confidential information is an important Company asset. Confidential information includes all non-public information that might be of use to competitors or harmful to the Company or other companies with which the Company does business, if disclosed. This includes all information, in any format, that the Company has a legitimate business interest in protecting. Confidential information includes technology, products, concepts, valuable ideas, trade secrets, technical information, strategies, business and product plans, customer and employee information, as well as other non-public information about the Company (whether or not material to the Company) or that might be of use to competitors or harmful to the Company, its customers, suppliers or other stakeholders if disclosed. Confidential information may also include information received from or relating to third parties with which the Company has or is contemplating a relationship, such as current or potential customers, operators, suppliers or strategic partners, and, in addition, may consist of the fact of such relationship or contemplation of such relationship.
You must maintain the confidentiality of information entrusted to you by the Company or companies with which the Company does business, except when disclosure is authorized or legally mandated.
The obligation to treat information as confidential does not end when an individual leaves the Company. Upon separation from the Company, everything that belongs to the Company, including all documents and other materials containing confidential information, must be returned.
Do:
● | Carefully guard against disclosure of confidential information to people outside the Company (including but not limited to family members and business or social acquaintances) | |
● | Provide confidential information only to co-workers or outside third parties who have a need to know for business purposes or where such disclosure is legally mandated under the guidance and direction of the Head of Human Resources | |
● | Use nondisclosure agreements when you need to disclose confidential information to outside third parties | |
● | Use confidential information received from outside third parties only for the specific purpose for which it was disclosed and consistent with the terms of the applicable nondisclosure agreement | |
● | Comply with applicable privacy, information security and data protection laws that govern the handling of private and sensitive information (see the “Data Privacy and Protecting Employee Data” section below for more information) | |
● | Return all confidential information in your possession when you leave the Company, wherever that information is located |
Do Not:
● | Use confidential information for your own personal benefit or the personal benefit of persons inside or outside the Company | |
● | Discuss confidential information in places (public or otherwise) where outside parties can overhear you such as taxis, public transportation, elevators or restaurants | |
● | Ask new employees for confidential information about, or acquired at or from, their former employer |
In addition, if you have signed a confidentiality agreement with the Company, refer to that agreement for more information regarding
your specific obligations in relation to confidential information.
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Intellectual Property
Patents, copyrights and trademarks are legal terms that define when an invention, product, written work or name is owned by an individual or company and use of these by others is prohibited without express permission. Ownership rights in patents, copyrights and trademarks are granted on a country-by-country basis. You may sometimes develop ideas, processes and technology on the Company’s behalf or in the scope of your work for the Company that will be protected by patents, copyrights, trademarks or trade secret laws. This “intellectual property” usually belongs to the Company, depending on the situation. As required by law and the terms of your employment, each of you agrees to assign the rights to any such intellectual property to the Company.
Do:
● | Obtain express permission from the owner before using patents, copyrights and trademarks belonging to others | |
● | Obtain authorization from the author or owner before copying or using proprietary data, product drawings, user manuals, names or software created by someone else | |
● | Communicate with the IT Department prior to downloading any software to your Company computer |
Do Not:
● | Plagiarize or make inappropriate use of articles or materials published by others | |
● | Download, open or use computer software for which there are no software licensing agreements, which could violate copyright laws or that does not have a business purpose |
Data Privacy and Protecting Employee Data
The Company protects personal data through organizational and technical measures including IT security tools, restrictions on access to the data and physical security measures to help prevent unauthorized or unlawful access, disclosure, loss, destruction or damage. The Company accesses and uses personal data only for legitimate business purposes and maintains appropriate access controls and use limitations. Only those individuals who need the data to accomplish a business objective should have access to personal data and only for as long as they need it to accomplish the objective.
You are required to follow all applicable privacy, information security and data protection laws that govern the handling, use and retention of personal data, which means any information that, standing alone or in connection with other data, could be used to identify the individual to whom the information relates. Some information is particularly sensitive personal data, such as health information, government identification numbers and compensation data, and is subject to even further protections.
Any collection, storage, processing, transfer, sharing or use of personal data must be done in a manner that protects such data from inadvertent or unauthorized access, use, disclosure, loss, destruction or damage, and any authorized disclosure or use must be in compliance with local laws.
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Electronic Communications
The Company provides resources such as computers, phones and other physical assets to enable you to conduct business. While you are permitted limited personal use of these assets, such personal use should not detract from the performance of your duties or violate any Company policy or applicable law.
You must not use these resources to improperly disclose or misuse the Company’s confidential information, conduct illegal activities, access or download obscene or sexually explicit material, or communicate discriminatory, harassing or threatening messages. You have no expectation of personal privacy in connection with the use of Company resources unless otherwise permitted by law. The Company reserves all rights, to the fullest extent permitted by applicable law, to monitor and review any messages, internet browsing history and other information sent, received or viewed using Company resources.
Do:
● | Keep personal data secure and confidential at all times | |
● | Maintain accuracy of personal data | |
● | Only collect data that is relevant to the purpose for which it is collected |
Do Not:
● | Share personal data with anyone who does not have a relevant and legitimate business responsibility related to the data | |
● | Retain personal data longer than necessary to complete business objectives or meet legal requirements | |
● | Transfer data outside the country in which it was collected without guidance from the Company’s Human Resources unless another person has been designated by the Board) |
Records Management
In the course of its business, the Company produces and receives large numbers of records, both paper and electronic. You are required to comply with the policy regarding how long you should retain records and when and how you should dispose of them. The Company’s policy is to identify, maintain, safeguard and destroy or retain, as applicable, all records in the Company’s possession on a systematic and regular basis.
