Risk Factors

4. RISK FACTORS 4. RISK FACTORS We are exposed to a number of possible risks that may arise from economic, business, market and financial factors and developments, which may have an adverse impact on our future performance. You should carefully consider the risks and investment considerations set out below along with the other matters in this Prospectus before you make your investment decision. The risks and investment considerations set out below are not an exhaustive list of the challenges that we currently face or that may develop in the future. Additional risks, whether known or unknown, may have a material adverse effect on the financial performance of our Company and/or the prices of our Shares and Warrants. 4.1 RISKS RELATING TO OUR BUSINESS AND OPERATIONS 4.1.1 We do not have any operating history and, accordingly, you may not have a conventional basis on which to evaluate our ability to achieve our business objective. As we do not have an operating history, you may not have a conventional basis upon which to evaluate our ability to achieve our business objective, which is to acquire an operating company or asset in the oil and gas E&P industry. We have no plans, arrangements or understandings with any prospective acquisition candidates. We will not generate any significant revenues until, at the earliest, after the completion of a Qualifying Acquisition. 4.1.2 If we are forced to liquidate before a Qualifying Acquisition and distribute the Trust Account, our public shareholders will receive less than the Issue Price per Share and our Warrants will expire worthless. If we are unable to complete a Qualifying Acquisition within the Permitted Timeframe and are forced to liquidate our assets, the per-share liquidation distribution will be less than the Issue Price because of the expenses of this offering, our general and other expenses and the anticipated costs of seeking a Qualifying Acquisition. Furthermore, there will be no distribution with respect to our outstanding Warrants which will expire worthless if we liquidate before the completion of a Qualifying Acquisition. 4.1.3 If we are unable to complete a Qualifying Acquisition, our public shareholders will be forced to wait until after 36 months before receiving the Liquidation Distribution. We have 36 months to complete a Qualifying Acquisition. We have no obligation to return funds to investors prior to such date unless we complete a Qualifying Acquisition prior to that. Only after the expiration of this 36 months will public shareholders be entitled to the Liquidation Distribution if we are unable to complete a Qualifying Acquisition. Accordingly, investors’ funds will be held in trust and may not be returned to you until after 36 months. THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK 4. RISK FACTORS (Cont’d) 4.1.4 If the net proceeds of this IPO not held in the Trust Account are insufficient to allow us to operate for at least the next 36 months, we may be unable to complete a Qualifying Acquisition. We currently believe that the funds available to us outside of the Trust Account will be sufficient to allow us to operate for at least the next 36 months, assuming that a Qualifying Acquisition does not occur during that time. However, it is not guaranteed that our estimates will be accurate. We could use a portion of the funds not being placed in trust to pay due diligence costs in connection with a potential Qualifying Acquisition or to pay fees to consultants to assist us with our search for a target company or asset. We could also use a portion of the funds not being placed in trust as a down payment or to fund a “no-shop” provision (a provision in letters of intent designed to keep the target company or asset from “shopping” around for transactions with others on terms more favourable to such target company or asset) with respect to a particular proposed Qualifying Acquisition, although we do not have any current intention to do so. If we entered into such a letter of intent where we paid for the right to receive exclusivity from a target company or asset and such funds were subsequently forfeited (whether as a result of our breach or otherwise), we might not have sufficient funds to continue searching for, or conduct due diligence with respect to any other potential target company or asset. 4.1.5 Since we have not yet selected a target company or asset with which to complete a Qualifying Acquisition, we are currently unable to ascertain the merits or risks of the company or asset which we may ultimately operate. Because we have not yet selected a target company or asset with which to complete a Qualifying Acquisition, investors in this IPO currently have no basis to evaluate the possible merits or risks of the target company or asset. Although our Management Team will evaluate the risks inherent in a particular target company or asset, we are not able to assure you that they will ascertain or assess all risk factors. We also cannot assure you that an investment in our Shares and Warrants will ultimately prove to be more favourable to investors than a direct investment, if such opportunity were available, in a target company or asset. 