F-1/A: Crown LNG Holdings Limited Files for Secondary Offering of 482 Million Shares and 7.3 Million Warrants

Crown LNG Holdings Limited has filed a registration statement for a secondary offering of 482 million ordinary shares and 7.3 million warrants, primarily held by existing shareholders.

Summary

• Crown LNG Holdings Limited has filed a registration statement for a secondary offering of up to 482,918,178 ordinary shares and 7,346,632 warrants.
• The offering includes shares issuable upon exercise of warrants from the Catcha IPO, private placements, and shares issued to insiders and other investors.
• The company will not receive any proceeds from the sale of these securities by the selling securityholders.
• Crown LNG could receive up to $115 million if all warrants are exercised for cash at $11.50 per share, but this is unlikely if the market price remains below the exercise price.
• The shares being registered represent approximately 94% of the total Class A Ordinary Shares outstanding as of December 17, 2024.
• Some selling securityholders acquired their shares at prices significantly below the current market price, potentially leading to substantial profits.
• The sale of these securities could cause a significant decline in the public trading price of Crown LNG's Class A Ordinary Shares.

Sentiment

Score: 4

Explanation: The document presents a mixed picture. While there are positive aspects such as the company's innovative technology and market opportunities, the significant risks, potential for share price decline, and the company's history of losses and need for additional capital raise concerns.

Positives

• The company has secured the right to develop the Kakinada terminal under agreement with Kakinada Ports Authority and received Consent for Establishment from the Andhra Pradesh Pollution Control Board (APPCB).
• The company has secured the right to develop the Grangemouth terminal under agreement with GBTRON Lands Limited.
• The company has received a 365-day operation approval in the Bay of Bengal for its offshore re-gasification solution.

Negatives

• The company will not receive any proceeds from the sale of these securities by the selling securityholders.
• The sale of these securities could cause a significant decline in the public trading price of Crown LNG's Class A Ordinary Shares.
• The company's stock price is currently significantly below the exercise price of the warrants, making it unlikely that holders will exercise their warrants for cash.
• The company has a history of net losses and operating cash outflows.
• The company is dependent on third-party contractors, operators and suppliers for the development, construction, installation and commissioning of its LNG terminals and associated assets.
• The company has not yet completed contracting, construction and commissioning of its planned initial two LNG re-gasification terminals.

Risks

• The company's ability to complete the development and/or construction of terminals, including the Kakinada Project, the Grangemouth Project, the Vung Tau Project, and the Newfoundland Project, will be contingent upon its ability to obtain additional funding.
• The company may be unable to obtain additional financing to fund the operations and growth of Crown LNG.
• The company's long-term profitability depends on its ability to secure and retain liquefaction and re-gasification customers and/or as well as to secure terminal development opportunities in areas such as India, Bangladesh, the U.K., the Gulf of Mexico and other locations.
• The company depends on third-party contractors, operators and suppliers for the development, construction, installation and commissioning of its LNG terminals and associated assets.
• Disruptions to the supply of natural gas to or from the company's LNG terminals and associated facilities could have a material adverse effect on its business.
• The company may experience cancellations, time delays, unforeseen expenses and other complications while developing its LNG terminals.
• The company has not yet completed contracting, construction and commissioning of its planned initial two LNG re-gasification terminals.
• Failure of exported LNG to be a long-term competitive source of energy for international markets could adversely affect the company's customers and could materially and adversely affect its business.
• The company's need for future financing may result in the issuance of additional securities, which will cause investors to experience dilution.
• The company will require additional capital as it grows its business, and such capital may not be available on acceptable terms, or at all, which would result in the company being unable to grow, or maintain its business.
• The company may experience increased labor costs, and the unavailability of skilled workers or its failure to attract and retain qualified personnel could adversely affect its business.
• System failures, defects, errors or vulnerabilities in its website, applications, backend systems or other technology systems or those of third-party technology providers could harm the company's reputation and adversely affect its business.
• Failure to obtain and maintain approvals and permits from governmental and regulatory agencies with respect to the design, construction and operation of the company's LNG terminals could impede operations and construction and could have a material adverse effect on its business.
• Unfavorable changes in laws, regulations, and policies in foreign countries in which the company seeks to develop projects, its, its partners, or its project developers failures to secure timely government authorizations under laws and regulations or its failure to comply with such laws and regulations could have a material adverse effect on its business, financial condition and results of operations.
• Certain existing shareholders purchased securities in the Company at a price below the current trading price of such securities, and may experience a positive investment return based on the current trading price, and may realize significant profits. Future investors in the Company may not experience a similar investment return.
• There can be no assurance that the company will be able to comply with the continued listing standards of Nasdaq or any other exchange.
• If the Business Combinations benefits do not meet the expectations of investors or securities analysts, the market price of the company's securities may decline.
• The company's only significant asset will be its ownership of Crown, and such ownership may not be sufficient to pay dividends or make distributions or obtain loans to enable the company to pay any dividends on its Ordinary Shares, pay its expenses or satisfy other financial obligations.
• Because the company is incorporated in Jersey, Channel Islands, you may face difficulties in protecting your interests, and your ability to protect your rights through the U.S. federal courts may be limited.
• The company's Ordinary Shares may or may not pay cash dividends in the foreseeable future, and you may not receive any return on investment unless you sell the company's Ordinary Shares for a price greater than that which you paid for it.
• An active liquid trading market for the company's Ordinary Shares and its Warrants may not develop, which may limit your ability to sell the company's Ordinary Shares and its Warrants.
• The company does not have experience operating as a public company subject to U.S. federal securities laws and may not be able to adequately develop and implement the governance, compliance, risk management and control infrastructure and culture required for a public company, including compliance with the Sarbanes Oxley Act.
• The price of the company's Ordinary Shares is volatile.