If you are notified that documents and records in your possession are relevant to any pending or contemplated litigation or an investigation or audit, do not alter, delete or destroy the records, and follow the guidelines set forth in the notification. This may require you to affirmatively preserve from destruction all relevant records that, without intervention, would automatically be destroyed or erased (such as emails and voicemail messages). Destruction of such records, even if inadvertent, could seriously prejudice the Company.
Refer to the Employee Handbook for more information about maintaining books and records and other record management policies.
Responding to Inquiries
To ensure that the Company speaks with one voice and has a consistent message, only designated spokespersons within the Company are authorized to make certain statements to the public on behalf of or about the Company. If you are contacted by anyone outside the Company seeking information about the Company and you have not been expressly authorized by the Chief Executive Officer or the Chief Financial Officer to provide such information, you should refer the request to the Chief Financial Officer or Investor Relations. Requests for information from regulators or the government should be referred to the Head of Human Resources.
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COMPLY WITH APPLICABLE LAWS, REGULATIONS AND RULES
Accurate Books and Records
All Company documents must be completed accurately and in a timely manner, including all personnel, time, safety, travel and expense reports. When applicable, documents must be properly authorized. You must not make false or misleading entries, records or documentation.
The Company’s financial activities must be recorded in compliance with all applicable laws and accounting practices, and the Company’s internal controls, to enable full, fair, accurate, timely and understandable disclosures.
Refer to the Employee Handbook for more information about maintaining books and records and other record management policies.
Insider Trading
You are generally prohibited by Company policy and by law from buying or selling publicly traded securities for any purpose at a time when you are in possession of “material nonpublic information.” This conduct is known as “insider trading.” Passing such information on to someone who may buy or sell securities – known as “tipping” – is also illegal. Information is considered “material” if there is a substantial likelihood that a reasonable investor would consider it important in making a decision to buy, sell or hold a security.
Under the Company’s Insider Trading and Confidentiality Policy, consultants, officers, directors and certain employees are also subject to blackout periods during which they are generally prohibited from buying or selling Company stock or other derivative Company securities.
Examples of Material Information
● | Financial results or internal financial information | |
● | A significant expansion or curtailment of operations | |
● | Major changes in lines of business, including significant new services or products | |
● | Significant financing transactions or borrowings, such as a significant drawdown on a credit facility or a securities offering | |
● | Matters relating to cash dividends, stock repurchases or stock splits | |
● | Major transactions, such as mergers, tender offers or acquisitions of other companies, or major purchases or sales of assets | |
● | Change in the auditor or a significant notification from an auditor | |
● | Major changes in directors or senior management | |
● | Major litigation, expected major litigation and related developments | |
● | Significant internal or external investigations, including government investigations, and related developments |
See the Company’s Insider Trading and Confidentiality Policy for more information.
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Anti-Money Laundering
Money laundering is the process by which individuals or entities move criminal funds through the financial system in order to hide traces of their criminal origin or otherwise try to make these funds look legitimate. The Company is committed to complying fully with all applicable anti-money laundering laws.
Examples of Money Laundering “Red Flags”
● | Payments made in currencies other than those specified in the invoice | |
● | Attempts to make large payments in cash (i.e., physical currency) | |
● | Payments made by or to a third party not involved in the contract or an account other than the normal business relationship account | |
● | Requests or attempts to make payments for each invoice or group of invoices through multiple forms of payment | |
● | Requests to make an overpayment |
Fair Dealing
The Company depends on its reputation for quality, service and integrity. You are required to deal truthfully with the Company’s customers and business partners, without manipulation, concealment, abuse of privileged information, misrepresentation of material facts or any other unfair dealing practice. You must not make false or misleading statements about the Company’s competitors or their products or services.
Bribery and Corruption
Offering or paying bribes to win business or obtain an unfair advantage is unacceptable no matter where the Company is doing business, even if business is lost or difficulties are encountered as a result (for example, delays in obtaining permits or licenses). Offering, paying, accepting or soliciting bribes, kickbacks, payoffs, inducements and other corrupt payments may expose individuals and the Company to civil and/or criminal liability.
A “bribe” is anything of value offered, promised or given directly or indirectly to improperly influence the actions of a third party in order to obtain or retain business or gain a business advantage. Bribes may include money in any form (including cash equivalents), gifts, travel or other expenses, entertainment or other hospitality, below-market loans, discounts, favors, business or employment opportunities, political or charitable contributions, or any direct or indirect benefit. The Company does not permit “facilitating payments” to expedite the routine performance of legitimate duties, except in extraordinary circumstances as approved by the Head of Human Resources.
You must not engage in corruption, extortion or embezzlement in any form with any third party, public or private, whether offered, paid, accepted or solicited directly by the Company’s employees or indirectly through third parties. You must not use agents, consultants, independent contractors or other third parties to do indirectly what you cannot do directly under this Code or applicable laws, rules and regulations.
