DEFM14C: KHEOBA Reincorporates to BVI, Reports Strong Q3 Growth

KHEOBA Corp. is reincorporating to the British Virgin Islands following majority shareholder approval, reporting a significant turnaround with $680,057 in revenue and $366,644 net income for the nine months ended July 31, 2025.

Summary

• KHEOBA Corp., a Nevada corporation, is undergoing a reincorporation merger into KHOB Merge Sub Limited, a wholly-owned subsidiary of KHEOBA Limited, a British Virgin Islands (BVI) company. KHEOBA Limited will become the new public parent company.
• The reincorporation merger was approved by written consent of the majority stockholder, Mr. Tien Seng Tong, who holds approximately 74% of the outstanding shares.
• The company's business focuses on CRM and ERP software solutions, initially serving the tourism industry in Europe and now expanding into Asian markets through commission-based sales, consulting, and customization services.
• For the nine months ended July 31, 2025, revenue significantly increased to $680,057 from $32,115 in the prior year period, resulting in a net income of $366,644 compared to a net loss of $26,513.
• Despite recent profitability, the company's auditor issued a going concern opinion for the fiscal year ended October 31, 2024, due to an accumulated deficit and recurring losses.
• Management expects that additional capital will be required to meet long-term operating requirements and plans to raise funds through equity or debt securities.
• Shareholders of KHEOBA Nevada will exchange their shares on a one-for-one basis for KHEOBA BVI Class A Ordinary Shares, which are expected to continue trading on the OTCQB under the symbol KHOB, though no assurance can be given.
• The reincorporation aims to provide additional corporate flexibility, cost savings, and improved access to capital markets, as BVI is a jurisdiction more familiar to current and potential new investors.

Sentiment

Score: 7

Explanation: The company has shown a remarkable financial turnaround in the most recent nine-month period, moving from significant losses to substantial profitability and positive operating cash flow. This indicates successful strategic shifts and market expansion. However, the historical going concern warning, the inherent risks of a development-stage company, intense competition, and the complexities introduced by the reincorporation and foreign private issuer status temper the overall positive sentiment. The concentrated ownership also presents a governance concern for minority shareholders.

Positives

• Reported significant revenue growth for the nine months ended July 31, 2025, reaching $680,057, a substantial increase from $32,115 in the same period of 2024.
• Achieved a net income of $366,644 for the nine months ended July 31, 2025, marking a significant turnaround from a net loss of $26,513 in the prior year period.
• Shifted from negative to positive cash flow from operating activities, reporting $202,436 for the nine months ended July 31, 2025, compared to a negative $4,749 in 2024.
• Stockholders' equity significantly increased to $407,469 as of July 31, 2025, from $4,133 as of October 31, 2024.
• Successfully expanded into the Asian market with wholly-owned subsidiaries established in Singapore and Hong Kong in February 2025.
• Benefited from debt forgiveness totaling $36,680 from former director Mr. Gaga Gvenetadze and Mr. Irakli Gunia, which increased additional paid-in capital.
• The reincorporation to BVI is expected to provide additional corporate flexibility, result in cost savings, and improve access to capital markets.

Negatives

• The company's auditor issued a going concern opinion for the fiscal year ended October 31, 2024, due to an accumulated deficit of $43,707 and recurring losses.
• Experienced net losses for the fiscal years ended October 31, 2024 ($34,295) and 2023 ($47).
• Reported negative cash flow from operating activities for the years ended October 31, 2024 ($(23,132)) and 2023 ($(11,127)).
• Total liabilities increased significantly to $436,979 as of July 31, 2025, from $32,408 as of October 31, 2024.
• The company is a development-stage company with a limited operating history.
• No assurance can be given that KHEOBA BVI Class A Ordinary Shares will be approved for quotation on the OTCQB or under the symbol KHOB.
• The company's shares are classified as 'penny stocks,' which may make them difficult to resell due to additional sales practice requirements for broker-dealers.
• The company does not currently have any general liability insurance.
• The sole officer and director, Mr. Ka Miew Hon, devotes approximately twenty hours per week to the business, raising concerns about sufficient time commitment.
• Mr. Ka Miew Hon's experience and skills may not be adequate for future R&D in the rapidly evolving software development industry.
• Concentrated ownership by Mr. Tien Seng Tong (74%) limits control for other shareholders and may hinder premium offers in change-of-control transactions.
• No intention to pay dividends in the foreseeable future, meaning shareholder returns depend solely on share price appreciation.