Future Outlook

The company seeks to provide stable, secure, year-round LNG production and gas supplies to growing markets and locations exposed to harsh weather conditions. The company aims to expand the global market for LNG and contribute to lower carbon emissions in the markets it serves by replacing coal and oil with LNG.

Industry Context

The document highlights the growing global demand for LNG, particularly in India and the U.K., driven by energy security concerns and the transition away from coal. The company's focus on offshore, all-weather LNG terminals positions it to serve markets where traditional solutions are less viable.

Comparison to Industry Standards

• The document mentions that the company's GBS solution for the re-gasification terminal in Kakinada has been fully licensed by the Indian Ministry of Environment, Forest & Climate Change (the MOEF), making it the first offshore re-gasification solution to obtain a 365-day operation approval in the Bay of Bengal.
• The document also notes that the U.K. relies heavily on pipeline imports with only three operational LNG import terminals, and that LNG imports increased 74% in 2022, accounting for almost half of the total U.K. gas imports.
• The document mentions that the company's GBS solution is designed to operate in harsh weather conditions, unlike floating solutions that may need to cease operations during storms or monsoon seasons.
• The document also mentions that the company's GBS solution is designed to rest directly on the seabed, which eliminates the need for dredging and allows for operations in ports that are too shallow for large vessels.

Stakeholder Impact

• The sale of these securities could cause a significant decline in the public trading price of Crown LNG's Class A Ordinary Shares, impacting shareholders.
• Some selling securityholders acquired their shares at prices significantly below the current market price, potentially leading to substantial profits, while future investors may not experience similar returns.
• The company's ability to secure and retain customers and develop new projects will impact its long-term viability and therefore the value of the investment for shareholders.

Next Steps

• The company will continue to monitor the closing bid price of its ordinary shares on the Nasdaq and seek to cure the deficiency within the Compliance Period.
• The company will continue to monitor the closing bid price of its ordinary shares on the Nasdaq and seek to cure the deficiency within the Compliance Period.
• The company will continue to monitor the closing bid price of its ordinary shares on the Nasdaq and seek to cure the deficiency within the Compliance Period.

Key Dates

Keywords

LNG, Liquefaction, Re-gasification, Offshore Terminals, Gravity-Based Structures, Warrants, Secondary Offering, Energy Infrastructure, Natural Gas, Kakinada, Grangemouth