SEC Info℠

Home

Search

My Interests

Help

Sign In

Please Sign In

T20 Holdings Ltd. – IPO: ‘F-1/A’ on 10/3/22

On:  Monday, 10/3/22, at 5:09pm ET   ·   Accession #:  1575872-22-914   ·   File #:  333-266102

Previous ‘F-1’:  ‘F-1/A’ on 8/29/22   ·   Next:  ‘F-1/A’ on 10/6/22   ·   Latest:  ‘F-1/A’ on 12/6/22   ·   3 References:   By:  T20 Holdings Ltd. – Latest ‘F-1/A’ on 12/6/22 To:  T20 Holdings Ltd. – Previous ‘F-1/A’ on 8/29/22 To:  T20 Holdings Ltd. – ‘F-1/A’ on 8/8/22 

in

this entire Filing. an “Entity” Search.

Show

Documents searched

and

each “hit”. the 1st “hit”.

↓↑Hints

 Text Wildcards:  ? (any letter/digit),  * (many).  Search Logic:  for Documents:  & (and),  | (or);  for Text:  | (anywhere),  "(&)" (near).  Details... 

  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

10/03/22  T20 Holdings Ltd.                 F-1/A                  9:3.5M                                   DataTracks Svcs Ltd./FA

Document/Exhibit                   Description                      Pages   Size 

 1: F-1/A       Pre-Effective Amendment to Registration Statement   HTML   1.91M 
                by a Foreign Issuer                                              
 2: EX-1.1      Underwriting Agreement or Conflict Minerals Report  HTML    410K 
 3: EX-5.1      Opinion of Counsel re: Legality                     HTML     50K 
 4: EX-5.2      Opinion of Counsel re: Legality                     HTML     15K 
 5: EX-8.1      Opinion of Counsel re: Tax Matters                  HTML     42K 
 6: EX-8.2      Opinion of Counsel re: Tax Matters                  HTML     13K 
 7: EX-10.9     Material Contract                                   HTML     99K 
 8: EX-23.1     Consent of Expert or Counsel                        HTML      7K 
 9: EX-FILING FEES  Filing Fees                                     HTML     24K 

As filed with the Securities and Exchange Commission on October 3, 2022.

Registration No. 333-266102

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Amendment No. 3

to

FORM F-1

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 

T20 Holdings Ltd.

(Exact Name of Registrant as Specified in its Charter) 

3 Phillip Street

#19-01 Royal Group Building

Singapore 048693

+65 6920 2020

(Address, including zip code, and telephone number, including area code, of principal executive offices)  

Cogency Global Inc.

122 East 42^nd Street, 18^th Floor

New York, NY 10168

+1 212 947 7200

(Name, address including zip code, and telephone number, including area code, of agent for service)  

Copies to:

Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. ¨

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933.

Emerging growth company x

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 7(a)(2)(B) of the Securities Act ¨

† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the registration statement shall become effective on such date as the Commission, acting pursuant to such Section 8(a), may determine. 

The information in this prospectus is not complete and may be changed. We and the selling shareholder may not sell these securities until the registration statement is filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state or other jurisdiction where the offer or sale is not permitted.

PRELIMINARY PROSPECTUS, SUBJECT TO COMPLETION, DATED OCTOBER 3, 2022

T20 Holdings Ltd.

2,637,500 Ordinary Shares

This is the initial public offering of 2,637,500 Ordinary Shares of T20 Holdings Ltd., or T20 Holdings, a Singapore public company limited by shares incorporated under the laws of Singapore. The estimated offering price is between $4.00 and $6.00 per share. We are offering 2,000,000 Ordinary Shares and the selling shareholder identified in this prospectus is selling to the underwriters 637,500 Ordinary Shares, at the initial public offering price less the underwriting discounts and commissions. We will not receive any of the proceeds from the sale of any Ordinary Shares by the selling shareholder, Snowfields Wealth Management Limited which is wholly-owned by Geoffrey Allan Lawrence, Chief Executive Officer and a director of T20 Holdings.

Prior to this offering, there has been no public market for our Ordinary Shares. We have applied to list our Ordinary Shares on the Nasdaq Capital Market under the symbol “TWEN”. We believe that upon the completion of this offering, we will meet the standards for listing on the Nasdaq Capital Market. We will not close this offering unless our Ordinary Shares are listed on the Nasdaq Capital Market.

Upon completion of this offering, and as long as our officers and directors, either individually or in the aggregate, own at least 50% of the voting rights of our Ordinary Shares, we will be a “controlled company” as defined under Nasdaq Marketplace Rules. Although we do not intend to rely on the “controlled company” exemption under the Nasdaq listing rules, we could elect to rely on this exemption in the future. If we elect to rely on the “controlled company” exemption, a majority of the members of our board of directors might not be independent directors and our Nominations and Governance Committee and Compensation Committee might not consist entirely of independent directors. (See “Risk Factors — Risks Related to Our Business and Industry — As a “controlled company” under the rules of the Nasdaq Capital Market, we may choose to exempt our company from certain corporate governance requirements that could have an adverse effect on our public shareholders.”)

Prior to the completion of this offering, Asia Pacific Energy Ventures Pte. Ltd., or APEV, and certain subsidiaries, will effect a reorganization pursuant to which APEV will transfer all of its equity interests in its wholly-owned subsidiary Twenty20 Energy Systems Pte. Ltd., or T20, which is the primary entity used to conduct business within the T20 Group (as defined below), other entities and other assets, to us, as more fully described in “Corporate Formation and Reorganization” (the “Reorganization”). Upon the completion of this offering and the above-mentioned reorganization, and assuming an initial public offering price equal to the mid-point of the price range set forth above, our initial shareholders, including the holder of 175,000 shares that vest upon completion of the offering, own approximately 86% of our outstanding Ordinary Shares, or approximately 84% if the underwriters exercise in full their option to purchase up to an additional 486,619 Ordinary Shares (comprised of 395,625 Ordinary Shares from the Over-Allotment allocation (including 95,625 shares sold by the selling shareholder) and 90,994 Ordinary Shares pursuant to the Representative’s Warrants) from us. The ownership percentages do not include shares issuable upon exercise of outstanding options or warrants. For further information, see “Principal and Selling Shareholders”.

Investing in our securities involves a high degree of risk, including the risk of losing your entire investment. See “Risk Factors” beginning on page 16 to read about factors you should consider before buying our securities.

We are an “emerging growth company” as defined under the federal securities laws and will be subject to reduced public company reporting requirements. Please read the disclosures beginning on page 12 of this prospectus for more information.

(Prospectus cover continued on the following page.)

This offering is being conducted on a firm commitment basis. The underwriter is obligated to take and pay for all of the Ordinary Shares if any such Ordinary Shares are taken. We and the selling shareholder have granted the underwriter an option for a period of 45 days after the effective date of this registration statement to purchase up to 15% of the total number of the Ordinary Shares to be offered by us pursuant to this offering (excluding Ordinary Shares subject to this option), solely for the purpose of covering over-allotments, at the public offering price less the underwriting discounts. If the underwriter exercises the option in full, and assuming an offering price of $5.00 per share, which is the midpoint of the range set forth on the cover page of this prospectus, the total gross proceeds to us, before underwriting discounts and expenses, will be $11,500,00.

The underwriter expects to deliver the Ordinary Shares against payment as set forth under “Underwriting,” on or about [•], 2022.

Neither the Securities and Exchange Commission nor any state securities commission nor any other regulatory body has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

EF HUTTON

division of Benchmark Investments, LLC

The date of this prospectus is ______________, 2022

TABLE OF CONTENTS

You should rely only on the information contained in this prospectus or in any related free writing prospectus. Neither we nor the selling shareholder have authorized anyone to provide you with information different from that contained in this prospectus or in any related free writing prospectus. We are offering to sell, and seeking offers to buy our securities, only in jurisdictions where offers and sales are permitted. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or of any sale of our securities.

Neither we, the selling shareholder, nor the underwriter have taken any action to permit a public offering of our securities outside the United States or to permit the possession or distribution of this prospectus or any filed free writing prospectus outside the United States. Persons outside the United States who come into possession of this prospectus or any filed free writing prospectus must inform themselves about and observe any restrictions relating to the offering of our securities and the distribution of this prospectus or any filed free writing prospectus outside the United States.

Until [•], 2022 (the 25^th day after the date of this prospectus), all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers’ obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

ABOUT THIS PROSPECTUS

Introduction

As described under “Corporate Formation and Reorganization,” we were incorporated in the Republic of Singapore in March 2022 to serve as the holding company of the T20 Group and its businesses. As of the completion of this offering, (i) our initial shareholders, who are the same shareholders of APEV (except for Christopher Hobbs, who has no shares in APEV, and will not have any shares in APEV), will have effected a reorganization pursuant to which APEV will transfer all of its equity interests in its wholly-owned subsidiary T20 and other entities to us in accordance with the terms of the restructuring and Singapore law, (ii) Pacific Energy Consulting Limited, or PEC, a wholly-owned subsidiary of APEV, will have effected a reorganization pursuant to which PEC will transfer certain assets and all of its equity interests in Bougainville Energy Limited and Pawa Generation PNG Limited to us in accordance with the terms of the restructuring and Papua New Guinea law, and (iii) we will be converted to a public company under the Singapore Companies Act, which transactions we collectively refer to as the Reorganization. Except as otherwise indicated, or unless the context requires otherwise, references to the “Company,” “we,” “us” and “our” prior to the date hereof shall refer to T20 and its businesses, and as of the date hereof and thereafter, to T20 Holdings and its subsidiaries, which subsidiaries shall include T20 as if the Reorganization had been consummated on the date hereof.

Financial Information

We present financial statements in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”), and all financial information included in this prospectus is presented in accordance with U.S. GAAP.

The consolidated financial statements we have included in this prospectus consist of the consolidated balance sheet, consolidated income statement, consolidated cash flow statement, and accompanying financial notes.

All references in this prospectus to “U.S. dollars,” “U.S.$,” “$” and “USD” refer to the currency of the United States of America, all references to “Kina” or “PGK” refer to the currency of Papua New Guinea, all references to “rupiah” or “Rp” refer to the currency of Indonesia, all references to “€” or “EUR” refer to the Euro, all references to “A$” or “AUD” refer to the currency of Australia and all references to “S$” or “Singapore dollar” refer to the currency of Singapore. Unless otherwise indicated, all references to currency amounts in this prospectus are in USD.

Our fiscal year ends on December 31^st. We have made rounding adjustments to some of the figures included in this prospectus. Accordingly, numerical figures shown as totals in some tables may not be an arithmetic aggregation of the figures that precede them. Prior to financial year 2021, the Singapore registered entities had a financial year end of July 31^st. Accordingly, financial year 2020 takes into account a longer period for the Singapore entities from August 1, 2019 to December 31, 2020 to align all entity year ends to the calendar year end. Consolidated financial statements of the carved out entities have been prepared on a calendar year basis for convenience of the reader.

Financial Information in U.S. Dollars

Solely for the convenience of the reader, we have translated some of the Kina amounts included in this prospectus from Kina into U.S. dollars. You should not construe these translations as representations by us that the amounts actually represent these U.S. dollar amounts or could be converted into U.S. dollars at the rates indicated. Unless otherwise indicated, we have translated Kina amounts into U.S. dollars using a rate of PGK 3.5174 to U.S. $1.00, the exchange rate as of December 31, 2021. There can be no assurance that the exchange rate will be maintained at the current level and that the Kina will not depreciate or appreciate against the U.S. dollar.

Market and Industry Data

Certain information relating to our industry and market position used or referenced in this prospectus was obtained from internal analysis, surveys, market research, publicly available information and industry publications. Unless otherwise indicated, all sources for industry data are estimates or forecasts contained in or derived from internal or industry sources we believe to be reliable. Market data used throughout this prospectus was obtained from independent industry publications and other publicly available information. Such data, as well as internal surveys, industry forecasts and market research, while believed to be reliable, have not been independently verified. In addition, in certain cases we have made statements in this prospectus regarding our industry and position in the industry based upon our experience and our own investigation of market conditions. We cannot assure you that any of these assumptions are accurate or correctly reflect our position in the industry, and none of our internal surveys or information has been verified by independent sources.

Market data are inherently predictive and speculative and are not necessarily reflective of actual market conditions. Such statistics are based on market research, which itself is based on sampling and subjective judgments by both the researchers and the respondents, including judgments about what types of products and transactions should be included in the relevant market. In addition, the value of comparisons of statistics for different markets is limited by many factors, including that (1) the markets are defined differently, (2) the underlying information was gathered by different methods and (3) different assumptions were applied in compiling the data. Accordingly, the market statistics included in this prospectus should be viewed with caution.

Certain Terms Used in this Prospectus

We have prepared this prospectus using a number of conventions, which you should consider when reading the information contained herein. Relatedly, please note that a reference to a particular law (i) includes a reference to any constitutional provision, subordinate legislation, treaty, decree, convention, statute, regulation, rule, ordinance, proclamation, by-law, judgment, rule of common law or equity, or rule of any applicable stock exchange; (ii) is a reference to that law as amended, consolidated, supplemented, re-enacted, or replaced; and (iii) is a reference to any regulation, rule, ordinance, proclamation, by-law, or judgment made under that law. In this prospectus:

Our Operating Companies, Projects and Regions

Industry Terms

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by, and should be read in conjunction with, the more detailed information and financial statements included elsewhere in this prospectus. In addition to this summary, we urge you to read the entire prospectus carefully, especially the risks of investing in our securities, discussed under “Risk Factors,” before deciding whether to buy our securities.

Overview

We develop, design, and build globally relevant power generation solutions, supporting our clients with the transition to cleaner energy and developing our own energy focused projects. We are trusted to solve complex energy transition challenges through ingenious, tailored solutions. We create new growth opportunities for our clients, partners, and employees in the communities where they live and work, while delivering increased shareholder value. We provide contracting (service and maintenance, plan operation, repair and upgrade and new installations), consulting (audits and compliance, design and engineering, procurement and project management) and construction (renovation and refurbishment, temporary support services, fit-outs and new building) services in the building services and power generation sectors.

We have historically concentrated operations in Papua New Guinea (PNG) and have seven years of operating experience delivering significant energy and construction focused projects, including a 45-megawatt (MW) gas-fired power station which delivers electricity for our client and the national utility (PNG Power Limited) to feed into the Port Moresby power grid, greatly reducing the utility’s reliance on diesel generation. We believe that our proprietary power generation technology, specifically our Power Island Floating Storage, Regasification, and Power Generation (Power Island FSRP) technology has widespread applicability to, and significant expansion opportunities for, both regional and global communities, especially in island and coastal regions, and is expected to be a key pillar of our sustainable energy transition focus. The engineering designs for this have all been reviewed and verified by an independent engineer and we are in the process of protecting the related intellectual property.

Our energy business has delivered aggregate revenues of $89 million and $16.7 million in net income over the last three fiscal years ended December 31, 2021. For the six months ending June 30, 2022, our energy business delivered $4.3 million revenue and $0.9 million in net income. We have an established track record of successfully working with major clients, suppliers, and partners, such as the Bank of South Pacific, Exxon Mobil Corporation, Solar Turbines Incorporated, which is a wholly-owned subsidiary of Caterpillar Inc., Hitachi ABB Power Grids, and Emerson Electric Co., as well as state owned enterprises, sovereign wealth funds, and the PNG national utility. Accordingly, we have a strong local presence in PNG and believe that we are well positioned to capitalize on the increasing economic development, urbanization, and demand for electrification across PNG, the wider APAC region, and beyond.

We currently have a strong pipeline of multiyear, national PNG projects, which we expect will deliver significant continued earnings growth for our business. The time between contract award, notice to proceed, and completion varies by customer and project. As we secure projects, we build our backlog of unbilled revenue and as we execute on projects, we deplete our backlog of unbilled revenue. New and continuing projects from existing customers and business development efforts fuel the growth of our backlog. As of December 31, 2021, we had $258.7 million of backlog representing a 170% increase from our backlog of $95.7 million as of December 31, 2020 driven primarily by the signing of the design, supply, and construction contracts for a 66 MW gas-fired power plant using the local liquefied natural gas (LNG) supply in the PNG Hela region. We have been directed by the PNG government National Executive Council to hold discussions and negotiations for a PNG wide deployment of our Power Island FSRP technology, which would provide a floating LNG power generation solution, to deliver the additional capacity needed to meet electrification targets throughout PNG, including to support existing and new mining projects. Our backlog at June 30, 2022 was $373.0 million, a 44% increase from December 31, 2021, driven by the signing of the O&M contracts for the Hela Project.

Beyond taking steps to solidify our strong local presence and position to take advantage of the increasing economic development, urbanization, and demand for electrification across PNG and the wider APAC region, we are also actively working to secure several opportunities that, if secured, are expected to expand our geographic footprint and diversify our industry presence. We are developing a geothermal energy project located in Germany and we are developing more renewable energy projects worldwide, with a solar project under discussion in Indonesia pursuant to a signed agreement to collaborate with PT SSP and submission of a proposal to interested parties in Australia concerning a mix of solar, wind, and hydrogen sources, both of which are planned under a build, own, and operate model with a planned twenty-year power purchase agreement (PPA).

We are focused on developing projects that support the energy transition to a cleaner, healthier future and improving electrification to regions that frequently do not have access to reliable energy sources. We recognize that the shift to green energy is a journey and that there is no single solution which fits every situation. Countries are naturally at different stages of development, both economically and infrastructure-wise, and there are a host of geographical and technical aspects to consider when assessing electrification solutions.

In much of the APAC region, there are numerous smaller islands and coastal communities that require electricity, but are unable to connect to larger, national grids, due either to topography or separation by waterways including rivers, seas, and oceans that does not readily permit the construction of transmission lines. In our experience, such locations typically do not require, and it is traditionally uneconomical to develop, large power plants that can run on natural gas or conventional renewable energy sources, such as solar and wind, which we have found require too much land to generate the necessary power, do not provide the reliability a base load needs, and require regular maintenance to remain operational. This has been the collective observation of our management team based on their experiences in the industry for countries such as PNG, Indonesia, Philippines, Vietnam, and Thailand, and is also likely to be applicable in other areas of the Pacific, the Caribbean, and even the United States. Our management team has also observed that many of these countries use subsidized oil or diesel fuels to provide localized generation which results in high costs, poor reliability and availability, and, perhaps more importantly, exposes local communities to environmental damage. We believe that our proprietary power generation technology, specifically our Power Island FSRP technology, discussed below under “Business – Our Technology and Projects Under Development – PAWA PNG Power Island Project,” would provide a cleaner, more stable source of power to these communities. Our preliminary internal assessment indicates that our proprietary Power Island FSRP facility could provide a 25% increase in fuel efficiency as compared to diesel reciprocating engine technology, based on the evaluation of our estimates of our Power Island FSRP solution’s proprietary design and combined cycle capabilities, and published data for combined cycle capabilities demonstrate that efficiency in comparison with the manufacturers published efficiency data for a comparable multi-fuel reciprocating diesel generators currently in use in PNG, which would further reduce harmful environmental emissions such as nitrogen oxide (NOx). To the extent that hydrogen logistics infrastructure develops, this solution could provide a pathway to effective remote green energy generation, a roadmap for which could be compared to the development of electric vehicles and EV charging stations.

Developed nations also face similar challenges, especially where industrial applications are needed to be located well away from population centers and energy infrastructure, for example for mining operations in the Australian outback, well away from population centers in Australia. Based on the collective observation of our management team from their experiences in the industry, while LNG remains a viable option, this becomes a complex delivery operation over a long distance, requires long-term, locked-in contracts, and still has associated carbon impacts. The desire to further reduce the carbon footprint of operations, combined with the social and economic incentives to do so, is providing a significant driver for the energy mix to be reconsidered, including improving battery storage solutions and newer technologies such as hydrogen being utilized alongside renewable energy sources such as wind and solar. With recent global shocks from the COVID-19 pandemic’s impact on global shipping and associated supply shortages, and more recently the war in Ukraine, countries and industries are taking a renewed look at their energy security versus a reliance on foreign sourced fuels, which will have an increasing impact on the decision-making processes moving forward for energy generation solutions.

According to a March 16, 2022 article on the Word Economic Form (weforum.org), climate change initiatives and the desire to reduce carbon emissions have continued to gain momentum in recent years leading up to the United Nations Climate Change Conference COP26, propelling the change in the mix of fuel sources used in power generation toward cleaner and more sustainable energy sources, examples of which include recent agreements between the USA and China to stop new investments in Coal fired power plants, and a move away from coal power plants as observed by the World Economic Forum. According to Deloitte’s Industry Outlooks 2021: Power, Utilities & Renewables report, businesses, states, cities, and utilities continued to announce decarbonization plans in 2020, with many utilities and their customers announcing and accelerating plans to fully decarbonize over the next three decades. Growing demand for clean energy persists, with renewables reporting rising levels of usage and capacity as well as declining costs. Potential new governmental and policy initiatives, including from the United States rejoining the Paris Agreement, could drive even further growth in renewable energy infrastructure. According to a January 2021 report by BloombergNEF, global investment in low-carbon energy transition projects exceeded $501 billion in 2020, a 9% increase from 2019, with renewables totaling $304 billion of the total global 2020 investment, for which wind and solar were the primary drivers, and according to a January 2022 article by BloombergNEF, global investment in low-carbon energy transition projects reached a new record totaling $755 billion in 2021. We believe that cleaner technology implementation and construction opportunities exist in a wide variety of industries, including in the renewable energy industry, as governments and power companies explore ways to reduce their carbon footprint and fulfill increased energy demands, especially in the wake of the deterioration and abandonment of existing coal-fired power plants in certain regions that has been observed by our management team from their experiences in the industry. The low price and environmental advantage of cleaner burning natural gas is expected to continue to drive demand for gas-fired electrical generating plants, at least as a transitionary step to long-term targets, alongside conversions of diesel or coal-fired power plants to natural gas and an increasing role for renewables.