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Gifts and Entertainment
Gifts and entertainment can foster positive business relationships but may create an inappropriate expectation or feeling of obligation or give rise to a conflict of interest. Care must be exercised when giving gifts or extending hospitality to avoid being perceived as trying to influence a decision or outcome. You are required to understand and abide by this Code and the law when offering or accepting any gifts or entertainment from customers, suppliers, other business partners, government officials or their family members.
You are required to obtain approval from the Head of Human Resources when offering or accepting gifts or entertainment (a) of any amount to any government official and (b) exceeding $200 in value.
When working with potential or existing government customers, it is critical that you abide by the various laws, regulations and rules that apply to government contract work. These rules are often much more strict and complex than those that govern the Company’s sales to commercial customers. If you work on projects involving government agencies, it is your responsibility to know and follow the particular rules that apply to those customers and their projects.
Do:
● | Only accept unsolicited gifts and entertainment that are customary and commonly accepted, not excessive in value and given and accepted without an express or implied understanding that you are in any way obligated by your acceptance of the gift or entertainment | |
● | Ensure that any gifts and entertainment offered by the Company are in connection with Company business, in good taste, customary and commonly accepted, and not excessive in value |
Do Not:
● | Accept any gifts or entertainment that could influence or be perceived to influence their business decisions on behalf of the Company | |
● | Request or ask for gifts or entertainment from people doing business with the Company | |
● | Accept any gift of cash or cash equivalents (including gift certificates, securities, below-market loans, etc.) in any amount | |
● | Offer any gift or entertainment that would violate the other party’s gift and entertainment policy |
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Competition Laws
Competition laws are designed to promote a free and open marketplace by prohibiting arrangements with competitors that restrain trade. You must not enter into any anti-competitive arrangements, such as agreements with competitors that affect prices, costs, terms or conditions of sale, the markets in which you and/or they will compete, or customers or suppliers with whom you and/or they will do business.
Trade Controls
You are required to comply with all applicable trade laws and economic sanctions laws and regulations. These laws generally apply to the import, export and transfer of certain products and technology by U.S. companies.
Environment and Human Rights
The Company is committed to creating economic value for shareholders and customers through sustainable practices that protect the long-term well-being of the environment, the Company’s employees and the communities in which the Company operates.
You are required to comply with all applicable environmental laws, regulations and standards, and minimize any adverse impact on the environment. You must also endeavor to conserve natural resources and energy, and reduce or eliminate waste and the use of hazardous substances.
To enable the Company to conduct business in a way that respects and upholds fundamental human rights, you are required to comply with laws, regulations and standards that relate to human rights topics such as equal employment opportunities, freedom of association, child and forced labor, human trafficking and health and safety. See the “Maintaining a Safe and Fair Workplace” section above for more information.
Neither the adoption of this Code nor any description of its provisions constitutes a representation of full compliance with this Code. This Code does not, in any way, constitute an employment contract or an assurance of continued employment. This Code is not intended to create any third-party rights and should not be construed to do so.
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A. CERTIFICATION
I hereby certify that I have received and read the Mobile-health Network Solutions Code of Business Conduct and Ethics (the “Code”). I understand the Code’s contents, am in compliance with the Code and agree to continue to comply with the Code.
Signature | |
Printed Name | |
Title | |
Date |
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Exhibit 19.1
Mobile-health Network Solutions
INSIDER TRADING AND CONFIDENTIALITY POLICY
As adopted by the Board of Directors , effective [●]
This Policy confirms procedures which consultants, advisors, employees, officers and directors of Mobile-health Network Solutions (the “Company”) must follow. This Policy is subject to modification from time to time as the Board deems necessary or advisable.
1. Prohibition Against Trading on Material Nonpublic Information
During the course of your service at the Company, you may become aware of material nonpublic information. It is difficult to describe exhaustively what constitutes “material” information, but you should assume that any information, positive or negative, which might be of significance to an investor, as part of the total mix of available information, in determining whether to purchase, sell or hold Company stock or other derivative Company securities would be material. Information may be significant for this purpose even if it would not alone determine the investor’s decision. Examples of “material” information include:
● | financial condition and results or internal financial information which departs in any way from what the market would expect | |
● | a significant expansion or curtailment of operations | |
● | changes in lines of business, including significant new services or products, sales, earnings or dividends | |
● | significant financing transactions, or borrowings, such as a significant drawdown on a credit facility or a securities offering | |
● | stock repurchases, stock splits or other transactions relating to Company stock | |
● | major transactions, such as mergers, tender offers or acquisitions of other companies, or dispositions of assets | |
● | change in the auditor or a significant notification from an auditor | |
● | major changes in directors or senior management or control | |
● | changes in securities or in the security for registered securities | |
● | defaults upon senior securities | |
● | material increases or decreases in the amount outstanding of securities or indebtedness | |
● | the results of the submission of matters to a vote of security holders | |
● | transactions with directors, officers or principal security holders | |
● | the granting of options or payment of other compensation to directors or officers | |
● | major litigation, expected major litigation and related developments or regulatory developments | |
● | significant internal or external investigations, including government investigations, and related developments | |
● | significant process or product developments | |
● | gain or loss of a major customer or supplier | |
● | major transactions with other companies or entities, such as joint ventures or licensing agreements | |
● | the extent to which external events, including but not limited to pandemics, have had or will have a material impact on the Company’s operating results |
● | a major cybersecurity incident | |
● | bankruptcy or receivership | |
● | any other information which the Company deems of material importance to security holders. |
MOBILE-HEALTH NETWORK SOLUTIONS | INSIDER TRADING AND CONFIDENTIALITY POLICY |
Note that this list is merely illustrative and not exhaustive.