4.1.6 Our ability to successfully effect a Qualifying Acquisition and to successfully operate the company or asset thereafter will be dependent upon the efforts of our Management Team. Our ability to successfully effect a Qualifying Acquisition is dependent upon the efforts of our Board and Management Team. Thereafter, we will rely on our Management Team to successfully operate the company or asset upon completion of the Qualifying Acquisition. The retention of our Board and Management Team is critical to ensure that we can successfully identify a target company or asset and to operate the target company or asset while a loss of any member of the Board and Management Team is likely to have a material adverse effect on our operations. Our Non-Independent Directors and Management Team own Shares and Warrants in our Company through a holding company, Hibiscus Upstream. Pursuant to the IPO, our Non­Independent Directors and Management Team will collectively hold 20% equity interest in the enlarged issued and paid-up ordinary share capital of our Company. This will ensure that the interests of our Non-Independent Directors and Management Team are aligned with that of our Company. Assuming full exercise of all the Warrants, our Non-Independent Directors and Management Team will continue to own 20% equity interest in our Company. In addition, our Non-Independent Directors and Management Team have individually entered into the Hibiscus Upstream Shareholders’ Agreement and the Deed of Accession to regulate their relationship as shareholders of Hibiscus Upstream, to put in place a moratorium on the sale, transfer or assignment of the Hibiscus Upstream Shares in accordance with the SC Guidelines and to restrict the sale of the Hibiscus Upstream Shares upon the expiry of the moratorium. Please refer to Section 7.4 of this Prospectus for the salient terms of the Hibiscus Upstream Shareholders’ Agreement and the Deed of Accession. 4. RISK FACTORS (Cont’d) 4.1.7 The requirement to undertake the Qualifying Acquisition Share Repurchase may not allow us to undertake the most desirable Qualifying Acquisition or optimise our capital structure. When we seek shareholder approval of any Qualifying Acquisition, the IPO Investors (including our Independent Directors and the Initial Investors in respect of Shares purchased pursuant to the Public Issue and/or the Listing) will be entitled to receive, in exchange for their Public Issue Shares, a sum equivalent to a pro rata portion of the amount then held in the Trust Account (net of any taxes payable and expenses related to the facilitation of the exchange), if they vote against the Qualifying Acquisition provided that such Qualifying Acquisition is approved and completed within the Permitted Timeframe. Accordingly, if our Qualifying Acquisition requires us to use substantially all of our cash to pay the purchase price, because we will not know how many shareholders may elect to exchange their Shares for cash, we may either need to reserve part of the Trust Account for possible payment upon such conversion, draw upon a proposed credit facility if the target company or asset meets the criteria required by such credit facility, to help fund our Qualifying Acquisition in case a larger percentage of shareholders elect to exchange their Shares than we expect. Therefore, we may not be able to complete a Qualifying Acquisition that requires us to use all of the funds held in the Trust Account as part of the purchase price, or we may end up having to incur an amount of borrowings either pursuant to the proposed credit facility or otherwise that is not optimal for our Qualifying Acquisition. This may limit our ability to undertake the most attractive Qualifying Acquisition available to us. 4.1.8 We may not be able to complete the acquisition of an attractive target company or asset because of our limited resources and structure. We expect to encounter intense competition from entities having a business objective similar to ours, including venture capital funds, private equity firms and operating businesses competing for acquisitions. Many of these entities are well established and have extensive experience in identifying and effecting acquisitions directly or through affiliates. Many of these competitors possess greater technical, human and other resources than we do and our financial resources will be relatively limited when contrasted with those of many of these competitors. While we believe that there are numerous potential target companies or assets that we could acquire with the net proceeds of this IPO, our ability to compete in acquiring certain sizeable target companies or assets would be limited by our available financial resources. This inherent