We have enjoyed significant growth since our founding. Over the past three fiscal years, we have experienced a compound annual growth rate (CAGR) of 63% on our backlog. A majority of our large projects are either self or co-developed or are awarded through a selective tender process among preferred suppliers, contributing to our strong pipeline of projects. Additionally, given our previous and current projects, we believe that we are now well-positioned to develop long-term recurring revenue and net income based on long-term operation and maintenance (O&M) contracts as well as taking ownership positions in the projects we develop.

The following are pictures of some of these projects to-date:

These graphics depict our Dirio Power Station project, as described in more detail beginning on page 69. Construction on such project was substantially completed in November 2020, prior to the availability of transmission lines, which were to be provided by the PNG Power Limited, the PNG national utility. The underlying power plant was ultimately connected to the power grid in November 2021. The Dirio Power Station project was developed in collaboration with Dirio Gas & Power Company Limited.

Our Strengths

Delivering tailored power generation solutions in challenging conditions

The International Energy Agency (IEA), in its December 2020 Electricity Market Report, has forecast that developing and emerging economies will see demand growth outpace increases in renewables and nuclear supplies, leaving some room for coal and gas generation to expand in the immediate future. As developing countries continue to grow, their demand for energy to support urbanization and industrialization is ever increasing. It has been the collective observation of our management team based on their experiences in the industry that these developing nations where we have worked are striving to balance the need for affordable scalable power generation with a desire for greener generation solutions. Our business model strives to help our clients strike this balance.

We deeply understand and appreciate that there is no single power infrastructure solution that is suited to every location, and, accordingly, we know that there are multiple factors that must be considered. Implementing the correct technology mix in the appropriate location is crucial to deploying as reliable, cost-effective, and sustainable a solution as possible to meet a country’s/client’s energy needs. For example, the scalability and reliability of renewables can be a critical challenge that can push a developing country toward reliance on coal and diesel, which are less environmentally friendly, as has been the case in places such as Indonesia and the Philippines, based on the collective observation of our management team from their experiences in the industry in these countries.

We have broad experience and have established relationships with key suppliers across a range of generation technologies, allowing us to execute unique and/or advanced technologies in innovative combinations to deliver tailored and optimized solutions appropriate to a particular location. We believe that there is a wide range of opportunities to utilize our approach of developing and implementing tailored cleaner technology energy solutions combined with our experience of working in remote and very challenging environments to deliver solutions on a global basis.

Unique IP for coastal/island communities which delivers environmentally friendly, cost-effective energy

For sites with challenging geography and distributed populations across remote coastal communities, we believe that our Power Island FSRP technology will deliver a scalable, environmentally friendly, cost-effective solution to power generation for such communities leveraging LNG instead of the higher carbon emitting fuels that are currently being used (typically diesel or oil-fired generators) as has been observed by our management team based on their extensive experience in the industry in many developing countries. We believe that our Power Island FSRP technology is scalable, can provide hundreds of MWs of fuel-efficient power for dispersed communities and energy independence for developing nations.

We believe that there are significant opportunities to utilize our Power Island FSRP technology in similar coastal or island communities across the APAC region and beyond, including the Caribbean and Maldives.

Strong existing business with a pipeline of multiyear projects that are expected to deliver significant revenue growth

Our business is supported by long-term projects in which we are able to selectively participate by (i) ownership in, (ii) engineering, procurement, and construction (EPC) of, and (iii) operations and maintenance of such projects and contracts in the power generation sector. These projects and contracts not only provide EPC and O&M revenues, but also allow us to consider and selectively take an ownership stake therein to further support our long-term financial performance. We have already secured two key multiyear, national PNG generation projects in respect of the Dirio Power Station project and Hela Power Station project, with an additional project under active discussion, which we expect to deliver significant continued earnings growth for our business. We expect to enter into significant partnerships with key players outside of PNG in the future, which we anticipate will expand our geographic footprint and power generation solutions for a broader range of industries, diversifying our revenue streams in terms of markets served.

Established network of key project partner and supplier relationships to support project procurement and execution

We have an established track record of successfully working with a diversified network of major partners and suppliers, which have been successfully operating for decades and which have a strong global presence. These key relationships have boosted our exposure to significant projects in the APAC area. For example, we have been awarded certain projects through a selective tender process among preferred suppliers, evidencing our strength as a partner and a service provider worthy of referral. Additionally, if any of our suppliers should become unavailable to us for any reason, because of our diversified network, we believe that there are a number of other suppliers that we believe can be contracted with expeditiously to supply the products or services that we need, ensuring successful project execution.

Highly experienced management team with significant technical and strategic know-how of power generation, driving business growth, successful public listings, and operating in emerging markets

We have a highly experienced senior management team, which combines global experience with a deep connection to the APAC region and boasts a profound understanding of local resources, needs, key players, and values. Our executive officers include the following:

Geoffrey Allan Lawrence – Our Chief Executive Officer, Geoffrey Allan Lawrence, has served as the CEO of APEV since its founding eight years ago and has overseen the growth of the group to date. Mr. Lawrence has joined T20 to continue to lead the energy focused business, he has developed an excellent network across PNG, and he has a strong set of high-level negotiation and account development skills, which have led to the establishment of crucial long-term relationships with major clients, suppliers, and partners upon which T20 has been built. He is also a board member of Kainantu Resources Limited, an Asia Pacific focused gold mining company which listed on the TSX in late 2020. Mr. Lawrence began his career in corporate sales, working with global industry leading organizations including Fuji Xerox, Ricoh, and Toshiba, before moving into supply chain solutions and logistics with UPS, where he was responsible for establishing, implementing, and streamlining complex logistics solutions for major corporations.

James Herbert Schnieders – Our President, James Herbert Schnieders, brings over 30 years of experience in international energy projects (especially in Asia) to direct our management team to deliver the long-term goals for our organization in alignment with the strategies and business objectives set out by our CEO and board of directors. Prior to joining T20, Mr. Schnieders held multiple senior executive roles with global infrastructure provider Black & Veatch. In his most recent role, as executive vice president and managing director for the floating oil and gas solutions unit at Black & Veatch, Mr. Schnieders oversaw all floating LNG projects as well as hydrogen and biofuel emerging markets. Previously, he served in multiple power generation, EPC focused leadership positions including as the Indonesia country manager for all Black & Veatch business lines’ operations and project execution in such country.

Iain John Deay – Our Chief Strategy and Development Officer and Chief Financial Officer, Iain John Deay, has over 20 years of experience across varied senior corporate finance, mergers and acquisitions, and commercial roles in both the United Kingdom and the APAC region. Immediately prior to joining T20, Mr. Deay was working as a strategic consultant to a range of clients in Singapore and Southeast Asia. Previously, he held a number of financial roles and then served as the business development director for Asia Pacific at a large multinational corporation with region-wide responsibilities across financial and commercial areas of the business as well as and supporting merger and acquisition activity. Mr. Deay is a qualified chartered accountant (fellow of Institute of Chartered Accountants in England and Wales) and holds a master’s degrees in engineering, economics, and management from Oxford University.

Greggory T. Bahora – Our Chief Operating Officer, Greggory T. Bahora, has over 30 years’ hands-on experience in international power projects, construction, commissioning, and operations, and is responsible for managing T20’s business operations and performance including implementing strategies and optimizing our organization’s operational capabilities to deliver consistently outstanding results. Prior to joining T20, Mr. Bahora was vice president and director of power services for Black & Veatch, overseeing projects and employees across Asia. He brings more than three decades of experience in conventional and renewable power generation, water resources and floating LNG on multiple and concurrent projects across greater Asia. Mr. Bahora received a Bachelor of Science in mechanical engineering from Missouri University of Science and Technology, formerly known as University of Missouri—Rolla.

Nathan P. Daly – Our ESG Director and Company Secretary, Nathan Daly, is a co-founder and executive committee member of T20. He is responsible for management and leadership of the T20’s back-office functions, including human resources, information and communications technology, administration, and facilities, ensuring internal service delivery that enables and enhances departmental performance. Prior to co-founding T20, Mr. Daly co-founded several business ventures including a multi-disciplinary supplier of building and construction solutions, where he was the general manager and coordinated multiple stakeholders to successfully deliver major fit-out works for clients in the education and mining sectors. He has also played a leading role developing a consumer goods business from a basic concept to full-scale operation with national distribution and major accounts. Early in his career, Mr. Daly held business development and account management roles with NEC and Ricoh, while completing a Bachelor of Business majoring in management and human resources where he graduated with awards for academic excellence.

Peter L. Chiang – Our Commercial and Compliance Director, Peter Chiang, is responsible for leading T20 Holdings’ commercial, legal, and corporate governance matters, as well as assisting with the Company’s listing on the Nasdaq Capital Market. Prior to joining T20, Mr. Chiang held the role of associate vice president and commercial director for the Black & Veatch Power and Oil & Gas businesses in Asia, and was primarily responsible for negotiating and closing contracts as part of proposals and resolving all project commercial issues including claims administration and management, having initially joined as senior counsel for all Black & Veatch business in Asia including the Water and Management Consulting businesses. Prior to Black & Veatch, Mr. Chiang held positions as the sole in-house counsel for MWH (Montgomery Watson Harza, now a part of Stantec) in Asia and the sole in-house counsel and company secretary for a listed company on the Australian Stock Exchange. Mr. Chiang brings more than two decades of experience in negotiating, closing and handling commercial, legal and corporate governance issues for engineering and construction companies across greater Asia.

Our management team has demonstrated the ability to realize our mission and rapidly build up the business to continue fulfilling our purpose.

Our Strategy

Our strategy is focused on building long-term revenues through the provision of multi-year O&M services and investing in project development to receive long-term equity returns. We intend to further integrate our EPC delivery capabilities with our O&M services to ensure the effectiveness of our investments and to provide a full-suite offering to attract and retain clients and procure major projects. We will continue to operate in the PNG market as well as expand into new regional and international markets with a continued focus on developing and implementing environmentally friendly, cost-effective power generation solutions. We intend to aggressively grow our business through the following strategies:

Delivering environmentally conscious, technology agnostic power EPC solutions

A company’s commitments and policies around decarbonization and net zero targets, and broader sustainability efforts are gaining increasing focus with both consumers and investors, with environmental, social, and governance reporting gaining increased visibility and regulation. Accordingly, this scrutiny of a company’s carbon footprint across all areas of operations is having an ever-increasing real economic impact on an organization’s finances; both in terms of revenues and in the availability and cost of financing. This is significantly increasing the focus on carbon involved in power generation and industrial processes, and the economic impact of this is improving the viability of green technology adoption. The appropriate solution for any particular client depends upon a variety of factors and a focus upon a single technology would, based on the collective observation of our management team from their experiences in the industry in many countries, likely result in sub-optimal results in most cases, so we select the right solution for the circumstance, drawing on the full breadth of our supplier networks to deliver the most effective technologies and services for our clients.

Deploying our Power Island FSRP technology

We believe that our Power Island FSRP technology is a scalable and adjustable solution for delivering environmentally friendly, cost-effective energy, which can be adapted to meet various geographical and distribution challenges and changing demands. We are actively discussing the first rollout opportunity to deploy this technology in PNG and allow such technology to demonstrate that it can satisfy our expectations and greatly improve the ability of developing and emerging nations to be energy independent. We believe that there are a large number of similar locations around the globe where this technology could be implemented to provide a significant step forward over existing diesel generation solutions or where no access to electricity exists at all.

Further strengthening our power generation technology

We have a strong track record of developing and implementing innovative power generation solutions. Moving forward, we intend to focus on further strengthening our technological capabilities, specifically by critically analyzing the results of our technology deployments, broadening the applicability of our technology to other types of geographies and/or energy sectors, enhancing our partnership and collaborative opportunities, continuing to attract and retain key talent, and investing more in research, design, development, and testing activities to ensure that we stay at the forefront of technological development.

In the short term this will include exploring and developing hydrogen technologies, which our management team believes will be a significant disruptor to the energy sector in the coming decade. Once our ordinary shares are listed on the Nasdaq Capital Market, we believe our position will provide the opportunity to pursue targeted acquisitions to help expand our in-house technological capabilities and solutions.

Developing and refining a niche targeting of projects

Based on the collective experience of our management team based on their involvement in the industry in many countries, a large number of projects in the range of 20 MW to 80 MW, and some even larger, offer attractive returns for a lean and efficient organization without the overhead of a large, global multi-national entity in the power generation EPC space. In this niche, we operate with less competition allowing our core strengths to come to the forefront, delivering significant benefits to our clients and local populations.

Expanding into new regional and global markets

The local APAC region offers immediate expansion opportunities, beyond PNG, to implement our technology in countries facing similar generation challenges. Additionally, Southeast Asia is one of the few regions of the world where coal-fired generation has been expanding as the desire for cheap electricity has outweighed environmental concerns, with close to 20 gigawatts of new coal-fired generating capacity under construction, mostly in Indonesia, Vietnam, and the Philippines. Significantly more capacity is at the pre-construction stage, but some plans are being reconsidered and greater emphasis is being placed on natural gas as well as the expansion of renewables.

As an archipelago, Indonesia has not yet achieved 100% electrification, which is mainly due to the difficulty in electrifying remote islands. Those electrified to date primarily rely on diesel generation units, although the Indonesian government-owned utility Perusahaan Listrik Negara, which has a monopoly on electricity distribution in the country, is looking to convert to the use of natural gas. Indonesian government policy aims to increase the role of renewables in the power mix, increasing their share of primary energy supply from 9.15% in 2019 to 23% in 2025 and 31% in 2050 (according to the IEA).

We expect significant global expansion based upon our Power Island FSRP technology, the engineering designs for which have already been independently verified, is proven and deployed. We are actively discussing the opportunity to verify our technology in PNG, and perhaps soon also in Indonesia through our partnership development efforts there. We believe that, globally, any coastal or river-based community could benefit from our Power Island FSRP technology as a cost-effective, scalable power generation solution.

Summary of Risk Factors

Investing in our securities involves significant risks. You should carefully consider all of the information in this prospectus before making an investment in our securities. Below please find a summary of the principal risks we face, organized under relevant headings. These risks are discussed more fully in the section titled “Risk factors.”

Risks Related to Our Business and Industry.    See “Risk Factors — Related to Our Business and Industry” beginning on page 16 of the prospectus.

Risks and uncertainties related to our business and industry include, but are not limited to, the following:

Risks Related to Our Public Offering and Ownership of Our Securities.    See “Risk Factors — Risks Related to Our Public Offering and Ownership of Our Securities” beginning on page 36 of the prospectus.

In addition to the risks described above, we are subject to general risks and uncertainties related to our securities and this offering, including, but not limited to, the following:

Our Corporate Information

T20 Holdings Ltd. (formerly T20 Holdings Pte. Ltd.) (Company Registration No. 202207460E), a public company limited by shares, was incorporated in the Republic of Singapore on March 3, 2022, under the Companies Act 1967 of Singapore (the “Singapore Companies Act”).

Our registered and principal executive office is located at 3 Phillip Street, #19-01 Royal Group Building, Singapore 048693. Our telephone number at this location is +65 6920 2020. Our principal website is twenty20energy.com. The information on our website is not incorporated by reference into this prospectus, and you should not consider information contained on our website to be a part of this prospectus or in deciding whether to purchase our securities.

Company History, Structure and Reorganization

T20 Holdings was incorporated under the laws of Singapore on March 3, 2022 under the name T20 Holdings Pte. Ltd., pursuant to the Singapore Companies Act to serve as the holding company of T20 and its businesses, which shall be contributed to us by APEV prior to the completion of this offering through the Reorganization described in further detail in “Corporate Formation and Reorganization.” Our Singapore company registration number is 202207460E. We have converted to a public company under the Singapore Companies Act on August 5, 2022 and changed our name to “T20 Holdings Ltd.” in connection with this conversion.

The graphic below illustrates our corporate structure prior to, and immediately after, the completion of the Reorganization and the completion of the offering.

Prior to the Completion of the Reorganization and the Offering

After the Completion of the Reorganization and the Offering

Following the Reorganization, the companies within the T20 Group will be as follows:

After the Reorganization, Pacific Commercial Holdings Limited and PEC will remain wholly-owned by APEV. 

Controlled Company

Upon completion of this offering, and as long as our officers and directors, either individually or in the aggregate, own at least 50% of the voting rights of our Ordinary Shares, we are a “controlled company” as defined under Nasdaq Marketplace Rules.

For so long as we are a controlled company under that definition, we are permitted to elect to rely, and may rely, on certain exemptions from corporate governance rules, including:

Although we do not intend to rely on the “controlled company” exemption under the Nasdaq listing rules, we could elect to rely on this exemption in the future. If we elect to rely on the “controlled company” exemption, a majority of the members of our board of directors might not be independent directors and our Nominations and Governance Committee and Compensation Committee might not consist entirely of independent directors. (See “Risk Factors — Risks Related to Our Business and Industry — As a “controlled company” under the rules of the Nasdaq Capital Market, we may choose to exempt our company from certain corporate governance requirements that could have an adverse effect on our public shareholders.”)

Emerging Growth Company Status

We qualify as an “emerging growth company” (“EGC”) as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). We had less than $1.235 billion in revenue during our last fiscal year, and have not tripped any of the measures that would cause us to no longer qualify as an EGC. As such, we may take advantage of reduced public reporting requirements. These provisions include, but are not limited to:

We may take advantage of these provisions until the last day of our fiscal year following the fifth anniversary of the date of the first sale of shares pursuant to this offering. However, if certain events occur before the end of such five-year period, including if we become a “large accelerated filer,” if our annual gross revenues exceed $1.235 billion or if we issue more than $1.0 billion of non-convertible debt in any three-year period, we will cease to be an emerging growth company before the end of such five-year period.

Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended (the “Securities Act”), for complying with new or revised accounting standards. We have elected to take advantage of this extended transition period and acknowledge such election is irrevocable pursuant to Section 107 of the JOBS Act.

Implications of Being a Foreign Private Issuer

Upon consummation of this offering, we will report under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as a non-U.S. company with “foreign private issuer” status. Even after we no longer qualify as an emerging growth company, so long as we qualify as a foreign private issuer under the Exchange Act, we will be exempt from certain provisions of the Exchange Act and the rules thereunder that are applicable to U.S. domestic public companies, including:

We will file with the SEC, within four months after the end of each fiscal year (or as otherwise required by the SEC), an annual report on Form 20-F containing financial statements audited by an independent registered public accounting firm.

We may take advantage of these exemptions until such time as we are no longer a foreign private issuer. We would cease to be a foreign private issuer at such time as more than 50% of our outstanding voting securities are held by U.S. residents and any of the following three circumstances applies: (i) the majority of our executive officers or directors are U.S. citizens or residents, (ii) more than 50% of our assets are located in the United States or (iii) our business is administered principally in the United States.

Both foreign private issuers and emerging growth companies are also exempt from certain of the more extensive SEC executive compensation disclosure rules. Therefore, if we no longer qualify as an emerging growth company but remain a foreign private issuer, we will continue to be exempt from such rules and will continue to be permitted to follow our home country practice as to the disclosure of such matters.

THE OFFERING

¹ 16,865,005 ordinary shares represents the number of shares issued in the company immediately before the offering and includes 15,083,498 shares issued as part of the Reorganization and 175,000 ordinary shares that vest upon completion of the offering and excludes 634,995 ordinary shares comprised of 109,995 shares issuable to an employee that conditionally vest over the next three years and 525,000 ordinary shares issuable to our counterparty on completion of the acquisition of the Traunstein project.

Unless we indicate otherwise or the context otherwise requires, all information in this prospectus assumes no exercise of the underwriters’ over-allotment option or the Representative’s Warrants, and excludes 809,995 shares which either vest upon completion of the offering or are reserved for issuance in the future.

Summary Consolidated Financial Data 

The financial data as of and for the six months ended June 30, 2022 and the balance sheet data as of June 30, 2022 are derived from our unaudited condensed consolidated financial statements included elsewhere in this prospectus. The financial data for the years ended December 31, 2021 and 2020 and the balance sheet data as of December 31, 2021 and 2020 are derived from our audited consolidated financial statements also included elsewhere in this prospectus. You should read this data together with our consolidated financial statements and related notes included elsewhere in this prospectus and the information under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Our historical results are not necessarily indicative of our results in any future period and results from our interim period may not necessarily be indicative of the results of the entire year.

RISK FACTORS

Investing in our securities is highly speculative and involves a significant degree of risk. You should carefully consider the following risks, as well as other information contained in this prospectus, before making an investment in our Company. The risks discussed below could materially and adversely affect our business, prospects, financial condition, results of operations, cash flows, ability to pay dividends and the trading price of our securities. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially and adversely affect our business, prospects, financial condition, results of operations, cash flows and ability to pay dividends, and you may lose all or part of your investment.

Risks Related to Our Business and Industry

The COVID-19 pandemic’s adverse impacts on our business, financial position, results of operations, and prospects could be significant.

The COVID-19 pandemic has created extensive disruptions to the global economy and to the lives of individuals throughout the world. Governments, businesses and the public have taken unprecedented actions to contain the spread of COVID-19 and to mitigate its effects, including quarantines, travel bans, shelter-in-place orders, closures of businesses and schools, fiscal stimulus, and other regulatory changes. A number of governments and organizations have revised gross domestic product, or “GDP” forecasts downward in response to the economic slowdown caused by the spread of COVID-19, and it is possible that the COVID-19 outbreak will cause a prolonged global economic crisis or recession. While the scope, duration and full effects of COVID-19 are rapidly evolving and not fully known, the pandemic and related efforts to contain it have disrupted global economic activity, adversely affected the functioning of financial markets, impacted interest rates, increased economic and market uncertainty, and disrupted trade and supply chains. Resurgence of the virus or a variant of the virus that causes a rapid increase in cases and deaths and if measures taken by governments fail or if vaccinations are not administered as planned, may cause significant economic disruption in PNG and in the rest of the world. If these effects continue for a prolonged period or result in sustained economic stress or recession, many of the risk factors identified in this prospectus could be exacerbated and such effects could have a material adverse impact on us.

For example, the completion of our Switchyard project at Caution Bay, Central Province in PNG, was impacted by reductions in global logistics capacity and required a specific chartered vessel to deliver the equipment from Italy to PNG when the scheduled service cancelled its port call due to a lack of freight and no alternate vessel scheduling would allow the delivery timeframes to be met.