“Nonpublic” information is any information which has not yet been disclosed generally to the marketplace. Information received about a company under circumstances which indicate that it is not yet in general circulation should be considered nonpublic. As a rule, you should be able to point to some fact to show that the information is generally available; for example, disclosure within a report filed by the Company with the U.S. Securities and Exchange Commission, issuance of a press release by the Company or announcement of the information in The Wall Street Journal or other news publication. Even after the Company has released information to the press or the information has been reported, at least one full Trading Day must elapse before you trade in Company stock. For the purposes of this policy, a “Trading Day” shall mean any day on which the Nasdaq Stock Market is open for trading. For example, if the Company issues a press release containing material information at 6:00 p.m. on a Tuesday, and the Nasdaq Stock Market is open for trading on Wednesday, persons subject to this policy shall not be permitted to trade in Company stock until Thursday. If the Company issues a press release containing material information at 6:00 p.m. on a Friday, and the Nasdaq Stock Market is open for trading on Monday, persons subject to this policy shall not be permitted to trade in Company stock until Tuesday.
If you are aware of material nonpublic information regarding the Company you are prohibited from trading in Company stock, unless such trade is made pursuant to a properly qualified, adopted and submitted Rule 10b5-1 trading plan. Rule 10b5-1 trading plans are discussed in Section 2 of this Policy. You also are prohibited from giving “tips” on material nonpublic information, that is directly or indirectly disclosing such information to any other person, including family members and relatives, so that they may trade in Company stock. Furthermore, if you learn material nonpublic information about another company with which the Company does business, such as a supplier, customer or joint venture partner, or you learn that the Company is planning a major transaction with another company (such as an acquisition), you must not trade in the securities of the other company until such information has been made public for at least one full Trading Day.
The policy against trading securities when in possession of material nonpublic information applies to all consultants, advisors, employees, officers, and directors of the Company as well as their family members. For purposes of this Policy, a “family member” includes a person’s spouse, parents, children, siblings, mothers and fathers-in-law, sons and daughters-in-law, brothers and sisters-in-law, and anyone (other than domestic employees) who shares such person’s home. It also applies to former consultants, advisors, employees, officers, and directors and their family members.
In addition, you and your family members may not, under any circumstances, trade options for, or sell “short,” Company stock.
MOBILE-HEALTH NETWORK SOLUTIONS | INSIDER TRADING AND CONFIDENTIALITY POLICY |
2. Rule 10b5-1 Trading Plans
Rule 10b5-1 under the Securities Exchange Act of 1934 (the “Exchange Act”) provides an affirmative defense against a claim of insider trading if an insider’s trades are made pursuant to a written plan that was adopted in good faith at a time when the insider was not aware of material nonpublic information. It is the Company’s policy that employees and directors may make trades pursuant to a Rule 10b5-1 plan provided that (i) such plan meets the requirements of Rule 10b5-1, (ii) such plan was adopted at a time when the employee or director would otherwise have been able to trade under Section 3 of this policy and (iii) adoption of the plan was expressly authorized by a member of the Company’s Human Resources. Note that trades made pursuant to Rule 10b5-1 plans by executive officers and directors must still be reported to the Head of Human Resource pursuant to the second paragraph of Section 4 below.
3. Permitted Trading Periods for Non-Rule 10b5-1 Trades
Company executive officers and directors and all members of the finance or human resources departments, and their family members may only trade Company securities during the period commencing one full Trading Day following a release of quarterly results and ending on the date that is ten Trading Days prior to the end of the subsequent quarter. Nonetheless, as mentioned above, no trade of Company securities may be made during these periods if the person covered by this policy possesses material nonpublic information which has not been disseminated in the public market for at least one full Trading Day.
From time to time, upon prior notice to the persons affected, the Company may impose event-specific special blackout periods during which some or all Company executive officers and directors are prohibited from trading in Company securities.
The trading restrictions set forth in this Section 3 do not apply to any trades made pursuant to properly qualified, adopted and submitted Rule 10b5-1 trading plans.
4. Preclearance; Reporting Trades
In addition to complying with the prohibition on trading during scheduled and event-specific special blackout periods, the Company’s executive officers and directors must first obtain pre-clearance from the Company’s Head of Human Resources before engaging in any transaction in securities of the Company. A request for pre-clearance should be submitted to the Head of Human Resources at least 48 hours in advance of the proposed transaction. If a proposed transaction receives pre-clearance, the pre-cleared trade must be effected within 48 hours of receipt of pre-clearance. If the person becomes aware of material nonpublic information before the trade is executed, the pre-clearance is void and the trade must not be completed. Transactions not effected within the time limit become subject to pre-clearance again. If a person seeks pre-clearance and permission to engage in the transaction is denied, then he or she should refrain from initiating any transaction in securities of the Company, and should not inform any other person of the restriction.
We require that all executive officers and directors submit to the Company’s the Head of Human Resources a copy of any trade order or confirmation relating to the purchase or sale of Company securities within one business day of any such transaction. This information is necessary to enable us to monitor trading by executive officers and directors and ensure that all such trades are properly reported. Your adherence to this policy is vital to your protection as well as the Company’s.