Risks

• Operating as a development-stage company with limited operating history and a history of operating losses.
• Uncertainty regarding the capability to develop the CRM business in Asian countries.
• Risk of not attracting new clients for technology services or increasing revenues from existing clients, potentially failing to achieve revenue growth goals.
• Products may not gain market acceptance, leading to inability to generate product revenues.
• Reliance on current strategic relationships and potential success or failure of strategic relationships, joint ventures, or M&A transactions.
• Inability to obtain, maintain, and protect intellectual property rights or operating business without infringing others' IP.
• Inability to remain on the OTCQB as a trading market for Class A ordinary shares, potentially leading to demotion to OTC Pink.
• Investment costs incurred in developing new CRM and ERP products and platforms may not yield intended results.
• Failure to anticipate and keep pace with rapid changes in technology or slower-than-expected growth in technology adoption by customers.
• Growth prospects may be adversely affected if the market for services and industries serviced (e.g., Asia's extensively regulated economy) fail to grow as expected.
• Substantial uncertainty about continuing as a going concern, with a risk of losing investment if operations discontinue.
• Difficulty achieving profitability in the future despite recent net income.
• Inability to generate significant revenues.
• Need to raise additional capital in the future, with potential for substantial dilution from equity or debt issuance.
• Lack of patent protection for services and software, allowing competitors to copy technology.
• Potential damage to reputation if future clients are not satisfied with the use of freelancers.
• Limited marketing capital may prevent attracting sufficient clients to operate profitably.
• Difficulty for U.S. stockholders to effect service of process or enforce judgments against the company or its non-U.S. directors/officers.
• No general liability insurance to protect against customer or other claims.
• Sole officer and director may not be able to devote sufficient time to business operations.
• Chief Executive Officer's experience and skills may not be adequate for future R&D in the rapidly evolving software development industry.
• Shareholders will have limited control over decision-making due to the majority stockholder (74% ownership).
• Future issuance of additional KHEOBA BVI Class A Ordinary Shares will dilute share value.
• Competition from other companies with substantially greater resources.
• Reliance on emerging growth company exemptions may make shares less attractive to investors, leading to less active trading and more volatile stock price.
• Litigation could be costly and time-consuming.
• Inability to attract or retain qualified personnel.
• Failure to comply with Exchange Act reporting obligations (e.g., Section 404 of Sarbanes-Oxley) or maintain adequate internal control over financial reporting.
• Interruption or failure of information technology and communications systems.
• BVI incorporation means shareholders may have more difficulty protecting their interests than in a U.S. corporation.
• Foreign private issuer status means less public disclosure than U.S. public companies.
• Risk of losing foreign private issuer status, resulting in significant additional costs and expenses.
• Certain provisions under KHEOBA BVI's memorandum and articles may impede a takeover.
• Risk of being treated as a U.S. corporation for tax purposes under Section 7874 of the Code if the 25% Test is not met.
• Risk of being classified as a Passive Foreign Investment Company (PFIC) for U.S. tax purposes, leading to punitive tax treatment for U.S. Holders.

Future Outlook

Management anticipates KHEOBA BVI will continue to grow after the Reincorporation Merger, leveraging increased corporate flexibility, cost savings, and improved access to capital markets from the BVI jurisdiction. The company plans to expand its CRM business in Asian countries and develop new CRM and ERP products. However, management expects additional capital will be required to meet long-term operating requirements and intends to raise funds through equity or debt securities.

Management Comments

• "We believe that the Reincorporation from Nevada to BVI will provide the Company with additional corporate flexibility, result in cost savings, and that BVI is a jurisdiction more familiar to most of our current and potential new investors, ultimately resulting in improved access to capital markets."
• "Through KHEOBA BVI, we anticipate will continue to grow after the Reincorporation Merger."
• "Management continues to evaluate the sustainability of operations and closely monitors liquidity and capital needs."
• "The Company's financial statements have been prepared under the assumption that it will continue as a going concern, and management expects that additional capital will be required to meet long-term operating requirements."
• "We expect we will require additional capital to meet our long-term operating requirements. We expect to raise additional capital through, among other things, the sale of equity or debt securities."
• "In the opinion of Mr. Ka Miew Hon, we reasonably believe that we will begin to generate significant revenues within approximately twelve months."