However, we do not view the impact of COVID-19 as a material trend or uncertainty due to the fact that infection and mortality rates for COVID-19 are declining as vaccinations increase globally, many countries have removed or are loosening travel restrictions / quarantine requirements and many countries are preparing for, or experiencing, employees returning to the office. We anticipate continuing uncertainty arising from global economic factors such as upward inflationary pressure leading to possible recessions, even as global supply and logistics gradually resolve bottlenecks and demand pressure that are attributable, in part, to the easing of the COVID-19 pandemic. The adverse impacts from COVID-19 must also be viewed in the context of significant geo-political events such as the war in Ukraine, which has exacerbated difficulties in global supply and logistics leading to delays in delivery of equipment and materials for T20’s ongoing projects and operations and increased fuel costs which have been absorbed by T20’s ongoing projects and operations.

Delays in obtaining, or a failure to maintain, governmental approvals and permits required to construct and operate our projects may adversely affect the development, construction and operation of our projects.

The design, construction and operation of our projects are highly regulated, require various governmental approvals and permits, and may be subject to conditions that may be stipulated by relevant government authorities which vary from country to country. There can be no assurance that all permits required for a given project will be granted in time or at all. If we fail to obtain or renew such licenses, approvals, registrations and permits in a timely manner, we may not be able to commence or continue operating our projects in accordance with our contracted schedules or at all, which could adversely affect our business and results of operations. An example of such delay is the building board approval required for the Central Province of PNG which was needed for the Dirio Power Station buildings and was obtained after construction had commenced. In such circumstances, we may have to begin the development of projects while the relevant approvals are pending. In the event the approvals are not obtained, we may not be able to recover any of our costs incurred and may be responsible for undoing any work performed. Further, since 2020, there have been delays in getting government approvals in PNG as many government offices have been shut or operating with reduced staffing because of a rise in COVID-19 infections in PNG which has impacted our ability to commence, negotiate and commission projects in a timely way.

Our business has grown rapidly since its inception, and it may not be able to sustain its rate of growth.

Although our project portfolio has grown considerably since 2018, we may not be able to grow at similar rates in the future. Although we intend to continue to expand our business significantly with a number of new projects in both existing and new geographies, as well as new markets including Indonesia, Germany, and Australia, we may not be able to sustain our historical growth rate for various reasons. Success in executing our growth strategy is contingent upon, among others:

Our existing operations, personnel and systems may not be adequate to support our growth and expansion plans and we may make additional investments in our business systems, operational procedures and business processes, and manage our employee base in order to expand our project development efforts. As we grow, we also expect to encounter additional challenges in relation to project selection, construction management and capital commitment processes, as well as our project financing capabilities. These factors may restrict our ability to take advantage of market opportunities, execute its business strategies successfully, respond to competitive pressures and maintain its historical growth rates.

We face significant competition in each of our markets.

Each of the markets in which we operate or plan to operate is competitive. We compete on the basis of, among other factors, price, performance, product and service quality, skill and execution capability, client relations, reputation and brand, and health, safety and environmental record. We face significant competition from both local and international players. Some of these competitors may have greater resources than us or specialized expertise in certain sectors. In addition, a portion of our business is derived from open bidding processes which can be highly competitive. Certain of our markets are highly fragmented with a large number of companies competing for market share. Our competitors may be more inclined to take greater or unusual risks or accept terms and conditions in a contract that we might not deem acceptable. Moreover, we cannot assure you that we will not face new competition from industry players entering or expanding their operations in our markets. If we are unable to compete effectively, our ability to continue to grow our business or maintain our market share would be affected.

In addition, because one of the factors on which we generally compete is price, increased competition could impact our operating margins. Accordingly, our business and financial performance could be adversely affected by competition in our markets.

Our business, including a significant portion of our revenue and accounts receivables, currently has a high dependency on a single customer, the loss of which may adversely impact our future performance.

Our revenues for the six months ended June 30, 2022, and for the years ended December 31, 2021 and 2020, had a significant dependency upon a single client, which accounted for 95%, 97% and 99% of our revenues in those periods, respectively. There are inherent risks whenever a large percentage of total revenues are concentrated with one or a limited number of customers. It is not possible for us to predict the future level of demand for our services that will be generated by these customers or the future demand for the products and services of these customers. If this customer experiences declining or delayed sales due to market, economic, or competitive conditions, we could be pressured to reduce the prices we charge for our services which could have an adverse effect on our margins and financial position and could negatively affect our revenues and results of operations and/or trading price of our Ordinary Shares. Furthermore, there is inherent risk associated with accounts receivable concentration as a deterioration in the financial condition of a limited number of account debtors, or any other factor which affects their ability or willingness to pay, could in turn have a material adverse effect on our financial condition.

Our success depends on key personnel.

Our success depends, to a significant degree, upon the services of our senior management, board of directors and other key personnel (including, among others, our Chairman and our Chief Executive Officer). We cannot assure you that we will be successful in retaining our current senior management or members of our board of directors, nor can we assure you that, in such event, we would be able to find suitable replacements. The loss of the services of some of our senior management or members of our board of directors could have a material adverse effect on our business and financial performance. In addition, the success of our business depends on our ongoing ability to attract, train and retain qualified engineers and other personnel. In recent years, the availability in PNG of qualified personnel who have the necessary expertise and experience has been lower than demand and, therefore, competition for human resources has become intense. We cannot assure that we will be able to hire and retain the number of qualified personnel required to meet the needs of, or to grow, our business. If we are unable to attract, train and retain the qualified personnel that we require at reasonable cost, our business and financial performance could be adversely affected.

Our success depends, to a large extent, on our reputation for the quality, reliability, timely delivery and safety of our products and services.

We believe that our track record and reputation are key factors in our clients’ evaluation of whether to engage our services and purchase our products, encouraging key industry players to partner with us, and recruiting and retaining talented personnel to our company. Our reputation is based, to a large extent, on the quality, reliability, timeliness and safety of our products and services. If our products do not meet expected standards or we fail to meet our deadlines, our relationship with our clients and partners could suffer, the reputation of our company could be adversely affected, we may not be invited to new bidding processes and our ability to capture new business could be severely diminished.

The nature of our business exposes us to potential liability claims and contract disputes.

We may be subject to a variety of legal or administrative proceedings, liability claims or contract disputes. The government, clients and other third parties may present claims against us for injury or damage caused, directly or indirectly, by our operations, for example for alleged failures in our engineering and construction or the operation of our infrastructure assets we manage. Although we have adopted a range of insurance, risk management and risk avoidance programs designed to reduce potential liabilities, a catastrophic event resulting from the services we have performed or products we have provided could result in significant professional or product liability, warranty or other claims against us as well as reputational harm, especially if public safety is impacted. We may in the future be named as a defendant in legal proceedings where our clients or third parties may make a claim for damages or other remedies with respect to our projects or other matters. Any liability not covered by our insurance, or in excess of our insurance limits, could result in a significant loss for us, which may affect our financial performance.

We are susceptible to operational risks that could affect our business and financial performance.

Our business is subject to numerous industry-specific operational risks, including natural disasters, adverse weather conditions, operator error or other accidents, mechanical and technical failures, explosions and other events, many of which are beyond our control. Such occurrences could result in injury or loss of life, severe damage to and destruction of property and equipment, business interruption, pollution and other environmental damage, clean-up responsibilities, regulatory requirements, investigations and penalties, and potential liability claims and contractual disputes. In addition, such occurrences could materially impact our reputation. Although we maintain comprehensive insurance covering our assets and operations at levels that our management believes to be adequate, our insurance coverage will not be sufficient in all circumstances or to protect against all hazards. The occurrence of such an operational risk could have a material adverse effect on our business and financial performance.

We are subject to risks associated with climate change, including the potential increased frequency and severity of weather events and the losses resulting therefrom on our operations and infrastructure and the economies in the markets in which we operate or plan to operate in the future.

Climate change-related regulatory activity and developments may adversely affect our business and financial results by requiring us to reduce our emissions, make capital investments to modernize certain aspects of our operations and otherwise develop and deploy low-carbon and transitional technologies, purchase carbon offsets, otherwise pay for our emissions, or satisfy additional reporting requirements. Such activity may impact us indirectly by increasing our operating costs.

The potential physical effects of climate change, such as increased frequency and severity of storms, floods, fires, fog, mist, freezing conditions, sea-level rise, and other weather-related events, could affect our operations, infrastructure, and financial results. Operational impacts, such as the delay or cancellation of supply chain transportation, could result in loss of revenue. In addition, certain of our planned projects are in locations susceptible to the impacts of storm-related flooding and sea-level rise, which could result in costs and loss of revenue. There is a growing consensus today that climate change increases the frequency and severity of extreme weather events and, in recent years, the frequency of major weather events appears to have increased. We could incur significant costs to improve the climate resiliency of our infrastructure and otherwise prepare for, respond to, and mitigate such physical effects of climate change, including increased costs for insurance coverage in the aftermath of such effects. We are not able to accurately predict the materiality of any potential losses or costs associated with the physical effects of climate change with respect to our operations or the economies in our current or future market areas, but the increased frequency and severity of weather events could increase the negative impacts to economic conditions in these regions and result in a decline in the value or the destruction of our facilities and planned projects or affect our ability to utilize resources such as LNG in our proposed power generation solution. However, we have not experienced material physical effects of climate change on our operations and results to date, and, given that we are engaged in critical infrastructure projects, we intend to construct our power generating assets in accordance with prevailing standards in relation to structural integrity and environmental considerations.

Deterioration in our safety record could adversely affect our business and financial performance.

Our ability to retain existing clients and attract new business is dependent on our ability to safely operate our business. Existing and potential clients consider the safety record of their services providers to be of high importance in their decision to award service contracts. Many of our activities can be high risk by their nature. If one or more accidents were to occur at a site, the affected client may terminate or cancel our contract and may be less likely to continue to use our services. We cannot assure you that we will not experience accidents in the future, causing our safety record to deteriorate. Accidents may be more likely as we continue to grow, particularly if we are required to hire less experienced employees due to shortages of skilled labor. Moreover, often times we do not perform these activities by ourselves and accidents can happen due to errors committed by partners and subcontractors over whom we have no control. Because many of our clients require us to report our safety metrics to them as part of the bidding process and because a substantial part of our client base is comprised of major companies with high safety standards, a general deterioration in our safety record could have a material adverse impact on our business including our ability to bid for new contracts.

Any safety incidents or a deterioration in our safety record could adversely impact our ability to attract and retain qualified employees. In addition, we could also be subject to liability for damages as a result of accidents and could incur penalties or fines for violations of applicable safety laws and regulations.

Increases in the prices of energy, raw materials, equipment or wages could increase our operating costs.

Our business requires significant purchases of raw materials, components, and complex generation equipment. Certain of these inputs used in our operations are susceptible to significant fluctuations in commodity prices including among others copper, steel, and oil, over which we may have little control. Substantial increases in the prices of such commodities generally result in increases in our suppliers’ operating costs and, consequently, lead to increases in the prices they charge for their products. Moreover, we do not have long-term contracts for the supply of our key inputs, and, as result, if prices increase significantly or if we are required to find alternative suppliers, our costs to procure these inputs may increase significantly, though we generally aim to pass these increased costs along to our customers. In addition, growing demand for labor, especially when coupled with shortages of qualified employees in the countries where we operate, may result in significant wage inflation. To the extent that we are unable to pass along to our clients increases in the prices of our key inputs or increases in the wages that we must pay, our operating margins could be materially adversely impacted.

We may not be able to obtain financing on favorable terms.

Our ability to undertake large investments or consummate significant acquisitions will depend on the availability of equity and debt financing. We cannot assure you that we will be able to obtain new financings in the future on favorable terms or at all. Our ability to obtain financings will depend in part upon prevailing conditions in credit and capital markets, which are beyond our control. In addition, our ability to obtain new financing, or refinance existing debt, may at certain times be adversely affected by the cyclicality of our business, particularly our EPC segment. Furthermore, we cannot assure you that interest rates will not rise significantly in the future, which would impact our costs of funding. If adequate funds are not available, or are not available on favorable terms, we may not be able to make future investments or take advantage of acquisitions or other opportunities.

Some of our contracts with our customers can be cancelled on short or no advance notice in certain circumstances.

A portion of our revenue is attributable to revenues generated under O&M agreements, and these agreements can be cancelled on short or no advance notice in certain circumstances. Thus, our revenue can be subject to change as a result of customer cancellations. We occasionally experience cancellations in expected future work from O&M agreements and/or construction projects due to changes by our customers. There can be no assurance as to our customers’ requirements or if actual results will be consistent with the estimates included in our forecasts. If we fail to accurately forecast operating results, our business may suffer and the market price of our shares may decline.

We may not be able to recover on claims against clients for payment.

If a client fails to pay our invoices on time or defaults in making its payments to us, we could incur significant losses. We occasionally bring claims against clients for delayed payments, additional costs that exceed the contract price or for amounts not included in the original contract price, including change orders. These types of claims can occur due to matters such as owner-caused delays or changes from the initial project scope, and, occasionally, they can be the subject of lengthy proceedings. When these types of events occur and unresolved claims are pending, we may invest significant working capital in projects to cover cost overruns pending the resolution of the relevant claims. A failure to promptly recover on these types of claims and change orders could have a material adverse effect on our financial performance.

We may be held liable for environmental damage caused by our operations.

The nature of certain of our operations requires us to assume risks of causing environmental and other damages. We may be held liable for the environmental damage we cause, including the incidental consequences of human exposure to hazardous substances or other environmental damage. We may be subject to clean up costs or penalties in the event of certain discharges into the environment and/or environmental contamination and damage. Our environmental liability insurance may not be sufficient or may not apply to certain types of environmental damage. Any substantial liability for environmental damage could have a material adverse effect on our financial performance.

New environmental regulation as a result of climate change could impact our business and financial performance.

Growing concerns about climate change could result in the imposition of additional or more stringent environmental requirements or regulations. For example, there are ongoing international efforts to address greenhouse gas emissions, such as the Kyoto Protocol, which are in various stages of negotiation and implementation. If more stringent environmental regulation is adopted in the countries where we operate, we may be obliged to incur higher expenditures than anticipated, adversely affecting our financial performance. In addition, future remediation requirements in the event that we are found responsible for environmental damage may be substantial, which could impact our financial condition. Moreover, more stringent environmental regulation could increase the costs of projects for our clients or, in some cases, prevent a project from going forward, thereby potentially reducing the demand for our services. Accordingly, new environmental regulation could have a material adverse effect on our business and financial performance.

Increased attention to ESG matters may impact our business.

Increasing attention to climate change, increasing societal expectations on companies to address climate change, increasing investor and societal expectations regarding voluntary ESG disclosures, and potential increasing consumer demand for alternative forms of energy may result in increased costs, reduced profits, increased investigations and litigation, and negative impacts on our access to capital markets. Increasing attention to climate change, for example, may result in demand shifts for natural gas and additional governmental investigations and private litigation against us. To the extent that societal pressures or political or other factors are involved, it is possible that such liability could be imposed without regard to our causation of or contribution to the asserted damage, or to other mitigating factors.

In addition, organizations that provide information to investors on corporate governance and related matters have developed ratings processes for evaluating companies on their approach to ESG matters. Such ratings are used by some investors to inform their investment and voting decisions. Unfavorable ESG ratings and recent activism directed at shifting funding away from companies with energy-related assets could lead to increased negative investor sentiment toward us and our industry and to the diversion of investment to other industries, which could have a negative impact on our stock price and our access to and costs of capital, or negative tax or other cost consequences. Relatedly, we may need to devote future capital expenditures to improving our ESG credentials.

Our reliance on project-based revenue could challenge our ability to deliver year on year growth.

A substantial portion of our revenue is currently derived from project-based work rather than recurring revenues. While this has allowed a significant increase in our revenues, and a broadening of the expertise and capabilities we offer, it creates a challenge in delivering year on year growth. Additionally, while it is our intention to transition to a recurring revenue model built on long-term revenue streams, there can be no guarantee that this will occur as planned.

Our reliance on project-based revenue could result in period-to-period comparisons being unhelpful to investors.

While project revenues remain as the dominant revenue stream, there is a risk that period to period comparatives may not be helpful to investors in understanding the business and its financial performance. While other metrics such as our backlog do provide alternative data points for investors, these may not be sufficient to provide sufficient explanation to investors.

The contracts in our backlog may be adjusted, cancelled, or suspended by our clients and, therefore, our backlog is not necessarily indicative of our future revenues or earnings. Additionally, even if fully performed, our backlog is not a good indicator of future gross profit.

Our backlog represents the total dollar amount of revenues we expect to record in the future as a result of performing work under contracts that have been awarded to us. As of December 31, 2021, our backlog totaled approximately $258.7 million. Our backlog at June 30, 2022 has increased by 44% to $373.0 million. There is no assurance that our backlog will be realized as revenues in the amounts reported or, if realized, will result in profits. In accordance with industry practice, substantially all of our contracts are subject to cancellation, termination, or suspension at the discretion of the client. In the event of a project cancellation, we would generally have no contractual right to the total revenue reflected in our backlog. Projects can remain in backlog for extended periods of time because of the nature of the project and the timing of the services required by the project. The risk of contracts in backlog being cancelled or suspended generally increases during periods of widespread economic slowdowns and recessions, or in response to changes in commodity prices, and as a result, if the countries in which we operate experience a recession or economic slowdown, or the recent volatility in global commodity prices continues, this could have a material adverse effect on our results of operations and cash flows.

The contracts in our backlog are subject to changes in the scope of services to be provided as well as adjustments to the costs relating to the contracts. The revenue for certain contracts included in our backlog is based on estimates. Additionally, the way we perform on our individual contracts can affect greatly our gross margins and hence, future margins.

Variations in the cost of construction could negatively impact our EPC-related revenue.

We are exposed to construction cost risks that could be caused by various factors, including:

Additionally, we are responsible for all equipment and construction defects, potentially adding to the cost of construction of its projects. Although we generally obtain warranties from our equipment suppliers, we cannot assure that we will be successful with any warranty claims against our suppliers.

Doing business through joint ventures is a key part of our business and any disagreements or discontinuations could disrupt our operations, put assets at risk or affect the continuity of our business.

Joint ventures and partnerships are a key part of how we do business. While a joint venture partner may provide local knowledge and experience, entering into joint ventures often requires us to surrender a measure of control over the assets and operations devoted to the joint venture, and occasions may arise when we do not agree with the business goals and objectives of our partner, or other factors may arise that make the continuation of the relationship unwise or untenable. Any such disagreements or discontinuation of our relationship with the joint venture partner could disrupt our operations, put assets dedicated to the joint venture at risk, or affect the continuity of our business.

Strategic arrangements with joint venture partners could involve risks not otherwise present when we directly manage our operations, including, for example:

If we are unable to resolve issues with a joint venture partner, we may decide to terminate the joint venture and either locate a different partner and continue to work in the area or seek opportunities for our assets in another market. The unwinding of an existing joint venture could prove to be difficult or time-consuming, and the loss of revenue related to the termination or unwinding of a joint venture and costs related to the sourcing of a new partner or the mobilization of assets to another market could adversely affect our financial condition, results of operations or cash flows.

We have entered into a number of related party transactions and may continue to enter into related party transactions in the future.

In the ordinary course of our business, we have entered into transactions with related parties. There can be no assurance that we could not have achieved more favorable terms if such transactions had not been entered into with related parties. Furthermore, it is likely that we will continue to enter into related party transactions in the future. There can be no assurance that these or any future related party transactions that we may enter into, individually or in the aggregate, will not have an adverse effect on our business, financial condition and results of operations. Further, the transactions with our related parties may potentially involve conflicts of interest. Additionally, there can be no assurance that any dispute that may arise between our Company and related parties will be resolved in our favor. See “Related Party Transactions.”

We are leveraged.

As of December 31, 2021 and December 31, 2020, we had $2.23 million and $1.34 million of outstanding indebtedness on a consolidated basis, respectively. Some of our debt agreements include financial covenants, affirmative and negative covenants, and/or events of default or mandatory prepayments for contractual breaches, change of control events, and/or material mergers and divestments, among other provisions. For example, our property loans are secured against specific property assets. As of June 30, 2022 and June 30, 2021, we had $1.33 million and $3.75 million of outstanding indebtedness on a consolidated basis, respectively. 

We use our cash flow from operations or investing activities to make debt service payments, reducing our ability to use cash flow to fund our operations, capital expenditures or future business opportunities. In addition, all debts are secured by certain of our assets. The pledge of a portion of our assets to secure our debt has reduced the amount of collateral that is available for future secured debt or credit support as well as our flexibility in dealing with these secured assets. This level of indebtedness and related security, as well as the terms governing such indebtedness, could have other important consequences for us, including:

We could also provide performance, and other, guarantees, from time to time, in support of the financing and development of certain of our operating companies. However, as of June 30, 2022, December 31, 2021 and December 31, 2020, we had provided no performance, or other, guarantees.

We may incur unexpected warranty and performance guarantee claims that could materially and adversely affect our financial condition or results of operations.

In connection with our products and services, we may provide various system warranties and/or performance guarantees. While we generally are able to pass through manufacturer warranties we receive from our suppliers to our customers, in some circumstances, our warranty period may exceed the manufacturer’s warranty period or the manufacturer warranties may not otherwise fully compensate for losses associated with customer claims pursuant to the warranty or performance guarantee we provided. For example, most manufacturer warranties exclude many losses that may result from a system component’s failure or defect, such as the cost of de-installation, re-installation, shipping, lost electricity, lost renewable energy credits or other solar incentives, personal injury, property damage, and other losses. In addition, in the event we seek recourse through manufacturer warranties, we will also be dependent on the creditworthiness and continued existence of these suppliers. As a result, warranty or other performance guarantee claims against us could cause us to incur substantial expense to repair or replace defective products in our solar energy systems. Significant repair and replacement costs could materially and negatively impact our financial condition or results of operations, as well divert employee time to remedying such issues. In addition, quality issues can have various other ramifications, including delays in the recognition of revenue, loss of revenue, loss of future sales opportunities, increased costs associated with repairing or replacing products, and a negative impact on our reputation, any of which could also adversely affect our business or operating results.