MOBILE-HEALTH NETWORK SOLUTIONS | INSIDER TRADING AND CONFIDENTIALITY POLICY |
5. Hedging Transactions
Hedging transactions may insulate you from upside or downside price movement in Company stock which can result in the perception that you no longer have the same interests as the Company’s other stockholders. Accordingly, you and your family members may not enter into hedging or monetization transactions or similar arrangements with respect to Company stock, including the purchase or sale of puts or calls or the use of any other derivative instruments.
6. Margin Accounts and Pledging
Securities held in a margin account or pledged as collateral for a loan may be sold without your consent by the broker if you fail to meet a margin call or by the lender in foreclosure if you default on the loan. A margin or foreclosure sale that occurs when you are aware of material nonpublic information may, under some circumstances, result in unlawful insider trading. Because of this danger, you may not hold Company securities in a margin account nor pledge Company securities as collateral for a loan.
7. Duration of Policy’s Applicability.
This policy continues to apply to your transactions in Company stock or the stock of other public companies engaged in business transactions with the Company even after your employment or directorship with the Company has terminated. If you are in possession of inside information when your relationship with the Company concludes, you may not trade in Company stock or the stock of such other company until the information has been publicly disseminated or is no longer material.
* * *
THESE ARE VERY SERIOUS MATTERS. INSIDER TRADING IS ILLEGAL AND CAN RESULT IN JAIL SENTENCES AS WELL AS CIVIL PENALTIES, INCLUDING TRIPLE DAMAGES. EMPLOYEES WHO VIOLATE THIS POLICY MAY BE SUBJECT TO DISCIPLINARY ACTION BY THE COMPANY, INCLUDING DISMISSAL FOR CAUSE. IF YOU HAVE ANY QUESTION OR DOUBT ABOUT THE APPLICABILITY OR INTERPRETATION OF THIS POLICY OR THE PROPRIETY OF ANY DESIRED ACTION, PLEASE SEEK CLARIFICATION FROM OUR CHAIRMAN AND CHIEF EXECUTIVE OFFICER OR HEAD OF HUMAN RESOURCES. PLEASE ALSO SEE FREQUENTLY ASKED QUESTIONS ATTACHED HERETO AS EXHIBIT A. DO NOT TRY TO RESOLVE UNCERTAINTIES ON YOUR OWN.
MOBILE-HEALTH NETWORK SOLUTIONS | INSIDER TRADING AND CONFIDENTIALITY POLICY |
ACKNOWLEDGMENT
The undersigned acknowledges that he/she has read this Insider Trading Policy and agrees to comply with the restrictions and procedures contained herein.
_____/______/_____ | |||
Signature Date | Date | ||
Name (Please Print) |
MOBILE-HEALTH NETWORK SOLUTIONS | INSIDER TRADING AND CONFIDENTIALITY POLICY |
Exhibit A
Frequently Asked Questions
1. | What is insider trading? |
A: Insider trading is the buying or selling of stocks, bonds, futures, or other securities by someone in possession of material, nonpublic information. Insider trading also includes trading in options (puts and calls) the price of which is linked to the underlying price of a company’s stock. It does not matter how many shares you buy or sell, or whether it has an effect on the stock price – if you have material, nonpublic information and you trade, you have broken the law.
2. | Why is insider trading illegal? |
A: If company insiders are able to use their confidential knowledge to their financial advantage, other investors would not have confidence in the fairness and integrity of the marketplace. Requiring those who have such information to disclose (the information to the public) or abstain (from trading) ensures an even playing field.
3. | What is material, nonpublic information? |
A: Information is material if it would influence a reasonable investor to buy or sell a stock, bond or other security. This could mean many things – financial results, potential mergers, major contracts, etc.1 Information is nonpublic if it has not yet been released and disseminated to the public.
4. | Who can be guilty of insider trading? |
A: Anyone who buys or sells a security while in possession of material, nonpublic information. It does not matter if you are not an executive officer or director, or even if you do not work at Company– if you know something material about the value of a security that not everyone else does, regardless of who you are, you can be found guilty of insider trading.
5. | Does Company have an insider trading policy? |
A: Yes.
6. | What if I do not work in the U.S.? |
A: There is no difference. The policy and law applies to you. Because our Class A Ordinary Shares trade on a United States securities exchange, the insider trading laws of the U.S. apply. The U.S. Securities and Exchange Commission (the SEC) (a U.S. government agency in charge of investor protection) and the Financial Industry Regulatory Authority (FINRA) (a private regulator that oversees U.S. exchanges) routinely investigate trading in a company’s securities conducted by internationally-based individuals and firms. In addition, as a Company employee, our policies apply to you no matter where in the world you work.
1 Consider adding types of material information specific to the company’s business.
MOBILE-HEALTH NETWORK SOLUTIONS | INSIDER TRADING AND CONFIDENTIALITY POLICY |
7. | What if I don’t buy or sell anything, but I tell someone else the information and they buy or sell? |
A: That is called “tipping.” You are the “tipper” and the other person is called the “tippee”. If the tippee buys or sells based on that material, nonpublic information, you might still be guilty of insider trading. In fact, if you tell family members who tell others and those people then trade on the information, those family members might be guilty of insider trading too. As a result, you may not discuss material, non-public information about Company with anyone outside Company, including spouses, family members, friends, or business associates. This includes anonymous discussion on the Internet about Company or companies with which Company does business.