competitive limitation gives others an advantage in pursuing the acquisition of certain target companies or assets. Furthermore, the obligation that we have to seek shareholders’ approval of a Qualifying Acquisition may delay the completion of a transaction. If we are unable to complete a Qualifying Acquisition with a target company or asset within the Permitted Timeframe, we will be forced to liquidate. THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK 4. RISK FACTORS (Conf’dj 4.1.9 We may be unable to obtain additional financing, if required, to complete a Qualifying Acquisition or to fund the operations and growth of the target company or asset, which could compel us to restructure or abandon a particular Qualifying Acquisition. If the net proceeds of this offering prove to be insufficient for us to complete a particular Qualifying Acquisition either because of the size of the Qualifying Acquisition, the depletion of the available net proceeds in search of a target company or asset, or the obligation to convert into cash a significant number of Shares from Dissenting Shareholders, we will be required to seek additional financing. Such financing may not be available on acceptable terms, if at all. To the extent that additional financing proves to be unavailable when needed to complete a particular Qualifying Acquisition, we would be compelled to either restructure the transaction or abandon that particular Qualifying Acquisition and seek an alternative target company or asset candidate. In addition, if we complete a Qualifying Acquisition, we may require additional financing to fund the operations or growth of the target company or asset. The failure to secure additional financing could have a material adverse effect on the continued development or growth of the target company or asset. None of our officers, directors or shareholders is required to provide any financing to us in connection with or after a Qualifying Acquisition. 4.1.10 We may only be able to complete 1 Qualifying Acquisition with the proceeds of our IPO, which will cause us to be solely dependent on a single company or asset. Our Qualifying Acquisition must have an aggregate fair market value equal to at least 80% of the aggregate amount then on deposit in the Trust Account (net of any taxes payable), although this may entail the simultaneous acquisition of several operating businesses at the same time. The fair market value of the target company or asset will be determined by our Board based upon one or more standards generally accepted by the financial community (which may include actual and potential revenues, earnings, cashflow and/or book value). By completing a Qualifying Acquisition with only a single entity, our lack of diversification may subject us to numerous economic, competitive and regulatory developments. Further, we would not be able to diversify our operations or benefit from the possible spreading of risks or offsetting of losses, unlike other entities, which may have the resources to complete several acquisitions in different industries or different areas of a single industry. Accordingly, the prospects for our success may be solely dependent upon the performance of a single company or asset. 4.1.11 If we determine to simultaneously acquire several companies or assets, we will need the acquisitions to be consummated at the same time, thereby making it more difficult for us to complete the acquisitions because of our limited resources and structure. If we determine to simultaneously acquire several companies or assets and such companies or assets are owned by different vendors, we will need each of the vendors to agree that our acquisition of their company or asset is contingent upon the simultaneous completions of the other acquisitions, which may make it more difficult for us, and delay our ability, to complete the acquisitions. With multiple acquisitions, we may also face additional risks, including additional burdens and costs with respect to possible multiple negotiations and due diligence investigations (if there are multiple vendors) and the additional risks associated with the subsequent assimilation of the operations and services or products of the acquired companies in a single operating company or asset. If we are unable to adequately address these risks, it could negatively impact our profitability and results of operations. 4. RISK FACTORS (Cont’d) 4.1.12 The determination of the Issue Price is more arbitrary compared with the pricing of securities for an operating company. Prior to this offering, there has been no public market for any of our securities. Factors considered in determining the prices and terms of the Public Issue Shares and the Warrants include: • the minimum proceeds to be raised by a SPAC in accordance with the SC Guidelines;
• the listing scheme as set out in Section 3.2 of this Prospectus; and
• the general condition of the securities markets at the time of the IPO.

