F-1: Orangekloud Technology Inc. Files for Resale of 2.94 Million Class A Ordinary Shares

Orangekloud Technology Inc. is registering for the resale of up to 2.94 million Class A ordinary shares by existing selling shareholders.

Summary

• Orangekloud Technology Inc., a Cayman Islands-based holding company, has filed a Form F-1 registration statement for the resale of 2,940,000 Class A ordinary shares.
• The shares are to be resold by existing selling shareholders.
• The company will not receive any proceeds from the sale of these shares.
• As of July 24, 2024, the reported sales price of Orangekloud's Class A Ordinary Shares on The Nasdaq Capital Market was $4.75 per share.
• Following the consummation of the IPO, directors, officers and principal shareholders hold in aggregate 67.23% or more of Ordinary Shares representing 95.20% of total voting power.
• The company is classified as an emerging growth company and a foreign private issuer, which allows for reduced disclosure requirements.

Sentiment

Score: 4

Explanation: The document presents a mixed sentiment. While it highlights the company's plans for future growth and innovation, it also acknowledges the challenges and risks associated with its business, including increased competition, potential delays, and the possibility of not achieving profitability. The financial results for 2023 were worse than 2022.

Positives

• The company's shares are traded on The Nasdaq Capital Market, providing liquidity for investors.
• The company's dual-class share structure allows for flexibility in corporate governance.
• The company's status as an emerging growth company and foreign private issuer allows for reduced reporting requirements, potentially reducing compliance costs.

Negatives

• The company will not receive any proceeds from the sale of shares by the selling shareholders.
• The dual-class voting structure may limit the ability of Class A shareholders to influence corporate matters.
• The company's directors, officers and principal shareholders hold in aggregate 67.23% or more of Ordinary Shares representing 95.20% of total voting power.
• The company may be classified as a passive foreign investment company, or PFIC, for United States federal income tax purposes for any taxable year, which could subject United States investors in the Class A Ordinary Shares to significant adverse United States income tax consequences.

Risks

• An active trading market for the company's Class A Ordinary Shares may not develop.
• The share price may fluctuate significantly, and investors may lose all or part of their investment.
• The dual-class voting structure may render the Class A Ordinary Shares ineligible for inclusion in certain stock market indices.
• Investors in the Class A Ordinary Shares will face immediate and substantial dilution in the net tangible book value per share.
• The company may require additional funding in the form of equity or debt, which will cause dilution in shareholders' equity interest.
• If the company fails to maintain applicable listing requirements, Nasdaq may delist the Class A Ordinary Shares from trading.
• The company may be exposed to liabilities under applicable anti-corruption laws.

Future Outlook

The company plans to continue innovating, expand its digital transformation business beyond Singapore, grow revenue from key industry verticals, and expand its strategic partnerships.

Industry Context

The company operates in the competitive markets for Low-Code development platforms, business process management, and custom software solutions, which are characterized by rapid technological change and relatively low barriers to entry.

Comparison to Industry Standards

• The company competes with Low-Code development platforms sold by companies such as Outsystems Inc., Mendix Technology B.V., Appian, AppGyver, Thunkable and Bubble Group, Inc.
• The company also competes with software companies that offer commercial, off-the-shelf ERP solutions as well as custom software solutions.

Related Party Transactions

• The company rented office space from K.H. Goh Holdings Pte Ltd, a company owned by the founders and directors, for S$138,210 in both 2022 and 2023.
• The company paid director fees and remuneration to Ms. Lung Lay Hua and Mr. Goh Kian Hwa.
• Certain bank facilities have been guaranteed by Major Shareholders, Directors, and/or Executive Officers.

Stakeholder Impact

• The resale of shares by existing shareholders may affect the market price of the company's Class A Ordinary Shares.
• The dual-class voting structure may limit the ability of Class A shareholders to influence corporate matters.
• The company's future performance will impact the value of shareholders' investments.

Next Steps

• The selling shareholders may offer and sell the Class A Ordinary Shares from time to time through public or private transactions.
• The company plans to continue innovating with a focus on enhancing its eMOBIQ platform.
• The company plans to expand its digital transformation business beyond Singapore markets.
• The company plans to grow revenue from key industry verticals.
• The company plans to grow market presence through universities, software development houses and community.
• The company plans to expand its strategic partnerships.

Key Dates

Keywords

Class A Ordinary Shares, Resale, Selling Shareholders, Orangekloud Technology Inc., Offering, Dual-class shares, Nasdaq, Emerging growth company, Foreign private issuer