8. | What if I don’t tell them the information itself, I just tell them whether they should buy or sell? |
A: That is still tipping, and you can still be found guilty of insider trading. According to our policies, you may never recommend to another person that they buy, hold or sell our ordinary shares or any derivative security related to our ordinary shares.
9. | What are the penalties if I trade on inside information, or tip off someone else? |
A: Anyone found liable in a civil case for trading on inside information may need to pay the U.S. government an amount equal to any profit made or any loss avoided and may also face a penalty of up to three times this amount. Persons found liable for tipping inside information, even if they did not trade themselves, may face a penalty of up to three times the amount of any profit gained or loss avoided by everyone in the chain of tippees. In addition, anyone convicted of criminal insider trading can face prison terms and additional fines.
10. | What is “loss avoided”? |
A: If you sell an ordinary share or a related derivative security before the negative news is publicly announced, and as a result of the announcement the stock price declines, you have avoided the loss caused by the negative news.
11. | Am I restricted from trading securities of any companies except Company (for example a customer or competitor of Company)? |
A: Yes. U.S. insider trading laws restrict everyone from trading in a company’s securities based on material nonpublic information about that company, regardless of whether the person is directly connected with that company. Therefore, if you obtain material nonpublic information about another company, you should not trade in that company’s securities. You should be particularly conscious of this restriction if, through your position at Company, you sometimes obtain sensitive, material information about other companies and their business dealings with Company.
12. | So if I do not trade Company securities when I have material nonpublic information, and I don’t “tip” other people, I am in the clear, right? |
A: Not necessarily. Even if you do not violate U.S. law, you may still violate our policies. Our policies are stricter than the law requires, so that we and our employees can avoid even the appearance of wrongdoing. Therefore, please review the entire policy carefully.
MOBILE-HEALTH NETWORK SOLUTIONS | INSIDER TRADING AND CONFIDENTIALITY POLICY |
13. | So when can I buy or sell my Company securities? |
A: According to our policies, if you have material, nonpublic information, you may not buy or sell our ordinary shares until such material nonpublic information has been disseminated in the public market for at least one full Trading Day after that information is released or announced to the public. At that point, the information is considered public. Even if you do not have material, nonpublic information, you may not trade in our ordinary shares during any trading “blackout” period. (A list of current blackout periods can be obtained from the Company’s the Head of Human Resources or their designee and additional trading blackout periods may be announced by email.)
14. | If I have an open order to buy or sell Company securities on the date the trading window closes, my broker will cancel the open order and won’t execute the trade, right? |
A: No. If you have any open orders at the time the trading window closes, it is your responsibility to cancel these orders with your broker. If you have an open order and it executes after the trading window closes, it is a violation of our insider trading policy and may also be a violation of the insider trading laws.
15. | Am I allowed to trade derivative securities of Company? Or, short Company ordinary shares? |
A: No. Under our policies, you may not trade in derivative securities related to our ordinary shares, which includes, but is not limited to publicly-traded call and put options. In addition, under our policies, you may not engage in short selling of our ordinary shares at any time.
“Derivative securities” are securities other than ordinary shares that are speculative in nature because they permit a person to leverage his or her investment using a relatively small amount of money. Examples of derivative securities include (but are not limited to) “put options” and “call options”. These are different from employee stock options, which are not derivative securities.
“Short selling” is profiting when you expect the price of the stock to decline, and includes transactions in which you borrow stock from a broker, sell it, and eventually buy it back on the market to return the borrowed shares to the broker. Profit is made through the expectation that the stock price will decrease during the period of borrowing.
16. | Why does Company prohibit trading in derivative securities and short selling? |
A: Many companies with volatile stock prices have adopted such policies because of the temptation it represents to try to benefit from a relatively low cost method of trading on short-term swings in stock prices (without actually holding the underlying ordinary shares) and encourages speculative trading. For this reason, we have decided to prohibit employees from such trading. As we are dedicated to building stockholder value, short selling our ordinary shares is adverse to our stated values and would not be received well by our stockholders.
MOBILE-HEALTH NETWORK SOLUTIONS | INSIDER TRADING AND CONFIDENTIALITY POLICY |
17. | Can I purchase Company securities on margin? |
A: Under our policies, you may not purchase our ordinary shares on margin at any time absent specific approval from the Head of Human Resources .
“Purchasing on margin” is the use of borrowed money from a brokerage firm to purchase our securities. Holding our securities in a margin account includes holding the securities in an account in which the shares can be sold to pay a loan to the brokerage firm.
18. | Why does Company prohibit me from purchasing Company securities on margin or holding them in a margin account absent specific approval from the Head of Human Resources? |
A: Margin loans are subject to a margin call whether or not you possess insider information at the time of the call. If your margin call were called at a time when you had insider information and you could not or did not supply other collateral, you and Company may be restricted based on your insider trading activities: the sale of the stock (through the margin call) when you possessed material nonpublic information. The sale would be attributed to you even though the lender made the ultimate determination to sell. The U.S. Securities and Exchange Commission takes the view that you made the determination to not supply the additional collateral and you are therefore responsible for the sale.
19. | Can I exercise stock options during a trading blackout period or when I possess material nonpublic information? |
A: Yes. You may exercise the option and receive shares, but you may not sell the shares (other than the sale of shares in a cashless exercise program, including through a broker or in sales other than to Company) or otherwise settle the option during a trading blackout period or any time that you have material, nonpublic information. Also note that if you choose to exercise and hold the shares, you will be responsible at that time for any taxes due.