However, although these factors were considered, the determination of our Issue Price is more arbitrary than the pricing of securities for an operating company since we have no historical operations or financial results to compare them to. 4.1.13 If we acquire a target company or asset which is located outside of Malaysia, we could be subject to a variety of additional risks that may negatively impact our operations. If we acquire a target company or asset which is located outside of Malaysia, we could be subject to special considerations or risks associated with companies operating in the target company or asset’s home jurisdiction, including any 1 or more of the following: • rules and regulations or currency conversion or corporate withholding tax on individuals;
• tariffs and trade barriers;
• regulations relating to customs and import/export matters;
• longer payment cycles;
• tax issues, such as tax law changes and variations in tax laws as compared to Malaysia;
• currency fluctuations;
• challenges in collecting amounts receivable;
• cultural and language differences; and
• employment regulations. If we are unable to adequately address these risks, our operations might suffer.

 

4. RISK FACTORS (Cont’dj

4.1.14 Foreign exchange risks. Our revenues may be denominated in foreign currencies. However, a portion of our expenses is denominated in RM and currencies where our Qualifying Acquisition may be held in. The RM operates on a managed float basis, and an appreciation of the RM against foreign currencies may materially and adversely affect our financial performance as it may reduce our revenue in RM terms. Accordingly, changes in the foreign currencies to the RM rate could have an adverse impact on our results of operations and financial condition, including as a result of translation adjustments in converting foreign currencies to RM for financial statement purposes. 4.2 RISKS RELATING TO THE OIL AND GAS INDUSTRY 4.2.1 Fluctuations in oil and gas prices may cause a reduction in the demand or profitability of the products or services we may ultimately produce or offer. Prices for oil and gas tend to fluctuate widely based on a variety of factors including political and economic factors. These price fluctuations heavily influence the oil and gas industry and its related infrastructure. Lower oil and gas prices for existing products tend to limit the demand for alternate forms of oil and gas services and related products and infrastructure. Factors that impact price fluctuations include the actions of the members of the organisation of petroleum exporting countries (“OPEC”), the level of production by non-OPEC countries, worldwide demand for oil and gas, political tensions involving OPEC and non-OPEC countries and other varying factors. If we complete a Qualifying Acquisition with a target company or asset that is involved in the oil and gas industry and is affected by these or other factors, there may be a decrease in the demand for the products or services we may Ultimately produce or offer and our future profitability could be adversely affected. 4.2.2 Increases in oil and gas prices or changes in government initiatives, policies and regulations towards the oil and gas industry may affect our ability to complete a Qualifying Acquisition. Any significant increases in oil and gas prices would likely increase the valuation of target company(ies) or asset(s). In the event that such valuations exceed the funds available to us through the equity or debt markets, our ability to complete a Qualifying Acquisition would be adversely affected or we may be forced to acquire a smaller interest or asset than originally envisaged. In addition, while governments generally seek to encourage oil and gas E&P activities, any adverse changes to the governments’ current initiatives, policies and regulations towards the E&P industry may limit the opportunities available to us. 4.2.3 Government initiatives and policies towards the oil and gas industry may affect the level of oil and gas activities in the targeted regions. The level of oil and gas E&P activities is sometimes influenced by governments’ initiatives and policies towards the industry. Governments often encourage such activities when they require additional foreign source income and foreign direct investment. These objectives are normally achieved through offering oil production sharing contracts to the oil companies by the governments. Such oil production sharing contracts allow oil companies to undertake oil and gas E&P activities in a country while the respective government shares a percentage of output from the oil production activities. As such, any adverse change or development to the current governments’ initiatives and policies towards the oil and gas industry may lower the level of oil and gas E&P activities in the region, hence adversely affecting our future business operations and performance. 