We may have liabilities and obligations under O&M agreements that we enter into with our customers, which could have a detrimental financial impact on us if enforced.

We provide ongoing operating and maintenance services for our customers O&M agreements. Under the terms of these agreements, many of which are long-term, we have certain liabilities and obligations which could be enforced in the event of a breach of our responsibilities. If called, some of these obligations and liabilities could be material and negatively affect our results of operations or financial position.

Implementing our growth strategy requires significant capital expenditure and will depend on our ability to maintain access to multiple funding sources on acceptable terms.

We require significant capital for the installation and development of our projects and to grow our business. We believe that we have benefitted from a well-balanced mix of equity, corporate debt and project financing that has contributed to the rapid growth of our business. We might not be able to continue financing or refinancing our projects with an effective combination of equity and debt as we have done in the past and the interest rates and the other terms of available financing might not remain attractive. Any changes to our growth strategy could impair our ability to grow our portfolio of projects. In addition, rising interest rates could adversely affect our ability to secure financing on favorable terms and increase our cost of capital. Our ability to obtain external financing on favorable terms is subject to a number of uncertainties, including, our financial condition, results of operations and cash flows; interest rates; our ability to comply with financial covenants in other financing arrangements; our credit rating and those of our project subsidiaries; the general conditions of the global equity and debt capital markets and the liquidity in the market. If we are unable to obtain financing on attractive terms or sustain the funding flexibility we have enjoyed in the past, our business, financial condition, results of operations and prospects may be materially and adversely affected.

Our results of operations and financial condition are dependent upon the economic, environmental, social and political conditions in those countries in which we operate.

We have operating assets, and assets in advanced stages of construction in PNG, and we expect to have additional development projects in PNG and other countries, including Indonesia, Germany, and Australia, in the future. As a result, our results of operations are dependent upon the economic, social and political conditions in each of the countries in which we operate, and we are exposed to a variety of risks, including risks related to:

Additionally, our revenue is derived primarily from the demand for the sale of electricity, and the demand for electricity is largely driven by the economic, political and regulatory conditions of the countries in which we operate. Therefore, our results of operations and financial condition are, to a large extent, dependent upon the overall level of economic activity in these emerging market countries. Should economic or political conditions deteriorate in PNG, or in any of the other countries in which we operate, or in emerging markets generally, such an occurrence could have a material adverse effect on our business, financial condition, results of operations or liquidity.

We primarily operate, and expect to continue to operate, in emerging markets.

Our operation currently focuses in the emerging markets, including PNG, and this will continue to form a key area of our operations in the long-term. Investing in the securities of a company with operations in emerging markets generally involves a higher degree of risk than investing in the securities of a company with operations in more developed markets. For example, we are subject to increased political, social and economic instability, which may affect the economic results of the emerging markets in which we operate and which stems from many factors, including:

any of which could have a material adverse effect on our financial condition, results of operations or liquidity or the value of your investment in our securities.

Our expansion, development and acquisition strategy may be limited.

Our growth strategy contemplates (1) the expansion, construction or development and operation of power generation facilities and (2) the acquisition and development of operating companies in key growth markets. The ability to pursue such growth opportunities successfully will depend upon our ability to identify projects and properties suitable for expansion, construction or acquisition, and negotiate purchase or engineering, procurement and construction agreements on commercially reasonable terms. Due to growing environmental restrictions, transmission line saturation, obstacles for fuel transportation and a scarcity of places in which new plants may be located, the development of new assets in PNG, and in the countries in which we may operate in the future, are subject to increased developmental competition and may involve higher development costs than in the past, which could have an adverse impact on our strategy and business.

Additionally, we will rely significantly on our ability to successfully access the capital markets as a source of liquidity and funding, such reliance may be increased to the extent that we utilize cash from our operations to distribute funds to our shareholders or repay loans. Our ability to arrange financing with no or limited recourse, and the costs of such capital, are dependent upon numerous factors, some of which are beyond our control. Commercial lending institutions sometimes refuse to provide financing in certain less developed economies, and in these situations we may seek direct or indirect (through credit support or guarantees) project financing from a limited number of multilateral or bilateral international financial institutions or agencies. As a precondition to making such project financing available, the lending institutions may also require sponsor guarantees for completion risks and governmental guarantees of certain business and sovereign related risks. However, the financing from international financial agencies, or governmental guarantees, required to complete projects may not be available when needed. If so, we may have to abandon potential projects or invest more of our own funds, which may not be in line with our investment objectives and would leave less funds for other investments and projects.

An inability to identify and source appropriate projects / acquisitions, negotiate the agreements relating to such projects / acquisitions, or secure the necessary funding, could have an adverse impact on our strategy and, as a result, could have a material adverse effect on our business.

If we are deemed to be an investment company under the Investment Company Act of 1940, we may be required to institute burdensome compliance requirements and our activities may be restricted.

If we are deemed to be an investment company under the Investment Company Act of 1940, our activities may be restricted, including:

In addition, we may have imposed upon us burdensome requirements, including:

In order not to be regulated as an investment company under the Investment Company Act of 1940, unless we can qualify for an exclusion, we must ensure that we are engaged primarily in a business other than investing, reinvesting, or trading in securities and that our activities do not include investing, reinvesting, owning, holding, or trading “investment securities” constituting more than 40% of our total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis.

While we will have investments in projects we develop, either through purchase or as a result of the structuring of a particular project, investments will not be our primary business, and thus we do not believe that our anticipated principal activities will subject us to the Investment Company Act of 1940. As more fully disclosed herein, we are engaged in the business of developing energy projects and solutions. Any investments in projects will be incidental to our ongoing business and not our principal business. While there may be times where project investments exceed 40% of the value of our total assets because we do not maintain significant assets, beyond construction related materials and equipment, this does not change the fact that such investing is not our principal business.

Future expansion into new markets or businesses involve significant costs and risks, and may be unsuccessful.

We are constantly monitoring and assessing development and acquisition opportunities. In particular, we may seek to diversify and expand our operations to certain countries in which we do not currently have a presence, such as Indonesia, Germany, and Australia, through acquisitions and joint venture of development projects.

In entering into new markets, we would face managerial, commercial, technological and regulatory risks. The business strategies, managerial expertise and institutional knowledge that we utilize and have developed over time with regard to construction of power generation development projects in the countries in which we currently operate may not be applicable to the countries in which we are considering expansion.

As expansion into a new market or business will require significant investment of capital and management resources, such expansions will involve many risks, including risks related to:

If we do acquire companies or assets in the businesses, or in new markets such as Indonesia and Germany, we cannot provide assurance that such expansion of our business will be successful. The process of integrating acquired operations, personnel and information systems and commencing commercial operations could involve significant costs and absorb management time and resources and otherwise distract management from other opportunities or problems in our primary market, PNG. If we are unsuccessful in any attempt to expand into new markets or businesses, this may have a material adverse effect on our material adverse effect on our business, financial condition, results of operations or liquidity.

We may not have sufficient insurance to protect ourselves against substantial losses.

We have insurance policies to provide coverage against certain potential risks, such as property damage and personal injury. We are also in the process of obtaining Directors and Officers Liability Insurance for our board and management team. However, we cannot guarantee that our insurance coverage will always be available or will be sufficient to cover possible claims for these risks. In addition, there are certain types of risk that might not be covered by our policies, such as war, acts of nature, force majeure or interruption of certain activities. Moreover, we might be obliged to pay fines and other penalties in the event of delays in project delivery, and such penalties are not covered by our insurance policies. Additionally, we may not be able to renew our current insurance policies under the same terms or at all. Risks not covered by our insurance policies or the inability to renew policies on favorable terms or at all could adversely affect our business and financial condition.

Our industry and the broader global economy have experienced higher than expected inflationary pressures in the first three quarters of 2022, related to continued supply chain disruptions, labor shortages and geopolitical instability. Should these conditions persist our business, results of operations and cash flows could be materially and adversely affected.

The first three quarters of 2022 have seen significant increases in the costs of certain materials, including steel and fuel, as a result of availability constraints, supply chain disruption, increased demand, labor shortages, high inflation and other factors. Supply and demand fundamentals have been further aggravated by disruptions in global energy supply caused by multiple geopolitical events, including the ongoing conflict between Russia and Ukraine. We have experienced the impact of this with cost increases seen in our procurement activities up to 15% above the expected procurement costs which adversely impacts our operation which in turn impact upon our profitability. Service and materials costs have also increased accordingly with general supply chain and inflation issues seen throughout the industry leading to increased operating costs. Recent supply chain constraints and inflationary pressures may continue to adversely impact our operating costs and may negatively impact our ability to procure materials and equipment in a timely and cost-effective manner, if at all, which could result in reduced margins and production delays and, as a result, our business, financial condition, results of operations and cash flows could be materially and adversely affected.

The conflict in Ukraine and related geopolitical instability could negatively impact our business.

In late February 2022, Russia launched significant military action against Ukraine. The conflict has caused, and could intensify, volatility in oil, gas and LNG prices, and the extent and duration of the military action, sanctions and resulting market disruptions could be significant and could potentially have a substantial negative impact on the global economy and/or our business for an unknown period of time. Any such volatility and disruptions may also magnify the impact of other risks described under “Risk Factors” in this prospectus.

Economic uncertainty may affect our access to capital and/or increase the costs of such capital.

Global economic conditions continue to be volatile and uncertain due to, among other things, consumer confidence in future economic conditions, fears of recession and trade wars, the price of energy, fluctuating interest rates, the availability and cost of consumer credit, the availability and timing of government stimulus programs, levels of unemployment, increased inflation, and tax rates. These conditions remain unpredictable and create uncertainties about our ability to raise capital in the future. In the event required capital becomes unavailable in the future, or more costly, it could have a material adverse effect on our business, results of operations, and financial condition. 

As a “controlled company” under the rules of the Nasdaq Capital Market, we may choose to exempt our company from certain corporate governance requirements that could have an adverse effect on our public shareholders.

Our directors and officers beneficially own a majority of the total voting rights of our Ordinary Shares. Under the Rule 4350(c) of the Nasdaq Listing Rules, a company of which more than 50% of the voting power is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements, including the requirement that a majority of our directors be independent, as defined in the Listing Rules, and the requirement that our Compensation Committee and Nominations and Governance Committee consist entirely of independent directors. Although we do not intend to rely on the “controlled company” exemption under the Nasdaq Listing Rules, we could elect to rely on this exemption in the future. If we elect to rely on the “controlled company” exemption, a majority of the members of our board of directors might not be independent directors and our Nominations and Governance Committee and Compensation Committee might not consist entirely of independent directors. Accordingly, during any time while we remain a controlled company relying on the exemption and during any transition period following a time when we are no longer a controlled company, you would not have the same protections afforded to shareholders of companies that are subject to all of the Nasdaq Capital Market corporate governance requirements. Our status as a controlled company could cause our Ordinary Shares to look less attractive to certain investors or otherwise harm our trading price.

For as long as we are an emerging growth company, we will not be required to comply with certain reporting requirements, including those relating to accounting standards and disclosure about our executive compensation, that apply to other public companies.

In April 2012, President Obama signed into law the JOBS Act. We are classified as an “emerging growth company” under the JOBS Act. For as long as we are an emerging growth company, which may be up to five full fiscal years of the closing of this offering, unlike other public companies, we will not be required to, among other things, (i) provide an auditor’s attestation report on management’s assessment of the effectiveness of our system of internal control over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act, (ii) comply with any new requirements adopted by the Public Company Accounting Oversight Board (“PCAOB”) requiring mandatory audit firm rotation or a supplement to the auditor’s report in which the auditor would be required to provide additional information about the audit and the financial statements of the issuer, (iii) provide certain disclosure regarding executive compensation required of larger public companies or (iv) hold nonbinding advisory votes on executive compensation. We will remain an emerging growth company for up to five years, although we will lose that status sooner if we have more than $1.235 billion of revenues in a fiscal year, have more than $700 million in market value of our Ordinary Shares held by non-affiliates, or issue more than $1.0 billion of non-convertible debt over a three-year period.

To the extent that we rely on any of the exemptions available to emerging growth companies, you will receive less information about our executive compensation and internal control over financial reporting than issuers that are not emerging growth companies. If some investors find our Ordinary Shares to be less attractive as a result, there may be a less active trading market for our Ordinary Shares and our share price may be more volatile.

Risks Related to Investments in a Singapore Company

We will be a foreign private issuer and, as a result, we will not be subject to U.S. proxy rules and will be subject to Exchange Act reporting obligations that, to some extent, are more lenient and less detailed than those of a U.S. issuer.

Upon consummation of this offering, we will be a foreign private issuer. As a result, we will be exempt from certain provisions of the Exchange Act that are applicable to U.S. public companies, including: the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of a security registered under the Exchange Act; the sections of the Exchange Act requiring insiders to file public reports of their share ownership and trading activities and liability for insiders who profit from trades made in a short period of time; and the rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form 10-Q containing unaudited financial and other specified information, or current reports on Form 8-K, upon the occurrence of specified significant events. In addition, we will not be required to provide as detailed disclosure as a U.S. registrant, particularly in the area of executive compensation. It is possible that some investors may not be as interested in investing in our Ordinary Shares as the securities of a U.S. registrant that is required to provide more frequent and detailed disclosure in certain areas, which could adversely affect our share price.

We may lose our foreign private issuer status, which would then require us to comply with the Exchange Act’s domestic reporting regime and cause us to incur additional legal, accounting and other expenses.

In order to maintain our current status as a foreign private issuer, either (1) a majority of our Ordinary Shares must be either directly or indirectly owned of record by non-residents of the United States or (2) (a) a majority of our executive officers or directors must not be U.S. citizens or residents, (b) more than 50 percent of our assets cannot be located in the United States and (c) our business must be administered principally outside the United States. If we lost this status, we would be required to comply with the Exchange Act reporting and other requirements applicable to U.S. domestic issuers, which are more detailed and extensive than the requirements for foreign private issuers. We may also be required to make changes in our corporate governance practices in accordance with various SEC rules and the NYSE American listing standards. The regulatory and compliance costs to us under U.S. securities laws if we are required to comply with the reporting requirements applicable to a U.S. domestic issuer may be higher than the cost we would incur as a foreign private issuer. As a result, we expect that a loss of foreign private issuer status would increase our legal and financial compliance costs. We also expect that if we were required to comply with the rules and regulations applicable to U.S. domestic issuers, it would make it more difficult and expensive for us to obtain director and officer liability insurance. These rules and regulations could also make it more difficult for us to attract and retain qualified Board members.

We are incorporated in Singapore and our shareholders may have more difficulty in protecting their interests than they would as shareholders of a corporation incorporated in the United States.

Our corporate affairs are governed by our constitution and by the laws governing companies incorporated in Singapore. The rights of our shareholders and the responsibilities of the members of our board of directors under Singapore law are different from those applicable to a corporation incorporated in the United States. Therefore, our public shareholders may have more difficulty in protecting their interest in connection with actions taken by us, our management, members of our board of directors or our controlling shareholder than they would as shareholders of a corporation incorporated in the United States. For example, controlling shareholders in corporations incorporated in Delaware are subject to fiduciary duties while controlling shareholders in Singapore companies are not subject to such duties.

In addition, only persons who are registered as shareholders in our register of members are recognized under Singapore law as shareholders of our company. Only registered shareholders have legal standing to institute shareholder actions against us or otherwise seek to enforce their rights as shareholders. Please see “Description of Share Capital – Comparison of Shareholder Rights” for a discussion of certain differences between Singapore and Delaware corporation law.

It may be difficult for you to enforce any judgment obtained in the United States against us, our directors, senior management or our affiliates.

As of the completion of this offering, we will be a public company limited by shares incorporated under the laws of Singapore. A majority of our directors and senior management reside outside the United States. In addition, a majority of our assets and the assets of those persons are located outside the United States. As a result, it may be difficult to enforce in the United States any judgment obtained in the United States against us or any of these persons, including judgments based upon the civil liability provisions of the United States securities laws. In addition, in original actions brought in courts in jurisdictions located outside the United States, it may be difficult for investors to enforce liabilities based upon United States securities laws.

There is no treaty between the United States and Singapore providing for the reciprocal recognition and enforcement of judgments in civil and commercial matters and a final judgment for the payment of money rendered by any federal or state court in the United States based on civil liability, whether or not predicated solely upon the federal securities laws, would, therefore, not be automatically enforceable in Singapore. It is not clear whether a Singapore court may impose civil liability on us or our directors and officers who reside in Singapore in a suit brought in the Singapore courts against us or such persons with respect to a violation solely of the federal securities laws of the United States. In making a determination as to enforceability of a judgment of a state in, or a federal court of the USA in the state of New York, the Singapore courts would have regard to, among others whether the judgment was final and conclusive, given by a court of competent jurisdiction, expressed to be for a fixed sum of money, whether it was procured by fraud, or in breach of principles of natural justice, or whether the enforcement thereof would be contrary to public policy. Accordingly, there can be no assurance that the Singapore courts would enforce against us, our directors or our officers resident in Singapore judgments obtained in the United States which are predicated upon the civil liability provisions of the federal securities laws of the United States.

We are subject to the laws of Singapore, which differ in certain material respects from the laws of the United States.

As a Singapore-incorporated public company , we are required to comply with the laws of Singapore, certain of which are capable of extra-territorial application, as well as our constitution. In particular, we are required to comply with certain provisions of the Securities and Futures Act 2001 of Singapore, or the SFA, which prohibit certain forms of market conduct and information disclosures, and impose criminal and civil penalties on corporations, directors and officers in respect of any breach of such provisions.

The laws of Singapore and of the United States differ in certain significant respects. The rights of our shareholders and the obligations of our directors and officers under Singapore law are different from those applicable to a U.S.-incorporated company in material respects, and our shareholders may have more difficulty and less clarity in protecting their interests in connection with actions taken by our management, members of our board of directors or our controlling shareholders than would otherwise apply to a U.S.-incorporated company. See “Description of Share Capital – Comparison of Shareholder Rights” for a discussion of certain differences between Singapore and Delaware corporation law.

In addition, the application of Singapore law, may in certain circumstances impose more restrictions on us, our shareholders, directors and officers than would otherwise be applicable to a U.S.-incorporated company. For example, the Singapore Companies Act requires directors to act with a reasonable degree of diligence and, in certain circumstances, imposes criminal liability for specified contraventions of particular statutory requirements or prohibitions. In addition, pursuant to the provisions of the Singapore Companies Act, shareholders holding not less than 10% of our total number of paid-up shares which carry the right of voting at general meetings may require the convening of an extraordinary general meeting of shareholders by our directors. If our directors fail to comply with such request within 21 days of the receipt thereof, the requisitioning shareholders holding more than 50% of the voting rights represented by the original requisitioning shareholders may proceed to convene such meeting, and we will be liable for the reasonable costs incurred by such requisitioning shareholders. We are also required by the Singapore Companies Act to deduct corresponding amounts from fees or other remuneration payable by us to such non-complying directors.

Singapore take-over laws contain provisions that may vary from those in other jurisdictions.

The Singapore Code on Take-overs and Mergers (the “Singapore Take-over Code”) applies to, among others, corporations with a primary listing of their equity securities in Singapore. While the Singapore Take-over Code is drafted with, among others, listed public companies in mind, unlisted public companies with more than 50 (fifty) shareholders and net tangible assets of S$5.0 million (approximately US$3,697,951) or more, must also observe the letter and spirit of the general principles and rules of the Singapore Take-over Code, wherever this is possible and appropriate. Public companies with a primary listing overseas may apply to Securities Industry Council (“SIC”) to waive the application of the Singapore Take-over Code. As at the date of this prospectus, no application has been made to SIC to waive the application of the Singapore Take-over Code in relation to us.

In this regard, the Singapore Take-over Code contains certain provisions that may possibly delay, deter or prevent a future take-over or change in control of us. Under the Singapore Take-over Code, except with the consent of the SIC, any person acquiring an interest, whether by a series of transactions over a period of time or not, either on his or her own or together with parties acting in concert with him or her, in shares carrying 30% or more of our voting rights is required to extend a take-over offer for all remaining shares in accordance with the procedural and other requirements under the Singapore Take-over Code. Except with the consent of the SIC, such a take-over offer is also required to be made if a person holding shares carrying between 30% and 50% (both inclusive) of our voting rights, either on his or her own or together with parties acting in concert with him or her, acquires additional shares representing more than 1% of our voting rights in any six-month period. While the Singapore Take-over Code seeks to ensure an equality of treatment among shareholders in take-over or merger situations, its provisions could substantially impede the ability of our shareholders to benefit from a change of control and, as a result, may adversely affect the market price of our Ordinary Shares and the ability to realize any benefits from a potential change of control.

Subject to the general authority to allot and issue new Ordinary Shares provided by our shareholders, the Singapore Companies Act and our constitution, our directors may allot and issue new Ordinary Shares on terms and conditions and for such purposes as may be determined by our Board in its sole discretion.

Under Singapore law, we may only allot and issue new shares with the prior approval of our shareholders in a general meeting. Subject to the general authority to allot and issue new Ordinary Shares provided by our shareholders, the provisions of the Singapore Companies Act and our constitution, we may allot and issue new Ordinary Shares on such terms and conditions and for such purposes as may be determined by our Board in its sole discretion. Any additional issuances of new Ordinary Shares may dilute our shareholders’ percentage ownership interests in our Ordinary Shares and/or adversely impact the market price of our Ordinary Shares.

We may be or become a passive foreign investment company, which could result in adverse U.S. federal income tax consequences to U.S. Holders.