20. | Am I subject to the trading blackout period if I am no longer an employee of Company? |
A: It depends. If your employment with Company ends on a day that the trading window is closed, you will be subject to the trading blackout period then in effect. If your employment with Company ends on a day that the trading window is open, you will not be subject to the next trading blackout period. However, even if you are not subject to our trading blackout period after you leave Company, you should not trade in Company securities if you possess material non-public information. That restriction stays with you as long as the information you possess is material and not released by Company.
21. | Can I gift stock while I possess material nonpublic information or during a trading blackout period? |
A: Because of the potential for the appearance of impropriety, you may not make gifts, whether to charities, to a trust or otherwise, of our ordinary shares when you possess material nonpublic information or during a trading blackout period.
MOBILE-HEALTH NETWORK SOLUTIONS | INSIDER TRADING AND CONFIDENTIALITY POLICY |
22. | What if I purchased publicly-traded options or other derivative securities before I became a Company employee (or contractor or consultant)? |
A: The same rules apply as for employee stock options. You may exercise the publicly-traded options at any time, but you may not sell such securities during a trading blackout period or at any time that you have material, nonpublic information. When you become a Company employee, you must report to our Head of Human Resources or their designee that you hold such publicly traded options or other derivative securities.
23. | May I own shares of a mutual fund that invests in Company? |
A: Yes.
24. | Are mutual fund shares holding Company subject to the trading blackout periods? |
A: No. You may trade in mutual funds holding our ordinary shares at any time.
25. | May I use a “routine trading program” or “10b5-1 plan”? |
A: Yes, subject to the requirements discussed in our Insider Trading Policy. A routine trading program, also known as a 10b5-1 plan, allows you to set up a highly structured program with your stock broker through which you specify ahead of time the date, price, and amount of securities to be traded. If you wish to create a 10b5-1 plan, you must contact our Head of Human Resources or their designee for approval.
26. | What happens if I violate our insider trading policy? |
A: Violation of our policies may result in severe personnel action, including a memo to your personnel file and up to and including termination of your employment or other relationship with Company. In addition, you may be subject to criminal and civil enforcement actions by the government.
27. | Who should I contact if I have questions about our insider trading policy? |
A: You should contact our Head of Human Resources or their designee.
MOBILE-HEALTH NETWORK SOLUTIONS | INSIDER TRADING AND CONFIDENTIALITY POLICY |
Exhibit 21.1
List of Subsidiaries of Mobile-health Network Solutions
Subsidiary | Jurisdiction | |
MANADR PTE. LTD. | Singapore | |
MOBILE HEALTH PTE. LTD | Singapore | |
MANADR VIETNAM PTE. LTD. | Vietnam | |
MANA AESTHETICS PTE. LTD. | Singapore | |
MANADR CLINIC PTE. LTD. | Singapore | |
1HEALTHSERVICE PTE. LTD. | Singapore |
Exhibit 23.1
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17506 Colima Road, Ste 101, Rowland Heights, CA 91748 Tel: +1 (626) 581-0818 Fax: +1u (626) 581-0809 |
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Mobile-health Network Solutions
We hereby consent to the incorporation by reference in this Registration Statement on Form F-1, of our report dated October 27, 2023, relating to the consolidated financial statements of Mobile-health Network Solutions, which is included in this Registration Statement on the Form F-1.
We also consent to the reference to us under the caption “Experts” in such Registration Statement.
Rowland Heights, California
February 22, 2024
(p. 1 of 1) |
Exhibit 23.3
Exhibit 23.4
February 22, 2024
Mobile-health Network Solutions
2 Venture Drive, #07-06/07 Vision Exchange Singapore 608526
+65 6222 5223
Re: Consent of Frost & Sullivan
Ladies and Gentlemen,
Reference is made to the registration statement on Form F-1(the “Registration Statement”) filedby Mobile health Network Solutions (the “Company”) withthe United States Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933, as amended, in connection with its proposed initial public offering (the “Proposed IPO”).
We hereby consent to the use of and references to our name and the inclusion of information, data and statements from our research reports and amendments thereto, including, without limitation, the industry report titled “Integrated Smart Health-Tech Service Market Independent Market Research” (collectively, tbe “Reports”), and any subsequent amendments to the Reports, as well as the citation of our independent industry reports and amendments thereto, (i) in the Registration Statement and any amendments thereto, including, but not limited to,under the ”Prospectus Summary”, “Industry Overview” and “Business” sections; (ii) in any written correspondence with the SEC, (iii) in any other future filings with the SEC by the Company, including, without limitation, filings on Form 20-F, Form 6-K and other SEC filings (collectively, the “SEC Filings”), (iv) on the websites or in the publicity materials of the Company and its subsidiaries, (v) in institutional and retail road shows and other activities in connection with the Proposed IPO, and (vi) in other publicity and marketing materials in connection with the Proposed IPO.
We further hereby consent to the filing of this letter as an exhibit to the Registration Statement and any amendments thereto and as an exhibit to any other SEC Filings by the Company for the use of our data and information cited for the above-mentioned purposes.
