F-1/A: Sagtec Global Limited Files for IPO, Offering 1.75 Million Ordinary Shares

Sagtec Global Limited, a British Virgin Islands-based company, has filed for an initial public offering (IPO) to offer 1.75 million ordinary shares to the public.

Summary

• Sagtec Global Limited has filed for an IPO to offer 1.75 million ordinary shares.
• The initial public offering price is expected to be between $4.00 and $4.50 per share.
• The company has applied to list its ordinary shares on the Nasdaq Capital Market under the symbol SAGT.
• The underwriter has an option to purchase up to 262,500 additional ordinary shares to cover over-allotments.
• The company intends to use the net proceeds from the offering to expand its business operations in Malaysia, for marketing and promotion campaigns, for product research and development efforts, and to create a fixed asset reserve for procurement of Point of Sale (POS) systems, with the balance being used for working capital purposes.
• The underwriter will receive warrants to purchase 5% of the ordinary shares sold in the offering.
• The company's revenue for the year ended December 31, 2023, was RM29,280,649 (USD6,380,339), and its net profit was RM4,656,301 (USD1,014,622).
• For the six months period ended June 30, 2024, the company's revenue was RM19,655,442 (USD4,166,761), and its net profit was RM1,922,099 (USD407,466).

Sentiment

Score: 7

Explanation: The document presents a generally positive outlook due to the company's recent financial performance and growth plans. However, there are also several risk factors that could negatively impact the company's future performance.

Positives

• The company experienced significant revenue growth of 125.24% and net profit growth of 97.00% from 2022 to 2023.
• The company has an experienced management team.
• The company's product, Speed +, provides comprehensive and customizable solutions for customers.
• The company plans to strengthen its local presence and increase the features of its product range.

Negatives

• The company has derived a substantial portion of its revenue from sales to a limited number of customers, which may expose it to risks relating to customer concentration.
• The company has derived a substantial portion of its balance of accounts from a limited number of suppliers, which may expose it to risks relating to supplier concentration.

Risks

• The company may not be able to successfully implement its business strategies and future plans.
• The company is affected by regional and worldwide political, regulatory, social and economic conditions in the jurisdictions in which it and its customers and suppliers operate.
• The company is dependent on the need to continually maintain a wide range of software technological solutions which are relevant to its customers' needs.
• The company's continued success is dependent on its key management personnel and its experienced and skilled personnel.
• The company's reputation and profitability may be adversely affected if there are major malfunctions in its software solutions sold to its customers.
• Increased competition in the sale of software solutions in Malaysia and the region may affect the company's ability to maintain its market share and growth.
• The company's business is subject to supply chain interruptions.
• The company's business and operations may be materially and adversely affected in the event of a re-occurrence or a prolonged global pandemic outbreak of COVID-19.
• The company is exposed to risks arising from fluctuations of foreign currency exchange rates.
• The company and/or its customers may not be able to obtain the necessary approvals or certifications for the use of its software solutions in Malaysia.
• The company is subject to environmental, health and safety regulations and penalties.
• The company's insurance policies may be inadequate to cover its assets, operations and any loss arising from business interruptions.
• The company may be harmed by negative publicity.
• The company is exposed to risks in respect of acts of war, terrorist attacks, epidemics, political unrest, adverse weather conditions and other uncontrollable events.
• An active trading market for the company's ordinary shares may not be established or, if established, may not continue and the trading price for its ordinary shares may fluctuate significantly.
• The company may not maintain the listing of its ordinary shares on Nasdaq Capital Market.
• The trading price of the company's ordinary shares may be volatile, which could result in substantial losses to investors.
• Certain recent initial public offerings of companies with public floats comparable to the anticipated public float of the company have experienced extreme volatility.
• If securities or industry analysts do not publish research or reports about the company, the market price for its ordinary shares and trading volume could decline.
• Because the company does not expect to pay dividends in the foreseeable future, you must rely on price appreciation of its ordinary shares for a return on your investment.
• Short selling may drive down the market price of the company's ordinary shares.
• Because the company's public offering price per share is substantially higher than its net tangible book value per share, you will experience immediate and substantial dilution.
• The initial public offering price for the company's ordinary shares may not be indicative of prices that will prevail in the trading market and such market prices may be volatile.
• You must rely on the judgment of the company's management as to the uses of the net proceeds from this offering, and such uses may not produce income or increase the company's share price.
• If the company is classified as a passive foreign investment company, United States taxpayers who own its securities may have adverse United States federal income tax consequences.
• The company's controlling shareholder, Mr. Ng Chen Lok, has substantial influence over the company.
• As a controlled company under the rules of Nasdaq Capital Market, the company may choose to exempt itself from certain corporate governance requirements.
• As a company incorporated in the BVI, the company is permitted to follow certain home country practices in relation to corporate governance matters.
• You may face difficulties in protecting your interests, and your ability to protect your rights through U.S. courts may be limited, because the company is incorporated under British Virgin Islands law.
• Certain judgments obtained against the company or its auditor by its shareholders may not be enforceable.
• The company is an emerging growth company within the meaning of the Securities Act and may take advantage of certain reduced reporting requirements.
• The company is a foreign private issuer within the meaning of the Exchange Act, and as such it is exempt from certain provisions applicable to United States domestic public companies.
• The company may lose its foreign private issuer status in the future, which could result in significant additional costs and expenses to it.
• The company will incur significantly increased costs and devote substantial management time as a result of the listing of its ordinary shares on Nasdaq Capital Market.

Future Outlook

The company plans to strengthen its local presence, increase the features of its product range, and form strategic partnerships.

Industry Context

The company operates in the software technology sales business, which is highly competitive. The company's products and services are marketed to customers in the food and beverage (F&B) industry in Malaysia.

Related Party Transactions

• The company has engaged in transactions with related parties, including sales of goods and/or services, purchases of goods and/or services, payments made on behalf by a director, employee benefit expenses charged from related parties, and selling and administrative expenses charged from related parties.

Stakeholder Impact

• The IPO will provide the company with additional capital to expand its business operations.
• The IPO will provide investors with an opportunity to invest in the company's growth.
• The company's employees may benefit from the company's growth and success.

Next Steps

• The company intends to use the net proceeds from the offering to expand its business operations in Malaysia, for marketing and promotion campaigns, for product research and development efforts, and to create a fixed asset reserve for procurement of Point of Sale (POS) systems, with the balance being used for working capital purposes.

Key Dates

Keywords

IPO, initial public offering, ordinary shares, software solutions, Sagtec Global Limited, Nasdaq, SAGT, Malaysia, food and beverage, technology