4. RISK FACTORS (Cont’d) 4.2.4 Failure to comply with regulations within the oil and gas industry could reduce our profitability foHowing a Qualifying Acquisition and such non-compliance could result in the imposition of penalties, fines or restrictions on operations and remedial liabilities. The oil and gas industry is subject to extensive federal, state and local laws and regulatory regimes related to the environment and health and safety aspects of the business. Compliance with these laws, regulations and obligations could require substantial capital expenditure. Failure to comply could result in the imposition of penalties, fines or restrictions on operations and remedial liabilities. These costs and liabilities could adversely affect our operations following an acquisition. These laws, regulations and obligations could change with the promulgation of new laws and regulations or a change in the interpretation of existing laws and regulations, which could result in substantially similar risks. We may not be able to comply with existing or new regulations. Further laws and regulations in the places where our potential customers operate in, following an acquisition in the oil and gas industry may require our potential customers to meet certain standards and impose liabilities for non-compliance. Although we may not be directly regulated by these laws and regulations, there is no assurance that our potential customers will not seek recourse from us in the event of non­compliance with such laws and regulations, even if our products and services meet the specifications required of us in the contractual documents with our potential customers. In addition, the liabilities and risks imposed on our potential customers by such laws and regulations may adversely impact demand for some of our future products or services or impose greater liabilities and risks on us. 4.2.5 If we are unable to acquire or renew permits and approvals required for our operations following a Qualifying Acquisition, we may be forced to suspend or cease our operations altogether. The construction and operation of oil and gas projects require numerous permits and approvals from governmental agencies. We may not be able to obtain all necessary permits and approvals following a Qualifying Acquisition. If we are unable to obtain or renew permits or approvals necessary for the operation of our company or asset following a Qualifying Acquisition, our operations would be adversely affected. In addition, obtaining all necessary permits and approvals may necessitate substantial expenditures and may create a significant risk of expensive delays or loss of value if a project is unable to function as planned due to changing requirements or local opposition. 4.2.6 The oil and gas industry is exposed to exploration risks. The outcome of oil and gas exploration may be affected by exploration risks resulting from factors such as unexpected drilling conditions, pressure or irregularities in geological formations, equipment failures or accidents, adverse weather conditions, compliance with governmental requirements and shortages or delays in availability of drilling rigs and the delivery of equipment, which may lead to higher cost of operations. Further, uncertainty in the result of exploration also arises from unprofitable efforts, which may be due to dry wells or from productive wells which do not produce sufficient revenues to generate a positive cash flow. In addition, the possibility of long lead times in coordination of activities required in order to undertake an exploration, such as obtaining environment-related clearance from authorities, obtaining seismic data, carrying out subsea surveys, obtaining partner approvals and securing capacity for rig and other services which are part of the exploration process, may lead to unsuccessful oil and gas exploration. If these factors occur, our future financial conditions would be adversely affected. 4. RISK FACTORS (Cont’dj
4.2.7 The oil and gas industry is exposed to development risks. The oil and gas industry’s development operations are affected by development risks such as blowouts, oil spills and fires (each of which could result in damage to, or destruction of, wells, production facilities or other property, or injury to persons), geological uncertainties and unusual or unexpected rock formations and abnormal pressures, which may result in dry holes, failure to produce oil or gas in commercial quantities or an inability to fully produce discovered reserves. Further, estimation of the oil and gas reserves in the subsurface are made by inferring subsurface conditions from limited data such as seismic data and wells that only penetrate a small fraction of potential and actual reservoirs and such inferences are, by nature, uncertain. While we may attempt to reduce such uncertainty by generating additional seismic data or drilling of further wells, such uncertainty cannot be completely eliminated.