[Signature page follows]
Yours faithfully, | ||
For and on behalf of | ||
Frost & Sullivan Limited | ||
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||
Name: | Charles Lau | |
Title: | Executive Director |
Exhibit 99.1
February 22, 2024
Mobile-health Network Solutions
2 Venture Drive, #07-06/07 Vision Exchange
Singapore 608526
+65 6222 5223
Ladies and Gentlemen,
Pursuant to Rule 438 promulgated under the Securities Act of 1933, as amended, I hereby consent to the references of my name in the Registration Statement on Form F-1 (the “Registration Statement”) of Mobile-health Network Solutions (the “Company”), and any amendments thereto, which indicate that I have accepted my appointment as an independent director of the Company. I further agree that my appointment will become effective upon the declaration of effectiveness of the Registration Statement by the United States Securities and Exchange Commission.
I also consent to the filing of this consent as an exhibit to such Registration Statement and any amendments thereto.
Yours faithfully, | |
/s/ Lai Kuan Loong Victor | |
Name: Lai Kuan Loong Victor |
Exhibit 99.2
February 22, 2024
Mobile-health Network Solutions
2 Venture Drive, #07-06/07 Vision Exchange
Singapore 608526
+65 6222 5223
Ladies and Gentlemen,
Pursuant to Rule 438 promulgated under the Securities Act of 1933, as amended, I hereby consent to the references of my name in the Registration Statement on Form F-1 (the “Registration Statement”) of Mobile-health Network Solutions (the “Company”), and any amendments thereto, which indicate that I have accepted my appointment as an independent director of the Company. I further agree that my appointment will become effective upon the declaration of effectiveness of the Registration Statement by the United States Securities and Exchange Commission.
I also consent to the filing of this consent as an exhibit to such Registration Statement and any amendments thereto.
Yours faithfully, | |
/s/ Lun Kwok Chan | |
Name: Lun Kwok Chan |
Exhibit 99.3
February 22, 2024
Mobile-health Network Solutions
2 Venture Drive, #07-06/07 Vision Exchange
Singapore 608526
+65 6222 5223
Ladies and Gentlemen,
Pursuant to Rule 438 promulgated under the Securities Act of 1933, as amended, I hereby consent to the references of my name in the Registration Statement on Form F-1 (the “Registration Statement”) of Mobile-health Network Solutions (the “Company”), and any amendments thereto, which indicate that I have accepted my appointment as an independent director of the Company. I further agree that my appointment will become effective upon the declaration of effectiveness of the Registration Statement by the United States Securities and Exchange Commission.
I also consent to the filing of this consent as an exhibit to such Registration Statement and any amendments thereto.
Yours faithfully, | |
/s/ Gabe Rijpma | |
Name: Gabe Rijpma |
Exhibit 107
Calculation of Filing Fee Table
F-1
(Form Type)
Mobile-health Network Solutions
(Exact Name of Registrant as Specified in its Charter)
(Translation of Registrant’s Name into English)
Newly Registered and Carry Forward Securities
Security Type | Security Class Title | Fee Calculation or Carry Forward Rule | Amount Registered | Proposed Maximum Offering Price Per Unit | Maximum Aggregate Offering Price | Fee Rate | Amount of Registration Fee | |||||||||||||||||||||
Fees to be Paid | Equity | Class A Ordinary Shares, par value US$0.000004 per share (1)(2)(3) | 457 | (o) | 5,679,167 | $ | 5.00 | $ | 28,395,835 | $ | 147.60 per $1,000,000 | $ | 4,191.23 | |||||||||||||||
Equity | Class A Ordinary Shares underlying Underwriter’s warrants(4) | 457 | (o) | 194,063 | $ | 7.00 | $ | 1,358,441 | $ | 147.60 per $1,000,000 | $ | 200.51 | ||||||||||||||||
Fees Previously Paid | - | - | - | - | - | - | - | $ | - | |||||||||||||||||||
Carry Forward Securities | - | - | - | - | - | - | - | - | ||||||||||||||||||||
Total Offering Amounts | $ | 4,391.74 | ||||||||||||||||||||||||||
Total Fees Previously Paid | $ | - | ||||||||||||||||||||||||||
Total Fee Offsets | - | |||||||||||||||||||||||||||
Net Fee Due | $ | 4,391.74 |
(1) | Pursuant to Rule 416(a) under the Securities Act, the Registrant is also registering an indeterminate number of additional ordinary shares that shall be issuable pursuant to Rule 416 to prevent dilution resulting from share splits, share dividends or similar transactions. | |
(2) | Includes additional Class A Ordinary Shares (up to 15% of the Class A Ordinary Shares offered to the public) that the Underwriter has the option to purchase to cover over-allotments, if any. | |
(3) | Estimated solely for purposes of calculating the registration fee pursuant to Rule 457(o) under the Securities Act. | |
(4) | We have agreed to issue warrants to the representative or its designees (the “Underwriter Warrants”) to purchase a number of Class A Ordinary Shares equal to an aggregate of up to seven and one-half percent (7.5%) of the number of Class A Ordinary Shares sold in this Offering (including the over-allotments) and also register herein such underlying Class A Ordinary Shares. The Underwriter Warrants shall be exercisable, in whole or in part, commencing six (6) months from the commencement of sales of this Offering and expiring five (5) years from the commencement of sales of this Offering. The Underwriter Warrants will have an exercise price equal to 140% of the public offering price of the Class A Ordinary Shares sold in this offering. |
+O^1
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