F-1: Skubbs Holdings Limited Files for IPO on Nasdaq, Aiming to Raise Capital for Expansion

Skubbs Holdings Limited, a Singapore-based digital solutions provider, has filed a Form F-1 registration statement for an initial public offering (IPO) on the Nasdaq Capital Market, seeking funds for research and development, business expansion, and other corporate purposes.

Summary

• Skubbs Holdings Limited, a digital solutions and application development service provider based in Singapore, has filed a Form F-1 registration statement for an IPO on the Nasdaq Capital Market.
• The company plans to offer 1,750,000 ordinary shares, while selling shareholders will offer 250,000 ordinary shares.
• The anticipated initial public offering price is between $4.00 and $5.00 per ordinary share.
• Skubbs intends to use the net proceeds from the offering for research and development (30%), mergers and acquisitions (20%), overseas business expansion (15%), marketing and branding (10%), repayment of loans to the controlling shareholder (10%), and general working capital (balance).
• The company's revenue decreased by 30.82% from $1,202,842 in 2022 to $832,133 in 2023, and by 18.29% from $510,226 in the first six months of 2023 to $416,889 in the first six months of 2024.
• Skubbs operates through its wholly-owned subsidiary in Singapore and has a subsidiary in Malaysia.
• Upon completion of the offering, Market Lead Ventures Limited, wholly-owned by Mr. Huang Zhongying, will beneficially own approximately 77.54% of the outstanding ordinary shares, making Skubbs a controlled company under Nasdaq rules.
• The company is an emerging growth company and a foreign private issuer, which allows for reduced public company reporting requirements.

Sentiment

Score: 5

Explanation: The document presents a mixed sentiment. While the company highlights its strengths and future strategies, it also acknowledges a decline in revenue and profitability, as well as material weaknesses in internal controls.

Positives

• Skubbs has an established track record serving notable customers across multiple industries.
• The company possesses technical expertise and knowledge in emerging technologies.
• Skubbs has an experienced management team.
• The company actively engages in creative thinking for its clients.
• Skubbs prioritizes continuous learning and development.
• The company's comprehensive income increased from $91,016 for the six months ended June 30, 2023 to $166,304 for the six months ended June 30, 2024 primarily due to the decrease in expenses during the time period.

Negatives

• Skubbs' revenue decreased by 30.82% between 2022 and 2023, and by 18.29% in the first half of 2024 compared to the first half of 2023.
• The company's gross profit decreased by 27.77% from $1,101,680 in 2022 to $795,708 in 2023.
• Skubbs identified two material weaknesses in its internal controls over financial reporting as of December 31, 2023.
• The company is exposed to foreign exchange transaction risks which may impact its profitability.

Risks

• The project-based nature of Skubbs' business may lead to fluctuations in revenue, profit, and operating cash flow.
• The company is dependent on its directors and key senior management team.
• Skubbs is dependent on its software development team and the availability of suitable talent in the market.
• The company may be unable to successfully implement its business strategies.
• Skubbs may be exposed to the risk of security breaches.
• The company is exposed to credit risk and default payments by customers.
• Project deliverables are exposed to unexpected delays, interruptions, or contract termination.
• Climate change and extreme weather events may result in operational and regulatory risks.
• Skubbs faces competition from existing and new digital solution providers and application developers.
• The company faces risks of not adapting quickly to the latest technological developments.
• If Skubbs is unable to maintain and protect its intellectual property, its business could suffer.
• The company's insurance coverage may be inadequate.
• Skubbs is subject to evolving laws, regulations, standards, and policies.
• The company may be involved in certain legal proceedings from time to time.
• The Malaysian Ringgit may be subject to foreign exchange controls or exchange rate fluctuations.
• Social, economic, political, and legal developments in Malaysia and Singapore could materially and adversely affect the company's business.
• The company's management has broad discretion to determine how to use the funds raised in the offering.
• The company's Resale Shareholders will be able to sell their shares upon completion of this offering subject to restrictions under Rule 144 under the Securities Act.
• The company's controlling shareholder has substantial influence over the company.

Future Outlook

Skubbs intends to continue expanding its mobile and web application development business, further grow Dee-Market, expand into new customer segments, and establish a training and development center.

Industry Context

The IT solutions market in Singapore is competitive, with a large number of fragmented industry players. The industry is driven by increasing internet and smartphone penetration, government digitalization initiatives, and technological advancements.

Comparison to Industry Standards

• The debt to equity ratio is 92.0% for the year ended December 31, 2023, compared to an industry average of 57%.
• The return on equity is 11.3% for the year ended December 31, 2023, compared to an industry average of 12.15%.

Related Party Transactions

• The company has related party transactions with Mr. Huang Zhongying, Skubbs Station Pte. Ltd., The Support Station Pte. Ltd., Skubbs Sdn Bhd, and FinCrypt Pte. Ltd.

Stakeholder Impact

• Shareholders will be subject to potential dilution due to the issuance of new shares in the IPO.
• Employees may benefit from the company's plans to expand and establish a training and development center.
• Customers may benefit from the company's plans to enhance its service offerings and develop new digital solutions.
• The company's suppliers and creditors may be affected by its financial performance and ability to meet its obligations.

Next Steps

• The company plans to list its ordinary shares on the Nasdaq Capital Market under the symbol SKUB.
• Skubbs intends to implement measures to improve its internal control over financial reporting.
• The company plans to expand its mobile and web application development business and further grow Dee-Market.
• Skubbs intends to expand into new customer segments to broaden its market presence.
• The company intends to establish a training and development center to generate additional revenue and recruit new industry talent.

Key Dates

Keywords

IPO, initial public offering, digital solutions, application development, Skubbs Holdings, Nasdaq, Market Lead Ventures, Purple Wealth, Singapore, technology