4.2.8 The oil and gas industry is exposed to production risks. The performance of oil and gas business is subject to adverse production operating conditions, such as delays in obtaining governmental approvals or consents, shut-ins of connected subsea wells, resulting from extreme weather conditions, insufficient storage or transportation capacity or any other adverse geological and mechanical conditions, which may affect the oil and gas business’ production from successful wells. Further, the performance of the oil and gas business is also subject to factors such as the availability of the necessary infrastructure to transport oil and gas to potential buyers at a commercially acceptable price. Obstacles from transportation of oil and gas, include but are not limited to, obtaining necessary approvals for installing or utilising pipelines, capacity constraints and general politics which may cause economic instability and the oil and gas business to not be successful in its efforts to secure transportation and markets for all of its potential production. 4.2.9 The oil and gas business is reliant on the discovery and production of replacement reserves. Following a Qualifying Acquisition of a company or asset in the oil and gas industry, we must continually explore, develop and acquire new hydrocarbon reserves to replace those produced and sold. Our ability to achieve this objective is dependent, in part, on our level of investment in exploration activities and success in discovering or acquiring additional oil and gas reserves. Our exploration and development activities to seek additional reserves exposes us to risks associated with drilling as well as the risk that economically recoverable reserves will not be discovered. Without reserve additions, our reserves and production will decline over time as its existing reserves are depleted, which would adversely affect our future financial position and performance. 4.2.10 Our ability to expand will depend on our ability to retain and recruit skilled personnel and professional staff. Following a Qualifying Acquisition of a company or asset in the oil and gas industry, our company or asset will require skilled personnel and professional staff in the areas of exploration and development, operations, engineering, marketing, finance and accounting. We require skilled personnel and professional staff as we may be carrying operatorship roles in our future projects. Competition for such skilled personnel and professional staff is intense and comes primarily from similar businesses active in the oil and gas industry. Limitations in our ability to hire and train the required number of skilled personnel and professional staff would reduce our capacity to undertake further projects and may have an adverse impact on our future operations, results and growth. 4. RISK FACTORS (Cont’d) 4.2.11 We are reliant on the infrastructure of third party providers. As an oil and gas E&P company, we do not own or maintain the entire infrastructure that produces, processes and transports oil and gas to our customers. Such infrastructure, which includes pipelines and storage tanks, is leased from third party providers and we have no control over the quality, rates and availability of this infrastructure. We may, from time to time, face interruptions due to logistical complications. In the event that there is a disruption or delay in the availability of this infrastructure, we would be unable to sell our products until the problem is corrected or until we find alternative means to deliver our products to our customers. Such alternative means, if available, would likely result in increased costs, and may have an adverse effect on our future operations, business and profitability. 4.2.12 Changes in technology may render our products or services obsolete following a Qualifying Acquisition. The oil and gas industry and its related infrastructures are substantially affected by rapid and significant changes in technology. These changes may render certain existing services and technologies currently used obsolete. The technologies used by or relied upon by a target company or asset with which we effect a Qualifying Acquisition may be subject to such obsolescence. While we may attempt to adapt and apply the services provided by the target company or asset to newer technologies, our resources may be insufficient to fund these changes or these changes may ultimately prove unsuccessful.

4.3 RISKS RELATING TO THE IPO 4.3.1 There is no prior market for our Shares and Warrants, and an active market for our Shares and Warrants may not develop after Listing. Prior to this IPO, there has been no public market for our Shares and Warrants. There can be no assurance that an active and liquid market for our Shares and Warrants will develop and continue to develop upon or subsequent to our Listing or, if developed, that such a market will be sustained. We believe that a variety of factors could cause our share price to fluctuate and such fluctuations may adversely affect the market price of our Shares and Warrants. The Issue Price has been determined after taking into consideration a number of factors as stated in Section 3.4 of this Prospectus. There can be no assurance that the Issue Price will correspond to the price at which our Shares will trade on the Main Market of Bursa Securities upon or subsequent to our Listing. 