The rules governing passive foreign investment companies (“PFICs”) can have adverse effects for U.S. federal income tax purposes. The tests for determining PFIC status for a taxable year depend upon the relative values of certain categories of assets and the relative amounts of certain kinds of income. The determination of whether we are a PFIC, which must be made annually after the close of each taxable year, depends on the particular facts and circumstances (such as the valuation of our assets, including goodwill and other intangible assets) and may also be affected by the application of the PFIC rules, which are subject to differing interpretations. The fair market value of our assets is expected to relate, in part, to (a) the market price of our Ordinary Shares and (b) the composition of our income and assets, which will be affected by how, and how quickly, we spend any cash that is raised in any financing transaction. Moreover, our ability to earn specific types of income that we currently treat as non-passive for purposes of the PFIC rules is uncertain with respect to future years. Because the value of our assets for purposes of determining PFIC status will depend in part on the market price of our Ordinary Shares, which may fluctuate significantly. We do not expect to be a PFIC for our current taxable year or in the foreseeable future. However, there can be no assurance that we will not be considered a PFIC for any taxable year.

If we are a PFIC, a U.S. Holder (defined below) would be subject to adverse U.S. federal income tax consequences, such as ineligibility for any preferred tax rates on capital gains or on actual or deemed dividends, interest charges on certain taxes treated as deferred, and additional reporting requirements under U.S. federal income tax laws and regulations. A U.S. Holder may in certain circumstances mitigate adverse tax consequences of the PFIC rules by filing an election to treat the PFIC as a qualified electing fund (“QEF”) or, if shares of the PFIC are “marketable stock” for purposes of the PFIC rules, by making a mark-to-market election with respect to the shares of the PFIC. We do not intend to comply with the reporting requirements necessary to permit U.S. Holders to elect to treat us as a QEF. If a U.S. Holder makes a mark-to-market election with respect to its ordinary shares, the U.S. Holder is in its U.S. federal taxable income an amount reflecting any year end increase in the value of its ordinary shares. For purposes of this discussion, a “U.S. Holder” is a beneficial owner of ordinary shares that is for U.S. federal income tax purposes: (i) an individual who is a citizen or resident of the United States; (ii) a corporation (or other entity taxable as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States, any state thereof or the District of Columbia; (iii) an estate the income of which is subject to U.S. federal income taxation regardless of its source; or (iv) a trust (a) if a court within the U.S. can exercise primary supervision over its administration, and one or more U.S. persons have the authority to control all of the substantial decisions of that trust, or (b) that was in existence on August 20, 1996, and validly elected under applicable Treasury Regulations to continue to be treated as a domestic trust.

Investors should consult their own tax advisors regarding all aspects of the application of the PFIC rules to the Ordinary Shares.

Singapore taxes may differ from the tax laws of other jurisdictions.

Prospective investors should consult their tax advisors concerning the overall tax consequences of purchasing, owning and disposing of our shares. Singapore tax law may differ from the tax laws of other jurisdictions, including the United States.

Tax authorities could challenge the allocation of income and deductions among our subsidiaries, which could increase our overall tax liability.

We are incorporated in Singapore, and we currently have subsidiaries in PNG. As we grow our business, we expect to conduct increased operations through our subsidiaries in various jurisdictions, including Indonesia, Germany and Australia. If two or more affiliated companies are located in different jurisdictions, the tax laws or regulations of each country generally will require transactions between those affiliated companies to be conducted on terms consistent with those between unrelated companies dealing at arm’s length, and appropriate documentation generally must be maintained to support the transfer prices. We maintain our transfer pricing policies to be compliant with applicable transfer pricing laws, but our transfer pricing procedures are not binding on applicable tax authorities.

If tax authorities were to successfully challenge our transfer pricing, there could be an increase in our overall tax liability, which could adversely affect our financial condition, results of operations and cash flows. In addition, the tax laws in the jurisdictions in which we operate are subject to differing interpretations. Tax authorities may challenge our tax positions, and if successful, such challenges could increase our overall tax liability. In addition, the tax laws in the jurisdictions in which we operate are subject to change. We cannot predict the timing or content of such potential changes, and such changes could increase our overall tax liability, which could adversely affect our financial condition, results of operations and cash flows.

Risks Related to Doing Business in PNG and Indonesia

As the PNG market constitutes the major source of our revenue, the downturn in the rate of economic growth in PNG or other countries due to the unprecedented and challenging global market and economic conditions, or any other such downturn for any other reason, will be detrimental to our results of operations.

The performance and growth of our business are necessarily dependent on the health of the overall PNG economy and those markets we are looking to expand into. Any downturn in the rate of economic growth in PNG, whether due to political instability or regional conflicts, economic slowdown elsewhere in the world or otherwise, may have a material adverse effect on demand for power Any future slowdown in the Indonesian economy could have a material adverse effect on the demand for power and, as a result, on our business, financial condition and results of operations.

In addition, the Indonesian securities market and the Indonesian economy are influenced by economic and market conditions in other countries. Although economic conditions are different in each country, investors’ reactions to developments in one country can have adverse effect on the securities of companies in other countries, including Indonesia. A loss of investor confidence in the financial systems of other emerging markets may cause volatility in Indonesian financial markets and, indirectly, in the Indonesian economy in general. Any worldwide financial instability could also have a negative impact on the Indonesian economy, including the movement of exchange rates and interest rates in Indonesia. Any slowdown in the Indonesian economy, or future volatility in global commodity prices, could adversely affect the growth of our business in Indonesia.

The Indonesian economy and financial markets are also significantly influenced by worldwide economic, financial and market conditions. Any financial turmoil, especially in the United States, United Kingdom, Europe or China, may have a negative impact on the Indonesian economy. Although economic conditions differ in each country, investors’ reactions to any significant developments in one country can have adverse effects on the financial and market conditions in other countries. A loss in investor confidence in the financial systems, particularly in other emerging markets, may cause increased volatility in Indonesian financial markets.

Current political and social events in PNG and Indonesia may adversely affect our business.

Since 1998, Indonesia has experienced a process of democratic change, resulting in political and social events that have highlighted the unpredictable nature of Indonesia’s changing political landscape. In 1999, Indonesia conducted its first free elections for representatives in parliament. In 2004, 2009 and 2014, elections were held in Indonesia to elect the President, Vice-President and representatives in parliament. Indonesia also has many political parties, without any one party holding a clear majority. Due to these factors, Indonesia has, from time to time, experienced political instability, as well as general social and civil unrest. For example, since 2000, thousands of Indonesians have participated in demonstrations in Jakarta and other Indonesian cities both for and against former presidents Abdurrahman Wahid, Megawati Soekarnoputri and Susilo Bambang Yudhoyono and current President Joko Widodo as well as in response to specific issues, including fuel subsidy reductions, privatization of state assets, anti-corruption measures, decentralization and provincial autonomy, and the American-led military campaigns in Afghanistan and Iraq. Although these demonstrations were generally peaceful, some turned violent.

Indonesia had a general election in May 2019 and the Indonesian Election Committee (KPU) announced on May 22, 2019 that President Joko Widodo had won the election. However, the opposing candidate, Prabowo Subianto, filed a suit with the Indonesian Constitutional Court challenging such an outcome and claimed that the election process was marred by massive irregularities. The announcement was followed by a few days of public demonstrations and riots in parts of Indonesia. These events may indicate a worsening of political and social division in Indonesia.

In addition, Indonesia announced in November 2014, and implemented with effect from January 1, 2015, a fixed diesel subsidy of Rp1,000 per liter and scrapped the gasoline subsidy. Although the implementation did not result in any significant violence or political instability, the announcement and implementation also coincided with a period where crude oil prices had dropped very significantly from 2014. Currently, the government reviews and adjusts the price for fuel on monthly basis and implements the adjusted fuel price in the following month. There can be no assurance that future increases in crude oil and fuel prices will not result in political and social instability.

Furthermore, separatist movements and clashes between religious and ethnic groups have also resulted in social and civil unrest in parts of Indonesia, such as Aceh in the past and in Papua currently, where there have been clashes between supporters of those separatist movements and the Indonesian military, including continued activity in Papua, by separatist rebels that has led to violent incidents. There have also been inter-ethnic conflicts, for example in Kalimantan, as well as inter-religious conflict such as in Maluku and Poso.

Also, labor issues have also come to the fore in Indonesia. In 2003, the government enacted a new labor law that gave employees greater protections. Occasional efforts to reduce these protections have prompted an upsurge in public protests as workers responded to policies that they deemed unfavorable.

As a result, there can be no assurance that social and civil disturbances will not occur in the future and on a wider scale, or that any such disturbances will not, directly or indirectly, materially and adversely affect our business, financial condition, results of operations and prospects.

Deterioration of political, economic and security conditions in PNG may adversely affect our operations and financial results.

Any major hostilities involving PNG, a substantial decline in the prevailing regional security situation or the interruption or curtailment of trade between PNG and its present trading partners could have a material adverse effect on our operations and, as a result, our financial results.

Prolonged and/or widespread regional conflict in the South East Asia could have the following results, among others:

Loss of property and/or interruption of our business plans resulting from hostile acts could have a significant negative impact on our earnings and cash flow. In addition, we may not have enough insurance to cover any loss of property or other claims resulting from these risks.

Terrorist activities in the emerging markets, including Indonesia and PNG, could destabilize the country/region, which would adversely affect our business, financial condition and results of operations, and the market price of our securities.

There have been a number of terrorist incidents in Indonesia and PNG, including the May 2005 bombing in Central Sulawesi, the Bali bombings in October 2002 and October 2005 and the bombings at the JW Marriot and Ritz Carlton hotels in Jakarta in July 2009, which resulted in deaths and injuries. On January 14, 2016, several coordinated bombings and gun shootings occurred in Jalan Thamrin, a main thoroughfare in Jakarta, resulting in a number of deaths and injuries.

Although the government has successfully countered some terrorist activities in recent years and arrested several of those suspected of being involved in these incidents, terrorist incidents may continue and, if serious or widespread, might have a material adverse effect on investment and confidence in, and the performance of, the Indonesian economy and may also have a material adverse effect on our business, financial condition, results of operations and prospects and the market price of our securities.

Negative changes in global, regional or emerging market’s economic activity could adversely affect our business.

Changes in the PNG and Indonesian regional and global economies can affect our performance. Two significant events in the past that impacted Indonesia’s economy were the Asian economic crisis of 1997 and the global economic crisis which started in 2008. The 1997 crisis was characterized in Indonesia by, among others, currency depreciation, a significant decline in real gross domestic product, high interest rates, social unrest and extraordinary political developments. While the global economic crisis that arose from the subprime mortgage crisis in the United States did not affect Indonesia’s economy as severely as in 1997, it still put Indonesia’s economy under pressure. The global financial markets have also experienced volatility as a result of expectations relating to monetary and interest rate policies of the United States, concerns over the debt crisis in the Eurozone, and concerns over China’s economic health. Uncertainty over the outcome of the Eurozone governments’ financial support programs and worries about sovereign finances generally are ongoing. If the crisis becomes protracted, we can provide no assurance that it will not have a material and adverse effect on Indonesia’s economic growth and consequently on our business.

Adverse economic conditions could result in less business activity, less disposable income available for consumers to spend and reduced consumer purchasing power, which may reduce demand for communication services, including our services, which in turn would have an adverse effect on our business, financial condition, results of operations and prospects. There is no assurance that there will not be a recurrence of economic instability in future, or that, should it occur, it will not have an impact on the performance of our business.

Fluctuations in the value of the foreign currency value may materially and adversely affect us.

Our functional currency of local entities is the local currency, for example, Kina for operations in PNG. If we successfully expand to Indonesia, we will use Indonesia Rupiah as functional currency for operations therein. One of the most important impacts the Asian economic crisis had on Indonesia was the depreciation and volatility in the value of the Indonesian Rupiah as measured against other currencies, such as the U.S. Dollar. The Indonesian Rupiah continues to experience significant volatility. However, wherever possible, we try to address these issues through contract structures which include both U.S. Dollar and local currency payments as appropriate to the cost structures of a project.

Although regulations allow for the unhindered exchange and repatriation of funds, there can be no assurance that future restrictions (legislatively or due to available foreign currency supply) on the ability to exchange Kina into USD (or SGD) or on repatriation of income or capital will not adversely affect our ability to repatriate capital and income. In addition, while the Indonesian Rupiah has generally been freely convertible and transferable, from time to time, Bank Indonesia has intervened in the currency exchange markets in furtherance of its policies, either by selling Indonesian Rupiah or by using its foreign currency reserves to purchase Indonesian Rupiah. We can give no assurance that the current floating exchange rate policy will not be modified or that the government will take additional action to stabilize, maintain or increase the Indonesian Rupiah’s value, or that any of these actions, if taken, will be successful. Modification of the current floating exchange rate policy could result in significantly higher domestic interest rates, liquidity shortages, capital or exchange controls, or the withholding of additional financial assistance by multinational lenders. This could result in a reduction of economic activity, an economic recession, loan defaults or declining subscriber usage of our services, and as a result, we may also face difficulties in funding our capital expenditures and in implementing our business strategy. Any of the foregoing consequences could have a material adverse effect on our business, financial condition, results of operations and prospects.

Downgrades of credit ratings of the government or PNG and Indonesian companies could adversely affect our business.

As of the date of this prospectus, PNG’s sovereign foreign currency long-term debt was rated “B2” by Moody’s and “B-” by Standard & Poor’s.

Additionally, as of the date of this prospectus, Indonesia’s sovereign foreign currency long-term debt was rated “Baa2” by Moody’s, “BBB” by Standard & Poor’s, and “BBB” by Fitch Ratings.

We can give no assurance that Moody’s, Standard & Poor’s or Fitch Ratings will not change or downgrade the credit ratings of PNG or Indonesia. Any such downgrade could have an adverse impact on liquidity in the PNG or Indonesian financial markets, the ability of the government and PNG or Indonesian companies, including us, to raise additional financing, and the interest rates and other commercial terms at which such additional financing is available. Interest rates on our floating rate Kina or Rupiah-denominated debt would also likely increase. Such events could have material adverse effects on our business, financial condition, results of operations, prospects and/or the market price of our securities.

Indonesia and PNG are vulnerable to natural disasters and events beyond our control, which could adversely affect our business and operating results.

Many parts of PNG and Indonesia, including areas where we operate (or plan to operate), are prone to natural disasters such as floods, lightning strikes, cyclonic or tropical storms, earthquakes, volcanic eruptions, droughts, power outages and other events beyond our control. Future climate change may exacerbate these weather related events. The Indonesian archipelago is one of the most volcanically active regions in the world as it is located in the convergence zone of three major lithospheric plates. It is subject to significant seismic activity that can lead to destructive earthquakes, tsunamis or tidal waves. Flash floods and more widespread flooding also occur regularly during the rainy season from November to April. Cities, especially Jakarta, are frequently subject to severe localized flooding which can result in major disruption and, occasionally, fatalities. Landslides regularly occur in rural areas during the wet season. From time to time, natural disasters have killed, affected or displaced large numbers of people and damaged our equipment. We cannot assure you that future natural disasters will not have a significant impact on us, or PNG and Indonesia or their economy. A significant earthquake, other geological disturbance or weather-related natural disaster in any of Indonesia’s more populated cities and financial centers could severely disrupt the Indonesian economy and undermine investor confidence, thereby materially and adversely affecting our business, financial condition, results of operations and prospects.

Our operations may be adversely affected by an outbreak of an infectious disease or other epidemic.

An outbreak of an infectious disease or epidemic, or the measures taken by the governments of affected countries, including Indonesia and PNG, against such an outbreak, could severely disrupt the country’s economy, as evidenced by the outbreak of COVID-19 in 2020 and persisting through 2022, and undermine investor confidence, thereby materially and adversely affecting our financial condition or results of operations and the market value of our securities. Moreover, our operations could be materially disrupted if our employees remained at home and away from our principal places of business for extended period of time, which would have a material and adverse effect on our financial condition or results of operations and the market value of our securities.

We may be affected by uncertainty in political instability.

PNG has a complex political system with elections taking place every five years which can lead to significant political change in a relatively short space of time, long term political instability may adversely affect our ability to meet our future forecasts due to a downturn in demand for services.

Indonesian Law No.25 of 1999 regarding Fiscal Decentralization and Law No.22 of 1999 regarding Regional Autonomy were passed by the Indonesian parliament in 1999 and further implemented by Government Regulation No.38 of 2007. Law No.22 of 1999 has been revoked by and replaced by the provisions on regional autonomy of Law No.32 of 2004 as amended by Law No.8 of 2005 and Law No.12 of 2008. Law No.32 of 2004 and its amendments were revoked and replaced by Law No.23 of 2014 regarding Regional Autonomy as amended by Government Regulation in Lieu of Law No.2 of 2014, Law No.2 of 2015 and Law No.9 of 2015. Law No.25 of 1999 has been revoked and replaced by Law No.33 of 2004 regarding the Fiscal Balance between the Central and the Regional Governments respectively. Currently, there is uncertainty in respect of the balance between the local and the central governments and the procedures for renewing licenses and approvals and monitoring compliance with environmental regulations. In addition, some local authorities have sought to levy additional taxes or obtain other contributions. There can be no assurance that a balance between local governments and the central government will be effectively established or that our business, financial condition, results of operations and prospects will not be adversely affected by dual compliance obligations and further uncertainty as to legal authority to levy taxes or promulgate other regulations affecting our business.

Risks Related to Doing Business in Germany and Australia

We may face risks associated with our growth strategy and international operations, including unfavorable regulatory, political, tax, and labor conditions, which could harm our business.

Our initial market will be the APAC region, with a particular focus on PNG and Indonesia. In the future, we intend to expand our geographic coverage beyond these markets, including to Germany and Australia. Due to our intention to expand our operations internationally, we may face risks associated with our growth strategy, including possible unfavorable regulatory, political, tax, and labor conditions, which could harm our business, as well as incurring significant expenditures necessary for appropriate licensure and/or certification in such new markets. Our operations will be subject to the local legal, political, regulatory, and social requirements and economic conditions in the relevant jurisdictions. There is no guarantee that we will obtain appropriate licensure, certifications, and/or approval for our projects in the relevant markets or at all.

We are subject to a number of risks associated with international business activities that may increase our costs, impact our ability to successfully roll out our projects, and require significant management attention and which we may not have adequately addressed or not addressed at all as of today. These risks include:

If we fail to successfully address these risks, our business, prospects, operating results, and financial condition could be materially harmed.

Risks Related to Government Regulation and Contracts

Our Ordinary Shares may be prohibited from being traded on a national exchange under the Holding Foreign Companies Accountable Act if the PCAOB is unable to inspect our auditors for three consecutive years beginning in 2021. The delisting of our Ordinary Shares, or the threat of their being delisted, may materially and adversely affect the value of your investment.

The Holding Foreign Companies Accountable Act, or the HFCA Act, was enacted on December 18, 2020. The HFCA Act states if the SEC determines that a company has filed audit reports issued by a registered public accounting firm that has not been subject to inspection by the PCAOB for three consecutive years beginning in 2021, the SEC shall prohibit such ordinary shares from being traded on a national securities exchange or in the over the counter trading market in the U.S.

On March 24, 2021, the SEC adopted interim final rules relating to the implementation of certain disclosure and documentation requirements of the HFCA Act. A company will be required to comply with these rules if the SEC identifies it as having a “non-inspection” year under a process to be subsequently established by the SEC. The SEC is assessing how to implement other requirements of the HFCA Act, including the listing and trading prohibition requirements described above. Furthermore, on June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act (“AHFCAA”), which, if signed into law, would amend the HFCA Act and require the SEC to prohibit an issuer’s securities from trading on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive years instead of three consecutive years.

Our auditor, BF Borgers, is an independent registered public accounting firm with the PCAOB, and as an auditor of publicly traded companies in the U.S., is subject to laws in the U.S. pursuant to which the PCAOB conducts regular inspections to assess its compliance with the applicable professional standards. Our auditor is headquartered in Lakewood, Colorado, and has been inspected by the PCAOB on a regular basis. The PCAOB currently has access to inspect the working papers of our auditor.

However, the recent developments would add uncertainties to our offering and we cannot assure you whether Nasdaq or regulatory authorities would apply additional and more stringent criteria to us after considering the effectiveness of our auditor’s audit procedures and quality control procedures, adequacy of personnel and training, or sufficiency of resources, geographic reach or experience as it relates to the audit of our financial statements.

The SEC may propose additional rules or guidance that could impact us if our auditor is not subject to PCAOB inspection. For example, on August 6, 2020, the President’s Working Group on Financial Markets, or the PWG, issued the Report on Protecting United States Investors from Significant Risks from Chinese Companies to the then President of the United States. This report recommended the SEC implement five recommendations to address companies from jurisdictions that do not provide the PCAOB with sufficient access to fulfil its statutory mandate. Some of the concepts of these recommendations were implemented with the enactment of the HFCA Act. However, some of the recommendations were more stringent than the HFCA Act. For example, if a company’s auditor was not subject to PCAOB inspection, the report recommended that the transition period before a company would be delisted would end on January 1, 2022.

The SEC has announced that the SEC staff is preparing a consolidated proposal for the rules regarding the implementation of the HFCA Act and to address the recommendations in the PWG report. It is unclear when the SEC will complete its rulemaking and when such rules will become effective and what, if any, of the PWG recommendations will be adopted. The implications of this possible regulation in addition to the requirements of the HFCA Act are uncertain. Such uncertainty could cause the market price of our Ordinary Shares to be materially and adversely affected, and our securities could be delisted or prohibited from being traded on the national securities exchange earlier than would be required by the HFCA Act. If our Ordinary Shares are unable to be listed on another securities exchange by then, such a delisting would substantially impair your ability to sell or purchase our Ordinary Shares when you wish to do so, and the risk and uncertainty associated with a potential delisting would have a negative impact on the price of our Ordinary Shares.

Fluctuations in exchange rates could have a material adverse effect on our results of operations and the price of our Ordinary Shares.