Industry Context

KHEOBA operates in the highly competitive and rapidly evolving IT services and software development market, specifically focusing on CRM and ERP solutions. The company's expansion into Asia aligns with broader industry trends of seeking growth in emerging markets, particularly for SME-focused software solutions. The shift to a commission-based model and standardized products aims to broaden its customer base and leverage recurring revenue models, a common strategy in the software industry. However, the market is characterized by rapid technological changes and numerous competitors, many with substantially greater resources.

Comparison to Industry Standards

• NA

Management Changes

Corporate Governance

Legal Proceedings

• Not currently a party to any legal proceedings.
• Not aware of any pending or potential legal actions.

Related Party Transactions

• Mr. Tien Seng Tong, the principal shareholder, acquired a controlling 74% equity stake in KHEOBA CORP. on January 10, 2025.
• As of July 31, 2025, the company owed $10,565 (interest-free) to Mr. Ka Miew Hon, the CEO, CFO, and Secretary, for working capital purposes.
• Debt forgiveness totaling $36,680 was received from former director Mr. Gaga Gvenetadze ($14,000 accounts payable, $7,115 related party loan) and Mr. Irakli Gunia ($15,565 loan payable).

Stakeholder Impact

• Shareholders: Will exchange KHEOBA Nevada shares for KHEOBA BVI Class A Ordinary Shares on a one-for-one basis. U.S. Holders will realize taxable gain (but not loss) from this exchange. Shareholder rights will be governed by BVI law, which differs from Nevada law. Concentrated ownership by Mr. Tien Seng Tong (74%) limits influence for other shareholders. No dividends are expected in the foreseeable future.
• Employees: The company has engaged several full-time employees through its subsidiaries in Singapore and Hong Kong to support operational, administrative, and sales functions. The reincorporation is not expected to materially change the business or operations.
• Customers: The company continues to expand its software solutions business in Europe and Asia, leveraging partnerships with software developers to serve clients in various industries.
• Creditors: The company's ability to continue as a going concern is dependent on sustaining profitability and securing additional financing, which could impact creditors. Debt forgiveness has improved the balance sheet.
• Management: Mr. Ka Miew Hon and Mr. Tien Seng Tong will continue in key leadership roles in the reincorporated entity.

Next Steps

• KHEOBA BVI will issue Class A ordinary shares to KHEOBA Nevada's shareholders at the closing of the Reincorporation Merger.
• KHEOBA BVI will seek approval from the OTCQB to trade its Class A Ordinary Shares under the symbol KHOB.
• Management plans to continue expanding the software solutions business to the Asia region.
• Management intends to raise additional capital through equity or debt securities to meet long-term operating requirements.
• KHEOBA BVI will file annual reports on Form 20-F and reports on Form 6-K as a foreign private issuer.
• The company will continue to evaluate its tax position and consult with tax advisors to ensure compliance with applicable laws and accurate financial reporting.

Key Dates

Recommendation

The company has demonstrated a significant financial turnaround in the nine months ended July 31, 2025, with substantial revenue growth and a shift from net losses to profitability and positive operating cash flow. This indicates successful strategic execution and market expansion. However, the company's history as a development-stage entity, the auditor's prior going concern opinion, and the stated need for additional capital introduce considerable uncertainty. The reincorporation to BVI, while offering potential benefits, also brings new legal, regulatory, and tax complexities, including reduced disclosure requirements as a foreign private issuer and potential tax implications for U.S. shareholders. The highly concentrated ownership by a single individual also limits minority shareholder influence. Given the strong recent performance balanced against significant inherent risks and structural changes, a 'hold' recommendation is appropriate, suggesting investors monitor the company's ability to sustain profitability, manage its capital needs, and navigate the new corporate and regulatory environment.

Keywords

KHEOBA CORP, KHEOBA Limited, Reincorporation Merger, BVI, Nevada, Software Solutions, CRM, ERP, Financial Performance, SEC Filing, Going Concern, Capital Markets, OTC Markets, Foreign Private Issuer, Shareholder Rights, Tien Seng Tong, Ka Miew Hon, Technology Services, Asia Expansion, Financial Reporting