4.3.2 IPO Investors would face immediate and substantial dilution in the NA per Share after the Public Issue and may experience future dilution. The Issue Price is higher than our NA per Share after the Public Issue. Therefore, the IPO Investors will experience an immediate dilution in NA per Share of RMO.19 per Share and RMO.18 per Share under the Minimum Subscription and Maximum Subscription respectively after the Public Issue and payment of listing expenses. Further, assuming full exercise of the Warrants, the IPO Investors will experience further dilution in NA per Share of RMO.26 per Share under both the Minimum Subscription and Maximum Subscription. In the future, pursuant to the completion of the Qualifying Acquisition, we may require additional funding and we may consider offering and issuing additional Shares or equity­linked securities. The IPO Investors may experience further dilution in NA per Share if we issue additional Shares or equity-linked securities in the future. 4. RISK FACTORS (Cont’d) Please refer to Sections 3.3.1, 3.7, 7.1.1.1, 7.2.1.1 and 7.3.1.1 of this Prospectus for information on the dilutive effects of the full exercise of the Warrants on the issued and paid­up share capital, shareholding structure and NA per Share of our Company. 4.3.3 Investment in the capital market exposes the investor to capital market risk. The performance of the local bourse is very much dependent on external factors such as the performance of the regional and world bourses and the inflow or outflow of foreign funds. Sentiments are also largely driven by internal factors such as the economic and political conditions of the country as well as the growth potential of the various sectors of the economy. These factors invariably contribute to the volatility of trading volumes witnessed on Bursa Securities, thus adding risks to the market price, which may already fluctuate significantly and rapidly as a result, inter-alia, of the following factors: • differences between our Company’s actual financial and operating results and those expected by investors and analysts;
• announcements by us or our competitors of significant contracts, acquisitions, strategic alliances, joint ventures or capital commitments;
• fluctuations in stock market prices and volume;
• changes in our Company’s operating results;
• changes in securities analysts’ estimates of our Company’s financial performance and recommendations;
• change in market valuation of similar companies; • our involvement in litigation, arbitration or other forms of dispute resolution;

• additions or departures of key personnel; and
• changes in general economic and stock market conditions.

 

4.3.4 Forward-looking statements may not be reflective of our future prospects. Our Prospectus contains forward-looking statements which are based on our current expectations and assumptions regarding our business, the economy and other future conditions. Whilst the interpretation of this information may be forward-looking, the contingencies and inherent uncertainties underlying this information should be carefully considered by the investors and should not be regarded as a representation by our Company and our advisers that the objectives and the future plans of our Company will be achieved. Any differences in the expectation of our Company from our actual performance may result in our Company’s financial and business performances and plans to be either, materially or immaterially, different from those anticipated. 4.3.5 Unforeseeable events could result in the delay in Listing or the termination of the Listing exercise. The occurrence of anyone or more of the following events, which may not be exhaustive, may cause a delay in our Listing or our Listing to be aborted: (i) the Underwriter exercising the rights pursuant to the Underwriting Agreement to discharge themselves from their obligations thereunder; 4. RISK FACTORS (Cont’d) (ii) we are unable to meet the public spread requirement as determined by Bursa Securities, i.e. at least 25% of our enlarged issued and paid-up ordinary share capital must be held by a minimum number of 1,000 public shareholders holding not less than 100 Shares each at the point of our Listing; or (iii) we are unable to meet the minimum requirement for the listing of the Warrants-A, that is, at least 100 warrant holders holding not less than 1 board lot of the warrants each. In such an event, our Board will endeavour to take the necessary steps in the best interests of our Company and its shareholders as well as the economic conditions at that point in time, including, subject to restrictions set out in Section 4.3.6 below, return in full without interest, all monies paid in respect of any Applications accepted. Our Directors will endeavour to ensure compliance with the various requirements for our successful Listing. 4.3.6 Delay between admission and trading of the Public Issue Shares may result in prolonged delays or the inability for investors to recover monies paid in respect of the Public Issue Shares. After the Public Issue Shares and Warrants-A have been allotted and/or allocated to the respective investors’ CDS accounts in Bursa Depository, which would occur at least 2 clear Market Days prior to the anticipated date for Admission, it may not be possible to recover monies paid in respect of the Public Issue Shares and Warrants-A from us in the event the Admission and the commencement of trading on the Main Market of Bursa Securities do not occur. Delays in the Admission and the commencement of trading in shares on Bursa Securities have occurred in the past. In respect of the Public Issue Shares, following their allotment and issue to investors, a return of monies to such investors may be effected by way of a reduction of our share capital. A capital reduction would require the approval by special resolution of our shareholders as well as approval by the Malaysian High Court. Further, such capital reduction shall not be effected if on the date the reduction is to be effected, there are reasonable grounds for believing that we are, or after the reduction would be, unable to pay our liabilities as they become due. THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK

 

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