Substantially all our revenues and expenditures are denominated in Kina, whereas our reporting currency is the U.S. dollar. As a result, fluctuations in the exchange rate between the U.S. dollar and Kina will affect the relative purchasing power in Kina terms of our U.S. dollar assets and the proceeds from our initial public offering. Gains and losses from the re-measurement of assets and liabilities that are receivable or payable in Kina are included in our consolidated statements of operations. The re-measurement has caused the U.S. dollar value of our results of operations to vary with exchange rate fluctuations, and the U.S. dollar value of our results of operations will continue to vary with exchange rate fluctuations. A fluctuation in the value of Kina relative to the U.S. dollar could reduce our profits from operations and the translated value of our net assets when reported in U.S. dollars in our financial statements. This could have a negative impact on our business, financial condition or results of operations as reported in U.S. dollars. If we decide to convert our Kina into U.S. dollars for the purpose of making payments for dividends on our Ordinary Shares or for other business purposes, appreciation of the U.S. dollar against the Kina would have a negative effect on the U.S. dollar amount available to us. In addition, fluctuations in currencies relative to the periods in which the earnings are generated may make it more difficult to perform period-to-period comparisons of our reported results of operations. As a result, fluctuations in exchange rates may have a material adverse effect on the price of our Ordinary Shares.

Governmental agencies may modify, curtail, or terminate our contracts at any time prior to their completion and, if we do not replace them, we may suffer a decline in revenue.

Most of our government contracts may be modified, curtailed, or terminated by the governmental counterparty either at its discretion or upon our default. If a governmental counterparty terminates a contract with us at its discretion, then we typically can recover only costs incurred or committed, settlement expenses and profit on work completed prior to termination, which could prevent us from recognizing all the potential revenue and profits from that contract. In addition, for some assignments, the government may attempt to “insource” the services to government employees rather than outsource to a contractor. If a governmental agency terminates a contract due to our default, we could be liable for excess costs incurred by the governmental agency in obtaining services from another source.

Because we provide services to municipalities and other public agencies, we are more susceptible to the unique risks associated with government contracts.

A substantial amount of our revenue is derived from our work for public agencies. Consequently, we are exposed to certain risks associated with public agency and government contracting, any one of which can have a material adverse effect on our business, results of operations and financial condition. These risks include:

Legislation, policy, rules, or regulations may be enacted that limit or change the ability of national, state, regional or local agencies to contract for our privatized services. Such changes would affect our ability to obtain new contracts and may decrease the demand for our services.

Legislation is proposed periodically that attempts to limit the ability of governmental agencies to contract with private consultants to provide services. Should such changes occur and be upheld, demand for our services may be materially adversely affected. While attempts at such legislation have failed in the past, such measures could be adopted in the future.

Risks Related to Our Public Offering and Ownership of Our Securities

We are a “foreign private issuer,” and our disclosure obligations differ from those of U.S. domestic reporting companies. As a result, we may not provide you the same information as U.S. domestic reporting companies or we may provide information at different times, which may make it more difficult for you to evaluate our performance and prospects.

We are a foreign private issuer and, as a result, we are not subject to the same requirements as U.S. domestic issuers. Under the Exchange Act, we will be subject to reporting obligations that, to some extent, are more lenient and less frequent than those of U.S. domestic reporting companies. For example, we will not be required to issue quarterly reports or proxy statements. We will not be required to disclose detailed individual executive compensation information. Furthermore, our directors and executive officers will not be required to report equity holdings under Section 16 of the Exchange Act and will not be subject to the insider short-swing profit disclosure and recovery regime. As a foreign private issuer, we will also be exempt from the requirements of Regulation FD (Fair Disclosure) which, generally, are meant to ensure that select groups of investors are not privy to specific information about an issuer before other investors. However, we will still be subject to the anti-fraud and anti-manipulation rules of the SEC, such as Rule 10b-5 under the Exchange Act. Since many of the disclosure obligations imposed on us as a foreign private issuer differ from those imposed on U.S. domestic reporting companies, you should not expect to receive the same information about us and at the same time as the information provided by U.S. domestic reporting companies.

Because we are a foreign private issuer and are exempt from certain Nasdaq corporate governance standards applicable to U.S. issuers, you could have less protection than you would have if we were a domestic issuer.

Nasdaq Listing Rules require listed companies to have, among other things, a majority of its board members be independent. As a foreign private issuer, we are permitted to follow home country practice in lieu of the above requirement or choose to comply with the above requirement within one year of listing. The Nasdaq Listing Rules also require U.S. domestic issuers to have a Compensation Committee and a Nominations and Governance Committee composed entirely of independent directors, and an Audit Committee with a minimum of three members. We, as a foreign private issuer, could potentially not be subject to these requirements. Additionally, the Nasdaq Listing Rules may require shareholder approval for certain corporate matters, such as requiring that shareholders be given the opportunity to vote on all equity compensation plans and material revisions to those plans, certain ordinary share issuances. Overall, we are permitted to consider following home country practice in lieu of the requirements under Nasdaq Listing Rules with respect to certain corporate governance standards, which may afford less protection to investors. However, we intend to fully comply with all the requirements of the Nasdaq Listing Rules.

Nasdaq may apply additional and more stringent criteria for our initial and continued listing because we plan to have a small public offering and insiders will hold a large portion of the company’s listed securities.

Nasdaq Listing Rule 5101 provides Nasdaq with broad discretionary authority over the initial and continued listing of securities on Nasdaq and Nasdaq may use such discretion to deny initial listing, apply additional or more stringent criteria for the initial or continued listing of particular securities, or suspend or delist particular securities based on any event, condition, or circumstance that exists or occurs that makes initial or continued listing of the securities on Nasdaq inadvisable or unwarranted in the opinion of Nasdaq, even though the securities meet all enumerated criteria for initial or continued listing on Nasdaq. In addition, Nasdaq has used its discretion to deny initial or continued listing or to apply additional and more stringent criteria in the instances, including but not limited to: (i) where the company engaged an auditor that has not been subject to an inspection by the Public Company Accounting Oversight Board (“PCAOB”), an auditor that PCAOB cannot inspect, or an auditor that has not demonstrated sufficient resources, geographic reach, or experience to adequately perform the company’s audit; (ii) where the company planned a small public offering, which would result in insiders holding a large portion of the company’s listed securities. Nasdaq was concerned that the offering size was insufficient to establish the company’s initial valuation, and there would not be sufficient liquidity to support a public market for the company; and (iii) where the company did not demonstrate sufficient nexus to the U.S. capital market, including having no U.S. shareholders, operations, or members of the board of directors or management. Our public offering will be relatively small and the insiders of our Company will hold a large portion of the company’s listed securities. Nasdaq might apply the additional and more stringent criteria for our initial and continued listing, which might cause delay or even denial of our listing application.

If we cannot satisfy, or continue to satisfy, the listing requirements and other rules of Nasdaq Capital Market, although we exempt from certain corporate governance standards applicable to US issuers as a Foreign Private Issuer, our securities may not be listed or may be delisted, which could negatively impact the price of our securities and your ability to sell them.

We will consummate this offering only if our securities are approved for listing on the Nasdaq Capital Market. Even if our securities are listed on the Nasdaq Capital Market, we cannot assure you that our securities will continue to be listed on the Nasdaq Capital Market after this offering.

In addition, following this offering, in order to maintain our listing on the Nasdaq Capital Market, we will be required to comply with certain rules of Nasdaq Capital Market, including those regarding minimum shareholders’ equity, minimum share price and certain corporate governance requirements. Even if we initially meet the listing requirements and other applicable rules of the Nasdaq Capital Market, we may not be able to continue to satisfy these requirements and applicable rules. If we are unable to satisfy the Nasdaq Capital Market criteria for maintaining our listing, our securities could be subject to delisting.

If the Nasdaq Capital Market does not list our securities, or subsequently delists our securities from trading, we could face significant consequences, including:

The market price of our Ordinary Shares may be volatile or may decline regardless of our operating performance, and you may not be able to resell your shares at or above the public offering price.

The public offering price for our Ordinary Shares will be determined through negotiations between the underwriters and us and may vary from the market price of our Ordinary Shares following our public offering. If you purchase our Ordinary Shares in our public offering, you may not be able to resell those shares at or above the public offering price. We cannot assure you that the public offering price of our Ordinary Shares, or the market price following our public offering, will equal or exceed prices in privately negotiated transactions of our shares that have occurred from time to time prior to our public offering. The market price of our Ordinary Shares may fluctuate significantly in response to numerous factors, many of which are beyond our control, including:

In addition, the stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. Stock prices of many companies have fluctuated in a manner unrelated or disproportionate to the operating performance of those companies. In the past, shareholders have filed securities class action litigation following periods of market volatility. If we were to become involved in securities litigation, it could subject us to substantial costs, divert resources and the attention of management from our business, and adversely affect our business.

We have broad discretion in the use of the net proceeds from our public offering and may not use them effectively.

To the extent (i) we raise more money than required for the purposes explained in the section titled “Use of Proceeds” or (ii) we determine that the proposed uses set forth in that section are no longer in the best interests of our Company, we cannot specify with any certainty the particular uses of such net proceeds that we will receive from our public offering. Our management will have broad discretion in the application of such net proceeds, including working capital, possible acquisitions, and other general corporate purposes, and we may spend or invest these proceeds in a way with which our shareholders disagree. The failure by our management to apply these funds effectively could harm our business and financial condition. Pending their use, we may invest the net proceeds from our public offering in a manner that does not produce income or that loses value. 

We are a holding company, and will rely on dividends paid by our subsidiaries for our cash needs. Any limitation on the ability of our subsidiaries to make dividend payments to us, or any tax implications of making dividend payments to us, could limit our ability to pay our parent company expenses or pay dividends to holders of our Ordinary Shares.

We are a holding company and conduct substantially all of our business through our operating subsidiaries, which are limited liability companies established in Singapore and PNG. We will rely on dividends paid by our subsidiaries for our cash needs, including the funds necessary to pay dividends and other cash distributions to our shareholders, to service any debt we may incur and to pay our operating expenses. If applicable laws, rules and regulations in Singapore and/or PNG in the future limit or preclude our subsidiaries from making dividends to us, our ability to fund our holding company obligations or pay dividends on our Ordinary Shares could be materially and adversely affected. We may also enter into debt arrangements in the future which limit our ability to receive dividends or distributions from our operating subsidiaries or pay dividends to the holders of our Ordinary Shares. Singapore and PNG tax laws, rules and regulations may also limit our future ability to receive dividends or distributions from our operating subsidiaries or pay dividends to the holders of our Ordinary Shares.

We do not intend to pay dividends for the foreseeable future.

We currently intend to retain any future earnings to finance the operation and expansion of our business, and we do not expect to declare or pay any dividends in the foreseeable future. As a result, you may only receive a return on your investment in our Ordinary Shares if the market price of our Ordinary Shares increases.

There may not be an active, liquid trading market for our Ordinary Shares.

Prior to this offering, there has been no public market for our Ordinary Shares. An active trading market for our Ordinary Shares may not develop or be sustained following this offering. You may not be able to sell your shares at the market price, if at all, if trading in our shares is not active. The public offering price was determined by negotiations between us and the underwriters based upon a number of factors. The public offering price may not be indicative of prices that will prevail in the trading market.

Shares eligible for future sale may adversely affect the market price of our Ordinary Shares, as the future sale of a substantial amount of Ordinary Shares in the public marketplace could reduce the price of our Ordinary Shares.

The market price of our Ordinary Shares could decline as a result of sales of substantial amounts of our Ordinary Shares in the public market, or the perception that these sales could occur. In addition, these factors could make it more difficult for us to raise funds through future offerings of our Ordinary Shares. A total number of 2,637,500 of our Ordinary Shares will be sold in this offering, if the firm commitment is completed and the underwriters do not exercise their over-allotment option. All of the shares sold in the offering will be freely transferable without restriction or further registration under the Securities Act. The shares ultimately owned by our directors, officers and 5% shareholders will be “restricted securities” as defined in Rule 144. These shares may be sold in the future without registration under the Securities Act to the extent permitted by Rule 144 or other exemptions under the Securities Act. See “Shares Eligible for Future Sale.”

You will experience immediate and substantial dilution.

The public offering price of our shares is substantially higher than the pro forma net tangible book value per ordinary share of our Ordinary Shares. Assuming the completion of the firm commitment offering and no exercise of the over-allotment option by the underwriters, if you purchase shares in this offering, you will incur immediate dilution of approximately $4.02 per Ordinary Share, or approximately 80% in the pro forma net tangible book value per Ordinary Share, from the price per Ordinary Share that you pay for the shares. Assuming the completion of the firm commitment offering with the full exercise of the over-allotment option by the underwriters, if you purchase shares in this offering, you will incur immediate dilution of approximately $3.97 per Ordinary Share, or approximately 79% in the pro forma net tangible book value per Ordinary Share from the price per Ordinary Share that you pay for the Ordinary Shares. Accordingly, if you purchase shares in this offering, you will incur immediate and substantial dilution of your investment. See “Dilution.”

We will incur additional costs as a result of becoming a public company, which could negatively impact our net income and liquidity.

Upon completion of this offering, we will become a public company in the United States. As a public company, we will incur significant legal, accounting and other expenses that we did not incur as a private company. In addition, Sarbanes-Oxley and rules and regulations implemented by the SEC and the Nasdaq Capital Market require significantly heightened corporate governance practices for public companies. We expect that these rules and regulations will increase our legal, accounting and financial compliance costs and will make many corporate activities more time-consuming and costly.

We do not expect to incur materially greater costs as a result of becoming a public company than those incurred by similarly sized U.S. public companies. If we fail to comply with these rules and regulations, we could become the subject of a governmental enforcement action, investors may lose confidence in us and the market price of our Ordinary Shares could decline.

The obligation to disclose information publicly may put us at a disadvantage to competitors that are private companies.

Upon completion of this offering, we will be a publicly listed company in the United States. As a publicly listed company, we will be required to file annual reports with the Securities and Exchange Commission. In some cases, we will need to disclose material agreements or results of financial operations that we would not be required to disclose if we were a private company. Our competitors may have access to this information, which would otherwise be confidential. This may give them advantages in competing with our company. Similarly, as a U.S.-listed public company, we will be governed by U.S. laws that our competitors, which are mostly private Chinese companies, are not required to follow. To the extent compliance with U.S. laws increases our expenses or decreases our competitiveness against such companies, our public listing could affect our results of operations.

We are required to pay significant consideration to a third party consultant in connection with this offering and in the event we raise funding in the future or complete certain sale transactions.

On August 3, 2022, we engaged Fat Ventures Pte. Ltd. (“Fat Ventures) and Fat Projects International Investments and Holdings Limited (“Fat Projects International”) to consult with us on various financing strategies for our business for a term of three years. Specifically, pursuant to this arrangement, Fat Ventures and Fat Projects International provide general business and strategic consultancy services for the following: (1) assisting us with our preparation of presentation materials for the purpose of facilitating an investment, through a private investment and/or a public offering and public exchange listing, or sale transaction (or combination thereof) and (2) consulting on the business and commercial aspects of any such transaction. These services do not consist of Fat Ventures or Fat Projects International buying and selling investments for us, trading investments in connection with us, or otherwise finding investors for this offering. Moreover, both Fat Ventures and Fat Projects International are non-U.S. incorporated companies and neither Fat Ventures nor Fat Projects International are engaged or perform investment banking, corporate finance, financial advisory services, or securities businesses which require a broker dealer registration with the Financial Industry Regulatory Authority (FINRA). We determined that it was in our best interest to conduct an initial public offering in the United States. We have agreed to compensate Fat Ventures and Fat Projects International for their services by paying Fat Ventures a cash fee equal to 5% of the amount of capital raised in this offering and by issuing Fat Projects International 175,000 of our ordinary shares, which will vest upon completion of this offering. In addition, we have agreed to indemnify Fat Ventures and Fat Projects International for liabilities under the Securities Act. We are also required to pay (1) Fat Ventures a cash fee equal to 5% of any proceeds we raise in the future; and (2) Fat Projects International ordinary shares equal to 1% of the pre-investment fully-diluted share capital of the Company, during the term of the engagement for any new investments, and Fat Ventures a cash fee equal to 2% of any investment proceeds received from any investor who has previously invested in the Company during the term of the engagement. Separately, upon a completed investment or sale transaction (or combination thereof) with a party introduced to the Company by Fat Ventures or Fat Projects International or with work product produced by Fat Ventures or Fat Projects International, occurring within three years after the date the party is introduced to the Company by Fat Ventures or Fat Projects International, or a sale of the Company or its subsidiaries, we are required to pay Fat Ventures 2% of the proceeds received as a result of such transaction. The requirement that we pay such fees described above will make it more costly, and could make it less likely, that we raise funding or complete a sale transaction in the future. The payment of fees and other amounts to Fat Ventures or Fat Projects International will reduce cash available for our operations and to the extent such compensation is payable in shares, will create dilution to existing shareholders. Additionally, as a result of the above, we are issuing Fat Projects International 175,000 ordinary shares upon the closing of this offering and will be required to pay Fat Ventures a cash fee equal to 5% of the amount of capital raised in this offering out of the use of proceeds of the offering, which amount is included in the expenses disclosed throughout this prospectus. Such amounts will create dilution to shareholders and reduce the amount of working capital available as a result of this offering.

There may be conflicts of interest between third party consultants which we have engaged and EF Hutton.

As described in the risk factor above, we are party to an engagement agreement with Fat Ventures and Fat Projects International. Separately, EF Hutton is a party to a foreign finder agreement with Fat Ventures Private Limited, an affiliate of Fat Ventures and Fat Projects International, with whom we have entered into a consulting agreement, as discussed in greater detail below under “Expenses Relating To This Offering”. Pursuant to the foreign finder agreement, Fat Ventures Private Limited agreed to refer companies to EF Hutton which are seeking financing (including direct loans, private placements, registered offerings or other public offerings), including debt or equity, and EF Hutton agreed to pay Fat Ventures Private Limited a referral fee agreed to on a transaction-by-transaction basis in consideration for such referrals. Specifically, pursuant to this arrangement, Fat Ventures Private Limited uses its best efforts, on a non-exclusive basis, to refer companies to EF Hutton which are seeking financing (as previously described), though Fat Ventures Private Limited is not an agent of EF Hutton—its relationship with EF Hutton is solely that of an independent contractor—and cannot bind or obligate EF Hutton, particularly to pursue a relationship with any such referral. Fat Ventures Private Limited is a non-U.S. incorporated company and is not required to be registered in the U.S. as a broker dealer with FINRA. Fat Ventures Private Limited is due a fee equal to 12.5% of the underwriting discount to be received by EF Hutton under the Underwriting Agreement (1% of the total gross proceeds of the offering), which will total an aggregate of $131,875 (or $151,656.25 in the event the over-allotment option is exercised in full), at an assumed offering price of $5.00 per share. Our engagement with Fat Ventures and Fat Projects International and EF Hutton’s engagement with Fat Ventures Private Limited may cause perceived or actual conflicts of interest, which could reduce the value of our securities.

FORWARD-LOOKING STATEMENTS

We have made statements in this prospectus, including under “Prospectus Summary,” “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Our Business” and elsewhere that constitute forward-looking statements. Forward-looking statements involve risks and uncertainties, such as statements about our plans, objectives, expectations, assumptions or future events. In some cases, you can identify forward-looking statements by terminology such as “anticipate,” “estimate,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “we believe,” “we intend,” “may,” “should,” “will,” “could” and similar expressions denoting uncertainty or an action that may, will or is expected to occur in the future. These statements involve estimates, assumptions, known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from any future results, performances or achievements expressed or implied by the forward-looking statements.

Examples of forward-looking statements include:

The ultimate correctness of these forward-looking statements depends upon a number of known and unknown risks and events. We discuss our known material risks under the heading “Risk Factors” above. Many factors could cause our actual results to differ materially from those expressed or implied in our forward-looking statements. Consequently, you should not place undue reliance on these forward-looking statements. The forward-looking statements speak only as of the date on which they are made, and, except as required by law, we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

ENFORCEABILITY OF CIVIL LIABILITIES

We are incorporated under the laws of Singapore, and certain of our officers and directors are residents outside the United States. Moreover, a majority of our consolidated assets are located outside the United States. Although we are incorporated outside the United States, we have agreed to accept service of process in the United States through our agent designated for that purpose. Nevertheless, since a majority of the consolidated assets owned by us are located outside the United States any judgment obtained in the United States against us may not be enforceable within the United States. There is no treaty between the United States and Singapore providing for the reciprocal recognition and enforcement of judgments in civil and commercial matters and a final judgment for the payment of money rendered by any federal or state court in the United States based on civil liability, whether or not predicated solely upon the federal securities laws, would, therefore, not be automatically enforceable in Singapore.

There is uncertainty as to whether judgments of courts in the United States based upon the civil liability provisions of the federal securities laws of the United States would be recognized or enforceable in Singapore. In making a determination as to enforceability of a judgment of the courts of the United States, the Singapore courts would have regard to whether the judgment was final and conclusive and on the merits of the case, given by a court of law of competent jurisdiction, and was expressed to be for a fixed sum of money. In general, a foreign judgment would be enforceable in Singapore unless procured by fraud, or the proceedings in which such judgments were obtained were not conducted in accordance with principles of natural justice, or the enforcement thereof would be contrary to public policy, or if the judgment would conflict with earlier judgment(s) from Singapore or earlier foreign judgment(s) recognized in Singapore, or if the judgment would amount to the direct or indirect enforcement of foreign penal, revenue or other public laws. Civil liability provisions of the federal and state securities law of the United States permit the award of punitive damages against us, our directors and officers. Singapore courts would not recognize or enforce judgments against us, our directors and officers to the extent that doing so would amount to the direct or indirect enforcement of foreign penal, revenue or other public laws. It is uncertain as to whether a judgment of the courts of the United States under civil liability provisions of the federal securities law of the United States would be regarded by the Singapore courts as being pursuant to foreign, penal, revenue or other public laws. Such a determination has yet to be made by a Singapore court in a reported decision.

In addition, holders of book-entry interests in our shares will be required to exchange such interests for certificated shares and to be registered as shareholders in our register of members in order to have standing to bring a shareholder suit and, if successful, to enforce a foreign judgment against us, our directors or our executive officers in the Singapore courts.

A holder of book-entry interests in our shares may become a registered shareholder of our Company by exchanging such holder’s interest in our shares for certificated shares and being registered in our register of members. The administrative process of becoming a registered shareholder could result in delays prejudicial to any legal proceeding or enforcement action.

CORPORATE FORMATION AND REORGANIZATION

We were incorporated in the Republic of Singapore in March 2022 to serve as the holding company of the T20 Group and its businesses. As of the completion of this offering, (i) our initial shareholders, who are the same shareholders of APEV (except for Christopher Hobbs, who has no shares in APEV, and will not have any shares in APEV), will have effected a reorganization pursuant to which APEV will transfer all of its equity interests in its wholly-owned subsidiary T20 and other entities to us in accordance with the terms of the restructuring and Singapore law, (ii) PEC, a wholly-owned subsidiary of APEV, will have effected a reorganization pursuant to which PEC will transfer certain assets and all of its equity interests in Bougainville Energy Limited and Pawa Generation PNG Limited to us in accordance with the terms of the restructuring and PNG law, and (iii) we will be converted to a public company under the Singapore Companies Act, which transactions we collectively refer to as the Reorganization. In particular, T20 Holdings will acquire certain Specified Assets (as defined below) from APEV and PEC, each of which are described in more detail hereunder:

Asia Pacific Energy Ventures Pte. Ltd. (“APEV”) (Company Registration No.: 201425452Z) was incorporated and registered in Singapore on August 29, 2014. Prior to the Reorganization, APEV is the holding company which owns the shares in:

Each of which has already been or will be transferred to T20 Holdings as the new holding company for the purposes of listing.

Pacific Energy Consulting Limited (“PEC”) was incorporated and registered in PNG on August 29, 2018 and is wholly-owned by APEV. Prior to the Reorganization, PEC is the sole shareholder in Bougainville Energy Limited and Pawa Generation PNG Limited.

The corporate Reorganization will take place in several steps, all of which will be completed prior to the completion of this offering as follows:

PEC will also transfer all shares in the following entities to T20 Holdings:

Investors in this offering will only acquire, and this prospectus describes only, ordinary shares of T20 Holdings Ltd.

Re-registration of T20 Holdings as a Public Limited Company and Change of Name to T20 Holdings Ltd.

T20 Holdings has re-registered as a public limited company and changed its name to T20 Holdings Ltd.

The graphics below represent a simplified summary of our organizational structure, excluding intermediate holding companies, immediately prior to and immediately after the Reorganization and prior to the completion of this offering.

Prior to the Completion of the Reorganization and the Offering 

After the Completion of the Reorganization and the Offering 

Following the Reorganization, the companies within the T20 Group will be as follows:

After the Reorganization, Pacific Commercial Holdings Limited and PEC will remain wholly-owned by APEV. 

USE OF PROCEEDS

Based upon an assumed initial public offering price of $5.00 per share, which is the midpoint of the estimated initial public offering price range set forth on the cover page of this prospectus, we estimate that we will receive net proceeds from this offering, after deducting the estimated underwriting discounts and the estimated offering expenses payable by us, of approximately $6.2 million if the Underwriter does not exercise its over-allotment option, and $7.5 million if the Underwriter exercises its over-allotment option in full. We will not receive any of the proceeds from the sale of Ordinary Shares in this offering by the selling shareholder identified in this prospectus, Snowfields Wealth Management Limited which is wholly-owned by Geoffrey Allan Lawrence, Chief Executive Officer and a director of T20 Holdings.

We plan to use the net proceeds we receive from this offering to invest into new power generation projects, conduct product and project development, and for working capital and for other general corporate purposes:

Additionally, as a result of the consulting agreement described below under “Expenses Relating To This Offering”, we are issuing Fat Projects International Investments and Holdings Limited 175,000 ordinary shares upon the closing of the offering and will be required to pay Fat Ventures Pte. Ltd. a cash fee equal to 5% of the amount of capital raised in this offering, which amount is included in the expenses disclosed throughout this prospectus.

The foregoing represents our current intentions based upon our present plans and business conditions to use and allocate the net proceeds of this offering. Our management, however, will have significant flexibility and discretion to apply the net proceeds of this offering. If an unforeseen event occurs or business conditions change, we may use the proceeds of this offering differently than as described in this prospectus. To the extent that the net proceeds we receive from this offering are not immediately used for the above purposes, we intend to invest our net proceeds in short-term, interest-bearing bank deposits or debt instruments.

DIVIDEND POLICY

We currently anticipate that we will retain any future earnings for the operation and expansion of our business. Accordingly, we do not currently anticipate declaring or paying any cash dividends on our Ordinary Shares for the foreseeable future. Any future determination relating to our dividend policy will be made at the discretion of our board of directors and will depend on then existing conditions. We may, by ordinary resolution, declare dividends at a general meeting of shareholders, but we are restricted from paying dividends in excess of the amount recommended by our board of directors. Pursuant to Singapore law, no dividend may be paid except out of our profits.

CAPITALIZATION

The following table sets forth our capitalization as of June 30, 2022:

You should read this capitalization table in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and the related notes appearing elsewhere in this prospectus.

(1)        Actual financials are prepared using a proforma basis to reflect the Reorganization; the business combination has been treated as a corporate restructuring (reorganization) of entities under common control and thus the current capital structure has been retroactively presented in prior periods as if such structure existed at that time consistent with the financial statements presented. This treatment is in accordance with ASC 805-50-45-5, the entities under common control are presented on a combined basis for all periods to which such entities were under common control. The consolidation of T20 Holdings and its subsidiaries has been accounted for at historical cost and prepared on the basis as if the aforementioned transactions had become effective as of the beginning of the first period presented in the accompanying consolidated financial statements.

(2)       Reflects the sale of the securities in this offering at an assumed initial public offering price of $5.00 per share, and after deducting the estimated underwriting discounts, and estimated offering expenses payable by us. The as adjusted information is illustrative only, and we will adjust this information based on the actual initial public offering price and other terms of this offering determined at pricing. Additional paid-in capital reflects the net proceeds we expect to receive, after deducting the underwriting discounts and estimated offering expenses payable by us. We estimate that such net proceeds will be approximately $6.2 million.

A $1.00 increase (decrease) in the assumed initial public offering price of $5.00 per share, which is the midpoint of the estimated range of the initial public offering price set forth on the front cover of this prospectus, would increase (decrease) each of additional paid-in capital, total shareholders’ equity and total capitalization by $1.7 million, assuming the number of Ordinary Shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the estimated underwriting discounts and estimated expenses payable by us.

Similarly, each increase (decrease) of one million shares in the number of shares offered by us in this offering would increase (decrease) the as adjusted net tangible book value by $0.17 per share and decrease (increase) the dilution to investors participating in this offering by $0.17 per share, assuming the assumed public offering price of $5.00 per share, remains the same, and after deducting estimated underwriting discounts and commissions and estimated expenses payable by us.

DILUTION

If you invest in our Ordinary Shares, your interest will be diluted for each Ordinary Share you purchase to the extent of the difference between the initial public offering price per Ordinary Share and our net tangible book value per Ordinary Share after this offering. Dilution results from the fact that the initial public offering price per Ordinary Share is substantially in excess of the net tangible book value per Ordinary Share attributable to the existing shareholders for our presently issued Ordinary Shares.

Our net tangible book value as of June 30, 2022, was $12.3 million, or $0.74 per Ordinary Share. Net tangible book value represents the amount of our total consolidated tangible assets, less the amount of our total consolidated liabilities. Dilution is determined by subtracting the net tangible book value per Ordinary Share (as adjusted for the offering) from the initial public offering price per Ordinary Share and after deducting the estimated underwriting discounts and the estimated offering expenses payable by us.

After giving effect to our sale of 2,000,000 Ordinary Shares offered in this offering based on the assumed initial public offering price of $5.00 per share, which is the midpoint of the estimated range of the initial public offering price shown on the front cover of this prospectus, after deduction of the estimated underwriting discounts and the estimated offering expenses payable by us, our as adjusted net tangible book value as of June 30, 2022, would have been $18,492,433, or $0.98 per issued Ordinary Share. This represents an immediate increase in net tangible book value of $0.25 per Ordinary Share to the existing shareholders, and an immediate dilution in net tangible book value of $4.02 per Ordinary Share to investors purchasing Ordinary Shares in this offering. The as adjusted information discussed above is illustrative only. The sale of the Ordinary Shares by the selling shareholder will have no effect on dilution.

A $1.00 change in the assumed public offering price of $5.00 per share would, in the case of an increase, increase and, in the case of a decrease, decrease our pro forma net tangible book value after giving effect to the offering by $1.7 million, the pro forma net tangible book value per Ordinary Share after giving effect to this offering by $0.09 and the dilution in pro forma net tangible book value per Ordinary Share to new investors in this offering by $0.91 assuming no change to the number of Ordinary Shares offered by us as set forth on the cover page of this prospectus, and after deducting underwriting discounts and estimated offering expenses (assuming no exercise of the over-allotment option to purchase additional Ordinary Shares, and assuming no exercise of the Representative’s Warrants). The pro forma information discussed above is illustrative only. Our net tangible book value following the completion of this offering is subject to adjustment based on the actual initial public offering price of our Ordinary Shares and other terms of this offering determined at pricing. We may also increase or decrease the number of Ordinary Shares we are offering. An increase of 1,000,000 Ordinary Shares in the number of Ordinary Shares offered by us would increase our as adjusted net tangible book value by approximately $4.4 million, or $0.17 per Ordinary Share and the dilution per Ordinary Share to investors purchasing Ordinary Shares in this offering would be $3.85 per Ordinary Share, assuming the assumed initial public offering price remains the same and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. Similarly, a decrease of 1,000,000 Ordinary Shares in the number of Ordinary Shares offered by us would decrease our as adjusted net tangible book value by approximately $4.4 million, or $0.19 per Ordinary Share and the dilution per Ordinary Share to investors purchasing Ordinary Shares in this offering would be $4.21 per Ordinary Share, assuming the assumed initial public offering price remains the same and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. The as adjusted information discussed above is illustrative only and will change based on the actual initial public offering price and other terms of this offering determined at pricing.

If the underwriters exercise their option in full to purchase an additional 486,619 Ordinary Shares and/or Representative’s Warrants in this offering, the as adjusted net tangible book value per Ordinary Share after this offering would be $1.05 per Ordinary Share, and the as adjusted dilution to new investors would be $3.95 per Ordinary Share, in each case assuming an initial public offering price of $5.00 per share, which is the midpoint of the price range set forth on the cover page of this prospectus, and after deducting underwriting discounts and commissions and the estimated offering expenses payable by us.

The following table illustrates such dilution:

Sales by the selling shareholder in this offering will cause the number of Ordinary Shares held by existing shareholders to be reduced to 16,227,505 shares, including 175,000 shares that vest upon completion of the offering, or 86.0% of the total number of our Ordinary Shares outstanding following the completion of this offering, and will increase the number of Ordinary Shares held by new investors to 2,637,500 shares, or 14.0% of the total number of our Ordinary Shares outstanding following the completion of this offering.

The following tables summarize, on a pro forma as adjusted basis as of June 30, 2022, the differences between existing shareholders and the new investors with respect to the number of Ordinary Shares purchased from us, the total consideration paid and the average price per Ordinary Share before deducting the estimated underwriting discounts and the estimated offering expenses payable by us.

The foregoing tables and calculations are based on Ordinary Shares outstanding and excludes:

The pro forma as adjusted information as discussed above is illustrative only. Our net tangible book value following the completion of this offering is subject to adjustment based on the actual initial public offering price of our Ordinary Shares and other terms of this offering determined at the pricing.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion together with our consolidated financial statements and the related notes included elsewhere in this prospectus. This discussion contains forward-looking statements about our business and operations. Our actual results may differ materially from those we currently anticipate as a result of many factors, including those we describe under “Risk Factors” and elsewhere in this prospectus. See “Forward-Looking Statements.”

Overview

We develop, design, and build globally relevant power generation solutions, supporting our clients with the transition to cleaner energy and developing our own energy focused projects. We are trusted to solve complex energy transition challenges through ingenious, tailored solutions. We create new growth opportunities for our clients, partners, and employees in the communities where they live and work, while delivering increased shareholder value. We provide contracting (service and maintenance, plan operation, repair and upgrade and new installations), consulting (audits and compliance, design and engineering, procurement and project management) and construction (renovation and refurbishment, temporary support services, fit-outs and new building) services in the building services and power generation sectors.

We have historically concentrated operations in PNG and have seven years of operating experience delivering significant energy and construction focused projects, including a 45 MW gas-fired power station which delivers electricity for our client and the national utility (PNG Power Limited) to feed into the Port Moresby power grid, greatly reducing the utility’s reliance on diesel generation. We believe that our proprietary power generation technology, specifically our Power Island FSRP technology has widespread applicability to, and significant expansion opportunities for, both regional and global communities, especially in island and coastal regions, and is expected to be a key pillar of our sustainable energy transition focus. The engineering designs for this have all been reviewed and verified by an independent engineer and we are in the process of protecting the related intellectual property.

Our energy business has delivered aggregate revenues of $89 million and $16.7 million in net income over the last three fiscal years ended December 31, 2021. For the six months ended June 30, 2022, our energy business delivered $4.3 million of revenue and $0.9 million in net income. We have an established track record of successfully working with major clients, suppliers, and partners, such as the Bank of South Pacific, Exxon Mobil Corporation, Solar Turbines Incorporated, which is a wholly-owned subsidiary of Caterpillar Inc., Hitachi ABB Power Grids, and Emerson Electric Co., as well as state owned enterprises, sovereign wealth funds, and the PNG national utility. Accordingly, we have a strong local presence in PNG and believe that we are well positioned to capitalize on the increasing economic development, urbanization, and demand for electrification across PNG, the wider APAC region, and beyond.

We currently have a strong pipeline of multiyear, national PNG projects, which we expect will deliver significant continued earnings growth for our business. The time between contract award, notice to proceed, and completion varies by customer and project. As we secure projects, we build our backlog of unbilled revenue and as we execute on projects, we deplete our backlog of unbilled revenue. New and continuing projects from existing customers and business development efforts fuel the growth of our backlog. As of December 31, 2021, we had $258.7 million of backlog representing a 170% increase from our backlog of $95.7 million as of December 31, 2020 driven primarily by the signing of the design, supply, and construction contracts for a 66 MW gas-fired power plant using the local LNG supply in the PNG Hela region. We have been directed by the PNG government National Executive Council to hold discussions and negotiations for a PNG wide deployment of our Power Island FSRP technology, which would provide a floating LNG power generation solution, to deliver the additional capacity needed to meet electrification targets throughout PNG, including to support existing and new mining projects. Our backlog as of June 30, 2022 is $373.0 million, a 44% increase from December 31, 2021, driven by the signing of the O&M contracts for the Hela Project.

Beyond taking steps to solidify our strong local presence and position to take advantage of the increasing economic development, urbanization, and demand for electrification across PNG and the wider APAC region, we are also actively working to secure several opportunities that, if secured, are expected to expand our geographic footprint and diversify our industry presence. We are developing a geothermal energy project located in Germany and we are developing more renewable energy projects worldwide, with a solar project under discussion in Indonesia pursuant to a signed agreement to collaborate with PT SSP and submission of a proposal to interested parties in Australia concerning a mix of solar, wind, and hydrogen sources, both of which are planned under a build, own, and operate model with a planned twenty-year PPA.

We are focused on developing projects that support the energy transition to a cleaner, healthier future and improving electrification to regions that frequently do not have access to reliable energy sources. We recognize that the shift to green energy is a journey and that there is no single solution which fits every situation. Countries are naturally at different stages of development, both economically and infrastructure-wise, and there are a host of geographical and technical aspects to consider when assessing electrification solutions.

In much of the APAC region, there are numerous smaller islands and coastal communities that require electricity, but are unable to connect to larger, national grids, due either to topography or separation by waterways including rivers, seas, and oceans that does not readily permit the construction of transmission lines. In our experience, such locations typically do not require, and it is traditionally uneconomical to develop, large power plants that can run on natural gas or conventional renewable energy sources, such as solar and wind, which we have found require too much land to generate the necessary power, do not provide the reliability a base load needs, and require regular maintenance to remain operational. This has been the collective observation of our management team based on their experiences in the industry for countries such as PNG, Indonesia, Philippines, Vietnam, and Thailand, and is also likely to be applicable in other areas of the Pacific, the Caribbean, and even the United States. Our management team has also observed that many of these countries use subsidized oil or diesel fuels to provide localized generation which results in high costs, poor reliability and availability, and, perhaps more importantly, exposes local communities to environmental damage. We believe that our proprietary power generation technology, specifically our Power Island FSRP technology, discussed below under “Business – Our Technology and Projects Under Development – PAWA PNG Power Island Project,” would provide a cleaner, more stable source of power to these communities. Our preliminary internal assessment indicates that our proprietary Power Island FSRP facility could provide a 25% increase in fuel efficiency as compared to diesel reciprocating engine technology, based on the evaluation of our estimates of our Power Island FSRP solution’s proprietary design and combined cycle capabilities, and published data for combined cycle capabilities demonstrate that efficiency in comparison with the manufacturers published efficiency data for a comparable multi-fuel reciprocating diesel generator currently in use in PNG, which would further reduce harmful environmental emissions such as NOx. To the extent that hydrogen logistics infrastructure develops, this solution could provide a pathway to effective remote green energy generation, a roadmap for which could be compared to the development of electric vehicles and EV charging stations.

Developed nations also face similar challenges, especially where industrial applications are needed to be located well away from population centers and energy infrastructure, for example for mining operations in the Australian outback, well away from population centers in Australia. Based on the collective observation of our management team from their experiences in the industry, while LNG remains a viable option, this becomes a complex delivery operation over a long distance, requires long-term, locked-in contracts, and still has associated carbon impacts. The desire to further reduce the carbon footprint of operations, combined with the social and economic incentives to do so, is providing a significant driver for the energy mix to be reconsidered, including improving battery storage solutions and newer technologies such as hydrogen being utilized alongside renewable energy sources such as wind and solar. With recent global shocks from the COVID-19 pandemic’s impact on global shipping and associated supply shortages, and more recently the war in Ukraine, countries and industries are taking a renewed look at their energy security versus a reliance on foreign sourced fuels, which will have an increasing impact on the decision-making processes moving forward for energy generation solutions.

According to a March 16, 2022 article on the Word Economic Form (weforum.org), climate change initiatives and the desire to reduce carbon emissions have continued to gain momentum in recent years leading up to the United Nations Climate Change Conference COP26, propelling the change in the mix of fuel sources used in power generation toward cleaner and more sustainable energy sources, examples of which include recent agreements between the USA and China to stop new investments in Coal fired power plants, and a move away from coal power plants as observed by the World Economic Forum. According to Deloitte’s Industry Outlooks 2021: Power, Utilities & Renewables report, businesses, states, cities, and utilities continued to announce decarbonization plans in 2020, with many utilities and their customers announcing and accelerating plans to fully decarbonize over the next three decades. Growing demand for clean energy persists, with renewables reporting rising levels of usage and capacity as well as declining costs. Potential new governmental and policy initiatives, including from the United States rejoining the Paris Agreement, could drive even further growth in renewable energy infrastructure. According to a January 2021 report by BloombergNEF, global investment in low-carbon energy transition projects exceeded $501 billion in 2020, a 9% increase from 2019, with renewables totaling $304 billion of the total global 2020 investment, for which wind and solar were the primary drivers, and according to a January 2022 article by BloombergNEF, global investment in low-carbon energy transition projects reached a new record totaling $755 billion in 2021. We believe that cleaner technology implementation and construction opportunities exist in a wide variety of industries, including in the renewable energy industry, as governments and power companies explore ways to reduce their carbon footprint and fulfill increased energy demands, especially in the wake of the deterioration and abandonment of existing coal-fired power plants in certain regions that has been observed by our management team from their experiences in the industry. The low price and environmental advantage of cleaner burning natural gas is expected to continue to drive demand for gas-fired electrical generating plants, at least as a transitionary step to long-term targets, alongside conversions of diesel or coal-fired power plants to natural gas and an increasing role for renewables.

We have enjoyed significant growth since our founding. Over the past three fiscal years, we have experienced a CAGR of 63% on our backlog revenue. A majority of our large projects are either self or co-developed or are awarded through a selective tender process among preferred suppliers, contributing to our strong pipeline of projects. Additionally, given our previous and current projects, we believe that we are now well-positioned to develop long-term recurring revenue and net income based on long-term O&M contracts as well as taking ownership positions in the projects we develop.

Effects of the COVID-19 Pandemic and Global Economic and Political Events

The unprecedented and adverse effects of COVID-19 in the regions where we have clients, suppliers, and partners has had an adverse effect on our operations through supply chain and/or logical complications and may in the future have a material adverse effect on our liquidity and financial condition. However, we do not view the impact of COVID-19 as a material trend or uncertainty due to the fact that infection and mortality rates for COVID-19 are declining as vaccinations increase globally, many countries are removing or loosening travel restrictions / quarantine requirements and many countries are preparing for, or experiencing, employees returning to the office. We anticipate continuing uncertainty arising from global economic factors such as upward inflationary pressure leading to recession even as global supply and logistics gradually resolve bottlenecks and demand pressure that are attributable, in part, to the easing of the COVID-19 pandemic. The adverse impacts from COVID-19 must also be viewed in the context of significant geo-political events such as the war in Ukraine which has exacerbated difficulties in global supply and logistics and increased fuel costs.

As previously discussed, we expect continuing uncertainty arising from global upward inflationary pressure, which has escalated over the course of 2021 and 2022. The primary factors driving the inflationary pressures are a resurgence in demand which had been pent-up as a result of the COVID-19 pandemic, and increased energy and food prices largely due to the war in Ukraine. While interest rates are rising around the world in an effort to mitigate inflationary pressures, it is expected these inflationary pressures will continue to be a factor in global markets in the near term.

Such increased inflationary pressure may translate to pricing increases in raw materials and the manufactured goods which rely upon the raw materials as inputs. This could impact both the equipment supply and construction costs which impact upon our planned projects. Additionally, we could face increases in the cost of shipping, driven by higher demand and increased fuel costs, all of which could impact our business. We have experienced the impact of this with cost increases seen in our procurement activities up to 15% above the expected procurement costs which adversely impacts our operation which in turn impact upon our profitability.

However, we do mitigate for these eventualities through the use of contingencies in our planning and costing processes which to date have been sufficient to absorb these cost impacts without impacting upon expected project outcomes. The impact of any inflationary price increases is also limited to the time window between our final pricing of projects and our order placement and by ensuring that LNG fuel-gas used for power generation is a pass-through cost to the end customer. Thus, we believe that we can successfully manage the impact of these global economic and political events and that they will not have a material adverse effect on our business, our financial performance or our liquidity.

We believe that with the shocks from the COVID-19 pandemic’s impact on global shipping and associated supply shortages, and more recently the war in Ukraine, countries and industries are taking a renewed look at their energy security versus a reliance on foreign sourced fuels, which we expect will have an increasing impact on the decision-making processes moving forward for energy generation solutions and which we expect will provide us with a significant opportunity to fill these energy generation solution needs.

Effects of Climate Change

Legislation or regulations that may be adopted to address climate change could also affect the markets for our services and projects by making our services and projects more or less desirable than competing sourcing of energy. To the extent that our services and projects are competing with higher greenhouse gas emitting energy sourcing (for example, our floating LNG power generation solution versus the utilization of subsidized oil or diesel fuels to provide localized generation), our services and projects would become more desirable in the market with more stringent limitations on greenhouse gas emissions. To the extent that our services and projects are competing with lower greenhouse gas emitting energy sources such as solar and wind, certain of our services and projects (such as our floating LNG power generation solution) would become less desirable in the market with more stringent limitations on greenhouse gas emissions, though we are actively expanding into the renewable energy space. We cannot predict with any certainty at this time how these possibilities may affect our operations.

Additionally, increasing attention to climate change, increasing societal expectations on companies to address climate change, and increasing investor and societal expectations regarding voluntary ESG disclosures may cause us to devote future capital expenditures to improving our ESG credentials, though we cannot predict with any certainty at this time the materiality of any such future capital expenditures.

Moreover, the potential physical effects of climate change, such as increased frequency and severity of storms, floods, fires, fog, mist, freezing conditions, sea-level rise, and other weather-related events, could affect our operations, infrastructure, and financial results. Operational impacts, such as the delay or cancellation of supply chain transportation, could result in loss of revenue. In addition, certain of our planned projects are in locations susceptible to the impacts of storm-related flooding and sea-level rise, which could result in costs and loss of revenue. There is a growing consensus today that climate change increases the frequency and severity of extreme weather events and, in recent years, the frequency of major weather events appears to have increased. We could incur significant costs to improve the climate resiliency of our infrastructure and otherwise prepare for, respond to, and mitigate such physical effects of climate change, including increased costs for insurance coverage in the aftermath of such effects. We are not able to accurately predict the materiality of any potential losses or costs associated with the physical effects of climate change with respect to our operations or the economies in our current or future market areas, but the increased frequency and severity of weather events could increase the negative impacts to economic conditions in these regions and result in a decline in the value or the destruction of our facilities and planned projects or affect our ability to utilize resources such as LNG in our proposed power generation solution. However, we have not experienced material physical effects of climate change on our operations and results to date, and, given that we are engaged in critical infrastructure projects, we intend to construct our power generating assets in accordance with prevailing standards in relation to structural integrity and environmental considerations.

Financial Operations Overview

The following discussion sets forth certain components of our statements of operations as well as factors that impact those items.

Our Revenue and Expenses

Revenues

We derive our revenues primarily from the design, supply, and construction of power generation equipment and facilities as well as associated operations and maintenance services to our clients who are mainly operators of power generation infrastructure. As a result, our revenues can vary substantially from period to period depending on the completion of projects and the start of new projects. Our O&M revenues provide a much more consistent recurring revenue stream with a mix of fixed, plus variable fees, based upon the level of output from the facility. While such revenues are currently a smaller proportion of our total revenues, these are expected to incrementally increase with each completed project moving into an O&M phase once built. As this trend continues over time it is expected to be complemented by an additional power generation revenue stream to provide a more stable revenue base.

In our combined financial statements, we report gross revenue, which represents total revenue billed to customers excluding taxes collected from customers.

We enter into contracts that contain two types of pricing characteristics:

Lump sum contracts, also referred to as fixed fee, typically require the performance of some, or all, of the obligations under the contract for a specified amount, subject to price adjustments only if the scope of the project changes or unforeseen requirements arise. Our fixed fee contracts generally include a specific scope of work and defined deliverables. These are usually large scale projects with complex, multi-year deliverables. Due to high value nature of the equipment being supplied, these contracts can result in very uneven revenue streams as the primary revenue recognition occurs when the equipment is delivered to the site. Due to the complex nature of the deliverable and the contingent liability on the equipment supply through the commissioning phase, a portion of this revenue is usually withheld until commissioning is complete to ensure it is matched with the full transfer of risk and reward; and

Variable performance contracts, which allow for a flexible performance level based upon the requirements of the end client, which may or may not be our direct client. These contracts typically have a fixed element, which provides for our base level of delivery of the services, and a variable performance element which reflects the costs of the variable delivery elements. The variable component can be for labor hours worked or hours of operation by machinery and is charged based upon actual utilization. For example, this can allow for electrical generation to be varied based upon the needs of the utility company managing the grid, which we deliver based under our operations contract with the independent power provider who is separately contracted to the grid for the power generation; or we can be contracted directly with the consumer of the electricity to manage their power generating assets. These contracts can be short-term or multi-year in duration, depending upon the need of the client. Under these types of contracts, there is no predetermined maximum fee, other than that set by the capacity of the station, and we generally experience low risk associated with cost overruns.

The majority of our assignments are lump sum in nature, representing approximately 74% and 90% of our revenue for the years ended December 31, 2021 and 2020, respectively. The proportion of our revenue which is lump sum in nature was 44% and 10% respectively for the six months ending June 30, 2022 and 2021, respectively. Recognizing revenue from lump sum assignments requires management estimates of both total contract value when there are contingent compensation elements of the fee arrangement and expected cost at completion. We closely monitor our progress to completion and adjust our estimates when necessary. We do not recognize revenue from work that is performed at risk with no documented customer commitment.

Expenses

Cost of Revenues. Cost of revenues includes costs directly attributable to the supply and construction of power generation infrastructure. These also include related costs such as logistics costs and specialist consultants to support design or commissioning.

Selling, General, and Administrative. Selling, general, and administrative expenses include all our administrative costs for operating our offices and facilities, depreciation of assets, and our sales and marketing costs.

Employee Compensation and Benefits. Employee compensation and benefits expenses include all salary and support costs for our staff, which will include healthcare, allowances, and meals where appropriate.

Consulting Fees. Consulting fees include costs of specialists and advisors to support the operations of the business, such as in the areas of finance, human resources, and legal.

Other Income (Expenses)

Other income (expenses) consists of other non-operating and non-core expenses.

Income Tax Expense

Income tax expense, current and deferred, includes estimated corporate tax expenses associated with our net income, as apportioned to the jurisdictions in which we operate. Estimates of our tax expense include both current and deferred tax expense along with all available tax incentives and credits.

Backlog

We measure the value of our undelivered gross revenue to calculate our backlog and predict future revenue. Backlog includes awarded, contracted and otherwise secured commitments. We report backlog quarterly as of the end of the last day of the reporting period. We use backlog to predict revenue growth and anticipate appropriate future staffing needs. Backlog definitions and methods of calculation vary within our industry. As such, backlog is not a reliable metric on which to evaluate us relative to our peers. Backlog neither derives from, nor connects to, any GAAP results.

Results of Operations

Six Months Ended June 30, 2022, compared with Six Months Ended June 30, 2021

This section includes a summary of our historical results of operations, followed by detailed comparisons of our results for the six months ended June 30, 2022 and 2021, respectively. We have derived this data from our unaudited consolidated financial statements included elsewhere in this prospectus.

Revenues

Revenues increased 249% to $4,318,268 for the six months ended June 30, 2022, from $1,235,595, from the six months ended June 30, 2021. The increase was principally driven by timing differences in revenue recognitions in the periods, with 2022 seeing an increase in the recurring revenues from the Dirio Power Station O&M agreement having moved into the operations phase, as well as a portion of the revenues for the next major project, Hela Power Station, also being recognized for the engineering and project development works being undertaken.

Cost of Revenues

Cost of revenues decreased 68% to $383,886 for the six months ended June 30, 2022, from $1,186,667, from the six months ended June 30, 2021. The decrease was driven primarily by the change in nature of the revenues, with the revenues being delivered by staff delivering services as opposed to their being direct cost of goods sold being attributed to these revenues.

Selling, General, and Administrative Expenses

Selling, general, and administrative expenses decreased 2%, to $788,073 for the six months ended June 30, 2022 from $802,717, for the six months ended December 31, 2021. The decrease was driven by small movements across all expense lines with no significant year on year movements in a particular expense line.

Employee Compensation and Benefits Expenses

Employee compensation and benefits expenses decreased, to $1,598,057 for the six months ended June 30, 2022 from $1,828,899 for the six months ended June 30, 2021, a reduction of $230,842 or 13%. The decrease was driven primarily by reduced staff base in line with adjusted operational requirements.

Consulting Fees

Consulting fees increased 62%, to $343,463 for the six months ended June 30, 2022 from $211,782, for the six months ended June 30, 2021. The increase was driven primarily by additional consulting costs supporting the efforts of the business in listing on the Nasdaq.

Income (loss) from Operations

Income from operations increased by $3,999,260 to $1,204,789 for the six months ended June 30, 2022 as compared to a loss from operations of $2,794,470 for the six months ended June 30, 2021. The increase in income from operations is the result of the increase in revenues and lower cost of goods sold as detailed above. 

Other Income (Expenses)

Other Income

Other income decreased to $1,839 for the six months ended June 30 2022 from $23,369 for the six months ended June 30, 2021. The decrease was driven by minor adjustments in the business.

Financing Expenses

Financing expenses increased 8%, to $48,394 for the six months ended June 30, 2022, from $44,749 for the six months ended June 30, 2021. The increase was driven primarily by the additional loan for purchase of a residential property, partially offset by the ongoing reduction in outstanding balances and corresponding interest charge reductions.

Income Tax Expense

Income tax expense increased for the six months ended June 30, 2022 to $220,566 from a repayment position of $510,309, in line with the relative Net Income from Operations positions.

Other key performance metrics   

Non-GAAP Financial Measures

We have included EBITDA and Adjusted EBITDA in this Report as supplements to GAAP measures of performance to provide investors with an additional financial analytical framework which management uses, in addition to historical operating results, as the basis for financial, operational and planning decisions and present measurements that third parties have indicated are useful in assessing the Company and its results of operations. “EBITDA” represents net income before interest, taxes, depreciation and amortization.

"Adjusted EBITDA” represents the underlying EBITDA performance of the ongoing business, having adjusted for temporary, one-off factors which are impacting upon the short-term financial results of the business. We believe this metric provides a reliable indicator on the relative performance of the operation of the business.

EBITDA and Adjusted EBITDA are presented because we believe they provide additional useful information to investors due to the various items during the period. EBITDA and Adjusted EBITDA are also frequently used by analysts, investors and other interested parties to evaluate companies in our industry. EBITDA and Adjusted EBITDA have limitations as analytical tools, and you should not consider them in isolation, or as a substitute for analysis of our operating results as reported under GAAP. Some of these limitations are: EBITDA and Adjusted EBITDA do not reflect cash expenditures, future requirements for capital expenditures, or contractual commitments; EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, working capital needs; and EBITDA and Adjusted EBITDA do not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on debt or cash income tax payments.

For example, although depreciation and amortization are noncash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA and Adjusted EBITDA do not reflect any cash requirements for such replacements. Additionally, other companies in our industry may calculate EBITDA and Adjusted EBITDA differently than the T20 Group does, limiting its usefulness as a comparative measure. You should not consider EBITDA and Adjusted EBITDA in isolation, or as substitutes for analysis of the Company’s results as reported under GAAP.

The Company’s presentation of these measures should not be construed as an inference that future results will be unaffected by unusual or nonrecurring items. We compensate for these limitations by providing a reconciliation of each of these non-GAAP measures to the most comparable GAAP measure. We encourage investors and others to review our business, results of operations, and financial information in their entirety, not to rely on any single financial measure, and to view these non-GAAP measures in conjunction with the most directly comparable GAAP financial measure.

EBITDA and Adjusted EBITDA

The following tables presents the calculation of EBITDA and the estimated Adjusted EBITDA of the business as of the dates indicated:

The Depreciation & Amortization figures in the above table include the Depreciation charges on the ROU Asset. This asset is a result of our adoption of the Lease Accounting Standard which creates both an asset and a liability on the balance sheet. The asset reflects the benefit of the lease and is depreciated over the length of the lease, while the liability represents the future payment obligations of the lease. The aim of this approach is to reflect a more transparent view of leases in the Financial Statements. Please see “Right of Use Lease Asset” in the Financial Statements for further details on this. As the ROU Asset treatment is a non-cash impact, these amounts are not included in the Depreciation figures included in the Statements of Cash Flows within the Financial Statements. This results in a difference in the reported Depreciation and Amortization figures between this reconciliation and the Depreciation and Amortization figures in the Statements of Cash Flows contained in the Financial Statements.”

One off listing costs represents the amount of cost which has been incurred as a result of this offering, which are non-recurring, irregular and one-time items that may distort EBITDA when comparing it to other periods. These costs include the building of a new company website to meet listing requirements, associated legal costs, financial advisory and other expenses related to the listing process.

Backlog

Estimated backlog represents the amount of revenue we expect to realize from future work on uncompleted construction contracts, including new contracts under which work has not begun, as well as revenue from O&M agreements which have variable operational ranges. The estimated backlog for work under O&M agreements is determined based on estimates of customer demand based on communications with our customers and their contractual minimums. Based on current expectations of our customers’ requirements, we expect to realize approximately 3% of our estimated June 30 2022, backlog in 2022 and 45% in 2023. The following table presents estimated backlog as of the dates indicated:

As of June 30, 2022, 12% of our 36-month backlog is attributable to amounts under O&M agreements, pursuant to which our customers have variability in the operating level which impacts the contractually committed revenues above the minimum revenues defined for the fixed operations. These agreements can be cancelled on short or no advance notice in certain circumstances. Timing of revenue for construction and installation projects included in our backlog can be subject to change as a result of customer, regulatory, or other delays or cancellations, including from the potential adverse effects of the COVID-19 pandemic on economic activity, and/or other project-related factors. These changes could cause estimated revenue to be realized in periods later than originally expected, or not at all. We occasionally experience postponements, cancellations, and reductions in expected future work from O&M agreements and/or construction projects due to changes in our customers’ spending plans, market volatility, changes in governmental permitting, regulatory delays, and/or other factors. There can be no assurance as to our customers’ requirements or if actual results will be consistent with the estimates included in our forecasts. As a result, our backlog as of any particular date is an uncertain indicator of future revenue and earnings.

Year Ended December 31, 2021 compared with Year Ended December 31, 2020

This section includes a summary of our historical results of operations, followed by detailed comparisons of our results for the years ended December 31, 2021 and 2020, respectively. We have derived this data from our audited annual consolidated financial statements included elsewhere in this prospectus.

Revenues

Revenues decreased to $9,250,397 for the year ended December 31, 2021 from $34,623,956, or 73%, for the year ended December 31, 2020. The decrease was principally driven by phasing between major projects with the completion of the Caution Bay, Central Province 45 MW gas-fired power station in 2020 and the delays in the next major project revenues commencing. The revenues in 2020 were predominantly related to the sale of equipment and materials as part of a lump sum contract for the equipment supply and construction of the Dirio Power Station. On completion, this moved into preservation mode under our Operations & Maintenance contract until the national utility was ready to accept power from the Dirio Power Station, which occurred in November 2021, after which our revenues increased due to moving into the operations phase. The commencement of the next project was delayed due to the impact of Covid-19 and its impact upon the client. The detailed planning of this project was commenced in 2021, whilst the full EPC contracts have been signed, the majority of these revenues are not expected to be delivered until 2023.

Cost of Revenues

Cost of revenues decreased to $1,116,385 for the year ended December 31, 2021 from $19,602,243, or 94%, for the year ended December 31, 2020. The decrease was driven primarily by the cost of revenues reducing in line with the Revenues and the lower costs during the planning and design stages of a project.

Selling, General, and Administrative Expenses

Selling, general, and administrative expenses decreased to $1,270,365 for the year ended December 31, 2021 from $1,924,663, or 34%, for the year ended December 31, 2020. The decrease was driven primarily by the reduced scale of operations in line with the revenues of the business. In particular, insurance costs declined by $189,247 or 48% due to the cessation of the specific contractors all risks insurance policy in place for the supply and construction of the Dirio Power Station in 2020. External legal costs also declined by $113,431 or 100% due to the reduction in external legal costs driven by the hiring of an internal legal counsel to help manage our cost base. The other key driver of the cost reduction was the decrease in travel and accommodation costs by $108,304 or 38%, due to reduced demand for travel to Papua New Guinea in 2021 compared to 2020 with the demands of the commissioning of the Dirio Power Station and the associated challenges of COVID-19 impacting on costs of travel and quarantine requirements.

Employee Compensation and Benefits Expenses

Employee compensation and benefits expenses decreased to $2,822,090 for the year ended December 31, 2021 from $3,389,509, or 17%, for the year ended December 31, 2020. The decrease was driven primarily by reduced staff base in line with operations in the year.

Consulting Fees

Consulting fees increased to $467,467 for the year ended December 31, 2021 from $456,891, or 2%, for the year ended December 31, 2020. The increase was driven primarily by small price variations year on year.

Income from Operations

Income from operations decreased by $5,676,559 or 61.1% to $3,574,090 for the year ended December 31, 2021, as compared to $9,250,649 for the year ended December 31, 2020. The decrease in income from operations is the result of the reduction in revenues detailed above. 

Other Income (Expenses)

Other Income

Other income decreased to $48,624 for the year ended December 31, 2021 from $197,611, or 75%, for the year ended December 31, 2020. The decrease was driven primarily by the reduction in interest income on trade balances.

Financing Expenses

Financing expenses decreased to $93,844 for the year ended December 31, 2021 from $107,036, or 12%, for the year ended December 31, 2020. The decrease was driven primarily by the reduction in outstanding balances and corresponding interest charge reductions.

Income Tax Expense

Income tax expense decreased for the year ended December 31, 2021, to $609,602, from $2,172,992 for the year ended December 31, 2022, in line with the reduction in the Net Income from Operations.

Other key performance metrics 

Non-GAAP Financial Measures

We have included EBITDA and Adjusted EBITDA in this Report as supplements to GAAP measures of performance to provide investors with an additional financial analytical framework which management uses, in addition to historical operating results, as the basis for financial, operational and planning decisions and present measurements that third parties have indicated are useful in assessing the Company and its results of operations. “EBITDA” represents net income before interest, taxes, depreciation and amortization.

"Adjusted EBITDA” represents the underlying EBITDA performance of the ongoing business, having adjusted for temporary, one-off factors which are impacting upon the short-term financial results of the business. We believe this metric provides a reliable indicator on the relative performance of the operation of the business.

EBITDA and Adjusted EBITDA are presented because we believe they provide additional useful information to investors due to the various items during the period. EBITDA and Adjusted EBITDA are also frequently used by analysts, investors and other interested parties to evaluate companies in our industry. EBITDA and Adjusted EBITDA have limitations as analytical tools, and you should not consider them in isolation, or as a substitute for analysis of our operating results as reported under GAAP. Some of these limitations are: EBITDA and Adjusted EBITDA do not reflect cash expenditures, future requirements for capital expenditures, or contractual commitments; EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, working capital needs; and EBITDA and Adjusted EBITDA do not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on debt or cash income tax payments.

For example, although depreciation and amortization are noncash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA and Adjusted EBITDA do not reflect any cash requirements for such replacements. Additionally, other companies in our industry may calculate EBITDA and Adjusted EBITDA differently than the T20 Group does, limiting its usefulness as a comparative measure. You should not consider EBITDA and Adjusted EBITDA in isolation, or as substitutes for analysis of the Company’s results as reported under GAAP.

The Company’s presentation of these measures should not be construed as an inference that future results will be unaffected by unusual or nonrecurring items. We compensate for these limitations by providing a reconciliation of each of these non-GAAP measures to the most comparable GAAP measure. We encourage investors and others to review our business, results of operations, and financial information in their entirety, not to rely on any single financial measure, and to view these non-GAAP measures in conjunction with the most directly comparable GAAP financial measure.

EBITDA and Adjusted EBITDA

The following tables presents the calculation of EBITDA and the estimated Adjusted EBITDA of the business as of the dates indicated:

The Depreciation & Amortization figures in the above table include the Depreciation charges on the ROU Asset. This asset is a result of our adoption of the Lease Accounting Standard which creates both an asset and a liability on the balance sheet. The asset reflects the benefit of the lease and is depreciated over the length of the lease, while the liability represents the future payment obligations of the lease. The aim of this approach is to reflect a more transparent view of leases in the Financial Statements. Please see “Right of Use Lease Asset” in the Financial Statements for further details on this. As the ROU Asset treatment is a non-cash impact, these amounts are not included in the Depreciation figures included in the Statements of Cash Flows within the Financial Statements. This results in a difference in the reported Depreciation and Amortization figures between this reconciliation and the Depreciation and Amortization figures in the Statements of Cash Flows contained in the Financial Statements.”

One off listing costs represents the amount of cost which has been incurred as a result of this offering, which are non-recurring, irregular and one-time items that may distort EBITDA when comparing it to other periods. These costs include the building of a new company website to meet listing requirements, associated legal costs, financial advisory and other expenses related to the listing process.

Backlog

Estimated backlog represents the amount of revenue we expect to realize from future work on uncompleted construction contracts, including new contracts under which work has not begun, as well as revenue from O&M agreements which have variable operational ranges. Estimated backlog for work under O&M agreements is determined based on estimates of customer demand based on communications with our customers and their contractual minimums. The following table presents estimated backlog as of the dates indicated: